Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 27, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | NAVG | |
Entity Registrant Name | NAVIGATORS GROUP INC | |
Entity Central Index Key | 793,547 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 29,765,245 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Investments: | ||
Available-for-sale, at fair value | $ 2,967,909 | |
Equity Securities, at fair value (cost: 2018: $317,497; 2017: $224,159) | $ 235,981 | |
Equity Securities, at fair value (cost: 2018: $317,497; 2017: $224,159) | 327,466 | |
Other Invested Assets | 38,372 | 30,488 |
Total Investments | 3,333,747 | 3,330,003 |
Cash and Cash Equivalents | 175,834 | 102,735 |
Restricted Cash and Cash Equivalents | 47,522 | 56,229 |
Premiums Receivable | 455,742 | 351,393 |
Prepaid Reinsurance Premiums | 239,660 | 228,569 |
Reinsurance Recoverable on Paid Losses | 94,503 | 72,494 |
Reinsurance Recoverable on Unpaid Losses and Loss Adjustment Expenses | 799,084 | 809,765 |
Deferred Policy Acquisition Costs | 157,153 | 135,249 |
Accrued Investment Income | 20,276 | 19,480 |
Goodwill and Other Intangible Assets | 28,272 | 6,596 |
Current Income Tax Receivable, Net | 21,395 | 16,667 |
Deferred Income Tax, Net | 24,552 | 22,271 |
Other Assets | 91,205 | 73,171 |
Total Assets | 5,488,945 | 5,224,622 |
Liabilities: | ||
Reserves for Losses and Loss Adjustment Expenses | 2,574,116 | 2,515,145 |
Unearned Premiums | 1,125,731 | 987,681 |
Reinsurance Balances Payable | 132,285 | 136,192 |
Senior Notes | 263,967 | 263,885 |
Payable for Investments Purchased | 45,800 | 0 |
Accounts Payable and Other Liabilities | 112,962 | 95,754 |
Total Liabilities | 4,254,861 | 3,998,657 |
Stockholders' Equity: | ||
Preferred Stock ($.10 par value per share, authorized 1,000 shares, none issued) | 0 | 0 |
Common Stock ($.10 par value per share, authorized 50,000 shares, issued 36,764 shares for 2018 and 36,530 shares for 2017) | 3,673 | 3,650 |
Additional Paid-In Capital | 376,705 | 376,868 |
Treasury Stock, at cost (7,023 shares for 2018 and 2017) | (155,801) | (155,801) |
Retained Earnings | 1,045,131 | 981,380 |
Accumulated Other Comprehensive Income (Loss) | (35,624) | 19,868 |
Total Stockholders' Equity | 1,234,084 | 1,225,965 |
Total Liabilities and Stockholders' Equity | 5,488,945 | 5,224,622 |
Fixed Maturities | ||
Investments: | ||
Available-for-sale, at fair value | 2,961,541 | 3,057,054 |
Short-Term Investments | ||
Investments: | ||
Available-for-sale, at fair value | $ 6,368 | $ 6,480 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Amortized cost | $ 2,997,997 | |
Equity Securities, cost | $ 224,159 | |
Equity Securities, cost | $ 317,497 | |
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 | 36,764,000 | 36,530,000 |
Treasury Stock, shares | 7,023,000 | 7,023,000 |
Fixed Maturities | ||
Amortized cost | $ 2,991,629 | $ 3,027,408 |
Short-Term Investments | ||
Amortized cost | $ 6,368 | $ 6,477 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Gross Written Premiums | $ 497,236 | $ 452,179 | $ 992,460 | $ 902,484 |
Revenues: | ||||
Net Written Premiums | 379,292 | 333,282 | 772,554 | 670,445 |
Change in Unearned Premiums | (48,277) | (39,447) | (118,912) | (90,479) |
Net Earned Premiums | 331,015 | 293,835 | 653,642 | 579,966 |
Net Investment Income | 24,601 | 22,265 | 48,303 | 43,713 |
Net Realized and Unrealized Gains (Losses): | ||||
Total Other-Than-Temporary Impairment Losses | (18) | 29 | (55) | (1,048) |
Portion of Loss Recognized in Other Comprehensive Income (Before Tax) | 18 | (29) | 55 | (45) |
Net Other-Than-Temporary Impairment Losses Recognized in Earnings | 0 | 0 | 0 | (1,093) |
Net Realized Gains on Investments Sold | 1,787 | 1,694 | 2,956 | 2,743 |
Net Unrealized Gains (Losses) on Equity Securities at Fair Value | 1,329 | (1,852) | ||
Total Net Realized and Unrealized Gains | 3,116 | 1,694 | 1,104 | 1,650 |
Other Income (Loss) | 2,628 | (411) | 2,511 | 657 |
Total Revenues | 361,360 | 317,383 | 705,560 | 625,986 |
Expenses: | ||||
Net Losses and Loss Adjustment Expenses | 196,333 | 177,110 | 382,478 | 346,710 |
Commission Expenses | 53,193 | 48,173 | 107,345 | 96,017 |
Other Operating Expenses | 68,182 | 60,766 | 131,108 | 119,304 |
Interest Expense | 3,864 | 3,861 | 7,728 | 7,722 |
Total Expenses | 321,572 | 289,910 | 628,659 | 569,753 |
Income (Loss) Before Income Taxes | 39,788 | 27,473 | 76,901 | 56,233 |
Income Tax Expense | 7,684 | 6,971 | 13,919 | 14,621 |
Net Income (Loss) | $ 32,104 | $ 20,502 | $ 62,982 | $ 41,612 |
Net Income per Common Share: | ||||
Basic | $ 1.08 | $ 0.70 | $ 2.12 | $ 1.42 |
Diluted | $ 1.07 | $ 0.69 | $ 2.09 | $ 1.39 |
Average common shares outstanding: | ||||
Basic | 29,733 | 29,470 | 29,664 | 29,377 |
Diluted | 30,103 | 29,918 | 30,143 | 29,897 |
Cash Dividends Declared per Common Share | $ 0.07 | $ 0.06 | $ 0.14 | $ 0.105 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net Income | $ 32,104 | $ 20,502 | $ 62,982 | $ 41,612 |
Change in Net Unrealized Gains (Losses) on Available-For-Sale Investments: | ||||
Unrealized Gains (Losses) on Investments arising during the period, net of Deferred Tax | (10,028) | 14,684 | (44,399) | 28,661 |
Reclassification adjustment for Net Realized Gains (Losses) included in Net Income net of Deferred Tax | (809) | (291) | (2,477) | 399 |
Change in Net Unrealized Gains (Losses) on Investments | (10,837) | 14,393 | (46,876) | 29,060 |
Change in Other-Than-Temporary Impairments | ||||
Non Credit Other-Than-Temporary Impairments arising during the period, net of Deferred Tax | (14) | 19 | (44) | 29 |
Reclassification Adjustment for Other-Than-Temporary Impairment Credit Losses Recognized in Net Income net of Deferred Tax | 0 | 0 | 0 | 389 |
Change in Other-Than-Temporary Impairments | (14) | 19 | (44) | 418 |
Change in Foreign Currency Translation Gains (Losses), net of Deferred Tax | (5,880) | 785 | (3,652) | 520 |
Other Comprehensive Income (Loss) | (16,731) | 15,197 | (50,572) | 29,998 |
Comprehensive Income | $ 15,373 | $ 35,699 | $ 12,410 | $ 71,610 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Unrealized Gains (Losses) on Investments arising during the period, Deferred Tax | $ 2,472 | $ (7,907) | $ 11,856 | $ (15,433) |
Reclassification adjustment for Net Realized (Gains) Losses included in Net Income, Deferred Tax | 199 | 157 | 943 | (215) |
Non Credit Other-Than-Temporary Impairments arising during the period, Deferred Tax | 4 | (10) | 16 | (16) |
Reclassification Adjustment for Other-Than-Temporary Impairment Credit Losses Recognized in Net Income, Deferred Tax | 0 | 0 | 0 | (209) |
Change in Foreign Currency Translation Gains (Losses), Deferred Tax | $ 1,361 | $ (423) | $ 2,443 | $ (280) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - 6 months ended Jun. 30, 2018 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | |
Beginning Balance at Dec. 31, 2017 | $ 1,225,965 | $ 3,650 | $ 376,868 | $ (155,801) | $ 981,380 | $ 19,868 | |
Beginning Balance (in shares) at Dec. 31, 2017 | 36,530 | 36,530 | 7,023 | ||||
Net Income | $ 62,982 | 62,982 | |||||
Dividends Declared | (4,151) | (4,151) | |||||
Changes in Other Comprehensive Income: | |||||||
Change in Net Unrealized Loss on Available-For-Sale Investments | (46,876) | (46,876) | |||||
Change in Net Non-Credit Other-Than- Temporary Impairment Losses | (44) | (44) | |||||
Change in Foreign Currency Translation Loss | (3,652) | (3,652) | |||||
Other Comprehensive Income (Loss) | (50,572) | (50,572) | |||||
Cumulative Effect of Adoption of ASU at January 1st, Net of Tax | ASU 2016-01 | 7,748 | (7,748) | |||||
Cumulative Effect of Adoption of ASU at January 1st, Net of Tax | Accounting Standards Update 2018-02 | (2,828) | 2,828 | |||||
Shares Issued | [1] | (6,111) | $ 23 | (6,134) | |||
Shares issued (in shares) | [1] | 234 | |||||
Share-Based Compensation | 5,971 | 5,971 | |||||
Ending Balance at Jun. 30, 2018 | $ 1,234,084 | $ 3,673 | $ 376,705 | $ (155,801) | $ 1,045,131 | $ (35,624) | |
Ending Balance (in shares) at Jun. 30, 2018 | 36,764 | 36,764 | 7,023 | ||||
[1] | Includes shares issued under the Second Amended and Restated 2005 Stock Incentive Plan to Directors and the Employee Stock Purchase Plan. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Activities: | ||
Net Income | $ 62,982 | $ 41,612 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||
Depreciation & Amortization | 1,578 | 2,411 |
Share-Based Compensation | 5,971 | 9,146 |
Deferred Income Taxes | (736) | (10,793) |
Total Net Realized and Unrealized Gains | (1,104) | (2,743) |
Net Other-Than-Temporary Impairments Recognized in Earnings | 0 | 1,093 |
Changes in Assets And Liabilities: | ||
Reinsurance Recoverable on Paid and Unpaid Losses and Loss Adjustment Expenses | 5,777 | 13,107 |
Reserves for Losses and Loss Adjustment Expenses | 27,567 | 52,063 |
Prepaid Reinsurance Premiums | (8,629) | (24,982) |
Unearned Premiums | 127,861 | 115,511 |
Premiums Receivable | (106,326) | (116,689) |
Deferred Policy Acquisition Costs | (21,991) | (13,137) |
Accrued Investment Income | (805) | (881) |
Reinsurance Balances Payable | (3,789) | 16,145 |
Current Income Tax Receivable, Net | (4,870) | 7,175 |
Other | (765) | (16,134) |
Net Cash Provided by Operating Activities | 82,721 | 72,904 |
Fixed Maturities | ||
Redemptions and Maturities | 258,931 | 165,690 |
Sales | 271,804 | 95,240 |
Purchases | (499,956) | (356,970) |
Equity Securities | ||
Sales | 39,487 | |
Sales | 28,757 | |
Purchases | (21,022) | |
Purchases | (76,419) | |
Net Sales and Purchases of Other Invested Assets | (8,591) | (10,105) |
Net Sales, Maturities and Purchases of Short-Term Investments | 32 | (171) |
Net Change in Unsettled Security Transactions | 43,475 | 12,028 |
Purchase of Subsidiaries, Net of Acquired Cash | (22,383) | 0 |
Net Purchase of Property and Equipment | (3,841) | (2,098) |
Net Cash Used in Investing Activities | (8,191) | (77,921) |
Financing Activities: | ||
Proceeds from Employee Stock Purchase Plan | 969 | 1,147 |
Payment of Employee Tax Withholding on Stock Compensation | (7,786) | (13,189) |
Dividends Paid | (4,151) | (3,092) |
Net Cash Used in Financing Activities | (10,968) | (15,134) |
Effect of Exchange Rate on Unrestricted and Restricted Cash and Cash Equivalents | 830 | 1,805 |
Change in Unrestricted and Restricted Cash and Cash Equivalents | 64,392 | (18,346) |
Unrestricted and Restricted Cash and Cash Equivalents at Beginning of Year | 158,964 | 172,846 |
Unrestricted and Restricted Cash and Cash Equivalents at End of Period | 223,356 | 154,500 |
Supplemental Information: | ||
Income Taxes Paid, Net | 19,349 | 21,445 |
Interest Paid | 7,619 | 7,619 |
Issuance of Stock to Directors | $ 783 | $ 578 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | NOTE 1. ORGANIZATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unless the context requires otherwise, the terms “we,” “us,” “our” or “our Company” are used to mean The Navigators Group, Inc., a Delaware holding company established in 1982, and its subsidiaries. The term “Parent Company” is used to mean The Navigators Group, Inc. without its subsidiaries. Organization We are an international insurance company with a long-standing area of specialization in Marine insurance. We also offer Property and Casualty (“P&C”) insurance, primarily general liability coverage and umbrella & excess liability coverage to commercial enterprises through our Primary and Excess Casualty divisions. We have also developed niches in Professional Liability insurance, through our Directors & Officers (“D&O”) and Errors & Omissions (“E&O”) divisions, as well as assumed reinsurance products. We operate through various wholly-owned insurance and service companies. Our subsidiaries domiciled in the United States (“U.S.”) include two insurance companies, Navigators Insurance Company (“NIC”) and Navigators Specialty Insurance Company (“NSIC”), as well as our U.S. underwriting agency, Navigators Management Company (“NMC”). NIC includes a branch in the United Kingdom (“U.K”). We also have operations domiciled in the U.K., Hong Kong and Europe. Navigators International Insurance Company Ltd. (“NIIC”), Navigators Management (U.K.) Ltd. (“NMUK”) and Navigators Underwriting Ltd. (“NUL”) are domiciled in the U.K. and NUL includes European branches. Navigators Underwriting Agency Ltd. (“NUAL”), a Lloyd’s of London (“Lloyd’s”) underwriting agency, manages and provides the capital, through Navigators Corporate Underwriters Ltd. (“NCUL”), for our Lloyd’s Syndicate 1221 (the “Syndicate”), and is also domiciled in the U.K. We control 100% of the Syndicate’s stamp capacity. On June 7, 2018, we acquired 100% ownership interest in Bracht, Deckers & Mackelbert NV, an insurance underwriting agency organized under the laws of Belgium (“BDM”) and Assurances Continentales – Continentale Verzekeringen NV, an insurance company licensed under the laws of Belgium (“ASCO”). The acquisition is being accounted for in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations.” Refer to Note 2. Business Combinations Note 6. Goodwill and Intangible Assets Basis of Presentation The Consolidated Balance Sheet at June 30, 2018 and the Consolidated Statements of Income, Comprehensive Income, Stockholders’ Equity and Cash Flows for the periods ended June 30, 2018 and 2017 are unaudited. The Balance Sheet at December 31, 2017 is derived from our audited Financial Statements. The accompanying Interim Consolidated Financial Statements reflect all adjustments, which, in the opinion of management, are necessary to fairly present the results of our Company for the interim periods presented on the basis of U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All significant intercompany transactions and balances have been eliminated in consolidation. The preparation of these 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 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 Interim Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017. Certain amounts for the prior period have been reclassified to conform with the current period presentation. Income Taxes On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law and the new legislation contained several key tax provisions that affected us, including a one-time mandatory Deemed Repatriation Transition Tax (“Transition Tax”) on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We were required to recognize the effect of the tax law changes in the period of enactment, such as determining the Transition Tax, re-measuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), Income Tax Accounting Implications of the Tax Act, which allowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. During the fourth quarter of 2017, we made a reasonable estimate of the effects on our deferred tax balances and in relation to the Transition Tax. During the first half of 2018, we did not make any changes to this estimate; however we continue to gather additional information to more precisely compute these income tax impacts. We expect to complete our analysis within the measurement period in accordance with SAB 118. The interim income tax provision has been computed based on our estimated annual Effective Tax Rate, which represents our best estimate on a year to date basis for the interim period. As a result, the tax provision for a given quarter equals the difference between the provision recorded cumulatively year to date less the amount recorded cumulatively as of the end of the prior interim period. Our Effective Tax Rate for the quarter differs from the federal tax rate of 21% primarily due to tax-exempt investment income, the dividends received deduction and an excess tax benefit related to the vesting of stock compensation at fair market value. Short-Term Investments Reclassifications Cash and overseas deposits that were misclassified within Short-Term Investments were reclassified representing an immaterial correction. Cash of $20.5 million as of December 31, 2017 was reclassified from Short-Term Investments to Cash and Cash Equivalents. Overseas deposits of $28.8 million as of December 31, 2017 were reclassified from Short-Term Investments to Other Invested Assets. The reclassification of cash within Short-Term Investments to Cash and Cash Equivalents impacted the Statement of Cash Flows for the six months ended June 30, 2017 by increasing Net Cash Used in Investing Activities by $4.8 million. New Accounting Standards Adopted in 2018 Revenue From Contracts With Customers Effective January 1, 2018, our Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This guidance affects any contracts with customers to transfer goods or services or for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts are not in scope of the new guidance). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Our Company generates an insignificant amount of fee income that is within the scope of this guidance and was not materially impacted by the adoption of this guidance. The adoption of this guidance did not have a material impact on our results of operations, financial condition or liquidity. Classification and Measurement of Financial Instruments Effective January 1, 2018, our Company adopted ASU 2016-01 “Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities”. This guidance requires equity investments (except those accounted for under the equity method of accounting, investments that are consolidated or those that meet a practicability exception) to be measured at fair value with changes in fair value recognized in net income, simplifies the impairment assessment of equity investments without readily determinable values by requiring a qualitative assessment to identify impairment, eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost, requires the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liabilities in accordance with the fair value option, requires the separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and clarifies that the reporting organization should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the organization’s other deferred tax assets. As of January 1, 2018, the adoption of this guidance resulted in a $7.7 million net after-tax increase to Retained Earnings with a corresponding decrease to Accumulated Other Comprehensive Income (Loss), resulting in no change to our Total Stockholders’ Equity. This adjustment reflects the cumulative effect adjustment to reclassify Net Unrealized Gain on Investments in Accumulated Other Comprehensive Income (Loss) for available-for-sale Equity Securities to Retained Earnings upon adoption. Upon the adoption of this guidance, Equity Securities have been measured at fair value with changes in fair value recognized in Net Income through Net Unrealized Gains (Losses) on Equity Securities at Fair Value. The other aspects of this guidance only impacted disclosure or did not apply to our Company and therefore did not impact our results of operations, financial condition or liquidity. Cash Flows Effective January 1, 2018, our Company adopted ASU 2016-15, “Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments” which addresses diversity in practice in how eight specific cash receipts and cash payments should be presented and classified on the statement of cash flows. The adoption of this guidance did not impact our results of operations, financial condition or liquidity. Effective January 1, 2018, our Company adopted ASU 2016-18, “Statement of Cash Flows (Topic 230) – Restricted Cash” which addresses diversity in practice in the classification and presentation of changes in restricted cash on the statement of cash flows. This guidance requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Transfers between cash and cash equivalents and restricted cash and restricted cash equivalents will no longer be presented on the statement of cash flows. To assist in meeting the requirements of this guidance to provide a reconciliation from the Statement of Cash Flows to the Balance Sheet, upon adoption of this guidance our Company added new accounts titled “Cash and Cash Equivalents” and “Restricted Cash and Cash Equivalents” and reclassified amounts previously held in Short-Term Investments to these accounts for all periods presented. This resulted in the reclassification of $71.3 million of restricted and unrestricted cash and cash equivalent balances as of December 31, 2017. This guidance was adopted on a retrospective basis. Prior to the adoption of this guidance, restricted and unrestricted cash and cash equivalent balances included in the Short-Term Investments account had been presented as a cash flow provided by (used in) investing activities. Consequently, the Statement of Cash Flows for the six months ended June 30, 2017 includes a revision to increase “Net Cash Used in Investing Activities” by $18.1 million. Income Taxes Effective January 1, 2018, our Company adopted ASU 2016-16, “Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other than Inventory” that requires companies to account for the income tax effects of intercompany transfers of assets other than inventory when the transfer occurs. The adoption of this guidance did not impact our results of operations, financial condition or liquidity. Definition of a Business Effective January 1, 2018, our Company adopted ASU 2017-01, “Clarifying the Definition of a Business” that provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance will be applied to transactions prospectively. The adoption of this guidance did not impact our results of operations, financial condition or liquidity. Tax Reform Reclassification from Other Comprehensive Income Effective January 1, 2018, our Company early adopted ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” that permits entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings. The total impact of the remeasurement and other adjustments was reflected in 2017 income from continuing operations, regardless of where deferred taxes were originally recorded. As of January 1, 2018, the adoption of this guidance resulted in a one-time reclassification of $2.8 million, decreasing Retained Earnings and increasing Accumulated Other Comprehensive Income (Loss) primarily from the remeasurement of deferred tax assets and liabilities associated with unrealized gains and losses on investments and currency translation adjustments using the 21% corporate tax rate. Significant Accounting Policies There were no notable changes in our significant accounting policies subsequent to our Annual Report on Form 10-K for the year ended December 31, 2017, with the exception of changes related to the adoption of ASU 2016-01 and ASU 2016-18 impacting the following accounting policies: Cash and Cash Equivalents and Restricted Cash and Cash Equivalents Cash includes cash on hand and demand deposits with banks. Cash Equivalents include highly liquid investments with original maturities of three months or less including money-market funds. Restricted Cash and Cash Equivalents primarily relates to funds that are held to support regulatory and contractual obligations. Investments Fixed Maturities held by our Company were carried at fair value and classified as available-for-sale. Available-for-sale securities are debt 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 Maturities include bonds, mortgage-backed and asset-backed securities, and redeemable preferred stocks. Upon adoption of ASU 2016-01 on January 1, 2018, Equity Securities held by our Company were carried at fair value with any changes in fair value recognized in Net Income through the Net Unrealized Gains (Losses) on Equity Securities at Fair Value account. Prior to the adoption of ASU 2016-01, Equity Securities were carried at fair value and classified as available-for-sale. For our policy on Equity Securities classified as available-for-sale, refer to Note 1 Other Invested Assets consist of investments our Company made in certain strategic companies which are accounted for using the equity method of accounting and overseas deposits which are carried at fair value. For our investments applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on our Company’s proportionate share of the net income or loss of the companies. Changes in the carrying value of such investments are recorded in Other Income. In applying the equity method, we use the most recently available financial information provided by the companies which is generally three months prior to the end of the reporting period. Overseas deposits include private funds held by the Syndicate and invested according to local regulatory requirements. The compositions of the overseas deposits vary and the deposits are based on the portfolio level reporting that is provided by Lloyd’s. The fair values of these overseas deposits were measured using the net asset value practical expedient and therefore have not been categorized within the fair value hierarchy. Changes in the fair value of the Overseas deposits are recorded in Net Investment Income. Short-Term Investments are carried at fair value. Short-Term Investments have maturities greater than three months but less than one year from the purchase date. All prices for our Fixed Maturities, Equity Securities and Short-Term Investments are classified as Level 1, Level 2 or Level 3 under the fair value hierarchy, as defined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 820 (“ASC 820”). Premiums and discounts on Fixed Maturities are amortized into interest income over the life of the security using 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. 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 Maturities portfolio to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of securities. Our Company reviews the magnitude of a security’s unrealized loss compared to its cost/amortized cost and the length of time that the security has been impaired to determine if an unrealized loss is other-than-temporary. If warranted as a result of conditions relating to a particular security, our Company will also review securities with declines in fair value resulting from a headline news event involving the issuer, a headline news event involving the asset class, the advice of our external asset managers, or economic events that may impact the issuer to determine if an unrealized loss is other-than-temporary. The depth of analysis performed is dependent upon the nature and magnitude of the indicators of other-than-temporary impairment present in regards to each impaired security. Our Company assesses the underlying fundamentals of each issuer to determine if there is a change in the amount or timing of expected cash flows. Management compares the amortized cost basis to the present value of the revised cash flows using the historical book yield to determine the credit loss portion of impairment which is recognized in earnings. All non-credit losses where we have the intent and ability to hold the security until recovery are recognized as changes in Other than Temporary Impairment (“OTTI”) losses within AOCI. Specifically for structured Fixed Maturities, our Company analyzes projections provided by our 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. For securities in which a tranche loss is present and the net present value of loss adjusted cash flows is less than book value, credit impairment is recognized in earnings. 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 are actual delinquency rates, default probability, severity and prepayment assumptions. Projected losses are a function of both loss severity and probability of default, which differ based on property type, vintage and the stress of the collateral. For our policy on evaluating Equity Securities for impairment prior to the adoption of ASU 2016-01 on January 1, 2018, refer to Note 1 |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | NOTE 2. BUSINESS COMBINATIONS On June 7, 2018 (the “acquisition date”), our Company acquired 100% ownership interest in BDM and ASCO. Our Company also acquired in this transaction a wholly-owned subsidiary of ASCO, Canal Re S.A., a reinsurance company licensed under the laws of the Grand Duchy of Luxembourg (“Canal Re”). The acquisition of all three of these entities will be referred to as (the “Acquisition”). The Acquisition was undertaken as part of our Company’s strategy of expanding to more brokers and insureds across Europe and reinforces our Company’s presence in the European Union’s single market. We anticipate that this will enable our Company to better serve its European clients after Brexit, and will also provide an opportunity for BDM and ASCO to reach a wider European audience. Our Company paid a purchase price of EUR 35.0 million in cash at the acquisition date (which was approximately $40.5 million based on the exchange rate as of June 30, 2018). Additionally, our Company will be reimbursed up to EUR 5.0 million (which is approximately $5.8 million based on the exchange rate as of June 30, 2018) in the event of adverse development of claims incurred prior to December 31, 2016 as measured on December 31, 2019. This reimbursement was valued at $nil as of the acquisition date and June 30, 2018. The purchase price was allocated to the assets acquired and liabilities assumed of BDM and ASCO based on estimated fair values as of the acquisition date and our Company recognized goodwill of $11.3 million. Our Company identified finite lived intangible assets of $7.9 million, including customer relationships, the value of business acquired (“VOBA”), broker networks and trade name. These finite lived intangible assets will be amortized over a weighted average period of 12 years. Our Company identified indefinite lived intangible assets of $2.5 million, related to ASCO’s European licenses. The fair value of the assets acquired and liabilities assumed and the allocation of the purchase price on the acquisition date are summarized in the table below: amounts in thousands June 30, 2018 Consideration paid $ 40,492 Assets Investments 45,182 Cash and Cash Equivalents 18,109 Prepaid Reinsurance Premiums 2,701 Reinsurance Recoverables on Paid Losses 1,311 Reinsurance Recoverables on Unpaid Losses and LAE 15,769 Other Assets 19,943 Fair Value of Identifiable Intangible Assets 10,391 Total Assets Acquired $ 113,406 Liabilities Reserves for Losses and LAE 31,928 Unearned Premiums 11,139 Deferred Income Tax 8,947 Accounts Payable and Other Liabilities 32,212 Total Liabilities Assumed $ 84,226 Goodwill $ 11,312 Significant Fair Value Adjustments were as follows: • Fair Value of Finite and Indefinite-Lived Intangibles – To establish the fair value of identifiable intangible assets related to customer relationships, licenses, value of business acquired, broker networks and trade name. • Fair Value of Property – To adjust the carrying value of real estate property to reflect fair value. • Fair Value of Software – To establish the fair value of internal use software systems. • Deferred Income Tax – To reflect the deferred tax impact on the fair value adjustments. • Goodwill – To establish the fair value of goodwill related to the Acquisition. The business combination accounting is subject to change if additional information that existed as of the balance sheet date, but was not available, later becomes available within the measurement period, which cannot exceed twelve months from the acquisition date. The acquisition date fair values of the assets acquired and liabilities assumed, including Reserves for Losses and LAE, Deferred Income Tax and Identifiable Intangible Assets, as well as the related estimated useful lives, are provisional and may be subject to adjustments, which may impact the amounts recorded for assets acquired and liabilities assumed as well as the goodwill. The amount of revenue and earnings of BDM and ASCO since the acquisition date has been immaterial. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 3. SEGMENT INFORMATION We report our results of operations consistent with the manner in which our Chief Operating Decision Maker reviews the business to assess performance through our reporting segments: U.S. Insurance, International Insurance (“Int’l Insurance”), Global Reinsurance (“GlobalRe”) and Corporate. We classify our business into three underwriting segments: U.S. Insurance, Int’l Insurance and GlobalRe. Both the U.S. Insurance and Int’l Insurance reporting segments are each comprised of three operating segments: Marine, P&C and Professional Liability. The underwriting results of the acquired business from BDM and ASCO are included in the Int’l Insurance reporting segment, with no new operating segments resulting from the acquisition. We evaluate the performance of each of the underwriting segments based on underwriting results. Underwriting results are measured based on Underwriting Profit or Loss and the related Combined Ratio, which are both measures of underwriting profitability. Underwriting Profit (Loss) is calculated from Net Earned Premiums less the sum of Net Losses and Loss Adjustment Expenses (“LAE”), Commission Expenses, Other Operating Expenses and Other Underwriting Income (Expense). The Combined Ratio is derived by dividing the sum of Net Losses and LAE, Commission Expenses, Other Operating Expenses and Other Underwriting Income (Expense) by Net Earned Premiums. A Combined Ratio of less than 100% indicates an Underwriting Profit and greater than 100% indicates an Underwriting Loss. Our underwriting performance is evaluated separately from the rest of our operations. The performance of our investment portfolios, our liquidity and capital resource needs, our foreign currency exposure and our tax planning strategies are evaluated on a consolidated basis within our Corporate segment. We do not allocate our assets by underwriting segment as we evaluate the underwriting results of these segments separately from the results of our investments portfolio. Financial data by segment for the three and six months ended June 30, 2018 and 2017 was as follows: Three Months Ended June 30, 2018 U.S. Int'l amounts in thousands Insurance Insurance GlobalRe Corporate (1) Total Net Earned Premiums $ 179,746 $ 92,071 $ 59,198 $ — $ 331,015 Net Losses and LAE (111,885 ) (52,304 ) (32,144 ) — (196,333 ) Commission Expenses (20,382 ) (19,863 ) (13,148 ) 200 (53,193 ) Other Operating Expenses (38,447 ) (23,299 ) (6,436 ) — (68,182 ) Other Underwriting Income (Expense) 71 — 136 (200 ) 7 Underwriting Profit (Loss) $ 9,103 $ (3,395 ) $ 7,606 $ — $ 13,314 Net Investment Income 24,601 24,601 Total Net Realized and Unrealized Gains 3,116 3,116 Interest Expense (3,864 ) (3,864 ) Other Income 2,621 2,621 Income (Loss) Before Income Taxes $ 9,103 $ (3,395 ) $ 7,606 $ 26,474 $ 39,788 Income Tax Expense (7,684 ) (7,684 ) Net Income $ 32,104 Losses and LAE Ratio 62.2 % 56.8 % 54.3 % 59.3 % Commission Expense Ratio 11.3 % 21.6 % 22.2 % 16.1 % Other Operating Expense Ratio (2) 21.4 % 25.3 % 10.7 % 20.6 % Combined Ratio 94.9 % 103.7 % 87.2 % 96.0 % (1) - Includes Corporate segment intercompany eliminations. (2) - Includes Other Operating Expenses and Other Underwriting Income (Expense). Three Months Ended June 30, 2017 U.S. Int'l amounts in thousands Insurance Insurance GlobalRe Corporate (1) Total Net Earned Premiums $ 167,087 $ 82,100 $ 44,648 $ — $ 293,835 Net Losses and LAE (105,270 ) (44,095 ) (27,745 ) — (177,110 ) Commission Expenses (20,460 ) (19,001 ) (8,970 ) 258 (48,173 ) Other Operating Expenses (33,140 ) (22,506 ) (5,120 ) — (60,766 ) Other Underwriting Income (Expense) 100 — 169 (258 ) 11 Underwriting Profit (Loss) 8,317 (3,502 ) 2,982 $ — 7,797 Net Investment Income 22,265 22,265 Total Net Realized and Unrealized Gains 1,694 1,694 Interest Expense (3,861 ) (3,861 ) Other Loss (422 ) (422 ) Income (Loss) Before Income Taxes $ 8,317 $ (3,502 ) $ 2,982 $ 19,676 $ 27,473 Income Tax Expense (6,971 ) (6,971 ) Net Income $ 20,502 Losses and LAE Ratio 63.0 % 53.7 % 62.1 % 60.3 % Commission Expense Ratio 12.2 % 23.1 % 20.1 % 16.4 % Other Operating Expense Ratio (2) 19.8 % 27.5 % 11.1 % 20.6 % Combined Ratio 95.0 % 104.3 % 93.3 % 97.3 % (1) - Includes Corporate segment intercompany eliminations. (2) - Includes Other Operating Expenses and Other Underwriting Income (Expense). Six Months Ended June 30, 2018 U.S. Int'l amounts in thousands Insurance Insurance GlobalRe Corporate (1) Total Net Earned Premiums $ 352,659 $ 185,281 $ 115,702 $ — $ 653,642 Net Losses and LAE (222,307 ) (98,147 ) (62,024 ) — (382,478 ) Commission Expenses (41,243 ) (39,619 ) (26,916 ) 433 (107,345 ) Other Operating Expenses (75,438 ) (43,829 ) (11,841 ) — (131,108 ) Other Underwriting Income (Expense) 169 — 274 (433 ) 10 Underwriting Profit $ 13,840 $ 3,686 $ 15,195 $ — $ 32,721 Net Investment Income 48,303 48,303 Total Net Realized and Unrealized Gains 1,104 1,104 Interest Expense (7,728 ) (7,728 ) Other Income 2,501 2,501 Income Before Income Taxes $ 13,840 $ 3,686 $ 15,195 $ 44,179 $ 76,901 Income Tax Expense (13,919 ) (13,919 ) Net Income $ 62,982 Losses and LAE Ratio 63.0 % 53.0 % 53.6 % 58.5 % Commission Expense Ratio 11.7 % 21.4 % 23.3 % 16.4 % Other Operating Expense Ratio (2) 21.4 % 23.6 % 10.0 % 20.1 % Combined Ratio 96.1 % 98.0 % 86.9 % 95.0 % (1) - Includes Corporate segment intercompany eliminations. (2) - Includes Other Operating Expenses and Other Underwriting Income (Expense). Six Months Ended June 30, 2017 U.S. Int'l amounts in thousands Insurance Insurance GlobalRe Corporate (1) Total Net Earned Premiums $ 331,091 $ 166,186 $ 82,689 $ — $ 579,966 Net Losses and LAE (204,096 ) (94,800 ) (47,814 ) — (346,710 ) Commission Expenses (40,844 ) (38,234 ) (17,462 ) 523 (96,017 ) Other Operating Expenses (66,612 ) (42,299 ) (10,393 ) — (119,304 ) Other Underwriting Income (Expense) 210 — 345 (523 ) 32 Underwriting Profit (Loss) $ 19,749 $ (9,147 ) $ 7,365 $ — $ 17,967 Net Investment Income 43,713 43,713 Total Net Realized and Unrealized Gains 1,650 1,650 Interest Expense (7,722 ) (7,722 ) Other Income 625 625 Income (Loss) Before Income Taxes $ 19,749 $ (9,147 ) $ 7,365 $ 38,266 $ 56,233 Income Tax Expense (14,621 ) (14,621 ) Net Income $ 41,612 Losses and LAE Ratio 61.6 % 57.0 % 57.8 % 59.8 % Commission Expense Ratio 12.3 % 23.0 % 21.1 % 16.6 % Other Operating Expense Ratio (2) 20.1 % 25.5 % 12.2 % 20.5 % Combined Ratio 94.0 % 105.5 % 91.1 % 96.9 % (1) - Includes Corporate segment intercompany eliminations. (2) - Includes Other Operating Expenses and Other Underwriting Income (Expense). Revenue by operating segment for the three and six months ended June 30, 2018 and 2017 was as follows: Three Months Ended June 30, 2018 Three Months Ended June 30, 2017 % Change amounts in thousands Gross Written Premiums Ceded Written Premiums Net Premiums Net Earned Premiums Gross Written Premiums Ceded Written Premiums Net Written Premiums Net Earned Premiums Gross Written Premiums Ceded Written Premiums Net Premiums Net Earned Premiums U.S. Insurance Marine $ 38,830 $ (16,918 ) $ 21,912 $ 21,177 $ 41,687 $ (19,451 ) $ 22,236 $ 21,812 (6.9 %) (13.0 %) (1.5 %) (2.9 %) P&C 217,984 (54,835 ) 163,149 132,630 187,492 (51,147 ) 136,345 121,226 16.3 % 7.2 % 19.7 % 9.4 % Professional 31,664 (4,391 ) 27,273 25,939 28,007 (3,259 ) 24,748 24,049 13.1 % 34.7 % 10.2 % 7.9 % Total $ 288,478 $ (76,144 ) $ 212,334 $ 179,746 $ 257,186 $ (73,857 ) $ 183,329 $ 167,087 12.2 % 3.1 % 15.8 % 7.6 % Int'l Insurance Marine $ 40,714 $ (11,523 ) $ 29,191 $ 37,197 $ 49,597 $ (12,536 ) $ 37,061 $ 39,525 (17.9 %) (8.1 %) (21.2 %) (5.9 %) P&C 46,579 (17,705 ) 28,874 23,715 46,663 (20,362 ) 26,301 23,337 (0.2 %) (13.1 %) 9.8 % 1.6 % Professional Liability 45,230 (10,654 ) 34,576 31,159 34,933 (10,911 ) 24,022 19,238 29.5 % (2.4 %) 43.9 % 62.0 % Total $ 132,523 $ (39,882 ) $ 92,641 $ 92,071 $ 131,193 $ (43,809 ) $ 87,384 $ 82,100 1.0 % (9.0 %) 6.0 % 12.1 % GlobalRe $ 76,235 $ (1,918 ) $ 74,317 $ 59,198 $ 63,800 $ (1,231 ) $ 62,569 $ 44,648 19.5 % 55.8 % 18.8 % 32.6 % Total $ 497,236 $ (117,944 ) $ 379,292 $ 331,015 $ 452,179 $ (118,897 ) $ 333,282 $ 293,835 10.0 % (0.8 %) 13.8 % 12.7 % Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 % Change amounts in thousands Gross Written Premiums Ceded Written Premiums Net Premiums Net Earned Premiums Gross Written Premiums Ceded Written Premiums Net Premiums Net Earned Premiums Gross Written Premiums Ceded Written Premiums Net Premiums Net Earned Premiums U.S. Insurance Marine $ 80,554 $ (34,398 ) $ 46,156 $ 42,269 $ 82,637 $ (36,971 ) $ 45,666 $ 44,506 (2.5 %) (7.0 %) 1.1 % (5.0 %) P&C 386,177 (99,747 ) 286,430 260,220 358,126 (89,345 ) 268,781 240,349 7.8 % 11.6 % 6.6 % 8.3 % Professional 61,675 (8,580 ) 53,095 50,170 54,028 (9,028 ) 45,000 46,236 14.2 % (5.0 %) 18.0 % 8.5 % Total $ 528,406 $ (142,725 ) $ 385,681 $ 352,659 $ 494,791 $ (135,344 ) $ 359,447 $ 331,091 6.8 % 5.5 % 7.3 % 6.5 % Int'l Insurance Marine $ 97,192 $ (19,577 ) $ 77,615 $ 76,476 $ 118,430 $ (23,462 ) $ 94,968 $ 77,020 (17.9 %) (16.6 %) (18.3 %) (0.7 %) P&C 80,539 (31,372 ) 49,167 45,484 87,031 (50,008 ) 37,023 45,517 (7.5 %) (37.3 %) 32.8 % (0.1 %) Professional 82,664 (17,821 ) 64,843 63,321 67,592 (16,932 ) 50,660 43,649 22.3 % 5.3 % 28.0 % 45.1 % Total $ 260,395 $ (68,770 ) $ 191,625 $ 185,281 $ 273,053 $ (90,402 ) $ 182,651 $ 166,186 (4.6 %) (23.9 %) 4.9 % 11.5 % GlobalRe $ 203,659 $ (8,411 ) $ 195,248 $ 115,702 $ 134,640 $ (6,293 ) $ 128,347 $ 82,689 51.3 % 33.7 % 52.1 % 39.9 % Total $ 992,460 $ (219,906 ) $ 772,554 $ 653,642 $ 902,484 $ (232,039 ) $ 670,445 $ 579,966 10.0 % (5.2 %) 15.2 % 12.7 % |
