Document and Entity Information
Document and Entity Information Statement - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 27, 2020 | |
Document Information | ||
Document Type | 10-Q | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 0001578735 | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-36311 | |
Entity Registrant Name | NATIONAL GENERAL HOLDINGS CORP. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-1046208 | |
Entity Address, Address Line One | 59 Maiden Lane | |
Entity Address, Address Line Two | 38th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10038 | |
City Area Code | 212 | |
Local Phone Number | 380-9500 | |
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 Listing, Par Value Per Share | $ 0.01 | |
Entity Common Stock, Shares Outstanding | 113,750,129 | |
Common Stock, par value $0.01 per share | ||
Document Information | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | NGHC | |
Security Exchange Name | NASDAQ | |
7.50% Non-Cumulative Preferred Stock, Series A | ||
Document Information | ||
Title of 12(b) Security | 7.50% Non-Cumulative Preferred Stock, Series A | |
Trading Symbol | NGHCP | |
Security Exchange Name | NASDAQ | |
Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B | ||
Document Information | ||
Title of 12(b) Security | Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B | |
Trading Symbol | NGHCO | |
Security Exchange Name | NASDAQ | |
Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series C | ||
Document Information | ||
Title of 12(b) Security | Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series C | |
Trading Symbol | NGHCN | |
Security Exchange Name | NASDAQ | |
7.625% Subordinated Notes due 2055 | ||
Document Information | ||
Title of 12(b) Security | 7.625% Subordinated Notes due 2055 | |
Trading Symbol | NGHCZ | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Investments: | ||
Debt securities, available-for-sale, at fair value (allowance for expected credit losses $2,927 - 2020) (Exchanges - $313,743 and $324,249; allowance for expected credit losses $298 - 2020) | $ 4,382,254 | $ 4,476,358 |
Short-term investments (Exchanges - $19,778 and $5,245) | 70,761 | 67,353 |
Other investments (related parties - $235,843 and $238,841) | 287,683 | 311,287 |
Total investments | 4,740,698 | 4,854,998 |
Cash and cash equivalents (Exchanges - $0 and $959) | 309,802 | 135,942 |
Restricted cash and cash equivalents (Exchanges - $116 and $24) | 30,070 | 28,521 |
Accrued investment income (related parties - $1,203 and $2,391) (Exchanges - $2,152 and $2,001) | 26,131 | 30,927 |
Premiums and other receivables (net of allowance for expected credit losses $27,114 - 2020; net of bad debt allowance $24,067 - 2019) (Exchanges - $49,344 and $55,859; net of allowance for expected credit losses $1,013 - 2020; net of bad debt allowance $541 - 2019) | 1,541,760 | 1,428,948 |
Deferred acquisition costs (Exchanges - $22,737 and $23,307) | 277,368 | 263,523 |
Reinsurance recoverable (net of allowance for expected credit losses $517 - 2020) (Exchanges - $119,508 and $119,125; net of allowance for expected credit losses $173 - 2020) | 1,401,681 | 1,394,308 |
Prepaid reinsurance premiums (Exchanges - $91,003 and $105,894) | 511,648 | 575,747 |
Property and equipment, net (Exchanges - $93 and $241) | 398,161 | 403,827 |
Intangible assets, net (Exchanges - $3,180 and $3,225) | 357,568 | 365,823 |
Goodwill | 179,328 | 179,328 |
Prepaid and other assets (Exchanges - $4,110 and $3,521) | 86,359 | 94,642 |
Total assets | 9,860,574 | 9,756,534 |
Liabilities: | ||
Unpaid loss and loss adjustment expense reserves (Exchanges - $197,934 and $205,786) | 2,848,193 | 2,886,414 |
Unearned premiums and other revenue (Exchanges - $232,538 and $252,553) | 2,376,375 | 2,312,241 |
Reinsurance payable (Exchanges - $38,353 and $35,689) | 553,982 | 562,844 |
Accounts payable and accrued expenses (Exchanges - $5,746 and $8,497) | 313,638 | 315,366 |
Debt | 685,078 | 686,006 |
Other liabilities (Exchanges - $41,266 and $30,803) | 411,820 | 376,169 |
Total liabilities | 7,189,086 | 7,139,040 |
Stockholders’ equity: | ||
Common stock, $0.01 par value - authorized 150,000,000 shares, issued and outstanding 113,708,996 shares - 2020; authorized 150,000,000 shares, issued and outstanding 113,368,811 shares - 2019. | 1,137 | 1,134 |
Preferred stock, $0.01 par value - authorized 10,000,000 shares, issued and outstanding 2,565,120 shares - 2020; authorized 10,000,000 shares, issued and outstanding 2,565,120 shares - 2019. Aggregate liquidation preference $450,000 - 2020, $450,000 - 2019. | 450,000 | 450,000 |
Additional paid-in capital | 1,066,075 | 1,065,634 |
Accumulated other comprehensive income: | ||
Unrealized foreign currency translation adjustment, net of tax | (472) | (202) |
Unrealized gain on investments, net of tax | 44,317 | 74,750 |
Total accumulated other comprehensive income | 43,845 | 74,548 |
Retained earnings | 1,144,473 | 1,058,138 |
Total National General Holdings Corp. Stockholders’ Equity | 2,705,530 | 2,649,454 |
Noncontrolling interest | (34,042) | (31,960) |
Total stockholders’ equity | 2,671,488 | 2,617,494 |
Total liabilities and stockholders’ equity | $ 9,860,574 | $ 9,756,534 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt securities, available-for-sale | $ 4,382,254 | $ 4,476,358 |
Short-term investments | 70,761 | 67,353 |
Cash and cash equivalents | 309,802 | 135,942 |
Other investments | 287,683 | 311,287 |
Restricted cash and cash equivalents | 30,070 | 28,521 |
Accrued investment income | 26,131 | 30,927 |
Premiums and other receivables, net | 1,541,760 | 1,428,948 |
Deferred acquisition costs | 277,368 | 263,523 |
Reinsurance recoverable, net | 1,401,681 | 1,394,308 |
Prepaid reinsurance premiums | 511,648 | 575,747 |
Premises and equipment, net | 398,161 | 403,827 |
Intangible assets, net | 357,568 | 365,823 |
Prepaid and other assets | 86,359 | 94,642 |
Unpaid loss and loss adjustment expense reserves | 2,848,193 | 2,886,414 |
Unearned premiums and other revenue | 2,376,375 | 2,312,241 |
Reinsurance payable | 553,982 | 562,844 |
Accounts payable and accrued expenses | 313,638 | 315,366 |
Other liabilities | $ 411,820 | $ 376,169 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 113,708,996 | 113,368,811 |
Common stock, shares outstanding | 113,708,996 | 113,368,811 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Shares of preferred stock issued | 2,565,120 | 2,565,120 |
Preferred stock, shares outstanding | 2,565,120 | 2,565,120 |
Aggregate liquidation preference | $ 450,000 | $ 450,000 |
Debt securities, available-for sale, allowance for expected credit losses | 2,927 | 0 |
Premiums and other receivables, allowance for expected credit losses | 27,114 | 24,067 |
Reinsurance recoverable, allowance for expected credit losses | 517 | 0 |
Reciprocal Exchanges | ||
Debt securities, available-for-sale | 313,743 | 324,249 |
Short-term investments | 19,778 | 5,245 |
Cash and cash equivalents | 0 | 959 |
Restricted cash and cash equivalents | 116 | 24 |
Accrued investment income | 2,152 | 2,001 |
Premiums and other receivables, net | 49,344 | 55,859 |
Deferred acquisition costs | 22,737 | 23,307 |
Reinsurance recoverable, net | 119,508 | 119,125 |
Prepaid reinsurance premiums | 91,003 | 105,894 |
Premises and equipment, net | 93 | 241 |
Intangible assets, net | 3,180 | 3,225 |
Prepaid and other assets | 4,110 | 3,521 |
Unpaid loss and loss adjustment expense reserves | 197,934 | 205,786 |
Unearned premiums and other revenue | 232,538 | 252,553 |
Reinsurance payable | 38,353 | 35,689 |
Accounts payable and accrued expenses | 5,746 | 8,497 |
Other liabilities | 41,266 | 30,803 |
Debt securities, available-for sale, allowance for expected credit losses | 298 | |
Premiums and other receivables, allowance for expected credit losses | 1,013 | 541 |
Reinsurance recoverable, allowance for expected credit losses | 173 | |
Related Parties | ||
Other investments | 235,843 | 238,841 |
Accrued investment income | $ 1,203 | $ 2,391 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Net earned premium | $ 1,075,206 | $ 964,157 |
Ceding commission income | 50,305 | 69,534 |
Service and fee income | 179,441 | 165,507 |
Net investment income | 30,243 | 33,445 |
Net gain (loss) on Investments | (6,861) | 22 |
Total revenues | 1,328,334 | 1,232,665 |
Expenses: | ||
Loss and loss adjustment expense | 691,998 | 651,809 |
Acquisition costs and other underwriting expenses | 228,242 | 211,918 |
General and administrative expenses | 267,569 | 248,094 |
Interest expense | 11,780 | 12,999 |
Total expenses | 1,199,589 | 1,124,820 |
Income before provision for income taxes | 128,745 | 107,845 |
Provision for income taxes | 28,172 | 22,506 |
Net income | 100,573 | 85,339 |
Net loss attributable to noncontrolling interest | 186 | 6,419 |
Net income attributable to NGHC | 100,759 | 91,758 |
Dividends on preferred stock | (7,875) | (7,875) |
Net income attributable to NGHC common stockholders | $ 92,884 | $ 83,883 |
Earnings per common share (“EPS”): | ||
Basic EPS | $ 0.82 | $ 0.74 |
Diluted EPS | $ 0.80 | $ 0.72 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 100,573 | $ 85,339 |
Other comprehensive income: | ||
Foreign currency translation adjustment | (342) | (4,253) |
Income tax effect | 72 | 889 |
Total foreign currency translation adjustment, net of tax | (270) | (3,364) |
Gross unrealized gain (loss) on investments before reclassifications | (43,400) | 76,785 |
Income tax effect | 9,114 | (16,125) |
Total change in net unrealized gain (loss) on investments, net of tax | (34,286) | 60,660 |
Reclassification adjustments for investments gain or loss to net income: | ||
Net realized loss on investments | 2,663 | 120 |
Income tax effect | (559) | (25) |
Total loss on investments reclassifications to net income, net of tax | 2,104 | 95 |
Other comprehensive income (loss) before income tax effect | (41,079) | 72,652 |
Income tax effect | 8,627 | (15,261) |
Other comprehensive income (loss), net of tax | (32,452) | 57,391 |
Comprehensive income | 68,121 | 142,730 |
Comprehensive loss attributable to noncontrolling interest | 1,935 | 1,739 |
Comprehensive income attributable to NGHC | $ 70,056 | $ 144,469 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common stock | Preferred stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-controlling Interest |
Common stock, shares outstanding, beginning balance at Dec. 31, 2018 | 112,940,595 | ||||||
Common stock, amount, beginning balance at Dec. 31, 2018 | $ 1,129 | ||||||
Preferred stock, shares outstanding, beginning balance at Dec. 31, 2018 | 2,565,120 | ||||||
Preferred stock, amount, beginning balance at Dec. 31, 2018 | $ 450,000 | ||||||
Total stockholders' equity, amount, beginning balance at Dec. 31, 2018 | $ 2,200,871 | $ 1,057,783 | $ (52,130) | $ 764,056 | $ (19,967) | ||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 85,339 | 91,758 | (6,419) | ||||
Foreign currency translation adjustment, net of tax | (3,364) | (3,364) | |||||
Change in unrealized gain (loss) on investments, net of tax | 60,755 | 56,075 | 4,680 | ||||
Common stock dividends declared | (4,524) | (4,524) | |||||
Preferred stock dividends declared | (7,875) | (7,875) | |||||
Common stock issued under employee stock plans and exercises of stock options | 292,276 | ||||||
Common stock issued under employee stock plans and exercises of stock options, value | 93 | $ 2 | 91 | ||||
Shares withheld related to net share settlement, shares | (95,525) | ||||||
Shares withheld related to net share settlement, value | (2,435) | (2,435) | |||||
Stock-based compensation | 2,622 | 2,622 | |||||
Common stock, shares outstanding, ending balance at Mar. 31, 2019 | 113,137,346 | ||||||
Common stock, amount, ending balance at Mar. 31, 2019 | $ 1,131 | ||||||
Preferred stock, shares outstanding, ending balance at Mar. 31, 2019 | 2,565,120 | ||||||
Preferred stock, amount, ending balance at Mar. 31, 2019 | $ 450,000 | ||||||
Total stockholders' equity, amount, ending balance at Mar. 31, 2019 | $ 2,331,482 | 1,058,061 | 581 | 843,415 | (21,706) | ||
Common stock, shares outstanding, beginning balance at Dec. 31, 2019 | 113,368,811 | 113,368,811 | |||||
Common stock, amount, beginning balance at Dec. 31, 2019 | $ 1,134 | ||||||
Preferred stock, shares outstanding, beginning balance at Dec. 31, 2019 | 2,565,120 | 2,565,120 | |||||
Preferred stock, amount, beginning balance at Dec. 31, 2019 | $ 450,000 | ||||||
Total stockholders' equity, amount, beginning balance at Dec. 31, 2019 | $ 2,617,494 | 1,065,634 | 74,548 | 1,058,138 | (31,960) | ||
Total stockholders' equity, amount, beginning balance (Accounting Standards Update 2016-13) at Dec. 31, 2019 | (1,010) | (863) | (147) | ||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 100,573 | 100,759 | (186) | ||||
Foreign currency translation adjustment, net of tax | (270) | (270) | |||||
Change in unrealized gain (loss) on investments, net of tax | (32,182) | (30,433) | (1,749) | ||||
Common stock dividends declared | (5,686) | (5,686) | |||||
Preferred stock dividends declared | (7,875) | (7,875) | |||||
Common stock issued under employee stock plans and exercises of stock options | 487,414 | ||||||
Common stock issued under employee stock plans and exercises of stock options, value | 388 | $ 3 | 385 | ||||
Shares withheld related to net share settlement, shares | (147,229) | ||||||
Shares withheld related to net share settlement, value | (3,106) | (3,106) | |||||
Stock-based compensation | $ 3,162 | 3,162 | |||||
Common stock, shares outstanding, ending balance at Mar. 31, 2020 | 113,708,996 | 113,708,996 | |||||
Common stock, amount, ending balance at Mar. 31, 2020 | $ 1,137 | ||||||
Preferred stock, shares outstanding, ending balance at Mar. 31, 2020 | 2,565,120 | 2,565,120 | |||||
Preferred stock, amount, ending balance at Mar. 31, 2020 | $ 450,000 | ||||||
Total stockholders' equity, amount, ending balance at Mar. 31, 2020 | $ 2,671,488 | $ 1,066,075 | $ 43,845 | $ 1,144,473 | $ (34,042) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 100,573 | $ 85,339 |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||
Net (gain) loss on investments | 6,861 | (22) |
Credit loss expense | 25,766 | 20,967 |
Depreciation and amortization | 21,278 | 27,135 |
Stock-based compensation expense | 3,162 | 2,622 |
Other, net | 6,483 | (1,251) |
Changes in assets and liabilities: | ||
Accrued investment income | 4,020 | 658 |
Premiums and other receivables | (139,339) | (228,239) |
Deferred acquisition costs | (13,846) | (17,020) |
Reinsurance recoverable | (7,889) | 121,500 |
Prepaid reinsurance premiums | 64,099 | 28,058 |
Prepaid expenses and other assets | 8,551 | 82,591 |
Unpaid loss and loss adjustment expense reserves | (38,221) | (83,073) |
Unearned premiums and other revenue | 64,134 | 161,680 |
Reinsurance payable | (8,862) | (130,353) |
Accounts payable and accrued expenses | 6,623 | 9,458 |
Other liabilities | 40,656 | 35,160 |
Net cash provided by operating activities | 144,049 | 115,210 |
Cash flows from investing activities: | ||
Purchases of debt securities, available-for-sale | (90,283) | (94,525) |
Purchases of short-term investments | (194,423) | (678,000) |
Purchases of other investments | (2,579) | (110) |
Purchases of property and equipment | (9,818) | (57,622) |
Proceeds from sale of debt securities, available-for-sale | 25,566 | 21,066 |
Proceeds from maturities of debt securities, available-for-sale | 111,439 | 62,072 |
Proceeds from sale of short-term investments | 191,188 | 637,682 |
Proceeds from sale and return of other investments | 20,694 | 2,805 |
Net cash provided by (used in) investing activities | 51,784 | (106,632) |
Cash flows from financing activities: | ||
Payments of debt issuance costs | 0 | (1,726) |
Repayments of debt and principal payments under capital leases obligations | (3,112) | (3,034) |
Issuance of common stock — employee share options | 388 | 93 |
Taxes paid related to net share settlement of equity awards | (3,106) | (2,435) |
Dividends paid to common shareholders | (5,669) | (4,518) |
Dividends paid to preferred shareholders | (8,925) | (8,867) |
Net cash used in financing activities | (20,424) | (20,487) |
Effect of exchange rate changes on cash and cash equivalents | 0 | (1,402) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 175,409 | (13,311) |
Cash, cash equivalents, and restricted cash at beginning of the period | 164,463 | 233,583 |
Cash, cash equivalents, and restricted cash at end of the period | 339,872 | 220,272 |
Common stock | ||
Dividends Payable | ||
Dividends Payable | 5,686 | 4,524 |
Preferred stock | ||
Dividends Payable | ||
Dividends Payable | $ 7,875 | $ 7,875 |
Basis of Reporting
Basis of Reporting | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Reporting | Basis of Reporting The accompanying unaudited interim condensed consolidated financial statements include the accounts of National General Holdings Corp. and its subsidiaries (the “Company” or “NGHC”) and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These interim condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, previously filed with the SEC on February 20, 2020. The balance sheet at December 31, 2019, has been derived from the audited consolidated financial statements at that date. These interim condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim period and all such adjustments are of a normal recurring nature. The results of operations for the interim period are not necessarily indicative, if annualized, of those to be expected for the full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The unaudited condensed consolidated financial statements include the accounts and operations of Adirondack Insurance Exchange, a New York reciprocal insurer, and New Jersey Skylands Insurance Association, a New Jersey reciprocal insurer (together with their subsidiaries, the “Reciprocal Exchanges” or “Exchanges”); variable interest entities (“VIE”s) of which the Company is the primary beneficiary. The Company has no ownership interest in the Reciprocal Exchanges but is paid a fee to manage their business operations and has the ability to direct their activities through its wholly-owned management companies. The Reciprocal Exchanges are property and casualty insurers. A detailed description of the Company’s significant accounting policies and management judgments is located in the notes to the audited consolidated financial statements, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC. In March 2020, the outbreak of COVID-19 caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization. The pandemic outbreak has caused an economic downturn on a global scale. The Company continues to monitor the impact of the pandemic as it unfolds. The Company cannot, at this time, predict the impact the pandemic will have on its future consolidated financial position, cash flows or results of operations. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted During 2020 Standard Description Date of Adoption Effect on the Company ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and related amendments. This standard changes the impairment model to a new forward-looking expected loss model for most financial assets and certain other instruments. The standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which will generally result in earlier recognition of allowances for credit losses on loans and other financial instruments. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. The Company will continue to use judgement to determine which loss estimation method is appropriate for their circumstances. The standard is effective for interim and annual reporting periods beginning after December 15, 2019 and requires using a modified retrospective approach, recognizing a cumulative-effect adjustment as of the beginning of the first reporting period in which the standard is effective. January 1, 2020 The Company adopted ASU 2016-13 using the modified retrospective approach and recorded a cumulative-effect adjustment of $1,010 to the opening balance of retained earnings and increased the allowance for premiums receivable and reinsurance recoverable by the same amount. ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard establishes a one-step process for testing the value of the goodwill which an entity carries. ASU 2017-04 requires the goodwill impairment to be measured as the excess of the reporting unit’s carrying amount over its fair value. January 1, 2020 The adoption of the standard did not have a material impact on the Company’s condensed consolidated financial statements. With the exception of the adopted accounting pronouncements discussed above, there have been no recent accounting pronouncements, or quantitative or qualitative progress made toward implementation of outstanding accounting pronouncements during the three months ended March 31, 2020, as compared to those described in Note 2, “Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, that are of significance, or potential significance, to the Company. Accounting Policies The following accounting policies have been updated to reflect the Company's adoption of Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments as described above. Investment Impairments The Company conducts a periodic review to identify and evaluate invested assets that may have credit impairments. Beginning on January 1, 2020, credit losses on available-for-sale debt securities are recognized through an allowance account. See Note 4, “Investments” for additional information. The Company reports investment income accrued separately from debt securities, available for sale, and has elected not to measure an allowance for credit losses for investment income accrued. Investment income accrued is written off by reversing interest income through net investment income at the time the issuer of the bond defaults or is expected to default on payments. Uncollectible available-for-sale debt securities are written-off to net gain (loss) on investments when the Company determines that no additional payments of principal or interest will be received. Premiums and Other Receivables Premium and other receivables are reported net of an allowance for expected credit losses. The allowance is based upon the Company’s ongoing review of amounts outstanding, historical loss data, including delinquencies and write-offs, current and forecasted economic conditions, and other relevant factors. Credit risk is partially mitigated by the Company’s ability to cancel the policy if the policyholder does not pay the premium. Reinsurance Recoverable Amounts recoverable from reinsurers are estimated in a manner consistent with the associated claim liability. The Company reports its reinsurance recoverable net of an allowance for estimated uncollectible reinsurance. The allowance is based upon the Company’s ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, disputes, applicable coverage defenses, and other relevant factors. The Company evaluates and monitors the financial condition of its reinsurers under voluntary reinsurance arrangements to minimize its exposure to significant losses from reinsurer insolvencies. |
Allowance for Expected Credit L
Allowance for Expected Credit Losses | 3 Months Ended |
Mar. 31, 2020 | |
Credit Loss [Abstract] | |
