Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 24, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | KINSALE CAPITAL GROUP, INC. | |
Entity Central Index Key | 0001669162 | |
Entity File Number | 001-37848 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 98-0664337 | |
Entity Address, Address Line One | 2221 Edward Holland Drive | |
Entity Address, Address Line Two | Suite 600 | |
Entity Address, City or Town | Richmond | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 23230 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
City Area Code | 804 | |
Local Phone Number | 289-1300 | |
Title of 12(b) Security | Common Stock, par value $0.01 | |
Trading Symbol | KNSL | |
Security Exchange Name | NASDAQ | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 22,254,573 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Fixed-maturity securities available for sale, at fair value (amortized cost: $815,865 in 2020; $714,817 in 2019) | $ 818,905 | $ 729,532 |
Equity securities, at fair value (cost: $85,678 in 2020 $64,245 in 2019) | 83,566 | 78,294 |
Total investments | 902,471 | 807,826 |
Cash and cash equivalents | 52,554 | 100,408 |
Investment income due and accrued | 5,499 | 4,743 |
Premiums receivable, net | 42,187 | 34,483 |
Reinsurance recoverables | 71,422 | 72,574 |
Ceded unearned premiums | 18,112 | 16,118 |
Deferred policy acquisition costs, net of ceding commissions | 26,005 | 23,564 |
Intangible assets | 3,538 | 3,538 |
Deferred Income Tax Assets, Net | 9,869 | 3,374 |
Other assets | 33,832 | 23,922 |
Total assets | 1,165,489 | 1,090,550 |
Liabilities | ||
Reserves for unpaid losses and loss adjustment expenses | 491,333 | 460,058 |
Unearned premiums | 207,662 | 187,374 |
Payable to reinsurers | 10,658 | 7,151 |
Accounts payable and accrued expenses | 7,528 | 12,366 |
Credit facility | 24,075 | 16,744 |
Other liabilities | 22,899 | 977 |
Total liabilities | 764,155 | 684,670 |
Stockholders' Equity | ||
Common stock, $0.01 par value, 400,000,000 shares authorized, 22,253,823 and 22,205,665 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 223 | 222 |
Additional paid-in capital | 230,742 | 229,229 |
Retained earnings | 166,074 | 162,911 |
Accumulated other comprehensive income | 4,295 | 13,518 |
Total stockholders’ equity | 401,334 | 405,880 |
Total liabilities and stockholders’ equity | $ 1,165,489 | $ 1,090,550 |
Consolidated Balance Sheet (Una
Consolidated Balance Sheet (Unaudited) (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets [Abstract] | ||
Fixed-maturity securities available-for-sale - amortized cost | $ 815,865 | $ 714,817 |
Equity securities - cost | $ 85,678 | $ 64,245 |
Stockholders' Equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 22,253,823 | 22,205,665 |
Common stock, shares outstanding (in shares) | 22,253,823 | 22,205,665 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Gross written premiums | $ 124,036 | $ 84,626 |
Ceded written premiums | (15,983) | (11,559) |
Net written premiums | 108,053 | 73,067 |
Change in unearned premiums | (18,292) | (11,576) |
Net earned premiums | 89,761 | 61,491 |
Net investment income | 5,960 | 4,515 |
Change in the fair value of equity securities | (16,161) | 5,895 |
Net realized investment gains | 776 | 280 |
Other income | 10 | 4 |
Total revenues | 80,346 | 72,185 |
Expenses: | ||
Losses and loss adjustment expenses | 53,733 | 33,732 |
Underwriting, acquisition and insurance expenses | 21,583 | 15,616 |
Other expenses | 0 | 36 |
Total expenses | 75,316 | 49,384 |
Income before income taxes | 5,030 | 22,801 |
Total income tax (benefit) expense | (56) | 4,081 |
Net income | 5,086 | 18,720 |
Other comprehensive income (loss): | ||
Change in unrealized (losses) gains on available-for-sale investments, net of taxes of $(2,452) in 2020 and $1,802 in 2019 | (9,223) | 6,780 |
Total comprehensive (loss) income | $ (4,137) | $ 25,500 |
Earnings per share: | ||
Basic | $ 0.23 | $ 0.88 |
Diluted | $ 0.22 | $ 0.86 |
Weighted average shares outstanding: | ||
Basic | 22,109 | 21,169 |
Diluted | 22,678 | 21,763 |
Consolidated Statements of In_2
Consolidated Statements of Income and Comprehensive Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent [Abstract] | ||
Income taxes on change in unrealized gains (losses) on available-for-sale investments | $ (2,452) | $ 1,801 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] |
Balance, shares at Dec. 31, 2018 | 21,242,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation (shares) | 43,000 | ||||
Balance, shares at Mar. 31, 2019 | 21,285,000 | ||||
Balance at Dec. 31, 2018 | $ 263,986 | $ 212 | $ 158,485 | $ 106,545 | $ (1,256) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock under stock-based compensation plan | 598 | 1 | 597 | ||
Stock-based compensation | 507 | 507 | |||
Dividends declared | (1,702) | (1,702) | |||
Other comprehensive (loss) income | 6,780 | 6,780 | |||
Net income | 18,720 | 18,720 | |||
Balance at Mar. 31, 2019 | 288,889 | 213 | 159,589 | 123,563 | 5,524 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adoption of new accounting standard for credit losses, net | Accounting Standards Update 2016-13 [Member] | $ 78 | 78 | |||
Balance, shares at Dec. 31, 2019 | 22,205,665 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation (shares) | 48,000 | ||||
Balance, shares at Mar. 31, 2020 | 22,253,823 | ||||
Balance at Dec. 31, 2019 | $ 405,880 | 222 | 229,229 | 162,911 | 13,518 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock under stock-based compensation plan | 702 | 1 | 701 | ||
Stock-based compensation | 812 | 812 | |||
Dividends declared | (2,001) | (2,001) | |||
Other comprehensive (loss) income | (9,223) | (9,223) | |||
Net income | 5,086 | 5,086 | |||
Balance at Mar. 31, 2020 | $ 401,334 | $ 223 | $ 230,742 | $ 166,074 | $ 4,295 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared, per share | $ 0.09 | $ 0.08 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating Activities | ||
Net cash provided by operating activities | $ 59,683 | $ 33,804 |
Investing Activities | ||
Purchase of property and equipment | (9,264) | (3,925) |
Proceeds from Sale of Property, Plant, and Equipment | 4,999 | 0 |
Purchases – fixed-maturity securities | (146,963) | (43,040) |
Purchases - equity securities | (13,443) | (1,831) |
Sales – fixed-maturity securities | 31,641 | 28,416 |
Sales - equity securities | 0 | 915 |
Maturities and calls – fixed-maturity securities | 19,482 | 14,545 |
Net cash used in investing activities | (113,548) | (4,920) |
Financing Activities | ||
Proceeds from credit facility | 7,300 | 0 |
Proceeds from stock options exercised | 702 | 597 |
Dividends paid | (1,991) | (1,696) |
Net cash provided by (used in) financing activities | 6,011 | (1,099) |
Net change in cash and cash equivalents | (47,854) | 27,785 |
Cash and cash equivalents at beginning of period | 100,408 | 75,089 |
Cash and cash equivalents at end of period | $ 52,554 | $ 102,874 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of significant accounting policies Basis of presentation The accompanying condensed consolidated financial statements and notes have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and do not contain all of the information and footnotes required by U.S. GAAP for complete financial statements. For a more complete description of Kinsale Capital Group, Inc. and its wholly owned subsidiaries' (the "Company") business and accounting policies, these condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of the Company included in the Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. All significant intercompany balances and transactions have been eliminated in consolidation. Interim results are not necessarily indicative of results of operations for the full year. Use of estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management periodically reviews its estimates and assumptions. Recently adopted accounting pronouncements Accounting Standards Update ("ASU") 2016-13, Financial Instruments – Credit Losses (Topic 326) On June 16, 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326)" to provide more useful information about the expected credit losses on financial instruments. The update requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Credit losses relating to available-for-sale debt securities must also be recorded through an allowance for credit losses. However, the amendments limit the amount of the allowance to the amount by which fair value is below amortized cost. The measurement of credit losses on available-for-sale securities is similar under previous GAAP, but the update requires the use of the allowance account through which amounts can be reversed, rather than through an irreversible write-down. The FASB has issued additional ASUs on Topic 326 that do not change the core principle of the guidance in ASU 2016-13 but clarify certain aspects of it. Effective January 1, 2020, the Company adopted this ASU using the modified-retrospective approach and recorded a cumulative effect adjustment to beginning retained earnings. The adoption of this ASU resulted in the recognition of an allowance for credit loss related to the Company’s reinsurance recoverables. However, since the Company enters into contracts with reinsurers that have A.M. Best ratings of “A” (Excellent) or better, the allowance was not material to the Company’s consolidated financial statements. ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract On August 29, 2018, the FASB issued new guidance on a customer's accounting for implementation, set-up and other up-front costs incurred in a cloud computing arrangement hosted by the vendor. The new guidance requires an entity to determine the stage of a project that the implementation activity relates to and the nature of the associated costs in order to determine whether those costs should be expensed as incurred or capitalized. The new guidance also requires the entity to amortize the capitalized implementation costs as an expense over the term of the hosting arrangement. Effective January 1, 2020, the Company adopted ASU 2018-15 using a modified-retrospective approach. The adoption of ASU 2018-15 did not have a material impact on the Company's financial statements. There are no other prospective accounting standards which, upon their effective date, would have a material impact on the Company's consolidated financial statements. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2020 | |
