Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 30, 2019 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity Registrant Name | ProSight Global, Inc. | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 43,058,266 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001634038 | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Fixed income securities, available-for-sale at fair value (amortized cost $1,999,403 in 2019 and $1,729,755 in 2018) | $ 2,040,682 | $ 1,693,382 |
Commercial levered loans at amortized cost (fair value $13,950 in 2019 and $15,858 in 2018) | 14,069 | 16,915 |
Limited partnerships and limited liability companies at fair value (cost $62,226 in 2019 and $51,903 in 2018) | 66,660 | 53,432 |
Short-term investments | 43,873 | 36,661 |
Total investments | 2,165,284 | 1,800,390 |
Cash and cash equivalents | 17,284 | 22,279 |
Restricted cash | 10,213 | 7,621 |
Accrued investment income | 13,610 | 12,279 |
Premiums and other receivables, net | 190,004 | 200,347 |
Receivable from reinsurers on paid losses | 3,481 | 12,428 |
Reinsurance receivables on unpaid losses | 193,952 | 185,295 |
Deferred policy acquisition costs | 98,812 | 93,613 |
Prepaid reinsurance premiums | 42,861 | 44,626 |
Net deferred income taxes | 4,803 | 33,239 |
Goodwill and net intangible assets | 29,189 | 29,219 |
Fixed assets and capitalized software, net | 37,167 | 39,001 |
Funds withheld related to sale of affiliate | 19,453 | 19,397 |
Other assets | 29,537 | 57,653 |
Assets of discontinued operations | 21,584 | 19,719 |
Total assets | 2,877,234 | 2,577,106 |
Liabilities | ||
Reserve for unpaid losses and loss adjustment expenses | 1,521,648 | 1,396,812 |
Reserve for unearned premiums | 483,223 | 435,933 |
Ceded reinsurance payable | 17,768 | 13,281 |
Notes payable, net of debt issuance costs | 164,693 | 182,355 |
Funds held under reinsurance agreements | 58,855 | 63,165 |
Other liabilities | 56,438 | 73,474 |
Liabilities of discontinued operations | 31,578 | 22,256 |
Total liabilities | 2,334,203 | 2,187,276 |
Stockholders’ equity | ||
Preferred stock, $0.01 par value; 50,000,000 shares authorized; no shares issued or outstanding | ||
Common stock, $0.01 par value; 200,000,000 shares authorized; 43,071,186 and 38,864,289 shares issued, 43,058,266 and 38,851,369 shares outstanding in 2019 and 2018, respectively | 431 | 389 |
Additional paid in capital | 661,761 | 607,260 |
Accumulated other comprehensive income (loss) | 37,453 | (22,315) |
Retained deficit | (156,414) | (195,304) |
Treasury shares - at cost (12,920 shares) | (200) | (200) |
Total stockholders’ equity | 543,031 | 389,830 |
Total liabilities and stockholders’ equity | $ 2,877,234 | $ 2,577,106 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Consolidated Balance Sheets | ||
Fixed income securities, available-for-sale, amortized cost | $ 1,999,403 | $ 1,729,755 |
Commercial levered loans, fair value | 13,950 | 15,858 |
Limited partnerships and limited liability companies, cost | $ 62,226 | $ 51,903 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 43,071,186 | 38,864,289 |
Common stock, shares outstanding | 43,058,266 | 38,851,369 |
Treasury shares, shares | 12,920 | 12,920 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Operations | |||
Gross written premiums | $ 968,011 | $ 895,112 | $ 836,334 |
Net earned premiums | 807,854 | 730,785 | 609,786 |
Net investment income | 68,897 | 55,971 | 36,196 |
Realized investment gains (losses), net | 770 | (1,557) | 4,204 |
Other income | 538 | 673 | 853 |
Total revenues | 878,059 | 785,872 | 651,039 |
Expenses: | |||
Net losses and loss adjustment expenses incurred | 501,025 | 434,830 | 393,741 |
Policy acquisition expenses | 184,771 | 171,429 | 126,023 |
General and administrative expenses | 105,686 | 100,118 | 87,821 |
Interest expense | 12,795 | 12,377 | 12,125 |
Other expense | 16,151 | ||
Total expenses | 820,428 | 718,754 | 619,710 |
Income from continuing operations before income taxes | 57,631 | 67,118 | 31,329 |
Income tax provision: | |||
Current | (185) | (853) | 864 |
Deferred | 12,322 | 14,242 | 37,369 |
Total income tax expense | 12,137 | 13,389 | 38,233 |
Income (loss) from continuing operations | 45,494 | 53,729 | (6,904) |
Discontinued operations: | |||
Loss from discontinued operations before income taxes | (8,718) | (560) | (37,768) |
Income tax benefit | (2,114) | (1,374) | (679) |
(Loss) income from discontinued operations | (6,604) | 814 | (37,089) |
Net income (loss) | $ 38,890 | $ 54,543 | $ (43,993) |
Earnings per share - basic: | |||
Net income (loss) from continuing operations | $ 1.11 | $ 1.39 | $ (0.18) |
Net income (loss) | 0.95 | 1.41 | (1.17) |
Earnings per share - diluted: | |||
Net income (loss) from continuing operations | 1.10 | 1.36 | (0.18) |
Net income (loss) | $ 0.94 | $ 1.38 | $ (1.17) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Loss | |||
Net income (loss) | $ 38,890 | $ 54,543 | $ (43,993) |
Other comprehensive income (loss), net of taxes: | |||
Change in unrealized holding gains (losses) on securities, net of deferred tax expense (benefit) of $16,277 in 2019, $(10,842) in 2018 and $1,442 in 2017 | 61,643 | (42,740) | (1,357) |
Foreign currency translation adjustment | 6,881 | ||
Less reclassification adjustment for gains (losses) included in net income (loss) net of tax expense (benefit) of $162 in 2019, $(429) in 2018 and $1,471 in 2017 | 1,875 | (1,128) | 17,292 |
Other comprehensive income (loss) | 59,768 | (41,612) | (11,768) |
Comprehensive income (loss) | $ 98,658 | $ 12,931 | $ (55,761) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Loss | |||
Change in unrealized holding (losses) gains on securities, deferred tax expense (benefit) | $ 16,277 | $ (10,842) | $ 1,442 |
Reclassification adjustment for (losses) gains included in net income, tax expense (benefit) | $ 162 | $ (429) | $ 1,471 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Equity - USD ($) $ in Thousands | Common stockIPO | Common stock | Paid-in capitalIPO | Paid-in capital | Accumulated other comprehensive (loss) income | Retained deficit | Treasury shares | IPO | Total |
Balance at the beginning of the period at Dec. 31, 2016 | $ 355 | $ 555,289 | $ 29,482 | $ (204,271) | $ (200) | $ 380,655 | |||
Increase (decrease) in Stockholders' Equity | |||||||||
Shares issued/Proceeds from common stock sold in initial public offering, net of offering costs | 32 | 32 | |||||||
Stock based employee compensation plan | 1,089 | 1,089 | |||||||
Capital contributions | 49,968 | 49,968 | |||||||
Net unrealized gain (loss) on investment securities, net of deferred tax expense | (18,649) | (18,649) | |||||||
Foreign currency translation (loss) | 6,881 | 6,881 | |||||||
Reclassification of stranded deferred taxes | 1,583 | (1,583) | (1,583) | ||||||
Net income (loss) | (43,993) | (43,993) | |||||||
Balance at the end of the period at Dec. 31, 2017 | 387 | 606,346 | 19,297 | (249,847) | (200) | 375,983 | |||
Increase (decrease) in Stockholders' Equity | |||||||||
Shares issued/Proceeds from common stock sold in initial public offering, net of offering costs | 2 | (2) | |||||||
Stock based employee compensation plan | 916 | 916 | |||||||
Net unrealized gain (loss) on investment securities, net of deferred tax expense | (41,612) | (41,612) | |||||||
Net income (loss) | 54,543 | 54,543 | |||||||
Balance at the end of the period at Dec. 31, 2018 | 389 | 607,260 | (22,315) | (195,304) | (200) | 389,830 | |||
Increase (decrease) in Stockholders' Equity | |||||||||
Shares issued/Proceeds from common stock sold in initial public offering, net of offering costs | $ 42 | $ 50,836 | $ 50,878 | ||||||
Stock based employee compensation plan | 1 | 8,578 | 8,579 | ||||||
Shares cancelled | (1) | 1 | |||||||
Retirement of common stock (tax payments on equity compensation) | (740) | (740) | |||||||
Net unrealized gain (loss) on investment securities, net of deferred tax expense | 59,768 | 59,768 | |||||||
Equity distribution | (4,174) | (4,174) | |||||||
Net income (loss) | 38,890 | 38,890 | |||||||
Balance at the end of the period at Dec. 31, 2019 | $ 431 | $ 661,761 | $ 37,453 | $ (156,414) | $ (200) | $ 543,031 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Changes in Stockholders’ Equity | |||
Net unrealized (loss) gain on investment securities, deferred tax (benefit) | $ 16,115 | $ (10,413) | $ (29) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | |||
Net income (loss) from continuing operations | $ 45,494 | $ 53,729 | $ (6,904) |
Net (loss) income from discontinued operations | (6,604) | 814 | (37,089) |
Net (loss) income from discontinued operations | (6,604) | 814 | (37,089) |
Net income (loss) | 38,890 | 54,543 | (43,993) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Provision for deferred taxes | 12,322 | 14,242 | 37,369 |
Realized investment (gains) losses, net | (770) | 1,557 | (4,204) |
Net limited partnerships (gains) | (3,101) | (1,081) | (3,240) |
Net accretion from bonds and commercial loans | (2,622) | (6,083) | (2,364) |
Depreciation and amortization | 8,737 | 7,351 | 7,615 |
Stock based compensation | 8,578 | 916 | 1,089 |
Changes in: | |||
Premiums and other receivables | 10,343 | (16,013) | (15,956) |
Receivable from reinsurers on paid losses and reinsurance receivable from unpaid losses | 290 | 20,653 | (12,849) |
Ceded reinsurance payable | 4,487 | (5,167) | 15,632 |
Accrued investment income | (1,331) | (2,870) | (4,056) |
Deferred policy acquisition costs | (5,199) | (32,854) | 15,813 |
Prepaid reinsurance premiums | 1,765 | 78,324 | (92,054) |
Unpaid losses and loss adjustment expenses | 124,836 | 138,575 | 91,618 |
Reserve for unearned premiums | 47,290 | 40,501 | 40,603 |
Funds withheld related to sale of affiliate | (56) | 7,376 | (26,988) |
Funds held under reinsurance agreements | (4,310) | (49,095) | 91,671 |
Other assets | 23,938 | (15,092) | (8,992) |
Other liabilities | (17,036) | (2,377) | 48,463 |
Total adjustments | 208,161 | 178,863 | 179,170 |
Net cash provided by operating activities - continuing operations | 253,655 | 232,592 | 172,266 |
Net cash used in operating activities - discontinued operations | (359) | (900) | (98,396) |
Net cash provided by operating activities | 253,296 | 231,692 | 73,870 |
Investing activities | |||
Purchases of available-for-sale fixed income securities | (570,726) | (509,970) | (1,236,581) |
Sales of available-for-sale fixed income securities | 145,053 | 173,768 | 719,916 |
Redemptions of available-for-sale fixed income securities | 157,860 | 81,417 | 257,102 |
Purchases of commercial levered loans | (7,101) | (3,150) | |
Redemptions of commercial levered loans | 2,815 | 14,698 | 8,858 |
Purchases of limited partnerships | (15,407) | (33,580) | (45,251) |
Distributions and redemptions from limited partnerships | 5,280 | 22,832 | 40,270 |
Purchases of short-term investments | (358,296) | (172,787) | (180,400) |
Sales of short-term investments | 351,761 | 140,623 | 238,291 |
Acquisition of fixed assets and capitalized software | (6,535) | (8,489) | (11,884) |
Net cash used in investing activities - continuing operations | (288,195) | (298,589) | (212,829) |
Net cash (used in) provided by investing activities - discontinued operations | (421) | 637 | 52,356 |
Net cash used in investing activities | (288,616) | (297,952) | (160,473) |
Financing activities | |||
Proceeds from notes payable | 18,000 | ||
Repayment of notes payable | (18,000) | ||
Tax withholding on stock compensation awards | (740) | ||
Proceeds from shares issued | 50,878 | 32 | |
Capital contributions | 49,968 | ||
Net cash provided by financing activities | 32,138 | 18,000 | 50,000 |
Net change in cash and cash equivalents | (3,182) | (48,260) | (36,603) |
Cash, cash equivalents and restricted cash at beginning of year - continuing operations | 29,900 | 77,872 | 75,211 |
Cash, cash equivalents and restricted cash at beginning of year - discontinued operations | 1,034 | 1,322 | 40,586 |
Less: cash, cash equivalents and restricted cash at end of year - discontinued operations | (255) | (1,034) | (1,322) |
Cash, cash equivalents and restricted cash at end of year | $ 27,497 | $ 29,900 | $ 77,872 |
Background
Background | 12 Months Ended |
Dec. 31, 2019 | |
Background | |
Background | 1. ProSight Global, Inc. and its subsidiaries (the “Company”) was founded in 2009 by members of the current management team and secured capital commitments from affiliates of each of The Goldman Sachs Group, Inc. (“Goldman Sachs”) and TPG Global, LLC (“TPG”). The Company established its insurance operating platform and acquired its insurance subsidiaries through the acquisition of NYMAGIC, Inc. in 2010. The Company was incorporated in Delaware in 2010 and is owned by ProSight Investment LLC (“PI”), ProSight Parallel Investment LLC (“PPI”), and ProSight TPG, LP (“PT”). PI and PPI are wholly-owned by ProSight Equity Management Inc., which is held as an investment within the GS Capital Partners VI funds. PT is held as an investment within TPG Partners VI, LP. The Company is the parent of ProSight Specialty Insurance Group, Inc. (“PSIG”). PSIG conducts its specialty insurance business through three insurance subsidiaries: New York Marine and General Insurance Company (“New York Marine”), Gotham Insurance Company (“Gotham”), and Southwest Marine and General Insurance Company (“Southwest Marine”). On October 1, 2016, ProSight Specialty Insurance Solutions, LLC (“PSIS”) became a direct subsidiary of PSIG. Effective April 19, 2018, PSIS changed its name to ProSight Specialty Insurance Brokerage, LLC (“PSIB”). The Company is also the parent of ProSight Specialty Management Company (“PSMC”), which manages a risk-sharing pool of the Company’s subsidiaries, and ProSight Specialty Bermuda Ltd. (“PSBL”). The Company focuses on producing insurance business in specialized niche markets with selective distribution networks possessing unique expertise. The Company’s major customer segments are Construction, Consumer Services, Marine and Energy, Media and Entertainment, Professional Services, Real Estate, Sports, and Transportation. Reorganization Prior to July 25, 2019, the Company was a wholly-owned subsidiary of ProSight Global Holdings Limited (“PGHL”), a Bermuda holding company. Effective July 25, 2019, prior to the completion of the Company’s initial public offering (“IPO”), PGHL merged with and into the Company, with the Company surviving the merger (the “merger”). The prior holders of PGHL’s equity interests then outstanding received, as merger consideration, the right to receive 6.46 shares of the Company’s common stock for each such outstanding PGHL equity interest. The total merger consideration was 38,851,369 shares of the Company’s common stock, which then comprised 100% of the shares of the Company’s outstanding common stock. As a result of the merger, the assets and liabilities of the Company include, effective July 25, 2019, the assets and liabilities of PGHL. In addition, on July 24, 2019, in connection with the merger, the Company’s duly adopted amended and restated certificate of incorporation (the “Certificate of Incorporation”) became effective, providing for, among other things, the authorization of 200,000,000 shares of common stock and 50,000,000 shares of preferred stock. The consolidated financial statements, related notes and schedules have been restated for all historical periods prior to and including June 30, 2019, presented to give effect to the merger and related conversion of shares, including reclassifying an amount equal to the change in value of common stock to additional paid-in capital, as well as the effectiveness of the Certificate of Incorporation. Prior to the merger, PGHL’s subsidiaries ProSight Specialty International Holdings Limited (“PSIH”) and ProSight Specialty European Holdings Limited (“PSEH”) were merged with and into ProSight Global, Inc., effective February 5, 2019. Additionally, effective February 5, 2019, PSBL became a wholly-owned subsidiary of the Company. Prior to February 5, 2019, PSBL was a wholly-owned subsidiary of PSEH. Initial Public Offering On July 29, 2019, the Company completed its IPO with the sale of 7,857,145 shares of the Company’s common stock, including the issuance and sale by the Company of 4,285,715 shares of the Company’s common stock and the sale by PI and PPI (collectively, the “GS Investors”) and PT, TPG PS 1, L.P., TPG PS 2, L.P., TPG PS 3, L.P. and TPG PS 4, L.P. (collectively the “TPG Investors” and together with the GS Investors, the “Principal Stockholders”) of 3,571,430 shares of the Company’s common stock. Shares of the Company’s common stock were initially offered to the public by the underwriters in the IPO at a per-share price of $14.00. After deducting underwriting discounts and commissions and estimated offering expenses, the net proceeds to the Company from the IPO were approximately $50.8 million. The Company did not receive any of the proceeds from the sale of the shares of the Company’s common stock sold by the Principal Stockholders in the IPO. Following the IPO, the GS Investors held approximately 40.9% of the Company’s outstanding common stock and the TPG Investors held approximately 39.4% of the Company’s outstanding common stock. On August 15, 2019 the Principal Stockholders completed the sale of 1,178,570 shares of the Company’s common stock at a price of $14.00 per share less the underwriting discount pursuant to the underwriters’ exercise of their over-allotment option granted in connection with the IPO. The offering was registered pursuant to the registration statement on Form S-1, which the SEC declared effective on July 24, 2019. The Company did not receive any of the proceeds from the sale of the shares of common stock of the Company sold by the Principal Stockholders in this offering. Following this offering, the GS Investors held approximately 39.5% of the Company’s outstanding common stock and the TPG Investors held approximately 38.0% of the Company’s outstanding common stock. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Summary Of Significant Accounting Policies | |
Summary Of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Reporting and Use of Estimates The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported financial statement balances, as well as disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Consolidation Unless otherwise noted, the consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of intercompany balances and transactions, and relate to continuing operations. Discontinued operations are reported separately. Investments Investment transactions are recorded on their trade date with balances pending settlement included in the consolidated balance sheets as a receivable for investments disposed of or payable for investments securities acquired and reported within other assets or other liabilities respectively. Realized investment gains and losses are determined on the basis of first-in, first-out. Fixed Income Securities Fixed income securities may include U.S. treasury securities, government agency securities, municipal debt obligations, residential mortgage backed securities (“RMBS”), commercial mortgage backed securities (“CMBS”), collateralized loan obligations (“CLO”), asset backed securities (“ABS”) and corporate debt securities. Fixed income securities categorized as available-for-sale (“AFS”) are reported at estimated fair value and include those fixed income investments where the Company’s intent to carry such investments to maturity may be affected in future periods by changes in market interest rates, tax position or credit quality. Unrealized gains and losses, net of related deferred income taxes, on AFS securities are reflected in accumulated other comprehensive income (loss) (“AOCI”) in stockholders’ equity. The cost of fixed income securities is adjusted for the amortization of any purchase premiums and the accretion of purchase discounts from the time of purchase of the security to its sale or maturity. This amortization of premium and accretion of discount is recorded in net investment income in the consolidated statements of operations. Any realized gains or losses resulting from the sale of securities are recognized in realized investment gains (losses), net in the consolidated statements of operations. Commercial Levered Loans The Company’s investment portfolio includes commercial levered loans, which are classified as held-for-investment and are reported at amortized cost. Investments in Limited Partnerships and Limited Liability Companies The Company has elected to carry investments in limited partnerships and limited liability companies at fair value. Interest income, dividend income and movements in fair value respective to cost basis are recorded as investment income. The fair values are obtained from statements of net asset value made available by the respective limited partnerships and limited liability companies. Short-Term Investments Short-term investments, which have maturities of one year or less at acquisition, are carried at amortized cost, which approximates fair value. Cash and Cash Equivalents Cash and cash equivalents include cash on deposit with banks and treasury bills with maturities of less than 90 days at acquisition. The Company considers all highly liquid debt instruments with maturities of three months or less at acquisition to be cash equivalents. Restricted cash consists of escrow funds, trust funds and collateral related to funds withheld. Other-Than-Temporary Impairments Management reviews fixed income securities for other-than-temporary impairments (“OTTI”) based upon quantitative and qualitative criteria that include, but are not limited to, downgrades in rating agency levels for securities, the duration and extent of declines in fair value of the security below its cost or amortized cost, interest rate trends, the Company’s intent to sell or hold the security, market conditions, and the regulatory environment for the security’s issuer. The Company may also consider cash flow models and matrix analyses in connection with its OTTI evaluation. The Company will record credit impairment in the consolidated statements of operations when the present value of cash flows expected to be collected from the debt security is less than the amortized cost basis of the security. In addition, any portion of such decline to arise from factors other than credit is recorded as a component of other comprehensive income (“OCI”). Fair Values of Financial Instruments For fixed income securities, quoted prices in active markets are used to determine the fair value. When such information is not available, as in the case of securities that are not publicly traded, other valuation techniques are employed. These valuation techniques may include, but are not limited to, using third-party pricing sources (dealer marks), identifying comparable securities with quoted market prices and using internally prepared valuations based on certain modeling and pricing methods. For limited partnerships and limited liability companies, the Company utilizes statements of net asset value made available by the respective limited partnerships and limited liability companies. For notes payable, the Company takes into consideration, the interest-rate environment for benchmark interest rates, credit spreads for similar securities, as well as the Company’s rating and financial performance to calculate the fair value. Premium Recognition Premiums are reflected in income on a monthly pro rata basis over the terms of the respective policies. Accordingly, unearned premium reserves are established for the portion of premiums written applicable to unexpired policies in force. The Company has provided an allowance for uncollectible premiums receivable of $5.1 million and $4.8 million as of December 31, 2019 and 2018, respectively. Policy Acquisition Cost Recognition Policy acquisition costs related to unearned premiums that vary with, and are directly related to, the production of such premiums are deferred. Furthermore, such deferred costs: (i) represent only incremental, direct costs associated with the successful acquisition of a new or renewal insurance contract; (ii) are essential to the contract transaction; (iii) would not have been incurred had the contract transaction not occurred; and (iv) are related directly to the acquisition activities involving underwriting, policy issuance and processing. Policy acquisition costs, such as brokerage commissions and premium taxes, and other expenses related to the underwriting process, including their employees’ compensation and benefits, are amortized to expense as the related premiums are earned. Accounting guidance requires a premium deficiency analysis to be performed at the level an entity acquires, services, and measures the profitability of its insurance contracts. Currently, the Company determines the sufficiency of unearned premium net of deferred policy acquisition costs against expected levels of losses and loss adjustment expenses by line of business. The determination anticipates investment income. To the extent carried unearned premium net of deferred policy acquisition cost is viewed as deficient, the respective deferred policy acquisition cost is first reduced and, if needed, a separate deficiency reserve is established. Reinsurance The Company’s insurance subsidiaries participate in various reinsurance agreements on both an assumed and ceded basis. The Company uses various types of reinsurance, including quota share, excess of loss and facultative agreements, to spread the risk of loss among several reinsurers and to limit its exposure from losses on any one occurrence. Any recoverable due from reinsurers is recorded in the period in which the related gross liability is established. Reinsurance reinstatement premiums are incurred by the Company based upon the provisions of the reinsurance contracts. In the event of a loss, the Company may be obligated to pay additional reinstatement premiums under its excess of loss reinsurance treaties. In such instances, the respective reinstatement premium is expensed immediately. The Company accounts for reinsurance receivables and prepaid reinsurance premiums as assets. The Company maintains an allowance for doubtful accounts, which includes amounts in dispute, amounts due from insolvent or financially impaired companies and other balances deemed uncollectible. Management continually reviews and updates such estimates. Profit commission revenue derived from reinsurance transactions is recognized when such amounts become earned as provided in the treaties with the respective reinsurers. Depreciation Property, equipment, and leasehold improvements are depreciated over their estimated useful lives, which are approximately three to seven years. Costs incurred in developing or obtaining software are capitalized and depreciated on a straight-line basis over their estimated useful lives, which are approximately three to seven years. Capitalized software as of December 31, 2019 and 2018, had unamortized balances of $33.8 million and $35.0 million, respectively. Depreciation on capitalized software commences once the software is placed into service. The Company recorded depreciation expense of $7.0 million, $5.8 million and $5.4 million for the years ended 2019, 2018 and 2017, respectively. Other depreciable assets, primarily leasehold improvements, as of December 31, 2019 and 2018, had unamortized balances of $3.3 million and $3.8 million, respectively. The Company recorded depreciation expense of $1.2 million and $1.5 million and $1.7 million, for the years ended 2019, 2018 and 2017, respectively. Income Taxes The Company’s U.S. subsidiaries file a consolidated federal income tax return in the U.S. The Company provides deferred income taxes on temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities based upon enacted tax rates. The effect of a change in tax rates is recognized in income in the period of change. The Company provides for a valuation allowance on certain deferred tax assets primarily as a result of the uncertainty that the Company can fully utilize all deferred taxes that arose from net operating losses (NOL) incurred. This uncertainty stems from issues relating to the current economic conditions and limitations on the period that such losses can be carried forward prior to expiring. To the extent the Company generates future operating income to offset these losses, it may recover some or the entire amount of the deferred income taxes associated with temporary differences. On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Reform”) was enacted which reduced the corporate tax rate from 35% to 21% effective January 1, 2018. This resulted in a re-measurement of the Company’s net deferred taxes to reflect the new rate at which the deferred items will be realized. The re-measurement of the net deferred tax asset as another income tax expense resulted in tax effects of items within AOCI, which did not reflect the current enacted tax rate. As a result, the Company elected to early adopt Accounting Standards Update 2018-02 (“ASU 2018-02”), Income Statement — Reporting Comprehensive Income at December 31, 2017, by making a one-time adjustment of $1.6 million to reclassify the stranded tax effects from accumulated other comprehensive income to retained earnings, that was associated with net unrealized gains on our investment portfolio resulting from the enactment of Tax Reform. Losses and Loss Adjustment Expenses Losses and loss adjustment expenses are a function of the amount and type of insurance contracts the Company writes, the loss experience associated with the underlying coverage, and the expenses incurred in the handling of the losses. In general, the Company’s losses and loss adjustment expenses are affected by the frequency of claims associated with the particular types of insurance contracts, trends in the average size of losses incurred on a particular type of business, mix of business, changes in the legal or regulatory environment related to the business, trends in legal defense costs, wage inflation, and inflation in medical costs. The reserve for loss and loss adjustment expenses includes a provision for both reported claims (case reserves) and incurred but not reported claims (“IBNR”). IBNR estimates are generally calculated by first projecting the ultimate cost of all losses that have occurred (expected losses), and then subtracting paid losses, case reserves, and loss expenses. The reserve for loss and loss adjustment expenses represents management’s best estimate of unpaid losses and loss adjustment expenses using individual case-basis valuations and statistical analysis that is not discounted, with the exception of certain workers’ compensation claims. Workers’ compensation reserves for policy years between 2007 and 2019 were discounted at discount rates between 2.85% and 5.00%, for the years ended December 31, 2019 and 2018, respectively. Carried discounted reserves on these workers’ compensation claims, net of reinsurance, were $116.9 million and $96.3 million at December 31, 2019 and 2018, respectively. The amount of discount related to workers’ compensation reserves were $47.4 million and $37.0 million at December 31, 2019 and 2018, respectively. The Company’s loss reserve review processes use actuarial methods that may vary by line of business. The actuarial methods used include the following methods: · Reported Loss Development Method: a reported loss development pattern is calculated based on historical loss development data, and this pattern is then used to project the latest evaluation of cumulative reported losses for each accident year or underwriting year, as appropriate, to ultimate levels; · Paid Development Method: a paid loss development pattern is calculated based on historical paid loss development data, and this pattern is then used to project the latest evaluation of cumulative paid losses for each accident year or underwriting year, as appropriate, to ultimate levels; · Expected Loss Ratio Method: expected loss ratios are applied to premiums earned, based on actuarial pricing expectation, or historical insurance industry results when company experience is deemed not to be sufficient; and · Bornhuetter-Ferguson Method: the results from the Expected Loss Ratio Method are essentially blended with either the Reported Loss Development Method or the Paid Development Method. Although considerable variability is inherent in the estimates of reserves for losses and loss adjustment expenses, management believes the reserve is adequate. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known. Such adjustments are included in current operations. Share-Based Compensation Entities are required to measure compensation cost for awards of equity instruments to employees based on the grant-date fair value of those awards and recognize compensation expense over the service period that the awards are expected to vest. The Company records compensation costs on a straight-line basis over the vesting period of all awards except when an award requires accelerated recognition. The Company does not apply a forfeiture rate to unvested awards and accounts for forfeitures as they occur. Stock-based compensation expense related to long-term incentive awards and director restricted stock units (“RSUs”) are included in general and administrative expenses in the Company’s consolidated statements of operations. Stock-based compensation expense related to supplemental RSUs and founders grant awards are included in other expenses in the Company’s consolidated statements of operations. Goodwill and Net Intangible Assets Goodwill represents the excess of the cost of acquiring a business enterprise over the fair value of the net assets acquired. Goodwill is deemed to have an indefinite life and is not amortized, but rather tested annually, in the fourth quarter, for impairment. A quantitative goodwill impairment analysis is performed if an annual qualitative analysis indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Finite-lived intangible assets are amortized over their estimated useful lives. Indefinite-lived other intangible assets are tested for impairment annually, in the fourth quarter, or when certain triggering events require such tests. Earnings Per Share Basic earnings per share of common stock is based on the weighted-average number of shares of outstanding common stock, par value $0.01 per share, of the Company (“Common Stock”) during the period, and vested RSUs. Vested RSUs awaiting conversion into common stock were 906,182 for the year ended December 31, 2019, 548,292 for the year ended December 31, 2018 and 517,446 for the year ended December 31, 2017. Diluted earnings per share of Common Stock are based on those shares used to calculate basic earnings per share of Common Stock plus the dilutive effect of unvested stock-based compensation awards. Basic and diluted earnings per share are calculated by dividing net income by the applicable weighted-average number of shares outstanding during the period. The Company did not declare any stock dividends for the years ended December 31, 2019, 2018 and 2017. Reclassifications All share and per share amounts in the financial statements, related notes and schedules have been restated for all historical periods prior to and including June 30, 2019, presented to give effect to the merger and related conversion of shares, including reclassifying an amount equal to the change in value of common stock to additional paid-in capital, as well as the effectiveness of the Certificate of Incorporation. From time to time we reallocate existing niches to new or different customer segments in order to align them more efficiently, for reasons that may include the evolution of business or customers in that niche, the establishment or discontinuance of related niches, changes in responsibilities of our management team handling the segments, among others. All historical customer segment information is presented in accordance with the current composition of our customer segments and such reallocation of premium amounts, and as a result some customer segment information may differ from amounts previously reported i n Note 18. Segments. |
