Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Jan. 31, 2015 | Jun. 30, 2014 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | NAVG | ||
Entity Registrant Name | NAVIGATORS GROUP INC | ||
Entity Central Index Key | 793547 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 14,289,970 | ||
Entity Public Float | $723,657,575 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investments and cash: | ||
Fixed maturities, available-for-sale, at fair value (amortized cost: 2014, $2,323,959; 2013, $2,036,999) | $2,365,934 | $2,047,873 |
Equity securities, available-for-sale, at fair value (cost: 2014, $154,843; 2013, $118,804) | 184,295 | 143,954 |
Short-term investments, at fair value (amortized cost: 2014: $179,527; 2013: $296,250) | 179,506 | 296,250 |
Cash | 90,751 | 86,509 |
Total investments and cash | 2,820,486 | 2,574,586 |
Premiums receivable | 342,479 | 325,025 |
Prepaid reinsurance premiums | 237,851 | 247,822 |
Reinsurance recoverable on paid losses | 51,347 | 38,384 |
Reinsurance recoverable on unpaid losses and loss adjustment expenses | 851,498 | 822,438 |
Deferred policy acquisition costs | 79,452 | 67,007 |
Accrued investment income | 14,791 | 13,866 |
Goodwill and other intangible assets | 7,013 | 7,177 |
Current income tax receivable, net | 14,549 | 14,299 |
Deferred income tax, net | 23,806 | |
Receivable for investments sold | 326 | 3 |
Other assets | 44,384 | 35,039 |
Total assets | 4,464,176 | 4,169,452 |
Liabilities: | ||
Reserves for losses and loss adjustment expenses | 2,159,634 | 2,045,071 |
Unearned premiums | 766,167 | 714,606 |
Reinsurance balances payable | 152,774 | 167,252 |
Senior Notes | 263,440 | 263,308 |
Deferred income tax, net | 1,467 | |
Payable for investments purchased | 134 | 7,624 |
Accounts payable and other liabilities | 93,336 | 69,379 |
Total liabilities | 3,436,952 | 3,267,240 |
Stockholders' equity: | ||
Preferred stock, $.10 par value, authorized 1,000,000 shares, none issued | ||
Common stock, $.10 par value, authorized 50,000,000 shares, issued 17,792,846 shares for 2014 and 17,709,876 shares for 2013 | 1,778 | 1,770 |
Additional paid-in capital | 347,022 | 335,546 |
Treasury stock, at cost (3,511,380 shares for 2014 and 2013) | -155,801 | -155,801 |
Retained earnings | 787,666 | 692,337 |
Accumulated other comprehensive income | 46,559 | 28,360 |
Total stockholders' equity | 1,027,224 | 902,212 |
Total liabilities and stockholders' equity | $4,464,176 | $4,169,452 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Fixed maturities, available-for-sale, amortized cost | $2,323,959 | $2,036,999 |
Equity securities, available-for-sale, cost | 154,843 | 118,804 |
Short-term investments, amortized cost | $179,527 | $296,250 |
Preferred stock, par value | $0.10 | $0.10 |
Preferred stock, authorized shares | 1,000,000 | 1,000,000 |
Preferred stock, issued shares | 0 | 0 |
Common stock, par value | $0.10 | $0.10 |
Common stock, authorized shares | 50,000,000 | 50,000,000 |
Common stock, issued shares | 17,792,846 | 17,709,876 |
Treasury stock, shares | 3,511,380 | 3,511,380 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Gross written premiums | $333,299 | $327,469 | $348,795 | $422,790 | $333,091 | $312,076 | $332,128 | $393,222 | $1,432,353 | $1,370,517 | $1,286,465 |
Revenues: | |||||||||||
Net written premiums | 228,007 | 228,417 | 231,864 | 311,850 | 223,445 | 196,556 | 198,469 | 269,452 | 1,000,138 | 887,922 | 833,655 |
Change in unearned premiums | 6,165 | 16,950 | -780 | -86,578 | -3,543 | 17,339 | 7,345 | -67,124 | -64,243 | -45,983 | -51,691 |
Net earned premiums | 234,172 | 245,367 | 231,084 | 225,272 | 219,902 | 213,895 | 205,814 | 202,328 | 935,895 | 841,939 | 781,964 |
Net investment income | 16,071 | 15,839 | 15,648 | 16,610 | 14,254 | 14,094 | 14,246 | 13,657 | 64,168 | 56,251 | 54,248 |
Total other-than-temporary impairment losses | -21 | 158 | -530 | -1,821 | -42 | 137 | -2,393 | -902 | |||
Portion of loss recognized in other comprehensive income (before tax) | 21 | -158 | -137 | 44 | |||||||
Net other-than-temporary impairment losses recognized in earnings | -530 | -1,821 | -42 | -2,393 | -858 | ||||||
Net realized gains (losses) | 788 | 6,718 | 4,473 | 833 | 15,768 | -988 | 3,345 | 4,814 | 12,812 | 22,939 | 41,074 |
Other income (expense) | 586 | 1,336 | -1,665 | 10,399 | -665 | -210 | -915 | 618 | 10,656 | -1,172 | 1,488 |
Total revenues | 251,617 | 269,260 | 249,540 | 253,114 | 248,729 | 224,970 | 222,490 | 221,375 | 1,023,531 | 917,564 | 877,916 |
Expenses: | |||||||||||
Net losses and loss adjustment expenses | 134,658 | 135,284 | 140,220 | 135,067 | 131,385 | 125,086 | 131,148 | 131,342 | 545,229 | 518,961 | 497,433 |
Commission expenses | 33,708 | 33,943 | 32,150 | 25,727 | 30,863 | 27,685 | 28,391 | 26,555 | 125,528 | 113,494 | 121,470 |
Other operating expenses | 51,299 | 50,388 | 47,992 | 47,146 | 43,826 | 39,056 | 40,678 | 40,874 | 196,825 | 164,434 | 159,079 |
Call premium on Senior Notes | 17,895 | 17,895 | |||||||||
Interest expense | 3,854 | 3,388 | 4,319 | 3,852 | 4,351 | 2,053 | 2,052 | 2,051 | 15,413 | 10,507 | 8,198 |
Total expenses | 223,519 | 223,003 | 224,681 | 211,792 | 228,320 | 193,880 | 202,269 | 200,822 | 882,995 | 825,291 | 786,180 |
Income (loss) before income taxes | 28,098 | 46,257 | 24,859 | 41,322 | 20,409 | 31,090 | 20,221 | 20,553 | 140,536 | 92,273 | 91,736 |
Income tax expense (benefit) | 8,823 | 15,032 | 7,998 | 13,354 | 6,076 | 9,804 | 6,284 | 6,643 | 45,207 | 28,807 | 27,974 |
Net income | $19,275 | $31,225 | $16,861 | $27,968 | $14,333 | $21,286 | $13,937 | $13,910 | $95,329 | $63,466 | $63,762 |
Net income per common share: | |||||||||||
Basic | $1.35 | $2.19 | $1.18 | $1.96 | $1.01 | $1.50 | $0.99 | $0.99 | $6.69 | $4.49 | $4.54 |
Diluted | $1.31 | $2.14 | $1.17 | $1.94 | $1 | $1.48 | $0.97 | $0.97 | $6.51 | $4.42 | $4.45 |
Average common shares outstanding: | |||||||||||
Basic | 14,259,768 | 14,133,925 | 14,052,311 | ||||||||
Diluted | 14,646,369 | 14,345,553 | 14,327,820 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net income | $95,329 | $63,466 | $63,762 |
Change in net unrealized gains (losses) on investments: | |||
Unrealized gains (losses) on investments arising during the period, net of deferred tax of $14,925, $17,521 and $13,136 in 2014, 2013 and 2012 respectively | 28,252 | -32,546 | 24,350 |
Reclassification adjustment for net realized (gains) losses included in net income net of deferred tax of $2,776, $6,218 and $10,314 in 2014, 2013 and 2012 respectively | -5,156 | -11,548 | -19,154 |
Change in net unrealized gains (losses on investments) | 23,096 | -44,094 | 5,196 |
Change in other-than-temporary impairments: | |||
Non credit other-than-temporary impairments arising during the period, net of deferred tax of $48, $174 and $612 in 2014, 2013 and 2012 respectively | 89 | 320 | 1,135 |
Reclassification adjustment for non credit other-than-temporary impairment losses recognized in net income net of deferred tax of $0, $0 and $16 in 2014, 2013 and 2012 respectively | -29 | ||
Change in other-than-temporary impairments | 89 | 320 | 1,106 |
Change in foreign currency translation gains (losses), net of deferred tax of $2,800, $1,650, and $521 in 2014, 2013 and 2012 respectively | -4,986 | -3,074 | -1,342 |
Other comprehensive income (loss) | 18,199 | -46,848 | 4,960 |
Comprehensive income (loss) | $113,528 | $16,618 | $68,722 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Unrealized gains (losses) on investments arising during the period, deferred tax | $14,925 | $17,521 | $13,136 |
Reclassification adjustment for net realized (gains) losses included in net income, deferred tax | 2,776 | 6,218 | 10,314 |
Non credit other-than-temporary impairments arising during the period, deferred tax | 48 | 174 | 612 |
Reclassification adjustment for non credit other-than-temporary impairment losses recognized in net income, deferred tax | 0 | 0 | 16 |
Change in foreign currency translation gains (losses), deferred tax | $2,800 | $1,650 | $521 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
In Thousands, except Share data, unless otherwise specified | ||||||
Beginning balance at Dec. 31, 2011 | $803,435 | $1,746 | $322,133 | ($155,801) | $565,109 | $70,248 |
Beginning balance (in shares) at Dec. 31, 2011 | 17,467,615 | 3,511,380 | ||||
Net income | 63,762 | 63,762 | ||||
Changes in comprehensive income: | ||||||
Change in net unrealized gain (loss) on investments | 5,196 | 5,196 | ||||
Change in net non-credit other- than-temporary impairment losses | 1,106 | 1,106 | ||||
Change in foreign currency translation gain (loss) | -1,342 | -1,342 | ||||
Total comprehensive income | 4,960 | 4,960 | ||||
Shares issued under stock plan (in shares) | 90,431 | |||||
Shares issued under stock plan | -52 | 9 | -61 | |||
Share-based compensation | 7,380 | 7,380 | ||||
Ending balance at Dec. 31, 2012 | 879,485 | 1,755 | 329,452 | -155,801 | 628,871 | 75,208 |
Ending balance (in shares) at Dec. 31, 2012 | 17,558,046 | 3,511,380 | ||||
Net income | 63,466 | 63,466 | ||||
Changes in comprehensive income: | ||||||
Change in net unrealized gain (loss) on investments | -44,094 | -44,094 | ||||
Change in net non-credit other- than-temporary impairment losses | 320 | 320 | ||||
Change in foreign currency translation gain (loss) | -3,074 | -3,074 | ||||
Total comprehensive income | -46,848 | -46,848 | ||||
Shares issued under stock plan (in shares) | 151,830 | |||||
Shares issued under stock plan | 2,740 | 15 | 2,725 | |||
Share-based compensation | 3,369 | 3,369 | ||||
Ending balance at Dec. 31, 2013 | 902,212 | 1,770 | 335,546 | -155,801 | 692,337 | 28,360 |
Ending balance (in shares) at Dec. 31, 2013 | 17,709,876 | 3,511,380 | ||||
Net income | 95,329 | 95,329 | ||||
Changes in comprehensive income: | ||||||
Change in net unrealized gain (loss) on investments | 23,096 | 23,096 | ||||
Change in net non-credit other- than-temporary impairment losses | 89 | 89 | ||||
Change in foreign currency translation gain (loss) | -4,986 | -4,986 | ||||
Total comprehensive income | 18,199 | 18,199 | ||||
Shares issued under stock plan (in shares) | 82,970 | |||||
Shares issued under stock plan | -23 | 8 | -31 | |||
Share-based compensation | 11,507 | 11,507 | ||||
Ending balance at Dec. 31, 2014 | $1,027,224 | $1,778 | $347,022 | ($155,801) | $787,666 | $46,559 |
Ending balance (in shares) at Dec. 31, 2014 | 17,792,846 | 3,511,380 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities: | |||
Net income | $95,329 | $63,466 | $63,762 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation & amortization | 4,915 | 4,518 | 5,931 |
Deferred income taxes | 16,881 | 4,658 | -11,414 |
Net realized (gains) losses | -12,812 | -22,939 | -41,074 |
Net other-than-temporary losses recognized in earnings | 2,393 | 858 | |
Call premium on redemption of Senior Notes | 17,895 | ||
Changes in assets and liabilities: | |||
Reinsurance recoverable on paid and unpaid losses and loss adjustment expenses | -42,024 | 68,599 | -40,185 |
Reserves for losses and loss adjustment expenses | 114,563 | -51,977 | 14,369 |
Prepaid reinsurance premiums | 10,344 | -26,807 | -56,853 |
Unearned premiums | 52,380 | 72,199 | 109,778 |
Premiums receivable | -17,455 | -4,843 | -64,457 |
Deferred policy acquisition costs | -12,445 | -6,002 | 2,979 |
Accrued investment income | -925 | -1,279 | 1,905 |
Reinsurance balances payable | -14,716 | 1,439 | 57,114 |
Current income taxes | -582 | -16,432 | 17,523 |
Other | 29,039 | 31,987 | 36,503 |
Net cash provided by (used in) operating activities | 222,492 | 136,875 | 96,739 |
Fixed maturities | |||
Redemptions and maturities | 210,674 | 237,627 | 188,282 |
Sales | 362,136 | 648,335 | 1,319,404 |
Purchases | -864,902 | -899,930 | -1,711,080 |
Equity securities | |||
Sales | 54,900 | 72,113 | 39,503 |
Purchases | -83,845 | -89,288 | -37,587 |
Change in payable for securities | -7,814 | -46,414 | 56,543 |
Net change in short-term investments | 117,740 | -142,214 | -31,568 |
Purchase of property and equipment | -8,359 | -10,088 | -3,336 |
Net cash provided by (used in) investing activities | -219,470 | -229,859 | -179,839 |
Financing activities: | |||
Net Proceeds from Debt Offering | 263,278 | ||
Redemption of 7.0% Senior Notes Due May 1, 2016 | -132,437 | ||
Proceeds of stock issued from employee stock purchase plan | 1,067 | 821 | 672 |
Proceeds of stock issued from exercise of stock options | 153 | 2,495 | 404 |
Net cash provided by (used in) financing activities | 1,220 | 134,157 | 1,076 |
Increase (decrease) in cash | 4,242 | 41,173 | -82,024 |
Cash at beginning of year | 86,509 | 45,336 | 127,360 |
Cash at end of period | 90,751 | 86,509 | 45,336 |
Supplemental cash information: | |||
Income taxes paid, net | 27,066 | 41,094 | 19,602 |
Interest paid | 15,703 | 8,050 | 8,050 |
Issuance of stock to directors | $438 | $400 | $242 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) | 12 Months Ended |
Dec. 31, 2014 | |
Interest rate stated on senior notes | 7.00% |
Senior notes due date | 1-May-16 |
Organization_Summary_of_Signif
Organization & Summary of Significant Accounting Policies | 12 Months Ended | |
Dec. 31, 2014 | ||
Organization & Summary of Significant Accounting Policies | Note 1. | Organization & Summary of Significant Accounting Policies |
Organization | ||
The accompanying Consolidated Financial Statements, consisting of the results of The Navigators Group, Inc., a Delaware holding company established in 1982, and its subsidiaries are prepared on the basis of United States (“U.S.”) generally accepted accounting principles (“GAAP” or “U.S. GAAP”). All significant intercompany transactions and balances have been eliminated. The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported revenues and expenses during the reporting periods. The results of operations for any interim period are not necessarily indicative of results for the full year. The terms “we,” “us,” “our” or “our Company” as used herein are used to mean The Navigators Group, Inc. and its subsidiaries, unless the context otherwise requires. The terms “Parent” or “Parent Company” are used to mean The Navigators Group, Inc. without its subsidiaries. Certain amounts for the prior year have been reclassified to conform to the current year’s presentation. | ||
Our Company is an international insurance company focusing on specialty products within the overall property and casualty insurance market. Our long-standing area of specialization is Marine insurance. We have also developed niches in Professional Liability insurance and Property Casualty lines of insurance, such as Primary and Excess casualty coverages offered to commercial enterprises and Assumed Reinsurance. | ||
We classify its business into one Corporate segment (“Corporate”) and two underwriting segments, the Insurance Companies segment (“Insurance Companies”) and the Lloyd’s Operations segment (“Lloyd’s Operations”) which are separately managed by business line divisions. The Insurance Companies are primarily engaged in underwriting Marine insurance, Primary Casualty insurance with a concentration in contractors’ general liability products, Excess Casualty insurance with a concentration in commercial umbrella products, Assumed Reinsurance, Management Liability insurance and Errors & Omissions (“E&O”) insurance. This segment is comprised of Navigators Insurance Company (“NIC”), which includes a United Kingdom (“UK”) branch (“UK Branch”), and Navigators Specialty Insurance Company (“NSIC”), which underwrites business on an excess and surplus lines basis. All of the business underwritten by NSIC is fully reinsured by NIC pursuant to a 100% quota share reinsurance agreement. | ||
The Lloyd’s Operations are primarily engaged in underwriting Marine insurance; Energy & Engineering insurance with a concentration in offshore energy products and onshore energy construction products, Assumed Reinsurance, Management Liability insurance and E&O insurance at Lloyd’s of London (“Lloyd’s”) through Lloyd’s Syndicate 1221 (“Syndicate 1221”). The Corporate segment consists of the Parent Company’s investment income, interest expense and related income tax. | ||
Our revenue is primarily comprised of premiums and investment income. We derive our premiums predominantly from business written by wholly-owned underwriting management companies, Navigators Management Company (“NMC”) and Navigators Management (UK) Ltd. (“NMUK”) that manage and service insurance and reinsurance business written by the Insurance Companies. Our products are distributed through multiple channels, utilizing global, national and regional retail and wholesale insurance brokers. | ||
Navigators Underwriting Agency Ltd. (“NUAL”) is a Lloyd’s underwriting agency that manages Syndicate 1221. We control 100% of Syndicate 1221’s stamp capacity through our wholly-owned subsidiary, Navigators Corporate Underwriters Ltd. (“NCUL”), which is referred to as a corporate name in the Lloyd’s market. In addition, we have also established underwriting agencies in Antwerp, Belgium; Stockholm, Sweden; and Copenhagen, Denmark, as well as branches of the appointed representative, Navigators Underwriting Ltd. (“NUL”), in the European Economic Area (“EEA”), in Milan, Italy; Rotterdam, The Netherlands; and Paris, France, which underwrite risks pursuant to binding authorities with NUAL into Syndicate 1221. We have also established a presence in Brazil and China through contractual arrangements with local affiliates of Lloyd’s. | ||
For financial information by segment, refer to Note 3, Segment Information, in the Notes to Consolidated Financial Statements, included herein. | ||
Significant Accounting Policies | ||
Cash | ||
Cash includes cash on hand and demand deposits with banks, excluding such amounts held by Syndicate 1221 included as Funds at Lloyd’s. | ||
Investments | ||
As of December 31, 2014 and 2013, all fixed maturity and equity securities held by our Company were carried at fair value and classified as available-for-sale. Available-for-sale securities are debt and equity securities not classified as either held-to-maturity securities or trading securities and are reported at fair value, with unrealized gains and losses excluded from earnings and reported in accumulated other comprehensive income (“AOCI”) as a separate component of stockholders’ equity. Fixed maturity securities include bonds, mortgage-backed and asset-backed securities. Equity securities consist of common stock and preferred stock. | ||
Short-term investments are carried at fair value. Short-term investments mature within one year from the purchase date. | ||
All prices for our fixed maturities, equity securities and short-term investments valued as Level 1, Level 2 or Level 3 in the fair value hierarchy, as defined in the Financial Accounts Standards Board (“FASB”) Accounting Standards Codification 820 (“ASC 820”), Fair Value Measurements, are received from independent pricing services utilized by one of our outside investment managers whom we employ to assist us with investment accounting services. This manager utilizes a pricing committee, which approves the use of one or more independent pricing service vendors. The pricing committee consists of five or more members of the investment management firm, one from senior management and one from the accounting group with the remainder from the asset class specialists and client strategists. The pricing source of each security is determined in accordance with the pricing source procedures approved by the pricing committee. The investment manager uses supporting documentation received from the independent pricing service vendor detailing the inputs, models and processes used in the independent pricing service vendors’ evaluation process to determine the appropriate fair value hierarchy. Any pricing where the input is believed to be unobservable is deemed to be a Level 3 price. Management has reviewed this process by which the manager determines the prices and has obtained alternative pricing to validate a sample of the prices and assess their reasonableness. | ||
Premiums and discounts on fixed maturity securities are amortized into interest income over the life of the security under the interest method. For mortgage-backed and asset-backed securities, anticipated prepayments and expected maturities are utilized in applying the interest rate method. An effective yield is calculated based on projected principal cash flows at the time of original purchase. The effective yield is used to amortize the purchase price of the security over the security’s expected life. Book values are adjusted to reflect the amortization of premium or accretion of discount on a monthly basis. The projected principal cash flows are based on certain prepayment assumptions, which are generated using a prepayment model. The prepayment model uses a number of factors to estimate prepayment activity including the current levels of interest rates (refinancing incentive), time of year (seasonality), economic activity (including housing turnover) and term and age of the underlying collateral (burnout, seasoning). Prepayment assumptions associated with the mortgage-backed and asset-backed securities are reviewed on a periodic basis. When changes in prepayment assumptions are deemed necessary as the result of actual prepayments differing from anticipated prepayments, securities are revalued based upon the new prepayment assumptions utilizing the retrospective adjustment method, whereby the effective yield is recalculated to reflect actual payments to date and anticipated future payments. The investment in such securities is adjusted to the amount that would have existed had the new effective yield been applied since the acquisition of the security. Such adjustments, if any, are included in net investment income for the current period being reported. | ||
Realized gains and losses on sales of investments are recognized when the related trades are executed and are determined on the basis of the specific identification method. | ||
Impairment of Invested Assets | ||
Management regularly reviews our fixed maturity and equity securities portfolios to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of securities. | ||
For fixed maturity securities, we consider our intent to sell a security and whether it is more likely than not that, we will be required to sell a security before the anticipated recovery as part of the process of evaluating whether a security’s unrealized loss represents an other-than-temporary decline. For fixed maturity securities that have a fair value below amortized cost and that we intend to sell or for which it is more likely than not that we would be required to sell, an other than temporary impairment (“OTTI”) loss is recognized in earnings by writing such security down to fair value. For fixed maturity securities we do not intend to sell or for which it is more likely than not our Company would not be required to sell, a decline in value below amortized cost is only recognized to the extent the present value of future cash flows expected to be collected is less than the amortized cost of the security. Such shortfall in the present value of future cash flows is considered the credit loss and is recognized as an OTTI loss in earnings, with the non-credit portion of the impairment (i.e. the difference between the present value of future cash flows and fair value of the security) recognized as OTTI losses in other comprehensive income (“OCI”). | ||
In evaluating OTTI of equity securities, we consider our intent to hold the securities as part of the process of evaluating whether a decline in fair value below cost represents an other than temporary decline in value. For equity securities in an unrealized loss position that we do not intent to hold or that we do not expect to recover their value within a reasonable period of time, a net OTTI loss is recognized in earnings by writing such security down to the fair value. | ||
Syndicate 1221 | ||
Syndicate 1221 reports the amount of premiums, claims, and expenses recorded in an underwriting account for a particular year over a three year period. Traditionally, three years have been necessary to report substantially all premiums associated with an underwriting year and to report most of the related claims, although claims may remain unsettled after the underwriting year is closed. Syndicate 1221 typically closes an underwriting year by reinsuring outstanding claims in that underwriting year with the next underwriting year. Only profits from closed underwriting years of account are distributed to NCUL. Profits from open underwriting years of account are not available and therefore not distributed to NCUL until the end of the three year period. | ||
Our Company’s financial statements include all of the assets, liabilities, revenues and expenses of Syndicate1221. Adjustments are recorded to recognize underwriting results as incurred in the specific year and not over a three year period. Syndicate 1221 is not a separate legal entity. Refer to Note 10, Lloyd’s Syndicate 1221, for additional information. | ||
Foreign Currency Remeasurement and Translation | ||
The functional currency in each of our operations is generally the currency of the local operating environment, except for our Lloyd’s Operations which is the U.S. dollar. Transactions in currencies other than an operation’s functional currency are remeasured into the functional currency and the resulting foreign exchange gains and losses are reflected in net Other Income (Expense) in the Consolidated Statements of Income. Functional currency assets and liabilities are translated into U.S. dollars using period end rates of exchange and the related translation adjustments are recorded as a separate component of AOCI. Statement of income amounts expressed in functional currencies are translated using average exchange rates. | ||
During the first quarter, Syndicate 1221 revised its foreign exchange accounting methodology from reporting its financial position and results using three functional currencies (GBP, USD and CAD) to one functional currency (USD). The USD was chosen as the single functional currency as the majority of the Syndicate’s insurance business has been and continues to be transacted in USD. This cumulative change in re-measurement has resulted in an immaterial correction of $10.0 million ($6.6 million, after-tax) reducing Accumulated Other Comprehensive Income in the consolidated balance sheet, offset by a gain in Other Income in the consolidated statement of income. The impact of the correction is not material to the previously issued annual financial statements for 2013 and 2012. | ||
Premium Revenues | ||
Written premium is recorded based on the insurance policies that have been reported to us and the policies that have been written by agents but not yet reported to us. We estimate the amount of written premium not yet reported based on judgments relative to current and historical trends of the business being written. Such estimates are regularly reviewed and updated and any resulting adjustments are included in the current year’s results. An unearned premium reserve is established to reflect the unexpired portion of each policy at the financial reporting date. | ||
Substantially all of our business is placed through agents and brokers. We record estimates for both unreported direct and assumed premiums. We also record the ceded portion of the estimated gross written premium and related acquisition costs. The earned gross, ceded and net premiums are calculated based on our earning methodology, which is generally pro-rata over the policy period or over the period of risk if the period of risk differs significantly from the contract period. | ||
A portion of our premium is estimated for unreported premium, mostly for the Marine business written by our U.K. Branch and Lloyd’s Operations as well as the Accident & Health (“A&H”) and Latin American & Caribbean Property Casualty and Surety Reinsurance business written by NavRe. Such premium estimates are generally based on submission data received from brokers and agents and recorded when the insurance policy or reinsurance contract is written or bound. The estimates are regularly reviewed and updated taking into account the premium received to date versus the estimate and the age of the estimate. To the extent that the actual premium varies from the estimates, the difference, along with the related loss reserves and underwriting expenses, is recorded in current operations. | ||
Reinsurance Ceded | ||
In the normal course of business, reinsurance is purchased by us from insurers or reinsurers to reduce the amount of loss arising from claims. In order to determine the proper accounting for the reinsurance, management analyzes the reinsurance agreements to determine whether the reinsurance should be classified as prospective or retroactive based upon the terms of the reinsurance agreement and whether the reinsurer has assumed significant insurance risk to the extent that the reinsurer may realize a significant loss from the transaction. | ||
Prospective reinsurance is reinsurance in which an assuming company agrees to reimburse the ceding company for losses that may be incurred as a result of future insurable events covered under contracts subject to the reinsurance. Retroactive reinsurance is reinsurance in which an assuming company agrees to reimburse a ceding company for liabilities incurred as a result of past insurable events covered under contracts subject to the reinsurance. | ||
Ceded reinsurance premiums and any related ceding commission and ceded losses are reflected as reductions of the respective income or expense accounts over the terms of the reinsurance contracts. Prepaid reinsurance premiums represent the portion of premiums ceded to reinsurers applicable to the unexpired terms of the reinsurance contracts in force. Reinsurance reinstatement premiums are recognized in the same period as the loss event that gave rise to the reinstatement premiums. Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policy. Unearned premiums ceded and estimates of amounts recoverable from reinsurers on paid and unpaid losses are reflected as assets. Provisions are made for estimated unrecoverable reinsurance. | ||
Deferred Policy Acquisition Costs | ||
Costs of acquiring business are deferred and amortized ratably over the period that the related premiums are recognized as revenue. Such costs (e.g., commission expense, other underwriting expenses and premium taxes) are limited to the incremental direct costs related to the successful acquisition of new or renewal business. The method of computing deferred policy acquisition costs limits the deferral to their estimated net realizable value based on the related unearned premiums and takes into account anticipated losses and loss adjustment expenses, commission expense and operating expenses based on historical and current experience as well as anticipated investment income. | ||
Reserves for Losses and Loss Adjustment Expenses | ||
Unpaid losses and loss adjustment expenses are determined on an individual basis for claims reported on direct business for insureds, from reports received from ceding insurers for insurance assumed from such insurers and on estimates based on Company and industry experience for incurred but not reported (“IBNR”) claims and loss adjustment expenses. Indicated IBNR loss reserves are calculated by our actuaries using several standard actuarial methodologies, including the paid and incurred loss development and the paid and incurred Bornheutter-Ferguson loss methods. Additional analyses, such as frequency/severity analyses, are performed for certain books of business. The provision for unpaid losses and loss adjustment expenses has been established to cover the estimated unpaid cost of claims incurred. Such estimates are regularly reviewed and updated and any resulting adjustments are included in the current year’s results. Management believes that the liability it has recognized for unpaid losses and loss adjustment expenses is a reasonable estimate of the ultimate unpaid claims incurred, however, such provisions are necessarily based on estimates and, accordingly, no representation is made that the ultimate liability will not differ materially from the amounts recorded in the accompanying consolidated financial statements. Losses and loss adjustment expenses are recorded on an undiscounted basis. | ||
Earnings per Share | ||
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the basic earnings per share adjusted for the potential dilution that would occur if all issued stock options were exercised and all stock grants were fully vested. | ||
Depreciation and Amortization | ||
Depreciation of furniture and fixtures, electronic data processing equipment and computer software is provided over the estimated useful lives of the respective assets, ranging from three to seven years, using the straight-line method. Amortization of leasehold improvements is provided over the shorter of the useful lives of those improvements or the contractual terms of the leases using the straight-line method. | ||
Goodwill and Other Intangible Assets | ||
Goodwill represents the excess-of-cost of acquiring a business enterprise over the fair value of the net assets acquired. Our Company has also recorded indefinite lived intangible assets related to the acquisition of the remaining non-controlled stamp capacity of Lloyd’s Syndicate 1221. Goodwill and indefinite lived intangible assets are reported at carrying value and are tested for impairment at least annually, and when permitted by the applicable accounting guidance, qualitative factors are assessed to determine whether it is necessary to calculate an asset’s fair value when testing an asset with an indefinite life for impairment. Goodwill and indefinite lived intangible assets are considered impaired if the estimated fair value is less than its carrying value and any impairment loss is measured as the difference between the implied fair value and the carrying value. This Company did not recognize an impairment on goodwill or the indefinite lived intangible assets for any of the years ended December 31, 2014, 2013 and 2012. | ||
As of December 31, 2014, the carrying value of goodwill and indefinite lived intangible assets was $7.0 million, consisting of $2.5 million and $2.4 million of goodwill assigned to NMC and our Lloyd’s Operations, respectively, and $2.1 million of indefinite lived intangible assets assigned to our Lloyd’s Operations. As of December 31, 2013, the carrying value of goodwill and indefinite lived intangible assets was $7.2 million, consisting of $2.5 million and $2.4 million of goodwill assigned to NMC and our Lloyd’s Operations, respectively, and $2.3 million of indefinite lived intangible assets assigned to our Lloyd’s Operations. Changes in the carrying value of the goodwill and indefinite lived intangible assets are due to fluctuations in currency exchange rates between the U.S. dollar and the British pound. | ||
Income Taxes | ||
We apply the asset and liability method of accounting for income taxes whereby deferred assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that, the deferred tax assets will be realized. These reviews include, among other factors, the nature and amount of the taxable income and expense items, the expected timing of when assets will be used or liabilities will be required to be reported, as well as the reliability of historical profitability of businesses expected to provide future earnings. After review, if management determines that the realization of the tax asset does not meet the more likely than not criterion an offsetting valuation allowance is recorded, which reduces net earnings and the deferred tax asset in that period. Additional information regarding our deferred tax assets can be found in Note 7, Income Taxes, in the Notes to Consolidated Financial Statements, included herein. | ||
Use of Estimates | ||
The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The accounting estimates that are viewed by management as critical are those in connection with reserves for losses and loss adjustment expenses, reinsurance recoverables, written and unearned premiums, the recoverability of deferred tax assets, and impairment of invested assets. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share | Note 2. | Earnings Per Share | |||||||||||
The following is a reconciliation of the basic and diluted EPS computations for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||
Year Ended December 31, | |||||||||||||
In thousands, except share and per share amounts | 2014 | 2013 | 2012 | ||||||||||
Net income | $ | 95,329 | $ | 63,466 | $ | 63,762 | |||||||
Basic weighted average shares | 14,259,768 | 14,133,925 | 14,052,311 | ||||||||||
Effect of common stock equivalents: | |||||||||||||
Assumed exercise of stock options and vesting of stock grants | 386,601 | 211,628 | 275,509 | ||||||||||
Diluted weighted average shares | 14,646,369 | 14,345,553 | 14,327,820 | ||||||||||
Net income per common share: | |||||||||||||
Basic | $ | 6.69 | $ | 4.49 | $ | 4.54 | |||||||
Diluted | $ | 6.51 | $ | 4.42 | $ | 4.45 | |||||||
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Segment Information | Note 3. | Segment Information | |||||||||||||||
We classify our business into one corporate segment and two underwriting segments, Insurance Companies and Lloyd’s Operations. Management takes into consideration a wide range of factors in planning the business strategy of the Company and evaluating the results of its operations. The performance of each underwriting segment is based on their underwriting and GAAP results. Underwriting results are measured based on underwriting profit or loss and the related combined ratio, which are both non-GAAP measures of underwriting profitability. Underwriting profit or loss is calculated from net earned premiums, less the sum of net losses and LAE, commission expenses, other operating expenses and other income or expense. The combined ratio is derived by dividing the sum of net losses and LAE, commission expenses, other operating expenses and other underwriting (expense) by net earned premiums. A combined ratio of less than 100% indicates an underwriting profit and greater than 100% indicates an underwriting loss. Each segment maintains its own investments on which it earns income and realizes capital gains or losses. Each segment’s underwriting performance is evaluated separately from the performance of its investment portfolio. The Corporate segment’s results consist of the Parent Company’s investment income, interest expense and related income taxes. | |||||||||||||||||
Access to capital also has a significant impact on management’s outlook for the operations. The Insurance Companies’ operations and ability to grow their business and take advantage of market opportunities are constrained by regulatory capital requirements and rating agency assessments of capital adequacy. Similarly, the ability to grow the Lloyd’s Operations is subject to capital and operating requirements of the Lloyd’s and UK regulatory authorities. | |||||||||||||||||
The accounting policies used to prepare the segment reporting data for the Company’s segments are the same as those described in the Summary of Significant Accounting Policies in Footnote 1. | |||||||||||||||||
Financial data by segment for the years ended December 31, 2014, 2013, and 2012 were as follows: | |||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
In thousands | Insurance | Lloyd’s | Corporate(1) | Total | |||||||||||||
Companies | Operations | ||||||||||||||||
Gross written premiums | $ | 1,045,454 | $ | 386,899 | $ | — | $ | 1,432,353 | |||||||||
Net written premiums | 752,773 | 247,365 | — | 1,000,138 | |||||||||||||
Net earned premiums | 704,574 | 231,321 | — | 935,895 | |||||||||||||
Net losses and loss adjustment expenses | (434,396 | ) | (110,833 | ) | — | (545,229 | ) | ||||||||||
Commission expenses | (85,137 | ) | (42,558 | ) | 2,167 | (125,528 | ) | ||||||||||
Other operating expenses | (138,675 | ) | (58,150 | ) | — | (196,825 | ) | ||||||||||
Other underwriting income (expense) | 2,727 | 35 | (2,167 | ) | 595 | ||||||||||||
Underwriting profit (loss) | $ | 49,093 | $ | 19,815 | $ | — | $ | 68,908 | |||||||||
Net investment income | 56,714 | 7,378 | 76 | 64,168 | |||||||||||||
Net realized gains (losses) | 12,715 | 97 | — | 12,812 | |||||||||||||
Call premium on Senior Notes | — | — | — | — | |||||||||||||
Interest expense | — | — | (15,413 | ) | (15,413 | ) | |||||||||||
Other income (expense) | (2,182 | ) | 12,243 | — | 10,061 | ||||||||||||
Income (loss) before income taxes | $ | 116,340 | $ | 39,533 | $ | (15,337 | ) | $ | 140,536 | ||||||||
Income tax expense (benefit) | 36,609 | 13,885 | (5,287 | ) | 45,207 | ||||||||||||
Net income (loss) | $ | 79,731 | $ | 25,648 | $ | (10,050 | ) | $ | 95,329 | ||||||||
Identifiable assets | $ | 3,344,084 | $ | 957,795 | $ | 162,297 | $ | 4,464,176 | |||||||||
Losses and loss adjustment expenses ratio | 61.7 | % | 47.9 | % | 58.3 | % | |||||||||||
Commission expense ratio | 12.1 | % | 18.4 | % | 13.4 | % | |||||||||||
Other operating expense ratio (2) | 19.2 | % | 25.1 | % | 20.9 | % | |||||||||||
Combined ratio | 93 | % | 91.4 | % | 92.6 | % | |||||||||||
(1) - Includes Corporate segment intercompany eliminations. | |||||||||||||||||
(2) - Includes Other operating expenses and Other underwriting income (expenses). | |||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
In thousands | Insurance | Lloyd’s | Corporate(1) | Total | |||||||||||||
Companies | Operations | ||||||||||||||||
Gross written premiums | $ | 1,002,275 | $ | 368,242 | $ | — | $ | 1,370,517 | |||||||||
Net written premiums | 680,008 | 207,914 | — | 887,922 | |||||||||||||
Net earned premiums | 639,338 | 202,601 | — | 841,939 | |||||||||||||
Net losses and loss adjustment expenses | (415,413 | ) | (103,548 | ) | — | (518,961 | ) | ||||||||||
Commission expenses | (81,132 | ) | (34,710 | ) | 2,348 | (113,494 | ) | ||||||||||
Other operating expenses | (119,920 | ) | (44,514 | ) | — | (164,434 | ) | ||||||||||
Other income (expense) | 2,764 | (1,588 | ) | (2,348 | ) | (1,172 | ) | ||||||||||
Underwriting profit (loss) | $ | 25,637 | $ | 18,241 | $ | — | $ | 43,878 | |||||||||
Net investment income | 49,083 | 7,160 | 8 | 56,251 | |||||||||||||
Net realized gains (losses) | 20,600 | (58 | ) | 4 | 20,546 | ||||||||||||
Call premium on Senior Notes | — | — | (17,895 | ) | (17,895 | ) | |||||||||||
Interest expense | — | — | (10,507 | ) | (10,507 | ) | |||||||||||
Income (loss) before income taxes | $ | 95,320 | $ | 25,343 | $ | (28,390 | ) | $ | 92,273 | ||||||||
Income tax expense (benefit) | 29,965 | 8,728 | (9,886 | ) | 28,807 | ||||||||||||
Net income (loss) | $ | 65,355 | $ | 16,615 | $ | (18,504 | ) | $ | 63,466 | ||||||||
Identifiable assets | $ | 3,077,437 | $ | 930,567 | $ | 161,448 | $ | 4,169,452 | |||||||||
Losses and loss adjustment expenses ratio | 65 | % | 51.1 | % | 61.6 | % | |||||||||||
Commission expense ratio | 12.7 | % | 17.1 | % | 13.5 | % | |||||||||||
Other operating expense ratio (2) | 18.3 | % | 22.8 | % | 19.7 | % | |||||||||||
Combined ratio | 96 | % | 91 | % | 94.8 | % | |||||||||||
(1) - Includes Corporate segment intercompany eliminations. | |||||||||||||||||
(2) - Includes Other operating expenses and Other income. | |||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
In thousands | Insurance | Lloyd’s | Corporate(1) | Total | |||||||||||||
Companies | Operations | ||||||||||||||||
Gross written premiums | $ | 921,325 | $ | 365,140 | $ | — | $ | 1,286,465 | |||||||||
Net written premiums | 622,956 | 210,699 | — | 833,655 | |||||||||||||
Net earned premiums | 571,439 | 210,525 | — | 781,964 | |||||||||||||
Net losses and loss adjustment expenses | (417,082 | ) | (80,351 | ) | — | (497,433 | ) | ||||||||||
Commission expenses | (81,370 | ) | (42,449 | ) | 2,349 | (121,470 | ) | ||||||||||
Other operating expenses | (113,625 | ) | (45,454 | ) | — | (159,079 | ) | ||||||||||
