Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 19, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 001-38996 | ||
Entity Registrant Name | ProSight Global, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 35-2405664 | ||
Entity Address, Address Line One | 412 Mt. Kemble Avenue | ||
Entity Address, Address Line Two | Suite 300 | ||
Entity Address, City or Town | Morristown | ||
Entity Address, State or Province | NJ | ||
Entity Address, Postal Zip Code | 07960 | ||
City Area Code | 973 | ||
Local Phone Number | 532-1900 | ||
Title of 12(b) Security | Common Stock, Par Value $0.01 per share | ||
Trading Symbol | PROS | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 85,065,052 | ||
Entity Common Stock, Shares Outstanding | 43,657,099 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001634038 | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Fixed maturity securities, available-for-sale at fair value (amortized cost $2,159,743 in 2020 and $1,999,403 in 2019, allowance for credit losses $(1,457) in 2020 and $0 in 2019) | $ 2,266,057 | $ 2,040,682 |
Commercial levered loans at amortized cost (fair value $12,180 in 2020 and $13,950 in 2019) | 12,308 | 14,069 |
Non-redeemable preferred stock securities at fair value (cost $6,541 in 2020 and $0 in 2019) | 7,049 | |
Bond exchange-traded funds at fair value (cost $44,679 in 2020 and $0 in 2019) | 44,882 | |
Limited partnerships and limited liability companies at fair value (cost $74,268 in 2020 and $62,226 in 2019) | 90,468 | 66,660 |
Short-term investments | 154 | 43,873 |
Total investments | 2,420,918 | 2,165,284 |
Cash and cash equivalents | 12,078 | 17,284 |
Restricted cash | 7,525 | 10,213 |
Accrued investment income | 13,693 | 13,610 |
Premiums and other receivables, net | 146,243 | 190,004 |
Receivable from reinsurers on paid losses, net | 10,481 | 3,481 |
Reinsurance receivables on unpaid losses, net | 170,522 | 193,952 |
Deferred policy acquisition costs | 94,437 | 98,812 |
Prepaid reinsurance premiums | 56,787 | 42,861 |
Net deferred income taxes | 4,803 | |
Goodwill and net intangible assets | 17,248 | 29,189 |
Fixed assets and capitalized software, net | 33,896 | 37,167 |
Funds withheld related to sale of affiliate | 19,534 | 19,453 |
Other assets | 25,996 | 29,537 |
Assets of discontinued operations | 21,354 | 21,584 |
Total assets | 3,050,712 | 2,877,234 |
Liabilities | ||
Reserve for unpaid losses and loss adjustment expenses | 1,602,902 | 1,521,648 |
Reserve for unearned premiums | 448,676 | 483,223 |
Ceded reinsurance payable | 38,152 | 17,768 |
Notes payable, net of debt issuance costs | 203,267 | 164,693 |
Secured notes payable, net of issuance costs | 22,668 | |
Funds held under reinsurance agreements | 23,179 | 58,855 |
Net deferred income taxes | 10,137 | |
Other liabilities | 40,034 | 56,438 |
Liabilities of discontinued operations | 37,729 | 31,578 |
Total liabilities | 2,426,744 | 2,334,203 |
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; 43,449,087 and 43,071,186 shares issued, 43,436,167 and 43,058,266 shares outstanding in 2020 and 2019, respectively | 434 | 431 |
Paid-in capital | 668,798 | 661,761 |
Accumulated other comprehensive income | 89,122 | 37,453 |
Retained deficit | (134,186) | (156,414) |
Treasury shares - at cost (12,920 shares) | (200) | (200) |
Total stockholders' equity | 623,968 | 543,031 |
Total liabilities and stockholders' equity | $ 3,050,712 | $ 2,877,234 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Consolidated Balance Sheets | ||
Fixed maturity securities, available-for-sale, amortized cost | $ 2,159,743 | $ 1,999,403 |
Fixed maturity securities, available-for-sale, allowance for credit losses | (1,457) | 0 |
Commercial levered loans, fair value | 12,180 | 13,950 |
Non-redeemable preferred stock securities, cost | 6,541 | 0 |
Bond exchange-traded funds, cost | 44,679 | 0 |
Limited partnerships and limited liability companies, cost | $ 74,268 | $ 62,226 |
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 | 43,449,087 | 43,071,186 |
Common stock, shares outstanding | 43,436,167 | 43,058,266 |
Treasury shares, shares | 12,920 | 12,920 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Operations | |||
Gross written premiums | $ 817,090 | $ 968,011 | $ 895,112 |
Net earned premiums | 737,755 | 807,854 | 730,785 |
Net investment income | 73,021 | 68,897 | 55,971 |
Realized investment gains, net | 4,980 | 770 | (1,557) |
Other income | 351 | 538 | 673 |
Total revenues | 816,107 | 878,059 | 785,872 |
Expenses: | |||
Net losses and loss adjustment expenses incurred | 472,671 | 501,025 | 434,830 |
Policy acquisition expenses | 172,426 | 184,771 | 171,429 |
General and administrative expenses | 100,418 | 105,686 | 100,118 |
Interest expense | 14,363 | ||
Interest expense | 12,795 | 12,377 | |
Other expense | 17,739 | 16,151 | |
Total expenses | 777,617 | 820,428 | 718,754 |
Net income from continuing operations before income taxes | 38,490 | 57,631 | 67,118 |
Income tax provision: | |||
Current | 4,492 | (185) | (853) |
Deferred | 6,248 | 12,322 | 14,242 |
Total income tax expense | 10,740 | 12,137 | 13,389 |
Net income from continuing operations | 27,750 | 45,494 | 53,729 |
Discontinued operations: | |||
Loss from discontinued operations before income taxes | (7,583) | (8,718) | (560) |
Income tax benefit | (2,061) | (2,114) | (1,374) |
Net income (loss) from discontinued operations | (5,522) | (6,604) | 814 |
Net income | $ 22,228 | $ 38,890 | $ 54,543 |
Earnings per share - basic: | |||
Net income from continuing operations | $ 0.63 | $ 1.11 | $ 1.39 |
Net income | 0.51 | 0.95 | 1.41 |
Earnings per share - diluted: | |||
Net income from continuing operations | 0.63 | 1.10 | 1.36 |
Net income | $ 0.50 | $ 0.94 | $ 1.38 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Comprehensive (Loss) Income | |||
Net income | $ 22,228 | $ 38,890 | $ 54,543 |
Other comprehensive income (loss), net of taxes: | |||
Change in unrealized holding gains (losses) on securities, net of deferred tax expense (benefit) of $15,009 in 2020, $16,277 in 2019 and $(10,842) in 2018 | 56,863 | 61,643 | (42,740) |
Less: reclassification adjustment for gains (losses) included in net income net of tax expense (benefit) of $1,352 in 2020, $162 in 2019 and $(429) in 2018 | 6,345 | 1,875 | (1,128) |
Less: reclassification adjustment for credit losses included in net income, net of tax benefit of $(306) in 2020, $0 in 2019 and $0 in 2018 | (1,151) | ||
Other comprehensive income (loss) | 51,669 | 59,768 | (41,612) |
Comprehensive income | $ 73,897 | $ 98,658 | $ 12,931 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Comprehensive (Loss) Income | |||
Change in unrealized holding gains (losses) on securities, deferred tax (benefit) expense | $ 15,009 | $ 16,277 | $ (10,842) |
Reclassification adjustment for gains (losses) included in net income, tax expense (benefit) | 1,352 | 162 | (429) |
Reclassification adjustment for credit losses included in net income, tax (benefit) expense | $ (306) | $ 0 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Equity - USD ($) $ in Thousands | Common stock | Paid-in capital | Accumulated other comprehensive (loss) income | Retained deficit | Treasury shares | Total |
Balance at the beginning of the period at Dec. 31, 2017 | $ 387 | $ 606,346 | $ 19,297 | $ (249,847) | $ (200) | $ 375,983 |
Increase (decrease) in Stockholders' Equity | ||||||
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 available-for-sale debt securities, net of deferred tax expense | (41,612) | (41,612) | ||||
Net income | 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 | ||||||
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 available-for-sale debt securities, net of deferred tax expense | 59,768 | 59,768 | ||||
Equity distribution | (4,174) | (4,174) | ||||
Net income | 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 |
Increase (decrease) in Stockholders' Equity | ||||||
Stock based employee compensation plan | 3 | 8,848 | 8,851 | |||
Stock purchase plan | 165 | 165 | ||||
Retirement of common stock (tax payments on equity compensation) | (2,578) | (2,578) | ||||
Net unrealized gain (loss) on available-for-sale debt securities, net of deferred tax expense | 51,669 | 51,669 | ||||
Tax benefit on payments related to offering costs | 602 | 602 | ||||
Net income | 22,228 | 22,228 | ||||
Balance at the end of the period at Dec. 31, 2020 | $ 434 | $ 668,798 | $ 89,122 | $ (134,186) | $ (200) | $ 623,968 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Changes in Stockholders' Equity | |||
Net unrealized (loss) gain on available-for-sale securities, deferred tax (benefit) | $ 13,963 | $ 16,115 | $ (10,413) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities | |||
Net income from continuing operations | $ 27,750 | $ 45,494 | $ 53,729 |
Net income (loss) from discontinued operations | (5,522) | (6,604) | 814 |
Net income | 22,228 | 38,890 | 54,543 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for deferred taxes | 6,248 | 12,322 | 14,242 |
Realized investment gains, net | (4,980) | (770) | 1,557 |
Net limited partnerships losses (gains) | (11,690) | (3,101) | (1,081) |
Net amortization (accretion) from bonds and commercial loans | 3,247 | (2,622) | (6,083) |
Net change in fair value of equity securities | (526) | ||
Depreciation and amortization | 9,313 | 8,737 | 7,351 |
Amortization of debt issuance costs | 1,249 | ||
Impairment of goodwill | 11,911 | ||
Stock based compensation | 8,851 | 8,578 | 916 |
Changes in: | |||
Premiums and other receivables, net | 43,761 | 10,343 | (16,013) |
Receivable from reinsurers on paid losses and reinsurance receivable on unpaid losses | 16,430 | 290 | 20,653 |
Ceded reinsurance payable | 20,384 | 4,487 | (5,167) |
Accrued investment income | (83) | (1,331) | (2,870) |
Deferred policy acquisition costs | 4,375 | (5,199) | (32,854) |
Prepaid reinsurance premiums | (13,926) | 1,765 | 78,324 |
Reserve for unpaid losses and loss adjustment expenses | 81,254 | 124,836 | 138,575 |
Reserve for unearned premiums | (34,547) | 47,290 | 40,501 |
Funds withheld related to sale of affiliate | (81) | (56) | 7,376 |
Funds held under reinsurance agreements | (35,676) | (4,310) | (49,095) |
Other assets | (649) | 23,938 | (15,092) |
Other liabilities | (16,405) | (17,036) | (2,377) |
Total adjustments | 88,460 | 208,161 | 178,863 |
Net cash provided by operating activities - continuing operations | 116,210 | 253,655 | 232,592 |
Net cash provided by (used in) operating activities - discontinued operations | 180 | (359) | (900) |
Net cash provided by operating activities | 116,390 | 253,296 | 231,692 |
Investing activities | |||
Purchases of available-for-sale fixed maturity securities | (716,057) | (570,726) | (509,970) |
Sales of available-for-sale fixed maturity securities | 297,506 | 145,053 | 173,768 |
Redemptions of available-for-sale fixed maturity securities | 261,239 | 157,860 | 81,417 |
Purchases of non-redeemable preferred stock securities | (13,070) | ||
Purchases of exchange-traded funds | (59,069) | ||
Purchases of commercial levered loans | (7,101) | ||
Redemptions of commercial levered loans | 1,769 | 2,815 | 14,698 |
Sales of bond exchange-traded funds | 14,333 | ||
Purchases of limited partnerships | (15,460) | (15,407) | (33,580) |
Distributions and redemptions from limited partnerships | 3,342 | 5,280 | 22,832 |
Sales of non-redeemable preferred stock securities | 6,400 | ||
Purchases of short-term investments | (34,492) | (358,296) | (172,787) |
Sales of short-term investments | 78,362 | 351,761 | 140,623 |
Acquisition of fixed assets and capitalized software | (6,013) | (6,535) | (8,489) |
Net cash used in investing activities - continuing operations | (181,210) | (288,195) | (298,589) |
Net cash provided by (used in) investing activities - discontinued operations | 1,344 | (421) | 637 |
Net cash used in investing activities | (179,866) | (288,616) | (297,952) |
Financing activities | |||
Proceeds from notes payable, net of debt issuance costs | 201,909 | 18,000 | |
Repayment of notes payable | (165,000) | (18,000) | |
Proceeds from secured loan payable, net of debt issuance costs | 22,659 | ||
Payments related to offering costs | (49) | ||
Proceeds from shares issued | 50,878 | ||
Proceeds from stock purchase plan | 165 | ||
Tax withholding on stock compensation awards | (2,578) | (740) | |
Net cash provided by financing activities | 57,106 | 32,138 | 18,000 |
Net change in cash and cash equivalents | (6,370) | (3,182) | (48,260) |
Cash, cash equivalents and restricted cash at beginning of year - continuing operations | 27,497 | 29,900 | 77,872 |
Cash, cash equivalents and restricted cash at beginning of year- discontinued operations | 255 | 1,034 | 1,322 |
Less: cash, cash equivalents and restricted cash at end of period - discontinued operations | (1,779) | (255) | (1,034) |
Cash, cash equivalents and restricted cash at end of period - continuing operations | $ 19,603 | $ 27,497 | $ 29,900 |
Background
Background | 12 Months Ended |
Dec. 31, 2020 | |
Background | |
Background | 1. Background 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 “IPO 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 IPO 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 IPO 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 IPO 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 IPO 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. 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, 2020 | |
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 Maturity Securities Fixed maturity 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 maturity 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 maturity 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. Non-Redeemable Preferred Stock Securities Non-redeemable preferred stock securities with readily determinable fair values are recorded at fair value. Bond Exchange-Traded Funds Bond exchange-traded funds with readily determinable fair values are recorded at fair value. 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. Credit Losses The Company analyzes fixed maturity securities in an unrealized loss position for credit losses if they meet the following criteria: (i) they are trading in a significant loss position; (ii) failure of the issuer of the security to make scheduled interest or principal payments; (iii) there have been negative credit events with respect to the issuer; or (iv) there have been negative current events surrounding an issuer or the environment in which an issuer operates. For fixed maturity securities in an unrealized loss position that require a credit loss analysis, the Company estimates a present value of expected cash flows. If the results of the cash flow analysis indicate that the Company will not recover the full amount of its amortized cost basis, the Company records a credit loss for the excess of amortized cost over the present value of expected cash flows, not to exceed the unrealized loss. Changes in the credit loss allowance are recognized through realized investment gains, net on the consolidated statements of operations. Fair Values of Financial Instruments For fixed maturity 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 allowance for credit loss for premium receivable is an assessment of ultimate non-collectability based on historical experience applicable to the respective current collection action status, age of the amount outstanding and expected collection costs. 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 a reinsurance receivable allowance for credit losses based on sources of credit ratings of reinsurers and applies probabilities of default and loss given default to the total uncollateralized exposure including incurred but not reported (“IBNR”) by rating class. 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 three Capitalized software as of December 31, 2020 and 2019, had unamortized balances of $31.4 million and $33.8 million, respectively. Depreciation on capitalized software commences once the software is placed into service. The Company recorded depreciation expense of $7.9 million, $7.0 million and $5.8 million for the years ended 2020, 2019 and 2018, respectively. Other depreciable assets, primarily leasehold improvements, as of December 31, 2020 and 2019, had unamortized balances of $2.4 million and $3.3 million, respectively. The Company recorded depreciation expense of $1.1 million and $1.2 million and $1.5 million, for the years ended 2020, 2019 and 2018, 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 (“NOLs”) 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 On March 27, 2020, the President of the United States signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act, among other things, includes certain income tax provisions for individuals and corporations; however, these benefits do not impact the Company’s current tax provision. 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 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 2020 were discounted at discount rates between 2.04% and 5.00%. Carried discounted reserves on these workers’ compensation claims, net of reinsurance, were $122.1 million and $116.9 million at December 31, 2020 and 2019, respectively. The amount of discount related to workers’ compensation reserves was $48.2 million and $47.4 million at December 31, 2020 and 2019, 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 489,439 for the year ended December 31, 2020, 906,182 for the year ended December 31, 2019 and 548,292 for the year ended December 31, 2018. 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, 2020, 2019 and 2018. 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 in Note 18. Segments. |
Recently Adopted Accounting Sta
Recently Adopted Accounting Standards | 12 Months Ended |
Dec. 31, 2020 | |
Recently Adopted Accounting Standards | |
Recently Adopted Accounting Standards | 3. Recently Adopted Accounting Standards Accounting Guidance Adopted In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases The Company adopted ASU 2016-02 in the first quarter of 2020, and as part of its implementation, elected the modified retrospective method approach at the beginning of the period of adoption and did not retrospectively adjust prior periods presented. The Company elected to not separate lease components from non-lease components (such as office cleanings, security and maintenance services provided by the Company’s lessors for certain of its leases). The Company also elected the package of practical expedients under the transition guidance, which allowed the Company to not reevaluate existing lease classifications, among others. As of January 1, 2020, the Company’s adoption of this guidance resulted in recognition of a right-of-use asset of $5.6 million and a corresponding lease liability of $6.3 million in continuing operations, and a right-of-use asset of $2.5 million and a corresponding lease liability of $3.0 million in discontinued operations. The adoption of this guidance did not have a material impact on the Company’s retained earnings. See Note 15. Leases for further information on the Company’s leases. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses, Measurement of Credit Losses on Financial Instruments In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . literature are disclosure only, ASU 2018-13 did not have an impact on the Company’s financial condition or results of operations. Premium Amortization on Purchased Callable Debt Securities In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) Accounting Guidance Not Yet Adopted In August 2018, the FASB issued ASU 2018-15, Intangibles — Goodwill and Other — Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In December 2019, the FASB issued ASU 2019-12, Income Taxes - Simplifying the Accounting for Income Taxes within annual periods beginning after December 15, 2021. The Company is currently evaluating the impact of this guidance on its financial condition or results of operations. In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting |
Statements of Cash Flow
Statements of Cash Flow | 12 Months Ended |
Dec. 31, 2020 | |
Statements of Cash Flow | |
Statements of Cash Flow | 4. Statements of Cash Flow Supplemental cash flow information for the years ended December 31, 2020, 2019 and 2018, is as follows: December 31 ($ in thousands) 2020 2019 2018 Cash paid (received) during the period for: Interest $ 12,915 $ 12,865 $ 12,377 Federal income tax $ 5,553 $ (780) $ 135 Non-cash activity: Operating lease right-of-use assets due to the adoption of ASU 2016-02 - continuing operations $ 2,794 $ — $ — Operating lease right-of-use assets due to the adoption of ASU 2016-02 - discontinued operations $ 2,173 $ — $ — Operating lease liabilities due to the adoption of ASU 2016-02 - continuing operations $ 3,099 $ — $ — Operating lease liabilities due to the adoption of ASU 2016-02 - discontinued operations $ 2,508 $ — $ — Tax benefit on payments related to offering costs $ 635 $ — $ — In 2020, there was a conversion of 364,948 RSUs into common shares accounted for as a non-cash transaction. |
Goodwill and Net Intangible Ass
Goodwill and Net Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Net Intangible Assets | |
Goodwill and Net Intangible Assets | 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, $0.1 million remain to be amortized at December 31, 2020. Goodwill and other intangible assets not subject to amortization are tested for impairment annually, in the fourth quarter. As of December 31, 2020, there was no impairment of other intangible assets not subject to amortization. On January 14, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) under the terms of which all outstanding shares of common stock of the Company would be acquired in an all-cash transaction valued at approximately $586.0 million. Using the market approach, the fair value of the Company was determined to be less than its carrying amount. As the difference between the Company’s carrying amount and its fair value was greater than the carrying amount of goodwill, the Company recognized an impairment charge of $11.9 million within other expense in the Company’s consolidated statements of operations for the year ended December 31, 2020 equal to the total carrying amount of goodwill. For a further discussion of the proposed merger and the Merger Agreement, see Item 1. “Business” and Note 22. “Subsequent Events” to our consolidated financial statements on this Annual Report. ($ in thousands) Goodwill Other Intangibles Total December 31, 2018 $ 11,911 $ 17,308 $ 29,219 Amortization — 30 30 December 31, 2019 $ 11,911 $ 17,278 $ 29,189 Amortization — 30 30 Impairment 11,911 — 11,911 December 31, 2020 $ — $ 17,248 $ 17,248 The status of the goodwill and net intangible assets is presented in the following tables: Accumulated ($ in thousands) Gross Amortization Impairment Net Useful Life December 31, 2020 Goodwill $ 11,911 $ — $ (11,911) $ — Indefinite State licenses 17,100 — — 17,100 Indefinite Other 178 (30) — 148 15 years Net balance $ 29,189 $ (30) $ (11,911) $ 17,248 December 31, 2019 Goodwill $ 11,911 $ — $ — $ 11,911 Indefinite State licenses 17,100 — — 17,100 Indefinite Other 208 (30) — 178 Varies up to 15 years Net balance $ 29,219 $ (30) $ — $ 29,189 The estimated amortization of intangible assets for the next five years is as follows: ($ in thousands) 2021 $ 30 2022 30 2023 30 2024 30 2025 28 $ 148 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020, the Company has placed collateral of $35.2 million in the form of cash, securities and Letters of Credit. 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 $32.0 million and $24.0 million as of December 31, 2020 and 2019, respectively. Loss from discontinued operations, net of taxes in its consolidated statements of operations are comprised of the following: Years Ended December 31 ($ in thousands) 2020 2019 2018 Revenues Net earned premiums $ 295 $ 611 $ 1,173 Net investment income 73 142 514 Realized investment gains, net 1,260 1,267 830 Other income — — 338 Total revenues 1,628 2,020 2,855 Expenses Net losses and loss adjustment expenses incurred 8,295 10,463 11,197 Policy acquisition expenses 93 218 401 General and administrative expenses 823 57 (8,401) Interest expense — — 218 Total expenses 9,211 10,738 3,415 Loss from discontinued operations before income taxes (7,583) (8,718) (560) Income tax benefit (2,061) (2,114) (1,374) Net (loss) income from discontinued operations $ (5,522) $ (6,604) $ 814 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) 2020 2019 Assets Cash and investments $ 10,939 $ 10,428 Other assets 10,415 11,156 Total assets $ 21,354 $ 21,584 Liabilities Reserve for unpaid losses and loss adjustment expenses $ 32,414 $ 24,169 Other liabilities 5,315 7,409 Total liabilities $ 37,729 $ 31,578 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2020 | |
Investments | |