Recently Adopted Accounting Sta
Recently Adopted Accounting Standards | 12 Months Ended |
Dec. 31, 2019 | |
Recently Adopted Accounting Standards | |
Recently Adopted Accounting Standards | 3. Recently Adopted Accounting Standards Accounting Guidance Adopted In October 2016, the FASB issued ASU 2016‑16, Income Taxes, Intra-Entity Transfers of Assets Other Than Inventory . ASU 2016‑16 requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to an outside party. ASU 2016‑16 should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. For the Company, ASU 2016‑16 is effective for annual periods beginning after December 15, 2018 and interim periods within annual periods beginning after December 15, 2019. ASU 2016‑16 is effective for public entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company adopted ASU 2016‑16 in the fourth quarter of 2019 and it did not have a material impact on its financial condition and results of operations. In January 2016, the FASB issued ASU 2016‑01, Financial Instruments — Overall, Recognition and Measurement of Financial Assets and Financial Liabilities . ASU 2016‑01 provides guidance to improve certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Specifically the guidance: (i) requires equity investments to be measured at fair value with changes in fair value recognized in earnings; (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (iii) eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost; (iv) requires the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes; and (v) clarifies that the need for a valuation allowance on a deferred tax asset related to an AFS security should be evaluated with other deferred tax assets. The Company shall apply ASU 2016‑01 by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. ASU 2016‑01 is effective for public entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. For the Company, ASU 2016‑01 is effective for annual periods beginning after December 15, 2018 and interim periods within annual periods beginning after December 15, 2019. The Company adopted ASU 2016-01 in the fourth quarter of 2019 and it did not have a material impact on its financial condition and results of operations. Accounting Guidance Not Yet Adopted In February 2016, the FASB issued ASU 2016‑02, Leases to improve the financial reporting of leasing transactions. Under this ASU, lessees will recognize a right-of-use asset and corresponding liability on the balance sheet for all leases, except for leases covering a period of fewer than 12 months. The liability is to be measured as the present value of the future minimum lease payments taking into account renewal options if applicable plus initial incremental direct costs such as commissions. The minimum payments are discounted using the rate implicit in the lease or, if not known, the lessee’s incremental borrowing rate. The lessee’s income statement treatment for leases will vary depending on the nature of what is being leased. A financing type lease is present when, among other matters, the asset is being leased for a substantial portion of its economic life or has an end-of-term title transfer or a bargain purchase option as in today’s practice. The payment of the liability set up for such leases will be apportioned between interest and principal; the right-of use asset will be generally amortized on a straight-line basis. If the lease does not qualify as a financing type lease, it will be accounted for on the income statement as rent on a straight-line basis. ASU 2016‑02 requires the application of a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. ASU 2016‑02 is effective for public entities for annual periods beginning after December 15, 2018, including interim periods within those annual periods with early adoption permitted. For the Company, ASU 2016‑02 is effective for annual periods beginning after December 15, 2019 and interim periods within annual periods beginning after December 15, 2020. The Company will adopt ASU 2016‑02 in the first quarter of 2020, and expects to recognize, at adoption, a right-of-use asset of $6.8 million and a corresponding lease liability of $6.8 million in continuing operations. The Company expects to recognize, at adoption, a right-of-use asset of $2.6 million and a corresponding lease liability of $2.6 million in discontinued operations. In June 2016, the FASB issued ASU 2016‑13, Financial Instruments — Credit Losses, Measurement of Credit Losses on Financial Instruments . ASU 2016‑13 will change the way entities recognize impairment of financial assets by requiring immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, including, among others, held-to-maturity debt securities, trade receivables, and reinsurance receivables. ASU 2016‑13 requires a valuation allowance to be calculated on these financial assets and that they be presented on the financial statements net of the valuation allowance. The valuation allowance is a measurement of expected losses that is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This methodology is referred to as the current expected credit loss model. ASU 2016‑13 is effective for public entities for annual periods beginning after December 15, 2019, including interim periods within those annual periods with early adoption permitted. For the Company, ASU 2016‑13 is effective for annual periods beginning after December 15, 2022 including interim periods within these annual periods. The Company will adopt ASU 2016-13 in the first quarter of 2020 and does not currently believe that the implementation will have a material impact to the Company’s financial condition or results of operations. In August 2018, the FASB issued ASU 2018‑13, Fair Value Measurement: Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018‑13 modifies the disclosure requirements for fair value measurements. The modifications removed the following disclosure requirements: (i) the amount of, and reasons for, transfers between Level 1 and Level 2 of the fair value hierarchy; (ii) the policy for timing of transfers between levels; and (iii) the valuation processes for Level 3 fair value measurements. This ASU added the following disclosure requirements: (i) the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and (ii) the range and weighted average of significant observable inputs used to develop Level 3 fair value measurements. This update shall be applied retrospectively and is effective for all entities annual and interim periods beginning after December 15, 2019, with early adoption permitted. As the requirements of this literature are disclosure only, ASU 2018‑13 will not impact the Company’s financial condition or results of operations. In August 2018, the FASB issued ASU 2018‑15, Intangibles — Goodwill and Other — Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . ASU 2018‑15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018‑15 provides the option to apply prospectively to costs for activities performed on or after the date that the entity first adopts or retrospectively in accordance with guidance on accounting changes. This update is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. For the Company, ASU 2018‑15 is effective for annual periods beginning after December 15, 2020 and interim periods within annual periods beginning after December 15, 2021. The Company is currently evaluating the impact of this guidance on its financial condition and results of operations. |
Statements of Cash Flow
Statements of Cash Flow | 12 Months Ended |
Dec. 31, 2019 | |
Statements of Cash Flow | |
Statements of Cash Flow | 4. Statements of Cash Flow Supplemental cash flow information for the years ended December 31, 2019, 2018 and 2017, is as follows: December 31 ($ in thousands) 2019 2018 2017 Cash paid (received) during the period for: Interest $ 12,865 $ 12,377 $ 12,125 Federal income tax (780) 135 227 In 2019, there was a conversion of 59,169 RSUs into common shares accounted for as a non-cash transaction . |
Goodwill and Intangibles
Goodwill and Intangibles | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangibles | |
Goodwill and Intangibles | 5. Goodwill and Net Intangibles Assets On November 23, 2010, the Company acquired 100% of NYMAGIC, Inc.’s outstanding common stock for a cash price of $25.75 per share or approximately $231.9 million. The acquisition of NYMAGIC, Inc. provided a platform for which the Company could issue insurance policies. The fair value of net assets acquired amounted to $220.0 million after fair value adjustments of $9.5 million. The cash purchase price paid in excess of the fair value of net assets acquired was equal to goodwill of $11.9 million. Intangible assets acquired include the value of licenses, trade names, agency relationships, non-compete agreements, renewal rights, and valuation of business acquired. Intangible assets acquired included $17.1 million, which are not subject to amortization, and $13.6 million that amortizes over a period of 2 to 15 years. Of the $13.6 million intangible assets acquired, $0.2 million remain to be amortized at December 31, 2019. Goodwill and other intangible assets not subject to amortization are tested for impairment annually, in the fourth quarter. As of December 31, 2019, there was no impairment of goodwill or other intangible assets not subject to amortization. ($ in thousands) Goodwill Other Intangibles Total December 31, 2017 $ 11,911 $ 17,338 $ 29,249 Amortization — 30 30 December 31, 2018 $ 11,911 $ 17,308 $ 29,219 Amortization — 30 30 December 31, 2019 $ 11,911 $ 17,278 $ 29,189 The status of the goodwill and net intangible assets is presented in the following tables: Accumulated ($ in thousands) Gross Amortization Net Useful Life December 31, 2019 Goodwill $ 11,911 $ — $ 11,911 Indefinite State licenses 17,100 — 17,100 Indefinite Other 208 (30) 178 15 years Net balance $ 29,219 $ (30) $ 29,189 December 31, 2018 Goodwill $ 11,911 $ — $ 11,911 Indefinite State licenses 17,100 — 17,100 Indefinite Other 2,452 (2,244) 208 Varies up to 15 years Net balance $ 31,463 $ (2,244) $ 29,219 The estimated amortization of intangible assets for the next five years is as follows: ($ in thousands) 2020 $ 30 2021 30 2022 30 2023 30 2024 30 $ 150 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations | |
Discontinued Operations | 6. Discontinued Operations Prior to April 1, 2017, the Company also conducted business in the United Kingdom (“U.K.”) through certain subsidiaries of PSIH, which was incorporated in 2011 as a Bermuda holding company. PSIH acquired several entities in the U.K. in order to build Lloyd’s Syndicate 1110 (“Syndicate”). The Company changed its strategic direction with respect to its U.K. operations and placed the Syndicate into run-off. The Company then entered into a two-phase sale transaction to exit its U.K. operations, which closed in October 2017 and March 2018. There was no gain or loss recognized from the sale of the U.K. operations. In terms of the sale agreement, the Company will continue to meet Funds at Lloyd’s (“FAL”) obligations with respect to the Syndicate. In that regard, at December 31, 2019, the Company deposited cash and securities of $10.4 million and arranged for placement $23.2 million in Letters of Credit and securities. As part of the Company’s exit from the insurance market in U.K., all of the Syndicate’s reinsurance of the Company’s U.S. based insurance companies was commuted, and business sourced by PSIB to the Syndicate was reinsured back to the Company’s U.S. based insurance subsidiaries via 100% quota share reinsurance provided by New York Marine. In connection with the above sale, the Company provided Aggregate Stop Loss reinsurance protection for development of the Syndicate covered reserves for which the Company has a liability of $24.0 million and $13.3 million as of December 31, 2019 and 2018, respectively. Additionally and also effective April 1, 2017, the Company assumed fully future and in force obligations of the Syndicate with respect to business underwritten by the Company’s U.S. based operations on Syndicate paper. Prior to its exit from the U.K. insurance market, the Company assigned functional currencies to its foreign operations, which are generally the currencies of the local operating environment. Foreign currency amounts are remeasured to the functional currency, and the resulting foreign exchange gains or losses are reflected in earnings, except for foreign currency translation differences that arise in conjunction with the recognition of unrealized gains or losses on AFS investments which are recognized in OCI. Functional currency amounts are then translated into U.S. dollars. The foreign currency remeasurement and translation are calculated using current exchange rates for items reported in the balance sheets and average exchange rates for items recorded in earnings. The resulting foreign currency translation gain or loss during the year, is a component of OCI. A foreign transaction gain of $4.6 million was recorded for the year ended December 31, 2017. These amounts are included in the net loss from discontinued operations in the consolidated statements of operations for the year ended December 31, 2017. Loss from discontinued operations, net of taxes in its consolidated statements of operations are comprised of the following: Years Ended December 31 ($ in thousands) 2019 2018 2017 Revenues Net earned premiums $ 611 $ 1,173 $ 49,233 Net investment income 142 514 2,717 Realized investment gains, net 1,267 830 14,329 Other income — 338 — Total revenue 2,020 2,855 66,279 Expenses Net losses and loss adjustment expenses incurred 10,463 11,197 50,787 Policy acquisition expenses 218 401 9,544 General and administrative expenses 57 (8,401) 27,533 Interest expense — 218 1,648 Foreign exchange gains — — (4,570) Other expense — — 19,105 Total expenses 10,738 3,415 104,047 Loss from discontinued operations before income taxes (8,718) (560) (37,768) Income tax benefit (2,114) (1,374) (679) Net (loss) income from discontinued operations $ (6,604) $ 814 $ (37,089) The following represents the carrying amounts of assets and liabilities associated with the exit from the insurance market in the U.K. reported as discontinued operations in its consolidated balance sheets: December 31 ($ in thousands) 2019 2018 Assets Total cash and investments $ 10,428 $ 10,436 Other assets 11,156 9,283 Total assets $ 21,584 $ 19,719 Liabilities Unpaid losses and loss adjustment expenses $ 24,169 $ 14,030 Other liabilities 7,409 8,226 Total liabilities $ 31,578 $ 22,256 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2019 | |
Investments | |
Investments | 7. Investments Fixed income securities may include U.S. Treasury securities, government agency securities, municipal debt obligations, RMBS, CMBS, CLO, ABS and corporate debt securities. (a) A summary of the Company’s investment components is presented below: December 31 ($ in thousands) 2019 2018 Fixed income securities, AFS (fair value): U.S. Treasury securities $ 49,985 2.3 % $ 5.0 % Government agency securities 6,531 0.3 % - ‐ % Corporate debt securities 1,338,812 61.8 % 66.3 % Municipal debt obligations 79,815 3.7 % 0.3 % ABS 73,582 3.4 % 4.7 % CLO 179,549 8.3 % 8.7 % CMBS 97,526 4.5 % 3.0 % RMBS – non-agency 71,610 3.3 % 4.4 % RMBS – agency 143,272 6.6 % 1.7 % Total fixed income securities, AFS 2,040,682 94.2 % 94.1 % Short-term investments 43,873 2.0 % 2.0 % Commercial levered loans (amortized cost) 14,069 0.7 % 0.9 % Limited partnerships and limited liability companies (fair value) 66,660 3.1 % 3.0 % Total investments $ 100.0 % $ 100.0 % At December 31, 2019 and 2018, 91.1% and 85.0% of the fair value of the Company’s fixed income portfolios were considered investment grade, respectively. The Company held approximately $181.0 million and $259.3 million in fixed income securities that were below investment grade as of December 31, 2019 and 2018, respectively. (b) The gross unrealized gains and losses on AFS securities included in assets from continuing operations at December 31, 2019, are as follows: Cost/ Gross Gross Amortized Unrealized Unrealized Fair ($ in thousands) Cost Gains Losses Value Fixed income securities: U.S. Treasury securities $ 49,161 $ 838 $ (14) $ 49,985 Government agency securities 6,522 23 (14) 6,531 Corporate debt securities 1,308,094 33,743 (3,025) 1,338,812 Municipal debt obligations 80,338 243 (766) 79,815 ABS 73,068 854 (340) 73,582 CLO 181,704 125 (2,280) 179,549 CMBS 95,810 1,863 (147) 97,526 RMBS - non-agency 62,343 9,458 (191) 71,610 RMBS - agency 142,363 1,256 (347) 143,272 Total fixed income securities $ 1,999,403 $ 48,403 $ (7,124) $ 2,040,682 The gross unrealized gains and losses on AFS securities included in assets from continuing operations at December 31, 2018, are as follows: Cost/ Gross Gross Amortized Unrealized Unrealized Fair ($ in thousands) Cost Gains Losses Value Fixed income securities: U.S. Treasury securities $ 92,219 $ 126 $ (2,017) $ 90,328 Corporate debt securities 1,231,352 1,216 (40,138) 1,192,430 Municipal debt obligations 6,238 — (153) 6,085 ABS 82,603 1,095 (117) 83,581 CLO 161,421 160 (4,668) 156,913 CMBS 55,980 — (2,137) 53,843 RMBS - non-agency 68,594 11,078 (121) 79,551 RMBS - agency 31,348 — (697) 30,651 Total fixed income securities $ 1,729,755 $ 13,675 $ (50,048) $ 1,693,382 (c) The following table summarizes all securities in an unrealized loss position at December 31, 2019, the fair value and gross unrealized loss by asset class and by length of time those securities have been in a loss position: Less Than 12 Months Greater Than 12 Months Total Total Fair Unrealized Fair Unrealized Total Unrealized ($ in thousands) Value Losses Value Losses Fair Value Losses U.S. Treasury securities $ — $ — $ 7,469 $ (14) $ 7,469 $ (14) Government agency securities 3,192 (14) — — 3,192 (14) Corporate debt securities 133,341 (2,509) 50,695 (516) 184,036 (3,025) Municipal debt obligations 66,355 (766) — — 66,355 (766) ABS 27,884 (175) 11,165 (165) 39,049 (340) CLO 28,485 (338) 110,825 (1,942) 139,310 (2,280) CMBS 18,307 (102) 6,053 (45) 24,360 (147) RMBS - non-agency 2,173 (14) 2,418 (177) 4,591 (191) RMBS - agency 10,450 (12) 12,367 (335) 22,817 (347) Total $ 290,187 $ (3,930) $ 200,992 $ (3,194) $ 491,179 $ (7,124) The following table summarizes all securities in an unrealized loss position at December 31, 2018, the fair value and gross unrealized loss by asset class and by length of time those securities have been in a loss position: Less Than 12 Months Greater Than 12 Months Total Total Fair Unrealized Fair Unrealized Total Unrealized ($ in thousands) Value Losses Value Losses Fair Value Losses U.S. Treasury securities $ 8,263 $ (82) $ 69,727 $ (1,935) $ 77,990 $ (2,017) Corporate debt securities 393,931 (10,241) 710,482 (29,897) 1,104,413 (40,138) Municipal debt obligations — — 6,085 (153) 6,085 (153) ABS 25,258 (61) 4,249 (56) 29,507 (117) CLO 146,004 (4,668) — — 146,004 (4,668) CMBS — — 53,843 (2,137) 53,843 (2,137) RMBS - non-agency 529 (13) 2,449 (108) 2,978 (121) RMBS - agency 27,150 (513) 3,502 (184) 30,652 (697) Total $ 601,135 $ (15,578) $ 850,337 $ (34,470) $ 1,451,472 $ (50,048) The Company was holding 313 and 708 fixed income securities that were in an unrealized loss position at December 31, 2019 and 2018, respectively. The Company believes these unrealized losses are temporary, as they resulted from changes in market conditions, including interest rates or sector spreads, and are not considered to be credit risk related. OTTI charges are recognized as a realized loss to the extent that they are credit related, unless the Company has the intent to sell the security or it is more-likely-than not that the Company will be required to sell the security. In those circumstances, the security is written down to fair value with the entire amount of the write-down charged to earnings as a component of realized losses. The Company did not record any OTTI charges for the year ended December 31, 2019 and $1.5 million of OTTI charges for the year ended December 31, 2018, respectively, in the consolidated statements of operations. (d) The amortized cost and fair value of fixed income securities, which excludes the Company’s structured securities portfolio, at December 31, 2019, by contractual maturity are shown below. Expected maturities will differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. December 31, 2019 Amortized Fair ($ in thousands) Cost Value Due in one year or less $ 99,035 $ 99,326 Due after one through five years 679,649 692,219 Due after five through ten years 507,803 523,276 Due after ten years 157,628 160,322 1,444,115 1,475,143 Structured securities: ABS 73,068 73,582 CLO 181,704 179,549 CMBS 95,810 97,526 RMBS - non-agency 62,343 71,610 RMBS - agency 142,363 143,272 Totals $ 1,999,403 $ 2,040,682 The Company did not have any non-income producing fixed income investments for the years ended December 31, 2019 or 2018, respectively. (e) The Company elected to account for its investments in limited partnership and limited liability companies of $66.7 million and $53.4 million at December 31, 2019 and 2018, respectively, at fair value. Changes in fair value of such investments are recorded in the consolidated statements of operations within net investment income. The largest investment within the portfolio is the Pacific Investment Management Company LLC Tactical Opportunities fund, which is carried at $36.6 million at December 31, 2019. The carrying values used for investment in limited partnerships and limited liability companies generally are established on the basis of the valuations provided monthly or quarterly by the managers of such investments. These valuations are determined based upon the valuation criteria established by the governing documents of such investments or utilized in the normal course of such manager’s business, which are reflective of fair value. Such valuations may differ significantly from the values that would have been used had available markets for these investments existed and the differences could be material. The Company’s strategies for its investments in limited partnerships and limited liability companies include investments funds that employ diverse and fundamentally driven approach to investing which includes effective risk management, hedging strategies and leverage. The portfolio of investments in limited partnerships and limited liability companies consists of common stocks, real estate assets, options, swaps, derivative instruments and other structured products. The limited partnerships and limited liability companies in which the Company invests sometimes impose limitations on the timing of withdrawals from the funds. The Company’s inability to withdraw its investment quickly from a particular limited partnership or a limited liability company that is performing poorly could result in losses and may affect liquidity. All of the Company’s limited partnerships and limited liability companies have timing limitations. Most limited partnerships and limited liability companies require a 90‑day notice period in order to withdraw funds. Some limited partnerships and limited liability companies may require a withdrawal only at the end of their fiscal year. The Company may also be subject to withdrawal fees in the event the limited partnerships and limited liability companies is sold within a minimum holding period, which may be up to one year. Many limited partnerships and limited liability companies have invoked gated provisions that allow the fund to disperse redemption proceeds to investors over an extended period. The Company is subject to such restrictions, which may delay the receipt of proceeds from limited partnerships and limited liability companies. (f) The Company invests in commercial loans, which are private placements. Loans are reported at the principal amount outstanding, reduced by unearned discounts, net deferred loan fees, and an allowance for loan losses. Interest on loans is calculated using the simple interest method on the daily principal amount outstanding. The allowance for loan losses related to impaired loans is determined based on the difference of the carrying value of loans and the present value of expected cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the loan’s observable market price. There was no allowance for loan losses at December 31, 2019 and 2018, respectively. (g) Proceeds from sales and redemptions in AFS securities totaled $302.9 million, $255.2 million and $977.0 million for the years ended December 31, 2019, 2018 and 2017 respectively. Gross realized gains from sales and redemptions in AFS securities totaled $1.4 million, $0.6 million, and $5.8 million for the years ended December 31, 2019, 2018 and 2017, respectively. Gross realized losses from sales and redemptions of AFS investments totaled $0.7 million, $2.2 million and $1.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. (h) Net investment income included in net income (loss) from continuing operations in the consolidated statements of operations from each major category of investments for the years ended December 31, 2019, 2018 and 2017, is as follows: ($ in thousands) 2019 2018 2017 Fixed income securities $ 66,975 $ 55,765 $ 33,467 Commercial levered loans 765 1,114 1,153 Net limited partnerships gains 3,101 1,081 3,240 Other 358 176 216 Total investment income 71,199 58,136 38,076 Less: investment income attributable to funds withheld liabilities (655) (912) — Less: expenses (1,647) (1,253) (1,880) Net investment income $ 68,897 $ 55,971 $ 36,196 (i) Included in investments at December 31, 2019 and 2018, are securities required to be held by the Company (or those that are on deposit) with various regulatory authorities as required by law with a fair value of $210.8 million and $188.6 million, respectively. Fair value and carrying value of assets in the amount of $367.1 million and $352.0 million, respectively, were on deposit in collateral agreements at December 31, 2019. Fair value and carrying value of assets in the amount of $358.5 million and $368.0 million, respectively, were on deposit in collateral agreements at December 31, 2018. (j) The investment portfolio has exposure to market risks, which include the effect of adverse changes in interest rates, credit quality, limited partnership value and illiquid securities, including commercial loan values, on the portfolio. Interest rate risk includes the changes in the fair value of fixed maturities based upon changes in interest rates. Credit quality risk includes the risk of default by issuers of debt securities. Risks from investments in limited partnerships and limited liability companies and illiquid securities risks include the potential loss from the diminution in the value of the underlying investment of the limited partnerships and limited liability companies and the potential loss from changes in the fair value of commercial loans. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | 8. Fair Value Measurements The Company has established a framework for valuing financial assets and financial liabilities. The framework is based on a hierarchy of inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. The standard describes three levels of inputs that may be used to measure fair value and categorize the assets and liabilities within the hierarchy: Level 1 — Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. These prices generally provide the most reliable evidence and are used to measure fair value whenever available. Active markets are defined as having the following for the measured asset/liability: (i) many transactions, (ii) current prices, (iii) price quotes not varying substantially among market makers, (iv) narrow bid/ask spreads and (v) most information publicly available. As of December 31, 2019 and 2018, the Company does not hold any Level 1 securities. Level 2 — Fair value is based on significant inputs, other than Level 1 inputs, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets, nonbinding quotes in markets that are not active for identical or similar assets and other market observable inputs (e.g., interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.). The Company’s Level 2 assets include U.S. Treasury securities, government agency securities, municipal debt obligations, RMBS, CMBS, CLO, ABS and corporate debt securities. The Company generally obtains valuations from third-party pricing services and/or security dealers for identical or comparable assets or liabilities by obtaining nonbinding broker quotes (when pricing service information is not available) in order to determine an estimate of fair value. The Company bases all of its estimates of fair value for assets on the bid price as it represents what a third-party market participant would be willing to pay in an arm’s-length transaction. Level 3 — Fair value is based on at least one or more significant unobservable inputs that are supported by little or no market activity for the asset. These inputs reflect the Company’s understanding about the assumptions market participants would use in pricing the asset or liability. The Company’s Level 3 assets include its investments in corporate debt securities and commercial levered loans as they are illiquid and trade in inactive markets. These markets are considered inactive as a result of the low level of trades of such investments. Commercial levered loans are also not considered within the Level 3 tabular disclosure, because they are in the “held for investment” category and are also not measured at fair value on a recurring basis. The corporate debt securities classified under Level 3 in the fair value hierarchy are provided to the Company by an independent valuation service provider which use both observable and unobservable inputs in the calculation of fair value. Unobservable inputs, significant to the measurement and valuation of the corporate debt securities are assumptions about prepayment speed, default rates and reinvestment parameters. Significant changes to any of these inputs, or combination of inputs, could significantly change the fair value measurement for these securities when using the income approach. The primary pricing sources for the Company’s investments in commercial levered loans are reviewed for reasonableness, based on the Company’s understanding of the respective market. Prices may then be determined using valuation methodologies such as discounted cash flow models, as well as matrix pricing analyses performed on nonbinding quotes from brokers or other market makers. The following are the major categories of assets measured at fair value on a recurring basis at December 31, 2019 and 2018, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3): December 31, 2019 Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs ($ in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities: U.S. Treasury securities $ — $ 49,985 $ — $ 49,985 Government agency securities — 6,531 — 6,531 Corporate debt securities — 1,189,181 149,631 1,338,812 Municipal debt obligations — 79,815 — 79,815 ABS — 73,582 — 73,582 CLO — 179,549 — 179,549 CMBS — 97,526 — 97,526 RMBS - non agency — 71,610 — 71,610 RMBS - agency — 143,272 — 143,272 Total fixed income securities $ — $ 1,891,051 $ 149,631 2,040,682 Investments measured at net asset value: Limited partnerships and limited liability companies 66,660 Total assets at fair value $ 2,107,342 December 31, 2018 Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs ($ in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities: U.S. Treasury securities $ — $ 90,328 $ — $ 90,328 Corporate debt securities — 1,065,933 126,497 1,192,430 Municipal debt obligations — 6,085 — 6,085 ABS — 83,581 — 83,581 CLO — 156,913 — 156,913 CMBS — 53,843 — 53,843 RMBS - non agency — 79,551 — 79,551 RMBS - agency — 30,651 — 30,651 Total fixed income securities $ — $ 1,566,885 $ 126,497 1,693,382 Investments measured at net asset value: Limited partnerships and limited liability companies 53,432 Total assets at fair value $ 1,746,814 There were no transfers between Levels 1 and 2 for the years ended December 31, 2019 and 2018. In 2018, securities in the amount of $126.5 million were transferred from Level 2 into Level 3 as it was determined that these securities trade in inactive markets. Management believes that the use of the fair value option as specified in Accounting Standards Codification No. 825, Financial Instruments (ASC 825) to record limited partnerships is consistent with its objective for such investments. As such, the entire limited partnership portfolio of $66.7 million and $53.4 million at December 31, 2019 and 2018, was recorded using net asset value, which the Company has determined to be the best indicator of fair value for these investments. The following tables disclose the carrying value and fair value of financial instruments that are not recognized or are not carried at fair value in the consolidated balance sheets as of December 31, 2019 and 2018: December 31, 2019 Carrying Fair Value ($ in thousands) Value Total Level 1 Level 2 Level 3 Assets Commercial levered loans $ 14,069 $ 13,950 $ — $ — $ 13,950 Liabilities Notes payable 165,000 167,507 — 167,507 — Unamortized debt issuance costs (307) Total notes payable $ 164,693 December 31, 2018 Carrying Fair Value ($ in thousands) Value Total Level 1 Level 2 Level 3 Assets Commercial levered loans $ 16,915 $ 15,858 $ — $ — $ 15,858 Liabilities Notes payable 183,000 183,999 — 183,999 — Unamortized debt issuance costs (645) Total notes payable $ 182,355 The fair value of the notes payable at December 31, 2019, approximated a price equal to $167.5 million or 101.5% of the par value. The fair value of the notes payable at December 31, 2018, approximated a price equal to $184.0 million or 100.5% of the par value. The following table provides a summary of the changes in the fair value of securities measured using Level 3 inputs: Level 3 Corporate Debt ($ in thousands) Securities Fair value, December 31, 2017 $ — Total net (losses) gains for the period included in: OCI 764 Net realized loss (9) Purchases 9,492 Sales — Issuances — Settlements (2,754) Transfers into Level 3 119,004 Transfers out of Level 3 — Fair value, December 31, 2018 126,497 Total net (losses) gains for the period included in: OCI 3,011 Net realized loss (5) Purchases 23,905 Sales — Issuances — Settlements (3,777) Transfers into Level 3 — Transfers out of Level 3 — Fair value, December 31, 2019 $ 149,631 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | 9. Accumulated Other Comprehensive Income (Loss) The following table summarizes the components of AOCI: ($ in thousands) Gross Tax Net December 31, 2016 $ 30,630 $ 1,148 $ 29,482 Unrealized holding gains (losses) on fixed income securities 3,517 4,874 (1,357) Cumulative translation adjustment 6,881 — 6,881 Amounts reclassified into net loss 18,763 1,471 17,292 Other comprehensive (loss) income (8,365) 3,403 (11,768) Reclassification of stranded deferred taxes — (1,583) 1,583 December 31, 2017 22,265 2,968 19,297 Unrealized holding losses on fixed income securities (53,582) (10,842) (42,740) Amounts reclassified into net income (1,557) (429) (1,128) Other comprehensive loss (52,025) (10,413) (41,612) December 31, 2018 (29,760) (7,445) (22,315) Unrealized holding gains on fixed income securities 77,920 16,277 61,643 Amounts reclassified into net income 2,037 162 1,875 Other comprehensive income 75,883 16,115 59,768 December 31, 2019 $ 46,123 $ 8,670 $ 37,453 The following table presents reclassifications out of AOCI attributable to the Company during 2019, 2018 and 2017: Line in Consolidated ($ in thousands) Statements of Operations 2019 2018 2017 AOCI Unrealized gains on securities Realized investment gains (losses), net $ 2,037 $ (1,557) $ 18,763 Income tax expense (benefit) 162 (429) 1,471 Total reclassifications $ 1,875 $ (1,128) $ 17,292 |
