Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 01, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | James River Group Holdings, Ltd. | |
Entity Central Index Key | 1,620,459 | |
Trading Symbol | jrvr | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 29,866,705 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fixed maturity securities: | ||
Available-for-sale, at fair value (amortized cost: 2018 – $1,054,902; 2017 – $1,008,662) | $ 1,043,251 | $ 1,016,098 |
Trading, at fair value (amortized cost: 2018 – $3,800; 2017 – $3,801) | 3,805 | 3,808 |
Equity securities available-for-sale, at fair value (cost: 2018 – $80,464; 2017 – $75,318) | 85,957 | 82,522 |
Bank loan participations held-for-investment, at amortized cost, net of allowance | 257,426 | 238,214 |
Short-term investments | 26,235 | 36,804 |
Other invested assets | 74,974 | 70,208 |
Total invested assets | 1,491,648 | 1,447,654 |
Cash and cash equivalents | 151,046 | 163,495 |
Accrued investment income | 8,713 | 8,381 |
Premiums receivable and agents’ balances, net | 391,456 | 352,436 |
Reinsurance recoverable on unpaid losses | 331,245 | 302,524 |
Reinsurance recoverable on paid losses | 16,501 | 11,292 |
Prepaid reinsurance premiums | 96,141 | 91,979 |
Deferred policy acquisition costs | 70,769 | 72,365 |
Intangible assets, net | 38,185 | 38,334 |
Goodwill | 181,831 | 181,831 |
Other assets | 84,475 | 86,404 |
Total assets | 2,862,010 | 2,756,695 |
Liabilities: | ||
Reserve for losses and loss adjustment expenses | 1,369,548 | 1,292,349 |
Unearned premiums | 432,248 | 418,114 |
Payables to reinsurers | 59,138 | 56,268 |
Senior debt | 98,300 | 98,300 |
Junior subordinated debt | 104,055 | 104,055 |
Accrued expenses | 35,138 | 39,295 |
Other liabilities | 77,813 | 53,615 |
Total liabilities | 2,176,240 | 2,061,996 |
Commitments and contingent liabilities | ||
Shareholders’ equity: | ||
Common Shares – 2018 and 2017: $0.0002 par value; 200,000,000 shares authorized; 29,866,705 and 29,696,682 shares issued and outstanding, respectively | 6 | 6 |
Preferred Shares – 2018 and 2017: $0.00125 par value; 20,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 639,183 | 636,149 |
Retained earnings | 58,753 | 48,198 |
Accumulated other comprehensive (loss) income | (12,172) | 10,346 |
Total shareholders’ equity | 685,770 | 694,699 |
Total liabilities and shareholders’ equity | $ 2,862,010 | $ 2,756,695 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Available-for-sale debt securities, amortized cost | $ 1,054,902 | $ 1,008,662 |
Trading securities, debt, amortized cost | 3,800 | 3,801 |
Available-for-sale equity securities, amortized cost | $ 80,464 | $ 75,318 |
Common stock, par value (in dollars per share) | $ 0.0002 | $ 0.0002 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 29,866,705 | 29,696,682 |
Common stock, shares outstanding | 29,866,705 | 29,696,682 |
Preferred stock par value (in dollars per share) | $ 0.00125 | $ 0.00125 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Gross written premiums | $ 298,116 | $ 224,179 |
Ceded written premiums | (87,138) | (66,269) |
Net written premiums | 210,978 | 157,910 |
Change in net unearned premiums | (10,036) | (3,223) |
Net earned premiums | 200,942 | 154,687 |
Net investment income | 13,256 | 16,733 |
Net realized and unrealized (losses) gains on investments | (810) | 1,047 |
Other income | 4,956 | 3,935 |
Total revenues | 218,344 | 176,402 |
Expenses | ||
Losses and loss adjustment expenses | 143,772 | 105,369 |
Other operating expenses | 54,783 | 48,893 |
Other expenses | 4 | (114) |
Interest expense | 2,522 | 2,123 |
Amortization of intangible assets | 149 | 149 |
Total expenses | 201,230 | 156,420 |
Income before taxes | 17,114 | 19,982 |
Income tax expense | 1,481 | 1,532 |
Net income | 15,633 | 18,450 |
Other comprehensive (loss) income: | ||
Net unrealized (losses) gains, net of taxes of $(544) in 2018 and $1,514 in 2017 | (18,547) | 4,034 |
Total comprehensive (loss) income | $ (2,914) | $ 22,484 |
Per share data: | ||
Basic earnings per share (in dollars per share) | $ 0.53 | $ 0.63 |
Diluted earnings per share (in dollars per share) | 0.52 | 0.61 |
Dividend declared per share (in dollars per share) | $ 0.30 | $ 0.30 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 29,764,320 | 29,289,588 |
Diluted (in shares) | 30,193,303 | 30,327,423 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Tax on net unrealized gains (losses) | $ (544) | $ 1,514 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income |
Balance (in shares) at Dec. 31, 2016 | 29,257,566 | ||||
Balance at Dec. 31, 2016 | $ 693,221 | $ 6 | $ 636,856 | $ 55,232 | $ 1,127 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 18,450 | 18,450 | |||
Other comprehensive income | 4,034 | 4,034 | |||
Dividends | (8,810) | (8,810) | |||
Exercised (in shares) | 63,467 | ||||
Exercise of stock options | 198 | 198 | |||
Vesting of RSUs (in shares) | 23,294 | ||||
Vesting of RSUs | (627) | (627) | |||
Compensation expense under share incentive plans | 1,794 | 1,794 | |||
Balance (in shares) at Mar. 31, 2017 | 29,344,327 | ||||
Balance at Mar. 31, 2017 | $ 708,260 | $ 6 | 638,221 | 64,872 | 5,161 |
Balance (in shares) at Dec. 31, 2017 | 29,696,682 | 29,696,682 | |||
Balance at Dec. 31, 2017 | $ 694,699 | $ 6 | 636,149 | 48,198 | 10,346 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 15,633 | 15,633 | |||
Net income | ASU 2016-01 | (1,400) | ||||
Other comprehensive income | (18,547) | (18,547) | |||
Dividends | (9,049) | (9,049) | |||
Exercised (in shares) | 127,196 | ||||
Exercise of stock options | 2,355 | 2,355 | |||
Vesting of RSUs (in shares) | 42,827 | ||||
Vesting of RSUs | (776) | (776) | |||
Compensation expense under share incentive plans | $ 1,455 | 1,455 | |||
Balance (in shares) at Mar. 31, 2018 | 29,866,705 | 29,866,705 | |||
Balance at Mar. 31, 2018 | $ 685,770 | $ 6 | $ 639,183 | 58,753 | (12,172) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect of adoption of ASU | ASU 2016-01 | 0 | 4,682 | (4,682) | ||
Cumulative effect of adoption of ASU | ASU 2018-02 | $ 0 | $ (711) | $ 711 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating activities | ||
Net cash provided by operating activities | $ 48,461 | $ 16,112 |
Securities available-for-sale: | ||
Purchases – fixed maturity securities | (118,652) | (46,276) |
Sales – fixed maturity securities | 26,392 | 32,148 |
Maturities and calls – fixed maturity securities | 45,245 | 15,406 |
Purchases – equity securities | (5,949) | 0 |
Sales – equity securities | 766 | 409 |
Bank loan participations: | ||
Purchases | (66,059) | (75,983) |
Sales | 35,708 | 37,462 |
Maturities | 11,427 | 18,840 |
Other invested assets: | ||
Purchases | (4,992) | (250) |
Short-term investments, net | 10,569 | (2,517) |
Securities receivable or payable, net | 12,576 | (336) |
Purchases of property and equipment | (275) | (970) |
Net cash used in investing activities | (53,244) | (22,067) |
Financing activities | ||
Dividends paid | (9,074) | (8,885) |
Issuance of common shares under equity incentive plans | 2,862 | 303 |
Common share repurchases | (1,283) | (732) |
Repayments of financing obligations net of proceeds | (171) | (291) |
Net cash used in financing activities | (7,666) | (9,605) |
Change in cash and cash equivalents | (12,449) | (15,560) |
Cash and cash equivalents at beginning of period | 163,495 | 109,784 |
Cash and cash equivalents at end of period | 151,046 | 94,224 |
Supplemental information | ||
Interest paid | $ 2,509 | $ 2,101 |
Accounting Policies
Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
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 six insurance companies based in the United States (“U.S.”) focused on specialty insurance niches and two Bermuda-based reinsurance companies as described below: • James River Group Holdings UK Limited (“James River UK”) is an insurance holding company formed in 2015 in the United Kingdom (“U.K.”). JRG Holdings contributed James River Group, Inc. (“James River Group”), a U.S. insurance holding company, to James River UK in 2015. • James River Group is a Delaware domiciled insurance holding company formed in 2002 which owns all of the Company’s U.S.-based subsidiaries, either directly or indirectly through one of its wholly-owned U.S. subsidiaries. James River Group oversees the Company’s U.S. insurance operations and maintains all of the outstanding debt in the U.S. • James River Insurance Company is an Ohio domiciled excess and surplus lines insurance company that, with its wholly-owned insurance subsidiary, James River Casualty Company, is authorized to write business in every state and the District of Columbia. • Falls Lake National Insurance Company (“Falls Lake National”) is an Ohio domiciled insurance company which wholly owns Stonewood Insurance Company (“Stonewood Insurance”), a North Carolina domiciled company, Falls Lake General Insurance Company, an Ohio domiciled company, and Falls Lake Fire and Casualty Company, a California domiciled company. Falls Lake National began writing specialty admitted fronting and program business in late 2013. Falls Lake Fire and Casualty began operations in 2016. • 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. • Carolina Re Ltd (“Carolina Re”) was formed in 2018 and provides reinsurance to the Company’s U.S.-based insurance subsidiaries. Carolina Re has entered into 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, 2017 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, 2017 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 $32.6 million and $32.1 million as of March 31, 2018 and December 31, 2017 , respectively, representing the Company’s maximum exposure to loss. Income Tax Expense Our effective tax rate fluctuates from period to period based on the relative mix of income reported by country and the respective tax rates imposed by each tax jurisdiction. For the three months ended March 31, 2018 and 2017 , our U.S. federal income tax expense was 8.7% and 7.7% of income before taxes, respectively. For U.S.-sourced income, the Company’s U.S. federal income tax expense differs from the amounts computed by applying the federal statutory income tax rate (21% in 2018 and 35% in 2017) to income before taxes due primarily to interest income on tax-advantaged state and municipal securities (state and municipal securities represent 12.4% and 10.9% of our available-for-sale securities at March 31, 2018 and 2017 , respectively), dividends received income, and excess tax benefits on share based compensation. Financial results reflect provisional amounts related to the December 2017 enactment of the Tax Cuts and Jobs Act of 2017 ( “ TCJA ” ). These provisional estimates are based on the Company’s initial analysis and current interpretation of the legislation. Given the complexity of the legislation, anticipated guidance from the U.S. Treasury, and the potential for additional guidance from the SEC or the Financial Accounting Standards Board ( “FASB”) , these estimates may be adjusted during 2018. Adopted Accounting Standards Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) . The guidance applies to all companies that either enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards, such as insurance contracts. Under this guidance, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Judgments required in adopting this update may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The adoption of ASU 2014-09 had no impact on reported fee income and there was no cumulative effect of initially applying the update. Effective January 1, 2018, the Company adopted ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . Among other things, this ASU requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Upon adoption on January 1, 2018, the Company made a $4.7 million cumulative-effect adjustment to increase retained earnings and reduce accumulated other comprehensive income. The adoption of ASU 2016-01 did not materially impact the Company's financial position, cash flows, or total comprehensive income. The Company's results of operations were impacted as changes in fair value of equity instruments are now presented in net income rather than other comprehensive (loss) income. For the three months ended March 31, 2018, the impact was a $1.4 million reduction in net income and a $0.05 reduction in basic and diluted earnings per share. Effective January 1, 2018, the Company adopted ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This update was issued as a result of the enactment of the TCJA on December 22, 2017. The ASU allows for the option to reclassify the stranded tax effects resulting from the implementation of the TCJA out of accumulated other comprehensive income and into retained earnings. As the adoption of ASU 2016-01 in 2018 resulted in the reclassification of the entire unrealized balance on equity securities from accumulated other comprehensive income into retained earnings, only the stranded tax effects on the unrealized balances of fixed income securities were impacted by the adoption of ASU 2018-02. The reclassification resulted in a $711,000 decrease to the Company's retained earnings with a corresponding increase to accumulated other comprehensive income in the first quarter of 2018. Prospective Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Under current guidance for lessees, leases are only included on the balance sheet if certain criteria, classifying the agreement as a capital lease, are met. This update will require the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. Upon adoption, leases will be recognized and measured at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating ASU 2016-02 to determine the potential impact that adopting this standard will have on its financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Current GAAP delays the recognition of credit losses until it is probable a loss has been incurred. The update will require financial assets measured at amortized cost, such as bank loan participations held for investment, to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which fair value is below amortized cost. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Upon adoption, this ASU will be applied using the modified-retrospective approach, by which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period presented. The Company has not yet completed the analysis of how adopting this ASU will affect the Company’s financial statements. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2018 | |