Other income (expense) | 3,790 | 47 | (2,349 | ) | 1,488 | ||||||||||||
Underwriting profit (loss) | $ | (36,848 | ) | $ | 42,318 | $ | — | $ | 5,470 | ||||||||
Net investment income | 46,549 | 7,551 | 148 | 54,248 | |||||||||||||
Net realized gains (losses) | 36,468 | 3,555 | 193 | 40,216 | |||||||||||||
Interest expense | — | — | (8,198 | ) | (8,198 | ) | |||||||||||
Income (loss) before income taxes | $ | 46,169 | $ | 53,424 | $ | (7,857 | ) | $ | 91,736 | ||||||||
Income tax expense (benefit) | 12,686 | 18,620 | (3,332 | ) | 27,974 | ||||||||||||
Net income (loss) | $ | 33,483 | $ | 34,804 | $ | (4,525 | ) | $ | 63,762 | ||||||||
Identifiable assets | $ | 3,036,489 | $ | 928,448 | $ | 42,733 | $ | 4,007,670 | |||||||||
Losses and loss adjustment expenses ratio | 73 | % | 38.2 | % | 63.6 | % | |||||||||||
Commission expense ratio | 14.2 | % | 20.2 | % | 15.5 | % | |||||||||||
Other operating expense ratio (2) | 19.2 | % | 21.5 | % | 20.2 | % | |||||||||||
Combined ratio | 106.4 | % | 79.9 | % | 99.3 | % | |||||||||||
(1) - Includes Corporate segment intercompany eliminations. | |||||||||||||||||
(2) - Includes Other operating expenses and Other income. | |||||||||||||||||
The following tables provide additional financial data by segment for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
In thousands | Insurance | Lloyd’s | Total | ||||||||||||||
Companies | Operations | ||||||||||||||||
Gross written premiums: | |||||||||||||||||
Marine | $ | 177,363 | $ | 188,107 | $ | 365,470 | |||||||||||
Property casualty | 755,059 | 126,016 | 881,075 | ||||||||||||||
Professional liability | 113,032 | 72,776 | 185,808 | ||||||||||||||
Total | $ | 1,045,454 | $ | 386,899 | $ | 1,432,353 | |||||||||||
Net written premiums: | |||||||||||||||||
Marine | $ | 123,617 | $ | 144,327 | $ | 267,944 | |||||||||||
Property casualty | 554,844 | 55,917 | 610,761 | ||||||||||||||
Professional liability | 74,312 | 47,121 | 121,433 | ||||||||||||||
Total | $ | 752,773 | $ | 247,365 | $ | 1,000,138 | |||||||||||
Net earned premiums: | |||||||||||||||||
Marine | $ | 123,203 | $ | 141,471 | $ | 264,674 | |||||||||||
Property casualty | 496,209 | 51,338 | 547,547 | ||||||||||||||
Professional liability | 85,162 | 38,512 | 123,674 | ||||||||||||||
Total | $ | 704,574 | $ | 231,321 | $ | 935,895 | |||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
In thousands | Insurance | Lloyd’s | Total | ||||||||||||||
Companies | Operations | ||||||||||||||||
Gross written premiums: | |||||||||||||||||
Marine | $ | 171,822 | $ | 181,046 | $ | 352,868 | |||||||||||
Property casualty | 700,087 | 129,522 | 829,609 | ||||||||||||||
Professional liability | 130,366 | 57,674 | 188,040 | ||||||||||||||
Total | $ | 1,002,275 | $ | 368,242 | $ | 1,370,517 | |||||||||||
Net written premiums: | |||||||||||||||||
Marine | $ | 119,837 | $ | 134,627 | $ | 254,464 | |||||||||||
Property casualty | 462,942 | 42,334 | 505,276 | ||||||||||||||
Professional liability | 97,229 | 30,953 | 128,182 | ||||||||||||||
Total | $ | 680,008 | $ | 207,914 | $ | 887,922 | |||||||||||
Net earned premiums: | |||||||||||||||||
Marine | $ | 129,276 | $ | 138,690 | $ | 267,966 | |||||||||||
Property casualty | 409,480 | 37,722 | 447,202 | ||||||||||||||
Professional liability | 100,582 | 26,189 | 126,771 | ||||||||||||||
Total | $ | 639,338 | $ | 202,601 | $ | 841,939 | |||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
In thousands | Insurance | Lloyd’s | Total | ||||||||||||||
Companies | Operations | ||||||||||||||||
Gross written premiums: | |||||||||||||||||
Marine | $ | 200,095 | $ | 194,423 | $ | 394,518 | |||||||||||
Property casualty | 590,741 | 127,028 | 717,769 | ||||||||||||||
Professional liability | 130,489 | 43,689 | 174,178 | ||||||||||||||
Total | $ | 921,325 | $ | 365,140 | $ | 1,286,465 | |||||||||||
Net written premiums: | |||||||||||||||||
Marine | $ | 133,210 | $ | 143,600 | $ | 276,810 | |||||||||||
Property casualty | 390,168 | 43,824 | 433,992 | ||||||||||||||
Professional liability | 99,578 | 23,275 | 122,853 | ||||||||||||||
Total | $ | 622,956 | $ | 210,699 | $ | 833,655 | |||||||||||
Net earned premiums: | |||||||||||||||||
Marine | $ | 142,181 | $ | 136,898 | $ | 279,079 | |||||||||||
Property casualty | 332,782 | 52,951 | 385,733 | ||||||||||||||
Professional liability | 96,476 | 20,676 | 117,152 | ||||||||||||||
Total | $ | 571,439 | $ | 210,525 | $ | 781,964 | |||||||||||
The Insurance Companies net earned premiums include $37.7 million, $44.6 million and $63.9 million of net earned premiums from the U.K. Branch for 2014, 2013 and 2012, respectively. |
Investments
Investments | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||||||
Investments | Note 4. | Investments | |||||||||||||||||||||||||||||||||||
The following tables set forth our Company’s cash and investments as of December 31, 2014 and 2013. The tables below include OTTI securities recognized within AOCI. | |||||||||||||||||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||||||||||||||
In thousands | Fair Value | Gross | Gross | Amortized | |||||||||||||||||||||||||||||||||
Unrealized | Unrealized | Cost | |||||||||||||||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||||||||||||
U.S. Treasury bonds, agency bonds and foreign government bonds | $ | 397,923 | $ | 3,431 | $ | (5,965 | ) | $ | 400,457 | ||||||||||||||||||||||||||||
States, municipalities and political subdivisions | 541,007 | 19,204 | (558 | ) | 522,361 | ||||||||||||||||||||||||||||||||
Mortgage-backed and asset-backed securities: | |||||||||||||||||||||||||||||||||||||
Agency mortgage-backed securities | 364,622 | 8,476 | (998 | ) | 357,144 | ||||||||||||||||||||||||||||||||
Residential mortgage obligations | 34,087 | 1,153 | (138 | ) | 33,072 | ||||||||||||||||||||||||||||||||
Asset-backed securities | 206,413 | 380 | (964 | ) | 206,997 | ||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 206,318 | 6,630 | (98 | ) | 199,786 | ||||||||||||||||||||||||||||||||
Subtotal | $ | 811,440 | $ | 16,639 | $ | (2,198 | ) | $ | 796,999 | ||||||||||||||||||||||||||||
Corporate bonds | 615,564 | 13,048 | (1,626 | ) | 604,142 | ||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 2,365,934 | $ | 52,322 | $ | (10,347 | ) | $ | 2,323,959 | ||||||||||||||||||||||||||||
Equity securities - common stocks | 127,183 | 28,520 | (1,254 | ) | 99,917 | ||||||||||||||||||||||||||||||||
Equity securities - preferred stocks | 57,112 | 2,236 | (50 | ) | 54,926 | ||||||||||||||||||||||||||||||||
Short-term investments | 179,506 | — | (21 | ) | 179,527 | ||||||||||||||||||||||||||||||||
Cash | 90,751 | — | — | 90,751 | |||||||||||||||||||||||||||||||||
Total | $ | 2,820,486 | $ | 83,078 | $ | (11,672 | ) | $ | 2,749,080 | ||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
In thousands | Fair Value | Gross | Gross | Amortized | |||||||||||||||||||||||||||||||||
Unrealized | Unrealized | Cost | |||||||||||||||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||||||||||||
U.S. Treasury bonds, agency bonds and foreign government bonds | $ | 441,685 | $ | 2,854 | $ | (8,855 | ) | $ | 447,686 | ||||||||||||||||||||||||||||
States, municipalities and political subdivisions | 460,422 | 9,298 | (13,651 | ) | 464,775 | ||||||||||||||||||||||||||||||||
Mortgage-backed and asset-backed securities: | |||||||||||||||||||||||||||||||||||||
Agency mortgage-backed securities | 301,274 | 6,779 | (6,016 | ) | 300,511 | ||||||||||||||||||||||||||||||||
Residential mortgage obligations | 41,755 | 1,212 | (161 | ) | 40,704 | ||||||||||||||||||||||||||||||||
Asset-backed securities | 125,133 | 653 | (480 | ) | 124,960 | ||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 172,750 | 7,656 | (374 | ) | 165,468 | ||||||||||||||||||||||||||||||||
Subtotal | $ | 640,912 | $ | 16,300 | $ | (7,031 | ) | $ | 631,643 | ||||||||||||||||||||||||||||
Corporate bonds | 504,854 | 15,402 | (3,443 | ) | 492,895 | ||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 2,047,873 | $ | 43,854 | $ | (32,980 | ) | $ | 2,036,999 | ||||||||||||||||||||||||||||
Equity securities - common stocks | 143,954 | 25,700 | (550 | ) | 118,804 | ||||||||||||||||||||||||||||||||
Short-term investments | 296,250 | — | — | 296,250 | |||||||||||||||||||||||||||||||||
Cash | 86,509 | — | — | 86,509 | |||||||||||||||||||||||||||||||||
Total | $ | 2,574,586 | $ | 69,554 | $ | (33,530 | ) | $ | 2,538,562 | ||||||||||||||||||||||||||||
As of December 31, 2014 and 2013, fixed maturities for which non-credit OTTI was previously recognized and included in accumulated other comprehensive income are now in an unrealized gains position of $0.7 million and $0.5 million, respectively. | |||||||||||||||||||||||||||||||||||||
The fair value of our Company’s investment portfolio may fluctuate significantly in response to various factors such as changes in interest rates, investment quality ratings, equity prices, foreign exchange rates and credit spreads. Our Company does not have the intent to sell nor is it more likely than not that it will have to sell fixed maturities in unrealized loss positions that are not other-than-temporarily impaired before recovery. For structured securities, default probability and severity assumptions differ based on property type, vintage and the stress of the collateral. Our Company does not intend to sell any of these securities and it is more likely than not that, our Company will not be required to sell these securities before the recovery of the amortized cost basis. For equity securities, our Company also considers its intent to hold securities as part of the process of evaluating whether a decline in fair value represents an other-than-temporary decline in value. Our Company may realize investment losses to the extent its liquidity needs require the disposition of fixed maturity securities in unfavorable interest rate, liquidity or credit spread environments. Significant changes in the factors our Company considers when evaluating investments for impairment losses could result in a significant change in impairment losses reported in the consolidated financial statements. | |||||||||||||||||||||||||||||||||||||
The contractual maturity dates for fixed maturities categorized by the number of years until maturity as of December 31, 2014 are shown in the following table: | |||||||||||||||||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||||||||||||||
In thousands | Fair Value | Amortized | |||||||||||||||||||||||||||||||||||
Cost | |||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | 63,670 | $ | 65,643 | |||||||||||||||||||||||||||||||||
Due after one year through five years | 765,084 | 758,064 | |||||||||||||||||||||||||||||||||||
Due after five years through ten years | 356,929 | 348,195 | |||||||||||||||||||||||||||||||||||
Due after ten years | 368,811 | 355,058 | |||||||||||||||||||||||||||||||||||
Mortgage- and asset-backed securities | 811,440 | 796,999 | |||||||||||||||||||||||||||||||||||
Total | $ | 2,365,934 | $ | 2,323,959 | |||||||||||||||||||||||||||||||||
Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Due to the periodic repayment of principal, the mortgage-backed and asset-backed securities are estimated to have an effective maturity of approximately 4.4 years. | |||||||||||||||||||||||||||||||||||||
The following table shows the amount and percentage of our Company’s fixed maturities as of December 31, 2014 by Standard & Poor’s (“S&P”) credit rating or, if an S&P rating is not available, the equivalent Moody’s Investor Services (“Moody’s”) rating. The table includes fixed maturities at fair value, and the total rating is the weighted average quality rating. | |||||||||||||||||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||||||||||||||
In thousands | Rating | Fair Value | Percent | ||||||||||||||||||||||||||||||||||
of Total | |||||||||||||||||||||||||||||||||||||
Rating description: | |||||||||||||||||||||||||||||||||||||
Extremely strong | AAA | $ | 462,603 | 20 | % | ||||||||||||||||||||||||||||||||
Very strong | AA | 1,090,505 | 45 | % | |||||||||||||||||||||||||||||||||
Strong | A | 612,131 | 26 | % | |||||||||||||||||||||||||||||||||
Adequate | BBB | 185,372 | 8 | % | |||||||||||||||||||||||||||||||||
Speculative | BB & Below | 14,852 | 1 | % | |||||||||||||||||||||||||||||||||
Not rated | NR | 471 | 0 | % | |||||||||||||||||||||||||||||||||
Total | AA | $ | 2,365,934 | 100 | % | ||||||||||||||||||||||||||||||||
The following table summarizes all securities in a gross unrealized loss position as of December 31, 2014 and 2013, showing the aggregate fair value and gross unrealized loss by the length of time those securities had continuously been in a gross unrealized loss position as well as the relevant number of securities. | |||||||||||||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||||||
In thousands, except # of securities | Number of | Fair Value | Gross | Number of | Fair Value | Gross | |||||||||||||||||||||||||||||||
Securities | Unrealized | Securities | Unrealized | ||||||||||||||||||||||||||||||||||
Loss | Loss | ||||||||||||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||||||||||||
U.S. Treasury bonds, agency bonds, and foreign government bonds | |||||||||||||||||||||||||||||||||||||
0-6 months | 19 | $ | 87,915 | $ | 1,061 | 27 | $ | 136,360 | $ | 1,096 | |||||||||||||||||||||||||||
7-12 months | — | — | — | 26 | 149,370 | 7,759 | |||||||||||||||||||||||||||||||
> 12 months | 31 | 117,683 | 4,904 | — | — | — | |||||||||||||||||||||||||||||||
Subtotal | 50 | $ | 205,598 | $ | 5,965 | 53 | $ | 285,730 | $ | 8,855 | |||||||||||||||||||||||||||
States, municipalities and political subdivisions | |||||||||||||||||||||||||||||||||||||
0-6 months | 13 | $ | 14,242 | $ | 41 | 28 | $ | 40,132 | $ | 297 | |||||||||||||||||||||||||||
7-12 months | 2 | 2,107 | 19 | 104 | 205,152 | 12,100 | |||||||||||||||||||||||||||||||
> 12 months | 17 | 37,340 | 498 | 6 | 12,357 | 1,254 | |||||||||||||||||||||||||||||||
Subtotal | 32 | $ | 53,689 | $ | 558 | 138 | $ | 257,641 | $ | 13,651 | |||||||||||||||||||||||||||
Agency mortgage-backed securities | |||||||||||||||||||||||||||||||||||||
0-6 months | 4 | $ | 14,743 | $ | 52 | 39 | $ | 39,458 | $ | 434 | |||||||||||||||||||||||||||
7-12 months | 2 | 4,138 | 28 | 64 | 77,860 | 3,768 | |||||||||||||||||||||||||||||||
> 12 months | 46 | 58,301 | 918 | 9 | 22,784 | 1,814 | |||||||||||||||||||||||||||||||
Subtotal | 52 | $ | 77,182 | $ | 998 | 112 | $ | 140,102 | $ | 6,016 | |||||||||||||||||||||||||||
Residential mortgage obligations | |||||||||||||||||||||||||||||||||||||
0-6 months | 6 | $ | 4,966 | $ | 43 | 3 | $ | 431 | $ | 2 | |||||||||||||||||||||||||||
7-12 months | 2 | 659 | 7 | 7 | 950 | 29 | |||||||||||||||||||||||||||||||
> 12 months | 14 | 1,728 | 88 | 15 | 2,467 | 130 | |||||||||||||||||||||||||||||||
Subtotal | 22 | $ | 7,353 | $ | 138 | 25 | $ | 3,848 | $ | 161 | |||||||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||||||||||||||||
0-6 months | 19 | $ | 96,123 | $ | 354 | 14 | $ | 75,887 | $ | 479 | |||||||||||||||||||||||||||
7-12 months | 3 | 14,152 | 185 | 1 | 203 | 1 | |||||||||||||||||||||||||||||||
> 12 months | 3 | 34,530 | 425 | — | — | — | |||||||||||||||||||||||||||||||
Subtotal | 25 | $ | 144,805 | $ | 964 | 15 | $ | 76,090 | $ | 480 | |||||||||||||||||||||||||||
Commercial mortgage-backed securities | |||||||||||||||||||||||||||||||||||||
0-6 months | 4 | $ | 18,665 | $ | 65 | 4 | $ | 6,712 | $ | 31 | |||||||||||||||||||||||||||
7-12 months | 1 | 1,076 | 6 | 2 | 15,098 | 322 | |||||||||||||||||||||||||||||||
> 12 months | 3 | 1,391 | 27 | 4 | 774 | 21 | |||||||||||||||||||||||||||||||
Subtotal | 8 | $ | 21,132 | $ | 98 | 10 | $ | 22,584 | $ | 374 | |||||||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||||||||||||||||
0-6 months | 52 | $ | 179,390 | $ | 797 | 34 | $ | 93,591 | $ | 717 | |||||||||||||||||||||||||||
7-12 months | 4 | 11,071 | 74 | 18 | 55,021 | 2,726 | |||||||||||||||||||||||||||||||
> 12 months | 14 | 31,126 | 755 | — | — | — | |||||||||||||||||||||||||||||||
Subtotal | 70 | $ | 221,587 | $ | 1,626 | 52 | $ | 148,612 | $ | 3,443 | |||||||||||||||||||||||||||
Total fixed maturities | 259 | $ | 731,346 | $ | 10,347 | 405 | $ | 934,607 | $ | 32,980 | |||||||||||||||||||||||||||
Equity securities - common stocks | |||||||||||||||||||||||||||||||||||||
0-6 months | 6 | $ | 9,152 | $ | 761 | 5 | $ | 7,387 | $ | 422 | |||||||||||||||||||||||||||
7-12 months | 1 | 3,887 | 486 | 2 | 3,538 | 128 | |||||||||||||||||||||||||||||||
> 12 months | 1 | 238 | 7 | — | — | — | |||||||||||||||||||||||||||||||
8 | $ | 13,277 | $ | 1,254 | 7 | $ | 10,925 | $ | 550 | ||||||||||||||||||||||||||||
Equity securities - preferred stocks | |||||||||||||||||||||||||||||||||||||
0-6 months | 7 | $ | 6,651 | $ | 50 | — | $ | — | $ | — | |||||||||||||||||||||||||||
7-12 months | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
> 12 months | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
7 | $ | 6,651 | $ | 50 | — | $ | — | $ | — | ||||||||||||||||||||||||||||
Total equity securities | 15 | $ | 19,928 | $ | 1,304 | 7 | $ | 10,925 | $ | 550 | |||||||||||||||||||||||||||
As of December 31, 2014 and 2013, the largest unrealized loss by a non-government backed issuer in the investment portfolio was $0.5 million and $1.1 million, respectively. | |||||||||||||||||||||||||||||||||||||
Our Company analyzes impaired securities quarterly to determine if any are other-than-temporary. The above securities with unrealized losses have been determined to be temporarily impaired based on our evaluation. | |||||||||||||||||||||||||||||||||||||
For fixed maturities, when assessing whether the amortized cost basis of the security will be recovered, our Company compares the present value of cash flows expected to be collected in relation to the current book value. Any shortfalls of the present value of the cash flows expected to be collected to the amortized cost basis is considered the credit loss portion of OTTI losses and is recognized in earnings. All non-credit losses are recognized as changes in OTTI losses within AOCI. | |||||||||||||||||||||||||||||||||||||
To determine whether the unrealized loss on structured securities is other-than-temporary, our Company analyzes the projections provided by its investment managers with respect to an expected principal loss under a range of scenarios and utilizes the most likely outcomes. The analysis relies on actual collateral performance measures such as default rate, prepayment rate and loss severity. These assumptions are applied throughout the remaining term of the deal, incorporating the transaction structure and priority of payments, to generate loss adjusted cash flows. Results of the analysis will indicate whether the security is expected ultimately to incur a loss or whether there is a material impact on yield due to either a projected loss or a change in cash flow timing. A break even default rate is also calculated. A comparison of the break even default rate to the actual default rate provides an indication of the level of cushion or coverage to the first dollar principal loss. The analysis applies the stated assumptions throughout the remaining term of the transaction to forecast cash flows, which are then applied through the transaction structure to determine whether there is a loss to the security. For securities in which a tranche loss is present, and the net present value of loss adjusted cash flows is less than book value, impairment is recognized. The output data also includes a number of additional metrics such as average life remaining, original and current credit support, over 60 day delinquency and security rating. | |||||||||||||||||||||||||||||||||||||
The significant inputs used to measure the amount of credit loss recognized in earnings were actual delinquency rates, default probability assumptions, severity assumptions and prepayment assumptions. Projected losses are a function of both loss severity and probability of default. Default probability and severity assumptions differ based on property type, vintage and the stress of the collateral. Our Company does not intend to sell any of these securities and it is more likely than not that, it will not be required to sell these securities before the recovery of the amortized cost basis. | |||||||||||||||||||||||||||||||||||||
For equity securities, in general, our Company focuses its attention on those securities with a fair value less than 80% of their cost for six or more consecutive months. If warranted as the result of conditions relating to a particular security, our Company will focus on a significant decline in fair value regardless of the time period involved. Factors considered in evaluating potential impairment include, but are not limited to, the current fair value as compared to cost of the security, the length of time the investment has been below cost and by how much the investment is below cost. If an equity security is deemed to be other-than-temporarily impaired, the cost is written down to fair value with the loss recognized in earnings. | |||||||||||||||||||||||||||||||||||||
Our Company’s ability to hold securities is supported by sufficient cash flow from its operations and from maturities within its investment portfolio in order to meet its claims payment and other disbursement obligations arising from its underwriting operations without selling such investments. With respect to securities where the decline in value is determined to be temporary and the security’s value is not written down, a subsequent decision may be made to sell that security and realize a loss. Subsequent decisions on security sales are made within the context of overall risk monitoring, changing information and market conditions. | |||||||||||||||||||||||||||||||||||||
As of December 31, 2014, there were no securities with a fair value that was less than 80% of amortized cost. | |||||||||||||||||||||||||||||||||||||
The table below summarizes our Company’s activity related to OTTI losses for the periods indicated: | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
In thousands, except # of securities | Number of | Amount | Number of | Amount | Number of | Amount | |||||||||||||||||||||||||||||||
Securities | Securities | Securities | |||||||||||||||||||||||||||||||||||
Total OTTI losses: | |||||||||||||||||||||||||||||||||||||
Corporate and other bonds | — | $ | — | 1 | $ | 1,822 | — | $ | — | ||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Residential mortgage-backed securities | 31 | (137 | ) | — | — | 1 | 55 | ||||||||||||||||||||||||||||||
Asset-backed securities | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Equities | — | — | 3 | 571 | 3 | 847 | |||||||||||||||||||||||||||||||
Total | 31 | $ | (137 | ) | 4 | $ | 2,393 | 4 | $ | 902 | |||||||||||||||||||||||||||
Less: Portion of loss in accumulated other comprehensive income (loss): | |||||||||||||||||||||||||||||||||||||
Corporate and other bonds | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | — | — | ||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | (137 | ) | — | 44 | |||||||||||||||||||||||||||||||||
Asset-backed securities | — | — | — | ||||||||||||||||||||||||||||||||||
Equities | — | — | — | ||||||||||||||||||||||||||||||||||
Total | $ | (137 | ) | $ | — | $ | 44 | ||||||||||||||||||||||||||||||
Impairment losses recognized in earnings: | |||||||||||||||||||||||||||||||||||||
Corporate and other bonds | $ | — | $ | 1,822 | $ | — | |||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | — | — | ||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | — | — | 11 | ||||||||||||||||||||||||||||||||||
Asset-backed securities | — | — | — | ||||||||||||||||||||||||||||||||||
Equities | — | 571 | 847 | ||||||||||||||||||||||||||||||||||
Total | $ | — | $ | 2,393 | $ | 858 | |||||||||||||||||||||||||||||||
The following table summarizes the cumulative amounts related to our Company’s credit loss portion of the OTTI losses on fixed maturities for the years ended December 31, 2014, 2013 and 2012. Our Company does not intend to sell and it is more likely than not that it will not be required to sell, the securities prior to recovery of the amortized cost basis and for which the non-credit loss portion is included in AOCI. | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
Beginning balance | $ | 5,154 | $ | 3,332 | $ | 3,321 | |||||||||||||||||||||||||||||||
Additions for credit loss impairments recognized in the current period on securities not previously impaired | — | 1,822 | — | ||||||||||||||||||||||||||||||||||
Additions for credit loss impairments recognized in the current period on securities previously impaired | — | — | 11 | ||||||||||||||||||||||||||||||||||
Reductions for credit loss impairments previously recognized on securities sold during the period | (2,793 | ) | — | — | |||||||||||||||||||||||||||||||||
Ending balance | $ | 2,361 | $ | 5,154 | $ | 3,332 | |||||||||||||||||||||||||||||||
The contractual maturity dates for fixed maturities categorized by the number of years until maturity, with a gross unrealized loss as of December 31, 2014 is presented in the following table: | |||||||||||||||||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||||||||||||||
Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||||||||||||||||
In thousands | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||||||||
of Total | of Total | ||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | 2,638 | 25 | % | $ | 21,919 | 3 | % | |||||||||||||||||||||||||||||
Due after one year through five years | 3,791 | 37 | % | 334,046 | 46 | % | |||||||||||||||||||||||||||||||
Due after five years through ten years | 1,562 | 15 | % | 103,376 | 14 | % | |||||||||||||||||||||||||||||||
Due after ten years | 158 | 2 | % | 21,533 | 3 | % | |||||||||||||||||||||||||||||||
Mortgage- and asset-backed securities | 2,198 | 21 | % | 250,472 | 34 | % | |||||||||||||||||||||||||||||||
Total | $ | 10,347 | 100 | % | $ | 731,346 | 100 | % | |||||||||||||||||||||||||||||
Our Company’s net investment income was derived from the following sources: | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
Fixed maturities | $ | 57,219 | $ | 53,898 | $ | 58,995 | |||||||||||||||||||||||||||||||
Equity securities | 9,036 | 4,835 | 3,945 | ||||||||||||||||||||||||||||||||||
Short-term investments | 911 | 774 | 1,694 | ||||||||||||||||||||||||||||||||||
Total investment income | 67,166 | 59,507 | 64,634 | ||||||||||||||||||||||||||||||||||
Investment expenses | (2,998 | ) | (3,256 | ) | (10,386 | ) | |||||||||||||||||||||||||||||||
Net investment income | $ | 64,168 | $ | 56,251 | $ | 54,248 | |||||||||||||||||||||||||||||||
Investment expenses for the year ended December 31, 2012 include $4.5 million of interest expense related to the settlement of a dispute with Equitas over foregone interest on amounts that were due on certain reinsurance contracts. In the dispute Equitas alleged that we failed to make timely payments to them under certain reinsurance agreements in connection with subrogation recoveries received by our Company with respect to several catastrophe losses that occurred in the late 1980’s and early 1990’s. In addition, investment expenses for the year ended December 31, 2012 includes a $2.8 million investment performance fee. | |||||||||||||||||||||||||||||||||||||
The change in net unrealized gains and losses, inclusive of the change in the non-credit portion of OTTI losses, consisted of: | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
Fixed maturities | $ | 31,080 | $ | (76,194 | ) | $ | 15,709 | ||||||||||||||||||||||||||||||
Equity securities | 4,302 | 8,857 | (5,989 | ) | |||||||||||||||||||||||||||||||||
Gross unrealized gains (losses) | 35,382 | (67,337 | ) | 9,720 | |||||||||||||||||||||||||||||||||
Deferred income tax | 12,197 | (23,565 | ) | 3,418 | |||||||||||||||||||||||||||||||||
Change in net unrealized gains (losses), net | $ | 23,185 | $ | (43,772 | ) | $ | 6,302 | ||||||||||||||||||||||||||||||
Realized gains and losses, excluding net OTTI losses recognized in earnings, for the periods indicated, were as follows: | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||||||||||||
Gains | $ | 8,326 | $ | 8,539 | $ | 28,789 | |||||||||||||||||||||||||||||||
Losses | (2,610 | ) | (2,797 | ) | (1,915 | ) | |||||||||||||||||||||||||||||||
Fixed maturities, net | $ | 5,716 | $ | 5,742 | $ | 26,874 | |||||||||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||||||
Gains | $ | 9,447 | $ | 17,955 | $ | 14,673 | |||||||||||||||||||||||||||||||
Losses | (2,351 | ) | (758 | ) | (473 | ) | |||||||||||||||||||||||||||||||
Equity securities, net | $ | 7,096 | $ | 17,197 | $ | 14,200 | |||||||||||||||||||||||||||||||
Net realized gains (losses) | $ | 12,812 | $ | 22,939 | $ | 41,074 | |||||||||||||||||||||||||||||||
The following tables present, for each of the fair value hierarchy levels as defined by the accounting guidance for fair value measurements and described below, our Company’s fixed maturities and equity securities by asset class that are measured at fair value on a recurring basis as of December 31, 2014 and 2013: | |||||||||||||||||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||||||||||||||
In thousands | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||||||||||||
U.S. Treasury bonds, agency bonds and foreign government bonds | $ | 146,904 | $ | 251,019 | $ | — | $ | 397,923 | |||||||||||||||||||||||||||||
States, municipalities and political subdivisions | — | 541,007 | — | 541,007 | |||||||||||||||||||||||||||||||||
Mortgage-backed and asset-backed securities: | — | ||||||||||||||||||||||||||||||||||||
Agency mortgage-backed securities | — | 364,622 | — | 364,622 | |||||||||||||||||||||||||||||||||
Residential mortgage obligations | — | 34,087 | — | 34,087 | |||||||||||||||||||||||||||||||||
Asset-backed securities | — | 206,413 | — | 206,413 | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 206,318 | — | 206,318 | |||||||||||||||||||||||||||||||||
Subtotal | $ | — | $ | 811,440 | $ | — | $ | 811,440 | |||||||||||||||||||||||||||||
Corporate bonds | — | 615,564 | — | 615,564 | |||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 146,904 | $ | 2,219,030 | $ | — | $ | 2,365,934 | |||||||||||||||||||||||||||||
Equity securities - common stocks | 127,183 | — | 127,183 | ||||||||||||||||||||||||||||||||||
Equity securities - preferred stocks | — | 57,112 | — | 57,112 | |||||||||||||||||||||||||||||||||
Total | $ | 274,087 | $ | 2,276,142 | $ | — | $ | 2,550,229 | |||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
In thousands | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||||||||||||
U.S. Treasury bonds, agency bonds and foreign government bonds | $ | 242,379 | $ | 199,306 | $ | — | $ | 441,685 | |||||||||||||||||||||||||||||
States, municipalities and political subdivisions | — | 460,422 | — | 460,422 | |||||||||||||||||||||||||||||||||
Mortgage-backed and asset-backed securities: | — | ||||||||||||||||||||||||||||||||||||
Agency mortgage-backed securities | — | 301,274 | — | 301,274 | |||||||||||||||||||||||||||||||||
Residential mortgage obligations | — | 41,755 | — | 41,755 | |||||||||||||||||||||||||||||||||
Asset-backed securities | — | 125,133 | — | 125,133 | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 172,750 | — | 172,750 | |||||||||||||||||||||||||||||||||
Subtotal | $ | — | $ | 640,912 | $ | — | $ | 640,912 | |||||||||||||||||||||||||||||
Corporate bonds | — | 500,447 | 4,407 | 504,854 | |||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 242,379 | $ | 1,801,087 | $ | 4,407 | $ | 2,047,873 | |||||||||||||||||||||||||||||
Equity securities - common stocks | 143,954 | — | — | 143,954 | |||||||||||||||||||||||||||||||||
Total | $ | 386,333 | $ | 1,801,087 | $ | 4,407 | $ | 2,191,827 | |||||||||||||||||||||||||||||
The fair value of financial instruments is determined based on the following fair value hierarchy: | |||||||||||||||||||||||||||||||||||||
Level 1 – Quoted prices for identical instruments in active markets. Examples are listed equity and fixed income securities traded on an exchange. U.S. Treasury securities are reported as level 1 and are valued based on unadjusted quoted prices for identical assets in active markets that our Company can access. | |||||||||||||||||||||||||||||||||||||
Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Examples are asset-backed and mortgage-backed securities that are similar to other asset-backed or mortgage-backed securities observed in the market. U.S. government agency securities are reported as level 2 and are valued using yields and spreads that are observable in active markets. | |||||||||||||||||||||||||||||||||||||
Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. An example would be a private placement with minimal liquidity. | |||||||||||||||||||||||||||||||||||||
Our Company did not have any significant transfers between Level 1 and 2 for the years ended December 31, 2014 and 2013. | |||||||||||||||||||||||||||||||||||||
Our Company did not have any Level 3 assets for the year ended December 31, 2014. | |||||||||||||||||||||||||||||||||||||
During 2014, one security was transferred from Level 3 to Level 2 as our Company was able to obtain a price from a vendor, in which all significant inputs to the model are observable in active markets. | |||||||||||||||||||||||||||||||||||||
The following tables present a reconciliation of the beginning and ending balances for all investments measured at fair value using Level 3 inputs for the years ended December 31, 2014 and 2013. For the year ended December 31, 2012, our Company did not have any Level 3 assets. | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||||||||||||||||||||||
In thousands | Beginning | Realized | Unrealized | Purchase | Sales | Settlements | Transfers | Transfers | Ending | ||||||||||||||||||||||||||||
Balance | Gains | Gains | into | out of | |||||||||||||||||||||||||||||||||
(Losses) | (Losses) | Level 3 | Level 3 | ||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||
Corporate Bond | $ | 4,407 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (4,407 | ) | $ | — | ||||||||||||||||||
Total assets | $ | 4,407 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (4,407 | ) | $ | — | ||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||||||||||||
In thousands | Beginning | Realized | Unrealized | Purchase | Sales | Settlements | Transfers | Transfers | Ending | ||||||||||||||||||||||||||||
Balance | Gains | Gains | into | out of | |||||||||||||||||||||||||||||||||
(Losses) | (Losses) | Level 3 | Level 3 | ||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||||||||||
Mortgage | $ | — | $ | — | $ | (42 | ) | $ | 4,660 | $ | (211 | ) | $ | — | $ | — | $ | — | $ | 4,407 | |||||||||||||||||
Total assets | $ | — | $ | — | $ | (42 | ) | $ | 4,660 | $ | (211 | ) | $ | — | $ | — | $ | — | $ | 4,407 | |||||||||||||||||
In 2013 the Level 3 security was valued using unobservable inputs based on a proxy of a security of similar duration in which market quotations are available. | |||||||||||||||||||||||||||||||||||||
As of December 31, 2014 and 2013, our Company’s restricted net assets in support of the underwriting activities of the Insurance Companies and Lloyd’s Operations were $523.4 million and $520.9 million, respectively, consisting of fixed maturities, short term investments and cash. Refer to Note 13, Dividends and Statutory Financial Information, for additional information on the nature and type of restricted net assets. | |||||||||||||||||||||||||||||||||||||
As of December 31, 2014 and 2013, our Company did not have a concentration of greater than 5% of invested assets in a single non-U.S. government-backed issuer. | |||||||||||||||||||||||||||||||||||||
Reserves_for_Losses_and_Loss_A
Reserves for Losses and Loss Adjustment Expenses | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Reserves for Losses and Loss Adjustment Expenses | Note 5. | Reserves for Losses and Loss Adjustment Expenses | |||||||||||||||
Insurance companies and Lloyd’s syndicates are required to maintain reserves for unpaid losses and unpaid loss adjustment expenses for all lines of business. These reserves are intended to cover the probable ultimate cost of settling all losses incurred and unpaid, including those incurred but not reported. The determination of reserves for losses and LAE for the Insurance Companies and the Lloyd’s Operations is dependent upon the receipt of information from the agents and brokers, which produce the insurance business for us. Generally, there is a lag between the time premiums are written and related losses and loss adjustment expenses are incurred, and the time such events are reported to the agents and brokers and, subsequently, the Insurance Companies and the Lloyd’s Operations. | |||||||||||||||||
Case reserves are established by our Insurance Companies and Syndicate 1221 for reported claims when notice of the claim is first received. Reserves for such reported claims are established on a case-by-case basis by evaluating several factors, including the type of risk involved, knowledge of the circumstances surrounding such claim, severity of injury or damage, the potential for ultimate exposure, experience with the line of business, and the policy provisions relating to the type of claim. Reserves for IBNR are determined in part on the basis of statistical information, in part on industry experience and in part on the judgment of our senior corporate officers. Indicated reserves are calculated by our actuaries using several standard actuarial methodologies, including the paid and incurred loss development and the paid and incurred Bornheutter-Ferguson loss methods. Additional analyses, such as frequency/severity analyses, are performed for certain books of business. | |||||||||||||||||
Total loss reserves are estimates of what the insurer or reinsurer expects to pay on claims, based on facts and circumstances then known. It is possible that the ultimate liability may exceed or be less than such estimates. In setting our loss reserve estimates, we review statistical data covering several years, analyze patterns by line of business and consider several factors including trends in claims frequency and severity, changes in operations, emerging economic and social trends, inflation and changes in the regulatory and litigation environment. Using the aforementioned actuarial methods and different underlying assumptions, our actuaries produce a number of point estimates for each class of business. After reviewing the appropriateness of the underlying assumptions, management selects the carried reserve for each class of business. The numerous factors that contribute to the inherent uncertainty in the process of establishing loss reserves include: interpreting loss development activity, emerging economic and social trends, inflation, changes in the regulatory and judicial environment and changes in our operations, including changes in underwriting standards and claims handling procedures. During the loss settlement period, which, in some cases, may last several years, additional facts regarding individual claims may become known and, accordingly, it often becomes necessary to refine and adjust the estimates of liability on a claim upward or downward. Such estimates are regularly reviewed and updated and any resulting adjustments are included in the current year’s income statement. Even then, the ultimate liability may exceed or be less than the revised estimates. The reserving process is intended to provide implicit recognition of the impact of inflation and other factors affecting loss payments by taking into account changes in historical payment patterns and perceived probable trends. There is generally no precise method for the subsequent evaluation of the adequacy of the consideration given to inflation, or to any other specific factor, because the eventual strengthening or release of reserves is affected by many factors, some of which are interdependent. To the extent that reserves are strengthened or released, the amount of such strengthening or release is treated as a charge or credit to earnings in the period in which the strengthening or release is recognized. | |||||||||||||||||
The following table summarizes our Company’s reserves for losses and LAE activity for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||
Net reserves for losses and LAE at beginning of year | $ | 1,222,633 | $ | 1,216,909 | $ | 1,237,234 | |||||||||||
Provision for losses and LAE for claims occurring in the current year | 601,041 | 520,227 | 542,724 | ||||||||||||||
Increase (decrease) in estimated losses and LAE for claims occurring in prior years | (55,812 | ) | (1,266 | ) | (45,291 | ) | |||||||||||
Incurred losses and LAE | 545,229 | 518,961 | 497,433 | ||||||||||||||
Losses and LAE paid for claims occurring during: | |||||||||||||||||
Current year | (164,199 | ) | (147,758 | ) | (110,373 | ) | |||||||||||
Prior years | (295,527 | ) | (365,479 | ) | (407,385 | ) | |||||||||||
Losses and LAE payments | (459,726 | ) | (513,237 | ) | (517,758 | ) | |||||||||||
Net reserves for losses and LAE at end of year | 1,308,136 | 1,222,633 | 1,216,909 | ||||||||||||||
Reinsurance recoverables on unpaid losses and LAE | 851,498 | 822,438 | 880,139 | ||||||||||||||
Gross reserves for losses and LAE at end of year | $ | 2,159,634 | $ | 2,045,071 | $ | 2,097,048 | |||||||||||
The segment and line of business breakdowns of prior period net reserve strengthening (releases) for the years ended December 31, 2014, 2013 and 2012 are as follows: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||
Insurance Companies: | |||||||||||||||||
Marine | $ | (41,388 | ) | $ | (15,227 | ) | $ | (10,010 | ) | ||||||||
Property Casualty | 14,612 | 18,466 | 4,293 | ||||||||||||||
Professional Liability | (3,536 | ) | 10,191 | 7,613 | |||||||||||||
Insurance Companies | $ | (30,312 | ) | $ | 13,430 | $ | 1,896 | ||||||||||
Lloyd’s Operations: | |||||||||||||||||
Marine | $ | (21,336 | ) | $ | (2,998 | ) | $ | (30,735 | ) | ||||||||
Property Casualty | (1,500 | ) | (14,574 | ) | (6,890 | ) | |||||||||||
Professional Liability | (2,664 | ) | 2,876 | (9,562 | ) | ||||||||||||
Lloyd’s Operations | $ | (25,500 | ) | $ | (14,696 | ) | $ | (47,187 | ) | ||||||||
Total strengthening (releases) | $ | (55,812 | ) | $ | (1,266 | ) | $ | (45,291 | ) | ||||||||
The following is a discussion of relevant factors related to the $55.8 million prior period net reserve releases recorded for the year ended December 31, 2014: | |||||||||||||||||
The Insurance Companies recorded $30.3 million of net prior year reserve releases, primarily driven by our Marine business, in connection with $41.4 million of net favorable loss emergence due to a lesser amount of large losses and improved underwriting over the past couple of years across all core product lines, inclusive of $13.4 million from Marine Liability, $7.2 million from Craft/Fishing vessels, $6.4 million from P&I, $4.7 million from Inland Marine, $1.1 million from Bluewater Hull and $0.7 million from Cargo. | |||||||||||||||||
The Insurance Companies’ Marine reserve releases were partially offset by $14.6 million of net reserve strengthening from our Property Casualty business which is driven by $23.2 million of prior year reserve strengthening from our Primary Casualty division resulting entirely from unfavorable activity on pre-2010 California construction defect liability claims, partially offset by $6.1 million of reserve releases due to favorable loss emergence from our Excess Casualty division. | |||||||||||||||||
The Insurance Companies’ Professional Liability business recorded $3.5 million of net prior year reserve releases primarily driven by $4.5 million of favorable loss emergence from our Management Liability division due to a cash settlement of a contract dispute with a former third party administrator, partially offset by unfavorable loss emergence from our Errors and Omissions (“E&O”) division due to our small lawyers’ product lines, which are in runoff. | |||||||||||||||||