Related-Party Information
Related-Party Information | 12 Months Ended |
Dec. 31, 2019 | |
Related-Party Information | |
Related-Party Information | 10. Related-Party Information Loans to Executives and Equity Distribution The Company made loans of $4.2 million to certain executive officers, including the CEO. Most of the loans were made in connection with the settlement of RSUs and related tax withholding . On March 15, 2019, all such loans were deemed repaid. On the same date, a special equity distribution of $4.2 million was made by the Company to the same executive officers, which was accounted for as a non-cash transaction on the Company’s consolidated balance sheets. Transition and Separation Agreement On May 3, 2019, the Company entered into a Transition and Separation Agreement (the “Separation Agreement”) with its former Chief Executive Officer (the “former CEO”). Under the Separation Agreement, the former CEO and the Company agreed to a general release of claims and his compliance with the restrictive covenants. The Company recorded an expense of $8.0 million within Other Expense in the consolidated statements of operations for the year ended December 31, 2019 relating to the severance payments and benefits payable to the former CEO. Per the terms of the Separation Agreement, the former CEO’s profit interests (“P Shares”) were forfeited and outstanding RSUs are treated in accordance with the terms of the applicable award agreements. Additionally, the Company cancelled 137,987 shares of common stock in July 2019 with no consideration as per the terms of the Separation Agreement. Investment Advisory Agreements with GSAM The Company’s investment portfolio is managed by Goldman Sachs Asset Management, a related party. The Company is an investee of PI, which is held as an investment within GS Capital Partners VI funds. Related fees paid were $1.3 million, $1.1 million and $1.7 million in 2019, 2018 and 2017 respectively. |
Insurance Operations
Insurance Operations | 12 Months Ended |
Dec. 31, 2019 | |
Insurance Operations | |
Insurance Operations | 11. Insurance Operations Reinsurance Transactions The Company’s reinsurance agreements do not relieve its direct obligations to insureds. Thus, a credit exposure exists to the extent that any reinsurer fails to meet its obligations to the Company. The reinsurers with the three largest uncollateralized obligations to the Company at December 31, 2019, were the Swiss Reinsurance America Corporation, Munich Reinsurance America Inc. and Harco National Insurance Company, which represented 31.3%, 14.2% and 9.0%, respectively, of the Company’s reinsurance recoverables, net of funds held and collateral. Swiss Reinsurance America Corporation and Munich Reinsurance America Inc. and are rated A+ (Superior) by A.M. Best Company. Harco National Insurance Company is rated A- (Excellent) by A.M. Best Company. Collateral for reinsurance receivables is generally only pursued by the Company when the reinsurer’s status with the regulators of the Company’s domicile would not otherwise permit credit for reinsurance for regulatory reporting purposes. Reinsurance receivables included an allowance for uncollectible reinsurance receivables of $10.9 million and $10.0 million, for the years ended December 31, 2019 and 2018, respectively. In connection with the divestment of the Company’s U.K. business, New York Marine as reinsured entered into whole account quota share agreements (“WAQS”) with third party reinsurers to maintain reasonable underwriting leverage within New York Marine and its subsidiary insurance companies during a transition period following the U.K. divestment. The effective date of the WAQS was April 1, 2017. The reinsurers’ ceding participation is an aggregate 26.0%. A provisional ceding commission of 30.0% to 30.5% is received as a reduction in the amount of ceded premium. Subject to limits, these ceding commissions will vary in subsequent periods based on contractual ultimate loss ratios. During 2018 and following the transition of the U.S. business back to New York Marine, the WAQS were terminated. To the extent of unearned premium at the time of termination, ceded written premiums, net of the ceding commission, was returned. Reserve for unpaid losses and loss adjustment expenses on premium earned prior to the cut-off termination remained in reinsurance receivables on unpaid losses on the consolidated balance sheets. The reinsurance receivables on unpaid losses under the WAQS were $33.1 million and $43.7 million as of December 31, 2019 and 2018, respectively. Loss reserve development on the reserves ceded under the WAQS is included in continuing operations. For the years ended December 31, 2019 and 2018 under the WAQS the Company recorded the following: ($ in thousands) 2019 2018 2017 (Return of ceded prepaid) ceded written premium $ (3) $ (58,857) $ 160,779 Ceded earned premium (3) 14,560 87,362 (Increase) reduction to net loss and loss adjustment expenses incurred (4,746) 9,514 51,897 Reduction to policy acquisition expenses 4,743 3,955 29,560 Reduction to pre-tax income $ — $ 1,091 $ 5,905 Total reinsurance ceded and assumed relating to premiums written, earned premiums and net losses and loss adjustment expenses incurred for the years ended December 31, 2019, 2018 and 2017 are as follows: ($ in thousands) 2019 2018 2017 Written premiums Direct written premiums $ 964,512 $ 889,526 $ 833,536 Assumed from other companies 3,499 5,586 2,798 Ceded to other companies 115,871 45,038 276,048 Net written premiums $ 852,140 $ 850,074 $ 560,286 Earned premiums Direct earned premiums $ 918,718 $ 844,234 $ 788,862 Assumed from other companies 3,887 10,266 2,477 Ceded to other companies 114,751 123,715 181,553 Net earned premiums $ 807,854 $ 730,785 $ 609,786 Percent of amount assumed to net Losses and loss adjustment expenses incurred Direct net losses and loss adjustment expenses incurred $ 556,051 $ 485,770 $ 483,209 Assumed from other companies 9,298 (3,209) 720 Ceded to other companies 64,324 47,731 90,188 Net losses and loss adjustment expenses incurred $ 501,025 $ 434,830 $ 393,741 In 2016, the Company entered a retroactive reinsurance agreement with an authorized reinsurer covering accident year 2015 and prior Primary and Excess Workers’ Compensation net losses and loss adjustment expenses incurred. Subject carried reserves at the January 1, 2016 effective date were $306.4 million. The reinsurance provides $100.0 million limit on respective paid losses excess of $315.0 million retention. The reinsurance cover has a retrospective rating feature of $47.6 million of additional premium accumulating at approximately 3% per annum. This amount is 100% recoverable to the Company to the extent losses do not exceed the retention. At December 31, 2019, the Company’s estimate of respective loss development remains below the retention. In 2017, the Company entered into a retroactive reinsurance agreement for the 2016 accident year. Subject carried reserves at the January 1, 2017 effective date were $96.5 million. The reinsurer provides a $35.0 million limit on respective paid losses in excess of $106.5 million. The reinsurance cover has a retrospective rating feature of $18.0 million of premium accumulating at approximately 4% per annum. These amounts are 100% recoverable to the Company to the extent losses do not exceed the retention. At December 31, 2019, the Company’s estimate of respective loss development remains below the retention and the adjustable premium is accrued as fully recoverable. In 2018, the Company entered into a retroactive reinsurance agreement for the 2017 accident year. Subject carried reserves at the January 1, 2018 effective date were $107.8 million. The reinsurer provides a $40.0 million limit on respective paid losses in excess of $119.3 million. The reinsurance cover has a retrospective rating feature of $21.0 million of premium accumulating at approximately 4% per annum. These are 100% recoverable to the Company to the extent losses do not exceed the retention. At December 31, 2019, the Company’s estimate of respective loss development remains below the retention and the adjustable premium is accrued as fully recoverable. Distribution Partners The Company negotiates with distribution partners to write direct premium on behalf of the Company’s affiliates. In January 2019, a distribution partner of the Company was acquired by a third-party insurance carrier. The Company has sourced 7.1% and 13.5% of direct premium from this distribution partner as of December 31, 2019 and 2018, respectively. The Company does not anticipate any future premiums from this distribution partner other than audit premiums after the first quarter of 2019. The three distribution partners contributing the largest amounts of direct written premium (excluding the distribution partner above) totaled $267.8 million, $240.7 million and $235.0 million for the years ended December 31, 2019, 2018 and 2017 respectively. Unpaid Losses Unpaid losses are based on individual case estimates for losses reported and include a provision for incurred but not reported and for losses and loss adjustment expenses. The following table provides a roll forward of the Company’s reserve for unpaid losses and loss adjustment expenses: ($ in thousands) 2019 2018 2017 Gross reserve for unpaid losses and loss expenses, at beginning of year $ 1,396,812 $ 1,258,237 $ 1,166,619 Ceded reserve for unpaid losses and loss expenses, at beginning of year 185,295 201,156 176,651 Net reserve for unpaid losses and loss expenses, at beginning of year 1,211,517 1,057,081 989,968 Add: Incurred losses and loss expenses occurring in the: Current year 482,989 439,847 373,423 Prior years 3,154 (5,017) 20,318 Prior years attributable to adjusted premium 14,882 — — Total net losses and loss adjustment expenses incurred 501,025 434,830 393,741 Less: Paid losses and loss expenses for claims occurring in the: Current year 66,522 47,734 54,026 Prior years 318,324 232,660 272,602 Total paid losses and loss expenses for claims 384,846 280,394 326,628 Net reserve for unpaid losses and loss expenses, at end of year 1,327,696 1,211,517 1,057,081 Ceded reserve for unpaid losses and loss expenses, at end of year 193,952 185,295 201,156 Gross reserve for unpaid losses and loss expenses, at end of year $ 1,521,648 $ 1,396,812 $ 1,258,237 During the year ended December 31, 2019 the Company’s reserve for unpaid losses and loss adjustment expenses for accident years 2018 and prior developed unfavorably by $3.2 million driven primarily by unfavorable development of $16.4 million in Commercial Multiple Peril, $11.3 million in General Liability, partially offset by favorable development of $22.8 million in Workers’ Compensation. The unfavorable development in Commercial Multiple Peril was primarily from the Media and Entertainment customer segment in accident years 2013 through 2016 from a longer development trend than that underlying the historical performance of premises liability. The unfavorable development in General Liability primarily related to 2013 through 2016 accident years due to increased severities in the Real Estate customer segment and run off components within the Other customer segment. The favorable development in Workers’ Compensation derived from lower than expected claims severity across all customer segments primarily in accident years 2013 through 2015 and accident year 2017. In addition, the Company incurred $14.9 million of loss and loss adjustment expenses related to premium earned during the year ended December 31, 2019, attributable to accident year 2018. During the year ended December 31, 2018, the Company’s reserve for unpaid losses and loss adjustment expenses for accident years 2017 and prior developed favorably by $5.0 million. Favorable development of $5.0 million for the year ended December 31, 2018, was driven primarily by favorable development of $14.4 million in Workers’ Compensation, $15.6 million in Commercial Auto and $4.1 million from Marine Liability within the All Other lines category, partially offset by $16.5 million adverse development in General Liability and $12.2 million adverse development in Commercial Multiple Peril. Lower than expected claim severity was the main driver of the favorable development in Workers’ Compensation of which $6.2 million came from 2014, 2015 and 2016 accident years in primary Workers’ Compensation and $8.2 million came from 2014 and 2015 accident years in excess Workers’ Compensation. Favorable development in Commercial Auto was driven mainly by the 2013, 2015 and 2016 accident years where severity trends of the previous two calendar year periods improved during 2018 across multiple niches. Marine Liability is a low frequency, high severity line of business and as a result, development often varies significantly from the average expectation. The $16.5 million adverse development in General Liability primarily related to 2013, 2014 and 2015 accident years due to increased severities in the Construction customer segment from reduced effectiveness of risk transfer from our general contractor insureds to subcontractors. The $12.2 million in adverse development in Commercial Multiple Peril is primarily from the Media and Entertainment customer segment driven by a longer development trend than that underlying the historic performance of premises liability. During the year ended December 31, 2017, the Company’s reserve for unpaid losses and loss adjustment expenses for accident years 2016 and prior developed adversely by $20.3 million. Adverse development of $20.3 million was driven primarily by $33.2 million in Commercial Auto which consisted of several niches that are now terminated. Adverse development in Commercial Auto was driven primarily by higher than expected frequency and severity. The Commercial Auto experience were likely a result of industry trends such as an improving economy resulting in more drivers on the roads, the hiring of less experienced drivers, the use of personal technology while in transit and litigation of bodily-injury claims, which resulted in unexpected adverse experience from historical performance patterns. The adverse development was offset by favorable development in Workers’ Compensation of $12.4 million due to lower than expected claim severity for accident years 2016 and prior, including a decline in the frequency of large loss activity. Incurred and Paid Claims Development The following information presented summarizes incurred and paid claims development as of December 31, 2019, net of reinsurance, as well as cumulative claim frequency and the total of IBNR. IBNR anticipates both the development of existing claims and emergence of any new claims. The information about incurred and paid claims development for accident years 2010 through 2018 is unaudited and is presented as supplementary information. Information is also included for the portion of the reserve for unpaid losses and loss adjustment expenses, net of reinsurance that related to IBNR and the cumulative number of reported insurance claims. Claims are counted at the occurrence (e.g. date of the accident), line of business which is in accordance with the Company’s statutory filings, and policy level. For example, if a single occurrence (e.g. an auto accident) leads to a claim under an auto and an associated umbrella policy, they are each counted separately. Conversely, multiple claimants under the same occurrence/line/policy would contribute only a single count. The claim counts provided are on an accident year basis. A claim is considered reported when a reserve is established or a payment is made. Therefore, claims closed without payment are included in the claim counts as long as there was an associated case reserve at some point in its life cycle. The following tables are in thousands except claim counts. All Lines - Incurred Unaudited IBNR as of Cumulative For the Years Ended December 31, Claim Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 Counts Prior $ 15,481 2010 $ 131,617 $ 137,994 $ 134,941 $ 134,307 $ 136,115 $ 143,344 $ 152,840 $ 145,444 $ 148,117 $ 150,543 3,108 3,926 2011 115,644 128,879 126,752 122,773 124,543 131,081 124,798 131,385 131,360 3,772 4,419 2012 137,380 157,477 157,985 165,015 165,889 156,355 159,120 158,523 6,491 6,622 2013 210,368 222,277 232,660 251,353 243,567 237,900 249,802 16,133 13,229 2014 286,842 312,987 323,792 333,865 342,788 356,733 30,978 16,333 2015 384,269 407,279 407,427 395,751 430,942 44,665 20,869 2016 390,430 423,538 406,204 416,266 93,163 20,049 2017 354,948 361,299 339,505 127,760 18,582 2018 422,104 406,199 233,890 18,720 2019 457,973 330,679 17,591 $ 3,097,846 $ 906,120 All Lines – Paid Unaudited For the Years Ended Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 11,912 $ 38,723 $ 72,312 $ 85,754 $ 102,016 $ 114,140 $ 125,646 $ 132,525 $ 137,470 $ 140,927 2011 14,796 51,006 65,103 76,731 88,243 98,411 105,584 109,007 111,247 2012 16,619 48,276 73,249 98,960 119,374 130,200 136,909 139,793 2013 27,465 74,012 115,396 158,978 181,989 192,476 214,863 2014 44,738 111,919 166,907 217,986 250,928 280,933 2015 75,043 159,708 234,756 281,637 331,748 2016 78,271 150,198 204,589 266,496 2017 54,026 116,204 163,937 2018 45,012 112,889 2019 66,522 1,829,355 Incurred less paid 1,268,491 Reserves 2009 and prior 44,965 Other (1) 14,240 Total net reserve for unpaid losses and loss adjustment expenses $ 1,327,696 (1) Other category represents unallocated loss adjustment expense (“ULAE”) reserves $45.6 million, discounting of loss reserves $(47.4) million and retroactive reinsurance agreements $12.3 million, allowance for uncollectible reinsurance $0.5 million and other $3.2 million. The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2019: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 14 % 19 % 15 % 13 % 10 % 7 % 7 % 3 % 3 % 2 % Commercial Auto The following tables represent information on the Company’s unpaid losses and loss adjustment expenses incurred and cumulative paid losses, since 2010 for Commercial Auto line, in thousands except claim counts: Commercial Auto-Incurred Unaudited IBNR as of Cumulative For the Years Ended December 31, Claim Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 Counts Prior 2010 $ 13,046 $ 17,710 $ 18,011 $ 17,334 $ 18,717 $ 18,688 $ 19,046 $ 19,437 $ 19,280 $ 19,282 $ — 874 2011 13,864 13,462 11,260 11,231 12,547 12,547 12,508 12,476 12,476 — 1,219 2012 21,101 29,959 36,319 43,031 42,028 41,479 41,572 39,231 444 1,746 2013 47,191 50,752 63,764 77,570 76,768 72,265 81,422 993 6,224 2014 74,185 95,283 105,528 112,157 113,747 113,790 843 8,231 2015 120,137 139,415 152,268 146,757 155,266 1,981 11,153 2016 114,568 124,760 119,931 124,166 6,229 9,642 2017 81,986 79,156 71,068 12,343 7,061 2018 87,993 78,777 28,210 7,146 2019 115,393 72,508 8,141 $ 810,871 $ 123,551 Commercial Auto – Paid Unaudited For the Years Ended Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 3,105 $ 7,866 $ 12,346 $ 13,723 $ 17,275 $ 17,829 $ 18,074 $ 19,098 $ 19,138 $ 19,162 2011 4,717 7,791 7,250 9,111 11,587 12,005 12,123 12,117 12,128 2012 6,660 15,397 25,280 33,248 39,680 40,852 41,305 38,657 2013 13,015 26,773 43,403 64,073 72,906 71,010 79,066 2014 21,692 52,048 74,431 96,385 108,102 110,883 2015 37,964 74,524 107,063 126,831 142,806 2016 39,580 63,123 83,161 102,003 2017 19,950 34,659 47,199 2018 16,709 32,698 2019 22,082 606,684 Incurred less paid $ 204,187 The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2019: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 23 % 22 % 19 % 17 % 12 % 1 % 6 % (2) % — % — % General Liability The following tables represent information on unpaid losses and loss adjustment expenses incurred and cumulative paid losses, since 2010 for the Company’s General Liability line, in thousands except claim counts: General Liability – Incurred Unaudited IBNR as of Cumulative For the Years Ended December 31, Claim Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 Counts Prior $ 7,384 2010 $ 56,373 $ 59,577 $ 64,210 $ 63,596 $ 62,270 $ 69,103 $ 72,902 $ 66,226 $ 68,905 $ 69,586 746 1,682 2011 45,894 58,633 61,398 60,375 63,264 67,791 62,127 66,641 64,682 1,254 1,532 2012 42,685 43,677 38,288 42,401 45,771 46,312 48,096 50,509 1,998 1,483 2013 48,466 61,785 62,618 70,459 60,613 61,796 69,565 7,755 2,608 2014 70,878 77,255 78,801 93,468 104,281 114,976 15,352 3,093 2015 80,225 80,411 78,163 80,514 93,808 21,362 3,007 2016 93,737 101,479 92,401 91,228 28,786 2,868 2017 99,845 100,306 94,554 50,712 2,921 2018 142,486 137,525 101,954 2,949 2019 153,650 139,174 2,309 $ 940,083 $ 376,477 General Liability – Paid Unaudited For the Years Ended Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 1,692 $ 14,901 $ 34,045 $ 44,087 $ 50,830 $ 61,716 $ 66,332 $ 70,235 $ 74,101 $ 76,201 2011 5,009 18,912 30,123 37,344 44,166 50,136 54,250 56,659 57,932 2012 945 8,844 14,751 24,257 32,585 36,521 40,754 45,509 2013 1,930 10,941 22,152 36,493 46,821 55,148 66,439 2014 5,456 14,032 28,581 41,079 53,712 73,491 2015 5,404 14,720 25,931 39,407 61,168 2016 3,547 13,873 25,223 47,333 2017 2,596 11,279 26,354 2018 2,223 15,625 2019 3,487 473,539 Incurred less paid $ 466,544 The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2019: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 3 % 12 % 15 % 16 % 14 % 13 % 10 % 6 % 4 % 3 % Workers’ Compensation The following tables represent information on unpaid losses and loss adjustment expenses incurred and cumulative paid losses, since 2010 for the Company’s Workers’ Compensation line, in thousands except claim counts: Workers’ Compensation – Incurred Unaudited IBNR as of Cumulative For the Years Ended December 31, Claim Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 Counts Prior $ 5,590 2010 $ 24,965 $ 23,206 $ 26,970 $ 23,643 $ 25,751 $ 25,825 $ 28,260 $ 28,135 $ 28,597 $ 30,457 2,361 78 2011 28,987 22,186 23,576 21,411 19,489 21,943 18,986 21,247 23,750 2,508 202 2012 46,503 51,724 53,038 48,983 47,373 38,501 38,835 38,919 4,017 1,770 2013 76,844 71,683 70,939 68,109 71,532 69,729 64,727 7,141 2,694 2014 88,181 81,628 83,543 74,134 69,886 67,784 12,581 2,679 2015 101,762 101,410 89,383 82,212 87,570 14,957 3,881 2016 99,292 109,623 103,382 102,716 47,500 4,358 2017 102,250 101,691 93,134 52,781 4,678 2018 116,278 118,973 77,694 5,125 2019 97,485 76,057 4,468 $ 725,515 $ 303,187 Workers’ Compensation – Paid Unaudited For the Years Ended Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ — $ 180 $ 1,633 $ 2,907 $ 4,427 $ 6,165 $ 7,830 $ 9,706 $ 10,695 $ 11,908 2011 473 4,148 5,127 5,503 7,239 8,662 8,978 9,971 10,841 2012 2,381 5,481 10,598 14,634 18,468 23,694 25,495 26,237 2013 2,639 12,579 20,520 26,088 29,036 32,962 35,793 2014 4,644 14,901 24,411 35,131 39,846 42,423 2015 6,504 18,434 27,423 33,543 38,061 2016 10,891 24,557 35,385 43,171 2017 8,631 22,462 30,776 2018 9,563 29,008 2019 9,745 277,963 Incurred less paid $ 447,552 The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2019: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 8 % 14 % 10 % 9 % 6 % 7 % 4 % 4 % 3 % 4 % Commercial Multiple Peril The following tables represent information on unpaid losses and loss adjustment expenses incurred and cumulative paid losses, since 2010 for the Company’s Commercial Multiple Peril line, in thousands except claim counts: Commercial Multiple Peril – Incurred Unaudited IBNR as of Cumulative For the Years Ended December 31, Claim Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 Counts Prior 2010 2011 $ — $ — $ 11 $ 7 $ 6 $ 6 $ 2 $ 2 $ — — 2012 96 94 73 49 39 813 813 $ 813 — 5 2013 968 1,065 1,051 1,442 8,226 8,250 8,198 19 54 2014 13,037 15,884 16,448 25,915 27,126 30,172 1,326 614 2015 27,876 27,542 17,952 18,345 24,144 4,825 1,015 2016 34,010 30,379 34,883 44,758 8,295 1,190 2017 37,760 44,044 44,260 8,921 1,431 2018 39,507 37,015 20,432 1,184 2019 36,895 25,835 935 $ 226,257 $ 69,653 Commercial Multiple Peril – Paid Unaudited For the Years Ended Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 2011 $ — $ — $ — $ — $ — $ — $ 2 $ 2 $ 2012 — — 1 1 2 813 813 813 2013 43 192 312 754 8,083 8,149 8,157 2014 1,795 4,271 7,358 20,545 22,880 26,366 2015 6,879 14,751 8,949 14,293 20,676 2016 4,974 7,028 16,715 27,870 2017 7,270 19,733 27,816 2018 5,323 11,953 2019 5,940 129,593 Incurred less paid $ 96,664 The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2019: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 14 % 17 % 10 % 28 % 25 % 11 % — % — % — % — % All Other The following tables represent information on unpaid losses and loss adjustment expenses incurred and cumulative paid losses, since 2010 for the Company’s all other lines in thousands except claim counts: All Other Lines – Incurred Unaudited IBNR as of Cumulative For the Years Ended December 31, Claim Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 Counts Prior $ 2,507 2010 $ 37,233 $ 37,501 $ 25,750 $ 29,735 $ 29,377 $ 29,727 $ 32,631 $ 31,647 $ 31,335 $ 31,218 1 1,292 2011 26,899 34,597 30,507 29,749 29,238 28,794 31,176 31,018 30,450 10 1,466 2012 26,995 32,022 30,266 30,551 30,678 29,250 29,803 29,051 32 1,618 2013 36,900 36,992 34,287 33,773 26,428 25,859 25,890 225 1,649 2014 40,562 42,938 39,473 28,192 27,749 30,011 876 1,716 2015 54,269 58,501 69,660 67,924 70,154 1,540 1,813 2016 48,824 57,296 55,607 53,398 2,353 1,991 2017 33,108 36,102 36,489 3,003 2,491 2018 35,839 33,909 5,600 2,316 2019 54,550 17,105 1,738 $ 395,120 $ 33,252 All Other Lines – Paid Unaudited For the Years Ended Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 7,115 $ 15,776 $ 24,288 $ 25,038 $ 29,484 $ 28,429 $ 33,410 $ 33,485 $ 33,536 $ 33,656 2011 4,597 20,155 22,603 24,773 25,251 27,608 30,231 30,259 30,344 2012 6,634 18,554 22,619 26,821 28,639 28,319 28,542 28,577 2013 9,838 23,526 29,009 31,569 25,144 25,206 25,408 2014 11,150 26,667 32,126 24,846 26,388 27,770 2015 18,292 37,279 65,390 67,563 69,037 2016 19,279 41,618 44,104 46,119 2017 15,580 28,070 31,792 2018 11,194 23,605 2019 25,268 341,576 Incurred less paid $ 53,544 The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2019: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 33 % 39 % 20 % 2 % 2 % 2 % 7 % — % — % — % The Company participated in an insurance pool in both the issuance of umbrella casualty insurance and ocean marine liability insurance during the period from 1978 to 1996. Depending on the underwriting year, the insurance pools’ net retention per occurrence after applicable reinsurance ranged from $250,000 to $2,000,000. The Company’s effective pool participation on such risks varied from 11% in 1978 to 59% in 1985, which exposed the Company to asbestos and environmental losses. Subsequent to this period, the pools substantially reduced their umbrella writings and coverage was provided to smaller insureds. The Company’s asbestos and environmental related losses were as follows: December 31, 2019 ($ in thousands) Gross Ceded Net Balance at beginning of year $ 14,262 $ 9,860 $ 4,402 Incurred losses and loss adjustment expense 430 66 364 Payments for losses and loss adjustment expenses 1,882 1,564 318 Balance at end of year $ 12,810 $ 8,362 $ 4,448 December 31, 2018 ($ in thousands) Gross Ceded Net Balance at beginning of year $ 15,628 $ 11,116 $ 4,512 Incurred losses and loss adjustment expense 30 24 6 Payments for losses and loss adjustment expenses 1,396 1,280 116 Balance at end of year $ 14,262 $ 9,860 $ 4,402 Additionally, the Company has assumed asbestos and environmental reserves on a retroactive basis from prior members of the pool. The liability related to the same was $8.4 million and $8.7 million as of December 31, 2019 and 2018 respectively. The Company believes that the uncertainty surrounding asbestos and environmental exposures, including issues as to insureds’ liabilities, ascertainment of loss date, definitions of occurrence, scope of coverage, policy limits and application and interpretation of policy terms, including exclusions, all affect the estimation of ultimate losses. Under such circumstances, it is difficult to determine the ultimate loss for asbestos and environmental-related claims. Given the uncertainty in this area, losses from asbestos and environmental-related claims may develop adversely and accordingly, management is unable to estimate the range of possible loss that could arise from asbestos and environmental-related claims. However, the Company’s net unpaid reserves for loss and loss adjustment expenses, in the aggregate, as of December 31, 2019, represent management’s best estimate. Salvage and Subrogation Estimates of salvage and subrogation recoverable on paid and unpaid losses have been recorded as a reduction of unpaid losses and amounted to $27.5 million and $27.4 million at December 31, 2019 and 2018, respectively. Deferred Policy Acquisition Costs The following table presents a roll forward of the deferred policy acquisition costs and are net of reinsurance: ($ in thousands) December 31, 2017 $ 60,759 Acquisition costs deferred 204,283 Acquisition costs