Investments [Abstract] | |
Investments | Investments The Company’s available-for-sale investments are summarized as follows: Cost or Gross Gross Fair (in thousands) March 31, 2018 Fixed maturity securities: State and municipal $ 137,478 $ 4,029 $ (1,782 ) $ 139,725 Residential mortgage-backed 186,279 509 (5,690 ) 181,098 Corporate 445,058 3,054 (8,486 ) 439,626 Commercial mortgage and asset-backed 192,941 173 (2,310 ) 190,804 Obligations of U.S. government corporations and agencies 7,804 — (29 ) 7,775 U.S. Treasury securities and obligations guaranteed by the U.S. government 83,317 73 (1,171 ) 82,219 Redeemable preferred stock 2,025 — (21 ) 2,004 Total fixed maturity securities 1,054,902 7,838 (19,489 ) 1,043,251 Equity securities 80,464 6,845 (1,352 ) 85,957 Total investments available-for-sale $ 1,135,366 $ 14,683 $ (20,841 ) $ 1,129,208 December 31, 2017 Fixed maturity securities: State and municipal $ 139,382 $ 5,587 $ (603 ) $ 144,366 Residential mortgage-backed 160,379 723 (2,441 ) 158,661 Corporate 408,857 7,503 (2,639 ) 413,721 Commercial mortgage and asset-backed 182,595 714 (698 ) 182,611 Obligations of U.S. government corporations and agencies 35,948 — (101 ) 35,847 U.S. Treasury securities and obligations guaranteed by the U.S. government 79,476 37 (639 ) 78,874 Redeemable preferred stock 2,025 — (7 ) 2,018 Total fixed maturity securities 1,008,662 14,564 (7,128 ) 1,016,098 Equity securities 75,318 7,830 (626 ) 82,522 Total investments available-for-sale $ 1,083,980 $ 22,394 $ (7,754 ) $ 1,098,620 The amortized cost and fair value of available-for-sale investments in fixed maturity securities at March 31, 2018 are summarized, by contractual maturity, as follows: Cost or Fair (in thousands) One year or less $ 33,850 $ 33,743 After one year through five years 327,069 323,368 After five years through ten years 185,400 181,026 After ten years 127,338 131,208 Residential mortgage-backed 186,279 181,098 Commercial mortgage and asset-backed 192,941 190,804 Redeemable preferred stock 2,025 2,004 Total $ 1,054,902 $ 1,043,251 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, 2018 Fixed maturity securities: State and municipal $ 61,275 $ (1,325 ) $ 10,454 $ (457 ) $ 71,729 $ (1,782 ) Residential mortgage-backed 90,188 (1,743 ) 79,455 (3,947 ) 169,643 (5,690 ) Corporate 260,523 (5,309 ) 64,506 (3,177 ) 325,029 (8,486 ) Commercial mortgage and asset-backed 94,429 (1,578 ) 22,658 (732 ) 117,087 (2,310 ) Obligations of U.S. government corporations and agencies — — 7,775 (29 ) 7,775 (29 ) U.S. Treasury securities and obligations guaranteed by the U.S. government 53,118 (913 ) 18,080 (258 ) 71,198 (1,171 ) Redeemable preferred stock 2,004 (21 ) — — 2,004 (21 ) Total fixed maturity securities 561,537 (10,889 ) 202,928 (8,600 ) 764,465 (19,489 ) Equity securities 17,816 (811 ) 5,685 (541 ) 23,501 (1,352 ) Total investments available-for-sale $ 579,353 $ (11,700 ) $ 208,613 $ (9,141 ) $ 787,966 $ (20,841 ) December 31, 2017 Fixed maturity securities: State and municipal $ 40,117 $ (318 ) $ 10,662 $ (285 ) $ 50,779 $ (603 ) Residential mortgage-backed 50,447 (261 ) 84,193 (2,180 ) 134,640 (2,441 ) Corporate 113,464 (846 ) 66,954 (1,793 ) 180,418 (2,639 ) Commercial mortgage and asset-backed 53,965 (244 ) 25,299 (454 ) 79,264 (698 ) Obligations of U.S. government corporations and agencies 3,024 (1 ) 32,154 (100 ) 35,178 (101 ) U.S. Treasury securities and obligations guaranteed by the U.S. government 50,760 (430 ) 26,707 (209 ) 77,467 (639 ) Redeemable preferred stock 2,018 (7 ) — — 2,018 (7 ) Total fixed maturity securities 313,795 (2,107 ) 245,969 (5,021 ) 559,764 (7,128 ) Equity securities 5,859 (65 ) 5,665 (561 ) 11,524 (626 ) Total investments available-for-sale $ 319,654 $ (2,172 ) $ 251,634 $ (5,582 ) $ 571,288 $ (7,754 ) The Company held securities of 205 issuers that were in an unrealized loss position at March 31, 2018 with a total fair value of $788.0 million and gross unrealized losses of $20.8 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, 2018 , 99.9% 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, 2018 had an aggregate fair value of $868,000 and an aggregate net unrealized loss of $26,000 . Management concluded that none of the fixed maturity securities with an unrealized loss at March 31, 2018 or December 31, 2017 experienced an other-than-temporary impairment. Management does not intend to sell available-for-sale 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. A t December 31, 2017 , management concluded that one equity security, based on the severity and duration of the impairment, had experienced an other-than-temporary impairment. Accordingly, the Company recorded an impairment loss of $1.5 million in 2017. Management concluded that none of the other equity securities with an unrealized loss at December 31, 2017 experienced an other-than-temporary impairment. At December 31, 2017 , the Company held a participation in a loan with unpaid principal of $807,000 issued by a company that produces and supplies power to Puerto Rico through a power purchase agreement with Puerto Rico Electric Power Authority (“PREPA”), a public corporation and governmental agency of the Commonwealth of Puerto Rico. Management concluded that an allowance for credit losses should be established on the loan at December 31, 2017 to reduce its carrying value to $0 . In the first quarter of 2018, the full outstanding principal on the loan was repaid and the Company recognized a realized gain of $807,000 on the repayment. The Company’s bank loan portfolio includes loans to oil and gas companies in the energy sector. The market values of these loans were previously impacted by declining energy prices. At March 31, 2018 , the Company’s oil and gas exposure in the bank loan portfolio was in three loans with a carrying value of $4.7 million and an unrealized loss of $143,000 . All of the loans were current at March 31, 2018 . Management concluded that two of these loans were impaired as of March 31, 2018 . At March 31, 2018 , the two impaired loans had a carrying value of $1.7 million , unpaid principal of $2.1 million and an allowance for credit losses of $300,000 . At December 31, 2017 , three loans were impaired with a carrying value of $4.6 million , unpaid principal of $6.9 million and an allowance for credit losses of $2.3 million . Management concluded that one non-energy sector loan was impaired at December 31, 2017 . At December 31, 2017 , the impaired loan had a carrying value of $561,000 , unpaid principal of $706,000 , and an allowance for credit losses of $145,000 . The aggregate allowance for credit losses was $300,000 at March 31, 2018 on impaired loans from two issuers with a total carrying value of $1.7 million and unpaid principal of $2.1 million . At December 31, 2017 , the aggregate allowance for credit losses was $3.2 million on impaired loans from five issuers with a total carrying value of $5.1 million and unpaid principal of $8.4 million . The aggregate allowance for credit losses on impaired loans was $639,000 at March 31, 2017 and $943,000 at December 31, 2016. Bank loan participations generally have a credit rating that is below investment grade (i.e. below “BBB-” for Standard & Poor’s) at the date of purchase. These bank loans are primarily senior, secured floating-rate debt rated “BB”, “B”, or “CCC” by Standard & Poor’s or an equivalent rating from another nationally recognized rating agency. These bank loans include assignments of, and participations in, performing and non-performing senior corporate debt generally acquired through primary bank syndications and in secondary markets. Bank loans consist of, but are not limited to, term loans, the funded and unfunded portions of revolving credit loans, and other similar loans and investments. Management believed that it was probable at the time that these loans were acquired that the Company would be able to collect all contractually required payments receivable. Generally, the accrual of interest on a bank loan participation is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest. A bank loan participation may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. Generally, bank loan participations are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt. Interest received on nonaccrual loans generally is reported as investment income. There were no bank loans on nonaccrual status at March 31, 2018 or December 31, 2017 . The allowance for credit losses is maintained at a level believed adequate by management to absorb estimated probable credit losses. Management’s periodic evaluation of the adequacy of the allowance is based on consultations and a dvice of the Company’s independent investment manager, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, current economic conditions, and other relevant factors. The Company generally records an allowance equal to the difference between the fair value and the amortized cost of bank loans that it has determined to be impaired as a practical expedient for an estimate of probable future cash flows to be collected on those bank loans. Bank loans are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The average recorded investment in impaired bank loans was $3.4 million and $5.3 million during the three months ended March 31, 2018 and 2017 , respectively. Investment income of $20,000 and $84,000 , respectively, was recognized during the time within those periods that the loans were impaired. The Company recorded net realized investment gains of $3,000 and $177,000 in the three months ended March 31, 2018 and 2017 , respectively, for changes in the fair value of impaired bank loans. Changes in unrealized gains or losses on securities held for trading are recorded as trading gains or losses within net investment income. Net investment income for the three months ended March 31, 2018 includes $3,000 of net trading losses, all relating to securities still held at March 31, 2018 . The Company’s realized gains and losses are summarized as follows: Three Months Ended 2018 2017 (in thousands) Fixed maturity securities: Gross realized gains $ 22 $ 338 Gross realized losses (223 ) (296 ) (201 ) 42 Bank loan participations: Gross realized gains 1,220 1,136 Gross realized losses (100 ) (539 ) 1,120 597 Equity securities: Gross realized gains — 409 Gross realized losses (15 ) — Changes in fair values of equity securities (1,710 ) — (1,725 ) 409 Short-term investments and other: Gross realized gains — — Gross realized losses (4 ) (1 ) (4 ) (1 ) Total $ (810 ) $ 1,047 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 2018 2017 2018 2017 (in thousands) Renewable energy LLCs (a) $ 32,592 $ 32,063 $ 1,211 $ 5,594 Renewable energy notes receivable ( b) 8,750 7,278 297 — Limited partnerships (c) 29,132 26,367 226 382 Bank holding companies (d) 4,500 4,500 86 86 Total other invested assets $ 74,974 $ 70,208 $ 1,820 $ 6,062 (a) The Company’s Corporate and Other segment owns equity interests ranging from 2.6% to 32.8% 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 affiliate of the Company’s largest shareholder and the Company’s Non-Exucitive 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 $1.2 million and $1.6 million in the three months ended March 31, 2018 and 2017 , respectively. (b) The Company has invested in notes receivable for renewable energy projects. At March 31, 2018 , the Company holds an $8.8 million note issued by an affiliate of the Company’s largest shareholder. Interest on the note, which matures in 2021, is fixed at 15.0% . Interest income on the note was $297,000 for the three months ended March 31, 2018 . (c) The Company owns investments in limited partnerships that invest in concentrated portfolios including publicly-traded small cap equities, loans of middle market private equity sponsored companies, equity tranches of collateralized loan obligations ( “ CLOs ” ), and tranches of distressed home loans. Income f rom the partnerships is recognized under the equity method of accounting. The Company’s Corporate and Other segment held an investment in a limited partnership with a carrying value of $2.9 million at March 31, 2018 . The Company recognized investment losses of $125,000 and investment income of $68,000 on the investment for the three months ended March 31, 2018 and 2017 , respectively. The Company’s Excess and Surplus Lines segment holds investments in limited partnerships of $26.3 million at March 31, 2018 . Investment income of $351,000 and $314,000 was recognized on the investments for the three months ended March 31, 2018 and 2017 , respectively. At March 31, 2018 , the Company’s Excess and Surplus Lines segment has outstanding commitments to invest another $2.6 million in these limited partnerships. (d) The Company holds $4.5 million of subordinated notes issued by a bank holding company. Interest on the notes, which mature on August 12, 2023, is fixed at 7.6% per annum. Interest income on the notes was $86,000 in both three months ended March 31, 2018 and 2017 . The Company’s Chairman was previously the Lead Independent Director of the bank holding company and an investor in the bank holding company. Additionally, one of the Company’s directors was an investor in the bank holding company and is currently a lender to the bank holding company. At March 31, 2018 , the Company held an investment in a CLO where one of the underlying loans was issued by the bank holding company. The investment, with a carrying value of $4.7 million at March 31, 2018 , is classified as an available-for-sale fixed maturity. The Company previously held common shares issued by the bank holding company. Realized investments gains of $409,000 were recognized in the three months ended March 31, 2017 related to the sale of common shares of the bank holding company. The Company holds a $1.0 million certificate of deposit issued by the bank holding company. The certificate of deposit, which matures on December 19, 2018, is carried as a short-term investment. Interest income of $0 and $1,000 was recognized on this investment for the three months ended March 31, 2018 and 2017 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
