Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-36777 | |
Entity Registrant Name | JAMES RIVER GROUP HOLDINGS, LTD. | |
Entity Incorporation, State or Country Code | D0 | |
Entity Tax Identification Number | 98-0585280 | |
Entity Address, Address Line Three | Wellesley House | |
Entity Address, Address Line Two | 2nd Floor | |
Entity Address, Address Line One | 90 Pitts Bay Road | |
Entity Address, City or Town | Pembroke | |
Entity Address, Postal Zip Code | HM08 | |
Entity Address, Country | BM | |
City Area Code | 441 | |
Local Phone Number | 278-4580 | |
Title of 12(b) Security | Common Shares, par value $0.0002 per share | |
Trading Symbol | JRVR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 30,774,930 | |
Entity Central Index Key | 0001620459 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Invested assets: | ||
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2021 – $1,755,733; 2020 – $1,690,890) | $ 1,800,151 | $ 1,783,642 |
Equity securities, at fair value (cost: 2021 – $81,855; 2020 – $81,698) | 90,877 | 88,975 |
Bank loan participations, at fair value | 160,880 | 147,604 |
Short-term investments | 51,198 | 130,289 |
Other invested assets | 55,863 | 46,548 |
Total invested assets | 2,158,969 | 2,197,058 |
Cash and cash equivalents | 183,491 | 162,260 |
Restricted cash equivalents | 751,668 | 859,920 |
Accrued investment income | 11,634 | 10,980 |
Premiums receivable and agents’ balances, net | 391,982 | 369,577 |
Reinsurance recoverable on unpaid losses, net | 878,732 | 805,684 |
Reinsurance recoverable on paid losses | 42,566 | 46,118 |
Prepaid reinsurance premiums | 273,116 | 243,741 |
Deferred policy acquisition costs | 63,606 | 62,953 |
Intangible assets, net | 36,311 | 36,402 |
Goodwill | 181,831 | 181,831 |
Other assets | 135,801 | 86,548 |
Total assets | 5,109,707 | 5,063,072 |
Liabilities: | ||
Reserve for losses and loss adjustment expenses | 2,413,846 | 2,192,080 |
Unearned premiums | 674,343 | 630,371 |
Payables to reinsurers | 130,593 | 110,431 |
Funds held | 751,668 | 859,920 |
Senior debt | 262,300 | 262,300 |
Junior subordinated debt | 104,055 | 104,055 |
Accrued expenses | 52,351 | 55,989 |
Other liabilities | 80,923 | 52,318 |
Total liabilities | 4,470,079 | 4,267,464 |
Commitments and contingent liabilities | 0 | 0 |
Shareholders’ equity: | ||
Common Shares – 2021 and 2020: $0.0002 par value; 200,000,000 shares authorized; 30,774,930 and 30,649,261 shares issued and outstanding, respectively | 6 | 6 |
Preferred Shares – 2021 and 2020: $0.00125 par value; 20,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 663,987 | 664,476 |
Retained (deficit) earnings | (63,576) | 49,227 |
Accumulated other comprehensive income | 39,211 | 81,899 |
Total shareholders’ equity | 639,628 | 795,608 |
Total liabilities and shareholders’ equity | $ 5,109,707 | $ 5,063,072 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Fixed maturity securities, available-for-sale, at amortized cost | $ 1,755,733 | $ 1,690,890 |
Equity securities, at cost | $ 81,855 | $ 81,698 |
Common stock, par value (in dollars per share) | $ 0.0002 | $ 0.0002 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 30,774,930 | 30,649,261 |
Common stock, shares outstanding (in shares) | 30,774,930 | 30,649,261 |
Preferred stock, par value (in dollars per share) | $ 0.00125 | $ 0.00125 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues | ||
Gross written premiums | $ 373,255,000 | $ 283,841,000 |
Ceded written premiums | (198,656,000) | (149,187,000) |
Net written premiums | 174,599,000 | 134,654,000 |
Change in net unearned premiums | (14,006,000) | 11,264,000 |
Net earned premiums | 160,593,000 | 145,918,000 |
Net investment income | 15,089,000 | 20,836,000 |
Net realized and unrealized gains (losses) on investments | 6,272,000 | (58,407,000) |
Other income | 1,026,000 | 1,937,000 |
Total revenues | 182,980,000 | 110,284,000 |
Expenses | ||
Losses and loss adjustment expenses | 273,500,000 | 96,856,000 |
Other operating expenses | 47,381,000 | 51,621,000 |
Other expenses | 621,000 | 0 |
Interest expense | 2,216,000 | 2,876,000 |
Amortization of intangible assets | 91,000 | 149,000 |
Total expenses | 323,809,000 | 151,502,000 |
Loss before taxes | (140,829,000) | (41,218,000) |
Income tax benefit | (37,369,000) | (4,403,000) |
Net loss | (103,460,000) | (36,815,000) |
Other comprehensive loss: | ||
Net unrealized losses, net of taxes of $(5,647) in 2021 and $(1,391) in 2020 | (42,688,000) | (3,919,000) |
Total comprehensive loss | $ (146,148,000) | $ (40,734,000) |
Per share data: | ||
Basic loss per share (in dollars per share) | $ (3.37) | $ (1.21) |
Diluted loss per share (in dollars per share) | (3.37) | (1.21) |
Dividend declared per share (in dollars per share) | $ 0.30 | $ 0.30 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 30,713,986 | 30,476,307 |
Diluted (in shares) | 30,713,986 | 30,476,307 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Tax on net unrealized gains (losses) | $ (5,647) | $ (1,391) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Shares | Preferred Shares | Additional Paid-in Capital | Retained Earnings (Deficit) | Retained Earnings (Deficit)Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income |
Balance (in shares) at Dec. 31, 2019 | 30,424,391 | |||||||
Balance at Dec. 31, 2019 | $ 778,581 | $ 6 | $ 0 | $ 657,875 | $ 89,586 | $ 31,114 | ||
Balance (ASU 2019-05) at Dec. 31, 2019 | $ (7,827) | $ (7,827) | ||||||
Balance (ASU 2016-13) at Dec. 31, 2019 | $ (265) | $ (265) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (36,815) | (36,815) | ||||||
Other comprehensive loss | (3,919) | (3,919) | ||||||
Dividends | (9,267) | (9,267) | ||||||
Vesting of RSUs (in shares) | 96,037 | |||||||
Vesting of RSUs | (2,038) | (2,038) | ||||||
Compensation expense under share incentive plans | 1,867 | 1,867 | ||||||
Balance (in shares) at Mar. 31, 2020 | 30,520,428 | |||||||
Balance at Mar. 31, 2020 | $ 720,317 | $ 6 | 0 | 657,704 | 35,412 | 27,195 | ||
Balance (in shares) at Dec. 31, 2020 | 30,649,261 | 30,649,261 | ||||||
Balance at Dec. 31, 2020 | $ 795,608 | $ 6 | 0 | 664,476 | 49,227 | 81,899 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (103,460) | (103,460) | ||||||
Other comprehensive loss | (42,688) | (42,688) | ||||||
Dividends | $ (9,343) | (9,343) | ||||||
Exercise of stock options (in shares) | 16,471 | 16,471 | ||||||
Exercise of stock options | $ 159 | 159 | ||||||
Vesting of RSUs (in shares) | 109,198 | |||||||
Vesting of RSUs | (2,553) | (2,553) | ||||||
Compensation expense under share incentive plans | $ 1,905 | 1,905 | ||||||
Balance (in shares) at Mar. 31, 2021 | 30,774,930 | 30,774,930 | ||||||
Balance at Mar. 31, 2021 | $ 639,628 | $ 6 | $ 0 | $ 663,987 | $ (63,576) | $ 39,211 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Operating activities | |||
Net cash (used in) operating activities | [1] | $ (81,005) | $ (65,305) |
Securities available-for-sale: | |||
Purchases – fixed maturity securities | (171,178) | (182,205) | |
Sales – fixed maturity securities | 33,041 | 4,513 | |
Maturities and calls – fixed maturity securities | 73,530 | 34,861 | |
Purchases – equity securities | (4,305) | (7,435) | |
Sales – equity securities | 3,776 | 3,295 | |
Bank loan participations: | |||
Purchases | (35,832) | (18,408) | |
Sales | 15,527 | 9,735 | |
Maturities | 11,190 | 13,220 | |
Other invested assets: | |||
Purchases | (9,795) | (438) | |
Return of capital | 249 | 253 | |
Redemptions | 0 | 13,133 | |
Short-term investments, net | 79,091 | 85,867 | |
Securities receivable or payable, net | 10,694 | (5,770) | |
Purchases of property and equipment | 0 | (342) | |
Net cash provided by (used in) investing activities | 5,988 | (49,721) | |
Financing activities | |||
Senior debt issuances | 0 | 119,000 | |
Dividends paid | (9,610) | (9,468) | |
Issuance of common shares under equity incentive plans | 159 | 0 | |
Common share repurchases | (2,553) | (2,038) | |
Net cash (used in) provided by financing activities | (12,004) | 107,494 | |
Change in cash, cash equivalents, and restricted cash equivalents | (87,021) | (7,532) | |
Cash, cash equivalents, and restricted cash equivalents at beginning of period | 1,022,180 | 1,406,076 | |
Cash, cash equivalents, and restricted cash equivalents at end of period | 935,159 | 1,398,544 | |
Supplemental information | |||
Interest paid | 2,482 | 3,248 | |
Restricted cash equivalents at beginning of period | 859,920 | 1,199,164 | |
Restricted cash equivalents at end of period | 751,668 | 1,107,321 | |
Change in restricted cash equivalents | $ (108,252) | $ (91,843) | |
[1] | Cash used in operating activities for the three months ended March 31, 2021 and 2020 primarily reflect $108.3 million and $91.8 million, respectively, of restricted cash equivalents returned to a former insured, per the terms of a collateral trust (see Amounts Recoverable from an Indemnifying Party in Liquidity and Capital Resources ). Excluding the reduction in the collateral funds, cash provided by operating activities was $27.2 million and $26.5 million for the three months ended March 31, 2021 and 2020, respectively. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Cash Flows [Abstract] | ||
Change in restricted cash equivalents | $ (108,252) | $ (91,843) |
Cash provided by operating activities excluding reduction in collateral funds | $ 27,200 | $ 26,500 |
Accounting Policies
Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
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, a Virginia domiciled 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, 2020 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, 2020 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 $29.0 million and $30.1 million at March 31, 2021 and December 31, 2020, 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 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. The Company had a pre-tax loss of $140.8 million for the three months ended March 31, 2021 and recorded a U.S. federal income tax benefit of $37.4 million. The pre-tax loss was largely driven by the $170.1 million of net adverse reserve development on prior accident years, including $168.7 million of net adverse development from the Excess and Surplus Lines segment that was primarily related to a former commercial auto account. For the three months ended March 31, 2021, our U.S. federal income tax benefit was 26.5% of the loss before taxes. The outbreak of the coronavirus pandemic in the first quarter of 2020 led to significant unrealized losses in our investment portfolio that were recognized in earnings. As a result, the Company had a pre-tax loss of $41.2 million for the three months ended March 31, 2020 and recorded a U.S. federal income tax benefit of $4.4 million. For the three months ended March 31, 2020, our U.S. federal income tax benefit was 10.7% of the loss before taxes. The change in effective tax rate for the two periods reflects changes in reserve estimates between accident years in the commercial auto business, and the related impact on the mix of income reported by country in those respective periods. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 Fixed maturity securities: State and municipal $ 311,053 $ 12,249 $ (3,537) $ 319,765 Residential mortgage-backed 296,200 5,490 (1,734) 299,956 Corporate 737,756 32,160 (7,223) 762,693 Commercial mortgage and asset-backed 322,579 7,234 (1,633) 328,180 U.S. Treasury securities and obligations guaranteed by the U.S. government 88,145 1,663 (251) 89,557 Total fixed maturity securities, available-for-sale $ 1,755,733 $ 58,796 $ (14,378) $ 1,800,151 December 31, 2020 Fixed maturity securities: State and municipal $ 277,241 $ 19,203 $ (39) $ 296,405 Residential mortgage-backed 286,104 7,784 (40) 293,848 Corporate 715,145 52,098 (421) 766,822 Commercial mortgage and asset-backed 314,911 12,611 (803) 326,719 U.S. Treasury securities and obligations guaranteed by the U.S. government 97,489 2,360 (1) 99,848 Total fixed maturity securities, available-for-sale $ 1,690,890 $ 94,056 $ (1,304) $ 1,783,642 The amortized cost and fair value of available-for-sale investments in fixed maturity securities at March 31, 2021 are summarized, by contractual maturity, as follows: Cost or Fair (in thousands) One year or less $ 110,269 $ 111,427 After one year through five years 455,605 477,392 After five years through ten years 327,033 332,488 After ten years 244,047 250,708 Residential mortgage-backed 296,200 299,956 Commercial mortgage and asset-backed 322,579 328,180 Total $ 1,755,733 $ 1,800,151 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, 2021 Fixed maturity securities: State and municipal $ 113,279 $ (3,537) $ — $ — $ 113,279 $ (3,537) Residential mortgage-backed 115,899 (1,725) 342 (9) 116,241 (1,734) Corporate 162,414 (7,223) — — 162,414 (7,223) Commercial mortgage and asset-backed 85,511 (1,564) 9,013 (69) 94,524 (1,633) U.S. Treasury securities and obligations guaranteed by the U.S. government 19,020 (251) — — 19,020 (251) Total fixed maturity securities, available-for-sale $ 496,123 $ (14,300) $ 9,355 $ (78) $ 505,478 $ (14,378) December 31, 2020 Fixed maturity securities: State and municipal $ 7,193 $ (39) $ — $ — $ 7,193 $ (39) Residential mortgage-backed 3,649 (40) — — 3,649 (40) Corporate 28,607 (421) — — 28,607 (421) Commercial mortgage and asset-backed 18,427 (447) 38,802 (356) 57,229 (803) U.S. Treasury securities and obligations guaranteed by the U.S. government 2,291 (1) — — 2,291 (1) Total fixed maturity securities, available-for-sale $ 60,167 $ (948) $ 38,802 $ (356) $ 98,969 $ (1,304) At March 31, 2021, the Company held fixed maturity securities of 192 issuers that were in an unrealized loss position with a total fair value of $505.5 million and gross unrealized losses of $14.4 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, 2021, 99.3% 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, 2021 had an aggregate fair value of $11.9 million and an aggregate net unrealized gain of $114,000. The Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments on January 1, 2020. This update changed the impairment model for available-for-sale fixed maturities and requires the Company to determine whether unrealized losses on available-for-sale fixed maturities are due to credit-related factors. An allowance for credit losses is established for any credit-related impairments, limited to the amount by which fair value is below amortized cost. Changes in the allowance for credit losses are recognized in earnings and included in n et realized and unrealized gains (losses) on investments . Unrealized losses that are not credit-related will continue to be recognized in other comprehensive income. The Company considers the extent to which fair value is below amortized cost in determining whether a credit-related loss exists. The Company also considers the credit quality rating of the security, with a special emphasis on securities downgraded below investment grade. A comparison is made between the present value of expected future cash flows for a security and its amortized cost. If the present value of future expected cash flows is less than amortized cost, a credit loss is presumed to exist and an allowance for credit losses is established. Management may conclude that a qualitative analysis is sufficient to support its conclusion that the present value of the expected cash flows equals or exceeds a security’s amortized cost. As a result of this review, management concluded that there were no credit-related impairments of fixed maturity securities at March 31, 2021, December 31, 2020, or March 31, 2020. 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. In connection with the adoption of ASU 2016-13, the Company elected the fair value option in accounting for bank loan participations effective January 1, 2020. The targeted transition relief offered by ASU 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief was applied to elect the fair value option to account for bank loan participations already held at the January 1, 2020 date of adoption. Under the fair value option, bank loan participations are measured at fair value, and changes in unrealized gains and losses in bank loan participations are reported in our income statement as net realized and unrealized gains (losses) on investments. At adoption on January 1, 2020, the Company applied the amendments on a modified retrospective basis, reducing the carrying value of its bank loan portfolio to fair value through an $8.4 million adjustment with a $7.8 million (net of tax) cumulative effect adjustment to reduce retained earnings. Applying the fair value option to the bank loan portfolio increases volatility in the Company's financial statements, but management believes it is less subjective and less burdensome to implement and maintain than ASU 2016-13, which would have otherwise been required. At March 31, 2021, the Company's bank loan portfolio had an aggregate fair value of $160.9 million and unpaid principal of $168.6 million. Investment income on bank loan participations included in net investment income was $2.9 million and $4.1 million for the three months ended March 31, 2021 and 2020, respectively. Net realized and unrealized gains (losses) on investments includes gains of $3.9 million and losses of $43.9 million related to changes in unrealized gains and losses on bank loan participations in the three months ended March 31, 2021 and 2020, respectively. Management concluded that there were no credit-related impairments of bank loan participations at March 31, 2021. At March 31, 2020, there were $5.0 million of unrealized losses due to credit-related impairments. Losses due to credit-related impairments were determined based upon consultations and advice from the Company's specialized investment manager and consideration of any adverse situations that could affect the borrower's ability to repay, the estimated value of underlying collateral, and other relevant factors. Bank loan participations generally provide a higher yield than our portfolio of fixed maturities and 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. Interest income on bank loan participations is accrued on the unpaid principal balance, and discounts and premiums on bank loan participations are amortized to income using the interest method. 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, 2021 or December 31, 2020. The Company’s net realized and unrealized gains and losses on investments are summarized as follows: Three Months Ended 2021 2020 (in thousands) Fixed maturity securities: Gross realized gains $ 1,056 $ 215 Gross realized losses (22) (1) 1,034 214 Bank loan participations: Gross realized gains 198 103 Gross realized losses (260) (1,309) Changes in fair values of bank loan participations 3,911 (43,947) 3,849 (45,153) Equity securities: Gross realized gains 29 — Gross realized losses (401) (170) Changes in fair values of equity securities 1,745 (13,315) 1,373 (13,485) Short-term investments and other: Gross realized gains 5 18 Gross realized losses — (1) Changes in fair values of short-term investments and other 11 — 16 17 Total $ 6,272 $ (58,407) 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 2021 2020 2021 2020 (in thousands) Renewable energy LLCs (a) $ 28,965 $ 30,145 $ (915) $ 834 Renewable energy notes receivable ( b) 9,000 — 234 166 Limited partnerships (c) 13,398 11,903 929 (569) Bank holding companies (d) 4,500 4,500 86 86 Total other invested assets $ 55,863 $ 46,548 $ 334 $ 517 (a) The Company’s Corporate and Other segment owns equity interests ranging from 2.6% to 32.6% 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 former directors served 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 $265,000 and $747,000 in the three months ended March 31, 2021 and 2020, respectively. (b) The Company's Excess and Surplus Lines and Corporate and Other segments have invested in notes receivable for renewable energy projects. At March 31, 2021, the Company held two notes issued by an entity for which two of our former directors serve as officers . Interest on the notes, which mature in 2025, is fixed at 12%. Income from the notes was $234,000 and $166,000 for the three months ended March 31, 2021 and 2020, respectively ($104,000 and $— for the Excess and Surplus Lines segment and $130,000 and $166,000 for the Corporate and Other segment in the respective periods). (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, 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 hold investments in limited partnerships with a total carrying value of $8.6 million at March 31, 2021. The Company recognized investment income of $754,000 and losses of $710,000 on these investments for the three months ended March 31, 2021 and 2020, respectively. The Company’s Excess and Surplus Lines segment holds investments in limited partnerships with a total carrying value of $4.8 million at March 31, 2021. Investment income of $175,000 and $141,000 was recognized on the investments for the three months ended March 31, 2021 and 2020 , respectively. At March 31, 2021, the Company’s Excess and Surplus Lines segment has outstanding commitments to invest another $7.9 million 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 holder of the subordinated notes (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 for both three month periods ended March 31, 2021 and 2020, respectively. At March 31, 2021 and December 31, 2020, 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 $252,000 at March 31, 2021, is classified as an available-for-sale fixed maturity. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
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 $181.8 million at March 31, 2021 and December 31, 2020. The gross carrying amounts and accumulated amortization for each major specifically identifiable intangible asset class were as follows: March 31, 2021 December 31, 2020 Life Gross Accumulated Gross Accumulated ($ 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 6,464 11,611 6,373 Identifiable intangible assets subject to amortization 11,611 6,464 11,611 6,373 $ 42,775 $ 6,464 $ 42,775 $ 6,373 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2021 | |
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 loss per share computations contained in the condensed consolidated financial statements: Three Months Ended 2021 2020 (in thousands, except share and per share amounts) Net loss to shareholders $ (103,460) $ (36,815) Weighted average common shares outstanding: Basic 30,713,986 30,476,307 Common share equivalents — — Diluted 30,713,986 30,476,307 Loss per share: Basic $ (3.37) $ (1.21) Common share equivalents — — Diluted $ (3.37) $ (1.21) Common share equivalents of 306,712 and 309,443 were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2021 and 2020, respectively, as net losses in the respective periods made the effects of all common share equivalents anti-dilutive. |
Reserve for Losses and Loss Adj
Reserve for Losses and Loss Adjustment Expenses | 3 Months Ended |
Mar. 31, 2021 | |
