Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 08, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity File Number | 001-09463 | ||
Entity Registrant Name | RLI CORP | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 37-0889946 | ||
Entity Address, Address Line One | 9025 North Lindbergh Drive | ||
Entity Address, City or Town | Peoria | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 61615 | ||
City Area Code | 309 | ||
Local Phone Number | 692-1000 | ||
Title of 12(b) Security | Common Stock $0.01 par value | ||
Trading Symbol | RLI | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3,331,599,363 | ||
Entity Common Stock, Shares Outstanding | 45,149,351 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000084246 | ||
Amendment Flag | false | ||
ICFR Auditor Attestation Flag | true | ||
Documents Incorporated by Reference | Portions of the Registrant’s definitive Proxy Statement for the 2021 annual meeting of shareholders are incorporated herein by reference into Part III of this document. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Available-for-sale, at fair value (amortized cost of $2,061,467 and allowance for credit losses of $397 in 2020) (amortized cost of $1,915,278 and allowance for credit losses of $0 in 2019) | $ 2,196,626 | $ 1,983,086 |
Equity securities, at fair value (cost - $293,190 in 2020 and $262,131 in 2019) | 524,006 | 460,630 |
Other invested assets | 54,232 | 70,441 |
Cash | 62,217 | 46,203 |
Total investments and cash | 2,837,081 | 2,560,360 |
Accrued investment income | 16,126 | 14,587 |
Premiums and reinsurance balances receivable, net of allowances for uncollectible amounts of $17,658 in 2020 and $16,682 in 2019 | 174,628 | 160,369 |
Ceded unearned premiums | 113,488 | 93,656 |
Reinsurance balances recoverable on unpaid losses and settlement expenses, net of allowances for uncollectible amounts of $8,634 in 2020 and $9,402 in 2019 | 443,729 | 384,517 |
Deferred policy acquisition costs | 88,425 | 85,044 |
Property and equipment, at cost, net of accumulated depreciation of $68,682 in 2020 and $62,703 in 2019 | 51,406 | 53,121 |
Investment in unconsolidated investees | 128,382 | 103,836 |
Goodwill and intangibles | 53,719 | 54,127 |
Other assets | 31,501 | 36,104 |
TOTAL ASSETS | 3,938,485 | 3,545,721 |
LIABILITIES | ||
Unpaid losses and settlement expenses | 1,750,049 | 1,574,352 |
Unearned premiums | 586,386 | 540,213 |
Reinsurance balances payable | 42,265 | 25,691 |
Funds held | 81,747 | 83,358 |
Income taxes - deferred | 80,235 | 56,727 |
Bonds payable, long-term debt | 149,489 | 149,302 |
Accrued expenses | 75,925 | 66,626 |
Other liabilities | 36,411 | 54,064 |
TOTAL LIABILITIES | 2,802,507 | 2,550,333 |
SHAREHOLDERS' EQUITY | ||
Common stock ($0.01 par value) (Shares authorized - 200,000,000 in 2020 and 100,000,000 in 2019) (68,072,794 shares issued and 45,142,580 shares outstanding in 2020) (67,799,229 shares issued and 44,869,015 shares outstanding in 2019) | 681 | 678 |
Paid-in capital | 335,365 | 321,190 |
Accumulated other comprehensive earnings | 108,714 | 52,473 |
Retained earnings | 1,084,217 | 1,014,046 |
Deferred compensation | 8,292 | 7,980 |
Treasury stock, at cost (22,930,214 shares in 2020 and 2019) | (401,291) | (400,979) |
TOTAL SHAREHOLDERS' EQUITY | 1,135,978 | 995,388 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 3,938,485 | $ 3,545,721 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Available-for-sale, amortized cost | $ 2,061,467 | $ 1,915,278 |
Available-for-sale, allowance for credit losses | 397 | 0 |
Equity securities, cost | 293,190 | 262,131 |
Premiums and reinsurance balances receivable, allowances for uncollectible amounts | 17,658 | 16,682 |
Reinsurance balances recoverable on unpaid losses and settlement expenses, allowances for uncollectible amounts | 8,634 | 9,402 |
Property and equipment, accumulated depreciation | $ 68,682 | $ 62,703 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 68,072,794 | 67,799,229 |
Common stock, shares outstanding (in shares) | 45,142,580 | 44,869,015 |
Treasury stock, shares (in shares) | 22,930,214 | 22,930,214 |
Consolidated Statements of Earn
Consolidated Statements of Earnings and Comprehensive Earnings - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
Net premiums earned | $ 865,747 | $ 839,111 | $ 791,366 |
Net investment income | 67,893 | 68,870 | 62,085 |
Net realized gains | 17,885 | 17,520 | 63,624 |
Other-than-temporary-impairment losses on investments | (217) | ||
Net unrealized gains (losses) on equity securities | 32,101 | 78,090 | (98,735) |
Consolidated revenue | 983,626 | 1,003,591 | 818,123 |
Losses and settlement expenses | 442,884 | 413,416 | 428,193 |
Policy acquisition costs | 286,438 | 288,697 | 267,738 |