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 $181.8 million at March 31, 2018 and December 31, 2017 . The gross carrying amounts and accumulated amortization for each major specifically identifiable intangible asset class were as follows: March 31, 2018 December 31, 2017 Life Gross Accumulated Gross Accumulated ($ in thousands) Intangible Assets Trademarks Indefinite $ 22,200 $ — $ 22,200 $ — Insurance licenses and authorities Indefinite 9,164 — 9,164 — Identifiable intangibles not subject to amortization 31,364 — 31,364 — Broker relationships 24.6 11,611 4,790 11,611 4,641 Identifiable intangible assets subject to amortization 11,611 4,790 11,611 4,641 $ 42,975 $ 4,790 $ 42,975 $ 4,641 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following represents a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations contained in the condensed consolidated financial statements: Three Months Ended 2018 2017 (in thousands, except share and per share amounts) Net income to shareholders $ 15,633 $ 18,450 Weighted average common shares outstanding: Basic 29,764,320 29,289,588 Common share equivalents 428,983 1,037,835 Diluted 30,193,303 30,327,423 Earnings per share: Basic $ 0.53 $ 0.63 Common share equivalents (0.01 ) (0.02 ) Diluted $ 0.52 $ 0.61 Common share equivalents relate to stock options and restricted share units (“RSU’s”). For the three months ended March 31, 2018 and 2017, common share equivalents of 192,817 and 97,755 shares, respectively, were excluded from the calculations of diluted earnings per share as their effects were anti-dilutive. |
Reserve for Losses and Loss Adj
Reserve for Losses and Loss Adjustment Expenses | 3 Months Ended |
Mar. 31, 2018 | |
Liability for Claims and Claims Adjustment Expense [Abstract] | |
Reserve for Losses and Loss Adjustment Expenses | Reserve for Losses and Loss Adjustment Expenses The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses, net of reinsurance, to the gross amounts reported in the condensed consolidated balance sheets: Three Months Ended 2018 2017 (in thousands) Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period $ 989,825 $ 761,128 Add: Incurred losses and loss adjustment expenses net of reinsurance: Current year 146,382 108,783 Prior years (2,610 ) (3,414 ) Total incurred losses and loss and adjustment expenses 143,772 105,369 Deduct: Loss and loss adjustment expense payments net of reinsurance: Current year 12,177 3,698 Prior years 83,117 71,018 Total loss and loss adjustment expense payments 95,294 74,716 Reserve for losses and loss adjustment expenses net of reinsurance recoverables at end of period 1,038,303 791,781 Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period 331,245 188,782 Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period $ 1,369,548 $ 980,563 The Company experienced $2.6 million of favorable reserve development in the three months ended March 31, 2018 on the reserve for losses and loss adjustment expenses held at December 31, 2017 . This reserve development included $1.1 million of favorable development in the Excess and Surplus Lines segment, primarily from the 2016 and 2017 accident years. This favorable development occurred because our actuarial studies at March 31, 2018 for the Excess and Surplus Lines segment indicated that our loss experience on our casualty business continues to be below our initial expected loss ratios. The Specialty Admitted Insurance segment experienced $1.3 million of favorable development, primarily due to favorable development in the workers' compensation business for the 2014 through 2016 accident years. The Company also experienced $176,000 of favorable development in the Casualty Reinsurance segment. The Company experienced $3.4 million of favorable reserve development in the three months ended March 31, 2017 on the reserve for losses and loss adjustment expenses held at December 31, 2016 . This reserve development included $3.2 million of favorable development in the Excess and Surplus Lines segment, primarily from the 2016 and 2014 accident years which were partially offset by adverse development in the 2006 accident year. This favorable development occurred because our actuarial studies at March 31, 2017 for the Excess and Surplus Lines segment indicated that our loss experience on our casualty business continues to be below our initial expected loss ratios. In addition, the Specialty Admitted Insurance segment experienced $42,000 of favorable development and the Casualty Reinsurance segment experienced $145,000 of favorable development. |
Other Comprehensive Income
Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2018 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Other Comprehensive Income | Other Comprehensive (Loss) Income The following table summarizes the components of other comprehensive income: Three Months Ended 2018 2017 (in thousands) Unrealized (losses) gains arising during the period, before U.S. income taxes $ (19,292 ) $ 5,998 U.S. income taxes 544 (1,636 ) Unrealized (losses) gains arising during the period, net of U.S. income taxes (18,748 ) 4,362 Less reclassification adjustment: Net realized investment (losses) gains (201 ) 450 U.S. income tax expenses — (122 ) Reclassification adjustment for investment (losses) gains realized in net income (201 ) 328 Other comprehensive (loss) income $ (18,547 ) $ 4,034 |
Contingent Liabilities
Contingent Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | Contingent Liabilities The Company is a party to various lawsuits arising in the ordinary course of its operations. The Company believes that the ultimate resolution of these matters will not materially impact its financial position, cash flows, or results of operations. The Company’s reinsurance subsidiary, JRG Re, has entered into three letter of credit facilities with banks as security to third-party reinsureds on reinsurance assumed by JRG Re. JRG Re has established custodial accounts to secure these letters of credit. Under a $100.0 million facility, $52.2 million of letters of credit were issued through March 31, 2018 which were secured by deposits of $64.2 million . Under a $102.5 million facility, $98.6 million of letters of credit were issued through March 31, 2018 which were secured by deposits of $125.9 million . Under a $100.0 million facility, $6.9 million of letters of credit were issued through March 31, 2018 which were secured by deposits of $10.0 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 $283.1 million at March 31, 2018 . The Company is also exposed to credit risk relating to a set of insurance contracts with an insured group of companies under which the Company pays losses and loss adjustment expenses on the contract. The Company has indemnity agreements with this group of insured parties (non-insurance entities) and is contractually entitled to receive reimbursement for a significant portion of the losses and loss adjustment expenses paid on behalf of the insured parties and other expenses incurred by the Company. The insured parties are required to collateralize all amounts currently due to the Company and to provide additional collateral sufficient to cover the amounts that may be recoverable under the indemnity agreement, including among other things case loss and loss adjustment expense reserves, IBNR loss and loss adjustment expense reserves, extra contractual obligations and excess of policy limits liabilities. This collateral is currently provided through a collateral trust arrangement established in favor of the Company by a captive insurance company affiliate of the insured group. At March 31, 2018 , the cash equivalent collateral held in the collateral trust arrangement was approximately $860.6 million , which exceeds the amount of claims receivable and unpaid reported losses and loss adjustment expenses outstanding. This is a rapidly growing relationship, and as such, there is ongoing exposure to estimated losses and expenses on these contracts growing at a faster pace than growth in our collateral balances. In addition, we have credit exposure if our estimates of future losses and loss adjustment expenses and other amounts recoverable, which are the basis for establishing collateral balances, are lower than actual amounts paid or payable. The amount of our credit exposure in any of these instances could be material. To mitigate these risks, we closely and frequently monitor our exposure compared to our collateral held, and we request additional collateral when our analysis indicates that we have uncollateralized exposure. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company has four reportable segments: the Excess and Surplus Lines segment, the Specialty Admitted Insurance segment, the Casualty Reinsurance segment, and the Corporate and Other segment. Segment profit (loss) is measured by underwriting profit (loss), which is generally defined as net earned premiums less loss and loss adjustment expenses and other operating expenses of the operating segments. Gross fee income of the Excess and Surplus Lines segment is included in that segment’s underwriting profit. For the three months ended March 31, 2018 and 2017 , gross fee income of $4.8 million and $3.8 million , respectively, was included in underwriting profit. 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, 2018 Gross written premiums $ 167,486 $ 87,401 $ 43,229 $ — $ 298,116 Net earned premiums 129,971 13,340 57,631 — 200,942 Underwriting profit of insurance segments 11,299 1,623 1,744 — 14,666 Net investment income 3,042 711 8,017 1,486 13,256 Interest expense — — — 2,522 2,522 Segment revenues 137,327 13,955 65,526 1,536 218,344 Segment goodwill 181,831 — — — 181,831 Segment assets 909,963 495,096 1,368,872 88,079 2,862,010 Three Months Ended March 31, 2017 Gross written premiums $ 108,995 $ 72,464 $ 42,720 $ — $ 224,179 Net earned premiums 93,849 16,253 44,585 — 154,687 Underwriting profit of insurance segments 8,800 842 1,093 — 10,735 Net investment income 3,183 636 7,124 5,790 16,733 Interest expense — — — 2,123 2,123 Segment revenues 101,090 16,924 52,146 6,242 176,402 Segment goodwill 181,831 — — — 181,831 Segment assets 749,617 335,806 1,211,896 114,006 2,411,325 The following table reconciles the underwriting profit of the operating segments by individual segment to consolidated income before taxes: Three Months Ended 2018 2017 (in thousands) Underwriting profit of the insurance segments: Excess and Surplus Lines $ 11,299 $ 8,800 Specialty Admitted Insurance 1,623 842 Casualty Reinsurance 1,744 1,093 Total underwriting profit of insurance segments 14,666 10,735 Other operating expenses of the Corporate and Other segment (7,431 ) (6,461 ) Underwriting profit 7,235 4,274 Net investment income 13,256 16,733 Net realized investment (losses) gains (810 ) 1,047 Amortization of intangible assets (149 ) (149 ) Other income and expenses 104 200 Interest expense (2,522 ) (2,123 ) Income before taxes $ 17,114 $ 19,982 |
Other Operating Expenses and Ot
Other Operating Expenses and Other Expenses | 3 Months Ended |
Mar. 31, 2018 | |
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 2018 2017 (in thousands) Amortization of policy acquisition costs $ 30,198 $ 27,638 Other underwriting expenses of the operating segments 17,154 14,794 Other operating expenses of the Corporate and Other segment 7,431 6,461 Total $ 54,783 $ 48,893 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Three levels of inputs are used to measure fair value of financial instruments: (1) Level 1: quoted price (unadjusted) in active markets for identical assets, (2) Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument, and (3) Level 3: inputs to the valuation methodology are unobservable for the asset or liability. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. To measure fair value, the Company obtains quoted market prices for its investment securities from its outside investment managers. If a quoted market price is not available, the Company uses prices of similar securities. Values for U.S. Treasury and publicly-traded equity securities are generally based on Level 1 inputs which use the market approach valuation technique. The values for all other fixed maturity securities (including state and municipal securities and obligations of U.S. government corporations and agencies) generally incorporate significant Level 2 inputs, and in some cases, Level 3 inputs, using the market approach and income approach valuation techniques. There have been no changes in the Company’s use of valuation techniques since December 31, 2016. The Company reviews fair value prices provided by its outside investment managers for reasonableness by comparing the fair values provided by the managers to those provided by its investment custodian. The Company also reviews and monitors changes in unrealized gains and losses. The Company has not historically adjusted security prices. The Company obtains an understanding of the methods, models and inputs used by the investment managers and independent pricing services, and controls are in place to validate that prices provided represent fair values. The Company’s control process includes, but is not limited to, initial and ongoing evaluation of the methodologies used, a review of specific securities and an assessment for proper classification within the fair value hierarchy, and obtaining and reviewing internal control reports for our investment manager that obtains fair values from independent pricing services. Assets measured at fair value on a recurring basis as of March 31, 2018 are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) Available-for-sale securities: Fixed maturity securities: State and municipal $ — $ 139,725 $ — $ 139,725 Residential mortgage-backed — 181,098 — 181,098 Corporate — 439,626 — 439,626 Commercial mortgage and asset-backed — 186,124 4,680 190,804 Obligations of U.S. government corporations and agencies — 7,775 — 7,775 U.S. Treasury securities and obligations guaranteed by the U.S. government 81,640 579 — 82,219 Redeemable preferred stock — 2,004 — 2,004 Total fixed maturity securities 81,640 956,931 4,680 1,043,251 Equity securities: Preferred stock — 67,709 — 67,709 Common stock 14,732 3,516 — 18,248 Total equity securities 14,732 71,225 — 85,957 Total available-for-sale securities $ 96,372 $ 1,028,156 $ 4,680 $ 1,129,208 Trading securities: Fixed maturity securities $ — $ 3,805 $ — $ 3,805 Short-term investments $ 1,000 $ 25,235 $ — $ 26,235 Assets measured at fair value on a recurring basis as of December 31, 2017 are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) Available-for-sale securities: Fixed maturity securities: State and municipal $ — $ 144,366 $ — $ 144,366 Residential mortgage-backed — 158,661 — 158,661 Corporate — 413,721 — 413,721 Commercial mortgage and asset-backed — 177,931 4,680 182,611 Obligations of U.S. government corporations and agencies — 35,847 — 35,847 U.S. Treasury securities and obligations guaranteed by the U.S. government 78,265 609 — 78,874 Redeemable preferred stock — 2,018 — 2,018 Total fixed maturity securities 78,265 933,153 4,680 1,016,098 Equity securities: Preferred stock — 66,281 — 66,281 Common stock 15,507 734 — 16,241 Total equity securities 15,507 67,015 — 82,522 Total available-for-sale securities $ 93,772 $ 1,000,168 $ 4,680 $ 1,098,620 Trading securities: Fixed maturity securities $ — $ 3,808 $ — $ 3,808 Short-term investments $ 1,000 $ 35,804 $ — $ 36,804 The beginning and ending balances of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) consist of one available-for-sale fixed maturity security with a fair value of $4.7 million , and there was no activity (purchases, sales, transfers) involving Level 3 securities for the three months ended March 31, 2018 and 2017 . A market approach using prices in trades of comparable securities was utilized to determine the fair value for this security at March 31, 2018 and December 31, 2017 . 