The Lloyds Operations recorded $25.5 million of net prior year reserve releases primarily driven by $21.3 million of Marine releases in connection with favorable loss emergence across all core product lines, inclusive of $11.0 million from Marine Liability, $3.7 million from Specie, $1.3 million from Transport, $1.0 million from Cargo, $2.3 million from Energy Liability and $2.0 million from Marine Assumed. | |||||||||||||||||
The Lloyd’s Operations Property Casualty line recorded prior year releases of $1.5 million due to favorable loss emergence on our Onshore Energy book. Additionally, the Professional Liability business reserve releases on older underwriting years (“UWYs”) was due to favorable loss emergence on both our E&O book by $1.0 million and Excess D&O by $1.7 million. | |||||||||||||||||
The following is a discussion of relevant factors related to the $1.3 million prior period net reserve releases recorded for the year ended December 31, 2013: | |||||||||||||||||
The Insurance Companies recorded $13.4 million of net strengthening primarily driven by our Property Casualty and Professional Liability businesses. Within the Property Casualty business, we reported net prior period reserve strengthening of $18.5 million, which includes $13.2 million of net strengthening from our Assumed Reinsurance division mostly attributable to our excess-of-loss A&H treaty lines in connection with UWYs 2012 and 2011, $10.4 million of strengthening from our Primary Casualty division related to our general liability coverage for general and artisan contractors, and a total of $2.1 million of strengthening for business in run-off. The aforementioned net prior period reserve strengthening was partially offset by $8.0 million of net prior period reserve releases from our Energy & Engineering division in connection with favorable emergence on our Offshore Energy lines written by our UK Branch. | |||||||||||||||||
Our Insurance Companies Professional Liability business reported net prior period reserve strengthening of $10.2 million largely attributable to $6.1 million reserve strengthening from our Management Liability division related to specific large claims for UWYs 2010 and prior, and $4.4 million reserve strengthening from our E&O division related to specific large claims from our insurance agents, miscellaneous Professional Liability, and small lawyer lines from UWYs 2011 and prior. | |||||||||||||||||
The aforementioned net prior period reserve strengthening from our Insurance Companies Property Casualty and Professional Liability were partially offset by $15.2 million of net reserve releases from our Insurance Companies Marine business in connection with favorable emergence from our Marine Liability lines for UWYs 2012 and prior. | |||||||||||||||||
Our Lloyd’s Operations recorded $14.7 million of net reserve releases driven by our Property Casualty and Marine businesses partially offset by strengthening in our Professional Liability business. Within our Lloyd’s Operations Property Casualty business, we reported net prior period reserve releases of $14.6 million primarily from our Energy & Engineering division. Within our Lloyd’s Operations Marine business, we reported prior period reserve releases of $3.0 million driven by our Marine Liability product. Within our Lloyd’s Operations Professional Liability business, we reported strengthening of $2.9 million, inclusive of $6.1 million of strengthening in our E&O division partially offset by $3.2 million of favorable emergence from our Management Liability division. | |||||||||||||||||
The following is a discussion of relevant factors related to the $45.3 million prior period net reserve releases recorded for the year ended December 31, 2012: | |||||||||||||||||
The Insurance Companies recorded $1.9 million net strengthening. The Marine business had $10.0 million of net reserve releases, which were primarily driven by: | |||||||||||||||||
• | An IBNR adjustment of $4.0 million to reflect the actual emergence of claims for UWY 2010, which was more favorable than the expected emergence. | ||||||||||||||||
• | Case reserve releases of $3.4 million due to the favorable settlement of several large losses; and | ||||||||||||||||
• | A favorable IBNR adjustment of $2.6 million attributable to changes in our assumptions for salvage and subrogation from our short tail Marine lines that was based on our observation of a consistent and persistent historical pattern of favorable savings attributable to salvage and subrogation. | ||||||||||||||||
The Marine reserve releases were partially offset by net strengthening of $7.6 million from the small lawyer and accountants lines within our Professional Liability business. This strengthening was primarily driven by several large losses that caused the actual claims emergence for these lines to exceed the expected losses. We also incurred net reserve strengthening of $4.3 million within our Property Casualty segment, which were primarily attributable to two large hemophiliac claims from UWY 2011 arising from our A&H product lines. | |||||||||||||||||
Our Lloyd’s Operations recorded $47.2 million of net prior period reserve releases across all businesses and divisions. In connection with our Company’s implementation of the Solvency II technical provisions in its Lloyd’s Operations, our Company’s actuaries undertook a comprehensive review during 2012 of the historical claims emergence patterns for all lines of business underwritten through Syndicate 1221. As a result of this review, our Company updated the loss emergence patterns used to project ultimate losses for all such lines of business, aligning these loss emergence factors with the historical median. This caused a reduction in ultimate loss estimates for all Lloyd’s Operations segments other than certain lines of business in Property Casualty segment, which increased. The Lloyd’s Operations also experienced significant reserve redundancies in several large claims. The amount of reserve redundancies attributable to these settlements was $5.0 million, consisting of $4.1 million from the Marine business and $0.9 million from Professional Liability business. A summary of the resulting prior period redundancies for each business within our Lloyd’s Operations by prior UWY is set forth below: | |||||||||||||||||
In thousands | Marine | Property | Professional | Total | |||||||||||||
Casualty | Liability | ||||||||||||||||
2010 | $ | 3,492 | $ | 378 | $ | 1,157 | $ | 5,027 | |||||||||
2009 | 14,792 | 4,170 | 6,072 | 25,034 | |||||||||||||
2008 and Prior | 12,451 | 2,342 | 2,333 | 17,126 | |||||||||||||
Total Redundancy | $ | 30,735 | $ | 6,890 | $ | 9,562 | $ | 47,187 | |||||||||
Management believes that the reserves for losses and loss adjustment expenses are adequate to cover the ultimate cost of losses and loss adjustment expenses on reported and unreported claims. We continue to review our reserves on a regular basis. |
Ceded_Reinsurance
Ceded Reinsurance | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Ceded Reinsurance | Note 6. | Ceded Reinsurance | |||||||||||||||||||
We utilize reinsurance principally to reduce our exposure on individual risks, to protect against catastrophic losses, and to stabilize loss ratios and underwriting results. Although reinsurance makes the reinsurer liable to us to the extent the risk is transferred or ceded to the reinsurer, ceded reinsurance arrangements do not eliminate our obligation to pay claims to our policyholders. Accordingly, we bear credit risk with respect to our reinsurers. | |||||||||||||||||||||
Our Company’s ceded earned premiums were $440.7 million, $456.0 million and $396.6 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
Our Company’s ceded incurred losses were $230.2 million, $188.7 million and $262.6 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
We have established a reserve for uncollectible reinsurance in the amount of $11.3 million as of December 31, 2014 and 2013, which was determined by considering reinsurer specific default risk as indicated by their financial strength ratings as well as additional default risk for Asbestos and Environmental related recoverables. Actual uncollectible reinsurance could exceed or be less than our estimate. | |||||||||||||||||||||
We are protected by various treaty and facultative reinsurance agreements. Our exposure to credit risk from any one reinsurer is managed through diversification by reinsuring with a number of different reinsurers, principally in the United States and European reinsurance markets. To meet our standards of acceptability, when the reinsurance is placed, a reinsurer generally must have a rating from A.M. Best Company (“A.M. Best”) and/or S&P of “A” or better, or an equivalent financial strength if not rated, plus at least $500 million in policyholders’ surplus. Our Reinsurance Security Committee, which is part of our Enterprise Risk Management Finance and Credit Sub-Committee, monitors the financial strength of our reinsurers and the related reinsurance receivables and periodically reviews the list of acceptable reinsurers. The reinsurance is placed either directly by us or through reinsurance intermediaries. The reinsurance intermediaries are compensated by the reinsurers. | |||||||||||||||||||||
The credit quality distribution of our Company’s reinsurance recoverables of $1.1 billion as of December 31, 2014 for ceded paid and unpaid losses and LAE and ceded unearned premiums based on insurer financial strength ratings from A.M. Best or S&P were as follows: | |||||||||||||||||||||
In thousands | Rating | Carrying | Percent | ||||||||||||||||||
Value (2) | of Total | ||||||||||||||||||||
A.M. Best Rating description (1): | |||||||||||||||||||||
Superior | A++, A+ | $ | 575,205 | 50 | % | ||||||||||||||||
Excellent | A, A- | 547,314 | 48 | % | |||||||||||||||||
Very good | B++, B+ | 8,483 | 1 | % | |||||||||||||||||
Fair | B, B- | — | 0 | % | |||||||||||||||||
Not rated | NR | 9,694 | 1 | % | |||||||||||||||||
Total | $ | 1,140,696 | 100 | % | |||||||||||||||||
-1 | - | When an A.M. Best rating is unavailable, the equivalent S&P rating is used. | |||||||||||||||||||
-2 | - | The carrying value is comprised of prepaid reinsurance premium as well as reinsurance recoverables on paid and unpaid losses which are net of the reserve for uncollectible reinsurance. | |||||||||||||||||||
Our Company holds collateral of $202.0 million, which consists of $152.8 million in ceded balances payable, $43.1 million in letters of credit and $6.1 million of funds held and trust account balances, all of which are held by our Insurance Companies and Lloyd’s Operations. In total, the collateral represents 17.7% of the carrying value of the reinsurance recoverables. Collateral of $5.2 million or 53.6% of the carrying value is held for NR rated reinsurance recoverables. | |||||||||||||||||||||
The following table lists our Company’s 20 largest reinsurers measured by the amount of reinsurance recoverable for ceded losses and LAE and ceded unearned premium (constituting 75.7% of the total recoverable), together with the reinsurance recoverable and collateral as of December 31, 2014, and the reinsurers’ ratings from A.M. Best or S&P: | |||||||||||||||||||||
In thousands | Unearned | Paid/Unpaid | Total (1) | Collateral | A.M. Best | S&P | |||||||||||||||
Premium | Losses | Held | |||||||||||||||||||
National Indemnity Company | $ | 25,202 | $ | 117,562 | $ | 142,764 | $ | 22,069 | A++ | AA+ | |||||||||||
Everest Reinsurance Company | 21,573 | 75,063 | 96,636 | 7,326 | A+ | A+ | |||||||||||||||
Swiss Reinsurance America Corporation | 22,815 | 73,305 | 96,120 | 14,587 | A+ | AA- | |||||||||||||||
Transatlantic Reinsurance Company | 11,916 | 74,072 | 85,988 | 4,038 | A | A+ | |||||||||||||||
Munich Reinsurance America Inc. | 11,366 | 58,768 | 70,134 | 5,539 | A+ | AA- | |||||||||||||||
Allied World Reinsurance | 9,048 | 37,088 | 46,136 | 1,666 | A | A | |||||||||||||||
Lloyd’s Syndicate #2003 | 4,399 | 35,123 | 39,522 | 5,191 | A | A+ | |||||||||||||||
Partner Reinsurance Europe | 10,986 | 25,409 | 36,395 | 16,052 | A+ | A+ | |||||||||||||||
Employers Mutual Casualty Company | 11,928 | 21,851 | 33,779 | 10,935 | A | NR | |||||||||||||||
Scor Global P&C SE | 10,190 | 17,572 | 27,762 | 5,558 | A | A+ | |||||||||||||||
Ace Property and Casualty Insurance Company | 11,165 | 12,741 | 23,906 | 2,907 | A++ | AA | |||||||||||||||
Tower Insurance Company | — | 21,509 | 21,509 | 2,455 | A- | NR | |||||||||||||||
Aspen Insurance UK Ltd. | 8,928 | 11,227 | 20,155 | 4,869 | A | A | |||||||||||||||
Ironshore Indemnity Inc. | 6,234 | 13,395 | 19,629 | 8,645 | A | NR | |||||||||||||||
Validus Reinsurance Ltd. | 2,020 | 16,873 | 18,893 | 10,975 | A | A | |||||||||||||||
Atlantic Specialty Insurance | 2,542 | 15,812 | 18,354 | — | A | A- | |||||||||||||||
QBE Reinsurance Corp | 2,636 | 15,539 | 18,175 | — | A | A+ | |||||||||||||||
National Union Fire Ins. | 8,067 | 8,459 | 16,526 | 6,158 | A | A+ | |||||||||||||||
Endurance Reinsurance Corporation | 5,695 | 9,936 | 15,631 | 1,337 | A | A | |||||||||||||||
Odyssey American Reinsurance Corporation | 3,506 | 11,650 | 15,156 | 1,604 | A | A- | |||||||||||||||
Top 20 | $ | 190,216 | $ | 672,954 | $ | 863,170 | $ | 131,911 | |||||||||||||
Others | 47,635 | 229,891 | 277,526 | 70,065 | |||||||||||||||||
Total | $ | 237,851 | $ | 902,845 | $ | 1,140,696 | $ | 201,976 | |||||||||||||
(1) - Net of reserve for uncollectible reinsurance of approximately $11.3 million. | |||||||||||||||||||||
Approximately 21% of the collateral held consists of letters of credit obtained from reinsurers in accordance with New York Insurance Regulation Nos. 20 and 133. Regulation 20 requires collateral to be held by the ceding company from reinsurers not licensed in New York State in order for the ceding company to take credit for the reinsurance recoverables on its statutory balance sheet. The specific requirements governing the letters of credit are contained in Regulation 133 and include a clean and unconditional letter of credit and an “evergreen” clause which prevents the expiration of the letter of credit without due notice to our Company. Only banks considered qualified by the National Association of Insurance Commissioners (“NAIC”) may be deemed acceptable issuers of letters. In addition, based on our credit assessment of the reinsurer, there are certain instances where we require collateral from a reinsurer even if the reinsurer is licensed in New York State, generally applying the requirements of Regulation No. 133. The contractual terms of the letters of credit require that access to the collateral is unrestricted. In the event that the counterparty to our collateral would be deemed not qualified by the NAIC, the reinsurer would be required by agreement to replace such collateral with acceptable security under the reinsurance agreement. There is no assurance, however, that the reinsurer would be able to replace the counterparty bank in the event such counterparty bank becomes unqualified and the reinsurer experiences significant financial deterioration. Under such circumstances, we could incur a substantial loss from uncollectible reinsurance from such reinsurer. In November 2010, Regulation No. 20 was amended to provide the New York Superintendent of Financial Services (the “New York Superintendent”) discretion to allow a reduction in collateral that qualifying reinsurers must post in order for New York domestic ceding insurers such as Navigators Insurance Company and Navigators Specialty Insurance Company to receive full financial statement credit. The “collateral required” percentages range from 0% – 100%, are based upon the New York Superintendent’s evaluation of a number of factors, including the reinsurer’s financial strength ratings, and apply to contracts entered into, renewed or having an anniversary date on or after January 1, 2011. In November 2011, the NAIC adopted similar amendments to its Credit for Reinsurance Model Act that would apply to certain non-U.S. reinsurers. States will have the option to retain a 100% funding requirement if they so choose and it remains to be seen whether and when states will amend their credit for reinsurance laws and regulations in accordance with such model act. | |||||||||||||||||||||
As of December 31, 2014, the reinsurance recoverables for paid and unpaid losses due from reinsurers in connection with all catastrophic losses was $43.3 million. Included in this figure is $25.4 million for Superstorm Sandy and $7.3 million for the 2008 Hurricanes. As of December 31, 2013, the reinsurance recoverables for paid and unpaid losses due from reinsurers in connection with all catastrophic losses was $46.5 million. Included in this figure is $30.7 million for Superstorm Sandy and $3.3 million for the 2008 Hurricanes. | |||||||||||||||||||||
The following table summarizes the components of Net Written Premium: | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||
Direct | $ | 1,184,538 | $ | 1,127,331 | $ | 1,034,658 | |||||||||||||||
Assumed | 247,815 | 243,187 | 251,807 | ||||||||||||||||||
Ceded | (432,215 | ) | (482,596 | ) | (452,810 | ) | |||||||||||||||
Net Written Premiums | $ | 1,000,138 | $ | 887,922 | $ | 833,655 | |||||||||||||||
The following table summarizes the components of Net Earned Premium: | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||
Direct | $ | 1,133,336 | $ | 1,069,677 | $ | 972,844 | |||||||||||||||
Assumed | 243,215 | 228,247 | 205,759 | ||||||||||||||||||
Ceded | (440,656 | ) | (455,985 | ) | (396,639 | ) | |||||||||||||||
Net Earned Premiums | $ | 935,895 | $ | 841,939 | $ | 781,964 | |||||||||||||||
The following table summarizes the components of Net Losses and LAE incurred: | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||
Direct | $ | 631,730 | $ | 552,381 | $ | 608,945 | |||||||||||||||
Assumed | 143,681 | 155,313 | 151,137 | ||||||||||||||||||
Ceded | (230,182 | ) | (188,733 | ) | (262,649 | ) | |||||||||||||||
Net Losses and LAE | $ | 545,229 | $ | 518,961 | $ | 497,433 | |||||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Income Taxes | Note 7. | Income Taxes | |||||||||||||||||||||||
Our Company is subject to the tax laws and regulations of the United States (“U.S.”) and the foreign countries in which it operates. Our Company files a consolidated U.S. Federal tax return, which includes all domestic subsidiaries and the U.K. Branch. The income from the foreign operations is designated as either U.S. connected income or non-U.S. connected income. Lloyd’s is required to pay U.S. income tax on U.S. connected income written by Lloyd’s syndicates. Lloyd’s and the Internal Revenue Service (“IRS”) have entered into an agreement whereby the amount of tax due on U.S. connected income is calculated by Lloyd’s and remitted directly to the IRS. These amounts are then charged to the corporate member in proportion to its participation in the relevant syndicates. Our Company’s corporate member is subject to this agreement and receives U.K. tax credits in the U.K. for any U.S. income tax incurred up to the U.K. income tax charged on the U.S. connected income. The non-U.S. connected insurance income would generally constitute taxable income under the Subpart F income section of the U.S. Internal Revenue Code (“Subpart F”) since less than 50% of Syndicate 1221’s premiums are derived within the U.K. and would therefore be subject to U.S. taxation when the Lloyd’s year of account closes. Taxes are accrued at a 35% rate on our Company’s foreign source insurance income and foreign tax credits, where available, are utilized to offset U.S. tax as permitted. Our Company’s effective tax rate for Syndicate 1221 taxable income could substantially exceed 35% to the extent our Company is unable to offset U.S. taxes paid under Subpart F tax regulations with U.K. tax credits on future underwriting year distributions. U.S. taxes are not accrued on the earnings of our Company’s foreign agencies as these earnings are subject to the active financing exception and are not includable as Subpart F income. Certain provisions of Subpart F expired for years after December 31, 2014; therefore, these earnings will be taxable in the U.S. at the 35% tax rate beginning January 1, 2015. | |||||||||||||||||||||||||
The components of current and deferred income tax expense (benefit) are as follows: | |||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Current income tax expense (benefit): | |||||||||||||||||||||||||
Federal and foreign | $ | 27,290 | $ | 23,703 | $ | 39,242 | |||||||||||||||||||
State and local | 1,036 | 446 | 146 | ||||||||||||||||||||||
Subtotal | 28,326 | 24,149 | 39,388 | ||||||||||||||||||||||
Deferred income tax expense (benefit): | |||||||||||||||||||||||||
Federal and foreign | 16,881 | 4,658 | (11,414 | ) | |||||||||||||||||||||
State and local | — | — | — | ||||||||||||||||||||||
Subtotal | 16,881 | 4,658 | (11,414 | ) | |||||||||||||||||||||
Total income tax expense (benefit) | $ | 45,207 | $ | 28,807 | $ | 27,974 | |||||||||||||||||||
A reconciliation of total income taxes applicable to pre-tax operating income and the amounts computed by applying the federal statutory income tax rate to the pre-tax operating income were as follows: | |||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Computed expected tax expense | $ | 49,187 | 35 | % | $ | 32,299 | 35 | % | $ | 32,109 | 35 | % | |||||||||||||
Tax-exempt interest | (4,771 | ) | -3.4 | % | (3,839 | ) | -4.2 | % | (4,443 | ) | -4.8 | % | |||||||||||||
Dividends received deduction | (1,257 | ) | -0.9 | % | (897 | ) | -1 | % | (799 | ) | -0.9 | % | |||||||||||||
Proration of DRD and Tax-exempt interest | 904 | 0.6 | % | 710 | 0.8 | % | 786 | 0.9 | % | ||||||||||||||||
Current state and local income taxes, net of federal income tax deduction | 674 | 0.5 | % | 290 | 0.3 | % | 95 | 0.1 | % | ||||||||||||||||
Other | 470 | 0.3 | % | 244 | 0.3 | % | 226 | 0.2 | % | ||||||||||||||||
Actual tax expense and rate | $ | 45,207 | 32.2 | % | $ | 28,807 | 31.2 | % | $ | 27,974 | 30.5 | % | |||||||||||||
The tax effects of temporary differences that give rise to federal, foreign, state and local deferred tax assets and deferred tax liabilities were as follows: | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
In thousands | 2014 | 2013 | |||||||||||||||||||||||
Deferred tax assets: | |||||||||||||||||||||||||
Loss reserve discount | $ | 24,820 | $ | 27,822 | |||||||||||||||||||||
Unearned premiums | 29,080 | 25,706 | |||||||||||||||||||||||
Compensation related | 10,586 | 6,782 | |||||||||||||||||||||||
State and local net deferred tax assets | 777 | 555 | |||||||||||||||||||||||
Other | 1,834 | 3,889 | |||||||||||||||||||||||
Total gross deferred tax assets | 67,097 | 64,754 | |||||||||||||||||||||||
Less: Valuation allowance | (777 | ) | (555 | ) | |||||||||||||||||||||
Total deferred tax assets | $ | 66,320 | $ | 64,199 | |||||||||||||||||||||
Deferred tax liabilities: | |||||||||||||||||||||||||
Net unrealized gains/losses on securities | (24,832 | ) | (9,119 | ) | |||||||||||||||||||||
Deferred acquisition costs | (22,120 | ) | (19,258 | ) | |||||||||||||||||||||
Lloyd’s year of account deferral | (13,578 | ) | (4,381 | ) | |||||||||||||||||||||
Net unrealized foreign exchange | (4,470 | ) | (3,516 | ) | |||||||||||||||||||||
Other | (2,787 | ) | (4,119 | ) | |||||||||||||||||||||
Total deferred tax liabilities | $ | (67,787 | ) | $ | (40,393 | ) | |||||||||||||||||||
Net deferred income tax asset (liability) | $ | (1,467 | ) | $ | 23,806 | ||||||||||||||||||||
Our Company has not provided for U.S. income taxes on approximately $22.6 million of undistributed earnings of its non-U.S. subsidiaries since it is intended that those earnings will be reinvested indefinitely in those subsidiaries. If a future determination is made that those earnings no longer are intended to be reinvested indefinitely in those subsidiaries, U.S. income taxes of approximately $2.3 million, assuming all foreign tax credits are realized, would be included in the tax provision at that time and would be payable if those earnings were distributed to our Company. | |||||||||||||||||||||||||
Unrecognized tax benefits are differences between tax positions taken in the tax returns and benefits recognized in the financial statements. Our Company has no unrecognized tax benefits as of December 31, 2014 and 2013. Our Company did not incur any interest or penalties related to unrecognized tax benefits for the years ended December 31, 2014 and 2013. Our Company currently is under examination by the IRS for taxable years 2010, 2011, and 2012 and generally is subject to U.S. Federal, state or local or foreign tax examinations by tax authorities for 2009 and subsequent years. | |||||||||||||||||||||||||
Our Company recorded income tax expense of $45.2 million for the year ended December 31, 2014 compared to $28.8 million for the same period in 2013, resulting in an effective tax rate of 32.2% for the year ended December 31, 2014 and 31.2% for the comparable periods in 2013. | |||||||||||||||||||||||||
Our Company had state and local deferred tax assets amounting to potential future tax benefits of $0.8 million and $0.6 million as of December 31, 2014 and 2013, respectively. Included in the deferred tax assets are state and local net operating loss carry-forwards of $0.0 million as of December 31, 2014 and $0.1 million for December 31, 2013. A valuation allowance was established for the full amount of these potential future tax benefits due to the uncertainty associated with their realization. Our Company’s state and local tax carry-forwards as of December 31, 2014 expire from 2024 to 2032. | |||||||||||||||||||||||||
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that, the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, tax planning strategies and anticipated future taxable income in making this assessment and believes it is more likely than not that our Company will realize the benefits of its deductible differences as of December 31, 2014, net of any valuation allowance. |
Credit_Facilities
Credit Facilities | 12 Months Ended | |
Dec. 31, 2014 | ||
Credit Facilities | Note 8. | Credit Facilities |
On November 6, 2014 NUAL entered into a credit facility for $8.0 million Australian Dollars with Barclays Bank PLC to fund its participation in Syndicate 1221. The facility is used to fund Australian underwriting obligations for the 2014 and prior underwriting years. The facility contains customary covenants for facilities of this type, including a restriction on future encumbrances that are outside the ordinary course of business, and a requirement to maintain at least £75 million of Funds at Lloyd’s. Interest is payable on the facility at a rate of 2% per annum above a floating rate tied to the average mid-rate for Australian bills of exchange administered by the Australian Financial Markets Association. The facility may be cancelled by either party after providing written notice. As of December 31, 2014, our Company was in compliance with all covenants. | ||
On November 24, 2014, our Company entered into a $175 million credit facility agreement with ING Bank N.V., London Branch, individually and as Administrative Agent, and a syndicate of lenders. The new credit facility amended and restated a $165 million letter of credit facility entered into by the parties on November 22, 2012. The credit facility, which is denominated in U.S. dollars, is utilized to fund participation in Syndicate 1221 through letters of credit for the 2015 and 2016 underwriting years, as well as open prior years. The letters of credit issued under the facility can be denominated in British pounds and their aggregate face amount will fluctuate based on exchange rates. If any letters of credit remain outstanding under the facility after December 31, 2016, our Company would be required to post additional collateral to secure the remaining letters of credit. As of December 31, 2014, letters of credit with an aggregate face amount of $149.4 million were outstanding under the credit facility and our Company had $1.0 million of cash collateral posted. | ||
This credit facility contains customary covenants for facilities of this type, including restrictions on indebtedness and liens, limitations on mergers, dividends and the sale of assets, and requirements as to maintaining certain consolidated tangible net worth, statutory surplus and other financial ratios. The credit facility also provides for customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, any representation or warranty made by our Company being false in any material respect, default under certain other indebtedness, certain insolvency or receivership events affecting our Company and its subsidiaries, the occurrence of certain material judgments, or a change in control of our Company. The letter of credit facility is secured by a pledge of the stock of certain insurance subsidiaries of our Company. To the extent, the aggregate face amount issued under the credit facility exceeds the commitment amount; our Company is required to post collateral with the lead bank of the consortium. Our Company was in compliance with all covenants under the credit facility as of December 31, 2014 and our Company had $1.0 million of cash collateral posted. | ||
The applicable fee rate payable under the credit facility are based on a tiered schedule that is based on our Company’s then-current financial strength ratings issued by S&P and A.M. Best and the amount of our Company’s own collateral utilized to fund its participation in Syndicate 1221. |
Senior_Notes
Senior Notes | 12 Months Ended | |
Dec. 31, 2014 | ||
Senior Notes | Note 9. | Senior Notes |
On October 4, 2013, our Company completed a public debt offering of $265 million principal amount of 5.75% Senior Notes (“5.75% Senior Notes”) and received net proceeds of $263 million. The Principal amount of the 5.75% Senior Notes is payable in one single installment on October 15, 2023. Our Company used a portion of the proceeds of the 5.75% Senior Notes for the redemption of the 7.0% Senior Notes due May 1, 2016 (“7.0% Senior Notes”). Our Company incurred a charge of $17.9 million for the payment of call premium in connection with the redemption of the 7.0% Senior Notes. The 5.75% Senior Notes Liability as of December 31, 2014 and 2013 was $263.4 million and $263.3 million, respectively. The unamortized discount as of December 31, 2014 and 2013 was $1.6 million and $1.7 million, respectively. | ||
The fair value of the 5.75% Senior Notes was $285.7 million and $277.6 million as of December 31, 2014 and December 31, 2013, respectively. The fair values were determined using quoted prices for similar instruments in active markets and is classified as Level 2 within the fair value hierarchy as defined by the accounting guidance for fair value measurements. | ||
Interest is payable on the 5.75% Senior Notes each April 15 and October 15. The effective interest rate related to the 5.75% Senior Notes, based on the proceeds net of discount and all issuance costs, approximates 5.86%. Interest expense on the 5.75% was $15.4 million for the year ended December 31, 2014. Interest expense on the 5.75% Senior Notes and 7.0% Senior Notes totaled $10.5 million for the year ended December 31, 2013. Interest expense on the 7.0% Senior Notes was $8.2 million for the year ended December 31, 2012. | ||
The interest rate payable on the 5.75% Senior Note is subject to a tiered adjustment based on defined changes in our Company’s debt ratings. Our Company may redeem the 5.75% Senior Notes in whole at any time or in part from time to time at a make-whole redemption price. The 5.75% Senior Notes are our Company’s only senior unsecured obligation and will rank equally with future senior unsecured indebtedness. | ||
The terms of the 5.75%, Senior Notes contain various restrictive business and financial covenants, including a restriction on indebtedness, and other restrictions typical for debt obligations of this type, including limitations on mergers, liens and dispositions of the common stock of certain subsidiaries. As of December 31, 2014, our Company was in compliance with all such covenants. |
Lloyds_Syndicate_1221
Lloyd's Syndicate 1221 | 12 Months Ended | |
Dec. 31, 2014 | ||
Lloyd's Syndicate 1221 | Note 10. | Lloyd’s Syndicate 1221 |
The Lloyd’s Operations included in the consolidated financial statements represents its participation in Syndicate 1221. Syndicate 1221’s stamp capacity is £215 million ($336.9 million) for the 2014 underwriting year compared to £195 million ($323.7 million) for the 2013 underwriting year. Stamp capacity is a measure of the amount of premiums a Lloyd’s syndicate is authorized to write based on a business plan approved by the Council of Lloyd’s. Syndicate 1221’s stamp capacity is expressed net of commission (as is standard at Lloyd’s). The Syndicate 1221 premiums recorded in our Company’s financial statements are gross of commission. Our Company controlled 100% of Syndicate 1221’s stamp capacity for the 2014, 2013 and 2012 underwriting years through its wholly-owned Lloyd’s corporate member. | ||
During the first quarter, Syndicate 1221 revised its foreign exchange accounting methodology from reporting its financial position and results using three functional currencies (GBP, USD and CAD) to one functional currency (USD). The USD was chosen as the single functional currency as the majority of the Syndicate’s insurance business has been and continues to be transacted in USD. This cumulative change in re-measurement has resulted in an immaterial correction of $10.0 million ($6.6 million, after-tax) reducing Accumulated Other Comprehensive Income in the consolidated balance sheet, offset by a gain in Other Income in the consolidated statement of income. The impact of the correction is not material to the previously issued annual financial statements for 2013 and 2012. | ||
Our Company provides letters of credit and posts cash to Lloyd’s to support its participation in Syndicate 1221’s stamp capacity. If Syndicate 1221 increases its stamp capacity and our Company participates in the additional stamp capacity, or if Lloyd’s changes the capital requirements, our Company may be required to supply additional collateral acceptable to Lloyd’s. If our Company is unwilling or unable to provide additional acceptable collateral, our Company will be required to reduce its participation in the stamp capacity of Syndicate 1221. Refer to Note 8, Credit Facilities, for additional information. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies | Note 11. | Commitments and Contingencies | |||
Future minimum annual rental commitments as of December 31, 2014 under various non-cancellable operating leases for our office facilities, which expire at various dates through 2023, are as follows: | |||||
Year Ended | |||||
In thousands | December 31, | ||||
2015 | $ | 11,245 | |||
2016 | 9,234 | ||||
2017 | 7,942 | ||||
2018 | 6,907 | ||||
2019 | 4,258 | ||||
Thereafter | 12,811 | ||||
Total minimum operating lease payments | $ | 52,397 | |||
We are also liable for additional payments to the landlords for certain annual cost increases. Rent expense for the years ended December 31, 2014, 2013 and 2012 was $13.2 million, $11.5 million and $10.5 million, respectively. | |||||
The State of Connecticut (“the State”) awarded our Company up to $11.5 million ($8.0 million in loans and $3.5 million in grants) as an incentive to move its corporate headquarters to Stamford Connecticut. The loan is non-interest bearing, has a term of 10 years and is subject to forgiveness under conditions of the agreement with the State. The amount of the assistance to be received is dependent on our Company reaching certain milestones for creation of new jobs over a five-year period, and the funds are to be used to offset certain equipment purchases, facility costs, training of employees and other eligible project-related costs. Our Company completed the move to Stamford in September 2013 and received $7.5 million for reaching the first job milestone. Earning of the grant and forgiveness of the loan is subject to certain conditions, including maintaining the required jobs for an extended period of time. As of December 31, 2014, the length of time commitment has not been met, however, our Company expects to meet all the conditions to keep the amount of assistance received to date, and accordingly, is recognizing the assistance received over the period in which our Company recognizes the expenses for which the assistance is intended to compensate, and is recognized as a reduction of such expenses. For the years ended December 31, 2014 and 2013, our Company recognized $1.1 million and $0.3 million of the assistance and as of December 31, 2014 has deferred revenue of $6.1 million, which is included in other liabilities. | |||||
In the ordinary course of conducting business, our Company’s subsidiaries are involved in various legal proceedings, either indirectly as insurers for parties or directly as defendants. Most of these proceedings consist of claims litigation involving our Company’s subsidiaries as either: (a) liability insurers defending or providing indemnity for third party claims brought against insureds or (b) insurers defending first party coverage claims brought against them. Our Company accounts for such activity through the establishment of unpaid loss and loss adjustment reserves. Our Company’s management believes that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and cost of defense, will not be material to our Company’s consolidated financial condition, results of operations, or cash flows. | |||||
Our Company’s subsidiaries are also occasionally involved with other legal actions, some of which assert claims for substantial amounts. These actions include claims asserting extra contractual obligations, such as claims involving allegations of bad faith in the handling of claims or the underwriting of policies. In general, our Company believes it has valid defenses to these cases. Our Company’s management expects that the ultimate liability, if any, with respect to future extra-contractual matters will not be material to its consolidated financial position. Nonetheless, given the large or indeterminate amounts sought in certain of these matters, and the inherent unpredictability of litigation, an adverse outcome in such matters could, from time to time, have a material adverse outcome on our Company’s consolidated results of operations or cash flows in a particular fiscal quarter or year. |
Share_Capital
Share Capital | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Share Capital | Note 12. | Share Capital | |||||||||||
Our authorized share capital consists of 50,000,000 common shares with a par value of $0.10 per share and 1,000,000 preferred shares with a par value of $0.10 per share. Our Company has not issued any preferred shares as of December 31, 2014. | |||||||||||||
The following table represents changes in our Company’s issued and outstanding common shares for the periods indicated: | |||||||||||||
Year Ended December 31, | |||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||
Beginning balance | 14,198 | 14,047 | 13,956 | ||||||||||
Vested stock grants | 59 | 50 | 60 | ||||||||||
Employee stock purchase plan | 19 | 17 | 16 | ||||||||||
Stock options exercised | 5 | 84 | 15 | ||||||||||
Treasury shares purchased | — | — | — | ||||||||||
Ending balance | 14,281 | 14,198 | 14,047 | ||||||||||
Dividends_and_Statutory_Financ
Dividends and Statutory Financial Information | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Dividends and Statutory Financial Information | Note 13. | Dividends and Statutory Financial Information | |||||||
The Parent Company has not paid or declared any cash dividends on common stock. There are no regulatory restrictions on the ability of the Parent Company to pay dividends. While there is no intention to pay cash dividends on the common stock, future declarations, if any, are at the discretion of our Board of Directors. The amounts of such dividends will be dependent, upon other factors such as, our results of operations and cash flow, financial condition and business needs, restrictive covenants under our credit facility and senior notes that require us to maintain certain consolidated tangible net worth, the capital and surplus requirements of our subsidiaries, and applicable insurance regulations that limit the amount of dividends that may be paid by our regulated insurance subsidiaries. Refer to Note 8, Credit Facilities, for additional information on the restrictions of our credit facilities that limit the amount of dividends that may be paid by our subsidiaries. | |||||||||
The amount and nature of net assets that are restricted from payment of dividends as of December 31, 2014 and 2013 are presented in the following table: | |||||||||
As of December 31, | |||||||||
In thousands | 2014 | 2013 | |||||||
Restricted Net Assets: | |||||||||
Insurance Companies: | |||||||||
Fixed maturities at fair value (amortized cost: 2014, $10,086; 2013, $9,730) | $ | 11,732 | $ | 11,105 | |||||
Short term investments, at cost which approximates fair value | 290 | 290 | |||||||
Cash | 1,212 | 1,210 | |||||||
Total Insurance Companies (1) | $ | 13,234 | $ | 12,605 | |||||
Lloyd’s Operations: | |||||||||
Fixed maturities at fair value (amortized cost: 2014, $445,504; 2013, $398,930) | 447,679 | 398,808 | |||||||
Short term investments, at cost which approximates fair value | 61,549 | 108,485 | |||||||
Cash | 963 | 988 | |||||||
Total Lloyd’s Operations (2) | $ | 510,191 | $ | 508,281 | |||||
Total Restricted Net Assets | $ | 523,425 | $ | 520,886 | |||||
(1) - The restricted net assets for the Insurance Companies primarily consist of fixed maturities on deposit with various state insurance departments. The cash as of December 31, 2014 and 2013, as presented in the table above, was on deposit with a U.K. bank to comply with the regulatory requirements of the Prudential Regulation Authority for the underwriting activities of the U.K. Branch. | |||||||||
(2) - The restricted net assets for the Lloyd’s Operations consists of fixed maturities and cash held in trust for the benefit of syndicate policyholders and short term investments primarily consisting of overseas deposits in various countries with Lloyd’s to support underwriting activities in those countries. | |||||||||
In addition to our Company’s restricted net assets provided in the table above, there are regulatory limitations on the payment of dividends by our subsidiaries, discussed below, and our Company’s letter of credit facility with ING Bank N.V., London Branch, as administrative agent, is secured by all of the common stock of NIC. | |||||||||
Insurance Companies | |||||||||
NIC may pay dividends to the Parent Company out of its statutory earned surplus pursuant to statutory restrictions imposed under the New York insurance law. As of December 31, 2014, the maximum amount available for the payment of dividends by NIC in 2015 without prior regulatory approval is $89.4 million. NIC did not pay any dividends to the Parent Company in 2014 or 2013. In 2012, NIC paid $15.0 million in dividends to the Parent Company. | |||||||||
The Insurance Companies’ statutory net income as filed with the regulatory authorities for 2014, 2013 and 2012 was $75.7 million, $59.4 million and $28.6 million, respectively. The statutory capital and surplus as filed with the regulatory authorities was $893.9 million and $804.1 million as of December 31, 2014 and 2013, respectively. | |||||||||