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. Reinsurance recoverables on unpaid losses and loss adjustment expenses are presented gross of a $335,000 allowance for credit losses on reinsurance balances at March 31, 2021 and March 31, 2020. Three Months Ended 2021 2020 (in thousands) Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period $ 1,386,061 $ 1,377,461 Add: Incurred losses and loss adjustment expenses net of reinsurance: Current year 103,366 95,982 Prior years 170,134 874 Total incurred losses and loss and adjustment expenses 273,500 96,856 Deduct: Loss and loss adjustment expense payments net of reinsurance: Current year 3,194 4,271 Prior years 121,588 118,357 Total loss and loss adjustment expense payments 124,782 122,628 Reserve for losses and loss adjustment expenses net of reinsurance recoverables at end of period 1,534,779 1,351,689 Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period 879,067 691,669 Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period $ 2,413,846 $ 2,043,358 The Company experienced $170.1 million of net adverse reserve development in the three months ended March 31, 2021 on the reserve for losses and loss adjustment expenses held at December 31, 2020. This reserve development included $168.7 million of net adverse development in the Excess and Surplus Lines segment including $170.0 million on commercial auto business, almost entirely related to a previously canceled account that has been in runoff since 2019. The reported losses on this terminated commercial auto account meaningfully exceeded our expectations for the three months ended March 31, 2021. We had expected that reported losses would decline as the account moved further into runoff, but the continued heavy reported loss emergence in the first quarter of 2021 indicated more inherent severity than anticipated. In response, we meaningfully adjusted our actuarial methodology, resulting in a significant strengthening of reserves for this account at March 31, 2021. In prior quarters, our actuarial work for this terminated commercial auto account had been based on industry data, pricing data, experience data, average claims severity data, and blended methodologies. However, the continuation of the highly elevated reported losses in the first quarter of 2021 led us to conclude that using only our own loss experience in our paid and incurred reserve projections rather than the array of inputs that we had used in prior quarters, and giving greater weight to incurred methods, would give us a better estimate of ultimate losses on this account. The Company also experienced $1.0 million of net favorable development in the Specialty Admitted Insurance segment due to favorable development in the workers' compensation business for prior accident years, and $2.5 million of net adverse development in the Casualty Reinsurance segment. The Company experienced $874,000 of net adverse reserve development in the three months ended March 31, 2020 on the reserve for losses and loss adjustment expenses held at December 31, 2019. This reserve development included $3,000 of favorable development in the Excess and Surplus Lines segment, $1.0 million of favorable development in the Specialty Admitted Insurance segment experienced due to favorable development in the workers' compensation business for prior accident years, and $1.9 million of adverse development in the Casualty Reinsurance segment. |
Other Comprehensive Loss
Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2021 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Other Comprehensive Loss | Other Comprehensive Loss The following table summarizes the components of other comprehensive loss: Three Months Ended 2021 2020 (in thousands) Unrealized losses arising during the period, before U.S. income taxes $ (47,300) $ (5,096) U.S. income taxes 5,453 1,378 Unrealized losses arising during the period, net of U.S. income taxes (41,847) (3,718) Less reclassification adjustment: Net realized investment gains 1,035 214 U.S. income taxes (194) (13) Reclassification adjustment for investment gains realized in net income 841 201 Other comprehensive loss $ (42,688) $ (3,919) In addition to the $1.0 million and $214,000 of net realized investment gains on available-for-sale fixed maturities for the three months ended March 31, 2021 and 2020, respectively , the Company also recognized net realized and unrealized investment gains (losses) in the respective periods of $3.8 million and $(45.2) million on its investments in bank loan participations and $1.4 million and $(13.5) million on its investments in equity securities. |
Contingent Liabilities
Contingent Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | Contingent Liabilities The Company is involved in various legal proceedings, including commercial matters and litigation regarding insurance claims arising in the ordinary course of business. The Company believes that the outcome of such matters, individually and in the aggregate, is not reasonably likely to have a material adverse effect on its consolidated financial position, results of operations or cash flows. For a description of the potential future impacts of COVID-19 on the Company, see the “The global coronavirus outbreak could harm business and results of operations of the Company” risk factor in Part I—Item IA in our Annual Report on Form 10-K for the year ended December 31, 2020. 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, $7.3 million of letters of credit were issued through March 31, 2021 which were secured by deposits of $14.4 million. Under a $102.5 million facility, $89.7 million of letters of credit were issued through March 31, 2021 which were secured by deposits of $113.6 million. Under a $100.0 million facility, $15.2 million of letters of credit were issued through March 31, 2021 which were secured by deposits of $28.1 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 $304.4 million at March 31, 2021. The Company previously issued a set of insurance contracts to Rasier LLC and its affiliates (collectively, “Rasier”) under which the Company pays losses and loss adjustment expenses on the contracts. The Company has indemnity agreements with Rasier (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 Rasier and other expenses incurred by the Company. Rasier is 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 agreements, 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 provided through a collateral trust arrangement established in favor of the Company by a captive insurance company affiliate of Rasier. As permitted under our indemnification agreements with Rasier and the associated trust agreement, we have withdrawn the collateral posted to the trust account. At March 31, 2021, the Company held collateral funds of $751.7 million. The funds withdrawn from the trust account, currently invested in short term securities and included in restricted cash equivalents on the Company's consolidated balance sheet, will be used to reimburse the Company for the losses and loss adjustment expenses paid on behalf of Rasier and other related expenses incurred by the Company to the extent not paid as required under the indemnity agreements. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
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 and Specialty Admitted Insurance segment is included in the respective segment’s underwriting profit (loss). Gross fee income of $927,000 and $1.6 million ($— and $1.3 million for the Excess and Surplus Lines segment and $927,000 and $335,000 for the Specialty Admitted Insurance segment) was included in other income and in underwriting profit (loss) for the three months ended March 31, 2021 and 2020, 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, 2021 Gross written premiums $ 181,358 $ 127,036 $ 64,861 $ — $ 373,255 Net earned premiums 113,708 16,357 30,528 — 160,593 Underwriting (loss) profit of insurance segments (150,946) 1,266 (1,625) — (151,305) Net investment income 3,706 822 10,556 5 15,089 Interest expense — — — 2,216 2,216 Segment revenues 118,796 18,565 45,517 102 182,980 Segment goodwill 181,831 — — — 181,831 Segment assets 2,129,985 980,824 1,930,747 68,151 5,109,707 Three Months Ended March 31, 2020 Gross written premiums $ 136,197 $ 102,802 $ 44,842 $ — $ 283,841 Net earned premiums 99,739 13,283 32,896 — 145,918 Underwriting profit (loss) of insurance segments 8,112 (988) 207 — 7,331 Net investment income 7,941 928 11,604 363 20,836 Interest expense — — — 2,876 2,876 Segment revenues 83,829 12,673 13,280 502 110,284 Segment goodwill 181,831 — — — 181,831 Segment assets 2,293,444 829,699 1,824,729 48,938 4,996,810 The following table reconciles the underwriting (loss) profit of the operating segments by individual segment to consolidated loss before income taxes: Three Months Ended 2021 2020 (in thousands) Underwriting (loss) profit of the insurance segments: Excess and Surplus Lines $ (150,946) $ 8,112 Specialty Admitted Insurance 1,266 (988) Casualty Reinsurance (1,625) 207 Total underwriting (loss) profit of insurance segments (151,305) 7,331 Other operating expenses of the Corporate and Other segment (8,056) (8,279) Underwriting loss (159,361) (948) Net investment income 15,089 20,836 Net realized and unrealized gains (losses) on investments 6,272 (58,407) Amortization of intangible assets (91) (149) Other income and expenses (522) 326 Interest expense (2,216) (2,876) Loss before income taxes $ (140,829) $ (41,218) |
Other Operating Expenses and Ot
Other Operating Expenses and Other Expenses | 3 Months Ended |
Mar. 31, 2021 | |
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 2021 2020 (in thousands) Amortization of policy acquisition costs $ 21,475 $ 24,116 Other underwriting expenses of the operating segments 17,850 19,226 Other operating expenses of the Corporate and Other segment 8,056 8,279 Total $ 47,381 $ 51,621 Other expenses of $621,000 for the three months ended March 31, 2021 primarily consist of employee severance and certain legal and professional consulting fees related to various strategic initiatives. There were no expenses classified as other for the three |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
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. The fair values of fixed maturity securities, equity securities, and bank loan participations have been determined using fair value prices provided by the Company's investment accounting services provider or investment managers, who utilize internationally recognized independent pricing services. The prices provided by the independent pricing services are generally based on observable market data in active markets ( e.g. broker quotes and prices observed for comparable 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) and bank loan participations 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, 2019. The Company reviews fair value prices provided by its outside investment accounting service provider or 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, 2021 are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) Fixed maturity securities, available-for-sale: State and municipal $ — $ 319,765 $ — $ 319,765 Residential mortgage-backed — 299,956 — 299,956 Corporate — 762,693 — 762,693 Commercial mortgage and asset-backed — 328,180 — 328,180 U.S. Treasury securities and obligations guaranteed by the U.S. government 89,118 439 — 89,557 Total fixed maturity securities, available-for-sale $ 89,118 $ 1,711,033 $ — $ 1,800,151 Equity securities: Preferred stock — 62,079 — 62,079 Common stock 21,464 7,334 — 28,798 Total equity securities $ 21,464 $ 69,413 $ — $ 90,877 Bank loan participations $ — $ 160,581 $ 299 $ 160,880 Short-term investments $ — $ 51,198 $ — $ 51,198 Assets measured at fair value on a recurring basis as of December 31, 2020 are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) Fixed maturity securities, available-for-sale: State and municipal $ — $ 296,405 $ — $ 296,405 Residential mortgage-backed — 293,848 — 293,848 Corporate — 766,822 — 766,822 Commercial mortgage and asset-backed — 326,719 326,719 U.S. Treasury securities and obligations guaranteed by the U.S. government 99,384 464 — 99,848 Total fixed maturity securities, available-for-sale $ 99,384 $ 1,684,258 $ — $ 1,783,642 Equity securities: Preferred stock — 67,495 — 67,495 Common stock 15,793 5,015 672 21,480 Total equity securities $ 15,793 $ 72,510 $ 672 $ 88,975 Bank loan participations $ — $ 147,296 $ 308 $ 147,604 Short-term investments $ — $ 130,289 $ — $ 130,289 A reconciliation of the beginning and ending balances of available-for-sale fixed maturity securities, equity securities, and bank loan participations measured at fair value on a recurring basis (as a result of the fair value option effective January 1, 2020) using significant unobservable inputs (Level 3) is shown below: Three Months Ended March 31, 2021 March 31, 2020 (in thousands) Beginning balance $ 980 $ 43 Transfers out of Level 3 — — Transfers in to Level 3 — 358 Purchases — 703 Sales (282) — Maturities, calls and paydowns (24) (17) Amortization of discount — 3 Total gains or losses (realized/unrealized): Included in earnings (375) (58) Included in other comprehensive income — — Ending balance $ 299 $ 1,032 The Company held one bank loan participation and one equity security at March 31, 2021 and one bank loan participation and two equity securities at December 31, 2020 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 securities of $299,000 at March 31, 2021 and $980,000 at December 31, 2020. The Company held one equity security at December 31, 2019 and three bank loan participations and two equity securities at March 31, 2020 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 securities of $1.0 million at March 31, 2020 and $43,000 at December 31, 2019. 