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, 2018 or 2017 . The Company recognizes transfers between levels at the beginning of the reporting period. There were no realized gains or losses included in earnings for the three months ended March 31, 2018 attributable to the change in unrealized gains or losses relating to Level 3 assets valued at fair value on a recurring basis that are still held at March 31, 2018 . The Company measures certain bank loan participations at fair value on a non-recurring basis during the year as part of the Company’s impairment evaluation when loans are determined by management to be impaired. Assets measured at fair value on a nonrecurring basis are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) March 31, 2018 Bank loan participations held-for-investment $ — $ — $ 1,741 $ 1,741 December 31, 2017 Bank loan participations held-for-investment $ — $ — $ 5,111 $ 5,111 Bank loan participations held-for-investment that were determined to be impaired were written down to their fair value of $1.7 million at March 31, 2018 and $5.1 million at December 31, 2017 . 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, 2018 , there were no investments for which external sources were unavailable to determine fair value. At December 31, 2017 , there was one bank loan participation with an unpaid principal balance of $807,000 and a carrying value of zero for which external sources were unavailable to determine fair value. The carrying values and fair values of financial instruments are summarized below: March 31, 2018 December 31, 2017 Carrying Fair Value Carrying Fair Value (in thousands) Assets Available-for-sale: Fixed maturity securities $ 1,043,251 $ 1,043,251 $ 1,016,098 $ 1,016,098 Equity securities 85,957 85,957 82,522 82,522 Trading: Fixed maturity securities 3,805 3,805 3,808 3,808 Bank loan participations held-for-investment 257,426 257,840 238,214 236,532 Cash and cash equivalents 151,046 151,046 163,495 163,495 Short-term investments 26,235 26,235 36,804 36,804 Other invested assets – notes receivable 13,250 19,056 11,778 17,104 Liabilities Senior debt 98,300 98,871 98,300 97,884 Junior subordinated debt 104,055 118,752 104,055 116,569 The fair values of fixed maturity securities and equity securities have been determined using quoted market prices for securities traded in the public market or prices using bid or closing prices for securities not traded in the public marketplace. The fair values of cash and cash equivalents and short-term investments approximate their carrying values due to their short-term maturity. The fair values of other invested assets-notes receivable, senior debt, and junior subordinated debt at March 31, 2018 and December 31, 2017 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, 2018 and December 31, 2017 , respectively. The fair values of bank loan participations held-for-investment, senior debt, and junior subordinated debt at March 31, 2018 and December 31, 2017 were determined using inputs to the valuation methodology that are unobservable (Level 3). |
Capital Stock and Equity Awards
Capital Stock and Equity Awards | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Capital Stock and Equity Awards | Capital Stock and Equity Awards The Company issued 170,023 common shares in the three months ended March 31, 2018 with 127,196 new shares related to stock option exercises and 42,827 new shares related to vesting of RSUs. The total common shares outstanding increased from 29,696,682 at December 31, 2017 to 29,866,705 at March 31, 2018 . The Company declared the following dividends during the first three months of 2018 and 2017: Date of Declaration Dividend per Common Share Payable to Shareholders of Record on Payment Date Total Amount 2018 February 22, 2018 $ 0.30 March 12, 2018 March 30, 2018 $ 9.0 million 2017 February 14, 2017 $ 0.30 March 13, 2017 March 31, 2017 $ 8.9 million Included in the dividends are $99,000 and $77,000 of dividend equivalents on RSUs, respectively. The balance of dividends payable was $409,000 at March, 31, 2018 and $434,000 at December 31, 2017. 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, 2018 , 1,658,715 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, restricted share units, and other awards under the 2014 Director Plan. The maximum number of shares available for issuance under the 2014 Director Plan is 50,000 , and at March 31, 2018 , 21,663 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), and in the case of the 2014 LTIP for Good Reason (as defined), at any time following a Change in Control (as defined in the applicable plans). Options The following table summarizes the option activity for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Shares Weighted- Shares Weighted- Outstanding: Beginning of period 1,479,236 $ 27.81 2,234,699 $ 22.84 Granted — $ — 195,509 $ 42.17 Exercised (142,129 ) $ 20.14 (97,211 ) $ 17.23 Forfeited — $ — (50,062 ) $ 27.97 End of period 1,337,107 $ 28.63 2,282,935 $ 24.62 Exercisable, end of period 983,508 $ 26.06 1,334,756 $ 20.47 All of the outstanding options vest over three or four years and have a contractual life of seven years from the original date of grant. All of the outstanding options have an exercise price greater than or equal to the fair value of the underlying shares at the date of grant. The weighted-average remaining contractual life of the options outstanding and options exercisable was 4.4 years and 4.0 years, respectively. RSUs The following table summarizes the RSU activity for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Shares Weighted- Shares Weighted- Unvested, beginning of period 178,882 $ 37.93 196,800 $ 24.38 Granted 214,907 $ 39.81 117,879 $ 42.17 Vested (62,714 ) $ 40.90 (37,485 ) $ 32.07 Forfeited — $ — (19,743 ) $ 24.06 Unvested, end of period 331,075 $ 38.59 257,451 $ 31.43 The vesting period of RSUs granted to employees range from one to five years and vest ratably over the respective vesting period, and the majority vest in three years. All RSUs granted to date to non-employee directors had a one year vesting period. The holders of RSUs are entitled to dividend equivalents. The dividend equivalents are settled in cash at the same time that the underlying RSUs vest and are subject to the same risk of forfeiture as the underlying shares. The fair value of the RSUs granted is based on the market price of the underlying shares. 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 2018 2017 (in thousands) Share based compensation expense $ 1,455 $ 1,794 U.S. tax benefit on share based compensation expense 173 469 As of March 31, 2018 , the Company had $14.0 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, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On May 1, 2018 , the Board of Directors declared a cash dividend of $0.30 per common share. The dividend is payable on June 29, 2018 to shareholders of record on June 11, 2018 . |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017 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, 2017 was derived from the Company’s audited annual consolidated financial statements. Intercompany transactions and balances have been eliminated. |
Estimates and Assumptions | Estimates and Assumptions Preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying disclosures. Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates. |
Variable Interest Entities | Variable Interest Entities Entities that do not have sufficient equity at risk to allow the entity to finance its activities without additional financial support or in which the equity investors, as a group, do not have the characteristic of a controlling financial interest are referred to as variable interest entities (“VIE”). A VIE is consolidated by the variable interest holder that is determined to have the controlling financial interest (primary beneficiary) as a result of having both the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE’s capital structure, contractual terms, nature of the VIE’s operations and purpose, and the Company’s relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE. The Company reassesses its VIE determination with respect to an entity on an ongoing basis. The Company holds interests in VIEs through certain equity method investments included in “other invested assets” in the accompanying condensed consolidated balance sheets. The Company has determined that it should not consolidate any of the VIEs as it is not the primary beneficiary in any of the relationships. Although the investments resulted in the Company holding variable interests in the entities, they did not empower the Company to direct the activities that most significantly impact the economic performance of the entities. |
Income Tax Expense | Income Tax Expense Our effective tax rate fluctuates from period to period based on the relative mix of income reported by country and the respective tax rates imposed by each tax jurisdiction. For the three months ended March 31, 2018 and 2017 , our U.S. federal income tax expense was 8.7% and 7.7% of income before taxes, respectively. For U.S.-sourced income, the Company’s U.S. federal income tax expense differs from the amounts computed by applying the federal statutory income tax rate (21% in 2018 and 35% in 2017) to income before taxes due primarily to interest income on tax-advantaged state and municipal securities (state and municipal securities represent 12.4% and 10.9% of our available-for-sale securities at March 31, 2018 and 2017 , respectively), dividends received income, and excess tax benefits on share based compensation. |
Adopted Accounting Standards | Adopted Accounting Standards Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) . The guidance applies to all companies that either enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards, such as insurance contracts. Under this guidance, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Judgments required in adopting this update may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The adoption of ASU 2014-09 had no impact on reported fee income and there was no cumulative effect of initially applying the update. Effective January 1, 2018, the Company adopted ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . Among other things, this ASU requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Upon adoption on January 1, 2018, the Company made a $4.7 million cumulative-effect adjustment to increase retained earnings and reduce accumulated other comprehensive income. The adoption of ASU 2016-01 did not materially impact the Company's financial position, cash flows, or total comprehensive income. The Company's results of operations were impacted as changes in fair value of equity instruments are now presented in net income rather than other comprehensive (loss) income. For the three months ended March 31, 2018, the impact was a $1.4 million reduction in net income and a $0.05 reduction in basic and diluted earnings per share. Effective January 1, 2018, the Company adopted ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This update was issued as a result of the enactment of the TCJA on December 22, 2017. The ASU allows for the option to reclassify the stranded tax effects resulting from the implementation of the TCJA out of accumulated other comprehensive income and into retained earnings. As the adoption of ASU 2016-01 in 2018 resulted in the reclassification of the entire unrealized balance on equity securities from accumulated other comprehensive income into retained earnings, only the stranded tax effects on the unrealized balances of fixed income securities were impacted by the adoption of ASU 2018-02. The reclassification resulted in a $711,000 decrease to the Company's retained earnings with a corresponding increase to accumulated other comprehensive income in the first quarter of 2018. |
Prospective Accounting Standards | Prospective Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Under current guidance for lessees, leases are only included on the balance sheet if certain criteria, classifying the agreement as a capital lease, are met. This update will require the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. Upon adoption, leases will be recognized and measured at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating ASU 2016-02 to determine the potential impact that adopting this standard will have on its financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Current GAAP delays the recognition of credit losses until it is probable a loss has been incurred. The update will require financial assets measured at amortized cost, such as bank loan participations held for investment, to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which fair value is below amortized cost. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Upon adoption, this ASU will be applied using the modified-retrospective approach, by which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period presented. The Company has not yet completed the analysis of how adopting this ASU will affect the Company’s financial statements. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investments [Abstract] | |