The NAIC has codified Statutory Accounting Practices and Procedures (“SAP”) for insurance enterprises. We prepare our statutory basis financial statements in accordance with the most recently updated SAP manual subject to any deviations prescribed or permitted by the New York Insurance Commissioner. The significant differences between SAP and GAAP, as they relate to our operations, are as follows: (1) acquisition and commission costs are expensed when incurred, while under GAAP these costs are deferred and amortized as the related premium is earned; (2) bonds are stated at amortized cost, while under GAAP bonds are classified as available-for-sale and reported at fair value, with unrealized gains and losses recognized in other comprehensive income as a separate component of stockholders’ equity; (3) certain deferred tax assets are not permitted to be included in statutory surplus, while under GAAP deferred taxes are provided to reflect all temporary differences between the carrying values and tax basis of assets and liabilities; (4) unearned premiums and loss reserves are reflected net of ceded amounts, while under GAAP the unearned premiums and loss reserves are reflected gross of ceded amounts; (5) agents’ balances over ninety days due are excluded from the balance sheet, and uncollateralized amounts due from unauthorized reinsurers are deducted from surplus, while under GAAP they are restored to the balance sheet, subject to the usual tests regarding recoverability. | |||||||||
The NAIC has adopted Risked Based Capital (“RBC”) requirements to elevate the adequacy of statutory capital and surplus in relation to risks associated with: (1) asset risk; (2) insurance risk; (3) interest rate and equity market risk; and (4) business risk. The RBC formula is designated as an early warning tool for the states to identify possible undercapitalized companies for the purpose of initiating regulatory action. In the course of operations, we periodically monitor the RBC level of NIC. As of December 31, 2014 and 2013, NIC exceeded our company action RBC levels. The RBC ratio of NIC was 314.8% and 304.2% of our company action level as of December 31, 2014 and 2013, respectively. | |||||||||
As part of its general regulatory oversight process, the New York State Department of Finance conducts detailed examinations of the books, records and accounts of New York insurance companies every three to five years. In 2011, the New York State Department of Finance conducted an examination of NIC and NSIC for the years 2005 through 2009. Our Company has received notice that the New York Department intends to commence an examination of the years 2010 through 2014 on February 17, 2015. | |||||||||
The U.K. Branch is required to maintain certain capital requirements under U.K. regulations and is subject to examination by the U.K. Prudential Regulation Authority (PRA). | |||||||||
Lloyd’s Operations | |||||||||
Lloyd’s sets the corporate member’s required capital annually based on Syndicate 1221’s business plans, rating environment, reserving environment and input arising from Lloyd’s discussions with regulatory and rating agencies. The capital requirement of Syndicate 1221, known as Funds at Lloyd’s (the “FAL”), is currently calculated using the internal Lloyd’s risk-based capital model. The FAL may comprise cash, investments and undrawn letters of credit provided by various banks. As of December 31, 2014 and 2013, the FAL requirement set by Lloyd’s for Syndicate 1221 was $268.1 million (£171.1 million) and $279.3 million (£168.3 million), respectively, based on its business plans, approved in November 2014 and November 2013, respectively. | |||||||||
The valuation of the assets and letters of credit posted for FAL for Syndicate 1221 as of December 31, 2014 and 2013 was $290.1 million (£185.1 million) and $280.2 million (£168.8 million), respectively. | |||||||||
We prepare our Lloyd’s financial statements in accordance with U.K. GAAP basis. The significant differences between U.K. GAAP and U.S. GAAP, as they relate to our operations, are as follows: (1) investments are recorded at fair value with unrealized gains and losses being recorded in income while under U.S. GAAP the changes in unrealized gains and losses are recorded through AOCI as a separate component of stockholders’ equity; (2) realized foreign exchange on inter-currency conversions are recorded through the income statement, while under U.S. GAAP foreign exchange translation is recorded through AOCI as a separate component of stockholders’ equity; (3) Lloyd’s membership costs are not deferred for U.K. GAAP, while under U.S. GAAP a prepaid asset is established and amortized over each year of account. | |||||||||
The primary source of income for NCUL, a corporate member of Lloyd’s and controller of 100% of Syndicate 1221’s stamp capacity, is generated through Syndicate 1221. Syndicate 1221 is subject to oversight by the Council of Lloyd’s. Lloyd’s as a whole is authorized and regulated by the PRA. Syndicate 1221’s income as filed with Lloyd’s for 2014, 2013 and 2012 was $33.8 million, $21.0 million and $54.9 million, respectively. The Syndicate’s capital and surplus as filed with Lloyd’s was $140.1 million (£89.4 million) and $124.2 million (£74.8 million) as of December 31, 2014 and 2013, respectively. The difference between our Syndicate’s capital and surplus and the FAL primarily consists of letters of credit and cash held by our corporate member. | |||||||||
NCUL may pay dividends to the Parent Company up to the extent of available profits that have been distributed from Syndicate 1221. The Syndicate’s capital and surplus as filed with Lloyd’s consists of undistributed profits on closed and open years of account. In connection with the business plan approved in November 2014, NCUL posted all of the available undistributed profits on closed years of $139.9 million (£89.3 million) to support a portion of the FAL requirement and therefore that amount is not available for distribution to NCUL, which ultimately is not available to the Parent in the form of a dividend. As of December 31, 2014, NCUL has the ability to pay dividends of up to $9.9 million (£6.3 million), consisting of previously distributed profits from Syndicate 1221, to the Parent in the form of dividends. | |||||||||
Refer to Note 1, Organization and Summary of Significant Accounting Policies, for additional disclosure on the accounting treatment for Syndicate 1221 as it relates to closed and open years of account. |
Stock_Option_Plans_Stock_Grant
Stock Option Plans, Stock Grants, Stock Appreciation Rights and Employee Stock Purchase Plan | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Stock Option Plans, Stock Grants, Stock Appreciation Rights and Employee Stock Purchase Plan | Note 14. | Stock Option Plans, Stock Grants, Stock Appreciation Rights and Employee Stock Purchase Plan | |||||||||||||||||||||||||||
At our May 2005 Annual Meeting, the stockholders approved the 2005 Stock Incentive Plan. The 2005 Stock Incentive Plan authorizes the issuance in the aggregate of 1,000,000 incentive stock options, non-incentive stock options, restricted shares and stock appreciation rights for our common stock. Upon the approval of the 2005 Amended and Restated Stock Incentive Plan, no further awards are being issued under any of our other stock plans or the stock appreciation rights plan. All stock options issued under the 2005 Amended and Restated Stock Incentive Plan are exercisable upon vesting for one share of our common stock and are granted at exercise prices no less than the fair market value of our common stock on the date of grant. | |||||||||||||||||||||||||||||
In April 2009, the stockholders approved an amendment to the 2005 Stock Incentive Plan increasing the available number of restricted shares from 1,000,000 to 1,500,000. In April 2013, the stockholders further amended and restated the 2005 Stock Incentive Plan increasing the available number of restricted shares from 1,500,000 to 2,000,000. As of December 31, 2014, 1,523,228 of such awards were issued leaving 476,772 awards available to be issued in subsequent periods. | |||||||||||||||||||||||||||||
Stock-based compensation granted under our Company’s stock plans is expensed in tranches over the vesting period. Options and non-performance based grants generally vest equally over a three or four year period and the options have a maximum term of ten years. Certain non-performance based grants vest over five years with one-third vesting in each of the third, fourth and fifth years. Our Company’s performance based share grants generally consist of three types of awards. The restricted stock units issued in 2014 and after will cliff vest on the third anniversary of the date of the grant with 100% dependent on the rate of cumulative annual growth in tangible book value for the three years immediately prior to the vesting date, with actual shares that vest ranging between 150% to 50% of that portion of the original award. The restricted stock units issued between 2011 – 2013 will cliff vest on the third anniversary of the date of grant, with 50% vesting in full, and 50% dependent on the rate of compound annual growth in book value per share for the three years immediately prior to the vesting date, with actual shares that vest ranging between 150% to 0% of that portion of the original award. The performance based restricted stock units issued prior to 2011 generally vest over five years with one-third vesting in each of the third, fourth and fifth years, with 100% dependent on the rolling three-year average return on equity based on the three years prior to the year in which the vesting occurs, with actual shares that vest ranging between 150% to 0% of the original award. | |||||||||||||||||||||||||||||
The amounts charged to expense for stock-based compensation for the years ended December 31, 2014, 2013 and 2012 are presented in the following table: | |||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||
Restricted stock units | $ | 11,507 | $ | 3,369 | $ | 7,380 | |||||||||||||||||||||||
Directors restricted stock grants (1) | 420 | 413 | 390 | ||||||||||||||||||||||||||
Employee stock purchase plan | 194 | 132 | 82 | ||||||||||||||||||||||||||
Total stock-based compensation | $ | 12,121 | $ | 3,914 | $ | 7,852 | |||||||||||||||||||||||
(1) - | Relates to non-employee directors serving on the Parent Company’s Board of Directors, all of whom have been elected by the Company’s stockholders, as well as non-employee directors serving on NUAL’s Board of Directors. | ||||||||||||||||||||||||||||
Unvested restricted stock units outstanding as of December 31, 2014, 2013 and 2012, and changes during the years ended on those dates, are presented in the following table: | |||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||||
Beginning balance | 626,812 | 587,629 | 526,972 | ||||||||||||||||||||||||||
Granted - Performance | 228,607 | 114,463 | 97,145 | ||||||||||||||||||||||||||
Granted - Non Performance | 59,523 | 155,463 | 146,915 | ||||||||||||||||||||||||||
Total Granted | 288,130 | 269,926 | 244,060 | ||||||||||||||||||||||||||
Vested - Performance Earned | — | (15,714 | ) | — | |||||||||||||||||||||||||
Vested - Performance Unearned | (93,453 | ) | (57,585 | ) | (46,998 | ) | |||||||||||||||||||||||
Vested - Non Performance | (90,263 | ) | (60,183 | ) | (91,323 | ) | |||||||||||||||||||||||
Total Vested | (183,716 | ) | (133,482 | ) | (138,321 | ) | |||||||||||||||||||||||
Forfeited | (12,334 | ) | (97,261 | ) | (45,082 | ) | |||||||||||||||||||||||
Ending balance | 718,892 | 626,812 | 587,629 | ||||||||||||||||||||||||||
As included in the table above, there were 15,714 performance based shares that vested during the year ended December 31, 2013. There were no performance based shares that vested during the years ended December 31, 2014 and 2012. | |||||||||||||||||||||||||||||
The fair value of total vested shares for the years ended December 31, 2014, 2013 and 2012 was $5.1 million, $3.5 million and $4.6 million, respectively. | |||||||||||||||||||||||||||||
The weighted average grant date fair value per share of all RSUs granted during the years ended December 31, 2014, 2013 and 2012 was $60.75, $55.36 and $48.21, respectively. | |||||||||||||||||||||||||||||
As of December 31, 2014 and 2013, the total unrecognized compensation expense, net of estimated forfeitures, related to unvested RSUs was $16.3 million and $10.6 million, respectively, which is expected to be recognized as expense over weighted average periods of 2.3 years and 2.2 years, respectively. The aggregate fair value of all unvested RSUs as of December 31, 2014 and 2013 was $46.1 million and $39.6 million, respectively. | |||||||||||||||||||||||||||||
Stock options outstanding as of December 31, 2014, 2013 and 2012 are as follows: | |||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||||
# of Shares | Average | # of Shares | Average | # of Shares | Average | ||||||||||||||||||||||||
Exercise Price | Exercise Price | Exercise Price | |||||||||||||||||||||||||||
Beginning balance | 6,750 | $ | 30.65 | 90,250 | $ | 29.94 | 105,250 | $ | 29.5 | ||||||||||||||||||||
Granted | — | — | — | — | — | — | |||||||||||||||||||||||
Exercised | (5,250 | ) | $ | 29.11 | (83,500 | ) | $ | 29.88 | (15,000 | ) | $ | 26.9 | |||||||||||||||||
Expired or forfeited | — | — | — | — | — | $ | — | ||||||||||||||||||||||
Ending balance | 1,500 | $ | 36.03 | 6,750 | $ | 30.65 | 90,250 | $ | 29.94 | ||||||||||||||||||||
Number of options exercisable | 1,500 | $ | 36.03 | 6,750 | $ | 30.65 | 90,250 | $ | 29.94 | ||||||||||||||||||||
The following table summarizes information about stock options outstanding as of December 31, 2014: | |||||||||||||||||||||||||||||
Price Range | Outstanding | Average | Average | Average Aggregate | Exercisable | Average | Average Aggregate | ||||||||||||||||||||||
Options | Remaining | Exercise Price | Intrinsic Value | Options | Exercise Price | Intrinsic Value | |||||||||||||||||||||||
Contract Life | |||||||||||||||||||||||||||||
$31 to $37 | 1,500 | 0.7 | $ | 36.03 | $ | 27.13 | 1,500 | $ | 36.03 | $ | 27.13 | ||||||||||||||||||
Total | 1,500 | 0.7 | 1,500 | ||||||||||||||||||||||||||
We offer an Employee Stock Purchase Plan (the “ESPP”) to all of our eligible employees. Employees are offered the opportunity to purchase our Company’s common stock at 90% of fair market value at the lower of the price at the beginning or the end of each six month offering period. Employees can invest up to 10% of their base compensation through payroll withholding towards the purchase of our common stock subject to the lesser of 1,000 shares or total market value of $25,000. There will be 9,509 shares purchased in 2015 from funds withheld during the July 1, 2014 to December 31, 2014 offering period. There were 19,386 shares purchased in 2014 in the aggregate from funds withheld during the offering periods of July 1, 2013 to December 31, 2013 and January 1, 2014 to June 30, 2014. We expense both the value of the 10% discount and the “look-back” option, which provides for the more favorable price at either the beginning or end of the offering period. |
Retirement_Plans
Retirement Plans | 12 Months Ended | |
Dec. 31, 2014 | ||
Retirement Plans | Note 15. | Retirement Plans |
We have a 401(k) Plan for all U.S. eligible employees. Each eligible employee can contribute a portion of their salary, limited by certain Federal regulations. Beginning in 2008, we matched 100% of employee contributions on eligible compensation, up to a maximum of 4% each pay period; our contribution vests immediately. Eligible compensation consisted of gross base salary and annual bonus. In addition, we have the discretion of contributing up to 4% of eligible compensation to each eligible employee’s 401(k) plan irrespective of the employees’ contribution amount, which also vests immediately. Our Company will make a discretionary matching contribution of 3% or $1.6 million for the year ended December 31, 2014. Our Company made a discretionary matching contribution of 2% or $0.8 million for the year ended December 31, 2013. There was no discretionary matching contributions for the year ended 2012. | ||
We sponsored a standalone retirement savings defined contribution plan covering substantially all of our Company’s U.S. employees through December 31, 2011. The standalone retirement savings defined contribution plan was merged into the 401(k) Plan effective January 1, 2012. Company contributions were equal to 7.5% of each eligible employee’s eligible compensation up to the amount permitted by certain Federal regulations. For 2014, 2013 and 2012 eligible compensation consisted solely of gross base salary. Our Company’s contributions vest at 20% per year for six years with vesting beginning in an employee’s second year of service. For any employee hired prior to January 1, 2008, vesting is calculated based on hours of service and vesting commences on January 1 following an employee’s first full year of service. For employees hired after January 1, 2008, vesting is calculated based on elapsed time and vesting commences on the employees anniversary date. | ||
The expense recorded for all contributions to the 401(k) Plan for the year ended December 31, 2014 was $7.5 million, consisting of $3.8 million for the retirement savings contributions, $2.1 million for the non-discretionary matching contributions, and $1.6 million for the discretionary matching contribution. The expense recorded for all contributions to the 401(k) Plan for the year ended December 31, 2013 was $5.1 million, consisting of $2.7 million for the retirement savings contributions, $1.6 million for the non-discretionary matching contributions, and $0.8 million for the discretionary matching contribution. The expense recorded for all contributions to the 401(k) Plan for the year ended December 31, 2012 was $4.6 million, consisting of $2.5 million for the retirement savings contributions and $2.1 million for the non-discretionary matching contributions. | ||
Our Company sponsors a defined contribution plan for our Company’s U.K. employees under U.K. regulations. Contributions, which are fully vested when made, are equal to 15% of each eligible employee’s gross base salary for all U.K. employees hired prior to November 2014 and 12% for all employees hired after November 2014. All U.K. employees are eligible on their date of hire. The expense recorded for the U.K. defined contribution plan was $2.6 million, $2.2 million and $1.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. Such expenses are included in Other operating expenses. |
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Data (Unaudited) | Note 16. | Quarterly Financial Data (Unaudited) | |||||||||||||||
The following is a summary of quarterly financial data for the periods indicated: | |||||||||||||||||
In thousands, except per share amounts | March 31, | June 30, | September 30, | December 31, | |||||||||||||
2014 | 2014 | 2014 | 2014 | ||||||||||||||
Gross written premiums | $ | 422,790 | $ | 348,795 | $ | 327,469 | $ | 333,299 | |||||||||
Revenues: | |||||||||||||||||
Net written premiums | $ | 311,850 | $ | 231,864 | $ | 228,417 | $ | 228,007 | |||||||||
Change in unearned premiums | (86,578 | ) | (780 | ) | 16,950 | 6,165 | |||||||||||
Net earned premiums | 225,272 | 231,084 | 245,367 | 234,172 | |||||||||||||
Net investment income | 16,610 | 15,648 | 15,839 | 16,071 | |||||||||||||
Total other-than-temporary impairment losses | — | 158 | (21 | ) | |||||||||||||
Portion of loss recognized in other comprehensive income (before tax) | — | — | (158 | ) | 21 | ||||||||||||
Net other-than-temporary impairment losses recognized in earnings | — | — | — | ||||||||||||||
Net realized gains (losses) | 833 | 4,473 | 6,718 | 788 | |||||||||||||
Other income (expense) | 10,399 | (1,665 | ) | 1,336 | 586 | ||||||||||||
Total revenues | $ | 253,114 | $ | 249,540 | $ | 269,260 | $ | 251,617 | |||||||||
Expenses: | |||||||||||||||||
Net losses and loss adjustment expenses | $ | 135,067 | $ | 140,220 | $ | 135,284 | $ | 134,658 | |||||||||
Commission expenses | 25,727 | 32,150 | 33,943 | 33,708 | |||||||||||||
Other operating expenses | 47,146 | 47,992 | 50,388 | 51,299 | |||||||||||||
Call premium on Senior Notes | — | — | — | ||||||||||||||
Interest expense | 3,852 | 4,319 | 3,388 | 3,854 | |||||||||||||
Total expenses | $ | 211,792 | $ | 224,681 | $ | 223,003 | $ | 223,519 | |||||||||
Income before income taxes | 41,322 | 24,859 | 46,257 | 28,098 | |||||||||||||
Income tax expense | $ | 13,354 | $ | 7,998 | $ | 15,032 | $ | 8,823 | |||||||||
Net income | $ | 27,968 | $ | 16,861 | $ | 31,225 | $ | 19,275 | |||||||||
Comprehensive income (loss) | $ | 32,920 | $ | 32,965 | $ | 20,628 | $ | 27,015 | |||||||||
Combined ratio | 92.2 | % | 95.3 | % | 89.5 | % | 93.8 | % | |||||||||
Net income (loss) per share: | |||||||||||||||||
Basic | $ | 1.96 | $ | 1.18 | $ | 2.19 | $ | 1.35 | |||||||||
Diluted | $ | 1.94 | $ | 1.17 | $ | 2.14 | $ | 1.31 | |||||||||
In thousands, except per share amounts | March 31, | June 30, | September 30, | December 31, | |||||||||||||
2013 | 2013 | 2013 | 2013 | ||||||||||||||
Gross written premiums | $ | 393,222 | $ | 332,128 | $ | 312,076 | $ | 333,091 | |||||||||
Revenues: | |||||||||||||||||
Net written premiums | $ | 269,452 | $ | 198,469 | $ | 196,556 | $ | 223,445 | |||||||||
Change in unearned premiums | (67,124 | ) | 7,345 | 17,339 | (3,543 | ) | |||||||||||
Net earned premiums | 202,328 | 205,814 | 213,895 | 219,902 | |||||||||||||
Net investment income | 13,657 | 14,246 | 14,094 | 14,254 | |||||||||||||
Total other-than-temporary impairment losses | (42 | ) | — | (1,821 | ) | (530 | ) | ||||||||||
Portion of loss recognized in other comprehensive income (before tax) | — | — | — | — | |||||||||||||
Net other-than-temporary impairment losses recognized in earnings | (42 | ) | — | (1,821 | ) | (530 | ) | ||||||||||
Net realized gains | 4,814 | 3,345 | (988 | ) | 15,768 | ||||||||||||
Other income (expense) | 618 | (915 | ) | (210 | ) | (665 | ) | ||||||||||
Total revenues | $ | 221,375 | $ | 222,490 | $ | 224,970 | $ | 248,729 | |||||||||
Expenses: | |||||||||||||||||
Net losses and loss adjustment expenses | $ | 131,342 | $ | 131,148 | $ | 125,086 | $ | 131,385 | |||||||||
Commission expenses | 26,555 | 28,391 | 27,685 | 30,863 | |||||||||||||
Other operating expenses | 40,874 | 40,678 | 39,056 | 43,826 | |||||||||||||
Call premium on Senior Notes | — | — | — | 17,895 | |||||||||||||
Interest expense | 2,051 | 2,052 | 2,053 | 4,351 | |||||||||||||
Total expenses | $ | 200,822 | $ | 202,269 | $ | 193,880 | $ | 228,320 | |||||||||
Income before income taxes | 20,553 | 20,221 | 31,090 | 20,409 | |||||||||||||
Income tax expense | $ | 6,643 | $ | 6,284 | $ | 9,804 | $ | 6,076 | |||||||||
Net income | $ | 13,910 | $ | 13,937 | $ | 21,286 | $ | 14,333 | |||||||||
Comprehensive income | $ | 14,785 | $ | (24,829 | ) | $ | 25,462 | $ | 1,200 | ||||||||
Combined ratio | 97.9 | % | 97.7 | % | 89.8 | % | 94 | % | |||||||||
Net income per share: | |||||||||||||||||
Basic | $ | 0.99 | $ | 0.99 | $ | 1.5 | $ | 1.01 | |||||||||
Diluted | $ | 0.97 | $ | 0.97 | $ | 1.48 | $ | 1 |
Summary_of_Consolidated_Invest
Summary of Consolidated Investments-Other Than Investments in Related Parties | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary of Consolidated Investments-Other Than Investments in Related Parties | SCHEDULE I | ||||||||||||||||
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES | |||||||||||||||||
Summary of Consolidated Investments-Other Than Investments in Related Parties | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
In thousands | Fair Value | Gross | Gross | Amortized | |||||||||||||
Unrealized | Unrealized | Cost | |||||||||||||||
Gains | Losses | ||||||||||||||||
Fixed maturities: | |||||||||||||||||
U.S. Treasury bonds, agency bonds and foreign government bonds | $ | 397,923 | $ | 3,431 | $ | (5,965 | ) | $ | 400,457 | ||||||||
States, municipalities and political subdivisions | 541,007 | 19,204 | (558 | ) | 522,361 | ||||||||||||
Mortgage-backed and asset-backed securities: | |||||||||||||||||
Agency mortgage-backed securities | 364,622 | 8,476 | (998 | ) | 357,144 | ||||||||||||
Residential mortgage obligations | 34,087 | 1,153 | (138 | ) | 33,072 | ||||||||||||
Asset-backed securities | 206,413 | 380 | (964 | ) | 206,997 | ||||||||||||
Commercial mortgage-backed securities | 206,318 | 6,630 | (98 | ) | 199,786 | ||||||||||||
Subtotal | $ | 811,440 | $ | 16,639 | $ | (2,198 | ) | $ | 796,999 | ||||||||
Corporate bonds | 615,564 | 13,048 | (1,626 | ) | 604,142 | ||||||||||||
Total fixed maturities | $ | 2,365,934 | $ | 52,322 | $ | (10,347 | ) | $ | 2,323,959 | ||||||||
Equity securities - common stocks | 127,183 | 28,520 | (1,254 | ) | 99,917 | ||||||||||||
Equity securities - preferred stocks | 57,112 | 2,236 | (50 | ) | 54,926 | ||||||||||||
Short-term investments | 179,506 | — | (21 | ) | 179,527 | ||||||||||||
Cash | 90,751 | — | — | 90,751 | |||||||||||||
Total | $ | 2,820,486 | $ | 83,078 | $ | (11,672 | ) | $ | 2,749,080 | ||||||||
Condensed_Financial_Informatio
Condensed Financial Information of Registrant | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Condensed Financial Information of Registrant | SCHEDULE II | ||||||||||||
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES | |||||||||||||
Condensed Financial Information of Registrant | |||||||||||||
The Navigators Group, Inc. | |||||||||||||
Balance Sheets | |||||||||||||
(Parent Company) | |||||||||||||
(In thousands, except share amounts) | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
ASSETS | |||||||||||||
Cash and investments | $ | 101,032 | $ | 100,676 | |||||||||
Investments in subsidiaries | 1,163,822 | 1,040,214 | |||||||||||
Goodwill and other intangible assets | 2,534 | 2,534 | |||||||||||
Other assets | 27,531 | 26,538 | |||||||||||
Total assets | $ | 1,294,919 | $ | 1,169,962 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||
Liabilities: | |||||||||||||
Senior Notes | $ | 263,440 | $ | 263,308 | |||||||||
Accounts payable and other liabilities | 1,081 | 802 | |||||||||||
Accrued interest payable | 3,174 | 3,640 | |||||||||||
Total liabilities | $ | 267,695 | $ | 267,750 | |||||||||
Stockholders’ Equity: | |||||||||||||
Preferred stock, $.10 par value, authorized 1,000,000 shares, none issued | $ | — | $ | — | |||||||||
Common stock, $.10 par value, authorized 50,000,000 shares, issued 17,792,846 shares for 2014 and 17,709,876 shares for 2013 | 1,778 | 1,770 | |||||||||||
Additional paid-in capital | 347,022 | 335,546 | |||||||||||
Treasury stock, at cost (3,511,380 shares for 2014 and 2013) | (155,801 | ) | (155,801 | ) | |||||||||
Retained earnings | 787,666 | 692,337 | |||||||||||
Accumulated other comprehensive income: | |||||||||||||
Net unrealized gains (losses) on securities available-for-sale, net of tax | 46,573 | 23,387 | |||||||||||
Foreign currency translation adjustment, net of tax | (14 | ) | 4,973 | ||||||||||
Total stockholders’ equity | $ | 1,027,224 | $ | 902,212 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,294,919 | $ | 1,169,962 | |||||||||
The Navigators Group, Inc. | |||||||||||||
Statements of Income | |||||||||||||
(Parent Company) | |||||||||||||
(In thousands) | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Revenues: | |||||||||||||
Net investment income | $ | 76 | $ | 13 | $ | 341 | |||||||
Dividends received from wholly-owned subsidiaries | — | — | 15,000 | ||||||||||
Total revenues | $ | 76 | $ | 13 | $ | 15,341 | |||||||
Expenses: | |||||||||||||
Call premium on Senior Notes | $ | — | $ | 17,895 | $ | — | |||||||
Interest expense | 15,413 | 10,507 | 8,198 | ||||||||||
Other (income) expense | — | 2 | 1,749 | ||||||||||
Total expenses | $ | 15,413 | $ | 28,404 | $ | 9,947 | |||||||
Income (loss) before income tax benefit | $ | (15,337 | ) | $ | (28,391 | ) | $ | 5,394 | |||||
Income tax benefit | (5,287 | ) | (9,886 | ) | (3,332 | ) | |||||||
Income (loss) before equity in undistributed net income of wholly owned subsidiaries | $ | (10,050 | ) | $ | (18,505 | ) | $ | 8,726 | |||||
Equity in undistributed net income of wholly-owned subsidiaries | 105,379 | 81,971 | 55,036 | ||||||||||
Net income | $ | 95,329 | $ | 63,466 | $ | 63,762 | |||||||
The Navigators Group, Inc. | |||||||||||||
Statements of Cash Flows | |||||||||||||
(Parent Company) | |||||||||||||
(In thousands) | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Operating activities: | |||||||||||||
Net income | $ | 95,329 | $ | 63,466 | $ | 63,762 | |||||||
Adjustments to reconcile net income to net cash provided by (used in) operations: | |||||||||||||
Equity in undistributed net income of wholly-owned subsidiaries | (105,379 | ) | (81,971 | ) | (70,036 | ) | |||||||
Dividends received from subsidiaries | — | — | 15,000 | ||||||||||
Call premium on redemption of Senior Notes | — | 17,895 | — | ||||||||||
Other | 9,211 | 2,098 | (3,265 | ) | |||||||||
Net cash provided by (used in) operating activities | $ | (839 | ) | $ | 1,488 | $ | 5,461 | ||||||
Investing activities: | |||||||||||||
Fixed maturities, available-for-sale | |||||||||||||
Sales | $ | 3,200 | $ | 8,754 | $ | 7,986 | |||||||
Purchases | — | (1,249 | ) | (14,700 | ) | ||||||||
Equity securities | |||||||||||||
Sales | — | — | — | ||||||||||
Purchases | — | — | — | ||||||||||
Net increase in short-term investments | (3,424 | ) | (89,988 | ) | (167 | ) | |||||||
Net cash provided by (used in) investing activities | $ | (224 | ) | $ | (82,483 | ) | $ | (6,881 | ) | ||||
Financing activities: | |||||||||||||
Capital contribution to subsidiary | $ | — | $ | (50,000 | ) | $ | — | ||||||
Net Proceeds from Debt Offering | — | 263,278 | — | ||||||||||
Redemption of 7.0% Senior Notes Due May 1, 2016 | — | (132,437 | ) | — | |||||||||
Purchase of treasury stock | — | — | — | ||||||||||
Proceeds of stock issued from employee stock purchase plan | 1,067 | 821 | 672 | ||||||||||
Proceeds of stock issued from exercise of stock options | 153 | 2,495 | 404 | ||||||||||
Net cash provided by (used in) financing activities | $ | 1,220 | $ | 84,157 | $ | 1,076 | |||||||
Increase (decrease) in cash | $ | 157 | $ | 3,162 | $ | (344 | ) | ||||||
Cash at beginning of year | 6,143 | 2,981 | 3,325 | ||||||||||
Cash at end of year | $ | 6,300 | $ | 6,143 | $ | 2,981 | |||||||
Supplementary_Insurance_Inform
Supplementary Insurance Information | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||||||||||
Supplementary Insurance Information | SCHEDULE III | ||||||||||||||||||||||||||||||||||||||||
In thousands | Deferred | Reserve | Unearned | Other policy | Net | Net | Losses | Amortization | Other | Net | |||||||||||||||||||||||||||||||
policy | for losses | Premiums | claims and | earned | investment | and loss | of deferred | operating | written | ||||||||||||||||||||||||||||||||
acquisition | and loss | benefits | premiums | income (1) | adjustment | policy | expenses (1) | premiums | |||||||||||||||||||||||||||||||||
costs | adjustment | payable | expenses | acquisition | |||||||||||||||||||||||||||||||||||||
expenses | incurred | costs (2) | |||||||||||||||||||||||||||||||||||||||
Year ended December 31, 2014 | |||||||||||||||||||||||||||||||||||||||||
Insurance Companies | $ | 63,200 | $ | 1,645,984 | $ | 579,331 | $ | — | $ | 704,574 | $ | 56,714 | $ | 434,396 | $ | 85,137 | $ | 138,675 | $ | 752,773 | |||||||||||||||||||||
Lloyd’s Operations | 16,252 | 513,650 | 186,836 | — | 231,321 | 7,378 | 110,833 | 42,558 | 58,150 | 247,365 | |||||||||||||||||||||||||||||||
$ | 79,452 | $ | 2,159,634 | $ | 766,167 | $ | — | $ | 935,895 | $ | 64,092 | 545,229 | $ | 127,695 | 196,825 | 1,000,138 | |||||||||||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||||||||||||||||||||||
Insurance Companies | $ | 54,984 | $ | 1,523,175 | $ | 536,303 | $ | — | $ | 639,338 | $ | 49,083 | $ | 415,413 | $ | 81,132 | $ | 119,920 | $ | 680,008 | |||||||||||||||||||||
Lloyd’s Operations | 12,023 | 521,896 | 178,303 | — | 202,601 | 7,160 | 103,548 | 34,710 | 44,514 | 207,914 | |||||||||||||||||||||||||||||||
$ | 67,007 | $ | 2,045,071 | $ | 714,606 | $ | — | $ | 841,939 | $ | 56,243 | $ | 518,961 | $ | 115,842 | $ | 164,434 | $ | 887,922 | ||||||||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||||||||||||||||||||||
Insurance Companies | $ | 48,294 | $ | 1,567,045 | $ | 470,425 | $ | — | $ | 571,439 | $ | 46,549 | $ | 417,082 | $ | 81,370 | $ | 113,625 | $ | 622,956 | |||||||||||||||||||||
Lloyd’s Operations | 12,711 | 530,003 | 171,982 | — | 210,525 | 7,551 | 80,351 | 42,449 | 45,454 | 210,699 | |||||||||||||||||||||||||||||||
$ | 61,005 | $ | 2,097,048 | $ | 642,407 | $ | — | $ | 781,964 | $ | 54,100 | $ | 497,433 | $ | 123,819 | $ | 159,079 | $ | 833,655 | ||||||||||||||||||||||
(1) - Net investment income and Other operating expenses reflect only such amounts attributable to the Company’s insurance operations. | |||||||||||||||||||||||||||||||||||||||||
(2) - Amortization of deferred policy acquisition costs reflects only such amounts attributable to the Company’s insurance operations. A portion of these costs is eliminated in consolidation. |
Reinsurance_Written_Premium
Reinsurance - Written Premium | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Reinsurance - Written Premium | SCHEDULE IV | ||||||||||||||||||||
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES | |||||||||||||||||||||
Reinsurance - Written Premium | |||||||||||||||||||||
In thousands | Direct | Ceded to | Assumed | Net amount | Percentage of | ||||||||||||||||
Amount | other | from other | amount | ||||||||||||||||||
companies | companies | assumed to net | |||||||||||||||||||
Year ended December 31, 2014 | |||||||||||||||||||||
Property-Casualty | $ | 1,184,538 | $ | 432,214 | $ | 247,814 | $ | 1,000,138 | 25 | % | |||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||
Property-Casualty | $ | 1,127,331 | $ | 482,596 | $ | 243,187 | $ | 887,922 | 27 | % | |||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||
Property-Casualty | $ | 1,034,658 | $ | 452,810 | $ | 251,807 | $ | 833,655 | 30 | % | |||||||||||
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Valuation and Qualifying Accounts | SCHEDULE V | ||||||||||||||||||||
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES | |||||||||||||||||||||
Valuation and Qualifying Accounts | |||||||||||||||||||||
In thousands | Balance at | Charged (Credited) to | Charged to | Deductions | Balance at | ||||||||||||||||
January 1, 2014 | Costs and Expenses | Other Accounts | (Describe) | December 31, 2014 | |||||||||||||||||
Description: | |||||||||||||||||||||
Allowance for uncollectable reinsurance | $ | 11,332 | $ | — | $ | — | $ | — | $ | 11,332 | |||||||||||
Valuation allowance in deferred taxes | $ | 554 | $ | 222 | $ | — | $ | — | $ | 776 | |||||||||||
Supplementary_Information_Conc
Supplementary Information Concerning Property-Casualty Insurance Operations | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||||||||||||||
Supplementary Information Concerning Property-Casualty Insurance Operations | SCHEDULE VI | ||||||||||||||||||||||||||||||||||||||||||||
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||||||||||
Supplementary Information Concerning Property-Casualty Insurance Operations | |||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||||||||||||||||||||||||
Affiliation with | Deferred | Reserve | Discount, | Unearned | Net | Net | Amortization | Other | Net | ||||||||||||||||||||||||||||||||||||
Registrant | policy | for losses | if any, | premiums | earned | investment | Losses and loss adjustment | of deferred | operating | written | |||||||||||||||||||||||||||||||||||
acquisition | and loss | deducted | premiums | income (1) | expenses incurred related to | Policy | expenses (1) | premiums | |||||||||||||||||||||||||||||||||||||
costs | adjustment | acquisition | |||||||||||||||||||||||||||||||||||||||||||
expenses | Current | Prior | costs (2) | ||||||||||||||||||||||||||||||||||||||||||
year | years | ||||||||||||||||||||||||||||||||||||||||||||
Consolidated Subsidiaries: | |||||||||||||||||||||||||||||||||||||||||||||
Year ended December 31, 2014 | $ | 79,452 | $ | 2,159,634 | $ | — | $ | 766,167 | $ | 935,895 | $ | 64,092 | $ | 601,041 | $ | (55,812 | ) | $ | 127,695 | $ | 196,825 | $ | 1,000,138 | ||||||||||||||||||||||
Year ended December 31, 2013 | $ | 67,007 | $ | 2,045,071 | $ | — | $ | 714,606 | $ | 841,939 | $ | 56,243 | $ | 520,227 | $ | (1,266 | ) | $ | 115,842 | $ | 164,434 | $ | 887,922 | ||||||||||||||||||||||
Year ended December 31, 2012 | $ | 61,005 | $ | 2,097,048 | $ | — | $ | 642,407 | $ | 781,964 | $ | 54,100 | $ | 542,724 | $ | (45,291 | ) | $ | 123,819 | $ | 159,079 | $ | 833,655 | ||||||||||||||||||||||
(1) - Net investment income and Other operating expenses reflect only such amounts attributable to the Company’s insurance operations. | |||||||||||||||||||||||||||||||||||||||||||||
(2) - Amortization of deferred policy acquisition costs reflects only such amounts attributable to the Company’s insurance operations. A portion of these costs is eliminated in consolidation. |
Organization_Summary_of_Signif1
Organization & Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Cash | Cash |
Cash includes cash on hand and demand deposits with banks, excluding such amounts held by Syndicate 1221 included as Funds at Lloyd’s. | |
Investments | Investments |
As of December 31, 2014 and 2013, all fixed maturity and equity securities held by our Company were carried at fair value and classified as available-for-sale. Available-for-sale securities are debt and equity securities not classified as either held-to-maturity securities or trading securities and are reported at fair value, with unrealized gains and losses excluded from earnings and reported in accumulated other comprehensive income (“AOCI”) as a separate component of stockholders’ equity. Fixed maturity securities include bonds, mortgage-backed and asset-backed securities. Equity securities consist of common stock and preferred stock. | |
Short-term investments are carried at fair value. Short-term investments mature within one year from the purchase date. | |
All prices for our fixed maturities, equity securities and short-term investments valued as Level 1, Level 2 or Level 3 in the fair value hierarchy, as defined in the Financial Accounts Standards Board (“FASB”) Accounting Standards Codification 820 (“ASC 820”), Fair Value Measurements, are received from independent pricing services utilized by one of our outside investment managers whom we employ to assist us with investment accounting services. This manager utilizes a pricing committee, which approves the use of one or more independent pricing service vendors. The pricing committee consists of five or more members of the investment management firm, one from senior management and one from the accounting group with the remainder from the asset class specialists and client strategists. The pricing source of each security is determined in accordance with the pricing source procedures approved by the pricing committee. The investment manager uses supporting documentation received from the independent pricing service vendor detailing the inputs, models and processes used in the independent pricing service vendors’ evaluation process to determine the appropriate fair value hierarchy. Any pricing where the input is believed to be unobservable is deemed to be a Level 3 price. Management has reviewed this process by which the manager determines the prices and has obtained alternative pricing to validate a sample of the prices and assess their reasonableness. | |
Premiums and discounts on fixed maturity securities are amortized into interest income over the life of the security under the interest method. For mortgage-backed and asset-backed securities, anticipated prepayments and expected maturities are utilized in applying the interest rate method. An effective yield is calculated based on projected principal cash flows at the time of original purchase. The effective yield is used to amortize the purchase price of the security over the security’s expected life. Book values are adjusted to reflect the amortization of premium or accretion of discount on a monthly basis. The projected principal cash flows are based on certain prepayment assumptions, which are generated using a prepayment model. The prepayment model uses a number of factors to estimate prepayment activity including the current levels of interest rates (refinancing incentive), time of year (seasonality), economic activity (including housing turnover) and term and age of the underlying collateral (burnout, seasoning). Prepayment assumptions associated with the mortgage-backed and asset-backed securities are reviewed on a periodic basis. When changes in prepayment assumptions are deemed necessary as the result of actual prepayments differing from anticipated prepayments, securities are revalued based upon the new prepayment assumptions utilizing the retrospective adjustment method, whereby the effective yield is recalculated to reflect actual payments to date and anticipated future payments. The investment in such securities is adjusted to the amount that would have existed had the new effective yield been applied since the acquisition of the security. Such adjustments, if any, are included in net investment income for the current period being reported. | |
Realized gains and losses on sales of investments are recognized when the related trades are executed and are determined on the basis of the specific identification method. | |
Impairment of Invested Assets | Impairment of Invested Assets |
Management regularly reviews our fixed maturity and equity securities portfolios to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of securities. | |
For fixed maturity securities, we consider our intent to sell a security and whether it is more likely than not that, we will be required to sell a security before the anticipated recovery as part of the process of evaluating whether a security’s unrealized loss represents an other-than-temporary decline. For fixed maturity securities that have a fair value below amortized cost and that we intend to sell or for which it is more likely than not that we would be required to sell, an other than temporary impairment (“OTTI”) loss is recognized in earnings by writing such security down to fair value. For fixed maturity securities we do not intend to sell or for which it is more likely than not our Company would not be required to sell, a decline in value below amortized cost is only recognized to the extent the present value of future cash flows expected to be collected is less than the amortized cost of the security. Such shortfall in the present value of future cash flows is considered the credit loss and is recognized as an OTTI loss in earnings, with the non-credit portion of the impairment (i.e. the difference between the present value of future cash flows and fair value of the security) recognized as OTTI losses in other comprehensive income (“OCI”). | |
In evaluating OTTI of equity securities, we consider our intent to hold the securities as part of the process of evaluating whether a decline in fair value below cost represents an other than temporary decline in value. For equity securities in an unrealized loss position that we do not intent to hold or that we do not expect to recover their value within a reasonable period of time, a net OTTI loss is recognized in earnings by writing such security down to the fair value. | |
Syndicate 1221 | Syndicate 1221 |
Syndicate 1221 reports the amount of premiums, claims, and expenses recorded in an underwriting account for a particular year over a three year period. Traditionally, three years have been necessary to report substantially all premiums associated with an underwriting year and to report most of the related claims, although claims may remain unsettled after the underwriting year is closed. Syndicate 1221 typically closes an underwriting year by reinsuring outstanding claims in that underwriting year with the next underwriting year. Only profits from closed underwriting years of account are distributed to NCUL. Profits from open underwriting years of account are not available and therefore not distributed to NCUL until the end of the three year period. | |
Our Company’s financial statements include all of the assets, liabilities, revenues and expenses of Syndicate1221. Adjustments are recorded to recognize underwriting results as incurred in the specific year and not over a three year period. Syndicate 1221 is not a separate legal entity. Refer to Note 10, Lloyd’s Syndicate 1221, for additional information. | |