Investments
Investments | 6 Months Ended |
Jun. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | NOTE 4. INVESTMENTS The following tables set forth our Company’s Available-For-Sale Investments as of June 30, 2018 and December 31, 2017 and include Other-Than-Temporary-Impairment (“OTTI”) securities recognized within Accumulated Other Comprehensive Income (“AOCI”): June 30, 2018 Gross Gross Cost or Fair Unrealized Unrealized Amortized amounts in thousands Value Gains (Losses) Cost Fixed Maturities: U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds $ 289,612 $ 955 $ (4,189 ) $ 292,846 States, Municipalities and Political Subdivisions 658,129 10,410 (4,870 ) 652,589 Mortgage-Backed and Asset-Backed Securities: Agency Residential Mortgage-Backed Securities 362,870 1,091 (14,497 ) 376,276 Residential Mortgage Obligations 96,134 464 (431 ) 96,101 Asset-Backed Securities 476,838 737 (2,749 ) 478,850 Commercial Mortgage-Backed Securities 168,609 807 (2,817 ) 170,619 Subtotal $ 1,104,451 $ 3,099 $ (20,494 ) $ 1,121,846 Corporate Exposures (1) 909,349 4,303 (19,302 ) 924,348 Total Fixed Maturities $ 2,961,541 $ 18,767 $ (48,855 ) $ 2,991,629 Short-Term Investments 6,368 — — 6,368 Total Available-For-Sale Investments $ 2,967,909 $ 18,767 $ (48,855 ) $ 2,997,997 (1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks. December 31, 2017 Gross Gross Cost or Fair Unrealized Unrealized Amortized amounts in thousands Value Gains (Losses) Cost Fixed Maturities: U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds $ 393,563 $ 2,081 $ (2,014 ) $ 393,496 States, Municipalities and Political Subdivisions 814,632 20,136 (1,423 ) 795,919 Mortgage-Backed and Asset-Backed Securities: Agency Residential Mortgage-Backed Securities 407,619 2,352 (5,414 ) 410,681 Residential Mortgage Obligations 54,104 606 (79 ) 53,577 Asset-Backed Securities 328,753 2,138 (663 ) 327,278 Commercial Mortgage-Backed Securities 160,904 2,354 (1,182 ) 159,732 Subtotal $ 951,380 $ 7,450 $ (7,338 ) $ 951,268 Corporate Exposures (1) 897,479 14,491 (3,737 ) 886,725 Total Fixed Maturities $ 3,057,054 $ 44,158 $ (14,512 ) $ 3,027,408 Equity Securities: Common Stocks $ 52,439 $ 7,423 $ (112 ) $ 45,128 Preferred Stocks 183,542 6,071 (1,560 ) 179,031 Total Equity Securities $ 235,981 $ 13,494 $ (1,672 ) $ 224,159 Short-Term Investments 6,480 3 — 6,477 Total Available-For-Sale Investments $ 3,299,515 $ 57,655 $ (16,184 ) $ 3,258,044 (1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks. The following table sets forth our Company’s Equity Securities at fair value as of June 30, 2018: As of June 30, 2018 Gross Gross Fair Unrealized Unrealized Cost amounts in thousands Value Gains (Losses) Equity Securities: Common Stocks $ 145,077 $ 9,749 $ (499 ) $ 135,827 Preferred Stocks 182,389 3,854 (3,135 ) 181,670 Total Equity Securities $ 327,466 $ 13,603 $ (3,634 ) $ 317,497 Our Company made investments in certain companies, which are reported as Other Invested Assets on the Consolidated Balance Sheet and accounted for using the equity method. In applying the equity method, these investments were initially recorded at cost and subsequently adjusted based on our Company’s proportionate share of the net income or loss of the investments. Our initial purchase price for these investments was $2.0 million with a current carrying value of $1.7 million at June 30, 2018 and December 31, 2017, as reflected on our Consolidated Balance Sheet. Other Invested Assets also includes overseas deposits with a fair value of $36.6 million at June 30, 2018 and $28.8 million at December 31, 2017. The overseas deposits consist of investments in private funds which are managed centrally by The Corporation of Lloyds in support of all Lloyd’s market participants. The funds consist of fixed income securities, bank deposits, and cash invested in local markets which are intended to fulfill regulatory deposit requirements in worldwide jurisdictions. Our Company’s ability to withdraw from the funds is restricted by an annual and quarterly funding and release process managed by Lloyd’s in conjunction with Syndicate 1221’s capital requirements in various jurisdictions. As of June 30, 2018 and December 31, 2017, our Company did not have a concentration of greater than 5% of invested assets in a single non-government backed issuer. As of June 30, 2018 and December 31, 2017, Fixed Maturities for which Non-Credit OTTI was previously recognized and included in AOCI were in a Net Unrealized Gain position of $0.4 million and $0.5 million, respectively. The fair value of our Company’s Fixed Maturities investment portfolio may fluctuate significantly in response to various factors such as changes in interest rates, investment quality ratings, 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, 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. Our Company may realize investment losses to the extent our 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 June 30, 2018 are shown in the following table: June 30, 2018 Fair Amortized amounts in thousands Value Cost Due in one year or less $ 219,948 $ 221,066 Due after one year through five years 722,278 732,073 Due after five years through ten years 336,352 338,140 Due after ten years 578,512 578,504 Mortgage-Backed and Asset-Backed Securities 1,104,451 1,121,846 Total $ 2,961,541 $ 2,991,629 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. 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 accounting method. Due to the periodic repayment of principal, our Mortgage-Backed and Asset-Backed Securities are estimated to have an effective maturity of approximately 5.3 years. The following tables summarize all Available-For-Sale securities in a gross unrealized loss position as of June 30, 2018 and December 31, 2017, showing the aggregate fair value and gross unrealized loss by the length of time those securities have continuously been in a gross unrealized loss position: June 30, 2018 Less than 12 months Greater than 12 months Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized amounts in thousands Value (Losses) Value (Losses) Value (Losses) Fixed Maturities: U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds $ 220,029 $ (3,420 ) $ 39,864 $ (769 ) $ 259,893 $ (4,189 ) States, Municipalities and Political Subdivisions 213,600 (3,184 ) 42,654 (1,686 ) 256,254 (4,870 ) Mortgage-Backed and Asset-Backed Securities: Agency Residential Mortgage-Backed Securities 115,138 (3,504 ) 214,279 (10,993 ) 329,417 (14,497 ) Residential Mortgage Obligations 78,032 (421 ) 387 (10 ) 78,419 (431 ) Asset-Backed Securities 273,120 (2,413 ) 23,583 (336 ) 296,703 (2,749 ) Commercial Mortgage-Backed Securities 59,304 (954 ) 22,124 (1,863 ) 81,428 (2,817 ) Subtotal $ 525,594 $ (7,292 ) $ 260,373 $ (13,202 ) $ 785,967 $ (20,494 ) Corporate Exposures (1) 643,226 (15,432 ) 101,454 (3,870 ) 744,680 (19,302 ) Total Fixed Maturities $ 1,602,449 $ (29,328 ) $ 444,345 $ (19,527 ) $ 2,046,794 $ (48,855 ) (1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks. December 31, 2017 Less than 12 months Greater than 12 months Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized amounts in thousands Value (Losses) Value (Losses) Value (Losses) Fixed Maturities: U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds $ 273,672 $ (1,502 ) $ 54,484 $ (512 ) $ 328,156 $ (2,014 ) States, Municipalities and Political Subdivisions 74,097 (503 ) 45,085 (920 ) 119,182 (1,423 ) Mortgage-Backed and Asset-Backed Securities: Agency Residential Mortgage-Backed Securities 87,496 (346 ) 236,745 (5,068 ) 324,241 (5,414 ) Residential Mortgage Obligations 12,418 (62 ) 546 (17 ) 12,964 (79 ) Asset-Backed Securities 85,877 (468 ) 24,733 (195 ) 110,610 (663 ) Commercial Mortgage-Backed Securities 20,482 (95 ) 22,903 (1,087 ) 43,385 (1,182 ) Subtotal $ 206,273 $ (971 ) $ 284,927 $ (6,367 ) $ 491,200 $ (7,338 ) Corporate Exposures (1) 295,433 (1,690 ) 121,410 (2,047 ) 416,843 (3,737 ) Total Fixed Maturities $ 849,475 $ (4,666 ) $ 505,906 $ (9,846 ) $ 1,355,381 $ (14,512 ) Equity Securities: Common Stocks $ 11,245 $ (81 ) $ 1,770 $ (31 ) $ 13,015 $ (112 ) Preferred Stocks 50,861 (1,524 ) 662 (36 ) 51,523 (1,560 ) Total Equity Securities $ 62,106 $ (1,605 ) $ 2,432 $ (67 ) $ 64,538 $ (1,672 ) Total Fixed Maturities and Equity Securities $ 911,581 $ (6,271 ) $ 508,338 $ (9,913 ) $ 1,419,919 $ (16,184 ) (1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks. Our Company analyzes impaired securities quarterly to determine if any impairments are other-than-temporary. The above securities with unrealized losses are deemed to be temporarily impaired based on our evaluation. As of June 30, 2018, there were 753 Fixed Maturities in an unrealized loss position. As of December 31, 2017, there were 454 Fixed Maturities and 22 Equity Securities in an unrealized loss position. As of June 30, 2018, the gross unrealized loss for the greater than 12 months category consists primarily of Agency Residential Mortgage-Backed Securities and Corporate Exposures principally due to an increase in interest rates and spread widening. The gross unrealized loss for the less than 12 months category for the period ended June 30, 2018 consists primarily of Corporate Exposures due to spread widening. As of December 31, 2017, the gross unrealized loss for the greater than 12 month category consists primarily of Agency Residential Mortgage-Backed Securities and Corporate Exposures and is mostly due to an increase in interest rates since the time of purchase. The gross unrealized loss for the less than 12 months category for the period ended December 31, 2017 consists primarily of Corporate Bonds and Preferred Stocks, which are reported in Equity Securities, due to an increase in interest rates since time of purchase, as well as Foreign Government Bonds due to an unfavorable exchange rate movement in our Canadian portfolio. As of June 30, 2018 and December 31, 2017, the largest unrealized loss by a non-government backed issuer in the investment portfolio was $1.7 million and $0.7 million, respectively. Our Company’s ability to hold securities is supported by sufficient cash flow from our operations and from maturities within our investment portfolio in order to meet our claims payments and other disbursement obligations arising from our 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. Upon adoption of ASU 2016-01 as of January 1, 2018, changes in the fair value of Equity Securities are recognized through Net Income. Our Company did not have any credit related OTTI losses during the three months ended June 30, 2018 or 2017. Our Company did not have any credit related OTTI losses during the six months ended June 30, 2018. Our Company had two credit related OTTI losses of $1.1 million in the equity portfolio during the six months ended June 30, 2017. As of June 30, 2018 and 2017, the cumulative amounts related to our Company’s credit loss portion of the OTTI losses on Fixed Maturities was $2.4 million. There were no changes to the cumulative amounts of our Company’s credit loss portion of OTTI for the three and six months ended June 30, 2018 and 2017. Our Company’s Net Investment Income was derived from the following sources: Three Months Ended June 30, Six Months Ended June 30, amounts in thousands 2018 2017 2018 2017 Fixed Maturities $ 21,719 $ 19,186 $ 42,771 $ 37,527 Equity Securities 3,161 3,780 6,086 7,564 Short-Term Investments, Cash & Cash Equivalents 415 87 642 170 Other Invested Assets 141 113 327 242 Total Investment Income $ 25,436 $ 23,166 $ 49,826 $ 45,503 Investment Expenses (835 ) (901 ) (1,523 ) (1,790 ) Net Investment Income $ 24,601 $ 22,265 $ 48,303 $ 43,713 Realized Gains and Losses on Investments Sold, excluding net OTTI losses recognized in earnings, for the periods indicated, were as follows: Three Months Ended June 30, Six Months Ended June 30, amounts in thousands 2018 2017 2018 2017 Fixed Maturities: Gains $ 1,541 $ 344 $ 3,347 $ 812 Losses (481 ) (958 ) (756 ) (2,214 ) Fixed Maturities, Net $ 1,060 $ (614 ) $ 2,591 $ (1,402 ) Short-Term Investments, Cash & Cash Equivalents: Gains $ 63 $ 119 $ 81 $ 226 Losses (21 ) (45 ) (195 ) (125 ) Short-Term, Net $ 42 $ 74 $ (114 ) $ 101 Other Invested Assets: Gains $ 20 $ 16 $ 70 $ 21 Losses (45 ) (24 ) (86 ) (135 ) Other Invested Assets, Net $ (25 ) $ (8 ) $ (16 ) $ (114 ) Equity Securities: Gains $ 754 $ 2,470 $ 754 $ 4,386 Losses (44 ) (228 ) (259 ) (228 ) Equity Securities, Net $ 710 $ 2,242 $ 495 $ 4,158 Net Realized Gains on Investments Sold $ 1,787 $ 1,694 $ 2,956 $ 2,743 The following table presents the portion of Net Unrealized Gains (Losses) recognized during the three and six months ended June 30, 2018, that relates to Equity Securities held as of June 30, 2018: Three Months Ended June 30, Six Months Ended June 30, amounts in thousands 2018 2018 Equity Securities: Total Net Realized and Unrealized Gains (Losses) recognized during the period $ 2,039 $ (1,357 ) Less: Net Realized Gains on Investments Sold recognized during the period 710 495 Net Unrealized Gains (Losses) recognized during the period $ 1,329 $ (1,852 ) |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | NOTE 5. FAIR VALUE MEASUREMENT The fair value of our financial instruments is determined based on the following fair value hierarchy: Level 1 – Quoted prices for identical instruments in active markets. Examples are listed equities 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. The following tables present, for each of the fair value hierarchy levels as defined by the accounting guidance for fair value measurements described above, our Company’s Fixed Maturities and Equity Securities by asset class that are measured at fair value on a recurring basis, as well as the fair value of the 5.75% Senior Notes due October 15, 2023 (the “Senior Notes”) carried at amortized cost as of June 30, 2018 and December 31, 2017: June 30, 2018 amounts in thousands Level 1 Level 2 Level 3 Total Fixed Maturities: U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds $ 80,379 $ 209,233 $ — $ 289,612 States, Municipalities and Political Subdivisions — 658,129 — 658,129 Mortgage-Backed and Asset-Backed Securities: Agency Residential Mortgage-Backed Securities — 362,870 — 362,870 Residential Mortgage Obligations — 96,134 — 96,134 Asset-Backed Securities — 476,838 — 476,838 Commercial Mortgage-Backed Securities — 168,609 — 168,609 Subtotal $ — $ 1,104,451 $ — $ 1,104,451 Corporate Exposures — 909,349 — 909,349 Total Fixed Maturities $ 80,379 $ 2,881,162 $ — $ 2,961,541 Equity Securities: Common Stocks $ 38,441 $ 106,636 $ — $ 145,077 Preferred Stocks — 182,389 — 182,389 Total Equity Securities $ 38,441 $ 289,025 $ — $ 327,466 Short-Term Investments — 6,368 — 6,368 Total Assets Measured at Fair Value $ 118,820 $ 3,176,555 $ — $ 3,295,375 Senior Notes $ — $ 273,865 $ — $ 273,865 Total Liabilities Measured at Fair Value $ — $ 273,865 $ — $ 273,865 December 31, 2017 amounts in thousands Level 1 Level 2 Level 3 Total Fixed Maturities: U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds $ 178,251 $ 215,312 $ — $ 393,563 States, Municipalities and Political Subdivisions — 814,632 — 814,632 Mortgage-Backed and Asset-Backed Securities: Agency Residential Mortgage-Backed Securities — 407,619 — 407,619 Residential Mortgage Obligations — 54,104 — 54,104 Asset-Backed Securities — 328,753 — 328,753 Commercial Mortgage-Backed Securities — 160,904 — 160,904 Subtotal $ — $ 951,380 $ — $ 951,380 Corporate Exposures — 897,479 — 897,479 Total Fixed Maturities $ 178,251 $ 2,878,803 $ — $ 3,057,054 Equity Securities: Common Stocks $ 52,439 $ — $ — $ 52,439 Preferred Stocks — 183,542 — 183,542 Total Equity Securities $ 52,439 $ 183,542 $ — $ 235,981 Short-Term Investments 6,480 — — 6,480 Total Assets Measured at Fair Value $ 237,170 $ 3,062,345 $ — $ 3,299,515 Senior Notes $ — $ 277,951 $ — $ 277,951 Total Liabilities Measured at Fair Value $ — $ 277,951 $ — $ 277,951 Other Financial assets and liabilities including Cash, Premium Receivable, Reinsurance Recoverable and Reinsurance Balances Payable are carried at cost, which approximates fair value. Our Company has Overseas deposits in Other Invested Assets of $36.6 million and $28.8 million at June 30, 2018 and December 2017, respectively, which is measured at fair value using the net asset value (“NAV”) as a practical expedient. Our Company did not have any transfers between Level 1 and Level 2 classifications for the three and six months ended June 30, 2018 and 2017. As of June 30, 2018, our Company did not have any Level 3 assets. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | NOTE 6. GOODWILL AND INTANGIBLE ASSETS Goodwill The following table shows an analysis of goodwill by reporting segment: Six Months Ended June 30, U.S. Int'l amounts in thousands Insurance Insurance Total Goodwill at Beginning of the Period $ 1,978 $ 2,482 $ 4,460 Goodwill Acquired — 11,312 11,312 Foreign Currency Translation Adjustment — (27 ) (27 ) Goodwill at End of the Period $ 1,978 $ 13,767 $ 15,745 The goodwill acquired primarily relates to expected synergies from combining operations of BDM and ASCO and is not expected to be deductible for tax purposes. The fair values of the assets acquired and liabilities assumed may be subject to adjustments, which may impact the amount recorded for goodwill. Intangibles The gross carrying value and weighted average amortization period of intangible assets by type at June 30, 2018 was as follows: As of June 30, 2018 Gross Weighted Average amounts in thousands Carrying Amount Amortization Period Finite-Lived Assets ASCO Customer Relationships $ 4,739 15 years ASCO VOBA 1,694 4 years BDM Broker Networks 1,002 15 years BDM Trade Name 493 1 year Total $ 7,928 Indefinite-Lived Assets ASCO European Licenses $ 2,463 indefinite NUAL Lloyd's Syndicate Capacity 2,136 indefinite Total $ 4,599 The aggregate amortization expense since the acquisition date of BDM and ASCO has been immaterial. The fair values of the intangible assets acquired may be subject to adjustments, which may impact the amounts recorded. The estimated remaining amortization expense for the finite-lived intangible assets is as follows: amounts in thousands Total 2018 $ 649 2019 1,053 2020 806 2021 806 2022 594 2023 and thereafter 4,020 Total $ 7,928 |