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, 2021 or 2020. The Company recognizes transfers between levels at the beginning of the reporting period. 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, 2021 and December 31, 2020, 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, 2021 December 31, 2020 Carrying Fair Value Carrying Fair Value (in thousands) Assets Fixed maturity securities, available-for-sale $ 1,800,151 $ 1,800,151 $ 1,783,642 $ 1,783,642 Equity securities 90,877 90,877 88,975 88,975 Bank loan participations 160,880 160,880 147,604 147,604 Cash and cash equivalents 183,491 183,491 162,260 162,260 Restricted cash equivalents 751,668 751,668 859,920 859,920 Short-term investments 51,198 51,198 130,289 130,289 Other invested assets – notes receivable 13,500 17,767 4,500 5,302 Liabilities Senior debt 262,300 245,670 262,300 250,953 Junior subordinated debt 104,055 101,553 104,055 110,612 The fair values of fixed maturity securities, equity securities, and bank loan participations 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, 2021 and December 31, 2020 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, 2021 and December 31, 2020, respectively. The fair values of senior debt and junior subordinated debt at March 31, 2021 and December 31, 2020 were determined using inputs to the valuation methodology that are unobservable (Level 3). |
Senior Debt
Senior Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Senior Debt | Senior Debt At March 31, 2021, the Company had a drawn balance of $185.8 million outstanding on the $212.5 million unsecured revolving facility in its $315.0 million senior revolving credit facility (as amended or amended and restated, the "2013 Facility”). The 2013 Facility contains certain financial and other covenants (including minimum net worth, maximum ratio of total adjusted debt outstanding to total capitalization, and financial strength ratings) with which the Company was in compliance at March 31, 2021. In the three months ended March 31, 2020, the Company drew $60.0 million on the unsecured revolver as a precautionary measure to increase the Company's cash position and preserve financial flexibility in light of uncertainty in the global markets resulting from the coronavirus (COVID-19) outbreak. At March 31, 2021, unsecured loans of $61.5 million and secured letters of credit totaling $15.2 million were outstanding under a credit agreement (the "2017 Facility") that provides the Company with a revolving line of credit of up to $100.0 million, which may be used for loans and letters of credit made or issued, at the borrowers' option, on a secured or unsecured basis. The 2017 Facility contains certain financial and other covenants which the Company was in compliance with at March 31, 2021. In the three months ended March 31, 2020, the Company drew $59.0 million of unsecured capacity as a precautionary measure to increase the Company's cash position and preserve financial flexibility in light of uncertainty in the global markets resulting from the coronavirus (COVID-19) outbreak. |
Capital Stock and Equity Awards
Capital Stock and Equity Awards | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Capital Stock and Equity Awards | Capital Stock and Equity Awards The Company issued 125,669 common shares in the three months ended March 31, 2021. 16,471 of the new shares were related to stock option exercises and 109,198 were related to vesting of restricted share units (“RSUs”). The total common shares outstanding increased from 30,649,261 at December 31, 2020 to 30,774,930 at March 31, 2021. The Company declared the following dividends during the first three months of 2021 and 2020: Date of Declaration Dividend per Common Share Payable to Shareholders of Record on Payment Date Total Amount (thousands) 2021 February 24, 2021 $ 0.30 March 15, 2021 March 31, 2021 $ 9,345 2020 February 19, 2020 $ 0.30 March 16, 2020 March 31, 2020 $ 9,269 Included in the total dividends for each of the three months ended March 31, 2021 and 2020, respectively, are $113,000 of dividend equivalents on unvested RSUs. The balance of dividends payable on unvested RSUs was $396,000 at March 31, 2021 and $663,000 at December 31, 2020. 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, 2021, 1,226,493 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 150,000, and at March 31, 2021, 94,781 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, 2021 2020 Shares Weighted- Shares Weighted- Outstanding: Beginning of period 463,324 $ 32.25 643,851 $ 30.41 Granted — $ — — $ — Exercised (29,884) $ 26.37 — $ — Forfeited — $ — — $ — End of period 433,440 $ 32.65 643,851 $ 30.41 Exercisable, end of period 433,440 $ 32.65 640,606 $ 30.35 All of the outstanding options are fully vested (vesting period of three years from date of grant) 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 exercisable at March 31, 2021 was 1.9 years. RSUs The following table summarizes RSU activity: Three Months Ended March 31, 2021 2020 Shares Weighted- Shares Weighted- Unvested, beginning of period 399,856 $ 43.59 340,368 $ 41.50 Granted 138,936 $ 50.24 179,016 $ 43.55 Vested (161,004) $ 41.89 (142,830) $ 41.16 Forfeited (1,089) $ 42.44 (1,188) $ 42.07 Unvested, end of period 376,699 $ 46.78 375,366 $ 42.61 Outstanding RSUs granted to employees vest ratably over a three year vesting period. RSUs granted to non-employee directors have 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 2021 2020 (in thousands) Share based compensation expense $ 1,905 $ 1,867 U.S. tax benefit on share based compensation expense 294 250 As of March 31, 2021, the Company had $16.2 million of unrecognized share based compensation expense expected to be charged to earnings over a weighted-average period of 2.3 years. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn April 27, 2021, the Board of Directors declared a cash dividend of $0.30 per common share. The dividend is payable on June 30, 2021 to shareholders of record on June 14, 2021. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
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, 2020 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, 2020 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. |
Income Tax Expense | Income Tax ExpenseOur 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 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. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 Fixed maturity securities: State and municipal $ 311,053 $ 12,249 $ (3,537) $ 319,765 Residential mortgage-backed 296,200 5,490 (1,734) 299,956 Corporate 737,756 32,160 (7,223) 762,693 Commercial mortgage and asset-backed 322,579 7,234 (1,633) 328,180 U.S. Treasury securities and obligations guaranteed by the U.S. government 88,145 1,663 (251) 89,557 Total fixed maturity securities, available-for-sale $ 1,755,733 $ 58,796 $ (14,378) $ 1,800,151 December 31, 2020 Fixed maturity securities: State and municipal $ 277,241 $ 19,203 $ (39) $ 296,405 Residential mortgage-backed 286,104 7,784 (40) 293,848 Corporate 715,145 52,098 (421) 766,822 Commercial mortgage and asset-backed 314,911 12,611 (803) 326,719 U.S. Treasury securities and obligations guaranteed by the U.S. government 97,489 2,360 (1) 99,848 Total fixed maturity securities, available-for-sale $ 1,690,890 $ 94,056 $ (1,304) $ 1,783,642 |
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, 2021 are summarized, by contractual maturity, as follows: Cost or Fair (in thousands) One year or less $ 110,269 $ 111,427 After one year through five years 455,605 477,392 After five years through ten years 327,033 332,488 After ten years 244,047 250,708 Residential mortgage-backed 296,200 299,956 Commercial mortgage and asset-backed 322,579 328,180 Total $ 1,755,733 $ 1,800,151 |
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, 2021 Fixed maturity securities: State and municipal $ 113,279 $ (3,537) $ — $ — $ 113,279 $ (3,537) Residential mortgage-backed 115,899 (1,725) 342 (9) 116,241 (1,734) Corporate 162,414 (7,223) — — 162,414 (7,223) Commercial mortgage and asset-backed 85,511 (1,564) 9,013 (69) 94,524 (1,633) U.S. Treasury securities and obligations guaranteed by the U.S. government 19,020 (251) — — 19,020 (251) Total fixed maturity securities, available-for-sale $ 496,123 $ (14,300) $ 9,355 $ (78) $ 505,478 $ (14,378) December 31, 2020 Fixed maturity securities: State and municipal $ 7,193 $ (39) $ — $ — $ 7,193 $ (39) Residential mortgage-backed 3,649 (40) — — 3,649 (40) Corporate 28,607 (421) — — 28,607 (421) Commercial mortgage and asset-backed 18,427 (447) 38,802 (356) 57,229 (803) U.S. Treasury securities and obligations guaranteed by the U.S. government 2,291 (1) — — 2,291 (1) Total fixed maturity securities, available-for-sale $ 60,167 $ (948) $ 38,802 $ (356) $ 98,969 $ (1,304) |
Summary of Net Realized Gains and Losses on Investments | The Company’s net realized and unrealized gains and losses on investments are summarized as follows: Three Months Ended 2021 2020 (in thousands) Fixed maturity securities: Gross realized gains $ 1,056 $ 215 Gross realized losses (22) (1) 1,034 214 Bank loan participations: Gross realized gains 198 103 Gross realized losses (260) (1,309) Changes in fair values of bank loan participations 3,911 (43,947) 3,849 (45,153) Equity securities: Gross realized gains 29 — Gross realized losses (401) (170) Changes in fair values of equity securities 1,745 (13,315) 1,373 (13,485) Short-term investments and other: Gross realized gains 5 18 Gross realized losses — (1) Changes in fair values of short-term investments and other 11 — 16 17 Total $ 6,272 $ (58,407) |
Summary of Net Unrealized Gains and Losses on Investments | The Company’s net realized and unrealized gains and losses on investments are summarized as follows: Three Months Ended 2021 2020 (in thousands) Fixed maturity securities: Gross realized gains $ 1,056 $ 215 Gross realized losses (22) (1) 1,034 214 Bank loan participations: Gross realized gains 198 103 Gross realized losses (260) (1,309) Changes in fair values of bank loan participations 3,911 (43,947) 3,849 (45,153) Equity securities: Gross realized gains 29 — Gross realized losses (401) (170) Changes in fair values of equity securities 1,745 (13,315) 1,373 (13,485) Short-term investments and other: Gross realized gains 5 18 Gross realized losses — (1) Changes in fair values of short-term investments and other 11 — 16 17 Total $ 6,272 $ (58,407) |
