Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 01, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | James River Group Holdings, Ltd. | |
Entity Central Index Key | 0001620459 | |
Trading Symbol | JRVR | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 30,163,234 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Invested assets: | ||
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | $ 1,250,926 | $ 1,184,202 |
Equity securities, at fair value (cost: 2019 – $79,623; 2018 – $77,152) | 84,405 | 78,385 |
Bank loan participations held-for-investment, at amortized cost, net of allowance | 263,318 | 260,972 |
Short-term investments | 92,134 | 81,966 |
Other invested assets | 74,465 | 72,321 |
Total invested assets | 1,765,248 | 1,677,846 |
Cash and cash equivalents | 132,552 | 172,457 |
Accrued investment income | 11,836 | 11,110 |
Premiums receivable and agents’ balances, net | 351,724 | 307,899 |
Reinsurance recoverable on unpaid losses | 508,655 | 467,371 |
Reinsurance recoverable on paid losses | 34,372 | 18,344 |
Prepaid reinsurance premiums | 127,734 | 112,498 |
Deferred policy acquisition costs | 56,318 | 54,450 |
Intangible assets, net | 37,388 | 37,537 |
Goodwill | 181,831 | 181,831 |
Other assets | 91,593 | 95,433 |
Total assets | 3,299,251 | 3,136,776 |
Liabilities: | ||
Reserve for losses and loss adjustment expenses | 1,730,307 | 1,661,459 |
Unearned premiums | 420,601 | 386,473 |
Payables to reinsurers | 91,469 | 61,662 |
Senior debt | 98,300 | 118,300 |
Junior subordinated debt | 104,055 | 104,055 |
Accrued expenses | 48,903 | 51,792 |
Other liabilities | 51,319 | 43,794 |
Total liabilities | 2,544,954 | 2,427,535 |
Commitments and contingent liabilities | ||
Shareholders’ equity: | ||
Common Shares – 2019 and 2018: $0.0002 par value; 200,000,000 shares authorized; 30,162,045 and 29,988,460 shares issued and outstanding, respectively | 6 | 6 |
Preferred Shares – 2019 and 2018: $0.00125 par value; 20,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 648,242 | 645,310 |
Retained earnings | 101,617 | 79,753 |
Accumulated other comprehensive income (loss) | 4,432 | (15,828) |
Total shareholders’ equity | 754,297 | 709,241 |
Total liabilities and shareholders’ equity | $ 3,299,251 | $ 3,136,776 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Available-for-sale debt securities, amortized cost | $ 1,244,427 | $ 1,199,409 |
Available-for-sale equity securities, amortized cost | $ 79,623 | $ 77,152 |
Common stock, par value (in dollars per share) | $ 0.0002 | $ 0.0002 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 30,162,045 | 29,988,460 |
Common stock, shares outstanding | 30,162,045 | 29,988,460 |
Preferred stock par value (in dollars per share) | $ 0.00125 | $ 0.00125 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | ||
Gross written premiums | $ 327,334 | $ 298,116 |
Ceded written premiums | (119,593) | (87,138) |
Net written premiums | 207,741 | 210,978 |
Change in net unearned premiums | (17,589) | (10,036) |
Net earned premiums | 190,152 | 200,942 |
Net investment income | 19,431 | 13,256 |
Net realized and unrealized gains (losses) on investments | 1,625 | (810) |
Other income | 2,919 | 4,956 |
Total revenues | 214,127 | 218,344 |
Expenses | ||
Losses and loss adjustment expenses | 139,927 | 143,772 |
Other operating expenses | 45,752 | 54,783 |
Other expenses | 0 | 4 |
Interest expense | 2,808 | 2,522 |
Amortization of intangible assets | 149 | 149 |
Total expenses | 188,636 | 201,230 |
Income before taxes | 25,491 | 17,114 |
Income tax expense | 2,763 | 1,481 |
Net income | 22,728 | 15,633 |
Other comprehensive income (loss): | ||
Net unrealized gains (losses), net of taxes of $1,446 in 2019 and $(544) in 2018 | 20,260 | (18,547) |
Total comprehensive income (loss) | $ 42,988 | $ (2,914) |
Per share data: | ||
Basic earnings per share (in dollars per share) | $ 0.76 | $ 0.53 |
Diluted earnings per share (in dollars per share) | 0.75 | 0.52 |
Dividend declared per share (in dollars per share) | $ 0.30 | $ 0.30 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 30,059,398 | 29,764,320 |
Diluted (in shares) | 30,472,304 | 30,193,303 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Tax on net unrealized gains (losses) | $ 1,446 | $ (544) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Shares | Preferred Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income |
Balance (in shares) at Dec. 31, 2017 | 29,696,682 | |||||
Balance at Dec. 31, 2017 | $ 694,699 | $ 6 | $ 0 | $ 636,149 | $ 48,198 | $ 10,346 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 15,633 | 15,633 | ||||
Other comprehensive loss | (18,547) | (18,547) | ||||
Dividends | (9,049) | (9,049) | ||||
Exercised (in shares) | 127,196 | |||||
Exercise of stock options | 2,355 | 2,355 | ||||
Vesting of RSUs (in shares) | 42,827 | |||||
Vesting of RSUs | (776) | (776) | ||||
Compensation expense under share incentive plans | 1,455 | 1,455 | ||||
Balance (in shares) at Mar. 31, 2018 | 29,866,705 | |||||
Balance at Mar. 31, 2018 | $ 685,770 | $ 6 | 0 | 639,183 | 58,753 | (12,172) |
Balance (in shares) at Dec. 31, 2018 | 29,988,460 | 29,988,460 | ||||
Balance at Dec. 31, 2018 | $ 709,241 | $ 6 | 0 | 645,310 | 79,753 | (15,828) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 22,728 | 22,728 | ||||
Other comprehensive loss | 20,260 | 20,260 | ||||
Dividends | (9,144) | (9,144) | ||||
Exercised (in shares) | 98,975 | |||||
Exercise of stock options | 2,632 | 2,632 | ||||
Vesting of RSUs (in shares) | 74,610 | |||||
Vesting of RSUs | (1,374) | (1,374) | ||||
Compensation expense under share incentive plans | $ 1,674 | 1,674 | ||||
Balance (in shares) at Mar. 31, 2019 | 30,162,045 | 30,162,045 | ||||
Balance at Mar. 31, 2019 | $ 754,297 | $ 6 | $ 0 | $ 648,242 | $ 101,617 | $ 4,432 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities | ||
Net cash provided by operating activities | $ 35,450 | $ 48,461 |
Securities available-for-sale: | ||
Purchases – fixed maturity securities | (130,362) | (118,652) |
Sales – fixed maturity securities | 45,466 | 26,392 |
Maturities and calls – fixed maturity securities | 39,215 | 45,245 |
Purchases – equity securities | (2,753) | (5,949) |
Sales – equity securities | 263 | 766 |
Bank loan participations: | ||
Purchases | (21,746) | (66,059) |
Sales | 6,602 | 35,708 |
Maturities | 11,355 | 11,427 |
Other invested assets: | ||
Purchases | 0 | (4,992) |
Return of capital | 260 | 0 |
Short-term investments, net | (10,168) | 10,569 |
Securities receivable or payable, net | 14,643 | 12,576 |
Purchases of property and equipment | (144) | (275) |
Net cash used in investing activities | (47,369) | (53,244) |
Financing activities | ||
Senior debt repayment | (20,000) | 0 |
Dividends paid | (9,244) | (9,074) |
Issuance of common shares under equity incentive plans | 2,632 | 2,862 |
Common share repurchases | (1,374) | (1,283) |
Other financing activities | 0 | (171) |
Net cash used in financing activities | (27,986) | (7,666) |
Change in cash and cash equivalents | (39,905) | (12,449) |
Cash and cash equivalents at beginning of period | 172,457 | 163,495 |
Cash and cash equivalents at end of period | 132,552 | 151,046 |
Supplemental information | ||
Interest paid | $ 3,339 | $ 2,509 |
Accounting Policies
Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Organization James River Group Holdings, Ltd. (referred to as “JRG Holdings” or, with its subsidiaries, the “Company”) is an exempted holding company registered in Bermuda, organized for the purpose of acquiring and managing insurance and reinsurance entities. The Company owns five insurance companies based in the United States (“U.S.”) focused on specialty insurance niches and two Bermuda-based reinsurance companies as described below: • James River Group Holdings UK Limited (“James River UK”) is an insurance holding company formed in 2015 in the United Kingdom (“U.K.”). JRG Holdings contributed James River Group, Inc. (“James River Group”), a U.S. insurance holding company, to James River UK in 2015. • James River Group is a Delaware domiciled insurance holding company formed in 2002 which owns all of the Company’s U.S.-based subsidiaries, either directly or indirectly through one of its wholly-owned U.S. subsidiaries. James River Group oversees the Company’s U.S. insurance operations and maintains all of the outstanding debt in the U.S. • James River Insurance Company is an Ohio domiciled excess and surplus lines insurance company that, with its wholly-owned insurance subsidiary, James River Casualty Company, is authorized to write business in every state and the District of Columbia. • Falls Lake National Insurance Company (“Falls Lake National”) is an Ohio domiciled insurance company which wholly owns Stonewood Insurance Company (“Stonewood Insurance”), a North Carolina domiciled company, and Falls Lake Fire and Casualty Company, a California domiciled company. Falls Lake National and its subsidiaries primarily write specialty admitted fronting and program business and individual risk workers' compensation insurance. • JRG Reinsurance Company Ltd. (“JRG Re”) was formed in 2007 and commenced operations in 2008. JRG Re, a Bermuda domiciled reinsurer, primarily provides non-catastrophe casualty reinsurance to U.S. third parties and, through December 31, 2017, to the Company’s U.S.-based insurance subsidiaries. • Carolina Re Ltd (“Carolina Re”) was formed in 2018 and as of January 1, 2018 provides reinsurance to the Company’s U.S.-based insurance subsidiaries. Carolina Re is also the cedent on a stop loss reinsurance treaty with JRG Re. Basis of Presentation The accompanying condensed consolidated financial statements and notes have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and do not contain all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements include the results of the Company and its subsidiaries from their respective dates of inception or acquisition, as applicable. Readers are urged to review the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for a more complete description of the Company’s business and accounting policies. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results of operations for the full year. The consolidated balance sheet as of December 31, 2018 was derived from the Company’s audited annual consolidated financial statements. Intercompany transactions and balances have been eliminated. Estimates and Assumptions Preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying disclosures. Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates. Variable Interest Entities Entities that do not have sufficient equity at risk to allow the entity to finance its activities without additional financial support or in which the equity investors, as a group, do not have the characteristic of a controlling financial interest are referred to as variable interest entities (“VIE”). A VIE is consolidated by the variable interest holder that is determined to have the controlling financial interest (primary beneficiary) as a result of having both the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE’s capital structure, contractual terms, nature of the VIE’s operations and purpose, and the Company’s relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE. The Company reassesses its VIE determination with respect to an entity on an ongoing basis. The Company holds interests in VIEs through certain equity method investments included in “other invested assets” in the accompanying condensed consolidated balance sheets. The Company has determined that it should not consolidate any of the VIEs as it is not the primary beneficiary in any of the relationships. Although the investments resulted in the Company holding variable interests in the entities, they did not empower the Company to direct the activities that most significantly impact the economic performance of the entities. The Company’s investments related to these VIEs totaled $30.5 million and $29.8 million as of March 31, 2019 and December 31, 2018 , respectively, representing the Company’s maximum exposure to loss. Income Tax Expense Our effective tax rate fluctuates from period to period based on the relative mix of income reported by country and the respective tax rates imposed by each tax jurisdiction. For the three months ended March 31, 2019 and 2018 , our U.S. federal income tax expense was 10.8% and 8.7% of income before taxes, respectively. For U.S.-sourced income, the Company’s U.S. federal income tax expense differs from the amounts computed by applying the federal statutory income tax rate to income before taxes due primarily to interest income on tax-advantaged state and municipal securities, dividends received income, and excess tax benefits on share based compensation. Effective January 1, 2018, the Company adopted ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This update was issued as a result of the enactment of the Tax Cuts and Jobs Act of 2017 ("TCJA"). The ASU allows for the option to reclassify the stranded tax effects resulting from the implementation of the TCJA out of accumulated other comprehensive income and into retained earnings. The reclassification resulted in a $711,000 decrease to the Company's retained earnings with a corresponding increase to accumulated other comprehensive income in the first quarter of 2018 in connection with the Company's adoption of this ASU. Adopted Accounting Standards Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) . This update requires the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. The Company adopted the new standard using a modified retrospective transition method, applying the transition provisions at the beginning of the period of adoption. The Company elected the package of practical expedients permitted under the transition guidance within the new standard and did not elect to use hindsight in determining the lease term. Upon adoption of the new standard, the Company derecognized assets of $22.6 million and liabilities of $30.9 million associated with a lease that was designated as build-to-suit under the previous guidance, and recorded a cumulative-effect adjustment to retained earnings of $8.3 million . The Company recorded right-of-use assets of $17.2 million and lease liabilities of $17.8 million at adoption of the new standard associated with operating leases for office space in Bermuda, North Carolina, Virginia, Arizona, and Georgia. The new standard did not materially impact the Company's results of operations, earnings per share, or cash flows, and did not impact compliance under the covenants of our current credit agreements. At March 31, 2019 , right-of-use assets and lease liabilities were $16.4 million and $17.3 million , respectively. Operating lease costs were $1.2 million in the three months ended March 31, 2019 compared to $1.0 million in the prior year period. The weighted-average discount rate and weighted average remaining lease term for operating leases was 4.3% and 6.0 years , respectively, as of March 31, 2019. The table below summarizes maturities of the Company’s operating lease liabilities as of March 31, 2019, which reconciles to total lease liabilities included in other liabilities on the Company’s condensed consolidated balance sheet. Years ending December 31, (in thousands) 2019 $ 2,863 2020 3,622 2021 3,432 2022 2,639 2023 2,376 Thereafter 4,706 Total lease payments 19,638 Less imputed interest (2,330 ) Total operating lease liabilities $ 17,308 Prospective Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Current GAAP delays the recognition of credit losses until it is probable a loss has been incurred. The update will require financial assets measured at amortized cost, such as bank loan participations held for investment, to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which fair value is below amortized cost. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Upon adoption, this ASU will be applied using the modified-retrospective approach, by which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period presented. The Company has not yet completed the analysis of how adopting this ASU will affect the Company’s financial statements. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2019 | |