Investments | 7. Investments The Company’s investment portfolio consists of fixed maturity securities, commercial levered loans, limited partnerships and limited liability companies, non-redeemable preferred stock securities, bond exchange-traded funds, and short-term investments. Fixed maturity securities may include U.S. Treasury securities, government agency securities, municipal debt obligations, residential mortgage-backed securities, commercial mortgage-backed securities, collateralized loan obligations, asset-backed securities and corporate debt securities. Corporate debt securities may include investment grade and below investment grade bonds, bank loan investments and redeemable preferred stock securities. The Company has designated its investments in fixed maturity securities as available-for-sale securities. (a) A summary of the Company’s investment components is presented below: December 31 ($ in thousands) 2020 2019 Fixed maturity securities, AFS (fair value): U.S. Treasury securities $ 52,157 2.2 % $ 49,985 2.3 % Government agency securities 31,007 1.3 6,531 0.3 Corporate debt securities 1,397,031 57.7 1,338,812 61.8 Municipal debt obligations 207,094 8.5 79,815 3.7 ABS 55,258 2.3 73,582 3.4 CLO 139,126 5.7 179,549 8.3 CMBS 117,960 4.9 97,526 4.5 RMBS – non-agency 116,136 4.8 71,610 3.3 RMBS – agency 150,288 6.2 143,272 6.6 Total fixed maturity securities, AFS 2,266,057 93.6 2,040,682 94.2 Short-term investments 154 0.0 43,873 2.0 Commercial levered loans (amortized cost) 12,308 0.5 14,069 0.7 Non-redeemable preferred stock securities 7,049 0.3 — — Bond exchange-traded funds 44,882 1.9 — — Limited partnerships and limited liability companies (fair value) 90,468 3.7 66,660 3.1 Total investments $ 2,420,918 100.0 % $ 2,165,284 100.0 % At December 31, 2020 and 2019, 91.7% and 91.1% of the fair value of the Company’s fixed maturity portfolios were considered investment grade, respectively. The Company held approximately $187.9 million and $181.0 million in fixed maturity securities that were below investment grade as of December 31, 2020 and 2019, respectively. (b) The gross unrealized gains and losses on fixed maturity securities included in assets from continuing operations at December 31, 2020, are as follows: Cost/ Gross Gross Amortized Credit Loss Unrealized Unrealized Fair ($ in thousands) Cost Allowance Gains Losses Value Fixed maturity securities: U.S. Treasury securities $ 50,248 $ — $ 1,909 $ — $ 52,157 Government agency securities 30,446 — 561 — 31,007 Corporate debt securities 1,317,667 (598) 86,447 (6,485) 1,397,031 Municipal debt obligations 198,773 — 8,437 (116) 207,094 ABS 54,989 — 696 (427) 55,258 CLO 140,615 — 154 (1,643) 139,126 CMBS 111,313 — 7,008 (361) 117,960 RMBS - non-agency 109,110 (859) 8,619 (734) 116,136 RMBS - agency 146,582 — 3,721 (15) 150,288 Total fixed maturity securities $ 2,159,743 $ (1,457) $ 117,552 $ (9,781) $ 2,266,057 The gross unrealized gains and losses on fixed maturity 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 maturity 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 maturity securities $ 1,999,403 $ 48,403 $ (7,124) $ 2,040,682 (c) The following table summarizes the fair values and gross unrealized losses for fixed maturity securities in an unrealized loss position at December 31, 2020, grouped by asset class and by duration of time in a continuous unrealized 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 Corporate debt securities $ 36,450 $ (740) $ 101,628 $ (5,745) $ 138,078 $ (6,485) Municipal debt obligations 12,211 (73) 3,344 (43) 15,555 (116) ABS 9,121 (364) 9,461 (63) 18,582 (427) CLO 29,909 (215) 82,758 (1,428) 112,667 (1,643) CMBS 17,559 (348) 800 (13) 18,359 (361) RMBS - non-agency 11,759 (249) 6,723 (485) 18,482 (734) RMBS - agency 2,467 (15) — — 2,467 (15) Total fixed maturity securities $ 119,476 $ (2,004) $ 204,714 $ (7,777) $ 324,190 $ (9,781) The following table summarizes the fair values and gross unrealized losses for fixed maturity securities in an unrealized loss position at December 31, 2019, grouped by asset class and by duration of time in a continuous unrealized 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 fixed maturity securities $ 290,187 $ (3,930) $ 200,992 $ (3,194) $ 491,179 $ (7,124) (d) The Company was holding 212 and 313 fixed maturity securities that were in an unrealized loss position at December 31, 2020 and 2019, respectively. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity. The Company analyzes fixed maturity securities in an unrealized loss position for credit losses if they meet the following criteria: (i) they are trading in a significant loss position, (ii) failure of the issuer of the security to make scheduled interest or principal payments, (iii) there have been negative credit events with respect to the issuer, or (iv) there have been negative current events surrounding an issuer or the environment in which an issuer operates. For fixed maturity securities in an unrealized loss position that require a credit loss analysis, the Company estimates a present value of expected cash flows. If the results of the cash flow analysis indicate that the Company will not recover the full amount of its amortized cost basis, the Company records a credit loss for the excess of amortized cost over the present value of expected cash flows, not to exceed the unrealized loss. Changes in the credit loss allowance are recognized through realized investment gains, net on the consolidated statements of operations. The credit loss allowance expense for fixed maturity securities was $1.5 million for the year ended December 31, 2020. The following table is a rollforward of the credit loss allowance for fixed maturity securities: December 31, Additions Reduction Reduction Change in Securities December 31, ($ in thousands) 2019 New Securities Sales Intent to Sell with Previous Allowance 2020 Fixed maturity securities: Corporate debt securities $ — $ 1,166 $ (121) $ — $ (447) $ 598 ABS — 180 (3) — (177) — CLO — 6 — — (6) — RMBS - non-agency — 1,151 (111) — (181) 859 Total fixed maturity securities allowance $ — $ 2,503 $ (235) $ — $ (811) $ 1,457 (e) The amortized cost and fair value of fixed maturity securities, which excludes the Company’s structured securities portfolio, at December 31, 2020, 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, 2020 Amortized Fair ($ in thousands) Cost Value Due in one year or less $ 103,243 $ 104,316 Due after one through five years 628,897 657,996 Due after five through ten years 522,749 561,775 Due after ten years 311,799 332,195 1,566,688 1,656,282 Structured securities: Government agency securities 30,446 31,007 ABS 54,989 55,258 CLO 140,615 139,126 CMBS 111,313 117,960 RMBS - non-agency 109,110 116,136 RMBS - agency 146,582 150,288 Total fixed maturity securities $ 2,159,743 $ 2,266,057 The Company did not have any non-income producing fixed maturity investments for the years ended December 31, 2020 or 2019, respectively. (f) The Company records its limited partnership and limited liability companies using net asset value, which the Company has determined to be the best indicator of fair value for these investments. At December 31, 2020 and 2019, the fair value of limited partnerships and limited liability companies was $90.5 million and $66.7 million, respectively. 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 $46.6 million at December 31, 2020. The carrying values used for investments in limited partnerships and limited liability companies generally are established on the basis of the current valuations provided 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 investment funds that employ diverse and fundamentally driven approaches to investing which include 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 (g) 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 credit losses on loans. Interest on loans is calculated using the simple interest method on the daily principal amount outstanding. There was no allowance for credit losses on loans at December 31, 2020 and 2019, respectively. (h) Proceeds from sales and redemptions in AFS securities totaled $558.7 million, $302.9 million and $255.2 million for the years ended December 31, 2020, 2019 and 2018 respectively. Gross realized gains from sales and redemptions in AFS securities totaled $7.3 million, $1.4 million, and $0.6 million for the years ended December 31, 2020, 2019 and 2018, respectively. Gross realized losses from sales and redemptions of AFS investments totaled $0.9 million, $0.7 million and $2.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. (i) Net investment income included in net income from continuing operations in the consolidated statements of operations from each major category of investments for the years ended December 31, 2020, 2019 and 2018, is as follows: ($ in thousands) 2020 2019 2018 Fixed maturity securities $ 62,621 $ 66,975 $ 55,765 Net limited partnerships and limited liability companies gains 11,690 3,101 1,081 Other 2,173 1,123 1,290 Gross investment income 76,484 71,199 58,136 Less: investment income attributable to funds withheld liabilities (250) (655) (912) Less: expenses (3,213) (1,647) (1,253) Net investment income $ 73,021 $ 68,897 $ 55,971 (j) Included in investments at December 31, 2020 and 2019, 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 $233.4 million and $210.8 million, respectively. Fair value and carrying value of assets in the amount of $256.4 million and $241.0 million, respectively, were on deposit in collateral agreements at December 31, 2020. 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. (k) 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. (l) Non-redeemable preferred stock securities with readily determinable fair values are recorded at fair value. The change in fair value recognized in income on non-redeemable preferred stock securities for the year ended December 31, 2020 was a gain of $0.4 million. The gain consisted of an unrealized gain on non-redeemable preferred stock securities of $0.5 million and a loss recognized on the sale of non-redeemable preferred stock securities of $0.1 million. (m) Bond exchange-traded funds with readily determinable fair values are recorded at fair value. The change in fair value recognized in income on bond exchange-traded funds for the year ended December 31, 2020 was a gain of $0.1 million. The gain consisted of an unrealized gain on bond exchange-traded funds securities of $0.2 million and a loss recognized on the sale of bond exchange-traded funds of $0.1 million. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
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 — The Company’s Level 1 assets include bond exchange-traded funds. Level 2 — 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, corporate debt securities, and non-redeemable preferred stock 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 — The Company’s Level 3 assets include its investments in certain corporate debt securities, certain non-redeemable preferred stock 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 and non-redeemable preferred stock securities classified under Level 3 in the fair value hierarchy are either provided to the Company by an independent valuation service provider or calculated by the Company. For certain securities, the Company uses observable inputs such as readily available indices as well as change in estimated fund returns provided by third party investment managers. Unobservable inputs, significant to the measurement and valuation of the corporate debt securities are assumptions about prepayment speed, default rates and recovery rates. 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, 2020 and 2019, 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, 2020 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 maturity securities: U.S. Treasury securities $ — $ 52,157 $ — $ 52,157 Government agency securities — 31,007 — 31,007 Corporate debt securities — 1,139,066 257,965 1,397,031 Municipal debt obligations — 207,094 — 207,094 ABS — 55,258 — 55,258 CLO — 139,126 — 139,126 CMBS — 117,960 — 117,960 RMBS - non agency — 116,136 — 116,136 RMBS - agency — 150,288 — 150,288 Total fixed maturity securities — 2,008,092 257,965 2,266,057 Non-redeemable preferred stock securities — 5,649 1,400 7,049 Bond exchange-traded funds 44,882 — — 44,882 Total categorized $ 44,882 $ 2,013,741 $ 259,365 2,317,988 Investments measured at net asset value: Limited partnerships and limited liability companies 90,468 Total of invested assets carried at fair value $ 2,408,456 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 maturity 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 categorized $ — $ 1,891,051 $ 149,631 2,040,682 Investments measured at net asset value: Limited partnerships and limited liability companies 66,660 Total of invested assets carried at fair value $ 2,107,342 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, 2020 and 2019: December 31, 2020 Carrying Fair Value ($ in thousands) Value Total Level 1 Level 2 Level 3 Assets Commercial levered loans $ 12,308 $ 12,180 $ — $ — $ 12,180 Liabilities Notes payable 207,000 207,537 — 207,537 — Unamortized debt issuance costs (3,733) Notes payable, net of debt issuance costs $ 203,267 Secured loan payable 22,750 23,265 — 23,265 — Unamortized debt issuance costs (82) Secured loan payable, net of debt issuance costs $ 22,668 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) Notes payable, net of debt issuance costs $ 164,693 The fair value of the notes payable at December 31, 2020, approximated a price equal to $207.5 million or 100.3% of the par value. The fair value of the secured loan payable at December 31, 2020, approximated a price equal to $23.3 million or 102.3% of the par value. The fair value of the notes payable at December 31, 2019, approximated a price equal to $167.5 million or 101.5% of the par value. The following table provides a summary of the changes in the fair value of securities measured using Level 3 inputs during the years ended December 31, 2020 and 2019: Non-Redeemable Corporate Debt Preferred Stock Level 3 ($ in thousands) Securities Securities Total Fair value, December 31, 2018 $ 126,497 $ — $ 126,497 Total net gains (losses) for the period included in: Other comprehensive income 3,011 — 3,011 Net realized loss (5) — (5) Purchases 23,905 — 23,905 Sales — — — Issuances — — — Settlements (3,777) — (3,777) Transfers into Level 3 — — — Transfers out of Level 3 — — — Fair value, December 31, 2019 149,631 — 149,631 Total net gains (losses) for the period included in: Other comprehensive income 6,241 — 6,241 Net realized loss (5) — (5) Purchases 107,197 1,400 108,597 Sales — — — Issuances — — — Settlements (5,099) — (5,099) Transfers into Level 3 — — — Transfers out of Level 3 — — — Fair value, December 31, 2020 $ 257,965 $ 1,400 $ 259,365 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | 9. Accumulated Other Comprehensive Income (Loss) The following table summarizes the components of AOCI for the years ended December 31, 2020, 2019 and 2018: ($ in thousands) Gross Tax Net December 31, 2017 $ 22,265 $ 2,968 $ 19,297 Unrealized holding losses on fixed maturity 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 maturity 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 Unrealized holding gains on fixed maturity securities 71,872 15,009 56,863 Amounts reclassified into net income 7,697 1,352 6,345 Amounts reclassified as credit losses (1,457) (306) (1,151) Other comprehensive income 65,632 13,963 51,669 December 31, 2020 $ 111,755 $ 22,633 $ 89,122 The following table presents reclassifications out of AOCI attributable to the Company during the years ended December 31, 2020, 2019 and 2018: Line in Consolidated ($ in thousands) Statements of Operations 2020 2019 2018 AOCI Unrealized gains (losses) on securities Realized investment gains (losses), net $ 7,697 $ 2,037 $ (1,557) Income tax expense 1,352 162 (429) Reclassification adjustment for credit losses included in net income Realized investment gains (losses), net (1,457) — — Income tax expense (306) — — Total reclassifications $ 5,194 $ 1,875 $ (1,128) |
Related-Party Information
Related-Party Information | 12 Months Ended |
Dec. 31, 2020 | |
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 $0.3 million and $8.0 million for the years ended December 31, 2020 and 2019, respectively, within other expense in the consolidated statements of operations 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. On January 23, 2020, the Company and the former CEO entered into an amendment to the Separation Agreement, which, among other things, provides that effective as of February 1, 2020, the former CEO resigned from his position as Executive Chairman of the Company. Additionally, the Company entered into a niche management agreement with an independent agency founded by the former CEO. The Company recorded an expense of $0.6 million for the year ended December 31, 2020. Investment Advisory Agreements with GSAM A portion of 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 $1.2 million, $1.3 million and $1.1 million in 2020, 2019 and 2018 respectively. |
Insurance Operations
Insurance Operations | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020, were the Swiss Reinsurance America Corporation, Munich Reinsurance America Inc. and Harco National Insurance Company, which represented 26.0%, 8.0% and 8.4%, 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. 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 $0.0 million and $33.1 million as of December 31, 2020 and 2019. In January 2020, the WAQS were commuted at no gain or loss to the Company. Loss reserve development on the reserves ceded under the WAQS is included in continuing operations. For the years ended December 31, 2020, 2019 and 2018 under the WAQS the Company recorded the following: ($ in thousands) 2020 2019 2018 (Return of ceded prepaid) ceded written premium $ — $ (3) $ (58,857) Ceded earned premium — (3) 14,560 (Increase) reduction to net loss and loss adjustment expenses incurred — (4,746) 9,514 Reduction to policy acquisition expenses — 4,743 3,955 Reduction to pre-tax income $ — $ — $ 1,091 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, 2020, 2019 and 2018 are as follows: ($ in thousands) 2020 2019 2018 Written premiums Direct written premiums $ 814,266 $ 964,512 $ 889,526 Assumed from other companies 2,824 3,499 5,586 Ceded to other companies 122,912 115,871 45,038 Net written premiums $ 694,178 $ 852,140 $ 850,074 Earned premiums Direct earned premiums $ 846,749 $ 918,718 $ 844,234 Assumed from other companies 3,017 3,887 10,266 Ceded to other companies 112,011 114,751 123,715 Net earned premiums $ 737,755 $ 807,854 $ 730,785 Percent of amount assumed to net 0.4% 0.5% 1.4% Losses and loss adjustment expenses incurred Direct net losses and loss adjustment expenses incurred $ 553,967 $ 556,051 $ 485,770 Assumed from other companies 8,862 9,298 (3,209) Ceded to other companies 90,158 64,324 47,731 Net losses and loss adjustment expenses incurred $ 472,671 $ 501,025 $ 434,830 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, 2020, 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, 2020, 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 $21.0 million of premium accumulating at approximately 4% per annum. These are 100% recoverable to the Company to the extent losses do not exceed the retention. At December 31, 2020, the Company’s estimate of respective loss development remains below the retention and the adjustable premium is accrued as fully recoverable. Allowance for Credit Losses The following table is rollforward of the receivable allowance balances related to the risk of credit default as of December 31, 2020: ($ in thousands) Year Ended December 31, 2020 December 31, 2019 Current Provision Write-offs Recoveries December 31, 2020 Premium receivable $ 5,056 $ 2,642 $ (841) $ 60 $ 6,917 Reinsurance receivable on paid and unpaid losses 505 201 — — 706 Total receivable allowance $ 5,561 $ 2,843 $ (841) $ 60 $ 7,623 The majority of the allowance for credit loss for premium receivables relates to audit premium on workers’ compensation coverages assessed during or after the period of coverage whereby there is limited ability to cancel or limit coverage. In the final collection action at the insured level, collection agencies are typically engaged. The amount with collection agencies as of December 31, 2020 was $6.9 million. The reinsurance receivable allowance for credit loss is based on the credit ratings of reinsurers. Uncollateralized exposure on unrated or counterparties rated below investment grade at December 31, 2020 is $3.7 million. At December 31, 2020, 97.4% of uncollateralized exposures are rated above investment grade. 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 not received any 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 former distribution partner) totaled $275.0 million, $267.8 million and $240.7 million for the years ended December 31, 2020, 2019 and 2018, respectively. Unpaid Losses Unpaid losses are based on individual case estimates for losses reported and include a provision for incurred but not reported and for losses and loss adjustment expenses. The following table provides a roll forward of the Company’s reserve for unpaid losses and loss adjustment expenses: ($ in thousands) 2020 2019 2018 Gross reserve for unpaid losses and loss expenses, at beginning of year $ 1,521,648 $ 1,396,812 $ 1,258,237 Ceded reserve for unpaid losses and loss expenses, at beginning of year 193,952 185,295 201,156 Net reserve for unpaid losses and loss expenses, at beginning of year 1,327,696 1,211,517 1,057,081 Add: Incurred losses and loss expenses occurring in the: Current year 456,724 482,989 439,847 Prior years 710 3,154 (5,017) Prior years attributable to adjusted premium 15,237 14,882 — Total net losses and loss adjustment expenses incurred 472,671 501,025 434,830 Less: Paid losses and loss expenses for claims occurring in the: Current year 47,937 66,522 47,734 Prior years 320,050 318,324 232,660 Total paid losses and loss expenses for claims 367,987 384,846 280,394 Net reserve for unpaid losses and loss expenses, at end of year 1,432,380 1,327,696 1,211,517 Ceded reserve for unpaid losses and loss expenses, at end of year 170,522 193,952 185,295 Gross reserve for unpaid losses and loss expenses, at end of year $ 1,602,902 $ 1,521,648 $ 1,396,812 During the year ended December 31, 2020 the Company’s reserve for unpaid losses and loss adjustment expenses for accident years 2019 and prior developed unfavorably by $0.7 million driven by unfavorable development of $21.8 million in General Liability, $16.8 million unfavorable development in Commercial Multiple Peril and $8.1 million unfavorable development in Commercial Auto, partially offset by $36.5 million of favorable development in Workers’ Compensation and $9.5 million of favorable development in All Other lines. In addition, the Company incurred $15.2 million of losses and loss adjustment expenses related to premium adjustments earned during the year ended December 31, 2020, attributable to accident years 2019 and 2018. The unfavorable development in General Liability, Commercial Multiple Peril and Commercial Auto related to 2013 through 2017 accident years due largely to increased severities in runoff components. The favorable development in Workers’ Compensation derived from lower than expected claims severity across all customer segments primarily in accident years 2015 through 2018. The favorable development in All Other lines was driven mostly by Ocean Marine. 