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 2021 2020 2021 2020 (in thousands) Renewable energy LLCs (a) $ 28,965 $ 30,145 $ (915) $ 834 Renewable energy notes receivable ( b) 9,000 — 234 166 Limited partnerships (c) 13,398 11,903 929 (569) Bank holding companies (d) 4,500 4,500 86 86 Total other invested assets $ 55,863 $ 46,548 $ 334 $ 517 (a) The Company’s Corporate and Other segment owns equity interests ranging from 2.6% to 32.6% 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 former directors served 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 $265,000 and $747,000 in the three months ended March 31, 2021 and 2020, respectively. (b) The Company's Excess and Surplus Lines and Corporate and Other segments have invested in notes receivable for renewable energy projects. At March 31, 2021, the Company held two notes issued by an entity for which two of our former directors serve as officers . Interest on the notes, which mature in 2025, is fixed at 12%. Income from the notes was $234,000 and $166,000 for the three months ended March 31, 2021 and 2020, respectively ($104,000 and $— for the Excess and Surplus Lines segment and $130,000 and $166,000 for the Corporate and Other segment in the respective periods). (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, 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 hold investments in limited partnerships with a total carrying value of $8.6 million at March 31, 2021. The Company recognized investment income of $754,000 and losses of $710,000 on these investments for the three months ended March 31, 2021 and 2020, respectively. The Company’s Excess and Surplus Lines segment holds investments in limited partnerships with a total carrying value of $4.8 million at March 31, 2021. Investment income of $175,000 and $141,000 was recognized on the investments for the three months ended March 31, 2021 and 2020 , respectively. At March 31, 2021, the Company’s Excess and Surplus Lines segment has outstanding commitments to invest another $7.9 million 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 holder of the subordinated notes (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 $86,000 for both three month periods ended March 31, 2021 and 2020, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Gross Carrying Amounts and Accumulated Amortization | The gross carrying amounts and accumulated amortization for each major specifically identifiable intangible asset class were as follows: March 31, 2021 December 31, 2020 Life Gross Accumulated Gross Accumulated ($ 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 6,464 11,611 6,373 Identifiable intangible assets subject to amortization 11,611 6,464 11,611 6,373 $ 42,775 $ 6,464 $ 42,775 $ 6,373 |
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, 2021 December 31, 2020 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 6,464 11,611 6,373 Identifiable intangible assets subject to amortization 11,611 6,464 11,611 6,373 $ 42,775 $ 6,464 $ 42,775 $ 6,373 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 loss per share computations contained in the condensed consolidated financial statements: Three Months Ended 2021 2020 (in thousands, except share and per share amounts) Net loss to shareholders $ (103,460) $ (36,815) Weighted average common shares outstanding: Basic 30,713,986 30,476,307 Common share equivalents — — Diluted 30,713,986 30,476,307 Loss per share: Basic $ (3.37) $ (1.21) Common share equivalents — — Diluted $ (3.37) $ (1.21) |
Reserve for Losses and Loss A_2
Reserve for Losses and Loss Adjustment Expenses (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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. Reinsurance recoverables on unpaid losses and loss adjustment expenses are presented gross of a $335,000 allowance for credit losses on reinsurance balances at March 31, 2021 and March 31, 2020. Three Months Ended 2021 2020 (in thousands) Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period $ 1,386,061 $ 1,377,461 Add: Incurred losses and loss adjustment expenses net of reinsurance: Current year 103,366 95,982 Prior years 170,134 874 Total incurred losses and loss and adjustment expenses 273,500 96,856 Deduct: Loss and loss adjustment expense payments net of reinsurance: Current year 3,194 4,271 Prior years 121,588 118,357 Total loss and loss adjustment expense payments 124,782 122,628 Reserve for losses and loss adjustment expenses net of reinsurance recoverables at end of period 1,534,779 1,351,689 Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period 879,067 691,669 Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period $ 2,413,846 $ 2,043,358 |
Other Comprehensive Loss (Table
Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Components of Comprehensive Income (Loss) | The following table summarizes the components of other comprehensive loss: Three Months Ended 2021 2020 (in thousands) Unrealized losses arising during the period, before U.S. income taxes $ (47,300) $ (5,096) U.S. income taxes 5,453 1,378 Unrealized losses arising during the period, net of U.S. income taxes (41,847) (3,718) Less reclassification adjustment: Net realized investment gains 1,035 214 U.S. income taxes (194) (13) Reclassification adjustment for investment gains realized in net income 841 201 Other comprehensive loss $ (42,688) $ (3,919) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 Gross written premiums $ 181,358 $ 127,036 $ 64,861 $ — $ 373,255 Net earned premiums 113,708 16,357 30,528 — 160,593 Underwriting (loss) profit of insurance segments (150,946) 1,266 (1,625) — (151,305) Net investment income 3,706 822 10,556 5 15,089 Interest expense — — — 2,216 2,216 Segment revenues 118,796 18,565 45,517 102 182,980 Segment goodwill 181,831 — — — 181,831 Segment assets 2,129,985 980,824 1,930,747 68,151 5,109,707 Three Months Ended March 31, 2020 Gross written premiums $ 136,197 $ 102,802 $ 44,842 $ — $ 283,841 Net earned premiums 99,739 13,283 32,896 — 145,918 Underwriting profit (loss) of insurance segments 8,112 (988) 207 — 7,331 Net investment income 7,941 928 11,604 363 20,836 Interest expense — — — 2,876 2,876 Segment revenues 83,829 12,673 13,280 502 110,284 Segment goodwill 181,831 — — — 181,831 Segment assets 2,293,444 829,699 1,824,729 48,938 4,996,810 |
Schedule of Underwriting Profit of Operating Segments by Individual Segment and Reconciliation to Consolidated Income Before Taxes | The following table reconciles the underwriting (loss) profit of the operating segments by individual segment to consolidated loss before income taxes: Three Months Ended 2021 2020 (in thousands) Underwriting (loss) profit of the insurance segments: Excess and Surplus Lines $ (150,946) $ 8,112 Specialty Admitted Insurance 1,266 (988) Casualty Reinsurance (1,625) 207 Total underwriting (loss) profit of insurance segments (151,305) 7,331 Other operating expenses of the Corporate and Other segment (8,056) (8,279) Underwriting loss (159,361) (948) Net investment income 15,089 20,836 Net realized and unrealized gains (losses) on investments 6,272 (58,407) Amortization of intangible assets (91) (149) Other income and expenses (522) 326 Interest expense (2,216) (2,876) Loss before income taxes $ (140,829) $ (41,218) |
Other Operating Expenses and _2
Other Operating Expenses and Other Expenses (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Other Operating Expenses and Other Expenses [Abstract] | |
Schedule of Other Operating Expenses | Other operating expenses consist of the following: Three Months Ended 2021 2020 (in thousands) Amortization of policy acquisition costs $ 21,475 $ 24,116 Other underwriting expenses of the operating segments 17,850 19,226 Other operating expenses of the Corporate and Other segment 8,056 8,279 Total $ 47,381 $ 51,621 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) Fixed maturity securities, available-for-sale: State and municipal $ — $ 319,765 $ — $ 319,765 Residential mortgage-backed — 299,956 — 299,956 Corporate — 762,693 — 762,693 Commercial mortgage and asset-backed — 328,180 — 328,180 U.S. Treasury securities and obligations guaranteed by the U.S. government 89,118 439 — 89,557 Total fixed maturity securities, available-for-sale $ 89,118 $ 1,711,033 $ — $ 1,800,151 Equity securities: Preferred stock — 62,079 — 62,079 Common stock 21,464 7,334 — 28,798 Total equity securities $ 21,464 $ 69,413 $ — $ 90,877 Bank loan participations $ — $ 160,581 $ 299 $ 160,880 Short-term investments $ — $ 51,198 $ — $ 51,198 Assets measured at fair value on a recurring basis as of December 31, 2020 are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) Fixed maturity securities, available-for-sale: State and municipal $ — $ 296,405 $ — $ 296,405 Residential mortgage-backed — 293,848 — 293,848 Corporate — 766,822 — 766,822 Commercial mortgage and asset-backed — 326,719 326,719 U.S. Treasury securities and obligations guaranteed by the U.S. government 99,384 464 — 99,848 Total fixed maturity securities, available-for-sale $ 99,384 $ 1,684,258 $ — $ 1,783,642 Equity securities: Preferred stock — 67,495 — 67,495 Common stock 15,793 5,015 672 21,480 Total equity securities $ 15,793 $ 72,510 $ 672 $ 88,975 Bank loan participations $ — $ 147,296 $ 308 $ 147,604 Short-term investments $ — $ 130,289 $ — $ 130,289 |
Reconciliation of Securities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs | A reconciliation of the beginning and ending balances of available-for-sale fixed maturity securities, equity securities, and bank loan participations measured at fair value on a recurring basis (as a result of the fair value option effective January 1, 2020) using significant unobservable inputs (Level 3) is shown below: Three Months Ended March 31, 2021 March 31, 2020 (in thousands) Beginning balance $ 980 $ 43 Transfers out of Level 3 — — Transfers in to Level 3 — 358 Purchases — 703 Sales (282) — Maturities, calls and paydowns (24) (17) Amortization of discount — 3 Total gains or losses (realized/unrealized): Included in earnings (375) (58) Included in other comprehensive income — — Ending balance $ 299 $ 1,032 |
Schedule of Carrying Value and Fair Value | The carrying values and fair values of financial instruments are summarized below: March 31, 2021 December 31, 2020 Carrying Fair Value Carrying Fair Value (in thousands) Assets Fixed maturity securities, available-for-sale $ 1,800,151 $ 1,800,151 $ 1,783,642 $ 1,783,642 Equity securities 90,877 90,877 88,975 88,975 Bank loan participations 160,880 160,880 147,604 147,604 Cash and cash equivalents 183,491 183,491 162,260 162,260 Restricted cash equivalents 751,668 751,668 859,920 859,920 Short-term investments 51,198 51,198 130,289 130,289 Other invested assets – notes receivable 13,500 17,767 4,500 5,302 Liabilities Senior debt 262,300 245,670 262,300 250,953 Junior subordinated debt 104,055 101,553 104,055 110,612 |
Capital Stock and Equity Awar_2
Capital Stock and Equity Awards (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Dividends | The Company declared the following dividends during the first three months of 2021 and 2020: Date of Declaration Dividend per Common Share Payable to Shareholders of Record on Payment Date Total Amount (thousands) 2021 February 24, 2021 $ 0.30 March 15, 2021 March 31, 2021 $ 9,345 2020 February 19, 2020 $ 0.30 March 16, 2020 March 31, 2020 $ 9,269 |
Schedule of Summary of Option Activity | The following table summarizes option activity: Three Months Ended March 31, 2021 2020 Shares Weighted- Shares Weighted- Outstanding: Beginning of period 463,324 $ 32.25 643,851 $ 30.41 Granted — $ — — $ — Exercised (29,884) $ 26.37 — $ — Forfeited — $ — — $ — End of period 433,440 $ 32.65 643,851 $ 30.41 Exercisable, end of period 433,440 $ 32.65 640,606 $ 30.35 |
Schedule of Summary of RSU Activity | The following table summarizes RSU activity: Three Months Ended March 31, 2021 2020 Shares Weighted- Shares Weighted- Unvested, beginning of period 399,856 $ 43.59 340,368 $ 41.50 Granted 138,936 $ 50.24 179,016 $ 43.55 Vested (161,004) $ 41.89 (142,830) $ 41.16 Forfeited (1,089) $ 42.44 (1,188) $ 42.07 Unvested, end of period 376,699 $ 46.78 375,366 $ 42.61 |
Schedule of Summary of Share Based Compensation 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 2021 2020 (in thousands) Share based compensation expense $ 1,905 $ 1,867 U.S. tax benefit on share based compensation expense 294 250 |