expensed (171,429) December 31, 2018 93,613 Acquisition costs deferred 189,970 Acquisition costs expensed (184,771) December 31, 2019 $ 98,812 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Income Taxes | 12. Income Taxes The Company is subject to the tax laws and regulations of the United States and various state jurisdictions. The Company files a consolidated federal tax return. The Company has one non-U.S. subsidiary, PSBL, which has received an undertaking from the Minister of Finance in Bermuda that would exempt such company from Bermudian PSIH acquired several entities in the U.K. in order to build the Syndicate. The Company changed its strategic direction with respect to its U.K. operations and placed the Syndicate into run-off, and then entered into a two-phase sale transaction to exit its U.K. operations, which closed in October 2017 and March 2018. There was no gain or loss recognized from the sale of the U.K. operations. Additionally, there were no U.K. income taxes paid or recovered for the years ended December 31, 2018 and 2017. As discussed in Note. 1 Background, PSIH and PSEH were merged into the Company and PSBL became a direct subsidiary of the Company. The transactions were considered a tax-free contribution of capital from PGHL to the Company. Additionally, PGHL was merged into the Company and resulted in no tax effect in 2019, since the assets transferred were exchanged for common stock of the Company. The components of deferred tax assets and liabilities as of December 31, 2019 and 2018, are as follows: December 31 ($ in thousands) 2019 2018 Deferred tax assets: Loss reserves $ 13,289 $ 11,342 Loss reserves transitional adjustment 6,104 6,954 Unearned premiums 16,785 14,985 Net operating loss carry forwards – state and local 17,008 16,373 Net operating loss carry forwards – federal 357 16,771 Capital loss carry forwards – federal 1,519 2,577 Bad debt reserve 3,229 3,182 Impairments 517 556 Deferred compensation 5,659 5,613 Amortization of intangibles 695 813 Limited partnership income 2,566 — Unrealized depreciation of investments — 7,446 Other 3,151 2,211 Total deferred tax assets 70,879 88,823 Less: valuation allowance (17,604) (16,962) Deferred tax assets, net of allowance 53,275 71,861 Deferred tax liabilities: Deferred policy acquisition costs 20,693 19,634 Loss reserve transitional adjustment 4,578 6,085 Fair value adjustments 3,628 3,635 Unrealized appreciation of investments 8,669 — Limited partnership income — 422 Other 10,904 8,846 Total deferred tax liabilities 48,472 38,622 Net deferred income taxes $ 4,803 $ 33,239 On December 22, 2017, Tax Reform was signed into law, which among other implications, reduced the Company’s statutory corporate tax rate from 35% to 21% beginning with the 2018 tax year. The Company revalued its 2017 deferred tax assets and liabilities in response to this reduction, which resulted in a $25.1 million charge to income as illustrated in the rate reconciliation table below. The Company has recorded a $6.1 million increase to its deferred tax asset related to the change in methodology for loss reserves as a result of Tax Reform. An offsetting deferred tax liability was also recorded at December 31, 2017, which is amortized into income over 8 years. The deferred tax liability as of December 31, 2019 is $4.6 million. At December 31, 2019 and 2018, the U.S. federal net operating losses (“NOLs”) that can be carried forward are $0.4 million and $16.8 million, respectively. At December 31, 2019 and 2018, the state and local tax benefit of NOLs that can be carried forward are $17.0 million and $16.3 million, respectively, which is included in the state and local deferred tax asset. There were $1.5 million and $2.6 million of realized capital loss benefits that can be carried forward for the years ended December 31, 2019 and 2018, respectively. The range of years in which the federal NOL can be brought forward against future tax liabilities is from 2020 through 2030. The table below shows the tax benefit of the U.S. federal NOLs generated by year and expiration date: ($ in thousands) Amount Expires 2010 $ 357 2030 Total $ 357 The Company’s valuation allowance account with respect to the deferred tax asset and the change in the account is as follows: ($ in thousands) 2019 2018 Balance, beginning of year $ 16,962 $ 6,511 Change in valuation allowance 642 10,451 Balance, end of year $ 17,604 $ 16,962 As of December 31, 2019, the Company’s valuation allowance of $17.6 million is attributable to the uncertainty in the realization of certain deferred tax assets attributable to U.S. federal and state NOLs. The Company files tax returns subject to the tax regulations of federal, state and local tax authorities. A tax benefit taken in the tax return but not in the financial statements is known as an “unrecognized tax benefit.” A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: ($ in thousands) 2019 2018 Balance, beginning of year $ 528 $ 483 Additions for tax positions of prior years 260 45 Reductions for tax positions of prior years (350) — Balance, end of year $ 438 $ 528 As of December 31, 2019, the Company recorded insignificant amount of interest and penalties and reduced its positions by $0.1 million as a result of an audit settlement. Included in the balance at December 31, 2019, is $0.2 million related to favorable tax positions that impact the effective tax rate. The income tax provisions from the amounts computed by applying the federal statutory rate to the income before income taxes due to the following: ($ in thousands) 2019 2018 2017 Expected tax expense at statutory rates in taxable jurisdictions $ 12,103 $ 13,896 $ 11,384 Tax-exempt interest — (46) (42) State taxes (629) (10,746) 3,302 Valuation allowance 642 10,451 (2,819) Effect of provision to tax return filing adjustments 42 — 671 Effect of Tax Reform — — 25,108 Other (21) (166) 629 Total income tax expense $ 12,137 $ 13,389 $ 38,233 The jurisdictions contributing to taxation of the Company are calculated using the U.S. rate of 21%. The income tax benefit differs from the amounts computed due to changes in the valuation allowance, prior period adjustments and the effect of Tax Reform. There were $0.8 million of U.S. income taxes received for the year ended December 31, 2019, and $0.1 million and $0.2 million of U.S. income taxes paid for the years ended December 31, 2018 and 2017, respectively. The U.S. federal income tax recoverable included in other assets amounted to $0.2 million, $0.8 million and $0.2 million for the years ended December 31, 2019, 2018 and 2017, respectively. The Company files a consolidated federal income tax return with the Company, PSBL, and its insurance subsidiaries. Beginning November 23, 2010, pursuant to the terms of a tax-sharing agreement, which provides that the consolidated tax liability is allocated among affiliates based on separate return calculations and tax attributes utilized within the consolidated group and are reimbursed to the affiliate that generated them. Intercompany tax balances are settled annually. Although the Company is not currently under audit, the U.S. domestic entities are subject to federal and state examinations by tax authorities for tax year 2015 and subsequent and for the tax year 2009 and subsequent for examinations by local tax authorities. Section 382 of the Internal Revenue Code (“Section 382”) contains rules that limit the ability of a corporation that experiences an “ownership change” to utilize its net operating and capital loss carry forwards and certain built-in losses recognized in periods following the ownership change. An ownership change is generally any change in ownership of more than 50‑percentage points of a corporation’s stock over a three-year period. These rules generally operate by focusing on ownership changes among stockholders owning directly or indirectly 5% or more of the stock of a corporation or any change in ownership arising from a new issuance of stock by the corporation. If a Section 382 limitation were to manifest, a portion of the tax losses could be deferred or could expire before the Company would be able to use them to offset positive taxable income in current or future tax periods. The Company’s inability to utilize tax losses could have a negative impact on the Company’s financial position and results of operations. This limitation is generally determined by multiplying the value of the entity as of the ownership change date by the applicable long-term tax-exempt rate. On November 23, 2010, the Company acquired 100% of PSIG (formerly NYMAGIC, Inc.) outstanding common stock for a cash price of $25.75 per share or approximately $231.9 million; as a result, the Company experienced an ownership change for purposes of Section 382. As a result of this ownership change, the Company’s ability to utilize the NOL that existed as of November 23, 2010, is limited to approximately $9.0 million annually. A valuation allowance of $3.1 million has been recorded as a result of the NOL limitation. On July 25, 2019, the Company merged with PGHL and the holders of PGHL equity interests received 6.46 shares of the Company’s common stock. The total merger consideration was 38,851,369 shares of the Company’s common stock which was 100% of the Company’s outstanding common stock. The Company did not experience an ownership change under Section 382. On July 29, 2019, the Company completed its IPO. The principal stockholders retained 80.3% of the Company’s outstanding common stock which did not result in an ownership change of 50% or more under Section 382. On August 15, 2019 the Principal Stockholders completed the sale of 1,178,570 shares of the Company’s outstanding common stock and retained 77.5% of the outstanding common stock. The transaction did not result in an ownership change under Section 382. |
Statutory Financial Information
Statutory Financial Information | 12 Months Ended |
Dec. 31, 2019 | |
Statutory Financial Information | |
Statutory Financial Information | 13. Statutory Financial Information The Company’s insurance subsidiaries are limited under state insurance laws, in the amount of ordinary dividends they may pay without regulatory approval. As of December 31, 2019, the maximum dividend that can be paid from the Company’s U.S. insurance subsidiaries to the Company without prior approval from the New York State Department of Financial Services is $54.7 million. Factors affecting the ability to pay dividends include levels of investment income in recent years and the Company’s statutory surplus position of the Company. Combined statutory net income and surplus of the Company’s domestic insurance subsidiaries as reported in the Combined Annual Statement were as follows: ($ in thousands) 2019 2018 2017 Combined statutory net income $ 55,681 $ 33,147 $ 26,303 Combined statutory surplus $ 568,777 $ 473,575 $ 433,946 The U.S. insurance company subsidiaries file statutory financial statements with each state in the format specified by the National Association of Insurance Commissioners (“NAIC”). The NAIC provides accounting guidelines for companies to file statutory financial statements and provides minimum solvency standards for all companies in the form of risk–based capital requirements. The policyholders’ surplus of each of the domestic insurance companies is above the minimum amount required by the NAIC. The actual statutory capital and surplus of the Company’s insurance subsidiaries was significantly above the amount of statutory capital and surplus necessary to satisfy regulatory requirements. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt | |
Debt | 14. Debt In November 2013, the Company issued $140.0 million of 7.5% Senior Unsecured Notes due November 2020. The notes provide for semi-annual interest payments and are to be repaid in full in November 2020. The indenture contains certain covenants that restrict the Company’s ability to, among other items, incur indebtedness, make restricted payments, incur liens and require the Company to maintain specified liquidity levels. The Company remains in compliance with the covenants. Debt issuance costs of $2.1 million were incurred and are being amortized over the life of the loan. In January 2015, the Company issued an additional $25.0 million 6.5% senior notes due November 2020. The notes provide for semi-annual interest payments and are to be repaid in full in November 2020. The indenture contains certain covenants that restrict the Company’s ability to, among other items, incur indebtedness, make restricted payments, incur liens and require the Company to maintain specified liquidity levels. The Company remains in compliance with the covenants. Debt issuance costs of $0.2 million were incurred and are being amortized over the life of the loan. In January 2018, the Company entered into a $25.0 million 4.2% revolving loan agreement. On March 15, 2019, the Company entered into an amended and restated revolving loan agreement (as amended, the “revolving facility”), among other things, (a) extended the maturity date to the earlier of (i) March 15, 2022, or (ii) 91 days before the maturity of the senior notes due November 2020 or, if such senior notes are amended or replaced, 91 days before the maturity of such amendment or replacement and (b) increased the aggregate principal amount of borrowing capacity from $25.0 million to $50.0 million. On August 8, 2019, the Company used a portion of the proceeds from the IPO to repay $18.0 million in complete satisfaction of the outstanding debt under the revolving facility. As of December 31, 2019, the revolving facility had a borrowing capacity of $50.0 million. Interest expense was $12.8 million, $12.3 million and $12.1 million for the years ended December 31, 2019, 2018 and 2017, respectively. Amortization expense related to debt issuance cost was $0.3 million for the years ended December 31, 2019, 2018 and 2017. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 15. Commitments and Contingencies Leases The Company maintains various lease and sublease agreements for office space in New Jersey, New York, California, Florida, Georgia and the U.K. These lease terms expire on various dates through June 2025. At December 31, 2019, the minimum gross rental payments and sublease income relating to these various operating leases are as follows: Minimum Rental Sublease ($ in thousands) Payments Income 2020 $ 4,243 $ 631 2021 4,162 — 2022 1,080 — 2023 585 — 2024 585 — 2025 342 — Total $ 10,997 $ 631 The operating leases also include provisions for additional payments based on certain annual cost increases. Rent expense amounted to $3.3 million, $3.1 million and $3.1 million for the years ended December 31, 2019, 2018 and 2017, respectively. The lease of the U.K. office had rent expense of $0.5 million for the years ended December 31, 2019, 2018 and 2017, and sublease income of $0.6 million and $0.1 million for the years ended December 31, 2019 and 2018, respectively. There was no sublease income for the year ended December 31, 2017. These amounts are included in discontinued operations. Fiduciary Funds The Company’s insurance agency subsidiary maintains separate underwriting accounts, which record all of the underlying insurance transactions of the insurance pools that it manages. These transactions primarily include collecting premiums from the insureds, collecting paid receivables from reinsurers, paying claims as losses become payable, paying reinsurance premiums to reinsurers, and remitting net account balances to member insurance companies in the pools that PSMC manages. Unremitted amounts to members of the insurance pools are held in a fiduciary capacity and interest income earned on such funds inures to the benefit of the members of the insurance pools based on their pro rata participation in the pools. Additionally, the Company’s insurance agency subsidiary, in its contractual role as escrow agent, receives and disburses bond funds for entertainment film projects for its insureds. A summary of the fiduciary and pools’ underwriting accounts as of December 31, 2019 and 2018, is as follows: ($ in thousands) 2019 2018 Assets held on behalf of unaffiliated pool members $ 10,522 $ 11,501 Escrow bond arrangements 1,014 951 Total $ 11,536 $ 12,452 The remaining two unaffiliated pool members withdrew from the pools in 1994 and 1996, respectively, and retained liability for their effective pool participation for all loss reserves, including IBNR losses and unearned premium reserves attributable to policies effective prior to their withdrawal from the pools. The Company is committed to manage this pool until expiration without further compensation. In the event that all or any of the pool companies are unable to meet their obligations to the pools, the remaining companies would be liable for such defaulted amounts on a pro rata pool participation basis. The Company is not aware of any uncertainties that could result in any possible defaults by either of the two unaffiliated pool members with respect to their pool obligations, which might impact liquidity or results of operations of the Company, but there can be no assurance that such events will not occur in the future. Unfunded Investment Commitments For the year ended December 31, 2019 the Company had $163.7 million in unfunded commitments related to limited partnerships and a fixed income security. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-Based Compensation | |
Share-Based Compensation | 16. Share-Based Compensation Share-Based Plans 2019 Equity Incentive Plan In connection with, and prior to the completion of the IPO, the Company’s Amended and Restated 2010 Equity Incentive Plan (the “2010 Plan”) was terminated. Immediately prior to the merger, P Shares granted under the 2010 Plan prior to the IPO, were cancelled, and all outstanding RSUs granted under the 2010 Plan were converted into RSUs based on the shares of common stock of the Company under the Company’s 2019 Equity Incentive Plan (the “2019 Plan”) and otherwise continue to be governed by their existing terms prior to the IPO. On July 24, 2019, the 2019 Plan became effective immediately prior to the effectiveness of the registration statement filed in connection with the IPO. The 2019 Plan provides for the grant of stock options, stock appreciation rights, restricted shares, RSUs, dividend equivalent rights, performance-based shares or other equity‑based or equity-related awards. The 2019 Plan is administered by the compensation committee of the Company’s Board of Directors. Subject to the provisions of the 2019 Plan, the compensation committee determines in its discretion, the persons to whom and the times at which awards are granted, the size of awards (subject to certain limitations set forth in the compensation committee charter) and the terms and conditions of awards. A total of 4,500,000 shares of common stock are initially authorized and reserved for issuance under the 2019 Plan, including shares underlying RSUs granted under the 2010 Plan. The following is a summary of the post-offering compensation included in the 2019 Plan, including the number of common stock shares granted to each award mentioned below: (i) 181,118 annual long-term incentive awards in respect of 2019, 90,559 of which are time-vesting RSUs and 90,559 of which are performance-vesting RSUs, were granted to management on July 25, 2019 in connection with the IPO. Time-vesting RSUs are subject to vesting as follows: one-third annual installments on each anniversary of grant date, subject to continued service. Performance-vesting RSUs are subject to vesting as follows: cliff vesting on the third anniversary of the grant date to the extent performance metrics are met, subject to continued service. The fair value of such awards is $2.5 million at grant date. (ii) 1,267,912 supplemental RSU awards, 100% of which are time-vesting RSUs, was granted to management on July 25, 2019 in connection with the IPO and subject to vesting as follows: 25% vested at grant date, 25% will vest on the second anniversary of the grant date, subject to continued service and 50% will vest on the third anniversary of the grant date, subject to continued service. The fair value of the supplemental RSUs is $17.8 million. (iii) 250,000 founders grant awards in the form of time-vesting RSUs with a fair value of $3.5 million at grant date, July 25, 2019. These awards will cliff vest on the third anniversary of the grant date. (iv) 33,839 non-employee director RSU awards, 26,399 of which were granted on July 25, 2019 and 7,440 of which were granted on November 15, 2019, with a fair value of $0.5 million at grant date. These awards are fully vested on grant date. (v) 668,170 RSUs initially granted under the 2010 Plan that were converted into RSUs based on shares of the Company’s common stock upon the consummation of the merger. Stock-based compensation expense was $8.6 million, $0.9 million and $1.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. The tax benefit recognized for the same was $1.8 million, $0.2 million and $0.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. Vested RSUs awaiting conversion into common stock were 906,182 for the year ended December 31, 2019, 548,292 for the year ended December 31, 2018 and 517,446 for the year ended December 31, 2017. The Company began recognizing stock-based compensation expense relating to its 2019 Plan upon its inception and initial stock grants in July 2019. All stock-based compensation expense recognized during the year ended December 31, 2019 relates to the 2019 Plan except $0.1 million of expense relating to the 2010 Plan. The following table summarizes RSU transactions for the 2019 Plan for the years ended December 31, 2019 and 2018: Weighted Number of Average Grant Date Shares Fair Value Per Share Unvested at December 31, 2017 180,647 $ 11.25 Granted in 2018 13,992 18.67 Vested in 2018 (136,855) 11.30 Forfeited in 2018 (2,520) 11.09 Unvested at December 31, 2018 55,264 11.09 Granted in 2019 1,732,869 14.00 Vested in 2019 (406,081) 13.61 Forfeited in 2019 (92,656) 14.00 Unvested at December 31, 2019 1,289,396 $ 14.00 As of December 31, 2019, The Company had approximately $14.5 million of total unrecognized stock-based compensation expense related to the RSUs expected to be recognized over a weighted-average period of 2.4 years. 2019 Employee Stock Purchase Plan On July 24, 2019, the 2019 Employee Stock Purchase Plan (the “2019 ESPP”) became effective immediately prior to the effectiveness of the registration statement filed in connection with the IPO. A total of 1,000,000 shares of the Company’s common stock are reserved and available for sale under the 2019 ESPP. The compensation committee of the Board of Directors administers the 2019 ESPP and have full authority to interpret the terms of the 2019 ESPP. There was no expense recognized related to the 2019 ESPP for the year ended December 31, 2019. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Plans | |
Retirement Plans | 17. Retirement Plans For the benefit of its U.S.-based employees who meet certain service and age requirements, the Company offers a voluntary defined contribution 401(k) plan, a tax-qualified retirement plan subject to the Employee Retirement Income Security Act of 1974. The Company has elected to make matching contributions to eligible participants in an amount up to 100% of the first 4% of eligible compensation and 50% of the next 2% of eligible compensation contributed to the plan as deferral contributions. Expense recorded for this plan was $1.8 million, $2.1 million and $1.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Information | |
Segment Information | 18. Segment Information The Company has one reportable segment, Specialty Insurance segment, which primarily offers property and casualty insurance products through its customers segments that include Construction, Consumer Services, Marine and Energy, Media and Entertainment, Professional Services, Real Estate, Sports, and Transportation. The primary criteria to determine the Company’s reportable segment is based on the fact that the Company’s senior management reviews, assesses and allocates resources both on a financial and personnel basis on an entity-wide level. The following table provides a summary of the Company’s gross written premiums by customer segments within our Specialty Insurance segment. “Other” includes gross written premiums from; (i) primary and excess workers’ compensation coverage for exited Self-Insured Groups, (ii) niches exited prior to 2018, many with a concentration in commercial auto , (iii) certain fronting arrangements in which all premium written is ceded to a third party (iv) participation in industry pools, and (v) emerging new business . Years Ended December 31 ($ in thousands) 2019 2018 2017 Customer segment Construction $ 117,918 12.2 % $ 101,946 11.4 % $ 73,378 8.8 % Consumer Services 133,682 13.8 107,086 12.0 94,384 11.3 Marine and Energy 94,071 9.7 82,978 9.3 79,238 9.5 Media and Entertainment 124,950 12.9 119,926 13.4 114,442 13.7 Professional Services 119,326 12.4 110,546 12.3 112,575 13.4 Real Estate 167,635 17.3 132,652 14.8 132,029 15.8 Sports 30,079 3.1 23,590 2.6 22,224 2.6 Transportation 112,191 11.6 92,169 10.3 85,079 10.2 Customer segment subtotal 899,852 93.0 770,893 86.1 713,349 85.3 Other 68,159 7.0 124,219 13.9 122,985 14.7 Specialty Insurance total $ 968,011 100.0 % $ 895,112 100.0 % $ 836,334 100.0 % The following table provides a summary of the Company’s gross written premiums by line of business within our Specialty Insurance segment. Years Ended December 31 ($ in thousands) 2019 2018 2017 Line of business Commercial Auto $ 205,303 21.2 % $ 151,612 16.9 % $ 124,688 14.9 % General Liability 335,197 34.6 277,948 31.1 272,660 32.6 Workers’ Compensation 179,432 18.6 246,302 27.5 235,668 28.2 Commercial Multiple Peril 82,126 8.5 67,351 7.5 73,859 8.8 All Other Lines 165,953 17.1 151,899 17.0 129,459 15.5 Specialty Insurance total $ 968,011 100.0 % $ 895,112 100.0 % $ 836,334 100.0 % |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share | |
Earnings Per Share | 19. Earnings per Share The following table provides a reconciliation of the numerators and denominators of basic and diluted EPS: ($ in thousands, except per share amounts) Continuing Operations Discontinued Operations Income Shares Per Share Loss Shares Per Share 2019 (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS: Net income (loss) available to common stockholders $ 45,494 41,095 $ 1.11 $ (6,604) 41,095 $ (0.16) Effect of dilutive securities: Stock compensation plans 428 428 Diluted EPS $ 45,494 41,523 $ 1.10 $ (6,604) 41,523 $ (0.16) Continuing Operations Discontinued Operations Income Shares Per Share Income Shares Per Share 2018 (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS: Net income available to common stockholders $ 53,729 38,753 $ 1.39 $ 814 38,753 $ 0.02 Effect of dilutive securities: Stock compensation plans 688 688 Diluted EPS $ 53,729 39,441 $ 1.36 $ 814 39,441 $ 0.02 Continuing Operations Discontinued Operations Loss Shares Per Share Loss Shares Per Share 2017 (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS: Net loss available to common stockholders $ (6,904) 37,555 $ (0.18) $ (37,089) 37,555 $ (0.99) Diluted EPS $ (6,904) 37,555 $ (0.18) $ (37,089) 37,555 $ (0.99) |
Quarterly Financial Information
Quarterly Financial Information | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information | |
Quarterly Financial Information | 20. Quarterly Financial Information (unaudited, $ in thousands, except per share data) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Year 2019 Gross written premiums $ 255,838 $ 235,032 $ 227,196 $ 249,945 $ 968,011 Revenues 212,972 220,112 219,870 225,105 878,059 Net income from continuing operations 13,695 8,696 8,361 14,742 45,494 Net income 13,440 8,618 8,312 8,520 38,890 Basic earnings per share - continuing operations 0.35 0.22 0.20 0.34 1.11 Diluted earnings per share - continuing operations 0.35 0.22 0.19 0.33 1.10 Basic earnings per share 0.35 0.22 0.19 0.19 0.95 Diluted earnings per share 0.34 0.22 0.19 0.19 0.94 2018 Gross written premiums $ 249,420 $ 222,555 $ 201,296 $ 221,841 $ 895,112 Revenues 181,046 199,525 201,726 203,575 785,872 Net income from continuing operations 10,010 14,652 15,603 13,464 53,729 Net income 10,795 14,454 15,174 14,120 54,543 Basic earnings per share - continuing operations 0.26 0.38 0.40 0.35 1.39 Diluted earnings per share - continuing operations 0.25 0.37 0.40 0.34 1.36 Basic earnings per share 0.28 0.37 0.39 0.36 1.41 Diluted earnings per share 0.27 0.36 0.38 0.36 1.38 |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 31, 2019 | |
Legal Proceedings | |
Legal Proceedings | 21. Legal Proceedings In the normal course of business, the Company’s insurance subsidiaries are subject to disputes, including litigation and arbitration, arising out of the ordinary course of business. The Company’s estimates of the costs of settling such matters are reflected in its reserves for losses and loss expenses, and the Company does not believe that the ultimate outcome of such matters will have a material adverse effect on its financial condition or results of operations. |
Schedule II
Schedule II | 12 Months Ended |
Dec. 31, 2019 | |
Schedule II | |
Condensed Financial Information of Registrant | ProSight Global, Inc. Condensed Financial Information of Registrant Balance Sheets December 31 ($ in thousands, except per share amounts) 2019 2018 Assets Investment in subsidiaries $ 702,977 $ 572,435 Cash and cash equivalents 773 522 Total cash and investments 703,750 572,957 Receivables from affiliates 6,580 12,462 Other assets 747 4,591 Total assets $ 711,077 $ 590,010 Liabilities Payables to affiliates $ 1,263 $ 9,540 Notes payable 164,693 182,355 Loan payable to affiliates — 3,173 Other liabilities 2,090 5,112 Total liabilities 168,046 200,180 Stockholders’ equity Preferred stock, $0.01 par value; 50,000,000 shares authorized; no shares issued or outstanding — — Common stock, $0.01 par value; 200,000,000 shares authorized; 43,071,186 and 38,864,289 shares issued, 43,058,266 and 38,851,369 shares outstanding in 2019 and 2018, respectively 431 389 Paid-in capital 661,761 607,260 Accumulated other comprehensive income (loss) 37,453 (22,315) Retained deficit (156,414) (195,304) Treasury shares – at cost (12,920 shares) (200) (200) Total stockholders’ equity 543,031 389,830 Total liabilities and stockholders’ equity $ 711,077 $ 590,010 ProSight Global, Inc. Condensed Financial Information of Registrant Statements of Operations Years Ended December 31 ($ in thousands) 2019 2018 2017 Revenues: Other income $ 33 $ 165 $ 630 Total revenues 33 165 630 Expenses: General and administrative expenses 714 5,325 13,461 Write-off of amounts related to sale of affiliate — 650 10,622 Intercompany interest expense (income) 18 (27) (29) Interest expense 12,795 12,377 12,125 Other expense 8,164 — — Total expenses 21,691 18,325 36,179 Loss before federal income taxes (21,658) (18,160) (35,549) Federal income tax benefit 4,669 3,284 8,341 Net loss from continuing operations before equity in undistributed net income (losses) of subsidiaries (16,989) (14,876) (27,208) Equity in undistributed net income (losses) of subsidiaries, net of tax 55,879 69,419 (16,785) Net income (loss) $ 38,890 $ 54,543 $ (43,993) ProSight Global, Inc. Condensed Financial Information of Registrant Statements of Cash Flows Years Ended December 31 ($ in thousands) 2019 2018 2017 Operating Activities: Net income (loss) $ 38,890 $ 54,543 $ (43,993) Adjustments to reconcile net income (loss) to net cash used in operating activities: Amortization of debt issuance costs 338 338 338 Equity in undistributed net (income) losses of subsidiaries, net of tax (55,879) (69,419) 16,785 Changes in: Decrease (increase) in receivables from affiliates 5,882 (9,957) 12,924 (Decrease) increase in payables to affiliates (8,277) 4,872 (2,121) Increase (decrease) in other assets 3,844 (1,673) (1,091) (Decrease) Increase in loans to affiliates (3,173) — — Increase in other liabilities (3,022) (6,426) (3,237) Total adjustments (60,287) (82,265) 23,598 Net cash used in operating activities (21,397) (27,722) (20,395) Investing activities: Net cash provided by (used in) investing activities — — — Financing activities Proceeds from shares issued 50,878 — 32 Proceeds from capital contributions — — 49,968 Proceeds from notes payable — 18,000 — Repayment of notes payable (18,000) — — Tax withholding on stock compensation awards (740) — — Capital contributions to affiliates (10,490) 9,747 (36,840) Net cash provided by financing activities 21,648 27,747 13,160 Net increase (decrease) in cash and cash equivalents 251 25 (7,235) Cash and cash equivalents at beginning of year 522 497 7,732 Cash and cash equivalents at end of year $ 773 $ 522 $ 497 |
Schedule V
Schedule V | 12 Months Ended |
Dec. 31, 2019 | |
Allowance for Uncollectible Premiums and Reinsurance Recoverables | |
Schedule of allowance for uncollectible premiums and reinsurance recoverables | ProSight Global, Inc. Allowance for Uncollectible Premiums and Reinsurance Recoverables Allowance on Allowance on Premiums Reinsurance ($ in thousands) Receivables Receivables December 31, 2016 4,699 7,046 Additions — — Deductions (502) — December 31, 2017 $ 4,197 $ 7,046 Additions 800 4,510 Deductions (174) (1,564) December 31, 2018 $ 4,823 $ 9,992 Additions 2,108 4,581 Deductions (1,875) (3,702) December 31, 2019 $ 5,056 $ 10,871 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Summary Of Significant Accounting Policies | |