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 losses 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. Incurred and Paid Claims Development The following information presented summarizes incurred and paid claims development as of December 31, 2020, 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 2011 through 2019 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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Counts Prior $ 23,493 2011 $ 115,644 $ 128,879 $ 126,752 $ 122,773 $ 124,543 $ 131,081 $ 124,798 $ 131,385 $ 131,360 $ 131,113 6,974 4,421 2012 137,380 157,477 157,985 165,015 165,889 156,355 159,120 158,523 164,197 4,031 6,633 2013 210,368 222,277 232,660 251,353 243,567 237,900 249,802 252,393 13,838 13,246 2014 286,842 312,987 323,792 333,865 342,788 356,733 367,034 26,909 16,350 2015 384,269 407,279 407,427 395,751 430,942 433,918 34,523 20,896 2016 390,430 423,538 406,204 416,266 416,317 47,411 20,124 2017 354,948 361,299 339,505 354,402 110,963 18,763 2018 422,104 406,199 403,545 172,717 19,252 2019 457,973 460,080 231,758 21,018 2020 430,179 303,172 12,264 $ 3,413,178 $ 975,789 All Lines – Paid Unaudited For the Years Ended Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 14,796 $ 51,006 $ 65,103 $ 76,731 $ 88,243 $ 98,411 $ 105,584 $ 109,007 $ 111,247 $ 110,798 2012 16,619 48,276 73,249 98,960 119,374 130,200 136,909 139,793 148,826 2013 27,465 74,012 115,396 158,978 181,989 192,476 214,863 221,768 2014 44,738 111,919 166,907 217,986 250,928 280,933 305,157 2015 75,043 159,708 234,756 281,637 331,748 360,249 2016 78,271 150,198 204,589 266,496 316,092 2017 54,026 116,204 163,937 194,952 2018 45,012 112,889 163,878 2019 66,522 154,243 2020 66,226 2,042,189 Incurred less paid 1,370,989 Reserves 2010 and prior 55,436 Other (1) 5,955 Total net reserve for unpaid losses and loss adjustment expenses $ 1,432,380 (1) Other category represents unallocated loss adjustment expense reserves $40.3 million, discounting of loss reserves ($48.3) million, retroactive reinsurance agreements $10.8 million and other of $3.2 million. The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2020: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 14 % 19 % 14 % 13 % 11 % 7 % 7 % 2 % 4 % — % Commercial Auto The following tables represent information on the Company’s unpaid losses and loss adjustment expenses incurred and cumulative paid losses, since 2011 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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Counts Prior 2011 $ 13,864 $ 13,462 $ 11,260 $ 11,231 $ 12,547 $ 12,547 $ 12,508 $ 12,476 $ 12,476 $ 12,755 $ — 1,219 2012 21,101 29,959 36,319 43,031 42,028 41,479 41,572 39,231 40,112 — 1,746 2013 47,191 50,752 63,764 77,570 76,768 72,265 81,422 82,221 295 6,225 2014 74,185 95,283 105,528 112,157 113,747 113,790 115,781 735 8,232 2015 120,137 139,415 152,268 146,757 155,266 158,586 1,789 11,156 2016 114,568 124,760 119,931 124,166 129,184 3,616 9,651 2017 81,986 79,156 71,068 71,849 6,510 7,073 2018 87,993 78,777 82,562 14,403 7,216 2019 115,393 109,586 33,811 9,211 2020 98,045 62,409 5,403 $ 900,681 $ 123,568 Commercial Auto – Paid Unaudited For the Years Ended Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 4,717 $ 7,791 $ 7,250 $ 9,111 $ 11,587 $ 12,005 $ 12,123 $ 12,117 $ 12,128 $ 12,754 2012 6,660 15,397 25,280 33,248 39,680 40,852 41,305 38,657 40,090 2013 13,015 26,773 43,403 64,073 72,906 71,010 79,066 79,556 2014 21,692 52,048 74,431 96,385 108,102 110,883 113,915 2015 37,964 74,524 107,063 126,831 142,806 149,411 2016 39,580 63,123 83,161 102,003 118,545 2017 19,950 34,659 47,199 58,538 2018 16,709 32,698 52,510 2019 22,082 51,448 2020 17,198 693,965 Incurred less paid $ 206,716 The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2020: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 22 % 22 % 19 % 17 % 12 % 2 % 5 % (2) % 3 % 5 % General Liability The following tables represent information on unpaid losses and loss adjustment expenses incurred and cumulative paid losses, since 2011 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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Counts Prior $ 6,356 2011 $ 45,894 $ 58,633 $ 61,398 $ 60,375 $ 63,264 $ 67,791 $ 62,127 $ 66,641 $ 64,682 $ 64,241 524 1,533 2012 42,685 43,677 38,288 42,401 45,771 46,312 48,096 50,509 51,503 1,292 1,488 2013 48,466 61,785 62,618 70,459 60,613 61,796 69,565 69,835 5,375 2,615 2014 70,878 77,255 78,801 93,468 104,281 114,976 120,427 11,986 3,103 2015 80,225 80,411 78,163 80,514 93,808 98,153 14,628 3,018 2016 93,737 101,479 92,401 91,228 98,812 20,493 2,898 2017 99,845 100,306 94,554 107,430 44,829 2,992 2018 142,486 137,525 137,672 79,149 3,113 2019 153,650 159,357 116,813 2,893 2020 164,875 149,052 2,076 $ 1,072,305 $ 450,497 General Liability – Paid Unaudited For the Years Ended Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 5,009 $ 18,912 $ 30,123 $ 37,344 $ 44,166 $ 50,136 $ 54,250 $ 56,659 $ 57,932 $ 59,367 2012 945 8,844 14,751 24,257 32,585 36,521 40,754 45,509 48,297 2013 1,930 10,941 22,152 36,493 46,821 55,148 66,439 69,798 2014 5,456 14,032 28,581 41,079 53,712 73,491 84,494 2015 5,404 14,720 25,931 39,407 61,168 75,037 2016 3,547 13,873 25,223 47,333 63,646 2017 2,596 11,279 26,354 40,828 2018 2,223 15,625 31,347 2019 3,487 18,404 2020 2,276 493,494 Incurred less paid $ 578,811 The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2020: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 3 % 11 % 13 % 15 % 15 % 13 % 10 % 6 % 4 % 2 % Workers’ Compensation The following tables represent information on unpaid losses and loss adjustment expenses incurred and cumulative paid losses, since 2011 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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Counts Prior $ 13,370 2011 $ 28,987 $ 22,186 $ 23,576 $ 21,411 $ 19,489 $ 21,943 $ 18,986 $ 21,247 $ 23,750 $ 26,870 6,450 203 2012 46,503 51,724 53,038 48,983 47,373 38,501 38,835 38,919 39,689 2,739 1,776 2013 76,844 71,683 70,939 68,109 71,532 69,729 64,727 66,457 8,150 2,702 2014 88,181 81,628 83,543 74,134 69,886 67,784 69,102 12,909 2,682 2015 101,762 101,410 89,383 82,212 87,570 81,504 13,798 3,891 2016 99,292 109,623 103,382 102,716 85,553 14,347 4,373 2017 102,250 101,691 93,134 85,197 45,929 4,698 2018 116,278 118,973 116,178 62,582 5,157 2019 97,485 94,627 52,783 5,081 2020 45,460 31,863 1,853 $ 710,637 $ 264,920 Workers’ Compensation – Paid Unaudited For the Years Ended Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 473 $ 4,148 $ 5,127 $ 5,503 $ 7,239 $ 8,662 $ 8,978 $ 9,971 $ 10,841 $ 11,525 2012 2,381 5,481 10,598 14,634 18,468 23,694 25,495 26,237 27,785 2013 2,639 12,579 20,520 26,088 29,036 32,962 35,793 38,745 2014 4,644 14,901 24,411 35,131 39,846 42,423 49,285 2015 6,504 18,434 27,423 33,543 38,061 42,790 2016 10,891 24,557 35,385 43,171 48,867 2017 8,631 22,462 30,776 27,305 2018 9,563 29,008 37,098 2019 9,745 26,871 2020 7,219 317,490 Incurred less paid $ 393,147 The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2020: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 9 % 15 % 10 % 7 % 6 % 6 % 6 % 4 % 4 % 3 % Commercial Multiple Peril The following tables represent information on unpaid losses and loss adjustment expenses incurred and cumulative paid losses, since 2011 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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Counts Prior 2011 $ — $ — $ 11 $ 7 $ 6 $ 6 $ 2 $ 2 $ 2 $ 2 $ — — 2012 96 94 73 49 39 813 813 813 813 — 5 2013 968 1,065 1,051 1,442 8,226 8,250 8,198 8,286 2 54 2014 13,037 15,884 16,448 25,915 27,126 30,172 31,876 1,067 615 2015 27,876 27,542 17,952 18,345 24,144 24,637 3,462 1,017 2016 34,010 30,379 34,883 44,758 48,370 8,071 1,203 2017 37,760 44,044 44,260 56,196 12,530 1,455 2018 39,507 37,015 35,681 14,143 1,237 2019 36,895 38,194 19,552 1,151 2020 47,101 25,682 906 $ 291,156 $ 84,509 Commercial Multiple Peril – Paid Unaudited For the Years Ended Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ — $ — $ — $ — $ — $ — $ 2 $ 2 $ 2 $ 2 2012 — — 1 1 2 813 813 813 813 2013 43 192 312 754 8,083 8,149 8,157 8,265 2014 1,795 4,271 7,358 20,545 22,880 26,366 27,666 2015 6,879 14,751 8,949 14,293 20,676 22,552 2016 4,974 7,028 16,715 27,870 36,813 2017 7,270 19,733 27,816 36,941 2018 5,323 11,953 16,420 2019 5,940 12,857 2020 13,054 175,383 Incurred less paid $ 115,773 The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2020: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 16 % 16 % 10 % 23 % 22 % 10 % 3 % 1 % — % — % All Other The following tables represent information on unpaid losses and loss adjustment expenses incurred and cumulative paid losses, since 2011 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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Counts Prior $ 3,767 2011 $ 26,899 $ 34,597 $ 30,507 $ 29,749 $ 29,238 $ 28,794 $ 31,176 $ 31,018 $ 30,450 $ 27,245 — 1,466 2012 26,995 32,022 30,266 30,551 30,678 29,250 29,803 29,051 32,080 — 1,618 2013 36,900 36,992 34,287 33,773 26,428 25,859 25,890 25,594 16 1,650 2014 40,562 42,938 39,473 28,192 27,749 30,011 29,848 212 1,718 2015 54,269 58,501 69,660 67,924 70,154 71,038 846 1,814 2016 48,824 57,296 55,607 53,398 54,398 884 1,999 2017 33,108 36,102 36,489 33,730 1,165 2,545 2018 35,839 33,909 31,452 2,44 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
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 taxation until March 2035. As part of the 2019 restructuring, PSBL became a direct subsidiary of the Company and is subject to U.S. tax on its income. 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 year ended December 31, 2018. 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, 2020 and 2019, are as follows: December 31 ($ in thousands) 2020 2019 Deferred tax assets: Loss reserves $ 14,568 $ 13,289 Loss reserves transitional adjustment 6,104 6,104 Unearned premiums 15,250 16,785 Net operating loss carry forwards – state and local 17,444 17,008 Net operating loss carry forwards – federal 646 357 Capital loss carry forwards – federal 145 1,519 Bad debt reserve 3,019 3,229 Impairments 987 517 Deferred compensation 5,268 5,659 Amortization of intangibles 578 695 Limited partnership income 334 2,566 Lease liabilities 602 — Other 2,405 3,151 Total deferred tax assets 67,350 70,879 Less: valuation allowance (18,081) (17,604) Deferred tax assets, net of allowance 49,269 53,275 Deferred tax liabilities: Deferred policy acquisition costs 19,856 20,693 Loss reserve transitional adjustment 3,815 4,578 Fair value adjustments 3,622 3,628 Lease right-of-use assets 587 — Unrealized appreciation of investments 22,632 8,669 Other 8,894 10,904 Total deferred tax liabilities 59,406 48,472 Net deferred income taxes $ (10,137) $ 4,803 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 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, 2020 is $3.8 million. On March 27, 2020, the President of the United States signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act, among other things, includes certain income tax provisions for individuals and corporations; however, these benefits do not impact the Company’s current tax provision. At December 31, 2020 and 2019, the U.S. federal NOLs that can be carried forward are $0.6 million and $0.4 million, respectively. As a result of the Company being able to fully utilize the remaining federal NOL after the valuation allowance, NOLs of $3.1 million, which were a component of discontinued operations, were reclassed to continuing operations as of December 31, 2020. At December 31, 2020 and 2019, the state and local tax benefit of NOLs that can be carried forward are $17.4 million and $17.0 million, respectively, which is included in the state and local deferred tax asset. There were $0.1 million and $1.5 million of realized capital loss benefits that can be carried forward for the years ended December 31, 2020 and 2019, respectively. The range of years in which the federal NOLs can be brought forward against future tax liabilities is from 2020 through 2030. The table below shows the tax benefit of the U.S. federal NOLs generated by year and expiration date: ($ in thousands) Amount Expires 2010 $ 646 2030 Total $ 646 The Company’s valuation allowance account with respect to the deferred tax asset and the change in the account is as follows: ($ in thousands) 2020 2019 Balance, beginning of year $ 17,604 $ 16,962 Change in valuation allowance 477 642 Balance, end of year $ 18,081 $ 17,604 As of December 31, 2020, the Company’s valuation allowance of $18.1 million is attributable to the uncertainty in the realization of certain deferred tax assets attributable to U.S. federal and state NOLs. The Company files tax returns subject to the tax regulations of federal, state and local tax authorities. A tax benefit taken in the tax return but not in the financial statements is known as an “unrecognized tax benefit.” A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: ($ in thousands) 2020 2019 Balance, beginning of year $ 438 $ 528 Additions for tax positions of prior years 34 260 Reductions for tax positions of prior years (379) (350) Balance, end of year $ 93 $ 438 As of December 31, 2020, the Company recorded insignificant amount of interest and penalties and reduced its positions by $0.3 million as a result of an audit settlement. The income tax provisions differ from the amounts computed by applying the federal statutory rate to the income before income taxes due to the following: ($ in thousands) 2020 2019 2018 Expected tax expense at statutory rates in taxable jurisdictions $ 8,083 $ 12,103 $ 13,896 Tax-exempt interest (9) — (46) State taxes (377) (629) (10,746) Valuation allowance 477 642 10,451 Effect of provision to tax return filing adjustments — 42 — Goodwill impairment 2,501 — — Other 65 (21) (166) Total income tax expense $ 10,740 $ 12,137 $ 13,389 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 $5.6 million and $0.1 million of U.S. income taxes paid for the years ended December 31, 2020 and 2018, respectively. There were $0.8 million of U.S. income taxes received for the year ended December 31, 2019. The U.S. federal income tax recoverable included in other assets amounted to $1.6 million, $0.2 million and $0.8 million for the years ended December 31, 2020, 2019 and 2018, respectively. The Company files a consolidated federal income tax return with PSBL. 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. The Company’s 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. Currently, the Company’s non-insurance subsidiaries are under an income tax examination in New York State for tax years 2015 through 2018. 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. As of December 31, 2020, a valuation allowance of $0.6 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, 2020 | |
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, 2020, 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 $66.8 million. Factors affecting the ability to pay dividends include levels of investment income in recent years and the Company’s statutory surplus position of the Company. Combined statutory net income and surplus of the Company’s domestic insurance subsidiaries as reported in the Combined Annual Statement were as follows: ($ in thousands) 2020 2019 2018 Combined statutory net income $ 37,533 $ 55,681 $ 33,147 Combined statutory surplus $ 668,060 $ 568,777 $ 473,575 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, 2020 | |
Debt | |
Debt | 14. Debt In November 2013, the Company issued $140.0 million of 7.5% senior unsecured notes (“Senior Unsecured Notes”) due November 2020 and provided for semi-annual interest payments. The Company repaid the Senior Unsecured Notes in its entirety on November 25, 2020. In January 2015, the Company issued an additional $25.0 million 6.5% senior notes (“Senior Notes”) due November 2020 and provided for semi-annual interest payments. The Company repaid the Senior Notes in its entirety on November 25, 2020. Termination of the Prior Credit Agreement The Company, as borrower, was a party to a revolving loan agreement (the “Prior Credit Agreement”) dated January 29, 2018 and amended on March 15, 2019, for $50.0 million which was scheduled to mature on the earlier of (i) March 15, 2022, or (ii) 91 days before maturity of the Company’s 7.5% Senior Unsecured Notes due November 2020 and the Company’s 6.5% Senior Unsecured Notes due November 2020 (collectively, the “Notes”) or, if the Notes are amended or replaced, 91 days before the maturity of such amendment or replacement. The Company exercised its termination rights under the Prior Credit Agreement on June 12, 2020. There were no borrowings under the Prior Credit Agreement on the date of termination. Credit Agreement On June 12, 2020, the Company entered into a credit agreement (the “Credit Agreement”) with third-party lenders and an administrative agent. The Credit Agreement, which matures on June 11, 2023, provides for (i) a delayed draw term loan facility in the aggregate principal amount of up to $165.0 million (the “Term Loan Facility”), and (ii) an uncommitted revolving credit facility of up to $35.0 million (the “Revolving Credit Facility”), for which commitments had not been obtained as of the closing date. Interest on borrowings under the Term Loan Facility and the Revolving Credit Facility are calculated at each drawdown date based on variable rates described in the Credit Agreement. On November 25, 2020, the Company drew down $165.0 million under the Term Loan Facility and used the proceeds to fully redeem the Senior Unsecured Notes and Senior Notes. Debt issuance costs of $4.6 million related to the Credit Agreement were incurred and are being amortized over the life of the loan. Incremental Facility Agreement On June 30, 2020, the Company entered into an Incremental Facility Agreement and Amendment (the “Agreement”), in the aggregate amount of $65.0 million, subject to the terms of the Credit Agreement. The Agreement had lenders commit to the previously uncommitted Revolving Credit Facility, and increased the available amount from the $35.0 million noted above to an aggregate of $65.0 million. Debt issuance costs of $0.5 million related to the Agreement were incurred and are being amortized over the life of the agreement. On July 14, 2020, the Company drew down $5.0 million on the Revolving Credit Facility and on August 3, 2020, the Company drew down an additional $30.0 million, primarily to make capital contributions to its insurance subsidiaries. On November 25, 2020, the Company drew down $7.0 million, and used the proceeds to make interest payments on the Unsecured Senior Notes and Senior Notes. Secured Loan Payable In June 2020, the Company entered into a $24.9 million lease transaction that for accounting purposes is treated as a loan secured by a portion of the Company’s fixed assets and capitalized software, payable at 4.83% interest with a maturity date of July 1, 2025 and providing for monthly interest and principal payments. Interest Expense and Amortization Related to Debt Issuance Costs Interest expense was $13.1 million, $12.8 million and $12.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. Amortization expense related to debt issuance costs was $1.2 million, $0.3 million and $0.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 15. Commitments and Contingencies Leases The Company determines if an arrangement is a lease on the commencement date of the contract. The right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. The right-of-use assets and lease liabilities are measured by the present value of the future minimum lease payments over the lease term. The Company uses the rate implicit in the lease whenever that rate is readily determinable. If the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate. The right-of-use asset is then adjusted to exclude lease incentives. Certain leases may contain rental escalation, renewal options and/or termination options that are factored into our determination of lease payments when appropriate. Variable lease payment amounts that cannot be determined at the commencement of the lease are not included in the right-to-use assets or lease liabilities. Leases covering a period of fewer than 12 months are not recorded on the Company’s consolidated balance sheets. Rent expense is calculated using the straight-line method. The Company leases certain facilities and equipment under non-cancelable lease agreements that expire at various dates through 2025, which are generally renewed or replaced by similar leases. The lease agreements do not contain any material restrictive covenants, do not contain any conditions of residual value guarantees and are substantially all considered to be operating leases. The Company’s leases relate to office facilities in New Jersey, California, Florida, Georgia and the U.K. The weighted average lease term was 2.7 years and the weighted average discount rate was 2.0%. Rent expense for the years ended December 31, 2020, 2019 and 2018 was $3.0 million, $3.3 million and $3.1 million, respectively. The operating leases also include provisions for additional payments based on certain annual cost increases. The following table presents the Company’s lease liabilities and right-of-use assets related to operating leases as of December 31, 2020: ($ in thousands) December 31, 2020 One year or less $ 2,922 More than one year to two years 214 More than two years to three years — More than three years to four years — More than four years to five years — More than five years — Total undiscounted future minimum lease payments 3,136 Less: difference between lease payments and discounted lease liabilities 37 Lease liabilities $ 3,099 Right-of-use assets $ 2,794 Prepaid lease assets, net of lease allowances and incentives 305 Total $ 3,099 The right-of-use assets lease liabilities The lease of the U.K. office had rent expense of $0.5 million for the years ended December 31, 2020 Fiduciary Funds The Company’s insurance agency subsidiary maintains separate underwriting accounts, which record all of the underlying insurance transactions of the insurance pools that it manages. These transactions primarily include collecting premiums from the insureds, collecting paid receivables from reinsurers, paying claims as losses become payable, paying reinsurance premiums to reinsurers, and remitting net account balances to member insurance companies in the pools that PSMC manages. Unremitted amounts to members of the insurance pools are held in a fiduciary capacity and interest income earned on such funds inures to the benefit of the members of the insurance pools based on their pro rata participation in the pools. Additionally, the Company’s insurance agency subsidiary, in its contractual role as escrow agent, receives and disburses bond funds for entertainment film projects for its insureds. A summary of the fiduciary and pools’ underwriting accounts as of December 31, 2020 and 2019, is as follows: ($ in thousands) 2020 2019 Assets held on behalf of unaffiliated pool members $ 1,495 $ 10,522 Escrow bond arrangements 571 1,014 Total $ 2,066 $ 11,536 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, 2020 the Company had $18.2 million in unfunded commitments related to limited partnerships and a fixed maturity security. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
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, and the Company adopted a new plan, the 2019 Equity Incentive Plan (the “2019 Plan”) 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 share awards (“RSAs”), RSUs, dividend equivalent rights, performance-based shares, performance-vesting share awards (“PSAs”) 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 The following is a summary of the equity-based compensation included in the 2019 Plan, including the number of common stock shares granted to each award: (i) Annual long-term equity incentive plan awards (“Annual LTIP Awards”): Annual LTIP Awards in 2019 included time-vesting RSUs and performance-vesting RSUs (“PSUs). Annual LTIP Awards in 2020 included RSUs, PSUs, RSAs, and PSAs. RSUs vest annually over three years subject to continued employment through each such date. 142,739 and 90,559 time-vesting RSUs were granted in 2020 and 2019 and the fair value of the awards on grant date was $1.8 million and $1.3 million, respectively. RSAs vest annually over three years subject to continued employment through each such date. 110,466 time-vesting RSAs were granted in 2020 and the fair value of the awards on grant date was $1.5 million. PSUs vest based on the average book value per share growth over a three-year performance period and cliff vest on the third PSAs vest based on the average book value per share growth over a three-year performance period and cliff vest on the third (ii) Supplemental RSUs: 1,267,912 supplemental RSU awards, 100% of which are time-vesting RSUs, were granted to management on July 25, 2019 in connection with the IPO and are 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 at grant date was $17.8 million. (iii) Founders grant awards: 250,000 founders grant awards in the form of time-vesting RSUs were granted on July 25, 2019. The fair value of the grants was $3.5 million and will cliff vest on the third anniversary of the grant date. (iv) Non-employee Director RSUs: In 2020, 106,460 RSUs with a fair value of $0.9 million were granted to non-employee directors. In 2019, 33,839 RSUs, 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 were granted to non-employee directors. These awards were fully vested on grant date. (v) Pre-IPO RSUs: 668,170 RSUs initially granted under the 2010 Plan were converted into RSUs based on shares of the Company’s common stock upon the consummation of the IPO merger of PGHL into PGI. Stock-based compensation expense was $8.9 million, $8.6 million and $0.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. The tax benefit recognized for the same was $1.9 million, $1.8 million and $0.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. Vested RSUs awaiting conversion into common stock were 489,439 for the year ended December 31, 2020, 906,182 for the year ended December 31, 2019 and 548,292 for the year ended December 31, 2018. The Company began recognizing stock-based compensation expense relating to its 2019 Plan upon its inception and initial stock grants in July 2019. The following table summarizes equity award transactions for the 2019 Plan for the years ended December 31, 2020 and 2019: Weighted Number of Average Grant Date Shares Fair Value Per Share 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 Granted in 2020 593,147 12.30 Vested in 2020 (134,001) 9.96 Forfeited in 2020 (43,101) 13.58 Unvested at December 31, 2020 1,705,441 $ 13.46 As of December 31, 2020, The Company had approximately $11.8 million of total unrecognized stock-based compensation expense related to the equity awards expected to be recognized over a weighted-average period of 1.6 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 has full authority to interpret the terms of the 2019 ESPP. The 2019 ESPP is a shareholder-approved plan under which substantially all employees may purchase the Company’s common stock through payroll deductions at a price equal to 90% of the fair market value of the stock on the purchase date at the end of the offering period. An employee’s payroll deductions under the Purchase Plan are limited to 15% of the employee’s compensation and employees may not purchase more than $25,000 of stock during any calendar year. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2020 | |