Allowance for Expected Credit Losses | Allowance for Expected Credit Losses Premiums and Other Receivables The following table presents the balances of premiums and other receivables, net of the allowance for expected credit losses, as of March 31, 2020 and January 1, 2020, and changes in the allowance for expected credit losses for the three months ended March 31, 2020. Premiums and Other Receivables, Net of Allowance for Expected Credit Losses Allowance for Expected Credit Losses Balance, beginning of the period $ 1,428,948 $ 24,067 Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020 762 Current period change for expected credit losses (1) 25,766 Write-offs of uncollectible premiums and other receivables (23,481) Balance, end of the period $ 1,541,760 $ 27,114 (1) Current period charges for expected losses are recorded in general and administrative expenses. Reinsurance Recoverable The following table presents the balances of reinsurance recoverable, net of the allowance for estimated uncollectible reinsurance, as of March 31, 2020 and January 1, 2020, and changes in the allowance for estimated uncollectible reinsurance for the three months ended March 31, 2020. Reinsurance Receivable, Net of Allowance for Expected Credit Losses Allowance for Expected Credit Losses Balance, beginning of the period $ 1,394,308 $ — Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020 517 Current period change for estimated uncollectible reinsurance — Write-offs of uncollectible reinsurance — Balance, end of the period $ 1,401,681 $ 517 Other than the Company’s mandatory pools and associations reinsurance agreements and before allowances for estimated uncollectible reinsurance, the Company’s reinsurers generally carry at least an A.M. Best rating of “A-” (Excellent) or the reinsurance recoverable balances are collateralized. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments (a) Available-For-Sale Debt Securities The following table summarizes the unrealized positions for available-for-sale debt securities, disaggregated by major security type. Amortized Allowance for Gross Unrealized Fair March 31, 2020 Cost Credit Losses (1) Gains Losses Value U.S. Treasury $ 56,656 $ — $ 4,398 $ — $ 61,054 Federal agencies 3,907 — 14 — 3,921 States and political subdivision bonds 292,734 — 8,931 (32) 301,633 Foreign government 1,762 — — (38) 1,724 Corporate bonds 1,922,412 (2,927) 35,738 (31,790) 1,923,433 Residential mortgage-backed securities 1,206,548 — 44,174 (1,416) 1,249,306 Commercial mortgage-backed securities 583,502 — 29,723 (1,856) 611,369 Asset-backed securities 48,993 — 261 (1,348) 47,906 Structured securities 209,680 — — (27,772) 181,908 Total $ 4,326,194 $ (2,927) $ 123,239 $ (64,252) $ 4,382,254 NGHC $ 4,014,997 $ (2,629) $ 115,574 $ (59,431) $ 4,068,511 Reciprocal Exchanges 311,197 (298) 7,665 (4,821) 313,743 Total $ 4,326,194 $ (2,927) $ 123,239 $ (64,252) $ 4,382,254 (1) Represents the amount of impairment that has resulted from credit-related factors recorded in net gain (loss) on investments. Amortized Gross Unrealized Fair December 31, 2019 Cost Gains Losses Value U.S. Treasury $ 65,037 $ 1,992 $ (23) $ 67,006 Federal agencies 3,907 8 — 3,915 States and political subdivision bonds 298,345 4,778 (1,441) 301,682 Foreign government 1,762 40 — 1,802 Corporate bonds 1,859,736 59,184 (2,357) 1,916,563 Residential mortgage-backed securities 1,265,830 15,747 (4,117) 1,277,460 Commercial mortgage-backed securities 585,044 27,261 (112) 612,193 Asset-backed securities 74,465 1,194 (48) 75,611 Structured securities 222,565 226 (2,665) 220,126 Total $ 4,376,691 $ 110,430 $ (10,763) $ 4,476,358 NGHC $ 4,057,501 $ 104,951 $ (10,343) $ 4,152,109 Reciprocal Exchanges 319,190 5,479 (420) 324,249 Total $ 4,376,691 $ 110,430 $ (10,763) $ 4,476,358 The amortized cost and fair value of available-for-sale debt securities held as of March 31, 2020, by contractual maturity, are shown in the table below. Actual maturities may differ from contractual maturities because some borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. NGHC Reciprocal Exchanges Total March 31, 2020 Amortized Fair Amortized Fair Amortized Fair Due in one year or less $ 58,383 $ 58,583 $ 110 $ 110 $ 58,493 $ 58,693 Due after one year through five years 1,002,735 1,006,418 127,214 128,065 1,129,949 1,134,483 Due after five years through ten years 983,649 977,567 79,997 78,303 1,063,646 1,055,870 Due after ten years 219,712 209,612 15,351 15,015 235,063 224,627 Mortgage-backed securities 1,750,518 1,816,331 88,525 92,250 1,839,043 1,908,581 Total $ 4,014,997 $ 4,068,511 $ 311,197 $ 313,743 $ 4,326,194 $ 4,382,254 (b) Gross Unrealized Losses The tables below summarize the gross unrealized losses on debt securities classified as available-for-sale, by length of time the security has continuously been in an unrealized loss position. Less Than 12 Months 12 Months or More Total March 31, 2020 Fair Unrealized Fair Unrealized Fair Unrealized States and political subdivision bonds $ 7,204 $ (28) $ 908 $ (4) $ 8,112 $ (32) Foreign government 1,724 (38) — — 1,724 (38) Corporate bonds 891,346 (31,790) — — 891,346 (31,790) Residential mortgage-backed securities 41,121 (1,416) — — 41,121 (1,416) Commercial mortgage-backed securities 55,768 (1,856) — — 55,768 (1,856) Asset-backed securities 32,912 (1,326) 233 (22) 33,145 (1,348) Structured securities 123,710 (14,710) 58,198 (13,062) 181,908 (27,772) Total $ 1,153,785 $ (51,164) $ 59,339 $ (13,088) $ 1,213,124 $ (64,252) NGHC $ 1,027,271 $ (46,838) $ 55,834 $ (12,593) $ 1,083,105 $ (59,431) Reciprocal Exchanges 126,514 (4,326) 3,505 (495) 130,019 (4,821) Total $ 1,153,785 $ (51,164) $ 59,339 $ (13,088) $ 1,213,124 $ (64,252) Less Than 12 Months 12 Months or More Total December 31, 2019 Fair Unrealized Fair Unrealized Fair Unrealized U.S. Treasury $ 19,903 $ (23) $ 500 $ — $ 20,403 $ (23) States and political subdivision bonds 106,103 (1,415) 2,580 (26) 108,683 (1,441) Corporate bonds 586,817 (2,253) 5,976 (104) 592,793 (2,357) Residential mortgage-backed securities 410,484 (4,074) 3,983 (43) 414,467 (4,117) Commercial mortgage-backed securities 18,250 (105) 748 (7) 18,998 (112) Asset-backed securities 5,406 (29) 920 (19) 6,326 (48) Structured securities 40,979 (94) 109,880 (2,571) 150,859 (2,665) Total $ 1,187,942 $ (7,993) $ 124,587 $ (2,770) $ 1,312,529 $ (10,763) NGHC $ 1,104,244 $ (7,654) $ 117,681 $ (2,689) $ 1,221,925 $ (10,343) Reciprocal Exchanges 83,698 (339) 6,906 (81) 90,604 (420) Total $ 1,187,942 $ (7,993) $ 124,587 $ (2,770) $ 1,312,529 $ (10,763) The Company’s debt securities portfolio is sensitive to interest rate fluctuations, which impact the fair value of individual securities. Unrealized losses on debt securities reported above were primarily caused by the effects of the interest rate environment and the market impacts of COVID-19. There were 1,663 and 1,337 individual security lots at March 31, 2020 and December 31, 2019, respectively, that accounted for the gross unrealized loss. As of March 31, 2020 and December 31, 2019, the unrealized losses for those securities in unrealized loss positions for a period of twelve or more consecutive months were not greater than or equal to 25% of their amortized cost. The Company recorded a credit loss allowance of $2,927 on seven secur ities related to the energy sector. Some of the factors considered in assessing credit loss and impairment of fixed maturities due to credit-related factors include: (1) the magnitude of the unrealized loss in relation to the amortized cost; (2) the credit rating of the issuing entity and market or issuer events that could impact the issuer’s ability to repay the debt security; (3) the likelihood of the recoverability of principal and interest; and (4) whether it is more likely than not that the Company will be required to sell the investment prior to an anticipated recovery in value. The following table displays the roll forward of the allowance for credit losses for the period: Three Months Ended March 31, 2020 Corporate bonds Total Balance, beginning of the period $ — $ — Credit losses on securities not previously recorded 2,927 2,927 Balance, end of the period $ 2,927 $ 2,927 (c) Net Investment Income The components of net investment income consisted of the following: Three Months Ended March 31, 2020 2019 Cash and short-term investments $ 278 $ 1,497 Debt securities 32,102 29,467 Other, net (related parties - $(2,525) and $254) (768) 3,508 Investment income $ 31,612 $ 34,472 Investment expenses (1,369) (1,027) Net investment income $ 30,243 $ 33,445 NGHC $ 28,060 $ 31,275 Reciprocal Exchanges 2,183 2,170 Net investment income $ 30,243 $ 33,445 (d) Net Gain (Loss) on Investments The table below indicates realized gains and losses on investments. Other, net includes realized gains and losses from short-term and other investments and foreign exchange. Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method. Three Months Ended March 31, 2020 2019 Debt securities, available-for-sale: Gross gains $ 273 $ 136 Gross losses (9) (256) Credit allowance (2,927) — Net realized loss on debt securities, available-for-sale (2,663) (120) Other, net (1) (4,198) 142 Net realized gain (loss) on investments $ (6,861) $ 22 NGHC $ (6,068) $ 766 Reciprocal Exchanges (793) (744) Net realized gain (loss) on investments $ (6,861) $ 22 (1) Includes gains and losses on publicly traded equities and foreign currency. (e) Credit Quality of Investments The tables below summarize the credit quality of debt securities, as rated by Standard & Poor’s (“S&P”). If a security is not rated by S&P, an S&P equivalent is determined based on ratings from similar rating agencies. Securities that are not rated are included in the “BB+ and lower” category. NGHC Reciprocal Exchanges March 31, 2020 Amortized Fair Percentage Amortized Fair Percentage U.S. Treasury $ 43,695 $ 47,084 1.2 % $ 12,961 $ 13,970 4.5 % AAA 528,158 543,778 13.4 % 20,845 21,169 6.7 % AA, AA+, AA- 1,618,321 1,675,017 41.2 % 115,089 118,870 37.9 % A, A+, A- 966,417 960,982 23.6 % 108,416 108,375 34.5 % BBB, BBB+, BBB- 830,937 817,798 20.1 % 52,986 50,862 16.2 % BB+ and lower 27,469 23,852 0.5 % 900 497 0.2 % Total $ 4,014,997 $ 4,068,511 100.0 % $ 311,197 $ 313,743 100.0 % NGHC Reciprocal Exchanges December 31, 2019 Amortized Fair Percentage Amortized Fair Percentage U.S. Treasury $ 52,108 $ 53,599 1.3 % $ 12,929 $ 13,407 4.1 % AAA 515,869 537,508 12.9 % 20,947 21,555 6.6 % AA, AA+, AA- 1,677,787 1,697,220 40.9 % 120,113 121,720 37.5 % A, A+, A- 954,312 976,468 23.5 % 116,747 119,041 36.7 % BBB, BBB+, BBB- 795,594 823,239 19.8 % 48,021 48,093 14.8 % BB+ and lower 61,831 64,075 1.6 % 433 433 0.3 % Total $ 4,057,501 $ 4,152,109 100.0 % $ 319,190 $ 324,249 100.0 % The tables below summarize the investment quality of the corporate bond holdings and industry concentrations. March 31, 2020 AAA AA+, A+,A,A- BBB+, BB+ or Fair % of Financial Institutions — % 3.5 % 26.0 % 12.5 % 0.3 % $ 813,631 42.3 % Industrials 0.7 % 2.6 % 22.5 % 29.3 % 0.3 % 1,065,463 55.4 % Utilities/Other — % — % 1.0 % 1.3 % — % 44,339 2.3 % Total 0.7 % 6.1 % 49.5 % 43.1 % 0.6 % $ 1,923,433 100.0 % NGHC 0.3 % 4.9 % 43.9 % 40.5 % 0.6 % $ 1,734,990 90.2 % Reciprocal Exchanges 0.4 % 1.2 % 5.6 % 2.6 % — % 188,443 9.8 % Total 0.7 % 6.1 % 49.5 % 43.1 % 0.6 % $ 1,923,433 100.0 % December 31, 2019 AAA AA+, A+,A,A- BBB+, BB+ or Fair % of Financial Institutions — % 3.6 % 25.0 % 12.1 % 0.3 % $ 785,910 41.0 % Industrials 0.7 % 2.7 % 24.1 % 29.0 % 0.1 % 1,083,959 56.6 % Utilities/Other — % — % 1.0 % 1.4 % — % 46,694 2.4 % Total 0.7 % 6.3 % 50.1 % 42.5 % 0.4 % $ 1,916,563 100.0 % NGHC 0.3 % 5.1 % 44.0 % 40.0 % 0.4 % $ 1,720,962 89.8 % Reciprocal Exchanges 0.4 % 1.2 % 6.1 % 2.5 % — % 195,601 10.2 % Total 0.7 % 6.3 % 50.1 % 42.5 % 0.4 % $ 1,916,563 100.0 % (f) Cash and Cash Equivalents, Restricted Cash and Restricted Investments The Company, in order to conduct business in certain states, is required to maintain letters of credit or assets on deposit to support state mandated regulatory requirements and certain third-party agreements. The Company also utilizes trust accounts to collateralize business with its reinsurance counterparties. These assets are held primarily in the form of cash or certain high grade securities. Cash, cash equivalents, and restricted cash are as follows: March 31, 2020 December 31, 2019 Cash and cash equivalents $ 309,802 $ 135,942 Restricted cash and cash equivalents 30,070 28,521 Total cash, cash equivalents and restricted cash $ 339,872 $ 164,463 Restricted investments are as follows: March 31, 2020 December 31, 2019 Securities on deposit with state regulatory authorities $ 81,809 $ 74,061 Restricted investments to trusts in certain reinsurance transactions 42,369 49,502 Total restricted investments $ 124,178 $ 123,563 (g) Short-term and Other Investments Short-term investments include commercial paper, U.S. Treasury bills and money market funds with maturities between 91 days and less than one year at the date of acquisition. The table below summarizes the composition of other investments: March 31, 2020 December 31, 2019 Equity method investments (related parties - $105,839 and $109,612) $ 140,897 $ 143,511 Notes receivable (related parties - $130,004 and $129,229) (1) 130,067 129,299 Long-term Certificates of Deposit (CDs), at cost 150 20,150 Investments, at fair value 7,661 9,365 Investments, at cost or amortized cost 8,908 8,962 Total $ 287,683 $ 311,287 (1) See Note 15, “Related Party Transactions” for additional information. Equity method investments represent limited liability companies and limited partnership investments in real estate. Investments at fair value include publicly traded equities and the Company’s right to receive the excess servicing spread related to servicing rights, for which the Company has elected the fair value option with changes in fair value recorded in earnings. Investments at cost or amortized cost, represent limited partnerships, loans and trusts. The Company believes its exposure to risk associated with these investments is generally limited to the investment carrying amounts . Other than investments at fair value, the Company’s other investments are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Equity Method Investments - Related Parties The significant shareholder of the Company has an ownership interest in AmTrust Financial Services, Inc. (“AmTrust”) and ACP Re Ltd. (“ACP Re”). Limited Liability Companies and Limited Partnerships The Company holds a variable interest in the following entities but is not the VIE’s primary beneficiary. The Company accounts for these entities using the equity method of accounting. The Company believes its exposure to risk associated with these investments is generally limited to the investment carrying amounts. LSC Entity The Company has a 50% ownership interest in an entity (the “LSC Entity”) initially formed to acquire life settlement contracts, with AmTrust owning the remaining 50%. The LSC Entity used the contributed capital to pay premiums and purchase policies. A life settlement contract is a contract between the owner of a life insurance policy and a third party who obtains the ownership and beneficiary rights of the underlying life insurance policy. The LSC Entity has a 30% noncontrolling equity interest in a limited partnership managed by a third party. As of March 31, 2020, the LSC Entity directly held one life settlement contract. The life settlement contract is accounted for using the fair value method. The Company’s equity interest in the LSC Entity as of March 31, 2020 and December 31, 2019, was $45,291 and $49,477, respectively. For the three months ended March 31, 2020 and 2019, the Company recorded equity in earnings (losses) from the LSC Entity of $(4,186) and $586, respectively. 800 Superior, LLC The Company holds an investment in 800 Superior, LLC, a limited liability company that owns an office building in Cleveland, Ohio, with AmTrust. AmTrust has been appointed managing member of 800 Superior, LLC. The Company and AmTrust each have a 50% ownership interest in 800 Superior, LLC. The Company’s equity interest in 800 Superior, LLC as of March 31, 2020 and December 31, 2019 was $9,487 and $9,365, respectively. For the three months ended March 31, 2020 and 2019, the Company recorded equity in earnings (losses) from 800 Superior, LLC of $122 and $(293), respectively. The Company paid 800 Superior, LLC $761 and $742 in rent for the three months ended March 31, 2020 and 2019, respectively. North Dearborn Building Company, L.P. The Company holds an investment in North Dearborn Building Company, L.P. (“North Dearborn”), a limited partnership that owns an office building in Chicago, Illinois. AmTrust is also a limited partner in North Dearborn, and the general partner is NA Advisors GP LLC (“NA Advisors”), a related party, owned by Karfunkel family members which is managed by an unrelated third party. The Company and AmTrust each hold a 45% limited partnership interest in North Dearborn, while NA Advisors holds a 10% general partnership interest and a 10% profit interest, which NA Advisors pays to the unrelated third-party manager. North Dearborn appointed NA Advisors as the general manager to oversee the day-to-day operations of the office building. The Company’s equity interest in North Dearborn as of March 31, 2020 and December 31, 2019 was $5,702 and $5,317, respectively. For the three months ended March 31, 2020 and 2019, the Company recorded equity in earnings (losses) from North Dearborn of $430 and $(28), respectively, and received distributions of $45 and $0, respectively. 4455 LBJ Freeway, LLC The Company holds an investment in 4455 LBJ Freeway, LLC, a limited liability company that owns an office building in Dallas, Texas, with AmTrust. AmTrust has been appointed managing member of 4455 LBJ Freeway, LLC. The Company and AmTrust each have a 50% ownership interest in 4455 LBJ Freeway, LLC. The Company’s equity interest in 4455 LBJ Freeway, LLC as of March 31, 2020 and December 31, 2019 was $1,234 and $1,074, respectively. For the three months ended March 31, 2020 and 2019, the Company recorded equity in earnings (losses) from 4455 LBJ Freeway, LLC of $160 and $23, respectively. The Company paid 4455 LBJ Freeway, LLC $613 and $555 in rent for the three months ended March 31, 2020 and 2019, respectively. Illinois Center Building, L.P. The Company holds an investment in Illinois Center Building, L.P. (“Illinois Center”), a limited partnership that owns an office building in Chicago, Illinois. AmTrust and ACP Re are also limited partners in Illinois Center and the general partner is NA Advisors. The Company and AmTrust each hold a 37.5% limited partnership interest in Illinois Center, while ACP Re holds a 15.0% limited partnership interest. NA Advisors holds a 10.0% general partnership interest and a 10.0% profit interest, which NA Advisors pays to the unrelated third-party manager. Illinois Center appointed NA Advisors as the general manager to oversee the day-to-day operations of the office building. The Company’s equity interest in Illinois Center as of March 31, 2020 and December 31, 2019 was $44,125 and $44,379, respectively. For the three months ended March 31, 2020 and 2019, the Company recorded equity in earnings (losses) from Illinois Center of $(254) and $(1,222), respectively. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company carries certain financial instruments at fair value. Assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets are measured and classified in accordance with a fair value hierarchy consisting of three “levels” based on the observability of valuation inputs: Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities as of the measurement date. Additionally, the entity must have the ability to access the active market and the quoted prices cannot be adjusted by the entity. Level 2 - Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices in active markets for similar assets or liabilities; quoted prices in inactive markets for identical or similar assets or liabilities; or inputs that are observable or can be corroborated by observable market data by correlation or other means for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs are supported by little or no market activity. The unobservable inputs represent management’s best assumptions of how market participants would price the assets or liabilities. Generally, Level 3 assets and liabilities are valued using pricing models, discounted cash flow methodologies, or similar techniques that require significant judgment or estimation. The following describes the valuation techniques used by the Company to determine the fair value measurements on a recurring basis of financial instruments held as of March 31, 2020 and December 31, 2019. The Company utilizes a pricing service (“pricing service”) to estimate fair value measurements for all its debt and equity securities. Level 1 measurements: • U.S. Treasury and federal agencies. The fair values of U.S. government securities are based on quoted market prices in active markets. The Company believes the market for U.S. government securities is an actively traded market given the high level of daily trading volume. • Short-term investments. Comprised of money market funds that are traded in active markets and fair values are based on quoted market prices. • Other Investments, at fair value. Common and preferred equities. The pricing service utilizes market quotations for equity securities that have quoted market prices in active markets and their respective quoted prices are provided at fair value. Level 2 measurements: • States and political subdivision bonds, and foreign government. The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active. • Corporate bonds. Comprised of bonds issued by corporations, public and privately placed. The fair values of short-term corporate bonds are priced using the spread above the London Interbank Offering Rate (“LIBOR”) yield curve, and the fair value of long-term corporate bonds are priced using the spread above the risk-free yield curve. The spreads are sourced from broker dealers, trade prices and the new issue market. Where pricing is unavailable from pricing services, the Company obtains non-binding quotes from broker-dealers. The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active. • Residential and commercial mortgage-backed securities, asset-backed securities and structured securities. The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, prepayment speeds, collateral performance and credit spreads. Level 3 measurements: • States and political subdivision bonds. The Company holds certain municipal bonds that finance economic development, infrastructure and environmental projects which do not have an active market. These bonds are valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. • Corporate bonds. The Company holds certain structured notes and term loans that do not have an active market. These bonds are valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. • Other investments, at fair value. Comprised of the Company’s right to receive the Excess Servicing Spread (“ESS”) related to servicing rights. The Company uses a discounted cash flow method to estimate the fair value of the ESS. The key inputs used in the estimation of ESS include prepayment speed and discount rate. Changes in the fair value of the ESS are recorded in earnings. • Other Investments, at cost or amortized cost. From time to time, the Company also holds certain equity securities that are issued by privately-held entities or direct equity investments that do not have an active market. The Company estimates the fair value of these securities primarily based on inputs such as third-party broker quotes, issuers’ book value, market multiples, and other inputs. These bonds are valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. Assets measured at fair value on a recurring basis are as follows: March 31, 2020 Level 1 Level 2 Level 3 Total Available-for-sale debt securities: U.S. Treasury $ 61,054 $ — $ — $ 61,054 Federal agencies 3,921 — — 3,921 States and political subdivision bonds — 298,533 3,100 301,633 Foreign government — 1,724 — 1,724 Corporate bonds — 1,914,951 8,482 1,923,433 Residential mortgage-backed securities — 1,249,306 — 1,249,306 Commercial mortgage-backed securities — 611,369 — 611,369 Asset-backed securities — 47,906 — 47,906 Structured securities — 181,908 — 181,908 Total available-for-sale debt securities 64,975 4,305,697 11,582 4,382,254 Short-term investments 50,262 20,499 — 70,761 Other investments 3,829 — 3,832 7,661 Total $ 119,066 $ 4,326,196 $ 15,414 $ 4,460,676 NGHC $ 84,817 $ 4,026,924 $ 15,414 $ 4,127,155 Reciprocal Exchanges 34,249 299,272 — 333,521 Total $ 119,066 $ 4,326,196 $ 15,414 $ 4,460,676 December 31, 2019 Level 1 Level 2 Level 3 Total Available-for-sale debt securities: U.S. Treasury $ 67,006 $ — $ — $ 67,006 Federal agencies 3,915 — — 3,915 States and political subdivision bonds — 298,582 3,100 301,682 Foreign government — 1,802 — 1,802 Corporate bonds — 1,908,235 8,328 1,916,563 Residential mortgage-backed securities — 1,277,460 — 1,277,460 Commercial mortgage-backed securities — 612,193 — 612,193 Asset-backed securities — 75,611 — 75,611 Structured securities — 220,126 — 220,126 Total available-for-sale debt securities 70,921 4,394,009 11,428 4,476,358 Short-term investments 59,953 7,400 — 67,353 Other investments 4,881 — 4,484 9,365 Total $ 135,755 $ 4,401,409 $ 15,912 $ 4,553,076 NGHC $ 116,602 $ 4,091,068 $ 15,912 $ 4,223,582 Reciprocal Exchanges 19,153 310,341 — 329,494 Total $ 135,755 $ 4,401,409 $ 15,912 $ 4,553,076 For the three months ended March 31, 2020 and 2019, there were no transfers between Level 2 and Level 3. The following tables provide a reconciliation of recurring fair value measurements of the Level 3 financial assets: States and Corporate Other Total Balance as of January 1, 2020 $ 3,100 $ 8,328 $ 4,484 $ 15,912 Total gains (losses) for the period: Included in earnings — — (375) (375) Included in other comprehensive income — 154 — 154 Sales — — (277) (277) Balance as of March 31, 2020 $ 3,100 $ 8,482 $ 3,832 $ 15,414 Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period $ — $ — $ (375) $ (375) Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period $ — $ 154 $ — $ 154 States and Corporate Other Total Balance as of January 1, 2019 $ 3,596 $ 11,767 $ 7,593 $ 22,956 Total gains (losses) for the period: Included in earnings — — (405) (405) Included in other comprehensive income 64 67 — 131 Balance as of March 31, 2019 $ 3,660 $ 11,834 $ 7,188 $ 22,682 Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period $ — $ — $ (405) $ (405) Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period $ 64 $ 67 $ — $ 131 At March 31, 2020 and December 31, 2019, the carrying values of the Company’s cash and cash equivalents, premiums and other receivables, and accounts payable approximate the fair value given their short-term nature and were classified as Level 1. Fair value information about financial liabilities not measured at fair value Debt - The amount reported in the accompanying Condensed Consolidated Balance Sheets for these financial instruments represents the carrying value of the debt. See Note 9, “Debt” for additional information. The following table presents the carrying amount and estimated fair value of debt not carried at fair value, excluding finance lease and other liabilities, as well as the input level used to determine the fair value: March 31, 2020 December 31, 2019 Input Level Carrying amount Fair value Carrying amount Fair value 7.625% Notes Level 2 $ 96,950 $ 83,880 $ 96,928 $ 103,560 6.75% Notes Level 3 347,252 361,628 347,091 371,366 Subordinated Debentures Level 3 72,168 72,118 72,168 72,103 2019 Credit Agreement Level 3 140,000 141,227 140,000 148,272 |
Deferred Acquisition Costs
Deferred Acquisition Costs | 3 Months Ended |
Mar. 31, 2020 | |
Deferred Acquisition Costs [Abstract] | |
Deferred Policy Acquisition Costs | Deferred Acquisition Costs The following table reflects the amounts of policy acquisition costs deferred and amortized: Three Months Ended March 31, 2020 2019 Property Accident Total Property Accident Total Balance, beginning of the period $ 239,293 $ 24,230 $ 263,523 $ 226,188 $ 25,220 $ 251,408 Additions 154,789 7,431 162,220 145,979 25,101 171,080 Amortization (141,054) (7,321) (148,375) (136,008) (18,303) (154,311) Change in DAC 13,735 110 13,845 9,971 6,798 16,769 Balance, end of the period $ 253,028 $ 24,340 $ 277,368 $ 236,159 $ 32,018 $ 268,177 NGHC $ 230,291 $ 24,340 $ 254,631 $ 215,854 $ 32,018 $ 247,872 Reciprocal Exchanges 22,737 — 22,737 20,305 — 20,305 Balance, end of the period $ 253,028 $ 24,340 $ 277,368 $ 236,159 $ 32,018 $ 268,177 |
Unpaid Losses and Loss Adjustme
Unpaid Losses and Loss Adjustment Expense Reserves | 3 Months Ended |
Mar. 31, 2020 | |
Insurance [Abstract] | |