Basis of Reporting | Basis of Reporting and Use of Estimates The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported financial statement balances, as well as disclosure of contingent assets and liabilities. Actual results could differ from those estimates. |
Consolidation | Consolidation Unless otherwise noted, the consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of intercompany balances and transactions, and relate to continuing operations. Discontinued operations are reported separately. |
Investments | Investments Investment transactions are recorded on their trade date with balances pending settlement included in the consolidated balance sheets as a receivable for investments disposed of or payable for investments securities acquired and reported within other assets or other liabilities respectively. Realized investment gains and losses are determined on the basis of first-in, first-out. |
Fixed Income Securities | Fixed Income Securities Fixed income securities may include U.S. treasury securities, government agency securities, municipal debt obligations, residential mortgage backed securities (“RMBS”), commercial mortgage backed securities (“CMBS”), collateralized loan obligations (“CLO”), asset backed securities (“ABS”) and corporate debt securities. Fixed income securities categorized as available-for-sale (“AFS”) are reported at estimated fair value and include those fixed income investments where the Company’s intent to carry such investments to maturity may be affected in future periods by changes in market interest rates, tax position or credit quality. Unrealized gains and losses, net of related deferred income taxes, on AFS securities are reflected in accumulated other comprehensive income (loss) (“AOCI”) in stockholders’ equity. The cost of fixed income securities is adjusted for the amortization of any purchase premiums and the accretion of purchase discounts from the time of purchase of the security to its sale or maturity. This amortization of premium and accretion of discount is recorded in net investment income in the consolidated statements of operations. Any realized gains or losses resulting from the sale of securities are recognized in realized investment gains (losses), net in the consolidated statements of operations. |
Commercial Levered Loans | Commercial Levered Loans The Company’s investment portfolio includes commercial levered loans, which are classified as held-for-investment and are reported at amortized cost. |
Investments in Limited Partnerships and Limited Liability Companies | Investments in Limited Partnerships and Limited Liability Companies The Company has elected to carry investments in limited partnerships and limited liability companies at fair value. Interest income, dividend income and movements in fair value respective to cost basis are recorded as investment income. The fair values are obtained from statements of net asset value made available by the respective limited partnerships and limited liability companies. |
Short-Term Investments | Short-Term Investments Short-term investments, which have maturities of one year or less at acquisition, are carried at amortized cost, which approximates fair value. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on deposit with banks and treasury bills with maturities of less than 90 days at acquisition. The Company considers all highly liquid debt instruments with maturities of three months or less at acquisition to be cash equivalents. Restricted cash consists of escrow funds, trust funds and collateral related to funds withheld. |
Other-Than-Temporary Impairments | Other-Than-Temporary Impairments Management reviews fixed income securities for other-than-temporary impairments (“OTTI”) based upon quantitative and qualitative criteria that include, but are not limited to, downgrades in rating agency levels for securities, the duration and extent of declines in fair value of the security below its cost or amortized cost, interest rate trends, the Company’s intent to sell or hold the security, market conditions, and the regulatory environment for the security’s issuer. The Company may also consider cash flow models and matrix analyses in connection with its OTTI evaluation. The Company will record credit impairment in the consolidated statements of operations when the present value of cash flows expected to be collected from the debt security is less than the amortized cost basis of the security. In addition, any portion of such decline to arise from factors other than credit is recorded as a component of other comprehensive income (“OCI”). |
Fair Values of Financial Instruments | Fair Values of Financial Instruments For fixed income securities, quoted prices in active markets are used to determine the fair value. When such information is not available, as in the case of securities that are not publicly traded, other valuation techniques are employed. These valuation techniques may include, but are not limited to, using third-party pricing sources (dealer marks), identifying comparable securities with quoted market prices and using internally prepared valuations based on certain modeling and pricing methods. For limited partnerships and limited liability companies, the Company utilizes statements of net asset value made available by the respective limited partnerships and limited liability companies. For notes payable, the Company takes into consideration, the interest-rate environment for benchmark interest rates, credit spreads for similar securities, as well as the Company’s rating and financial performance to calculate the fair value. |
Premium Recognition | Premium Recognition Premiums are reflected in income on a monthly pro rata basis over the terms of the respective policies. Accordingly, unearned premium reserves are established for the portion of premiums written applicable to unexpired policies in force. The Company has provided an allowance for uncollectible premiums receivable of $5.1 million and $4.8 million as of December 31, 2019 and 2018, respectively. |
Policy Acquisition Cost Recognition | Policy Acquisition Cost Recognition Policy acquisition costs related to unearned premiums that vary with, and are directly related to, the production of such premiums are deferred. Furthermore, such deferred costs: (i) represent only incremental, direct costs associated with the successful acquisition of a new or renewal insurance contract; (ii) are essential to the contract transaction; (iii) would not have been incurred had the contract transaction not occurred; and (iv) are related directly to the acquisition activities involving underwriting, policy issuance and processing. Policy acquisition costs, such as brokerage commissions and premium taxes, and other expenses related to the underwriting process, including their employees’ compensation and benefits, are amortized to expense as the related premiums are earned. Accounting guidance requires a premium deficiency analysis to be performed at the level an entity acquires, services, and measures the profitability of its insurance contracts. Currently, the Company determines the sufficiency of unearned premium net of deferred policy acquisition costs against expected levels of losses and loss adjustment expenses by line of business. The determination anticipates investment income. To the extent carried unearned premium net of deferred policy acquisition cost is viewed as deficient, the respective deferred policy acquisition cost is first reduced and, if needed, a separate deficiency reserve is established. |
Reinsurance | Reinsurance The Company’s insurance subsidiaries participate in various reinsurance agreements on both an assumed and ceded basis. The Company uses various types of reinsurance, including quota share, excess of loss and facultative agreements, to spread the risk of loss among several reinsurers and to limit its exposure from losses on any one occurrence. Any recoverable due from reinsurers is recorded in the period in which the related gross liability is established. Reinsurance reinstatement premiums are incurred by the Company based upon the provisions of the reinsurance contracts. In the event of a loss, the Company may be obligated to pay additional reinstatement premiums under its excess of loss reinsurance treaties. In such instances, the respective reinstatement premium is expensed immediately. The Company accounts for reinsurance receivables and prepaid reinsurance premiums as assets. The Company maintains an allowance for doubtful accounts, which includes amounts in dispute, amounts due from insolvent or financially impaired companies and other balances deemed uncollectible. Management continually reviews and updates such estimates. Profit commission revenue derived from reinsurance transactions is recognized when such amounts become earned as provided in the treaties with the respective reinsurers. |
Depreciation | Depreciation Property, equipment, and leasehold improvements are depreciated over their estimated useful lives, which are approximately three to seven years. Costs incurred in developing or obtaining software are capitalized and depreciated on a straight-line basis over their estimated useful lives, which are approximately three to seven years. Capitalized software as of December 31, 2019 and 2018, had unamortized balances of $33.8 million and $35.0 million, respectively. Depreciation on capitalized software commences once the software is placed into service. The Company recorded depreciation expense of $7.0 million, $5.8 million and $5.4 million for the years ended 2019, 2018 and 2017, respectively. Other depreciable assets, primarily leasehold improvements, as of December 31, 2019 and 2018, had unamortized balances of $3.3 million and $3.8 million, respectively. The Company recorded depreciation expense of $1.2 million and $1.5 million and $1.7 million, for the years ended 2019, 2018 and 2017, respectively. |
Income Taxes | Income Taxes The Company’s U.S. subsidiaries file a consolidated federal income tax return in the U.S. The Company provides deferred income taxes on temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities based upon enacted tax rates. The effect of a change in tax rates is recognized in income in the period of change. The Company provides for a valuation allowance on certain deferred tax assets primarily as a result of the uncertainty that the Company can fully utilize all deferred taxes that arose from net operating losses (NOL) incurred. This uncertainty stems from issues relating to the current economic conditions and limitations on the period that such losses can be carried forward prior to expiring. To the extent the Company generates future operating income to offset these losses, it may recover some or the entire amount of the deferred income taxes associated with temporary differences. On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Reform”) was enacted which reduced the corporate tax rate from 35% to 21% effective January 1, 2018. This resulted in a re-measurement of the Company’s net deferred taxes to reflect the new rate at which the deferred items will be realized. The re-measurement of the net deferred tax asset as another income tax expense resulted in tax effects of items within AOCI, which did not reflect the current enacted tax rate. As a result, the Company elected to early adopt Accounting Standards Update 2018-02 (“ASU 2018-02”), Income Statement — Reporting Comprehensive Income at December 31, 2017, by making a one-time adjustment of $1.6 million to reclassify the stranded tax effects from accumulated other comprehensive income to retained earnings, that was associated with net unrealized gains on our investment portfolio resulting from the enactment of Tax Reform. |
Losses and Loss Adjustment Expenses | Losses and Loss Adjustment Expenses Losses and loss adjustment expenses are a function of the amount and type of insurance contracts the Company writes, the loss experience associated with the underlying coverage, and the expenses incurred in the handling of the losses. In general, the Company’s losses and loss adjustment expenses are affected by the frequency of claims associated with the particular types of insurance contracts, trends in the average size of losses incurred on a particular type of business, mix of business, changes in the legal or regulatory environment related to the business, trends in legal defense costs, wage inflation, and inflation in medical costs. The reserve for loss and loss adjustment expenses includes a provision for both reported claims (case reserves) and incurred but not reported claims (“IBNR”). IBNR estimates are generally calculated by first projecting the ultimate cost of all losses that have occurred (expected losses), and then subtracting paid losses, case reserves, and loss expenses. The reserve for loss and loss adjustment expenses represents management’s best estimate of unpaid losses and loss adjustment expenses using individual case-basis valuations and statistical analysis that is not discounted, with the exception of certain workers’ compensation claims. Workers’ compensation reserves for policy years between 2007 and 2019 were discounted at discount rates between 2.85% and 5.00%, for the years ended December 31, 2019 and 2018, respectively. Carried discounted reserves on these workers’ compensation claims, net of reinsurance, were $116.9 million and $96.3 million at December 31, 2019 and 2018, respectively. The amount of discount related to workers’ compensation reserves were $47.4 million and $37.0 million at December 31, 2019 and 2018, respectively. The Company’s loss reserve review processes use actuarial methods that may vary by line of business. The actuarial methods used include the following methods: · Reported Loss Development Method: a reported loss development pattern is calculated based on historical loss development data, and this pattern is then used to project the latest evaluation of cumulative reported losses for each accident year or underwriting year, as appropriate, to ultimate levels; · Paid Development Method: a paid loss development pattern is calculated based on historical paid loss development data, and this pattern is then used to project the latest evaluation of cumulative paid losses for each accident year or underwriting year, as appropriate, to ultimate levels; · Expected Loss Ratio Method: expected loss ratios are applied to premiums earned, based on actuarial pricing expectation, or historical insurance industry results when company experience is deemed not to be sufficient; and · Bornhuetter-Ferguson Method: the results from the Expected Loss Ratio Method are essentially blended with either the Reported Loss Development Method or the Paid Development Method. Although considerable variability is inherent in the estimates of reserves for losses and loss adjustment expenses, management believes the reserve is adequate. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known. Such adjustments are included in current operations. |
Share-Based Compensation | Share-Based Compensation Entities are required to measure compensation cost for awards of equity instruments to employees based on the grant-date fair value of those awards and recognize compensation expense over the service period that the awards are expected to vest. The Company records compensation costs on a straight-line basis over the vesting period of all awards except when an award requires accelerated recognition. The Company does not apply a forfeiture rate to unvested awards and accounts for forfeitures as they occur. Stock-based compensation expense related to long-term incentive awards and director restricted stock units (“RSUs”) are included in general and administrative expenses in the Company’s consolidated statements of operations. Stock-based compensation expense related to supplemental RSUs and founders grant awards are included in other expenses in the Company’s consolidated statements of operations. |
Goodwill and Net Intangible Assets | Goodwill and Net Intangible Assets Goodwill represents the excess of the cost of acquiring a business enterprise over the fair value of the net assets acquired. Goodwill is deemed to have an indefinite life and is not amortized, but rather tested annually, in the fourth quarter, for impairment. A quantitative goodwill impairment analysis is performed if an annual qualitative analysis indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Finite-lived intangible assets are amortized over their estimated useful lives. Indefinite-lived other intangible assets are tested for impairment annually, in the fourth quarter, or when certain triggering events require such tests. |
Earnings Per Share | Earnings Per Share Basic earnings per share of common stock is based on the weighted-average number of shares of outstanding common stock, par value $0.01 per share, of the Company (“Common Stock”) during the period, and vested RSUs. Vested RSUs awaiting conversion into common stock were 906,182 for the year ended December 31, 2019, 548,292 for the year ended December 31, 2018 and 517,446 for the year ended December 31, 2017. Diluted earnings per share of Common Stock are based on those shares used to calculate basic earnings per share of Common Stock plus the dilutive effect of unvested stock-based compensation awards. Basic and diluted earnings per share are calculated by dividing net income by the applicable weighted-average number of shares outstanding during the period. The Company did not declare any stock dividends for the years ended December 31, 2019, 2018 and 2017. |
Reclassifications | Reclassifications All share and per share amounts in the financial statements, related notes and schedules have been restated for all historical periods prior to and including June 30, 2019, presented to give effect to the merger and related conversion of shares, including reclassifying an amount equal to the change in value of common stock to additional paid-in capital, as well as the effectiveness of the Certificate of Incorporation. From time to time we reallocate existing niches to new or different customer segments in order to align them more efficiently, for reasons that may include the evolution of business or customers in that niche, the establishment or discontinuance of related niches, changes in responsibilities of our management team handling the segments, among others. All historical customer segment information is presented in accordance with the current composition of our customer segments and such reallocation of premium amounts, and as a result some customer segment information may differ from amounts previously reported i n Note 18. Segments. |
Statements of Cash Flow (Tables
Statements of Cash Flow (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Statements of Cash Flow | |
Summary of supplemental cash flow information | December 31 ($ in thousands) 2019 2018 2017 Cash paid (received) during the period for: Interest $ 12,865 $ 12,377 $ 12,125 Federal income tax (780) 135 227 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangibles | |
Schedule of goodwill and other intangible assets | Goodwill and other intangible assets not subject to amortization are tested for impairment annually, in the fourth quarter. As of December 31, 2019, there was no impairment of goodwill or other intangible assets not subject to amortization. ($ in thousands) Goodwill Other Intangibles Total December 31, 2017 $ 11,911 $ 17,338 $ 29,249 Amortization — 30 30 December 31, 2018 $ 11,911 $ 17,308 $ 29,219 Amortization — 30 30 December 31, 2019 $ 11,911 $ 17,278 $ 29,189 The status of the goodwill and net intangible assets is presented in the following tables: Accumulated ($ in thousands) Gross Amortization Net Useful Life December 31, 2019 Goodwill $ 11,911 $ — $ 11,911 Indefinite State licenses 17,100 — 17,100 Indefinite Other 208 (30) 178 15 years Net balance $ 29,219 $ (30) $ 29,189 December 31, 2018 Goodwill $ 11,911 $ — $ 11,911 Indefinite State licenses 17,100 — 17,100 Indefinite Other 2,452 (2,244) 208 Varies up to 15 years Net balance $ 31,463 $ (2,244) $ 29,219 |
Schedule of estimated amortization of intangible assets | ($ in thousands) 2020 $ 30 2021 30 2022 30 2023 30 2024 30 $ 150 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations | |
Summary of results of operations and carrying amounts of assets and liabilities for discontinued operations | Years Ended December 31 ($ in thousands) 2019 2018 2017 Revenues Net earned premiums $ 611 $ 1,173 $ 49,233 Net investment income 142 514 2,717 Realized investment gains, net 1,267 830 14,329 Other income — 338 — Total revenue 2,020 2,855 66,279 Expenses Net losses and loss adjustment expenses incurred 10,463 11,197 50,787 Policy acquisition expenses 218 401 9,544 General and administrative expenses 57 (8,401) 27,533 Interest expense — 218 1,648 Foreign exchange gains — — (4,570) Other expense — — 19,105 Total expenses 10,738 3,415 104,047 Loss from discontinued operations before income taxes (8,718) (560) (37,768) Income tax benefit (2,114) (1,374) (679) Net (loss) income from discontinued operations $ (6,604) $ 814 $ (37,089) December 31 ($ in thousands) 2019 2018 Assets Total cash and investments $ 10,428 $ 10,436 Other assets 11,156 9,283 Total assets $ 21,584 $ 19,719 Liabilities Unpaid losses and loss adjustment expenses $ 24,169 $ 14,030 Other liabilities 7,409 8,226 Total liabilities $ 31,578 $ 22,256 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments | |
Summary of the Company’s investment components | December 31 ($ in thousands) 2019 2018 Fixed income securities, AFS (fair value): U.S. Treasury securities $ 49,985 2.3 % $ 5.0 % Government agency securities 6,531 0.3 % - ‐ % Corporate debt securities 1,338,812 61.8 % 66.3 % Municipal debt obligations 79,815 3.7 % 0.3 % ABS 73,582 3.4 % 4.7 % CLO 179,549 8.3 % 8.7 % CMBS 97,526 4.5 % 3.0 % RMBS – non-agency 71,610 3.3 % 4.4 % RMBS – agency 143,272 6.6 % 1.7 % Total fixed income securities, AFS 2,040,682 94.2 % 94.1 % Short-term investments 43,873 2.0 % 2.0 % Commercial levered loans (amortized cost) 14,069 0.7 % 0.9 % Limited partnerships and limited liability companies (fair value) 66,660 3.1 % 3.0 % Total investments $ 100.0 % $ 100.0 % |
Summary of gross unrealized gains and losses on AFS securities included in assets | The gross unrealized gains and losses on AFS securities included in assets from continuing operations at December 31, 2019, are as follows: Cost/ Gross Gross Amortized Unrealized Unrealized Fair ($ in thousands) Cost Gains Losses Value Fixed income securities: U.S. Treasury securities $ 49,161 $ 838 $ (14) $ 49,985 Government agency securities 6,522 23 (14) 6,531 Corporate debt securities 1,308,094 33,743 (3,025) 1,338,812 Municipal debt obligations 80,338 243 (766) 79,815 ABS 73,068 854 (340) 73,582 CLO 181,704 125 (2,280) 179,549 CMBS 95,810 1,863 (147) 97,526 RMBS - non-agency 62,343 9,458 (191) 71,610 RMBS - agency 142,363 1,256 (347) 143,272 Total fixed income securities $ 1,999,403 $ 48,403 $ (7,124) $ 2,040,682 The gross unrealized gains and losses on AFS securities included in assets from continuing operations at December 31, 2018, are as follows: Cost/ Gross Gross Amortized Unrealized Unrealized Fair ($ in thousands) Cost Gains Losses Value Fixed income securities: U.S. Treasury securities $ 92,219 $ 126 $ (2,017) $ 90,328 Corporate debt securities 1,231,352 1,216 (40,138) 1,192,430 Municipal debt obligations 6,238 — (153) 6,085 ABS 82,603 1,095 (117) 83,581 CLO 161,421 160 (4,668) 156,913 CMBS 55,980 — (2,137) 53,843 RMBS - non-agency 68,594 11,078 (121) 79,551 RMBS - agency 31,348 — (697) 30,651 Total fixed income securities $ 1,729,755 $ 13,675 $ (50,048) $ 1,693,382 |
Summary of all securities in an unrealized loss position, the fair value and gross unrealized loss by asset class and by length of time those securities have been in a loss position | The following table summarizes all securities in an unrealized loss position at December 31, 2019, the fair value and gross unrealized loss by asset class and by length of time those securities have been in a loss position: Less Than 12 Months Greater Than 12 Months Total Total Fair Unrealized Fair Unrealized Total Unrealized ($ in thousands) Value Losses Value Losses Fair Value Losses U.S. Treasury securities $ — $ — $ 7,469 $ (14) $ 7,469 $ (14) Government agency securities 3,192 (14) — — 3,192 (14) Corporate debt securities 133,341 (2,509) 50,695 (516) 184,036 (3,025) Municipal debt obligations 66,355 (766) — — 66,355 (766) ABS 27,884 (175) 11,165 (165) 39,049 (340) CLO 28,485 (338) 110,825 (1,942) 139,310 (2,280) CMBS 18,307 (102) 6,053 (45) 24,360 (147) RMBS - non-agency 2,173 (14) 2,418 (177) 4,591 (191) RMBS - agency 10,450 (12) 12,367 (335) 22,817 (347) Total $ 290,187 $ (3,930) $ 200,992 $ (3,194) $ 491,179 $ (7,124) The following table summarizes all securities in an unrealized loss position at December 31, 2018, the fair value and gross unrealized loss by asset class and by length of time those securities have been in a loss position: Less Than 12 Months Greater Than 12 Months Total Total Fair Unrealized Fair Unrealized Total Unrealized ($ in thousands) Value Losses Value Losses Fair Value Losses U.S. Treasury securities $ 8,263 $ (82) $ 69,727 $ (1,935) $ 77,990 $ (2,017) Corporate debt securities 393,931 (10,241) 710,482 (29,897) 1,104,413 (40,138) Municipal debt obligations — — 6,085 (153) 6,085 (153) ABS 25,258 (61) 4,249 (56) 29,507 (117) CLO 146,004 (4,668) — — 146,004 (4,668) CMBS — — 53,843 (2,137) 53,843 (2,137) RMBS - non-agency 529 (13) 2,449 (108) 2,978 (121) RMBS - agency 27,150 (513) 3,502 (184) 30,652 (697) Total $ 601,135 $ (15,578) $ 850,337 $ (34,470) $ 1,451,472 $ (50,048) |
Summary of amortized cost and fair value of fixed income securities | December 31, 2019 Amortized Fair ($ in thousands) Cost Value Due in one year or less $ 99,035 $ 99,326 Due after one through five years 679,649 692,219 Due after five through ten years 507,803 523,276 Due after ten years 157,628 160,322 1,444,115 1,475,143 Structured securities: ABS 73,068 73,582 CLO 181,704 179,549 CMBS 95,810 97,526 RMBS - non-agency 62,343 71,610 RMBS - agency 142,363 143,272 Totals $ 1,999,403 $ 2,040,682 |
Summary of net investment income included in net income from continuing operations | ($ in thousands) 2019 2018 2017 Fixed income securities $ 66,975 $ 55,765 $ 33,467 Commercial levered loans 765 1,114 1,153 Net limited partnerships gains 3,101 1,081 3,240 Other 358 176 216 Total investment income 71,199 58,136 38,076 Less: investment income attributable to funds withheld liabilities (655) (912) — Less: expenses (1,647) (1,253) (1,880) Net investment income $ 68,897 $ 55,971 $ 36,196 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurements | |
Summary of major categories of assets measured at fair value on a recurring basis | December 31, 2019 Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs ($ in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities: U.S. Treasury securities $ — $ 49,985 $ — $ 49,985 Government agency securities — 6,531 — 6,531 Corporate debt securities — 1,189,181 149,631 1,338,812 Municipal debt obligations — 79,815 — 79,815 ABS — 73,582 — 73,582 CLO — 179,549 — 179,549 CMBS — 97,526 — 97,526 RMBS - non agency — 71,610 — 71,610 RMBS - agency — 143,272 — 143,272 Total fixed income securities $ — $ 1,891,051 $ 149,631 2,040,682 Investments measured at net asset value: Limited partnerships and limited liability companies 66,660 Total assets at fair value $ 2,107,342 December 31, 2018 Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs ($ in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities: U.S. Treasury securities $ — $ 90,328 $ — $ 90,328 Corporate debt securities — 1,065,933 126,497 1,192,430 Municipal debt obligations — 6,085 — 6,085 ABS — 83,581 — 83,581 CLO — 156,913 — 156,913 CMBS — 53,843 — 53,843 RMBS - non agency — 79,551 — 79,551 RMBS - agency — 30,651 — 30,651 Total fixed income securities $ — $ 1,566,885 $ 126,497 1,693,382 Investments measured at net asset value: Limited partnerships and limited liability companies 53,432 Total assets at fair value $ 1,746,814 |
Summary of carrying value and fair value of financial instruments that are not recognized or are not carried at fair value | December 31, 2019 Carrying Fair Value ($ in thousands) Value Total Level 1 Level 2 Level 3 Assets Commercial levered loans $ 14,069 $ 13,950 $ — $ — $ 13,950 Liabilities Notes payable 165,000 167,507 — 167,507 — Unamortized debt issuance costs (307) Total notes payable $ 164,693 December 31, 2018 Carrying Fair Value ($ in thousands) Value Total Level 1 Level 2 Level 3 Assets Commercial levered loans $ 16,915 $ 15,858 $ — $ — $ 15,858 Liabilities Notes payable 183,000 183,999 — 183,999 — Unamortized debt issuance costs (645) Total notes payable $ 182,355 |
Summary of the changes in the fair value of securities measured using Level 3 inputs | Level 3 Corporate Debt ($ in thousands) Securities Fair value, December 31, 2017 $ — Total net (losses) gains for the period included in: OCI 764 Net realized loss (9) Purchases 9,492 Sales — Issuances — Settlements (2,754) Transfers into Level 3 119,004 Transfers out of Level 3 — Fair value, December 31, 2018 126,497 Total net (losses) gains for the period included in: OCI 3,011 Net realized loss (5) Purchases 23,905 Sales — Issuances — Settlements (3,777) Transfers into Level 3 — Transfers out of Level 3 — Fair value, December 31, 2019 $ 149,631 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) | |
Summary of the components of accumulated other comprehensive income (loss) | ($ in thousands) Gross Tax Net December 31, 2016 $ 30,630 $ 1,148 $ 29,482 Unrealized holding gains (losses) on fixed income securities 3,517 4,874 (1,357) Cumulative translation adjustment 6,881 — 6,881 Amounts reclassified into net loss 18,763 1,471 17,292 Other comprehensive (loss) income (8,365) 3,403 (11,768) Reclassification of stranded deferred taxes — (1,583) 1,583 December 31, 2017 22,265 2,968 19,297 Unrealized holding losses on fixed income securities (53,582) (10,842) (42,740) Amounts reclassified into net income (1,557) (429) (1,128) Other comprehensive loss (52,025) (10,413) (41,612) December 31, 2018 (29,760) (7,445) (22,315) Unrealized holding gains on fixed income securities 77,920 16,277 61,643 Amounts reclassified into net income 2,037 162 1,875 Other comprehensive income 75,883 16,115 59,768 December 31, 2019 $ 46,123 $ 8,670 $ 37,453 |
Summary of reclassifications out of accumulated other comprehensive income (loss) | Line in Consolidated ($ in thousands) Statements of Operations 2019 2018 2017 AOCI Unrealized gains on securities Realized investment gains (losses), net $ 2,037 $ (1,557) $ 18,763 Income tax expense (benefit) 162 (429) 1,471 Total reclassifications $ 1,875 $ (1,128) $ 17,292 |
Insurance Operations (Tables)
Insurance Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of effects of the termination of Quota Share Arrangements on pre-tax income | ($ in thousands) 2019 2018 2017 (Return of ceded prepaid) ceded written premium $ (3) $ (58,857) $ 160,779 Ceded earned premium (3) 14,560 87,362 (Increase) reduction to net loss and loss adjustment expenses incurred (4,746) 9,514 51,897 Reduction to policy acquisition expenses 4,743 3,955 29,560 Reduction to pre-tax income $ — $ 1,091 $ 5,905 |
Summary of reinsurance ceded and assumed relating to premiums written, earned premiums and net losses and loss adjustment expenses | ($ in thousands) 2019 2018 2017 Written premiums Direct written premiums $ 964,512 $ 889,526 $ 833,536 Assumed from other companies 3,499 5,586 2,798 Ceded to other companies 115,871 45,038 276,048 Net written premiums $ 852,140 $ 850,074 $ 560,286 Earned premiums Direct earned premiums $ 918,718 $ 844,234 $ 788,862 Assumed from other companies 3,887 10,266 2,477 Ceded to other companies 114,751 123,715 181,553 Net earned premiums $ 807,854 $ 730,785 $ 609,786 Percent of amount assumed to net Losses and loss adjustment expenses incurred Direct net losses and loss adjustment expenses incurred $ 556,051 $ 485,770 $ 483,209 Assumed from other companies 9,298 (3,209) 720 Ceded to other companies 64,324 47,731 90,188 Net losses and loss adjustment expenses incurred $ 501,025 $ 434,830 $ 393,741 |
Summary of unpaid losses | ($ in thousands) 2019 2018 2017 Gross reserve for unpaid losses and loss expenses, at beginning of year $ 1,396,812 $ 1,258,237 $ 1,166,619 Ceded reserve for unpaid losses and loss expenses, at beginning of year 185,295 201,156 176,651 Net reserve for unpaid losses and loss expenses, at beginning of year 1,211,517 1,057,081 989,968 Add: Incurred losses and loss expenses occurring in the: Current year 482,989 439,847 373,423 Prior years 3,154 (5,017) 20,318 Prior years attributable to adjusted premium 14,882 — — Total net losses and loss adjustment expenses incurred 501,025 434,830 393,741 Less: Paid losses and loss expenses for claims occurring in the: Current year 66,522 47,734 54,026 Prior years 318,324 232,660 272,602 Total paid losses and loss expenses for claims 384,846 280,394 326,628 Net reserve for unpaid losses and loss expenses, at end of year 1,327,696 1,211,517 1,057,081 Ceded reserve for unpaid losses and loss expenses, at end of year 193,952 185,295 201,156 Gross reserve for unpaid losses and loss expenses, at end of year $ 1,521,648 $ 1,396,812 $ 1,258,237 |