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 equal to 100% subject to a maximum of 6% of eligible compensation contributed to the plan as deferral contributions. Expense recorded for this plan was $2.2 million, $1.8 million and $2.1 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Information | |
Segment Information | 18. Segment Information The Company has one reportable segment, Specialty Insurance segment, which primarily offers property and casualty insurance products through its customers segments that include Construction, Consumer Services, Marine and Energy, Media and Entertainment, Professional Services, Real Estate, Sports, and Transportation. The primary criteria to determine the Company’s reportable segment is based on the fact that the Company’s senior management reviews, assesses and allocates resources both on a financial and personnel basis on an entity-wide level. The following table provides a summary of the Company’s gross written premiums by customer segments within our Specialty Insurance segment. “Other” includes gross written premiums from: (i) primary and excess workers’ compensation coverage for exited Self-Insured Groups; (ii) niches exited prior to 2018, many with a concentration in commercial auto; (iii) participation in industry pools; and (iv) emerging new business. Years Ended December 31 ($ in thousands) 2020 2019 2018 Customer segment Construction $ 109,955 13.5 % $ 117,918 12.2 % $ 101,946 11.4 % Consumer Services 123,011 15.0 133,682 13.8 107,086 12.0 Marine and Energy 110,228 13.5 94,700 9.8 83,104 9.3 Media and Entertainment 88,788 10.9 124,950 12.9 119,926 13.4 Professional Services 130,893 16.0 119,326 12.3 110,546 12.3 Real Estate 159,166 19.5 167,635 17.3 132,652 14.8 Sports 23,337 2.8 30,079 3.1 23,590 2.6 Transportation 64,559 7.9 112,191 11.6 92,169 10.3 Customer segment subtotal 809,937 99.1 900,481 93.0 771,019 86.1 Other 7,153 0.9 67,530 7.0 124,093 13.9 Specialty Insurance total $ 817,090 100.0 % $ 968,011 100.0 % $ 895,112 100.0 % 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) 2020 2019 2018 Line of business Commercial Auto $ 167,219 20.5 % $ 205,303 21.2 % $ 151,612 16.9 % General Liability 335,864 41.1 335,197 34.6 277,948 31.1 Workers’ Compensation 72,352 8.8 179,432 18.6 246,302 27.5 Commercial Multiple Peril 56,498 6.9 82,126 8.5 67,351 7.5 All Other Lines 185,157 22.7 165,953 17.1 151,899 17.0 Specialty Insurance total $ 817,090 100.0 % $ 968,011 100.0 % $ 895,112 100.0 % |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
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 2020 (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS: Net income (loss) available to common stockholders $ 27,750 43,888 $ 0.63 $ (5,522) 43,888 $ (0.12) Effect of dilutive securities: Stock compensation plans 229 229 Diluted EPS $ 27,750 44,117 $ 0.63 $ (5,522) 44,117 $ (0.13) 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 |
Quarterly Financial Information
Quarterly Financial Information | 12 Months Ended |
Dec. 31, 2020 | |
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 2020 Gross written premiums $ 213,784 $ 186,394 $ 203,539 $ 213,373 $ 817,090 Revenues 214,821 207,412 194,142 199,732 816,107 Net income from continuing operations 6,811 17,283 1,498 2,158 27,750 Net income (loss) 7,068 17,562 1,518 (3,920) 22,228 Basic earnings per share - continuing operations 0.16 0.39 0.03 0.05 0.63 Diluted earnings per share - continuing operations 0.15 0.39 0.03 0.05 0.63 Basic earnings (loss) per share 0.16 0.40 0.03 (0.09) 0.51 Diluted earnings (loss) per share 0.16 0.40 0.03 (0.09) 0.50 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 |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 31, 2020 | |
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. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events | |
Subsequent Events | 22. Subsequent Events On January 14, 2021, the Company entered into the Merger Agreement with Parent and Pedal Merger Sub, Inc., pursuant to which, subject to the terms and conditions of the Merger Agreement, Pedal Merger Sub, Inc. would merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent. In connection with the proposed merger, each ProSight common share held by our stockholders will be converted into the right to receive $12.85 in cash valued at approximately $586.0 million. The proposed merger is anticipated to close in the third quarter of 2021, subject to satisfaction or waiver of the closing conditions, including approval by regulatory authorities. The stockholder approval required to consummate the proposed merger has been obtained, and no further action by our stockholders in connection with the proposed merger is required. |
Schedule II
Schedule II | 12 Months Ended |
Dec. 31, 2020 | |
Schedule II | |
Condensed Financial Information of Registrant | ProSight Global, Inc. Condensed Financial Information of Registrant Balance Sheets December 31 ($ in thousands, except per share amounts) 2020 2019 Assets Investment in subsidiaries $ 825,713 $ 702,977 Cash and cash equivalents 619 773 Total cash and investments 826,332 703,750 Receivables from affiliates 7,507 6,580 Other assets 1,189 747 Total assets $ 835,028 $ 711,077 Liabilities Payables to affiliates $ 5,614 $ 1,263 Notes payable, net of debt issuance costs 203,267 164,693 Other liabilities 2,179 2,090 Total liabilities 211,060 168,046 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; 43,449,087 and 43,071,186 shares issued, 43,436,167 and 43,058,266 shares outstanding in 2020 and 2019, respectively 434 431 Paid-in capital 668,798 661,761 Accumulated other comprehensive income 89,122 37,453 Retained deficit (134,186) (156,414) Treasury shares – at cost (12,920 shares) (200) (200) Total stockholders’ equity 623,968 543,031 Total liabilities and stockholders’ equity $ 835,028 $ 711,077 ProSight Global, Inc. Condensed Financial Information of Registrant Statements of Operations Years Ended December 31 ($ in thousands) 2020 2019 2018 Revenues: Other income $ 30 $ 33 $ 165 Total revenues 30 33 165 Expenses: General and administrative expenses 1,079 714 5,325 Write-off of amounts related to sale of affiliate — — 650 Intercompany interest expense (income) — 18 (27) Interest expense 13,768 12,795 12,377 Other expense 5,484 8,164 — Total expenses 20,331 21,691 18,325 Loss before federal income taxes (20,301) (21,658) (18,160) Federal income tax benefit 2,363 4,669 3,284 Net loss from continuing operations before equity in undistributed net income of subsidiaries (17,938) (16,989) (14,876) Equity in undistributed net income of subsidiaries, net of tax 40,166 55,879 69,419 Net income $ 22,228 $ 38,890 $ 54,543 ProSight Global, Inc. Condensed Financial Information of Registrant Statements of Cash Flows Years Ended December 31 ($ in thousands) 2020 2019 2018 Operating Activities: Net income $ 22,228 $ 38,890 $ 54,543 Adjustments to reconcile net income to net cash used in operating activities: Amortization of debt issuance costs 1,240 338 338 Equity in undistributed net income of subsidiaries, net of tax (40,166) (55,879) (69,419) Changes in: (Increase) decrease in receivables from affiliates (927) 5,882 (9,957) Increase (decrease) in payables to affiliates 4,351 (8,277) 4,872 (Decrease) increase in other assets (16) 3,844 (1,673) Decrease in loans to affiliates — (3,173) — Increase (decrease) in other liabilities 89 (3,022) (6,426) Total adjustments (35,429) (60,287) (82,265) Net cash used in operating activities (13,201) (21,397) (27,722) Investing activities: Net cash provided by (used in) investing activities — — — Financing activities Proceeds from shares issued — 50,878 — Payments related to offering costs (49) — — Proceeds from notes payable, net of debt issuance costs 201,908 — 18,000 Repayment of notes payable (165,000) (18,000) — Tax withholding on stock compensation awards (2,578) (740) — Proceeds from stock purchase plan 165 — — Capital contributions to affiliates (21,399) (10,490) 9,747 Net cash provided by financing activities 13,047 21,648 27,747 Net (decrease) increase in cash and cash equivalents (154) 251 25 Cash and cash equivalents at beginning of year 773 522 497 Cash and cash equivalents at end of year $ 619 $ 773 $ 522 |
Schedule V
Schedule V | 12 Months Ended |
Dec. 31, 2020 | |
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, 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 Additions 3,197 — Deductions (1,336) (2,381) December 31, 2020 $ 6,917 $ 8,490 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
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 Maturity Securities Fixed maturity 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 maturity 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 maturity 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. Non-Redeemable Preferred Stock Securities Non-redeemable preferred stock securities with readily determinable fair values are recorded at fair value. Bond Exchange-Traded Funds Bond exchange-traded funds with readily determinable fair values are recorded at fair value. 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. Credit Losses The Company analyzes fixed maturity securities in an unrealized loss position for credit losses if they meet the following criteria: (i) they are trading in a significant loss position; (ii) failure of the issuer of the security to make scheduled interest or principal payments; (iii) there have been negative credit events with respect to the issuer; or (iv) there have been negative current events surrounding an issuer or the environment in which an issuer operates. For fixed maturity securities in an unrealized loss position that require a credit loss analysis, the Company estimates a present value of expected cash flows. If the results of the cash flow analysis indicate that the Company will not recover the full amount of its amortized cost basis, the Company records a credit loss for the excess of amortized cost over the present value of expected cash flows, not to exceed the unrealized loss. Changes in the credit loss allowance are recognized through realized investment gains, net on the consolidated statements of operations. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments For fixed maturity 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 allowance for credit loss for premium receivable is an assessment of ultimate non-collectability based on historical experience applicable to the respective current collection action status, age of the amount outstanding and expected collection costs. |
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 a reinsurance receivable allowance for credit losses based on sources of credit ratings of reinsurers and applies probabilities of default and loss given default to the total uncollateralized exposure including incurred but not reported (“IBNR”) by rating class. 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 three Capitalized software as of December 31, 2020 and 2019, had unamortized balances of $31.4 million and $33.8 million, respectively. Depreciation on capitalized software commences once the software is placed into service. The Company recorded depreciation expense of $7.9 million, $7.0 million and $5.8 million for the years ended 2020, 2019 and 2018, respectively. Other depreciable assets, primarily leasehold improvements, as of December 31, 2020 and 2019, had unamortized balances of $2.4 million and $3.3 million, respectively. The Company recorded depreciation expense of $1.1 million and $1.2 million and $1.5 million, for the years ended 2020, 2019 and 2018, 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 (“NOLs”) 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 On March 27, 2020, the President of the United States signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act, among other things, includes certain income tax provisions for individuals and corporations; however, these benefits do not impact the Company’s current tax provision. |
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 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 2020 were discounted at discount rates between 2.04% and 5.00%. Carried discounted reserves on these workers’ compensation claims, net of reinsurance, were $122.1 million and $116.9 million at December 31, 2020 and 2019, respectively. The amount of discount related to workers’ compensation reserves was $48.2 million and $47.4 million at December 31, 2020 and 2019, 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 489,439 for the year ended December 31, 2020, 906,182 for the year ended December 31, 2019 and 548,292 for the year ended December 31, 2018. 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, 2020, 2019 and 2018. |
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 in Note 18. Segments. |
Statements of Cash Flow (Tables
Statements of Cash Flow (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Statements of Cash Flow | |
Summary of supplemental cash flow information | December 31 ($ in thousands) 2020 2019 2018 Cash paid (received) during the period for: Interest $ 12,915 $ 12,865 $ 12,377 Federal income tax $ 5,553 $ (780) $ 135 Non-cash activity: Operating lease right-of-use assets due to the adoption of ASU 2016-02 - continuing operations $ 2,794 $ — $ — Operating lease right-of-use assets due to the adoption of ASU 2016-02 - discontinued operations $ 2,173 $ — $ — Operating lease liabilities due to the adoption of ASU 2016-02 - continuing operations $ 3,099 $ — $ — Operating lease liabilities due to the adoption of ASU 2016-02 - discontinued operations $ 2,508 $ — $ — Tax benefit on payments related to offering costs $ 635 $ — $ — |
Goodwill and Net Intangible A_2
Goodwill and Net Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Net Intangible Assets | |
Schedule of goodwill and other intangible assets | ($ in thousands) Goodwill Other Intangibles Total December 31, 2018 $ 11,911 $ 17,308 $ 29,219 Amortization — 30 30 December 31, 2019 $ 11,911 $ 17,278 $ 29,189 Amortization — 30 30 Impairment 11,911 — 11,911 December 31, 2020 $ — $ 17,248 $ 17,248 The status of the goodwill and net intangible assets is presented in the following tables: Accumulated ($ in thousands) Gross Amortization Impairment Net Useful Life December 31, 2020 Goodwill $ 11,911 $ — $ (11,911) $ — Indefinite State licenses 17,100 — — 17,100 Indefinite Other 178 (30) — 148 15 years Net balance $ 29,189 $ (30) $ (11,911) $ 17,248 December 31, 2019 Goodwill $ 11,911 $ — $ — $ 11,911 Indefinite State licenses 17,100 — — 17,100 Indefinite Other 208 (30) — 178 Varies up to 15 years Net balance $ 29,219 $ (30) $ — $ 29,189 |
Schedule of estimated amortization of intangible assets | ($ in thousands) 2021 $ 30 2022 30 2023 30 2024 30 2025 28 $ 148 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations | |
Summary of results of operations and carrying amounts of assets and liabilities for discontinued operations | Years Ended December 31 ($ in thousands) 2020 2019 2018 Revenues Net earned premiums $ 295 $ 611 $ 1,173 Net investment income 73 142 514 Realized investment gains, net 1,260 1,267 830 Other income — — 338 Total revenues 1,628 2,020 2,855 Expenses Net losses and loss adjustment expenses incurred 8,295 10,463 11,197 Policy acquisition expenses 93 218 401 General and administrative expenses 823 57 (8,401) Interest expense — — 218 Total expenses 9,211 10,738 3,415 Loss from discontinued operations before income taxes (7,583) (8,718) (560) Income tax benefit (2,061) (2,114) (1,374) Net (loss) income from discontinued operations $ (5,522) $ (6,604) $ 814 December 31 ($ in thousands) 2020 2019 Assets Cash and investments $ 10,939 $ 10,428 Other assets 10,415 11,156 Total assets $ 21,354 $ 21,584 Liabilities Reserve for unpaid losses and loss adjustment expenses $ 32,414 $ 24,169 Other liabilities 5,315 7,409 Total liabilities $ 37,729 $ 31,578 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments | |
Summary of the Company's investment components | December 31 ($ in thousands) 2020 2019 Fixed maturity securities, AFS (fair value): U.S. Treasury securities $ 52,157 2.2 % $ 49,985 2.3 % Government agency securities 31,007 1.3 6,531 0.3 Corporate debt securities 1,397,031 57.7 1,338,812 61.8 Municipal debt obligations 207,094 8.5 79,815 3.7 ABS 55,258 2.3 73,582 3.4 CLO 139,126 5.7 179,549 8.3 CMBS 117,960 4.9 97,526 4.5 RMBS – non-agency 116,136 4.8 71,610 3.3 RMBS – agency 150,288 6.2 143,272 6.6 Total fixed maturity securities, AFS 2,266,057 93.6 2,040,682 94.2 Short-term investments 154 0.0 43,873 2.0 Commercial levered loans (amortized cost) 12,308 0.5 14,069 0.7 Non-redeemable preferred stock securities 7,049 0.3 — — Bond exchange-traded funds 44,882 1.9 — — Limited partnerships and limited liability companies (fair value) 90,468 3.7 66,660 3.1 Total investments $ 2,420,918 100.0 % $ 2,165,284 100.0 % |
Summary of gross unrealized gains and losses on fixed maturity securities included in assets | Cost/ Gross Gross Amortized Credit Loss Unrealized Unrealized Fair ($ in thousands) Cost Allowance Gains Losses Value Fixed maturity securities: U.S. Treasury securities $ 50,248 $ — $ 1,909 $ — $ 52,157 Government agency securities 30,446 — 561 — 31,007 Corporate debt securities 1,317,667 (598) 86,447 (6,485) 1,397,031 Municipal debt obligations 198,773 — 8,437 (116) 207,094 ABS 54,989 — 696 (427) 55,258 CLO 140,615 — 154 (1,643) 139,126 CMBS 111,313 — 7,008 (361) 117,960 RMBS - non-agency 109,110 (859) 8,619 (734) 116,136 RMBS - agency 146,582 — 3,721 (15) 150,288 Total fixed maturity securities $ 2,159,743 $ (1,457) $ 117,552 $ (9,781) $ 2,266,057 The gross unrealized gains and losses on fixed maturity 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 maturity 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 maturity securities $ 1,999,403 $ 48,403 $ (7,124) $ 2,040,682 |
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 | 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 Corporate debt securities $ 36,450 $ (740) $ 101,628 $ (5,745) $ 138,078 $ (6,485) Municipal debt obligations 12,211 (73) 3,344 (43) 15,555 (116) ABS 9,121 (364) 9,461 (63) 18,582 (427) CLO 29,909 (215) 82,758 (1,428) 112,667 (1,643) CMBS 17,559 (348) 800 (13) 18,359 (361) RMBS - non-agency 11,759 (249) 6,723 (485) 18,482 (734) RMBS - agency 2,467 (15) — — 2,467 (15) Total fixed maturity securities $ 119,476 $ (2,004) $ 204,714 $ (7,777) $ 324,190 $ (9,781) The following table summarizes the fair values and gross unrealized losses for fixed maturity securities in an unrealized loss position at December 31, 2019, grouped by asset class and by duration of time in a continuous unrealized 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 fixed maturity securities $ 290,187 $ (3,930) $ 200,992 $ (3,194) $ 491,179 $ (7,124) |
Rollforward of the credit losses allowance for fixed maturity securities | December 31, Additions Reduction Reduction Change in Securities December 31, ($ in thousands) 2019 New Securities Sales Intent to Sell with Previous Allowance 2020 Fixed maturity securities: Corporate debt securities $ — $ 1,166 $ (121) $ — $ (447) $ 598 ABS — 180 (3) — (177) — CLO — 6 — — (6) — RMBS - non-agency — 1,151 (111) — (181) 859 Total fixed maturity securities allowance $ — $ 2,503 $ (235) $ — $ (811) $ 1,457 |
Summary of amortized cost and fair value of fixed maturity securities | December 31, 2020 Amortized Fair ($ in thousands) Cost Value Due in one year or less $ 103,243 $ 104,316 Due after one through five years 628,897 657,996 Due after five through ten years 522,749 561,775 Due after ten years 311,799 332,195 1,566,688 1,656,282 Structured securities: Government agency securities 30,446 31,007 ABS 54,989 55,258 CLO 140,615 139,126 CMBS 111,313 117,960 RMBS - non-agency 109,110 116,136 RMBS - agency 146,582 150,288 Total fixed maturity securities $ 2,159,743 $ 2,266,057 |
Summary of net investment income included in net income from continuing operations | ($ in thousands) 2020 2019 2018 Fixed maturity securities $ 62,621 $ 66,975 $ 55,765 Net limited partnerships and limited liability companies gains 11,690 3,101 1,081 Other 2,173 1,123 1,290 Gross investment income 76,484 71,199 58,136 Less: investment income attributable to funds withheld liabilities (250) (655) (912) Less: expenses (3,213) (1,647) (1,253) Net investment income $ 73,021 $ 68,897 $ 55,971 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Measurements | |
Summary of major categories of assets measured at fair value on a recurring basis | December 31, 2020 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 maturity securities: U.S. Treasury securities $ — $ 52,157 $ — $ 52,157 Government agency securities — 31,007 — 31,007 Corporate debt securities — 1,139,066 257,965 1,397,031 Municipal debt obligations — 207,094 — 207,094 ABS — 55,258 — 55,258 CLO — 139,126 — 139,126 CMBS — 117,960 — 117,960 RMBS - non agency — 116,136 — 116,136 RMBS - agency — 150,288 — 150,288 Total fixed maturity securities — 2,008,092 257,965 2,266,057 Non-redeemable preferred stock securities — 5,649 1,400 7,049 Bond exchange-traded funds 44,882 — — 44,882 Total categorized $ 44,882 $ 2,013,741 $ 259,365 2,317,988 Investments measured at net asset value: Limited partnerships and limited liability companies 90,468 Total of invested assets carried at fair value $ 2,408,456 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 maturity 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 categorized $ — $ 1,891,051 $ 149,631 2,040,682 Investments measured at net asset value: Limited partnerships and limited liability companies 66,660 Total of invested assets carried at fair value $ 2,107,342 |
Summary of carrying value and fair value of financial instruments that are not recognized or are not carried at fair value | December 31, 2020 Carrying Fair Value ($ in thousands) Value Total Level 1 Level 2 Level 3 Assets Commercial levered loans $ 12,308 $ 12,180 $ — $ — $ 12,180 Liabilities Notes payable 207,000 207,537 — 207,537 — Unamortized debt issuance costs (3,733) Notes payable, net of debt issuance costs $ 203,267 Secured loan payable 22,750 23,265 — 23,265 — Unamortized debt issuance costs (82) Secured loan payable, net of debt issuance costs $ 22,668 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) Notes payable, net of debt issuance costs $ 164,693 |
Summary of the changes in the fair value of securities measured using Level 3 inputs | Non-Redeemable Corporate Debt Preferred Stock Level 3 ($ in thousands) Securities Securities Total Fair value, December 31, 2018 $ 126,497 $ — $ 126,497 Total net gains (losses) for the period included in: Other comprehensive income 3,011 — 3,011 Net realized loss (5) — (5) Purchases 23,905 — 23,905 Sales — — — Issuances — — — Settlements (3,777) — (3,777) Transfers into Level 3 — — — Transfers out of Level 3 — — — Fair value, December 31, 2019 149,631 — 149,631 Total net gains (losses) for the period included in: Other comprehensive income 6,241 — 6,241 Net realized loss (5) — (5) Purchases 107,197 1,400 108,597 Sales — — — Issuances — — — Settlements (5,099) — (5,099) Transfers into Level 3 — — — Transfers out of Level 3 — — — Fair value, December 31, 2020 $ 257,965 $ 1,400 $ 259,365 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) | |
Summary of the components of accumulated other comprehensive (loss) income | ($ in thousands) Gross Tax Net December 31, 2017 $ 22,265 $ 2,968 $ 19,297 Unrealized holding losses on fixed maturity 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 maturity 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 Unrealized holding gains on fixed maturity securities 71,872 15,009 56,863 Amounts reclassified into net income 7,697 1,352 6,345 Amounts reclassified as credit losses (1,457) (306) (1,151) Other comprehensive income 65,632 13,963 51,669 December 31, 2020 $ 111,755 $ 22,633 $ 89,122 |
Summary of reclassifications out of accumulated other comprehensive (loss) income | Line in Consolidated ($ in thousands) Statements of Operations 2020 2019 2018 AOCI Unrealized gains (losses) on securities Realized investment gains (losses), net $ 7,697 $ 2,037 $ (1,557) Income tax expense 1,352 162 (429) Reclassification adjustment for credit losses included in net income Realized investment gains (losses), net (1,457) — — Income tax expense (306) — — Total reclassifications $ 5,194 $ 1,875 $ (1,128) |
Insurance Operations (Tables)