Loss Reserves
Loss Reserves | 6 Months Ended |
Jun. 30, 2018 | |
Insurance [Abstract] | |
Loss Reserves | NOTE 7. LOSS RESERVES We establish reserves for the estimated unpaid ultimate liability for losses and LAE under the terms of our policies and agreements. The determination of Reserves for Losses and LAE is partially dependent upon the receipt of information from agents and brokers. Reserves include estimates for both claims that have been reported and for those that have been incurred but not reported (“IBNR”), and include estimates of expenses associated with processing and settling these claims. Reserves are recorded in Reserves for Losses and LAE in the Consolidated Balance Sheets. Our estimates and judgements may be revised as additional experience and other data become available and are reviewed, as new or improved methodologies are developed, or as laws change. Frequency/severity analyses are also performed for certain books of business. To the extent that reserves are found deficient or redundant, a strengthening or release is recognized as a charge or credit to earnings. The following table summarizes our Company’s Reserves for Losses and LAE activity for the six months ended June 30, 2018 and 2017: For the Six Months Ended June 30, amounts in thousands 2018 2017 Net Reserves for Losses and LAE at Beginning of Year $ 1,705,380 $ 1,510,451 Acquired Net Reserves 16,159 — Provision for Losses and LAE for Claims Occurring in the Current Year 379,158 331,595 Increase (Decrease) in Estimated Losses and LAE for Claims Occurring in Prior Years 3,320 15,115 Incurred Losses and LAE $ 382,478 $ 346,710 Losses and LAE Paid for Claims Occurring During: Current Year (32,832 ) (47,235 ) Prior Years (292,843 ) (249,895 ) Losses and LAE Payments $ (325,675 ) $ (297,130 ) Foreign Currency Adjustment (3,310 ) 3,432 Net Reserves for Losses and LAE at End of Period 1,775,032 1,563,463 Reinsurance Recoverables on Unpaid Losses and LAE 799,084 782,864 Gross Reserves for Losses and LAE at End of Period $ 2,574,116 $ 2,346,327 For the six months ended June 30, 2018, our Incurred Losses and LAE increased $35.8 million as compared to the same period in 2017, primarily due to growth in Net Earned Premium over the prior year. In addition, we incurred $3.3 million of net prior AY reserve strengthening for the six months ended June 30, 2018 due to net unfavorable non-catastrophe related loss emergence of $11.8 million primarily within our Int’l and U.S. Insurance reporting segments, partially offset by net catastrophe loss releases $8.5 million primarily related to Hurricanes Harvey, Irma and Maria (the “Hurricane events”) and the Puebla, Mexico Earthquake that occurred in the third quarter of 2017. This compared to $15.1 million of net prior AY reserve strengthening for the same period in 2017 For the six months ended June 30, 2018, our Losses and LAE Payments increased $28.5 million as compared to the same period in 2017, primarily due to increased claim payments associated with the catastrophe activity occurring in the third quarter of 2017. Our June 30, 2018 Net Reserves for Losses and LAE includes estimated amounts for numerous catastrophe events. We caution that the magnitude and complexity of losses arising from these events inherently increases the level of uncertainty and therefore the level of management judgment involved in arriving at our estimated Net Reserves for Losses and LAE. As a result, our actual losses for these events may ultimately differ materially from our current estimates. |
Ceded Reinsurance
Ceded Reinsurance | 6 Months Ended |
Jun. 30, 2018 | |
Insurance [Abstract] | |
Ceded Reinsurance | NOTE 8. CEDED REINSURANCE As of June 30, 2018, the credit quality distribution of our Company’s Reinsurance recoverable of $1.1 billion for ceded paid losses, ceded unpaid losses and LAE, and ceded unearned premiums based on insurer financial strength ratings from A.M. Best or S&P was not significantly different from the credit quality distribution as of December 31, 2017. Our allowance for uncollectible reinsurance was $12.6 million as of June 30, 2018 and December 31, 2017. As of June 30, 2018, the list of our 10 largest reinsurers measured by the amount of Reinsurance recoverable for ceded losses and LAE and ceded unearned premium, together with the reinsurance recoverable and collateral, was similar to the list as of December 31, 2017. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9. DEBT During the first quarter of 2018, the Company reclassified certain overseas deposits from Short-Term Investments to Other Invested Assets. Refer to Note 1. Organization & Summary of Significant Accounting Policies |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10. COMMITMENTS AND CONTINGENCIES In 2013, 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) to move our corporate headquarters to Stamford, Connecticut. The loan is non-interest bearing, has a term of 10 years and is subject to forgiveness based on our compliance with certain conditions set forth in the agreement with the State. The amount of the loan 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. As of June 30, 2018, our Company has received $11.5 million of the award ($8.0 million in loans and $3.5 million of the grant) and earned a loan forgiveness credit of $7.0 million with the State . On February 16, 2017, our Company entered into a guarantee, pursuant to which it guaranteed all of the liabilities and obligations of NIIC (the “Guarantee”). The Guarantee will remain effective until all of such liabilities and obligations are discharged, and in the event that our Company does not meet its obligations under the Guarantee, any person who is covered by an insurance policy, certificate of coverage or reinsurance contract issued by NIIC will be a third party beneficiary under the Guarantee. Our Company’s obligations under the Guarantee may be terminated by providing twelve months prior written notice to NIIC. However the obligations of our Company under the Guarantee terminate immediately in the event that (i) the majority of the outstanding voting capital stock in NIIC is sold to any non-affiliated entity; (ii) A.M. Best has confirmed that NIIC will receive the same financial strength rating as NIC or NSIC, without the benefit of the Guarantee; or (iii) NIIC withdraws its request to be rated by A.M. Best, provided that NIIC has not been downgraded within the prior twelve months. In the ordinary course of conducting business, our Parent Company’s subsidiaries are involved in various legal proceedings. Most of these proceedings consist of claims litigation involving our Parent 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. In general, our Company believes we have valid defenses to these cases. Our Company’s management believes that the ultimate liability, if any, with respect to these legal proceedings, after consideration of provisions made for potential losses and cost of defense, will not be material to our Company’s Consolidated Balance Sheets, Statements of Income and Statements of Cash Flows. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | NOTE 11. STOCK-BASED COMPENSATION Stock-based compensation granted under our Company’s stock plans is expensed in tranches over the vesting period. Non-performance based grants generally vest equally over a three or four-year period. Performance units generally cliff vest three years after they are granted. Each performance unit and restricted stock unit represents a contingent right to receive one share of Common Stock as of the vesting date. Such Common Stock may be subject to forfeiture for the payment of any required tax withholding. The activity related to our Company's restricted stock unit awards was as follows: Six Months Ended June 30, 2018 Number of Awards Weighted Average Grant Date Fair Value (1) Nonvested at the beginning of the period 159,539 $ 41.60 Granted 21,593 $ 49.03 Vested (2) (65,236 ) $ 34.16 Forfeited (7,000 ) $ 38.00 Nonvested at the end of the period 108,896 $ 47.76 (1) Fair value is based on the closing price of our common shares on the NASDAQ on the grant date. (2) This amount represents the gross number of shares vested before any share forfeiture to pay required tax withholdings. For the six months ended June 30, 2018 share awards of 25,814 were withheld for tax payments at a weighted average vest date fair value of $55.21. The activity related to our Company's performance-based equity awards was as follows: Six Months Ended June 30, 2018 Number of Awards Weighted Average Grant Date Fair Value (1) Nonvested at the beginning of the period 966,361 $ 43.39 Granted 247,554 $ 54.15 Performance Adjustment (59,833 ) $ 37.25 Vested (2) (274,299 ) $ 37.25 Forfeited (16,250 ) $ 43.27 Nonvested at the end of the period 863,533 $ 48.85 (1) Fair value is based on the closing price of our common shares on the NASDAQ on the grant date. (2) This amount represents the gross number of shares vested before any share forfeiture to pay required tax withholdings. For the six months ended June 30, 2018 share awards of 117,005 were withheld for tax payments at a weighted average vest date fair value of $55.65. |
Stockholders Equity
Stockholders Equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 12. STOCKHOLDERS’ EQUITY On May 10, 2018 our Board of Directors declared a cash dividend of $0.07 per share that was paid on June 29, 2018. The declaration and amount of any future dividend will be at the discretion of the Board of Directors, and will depend upon many factors, including financial condition, results of operations, business requirements, regulatory and legal constraints and other factors the Board of Directors deems relevant. |
Organization and Summary of S21
Organization and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Organization | Organization We are an international insurance company with a long-standing area of specialization in Marine insurance. We also offer Property and Casualty (“P&C”) insurance, primarily general liability coverage and umbrella & excess liability coverage to commercial enterprises through our Primary and Excess Casualty divisions. We have also developed niches in Professional Liability insurance, through our Directors & Officers (“D&O”) and Errors & Omissions (“E&O”) divisions, as well as assumed reinsurance products. We operate through various wholly-owned insurance and service companies. Our subsidiaries domiciled in the United States (“U.S.”) include two insurance companies, Navigators Insurance Company (“NIC”) and Navigators Specialty Insurance Company (“NSIC”), as well as our U.S. underwriting agency, Navigators Management Company (“NMC”). NIC includes a branch in the United Kingdom (“U.K”). We also have operations domiciled in the U.K., Hong Kong and Europe. Navigators International Insurance Company Ltd. (“NIIC”), Navigators Management (U.K.) Ltd. (“NMUK”) and Navigators Underwriting Ltd. (“NUL”) are domiciled in the U.K. and NUL includes European branches. Navigators Underwriting Agency Ltd. (“NUAL”), a Lloyd’s of London (“Lloyd’s”) underwriting agency, manages and provides the capital, through Navigators Corporate Underwriters Ltd. (“NCUL”), for our Lloyd’s Syndicate 1221 (the “Syndicate”), and is also domiciled in the U.K. We control 100% of the Syndicate’s stamp capacity. On June 7, 2018, we acquired 100% ownership interest in Bracht, Deckers & Mackelbert NV, an insurance underwriting agency organized under the laws of Belgium (“BDM”) and Assurances Continentales – Continentale Verzekeringen NV, an insurance company licensed under the laws of Belgium (“ASCO”). The acquisition is being accounted for in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations.” Refer to Note 2. Business Combinations Note 6. Goodwill and Intangible Assets |
Basis of Presentation | Basis of Presentation The Consolidated Balance Sheet at June 30, 2018 and the Consolidated Statements of Income, Comprehensive Income, Stockholders’ Equity and Cash Flows for the periods ended June 30, 2018 and 2017 are unaudited. The Balance Sheet at December 31, 2017 is derived from our audited Financial Statements. The accompanying Interim Consolidated Financial Statements reflect all adjustments, which, in the opinion of management, are necessary to fairly present the results of our Company for the interim periods presented on the basis of U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All significant intercompany transactions and balances have been eliminated in consolidation. The preparation of these 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 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 Interim Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017. Certain amounts for the prior period have been reclassified to conform with the current period presentation. |
Income Taxes | Income Taxes On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law and the new legislation contained several key tax provisions that affected us, including a one-time mandatory Deemed Repatriation Transition Tax (“Transition Tax”) on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We were required to recognize the effect of the tax law changes in the period of enactment, such as determining the Transition Tax, re-measuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), Income Tax Accounting Implications of the Tax Act, which allowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. During the fourth quarter of 2017, we made a reasonable estimate of the effects on our deferred tax balances and in relation to the Transition Tax. During the first half of 2018, we did not make any changes to this estimate; however we continue to gather additional information to more precisely compute these income tax impacts. We expect to complete our analysis within the measurement period in accordance with SAB 118. The interim income tax provision has been computed based on our estimated annual Effective Tax Rate, which represents our best estimate on a year to date basis for the interim period. As a result, the tax provision for a given quarter equals the difference between the provision recorded cumulatively year to date less the amount recorded cumulatively as of the end of the prior interim period. Our Effective Tax Rate for the quarter differs from the federal tax rate of 21% primarily due to tax-exempt investment income, the dividends received deduction and an excess tax benefit related to the vesting of stock compensation at fair market value. |
Short-Term Investments Reclassifications | Short-Term Investments Reclassifications Cash and overseas deposits that were misclassified within Short-Term Investments were reclassified representing an immaterial correction. Cash of $20.5 million as of December 31, 2017 was reclassified from Short-Term Investments to Cash and Cash Equivalents. Overseas deposits of $28.8 million as of December 31, 2017 were reclassified from Short-Term Investments to Other Invested Assets. The reclassification of cash within Short-Term Investments to Cash and Cash Equivalents impacted the Statement of Cash Flows for the six months ended June 30, 2017 by increasing Net Cash Used in Investing Activities by $4.8 million. |