Schedule of unpaid losses and loss adjustment expenses incurred and cumulative paid losses | All Lines - Incurred Unaudited IBNR as of Cumulative For the Years Ended December 31, Claim Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 Counts Prior $ 15,481 2010 $ 131,617 $ 137,994 $ 134,941 $ 134,307 $ 136,115 $ 143,344 $ 152,840 $ 145,444 $ 148,117 $ 150,543 3,108 3,926 2011 115,644 128,879 126,752 122,773 124,543 131,081 124,798 131,385 131,360 3,772 4,419 2012 137,380 157,477 157,985 165,015 165,889 156,355 159,120 158,523 6,491 6,622 2013 210,368 222,277 232,660 251,353 243,567 237,900 249,802 16,133 13,229 2014 286,842 312,987 323,792 333,865 342,788 356,733 30,978 16,333 2015 384,269 407,279 407,427 395,751 430,942 44,665 20,869 2016 390,430 423,538 406,204 416,266 93,163 20,049 2017 354,948 361,299 339,505 127,760 18,582 2018 422,104 406,199 233,890 18,720 2019 457,973 330,679 17,591 $ 3,097,846 $ 906,120 All Lines – Paid Unaudited For the Years Ended Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 11,912 $ 38,723 $ 72,312 $ 85,754 $ 102,016 $ 114,140 $ 125,646 $ 132,525 $ 137,470 $ 140,927 2011 14,796 51,006 65,103 76,731 88,243 98,411 105,584 109,007 111,247 2012 16,619 48,276 73,249 98,960 119,374 130,200 136,909 139,793 2013 27,465 74,012 115,396 158,978 181,989 192,476 214,863 2014 44,738 111,919 166,907 217,986 250,928 280,933 2015 75,043 159,708 234,756 281,637 331,748 2016 78,271 150,198 204,589 266,496 2017 54,026 116,204 163,937 2018 45,012 112,889 2019 66,522 1,829,355 Incurred less paid 1,268,491 Reserves 2009 and prior 44,965 Other (1) 14,240 Total net reserve for unpaid losses and loss adjustment expenses $ 1,327,696 (1) Other category represents unallocated loss adjustment expense (“ULAE”) reserves $45.6 million, discounting of loss reserves $(47.4) million and retroactive reinsurance agreements $12.3 million, allowance for uncollectible reinsurance $0.5 million and other $3.2 million. |
Schedule of historical average annual percentage payout of incurred claims, net of reinsurance | The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2019: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 14 % 19 % 15 % 13 % 10 % 7 % 7 % 3 % 3 % 2 % |
Schedule of the company's asbestos and environmental related losses | December 31, 2019 ($ in thousands) Gross Ceded Net Balance at beginning of year $ 14,262 $ 9,860 $ 4,402 Incurred losses and loss adjustment expense 430 66 364 Payments for losses and loss adjustment expenses 1,882 1,564 318 Balance at end of year $ 12,810 $ 8,362 $ 4,448 December 31, 2018 ($ in thousands) Gross Ceded Net Balance at beginning of year $ 15,628 $ 11,116 $ 4,512 Incurred losses and loss adjustment expense 30 24 6 Payments for losses and loss adjustment expenses 1,396 1,280 116 Balance at end of year $ 14,262 $ 9,860 $ 4,402 |
Schedule of deferred policy acquisition costs, net of reinsurance | ($ in thousands) December 31, 2017 $ 60,759 Acquisition costs deferred 204,283 Acquisition costs expensed (171,429) December 31, 2018 93,613 Acquisition costs deferred 189,970 Acquisition costs expensed (184,771) December 31, 2019 $ 98,812 |
Commercial Auto | |
Schedule of unpaid losses and loss adjustment expenses incurred and cumulative paid losses | Commercial Auto-Incurred Unaudited IBNR as of Cumulative For the Years Ended December 31, Claim Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 Counts Prior 2010 $ 13,046 $ 17,710 $ 18,011 $ 17,334 $ 18,717 $ 18,688 $ 19,046 $ 19,437 $ 19,280 $ 19,282 $ — 874 2011 13,864 13,462 11,260 11,231 12,547 12,547 12,508 12,476 12,476 — 1,219 2012 21,101 29,959 36,319 43,031 42,028 41,479 41,572 39,231 444 1,746 2013 47,191 50,752 63,764 77,570 76,768 72,265 81,422 993 6,224 2014 74,185 95,283 105,528 112,157 113,747 113,790 843 8,231 2015 120,137 139,415 152,268 146,757 155,266 1,981 11,153 2016 114,568 124,760 119,931 124,166 6,229 9,642 2017 81,986 79,156 71,068 12,343 7,061 2018 87,993 78,777 28,210 7,146 2019 115,393 72,508 8,141 $ 810,871 $ 123,551 Commercial Auto – Paid Unaudited For the Years Ended Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 3,105 $ 7,866 $ 12,346 $ 13,723 $ 17,275 $ 17,829 $ 18,074 $ 19,098 $ 19,138 $ 19,162 2011 4,717 7,791 7,250 9,111 11,587 12,005 12,123 12,117 12,128 2012 6,660 15,397 25,280 33,248 39,680 40,852 41,305 38,657 2013 13,015 26,773 43,403 64,073 72,906 71,010 79,066 2014 21,692 52,048 74,431 96,385 108,102 110,883 2015 37,964 74,524 107,063 126,831 142,806 2016 39,580 63,123 83,161 102,003 2017 19,950 34,659 47,199 2018 16,709 32,698 2019 22,082 606,684 Incurred less paid $ 204,187 |
Schedule of historical average annual percentage payout of incurred claims, net of reinsurance | The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2019: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 23 % 22 % 19 % 17 % 12 % 1 % 6 % (2) % — % — % |
General Liability | |
Schedule of unpaid losses and loss adjustment expenses incurred and cumulative paid losses | General Liability – Incurred Unaudited IBNR as of Cumulative For the Years Ended December 31, Claim Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 Counts Prior $ 7,384 2010 $ 56,373 $ 59,577 $ 64,210 $ 63,596 $ 62,270 $ 69,103 $ 72,902 $ 66,226 $ 68,905 $ 69,586 746 1,682 2011 45,894 58,633 61,398 60,375 63,264 67,791 62,127 66,641 64,682 1,254 1,532 2012 42,685 43,677 38,288 42,401 45,771 46,312 48,096 50,509 1,998 1,483 2013 48,466 61,785 62,618 70,459 60,613 61,796 69,565 7,755 2,608 2014 70,878 77,255 78,801 93,468 104,281 114,976 15,352 3,093 2015 80,225 80,411 78,163 80,514 93,808 21,362 3,007 2016 93,737 101,479 92,401 91,228 28,786 2,868 2017 99,845 100,306 94,554 50,712 2,921 2018 142,486 137,525 101,954 2,949 2019 153,650 139,174 2,309 $ 940,083 $ 376,477 General Liability – Paid Unaudited For the Years Ended Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 1,692 $ 14,901 $ 34,045 $ 44,087 $ 50,830 $ 61,716 $ 66,332 $ 70,235 $ 74,101 $ 76,201 2011 5,009 18,912 30,123 37,344 44,166 50,136 54,250 56,659 57,932 2012 945 8,844 14,751 24,257 32,585 36,521 40,754 45,509 2013 1,930 10,941 22,152 36,493 46,821 55,148 66,439 2014 5,456 14,032 28,581 41,079 53,712 73,491 2015 5,404 14,720 25,931 39,407 61,168 2016 3,547 13,873 25,223 47,333 2017 2,596 11,279 26,354 2018 2,223 15,625 2019 3,487 473,539 Incurred less paid $ 466,544 |
Schedule of historical average annual percentage payout of incurred claims, net of reinsurance | The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2019: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 3 % 12 % 15 % 16 % 14 % 13 % 10 % 6 % 4 % 3 % |
Workers' Compensation | |
Schedule of unpaid losses and loss adjustment expenses incurred and cumulative paid losses | Workers’ Compensation – Incurred Unaudited IBNR as of Cumulative For the Years Ended December 31, Claim Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 Counts Prior $ 5,590 2010 $ 24,965 $ 23,206 $ 26,970 $ 23,643 $ 25,751 $ 25,825 $ 28,260 $ 28,135 $ 28,597 $ 30,457 2,361 78 2011 28,987 22,186 23,576 21,411 19,489 21,943 18,986 21,247 23,750 2,508 202 2012 46,503 51,724 53,038 48,983 47,373 38,501 38,835 38,919 4,017 1,770 2013 76,844 71,683 70,939 68,109 71,532 69,729 64,727 7,141 2,694 2014 88,181 81,628 83,543 74,134 69,886 67,784 12,581 2,679 2015 101,762 101,410 89,383 82,212 87,570 14,957 3,881 2016 99,292 109,623 103,382 102,716 47,500 4,358 2017 102,250 101,691 93,134 52,781 4,678 2018 116,278 118,973 77,694 5,125 2019 97,485 76,057 4,468 $ 725,515 $ 303,187 Workers’ Compensation – Paid Unaudited For the Years Ended Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ — $ 180 $ 1,633 $ 2,907 $ 4,427 $ 6,165 $ 7,830 $ 9,706 $ 10,695 $ 11,908 2011 473 4,148 5,127 5,503 7,239 8,662 8,978 9,971 10,841 2012 2,381 5,481 10,598 14,634 18,468 23,694 25,495 26,237 2013 2,639 12,579 20,520 26,088 29,036 32,962 35,793 2014 4,644 14,901 24,411 35,131 39,846 42,423 2015 6,504 18,434 27,423 33,543 38,061 2016 10,891 24,557 35,385 43,171 2017 8,631 22,462 30,776 2018 9,563 29,008 2019 9,745 277,963 Incurred less paid $ 447,552 |
Schedule of historical average annual percentage payout of incurred claims, net of reinsurance | The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2019: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 8 % 14 % 10 % 9 % 6 % 7 % 4 % 4 % 3 % 4 % |
Commercial Multiple Peril | |
Schedule of unpaid losses and loss adjustment expenses incurred and cumulative paid losses | Commercial Multiple Peril – Incurred Unaudited IBNR as of Cumulative For the Years Ended December 31, Claim Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 Counts Prior 2010 2011 $ — $ — $ 11 $ 7 $ 6 $ 6 $ 2 $ 2 $ — — 2012 96 94 73 49 39 813 813 $ 813 — 5 2013 968 1,065 1,051 1,442 8,226 8,250 8,198 19 54 2014 13,037 15,884 16,448 25,915 27,126 30,172 1,326 614 2015 27,876 27,542 17,952 18,345 24,144 4,825 1,015 2016 34,010 30,379 34,883 44,758 8,295 1,190 2017 37,760 44,044 44,260 8,921 1,431 2018 39,507 37,015 20,432 1,184 2019 36,895 25,835 935 $ 226,257 $ 69,653 Commercial Multiple Peril – Paid Unaudited For the Years Ended Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 2011 $ — $ — $ — $ — $ — $ — $ 2 $ 2 $ 2012 — — 1 1 2 813 813 813 2013 43 192 312 754 8,083 8,149 8,157 2014 1,795 4,271 7,358 20,545 22,880 26,366 2015 6,879 14,751 8,949 14,293 20,676 2016 4,974 7,028 16,715 27,870 2017 7,270 19,733 27,816 2018 5,323 11,953 2019 5,940 129,593 Incurred less paid $ 96,664 |
Schedule of historical average annual percentage payout of incurred claims, net of reinsurance | The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2019: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 14 % 17 % 10 % 28 % 25 % 11 % — % — % — % — % |
All Other Lines | |
Schedule of unpaid losses and loss adjustment expenses incurred and cumulative paid losses | All Other Lines – Incurred Unaudited IBNR as of Cumulative For the Years Ended December 31, Claim Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 Counts Prior $ 2,507 2010 $ 37,233 $ 37,501 $ 25,750 $ 29,735 $ 29,377 $ 29,727 $ 32,631 $ 31,647 $ 31,335 $ 31,218 1 1,292 2011 26,899 34,597 30,507 29,749 29,238 28,794 31,176 31,018 30,450 10 1,466 2012 26,995 32,022 30,266 30,551 30,678 29,250 29,803 29,051 32 1,618 2013 36,900 36,992 34,287 33,773 26,428 25,859 25,890 225 1,649 2014 40,562 42,938 39,473 28,192 27,749 30,011 876 1,716 2015 54,269 58,501 69,660 67,924 70,154 1,540 1,813 2016 48,824 57,296 55,607 53,398 2,353 1,991 2017 33,108 36,102 36,489 3,003 2,491 2018 35,839 33,909 5,600 2,316 2019 54,550 17,105 1,738 $ 395,120 $ 33,252 All Other Lines – Paid Unaudited For the Years Ended Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 7,115 $ 15,776 $ 24,288 $ 25,038 $ 29,484 $ 28,429 $ 33,410 $ 33,485 $ 33,536 $ 33,656 2011 4,597 20,155 22,603 24,773 25,251 27,608 30,231 30,259 30,344 2012 6,634 18,554 22,619 26,821 28,639 28,319 28,542 28,577 2013 9,838 23,526 29,009 31,569 25,144 25,206 25,408 2014 11,150 26,667 32,126 24,846 26,388 27,770 2015 18,292 37,279 65,390 67,563 69,037 2016 19,279 41,618 44,104 46,119 2017 15,580 28,070 31,792 2018 11,194 23,605 2019 25,268 341,576 Incurred less paid $ 53,544 |
Schedule of historical average annual percentage payout of incurred claims, net of reinsurance | The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2019: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 33 % 39 % 20 % 2 % 2 % 2 % 7 % — % — % — % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Schedule of components of deferred tax assets and liabilities | December 31 ($ in thousands) 2019 2018 Deferred tax assets: Loss reserves $ 13,289 $ 11,342 Loss reserves transitional adjustment 6,104 6,954 Unearned premiums 16,785 14,985 Net operating loss carry forwards – state and local 17,008 16,373 Net operating loss carry forwards – federal 357 16,771 Capital loss carry forwards – federal 1,519 2,577 Bad debt reserve 3,229 3,182 Impairments 517 556 Deferred compensation 5,659 5,613 Amortization of intangibles 695 813 Limited partnership income 2,566 — Unrealized depreciation of investments — 7,446 Other 3,151 2,211 Total deferred tax assets 70,879 88,823 Less: valuation allowance (17,604) (16,962) Deferred tax assets, net of allowance 53,275 71,861 Deferred tax liabilities: Deferred policy acquisition costs 20,693 19,634 Loss reserve transitional adjustment 4,578 6,085 Fair value adjustments 3,628 3,635 Unrealized appreciation of investments 8,669 — Limited partnership income — 422 Other 10,904 8,846 Total deferred tax liabilities 48,472 38,622 Net deferred income taxes $ 4,803 $ 33,239 |
Schedule of tax benefit of the U.S. federal NOLs generated by year and expiration date | ($ in thousands) Amount Expires 2010 $ 357 2030 Total $ 357 |
Schedule of change in valuation allowance account with respect to the deferred tax asset | ($ in thousands) 2019 2018 Balance, beginning of year $ 16,962 $ 6,511 Change in valuation allowance 642 10,451 Balance, end of year $ 17,604 $ 16,962 |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | ($ in thousands) 2019 2018 Balance, beginning of year $ 528 $ 483 Additions for tax positions of prior years 260 45 Reductions for tax positions of prior years (350) — Balance, end of year $ 438 $ 528 |
Summary of effective income tax rate reconciliation | ($ in thousands) 2019 2018 2017 Expected tax expense at statutory rates in taxable jurisdictions $ 12,103 $ 13,896 $ 11,384 Tax-exempt interest — (46) (42) State taxes (629) (10,746) 3,302 Valuation allowance 642 10,451 (2,819) Effect of provision to tax return filing adjustments 42 — 671 Effect of Tax Reform — — 25,108 Other (21) (166) 629 Total income tax expense $ 12,137 $ 13,389 $ 38,233 |
Statutory Financial Informati_2
Statutory Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Statutory Financial Information | |
Schedule of statutory financial information | ($ in thousands) 2019 2018 2017 Combined statutory net income $ 55,681 $ 33,147 $ 26,303 Combined statutory surplus $ 568,777 $ 473,575 $ 433,946 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Schedule of minimum gross rental payments and sublease income | Minimum Rental Sublease ($ in thousands) Payments Income 2020 $ 4,243 $ 631 2021 4,162 — 2022 1,080 — 2023 585 — 2024 585 — 2025 342 — Total $ 10,997 $ 631 |
Summary of the fiduciary and pools’ underwriting accounts | ($ in thousands) 2019 2018 Assets held on behalf of unaffiliated pool members $ 10,522 $ 11,501 Escrow bond arrangements 1,014 951 Total $ 11,536 $ 12,452 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-Based Compensation | |
Summary of RSU transactions | Weighted Number of Average Grant Date Shares Fair Value Per Share Unvested at December 31, 2017 180,647 $ 11.25 Granted in 2018 13,992 18.67 Vested in 2018 (136,855) 11.30 Forfeited in 2018 (2,520) 11.09 Unvested at December 31, 2018 55,264 11.09 Granted in 2019 1,732,869 14.00 Vested in 2019 (406,081) 13.61 Forfeited in 2019 (92,656) 14.00 Unvested at December 31, 2019 1,289,396 $ 14.00 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Information | |
Summary of gross written premiums by customer segments | Years Ended December 31 ($ in thousands) 2019 2018 2017 Customer segment Construction $ 117,918 12.2 % $ 101,946 11.4 % $ 73,378 8.8 % Consumer Services 133,682 13.8 107,086 12.0 94,384 11.3 Marine and Energy 94,071 9.7 82,978 9.3 79,238 9.5 Media and Entertainment 124,950 12.9 119,926 13.4 114,442 13.7 Professional Services 119,326 12.4 110,546 12.3 112,575 13.4 Real Estate 167,635 17.3 132,652 14.8 132,029 15.8 Sports 30,079 3.1 23,590 2.6 22,224 2.6 Transportation 112,191 11.6 92,169 10.3 85,079 10.2 Customer segment subtotal 899,852 93.0 770,893 86.1 713,349 85.3 Other 68,159 7.0 124,219 13.9 122,985 14.7 Specialty Insurance total $ 968,011 100.0 % $ 895,112 100.0 % $ 836,334 100.0 % |
Summary of gross written premiums by line of business across customer segments | Years Ended December 31 ($ in thousands) 2019 2018 2017 Line of business Commercial Auto $ 205,303 21.2 % $ 151,612 16.9 % $ 124,688 14.9 % General Liability 335,197 34.6 277,948 31.1 272,660 32.6 Workers’ Compensation 179,432 18.6 246,302 27.5 235,668 28.2 Commercial Multiple Peril 82,126 8.5 67,351 7.5 73,859 8.8 All Other Lines 165,953 17.1 151,899 17.0 129,459 15.5 Specialty Insurance total $ 968,011 100.0 % $ 895,112 100.0 % $ 836,334 100.0 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share | |
Summary of reconciliation of the numerators and denominators of basic and diluted EPS | ($ in thousands, except per share amounts) Continuing Operations Discontinued Operations Income Shares Per Share Loss Shares Per Share 2019 (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS: Net income (loss) available to common stockholders $ 45,494 41,095 $ 1.11 $ (6,604) 41,095 $ (0.16) Effect of dilutive securities: Stock compensation plans 428 428 Diluted EPS $ 45,494 41,523 $ 1.10 $ (6,604) 41,523 $ (0.16) Continuing Operations Discontinued Operations Income Shares Per Share Income Shares Per Share 2018 (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS: Net income available to common stockholders $ 53,729 38,753 $ 1.39 $ 814 38,753 $ 0.02 Effect of dilutive securities: Stock compensation plans 688 688 Diluted EPS $ 53,729 39,441 $ 1.36 $ 814 39,441 $ 0.02 Continuing Operations Discontinued Operations Loss Shares Per Share Loss Shares Per Share 2017 (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS: Net loss available to common stockholders $ (6,904) 37,555 $ (0.18) $ (37,089) 37,555 $ (0.99) Diluted EPS $ (6,904) 37,555 $ (0.18) $ (37,089) 37,555 $ (0.99) |
Quarterly Financial Informati_2
Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information | |
Schedule of Quarterly Financial Information | (unaudited, $ in thousands, except per share data) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Year 2019 Gross written premiums $ 255,838 $ 235,032 $ 227,196 $ 249,945 $ 968,011 Revenues 212,972 220,112 219,870 225,105 878,059 Net income from continuing operations 13,695 8,696 8,361 14,742 45,494 Net income 13,440 8,618 8,312 8,520 38,890 Basic earnings per share - continuing operations 0.35 0.22 0.20 0.34 1.11 Diluted earnings per share - continuing operations 0.35 0.22 0.19 0.33 1.10 Basic earnings per share 0.35 0.22 0.19 0.19 0.95 Diluted earnings per share 0.34 0.22 0.19 0.19 0.94 2018 Gross written premiums $ 249,420 $ 222,555 $ 201,296 $ 221,841 $ 895,112 Revenues 181,046 199,525 201,726 203,575 785,872 Net income from continuing operations 10,010 14,652 15,603 13,464 53,729 Net income 10,795 14,454 15,174 14,120 54,543 Basic earnings per share - continuing operations 0.26 0.38 0.40 0.35 1.39 Diluted earnings per share - continuing operations 0.25 0.37 0.40 0.34 1.36 Basic earnings per share 0.28 0.37 0.39 0.36 1.41 Diluted earnings per share 0.27 0.36 0.38 0.36 1.38 |
Background (Details)
Background (Details) - shares | Jul. 25, 2019 | Dec. 31, 2019 | Jul. 24, 2019 | Dec. 31, 2018 |
Background | ||||
Shares of the Company issued as merger consideration | 38,851,369 | |||
Percentage of equity interests of the Company issued as merger consideration | 100.00% | |||
Conversion ratio of PGHL shares to Company shares | 6.46 | |||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Background - Initial Public Off
Background - Initial Public Offering (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 15, 2019 | Jul. 29, 2019 | Dec. 31, 2019 |
Initial Public Offering | |||
Shares sold by principal shareholders in offering | 1,178,570 | ||
Ownership percentage | 50.00% | ||
GS Investors | Prosight Global, Inc. | |||
Initial Public Offering | |||
Ownership percentage | 39.50% | 40.90% | |
TPG Investors | Prosight Global, Inc. | |||
Initial Public Offering | |||
Ownership percentage | 38.00% | 39.40% | |
IPO | |||
Initial Public Offering | |||
Total shares sold | 7,857,145 | ||
Number of shares issued | 4,285,715 | ||
Price per share | $ 14 | ||
Net proceeds from the IPO | $ 50.8 | ||
IPO | Principal Stockholders | |||
Initial Public Offering | |||
Shares sold by principal shareholders in offering | 3,571,430 | ||
Principal Stockholder Offering | Principal Stockholders | |||
Initial Public Offering | |||
Shares sold by principal shareholders in offering | 1,178,570 | ||
Price per share | $ 14 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Significant accounting policies | ||||
Allowance for uncollectible premiums receivable | $ 5,100 | $ 4,800 | ||
Statutory U.S tax rate | 21.00% | 35.00% | ||
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | $ (1,583) | |||
Carried discounted reserves on workers’ compensation claims, net of reinsurance | 116,900 | 96,300 | ||
Workers’ compensation reserves, discount amount | $ 47,400 | $ 37,000 | ||
Outstanding common stock, par value | $ 0.01 | $ 0.01 | ||
Vested RSUs conversion common stock | 906,182 | 548,292 | 517,446 | |
Stock dividends declared | $ 0 | $ 0 | $ 0 | |
ASU 2018-02 | ||||
Significant accounting policies | ||||
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | $ 1,600 | |||
Minimum | ||||
Significant accounting policies | ||||
Workers’ compensation reserves, discount rate (as a percent) | 2.85% | 2.85% | ||
Maximum | ||||
Significant accounting policies | ||||
Workers’ compensation reserves, discount rate (as a percent) | 5.00% | 5.00% | ||
Property, equipment, and leasehold improvements | ||||
Significant accounting policies | ||||
Unamortized balance | $ 3,300 | $ 3,800 | ||
Depreciation expense | $ 1,200 | 1,500 | $ 1,700 | |
Property, equipment, and leasehold improvements | Minimum | ||||
Significant accounting policies | ||||
Estimated useful lives | 3 years | |||
Property, equipment, and leasehold improvements | Maximum | ||||
Significant accounting policies | ||||
Estimated useful lives | 7 years | |||
Capitalized software | ||||
Significant accounting policies | ||||
Unamortized balance | $ 33,800 | 35,000 | ||
Depreciation expense | $ 7,000 | $ 5,800 | $ 5,400 | |
Capitalized software | Minimum | ||||
Significant accounting policies | ||||
Estimated useful lives | 3 years | |||
Capitalized software | Maximum | ||||
Significant accounting policies | ||||
Estimated useful lives | 7 years |
Recently Adopted Accounting S_2
Recently Adopted Accounting Standards (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2020 |
Recently adopted accounting standards | |||
Reclassification of stranded deferred taxes from AOCI to Retained Earnings resulting from the enactment of Tax Reform | $ 1,583 | ||
ASU 2018-02 | |||
Recently adopted accounting standards | |||
Reclassification of stranded deferred taxes from AOCI to Retained Earnings resulting from the enactment of Tax Reform | $ (1,600) | ||
ASU 2016-02 | Forecast | |||
Recently adopted accounting standards | |||
Operating lease right-of-use asset, continuing operations | $ 6,800 | ||
Operating lease liability, continuing operations | 6,800 | ||
Operating lease right-of-use asset, discontinued operations | 2,600 | ||
Operating lease liability, discontinued operations | $ 2,600 |
Statements of Cash Flow (Detail
Statements of Cash Flow (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental cash flow information | |||
Interest | $ 12,865 | $ 12,377 | $ 12,125 |
Federal income tax | $ (780) | $ 135 | $ 227 |
Conversion of restricted stock units into shares of common stock | 59,169 |
Goodwill and Intangibles - Acqu
Goodwill and Intangibles - Acquisition of New York Marine (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 23, 2010 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business acquisition | ||||
Goodwill | $ 11,911 | $ 11,911 | $ 11,911 | |
Intangible assets remaining to be amortized | $ 150 | |||
NYMAGIC | ||||
Business acquisition | ||||
Outstanding common stock acquired (as a percent) | 100.00% | |||
Cash price per share | $ 25.75 | |||
Cash price | $ 231,900 | |||
Fair value of net assets acquired | 220,000 | |||
Fair value adjustments for net assets acquired | 9,500 | |||
Goodwill | 11,900 | |||
Intangible assets acquired, not subject to amortization | 17,100 | |||
Intangible assets acquired, subject to amortization | 13,600 | |||
Intangible assets remaining to be amortized | $ 200 | |||
NYMAGIC | Minimum | ||||
Business acquisition | ||||
Intangible assets acquired, subject to amortization, amortization period | 2 years | |||
NYMAGIC | Maximum | ||||
Business acquisition | ||||
Intangible assets acquired, subject to amortization, amortization period | 15 years |
Goodwill and Intangibles - Impa
Goodwill and Intangibles - Impairment of Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangibles | ||
Impairment of goodwill | $ 0 | |
Impairment loss on other intangibles | 0 | |
Goodwill | ||
Beginning balance | 11,911 | $ 11,911 |
Ending balance | 11,911 | 11,911 |
Other Intangibles | ||
Beginning balance | 17,308 | 17,338 |
Amortization | 30 | 30 |
Ending balance | 17,278 | 17,308 |
Total | ||
Beginning balance | 29,219 | 29,249 |
Amortization | 30 | 30 |
Ending balance | $ 29,189 | $ 29,219 |
Goodwill and Intangibles - Stat
Goodwill and Intangibles - Status of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Goodwill, Gross | $ 11,911 | $ 11,911 | |
Goodwill | 11,911 | 11,911 | $ 11,911 |
Finite lived Intangible assets, Accumulated Amortization | (30) | (2,244) | |
Finite lived Intangible assets, Net | 150 | ||
Net balance, Gross | 29,219 | 31,463 | |
Net balance, Net | 29,189 | 29,219 | $ 29,249 |
Other | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Finite lived Intangible assets, Gross | 208 | 2,452 | |
Finite lived Intangible assets, Accumulated Amortization | (30) | (2,244) | |
Finite lived Intangible assets, Net | $ 178 | $ 208 | |
Useful Life | 15 years | ||
Other | Maximum | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Useful Life | 15 years | ||
State licenses | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Indefinite lived intangible assets, gross | $ 17,100 | $ 17,100 | |
Indefinite lived Intangible assets, Net | $ 17,100 | $ 17,100 |
Goodwill and Intangibles - Esti
Goodwill and Intangibles - Estimated Amortization of Intangible Assets (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Goodwill and Intangibles | |
2020 | $ 30 |
2021 | 30 |
2022 | 30 |
2023 | 30 |
2024 | 30 |
Total | $ 150 |
Discontinued Operations - Resul
Discontinued Operations - Results of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Foreign currency translation gain (loss) | $ 4,570 | ||
Revenues | |||
Net earned premiums | $ 611 | $ 1,173 | 49,233 |
Net investment income | 142 | 514 | 2,717 |
Realized Investment gains, net | 1,267 | 830 | 14,329 |
Other Income | 338 | ||
Total revenue | 2,020 | 2,855 | 66,279 |
Expenses | |||
Net losses and loss adjustment expenses incurred | 10,463 | 11,197 | 50,787 |
Policy acquisition expenses | 218 | 401 | 9,544 |
General and administrative expenses | 57 | (8,401) | 27,533 |
Interest expense | 218 | 1,648 | |
Foreign exchange gains | (4,570) | ||
Other expense | 19,105 | ||
Total expenses | 10,738 | 3,415 | 104,047 |
Loss from discontinued operations before income taxes | (8,718) | (560) | (37,768) |
Income tax benefit | (2,114) | (1,374) | (679) |
Net (loss) income from discontinued operations | (6,604) | 814 | $ (37,089) |
Insurance Operations, U.K. | Discontinued operation | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain (loss) recognized | 0 | ||
Cash and securities deposited | 10,400 | ||
Letters of credit and securities placed | $ 23,200 | ||
Quota share reinsurance (as a percent) | 100.00% | ||
Aggregate Stop Loss reinsurance protection, liability | $ 24,000 | $ 13,300 |
Discontinued Operations - Conso
Discontinued Operations - Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Total assets | $ 21,584 | $ 19,719 |
Liabilities | ||
Total liabilities | 31,578 | 22,256 |
Insurance Operations, U.K. | Discontinued operation | ||
Assets | ||
Total cash and investments | 10,428 | 10,436 |
Other assets | 11,156 | 9,283 |
Total assets | 21,584 | 19,719 |
Liabilities | ||
Unpaid losses and loss adjustment expenses | 24,169 | 14,030 |
Other liabilities | 7,409 | 8,226 |
Total liabilities | $ 31,578 | $ 22,256 |
Investments - Gross Unrealized
Investments - Gross Unrealized Gains and Losses on AFS Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Gross unrealized gains and losses on AFS securities included in assets | ||
Cost/Amortized Cost | $ 1,999,403 | $ 1,729,755 |
Gross Unrealized Gains | 48,403 | 13,675 |
Gross Unrealized Losses | (7,124) | (50,048) |
Fair Value | 2,040,682 | 1,693,382 |
Short-term Investments | 43,873 | 36,661 |
Commercial levered loans (amortized cost) | 14,069 | 16,915 |
Limited partnerships and limited liability companies (fair value) | 66,660 | 53,432 |
Total investments | $ 2,165,284 | $ 1,800,390 |
Proportion of Fixed income securities, AFS to total investments (as a percent) | 94.20% | 94.10% |
Proportion of Short-term investments to total investments (as a percent) | 2.00% | 2.00% |
Proportion of Commercial levered loans (amortized cost) to total investments (as a percent) | 0.70% | 0.90% |
Proportion of Limited partnerships and limited liability companies (fair value) to total investments (as a percent) | 3.10% | 3.00% |
Total investment percentage | 100.00% | 100.00% |
Fixed-income portfolios considered investment grade (as a percent) | 91.10% | 85.00% |
Fixed-income securities below investment grade, held | $ 181,000 | $ 259,300 |
U.S. Treasury securities | ||
Gross unrealized gains and losses on AFS securities included in assets | ||
Cost/Amortized Cost | 49,161 | 92,219 |
Gross Unrealized Gains | 838 | 126 |
Gross Unrealized Losses | (14) | (2,017) |
Fair Value | $ 49,985 | $ 90,328 |
Proportion of Fixed income securities, AFS to total investments (as a percent) | 2.30% | 5.00% |
Government agency securities | ||
Gross unrealized gains and losses on AFS securities included in assets | ||
Cost/Amortized Cost | $ 6,522 | |
Gross Unrealized Gains | 23 | |
Gross Unrealized Losses | (14) | |
Fair Value | $ 6,531 | |
Proportion of Fixed income securities, AFS to total investments (as a percent) | 0.30% | |
Corporate debt securities | ||
Gross unrealized gains and losses on AFS securities included in assets | ||
Cost/Amortized Cost | $ 1,308,094 | $ 1,231,352 |
Gross Unrealized Gains | 33,743 | 1,216 |
Gross Unrealized Losses | (3,025) | (40,138) |
Fair Value | $ 1,338,812 | $ 1,192,430 |
Proportion of Fixed income securities, AFS to total investments (as a percent) | 61.80% | 66.30% |
Municipal debt obligations | ||
Gross unrealized gains and losses on AFS securities included in assets | ||
Cost/Amortized Cost | $ 80,338 | $ 6,238 |
Gross Unrealized Gains | 243 | |
Gross Unrealized Losses | (766) | (153) |
Fair Value | $ 79,815 | $ 6,085 |
Proportion of Fixed income securities, AFS to total investments (as a percent) | 3.70% | 0.30% |
ABS | ||
Gross unrealized gains and losses on AFS securities included in assets | ||
Cost/Amortized Cost | $ 73,068 | $ 82,603 |
Gross Unrealized Gains | 854 | 1,095 |
Gross Unrealized Losses | (340) | (117) |
Fair Value | $ 73,582 | $ 83,581 |
Proportion of Fixed income securities, AFS to total investments (as a percent) | 3.40% | 4.70% |
CLO | ||
Gross unrealized gains and losses on AFS securities included in assets | ||
Cost/Amortized Cost | $ 181,704 | $ 161,421 |
Gross Unrealized Gains | 125 | 160 |
Gross Unrealized Losses | (2,280) | (4,668) |
Fair Value | $ 179,549 | $ 156,913 |
Proportion of Fixed income securities, AFS to total investments (as a percent) | 8.30% | 8.70% |
CMBS | ||
Gross unrealized gains and losses on AFS securities included in assets | ||
Cost/Amortized Cost | $ 95,810 | $ 55,980 |
Gross Unrealized Gains | 1,863 | |
Gross Unrealized Losses | (147) | (2,137) |
Fair Value | $ 97,526 | $ 53,843 |
Proportion of Fixed income securities, AFS to total investments (as a percent) | 4.50% | 3.00% |
RMBS - non-agency | ||
Gross unrealized gains and losses on AFS securities included in assets | ||
Cost/Amortized Cost | $ 62,343 | $ 68,594 |
Gross Unrealized Gains | 9,458 | 11,078 |
Gross Unrealized Losses | (191) | (121) |
Fair Value | $ 71,610 | $ 79,551 |
Proportion of Fixed income securities, AFS to total investments (as a percent) | 3.30% | 4.40% |
RMBS - agency | ||
Gross unrealized gains and losses on AFS securities included in assets | ||
Cost/Amortized Cost | $ 142,363 | $ 31,348 |
Gross Unrealized Gains | 1,256 | |
Gross Unrealized Losses | (347) | (697) |
Fair Value | $ 143,272 | $ 30,651 |
Proportion of Fixed income securities, AFS to total investments (as a percent) | 6.60% | 1.70% |
Investments - Unrealized Loss P
Investments - Unrealized Loss Position (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value | ||
Less Than 12 Months | $ 290,187 | $ 601,135 |
Greater Than 12 Months | 200,992 | 850,337 |
Total Fair Value | 491,179 | 1,451,472 |
Unrealized Losses | ||
Less Than 12 Months | (3,930) | (15,578) |
Greater Than 12 Months | (3,194) | (34,470) |
Total Unrealized Losses | $ (7,124) | $ (50,048) |
Fixed income securities, unrealized loss position | 313 | 708 |
OTTI charges in realized investment (losses) gains, net | $ 0 | $ 1,500 |
U.S. Treasury securities | ||
Fair Value | ||
Less Than 12 Months | 8,263 | |
Greater Than 12 Months | 7,469 | 69,727 |
Total Fair Value | 7,469 | 77,990 |
Unrealized Losses | ||
Less Than 12 Months | (82) | |
Greater Than 12 Months | (14) | (1,935) |
Total Unrealized Losses | (14) | (2,017) |
Government agency securities | ||
Fair Value | ||
Less Than 12 Months | 3,192 | |
Total Fair Value | 3,192 | |
Unrealized Losses | ||
Less Than 12 Months | (14) | |
Total Unrealized Losses | (14) | |
Corporate debt securities | ||
Fair Value | ||
Less Than 12 Months | 133,341 | 393,931 |
Greater Than 12 Months | 50,695 | 710,482 |
Total Fair Value | 184,036 | 1,104,413 |
Unrealized Losses | ||
Less Than 12 Months | (2,509) | (10,241) |
Greater Than 12 Months | (516) | (29,897) |
Total Unrealized Losses | (3,025) | (40,138) |
Municipal debt obligations | ||
Fair Value | ||
Less Than 12 Months | 66,355 | |
Greater Than 12 Months | 6,085 | |
Total Fair Value | 66,355 | 6,085 |
Unrealized Losses | ||
Less Than 12 Months | (766) | |
Greater Than 12 Months | (153) | |