Investments [Abstract] | |
Investments | Investments The Company’s available-for-sale fixed maturity securities are summarized as follows: Cost or Gross Gross Fair (in thousands) March 31, 2019 Fixed maturity securities: State and municipal $ 136,472 $ 5,185 $ (315 ) $ 141,342 Residential mortgage-backed 225,702 1,257 (3,415 ) 223,544 Corporate 548,772 6,482 (2,760 ) 552,494 Commercial mortgage and asset-backed 204,612 1,233 (1,328 ) 204,517 U.S. Treasury securities and obligations guaranteed by the U.S. government 126,844 600 (449 ) 126,995 Redeemable preferred stock 2,025 9 — 2,034 Total fixed maturity securities, available-for-sale $ 1,244,427 $ 14,766 $ (8,267 ) $ 1,250,926 December 31, 2018 Fixed maturity securities: State and municipal $ 147,160 $ 3,422 $ (1,287 ) $ 149,295 Residential mortgage-backed 208,869 577 (5,337 ) 204,109 Corporate 534,024 1,516 (10,772 ) 524,768 Commercial mortgage and asset-backed 199,528 310 (2,813 ) 197,025 U.S. Treasury securities and obligations guaranteed by the U.S. government 107,803 235 (845 ) 107,193 Redeemable preferred stock 2,025 — (213 ) 1,812 Total fixed maturity securities, available-for-sale $ 1,199,409 $ 6,060 $ (21,267 ) $ 1,184,202 The amortized cost and fair value of available-for-sale investments in fixed maturity securities at March 31, 2019 are summarized, by contractual maturity, as follows: Cost or Fair (in thousands) One year or less $ 39,494 $ 39,447 After one year through five years 438,067 440,339 After five years through ten years 229,483 231,221 After ten years 105,044 109,824 Residential mortgage-backed 225,702 223,544 Commercial mortgage and asset-backed 204,612 204,517 Redeemable preferred stock 2,025 2,034 Total $ 1,244,427 $ 1,250,926 Actual maturities may differ for some securities because borrowers have the right to call or prepay obligations with or without penalties. The following table shows the Company’s gross unrealized losses and fair value for available-for-sale securities aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position: Less Than 12 Months 12 Months or More Total Fair Gross Fair Gross Fair Gross (in thousands) March 31, 2019 Fixed maturity securities: State and municipal $ — $ — $ 29,279 $ (315 ) $ 29,279 $ (315 ) Residential mortgage-backed 6,153 (3 ) 131,841 (3,412 ) 137,994 (3,415 ) Corporate 8,471 (41 ) 199,649 (2,719 ) 208,120 (2,760 ) Commercial mortgage and asset-backed 61,747 (568 ) 65,718 (760 ) 127,465 (1,328 ) U.S. Treasury securities and obligations guaranteed by the U.S. government 6,692 (4 ) 45,323 (445 ) 52,015 (449 ) Total fixed maturity securities, available-for-sale $ 83,063 $ (616 ) $ 471,810 $ (7,651 ) $ 554,873 $ (8,267 ) December 31, 2018 Fixed maturity securities: State and municipal $ 19,733 $ (284 ) $ 47,018 $ (1,003 ) $ 66,751 $ (1,287 ) Residential mortgage-backed 49,180 (743 ) 105,778 (4,594 ) 154,958 (5,337 ) Corporate 243,384 (5,089 ) 155,902 (5,683 ) 399,286 (10,772 ) Commercial mortgage and asset-backed 106,423 (1,229 ) 51,805 (1,584 ) 158,228 (2,813 ) U.S. Treasury securities and obligations guaranteed by the U.S. government 17,618 (51 ) 54,201 (794 ) 71,819 (845 ) Redeemable preferred stock 1,812 (213 ) — — 1,812 (213 ) Total fixed maturity securities, available-for-sale $ 438,150 $ (7,609 ) $ 414,704 $ (13,658 ) $ 852,854 $ (21,267 ) The Company held securities of 163 issuers that were in an unrealized loss position at March 31, 2019 with a total fair value of $554.9 million and gross unrealized losses of $8.3 million . None of the fixed maturity securities with unrealized losses has ever missed, or been delinquent on, a scheduled principal or interest payment. At March 31, 2019 , 99.5% of the Company’s fixed maturity security portfolio was rated “BBB-” or better (“investment grade”) by Standard & Poor’s or received an equivalent rating from another nationally recognized rating agency. Fixed maturity securities with ratings below investment grade by Standard & Poor’s or another nationally recognized rating agency at March 31, 2019 had an aggregate fair value of $6.8 million and an aggregate net unrealized gain of $23,000 . Management concluded that three fixed maturity securities from one issuer that we intend to sell at a loss in the second quarter were impaired as of March 31, 2019 . The Company recorded impairment losses on these securities of $271,000 in the three months ended March 31, 2019 . Management concluded that none of the fixed maturity securities with an unrealized loss at December 31, 2018 experienced an other-than-temporary impairment. For fixed maturity securities available-for-sale that are not other-than-temporarily impaired at March 31, 2019 , management does not intend to sell the securities in an unrealized loss position, and it is not “more likely than not” that the Company will be required to sell these securities before a recovery in their value to their amortized cost basis occurs. Management concluded that two of the loans in the Company's bank loan portfolio were impaired at March 31, 2019 . At March 31, 2019 , the impaired loans had a carrying value of $4.4 million , unpaid principal of $5.9 million , and an allowance for credit losses of $1.5 million . Management concluded that none of the loans in the Company's bank loan portfolio were impaired at December 31, 2018 . The aggregate allowance for credit losses on impaired loans was $300,000 at March 31, 2018 and $3.2 million at December 31, 2017 . At December 31, 2017 , the Company held a participation in a loan with unpaid principal of $807,000 issued by a company that produces and supplies power to Puerto Rico through a power purchase agreement with Puerto Rico Electric Power Authority, a public corporation and governmental agency of the Commonwealth of Puerto Rico. Management concluded that an allowance for credit losses should be established on the loan at December 31, 2017 to reduce its carrying value to $0 . In the first quarter of 2018, the full outstanding principal on the loan was repaid and the Company recognized a realized gain of $807,000 on the repayment. Bank loan participations generally have a credit rating that is below investment grade (i.e. below “BBB-” for Standard & Poor’s) at the date of purchase. These bank loans are primarily senior, secured floating-rate debt rated “BB”, “B”, or “CCC” by Standard & Poor’s or an equivalent rating from another nationally recognized rating agency. These bank loans include assignments of, and participations in, performing and non-performing senior corporate debt generally acquired through primary bank syndications and in secondary markets. Bank loans consist of, but are not limited to, term loans, the funded and unfunded portions of revolving credit loans, and other similar loans and investments. Management believed that it was probable at the time that these loans were acquired that the Company would be able to collect all contractually required payments receivable. Generally, the accrual of interest on a bank loan participation is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest. A bank loan participation may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. Generally, bank loan participations are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt. Interest received on nonaccrual loans generally is reported as investment income. There were no bank loans on nonaccrual status at March 31, 2019 or December 31, 2018 . The allowance for credit losses is maintained at a level believed adequate by management to absorb estimated probable credit losses. Management’s periodic evaluation of the adequacy of the allowance is based on consultations and a dvice of the Company’s independent investment manager, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, current economic conditions, and other relevant factors. When an observable market price for a loan is available, the Company has recorded an allowance equal to the difference between the fair value and the amortized cost of bank loans that it has determined to be impaired as a practical expedient for an estimate of probable future cash flows to be collected on those bank loans. Bank loans are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The average recorded investment in impaired bank loans was $2.2 million and $3.4 million during the three months ended March 31, 2019 and 2018 , respectively. Investment income of $0 and $20,000 , respectively, was recognized during the time within those periods that the loans were impaired. The Company recorded net realized investment losses of $1.5 million and net realized investment gains of $3,000 in the three months ended March 31, 2019 and 2018 , respectively, for changes in the fair value of impaired bank loans. The Company’s net realized and unrealized gains and losses on investments are summarized as follows: Three Months Ended 2019 2018 (in thousands) Fixed maturity securities: Gross realized gains $ 177 $ 22 Gross realized losses (405 ) (223 ) (228 ) (201 ) Bank loan participations: Gross realized gains 13 1,220 Gross realized losses (1,692 ) (100 ) (1,679 ) 1,120 Equity securities: Gross realized gains — — Gross realized losses (18 ) (15 ) Changes in fair values of equity securities 3,549 (1,710 ) 3,531 (1,725 ) Short-term investments and other: Gross realized gains 1 — Gross realized losses — (4 ) 1 (4 ) Total $ 1,625 $ (810 ) Realized investment gains or losses are determined on a specific identification basis. The Company invests selectively in private debt and equity opportunities. These investments, which together comprise the Company’s other invested assets, are primarily focused in renewable energy, limited partnerships, and bank holding companies. Carrying Value Investment Income March 31, December 31, Three Months Ended 2019 2018 2019 2018 (in thousands) Renewable energy LLCs (a) $ 30,462 $ 29,795 $ 921 $ 1,211 Renewable energy notes receivable ( b) 8,750 8,750 328 297 Limited partnerships (c) 30,753 29,276 2,069 226 Bank holding companies (d) 4,500 4,500 86 86 Total other invested assets $ 74,465 $ 72,321 $ 3,404 $ 1,820 (a) The Company’s Corporate and Other segment owns equity interests ranging from 2.6% to 32.2% in various LLCs whose principal objective is capital appreciation and income generation from owning and operating renewable energy production facilities (wind and solar). The LLCs are managed by an entity for which two of our directors serve as officers, and the Company’s Non-Executive Chairman has invested in certain of these LLCs. The equity method is used to account for the Company’s LLC investments. Income for the LLCs primarily reflects adjustments to the carrying values of investments in renewable energy projects to their determined fair values. The fair value adjustments are included in revenues for the LLCs. Expenses for the LLCs are not significant and are comprised of administrative and interest expenses. The Company received cash distributions from these investments totaling $253,000 and $1.2 million in the three months ended March 31, 2019 and 2018 , respectively. (b) The Company's Corporate and Other segment has invested in notes receivable for renewable energy projects. At March 31, 2019 , the Company holds an $8.8 million note issued by an entity for which two of our directors serve as officers . Interest on the note, which matures in 2021, is fixed at 15.0% . Interest income on the note was $328,000 and $297,000 for the three months ended March 31, 2019 and 2018 , respectively. (c) The Company owns investments in limited partnerships that invest in concentrated portfolios including publicly-traded small cap equities, loans of middle market private equity sponsored companies, equity tranches of collateralized loan obligations ( “ CLOs ” ), and tranches of distressed home loans. Income f rom the partnerships is recognized under the equity method of accounting. The Company’s Corporate and Other segment held an investment in a limited partnership with a carrying value of $3.6 million at March 31, 2019 . The Company recognized investment income of $481,000 and investment losses of $125,000 on the investment for the three months ended March 31, 2019 and 2018 , respectively. The Company’s Excess and Surplus Lines segment holds investments in limited partnerships of $27.2 million at March 31, 2019 . Investment income of $1.6 million and $351,000 was recognized on the investments for the three months ended March 31, 2019 and 2018 , respectively. At March 31, 2019 , the Company’s Excess and Surplus Lines segment has outstanding commitments to invest another $625,000 in these limited partnerships. (d) The Company's Corporate and Other segment holds $4.5 million of subordinated notes issued by a bank holding company for which the Company’s Non-Executive Chairman was previously the Lead Independent Director and an investor and for which one of the Company’s directors was an investor and is currently a lender (the "Bank Holding Company"). Interest on the notes, which mature on August 12, 2023, is fixed at 7.6% per annum. Interest income on the notes was $86,000 in both the three months ended March 31, 2019 and 2018 , respectively. At March 31, 2019 and December 31, 2018 , the Company held an investment in a CLO where one of the underlying loans was issued by the Bank Holding Company. The investment, with a carrying value of $3.8 million at March 31, 2019 , is classified as an available-for-sale fixed maturity. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets On December 11, 2007, the Company completed an acquisition of James River Group by acquiring 100% of the outstanding shares of James River Group common stock, referred to herein as the “Merger”. The transaction was accounted for under the purchase method of accounting, and goodwill and intangible assets were recognized by the Company as a result of the transaction. Goodwill resulting from the Merger was $181.8 million at March 31, 2019 and December 31, 2018 . The gross carrying amounts and accumulated amortization for each major specifically identifiable intangible asset class were as follows: March 31, 2019 December 31, 2018 Life Gross Accumulated Gross Accumulated ($ in thousands) Intangible Assets Trademarks Indefinite $ 22,200 $ — $ 22,200 $ — Insurance licenses and authorities Indefinite 8,964 — 8,964 — Identifiable intangibles not subject to amortization 31,164 — 31,164 — Broker relationships 24.6 11,611 5,387 11,611 5,238 Identifiable intangible assets subject to amortization 11,611 5,387 11,611 5,238 $ 42,775 $ 5,387 $ 42,775 $ 5,238 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following represents a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations contained in the condensed consolidated financial statements: Three Months Ended 2019 2018 (in thousands, except share and per share amounts) Net income to shareholders $ 22,728 $ 15,633 Weighted average common shares outstanding: Basic 30,059,398 29,764,320 Common share equivalents 412,906 428,983 Diluted 30,472,304 30,193,303 Earnings per share: Basic $ 0.76 $ 0.53 Common share equivalents (0.01 ) (0.01 ) Diluted $ 0.75 $ 0.52 Common share equivalents relate to our outstanding equity awards (stock options and restricted share units ("RSUs")). For the three months ended March 31, 2019 and 2018 , common share equivalents of 171,509 and 192,817 shares, respectively, were excluded from the calculations of diluted earnings per share as their effects were anti-dilutive. |