Foreign Currency Remeasurement and Translation | Foreign Currency Remeasurement and Translation |
The functional currency in each of our operations is generally the currency of the local operating environment, except for our Lloyd’s Operations which is the U.S. dollar. Transactions in currencies other than an operation’s functional currency are remeasured into the functional currency and the resulting foreign exchange gains and losses are reflected in net Other Income (Expense) in the Consolidated Statements of Income. Functional currency assets and liabilities are translated into U.S. dollars using period end rates of exchange and the related translation adjustments are recorded as a separate component of AOCI. Statement of income amounts expressed in functional currencies are translated using average exchange rates. | |
During the first quarter, Syndicate 1221 revised its foreign exchange accounting methodology from reporting its financial position and results using three functional currencies (GBP, USD and CAD) to one functional currency (USD). The USD was chosen as the single functional currency as the majority of the Syndicate’s insurance business has been and continues to be transacted in USD. This cumulative change in re-measurement has resulted in an immaterial correction of $10.0 million ($6.6 million, after-tax) reducing Accumulated Other Comprehensive Income in the consolidated balance sheet, offset by a gain in Other Income in the consolidated statement of income. The impact of the correction is not material to the previously issued annual financial statements for 2013 and 2012. | |
Premium Revenues | Premium Revenues |
Written premium is recorded based on the insurance policies that have been reported to us and the policies that have been written by agents but not yet reported to us. We estimate the amount of written premium not yet reported based on judgments relative to current and historical trends of the business being written. Such estimates are regularly reviewed and updated and any resulting adjustments are included in the current year’s results. An unearned premium reserve is established to reflect the unexpired portion of each policy at the financial reporting date. | |
Substantially all of our business is placed through agents and brokers. We record estimates for both unreported direct and assumed premiums. We also record the ceded portion of the estimated gross written premium and related acquisition costs. The earned gross, ceded and net premiums are calculated based on our earning methodology, which is generally pro-rata over the policy period or over the period of risk if the period of risk differs significantly from the contract period. | |
A portion of our premium is estimated for unreported premium, mostly for the Marine business written by our U.K. Branch and Lloyd’s Operations as well as the Accident & Health (“A&H”) and Latin American & Caribbean Property Casualty and Surety Reinsurance business written by NavRe. Such premium estimates are generally based on submission data received from brokers and agents and recorded when the insurance policy or reinsurance contract is written or bound. The estimates are regularly reviewed and updated taking into account the premium received to date versus the estimate and the age of the estimate. To the extent that the actual premium varies from the estimates, the difference, along with the related loss reserves and underwriting expenses, is recorded in current operations. | |
Reinsurance Ceded | Reinsurance Ceded |
In the normal course of business, reinsurance is purchased by us from insurers or reinsurers to reduce the amount of loss arising from claims. In order to determine the proper accounting for the reinsurance, management analyzes the reinsurance agreements to determine whether the reinsurance should be classified as prospective or retroactive based upon the terms of the reinsurance agreement and whether the reinsurer has assumed significant insurance risk to the extent that the reinsurer may realize a significant loss from the transaction. | |
Prospective reinsurance is reinsurance in which an assuming company agrees to reimburse the ceding company for losses that may be incurred as a result of future insurable events covered under contracts subject to the reinsurance. Retroactive reinsurance is reinsurance in which an assuming company agrees to reimburse a ceding company for liabilities incurred as a result of past insurable events covered under contracts subject to the reinsurance. | |
Ceded reinsurance premiums and any related ceding commission and ceded losses are reflected as reductions of the respective income or expense accounts over the terms of the reinsurance contracts. Prepaid reinsurance premiums represent the portion of premiums ceded to reinsurers applicable to the unexpired terms of the reinsurance contracts in force. Reinsurance reinstatement premiums are recognized in the same period as the loss event that gave rise to the reinstatement premiums. Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policy. Unearned premiums ceded and estimates of amounts recoverable from reinsurers on paid and unpaid losses are reflected as assets. Provisions are made for estimated unrecoverable reinsurance. | |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs |
Costs of acquiring business are deferred and amortized ratably over the period that the related premiums are recognized as revenue. Such costs (e.g., commission expense, other underwriting expenses and premium taxes) are limited to the incremental direct costs related to the successful acquisition of new or renewal business. The method of computing deferred policy acquisition costs limits the deferral to their estimated net realizable value based on the related unearned premiums and takes into account anticipated losses and loss adjustment expenses, commission expense and operating expenses based on historical and current experience as well as anticipated investment income. | |
Reserves for Losses and Loss Adjustment Expenses | Reserves for Losses and Loss Adjustment Expenses |
Unpaid losses and loss adjustment expenses are determined on an individual basis for claims reported on direct business for insureds, from reports received from ceding insurers for insurance assumed from such insurers and on estimates based on Company and industry experience for incurred but not reported (“IBNR”) claims and loss adjustment expenses. Indicated IBNR loss reserves are calculated by our actuaries using several standard actuarial methodologies, including the paid and incurred loss development and the paid and incurred Bornheutter-Ferguson loss methods. Additional analyses, such as frequency/severity analyses, are performed for certain books of business. The provision for unpaid losses and loss adjustment expenses has been established to cover the estimated unpaid cost of claims incurred. Such estimates are regularly reviewed and updated and any resulting adjustments are included in the current year’s results. Management believes that the liability it has recognized for unpaid losses and loss adjustment expenses is a reasonable estimate of the ultimate unpaid claims incurred, however, such provisions are necessarily based on estimates and, accordingly, no representation is made that the ultimate liability will not differ materially from the amounts recorded in the accompanying consolidated financial statements. Losses and loss adjustment expenses are recorded on an undiscounted basis. | |
Earnings per Share | Earnings per Share |
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the basic earnings per share adjusted for the potential dilution that would occur if all issued stock options were exercised and all stock grants were fully vested. | |
Depreciation and Amortization | Depreciation and Amortization |
Depreciation of furniture and fixtures, electronic data processing equipment and computer software is provided over the estimated useful lives of the respective assets, ranging from three to seven years, using the straight-line method. Amortization of leasehold improvements is provided over the shorter of the useful lives of those improvements or the contractual terms of the leases using the straight-line method. | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets |
Goodwill represents the excess-of-cost of acquiring a business enterprise over the fair value of the net assets acquired. Our Company has also recorded indefinite lived intangible assets related to the acquisition of the remaining non-controlled stamp capacity of Lloyd’s Syndicate 1221. Goodwill and indefinite lived intangible assets are reported at carrying value and are tested for impairment at least annually, and when permitted by the applicable accounting guidance, qualitative factors are assessed to determine whether it is necessary to calculate an asset’s fair value when testing an asset with an indefinite life for impairment. Goodwill and indefinite lived intangible assets are considered impaired if the estimated fair value is less than its carrying value and any impairment loss is measured as the difference between the implied fair value and the carrying value. This Company did not recognize an impairment on goodwill or the indefinite lived intangible assets for any of the years ended December 31, 2014, 2013 and 2012. | |
As of December 31, 2014, the carrying value of goodwill and indefinite lived intangible assets was $7.0 million, consisting of $2.5 million and $2.4 million of goodwill assigned to NMC and our Lloyd’s Operations, respectively, and $2.1 million of indefinite lived intangible assets assigned to our Lloyd’s Operations. As of December 31, 2013, the carrying value of goodwill and indefinite lived intangible assets was $7.2 million, consisting of $2.5 million and $2.4 million of goodwill assigned to NMC and our Lloyd’s Operations, respectively, and $2.3 million of indefinite lived intangible assets assigned to our Lloyd’s Operations. Changes in the carrying value of the goodwill and indefinite lived intangible assets are due to fluctuations in currency exchange rates between the U.S. dollar and the British pound. | |
Income Taxes | Income Taxes |
We apply the asset and liability method of accounting for income taxes whereby deferred assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that, the deferred tax assets will be realized. These reviews include, among other factors, the nature and amount of the taxable income and expense items, the expected timing of when assets will be used or liabilities will be required to be reported, as well as the reliability of historical profitability of businesses expected to provide future earnings. After review, if management determines that the realization of the tax asset does not meet the more likely than not criterion an offsetting valuation allowance is recorded, which reduces net earnings and the deferred tax asset in that period. Additional information regarding our deferred tax assets can be found in Note 7, Income Taxes, in the Notes to Consolidated Financial Statements, included herein. | |
Use of Estimates | Use of Estimates |
The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The accounting estimates that are viewed by management as critical are those in connection with reserves for losses and loss adjustment expenses, reinsurance recoverables, written and unearned premiums, the recoverability of deferred tax assets, and impairment of invested assets. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Reconciliation of Basic and Diluted Earnings per Share Computations | The following is a reconciliation of the basic and diluted EPS computations for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||
Year Ended December 31, | |||||||||||||
In thousands, except share and per share amounts | 2014 | 2013 | 2012 | ||||||||||
Net income | $ | 95,329 | $ | 63,466 | $ | 63,762 | |||||||
Basic weighted average shares | 14,259,768 | 14,133,925 | 14,052,311 | ||||||||||
Effect of common stock equivalents: | |||||||||||||
Assumed exercise of stock options and vesting of stock grants | 386,601 | 211,628 | 275,509 | ||||||||||
Diluted weighted average shares | 14,646,369 | 14,345,553 | 14,327,820 | ||||||||||
Net income per common share: | |||||||||||||
Basic | $ | 6.69 | $ | 4.49 | $ | 4.54 | |||||||
Diluted | $ | 6.51 | $ | 4.42 | $ | 4.45 | |||||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Financial Data by Segment | Financial data by segment for the years ended December 31, 2014, 2013, and 2012 were as follows: | ||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
In thousands | Insurance | Lloyd’s | Corporate(1) | Total | |||||||||||||
Companies | Operations | ||||||||||||||||
Gross written premiums | $ | 1,045,454 | $ | 386,899 | $ | — | $ | 1,432,353 | |||||||||
Net written premiums | 752,773 | 247,365 | — | 1,000,138 | |||||||||||||
Net earned premiums | 704,574 | 231,321 | — | 935,895 | |||||||||||||
Net losses and loss adjustment expenses | (434,396 | ) | (110,833 | ) | — | (545,229 | ) | ||||||||||
Commission expenses | (85,137 | ) | (42,558 | ) | 2,167 | (125,528 | ) | ||||||||||
Other operating expenses | (138,675 | ) | (58,150 | ) | — | (196,825 | ) | ||||||||||
Other underwriting income (expense) | 2,727 | 35 | (2,167 | ) | 595 | ||||||||||||
Underwriting profit (loss) | $ | 49,093 | $ | 19,815 | $ | — | $ | 68,908 | |||||||||
Net investment income | 56,714 | 7,378 | 76 | 64,168 | |||||||||||||
Net realized gains (losses) | 12,715 | 97 | — | 12,812 | |||||||||||||
Call premium on Senior Notes | — | — | — | — | |||||||||||||
Interest expense | — | — | (15,413 | ) | (15,413 | ) | |||||||||||
Other income (expense) | (2,182 | ) | 12,243 | — | 10,061 | ||||||||||||
Income (loss) before income taxes | $ | 116,340 | $ | 39,533 | $ | (15,337 | ) | $ | 140,536 | ||||||||
Income tax expense (benefit) | 36,609 | 13,885 | (5,287 | ) | 45,207 | ||||||||||||
Net income (loss) | $ | 79,731 | $ | 25,648 | $ | (10,050 | ) | $ | 95,329 | ||||||||
Identifiable assets | $ | 3,344,084 | $ | 957,795 | $ | 162,297 | $ | 4,464,176 | |||||||||
Losses and loss adjustment expenses ratio | 61.7 | % | 47.9 | % | 58.3 | % | |||||||||||
Commission expense ratio | 12.1 | % | 18.4 | % | 13.4 | % | |||||||||||
Other operating expense ratio (2) | 19.2 | % | 25.1 | % | 20.9 | % | |||||||||||
Combined ratio | 93 | % | 91.4 | % | 92.6 | % | |||||||||||
(1) - Includes Corporate segment intercompany eliminations. | |||||||||||||||||
(2) - Includes Other operating expenses and Other underwriting income (expenses). | |||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
In thousands | Insurance | Lloyd’s | Corporate(1) | Total | |||||||||||||
Companies | Operations | ||||||||||||||||
Gross written premiums | $ | 1,002,275 | $ | 368,242 | $ | — | $ | 1,370,517 | |||||||||
Net written premiums | 680,008 | 207,914 | — | 887,922 | |||||||||||||
Net earned premiums | 639,338 | 202,601 | — | 841,939 | |||||||||||||
Net losses and loss adjustment expenses | (415,413 | ) | (103,548 | ) | — | (518,961 | ) | ||||||||||
Commission expenses | (81,132 | ) | (34,710 | ) | 2,348 | (113,494 | ) | ||||||||||
Other operating expenses | (119,920 | ) | (44,514 | ) | — | (164,434 | ) | ||||||||||
Other income (expense) | 2,764 | (1,588 | ) | (2,348 | ) | (1,172 | ) | ||||||||||
Underwriting profit (loss) | $ | 25,637 | $ | 18,241 | $ | — | $ | 43,878 | |||||||||
Net investment income | 49,083 | 7,160 | 8 | 56,251 | |||||||||||||
Net realized gains (losses) | 20,600 | (58 | ) | 4 | 20,546 | ||||||||||||
Call premium on Senior Notes | — | — | (17,895 | ) | (17,895 | ) | |||||||||||
Interest expense | — | — | (10,507 | ) | (10,507 | ) | |||||||||||
Income (loss) before income taxes | $ | 95,320 | $ | 25,343 | $ | (28,390 | ) | $ | 92,273 | ||||||||
Income tax expense (benefit) | 29,965 | 8,728 | (9,886 | ) | 28,807 | ||||||||||||
Net income (loss) | $ | 65,355 | $ | 16,615 | $ | (18,504 | ) | $ | 63,466 | ||||||||
Identifiable assets | $ | 3,077,437 | $ | 930,567 | $ | 161,448 | $ | 4,169,452 | |||||||||
Losses and loss adjustment expenses ratio | 65 | % | 51.1 | % | 61.6 | % | |||||||||||
Commission expense ratio | 12.7 | % | 17.1 | % | 13.5 | % | |||||||||||
Other operating expense ratio (2) | 18.3 | % | 22.8 | % | 19.7 | % | |||||||||||
Combined ratio | 96 | % | 91 | % | 94.8 | % | |||||||||||
(1) - Includes Corporate segment intercompany eliminations. | |||||||||||||||||
(2) - Includes Other operating expenses and Other income. | |||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
In thousands | Insurance | Lloyd’s | Corporate(1) | Total | |||||||||||||
Companies | Operations | ||||||||||||||||
Gross written premiums | $ | 921,325 | $ | 365,140 | $ | — | $ | 1,286,465 | |||||||||
Net written premiums | 622,956 | 210,699 | — | 833,655 | |||||||||||||
Net earned premiums | 571,439 | 210,525 | — | 781,964 | |||||||||||||
Net losses and loss adjustment expenses | (417,082 | ) | (80,351 | ) | — | (497,433 | ) | ||||||||||
Commission expenses | (81,370 | ) | (42,449 | ) | 2,349 | (121,470 | ) | ||||||||||
Other operating expenses | (113,625 | ) | (45,454 | ) | — | (159,079 | ) | ||||||||||
Other income (expense) | 3,790 | 47 | (2,349 | ) | 1,488 | ||||||||||||
Underwriting profit (loss) | $ | (36,848 | ) | $ | 42,318 | $ | — | $ | 5,470 | ||||||||
Net investment income | 46,549 | 7,551 | 148 | 54,248 | |||||||||||||
Net realized gains (losses) | 36,468 | 3,555 | 193 | 40,216 | |||||||||||||
Interest expense | — | — | (8,198 | ) | (8,198 | ) | |||||||||||
Income (loss) before income taxes | $ | 46,169 | $ | 53,424 | $ | (7,857 | ) | $ | 91,736 | ||||||||
Income tax expense (benefit) | 12,686 | 18,620 | (3,332 | ) | 27,974 | ||||||||||||
Net income (loss) | $ | 33,483 | $ | 34,804 | $ | (4,525 | ) | $ | 63,762 | ||||||||
Identifiable assets | $ | 3,036,489 | $ | 928,448 | $ | 42,733 | $ | 4,007,670 | |||||||||
Losses and loss adjustment expenses ratio | 73 | % | 38.2 | % | 63.6 | % | |||||||||||
Commission expense ratio | 14.2 | % | 20.2 | % | 15.5 | % | |||||||||||
Other operating expense ratio (2) | 19.2 | % | 21.5 | % | 20.2 | % | |||||||||||
Combined ratio | 106.4 | % | 79.9 | % | 99.3 | % | |||||||||||
(1) - Includes Corporate segment intercompany eliminations. | |||||||||||||||||
(2) - Includes Other operating expenses and Other income. | |||||||||||||||||
Additional Financial Data by Segment | The following tables provide additional financial data by segment for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
In thousands | Insurance | Lloyd’s | Total | ||||||||||||||
Companies | Operations | ||||||||||||||||
Gross written premiums: | |||||||||||||||||
Marine | $ | 177,363 | $ | 188,107 | $ | 365,470 | |||||||||||
Property casualty | 755,059 | 126,016 | 881,075 | ||||||||||||||
Professional liability | 113,032 | 72,776 | 185,808 | ||||||||||||||
Total | $ | 1,045,454 | $ | 386,899 | $ | 1,432,353 | |||||||||||
Net written premiums: | |||||||||||||||||
Marine | $ | 123,617 | $ | 144,327 | $ | 267,944 | |||||||||||
Property casualty | 554,844 | 55,917 | 610,761 | ||||||||||||||
Professional liability | 74,312 | 47,121 | 121,433 | ||||||||||||||
Total | $ | 752,773 | $ | 247,365 | $ | 1,000,138 | |||||||||||
Net earned premiums: | |||||||||||||||||
Marine | $ | 123,203 | $ | 141,471 | $ | 264,674 | |||||||||||
Property casualty | 496,209 | 51,338 | 547,547 | ||||||||||||||
Professional liability | 85,162 | 38,512 | 123,674 | ||||||||||||||
Total | $ | 704,574 | $ | 231,321 | $ | 935,895 | |||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
In thousands | Insurance | Lloyd’s | Total | ||||||||||||||
Companies | Operations | ||||||||||||||||
Gross written premiums: | |||||||||||||||||
Marine | $ | 171,822 | $ | 181,046 | $ | 352,868 | |||||||||||
Property casualty | 700,087 | 129,522 | 829,609 | ||||||||||||||
Professional liability | 130,366 | 57,674 | 188,040 | ||||||||||||||
Total | $ | 1,002,275 | $ | 368,242 | $ | 1,370,517 | |||||||||||
Net written premiums: | |||||||||||||||||
Marine | $ | 119,837 | $ | 134,627 | $ | 254,464 | |||||||||||
Property casualty | 462,942 | 42,334 | 505,276 | ||||||||||||||
Professional liability | 97,229 | 30,953 | 128,182 | ||||||||||||||
Total | $ | 680,008 | $ | 207,914 | $ | 887,922 | |||||||||||
Net earned premiums: | |||||||||||||||||
Marine | $ | 129,276 | $ | 138,690 | $ | 267,966 | |||||||||||
Property casualty | 409,480 | 37,722 | 447,202 | ||||||||||||||
Professional liability | 100,582 | 26,189 | 126,771 | ||||||||||||||
Total | $ | 639,338 | $ | 202,601 | $ | 841,939 | |||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
In thousands | Insurance | Lloyd’s | Total | ||||||||||||||
Companies | Operations | ||||||||||||||||
Gross written premiums: | |||||||||||||||||
Marine | $ | 200,095 | $ | 194,423 | $ | 394,518 | |||||||||||
Property casualty | 590,741 | 127,028 | 717,769 | ||||||||||||||
Professional liability | 130,489 | 43,689 | 174,178 | ||||||||||||||
Total | $ | 921,325 | $ | 365,140 | $ | 1,286,465 | |||||||||||
Net written premiums: | |||||||||||||||||
Marine | $ | 133,210 | $ | 143,600 | $ | 276,810 | |||||||||||
Property casualty | 390,168 | 43,824 | 433,992 | ||||||||||||||
Professional liability | 99,578 | 23,275 | 122,853 | ||||||||||||||
Total | $ | 622,956 | $ | 210,699 | $ | 833,655 | |||||||||||
Net earned premiums: | |||||||||||||||||
Marine | $ | 142,181 | $ | 136,898 | $ | 279,079 | |||||||||||
Property casualty | 332,782 | 52,951 | 385,733 | ||||||||||||||
Professional liability | 96,476 | 20,676 | 117,152 | ||||||||||||||
Total | $ | 571,439 | $ | 210,525 | $ | 781,964 | |||||||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||||||
Cash and Investments Including Other-Than-Temporarily Impaired Securities Recognized within Other Comprehensive Income | The following tables set forth our Company’s cash and investments as of December 31, 2014 and 2013. The tables below include OTTI securities recognized within AOCI. | ||||||||||||||||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||||||||||||||
In thousands | Fair Value | Gross | Gross | Amortized | |||||||||||||||||||||||||||||||||
Unrealized | Unrealized | Cost | |||||||||||||||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||||||||||||
U.S. Treasury bonds, agency bonds and foreign government bonds | $ | 397,923 | $ | 3,431 | $ | (5,965 | ) | $ | 400,457 | ||||||||||||||||||||||||||||
States, municipalities and political subdivisions | 541,007 | 19,204 | (558 | ) | 522,361 | ||||||||||||||||||||||||||||||||
Mortgage-backed and asset-backed securities: | |||||||||||||||||||||||||||||||||||||
Agency mortgage-backed securities | 364,622 | 8,476 | (998 | ) | 357,144 | ||||||||||||||||||||||||||||||||
Residential mortgage obligations | 34,087 | 1,153 | (138 | ) | 33,072 | ||||||||||||||||||||||||||||||||
Asset-backed securities | 206,413 | 380 | (964 | ) | 206,997 | ||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 206,318 | 6,630 | (98 | ) | 199,786 | ||||||||||||||||||||||||||||||||
Subtotal | $ | 811,440 | $ | 16,639 | $ | (2,198 | ) | $ | 796,999 | ||||||||||||||||||||||||||||
Corporate bonds | 615,564 | 13,048 | (1,626 | ) | 604,142 | ||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 2,365,934 | $ | 52,322 | $ | (10,347 | ) | $ | 2,323,959 | ||||||||||||||||||||||||||||
Equity securities - common stocks | 127,183 | 28,520 | (1,254 | ) | 99,917 | ||||||||||||||||||||||||||||||||
Equity securities - preferred stocks | 57,112 | 2,236 | (50 | ) | 54,926 | ||||||||||||||||||||||||||||||||
Short-term investments | 179,506 | — | (21 | ) | 179,527 | ||||||||||||||||||||||||||||||||
Cash | 90,751 | — | — | 90,751 | |||||||||||||||||||||||||||||||||
Total | $ | 2,820,486 | $ | 83,078 | $ | (11,672 | ) | $ | 2,749,080 | ||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
In thousands | Fair Value | Gross | Gross | Amortized | |||||||||||||||||||||||||||||||||
Unrealized | Unrealized | Cost | |||||||||||||||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||||||||||||
U.S. Treasury bonds, agency bonds and foreign government bonds | $ | 441,685 | $ | 2,854 | $ | (8,855 | ) | $ | 447,686 | ||||||||||||||||||||||||||||
States, municipalities and political subdivisions | 460,422 | 9,298 | (13,651 | ) | 464,775 | ||||||||||||||||||||||||||||||||
Mortgage-backed and asset-backed securities: | |||||||||||||||||||||||||||||||||||||
Agency mortgage-backed securities | 301,274 | 6,779 | (6,016 | ) | 300,511 | ||||||||||||||||||||||||||||||||
Residential mortgage obligations | 41,755 | 1,212 | (161 | ) | 40,704 | ||||||||||||||||||||||||||||||||
Asset-backed securities | 125,133 | 653 | (480 | ) | 124,960 | ||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 172,750 | 7,656 | (374 | ) | 165,468 | ||||||||||||||||||||||||||||||||
Subtotal | $ | 640,912 | $ | 16,300 | $ | (7,031 | ) | $ | 631,643 | ||||||||||||||||||||||||||||
Corporate bonds | 504,854 | 15,402 | (3,443 | ) | 492,895 | ||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 2,047,873 | $ | 43,854 | $ | (32,980 | ) | $ | 2,036,999 | ||||||||||||||||||||||||||||
Equity securities - common stocks | 143,954 | 25,700 | (550 | ) | 118,804 | ||||||||||||||||||||||||||||||||
Short-term investments | 296,250 | — | — | 296,250 | |||||||||||||||||||||||||||||||||
Cash | 86,509 | — | — | 86,509 | |||||||||||||||||||||||||||||||||
Total | $ | 2,574,586 | $ | 69,554 | $ | (33,530 | ) | $ | 2,538,562 | ||||||||||||||||||||||||||||
Scheduled Maturity Dates for Fixed Maturity Securities by Number of Years Until Maturity | The contractual maturity dates for fixed maturities categorized by the number of years until maturity as of December 31, 2014 are shown in the following table: | ||||||||||||||||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||||||||||||||
In thousands | Fair Value | Amortized | |||||||||||||||||||||||||||||||||||
Cost | |||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | 63,670 | $ | 65,643 | |||||||||||||||||||||||||||||||||
Due after one year through five years | 765,084 | 758,064 | |||||||||||||||||||||||||||||||||||
Due after five years through ten years | 356,929 | 348,195 | |||||||||||||||||||||||||||||||||||
Due after ten years | 368,811 | 355,058 | |||||||||||||||||||||||||||||||||||
Mortgage- and asset-backed securities | 811,440 | 796,999 | |||||||||||||||||||||||||||||||||||
Total | $ | 2,365,934 | $ | 2,323,959 | |||||||||||||||||||||||||||||||||
Amount and Percentage of Fixed Maturities by Rating | The following table shows the amount and percentage of our Company’s fixed maturities as of December 31, 2014 by Standard & Poor’s (“S&P”) credit rating or, if an S&P rating is not available, the equivalent Moody’s Investor Services (“Moody’s”) rating. The table includes fixed maturities at fair value, and the total rating is the weighted average quality rating. | ||||||||||||||||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||||||||||||||
In thousands | Rating | Fair Value | Percent | ||||||||||||||||||||||||||||||||||
of Total | |||||||||||||||||||||||||||||||||||||
Rating description: | |||||||||||||||||||||||||||||||||||||
Extremely strong | AAA | $ | 462,603 | 20 | % | ||||||||||||||||||||||||||||||||
Very strong | AA | 1,090,505 | 45 | % | |||||||||||||||||||||||||||||||||
Strong | A | 612,131 | 26 | % | |||||||||||||||||||||||||||||||||
Adequate | BBB | 185,372 | 8 | % | |||||||||||||||||||||||||||||||||
Speculative | BB & Below | 14,852 | 1 | % | |||||||||||||||||||||||||||||||||
Not rated | NR | 471 | 0 | % | |||||||||||||||||||||||||||||||||
Total | AA | $ | 2,365,934 | 100 | % | ||||||||||||||||||||||||||||||||
Summary of Aggregate Fair Value and Gross Unrealized Loss by Length of Time Securities had Continuously been in Gross Unrealized Loss Position as Well as Number of Securities | The following table summarizes all securities in a gross unrealized loss position as of December 31, 2014 and 2013, showing the aggregate fair value and gross unrealized loss by the length of time those securities had continuously been in a gross unrealized loss position as well as the relevant number of securities. | ||||||||||||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||||||
In thousands, except # of securities | Number of | Fair Value | Gross | Number of | Fair Value | Gross | |||||||||||||||||||||||||||||||
Securities | Unrealized | Securities | Unrealized | ||||||||||||||||||||||||||||||||||
Loss | Loss | ||||||||||||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||||||||||||
U.S. Treasury bonds, agency bonds, and foreign government bonds | |||||||||||||||||||||||||||||||||||||
0-6 months | 19 | $ | 87,915 | $ | 1,061 | 27 | $ | 136,360 | $ | 1,096 | |||||||||||||||||||||||||||
7-12 months | — | — | — | 26 | 149,370 | 7,759 | |||||||||||||||||||||||||||||||
> 12 months | 31 | 117,683 | 4,904 | — | — | — | |||||||||||||||||||||||||||||||
Subtotal | 50 | $ | 205,598 | $ | 5,965 | 53 | $ | 285,730 | $ | 8,855 | |||||||||||||||||||||||||||
States, municipalities and political subdivisions | |||||||||||||||||||||||||||||||||||||
0-6 months | 13 | $ | 14,242 | $ | 41 | 28 | $ | 40,132 | $ | 297 | |||||||||||||||||||||||||||
7-12 months | 2 | 2,107 | 19 | 104 | 205,152 | 12,100 | |||||||||||||||||||||||||||||||
> 12 months | 17 | 37,340 | 498 | 6 | 12,357 | 1,254 | |||||||||||||||||||||||||||||||
Subtotal | 32 | $ | 53,689 | $ | 558 | 138 | $ | 257,641 | $ | 13,651 | |||||||||||||||||||||||||||
Agency mortgage-backed securities | |||||||||||||||||||||||||||||||||||||
0-6 months | 4 | $ | 14,743 | $ | 52 | 39 | $ | 39,458 | $ | 434 | |||||||||||||||||||||||||||
7-12 months | 2 | 4,138 | 28 | 64 | 77,860 | 3,768 | |||||||||||||||||||||||||||||||
> 12 months | 46 | 58,301 | 918 | 9 | 22,784 | 1,814 | |||||||||||||||||||||||||||||||
Subtotal | 52 | $ | 77,182 | $ | 998 | 112 | $ | 140,102 | $ | 6,016 | |||||||||||||||||||||||||||
Residential mortgage obligations | |||||||||||||||||||||||||||||||||||||
0-6 months | 6 | $ | 4,966 | $ | 43 | 3 | $ | 431 | $ | 2 | |||||||||||||||||||||||||||
7-12 months | 2 | 659 | 7 | 7 | 950 | 29 | |||||||||||||||||||||||||||||||
> 12 months | 14 | 1,728 | 88 | 15 | 2,467 | 130 | |||||||||||||||||||||||||||||||
Subtotal | 22 | $ | 7,353 | $ | 138 | 25 | $ | 3,848 | $ | 161 | |||||||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||||||||||||||||
0-6 months | 19 | $ | 96,123 | $ | 354 | 14 | $ | 75,887 | $ | 479 | |||||||||||||||||||||||||||
7-12 months | 3 | 14,152 | 185 | 1 | 203 | 1 | |||||||||||||||||||||||||||||||
> 12 months | 3 | 34,530 | 425 | — | — | — | |||||||||||||||||||||||||||||||
Subtotal | 25 | $ | 144,805 | $ | 964 | 15 | $ | 76,090 | $ | 480 | |||||||||||||||||||||||||||
Commercial mortgage-backed securities | |||||||||||||||||||||||||||||||||||||
0-6 months | 4 | $ | 18,665 | $ | 65 | 4 | $ | 6,712 | $ | 31 | |||||||||||||||||||||||||||
7-12 months | 1 | 1,076 | 6 | 2 | 15,098 | 322 | |||||||||||||||||||||||||||||||
> 12 months | 3 | 1,391 | 27 | 4 | 774 | 21 | |||||||||||||||||||||||||||||||
Subtotal | 8 | $ | 21,132 | $ | 98 | 10 | $ | 22,584 | $ | 374 | |||||||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||||||||||||||||
0-6 months | 52 | $ | 179,390 | $ | 797 | 34 | $ | 93,591 | $ | 717 | |||||||||||||||||||||||||||
7-12 months | 4 | 11,071 | 74 | 18 | 55,021 | 2,726 | |||||||||||||||||||||||||||||||
> 12 months | 14 | 31,126 | 755 | — | — | — | |||||||||||||||||||||||||||||||
Subtotal | 70 | $ | 221,587 | $ | 1,626 | 52 | $ | 148,612 | $ | 3,443 | |||||||||||||||||||||||||||
Total fixed maturities | 259 | $ | 731,346 | $ | 10,347 | 405 | $ | 934,607 | $ | 32,980 | |||||||||||||||||||||||||||
Equity securities - common stocks | |||||||||||||||||||||||||||||||||||||
0-6 months | 6 | $ | 9,152 | $ | 761 | 5 | $ | 7,387 | $ | 422 | |||||||||||||||||||||||||||
7-12 months | 1 | 3,887 | 486 | 2 | 3,538 | 128 | |||||||||||||||||||||||||||||||
> 12 months | 1 | 238 | 7 | — | — | — | |||||||||||||||||||||||||||||||
8 | $ | 13,277 | $ | 1,254 | 7 | $ | 10,925 | $ | 550 | ||||||||||||||||||||||||||||
Equity securities - preferred stocks | |||||||||||||||||||||||||||||||||||||
0-6 months | 7 | $ | 6,651 | $ | 50 | — | $ | — | $ | — | |||||||||||||||||||||||||||
7-12 months | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
> 12 months | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
7 | $ | 6,651 | $ | 50 | — | $ | — | $ | — | ||||||||||||||||||||||||||||
Total equity securities | 15 | $ | 19,928 | $ | 1,304 | 7 | $ | 10,925 | $ | 550 | |||||||||||||||||||||||||||
Summary of Activity Related to Other-Than-Temporary Impairment Losses | The table below summarizes our Company’s activity related to OTTI losses for the periods indicated: | ||||||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
In thousands, except # of securities | Number of | Amount | Number of | Amount | Number of | Amount | |||||||||||||||||||||||||||||||
Securities | Securities | Securities | |||||||||||||||||||||||||||||||||||
Total OTTI losses: | |||||||||||||||||||||||||||||||||||||
Corporate and other bonds | — | $ | — | 1 | $ | 1,822 | — | $ | — | ||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Residential mortgage-backed securities | 31 | (137 | ) | — | — | 1 | 55 | ||||||||||||||||||||||||||||||
Asset-backed securities | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Equities | — | — | 3 | 571 | 3 | 847 | |||||||||||||||||||||||||||||||
Total | 31 | $ | (137 | ) | 4 | $ | 2,393 | 4 | $ | 902 | |||||||||||||||||||||||||||
Less: Portion of loss in accumulated other comprehensive income (loss): | |||||||||||||||||||||||||||||||||||||
Corporate and other bonds | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | — | — | ||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | (137 | ) | — | 44 | |||||||||||||||||||||||||||||||||
Asset-backed securities | — | — | — | ||||||||||||||||||||||||||||||||||
Equities | — | — | — | ||||||||||||||||||||||||||||||||||
Total | $ | (137 | ) | $ | — | $ | 44 | ||||||||||||||||||||||||||||||
Impairment losses recognized in earnings: | |||||||||||||||||||||||||||||||||||||
Corporate and other bonds | $ | — | $ | 1,822 | $ | — | |||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | — | — | ||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | — | — | 11 | ||||||||||||||||||||||||||||||||||
Asset-backed securities | — | — | — | ||||||||||||||||||||||||||||||||||
Equities | — | 571 | 847 | ||||||||||||||||||||||||||||||||||
Total | $ | — | $ | 2,393 | $ | 858 | |||||||||||||||||||||||||||||||
Summary of Cumulative Amounts Related to Credit Loss Portion of Other-Than-Temporary Impairment Losses on Debt Securities | The following table summarizes the cumulative amounts related to our Company’s credit loss portion of the OTTI losses on fixed maturities for the years ended December 31, 2014, 2013 and 2012. Our Company does not intend to sell and it is more likely than not that it will not be required to sell, the securities prior to recovery of the amortized cost basis and for which the non-credit loss portion is included in AOCI. | ||||||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
Beginning balance | $ | 5,154 | $ | 3,332 | $ | 3,321 | |||||||||||||||||||||||||||||||
Additions for credit loss impairments recognized in the current period on securities not previously impaired | — | 1,822 | — | ||||||||||||||||||||||||||||||||||
Additions for credit loss impairments recognized in the current period on securities previously impaired | — | — | 11 | ||||||||||||||||||||||||||||||||||
Reductions for credit loss impairments previously recognized on securities sold during the period | (2,793 | ) | — | — | |||||||||||||||||||||||||||||||||
Ending balance | $ | 2,361 | $ | 5,154 | $ | 3,332 | |||||||||||||||||||||||||||||||
Contractual Maturity by Number of Years Until Maturity for Fixed Maturity Securities with a Gross Unrealized Loss | The contractual maturity dates for fixed maturities categorized by the number of years until maturity, with a gross unrealized loss as of December 31, 2014 is presented in the following table: | ||||||||||||||||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||||||||||||||
Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||||||||||||||||
In thousands | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||||||||
of Total | of Total | ||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | 2,638 | 25 | % | $ | 21,919 | 3 | % | |||||||||||||||||||||||||||||
Due after one year through five years | 3,791 | 37 | % | 334,046 | 46 | % | |||||||||||||||||||||||||||||||
Due after five years through ten years | 1,562 | 15 | % | 103,376 | 14 | % | |||||||||||||||||||||||||||||||
Due after ten years | 158 | 2 | % | 21,533 | 3 | % | |||||||||||||||||||||||||||||||
Mortgage- and asset-backed securities | 2,198 | 21 | % | 250,472 | 34 | % | |||||||||||||||||||||||||||||||
Total | $ | 10,347 | 100 | % | $ | 731,346 | 100 | % | |||||||||||||||||||||||||||||
Net Investment Income | Our Company’s net investment income was derived from the following sources: | ||||||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
Fixed maturities | $ | 57,219 | $ | 53,898 | $ | 58,995 | |||||||||||||||||||||||||||||||
Equity securities | 9,036 | 4,835 | 3,945 | ||||||||||||||||||||||||||||||||||
Short-term investments | 911 | 774 | 1,694 | ||||||||||||||||||||||||||||||||||
Total investment income | 67,166 | 59,507 | 64,634 | ||||||||||||||||||||||||||||||||||
Investment expenses | (2,998 | ) | (3,256 | ) | (10,386 | ) | |||||||||||||||||||||||||||||||
Net investment income | $ | 64,168 | $ | 56,251 | $ | 54,248 | |||||||||||||||||||||||||||||||
Change in Net Unrealized Gains/(Losses) | The change in net unrealized gains and losses, inclusive of the change in the non-credit portion of OTTI losses, consisted of: | ||||||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
Fixed maturities | $ | 31,080 | $ | (76,194 | ) | $ | 15,709 | ||||||||||||||||||||||||||||||
Equity securities | 4,302 | 8,857 | (5,989 | ) | |||||||||||||||||||||||||||||||||
Gross unrealized gains (losses) | 35,382 | (67,337 | ) | 9,720 | |||||||||||||||||||||||||||||||||
Deferred income tax | 12,197 | (23,565 | ) | 3,418 | |||||||||||||||||||||||||||||||||
Change in net unrealized gains (losses), net | $ | 23,185 | $ | (43,772 | ) | $ | 6,302 | ||||||||||||||||||||||||||||||
Realized Gains and Losses, Excluding Net Other-Than-Temporary Impairment Losses Recognized in Earnings | Realized gains and losses, excluding net OTTI losses recognized in earnings, for the periods indicated, were as follows: | ||||||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||||||||||||
Gains | $ | 8,326 | $ | 8,539 | $ | 28,789 | |||||||||||||||||||||||||||||||
Losses | (2,610 | ) | (2,797 | ) | (1,915 | ) | |||||||||||||||||||||||||||||||
Fixed maturities, net | $ | 5,716 | $ | 5,742 | $ | 26,874 | |||||||||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||||||
Gains | $ | 9,447 | $ | 17,955 | $ | 14,673 | |||||||||||||||||||||||||||||||
Losses | (2,351 | ) | (758 | ) | (473 | ) | |||||||||||||||||||||||||||||||
Equity securities, net | $ | 7,096 | $ | 17,197 | $ | 14,200 | |||||||||||||||||||||||||||||||
Net realized gains (losses) | $ | 12,812 | $ | 22,939 | $ | 41,074 | |||||||||||||||||||||||||||||||
Fixed Maturities and Equity Securities by Asset Class that are Measured at Fair Value | The following tables present, for each of the fair value hierarchy levels as defined by the accounting guidance for fair value measurements and described below, our Company’s fixed maturities and equity securities by asset class that are measured at fair value on a recurring basis as of December 31, 2014 and 2013: | ||||||||||||||||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||||||||||||||
In thousands | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||||||||||||
U.S. Treasury bonds, agency bonds and foreign government bonds | $ | 146,904 | $ | 251,019 | $ | — | $ | 397,923 | |||||||||||||||||||||||||||||
States, municipalities and political subdivisions | — | 541,007 | — | 541,007 | |||||||||||||||||||||||||||||||||
Mortgage-backed and asset-backed securities: | — | ||||||||||||||||||||||||||||||||||||
Agency mortgage-backed securities | — | 364,622 | — | 364,622 | |||||||||||||||||||||||||||||||||
Residential mortgage obligations | — | 34,087 | — | 34,087 | |||||||||||||||||||||||||||||||||
Asset-backed securities | — | 206,413 | — | 206,413 | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 206,318 | — | 206,318 | |||||||||||||||||||||||||||||||||
Subtotal | $ | — | $ | 811,440 | $ | — | $ | 811,440 | |||||||||||||||||||||||||||||
Corporate bonds | — | 615,564 | — | 615,564 | |||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 146,904 | $ | 2,219,030 | $ | — | $ | 2,365,934 | |||||||||||||||||||||||||||||
Equity securities - common stocks | 127,183 | — | 127,183 | ||||||||||||||||||||||||||||||||||
Equity securities - preferred stocks | — | 57,112 | — | 57,112 | |||||||||||||||||||||||||||||||||
Total | $ | 274,087 | $ | 2,276,142 | $ | — | $ | 2,550,229 | |||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
In thousands | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||||||||||||
U.S. Treasury bonds, agency bonds and foreign government bonds | $ | 242,379 | $ | 199,306 | $ | — | $ | 441,685 | |||||||||||||||||||||||||||||
States, municipalities and political subdivisions | — | 460,422 | — | 460,422 | |||||||||||||||||||||||||||||||||
Mortgage-backed and asset-backed securities: | — | ||||||||||||||||||||||||||||||||||||
Agency mortgage-backed securities | — | 301,274 | — | 301,274 | |||||||||||||||||||||||||||||||||
Residential mortgage obligations | — | 41,755 | — | 41,755 | |||||||||||||||||||||||||||||||||
Asset-backed securities | — | 125,133 | — | 125,133 | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 172,750 | — | 172,750 | |||||||||||||||||||||||||||||||||
Subtotal | $ | — | $ | 640,912 | $ | — | $ | 640,912 | |||||||||||||||||||||||||||||
Corporate bonds | — | 500,447 | 4,407 | 504,854 | |||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 242,379 | $ | 1,801,087 | $ | 4,407 | $ | 2,047,873 | |||||||||||||||||||||||||||||
Equity securities - common stocks | 143,954 | — | — | 143,954 | |||||||||||||||||||||||||||||||||
Total | $ | 386,333 | $ | 1,801,087 | $ | 4,407 | $ | 2,191,827 | |||||||||||||||||||||||||||||
Reconciliation of Beginning and Ending Balances for All Investments Measured at Fair Value Using Level 3 Inputs | The following tables present a reconciliation of the beginning and ending balances for all investments measured at fair value using Level 3 inputs for the years ended December 31, 2014 and 2013. For the year ended December 31, 2012, our Company did not have any Level 3 assets. | ||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||||||||||||||||||||||
In thousands | Beginning | Realized | Unrealized | Purchase | Sales | Settlements | Transfers | Transfers | Ending | ||||||||||||||||||||||||||||
Balance | Gains | Gains | into | out of | |||||||||||||||||||||||||||||||||
(Losses) | (Losses) | Level 3 | Level 3 | ||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||
Corporate Bond | $ | 4,407 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (4,407 | ) | $ | — | ||||||||||||||||||
Total assets | $ | 4,407 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (4,407 | ) | $ | — | ||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||||||||||||
In thousands | Beginning | Realized | Unrealized | Purchase | Sales | Settlements | Transfers | Transfers | Ending | ||||||||||||||||||||||||||||
Balance | Gains | Gains | into | out of | |||||||||||||||||||||||||||||||||
(Losses) | (Losses) | Level 3 | Level 3 | ||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||||||||||
Mortgage | $ | — | $ | — | $ | (42 | ) | $ | 4,660 | $ | (211 | ) | $ | — | $ | — | $ | — | $ | 4,407 | |||||||||||||||||
Total assets | $ | — | $ | — | $ | (42 | ) | $ | 4,660 | $ | (211 | ) | $ | — | $ | — | $ | — | $ | 4,407 | |||||||||||||||||
Reserves_for_Losses_and_Loss_A1