Investments [Abstract] | |
Investments | Investments Available-for-sale investments The following tables summarize the available-for-sale investments at March 31, 2020 and December 31, 2019 : March 31, 2020 Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 110 $ 4 $ — $ 114 Obligations of states, municipalities and political subdivisions 173,422 8,830 (702 ) 181,550 Corporate and other securities 255,784 5,849 (7,418 ) 254,215 Commercial mortgage and asset-backed securities 232,773 2,112 (7,820 ) 227,065 Residential mortgage-backed securities 153,776 3,527 (1,342 ) 155,961 Total available-for-sale investments $ 815,865 $ 20,322 $ (17,282 ) $ 818,905 December 31, 2019 Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 110 $ 2 $ — $ 112 Obligations of states, municipalities and political subdivisions 166,312 7,542 (961 ) 172,893 Corporate and other securities 180,287 4,736 (255 ) 184,768 Commercial mortgage and asset-backed securities 195,750 2,930 (710 ) 197,970 Residential mortgage-backed securities 172,358 1,819 (388 ) 173,789 Total available-for-sale investments $ 714,817 $ 17,029 $ (2,314 ) $ 729,532 Available-for-sale securities in a loss position The Company regularly reviews all its available-for-sale investments with unrealized losses to assess whether the decline in the securities’ fair value is deemed to be a credit loss. The Company considers a number of factors in completing its review of credit losses, including the extent to which a security's fair value has been below cost and the financial condition of an issuer. In addition to specific issuer information, the Company also evaluates the current market and interest rate environment. Generally, a change in a security’s value caused by a change in the market or interest rate environment does not constitute a credit loss. For fixed-maturity securities, the Company also considers whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before recovery and the ability to recover all amounts outstanding when contractually due. When assessing whether it intends to sell a fixed-maturity security or if it is likely to be required to sell a fixed-maturity security before recovery of its amortized cost, the Company evaluates facts and circumstances including, but not limited to, decisions to reposition the investment portfolio, potential sales of investments to meet cash flow needs and potential sales of investments to capitalize on favorable pricing. For fixed-maturity securities where a decline in fair value is below the amortized cost basis and the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, an impairment is recognized in net income based on the fair value of the security at the time of assessment, resulting in a new cost basis for the security. For fixed-maturity securities that the Company has the intent and ability to hold, the Company compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit-related portion of the impairment, which is recognized in net income, resulting in a new cost basis for the security. Any remaining decline in fair value represents the noncredit portion of the impairment, which is recognized in other comprehensive income. Beginning on January 1, 2020, credit losses are recognized through an allowance account. See Note 1 - Recently adopted accounting pronouncements - ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) for additional information. The Company reports investment income due and accrued separately from fixed-maturity securities, available for sale, and has elected not to measure an allowance for credit losses for investment income due and accrued. Investment income due and accrued is written off through net realized gains (losses) on investments at the time the issuer of the bond defaults or is expected to default on payments. The following tables summarize gross unrealized holding losses and estimated fair value for available-for-sale investments by length of time that the securities have continuously been in an unrealized loss position: March 31, 2020 Less than 12 Months 12 Months or Longer Total Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses (in thousands) Fixed maturities: Obligations of states, municipalities and political subdivisions $ 24,377 $ (702 ) $ — $ — $ 24,377 $ (702 ) Corporate and other securities 104,161 (7,418 ) — — 104,161 (7,418 ) Commercial mortgage and asset-backed securities 127,009 (5,608 ) 21,917 (2,212 ) 148,926 (7,820 ) Residential mortgage-backed securities 52,605 (1,324 ) 282 (18 ) 52,887 (1,342 ) Total available-for-sale investments $ 308,152 $ (15,052 ) $ 22,199 $ (2,230 ) $ 330,351 $ (17,282 ) At March 31, 2020 , the Company held 206 fixed-maturity securities in an unrealized loss position with a total estimated fair value of $330.4 million and gross unrealized losses of $17.3 million . Of these securities, 12 were in a continuous unrealized loss position for greater than one year. As discussed above, the Company regularly reviews all fixed-maturity securities within its investment portfolio to determine whether a credit loss has occurred. Based on the Company's review as of March 31, 2020 , unrealized losses were caused by interest rate changes or other market factors and were not credit-specific issues. At March 31, 2020 , 85.2% of the Company’s fixed-maturity securities were rated "A-" or better and all of the Company’s fixed-maturity securities made expected coupon payments under the contractual terms of the securities. For the three months ended March 31, 2020 , the Company concluded that there were no credit losses from fixed-maturity securities with unrealized losses. December 31, 2019 Less than 12 Months 12 Months or Longer Total Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses (in thousands) Fixed maturities: Obligations of states, municipalities and political subdivisions $ 28,997 $ (961 ) $ 254 $ — $ 29,251 $ (961 ) Corporate and other securities 22,409 (251 ) 1,509 (4 ) 23,918 (255 ) Commercial mortgage and asset-backed securities 37,723 (303 ) 46,623 (407 ) 84,346 (710 ) Residential mortgage-backed securities 36,986 (148 ) 24,815 (240 ) 61,801 (388 ) Total available-for-sale investments $ 126,115 $ (1,663 ) $ 73,201 $ (651 ) $ 199,316 $ (2,314 ) Contractual maturities of available-for-sale fixed-maturity securities The amortized cost and estimated fair value of available-for-sale fixed-maturity securities at March 31, 2020 are summarized, by contractual maturity, as follows: March 31, 2020 Amortized Estimated Cost Fair Value (in thousands) Due in one year or less $ 13,680 $ 13,742 Due after one year through five years 109,574 111,474 Due after five years through ten years 134,900 135,904 Due after ten years 171,162 174,759 Commercial mortgage and asset-backed securities 232,773 227,065 Residential mortgage-backed securities 153,776 155,961 Total fixed-maturity securities $ 815,865 $ 818,905 Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, and the lenders may have the right to put the securities back to the borrower. Net investment income The following table presents the components of net investment income for the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, 2020 2019 (in thousands) Interest: Taxable bonds $ 4,611 $ 3,067 Tax exempt municipal bonds 915 1,008 Cash equivalents and short-term investments 250 245 Dividends on equity securities 575 521 Gross investment income 6,351 4,841 Investment expenses (391 ) (326 ) Net investment income $ 5,960 $ 4,515 Realized investment gains and losses The following table presents realized investment gains and losses for the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, 2020 2019 (in thousands) Fixed-maturity securities: Realized gains $ 787 $ 371 Realized losses (23 ) (79 ) Net realized gains from fixed-maturity securities 764 292 Equity securities: Realized gains — 4 Realized losses — (16 ) Net realized losses from equity securities — (12 ) Realized gains from the sales of short-term investments 12 — Net realized investment gains $ 776 $ 280 Change in net unrealized gains (losses) on fixed-maturity securities For the three months ended March 31, 2020 , the change in net unrealized losses for fixed-maturity securities was $11.7 million . For the three months ended March 