Reserve for Losses and Loss Adj
Reserve for Losses and Loss Adjustment Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Liability for Claims and Claims Adjustment Expense [Abstract] | |
Reserve for Losses and Loss Adjustment Expenses | Reserve for Losses and Loss Adjustment Expenses The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses, net of reinsurance, to the gross amounts reported in the condensed consolidated balance sheets: Three Months Ended 2019 2018 (in thousands) Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period $ 1,194,088 $ 989,825 Add: Incurred losses and loss adjustment expenses net of reinsurance: Current year 138,959 146,382 Prior years 968 (2,610 ) Total incurred losses and loss and adjustment expenses 139,927 143,772 Deduct: Loss and loss adjustment expense payments net of reinsurance: Current year 4,679 12,177 Prior years 107,684 83,117 Total loss and loss adjustment expense payments 112,363 95,294 Reserve for losses and loss adjustment expenses net of reinsurance recoverables at end of period 1,221,652 1,038,303 Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period 508,655 331,245 Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period $ 1,730,307 $ 1,369,548 The Company experienced $1.0 million of adverse reserve development in the three months ended March 31, 2019 on the reserve for losses and loss adjustment expenses held at December 31, 2018 . This reserve development included $10,000 of favorable development in the Excess and Surplus Lines segment. The Specialty Admitted Insurance segment experienced $2.0 million of favorable development due to favorable development in the workers' compensation business for prior accident years. The Company also experienced $3.0 million of adverse development in the Casualty Reinsurance segment primarily related to losses from risk profiles and treaty structures that the Company no longer writes. The Company experienced $2.6 million of favorable reserve development in the three months ended March 31, 2018 on the reserve for losses and loss adjustment expenses held at December 31, 2017 . This reserve development included $1.1 million of favorable development in the Excess and Surplus Lines segment, primarily from the 2016 and 2017 accident years. The Specialty Admitted Insurance segment experienced $1.3 million of favorable development, primarily due to favorable development in the workers' compensation business for the 2014 through 2016 accident years. The Company also experienced $176,000 of favorable development in the Casualty Reinsurance segment. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2019 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) The following table summarizes the components of other comprehensive income (loss): Three Months Ended 2019 2018 (in thousands) Unrealized gains (losses) arising during the period, before U.S. income taxes $ 21,478 $ (19,292 ) U.S. income taxes (1,447 ) 544 Unrealized gains (losses) arising during the period, net of U.S. income taxes 20,031 (18,748 ) Less reclassification adjustment: Net realized investment losses (228 ) (201 ) U.S. income taxes (1 ) — Reclassification adjustment for investment (gains) losses realized in net income (229 ) (201 ) Other comprehensive income (loss) $ 20,260 $ (18,547 ) In addition to the $228,000 and $201,000 of net realized investment losses on available-for-sale fixed maturity securities for the three months ended March 31, 2019 and 2018 , respectively , the Company also recognized $1.7 million of net realized investment losses and $1.1 million of net realized investment gains in the respective periods on its investments in bank loan participations, and $3.5 million of net realized gains and $1.7 million of net realized losses in the respective periods for the change in fair values of equity securities. |
Contingent Liabilities
Contingent Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | Contingent Liabilities The Company is a party to various lawsuits arising in the ordinary course of its operations. The Company believes that the ultimate resolution of these matters will not materially impact its financial position, cash flows, or results of operations. The Company’s reinsurance subsidiary, JRG Re, has entered into three letter of credit facilities with banks as security to third-party reinsureds on reinsurance assumed by JRG Re. JRG Re has established custodial accounts to secure these letters of credit. Under a $75.0 million facility, $49.4 million of letters of credit were issued through March 31, 2019 which were secured by deposits of $61.8 million . Under a $102.5 million facility, $68.0 million of letters of credit were issued through March 31, 2019 which were secured by deposits of $93.5 million . Under a $100.0 million facility, $5.3 million of letters of credit were issued through March 31, 2019 which were secured by deposits of $10.5 million . JRG Re has also established trust accounts to secure its obligations to selected reinsureds. The total amount deposited in the trust accounts for the benefit of third-party reinsureds was $290.1 million at March 31, 2019 . The Company is a party to a set of insurance contracts with an insured group of companies under which the Company pays losses and loss adjustment expenses on the contract. The Company has indemnity agreements with this group of insured parties (non-insurance entities) and is contractually entitled to receive reimbursement for a significant portion of the losses and loss adjustment expenses paid on behalf of the insured parties and other expenses incurred by the Company. The insured parties are required to collateralize all amounts currently due to the Company and to provide additional collateral sufficient to cover the amounts that may be recoverable under the indemnity agreement, including, among other things, case loss and loss adjustment expense reserves, IBNR loss and loss adjustment expense reserves, extra contractual obligations and excess of policy limits liabilities. The collateral is currently provided through a collateral trust arrangement established in favor of the Company by a captive insurance company affiliate of the insured group. At March 31, 2019 , the cash equivalent collateral held in the collateral trust arrangement was approximately $1,156.0 million , which exceeds the amount of claims receivable and unpaid reported losses and loss adjustment expenses outstanding. The Company has ongoing exposure to estimated losses and expenses on these contracts growing at a faster pace than growth in our collateral balances. In addition, we have credit exposure if our estimates of future losses and loss adjustment expenses and other amounts recoverable, which are the basis for establishing collateral balances, are lower than actual amounts paid or payable. The amount of our credit exposure in any of these instances could be material. To mitigate these risks, we closely and frequently monitor our exposure compared to our collateral held, and we request additional collateral when our analysis indicates that we have uncollateralized exposure. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company has four reportable segments: the Excess and Surplus Lines segment, the Specialty Admitted Insurance segment, the Casualty Reinsurance segment, and the Corporate and Other segment. Segment profit (loss) is measured by underwriting profit (loss), which is generally defined as net earned premiums less loss and loss adjustment expenses and other operating expenses of the operating segments. Gross fee income of the Excess and Surplus Lines segment is included in that segment’s underwriting profit. Gross fee income of $2.7 million and $4.8 million was included in underwriting profit for the three months ended March 31, 2019 and 2018 , respectively. Segment results are reported prior to the effects of intercompany reinsurance agreements among the Company’s insurance subsidiaries. The following table summarizes the Company’s segment results: Excess and Specialty Casualty Corporate Total (in thousands) Three Months Ended March 31, 2019 Gross written premiums $ 186,549 $ 102,953 $ 37,832 $ — $ 327,334 Net earned premiums 141,672 12,360 36,120 — 190,152 Underwriting profit of insurance segments 13,102 1,623 327 — 15,052 Net investment income 5,544 897 11,172 1,818 19,431 Interest expense — — — 2,808 2,808 Segment revenues 152,437 13,736 46,010 1,944 214,127 Segment goodwill 181,831 — — — 181,831 Segment assets 1,013,069 706,451 1,517,142 62,589 3,299,251 Three Months Ended March 31, 2018 Gross written premiums $ 167,486 $ 87,401 $ 43,229 $ — $ 298,116 Net earned premiums 129,971 13,340 57,631 — 200,942 Underwriting profit of insurance segments 11,299 1,623 1,744 — 14,666 Net investment income 3,042 711 8,017 1,486 13,256 Interest expense — — — 2,522 2,522 Segment revenues 137,327 13,955 65,526 1,536 218,344 Segment goodwill 181,831 — — — 181,831 Segment assets 909,963 495,096 1,368,872 88,079 2,862,010 The following table reconciles the underwriting profit (loss) of the operating segments by individual segment to consolidated income before taxes: Three Months Ended 2019 2018 (in thousands) Underwriting profit of the insurance segments: Excess and Surplus Lines $ 13,102 $ 11,299 Specialty Admitted Insurance 1,623 1,623 Casualty Reinsurance 327 1,744 Total underwriting profit of insurance segments 15,052 14,666 Other operating expenses of the Corporate and Other segment (7,906 ) (7,431 ) Underwriting profit 7,146 7,235 Net investment income 19,431 13,256 Net realized and unrealized gains (losses) on investments 1,625 (810 ) Amortization of intangible assets (149 ) (149 ) Other income and expenses 246 104 Interest expense (2,808 ) (2,522 ) Income before taxes $ 25,491 $ 17,114 |
Other Operating Expenses and Ot
Other Operating Expenses and Other Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Other Operating Expenses And Other Expenses [Abstract] | |
Other Operating Expenses and Other Expenses | Other Operating Expenses and Other Expenses Other operating expenses consist of the following: Three Months Ended 2019 2018 (in thousands) Amortization of policy acquisition costs $ 18,621 $ 30,198 Other underwriting expenses of the operating segments 19,225 17,154 Other operating expenses of the Corporate and Other segment 7,906 7,431 Total $ 45,752 $ 54,783 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Three levels of inputs are used to measure fair value of financial instruments: (1) Level 1: quoted price (unadjusted) in active markets for identical assets, (2) Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument, and (3) Level 3: inputs to the valuation methodology are unobservable for the asset or liability. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. To measure fair value, the Company obtains quoted market prices for its investment securities from its outside investment managers. If a quoted market price is not available, the Company uses prices of similar securities. Values for U.S. Treasury and publicly-traded equity securities are generally based on Level 1 inputs which use the market approach valuation technique. The values for all other fixed maturity securities (including state and municipal securities and obligations of U.S. government corporations and agencies) generally incorporate significant Level 2 inputs, and in some cases, Level 3 inputs, using the market approach and income approach valuation techniques. There have been no changes in the Company’s use of valuation techniques since December 31, 2017. The Company reviews fair value prices provided by its outside investment managers for reasonableness by comparing the fair values provided by the managers to those provided by its investment custodian. The Company also reviews and monitors changes in unrealized gains and losses. The Company has not historically adjusted security prices. The Company obtains an understanding of the methods, models and inputs used by the investment managers and independent pricing services, and controls are in place to validate that prices provided represent fair values. The Company’s control process includes, but is not limited to, initial and ongoing evaluation of the methodologies used, a review of specific securities and an assessment for proper classification within the fair value hierarchy, and obtaining and reviewing internal control reports for our investment manager that obtains fair values from independent pricing services. Assets measured at fair value on a recurring basis as of March 31, 2019 are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) Fixed maturity securities, available-for-sale: State and municipal $ — $ 141,342 $ — $ 141,342 Residential mortgage-backed — 223,544 — 223,544 Corporate — 552,494 — 552,494 Commercial mortgage and asset-backed — 204,517 — 204,517 U.S. Treasury securities and obligations guaranteed by the U.S. government 126,472 523 — 126,995 Redeemable preferred stock — 2,034 — 2,034 Total fixed maturity securities, available-for-sale $ 126,472 $ 1,124,454 $ — $ 1,250,926 Equity securities: Preferred stock — 65,148 — 65,148 Common stock 18,323 757 177 19,257 Total equity securities $ 18,323 $ 65,905 $ 177 $ 84,405 Short-term investments $ — $ 92,134 $ — $ 92,134 Assets measured at fair value on a recurring basis as of December 31, 2018 are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) Fixed maturity securities, available-for-sale: State and municipal $ — $ 149,295 $ — $ 149,295 Residential mortgage-backed — 204,109 — 204,109 Corporate — 524,768 — 524,768 Commercial mortgage and asset-backed — 192,797 4,228 197,025 U.S. Treasury securities and obligations guaranteed by the U.S. government 106,651 542 — 107,193 Redeemable preferred stock — 1,812 — 1,812 Total fixed maturity securities, available-for-sale $ 106,651 $ 1,073,323 $ 4,228 $ 1,184,202 Equity securities: Preferred stock — 60,740 — 60,740 Common stock 16,674 757 214 17,645 Total equity securities $ 16,674 $ 61,497 $ 214 $ 78,385 Short-term investments $ 1,250 $ 80,716 $ — $ 81,966 The Company held one available-for-sale fixed maturity security at December 31, 2018 for which the fair value was determined using significant unobservable inputs (Level 3). A market approach using prices in trades of comparable securities was utilized to determine a fair value of $4.2 million for the security at December 31, 2018 . A principal payment of $456,000 was received on the available-for-sale fixed maturity security in the three months ended March 31, 2019 . The Company was able to obtain a quoted price from a pricing vendor for the available-for-sale fixed maturity security at March 31, 2019 and it was transferred to Level 2. At March 31, 2019 and December 31, 2018 , the Company held one equity security for which the fair value was determined using significant unobservable inputs (Level 3). A market approach using prices in trades of comparable securities was utilized to determine a fair value for the security of $177,000 at March 31, 2019 and $214,000 at December 31, 2018 . There were no purchases or sales involving Level 3 securities for the three months ended March 31, 2019 or 2018 . There were no transfers involving Level 3 securities for the three months ended March 31, 2018 . Transfers out of Level 3 occur when the Company is able to obtain reliable prices from pricing vendors for securities for which the Company was previously unable to obtain reliable prices. Transfers in to Level 3 occur when the Company is unable to obtain reliable prices for securities from pricing vendors and instead must use broker price quotes to value the