Reserves for Losses and Loss Adjustment Expenses (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary of Activity in Reserve for Losses and Loss Adjustment Expenses | The following table summarizes our Company’s reserves for losses and LAE activity for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||
Year Ended December 31, | |||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||
Net reserves for losses and LAE at beginning of year | $ | 1,222,633 | $ | 1,216,909 | $ | 1,237,234 | |||||||||||
Provision for losses and LAE for claims occurring in the current year | 601,041 | 520,227 | 542,724 | ||||||||||||||
Increase (decrease) in estimated losses and LAE for claims occurring in prior years | (55,812 | ) | (1,266 | ) | (45,291 | ) | |||||||||||
Incurred losses and LAE | 545,229 | 518,961 | 497,433 | ||||||||||||||
Losses and LAE paid for claims occurring during: | |||||||||||||||||
Current year | (164,199 | ) | (147,758 | ) | (110,373 | ) | |||||||||||
Prior years | (295,527 | ) | (365,479 | ) | (407,385 | ) | |||||||||||
Losses and LAE payments | (459,726 | ) | (513,237 | ) | (517,758 | ) | |||||||||||
Net reserves for losses and LAE at end of year | 1,308,136 | 1,222,633 | 1,216,909 | ||||||||||||||
Reinsurance recoverables on unpaid losses and LAE | 851,498 | 822,438 | 880,139 | ||||||||||||||
Gross reserves for losses and LAE at end of year | $ | 2,159,634 | $ | 2,045,071 | $ | 2,097,048 | |||||||||||
Segment Break Down of Prior Years' Net Reserve Deficiency (Redundancy) | The segment and line of business breakdowns of prior period net reserve strengthening (releases) for the years ended December 31, 2014, 2013 and 2012 are as follows: | ||||||||||||||||
Year Ended December 31, | |||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||
Insurance Companies: | |||||||||||||||||
Marine | $ | (41,388 | ) | $ | (15,227 | ) | $ | (10,010 | ) | ||||||||
Property Casualty | 14,612 | 18,466 | 4,293 | ||||||||||||||
Professional Liability | (3,536 | ) | 10,191 | 7,613 | |||||||||||||
Insurance Companies | $ | (30,312 | ) | $ | 13,430 | $ | 1,896 | ||||||||||
Lloyd’s Operations: | |||||||||||||||||
Marine | $ | (21,336 | ) | $ | (2,998 | ) | $ | (30,735 | ) | ||||||||
Property Casualty | (1,500 | ) | (14,574 | ) | (6,890 | ) | |||||||||||
Professional Liability | (2,664 | ) | 2,876 | (9,562 | ) | ||||||||||||
Lloyd’s Operations | $ | (25,500 | ) | $ | (14,696 | ) | $ | (47,187 | ) | ||||||||
Total strengthening (releases) | $ | (55,812 | ) | $ | (1,266 | ) | $ | (45,291 | ) | ||||||||
Lloyd's | |||||||||||||||||
Segment Break Down of Prior Years' Net Reserve Deficiency (Redundancy) | A summary of the resulting prior period redundancies for each business within our Lloyd’s Operations by prior UWY is set forth below: | ||||||||||||||||
In thousands | Marine | Property | Professional | Total | |||||||||||||
Casualty | Liability | ||||||||||||||||
2010 | $ | 3,492 | $ | 378 | $ | 1,157 | $ | 5,027 | |||||||||
2009 | 14,792 | 4,170 | 6,072 | 25,034 | |||||||||||||
2008 and Prior | 12,451 | 2,342 | 2,333 | 17,126 | |||||||||||||
Total Redundancy | $ | 30,735 | $ | 6,890 | $ | 9,562 | $ | 47,187 | |||||||||
Ceded_Reinsurance_Tables
Ceded Reinsurance (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Credit Quality Distribution of Reinsurance Recoverables for Ceded Paid and Unpaid Losses and Loss Adjustment Expenses and Ceded Unearned Premiums Based On Insurer Financial Strength Ratings from A. M. Best or S&P | The credit quality distribution of our Company’s reinsurance recoverables of $1.1 billion as of December 31, 2014 for ceded paid and unpaid losses and LAE and ceded unearned premiums based on insurer financial strength ratings from A.M. Best or S&P were as follows: | ||||||||||||||||||||
In thousands | Rating | Carrying | Percent | ||||||||||||||||||
Value (2) | of Total | ||||||||||||||||||||
A.M. Best Rating description (1): | |||||||||||||||||||||
Superior | A++, A+ | $ | 575,205 | 50 | % | ||||||||||||||||
Excellent | A, A- | 547,314 | 48 | % | |||||||||||||||||
Very good | B++, B+ | 8,483 | 1 | % | |||||||||||||||||
Fair | B, B- | — | 0 | % | |||||||||||||||||
Not rated | NR | 9,694 | 1 | % | |||||||||||||||||
Total | $ | 1,140,696 | 100 | % | |||||||||||||||||
-1 | - | When an A.M. Best rating is unavailable, the equivalent S&P rating is used. | |||||||||||||||||||
-2 | - | The carrying value is comprised of prepaid reinsurance premium as well as reinsurance recoverables on paid and unpaid losses which are net of the reserve for uncollectible reinsurance. | |||||||||||||||||||
Lists of 20 Largest Reinsurers Measured by Reinsurance Recoverable | The following table lists our Company’s 20 largest reinsurers measured by the amount of reinsurance recoverable for ceded losses and LAE and ceded unearned premium (constituting 75.7% of the total recoverable), together with the reinsurance recoverable and collateral as of December 31, 2014, and the reinsurers’ ratings from A.M. Best or S&P: | ||||||||||||||||||||
In thousands | Unearned | Paid/Unpaid | Total (1) | Collateral | A.M. Best | S&P | |||||||||||||||
Premium | Losses | Held | |||||||||||||||||||
National Indemnity Company | $ | 25,202 | $ | 117,562 | $ | 142,764 | $ | 22,069 | A++ | AA+ | |||||||||||
Everest Reinsurance Company | 21,573 | 75,063 | 96,636 | 7,326 | A+ | A+ | |||||||||||||||
Swiss Reinsurance America Corporation | 22,815 | 73,305 | 96,120 | 14,587 | A+ | AA- | |||||||||||||||
Transatlantic Reinsurance Company | 11,916 | 74,072 | 85,988 | 4,038 | A | A+ | |||||||||||||||
Munich Reinsurance America Inc. | 11,366 | 58,768 | 70,134 | 5,539 | A+ | AA- | |||||||||||||||
Allied World Reinsurance | 9,048 | 37,088 | 46,136 | 1,666 | A | A | |||||||||||||||
Lloyd’s Syndicate #2003 | 4,399 | 35,123 | 39,522 | 5,191 | A | A+ | |||||||||||||||
Partner Reinsurance Europe | 10,986 | 25,409 | 36,395 | 16,052 | A+ | A+ | |||||||||||||||
Employers Mutual Casualty Company | 11,928 | 21,851 | 33,779 | 10,935 | A | NR | |||||||||||||||
Scor Global P&C SE | 10,190 | 17,572 | 27,762 | 5,558 | A | A+ | |||||||||||||||
Ace Property and Casualty Insurance Company | 11,165 | 12,741 | 23,906 | 2,907 | A++ | AA | |||||||||||||||
Tower Insurance Company | — | 21,509 | 21,509 | 2,455 | A- | NR | |||||||||||||||
Aspen Insurance UK Ltd. | 8,928 | 11,227 | 20,155 | 4,869 | A | A | |||||||||||||||
Ironshore Indemnity Inc. | 6,234 | 13,395 | 19,629 | 8,645 | A | NR | |||||||||||||||
Validus Reinsurance Ltd. | 2,020 | 16,873 | 18,893 | 10,975 | A | A | |||||||||||||||
Atlantic Specialty Insurance | 2,542 | 15,812 | 18,354 | — | A | A- | |||||||||||||||
QBE Reinsurance Corp | 2,636 | 15,539 | 18,175 | — | A | A+ | |||||||||||||||
National Union Fire Ins. | 8,067 | 8,459 | 16,526 | 6,158 | A | A+ | |||||||||||||||
Endurance Reinsurance Corporation | 5,695 | 9,936 | 15,631 | 1,337 | A | A | |||||||||||||||
Odyssey American Reinsurance Corporation | 3,506 | 11,650 | 15,156 | 1,604 | A | A- | |||||||||||||||
Top 20 | $ | 190,216 | $ | 672,954 | $ | 863,170 | $ | 131,911 | |||||||||||||
Others | 47,635 | 229,891 | 277,526 | 70,065 | |||||||||||||||||
Total | $ | 237,851 | $ | 902,845 | $ | 1,140,696 | $ | 201,976 | |||||||||||||
(1) - Net of reserve for uncollectible reinsurance of approximately $11.3 million. | |||||||||||||||||||||
Summary of Written Premium | The following table summarizes the components of Net Written Premium: | ||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||
Direct | $ | 1,184,538 | $ | 1,127,331 | $ | 1,034,658 | |||||||||||||||
Assumed | 247,815 | 243,187 | 251,807 | ||||||||||||||||||
Ceded | (432,215 | ) | (482,596 | ) | (452,810 | ) | |||||||||||||||
Net Written Premiums | $ | 1,000,138 | $ | 887,922 | $ | 833,655 | |||||||||||||||
Summary of Earned Premium | The following table summarizes the components of Net Earned Premium: | ||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||
Direct | $ | 1,133,336 | $ | 1,069,677 | $ | 972,844 | |||||||||||||||
Assumed | 243,215 | 228,247 | 205,759 | ||||||||||||||||||
Ceded | (440,656 | ) | (455,985 | ) | (396,639 | ) | |||||||||||||||
Net Earned Premiums | $ | 935,895 | $ | 841,939 | $ | 781,964 | |||||||||||||||
Summary of Losses and Loss Adjustment Expenses Incurred | The following table summarizes the components of Net Losses and LAE incurred: | ||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||
Direct | $ | 631,730 | $ | 552,381 | $ | 608,945 | |||||||||||||||
Assumed | 143,681 | 155,313 | 151,137 | ||||||||||||||||||
Ceded | (230,182 | ) | (188,733 | ) | (262,649 | ) | |||||||||||||||
Net Losses and LAE | $ | 545,229 | $ | 518,961 | $ | 497,433 | |||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Components of Current and Deferred Income Tax Expense (Benefit) | The components of current and deferred income tax expense (benefit) are as follows: | ||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Current income tax expense (benefit): | |||||||||||||||||||||||||
Federal and foreign | $ | 27,290 | $ | 23,703 | $ | 39,242 | |||||||||||||||||||
State and local | 1,036 | 446 | 146 | ||||||||||||||||||||||
Subtotal | 28,326 | 24,149 | 39,388 | ||||||||||||||||||||||
Deferred income tax expense (benefit): | |||||||||||||||||||||||||
Federal and foreign | 16,881 | 4,658 | (11,414 | ) | |||||||||||||||||||||
State and local | — | — | — | ||||||||||||||||||||||
Subtotal | 16,881 | 4,658 | (11,414 | ) | |||||||||||||||||||||
Total income tax expense (benefit) | $ | 45,207 | $ | 28,807 | $ | 27,974 | |||||||||||||||||||
Reconciliation of Total Income Taxes Applicable to Pre-Tax Operating Income and Amounts Computed by Applying Federal Statutory Income Tax Rate to Pre-Tax Operating Income | A reconciliation of total income taxes applicable to pre-tax operating income and the amounts computed by applying the federal statutory income tax rate to the pre-tax operating income were as follows: | ||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Computed expected tax expense | $ | 49,187 | 35 | % | $ | 32,299 | 35 | % | $ | 32,109 | 35 | % | |||||||||||||
Tax-exempt interest | (4,771 | ) | -3.4 | % | (3,839 | ) | -4.2 | % | (4,443 | ) | -4.8 | % | |||||||||||||
Dividends received deduction | (1,257 | ) | -0.9 | % | (897 | ) | -1 | % | (799 | ) | -0.9 | % | |||||||||||||
Proration of DRD and Tax-exempt interest | 904 | 0.6 | % | 710 | 0.8 | % | 786 | 0.9 | % | ||||||||||||||||
Current state and local income taxes, net of federal income tax deduction | 674 | 0.5 | % | 290 | 0.3 | % | 95 | 0.1 | % | ||||||||||||||||
Other | 470 | 0.3 | % | 244 | 0.3 | % | 226 | 0.2 | % | ||||||||||||||||
Actual tax expense and rate | $ | 45,207 | 32.2 | % | $ | 28,807 | 31.2 | % | $ | 27,974 | 30.5 | % | |||||||||||||
Tax Effects of Temporary Differences That Give Rise to Federal, Foreign, State and Local Deferred Tax Assets and Deferred Tax Liabilities | The tax effects of temporary differences that give rise to federal, foreign, state and local deferred tax assets and deferred tax liabilities were as follows: | ||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
In thousands | 2014 | 2013 | |||||||||||||||||||||||
Deferred tax assets: | |||||||||||||||||||||||||
Loss reserve discount | $ | 24,820 | $ | 27,822 | |||||||||||||||||||||
Unearned premiums | 29,080 | 25,706 | |||||||||||||||||||||||
Compensation related | 10,586 | 6,782 | |||||||||||||||||||||||
State and local net deferred tax assets | 777 | 555 | |||||||||||||||||||||||
Other | 1,834 | 3,889 | |||||||||||||||||||||||
Total gross deferred tax assets | 67,097 | 64,754 | |||||||||||||||||||||||
Less: Valuation allowance | (777 | ) | (555 | ) | |||||||||||||||||||||
Total deferred tax assets | $ | 66,320 | $ | 64,199 | |||||||||||||||||||||
Deferred tax liabilities: | |||||||||||||||||||||||||
Net unrealized gains/losses on securities | (24,832 | ) | (9,119 | ) | |||||||||||||||||||||
Deferred acquisition costs | (22,120 | ) | (19,258 | ) | |||||||||||||||||||||
Lloyd’s year of account deferral | (13,578 | ) | (4,381 | ) | |||||||||||||||||||||
Net unrealized foreign exchange | (4,470 | ) | (3,516 | ) | |||||||||||||||||||||
Other | (2,787 | ) | (4,119 | ) | |||||||||||||||||||||
Total deferred tax liabilities | $ | (67,787 | ) | $ | (40,393 | ) | |||||||||||||||||||
Net deferred income tax asset (liability) | $ | (1,467 | ) | $ | 23,806 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Future Minimum Annual Rental Commitments under Various Noncancellable Operating Leases | Future minimum annual rental commitments as of December 31, 2014 under various non-cancellable operating leases for our office facilities, which expire at various dates through 2023, are as follows: | ||||
Year Ended | |||||
In thousands | December 31, | ||||
2015 | $ | 11,245 | |||
2016 | 9,234 | ||||
2017 | 7,942 | ||||
2018 | 6,907 | ||||
2019 | 4,258 | ||||
Thereafter | 12,811 | ||||
Total minimum operating lease payments | $ | 52,397 | |||
Share_Capital_Tables
Share Capital (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Changes in Company's Issued and Outstanding Common Shares | The following table represents changes in our Company’s issued and outstanding common shares for the periods indicated: | ||||||||||||
Year Ended December 31, | |||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||
Beginning balance | 14,198 | 14,047 | 13,956 | ||||||||||
Vested stock grants | 59 | 50 | 60 | ||||||||||
Employee stock purchase plan | 19 | 17 | 16 | ||||||||||
Stock options exercised | 5 | 84 | 15 | ||||||||||
Treasury shares purchased | — | — | — | ||||||||||
Ending balance | 14,281 | 14,198 | 14,047 | ||||||||||
Dividends_and_Statutory_Financ1
Dividends and Statutory Financial Information (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Amount and Nature of Net Assets Restricted from Payment of Dividends | The amount and nature of net assets that are restricted from payment of dividends as of December 31, 2014 and 2013 are presented in the following table: | ||||||||
As of December 31, | |||||||||
In thousands | 2014 | 2013 | |||||||
Restricted Net Assets: | |||||||||
Insurance Companies: | |||||||||
Fixed maturities at fair value (amortized cost: 2014, $10,086; 2013, $9,730) | $ | 11,732 | $ | 11,105 | |||||
Short term investments, at cost which approximates fair value | 290 | 290 | |||||||
Cash | 1,212 | 1,210 | |||||||
Total Insurance Companies (1) | $ | 13,234 | $ | 12,605 | |||||
Lloyd’s Operations: | |||||||||
Fixed maturities at fair value (amortized cost: 2014, $445,504; 2013, $398,930) | 447,679 | 398,808 | |||||||
Short term investments, at cost which approximates fair value | 61,549 | 108,485 | |||||||
Cash | 963 | 988 | |||||||
Total Lloyd’s Operations (2) | $ | 510,191 | $ | 508,281 | |||||
Total Restricted Net Assets | $ | 523,425 | $ | 520,886 | |||||
(1) - The restricted net assets for the Insurance Companies primarily consist of fixed maturities on deposit with various state insurance departments. The cash as of December 31, 2014 and 2013, as presented in the table above, was on deposit with a U.K. bank to comply with the regulatory requirements of the Prudential Regulation Authority for the underwriting activities of the U.K. Branch. | |||||||||
(2) - The restricted net assets for the Lloyd’s Operations consists of fixed maturities and cash held in trust for the benefit of syndicate policyholders and short term investments primarily consisting of overseas deposits in various countries with Lloyd’s to support underwriting activities in those countries. |
Stock_Option_Plans_Stock_Grant1
Stock Option Plans, Stock Grants, Stock Appreciation Rights and Employee Stock Purchase Plan (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Amounts Charged to Expense for Stock-based Compensation | The amounts charged to expense for stock-based compensation for the years ended December 31, 2014, 2013 and 2012 are presented in the following table: | ||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||
In thousands | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||
Restricted stock units | $ | 11,507 | $ | 3,369 | $ | 7,380 | |||||||||||||||||||||||
Directors restricted stock grants (1) | 420 | 413 | 390 | ||||||||||||||||||||||||||
Employee stock purchase plan | 194 | 132 | 82 | ||||||||||||||||||||||||||
Total stock-based compensation | $ | 12,121 | $ | 3,914 | $ | 7,852 | |||||||||||||||||||||||
(1) - | Relates to non-employee directors serving on the Parent Company’s Board of Directors, all of whom have been elected by the Company’s stockholders, as well as non-employee directors serving on NUAL’s Board of Directors. | ||||||||||||||||||||||||||||
Unvested Restricted Stock Grants Outstanding | Unvested restricted stock units outstanding as of December 31, 2014, 2013 and 2012, and changes during the years ended on those dates, are presented in the following table: | ||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||||
Beginning balance | 626,812 | 587,629 | 526,972 | ||||||||||||||||||||||||||
Granted - Performance | 228,607 | 114,463 | 97,145 | ||||||||||||||||||||||||||
Granted - Non Performance | 59,523 | 155,463 | 146,915 | ||||||||||||||||||||||||||
Total Granted | 288,130 | 269,926 | 244,060 | ||||||||||||||||||||||||||
Vested - Performance Earned | — | (15,714 | ) | — | |||||||||||||||||||||||||
Vested - Performance Unearned | (93,453 | ) | (57,585 | ) | (46,998 | ) | |||||||||||||||||||||||
Vested - Non Performance | (90,263 | ) | (60,183 | ) | (91,323 | ) | |||||||||||||||||||||||
Total Vested | (183,716 | ) | (133,482 | ) | (138,321 | ) | |||||||||||||||||||||||
Forfeited | (12,334 | ) | (97,261 | ) | (45,082 | ) | |||||||||||||||||||||||
Ending balance | 718,892 | 626,812 | 587,629 | ||||||||||||||||||||||||||
Stock Options Outstanding | Stock options outstanding as of December 31, 2014, 2013 and 2012 are as follows: | ||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||||
# of Shares | Average | # of Shares | Average | # of Shares | Average | ||||||||||||||||||||||||
Exercise Price | Exercise Price | Exercise Price | |||||||||||||||||||||||||||
Beginning balance | 6,750 | $ | 30.65 | 90,250 | $ | 29.94 | 105,250 | $ | 29.5 | ||||||||||||||||||||
Granted | — | — | — | — | — | — | |||||||||||||||||||||||
Exercised | (5,250 | ) | $ | 29.11 | (83,500 | ) | $ | 29.88 | (15,000 | ) | $ | 26.9 | |||||||||||||||||
Expired or forfeited | — | — | — | — | — | $ | — | ||||||||||||||||||||||
Ending balance | 1,500 | $ | 36.03 | 6,750 | $ | 30.65 | 90,250 | $ | 29.94 | ||||||||||||||||||||
Number of options exercisable | 1,500 | $ | 36.03 | 6,750 | $ | 30.65 | 90,250 | $ | 29.94 | ||||||||||||||||||||
Summarized Information about Options Outstanding | The following table summarizes information about stock options outstanding as of December 31, 2014: | ||||||||||||||||||||||||||||
Price Range | Outstanding | Average | Average | Average Aggregate | Exercisable | Average | Average Aggregate | ||||||||||||||||||||||
Options | Remaining | Exercise Price | Intrinsic Value | Options | Exercise Price | Intrinsic Value | |||||||||||||||||||||||
Contract Life | |||||||||||||||||||||||||||||
$31 to $37 | 1,500 | 0.7 | $ | 36.03 | $ | 27.13 | 1,500 | $ | 36.03 | $ | 27.13 | ||||||||||||||||||
Total | 1,500 | 0.7 | 1,500 | ||||||||||||||||||||||||||
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary of Quarterly Financial Data | The following is a summary of quarterly financial data for the periods indicated: | ||||||||||||||||
In thousands, except per share amounts | March 31, | June 30, | September 30, | December 31, | |||||||||||||
2014 | 2014 | 2014 | 2014 | ||||||||||||||
Gross written premiums | $ | 422,790 | $ | 348,795 | $ | 327,469 | $ | 333,299 | |||||||||
Revenues: | |||||||||||||||||
Net written premiums | $ | 311,850 | $ | 231,864 | $ | 228,417 | $ | 228,007 | |||||||||
Change in unearned premiums | (86,578 | ) | (780 | ) | 16,950 | 6,165 | |||||||||||
Net earned premiums | 225,272 | 231,084 | 245,367 | 234,172 | |||||||||||||
Net investment income | 16,610 | 15,648 | 15,839 | 16,071 | |||||||||||||
Total other-than-temporary impairment losses | — | 158 | (21 | ) | |||||||||||||
Portion of loss recognized in other comprehensive income (before tax) | — | — | (158 | ) | 21 | ||||||||||||
Net other-than-temporary impairment losses recognized in earnings | — | — | — | ||||||||||||||
Net realized gains (losses) | 833 | 4,473 | 6,718 | 788 | |||||||||||||
Other income (expense) | 10,399 | (1,665 | ) | 1,336 | 586 | ||||||||||||
Total revenues | $ | 253,114 | $ | 249,540 | $ | 269,260 | $ | 251,617 | |||||||||
Expenses: | |||||||||||||||||
Net losses and loss adjustment expenses | $ | 135,067 | $ | 140,220 | $ | 135,284 | $ | 134,658 | |||||||||
Commission expenses | 25,727 | 32,150 | 33,943 | 33,708 | |||||||||||||
Other operating expenses | 47,146 | 47,992 | 50,388 | 51,299 | |||||||||||||
Call premium on Senior Notes | — | — | — | ||||||||||||||
Interest expense | 3,852 | 4,319 | 3,388 | 3,854 | |||||||||||||
Total expenses | $ | 211,792 | $ | 224,681 | $ | 223,003 | $ | 223,519 | |||||||||
Income before income taxes | 41,322 | 24,859 | 46,257 | 28,098 | |||||||||||||
Income tax expense | $ | 13,354 | $ | 7,998 | $ | 15,032 | $ | 8,823 | |||||||||
Net income | $ | 27,968 | $ | 16,861 | $ | 31,225 | $ | 19,275 | |||||||||
Comprehensive income (loss) | $ | 32,920 | $ | 32,965 | $ | 20,628 | $ | 27,015 | |||||||||
Combined ratio | 92.2 | % | 95.3 | % | 89.5 | % | 93.8 | % | |||||||||
Net income (loss) per share: | |||||||||||||||||
Basic | $ | 1.96 | $ | 1.18 | $ | 2.19 | $ | 1.35 | |||||||||
Diluted | $ | 1.94 | $ | 1.17 | $ | 2.14 | $ | 1.31 | |||||||||
In thousands, except per share amounts | March 31, | June 30, | September 30, | December 31, | |||||||||||||
2013 | 2013 | 2013 | 2013 | ||||||||||||||
Gross written premiums | $ | 393,222 | $ | 332,128 | $ | 312,076 | $ | 333,091 | |||||||||
Revenues: | |||||||||||||||||
Net written premiums | $ | 269,452 | $ | 198,469 | $ | 196,556 | $ | 223,445 | |||||||||
Change in unearned premiums | (67,124 | ) | 7,345 | 17,339 | (3,543 | ) | |||||||||||
Net earned premiums | 202,328 | 205,814 | 213,895 | 219,902 | |||||||||||||
Net investment income | 13,657 | 14,246 | 14,094 | 14,254 | |||||||||||||
Total other-than-temporary impairment losses | (42 | ) | — | (1,821 | ) | (530 | ) | ||||||||||
Portion of loss recognized in other comprehensive income (before tax) | — | — | — | — | |||||||||||||
Net other-than-temporary impairment losses recognized in earnings | (42 | ) | — | (1,821 | ) | (530 | ) | ||||||||||
Net realized gains | 4,814 | 3,345 | (988 | ) | 15,768 | ||||||||||||
Other income (expense) | 618 | (915 | ) | (210 | ) | (665 | ) | ||||||||||
Total revenues | $ | 221,375 | $ | 222,490 | $ | 224,970 | $ | 248,729 | |||||||||
Expenses: | |||||||||||||||||
Net losses and loss adjustment expenses | $ | 131,342 | $ | 131,148 | $ | 125,086 | $ | 131,385 | |||||||||
Commission expenses | 26,555 | 28,391 | 27,685 | 30,863 | |||||||||||||
Other operating expenses | 40,874 | 40,678 | 39,056 | 43,826 | |||||||||||||
Call premium on Senior Notes | — | — | — | 17,895 | |||||||||||||
Interest expense | 2,051 | 2,052 | 2,053 | 4,351 | |||||||||||||
Total expenses | $ | 200,822 | $ | 202,269 | $ | 193,880 | $ | 228,320 | |||||||||
Income before income taxes | 20,553 | 20,221 | 31,090 | 20,409 | |||||||||||||
Income tax expense | $ | 6,643 | $ | 6,284 | $ | 9,804 | $ | 6,076 | |||||||||
Net income | $ | 13,910 | $ | 13,937 | $ | 21,286 | $ | 14,333 | |||||||||
Comprehensive income | $ | 14,785 | $ | (24,829 | ) | $ | 25,462 | $ | 1,200 | ||||||||
Combined ratio | 97.9 | % | 97.7 | % | 89.8 | % | 94 | % | |||||||||
Net income per share: | |||||||||||||||||
Basic | $ | 0.99 | $ | 0.99 | $ | 1.5 | $ | 1.01 | |||||||||
Diluted | $ | 0.97 | $ | 0.97 | $ | 1.48 | $ | 1 |
Organization_and_Summary_of_Si
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Segment | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Number of underwriting segments | 2 | ||
Number of corporate segment | 1 | ||
Remeasurement of Foreign Currecy | $10,000,000 | ||
Remeasurement of Foreign currency, After tax | 6,600,000 | ||
Goodwill and other intangible assets | 7,013,000 | 7,177,000 | |
Minimum | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Maximum | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Property, Plant and Equipment, Useful Life | 7 years | ||
Navigators Insurance Company | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Percentage of Navigators Specialty Insurance Company reinsured by Navigators Insurance Company | 100.00% | ||
Lloyd's | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Goodwill | 2,400,000 | 2,400,000 | |
Other intangible assets | 2,100,000 | 2,300,000 | |
Lloyd's | Syndicate 1221 | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Percentage control of stamp capacity | 100.00% | 100.00% | 100.00% |
Underwriting Segments | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Goodwill | $2,500,000 | $2,500,000 |
Reconciliation_of_Basic_and_Di
Reconciliation of Basic and Diluted Earnings per Share Computations (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Per Share Disclosure [Line Items] | |||||||||||
Net income | $19,275 | $31,225 | $16,861 | $27,968 | $14,333 | $21,286 | $13,937 | $13,910 | $95,329 | $63,466 | $63,762 |
Basic weighted average shares | 14,259,768 | 14,133,925 | 14,052,311 | ||||||||
Effect of common stock equivalents: | |||||||||||
Assumed exercise of stock options and vesting of stock grants | 386,601 | 211,628 | 275,509 | ||||||||
Diluted weighted average shares | 14,646,369 | 14,345,553 | 14,327,820 | ||||||||
Net income per common share: | |||||||||||
Basic | $1.35 | $2.19 | $1.18 | $1.96 | $1.01 | $1.50 | $0.99 | $0.99 | $6.69 | $4.49 | $4.54 |
Diluted | $1.31 | $2.14 | $1.17 | $1.94 | $1 | $1.48 | $0.97 | $0.97 | $6.51 | $4.42 | $4.45 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Number of underwriting segments | 2 | ||||||||||
Number of corporate segment | 1 | ||||||||||
Combined ratio indicating underwriting profit | 100.00% | ||||||||||
Combined ratio indicating underwriting loss | 100.00% | ||||||||||
Net earned premiums | $234,172 | $245,367 | $231,084 | $225,272 | $219,902 | $213,895 | $205,814 | $202,328 | $935,895 | $841,939 | $781,964 |
Insurance Companies | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net earned premiums | 704,574 | 639,338 | 571,439 | ||||||||
Insurance Companies | UK Branch | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net earned premiums | $37,700 | $44,600 | $63,900 |
Financial_Data_by_Segment_Deta
Financial Data by Segment (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Gross written premiums | $333,299 | $327,469 | $348,795 | $422,790 | $333,091 | $312,076 | $332,128 | $393,222 | $1,432,353 | $1,370,517 | $1,286,465 | |||||
Net written premiums | 228,007 | 228,417 | 231,864 | 311,850 | 223,445 | 196,556 | 198,469 | 269,452 | 1,000,138 | 887,922 | 833,655 | |||||
Net earned premiums | 234,172 | 245,367 | 231,084 | 225,272 | 219,902 | 213,895 | 205,814 | 202,328 | 935,895 | 841,939 | 781,964 | |||||
Net losses and loss adjustment expenses | -134,658 | -135,284 | -140,220 | -135,067 | -131,385 | -125,086 | -131,148 | -131,342 | -545,229 | -518,961 | -497,433 | |||||
Commission expenses | -33,708 | -33,943 | -32,150 | -25,727 | -30,863 | -27,685 | -28,391 | -26,555 | -125,528 | -113,494 | -121,470 | |||||
Other operating expenses | -51,299 | -50,388 | -47,992 | -47,146 | -43,826 | -39,056 | -40,678 | -40,874 | -196,825 | -164,434 | -159,079 | |||||
Other underwriting income (expense) | 595 | |||||||||||||||
Other income (expense) | 586 | 1,336 | -1,665 | 10,399 | -665 | -210 | -915 | 618 | 10,656 | -1,172 | 1,488 | |||||
Underwriting profit (loss) | 68,908 | 43,878 | 5,470 | |||||||||||||
Net investment income | 16,071 | 15,839 | 15,648 | 16,610 | 14,254 | 14,094 | 14,246 | 13,657 | 64,168 | 56,251 | 54,248 | |||||
Net realized gains (losses) | 12,812 | 20,546 | 40,216 | |||||||||||||
Call premium on Senior Notes | -17,895 | -17,895 | ||||||||||||||
Interest expense | -3,854 | -3,388 | -4,319 | -3,852 | -4,351 | -2,053 | -2,052 | -2,051 | -15,413 | -10,507 | -8,198 | |||||
Other income (expense) | 10,061 | |||||||||||||||
Income (loss) before income taxes | 28,098 | 46,257 | 24,859 | 41,322 | 20,409 | 31,090 | 20,221 | 20,553 | 140,536 | 92,273 | 91,736 | |||||
Income tax expense (benefit) | 8,823 | 15,032 | 7,998 | 13,354 | 6,076 | 9,804 | 6,284 | 6,643 | 45,207 | 28,807 | 27,974 | |||||
Net income (loss) | 19,275 | 31,225 | 16,861 | 27,968 | 14,333 | 21,286 | 13,937 | 13,910 | 95,329 | 63,466 | 63,762 | |||||
Identifiable assets | 4,464,176 | 4,169,452 | 4,464,176 | 4,169,452 | 4,007,670 | |||||||||||
Losses and loss adjustment expenses ratio | 58.30% | 61.60% | 63.60% | |||||||||||||
Commission expense ratio | 13.40% | 13.50% | 15.50% | |||||||||||||
Other operating expense ratio | 20.90% | [1] | 19.70% | [2] | 20.20% | [2] | ||||||||||
Combined ratio | 93.80% | 89.50% | 95.30% | 92.20% | 94.00% | 89.80% | 97.70% | 97.90% | 92.60% | 94.80% | 99.30% | |||||
Insurance Companies | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Gross written premiums | 1,045,454 | 1,002,275 | 921,325 | |||||||||||||
Net written premiums | 752,773 | 680,008 | 622,956 | |||||||||||||
Net earned premiums | 704,574 | 639,338 | 571,439 | |||||||||||||
Net losses and loss adjustment expenses | -434,396 | -415,413 | -417,082 | |||||||||||||
Commission expenses | -85,137 | -81,132 | -81,370 | |||||||||||||
Other operating expenses | -138,675 | -119,920 | -113,625 | |||||||||||||
Other underwriting income (expense) | 2,727 | |||||||||||||||
Other income (expense) | 2,764 | 3,790 | ||||||||||||||
Underwriting profit (loss) | 49,093 | 25,637 | -36,848 | |||||||||||||
Net investment income | 56,714 | 49,083 | 46,549 | |||||||||||||
Net realized gains (losses) | 12,715 | 20,600 | 36,468 | |||||||||||||
Other income (expense) | -2,182 | |||||||||||||||
Income (loss) before income taxes | 116,340 | 95,320 | 46,169 | |||||||||||||
Income tax expense (benefit) | 36,609 | 29,965 | 12,686 | |||||||||||||
Net income (loss) | 79,731 | 65,355 | 33,483 | |||||||||||||
Identifiable assets | 3,344,084 | 3,077,437 | 3,344,084 | 3,077,437 | 3,036,489 | |||||||||||
Losses and loss adjustment expenses ratio | 61.70% | 65.00% | 73.00% | |||||||||||||
Commission expense ratio | 12.10% | 12.70% | 14.20% | |||||||||||||
Other operating expense ratio | 19.20% | [1] | 18.30% | [2] | 19.20% | [2] | ||||||||||
Combined ratio | 93.00% | 96.00% | 106.40% | |||||||||||||
Lloyd's | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Gross written premiums | 386,899 | 368,242 | 365,140 | |||||||||||||
Net written premiums | 247,365 | 207,914 | 210,699 | |||||||||||||
Net earned premiums | 231,321 | 202,601 | 210,525 | |||||||||||||
Net losses and loss adjustment expenses | -110,833 | -103,548 | -80,351 | |||||||||||||
Commission expenses | -42,558 | -34,710 | -42,449 | |||||||||||||
Other operating expenses | -58,150 | -44,514 | -45,454 | |||||||||||||
Other underwriting income (expense) | 35 | |||||||||||||||
Other income (expense) | -1,588 | 47 | ||||||||||||||
Underwriting profit (loss) | 19,815 | 18,241 | 42,318 | |||||||||||||
Net investment income | 7,378 | 7,160 | 7,551 | |||||||||||||
Net realized gains (losses) | 97 | -58 | 3,555 | |||||||||||||
Other income (expense) | 12,243 | |||||||||||||||
Income (loss) before income taxes | 39,533 | 25,343 | 53,424 | |||||||||||||
Income tax expense (benefit) | 13,885 | 8,728 | 18,620 | |||||||||||||
Net income (loss) | 25,648 | 16,615 | 34,804 | |||||||||||||
Identifiable assets | 957,795 | 930,567 | 957,795 | 930,567 | 928,448 | |||||||||||
Losses and loss adjustment expenses ratio | 47.90% | 51.10% | 38.20% | |||||||||||||
Commission expense ratio | 18.40% | 17.10% | 20.20% | |||||||||||||
Other operating expense ratio | 25.10% | [1] | 22.80% | [2] | 21.50% | [2] | ||||||||||
Combined ratio | 91.40% | 91.00% | 79.90% | |||||||||||||
Corporate | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Commission expenses | 2,167 | [3] | 2,348 | [3] | 2,349 | [3] | ||||||||||
Other underwriting income (expense) | -2,167 | [3] | ||||||||||||||
Other income (expense) | -2,348 | [3] | -2,349 | [3] | ||||||||||||
Net investment income | 76 | [3] | 8 | [3] | 148 | [3] | ||||||||||
Net realized gains (losses) | 4 | [3] | 193 | [3] | ||||||||||||
Call premium on Senior Notes | -17,895 | [3] | ||||||||||||||
Interest expense | -15,413 | [3] | -10,507 | [3] | -8,198 | [3] | ||||||||||
Income (loss) before income taxes | -15,337 | [3] | -28,390 | [3] | -7,857 | [3] | ||||||||||
Income tax expense (benefit) | -5,287 | [3] | -9,886 | [3] | -3,332 | [3] | ||||||||||
Net income (loss) | -10,050 | [3] | -18,504 | [3] | -4,525 | [3] | ||||||||||
Identifiable assets | $162,297 | [3] | $161,448 | [3] | $162,297 | [3] | $161,448 | [3] | $42,733 | [3] | ||||||
[1] | Includes Other operating expenses and Other underwriting income (expenses). | |||||||||||||||
[2] | Includes Other operating expenses and Other income. | |||||||||||||||
[3] | Includes Corporate segment intercompany eliminations. |
Additional_Financial_Data_by_S
Additional Financial Data by Segment (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||||||||||
Gross written premiums | $333,299 | $327,469 | $348,795 | $422,790 | $333,091 | $312,076 | $332,128 | $393,222 | $1,432,353 | $1,370,517 | $1,286,465 |
Net written premiums | 228,007 | 228,417 | 231,864 | 311,850 | 223,445 | 196,556 | 198,469 | 269,452 | 1,000,138 | 887,922 | 833,655 |
Net earned premiums | 234,172 | 245,367 | 231,084 | 225,272 | 219,902 | 213,895 | 205,814 | 202,328 | 935,895 | 841,939 | 781,964 |
Marine | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross written premiums | 365,470 | 352,868 | 394,518 | ||||||||
Net written premiums | 267,944 | 254,464 | 276,810 | ||||||||
Net earned premiums | 264,674 | 267,966 | 279,079 | ||||||||
Property Casualty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross written premiums | 881,075 | 829,609 | 717,769 | ||||||||
Net written premiums | 610,761 | 505,276 | 433,992 | ||||||||
Net earned premiums | 547,547 | 447,202 | 385,733 | ||||||||
Professional Liability | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross written premiums | 185,808 | 188,040 | 174,178 | ||||||||
Net written premiums | 121,433 | 128,182 | 122,853 | ||||||||
Net earned premiums | 123,674 | 126,771 | 117,152 | ||||||||
Insurance Companies | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross written premiums | 1,045,454 | 1,002,275 | 921,325 | ||||||||
Net written premiums | 752,773 | 680,008 | 622,956 | ||||||||
Net earned premiums | 704,574 | 639,338 | 571,439 | ||||||||
Insurance Companies | Marine | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross written premiums | 177,363 | 171,822 | 200,095 | ||||||||
Net written premiums | 123,617 | 119,837 | 133,210 | ||||||||
Net earned premiums | 123,203 | 129,276 | 142,181 | ||||||||
Insurance Companies | Property Casualty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross written premiums | 755,059 | 700,087 | 590,741 | ||||||||
Net written premiums | 554,844 | 462,942 | 390,168 | ||||||||
Net earned premiums | 496,209 | 409,480 | 332,782 | ||||||||
Insurance Companies | Professional Liability | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross written premiums | 113,032 | 130,366 | 130,489 | ||||||||
Net written premiums | 74,312 | 97,229 | 99,578 | ||||||||
Net earned premiums | 85,162 | 100,582 | 96,476 | ||||||||
Lloyd's | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross written premiums | 386,899 | 368,242 | 365,140 | ||||||||
Net written premiums | 247,365 | 207,914 | 210,699 | ||||||||
Net earned premiums | 231,321 | 202,601 | 210,525 | ||||||||
Lloyd's | Marine | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross written premiums | 188,107 | 181,046 | 194,423 | ||||||||
Net written premiums | 144,327 | 134,627 | 143,600 | ||||||||
Net earned premiums | 141,471 | 138,690 | 136,898 | ||||||||
Lloyd's | Property Casualty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross written premiums | 126,016 | 129,522 | 127,028 | ||||||||
Net written premiums | 55,917 | 42,334 | 43,824 | ||||||||
Net earned premiums | 51,338 | 37,722 | 52,951 | ||||||||
Lloyd's | Professional Liability | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross written premiums | 72,776 | 57,674 | 43,689 | ||||||||
Net written premiums | 47,121 | 30,953 | 23,275 | ||||||||
Net earned premiums | $38,512 | $26,189 | $20,676 |
Cash_and_Investments_Including
Cash and Investments Including Other-Than-Temporarily Impaired Securities Recognized within Accumulated Other Comprehensive Income (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Gain (Loss) on Investments [Line Items] | ||
Total investments | $2,550,229 | $2,191,827 |
Total investments and cash | 2,820,486 | 2,574,586 |
Gross Unrealized Gains | 83,078 | 69,554 |
Gross Unrealized Losses | -11,672 | -33,530 |
Amortized Cost | 2,749,080 | 2,538,562 |
Short-term investments | ||
Gain (Loss) on Investments [Line Items] | ||
Total investments and cash | 179,506 | 296,250 |
Gross Unrealized Losses | -21 | |
Amortized Cost | 179,527 | 296,250 |
Cash | ||
Gain (Loss) on Investments [Line Items] | ||
Total investments and cash | 90,751 | 86,509 |
Amortized Cost | 90,751 | 86,509 |
Fixed maturities | ||
Gain (Loss) on Investments [Line Items] | ||
Total investments | 2,365,934 | 2,047,873 |
Gross Unrealized Gains | 52,322 | 43,854 |
Gross Unrealized Losses | -10,347 | -32,980 |
Amortized Cost | 2,323,959 | 2,036,999 |
Fixed maturities | U.S. Treasury bonds, agency bonds, and foreign | ||
Gain (Loss) on Investments [Line Items] | ||
Total investments | 397,923 | 441,685 |
Gross Unrealized Gains | 3,431 | 2,854 |
Gross Unrealized Losses | -5,965 | -8,855 |
Amortized Cost | 400,457 | 447,686 |
Fixed maturities | States, municipalities and political subdivisions | ||
Gain (Loss) on Investments [Line Items] | ||
Total investments | 541,007 | 460,422 |
Gross Unrealized Gains | 19,204 | 9,298 |
Gross Unrealized Losses | -558 | -13,651 |
Amortized Cost | 522,361 | 464,775 |
Fixed maturities | Agency mortgage-backed securities | ||
Gain (Loss) on Investments [Line Items] | ||
Total investments | 364,622 | 301,274 |
Gross Unrealized Gains | 8,476 | 6,779 |
Gross Unrealized Losses | -998 | -6,016 |
Amortized Cost | 357,144 | 300,511 |
Fixed maturities | Residential Mortgage Backed Securities | ||
Gain (Loss) on Investments [Line Items] | ||
Total investments | 34,087 | 41,755 |
Gross Unrealized Gains | 1,153 | 1,212 |
Gross Unrealized Losses | -138 | -161 |
Amortized Cost | 33,072 | 40,704 |
Fixed maturities | Asset-backed securities | ||
Gain (Loss) on Investments [Line Items] | ||
Total investments | 206,413 | 125,133 |
Gross Unrealized Gains | 380 | 653 |
Gross Unrealized Losses | -964 | -480 |
Amortized Cost | 206,997 | 124,960 |
Fixed maturities | Commercial mortgage-backed securities | ||
Gain (Loss) on Investments [Line Items] | ||
Total investments | 206,318 | 172,750 |
Gross Unrealized Gains | 6,630 | 7,656 |
Gross Unrealized Losses | -98 | -374 |
Amortized Cost | 199,786 | 165,468 |
Fixed maturities | Mortgage-backed and asset-backed securities | ||
Gain (Loss) on Investments [Line Items] | ||
Total investments | 811,440 | 640,912 |
Gross Unrealized Gains | 16,639 | 16,300 |
Gross Unrealized Losses | -2,198 | -7,031 |
Amortized Cost | 796,999 | 631,643 |
Fixed maturities | Corporate bonds | ||
Gain (Loss) on Investments [Line Items] | ||
Total investments | 615,564 | 504,854 |
Gross Unrealized Gains | 13,048 | 15,402 |
Gross Unrealized Losses | -1,626 | -3,443 |
Amortized Cost | 604,142 | 492,895 |
Equity Securities | Common Stock | ||
Gain (Loss) on Investments [Line Items] | ||
Total investments | 127,183 | 143,954 |
Gross Unrealized Gains | 28,520 | 25,700 |
Gross Unrealized Losses | -1,254 | -550 |
Amortized Cost | 99,917 | 118,804 |
Equity Securities | Preferred Stock | ||
Gain (Loss) on Investments [Line Items] | ||
Total investments | 57,112 | |
Gross Unrealized Gains | 2,236 | |
Gross Unrealized Losses | -50 | |
Amortized Cost | $54,926 |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Securities | |||
Schedule of Investments [Line Items] | |||
Non-credit OTTI on fixed maturities in an unrealized gain position | $700,000 | $500,000 | |
Gross Unrealized Loss | 1,304,000 | 550,000 | |
Investment Expenses | 2,998,000 | 3,256,000 | 10,386,000 |
Investment performance fee | 2,800,000 | ||
Number of securities transferred from Level 3 to Level 2 | 1 | ||
Level 3 assets | 4,407,000 | 0 | |
Total Restricted Net Assets | 523,425,000 | 520,886,000 | |
Settlement Agreement | |||
Schedule of Investments [Line Items] | |||
Investment Expenses | 4,500,000 | ||
Mortgage-backed and asset-backed securities | |||
Schedule of Investments [Line Items] | |||
Securities, effective maturities | 4 years 4 months 24 days | ||
Equity Securities | Maximum | |||
Schedule of Investments [Line Items] | |||
Percentage of fair value under carrying value | 80.00% | ||
Non-government-backed securities | |||
Schedule of Investments [Line Items] | |||
Gross Unrealized Loss | $500,000 | $1,100,000 | |
Non-government-backed securities | Maximum | |||
Schedule of Investments [Line Items] | |||
Percentage of investment | 5.00% | 5.00% |
Scheduled_Maturity_Dates_for_F
Scheduled Maturity Dates for Fixed Maturity Securities by Number of Years Until Maturity (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value | ||
Due in one year or less | $63,670 | |
Due after one year through five years | 765,084 | |
Due after five years through ten years | 356,929 | |
Due after ten years | 368,811 | |
Mortgage- and asset-backed securities | 811,440 | |
Total | 2,365,934 | 2,047,873 |
Amortized Cost | ||
Due in one year or less | 65,643 | |
Due after one year through five years | 758,064 | |
Due after five years through ten years | 348,195 | |
Due after ten years | 355,058 | |
Mortgage- and asset-backed securities | 796,999 | |
Total | $2,323,959 | $2,036,999 |
Amount_and_Percentage_of_Fixed
Amount and Percentage of Fixed Maturities by Rating (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Investment Securities [Line Items] | ||
Rating | AA | |
Fair Value | $2,365,934 | $2,047,873 |
Percent of Total | 100.00% | |
Extremely strong | ||
Investment Securities [Line Items] | ||
Rating | AAA | |
Fair Value | 462,603 | |
Percent of Total | 20.00% | |
Very strong | ||
Investment Securities [Line Items] | ||
Rating | AA | |
Fair Value | 1,090,505 | |
Percent of Total | 45.00% | |
Strong | ||
Investment Securities [Line Items] | ||
Rating | A | |
Fair Value | 612,131 | |
Percent of Total | 26.00% | |
Adequate | ||
Investment Securities [Line Items] | ||
Rating | BBB | |
Fair Value | 185,372 | |
Percent of Total | 8.00% | |
Speculative | ||
Investment Securities [Line Items] | ||
Rating | BB & Below | |
Fair Value | 14,852 | |
Percent of Total | 1.00% | |
Not rated | ||
Investment Securities [Line Items] | ||
Rating | NR | |
Fair Value | $471 | |
Percent of Total | 0.00% |
Summary_of_Aggregate_Fair_Valu
Summary of Aggregate Fair Value and Gross Unrealized Loss by Length of Time Securities had Continuously been in Gross Unrealized Loss Position as Well as Number of Securities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Investment | Investment |
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 15 | 7 |
Fair Value | $19,928 | $10,925 |
Gross Unrealized Loss | 1,304 | 550 |
Fixed maturities | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 259 | 405 |
Fair Value | 731,346 | 934,607 |
Gross Unrealized Loss | 10,347 | 32,980 |
Fixed maturities | U.S. Treasury bonds, agency bonds, and foreign | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 50 | 53 |
Fair Value | 205,598 | 285,730 |
Gross Unrealized Loss | 5,965 | 8,855 |
Fixed maturities | U.S. Treasury bonds, agency bonds, and foreign | 0-6 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 19 | 27 |
Fair Value | 87,915 | 136,360 |
Gross Unrealized Loss | 1,061 | 1,096 |
Fixed maturities | U.S. Treasury bonds, agency bonds, and foreign | 7-12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 26 | |
Fair Value | 149,370 | |
Gross Unrealized Loss | 7,759 | |