Insurance Operations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of reinsurance ceded and assumed relating to premiums written, earned premiums and losses and loss adjustment expenses | ($ in thousands) 2020 2019 2018 Written premiums Direct written premiums $ 814,266 $ 964,512 $ 889,526 Assumed from other companies 2,824 3,499 5,586 Ceded to other companies 122,912 115,871 45,038 Net written premiums $ 694,178 $ 852,140 $ 850,074 Earned premiums Direct earned premiums $ 846,749 $ 918,718 $ 844,234 Assumed from other companies 3,017 3,887 10,266 Ceded to other companies 112,011 114,751 123,715 Net earned premiums $ 737,755 $ 807,854 $ 730,785 Percent of amount assumed to net 0.4% 0.5% 1.4% Losses and loss adjustment expenses incurred Direct net losses and loss adjustment expenses incurred $ 553,967 $ 556,051 $ 485,770 Assumed from other companies 8,862 9,298 (3,209) Ceded to other companies 90,158 64,324 47,731 Net losses and loss adjustment expenses incurred $ 472,671 $ 501,025 $ 434,830 |
Summary of effects of the termination of Quota Share Arrangements on pre-tax income | ($ in thousands) 2020 2019 2018 (Return of ceded prepaid) ceded written premium $ — $ (3) $ (58,857) Ceded earned premium — (3) 14,560 (Increase) reduction to net loss and loss adjustment expenses incurred — (4,746) 9,514 Reduction to policy acquisition expenses — 4,743 3,955 Reduction to pre-tax income $ — $ — $ 1,091 |
Premium receivable allowance rollforward | ($ in thousands) Year Ended December 31, 2020 December 31, 2019 Current Provision Write-offs Recoveries December 31, 2020 Premium receivable $ 5,056 $ 2,642 $ (841) $ 60 $ 6,917 Reinsurance receivable on paid and unpaid losses 505 201 — — 706 Total receivable allowance $ 5,561 $ 2,843 $ (841) $ 60 $ 7,623 |
Summary of unpaid losses | ($ in thousands) 2020 2019 2018 Gross reserve for unpaid losses and loss expenses, at beginning of year $ 1,521,648 $ 1,396,812 $ 1,258,237 Ceded reserve for unpaid losses and loss expenses, at beginning of year 193,952 185,295 201,156 Net reserve for unpaid losses and loss expenses, at beginning of year 1,327,696 1,211,517 1,057,081 Add: Incurred losses and loss expenses occurring in the: Current year 456,724 482,989 439,847 Prior years 710 3,154 (5,017) Prior years attributable to adjusted premium 15,237 14,882 — Total net losses and loss adjustment expenses incurred 472,671 501,025 434,830 Less: Paid losses and loss expenses for claims occurring in the: Current year 47,937 66,522 47,734 Prior years 320,050 318,324 232,660 Total paid losses and loss expenses for claims 367,987 384,846 280,394 Net reserve for unpaid losses and loss expenses, at end of year 1,432,380 1,327,696 1,211,517 Ceded reserve for unpaid losses and loss expenses, at end of year 170,522 193,952 185,295 Gross reserve for unpaid losses and loss expenses, at end of year $ 1,602,902 $ 1,521,648 $ 1,396,812 |
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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Counts Prior $ 23,493 2011 $ 115,644 $ 128,879 $ 126,752 $ 122,773 $ 124,543 $ 131,081 $ 124,798 $ 131,385 $ 131,360 $ 131,113 6,974 4,421 2012 137,380 157,477 157,985 165,015 165,889 156,355 159,120 158,523 164,197 4,031 6,633 2013 210,368 222,277 232,660 251,353 243,567 237,900 249,802 252,393 13,838 13,246 2014 286,842 312,987 323,792 333,865 342,788 356,733 367,034 26,909 16,350 2015 384,269 407,279 407,427 395,751 430,942 433,918 34,523 20,896 2016 390,430 423,538 406,204 416,266 416,317 47,411 20,124 2017 354,948 361,299 339,505 354,402 110,963 18,763 2018 422,104 406,199 403,545 172,717 19,252 2019 457,973 460,080 231,758 21,018 2020 430,179 303,172 12,264 $ 3,413,178 $ 975,789 All Lines – Paid Unaudited For the Years Ended Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 14,796 $ 51,006 $ 65,103 $ 76,731 $ 88,243 $ 98,411 $ 105,584 $ 109,007 $ 111,247 $ 110,798 2012 16,619 48,276 73,249 98,960 119,374 130,200 136,909 139,793 148,826 2013 27,465 74,012 115,396 158,978 181,989 192,476 214,863 221,768 2014 44,738 111,919 166,907 217,986 250,928 280,933 305,157 2015 75,043 159,708 234,756 281,637 331,748 360,249 2016 78,271 150,198 204,589 266,496 316,092 2017 54,026 116,204 163,937 194,952 2018 45,012 112,889 163,878 2019 66,522 154,243 2020 66,226 2,042,189 Incurred less paid 1,370,989 Reserves 2010 and prior 55,436 Other (1) 5,955 Total net reserve for unpaid losses and loss adjustment expenses $ 1,432,380 (1) Other category represents unallocated loss adjustment expense reserves $40.3 million, discounting of loss reserves ($48.3) million, retroactive reinsurance agreements $10.8 million and other of $3.2 million. |
Schedule of historical average annual percentage payout of incurred claims, net of reinsurance | The following table presents the historical average annual percentage payout of incurred claims, net of reinsurance, as of December 31, 2020: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 14 % 19 % 14 % 13 % 11 % 7 % 7 % 2 % 4 % — % |
Schedule of the company's asbestos and environmental related losses | December 31, 2020 ($ in thousands) Gross Ceded Net Balance at beginning of year $ 12,810 $ 4,518 $ 8,292 Incurred losses and loss adjustment expense 175 36 139 Payments for losses and loss adjustment expenses 300 84 216 Balance at end of year $ 12,685 $ 4,470 $ 8,215 December 31, 2019 ($ in thousands) Gross Ceded Net Balance at beginning of year $ 14,262 $ 6,016 $ 8,246 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 $ 4,518 $ 8,292 |
Schedule of deferred policy acquisition costs, net of reinsurance | ($ in thousands) December 31, 2018 $ 93,613 Acquisition costs deferred 189,970 Acquisition costs expensed (184,771) December 31, 2019 98,812 Acquisition costs deferred 168,051 Acquisition costs expensed (172,426) December 31, 2020 $ 94,437 |
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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Counts Prior 2011 $ 13,864 $ 13,462 $ 11,260 $ 11,231 $ 12,547 $ 12,547 $ 12,508 $ 12,476 $ 12,476 $ 12,755 $ — 1,219 2012 21,101 29,959 36,319 43,031 42,028 41,479 41,572 39,231 40,112 — 1,746 2013 47,191 50,752 63,764 77,570 76,768 72,265 81,422 82,221 295 6,225 2014 74,185 95,283 105,528 112,157 113,747 113,790 115,781 735 8,232 2015 120,137 139,415 152,268 146,757 155,266 158,586 1,789 11,156 2016 114,568 124,760 119,931 124,166 129,184 3,616 9,651 2017 81,986 79,156 71,068 71,849 6,510 7,073 2018 87,993 78,777 82,562 14,403 7,216 2019 115,393 109,586 33,811 9,211 2020 98,045 62,409 5,403 $ 900,681 $ 123,568 Commercial Auto – Paid Unaudited For the Years Ended Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 4,717 $ 7,791 $ 7,250 $ 9,111 $ 11,587 $ 12,005 $ 12,123 $ 12,117 $ 12,128 $ 12,754 2012 6,660 15,397 25,280 33,248 39,680 40,852 41,305 38,657 40,090 2013 13,015 26,773 43,403 64,073 72,906 71,010 79,066 79,556 2014 21,692 52,048 74,431 96,385 108,102 110,883 113,915 2015 37,964 74,524 107,063 126,831 142,806 149,411 2016 39,580 63,123 83,161 102,003 118,545 2017 19,950 34,659 47,199 58,538 2018 16,709 32,698 52,510 2019 22,082 51,448 2020 17,198 693,965 Incurred less paid $ 206,716 |
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, 2020: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 22 % 22 % 19 % 17 % 12 % 2 % 5 % (2) % 3 % 5 % |
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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Counts Prior $ 6,356 2011 $ 45,894 $ 58,633 $ 61,398 $ 60,375 $ 63,264 $ 67,791 $ 62,127 $ 66,641 $ 64,682 $ 64,241 524 1,533 2012 42,685 43,677 38,288 42,401 45,771 46,312 48,096 50,509 51,503 1,292 1,488 2013 48,466 61,785 62,618 70,459 60,613 61,796 69,565 69,835 5,375 2,615 2014 70,878 77,255 78,801 93,468 104,281 114,976 120,427 11,986 3,103 2015 80,225 80,411 78,163 80,514 93,808 98,153 14,628 3,018 2016 93,737 101,479 92,401 91,228 98,812 20,493 2,898 2017 99,845 100,306 94,554 107,430 44,829 2,992 2018 142,486 137,525 137,672 79,149 3,113 2019 153,650 159,357 116,813 2,893 2020 164,875 149,052 2,076 $ 1,072,305 $ 450,497 General Liability – Paid Unaudited For the Years Ended Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 5,009 $ 18,912 $ 30,123 $ 37,344 $ 44,166 $ 50,136 $ 54,250 $ 56,659 $ 57,932 $ 59,367 2012 945 8,844 14,751 24,257 32,585 36,521 40,754 45,509 48,297 2013 1,930 10,941 22,152 36,493 46,821 55,148 66,439 69,798 2014 5,456 14,032 28,581 41,079 53,712 73,491 84,494 2015 5,404 14,720 25,931 39,407 61,168 75,037 2016 3,547 13,873 25,223 47,333 63,646 2017 2,596 11,279 26,354 40,828 2018 2,223 15,625 31,347 2019 3,487 18,404 2020 2,276 493,494 Incurred less paid $ 578,811 |
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, 2020: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 3 % 11 % 13 % 15 % 15 % 13 % 10 % 6 % 4 % 2 % |
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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Counts Prior $ 13,370 2011 $ 28,987 $ 22,186 $ 23,576 $ 21,411 $ 19,489 $ 21,943 $ 18,986 $ 21,247 $ 23,750 $ 26,870 6,450 203 2012 46,503 51,724 53,038 48,983 47,373 38,501 38,835 38,919 39,689 2,739 1,776 2013 76,844 71,683 70,939 68,109 71,532 69,729 64,727 66,457 8,150 2,702 2014 88,181 81,628 83,543 74,134 69,886 67,784 69,102 12,909 2,682 2015 101,762 101,410 89,383 82,212 87,570 81,504 13,798 3,891 2016 99,292 109,623 103,382 102,716 85,553 14,347 4,373 2017 102,250 101,691 93,134 85,197 45,929 4,698 2018 116,278 118,973 116,178 62,582 5,157 2019 97,485 94,627 52,783 5,081 2020 45,460 31,863 1,853 $ 710,637 $ 264,920 Workers’ Compensation – Paid Unaudited For the Years Ended Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 473 $ 4,148 $ 5,127 $ 5,503 $ 7,239 $ 8,662 $ 8,978 $ 9,971 $ 10,841 $ 11,525 2012 2,381 5,481 10,598 14,634 18,468 23,694 25,495 26,237 27,785 2013 2,639 12,579 20,520 26,088 29,036 32,962 35,793 38,745 2014 4,644 14,901 24,411 35,131 39,846 42,423 49,285 2015 6,504 18,434 27,423 33,543 38,061 42,790 2016 10,891 24,557 35,385 43,171 48,867 2017 8,631 22,462 30,776 27,305 2018 9,563 29,008 37,098 2019 9,745 26,871 2020 7,219 317,490 Incurred less paid $ 393,147 |
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, 2020: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 9 % 15 % 10 % 7 % 6 % 6 % 6 % 4 % 4 % 3 % |
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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Counts Prior 2011 $ — $ — $ 11 $ 7 $ 6 $ 6 $ 2 $ 2 $ 2 $ 2 $ — — 2012 96 94 73 49 39 813 813 813 813 — 5 2013 968 1,065 1,051 1,442 8,226 8,250 8,198 8,286 2 54 2014 13,037 15,884 16,448 25,915 27,126 30,172 31,876 1,067 615 2015 27,876 27,542 17,952 18,345 24,144 24,637 3,462 1,017 2016 34,010 30,379 34,883 44,758 48,370 8,071 1,203 2017 37,760 44,044 44,260 56,196 12,530 1,455 2018 39,507 37,015 35,681 14,143 1,237 2019 36,895 38,194 19,552 1,151 2020 47,101 25,682 906 $ 291,156 $ 84,509 Commercial Multiple Peril – Paid Unaudited For the Years Ended Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ — $ — $ — $ — $ — $ — $ 2 $ 2 $ 2 $ 2 2012 — — 1 1 2 813 813 813 813 2013 43 192 312 754 8,083 8,149 8,157 8,265 2014 1,795 4,271 7,358 20,545 22,880 26,366 27,666 2015 6,879 14,751 8,949 14,293 20,676 22,552 2016 4,974 7,028 16,715 27,870 36,813 2017 7,270 19,733 27,816 36,941 2018 5,323 11,953 16,420 2019 5,940 12,857 2020 13,054 175,383 Incurred less paid $ 115,773 |
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, 2020: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 16 % 16 % 10 % 23 % 22 % 10 % 3 % 1 % — % — % |
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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Counts Prior $ 3,767 2011 $ 26,899 $ 34,597 $ 30,507 $ 29,749 $ 29,238 $ 28,794 $ 31,176 $ 31,018 $ 30,450 $ 27,245 — 1,466 2012 26,995 32,022 30,266 30,551 30,678 29,250 29,803 29,051 32,080 — 1,618 2013 36,900 36,992 34,287 33,773 26,428 25,859 25,890 25,594 16 1,650 2014 40,562 42,938 39,473 28,192 27,749 30,011 29,848 212 1,718 2015 54,269 58,501 69,660 67,924 70,154 71,038 846 1,814 2016 48,824 57,296 55,607 53,398 54,398 884 1,999 2017 33,108 36,102 36,489 33,730 1,165 2,545 2018 35,839 33,909 31,452 2,440 2,529 2019 54,550 58,316 8,799 2,682 2020 74,698 34,166 2,026 $ 438,399 $ 52,295 All Other Lines – Paid Unaudited For the Years Ended Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 4,597 $ 20,155 $ 22,603 $ 24,773 $ 25,251 $ 27,608 $ 30,231 $ 30,259 $ 30,344 $ 27,150 2012 6,634 18,554 22,619 26,821 28,639 28,319 28,542 28,577 31,841 2013 9,838 23,526 29,009 31,569 25,144 25,206 25,408 25,404 2014 11,150 26,667 32,126 24,846 26,388 27,770 29,797 2015 18,292 37,279 65,390 67,563 69,037 70,459 2016 19,279 41,618 44,104 46,119 48,221 2017 15,580 28,070 31,792 31,340 2018 11,194 23,605 26,503 2019 25,268 44,663 2020 26,479 361,857 Incurred less paid $ 76,542 |
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, 2020: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 34 % 39 % 18 % 2 % — % 3 % 4 % — % 6 % (12) % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of components of deferred tax assets and liabilities | December 31 ($ in thousands) 2020 2019 Deferred tax assets: Loss reserves $ 14,568 $ 13,289 Loss reserves transitional adjustment 6,104 6,104 Unearned premiums 15,250 16,785 Net operating loss carry forwards – state and local 17,444 17,008 Net operating loss carry forwards – federal 646 357 Capital loss carry forwards – federal 145 1,519 Bad debt reserve 3,019 3,229 Impairments 987 517 Deferred compensation 5,268 5,659 Amortization of intangibles 578 695 Limited partnership income 334 2,566 Lease liabilities 602 — Other 2,405 3,151 Total deferred tax assets 67,350 70,879 Less: valuation allowance (18,081) (17,604) Deferred tax assets, net of allowance 49,269 53,275 Deferred tax liabilities: Deferred policy acquisition costs 19,856 20,693 Loss reserve transitional adjustment 3,815 4,578 Fair value adjustments 3,622 3,628 Lease right-of-use assets 587 — Unrealized appreciation of investments 22,632 8,669 Other 8,894 10,904 Total deferred tax liabilities 59,406 48,472 Net deferred income taxes $ (10,137) $ 4,803 |
Schedule of tax benefit of the U.S. federal NOLs generated by year and expiration date | ($ in thousands) Amount Expires 2010 $ 646 2030 Total $ 646 |
Schedule of change in valuation allowance account with respect to the deferred tax asset | ($ in thousands) 2020 2019 Balance, beginning of year $ 17,604 $ 16,962 Change in valuation allowance 477 642 Balance, end of year $ 18,081 $ 17,604 |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | ($ in thousands) 2020 2019 Balance, beginning of year $ 438 $ 528 Additions for tax positions of prior years 34 260 Reductions for tax positions of prior years (379) (350) Balance, end of year $ 93 $ 438 |
Summary of effective income tax rate reconciliation | ($ in thousands) 2020 2019 2018 Expected tax expense at statutory rates in taxable jurisdictions $ 8,083 $ 12,103 $ 13,896 Tax-exempt interest (9) — (46) State taxes (377) (629) (10,746) Valuation allowance 477 642 10,451 Effect of provision to tax return filing adjustments — 42 — Goodwill impairment 2,501 — — Other 65 (21) (166) Total income tax expense $ 10,740 $ 12,137 $ 13,389 |
Statutory Financial Informati_2
Statutory Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Statutory Financial Information | |
Schedule of statutory financial information | ($ in thousands) 2020 2019 2018 Combined statutory net income $ 37,533 $ 55,681 $ 33,147 Combined statutory surplus $ 668,060 $ 568,777 $ 473,575 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Schedule of lease liabilities and right-of-use lease assets | ($ in thousands) December 31, 2020 One year or less $ 2,922 More than one year to two years 214 More than two years to three years — More than three years to four years — More than four years to five years — More than five years — Total undiscounted future minimum lease payments 3,136 Less: difference between lease payments and discounted lease liabilities 37 Lease liabilities $ 3,099 Right-of-use assets $ 2,794 Prepaid lease assets, net of lease allowances and incentives 305 Total $ 3,099 |
Summary of the fiduciary and pools' underwriting accounts | ($ in thousands) 2020 2019 Assets held on behalf of unaffiliated pool members $ 1,495 $ 10,522 Escrow bond arrangements 571 1,014 Total $ 2,066 $ 11,536 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-Based Compensation | |
Summary of RSU transactions | Weighted Number of Average Grant Date Shares Fair Value Per Share 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 Granted in 2020 593,147 12.30 Vested in 2020 (134,001) 9.96 Forfeited in 2020 (43,101) 13.58 Unvested at December 31, 2020 1,705,441 $ 13.46 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Information | |
Summary of gross written premiums by customer segments | Years Ended December 31 ($ in thousands) 2020 2019 2018 Customer segment Construction $ 109,955 13.5 % $ 117,918 12.2 % $ 101,946 11.4 % Consumer Services 123,011 15.0 133,682 13.8 107,086 12.0 Marine and Energy 110,228 13.5 94,700 9.8 83,104 9.3 Media and Entertainment 88,788 10.9 124,950 12.9 119,926 13.4 Professional Services 130,893 16.0 119,326 12.3 110,546 12.3 Real Estate 159,166 19.5 167,635 17.3 132,652 14.8 Sports 23,337 2.8 30,079 3.1 23,590 2.6 Transportation 64,559 7.9 112,191 11.6 92,169 10.3 Customer segment subtotal 809,937 99.1 900,481 93.0 771,019 86.1 Other 7,153 0.9 67,530 7.0 124,093 13.9 Specialty Insurance total $ 817,090 100.0 % $ 968,011 100.0 % $ 895,112 100.0 % |
Summary of gross written premiums by line of business across customer segments | Years Ended December 31 ($ in thousands) 2020 2019 2018 Line of business Commercial Auto $ 167,219 20.5 % $ 205,303 21.2 % $ 151,612 16.9 % General Liability 335,864 41.1 335,197 34.6 277,948 31.1 Workers’ Compensation 72,352 8.8 179,432 18.6 246,302 27.5 Commercial Multiple Peril 56,498 6.9 82,126 8.5 67,351 7.5 All Other Lines 185,157 22.7 165,953 17.1 151,899 17.0 Specialty Insurance total $ 817,090 100.0 % $ 968,011 100.0 % $ 895,112 100.0 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 2020 (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS: Net income (loss) available to common stockholders $ 27,750 43,888 $ 0.63 $ (5,522) 43,888 $ (0.12) Effect of dilutive securities: Stock compensation plans 229 229 Diluted EPS $ 27,750 44,117 $ 0.63 $ (5,522) 44,117 $ (0.13) 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 |
Quarterly Financial Informati_2
Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 2020 Gross written premiums $ 213,784 $ 186,394 $ 203,539 $ 213,373 $ 817,090 Revenues 214,821 207,412 194,142 199,732 816,107 Net income from continuing operations 6,811 17,283 1,498 2,158 27,750 Net income (loss) 7,068 17,562 1,518 (3,920) 22,228 Basic earnings per share - continuing operations 0.16 0.39 0.03 0.05 0.63 Diluted earnings per share - continuing operations 0.15 0.39 0.03 0.05 0.63 Basic earnings (loss) per share 0.16 0.40 0.03 (0.09) 0.51 Diluted earnings (loss) per share 0.16 0.40 0.03 (0.09) 0.50 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 |
Background - Reorganization (De
Background - Reorganization (Details) | Jul. 25, 2019shares |
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 |
Background - Initial Public Off
Background - Initial Public Offering (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 15, 2019 | Jul. 29, 2019 | Dec. 31, 2020 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Significant accounting policies | |||||
Allowance for uncollectible premiums receivable | $ 6,917 | $ 5,056 | |||
Statutory U.S tax rate | 21.00% | 35.00% | |||
Carried discounted reserves on workers' compensation claims, net of reinsurance | 122,100 | 116,900 | |||
Workers' compensation reserves, discount amount | $ 48,200 | $ 47,400 | |||
Outstanding common stock, par value | $ 0.01 | $ 0.01 | |||
Vested RSUs conversion common stock | 489,439 | 906,182 | 548,292 | ||
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) | 2.04% | 2.04% | |||
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 | $ 2,400 | $ 3,300 | |||
Depreciation expense | $ 1,100 | 1,200 | $ 1,500 | ||
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 | $ 31,400 | 33,800 | |||
Depreciation expense | $ 7,900 | $ 7,000 | $ 5,800 | ||
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, 2020 | Jan. 01, 2020 |
Recently adopted accounting standards | |||
Operating lease right-of-use asset, continuing operations | $ 3,099 | ||
Operating lease liability, continuing operations | $ 3,099 | ||
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 | |||
Recently adopted accounting standards | |||
Operating lease right-of-use asset, continuing operations | $ 5,600 | ||
Operating lease liability, continuing operations | 6,300 | ||
Operating lease right-of-use asset, discontinued operations | 2,500 | ||
Operating lease liability, discontinued operations | $ 3,000 |
Statements of Cash Flow - Summa
Statements of Cash Flow - Summary of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statements of Cash Flow | |||
Interest | $ 12,915 | $ 12,865 | $ 12,377 |
Federal income tax | 5,553 | $ (780) | $ 135 |
Operating lease right-of-use assets due to adoption of ASU 2016-02 - continuing operations | 2,794 | ||
Operating lease right-of-use assets due to adoption of ASU 2016-02 - discontinued operations | 2,173 | ||
Operating lease liabilities due to adoption of ASU 2016-02 - continuing operations | 3,099 | ||
Operating lease liabilities due to adoption of ASU 2016-02 - discontinued operations | 2,508 | ||
Tax benefit on payments related to offering costs | $ 635 |
Statements of Cash Flow - Addit
Statements of Cash Flow - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2020shares | |
Supplemental cash flow information | |
Conversion of restricted stock units into shares of common stock | 364,948 |
Goodwill and Net Intangible A_3
Goodwill and Net Intangible Assets - Acquisition of New York Marine (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 23, 2010 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business acquisition | ||||
Goodwill | $ 11,911 | $ 11,911 | ||
Intangible assets remaining to be amortized | $ 148 | |||
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 | $ 100 | |||
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 Net Intangible A_4
Goodwill and Net Intangible Assets - Impairment of Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | Jan. 14, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill | |||
Beginning balance | $ 11,911 | $ 11,911 | |
Impairment | 11,911 | ||
Ending balance | 11,911 | ||
Other Intangibles | |||
Impairment loss on other intangibles | 0 | ||
Beginning balance | 17,278 | 17,308 | |
Amortization | 30 | 30 | |
Ending balance | 17,248 | 17,278 | |
Total | |||
Beginning balance | 29,189 | 29,219 | |
Amortization | 30 | 30 | |
Impairment | 11,911 | ||
Ending balance | $ 17,248 | $ 29,189 | |
Subsequent Event | Estimated | |||
Subsequent events | |||
Cash proceeds from sale of common stock under merger agreement | $ 586,000 |
Goodwill and Net Intangible A_5
Goodwill and Net Intangible Assets - Status of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and net intangibles | |||
Goodwill, Gross | $ 11,911 | $ 11,911 | |
Impairment of goodwill | (11,911) | ||
Goodwill, Net | 11,911 | $ 11,911 | |
Finite lived Intangible assets, Accumulated Amortization | (30) | (30) | |
Finite lived Intangible assets, Net | 148 | ||
Net balance, Gross | 29,189 | 29,219 | |
Net balance, Net | 17,248 | 29,189 | $ 29,219 |
Other | |||
Goodwill and net intangibles | |||
Finite lived Intangible assets, Gross | 178 | 208 | |
Finite lived Intangible assets, Accumulated Amortization | (30) | (30) | |
Finite lived Intangible assets, Net | $ 148 | $ 178 | |
Useful Life | 15 years | ||
Other | Maximum | |||
Goodwill and net intangibles | |||
Useful Life | 15 years | ||
State licenses | |||
Goodwill and net intangibles | |||
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, 2020USD ($) |
Goodwill and Net Intangible Assets | |
2021 | $ 30 |
2022 | 30 |
2023 | 30 |
2024 | 30 |
2025 | 28 |
Total | $ 148 |
Discontinued Operations - Resul
Discontinued Operations - Results of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | |||
Net earned premiums | $ 295 | $ 611 | $ 1,173 |
Net investment income | 73 | 142 | 514 |
Realized Investment gains, net | 1,260 | 1,267 | 830 |
Other Income | 338 | ||
Total revenue | 1,628 | 2,020 | 2,855 |
Expenses | |||
Net losses and loss adjustment expenses incurred | 8,295 | 10,463 | 11,197 |
Policy acquisition expenses | 93 | 218 | 401 |
General and administrative expenses | 823 | 57 | (8,401) |
Interest expense | 218 | ||
Total expenses | 9,211 | 10,738 | 3,415 |
Loss from discontinued operations before income taxes | (7,583) | (8,718) | (560) |
Income tax benefit | (2,061) | (2,114) | (1,374) |
Net (loss) income from discontinued operations | (5,522) | (6,604) | $ 814 |
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 | 35,200 | ||
Quota share reinsurance (as a percent) | 100.00% | ||
Aggregate Stop Loss reinsurance protection, liability | $ 32,000 | $ 24,000 |
Discontinued Operations - Conso
Discontinued Operations - Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net income (loss) | |||
Net income (loss) from discontinued operations | $ (5,522) | $ (6,604) | $ 814 |
Assets | |||
Total assets | 21,354 | 21,584 | |
Liabilities | |||
Total liabilities | 37,729 | 31,578 | |
Insurance Operations, U.K. | Discontinued operation | |||
Assets | |||
Cash and investments | 10,939 | 10,428 | |