31, 2019 , the change in net unrealized gains for fixed-maturity securities was $8.6 million . Insurance – statutory deposits The Company had invested assets with a carrying value of $6.9 million on deposit with state regulatory authorities at both March 31, 2020 and December 31, 2019 . Payable for investments purchased The Company recorded a payable for investments purchased, not yet settled, of $13.1 million at March 31, 2020 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair value measurements Fair value is estimated for each class of financial instrument for which it is practical to estimate fair value. Fair value is defined as the price in the principal market that would be received in exchange for an asset or a liability to facilitate an orderly transaction between market participants on the measurement date. Market participants are assumed to be independent, knowledgeable, able and willing to transact an exchange and not acting under duress. Fair value hierarchy disclosures are based on the quality of inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Adjustments to transaction prices or quoted market prices may be required in illiquid or disorderly markets in order to estimate fair value. The three levels of the fair value hierarchy are defined as follows: Level 1 - Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities traded in active markets. Level 2 - Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs. Level 3 - Inputs to the valuation methodology are unobservable for the asset or liability and are significant to the fair value measurement. Fair values of the Company's investment portfolio are estimated using unadjusted prices obtained by its investment manager from third party pricing services, where available. For securities where the Company is unable to obtain fair values from a pricing service or broker, fair values are estimated using information obtained from the Company's investment manager. Management performs several procedures to ascertain the reasonableness of investment values included in the condensed consolidated financial statements including 1) obtaining and reviewing internal control reports from the Company's investment manager that obtains fair values from third party pricing services, 2) discussing with the Company's investment manager its process for reviewing and validating pricing obtained from outside pricing services and 3) reviewing the security pricing received from the Company's investment manager and monitoring changes in unrealized gains and losses. The Company has evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. The following tables present the balances of assets measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 , by level within the fair value hierarchy. March 31, 2020 Level 1 Level 2 Level 3 Total (in thousands) Assets Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 114 $ — $ — $ 114 Obligations of states, municipalities and political subdivisions — 181,550 — 181,550 Corporate and other securities — 254,215 — 254,215 Commercial mortgage and asset-backed securities — 227,065 — 227,065 Residential mortgage-backed securities — 155,961 — 155,961 Total fixed-maturity securities 114 818,791 — 818,905 Equity securities: Exchange traded funds 59,046 — — 59,046 Nonredeemable preferred stock — 24,520 — 24,520 Total equity securities 59,046 24,520 — 83,566 Total $ 59,160 $ 843,311 $ — $ 902,471 December 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 112 $ — $ — $ 112 Obligations of states, municipalities and political subdivisions — 172,893 — 172,893 Corporate and other securities — 184,768 — 184,768 Commercial mortgage and asset-backed securities — 197,970 — 197,970 Residential mortgage-backed securities — 173,789 — 173,789 Total fixed-maturity securities 112 729,420 — 729,532 Equity securities: Exchange traded funds 54,463 — — 54,463 Nonredeemable preferred stock — 23,831 — 23,831 Total equity securities 54,463 23,831 — 78,294 Total $ 54,575 $ 753,251 $ — $ 807,826 There were no assets or liabilities measured at fair value on a nonrecurring basis as of March 31, 2020 or December 31, 2019 . |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 3 Months Ended |
Mar. 31, 2020 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Deferred Policy Acquisition Costs | Deferred policy acquisition costs The following table presents the amounts of policy acquisition costs deferred and amortized for the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, 2020 2019 (in thousands) Balance, beginning of period $ 23,564 $ 14,801 Policy acquisition costs deferred: Direct commissions 18,078 12,363 Ceding commissions (3,872 ) (3,256 ) Other underwriting and policy acquisition costs 1,187 965 Policy acquisition costs deferred 15,393 10,072 Amortization of net policy acquisition costs (12,952 ) (8,559 ) Balance, end of period $ 26,005 $ 16,314 Amortization of net policy acquisition costs is included in the line item "Underwriting, acquisition and insurance expenses" in the accompanying consolidated statements of income and comprehensive income. |
Property and Equipment (Notes)
Property and Equipment (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Property and Equipment [Abstract] | |
Property and Equipment Disclosure [Text Block] | Property and equipment, net Property and equipment are included in "other assets" in the accompanying consolidated balance sheets and consists of the following: March 31, 2020 December 31, 2019 (in thousands) Equipment $ 2,415 $ 2,353 Software 2,999 2,356 Furniture and fixtures 1,025 1,025 Leasehold improvements 984 984 Construction in progress - corporate headquarters 29,332 19,789 36,755 26,507 Accumulated depreciation (4,073 ) (3,873 ) Total property and equipment, net $ 32,682 $ 22,634 Construction in progress includes the purchased land and capitalized expenses related to the construction of the new corporate headquarters' building and parking deck. Construction is expected to be completed in the third quarter of 2020. |
Underwriting, Acquisition and I
Underwriting, Acquisition and Insurance Expenses | 3 Months Ended |
Mar. 31, 2020 | |
Underwriting, Acquisition and Insurance Expenses [Abstract] | |
Underwriting, acquisition and insurance expenses | Underwriting, acquisition and insurance expenses Underwriting, acquisition and insurance expenses for the three months ended March 31, 2020 and 2019 consist of the following: Three Months Ended March 31, 2020 2019 (in thousands) Underwriting, acquisition and insurance expenses incurred: Direct commissions $ 15,142 $ 10,674 Ceding commissions (3,183 ) (2,938 ) Other operating expenses 9,624 7,880 Total $ 21,583 $ 15,616 Other operating expenses within underwriting, acquisition and insurance expenses include salaries, bonus and employee benefits expenses of $8.8 million and $6.8 million for the three months ended March 31, 2020 and 2019 , respectively. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based compensation On July 27, 2016, the Kinsale Capital Group, Inc. 2016 Omnibus Incentive Plan (the "2016 Incentive Plan") became effective. The 2016 Incentive Plan, which is administered by the Compensation, Nominating and Corporate Governance Committee of the Company's Board of Directors, provides for grants of stock options, restricted stock, restricted stock units and other stock-based awards to officers, employees, directors, independent contractors and consultants. The number of shares of common stock available for issuance under the 2016 Incentive Plan may not exceed 2,073,832 . The total compensation cost that has been charged against income for share-based compensation arrangements was $0.8 million and $0.5 million for the three months ended March 31, 2020 and 2019, respectively. Restricted Stock Awards During the three months ended March 31, 2020 , the Company granted restricted stock awards under the 2016 Incentive Plan. The restricted stock awards were valued on the date of grant and will vest over a period of 1 year . The fair value of restricted stock awards was determined based on the closing trading price of the Company’s shares on the grant date or, if no shares were traded on the grant date, the last preceding date for which there was a sale of shares. Except for restrictions placed on the transferability of restricted stock, holders of unvested restricted stock have full stockholder’s rights, including voting rights and the right to receive dividends. Unvested shares of restricted stock awards and accrued dividends, if any, are forfeited upon the termination of service to or employment with the Company. A summary of all restricted stock activity under the 2016 Incentive Plan for the three months ended March 31, 2020 is as follows: For the Three Months Ended Number of Shares Weighted Average Grant Date Fair Value per Share Non-vested outstanding at the beginning of the period 122,723 $ 67.01 Granted 4,428 $ 101.66 Vested (7,020 ) $ 55.56 Forfeited (140 ) $ 53.60 Non-vested outstanding at the end of the period 119,991 $ 68.97 The weighted average grant-date fair value of the Company's restricted stock awards granted during the three months ended March 31, 2020 and 2019 was $101.66 and $55.56 , respectively. The fair value of restricted stock awards that vested during the three months ended March 31, 2020 and 2019 was $0.7 million and $0.4 million , respectively. As of March 31, 2020 , the Company had $6.3 million of total unrecognized stock-based compensation expense expected to be charged to earnings over a weighted-average period of 2.7 years. Stock Options On July 27, 2016, the Board of Directors approved, and the Company granted, 1,036,916 stock options with an exercise price equal to the Initial Public Offering price of $16.00 per share and a weighted-average grant-date fair value of $2.71 per share. The options have a maximum contractual term of 10 years and vest in 4 equal annual installments following the date of the grant. The value of the options granted was estimated at the date of grant using the Black-Scholes pricing model using the following assumptions: Risk-free rate of return 1.26 % Dividend yield 1.25 % Expected share price volatility (1) 18.50 % Expected life in years (2) 6.3 years (1) Expected volatility was based on the Company’s competitors within the industry. (2) Expected life was calculated using the simplified method, which was an average of the contractual term of the option and its ordinary vesting period, as the Company did not have sufficient historical data for determining the expected term of our stock option awards. A summary of option activity as of March 31, 2020 , and changes during the period then ended is presented below: Number of Shares Weighted-average exercise price Weighted-average remaining years of contractual term Aggregate intrinsic value (in thousands) Outstanding at January 1, 2020 614,345 $ 16.00 Granted — — Forfeited — — Exercised (43,870 ) 16.00 Outstanding at March 31, 2020 570,475 $ 16.00 6.3 $ 50,504 Exercisable at March 31, 2020 349,744 $ 16.00 6.3 $ 30,963 The total intrinsic value of options exercised was $4.6 million and $1.9 million during the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020 , the Company had $0.2 million of total unrecognized stock-based compensation expense expected to be charged to earnings over a weighted-average period of 0.3 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per share The following represents a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations contained in the consolidated financial statements: Three Months Ended March 31, 2020 2019 (in thousands, except per share data) Net income $ 5,086 $ 18,720 Weighted average common shares outstanding - basic 22,109 21,169 Effect of potential dilutive securities: Conversion of stock options 508 568 Conversion of restricted stock 61 26 Weighted average common shares outstanding - diluted 22,678 21,763 Earnings per common share: Basic $ 0.23 $ 0.88 Diluted $ 0.22 $ 0.86 There were no anti-dilutive stock awards for the three months ended March 31, 2020 or March 31, 2019. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income taxes The Company uses the estimated annual effective tax rate method for calculating its tax provision in interim periods, which represents the Company's best estimate of the effective tax rate expected for the full year. The estimated annual effective tax rate typically differs from the U.S. statutory tax rate primarily as a result of tax-exempt investment income and any discrete items recognized during the period. The Company's effective tax rates were (1.1)% and 17.9% for the three months ended March 31, 2020 and 2019, respectively. In the first quarter of 2020, the effective tax rate was lower than the federal statutory rate of 21% primarily due to the tax benefits from stock options exercised and tax-exempt investment income in relation to pretax income. Pretax income in the first quarter of 2020 reflected a decline in the fair value of the Company's equity investment portfolio. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted on March 27, 2020. The purpose of the CARES Act is to provide emergency assistance and health care response for individuals, families, and businesses affected by the 2020 coronavirus pandemic. The CARES Act builds on and clarifies a number of changes in corporate tax law implemented by the Tax Cuts and Jobs Act. The Company does not expect that the CARES Act will have a significant impact on its financial statements. |
Reserves for Unpaid Losses and
Reserves for Unpaid Losses and Loss Adjustment Expenses | 3 Months Ended |
Mar. 31, 2020 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | |
Reserves for Unpaid Losses and Loss Adjustment Expenses | Reserves for unpaid losses and loss adjustment expenses The following table presents a reconciliation of consolidated beginning and ending reserves for unpaid losses and loss adjustment expenses: March 31 2020 2019 (in thousands) Gross reserves for unpaid losses and loss adjustment expenses, beginning of year $ 460,058 $ 369,152 Less reinsurance recoverable on unpaid losses 69,792 55,389 Adoption of new accounting standard for credit losses (282 ) — Net reserves for unpaid losses and loss adjustment expenses, beginning of year 390,548 313,763 Incurred losses and loss adjustment expenses: Current year 56,742 40,128 Prior years (3,009 ) (6,396 ) Total net losses and loss adjustment expenses incurred 53,733 33,732 Payments: Current year 777 2,042 Prior years 21,270 17,955 Total payments 22,047 19,997 Net reserves for unpaid losses and loss adjustment expenses, end of period 422,234 327,498 Reinsurance recoverable on unpaid losses 69,099 57,627 Gross reserves for unpaid losses and loss adjustment expenses, end of period $ 491,333 $ 385,125 During the three months ended March 31, 2020 , the reserves for unpaid losses and loss adjustment expenses held at December 31, 2019 developed favorably by $3.0 million across substantially all accident years, which resulted from reported losses emerging at a lower level than expected across most statutory lines of business. During the three months ended March 31, 2019 , the reserves for unpaid losses and loss adjustment expenses held at December 31, 2018 developed favorably by $6.4 million . The favorable development was primarily attributable to the 2015 through 2018 accident years of $6.3 million , which resulted from reported losses emerging at a lower level than expected across most statutory lines of business. |
Reinsurance
Reinsurance | 3 Months Ended |
Mar. 31, 2020 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance The following table summarizes the effect of reinsurance on premiums written and earned for the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, 2020 2019 (in thousands) Premiums written: Direct $ 124,036 $ 84,563 Assumed — 63 Ceded (15,983 ) (11,559 ) Net written $ 108,053 $ 73,067 Premiums earned: Direct $ 103,734 $ 72,078 Assumed 15 57 Ceded (13,988 ) (10,644 ) Net earned $ 89,761 $ 61,491 Incurred losses and loss adjustment expenses were net of reinsurance (ceded incurred losses and loss adjustment expenses) of $6.5 million and $4.3 million for the three months ended March 31, 2020 and 2019 , respectively. At March 31, 2020 , reinsurance recoverables on paid and unpaid losses were $2.3 million and $69.1 million , respectively. At December 31, 2019 , reinsurance recoverables on paid and unpaid losses were $2.8 million and $69.8 million |
Credit Agreement
Credit Agreement | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Credit Agreement [Text Block] | Credit Agreement On May 28, 2019, the Company entered into a Credit Agreement (the “Credit Agreement”) that provided the Company with a $50.0 million senior unsecured revolving credit facility (the “Credit Facility”) and an uncommitted accordion feature that permits the Company to increase the commitments by an additional $30.0 million . The Credit Facility has a maturity of May 28, 2024 . Borrowings under the Credit Facility will be used to fund construction of the Company’s new headquarters and may also be used for working capital and general corporate purposes. Loans under the Credit Facility may be subject to varying rates of interest depending on whether the loan is a Eurodollar loan or an alternate base rate (ABR) loan, at the Company's election. Eurodollar loans bear an interest rate per annum equal to adjusted LIBOR for the applicable interest period plus a margin of 1.75%. ABR loans bear an interest rate per annum equal to (a) the higher of the prime rate, the New York Federal Reserve Board Rate plus 0.50% or the one-month adjusted LIBOR plus 1%, plus (b) the applicable margin of 0.75%. As of March 31, 2020, there was $24.1 million outstanding under the Credit Facility, net of debt issuance cost of $0.5 million , with a weighted average interest rate of 3.01% . The Credit Agreement also contains representations and warranties and affirmative and negative covenants customary for financings of this type, as well as customary events of default provisions. As of March 31, 2020, the Company was in compliance with all of its financial covenants under the Credit Facility. |
Other Comprehensive (Loss) Inco
Other Comprehensive (Loss) Income | 3 Months Ended |