Fixed maturities | U.S. Treasury bonds, agency bonds, and foreign | > 12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 31 | |
Fair Value | 117,683 | |
Gross Unrealized Loss | 4,904 | |
Fixed maturities | States, municipalities and political subdivisions | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 32 | 138 |
Fair Value | 53,689 | 257,641 |
Gross Unrealized Loss | 558 | 13,651 |
Fixed maturities | States, municipalities and political subdivisions | 0-6 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 13 | 28 |
Fair Value | 14,242 | 40,132 |
Gross Unrealized Loss | 41 | 297 |
Fixed maturities | States, municipalities and political subdivisions | 7-12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 2 | 104 |
Fair Value | 2,107 | 205,152 |
Gross Unrealized Loss | 19 | 12,100 |
Fixed maturities | States, municipalities and political subdivisions | > 12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 17 | 6 |
Fair Value | 37,340 | 12,357 |
Gross Unrealized Loss | 498 | 1,254 |
Fixed maturities | Agency mortgage-backed securities | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 52 | 112 |
Fair Value | 77,182 | 140,102 |
Gross Unrealized Loss | 998 | 6,016 |
Fixed maturities | Agency mortgage-backed securities | 0-6 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 4 | 39 |
Fair Value | 14,743 | 39,458 |
Gross Unrealized Loss | 52 | 434 |
Fixed maturities | Agency mortgage-backed securities | 7-12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 2 | 64 |
Fair Value | 4,138 | 77,860 |
Gross Unrealized Loss | 28 | 3,768 |
Fixed maturities | Agency mortgage-backed securities | > 12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 46 | 9 |
Fair Value | 58,301 | 22,784 |
Gross Unrealized Loss | 918 | 1,814 |
Fixed maturities | Residential Mortgage Backed Securities | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 22 | 25 |
Fair Value | 7,353 | 3,848 |
Gross Unrealized Loss | 138 | 161 |
Fixed maturities | Residential Mortgage Backed Securities | 0-6 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 6 | 3 |
Fair Value | 4,966 | 431 |
Gross Unrealized Loss | 43 | 2 |
Fixed maturities | Residential Mortgage Backed Securities | 7-12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 2 | 7 |
Fair Value | 659 | 950 |
Gross Unrealized Loss | 7 | 29 |
Fixed maturities | Residential Mortgage Backed Securities | > 12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 14 | 15 |
Fair Value | 1,728 | 2,467 |
Gross Unrealized Loss | 88 | 130 |
Fixed maturities | Asset-backed securities | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 25 | 15 |
Fair Value | 144,805 | 76,090 |
Gross Unrealized Loss | 964 | 480 |
Fixed maturities | Asset-backed securities | 0-6 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 19 | 14 |
Fair Value | 96,123 | 75,887 |
Gross Unrealized Loss | 354 | 479 |
Fixed maturities | Asset-backed securities | 7-12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 3 | 1 |
Fair Value | 14,152 | 203 |
Gross Unrealized Loss | 185 | 1 |
Fixed maturities | Asset-backed securities | > 12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 3 | |
Fair Value | 34,530 | |
Gross Unrealized Loss | 425 | |
Fixed maturities | Commercial mortgage-backed securities | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 8 | 10 |
Fair Value | 21,132 | 22,584 |
Gross Unrealized Loss | 98 | 374 |
Fixed maturities | Commercial mortgage-backed securities | 0-6 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 4 | 4 |
Fair Value | 18,665 | 6,712 |
Gross Unrealized Loss | 65 | 31 |
Fixed maturities | Commercial mortgage-backed securities | 7-12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 1 | 2 |
Fair Value | 1,076 | 15,098 |
Gross Unrealized Loss | 6 | 322 |
Fixed maturities | Commercial mortgage-backed securities | > 12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 3 | 4 |
Fair Value | 1,391 | 774 |
Gross Unrealized Loss | 27 | 21 |
Fixed maturities | Corporate bonds | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 70 | 52 |
Fair Value | 221,587 | 148,612 |
Gross Unrealized Loss | 1,626 | 3,443 |
Fixed maturities | Corporate bonds | 0-6 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 52 | 34 |
Fair Value | 179,390 | 93,591 |
Gross Unrealized Loss | 797 | 717 |
Fixed maturities | Corporate bonds | 7-12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 4 | 18 |
Fair Value | 11,071 | 55,021 |
Gross Unrealized Loss | 74 | 2,726 |
Fixed maturities | Corporate bonds | > 12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 14 | |
Fair Value | 31,126 | |
Gross Unrealized Loss | 755 | |
Common Stock | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 8 | 7 |
Fair Value | 13,277 | 10,925 |
Gross Unrealized Loss | 1,254 | 550 |
Common Stock | 0-6 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 6 | 5 |
Fair Value | 9,152 | 7,387 |
Gross Unrealized Loss | 761 | 422 |
Common Stock | 7-12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 1 | 2 |
Fair Value | 3,887 | 3,538 |
Gross Unrealized Loss | 486 | 128 |
Common Stock | > 12 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 1 | |
Fair Value | 238 | |
Gross Unrealized Loss | 7 | |
Preferred Stock | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 7 | |
Fair Value | 6,651 | |
Gross Unrealized Loss | 50 | |
Preferred Stock | 0-6 months | ||
Gain (Loss) on Investments [Line Items] | ||
Number of Securities | 7 | |
Fair Value | 6,651 | |
Gross Unrealized Loss | $50 |
Summary_of_Activity_Related_to
Summary of Activity Related to Other-Than-Temporary Impairment Losses (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Investment | Investment | Investment | ||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||||||
Number of Securities | 31 | 4 | 4 | |||||
Total other-than-temporary impairment losses | $21 | ($158) | $530 | $1,821 | $42 | ($137) | $2,393 | $902 |
Portion of loss recognized in other comprehensive income | 21 | -158 | -137 | 44 | ||||
Net other-than-temporary impairment losses recognized in earnings | 530 | 1,821 | 42 | 2,393 | 858 | |||
Corporate And Other Bonds | ||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||||||
Number of Securities | 1 | |||||||
Total other-than-temporary impairment losses | 1,822 | |||||||
Net other-than-temporary impairment losses recognized in earnings | 1,822 | |||||||
Residential Mortgage Backed Securities | ||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||||||
Number of Securities | 31 | 1 | ||||||
Total other-than-temporary impairment losses | -137 | 55 | ||||||
Portion of loss recognized in other comprehensive income | -137 | 44 | ||||||
Net other-than-temporary impairment losses recognized in earnings | 11 | |||||||
Equity Securities | ||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||||||
Number of Securities | 3 | 3 | ||||||
Total other-than-temporary impairment losses | 571 | 847 | ||||||
Net other-than-temporary impairment losses recognized in earnings | $571 | $847 |
Summary_of_Cumulative_Amounts_
Summary of Cumulative Amounts Related to Credit Loss Portion of Other-Than-Temporary Impairment Losses on Debt Securities (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||
Beginning balance | $5,154 | $3,332 | $3,321 |
Additions for credit loss impairments recognized in the current period on securities not previously impaired | 1,822 | ||
Additions for credit loss impairments recognized in the current period on securities previously impaired | 11 | ||
Reductions for credit loss impairments previously recognized on securities sold during the period | -2,793 | ||
Ending balance | $2,361 | $5,154 | $3,332 |
Contractual_Maturity_by_Number
Contractual Maturity by Number of Years Until Maturity for Fixed Maturity Securities with Gross Unrealized Loss (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Loss Amount | $1,304 | $550 |
Fair Value Amount | 19,928 | 10,925 |
Fixed maturities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Loss Amount | 10,347 | 32,980 |
Percent of Total Gross Unrealized Loss | 100.00% | |
Fair Value Amount | 731,346 | 934,607 |
Percent of Total Fair Value | 100.00% | |
Fixed maturities | Due in one year or less | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Loss Amount | 2,638 | |
Percent of Total Gross Unrealized Loss | 25.00% | |
Fair Value Amount | 21,919 | |
Percent of Total Fair Value | 3.00% | |
Fixed maturities | Due After One Year Through Five Years | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Loss Amount | 3,791 | |
Percent of Total Gross Unrealized Loss | 37.00% | |
Fair Value Amount | 334,046 | |
Percent of Total Fair Value | 46.00% | |
Fixed maturities | Due After Five Years Through Ten Years | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Loss Amount | 1,562 | |
Percent of Total Gross Unrealized Loss | 15.00% | |
Fair Value Amount | 103,376 | |
Percent of Total Fair Value | 14.00% | |
Fixed maturities | Due After Ten Years | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Loss Amount | 158 | |
Percent of Total Gross Unrealized Loss | 2.00% | |
Fair Value Amount | 21,533 | |
Percent of Total Fair Value | 3.00% | |
Fixed maturities | Mortgage- and asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Loss Amount | 2,198 | |
Percent of Total Gross Unrealized Loss | 21.00% | |
Fair Value Amount | $250,472 | |
Percent of Total Fair Value | 34.00% |
Net_Investment_Income_Detail
Net Investment Income (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net Investment Income [Line Items] | |||||||||||
Investment Income | $67,166 | $59,507 | $64,634 | ||||||||
Investment expenses | -2,998 | -3,256 | -10,386 | ||||||||
Net investment income | 16,071 | 15,839 | 15,648 | 16,610 | 14,254 | 14,094 | 14,246 | 13,657 | 64,168 | 56,251 | 54,248 |
Fixed maturities | |||||||||||
Net Investment Income [Line Items] | |||||||||||
Investment Income | 57,219 | 53,898 | 58,995 | ||||||||
Equity Securities | |||||||||||
Net Investment Income [Line Items] | |||||||||||
Investment Income | 9,036 | 4,835 | 3,945 | ||||||||
Short-term investments | |||||||||||
Net Investment Income [Line Items] | |||||||||||
Investment Income | $911 | $774 | $1,694 |
Change_in_Net_Unrealized_Gains
Change in Net Unrealized Gains and Losses (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Gross unrealized gains (losses) | $35,382 | ($67,337) | $9,720 |
Deferred income tax | 12,197 | -23,565 | 3,418 |
Change in net unrealized gains (losses), net | 23,185 | -43,772 | 6,302 |
Fixed maturities | |||
Gross unrealized gains (losses) | 31,080 | -76,194 | 15,709 |
Equity Securities | |||
Gross unrealized gains (losses) | $4,302 | $8,857 | ($5,989) |
Realized_Gains_and_Losses_Excl
Realized Gains and Losses, Excluding Net Other-Than-Temporary Impairment Losses Recognized in Earnings (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Gain (Loss) on Investments [Line Items] | |||||||||||
Net realized gains (losses) | $788 | $6,718 | $4,473 | $833 | $15,768 | ($988) | $3,345 | $4,814 | $12,812 | $22,939 | $41,074 |
Fixed maturities | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Gains | 8,326 | 8,539 | 28,789 | ||||||||
Losses | -2,610 | -2,797 | -1,915 | ||||||||
Net realized gains (losses) | 5,716 | 5,742 | 26,874 | ||||||||
Equity Securities | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Gains | 9,447 | 17,955 | 14,673 | ||||||||
Losses | -2,351 | -758 | -473 | ||||||||
Net realized gains (losses) | $7,096 | $17,197 | $14,200 |
Fixed_Maturities_and_Equity_Se
Fixed Maturities and Equity Securities by Asset Class that are Measured at Fair Value (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | $2,550,229 | $2,191,827 |
Fixed maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 2,365,934 | 2,047,873 |
Fixed maturities | U.S. Treasury bonds, agency bonds, and foreign | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 397,923 | 441,685 |
Fixed maturities | States, municipalities and political subdivisions | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 541,007 | 460,422 |
Fixed maturities | Agency mortgage-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 364,622 | 301,274 |
Fixed maturities | Residential Mortgage Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 34,087 | 41,755 |
Fixed maturities | Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 206,413 | 125,133 |
Fixed maturities | Commercial mortgage-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 206,318 | 172,750 |
Fixed maturities | Mortgage-backed and asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 811,440 | 640,912 |
Fixed maturities | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 615,564 | 504,854 |
Equity Securities | Common Stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 127,183 | 143,954 |
Equity Securities | Preferred Stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 57,112 | |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 274,087 | 386,333 |
Level 1 | Fixed maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 146,904 | 242,379 |
Level 1 | Fixed maturities | U.S. Treasury bonds, agency bonds, and foreign | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 146,904 | 242,379 |
Level 1 | Equity Securities | Common Stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 127,183 | 143,954 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 2,276,142 | 1,801,087 |
Level 2 | Fixed maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 2,219,030 | 1,801,087 |
Level 2 | Fixed maturities | U.S. Treasury bonds, agency bonds, and foreign | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 251,019 | 199,306 |
Level 2 | Fixed maturities | States, municipalities and political subdivisions | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 541,007 | 460,422 |
Level 2 | Fixed maturities | Agency mortgage-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 364,622 | 301,274 |
Level 2 | Fixed maturities | Residential Mortgage Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 34,087 | 41,755 |
Level 2 | Fixed maturities | Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 206,413 | 125,133 |
Level 2 | Fixed maturities | Commercial mortgage-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 206,318 | 172,750 |
Level 2 | Fixed maturities | Mortgage-backed and asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 811,440 | 640,912 |
Level 2 | Fixed maturities | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 615,564 | 500,447 |
Level 2 | Equity Securities | Preferred Stock | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 57,112 | |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 4,407 | |
Level 3 | Fixed maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | 4,407 | |
Level 3 | Fixed maturities | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities and equity securities, at fair Value | $4,407 |
Reconciliation_of_Beginning_an
Reconciliation of Beginning and Ending Balances for all Investments Measured at Fair Value Using Level 3 Inputs (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | $4,407 | $0 |
Realized Gains (Losses) | 0 | 0 |
Unrealized Gains (Losses) | -42 | |
Purchase | 4,660 | |
Sales | -211 | |
Settlements | 0 | 0 |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | -4,407 | |
Ending Balance | 4,407 | |
Corporate bonds | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 4,407 | |
Realized Gains (Losses) | 0 | |
Settlements | 0 | |
Transfers into Level 3 | 0 | |
Transfers out of Level 3 | -4,407 | |
Commercial mortgage-backed securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Realized Gains (Losses) | 0 | |
Unrealized Gains (Losses) | -42 | |
Purchase | 4,660 | |
Sales | -211 | |
Settlements | 0 | |
Transfers into Level 3 | 0 | |
Ending Balance | $4,407 |
Summary_of_Activity_in_Reserve
Summary of Activity in Reserve for Losses and Loss Adjustment Expenses (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserves for losses and LAE at beginning of year | $1,222,633 | $1,216,909 | $1,237,234 |
Provision for losses and LAE for claims occurring in the current year | 601,041 | 520,227 | 542,724 |
Increase (decrease) in estimated losses and LAE for claims occurring in prior years | -55,812 | -1,266 | -45,291 |
Incurred losses and LAE | 545,229 | 518,961 | 497,433 |
Losses and LAE paid for claims occurring during: | |||
Current year | -164,199 | -147,758 | -110,373 |
Prior years | -295,527 | -365,479 | -407,385 |
Losses and LAE payments | -459,726 | -513,237 | -517,758 |
Net reserves for losses and LAE at end of year | 1,308,136 | 1,222,633 | 1,216,909 |
Reinsurance recoverables on unpaid losses and LAE | 851,498 | 822,438 | 880,139 |
Gross reserves for losses and LAE at end of year | $2,159,634 | $2,045,071 | $2,097,048 |
Segment_And_Line_of_Business_B
Segment And Line of Business Breakdowns of Prior Period Net Reserve Deficiency (Redundancy) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | $55,812 | $1,266 | $45,291 |
Insurance Companies | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | -30,312 | 13,430 | 1,896 |
Insurance Companies | Marine | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | -41,388 | -15,227 | -10,010 |
Insurance Companies | Property Casualty | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 14,612 | 18,466 | 4,293 |
Insurance Companies | Professional Liability | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | -3,536 | 10,191 | 7,613 |
Lloyd's | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | -25,500 | -14,696 | -47,187 |
Lloyd's | Marine | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | -21,336 | -2,998 | -30,735 |
Lloyd's | Property Casualty | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | -1,500 | -14,574 | -6,890 |
Lloyd's | Professional Liability | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | ($2,664) | $2,876 | ($9,562) |
Reserves_for_Losses_and_Loss_A2
Reserves for Losses and Loss Adjustment Expenses - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | $55,812 | $1,266 | $45,291 |
Marine | Short Tail Marine Lines | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 2,600 | ||
Marine | Claims Emergence | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 4,000 | ||
Marine | Case Reserves | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 3,400 | ||
Insurance Companies | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | -30,312 | 13,430 | 1,896 |
Insurance Companies | Offshore Energy | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 8,000 | ||
Insurance Companies | Marine | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | -41,388 | -15,227 | -10,010 |
Insurance Companies | Marine | Marine Liability | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 13,400 | ||
Insurance Companies | Marine | Craft/Fishing Vassels | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 7,200 | ||
Insurance Companies | Marine | P&I | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 6,400 | ||
Insurance Companies | Marine | Inland Marine | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 4,700 | ||
Insurance Companies | Marine | Bluewater Hull | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 1,100 | ||
Insurance Companies | Marine | Cargo | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 700 | ||
Insurance Companies | Property Casualty | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 14,612 | 18,466 | 4,293 |
Insurance Companies | Property Casualty | Contractors | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 23,200 | 10,400 | |
Insurance Companies | Property Casualty | Claims Emergence | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 6,100 | ||
Insurance Companies | Property Casualty | Accident and Health | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 13,200 | 4,300 | |
Insurance Companies | Property Casualty | Business in run-off | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 2,100 | ||
Insurance Companies | Professional Liability | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | -3,536 | 10,191 | 7,613 |
Insurance Companies | Professional Liability | Errors and Omissions | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 4,400 | ||
Insurance Companies | Professional Liability | Management Liability | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 6,100 | ||
Insurance Companies | Professional Liability | Settlement | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 4,500 | ||
Lloyd's | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | -25,500 | -14,696 | -47,187 |
Lloyd's | Syndicate 1221 | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 5,000 | ||
Lloyd's | Marine | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | -21,336 | -2,998 | -30,735 |
Lloyd's | Marine | Marine Liability | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 11,000 | ||
Lloyd's | Marine | Cargo | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 1,000 | ||
Lloyd's | Marine | Specie | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 3,700 | ||
Lloyd's | Marine | Transport | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 1,300 | ||
Lloyd's | Marine | Energy Liability | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 2,300 | ||
Lloyd's | Marine | Marine Assumed | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 2,000 | ||
Lloyd's | Marine | Syndicate 1221 | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 4,100 | ||
Lloyd's | Property Casualty | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | -1,500 | -14,574 | -6,890 |
Lloyd's | Professional Liability | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | -2,664 | 2,876 | -9,562 |
Lloyd's | Professional Liability | Errors and Omissions | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 1,000 | 6,100 | |
Lloyd's | Professional Liability | Management Liability | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 1,700 | 3,200 | |
Lloyd's | Professional Liability | Syndicate 1221 | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | $900 |
Net_Prior_Period_Reserve_Redun
Net Prior Period Reserve Redundancies (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | ($55,812) | ($1,266) | ($45,291) |
Lloyd's | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 25,500 | 14,696 | 47,187 |
Lloyd's | 2010 | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 5,027 | ||
Lloyd's | 2009 | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 25,034 | ||
Lloyd's | 2008 and Prior | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 17,126 | ||
Marine | Lloyd's | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 21,336 | 2,998 | 30,735 |
Marine | Lloyd's | 2010 | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 3,492 | ||
Marine | Lloyd's | 2009 | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 14,792 | ||
Marine | Lloyd's | 2008 and Prior | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 12,451 | ||
Property Casualty | Lloyd's | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 1,500 | 14,574 | 6,890 |
Property Casualty | Lloyd's | 2010 | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 378 | ||
Property Casualty | Lloyd's | 2009 | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 4,170 | ||
Property Casualty | Lloyd's | 2008 and Prior | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 2,342 | ||
Professional Liability | Lloyd's | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 2,664 | -2,876 | 9,562 |
Professional Liability | Lloyd's | 2010 | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 1,157 | ||
Professional Liability | Lloyd's | 2009 | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | 6,072 | ||
Professional Liability | Lloyd's | 2008 and Prior | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Net reserve deficiencies (redundancies) in prior years | $2,333 |
Ceded_Reinsurance_Additional_I
Ceded Reinsurance - Additional Information (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Entity | ||||
Effects of Reinsurance [Line Items] | ||||
Ceded premiums earned | $440,656,000 | $455,985,000 | $396,639,000 | |
Ceded losses incurred | 230,182,000 | 188,733,000 | 262,649,000 | |
Reserve for uncollectible reinsurance amount | 11,300,000 | 11,300,000 | ||
Reinsurance rating description | To meet our standards of acceptability, when the reinsurance is placed, a reinsurer generally must have a rating from A.M. Best Company ("A.M. Best") and/or S&P of "A" or better, or an equivalent financial strength if not rated, plus at least $500 million in policyholders' surplus. | |||
Reinsurance recoverables | 1,140,696,000 | [1],[2],[3] | ||
Collateral Held | 201,976,000 | |||
Percentage of offsetting collateral held | 17.70% | |||
Percentage of reinsurance recoverable of 20 largest reinsurers | 75.70% | |||
Number of largest reinsurers | 20 | |||
Percentage of funding requirement to retain | 100.00% | |||
Reinsurance recoverables for paid and unpaid losses | 902,845,000 | |||
Not rated | ||||
Effects of Reinsurance [Line Items] | ||||
Reinsurance recoverables | 5,200,000 | |||
Percentage of offsetting collateral held | 53.60% | |||
Ceded Balances Payable | ||||
Effects of Reinsurance [Line Items] | ||||
Collateral Held | 152,800,000 | |||
Letter of Credit | ||||
Effects of Reinsurance [Line Items] | ||||
Collateral Held | 43,100,000 | |||
Percentage of collateral held | 21.00% | |||
All Other | ||||
Effects of Reinsurance [Line Items] | ||||
Collateral Held | 6,100,000 | |||
Catastrophic | ||||
Effects of Reinsurance [Line Items] | ||||
Reinsurance recoverables for paid and unpaid losses | 43,300,000 | 46,500,000 | ||
Superstorm Sandy | ||||
Effects of Reinsurance [Line Items] | ||||
Reinsurance recoverables for paid and unpaid losses | 25,400,000 | 30,700,000 | ||
Hurricane Gustav and Ike | ||||
Effects of Reinsurance [Line Items] | ||||
Reinsurance recoverables for paid and unpaid losses | 7,300,000 | 3,300,000 | ||
Minimum | ||||
Effects of Reinsurance [Line Items] | ||||
Policyholders' surplus for reinsurance | $500,000,000 | |||
Percentage of collateral required of qualifying reinsurers | 0.00% | |||
Maximum | ||||
Effects of Reinsurance [Line Items] | ||||
Percentage of collateral required of qualifying reinsurers | 100.00% | |||
[1] | Net of reserve for uncollectible reinsurance of approximately $11.3 million. | |||
[2] | When an A.M. Best rating is unavailable, the equivalent S&P rating is used. | |||
[3] | The carrying value is comprised of prepaid reinsurance premium as well as reinsurance recoverables on paid and unpaid losses which are net of the reserve for uncollectible reinsurance. |
Credit_Quality_Distribution_of
Credit Quality Distribution of Reinsurance Recoverables for Ceded Paid and Unpaid Losses and Loss Adjustment Expenses and Ceded Unearned Premiums Based On Insurer Financial Strength Ratings from A. M. Best or S&P (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | |
Ceded Credit Risk [Line Items] | ||
Rating | AA | |
Fair Value | $1,140,696 | [1],[2],[3] |
Percent of Total | 100.00% | [1] |
Superior | ||
Ceded Credit Risk [Line Items] | ||
Rating | A++, A+ | [1] |
Fair Value | 575,205 | [1],[3] |
Percent of Total | 50.00% | [1] |
Excellent | ||
Ceded Credit Risk [Line Items] | ||
Rating | A, A- | [1] |
Fair Value | 547,314 | [1],[3] |
Percent of Total | 48.00% | [1] |
Very Good | ||
Ceded Credit Risk [Line Items] | ||
Rating | B++, B+ | [1] |
Fair Value | 8,483 | [1],[3] |
Percent of Total | 1.00% | [1] |
Fair | ||
Ceded Credit Risk [Line Items] | ||
Rating | B, B- | [1] |
Percent of Total | 0.00% | [1] |
Not rated | ||
Ceded Credit Risk [Line Items] | ||
Rating | NR | [1] |
Fair Value | $9,695 | [1],[3] |
Percent of Total | 1.00% | [1] |
[1] | When an A.M. Best rating is unavailable, the equivalent S&P rating is used. | |
[2] | Net of reserve for uncollectible reinsurance of approximately $11.3 million. | |
[3] | The carrying value is comprised of prepaid reinsurance premium as well as reinsurance recoverables on paid and unpaid losses which are net of the reserve for uncollectible reinsurance. |
Lists_of_20_Largest_Reinsurers
Lists of 20 Largest Reinsurers Measured by Reinsurance Recoverable (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | |
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | $237,851 | $247,822 | |
Reinsurance Recoverables Paid/Unpaid Losses | 902,845 | ||
Reinsurance Recoverables Total | 1,140,696 | [1],[2],[3] | |
Collateral Held | 201,976 | ||
Rating | AA | ||
National Indemnity Company | AM Best, A++ Rating | Standard & Poor's, AA+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 25,202 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 117,562 | ||
Reinsurance Recoverables Total | 142,764 | [1] | |
Collateral Held | 22,069 | ||
Everest Reinsurance Company | AM Best, A+ Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 21,573 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 75,063 | ||
Reinsurance Recoverables Total | 96,636 | [1] | |
Collateral Held | 7,326 | ||
Swiss Reinsurance America Corporation | AM Best, A+ Rating | Standard & Poor's, AA- Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 22,815 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 73,305 | ||
Reinsurance Recoverables Total | 96,120 | [1] | |
Collateral Held | 14,587 | ||
Transatlantic Reinsurance Company | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 11,916 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 74,072 | ||
Reinsurance Recoverables Total | 85,988 | [1] | |
Collateral Held | 4,038 | ||
Munich Reinsurance America Inc. | AM Best, A+ Rating | Standard & Poor's, AA- Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 11,366 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 58,768 | ||
Reinsurance Recoverables Total | 70,134 | [1] | |
Collateral Held | 5,539 | ||
Allied World Reinsurance | AM Best, A Rating | Standard & Poor's, A Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 9,048 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 37,088 | ||
Reinsurance Recoverables Total | 46,136 | [1] | |
Collateral Held | 1,666 | ||
Lloyd Syndicate #2003 | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 4,399 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 35,123 | ||
Reinsurance Recoverables Total | 39,522 | [1] | |
Collateral Held | 5,191 | ||
Partner Reinsurance Europe | AM Best, A+ Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 10,986 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 25,409 | ||
Reinsurance Recoverables Total | 36,395 | [1] | |
Collateral Held | 16,052 | ||
Employers Mutual Casualty Company | AM Best, A Rating | Standard & Poor's, Not Rated | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 11,928 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 21,851 | ||
Reinsurance Recoverables Total | 33,779 | [1] | |
Collateral Held | 10,935 | ||
Scor Global P&C SE | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 10,190 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 17,572 | ||
Reinsurance Recoverables Total | 27,762 | [1] | |
Collateral Held | 5,558 | ||
Ace Property and Casualty Insurance Company | AM Best, A++ Rating | Standard & Poor's, AA Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 11,165 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 12,741 | ||
Reinsurance Recoverables Total | 23,906 | [1] | |
Collateral Held | 2,907 | ||
Tower Insurance Company | AM Best, A- Rating | Standard & Poor's, Not Rated | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Paid/Unpaid Losses | 21,509 | ||
Reinsurance Recoverables Total | 21,509 | [1] | |
Collateral Held | 2,455 | ||
Aspen Insurance UK Ltd. | AM Best, A Rating | Standard & Poor's, A Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 8,928 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 11,227 | ||
Reinsurance Recoverables Total | 20,155 | [1] | |
Collateral Held | 4,869 | ||
Ironshore Indemnity Inc. | AM Best, A Rating | Standard & Poor's, Not Rated | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 6,234 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 13,395 | ||
Reinsurance Recoverables Total | 19,629 | [1] | |
Collateral Held | 8,645 | ||
Validus Reinsurance Ltd | AM Best, A Rating | Standard & Poor's, A Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 2,020 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 16,873 | ||
Reinsurance Recoverables Total | 18,893 | [1] | |
Collateral Held | 10,975 | ||
Atlantic Specialty Insurance | AM Best, A Rating | Standard & Poor's, A- Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 2,542 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 15,812 | ||
Reinsurance Recoverables Total | 18,354 | [1] | |
QBE Reinsurance Corp | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 2,636 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 15,539 | ||
Reinsurance Recoverables Total | 18,175 | [1] | |
National Union Fire Ins. | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 8,067 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 8,459 | ||
Reinsurance Recoverables Total | 16,526 | [1] | |
Collateral Held | 6,158 | ||
Endurance Reinsurance Corporation | AM Best, A Rating | Standard & Poor's, A Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 5,695 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 9,936 | ||
Reinsurance Recoverables Total | 15,631 | [1] | |
Collateral Held | 1,337 | ||
Odyssey American Reinsurance Corporation | AM Best, A Rating | Standard & Poor's, A- Rating | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 3,506 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 11,650 | ||
Reinsurance Recoverables Total | 15,156 | [1] | |
Collateral Held | 1,604 | ||
Insurance Companies | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 190,216 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 672,954 | ||
Reinsurance Recoverables Total | 863,170 | [1] | |
Collateral Held | 131,911 | ||
All Other | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance Recoverables Unearned Premium | 47,635 | ||
Reinsurance Recoverables Paid/Unpaid Losses | 229,891 | ||
Reinsurance Recoverables Total | 277,526 | [1] | |
Collateral Held | $70,065 | ||
AM Best | National Indemnity Company | AM Best, A++ Rating | Standard & Poor's, AA+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A++ | ||
AM Best | Everest Reinsurance Company | AM Best, A+ Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A+ | ||
AM Best | Swiss Reinsurance America Corporation | AM Best, A+ Rating | Standard & Poor's, AA- Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A+ | ||
AM Best | Transatlantic Reinsurance Company | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
AM Best | Munich Reinsurance America Inc. | AM Best, A+ Rating | Standard & Poor's, AA- Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A+ | ||
AM Best | Allied World Reinsurance | AM Best, A Rating | Standard & Poor's, A Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
AM Best | Lloyd Syndicate #2003 | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
AM Best | Partner Reinsurance Europe | AM Best, A+ Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A+ | ||
AM Best | Employers Mutual Casualty Company | AM Best, A Rating | Standard & Poor's, Not Rated | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
AM Best | Scor Global P&C SE | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
AM Best | Ace Property and Casualty Insurance Company | AM Best, A++ Rating | Standard & Poor's, AA Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A++ | ||
AM Best | Tower Insurance Company | AM Best, A- Rating | Standard & Poor's, Not Rated | |||
Ceded Credit Risk [Line Items] | |||
Rating | A- | ||
AM Best | Aspen Insurance UK Ltd. | AM Best, A Rating | Standard & Poor's, A Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
AM Best | Ironshore Indemnity Inc. | AM Best, A Rating | Standard & Poor's, Not Rated | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
AM Best | Validus Reinsurance Ltd | AM Best, A Rating | Standard & Poor's, A Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
AM Best | Atlantic Specialty Insurance | AM Best, A Rating | Standard & Poor's, A- Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
AM Best | QBE Reinsurance Corp | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
AM Best | National Union Fire Ins. | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
AM Best | Endurance Reinsurance Corporation | AM Best, A Rating | Standard & Poor's, A Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
AM Best | Odyssey American Reinsurance Corporation | AM Best, A Rating | Standard & Poor's, A- Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
Standard & Poor's | National Indemnity Company | AM Best, A++ Rating | Standard & Poor's, AA+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | AA+ | ||
Standard & Poor's | Everest Reinsurance Company | AM Best, A+ Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A+ | ||
Standard & Poor's | Swiss Reinsurance America Corporation | AM Best, A+ Rating | Standard & Poor's, AA- Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | AA- | ||
Standard & Poor's | Transatlantic Reinsurance Company | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A+ | ||
Standard & Poor's | Munich Reinsurance America Inc. | AM Best, A+ Rating | Standard & Poor's, AA- Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | AA- | ||
Standard & Poor's | Allied World Reinsurance | AM Best, A Rating | Standard & Poor's, A Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
Standard & Poor's | Lloyd Syndicate #2003 | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A+ | ||
Standard & Poor's | Partner Reinsurance Europe | AM Best, A+ Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A+ | ||
Standard & Poor's | Employers Mutual Casualty Company | AM Best, A Rating | Standard & Poor's, Not Rated | |||
Ceded Credit Risk [Line Items] | |||
Rating | NR | ||
Standard & Poor's | Scor Global P&C SE | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A+ | ||
Standard & Poor's | Ace Property and Casualty Insurance Company | AM Best, A++ Rating | Standard & Poor's, AA Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | AA | ||
Standard & Poor's | Tower Insurance Company | AM Best, A- Rating | Standard & Poor's, Not Rated | |||
Ceded Credit Risk [Line Items] | |||
Rating | NR | ||
Standard & Poor's | Aspen Insurance UK Ltd. | AM Best, A Rating | Standard & Poor's, A Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
Standard & Poor's | Ironshore Indemnity Inc. | AM Best, A Rating | Standard & Poor's, Not Rated | |||
Ceded Credit Risk [Line Items] | |||
Rating | NR | ||
Standard & Poor's | Validus Reinsurance Ltd | AM Best, A Rating | Standard & Poor's, A Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
Standard & Poor's | Atlantic Specialty Insurance | AM Best, A Rating | Standard & Poor's, A- Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A- | ||
Standard & Poor's | QBE Reinsurance Corp | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A+ | ||
Standard & Poor's | National Union Fire Ins. | AM Best, A Rating | Standard & Poor's, A+ Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A+ | ||
Standard & Poor's | Endurance Reinsurance Corporation | AM Best, A Rating | Standard & Poor's, A Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A | ||
Standard & Poor's | Odyssey American Reinsurance Corporation | AM Best, A Rating | Standard & Poor's, A- Rating | |||
Ceded Credit Risk [Line Items] | |||
Rating | A- | ||
[1] | Net of reserve for uncollectible reinsurance of approximately $11.3 million. | ||
[2] | When an A.M. Best rating is unavailable, the equivalent S&P rating is used. | ||
[3] | The carrying value is comprised of prepaid reinsurance premium as well as reinsurance recoverables on paid and unpaid losses which are net of the reserve for uncollectible reinsurance. |
Lists_of_20_Largest_Reinsurers1
Lists of 20 Largest Reinsurers Measured by Reinsurance Recoverable (Parenthetical) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Ceded Credit Risk [Line Items] | ||
Reserve for uncollectible reinsurance amount | $11.30 | $11.30 |
Summary_of_Written_Premium_Det
Summary of Written Premium (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||||||||||
Direct | $1,184,538 | $1,127,331 | $1,034,658 | ||||||||
Assumed | 247,815 | 243,187 | 251,807 | ||||||||
Ceded | -432,215 | -482,596 | -452,810 | ||||||||
Net Written Premiums | 228,007 | 228,417 | 231,864 | 311,850 | 223,445 | 196,556 | 198,469 | 269,452 | 1,000,138 | 887,922 | 833,655 |
Direct | 1,133,336 | 1,069,677 | 972,844 | ||||||||
Assumed | 243,215 | 228,247 | 205,759 | ||||||||
Ceded | -440,656 | -455,985 | -396,639 | ||||||||
Net earned premiums | 234,172 | 245,367 | 231,084 | 225,272 | 219,902 | 213,895 | 205,814 | 202,328 | 935,895 | 841,939 | 781,964 |
Direct | 631,730 | 552,381 | 608,945 | ||||||||
Assumed | 143,681 | 155,313 | 151,137 | ||||||||
Ceded | -230,182 | -188,733 | -262,649 | ||||||||
Net Losses and LAE | $134,658 | $135,284 | $140,220 | $135,067 | $131,385 | $125,086 | $131,148 | $131,342 | $545,229 | $518,961 | $497,433 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 01, 2015 | |
Income Taxes [Line Items] | ||||||||||||
Domestic effective income tax rate | 35.00% | 35.00% | 35.00% | |||||||||
Undistributed earnings of non-U.S. subsidiaries | $22,600,000 | $22,600,000 | ||||||||||
Taxes payable on undistributed earnings | 2,300,000 | 2,300,000 | ||||||||||
Unrecognized tax benefits | 0 | 0 | 0 | 0 | ||||||||
Interest or penalties related to unrecognized tax benefits | 0 | 0 | ||||||||||
Income tax (benefit) expense | 8,823,000 | 15,032,000 | 7,998,000 | 13,354,000 | 6,076,000 | 9,804,000 | 6,284,000 | 6,643,000 | 45,207,000 | 28,807,000 | 27,974,000 | |
Effective income tax rate | 32.20% | 31.20% | 30.50% | |||||||||
Deferred Tax Assets: State and Local | 777,000 | 555,000 | 777,000 | 555,000 | ||||||||
State and local net operating loss carry-forwards | $0 | $100,000 | $0 | $100,000 | ||||||||
Syndicate 1221 | Subsequent Event | ||||||||||||
Income Taxes [Line Items] | ||||||||||||
Domestic effective income tax rate | 35.00% | |||||||||||
United Kingdom | ||||||||||||
Income Taxes [Line Items] | ||||||||||||
Foreign effective income tax rate | 35.00% | |||||||||||
United Kingdom | Syndicate 1221 | Maximum | ||||||||||||
Income Taxes [Line Items] | ||||||||||||
Percentage of premiums | 50.00% | 50.00% | ||||||||||
United Kingdom | Syndicate 1221 | Minimum | ||||||||||||
Income Taxes [Line Items] | ||||||||||||
Foreign effective income tax rate | 35.00% | |||||||||||
State and Local Jurisdiction | Maximum | ||||||||||||
Income Taxes [Line Items] | ||||||||||||
State and local tax carry-forwards expiration year | 2032 | |||||||||||
State and Local Jurisdiction | Minimum | ||||||||||||
Income Taxes [Line Items] | ||||||||||||
State and local tax carry-forwards expiration year | 2024 |
Components_of_Current_and_Defe
Components of Current and Deferred Income Tax Expense (Benefit) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current income tax expense (benefit): | |||||||||||
Federal and foreign | $27,290 | $23,703 | $39,242 | ||||||||
State and local | 1,036 | 446 | 146 | ||||||||
Subtotal | 28,326 | 24,149 | 39,388 | ||||||||
Deferred income tax expense (benefit): | |||||||||||
Federal and foreign | 16,881 | 4,658 | -11,414 | ||||||||
State and local | 0 | 0 | 0 | ||||||||
Subtotal | 16,881 | 4,658 | -11,414 | ||||||||
Actual tax expense and rate | $8,823 | $15,032 | $7,998 | $13,354 | $6,076 | $9,804 | $6,284 | $6,643 | $45,207 | $28,807 | $27,974 |
Reconciliation_of_Total_Income
Reconciliation of Total Income Taxes Applicable to Pre-Tax Operating Income and Amounts Computed by Applying Federal Statutory Income Tax Rate to Pre-Tax Operating Income (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation | |||||||||||
Computed expected tax expense | $49,187 | $32,299 | $32,109 | ||||||||
Tax-exempt interest | -4,771 | -3,839 | -4,443 | ||||||||
Dividends received deduction | -1,257 | -897 | -799 | ||||||||
Proration of DRD and Tax-exempt interest | 904 | 710 | 786 | ||||||||
Current state and local income taxes, net of federal income tax deduction | 674 | 290 | 95 | ||||||||
Other | 470 | 244 | 226 | ||||||||