Other assets | 10,415 | 11,156 | |
Total assets | 21,354 | 21,584 | |
Liabilities | |||
Reserve for unpaid losses and loss adjustment expenses | 32,414 | 24,169 | |
Other liabilities | 5,315 | 7,409 | |
Total liabilities | $ 37,729 | $ 31,578 |
Investments - Gross Unrealized
Investments - Gross Unrealized Gains and Losses on AFS Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Gross unrealized gains and losses on fixed maturity securities included in assets | ||
Fixed maturity securities, available-for-sale, amortized cost | $ 2,159,743 | $ 1,999,403 |
Credit Loss Allowance | (1,457) | 0 |
Fair Value | 2,266,057 | 2,040,682 |
Short-term investments | 154 | 43,873 |
Commercial levered loans (amortized cost) | 12,308 | 14,069 |
Non-redeemable preferred stock securities | 7,049 | |
Bond exchange-traded funds | 44,882 | |
Limited partnerships and limited liability companies (fair value) | 90,468 | 66,660 |
Total investments | $ 2,420,918 | $ 2,165,284 |
Proportion of short-term investments to total investments (as a percent) | 0.00% | 2.00% |
Proportion of commercial levered loans (amortized cost) to total investments (as a percent) | 0.50% | 0.70% |
Proportion of non-redeemable preferred stock securities to total investments (as a percent) | 0.30% | |
Proportion of bond exchange-traded funds to total investments (as a percent) | 1.90% | |
Proportion of limited partnerships and limited liability companies (fair value) to total investments (as a percent) | 3.70% | 3.10% |
Total investment percentage | 100.00% | 100.00% |
Fixed maturity portfolios considered investment grade (as a percent) | 91.70% | 91.10% |
Fixed maturity securities below investment grade, held | $ 187,900 | $ 181,000 |
Fixed maturity securities | ||
Gross unrealized gains and losses on fixed maturity securities included in assets | ||
Fixed maturity securities, available-for-sale, amortized cost | 2,159,743 | 1,999,403 |
Credit Loss Allowance | (1,457) | |
Gross Unrealized Gains | 117,552 | 48,403 |
Gross Unrealized Losses | (9,781) | (7,124) |
Fair Value | $ 2,266,057 | $ 2,040,682 |
Proportion of fixed maturity securities, AFS to total investments (as a percent) | 93.60% | 94.20% |
Fixed maturity securities | U.S. Treasury securities | ||
Gross unrealized gains and losses on fixed maturity securities included in assets | ||
Fixed maturity securities, available-for-sale, amortized cost | $ 50,248 | $ 49,161 |
Gross Unrealized Gains | 1,909 | 838 |
Gross Unrealized Losses | (14) | |
Fair Value | $ 52,157 | $ 49,985 |
Proportion of fixed maturity securities, AFS to total investments (as a percent) | 2.20% | 2.30% |
Fixed maturity securities | Government agency securities | ||
Gross unrealized gains and losses on fixed maturity securities included in assets | ||
Fixed maturity securities, available-for-sale, amortized cost | $ 30,446 | $ 6,522 |
Gross Unrealized Gains | 561 | 23 |
Gross Unrealized Losses | (14) | |
Fair Value | $ 31,007 | $ 6,531 |
Proportion of fixed maturity securities, AFS to total investments (as a percent) | 1.30% | 0.30% |
Fixed maturity securities | Corporate debt securities | ||
Gross unrealized gains and losses on fixed maturity securities included in assets | ||
Fixed maturity securities, available-for-sale, amortized cost | $ 1,317,667 | $ 1,308,094 |
Credit Loss Allowance | (598) | |
Gross Unrealized Gains | 86,447 | 33,743 |
Gross Unrealized Losses | (6,485) | (3,025) |
Fair Value | $ 1,397,031 | $ 1,338,812 |
Proportion of fixed maturity securities, AFS to total investments (as a percent) | 57.70% | 61.80% |
Fixed maturity securities | Municipal debt obligations | ||
Gross unrealized gains and losses on fixed maturity securities included in assets | ||
Fixed maturity securities, available-for-sale, amortized cost | $ 198,773 | $ 80,338 |
Gross Unrealized Gains | 8,437 | 243 |
Gross Unrealized Losses | (116) | (766) |
Fair Value | $ 207,094 | $ 79,815 |
Proportion of fixed maturity securities, AFS to total investments (as a percent) | 8.50% | 3.70% |
Fixed maturity securities | ABS | ||
Gross unrealized gains and losses on fixed maturity securities included in assets | ||
Fixed maturity securities, available-for-sale, amortized cost | $ 54,989 | $ 73,068 |
Gross Unrealized Gains | 696 | 854 |
Gross Unrealized Losses | (427) | (340) |
Fair Value | $ 55,258 | $ 73,582 |
Proportion of fixed maturity securities, AFS to total investments (as a percent) | 2.30% | 3.40% |
Fixed maturity securities | CLO | ||
Gross unrealized gains and losses on fixed maturity securities included in assets | ||
Fixed maturity securities, available-for-sale, amortized cost | $ 140,615 | $ 181,704 |
Gross Unrealized Gains | 154 | 125 |
Gross Unrealized Losses | (1,643) | (2,280) |
Fair Value | $ 139,126 | $ 179,549 |
Proportion of fixed maturity securities, AFS to total investments (as a percent) | 5.70% | 8.30% |
Fixed maturity securities | CMBS | ||
Gross unrealized gains and losses on fixed maturity securities included in assets | ||
Fixed maturity securities, available-for-sale, amortized cost | $ 111,313 | $ 95,810 |
Gross Unrealized Gains | 7,008 | 1,863 |
Gross Unrealized Losses | (361) | (147) |
Fair Value | $ 117,960 | $ 97,526 |
Proportion of fixed maturity securities, AFS to total investments (as a percent) | 4.90% | 4.50% |
Fixed maturity securities | RMBS - non-agency | ||
Gross unrealized gains and losses on fixed maturity securities included in assets | ||
Fixed maturity securities, available-for-sale, amortized cost | $ 109,110 | $ 62,343 |
Credit Loss Allowance | (859) | |
Gross Unrealized Gains | 8,619 | 9,458 |
Gross Unrealized Losses | (734) | (191) |
Fair Value | $ 116,136 | $ 71,610 |
Proportion of fixed maturity securities, AFS to total investments (as a percent) | 4.80% | 3.30% |
Fixed maturity securities | RMBS - agency | ||
Gross unrealized gains and losses on fixed maturity securities included in assets | ||
Fixed maturity securities, available-for-sale, amortized cost | $ 146,582 | $ 142,363 |
Gross Unrealized Gains | 3,721 | 1,256 |
Gross Unrealized Losses | (15) | (347) |
Fair Value | $ 150,288 | $ 143,272 |
Proportion of fixed maturity securities, AFS to total investments (as a percent) | 6.20% | 6.60% |
Investments - Unrealized Loss P
Investments - Unrealized Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value | ||
Less Than 12 Months | $ 119,476 | $ 290,187 |
Greater Than 12 Months | 204,714 | 200,992 |
Total Fair Value | 324,190 | 491,179 |
Unrealized Losses | ||
Less Than 12 Months | (2,004) | (3,930) |
Greater Than 12 Months | (7,777) | (3,194) |
Total Unrealized Losses | $ (9,781) | $ (7,124) |
Fixed maturity securities, unrealized loss position | 212 | 313 |
U.S. Treasury securities | ||
Fair Value | ||
Greater Than 12 Months | $ 7,469 | |
Total Fair Value | 7,469 | |
Unrealized Losses | ||
Greater Than 12 Months | (14) | |
Total Unrealized Losses | (14) | |
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 | $ 36,450 | 133,341 |
Greater Than 12 Months | 101,628 | 50,695 |
Total Fair Value | 138,078 | 184,036 |
Unrealized Losses | ||
Less Than 12 Months | (740) | (2,509) |
Greater Than 12 Months | (5,745) | (516) |
Total Unrealized Losses | (6,485) | (3,025) |
Municipal debt obligations | ||
Fair Value | ||
Less Than 12 Months | 12,211 | 66,355 |
Greater Than 12 Months | 3,344 | |
Total Fair Value | 15,555 | 66,355 |
Unrealized Losses | ||
Less Than 12 Months | (73) | (766) |
Greater Than 12 Months | (43) | |
Total Unrealized Losses | (116) | (766) |
ABS | ||
Fair Value | ||
Less Than 12 Months | 9,121 | 27,884 |
Greater Than 12 Months | 9,461 | 11,165 |
Total Fair Value | 18,582 | 39,049 |
Unrealized Losses | ||
Less Than 12 Months | (364) | (175) |
Greater Than 12 Months | (63) | (165) |
Total Unrealized Losses | (427) | (340) |
CLO | ||
Fair Value | ||
Less Than 12 Months | 29,909 | 28,485 |
Greater Than 12 Months | 82,758 | 110,825 |
Total Fair Value | 112,667 | 139,310 |
Unrealized Losses | ||
Less Than 12 Months | (215) | (338) |
Greater Than 12 Months | (1,428) | (1,942) |
Total Unrealized Losses | (1,643) | (2,280) |
CMBS | ||
Fair Value | ||
Less Than 12 Months | 17,559 | 18,307 |
Greater Than 12 Months | 800 | 6,053 |
Total Fair Value | 18,359 | 24,360 |
Unrealized Losses | ||
Less Than 12 Months | (348) | (102) |
Greater Than 12 Months | (13) | (45) |
Total Unrealized Losses | (361) | (147) |
RMBS - non-agency | ||
Fair Value | ||
Less Than 12 Months | 11,759 | 2,173 |
Greater Than 12 Months | 6,723 | 2,418 |
Total Fair Value | 18,482 | 4,591 |
Unrealized Losses | ||
Less Than 12 Months | (249) | (14) |
Greater Than 12 Months | (485) | (177) |
Total Unrealized Losses | (734) | (191) |
RMBS - agency | ||
Fair Value | ||
Less Than 12 Months | 2,467 | 10,450 |
Greater Than 12 Months | 12,367 | |
Total Fair Value | 2,467 | 22,817 |
Unrealized Losses | ||
Less Than 12 Months | (15) | (12) |
Greater Than 12 Months | (335) | |
Total Unrealized Losses | $ (15) | $ (347) |
Investments - Rollforward of th
Investments - Rollforward of the credit losses allowance for fixed maturity securities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Beginning Balance | $ 0 |
Ending Balance | 1,457 |
Fixed maturity securities | |
Additions New Securities | 2,503 |
Reduction Sales | (235) |
Changes in securities with previous allowance | (811) |
Ending Balance | 1,457 |
Fixed maturity securities | Corporate debt securities | |
Additions New Securities | 1,166 |
Reduction Sales | (121) |
Changes in securities with previous allowance | (447) |
Ending Balance | 598 |
Fixed maturity securities | ABS | |
Additions New Securities | 180 |
Reduction Sales | (3) |
Changes in securities with previous allowance | (177) |
Fixed maturity securities | CLO | |
Additions New Securities | 6 |
Changes in securities with previous allowance | (6) |
Fixed maturity securities | RMBS - non-agency | |
Additions New Securities | 1,151 |
Reduction Sales | (111) |
Changes in securities with previous allowance | (181) |
Ending Balance | $ 859 |
Investments - Amortized Cost an
Investments - Amortized Cost and Fair Value of Fixed Maturity Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Amortized Cost | ||
Due in one year or less | $ 103,243 | |
Due after one through five years | 628,897 | |
Due after five through ten years | 522,749 | |
Due after ten years | 311,799 | |
Amortized Cost | 1,566,688 | |
Amortized Cost | 2,159,743 | $ 1,999,403 |
Fair Value | ||
Due in one year or less | 104,316 | |
Due after one through five years | 657,996 | |
Due after five through ten years | 561,775 | |
Due after ten years | 332,195 | |
Fair Value | 1,656,282 | |
Debt Securities, Available-for-sale, Total | 2,266,057 | $ 2,040,682 |
Government agency securities | ||
Amortized Cost | ||
Amortized Cost - Structured securities | 30,446 | |
Fair Value | ||
Fair Value - Structured securities | 31,007 | |
ABS | ||
Amortized Cost | ||
Amortized Cost - Structured securities | 54,989 | |
Fair Value | ||
Fair Value - Structured securities | 55,258 | |
CLO | ||
Amortized Cost | ||
Amortized Cost - Structured securities | 140,615 | |
Fair Value | ||
Fair Value - Structured securities | 139,126 | |
CMBS | ||
Amortized Cost | ||
Amortized Cost - Structured securities | 111,313 | |
Fair Value | ||
Fair Value - Structured securities | 117,960 | |
RMBS - non-agency | ||
Amortized Cost | ||
Amortized Cost - Structured securities | 109,110 | |
Fair Value | ||
Fair Value - Structured securities | 116,136 | |
RMBS - agency | ||
Amortized Cost | ||
Amortized Cost - Structured securities | 146,582 | |
Fair Value | ||
Fair Value - Structured securities | $ 150,288 |
Investments - Limited Partnersh
Investments - Limited Partnerships and Limited Liability Company Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Investments | ||
Limited partnerships and limited liability companies (fair value) | $ 90,468 | $ 66,660 |
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) | $ 46,600 |
Investments - Gain Loss on Inve
Investments - Gain Loss on Investment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Investments | |||
Allowance for loan losses | $ 0 | $ 0 | |
Proceeds from sales and redemptions in AFS securities | $ 558.7 | 302.9 | 255.2 |
Gross realized gains from sales and redemptions in AFS securities | 7.3 | 1.4 | 0.6 |
Gross realized losses from sales and redemptions of AFS investments | $ 0.9 | $ 0.7 | $ 2.2 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net investment income included in net income (loss) | |||
Gross investment income | $ 76,484 | $ 71,199 | $ 58,136 |
Less: investment income attributable to funds withheld liabilities | (250) | (655) | (912) |
Less: expenses | (3,213) | (1,647) | (1,253) |
Net investment income | 73,021 | 68,897 | 55,971 |
Debt Securities Member | |||
Net investment income included in net income (loss) | |||
Gross investment income | 62,621 | 66,975 | 55,765 |
Net limited partnerships gains | |||
Net investment income included in net income (loss) | |||
Gross investment income | 11,690 | 3,101 | 1,081 |
Other | |||
Net investment income included in net income (loss) | |||
Gross investment income | $ 2,173 | $ 1,123 | $ 1,290 |
Investments - Other Details (De
Investments - Other Details (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Securities required to be held with various regulatory authorities as required by law | $ 233.4 | $ 210.8 |
Fair value of assets on deposit in collateral agreements | 256.4 | 367.1 |
Carrying value of assets on deposit in collateral agreements | 241 | 352 |
Non-redeemable preferred stock securities | ||
Net gain | 0.4 | |
Unrealized gain | 0.5 | |
Realized loss on sale | 0.1 | |
Bond exchange-traded funds | ||
Net gain | 0.1 | |
Unrealized gain | 0.2 | |
Realized loss on sale | $ 0.1 | |
Insurance Operations, U.K. | Discontinued operation | ||
Cash And Securities Deposited | $ 35.2 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Major categories of assets measured at fair value on a recurring basis | ||
Limited partnerships and limited liability companies (fair value) | $ 90,468 | $ 66,660 |
Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 2,317,988 | |
Limited partnerships and limited liability companies (fair value) | 90,468 | 66,660 |
Total invested assets carried at fair value | 2,408,456 | 2,107,342 |
Level 1 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 44,882 | |
Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 2,013,741 | |
Level 3 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 259,365 | |
Non-redeemable preferred stock securities | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 7,049 | |
Non-redeemable preferred stock securities | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 5,649 | |
Non-redeemable preferred stock securities | Level 3 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 1,400 | |
Bond exchange-traded funds | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 44,882 | |
Bond exchange-traded funds | Level 1 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 44,882 | |
Fixed maturity securities | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 2,266,057 | 2,040,682 |
Fixed maturity securities | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 2,008,092 | 1,891,051 |
Fixed maturity securities | Level 3 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 257,965 | 149,631 |
Fixed maturity securities | U.S. Treasury securities | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 52,157 | 49,985 |
Fixed maturity securities | U.S. Treasury securities | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 52,157 | 49,985 |
Fixed maturity securities | Corporate debt securities | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 1,397,031 | 1,338,812 |
Fixed maturity securities | Corporate debt securities | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 1,139,066 | 1,189,181 |
Fixed maturity securities | Corporate debt securities | Level 3 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 257,965 | 149,631 |
Fixed maturity securities | Government agency securities | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 31,007 | 6,531 |
Fixed maturity securities | Government agency securities | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 31,007 | 6,531 |
Fixed maturity securities | Municipal debt obligations | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 207,094 | 79,815 |
Fixed maturity securities | Municipal debt obligations | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 207,094 | 79,815 |
Fixed maturity securities | ABS | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 55,258 | 73,582 |
Fixed maturity securities | ABS | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 55,258 | 73,582 |
Fixed maturity securities | CLO | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 139,126 | 179,549 |
Fixed maturity securities | CLO | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 139,126 | 179,549 |
Fixed maturity securities | CMBS | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 117,960 | 97,526 |
Fixed maturity securities | CMBS | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 117,960 | 97,526 |
Fixed maturity securities | RMBS - non-agency | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 116,136 | 71,610 |
Fixed maturity securities | RMBS - non-agency | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 116,136 | 71,610 |
Fixed maturity securities | RMBS - agency | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | 150,288 | 143,272 |
Fixed maturity securities | RMBS - agency | Level 2 | Recurring | ||
Major categories of assets measured at fair value on a recurring basis | ||
Investments | $ 150,288 | $ 143,272 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Liabilities | ||
Notes payable net of debt issuance costs | $ 203,267 | $ 164,693 |
Secured loan payable | $ 23,300 | |
Fair value of the loan payable as a percentage of par value | 102.30% | |
Carrying Value | ||
Assets | ||
Commercial levered loans | $ 12,308 | 14,069 |
Liabilities | ||
Notes payable | 165,000 | |
Unamortized debt issuance costs | (307) | |
Notes payable net of debt issuance costs | 164,693 | |
Fair Value | ||
Assets | ||
Commercial levered loans | 12,180 | 13,950 |
Liabilities | ||
Notes payable | $ 207,500 | $ 167,507 |
Fair value of the notes payable as a percentage of par value | 100.30% | 101.50% |
Level 2 | Fair Value | ||
Liabilities | ||
Notes payable | $ 167,507 | |
Level 3 | Fair Value | ||
Assets | ||
Commercial levered loans | $ 12,180 | $ 13,950 |
Notes Payable | Carrying Value | ||
Liabilities | ||
Notes payable | 207,000 | |
Unamortized debt issuance costs | (3,733) | |
Notes payable net of debt issuance costs | 203,267 | |
Notes Payable | Fair Value | ||
Liabilities | ||
Notes payable | 207,537 | |
Notes Payable | Level 2 | Fair Value | ||
Liabilities | ||
Notes payable | 207,537 | |
Secured Loan Payable | Carrying Value | ||
Liabilities | ||
Unamortized debt issuance costs | (82) | |
Secured loan payable | 22,750 | |
Secured loan payable, net of issuance costs | 22,668 | |
Secured Loan Payable | Fair Value | ||
Liabilities | ||
Secured loan payable | 23,265 | |
Secured Loan Payable | Level 2 | Fair Value | ||
Liabilities | ||
Secured loan payable | $ 23,265 |
Fair Value Measurements - Secur
Fair Value Measurements - Securities Measured Using Level 3 (Details) - Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in fair value of securities measured using Level 3 inputs | ||
Fair value at beginning of period | $ 149,631 | $ 126,497 |
Other comprehensive loss | 6,241 | 3,011 |
Net realized gain (loss) | (5) | (5) |
Purchases | 108,597 | 23,905 |
Settlements | (5,099) | (3,777) |
Fair value at end of period | 259,365 | 149,631 |
Corporate debt securities | ||
Changes in fair value of securities measured using Level 3 inputs | ||
Fair value at beginning of period | 149,631 | 126,497 |
Other comprehensive loss | 6,241 | 3,011 |
Net realized gain (loss) | (5) | (5) |
Purchases | 107,197 | 23,905 |
Settlements | (5,099) | (3,777) |
Fair value at end of period | 257,965 | $ 149,631 |
Non-redeemable preferred stock securities | ||
Changes in fair value of securities measured using Level 3 inputs | ||
Purchases | 1,400 | |
Fair value at end of period | $ 1,400 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) Income - Components of AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax | |||
Balance at the beginning of period, gross | $ 46,123 | $ (29,760) | $ 22,265 |
Unrealized holding gains (losses) on fixed maturity securities, gross | 71,872 | 77,920 | (53,582) |
Amounts reclassified into net income, gross | 7,697 | 2,037 | (1,557) |
Amounts reclassified as credit losses, gross | (1,457) | ||
Other comprehensive (loss) income, gross | 65,632 | 75,883 | (52,025) |
Balance at the end of period, gross | 111,755 | 46,123 | (29,760) |
Balance at the beginning of period, tax | 8,670 | (7,445) | 2,968 |
Unrealized holding gains (losses) on fixed income securities, tax | 15,009 | 16,277 | (10,842) |
Amounts reclassified into net income, tax | 1,352 | 162 | (429) |
Amounts reclassified as credit losses, tax expense (benefit) | (306) | 0 | 0 |
Other comprehensive (loss) income, tax | 13,963 | 16,115 | (10,413) |
Balance at the end of period, tax | 22,633 | 8,670 | (7,445) |
Balance at the beginning of period, net | 37,453 | (22,315) | 19,297 |
Unrealized holding gains (losses) on fixed income securities | 56,863 | 61,643 | (42,740) |
Amounts reclassified into net income | 6,345 | 1,875 | (1,128) |
Amounts reclassified as credit losses, net | (1,151) | ||
Other comprehensive income (loss) | 51,669 | 59,768 | (41,612) |
Balance at the end of period, net | $ 89,122 | $ 37,453 | $ (22,315) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive (Loss) Income - Reclassifications Out of AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Unrealized gains on securities, tax expense (benefit) | $ 1,352 | $ 162 | $ (429) |
Reclassification adjustment for credit losses included in net income | (1,457) | ||
Reclassification adjustment for credit losses included in net income, tax (benefit) expense | (306) | 0 | 0 |
Total reclassifications | 5,194 | 1,875 | (1,128) |
Realized Investment Gains (Losses) | |||
Unrealized gains (losses) on securities | 7,697 | 2,037 | (1,557) |
Reclassification adjustment for credit losses included in net income | (1,457) | ||
Income Tax Expense | |||
Unrealized gains on securities, tax expense (benefit) | 1,352 | $ 162 | $ (429) |
Reclassification adjustment for credit losses included in net income, tax (benefit) expense | $ (306) |
Related-Party Information (Deta
Related-Party Information (Details) - USD ($) $ in Thousands | May 03, 2019 | Mar. 15, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Related party transactions | |||||
Equity distribution for executive loan repayment | $ 4,174 | ||||
Severance expense | $ 300 | ||||
Executives | |||||
Related party transactions | |||||
Loans payable | $ 4,200 | ||||
Goldman Sachs Asset Management | |||||
Related party transactions | |||||
Niche management fees | 1,200 | 1,300 | $ 1,100 | ||
Former CEO | |||||
Related party transactions | |||||
Niche management fees | $ 600 | ||||
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 Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Reinsurance | |||
Reinsurers with largest obligations, number | item | 3 | ||
Allowance for uncollectible reinsurance | $ 706 | $ 505 | |
Aggregate reinsurers' ceding participation (as a percent) | 26.00% | ||
Whole Account Quota Share Reinsurance Agreement | |||
Reinsurance | |||
Reinsurance receivable unpaid | $ 0 | $ 33,100 | |
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% | ||
Swiss Reinsurance America Corporation | Reinsurance receivables paid, reinsurance receivables unpaid and prepaid reinsurance premiums | |||
Reinsurance | |||
Reinsurers with largest obligations (as a percent) | 26.00% | ||
Munich Reinsurance Company | Reinsurance receivables paid, reinsurance receivables unpaid and prepaid reinsurance premiums | |||
Reinsurance | |||
Reinsurers with largest obligations (as a percent) | 8.00% | ||
Harco National Insurance Company | Reinsurance receivables paid, reinsurance receivables unpaid and prepaid reinsurance premiums | |||
Reinsurance | |||
Reinsurers with largest obligations (as a percent) | 8.40% |
Insurance Operations - Quota Sh
Insurance Operations - Quota Share Arrangements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Insurance activity | |||
Ceded earned premium | $ 112,011 | $ 114,751 | $ 123,715 |
Reduction to pre-tax income | $ (38,490) | (57,631) | (67,118) |
Whole Account Quota Share Reinsurance Agreement | |||
Insurance activity | |||
(Return of ceded prepaid) ceded written premium | (3) | (58,857) | |
Ceded earned premium | 14,560 | ||
Ceded earned premium | (3) | ||
(Increase) reduction to net loss and loss adjustment expenses incurred | (4,746) | 9,514 | |
Reduction to policy acquisition expenses | $ 4,743 | 3,955 | |
Reduction to pre-tax income | $ 1,091 |
Insurance Operations - Reinsu_2
Insurance Operations - Reinsurance Ceded and Assumed (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Written premiums | |||
Direct written premiums | $ 814,266 | $ 964,512 | $ 889,526 |
Assumed from other companies | 2,824 | 3,499 | 5,586 |