Mar. 31, 2020 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Other Comprehensive Income | Other comprehensive (loss) income The following table summarizes the components of other comprehensive (loss) income for the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, 2020 2019 (in thousands) Unrealized (losses) gains on fixed-maturity securities arising during the period, before income taxes $ (10,911 ) $ 8,873 Income taxes 2,291 (1,863 ) Unrealized (losses) gains arising during the period, net of income taxes (8,620 ) 7,010 Less reclassification adjustment: Net realized gains on fixed-maturity securities, before income taxes 764 292 Income taxes (161 ) (62 ) Reclassification adjustment included in net income, net of income taxes 603 230 Other comprehensive (loss) income $ (9,223 ) $ 6,780 The sale of an available-for-sale fixed-maturity security results in amounts being reclassified from accumulated other comprehensive income to realized gains or losses in current period earnings. The related tax effect of the reclassification adjustment is recorded in income tax expense in current period earnings. See Note 2 for additional information. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The accompanying condensed consolidated financial statements and notes have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and do not contain all of the information and footnotes required by U.S. GAAP for complete financial statements. For a more complete description of Kinsale Capital Group, Inc. and its wholly owned subsidiaries' (the "Company") business and accounting policies, these condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of the Company included in the Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. All significant intercompany balances and transactions have been eliminated in consolidation. Interim results are not necessarily indicative of results of operations for the full year. |
Use of Estimates | Use of estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management periodically reviews its estimates and assumptions. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements Accounting Standards Update ("ASU") 2016-13, Financial Instruments – Credit Losses (Topic 326) On June 16, 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326)" to provide more useful information about the expected credit losses on financial instruments. The update requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Credit losses relating to available-for-sale debt securities must also be recorded through an allowance for credit losses. However, the amendments limit the amount of the allowance to the amount by which fair value is below amortized cost. The measurement of credit losses on available-for-sale securities is similar under previous GAAP, but the update requires the use of the allowance account through which amounts can be reversed, rather than through an irreversible write-down. The FASB has issued additional ASUs on Topic 326 that do not change the core principle of the guidance in ASU 2016-13 but clarify certain aspects of it. Effective January 1, 2020, the Company adopted this ASU using the modified-retrospective approach and recorded a cumulative effect adjustment to beginning retained earnings. The adoption of this ASU resulted in the recognition of an allowance for credit loss related to the Company’s reinsurance recoverables. However, since the Company enters into contracts with reinsurers that have A.M. Best ratings of “A” (Excellent) or better, the allowance was not material to the Company’s consolidated financial statements. ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract On August 29, 2018, the FASB issued new guidance on a customer's accounting for implementation, set-up and other up-front costs incurred in a cloud computing arrangement hosted by the vendor. The new guidance requires an entity to determine the stage of a project that the implementation activity relates to and the nature of the associated costs in order to determine whether those costs should be expensed as incurred or capitalized. The new guidance also requires the entity to amortize the capitalized implementation costs as an expense over the term of the hosting arrangement. Effective January 1, 2020, the Company adopted ASU 2018-15 using a modified-retrospective approach. The adoption of ASU 2018-15 did not have a material impact on the Company's financial statements. There are no other prospective accounting standards which, upon their effective date, would have a material impact on the Company's consolidated financial statements. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investments [Abstract] | |
Available-for-sale Investments | The following tables summarize the available-for-sale investments at March 31, 2020 and December 31, 2019 : March 31, 2020 Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 110 $ 4 $ — $ 114 Obligations of states, municipalities and political subdivisions 173,422 8,830 (702 ) 181,550 Corporate and other securities 255,784 5,849 (7,418 ) 254,215 Commercial mortgage and asset-backed securities 232,773 2,112 (7,820 ) 227,065 Residential mortgage-backed securities 153,776 3,527 (1,342 ) 155,961 Total available-for-sale investments $ 815,865 $ 20,322 $ (17,282 ) $ 818,905 December 31, 2019 Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 110 $ 2 $ — $ 112 Obligations of states, municipalities and political subdivisions 166,312 7,542 (961 ) 172,893 Corporate and other securities 180,287 4,736 (255 ) 184,768 Commercial mortgage and asset-backed securities 195,750 2,930 (710 ) 197,970 Residential mortgage-backed securities 172,358 1,819 (388 ) 173,789 Total available-for-sale investments $ 714,817 $ 17,029 $ (2,314 ) $ 729,532 |
Available-for-sale Securities in an Unrealized Loss Position | December 31, 2019 Less than 12 Months 12 Months or Longer Total Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses (in thousands) Fixed maturities: Obligations of states, municipalities and political subdivisions $ 28,997 $ (961 ) $ 254 $ — $ 29,251 $ (961 ) Corporate and other securities 22,409 (251 ) 1,509 (4 ) 23,918 (255 ) Commercial mortgage and asset-backed securities 37,723 (303 ) 46,623 (407 ) 84,346 (710 ) Residential mortgage-backed securities 36,986 (148 ) 24,815 (240 ) 61,801 (388 ) Total available-for-sale investments $ 126,115 $ (1,663 ) $ 73,201 $ (651 ) $ 199,316 $ (2,314 ) The following tables summarize gross unrealized holding losses and estimated fair value for available-for-sale investments by length of time that the securities have continuously been in an unrealized loss position: March 31, 2020 Less than 12 Months 12 Months or Longer Total Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses (in thousands) Fixed maturities: Obligations of states, municipalities and political subdivisions $ 24,377 $ (702 ) $ — $ — $ 24,377 $ (702 ) Corporate and other securities 104,161 (7,418 ) — — 104,161 (7,418 ) Commercial mortgage and asset-backed securities 127,009 (5,608 ) 21,917 (2,212 ) 148,926 (7,820 ) Residential mortgage-backed securities 52,605 (1,324 ) 282 (18 ) 52,887 (1,342 ) Total available-for-sale investments $ 308,152 $ (15,052 ) $ 22,199 $ (2,230 ) $ 330,351 $ (17,282 ) |
Contractual Maturities of Available-for-sale Fixed Maturity Securities | The amortized cost and estimated fair value of available-for-sale fixed-maturity securities at March 31, 2020 are summarized, by contractual maturity, as follows: March 31, 2020 Amortized Estimated Cost Fair Value (in thousands) Due in one year or less $ 13,680 $ 13,742 Due after one year through five years 109,574 111,474 Due after five years through ten years 134,900 135,904 Due after ten years 171,162 174,759 Commercial mortgage and asset-backed securities 232,773 227,065 Residential mortgage-backed securities 153,776 155,961 Total fixed-maturity securities $ 815,865 $ 818,905 |
Net Investment Income | The following table presents the components of net investment income for the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, 2020 2019 (in thousands) Interest: Taxable bonds $ 4,611 $ 3,067 Tax exempt municipal bonds 915 1,008 Cash equivalents and short-term investments 250 245 Dividends on equity securities 575 521 Gross investment income 6,351 4,841 Investment expenses (391 ) (326 ) Net investment income $ 5,960 $ 4,515 |
Realized Gain (Loss) on Investments | The following table presents realized investment gains and losses for the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, 2020 2019 (in thousands) Fixed-maturity securities: Realized gains $ 787 $ 371 Realized losses (23 ) (79 ) Net realized gains from fixed-maturity securities 764 292 Equity securities: Realized gains — 4 Realized losses — (16 ) Net realized losses from equity securities — (12 ) Realized gains from the sales of short-term investments 12 — Net realized investment gains $ 776 $ 280 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Assets Measured at Fair Value on a Recurring Basis | The following tables present the balances of assets measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 , by level within the fair value hierarchy. March 31, 2020 Level 1 Level 2 Level 3 Total (in thousands) Assets Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 114 $ — $ — $ 114 Obligations of states, municipalities and political subdivisions — 181,550 — 181,550 Corporate and other securities — 254,215 — 254,215 Commercial mortgage and asset-backed securities — 227,065 — 227,065 Residential mortgage-backed securities — 155,961 — 155,961 Total fixed-maturity securities 114 818,791 — 818,905 Equity securities: Exchange traded funds 59,046 — — 59,046 Nonredeemable preferred stock — 24,520 — 24,520 Total equity securities 59,046 24,520 — 83,566 Total $ 59,160 $ 843,311 $ — $ 902,471 December 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 112 $ — $ — $ 112 Obligations of states, municipalities and political subdivisions — 172,893 — 172,893 Corporate and other securities — 184,768 — 184,768 Commercial mortgage and asset-backed securities — 197,970 — 197,970 Residential mortgage-backed securities — 173,789 — 173,789 Total fixed-maturity securities 112 729,420 — 729,532 Equity securities: Exchange traded funds 54,463 — — 54,463 Nonredeemable preferred stock — 23,831 — 23,831 Total equity securities 54,463 23,831 — 78,294 Total $ 54,575 $ 753,251 $ — $ 807,826 |