Unpaid Losses and Loss Adjustment Expenses | Unpaid Losses and Loss Adjustment Expense Reserves The unpaid losses and loss adjustment expense (“LAE”) reserves are an estimate of the Company’s liability from incurred claims at the reporting period. The unpaid losses and loss adjustment expense reserves are the result of an ongoing analysis of recent loss development trends and emerging historical experience. Original estimates are increased or decreased as additional information becomes known regarding individual claims. In setting its reserves, the Company reviews its loss data to estimate expected loss development. Management believes that its use of standard actuarial methodology applied to its analyses of its historical experience provides a reasonable estimate of future losses. However, actual future losses may differ from the Company’s estimate, and future events beyond the control of management, such as changes in the law, judicial interpretations of the law and inflation, may favorably or unfavorably impact the ultimate settlement of the Company’s losses and LAE. The anticipated effect of inflation is implicitly considered when estimating liabilities for losses and LAE. In addition to inflation, the average severity of claims is affected by a number of factors that may vary by types and features of policies written. Future average severities are projected from historical trends, adjusted for implemented changes in underwriting standards and policy provisions, and general economic trends. These estimated trends are monitored and revised as necessary based on actual development. The following tables present a reconciliation of beginning and ending balances for unpaid losses and LAE: Three Months Ended March 31, 2020 Property Accident NGHC Reciprocal Total Gross balance at beginning of the period $ 2,528,754 $ 151,874 $ 2,680,628 $ 205,786 $ 2,886,414 Less: Reinsurance recoverable at beginning of the period (1,016,368) (11,266) (1,027,634) (84,174) (1,111,808) Net balance at beginning of the period 1,512,386 140,608 1,652,994 121,612 1,774,606 Incurred losses and LAE related to: Current year 563,559 86,409 649,968 41,438 691,406 Prior year 4,471 (4,808) (337) 929 592 Total incurred 568,030 81,601 649,631 42,367 691,998 Paid losses and LAE related to: Current year (204,279) (25,820) (230,099) (18,169) (248,268) Prior year (397,862) (44,076) (441,938) (29,449) (471,387) Total paid (602,141) (69,896) (672,037) (47,618) (719,655) Net balance at end of the period 1,478,275 152,313 1,630,588 116,361 1,746,949 Plus: Reinsurance recoverable at end of the period 1,004,759 14,912 1,019,671 81,573 1,101,244 Gross balance at end of the period $ 2,483,034 $ 167,225 $ 2,650,259 $ 197,934 $ 2,848,193 Three Months Ended March 31, 2019 Property Accident NGHC Reciprocal Total Gross balance at beginning of the period $ 2,507,409 $ 271,280 $ 2,778,689 $ 178,470 $ 2,957,159 Less: Reinsurance recoverable at beginning of the period (1,182,588) (24,575) (1,207,163) (77,979) (1,285,142) Net balance at beginning of the period 1,324,821 246,705 1,571,526 100,491 1,672,017 Incurred losses and LAE related to: Current year 530,549 95,601 626,150 39,973 666,123 Prior year (5,514) (10,852) (16,366) 2,052 (14,314) Total incurred 525,035 84,749 609,784 42,025 651,809 Paid losses and LAE related to: Current year (130,395) (33,681) (164,076) (14,949) (179,025) Prior year (422,560) (53,310) (475,870) (21,478) (497,348) Total paid (552,955) (86,991) (639,946) (36,427) (676,373) Effect of foreign exchange rates — 1,094 1,094 — 1,094 Net balance at end of the period 1,296,901 245,557 1,542,458 106,089 1,648,547 Plus: Reinsurance recoverable at end of the period 1,103,114 28,729 1,131,843 89,933 1,221,776 Gross balance at end of the period $ 2,400,015 $ 274,286 $ 2,674,301 $ 196,022 $ 2,870,323 Prior year loss development, net of reinsurance Prior year development is based upon numerous estimates by line of business and accident year. No additional premiums or return premiums have been accrued as a result of the prior year effects. 2020. Loss and LAE for the three months ended March 31, 2020 included $592 of unfavorable development on prior accident year loss and LAE reserves. The $5,400 of unfavorable development in the property and casualty segment (including $929 of unfavorable development for the Reciprocal Exchanges) was driven by small business auto, while the $4,808 of favorable development in the accident and health segment was primarily driven by small group self-funded business. 2019. Loss and LAE for the three months ended March 31, 2019 included $14,314 of favorable development on prior accident year loss and LAE reserves. The $3,462 of favorable development in the property and casualty segment (including $2,052 of unfavorable development for the Reciprocal Exchanges) was driven by homeowners business, while the $10,852 of favorable development in the accident and health segment was primarily driven by small group self-funded business . |
Reinsurance
Reinsurance | Jan. 01, 2020 |
Insurance [Abstract] | |
Reinsurance | Reinsurance The Company utilizes various excess of loss, quota share, state-based industry pools or facilities, and catastrophe reinsurance programs to limit its exposure. Reinsurance agreements transfer portions of the underlying risk of the business the Company writes. Reinsurance does not discharge or diminish the Company’s obligation to pay claims covered by the insurance policies it issues; however, it does permit the Company to recover certain incurred losses from its reinsurers and the Company’s reinsurance recoveries reduce the maximum loss that it may incur as a result of a covered loss event. The Company’s reinsurers generally carry at least an A.M. Best rating of “A-” (Excellent) or the reinsurance recoverable balances are collateralized. The total amount, cost and limits relating to the reinsurance coverage the Company purchases may vary from year to year based upon a variety of factors, including the availability of quality reinsurance at an acceptable price and the level of risk that the Company chooses to retain for its account. The Company assumes and cedes insurance risks under various reinsurance agreements, on both a pro-rata basis and excess of loss basis. The Company purchases reinsurance to mitigate the volatility of direct and assumed business, which may be caused by the aggregate value or the concentration of written exposures in a particular geographic area or business segment and may arise from catastrophes or other events. The Company pays a premium as consideration for ceding the risk. Reinsurance recoverable is as follows: March 31, 2020 December 31, 2019 Reinsurance recoverable on paid losses $ 300,954 $ 282,500 Reinsurance recoverable on unpaid losses 1,101,244 1,111,808 Allowance for uncollectible reinsurance (517) — Reinsurance recoverable, net $ 1,401,681 $ 1,394,308 The following is the effect of reinsurance on unpaid loss and LAE reserves and unearned premiums: March 31, 2020 December 31, 2019 Assumed Ceded Assumed Ceded Unpaid Loss and LAE reserves $ 46,868 $ 1,101,244 $ 50,884 $ 1,111,808 Unearned premiums 17,193 511,648 15,278 575,747 The following is the effect of reinsurance on premiums and loss and LAE: Three Months Ended March 31, 2020 2019 Premiums: Written Earned Written Earned Direct $ 1,458,533 $ 1,390,150 $ 1,489,188 $ 1,315,705 Assumed 18,021 16,106 20,590 21,000 Total Gross Premium 1,476,554 1,406,256 1,509,778 1,336,705 Ceded (266,951) (331,050) (345,114) (372,548) Net Premium $ 1,209,603 $ 1,075,206 $ 1,164,664 $ 964,157 Three Months Ended March 31, 2020 2019 Assumed Ceded Assumed Ceded Loss and LAE $ 6,635 $ 196,486 $ 5,322 $ 209,322 Industry Pools and Facilities The Company’s reinsurance programs include premiums written under state-mandated involuntary plans for automobile, motorcycle and commercial vehicles and premiums ceded to state-provided reinsurance facilities such as Michigan Catastrophic Claims Association (“MCCA”) and North Carolina Reinsurance Facility (“NCRF”), for which the Company retains no loss indemnity risk. Prepaid reinsurance premiums are earned on a pro-rata basis over the period of risk, consistent with premiums written. The Company believes that it is unlikely to incur any material loss as a result of non-payment of amounts owed to the Company by MCCA and NCRF because (i) the payment obligations are extended over many years, resulting in relatively small current payment obligations, (ii) both MCCA and NCRF are supported by assessments permitted by statute, and (iii) the Company has not historically incurred losses as a result of non-payment. Because MCCA and NCRF are supported by assessments permitted by statute, and there have been no significant and uncollectible balances from MCCA and NCRF, the Company believes that it has no significant exposure to uncollectible reinsurance balances from these entities. Quota Share Agreements In 2017, the Company entered into an Auto Quota Share Agreement (the “Auto Quota Share Agreement”) covering the Company’s auto lines of business. Effective January 1, 2019, the Company ceded 7.0% of net liability. On July 1, 2019, the Company renewed its Auto Quota Share Agreement for a two-year term. Effective July 1, 2019, the Company ceded 10.0% of net liability with the ability to increase the cession to up to 30.0% and decrease the cession down to 5.0% under certain conditions. The Company receives a 31.2% provisional ceding commission on premiums ceded to the reinsurer during the term of the Auto Quota Share Agreement, subject to a sliding scale adjustment to a maximum of 32.8% if the loss ratio for the reinsured business is 64.7% or less and a minimum of 30.0% if the loss ratio is 67.5% or higher. Effective January 1, 2020, the Company cedes 5.0% of net liability under new and renewal auto policies written. In 2017, the Company entered into a Homeowners Quota Share Agreement (the “HO Quota Share Agreement”) covering the Company’s homeowners line of business. On July 1, 2019, the Company renewed its HO Quota Share Agreement for a one-year term. Effective July 1, 2019, the Company cedes 40.0% of net liability and receives a 36.0% ceding commission on new and renewal business and a portion of the in-force business. A portion of the in-force business is being run-off under the prior agreements. The weighted average expected ceding commission for all in-force business and new and renewal homeowners business is 37.5% over the contract term. Effective July 1, 2019, the Reciprocal Exchanges entered into a personal lines quota share agreement for a one-year term. The Reciprocal Exchanges cede 28.5% of net liability on new and renewal homeowners multiple peril, dwelling fire, and automobile physical damage (comprehensive only) policies written in the states of New Jersey and New York. Catastrophe Reinsurance Effective May 1, 2019, the Company’s reinsurance property catastrophe excess of loss program, protecting the Company against catastrophic events and other large losses, provides a total of $650,000 in coverage with one reinstatement with a $70,000 retention for the first event and $50,000 for the second event. As of July 1, 2018, the casualty program provides $35,000 in coverage in excess of a $5,000 retention. Effective October 1, 2019, the Company renewed the casualty program, for which coverage and retention will remain in effect and unchanged. The Company pays a premium as consideration for ceding the risk. Effective July 1, 2019, the Reciprocal Exchanges renewed their property catastrophe excess of loss program, providing a total of $480,000 in coverage with a $20,000 retention, with one reinstatement. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table represents the Company’s debt: Interest Rate Maturity March 31, 2020 December 31, 2019 Fixed-rate: 6.75% Notes 6.75% 2024 $ 350,000 $ 350,000 7.625% Notes 7.625% 2055 100,000 100,000 Floating-rate: Subordinated Debentures I (1) LIBOR + 3.40% 2035 41,238 41,238 Subordinated Debentures II (2) LIBOR + 4.25% 2037 30,930 30,930 2019 Credit Agreement (3) LIBOR + 1.75% 2023 140,000 140,000 Finance lease liabilities Various Various 20,946 20,477 Other 3.5% Various 7,762 9,342 Unamortized debt issuance costs and unamortized discount (5,798) (5,981) Total carrying amount of debt $ 685,078 $ 686,006 (1) Interest rate was 4.14% and 5.29%, as of March 31, 2020 and December 31, 2019, respectively. (2) Interest rate was 4.99% and 6.14%, as of March 31, 2020 and December 31, 2019, respectively. (3) Weighted-average interest rate was 2.75% and 3.59% as of March 31, 2020 and December 31, 2019, respectively. The following table presents the Company’s interest expense: Three Months Ended March 31, Interest Payment Frequency 2020 2019 6.75% Notes Semiannually $ 5,906 $ 5,906 7.625% Notes Quarterly 1,906 1,906 Subordinated Debentures Quarterly 997 1,163 2016 Credit Agreement Quarterly — 1,211 2019 Credit Agreement Quarterly 1,215 529 Finance lease liabilities Various 371 294 Other (1) Various 1,385 1,990 Total interest expense $ 11,780 $ 12,999 (1) Includes interest for other liabilities, interest credited on funds held balances and accretion of debt issuance costs. Notes The 6.75% Notes are the Company’s general unsecured obligations and rank equally in right of payment with its other existing and future senior unsecured indebtedness and senior in right of payment to any of its indebtedness that is contractually subordinated to the 6.75% Notes. The 6.75% Notes are also effectively subordinated to any of the Company’s existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness and are structurally subordinated to the existing and future indebtedness of the Company’s subsidiaries (including trade payables). The 6.75% Notes mature on May 15, 2024, unless earlier redeemed or purchased by the Company. The 7.625% Notes are the Company’s subordinated unsecured obligations and rank (i) senior in right of payment to any future junior subordinated debt, (ii) equal in right of payment with any unsecured, subordinated debt that the Company incurs in the future that ranks equally with the 7.625% Notes, and (iii) subordinate in right of payment to any of the Company’s existing and future senior debt, including amounts outstanding under the Company’s revolving credit facility, the Company’s 6.75% notes and certain of the Company’s other obligations. In addition, the 7.625% Notes are structurally subordinated to all existing and future indebtedness, liabilities and other obligations of the Company’s subsidiaries. The 7.625% Notes mature on September 15, 2055, unless earlier redeemed or purchased by the Company. Subordinated Debentures The Company, through a subsidiary, is the issuer of junior subordinated debentures (the “Subordinated Debentures”) relating to an issuance of trust preferred securities. The Subordinated Debentures require interest-only payments to be made on a quarterly basis, with principal due at maturity. The Subordinated Debentures’ principal amounts of $41,238 and $30,930 mature on 2035 and 2037, respectively, and bear interest at an annual rate equal to LIBOR plus 3.40% and LIBOR plus 4.25%, respectively. The Subordinated Debentures are redeemable by the Company at a redemption price equal to 100% of their principal amount. Credit Agreement In 2019, the Company refinanced its existing credit agreement and entered into a new credit agreement (the “2019 Credit Agreement”), with JPMorgan Chase Bank, N.A., as Administrative Agent, KeyBank National Association and Fifth Third Bank, as Co-Syndication Agents, and the various lending institutions party thereto. The 2019 Credit Agreement is currently a $340,000 base revolving credit facility with a letter of credit sublimit of $150,000 and an expansion feature of up to $50,000. Borrowings under the 2019 Credit Agreement bear interest at either the Alternate Base Rate (“ABR”) or the LIBOR rate. ABR borrowings under the 2019 Credit Agreement will bear intere st at the great est of (a) the prime rate in effect on such day, (b) the federal funds effective rate on such day plus 0.5 percent or (c) the adjusted LIBOR rate for a one-month interest period on such day plus 1 percent. Eurodollar borrowings under the 2019 Credit Agreement will bear interest at the adjusted LIBOR rate plus the Eurodollar spread for the interest period in effect. Fees payable by the Company under the 2019 Credit Agreement include a letter of credit participation fee, a letter of credit fronting fee with respect to each letter of credit (0.125%) and a commitment fee on the available commitments of the lenders (a range of 0.175% to 0.25% based on the Company’s consolidated leverage ratio; and as of March 31, 2020, the rate wa s 0.225%). The 2019 Credit Agreement has a maturity date of February 25, 2023. Maturities of the Company’s debt for the years subsequent to March 31, 2020 are as follows: 2020 (remaining nine months) 2021 2022 2023 2024 2025 Thereafter Total 6.75% Notes $ — $ — $ — $ — $ 350,000 $ — $ — $ 350,000 7.625% Notes — — — — — — 100,000 100,000 Subordinated Debentures I — — — — — — 41,238 41,238 Subordinated Debentures II — — — — — — 30,930 30,930 2019 Credit Agreement — — — 140,000 — — — 140,000 Finance lease liabilities 5,380 5,664 3,439 2,144 1,360 735 2,224 20,946 Other 4,819 2,943 — — — — — 7,762 Total principal amount of debt $ 10,199 $ 8,607 $ 3,439 $ 142,144 $ 351,360 $ 735 $ 174,392 $ 690,876 Unamortized debt issuance costs and unamortized discount (5,798) Carrying amount of debt $ 685,078 Covenants and Compliance The indenture relating to the 6.75% Notes and 7.625% Notes contains customary covenants, such as reporting of annual and quarterly financial results, and restrictions on certain mergers and consolidations, as well as covenants relating to the incurrence of debt if the Company’s consolidated leverage ratio would exceed 0.35 to 1.00, a limitation on liens, a limitation on the disposition of stock of certain of the Company’s subsidiaries and a limitation on transactions with certain of the Company’s affiliates. The 2019 Credit Agreement contains certain restrictive covenants customary for facilities of this type (subject to negotiated exceptions and baskets), including restrictions on indebtedness, liens, acquisitions and investments, restricted payments and dispositions. There are also financial covenants that require the Company to maintain a minimum consolidated net worth, a maximum consolidated leverage ratio, a minimum risk-based capital and a minimum rating. The 2019 Credit Agreement also provides for customary events of default, with grace periods where customary, including failure to pay principal when due, failure to pay interest or fees within three business days after becoming due, failure to comply with covenants, breaches of representations and warranties, default under certain other indebtedness, certain insolvency or receivership events affecting the Company and its subsidiaries, the occurrence of certain material judgments, or a change in control of the Company. Upon the occurrence and during the continuation of an event of default, the administrative agent, upon the request of the requisite percentage of the lenders, may terminate the obligations of the lenders to make loans and to issue letters of credit under the 2019 Credit Agreement, declare the Company’s obligations under the 2019 Credit Agreement to become immediately due and payable and/or exercise any and all remedies and other rights under the 2019 Credit Agreement. As of March 31, 2020, the Company was in compliance with the covenants contained in the Company’s debt agreements. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Litigation The Company is routinely involved in legal proceedings arising in the ordinary course of business, in particular in connection with claims adjudication with respect to its policies. Management believes it has recorded adequate reserves for these liabilities and that there is no individual case pending that is likely to have a material adverse effect on our financial condition or results of operations. On July 25, 2019, the City of North Miami Beach Police Officers’ and Firefighters’ Retirement Plan filed a complaint in the U.S. District Court for the Central District of California against the Company and certain of its officers. On November 19, 2019, the U.S. District Court for the Central District of California granted the Company’s Motion to Transfer the case to the Southern District of New York. On January 10, 2020, lead plaintiffs Town of Davie Police Officers Retirement System and Massachusetts Laborers’ Pension Fund filed an amended Complaint asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder based on allegedly false and misleading statements made by the Company in its SEC filings in relationship to the Company’s involvement in the historical and no longer existing Wells Fargo collateral protection insurance program on behalf of a purported class of individuals and entities who purchased or otherwise acquired shares of the Company’s common stock between July 15, 2015 and August 9, 2017. The amended complaint seeks damages in an amount to be proven at trial. The Company filed a Motion to Dismiss the amended complaint on March 10, 2020. Management believes that the claims set forth in the amended complaint are unfounded and without merit and intends to vigorously contest them. The Company notes, however, that in light of the inherent uncertainty in legal proceedings, the Company can give no assurance as to the ultimate resolution of the matter, and an estimate of the possible loss or range of loss, if any, cannot be made at this time. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company files a consolidated Federal income tax return. The Reciprocal Exchanges are not included in the Company’s consolidated tax return as the Company does not have an ownership interest in the Reciprocal Exchanges, and they are not a part of the consolidated tax sharing agreement among the Company and its subsidiaries. The Company uses the estimated annual effective tax rate method. Certain items, including those deemed to be unusual, infrequent or that cannot be reliably estimated, are excluded from the estimated annual effective tax rate. In these cases, the actual tax expense or benefit is reported in the same period as the related item. Certain tax effects are also not reflected in the estimated annual effective tax rate, primarily certain changes in the realizability of deferred tax assets and uncertain tax positions. The Company’s consolidated effective tax rate increased from 20.9% for the three months ended March 31, 2019 to 21.9% for the three months ended March 31, 2020. The increase in consolidated effective tax rate for the periods was primarily driven by an increase in tax associated with U.S shareholder’s income and other nondeductible items. All tax liabilities are payable to the Internal Revenue Service (“IRS”) and various state and local taxing agencies. The Company’s subsidiaries are currently under audit by the IRS for the year ended December 31, 2016 and 2017, and open to audit years thereafter for federal tax purposes. For state and local tax purposes, the Company is open to audit for tax years ended December 31, 2016 forward, depending on jurisdiction. The Company continues to consider the tax impact of recent legislation passed to mitigate the impact of COVID-19, such as the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). At this time, the Company believes that the provisions of the Act will not have a material tax impact. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Preferred Stock The Company has four separate series (Series A through D) of preferred stock outstanding. Two of these series (Series B and C) were issued in offerings using depositary shares. Dividends on the Series A, B and C preferred stock are payable on the liquidation preference amount, on a non-cumulative basis, when, as and if declared by the Company’s Board of Directors, quarterly in arrears on the 15th day of January, April, July and October of each year. Dividends on the Series D preferred stock are payable on the liquidation preference amount, on a non-cumulative basis, when, as and if declared by the Company’s Board of Directors, semi-annually in arrears on the 15th day of January and July of each year, commencing on January 15, 2019. On or after July 15, 2023 (or in the event of a fundamental change of the Company, at any time), the Series D preferred stock may be converted at the holder’s option into shares of the Company’s common stock. A summary description of the terms of these series of preferred stock is presented in the table below: Series Dividend rate Shares of preferred stock issued Depositary shares issued Liquidation preference per share Aggregate liquidation preference A 7.50 % 2,200,000 — $ 25 $ 55,000 B 7.50 % 165,000 6,600,000 $ 1,000 $ 165,000 C 7.50 % 200,000 8,000,000 $ 1,000 $ 200,000 D Fixed/ Floating (1) 120 — $ 250,000 $ 30,000 (1) Dividend rate is fixed at 7.00% prior to July 15, 2023 and floating at six-month LIBOR plus 5.4941% thereafter. Common Stock and Preferred Stock Dividends Dividends are payable on the Company’s common and preferred stock only when, as and if declared by the Company’s Board of Directors in its discretion, from funds legally available for this purpose. The following tables present the class of stock, declaration date and dividends paid per share: Class of Stock Declaration Date Dividend Dividend Per Depositary Share Common stock February 20, 2020 $ 0.05 Preferred stock Series A February 20, 2020 $ 0.46875 Preferred stock Series B and Series C February 20, 2020 $ 18.75 $ 0.46875 Class of Stock Declaration Date Dividend Dividend Per Depositary Share Common stock February 25, 2019 $ 0.04 Preferred stock Series A February 25, 2019 $ 0.46875 Preferred stock Series B and Series C February 25, 2019 $ 18.75 $ 0.46875 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In 2019, the Company’s stockholders approved the 2019 Omnibus Incentive Plan (the “2019 Plan”). The 2019 Plan authorizes up to 2.5 million shares of the Company’s stock for awards of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance share units, performance units, cash-based awards or other stock-based awards. The number of shares of common stock for which awards may be issued may not exceed 2.5 million shares, subject to the authority of the Company’s Board of Directors to adjust this amount in the event of a consolidation, reorganization, stock dividend, recapitalization or similar transaction affecting the Company’s common stock. The 2019 Plan serves as a successor of the Company’s prior equity incentive plans. Outstanding awards under the prior plans continue to be outstanding and subject to their terms and conditions. As of March 31, 2020, approximately 1.9 million shares of the Company’s common stock remained available for grants under the 2019 Plan. Stock Options A summary of the stock option awards granted under the prior plan is shown below: Shares Subject to Options Outstanding Three Months Ended March 31, 2020 Number of Shares Weighted- Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (1) Outstanding at beginning of the period 3,025,587 $ 9.83 Exercised (120,738) 3.67 Outstanding and exercisable at end of the period 2,904,849 $ 10.09 3.0 $ 18,862 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing price of the Company’s common stock of $16.55, as reported on the Nasdaq Global Market on March 31, 2020. No options were granted, forfeited or expired during the three months ended March 31, 2020. The total intrinsic value of the options exercised for the three months ended March 31, 2020 and 2019 was $2,126 and $526, respectively. The total fair value of stock options vested for the three months ended March 31, 2020 and 2019 was $178 and $37, respectively. Restricted Stock Units A summary of the RSUs is shown below: RSUs Three Months Ended March 31, 2020 Number of RSUs Weighted-Average Grant Date Fair Value Non-vested at beginning of the period 1,033,631 $ 23.98 Granted 543,997 21.52 Vested (381,676) 23.58 Non-vested at end of the period 1,195,952 $ 22.99 The weighted-average grant date fair value of RSUs granted for the three months ended March 31, 2020 and 2019 was $21.52 and $25.60, respectively. The total fair value of the RSUs vested for the three months ended March 31, 2020 and 2019 was $9,002 and $5,796, respectively. Stock-Based Compensation Expense Stock-based compensation expense, included in general and administrative expenses, for all stock-based compensation plans was $3,162 and $2,622 for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, the Company had approximately $24,749 of unrecognized stock-based compensation expense related to RSUs awards. This unrecognized stock-based compensation expense is expected to be recognized over a weighted-average period of approximately 1.6 years based on vesting under the award service conditions. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following is a summary of the elements used in calculating basic and diluted earnings per common share: Three Months Ended March 31, 2020 2019 Numerator: Net income attributable to NGHC $ 100,759 $ 91,758 Preferred stock dividends - nonconvertible (7,875) (7,875) Preferred stock dividends - convertible — — Numerator for basic EPS 92,884 83,883 Effect of dilutive securities: Preferred stock dividends - convertible — — Numerator for diluted EPS - after assumed conversions $ 92,884 $ 83,883 Denominator: Denominator for basic EPS - weighted-average shares outstanding 113,557,441 113,014,711 Effect of dilutive securities: Employee stock options 1,454,379 1,939,844 RSUs 274,051 331,198 Convertible preferred stock 789,473 789,473 Dilutive potential common shares 2,517,903 3,060,515 Denominator for diluted EPS - weighted-average shares outstanding and assumed conversions 116,075,344 116,075,226 Basic EPS $ 0.82 $ 0.74 Diluted EPS $ 0.80 $ 0.72 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The significant shareholder of the Company has an ownership interest in AmTrust and ACP Re. The Company is a party to the following transactions with these related entities: Equity Method Investments The Company has an ownership interest in an LSC Entity, limited liability companies and limited partnerships with related parties. See Note 4, “Investments - Equity Method Investments - Related Parties” for additional information. Agreements with ACP Re Credit Agreement The Company is party to a credit agreement (the “ACP Re Credit Agreement”) by and among AmTrust, as administrative agent, ACP Re Holdings, LLC, a Delaware limited liability company owned by a related party trust, the Michael Karfunkel Family 2005 Trust (the “Trust”), as borrower, and AmTrust and the Company, as lenders of $250,000 ($125,000 each lender). The amounts borrowed are secured by equity interests, cash and, other investments held by ACP Re Holdings, LLC in an amount equal to 115% of the outstanding loan balance. The maturity date of the loan is September 20, 2036. The interest rate on the outstanding principal balance is a fixed annual rate of 3.7%, provided that up to 1.2% thereof may be paid in kind. The Trust is required to cause ACP Re Holdings, LLC to maintain assets having a value greater than 115% of the outstanding loan balance, and if there is a shortfall, the Trust will make a contribution to ACP Re Holdings, LLC of assets having a market value of at least the shortfall (the “Maintenance Covenant”). Commencing on September 20, 2026, and for each year thereafter, two percent of the then outstanding principal balance of the loan (inclusive of any amounts previously paid in kind) is due and payable. A change of control of greater than 50% and an uncured breach of the Maintenance Covenant are included as events of default. As of March 31, 2020 and December 31, 2019 the Company had a receivable principal amount related to the ACP Re Credit Agreement of $130,004 and $129,229, respectively. The Company recorded interest income of $1,203 and $1,188 for the three months ended March 31, 2020 and 2019, respectively, under the ACP Re Credit Agreement. Management determined no impairment reserve was needed for the carrying value of the loan at March 31, 2020 and December 31, 2019 based on the collateral levels maintained. Other Related Party Transactions Lease Agreements The Company leases office space at 59 Maiden Lane in New York, New York from 59 Maiden Lane Associates LLC, an entity that is wholly-owned by the Karfunkel family. The lease term is through 2022. The Company paid $207 and $207 in rent for the three months ended March 31, 2020 and 2019, respectively. The Company leases office space at 30 North LaSalle Street, Chicago, Illinois from 30 North LaSalle Street Partners LLC, an entity that is wholly-owned by the Karfunkel family. The lease term is through 2025. The Company paid $108 and $76 in rent for the three months ended March 31, 2020 and 2019, respectively. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company currently operates two business segments, “Property and Casualty” and “Accident and Health.” The “Corporate and Other” column represents the activities of the holding company, as well as income from the Company’s investment portfolio. The Company evaluates segment profits attributable to the performance of activities within the segment separately from the results of the Company’s investment portfolio. Other operating expenses allocated to the segments are called “General and administrative expenses” which are allocated on an actual basis except corporate salaries and benefits where management’s judgment is applied. In determining total assets by segment, the Company identifies those assets that are attributable to a particular segment such as premiums receivable, deferred acquisition costs, reinsurance recoverable, prepaid reinsurance premiums, intangible assets and goodwill, while the remaining assets are allocated to Corporate and Other. The Property and Casualty segment, which includes the Reciprocal Exchanges and the management companies, reports the management fees earned by the Company from the Reciprocal Exchanges for underwriting, investment management and other services as service and fee income. The effects of these transactions between the Company and the Reciprocal Exchanges are eliminated in consolidation to derive consolidated net income. However, the management fee income is reported in net income attributable to NGHC and included in the basic and diluted earnings per share. The following tables summarize the results of operations of the operating segments: Three Months Ended March 31, 2020 Property Accident Corporate Total Underwriting revenues: Gross premium written $ 1,289,529 $ 187,025 $ — $ 1,476,554 Ceded premiums (248,142) (18,809) — (266,951) Net premium written 1,041,387 168,216 — 1,209,603 Change in unearned premium (130,887) (3,510) — (134,397) Net earned premium 910,500 164,706 — 1,075,206 Ceding commission income 49,745 560 — 50,305 Service and fee income 98,917 80,524 — 179,441 Total underwriting revenues 1,059,162 245,790 — 1,304,952 Underwriting expenses: Loss and loss adjustment expense 610,397 81,601 — 691,998 Acquisition costs and other underwriting expenses 159,771 68,471 — 228,242 General and administrative expenses 207,817 59,752 — 267,569 Total underwriting expenses 977,985 209,824 — 1,187,809 Underwriting income 81,177 35,966 — 117,143 Net investment income — — 30,243 30,243 Net loss on investments — — (6,861) (6,861) Interest expense — — (11,780) (11,780) Provision for income taxes — — (28,172) (28,172) Net loss attributable to noncontrolling interest — — 186 186 Net income attributable to NGHC $ 81,177 $ 35,966 $ (16,384) $ 100,759 Three Months Ended March 31, 2019 Property Accident Corporate Total Underwriting revenues: Gross premium written $ 1,251,234 $ 258,544 $ — $ 1,509,778 Ceded premiums (286,751) (58,363) — (345,114) Net premium written 964,483 200,181 — 1,164,664 Change in unearned premium (161,906) (38,601) — (200,507) Net earned premium 802,577 161,580 — 964,157 Ceding commission income 66,943 2,591 — 69,534 Service and fee income 104,495 61,012 — 165,507 Total underwriting revenues 974,015 225,183 — 1,199,198 Underwriting expenses: Loss and loss adjustment expense 567,060 84,749 — 651,809 Acquisition costs and other underwriting expenses 154,070 57,848 — 211,918 General and administrative expenses 189,456 58,638 — 248,094 Total underwriting expenses 910,586 201,235 — 1,111,821 Underwriting income 63,429 23,948 — 87,377 Net investment income — — 33,445 33,445 Net gain on investments — — 22 22 Interest expense — — (12,999) (12,999) Provision for income taxes — — (22,506) (22,506) Net loss attributable to noncontrolling interest — — 6,419 6,419 Net income attributable to NGHC $ 63,429 $ 23,948 $ 4,381 $ 91,758 The following tables summarize the financial position of the operating segments: March 31, 2020 Property Accident Corporate Total Premiums and other receivables, net $ 1,373,437 $ 167,928 $ 395 $ 1,541,760 Deferred acquisition costs 253,028 24,340 — 277,368 Reinsurance recoverable, net 1,380,374 21,307 — 1,401,681 Prepaid reinsurance premiums 511,613 35 — 511,648 Goodwill and Intangible assets, net 429,784 107,112 — 536,896 Prepaid and other assets 53,545 27,577 5,237 86,359 Corporate and other assets — — 5,504,862 5,504,862 Total assets $ 4,001,781 $ 348,299 $ 5,510,494 $ 9,860,574 December 31, 2019 Property Accident Corporate Total Premiums and other receivables, net $ 1,292,813 $ 131,877 $ 4,258 $ 1,428,948 Deferred acquisition costs 239,293 24,230 — 263,523 Reinsurance recoverable, net 1,377,284 17,024 — 1,394,308 Prepaid reinsurance premiums 575,712 35 — 575,747 Goodwill and Intangible assets, net 436,724 108,427 — 545,151 Prepaid and other assets 56,960 32,852 4,830 94,642 Corporate and other assets — — 5,454,215 5,454,215 Total assets $ 3,978,786 $ 314,445 $ 5,463,303 $ 9,756,534 The following tables summarize service and fee income by source within each operating segment: Three Months Ended March 31, 2020 2019 Property Accident Total Property Accident Total Commission revenue $ 18,751 $ 29,632 $ 48,383 $ 27,210 $ 24,771 $ 51,981 Finance and processing fees 35,789 2,471 38,260 32,436 2,024 34,460 Group health administrative fees — 29,975 29,975 — 23,505 23,505 Installment fees 25,088 — 25,088 24,170 — 24,170 Late payment fees 7,833 12 7,845 8,293 87 8,380 Other service and fee income 11,456 18,434 29,890 12,386 10,625 23,011 Total $ 98,917 $ 80,524 $ 179,441 $ 104,495 $ 61,012 $ 165,507 NGHC $ 97,760 $ 80,524 $ 178,284 $ 103,125 $ 61,012 $ 164,137 Reciprocal Exchanges 1,157 — 1,157 1,370 — 1,370 Total $ 98,917 $ 80,524 $ 179,441 $ 104,495 $ 61,012 $ 165,507 The following tables show an analysis of premiums and fee income by product line: Three Months Ended March 31, Gross Premium Written 2020 2019 Property and Casualty Personal Auto $ 794,497 $ 766,681 Homeowners 165,253 152,042 RV/Packaged 53,128 51,851 Small Business Auto 72,752 85,878 Lender-placed Insurance 95,444 75,938 Other 16,602 13,275 Total Property and Casualty 1,197,676 1,145,665 Accident and Health Group 87,538 64,938 Individual 99,487 84,192 International — 109,414 Total Accident and Health 187,025 258,544 Total NGHC $ 1,384,701 $ 1,404,209 Reciprocal Exchanges Personal Auto $ 31,809 $ 36,862 Homeowners 59,236 67,800 Other 808 907 Total Reciprocal Exchanges $ 91,853 $ 105,569 Total Gross Premium Written $ 1,476,554 $ 1,509,778 Three Months Ended March 31, Net Premium Written 2020 2019 Property and Casualty Personal Auto $ 702,307 $ 658,920 Homeowners 88,543 85,245 RV/Packaged 51,978 51,597 Small Business Auto 58,599 74,186 Lender-placed Insurance 77,469 42,070 Other 7,196 3,510 Total Property and Casualty 986,092 915,528 Accident and Health Group 69,471 53,950 Individual 98,745 84,123 International — 62,108 Total Accident and Health 168,216 200,181 Total NGHC $ 1,154,308 $ 1,115,709 Reciprocal Exchanges Personal Auto $ 29,074 $ 15,645 Homeowners 25,925 33,016 Other 296 294 Total Reciprocal Exchanges $ 55,295 $ 48,955 Total Net Premium Written $ 1,209,603 $ 1,164,664 Three Months Ended March 31, Net Earned Premium 2020 2019 Property and Casualty Personal Auto $ 579,502 $ 510,554 Homeowners 91,483 84,058 RV/Packaged 49,292 50,305 Small Business Auto 59,425 67,633 Lender-placed Insurance 69,667 41,718 Other 3,533 2,651 Total Property and Casualty 852,902 756,919 Accident and Health Group 69,470 53,963 Individual 95,236 82,235 International — 25,382 Total Accident and Health 164,706 161,580 NGHC Total $ 1,017,608 $ 918,499 Reciprocal Exchanges Personal Auto $ 32,923 $ 15,861 Homeowners 24,333 29,491 Other 342 306 Total Reciprocal Exchanges 57,598 45,658 Total Net Earned Premium $ 1,075,206 $ 964,157 Three Months Ended March 31, Fee Income 2020 2019 Property and Casualty Service and Fee Income $ 97,760 $ 103,125 Ceding Commission Income 36,031 48,409 Total Property and Casualty 133,791 151,534 Accident and Health Service and Fee Income Group 40,482 30,374 Individual 2,217 2,136 Third-Party Fee 37,825 28,502 Total Service and Fee Income 80,524 61,012 Ceding Commission Income 560 2,591 Total Accident and Health 81,084 63,603 NGHC Total $ 214,875 $ 215,137 Reciprocal Exchanges Service and Fee Income $ 1,157 $ 1,370 Ceding Commission Income 13,714 18,534 Total Reciprocal Exchanges $ 14,871 $ 19,904 Total Fee Income $ 229,746 $ 235,041 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Events On April 29, 2020, the Board of Directors of the Company authorized and approved a share repurchase program for up to $50,000 aggregate purchase price of the currently outstanding shares of the Company’s common stock over the next 12 months. Under the share repurchase program, the Company may from time to time repurchase shares through open market or block purchases, or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934. The Company’s share repurchase program may be modified, suspended or terminated at any time. The Company cannot predict the timing or number of shares it may repurchase as the share repurchase program will depend on various factors, including price and general business and market conditions. On April 23, 2020, the Company disclosed it would provide a 15 percent credit on April premiums for personal auto insurance customers with a policy in force as of April 30, 2020, and will automatically be credited to their policy, subject to state regulatory approvals and other relief requirements. Such amounts have not been recorded in these financial statements. |
Basis of Reporting Basis of Rep
Basis of Reporting Basis of Reporting (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting, Policy | The accompanying unaudited interim condensed consolidated financial statements include the accounts of National General Holdings Corp. and its subsidiaries (the “Company” or “NGHC”) and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These interim condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, previously filed with the SEC on February 20, 2020. The balance sheet at December 31, 2019, has been derived from the audited consolidated financial statements at that date. These interim condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim period and all such adjustments are of a normal recurring nature. The results of operations for the interim period are not necessarily indicative, if annualized, of those to be expected for the full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Investment Impairments | Investment Impairments The Company conducts a periodic review to identify and evaluate invested assets that may have credit impairments. Beginning on January 1, 2020, credit losses on available-for-sale debt securities are recognized through an allowance account. See Note 4, “Investments” for additional information. The Company reports investment income accrued separately from debt securities, available for sale, and has elected not to measure an allowance for credit losses for investment income accrued. Investment income accrued is written off by reversing interest income through net investment income at the time the issuer of the bond defaults or is expected to default on payments. |
Premiums and Other Receivables | Premiums and Other Receivables Premium and other receivables are reported net of an allowance for expected credit losses. The allowance is based upon the Company’s ongoing review of amounts outstanding, historical loss data, including delinquencies and write-offs, current and forecasted economic conditions, and other relevant factors. Credit risk is partially mitigated by the Company’s ability to cancel the policy if the policyholder does not pay the premium. |
Reinsurance Recoverable | Reinsurance Recoverable Amounts recoverable from reinsurers are estimated in a manner consistent with the associated claim liability. The Company reports its reinsurance recoverable net of an allowance for estimated uncollectible reinsurance. The allowance is based upon the Company’s ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, disputes, applicable coverage defenses, and other relevant factors. The Company evaluates and monitors the financial condition of its reinsurers under voluntary reinsurance arrangements to minimize its exposure to significant losses from reinsurer insolvencies. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted During 2020 Standard Description Date of Adoption Effect on the Company ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and related amendments. This standard changes the impairment model to a new forward-looking expected loss model for most financial assets and certain other instruments. The standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which will generally result in earlier recognition of allowances for credit losses on loans and other financial instruments. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. The Company will continue to use judgement to determine which loss estimation method is appropriate for their circumstances. The standard is effective for interim and annual reporting periods beginning after December 15, 2019 and requires using a modified retrospective approach, recognizing a cumulative-effect adjustment as of the beginning of the first reporting period in which the standard is effective. January 1, 2020 The Company adopted ASU 2016-13 using the modified retrospective approach and recorded a cumulative-effect adjustment of $1,010 to the opening balance of retained earnings and increased the allowance for premiums receivable and reinsurance recoverable by the same amount. ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard establishes a one-step process for testing the value of the goodwill which an entity carries. ASU 2017-04 requires the goodwill impairment to be measured as the excess of the reporting unit’s carrying amount over its fair value. January 1, 2020 The adoption of the standard did not have a material impact on the Company’s condensed consolidated financial statements. With the exception of the adopted accounting pronouncements discussed above, there have been no recent accounting pronouncements, or quantitative or qualitative progress made toward implementation of outstanding accounting pronouncements during the three months ended March 31, 2020, as compared to those described in Note 2, “Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, that are of significance, or potential significance, to the Company. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Adopted During 2020 Standard Description Date of Adoption Effect on the Company ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and related amendments. This standard changes the impairment model to a new forward-looking expected loss model for most financial assets and certain other instruments. The standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which will generally result in earlier recognition of allowances for credit losses on loans and other financial instruments. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. The Company will continue to use judgement to determine which loss estimation method is appropriate for their circumstances. The standard is effective for interim and annual reporting periods beginning after December 15, 2019 and requires using a modified retrospective approach, recognizing a cumulative-effect adjustment as of the beginning of the first reporting period in which the standard is effective. January 1, 2020 The Company adopted ASU 2016-13 using the modified retrospective approach and recorded a cumulative-effect adjustment of $1,010 to the opening balance of retained earnings and increased the allowance for premiums receivable and reinsurance recoverable by the same amount. ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard establishes a one-step process for testing the value of the goodwill which an entity carries. ASU 2017-04 requires the goodwill impairment to be measured as the excess of the reporting unit’s carrying amount over its fair value. January 1, 2020 The adoption of the standard did not have a material impact on the Company’s condensed consolidated financial statements. With the exception of the adopted accounting pronouncements discussed above, there have been no recent accounting pronouncements, or quantitative or qualitative progress made toward implementation of outstanding accounting pronouncements during the three months ended March 31, 2020, as compared to those described in Note 2, “Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, that are of significance, or potential significance, to the Company. |
Allowance for Expected Credit_2
Allowance for Expected Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Credit Loss [Abstract] | |
Premium Receivable, Allowance for Credit Loss | The following table presents the balances of premiums and other receivables, net of the allowance for expected credit losses, as of March 31, 2020 and January 1, 2020, and changes in the allowance for expected credit losses for the three months ended March 31, 2020. Premiums and Other Receivables, Net of Allowance for Expected Credit Losses Allowance for Expected Credit Losses Balance, beginning of the period $ 1,428,948 $ 24,067 Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020 762 Current period change for expected credit losses (1) 25,766 Write-offs of uncollectible premiums and other receivables (23,481) Balance, end of the period $ 1,541,760 $ 27,114 (1) Current period charges for expected losses are recorded in general and administrative expenses. |
Reinsurance Recoverable, Allowance for Credit Loss | The following table presents the balances of reinsurance recoverable, net of the allowance for estimated uncollectible reinsurance, as of March 31, 2020 and January 1, 2020, and changes in the allowance for estimated uncollectible reinsurance for the three months ended March 31, 2020. Reinsurance Receivable, Net of Allowance for Expected Credit Losses Allowance for Expected Credit Losses Balance, beginning of the period $ 1,394,308 $ — Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020 517 Current period change for estimated uncollectible reinsurance — Write-offs of uncollectible reinsurance — Balance, end of the period $ 1,401,681 $ 517 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-Sale Debt Securities | Amortized Allowance for Gross Unrealized Fair March 31, 2020 Cost Credit Losses (1) Gains Losses Value U.S. Treasury $ 56,656 $ — $ 4,398 $ — $ 61,054 Federal agencies 3,907 — 14 — 3,921 States and political subdivision bonds 292,734 — 8,931 (32) 301,633 Foreign government 1,762 — — (38) 1,724 Corporate bonds 1,922,412 (2,927) 35,738 (31,790) 1,923,433 Residential mortgage-backed securities 1,206,548 — 44,174 (1,416) 1,249,306 Commercial mortgage-backed securities 583,502 — 29,723 (1,856) 611,369 Asset-backed securities 48,993 — 261 (1,348) 47,906 Structured securities 209,680 — — (27,772) 181,908 Total $ 4,326,194 $ (2,927) $ 123,239 $ (64,252) $ 4,382,254 NGHC $ 4,014,997 $ (2,629) $ 115,574 $ (59,431) $ 4,068,511 Reciprocal Exchanges 311,197 (298) 7,665 (4,821) 313,743 Total $ 4,326,194 $ (2,927) $ 123,239 $ (64,252) $ 4,382,254 (1) Represents the amount of impairment that has resulted from credit-related factors recorded in net gain (loss) on investments. Amortized Gross Unrealized Fair December 31, 2019 Cost Gains Losses Value U.S. Treasury $ 65,037 $ 1,992 $ (23) $ 67,006 Federal agencies 3,907 8 — 3,915 States and political subdivision bonds 298,345 4,778 (1,441) 301,682 Foreign government 1,762 40 — 1,802 Corporate bonds 1,859,736 59,184 (2,357) 1,916,563 Residential mortgage-backed securities 1,265,830 15,747 (4,117) 1,277,460 Commercial mortgage-backed securities 585,044 27,261 (112) 612,193 Asset-backed securities 74,465 1,194 (48) 75,611 Structured securities 222,565 226 (2,665) 220,126 Total $ 4,376,691 $ 110,430 $ (10,763) $ 4,476,358 NGHC $ 4,057,501 $ 104,951 $ (10,343) $ 4,152,109 Reciprocal Exchanges 319,190 5,479 (420) 324,249 Total $ 4,376,691 $ 110,430 $ (10,763) $ 4,476,358 |
Available-for-Sale Debt Securities by Contractual Maturity | The amortized cost and fair value of available-for-sale debt securities held as of March 31, 2020, by contractual maturity, are shown in the table below. Actual maturities may differ from contractual maturities because some borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. NGHC Reciprocal Exchanges Total March 31, 2020 Amortized Fair Amortized Fair Amortized Fair Due in one year or less $ 58,383 $ 58,583 $ 110 $ 110 $ 58,493 $ 58,693 Due after one year through five years 1,002,735 1,006,418 127,214 128,065 1,129,949 1,134,483 Due after five years through ten years 983,649 977,567 79,997 78,303 1,063,646 1,055,870 Due after ten years 219,712 209,612 15,351 15,015 235,063 224,627 Mortgage-backed securities 1,750,518 1,816,331 88,525 92,250 1,839,043 1,908,581 Total $ 4,014,997 $ 4,068,511 $ 311,197 $ 313,743 $ 4,326,194 $ 4,382,254 |
Gross Unrealized Losses | The tables below summarize the gross unrealized losses on debt securities classified as available-for-sale, by length of time the security has continuously been in an unrealized loss position. Less Than 12 Months 12 Months or More Total March 31, 2020 Fair Unrealized Fair Unrealized Fair Unrealized States and political subdivision bonds $ 7,204 $ (28) $ 908 $ (4) $ 8,112 $ (32) Foreign government 1,724 (38) — — 1,724 (38) Corporate bonds 891,346 (31,790) — — 891,346 (31,790) Residential mortgage-backed securities 41,121 (1,416) — — 41,121 (1,416) Commercial mortgage-backed securities 55,768 (1,856) — — 55,768 (1,856) Asset-backed securities 32,912 (1,326) 233 (22) 33,145 (1,348) Structured securities 123,710 (14,710) 58,198 (13,062) 181,908 (27,772) Total $ 1,153,785 $ (51,164) $ 59,339 $ (13,088) $ 1,213,124 $ (64,252) NGHC $ 1,027,271 $ (46,838) $ 55,834 $ (12,593) $ 1,083,105 $ (59,431) Reciprocal Exchanges 126,514 (4,326) 3,505 (495) 130,019 (4,821) Total $ 1,153,785 $ (51,164) $ 59,339 $ (13,088) $ 1,213,124 $ (64,252) Less Than 12 Months 12 Months or More Total December 31, 2019 Fair Unrealized Fair Unrealized Fair Unrealized U.S. Treasury $ 19,903 $ (23) $ 500 $ — $ 20,403 $ (23) States and political subdivision bonds 106,103 (1,415) 2,580 (26) 108,683 (1,441) Corporate bonds 586,817 (2,253) 5,976 (104) 592,793 (2,357) Residential mortgage-backed securities 410,484 (4,074) 3,983 (43) 414,467 (4,117) Commercial mortgage-backed securities 18,250 (105) 748 (7) 18,998 (112) Asset-backed securities 5,406 (29) 920 (19) 6,326 (48) Structured securities 40,979 (94) 109,880 (2,571) 150,859 (2,665) Total $ 1,187,942 $ (7,993) $ 124,587 $ (2,770) $ 1,312,529 $ (10,763) NGHC $ 1,104,244 $ (7,654) $ 117,681 $ (2,689) $ 1,221,925 $ (10,343) Reciprocal Exchanges 83,698 (339) 6,906 (81) 90,604 (420) Total $ 1,187,942 $ (7,993) $ 124,587 $ (2,770) $ 1,312,529 $ (10,763) |
Debt Securities, Available-for-sale, Allowance for Credit Loss | The following table displays the roll forward of the allowance for credit losses for the period: Three Months Ended March 31, 2020 Corporate bonds Total Balance, beginning of the period $ — $ — Credit losses on securities not previously recorded 2,927 2,927 Balance, end of the period $ 2,927 $ 2,927 |
Investment Income | The components of net investment income consisted of the following: Three Months Ended March 31, 2020 2019 Cash and short-term investments $ 278 $ 1,497 Debt securities 32,102 29,467 Other, net (related parties - $(2,525) and $254) (768) 3,508 Investment income $ 31,612 $ 34,472 Investment expenses (1,369) (1,027) Net investment income $ 30,243 $ 33,445 NGHC $ 28,060 $ 31,275 Reciprocal Exchanges 2,183 2,170 Net investment income $ 30,243 $ 33,445 |
Net Realized Gains (Losses) | The table below indicates realized gains and losses on investments. Other, net includes realized gains and losses from short-term and other investments and foreign exchange. Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method. Three Months Ended March 31, 2020 2019 Debt securities, available-for-sale: Gross gains $ 273 $ 136 Gross losses (9) (256) Credit allowance (2,927) — Net realized loss on debt securities, available-for-sale (2,663) (120) Other, net (1) (4,198) 142 Net realized gain (loss) on investments $ (6,861) $ 22 NGHC $ (6,068) $ 766 Reciprocal Exchanges (793) (744) Net realized gain (loss) on investments $ (6,861) $ 22 (1) Includes gains and losses on publicly traded equities and foreign currency. |
Credit Quality of Investments | The tables below summarize the credit quality of debt securities, as rated by Standard & Poor’s (“S&P”). If a security is not rated by S&P, an S&P equivalent is determined based on ratings from similar rating agencies. Securities that are not rated are included in the “BB+ and lower” category. NGHC Reciprocal Exchanges March 31, 2020 Amortized Fair Percentage Amortized Fair Percentage U.S. Treasury $ 43,695 $ 47,084 1.2 % $ 12,961 $ 13,970 4.5 % AAA 528,158 543,778 13.4 % 20,845 21,169 6.7 % AA, AA+, AA- 1,618,321 1,675,017 41.2 % 115,089 118,870 37.9 % A, A+, A- 966,417 960,982 23.6 % 108,416 108,375 34.5 % BBB, BBB+, BBB- 830,937 817,798 20.1 % 52,986 50,862 16.2 % BB+ and lower 27,469 23,852 0.5 % 900 497 0.2 % Total $ 4,014,997 $ 4,068,511 100.0 % $ 311,197 $ 313,743 100.0 % NGHC Reciprocal Exchanges December 31, 2019 Amortized Fair Percentage Amortized Fair Percentage U.S. Treasury $ 52,108 $ 53,599 1.3 % $ 12,929 $ 13,407 4.1 % AAA 515,869 537,508 12.9 % 20,947 21,555 6.6 % AA, AA+, AA- 1,677,787 1,697,220 40.9 % 120,113 121,720 37.5 % A, A+, A- 954,312 976,468 23.5 % 116,747 119,041 36.7 % BBB, BBB+, BBB- 795,594 823,239 19.8 % 48,021 48,093 14.8 % BB+ and lower 61,831 64,075 1.6 % 433 433 0.3 % Total $ 4,057,501 $ 4,152,109 100.0 % $ 319,190 $ 324,249 100.0 % The tables below summarize the investment quality of the corporate bond holdings and industry concentrations. March 31, 2020 AAA AA+, A+,A,A- BBB+, BB+ or Fair % of Financial Institutions — % 3.5 % 26.0 % 12.5 % 0.3 % $ 813,631 42.3 % Industrials 0.7 % 2.6 % 22.5 % 29.3 % 0.3 % 1,065,463 55.4 % Utilities/Other — % — % 1.0 % 1.3 % — % 44,339 2.3 % Total 0.7 % 6.1 % 49.5 % 43.1 % 0.6 % $ 1,923,433 100.0 % NGHC 0.3 % 4.9 % 43.9 % 40.5 % 0.6 % $ 1,734,990 90.2 % Reciprocal Exchanges 0.4 % 1.2 % 5.6 % 2.6 % — % 188,443 9.8 % Total 0.7 % 6.1 % 49.5 % 43.1 % 0.6 % $ 1,923,433 100.0 % December 31, 2019 AAA AA+, A+,A,A- BBB+, BB+ or Fair % of Financial Institutions — % 3.6 % 25.0 % 12.1 % 0.3 % $ 785,910 41.0 % Industrials 0.7 % 2.7 % 24.1 % 29.0 % 0.1 % 1,083,959 56.6 % Utilities/Other — % — % 1.0 % 1.4 % — % 46,694 2.4 % Total 0.7 % 6.3 % 50.1 % 42.5 % 0.4 % $ 1,916,563 100.0 % NGHC 0.3 % 5.1 % 44.0 % 40.0 % 0.4 % $ 1,720,962 89.8 % Reciprocal Exchanges 0.4 % 1.2 % 6.1 % 2.5 % — % 195,601 10.2 % Total 0.7 % 6.3 % 50.1 % 42.5 % 0.4 % $ 1,916,563 100.0 % |
Cash, Cash Equivalents and Restricted Cash | Cash, cash equivalents, and restricted cash are as follows: March 31, 2020 December 31, 2019 Cash and cash equivalents $ 309,802 $ 135,942 Restricted cash and cash equivalents 30,070 28,521 Total cash, cash equivalents and restricted cash $ 339,872 $ 164,463 |
Restricted Investments | Restricted investments are as follows: March 31, 2020 December 31, 2019 Securities on deposit with state regulatory authorities $ 81,809 $ 74,061 Restricted investments to trusts in certain reinsurance transactions 42,369 49,502 Total restricted investments $ 124,178 $ 123,563 |
Other Investments | The table below summarizes the composition of other investments: March 31, 2020 December 31, 2019 Equity method investments (related parties - $105,839 and $109,612) $ 140,897 $ 143,511 Notes receivable (related parties - $130,004 and $129,229) (1) 130,067 129,299 Long-term Certificates of Deposit (CDs), at cost 150 20,150 Investments, at fair value 7,661 9,365 Investments, at cost or amortized cost 8,908 8,962 Total $ 287,683 $ 311,287 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | Assets measured at fair value on a recurring basis are as follows: March 31, 2020 Level 1 Level 2 Level 3 Total Available-for-sale debt securities: U.S. Treasury $ 61,054 $ — $ — $ 61,054 Federal agencies 3,921 — — 3,921 States and political subdivision bonds — 298,533 3,100 301,633 Foreign government — 1,724 — 1,724 Corporate bonds — 1,914,951 8,482 1,923,433 Residential mortgage-backed securities — 1,249,306 — 1,249,306 Commercial mortgage-backed securities — 611,369 — 611,369 Asset-backed securities — 47,906 — 47,906 Structured securities — 181,908 — 181,908 Total available-for-sale debt securities 64,975 4,305,697 11,582 4,382,254 Short-term investments 50,262 20,499 — 70,761 Other investments 3,829 — 3,832 7,661 Total $ 119,066 $ 4,326,196 $ 15,414 $ 4,460,676 NGHC $ 84,817 $ 4,026,924 $ 15,414 $ 4,127,155 Reciprocal Exchanges 34,249 299,272 — 333,521 Total $ 119,066 $ 4,326,196 $ 15,414 $ 4,460,676 December 31, 2019 Level 1 Level 2 Level 3 Total Available-for-sale debt securities: U.S. Treasury $ 67,006 $ — $ — $ 67,006 Federal agencies 3,915 — — 3,915 States and political subdivision bonds — 298,582 3,100 301,682 Foreign government — 1,802 — 1,802 Corporate bonds — 1,908,235 8,328 1,916,563 Residential mortgage-backed securities — 1,277,460 — 1,277,460 Commercial mortgage-backed securities — 612,193 — 612,193 Asset-backed securities — 75,611 — 75,611 Structured securities — 220,126 — 220,126 Total available-for-sale debt securities 70,921 4,394,009 11,428 4,476,358 Short-term investments 59,953 7,400 — 67,353 Other investments 4,881 — 4,484 9,365 Total $ 135,755 $ 4,401,409 $ 15,912 $ 4,553,076 NGHC $ 116,602 $ 4,091,068 $ 15,912 $ 4,223,582 Reciprocal Exchanges 19,153 310,341 — 329,494 Total $ 135,755 $ 4,401,409 $ 15,912 $ 4,553,076 |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation | The following tables provide a reconciliation of recurring fair value measurements of the Level 3 financial assets: States and Corporate Other Total Balance as of January 1, 2020 $ 3,100 $ 8,328 $ 4,484 $ 15,912 Total gains (losses) for the period: Included in earnings — — (375) (375) Included in other comprehensive income — 154 — 154 Sales — — (277) (277) Balance as of March 31, 2020 $ 3,100 $ 8,482 $ 3,832 $ 15,414 Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period $ — $ — $ (375) $ (375) Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period $ — $ 154 $ — $ 154 States and Corporate Other Total Balance as of January 1, 2019 $ 3,596 $ 11,767 $ 7,593 $ 22,956 Total gains (losses) for the period: Included in earnings — — (405) (405) Included in other comprehensive income 64 67 — 131 Balance as of March 31, 2019 $ 3,660 $ 11,834 $ 7,188 $ 22,682 Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period $ — $ — $ (405) $ (405) Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period $ 64 $ 67 $ — $ 131 |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table presents the carrying amount and estimated fair value of debt not carried at fair value, excluding finance lease and other liabilities, as well as the input level used to determine the fair value: March 31, 2020 December 31, 2019 Input Level Carrying amount Fair value Carrying amount Fair value 7.625% Notes Level 2 $ 96,950 $ 83,880 $ 96,928 $ 103,560 6.75% Notes Level 3 347,252 361,628 347,091 371,366 Subordinated Debentures Level 3 72,168 72,118 72,168 72,103 2019 Credit Agreement Level 3 140,000 141,227 140,000 148,272 |
Deferred Acquisition Costs (Tab
Deferred Acquisition Costs (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Deferred Acquisition Costs [Abstract] | |
Deferred Policy Acquisition Costs | The following table reflects the amounts of policy acquisition costs deferred and amortized: Three Months Ended March 31, 2020 2019 Property Accident Total Property Accident Total Balance, beginning of the period $ 239,293 $ 24,230 $ 263,523 $ 226,188 $ 25,220 $ 251,408 Additions 154,789 7,431 162,220 145,979 25,101 171,080 Amortization (141,054) (7,321) (148,375) (136,008) (18,303) (154,311) Change in DAC 13,735 110 13,845 9,971 6,798 16,769 Balance, end of the period $ 253,028 $ 24,340 $ 277,368 $ 236,159 $ 32,018 $ 268,177 NGHC $ 230,291 $ 24,340 $ 254,631 $ 215,854 $ 32,018 $ 247,872 Reciprocal Exchanges 22,737 — 22,737 20,305 — 20,305 Balance, end of the period $ 253,028 $ 24,340 $ 277,368 $ 236,159 $ 32,018 $ 268,177 |
Unpaid Losses and Loss Adjust_2
Unpaid Losses and Loss Adjustment Expense Reserves (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Insurance [Abstract] | |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense | The following tables present a reconciliation of beginning and ending balances for unpaid losses and LAE: Three Months Ended March 31, 2020 Property Accident NGHC Reciprocal Total Gross balance at beginning of the period $ 2,528,754 $ 151,874 $ 2,680,628 $ 205,786 $ 2,886,414 Less: Reinsurance recoverable at beginning of the period (1,016,368) (11,266) (1,027,634) (84,174) (1,111,808) Net balance at beginning of the period 1,512,386 140,608 1,652,994 121,612 1,774,606 Incurred losses and LAE related to: Current year 563,559 86,409 649,968 41,438 691,406 Prior year 4,471 (4,808) (337) 929 592 Total incurred 568,030 81,601 649,631 42,367 691,998 Paid losses and LAE related to: Current year (204,279) (25,820) (230,099) (18,169) (248,268) Prior year (397,862) (44,076) (441,938) (29,449) (471,387) Total paid (602,141) (69,896) (672,037) (47,618) (719,655) Net balance at end of the period 1,478,275 152,313 1,630,588 116,361 1,746,949 Plus: Reinsurance recoverable at end of the period 1,004,759 14,912 1,019,671 81,573 1,101,244 Gross balance at end of the period $ 2,483,034 $ 167,225 $ 2,650,259 $ 197,934 $ 2,848,193 Three Months Ended March 31, 2019 Property Accident NGHC Reciprocal Total Gross balance at beginning of the period $ 2,507,409 $ 271,280 $ 2,778,689 $ 178,470 $ 2,957,159 Less: Reinsurance recoverable at beginning of the period (1,182,588) (24,575) (1,207,163) (77,979) (1,285,142) Net balance at beginning of the period 1,324,821 246,705 1,571,526 100,491 1,672,017 Incurred losses and LAE related to: Current year 530,549 95,601 626,150 39,973 666,123 Prior year (5,514) (10,852) (16,366) 2,052 (14,314) Total incurred 525,035 84,749 609,784 42,025 651,809 Paid losses and LAE related to: Current year (130,395) (33,681) (164,076) (14,949) (179,025) Prior year (422,560) (53,310) (475,870) (21,478) (497,348) Total paid (552,955) (86,991) (639,946) (36,427) (676,373) Effect of foreign exchange rates — 1,094 1,094 — 1,094 Net balance at end of the period 1,296,901 245,557 1,542,458 106,089 1,648,547 Plus: Reinsurance recoverable at end of the period 1,103,114 28,729 1,131,843 89,933 1,221,776 Gross balance at end of the period $ 2,400,015 $ 274,286 $ 2,674,301 $ 196,022 $ 2,870,323 |
Reinsurance (Tables)
Reinsurance (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Insurance [Abstract] | |
Schedule of Reinsurance Recoverable | Reinsurance recoverable is as follows: March 31, 2020 December 31, 2019 Reinsurance recoverable on paid losses $ 300,954 $ 282,500 Reinsurance recoverable on unpaid losses 1,101,244 1,111,808 Allowance for uncollectible reinsurance (517) — Reinsurance recoverable, net $ 1,401,681 $ 1,394,308 |
Schedule of Effect of Reinsurance on Unpaid Loss and LAE Reserves and Unearned Premiums | The following is the effect of reinsurance on unpaid loss and LAE reserves and unearned premiums: March 31, 2020 December 31, 2019 Assumed Ceded Assumed Ceded Unpaid Loss and LAE reserves $ 46,868 $ 1,101,244 $ 50,884 $ 1,111,808 Unearned premiums 17,193 511,648 15,278 575,747 |
Schedule of Effect of Reinsurance on Premiums | The following is the effect of reinsurance on premiums and loss and LAE: Three Months Ended March 31, 2020 2019 Premiums: Written Earned Written Earned Direct $ 1,458,533 $ 1,390,150 $ 1,489,188 $ 1,315,705 Assumed 18,021 16,106 20,590 21,000 Total Gross Premium 1,476,554 1,406,256 1,509,778 1,336,705 Ceded (266,951) (331,050) (345,114) (372,548) Net Premium $ 1,209,603 $ 1,075,206 $ 1,164,664 $ 964,157 |
Schedule of Effect of Reinsurance on Losses | Three Months Ended March 31, 2020 2019 Assumed Ceded Assumed Ceded Loss and LAE $ 6,635 $ 196,486 $ 5,322 $ 209,322 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Instruments | The following table represents the Company’s debt: Interest Rate Maturity March 31, 2020 December 31, 2019 Fixed-rate: 6.75% Notes 6.75% 2024 $ 350,000 $ 350,000 7.625% Notes 7.625% 2055 100,000 100,000 Floating-rate: Subordinated Debentures I (1) LIBOR + 3.40% 2035 41,238 41,238 Subordinated Debentures II (2) LIBOR + 4.25% 2037 30,930 30,930 2019 Credit Agreement (3) LIBOR + 1.75% 2023 140,000 140,000 Finance lease liabilities Various Various 20,946 20,477 Other 3.5% Various 7,762 9,342 Unamortized debt issuance costs and unamortized discount (5,798) (5,981) Total carrying amount of debt $ 685,078 $ 686,006 (1) Interest rate was 4.14% and 5.29%, as of March 31, 2020 and December 31, 2019, respectively. (2) Interest rate was 4.99% and 6.14%, as of March 31, 2020 and December 31, 2019, respectively. (3) Weighted-average interest rate was 2.75% and 3.59% as of March 31, 2020 and December 31, 2019, respectively. |
Schedule of Interest Expense | The following table presents the Company’s interest expense: Three Months Ended March 31, Interest Payment Frequency 2020 2019 6.75% Notes Semiannually $ 5,906 $ 5,906 7.625% Notes Quarterly 1,906 1,906 Subordinated Debentures Quarterly 997 1,163 2016 Credit Agreement Quarterly — 1,211 2019 Credit Agreement Quarterly 1,215 529 Finance lease liabilities Various 371 294 Other (1) Various 1,385 1,990 Total interest expense $ 11,780 $ 12,999 (1) Includes interest for other liabilities, interest credited on funds held balances and accretion of debt issuance costs. |
Schedule of Maturities of Long-term Debt | Maturities of the Company’s debt for the years subsequent to March 31, 2020 are as follows: 2020 (remaining nine months) 2021 2022 2023 2024 2025 Thereafter Total 6.75% Notes $ — $ — $ — $ — $ 350,000 $ — $ — $ 350,000 7.625% Notes — — — — — — 100,000 100,000 Subordinated Debentures I — — — — — — 41,238 41,238 Subordinated Debentures II — — — — — — 30,930 30,930 2019 Credit Agreement — — — 140,000 — — — 140,000 Finance lease liabilities 5,380 5,664 3,439 2,144 1,360 735 2,224 20,946 Other 4,819 2,943 — — — — — 7,762 Total principal amount of debt $ 10,199 $ 8,607 $ 3,439 $ 142,144 $ 351,360 $ 735 $ 174,392 $ 690,876 Unamortized debt issuance costs and unamortized discount (5,798) Carrying amount of debt $ 685,078 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Preferred Stock | A summary description of the terms of these series of preferred stock is presented in the table below: Series Dividend rate Shares of preferred stock issued Depositary shares issued Liquidation preference per share Aggregate liquidation preference A 7.50 % 2,200,000 — $ 25 $ 55,000 B 7.50 % 165,000 6,600,000 $ 1,000 $ 165,000 C 7.50 % 200,000 8,000,000 $ 1,000 $ 200,000 D Fixed/ Floating (1) 120 — $ 250,000 $ 30,000 (1) Dividend rate is fixed at 7.00% prior to July 15, 2023 and floating at six-month LIBOR plus 5.4941% thereafter. |
Schedule of Dividends Declared | The following tables present the class of stock, declaration date and dividends paid per share: Class of Stock Declaration Date Dividend Dividend Per Depositary Share Common stock February 20, 2020 $ 0.05 Preferred stock Series A February 20, 2020 $ 0.46875 Preferred stock Series B and Series C February 20, 2020 $ 18.75 $ 0.46875 Class of Stock Declaration Date Dividend Dividend Per Depositary Share Common stock February 25, 2019 $ 0.04 Preferred stock Series A February 25, 2019 $ 0.46875 Preferred stock Series B and Series C February 25, 2019 $ 18.75 $ 0.46875 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation, Stock Options, Activity | A summary of the stock option awards granted under the prior plan is shown below: Shares Subject to Options Outstanding Three Months Ended March 31, 2020 Number of Shares Weighted- Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (1) Outstanding at beginning of the period 3,025,587 $ 9.83 Exercised (120,738) 3.67 Outstanding and exercisable at end of the period 2,904,849 $ 10.09 3.0 $ 18,862 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing price of the Company’s common stock of $16.55, as reported on the Nasdaq Global Market on March 31, 2020. |
Schedule of Stock-based Compensation, Restricted Stock Units Award Activity | A summary of the RSUs is shown below: RSUs Three Months Ended March 31, 2020 Number of RSUs Weighted-Average Grant Date Fair Value Non-vested at beginning of the period 1,033,631 $ 23.98 Granted 543,997 21.52 Vested (381,676) 23.58 Non-vested at end of the period 1,195,952 $ 22.99 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a summary of the elements used in calculating basic and diluted earnings per common share: Three Months Ended March 31, 2020 2019 Numerator: Net income attributable to NGHC $ 100,759 $ 91,758 Preferred stock dividends - nonconvertible (7,875) (7,875) Preferred stock dividends - convertible — — Numerator for basic EPS 92,884 83,883 Effect of dilutive securities: Preferred stock dividends - convertible — — Numerator for diluted EPS - after assumed conversions $ 92,884 $ 83,883 Denominator: Denominator for basic EPS - weighted-average shares outstanding 113,557,441 113,014,711 Effect of dilutive securities: Employee stock options 1,454,379 1,939,844 RSUs 274,051 331,198 Convertible preferred stock 789,473 789,473 Dilutive potential common shares 2,517,903 3,060,515 Denominator for diluted EPS - weighted-average shares outstanding and assumed conversions 116,075,344 116,075,226 Basic EPS $ 0.82 $ 0.74 Diluted EPS $ 0.80 $ 0.72 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | The following tables summarize the results of operations of the operating segments: Three Months Ended March 31, 2020 Property Accident Corporate Total Underwriting revenues: Gross premium written $ 1,289,529 $ 187,025 $ — $ 1,476,554 Ceded premiums (248,142) (18,809) — (266,951) Net premium written 1,041,387 168,216 — 1,209,603 Change in unearned premium (130,887) (3,510) — (134,397) Net earned premium 910,500 164,706 — 1,075,206 Ceding commission income 49,745 560 — 50,305 Service and fee income 98,917 80,524 — 179,441 Total underwriting revenues 1,059,162 245,790 — 1,304,952 Underwriting expenses: Loss and loss adjustment expense 610,397 81,601 — 691,998 Acquisition costs and other underwriting expenses 159,771 68,471 — 228,242 General and administrative expenses 207,817 59,752 — 267,569 Total underwriting expenses 977,985 209,824 — 1,187,809 Underwriting income 81,177 35,966 — 117,143 Net investment income — — 30,243 30,243 Net loss on investments — — (6,861) (6,861) Interest expense — — (11,780) (11,780) Provision for income taxes — — (28,172) (28,172) Net loss attributable to noncontrolling interest — — 186 186 Net income attributable to NGHC $ 81,177 $ 35,966 $ (16,384) $ 100,759 Three Months Ended March 31, 2019 Property Accident Corporate Total Underwriting revenues: Gross premium written $ 1,251,234 $ 258,544 $ — $ 1,509,778 Ceded premiums (286,751) (58,363) — (345,114) Net premium written 964,483 200,181 — 1,164,664 Change in unearned premium (161,906) (38,601) — (200,507) Net earned premium 802,577 161,580 — 964,157 Ceding commission income 66,943 2,591 — 69,534 Service and fee income 104,495 61,012 — 165,507 Total underwriting revenues 974,015 225,183 — 1,199,198 Underwriting expenses: Loss and loss adjustment expense 567,060 84,749 — 651,809 Acquisition costs and other underwriting expenses 154,070 57,848 — 211,918 General and administrative expenses 189,456 58,638 — 248,094 Total underwriting expenses 910,586 201,235 — 1,111,821 Underwriting income 63,429 23,948 — 87,377 Net investment income — — 33,445 33,445 Net gain on investments — — 22 22 Interest expense — — (12,999) (12,999) Provision for income taxes — — (22,506) (22,506) Net loss attributable to noncontrolling interest — — 6,419 6,419 Net income attributable to NGHC $ 63,429 $ 23,948 $ 4,381 $ 91,758 The following tables summarize the financial position of the operating segments: March 31, 2020 Property Accident Corporate Total Premiums and other receivables, net $ 1,373,437 $ 167,928 $ 395 $ 1,541,760 Deferred acquisition costs 253,028 24,340 — 277,368 Reinsurance recoverable, net 1,380,374 21,307 — 1,401,681 Prepaid reinsurance premiums 511,613 35 — 511,648 Goodwill and Intangible assets, net 429,784 107,112 — 536,896 Prepaid and other assets 53,545 27,577 5,237 86,359 Corporate and other assets — — 5,504,862 5,504,862 Total assets $ 4,001,781 $ 348,299 $ 5,510,494 $ 9,860,574 December 31, 2019 Property Accident Corporate Total Premiums and other receivables, net $ 1,292,813 $ 131,877 $ 4,258 $ 1,428,948 Deferred acquisition costs 239,293 24,230 — 263,523 Reinsurance recoverable, net 1,377,284 17,024 — 1,394,308 Prepaid reinsurance premiums 575,712 35 — 575,747 Goodwill and Intangible assets, net 436,724 108,427 — 545,151 Prepaid and other assets 56,960 32,852 4,830 94,642 Corporate and other assets — — 5,454,215 5,454,215 Total assets $ 3,978,786 $ 314,445 $ 5,463,303 $ 9,756,534 |
Revenue from External Customers by Product Type | The following tables summarize service and fee income by source within each operating segment: Three Months Ended March 31, 2020 2019 Property Accident Total Property Accident Total Commission revenue $ 18,751 $ 29,632 $ 48,383 $ 27,210 $ 24,771 $ 51,981 Finance and processing fees 35,789 2,471 38,260 32,436 2,024 34,460 Group health administrative fees — 29,975 29,975 — 23,505 23,505 Installment fees 25,088 — 25,088 24,170 — 24,170 Late payment fees 7,833 12 7,845 8,293 87 8,380 Other service and fee income 11,456 18,434 29,890 12,386 10,625 23,011 Total $ 98,917 $ 80,524 $ 179,441 $ 104,495 $ 61,012 $ 165,507 NGHC $ 97,760 $ 80,524 $ 178,284 $ 103,125 $ 61,012 $ 164,137 Reciprocal Exchanges 1,157 — 1,157 1,370 — 1,370 Total $ 98,917 $ 80,524 $ 179,441 $ 104,495 $ 61,012 $ 165,507 The following tables show an analysis of premiums and fee income by product line: Three Months Ended March 31, Gross Premium Written 2020 2019 Property and Casualty Personal Auto $ 794,497 $ 766,681 Homeowners 165,253 152,042 RV/Packaged 53,128 51,851 Small Business Auto 72,752 85,878 Lender-placed Insurance 95,444 75,938 Other 16,602 13,275 Total Property and Casualty 1,197,676 1,145,665 Accident and Health Group 87,538 64,938 Individual 99,487 84,192 International — 109,414 Total Accident and Health 187,025 258,544 Total NGHC $ 1,384,701 $ 1,404,209 Reciprocal Exchanges Personal Auto $ 31,809 $ 36,862 Homeowners 59,236 67,800 Other 808 907 Total Reciprocal Exchanges $ 91,853 $ 105,569 Total Gross Premium Written $ 1,476,554 $ 1,509,778 Three Months Ended March 31, Net Premium Written 2020 2019 Property and Casualty Personal Auto $ 702,307 $ 658,920 Homeowners 88,543 85,245 RV/Packaged 51,978 51,597 Small Business Auto 58,599 74,186 Lender-placed Insurance 77,469 42,070 Other 7,196 3,510 Total Property and Casualty 986,092 915,528 Accident and Health Group 69,471 53,950 Individual 98,745 84,123 International — 62,108 Total Accident and Health 168,216 200,181 Total NGHC $ 1,154,308 $ 1,115,709 Reciprocal Exchanges Personal Auto $ 29,074 $ 15,645 Homeowners 25,925 33,016 Other 296 294 Total Reciprocal Exchanges $ 55,295 $ 48,955 Total Net Premium Written $ 1,209,603 $ 1,164,664 Three Months Ended March 31, Net Earned Premium 2020 2019 Property and Casualty Personal Auto $ 579,502 $ 510,554 Homeowners 91,483 84,058 RV/Packaged 49,292 50,305 Small Business Auto 59,425 67,633 Lender-placed Insurance 69,667 41,718 Other 3,533 2,651 Total Property and Casualty 852,902 756,919 Accident and Health Group 69,470 53,963 Individual 95,236 82,235 International — 25,382 Total Accident and Health 164,706 161,580 NGHC Total $ 1,017,608 $ 918,499 Reciprocal Exchanges Personal Auto $ 32,923 $ 15,861 Homeowners 24,333 29,491 Other 342 306 Total Reciprocal Exchanges 57,598 45,658 Total Net Earned Premium $ 1,075,206 $ 964,157 Three Months Ended March 31, Fee Income 2020 2019 Property and Casualty Service and Fee Income $ 97,760 $ 103,125 Ceding Commission Income 36,031 48,409 Total Property and Casualty 133,791 151,534 Accident and Health Service and Fee Income Group 40,482 30,374 Individual 2,217 2,136 Third-Party Fee 37,825 28,502 Total Service and Fee Income 80,524 61,012 Ceding Commission Income 560 2,591 Total Accident and Health 81,084 63,603 NGHC Total $ 214,875 $ 215,137 Reciprocal Exchanges Service and Fee Income $ 1,157 $ 1,370 Ceding Commission Income 13,714 18,534 Total Reciprocal Exchanges $ 14,871 $ 19,904 Total Fee Income $ 229,746 $ 235,041 |