Insurance operating expenses | 66,828 | 69,430 | 53,803 |
Interest expense on debt | 7,603 | 7,588 | 7,437 |
General corporate expenses | 10,265 | 12,686 | 9,427 |
Total expenses | 814,018 | 791,817 | 766,598 |
Equity in earnings of unconsolidated investees | 20,233 | 20,960 | 16,056 |
Earnings before income taxes | 189,841 | 232,734 | 67,581 |
Income tax expense (benefit): | |||
Current | 24,174 | 26,426 | 23,917 |
Deferred | 8,576 | 14,666 | (20,515) |
Income tax expense (benefit) | 32,750 | 41,092 | 3,402 |
Net earnings | 157,091 | 191,642 | 64,179 |
Other comprehensive earnings (loss), net of tax | 56,219 | 67,045 | (33,997) |
Comprehensive earnings | $ 213,310 | $ 258,687 | $ 30,182 |
Basic net earnings per share | $ 3.49 | $ 4.28 | $ 1.45 |
Diluted net earnings per share | $ 3.46 | $ 4.23 | $ 1.43 |
Weighted average number of common shares outstanding: | |||
Basic | 45,000 | 44,734 | 44,358 |
Diluted | 45,376 | 45,257 | 44,835 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common stock | Paid-in Capital | Accumulated Other Comprehensive Earnings (Loss) | Accumulated Other Comprehensive Earnings (Loss)Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Deferred Compensation | Treasury Stock at Cost |
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2017 | $ 853,598 | $ 67,079 | $ 233,077 | $ 157,919 | $ 788,522 | $ 8,640 | $ (401,639) | |||
Stockholders' Equity Attributable to Parent, Beginning Balance (Accounting Standards Update 2016-01 and 2018-02) at Dec. 31, 2017 | $ 86 | $ (138,494) | $ 138,580 | |||||||
Shares, Outstanding, Beginning Balance at Dec. 31, 2017 | 44,148,355 | |||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Par value conversion from $1.00 per share to $0.01 per share | $ (66,409) | 66,409 | ||||||||
Net earnings | 64,179 | 64,179 | ||||||||
Other comprehensive earnings (loss), net of tax | (33,997) | (33,997) | ||||||||
Deferred compensation | (286) | 286 | ||||||||
Share-based compensation | 6,178 | $ 4 | 6,174 | |||||||
Share-based compensation (in shares) | 355,688 | |||||||||
Dividends and dividend equivalents | (83,202) | (83,202) | ||||||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2018 | 806,842 | $ 674 | 305,660 | (14,572) | 908,079 | 8,354 | (401,353) | |||
Shares, Outstanding, Ending Balance at Dec. 31, 2018 | 44,504,043 | |||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net earnings | 191,642 | 191,642 | ||||||||
Other comprehensive earnings (loss), net of tax | 67,045 | 67,045 | ||||||||
Deferred compensation | (374) | 374 | ||||||||
Share-based compensation | 15,534 | $ 4 | 15,530 | |||||||
Share-based compensation (in shares) | 364,972 | |||||||||
Dividends and dividend equivalents | (85,675) | (85,675) | ||||||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2019 | $ 995,388 | $ 1,095 | $ 678 | 321,190 | 52,473 | $ 22 | 1,014,046 | $ 1,073 | 7,980 | (400,979) |
Shares, Outstanding, Ending Balance at Dec. 31, 2019 | 44,869,015 | |||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Accounting Standards Update Extensible List | us-gaap:AccountingStandardsUpdate201613Member | |||||||||
Net earnings | $ 157,091 | 157,091 | ||||||||
Other comprehensive earnings (loss), net of tax | 56,219 | 56,219 | ||||||||
Deferred compensation | 312 | (312) | ||||||||
Share-based compensation | 14,178 | $ 3 | 14,175 | |||||||
Share-based compensation (in shares) | 273,565 | |||||||||
Dividends and dividend equivalents | (87,993) | (87,993) | ||||||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2020 | $ 1,135,978 | $ 681 | $ 335,365 | $ 108,714 | $ 1,084,217 | $ 8,292 | $ (401,291) | |||
Shares, Outstanding, Ending Balance at Dec. 31, 2020 | 45,142,580 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement Of Stockholders Equity [Abstract] | |||
Cash dividends paid per common share | $ 1.95 | $ 1.91 | $ 1.87 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net earnings | $ 157,091 | $ 191,642 | $ 64,179 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Net realized gains | (17,885) | (17,520) | (63,407) |
Net unrealized (gains) losses on equity securities | (32,101) | (78,090) | 98,735 |
Depreciation | 7,432 | 8,164 | 7,042 |
Deferred income tax expense (benefit) | 8,576 | 14,666 | (20,515) |
Other items, net | 10,460 | 25,341 | 6,171 |
Change in: | |||
Accrued investment income | (1,539) | (552) | 1,132 |
Premiums and reinsurance balances receivable (net of direct write-offs and commutations) | (14,259) | (7,793) | (18,225) |
Reinsurance balances payable | 16,574 | 3,100 | 967 |
Funds held | (1,611) | 11,049 | (2,251) |
Ceded unearned premiums | (19,832) | (22,482) | (13,246) |
Reinsurance balances recoverable on unpaid losses and settlement expenses | (59,212) | (19,518) | (63,008) |