Accounting Policies - Narrative
Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021USD ($)company | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Accounting Policies [Line Items] | |||
Investment in variable interest entities | $ 29,000 | $ 30,100 | |
Pre-tax (income) loss | 140,829 | $ 41,218 | |
Income tax benefit | 37,369 | 4,403 | |
Development on prior year loss reserves | $ 170,134 | $ 874 | |
Effective U.S. federal income tax benefit rate | 26.50% | 10.70% | |
Excess and Surplus Lines | |||
Accounting Policies [Line Items] | |||
Development on prior year loss reserves | $ 168,700 | $ (3) | |
UNITED STATES | |||
Accounting Policies [Line Items] | |||
Number of insurance companies | company | 5 | ||
BERMUDA | |||
Accounting Policies [Line Items] | |||
Number of insurance companies | company | 2 |
Investments - Schedule of Avail
Investments - Schedule of Available-for-Sale Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Total fixed maturity securities, Cost or Amortized Cost | $ 1,755,733 | $ 1,690,890 |
Fixed maturity securities, available-for-sale | 1,800,151 | 1,783,642 |
Fixed maturity securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total fixed maturity securities, Cost or Amortized Cost | 1,755,733 | 1,690,890 |
Total investments available-for-sale, Gross Unrealized Gains | 58,796 | 94,056 |
Total investments available-for-sale, Gross Unrealized Losses | (14,378) | (1,304) |
Fixed maturity securities, available-for-sale | 1,800,151 | 1,783,642 |
State and municipal | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total fixed maturity securities, Cost or Amortized Cost | 311,053 | 277,241 |
Total investments available-for-sale, Gross Unrealized Gains | 12,249 | 19,203 |
Total investments available-for-sale, Gross Unrealized Losses | (3,537) | (39) |
Fixed maturity securities, available-for-sale | 319,765 | 296,405 |
Residential mortgage-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total fixed maturity securities, Cost or Amortized Cost | 296,200 | 286,104 |
Total investments available-for-sale, Gross Unrealized Gains | 5,490 | 7,784 |
Total investments available-for-sale, Gross Unrealized Losses | (1,734) | (40) |
Fixed maturity securities, available-for-sale | 299,956 | 293,848 |
Corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total fixed maturity securities, Cost or Amortized Cost | 737,756 | 715,145 |
Total investments available-for-sale, Gross Unrealized Gains | 32,160 | 52,098 |
Total investments available-for-sale, Gross Unrealized Losses | (7,223) | (421) |
Fixed maturity securities, available-for-sale | 762,693 | 766,822 |
Commercial mortgage and asset-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total fixed maturity securities, Cost or Amortized Cost | 322,579 | 314,911 |
Total investments available-for-sale, Gross Unrealized Gains | 7,234 | 12,611 |
Total investments available-for-sale, Gross Unrealized Losses | (1,633) | (803) |
Fixed maturity securities, available-for-sale | 328,180 | 326,719 |
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 | 88,145 | 97,489 |
Total investments available-for-sale, Gross Unrealized Gains | 1,663 | 2,360 |
Total investments available-for-sale, Gross Unrealized Losses | (251) | (1) |
Fixed maturity securities, available-for-sale | $ 89,557 | $ 99,848 |
Investments - Schedule of Contr
Investments - Schedule of Contract Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Cost or Amortized Cost | ||
One year or less | $ 110,269 | |
After one year through five years | 455,605 | |
After five years through ten years | 327,033 | |
After ten years | 244,047 | |
Residential mortgage-backed | 296,200 | |
Commercial mortgage and asset-backed | 322,579 | |
Total fixed maturity securities, Cost or Amortized Cost | 1,755,733 | $ 1,690,890 |
Fair Value | ||
One year or less | 111,427 | |
After one year through five years | 477,392 | |
After five years through ten years | 332,488 | |
After ten years | 250,708 | |
Residential mortgage-backed | 299,956 | |
Commercial mortgage and asset-backed | 328,180 | |
Total investments available-for-sale, Fair Value | $ 1,800,151 | $ 1,783,642 |
Investments - Schedule of Gross
Investments - Schedule of Gross Unrealized Losses and Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, fair value | $ 505,500 | |
Fixed maturity securities, gross unrealized losses | (14,400) | |
Fixed maturity securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, less than 12 months, fair value | 496,123 | $ 60,167 |
Fixed maturity securities, less than 12 months, gross unrealized losses | (14,300) | (948) |
Fixed maturity securities, 12 months or more, fair value | 9,355 | 38,802 |
Fixed maturity securities, 12 months or more, gross unrealized losses | (78) | (356) |
Fixed maturity securities, fair value | 505,478 | 98,969 |
Fixed maturity securities, gross unrealized losses | (14,378) | (1,304) |
State and municipal | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, less than 12 months, fair value | 113,279 | 7,193 |
Fixed maturity securities, less than 12 months, gross unrealized losses | (3,537) | (39) |
Fixed maturity securities, 12 months or more, fair value | 0 | 0 |
Fixed maturity securities, 12 months or more, gross unrealized losses | 0 | 0 |
Fixed maturity securities, fair value | 113,279 | 7,193 |
Fixed maturity securities, gross unrealized losses | (3,537) | (39) |
Residential mortgage-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, less than 12 months, fair value | 115,899 | 3,649 |
Fixed maturity securities, less than 12 months, gross unrealized losses | (1,725) | (40) |
Fixed maturity securities, 12 months or more, fair value | 342 | 0 |
Fixed maturity securities, 12 months or more, gross unrealized losses | (9) | 0 |
Fixed maturity securities, fair value | 116,241 | 3,649 |
Fixed maturity securities, gross unrealized losses | (1,734) | (40) |
Corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, less than 12 months, fair value | 162,414 | 28,607 |
Fixed maturity securities, less than 12 months, gross unrealized losses | (7,223) | (421) |
Fixed maturity securities, 12 months or more, fair value | 0 | 0 |
Fixed maturity securities, 12 months or more, gross unrealized losses | 0 | 0 |
Fixed maturity securities, fair value | 162,414 | 28,607 |
Fixed maturity securities, gross unrealized losses | (7,223) | (421) |
Commercial mortgage and asset-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturity securities, less than 12 months, fair value | 85,511 | 18,427 |
Fixed maturity securities, less than 12 months, gross unrealized losses | (1,564) | (447) |
Fixed maturity securities, 12 months or more, fair value | 9,013 | 38,802 |
Fixed maturity securities, 12 months or more, gross unrealized losses | (69) | (356) |
Fixed maturity securities, fair value | 94,524 | 57,229 |
Fixed maturity securities, gross unrealized losses | (1,633) | (803) |
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 | 19,020 | 2,291 |
Fixed maturity securities, less than 12 months, gross unrealized losses | (251) | (1) |
Fixed maturity securities, 12 months or more, fair value | 0 | 0 |
Fixed maturity securities, 12 months or more, gross unrealized losses | 0 | 0 |
Fixed maturity securities, fair value | 19,020 | 2,291 |
Fixed maturity securities, gross unrealized losses | $ (251) | $ (1) |
Investments - Narrative (Detail
Investments - Narrative (Details) | 3 Months Ended | ||||
Mar. 31, 2021USD ($)issuer | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | |
Gain (Loss) on Securities [Line Items] | |||||
Number of issuers | issuer | 192 | ||||
Total fair value | $ 505,500,000 | ||||
Gross unrealized losses | 14,400,000 | ||||
Fixed maturity securities, available-for-sale | 1,800,151,000 | $ 1,783,642,000 | |||
Shareholders' equity | 639,628,000 | $ 720,317,000 | 795,608,000 | $ 778,581,000 | |
Bank loan participations | 160,880,000 | 147,604,000 | |||
Unpaid principal balance | 168,600,000 | ||||
Net investment income | 15,089,000 | 20,836,000 | |||
Changes in fair values of bank loan participations | 3,911,000 | (43,947,000) | |||
Losses due to credit-related impairments | 0 | 5,000,000 | |||
Bank Loan Participations | |||||
Gain (Loss) on Securities [Line Items] | |||||
Net investment income | 2,900,000 | 4,100,000 | |||
Retained Earnings | |||||
Gain (Loss) on Securities [Line Items] | |||||
Shareholders' equity | (63,576,000) | $ 35,412,000 | 49,227,000 | 89,586,000 | |
Cumulative Effect, Period of Adoption, Adjustment | ASU 2019-05 | |||||
Gain (Loss) on Securities [Line Items] | |||||
Bank loan participations | $ (8,400,000) | ||||
Shareholders' equity | (7,827,000) | ||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | ASU 2019-05 | |||||
Gain (Loss) on Securities [Line Items] | |||||
Shareholders' equity | $ (7,800,000) | $ (7,827,000) | |||
Fixed maturity securities | |||||
Gain (Loss) on Securities [Line Items] | |||||
Total fair value | 505,478,000 | 98,969,000 | |||
Gross unrealized losses | 14,378,000 | 1,304,000 | |||
Fixed maturity securities, available-for-sale | 1,800,151,000 | 1,783,642,000 | |||
Aggregate net unrealized gain | $ 58,796,000 | $ 94,056,000 | |||
BBB- or better | Fixed maturity securities | |||||
Gain (Loss) on Securities [Line Items] | |||||
Percentage of available for sale securities | 99.30% | ||||
Below BBB- | |||||
Gain (Loss) on Securities [Line Items] | |||||
Fixed maturity securities, available-for-sale | $ 11,900,000 | ||||
Aggregate net unrealized gain | 114,000 | ||||
Bank Holding Company | |||||
Gain (Loss) on Securities [Line Items] | |||||
Carrying value of collateralized loan obligation held | $ 252,000 |
Investments - Summary of Realiz
Investments - Summary of Realized Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Investments [Abstract] | ||
Fixed maturity securities, gross realized gains | $ 1,056 | $ 215 |
Fixed maturity securities, gross realized losses | (22) | (1) |
Fixed maturity securities | 1,034 | 214 |
Bank loan participations, gross realized gains | 198 | 103 |
Bank loan participations, gross realized losses | (260) | (1,309) |
Changes in fair values of bank loan participations | 3,911 | (43,947) |
Bank loan participations | 3,849 | (45,153) |
Equity securities, gross realized gain | 29 | 0 |
Equity securities, gross realized losses | (401) | (170) |
Changes in fair values of equity securities | 1,745 | (13,315) |
Equity securities | 1,373 | (13,485) |
Short-term investments and other, gross realized gains | 5 | 18 |
Short-term investments and other, gross realized losses | 0 | (1) |
Changes in fair values of short-term investments and other | 11 | 0 |
Short-term investments and other | 16 | 17 |
Total | $ 6,272 | $ (58,407) |
Investments - Summary of Privat
Investments - Summary of Private Debt and Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Net Investment Income [Line Items] | |||
Total other invested assets | $ 55,863 | $ 46,548 | |
Investment income | $ 334 | $ 517 | |
Rate of interest | 12.00% | ||
Renewable energy LLCs | |||
Net Investment Income [Line Items] | |||
Total other invested assets | $ 28,965 | 30,145 | |
Investment income | (915) | 834 | |
Renewable energy notes receivable | |||
Net Investment Income [Line Items] | |||
Total other invested assets | 9,000 | 0 | |
Investment income | 234 | 166 | |
Limited partnerships | |||
Net Investment Income [Line Items] | |||
Total other invested assets | 13,398 | 11,903 | |
Investment income | 929 | (569) | |
Bank holding companies | |||
Net Investment Income [Line Items] | |||
Total other invested assets | 4,500 | $ 4,500 | |
Investment income | 86 | 86 | |
Corporate and Other | Renewable energy notes receivable | |||
Net Investment Income [Line Items] | |||
Investment income | 130 | 166 | |
Corporate and Other | Limited partnerships | |||
Net Investment Income [Line Items] | |||
Investment income (loss) | 754 | (710) | |
Carrying values of limited partnerships held | 8,600 | ||
Corporate and Other | Bank holding companies | |||