Deferred Policy Acquisition C_2
Deferred Policy Acquisition Costs (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Deferred Policy Acquisition Costs | The following table presents the amounts of policy acquisition costs deferred and amortized for the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, 2020 2019 (in thousands) Balance, beginning of period $ 23,564 $ 14,801 Policy acquisition costs deferred: Direct commissions 18,078 12,363 Ceding commissions (3,872 ) (3,256 ) Other underwriting and policy acquisition costs 1,187 965 Policy acquisition costs deferred 15,393 10,072 Amortization of net policy acquisition costs (12,952 ) (8,559 ) Balance, end of period $ 26,005 $ 16,314 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property and Equipment [Abstract] | |
Property and Equipment [Table Text Block] | Property and equipment are included in "other assets" in the accompanying consolidated balance sheets and consists of the following: March 31, 2020 December 31, 2019 (in thousands) Equipment $ 2,415 $ 2,353 Software 2,999 2,356 Furniture and fixtures 1,025 1,025 Leasehold improvements 984 984 Construction in progress - corporate headquarters 29,332 19,789 36,755 26,507 Accumulated depreciation (4,073 ) (3,873 ) Total property and equipment, net $ 32,682 $ 22,634 |
Underwriting, Acquisition and_2
Underwriting, Acquisition and Insurance Expenses (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Underwriting, Acquisition and Insurance Expenses [Abstract] | |
Underwriting, acquisition and insurance expenses | Underwriting, acquisition and insurance expenses for the three months ended March 31, 2020 and 2019 consist of the following: Three Months Ended March 31, 2020 2019 (in thousands) Underwriting, acquisition and insurance expenses incurred: Direct commissions $ 15,142 $ 10,674 Ceding commissions (3,183 ) (2,938 ) Other operating expenses 9,624 7,880 Total $ 21,583 $ 15,616 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Restricted Stock Activity | A summary of all restricted stock activity under the 2016 Incentive Plan for the three months ended March 31, 2020 is as follows: For the Three Months Ended Number of Shares Weighted Average Grant Date Fair Value per Share Non-vested outstanding at the beginning of the period 122,723 $ 67.01 Granted 4,428 $ 101.66 Vested (7,020 ) $ 55.56 Forfeited (140 ) $ 53.60 Non-vested outstanding at the end of the period 119,991 $ 68.97 |
Stock Options Valuation Assumptions | The value of the options granted was estimated at the date of grant using the Black-Scholes pricing model using the following assumptions: Risk-free rate of return 1.26 % Dividend yield 1.25 % Expected share price volatility (1) 18.50 % Expected life in years (2) 6.3 years |
Stock Options Activity | A summary of option activity as of March 31, 2020 , and changes during the period then ended is presented below: Number of Shares Weighted-average exercise price Weighted-average remaining years of contractual term Aggregate intrinsic value (in thousands) Outstanding at January 1, 2020 614,345 $ 16.00 Granted — — Forfeited — — Exercised (43,870 ) 16.00 Outstanding at March 31, 2020 570,475 $ 16.00 6.3 $ 50,504 Exercisable at March 31, 2020 349,744 $ 16.00 6.3 $ 30,963 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | The following represents a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations contained in the consolidated financial statements: Three Months Ended March 31, 2020 2019 (in thousands, except per share data) Net income $ 5,086 $ 18,720 Weighted average common shares outstanding - basic 22,109 21,169 Effect of potential dilutive securities: Conversion of stock options 508 568 Conversion of restricted stock 61 26 Weighted average common shares outstanding - diluted 22,678 21,763 Earnings per common share: Basic $ 0.23 $ 0.88 Diluted $ 0.22 $ 0.86 |
Reserves for Unpaid Losses an_2
Reserves for Unpaid Losses and Loss Adjustment Expenses (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | |
Schedule of Unpaid Losses and Loss Adjustment Expenses | The following table presents a reconciliation of consolidated beginning and ending reserves for unpaid losses and loss adjustment expenses: March 31 2020 2019 (in thousands) Gross reserves for unpaid losses and loss adjustment expenses, beginning of year $ 460,058 $ 369,152 Less reinsurance recoverable on unpaid losses 69,792 55,389 Adoption of new accounting standard for credit losses (282 ) — Net reserves for unpaid losses and loss adjustment expenses, beginning of year 390,548 313,763 Incurred losses and loss adjustment expenses: Current year 56,742 40,128 Prior years (3,009 ) (6,396 ) Total net losses and loss adjustment expenses incurred 53,733 33,732 Payments: Current year 777 2,042 Prior years 21,270 17,955 Total payments 22,047 19,997 Net reserves for unpaid losses and loss adjustment expenses, end of period 422,234 327,498 Reinsurance recoverable on unpaid losses 69,099 57,627 Gross reserves for unpaid losses and loss adjustment expenses, end of period $ 491,333 $ 385,125 |
Reinsurance (Tables)
Reinsurance (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Reinsurance Disclosures [Abstract] | |
Effects of Reinsurance | The following table summarizes the effect of reinsurance on premiums written and earned for the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, 2020 2019 (in thousands) Premiums written: Direct $ 124,036 $ 84,563 Assumed — 63 Ceded (15,983 ) (11,559 ) Net written $ 108,053 $ 73,067 Premiums earned: Direct $ 103,734 $ 72,078 Assumed 15 57 Ceded (13,988 ) (10,644 ) Net earned $ 89,761 $ 61,491 |
Other Comprehensive (Loss) In_2
Other Comprehensive (Loss) Income (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Comprehensive Income (Loss) | The following table summarizes the components of other comprehensive (loss) income for the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, 2020 2019 (in thousands) Unrealized (losses) gains on fixed-maturity securities arising during the period, before income taxes $ (10,911 ) $ 8,873 Income taxes 2,291 (1,863 ) Unrealized (losses) gains arising during the period, net of income taxes (8,620 ) 7,010 Less reclassification adjustment: Net realized gains on fixed-maturity securities, before income taxes 764 292 Income taxes (161 ) (62 ) Reclassification adjustment included in net income, net of income taxes 603 230 Other comprehensive (loss) income $ (9,223 ) $ 6,780 |
Investments Investments (Availa
Investments Investments (Available for Sale) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 815,865 | $ 714,817 |
Gross Unrealized Holding Gains | 20,322 | 17,029 |
Gross Unrealized Holding Losses | 17,282 | 2,314 |
Estimated Fair Value | 818,905 | 729,532 |
U.S. Treasury securities and obligations of U.S. government agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 110 | 110 |
Gross Unrealized Holding Gains | 4 | 2 |
Gross Unrealized Holding Losses | 0 | 0 |
Estimated Fair Value | 114 | 112 |
Obligations of states, municipalities and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 173,422 | 166,312 |
Gross Unrealized Holding Gains | 8,830 | 7,542 |
Gross Unrealized Holding Losses | 702 | 961 |
Estimated Fair Value | 181,550 | 172,893 |
Corporate and other securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 255,784 | 180,287 |
Gross Unrealized Holding Gains | 5,849 | 4,736 |
Gross Unrealized Holding Losses | 7,418 | 255 |
Estimated Fair Value | 254,215 | 184,768 |
Commercial mortgage and asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 232,773 | 195,750 |
Gross Unrealized Holding Gains | 2,112 | 2,930 |
Gross Unrealized Holding Losses | 7,820 | 710 |
Estimated Fair Value | 227,065 | 197,970 |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 153,776 | 172,358 |
Gross Unrealized Holding Gains | 3,527 | 1,819 |
Gross Unrealized Holding Losses | 1,342 | 388 |
Estimated Fair Value | $ 155,961 | $ 173,789 |
Investments Available-for-Sale
Investments Available-for-Sale Securities in a Loss Position (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Estimated Fair Value | $ 308,152 | $ 126,115 |
Less than 12 months, gross unrealized holding losses | 15,052 | 1,663 |
12 Months or Longer, Estimated Fair Value | 22,199 | 73,201 |
12 Months or Longer, Gross Unrealized Holding Losses | 2,230 | 651 |
Total Estimated Fair Value | 330,351 | 199,316 |
Total Gross Unrealized Holding Losses | 17,282 | 2,314 |
Obligations of states, municipalities and political subdivisions [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Estimated Fair Value | 24,377 | 28,997 |
Less than 12 months, gross unrealized holding losses | 702 | 961 |
12 Months or Longer, Estimated Fair Value | 0 | 254 |
12 Months or Longer, Gross Unrealized Holding Losses | 0 | 0 |