Deferred policy acquisition costs | (3,381) | (110) | (7,218) |
Accrued expenses | 9,299 | 21,502 | (7,724) |
Unpaid losses and settlement expenses | 175,697 | 113,004 | 189,845 |
Unearned premiums | 46,173 | 43,708 | 45,056 |
Current income taxes payable | (2,665) | (1,434) | 5,725 |
Changes in investment in unconsolidated investees: | |||
Undistributed earnings | (20,233) | (20,960) | (16,056) |
Dividends received | 4,675 | 13,200 | 9,900 |
Net cash provided by operating activities | 263,259 | 276,917 | 217,102 |
Purchase of: | |||
Fixed income securities, available-for-sale | (518,362) | (539,726) | (725,675) |
Equity securities | (77,863) | (89,486) | (115,921) |
Property and equipment | (5,768) | (6,955) | (6,087) |
Investment in equity method investee | (4,533) | ||
Other | (12,851) | (22,751) | (18,754) |
Proceeds from sale of: | |||
Fixed income securities, available-for-sale | 84,587 | 196,558 | 395,019 |
Equity securities | 79,368 | 62,172 | 147,838 |
Property and equipment | 167 | ||
Other | 4,328 | 2,502 | 3,394 |
Proceeds from call or maturity of: | |||
Fixed income, available-for-sale | 283,107 | 201,383 | 187,380 |
Net proceeds from sale (purchase) of short-term investments | 11,550 | (1,570) | |
Net cash used in investing activities | (167,987) | (184,753) | (134,209) |
Cash flows from financing activities: | |||
Proceeds from stock option exercises | 8,648 | 9,490 | 6,076 |
Cash dividends paid | (87,906) | (85,591) | (83,100) |
Net cash used in financing activities | (79,258) | (76,101) | (77,024) |
Net increase in cash | 16,014 | 16,063 | 5,869 |
Cash at beginning of year | 46,203 | 30,140 | 24,271 |
Cash at end of year | $ 62,217 | $ 46,203 | $ 30,140 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. DESCRIPTION OF BUSINESS RLI Corp. is an insurance holding company. References to “the Company,” “we,” “our,” “us” or like terms refer to the business of RLI Corp. and its subsidiaries. We underwrite select property and casualty insurance coverages through major subsidiaries collectively known as RLI Insurance Group. We conduct operations principally through three insurance companies. RLI Insurance Company (RLI Ins.), a subsidiary of RLI Corp. and our principal insurance subsidiary, writes multiple lines of insurance on an admitted basis in all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands and Guam. Mt. Hawley Insurance Company (Mt. Hawley), a subsidiary of RLI Ins., writes excess and surplus lines insurance on a non-admitted basis in all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands and Guam. Contractors Bonding and Insurance Company (CBIC), a subsidiary of RLI Ins., writes multiple lines of insurance on an admitted basis in all 50 states and the District of Columbia. On May 4, 2018, RLI Corp. changed its state of incorporation from the State of Illinois to the State of Delaware (the Reincorporation). The Reincorporation was effected by merging RLI Corp., an Illinois corporation (RLI Illinois), into RLI Corp., a Delaware corporation (RLI Delaware). The separate corporate existence of RLI Illinois ceased and RLI Delaware continues in existence as the surviving corporation and possesses all rights, privileges, powers and franchises of RLI Illinois. The Reincorporation did not result in any change in the name, business, management, fiscal year, location of the principal executive offices, assets or liabilities of the Company. Each outstanding share of RLI Illinois common stock, which had a par value of $1.00 per share, was automatically converted into one outstanding share of RLI Delaware common stock, with a par value of $0.01 per share. In order to reflect the new par value of common stock on the balance sheet, a $66.4 million reclassification from common stock to paid-in-capital was made. B. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION The accompanying consolidated financial statements were prepared in conformity with generally accepted accounting principles in the United States of America (GAAP), which differ in some respects from those followed in reports to insurance regulatory authorities. The consolidated financial statements include the accounts of our holding company and our subsidiaries. Intercompany balances and transactions have been eliminated. The Company has evaluated subsequent events through the date these consolidated financial statements were issued. There were no subsequent events requiring adjustment to the financial statements or disclosure. C. ADOPTED ACCOUNTING STANDARDS ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2016-13 was issued to provide more decision-useful information about the expected credit losses on financial instruments. Previous guidance