New Accounting Standards Adopted in 2018 | New Accounting Standards Adopted in 2018 Revenue From Contracts With Customers Effective January 1, 2018, our Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This guidance affects any contracts with customers to transfer goods or services or for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts are not in scope of the new guidance). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Our Company generates an insignificant amount of fee income that is within the scope of this guidance and was not materially impacted by the adoption of this guidance. The adoption of this guidance did not have a material impact on our results of operations, financial condition or liquidity. Classification and Measurement of Financial Instruments Effective January 1, 2018, our Company adopted ASU 2016-01 “Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities”. This guidance requires equity investments (except those accounted for under the equity method of accounting, investments that are consolidated or those that meet a practicability exception) to be measured at fair value with changes in fair value recognized in net income, simplifies the impairment assessment of equity investments without readily determinable values by requiring a qualitative assessment to identify impairment, eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost, requires the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liabilities in accordance with the fair value option, requires the separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and clarifies that the reporting organization should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the organization’s other deferred tax assets. As of January 1, 2018, the adoption of this guidance resulted in a $7.7 million net after-tax increase to Retained Earnings with a corresponding decrease to Accumulated Other Comprehensive Income (Loss), resulting in no change to our Total Stockholders’ Equity. This adjustment reflects the cumulative effect adjustment to reclassify Net Unrealized Gain on Investments in Accumulated Other Comprehensive Income (Loss) for available-for-sale Equity Securities to Retained Earnings upon adoption. Upon the adoption of this guidance, Equity Securities have been measured at fair value with changes in fair value recognized in Net Income through Net Unrealized Gains (Losses) on Equity Securities at Fair Value. The other aspects of this guidance only impacted disclosure or did not apply to our Company and therefore did not impact our results of operations, financial condition or liquidity. Cash Flows Effective January 1, 2018, our Company adopted ASU 2016-15, “Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments” which addresses diversity in practice in how eight specific cash receipts and cash payments should be presented and classified on the statement of cash flows. The adoption of this guidance did not impact our results of operations, financial condition or liquidity. Effective January 1, 2018, our Company adopted ASU 2016-18, “Statement of Cash Flows (Topic 230) – Restricted Cash” which addresses diversity in practice in the classification and presentation of changes in restricted cash on the statement of cash flows. This guidance requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Transfers between cash and cash equivalents and restricted cash and restricted cash equivalents will no longer be presented on the statement of cash flows. To assist in meeting the requirements of this guidance to provide a reconciliation from the Statement of Cash Flows to the Balance Sheet, upon adoption of this guidance our Company added new accounts titled “Cash and Cash Equivalents” and “Restricted Cash and Cash Equivalents” and reclassified amounts previously held in Short-Term Investments to these accounts for all periods presented. This resulted in the reclassification of $71.3 million of restricted and unrestricted cash and cash equivalent balances as of December 31, 2017. This guidance was adopted on a retrospective basis. Prior to the adoption of this guidance, restricted and unrestricted cash and cash equivalent balances included in the Short-Term Investments account had been presented as a cash flow provided by (used in) investing activities. Consequently, the Statement of Cash Flows for the six months ended June 30, 2017 includes a revision to increase “Net Cash Used in Investing Activities” by $18.1 million. Income Taxes Effective January 1, 2018, our Company adopted ASU 2016-16, “Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other than Inventory” that requires companies to account for the income tax effects of intercompany transfers of assets other than inventory when the transfer occurs. The adoption of this guidance did not impact our results of operations, financial condition or liquidity. Definition of a Business Effective January 1, 2018, our Company adopted ASU 2017-01, “Clarifying the Definition of a Business” that provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance will be applied to transactions prospectively. The adoption of this guidance did not impact our results of operations, financial condition or liquidity. Tax Reform Reclassification from Other Comprehensive Income Effective January 1, 2018, our Company early adopted ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” that permits entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings. The total impact of the remeasurement and other adjustments was reflected in 2017 income from continuing operations, regardless of where deferred taxes were originally recorded. As of January 1, 2018, the adoption of this guidance resulted in a one-time reclassification of $2.8 million, decreasing Retained Earnings and increasing Accumulated Other Comprehensive Income (Loss) primarily from the remeasurement of deferred tax assets and liabilities associated with unrealized gains and losses on investments and currency translation adjustments using the 21% corporate tax rate. |
Significant Accounting Policies | Significant Accounting Policies There were no notable changes in our significant accounting policies subsequent to our Annual Report on Form 10-K for the year ended December 31, 2017, with the exception of changes related to the adoption of ASU 2016-01 and ASU 2016-18 impacting the following accounting policies: |
Cash and Cash Equivalents and Restricted Cash and Cash Equivalents | Cash and Cash Equivalents and Restricted Cash and Cash Equivalents Cash includes cash on hand and demand deposits with banks. Cash Equivalents include highly liquid investments with original maturities of three months or less including money-market funds. Restricted Cash and Cash Equivalents primarily relates to funds that are held to support regulatory and contractual obligations. |
Investments | Investments Fixed Maturities held by our Company were carried at fair value and classified as available-for-sale. Available-for-sale securities are debt 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 Maturities include bonds, mortgage-backed and asset-backed securities, and redeemable preferred stocks. Upon adoption of ASU 2016-01 on January 1, 2018, Equity Securities held by our Company were carried at fair value with any changes in fair value recognized in Net Income through the Net Unrealized Gains (Losses) on Equity Securities at Fair Value account. Prior to the adoption of ASU 2016-01, Equity Securities were carried at fair value and classified as available-for-sale. For our policy on Equity Securities classified as available-for-sale, refer to Note 1 Other Invested Assets consist of investments our Company made in certain strategic companies which are accounted for using the equity method of accounting and overseas deposits which are carried at fair value. For our investments applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on our Company’s proportionate share of the net income or loss of the companies. Changes in the carrying value of such investments are recorded in Other Income. In applying the equity method, we use the most recently available financial information provided by the companies which is generally three months prior to the end of the reporting period. Overseas deposits include private funds held by the Syndicate and invested according to local regulatory requirements. The compositions of the overseas deposits vary and the deposits are based on the portfolio level reporting that is provided by Lloyd’s. The fair values of these overseas deposits were measured using the net asset value practical expedient and therefore have not been categorized within the fair value hierarchy. Changes in the fair value of the Overseas deposits are recorded in Net Investment Income. Short-Term Investments are carried at fair value. Short-Term Investments have maturities greater than three months but less than one year from the purchase date. All prices for our Fixed Maturities, Equity Securities and Short-Term Investments are classified as Level 1, Level 2 or Level 3 under the fair value hierarchy, as defined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 820 (“ASC 820”). Premiums and discounts on Fixed Maturities are amortized into interest income over the life of the security using 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. 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 Maturities portfolio to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of securities. Our Company reviews the magnitude of a security’s unrealized loss compared to its cost/amortized cost and the length of time that the security has been impaired to determine if an unrealized loss is other-than-temporary. If warranted as a result of conditions relating to a particular security, our Company will also review securities with declines in fair value resulting from a headline news event involving the issuer, a headline news event involving the asset class, the advice of our external asset managers, or economic events that may impact the issuer to determine if an unrealized loss is other-than-temporary. The depth of analysis performed is dependent upon the nature and magnitude of the indicators of other-than-temporary impairment present in regards to each impaired security. Our Company assesses the underlying fundamentals of each issuer to determine if there is a change in the amount or timing of expected cash flows. Management compares the amortized cost basis to the present value of the revised cash flows using the historical book yield to determine the credit loss portion of impairment which is recognized in earnings. All non-credit losses where we have the intent and ability to hold the security until recovery are recognized as changes in Other than Temporary Impairment (“OTTI”) losses within AOCI. Specifically for structured Fixed Maturities, our Company analyzes projections provided by our 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. For securities in which a tranche loss is present and the net present value of loss adjusted cash flows is less than book value, credit impairment is recognized in earnings. 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 are actual delinquency rates, default probability, severity and prepayment assumptions. Projected losses are a function of both loss severity and probability of default, which differ based on property type, vintage and the stress of the collateral. For our policy on evaluating Equity Securities for impairment prior to the adoption of ASU 2016-01 on January 1, 2018, refer to Note 1 |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The fair value of the assets acquired and liabilities assumed and the allocation of the purchase price on the acquisition date are summarized in the table below: amounts in thousands June 30, 2018 Consideration paid $ 40,492 Assets Investments 45,182 Cash and Cash Equivalents 18,109 Prepaid Reinsurance Premiums 2,701 Reinsurance Recoverables on Paid Losses 1,311 Reinsurance Recoverables on Unpaid Losses and LAE 15,769 Other Assets 19,943 Fair Value of Identifiable Intangible Assets 10,391 Total Assets Acquired $ 113,406 Liabilities Reserves for Losses and LAE 31,928 Unearned Premiums 11,139 Deferred Income Tax 8,947 Accounts Payable and Other Liabilities 32,212 Total Liabilities Assumed $ 84,226 Goodwill $ 11,312 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Financial Data by Segment | Financial data by segment for the three and six months ended June 30, 2018 and 2017 was as follows: Three Months Ended June 30, 2018 U.S. Int'l amounts in thousands Insurance Insurance GlobalRe Corporate (1) Total Net Earned Premiums $ 179,746 $ 92,071 $ 59,198 $ — $ 331,015 Net Losses and LAE (111,885 ) (52,304 ) (32,144 ) — (196,333 ) Commission Expenses (20,382 ) (19,863 ) (13,148 ) 200 (53,193 ) Other Operating Expenses (38,447 ) (23,299 ) (6,436 ) — (68,182 ) Other Underwriting Income (Expense) 71 — 136 (200 ) 7 Underwriting Profit (Loss) $ 9,103 $ (3,395 ) $ 7,606 $ — $ 13,314 Net Investment Income 24,601 24,601 Total Net Realized and Unrealized Gains 3,116 3,116 Interest Expense (3,864 ) (3,864 ) Other Income 2,621 2,621 Income (Loss) Before Income Taxes $ 9,103 $ (3,395 ) $ 7,606 $ 26,474 $ 39,788 Income Tax Expense (7,684 ) (7,684 ) Net Income $ 32,104 Losses and LAE Ratio 62.2 % 56.8 % 54.3 % 59.3 % Commission Expense Ratio 11.3 % 21.6 % 22.2 % 16.1 % Other Operating Expense Ratio (2) 21.4 % 25.3 % 10.7 % 20.6 % Combined Ratio 94.9 % 103.7 % 87.2 % 96.0 % (1) - Includes Corporate segment intercompany eliminations. (2) - Includes Other Operating Expenses and Other Underwriting Income (Expense). Three Months Ended June 30, 2017 U.S. Int'l amounts in thousands Insurance Insurance GlobalRe Corporate (1) Total Net Earned Premiums $ 167,087 $ 82,100 $ 44,648 $ — $ 293,835 Net Losses and LAE (105,270 ) (44,095 ) (27,745 ) — (177,110 ) Commission Expenses (20,460 ) (19,001 ) (8,970 ) 258 (48,173 ) Other Operating Expenses (33,140 ) (22,506 ) (5,120 ) — (60,766 ) Other Underwriting Income (Expense) 100 — 169 (258 ) 11 Underwriting Profit (Loss) 8,317 (3,502 ) 2,982 $ — 7,797 Net Investment Income 22,265 22,265 Total Net Realized and Unrealized Gains 1,694 1,694 Interest Expense (3,861 ) (3,861 ) Other Loss (422 ) (422 ) Income (Loss) Before Income Taxes $ 8,317 $ (3,502 ) $ 2,982 $ 19,676 $ 27,473 Income Tax Expense (6,971 ) (6,971 ) Net Income $ 20,502 Losses and LAE Ratio 63.0 % 53.7 % 62.1 % 60.3 % Commission Expense Ratio 12.2 % 23.1 % 20.1 % 16.4 % Other Operating Expense Ratio (2) 19.8 % 27.5 % 11.1 % 20.6 % Combined Ratio 95.0 % 104.3 % 93.3 % 97.3 % (1) - Includes Corporate segment intercompany eliminations. (2) - Includes Other Operating Expenses and Other Underwriting Income (Expense). Six Months Ended June 30, 2018 U.S. Int'l amounts in thousands Insurance Insurance GlobalRe Corporate (1) Total Net Earned Premiums $ 352,659 $ 185,281 $ 115,702 $ — $ 653,642 Net Losses and LAE (222,307 ) (98,147 ) (62,024 ) — (382,478 ) Commission Expenses (41,243 ) (39,619 ) (26,916 ) 433 (107,345 ) Other Operating Expenses (75,438 ) (43,829 ) (11,841 ) — (131,108 ) Other Underwriting Income (Expense) 169 — 274 (433 ) 10 Underwriting Profit $ 13,840 $ 3,686 $ 15,195 $ — $ 32,721 Net Investment Income 48,303 48,303 Total Net Realized and Unrealized Gains 1,104 1,104 Interest Expense (7,728 ) (7,728 ) Other Income 2,501 2,501 Income Before Income Taxes $ 13,840 $ 3,686 $ 15,195 $ 44,179 $ 76,901 Income Tax Expense (13,919 ) (13,919 ) Net Income $ 62,982 Losses and LAE Ratio 63.0 % 53.0 % 53.6 % 58.5 % Commission Expense Ratio 11.7 % 21.4 % 23.3 % 16.4 % Other Operating Expense Ratio (2) 21.4 % 23.6 % 10.0 % 20.1 % Combined Ratio 96.1 % 98.0 % 86.9 % 95.0 % (1) - Includes Corporate segment intercompany eliminations. (2) - Includes Other Operating Expenses and Other Underwriting Income (Expense). Six Months Ended June 30, 2017 U.S. Int'l amounts in thousands Insurance Insurance GlobalRe Corporate (1) Total Net Earned Premiums $ 331,091 $ 166,186 $ 82,689 $ — $ 579,966 Net Losses and LAE (204,096 ) (94,800 ) (47,814 ) — (346,710 ) Commission Expenses (40,844 ) (38,234 ) (17,462 ) 523 (96,017 ) Other Operating Expenses (66,612 ) (42,299 ) (10,393 ) — (119,304 ) Other Underwriting Income (Expense) 210 — 345 (523 ) 32 Underwriting Profit (Loss) $ 19,749 $ (9,147 ) $ 7,365 $ — $ 17,967 Net Investment Income 43,713 43,713 Total Net Realized and Unrealized Gains 1,650 1,650 Interest Expense (7,722 ) (7,722 ) Other Income 625 625 Income (Loss) Before Income Taxes $ 19,749 $ (9,147 ) $ 7,365 $ 38,266 $ 56,233 Income Tax Expense (14,621 ) (14,621 ) Net Income $ 41,612 Losses and LAE Ratio 61.6 % 57.0 % 57.8 % 59.8 % Commission Expense Ratio 12.3 % 23.0 % 21.1 % 16.6 % Other Operating Expense Ratio (2) 20.1 % 25.5 % 12.2 % 20.5 % Combined Ratio 94.0 % 105.5 % 91.1 % 96.9 % (1) - Includes Corporate segment intercompany eliminations. (2) - Includes Other Operating Expenses and Other Underwriting Income (Expense). |
Revenue by Operating Segment | Revenue by operating segment for the three and six months ended June 30, 2018 and 2017 was as follows: Three Months Ended June 30, 2018 Three Months Ended June 30, 2017 % Change amounts in thousands Gross Written Premiums Ceded Written Premiums Net Premiums Net Earned Premiums Gross Written Premiums Ceded Written Premiums Net Written Premiums Net Earned Premiums Gross Written Premiums Ceded Written Premiums Net Premiums Net Earned Premiums U.S. Insurance Marine $ 38,830 $ (16,918 ) $ 21,912 $ 21,177 $ 41,687 $ (19,451 ) $ 22,236 $ 21,812 (6.9 %) (13.0 %) (1.5 %) (2.9 %) P&C 217,984 (54,835 ) 163,149 132,630 187,492 (51,147 ) 136,345 121,226 16.3 % 7.2 % 19.7 % 9.4 % Professional 31,664 (4,391 ) 27,273 25,939 28,007 (3,259 ) 24,748 24,049 13.1 % 34.7 % 10.2 % 7.9 % Total $ 288,478 $ (76,144 ) $ 212,334 $ 179,746 $ 257,186 $ (73,857 ) $ 183,329 $ 167,087 12.2 % 3.1 % 15.8 % 7.6 % Int'l Insurance Marine $ 40,714 $ (11,523 ) $ 29,191 $ 37,197 $ 49,597 $ (12,536 ) $ 37,061 $ 39,525 (17.9 %) (8.1 %) (21.2 %) (5.9 %) P&C 46,579 (17,705 ) 28,874 23,715 46,663 (20,362 ) 26,301 23,337 (0.2 %) (13.1 %) 9.8 % 1.6 % Professional Liability 45,230 (10,654 ) 34,576 31,159 34,933 (10,911 ) 24,022 19,238 29.5 % (2.4 %) 43.9 % 62.0 % Total $ 132,523 $ (39,882 ) $ 92,641 $ 92,071 $ 131,193 $ (43,809 ) $ 87,384 $ 82,100 1.0 % (9.0 %) 6.0 % 12.1 % GlobalRe $ 76,235 $ (1,918 ) $ 74,317 $ 59,198 $ 63,800 $ (1,231 ) $ 62,569 $ 44,648 19.5 % 55.8 % 18.8 % 32.6 % Total $ 497,236 $ (117,944 ) $ 379,292 $ 331,015 $ 452,179 $ (118,897 ) $ 333,282 $ 293,835 10.0 % (0.8 %) 13.8 % 12.7 % Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 % Change amounts in thousands Gross Written Premiums Ceded Written Premiums Net Premiums Net Earned Premiums Gross Written Premiums Ceded Written Premiums Net Premiums Net Earned Premiums Gross Written Premiums Ceded Written Premiums Net Premiums Net Earned Premiums U.S. Insurance Marine $ 80,554 $ (34,398 ) $ 46,156 $ 42,269 $ 82,637 $ (36,971 ) $ 45,666 $ 44,506 (2.5 %) (7.0 %) 1.1 % (5.0 %) P&C 386,177 (99,747 ) 286,430 260,220 358,126 (89,345 ) 268,781 240,349 7.8 % 11.6 % 6.6 % 8.3 % Professional 61,675 (8,580 ) 53,095 50,170 54,028 (9,028 ) 45,000 46,236 14.2 % (5.0 %) 18.0 % 8.5 % Total $ 528,406 $ (142,725 ) $ 385,681 $ 352,659 $ 494,791 $ (135,344 ) $ 359,447 $ 331,091 6.8 % 5.5 % 7.3 % 6.5 % Int'l Insurance Marine $ 97,192 $ (19,577 ) $ 77,615 $ 76,476 $ 118,430 $ (23,462 ) $ 94,968 $ 77,020 (17.9 %) (16.6 %) (18.3 %) (0.7 %) P&C 80,539 (31,372 ) 49,167 45,484 87,031 (50,008 ) 37,023 45,517 (7.5 %) (37.3 %) 32.8 % (0.1 %) Professional 82,664 (17,821 ) 64,843 63,321 67,592 (16,932 ) 50,660 43,649 22.3 % 5.3 % 28.0 % 45.1 % Total $ 260,395 $ (68,770 ) $ 191,625 $ 185,281 $ 273,053 $ (90,402 ) $ 182,651 $ 166,186 (4.6 %) (23.9 %) 4.9 % 11.5 % GlobalRe $ 203,659 $ (8,411 ) $ 195,248 $ 115,702 $ 134,640 $ (6,293 ) $ 128,347 $ 82,689 51.3 % 33.7 % 52.1 % 39.9 % Total $ 992,460 $ (219,906 ) $ 772,554 $ 653,642 $ 902,484 $ (232,039 ) $ 670,445 $ 579,966 10.0 % (5.2 %) 15.2 % 12.7 % |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Available-for-Sale Investments Including Other-Than-Temporarily Impaired Securities Recognized within Accumulated Other Comprehensive Income | The following tables set forth our Company’s Available-For-Sale Investments as of June 30, 2018 and December 31, 2017 and include Other-Than-Temporary-Impairment (“OTTI”) securities recognized within Accumulated Other Comprehensive Income (“AOCI”): June 30, 2018 Gross Gross Cost or Fair Unrealized Unrealized Amortized amounts in thousands Value Gains (Losses) Cost Fixed Maturities: U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds $ 289,612 $ 955 $ (4,189 ) $ 292,846 States, Municipalities and Political Subdivisions 658,129 10,410 (4,870 ) 652,589 Mortgage-Backed and Asset-Backed Securities: Agency Residential Mortgage-Backed Securities 362,870 1,091 (14,497 ) 376,276 Residential Mortgage Obligations 96,134 464 (431 ) 96,101 Asset-Backed Securities 476,838 737 (2,749 ) 478,850 Commercial Mortgage-Backed Securities 168,609 807 (2,817 ) 170,619 Subtotal $ 1,104,451 $ 3,099 $ (20,494 ) $ 1,121,846 Corporate Exposures (1) 909,349 4,303 (19,302 ) 924,348 Total Fixed Maturities $ 2,961,541 $ 18,767 $ (48,855 ) $ 2,991,629 Short-Term Investments 6,368 — — 6,368 Total Available-For-Sale Investments $ 2,967,909 $ 18,767 $ (48,855 ) $ 2,997,997 (1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks. December 31, 2017 Gross Gross Cost or Fair Unrealized Unrealized Amortized amounts in thousands Value Gains (Losses) Cost Fixed Maturities: U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds $ 393,563 $ 2,081 $ (2,014 ) $ 393,496 States, Municipalities and Political Subdivisions 814,632 20,136 (1,423 ) 795,919 Mortgage-Backed and Asset-Backed Securities: Agency Residential Mortgage-Backed Securities 407,619 2,352 (5,414 ) 410,681 Residential Mortgage Obligations 54,104 606 (79 ) 53,577 Asset-Backed Securities 328,753 2,138 (663 ) 327,278 Commercial Mortgage-Backed Securities 160,904 2,354 (1,182 ) 159,732 Subtotal $ 951,380 $ 7,450 $ (7,338 ) $ 951,268 Corporate Exposures (1) 897,479 14,491 (3,737 ) 886,725 Total Fixed Maturities $ 3,057,054 $ 44,158 $ (14,512 ) $ 3,027,408 Equity Securities: Common Stocks $ 52,439 $ 7,423 $ (112 ) $ 45,128 Preferred Stocks 183,542 6,071 (1,560 ) 179,031 Total Equity Securities $ 235,981 $ 13,494 $ (1,672 ) $ 224,159 Short-Term Investments 6,480 3 — 6,477 Total Available-For-Sale Investments $ 3,299,515 $ 57,655 $ (16,184 ) $ 3,258,044 (1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks. |