Net Investment Income [Line Items] | |||
Interest income | 86 | 86 | |
Corporate and Other | Investment in LLC | |||
Net Investment Income [Line Items] | |||
Cash distributions from LLCs | $ 265 | 747 | |
Corporate and Other | Bank Holding Company | |||
Net Investment Income [Line Items] | |||
Rate of interest | 7.60% | ||
Investment in private subordinated notes | $ 4,500 | ||
Excess and Surplus Lines | Renewable energy notes receivable | |||
Net Investment Income [Line Items] | |||
Investment income | 104 | 0 | |
Excess and Surplus Lines | Limited partnerships | |||
Net Investment Income [Line Items] | |||
Investment income (loss) | 175 | $ 141 | |
Carrying values of limited partnerships held | 4,800 | ||
Outstanding commitments to invest | $ 7,900 | ||
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 | 32.60% |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | 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, 2021 | Dec. 31, 2020 | |
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 | 6,464 | 6,373 |
Total Intangible Assets, Gross | 42,775 | 42,775 |
Broker relationships | ||
Identifiable intangible assets subject to amortization | ||
Gross Carrying Amount | 11,611 | 11,611 |
Accumulated Amortization | $ 6,464 | 6,373 |
Life (Years) | 24 years 7 months 6 days | |
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 |
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, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net loss to shareholders | $ (103,460) | $ (36,815) |
Weighted average common shares outstanding: | ||
Basic (in shares) | 30,713,986 | 30,476,307 |
Common share equivalents (in shares) | 0 | 0 |
Diluted (in shares) | 30,713,986 | 30,476,307 |
Loss per share: | ||
Basic (in dollars per share) | $ (3.37) | $ (1.21) |
Common share equivalents (in dollars per share) | 0 | 0 |
Diluted (in dollars per share) | $ (3.37) | $ (1.21) |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
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 | 306,712 | 309,443 |
Reserve for Losses and Loss A_3
Reserve for Losses and Loss Adjustment Expenses - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Liability for Claims and Claims Adjustment Expense [Abstract] | ||
Allowance for uncollectible reinsurance balances | $ 335 | $ 335 |
Favorable development on prior year loss reserves | ||
Development on prior year loss reserves | 170,134 | 874 |
Excess and Surplus Lines | ||
Favorable development on prior year loss reserves | ||
Development on prior year loss reserves | 168,700 | (3) |
Excess and Surplus Lines | Commercial Auto Business | ||
Favorable development on prior year loss reserves | ||
Development on prior year loss reserves | 170,000 | |
Specialty Admitted Insurance | ||
Favorable development on prior year loss reserves | ||
Development on prior year loss reserves | (1,000) | (1,000) |
Casualty Reinsurance | ||
Favorable development on prior year loss reserves | ||
Development on prior year loss reserves | $ 2,500 | $ 1,900 |
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, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
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 | $ 1,386,061 | $ 1,377,461 | |
Add: Incurred losses and loss adjustment expenses net of reinsurance: | |||
Current year | 103,366 | 95,982 | |
Prior years | 170,134 | 874 | |
Total incurred losses and loss and adjustment expenses | 273,500 | 96,856 | |
Deduct: Loss and loss adjustment expense payments net of reinsurance: | |||
Current year | 3,194 | 4,271 | |
Prior years | 121,588 | 118,357 | |
Total loss and loss adjustment expense payments | 124,782 | 122,628 | |
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at end of period | 1,534,779 | 1,351,689 | |
Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period | 879,067 | 691,669 | |
Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period | $ 2,413,846 | $ 2,043,358 | $ 2,192,080 |
Other Comprehensive Loss - Summ
Other Comprehensive Loss - Summary of Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Unrealized losses arising during the period, before U.S. income taxes | $ (47,300) | $ (5,096) |
U.S. income taxes | 5,453 | 1,378 |
Unrealized losses arising during the period, net of U.S. income taxes | (41,847) | (3,718) |
Less reclassification adjustment: | ||
Net realized investment gains | 1,035 | 214 |
U.S. income taxes | (194) | (13) |
Reclassification adjustment for investment gains realized in net income | 841 | 201 |
Other comprehensive loss | $ (42,688) | $ (3,919) |
Other Comprehensive Loss - Narr
Other Comprehensive Loss - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Net realized investment gains | $ 1,035 | $ 214 |
Bank loan participations | 3,849 | (45,153) |
Net realized and unrealized gains (losses) on investments in equity securities | $ 1,400 | $ (13,500) |
Contingent Liabilities - Narrat
Contingent Liabilities - Narrative (Details) | Mar. 31, 2021USD ($)credit_facility | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Contingent Liabilities [Line Items] | ||||
Amount of collateral held | $ 751,668,000 | $ 859,920,000 | $ 1,107,321,000 | $ 1,199,164,000 |
JRG Reinsurance Company, Ltd. | ||||
Contingent Liabilities [Line Items] | ||||
Number of credit facilities | credit_facility | 3 | |||
JRG Reinsurance Company, Ltd. | Letter of credit 75 Million | ||||
Contingent Liabilities [Line Items] | ||||
Letters of credit facility, amount | $ 75,000,000 | |||
Amount of letters of credit issued | 7,300,000 | |||
Assets deposited for securing letters of credit | 14,400,000 | |||
JRG Reinsurance Company, Ltd. | Letter of credit 102.5 Million | ||||
Contingent Liabilities [Line Items] | ||||
Letters of credit facility, amount | 102,500,000 | |||
Amount of letters of credit issued | 89,700,000 | |||
Assets deposited for securing letters of credit | 113,600,000 | |||
JRG Reinsurance Company, Ltd. | Letter of credit 100 Million | ||||
Contingent Liabilities [Line Items] | ||||
Amount of letters of credit issued | 15,200,000 | |||
Assets deposited for securing letters of credit | 28,100,000 | |||
Line of credit (up to) | 100,000,000 | |||
Third-party Reinsureds | JRG Reinsurance Company, Ltd. | ||||
Contingent Liabilities [Line Items] | ||||
Collateral trust arrangement amount | 304,400,000 | |||
Raiser | ||||
Contingent Liabilities [Line Items] | ||||
Amount of collateral held | $ 751,700,000 |
Segment Information - Narrative
Segment Information - Narrative (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021USD ($)segment | Mar. 31, 2020USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 4 | |
Gross fee income | $ 927 | $ 1,600 |
Excess and Surplus Lines | ||
Segment Reporting Information [Line Items] | ||
Gross fee income | 0 | 1,300 |
Specialty Admitted Insurance | ||
Segment Reporting Information [Line Items] | ||
Gross fee income | $ 927 | $ 335 |
Segment Information - Summary o
Segment Information - Summary of Segment Results (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Gross written premiums | $ 373,255 | $ 283,841 | |
Net earned premiums | 160,593 | 145,918 | |
Underwriting (loss) profit of insurance segments | (151,305) | 7,331 | |
Net investment income | 15,089 | 20,836 | |
Interest expense | 2,216 | 2,876 | |
Total revenues | 182,980 | 110,284 | |
Segment goodwill | 181,831 | 181,831 | $ 181,831 |
Segment assets | 5,109,707 | 4,996,810 | $ 5,063,072 |
Excess and Surplus Lines | |||
Segment Reporting Information [Line Items] | |||
Gross written premiums | 181,358 | 136,197 | |
Net earned premiums | 113,708 | 99,739 | |
Underwriting (loss) profit of insurance segments | (150,946) | 8,112 | |
Net investment income | 3,706 | 7,941 | |
Interest expense | 0 | 0 | |
Total revenues | 118,796 | 83,829 | |
Segment goodwill | 181,831 | 181,831 | |
Segment assets | 2,129,985 | 2,293,444 | |
Specialty Admitted Insurance | |||
Segment Reporting Information [Line Items] | |||
Gross written premiums | 127,036 | 102,802 | |
Net earned premiums | 16,357 | 13,283 | |
Underwriting (loss) profit of insurance segments | 1,266 | (988) | |
Net investment income | 822 | 928 | |
Interest expense | 0 | 0 | |
Total revenues | 18,565 | 12,673 | |
Segment goodwill | 0 | 0 | |
Segment assets | 980,824 | 829,699 | |
Casualty Reinsurance | |||
Segment Reporting Information [Line Items] | |||
Gross written premiums | 64,861 | 44,842 | |
Net earned premiums | 30,528 | 32,896 | |
Underwriting (loss) profit of insurance segments | (1,625) | 207 | |
Net investment income | 10,556 | 11,604 | |
Interest expense | 0 | 0 | |
Total revenues | 45,517 | 13,280 | |
Segment goodwill | 0 | 0 | |
Segment assets | 1,930,747 | 1,824,729 | |
Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Gross written premiums | 0 | 0 | |
Net earned premiums | 0 | 0 | |
Underwriting (loss) profit of insurance segments | 0 | 0 | |
Net investment income | 5 | 363 | |
Interest expense | 2,216 | 2,876 | |
Total revenues | 102 | 502 | |
Segment goodwill | 0 | 0 | |
Segment assets | $ 68,151 | $ 48,938 |
Segment Information - Reconcili
Segment Information - Reconciliation of Operating Segments by Individual Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Total underwriting (loss) profit of insurance segments | $ (151,305) | $ 7,331 |
Other operating expenses of the Corporate and Other segment | (8,056) | (8,279) |
Underwriting loss | (159,361) | (948) |
Net investment income | 15,089 | 20,836 |
Net realized and unrealized gains (losses) on investments | 6,272 | (58,407) |
Amortization of intangible assets | (91) | (149) |
Other income and expenses | (522) | 326 |
Interest expense | (2,216) | (2,876) |
Loss before taxes | (140,829) | (41,218) |
Excess and Surplus Lines | ||
Segment Reporting Information [Line Items] | ||
Total underwriting (loss) profit of insurance segments | (150,946) | 8,112 |
Net investment income | 3,706 | 7,941 |
Interest expense | 0 | 0 |
Specialty Admitted Insurance | ||
Segment Reporting Information [Line Items] | ||
Total underwriting (loss) profit of insurance segments | 1,266 | (988) |
Net investment income | 822 | 928 |
Interest expense | 0 | 0 |
Casualty Reinsurance | ||
Segment Reporting Information [Line Items] | ||
Total underwriting (loss) profit of insurance segments | (1,625) | 207 |
Net investment income | 10,556 | 11,604 |
Interest expense | $ 0 | $ 0 |
Other Operating Expenses and _3
Other Operating Expenses and Other Expenses (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other Operating Expenses and Other Expenses [Abstract] | ||
Amortization of policy acquisition costs | $ 21,475,000 | $ 24,116,000 |
Other underwriting expenses of the operating segments | 17,850,000 | 19,226,000 |
Other operating expenses of the Corporate and Other segment | 8,056,000 | 8,279,000 |
Total | 47,381,000 | 51,621,000 |
Other expenses | $ 621,000 | $ 0 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Assets Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | $ 1,800,151 | $ 1,783,642 |
Equity securities: | ||
Total equity securities | 90,877 | 88,975 |
Bank loan participations | 160,880 | 147,604 |
Fixed maturity securities | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 1,800,151 | 1,783,642 |
State and municipal | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 319,765 | 296,405 |
Residential mortgage-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 299,956 | 293,848 |
Corporate | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 762,693 | 766,822 |
Commercial mortgage and asset-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 328,180 | 326,719 |
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 | 89,557 | 99,848 |
Recurring basis | ||
Equity securities: | ||
Bank loan participations | 160,880 | 147,604 |
Short-term investments | 51,198 | 130,289 |
Recurring basis | Fixed maturity securities | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 1,800,151 | 1,783,642 |
Recurring basis | State and municipal | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 319,765 | 296,405 |