delayed the recognition of credit losses until it was probable a loss had been incurred. This update requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that is included in net earnings. Credit losses relating to available-for-sale debt securities are also required to be recorded through a reversible allowance for credit losses, but is limited to the amount by which fair value is less than amortized cost. We adopted ASU 2016-13 on January 1, 2020 using the modified-retrospective approach. The standard applied to three of the Company’s balance sheet accounts: available-for-sale fixed income securities, premiums receivable and reinsurance balances recoverable. The impact of this standard was and is expected to continue to be immaterial, as our fixed income portfolio is weighted towards higher rated bonds (83 percent rated A or better at December 31, 2020 and 85 percent at December 31, 2019), we purchase reinsurance from financially strong reinsurers, we have a long history of collecting premium receivables through various economic cycles and we had previously maintained an allowance for uncollectible premium and reinsurance balances. In total, the cumulative-effect adjustment made to the balance sheet as of the beginning of the year resulted in a $1.1 million increase to retained earnings and an increase to accumulated other comprehensive earnings of less than $0.1 million D. PROSPECTIVE ACCOUNTING STANDARDS There are no prospective accounting standards which would have a material impact on our financial statements as of December 31, 2020. E . INVESTMENTS Equity securities are carried at fair value with unrealized gains and losses recorded within net earnings. Investments in fixed income securities are classified into one of three categories: trading, held-to-maturity or available-for-sale. All of our fixed income securities are classified as available-for-sale and reported at fair value . Unrealized gains and losses on these securities are excluded from net earnings but are recorded as a separate component of comprehensive earnings and shareholders’ equity, net of deferred income taxes. Interest on fixed maturities and short-term investments is credited to earnings on an accrual basis. Premiums and discounts are amortized or accreted over the lives of the related fixed maturities. Dividends on equity securities are credited to earnings on the ex-dividend date. Realized gains and losses on disposition of investments are based on specific identification of the investments sold on the settlement date. F . CASH, SHORT-TERM INVESTMENTS AND OTHER INVESTED ASSETS Cash consists of uninvested balances in bank accounts. Other invested assets include investments in low income housing tax credit partnerships (LIHTC), membership in the Federal Home Loan Bank of Chicago (FHLBC), investments in private funds and investments in restricted stock. Our LIHTC investments are carried at amortized cost, and our investment in FHLBC stock is carried at cost. Due to the nature of cash, the LIHTCs and our membership in the FHLBC, their carrying amounts approximate fair value. The private funds are carried at fair value, using each investment’s net asset value. Restricted stock is carried at quoted market prices, as the restrictions expire within one year. G . REINSURANCE Ceded unearned premiums and reinsurance balances recoverable on unpaid losses and settlement expenses are reported separately as an asset, rather than being netted with the related liability, since reinsurance does not relieve the Company of our liability to policyholders. Such balances are subject to the credit risk associated with the individual reinsurer. We continually monitor the financial condition of our reinsurers and actively follow up on any past due or disputed amounts. As part of our monitoring efforts, we review their annual financial statements and SEC filings for those reinsurers that are publicly traded. We also review insurance industry developments that may impact the financial condition of our reinsurers. We analyze the credit risk associated with our reinsurance balances recoverable by monitoring the AM Best and S&P ratings of our reinsurers. In addition, we subject our reinsurance recoverables to detailed recoverability tests, including a segment-based analysis using the average default rating percentage by S&P rating, which assists the Company in assessing the sufficiency of the existing allowance. Additionally, we perform an in-depth reinsurer financial condition analysis prior to the renewal of our reinsurance placements. Our policy is to charge to earnings, in the form of an allowance, an estimate of unrecoverable amounts from reinsurers. This allowance is reviewed on an ongoing basis