Allowance for Expected Credit_3
Allowance for Expected Credit Losses - Premiums and Other receivables - Changes In Allowance for Expected Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle | ||
Premiums and other receivables, net | $ 1,541,760 | $ 1,428,948 |
Premium Receivable, Allowance for Credit Loss | ||
Balance, beginning of the period | 24,067 | |
Current period change for expected credit losses (1) | 25,766 | |
Write-offs of uncollectible premiums and other receivables | (23,481) | |
Balance, end of the period | 27,114 | |
Cumulative Effect, Period of Adoption, Adjustment | ||
Premium Receivable, Allowance for Credit Loss | ||
Balance, beginning of the period | $ 762 |
Allowance for Expected Credit_4
Allowance for Expected Credit Losses - Reinsurance Recoverable - Changes In Allowance for Expected Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle | ||
Reinsurance recoverable, net | $ 1,401,681 | $ 1,394,308 |
Reinsurance Recoverable, Allowance for Credit Loss | ||
Balance, beginning of the period | 0 | |
Write-offs of uncollectible reinsurance | 0 | |
Write-offs of uncollectible reinsurance | 0 | |
Balance, end of the period | 517 | |
Cumulative Effect, Period of Adoption, Adjustment | ||
Reinsurance Recoverable, Allowance for Credit Loss | ||
Balance, beginning of the period | $ 517 |
Investments - Available-for-Sal
Investments - Available-for-Sale Debt Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 4,326,194 | $ 4,376,691 |
Allowance for Credit Losses | (2,927) | 0 |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Total | 123,239 | 110,430 |
Total | (64,252) | (10,763) |
Debt Securities, Available-for-sale [Abstract] | ||
Debt securities, available-for-sale | 4,382,254 | 4,476,358 |
Fair Value | 4,382,254 | 4,476,358 |
Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | 311,197 | 319,190 |
Allowance for Credit Losses | (298) | |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Total | 7,665 | 5,479 |
Total | (4,821) | (420) |
Debt Securities, Available-for-sale [Abstract] | ||
Debt securities, available-for-sale | 313,743 | 324,249 |
Fair Value | 313,743 | 324,249 |
NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | 4,014,997 | 4,057,501 |
Allowance for Credit Losses | (2,629) | |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Total | 115,574 | 104,951 |
Total | (59,431) | (10,343) |
Debt Securities, Available-for-sale [Abstract] | ||
Fair Value | 4,068,511 | 4,152,109 |
U.S. Treasury | ||
Schedule of Available-for-sale Securities | ||
Debt Securities, Available-for-sale, Amortized Cost | 56,656 | 65,037 |
Allowance for Credit Losses | 0 | |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Debt Securities | 4,398 | 1,992 |
Debt Securities | 0 | (23) |
Debt Securities, Available-for-sale [Abstract] | ||
Debt securities, available-for-sale | 61,054 | 67,006 |
U.S. Treasury | NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | 43,695 | 52,108 |
Debt Securities, Available-for-sale [Abstract] | ||
Fair Value | 47,084 | 53,599 |
Federal agencies | ||
Schedule of Available-for-sale Securities | ||
Debt Securities, Available-for-sale, Amortized Cost | 3,907 | 3,907 |
Allowance for Credit Losses | 0 | |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Debt Securities | 14 | 8 |
Debt Securities | 0 | 0 |
Debt Securities, Available-for-sale [Abstract] | ||
Debt securities, available-for-sale | 3,921 | 3,915 |
States and political subdivision bonds | ||
Schedule of Available-for-sale Securities | ||
Debt Securities, Available-for-sale, Amortized Cost | 292,734 | 298,345 |
Allowance for Credit Losses | 0 | |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Debt Securities | 8,931 | 4,778 |
Debt Securities | (32) | (1,441) |
Debt Securities, Available-for-sale [Abstract] | ||
Debt securities, available-for-sale | 301,633 | 301,682 |
Foreign government | ||
Schedule of Available-for-sale Securities | ||
Debt Securities, Available-for-sale, Amortized Cost | 1,762 | 1,762 |
Allowance for Credit Losses | 0 | |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Debt Securities | 0 | 40 |
Debt Securities | (38) | 0 |
Debt Securities, Available-for-sale [Abstract] | ||
Debt securities, available-for-sale | 1,724 | 1,802 |
Corporate bonds | ||
Schedule of Available-for-sale Securities | ||
Debt Securities, Available-for-sale, Amortized Cost | 1,922,412 | 1,859,736 |
Allowance for Credit Losses | (2,927) | 0 |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Debt Securities | 35,738 | 59,184 |
Debt Securities | (31,790) | (2,357) |
Debt Securities, Available-for-sale [Abstract] | ||
Debt securities, available-for-sale | 1,923,433 | 1,916,563 |
Residential mortgage-backed securities | ||
Schedule of Available-for-sale Securities | ||
Debt Securities, Available-for-sale, Amortized Cost | 1,206,548 | 1,265,830 |
Allowance for Credit Losses | 0 | |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Debt Securities | 44,174 | 15,747 |
Debt Securities | (1,416) | (4,117) |
Debt Securities, Available-for-sale [Abstract] | ||
Debt securities, available-for-sale | 1,249,306 | 1,277,460 |
Commercial mortgage-backed securities | ||
Schedule of Available-for-sale Securities | ||
Debt Securities, Available-for-sale, Amortized Cost | 583,502 | 585,044 |
Allowance for Credit Losses | 0 | |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Debt Securities | 29,723 | 27,261 |
Debt Securities | (1,856) | (112) |
Debt Securities, Available-for-sale [Abstract] | ||
Debt securities, available-for-sale | 611,369 | 612,193 |
Asset-backed securities | ||
Schedule of Available-for-sale Securities | ||
Debt Securities, Available-for-sale, Amortized Cost | 48,993 | 74,465 |
Allowance for Credit Losses | 0 | |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Debt Securities | 261 | 1,194 |
Debt Securities | (1,348) | (48) |
Debt Securities, Available-for-sale [Abstract] | ||
Debt securities, available-for-sale | 47,906 | 75,611 |
Structured securities | ||
Schedule of Available-for-sale Securities | ||
Debt Securities, Available-for-sale, Amortized Cost | 209,680 | 222,565 |
Allowance for Credit Losses | 0 | |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Debt Securities | 0 | 226 |
Debt Securities | (27,772) | (2,665) |
Debt Securities, Available-for-sale [Abstract] | ||
Debt securities, available-for-sale | $ 181,908 | $ 220,126 |
Investments - Available-for-S_2
Investments - Available-for-Sale Debt Securities by Contractual Maturity (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Amortized Cost | |
Due in one year or less | $ 58,493 |
Due after one year through five years | 1,129,949 |
Due after five years through ten years | 1,063,646 |
Due after ten years | 235,063 |
Mortgage-backed securities | 1,839,043 |
Debt Securities | 4,326,194 |
Fair Value | |
Due in one year or less | 58,693 |
Due after one year through five years | 1,134,483 |
Due after five years through ten years | 1,055,870 |
Due after ten years | 224,627 |
Mortgage-backed securities | 1,908,581 |
Debt Securities | 4,382,254 |
Reciprocal Exchanges | |
Amortized Cost | |
Due in one year or less | 110 |
Due after one year through five years | 127,214 |
Due after five years through ten years | 79,997 |
Due after ten years | 15,351 |
Mortgage-backed securities | 88,525 |
Debt Securities | 311,197 |
Fair Value | |
Due in one year or less | 110 |
Due after one year through five years | 128,065 |
Due after five years through ten years | 78,303 |
Due after ten years | 15,015 |
Mortgage-backed securities | 92,250 |
Debt Securities | 313,743 |
NGHC, excluding Reciprocal Exchanges | |
Amortized Cost | |
Due in one year or less | 58,383 |
Due after one year through five years | 1,002,735 |
Due after five years through ten years | 983,649 |
Due after ten years | 219,712 |
Mortgage-backed securities | 1,750,518 |
Debt Securities | 4,014,997 |
Fair Value | |
Due in one year or less | 58,583 |
Due after one year through five years | 1,006,418 |
Due after five years through ten years | 977,567 |
Due after ten years | 209,612 |
Mortgage-backed securities | 1,816,331 |
Debt Securities | $ 4,068,511 |
Investments - Gross Unrealized
Investments - Gross Unrealized Losses (Details) $ in Thousands | Mar. 31, 2020USD ($)security | Dec. 31, 2019USD ($)security |
Schedule of Available-for-sale Securities | ||
Less Than 12 Months | $ 1,153,785 | $ 1,187,942 |
12 Months or More | 59,339 | 124,587 |
Total | 1,213,124 | 1,312,529 |
Less Than 12 Months | (51,164) | (7,993) |
12 Months or More | (13,088) | (2,770) |
Total | $ (64,252) | $ (10,763) |
Number of securities with gross unrealized loss | security | 1,663 | 1,337 |
25% of amortized cost or cost | 25.00% | 25.00% |
Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Less Than 12 Months | $ 126,514 | $ 83,698 |
12 Months or More | 3,505 | 6,906 |
Total | 130,019 | 90,604 |
Less Than 12 Months | (4,326) | (339) |
12 Months or More | (495) | (81) |
Total | (4,821) | (420) |
NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Less Than 12 Months | 1,027,271 | 1,104,244 |
12 Months or More | 55,834 | 117,681 |
Total | 1,083,105 | 1,221,925 |
Less Than 12 Months | (46,838) | (7,654) |
12 Months or More | (12,593) | (2,689) |
Total | (59,431) | (10,343) |
U.S. Treasury | ||
Schedule of Available-for-sale Securities | ||
Less Than 12 Months | 19,903 | |
12 Months or More | 500 | |
Total | 20,403 | |
Less Than 12 Months | (23) | |
12 Months or More | 0 | |
Total | (23) | |
States and political subdivision bonds | ||
Schedule of Available-for-sale Securities | ||
Less Than 12 Months | 7,204 | 106,103 |
12 Months or More | 908 | 2,580 |
Total | 8,112 | 108,683 |
Less Than 12 Months | (28) | (1,415) |
12 Months or More | (4) | (26) |
Total | (32) | (1,441) |
Foreign government | ||
Schedule of Available-for-sale Securities | ||
Less Than 12 Months | 1,724 | |
12 Months or More | 0 | |
Total | 1,724 | |
Less Than 12 Months | (38) | |
12 Months or More | 0 | |
Total | (38) | |
Corporate bonds | ||
Schedule of Available-for-sale Securities | ||
Less Than 12 Months | 891,346 | 586,817 |
12 Months or More | 0 | 5,976 |
Total | 891,346 | 592,793 |
Less Than 12 Months | (31,790) | (2,253) |
12 Months or More | 0 | (104) |
Total | (31,790) | (2,357) |
Residential mortgage-backed securities | ||
Schedule of Available-for-sale Securities | ||
Less Than 12 Months | 41,121 | 410,484 |
12 Months or More | 0 | 3,983 |
Total | 41,121 | 414,467 |
Less Than 12 Months | (1,416) | (4,074) |
12 Months or More | 0 | (43) |
Total | (1,416) | (4,117) |
Commercial mortgage-backed securities | ||
Schedule of Available-for-sale Securities | ||
Less Than 12 Months | 55,768 | 18,250 |
12 Months or More | 0 | 748 |
Total | 55,768 | 18,998 |
Less Than 12 Months | (1,856) | (105) |
12 Months or More | 0 | (7) |
Total | (1,856) | (112) |
Asset-backed securities | ||
Schedule of Available-for-sale Securities | ||
Less Than 12 Months | 32,912 | 5,406 |
12 Months or More | 233 | 920 |
Total | 33,145 | 6,326 |
Less Than 12 Months | (1,326) | (29) |
12 Months or More | (22) | (19) |
Total | (1,348) | (48) |
Structured securities | ||
Schedule of Available-for-sale Securities | ||
Less Than 12 Months | 123,710 | 40,979 |
12 Months or More | 58,198 | 109,880 |
Total | 181,908 | 150,859 |
Less Than 12 Months | (14,710) | (94) |
12 Months or More | (13,062) | (2,571) |
Total | $ (27,772) | $ (2,665) |
Investments - Allowance For Cre
Investments - Allowance For Credit Losses (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Debt Securities, Available-for-sale, Allowance for Credit Loss | |
Balance, beginning of the period | $ 0 |
Credit losses on securities not previously recorded | 2,927 |
Balance, end of the period | 2,927 |
Corporate bonds | |
Debt Securities, Available-for-sale, Allowance for Credit Loss | |
Balance, beginning of the period | 0 |
Credit losses on securities not previously recorded | 2,927 |
Balance, end of the period | $ 2,927 |
Investments - Investment Income
Investments - Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net Investment Income | ||
Investment income | $ 31,612 | $ 34,472 |
Investment expenses | (1,369) | (1,027) |
Net investment income | 30,243 | 33,445 |
Reciprocal Exchanges | ||
Net Investment Income | ||
Net investment income | 2,183 | 2,170 |
NGHC, excluding Reciprocal Exchanges | ||
Net Investment Income | ||
Net investment income | 28,060 | 31,275 |
Cash and short-term investments | ||
Net Investment Income | ||
Investment Income | 278 | 1,497 |
Debt securities | ||
Net Investment Income | ||
Investment Income | 32,102 | 29,467 |
Other, net | ||
Net Investment Income | ||
Other, net (related parties - $(2,525) and $254) | (768) | 3,508 |
Other, net | Related Parties | ||
Net Investment Income | ||
Other, net (related parties - $(2,525) and $254) | $ (2,525) | $ 254 |
Investments - Net Realized Gain
Investments - Net Realized Gains (Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Gain (Loss) on Investments | ||
Credit losses on securities not previously recorded | $ 2,927 | |
Other Net Realized Gain (Loss) on Investments | (4,198) | $ 142 |
Net realized gain (loss) on Investments | (6,861) | 22 |
Reciprocal Exchanges | ||
Gain (Loss) on Investments | ||
Net realized gain (loss) on Investments | (793) | (744) |
NGHC, excluding Reciprocal Exchanges | ||
Gain (Loss) on Investments | ||
Net realized gain (loss) on Investments | (6,068) | 766 |
Debt securities | ||
Gain (Loss) on Investments | ||
Debt securities, available-for-sale, gross gains | 273 | 136 |
Debt securities, available-for-sale, gross losses | (9) | (256) |
Credit losses on securities not previously recorded | 2,927 | 0 |
Net realized loss on debt securities, available-for-sale | $ (2,663) | $ (120) |
Investments - Credit Quality of
Investments - Credit Quality of Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 4,326,194 | $ 4,376,691 |
Fair Value | 4,382,254 | 4,476,358 |
NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | 4,014,997 | 4,057,501 |
Fair Value | 4,068,511 | 4,152,109 |
Debt securities | NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | 4,014,997 | 4,057,501 |
Fair Value | $ 4,068,511 | $ 4,152,109 |
Percentage | 100.00% | 100.00% |
Debt securities | Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 311,197 | $ 319,190 |
Fair Value | $ 313,743 | $ 324,249 |
Percentage | 100.00% | 100.00% |
U.S. Treasury | NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 43,695 | $ 52,108 |
Fair Value | $ 47,084 | $ 53,599 |
Percentage | 1.20% | 1.30% |
U.S. Treasury | Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 12,961 | $ 12,929 |
Fair Value | $ 13,970 | $ 13,407 |
Percentage | 4.50% | 4.10% |
Debt Securities, Excluding US Treasury Securities | Standard & Poor's, AAA Rating | NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 528,158 | $ 515,869 |
Fair Value | $ 543,778 | $ 537,508 |
Percentage | 13.40% | 12.90% |
Debt Securities, Excluding US Treasury Securities | Standard & Poor's, AAA Rating | Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 20,845 | $ 20,947 |
Fair Value | $ 21,169 | $ 21,555 |
Percentage | 6.70% | 6.60% |
Debt Securities, Excluding US Treasury Securities | Standard & Poor's, AA, AA Plus, and AA Minus Rating | NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 1,618,321 | $ 1,677,787 |
Fair Value | $ 1,675,017 | $ 1,697,220 |
Percentage | 41.20% | 40.90% |
Debt Securities, Excluding US Treasury Securities | Standard & Poor's, AA, AA Plus, and AA Minus Rating | Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 115,089 | $ 120,113 |
Fair Value | $ 118,870 | $ 121,720 |
Percentage | 37.90% | 37.50% |
Debt Securities, Excluding US Treasury Securities | Standard & Poor's, A, A Plus, and A Minus Rating | NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 966,417 | $ 954,312 |
Fair Value | $ 960,982 | $ 976,468 |
Percentage | 23.60% | 23.50% |
Debt Securities, Excluding US Treasury Securities | Standard & Poor's, A, A Plus, and A Minus Rating | Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 108,416 | $ 116,747 |
Fair Value | $ 108,375 | $ 119,041 |
Percentage | 34.50% | 36.70% |
Debt Securities, Excluding US Treasury Securities | Standard & Poor's, BBB, BBB Plus, and BBB Minus Rating | NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 830,937 | $ 795,594 |
Fair Value | $ 817,798 | $ 823,239 |
Percentage | 20.10% | 19.80% |
Debt Securities, Excluding US Treasury Securities | Standard & Poor's, BBB, BBB Plus, and BBB Minus Rating | Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 52,986 | $ 48,021 |
Fair Value | $ 50,862 | $ 48,093 |
Percentage | 16.20% | 14.80% |
Debt Securities, Excluding US Treasury Securities | Standard & Poor's, BB Plus and Lower Rating | NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 27,469 | $ 61,831 |
Fair Value | $ 23,852 | $ 64,075 |
Percentage | 0.50% | 1.60% |
Debt Securities, Excluding US Treasury Securities | Standard & Poor's, BB Plus and Lower Rating | Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 900 | $ 433 |
Fair Value | $ 497 | $ 433 |
Percentage | 0.20% | 0.30% |
Investments - Investment Qualit
Investments - Investment Quality of Corporate Bonds (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Schedule of Available-for-sale Securities | ||
Fair Value | $ 4,382,254 | $ 4,476,358 |
NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Fair Value | 4,068,511 | 4,152,109 |
Corporate Debt Securities | ||
Schedule of Available-for-sale Securities | ||
Fair Value | $ 1,923,433 | $ 1,916,563 |
% of Corporate Bonds Portfolio | 100.00% | 100.00% |
Corporate Debt Securities | Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Fair Value | $ 188,443 | $ 195,601 |
% of Corporate Bonds Portfolio | 9.80% | 10.20% |
Corporate Debt Securities | NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Fair Value | $ 1,734,990 | $ 1,720,962 |
% of Corporate Bonds Portfolio | 90.20% | 89.80% |
Corporate Debt Securities | Standard & Poor's, AAA Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 0.70% | 0.70% |
Corporate Debt Securities | Standard & Poor's, AAA Rating | Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 0.40% | 0.40% |
Corporate Debt Securities | Standard & Poor's, AAA Rating | NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 0.30% | 0.30% |
Corporate Debt Securities | Standard & Poor's, AA, AA Plus, and AA Minus Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 6.10% | 6.30% |
Corporate Debt Securities | Standard & Poor's, AA, AA Plus, and AA Minus Rating | Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 1.20% | 1.20% |
Corporate Debt Securities | Standard & Poor's, AA, AA Plus, and AA Minus Rating | NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 4.90% | 5.10% |
Corporate Debt Securities | Standard & Poor's, A, A Plus, and A Minus Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 49.50% | 50.10% |
Corporate Debt Securities | Standard & Poor's, A, A Plus, and A Minus Rating | Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 5.60% | 6.10% |
Corporate Debt Securities | Standard & Poor's, A, A Plus, and A Minus Rating | NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 43.90% | 44.00% |
Corporate Debt Securities | Standard & Poor's, BBB, BBB Plus, and BBB Minus Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 43.10% | 42.50% |
Corporate Debt Securities | Standard & Poor's, BBB, BBB Plus, and BBB Minus Rating | Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 2.60% | 2.50% |
Corporate Debt Securities | Standard & Poor's, BBB, BBB Plus, and BBB Minus Rating | NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 40.50% | 40.00% |
Corporate Debt Securities | Standard & Poor's, BB Plus and Lower Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 0.60% | 0.40% |
Corporate Debt Securities | Standard & Poor's, BB Plus and Lower Rating | Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 0.00% | 0.00% |
Corporate Debt Securities | Standard & Poor's, BB Plus and Lower Rating | NGHC, excluding Reciprocal Exchanges | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 0.60% | 0.40% |
Corporate Debt Securities | Financial Institutions | ||
Schedule of Available-for-sale Securities | ||
Fair Value | $ 813,631 | $ 785,910 |
% of Corporate Bonds Portfolio | 42.30% | 41.00% |
Corporate Debt Securities | Financial Institutions | Standard & Poor's, AAA Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 0.00% | 0.00% |
Corporate Debt Securities | Financial Institutions | Standard & Poor's, AA, AA Plus, and AA Minus Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 3.50% | 3.60% |
Corporate Debt Securities | Financial Institutions | Standard & Poor's, A, A Plus, and A Minus Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 26.00% | 25.00% |
Corporate Debt Securities | Financial Institutions | Standard & Poor's, BBB, BBB Plus, and BBB Minus Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 12.50% | 12.10% |
Corporate Debt Securities | Financial Institutions | Standard & Poor's, BB Plus and Lower Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 0.30% | 0.30% |
Corporate Debt Securities | Industrials | ||
Schedule of Available-for-sale Securities | ||
Fair Value | $ 1,065,463 | $ 1,083,959 |
% of Corporate Bonds Portfolio | 55.40% | 56.60% |
Corporate Debt Securities | Industrials | Standard & Poor's, AAA Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 0.70% | 0.70% |
Corporate Debt Securities | Industrials | Standard & Poor's, AA, AA Plus, and AA Minus Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 2.60% | 2.70% |
Corporate Debt Securities | Industrials | Standard & Poor's, A, A Plus, and A Minus Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 22.50% | 24.10% |
Corporate Debt Securities | Industrials | Standard & Poor's, BBB, BBB Plus, and BBB Minus Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 29.30% | 29.00% |
Corporate Debt Securities | Industrials | Standard & Poor's, BB Plus and Lower Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 0.30% | 0.10% |
Corporate Debt Securities | Utilities And Other | ||
Schedule of Available-for-sale Securities | ||
Fair Value | $ 44,339 | $ 46,694 |
% of Corporate Bonds Portfolio | 2.30% | 2.40% |
Corporate Debt Securities | Utilities And Other | Standard & Poor's, AAA Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 0.00% | 0.00% |
Corporate Debt Securities | Utilities And Other | Standard & Poor's, AA, AA Plus, and AA Minus Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 0.00% | 0.00% |
Corporate Debt Securities | Utilities And Other | Standard & Poor's, A, A Plus, and A Minus Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 1.00% | 1.00% |
Corporate Debt Securities | Utilities And Other | Standard & Poor's, BBB, BBB Plus, and BBB Minus Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 1.30% | 1.40% |
Corporate Debt Securities | Utilities And Other | Standard & Poor's, BB Plus and Lower Rating | ||
Schedule of Available-for-sale Securities | ||
Investment quality - corporate bond holdings and industry concentrations | 0.00% | 0.00% |
Investments - Cash and Cash Equ
Investments - Cash and Cash Equivalents, Restricted Cash and Restricted Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Investments, Debt and Equity Securities [Abstract] | ||||
Cash and cash equivalents | $ 309,802 | $ 135,942 | ||
Restricted cash and cash equivalents | 30,070 | 28,521 | ||
Total cash, cash equivalents and restricted cash | 339,872 | 164,463 | $ 220,272 | $ 233,583 |
Securities on deposit with state regulatory authorities | 81,809 | 74,061 | ||
Restricted investments to trusts in certain reinsurance transactions | 42,369 | 49,502 | ||
Total restricted investments | $ 124,178 | $ 123,563 |
Investments - Short-term and Ot
Investments - Short-term and Other Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Summary of Investment Holdings | ||
Other investments | $ 287,683 | $ 311,287 |
Related Parties | ||
Summary of Investment Holdings | ||
Other investments | 235,843 | 238,841 |
Equity method investments | ||
Summary of Investment Holdings | ||
Other investments | 140,897 | 143,511 |
Equity method investments | Related Parties | ||
Summary of Investment Holdings | ||
Other investments | 105,839 | 109,612 |
Notes receivable | ||
Summary of Investment Holdings | ||
Other investments | 130,067 | 129,299 |
Notes receivable | Related Parties | ||
Summary of Investment Holdings | ||
Other investments | 130,004 | 129,229 |
Long-term Certificates of Deposit (CDs), at cost | ||
Summary of Investment Holdings | ||
Other investments | 150 | 20,150 |
Investments, at fair value | ||
Summary of Investment Holdings | ||
Other investments | 7,661 | 9,365 |
Investments, at cost or amortized cost | ||
Summary of Investment Holdings | ||
Other investments | $ 8,908 | $ 8,962 |
Investments - Related Parties -
Investments - Related Parties - LSC Entity (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)contract | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Other, net | |||
Schedule of Equity Method Investments | |||
Other, net (related parties - $(2,525) and $254) | $ (768) | $ 3,508 | |
Related Parties | Other, net | |||
Schedule of Equity Method Investments | |||
Other, net (related parties - $(2,525) and $254) | $ (2,525) | 254 | |
LSC Entities | AmTrust Financial Services, Inc. | |||
Schedule of Equity Method Investments | |||
Ownership percentage | 50.00% | ||
LSC Entities | VIE, Not primary beneficiary | Related Parties | |||
Schedule of Equity Method Investments | |||
Ownership percentage | 50.00% | ||
Life Settlement Contracts, Investment Method, Number of Contracts | contract | 1 | ||
Equity investment in unconsolidated subsidiaries | $ 45,291 | $ 49,477 | |
Equity in earnings (losses) | $ (4,186) | $ 586 | |
LSC Entities investment in LP | |||
Schedule of Equity Method Investments | |||
Ownership percentage | 30.00% |
Investments - Related Parties_2
Investments - Related Parties - 800 Superior, LLC (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Related Parties | 800 Superior, LLC | |||
Schedule of Equity Method Investments | |||
Rent expense | $ 761 | $ 742 | |
800 Superior, LLC | AmTrust Financial Services, Inc. | |||
Schedule of Equity Method Investments | |||
Ownership percentage | 50.00% | ||
800 Superior, LLC | VIE, Not primary beneficiary | Related Parties | |||
Schedule of Equity Method Investments | |||
Ownership percentage | 50.00% | ||
Equity investment in unconsolidated subsidiaries | $ 9,487 | $ 9,365 | |
Equity in earnings (losses) | $ 122 | $ (293) |
Investments - Related Parties_3
Investments - Related Parties - North Dearborn (Details) - North Dearborn Building Company, L.P. - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