Schedule of summary of available-for-sale investments | The Company’s available-for-sale investments are summarized as follows: Cost or Gross Gross Fair (in thousands) March 31, 2018 Fixed maturity securities: State and municipal $ 137,478 $ 4,029 $ (1,782 ) $ 139,725 Residential mortgage-backed 186,279 509 (5,690 ) 181,098 Corporate 445,058 3,054 (8,486 ) 439,626 Commercial mortgage and asset-backed 192,941 173 (2,310 ) 190,804 Obligations of U.S. government corporations and agencies 7,804 — (29 ) 7,775 U.S. Treasury securities and obligations guaranteed by the U.S. government 83,317 73 (1,171 ) 82,219 Redeemable preferred stock 2,025 — (21 ) 2,004 Total fixed maturity securities 1,054,902 7,838 (19,489 ) 1,043,251 Equity securities 80,464 6,845 (1,352 ) 85,957 Total investments available-for-sale $ 1,135,366 $ 14,683 $ (20,841 ) $ 1,129,208 December 31, 2017 Fixed maturity securities: State and municipal $ 139,382 $ 5,587 $ (603 ) $ 144,366 Residential mortgage-backed 160,379 723 (2,441 ) 158,661 Corporate 408,857 7,503 (2,639 ) 413,721 Commercial mortgage and asset-backed 182,595 714 (698 ) 182,611 Obligations of U.S. government corporations and agencies 35,948 — (101 ) 35,847 U.S. Treasury securities and obligations guaranteed by the U.S. government 79,476 37 (639 ) 78,874 Redeemable preferred stock 2,025 — (7 ) 2,018 Total fixed maturity securities 1,008,662 14,564 (7,128 ) 1,016,098 Equity securities 75,318 7,830 (626 ) 82,522 Total investments available-for-sale $ 1,083,980 $ 22,394 $ (7,754 ) $ 1,098,620 |
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, 2018 are summarized, by contractual maturity, as follows: Cost or Fair (in thousands) One year or less $ 33,850 $ 33,743 After one year through five years 327,069 323,368 After five years through ten years 185,400 181,026 After ten years 127,338 131,208 Residential mortgage-backed 186,279 181,098 Commercial mortgage and asset-backed 192,941 190,804 Redeemable preferred stock 2,025 2,004 Total $ 1,054,902 $ 1,043,251 |
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, 2018 Fixed maturity securities: State and municipal $ 61,275 $ (1,325 ) $ 10,454 $ (457 ) $ 71,729 $ (1,782 ) Residential mortgage-backed 90,188 (1,743 ) 79,455 (3,947 ) 169,643 (5,690 ) Corporate 260,523 (5,309 ) 64,506 (3,177 ) 325,029 (8,486 ) Commercial mortgage and asset-backed 94,429 (1,578 ) 22,658 (732 ) 117,087 (2,310 ) Obligations of U.S. government corporations and agencies — — 7,775 (29 ) 7,775 (29 ) U.S. Treasury securities and obligations guaranteed by the U.S. government 53,118 (913 ) 18,080 (258 ) 71,198 (1,171 ) Redeemable preferred stock 2,004 (21 ) — — 2,004 (21 ) Total fixed maturity securities 561,537 (10,889 ) 202,928 (8,600 ) 764,465 (19,489 ) Equity securities 17,816 (811 ) 5,685 (541 ) 23,501 (1,352 ) Total investments available-for-sale $ 579,353 $ (11,700 ) $ 208,613 $ (9,141 ) $ 787,966 $ (20,841 ) December 31, 2017 Fixed maturity securities: State and municipal $ 40,117 $ (318 ) $ 10,662 $ (285 ) $ 50,779 $ (603 ) Residential mortgage-backed 50,447 (261 ) 84,193 (2,180 ) 134,640 (2,441 ) Corporate 113,464 (846 ) 66,954 (1,793 ) 180,418 (2,639 ) Commercial mortgage and asset-backed 53,965 (244 ) 25,299 (454 ) 79,264 (698 ) Obligations of U.S. government corporations and agencies 3,024 (1 ) 32,154 (100 ) 35,178 (101 ) U.S. Treasury securities and obligations guaranteed by the U.S. government 50,760 (430 ) 26,707 (209 ) 77,467 (639 ) Redeemable preferred stock 2,018 (7 ) — — 2,018 (7 ) Total fixed maturity securities 313,795 (2,107 ) 245,969 (5,021 ) 559,764 (7,128 ) Equity securities 5,859 (65 ) 5,665 (561 ) 11,524 (626 ) Total investments available-for-sale $ 319,654 $ (2,172 ) $ 251,634 $ (5,582 ) $ 571,288 $ (7,754 ) |
Schedule of summary of realized gains and losses | The Company’s realized gains and losses are summarized as follows: Three Months Ended 2018 2017 (in thousands) Fixed maturity securities: Gross realized gains $ 22 $ 338 Gross realized losses (223 ) (296 ) (201 ) 42 Bank loan participations: Gross realized gains 1,220 1,136 Gross realized losses (100 ) (539 ) 1,120 597 Equity securities: Gross realized gains — 409 Gross realized losses (15 ) — Changes in fair values of equity securities (1,710 ) — (1,725 ) 409 Short-term investments and other: Gross realized gains — — Gross realized losses (4 ) (1 ) (4 ) (1 ) Total $ (810 ) $ 1,047 |
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 2018 2017 2018 2017 (in thousands) Renewable energy LLCs (a) $ 32,592 $ 32,063 $ 1,211 $ 5,594 Renewable energy notes receivable ( b) 8,750 7,278 297 — Limited partnerships (c) 29,132 26,367 226 382 Bank holding companies (d) 4,500 4,500 86 86 Total other invested assets $ 74,974 $ 70,208 $ 1,820 $ 6,062 (a) The Company’s Corporate and Other segment owns equity interests ranging from 2.6% to 32.8% 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 affiliate of the Company’s largest shareholder and the Company’s Non-Exucitive 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 $1.2 million and $1.6 million in the three months ended March 31, 2018 and 2017 , respectively. (b) The Company has invested in notes receivable for renewable energy projects. At March 31, 2018 , the Company holds an $8.8 million note issued by an affiliate of the Company’s largest shareholder. Interest on the note, which matures in 2021, is fixed at 15.0% . Interest income on the note was $297,000 for the three months ended March 31, 2018 . (c) The Company owns investments in limited partnerships that invest in concentrated portfolios including publicly-traded small cap equities, loans of middle market private equity sponsored companies, equity tranches of collateralized loan obligations ( “ CLOs ” ), and tranches of distressed home loans. Income f rom the partnerships is recognized under the equity method of accounting. The Company’s Corporate and Other segment held an investment in a limited partnership with a carrying value of $2.9 million at March 31, 2018 . The Company recognized investment losses of $125,000 and investment income of $68,000 on the investment for the three months ended March 31, 2018 and 2017 , respectively. The Company’s Excess and Surplus Lines segment holds investments in limited partnerships of $26.3 million at March 31, 2018 . Investment income of $351,000 and $314,000 was recognized on the investments for the three months ended March 31, 2018 and 2017 , respectively. At March 31, 2018 , the Company’s Excess and Surplus Lines segment has outstanding commitments to invest another $2.6 million in these limited partnerships. (d) The Company holds $4.5 million of subordinated notes issued by a bank holding company. Interest on the notes, which mature on August 12, 2023, is fixed at 7.6% per annum. Interest income on the notes was $86,000 in both three months ended March 31, 2018 and 2017 . The Company’s Chairman was previously the Lead Independent Director of the bank holding company and an investor in the bank holding company. Additionally, one of the Company’s directors was an investor in the bank holding company and is currently a lender to the bank holding company. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of gross carrying amounts and accumulated amortization | The gross carrying amounts and accumulated amortization for each major specifically identifiable intangible asset class were as follows: March 31, 2018 December 31, 2017 Life Gross Accumulated Gross Accumulated ($ in thousands) Intangible Assets Trademarks Indefinite $ 22,200 $ — $ 22,200 $ — Insurance licenses and authorities Indefinite 9,164 — 9,164 — Identifiable intangibles not subject to amortization 31,364 — 31,364 — Broker relationships 24.6 11,611 4,790 11,611 4,641 Identifiable intangible assets subject to amortization 11,611 4,790 11,611 4,641 $ 42,975 $ 4,790 $ 42,975 $ 4,641 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of numerator and denominator of basic and diluted earnings per share | The following represents a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations contained in the condensed consolidated financial statements: Three Months Ended 2018 2017 (in thousands, except share and per share amounts) Net income to shareholders $ 15,633 $ 18,450 Weighted average common shares outstanding: Basic 29,764,320 29,289,588 Common share equivalents 428,983 1,037,835 Diluted 30,193,303 30,327,423 Earnings per share: Basic $ 0.53 $ 0.63 Common share equivalents (0.01 ) (0.02 ) Diluted $ 0.52 $ 0.61 |
Reserve for Losses and Loss A24
Reserve for Losses and Loss Adjustment Expenses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Liability for Claims and Claims Adjustment Expense [Abstract] | |
Schedule of reconciliation of beginning and ending reserve balances for losses and loss adjustment expenses | The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses, net of reinsurance, to the gross amounts reported in the condensed consolidated balance sheets: Three Months Ended 2018 2017 (in thousands) Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period $ 989,825 $ 761,128 Add: Incurred losses and loss adjustment expenses net of reinsurance: Current year 146,382 108,783 Prior years (2,610 ) (3,414 ) Total incurred losses and loss and adjustment expenses 143,772 105,369 Deduct: Loss and loss adjustment expense payments net of reinsurance: Current year 12,177 3,698 Prior years 83,117 71,018 Total loss and loss adjustment expense payments 95,294 74,716 Reserve for losses and loss adjustment expenses net of reinsurance recoverables at end of period 1,038,303 791,781 Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period 331,245 188,782 Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period $ 1,369,548 $ 980,563 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of components of comprehensive income | The following table summarizes the components of other comprehensive income: Three Months Ended 2018 2017 (in thousands) Unrealized (losses) gains arising during the period, before U.S. income taxes $ (19,292 ) $ 5,998 U.S. income taxes 544 (1,636 ) Unrealized (losses) gains arising during the period, net of U.S. income taxes (18,748 ) 4,362 Less reclassification adjustment: Net realized investment (losses) gains (201 ) 450 U.S. income tax expenses — (122 ) Reclassification adjustment for investment (losses) gains realized in net income (201 ) 328 Other comprehensive (loss) income $ (18,547 ) $ 4,034 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 Gross written premiums $ 167,486 $ 87,401 $ 43,229 $ — $ 298,116 Net earned premiums 129,971 13,340 57,631 — 200,942 Underwriting profit of insurance segments 11,299 1,623 1,744 — 14,666 Net investment income 3,042 711 8,017 1,486 13,256 Interest expense — — — 2,522 2,522 Segment revenues 137,327 13,955 65,526 1,536 218,344 Segment goodwill 181,831 — — — 181,831 Segment assets 909,963 495,096 1,368,872 88,079 2,862,010 Three Months Ended March 31, 2017 Gross written premiums $ 108,995 $ 72,464 $ 42,720 $ — $ 224,179 Net earned premiums 93,849 16,253 44,585 — 154,687 Underwriting profit of insurance segments 8,800 842 1,093 — 10,735 Net investment income 3,183 636 7,124 5,790 16,733 Interest expense — — — 2,123 2,123 Segment revenues 101,090 16,924 52,146 6,242 176,402 Segment goodwill 181,831 — — — 181,831 Segment assets 749,617 335,806 1,211,896 114,006 2,411,325 |
Schedule of underwriting profit of operating segments by individual segment and reconciliation to consolidated income before taxes | The following table reconciles the underwriting profit of the operating segments by individual segment to consolidated income before taxes: Three Months Ended 2018 2017 (in thousands) Underwriting profit of the insurance segments: Excess and Surplus Lines $ 11,299 $ 8,800 Specialty Admitted Insurance 1,623 842 Casualty Reinsurance 1,744 1,093 Total underwriting profit of insurance segments 14,666 10,735 Other operating expenses of the Corporate and Other segment (7,431 ) (6,461 ) Underwriting profit 7,235 4,274 Net investment income 13,256 16,733 Net realized investment (losses) gains (810 ) 1,047 Amortization of intangible assets (149 ) (149 ) Other income and expenses 104 200 Interest expense (2,522 ) (2,123 ) Income before taxes $ 17,114 $ 19,982 |
Other Operating Expenses and 27
Other Operating Expenses and Other Expenses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Operating Expenses And Other Expenses [Abstract] | |
Schedule of other operating expenses | Other operating expenses consist of the following: Three Months Ended 2018 2017 (in thousands) Amortization of policy acquisition costs $ 30,198 $ 27,638 Other underwriting expenses of the operating segments 17,154 14,794 Other operating expenses of the Corporate and Other segment 7,431 6,461 Total $ 54,783 $ 48,893 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) Available-for-sale securities: Fixed maturity securities: State and municipal $ — $ 139,725 $ — $ 139,725 Residential mortgage-backed — 181,098 — 181,098 Corporate — 439,626 — 439,626 Commercial mortgage and asset-backed — 186,124 4,680 190,804 Obligations of U.S. government corporations and agencies — 7,775 — 7,775 U.S. Treasury securities and obligations guaranteed by the U.S. government 81,640 579 — 82,219 Redeemable preferred stock — 2,004 — 2,004 Total fixed maturity securities 81,640 956,931 4,680 1,043,251 Equity securities: Preferred stock — 67,709 — 67,709 Common stock 14,732 3,516 — 18,248 Total equity securities 14,732 71,225 — 85,957 Total available-for-sale securities $ 96,372 $ 1,028,156 $ 4,680 $ 1,129,208 Trading securities: Fixed maturity securities $ — $ 3,805 $ — $ 3,805 Short-term investments $ 1,000 $ 25,235 $ — $ 26,235 Assets measured at fair value on a recurring basis as of December 31, 2017 are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) Available-for-sale securities: Fixed maturity securities: State and municipal $ — $ 144,366 $ — $ 144,366 Residential mortgage-backed — 158,661 — 158,661 Corporate — 413,721 — 413,721 Commercial mortgage and asset-backed — 177,931 4,680 182,611 Obligations of U.S. government corporations and agencies — 35,847 — 35,847 U.S. Treasury securities and obligations guaranteed by the U.S. government 78,265 609 — 78,874 Redeemable preferred stock — 2,018 — 2,018 Total fixed maturity securities 78,265 933,153 4,680 1,016,098 Equity securities: Preferred stock — 66,281 — 66,281 Common stock 15,507 734 — 16,241 Total equity securities 15,507 67,015 — 82,522 Total available-for-sale securities $ 93,772 $ 1,000,168 $ 4,680 $ 1,098,620 Trading securities: Fixed maturity securities $ — $ 3,808 $ — $ 3,808 Short-term investments $ 1,000 $ 35,804 $ — $ 36,804 |