Actual tax expense and rate | $8,823 | $15,032 | $7,998 | $13,354 | $6,076 | $9,804 | $6,284 | $6,643 | $45,207 | $28,807 | $27,974 |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation | |||||||||||
Computed expected tax expense | 35.00% | 35.00% | 35.00% | ||||||||
Tax-exempt interest | -3.40% | -4.20% | -4.80% | ||||||||
Dividends received deduction | -0.90% | -1.00% | -0.90% | ||||||||
Proration of DRD and Tax-exempt interest | 0.60% | 0.80% | 0.90% | ||||||||
Current state and local income taxes, net of federal income tax deduction | 0.50% | 0.30% | 0.10% | ||||||||
Other | 0.30% | 0.30% | 0.20% | ||||||||
Actual tax expense and rate | 32.20% | 31.20% | 30.50% |
Tax_Effects_of_Temporary_Diffe
Tax Effects of Temporary Differences That Give Rise to Federal, Foreign, State and Local Deferred Tax Assets and Deferred Tax Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
Loss reserve discount | $24,820 | $27,822 |
Unearned premiums | 29,080 | 25,706 |
Compensation related | 10,586 | 6,782 |
State and local net deferred tax assets | 777 | 555 |
Other | 1,834 | 3,889 |
Total gross deferred tax assets | 67,097 | 64,754 |
Less: Valuation allowance | -777 | -555 |
Total deferred tax assets | 66,320 | 64,199 |
Deferred tax liabilities: | ||
Net unrealized gains/losses on securities | -24,832 | -9,119 |
Deferred acquisition costs | -22,120 | -19,258 |
Net unrealized foreign exchange | -4,470 | -3,516 |
Other | -2,787 | -4,119 |
Total deferred tax liabilities | -67,787 | -40,393 |
Net deferred income tax (liability) | -1,467 | |
Net deferred income tax asset | 23,806 | |
Lloyd's | ||
Deferred tax liabilities: | ||
Lloyd's year of account deferral | ($13,578) | ($4,381) |
Credit_Facilities_Additional_I
Credit Facilities - Additional Information (Detail) | 12 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Mar. 28, 2011 | Dec. 31, 2014 | Dec. 31, 2014 | Nov. 06, 2014 | Nov. 06, 2014 | Nov. 06, 2014 | Dec. 31, 2014 | Nov. 22, 2012 | Nov. 22, 2012 |
USD ($) | Line of Credit | Syndicate 1221 | Syndicate 1221 | Syndicate 1221 | Syndicate 1221 | Syndicate 1221 | Amended and Restated Credit Agreement | Amended and Restated Credit Agreement | ||
USD ($) | AUD | GBP (£) | Above Floating Rate | Lloyd's | USD ($) | |||||
Line of Credit | USD ($) | |||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing amount | 8 | |||||||||
Line of credit facility, underwriting reserve required | 75 | |||||||||
Line of credit facility, covenant compliance | The Company was in compliance with all covenants under the credit facility as of December 31, 2014 and the Company had $1.0 million of cash collateral posted. | As of December 31, 2014, our Company was in compliance with all covenants. | ||||||||
Line of credit facility, interest rate | 2.00% | |||||||||
Line of credit facility | 175 | 165 | ||||||||
Issuance of new letters of credit, expiry date | 31-Dec-16 | |||||||||
Aggregate face amount of letters of credit outstanding | 149.4 | |||||||||
Cash collateral posted | $1 | $1 | ||||||||
Line of credit facility, covenant terms | This credit facility contains customary covenants for facilities of this type, including restrictions on indebtedness and liens, limitations on mergers, dividends and the sale of assets, and requirements as to maintaining certain consolidated tangible net worth, statutory surplus and other financial ratios. The credit facility also provides for customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, any representation or warranty made by the Company being false in any material respect, default under certain other indebtedness, certain insolvency or receivership events affecting the Company and its subsidiaries, the occurrence of certain material judgments, or a change in control of the Company. |
Senior_Notes_Additional_Inform
Senior Notes - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 04, 2013 | |
Debt Instrument [Line Items] | ||||||||||||
Interest rate stated on senior notes | 7.00% | 7.00% | ||||||||||
Senior notes due date | 1-May-16 | |||||||||||
Call premium on redemption of Senior Notes | ($17,895,000) | ($17,895,000) | ||||||||||
Interest expense | 3,854,000 | 3,388,000 | 4,319,000 | 3,852,000 | 4,351,000 | 2,053,000 | 2,052,000 | 2,051,000 | 15,413,000 | 10,507,000 | 8,198,000 | |
Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Unamortized discount | 1,600,000 | 1,700,000 | 1,600,000 | 1,700,000 | ||||||||
Interest expense | 10,500,000 | |||||||||||
Senior Notes | 5.75% Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount of senior notes | 265,000,000 | |||||||||||
Interest rate stated on senior notes | 5.75% | |||||||||||
Senior notes due date | 15-Oct-23 | |||||||||||
Net proceeds from issuance of senior notes | 263,000,000 | |||||||||||
Outstanding principal amount of senior notes | 263,400,000 | 263,300,000 | 263,400,000 | 263,300,000 | ||||||||
Fair value of senior notes | 285,700,000 | 277,600,000 | 285,700,000 | 277,600,000 | ||||||||
Effective interest rate related to senior notes | 5.86% | 5.86% | ||||||||||
Interest expense | 15,400,000 | |||||||||||
Debt instrument, covenant compliance | As of December 31, 2014, our Company was in compliance with all such covenants. | |||||||||||
Senior Notes | 5.75% Senior Notes | Semi Annual Payment, First Payment | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest payment date on senior notes | -11 | |||||||||||
Senior Notes | 5.75% Senior Notes | Semi Annual Payment, Second Payment | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest payment date on senior notes | -5 | |||||||||||
Senior Notes | 7.0% Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate stated on senior notes | 7.00% | 7.00% | ||||||||||
Senior notes due date | 1-May-16 | |||||||||||
Call premium on redemption of Senior Notes | 17,900,000 | |||||||||||
Interest expense on senior notes | $8,200,000 |
Lloyds_Syndicate_1221_Addition
Lloyd's Syndicate 1221 - Additional Information (Detail) (Lloyd's, Syndicate 1221) | 3 Months Ended | 12 Months Ended | ||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | USD ($) | GBP (£) | USD ($) | GBP (£) | ||
Supplementary Insurance Information, by Segment [Line Items] | ||||||
Syndicate 1221's stamp capacity | $336.90 | £ 215 | $323.70 | £ 195 | ||
Percentage control of stamp capacity | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | |
Pre-tax gain in connection with a change in functional currency | 10 | |||||
After-tax gain in connection with a change in functional currency | $6.60 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Loss Contingencies [Line Items] | |||
Rent expense | $13.20 | $11.50 | $10.50 |
Incentive awarded to the company by the State of Connecticut, total | 11.5 | ||
Incentive awarded to the company by the State of Connecticut, non-interest bearing loans | 8 | ||
Incentive awarded to the company by the State of Connecticut, grants | 3.5 | ||
Non-interest bearing incentive loan term | 10 years | ||
Incentive awarded to the company by the State of Connecticut, revenue recognized | 1.1 | 0.3 | |
Incentive awarded to the company by the State of Connecticut, deferred revenue | $6.10 | $7.50 | |
Maximum | |||
Loss Contingencies [Line Items] | |||
Noncancellable operating leases expiration year | 2023 |
Future_Minimum_Annual_Rental_C
Future Minimum Annual Rental Commitments Under Various Noncancellable Operating Leases (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Operating Leased Assets [Line Items] | |
2015 | $11,245 |
2016 | 9,234 |
2017 | 7,942 |
2018 | 6,907 |
2019 | 4,258 |
Thereafter | 12,811 |
Total minimum operating lease payments | $52,397 |
Share_Capital_and_Share_Repurc
Share Capital and Share Repurchases - Additional Information (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Equity, Class of Treasury Stock [Line Items] | ||
Common stock, authorized shares | 50,000,000 | 50,000,000 |
Common stock, par value | $0.10 | $0.10 |
Preferred stock, authorized shares | 1,000,000 | 1,000,000 |
Preferred stock, par value | $0.10 | $0.10 |
Changes_in_Issued_and_Outstand
Changes in Issued and Outstanding Common Shares (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Beginning balance | 14,198,000 | 14,047,000 | 13,956,000 |
Vested stock grants | 59,000 | 50,000 | 60,000 |
Employee stock purchase plan | 19,386 | 17,000 | 16,000 |
Stock options exercised | 5,250 | 83,500 | 15,000 |
Treasury shares purchased | 0 | 0 | 0 |
Ending balance | 14,281,000 | 14,198,000 | 14,047,000 |
Amount_and_Nature_of_Net_Asset
Amount and Nature of Net Assets Restricted from Payment of Dividends (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Restricted Assets And Liabilities Relating To Securitization [Line Items] | ||||
Total Restricted Net Assets | $523,425 | $520,886 | ||
Insurance Companies | ||||
Restricted Assets And Liabilities Relating To Securitization [Line Items] | ||||
Total Restricted Net Assets | 13,234 | [1] | 12,605 | [1] |
Insurance Companies | Fixed maturities | ||||
Restricted Assets And Liabilities Relating To Securitization [Line Items] | ||||
Total Restricted Net Assets | 11,732 | 11,105 | ||
Insurance Companies | Short-term investments | ||||
Restricted Assets And Liabilities Relating To Securitization [Line Items] | ||||
Total Restricted Net Assets | 290 | 290 | ||
Insurance Companies | Cash | ||||
Restricted Assets And Liabilities Relating To Securitization [Line Items] | ||||
Total Restricted Net Assets | 1,212 | 1,210 | ||
Lloyd's | ||||
Restricted Assets And Liabilities Relating To Securitization [Line Items] | ||||
Total Restricted Net Assets | 510,191 | [2] | 508,281 | [2] |
Lloyd's | Fixed maturities | ||||
Restricted Assets And Liabilities Relating To Securitization [Line Items] | ||||
Total Restricted Net Assets | 447,679 | 398,808 | ||
Lloyd's | Short-term investments | ||||
Restricted Assets And Liabilities Relating To Securitization [Line Items] | ||||
Total Restricted Net Assets | 61,549 | 108,485 | ||
Lloyd's | Cash | ||||
Restricted Assets And Liabilities Relating To Securitization [Line Items] | ||||
Total Restricted Net Assets | $963 | $988 | ||
[1] | The restricted net assets for the Insurance Companies primarily consist of fixed maturities on deposit with various state insurance departments. The cash as of December 31, 2014 and 2013, as presented in the table above, was on deposit with a U.K. bank to comply with the regulatory requirements of the Prudential Regulation Authority for the underwriting activities of the U.K. Branch. | |||
[2] | The restricted net assets for the Lloyd's Operations consists of fixed maturities and cash held in trust for the benefit of syndicate policyholders and short term investments primarily consisting of overseas deposits in various countries with Lloyd's to support underwriting activities in those countries. |
Amount_and_Nature_of_Net_Asset1
Amount and Nature of Net Assets Restricted from Payment of Dividends (Parenthetical) (Detail) (Fixed maturities, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Insurance Companies | ||
Restricted Assets And Liabilities Relating To Securitization [Line Items] | ||
Restricted net assets, amortized cost | $10,086 | $9,730 |
Lloyd's | ||
Restricted Assets And Liabilities Relating To Securitization [Line Items] | ||
Restricted net assets, amortized cost | $445,504 | $398,930 |
Dividends_and_Statutory_Financ2
Dividends and Statutory Financial Information - Additional Information (Detail) | 1 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||
Nov. 30, 2013 | Nov. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | GBP (£) | USD ($) | GBP (£) | Navigators Insurance Company | Navigators Insurance Company | Navigators Insurance Company | Insurance Companies | Insurance Companies | Insurance Companies | Insurance Companies | Insurance Companies | Lloyd's | Lloyd's | Lloyd's | Lloyd's | Lloyd's | Lloyd's | Lloyd's | Lloyd's | Lloyd's | Lloyd's | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Minimum | Maximum | USD ($) | USD ($) | USD ($) | GBP (£) | GBP (£) | Syndicate 1221 | Syndicate 1221 | Syndicate 1221 | Syndicate 1221 | Syndicate 1221 | ||||||
USD ($) | GBP (£) | USD ($) | GBP (£) | |||||||||||||||||||
Statutory Accounting Practices [Line Items] | ||||||||||||||||||||||
Maximum amount available for payment of dividends without prior regulatory approval | $89,400,000 | |||||||||||||||||||||
Dividends paid to Parent Company | 15,000,000 | |||||||||||||||||||||
Statutory net income | 75,700,000 | 59,400,000 | 28,600,000 | |||||||||||||||||||
Statutory capital and surplus | 893,900,000 | 804,100,000 | 140,100,000 | 124,200,000 | 89,400,000 | 74,800,000 | ||||||||||||||||
Risk based capital ratio | 314.80% | 304.20% | ||||||||||||||||||||
Insurance examinations period | 3 years | 5 years | ||||||||||||||||||||
FAL requirement set by Lloyd's for Syndicate 1221 based on its business plan, approved in November 2014 and 2013 | 268,100,000 | 279,300,000 | 171,100,000 | 168,300,000 | ||||||||||||||||||
Valuation of assets and letters of credit posted | 290,100,000 | 185,100,000 | 280,200,000 | 168,800,000 | ||||||||||||||||||
Pre-tax regulatory income | 33,800,000 | 21,000,000 | 54,900,000 | |||||||||||||||||||
Percentage control of stamp capacity | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | |||||||||||||||||
Undistributed Profit | 139,900,000 | 89,300,000 | ||||||||||||||||||||
Dividend Capacity | $9,900,000 | £ 6,300,000 |
Stock_Option_Plans_Stock_Grant2
Stock Option Plans, Stock Grants, Stock Appreciation Rights and Employee Stock Purchase Plan - Additional Information (Detail) (USD $) | 12 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2005 | Apr. 30, 2013 | Apr. 30, 2009 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance based shares that vested | 183,716 | 133,482 | 138,321 | |||
Fair value of total vested shares | $5,100,000 | $3,500,000 | $4,600,000 | |||
Percentage of employees base compensation through payroll that can be invested for the purchase of common stock, maximum | 10.00% | |||||
Number of shares which can be acquired by employee, maximum | 1,000 | |||||
Total market value of shares that can be acquired by employee | 25,000 | |||||
Employee Stock Purchase Plan, shares to be purchased in following period | 9,509 | |||||
Employee Stock Purchase Plan, shares purchased by employees | 19,386 | 17,000 | 16,000 | |||
Discount on employee stock purchase plan | 10.00% | |||||
Performance Based Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance based shares that vested | 0 | 15,714 | 0 | |||
Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options expiration term (in years) | 10 years | |||||
Options and Non Performance Based Grants | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based payment award, award vesting period | 3 years | |||||
Options and Non Performance Based Grants | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based payment award, award vesting period | 4 years | |||||
Non Performance Based Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based payment award, award vesting period | 5 years | |||||
Performance based shares that vested | 90,263 | 60,183 | 91,323 | |||
Non Performance Based Shares | Year Three | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares vesting over the period | 33.33% | |||||
Non Performance Based Shares | Year Four | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares vesting over the period | 33.33% | |||||
Non Performance Based Shares | Year Five | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares vesting over the period | 33.33% | |||||
Performance Based Shares Issued in 2014 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of remaining shares vesting over the period dependent on compound annual growth book value per share immediately prior to vesting date | 100.00% | |||||
Performance Based Shares Issued in 2014 | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares vesting over the period | 50.00% | |||||
Performance Based Shares Issued in 2014 | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares vesting over the period | 150.00% | |||||
Performance Based Shares Issued Between 2011-2013 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares vesting over the period | 50.00% | |||||
Percentage of remaining shares vesting over the period dependent on compound annual growth book value per share immediately prior to vesting date | 50.00% | |||||
Performance Based Shares Issued Between 2011-2013 | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares vesting over the period | 0.00% | |||||
Performance Based Shares Issued Between 2011-2013 | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares vesting over the period | 150.00% | |||||
Performance Based Shares Issued Prior to 2011 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based payment award, award vesting period | 5 years | |||||
Performance Based Shares Issued Prior to 2011 | Year Three | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares vesting over the period | 33.33% | |||||
Performance Based Shares Issued Prior to 2011 | Year Four | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares vesting over the period | 33.33% | |||||
Performance Based Shares Issued Prior to 2011 | Year Five | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares vesting over the period | 33.33% | |||||
Performance Based Shares Issued Prior to 2011 | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares vesting over the period | 0.00% | |||||
Performance Based Shares Issued Prior to 2011 | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares vesting over the period | 150.00% | |||||
Restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted average grant date fair value of all RSU granted | $60.75 | $55.36 | $48.21 | |||
Unrecognized compensation expense, net of estimated forfeitures | 16,300,000 | 10,600,000 | ||||
Weighted Average Periods | 2 years 3 months 18 days | 2 years 3 months 12 days | ||||
Aggregate fair value of all unvested RSU | $46,100,000 | $39,600,000 | ||||
Employee stock purchase plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Exercise price as percentage of fair market value | 90.00% | |||||
2005 Stock Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of stock authorized for issuance | 1,000,000 | |||||
Amended And Restated 2005 Stock Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of stock authorized for issuance | 2,000,000 | 1,500,000 | ||||
Stock issued during period under incentive plan | 1,523,228 | |||||
Number of stock available to be issued | 476,772 |
Amounts_Charged_to_Expense_for
Amounts Charged to Expense for Stock-based Compensation (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock based compensation | $12,121 | $3,914 | $7,852 | |||
Restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock based compensation | 11,507 | 3,369 | 7,380 | |||
Directors restricted stock grants | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock based compensation | 420 | [1] | 413 | [1] | 390 | [1] |
Employee stock purchase plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock based compensation | $194 | $132 | $82 | |||
[1] | Relates to non-employee directors serving on the Parent Company's Board of Directors, all of whom have been elected by the Company's stockholders, as well as non-employee directors serving on NUAL's Board of Directors. |
Unvested_Restricted_Stock_Gran
Unvested Restricted Stock Grants Outstanding (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Beginning balance | 626,812 | 587,629 | 526,972 |
Granted | 288,130 | 269,926 | 244,060 |
Vested | -183,716 | -133,482 | -138,321 |
Forfeited | -12,334 | -97,261 | -45,082 |
Ending balance | 718,892 | 626,812 | 587,629 |
Performance Based Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted | 228,607 | 114,463 | 97,145 |
Performance Based Shares | Earned | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vested | -15,714 | ||
Performance Based Shares | Unearned | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vested | -93,453 | -57,585 | -46,998 |
Non Performance Based Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted | 59,523 | 155,463 | 146,915 |
Vested | -90,263 | -60,183 | -91,323 |
Stock_Options_Outstanding_Deta
Stock Options Outstanding (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Number of Shares | |||
Beginning balance | 6,750 | 90,250 | 105,250 |
Granted | 0 | 0 | 0 |
Exercised | -5,250 | -83,500 | -15,000 |
Expired or forfeited | 0 | 0 | 0 |
Ending balance | 1,500 | 6,750 | 90,250 |
Number of options exercisable | 1,500 | 6,750 | 90,250 |
Average Exercise Price | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning of Period | $30.65 | $29.94 | $29.50 |
Granted | $0 | $0 | $0 |
Exercised | $29.11 | $29.88 | $26.90 |
Expired or forfeited | $0 | $0 | $0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, End of Period | $36.03 | $30.65 | $29.94 |
Number of options exercisable | $36.03 | $30.65 | $29.94 |
Summarized_Information_about_O
Summarized Information about Options Outstanding (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Options | 1,500 |
Average Remaining Contract Life | 8 months 12 days |
Exercisable Options | 1,500 |
Price Range $31 to $37 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Price Range, Lower Range | 31 |
Price Range, Upper Range | 37 |
Outstanding Options | 1,500 |
Average Remaining Contract Life | 8 months 12 days |
Average Exercise Price | 36.03 |
Average Aggregate Intrinsic Value | 27.13 |
Exercisable Options | 1,500 |
Average Exercise Price | 36.03 |
Average Aggregate Intrinsic Value of Exercisable Options | 27.13 |
Retirement_Plans_Additional_In
Retirement Plans - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Employee Benefits Disclosure [Line Items] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 100.00% | 100.00% | 100.00% |
Employees contribution to 401(k) plan that is 100 % matched by employer | 4.00% | 4.00% | 4.00% |
Defined Contribution Plan, employer discretionary matching contribution percent | 3.00% | 2.00% | 0.00% |
Defined Contribution Plan, employer discretionary matching contribution amount | $1.60 | $0.80 | $0 |
401(k) plan expense | 7.5 | 5.1 | 4.6 |
Retirement Savings Contributions | |||
Employee Benefits Disclosure [Line Items] | |||
401(k) plan expense | 3.8 | 2.7 | 2.5 |
Non Discretionary Matching Contributions | |||
Employee Benefits Disclosure [Line Items] | |||
401(k) plan expense | 2.1 | 1.6 | 2.1 |
Maximum | |||
Employee Benefits Disclosure [Line Items] | |||
Discretion of contribution to each eligible employee's 401(k) plan irrespective of the employees' contribution | 4.00% | ||
United States | |||
Employee Benefits Disclosure [Line Items] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 7.50% | ||
Defined contribution plan employees vesting percentage beginning at the end of their second year | 20.00% | ||
Defined contribution plan additional employees vesting percentage being fully vested | 6 years | ||
United Kingdom | |||
Employee Benefits Disclosure [Line Items] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 15.00% | ||
401(k) plan expense | $2.60 | $2.20 | $1.90 |
Summary_of_Quarterly_Financial
Summary of Quarterly Financial Data (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Gross written premiums | $333,299 | $327,469 | $348,795 | $422,790 | $333,091 | $312,076 | $332,128 | $393,222 | $1,432,353 | $1,370,517 | $1,286,465 |
Revenues: | |||||||||||
Net written premiums | 228,007 | 228,417 | 231,864 | 311,850 | 223,445 | 196,556 | 198,469 | 269,452 | 1,000,138 | 887,922 | 833,655 |
Change in unearned premiums | 6,165 | 16,950 | -780 | -86,578 | -3,543 | 17,339 | 7,345 | -67,124 | -64,243 | -45,983 | -51,691 |
Net earned premiums | 234,172 | 245,367 | 231,084 | 225,272 | 219,902 | 213,895 | 205,814 | 202,328 | 935,895 | 841,939 | 781,964 |
Net investment income | 16,071 | 15,839 | 15,648 | 16,610 | 14,254 | 14,094 | 14,246 | 13,657 | 64,168 | 56,251 | 54,248 |
Total other-than-temporary impairment losses | -21 | 158 | -530 | -1,821 | -42 | 137 | -2,393 | -902 | |||
Portion of loss recognized in other comprehensive income (before tax) | 21 | -158 | -137 | 44 | |||||||
Net other-than-temporary impairment losses recognized in earnings | -530 | -1,821 | -42 | -2,393 | -858 | ||||||
Net realized gains (losses) | 788 | 6,718 | 4,473 | 833 | 15,768 | -988 | 3,345 | 4,814 | 12,812 | 22,939 | 41,074 |
Other income (expense) | 586 | 1,336 | -1,665 | 10,399 | -665 | -210 | -915 | 618 | 10,656 | -1,172 | 1,488 |
Total revenues | 251,617 | 269,260 | 249,540 | 253,114 | 248,729 | 224,970 | 222,490 | 221,375 | 1,023,531 | 917,564 | 877,916 |
Expenses: | |||||||||||
Net losses and loss adjustment expenses | 134,658 | 135,284 | 140,220 | 135,067 | 131,385 | 125,086 | 131,148 | 131,342 | 545,229 | 518,961 | 497,433 |
Commission expenses | 33,708 | 33,943 | 32,150 | 25,727 | 30,863 | 27,685 | 28,391 | 26,555 | 125,528 | 113,494 | 121,470 |
Other operating expenses | 51,299 | 50,388 | 47,992 | 47,146 | 43,826 | 39,056 | 40,678 | 40,874 | 196,825 | 164,434 | 159,079 |
Call premium on Senior Notes | 17,895 | 17,895 | |||||||||
Interest expense | 3,854 | 3,388 | 4,319 | 3,852 | 4,351 | 2,053 | 2,052 | 2,051 | 15,413 | 10,507 | 8,198 |
Total expenses | 223,519 | 223,003 | 224,681 | 211,792 | 228,320 | 193,880 | 202,269 | 200,822 | 882,995 | 825,291 | 786,180 |
Income before income taxes | 28,098 | 46,257 | 24,859 | 41,322 | 20,409 | 31,090 | 20,221 | 20,553 | 140,536 | 92,273 | 91,736 |
Income tax expense | 8,823 | 15,032 | 7,998 | 13,354 | 6,076 | 9,804 | 6,284 | 6,643 | 45,207 | 28,807 | 27,974 |
Net income | 19,275 | 31,225 | 16,861 | 27,968 | 14,333 | 21,286 | 13,937 | 13,910 | 95,329 | 63,466 | 63,762 |
Comprehensive income (loss) | $27,015 | $20,628 | $32,965 | $32,920 | $1,200 | $25,462 | ($24,829) | $14,785 | $113,528 | $16,618 | $68,722 |
Combined ratio | 93.80% | 89.50% | 95.30% | 92.20% | 94.00% | 89.80% | 97.70% | 97.90% | 92.60% | 94.80% | 99.30% |
Net income (loss) per share: | |||||||||||
Basic | $1.35 | $2.19 | $1.18 | $1.96 | $1.01 | $1.50 | $0.99 | $0.99 | $6.69 | $4.49 | $4.54 |
Diluted | $1.31 | $2.14 | $1.17 | $1.94 | $1 | $1.48 | $0.97 | $0.97 | $6.51 | $4.42 | $4.45 |
Summary_of_Consolidated_Invest1
Summary of Consolidated Investments-Other Than Investments in Related Parties (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Total investments and cash | $2,550,229 | $2,191,827 |
Total investments and cash | 2,820,486 | |
Gross Unrealized Gains | 83,078 | 69,554 |
Gross Unrealized Losses | -11,672 | -33,530 |
Amortized Cost | 2,749,080 | 2,538,562 |
Short-term investments | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Total investments and cash | 179,506 | |
Gross Unrealized Losses | -21 | |
Amortized Cost | 179,527 | 296,250 |
Cash | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Total investments and cash | 90,751 | |
Amortized Cost | 90,751 | 86,509 |
Fixed maturities | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Total investments and cash | 2,365,934 | 2,047,873 |
Gross Unrealized Gains | 52,322 | 43,854 |
Gross Unrealized Losses | -10,347 | -32,980 |
Amortized Cost | 2,323,959 | 2,036,999 |
Fixed maturities | U.S. Treasury bonds, agency bonds, and foreign | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Total investments and cash | 397,923 | 441,685 |
Gross Unrealized Gains | 3,431 | 2,854 |
Gross Unrealized Losses | -5,965 | -8,855 |
Amortized Cost | 400,457 | 447,686 |
Fixed maturities | States, municipalities and political subdivisions | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Total investments and cash | 541,007 | 460,422 |
Gross Unrealized Gains | 19,204 | 9,298 |
Gross Unrealized Losses | -558 | -13,651 |
Amortized Cost | 522,361 | 464,775 |
Fixed maturities | Agency mortgage-backed securities | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Total investments and cash | 364,622 | 301,274 |
Gross Unrealized Gains | 8,476 | 6,779 |
Gross Unrealized Losses | -998 | -6,016 |
Amortized Cost | 357,144 | 300,511 |
Fixed maturities | Residential Mortgage Backed Securities | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Total investments and cash | 34,087 | 41,755 |
Gross Unrealized Gains | 1,153 | 1,212 |
Gross Unrealized Losses | -138 | -161 |
Amortized Cost | 33,072 | 40,704 |
Fixed maturities | Asset-backed securities | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Total investments and cash | 206,413 | 125,133 |
Gross Unrealized Gains | 380 | 653 |
Gross Unrealized Losses | -964 | -480 |
Amortized Cost | 206,997 | 124,960 |
Fixed maturities | Commercial mortgage-backed securities | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Total investments and cash | 206,318 | 172,750 |
Gross Unrealized Gains | 6,630 | 7,656 |
Gross Unrealized Losses | -98 | -374 |
Amortized Cost | 199,786 | 165,468 |
Fixed maturities | Mortgage-backed and asset-backed securities | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Total investments and cash | 811,440 | 640,912 |
Gross Unrealized Gains | 16,639 | 16,300 |
Gross Unrealized Losses | -2,198 | -7,031 |
Amortized Cost | 796,999 | 631,643 |
Fixed maturities | Corporate bonds | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Total investments and cash | 615,564 | 504,854 |
Gross Unrealized Gains | 13,048 | 15,402 |
Gross Unrealized Losses | -1,626 | -3,443 |
Amortized Cost | 604,142 | 492,895 |
Equity Securities | Common Stock | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Total investments and cash | 127,183 | 143,954 |
Gross Unrealized Gains | 28,520 | 25,700 |
Gross Unrealized Losses | -1,254 | -550 |
Amortized Cost | 99,917 | 118,804 |
Equity Securities | Preferred Stock | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Total investments and cash | 57,112 | |
Gross Unrealized Gains | 2,236 | |
Gross Unrealized Losses | -50 | |
Amortized Cost | $54,926 |
Condensed_Financial_Informatio1
Condensed Financial Information - Balance Sheets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
ASSETS | ||||
Cash and investments | $2,820,486 | $2,574,586 | ||
Goodwill and other intangible assets | 7,013 | 7,177 | ||
Other assets | 44,384 | 35,039 | ||
Total assets | 4,464,176 | 4,169,452 | 4,007,670 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Senior Notes | 263,440 | 263,308 | ||
Accounts payable and other liabilities | 93,336 | 69,379 | ||
Total liabilities | 3,436,952 | 3,267,240 | ||
Preferred stock, $.10 par value, authorized 1,000,000 shares, none issued | ||||
Common stock, $.10 par value, authorized 50,000,000 shares, issued 17,792,846 shares for 2014 and 17,709,876 shares for 2013 | 1,778 | 1,770 | ||
Additional paid-in capital | 347,022 | 335,546 | ||
Treasury stock, at cost (3,511,380 shares for 2014 and 2013) | -155,801 | -155,801 | ||
Retained earnings | 787,666 | 692,337 | ||
Accumulated other comprehensive income: | ||||
Total stockholders' equity | 1,027,224 | 902,212 | 879,485 | 803,435 |
Total liabilities and stockholders' equity | 4,464,176 | 4,169,452 | ||
Parent Company | ||||
ASSETS | ||||
Cash and investments | 101,032 | 100,676 | ||
Investments in subsidiaries | 1,163,822 | 1,040,214 | ||
Goodwill and other intangible assets | 2,534 | 2,534 | ||
Other assets | 27,531 | 26,538 | ||
Total assets | 1,294,919 | 1,169,962 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Senior Notes | 263,440 | 263,308 | ||
Accounts payable and other liabilities | 1,081 | 802 | ||
Accrued interest payable | 3,174 | 3,640 | ||
Total liabilities | 267,695 | 267,750 | ||
Preferred stock, $.10 par value, authorized 1,000,000 shares, none issued | ||||
Common stock, $.10 par value, authorized 50,000,000 shares, issued 17,792,846 shares for 2014 and 17,709,876 shares for 2013 | 1,778 | 1,770 | ||
Additional paid-in capital | 347,022 | 335,546 | ||
Treasury stock, at cost (3,511,380 shares for 2014 and 2013) | -155,801 | -155,801 | ||
Retained earnings | 787,666 | 692,337 | ||
Accumulated other comprehensive income: | ||||
Net unrealized gains (losses) on securities available-for-sale, net of tax | 46,573 | 23,387 | ||
Foreign currency translation adjustment, net of tax | -14 | 4,973 | ||
Total stockholders' equity | 1,027,224 | 902,212 | ||
Total liabilities and stockholders' equity | $1,294,919 | $1,169,962 |
Condensed_Financial_Informatio2
Condensed Financial Information - Balance Sheets (Parenthetical) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Condensed Financial Statements, Captions [Line Items] | ||
Preferred stock, par value | $0.10 | $0.10 |
Preferred stock, authorized shares | 1,000,000 | 1,000,000 |
Preferred stock, issued shares | 0 | 0 |
Common stock, par value | $0.10 | $0.10 |
Common stock, authorized shares | 50,000,000 | 50,000,000 |
Common stock, issued shares | 17,792,846 | 17,709,876 |
Treasury stock, shares | 3,511,380 | 3,511,380 |
Parent Company | ||
Condensed Financial Statements, Captions [Line Items] | ||
Preferred stock, par value | $0.10 | $0.10 |
Preferred stock, authorized shares | 1,000,000 | 1,000,000 |
Preferred stock, issued shares | 0 | 0 |
Common stock, par value | $0.10 | $0.10 |
Common stock, authorized shares | 50,000,000 | 50,000,000 |
Common stock, issued shares | 17,792,846 | 17,709,876 |
Treasury stock, shares | 3,511,380 | 3,511,380 |
Condensed_Financial_Informatio3
Condensed Financial Information - Statement of Income (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues: | |||||||||||
Net investment income | $16,071 | $15,839 | $15,648 | $16,610 | $14,254 | $14,094 | $14,246 | $13,657 | $64,168 | $56,251 | $54,248 |
Total revenues | 251,617 | 269,260 | 249,540 | 253,114 | 248,729 | 224,970 | 222,490 | 221,375 | 1,023,531 | 917,564 | 877,916 |
Expenses: | |||||||||||
Call premium on Senior Notes | 17,895 | 17,895 | |||||||||
Interest expense | 3,854 | 3,388 | 4,319 | 3,852 | 4,351 | 2,053 | 2,052 | 2,051 | 15,413 | 10,507 | 8,198 |
Other (income) expense | -586 | -1,336 | 1,665 | -10,399 | 665 | 210 | 915 | -618 | -10,656 | 1,172 | -1,488 |
Total expenses | 223,519 | 223,003 | 224,681 | 211,792 | 228,320 | 193,880 | 202,269 | 200,822 | 882,995 | 825,291 | 786,180 |
Income (loss) before income tax benefit | 28,098 | 46,257 | 24,859 | 41,322 | 20,409 | 31,090 | 20,221 | 20,553 | 140,536 | 92,273 | 91,736 |
Income tax benefit | 8,823 | 15,032 | 7,998 | 13,354 | 6,076 | 9,804 | 6,284 | 6,643 | 45,207 | 28,807 | 27,974 |
Net income | 19,275 | 31,225 | 16,861 | 27,968 | 14,333 | 21,286 | 13,937 | 13,910 | 95,329 | 63,466 | 63,762 |
Parent Company | |||||||||||
Revenues: | |||||||||||
Net investment income | 76 | 13 | 341 | ||||||||
Dividends received from wholly-owned subsidiaries | 15,000 | ||||||||||
Total revenues | 76 | 13 | 15,341 | ||||||||
Expenses: | |||||||||||
Call premium on Senior Notes | 17,895 | ||||||||||
Interest expense | 15,413 | 10,507 | 8,198 | ||||||||
Other (income) expense | 2 | 1,749 | |||||||||
Total expenses | 15,413 | 28,404 | 9,947 | ||||||||
Income (loss) before income tax benefit | -15,337 | -28,391 | 5,394 | ||||||||
Income tax benefit | -5,287 | -9,886 | -3,332 | ||||||||
Income (loss) before equity in undistributed net income of wholly owned subsidiaries | -10,050 | -18,505 | 8,726 | ||||||||
Equity in undistributed net income of wholly-owned subsidiaries | 105,379 | 81,971 | 55,036 | ||||||||
Net income | $95,329 | $63,466 | $63,762 |
Condensed_Financial_Informatio4
Condensed Financial Information - Statement of Cash Flows (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities: | |||
Net income | $95,329 | $63,466 | $63,762 |
Adjustments to reconcile net income to net cash provided by (used in) operations: | |||
Call premium on redemption of Senior Notes | 17,895 | ||
Other | 29,039 | 31,987 | 36,503 |
Net cash provided by (used in) operating activities | 222,492 | 136,875 | 96,739 |
Fixed maturities, available-for-sale | |||
Sales | 362,136 | 648,335 | 1,319,404 |
Purchases | -864,902 | -899,930 | -1,711,080 |
Equity securities | |||
Sales | 54,900 | 72,113 | 39,503 |
Purchases | -83,845 | -89,288 | -37,587 |
Net increase in short-term investments | 117,740 | -142,214 | -31,568 |
Net cash provided by (used in) investing activities | -219,470 | -229,859 | -179,839 |
Financing activities: | |||
Net Proceeds from Debt Offering | 263,278 | ||
Redemption of 7.0% Senior Notes Due May 1, 2016 | -132,437 | ||
Proceeds of stock issued from employee stock purchase plan | 1,067 | 821 | 672 |
Proceeds of stock issued from exercise of stock options | 153 | 2,495 | 404 |
Net cash provided by (used in) financing activities | 1,220 | 134,157 | 1,076 |
Cash at beginning of year | 86,509 | 45,336 | 127,360 |
Cash at end of period | 90,751 | 86,509 | 45,336 |
Parent Company | |||
Operating activities: | |||
Net income | 95,329 | 63,466 | 63,762 |
Adjustments to reconcile net income to net cash provided by (used in) operations: | |||
Equity in undistributed net income of wholly-owned subsidiaries | -105,379 | -81,971 | -70,036 |
Dividends received from subsidiaries | 15,000 | ||
Call premium on redemption of Senior Notes | 17,895 | ||
Other | 9,211 | 2,098 | -3,265 |
Net cash provided by (used in) operating activities | -839 | 1,488 | 5,461 |
Fixed maturities, available-for-sale | |||
Sales | 3,200 | 8,754 | 7,986 |
Purchases | -1,249 | -14,700 | |
Equity securities | |||
Sales | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 |
Net increase in short-term investments | -3,424 | -89,988 | -167 |
Net cash provided by (used in) investing activities | -224 | -82,483 | -6,881 |
Financing activities: | |||
Capital contribution to subsidiary | -50,000 | ||
Net Proceeds from Debt Offering | 263,278 | ||
Redemption of 7.0% Senior Notes Due May 1, 2016 | -132,437 | ||
Purchase of treasury stock | 0 | 0 | 0 |
Proceeds of stock issued from employee stock purchase plan | 1,067 | 821 | 672 |
Proceeds of stock issued from exercise of stock options | 153 | 2,495 | 404 |
Net cash provided by (used in) financing activities | 1,220 | 84,157 | 1,076 |
Increase (decrease) in cash | 157 | 3,162 | -344 |
Cash at beginning of year | 6,143 | 2,981 | 3,325 |
Cash at end of period | $6,300 | $6,143 | $2,981 |
Condensed_Financial_Informatio5
Condensed Financial Information - Statement of Cash Flows (Parenthetical) (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Condensed Financial Statements, Captions [Line Items] | |
Interest rate stated on senior notes | 7.00% |
Senior notes due date | 1-May-16 |
Parent Company | |
Condensed Financial Statements, Captions [Line Items] | |
Interest rate stated on senior notes | 7.00% |
Senior notes due date | 1-May-16 |
Supplementary_Insurance_Inform1
Supplementary Insurance Information (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Supplementary Insurance Information, by Segment [Line Items] | ||||||
Deferred policy acquisition costs | $79,452 | $67,007 | $61,005 | |||
Reserve for losses and loss adjustment expenses | 2,159,634 | 2,045,071 | 2,097,048 | |||
Unearned Premiums | 766,167 | 714,606 | 642,407 | |||
Other policy claims and benefits payable | 0 | 0 | 0 | |||
Net earned premiums | 935,895 | 841,939 | 781,964 | |||
Net investment income | 64,092 | [1] | 56,243 | [1] | 54,100 | [1] |
Losses and loss adjustment expenses incurred | 545,229 | 518,961 | 497,433 | |||
Amortization of deferred policy acquisition costs | 127,695 | [2] | 115,842 | [2] | 123,819 | [2] |
Other operating expenses | 196,825 | [1] | 164,434 | [1] | 159,079 | [1] |
Net written premiums | 1,000,138 | 887,922 | 833,655 | |||
Insurance Companies | ||||||
Supplementary Insurance Information, by Segment [Line Items] | ||||||
Deferred policy acquisition costs | 63,200 | 54,984 | 48,294 | |||
Reserve for losses and loss adjustment expenses | 1,645,984 | 1,523,175 | 1,567,045 | |||
Unearned Premiums | 579,331 | 536,303 | 470,425 | |||
Other policy claims and benefits payable | 0 | 0 | 0 | |||
Net earned premiums | 704,574 | 639,338 | 571,439 | |||
Net investment income | 56,714 | [1] | 49,083 | [1] | 46,549 | [1] |
Losses and loss adjustment expenses incurred | 434,396 | 415,413 | 417,082 | |||
Amortization of deferred policy acquisition costs | 85,137 | [2] | 81,132 | [2] | 81,370 | [2] |
Other operating expenses | 138,675 | [1] | 119,920 | [1] | 113,625 | [1] |
Net written premiums | 752,773 | 680,008 | 622,956 | |||
Lloyd's | ||||||
Supplementary Insurance Information, by Segment [Line Items] | ||||||
Deferred policy acquisition costs | 16,252 | 12,023 | 12,711 | |||
Reserve for losses and loss adjustment expenses | 513,650 | 521,896 | 530,003 | |||
Unearned Premiums | 186,836 | 178,303 | 171,982 | |||
Other policy claims and benefits payable | 0 | 0 | 0 | |||
Net earned premiums | 231,321 | 202,601 | 210,525 | |||
Net investment income | 7,378 | [1] | 7,160 | [1] | 7,551 | [1] |
Losses and loss adjustment expenses incurred | 110,833 | 103,548 | 80,351 | |||
Amortization of deferred policy acquisition costs | 42,558 | [2] | 34,710 | [2] | 42,449 | [2] |
Other operating expenses | 58,150 | [1] | 44,514 | [1] | 45,454 | [1] |
Net written premiums | $247,365 | $207,914 | $210,699 | |||
[1] | Net investment income and Other operating expenses reflect only such amounts attributable to the Company's insurance operations. | |||||
[2] | Amortization of deferred policy acquisition costs reflects only such amounts attributable to the Company's insurance operations. A portion of these costs is eliminated in consolidation. |
Reinsurance_Written_Premium_De
Reinsurance Written Premium (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplementary Insurance Information, by Segment [Line Items] | |||||||||||
Direct Amount | $1,133,336 | $1,069,677 | $972,844 | ||||||||
Ceded to other companies | 440,656 | 455,985 | 396,639 | ||||||||
Assumed from other companies | 243,215 | 228,247 | 205,759 | ||||||||
Net earned premiums | 234,172 | 245,367 | 231,084 | 225,272 | 219,902 | 213,895 | 205,814 | 202,328 | 935,895 | 841,939 | 781,964 |
Property Casualty | |||||||||||
Supplementary Insurance Information, by Segment [Line Items] | |||||||||||
Direct Amount | 1,184,538 | 1,127,331 | 1,034,658 | ||||||||
Ceded to other companies | 432,214 | 482,596 | 452,810 | ||||||||
Assumed from other companies | 247,814 | 243,187 | 251,807 | ||||||||
Net earned premiums | $1,000,138 | $887,922 | $833,655 | ||||||||
Percentage of amount assumed to net | 25.00% | 27.00% | 30.00% |
Valuation_and_Qualifying_Accou1
Valuation and Qualifying Accounts (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Allowance for uncollectable reinsurance | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Balance at January 1, 2014 | $11,332 |
Charged to Other Accounts | 0 |
Deductions (Describe) | 0 |
Balance at December 31, 2014 | 11,332 |
Valuation allowance in deferred taxes | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Balance at January 1, 2014 | 554 |
Charged (Credited) to Costs and Expenses | 222 |
Charged to Other Accounts | 0 |
Deductions (Describe) | 0 |
Balance at December 31, 2014 | $776 |
Supplementary_Information_Conc1
Supplementary Information Concerning Property-Casualty Insurance Operations (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||||
Deferred policy acquisition costs | $79,452 | $67,007 | $61,005 | |||
Reserve for losses and loss adjustment expenses | 2,159,634 | 2,045,071 | 2,097,048 | |||
Discount, if any, deducted | 0 | 0 | 0 | |||
Unearned premiums | 766,167 | 714,606 | 642,407 | |||
Net earned premiums | 935,895 | 841,939 | 781,964 | |||
Net investment income | 64,092 | [1] | 56,243 | [1] | 54,100 | [1] |
Losses and loss adjustment expenses incurred related to Current year | 601,041 | 520,227 | 542,724 | |||
Increase (decrease) in estimated losses and LAE for claims occurring in prior years | -55,812 | -1,266 | -45,291 | |||
Amortization of deferred policy acquisition costs | 127,695 | [2] | 115,842 | [2] | 123,819 | [2] |
Other operating expenses | 196,825 | [1] | 164,434 | [1] | 159,079 | [1] |
Net written premiums | $1,000,138 | $887,922 | $833,655 | |||
[1] | Net investment income and Other operating expenses reflect only such amounts attributable to the Company's insurance operations. | |||||
[2] | Amortization of deferred policy acquisition costs reflects only such amounts attributable to the Company's insurance operations. A portion of these costs is eliminated in consolidation. |