Total Unrealized Losses | (766) | (153) |
ABS | ||
Fair Value | ||
Less Than 12 Months | 27,884 | 25,258 |
Greater Than 12 Months | 11,165 | 4,249 |
Total Fair Value | 39,049 | 29,507 |
Unrealized Losses | ||
Less Than 12 Months | (175) | (61) |
Greater Than 12 Months | (165) | (56) |
Total Unrealized Losses | (340) | (117) |
CLO | ||
Fair Value | ||
Less Than 12 Months | 28,485 | 146,004 |
Greater Than 12 Months | 110,825 | |
Total Fair Value | 139,310 | 146,004 |
Unrealized Losses | ||
Less Than 12 Months | (338) | (4,668) |
Greater Than 12 Months | (1,942) | |
Total Unrealized Losses | (2,280) | (4,668) |
CMBS | ||
Fair Value | ||
Less Than 12 Months | 18,307 | |
Greater Than 12 Months | 6,053 | 53,843 |
Total Fair Value | 24,360 | 53,843 |
Unrealized Losses | ||
Less Than 12 Months | (102) | |
Greater Than 12 Months | (45) | (2,137) |
Total Unrealized Losses | (147) | (2,137) |
RMBS - non-agency | ||
Fair Value | ||
Less Than 12 Months | 2,173 | 529 |
Greater Than 12 Months | 2,418 | 2,449 |
Total Fair Value | 4,591 | 2,978 |
Unrealized Losses | ||
Less Than 12 Months | (14) | (13) |
Greater Than 12 Months | (177) | (108) |
Total Unrealized Losses | (191) | (121) |
RMBS - agency | ||
Fair Value | ||
Less Than 12 Months | 10,450 | 27,150 |
Greater Than 12 Months | 12,367 | 3,502 |
Total Fair Value | 22,817 | 30,652 |
Unrealized Losses | ||
Less Than 12 Months | (12) | (513) |
Greater Than 12 Months | (335) | (184) |
Total Unrealized Losses | $ (347) | $ (697) |
Investments - Amortized Cost an
Investments - Amortized Cost and Fair Value of Fixed Income Securities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Amortized Cost | |
Due in one year or less | $ 99,035 |
Due after one through five years | 679,649 |
Due after five through ten years | 507,803 |
Due after ten years | 157,628 |
Amortized Cost | 1,444,115 |
Fair Value | |
Due in one year or less | 99,326 |
Due after one through five years | 692,219 |
Due after five through ten years | 523,276 |
Due after ten years | 160,322 |
Fair Value | 1,475,143 |
Amortized Cost - Structured securities | 1,999,403 |
Fair Value - Structured securities | 2,040,682 |
ABS | |
Fair Value | |
Amortized Cost - Structured securities | 73,068 |
Fair Value - Structured securities | 73,582 |
CLO | |
Fair Value | |
Amortized Cost - Structured securities | 181,704 |
Fair Value - Structured securities | 179,549 |
CMBS | |
Fair Value | |
Amortized Cost - Structured securities | 95,810 |
Fair Value - Structured securities | 97,526 |
RMBS - non-agency | |
Fair Value | |
Amortized Cost - Structured securities | 62,343 |
Fair Value - Structured securities | 71,610 |
RMBS - agency | |
Fair Value | |
Amortized Cost - Structured securities | 142,363 |
Fair Value - Structured securities | $ 143,272 |
Investments - Limited Partnersh
Investments - Limited Partnerships and Limited Liability Company Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Investments | ||
Limited partnerships and limited liability companies (fair value) | $ 66,660 | $ 53,432 |
Threshold notice period to withdraw funds | 90 days | |
Minimum holding period | 1 year | |
PIMCO Tactical Opportunities Fund | ||
Investments | ||
Limited partnerships and limited liability companies (fair value) | $ 36,600 |
Investments - Gain Loss on Inve
Investments - Gain Loss on Investment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investments | |||
Allowance for loan losses | $ 0 | $ 0 | |
Proceeds from sales and redemptions in AFS securities | 302.9 | 255.2 | $ 977 |
Gross realized gains from sales and redemptions in AFS securities | 1.4 | 0.6 | 5.8 |
Gross realized losses from sales and redemptions of AFS investments | $ 0.7 | $ 2.2 | $ 1.6 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net investment income included in net income (loss) | |||
Gross investment income | $ 71,199 | $ 58,136 | $ 38,076 |
Less: investment income attributable to funds withheld liabilities | (655) | (912) | |
Less: expenses | (1,647) | (1,253) | (1,880) |
Net investment income | 68,897 | 55,971 | 36,196 |
Fixed income securities | |||
Net investment income included in net income (loss) | |||
Gross investment income | 66,975 | 55,765 | 33,467 |
Commercial levered loans | |||
Net investment income included in net income (loss) | |||
Gross investment income | 765 | 1,114 | 1,153 |
Net limited partnerships gains | |||
Net investment income included in net income (loss) | |||
Gross investment income | 3,101 | 1,081 | 3,240 |
Other | |||
Net investment income included in net income (loss) | |||
Gross investment income | $ 358 | $ 176 | $ 216 |
Investments - Other Details (De
Investments - Other Details (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Securities required to be held with various regulatory authorities as required by law | $ 210.8 | $ 188.6 |
Fair value of assets on deposit in collateral agreements | 367.1 | 358.5 |
Carrying value of assets on deposit in collateral agreements | 352 | $ 368 |
Insurance Operations, U.K. | Discontinued operation | ||
Cash And Securities Deposited | 10.4 | |
Letters Of Credit And Securities Placed | $ 23.2 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Major categories of assets measured at fair value on a recurring basis | ||
Limited partnerships and limited liability companies (fair value) | $ 66,660 | $ 53,432 |
Transfers from Level 1 to Level 2 | 0 | 0 |
Transfers from Level 2 to Level 3 | 126,500 | |
Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 2,040,682 | 1,693,382 |
Limited partnerships and limited liability companies (fair value) | 66,660 | 53,432 |
Total assets at fair value | 2,107,342 | 1,746,814 |
Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 1,891,051 | 1,566,885 |
Level 3 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 149,631 | 126,497 |
U.S. Treasury securities | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 49,985 | 90,328 |
U.S. Treasury securities | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 49,985 | 90,328 |
Corporate debt securities | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 1,338,812 | 1,192,430 |
Corporate debt securities | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 1,189,181 | 1,065,933 |
Corporate debt securities | Level 3 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 149,631 | 126,497 |
Government agency securities | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 6,531 | |
Government agency securities | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 6,531 | |
Municipal debt obligations | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 79,815 | 6,085 |
Municipal debt obligations | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 79,815 | 6,085 |
ABS | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 73,582 | 83,581 |
ABS | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 73,582 | 83,581 |
CLO | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 179,549 | 156,913 |
CLO | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 179,549 | 156,913 |
CMBS | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 97,526 | 53,843 |
CMBS | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 97,526 | 53,843 |
RMBS - non-agency | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 71,610 | 79,551 |
RMBS - non-agency | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 71,610 | 79,551 |
RMBS - agency | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | 143,272 | 30,651 |
RMBS - agency | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Total fixed income securities | $ 143,272 | $ 30,651 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Liabilities | ||
Total notes payable | $ 164,693 | $ 182,355 |
Carrying Value | ||
Assets | ||
Commercial levered loans | 14,069 | 16,915 |
Liabilities | ||
Notes payable | 165,000 | 183,000 |
Unamortized debt issuance costs | (307) | (645) |
Total notes payable | 164,693 | 182,355 |
Fair Value | ||
Assets | ||
Commercial levered loans | 13,950 | 15,858 |
Liabilities | ||
Notes payable | $ 167,507 | $ 183,999 |
Fair value of the notes payable as a percentage of par value | 101.50% | 100.50% |
Level 2 | Fair Value | ||
Liabilities | ||
Notes payable | $ 167,507 | $ 183,999 |
Level 3 | Fair Value | ||
Assets | ||
Commercial levered loans | $ 13,950 | $ 15,858 |
Fair Value Measurements - Secur
Fair Value Measurements - Securities Measured Using Level 3 (Details) - Corporate debt securities - Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in fair value of securities measured using Level 3 inputs | ||
Fair value at beginning of period | $ 126,497 | |
OCI | 3,011 | $ 764 |
Net realized loss | (5) | (9) |
Purchases | 23,905 | 9,492 |
Settlements | (3,777) | (2,754) |
Transfers into Level 3 | 119,004 | |
Fair value at end of period | $ 149,631 | $ 126,497 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Components of AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
AOCI Attributable to Parent, Net of Tax | |||
Balance at the beginning of period, gross | $ (29,760) | $ 22,265 | $ 30,630 |
Unrealized holding gains (losses) on fixed income securities, gross | 77,920 | (53,582) | 3,517 |
Cumulative translation adjustment, gross | 6,881 | ||
Amounts reclassified into net loss (income), gross | 2,037 | (1,557) | 18,763 |
Other comprehensive loss (income), gross | 75,883 | (52,025) | (8,365) |
Balance at the end of period, gross | 46,123 | (29,760) | 22,265 |
Balance at the beginning of period, tax | (7,445) | 2,968 | 1,148 |
Unrealized holding gains (losses) on fixed income securities, tax | 16,277 | (10,842) | 4,874 |
Amounts reclassified into net loss (income), tax | 162 | (429) | 1,471 |
Other comprehensive loss (income), tax | 16,115 | (10,413) | 3,403 |
Reclassification of stranded deferred taxes | (1,583) | ||
Balance at the end of period, tax | 8,670 | (7,445) | 2,968 |
Balance at the beginning of period, net | (22,315) | 19,297 | 29,482 |
Unrealized holding gains (losses) on fixed income securities | 61,643 | (42,740) | (1,357) |
Foreign currency translation adjustment | 6,881 | ||
Amounts reclassified into net loss (income) | 1,875 | (1,128) | 17,292 |
Other comprehensive income (loss) | 59,768 | (41,612) | (11,768) |
Reclassification of stranded deferred taxes, net | 1,583 | ||
Balance at the end of period, net | $ 37,453 | $ (22,315) | $ 19,297 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Reclassifications Out of AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Unrealized gains on securities, tax | $ 162 | $ (429) | $ 1,471 |
Total reclassifications | 1,875 | (1,128) | 17,292 |
Realized Investment Gains (Losses) | |||
Unrealized gains on securities | 2,037 | (1,557) | 18,763 |
Income Tax Benefit | |||
Unrealized gains on securities, tax | $ 162 | $ (429) | $ 1,471 |
Related-Party Information (Deta
Related-Party Information (Details) - USD ($) $ in Thousands | May 03, 2019 | Mar. 15, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Related party transactions | ||||||
Equity distribution for executive loan repayment | $ 4,174 | |||||
Executives | ||||||
Related party transactions | ||||||
Loans payable | $ 4,200 | |||||
Goldman Sachs Asset Management | ||||||
Related party transactions | ||||||
Investment management fees | 1,300 | $ 1,100 | $ 1,700 | |||
Former CEO | ||||||
Related party transactions | ||||||
Common shares cancelled as per terms of the separation agreement | 137,987 | |||||
Other Expense | Former CEO | ||||||
Related party transactions | ||||||
Severance expense | $ 8,000 | |||||
Paid-in capital | ||||||
Related party transactions | ||||||
Equity distribution for executive loan repayment | $ 4,200 | $ 4,174 |
Insurance Operations - Reinsura
Insurance Operations - Reinsurance Transactions (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Reinsurance | ||
Reinsurers with largest obligations, number | item | 3 | |
Allowance for uncollectible reinsurance | $ 0.5 | |
Aggregate reinsurers’ ceding participation (as a percent) | 26.00% | |
Whole Account Quota Share Reinsurance Agreement | ||
Reinsurance | ||
Reinsurance receivable unpaid | $ 33.1 | $ 43.7 |
Minimum | Whole Account Quota Share Reinsurance Agreement | ||
Reinsurance | ||
Provisional ceding commission (as a percent) | 30.00% | |
Maximum | Whole Account Quota Share Reinsurance Agreement | ||
Reinsurance | ||
Provisional ceding commission (as a percent) | 30.50% | |
Reinsurance receivables | ||
Reinsurance | ||
Allowance for uncollectible reinsurance | $ 10.9 | $ 10 |
Swiss Reinsurance America Corporation | Reinsurance receivables paid, reinsurance receivables unpaid and prepaid reinsurance premiums | ||
Reinsurance | ||
Reinsurers with largest obligations (as a percent) | 31.30% | |
Munich Reinsurance Company | Reinsurance receivables paid, reinsurance receivables unpaid and prepaid reinsurance premiums | ||
Reinsurance | ||
Reinsurers with largest obligations (as a percent) | 14.20% | |
Harco National Insurance Company | Reinsurance receivables paid, reinsurance receivables unpaid and prepaid reinsurance premiums | ||
Reinsurance | ||
Reinsurers with largest obligations (as a percent) | 9.00% |
Insurance Operations - Quota Sh
Insurance Operations - Quota Share Arrangements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Insurance activity | |||
Ceded earned premium | $ 114,751 | $ 123,715 | $ 181,553 |
Reduction to pre-tax income | (57,631) | (67,118) | (31,329) |
Whole Account Quota Share Reinsurance Agreement | |||
Insurance activity | |||
(Return of ceded prepaid) ceded written premium | (3) | (58,857) | 160,779 |
Ceded earned premium | 14,560 | 87,362 | |
Ceded earned premium | (3) | ||
(Increase) reduction to net loss and loss adjustment expenses incurred | (4,746) | 9,514 | 51,897 |
Reduction to policy acquisition expenses | $ 4,743 | 3,955 | 29,560 |
Reduction to pre-tax income | $ 1,091 | $ 5,905 |
Insurance Operations - Reinsu_2
Insurance Operations - Reinsurance Ceded and Assumed (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Written premiums | |||
Direct written premiums | $ 964,512 | $ 889,526 | $ 833,536 |
Assumed from other companies | 3,499 | 5,586 | 2,798 |
Ceded to other companies | 115,871 | 45,038 | 276,048 |
Net written premiums | 852,140 | 850,074 | 560,286 |
Earned premiums | |||
Direct earned premiums | 918,718 | 844,234 | 788,862 |
Assumed from other companies | 3,887 | 10,266 | 2,477 |
Ceded to other companies | 114,751 | 123,715 | 181,553 |
Net premiums earned | $ 807,854 | $ 730,785 | $ 609,786 |
Percent of amount assumed to net | 0.50% | 1.40% | 0.40% |
Losses and loss adjustment expenses incurred | |||
Direct net losses and loss adjustment expenses incurred | $ 556,051 | $ 485,770 | $ 483,209 |
Assumed from other companies | 9,298 | (3,209) | 720 |
Ceded to other companies | 64,324 | 47,731 | 90,188 |
Net losses and loss adjustment expenses incurred | $ 501,025 | $ 434,830 | $ 393,741 |
Insurance Operations - Retroact
Insurance Operations - Retroactive Reinsurance Agreement (Details) - Retroactive reinsurance agreement - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reinsurance Retention Policy [Line Items] | |||
Reserves | $ 107.8 | $ 96.5 | $ 306.4 |
Limit on respective paid losses | 40 | 35 | 100 |
Amount in excess of paid losses | 119.3 | 106.5 | 315 |
Retrospective rating feature, additional premium amount | $ 21 | $ 18 | $ 47.6 |
Retrospective rating feature, additional premium (as a percent) | 4.00% | 4.00% | 3.00% |
Reinsurance Recoverable Percentage | 100.00% | 100.00% | 100.00% |
Insurance Operations - Gross Wr
Insurance Operations - Gross Written Premiums (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Insurance Operations | |||
Percentage of direct premiums sourced from distribution party acquired by a third party insurance carrier | 7.10% | 13.50% | |
Number of distribution partners contributing the largest amounts of direct written premiums | item | 3 | ||
Direct premiums written by the largest distribution partners | $ | $ 267.8 | $ 240.7 | $ 235 |
Insurance Operations - Unpaid L
Insurance Operations - Unpaid Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Gross reserve for unpaid losses and loss expenses, at beginning of year | $ 1,396,812 | $ 1,258,237 | $ 1,166,619 |
Ceded reserve for unpaid losses and loss expenses, at beginning of year | 185,295 | 201,156 | 176,651 |
Net reserve for unpaid losses and loss expenses, at beginning of year | 1,211,517 | 1,057,081 | 989,968 |
Incurred losses and loss expenses occurring in the: | |||
Current year | 482,989 | 439,847 | 373,423 |
Prior years | 3,154 | (5,017) | 20,318 |
Prior years attributable to adjusted premium | 14,882 | ||
Total net losses and loss adjustment expenses incurred | 501,025 | 434,830 | 393,741 |
Paid losses and loss expenses for claims occurring in the: | |||
Current year | 66,522 | 47,734 | 54,026 |
Prior years | 318,324 | 232,660 | 272,602 |
Total paid losses and loss expenses for claims | 384,846 | 280,394 | 326,628 |
Net reserves for unpaid losses and loss expenses, at end of period | 1,327,696 | 1,211,517 | 1,057,081 |
Ceded reserve for unpaid losses and loss expenses, at end of period | 193,952 | 185,295 | 201,156 |
Gross reserve for unpaid losses and loss expenses, at end of period | 1,521,648 | 1,396,812 | 1,258,237 |
Commercial Auto | |||
Incurred losses and loss expenses occurring in the: | |||
Prior years | (15,600) | 33,200 | |
General Liability | |||
Incurred losses and loss expenses occurring in the: | |||
Prior years | 11,300 | 16,500 | |
Workers' Compensation | |||
Incurred losses and loss expenses occurring in the: | |||
Prior years | (22,800) | (14,400) | $ (12,400) |
Primary Workers Compensation line | |||
Incurred losses and loss expenses occurring in the: | |||
Prior years | 6,200 | ||
Excess Workers Compensation line | |||
Incurred losses and loss expenses occurring in the: | |||
Prior years | 8,200 | ||
Commercial Multiple Peril | |||
Incurred losses and loss expenses occurring in the: | |||
Prior years | $ 16,400 | 12,200 | |
Commercial Multiple Peril | Media and Entertainment | |||
Incurred losses and loss expenses occurring in the: | |||
Prior years | 12,200 | ||
Marine Liability | |||
Incurred losses and loss expenses occurring in the: | |||
Prior years | $ (4,100) |
Insurance Operations - Incurred
Insurance Operations - Incurred and Paid Claims Development (Details) $ in Thousands | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2010USD ($) | |
Claims Development [Line Items] | ||||||||||
Claims incurred reported | $ 3,097,846 | |||||||||
IBNR | 906,120 | |||||||||
Claims paid | 1,829,355 | |||||||||
Incurred less paid | 1,268,491 | |||||||||
Reserves 2009 and prior | 3,154 | $ (5,017) | $ 20,318 | |||||||
Other | 14,240 | |||||||||
Total net reserve for unpaid losses and loss adjustment expenses | 1,327,696 | 1,211,517 | 1,057,081 | $ 989,968 | ||||||
ULAE reserves | 45,600 | |||||||||
Discounting of loss reserves | (47,400) | |||||||||
Retroactive reinsurance agreements | 12,300 | |||||||||
Allowance for uncollectible reinsurance | 500 | |||||||||
Other | 3,200 | |||||||||
Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 810,871 | |||||||||
IBNR | 123,551 | |||||||||
Claims paid | 606,684 | |||||||||
Incurred less paid | 204,187 | |||||||||
Reserves 2009 and prior | (15,600) | 33,200 | ||||||||
General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 940,083 | |||||||||
IBNR | 376,477 | |||||||||
Claims paid | 473,539 | |||||||||
Incurred less paid | 466,544 | |||||||||
Reserves 2009 and prior | 11,300 | 16,500 | ||||||||
Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 725,515 | |||||||||
IBNR | 303,187 | |||||||||
Claims paid | 277,963 | |||||||||
Incurred less paid | 447,552 | |||||||||
Reserves 2009 and prior | (22,800) | (14,400) | (12,400) | |||||||
Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 226,257 | |||||||||
IBNR | 69,653 | |||||||||
Claims paid | 129,593 | |||||||||
Incurred less paid | 96,664 | |||||||||
Reserves 2009 and prior | 16,400 | 12,200 | ||||||||
All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 395,120 | |||||||||
IBNR | 33,252 | |||||||||
Claims paid | 341,576 | |||||||||
Incurred less paid | 53,544 | |||||||||
Accident Years 2009 and Prior | ||||||||||
Claims Development [Line Items] | ||||||||||
Reserves 2009 and prior | 44,965 | |||||||||
Prior Years | ||||||||||
Claims Development [Line Items] | ||||||||||
IBNR | 15,481 | |||||||||
Prior Years | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
IBNR | 7,384 | |||||||||
Prior Years | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
IBNR | 5,590 | |||||||||
Prior Years | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
IBNR | 2,507 | |||||||||
Accident Year 2010 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 150,543 | 148,117 | 145,444 | 152,840 | $ 143,344 | $ 136,115 | $ 134,307 | $ 134,941 | $ 137,994 | $ 131,617 |
IBNR | $ 3,108 | |||||||||
Cumulative claim counts | item | 3,926 | |||||||||
Claims paid | $ 140,927 | 137,470 | 132,525 | 125,646 | 114,140 | 102,016 | 85,754 | 72,312 | 38,723 | 11,912 |
Accident Year 2010 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | $ 19,282 | 19,280 | 19,437 | 19,046 | 18,688 | 18,717 | 17,334 | 18,011 | 17,710 | 13,046 |
Cumulative claim counts | item | 874 | |||||||||
Claims paid | $ 19,162 | 19,138 | 19,098 | 18,074 | 17,829 | 17,275 | 13,723 | 12,346 | 7,866 | 3,105 |
Accident Year 2010 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 69,586 | 68,905 | 66,226 | 72,902 | 69,103 | 62,270 | 63,596 | 64,210 | 59,577 | 56,373 |
IBNR | $ 746 | |||||||||
Cumulative claim counts | item | 1,682 | |||||||||
Claims paid | $ 76,201 | 74,101 | 70,235 | 66,332 | 61,716 | 50,830 | 44,087 | 34,045 | 14,901 | 1,692 |
Accident Year 2010 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 30,457 | 28,597 | 28,135 | 28,260 | 25,825 | 25,751 | 23,643 | 26,970 | 23,206 | 24,965 |
IBNR | $ 2,361 | |||||||||
Cumulative claim counts | item | 78 | |||||||||
Claims paid | $ 11,908 | 10,695 | 9,706 | 7,830 | 6,165 | 4,427 | 2,907 | 1,633 | 180 | |
Accident Year 2010 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 31,218 | 31,335 | 31,647 | 32,631 | 29,727 | 29,377 | 29,735 | 25,750 | 37,501 | 37,233 |
IBNR | $ 1 | |||||||||
Cumulative claim counts | item | 1,292 | |||||||||
Claims paid | $ 33,656 | 33,536 | 33,485 | 33,410 | 28,429 | 29,484 | 25,038 | 24,288 | 15,776 | $ 7,115 |
Accident Year 2011 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 131,360 | 131,385 | 124,798 | 131,081 | 124,543 | 122,773 | 126,752 | 128,879 | 115,644 | |
IBNR | $ 3,772 | |||||||||
Cumulative claim counts | item | 4,419 | |||||||||
Claims paid | $ 111,247 | 109,007 | 105,584 | 98,411 | 88,243 | 76,731 | 65,103 | 51,006 | 14,796 | |
Accident Year 2011 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | $ 12,476 | 12,476 | 12,508 | 12,547 | 12,547 | 11,231 | 11,260 | 13,462 | 13,864 | |
Cumulative claim counts | item | 1,219 | |||||||||
Claims paid | $ 12,128 | 12,117 | 12,123 | 12,005 | 11,587 | 9,111 | 7,250 | 7,791 | 4,717 | |
Accident Year 2011 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 64,682 | 66,641 | 62,127 | 67,791 | 63,264 | 60,375 | 61,398 | 58,633 | 45,894 | |
IBNR | $ 1,254 | |||||||||
Cumulative claim counts | item | 1,532 | |||||||||
Claims paid | $ 57,932 | 56,659 | 54,250 | 50,136 | 44,166 | 37,344 | 30,123 | 18,912 | 5,009 | |
Accident Year 2011 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 23,750 | 21,247 | 18,986 | 21,943 | 19,489 | 21,411 | 23,576 | 22,186 | 28,987 | |
IBNR | $ 2,508 | |||||||||
Cumulative claim counts | item | 202 | |||||||||
Claims paid | $ 10,841 | 9,971 | 8,978 | 8,662 | 7,239 | 5,503 | 5,127 | 4,148 | 473 | |
Accident Year 2011 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 2 | 2 | 2 | 6 | 6 | 7 | 11 | |||
Claims paid | 2 | 2 | 2 | |||||||
Accident Year 2011 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 30,450 | 31,018 | 31,176 | 28,794 | 29,238 | 29,749 | 30,507 | 34,597 | 26,899 | |
IBNR | $ 10 | |||||||||
Cumulative claim counts | item | 1,466 | |||||||||
Claims paid | $ 30,344 | 30,259 | 30,231 | 27,608 | 25,251 | 24,773 | 22,603 | 20,155 | $ 4,597 | |
Accident Year 2012 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 158,523 | 159,120 | 156,355 | 165,889 | 165,015 | 157,985 | 157,477 | 137,380 | ||
IBNR | $ 6,491 | |||||||||
Cumulative claim counts | item | 6,622 | |||||||||
Claims paid | $ 139,793 | 136,909 | 130,200 | 119,374 | 98,960 | 73,249 | 48,276 | 16,619 | ||
Accident Year 2012 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 39,231 | 41,572 | 41,479 | 42,028 | 43,031 | 36,319 | 29,959 | 21,101 | ||
IBNR | $ 444 | |||||||||
Cumulative claim counts | item | 1,746 | |||||||||
Claims paid | $ 38,657 | 41,305 | 40,852 | 39,680 | 33,248 | 25,280 | 15,397 | 6,660 | ||
Accident Year 2012 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 50,509 | 48,096 | 46,312 | 45,771 | 42,401 | 38,288 | 43,677 | 42,685 | ||
IBNR | $ 1,998 | |||||||||
Cumulative claim counts | item | 1,483 | |||||||||
Claims paid | $ 45,509 | 40,754 | 36,521 | 32,585 | 24,257 | 14,751 | 8,844 | 945 | ||
Accident Year 2012 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 38,919 | 38,835 | 38,501 | 47,373 | 48,983 | 53,038 | 51,724 | 46,503 | ||
IBNR | $ 4,017 | |||||||||
Cumulative claim counts | item | 1,770 | |||||||||
Claims paid | $ 26,237 | 25,495 | 23,694 | 18,468 | 14,634 | 10,598 | 5,481 | 2,381 | ||
Accident Year 2012 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | $ 813 | 813 | 813 | 39 | 49 | 73 | 94 | 96 | ||
Cumulative claim counts | item | 5 | |||||||||
Claims paid | $ 813 | 813 | 813 | 2 | 1 | 1 | ||||
Accident Year 2012 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 29,051 | 29,803 | 29,250 | 30,678 | 30,551 | 30,266 | 32,022 | 26,995 | ||
IBNR | $ 32 | |||||||||
Cumulative claim counts | item | 1,618 | |||||||||
Claims paid | $ 28,577 | 28,542 | 28,319 | 28,639 | 26,821 | 22,619 | 18,554 | $ 6,634 | ||
Accident Year 2013 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 249,802 | 237,900 | 243,567 | 251,353 | 232,660 | 222,277 | 210,368 | |||
IBNR | $ 16,133 | |||||||||
Cumulative claim counts | item | 13,229 | |||||||||
Claims paid | $ 214,863 | 192,476 | 181,989 | 158,978 | 115,396 | 74,012 | 27,465 | |||
Accident Year 2013 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 81,422 | 72,265 | 76,768 | 77,570 | 63,764 | 50,752 | 47,191 | |||
IBNR | $ 993 | |||||||||
Cumulative claim counts | item | 6,224 | |||||||||
Claims paid | $ 79,066 | 71,010 | 72,906 | 64,073 | 43,403 | 26,773 | 13,015 | |||
Accident Year 2013 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 69,565 | 61,796 | 60,613 | 70,459 | 62,618 | 61,785 | 48,466 | |||
IBNR | $ 7,755 | |||||||||
Cumulative claim counts | item | 2,608 | |||||||||
Claims paid | $ 66,439 | 55,148 | 46,821 | 36,493 | 22,152 | 10,941 | 1,930 | |||
Accident Year 2013 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 64,727 | 69,729 | 71,532 | 68,109 | 70,939 | 71,683 | 76,844 | |||
IBNR | $ 7,141 | |||||||||
Cumulative claim counts | item | 2,694 | |||||||||
Claims paid | $ 35,793 | 32,962 | 29,036 | 26,088 | 20,520 | 12,579 | 2,639 | |||
Accident Year 2013 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 8,198 | 8,250 | 8,226 | 1,442 | 1,051 | 1,065 | 968 | |||
IBNR | $ 19 | |||||||||
Cumulative claim counts | item | 54 | |||||||||
Claims paid | $ 8,157 | 8,149 | 8,083 | 754 | 312 | 192 | 43 | |||
Accident Year 2013 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 25,890 | 25,859 | 26,428 | 33,773 | 34,287 | 36,992 | 36,900 | |||
IBNR | $ 225 | |||||||||
Cumulative claim counts | item | 1,649 | |||||||||
Claims paid | $ 25,408 | 25,206 | 25,144 | 31,569 | 29,009 | 23,526 | $ 9,838 | |||
Accident Year 2014 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 356,733 | 342,788 | 333,865 | 323,792 | 312,987 | 286,842 | ||||
IBNR | $ 30,978 | |||||||||
Cumulative claim counts | item | 16,333 | |||||||||
Claims paid | $ 280,933 | 250,928 | 217,986 | 166,907 | 111,919 | 44,738 | ||||
Accident Year 2014 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 113,790 | 113,747 | 112,157 | 105,528 | 95,283 | 74,185 | ||||
IBNR | $ 843 | |||||||||
Cumulative claim counts | item | 8,231 | |||||||||
Claims paid | $ 110,883 | 108,102 | 96,385 | 74,431 | 52,048 | 21,692 | ||||
Accident Year 2014 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 114,976 | 104,281 | 93,468 | 78,801 | 77,255 | 70,878 | ||||
IBNR | $ 15,352 | |||||||||
Cumulative claim counts | item | 3,093 | |||||||||
Claims paid | $ 73,491 | 53,712 | 41,079 | 28,581 | 14,032 | 5,456 | ||||
Accident Year 2014 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 67,784 | 69,886 | 74,134 | 83,543 | 81,628 | 88,181 | ||||
IBNR | $ 12,581 | |||||||||
Cumulative claim counts | item | 2,679 | |||||||||
Claims paid | $ 42,423 | 39,846 | 35,131 | 24,411 | 14,901 | 4,644 | ||||
Accident Year 2014 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 30,172 | 27,126 | 25,915 | 16,448 | 15,884 | 13,037 | ||||
IBNR | $ 1,326 | |||||||||
Cumulative claim counts | item | 614 | |||||||||
Claims paid | $ 26,366 | 22,880 | 20,545 | 7,358 | 4,271 | 1,795 | ||||
Accident Year 2014 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 30,011 | 27,749 | 28,192 | 39,473 | 42,938 | 40,562 | ||||
IBNR | $ 876 | |||||||||
Cumulative claim counts | item | 1,716 | |||||||||
Claims paid | $ 27,770 | 26,388 | 24,846 | 32,126 | 26,667 | $ 11,150 | ||||
Accident Year 2015 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 430,942 | 395,751 | 407,427 | 407,279 | 384,269 | |||||
IBNR | $ 44,665 | |||||||||
Cumulative claim counts | item | 20,869 | |||||||||
Claims paid | $ 331,748 | 281,637 | 234,756 | 159,708 | 75,043 | |||||
Accident Year 2015 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 155,266 | 146,757 | 152,268 | 139,415 | 120,137 | |||||
IBNR | $ 1,981 | |||||||||
Cumulative claim counts | item | 11,153 | |||||||||
Claims paid | $ 142,806 | 126,831 | 107,063 | 74,524 | 37,964 | |||||
Accident Year 2015 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 93,808 | 80,514 | 78,163 | 80,411 | 80,225 | |||||
IBNR | $ 21,362 | |||||||||
Cumulative claim counts | item | 3,007 | |||||||||
Claims paid | $ 61,168 | 39,407 | 25,931 | 14,720 | 5,404 | |||||
Accident Year 2015 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 87,570 | 82,212 | 89,383 | 101,410 | 101,762 | |||||
IBNR | $ 14,957 | |||||||||
Cumulative claim counts | item | 3,881 | |||||||||
Claims paid | $ 38,061 | 33,543 | 27,423 | 18,434 | 6,504 | |||||
Accident Year 2015 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 24,144 | 18,345 | 17,952 | 27,542 | 27,876 | |||||
IBNR | $ 4,825 | |||||||||
Cumulative claim counts | item | 1,015 | |||||||||
Claims paid | $ 20,676 | 14,293 | 8,949 | 14,751 | 6,879 | |||||
Accident Year 2015 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 70,154 | 67,924 | 69,660 | 58,501 | 54,269 | |||||
IBNR | $ 1,540 | |||||||||
Cumulative claim counts | item | 1,813 | |||||||||
Claims paid | $ 69,037 | 67,563 | 65,390 | 37,279 | $ 18,292 | |||||
Accident Year 2016 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 416,266 | 406,204 | 423,538 | 390,430 | ||||||
IBNR | $ 93,163 | |||||||||
Cumulative claim counts | item | 20,049 | |||||||||
Claims paid | $ 266,496 | 204,589 | 150,198 | 78,271 | ||||||
Accident Year 2016 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 124,166 | 119,931 | 124,760 | 114,568 | ||||||
IBNR | $ 6,229 | |||||||||
Cumulative claim counts | item | 9,642 | |||||||||
Claims paid | $ 102,003 | 83,161 | 63,123 | 39,580 | ||||||
Accident Year 2016 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 91,228 | 92,401 | 101,479 | 93,737 | ||||||
IBNR | $ 28,786 | |||||||||
Cumulative claim counts | item | 2,868 | |||||||||
Claims paid | $ 47,333 | 25,223 | 13,873 | 3,547 | ||||||
Accident Year 2016 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 102,716 | 103,382 | 109,623 | 99,292 | ||||||
IBNR | $ 47,500 | |||||||||
Cumulative claim counts | item | 4,358 | |||||||||
Claims paid | $ 43,171 | 35,385 | 24,557 | 10,891 | ||||||
Accident Year 2016 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 44,758 | 34,883 | 30,379 | 34,010 | ||||||
IBNR | $ 8,295 | |||||||||
Cumulative claim counts | item | 1,190 | |||||||||
Claims paid | $ 27,870 | 16,715 | 7,028 | 4,974 | ||||||
Accident Year 2016 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 53,398 | 55,607 | 57,296 | 48,824 | ||||||
IBNR | $ 2,353 | |||||||||
Cumulative claim counts | item | 1,991 | |||||||||
Claims paid | $ 46,119 | 44,104 | 41,618 | $ 19,279 | ||||||
Accident Year 2017 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 339,505 | 361,299 | 354,948 | |||||||
IBNR | $ 127,760 | |||||||||
Cumulative claim counts | item | 18,582 | |||||||||
Claims paid | $ 163,937 | 116,204 | 54,026 | |||||||
Accident Year 2017 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 71,068 | 79,156 | 81,986 | |||||||
IBNR | $ 12,343 | |||||||||
Cumulative claim counts | item | 7,061 | |||||||||
Claims paid | $ 47,199 | 34,659 | 19,950 | |||||||
Accident Year 2017 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 94,554 | 100,306 | 99,845 | |||||||
IBNR | $ 50,712 | |||||||||
Cumulative claim counts | item | 2,921 | |||||||||
Claims paid | $ 26,354 | 11,279 | 2,596 | |||||||
Accident Year 2017 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 93,134 | 101,691 | 102,250 | |||||||
IBNR | $ 52,781 | |||||||||
Cumulative claim counts | item | 4,678 | |||||||||
Claims paid | $ 30,776 | 22,462 | 8,631 | |||||||
Accident Year 2017 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 44,260 | 44,044 | 37,760 | |||||||
IBNR | $ 8,921 | |||||||||
Cumulative claim counts | item | 1,431 | |||||||||
Claims paid | $ 27,816 | 19,733 | 7,270 | |||||||