securities. There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2019 or 2018 . The Company recognizes transfers between levels at the beginning of the reporting period. There were no realized gains or losses included in earnings for the three months ended March 31, 2019 attributable to the change in unrealized gains or losses relating to Level 3 assets valued at fair value on a recurring basis that are still held at March 31, 2019 . The Company measures certain bank loan participations at fair value on a non-recurring basis during the year as part of the Company’s impairment evaluation when loans are determined by management to be impaired. Assets measured at fair value on a nonrecurring basis are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) March 31, 2019 Bank loan participations held-for-investment $ — $ — $ 4,394 $ 4,394 December 31, 2018 Bank loan participations held-for-investment $ — $ — $ — $ — Bank loan participations held-for-investment that were determined to be impaired were written down to their fair value of $4.4 million a t March 31, 2019 . Management concluded that none of the bank loan participations held-for-investment were impaired as of December 31, 2018 . In the determination of the fair value for bank loan participations and certain high yield bonds, the Company’s investment manager endeavors to obtain data from multiple external pricing sources. External pricing sources may include brokers, dealers and price data vendors that provide a composite price based on prices from multiple dealers. Such external pricing sources typically provide valuations for normal institutional size trading units of such securities using methods based on market transactions for comparable securities, and various relationships between securities, as generally recognized by institutional dealers. For investments in which the investment manager determines that only one external pricing source is appropriate or if only one external price is available, the relevant investment is generally recorded at fair value based on such price. Investments for which external sources are not available or are determined by the investment manager not to be representative of fair value are recorded at fair value as determined by the Company, with input from its investment managers and valuation specialists as considered necessary. In determining the fair value of such investments, the Company considers one or more of the following factors: type of security held, convertibility or exchangeability of the security, redeemability of the security (including the timing of redemptions), application of industry accepted valuation models, recent trading activity, liquidity, estimates of liquidation value, purchase cost, and prices received for securities with similar terms of the same issuer or similar issuers. At March 31, 2019 and December 31, 2018 , there were no investments for which external sources were unavailable to determine fair value. The carrying values and fair values of financial instruments are summarized below: March 31, 2019 December 31, 2018 Carrying Fair Value Carrying Fair Value (in thousands) Assets Fixed maturity securities, available-for-sale $ 1,250,926 $ 1,250,926 $ 1,184,202 $ 1,184,202 Equity securities 84,405 84,405 78,385 78,385 Bank loan participations held-for-investment 263,318 257,298 260,972 250,697 Cash and cash equivalents 132,552 132,552 172,457 172,457 Short-term investments 92,134 92,134 81,966 81,966 Other invested assets – notes receivable 13,250 18,701 13,250 18,687 Liabilities Senior debt 98,300 100,038 118,300 118,317 Junior subordinated debt 104,055 120,815 104,055 117,057 The fair values of fixed maturity securities and equity securities have been determined using quoted market prices for securities traded in the public market or prices using bid or closing prices for securities not traded in the public marketplace. The fair values of cash and cash equivalents and short-term investments approximate their carrying values due to their short-term maturity. The fair values of other invested assets-notes receivable, senior debt, and junior subordinated debt at March 31, 2019 and December 31, 2018 were determined by calculating the present value of expected future cash flows under the terms of the note agreements or debt agreements, as applicable, discounted at an estimated market rate of interest at March 31, 2019 and December 31, 2018 , respectively. The fair values of bank loan participations held-for-investment, senior debt, and junior subordinated debt at March 31, 2019 and December 31, 2018 were determined using inputs to the valuation methodology that are unobservable (Level 3). |
Capital Stock and Equity Awards
Capital Stock and Equity Awards | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Capital Stock and Equity Awards | Capital Stock and Equity Awards The Company issued 173,585 common shares in the three months ended March 31, 2019 with 98,975 of the new shares related to stock option exercises and 74,610 of the new shares related to vesting of RSUs. The total common shares outstanding increased from 29,988,460 at December 31, 2018 to 30,162,045 at March 31, 2019 . The Company declared the following dividends during the first three months of 2019 and 2018: Date of Declaration Dividend per Common Share Payable to Shareholders of Record on Payment Date Total Amount 2019 February 20, 2019 $ 0.30 March 11, 2019 March 29, 2019 $ 9.1 million 2018 February 22, 2018 $ 0.30 March 12, 2018 March 30, 2018 $ 9.0 million Included in the total dividends for the three months ended March 31, 2019 and 2018 are $107,000 and $99,000 of dividend equivalents on unvested RSUs, respectively. The balance of dividends payable on unvested RSUs was $457,000 at March 31, 2019 and $557,000 at December 31, 2018 . Equity Incentive Plans The Company’s shareholders have approved various equity incentive plans, including the Amended and Restated 2009 Equity Incentive Plan (the “Legacy Plan”), the 2014 Long Term Incentive Plan (“2014 LTIP”), and the 2014 Non-Employee Director Incentive Plan (“2014 Director Plan”) (collectively, the “Plans”). All awards issued under the Plans are issued at the discretion of the Board of Directors. Under the Legacy Plan, employees received non-qualified stock options. Options are outstanding under the Legacy Plan; however, no additional awards may be granted. Employees are eligible to receive non-qualified stock options, incentive stock options, share appreciation rights, performance shares, restricted shares, RSUs, and other awards under the 2014 LTIP. The maximum number of shares available for issuance under the 2014 LTIP is 4,171,150 , and at March 31, 2019 , 1,575,796 shares are available for grant. Non-employee directors of the Company are eligible to receive non-qualified stock options, share appreciation rights, performance shares, restricted shares, RSUs, and other awards under the 2014 Director Plan. The maximum number of shares available for issuance under the 2014 Director Plan is 50,000 , and at March 31, 2019 , 8,594 shares are available for grant. Generally, awards issued under the 2014 LTIP and 2014 Director Plan vest immediately in the event that an award recipient is terminated without Cause (as defined in the applicable plans), and in the case of the 2014 LTIP for Good Reason (as defined in the applicable plans), at any time following a Change in Control (as defined in the applicable plans). Options The following table summarizes option activity: Three Months Ended March 31, 2019 2018 Shares Weighted- Shares Weighted- Outstanding: Beginning of period 1,115,324 $ 29.02 1,479,236 $ 27.81 Granted — $ — — $ — Exercised (125,349 ) $ 29.47 (142,129 ) $ 20.14 Forfeited (3,759 ) $ 36.37 — $ — End of period 986,216 $ 28.94 1,337,107 $ 28.63 Exercisable, end of period 926,166 $ 28.07 983,508 $ 26.06 All of the outstanding options vest over two to four years and have a contractual life of seven years from the original date of grant. All of the outstanding options have an exercise price equal to the fair value of the underlying shares at the date of grant. The weighted-average remaining contractual life of the options outstanding and options exercisable at March 31, 2019 was 3.4 years and 3.3 years, respectively. RSUs The following table summarizes RSU activity: Three Months Ended March 31, 2019 2018 Shares Weighted- Shares Weighted- Unvested, beginning of period 300,142 $ 39.22 178,882 $ 37.93 Granted 167,295 $ 42.07 214,907 $ 39.81 Vested (109,545 ) $ 39.93 (62,714 ) $ 40.90 Forfeited (1,398 ) $ 40.26 — $ — Unvested, end of period 356,494 $ 40.33 331,075 $ 38.59 The vesting period of RSUs granted to employees range from one to five years and vest ratably over the respective vesting period, and the majority vest in three years. All RSUs granted to date to non-employee directors had a one year vesting period. The holders of RSUs are entitled to dividend equivalents. The dividend equivalents are settled in cash at the same time that the underlying RSUs vest and are subject to the same risk of forfeiture as the underlying shares. The fair value of the RSUs granted is based on the market price of the underlying shares at the date of grant. Compensation Expense Share based compensation expense is recognized on a straight line basis over the vesting period. The amount of expense and related tax benefit is summarized below: Three Months Ended 2019 2018 (in thousands) Share based compensation expense $ 1,674 $ 1,455 U.S. tax benefit on share based compensation expense 200 173 As of March 31, 2019 , the Company had $13.7 million of unrecognized share based compensation expense expected to be charged to earnings over a weighted-average period of 2.2 years. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 30, 2019 , the Board of Directors declared a cash dividend of $0.30 per common share. The dividend is payable on June 28, 2019 to shareholders of record on June 10, 2019 . On April 30, 2019 , the Board of Directors granted awards under the 2014 LTIP to the Company’s employees. RSUs for 11,261 shares were awarded with a fair value on the date of grant of $42.22 per share. The RSUs vest over three years. At the 2019 Annual General Meeting of Shareholders of the Company (the “Annual Meeting”) held on April 30, 2019, the Company's shareholders approved an amendment to the James River Group Holdings, Ltd. 2014 Non-Employee Director Incentive Plan (the “Non-Employee Director Plan”). The Board of Directors of the Company had previously approved the amendment. The amendment increases the number of the Company's common shares authorized for issuance under the Non-Employee Director Plan by 100,000 shares. No other modifications were made to the Non-Employee Director Plan. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements and notes have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and do not contain all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements include the results of the Company and its subsidiaries from their respective dates of inception or acquisition, as applicable. Readers are urged to review the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for a more complete description of the Company’s business and accounting policies. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results of operations for the full year. The consolidated balance sheet as of December 31, 2018 was derived from the Company’s audited annual consolidated financial statements. Intercompany transactions and balances have been eliminated. |
Estimates and Assumptions | Estimates and Assumptions Preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying disclosures. Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates. |
Variable Interest Entities | Variable Interest Entities Entities that do not have sufficient equity at risk to allow the entity to finance its activities without additional financial support or in which the equity investors, as a group, do not have the characteristic of a controlling financial interest are referred to as variable interest entities (“VIE”). A VIE is consolidated by the variable interest holder that is determined to have the controlling financial interest (primary beneficiary) as a result of having both the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE’s capital structure, contractual terms, nature of the VIE’s operations and purpose, and the Company’s relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE. The Company reassesses its VIE determination with respect to an entity on an ongoing basis. The Company holds interests in VIEs through certain equity method investments included in “other invested assets” in the accompanying condensed consolidated balance sheets. The Company has determined that it should not consolidate any of the VIEs as it is not the primary beneficiary in any of the relationships. Although the investments resulted in the Company holding variable interests in the entities, they did not empower the Company to direct the activities that most significantly impact the economic performance of the entities. |
Income Tax Expense | Income Tax Expense Our effective tax rate fluctuates from period to period based on the relative mix of income reported by country and the respective tax rates imposed by each tax jurisdiction. For the three months ended March 31, 2019 and 2018 , our U.S. federal income tax expense was 10.8% and 8.7% of income before taxes, respectively. For U.S.-sourced income, the Company’s U.S. federal income tax expense differs from the amounts computed by applying the federal statutory income tax rate to income before taxes due primarily to interest income on tax-advantaged state and municipal securities, dividends received income, and excess tax benefits on share based compensation. Effective January 1, 2018, the Company adopted ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This update was issued as a result of the enactment of the Tax Cuts and Jobs Act of 2017 ("TCJA"). The ASU allows for the option to reclassify the stranded tax effects resulting from the implementation of the TCJA out of accumulated other comprehensive income and into retained earnings. |