Ceded to other companies | 122,912 | 115,871 | 45,038 |
Net written premiums | 694,178 | 852,140 | 850,074 |
Earned premiums | |||
Direct earned premiums | 846,749 | 918,718 | 844,234 |
Assumed from other companies | 3,017 | 3,887 | 10,266 |
Ceded to other companies | 112,011 | 114,751 | 123,715 |
Net premiums earned | $ 737,755 | $ 807,854 | $ 730,785 |
Percent of amount assumed to net | 0.40% | 0.50% | 1.40% |
Losses and loss adjustment expenses incurred | |||
Direct net losses and loss adjustment expenses incurred | $ 553,967 | $ 556,051 | $ 485,770 |
Assumed from other companies | 8,862 | 9,298 | (3,209) |
Ceded to other companies | 90,158 | 64,324 | 47,731 |
Net losses and loss adjustment expenses incurred | $ 472,671 | $ 501,025 | $ 434,830 |
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 - Receivab
Insurance Operations - Receivable allowance rollforward (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Premium receivable | |
Beginning Balance | $ 5,056 |
Current Provision | 2,642 |
Write-offs | (841) |
Recoveries | 60 |
Ending Balance | 6,917 |
Reinsurance receivable on paid and unpaid losses | |
Beginning Balance | 505 |
Current Provision | 201 |
Ending Balance | 706 |
Total receivable allowance | |
Beginning Balance | 5,561 |
Current Provision | 2,843 |
Write-offs | (841) |
Recoveries | 60 |
Ending Balance | 7,623 |
Amount currently with collection agencies | 6,900 |
Uncollateralized exposure | $ 3,700 |
Percentage of uncollateralized exposure | 97.40% |
Insurance Operations - Gross Wr
Insurance Operations - Gross Written Premiums (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($)item | |
Insurance Operations | |||
Number of distribution partners contributing the largest amounts of direct written premiums | item | 3 | 3 | 3 |
Direct premiums written by the largest distribution partners | $ | $ 275 | $ 267.8 | $ 240.7 |
Insurance Operations - Unpaid L
Insurance Operations - Unpaid Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Gross reserve for unpaid losses and loss expenses, at beginning of year | $ 1,521,648 | $ 1,396,812 | $ 1,258,237 |
Ceded reserve for unpaid losses and loss expenses, at beginning of year | 193,952 | 185,295 | 201,156 |
Net reserve for unpaid losses and loss expenses, at beginning of year | 1,327,696 | 1,211,517 | 1,057,081 |
Incurred losses and loss expenses occurring in the: | |||
Current year | 456,724 | 482,989 | 439,847 |
Prior years | 710 | 3,154 | (5,017) |
Prior years attributable to adjusted premium | 15,237 | 14,882 | |
Total net losses and loss adjustment expenses incurred | 472,671 | 501,025 | 434,830 |
Paid losses and loss expenses for claims occurring in the: | |||
Current year | 47,937 | 66,522 | 47,734 |
Prior years | 320,050 | 318,324 | 232,660 |
Total paid losses and loss expenses for claims | 367,987 | 384,846 | 280,394 |
Net reserves for unpaid losses and loss expenses, at end of period | 1,432,380 | 1,327,696 | 1,211,517 |
Ceded reserve for unpaid losses and loss expenses, at end of period | 170,522 | 193,952 | 185,295 |
Gross reserve for unpaid losses and loss expenses, at end of period | 1,602,902 | 1,521,648 | 1,396,812 |
Commercial Auto | |||
Incurred losses and loss expenses occurring in the: | |||
Prior years | 8,100 | (15,600) | |
General Liability | |||
Incurred losses and loss expenses occurring in the: | |||
Prior years | 21,800 | 11,300 | 16,500 |
Workers' Compensation | |||
Incurred losses and loss expenses occurring in the: | |||
Prior years | (36,500) | (22,800) | (14,400) |
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 | 16,800 | $ 16,400 | 12,200 |
Commercial Multiple Peril | Media and Entertainment | |||
Incurred losses and loss expenses occurring in the: | |||
Prior years | 12,200 | ||
All Other Lines | |||
Incurred losses and loss expenses occurring in the: | |||
Prior years | $ (9,500) | ||
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, 2020USD ($)item | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | |
Claims Development [Line Items] | ||||||||||
Claims incurred reported | $ 3,413,178 | |||||||||
IBNR | 975,789 | |||||||||
Claims paid | 2,042,189 | |||||||||
Incurred less paid | 1,370,989 | |||||||||
Reserves 2010 and prior | 710 | $ 3,154 | $ (5,017) | |||||||
Other | 5,955 | |||||||||
Total net reserve for unpaid losses and loss adjustment expenses | 1,432,380 | 1,327,696 | 1,211,517 | $ 1,057,081 | ||||||
ULAE reserves | 40,300 | |||||||||
Discounting of loss reserves | (48,300) | |||||||||
Retroactive reinsurance agreements | 10,800 | |||||||||
Allowance for uncollectible reinsurance | 706 | 505 | ||||||||
Other | 3,200 | |||||||||
Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 900,681 | |||||||||
IBNR | 123,568 | |||||||||
Claims paid | 693,965 | |||||||||
Incurred less paid | 206,716 | |||||||||
Reserves 2010 and prior | 8,100 | (15,600) | ||||||||
General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 1,072,305 | |||||||||
IBNR | 450,497 | |||||||||
Claims paid | 493,494 | |||||||||
Incurred less paid | 578,811 | |||||||||
Reserves 2010 and prior | 21,800 | 11,300 | 16,500 | |||||||
Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 710,637 | |||||||||
IBNR | 264,920 | |||||||||
Claims paid | 317,490 | |||||||||
Incurred less paid | 393,147 | |||||||||
Reserves 2010 and prior | (36,500) | (22,800) | (14,400) | |||||||
Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 291,156 | |||||||||
IBNR | 84,509 | |||||||||
Claims paid | 175,383 | |||||||||
Incurred less paid | 115,773 | |||||||||
Reserves 2010 and prior | 16,800 | 16,400 | 12,200 | |||||||
All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 438,399 | |||||||||
IBNR | 52,295 | |||||||||
Claims paid | 361,857 | |||||||||
Incurred less paid | 76,542 | |||||||||
Reserves 2010 and prior | (9,500) | |||||||||
Accident Years 2010 and Prior | ||||||||||
Claims Development [Line Items] | ||||||||||
Reserves 2010 and prior | 55,436 | |||||||||
Prior Years | ||||||||||
Claims Development [Line Items] | ||||||||||
IBNR | 23,493 | |||||||||
Prior Years | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
IBNR | 6,356 | |||||||||
Prior Years | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
IBNR | 13,370 | |||||||||
Prior Years | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
IBNR | 3,767 | |||||||||
Accident Year 2011 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 131,113 | 131,360 | 131,385 | 124,798 | $ 131,081 | $ 124,543 | $ 122,773 | $ 126,752 | $ 128,879 | $ 115,644 |
IBNR | $ 6,974 | |||||||||
Cumulative claim counts | item | 4,421 | |||||||||
Claims paid | $ 110,798 | 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 | $ 12,755 | 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 | $ 12,754 | 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 | 64,241 | 64,682 | 66,641 | 62,127 | 67,791 | 63,264 | 60,375 | 61,398 | 58,633 | 45,894 |
IBNR | $ 524 | |||||||||
Cumulative claim counts | item | 1,533 | |||||||||
Claims paid | $ 59,367 | 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 | 26,870 | 23,750 | 21,247 | 18,986 | 21,943 | 19,489 | 21,411 | 23,576 | 22,186 | 28,987 |
IBNR | $ 6,450 | |||||||||
Cumulative claim counts | item | 203 | |||||||||
Claims paid | $ 11,525 | 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 | 2 | 6 | 6 | 7 | 11 | ||
Claims paid | 2 | 2 | 2 | 2 | ||||||
Accident Year 2011 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | $ 27,245 | 30,450 | 31,018 | 31,176 | 28,794 | 29,238 | 29,749 | 30,507 | 34,597 | 26,899 |
Cumulative claim counts | item | 1,466 | |||||||||
Claims paid | $ 27,150 | 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 | 164,197 | 158,523 | 159,120 | 156,355 | 165,889 | 165,015 | 157,985 | 157,477 | 137,380 | |
IBNR | $ 4,031 | |||||||||
Cumulative claim counts | item | 6,633 | |||||||||
Claims paid | $ 148,826 | 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 | $ 40,112 | 39,231 | 41,572 | 41,479 | 42,028 | 43,031 | 36,319 | 29,959 | 21,101 | |
Cumulative claim counts | item | 1,746 | |||||||||
Claims paid | $ 40,090 | 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 | 51,503 | 50,509 | 48,096 | 46,312 | 45,771 | 42,401 | 38,288 | 43,677 | 42,685 | |
IBNR | $ 1,292 | |||||||||
Cumulative claim counts | item | 1,488 | |||||||||
Claims paid | $ 48,297 | 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 | 39,689 | 38,919 | 38,835 | 38,501 | 47,373 | 48,983 | 53,038 | 51,724 | 46,503 | |
IBNR | $ 2,739 | |||||||||
Cumulative claim counts | item | 1,776 | |||||||||
Claims paid | $ 27,785 | 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 | 813 | 39 | 49 | 73 | 94 | 96 | |
Cumulative claim counts | item | 5 | |||||||||
Claims paid | $ 813 | 813 | 813 | 813 | 2 | 1 | 1 | |||
Accident Year 2012 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | $ 32,080 | 29,051 | 29,803 | 29,250 | 30,678 | 30,551 | 30,266 | 32,022 | 26,995 | |
Cumulative claim counts | item | 1,618 | |||||||||
Claims paid | $ 31,841 | 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 | 252,393 | 249,802 | 237,900 | 243,567 | 251,353 | 232,660 | 222,277 | 210,368 | ||
IBNR | $ 13,838 | |||||||||
Cumulative claim counts | item | 13,246 | |||||||||
Claims paid | $ 221,768 | 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 | 82,221 | 81,422 | 72,265 | 76,768 | 77,570 | 63,764 | 50,752 | 47,191 | ||
IBNR | $ 295 | |||||||||
Cumulative claim counts | item | 6,225 | |||||||||
Claims paid | $ 79,556 | 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 | 69,835 | 69,565 | 61,796 | 60,613 | 70,459 | 62,618 | 61,785 | 48,466 | ||
IBNR | $ 5,375 | |||||||||
Cumulative claim counts | item | 2,615 | |||||||||
Claims paid | $ 69,798 | 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 | 66,457 | 64,727 | 69,729 | 71,532 | 68,109 | 70,939 | 71,683 | 76,844 | ||
IBNR | $ 8,150 | |||||||||
Cumulative claim counts | item | 2,702 | |||||||||
Claims paid | $ 38,745 | 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 | 8,286 | 8,198 | 8,250 | 8,226 | 1,442 | 1,051 | 1,065 | 968 | ||
IBNR | $ 2 | |||||||||
Cumulative claim counts | item | 54 | |||||||||
Claims paid | $ 8,265 | 8,157 | 8,149 | 8,083 | 754 | 312 | 192 | 43 | ||
Accident Year 2013 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 25,594 | 25,890 | 25,859 | 26,428 | 33,773 | 34,287 | 36,992 | 36,900 | ||
IBNR | $ 16 | |||||||||
Cumulative claim counts | item | 1,650 | |||||||||
Claims paid | $ 25,404 | 25,408 | 25,206 | 25,144 | 31,569 | 29,009 | 23,526 | $ 9,838 | ||
Accident Year 2014 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 367,034 | 356,733 | 342,788 | 333,865 | 323,792 | 312,987 | 286,842 | |||
IBNR | $ 26,909 | |||||||||
Cumulative claim counts | item | 16,350 | |||||||||
Claims paid | $ 305,157 | 280,933 | 250,928 | 217,986 | 166,907 | 111,919 | 44,738 | |||
Accident Year 2014 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 115,781 | 113,790 | 113,747 | 112,157 | 105,528 | 95,283 | 74,185 | |||
IBNR | $ 735 | |||||||||
Cumulative claim counts | item | 8,232 | |||||||||
Claims paid | $ 113,915 | 110,883 | 108,102 | 96,385 | 74,431 | 52,048 | 21,692 | |||
Accident Year 2014 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 120,427 | 114,976 | 104,281 | 93,468 | 78,801 | 77,255 | 70,878 | |||
IBNR | $ 11,986 | |||||||||
Cumulative claim counts | item | 3,103 | |||||||||
Claims paid | $ 84,494 | 73,491 | 53,712 | 41,079 | 28,581 | 14,032 | 5,456 | |||
Accident Year 2014 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 69,102 | 67,784 | 69,886 | 74,134 | 83,543 | 81,628 | 88,181 | |||
IBNR | $ 12,909 | |||||||||
Cumulative claim counts | item | 2,682 | |||||||||
Claims paid | $ 49,285 | 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 | 31,876 | 30,172 | 27,126 | 25,915 | 16,448 | 15,884 | 13,037 | |||
IBNR | $ 1,067 | |||||||||
Cumulative claim counts | item | 615 | |||||||||
Claims paid | $ 27,666 | 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 | 29,848 | 30,011 | 27,749 | 28,192 | 39,473 | 42,938 | 40,562 | |||
IBNR | $ 212 | |||||||||
Cumulative claim counts | item | 1,718 | |||||||||
Claims paid | $ 29,797 | 27,770 | 26,388 | 24,846 | 32,126 | 26,667 | $ 11,150 | |||
Accident Year 2015 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 433,918 | 430,942 | 395,751 | 407,427 | 407,279 | 384,269 | ||||
IBNR | $ 34,523 | |||||||||
Cumulative claim counts | item | 20,896 | |||||||||
Claims paid | $ 360,249 | 331,748 | 281,637 | 234,756 | 159,708 | 75,043 | ||||
Accident Year 2015 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 158,586 | 155,266 | 146,757 | 152,268 | 139,415 | 120,137 | ||||
IBNR | $ 1,789 | |||||||||
Cumulative claim counts | item | 11,156 | |||||||||
Claims paid | $ 149,411 | 142,806 | 126,831 | 107,063 | 74,524 | 37,964 | ||||
Accident Year 2015 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 98,153 | 93,808 | 80,514 | 78,163 | 80,411 | 80,225 | ||||
IBNR | $ 14,628 | |||||||||
Cumulative claim counts | item | 3,018 | |||||||||
Claims paid | $ 75,037 | 61,168 | 39,407 | 25,931 | 14,720 | 5,404 | ||||
Accident Year 2015 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 81,504 | 87,570 | 82,212 | 89,383 | 101,410 | 101,762 | ||||
IBNR | $ 13,798 | |||||||||
Cumulative claim counts | item | 3,891 | |||||||||
Claims paid | $ 42,790 | 38,061 | 33,543 | 27,423 | 18,434 | 6,504 | ||||
Accident Year 2015 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 24,637 | 24,144 | 18,345 | 17,952 | 27,542 | 27,876 | ||||
IBNR | $ 3,462 | |||||||||
Cumulative claim counts | item | 1,017 | |||||||||
Claims paid | $ 22,552 | 20,676 | 14,293 | 8,949 | 14,751 | 6,879 | ||||
Accident Year 2015 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 71,038 | 70,154 | 67,924 | 69,660 | 58,501 | 54,269 | ||||
IBNR | $ 846 | |||||||||
Cumulative claim counts | item | 1,814 | |||||||||
Claims paid | $ 70,459 | 69,037 | 67,563 | 65,390 | 37,279 | $ 18,292 | ||||
Accident Year 2016 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 416,317 | 416,266 | 406,204 | 423,538 | 390,430 | |||||
IBNR | $ 47,411 | |||||||||
Cumulative claim counts | item | 20,124 | |||||||||
Claims paid | $ 316,092 | 266,496 | 204,589 | 150,198 | 78,271 | |||||
Accident Year 2016 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 129,184 | 124,166 | 119,931 | 124,760 | 114,568 | |||||
IBNR | $ 3,616 | |||||||||
Cumulative claim counts | item | 9,651 | |||||||||
Claims paid | $ 118,545 | 102,003 | 83,161 | 63,123 | 39,580 | |||||
Accident Year 2016 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 98,812 | 91,228 | 92,401 | 101,479 | 93,737 | |||||
IBNR | $ 20,493 | |||||||||
Cumulative claim counts | item | 2,898 | |||||||||
Claims paid | $ 63,646 | 47,333 | 25,223 | 13,873 | 3,547 | |||||
Accident Year 2016 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 85,553 | 102,716 | 103,382 | 109,623 | 99,292 | |||||
IBNR | $ 14,347 | |||||||||
Cumulative claim counts | item | 4,373 | |||||||||
Claims paid | $ 48,867 | 43,171 | 35,385 | 24,557 | 10,891 | |||||
Accident Year 2016 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 48,370 | 44,758 | 34,883 | 30,379 | 34,010 | |||||
IBNR | $ 8,071 | |||||||||
Cumulative claim counts | item | 1,203 | |||||||||
Claims paid | $ 36,813 | 27,870 | 16,715 | 7,028 | 4,974 | |||||
Accident Year 2016 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 54,398 | 53,398 | 55,607 | 57,296 | 48,824 | |||||
IBNR | $ 884 | |||||||||
Cumulative claim counts | item | 1,999 | |||||||||
Claims paid | $ 48,221 | 46,119 | 44,104 | 41,618 | $ 19,279 | |||||
Accident Year 2017 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 354,402 | 339,505 | 361,299 | 354,948 | ||||||
IBNR | $ 110,963 | |||||||||
Cumulative claim counts | item | 18,763 | |||||||||
Claims paid | $ 194,952 | 163,937 | 116,204 | 54,026 | ||||||
Accident Year 2017 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 71,849 | 71,068 | 79,156 | 81,986 | ||||||
IBNR | $ 6,510 | |||||||||
Cumulative claim counts | item | 7,073 | |||||||||
Claims paid | $ 58,538 | 47,199 | 34,659 | 19,950 | ||||||
Accident Year 2017 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 107,430 | 94,554 | 100,306 | 99,845 | ||||||
IBNR | $ 44,829 | |||||||||
Cumulative claim counts | item | 2,992 | |||||||||
Claims paid | $ 40,828 | 26,354 | 11,279 | 2,596 | ||||||
Accident Year 2017 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 85,197 | 93,134 | 101,691 | 102,250 | ||||||
IBNR | $ 45,929 | |||||||||
Cumulative claim counts | item | 4,698 | |||||||||
Claims paid | $ 27,305 | 30,776 | 22,462 | 8,631 | ||||||
Accident Year 2017 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 56,196 | 44,260 | 44,044 | 37,760 | ||||||
IBNR | $ 12,530 | |||||||||
Cumulative claim counts | item | 1,455 | |||||||||
Claims paid | $ 36,941 | 27,816 | 19,733 | 7,270 | ||||||
Accident Year 2017 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 33,730 | 36,489 | 36,102 | 33,108 | ||||||
IBNR | $ 1,165 | |||||||||
Cumulative claim counts | item | 2,545 | |||||||||
Claims paid | $ 31,340 | 31,792 | 28,070 | $ 15,580 | ||||||
Accident Year 2018 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 403,545 | 406,199 | 422,104 | |||||||
IBNR | $ 172,717 | |||||||||
Cumulative claim counts | item | 19,252 | |||||||||
Claims paid | $ 163,878 | 112,889 | 45,012 | |||||||
Accident Year 2018 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 82,562 | 78,777 | 87,993 | |||||||
IBNR | $ 14,403 | |||||||||
Cumulative claim counts | item | 7,216 | |||||||||
Claims paid | $ 52,510 | 32,698 | 16,709 | |||||||
Accident Year 2018 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 137,672 | 137,525 | 142,486 | |||||||
IBNR | $ 79,149 | |||||||||
Cumulative claim counts | item | 3,113 | |||||||||
Claims paid | $ 31,347 | 15,625 | 2,223 | |||||||
Accident Year 2018 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 116,178 | 118,973 | 116,278 | |||||||
IBNR | $ 62,582 | |||||||||
Cumulative claim counts | item | 5,157 | |||||||||
Claims paid | $ 37,098 | 29,008 | 9,563 | |||||||
Accident Year 2018 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 35,681 | 37,015 | 39,507 | |||||||
IBNR | $ 14,143 | |||||||||
Cumulative claim counts | item | 1,237 | |||||||||
Claims paid | $ 16,420 | 11,953 | 5,323 | |||||||
Accident Year 2018 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 31,452 | 33,909 | 35,839 | |||||||
IBNR | $ 2,440 | |||||||||
Cumulative claim counts | item | 2,529 | |||||||||
Claims paid | $ 26,503 | 23,605 | $ 11,194 | |||||||
Accident Year 2019 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 460,080 | 457,973 | ||||||||
IBNR | $ 231,758 | |||||||||
Cumulative claim counts | item | 21,018 | |||||||||
Claims paid | $ 154,243 | 66,522 | ||||||||
Accident Year 2019 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 109,586 | 115,393 | ||||||||
IBNR | $ 33,811 | |||||||||
Cumulative claim counts | item | 9,211 | |||||||||
Claims paid | $ 51,448 | 22,082 | ||||||||
Accident Year 2019 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 159,357 | 153,650 | ||||||||
IBNR | $ 116,813 | |||||||||
Cumulative claim counts | item | 2,893 | |||||||||
Claims paid | $ 18,404 | 3,487 | ||||||||
Accident Year 2019 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 94,627 | 97,485 | ||||||||
IBNR | $ 52,783 | |||||||||
Cumulative claim counts | item | 5,081 | |||||||||
Claims paid | $ 26,871 | 9,745 | ||||||||
Accident Year 2019 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 38,194 | 36,895 | ||||||||
IBNR | $ 19,552 | |||||||||
Cumulative claim counts | item | 1,151 | |||||||||
Claims paid | $ 12,857 | 5,940 | ||||||||
Accident Year 2019 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 58,316 | 54,550 | ||||||||
IBNR | $ 8,799 | |||||||||
Cumulative claim counts | item | 2,682 | |||||||||
Claims paid | $ 44,663 | $ 25,268 | ||||||||
Accident Year 2020 | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 430,179 | |||||||||
IBNR | $ 303,172 | |||||||||
Cumulative claim counts | item | 12,264 | |||||||||
Claims paid | $ 66,226 | |||||||||
Accident Year 2020 | Commercial Auto | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 98,045 | |||||||||
IBNR | $ 62,409 | |||||||||
Cumulative claim counts | item | 5,403 | |||||||||
Claims paid | $ 17,198 | |||||||||
Accident Year 2020 | General Liability | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 164,875 | |||||||||
IBNR | $ 149,052 | |||||||||
Cumulative claim counts | item | 2,076 | |||||||||
Claims paid | $ 2,276 | |||||||||
Accident Year 2020 | Workers' Compensation | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 45,460 | |||||||||
IBNR | $ 31,863 | |||||||||
Cumulative claim counts | item | 1,853 | |||||||||
Claims paid | $ 7,219 | |||||||||
Accident Year 2020 | Commercial Multiple Peril | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 47,101 | |||||||||
IBNR | $ 25,682 | |||||||||
Cumulative claim counts | item | 906 | |||||||||
Claims paid | $ 13,054 | |||||||||
Accident Year 2020 | All Other Lines | ||||||||||
Claims Development [Line Items] | ||||||||||
Claims incurred reported | 74,698 | |||||||||
IBNR | $ 34,166 | |||||||||
Cumulative claim counts | item | 2,026 | |||||||||
Claims paid | $ 26,479 |
Insurance Operations - Historic
Insurance Operations - Historical Average Annual Percentage Payout of Incurred Claims, Net of Reinsurance (Details) | Dec. 31, 2020 |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 14.00% |
Year 2 | 19.00% |
Year 3 | 14.00% |
Year 4 | 13.00% |
Year 5 | 11.00% |
Year 6 | 7.00% |
Year 7 | 7.00% |
Year 8 | 2.00% |
Year 9 | 4.00% |
Commercial Auto | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 22.00% |
Year 2 | 22.00% |
Year 3 | 19.00% |
Year 4 | 17.00% |
Year 5 | 12.00% |
Year 6 | 2.00% |
Year 7 | 5.00% |
Year 8 | (2.00%) |
Year 9 | 3.00% |
Year 10 | 5.00% |
General Liability | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 3.00% |
Year 2 | 11.00% |
Year 3 | 13.00% |
Year 4 | 15.00% |
Year 5 | 15.00% |
Year 6 | 13.00% |
Year 7 | 10.00% |
Year 8 | 6.00% |
Year 9 | 4.00% |
Year 10 | 2.00% |
Workers' Compensation | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 9.00% |
Year 2 | 15.00% |
Year 3 | 10.00% |
Year 4 | 7.00% |
Year 5 | 6.00% |
Year 6 | 6.00% |
Year 7 | 6.00% |
Year 8 | 4.00% |
Year 9 | 4.00% |
Year 10 | 3.00% |
Commercial Multiple Peril | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 16.00% |
Year 2 | 16.00% |
Year 3 | 10.00% |
Year 4 | 23.00% |
Year 5 | 22.00% |
Year 6 | 10.00% |
Year 7 | 3.00% |
Year 8 | 1.00% |
All Other Lines | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 34.00% |
Year 2 | 39.00% |
Year 3 | 18.00% |
Year 4 | 2.00% |
Year 6 | 3.00% |
Year 7 | 4.00% |
Year 9 | 6.00% |
Year 10 | (12.00%) |
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, 2020USD ($) | |
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, 2020 | Dec. 31, 2019 | |
Gross | ||
Balance at beginning of year | $ 12,810 | $ 14,262 |
Incurred losses and loss adjustment expense | 175 | 430 |
Payments for losses and loss adjustment expenses | 300 | 1,882 |
Balance at end of year | 12,685 | 12,810 |
Ceded | ||
Balance at beginning of year | 4,518 | 6,016 |
Incurred losses and loss adjustment expense | 36 | 66 |
Payments for losses and loss adjustment expenses | 84 | 1,564 |
Balance at end of year | 4,470 | 4,518 |
Net | ||
Balance at beginning of year | 8,292 | 8,246 |
Incurred losses and loss adjustment expense | 139 | 364 |
Payments for losses and loss adjustment expenses | 216 | 318 |
Balance at end of year | 8,215 | 8,292 |
Salvage and Subrogation | ||
Estimated salvage and subrogation recoverable | 52,100 | 27,500 |
Liability Related To Assumed Asbestos And Environmental Reserves On Retroactive Basis From Prior Members Of Pool [Member] | ||
Net | ||
Balance at beginning of year | 8,400 | |
Balance at end of year | $ 7,900 | $ 8,400 |
Insurance Operations - Deferred
Insurance Operations - Deferred Policy Acquisition Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | |||
Beginning balance | $ 98,812 | $ 93,613 | |
Acquisition costs deferred | 168,051 | 189,970 | |
Acquisition costs expensed | (172,426) | (184,771) | $ (171,429) |
Ending balance | $ 94,437 | $ 98,812 | $ 93,613 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | |||
Loss reserves | $ 14,568 | $ 13,289 | |
Loss reserves transitional adjustment | 6,104 | 6,104 | |
Unearned premiums | 15,250 | 16,785 | |
Net operating loss carry forwards - state and local | 17,444 | 17,008 | |
Net operating loss carry forwards - federal | 646 | 357 | |
Capital loss carry forwards - federal | 145 | 1,519 | |
Bad debt reserve | 3,019 | 3,229 | |
Impairments | 987 | 517 | |
Deferred compensation | 5,268 | 5,659 | |
Amortization of intangibles | 578 | 695 | |
Limited partnership income | 334 | 2,566 | |
Lease liabilities | 602 | ||
Other | 2,405 | 3,151 | |
Total deferred tax assets | 67,350 | 70,879 | |
Less valuation allowance | (18,081) | (17,604) | $ (16,962) |
Deferred tax assets, net of allowance | 49,269 | 53,275 | |
Deferred tax liabilities: | |||
Deferred policy acquisition costs | 19,856 | 20,693 | |
Loss reserve transitional adjustment | 3,815 | 4,578 | |
Fair value adjustments | 3,622 | 3,628 | |
Lease right-of-use assets | 587 | ||
Unrealized appreciation of investments | 22,632 | 8,669 | |
Other | 8,894 | 10,904 | |