Equity Securities at Fair Value | The following table sets forth our Company’s Equity Securities at fair value as of June 30, 2018: As of June 30, 2018 Gross Gross Fair Unrealized Unrealized Cost amounts in thousands Value Gains (Losses) Equity Securities: Common Stocks $ 145,077 $ 9,749 $ (499 ) $ 135,827 Preferred Stocks 182,389 3,854 (3,135 ) 181,670 Total Equity Securities $ 327,466 $ 13,603 $ (3,634 ) $ 317,497 |
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 June 30, 2018 are shown in the following table: June 30, 2018 Fair Amortized amounts in thousands Value Cost Due in one year or less $ 219,948 $ 221,066 Due after one year through five years 722,278 732,073 Due after five years through ten years 336,352 338,140 Due after ten years 578,512 578,504 Mortgage-Backed and Asset-Backed Securities 1,104,451 1,121,846 Total $ 2,961,541 $ 2,991,629 |
Summary of Aggregate Fair Value and Gross Unrealized Loss by Length of Time Securities had Continuously been in Gross Unrealized Loss Position | The following tables summarize all Available-For-Sale securities in a gross unrealized loss position as of June 30, 2018 and December 31, 2017, showing the aggregate fair value and gross unrealized loss by the length of time those securities have continuously been in a gross unrealized loss position: June 30, 2018 Less than 12 months Greater than 12 months Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized amounts in thousands Value (Losses) Value (Losses) Value (Losses) Fixed Maturities: U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds $ 220,029 $ (3,420 ) $ 39,864 $ (769 ) $ 259,893 $ (4,189 ) States, Municipalities and Political Subdivisions 213,600 (3,184 ) 42,654 (1,686 ) 256,254 (4,870 ) Mortgage-Backed and Asset-Backed Securities: Agency Residential Mortgage-Backed Securities 115,138 (3,504 ) 214,279 (10,993 ) 329,417 (14,497 ) Residential Mortgage Obligations 78,032 (421 ) 387 (10 ) 78,419 (431 ) Asset-Backed Securities 273,120 (2,413 ) 23,583 (336 ) 296,703 (2,749 ) Commercial Mortgage-Backed Securities 59,304 (954 ) 22,124 (1,863 ) 81,428 (2,817 ) Subtotal $ 525,594 $ (7,292 ) $ 260,373 $ (13,202 ) $ 785,967 $ (20,494 ) Corporate Exposures (1) 643,226 (15,432 ) 101,454 (3,870 ) 744,680 (19,302 ) Total Fixed Maturities $ 1,602,449 $ (29,328 ) $ 444,345 $ (19,527 ) $ 2,046,794 $ (48,855 ) (1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks. December 31, 2017 Less than 12 months Greater than 12 months Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized amounts in thousands Value (Losses) Value (Losses) Value (Losses) Fixed Maturities: U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds $ 273,672 $ (1,502 ) $ 54,484 $ (512 ) $ 328,156 $ (2,014 ) States, Municipalities and Political Subdivisions 74,097 (503 ) 45,085 (920 ) 119,182 (1,423 ) Mortgage-Backed and Asset-Backed Securities: Agency Residential Mortgage-Backed Securities 87,496 (346 ) 236,745 (5,068 ) 324,241 (5,414 ) Residential Mortgage Obligations 12,418 (62 ) 546 (17 ) 12,964 (79 ) Asset-Backed Securities 85,877 (468 ) 24,733 (195 ) 110,610 (663 ) Commercial Mortgage-Backed Securities 20,482 (95 ) 22,903 (1,087 ) 43,385 (1,182 ) Subtotal $ 206,273 $ (971 ) $ 284,927 $ (6,367 ) $ 491,200 $ (7,338 ) Corporate Exposures (1) 295,433 (1,690 ) 121,410 (2,047 ) 416,843 (3,737 ) Total Fixed Maturities $ 849,475 $ (4,666 ) $ 505,906 $ (9,846 ) $ 1,355,381 $ (14,512 ) Equity Securities: Common Stocks $ 11,245 $ (81 ) $ 1,770 $ (31 ) $ 13,015 $ (112 ) Preferred Stocks 50,861 (1,524 ) 662 (36 ) 51,523 (1,560 ) Total Equity Securities $ 62,106 $ (1,605 ) $ 2,432 $ (67 ) $ 64,538 $ (1,672 ) Total Fixed Maturities and Equity Securities $ 911,581 $ (6,271 ) $ 508,338 $ (9,913 ) $ 1,419,919 $ (16,184 ) (1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks. |
Net Investment Income | Our Company’s Net Investment Income was derived from the following sources: Three Months Ended June 30, Six Months Ended June 30, amounts in thousands 2018 2017 2018 2017 Fixed Maturities $ 21,719 $ 19,186 $ 42,771 $ 37,527 Equity Securities 3,161 3,780 6,086 7,564 Short-Term Investments, Cash & Cash Equivalents 415 87 642 170 Other Invested Assets 141 113 327 242 Total Investment Income $ 25,436 $ 23,166 $ 49,826 $ 45,503 Investment Expenses (835 ) (901 ) (1,523 ) (1,790 ) Net Investment Income $ 24,601 $ 22,265 $ 48,303 $ 43,713 |
Realized Gains and Losses on Investments Sold, Excluding Net Other-Than-Temporary Impairment Losses Recognized in Earnings | Realized Gains and Losses on Investments Sold, excluding net OTTI losses recognized in earnings, for the periods indicated, were as follows: Three Months Ended June 30, Six Months Ended June 30, amounts in thousands 2018 2017 2018 2017 Fixed Maturities: Gains $ 1,541 $ 344 $ 3,347 $ 812 Losses (481 ) (958 ) (756 ) (2,214 ) Fixed Maturities, Net $ 1,060 $ (614 ) $ 2,591 $ (1,402 ) Short-Term Investments, Cash & Cash Equivalents: Gains $ 63 $ 119 $ 81 $ 226 Losses (21 ) (45 ) (195 ) (125 ) Short-Term, Net $ 42 $ 74 $ (114 ) $ 101 Other Invested Assets: Gains $ 20 $ 16 $ 70 $ 21 Losses (45 ) (24 ) (86 ) (135 ) Other Invested Assets, Net $ (25 ) $ (8 ) $ (16 ) $ (114 ) Equity Securities: Gains $ 754 $ 2,470 $ 754 $ 4,386 Losses (44 ) (228 ) (259 ) (228 ) Equity Securities, Net $ 710 $ 2,242 $ 495 $ 4,158 Net Realized Gains on Investments Sold $ 1,787 $ 1,694 $ 2,956 $ 2,743 |
Portion of Net Unrealized Losses Recognized to Equity Securities | The following table presents the portion of Net Unrealized Gains (Losses) recognized during the three and six months ended June 30, 2018, that relates to Equity Securities held as of June 30, 2018: Three Months Ended June 30, Six Months Ended June 30, amounts in thousands 2018 2018 Equity Securities: Total Net Realized and Unrealized Gains (Losses) recognized during the period $ 2,039 $ (1,357 ) Less: Net Realized Gains on Investments Sold recognized during the period 710 495 Net Unrealized Gains (Losses) recognized during the period $ 1,329 $ (1,852 ) |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
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 described above, our Company’s Fixed Maturities and Equity Securities by asset class that are measured at fair value on a recurring basis, as well as the fair value of the 5.75% Senior Notes due October 15, 2023 (the “Senior Notes”) carried at amortized cost as of June 30, 2018 and December 31, 2017: June 30, 2018 amounts in thousands Level 1 Level 2 Level 3 Total Fixed Maturities: U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds $ 80,379 $ 209,233 $ — $ 289,612 States, Municipalities and Political Subdivisions — 658,129 — 658,129 Mortgage-Backed and Asset-Backed Securities: Agency Residential Mortgage-Backed Securities — 362,870 — 362,870 Residential Mortgage Obligations — 96,134 — 96,134 Asset-Backed Securities — 476,838 — 476,838 Commercial Mortgage-Backed Securities — 168,609 — 168,609 Subtotal $ — $ 1,104,451 $ — $ 1,104,451 Corporate Exposures — 909,349 — 909,349 Total Fixed Maturities $ 80,379 $ 2,881,162 $ — $ 2,961,541 Equity Securities: Common Stocks $ 38,441 $ 106,636 $ — $ 145,077 Preferred Stocks — 182,389 — 182,389 Total Equity Securities $ 38,441 $ 289,025 $ — $ 327,466 Short-Term Investments — 6,368 — 6,368 Total Assets Measured at Fair Value $ 118,820 $ 3,176,555 $ — $ 3,295,375 Senior Notes $ — $ 273,865 $ — $ 273,865 Total Liabilities Measured at Fair Value $ — $ 273,865 $ — $ 273,865 December 31, 2017 amounts in thousands Level 1 Level 2 Level 3 Total Fixed Maturities: U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds $ 178,251 $ 215,312 $ — $ 393,563 States, Municipalities and Political Subdivisions — 814,632 — 814,632 Mortgage-Backed and Asset-Backed Securities: Agency Residential Mortgage-Backed Securities — 407,619 — 407,619 Residential Mortgage Obligations — 54,104 — 54,104 Asset-Backed Securities — 328,753 — 328,753 Commercial Mortgage-Backed Securities — 160,904 — 160,904 Subtotal $ — $ 951,380 $ — $ 951,380 Corporate Exposures — 897,479 — 897,479 Total Fixed Maturities $ 178,251 $ 2,878,803 $ — $ 3,057,054 Equity Securities: Common Stocks $ 52,439 $ — $ — $ 52,439 Preferred Stocks — 183,542 — 183,542 Total Equity Securities $ 52,439 $ 183,542 $ — $ 235,981 Short-Term Investments 6,480 — — 6,480 Total Assets Measured at Fair Value $ 237,170 $ 3,062,345 $ — $ 3,299,515 Senior Notes $ — $ 277,951 $ — $ 277,951 Total Liabilities Measured at Fair Value $ — $ 277,951 $ — $ 277,951 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Analysis of Goodwill by Reporting Segment | The following table shows an analysis of goodwill by reporting segment: Six Months Ended June 30, U.S. Int'l amounts in thousands Insurance Insurance Total Goodwill at Beginning of the Period $ 1,978 $ 2,482 $ 4,460 Goodwill Acquired — 11,312 11,312 Foreign Currency Translation Adjustment — (27 ) (27 ) Goodwill at End of the Period $ 1,978 $ 13,767 $ 15,745 |
Summary of Gross Carrying Value and Weighted Average Amortization Period of Intangible Assets by Type | The gross carrying value and weighted average amortization period of intangible assets by type at June 30, 2018 was as follows: As of June 30, 2018 Gross Weighted Average amounts in thousands Carrying Amount Amortization Period Finite-Lived Assets ASCO Customer Relationships $ 4,739 15 years ASCO VOBA 1,694 4 years BDM Broker Networks 1,002 15 years BDM Trade Name 493 1 year Total $ 7,928 Indefinite-Lived Assets ASCO European Licenses $ 2,463 indefinite NUAL Lloyd's Syndicate Capacity 2,136 indefinite Total $ 4,599 |
Summary of Estimated Remaining Amortization Expense for Finite-Lived Intangible Assets | The estimated remaining amortization expense for the finite-lived intangible assets is as follows: amounts in thousands Total 2018 $ 649 2019 1,053 2020 806 2021 806 2022 594 2023 and thereafter 4,020 Total $ 7,928 |
Loss Reserves (Tables)
Loss Reserves (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Insurance [Abstract] | |
Summary of Reserves for Losses and LAE Activity | The following table summarizes our Company’s Reserves for Losses and LAE activity for the six months ended June 30, 2018 and 2017: For the Six Months Ended June 30, amounts in thousands 2018 2017 Net Reserves for Losses and LAE at Beginning of Year $ 1,705,380 $ 1,510,451 Acquired Net Reserves 16,159 — Provision for Losses and LAE for Claims Occurring in the Current Year 379,158 331,595 Increase (Decrease) in Estimated Losses and LAE for Claims Occurring in Prior Years 3,320 15,115 Incurred Losses and LAE $ 382,478 $ 346,710 Losses and LAE Paid for Claims Occurring During: Current Year (32,832 ) (47,235 ) Prior Years (292,843 ) (249,895 ) Losses and LAE Payments $ (325,675 ) $ (297,130 ) Foreign Currency Adjustment (3,310 ) 3,432 Net Reserves for Losses and LAE at End of Period 1,775,032 1,563,463 Reinsurance Recoverables on Unpaid Losses and LAE 799,084 782,864 Gross Reserves for Losses and LAE at End of Period $ 2,574,116 $ 2,346,327 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Restricted Stock Unit Awards | The activity related to our Company's restricted stock unit awards was as follows: Six Months Ended June 30, 2018 Number of Awards Weighted Average Grant Date Fair Value (1) Nonvested at the beginning of the period 159,539 $ 41.60 Granted 21,593 $ 49.03 Vested (2) (65,236 ) $ 34.16 Forfeited (7,000 ) $ 38.00 Nonvested at the end of the period 108,896 $ 47.76 (1) Fair value is based on the closing price of our common shares on the NASDAQ on the grant date. (2) This amount represents the gross number of shares vested before any share forfeiture to pay required tax withholdings. For the six months ended June 30, 2018 share awards of 25,814 were withheld for tax payments at a weighted average vest date fair value of $55.21. |
Performance-based Equity Awards | The activity related to our Company's performance-based equity awards was as follows: Six Months Ended June 30, 2018 Number of Awards Weighted Average Grant Date Fair Value (1) Nonvested at the beginning of the period 966,361 $ 43.39 Granted 247,554 $ 54.15 Performance Adjustment (59,833 ) $ 37.25 Vested (2) (274,299 ) $ 37.25 Forfeited (16,250 ) $ 43.27 Nonvested at the end of the period 863,533 $ 48.85 (1) Fair value is based on the closing price of our common shares on the NASDAQ on the grant date. (2) This amount represents the gross number of shares vested before any share forfeiture to pay required tax withholdings. For the six months ended June 30, 2018 share awards of 117,005 were withheld for tax payments at a weighted average vest date fair value of $55.65. |
Organization and Summary of S29
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) | 6 Months Ended | ||||
Jun. 30, 2018USD ($)Insurance | Jun. 30, 2017USD ($) | Jun. 07, 2018 | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) | |
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Number of insurance companies | Insurance | 2 | ||||
Corporate income tax rate | 21.00% | ||||
Increase net cash used in investing activities | $ 8,191,000 | $ 77,921,000 | |||
Accounting Standards Update 2016-01 | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Cumulative-effect adjustment from adoption | $ 0 | ||||
Accounting Standards Update 2016-01 | Retained Earnings | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Cumulative-effect adjustment from adoption | 7,700,000 | ||||
Accounting Standards Update 2016-01 | Accumulated Other Comprehensive Income (Loss) | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Cumulative-effect adjustment from adoption | (7,700,000) | ||||
Accounting Standards Update 2016-18 | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Increase net cash used in investing activities | 18,100,000 | ||||
Reclassification of restricted and unrestricted cash and cash equivalent | $ 71,300,000 | ||||
Accounting Standards Update 2018-02 | Retained Earnings | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Cumulative-effect adjustment from adoption | (2,800,000) | ||||
Accounting Standards Update 2018-02 | Accumulated Other Comprehensive Income (Loss) | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Cumulative-effect adjustment from adoption | $ 2,800,000 | ||||
Immaterial Reclassification Correction | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Cash reclassified from short- term investment to cash and cash equivalent | 20,500,000 | ||||
Oversee deposit reclassified from short-term investments to other invested asset | $ 28,800,000 | ||||
Increase net cash used in investing activities | $ 4,800,000 | ||||
Bracht, Deckers & Mackelbert NV and Assurances Continentales - Continentale Verzekeringen NV | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Business acquisition, percentage of ownership interest acquired | 100.00% | ||||
Syndicate 1,221 | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Percentage control of stamp capacity | 100.00% |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) € in Millions | Jun. 30, 2018USD ($) | Jun. 07, 2018USD ($) | Jun. 07, 2018EUR (€) | Jun. 30, 2018USD ($) | Jun. 07, 2018EUR (€) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | ||||||
Goodwill recognized at date of acquisition | $ 15,745,000 | $ 15,745,000 | $ 4,460,000 | |||
Bracht, Deckers & Mackelbert NV and Assurances Continentales - Continentale Verzekeringen NV | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition date | Jun. 7, 2018 | Jun. 7, 2018 | ||||
Business acquisition, name of acquired entity | BDM and ASCO | |||||
Business acquisition, percentage of ownership interest acquired | 100.00% | 100.00% | ||||
Business acquisition, purchase price | 40,500,000 | $ 40,492,000 | € 35 | |||
Additional reimbursement amount receivable | 5,800,000 | $ 5,800,000 | € 5 | |||
Business combination, fair value of acquisition reimbursement amount | 0 | 0 | 0 | |||
Goodwill recognized at date of acquisition | $ 11,312,000 | 11,300,000 | $ 11,312,000 | |||
Business combination, identified finite lived intangible assets | $ 7,900,000 | |||||
Business combination, finite lived intangible assets weighted average amortization period | 12 years | 12 years | ||||
Business combination, indefinite intangible assets | $ 2,500,000 |
Business Combinations - Schedul
Business Combinations - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) $ in Thousands, € in Millions | Jun. 30, 2018USD ($) | Jun. 07, 2018USD ($) | Jun. 07, 2018EUR (€) | Dec. 31, 2017USD ($) |
Liabilities | ||||
Goodwill | $ 15,745 | $ 4,460 | ||
Bracht, Deckers & Mackelbert NV and Assurances Continentales - Continentale Verzekeringen NV | ||||
Business Acquisition [Line Items] | ||||
Consideration paid | 40,500 | $ 40,492 | € 35 | |
Assets | ||||
Investments | 45,182 | |||
Cash and Cash Equivalents | 18,109 | |||
Prepaid Reinsurance Premiums | 2,701 | |||
Reinsurance Recoverables on Paid Losses | 1,311 | |||
Reinsurance Recoverables on Unpaid Losses and LAE | 15,769 | |||
Other Assets | 19,943 | |||
Fair Value of Identifiable Intangible Assets | 10,391 | |||
Total Assets Acquired | 113,406 | |||
Liabilities | ||||
Reserves for Losses and LAE | 31,928 | |||
Unearned Premiums | 11,139 | |||
Deferred Income Tax | 8,947 | |||
Accounts Payable and Other Liabilities | 32,212 | |||
Total Liabilities Assumed | 84,226 | |||
Goodwill | $ 11,312 | $ 11,300 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2018Segment | |
Segment Reporting Information [Line Items] | |
Number of underwriting Segments | 3 |
U.S.Insurance | |
Segment Reporting Information [Line Items] | |
Number of Operating Segments | 3 |
International Insurance | |
Segment Reporting Information [Line Items] | |
Number of Operating Segments | 3 |
Financial Data by Segment (Deta
Financial Data by Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Segment Reporting Information [Line Items] | |||||
Net Earned Premiums | $ 331,015 | $ 293,835 | $ 653,642 | $ 579,966 | |
Net Losses and LAE | (196,333) | (177,110) | (382,478) | (346,710) | |
Commission Expenses | (53,193) | (48,173) | (107,345) | (96,017) | |
Other Operating Expenses | (68,182) | (60,766) | (131,108) | (119,304) | |
Other Underwriting Income (Expense) | 7 | 11 | 10 | 32 | |
Underwriting Profit (Loss) | 13,314 | 7,797 | 32,721 | 17,967 | |
Net Investment Income | 24,601 | 22,265 | 48,303 | 43,713 | |
Total Net Realized and Unrealized Gains | 3,116 | 1,694 | 1,104 | 1,650 | |
Interest Expense | (3,864) | (3,861) | (7,728) | (7,722) | |
Other Income (Loss) | 2,621 | (422) | 2,501 | 625 | |
Income (Loss) Before Income Taxes | 39,788 | 27,473 | 76,901 | 56,233 | |
Income Tax Expense | (7,684) | (6,971) | (13,919) | (14,621) | |
Net Income (Loss) | $ 32,104 | $ 20,502 | $ 62,982 | $ 41,612 | |
Losses and LAE Ratio | 59.30% | 60.30% | 58.50% | 59.80% | |
Commission Expense Ratio | 16.10% | 16.40% | 16.40% | 16.60% | |
Other Operating Expense Ratio | [1] | 20.60% | 20.60% | 20.10% | 20.50% |