Accident Year 2017 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 36,489 | 36,102 | 33,108 | |||||||
IBNR | $ 3,003 | |||||||||
Cumulative claim counts | item | 2,491 | |||||||||
Claims paid | $ 31,792 | 28,070 | $ 15,580 | |||||||
Accident Year 2018 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 406,199 | 422,104 | ||||||||
IBNR | $ 233,890 | |||||||||
Cumulative claim counts | item | 18,720 | |||||||||
Claims paid | $ 112,889 | 45,012 | ||||||||
Accident Year 2018 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 78,777 | 87,993 | ||||||||
IBNR | $ 28,210 | |||||||||
Cumulative claim counts | item | 7,146 | |||||||||
Claims paid | $ 32,698 | 16,709 | ||||||||
Accident Year 2018 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 137,525 | 142,486 | ||||||||
IBNR | $ 101,954 | |||||||||
Cumulative claim counts | item | 2,949 | |||||||||
Claims paid | $ 15,625 | 2,223 | ||||||||
Accident Year 2018 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 118,973 | 116,278 | ||||||||
IBNR | $ 77,694 | |||||||||
Cumulative claim counts | item | 5,125 | |||||||||
Claims paid | $ 29,008 | 9,563 | ||||||||
Accident Year 2018 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 37,015 | 39,507 | ||||||||
IBNR | $ 20,432 | |||||||||
Cumulative claim counts | item | 1,184 | |||||||||
Claims paid | $ 11,953 | 5,323 | ||||||||
Accident Year 2018 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 33,909 | 35,839 | ||||||||
IBNR | $ 5,600 | |||||||||
Cumulative claim counts | item | 2,316 | |||||||||
Claims paid | $ 23,605 | $ 11,194 | ||||||||
Accident Year 2019 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 457,973 | |||||||||
IBNR | $ 330,679 | |||||||||
Cumulative claim counts | item | 17,591 | |||||||||
Claims paid | $ 66,522 | |||||||||
Accident Year 2019 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 115,393 | |||||||||
IBNR | $ 72,508 | |||||||||
Cumulative claim counts | item | 8,141 | |||||||||
Claims paid | $ 22,082 | |||||||||
Accident Year 2019 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 153,650 | |||||||||
IBNR | $ 139,174 | |||||||||
Cumulative claim counts | item | 2,309 | |||||||||
Claims paid | $ 3,487 | |||||||||
Accident Year 2019 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 97,485 | |||||||||
IBNR | $ 76,057 | |||||||||
Cumulative claim counts | item | 4,468 | |||||||||
Claims paid | $ 9,745 | |||||||||
Accident Year 2019 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 36,895 | |||||||||
IBNR | $ 25,835 | |||||||||
Cumulative claim counts | item | 935 | |||||||||
Claims paid | $ 5,940 | |||||||||
Accident Year 2019 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 54,550 | |||||||||
IBNR | $ 17,105 | |||||||||
Cumulative claim counts | item | 1,738 | |||||||||
Claims paid | $ 25,268 |
Insurance Operations - Historic
Insurance Operations - Historical Average Annual Percentage Payout of Incurred Claims, Net of Reinsurance (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 14.00% |
Year 2 | 19.00% |
Year 3 | 15.00% |
Year 4 | 13.00% |
Year 5 | 10.00% |
Year 6 | 7.00% |
Year 7 | 7.00% |
Year 8 | 3.00% |
Year 9 | 3.00% |
Year 10 | 2.00% |
Commercial Auto | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 23.00% |
Year 2 | 22.00% |
Year 3 | 19.00% |
Year 4 | 17.00% |
Year 5 | 12.00% |
Year 6 | 1.00% |
Year 7 | 6.00% |
Year 8 | $ (2) |
General Liability | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 3.00% |
Year 2 | 12.00% |
Year 3 | 15.00% |
Year 4 | 16.00% |
Year 5 | 14.00% |
Year 6 | 13.00% |
Year 7 | 10.00% |
Year 8 | 6.00% |
Year 9 | 4.00% |
Year 10 | 3.00% |
Workers' Compensation | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 8.00% |
Year 2 | 14.00% |
Year 3 | 10.00% |
Year 4 | 9.00% |
Year 5 | 6.00% |
Year 6 | 7.00% |
Year 7 | 4.00% |
Year 8 | 4.00% |
Year 9 | 3.00% |
Year 10 | 4.00% |
Commercial Multiple Peril | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 14.00% |
Year 2 | 17.00% |
Year 3 | 10.00% |
Year 4 | 28.00% |
Year 5 | 25.00% |
Year 6 | 11.00% |
All Other Lines | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 33.00% |
Year 2 | 39.00% |
Year 3 | 20.00% |
Year 4 | 2.00% |
Year 5 | 2.00% |
Year 6 | 2.00% |
Year 7 | 7.00% |
Insurance Operations - Insuranc
Insurance Operations - Insurance Pool (Details) - Information pertaining to reinsurance for umbrella casualty insurance and ocean marine liability insurance. | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Minimum | |
Reinsurance Retention Policy [Line Items] | |
Net retention per occurrence after applicable reinsurance | $ 250,000 |
Effective pool participation (as a percent) | 11.00% |
Maximum | |
Reinsurance Retention Policy [Line Items] | |
Net retention per occurrence after applicable reinsurance | $ 2,000,000 |
Effective pool participation (as a percent) | 59.00% |
Insurance Operations - Asbestos
Insurance Operations - Asbestos and Environmental Related Losses and Salvage and Subrogation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Gross | ||
Balance at beginning of year | $ 14,262 | $ 15,628 |
Incurred losses and loss adjustment expense | 430 | 30 |
Payments for losses and loss adjustment expenses | 1,882 | 1,396 |
Balance at end of year | 12,810 | 14,262 |
Ceded | ||
Balance at beginning of year | 9,860 | 11,116 |
Incurred losses and loss adjustment expense | 66 | 24 |
Payments for losses and loss adjustment expenses | 1,564 | 1,280 |
Balance at end of year | 8,362 | 9,860 |
Net | ||
Balance at beginning of year | 4,402 | 4,512 |
Incurred losses and loss adjustment expense | 364 | 6 |
Payments for losses and loss adjustment expenses | 318 | 116 |
Balance at end of year | 4,448 | 4,402 |
Salvage and Subrogation | ||
Estimated salvage and subrogation recoverable | 27,500 | 27,400 |
Liability Related To Assumed Asbestos And Environmental Reserves On Retroactive Basis From Prior Members Of Pool [Member] | ||
Net | ||
Balance at beginning of year | 8,700 | |
Balance at end of year | $ 8,400 | $ 8,700 |
Insurance Operations - Deferred
Insurance Operations - Deferred Policy Acquisition Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | |||
Beginning balance | $ 93,613 | $ 60,759 | |
Acquisition costs deferred | 189,970 | 204,283 | |
Acquisition costs expensed | (184,771) | (171,429) | $ (126,023) |
Ending balance | $ 98,812 | $ 93,613 | $ 60,759 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | |||
Loss reserves | $ 13,289 | $ 11,342 | |
Loss reserves transitional adjustment | 6,104 | 6,954 | |
Unearned premiums | 16,785 | 14,985 | |
Net operating loss carry forwards – state and local | 17,008 | 16,373 | |
Net operating loss carry forwards – federal | 357 | 16,771 | |
Capital loss carry forwards – federal | 1,519 | 2,577 | |
Bad debt reserve | 3,229 | 3,182 | |
Impairments | 517 | 556 | |
Deferred compensation | 5,659 | 5,613 | |
Amortization of intangibles | 695 | 813 | |
Limited partnership income | 2,566 | ||
Unrealized depreciation of investments | 7,446 | ||
Other | 3,151 | 2,211 | |
Total deferred tax assets | 70,879 | 88,823 | |
Less valuation allowance | (17,604) | (16,962) | $ (6,511) |
Deferred tax assets, net of allowance | 53,275 | 71,861 | |
Deferred tax liabilities: | |||
Deferred policy acquisition costs | 20,693 | 19,634 | |
Loss reserve transitional adjustment | 4,578 | 6,085 | |
Fair value adjustments | 3,628 | 3,635 | |
Unrealized appreciation of investments | 8,669 | ||
Limited partnership income | 422 | ||
Other | 10,904 | 8,846 | |
Total deferred tax liabilities | 48,472 | 38,622 | |
Net deferred income taxes | $ 4,803 | $ 33,239 |
Income Taxes - Tax Reform (Deta
Income Taxes - Tax Reform (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2018 |
Income Taxes | ||||
Statutory U.S tax rate | 21.00% | 35.00% | ||
Charge to income resulting from revaluation of deferred tax assets and liabilities due to Tax Reform | $ 25,108 | |||
Deferred tax asset due to Tax Reform | $ 6,104 | $ 6,954 | ||
Period over which transitional deferred tax liability related to tax reform will be amortized | 8 years | |||
Deferred tax liability due to Tax Reform | $ 4,578 | $ 6,085 |
Income Taxes - Net Operating Lo
Income Taxes - Net Operating Loss Carryforwards (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Net operating loss carryforwards | ||
Realized capital loss carryforward | $ 1,500 | $ 2,600 |
U.S. | ||
Net operating loss carryforwards | ||
Net Operating Losses carried forward | 400 | 16,800 |
Tax benefit related to net operating losses | 357 | |
U.S. | 2010 | ||
Net operating loss carryforwards | ||
Tax benefit related to net operating losses | $ 357 | |
Net Operating Loss expiration | Dec. 31, 2030 | |
State and Local | ||
Net operating loss carryforwards | ||
Net Operating Losses carried forward | $ 17,000 | $ 16,300 |
Income Taxes - Change in Valuat
Income Taxes - Change in Valuation Allowance Account (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation Of Deferred Tax Assets, Valuation Allowance [Roll Forward] | ||
Balance, beginning of year | $ 16,962 | $ 6,511 |
Change in valuation allowance | 642 | 10,451 |
Balance, end of year | 17,604 | $ 16,962 |
Valuation allowance for uncertain deferred tax assets attributable to U.S. federal and state NOLs | $ 17,600 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance, beginning of year | $ 528 | $ 483 |
Additions for tax positions of prior years | 260 | 45 |
Reductions for tax positions of prior years | (350) | |
Balance, end of year | 438 | $ 528 |
Decrease in tax position | 100 | |
Favorable tax positions that impact the effective tax rate | $ 200 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | |||
Expected tax expense at statutory rates in taxable jurisdictions | $ 12,103 | $ 13,896 | $ 11,384 |
Tax-exempt interest | (46) | (42) | |
State taxes | (629) | (10,746) | 3,302 |
Valuation allowance | 642 | 10,451 | (2,819) |
Effect of provision to tax return filing adjustments | 42 | 671 | |
Effect of Tax Reform | 25,108 | ||
Other | (21) | (166) | 629 |
Total income tax expense | $ 12,137 | $ 13,389 | $ 38,233 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 15, 2019 | Jul. 25, 2019 | Jan. 01, 2018 | Nov. 23, 2010 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Line Items] | |||||||
Effective income tax rate | 21.00% | ||||||
Statutory income tax rate | 21.00% | 35.00% | |||||
Income taxes paid or (refund received) | $ (780) | $ 135 | $ 227 | ||||
Income tax recoverable included in other assets | $ 200 | 800 | 200 | ||||
Ownership percentage | 50.00% | ||||||
Ownership Changes Among Shareholders | 5.00% | ||||||
Shares of the Company issued as merger consideration | 38,851,369 | ||||||
Conversion ratio of PGHL shares to Company shares | 6.46 | ||||||
Percentage of equity interests of the Company issued as merger consideration | 100.00% | ||||||
Percentage Of Outstanding Common Stock Retained | 77.50% | 80.30% | |||||
Shares Sold By Principal Stockholders In Offering | 1,178,570 | ||||||
Valuation allowance | $ 17,604 | 16,962 | 6,511 | ||||
Insurance Operations, U.K. | Discontinued operation | |||||||
Income Tax Disclosure [Line Items] | |||||||
Income taxes paid or (refund received) | $ 0 | $ 0 | |||||
Gain (loss) recognized | $ 0 | ||||||
NYMAGIC, Inc | |||||||
Income Tax Disclosure [Line Items] | |||||||
Outstanding common stock acquired (as a percent) | 100.00% | ||||||
Cash price per share | $ 25.75 | ||||||
Cash price | $ 231,900 | ||||||
Annual limit on utilization of Net Operating Losses due to Section 382 | 9,000 | ||||||
Valuation allowance | $ 3,100 |
Statutory Financial Informati_3
Statutory Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statutory Financial Information | |||
Maximum dividend that can be paid without the prior approval from the New York State Department of Financial Services | $ 54,700 | ||
Combined statutory net income | 55,681 | $ 33,147 | $ 26,303 |
Combined statutory surplus | $ 568,777 | $ 473,575 | $ 433,946 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Aug. 08, 2019 | Mar. 15, 2019 | Jan. 31, 2015 | Nov. 30, 2013 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 14, 2019 | Jan. 31, 2018 |
Debt | |||||||||
Number of days before the maturity of the senior notes due November 2020 that the credit facility matures | 91 days | ||||||||
Number of days before the maturity of the senior notes due November 2020, as amended or replaced, that the credit facility matures | 91 days | ||||||||
Repayment of outstanding debt | $ 18,000 | ||||||||
Available borrowing capacity | 50,000 | ||||||||
Interest expense | 12,795 | $ 12,377 | $ 12,125 | ||||||
Amortization of debt issuance costs | $ 300 | $ 300 | $ 300 | ||||||
Revolving facility | |||||||||
Debt | |||||||||
Face amount of the debt | $ 25,000 | ||||||||
Interest rate (as a percent) | 4.20% | ||||||||
Maximum borrowing capacity | $ 50,000 | $ 25,000 | |||||||
Repayment of outstanding debt | $ 18,000 | ||||||||
7.5% Senior Unsecured Notes due November 2020 | |||||||||
Debt | |||||||||
Face amount of the debt | $ 140,000 | ||||||||
Interest rate (as a percent) | 7.50% | ||||||||
Debt issuance costs incurred | $ 2,100 | ||||||||
6.5% Senior Notes due November 2020 | |||||||||
Debt | |||||||||
Face amount of the debt | $ 25,000 | ||||||||
Interest rate (as a percent) | 6.50% | ||||||||
Debt issuance costs incurred | $ 200 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Minimum Rental Payments | |
2020 | $ 4,243 |
2021 | 4,162 |
2022 | 1,080 |
2023 | 585 |
2024 | 585 |
2025 | 342 |
Total | 10,997 |
Sublease income | |
2020 | 631 |
Total | $ 631 |
Commitments and Contingencies -
Commitments and Contingencies - Rent Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other commitments | |||
Rent expense | $ 3,300 | $ 3,100 | $ 3,100 |
Lease liability assumed | 10,997 | ||
Discontinued operations | UK Office Lease | |||
Other commitments | |||
Rent expense | 500 | 500 | 500 |
Sublease income | $ 600 | $ 100 | $ 0 |
Commitments and Contingencies_3
Commitments and Contingencies - Fiduciary Funds (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Fiduciary and pools’ underwriting accounts | ||
Assets held on behalf of unaffiliated pool members | $ 10,522 | $ 11,501 |
Escrow bond arrangements | 1,014 | 951 |
Total | 11,536 | $ 12,452 |
Unfunded commitments related to a limited partnership and a fixed income security | $ 163,700 | |
Number of unaffiliated pool members | item | 2 |
Share-Based Compensation - 2019
Share-Based Compensation - 2019 Equity Incentive Plan (Details) - USD ($) $ in Millions | Nov. 15, 2019 | Jul. 25, 2019 | Nov. 15, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 24, 2019 |
Share-based Compensation | |||||||
Share-based compensation expense | $ 8.6 | $ 0.9 | $ 1.5 | ||||
Tax benefit, recognized on share based compensation expense | $ 1.8 | $ 0.2 | $ 0.5 | ||||
Restricted stock units | |||||||
Share-based Compensation | |||||||
Restricted stock unit awards granted | 1,732,869 | 13,992 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Subject to Conversion, Number | 906,182 | 548,292 | 517,446 | ||||
2019 Equity Incentive Plan | |||||||
Share-based Compensation | |||||||
Number of common stock authorized | 4,500,000 | ||||||
Number of common shares reserved for issuance | 4,500,000 | ||||||
2019 Equity Incentive Plan | Long-term Equity Incentive Plan Awards (RSUs) | |||||||
Share-based Compensation | |||||||
Restricted stock unit awards granted | 181,118 | ||||||
Grant date fair value | $ 2.5 | ||||||
2019 Equity Incentive Plan | LTIP Time Vesting RSUs | |||||||
Share-based Compensation | |||||||
Restricted stock unit awards granted | 90,559 | ||||||
2019 Equity Incentive Plan | LTIP Time Vesting RSUs | At One Year | |||||||
Share-based Compensation | |||||||
Vesting percentage | 33.33% | ||||||
2019 Equity Incentive Plan | LTIP Time Vesting RSUs | At Two Years | |||||||
Share-based Compensation | |||||||
Vesting percentage | 33.33% | ||||||
2019 Equity Incentive Plan | LTIP Time Vesting RSUs | At Three Years | |||||||
Share-based Compensation | |||||||
Vesting percentage | 33.33% | ||||||
2019 Equity Incentive Plan | LTIP Performance Vesting RSUs | |||||||
Share-based Compensation | |||||||
Restricted stock unit awards granted | 90,559 | ||||||
Cliff vesting period | 3 years | ||||||
2019 Equity Incentive Plan | Supplemental RSUs | |||||||
Share-based Compensation | |||||||
Restricted stock unit awards granted | 1,267,912 | ||||||
Percentage of time-vesting awards | 100.00% | ||||||
Grant date fair value | $ 17.8 | ||||||
2019 Equity Incentive Plan | Supplemental RSUs | At Grant Date | |||||||
Share-based Compensation | |||||||
Vesting percentage | 25.00% | ||||||
2019 Equity Incentive Plan | Supplemental RSUs | At Two Years | |||||||
Share-based Compensation | |||||||
Vesting percentage | 25.00% | ||||||
2019 Equity Incentive Plan | Supplemental RSUs | At Three Years | |||||||
Share-based Compensation | |||||||
Vesting percentage | 50.00% | ||||||
2019 Equity Incentive Plan | Founders Grant RSUs | |||||||
Share-based Compensation | |||||||
Restricted stock unit awards granted | 250,000 | ||||||
Grant date fair value | $ 3.5 | ||||||
Cliff vesting period | 3 years | ||||||
2019 Equity Incentive Plan | Director RSUs | |||||||
Share-based Compensation | |||||||
Restricted stock unit awards granted | 7,440 | 26,399 | 33,839 | ||||
Grant date fair value | $ 0.5 | ||||||
2010 Equity Incentive Plan | |||||||
Share-based Compensation | |||||||
Share-based compensation expense | $ 0.1 | ||||||
2010 Equity Incentive Plan | Restricted stock units | |||||||
Share-based Compensation | |||||||
Number of RSUs converted into RSUs based on common stock upon merger | 668,170 |
Share-Based Compensation - 20_2
Share-Based Compensation - 2019 Plan Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Unrecognized Share-based Compensation | ||
Unrecognized stock-based compensation expense | $ 14.5 | |
Expected weighted average recognition period | 2 years 4 months 24 days | |
Restricted stock units | ||
Restricted Stock Units | ||
Unvested outstanding at beginning of period | 55,264 | 180,647 |
Granted | 1,732,869 | 13,992 |
Vested | (406,081) | (136,855) |
Forfeited | (92,656) | (2,520) |
Unvested outstanding at end of period | 1,289,396 | 55,264 |
Weighted Average Grant Date Fair Value | ||
Non vested outstanding at beginning of period | $ 11.09 | $ 11.25 |
Granted | 14 | 18.67 |
Vested | 13.61 | 11.30 |
Forfeited | 14 | 11.09 |
Non vested outstanding at end of period | $ 14 | $ 11.09 |
Share-Based Compensation - 20_3
Share-Based Compensation - 2019 Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Jul. 24, 2019 | |
Employee stock purchase plan | ||
Expense recognized related to plan | $ 0 | |
ESPP | ||
Employee stock purchase plan | ||
Number of common shares reserved for sale | 1,000,000 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
401(K) Plan | |||
Plan expense | $ 1.8 | $ 2.1 | $ 1.6 |
Eligible Compensation, 4% | |||
401(K) Plan | |||
Matching contribution, percent | 100.00% | ||
Eligible compensation, percent | 4.00% | ||
Eligible Compensation, 2% | |||
401(K) Plan | |||
Matching contribution, percent | 50.00% | ||
Eligible compensation, percent | 2.00% |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment information | |||||||||||
Number of reportable segments | segment | 1 | ||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 249,945 | $ 227,196 | $ 235,032 | $ 255,838 | $ 221,841 | $ 201,296 | $ 222,555 | $ 249,420 | $ 968,011 | $ 895,112 | $ 836,334 |
Gross written premiums, percent | 100.00% | 100.00% | 100.00% | ||||||||
Commercial Auto | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 205,303 | $ 151,612 | $ 124,688 | ||||||||
Gross written premiums, percent | 21.20% | 16.90% | 14.90% | ||||||||
General Liability | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 335,197 | $ 277,948 | $ 272,660 | ||||||||
Gross written premiums, percent | 34.60% | 31.10% | 32.60% | ||||||||
Workers' Compensation | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 179,432 | $ 246,302 | $ 235,668 | ||||||||
Gross written premiums, percent | 18.60% | 27.50% | 28.20% | ||||||||
Commercial Multiple Peril | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 82,126 | $ 67,351 | $ 73,859 | ||||||||
Gross written premiums, percent | 8.50% | 7.50% | 8.80% | ||||||||
All Other Lines | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 165,953 | $ 151,899 | $ 129,459 | ||||||||
Gross written premiums, percent | 17.10% | 17.00% | 15.50% | ||||||||
Customer Segment | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 899,852 | $ 770,893 | $ 713,349 | ||||||||
Gross written premiums, percent | 93.00% | 86.10% | 85.30% | ||||||||
Construction | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 117,918 | $ 101,946 | $ 73,378 | ||||||||
Gross written premiums, percent | 12.20% | 11.40% | 8.80% | ||||||||
Consumer Services | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 133,682 | $ 107,086 | $ 94,384 | ||||||||
Gross written premiums, percent | 13.80% | 12.00% | 11.30% | ||||||||
Marine and Energy | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 94,071 | $ 82,978 | $ 79,238 | ||||||||
Gross written premiums, percent | 9.70% | 9.30% | 9.50% | ||||||||
Media and Entertainment | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 124,950 | $ 119,926 | $ 114,442 | ||||||||
Gross written premiums, percent | 12.90% | 13.40% | 13.70% | ||||||||
Professional Services | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 119,326 | $ 110,546 | $ 112,575 | ||||||||
Gross written premiums, percent | 12.40% | 12.30% | 13.40% | ||||||||
Real Estate | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 167,635 | $ 132,652 | $ 132,029 | ||||||||
Gross written premiums, percent | 17.30% | 14.80% | 15.80% | ||||||||
Sports | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 30,079 | $ 23,590 | $ 22,224 | ||||||||
Gross written premiums, percent | 3.10% | 2.60% | 2.60% | ||||||||
Transportation | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 112,191 | $ 92,169 | $ 85,079 | ||||||||
Gross written premiums, percent | 11.60% | 10.30% | 10.20% | ||||||||
Other | |||||||||||
Summary of the Company’s gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 68,159 | $ 124,219 | $ 122,985 | ||||||||
Gross written premiums, percent | 7.00% | 13.90% | 14.70% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Basic EPS- Income: | |||||||||||
Net income (loss) available to common stockholders, continuing operations | $ 45,494 | $ 53,729 | $ (6,904) | ||||||||
Net income (loss) available to common stockholders, discontinued operations | $ (6,604) | $ 814 | $ (37,089) | ||||||||
Basic EPS - Shares: | |||||||||||
Shares outstanding, basic (in shares) | 41,095 | 38,753 | 37,555 | ||||||||
Basic EPS - Per Share Amount: | |||||||||||
Net income (loss) from continuing operations | $ 0.34 | $ 0.20 | $ 0.22 | $ 0.35 | $ 0.35 | $ 0.40 | $ 0.38 | $ 0.26 | $ 1.11 | $ 1.39 | $ (0.18) |
Net Income available to common stockholders, discontinued operations (in dollars per share) | $ (0.16) | $ 0.02 | $ (0.99) | ||||||||
Effect of dilutive securities - Shares: | |||||||||||
Stock compensation plans (in shares) | 428 | 688 | |||||||||
Diluted EPS - Income | |||||||||||
Diluted EPS, continuing operations | $ 45,494 | $ 53,729 | $ (6,904) | ||||||||
Diluted EPS, discontinued operations | $ (6,604) | $ 814 | $ (37,089) | ||||||||
Diluted EPS - Shares | |||||||||||
Shares outstanding, diluted (in shares) | 41,523 | 39,441 | 37,555 | ||||||||
Diluted EPS - Per Share Amount | |||||||||||
Diluted earnings per share - continuing operations (in dollars per share) | $ 0.33 | $ 0.19 | $ 0.22 | $ 0.35 | $ 0.34 | $ 0.40 | $ 0.37 | $ 0.25 | $ 1.10 | $ 1.36 | $ (0.18) |
Diluted EPS, discontinued operations (in dollars per share) | $ (0.16) | $ 0.02 | $ (0.99) |
Quarterly Financial Informati_3
Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information | |||||||||||
Gross written premiums | $ 249,945 | $ 227,196 | $ 235,032 | $ 255,838 | $ 221,841 | $ 201,296 | $ 222,555 | $ 249,420 | $ 968,011 | $ 895,112 | $ 836,334 |
Revenues | 225,105 | 219,870 | 220,112 | 212,972 | 203,575 | 201,726 | 199,525 | 181,046 | 878,059 | 785,872 | 651,039 |
Net income (loss) from continuing operations | 14,742 | 8,361 | 8,696 | 13,695 | 13,464 | 15,603 | 14,652 | 10,010 | 45,494 | 53,729 | (6,904) |
Net income (loss) | $ 8,520 | $ 8,312 | $ 8,618 | $ 13,440 | $ 14,120 | $ 15,174 | $ 14,454 | $ 10,795 | $ 38,890 | $ 54,543 | $ (43,993) |
Basic earnings per share - continuing operations (in dollars per share) | $ 0.34 | $ 0.20 | $ 0.22 | $ 0.35 | $ 0.35 | $ 0.40 | $ 0.38 | $ 0.26 | $ 1.11 | $ 1.39 | $ (0.18) |
Diluted earnings per share - continuing operations (in dollars per share) | 0.33 | 0.19 | 0.22 | 0.35 | 0.34 | 0.40 | 0.37 | 0.25 | 1.10 | 1.36 | (0.18) |
Basic earnings per share (in dollars per share) | 0.19 | 0.19 | 0.22 | 0.35 | 0.36 | 0.39 | 0.37 | 0.28 | 0.95 | 1.41 | (1.17) |
Diluted earnings per share (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.22 | $ 0.34 | $ 0.36 | $ 0.38 | $ 0.36 | $ 0.27 | $ 0.94 | $ 1.38 | $ (1.17) |
Schedule II - Balance Sheets (D
Schedule II - Balance Sheets (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2019 | Jul. 24, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | |||||
Cash and cash equivalents | $ 17,284 | $ 22,279 | |||
Other assets | 29,537 | 57,653 | |||
Total assets | 2,877,234 | 2,577,106 | |||
Liabilities | |||||
Notes payable | 164,693 | 182,355 | |||
Other liabilities | 56,438 | 73,474 | |||
Total liabilities | 2,334,203 | 2,187,276 | |||
Stockholders’ equity | |||||
Preferred stock, $0.01 par value; 50,000,000 shares authorized; no shares issued or outstanding | |||||
Common stock, $0.01 par value; 200,000,000 shares authorized; 43,071,186 and 38,864,289 shares issued, 43,058,266 and 38,851,369 shares outstanding in 2019 and 2018, respectively | 431 | 389 | |||
Paid-in capital | 661,761 | 607,260 | |||
Accumulated other comprehensive income (loss) | 37,453 | (22,315) | $ 19,297 | $ 29,482 | |
Retained deficit | (156,414) | (195,304) | |||
Treasury shares – at cost (12,920 shares) | (200) | (200) | |||
Total stockholders’ equity | 543,031 | 389,830 | $ 375,983 | $ 380,655 | |
Total liabilities and stockholders’ equity | $ 2,877,234 | $ 2,577,106 | |||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||
Preferred stock, shares issued | 0 | 0 | |||
Preferred stock, shares outstanding | 0 | 0 | |||
Common stock, par value | $ 0.01 | $ 0.01 | |||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | ||
Common stock, shares issued | 43,071,186 | 38,864,289 | |||
Common stock, shares outstanding | 43,058,266 | 38,851,369 | |||
Treasury shares, shares | 12,920 | 12,920 | |||
Parent Company | Reportable Legal Entities | |||||
Assets | |||||
Investment in subsidiaries | $ 702,977 | $ 572,435 | |||
Cash and cash equivalents | 773 | 522 | |||
Total cash and investments | 703,750 | 572,957 | |||
Receivables from affiliates | 6,580 | 12,462 | |||
Other assets | 747 | 4,591 | |||
Total assets | 711,077 | 590,010 | |||
Liabilities | |||||
Payables to affiliates | 1,263 | 9,540 | |||
Notes payable | 164,693 | 182,355 | |||
Loan payable to affiliates | 3,173 | ||||
Other liabilities | 2,090 | 5,112 | |||
Total liabilities | 168,046 | 200,180 | |||
Stockholders’ equity | |||||
Preferred stock, $0.01 par value; 50,000,000 shares authorized; no shares issued or outstanding | |||||
Common stock, $0.01 par value; 200,000,000 shares authorized; 43,071,186 and 38,864,289 shares issued, 43,058,266 and 38,851,369 shares outstanding in 2019 and 2018, respectively | 431 | 389 | |||
Paid-in capital | 661,761 | 607,260 | |||
Accumulated other comprehensive income (loss) | 37,453 | (22,315) | |||
Retained deficit | (156,414) | (195,304) | |||
Treasury shares – at cost (12,920 shares) | (200) | (200) | |||
Total stockholders’ equity | 543,031 | 389,830 | |||
Total liabilities and stockholders’ equity | $ 711,077 | $ 590,010 | |||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | |||
Preferred stock, shares issued | 0 | 0 | |||
Preferred stock, shares outstanding | 0 | 0 | |||
Common stock, par value | $ 0.01 | $ 0.01 | |||
Common stock, shares authorized | 200,000,000 | 200,000,000 | |||
Common stock, shares issued | 43,071,186 | 38,864,289 | |||
Common stock, shares outstanding | 43,058,266 | 38,851,369 | |||
Treasury shares, shares | 12,920 | 12,920 |
Schedule II - Statements of Ope
Schedule II - Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||||||||||
Other income | $ 538 | $ 673 | $ 853 | ||||||||
Total revenues | $ 225,105 | $ 219,870 | $ 220,112 | $ 212,972 | $ 203,575 | $ 201,726 | $ 199,525 | $ 181,046 | 878,059 | 785,872 | 651,039 |
Expenses: | |||||||||||
General and administrative expenses | 105,686 | 100,118 | 87,821 | ||||||||
Interest expense | 12,795 | 12,377 | 12,125 | ||||||||
Other expense | 16,151 | ||||||||||
Total expenses | 820,428 | 718,754 | 619,710 | ||||||||
Loss before federal income taxes | 57,631 | 67,118 | 31,329 | ||||||||
Federal income tax benefit | 12,137 | 13,389 | 38,233 | ||||||||
Net loss from continuing operations before equity in undistributed net income (losses) of subsidiaries | 14,742 | 8,361 | 8,696 | 13,695 | 13,464 | 15,603 | 14,652 | 10,010 | 45,494 | 53,729 | (6,904) |
Net income (loss) | $ 8,520 | $ 8,312 | $ 8,618 | $ 13,440 | $ 14,120 | $ 15,174 | $ 14,454 | $ 10,795 | 38,890 | 54,543 | (43,993) |
Parent Company | Reportable Legal Entities | |||||||||||
Revenues: | |||||||||||
Other income | 33 | 165 | 630 | ||||||||
Total revenues | 33 | 165 | 630 | ||||||||
Expenses: | |||||||||||
General and administrative expenses | 714 | 5,325 | 13,461 | ||||||||
Write-off of amounts related to sale of affiliate | 650 | 10,622 | |||||||||
Intercompany interest expense (income) | 18 | (27) | (29) | ||||||||
Interest expense | 12,795 | 12,377 | 12,125 | ||||||||
Other expense | 8,164 | ||||||||||
Total expenses | 21,691 | 18,325 | 36,179 | ||||||||
Loss before federal income taxes | (21,658) | (18,160) | (35,549) | ||||||||
Federal income tax benefit | 4,669 | 3,284 | 8,341 | ||||||||
Net loss from continuing operations before equity in undistributed net income (losses) of subsidiaries | (16,989) | (14,876) | (27,208) | ||||||||
Equity in undistributed net income (losses) of subsidiaries, net of tax | 55,879 | 69,419 | (16,785) | ||||||||
Net income (loss) | $ 38,890 | $ 54,543 | $ (43,993) |
Schedule II - Statements of Cas
Schedule II - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Activities: | |||
Net income (loss) | $ 38,890 | $ 54,543 | $ (43,993) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Amortization of debt issuance costs | 300 | 300 | 300 |
Changes in: | |||
Increase (decrease) in other assets | 23,938 | (15,092) | (8,992) |
Increase in other liabilities | (17,036) | (2,377) | 48,463 |
Total adjustments | 208,161 | 178,863 | 179,170 |
Net cash provided by operating activities - continuing operations | 253,655 | 232,592 | 172,266 |
Investing activities: | |||
Net cash used in investing activities | (288,616) | (297,952) | (160,473) |
Financing activities | |||
Proceeds from shares issued | 50,878 | 32 | |
Proceeds from capital contributions | 49,968 | ||
Proceeds from notes payable | 18,000 | ||
Repayment of notes payable | (18,000) | ||
Tax withholding on stock compensation awards | (740) | ||
Net cash provided by financing activities | 32,138 | 18,000 | 50,000 |
Cash, cash equivalents and restricted cash at beginning of year - continuing operations | 29,900 | 77,872 | 75,211 |
Cash, cash equivalents and restricted cash at end of year | 27,497 | 29,900 | 77,872 |
Parent Company | Reportable Legal Entities | |||
Operating Activities: | |||
Net income (loss) | 38,890 | 54,543 | (43,993) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Amortization of debt issuance costs | 338 | 338 | 338 |
Equity in undistributed net losses of subsidiaries, net of tax | (55,879) | (69,419) | 16,785 |
Changes in: | |||
Decrease (increase) in receivables from affiliates | 5,882 | (9,957) | 12,924 |
(Decrease) increase in payables to affiliates | (8,277) | 4,872 | (2,121) |
Increase (decrease) in other assets | 3,844 | (1,673) | (1,091) |
(Decrease) increase in loans to affiliates | (3,173) | ||
Increase in other liabilities | (3,022) | (6,426) | (3,237) |
Total adjustments | (60,287) | (82,265) | 23,598 |
Net cash provided by operating activities - continuing operations | (21,397) | (27,722) | (20,395) |
Financing activities | |||
Proceeds from shares issued | 50,878 | 32 | |
Proceeds from capital contributions | 49,968 | ||
Proceeds from notes payable | 18,000 | ||
Repayment of notes payable | (18,000) | ||
Tax withholding on stock compensation awards | (740) | ||
Capital contributions to affiliates | (10,490) | 9,747 | (36,840) |
Net cash provided by financing activities | 21,648 | 27,747 | 13,160 |
Net increase (decrease) in cash and cash equivalents | 251 | 25 | (7,235) |
Cash, cash equivalents and restricted cash at beginning of year - continuing operations | 522 | 497 | 7,732 |
Cash, cash equivalents and restricted cash at end of year | $ 773 | $ 522 | $ 497 |
Schedule V - Allowance for Unco
Schedule V - Allowance for Uncollectible Premiums and Reinsurance Recoverables (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance on Premiums Receivables | |||
Allowance for Uncollectible Premiums and Reinsurance Recoverables | |||
Beginning balance | $ 4,823 | $ 4,197 | $ 4,699 |
Additions | 2,108 | 800 | |
Deductions | (1,875) | (174) | (502) |
Ending balance | 5,056 | 4,823 | 4,197 |
Allowance on Reinsurance Receivables | |||
Allowance for Uncollectible Premiums and Reinsurance Recoverables | |||
Beginning balance | 9,992 | 7,046 | 7,046 |
Additions | 4,581 | 4,510 | |
Deductions | (3,702) | (1,564) | |
Ending balance | $ 10,871 | $ 9,992 | $ 7,046 |