Recurring basis | Residential mortgage-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 299,956 | 293,848 |
Recurring basis | Corporate | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 762,693 | 766,822 |
Recurring basis | Commercial mortgage and asset-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 328,180 | 326,719 |
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 | 89,557 | 99,848 |
Recurring basis | Equity securities | ||
Equity securities: | ||
Total equity securities | 90,877 | 88,975 |
Recurring basis | Preferred stock | ||
Equity securities: | ||
Total equity securities | 62,079 | 67,495 |
Recurring basis | Common stock | ||
Equity securities: | ||
Total equity securities | 28,798 | 21,480 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | ||
Equity securities: | ||
Bank loan participations | 0 | 0 |
Short-term investments | 0 | 0 |
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 | 89,118 | 99,384 |
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 |
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 |
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 |
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 |
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 | 89,118 | 99,384 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Equity securities | ||
Equity securities: | ||
Total equity securities | 21,464 | 15,793 |
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 | 21,464 | 15,793 |
Recurring basis | Significant Other Observable Inputs Level 2 | ||
Equity securities: | ||
Bank loan participations | 160,581 | 147,296 |
Short-term investments | 51,198 | 130,289 |
Recurring basis | Significant Other Observable Inputs Level 2 | Fixed maturity securities | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 1,711,033 | 1,684,258 |
Recurring basis | Significant Other Observable Inputs Level 2 | State and municipal | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 319,765 | 296,405 |
Recurring basis | Significant Other Observable Inputs Level 2 | Residential mortgage-backed | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 299,956 | 293,848 |
Recurring basis | Significant Other Observable Inputs Level 2 | Corporate | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 762,693 | 766,822 |
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 | 328,180 | 326,719 |
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 | 439 | 464 |
Recurring basis | Significant Other Observable Inputs Level 2 | Equity securities | ||
Equity securities: | ||
Total equity securities | 69,413 | 72,510 |
Recurring basis | Significant Other Observable Inputs Level 2 | Preferred stock | ||
Equity securities: | ||
Total equity securities | 62,079 | 67,495 |
Recurring basis | Significant Other Observable Inputs Level 2 | Common stock | ||
Equity securities: | ||
Total equity securities | 7,334 | 5,015 |
Recurring basis | Significant Unobservable Inputs Level 3 | ||
Equity securities: | ||
Bank loan participations | 299 | 308 |
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 | 0 |
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 |
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 |
Recurring basis | Significant Unobservable Inputs Level 3 | Corporate | ||
Fixed maturity securities, available-for-sale: | ||
Total fixed maturity securities, available-for-sale | 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 | |
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 |
Recurring basis | Significant Unobservable Inputs Level 3 | Equity securities | ||
Equity securities: | ||
Total equity securities | 0 | 672 |
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 | $ 0 | $ 672 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Securities Measured at Fair Value (Details) - Fair Value, Recurring - Available-for-sale fixed maturity securities and equity securities - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 980 | $ 43 |
Transfers out of Level 3 | 0 | 0 |
Transfers in to Level 3 | 0 | 358 |
Purchases | 0 | 703 |
Sales | (282) | 0 |
Maturities, calls and paydowns | (24) | (17) |
Amortization of discount | 0 | 3 |
Total gains or losses (realized/unrealized)-Included in earnings | (375) | (58) |
Total gains or losses (realized/unrealized)-Included in other comprehensive income | 0 | 0 |
Ending balance | $ 299 | $ 1,032 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | Mar. 31, 2021USD ($)bank_loan_participationsecurity | Dec. 31, 2020USD ($)bank_loan_participationsecurity | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Number of bank loan participations held | bank_loan_participation | 1 | 1 | ||
Number of equity securities held | security | 1 | 2 | ||
Recurring basis | Available-for-sale fixed maturity securities and equity securities | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Asset value | $ | $ 299 | $ 980 | $ 1,032 | $ 43 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||||
Fixed maturity securities, available-for-sale | $ 1,800,151 | $ 1,783,642 | ||
Equity securities | 90,877 | 88,975 | ||
Bank loan participations | 160,880 | 147,604 | ||
Cash and cash equivalents | 183,491 | 162,260 | ||
Restricted cash equivalents | 751,668 | 859,920 | $ 1,107,321 | $ 1,199,164 |
Liabilities | ||||
Senior debt | 262,300 | 262,300 | ||
Junior subordinated debt | 104,055 | 104,055 | ||
Carrying Value | ||||
Assets | ||||
Fixed maturity securities, available-for-sale | 1,800,151 | 1,783,642 | ||
Equity securities | 90,877 | 88,975 | ||
Bank loan participations | 160,880 | 147,604 | ||
Cash and cash equivalents | 183,491 | 162,260 | ||
Restricted cash equivalents | 751,668 | 859,920 | ||
Short-term investments | 51,198 | 130,289 | ||
Other invested assets – notes receivable | 13,500 | 4,500 | ||
Liabilities | ||||
Senior debt | 262,300 | 262,300 | ||
Junior subordinated debt | 104,055 | 104,055 | ||
Fair Value | ||||
Assets | ||||
Fixed maturity securities, available-for-sale | 1,800,151 | 1,783,642 | ||
Equity securities | 90,877 | 88,975 | ||
Bank loan participations | 160,880 | 147,604 | ||
Cash and cash equivalents | 183,491 | 162,260 | ||
Restricted cash equivalents | 751,668 | 859,920 | ||
Short-term investments | 51,198 | 130,289 | ||
Other invested assets – notes receivable | 17,767 | 5,302 | ||
Liabilities | ||||
Senior debt | 245,670 | 250,953 | ||
Junior subordinated debt | $ 101,553 | $ 110,612 |
Senior Debt (Details)
Senior Debt (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||
Drawn balance outstanding | $ 262,300,000 | $ 262,300,000 | |
2013 Facility | |||
Debt Instrument [Line Items] | |||
Amount drawn | $ 60,000,000 | ||
Unsecured Debt | 2013 Facility | |||
Debt Instrument [Line Items] | |||
Drawn balance outstanding | 185,800,000 | ||
Line of credit (up to) | 212,500,000 | ||
Line of Credit | 2013 Facility | |||
Debt Instrument [Line Items] | |||
Line of credit (up to) | 315,000,000 | ||
JRG Reinsurance Company, Ltd. | 2013 Facility | |||
Debt Instrument [Line Items] | |||
Amount of letters of credit issued | 89,700,000 | ||
JRG Reinsurance Company, Ltd. | 2017 Facility | |||
Debt Instrument [Line Items] | |||
Line of credit (up to) | 100,000,000 | ||
Amount drawn | $ 59,000,000 | ||
Amount of letters of credit issued | 15,200,000 | ||
JRG Reinsurance Company, Ltd. | Unsecured Debt | 2017 Facility | |||
Debt Instrument [Line Items] | |||
Drawn balance outstanding | $ 61,500,000 |
Capital Stock and Equity Awar_3
Capital Stock and Equity Awards - Common Shares (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercise of stock options (in shares) | 16,471 | |||
Common stock, shares outstanding (in shares) | 30,774,930 | 30,649,261 | ||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock unit dividend equivalents | $ 113 | $ 113 | ||
Dividends payable | $ 396 | $ 663 | ||
Common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common shares issued during period (in shares) | 125,669 | |||
Exercise of stock options (in shares) | 16,471 | |||
Vesting of RSUs (in shares) | 109,198 | 96,037 | ||
Common stock, shares outstanding (in shares) | 30,774,930 | 30,520,428 | 30,649,261 | 30,424,391 |
Capital Stock and Equity Awar_4
Capital Stock and Equity Awards - Schedule of Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2021 | Feb. 24, 2021 | Mar. 31, 2020 | Feb. 19, 2020 | Mar. 31, 2021 | Mar. 31, 2020 |
Stockholders' Equity Note [Abstract] | ||||||
Dividend declared per share (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | ||
Total Amount (thousands) | $ 9,345 | $ 9,269 |
Capital Stock and Equity Awar_5
Capital Stock and Equity Awards - Equity Incentive Plans (Details) - Non-qualified stock options | Mar. 31, 2021shares |
2014 LTIP | |
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 | 1,226,493 |
2014 Director Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum number of shares available for issuance | 150,000 |
Number of shares available for grant | 94,781 |
Capital Stock and Equity Awar_6
Capital Stock and Equity Awards - Summary of Option Activity (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Shares | ||
Exercised (in shares) | (16,471) | |
Weighted- Average Exercise Price | ||
Weighted-average remaining contractual life of options outstanding | 1 year 10 months 24 days | |
Weighted-average remaining contractual life of options exercisable | 1 year 10 months 24 days | |
Options | ||
Shares | ||
Beginning of period (in shares) | 463,324 | 643,851 |
Granted (in shares) | 0 | 0 |
Exercised (in shares) | (29,884) | 0 |
Forfeited (in shares) | 0 | 0 |
End of period (in shares) | 433,440 | 643,851 |
Exercisable, end of period (in shares) | 433,440 | 640,606 |
Weighted- Average Exercise Price | ||
Beginning of period (in dollars per share) | $ 32.25 | $ 30.41 |
Granted (in dollars per share) | 0 | 0 |
Exercised (in dollars per share) | 26.37 | 0 |
Forfeited (in dollars per share) | 0 | 0 |
End of period (in dollars per share) | 32.65 | 30.41 |
Exercisable, end of period (in dollars per share) | $ 32.65 | $ 30.35 |
Vesting period (in years) | 3 years | |
Contractual life (in years) | 7 years |
Capital Stock and Equity Awar_7
Capital Stock and Equity Awards - Summary of RSU Activity (Details) - RSUs - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Shares | ||
Unvested, beginning of period (in shares) | 399,856 | 340,368 |
Granted (in shares) | 138,936 | 179,016 |
Vested (in shares) | (161,004) | (142,830) |
Forfeited (in shares) | (1,089) | (1,188) |
Unvested, end of period (in shares) | 376,699 | 375,366 |
Weighted- Average Grant Date Fair Value | ||
Unvested, beginning of period (in dollars per share) | $ 43.59 | $ 41.50 |
Granted (in dollars per share) | 50.24 | 43.55 |
Vested (in dollars per share) | 41.89 | 41.16 |
Forfeited (in dollars per share) | 42.44 | 42.07 |
Unvested, end of period (in dollars per share) | $ 46.78 | $ 42.61 |
Vesting period (in years) | 3 years | |
Non-employee directors | ||
Weighted- Average Grant Date Fair Value | ||
Vesting period (in years) | 1 year |
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, 2021 | Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | ||
Share based compensation expense | $ 1,905 | $ 1,867 |
U.S. tax benefit on share based compensation expense | $ 294 | $ 250 |
Capital Stock and Equity Awar_9
Capital Stock and Equity Awards - Compensation Expense (Details) - RSUs $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share based compensation expense | $ 16.2 |
Weighted-average period of unrecognized share based compensation expense | 2 years 3 months 18 days |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - $ / shares | Jun. 30, 2021 | Jun. 14, 2021 | Apr. 27, 2021 |
Subsequent Event [Line Items] | |||
Cash dividend declared (in dollars per share) | $ 0.30 | ||
Dividends payable, date to be paid | Jun. 30, 2021 | ||
Dividend payable, record date | Jun. 14, 2021 |
Uncategorized Items - jrvr-2021
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |