Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2021 | Jul. 31, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Entity Interactive Data Current | Yes | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Registrant Name | DONEGAL GROUP INC | |
Entity Central Index Key | 0000800457 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Address, State or Province | PA | |
Entity Address, Address Line One | 1195 River Road, P.O. Box 302 | |
Entity Address, City or Town | Marietta | |
Entity Address, Postal Zip Code | 17547 | |
Entity File Number | 0-15341 | |
Entity Tax Identification Number | 23-2424711 | |
City Area Code | 717 | |
Local Phone Number | 426-1931 | |
Entity Incorporation, State or Country Code | DE | |
Class A Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 25,668,501 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | DGICA | |
Security Exchange Name | NASDAQ | |
Class B Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 5,576,775 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | DGICB | |
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Fixed maturities | ||
Held to maturity, at amortized cost | $ 643,847,647 | $ 586,609,439 |
Available for sale, at fair value | 522,580,264 | 555,136,017 |
Equity securities, at fair value | 72,757,031 | 58,556,173 |
Short-term investments, at cost, which approximates fair value | 22,767,372 | 20,900,155 |
Total investments | 1,261,952,314 | 1,221,201,784 |
Cash | 88,004,738 | 103,094,236 |
Accrued investment income | 8,175,750 | 7,936,879 |
Premiums receivable | 189,383,783 | 169,596,332 |
Reinsurance receivable | 422,198,101 | 408,908,850 |
Deferred policy acquisition costs | 69,687,624 | 59,156,958 |
Deferred tax asset, net | 5,134,455 | 5,683,113 |
Prepaid reinsurance premiums | 186,451,557 | 169,418,333 |
Property and equipment, net | 3,350,691 | 4,390,377 |
Accounts receivable - securities | 79,402 | 67,676 |
Federal income taxes recoverable | 4,018,210 | 3,089,369 |
Goodwill | 5,625,354 | 5,625,354 |
Other intangible assets | 958,010 | 958,010 |
Other | 1,380,569 | 1,393,053 |
Total assets | 2,246,400,558 | 2,160,520,324 |
Liabilities | ||
Losses and loss expenses | 998,658,015 | 962,007,437 |
Unearned premiums | 599,949,617 | 537,189,598 |
Accrued expenses | 11,465,644 | 29,115,198 |
Reinsurance balances payable | 4,030,947 | 3,233,523 |
Borrowings under lines of credit | 35,000,000 | 85,000,000 |
Cash dividends declared to stockholders | 0 | 4,436,301 |
Subordinated debentures | 5,000,000 | 5,000,000 |
Accounts payable - securities | 11,295,765 | 0 |
Due to affiliate | 22,196,384 | 10,293,495 |
Other | 8,647,393 | 6,470,652 |
Total liabilities | 1,696,243,765 | 1,642,746,204 |
Stockholders' Equity | ||
Preferred stock | ||
Additional paid-in capital | 302,510,624 | 289,149,567 |
Accumulated other comprehensive income | 8,473,471 | 11,130,612 |
Retained earnings | 280,056,364 | 258,387,288 |
Treasury stock, at cost | (41,226,357) | (41,226,357) |
Total stockholders' equity | 550,156,793 | 517,774,120 |
Total liabilities and stockholders' equity | 2,246,400,558 | 2,160,520,324 |
Class A Common Stock [Member] | ||
Stockholders' Equity | ||
Common stock value | 286,199 | 276,518 |
Total stockholders' equity | 286,199 | 276,518 |
Class B Common Stock [Member] | ||
Stockholders' Equity | ||
Common stock value | 56,492 | 56,492 |
Total stockholders' equity | $ 56,492 | $ 56,492 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Class A Common Stock [Member] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 28,619,866 | 27,651,774 |
Common stock, shares outstanding | 25,617,278 | 24,649,186 |
Class B Common Stock [Member] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 5,649,240 | 5,649,240 |
Common stock, shares outstanding | 5,576,775 | 5,576,775 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues: | ||||
Net premiums earned | $ 192,488,665 | $ 184,373,768 | $ 379,740,265 | $ 371,626,546 |
Investment income, net of investment expenses | 7,652,180 | 7,172,144 | 15,162,758 | 14,548,428 |
Net investment gains (losses) | 4,241,031 | 6,485,896 | 6,710,085 | (4,208,947) |
Lease income | 108,038 | 109,205 | 215,805 | 218,472 |
Installment payment fees | 656,029 | 758,759 | 1,286,928 | 1,626,479 |
Total revenues | 205,145,943 | 198,899,772 | 403,115,841 | 383,810,978 |
Expenses: | ||||
Net losses and loss expenses | 113,956,652 | 105,349,019 | 233,176,399 | 222,595,545 |
Amortization of deferred policy acquisition costs | 33,103,000 | 29,634,000 | 63,282,000 | 59,571,000 |
Other underwriting expenses | 36,229,677 | 33,567,266 | 70,011,727 | 66,164,895 |
Policyholder dividends | 1,629,499 | 1,683,658 | 2,923,520 | 3,525,658 |
Interest | 217,290 | 428,092 | 529,616 | 652,422 |
Other expenses, net | 313,000 | 249,688 | 745,069 | 810,238 |
Total expenses | 185,449,118 | 170,911,723 | 370,668,331 | 353,319,758 |
Income before income tax expense | 19,696,825 | 27,988,049 | 32,447,510 | 30,491,220 |
Income tax expense | 3,532,789 | 5,309,271 | 5,753,626 | 4,081,321 |
Net income | $ 16,164,036 | $ 22,678,778 | $ 26,693,884 | $ 26,409,899 |
Class A Common Stock [Member] | ||||
Earnings per common share: | ||||
common stock - basic | $ 0.53 | $ 0.80 | $ 0.89 | $ 0.93 |
common stock - diluted | 0.53 | 0.79 | 0.88 | 0.92 |
Class B Common Stock [Member] | ||||
Earnings per common share: | ||||
common stock - basic | 0.48 | 0.72 | 0.80 | 0.84 |
common stock - diluted | 0.48 | 0.72 | 0.80 | 0.84 |
common stock - basic and diluted | $ 0.48 | $ 0.72 | $ 0.80 | $ 0.84 |
Consolidated Statements of In_2
Consolidated Statements of Income (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Net investment (losses) gains | $ 4,241,031 | $ 6,485,896 | $ 6,710,085 | $ (4,208,947) |
Income tax expense (benefit) | 3,532,789 | 5,309,271 | 5,753,626 | 4,081,321 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Net investment (losses) gains | 479,211 | 14,493 | 450,025 | 436,328 |
Income tax expense (benefit) | $ 100,634 | $ 3,044 | $ 94,505 | $ 91,629 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 16,164,036 | $ 22,678,778 | $ 26,693,884 | $ 26,409,899 |
Unrealized gain on securities: | ||||
Unrealized holding gain during the period, net of income tax expense | 1,928,551 | 6,674,664 | (2,301,621) | 10,207,754 |
Reclassification adjustment for gains included in net income, net of income tax expense | (378,577) | (11,449) | (355,520) | (344,699) |
Other comprehensive income | 1,549,974 | 6,663,215 | (2,657,141) | 9,863,055 |
Comprehensive income | $ 17,714,010 | $ 29,341,993 | $ 24,036,743 | $ 36,272,954 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized holding (loss) gain during the period, net of income tax (benefit) expense | $ 511,306 | $ 1,774,279 | $ 614,319 | $ 2,713,454 |
Income tax expense (benefit) on reclassification adjustment for losses (gains) | $ 100,634 | $ 3,044 | $ 94,505 | $ 91,629 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Total | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Income [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Class A Common Stock [Member] | Class B Common Stock [Member] |
Beginning balance at Dec. 31, 2019 | $ 451,015,519 | $ 268,151,601 | $ 504,170 | $ 223,267,573 | $ (41,226,357) | $ 262,040 | $ 56,492 |
Beginning balance, shares at Dec. 31, 2019 | 26,203,935 | 5,649,240 | |||||
Issuance of common stock (stock compensation plans) | 376,828 | 376,539 | $ 289 | ||||
Issuance of common stock (stock compensation plans), shares | 28,924 | ||||||
Share-based compensation | 1,242,986 | 1,242,315 | $ 671 | ||||
Share-based compensation, Shares | 67,087 | ||||||
Net income | 3,731,121 | 3,731,121 | |||||
Cash dividends declared | (5,363) | (5,363) | |||||
Grant of stock options | 118,525 | (118,525) | |||||
Other comprehensive (loss) income | 3,199,840 | 3,199,840 | |||||
Ending balance at Mar. 31, 2020 | 459,560,931 | 269,888,980 | 3,704,010 | 226,874,806 | (41,226,357) | $ 263,000 | $ 56,492 |
Ending balance, shares at Mar. 31, 2020 | 26,299,946 | 5,649,240 | |||||
Beginning balance at Dec. 31, 2019 | 451,015,519 | 268,151,601 | 504,170 | 223,267,573 | (41,226,357) | $ 262,040 | $ 56,492 |
Beginning balance, shares at Dec. 31, 2019 | 26,203,935 | 5,649,240 | |||||
Net income | 26,409,899 | ||||||
Other comprehensive (loss) income | 9,863,055 | ||||||
Ending balance at Jun. 30, 2020 | 487,859,334 | 273,175,488 | 10,367,225 | 245,221,348 | (41,226,357) | $ 265,138 | $ 56,492 |
Ending balance, shares at Jun. 30, 2020 | 26,513,779 | 5,649,240 | |||||
Beginning balance at Mar. 31, 2020 | 459,560,931 | 269,888,980 | 3,704,010 | 226,874,806 | (41,226,357) | $ 263,000 | $ 56,492 |
Beginning balance, shares at Mar. 31, 2020 | 26,299,946 | 5,649,240 | |||||
Issuance of common stock (stock compensation plans) | 720,548 | 720,018 | $ 530 | ||||
Issuance of common stock (stock compensation plans), shares | 52,964 | ||||||
Share-based compensation | 2,491,744 | 2,490,136 | $ 1,608 | ||||
Share-based compensation, Shares | 160,869 | ||||||
Net income | 22,678,778 | 22,678,778 | |||||
Cash dividends declared | (4,255,882) | (4,255,882) | |||||
Grant of stock options | 76,354 | (76,354) | |||||
Other comprehensive (loss) income | 6,663,215 | 6,663,215 | |||||
Ending balance at Jun. 30, 2020 | 487,859,334 | 273,175,488 | 10,367,225 | 245,221,348 | (41,226,357) | $ 265,138 | $ 56,492 |
Ending balance, shares at Jun. 30, 2020 | 26,513,779 | 5,649,240 | |||||
Beginning balance at Dec. 31, 2020 | 517,774,120 | 289,149,567 | 11,130,612 | 258,387,288 | (41,226,357) | $ 276,518 | $ 56,492 |
Beginning balance, shares at Dec. 31, 2020 | 27,651,774 | 5,649,240 | |||||
Issuance of common stock (stock compensation plans) | 419,788 | 419,454 | $ 334 | ||||
Issuance of common stock (stock compensation plans), shares | 33,336 | ||||||
Share-based compensation | 4,722,849 | 4,719,388 | $ 3,461 | ||||
Share-based compensation, Shares | 346,124 | ||||||
Net income | 10,529,848 | 10,529,848 | |||||
Cash dividends declared | (5,000) | (5,000) | |||||
Grant of stock options | 109,184 | (109,184) | |||||
Other comprehensive (loss) income | (4,207,115) | (4,207,115) | |||||
Ending balance at Mar. 31, 2021 | 529,234,490 | 294,397,593 | 6,923,497 | 268,802,952 | (41,226,357) | $ 280,313 | $ 56,492 |
Ending balance, shares at Mar. 31, 2021 | 28,031,234 | 5,649,240 | |||||
Beginning balance at Dec. 31, 2020 | 517,774,120 | 289,149,567 | 11,130,612 | 258,387,288 | (41,226,357) | $ 276,518 | $ 56,492 |
Beginning balance, shares at Dec. 31, 2020 | 27,651,774 | 5,649,240 | |||||
Net income | 26,693,884 | ||||||
Other comprehensive (loss) income | (2,657,141) | ||||||
Ending balance at Jun. 30, 2021 | 550,156,793 | 302,510,624 | 8,473,471 | 280,056,364 | (41,226,357) | $ 286,199 | $ 56,492 |
Ending balance, shares at Jun. 30, 2021 | 28,619,866 | 5,649,240 | |||||
Beginning balance at Mar. 31, 2021 | 529,234,490 | 294,397,593 | 6,923,497 | 268,802,952 | (41,226,357) | $ 280,313 | $ 56,492 |
Beginning balance, shares at Mar. 31, 2021 | 28,031,234 | 5,649,240 | |||||
Issuance of common stock (stock compensation plans) | 730,501 | 730,005 | $ 496 | ||||
Issuance of common stock (stock compensation plans), shares | 49,613 | ||||||
Share-based compensation | 7,318,421 | 7,313,031 | $ 5,390 | ||||
Share-based compensation, Shares | 539,019 | ||||||
Net income | 16,164,036 | 16,164,036 | |||||
Cash dividends declared | (4,840,629) | (4,840,629) | |||||
Grant of stock options | 69,995 | (69,995) | |||||
Other comprehensive (loss) income | 1,549,974 | 1,549,974 | |||||
Ending balance at Jun. 30, 2021 | $ 550,156,793 | $ 302,510,624 | $ 8,473,471 | $ 280,056,364 | $ (41,226,357) | $ 286,199 | $ 56,492 |
Ending balance, shares at Jun. 30, 2021 | 28,619,866 | 5,649,240 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash Flows from Operating Activities: | ||
Net income | $ 26,693,884 | $ 26,409,899 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, amortization and other non-cash items | 3,083,025 | 3,502,046 |
Net investment (gains) losses | (6,710,085) | 4,208,947 |
Changes in assets and liabilities: | ||
Losses and loss expenses | 36,650,578 | 32,149,773 |
Unearned premiums | 62,760,019 | 52,796,454 |
Premiums receivable | (19,787,451) | (21,717,231) |
Deferred acquisition costs | (10,530,666) | (2,865,674) |
Deferred income taxes | 1,266,870 | (837,202) |
Reinsurance receivable | (13,289,251) | (12,319,334) |
Prepaid reinsurance premiums | (17,033,224) | (32,483,228) |
Accrued investment income | (238,871) | (597,823) |
Due to affiliate | 11,902,889 | (2,053,312) |
Reinsurance balances payable | 797,424 | 144,398 |
Current income taxes | (928,841) | 4,893,520 |
Accrued expenses | (17,649,554) | (5,005,473) |
Other, net | 2,189,225 | 1,809,764 |
Net adjustments | 32,482,087 | 21,625,625 |
Net cash provided by operating activities | 59,175,971 | 48,035,524 |
Cash Flows from Investing Activities: | ||
Purchases of fixed maturities, held to maturity | (80,315,578) | (55,313,641) |
Purchases of fixed maturities, available for sale | (73,023,551) | (81,210,780) |
Purchases of equity securities, available for sale | (25,332,194) | (5,071,801) |
Maturity of fixed maturities: | ||
Held to maturity | 23,650,172 | 18,812,367 |
Available for sale | 111,197,663 | 70,379,590 |
Sales of fixed maturities, available for sale | 15,251,996 | |
Sales of equity securities, available for sale | 17,391,396 | 3,202,672 |
Net sales of property and equipment | 935,029 | 32,107 |
Net purchases of short-term investments | (1,867,217) | (37,311,903) |
Net cash used in investing activities | (27,364,280) | (71,229,393) |
Cash Flows from Financing Activities: | ||
Cash dividends paid | (9,281,930) | (8,336,479) |
Issuance of common stock | 12,380,741 | 3,988,784 |
Borrowing under lines of credit | 50,000,000 | |
Payments on lines of credit | (50,000,000) | |
Net cash (used in) provided by financing activities | (46,901,189) | 45,652,305 |
Net (decrease) increase in cash | (15,089,498) | 22,458,436 |
Cash at beginning of period | 103,094,236 | 49,318,930 |
Cash at end of period | 88,004,738 | 71,777,366 |
Cash paid during period - Interest | 659,222 | $ 664,342 |
Net cash paid during period - Taxes | $ 5,400,000 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1 - Organization Donegal Mutual Insurance Company (“Donegal Mutual”) organized us as an insurance holding company on August 26, 1986. Our insurance subsidiaries, Atlantic States Insurance Company (“Atlantic States”), Southern Insurance Company of Virginia (“Southern”), the Peninsula Insurance Group (“Peninsula”), which consists of Peninsula Indemnity Company and The Peninsula Insurance Company, and Michigan Insurance Company (“MICO”), and our affiliates write personal and commercial lines of property and casualty coverages exclusively through independent insurance agents in certain Mid-Atlantic, We have three segments: our investment function, our commercial lines of insurance and our personal lines of insurance. The commercial lines products of our insurance subsidiaries consist primarily of commercial automobile, commercial multi-peril and workers’ compensation policies. The personal lines products of our insurance subsidiaries consist primarily of homeowners and private passenger automobile policies. At June 30, 2021, Donegal Mutual held approximately 41% of our outstanding Class A common stock and approximately 84% of our outstanding Class B common stock. This ownership provides Donegal Mutual with approximately 70% of the total voting power of our common stock. Our insurance subsidiaries and Donegal Mutual have interrelated operations due to a pooling agreement and other intercompany agreements and transactions. While each company maintains its separate corporate existence, our insurance subsidiaries and Donegal Mutual conduct business together as the Donegal Insurance Group. As such, Donegal Mutual and our insurance subsidiaries share the same business philosophy, the same management, the same employees and the same facilities and offer the same types of insurance products. Atlantic States, our largest subsidiary, participates in a proportional reinsurance agreement, or pooling agreement, with Donegal Mutual. Under the pooling agreement, Donegal Mutual and Atlantic States contribute substantially all of their respective premiums, losses and loss expenses to the underwriting pool, and the underwriting pool, acting through Donegal Mutual, then allocates 80% of the pooled business to Atlantic States. Thus, Donegal Mutual and Atlantic States share the underwriting results of the pooled business in proportion to their respective participation in the underwriting pool. In addition, Donegal Mutual has a 100% quota-share reinsurance agreement with Southern Mutual Insurance Company, or Southern Mutual. Donegal Mutual places its assumed business from Southern Mutual into the underwriting pool. Donegal Mutual completed the merger of Mountain States Mutual Casualty Company, or Mountain States, with and into Donegal Mutual effective May 25, 2017. Donegal Mutual was the surviving company in the merger, and Mountain States’ insurance subsidiaries, Mountain States Indemnity Company and Mountain States Commercial Insurance Company (collectively, the “Mountain States insurance subsidiaries”), became insurance subsidiaries of Donegal Mutual upon completion of the merger. Upon completion of the merger, Donegal Mutual assumed all of the policy obligations of Mountain States and began to market its products together with the Mountain States insurance subsidiaries as the Mountain States Insurance Group in four Southwestern states. Donegal Mutual also entered into a 100% quota-share reinsurance agreement with the Mountain States insurance subsidiaries on the merger date. Beginning with policies effective in 2021, Donegal Mutual began to place the business of the Mountain States Insurance Group into the underwriting pool. As a result, our consolidated financial results through December 31, 2020 excluded the results of the Mountain States Insurance Group operations in those Southwestern states. The same executive management and underwriting personnel administer products, classes of business underwritten, pricing practices and underwriting standards of Donegal Mutual and our insurance subsidiaries. In addition, as the Donegal Insurance Group, Donegal Mutual and our insurance subsidiaries share a combined business plan to achieve market penetration and underwriting profitability objectives. The products our insurance subsidiaries and Donegal Mutual market are generally complementary, thereby allowing the Donegal Insurance Group to offer a broader range of products to a given market and to expand the Donegal Insurance Group’s ability to service an entire personal lines or commercial lines account. Distinctions within the products of Donegal Mutual and our insurance subsidiaries generally relate to specific risk profiles targeted within similar classes of business, such as preferred tier versus standard tier products, but we do not allocate all of the standard risk gradients to one company. Therefore, the underwriting profitability of the business the individual companies write directly will vary. However, the underwriting pool homogenizes the risk characteristics of all business that Donegal Mutual and Atlantic States write directly. The business Atlantic States derives from the underwriting pool represents a significant percentage of our total consolidated revenues. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 2 - Basis of Presentation Our financial information for the interim periods included in this Form 10-Q 10-Q We recommend you read the interim financial statements we include in this Form 10-Q 10-K |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 3 - Earnings Per Share We have two classes of common stock, which we refer to as our Class A common stock and our Class B common stock. Our certificate of incorporation provides that whenever our board of directors declares a dividend on our Class B common stock, our board of directors shall simultaneously declare a dividend on our Class A common stock that is payable to the holders of our Class A common stock at the same time and as of the same record date at a rate that is at least 10% greater than the rate at which our board of directors declared a dividend on our Class B common stock. Accordingly, we use the two-class two-class Three Months Ended June 30, 2021 2020 Class A Class B Class A Class B (in thousands, except per share data) Basic earnings per share: Numerator: Allocation of net income $ 13,482 $ 2,682 $ 18,665 $ 4,014 Denominator: Weighted-average shares outstanding 25,342 5,577 23,451 5,577 Basic earnings per share $ 0.53 $ 0.48 $ 0.80 $ 0.72 Diluted earnings per share: Numerator: Allocation of net income $ 13,482 $ 2,682 $ 18,665 $ 4,014 Denominator: Number of shares used in basic computation 25,342 5,577 23,451 5,577 Weighted-average shares effect of dilutive securities: Director and employee stock options 252 — 199 — Number of shares used in diluted computation 25,594 5,577 23,650 5,577 Diluted earnings per share $ 0.53 $ 0.48 $ 0.79 $ 0.72 Six Months Ended June 30, 2021 2020 Class A Class B Class A Class B (in thousands, except per share data) Basic earnings per share: Numerator: Allocation of net income $ 22,223 $ 4,471 $ 21,721 $ 4,689 Denominator: Weighted-average shares outstanding 25,057 5,577 23,356 5,577 Basic earnings per share $ 0.89 $ 0.80 $ 0.93 $ 0.84 Diluted earnings per share: Numerator: Allocation of net income $ 22,223 $ 4,471 $ 21,721 $ 4,689 Denominator: Number of shares used in basic computation 25,057 5,577 23,356 5,577 Weighted-average shares effect of dilutive securities: Director and employee stock options 190 — 193 — Number of shares used in diluted computation 25,247 5,577 23,549 5,577 Diluted earnings per share $ 0.88 $ 0.80 $ 0.92 $ 0.84 We did not include outstanding options to purchase the following number of shares of Class A common stock in our computation of diluted earnings per share because the exercise price of the options exceeded the average market price of our Class A common stock during the applicable periods. Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Number of options to purchase Class A shares excluded 4,952,276 6,183,992 4,952,276 6,183,992 |
Reinsurance
Reinsurance | 6 Months Ended |
Jun. 30, 2021 | |
Insurance [Abstract] | |
Reinsurance | 4 - Reinsurance Atlantic States and Donegal Mutual have participated in a pooling agreement since 1986 under which they pool their direct premiums written, and Atlantic States and Donegal Mutual then share the underwriting results of the pool in accordance with the terms of the pooling agreement. Atlantic States has an 80% share of the results of the pool, and Donegal Mutual has a 20% share of the results of the pool. Donegal Mutual began placing the business of the Mountain States Insurance Group into the pool beginning with policies effective in 2021. Our insurance subsidiaries and Donegal Mutual have a combined third-party reinsurance program. The coverage and parameters of the program are common to all of our insurance subsidiaries and Donegal Mutual. Our insurance subsidiaries and Donegal Mutual use several different reinsurers. They require their reinsurers to maintain an A.M. Best rating of A- A- • excess of loss reinsurance, under which the losses of Donegal Mutual and our insurance subsidiaries are automatically reinsured, through a series of contracts, over a set retention of $2.0 million; and • catastrophe reinsurance, under which Donegal Mutual and our insurance subsidiaries recover, through a series of reinsurance agreements, 100% of an accumulation of many losses resulting from a single event, including natural disasters, over a set retention of $15.0 million up to aggregate losses of $185.0 million per occurrence. In addition to the pooling agreement and third-party reinsurance, our insurance subsidiaries have a catastrophe reinsurance agreement with Donegal Mutual, under which each of our insurance subsidiaries recovers 100% of an accumulation of multiple losses resulting from a single event, including natural disasters, over a set retention of $2.0 million up to aggregate losses of $13.0 million per occurrence. The agreement also provides additional coverage for an accumulation of losses from a single event including a combination of our insurance subsidiaries over a combined retention of $5.0 million. Our insurance subsidiaries and Donegal Mutual also purchase facultative reinsurance to cover certain exposures, including property exposures that exceeded the limits provided by their respective treaty reinsurance. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | 5 - Investments The amortized cost and estimated fair values of our fixed maturities at June 30, 2021 were as follows: Amortized Cost Gross Unrealized Gross Unrealized Estimated Fair (in thousands) Held to Maturity U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 89,716 $ 2,839 $ 649 $ 91,906 Obligations of states and political subdivisions 346,517 20,073 788 365,802 Corporate securities 188,162 15,061 267 202,956 Mortgage-backed securities 19,453 1,005 — 20,458 Totals $ 643,848 $ 38,978 $ 1,704 $ 681,122 Amortized Cost Gross Unrealized Gross Unrealized Estimated Fair (in thousands) Available for Sale U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 22,508 $ 257 $ 439 $ 22,326 Obligations of states and political subdivisions 59,378 2,366 31 61,713 Corporate securities 201,634 9,644 202 211,076 Mortgage-backed securities 222,814 5,068 417 227,465 Totals $ 506,334 $ 17,335 $ 1,089 $ 522,580 At June 30, 2021, our holdings of obligations of states and political subdivisions included general obligation bonds with an aggregate fair value of $267.8 million and an amortized cost of $254.2 million. Our holdings at June 30, 2021 also included special revenue bonds with an aggregate fair value of $159.7 million and an amortized cost of $151.7 million. With respect to both categories of those bonds at June 30, 2021, we held no securities of any issuer that comprised more than 10% of our holdings of either bond category. Education bonds and water and sewer utility bonds represented 46% and 35%, respectively, of our total investments in special revenue bonds based on the carrying values of these investments at June 30, 2021. Many of the issuers of the special revenue bonds we held at June 30, 2021 have the authority to impose ad valorem taxes. In that respect, many of the special revenue bonds we held at June 30, 2021 are similar to general obligation bonds. The amortized cost and estimated fair values of our fixed maturities at December 31, 2020 were as follows: Amortized Cost Gross Unrealized Gross Unrealized Estimated Fair (in thousands) Held to Maturity U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 77,435 $ 3,984 $ 223 $ 81,196 Obligations of states and political subdivisions 312,319 23,212 143 335,388 Corporate securities 173,270 18,172 206 191,236 Mortgage-backed securities 23,585 1,236 — 24,821 Totals $ 586,609 $ 46,604 $ 572 $ 632,641 Amortized Cost Gross Unrealized Gross Unrealized Estimated Fair (in thousands) Available for Sale U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 47,512 $ 424 $ 121 $ 47,815 Obligations of states and political subdivisions 66,287 2,690 12 68,965 Corporate securities 202,396 10,496 184 212,708 Mortgage-backed securities 218,763 6,902 17 225,648 Totals $ 534,958 $ 20,512 $ 334 $ 555,136 At December 31, 2020, our holdings of obligations of states and political subdivisions included general obligation bonds with an aggregate fair value of $263.6 million and an amortized cost of $247.5 million. Our holdings also included special revenue bonds with an aggregate fair value of $140.8 million and an amortized cost of $131.1 million. With respect to both categories of bonds, we held no securities of any issuer that comprised more than 10% of that category at December 31, 2020. Education bonds and water and sewer utility bonds represented 44% and 39%, respectively, of our total investments in special revenue bonds based on their carrying values at December 31, 2020. Many of the issuers of the special revenue bonds we held at December 31, 2020 have the authority to impose ad valorem taxes. In that respect, many of the special revenue bonds we held are similar to general obligation bonds. We made reclassifications from available for sale to held to maturity of certain fixed maturities at fair value on November 30, 2013. We segregated within accumulated other comprehensive income the net unrealized losses of $15.1 million arising prior to the November 30, 2013 reclassifications. We are amortizing this balance over the remaining life of the related securities as an adjustment to yield in a manner consistent with the accretion of discount on the same fixed maturities. We recorded amortization of $556,553 and $833,690 in other comprehensive (loss) income during the six months ended June 30, 2021 and 2020, respectively. At June 30, 2021 and December 31, 2020, net unrealized losses of $5.5 million and $6.1 million, respectively, remained within accumulated other comprehensive income. We show below the amortized cost and estimated fair value of our fixed maturities at June 30, 2021 by contractual maturity. Expected maturities may differ from contractual maturities because issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Cost Estimated Fair (in thousands) Held to maturity Due in one year or less $ 38,641 $ 39,762 Due after one year through five years 83,282 88,929 Due after five years through ten years 224,135 237,348 Due after ten years 278,337 294,625 Mortgage-backed securities 19,453 20,458 Total held to maturity $ 643,848 $ 681,122 Available for sale Due in one year or less $ 26,146 $ 26,621 Due after one year through five years 131,837 138,624 Due after five years through ten years 96,413 99,711 Due after ten years 29,124 30,159 Mortgage-backed securities 222,814 227,465 Total available for sale $ 506,334 $ 522,580 The cost and estimated fair values of our equity securities at June 30, 2021 were as follows: Cost Gross Gains Gross Losses Estimated Fair (in thousands) Equity securities $ 50,864 $ 22,007 $ 114 $ 72,757 The cost and estimated fair values of our equity securities at December 31, 2020 were as follows: Cost Gross Gains Gross Losses Estimated Fair (in thousands) Equity securities $ 42,410 $ 17,103 $ 957 $ 58,556 Gross investment gains and losses before applicable income taxes for the three months and six months ended June 30, 2021 and 2020 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands) (in thousands) Gross investment gains: Fixed maturities $ 479 $ 229 $ 524 $ 652 Equity securities 3,762 6,474 6,728 3,355 4,241 6,703 7,252 4,007 Gross investment losses: Fixed maturities — 217 74 218 Equity securities — — 468 7,998 — 217 542 8,216 Net investment gains (losses) $ 4,241 $ 6,486 $ 6,710 $ (4,209 ) We recognized $6.1 million of gains and $114,339 of losses on equity securities we held at June 30, 2021 in net investment gains for the six months ended June 30, 2021. We recognized $3.4 million of gains and $4.9 million of losses on equity securities we held at June 30, 2020 in net investment losses for the six months ended June 30, 2020. We held fixed maturities with unrealized losses representing declines that we considered temporary at June 30, 2021 as follows: Less Than 12 Months More Than 12 Months Fair Value Unrealized Losses Fair Value Unrealized Losses (in thousands) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 38,202 $ 1,088 $ — $ — Obligations of states and political subdivisions 45,446 819 — — Corporate securities 38,846 344 3,375 125 Mortgage-backed securities 55,930 415 487 2 Totals $ 178,424 $ 2,666 $ 3,862 $ 127 We held fixed maturities with unrealized losses representing declines that we considered temporary at December 31, 2020 as follows: Less Than 12 Months More Than 12 Months Fair Value Unrealized Losses Fair Value Unrealized Losses (in thousands) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 29,144 $ 345 $ — $ — Obligations of states and political subdivisions 9,362 154 — — Corporate securities 26,143 115 8,230 276 Mortgage-backed securities 3,091 15 236 1 Totals $ 67,740 $ 629 $ 8,466 $ 277 We make estimates concerning the valuation of our investments and the recognition of other-than-temporary declines in the value of our investments. For equity securities, we measure investments at fair value, and we recognize changes in fair value in our results of operations. With respect to a debt security that is in an unrealized loss position, we first assess if we intend to sell the debt security. If we determine we intend to sell the debt security, we recognize the impairment loss in our results of operations. If we do not intend to sell the debt security, we determine whether it is more likely than not that we will be required to sell the debt security prior to recovery. If we determine it is more likely than not that we will be required to sell the debt security prior to recovery, we recognize the impairment loss in our results of operations. If we determine it is more likely than not that we will not be required to sell the debt security prior to recovery, we then evaluate whether a credit loss has occurred with respect to that security. We determine whether a credit loss has occurred by comparing the amortized cost of the debt security to the present value of the cash flows we expect to collect. If we expect a cash flow shortfall, we consider that a credit loss has occurred. If we determine that a credit loss has occurred, we consider the impairment to be other than temporary. We then recognize the amount of the impairment loss related to the credit loss in our results of operations, and we recognize the remaining portion of the impairment loss in our other comprehensive income, net of applicable taxes. In addition, we may write down securities in an unrealized loss position based on a number of other factors, including when the fair value of an investment is significantly below its cost, when the financial condition of the issuer of a security has deteriorated, the occurrence of industry, issuer or geographic events that have negatively impacted the value of a security and rating agency downgrades. We held 89 We amortize premiums and discounts on debt securities over the life of the security as an adjustment to yield using the effective interest method. We compute realized investment gains and losses using the specific identification method. We amortize premiums and discounts on mortgage-backed debt securities using anticipated prepayments. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | 6 - Segment Information We evaluate the performance of our personal lines and commercial lines segments based upon the underwriting results of our insurance subsidiaries using statutory accounting principles (“SAP”) that various state insurance departments prescribe or permit. Our management uses SAP to measure the performance of our insurance subsidiaries instead of United States generally accepted accounting principles (“GAAP”). SAP financial measures are considered non-GAAP Financial data by segment for the three and six months ended June 30, 2021 and 2020 is as follows: Three Months Ended June 30, 2021 2020 (in thousands) Revenues: Premiums earned: Commercial lines $ 115,300 $ 101,870 Personal lines 77,189 82,504 GAAP premiums earned 192,489 184,374 Net investment income 7,652 7,172 Investment gains 4,241 6,486 Other 764 868 Total revenues $ 205,146 $ 198,900 Income before income tax expense: Underwriting income: Commercial lines $ 1,767 $ 4,472 Personal lines 547 8,290 SAP underwriting income 2,314 12,762 GAAP adjustments 5,256 1,378 GAAP underwriting income 7,570 14,140 Net investment income 7,652 7,172 Investment gains 4,241 6,486 Other 234 190 Income before income tax expense $ 19,697 $ 27,988 Six Months Ended June 30, 2021 2020 (in thousands) Revenues: Premiums earned: Commercial lines $ 224,525 $ 203,645 Personal lines 155,215 167,982 GAAP premiums earned 379,740 371,627 Net investment income 15,163 14,548 Investment gains (losses) 6,710 (4,209 ) Other 1,503 1,845 Total revenues $ 403,116 $ 383,811 Income before income tax expense: Underwriting (loss) income: Commercial lines $ (6,475 ) $ 3,906 Personal lines 5,584 13,101 SAP underwriting (loss) income (891 ) 17,007 GAAP adjustments 11,238 2,762 GAAP underwriting income 10,347 19,769 Net investment income 15,163 14,548 Investment gains (losses) 6,710 (4,209 ) Other 228 383 Income before income tax expense $ 32,448 $ 30,491 |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Borrowings | 7 - Borrowings Lines of Credit In August 2020, we entered into a credit agreement with Manufacturers and Traders Trust Company (“M&T”) that related to a $20.0 million unsecured demand line of credit. The line of credit has no expiration date, no annual fees and no covenants. At June 30, 2021, we had no outstanding borrowings from M&T and had the ability to borrow up to $20.0 million at interest rates equal to the then-current LIBOR rate plus 2.00%. Atlantic States is a member of the FHLB of Pittsburgh. Through its membership, Atlantic States has the ability to issue debt to the FHLB of Pittsburgh in exchange for cash advances. Atlantic States has a fixed-rate cash advance of $35.0 million that was outstanding at June 30, 2021. The cash advance carries a fixed interest rate of 1.74% and is due in August 2024. In March 2020, Atlantic States issued $50.0 million of debt to the FHLB of Pittsburgh in exchange for a cash advance in the same amount that carried a fixed interest rate of 0.83%. Atlantic States obtained this contingent liquidity funding in light of uncertainty surrounding the economic impact of the COVID-19 FHLB of Pittsburgh stock purchased and owned $ 1,575,600 Collateral pledged, at par (carrying value $45,226,104) 44,343,661 Borrowing capacity currently available 8,847,792 Subordinated Debentures Donegal Mutual holds a $5.0 million surplus note that MICO issued to increase MICO’s statutory surplus. The surplus note carries an interest rate of 5.00%, and any repayment of principal or payment of interest on the surplus note requires prior approval of the Michigan Department of Insurance and Financial Services. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2021 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | 8 - Share–Based Compensation We measure all share-based payments to employees, including grants of stock options, and use a fair-value-based method for the recording of related compensation expense in our results of operations. In determining the expense we record for stock options granted to directors and employees of our subsidiaries and affiliates, we estimate the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The significant assumptions we utilize in applying the Black-Scholes option pricing model are the risk-free interest rate, the expected term, the dividend yield and the expected volatility. We charged compensation expense related to our stock compensation plans against income before income taxes of $ and $ for the three months ended June 30, 2021 and 2020, respectively, with a corresponding income tax benefit of $ and $ , respectively. We charged compensation expense related to our stock compensation plans against income before income taxes of $ and $ for the six months ended June 30, 2021 and 2020, respectively, with a corresponding income tax benefit of $ and $ , respectively. At June 30, 2021, we had $ million of unrecognized compensation expense related to nonvested share-based compensation granted under our stock compensation plans that we expect to recognize over a weighted average period of approximately years. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 9 - Fair Value Measurements We account for financial assets using a framework that establishes a hierarchy that ranks the quality and reliability of the inputs, or assumptions, we use in the determination of fair value, and we classify financial assets and liabilities carried at fair value in one of the following three categories: Level 1 – quoted prices in active markets for identical assets and liabilities; Level 2 – directly or indirectly observable inputs other than Level 1 quoted prices; and Level 3 – unobservable inputs not corroborated by market data. For investments that have quoted market prices in active markets, we use the quoted market price as fair value and include these investments in Level 1 of the fair value hierarchy. We classify publicly-traded equity securities as Level 1. When quoted market prices in active markets are not available, we base fair values on quoted market prices of comparable instruments or price estimates we obtain from independent pricing services and include these investments in Level 2 of the fair value hierarchy. We classify our fixed maturity investments as Level 2. Our fixed maturity investments consist of U.S. Treasury securities and obligations of U.S. government corporations and agencies, obligations of states and political subdivisions, corporate securities and mortgage-backed securities. We present our investments in available-for-sale We present our cash and short-term investments at estimated fair value. We classify these items as Level 1. The carrying values we report in our balance sheet for premium receivables and reinsurance receivables and payables for premiums and paid losses and loss expenses approximate their fair values. The carrying amounts we report in our balance sheets for our subordinated debentures and borrowings under lines of credit approximate their fair values. We classify these items as Level 3. We evaluate our assets and liabilities to determine the appropriate level at which to classify them for each reporting period. The following table presents our fair value measurements for our investments in available-for-sale Fair Value Measurements Using Fair Value Quoted Prices in Significant Other Significant (in thousands) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 22,326 $ — $ 22,326 $ — Obligations of states and political subdivisions 61,713 — 61,713 — Corporate securities 211,076 — 211,076 — Mortgage-backed securities 227,465 — 227,465 — Equity securities 72,757 70,467 2,290 — Total investments in the fair value hierarchy $ 595,337 $ 70,467 $ 524,870 $ — The following table presents our fair value measurements for our investments in available-for-sale Fair Value Measurements Using Fair Value Quoted Prices in Significant Other Significant (in thousands) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 47,815 $ — $ 47,815 $ — Obligations of states and political subdivisions 68,965 — 68,965 — Corporate securities 212,708 — 212,708 — Mortgage-backed securities 225,648 — 225,648 — Equity securities 58,556 54,152 4,404 — Totals $ 613,692 $ 54,152 $ 559,540 $ — |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10 - Income Taxes At June 30, 2021 and December 31, 2020, respectively, we had no material unrecognized tax benefits or accrued interest and penalties. Tax years 2016 through 2020 remained open for examination at June 30, 2021. We provide a valuation allowance when we believe it is more likely than not that we will not realize some portion of our tax assets. We established a valuation allowance of $7.9 million for our net state operating loss carryforward. We have determined that we are not required to establish a valuation allowance for our other deferred tax assets of $27.6 million and $26.7 million at June 30, 2021 and December 31, 2020, respectively, because it is more likely than not that we will realize these deferred tax assets through reversals of existing temporary differences, future taxable income and the implementation of tax planning strategies. On March 27, 2020, the Coronavirus Aid, Relief and Security Act (the “CARES Act”) was signed into law. The CARES Act amended net operating loss provisions in effect prior to its enactment. The CARES Act allows for the carryback of losses arising in taxable years beginning after December 31, 2017 and before January 1, 2021 to each of the five taxable years preceding the taxable year of such loss. As a result, we filed amended tax returns to carry back net operating losses from taxable year 2018 to past tax years. We recorded a tax benefit of $1.6 million in the first quarter of 2020 in anticipation of a refund of taxes we paid in prior years as a result of the carryback. |
Liabilities for Losses and Loss
Liabilities for Losses and Loss Expenses | 6 Months Ended |
Jun. 30, 2021 | |
Text Block [Abstract] | |
Liabilities for Losses and Loss Expenses | 11 - Liabilities for Losses and Loss Expenses The establishment of appropriate liabilities for losses and loss expenses is an inherently uncertain process, and we can provide no assurance that our insurance subsidiaries’ ultimate liabilities for losses and loss expenses will not exceed their loss and loss expense reserves and have an adverse effect on our results of operations and financial condition. Furthermore, we cannot predict the timing, frequency and extent of adjustments to our insurance subsidiaries’ estimated future liabilities, because the historical conditions and events that serve as a basis for our insurance subsidiaries’ estimates of ultimate claim costs may change. As is the case for substantially all property and casualty insurance companies, our insurance subsidiaries have found it necessary in the past to increase their estimated future liabilities for losses and loss expenses in certain periods, and, in other periods, their estimated future liabilities for losses and loss expenses have exceeded their actual liabilities for losses and loss expenses. Changes in our insurance subsidiaries’ estimate of their liabilities for losses and loss expenses generally reflect actual payments and their evaluation of information received subsequent to the prior reporting period. We summarize activity in our insurance subsidiaries’ liabilities for losses and loss expenses as follows: Six Months Ended June 30, 2021 2020 (in thousands) Balance at January 1 $ 962,007 $ 869,674 Less reinsurance recoverable (404,818 ) (362,768 ) Net balance at January 1 557,189 506,906 Incurred related to: Current year 254,740 233,460 Prior years (21,564 ) (10,864 ) Total incurred 233,176 222,596 Paid related to: Current year 98,966 97,473 Prior years 111,300 106,716 Total paid 210,266 204,189 Net balance at end of period 580,099 525,313 Plus reinsurance recoverable 418,559 376,511 Balance at end of period $ 998,658 $ 901,824 Our insurance subsidiaries recognized a decrease in their liabilities for losses and loss expenses of prior years of $21.6 million with the exception of modest higher-than-expected severity in commercial automobile. The majority of the 2020 development related to decreases in the liabilities for losses and loss expenses of prior years for Atlantic States and MICO. Short-duration contracts are contracts for which our insurance subsidiaries receive premiums that they recognize as revenue over the period of the contract in proportion to the amount of insurance protection our insurance subsidiaries provide. Our insurance subsidiaries consider the policies they issue to be short-duration contracts. We consider the material lines of business of our insurance subsidiaries to be personal automobile, homeowners, commercial automobile, commercial multi-peril and workers’ compensation. Our insurance subsidiaries determine incurred but not reported (“IBNR”) reserves by subtracting the cumulative loss and loss expense amounts our insurance subsidiaries have paid and the case reserves our insurance subsidiaries have established at the balance sheet date from their actuaries’ estimate of the ultimate cost of losses and loss expenses. Accordingly, the IBNR reserves of our insurance subsidiaries include their actuaries’ projections of the cost of unreported claims as well as their actuaries’ projected development of case reserves on known claims and reopened claims. Our insurance subsidiaries’ methodology for estimating IBNR reserves has been in place for many years, and their actuaries made no significant changes to that methodology during the six months ended June 30, 2021. The actuaries for our insurance subsidiaries generally prepare an initial estimate for ultimate losses and loss expenses for the current accident year by multiplying earned premium by an expected loss ratio for each line of business our insurance subsidiaries write. Expected loss ratios represent the actuaries’ expectation of losses at the time our insurance subsidiaries price and write their policies and before the emergence of any actual claims experience. The actuaries determine an expected loss ratio by analyzing historical experience and adjusting for loss cost trends, loss frequency and severity trends, premium rate level changes, reported and paid loss emergence patterns and other known or observed factors. The actuaries use a variety of actuarial methods to estimate the ultimate cost of losses and loss expenses. These methods include paid loss development, incurred loss development and the Bornhuetter-Ferguson method. The actuaries base their selection of a point estimate on a judgmental weighting of the estimates each of these methods produce. The actuaries consider loss frequency and severity trends when they develop expected loss ratios and point estimates. Loss frequency is a measure of the number of claims per unit of insured exposure, and loss severity is a measure of the average size of claims. Factors that affect loss frequency include changes in weather patterns and economic activity. Factors that affect loss severity include changes in policy limits, reinsurance retentions, inflation rates and judicial interpretations. Our insurance subsidiaries create a claim file when they receive notice of an actual demand for payment, an event that may lead to a demand for payment or when they otherwise determine that a demand for payment could potentially lead to a future demand for payment on another coverage under the same policy or another policy they have issued. In recent years, our insurance subsidiaries have noted an increase in the period of time between the occurrence of a casualty loss event and the date at which they receive notice of a liability claim. Changes in the length of time between the loss occurrence date and the claim reporting date affect the actuaries’ ability to predict loss frequency accurately and the amount of IBNR reserves our insurance subsidiaries require. Our insurance subsidiaries generally create a claim file for a policy at the claimant level by type of coverage and generally recognize one count for each claim event. In certain lines of business where it is common for multiple parties to claim damages arising from a single claim event, our insurance subsidiaries recognize one count for each claimant involved in the event. Atlantic States recognizes one count for each claim event, or claimant involved in a multiple-party claim event, related to losses Atlantic States assumes through its participation in its pooling agreement with Donegal Mutual. Our insurance subsidiaries accumulate the claim counts and report them by line of business. |
Impact of New Accounting Standa
Impact of New Accounting Standards | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Impact of New Accounting Standards | 12 - Impact of New Accounting Standards In September 2016, the FASB issued guidance that amends previous guidance on the impairment of financial instruments by adding an impairment model that requires an entity to recognize expected credit losses as an allowance rather than impairments as credit losses are incurred. The intent of this guidance is to reduce complexity and result in a more timely recognition of expected credit losses. In November 2019, the FASB issued guidance that delays the effective date for “smaller reporting companies,” as defined in Item 10(f)(1) of Regulation S-K, to In December 2019, the FASB issued guidance that simplifies accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The guidance was effective January 1, 2021, using the retrospective method or modified retrospective method for certain changes and the prospective method for all other changes, and permits early adoption. Our adoption of this guidance on January 1, 2021 did not have a significant impact on our financial position, results of operations or cash flows. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Summary of Reconciliation of Numerators and Denominators Used in Basic and Diluted Per Share Computations | The table below presents for the periods indicated a reconciliation of the numerators and denominators we used to compute basic and diluted net income per share for our Class A common stock and our Class B common stock: Three Months Ended June 30, 2021 2020 Class A Class B Class A Class B (in thousands, except per share data) Basic earnings per share: Numerator: Allocation of net income $ 13,482 $ 2,682 $ 18,665 $ 4,014 Denominator: Weighted-average shares outstanding 25,342 5,577 23,451 5,577 Basic earnings per share $ 0.53 $ 0.48 $ 0.80 $ 0.72 Diluted earnings per share: Numerator: Allocation of net income $ 13,482 $ 2,682 $ 18,665 $ 4,014 Denominator: Number of shares used in basic computation 25,342 5,577 23,451 5,577 Weighted-average shares effect of dilutive securities: Director and employee stock options 252 — 199 — Number of shares used in diluted computation 25,594 5,577 23,650 5,577 Diluted earnings per share $ 0.53 $ 0.48 $ 0.79 $ 0.72 Six Months Ended June 30, 2021 2020 Class A Class B Class A Class B (in thousands, except per share data) Basic earnings per share: Numerator: Allocation of net income $ 22,223 $ 4,471 $ 21,721 $ 4,689 Denominator: Weighted-average shares outstanding 25,057 5,577 23,356 5,577 Basic earnings per share $ 0.89 $ 0.80 $ 0.93 $ 0.84 Diluted earnings per share: Numerator: Allocation of net income $ 22,223 $ 4,471 $ 21,721 $ 4,689 Denominator: Number of shares used in basic computation 25,057 5,577 23,356 5,577 Weighted-average shares effect of dilutive securities: Director and employee stock options 190 — 193 — Number of shares used in diluted computation 25,247 5,577 23,549 5,577 Diluted earnings per share $ 0.88 $ 0.80 $ 0.92 $ 0.84 |
Summary of Antidilutive Securities Excluded From Computation Of Earnings Per Share | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Number of options to purchase Class A shares excluded 4,952,276 6,183,992 4,952,276 6,183,992 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Amortized Cost and Estimated Fair Values of Fixed Maturities | Amortized Cost Gross Unrealized Gross Unrealized Estimated Fair (in thousands) Held to Maturity U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 89,716 $ 2,839 $ 649 $ 91,906 Obligations of states and political subdivisions 346,517 20,073 788 365,802 Corporate securities 188,162 15,061 267 202,956 Mortgage-backed securities 19,453 1,005 — 20,458 Totals $ 643,848 $ 38,978 $ 1,704 $ 681,122 Amortized Cost Gross Unrealized Gross Unrealized Estimated Fair (in thousands) Available for Sale U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 22,508 $ 257 $ 439 $ 22,326 Obligations of states and political subdivisions 59,378 2,366 31 61,713 Corporate securities 201,634 9,644 202 211,076 Mortgage-backed securities 222,814 5,068 417 227,465 Totals $ 506,334 $ 17,335 $ 1,089 $ 522,580 Amortized Cost Gross Unrealized Gross Unrealized Estimated Fair (in thousands) Held to Maturity U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 77,435 $ 3,984 $ 223 $ 81,196 Obligations of states and political subdivisions 312,319 23,212 143 335,388 Corporate securities 173,270 18,172 206 191,236 Mortgage-backed securities 23,585 1,236 — 24,821 Totals $ 586,609 $ 46,604 $ 572 $ 632,641 Amortized Cost Gross Unrealized Gross Unrealized Estimated Fair (in thousands) Available for Sale U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 47,512 $ 424 $ 121 $ 47,815 Obligations of states and political subdivisions 66,287 2,690 12 68,965 Corporate securities 202,396 10,496 184 212,708 Mortgage-backed securities 218,763 6,902 17 225,648 Totals $ 534,958 $ 20,512 $ 334 $ 555,136 |
Summary of Amortized Cost and Estimated Fair Value of Fixed Maturities by Contractual Maturity | Amortized Cost Estimated Fair (in thousands) Held to maturity Due in one year or less $ 38,641 $ 39,762 Due after one year through five years 83,282 88,929 Due after five years through ten years 224,135 237,348 Due after ten years 278,337 294,625 Mortgage-backed securities 19,453 20,458 Total held to maturity $ 643,848 $ 681,122 Available for sale Due in one year or less $ 26,146 $ 26,621 Due after one year through five years 131,837 138,624 Due after five years through ten years 96,413 99,711 Due after ten years 29,124 30,159 Mortgage-backed securities 222,814 227,465 Total available for sale $ 506,334 $ 522,580 |
Summary of Cost and Estimated Fair Values of Equity Securities | The cost and estimated fair values of our equity securities at June 30, 2021 were as follows: Cost Gross Gains Gross Losses Estimated Fair (in thousands) Equity securities $ 50,864 $ 22,007 $ 114 $ 72,757 The cost and estimated fair values of our equity securities at December 31, 2020 were as follows: Cost Gross Gains Gross Losses Estimated Fair (in thousands) Equity securities $ 42,410 $ 17,103 $ 957 $ 58,556 |
Summary of Gross Investment Gains and Losses before Applicable Income Taxes | Gross investment gains and losses before applicable income taxes for the three months and six months ended June 30, 2021 and 2020 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands) (in thousands) Gross investment gains: Fixed maturities $ 479 $ 229 $ 524 $ 652 Equity securities 3,762 6,474 6,728 3,355 4,241 6,703 7,252 4,007 Gross investment losses: Fixed maturities — 217 74 218 Equity securities — — 468 7,998 — 217 542 8,216 Net investment gains (losses) $ 4,241 $ 6,486 $ 6,710 $ (4,209 ) |
Summary of Fixed Maturities with Unrealized Losses | We held fixed maturities with unrealized losses representing declines that we considered temporary at June 30, 2021 as follows: Less Than 12 Months More Than 12 Months Fair Value Unrealized Losses Fair Value Unrealized Losses (in thousands) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 38,202 $ 1,088 $ — $ — Obligations of states and political subdivisions 45,446 819 — — Corporate securities 38,846 344 3,375 125 Mortgage-backed securities 55,930 415 487 2 Totals $ 178,424 $ 2,666 $ 3,862 $ 127 We held fixed maturities with unrealized losses representing declines that we considered temporary at December 31, 2020 as follows: Less Than 12 Months More Than 12 Months Fair Value Unrealized Losses Fair Value Unrealized Losses (in thousands) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 29,144 $ 345 $ — $ — Obligations of states and political subdivisions 9,362 154 — — Corporate securities 26,143 115 8,230 276 Mortgage-backed securities 3,091 15 236 1 Totals $ 67,740 $ 629 $ 8,466 $ 277 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Summary of Financial Data by Segment | Financial data by segment for the three and six months ended June 30, 2021 and 2020 is as follows: Three Months Ended June 30, 2021 2020 (in thousands) Revenues: Premiums earned: Commercial lines $ 115,300 $ 101,870 Personal lines 77,189 82,504 GAAP premiums earned 192,489 184,374 Net investment income 7,652 7,172 Investment gains 4,241 6,486 Other 764 868 Total revenues $ 205,146 $ 198,900 Income before income tax expense: Underwriting income: Commercial lines $ 1,767 $ 4,472 Personal lines 547 8,290 SAP underwriting income 2,314 12,762 GAAP adjustments 5,256 1,378 GAAP underwriting income 7,570 14,140 Net investment income 7,652 7,172 Investment gains 4,241 6,486 Other 234 190 Income before income tax expense $ 19,697 $ 27,988 Six Months Ended June 30, 2021 2020 (in thousands) Revenues: Premiums earned: Commercial lines $ 224,525 $ 203,645 Personal lines 155,215 167,982 GAAP premiums earned 379,740 371,627 Net investment income 15,163 14,548 Investment gains (losses) 6,710 (4,209 ) Other 1,503 1,845 Total revenues $ 403,116 $ 383,811 Income before income tax expense: Underwriting (loss) income: Commercial lines $ (6,475 ) $ 3,906 Personal lines 5,584 13,101 SAP underwriting (loss) income (891 ) 17,007 GAAP adjustments 11,238 2,762 GAAP underwriting income 10,347 19,769 Net investment income 15,163 14,548 Investment gains (losses) 6,710 (4,209 ) Other 228 383 Income before income tax expense $ 32,448 $ 30,491 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
FHLB of Pittsburgh [Member] | |
Amount of FHLB of Indianapolis/Pittsburgh Stock Purchased, Collateral Pledged and Assets Related to MICO's/Atlantic States Agreement | FHLB of Pittsburgh stock purchased and owned $ 1,575,600 Collateral pledged, at par (carrying value $45,226,104) 44,343,661 Borrowing capacity currently available 8,847,792 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements for Investments in Available-for-Sale Fixed Maturity and Equity Securities | The following table presents our fair value measurements for our investments in available-for-sale Fair Value Measurements Using Fair Value Quoted Prices in Significant Other Significant (in thousands) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 22,326 $ — $ 22,326 $ — Obligations of states and political subdivisions 61,713 — 61,713 — Corporate securities 211,076 — 211,076 — Mortgage-backed securities 227,465 — 227,465 — Equity securities 72,757 70,467 2,290 — Total investments in the fair value hierarchy $ 595,337 $ 70,467 $ 524,870 $ — The following table presents our fair value measurements for our investments in available-for-sale Fair Value Measurements Using Fair Value Quoted Prices in Significant Other Significant (in thousands) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 47,815 $ — $ 47,815 $ — Obligations of states and political subdivisions 68,965 — 68,965 — Corporate securities 212,708 — 212,708 — Mortgage-backed securities 225,648 — 225,648 — Equity securities 58,556 54,152 4,404 — Totals $ 613,692 $ 54,152 $ 559,540 $ — |
Liabilities for Losses and Lo_2
Liabilities for Losses and Loss Expenses (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Text Block [Abstract] | |
Summary of Insurance Subsidiaries' Liabilities for Losses and Loss Expenses | We summarize activity in our insurance subsidiaries’ liabilities for losses and loss expenses as follows: Six Months Ended June 30, 2021 2020 (in thousands) Balance at January 1 $ 962,007 $ 869,674 Less reinsurance recoverable (404,818 ) (362,768 ) Net balance at January 1 557,189 506,906 Incurred related to: Current year 254,740 233,460 Prior years (21,564 ) (10,864 ) Total incurred 233,176 222,596 Paid related to: Current year 98,966 97,473 Prior years 111,300 106,716 Total paid 210,266 204,189 Net balance at end of period 580,099 525,313 Plus reinsurance recoverable 418,559 376,511 Balance at end of period $ 998,658 $ 901,824 |
Organization - Additional Infor
Organization - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2021Segment | |
Business Acquisition [Line Items] | |
Operations commenced date | Aug. 26, 1986 |
Number of operating segments | 3 |
Atlantic States [Member] | |
Business Acquisition [Line Items] | |
Voting power percentage of outstanding common stock | 70.00% |
Percentage of share in results of pooled business subsidiary | 80.00% |
Donegal Mutual [Member] | |
Business Acquisition [Line Items] | |
Premiums and losses related to certain products | 100.00% |
Class A Common Stock [Member] | |
Business Acquisition [Line Items] | |
Stock ownership percentage held by major shareholder | 41.00% |
Class B Common Stock [Member] | |
Business Acquisition [Line Items] | |
Stock ownership percentage held by major shareholder | 84.00% |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Minimum percentage of class A common stock declared dividend excess over class B dividend | 10.00% |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Reconciliation of Numerators and Denominators Used in Basic and Diluted Per Share Computations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Class A Common Stock [Member] | ||||
Numerator: | ||||
Allocation of net income (loss) | $ 13,482 | $ 18,665 | $ 22,223 | $ 21,721 |
Denominator: | ||||
Weighted-average shares outstanding | 25,342 | 23,451 | 25,057 | 23,356 |
Basic earnings (loss) per share | $ 0.53 | $ 0.80 | $ 0.89 | $ 0.93 |
Numerator: | ||||
Allocation of net income (loss) | $ 13,482 | $ 18,665 | $ 22,223 | $ 21,721 |
Denominator: | ||||
Number of shares used in basic computation | 25,342 | 23,451 | 25,057 | 23,356 |
Weighted-average shares effect of dilutive securities | ||||
Director and employee stock options | 252 | 199 | 190 | 193 |
Number of shares used in diluted computation | 25,594 | 23,650 | 25,247 | 23,549 |
Diluted earnings (loss) per share | $ 0.53 | $ 0.79 | $ 0.88 | $ 0.92 |
Class B Common Stock [Member] | ||||
Numerator: | ||||
Allocation of net income (loss) | $ 2,682 | $ 4,014 | $ 4,471 | $ 4,689 |
Denominator: | ||||
Weighted-average shares outstanding | 5,577 | 5,577 | 5,577 | 5,577 |
Basic earnings (loss) per share | $ 0.48 | $ 0.72 | $ 0.80 | $ 0.84 |
Numerator: | ||||
Allocation of net income (loss) | $ 2,682 | $ 4,014 | $ 4,471 | $ 4,689 |
Denominator: | ||||
Number of shares used in basic computation | 5,577 | 5,577 | 5,577 | 5,577 |
Weighted-average shares effect of dilutive securities | ||||
Number of shares used in diluted computation | 5,577 | 5,577 | 5,577 | 5,577 |
Diluted earnings (loss) per share | $ 0.48 | $ 0.72 | $ 0.80 | $ 0.84 |
Earnings Per Share - Summary _2
Earnings Per Share - Summary of Antidilutive Securities Excluded From Computation Of Earnings Per Share (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Equity Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of options to purchase Class A shares excluded | 4,952,276 | 6,183,992 | 4,952,276 | 6,183,992 |
Reinsurance - Additional Inform
Reinsurance - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Ceded Credit Risk [Line Items] | |
Loss reinsurance, set retention amount for property losses | $ 2,000,000 |
Third Party Reinsurance [Member] | |
Ceded Credit Risk [Line Items] | |
Percentage of accumulation of losses | 100.00% |
Catastrophe reinsurance, set retention amount | $ 15,000,000 |
Maximum amount of loss coverage under reinsurance agreement of property catastrophe | $ 185,000,000 |
Atlantic States [Member] | |
Ceded Credit Risk [Line Items] | |
Percentage of share in results of pooled business subsidiary | 80.00% |
Donegal Mutual [Member] | |
Ceded Credit Risk [Line Items] | |
Percentage of share in results of pooled business owned by third party | 20.00% |
Percentage of accumulation of losses | 100.00% |
Catastrophe reinsurance, set retention amount | $ 2,000,000 |
Maximum amount of loss coverage under reinsurance agreement of property catastrophe | 13,000,000 |
Additional coverage amount | $ 5,000,000 |
Investments - Summary of Amorti
Investments - Summary of Amortized Cost and Estimated Fair Values of Fixed Maturities (Detail) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Schedule of Equity Method Investments [Line Items] | ||
Total held to maturity, Amortized Cost | $ 643,847,647 | $ 586,609,439 |
Held to Maturity, Gross Unrealized Gains | 38,978,000 | 46,604,000 |
Held to Maturity, Gross Unrealized Losses | 1,704,000 | 572,000 |
Total held to maturity, Estimated Fair Value | 681,122,000 | 632,641,000 |
Available for Sale, Amortized Cost | 506,334,000 | 534,958,000 |
Available for Sale, Gross Unrealized Gains | 17,335,000 | 20,512,000 |
Available for Sale, Gross Unrealized Losses | 1,089,000 | 334,000 |
Available for Sale, Estimated Fair Value | 522,580,000 | 555,136,000 |
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Total held to maturity, Amortized Cost | 89,716,000 | 77,435,000 |
Held to Maturity, Gross Unrealized Gains | 2,839,000 | 3,984,000 |
Held to Maturity, Gross Unrealized Losses | 649,000 | 223,000 |
Total held to maturity, Estimated Fair Value | 91,906,000 | 81,196,000 |
Available for Sale, Amortized Cost | 22,508,000 | 47,512,000 |
Available for Sale, Gross Unrealized Gains | 257,000 | 424,000 |
Available for Sale, Gross Unrealized Losses | 439,000 | 121,000 |
Available for Sale, Estimated Fair Value | 22,326,000 | 47,815,000 |
Obligations of States and Political Subdivisions [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Total held to maturity, Amortized Cost | 346,517,000 | 312,319,000 |
Held to Maturity, Gross Unrealized Gains | 20,073,000 | 23,212,000 |
Held to Maturity, Gross Unrealized Losses | 788,000 | 143,000 |
Total held to maturity, Estimated Fair Value | 365,802,000 | 335,388,000 |
Available for Sale, Amortized Cost | 59,378,000 | 66,287,000 |
Available for Sale, Gross Unrealized Gains | 2,366,000 | 2,690,000 |
Available for Sale, Gross Unrealized Losses | 31,000 | 12,000 |
Available for Sale, Estimated Fair Value | 61,713,000 | 68,965,000 |
Corporate Securities [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Total held to maturity, Amortized Cost | 188,162,000 | 173,270,000 |
Held to Maturity, Gross Unrealized Gains | 15,061,000 | 18,172,000 |
Held to Maturity, Gross Unrealized Losses | 267,000 | 206,000 |
Total held to maturity, Estimated Fair Value | 202,956,000 | 191,236,000 |
Available for Sale, Amortized Cost | 201,634,000 | 202,396,000 |
Available for Sale, Gross Unrealized Gains | 9,644,000 | 10,496,000 |
Available for Sale, Gross Unrealized Losses | 202,000 | 184,000 |
Available for Sale, Estimated Fair Value | 211,076,000 | 212,708,000 |
Mortgage-Backed Securities [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Total held to maturity, Amortized Cost | 19,453,000 | 23,585,000 |
Held to Maturity, Gross Unrealized Gains | 1,005,000 | 1,236,000 |
Held to Maturity, Gross Unrealized Losses | 0 | 0 |
Total held to maturity, Estimated Fair Value | 20,458,000 | 24,821,000 |
Available for Sale, Amortized Cost | 222,814,000 | 218,763,000 |
Available for Sale, Gross Unrealized Gains | 5,068,000 | 6,902,000 |
Available for Sale, Gross Unrealized Losses | 417,000 | 17,000 |
Available for Sale, Estimated Fair Value | $ 227,465,000 | $ 225,648,000 |
Investments - Additional Inform
Investments - Additional Information (Detail) | Nov. 30, 2013USD ($) | Jun. 30, 2021USD ($)Securities | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) |
Schedule of Investments [Line Items] | ||||
Net unrealized losses arising prior to reclassification date | $ 15,100,000 | |||
Amortization of unrealized losses recorded in accumulated other comprehensive income (loss) | $ 556,553 | $ 833,690 | ||
Accumulated other comprehensive loss | 8,473,471 | $ 11,130,612 | ||
Gain on equity securities | 6,100,000 | 4,900,000 | ||
Loss on equity securities | 114,339 | $ 3,400,000 | ||
Obligations of States and Political Subdivisions [Member] | ||||
Schedule of Investments [Line Items] | ||||
Aggregate fair value of bond held | 267,800,000 | 263,600,000 | ||
Amortized cost of bond held | 254,200,000 | 247,500,000 | ||
Special Revenue Bonds [Member] | ||||
Schedule of Investments [Line Items] | ||||
Aggregate fair value of bond held | 159,700,000 | 140,800,000 | ||
Amortized cost of bond held | $ 151,700,000 | $ 131,100,000 | ||
Education Bonds [Member] | ||||
Schedule of Investments [Line Items] | ||||
Percentage of investments in special revenue bonds | 46.00% | 44.00% | ||
Water and Sewer Utility Bonds [Member] | ||||
Schedule of Investments [Line Items] | ||||
Percentage of investments in special revenue bonds | 35.00% | 39.00% | ||
Fixed Maturities [Member] | ||||
Schedule of Investments [Line Items] | ||||
Number of fixed maturity securities classified as available for sale | Securities | 89 | |||
Accumulated Net Unrealized Investment Losses [Member] | ||||
Schedule of Investments [Line Items] | ||||
Accumulated other comprehensive loss | $ 5,500,000 | $ 6,100,000 | ||
Minimum [Member] | ||||
Schedule of Investments [Line Items] | ||||
Percentage of which the company held security of any issuer | 10.00% | 10.00% |
Investments - Summary of Amor_2
Investments - Summary of Amortized Cost and Estimated Fair Value of Fixed Maturities by Contractual Maturity (Detail) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Held to maturity | ||
Due in one year or less, Amortized Cost | $ 38,641,000 | |
Due after one year through five years, Amortized Cost | 83,282,000 | |
Due after five years through ten years, Amortized Cost | 224,135,000 | |
Due after ten years, Amortized Cost | 278,337,000 | |
Mortgage-backed securities, Amortized Cost | 19,453,000 | |
Total held to maturity, Amortized Cost | 643,847,647 | $ 586,609,439 |
Available for sale | ||
Due in one year or less, Amortized Cost | 26,146,000 | |
Due after one year through five years, Amortized Cost | 131,837,000 | |
Due after five years through ten years, Amortized Cost | 96,413,000 | |
Due after ten years, Amortized Cost | 29,124,000 | |
Mortgage-backed securities, Amortized Cost | 222,814,000 | |
Total available for sale, Amortized Cost | 506,334,000 | |
Held to maturity | ||
Due in one year or less, Estimated Fair Value | 39,762,000 | |
Due after one year through five years, Estimated Fair Value | 88,929,000 | |
Due after five years through ten years, Estimated Fair Value | 237,348,000 | |
Due after ten years, Estimated Fair Value | 294,625,000 | |
Mortgage-backed securities, Estimated Fair Value | 20,458,000 | |
Total held to maturity, Estimated Fair Value | 681,122,000 | 632,641,000 |
Available for sale | ||
Due in one year or less, Estimated Fair Value | 26,621,000 | |
Due after one year through five years, Estimated Fair Value | 138,624,000 | |
Due after five years through ten years, Estimated Fair Value | 99,711,000 | |
Due after ten years, Estimated Fair Value | 30,159,000 | |
Mortgage-backed securities, Estimated Fair Value | 227,465,000 | |
Total available for sale, Estimated Fair Value | $ 522,580,264 | $ 555,136,017 |
Investments - Summary of Cost a
Investments - Summary of Cost and Estimated Fair Value of Equity Securities (Detail) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Investments, Debt and Equity Securities [Abstract] | ||
Cost | $ 50,864,000 | $ 42,410,000 |
Gross Gains | 22,007,000 | 17,103,000 |
Gross Losses | 114,000 | 957,000 |
Estimated Fair Value | $ 72,757,031 | $ 58,556,173 |
Investments - Summary of Gross
Investments - Summary of Gross Investment Gains and Losses before Applicable Income Taxes (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Gain (Loss) on Securities [Line Items] | ||||
Gross investment gains | $ 4,241,000 | $ 6,703,000 | $ 7,252,000 | $ 4,007,000 |
Gross investment losses | 0 | 217,000 | 542,000 | 8,216,000 |
Net investment gains (losses) | 4,241,031 | 6,485,896 | 6,710,085 | (4,208,947) |
Fixed Maturities [Member] | ||||
Gain (Loss) on Securities [Line Items] | ||||
Gross investment gains | 479,000 | 229,000 | 524,000 | 652,000 |
Gross investment losses | 0 | 217,000 | 74,000 | 218,000 |
Equity Securities [Member] | ||||
Gain (Loss) on Securities [Line Items] | ||||
Gross investment gains | 3,762,000 | 6,474,000 | 6,728,000 | 3,355,000 |
Gross investment losses | $ 0 | $ 0 | $ 468,000 | $ 7,998,000 |
Investments - Summary of Fixed
Investments - Summary of Fixed Maturities with Unrealized Losses (Detail) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months, Fair Value | $ 178,424 | $ 67,740 |
Less Than 12 Months, Unrealized Losses | 2,666 | 629 |
More Than 12 Months, Fair Value | 3,862 | 8,466 |
More Than 12 Months, Unrealized Losses | 127 | 277 |
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months, Fair Value | 38,202 | 29,144 |
Less Than 12 Months, Unrealized Losses | 1,088 | 345 |
Obligations of States and Political Subdivisions [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months, Fair Value | 45,446 | 9,362 |
Less Than 12 Months, Unrealized Losses | 819 | 154 |
More Than 12 Months, Fair Value | 0 | |
More Than 12 Months, Unrealized Losses | 0 | |
Corporate Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months, Fair Value | 38,846 | 26,143 |
Less Than 12 Months, Unrealized Losses | 344 | 115 |
More Than 12 Months, Fair Value | 3,375 | 8,230 |
More Than 12 Months, Unrealized Losses | 125 | 276 |
Mortgage-Backed Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months, Fair Value | 55,930 | 3,091 |
Less Than 12 Months, Unrealized Losses | 415 | 15 |
More Than 12 Months, Fair Value | 487 | 236 |
More Than 12 Months, Unrealized Losses | $ 2 | $ 1 |
Segment Information - Summary o
Segment Information - Summary of Financial Data by Segment (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Premiums earned: | ||||
Premiums earned | $ 192,488,665 | $ 184,373,768 | $ 379,740,265 | $ 371,626,546 |
Net investment income | 7,652,180 | 7,172,144 | 15,162,758 | 14,548,428 |
Investment gains (losses) | 4,241,031 | 6,485,896 | 6,710,085 | (4,208,947) |
Total revenues | 205,145,943 | 198,899,772 | 403,115,841 | 383,810,978 |
Underwriting (loss) income: | ||||
Net investment income | 7,652,180 | 7,172,144 | 15,162,758 | 14,548,428 |
Net investment gains (losses) | 4,241,031 | 6,485,896 | 6,710,085 | (4,208,947) |
Income before income tax expense | 19,696,825 | 27,988,049 | 32,447,510 | 30,491,220 |
Operating Segments [Member] | ||||
Premiums earned: | ||||
Premiums earned | 192,489,000 | 184,374,000 | 379,740,000 | 371,627,000 |
Net investment income | 7,652,000 | 7,172,000 | 15,163,000 | 14,548,000 |
Investment gains (losses) | 4,241,000 | 6,486,000 | 6,710,000 | (4,209,000) |
Other | 764,000 | 868,000 | 1,503,000 | 1,845,000 |
Total revenues | 205,146,000 | 198,900,000 | 403,116,000 | 383,811,000 |
Underwriting (loss) income: | ||||
SAP underwriting (loss) income | 2,314,000 | 12,762,000 | (891,000) | 17,007,000 |
GAAP adjustments | 5,256,000 | 1,378,000 | 11,238,000 | 2,762,000 |
GAAP underwriting income | 7,570,000 | 14,140,000 | 10,347,000 | 19,769,000 |
Net investment income | 7,652,000 | 7,172,000 | 15,163,000 | 14,548,000 |
Net investment gains (losses) | 4,241,000 | 6,486,000 | 6,710,000 | (4,209,000) |
Other | 234,000 | 190,000 | 228,000 | 383,000 |
Income before income tax expense | 19,697,000 | 27,988,000 | 32,448,000 | 30,491,000 |
Commercial Lines [Member] | Operating Segments [Member] | ||||
Premiums earned: | ||||
Premiums earned | 115,300,000 | 101,870,000 | 224,525,000 | 203,645,000 |
Underwriting (loss) income: | ||||
SAP underwriting (loss) income | 1,767,000 | 4,472,000 | (6,475,000) | 3,906,000 |
Personal Lines [Member] | Operating Segments [Member] | ||||
Premiums earned: | ||||
Premiums earned | 77,189,000 | 82,504,000 | 155,215,000 | 167,982,000 |
Underwriting (loss) income: | ||||
SAP underwriting (loss) income | $ 547,000 | $ 8,290,000 | $ 5,584,000 | $ 13,101,000 |
Borrowings - Additional Informa
Borrowings - Additional Information (Detail) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Aug. 01, 2020 | |
Line of Credit Facility [Line Items] | ||
Line of credit expiration month and year | 2020-08 | |
Line of credit, interest rate description | interest rates equal to the then-current LIBOR rate plus 2.00% | |
Manufacturers and Traders Trust Company [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility remaining borrowing capacity | $ 20,000,000 | |
FHLB of Pittsburgh [Member] | Atlantic States [Member] | ||
Line of Credit Facility [Line Items] | ||
Right to request for extension of credit agreement with Manufacturers and Traders Trust Company | 8,847,792 | |
Federal home loan bank, fixed rate advances | $ 35,000,000 | |
Revolving Credit Facility [Member] | Manufacturers and Traders Trust Company [Member] | ||
Line of Credit Facility [Line Items] | ||
Right to request for extension of credit agreement with Manufacturers and Traders Trust Company | $ 20,000,000 | |
Debt instrument stated interest rate | 2.00% | |
Lines of Credit [Member] | FHLB of Pittsburgh [Member] | Atlantic States [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest rate on advances | 1.74% | |
Subordinated Debentures [Member] | ||
Line of Credit Facility [Line Items] | ||
Debt instrument stated interest rate | 5.00% | |
Subordinated Debentures [Member] | West Bend Mutual Insurance Company [Member] | ||
Line of Credit Facility [Line Items] | ||
Surplus note | $ 5,000,000 | |
Subordinated Debentures [Member] | Lines of Credit [Member] | FHLB of Pittsburgh [Member] | March 2021 Due [Member] | ||
Line of Credit Facility [Line Items] | ||
Outstanding advances | $ 50,000,000 | |
Interest rate on advances | 0.83% |
Borrowings - Amount of FHLB of
Borrowings - Amount of FHLB of Indianapolis/Pittsburgh Stock Purchased, Collateral Pledged and Assets Related to MICO's/Atlantic States Agreement (Detail) - Atlantic States [Member] - FHLB of Pittsburgh [Member] | Jun. 30, 2021USD ($) |
Amount of FHLB of Indianapolis/Pittsburgh stock purchased, collateral pledged and assets related to MICO's/Atlantic States Agreement | |
FHLB stock purchased and owned | $ 1,575,600 |
Collateral pledged, at par | 44,343,661 |
Borrowing capacity currently available | $ 8,847,792 |
Borrowings - Amount of FHLB o_2
Borrowings - Amount of FHLB of Indianapolis/Pittsburgh Stock Purchased, Collateral Pledged and Assets Related to MICO's/Atlantic States Agreement (Parenthetical) (Detail) | Jun. 30, 2021USD ($) |
FHLB of Pittsburgh [Member] | Atlantic States [Member] | |
Line of Credit Facility [Line Items] | |
Collateral Pledged at carrying value | $ 45,226,104 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Compensation expense in stock compensation plans | $ 304,373 | $ 314,237 | $ 597,168 | $ 644,541 |
Income tax benefit of stock compensation plans | 63,918 | 65,990 | 125,405 | 135,354 |
Unrecognized compensation expense related to nonvested share-based compensation granted under the plan | 1,000,000 | $ 1,000,000 | ||
Weighted average period of unrecognized compensation expense | 1 year 7 months 6 days | |||
Cash from option exercises | 7,000,000 | 2,200,000 | $ 11,400,000 | 3,100,000 |
Tax benefit for tax deductions related to option exercises | $ 271,979 | $ 54,221 | $ 421,135 | $ 68,878 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Measurements for Investments in Available-for-Sale Fixed Maturity and Equity Securities (Detail) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | $ 522,580 | $ 555,136 |
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 22,326 | 47,815 |
Obligations of States and Political Subdivisions [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 61,713 | 68,965 |
Corporate Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 211,076 | 212,708 |
Mortgage-Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 227,465 | 225,648 |
Assets and Liabilities on Recurring Basis [Member] | Total Investments in the Fair Value Hierarchy [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 595,337 | 613,692 |
Assets and Liabilities on Recurring Basis [Member] | Total Investments in the Fair Value Hierarchy [Member] | U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 22,326 | 47,815 |
Assets and Liabilities on Recurring Basis [Member] | Total Investments in the Fair Value Hierarchy [Member] | Obligations of States and Political Subdivisions [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 61,713 | 68,965 |
Assets and Liabilities on Recurring Basis [Member] | Total Investments in the Fair Value Hierarchy [Member] | Corporate Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 211,076 | 212,708 |
Assets and Liabilities on Recurring Basis [Member] | Total Investments in the Fair Value Hierarchy [Member] | Mortgage-Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 227,465 | 225,648 |
Assets and Liabilities on Recurring Basis [Member] | Total Investments in the Fair Value Hierarchy [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 72,757 | 58,556 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Assets and Liabilities on Recurring Basis [Member] | Total Investments in the Fair Value Hierarchy [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 70,467 | 54,152 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Assets and Liabilities on Recurring Basis [Member] | Total Investments in the Fair Value Hierarchy [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 70,467 | 54,152 |
Significant Other Observable Inputs (Level 2) [Member] | Assets and Liabilities on Recurring Basis [Member] | Total Investments in the Fair Value Hierarchy [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 524,870 | 559,540 |
Significant Other Observable Inputs (Level 2) [Member] | Assets and Liabilities on Recurring Basis [Member] | Total Investments in the Fair Value Hierarchy [Member] | U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 22,326 | 47,815 |
Significant Other Observable Inputs (Level 2) [Member] | Assets and Liabilities on Recurring Basis [Member] | Total Investments in the Fair Value Hierarchy [Member] | Obligations of States and Political Subdivisions [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 61,713 | 68,965 |
Significant Other Observable Inputs (Level 2) [Member] | Assets and Liabilities on Recurring Basis [Member] | Total Investments in the Fair Value Hierarchy [Member] | Corporate Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 211,076 | 212,708 |
Significant Other Observable Inputs (Level 2) [Member] | Assets and Liabilities on Recurring Basis [Member] | Total Investments in the Fair Value Hierarchy [Member] | Mortgage-Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | 227,465 | 225,648 |
Significant Other Observable Inputs (Level 2) [Member] | Assets and Liabilities on Recurring Basis [Member] | Total Investments in the Fair Value Hierarchy [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Fair Value Disclosure | $ 2,290 | $ 4,404 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 6 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Other deferred tax assets, net | $ 27,600,000 | $ 26,700,000 | |
Income taxes receivable | 4,018,210 | $ 3,089,369 | $ 1,600,000 |
Parent Company [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance related to the portion of operating loss carryforwards | $ 7,900,000 | ||
Earliest Tax Year [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Tax years open for examination | 2016 | ||
Latest Tax Year [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Tax years open for examination | 2020 |
Liabilities for Losses and Lo_3
Liabilities for Losses and Loss Expenses - Summary of Insurance Subsidiaries' Liabilities for Losses and Loss Expenses (Detail) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Liability for Claims and Claims Adjustment Expense [Abstract] | ||
Balance at January 1 | $ 962,007,437 | $ 869,674,000 |
Less reinsurance recoverable | (404,818,000) | (362,768,000) |
Net balance at January 1 | 557,189,000 | 506,906,000 |
Incurred related to: | ||
Current year | 254,740,000 | 233,460,000 |
Prior years | (21,564,000) | (10,864,000) |
Total incurred | 233,176,000 | 222,596,000 |
Paid related to: | ||
Current year | 98,966,000 | 97,473,000 |
Prior years | 111,300,000 | 106,716,000 |
Total paid | 210,266,000 | 204,189,000 |
Net balance at end of period | 580,099,000 | 525,313,000 |
Plus reinsurance recoverable | 418,559,000 | 376,511,000 |
Balance at end of period | $ 998,658,015 | $ 901,824,000 |
Liabilities for Losses and Lo_4
Liabilities for Losses and Loss Expenses - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||
Increase (Decrease) in liability for losses and loss expenses of prior years | $ (21,564) | $ (10,864) |
Percentage of 2010 development | 3.90% | 2.10% |