to ensure that the amount makes a reasonable provision for reinsurance balances that we may be unable to recover. Once regulatory action (such as receivership, finding of insolvency, order of conservation or order of liquidation) is taken against a reinsurer, the paid and unpaid recoverable for the reinsurer are specifically identified and written off through the use of our allowance for estimated unrecoverable amounts from reinsurers. When we write-off such a balance, it is done in full. We then re-evaluate the remaining allowance and determine whether the balance is sufficient as detailed above and if needed, an additional allowance is recognized and income charged. H . POLICY ACQUISITION COSTS We defer incremental direct costs that relate to the successful acquisition of new or renewal insurance contracts, including commissions and premium taxes. Acquisition-related costs may be deemed ineligible for deferral when they are based on contingent or performance criteria beyond the basic acquisition of the insurance contract or when efforts to obtain or renew the insurance contract are unsuccessful. All eligible costs are capitalized and charged to expense in proportion to premium revenue recognized. The method followed in computing deferred policy acquisition costs limits the amount of such deferred costs to their estimated realizable value. This process contemplates the premiums to be earned, anticipated losses and settlement expenses and certain other costs expected to be incurred, but does not consider investment income. Judgments as to the ultimate recoverability of such deferred costs are reviewed on a segment basis and are highly dependent upon estimated future loss costs associated with the premiums written. This deferral methodology applies to both gross and ceded premiums and acquisition costs. I . PROPERTY AND EQUIPMENT Property and equipment are presented at cost less accumulated depreciation and are depreciated on a straight-line basis for financial statement purposes over periods ranging from 3 to 10 years for equipment and up to 30 years for buildings and improvements. J . INVESTMENTS IN UNCONSOLIDATED INVESTEES Our investments accounted for under the equity method are primarily related to Maui Jim, Inc. (Maui Jim) and Prime Holdings Insurance Services, Inc. (Prime). We maintain a 40 percent interest in the equity and earnings of Maui Jim, a manufacturer of high- quality sunglasses , and a minority representation on their board of directors. Maui Jim’s chief executive officer owns a controlling majority of the outstanding shares of Maui Jim. We carry this investment at the holding company level as it is not core to our insurance operations. Our investment in Maui Jim was $ million at December 31, 20 20 and $ million at December 31, 201 9 . In 20 20 , we recorded $ million in investee earnings for Maui Jim, compared to $ million in 201 9 and $ million in 2018. As of December 31, 2020, we had a 23 percent interest in the equity and earnings of Prime. Prime writes business through two Illinois domiciled insurance carriers, Prime Insurance Company, an excess and surplus lines company, and Prime Property and Casualty Insurance Inc., an admitted insurance company. Our investment in Prime was $32.7 million at December 31, 2020 and $24.2 million at December 31, 2019. In 2020, we recorded $10.8 million in investee earnings for Prime, compared to $7.4 million in 2019 and $3.6 million in 2018. Additionally, we maintain a quota share reinsurance treaty with Prime, which contributed $15.7 million of gross premiums written and $14.3 million of net premiums earned during 2020, compared to $13.1 million of gross premiums written and $28.7 million of net premiums earned during 2019 and $41.1 million of gross premiums written and $34.2 million of net premiums earned during 2018. The decrease in premium is reflective of our decreased quota share participation with Prime. Our equity method investments recorded net income of $70.4 million in 2020, $77.3 million in 2019 and $50.2 million in 2018. Additional summarized financial information for our equity method investments as of 2020 and 2019 is outlined in the following table: (in millions) 2020 2019 Total assets $ 837.2 $ 718.5 Total liabilities 473.2 420.8 Total equity 364.0 297.7 Approximately $106.0 million of undistributed earnings from our equity method investees are included in our retained earnings as of December 31, 2020. We received dividends of $4.7 million, $13.2 million and $9.9 million from our equity method investees in 2020, 2019 and 2018, respectively. We perform annual impairment reviews of our investments in unconsolidated investees, which take into consideration current valuation and operating