Schedule of assets measured at fair value on a nonrecurring basis | Assets measured at fair value on a nonrecurring basis are summarized below: Fair Value Measurements Using Quoted Prices Significant Significant Total (in thousands) March 31, 2018 Bank loan participations held-for-investment $ — $ — $ 1,741 $ 1,741 December 31, 2017 Bank loan participations held-for-investment $ — $ — $ 5,111 $ 5,111 |
Schedule of carrying value and fair value | The carrying values and fair values of financial instruments are summarized below: March 31, 2018 December 31, 2017 Carrying Fair Value Carrying Fair Value (in thousands) Assets Available-for-sale: Fixed maturity securities $ 1,043,251 $ 1,043,251 $ 1,016,098 $ 1,016,098 Equity securities 85,957 85,957 82,522 82,522 Trading: Fixed maturity securities 3,805 3,805 3,808 3,808 Bank loan participations held-for-investment 257,426 257,840 238,214 236,532 Cash and cash equivalents 151,046 151,046 163,495 163,495 Short-term investments 26,235 26,235 36,804 36,804 Other invested assets – notes receivable 13,250 19,056 11,778 17,104 Liabilities Senior debt 98,300 98,871 98,300 97,884 Junior subordinated debt 104,055 118,752 104,055 116,569 |
Capital Stock and Equity Awar29
Capital Stock and Equity Awards (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of dividends | The Company declared the following dividends during the first three months of 2018 and 2017: Date of Declaration Dividend per Common Share Payable to Shareholders of Record on Payment Date Total Amount 2018 February 22, 2018 $ 0.30 March 12, 2018 March 30, 2018 $ 9.0 million 2017 February 14, 2017 $ 0.30 March 13, 2017 March 31, 2017 $ 8.9 million |
Schedule of summary of option activity | The following table summarizes the option activity for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Shares Weighted- Shares Weighted- Outstanding: Beginning of period 1,479,236 $ 27.81 2,234,699 $ 22.84 Granted — $ — 195,509 $ 42.17 Exercised (142,129 ) $ 20.14 (97,211 ) $ 17.23 Forfeited — $ — (50,062 ) $ 27.97 End of period 1,337,107 $ 28.63 2,282,935 $ 24.62 Exercisable, end of period 983,508 $ 26.06 1,334,756 $ 20.47 |
Schedule of summary of RSU activity | The following table summarizes the RSU activity for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Shares Weighted- Shares Weighted- Unvested, beginning of period 178,882 $ 37.93 196,800 $ 24.38 Granted 214,907 $ 39.81 117,879 $ 42.17 Vested (62,714 ) $ 40.90 (37,485 ) $ 32.07 Forfeited — $ — (19,743 ) $ 24.06 Unvested, end of period 331,075 $ 38.59 257,451 $ 31.43 |
Schedule of summary of amount of expense and related tax benefit | Share based compensation expense is recognized on a straight line basis over the vesting period. The amount of expense and related tax benefit is summarized below: Three Months Ended 2018 2017 (in thousands) Share based compensation expense $ 1,455 $ 1,794 U.S. tax benefit on share based compensation expense 173 469 |
Accounting Policies - Narrative
Accounting Policies - Narrative (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)company$ / shares | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Number of insurance companies based in the United States | company | 6 | ||
Investment in variable interest entities | $ 32,600 | $ 32,100 | |
Effective U.S. federal income tax expense rate | 8.70% | 7.70% | |
Percentage of available for sale securities | 12.40% | 10.90% | |
Net income | $ (15,633) | $ (18,450) | |
ASU 2016-01 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of adoption of ASU | 0 | ||
ASU 2018-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of adoption of ASU | 0 | ||
Retained Earnings | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net income | (15,633) | $ (18,450) | |
Retained Earnings | ASU 2016-01 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of adoption of ASU | 4,682 | ||
Net income | $ 1,400 | ||
Reduction in basic and diluted earnings per share | $ / shares | $ 0.05 | ||
Retained Earnings | ASU 2018-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of adoption of ASU | $ (711) |
Investments - Narrative (Detail
Investments - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018USD ($)issuerloan | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)loan | Dec. 31, 2016USD ($) | |
Gain (Loss) on Investments [Line Items] | ||||
Number of available-for-sale securities held in an unrealized loss position | issuer | 205 | |||
Total fair value of unrealized loss position securities | $ 787,966 | $ 571,288 | ||
Total gross unrealized losses of unrealized loss position securities | $ 20,841 | 7,754 | ||
Percentage of available for sale securities | 12.40% | 10.90% | ||
Fair value | $ 1,129,208 | 1,098,620 | ||
Impairment loss | 1,500 | |||
Unpaid principal on impaired loans | 2,100 | 8,400 | ||
Carrying value of loan | 257,426 | 238,214 | ||
Allowance for credit losses on impaired loans | $ 300 | $ 639 | $ 3,200 | $ 943 |
Number of impaired loans held | loan | 2 | 5 | ||
Carrying value of impaired loans | $ 1,700 | $ 5,100 | ||
Average recorded investment in impaired bank loans | 3,400 | 5,300 | ||
Investment income during period loans were impaired | 20 | 84 | ||
Net realized gain (loss) on changes in fair value of impaired bank loans | 3 | 177 | ||
Net trading gains (losses) still held | 3 | |||
Carrying value of collateralized loan obligation held | 4,700 | |||
Net realized investment (losses) gains | (810) | 1,047 | ||
Investment income | 1,820 | 6,062 | ||
Bank Holding Company | ||||
Gain (Loss) on Investments [Line Items] | ||||
Net realized investment (losses) gains | 409 | |||
Investment in certificate of deposit | 1,000 | |||
Interest income | 0 | 1 | ||
Fixed maturity securities | ||||
Gain (Loss) on Investments [Line Items] | ||||
Total fair value of unrealized loss position securities | 764,465 | 559,764 | ||
Total gross unrealized losses of unrealized loss position securities | 19,489 | 7,128 | ||
Fair value | 1,043,251 | 1,016,098 | ||
Net realized investment (losses) gains | (201) | $ 42 | ||
Puerto Rico loan | ||||
Gain (Loss) on Investments [Line Items] | ||||
Unpaid principal on impaired loans | 807 | |||
Carrying value of loan | 0 | |||
Net realized investment (losses) gains | 807 | |||
Oil and gas companies loan | ||||
Gain (Loss) on Investments [Line Items] | ||||
Unpaid principal on impaired loans | 2,100 | 6,900 | ||
Carrying value of loan | 4,700 | |||
Allowance for credit losses on impaired loans | $ 300 | $ 2,300 | ||
Number of loans | loan | 3 | |||
Bank loan participations gross unrealized losses | $ 143 | |||
Number of impaired loans held | loan | 2 | 3 | ||
Carrying value of impaired loans | $ 1,700 | $ 4,600 | ||
Non-energy sector loan | ||||
Gain (Loss) on Investments [Line Items] | ||||
Unpaid principal on impaired loans | 706 | |||
Allowance for credit losses on impaired loans | $ 145 | |||
Number of impaired loans held | loan | 1 | |||
Carrying value of impaired loans | $ 561 | |||
BBB- or better | Fixed maturity securities | ||||
Gain (Loss) on Investments [Line Items] | ||||
Percentage of available for sale securities | 99.90% | |||
Fair value | $ 868 | |||
Aggregate net unrealized gain (loss) | $ (26) |
Investments - Schedule of Avail
Investments - Schedule of Available-for-Sale Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Cost or Amortized Cost | $ 1,135,366 | $ 1,083,980 |
Gross Unrealized Gains | 14,683 | 22,394 |
Gross Unrealized Losses | (20,841) | (7,754) |
Fair Value | 1,129,208 | 1,098,620 |
Fixed maturity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost or Amortized Cost | 1,054,902 | 1,008,662 |
Gross Unrealized Gains | 7,838 | 14,564 |
Gross Unrealized Losses | (19,489) | (7,128) |
Fair Value | 1,043,251 | 1,016,098 |
State and municipal | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost or Amortized Cost | 137,478 | 139,382 |
Gross Unrealized Gains | 4,029 | 5,587 |
Gross Unrealized Losses | (1,782) | (603) |
Fair Value | 139,725 | 144,366 |
Residential mortgage-backed | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost or Amortized Cost | 186,279 | 160,379 |
Gross Unrealized Gains | 509 | 723 |
Gross Unrealized Losses | (5,690) | (2,441) |
Fair Value | 181,098 | 158,661 |
Corporate | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost or Amortized Cost | 445,058 | 408,857 |
Gross Unrealized Gains | 3,054 | 7,503 |
Gross Unrealized Losses | (8,486) | (2,639) |
Fair Value | 439,626 | 413,721 |
Commercial mortgage and asset-backed | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost or Amortized Cost | 192,941 | 182,595 |
Gross Unrealized Gains | 173 | 714 |
Gross Unrealized Losses | (2,310) | (698) |
Fair Value | 190,804 | 182,611 |
Obligations of U.S. government corporations and agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost or Amortized Cost | 7,804 | 35,948 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (29) | (101) |
Fair Value | 7,775 | 35,847 |
U.S. Treasury securities and obligations guaranteed by the U.S. government | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost or Amortized Cost | 83,317 | 79,476 |
Gross Unrealized Gains | 73 | 37 |
Gross Unrealized Losses | (1,171) | (639) |
Fair Value | 82,219 | 78,874 |
Redeemable preferred stock | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost or Amortized Cost | 2,025 | 2,025 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (21) | (7) |
Fair Value | 2,004 | 2,018 |
Equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost or Amortized Cost | 80,464 | 75,318 |
Gross Unrealized Gains | 6,845 | 7,830 |
Gross Unrealized Losses | (1,352) | (626) |
Fair Value | $ 85,957 | $ 82,522 |
Investments - Schedule of Contr
Investments - Schedule of Contract Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Cost or Amortized Cost | ||
One year or less | $ 33,850 | |
After one year through five years | 327,069 | |
After five years through ten years | 185,400 | |
After ten years | 127,338 | |
Residential mortgage-backed | 186,279 | |
Commercial mortgage and asset-backed | 192,941 | |
Redeemable preferred stock | 2,025 | |
Total | 1,054,902 | $ 1,008,662 |
Fair Value | ||
One year or less | 33,743 | |
After one year through five years | 323,368 | |
After five years through ten years | 181,026 | |
After ten years | 131,208 | |
Residential mortgage-backed | 181,098 | |
Commercial mortgage and asset-backed | 190,804 | |
Redeemable preferred stock | 2,004 | |
Total | $ 1,043,251 | $ 1,016,098 |
Investments - Schedule of Gross
Investments - Schedule of Gross Unrealized Losses and Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | $ 579,353 | $ 319,654 |
Less Than 12 Months, Gross Unrealized Losses | (11,700) | (2,172) |
12 Months or More, Fair Value | 208,613 | 251,634 |
12 Months or More, Gross Unrealized Losses | (9,141) | (5,582) |
Total, Fair Value | 787,966 | 571,288 |
Total, Gross Unrealized Losses | (20,841) | (7,754) |
Fixed maturity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | 561,537 | 313,795 |
Less Than 12 Months, Gross Unrealized Losses | (10,889) | (2,107) |
12 Months or More, Fair Value | 202,928 | 245,969 |
12 Months or More, Gross Unrealized Losses | (8,600) | (5,021) |
Total, Fair Value | 764,465 | 559,764 |
Total, Gross Unrealized Losses | (19,489) | (7,128) |
State and municipal | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | 61,275 | 40,117 |
Less Than 12 Months, Gross Unrealized Losses | (1,325) | (318) |
12 Months or More, Fair Value | 10,454 | 10,662 |
12 Months or More, Gross Unrealized Losses | (457) | (285) |
Total, Fair Value | 71,729 | 50,779 |
Total, Gross Unrealized Losses | (1,782) | (603) |
Residential mortgage-backed | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | 90,188 | 50,447 |
Less Than 12 Months, Gross Unrealized Losses | (1,743) | (261) |
12 Months or More, Fair Value | 79,455 | 84,193 |
12 Months or More, Gross Unrealized Losses | (3,947) | (2,180) |
Total, Fair Value | 169,643 | 134,640 |
Total, Gross Unrealized Losses | (5,690) | (2,441) |
Corporate | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | 260,523 | 113,464 |
Less Than 12 Months, Gross Unrealized Losses | (5,309) | (846) |
12 Months or More, Fair Value | 64,506 | 66,954 |
12 Months or More, Gross Unrealized Losses | (3,177) | (1,793) |
Total, Fair Value | 325,029 | 180,418 |
Total, Gross Unrealized Losses | (8,486) | (2,639) |
Commercial mortgage and asset-backed | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | 94,429 | 53,965 |
Less Than 12 Months, Gross Unrealized Losses | (1,578) | (244) |
12 Months or More, Fair Value | 22,658 | 25,299 |
12 Months or More, Gross Unrealized Losses | (732) | (454) |
Total, Fair Value | 117,087 | 79,264 |
Total, Gross Unrealized Losses | (2,310) | (698) |
Obligations of U.S. government corporations and agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | 0 | 3,024 |
Less Than 12 Months, Gross Unrealized Losses | 0 | (1) |
12 Months or More, Fair Value | 7,775 | 32,154 |
12 Months or More, Gross Unrealized Losses | (29) | (100) |
Total, Fair Value | 7,775 | 35,178 |
Total, Gross Unrealized Losses | (29) | (101) |
U.S. Treasury securities and obligations guaranteed by the U.S. government | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | 53,118 | 50,760 |
Less Than 12 Months, Gross Unrealized Losses | (913) | (430) |
12 Months or More, Fair Value | 18,080 | 26,707 |
12 Months or More, Gross Unrealized Losses | (258) | (209) |
Total, Fair Value | 71,198 | 77,467 |