Adopted and Prospective Accounting Standards | Adopted Accounting Standards Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) . This update requires the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. The Company adopted the new standard using a modified retrospective transition method, applying the transition provisions at the beginning of the period of adoption. The Company elected the package of practical expedients permitted under the transition guidance within the new standard and did not elect to use hindsight in determining the lease term. Upon adoption of the new standard, the Company derecognized assets of $22.6 million and liabilities of $30.9 million associated with a lease that was designated as build-to-suit under the previous guidance, and recorded a cumulative-effect adjustment to retained earnings of $8.3 million . The Company recorded right-of-use assets of $17.2 million and lease liabilities of $17.8 million at adoption of the new standard associated with operating leases for office space in Bermuda, North Carolina, Virginia, Arizona, and Georgia. The new standard did not materially impact the Company's results of operations, earnings per share, or cash flows, and did not impact compliance under the covenants of our current credit agreements. At March 31, 2019 , right-of-use assets and lease liabilities were $16.4 million and $17.3 million , respectively. Operating lease costs were $1.2 million in the three months ended March 31, 2019 compared to $1.0 million in the prior year period. The weighted-average discount rate and weighted average remaining lease term for operating leases was 4.3% and 6.0 years , respectively, as of March 31, 2019. The table below summarizes maturities of the Company’s operating lease liabilities as of March 31, 2019, which reconciles to total lease liabilities included in other liabilities on the Company’s condensed consolidated balance sheet. Years ending December 31, (in thousands) 2019 $ 2,863 2020 3,622 2021 3,432 2022 2,639 2023 2,376 Thereafter 4,706 Total lease payments 19,638 Less imputed interest (2,330 ) Total operating lease liabilities $ 17,308 Prospective Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Current GAAP delays the recognition of credit losses until it is probable a loss has been incurred. The update will require financial assets measured at amortized cost, such as bank loan participations held for investment, to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which fair value is below amortized cost. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Upon adoption, this ASU will be applied using the modified-retrospective approach, by which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period presented. The Company has not yet completed the analysis of how adopting this ASU will affect the Company’s financial statements. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Operating Leases Maturity | The table below summarizes maturities of the Company’s operating lease liabilities as of March 31, 2019, which reconciles to total lease liabilities included in other liabilities on the Company’s condensed consolidated balance sheet. Years ending December 31, (in thousands) 2019 $ 2,863 2020 3,622 2021 3,432 2022 2,639 2023 2,376 Thereafter 4,706 Total lease payments 19,638 Less imputed interest (2,330 ) Total operating lease liabilities $ 17,308 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments [Abstract] | |
Schedule of summary of available-for-sale investments | The Company’s available-for-sale fixed maturity securities are summarized as follows: Cost or Gross Gross Fair (in thousands) March 31, 2019 Fixed maturity securities: State and municipal $ 136,472 $ 5,185 $ (315 ) $ 141,342 Residential mortgage-backed 225,702 1,257 (3,415 ) 223,544 Corporate 548,772 6,482 (2,760 ) 552,494 Commercial mortgage and asset-backed 204,612 1,233 (1,328 ) 204,517 U.S. Treasury securities and obligations guaranteed by the U.S. government 126,844 600 (449 ) 126,995 Redeemable preferred stock 2,025 9 — 2,034 Total fixed maturity securities, available-for-sale $ 1,244,427 $ 14,766 $ (8,267 ) $ 1,250,926 December 31, 2018 Fixed maturity securities: State and municipal $ 147,160 $ 3,422 $ (1,287 ) $ 149,295 Residential mortgage-backed 208,869 577 (5,337 ) 204,109 Corporate 534,024 1,516 (10,772 ) 524,768 Commercial mortgage and asset-backed 199,528 310 (2,813 ) 197,025 U.S. Treasury securities and obligations guaranteed by the U.S. government 107,803 235 (845 ) 107,193 Redeemable preferred stock 2,025 — (213 ) 1,812 Total fixed maturity securities, available-for-sale $ 1,199,409 $ 6,060 $ (21,267 ) $ 1,184,202 |
Schedule of summary of available-for-sale investments by contractual maturity | The amortized cost and fair value of available-for-sale investments in fixed maturity securities at March 31, 2019 are summarized, by contractual maturity, as follows: Cost or Fair (in thousands) One year or less $ 39,494 $ 39,447 After one year through five years 438,067 440,339 After five years through ten years 229,483 231,221 After ten years 105,044 109,824 Residential mortgage-backed 225,702 223,544 Commercial mortgage and asset-backed 204,612 204,517 Redeemable preferred stock 2,025 2,034 Total $ 1,244,427 $ 1,250,926 |
Schedule of gross unrealized losses and fair value for available-for-sale securities | The following table shows the Company’s gross unrealized losses and fair value for available-for-sale securities aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position: Less Than 12 Months 12 Months or More Total Fair Gross Fair Gross Fair Gross (in thousands) March 31, 2019 Fixed maturity securities: State and municipal $ — $ — $ 29,279 $ (315 ) $ 29,279 $ (315 ) Residential mortgage-backed 6,153 (3 ) 131,841 (3,412 ) 137,994 (3,415 ) Corporate 8,471 (41 ) 199,649 (2,719 ) 208,120 (2,760 ) Commercial mortgage and asset-backed 61,747 (568 ) 65,718 (760 ) 127,465 (1,328 ) U.S. Treasury securities and obligations guaranteed by the U.S. government 6,692 (4 ) 45,323 (445 ) 52,015 (449 ) Total fixed maturity securities, available-for-sale $ 83,063 $ (616 ) $ 471,810 $ (7,651 ) $ 554,873 $ (8,267 ) December 31, 2018 Fixed maturity securities: State and municipal $ 19,733 $ (284 ) $ 47,018 $ (1,003 ) $ 66,751 $ (1,287 ) Residential mortgage-backed 49,180 (743 ) 105,778 (4,594 ) 154,958 (5,337 ) Corporate 243,384 (5,089 ) 155,902 (5,683 ) 399,286 (10,772 ) Commercial mortgage and asset-backed 106,423 (1,229 ) 51,805 (1,584 ) 158,228 (2,813 ) U.S. Treasury securities and obligations guaranteed by the U.S. government 17,618 (51 ) 54,201 (794 ) 71,819 (845 ) Redeemable preferred stock 1,812 (213 ) — — 1,812 (213 ) Total fixed maturity securities, available-for-sale $ 438,150 $ (7,609 ) $ 414,704 $ (13,658 ) $ 852,854 $ (21,267 ) |
Schedule of summary of realized gains and losses | The Company’s net realized and unrealized gains and losses on investments are summarized as follows: Three Months Ended 2019 2018 (in thousands) Fixed maturity securities: Gross realized gains $ 177 $ 22 Gross realized losses (405 ) (223 ) (228 ) (201 ) Bank loan participations: Gross realized gains 13 1,220 Gross realized losses (1,692 ) (100 ) (1,679 ) 1,120 Equity securities: Gross realized gains — — Gross realized losses (18 ) (15 ) Changes in fair values of equity securities 3,549 (1,710 ) 3,531 (1,725 ) Short-term investments and other: Gross realized gains 1 — Gross realized losses — (4 ) 1 (4 ) Total $ 1,625 $ (810 ) |
Schedule of other invested assets | The Company invests selectively in private debt and equity opportunities. These investments, which together comprise the Company’s other invested assets, are primarily focused in renewable energy, limited partnerships, and bank holding companies. Carrying Value Investment Income March 31, December 31, Three Months Ended 2019 2018 2019 2018 (in thousands) Renewable energy LLCs (a) $ 30,462 $ 29,795 $ 921 $ 1,211 Renewable energy notes receivable ( b) 8,750 8,750 328 297 Limited partnerships (c) 30,753 29,276 2,069 226 Bank holding companies (d) 4,500 4,500 86 86 Total other invested assets $ 74,465 $ 72,321 $ 3,404 $ 1,820 (a) The Company’s Corporate and Other segment owns equity interests ranging from 2.6% to 32.2% in various LLCs whose principal objective is capital appreciation and income generation from owning and operating renewable energy production facilities (wind and solar). The LLCs are managed by an entity for which two of our directors serve as officers, and the Company’s Non-Executive Chairman has invested in certain of these LLCs. The equity method is used to account for the Company’s LLC investments. Income for the LLCs primarily reflects adjustments to the carrying values of investments in renewable energy projects to their determined fair values. The fair value adjustments are included in revenues for the LLCs. Expenses for the LLCs are not significant and are comprised of administrative and interest expenses. The Company received cash distributions from these investments totaling $253,000 and $1.2 million in the three months ended March 31, 2019 and 2018 , respectively. (b) The Company's Corporate and Other segment has invested in notes receivable for renewable energy projects. At March 31, 2019 , the Company holds an $8.8 million note issued by an entity for which two of our directors serve as officers . Interest on the note, which matures in 2021, is fixed at 15.0% . Interest income on the note was $328,000 and $297,000 for the three months ended March 31, 2019 and 2018 , respectively. (c) The Company owns investments in limited partnerships that invest in concentrated portfolios including publicly-traded small cap equities, loans of middle market private equity sponsored companies, equity tranches of collateralized loan obligations ( “ CLOs ” ), and tranches of distressed home loans. Income f rom the partnerships is recognized under the equity method of accounting. The Company’s Corporate and Other segment held an investment in a limited partnership with a carrying value of $3.6 million at March 31, 2019 . The Company recognized investment income of $481,000 and investment losses of $125,000 on the investment for the three months ended March 31, 2019 and 2018 , respectively. The Company’s Excess and Surplus Lines segment holds investments in limited partnerships of $27.2 million at March 31, 2019 . Investment income of $1.6 million and $351,000 was recognized on the investments for the three months ended March 31, 2019 and 2018 , respectively. At March 31, 2019 , the Company’s Excess and Surplus Lines segment has outstanding commitments to invest another $625,000 in these limited partnerships. (d) The Company's Corporate and Other segment holds $4.5 million of subordinated notes issued by a bank holding company for which the Company’s Non-Executive Chairman was previously the Lead Independent Director and an investor and for which one of the Company’s directors was an investor and is currently a lender (the "Bank Holding Company"). Interest on the notes, which mature on August 12, 2023, is fixed at 7.6% per annum. Interest income on the notes was $86,000 in both the three months ended March 31, 2019 and 2018 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of gross carrying amounts and accumulated amortization | The gross carrying amounts and accumulated amortization for each major specifically identifiable intangible asset class were as follows: March 31, 2019 December 31, 2018 Life Gross Accumulated Gross Accumulated ($ in thousands) Intangible Assets Trademarks Indefinite $ 22,200 $ — $ 22,200 $ — Insurance licenses and authorities Indefinite 8,964 — 8,964 — Identifiable intangibles not subject to amortization 31,164 — 31,164 — Broker relationships 24.6 11,611 5,387 11,611 5,238 Identifiable intangible assets subject to amortization 11,611 5,387 11,611 5,238 $ 42,775 $ 5,387 $ 42,775 $ 5,238 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of numerator and denominator of basic and diluted earnings per share | The following represents a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations contained in the condensed consolidated financial statements: Three Months Ended 2019 2018 (in thousands, except share and per share amounts) Net income to shareholders $ 22,728 $ 15,633 Weighted average common shares outstanding: Basic 30,059,398 29,764,320 Common share equivalents 412,906 428,983 Diluted 30,472,304 30,193,303 Earnings per share: Basic $ 0.76 $ 0.53 Common share equivalents (0.01 ) (0.01 ) Diluted $ 0.75 $ 0.52 |
Reserve for Losses and Loss A_2
Reserve for Losses and Loss Adjustment Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Liability for Claims and Claims Adjustment Expense [Abstract] | |
Schedule of reconciliation of beginning and ending reserve balances for losses and loss adjustment expenses | The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses, net of reinsurance, to the gross amounts reported in the condensed consolidated balance sheets: Three Months Ended 2019 2018 (in thousands) Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period $ 1,194,088 $ 989,825 Add: Incurred losses and loss adjustment expenses net of reinsurance: Current year 138,959 146,382 Prior years 968 (2,610 ) Total incurred losses and loss and adjustment expenses 139,927 143,772 Deduct: Loss and loss adjustment expense payments net of reinsurance: Current year 4,679 12,177 Prior years 107,684 83,117 Total loss and loss adjustment expense payments 112,363 95,294 Reserve for losses and loss adjustment expenses net of reinsurance recoverables at end of period 1,221,652 1,038,303 Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period 508,655 331,245 Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period $ 1,730,307 $ 1,369,548 |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of components of comprehensive income (loss) | The following table summarizes the components of other comprehensive income (loss): Three Months Ended 2019 2018 (in thousands) Unrealized gains (losses) arising during the period, before U.S. income taxes $ 21,478 $ (19,292 ) U.S. income taxes (1,447 ) 544 Unrealized gains (losses) arising during the period, net of U.S. income taxes 20,031 (18,748 ) Less reclassification adjustment: Net realized investment losses (228 ) (201 ) U.S. income taxes (1 ) — Reclassification adjustment for investment (gains) losses realized in net income (229 ) (201 ) Other comprehensive income (loss) $ 20,260 $ (18,547 ) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of summary of company's segment results | The following table summarizes the Company’s segment results: Excess and Specialty Casualty Corporate Total (in thousands) Three Months Ended March 31, 2019 Gross written premiums $ 186,549 $ 102,953 $ 37,832 $ — $ 327,334 Net earned premiums 141,672 12,360 36,120 — 190,152 Underwriting profit of insurance segments 13,102 1,623 327 — 15,052 Net investment income 5,544 897 11,172 1,818 19,431 Interest expense — — — 2,808 2,808 Segment revenues 152,437 13,736 46,010 1,944 214,127 Segment goodwill 181,831 — — — 181,831 Segment assets 1,013,069 706,451 1,517,142 62,589 3,299,251 Three Months Ended March 31, 2018 Gross written premiums $ 167,486 $ 87,401 $ 43,229 $ — $ 298,116 Net earned premiums 129,971 13,340 57,631 — 200,942 Underwriting profit of insurance segments 11,299 1,623 1,744 — 14,666 Net investment income 3,042 711 8,017 1,486 13,256 Interest expense — — — 2,522 2,522 Segment revenues 137,327 13,955 65,526 1,536 218,344 Segment goodwill 181,831 — — — 181,831 Segment assets 909,963 495,096 1,368,872 88,079 2,862,010 |
Schedule of underwriting profit of operating segments by individual segment and reconciliation to consolidated income before taxes | The following table reconciles the underwriting profit (loss) of the operating segments by individual segment to consolidated income before taxes: Three Months Ended 2019 2018 (in thousands) Underwriting profit of the insurance segments: Excess and Surplus Lines $ 13,102 $ 11,299 Specialty Admitted Insurance 1,623 1,623 Casualty Reinsurance 327 1,744 Total underwriting profit of insurance segments 15,052 14,666 Other operating expenses of the Corporate and Other segment (7,906 ) (7,431 ) Underwriting profit 7,146 7,235 Net investment income 19,431 13,256 Net realized and unrealized gains (losses) on investments 1,625 (810 ) Amortization of intangible assets (149 ) (149 ) Other income and expenses 246 104 Interest expense (2,808 ) (2,522 ) Income before taxes $ 25,491 $ 17,114 |
Other Operating Expenses and _2
Other Operating Expenses and Other Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Operating Expenses And Other Expenses [Abstract] | |