Combined Ratio | 96.00% | 97.30% | 95.00% | 96.90% | |
U.S.Insurance | |||||
Segment Reporting Information [Line Items] | |||||
Net Earned Premiums | $ 179,746 | $ 167,087 | $ 352,659 | $ 331,091 | |
Net Losses and LAE | (111,885) | (105,270) | (222,307) | (204,096) | |
Commission Expenses | (20,382) | (20,460) | (41,243) | (40,844) | |
Other Operating Expenses | (38,447) | (33,140) | (75,438) | (66,612) | |
Other Underwriting Income (Expense) | 71 | 100 | 169 | 210 | |
Underwriting Profit (Loss) | 9,103 | 8,317 | 13,840 | 19,749 | |
Income (Loss) Before Income Taxes | $ 9,103 | $ 8,317 | $ 13,840 | $ 19,749 | |
Losses and LAE Ratio | 62.20% | 63.00% | 63.00% | 61.60% | |
Commission Expense Ratio | 11.30% | 12.20% | 11.70% | 12.30% | |
Other Operating Expense Ratio | [1] | 21.40% | 19.80% | 21.40% | 20.10% |
Combined Ratio | 94.90% | 95.00% | 96.10% | 94.00% | |
International Insurance | |||||
Segment Reporting Information [Line Items] | |||||
Net Earned Premiums | $ 92,071 | $ 82,100 | $ 185,281 | $ 166,186 | |
Net Losses and LAE | (52,304) | (44,095) | (98,147) | (94,800) | |
Commission Expenses | (19,863) | (19,001) | (39,619) | (38,234) | |
Other Operating Expenses | (23,299) | (22,506) | (43,829) | (42,299) | |
Underwriting Profit (Loss) | (3,395) | (3,502) | 3,686 | (9,147) | |
Income (Loss) Before Income Taxes | $ (3,395) | $ (3,502) | $ 3,686 | $ (9,147) | |
Losses and LAE Ratio | 56.80% | 53.70% | 53.00% | 57.00% | |
Commission Expense Ratio | 21.60% | 23.10% | 21.40% | 23.00% | |
Other Operating Expense Ratio | [1] | 25.30% | 27.50% | 23.60% | 25.50% |
Combined Ratio | 103.70% | 104.30% | 98.00% | 105.50% | |
Global Reinsurance | |||||
Segment Reporting Information [Line Items] | |||||
Net Earned Premiums | $ 59,198 | $ 44,648 | $ 115,702 | $ 82,689 | |
Net Losses and LAE | (32,144) | (27,745) | (62,024) | (47,814) | |
Commission Expenses | (13,148) | (8,970) | (26,916) | (17,462) | |
Other Operating Expenses | (6,436) | (5,120) | (11,841) | (10,393) | |
Other Underwriting Income (Expense) | 136 | 169 | 274 | 345 | |
Underwriting Profit (Loss) | 7,606 | 2,982 | 15,195 | 7,365 | |
Income (Loss) Before Income Taxes | $ 7,606 | $ 2,982 | $ 15,195 | $ 7,365 | |
Losses and LAE Ratio | 54.30% | 62.10% | 53.60% | 57.80% | |
Commission Expense Ratio | 22.20% | 20.10% | 23.30% | 21.10% | |
Other Operating Expense Ratio | [1] | 10.70% | 11.10% | 10.00% | 12.20% |
Combined Ratio | 87.20% | 93.30% | 86.90% | 91.10% | |
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Net Investment Income | [2] | $ 24,601 | $ 22,265 | $ 48,303 | $ 43,713 |
Total Net Realized and Unrealized Gains | [2] | 3,116 | 1,694 | 1,104 | 1,650 |
Interest Expense | [2] | (3,864) | (3,861) | (7,728) | (7,722) |
Other Income (Loss) | [2] | 2,621 | (422) | 2,501 | 625 |
Income (Loss) Before Income Taxes | [2] | 26,474 | 19,676 | 44,179 | 38,266 |
Income Tax Expense | [2] | (7,684) | (6,971) | (13,919) | (14,621) |
Intersegment Elimination | |||||
Segment Reporting Information [Line Items] | |||||
Commission Expenses | [2] | 200 | 258 | 433 | 523 |
Other Underwriting Income (Expense) | [2] | $ (200) | $ (258) | $ (433) | $ (523) |
[1] | Includes Other Operating Expenses and Other Underwriting Income (Expense). | ||||
[2] | Includes Corporate segment intercompany eliminations. |
Revenue by Operating Segment (D
Revenue by Operating Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Gross Written Premiums | $ 497,236 | $ 452,179 | $ 992,460 | $ 902,484 |
Ceded Written Premiums | (117,944) | (118,897) | (219,906) | (232,039) |
Net Written Premiums | 379,292 | 333,282 | 772,554 | 670,445 |
Net Earned Premiums | $ 331,015 | 293,835 | $ 653,642 | 579,966 |
% Change Gross Written Premiums | 10.00% | 10.00% | ||
% Change Ceded Written Premiums | (0.80%) | (5.20%) | ||
% Change Net Written Premiums | 13.80% | 15.20% | ||
% Change Net Earned Premiums | 12.70% | 12.70% | ||
U.S.Insurance | ||||
Segment Reporting Information [Line Items] | ||||
Gross Written Premiums | $ 288,478 | 257,186 | $ 528,406 | 494,791 |
Ceded Written Premiums | (76,144) | (73,857) | (142,725) | (135,344) |
Net Written Premiums | 212,334 | 183,329 | 385,681 | 359,447 |
Net Earned Premiums | $ 179,746 | 167,087 | $ 352,659 | 331,091 |
% Change Gross Written Premiums | 12.20% | 6.80% | ||
% Change Ceded Written Premiums | 3.10% | 5.50% | ||
% Change Net Written Premiums | 15.80% | 7.30% | ||
% Change Net Earned Premiums | 7.60% | 6.50% | ||
U.S.Insurance | Marine | ||||
Segment Reporting Information [Line Items] | ||||
Gross Written Premiums | $ 38,830 | 41,687 | $ 80,554 | 82,637 |
Ceded Written Premiums | (16,918) | (19,451) | (34,398) | (36,971) |
Net Written Premiums | 21,912 | 22,236 | 46,156 | 45,666 |
Net Earned Premiums | $ 21,177 | 21,812 | $ 42,269 | 44,506 |
% Change Gross Written Premiums | (6.90%) | (2.50%) | ||
% Change Ceded Written Premiums | (13.00%) | (7.00%) | ||
% Change Net Written Premiums | (1.50%) | 1.10% | ||
% Change Net Earned Premiums | (2.90%) | (5.00%) | ||
U.S.Insurance | Property Casualty | ||||
Segment Reporting Information [Line Items] | ||||
Gross Written Premiums | $ 217,984 | 187,492 | $ 386,177 | 358,126 |
Ceded Written Premiums | (54,835) | (51,147) | (99,747) | (89,345) |
Net Written Premiums | 163,149 | 136,345 | 286,430 | 268,781 |
Net Earned Premiums | $ 132,630 | 121,226 | $ 260,220 | 240,349 |
% Change Gross Written Premiums | 16.30% | 7.80% | ||
% Change Ceded Written Premiums | 7.20% | 11.60% | ||
% Change Net Written Premiums | 19.70% | 6.60% | ||
% Change Net Earned Premiums | 9.40% | 8.30% | ||
U.S.Insurance | Professional Liability | ||||
Segment Reporting Information [Line Items] | ||||
Gross Written Premiums | $ 31,664 | 28,007 | $ 61,675 | 54,028 |
Ceded Written Premiums | (4,391) | (3,259) | (8,580) | (9,028) |
Net Written Premiums | 27,273 | 24,748 | 53,095 | 45,000 |
Net Earned Premiums | $ 25,939 | 24,049 | $ 50,170 | 46,236 |
% Change Gross Written Premiums | 13.10% | 14.20% | ||
% Change Ceded Written Premiums | 34.70% | (5.00%) | ||
% Change Net Written Premiums | 10.20% | 18.00% | ||
% Change Net Earned Premiums | 7.90% | 8.50% | ||
International Insurance | ||||
Segment Reporting Information [Line Items] | ||||
Gross Written Premiums | $ 132,523 | 131,193 | $ 260,395 | 273,053 |
Ceded Written Premiums | (39,882) | (43,809) | (68,770) | (90,402) |
Net Written Premiums | 92,641 | 87,384 | 191,625 | 182,651 |
Net Earned Premiums | $ 92,071 | 82,100 | $ 185,281 | 166,186 |
% Change Gross Written Premiums | 1.00% | (4.60%) | ||
% Change Ceded Written Premiums | (9.00%) | (23.90%) | ||
% Change Net Written Premiums | 6.00% | 4.90% | ||
% Change Net Earned Premiums | 12.10% | 11.50% | ||
International Insurance | Marine | ||||
Segment Reporting Information [Line Items] | ||||
Gross Written Premiums | $ 40,714 | 49,597 | $ 97,192 | 118,430 |
Ceded Written Premiums | (11,523) | (12,536) | (19,577) | (23,462) |
Net Written Premiums | 29,191 | 37,061 | 77,615 | 94,968 |
Net Earned Premiums | $ 37,197 | 39,525 | $ 76,476 | 77,020 |
% Change Gross Written Premiums | (17.90%) | (17.90%) | ||
% Change Ceded Written Premiums | (8.10%) | (16.60%) | ||
% Change Net Written Premiums | (21.20%) | (18.30%) | ||
% Change Net Earned Premiums | (5.90%) | (0.70%) | ||
International Insurance | Property Casualty | ||||
Segment Reporting Information [Line Items] | ||||
Gross Written Premiums | $ 46,579 | 46,663 | $ 80,539 | 87,031 |
Ceded Written Premiums | (17,705) | (20,362) | (31,372) | (50,008) |
Net Written Premiums | 28,874 | 26,301 | 49,167 | 37,023 |
Net Earned Premiums | $ 23,715 | 23,337 | $ 45,484 | 45,517 |
% Change Gross Written Premiums | (0.20%) | (7.50%) | ||
% Change Ceded Written Premiums | (13.10%) | (37.30%) | ||
% Change Net Written Premiums | 9.80% | 32.80% | ||
% Change Net Earned Premiums | 1.60% | (0.10%) | ||
International Insurance | Professional Liability | ||||
Segment Reporting Information [Line Items] | ||||
Gross Written Premiums | $ 45,230 | 34,933 | $ 82,664 | 67,592 |
Ceded Written Premiums | (10,654) | (10,911) | (17,821) | (16,932) |
Net Written Premiums | 34,576 | 24,022 | 64,843 | 50,660 |
Net Earned Premiums | $ 31,159 | 19,238 | $ 63,321 | 43,649 |
% Change Gross Written Premiums | 29.50% | 22.30% | ||
% Change Ceded Written Premiums | (2.40%) | 5.30% | ||
% Change Net Written Premiums | 43.90% | 28.00% | ||
% Change Net Earned Premiums | 62.00% | 45.10% | ||
Global Reinsurance | ||||
Segment Reporting Information [Line Items] | ||||
Gross Written Premiums | $ 76,235 | 63,800 | $ 203,659 | 134,640 |
Ceded Written Premiums | (1,918) | (1,231) | (8,411) | (6,293) |
Net Written Premiums | 74,317 | 62,569 | 195,248 | 128,347 |
Net Earned Premiums | $ 59,198 | $ 44,648 | $ 115,702 | $ 82,689 |
% Change Gross Written Premiums | 19.50% | 51.30% | ||
% Change Ceded Written Premiums | 55.80% | 33.70% | ||
% Change Net Written Premiums | 18.80% | 52.10% | ||
% Change Net Earned Premiums | 32.60% | 39.90% |
Available-for-Sale Investments
Available-for-Sale Investments Including Other-Than-Temporarily Impaired Securities Recognized within Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Gain (Loss) on Investments [Line Items] | |||
Total available for sale investments | $ 2,967,909 | ||
Gross Unrealized Gains | 18,767 | ||
Gross Unrealized Losses | (48,855) | ||
Amortized Cost | 2,997,997 | ||
Total available for sale investments | $ 3,299,515 | ||
Gross Unrealized Gains | 57,655 | ||
Gross Unrealized Losses | (16,184) | ||
Amortized Cost | 3,258,044 | ||
Fixed Maturities | |||
Gain (Loss) on Investments [Line Items] | |||
Total available for sale investments | 2,961,541 | 3,057,054 | |
Gross Unrealized Gains | 18,767 | 44,158 | |
Gross Unrealized Losses | (48,855) | (14,512) | |
Amortized Cost | 2,991,629 | 3,027,408 | |
Fixed Maturities | U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds | |||
Gain (Loss) on Investments [Line Items] | |||
Total available for sale investments | 289,612 | 393,563 | |
Gross Unrealized Gains | 955 | 2,081 | |
Gross Unrealized Losses | (4,189) | (2,014) | |
Amortized Cost | 292,846 | 393,496 | |
Fixed Maturities | States, Municipalities and Political Subdivisions | |||
Gain (Loss) on Investments [Line Items] | |||
Total available for sale investments | 658,129 | 814,632 | |
Gross Unrealized Gains | 10,410 | 20,136 | |
Gross Unrealized Losses | (4,870) | (1,423) | |
Amortized Cost | 652,589 | 795,919 | |
Fixed Maturities | Agency Residential Mortgage-Backed Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Total available for sale investments | 362,870 | 407,619 | |
Gross Unrealized Gains | 1,091 | 2,352 | |
Gross Unrealized Losses | (14,497) | (5,414) | |
Amortized Cost | 376,276 | 410,681 | |
Fixed Maturities | Residential Mortgage Backed Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Total available for sale investments | 96,134 | 54,104 | |
Gross Unrealized Gains | 464 | 606 | |
Gross Unrealized Losses | (431) | (79) | |
Amortized Cost | 96,101 | 53,577 | |
Fixed Maturities | Asset-Backed Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Total available for sale investments | 476,838 | 328,753 | |
Gross Unrealized Gains | 737 | 2,138 | |
Gross Unrealized Losses | (2,749) | (663) | |
Amortized Cost | 478,850 | 327,278 | |
Fixed Maturities | Commercial Mortgage-Backed Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Total available for sale investments | 168,609 | 160,904 | |
Gross Unrealized Gains | 807 | 2,354 | |
Gross Unrealized Losses | (2,817) | (1,182) | |
Amortized Cost | 170,619 | 159,732 | |
Fixed Maturities | Mortgage-Backed and Asset-Backed Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Total available for sale investments | 1,104,451 | 951,380 | |
Gross Unrealized Gains | 3,099 | 7,450 | |
Gross Unrealized Losses | (20,494) | (7,338) | |
Amortized Cost | 1,121,846 | 951,268 | |
Fixed Maturities | Corporate Exposures | |||
Gain (Loss) on Investments [Line Items] | |||
Total available for sale investments | [1] | 909,349 | 897,479 |
Gross Unrealized Gains | [1] | 4,303 | 14,491 |
Gross Unrealized Losses | [1] | (19,302) | (3,737) |
Amortized Cost | [1] | 924,348 | 886,725 |
Short-Term Investments | |||
Gain (Loss) on Investments [Line Items] | |||
Total available for sale investments | 6,368 | 6,480 | |
Gross Unrealized Gains | 3 | ||
Amortized Cost | $ 6,368 | 6,477 | |
Equity Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Total available for sale investments | 235,981 | ||
Gross Unrealized Gains | 13,494 | ||
Gross Unrealized Losses | (1,672) | ||
Amortized Cost | 224,159 | ||
Equity Securities | Common Stocks | |||
Gain (Loss) on Investments [Line Items] | |||
Total available for sale investments | 52,439 | ||
Gross Unrealized Gains | 7,423 | ||
Gross Unrealized Losses | (112) | ||
Amortized Cost | 45,128 | ||
Equity Securities | Preferred Stocks | |||
Gain (Loss) on Investments [Line Items] | |||
Total available for sale investments | 183,542 | ||
Gross Unrealized Gains | 6,071 | ||
Gross Unrealized Losses | (1,560) | ||
Amortized Cost | $ 179,031 | ||
[1] | Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks. |
Equity Securities at Fair Value
Equity Securities at Fair Value (Detail) $ in Thousands | Jun. 30, 2018USD ($) |
Gain (Loss) on Investments [Line Items] | |
Fair Value | $ 327,466 |
Gross Unrealized Gains | 13,603 |
Gross Unrealized (Losses) | (3,634) |
Cost | 317,497 |
Common Stock | |
Gain (Loss) on Investments [Line Items] | |
Fair Value | 145,077 |
Gross Unrealized Gains | 9,749 |
Gross Unrealized (Losses) | (499) |
Cost | 135,827 |
Preferred Stocks | |
Gain (Loss) on Investments [Line Items] | |
Fair Value | 182,389 |
Gross Unrealized Gains | 3,854 |
Gross Unrealized (Losses) | (3,135) |
Cost | $ 181,670 |
Investments - Additional Inform
Investments - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018USD ($)Security | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)Security | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($)Security | |
Schedule of Investments [Line Items] | |||||
Other Invested Assets | $ 2,000,000 | $ 2,000,000 | $ 1,700,000 | ||
Non-credit OTTI on fixed maturities in a net unrealized gain position | 400,000 | $ 500,000 | |||
OTTI losses | 0 | $ 0 | 0 | $ 1,100,000 | |
Change to cumulative amounts of credit loss portion of OTTI losses | $ 0 | 0 | $ 0 | 0 | |
Fixed Maturities | |||||
Schedule of Investments [Line Items] | |||||
Number of securities in unrealized loss position | Security | 753 | 753 | 454 | ||
Gross Unrealized Loss | $ 48,855,000 | $ 48,855,000 | $ 14,512,000 | ||
Cumulative amounts related to credit loss portion of OTTI losses | $ 2,400,000 | $ 2,400,000 | $ 2,400,000 | $ 2,400,000 | |
Equity Securities | |||||
Schedule of Investments [Line Items] | |||||
Number of securities in unrealized loss position | Security | 22 | ||||
Non-government-backed securities | Maximum | |||||
Schedule of Investments [Line Items] | |||||
Percentage of investment | 5.00% | 5.00% | 5.00% | ||
Gross Unrealized Loss | $ 1,700,000 | $ 1,700,000 | $ 700,000 | ||
Mortgage-Backed and Asset-Backed Securities | |||||
Schedule of Investments [Line Items] | |||||
Securities, effective maturities | 5 years 3 months 18 days | ||||
Mortgage-Backed and Asset-Backed Securities | Fixed Maturities | |||||
Schedule of Investments [Line Items] | |||||
Gross Unrealized Loss | 20,494,000 | $ 20,494,000 | 7,338,000 | ||
Other Invested Assets | |||||
Schedule of Investments [Line Items] | |||||
Overseas deposits, fair value | $ 36,600,000 | $ 36,600,000 | $ 28,800,000 |
Scheduled Maturity Dates for Fi
Scheduled Maturity Dates for Fixed Maturity Securities by Number of Years Until Maturity (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value | ||
Total | $ 2,967,909 | |
Amortized Cost | ||
Amortized Cost | 2,997,997 | |
Fixed Maturities | ||
Fair Value | ||
Due in one year or less | 219,948 | |
Due after one year through five years | 722,278 | |
Due after five years through ten years | 336,352 | |
Due after ten years | 578,512 | |
Mortgage-Backed and Asset-Backed Securities | 1,104,451 | |
Total | 2,961,541 | $ 3,057,054 |
Amortized Cost | ||
Due in one year or less | 221,066 | |
Due after one year through five years | 732,073 | |
Due after five years through ten years | 338,140 | |
Due after ten years | 578,504 | |
Mortgage-Backed and Asset-Backed Securities | 1,121,846 | |
Amortized Cost | $ 2,991,629 | $ 3,027,408 |
Summary of Aggregate Fair Value
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 ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Gain (Loss) on Investments [Line Items] | |||
Less than 12 months Fair Value | $ 911,581 | ||
Less than 12 months Gross Unrealized Losses | (6,271) | ||
Greater than 12 months Fair Value | 508,338 | ||
Greater than 12 months Gross Unrealized Losses | (9,913) | ||
Fair Value | 1,419,919 | ||
Gross Unrealized Losses | (16,184) | ||
Fixed Maturities | |||
Gain (Loss) on Investments [Line Items] | |||
Less than 12 months Fair Value | $ 1,602,449 | 849,475 | |
Less than 12 months Gross Unrealized Losses | (29,328) | (4,666) | |
Greater than 12 months Fair Value | 444,345 | 505,906 | |
Greater than 12 months Gross Unrealized Losses | (19,527) | (9,846) | |
Fair Value | 2,046,794 | 1,355,381 | |
Gross Unrealized Losses | (48,855) | (14,512) | |
Fixed Maturities | U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds | |||
Gain (Loss) on Investments [Line Items] | |||
Less than 12 months Fair Value | 220,029 | 273,672 | |
Less than 12 months Gross Unrealized Losses | (3,420) | (1,502) | |
Greater than 12 months Fair Value | 39,864 | 54,484 | |
Greater than 12 months Gross Unrealized Losses | (769) | (512) | |
Fair Value | 259,893 | 328,156 | |
Gross Unrealized Losses | (4,189) | (2,014) | |
Fixed Maturities | States, Municipalities and Political Subdivisions | |||
Gain (Loss) on Investments [Line Items] | |||
Less than 12 months Fair Value | 213,600 | 74,097 | |
Less than 12 months Gross Unrealized Losses | (3,184) | (503) | |
Greater than 12 months Fair Value | 42,654 | 45,085 | |
Greater than 12 months Gross Unrealized Losses | (1,686) | (920) | |
Fair Value | 256,254 | 119,182 | |
Gross Unrealized Losses | (4,870) | (1,423) | |
Fixed Maturities | Agency Residential Mortgage-Backed Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Less than 12 months Fair Value | 115,138 | 87,496 | |
Less than 12 months Gross Unrealized Losses | (3,504) | (346) | |
Greater than 12 months Fair Value | 214,279 | 236,745 | |
Greater than 12 months Gross Unrealized Losses | (10,993) | (5,068) | |
Fair Value | 329,417 | 324,241 | |
Gross Unrealized Losses | (14,497) | (5,414) | |
Fixed Maturities | Residential Mortgage Backed Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Less than 12 months Fair Value | 78,032 | 12,418 | |
Less than 12 months Gross Unrealized Losses | (421) | (62) | |
Greater than 12 months Fair Value | 387 | 546 | |
Greater than 12 months Gross Unrealized Losses | (10) | (17) | |
Fair Value | 78,419 | 12,964 | |
Gross Unrealized Losses | (431) | (79) | |
Fixed Maturities | Asset-Backed Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Less than 12 months Fair Value | 273,120 | 85,877 | |
Less than 12 months Gross Unrealized Losses | (2,413) | (468) | |
Greater than 12 months Fair Value | 23,583 | 24,733 | |
Greater than 12 months Gross Unrealized Losses | (336) | (195) | |
Fair Value | 296,703 | 110,610 | |