Total, Gross Unrealized Losses | (1,171) | (639) |
Redeemable preferred stock | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | 2,004 | 2,018 |
Less Than 12 Months, Gross Unrealized Losses | (21) | (7) |
12 Months or More, Fair Value | 0 | 0 |
12 Months or More, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 2,004 | 2,018 |
Total, Gross Unrealized Losses | (21) | (7) |
Equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | 17,816 | 5,859 |
Less Than 12 Months, Gross Unrealized Losses | (811) | (65) |
12 Months or More, Fair Value | 5,685 | 5,665 |
12 Months or More, Gross Unrealized Losses | (541) | (561) |
Total, Fair Value | 23,501 | 11,524 |
Total, Gross Unrealized Losses | $ (1,352) | $ (626) |
Investments - Summary of Realiz
Investments - Summary of Realized Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Net realized investment gains | $ (810) | $ 1,047 |
Fixed maturity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross realized gains | 22 | 338 |
Gross realized losses | (223) | (296) |
Net realized investment gains | (201) | 42 |
Bank loan participations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross realized gains | 1,220 | 1,136 |
Gross realized losses | (100) | (539) |
Net realized investment gains | 1,120 | 597 |
Equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross realized gains | 0 | 409 |
Gross realized losses | (15) | 0 |
Changes in fair values of equity securities | (1,710) | 0 |
Net realized investment gains | (1,725) | 409 |
Short-term investments and other | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross realized gains | 0 | 0 |
Gross realized losses | (4) | (1) |
Net realized investment gains | $ (4) | $ (1) |
Investments - Summary of Privat
Investments - Summary of Private Debt and Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Net Investment Income [Line Items] | |||
Net realized gain (loss) on changes in fair value of impaired bank loans | $ 3 | $ 177 | |
Total other invested assets | 74,974 | $ 70,208 | |
Investment income | 1,820 | 6,062 | |
Renewable energy LLCs | |||
Net Investment Income [Line Items] | |||
Total other invested assets | 32,592 | 32,063 | |
Investment income | 1,211 | 5,594 | |
Renewable energy bridge financing notes | |||
Net Investment Income [Line Items] | |||
Total other invested assets | 8,750 | 7,278 | |
Investment income | $ 297 | 0 | |
Rate of interest | 15.00% | ||
Interest income | $ 297 | ||
Limited partnerships | |||
Net Investment Income [Line Items] | |||
Total other invested assets | 29,132 | 26,367 | |
Investment income | 226 | 382 | |
Bank holding companies | |||
Net Investment Income [Line Items] | |||
Total other invested assets | 4,500 | $ 4,500 | |
Investment income | 86 | 86 | |
Interest income | $ 86 | 86 | |
Bank Holding Company | |||
Net Investment Income [Line Items] | |||
Rate of interest | 7.60% | ||
Interest income | $ 0 | 1 | |
Investment in private subordinated notes | 4,500 | ||
Corporate and other | Limited partnerships | |||
Net Investment Income [Line Items] | |||
Carrying values of limited partnerships held | 2,900 | ||
Investment income (loss) | 125 | 68 | |
Corporate and other | Investment in LLC | |||
Net Investment Income [Line Items] | |||
Cash distributions from LLCs | 1,200 | 1,600 | |
Excess and Surplus Lines | Limited partnerships | |||
Net Investment Income [Line Items] | |||
Carrying values of limited partnerships held | 26,300 | ||
Investment income (loss) | 351 | $ 314 | |
Commitment to investment in limited partnership | $ 2,600 | ||
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 | 32.80% |
Goodwill and Intangible Asset37
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | 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 Asset38
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Acquired Intangible Assets [Line Items] | ||
Identifiable intangibles not subject to amortization | $ 31,364 | $ 31,364 |
Identifiable intangible assets subject to amortization | ||
Gross Carrying Amount | 11,611 | 11,611 |
Accumulated Amortization | 4,790 | 4,641 |
Total Intangible Assets, Gross | 42,975 | 42,975 |
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 | 9,164 | 9,164 |
Broker relationships | ||
Identifiable intangible assets subject to amortization | ||
Gross Carrying Amount | 11,611 | 11,611 |
Accumulated Amortization | $ 4,790 | $ 4,641 |
Life (Years) | 24 years 7 months 6 days |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
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 | 192,817 | 97,755 |
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, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net income to shareholders | $ 15,633 | $ 18,450 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 29,764,320 | 29,289,588 |
Common share equivalents (in shares) | 428,983 | 1,037,835 |
Diluted (in shares) | 30,193,303 | 30,327,423 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.53 | $ 0.63 |
Common share equivalents (in dollars per share) | (0.01) | (0.02) |
Diluted (in dollars per share) | $ 0.52 | $ 0.61 |
Reserve for Losses and Loss A41
Reserve for Losses and Loss Adjustment Expenses - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Favorable development on prior year loss reserves | ||
Reserve for losses and loss adjustment expenses | $ 2,610 | $ 3,414 |
Excess and Surplus Lines | Prior accident years | From accident years 2016 and 2014 | ||
Favorable development on prior year loss reserves | ||
Reserve for losses and loss adjustment expenses | 3,200 | |
Excess and Surplus Lines | Prior accident years | From the 2014-2016 accident years | ||
Favorable development on prior year loss reserves | ||
Reserve for losses and loss adjustment expenses | 1,100 | |
Specialty Admitted Insurance | Prior accident years | From accident years 2015, 2014 and prior accident years | ||
Favorable development on prior year loss reserves | ||
Reserve for losses and loss adjustment expenses | 42 | |
Specialty Admitted Insurance | Prior accident years | From the 2014-2016 accident years | ||
Favorable development on prior year loss reserves | ||
Reserve for losses and loss adjustment expenses | 1,300 | |
Casualty Reinsurance | Prior accident years | ||
Favorable development on prior year loss reserves | ||
Reserve for losses and loss adjustment expenses | $ 176 | $ 145 |
Reserve for Losses and Loss A42
Reserve for Losses and Loss Adjustment Expenses - Reconciliation of Losses and Loss Adjustment Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
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 | $ 989,825 | $ 761,128 | |
Add: Incurred losses and loss adjustment expenses net of reinsurance: | |||
Current year | 146,382 | 108,783 | |
Prior years | (2,610) | (3,414) | |
Total incurred losses and loss and adjustment expenses | 143,772 | 105,369 | |
Deduct: Loss and loss adjustment expense payments net of reinsurance: | |||
Current year | 12,177 | 3,698 | |
Prior years | 83,117 | 71,018 | |
Total loss and loss adjustment expense payments | 95,294 | 74,716 | |
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at end of period | 1,038,303 | 791,781 | |
Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period | 331,245 | 188,782 | $ 302,524 |
Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period | $ 1,369,548 | $ 980,563 | $ 1,292,349 |
Other Comprehensive Income - Su
Other Comprehensive Income - Summary of Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Unrealized (losses) gains arising during the period, before U.S. income taxes | $ (19,292) | $ 5,998 |
U.S. income taxes | 544 | (1,636) |
Unrealized (losses) gains arising during the period, net of U.S. income taxes | (18,748) | 4,362 |
Less reclassification adjustment: | ||
Net realized investment (losses) gains | (201) | 450 |
U.S. income tax expenses | 0 | (122) |
Reclassification adjustment for investment (losses) gains realized in net income | (201) | 328 |
Other comprehensive (loss) income | $ (18,547) | $ 4,034 |
Contingent Liabilities - Narrat
Contingent Liabilities - Narrative (Details) $ in Millions | Mar. 31, 2018USD ($) |
JRG Reinsurance Company, Ltd. | Letter of credit 100 Million | |
Contingent Liabilities [Line Items] | |
Letters of credit facility, amount | $ 100 |
Amount of letters of credit issued | 52.2 |
Assets deposited for securing letters of credit | 64.2 |
JRG Reinsurance Company, Ltd. | Letter of credit 102.5 Million | |
Contingent Liabilities [Line Items] | |
Letters of credit facility, amount | 102.5 |
Amount of letters of credit issued | 98.6 |
Assets deposited for securing letters of credit | 125.9 |
JRG Reinsurance Company, Ltd. | Letter of credit 100 Million one | |
Contingent Liabilities [Line Items] | |
Letters of credit facility, amount | 100 |
Amount of letters of credit issued | 6.9 |
Assets deposited for securing letters of credit | 10 |
James River Insurance Co | |
Contingent Liabilities [Line Items] | |
Total amount deposited in trust accounts | 860.6 |
Third-party Reinsureds | JRG Reinsurance Company, Ltd. | |
Contingent Liabilities [Line Items] | |
Total amount deposited in trust accounts | $ 283.1 |
Segment Information - Narrative
Segment Information - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 4 | |
Fee income in Excess and Surplus Lines segment | $ | $ 4.8 | $ 3.8 |
Segment Information - Summary o
Segment Information - Summary of Segment Results (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||
Gross written premiums | $ 298,116 | $ 224,179 | |
Net earned premiums | 200,942 | 154,687 | |
Underwriting profit (loss) of insurance segments | 14,666 | 10,735 | |
Net investment income | 13,256 | 16,733 | |
Interest expense | 2,522 | 2,123 | |
Segment revenues | 218,344 | 176,402 | |
Segment goodwill | 181,831 | 181,831 | $ 181,831 |
Segment assets | 2,862,010 | 2,411,325 | $ 2,756,695 |
Reportable segments | Excess and Surplus Lines | |||
Segment Reporting Information [Line Items] | |||
Gross written premiums | 167,486 | 108,995 | |
Net earned premiums | 129,971 | 93,849 | |
Underwriting profit (loss) of insurance segments | 11,299 | 8,800 | |
Net investment income | 3,042 | 3,183 | |
Interest expense | 0 | 0 | |
Segment revenues | 137,327 | 101,090 | |
Segment goodwill | 181,831 | 181,831 | |
Segment assets | 909,963 | 749,617 | |
Reportable segments | Specialty Admitted Insurance | |||
Segment Reporting Information [Line Items] | |||
Gross written premiums | 87,401 | 72,464 | |
Net earned premiums | 13,340 | 16,253 | |
Underwriting profit (loss) of insurance segments | 1,623 | 842 | |
Net investment income | 711 | 636 | |
Interest expense | 0 | 0 | |
Segment revenues | 13,955 | 16,924 | |
Segment goodwill | 0 | 0 | |
Segment assets | 495,096 | 335,806 | |
Reportable segments | Casualty Reinsurance | |||
Segment Reporting Information [Line Items] | |||
Gross written premiums | 43,229 | 42,720 | |
Net earned premiums | 57,631 | 44,585 | |
Underwriting profit (loss) of insurance segments | 1,744 | 1,093 | |
Net investment income | 8,017 | 7,124 | |
Interest expense | 0 | 0 | |
Segment revenues | 65,526 | 52,146 | |
Segment goodwill | 0 | 0 | |
Segment assets | 1,368,872 | 1,211,896 | |
Corporate and Other | Corporate and other | |||
Segment Reporting Information [Line Items] | |||
Gross written premiums | 0 | 0 | |
Net earned premiums | 0 | 0 | |
Underwriting profit (loss) of insurance segments | 0 | 0 | |
Net investment income | 1,486 | 5,790 | |
Interest expense | 2,522 | 2,123 | |
Segment revenues | 1,536 | 6,242 | |
Segment goodwill | 0 | 0 | |
Segment assets | $ 88,079 | $ 114,006 |
Segment Information - Reconcili
Segment Information - Reconciliation of Operating Segments by Individual Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Total underwriting profit of insurance segments | $ 14,666 | $ 10,735 |
Other operating expenses of the Corporate and Other segment | (7,431) | (6,461) |
Underwriting profit | 7,235 | 4,274 |
Net investment income | 13,256 | 16,733 |
Net realized investment (losses) gains | (810) | 1,047 |
Amortization of intangible assets | (149) | (149) |
Other income and expenses | 104 | 200 |
Interest expense | (2,522) | (2,123) |
Income before taxes | 17,114 | 19,982 |
Reportable segments | Excess and Surplus Lines | ||
Segment Reporting Information [Line Items] | ||
Total underwriting profit of insurance segments | 11,299 | 8,800 |
Net investment income | 3,042 | 3,183 |
Interest expense | 0 | 0 |
Reportable segments | Specialty Admitted Insurance | ||
Segment Reporting Information [Line Items] | ||
Total underwriting profit of insurance segments | 1,623 | 842 |
Net investment income | 711 | 636 |
Interest expense | 0 | 0 |
Reportable segments | Casualty Reinsurance | ||
Segment Reporting Information [Line Items] | ||
Total underwriting profit of insurance segments | 1,744 | 1,093 |
Net investment income | 8,017 | 7,124 |
Interest expense | $ 0 | $ 0 |
Other Operating Expenses and 48
Other Operating Expenses and Other Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other Operating Expenses And Other Expenses [Abstract] | ||
Amortization of policy acquisition costs | $ 30,198 | $ 27,638 |
Other underwriting expenses of the operating segments | 17,154 | 14,794 |
Other operating expenses of the Corporate and Other segment | 7,431 | 6,461 |
Total | $ 54,783 | $ 48,893 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Available-for-sale securities | $ 1,129,208,000 | $ 1,098,620,000 |
Impaired bank loan participations held for investment | 1,700,000 | 5,100,000 |
Unpaid principal on bank loan participations for which external sources were unavailable to determine fair value | 807,000 | |
Carrying value of bank loan participations for which external sources were unavailable to determine fair value | $ 0 | |
Market approach | Level 3 | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Available-for-sale securities | $ 4,700,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Assets Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | $ 1,129,208 | $ 1,098,620 |
Trading securities: | ||
Fixed maturity securities | 3,805 | 3,808 |
Short-term investments | 26,235 | 36,804 |
Fixed maturity securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 1,043,251 | 1,016,098 |
State and municipal | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 139,725 | 144,366 |