results. Based upon the most recent reviews, the assets were not impaired. K . INTANGIBLE ASSETS The composition of goodwill and intangibles at December 31, 2020 and 2019, is detailed in the following table: (in thousands) 2020 2019 Goodwill Surety $ 40,816 $ 40,816 Casualty 5,246 5,246 Total goodwill $ 46,062 $ 46,062 Intangibles State insurance licenses $ 7,500 $ 7,500 Definite-lived intangibles, net of accumulated amortization of $3,878 at 12/31/20 and $3,470 at 12/31/19 157 565 Total intangibles $ 7,657 $ 8,065 Total goodwill and intangibles $ 53,719 $ 54,127 As the amortization of goodwill and indefinite-lived intangible assets is not permitted, the assets are tested for impairment on an annual basis, or earlier if there is reason to suspect that their values may have been diminished or impaired. Annual impairment testing was performed on each of our goodwill and indefinite-lived intangible assets during 2020. Based upon these reviews, our goodwill and state insurance license indefinite-lived intangible asset were not impaired. In addition, as of December 31, 2020, there were no triggering events on goodwill and intangible assets that would suggest an updated review was necessary. During the first quarter of 2018, adverse loss experience triggered the need to test the medical professional liability reporting unit. The testing resulted in a $4.4 million non-cash impairment charge on goodwill and intangible assets in 2018. The fair value for the medical professional liability reporting unit’s agency relationships, carried as a definite-lived intangible asset, was determined by using a discounted cash flow valuation. The carrying value exceeded the fair value, resulting in a $0.8 million non-cash impairment charge. The fair value for the medical professional liability reporting unit’s goodwill was determined by using a weighted average of a market approach and discounted cash flow valuation. The carrying value exceeded the fair value in each year, resulting in a $3.6 million non-cash impairment charge in 2018. Subsequent to the 2018 impairment, the medical professional liability reporting unit had no remaining goodwill or intangible assets. All impairment charges were recorded as net realized losses in the respective period’s reporting unit. The definite-lived intangible assets are amortized against future operating results based on their estimated useful lives. Amortization of intangible assets was $0.4 million for 2020, 2019 and 2018. We anticipate we will recognize amortization expense of $0.1 million in 2021 and less than $0.1 million in 2022. L . UNPAID LOSSES AND SETTLEMENT EXPENSES The liability for unpaid losses and settlement expenses represents estimates of amounts needed to pay reported and unreported claims and related expenses. The estimates are based on certain actuarial and other assumptions related to the ultimate cost to settle such claims. Such assumptions are subject to occasional changes due to evolving economic, social and political conditions. All estimates are periodically reviewed and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments are reflected in the results of operations in the period in which they are determined. Due to the inherent uncertainty in estimating reserves for losses and settlement expenses, there can be no assurance that the ultimate liability will not exceed recorded amounts. If actual liabilities do exceed recorded amounts, there will be an adverse effect. Furthermore, we may determine that recorded reserves are more than adequate to cover expected losses, which would lead to a reduction in our reserves. M . INSURANCE REVENUE RECOGNITION Insurance premiums are recognized ratably over the term of the contracts, net of ceded reinsurance. Unearned premiums are calculated on a monthly pro rata basis. N . INCOME TAXES We file a consolidated federal income tax return. Federal income taxes are accounted for using the asset and liability method under which deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities, operating losses and tax credit carry forwards. The effect on deferred taxes for a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that all or some of the deferred tax assets will not be realized. We consider uncertainties in income taxes and recognize those in our financial statements as required. As it relates to uncertainties in income taxes, our unrecognized tax benefits, including interest and penalty accruals, are not considered material to the consolidated financial statements. Also, no tax uncertainties are expected to result in significant increases or decreases to unrecognized tax benefits within the next 12-month period. Penalties and interest related to income tax uncertainties, should they occur, would be included in income tax expense in the period in which they are incurred. As an insurance company, we are subject to minimal state income tax liabilities. On a state basis, since the majority of our income is from insurance operations, we pay premium taxes which are calculated as a percentage of gross premiums written in lieu of state income taxes. Premium taxes are a component of policy acquisition costs. O . EARNINGS PER SHARE Basic earnings per share (EPS) is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the dilution that could occur if securities or other contracts to issue common stock or common stock equivalents were exercised or converted into common stock. When inclusion of these items increases the earnings per share or reduces the loss per share, the effect on earnings is anti-dilutive. Under these circumstances, the diluted net earnings or net loss per share is computed excluding these items. The following represents a reconciliation of the numerator and denominator of the basic and diluted EPS computations contained in the consolidated financial statements: Weighted Average Income Shares Per Share (in thousands, except per share data) (Numerator) (Denominator) Amount For the year ended December 31, 2020 Basic EPS Income available to common shareholders $ 157,091 45,000 $ 3.49 Stock options — 376 Diluted EPS Income available to common shareholders and assumed conversions $ 157,091 45,376 $ 3.46 Anti-dilutive options excluded from diluted EPS 384 For the year ended December 31, 2019 Basic EPS Income available to common shareholders $ 191,642 44,734 $ 4.28 Stock options — 523 Diluted EPS Income available to common shareholders and assumed conversions $ 191,642 45,257 $ 4.23 Anti-dilutive options excluded from diluted EPS 65 For the year ended December 31, 2018 Basic EPS Income available to common shareholders $ 64,179 44,358 $ 1.45 Stock options — 477 Diluted EPS Income available to common shareholders and assumed conversions $ 64,179 44,835 $ 1.43 Anti-dilutive options excluded from diluted EPS 65 P . COMPREHENSIVE EARNINGS Our comprehensive earnings include net earnings plus after-tax unrealized gains and losses on our available-for-sale fixed income portfolio. In reporting the components of comprehensive earnings, we used the federal statutory tax rate of 21 percent. Other comprehensive income (loss), as shown in the consolidated statements of earnings and comprehensive earnings, is net of tax expense (benefit) of $14.9 million, $17.8 million and $(9.0) million for 2020, 2019 and 2018, respectively. The table below illustrates the changes in the balance of each component of accumulated other comprehensive earnings for each period presented in the consolidated financial statements. The changes in accumulated other comprehensive earnings also reflect adjustments from the adoption of accounting standards. ASU 2016-01, Financial Instruments – Overall (subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, ASU 2018-02 addressed issues arising from the enactment of the Tax Cuts and Jobs Act of 2017 (TCJA). Deferred tax items are required to be revalued based on new tax laws with changes included in earnings. Since other comprehensive earnings was not affected by the revaluation of deferred tax items, the accumulated other comprehensive earnings balance was reflective of the historic tax rate instead of the newly enacted rate, which created a stranded tax effect. ASU 2018-02 allowed for the reclassification of our $3.7 million stranded tax effect out of accumulated other comprehensive earnings into retained earnings. Unrealized Gains/Losses on Available-for-Sale Securities For the Year Ended December 31, (in thousands) 2020 2019 2018 Beginning balance $ 52,473 $ (14,572 ) $ 157,919 Cumulative-effect adjustment of ASU 2016-13 (see note 1.C) 22 — — Cumulative-effect adjustment of ASU 2016-01 — — (142,219 ) Adjusted beginning balance $ 52,495 $ (14,572 ) $ 15,700 Other comprehensive earnings before reclassifications 58,986 69,560 (35,763 ) Amounts reclassified from accumulated other comprehensive earnings (2,767 ) (2,515 ) 1,766 Net current period other comprehensive earnings (loss) $ 56,219 $ 67,045 $ (33,997 ) Reclassification of stranded tax effect from implementation of TCJA — — 3,725 Ending balance $ 108,714 $ 52,473 $ (14,572 ) Balance of securities for which an allowance for credit losses has not been recognized in net earnings $ 470 $ — $ — In 2020, credit losses or the sale of an available-for-sale security resulted in amounts being reclassified from accumulated other comprehensive earnings to current period net earnings. In 2019 and 2018, the sale or other-than-temporary impairment of an available-for-sale security