Schedule of other operating expenses | Other operating expenses consist of the following: Three Months Ended 2019 2018 (in thousands) Amortization of policy acquisition costs $ 18,621 $ 30,198 Other underwriting expenses of the operating segments 19,225 17,154 Other operating expenses of the Corporate and Other segment 7,906 7,431 Total $ 45,752 $ 54,783 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets measured at fair value on a recurring basis | Assets measured at fair value on a recurring basis as of March 31, 2019 are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) Fixed maturity securities, available-for-sale: State and municipal $ — $ 141,342 $ — $ 141,342 Residential mortgage-backed — 223,544 — 223,544 Corporate — 552,494 — 552,494 Commercial mortgage and asset-backed — 204,517 — 204,517 U.S. Treasury securities and obligations guaranteed by the U.S. government 126,472 523 — 126,995 Redeemable preferred stock — 2,034 — 2,034 Total fixed maturity securities, available-for-sale $ 126,472 $ 1,124,454 $ — $ 1,250,926 Equity securities: Preferred stock — 65,148 — 65,148 Common stock 18,323 757 177 19,257 Total equity securities $ 18,323 $ 65,905 $ 177 $ 84,405 Short-term investments $ — $ 92,134 $ — $ 92,134 Assets measured at fair value on a recurring basis as of December 31, 2018 are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) Fixed maturity securities, available-for-sale: State and municipal $ — $ 149,295 $ — $ 149,295 Residential mortgage-backed — 204,109 — 204,109 Corporate — 524,768 — 524,768 Commercial mortgage and asset-backed — 192,797 4,228 197,025 U.S. Treasury securities and obligations guaranteed by the U.S. government 106,651 542 — 107,193 Redeemable preferred stock — 1,812 — 1,812 Total fixed maturity securities, available-for-sale $ 106,651 $ 1,073,323 $ 4,228 $ 1,184,202 Equity securities: Preferred stock — 60,740 — 60,740 Common stock 16,674 757 214 17,645 Total equity securities $ 16,674 $ 61,497 $ 214 $ 78,385 Short-term investments $ 1,250 $ 80,716 $ — $ 81,966 |
Schedule of assets measured at fair value on a nonrecurring basis | Assets measured at fair value on a nonrecurring basis are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) March 31, 2019 Bank loan participations held-for-investment $ — $ — $ 4,394 $ 4,394 December 31, 2018 Bank loan participations held-for-investment $ — $ — $ — $ — |
Schedule of carrying value and fair value | The carrying values and fair values of financial instruments are summarized below: March 31, 2019 December 31, 2018 Carrying Fair Value Carrying Fair Value (in thousands) Assets Fixed maturity securities, available-for-sale $ 1,250,926 $ 1,250,926 $ 1,184,202 $ 1,184,202 Equity securities 84,405 84,405 78,385 78,385 Bank loan participations held-for-investment 263,318 257,298 260,972 250,697 Cash and cash equivalents 132,552 132,552 172,457 172,457 Short-term investments 92,134 92,134 81,966 81,966 Other invested assets – notes receivable 13,250 18,701 13,250 18,687 Liabilities Senior debt 98,300 100,038 118,300 118,317 Junior subordinated debt 104,055 120,815 104,055 117,057 |
Capital Stock and Equity Awar_2
Capital Stock and Equity Awards (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of dividends | The Company declared the following dividends during the first three months of 2019 and 2018: Date of Declaration Dividend per Common Share Payable to Shareholders of Record on Payment Date Total Amount 2019 February 20, 2019 $ 0.30 March 11, 2019 March 29, 2019 $ 9.1 million 2018 February 22, 2018 $ 0.30 March 12, 2018 March 30, 2018 $ 9.0 million |
Schedule of summary of option activity | The following table summarizes option activity: Three Months Ended March 31, 2019 2018 Shares Weighted- Shares Weighted- Outstanding: Beginning of period 1,115,324 $ 29.02 1,479,236 $ 27.81 Granted — $ — — $ — Exercised (125,349 ) $ 29.47 (142,129 ) $ 20.14 Forfeited (3,759 ) $ 36.37 — $ — End of period 986,216 $ 28.94 1,337,107 $ 28.63 Exercisable, end of period 926,166 $ 28.07 983,508 $ 26.06 |
Schedule of summary of RSU activity | The following table summarizes RSU activity: Three Months Ended March 31, 2019 2018 Shares Weighted- Shares Weighted- Unvested, beginning of period 300,142 $ 39.22 178,882 $ 37.93 Granted 167,295 $ 42.07 214,907 $ 39.81 Vested (109,545 ) $ 39.93 (62,714 ) $ 40.90 Forfeited (1,398 ) $ 40.26 — $ — Unvested, end of period 356,494 $ 40.33 331,075 $ 38.59 |
Schedule of summary of amount of expense and related tax benefit | Share based compensation expense is recognized on a straight line basis over the vesting period. The amount of expense and related tax benefit is summarized below: Three Months Ended 2019 2018 (in thousands) Share based compensation expense $ 1,674 $ 1,455 U.S. tax benefit on share based compensation expense 200 173 |
Accounting Policies - Narrative
Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2019USD ($)company | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Jan. 01, 2019USD ($) | Jan. 01, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Number of insurance companies based in the United States | company | 5 | ||||
Investment in variable interest entities | $ 30,500 | $ 29,800 | |||
Effective U.S. federal income tax expense rate | 10.80% | 8.70% | |||
Assets | $ 3,299,251 | $ 2,862,010 | $ 3,136,776 | ||
Liabilities | 2,544,954 | $ 2,427,535 | |||
Net income | 22,728 | 15,633 | |||
Right-of-use assets | 16,400 | ||||
Total operating lease liabilities | 17,308 | ||||
Operating lease costs | $ 1,000 | 1,000 | |||
Weighted average discount rate (as a percentage) | 4.30% | ||||
Weighted average remaining lease term (in years) | 6 years | ||||
ASU 2016-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative effect of adoption of ASU | $ (8,280) | ||||
Assets | (22,600) | ||||
Liabilities | (30,900) | ||||
Right-of-use assets | 17,200 | ||||
Total operating lease liabilities | 17,800 | ||||
ASU 2016-01 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative effect of adoption of ASU | $ 0 | ||||
ASU 2018-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative effect of adoption of ASU | 0 | ||||
AOCI | ASU 2018-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative effect of adoption of ASU | (711) | ||||
Retained Earnings | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Net income | $ 22,728 | $ 15,633 | |||
Retained Earnings | ASU 2016-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative effect of adoption of ASU | $ (8,280) | ||||
Retained Earnings | ASU 2016-01 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative effect of adoption of ASU | (4,682) | ||||
Retained Earnings | ASU 2018-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative effect of adoption of ASU | $ 711 |
Accounting Policies - Summary o
Accounting Policies - Summary of Operating Lease Maturities (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Accounting Policies [Abstract] | |
2019 | $ 2,863 |
2020 | 3,622 |
2021 | 3,432 |
2022 | 2,639 |
2023 | 2,376 |
Thereafter | 4,706 |
Total lease payments | 19,638 |
Less imputed interest | (2,330) |
Total operating lease liabilities | $ 17,308 |
Investments - Narrative (Detail
Investments - Narrative (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019USD ($)securityissuerloan | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Gain (Loss) on Securities [Line Items] | ||||
Number of issuers | issuer | 163 | |||
Total fair value | $ 554,873 | |||
Gross unrealized losses | 8,267 | |||
Fixed maturity securities, available-for-sale | $ 1,250,926 | $ 1,184,202 | ||
Number of impaired loans | loan | 2 | |||
Carrying value of impaired loans | $ 4,400 | |||
Unpaid principal on impaired loans | 5,900 | |||
Allowance for credit losses on impaired loans | 1,500 | $ 300 | $ 3,200 | |
Carrying value of loan | 263,318 | 260,972 | ||
Average recorded investment in impaired bank loans | 2,200 | 3,400 | ||
Investment income during period loans were impaired | 0 | 20 | ||
Net realized gain (loss) on changes in fair value of impaired bank loans | (1,500) | 3 | ||
Net realized and unrealized gains (losses) on investments | 1,625 | (810) | ||
Carrying value of collateralized loan obligation held | 3,800 | |||
Fixed maturity securities | ||||
Gain (Loss) on Securities [Line Items] | ||||
Total fair value | 852,854 | |||
Gross unrealized losses | 21,267 | |||
Fixed maturity securities, available-for-sale | $ 1,250,926 | $ 1,184,202 | ||
Number of impaired fixed maturities | security | 3 | |||
Impairment losses | $ 271 | |||
Puerto Rico loan | ||||
Gain (Loss) on Securities [Line Items] | ||||
Unpaid principal on impaired loans | 807 | |||
Carrying value of loan | $ 0 | |||
Net realized and unrealized gains (losses) on investments | $ 807 | |||
BBB- or better | Fixed maturity securities | ||||
Gain (Loss) on Securities [Line Items] | ||||
Percentage of available for sale securities | 99.50% | |||
Below BBB- | ||||
Gain (Loss) on Securities [Line Items] | ||||
Fixed maturity securities, available-for-sale | $ 6,800 | |||
Aggregate net unrealized gain (loss) | $ 23 |
Investments - Schedule of Avail
Investments - Schedule of Available-for-Sale Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Total fixed maturity securities, Cost or Amortized Cost | $ 1,244,427 | $ 1,199,409 |
Fixed maturity securities, available-for-sale | 1,250,926 | 1,184,202 |
Fixed maturity securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total fixed maturity securities, Cost or Amortized Cost | 1,244,427 | 1,199,409 |
Total investments available-for-sale, Gross Unrealized Gains | 14,766 | 6,060 |
Total investments available-for-sale, Gross Unrealized Losses | (8,267) | (21,267) |
Fixed maturity securities, available-for-sale | 1,250,926 | 1,184,202 |
State and municipal | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total fixed maturity securities, Cost or Amortized Cost | 136,472 | 147,160 |
Total investments available-for-sale, Gross Unrealized Gains | 5,185 | 3,422 |
Total investments available-for-sale, Gross Unrealized Losses | (315) | (1,287) |
Fixed maturity securities, available-for-sale | 141,342 | 149,295 |
Residential mortgage-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total fixed maturity securities, Cost or Amortized Cost | 225,702 | 208,869 |
Total investments available-for-sale, Gross Unrealized Gains | 1,257 | 577 |
Total investments available-for-sale, Gross Unrealized Losses | (3,415) | (5,337) |
Fixed maturity securities, available-for-sale | 223,544 | 204,109 |
Corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total fixed maturity securities, Cost or Amortized Cost | 548,772 | 534,024 |
Total investments available-for-sale, Gross Unrealized Gains | 6,482 | 1,516 |
Total investments available-for-sale, Gross Unrealized Losses | (2,760) | (10,772) |
Fixed maturity securities, available-for-sale | 552,494 | 524,768 |
Commercial mortgage and asset-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total fixed maturity securities, Cost or Amortized Cost | 204,612 | 199,528 |
Total investments available-for-sale, Gross Unrealized Gains | 1,233 | 310 |
Total investments available-for-sale, Gross Unrealized Losses | (1,328) | (2,813) |
Fixed maturity securities, available-for-sale | 204,517 | 197,025 |
U.S. Treasury securities and obligations guaranteed by the U.S. government | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total fixed maturity securities, Cost or Amortized Cost | 126,844 | 107,803 |
Total investments available-for-sale, Gross Unrealized Gains | 600 | 235 |
Total investments available-for-sale, Gross Unrealized Losses | (449) | (845) |
Fixed maturity securities, available-for-sale | 126,995 | 107,193 |
Redeemable preferred stock | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total fixed maturity securities, Cost or Amortized Cost | 2,025 | 2,025 |
Total investments available-for-sale, Gross Unrealized Gains | 9 | 0 |
Total investments available-for-sale, Gross Unrealized Losses | 0 | (213) |
Fixed maturity securities, available-for-sale | $ 2,034 | $ 1,812 |
Investments - Schedule of Contr
Investments - Schedule of Contract Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Cost or Amortized Cost | ||
One year or less | $ 39,494 | |
After one year through five years | 438,067 | |
After five years through ten years | 229,483 | |
After ten years | 105,044 | |
Residential mortgage-backed | 225,702 | |
Commercial mortgage and asset-backed | 204,612 | |
Redeemable preferred stock | 2,025 | |
Total fixed maturity securities, Cost or Amortized Cost | 1,244,427 | $ 1,199,409 |
Fair Value | ||
One year or less | 39,447 | |
After one year through five years | 440,339 | |
After five years through ten years | 231,221 | |
After ten years | 109,824 | |
Residential mortgage-backed | 223,544 | |
Commercial mortgage and asset-backed | 204,517 | |
Redeemable preferred stock | 2,034 | |
Total investments available-for-sale, Fair Value | $ 1,250,926 | $ 1,184,202 |
Investments - Schedule of Gross
Investments - Schedule of Gross Unrealized Losses and Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, fair value | $ 554,873 | |
Fixed maturity securities, gross unrealized losses | (8,267) | |
Fixed maturity securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, less than 12 months, fair value | 83,063 | $ 438,150 |
Fixed maturity securities, less than 12 months, gross unrealized losses | (616) | (7,609) |
Fixed maturity securities, 12 months or more, fair value | 471,810 | 414,704 |
Fixed maturity securities, 12 months or more, gross unrealized losses | (7,651) | (13,658) |
Fixed maturity securities, fair value | 852,854 | |
Fixed maturity securities, gross unrealized losses | (21,267) | |
State and municipal | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, less than 12 months, fair value | 0 | 19,733 |
Fixed maturity securities, less than 12 months, gross unrealized losses | 0 | (284) |
Fixed maturity securities, 12 months or more, fair value | 29,279 | 47,018 |
Fixed maturity securities, 12 months or more, gross unrealized losses | (315) | (1,003) |
Fixed maturity securities, fair value | 29,279 | 66,751 |
Fixed maturity securities, gross unrealized losses | (315) | (1,287) |
Residential mortgage-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, less than 12 months, fair value | 6,153 | 49,180 |
Fixed maturity securities, less than 12 months, gross unrealized losses | (3) | (743) |
Fixed maturity securities, 12 months or more, fair value | 131,841 | 105,778 |
Fixed maturity securities, 12 months or more, gross unrealized losses | (3,412) | (4,594) |
Fixed maturity securities, fair value | 137,994 | 154,958 |
Fixed maturity securities, gross unrealized losses | (3,415) | (5,337) |
Corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, less than 12 months, fair value | 8,471 | 243,384 |
Fixed maturity securities, less than 12 months, gross unrealized losses | (41) | (5,089) |
Fixed maturity securities, 12 months or more, fair value | 199,649 | 155,902 |
Fixed maturity securities, 12 months or more, gross unrealized losses | (2,719) | (5,683) |
Fixed maturity securities, fair value | 208,120 | 399,286 |
Fixed maturity securities, gross unrealized losses | (2,760) | (10,772) |
Commercial mortgage and asset-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, less than 12 months, fair value | 61,747 | 106,423 |
Fixed maturity securities, less than 12 months, gross unrealized losses | (568) | (1,229) |
Fixed maturity securities, 12 months or more, fair value | 65,718 | 51,805 |
Fixed maturity securities, 12 months or more, gross unrealized losses | (760) | (1,584) |
Fixed maturity securities, fair value | 127,465 | 158,228 |
Fixed maturity securities, gross unrealized losses | (1,328) | (2,813) |
U.S. Treasury securities and obligations guaranteed by the U.S. government | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, less than 12 months, fair value | 6,692 | 17,618 |
Fixed maturity securities, less than 12 months, gross unrealized losses | (4) | (51) |
Fixed maturity securities, 12 months or more, fair value | 45,323 | 54,201 |
Fixed maturity securities, 12 months or more, gross unrealized losses | (445) | (794) |
Fixed maturity securities, fair value | 52,015 | 71,819 |
Fixed maturity securities, gross unrealized losses | $ (449) | (845) |
Redeemable preferred stock | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, less than 12 months, fair value | 1,812 | |