Total Estimated Fair Value | 24,377 | 29,251 |
Total Gross Unrealized Holding Losses | 702 | 961 |
Corporate and other securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Estimated Fair Value | 104,161 | 22,409 |
Less than 12 months, gross unrealized holding losses | 7,418 | 251 |
12 Months or Longer, Estimated Fair Value | 0 | 1,509 |
12 Months or Longer, Gross Unrealized Holding Losses | 0 | 4 |
Total Estimated Fair Value | 104,161 | 23,918 |
Total Gross Unrealized Holding Losses | 7,418 | 255 |
Commercial mortgage and asset-backed securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Estimated Fair Value | 127,009 | 37,723 |
Less than 12 months, gross unrealized holding losses | 5,608 | 303 |
12 Months or Longer, Estimated Fair Value | 21,917 | 46,623 |
12 Months or Longer, Gross Unrealized Holding Losses | 2,212 | 407 |
Total Estimated Fair Value | 148,926 | 84,346 |
Total Gross Unrealized Holding Losses | 7,820 | 710 |
Residential mortgage-backed securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Estimated Fair Value | 52,605 | 36,986 |
Less than 12 months, gross unrealized holding losses | 1,324 | 148 |
12 Months or Longer, Estimated Fair Value | 282 | 24,815 |
12 Months or Longer, Gross Unrealized Holding Losses | 18 | 240 |
Total Estimated Fair Value | 52,887 | 61,801 |
Total Gross Unrealized Holding Losses | $ 1,342 | $ 388 |
Investments Available-for-Sal_2
Investments Available-for-Sale Securities in a Loss Position Narrative (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)Rate | Dec. 31, 2019USD ($) | |
Debt Securities, Available-for-sale [Line Items] | ||
Number of available-for-sale securities in unrealized loss positions | 206 | |
Total estimated fair value | $ 330,351 | $ 199,316 |
Total gross unrealized holding losses | $ 17,282 | $ 2,314 |
Number of available-for-sale securities in unrealized loss positions, greater than one year | 12 | |
Credit losses | $ 0 | |
Fixed maturities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities, percentage of securities with ratings of A minus or better | Rate | 85.20% |
Investments Contractual Maturit
Investments Contractual Maturities of Available-for-Sale Fixed Maturity Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Amortized Cost | ||
Due in one year or less, Amortized Cost | $ 13,680 | |
Due after one year through five years, Amortized Cost | 109,574 | |
Due after five years through ten years, Amortized Cost | 134,900 | |
Due after ten years, Amortized Cost | 171,162 | |
Total fixed maturities, Amortized Cost | 815,865 | $ 714,817 |
Estimated Fair Value | ||
Due in one year or less, Estimated Fair Value | 13,742 | |
Due after one year through five years, Estimated Fair Value | 111,474 | |
Due after five years through ten years, Estimated Fair Value | 135,904 | |
Due after ten years, Estimated Fair Value | 174,759 | |
Estimated Fair Value | 818,905 | 729,532 |
Commercial mortgage and asset-backed securities [Member] | ||
Amortized Cost | ||
Without single maturity date, Amortized Cost | 232,773 | |
Total fixed maturities, Amortized Cost | 232,773 | 195,750 |
Estimated Fair Value | ||
Without single maturity date, Estimated Fair Value | 227,065 | |
Estimated Fair Value | 227,065 | 197,970 |
Residential mortgage-backed securities [Member] | ||
Amortized Cost | ||
Without single maturity date, Amortized Cost | 153,776 | |
Total fixed maturities, Amortized Cost | 153,776 | 172,358 |
Estimated Fair Value | ||
Without single maturity date, Estimated Fair Value | 155,961 | |
Estimated Fair Value | $ 155,961 | $ 173,789 |
Investments Net Investment Inco
Investments Net Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Components of Net Investment Income [Abstract] | ||
Taxable bonds | $ 4,611 | $ 3,067 |
Tax exempt municipal bonds | 915 | 1,008 |
Cash equivalents and short-term investments | 250 | 245 |
Dividends on equity securities | 575 | 521 |
Gross investment income | 6,351 | 4,841 |
Investment expenses | (391) | (326) |
Net investment income | $ 5,960 | $ 4,515 |
Investments Realized Gains (Los
Investments Realized Gains (Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Debt and Equity Securities, Realized Gain (Loss) [Abstract] | ||
Realized gains, fixed-maturity securities | $ 787 | $ 371 |
Realized losses, fixed-maturity securities | (23) | (79) |
Net realized gains, fixed-maturity securities | 764 | 292 |
Realized gains, equity securities | 0 | 4 |
Realized losses, equity securities | 0 | (16) |
Net realized losses, equity securities | 0 | (12) |
Realized gains from the sales of short-term investments | 12 | 0 |
Net realized investment gains | $ 776 | $ 280 |
Investments Unrealized Gains (L
Investments Unrealized Gains (Losses) on Investments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Debt Securities, Available-for-sale [Line Items] | ||
Change in unrealized gains (losses), fixed-maturity securities | $ (11.7) | $ 8.6 |
Investments Investment Narrativ
Investments Investment Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Investments, Debt and Equity Securities [Abstract] | ||
Assets on deposit with state regulatory authorities | $ 6.9 | $ 6.9 |
Payable for investments purchased | $ 13.1 |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Measurements - Fair Value Hierarchy (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | $ 902,471 | $ 807,826 |
Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 59,160 | 54,575 |
Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 843,311 | 753,251 |
Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 0 | 0 |
Fixed maturities [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 818,905 | 729,532 |
Fixed maturities [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 114 | 112 |
Fixed maturities [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 818,791 | 729,420 |
Fixed maturities [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 114 | 112 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 114 | 112 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Obligations of states, municipalities and political subdivisions [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 181,550 | 172,893 |
Obligations of states, municipalities and political subdivisions [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Obligations of states, municipalities and political subdivisions [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 181,550 | 172,893 |
Obligations of states, municipalities and political subdivisions [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Corporate and other securities [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 254,215 | 184,768 |
Corporate and other securities [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Corporate and other securities [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 254,215 | 184,768 |
Corporate and other securities [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Commercial mortgage and asset-backed securities [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 227,065 | 197,970 |
Commercial mortgage and asset-backed securities [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Commercial mortgage and asset-backed securities [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 227,065 | 197,970 |
Commercial mortgage and asset-backed securities [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Residential mortgage-backed securities [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 155,961 | 173,789 |
Residential mortgage-backed securities [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Residential mortgage-backed securities [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 155,961 | 173,789 |
Residential mortgage-backed securities [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Equity securities [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 83,566 | 78,294 |
Equity securities [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 59,046 | 54,463 |
Equity securities [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 24,520 | 23,831 |
Equity securities [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 0 | 0 |
Exchange traded funds [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 59,046 | 54,463 |
Exchange traded funds [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 59,046 | 54,463 |
Exchange traded funds [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 0 | 0 |
Exchange traded funds [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 0 | 0 |
Nonredeemable preferred stock [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 24,520 | 23,831 |
Nonredeemable preferred stock [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 0 | 0 |
Nonredeemable preferred stock [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 24,520 | 23,831 |
Nonredeemable preferred stock [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | $ 0 | $ 0 |
Fair Value Measurements Narrati
Fair Value Measurements Narrative (Details) - Nonrecurring [Member] - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 0 | $ 0 |
Liabilities measured at fair value | $ 0 | $ 0 |
Deferred Policy Acquisition C_3
Deferred Policy Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||
Balance, beginning of period | $ 23,564 | $ 14,801 |
Policy acquisition costs deferred: | ||
Direct commissions deferred | 18,078 | 12,363 |