Residential mortgage-backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 181,098 | 158,661 |
Corporate | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 439,626 | 413,721 |
Commercial mortgage and asset-backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 190,804 | 182,611 |
Obligations of U.S. government corporations and agencies | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 7,775 | 35,847 |
U.S. Treasury securities and obligations guaranteed by the U.S. government | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 82,219 | 78,874 |
Redeemable preferred stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 2,004 | 2,018 |
Equity securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 85,957 | 82,522 |
Recurring basis | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 1,129,208 | 1,098,620 |
Trading securities: | ||
Fixed maturity securities | 3,805 | 3,808 |
Short-term investments | 26,235 | 36,804 |
Recurring basis | Fixed maturity securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 1,043,251 | 1,016,098 |
Recurring basis | State and municipal | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 139,725 | 144,366 |
Recurring basis | Residential mortgage-backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 181,098 | 158,661 |
Recurring basis | Corporate | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 439,626 | 413,721 |
Recurring basis | Commercial mortgage and asset-backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 190,804 | 182,611 |
Recurring basis | Obligations of U.S. government corporations and agencies | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 7,775 | 35,847 |
Recurring basis | U.S. Treasury securities and obligations guaranteed by the U.S. government | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 82,219 | 78,874 |
Recurring basis | Redeemable preferred stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 2,004 | 2,018 |
Recurring basis | Equity securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 85,957 | 82,522 |
Recurring basis | Preferred stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 67,709 | 66,281 |
Recurring basis | Common stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 18,248 | 16,241 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 96,372 | 93,772 |
Trading securities: | ||
Fixed maturity securities | 0 | 0 |
Short-term investments | 1,000 | 1,000 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Fixed maturity securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 81,640 | 78,265 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | State and municipal | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Residential mortgage-backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Corporate | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Commercial mortgage and asset-backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Obligations of U.S. government corporations and agencies | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 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 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 81,640 | 78,265 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Redeemable preferred stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Equity securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 14,732 | 15,507 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Preferred stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | Common stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 14,732 | 15,507 |
Recurring basis | Significant Other Observable Inputs Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 1,028,156 | 1,000,168 |
Trading securities: | ||
Fixed maturity securities | 3,805 | 3,808 |
Short-term investments | 25,235 | 35,804 |
Recurring basis | Significant Other Observable Inputs Level 2 | Fixed maturity securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 956,931 | 933,153 |
Recurring basis | Significant Other Observable Inputs Level 2 | State and municipal | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 139,725 | 144,366 |
Recurring basis | Significant Other Observable Inputs Level 2 | Residential mortgage-backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 181,098 | 158,661 |
Recurring basis | Significant Other Observable Inputs Level 2 | Corporate | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 439,626 | 413,721 |
Recurring basis | Significant Other Observable Inputs Level 2 | Commercial mortgage and asset-backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 186,124 | 177,931 |
Recurring basis | Significant Other Observable Inputs Level 2 | Obligations of U.S. government corporations and agencies | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 7,775 | 35,847 |
Recurring basis | Significant Other Observable Inputs Level 2 | U.S. Treasury securities and obligations guaranteed by the U.S. government | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 579 | 609 |
Recurring basis | Significant Other Observable Inputs Level 2 | Redeemable preferred stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 2,004 | 2,018 |
Recurring basis | Significant Other Observable Inputs Level 2 | Equity securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 71,225 | 67,015 |
Recurring basis | Significant Other Observable Inputs Level 2 | Preferred stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 67,709 | 66,281 |
Recurring basis | Significant Other Observable Inputs Level 2 | Common stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 3,516 | 734 |
Recurring basis | Significant Unobservable Inputs Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 4,680 | 4,680 |
Trading securities: | ||
Fixed maturity securities | 0 | 0 |
Short-term investments | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Fixed maturity securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 4,680 | 4,680 |
Recurring basis | Significant Unobservable Inputs Level 3 | State and municipal | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Residential mortgage-backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Corporate | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Commercial mortgage and asset-backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 4,680 | 4,680 |
Recurring basis | Significant Unobservable Inputs Level 3 | Obligations of U.S. government corporations and agencies | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | U.S. Treasury securities and obligations guaranteed by the U.S. government | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Redeemable preferred stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Equity securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Preferred stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | 0 | 0 |
Recurring basis | Significant Unobservable Inputs Level 3 | Common stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | $ 0 | $ 0 |
Fair Value Measurements - Sum51
Fair Value Measurements - Summary of Assets Fair Value on a Nonrecurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank loan participations held-for-investment | $ 1,700 | $ 5,100 |
Nonrecurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank loan participations held-for-investment | 1,741 | 5,111 |
Nonrecurring basis | Quoted Prices in Active Markets for Identical Assets Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank loan participations held-for-investment | 0 | 0 |
Nonrecurring basis | Significant Other Observable Inputs Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank loan participations held-for-investment | 0 | 0 |
Nonrecurring basis | Significant Unobservable Inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank loan participations held-for-investment | $ 1,741 | $ 5,111 |
Fair Value Measurements - Sum52
Fair Value Measurements - Summary of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Available-for-sale: | ||||
Fixed maturity securities | $ 1,043,251 | $ 1,016,098 | ||
Equity securities | 85,957 | 82,522 | ||
Trading: | ||||
Bank loan participations held-for-investment, at amortized cost, net of allowance | 257,426 | 238,214 | ||
Cash and cash equivalents | 151,046 | 163,495 | $ 94,224 | $ 109,784 |
Short-term investments | 26,235 | 36,804 | ||
Liabilities | ||||
Senior debt | 98,300 | 98,300 | ||
Junior subordinated debt | 104,055 | 104,055 | ||
Carrying Value | ||||
Available-for-sale: | ||||
Fixed maturity securities | 1,043,251 | 1,016,098 | ||
Equity securities | 85,957 | 82,522 | ||
Trading: | ||||
Fixed maturity securities | 3,805 | 3,808 | ||
Bank loan participations held-for-investment, at amortized cost, net of allowance | 257,426 | 238,214 | ||
Cash and cash equivalents | 151,046 | 163,495 | ||
Short-term investments | 26,235 | 36,804 | ||
Other invested assets – notes receivable | 13,250 | 11,778 | ||
Liabilities | ||||
Senior debt | 98,300 | 98,300 | ||
Junior subordinated debt | 104,055 | 104,055 | ||
Fair Value | ||||
Available-for-sale: | ||||
Fixed maturity securities | 1,043,251 | 1,016,098 | ||
Equity securities | 85,957 | 82,522 | ||
Trading: | ||||
Fixed maturity securities | 3,805 | 3,808 | ||
Bank loan participations held-for-investment, at amortized cost, net of allowance | 257,840 | 236,532 | ||
Cash and cash equivalents | 151,046 | 163,495 | ||
Short-term investments | 26,235 | 36,804 | ||
Other invested assets – notes receivable | 19,056 | 17,104 | ||
Liabilities | ||||
Senior debt | 98,871 | 97,884 | ||
Junior subordinated debt | $ 118,752 | $ 116,569 |
Capital Stock and Equity Awar53
Capital Stock and Equity Awards - Commons Shares (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, shares outstanding | 29,866,705 | 29,696,682 | ||
Common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common shares issued during period | 170,023 | |||
Common stock, shares outstanding | 29,866,705 | 29,696,682 | 29,344,327 | 29,257,566 |
Options | Common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common shares issued during period | 127,196 | |||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock unit dividend equivalents | $ 99 | $ 77 | ||
Dividends payable | $ 409 | $ 434 | ||
RSUs | Common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common shares issued during period | 42,827 |
Capital Stock and Equity Awar54
Capital Stock and Equity Awards - Schedule of Dividends (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 30, 2018 | Feb. 22, 2018 | Mar. 31, 2017 | Feb. 14, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
Stockholders' Equity Note [Abstract] | ||||||
Dividend declared per share (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | ||
Total Amount | $ 9 | $ 8.9 |
Capital Stock and Equity Awar55
Capital Stock and Equity Awards - Equity Incentive Plans (Details) | Mar. 31, 2018shares |
2014 LTIP | Non-qualified stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum number of shares available for issuance | 4,171,150 |
Number of shares available for grant | 1,658,715 |
2014 Director Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum number of shares available for issuance | 50,000 |
Number of shares available for grant | 21,663 |
Capital Stock and Equity Awar56
Capital Stock and Equity Awards - Summary of Option Activity (Details) - Options - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Shares | ||
Beginning of period (in shares) | 1,479,236 | 2,234,699 |
Granted (in shares) | 0 | 195,509 |
Exercised (in shares) | (142,129) | (97,211) |
Forfeited (in shares) | 0 | (50,062) |
End of period (in shares) | 1,337,107 | 2,282,935 |
Exercisable, end of period (in shares) | 983,508 | 1,334,756 |
Weighted- Average Exercise Price | ||
Beginning of period (in dollars per share) | $ 27.81 | $ 22.84 |
Granted (in dollars per share) | 0 | 42.17 |
Exercised (in dollars per share) | 20.14 | 17.23 |
Forfeited (in dollars per share) | 0 | 27.97 |
End of period (in dollars per share) | 28.63 | 24.62 |
Exercisable, end of period (in dollars per share) | $ 26.06 | $ 20.47 |
Vesting period (in years) | 7 years | |
Minimum | ||
Weighted- Average Exercise Price | ||
Vesting period (in years) | 3 years | |
Maximum | ||
Weighted- Average Exercise Price | ||
Vesting period (in years) | 4 years |
Capital Stock and Equity Awar57
Capital Stock and Equity Awards - Summary of RSU Activity (Details) - RSUs - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Shares | ||
Unvested, beginning of period (in shares) | 178,882 | 196,800 |
Granted (in shares) | 214,907 | 117,879 |
Vested (in shares) | (62,714) | (37,485) |
Forfeited (in shares) | 0 | (19,743) |
Unvested, end of period (in shares) | 331,075 | 257,451 |
Shares | ||
Unvested, beginning of period (in dollars per share) | $ 37.93 | $ 24.38 |
Granted (in dollars per share) | 39.81 | 42.17 |
Vested (in dollars per share) | 40.90 | 32.07 |
Forfeited (in dollars per share) | 0 | 24.06 |
Unvested, end of period (in dollars per share) | $ 38.59 | $ 31.43 |
Vesting period (in years) | 3 years | |
Non-employee directors | ||
Shares | ||
Vesting period (in years) | 1 year | |
Minimum | ||
Shares | ||
Vesting period (in years) | 1 year | |
Maximum | ||
Shares | ||
Vesting period (in years) | 5 years |
Capital Stock and Equity Awar58
Capital Stock and Equity Awards - Summary of Share Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | ||
Share based compensation expense | $ 1,455 | $ 1,794 |
U.S. tax benefit on share based compensation expense | $ 173 | $ 469 |
Capital Stock and Equity Awar59
Capital Stock and Equity Awards - Compensation Expense (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Equity [Abstract] | |
Unrecognized share based compensation expense | $ 14 |
Weighted-average period of unrecognized share based compensation expense (in years) | 2 years 3 months 18 days |
Weighted-average remaining contractual life of options outstanding (in years) | 4 years 4 months 24 days |
Weighted-average remaining contractual life of options exercisable (in years) | 4 years |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent event - $ / shares | Jun. 29, 2018 | Jun. 11, 2018 | May 01, 2018 |
Subsequent Event [Line Items] | |||
Dividends payable, date declared | May 1, 2018 | ||
Cash dividend declared (in dollars per share) | $ 0.30 | ||
Dividends payable, date to be paid | Jun. 29, 2018 | ||
Dividend payable, record date | Jun. 11, 2018 |