Fixed maturity securities, less than 12 months, gross unrealized losses | (213) | |
Fixed maturity securities, 12 months or more, fair value | 0 | |
Fixed maturity securities, 12 months or more, gross unrealized losses | 0 | |
Fixed maturity securities, fair value | 1,812 | |
Fixed maturity securities, gross unrealized losses | $ (213) |
Investments - Summary of Realiz
Investments - Summary of Realized Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Investments [Abstract] | ||
Fixed maturity securities, gross realized gains | $ 177 | $ 22 |
Fixed maturity securities, gross realized losses | (405) | (223) |
Fixed maturity securities | (228) | (201) |
Bank loan participations, gross realized gains | 13 | 1,220 |
Bank loan participations, gross realized losses | (1,692) | (100) |
Bank loan participations | (1,679) | 1,120 |
Equity securities, gross realized gain | 0 | 0 |
Equity securities, gross realized losses | (18) | (15) |
Equity securities, changes in fair values of equity securities | 3,549 | (1,710) |
Equity securities | 3,531 | (1,725) |
Short-term investments and other, gross realized gains | 1 | 0 |
Short-term investments and other, gross realized losses | 0 | (4) |
Short-term investments and other | 1 | (4) |
Total | $ 1,625 | $ (810) |
Investments - Summary of Privat
Investments - Summary of Private Debt and Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Net Investment Income [Line Items] | |||
Total other invested assets | $ 74,465 | $ 72,321 | |
Investment income | 3,404 | $ 1,820 | |
Renewable energy LLCs | |||
Net Investment Income [Line Items] | |||
Total other invested assets | 30,462 | 29,795 | |
Investment income | 921 | 1,211 | |
Renewable energy notes receivable | |||
Net Investment Income [Line Items] | |||
Total other invested assets | 8,750 | 8,750 | |
Investment income | $ 328 | 297 | |
Rate of interest | 15.00% | ||
Interest income | $ 328 | 297 | |
Limited partnerships | |||
Net Investment Income [Line Items] | |||
Total other invested assets | 30,753 | 29,276 | |
Investment income | 2,069 | 226 | |
Bank Holding Companies [Member] | |||
Net Investment Income [Line Items] | |||
Total other invested assets | 4,500 | $ 4,500 | |
Investment income | 86 | 86 | |
Interest income | $ 86 | 86 | |
Bank Holding Company | |||
Net Investment Income [Line Items] | |||
Rate of interest | 7.60% | ||
Investment in private subordinated notes | $ 4,500 | ||
Corporate and other | Limited partnerships | |||
Net Investment Income [Line Items] | |||
Carrying values of limited partnerships held | 3,600 | ||
Investment income (loss) | 481 | (125) | |
Corporate and other | Investment in LLC | |||
Net Investment Income [Line Items] | |||
Cash distributions from LLCs | 300 | 1,200 | |
Excess and Surplus Lines | Limited partnerships | |||
Net Investment Income [Line Items] | |||
Carrying values of limited partnerships held | 27,200 | ||
Investment income (loss) | 1,600 | $ 400 | |
Commitment to Investment In Limited Partnership | $ 625 | ||
Minimum | Corporate and other | Investment in LLC | |||
Net Investment Income [Line Items] | |||
Ownership percentage | 2.60% | ||
Maximum | Corporate and other | Investment in LLC | |||
Net Investment Income [Line Items] | |||
Ownership percentage | 32.20% |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 11, 2007 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 181,831 | $ 181,831 | $ 181,831 | |
James River Group, Inc. | ||||
Business Acquisition [Line Items] | ||||
Percentage of outstanding shares | 100.00% |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Acquired Intangible Assets [Line Items] | ||
Identifiable intangibles not subject to amortization | $ 31,164 | $ 31,164 |
Identifiable intangible assets subject to amortization | ||
Gross Carrying Amount | 11,611 | 11,611 |
Accumulated Amortization | 5,387 | 5,238 |
Total Intangible Assets, Gross | 42,775 | 42,775 |
Trademarks | ||
Acquired Intangible Assets [Line Items] | ||
Identifiable intangibles not subject to amortization | 22,200 | 22,200 |
Insurance licenses and authorities | ||
Acquired Intangible Assets [Line Items] | ||
Identifiable intangibles not subject to amortization | 8,964 | 8,964 |
Broker relationships | ||
Identifiable intangible assets subject to amortization | ||
Gross Carrying Amount | 11,611 | 11,611 |
Accumulated Amortization | $ 5,387 | $ 5,238 |
Life (Years) | 24 years 7 months 6 days |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock options and restricted share units ("RSU's") | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of securities excluded from the calculations of diluted earnings per share | 171,509 | 192,817 |
Earnings Per Share - Basic and
Earnings Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net income to shareholders | $ 22,728 | $ 15,633 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 30,059,398 | 29,764,320 |
Common share equivalents (in shares) | 412,906 | 428,983 |
Diluted (in shares) | 30,472,304 | 30,193,303 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.76 | $ 0.53 |
Common share equivalents (in dollars per share) | (0.01) | (0.01) |
Diluted (in dollars per share) | $ 0.75 | $ 0.52 |
Reserve for Losses and Loss A_3
Reserve for Losses and Loss Adjustment Expenses - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Favorable development on prior year loss reserves | ||
Reserve for losses and loss adjustment expenses | $ (968) | $ 2,610 |
Excess and Surplus Lines | ||
Favorable development on prior year loss reserves | ||
Reserve for losses and loss adjustment expenses | 10 | 1,100 |
Specialty Admitted Insurance | ||
Favorable development on prior year loss reserves | ||
Reserve for losses and loss adjustment expenses | 2,000 | 1,300 |
Casualty Reinsurance | ||
Favorable development on prior year loss reserves | ||
Reserve for losses and loss adjustment expenses | $ (3,000) | $ 176 |
Reserve for Losses and Loss A_4
Reserve for Losses and Loss Adjustment Expenses - Reconciliation of Losses and Loss Adjustment Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) [Abstract] | |||
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period | $ 1,194,088 | $ 989,825 | |
Add: Incurred losses and loss adjustment expenses net of reinsurance: | |||
Current year | 138,959 | 146,382 | |
Prior years | 968 | (2,610) | |
Total incurred losses and loss and adjustment expenses | 139,927 | 143,772 | |
Deduct: Loss and loss adjustment expense payments net of reinsurance: | |||
Current year | 4,679 | 12,177 | |
Prior years | 107,684 | 83,117 | |
Total loss and loss adjustment expense payments | 112,363 | 95,294 | |
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at end of period | 1,221,652 | 1,038,303 | |
Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period | 508,655 | 331,245 | $ 467,371 |
Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period | $ 1,730,307 | $ 1,369,548 | $ 1,661,459 |
Other Comprehensive Income (L_3
Other Comprehensive Income (Loss) - Summary of Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Unrealized gains (losses) arising during the period, before U.S. income taxes | $ 21,478 | $ (19,292) |
U.S. income taxes | (1,447) | 544 |
Unrealized gains (losses) arising during the period, net of U.S. income taxes | 20,031 | (18,748) |
Less reclassification adjustment: | ||
Net realized investment losses | (228) | (201) |
U.S. income taxes | (1) | 0 |
Reclassification adjustment for investment (gains) losses realized in net income | (229) | (201) |
Other comprehensive income (loss) | $ 20,260 | $ (18,547) |
Other Comprehensive Income (L_4
Other Comprehensive Income (Loss) - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Fixed maturity securities | $ (228) | $ (201) |
Bank loan participations | (1,679) | 1,120 |
Equity securities, changes in fair values of equity securities | $ 3,549 | $ (1,710) |
Contingent Liabilities - Narrat
Contingent Liabilities - Narrative (Details) $ in Millions | Mar. 31, 2019USD ($) |
JRG Reinsurance Company, Ltd. | Letter of credit 75 Million | |
Contingent Liabilities [Line Items] | |
Letters of credit facility, amount | $ 75 |
Amount of letters of credit issued | 49.4 |
Assets deposited for securing letters of credit | 61.8 |
JRG Reinsurance Company, Ltd. | Letter of credit 102.5 Million | |
Contingent Liabilities [Line Items] | |
Letters of credit facility, amount | 102.5 |
Amount of letters of credit issued | 68 |
Assets deposited for securing letters of credit | 93.5 |
JRG Reinsurance Company, Ltd. | Letter of credit 100 Million | |
Contingent Liabilities [Line Items] | |
Letters of credit facility, amount | 100 |
Amount of letters of credit issued | 5.3 |
Assets deposited for securing letters of credit | 10.5 |
James River Insurance Co | |
Contingent Liabilities [Line Items] | |
Total amount deposited in trust accounts | 1,156 |
Third-party Reinsureds | JRG Reinsurance Company, Ltd. | |
Contingent Liabilities [Line Items] | |
Total amount deposited in trust accounts | $ 290.1 |
Segment Information - Narrative
Segment Information - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2019USD ($)segment | Mar. 31, 2018USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 4 | |
Fee income in Excess and Surplus Lines segment | $ | $ 2.7 | $ 4.8 |
Segment Information - Summary o
Segment Information - Summary of Segment Results (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Gross written premiums | $ 327,334 | $ 298,116 | |
Net earned premiums | 190,152 | 200,942 | |
Underwriting profit of insurance segments | 15,052 | 14,666 | |
Net investment income | 19,431 | 13,256 | |
Interest expense | 2,808 | 2,522 | |
Segment revenues | 214,127 | 218,344 | |
Segment goodwill | 181,831 | 181,831 | $ 181,831 |
Segment assets | 3,299,251 | 2,862,010 | $ 3,136,776 |
Excess and Surplus Lines | |||
Segment Reporting Information [Line Items] | |||
Gross written premiums | 186,549 | 167,486 | |
Net earned premiums | 141,672 | 129,971 | |
Underwriting profit of insurance segments | 13,102 | 11,299 | |
Net investment income | 5,544 | 3,042 | |
Interest expense | 0 | 0 | |
Segment revenues | 152,437 | 137,327 | |
Segment goodwill | 181,831 | 181,831 | |
Segment assets | 1,013,069 | 909,963 | |
Specialty Admitted Insurance | |||
Segment Reporting Information [Line Items] | |||
Gross written premiums | 102,953 | 87,401 | |
Net earned premiums | 12,360 | 13,340 | |
Underwriting profit of insurance segments | 1,623 | 1,623 | |
Net investment income | 897 | 711 | |
Interest expense | 0 | 0 | |
Segment revenues | 13,736 | 13,955 | |
Segment goodwill | 0 | 0 | |
Segment assets | 706,451 | 495,096 | |
Casualty Reinsurance | |||
Segment Reporting Information [Line Items] | |||
Gross written premiums | 37,832 | 43,229 | |
Net earned premiums | 36,120 | 57,631 | |
Underwriting profit of insurance segments | 327 | 1,744 | |
Net investment income | 11,172 | 8,017 | |
Interest expense | 0 | 0 | |
Segment revenues | 46,010 | 65,526 | |
Segment goodwill | 0 | 0 | |
Segment assets | 1,517,142 | 1,368,872 | |
Corporate and other | |||
Segment Reporting Information [Line Items] | |||
Gross written premiums | 0 | 0 | |
Net earned premiums | 0 | 0 | |
Underwriting profit of insurance segments | 0 | 0 | |
Net investment income | 1,818 | 1,486 | |
Interest expense | 2,808 | 2,522 | |
Segment revenues | 1,944 | 1,536 | |
Segment goodwill | 0 | 0 | |
Segment assets | $ 62,589 | $ 88,079 |
Segment Information - Reconcili
Segment Information - Reconciliation of Operating Segments by Individual Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Total underwriting profit of insurance segments | $ 15,052 | $ 14,666 |
Other operating expenses of the Corporate and Other segment | (7,906) | (7,431) |
Underwriting profit | 7,146 | 7,235 |
Net investment income | 19,431 | 13,256 |
Net realized and unrealized gains (losses) on investments | 1,625 | (810) |
Amortization of intangible assets | (149) | (149) |
Other income and expenses | 246 | 104 |
Interest expense | (2,808) | (2,522) |
Income before taxes | 25,491 | 17,114 |
Excess and Surplus Lines | ||
Segment Reporting Information [Line Items] | ||
Total underwriting profit of insurance segments | 13,102 | 11,299 |
Net investment income | 5,544 | 3,042 |
Interest expense | 0 | 0 |
Specialty Admitted Insurance | ||
Segment Reporting Information [Line Items] | ||
Total underwriting profit of insurance segments | 1,623 | 1,623 |
Net investment income | 897 | 711 |
Interest expense | 0 | 0 |
Casualty Reinsurance | ||
Segment Reporting Information [Line Items] | ||
Total underwriting profit of insurance segments | 327 | 1,744 |
Net investment income | 11,172 | 8,017 |
Interest expense | 0 | 0 |
Corporate and other | ||
Segment Reporting Information [Line Items] | ||
Total underwriting profit of insurance segments | 0 | 0 |
Net investment income | 1,818 | 1,486 |
Interest expense | $ (2,808) | $ (2,522) |
Other Operating Expenses and _3
Other Operating Expenses and Other Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Other Operating Expenses And Other Expenses [Abstract] | ||
Amortization of policy acquisition costs | $ 18,621 | $ 30,198 |
Other underwriting expenses of the operating segments | 19,225 | 17,154 |
Other operating expenses of the Corporate and Other segment | 7,906 | 7,431 |
Total | $ 45,752 | $ 54,783 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Total fixed maturity securities, available-for-sale | $ 1,250,926 | $ 1,184,202 | |
Equity securities, at fair value (cost: 2019 – $79,623; 2018 – $77,152) | 84,405 | 78,385 | |
Principal payment received | 39,215 | $ 45,245 | |
Market approach | Level 3 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Total fixed maturity securities, available-for-sale | 4,200 | ||
Market approach | Level 2 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Principal payment received | 456 | ||
Nonrecurring basis | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Impaired bank loan participations held for investment | 4,394 | 0 | |
Nonrecurring basis | Level 3 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Impaired bank loan participations held for investment | 4,394 | 0 | |
Nonrecurring basis | Level 2 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Impaired bank loan participations held for investment | 0 | 0 | |
Common stock | Recurring basis | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Equity securities, at fair value (cost: 2019 – $79,623; 2018 – $77,152) | 19,257 | 17,645 | |
Common stock | Recurring basis | Level 3 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Equity securities, at fair value (cost: 2019 – $79,623; 2018 – $77,152) | 177 | 214 | |
Common stock | Recurring basis | Level 2 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Equity securities, at fair value (cost: 2019 – $79,623; 2018 – $77,152) | $ 757 | $ 757 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Assets Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | $ 1,250,926 | $ 1,184,202 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 1,250,926 | 1,184,202 |
Equity securities: | ||
Total equity securities | 84,405 | 78,385 |
Short-term investments | 92,134 | 81,966 |
Fixed maturity securities | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 1,250,926 | 1,184,202 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 1,250,926 | 1,184,202 |
State and municipal | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 141,342 | 149,295 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 141,342 | 149,295 |
Residential mortgage-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 223,544 | 204,109 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 223,544 | 204,109 |
Corporate | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 552,494 | 524,768 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 552,494 | 524,768 |