Ceding commissions deferred | (3,872) | (3,256) |
Other underwriting and policy acquisition costs | 1,187 | 965 |
Policy acquisition costs deferred | 15,393 | 10,072 |
Amortization of net policy acquisition costs | (12,952) | (8,559) |
Balance, end of period | $ 26,005 | $ 16,314 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 36,755 | $ 26,507 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (4,073) | (3,873) |
Property, Plant and Equipment, Net | 32,682 | 22,634 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 2,415 | 2,353 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 2,999 | 2,356 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,025 | 1,025 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 984 | 984 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 29,332 | $ 19,789 |
Underwriting, Acquisition and_3
Underwriting, Acquisition and Insurance Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Underwriting, Acquisition and Insurance Expenses [Abstract] | ||
Gross commissions | $ 15,142 | $ 10,674 |
Ceding commissions | (3,183) | (2,938) |
Other operating expenses | 9,624 | 7,880 |
Underwriting, acquisition, and insurance expenses | 21,583 | 15,616 |
Salaries, bonuses and employee benefits | $ 8,800 | $ 6,800 |
Stock-based Compensation Narrat
Stock-based Compensation Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 0.8 | $ 0.5 |
Maximum [Member] | 2016 Omnibus Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for issuance | 2,073,832 |
Stock-based Compensation Narr_2
Stock-based Compensation Narrative - Restricted Stock Awards (Details) - Restricted stock [Member] - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Fair value of restricted stock awards vested | $ 0.7 | $ 0.4 |
Unrecognized stock-based compensation expense | $ 6.3 | |
Compensation cost not yet recognized, period | 2 years 8 months 12 days |
Stock-based Compensation Restri
Stock-based Compensation Restrictive Stock Awards (Details) - Restricted stock [Member] - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Nonvested Restricted Stock, Number of Shares [Roll Forward] | ||
Nonvested outstanding at the beginning of the period, shares | 122,723 | |
Granted, shares | 4,428 | |
Vested, shares | (7,020) | |
Forfeited, shares | (140) | |
Nonvested outstanding at the end of the period, shares | 119,991 | |
Nonvested Restricted Stock, Weighted Average Grant Date Fair Value [Abstract] | ||
Nonvested outstanding at the beginning of the period | $ 67.01 | |
Granted | 101.66 | $ 55.56 |
Vested | 55.56 | |
Forfeited | 53.60 | |
Nonvested outstanding at the end of the period | $ 68.97 |
Stock-based Compensation Narr_3
Stock-based Compensation Narrative - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | Jul. 27, 2016 | Mar. 31, 2020 | Mar. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of options exercised | $ 4.6 | $ 1.9 | |
Weighted average exercise price, granted | $ 0 | ||
Compensation not yet recognized | $ 0.2 | ||
Stock option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average exercise price, granted | $ 16 | ||
Weighted average grant date fair value | $ 2.71 | ||
Contractual term | 10 years | ||
Vesting period | 4 years | ||
Compensation cost not yet recognized, period | 3 months 18 days |
Stock-based Compensation Stock
Stock-based Compensation Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 27, 2016 | Mar. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding beginning of period, shares | 614,345 | |
Granted, shares | 0 | |
Forfeited, shares | 0 | |
Exercised, shares | (43,870) | |
Outstanding end of period, shares | 570,475 | |
Exercisable, shares | 349,744 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding beginning of period | $ 16 | |
Granted | 0 | |
Forfeited | 0 | |
Exercised | 16 | |
Outstanding end of period | 16 | |
Exercisable end of period | $ 16 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Outstanding, weighted average remaining contractual term | 6 years 3 months 18 days | |
Exercisable, weighted average remaining contractual term | 6 years 3 months 18 days | |
Outstanding, aggregate intrinsic value | $ 50,504 | |
Exercisable, aggregate intrinsic value | $ 30,963 | |
Stock option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Risk-free rate of return | 1.26% | |
Dividend yield | 1.25% | |
Expected share price volatility | 18.50% | |
Expected life in years | 6 years 3 months 18 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Granted, shares | 1,036,916 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Granted | $ 16 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share, [Line Items] | ||
Net income | $ 5,086 | $ 18,720 |
Weighted Average Number of Shares Outstanding, Basic [Abstract] | ||
Weighted average shares outstanding - basic | 22,109 | 21,169 |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | ||
Weighted average shares outstanding - diluted | 22,678 | 21,763 |
Earnings Per Share, Basic [Abstract] | ||
Earnings per share - basic | $ 0.23 | $ 0.88 |
Earnings Per Share, Diluted [Abstract] | ||
Earnings per share - diluted | $ 0.22 | $ 0.86 |
Stock option [Member] | ||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | ||
Dilutive effect of shares issued under stock compensation arrangements | 508 | 568 |
Restricted stock [Member] | ||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | ||
Dilutive effect of shares issued under stock compensation arrangements | 61 | 26 |
Earnings Per Share Narrative (D
Earnings Per Share Narrative (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restricted stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 0 | 0 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2020Rate | Mar. 31, 2019Rate | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | (1.10%) | 17.90% |
Reserves for Unpaid Losses an_3
Reserves for Unpaid Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||
Gross reserves for unpaid losses and loss adjustment expenses, beginning of year | $ 460,058 | $ 369,152 | ||
Reinsurance recoverable on unpaid losses | 69,099 | 57,627 | $ 69,792 | $ 55,389 |
Adoption of new accounting standard for credit losses | (282) | 0 | ||
Net reserves for unpaid losses and loss adjustment expenses, beginning of year | 390,548 | 313,763 | ||
Incurred losses and loss adjustment expenses: | ||||
Current year | 56,742 | 40,128 | ||
Prior years | (3,009) | (6,396) | ||
Total net losses and loss adjustment expenses incurred | 53,733 | 33,732 | ||
Payments: | ||||
Current year | 777 | 2,042 | ||
Prior years | 21,270 | 17,955 | ||
Total payments | 22,047 | 19,997 | ||
Reinsurance recoverable on unpaid losses | 69,099 | 57,627 | $ 69,792 | $ 55,389 |
Net reserves for unpaid losses and loss adjustment expenses, end of period | 422,234 | 327,498 | ||
Gross reserves for unpaid losses and loss adjustment expenses, end of period | $ 491,333 | $ 385,125 |
Reserves for Unpaid Losses an_4
Reserves for Unpaid Losses and Loss Adjustment Expenses Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Claims Development [Line Items] | ||
Adverse (favorable) development on prior year loss reserves | $ (3,009) | $ (6,396) |
Accident Year 2015-2018 [Member] | ||
Claims Development [Line Items] | ||
Adverse (favorable) development on prior year loss reserves | $ (6,300) |
Reinsurance (Details)
Reinsurance (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Premiums Written, Net [Abstract] | |||
Premiums written - direct | $ 124,036 | $ 84,563 | |
Premiums written - assumed | 0 | 63 | |
Premiums written - ceded | (15,983) | (11,559) | |
Net written premiums | 108,053 | 73,067 | |
Premiums Earned, Net [Abstract] | |||
Premiums earned - direct | 103,734 | 72,078 | |
Premiums earned - assumed | 15 | 57 | |
Premiums earned - ceded | (13,988) | (10,644) | |
Net earned premiums | 89,761 | 61,491 | |
Ceded incurred losses and loss adjustment expenses | 6,500 | $ 4,300 | |
Reinsurance recoverables on paid losses | 2,300 | $ 2,800 | |
Reinsurance recoverables on unpaid losses | $ 69,100 | $ 69,800 |
Credit Agreement (Details)
Credit Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Current Borrowing Capacity | $ 50,000 | |
Credit Facility Accordion Feature | $ 30,000 | |
Maturity Date | May 28, 2024 | |
Interest Rate Description | Eurodollar loans bear an interest rate per annum equal to adjusted LIBOR for the applicable interest period plus a margin of 1.75%. ABR loans bear an interest rate per annum equal to (a) the higher of the prime rate, the New York Federal Reserve Board Rate plus 0.50% or the one-month adjusted LIBOR plus 1%, plus (b) the applicable margin of 0.75%. | |
Credit Facility | $ 24,075 | $ 16,744 |
Debt Issuance Costs, Net | $ 500 | |
Weighted Average Interest Rate | 3.01% |
Other Comprehensive (Loss) In_3
Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Unrealized (losses) gains arising during the period, before income taxes | $ (10,911) | $ 8,873 |
Income taxes | 2,291 | (1,863) |
Unrealized (losses) gains arising during the period, net of income tax | (8,620) | 7,010 |
Less reclassification adjustment [Abstract] | ||
Net realized investment gains on fixed-maturity securities, before income taxes | 764 | 292 |
Income taxes | (161) | (62) |
Reclassification adjustment included in net income, net of income taxes | 603 | 230 |
Other comprehensive (loss) income | $ (9,223) | $ 6,780 |