Gross Unrealized Losses | (2,749) | (663) | |
Fixed Maturities | Commercial Mortgage-Backed Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Less than 12 months Fair Value | 59,304 | 20,482 | |
Less than 12 months Gross Unrealized Losses | (954) | (95) | |
Greater than 12 months Fair Value | 22,124 | 22,903 | |
Greater than 12 months Gross Unrealized Losses | (1,863) | (1,087) | |
Fair Value | 81,428 | 43,385 | |
Gross Unrealized Losses | (2,817) | (1,182) | |
Fixed Maturities | Mortgage-Backed and Asset-Backed Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Less than 12 months Fair Value | 525,594 | 206,273 | |
Less than 12 months Gross Unrealized Losses | (7,292) | (971) | |
Greater than 12 months Fair Value | 260,373 | 284,927 | |
Greater than 12 months Gross Unrealized Losses | (13,202) | (6,367) | |
Fair Value | 785,967 | 491,200 | |
Gross Unrealized Losses | (20,494) | (7,338) | |
Fixed Maturities | Corporate Exposures | |||
Gain (Loss) on Investments [Line Items] | |||
Less than 12 months Fair Value | [1] | 643,226 | 295,433 |
Less than 12 months Gross Unrealized Losses | [1] | (15,432) | (1,690) |
Greater than 12 months Fair Value | [1] | 101,454 | 121,410 |
Greater than 12 months Gross Unrealized Losses | [1] | (3,870) | (2,047) |
Fair Value | [1] | 744,680 | 416,843 |
Gross Unrealized Losses | [1] | $ (19,302) | (3,737) |
Equity Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Less than 12 months Fair Value | 62,106 | ||
Less than 12 months Gross Unrealized Losses | (1,605) | ||
Greater than 12 months Fair Value | 2,432 | ||
Greater than 12 months Gross Unrealized Losses | (67) | ||
Fair Value | 64,538 | ||
Gross Unrealized Losses | (1,672) | ||
Equity Securities | Common Stocks | |||
Gain (Loss) on Investments [Line Items] | |||
Less than 12 months Fair Value | 11,245 | ||
Less than 12 months Gross Unrealized Losses | (81) | ||
Greater than 12 months Fair Value | 1,770 | ||
Greater than 12 months Gross Unrealized Losses | (31) | ||
Fair Value | 13,015 | ||
Gross Unrealized Losses | (112) | ||
Equity Securities | Preferred Stocks | |||
Gain (Loss) on Investments [Line Items] | |||
Less than 12 months Fair Value | 50,861 | ||
Less than 12 months Gross Unrealized Losses | (1,524) | ||
Greater than 12 months Fair Value | 662 | ||
Greater than 12 months Gross Unrealized Losses | (36) | ||
Fair Value | 51,523 | ||
Gross Unrealized Losses | $ (1,560) | ||
[1] | Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks. |
Net Investment Income (Detail)
Net Investment Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net Investment Income [Line Items] | ||||
Investment Income | $ 25,436 | $ 23,166 | $ 49,826 | $ 45,503 |
Investment Expenses | (835) | (901) | (1,523) | (1,790) |
Net Investment Income | 24,601 | 22,265 | 48,303 | 43,713 |
Fixed Maturities | ||||
Net Investment Income [Line Items] | ||||
Investment Income | 21,719 | 19,186 | 42,771 | 37,527 |
Equity Securities | ||||
Net Investment Income [Line Items] | ||||
Investment Income | 3,161 | 3,780 | 6,086 | 7,564 |
Short-Term Investments, Cash & Cash Equivalents | ||||
Net Investment Income [Line Items] | ||||
Investment Income | 415 | 87 | 642 | 170 |
Other Invested Assets | ||||
Net Investment Income [Line Items] | ||||
Investment Income | $ 141 | $ 113 | $ 327 | $ 242 |
Realized Gains and Losses on In
Realized Gains and Losses on Investment Sold, Excluding Net Other-Than-Temporary Impairment Losses Recognized in Earnings (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Gain (Loss) on Investments [Line Items] | ||||
Net Realized Gains (Losses) on Investments Sold | $ 1,787 | $ 1,694 | $ 2,956 | $ 2,743 |
Fixed Maturities | ||||
Gain (Loss) on Investments [Line Items] | ||||
Gains | 1,541 | 344 | 3,347 | 812 |
Losses | (481) | (958) | (756) | (2,214) |
Net Realized Gains (Losses) on Investments Sold | 1,060 | (614) | 2,591 | (1,402) |
Short-Term Investments, Cash & Cash Equivalents | ||||
Gain (Loss) on Investments [Line Items] | ||||
Gains | 63 | 119 | 81 | 226 |
Losses | (21) | (45) | (195) | (125) |
Net Realized Gains (Losses) on Investments Sold | 42 | 74 | (114) | 101 |
Other Invested Assets | ||||
Gain (Loss) on Investments [Line Items] | ||||
Gains | 20 | 16 | 70 | 21 |
Losses | (45) | (24) | (86) | (135) |
Net Realized Gains (Losses) on Investments Sold | (25) | (8) | (16) | (114) |
Equity Securities | ||||
Gain (Loss) on Investments [Line Items] | ||||
Gains | 754 | 754 | ||
Gains | 2,470 | 4,386 | ||
Losses | (44) | (259) | ||
Losses | (228) | (228) | ||
Net Realized Gains (Losses) on Investments Sold | $ 710 | $ 495 | ||
Net Realized Gains (Losses) on Investments Sold | $ 2,242 | $ 4,158 |
Portion of Net Unrealized Losse
Portion of Net Unrealized Losses Recognized to Equity Securities (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Gain (Loss) on Investments [Line Items] | ||
Net Unrealized Gains (Losses) recognized during the period | $ 1,329 | $ (1,852) |
Equity Securities | ||
Gain (Loss) on Investments [Line Items] | ||
Total Net Realized and Unrealized Gains (Losses) recognized during the period | 2,039 | (1,357) |
Less: Net Realized Gains on Investments Sold recognized during the period | 710 | 495 |
Net Unrealized Gains (Losses) recognized during the period | $ 1,329 | $ (1,852) |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Detail) - USD ($) | 6 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other invested assets at fair value | $ 36,600,000 | $ 28,800,000 | |
Significant transfers between Level 1 and Level 2 | 0 | $ 0 | |
Level 3 assets | $ 0 | ||
5.75% Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate stated on senior notes | 5.75% | ||
Senior notes due date | Oct. 15, 2023 |
Fixed Maturities and Equity Sec
Fixed Maturities and Equity Securities by Asset Class that are Measured at Fair Value (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets Measured at Fair Value | $ 3,295,375 | $ 3,299,515 |
Total Liabilities Measured at Fair Value | 273,865 | 277,951 |
Fixed Maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 2,961,541 | 3,057,054 |
Fixed Maturities | U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 289,612 | 393,563 |
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 | 658,129 | 814,632 |
Fixed Maturities | Agency Residential Mortgage-Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 362,870 | 407,619 |
Fixed Maturities | Residential Mortgage Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 96,134 | 54,104 |
Fixed Maturities | Asset-Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 476,838 | 328,753 |
Fixed Maturities | Commercial Mortgage-Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 168,609 | 160,904 |
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 | 1,104,451 | 951,380 |
Fixed Maturities | Corporate Exposures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 909,349 | 897,479 |
Equity Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 327,466 | 235,981 |
Equity Securities | Common Stocks | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 145,077 | 52,439 |
Equity Securities | Preferred Stocks | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 182,389 | 183,542 |
Short-Term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 6,368 | 6,480 |
Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes, at Fair Value | 273,865 | 277,951 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets Measured at Fair Value | 118,820 | 237,170 |
Total Liabilities Measured at Fair Value | 0 | 0 |
Level 1 | Fixed Maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 80,379 | 178,251 |
Level 1 | Fixed Maturities | U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 80,379 | 178,251 |
Level 1 | 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 | 0 | 0 |
Level 1 | Fixed Maturities | Agency Residential Mortgage-Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 1 | Fixed Maturities | Residential Mortgage Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 1 | Fixed Maturities | Asset-Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 1 | Fixed Maturities | Commercial Mortgage-Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 1 | 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 | 0 | 0 |
Level 1 | Fixed Maturities | Corporate Exposures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 1 | Equity Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 38,441 | 52,439 |
Level 1 | Equity Securities | Common Stocks | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 38,441 | 52,439 |
Level 1 | Equity Securities | Preferred Stocks | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 1 | Short-Term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 6,480 |
Level 1 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes, at Fair Value | 0 | 0 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets Measured at Fair Value | 3,176,555 | 3,062,345 |
Total Liabilities Measured at Fair Value | 273,865 | 277,951 |
Level 2 | Fixed Maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 2,881,162 | 2,878,803 |
Level 2 | Fixed Maturities | U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 209,233 | 215,312 |
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 | 658,129 | 814,632 |
Level 2 | Fixed Maturities | Agency Residential Mortgage-Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 362,870 | 407,619 |
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 | 96,134 | 54,104 |
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 | 476,838 | 328,753 |
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 | 168,609 | 160,904 |
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 | 1,104,451 | 951,380 |
Level 2 | Fixed Maturities | Corporate Exposures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 909,349 | 897,479 |
Level 2 | Equity Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 289,025 | 183,542 |
Level 2 | Equity Securities | Common Stocks | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 106,636 | 0 |
Level 2 | Equity Securities | Preferred Stocks | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 182,389 | 183,542 |
Level 2 | Short-Term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 6,368 | 0 |
Level 2 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes, at Fair Value | 273,865 | 277,951 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Assets Measured at Fair Value | 0 | 0 |
Total Liabilities Measured at Fair Value | 0 | 0 |
Level 3 | Fixed Maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 3 | Fixed Maturities | U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 3 | 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 | 0 | 0 |
Level 3 | Fixed Maturities | Agency Residential Mortgage-Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 3 | Fixed Maturities | Residential Mortgage Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 3 | Fixed Maturities | Asset-Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 3 | Fixed Maturities | Commercial Mortgage-Backed Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 3 | 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 | 0 | 0 |
Level 3 | Fixed Maturities | Corporate Exposures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 3 | Equity Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 3 | Equity Securities | Common Stocks | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 3 | Equity Securities | Preferred Stocks | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 3 | Short-Term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed Maturities and Equity Securities, at Fair Value | 0 | 0 |
Level 3 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes, at Fair Value | $ 0 | $ 0 |
Goodwill and Intangible Asset45
Goodwill and Intangible Assets - Summary of Analysis of Goodwill by Reporting Segment (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Goodwill [Line Items] | |
Goodwill at Beginning of the Period | $ 4,460 |
Goodwill Acquired | 11,312 |
Foreign Currency Translation Adjustment | (27) |
Goodwill at End of the Period | 15,745 |
U.S.Insurance | |
Goodwill [Line Items] | |
Goodwill at Beginning of the Period | 1,978 |
Goodwill at End of the Period | 1,978 |
International Insurance | |
Goodwill [Line Items] | |
Goodwill at Beginning of the Period | 2,482 |
Goodwill Acquired | 11,312 |
Foreign Currency Translation Adjustment | (27) |
Goodwill at End of the Period | $ 13,767 |
Goodwill and Intangible Asset46
Goodwill and Intangible Assets - Summary of Gross Carrying Value and Weighted Average Amortization Period of Intangible Assets by Type (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Intangible Assets [Line Items] | |
Finite-Lived Assets, Gross Carrying Amount | $ 7,928 |
Indefinite-Lived Assets, Gross Carrying Amount | 4,599 |
ASCO Customer Relationships | |
Intangible Assets [Line Items] | |
Finite-Lived Assets, Gross Carrying Amount | $ 4,739 |
Finite-Lived Assets, Weighted Average Amortization Period | 15 years |
ASCO VOBA | |
Intangible Assets [Line Items] | |
Finite-Lived Assets, Gross Carrying Amount | $ 1,694 |
Finite-Lived Assets, Weighted Average Amortization Period | 4 years |
BDM Broker Networks | |
Intangible Assets [Line Items] | |
Finite-Lived Assets, Gross Carrying Amount | $ 1,002 |
Finite-Lived Assets, Weighted Average Amortization Period | 15 years |
BDM Trade Name | |
Intangible Assets [Line Items] | |
Finite-Lived Assets, Gross Carrying Amount | $ 493 |
Finite-Lived Assets, Weighted Average Amortization Period | 1 year |
ASCO European Licenses | |
Intangible Assets [Line Items] | |
Indefinite-Lived Assets, Gross Carrying Amount | $ 2,463 |
NUAL Lloyd's Syndicate Capacity | |
Intangible Assets [Line Items] | |
Indefinite-Lived Assets, Gross Carrying Amount | $ 2,136 |
Goodwill and Intangible Asset47
Goodwill and Intangible Assets - Summary of Estimated Remaining Amortization Expense for Finite-Lived Intangible Assets (Detail) $ in Thousands | Jun. 30, 2018USD ($) |
Finite Lived Intangible Assets Future Amortization Expense Current And Five Succeeding Fiscal Years [Abstract] | |
2,018 | $ 649 |
2,019 | 1,053 |
2,020 | 806 |
2,021 | 806 |
2,022 | 594 |
2023 and thereafter | 4,020 |
Total | $ 7,928 |
Summary of Reserves for Losses
Summary of Reserves for Losses and LAE Activity (Detail) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Insurance [Abstract] | |||
Net Reserves for Losses and LAE at Beginning of Year | $ 1,705,380 | $ 1,510,451 | |
Acquired Net Reserves | 16,159 | ||
Provision for Losses and LAE for Claims Occurring in the Current Year | 379,158 | 331,595 | |
Increase (Decrease) in Estimated Losses and LAE for Claims Occurring in Prior Years | 3,320 | 15,115 | |
Incurred Losses and LAE | 382,478 | 346,710 | |
Losses and LAE Paid for Claims Occurring During: | |||
Current Year | (32,832) | (47,235) | |
Prior Years | (292,843) | (249,895) | |
Losses and LAE Payments | (325,675) | (297,130) | |
Foreign Currency Adjustment | (3,310) | 3,432 | |
Net Reserves for Losses and LAE at End of Period | 1,775,032 | 1,563,463 | |
Reinsurance Recoverables on Unpaid Losses and LAE | 799,084 | 782,864 | $ 809,765 |
Gross Reserves for Losses and LAE at End of Period | $ 2,574,116 | $ 2,346,327 | $ 2,515,145 |
Loss Reserves - Additional Info
Loss Reserves - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Causes Of Increase Decrease In Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Increased in incurred losses and LAE | $ 35,800 | |
Net prior accident year reserve strengthening | 3,320 | $ 15,115 |
Increase in losses and loss adjustment expense payments | 28,500 | |
Non-catastrophe | ||
Causes Of Increase Decrease In Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Net prior accident year reserve strengthening | 11,800 | |
Catastrophe | ||
Causes Of Increase Decrease In Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Net prior accident year reserve strengthening | $ 8,500 |
Ceded Reinsurance - Additional
Ceded Reinsurance - Additional Information (Detail) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Insurance [Abstract] | ||
Reinsurance recoverables | $ 1,100 | |
Allowance for uncollectible reinsurance | $ 12.6 | $ 12.6 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2013 | Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | ||||
Incentive awarded to the company by the State of Connecticut, total | $ 11.5 | $ 11.5 | ||
Incentive awarded to the company by the State of Connecticut, non-interest bearing loans | 8 | 8 | ||
Incentive awarded to the company by the State of Connecticut, grants | $ 3.5 | $ 3.5 | ||
Non-interest bearing incentive loan term | 10 years | |||
Forgiveness awarded to the company by the state of Connecticut | $ 7 | |||
Incentive awarded to the company by the State of Connecticut, revenue recognized | $ 0.7 | 0.4 | ||
Incentive awarded to the company by the State of Connecticut, deferred revenue | $ 5.3 | $ 5.3 | $ 4.4 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2018 | |
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 |
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 |
Performance Based Grants | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share based payment award, award vesting period | 3 years |
Restricted Stock Unit Awards (D
Restricted Stock Unit Awards (Detail) - Restricted Stock Units (RSUs) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of Awards | |
Nonvested at the beginning of the period | shares | 159,539 |
Granted | shares | 21,593 |
Vested | shares | (65,236) |
Forfeited | shares | (7,000) |
Nonvested at the end of the period | shares | 108,896 |
Weighted Average Grant Date Fair Value | |
Nonvested at the beginning of the period | $ / shares | $ 41.60 |
Granted | $ / shares | 49.03 |
Vested | $ / shares | 34.16 |
Forfeited | $ / shares | 38 |
Nonvested at the end of the period | $ / shares | $ 47.76 |
Restricted Stock Unit Awards (P
Restricted Stock Unit Awards (Parenthetical) (Detail) - Restricted Stock Units (RSUs) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share awards withheld for tax payments | shares | 25,814 |
Weighted average vest date fair value, withheld for tax payments | $ / shares | $ 55.21 |
Performance-based Equity Awards
Performance-based Equity Awards (Detail) - Performance-based Equity Awards | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of Awards | |
Nonvested at the beginning of the period | shares | 966,361 |
Granted | shares | 247,554 |
Performance Adjustment | shares | (59,833) |
Vested | shares | (274,299) |
Forfeited | shares | (16,250) |
Nonvested at the end of the period | shares | 863,533 |
Weighted Average Grant Date Fair Value | |
Nonvested at the beginning of the period | $ / shares | $ 43.39 |
Granted | $ / shares | 54.15 |
Performance Adjustment | $ / shares | 37.25 |
Vested | $ / shares | 37.25 |
Forfeited | $ / shares | 43.27 |
Nonvested at the end of the period | $ / shares | $ 48.85 |
Performance-based Equity Awar56
Performance-based Equity Awards (Parenthetical) (Detail) - Performance-based Equity Awards | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share awards withheld for tax payments | shares | 117,005 |
Weighted average vest date fair value, withheld for tax payments | $ / shares | $ 55.65 |
Stockholders Equity - Additiona
Stockholders Equity - Additional Information (Detail) - $ / shares | May 10, 2018 | Jun. 30, 2018 |
Equity [Abstract] | ||
Common stock dividend paid per share | $ 0.07 | |
Dividend payable record date | Jun. 29, 2018 |