AmTrust Financial Services, Inc. | |||
Schedule of Equity Method Investments | |||
Limited Partnership, Percentage Participation | 45.00% | ||
NA Advisors GP LLC | |||
Schedule of Equity Method Investments | |||
Limited Partnership, Percentage Participation | 10.00% | ||
Limited Partnership, Percentage of Profit Interest | 10.00% | ||
VIE, Not primary beneficiary | Related Parties | |||
Schedule of Equity Method Investments | |||
Ownership percentage | 45.00% | ||
Equity investment in unconsolidated subsidiaries | $ 5,702 | $ 5,317 | |
Equity in earnings (losses) | 430 | $ (28) | |
Distributions | $ 45 | $ 0 |
Investments - Related Parties_4
Investments - Related Parties - 4455 LBJ Freeway, LLC (Details) - 4455 LBJ Freeway, LLC - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
AmTrust Financial Services, Inc. | |||
Schedule of Equity Method Investments | |||
Limited Partnership, Percentage Participation | 50.00% | ||
Related Parties | |||
Schedule of Equity Method Investments | |||
Equity investment in unconsolidated subsidiaries | $ 1,234 | $ 1,074 | |
Related Parties | 4455 LBJ Freeway, LLC | |||
Schedule of Equity Method Investments | |||
Rent expense | $ 613 | $ 555 | |
VIE, Not primary beneficiary | Related Parties | |||
Schedule of Equity Method Investments | |||
Ownership percentage | 50.00% | ||
Equity in earnings (losses) | $ 160 | $ 23 |
Investments - Related Parties_5
Investments - Related Parties - Illinois Center Building, L.P. (Details) - Illinois Center Building, L.P. - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
ACP Re Group, Inc. | |||
Schedule of Equity Method Investments | |||
Limited Partnership, Percentage Participation | 37.50% | ||
ACP Re | |||
Schedule of Equity Method Investments | |||
Limited Partnership, Percentage Participation | 15.00% | ||
NA Advisors GP LLC | |||
Schedule of Equity Method Investments | |||
Limited Partnership, Percentage Participation | 10.00% | ||
Limited Partnership, Percentage of Profit Interest | 10.00% | ||
VIE, Not primary beneficiary | Related Parties | |||
Schedule of Equity Method Investments | |||
Ownership percentage | 37.50% | ||
Equity investment in unconsolidated subsidiaries | $ 44,125 | $ 44,379 | |
Equity in earnings (losses) | $ (254) | $ (1,222) |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | $ 4,382,254 | $ 4,476,358 |
Short-term investments | 70,761 | 67,353 |
Other investments | 287,683 | 311,287 |
Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 4,382,254 | 4,476,358 |
Total | 4,460,676 | 4,553,076 |
Recurring | Reciprocal Exchanges | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Total | 333,521 | 329,494 |
Recurring | NGHC, excluding Reciprocal Exchanges | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Total | 4,127,155 | 4,223,582 |
Level 1 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 64,975 | 70,921 |
Total | 119,066 | 135,755 |
Level 1 | Recurring | Reciprocal Exchanges | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Total | 34,249 | 19,153 |
Level 1 | Recurring | NGHC, excluding Reciprocal Exchanges | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Total | 84,817 | 116,602 |
Level 2 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 4,305,697 | 4,394,009 |
Total | 4,326,196 | 4,401,409 |
Level 2 | Recurring | Reciprocal Exchanges | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Total | 299,272 | 310,341 |
Level 2 | Recurring | NGHC, excluding Reciprocal Exchanges | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Total | 4,026,924 | 4,091,068 |
Level 3 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 11,582 | 11,428 |
Total | 15,414 | 15,912 |
Level 3 | Recurring | Reciprocal Exchanges | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Total | 0 | 0 |
Level 3 | Recurring | NGHC, excluding Reciprocal Exchanges | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Total | 15,414 | 15,912 |
U.S. Treasury | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 61,054 | 67,006 |
U.S. Treasury | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 61,054 | 67,006 |
U.S. Treasury | Level 1 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 61,054 | 67,006 |
U.S. Treasury | Level 2 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
U.S. Treasury | Level 3 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
Federal agencies | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 3,921 | 3,915 |
Federal agencies | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 3,921 | 3,915 |
Federal agencies | Level 1 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 3,921 | 3,915 |
Federal agencies | Level 2 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
Federal agencies | Level 3 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
States and political subdivision bonds | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 301,633 | 301,682 |
States and political subdivision bonds | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 301,633 | 301,682 |
States and political subdivision bonds | Level 1 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
States and political subdivision bonds | Level 2 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 298,533 | 298,582 |
States and political subdivision bonds | Level 3 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 3,100 | 3,100 |
Foreign government | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 1,724 | 1,802 |
Foreign government | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 1,724 | 1,802 |
Foreign government | Level 1 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
Foreign government | Level 2 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 1,724 | 1,802 |
Foreign government | Level 3 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
Corporate bonds | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 1,923,433 | 1,916,563 |
Corporate bonds | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 1,923,433 | 1,916,563 |
Corporate bonds | Level 1 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
Corporate bonds | Level 2 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 1,914,951 | 1,908,235 |
Corporate bonds | Level 3 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 8,482 | 8,328 |
Residential mortgage-backed securities | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 1,249,306 | 1,277,460 |
Residential mortgage-backed securities | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 1,249,306 | 1,277,460 |
Residential mortgage-backed securities | Level 1 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
Residential mortgage-backed securities | Level 2 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 1,249,306 | 1,277,460 |
Residential mortgage-backed securities | Level 3 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
Commercial mortgage-backed securities | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 611,369 | 612,193 |
Commercial mortgage-backed securities | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 611,369 | 612,193 |
Commercial mortgage-backed securities | Level 1 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
Commercial mortgage-backed securities | Level 2 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 611,369 | 612,193 |
Commercial mortgage-backed securities | Level 3 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
Asset-backed securities | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 47,906 | 75,611 |
Asset-backed securities | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 47,906 | 75,611 |
Asset-backed securities | Level 1 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
Asset-backed securities | Level 2 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 47,906 | 75,611 |
Asset-backed securities | Level 3 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
Structured securities | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 181,908 | 220,126 |
Structured securities | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 181,908 | 220,126 |
Structured securities | Level 1 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
Structured securities | Level 2 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 181,908 | 220,126 |
Structured securities | Level 3 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale | 0 | 0 |
Short-term investments | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 70,761 | 67,353 |
Short-term investments | Level 1 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 50,262 | 59,953 |
Short-term investments | Level 2 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 20,499 | 7,400 |
Short-term investments | Level 3 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 0 | 0 |
Other investments | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Other investments | 7,661 | 9,365 |
Other investments | Level 1 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Other investments | 3,829 | 4,881 |
Other investments | Level 2 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Other investments | 0 | 0 |
Other investments | Level 3 | Recurring | ||
Fair Value Assets Measured on Recurring and Nonrecurring Basis | ||
Other investments | $ 3,832 | $ 4,484 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Changes in Fair Value of Level 3 Financial Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Balance as of | $ 15,912 | $ 22,956 |
Total gains (losses) included in net income | (375) | (405) |
Total gains (losses) included in other comprehensive income | 154 | 131 |
Sales | (277) | |
Balance as of | 15,414 | 22,682 |
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period | (375) | (405) |
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period | 154 | |
States and political subdivision bonds | ||
Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Balance as of | 3,100 | 3,596 |
Total gains (losses) included in net income | 0 | 0 |
Total gains (losses) included in other comprehensive income | 0 | 64 |
Sales | 0 | |
Balance as of | 3,100 | 3,660 |
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period | 0 | 0 |
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period | 0 | |
Corporate bonds | ||
Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Balance as of | 8,328 | 11,767 |
Total gains (losses) included in net income | 0 | 0 |
Total gains (losses) included in other comprehensive income | 154 | 67 |
Sales | 0 | |
Balance as of | 8,482 | 11,834 |
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period | 0 | 0 |
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period | 154 | |
Other investments | ||
Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Balance as of | 4,484 | 7,593 |
Total gains (losses) included in net income | (375) | (405) |
Total gains (losses) included in other comprehensive income | 0 | 0 |
Sales | (277) | |
Balance as of | 3,832 | 7,188 |
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period | (375) | $ (405) |
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period | $ 0 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | $ 685,078 | $ 686,006 |
Senior Notes | 7.625% Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 96,950 | 96,928 |
Senior Notes | 7.625% Notes | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value estimates of debt | 83,880 | 103,560 |
Senior Notes | 6.75% Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 347,252 | 347,091 |
Senior Notes | 6.75% Notes | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value estimates of debt | 361,628 | 371,366 |
Surplus Notes | Subordinated Debentures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 72,168 | 72,168 |
Surplus Notes | Subordinated Debentures | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value estimates of debt | 72,118 | 72,103 |
Line of Credit | 2019 Credit Agreement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 140,000 | 140,000 |
Line of Credit | 2019 Credit Agreement | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value estimates of debt | $ 141,227 | $ 148,272 |
Deferred Acquisition Costs (Det
Deferred Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Movement Analysis of Deferred Policy Acquisition Costs | ||
Balance, beginning of the period | $ 263,523 | $ 251,408 |
Additions | 162,220 | 171,080 |
Amortization | (148,375) | (154,311) |
Change in DAC | 13,845 | 16,769 |
Balance, end of the period | 277,368 | 268,177 |
Reciprocal Exchanges | ||
Movement Analysis of Deferred Policy Acquisition Costs | ||
Balance, end of the period | 22,737 | 20,305 |
NGHC, excluding Reciprocal Exchanges | ||
Movement Analysis of Deferred Policy Acquisition Costs | ||
Balance, end of the period | 254,631 | 247,872 |
Property and Casualty | ||
Movement Analysis of Deferred Policy Acquisition Costs | ||
Balance, beginning of the period | 239,293 | 226,188 |
Additions | 154,789 | 145,979 |
Amortization | (141,054) | (136,008) |
Change in DAC | 13,735 | 9,971 |
Balance, end of the period | 253,028 | 236,159 |
Property and Casualty | Reciprocal Exchanges | ||
Movement Analysis of Deferred Policy Acquisition Costs | ||
Balance, end of the period | 22,737 | 20,305 |
Property and Casualty | NGHC, excluding Reciprocal Exchanges | ||
Movement Analysis of Deferred Policy Acquisition Costs | ||
Balance, end of the period | 230,291 | 215,854 |
Accident and Health | ||
Movement Analysis of Deferred Policy Acquisition Costs | ||
Balance, beginning of the period | 24,230 | 25,220 |
Additions | 7,431 | 25,101 |
Amortization | (7,321) | (18,303) |
Change in DAC | 110 | 6,798 |
Balance, end of the period | 24,340 | 32,018 |
Accident and Health | Reciprocal Exchanges | ||
Movement Analysis of Deferred Policy Acquisition Costs | ||
Balance, end of the period | 0 | 0 |
Accident and Health | NGHC, excluding Reciprocal Exchanges | ||
Movement Analysis of Deferred Policy Acquisition Costs | ||
Balance, end of the period | $ 24,340 | $ 32,018 |
Unpaid Losses and Loss Adjust_3
Unpaid Losses and Loss Adjustment Expense Reserves (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Liability for Claims and Claims Adjustment Expense | ||
Gross balance at beginning of the period | $ 2,886,414 | $ 2,957,159 |
Less: Reinsurance recoverable at beginning of the period | 1,111,808 | 1,285,142 |
Net balance at beginning of the period | 1,774,606 | 1,672,017 |
Current year | 691,406 | 666,123 |
Prior year | 592 | (14,314) |
Total incurred | 691,998 | 651,809 |
Current year | (248,268) | (179,025) |
Prior year | (471,387) | (497,348) |
Total paid | (719,655) | (676,373) |
Effect of foreign exchange rates | 1,094 | |
Net balance at end of the period | 1,746,949 | 1,648,547 |
Plus: Reinsurance recoverable at end of the period | 1,101,244 | 1,221,776 |
Gross balance at end of the period | 2,848,193 | 2,870,323 |
Reciprocal Exchanges | ||
Liability for Claims and Claims Adjustment Expense | ||
Gross balance at beginning of the period | 205,786 | |
Gross balance at end of the period | 197,934 | |
NGHC, excluding Reciprocal Exchanges | ||
Liability for Claims and Claims Adjustment Expense | ||
Gross balance at beginning of the period | 2,680,628 | 2,778,689 |
Less: Reinsurance recoverable at beginning of the period | 1,027,634 | 1,207,163 |
Net balance at beginning of the period | 1,652,994 | 1,571,526 |
Current year | 649,968 | 626,150 |
Prior year | (337) | (16,366) |
Total incurred | 649,631 | 609,784 |
Current year | (230,099) | (164,076) |
Prior year | (441,938) | (475,870) |
Total paid | (672,037) | (639,946) |
Effect of foreign exchange rates | 1,094 | |
Net balance at end of the period | 1,630,588 | 1,542,458 |
Plus: Reinsurance recoverable at end of the period | 1,019,671 | 1,131,843 |
Gross balance at end of the period | 2,650,259 | 2,674,301 |
Property and Casualty | ||
Liability for Claims and Claims Adjustment Expense | ||
Prior year | 5,400 | (3,462) |
Property and Casualty | Reciprocal Exchanges | ||
Liability for Claims and Claims Adjustment Expense | ||
Gross balance at beginning of the period | 205,786 | 178,470 |
Less: Reinsurance recoverable at beginning of the period | 84,174 | 77,979 |
Net balance at beginning of the period | 121,612 | 100,491 |
Current year | 41,438 | 39,973 |
Prior year | 929 | 2,052 |
Total incurred | 42,367 | 42,025 |
Current year | (18,169) | (14,949) |
Prior year | (29,449) | (21,478) |
Total paid | (47,618) | (36,427) |
Effect of foreign exchange rates | 0 | |
Net balance at end of the period | 116,361 | 106,089 |
Plus: Reinsurance recoverable at end of the period | 81,573 | 89,933 |
Gross balance at end of the period | 197,934 | 196,022 |
Property and Casualty | NGHC, excluding Reciprocal Exchanges | ||
Liability for Claims and Claims Adjustment Expense | ||
Gross balance at beginning of the period | 2,528,754 | 2,507,409 |
Less: Reinsurance recoverable at beginning of the period | 1,016,368 | 1,182,588 |
Net balance at beginning of the period | 1,512,386 | 1,324,821 |
Current year | 563,559 | 530,549 |
Prior year | 4,471 | (5,514) |
Total incurred | 568,030 | 525,035 |
Current year | (204,279) | (130,395) |
Prior year | (397,862) | (422,560) |
Total paid | (602,141) | (552,955) |
Effect of foreign exchange rates | 0 | |
Net balance at end of the period | 1,478,275 | 1,296,901 |
Plus: Reinsurance recoverable at end of the period | 1,004,759 | 1,103,114 |
Gross balance at end of the period | 2,483,034 | 2,400,015 |
Accident and Health | NGHC, excluding Reciprocal Exchanges | ||
Liability for Claims and Claims Adjustment Expense | ||
Gross balance at beginning of the period | 151,874 | 271,280 |
Less: Reinsurance recoverable at beginning of the period | 11,266 | 24,575 |
Net balance at beginning of the period | 140,608 | 246,705 |
Current year | 86,409 | 95,601 |
Prior year | (4,808) | (10,852) |
Total incurred | 81,601 | 84,749 |
Current year | (25,820) | (33,681) |
Prior year | (44,076) | (53,310) |
Total paid | (69,896) | (86,991) |
Effect of foreign exchange rates | 1,094 | |
Net balance at end of the period | 152,313 | 245,557 |
Plus: Reinsurance recoverable at end of the period | 14,912 | 28,729 |
Gross balance at end of the period | $ 167,225 | $ 274,286 |
Reinsurance - Effects of Reinsu
Reinsurance - Effects of Reinsurance (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Reinsurance Recoverables | |||
Reinsurance recoverable on paid losses | $ 300,954 | $ 282,500 | |
Reinsurance recoverable on unpaid losses | 1,101,244 | 1,111,808 | |
Reinsurance recoverable, allowance for expected credit losses | 517 | 0 | |
Reinsurance recoverable, net | 1,401,681 | 1,394,308 | |
Reinsurance Liabilities | |||
Unpaid Loss and LAE reserves, assumed | 46,868 | 50,884 | |
Unearned premiums, assumed | 17,193 | 15,278 | |
Prepaid reinsurance premiums | 511,648 | $ 575,747 | |
Premiums: | |||
Direct, Written | 1,458,533 | $ 1,489,188 | |
Assumed, Written | 18,021 | 20,590 | |
Gross premium written | 1,476,554 | 1,509,778 | |
Ceded premiums | (266,951) | (345,114) | |
Net premium written | 1,209,603 | 1,164,664 | |
Direct, Earned | 1,390,150 | 1,315,705 | |
Assumed, Earned | 16,106 | 21,000 | |
Premiums Earned, Gross | 1,406,256 | 1,336,705 | |
Ceded, Earned | (331,050) | (372,548) | |
Net earned premium | 1,075,206 | 964,157 | |
Loss and LAE expense: | |||
Assumed Loss and LAE | 6,635 | 5,322 | |
Ceded Loss and LAE | $ 196,486 | $ 209,322 |
Reinsurance - Narrative (Detail
Reinsurance - Narrative (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Jul. 01, 2019 | May 01, 2019 | Jan. 01, 2019 | Jul. 01, 2018 | Jun. 30, 2020 |
Personal Auto | ||||||
Reinsurance Retention Policy | ||||||
Reinsurance - Percentage of Business Ceded | 5.00% | 10.00% | 7.00% | |||
Reinsurance percentage of ceding commission | 31.20% | |||||
Homeowners | ||||||
Reinsurance Retention Policy | ||||||
Reinsurance - Percentage of Business Ceded | 40.00% | |||||
Reinsurance percentage of ceding commission | 36.00% | |||||
Property Catastrophe Program | ||||||
Reinsurance Retention Policy | ||||||
Amount of coverage in excess of retention | $ 650,000 | |||||
Casualty Program | ||||||
Reinsurance Retention Policy | ||||||
Amount of coverage in excess of retention | $ 35,000 | |||||
Retention amount | $ 5,000 | |||||
Minimum | Personal Auto | ||||||
Reinsurance Retention Policy | ||||||
Reinsurance percentage of ceding commission | 30.00% | |||||
Loss Ratio | 64.70% | |||||
Maximum | Personal Auto | ||||||
Reinsurance Retention Policy | ||||||
Reinsurance percentage of ceding commission | 32.80% | |||||
Loss Ratio | 67.50% | |||||
Weighted Average | Homeowners | ||||||
Reinsurance Retention Policy | ||||||
Reinsurance percentage of ceding commission | 37.50% | |||||
Reciprocal Exchanges | Homeowners | ||||||
Reinsurance Retention Policy | ||||||
Reinsurance - Percentage of Business Ceded | 28.50% | |||||
Reciprocal Exchanges | Property Catastrophe Program | ||||||
Reinsurance Retention Policy | ||||||
Amount of coverage in excess of retention | $ 480,000 | |||||
Retention amount | $ 20,000 | |||||
Subsequent Event | Minimum | Personal Auto | ||||||
Reinsurance Retention Policy | ||||||
Reinsurance percentage of ceding commission | 5.00% | |||||
Subsequent Event | Maximum | Personal Auto | ||||||
Reinsurance Retention Policy | ||||||
Reinsurance percentage of ceding commission | 30.00% | |||||
First Event | Property Catastrophe Program | ||||||
Reinsurance Retention Policy | ||||||
Retention amount | 70,000 | |||||
Second Event | Property Catastrophe Program | ||||||
Reinsurance Retention Policy | ||||||
Retention amount | $ 50,000 |
Debt - Debt Instruments (Detail
Debt - Debt Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument | ||
Notes Payable | $ 685,078 | $ 686,006 |
Finance lease liabilities | 20,946 | 20,477 |
Unamortized debt issuance costs and unamortized discount | $ (5,798) | (5,981) |
Senior Notes | 6.75% Notes | ||
Debt Instrument | ||
Interest rate on debt | 6.75% | |
Notes Payable | $ 350,000 | 350,000 |
Senior Notes | 7.625% Notes | ||
Debt Instrument | ||
Interest rate on debt | 7.625% | |
Notes Payable | $ 100,000 | 100,000 |
Surplus Notes | Subordinated Debentures Tranche I | ||
Debt Instrument | ||
Basis Spread on Variable Rate | 3.40% | |
Notes Payable | $ 41,238 | $ 41,238 |
Interest rate on subordinated debentures | 4.14% | 5.29% |
Surplus Notes | Subordinated Debentures Tranche I | LIBOR | ||
Debt Instrument | ||
LIBOR | LIBOR | |
Surplus Notes | Subordinated Debentures Tranche II | ||
Debt Instrument | ||
Basis Spread on Variable Rate | 4.25% | |
Notes Payable | $ 30,930 | $ 30,930 |
Interest rate on subordinated debentures | 4.99% | 6.14% |
Surplus Notes | Subordinated Debentures Tranche II | LIBOR | ||
Debt Instrument | ||
LIBOR | LIBOR | |
Other | Other | ||
Debt Instrument | ||
Interest rate on debt | 3.50% | |
Notes Payable | $ 7,762 | $ 9,342 |
2019 Credit Agreement | ||
Debt Instrument | ||
Notes Payable | $ 140,000 | $ 140,000 |
JPMorgan Chase, N.A. | 2019 Credit Agreement | ||
Debt Instrument | ||
Basis Spread on Variable Rate | 1.75% | |
Interest rate on Credit Agreement | 2.75% | 3.59% |
JPMorgan Chase, N.A. | 2019 Credit Agreement | LIBOR | ||
Debt Instrument | ||
LIBOR | LIBOR | |
Basis Spread on Variable Rate | 1.00% |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Debt Instrument | ||
Interest Expense, Debt | $ 11,780 | $ 12,999 |
Finance lease liabilities | ||
Debt Instrument | ||
Interest Expense, Debt | 371 | 294 |
Other | ||
Debt Instrument | ||
Interest Expense, Debt | 1,385 | 1,990 |
Senior Notes | 6.75% Notes | ||
Debt Instrument | ||
Interest Expense, Debt | 5,906 | 5,906 |
Senior Notes | 7.625% Notes | ||
Debt Instrument | ||
Interest Expense, Debt | 1,906 | 1,906 |
Surplus Notes | Subordinated Debentures | ||
Debt Instrument | ||
Interest Expense, Debt | 997 | 1,163 |
Credit Agreement | JPMorgan Chase, N.A. | ||
Debt Instrument | ||
Interest Expense, Debt | 0 | 1,211 |
2019 Credit Agreement | JPMorgan Chase, N.A. | ||
Debt Instrument | ||
Interest Expense, Debt | $ 1,215 | $ 529 |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - Senior Notes | Mar. 31, 2020 |
6.75% Notes | |
Debt Instrument | |
Interest rate on debt | 6.75% |
7.625% Notes | |
Debt Instrument | |
Interest rate on debt | 7.625% |
Debt - Subordinated Debentures
Debt - Subordinated Debentures (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument | ||
Notes Payable | $ 685,078 | $ 686,006 |
Surplus Notes | Subordinated Debentures | ||
Debt Instrument | ||
Debt Instrument, Redemption Price, Percentage | 100.00% | |
Surplus Notes | Subordinated Debentures Tranche I | ||
Debt Instrument | ||
Notes Payable | $ 41,238 | 41,238 |
Basis Spread on Variable Rate | 3.40% | |
Surplus Notes | Subordinated Debentures Tranche II | ||
Debt Instrument | ||
Notes Payable | $ 30,930 | $ 30,930 |
Basis Spread on Variable Rate | 4.25% | |
LIBOR | Surplus Notes | Subordinated Debentures Tranche I | ||
Debt Instrument | ||
LIBOR | LIBOR | |
LIBOR | Surplus Notes | Subordinated Debentures Tranche II | ||
Debt Instrument | ||
LIBOR | LIBOR |
Debt - Credit Agreement (Detail
Debt - Credit Agreement (Details) - 2019 Credit Agreement - JPMorgan Chase, N.A. $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Debt Instrument | |
Line of Credit Facility, Maximum Amount Outstanding During Period | $ 340,000 |
Basis Spread on Variable Rate | 1.75% |
Letter Of Credit Fronting Fee | 0.125% |
Line of Credit Facility, Leverage Ratio | 0.225% |
LIBOR | |
Debt Instrument | |
Federal funds | LIBOR |
Basis Spread on Variable Rate | 1.00% |
Federal Funds Purchased | |
Debt Instrument | |
Federal funds | federal funds |
Alternate Base Rate Or LIBOR | |
Debt Instrument | |
Basis Spread on Variable Rate | 0.50% |
Minimum | |
Debt Instrument | |
Line of Credit Facility, Current Borrowing Capacity | $ 150,000 |
Line of Credit Facility, Commitment Fee Percentage | 0.175% |
Maximum | |
Debt Instrument | |
Line of Credit Facility, Current Borrowing Capacity | $ 50,000 |
Line of Credit Facility, Commitment Fee Percentage | 0.25% |
Debt - Debt Maturities (Details
Debt - Debt Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument | ||
2020 (remaining nine months) | $ 10,199 | |
2021 | 8,607 | |
2022 | 3,439 | |
2023 | 142,144 | |
2024 | 351,360 | |
2025 | 735 | |
Thereafter | 174,392 | |
Total principal amount of debt | 690,876 | |
Unamortized debt issuance costs and unamortized discount | (5,798) | $ (5,981) |
Carrying amount of debt | 685,078 | 686,006 |
Senior Notes | 6.75% Notes | ||
Debt Instrument | ||
2020 (remaining nine months) | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 350,000 | |
2025 | 0 | |
Thereafter | 0 | |
Total principal amount of debt | 350,000 | |
Carrying amount of debt | 347,252 | 347,091 |
Senior Notes | 7.625% Notes | ||
Debt Instrument | ||
2020 (remaining nine months) | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
Thereafter | 100,000 | |
Total principal amount of debt | 100,000 | |