Commercial mortgage and asset-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 204,517 | 197,025 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 204,517 | 197,025 |
U.S. Treasury securities and obligations guaranteed by the U.S. government | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 126,995 | 107,193 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 126,995 | 107,193 |
Redeemable preferred stock | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 2,034 | 1,812 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 2,034 | 1,812 |
Recurring basis | ||
Equity securities: | ||
Short-term investments | 92,134 | 81,966 |
Recurring basis | Fixed maturity securities | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 1,250,926 | 1,184,202 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 1,250,926 | 1,184,202 |
Recurring basis | State and municipal | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 141,342 | 149,295 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 141,342 | 149,295 |
Recurring basis | Residential mortgage-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 223,544 | 204,109 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 223,544 | 204,109 |
Recurring basis | Corporate | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 552,494 | 524,768 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 552,494 | 524,768 |
Recurring basis | Commercial mortgage and asset-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 204,517 | 197,025 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 204,517 | 197,025 |
Recurring basis | U.S. Treasury securities and obligations guaranteed by the U.S. government | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 126,995 | 107,193 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 126,995 | 107,193 |
Recurring basis | Redeemable preferred stock | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 2,034 | 1,812 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 2,034 | 1,812 |
Recurring basis | Equity securities | ||
Equity securities: | ||
Total equity securities | 84,405 | 78,385 |
Recurring basis | Preferred stock | ||
Equity securities: | ||
Total equity securities | 65,148 | 60,740 |
Recurring basis | Common stock | ||
Equity securities: | ||
Total equity securities | 19,257 | 17,645 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | ||
Equity securities: | ||
Short-term investments | 0 | 1,250 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Fixed maturity securities | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 126,472 | 106,651 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 126,472 | 106,651 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | State and municipal | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 0 | 0 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Residential mortgage-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 0 | 0 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Corporate | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 0 | 0 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Commercial mortgage and asset-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 0 | 0 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | U.S. Treasury securities and obligations guaranteed by the U.S. government | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 126,472 | 106,651 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 126,472 | 106,651 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Redeemable preferred stock | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 0 | 0 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Equity securities | ||
Equity securities: | ||
Total equity securities | 18,323 | 16,674 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Preferred stock | ||
Equity securities: | ||
Total equity securities | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Common stock | ||
Equity securities: | ||
Total equity securities | 18,323 | 16,674 |
Recurring basis | Significant Other Observable Inputs Level 2 | ||
Equity securities: | ||
Short-term investments | 92,134 | 80,716 |
Recurring basis | Significant Other Observable Inputs Level 2 | Fixed maturity securities | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 1,124,454 | 1,073,323 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 1,124,454 | 1,073,323 |
Recurring basis | Significant Other Observable Inputs Level 2 | State and municipal | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 141,342 | 149,295 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 141,342 | 149,295 |
Recurring basis | Significant Other Observable Inputs Level 2 | Residential mortgage-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 223,544 | 204,109 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 223,544 | 204,109 |
Recurring basis | Significant Other Observable Inputs Level 2 | Corporate | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 552,494 | 524,768 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 552,494 | 524,768 |
Recurring basis | Significant Other Observable Inputs Level 2 | Commercial mortgage and asset-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 204,517 | 192,797 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 204,517 | 192,797 |
Recurring basis | Significant Other Observable Inputs Level 2 | U.S. Treasury securities and obligations guaranteed by the U.S. government | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 523 | 542 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 523 | 542 |
Recurring basis | Significant Other Observable Inputs Level 2 | Redeemable preferred stock | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 2,034 | 1,812 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 2,034 | 1,812 |
Recurring basis | Significant Other Observable Inputs Level 2 | Equity securities | ||
Equity securities: | ||
Total equity securities | 65,905 | 61,497 |
Recurring basis | Significant Other Observable Inputs Level 2 | Preferred stock | ||
Equity securities: | ||
Total equity securities | 65,148 | 60,740 |
Recurring basis | Significant Other Observable Inputs Level 2 | Common stock | ||
Equity securities: | ||
Total equity securities | 757 | 757 |
Recurring basis | Significant Unobservable Inputs Level 3 | ||
Equity securities: | ||
Short-term investments | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Fixed maturity securities | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 0 | 4,228 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 0 | 4,228 |
Recurring basis | Significant Unobservable Inputs Level 3 | State and municipal | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 0 | 0 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Residential mortgage-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 0 | 0 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Corporate | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 0 | 0 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Commercial mortgage and asset-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 0 | 4,228 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 0 | 4,228 |
Recurring basis | Significant Unobservable Inputs Level 3 | U.S. Treasury securities and obligations guaranteed by the U.S. government | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 0 | 0 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Redeemable preferred stock | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 0 | 0 |
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,244,427; 2018 – $1,199,409) | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Equity securities | ||
Equity securities: | ||
Total equity securities | 177 | 214 |
Recurring basis | Significant Unobservable Inputs Level 3 | Preferred stock | ||
Equity securities: | ||
Total equity securities | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Common stock | ||
Equity securities: | ||
Total equity securities | $ 177 | $ 214 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Assets Fair Value on a Nonrecurring Basis (Details) - Nonrecurring basis - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank loan participations held-for-investment | $ 4,394 | $ 0 |
Quoted Prices in Active Markets for Identical Assets Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank loan participations held-for-investment | 0 | 0 |
Significant Other Observable Inputs Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank loan participations held-for-investment | 0 | 0 |
Significant Unobservable Inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank loan participations held-for-investment | $ 4,394 | $ 0 |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Fixed maturity securities, available-for-sale | $ 1,250,926 | $ 1,184,202 |
Equity securities | 84,405 | 78,385 |
Bank loan participations held-for-investment | 263,318 | 260,972 |
Cash and cash equivalents | 132,552 | 172,457 |
Short-term investments | 92,134 | 81,966 |
Liabilities | ||
Senior debt | 98,300 | 118,300 |
Junior subordinated debt | 104,055 | 104,055 |
Carrying Value | ||
Assets | ||
Fixed maturity securities, available-for-sale | 1,250,926 | 1,184,202 |
Equity securities | 84,405 | 78,385 |
Bank loan participations held-for-investment | 263,318 | 260,972 |
Cash and cash equivalents | 132,552 | 172,457 |
Short-term investments | 92,134 | 81,966 |
Other invested assets – notes receivable | 13,250 | 13,250 |
Liabilities | ||
Senior debt | 98,300 | 118,300 |
Junior subordinated debt | 104,055 | 104,055 |
Fair Value | ||
Assets | ||
Fixed maturity securities, available-for-sale | 1,250,926 | 1,184,202 |
Equity securities | 84,405 | 78,385 |
Bank loan participations held-for-investment | 257,298 | 250,697 |
Cash and cash equivalents | 132,552 | 172,457 |
Short-term investments | 92,134 | 81,966 |
Other invested assets – notes receivable | 18,701 | 18,687 |
Liabilities | ||
Senior debt | 100,038 | 118,317 |
Junior subordinated debt | $ 120,815 | $ 117,057 |
Capital Stock and Equity Awar_3
Capital Stock and Equity Awards - Commons Shares (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, shares outstanding | 30,162,045 | 29,988,460 | ||
Common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common shares issued during period | 173,585 | |||
Common stock, shares outstanding | 30,162,045 | 29,988,460 | 29,866,705 | 29,696,682 |
Options | Common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common shares issued during period | 98,975 | |||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock unit dividend equivalents | $ 107 | $ 99 | ||
Dividends payable | $ 457 | $ 557 | ||
RSUs | Common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common shares issued during period | 74,610 |
Capital Stock and Equity Awar_4
Capital Stock and Equity Awards - Schedule of Dividends (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 29, 2019 | Feb. 20, 2019 | Mar. 30, 2018 | Feb. 22, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
Stockholders' Equity Note [Abstract] | ||||||
Dividend declared per share (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | ||
Total Amount | $ 9.1 | $ 9 |
Capital Stock and Equity Awar_5
Capital Stock and Equity Awards - Equity Incentive Plans (Details) | Mar. 31, 2019shares |
2014 LTIP | Non-qualified stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum number of shares available for issuance | 4,171,150 |
Number of shares available for grant | 1,575,796 |
2014 Director Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum number of shares available for issuance | 50,000 |
Number of shares available for grant | 8,594 |
Capital Stock and Equity Awar_6
Capital Stock and Equity Awards - Summary of Option Activity (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Weighted- Average Exercise Price | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 3 years 4 months 24 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 3 years 3 months 18 days | |
Options | ||
Shares | ||
Beginning of period (in shares) | 1,115,324 | 1,479,236 |
Granted (in shares) | 0 | 0 |
Exercised (in shares) | (125,349) | (142,129) |
Forfeited (in shares) | (3,759) | 0 |
End of period (in shares) | 986,216 | 1,337,107 |
Exercisable, end of period (in shares) | 926,166 | 983,508 |
Weighted- Average Exercise Price | ||
Beginning of period (in dollars per share) | $ 29.02 | $ 27.81 |
Granted (in dollars per share) | 0 | 0 |
Exercised (in dollars per share) | 29.47 | 20.14 |
Forfeited (in dollars per share) | 36.37 | 0 |
End of period (in dollars per share) | 28.94 | 28.63 |
Exercisable, end of period (in dollars per share) | $ 28.07 | $ 26.06 |
Vesting period (in years) | 7 years | |
Minimum | Options | ||
Weighted- Average Exercise Price | ||
Vesting period (in years) | 2 years | |
Maximum | Options | ||
Weighted- Average Exercise Price | ||
Vesting period (in years) | 4 years |
Capital Stock and Equity Awar_7
Capital Stock and Equity Awards - Summary of RSU Activity (Details) - RSUs - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Shares | ||
Unvested, beginning of period (in shares) | 300,142 | 178,882 |
Granted (in shares) | 167,295 | 214,907 |
Vested (in shares) | (109,545) | (62,714) |
Forfeited (in shares) | (1,398) | 0 |
Unvested, end of period (in shares) | 356,494 | 331,075 |
Shares | ||
Unvested, beginning of period (in dollars per share) | $ 39.22 | $ 37.93 |
Granted (in dollars per share) | 42.07 | 39.81 |
Vested (in dollars per share) | 39.93 | 40.90 |
Forfeited (in dollars per share) | 40.26 | 0 |
Unvested, end of period (in dollars per share) | $ 40.33 | $ 38.59 |
Vesting period (in years) | 3 years | |
Non-employee directors | ||
Shares | ||
Vesting period (in years) | 1 year | |
Minimum | ||
Shares | ||
Vesting period (in years) | 1 year | |
Maximum | ||
Shares | ||
Vesting period (in years) | 5 years |
Capital Stock and Equity Awar_8
Capital Stock and Equity Awards - Summary of Share Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | ||
Share based compensation expense | $ 1,674 | $ 1,455 |
U.S. tax benefit on share based compensation expense | $ 200 | $ 173 |
Capital Stock and Equity Awar_9
Capital Stock and Equity Awards - Compensation Expense (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Equity [Abstract] | |
Unrecognized share based compensation expense | $ 13.7 |
Weighted-average period of unrecognized share based compensation expense (in years) | 2 years 2 months 12 days |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Jun. 28, 2019 | Jun. 10, 2019 | Apr. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Subsequent event | |||||
Subsequent Event [Line Items] | |||||
Cash dividend declared (in dollars per share) | $ 0.30 | ||||
Dividends payable, date to be paid | Jun. 28, 2019 | ||||
Dividend payable, record date | Jun. 10, 2019 | ||||
RSUs | |||||
Subsequent Event [Line Items] | |||||
Shares awarded | 167,295 | 214,907 | |||
Granted (in dollars per share) | $ 42.07 | $ 39.81 | |||
Vesting period (in years) | 3 years | ||||
RSUs | Subsequent event | |||||
Subsequent Event [Line Items] | |||||
Shares awarded | 11,261 | ||||
Granted (in dollars per share) | $ 42.22 | ||||
Vesting period (in years) | 3 years | ||||
Non-employee directors | RSUs | |||||
Subsequent Event [Line Items] | |||||
Vesting period (in years) | 1 year | ||||
Non-Employee Director Plan | Non-employee directors | Subsequent event | |||||
Subsequent Event [Line Items] | |||||
Increase in number of common shares authorized for issuance under plan (in shares)) | 100,000 |
Uncategorized Items - jrvr-2019
Label | Element | Value |
Accounting Standards Update 2016-01 [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (4,682,000) |
Accounting Standards Update 2018-02 [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 711,000 |