Total deferred tax liabilities | 59,406 | 48,472 | |
Net deferred income taxes | $ (10,137) | ||
Net deferred income taxes | $ 4,803 |
Income Taxes - Tax Reform (Deta
Income Taxes - Tax Reform (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2017 | Dec. 31, 2019 |
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 | $ 2,501 | |||
Deferred tax asset due to Tax Reform | $ 6,104 | $ 6,104 | ||
Period over which transitional deferred tax liability related to tax reform will be amortized | 8 years | |||
Deferred tax liability due to Tax Reform | $ 3,815 | $ 4,578 |
Income Taxes - Net Operating Lo
Income Taxes - Net Operating Loss Carryforwards (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Net operating loss carryforwards | ||
Realized capital loss carryforward | $ 100 | $ 1,500 |
U.S. | ||
Net operating loss carryforwards | ||
Net Operating Losses carried forward | 600 | 400 |
Tax benefit related to net operating losses | 646 | |
Net operating loss carryforwards from discontinued operations utilized and reclassed to continuing operations | 3,100 | |
U.S. | 2010 | ||
Net operating loss carryforwards | ||
Tax benefit related to net operating losses | $ 646 | |
Net Operating Loss expiration | Dec. 31, 2030 | |
State and Local | ||
Net operating loss carryforwards | ||
Net Operating Losses carried forward | $ 17,400 | $ 17,000 |
Income Taxes - Change in Valuat
Income Taxes - Change in Valuation Allowance Account (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation Of Deferred Tax Assets, Valuation Allowance [Roll Forward] | ||
Balance, beginning of year | $ 17,604 | $ 16,962 |
Change in valuation allowance | 477 | 642 |
Balance, end of year | 18,081 | $ 17,604 |
Valuation allowance for uncertain deferred tax assets attributable to U.S. federal and state NOLs | $ 18,100 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance, beginning of year | $ 438 | $ 528 |
Additions for tax positions of prior years | 34 | 260 |
Reductions for tax positions of prior years | (379) | (350) |
Balance, end of year | 93 | $ 438 |
Decrease in tax position | $ 300 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | |||
Expected tax expense at statutory rates in taxable jurisdictions | $ 8,083 | $ 12,103 | $ 13,896 |
Tax-exempt interest | (9) | (46) | |
State taxes | (377) | (629) | (10,746) |
Valuation allowance | 477 | 642 | 10,451 |
Effect of provision to tax return filing adjustments | 42 | ||
Effect of Tax Reform | 2,501 | ||
Other | 65 | (21) | (166) |
Total income tax expense | $ 10,740 | $ 12,137 | $ 13,389 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) $ / shares in Units, $ in Thousands | Aug. 15, 2019shares | Jul. 25, 2019shares | Jan. 01, 2018 | Nov. 23, 2010USD ($)$ / shares | Dec. 31, 2020USD ($)subsidiary | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Income Tax Disclosure [Line Items] | ||||||||
Number of non-US subsidiaries | subsidiary | 1 | |||||||
Effective income tax rate | 21.00% | |||||||
Statutory income tax rate | 21.00% | 35.00% | ||||||
Income taxes paid or (refund received) | $ 5,553 | $ (780) | $ 135 | |||||
Income tax recoverable included in other assets | $ 1,600 | 200 | 800 | |||||
Ownership percentage | 50.00% | |||||||
Ownership Changes Among Shareholders | 5.00% | |||||||
Shares of the Company issued as merger consideration | shares | 38,851,369 | |||||||
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 | shares | 1,178,570 | |||||||
Valuation allowance | $ 18,081 | $ 17,604 | 16,962 | |||||
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 | $ / shares | $ 25.75 | |||||||
Cash price | $ 231,900 | |||||||
Annual limit on utilization of Net Operating Losses due to Section 382 | $ 9,000 | |||||||
Valuation allowance | $ 600 |
Statutory Financial Informati_3
Statutory Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statutory Financial Information | |||
Maximum dividend that can be paid without the prior approval from the New York State Department of Financial Services | $ 66,800 | ||
Combined statutory net income | 37,533 | $ 55,681 | $ 33,147 |
Combined statutory surplus | $ 668,060 | $ 568,777 | $ 473,575 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Nov. 25, 2020 | Aug. 03, 2020 | Jul. 14, 2020 | Jun. 30, 2020 | Mar. 15, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 12, 2020 | Jan. 31, 2015 | Nov. 30, 2013 |
Debt | |||||||||||
Amount drawn | $ 201,909 | $ 18,000 | |||||||||
Repayment of outstanding debt | 165,000 | $ 18,000 | |||||||||
Interest expense on debt | 13,100 | 12,800 | 12,300 | ||||||||
Amount of amortization expense attributable to debt issuance costs. | $ 1,200 | $ 300 | $ 300 | ||||||||
7.5% Senior Unsecured Notes due November 2020 | |||||||||||
Debt | |||||||||||
Face amount of the debt | $ 140,000 | ||||||||||
Interest rate (as a percent) | 7.50% | 7.50% | |||||||||
6.5% Senior Notes due November 2020 | |||||||||||
Debt | |||||||||||
Face amount of the debt | $ 25,000 | ||||||||||
Interest rate (as a percent) | 6.50% | 6.50% | |||||||||
Secured Loan Payable | |||||||||||
Debt | |||||||||||
Face amount of the debt | $ 24,900 | ||||||||||
Interest rate (as a percent) | 4.83% | ||||||||||
Prior Credit Agreement | |||||||||||
Debt | |||||||||||
Maximum borrowing capacity | $ 50,000 | ||||||||||
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 | ||||||||||
Amount outstanding | $ 0 | ||||||||||
Term Loan Facility | |||||||||||
Debt | |||||||||||
Maximum borrowing capacity | 165,000 | ||||||||||
Amount drawn | $ 165,000 | ||||||||||
Debt issuance costs incurred | 4,600 | ||||||||||
Revolving Credit Facility | |||||||||||
Debt | |||||||||||
Maximum borrowing capacity | $ 65,000 | $ 35,000 | |||||||||
Amount drawn | $ 7,000 | $ 30,000 | $ 5,000 | ||||||||
Debt issuance costs incurred | $ 500 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Leases | |||
Rent expense | $ 3 | ||
Rent expense | $ 3.3 | $ 3.1 | |
Weighted Average | |||
Leases | |||
Lessee, operating lease, term of contract | 2 years 8 months 12 days | ||
Lessee, operating lease, discount rate | 2.00% | ||
Discontinued operations | |||
Leases | |||
Rent expense | $ 0.5 | ||
Rent expense | 0.5 | 0.5 | |
Sublease income | $ 0.7 | $ 0.6 | $ 0.1 |
Commitments and Contingencies_2
Commitments and Contingencies - Lease Liabilities and Right-of-Use Lease Assets (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Lease Liabilities | |
One year or less | $ 2,922 |
More than one year to two years | 214 |
Total | 3,136 |
Less: difference between lease payments and discounted lease liabilities | 37 |
Lease liability | 3,099 |
Total | 3,136 |
Less: difference between lease payments and discounted lease liabilities | 37 |
Lease liability | 3,099 |
Right-of-use assets | 2,794 |
Prepaid lease assets, net of lease allowances and incentives | 305 |
Total | $ 3,099 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other Liabilities |
Commitments and Contingencies_3
Commitments and Contingencies - Fiduciary Funds (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | |
Fiduciary and pools' underwriting accounts | ||
Assets held on behalf of unaffiliated pool members | $ 1,495 | $ 10,522 |
Escrow bond arrangements | 571 | 1,014 |
Total | 2,066 | $ 11,536 |
Unfunded commitments related to a limited partnership and a fixed income security | $ 18,200 | |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 24, 2019 |
Share-based Compensation | |||||||
Share-based compensation expense | $ 8.9 | $ 8.6 | $ 0.9 | ||||
Tax benefit, recognized on share based compensation expense | $ 1.9 | $ 1.8 | $ 0.2 | ||||
Restricted stock units | |||||||
Share-based Compensation | |||||||
Restricted stock unit awards granted | 593,147 | 1,732,869 | |||||
Vested awards awaiting conversion to common stock | 489,439 | 906,182 | 548,292 | ||||
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 | Restricted stock units | Non-employee directors | |||||||
Share-based Compensation | |||||||
Restricted stock unit awards granted | 7,440 | 26,399 | 106,460 | 33,839 | |||
Grant date fair value | $ 0.5 | $ 0.9 | |||||
2019 Equity Incentive Plan | Restricted Stock Units, Time Vesting | |||||||
Share-based Compensation | |||||||
Restricted stock unit awards granted | 142,739 | 90,559 | |||||
Grant date fair value | $ 1.8 | $ 1.3 | |||||
Vesting period | 3 years | 3 years | |||||
2019 Equity Incentive Plan | Restricted Stock units, Performance Vesting (PSUs) | |||||||
Share-based Compensation | |||||||
Restricted stock unit awards granted | 123,016 | 90,559 | |||||
Grant date fair value | $ 1.6 | $ 1.3 | |||||
Performance period for performance vesting awards | 3 years | 3 years | |||||
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 | Restricted Stock Awards, Time Vesting | |||||||
Share-based Compensation | |||||||
Restricted stock unit awards granted | 110,466 | ||||||
Grant date fair value | $ 1.5 | ||||||
Vesting period | 3 years | ||||||
2019 Equity Incentive Plan | Restricted Stock Awards, Performance Vesting (PSAs) | |||||||
Share-based Compensation | |||||||
Restricted stock unit awards granted | 110,466 | ||||||
Grant date fair value | $ 1.5 | ||||||
Performance period for performance vesting awards | 3 years | ||||||
Cliff vesting period | 3 years | ||||||
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, 2020 | Dec. 31, 2019 | |
Unrecognized Share-based Compensation | ||
Unrecognized stock-based compensation expense | $ 11.8 | |
Expected weighted average recognition period | 1 year 7 months 6 days | |
Restricted stock units | ||
Restricted Stock Units | ||
Unvested at beginning of period | 1,289,396 | 55,264 |
Granted | 593,147 | 1,732,869 |
Vested | (134,001) | (406,081) |
Forfeited | (43,101) | (92,656) |
Unvested at end of period | 1,705,441 | 1,289,396 |
Weighted Average Grant Date Fair Value Per Share | ||
Non vested outstanding at beginning of period | $ 14 | $ 11.09 |
Granted | 12.30 | 14 |
Vested | 9.96 | 13.61 |
Forfeited | 13.58 | 14 |
Non vested outstanding at end of period | $ 13.46 | $ 14 |
Share-Based Compensation - 20_3
Share-Based Compensation - 2019 Employee Stock Purchase Plan (Details) - 2019 Employee Stock Purchase Plan - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Jul. 24, 2019 | |
Employee stock purchase plan | ||
Number of common shares reserved for sale | 1,000,000 | |
Purchase price as a percentage of stock price | 90.00% | |
Maximum percentage of employee gross pay the employee may contribute to the plan | 15.00% | |
Maximum amount of stock the employee may purchase in a calendar year | $ 25,000 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
401(K) Plan | |||
Matching contribution, percent | 100.00% | ||
Plan expense | $ 2.2 | $ 1.8 | $ 2.1 |
Maximum | |||
401(K) Plan | |||
Eligible compensation, percent | 6.00% |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
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 | $ 213,373 | $ 203,539 | $ 186,394 | $ 213,784 | $ 249,945 | $ 227,196 | $ 235,032 | $ 255,838 | $ 817,090 | $ 968,011 | $ 895,112 |
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 | $ 167,219 | $ 205,303 | $ 151,612 | ||||||||
Gross written premiums, percent | 20.50% | 21.20% | 16.90% | ||||||||
General Liability | |||||||||||
Summary of the Company's gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 335,864 | $ 335,197 | $ 277,948 | ||||||||
Gross written premiums, percent | 41.10% | 34.60% | 31.10% | ||||||||
Workers' Compensation | |||||||||||
Summary of the Company's gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 72,352 | $ 179,432 | $ 246,302 | ||||||||
Gross written premiums, percent | 8.80% | 18.60% | 27.50% | ||||||||
Commercial Multiple Peril | |||||||||||
Summary of the Company's gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 56,498 | $ 82,126 | $ 67,351 | ||||||||
Gross written premiums, percent | 6.90% | 8.50% | 7.50% | ||||||||
All Other Lines | |||||||||||
Summary of the Company's gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 185,157 | $ 165,953 | $ 151,899 | ||||||||
Gross written premiums, percent | 22.70% | 17.10% | 17.00% | ||||||||
Customer Segment | |||||||||||
Summary of the Company's gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 809,937 | $ 900,481 | $ 771,019 | ||||||||
Gross written premiums, percent | 99.10% | 93.00% | 86.10% | ||||||||
Construction | |||||||||||
Summary of the Company's gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 109,955 | $ 117,918 | $ 101,946 | ||||||||
Gross written premiums, percent | 13.50% | 12.20% | 11.40% | ||||||||
Consumer Services | |||||||||||
Summary of the Company's gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 123,011 | $ 133,682 | $ 107,086 | ||||||||
Gross written premiums, percent | 15.00% | 13.80% | 12.00% | ||||||||
Marine and Energy | |||||||||||
Summary of the Company's gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 110,228 | $ 94,700 | $ 83,104 | ||||||||
Gross written premiums, percent | 13.50% | 9.80% | 9.30% | ||||||||
Media and Entertainment | |||||||||||
Summary of the Company's gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 88,788 | $ 124,950 | $ 119,926 | ||||||||
Gross written premiums, percent | 10.90% | 12.90% | 13.40% | ||||||||
Professional Services | |||||||||||
Summary of the Company's gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 130,893 | $ 119,326 | $ 110,546 | ||||||||
Gross written premiums, percent | 16.00% | 12.30% | 12.30% | ||||||||
Real Estate | |||||||||||
Summary of the Company's gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 159,166 | $ 167,635 | $ 132,652 | ||||||||
Gross written premiums, percent | 19.50% | 17.30% | 14.80% | ||||||||
Sports | |||||||||||
Summary of the Company's gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 23,337 | $ 30,079 | $ 23,590 | ||||||||
Gross written premiums, percent | 2.80% | 3.10% | 2.60% | ||||||||
Transportation | |||||||||||
Summary of the Company's gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 64,559 | $ 112,191 | $ 92,169 | ||||||||
Gross written premiums, percent | 7.90% | 11.60% | 10.30% | ||||||||
Other | |||||||||||
Summary of the Company's gross written premium by customer segments within our Specialty Insurance segment | |||||||||||
Gross written premiums | $ 7,153 | $ 67,530 | $ 124,093 | ||||||||
Gross written premiums, percent | 0.90% | 7.00% | 13.90% |
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, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Basic EPS- Income: | |||||||||||
Net income (loss) available to common stockholders, continuing operations | $ 27,750 | $ 45,494 | $ 53,729 | ||||||||
Net income (loss) available to common stockholders, discontinued operations | $ (5,522) | $ (6,604) | $ 814 | ||||||||
Basic EPS - Shares: | |||||||||||
Shares outstanding, basic (in shares) | 43,888 | 41,095 | 38,753 | ||||||||
Basic EPS - Per Share Amount: | |||||||||||
Net income from continuing operations | $ 0.05 | $ 0.03 | $ 0.39 | $ 0.16 | $ 0.34 | $ 0.20 | $ 0.22 | $ 0.35 | $ 0.63 | $ 1.11 | $ 1.39 |
Net Income available to common stockholders, discontinued operations (in dollars per share) | $ (0.12) | $ (0.16) | $ 0.02 | ||||||||
Effect of dilutive securities - Shares: | |||||||||||
Stock compensation plans (in shares) | 229 | 428 | 688 | ||||||||
Diluted EPS - Income | |||||||||||
Diluted EPS, continuing operations | $ 27,750 | $ 45,494 | $ 53,729 | ||||||||
Diluted EPS, discontinued operations | $ (5,522) | $ (6,604) | $ 814 | ||||||||
Diluted EPS - Shares | |||||||||||
Shares outstanding, diluted (in shares) | 44,117 | 41,523 | 39,441 | ||||||||
Diluted EPS - Per Share Amount | |||||||||||
Diluted earnings per share - continuing operations (in dollars per share) | $ 0.05 | $ 0.03 | $ 0.39 | $ 0.15 | $ 0.33 | $ 0.19 | $ 0.22 | $ 0.35 | $ 0.63 | $ 1.10 | $ 1.36 |
Diluted EPS, discontinued operations (in dollars per share) | $ (0.13) | $ (0.16) | $ 0.02 |
Quarterly Financial Informati_3
Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information | |||||||||||
Gross written premiums | $ 213,373 | $ 203,539 | $ 186,394 | $ 213,784 | $ 249,945 | $ 227,196 | $ 235,032 | $ 255,838 | $ 817,090 | $ 968,011 | $ 895,112 |
Revenues | 199,732 | 194,142 | 207,412 | 214,821 | 225,105 | 219,870 | 220,112 | 212,972 | 816,107 | 878,059 | 785,872 |
Net income from continuing operations | 2,158 | 1,498 | 17,283 | 6,811 | 14,742 | 8,361 | 8,696 | 13,695 | 27,750 | 45,494 | 53,729 |
Net income | $ (3,920) | $ 1,518 | $ 17,562 | $ 7,068 | $ 8,520 | $ 8,312 | $ 8,618 | $ 13,440 | $ 22,228 | $ 38,890 | $ 54,543 |
Basic earnings per share - continuing operations (in dollars per share) | $ 0.05 | $ 0.03 | $ 0.39 | $ 0.16 | $ 0.34 | $ 0.20 | $ 0.22 | $ 0.35 | $ 0.63 | $ 1.11 | $ 1.39 |
Diluted earnings per share - continuing operations (in dollars per share) | 0.05 | 0.03 | 0.39 | 0.15 | 0.33 | 0.19 | 0.22 | 0.35 | 0.63 | 1.10 | 1.36 |
Basic earnings per share (in dollars per share) | (0.09) | 0.03 | 0.40 | 0.16 | 0.19 | 0.19 | 0.22 | 0.35 | 0.51 | 0.95 | 1.41 |
Diluted earnings per share (in dollars per share) | $ (0.09) | $ 0.03 | $ 0.40 | $ 0.16 | $ 0.19 | $ 0.19 | $ 0.22 | $ 0.34 | $ 0.50 | $ 0.94 | $ 1.38 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Pedal Parent, Inc. - Prosight Global, Inc. $ / shares in Units, $ in Millions | Jan. 14, 2021USD ($)$ / shares |
Subsequent events | |
Cash amount to be received for each common share held by the stockholders | $ / shares | $ 12.85 |
Aggregate cash value to be received | $ | $ 586 |
Schedule II - Balance Sheets (D
Schedule II - Balance Sheets (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 24, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | |||||
Cash and cash equivalents | $ 12,078 | $ 17,284 | |||
Other assets | 25,996 | 29,537 | |||
Total assets | 3,050,712 | 2,877,234 | |||
Liabilities | |||||
Notes payable | 203,267 | 164,693 | |||
Other liabilities | 40,034 | 56,438 | |||
Total liabilities | 2,426,744 | 2,334,203 | |||
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 | 434 | 431 | |||
Paid-in capital | 668,798 | 661,761 | |||
Accumulated other comprehensive income | 89,122 | 37,453 | $ (22,315) | $ 19,297 | |
Retained deficit | (134,186) | (156,414) | |||
Treasury shares - at cost (12,920 shares) | (200) | (200) | |||
Total stockholders' equity | 623,968 | 543,031 | $ 389,830 | $ 375,983 | |
Total liabilities and stockholders' equity | $ 3,050,712 | $ 2,877,234 | |||
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 | 43,449,087 | 43,071,186 | |||
Common stock, shares outstanding | 43,436,167 | 43,058,266 | |||
Treasury shares, shares | 12,920 | 12,920 | |||
Parent Company | Reportable Legal Entities | |||||
Assets | |||||
Investment in subsidiaries | $ 825,713 | $ 702,977 | |||
Cash and cash equivalents | 619 | 773 | |||
Total cash and investments | 826,332 | 703,750 | |||
Receivables from affiliates | 7,507 | 6,580 | |||
Other assets | 1,189 | 747 | |||
Total assets | 835,028 | 711,077 | |||
Liabilities | |||||
Payables to affiliates | 5,614 | 1,263 | |||
Notes payable | 203,267 | 164,693 | |||
Other liabilities | 2,179 | 2,090 | |||
Total liabilities | 211,060 | 168,046 | |||
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 | 434 | 431 | |||
Paid-in capital | 668,798 | 661,761 | |||
Accumulated other comprehensive income | 89,122 | 37,453 | |||
Retained deficit | (134,186) | (156,414) | |||
Treasury shares - at cost (12,920 shares) | (200) | (200) | |||
Total stockholders' equity | 623,968 | 543,031 | |||
Total liabilities and stockholders' equity | $ 835,028 | $ 711,077 | |||
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 | 43,449,087 | 43,071,186 | |||
Common stock, shares outstanding | 43,436,167 | 43,058,266 | |||
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, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | |||||||||||
Other income | $ 351 | $ 538 | $ 673 | ||||||||
Total revenues | $ 199,732 | $ 194,142 | $ 207,412 | $ 214,821 | $ 225,105 | $ 219,870 | $ 220,112 | $ 212,972 | 816,107 | 878,059 | 785,872 |
Expenses: | |||||||||||
General and administrative expenses | 100,418 | 105,686 | 100,118 | ||||||||
Interest expense | 12,795 | 12,377 | |||||||||
Other expense | 17,739 | 16,151 | |||||||||
Total expenses | 777,617 | 820,428 | 718,754 | ||||||||
Loss before federal income taxes | 38,490 | 57,631 | 67,118 | ||||||||
Income tax benefit | (10,740) | (12,137) | (13,389) | ||||||||
Net loss from continuing operations before equity in undistributed net income (losses) of subsidiaries | 2,158 | 1,498 | 17,283 | 6,811 | 14,742 | 8,361 | 8,696 | 13,695 | 27,750 | 45,494 | 53,729 |
Net income | $ (3,920) | $ 1,518 | $ 17,562 | $ 7,068 | $ 8,520 | $ 8,312 | $ 8,618 | $ 13,440 | 22,228 | 38,890 | 54,543 |
Parent Company | Reportable Legal Entities | |||||||||||
Revenues: | |||||||||||
Other income | 30 | 33 | 165 | ||||||||
Total revenues | 30 | 33 | 165 | ||||||||
Expenses: | |||||||||||
General and administrative expenses | 1,079 | 714 | 5,325 | ||||||||
Write-off of amounts related to sale of affiliate | 650 | ||||||||||
Intercompany interest expense (income) | 18 | (27) | |||||||||
Interest expense | 13,768 | 12,795 | 12,377 | ||||||||
Other expense | 5,484 | 8,164 | |||||||||
Total expenses | 20,331 | 21,691 | 18,325 | ||||||||
Loss before federal income taxes | (20,301) | (21,658) | (18,160) | ||||||||
Income tax benefit | 2,363 | 4,669 | 3,284 | ||||||||
Net loss from continuing operations before equity in undistributed net income (losses) of subsidiaries | (17,938) | (16,989) | (14,876) | ||||||||
Equity in undistributed net income (losses) of subsidiaries, net of tax | 40,166 | 55,879 | 69,419 | ||||||||
Net income | $ 22,228 | $ 38,890 | $ 54,543 |
Schedule II - Statements of Cas
Schedule II - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Activities: | |||
Net income (loss) | $ 22,228 | $ 38,890 | $ 54,543 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Amortization of debt issuance costs | 1,249 | ||
Changes in: | |||
Increase (decrease) in other assets | (649) | 23,938 | (15,092) |
Increase in other liabilities | (16,405) | (17,036) | (2,377) |
Total adjustments | 88,460 | 208,161 | 178,863 |
Net cash provided by operating activities - continuing operations | 116,210 | 253,655 | 232,592 |
Investing activities: | |||
Net cash used in investing activities | (179,866) | (288,616) | (297,952) |
Financing activities | |||
Proceeds from shares issued | 50,878 | ||
Payments related to offering costs | (49) | ||
Proceeds from notes payable, net of debt issuance costs | 201,909 | 18,000 | |
Repayment of notes payable | (165,000) | (18,000) | |
Tax withholding on stock compensation awards | (2,578) | (740) | |
Proceeds from stock purchase plan | 165 | ||
Net cash provided by financing activities | 57,106 | 32,138 | 18,000 |
Cash, cash equivalents and restricted cash at beginning of year - continuing operations | 27,497 | 29,900 | 77,872 |
Cash, cash equivalents and restricted cash at end of period - continuing operations | 19,603 | 27,497 | 29,900 |
Parent Company | Reportable Legal Entities | |||
Operating Activities: | |||
Net income (loss) | 22,228 | 38,890 | 54,543 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Amortization of debt issuance costs | 1,240 | 338 | 338 |
Equity in undistributed net losses of subsidiaries, net of tax | (40,166) | (55,879) | (69,419) |
Changes in: | |||
Decrease (increase) in receivables from affiliates | (927) | 5,882 | (9,957) |
(Decrease) increase in payables to affiliates | 4,351 | (8,277) | 4,872 |
Increase (decrease) in other assets | (16) | 3,844 | (1,673) |
(Decrease) increase in loans to affiliates | (3,173) | ||
Increase in other liabilities | 89 | (3,022) | (6,426) |
Total adjustments | (35,429) | (60,287) | (82,265) |
Net cash provided by operating activities - continuing operations | (13,201) | (21,397) | (27,722) |
Financing activities | |||
Proceeds from shares issued | 50,878 | ||
Payments related to offering costs | (49) | ||
Proceeds from notes payable, net of debt issuance costs | 201,908 | 18,000 | |
Repayment of notes payable | (165,000) | (18,000) | |
Tax withholding on stock compensation awards | (2,578) | (740) | |
Proceeds from stock purchase plan | 165 | ||
Capital contributions to affiliates | (21,399) | (10,490) | 9,747 |
Net cash provided by financing activities | 13,047 | 21,648 | 27,747 |
Net increase (decrease) in cash and cash equivalents | (154) | 251 | 25 |
Cash, cash equivalents and restricted cash at beginning of year - continuing operations | 773 | 522 | 497 |
Cash, cash equivalents and restricted cash at end of period - continuing operations | $ 619 | $ 773 | $ 522 |
Schedule V - Allowance for Unco
Schedule V - Allowance for Uncollectible Premiums and Reinsurance Recoverables (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Allowance on Premiums Receivables | |||
Allowance for Uncollectible Premiums and Reinsurance Recoverables | |||
Beginning balance | $ 5,056 | $ 4,823 | $ 4,197 |
Additions | 3,197 | 2,108 | 800 |
Deductions | (1,336) | (1,875) | (174) |
Ending balance | 6,917 | 5,056 | 4,823 |
Allowance on Reinsurance Receivables | |||
Allowance for Uncollectible Premiums and Reinsurance Recoverables | |||
Beginning balance | 10,871 | 9,992 | 7,046 |
Additions | 4,581 | 4,510 | |
Deductions | (2,381) | (3,702) | (1,564) |
Ending balance | $ 8,490 | $ 10,871 | $ 9,992 |