Carrying amount of debt | 96,950 | $ 96,928 |
Surplus Notes | Subordinated Debentures Tranche I | ||
Debt Instrument | ||
2020 (remaining nine months) | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
Thereafter | 41,238 | |
Total principal amount of debt | 41,238 | |
Surplus Notes | Subordinated Debentures Tranche II | ||
Debt Instrument | ||
2020 (remaining nine months) | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
Thereafter | 30,930 | |
Total principal amount of debt | 30,930 | |
Finance lease liabilities | Finance lease liabilities | ||
Debt Instrument | ||
2020 (remaining nine months) | 5,380 | |
2021 | 5,664 | |
2022 | 3,439 | |
2023 | 2,144 | |
2024 | 1,360 | |
2025 | 735 | |
Thereafter | 2,224 | |
Total principal amount of debt | 20,946 | |
Other | Other | ||
Debt Instrument | ||
2020 (remaining nine months) | 4,819 | |
2021 | 2,943 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
Thereafter | 0 | |
Total principal amount of debt | 7,762 | |
JPMorgan Chase, N.A. | 2019 Credit Agreement | ||
Debt Instrument | ||
2020 (remaining nine months) | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 140,000 | |
2024 | 0 | |
2025 | 0 | |
Thereafter | 0 | |
Total principal amount of debt | $ 140,000 |
Debt - Covenants and Compliance
Debt - Covenants and Compliance (Details) - Senior Notes | Mar. 31, 2020 |
Indenture Excess Leverage Ratio | Minimum | |
Debt Instrument | |
Ratio of Indebtedness to Net Capital | 0.35 |
Indenture Excess Leverage Ratio | Maximum | |
Debt Instrument | |
Ratio of Indebtedness to Net Capital | 1 |
6.75% Notes | |
Debt Instrument | |
Interest rate on debt | 6.75% |
7.625% Notes | |
Debt Instrument | |
Interest rate on debt | 7.625% |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate, Percent | 21.90% | 20.90% |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 16, 2023 | Mar. 31, 2020 | Jul. 15, 2023 | Dec. 31, 2019 |
Class of Stock | ||||
Shares of preferred stock issued | 2,565,120 | 2,565,120 | ||
Aggregate liquidation preference | $ 450,000 | $ 450,000 | ||
Preferred stock | Preferred Stock Series A | ||||
Class of Stock | ||||
Dividend rate per year | 7.50% | |||
Shares of preferred stock issued | 2,200,000 | |||
Depositary shares issued | 0 | |||
Liquidation preference per share | $ 25 | |||
Aggregate liquidation preference | $ 55,000 | |||
Preferred stock | Preferred Stock Series B | ||||
Class of Stock | ||||
Dividend rate per year | 7.50% | |||
Shares of preferred stock issued | 165,000 | |||
Depositary shares issued | 6,600,000 | |||
Liquidation preference per share | $ 1,000 | |||
Aggregate liquidation preference | $ 165,000 | |||
Preferred stock | Preferred Stock Series C | ||||
Class of Stock | ||||
Dividend rate per year | 7.50% | |||
Shares of preferred stock issued | 200,000 | |||
Depositary shares issued | 8,000,000 | |||
Liquidation preference per share | $ 1,000 | |||
Aggregate liquidation preference | $ 200,000 | |||
Preferred stock | Preferred Stock Series D | ||||
Class of Stock | ||||
Shares of preferred stock issued | 120 | |||
Depositary shares issued | 0 | |||
Liquidation preference per share | $ 250,000 | |||
Aggregate liquidation preference | $ 30,000 | |||
Preferred stock | Subsequent Event | Preferred Stock Series D | ||||
Class of Stock | ||||
Dividend rate per year | 5.4941% | 7.00% | ||
Dividend rate per year | six-month LIBOR |
Stockholders' Equity - Dividend
Stockholders' Equity - Dividends Declared (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Common stock | ||
Class of Stock | ||
Declaration Date | Feb. 20, 2020 | Feb. 25, 2019 |
Common Stock, Dividend Per Share | $ 0.05 | $ 0.04 |
Preferred Stock Series A | ||
Class of Stock | ||
Declaration Date | Feb. 20, 2020 | Feb. 25, 2019 |
Preferred Stock, Dividend Per Share | $ 0.46875 | $ 0.46875 |
Preferred Stock Series B | ||
Class of Stock | ||
Declaration Date | Feb. 20, 2020 | Feb. 25, 2019 |
Preferred Stock, Dividend Per Share | $ 18.75 | $ 18.75 |
Preferred Stock, Dividend Per Depositary Share | $ 0.46875 | $ 0.46875 |
Preferred Stock Series C | ||
Class of Stock | ||
Declaration Date | Feb. 20, 2020 | Feb. 25, 2019 |
Preferred Stock, Dividend Per Share | $ 18.75 | $ 18.75 |
Preferred Stock, Dividend Per Depositary Share | $ 0.46875 | $ 0.46875 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures | ||
Share Price | $ 16.55 | |
Employee stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding | ||
Outstanding at beginning of the period | 3,025,587 | |
Exercised | (120,738) | |
Outstanding at end of period | 2,904,849 | |
Exercisable at end of period | 2,904,849 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | ||
Outstanding at beginning of the period | $ 9.83 | |
Exercised | 3.67 | |
Outstanding at end of period | 10.09 | |
Exercisable at end of period | $ 10.09 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures | ||
Weighted average remaining contractual term for option awards outstanding | 3 years | |
Intrinsic value of the underlying stock exceeds the exercise price of options outstanding | $ 18,862 | |
Weighted average remaining contractual term for vested portions of options outstanding and currently exercisable | 3 years | |
Intrinsic value of the underlying shares reserved for issuance and exercise price of vested portions of options outstanding and currently exercisable | $ 18,862 | |
Granted in period | 0 | |
Forfeitures in period | 0 | |
Expirations in period | 0 | |
Intrinsic value of stock options exercised | $ 2,126 | $ 526 |
Fair value of stock options vested | $ 178 | $ 37 |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU Activity (Details) - RSUs - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
RSUs | ||
Non-vested at beginning of period | 1,033,631 | |
Granted | 543,997 | |
Vested | (381,676) | |
Non-vested at end of period | 1,195,952 | |
Weighted Average Grant Date Fair Value (in usd per share) | ||
Non-vested at beginning of period | $ 23.98 | |
Granted | 21.52 | $ 25.60 |
Vested | 23.58 | |
Non-vested at end of period | $ 22.99 | |
RSUs Additional Disclosures | ||
Fair value of RSU's vested | $ 9,002 | $ 5,796 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Stock-compensation expense | $ 3,162 | $ 2,622 |
Unrecognized compensation cost | $ 24,749 | |
Future period share-based compensation expense period of recognition (in years) | 1 year 7 months 6 days | |
Common stock | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Number of shares authorized | 2,500,000 | |
Number of shares available for grant | 1,900,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share, Diluted | ||
Net income attributable to NGHC | $ 100,759 | $ 91,758 |
Dividends on preferred stock | (7,875) | (7,875) |
Numerator for basic EPS | 92,884 | 83,883 |
Preferred stock dividends - convertible | 0 | 0 |
Numerator for diluted EPS - after assumed conversions | $ 92,884 | $ 83,883 |
Denominator for basic EPS - weighted-average shares outstanding | 113,557,441 | 113,014,711 |
Convertible preferred stock | 789,473 | 789,473 |
Dilutive potential common shares | 2,517,903 | 3,060,515 |
Denominator for diluted EPS - weighted-average shares outstanding and assumed conversions | 116,075,344 | 116,075,226 |
Earnings Per Share, Basic | ||
Basic EPS | $ 0.82 | $ 0.74 |
Earnings Per Share, Diluted | ||
Diluted EPS | $ 0.80 | $ 0.72 |
Employee stock options | ||
Earnings Per Share, Diluted | ||
Effect of dilutive securities | 1,454,379 | 1,939,844 |
RSUs | ||
Earnings Per Share, Diluted | ||
Effect of dilutive securities | 274,051 | 331,198 |
Preferred stock dividends - nonconvertible | ||
Earnings Per Share, Diluted | ||
Dividends on preferred stock | $ (7,875) | $ (7,875) |
Preferred stock dividends - convertible | ||
Earnings Per Share, Diluted | ||
Dividends on preferred stock | $ 0 | $ 0 |
Related Party Transactions - Cr
Related Party Transactions - Credit Agreement with ACP Re (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Related Party Transaction | |||
Other investments | $ 287,683 | $ 311,287 | |
ACP Re | |||
Related Party Transaction | |||
Notes Receivable, Related Parties | 125,000 | ||
Related Parties | |||
Related Party Transaction | |||
Other investments | 235,843 | 238,841 | |
Related Parties | ACP Re | |||
Related Party Transaction | |||
Notes Receivable, Related Parties | $ 250,000 | ||
Maintenance Covenant, minimum collateral interest as percent of value of outstanding loan balance | 115.00% | ||
Minimum percent of change in control included as events of default | 50.00% | ||
Related Parties | Loans | |||
Related Party Transaction | |||
Notes Receivable, Related Parties | $ 125,000 | ||
Related Parties | Loans | ACP Re | |||
Related Party Transaction | |||
Interest rate on debt | 3.70% | ||
Maximum percent of interest that may be paid in kind | 1.20% | ||
Other investments | $ 130,004 | $ 129,229 | |
Interest Income, Related Party | $ 1,203 | $ 1,188 |
Related Party Transactions - Ot
Related Party Transactions - Other Related Party Transactions (Details) - Related Parties - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lease Agreement 59 Maiden Lane | ||
Related Party Transaction | ||
Expenses from transactions with related party | $ 207 | $ 207 |
Lease Agreement 30 North LaSalle | ||
Related Party Transaction | ||
Expenses from transactions with related party | $ 108 | $ 76 |
Segment Information - Results o
Segment Information - Results of Operations of the Business Segments (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Segment Reporting [Abstract] | ||
Number of business segments | segment | 2 | |
Segment Reporting Information | ||
Gross premium written | $ 1,476,554 | $ 1,509,778 |
Ceded premiums | (266,951) | (345,114) |
Net premium written | 1,209,603 | 1,164,664 |
Change in unearned premium | (134,397) | (200,507) |
Net earned premium | 1,075,206 | 964,157 |
Ceding commission income | 50,305 | 69,534 |
Service and fee income | 179,441 | 165,507 |
Total underwriting revenues | 1,304,952 | 1,199,198 |
Loss and loss adjustment expense | 691,998 | 651,809 |
Acquisition costs and other underwriting expenses | 228,242 | 211,918 |
General and administrative expenses | 267,569 | 248,094 |
Total underwriting expenses | 1,187,809 | 1,111,821 |
Underwriting income | 117,143 | 87,377 |
Net investment income | 30,243 | 33,445 |
Net gain (loss) on Investments | (6,861) | 22 |
Interest expense | (11,780) | (12,999) |
Provision for income taxes | (28,172) | (22,506) |
Net loss attributable to noncontrolling interest | 186 | 6,419 |
Net income attributable to NGHC | 100,759 | 91,758 |
Property and Casualty | ||
Segment Reporting Information | ||
Gross premium written | 1,289,529 | 1,251,234 |
Ceded premiums | (248,142) | (286,751) |
Net premium written | 1,041,387 | 964,483 |
Change in unearned premium | (130,887) | (161,906) |
Net earned premium | 910,500 | 802,577 |
Ceding commission income | 49,745 | 66,943 |
Service and fee income | 98,917 | 104,495 |
Total underwriting revenues | 1,059,162 | 974,015 |
Loss and loss adjustment expense | 610,397 | 567,060 |
Acquisition costs and other underwriting expenses | 159,771 | 154,070 |
General and administrative expenses | 207,817 | 189,456 |
Total underwriting expenses | 977,985 | 910,586 |
Underwriting income | 81,177 | 63,429 |
Net investment income | 0 | 0 |
Net gain (loss) on Investments | 0 | 0 |
Interest expense | 0 | 0 |
Provision for income taxes | 0 | 0 |
Net loss attributable to noncontrolling interest | 0 | 0 |
Net income attributable to NGHC | 81,177 | 63,429 |
Accident and Health | ||
Segment Reporting Information | ||
Gross premium written | 187,025 | 258,544 |
Ceded premiums | (18,809) | (58,363) |
Net premium written | 168,216 | 200,181 |
Change in unearned premium | (3,510) | (38,601) |
Net earned premium | 164,706 | 161,580 |
Ceding commission income | 560 | 2,591 |
Service and fee income | 80,524 | 61,012 |
Total underwriting revenues | 245,790 | 225,183 |
Loss and loss adjustment expense | 81,601 | 84,749 |
Acquisition costs and other underwriting expenses | 68,471 | 57,848 |
General and administrative expenses | 59,752 | 58,638 |
Total underwriting expenses | 209,824 | 201,235 |
Underwriting income | 35,966 | 23,948 |
Net investment income | 0 | 0 |
Net gain (loss) on Investments | 0 | 0 |
Interest expense | 0 | 0 |
Provision for income taxes | 0 | 0 |
Net loss attributable to noncontrolling interest | 0 | 0 |
Net income attributable to NGHC | 35,966 | 23,948 |
Corporate and Other | ||
Segment Reporting Information | ||
Gross premium written | 0 | 0 |
Ceded premiums | 0 | 0 |
Net premium written | 0 | 0 |
Change in unearned premium | 0 | 0 |
Net earned premium | 0 | 0 |
Ceding commission income | 0 | 0 |
Service and fee income | 0 | 0 |
Total underwriting revenues | 0 | 0 |
Loss and loss adjustment expense | 0 | 0 |
Acquisition costs and other underwriting expenses | 0 | 0 |
General and administrative expenses | 0 | 0 |
Total underwriting expenses | 0 | 0 |
Underwriting income | 0 | 0 |
Net investment income | 30,243 | 33,445 |
Net gain (loss) on Investments | (6,861) | 22 |
Interest expense | (11,780) | (12,999) |
Provision for income taxes | (28,172) | (22,506) |
Net loss attributable to noncontrolling interest | 186 | 6,419 |
Net income attributable to NGHC | $ (16,384) | $ 4,381 |
Segment Information - Long Live
Segment Information - Long Lived Assets and Total Assets of Business Segments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information | ||
Premiums and other receivables, net | $ 1,541,760 | $ 1,428,948 |
Deferred acquisition costs | 277,368 | 263,523 |
Reinsurance recoverable, net | 1,401,681 | 1,394,308 |
Prepaid reinsurance premiums | 511,648 | 575,747 |
Goodwill and Intangible assets, net | 536,896 | 545,151 |
Prepaid and other assets | 86,359 | 94,642 |
Corporate and other assets | 5,504,862 | 5,454,215 |
Total assets | 9,860,574 | 9,756,534 |
Property and Casualty | ||
Segment Reporting Information | ||
Premiums and other receivables, net | 1,373,437 | 1,292,813 |
Deferred acquisition costs | 253,028 | 239,293 |
Reinsurance recoverable, net | 1,380,374 | 1,377,284 |
Prepaid reinsurance premiums | 511,613 | 575,712 |
Goodwill and Intangible assets, net | 429,784 | 436,724 |
Prepaid and other assets | 53,545 | 56,960 |
Corporate and other assets | 0 | 0 |
Total assets | 4,001,781 | 3,978,786 |
Accident and Health | ||
Segment Reporting Information | ||
Premiums and other receivables, net | 167,928 | 131,877 |
Deferred acquisition costs | 24,340 | 24,230 |
Reinsurance recoverable, net | 21,307 | 17,024 |
Prepaid reinsurance premiums | 35 | 35 |
Goodwill and Intangible assets, net | 107,112 | 108,427 |
Prepaid and other assets | 27,577 | 32,852 |
Corporate and other assets | 0 | 0 |
Total assets | 348,299 | 314,445 |
Corporate and Other | ||
Segment Reporting Information | ||
Premiums and other receivables, net | 395 | 4,258 |
Deferred acquisition costs | 0 | 0 |
Reinsurance recoverable, net | 0 | 0 |
Prepaid reinsurance premiums | 0 | 0 |
Goodwill and Intangible assets, net | 0 | 0 |
Prepaid and other assets | 5,237 | 4,830 |
Corporate and other assets | 5,504,862 | 5,454,215 |
Total assets | $ 5,510,494 | $ 5,463,303 |
Segment Information - Service a
Segment Information - Service and Fee Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue from External Customer | ||
Service and fee income | $ 179,441 | $ 165,507 |
Reciprocal Exchanges | ||
Revenue from External Customer | ||
Service and fee income | 1,157 | 1,370 |
NGHC, excluding Reciprocal Exchanges | ||
Revenue from External Customer | ||
Service and fee income | 178,284 | 164,137 |
Property and Casualty | ||
Revenue from External Customer | ||
Service and fee income | 98,917 | 104,495 |
Property and Casualty | Reciprocal Exchanges | ||
Revenue from External Customer | ||
Service and fee income | 1,157 | 1,370 |
Property and Casualty | NGHC, excluding Reciprocal Exchanges | ||
Revenue from External Customer | ||
Service and fee income | 97,760 | 103,125 |
Accident and Health | ||
Revenue from External Customer | ||
Service and fee income | 80,524 | 61,012 |
Accident and Health | Reciprocal Exchanges | ||
Revenue from External Customer | ||
Service and fee income | 0 | 0 |
Accident and Health | NGHC, excluding Reciprocal Exchanges | ||
Revenue from External Customer | ||
Service and fee income | 80,524 | 61,012 |
Commission revenue | ||
Revenue from External Customer | ||
Service and fee income | 48,383 | 51,981 |
Commission revenue | Property and Casualty | ||
Revenue from External Customer | ||
Service and fee income | 18,751 | 27,210 |
Commission revenue | Accident and Health | ||
Revenue from External Customer | ||
Service and fee income | 29,632 | 24,771 |
Finance and processing fees | ||
Revenue from External Customer | ||
Service and fee income | 38,260 | 34,460 |
Finance and processing fees | Property and Casualty | ||
Revenue from External Customer | ||
Service and fee income | 35,789 | 32,436 |
Finance and processing fees | Accident and Health | ||
Revenue from External Customer | ||
Service and fee income | 2,471 | 2,024 |
Group health administrative fees | ||
Revenue from External Customer | ||
Service and fee income | 29,975 | 23,505 |
Group health administrative fees | Property and Casualty | ||
Revenue from External Customer | ||
Service and fee income | 0 | 0 |
Group health administrative fees | Accident and Health | ||
Revenue from External Customer | ||
Service and fee income | 29,975 | 23,505 |
Installment fees | ||
Revenue from External Customer | ||
Service and fee income | 25,088 | 24,170 |
Installment fees | Property and Casualty | ||
Revenue from External Customer | ||
Service and fee income | 25,088 | 24,170 |
Installment fees | Accident and Health | ||
Revenue from External Customer | ||
Service and fee income | 0 | 0 |
Late payment fees | ||
Revenue from External Customer | ||
Service and fee income | 7,845 | 8,380 |
Late payment fees | Property and Casualty | ||
Revenue from External Customer | ||
Service and fee income | 7,833 | 8,293 |
Late payment fees | Accident and Health | ||
Revenue from External Customer | ||
Service and fee income | 12 | 87 |
Other service and fee income | ||
Revenue from External Customer | ||
Service and fee income | 29,890 | 23,011 |
Other service and fee income | Property and Casualty | ||
Revenue from External Customer | ||
Service and fee income | 11,456 | 12,386 |
Other service and fee income | Accident and Health | ||
Revenue from External Customer | ||
Service and fee income | $ 18,434 | $ 10,625 |
Segment Information - Gross Pre
Segment Information - Gross Premium Written (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information | ||
Gross premium written | $ 1,476,554 | $ 1,509,778 |
NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 1,384,701 | 1,404,209 |
Property and Casualty | ||
Segment Reporting Information | ||
Gross premium written | 1,289,529 | 1,251,234 |
Property and Casualty | Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 91,853 | 105,569 |
Property and Casualty | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 1,197,676 | 1,145,665 |
Property and Casualty | Personal Auto | Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 31,809 | 36,862 |
Property and Casualty | Personal Auto | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 794,497 | 766,681 |
Property and Casualty | Homeowners | Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 59,236 | 67,800 |
Property and Casualty | Homeowners | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 165,253 | 152,042 |
Property and Casualty | RV/Packaged | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 53,128 | 51,851 |
Property and Casualty | Small Business Auto | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 72,752 | 85,878 |
Property and Casualty | Lender-placed insurance | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 95,444 | 75,938 |
Property and Casualty | Other | Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 808 | 907 |
Property and Casualty | Other | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 16,602 | 13,275 |
Accident and Health | ||
Segment Reporting Information | ||
Gross premium written | 187,025 | 258,544 |
Accident and Health | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 187,025 | 258,544 |
Accident and Health | Group | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 87,538 | 64,938 |
Accident and Health | Individual | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | 99,487 | 84,192 |
Accident and Health | International | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Gross premium written | $ 0 | $ 109,414 |
Segment Information - Net Premi
Segment Information - Net Premium Written (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information | ||
Net premium written | $ 1,209,603 | $ 1,164,664 |
NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 1,154,308 | 1,115,709 |
Property and Casualty | ||
Segment Reporting Information | ||
Net premium written | 1,041,387 | 964,483 |
Property and Casualty | Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 55,295 | 48,955 |
Property and Casualty | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 986,092 | 915,528 |
Property and Casualty | Personal Auto | Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 29,074 | 15,645 |
Property and Casualty | Personal Auto | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 702,307 | 658,920 |
Property and Casualty | Homeowners | Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 25,925 | 33,016 |
Property and Casualty | Homeowners | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 88,543 | 85,245 |
Property and Casualty | RV/Packaged | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 51,978 | 51,597 |
Property and Casualty | Small Business Auto | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 58,599 | 74,186 |
Property and Casualty | Lender-placed insurance | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 77,469 | 42,070 |
Property and Casualty | Other | Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 296 | 294 |
Property and Casualty | Other | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 7,196 | 3,510 |
Accident and Health | ||
Segment Reporting Information | ||
Net premium written | 168,216 | 200,181 |
Accident and Health | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 168,216 | 200,181 |
Accident and Health | Group | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 69,471 | 53,950 |
Accident and Health | Individual | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | 98,745 | 84,123 |
Accident and Health | International | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net premium written | $ 0 | $ 62,108 |
Segment Information - Net Earne
Segment Information - Net Earned Premium (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information | ||
Net earned premium | $ 1,075,206 | $ 964,157 |
NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 1,017,608 | 918,499 |
Property and Casualty | ||
Segment Reporting Information | ||
Net earned premium | 910,500 | 802,577 |
Property and Casualty | Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 57,598 | 45,658 |
Property and Casualty | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 852,902 | 756,919 |
Property and Casualty | Personal Auto | Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 32,923 | 15,861 |
Property and Casualty | Personal Auto | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 579,502 | 510,554 |
Property and Casualty | Homeowners | Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 24,333 | 29,491 |
Property and Casualty | Homeowners | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 91,483 | 84,058 |
Property and Casualty | RV/Packaged | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 49,292 | 50,305 |
Property and Casualty | Small Business Auto | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 59,425 | 67,633 |
Property and Casualty | Lender-placed insurance | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 69,667 | 41,718 |
Property and Casualty | Other | Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 342 | 306 |
Property and Casualty | Other | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 3,533 | 2,651 |
Accident and Health | ||
Segment Reporting Information | ||
Net earned premium | 164,706 | 161,580 |
Accident and Health | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 164,706 | 161,580 |
Accident and Health | Group | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 69,470 | 53,963 |
Accident and Health | Individual | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | 95,236 | 82,235 |
Accident and Health | International | NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Net earned premium | $ 0 | $ 25,382 |
Segment Information - Fee Incom
Segment Information - Fee Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information | ||
Service and fee income | $ 179,441 | $ 165,507 |
Ceding commission income | 50,305 | 69,534 |
Fee Income | 229,746 | 235,041 |
Property and Casualty | ||
Segment Reporting Information | ||
Service and fee income | 98,917 | 104,495 |
Ceding commission income | 49,745 | 66,943 |
Property and Casualty | Reciprocal Exchanges | ||
Segment Reporting Information | ||
Service and fee income | 1,157 | 1,370 |
Ceding commission income | 13,714 | 18,534 |
Fee Income | 14,871 | 19,904 |
Accident and Health | ||
Segment Reporting Information | ||
Service and fee income | 80,524 | 61,012 |
Ceding commission income | 560 | 2,591 |
NGHC, excluding Reciprocal Exchanges | ||
Segment Reporting Information | ||
Fee Income | 214,875 | 215,137 |
NGHC, excluding Reciprocal Exchanges | Property and Casualty | ||
Segment Reporting Information | ||
Service and fee income | 97,760 | 103,125 |
Ceding commission income | 36,031 | 48,409 |
Fee Income | 133,791 | 151,534 |
NGHC, excluding Reciprocal Exchanges | Accident and Health | ||
Segment Reporting Information | ||
Service and fee income | 80,524 | 61,012 |
Ceding commission income | 560 | 2,591 |
Fee Income | 81,084 | 63,603 |
Group | NGHC, excluding Reciprocal Exchanges | Accident and Health | ||
Segment Reporting Information | ||
Service and fee income | 40,482 | 30,374 |
Individual | NGHC, excluding Reciprocal Exchanges | Accident and Health | ||
Segment Reporting Information | ||
Service and fee income | 2,217 | 2,136 |
Third-Party Fee | NGHC, excluding Reciprocal Exchanges | Accident and Health | ||
Segment Reporting Information | ||
Service and fee income | $ 37,825 | $ 28,502 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event - USD ($) $ in Thousands | Apr. 23, 2020 | Apr. 29, 2020 |
Common stock | ||
Subsequent Event | ||
Stock repurchase program, authorized amount | $ 50,000 | |
Personal Auto Insurance | ||
Subsequent Event | ||
Percentage policy credit | 15.00% |