resulted in amounts being reclassified from accumulated other comprehensive earnings to net earnings. The effects of reclassifications out of accumulated other comprehensive earnings by the respective line items of net earnings are presented in the following table. Amount Reclassified from Accumulated Other Comprehensive Earnings (in thousands) Component of Accumulated For the Year Ended December 31, Affected line item in the Other Comprehensive Earnings 2020 2019 2018 Consolidated Statement of Earnings Unrealized gains and losses on available-for-sale securities $ 3,872 $ 3,184 $ (2,018 ) Net (369 ) — — Credit losses presented within net realized gains — — (217 ) Other-than-temporary impairment losses on investments $ 3,503 $ 3,184 $ (2,235 ) Earnings (losses) before income taxes (736 ) (669 ) 469 Income tax (expense) benefit $ 2,767 $ 2,515 $ (1,766 ) Net earnings (loss) Q . FAIR VALUE DISCLOSURES Fair value is defined as the price in the principal market that would be received for an asset to facilitate an orderly transaction between market participants on the measurement date. We determined the fair value of certain financial instruments based on their underlying characteristics and relevant transactions in the marketplace. We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following are the levels of the fair value hierarchy and a brief description of the type of valuation inputs that are used to establish each level. Financial assets are classified based upon the lowest level of significant input that is used to determine fair value. Pricing Level 1 is applied to valuations based on readily available, unadjusted quoted prices in active markets for identical assets. Pricing Level 2 is applied to valuations based upon quoted prices for similar assets in active markets, quoted prices for identical or similar assets in inactive markets; or valuations based on models where the significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities) or can be corroborated by observable market data. Pricing Level 3 is applied to valuations that are derived from techniques in which one or more of the significant inputs are unobservable. As a part of management’s process to determine fair value, we utilize widely recognized, third-party pricing sources to determine our fair values. We have obtained an understanding of the third-party pricing sources’ valuation methodologies and inputs. The following is a description of the valuation techniques used for financial assets that are measured at fair value, including the general classification of such assets pursuant to the fair value hierarchy. Corporate, Agencies, Government and Municipal Bonds: The pricing vendor employs a multi-dimensional model which uses standard inputs including (listed in approximate order of priority for use) benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers and other reference data. The pricing vendor also monitors market indicators, as well as industry and economic events. All bonds valued using these techniques are classified as Level 2. All Corporate, Agencies, Government and Municipal securities are deemed Level 2. Mortgage-backed Securities (MBS)/Collateralized Mortgage Obligations (CMO) and Asset-backed Securities (ABS): The pricing vendor evaluation methodology includes principally interest rate movements and new issue data. Evaluation of the tranches (nonvolatile, volatile or credit sensitivity) is based on the pricing vendors’ interpretation of accepted modeling and pricing conventions. This information is then used to determine the cash flows for each tranche, benchmark yields, pre-payment assumptions and to incorporate collateral performance. To evaluate CMO volatility, an option adjusted spread model is used in combination with models that simulate interest rate paths to determine market price information. This process allows the pricing vendor to obtain evaluations of a broad universe of securities in a way that reflects changes in yield curve, index rates, implied volatility, mortgage rates and recent trade activity. MBS/CMO and ABS with corroborated, observable inputs are classified as Level 2. All of our MBS/CMO and ABS are deemed Level 2. Regulation D Private Placement Securities: The pricing vendor evaluation methodology for these securities includes a combination of observable and unobservable inputs. Observable inputs include public corporate spread matrices classified by sector, rating and average life, as well as investment and non-investment grade matrices created from fixed income indices. Unobservable inputs include a liquidity spread premium calculated based on public corporate spread and private corporate spread matrices. All Regulation D privately-placed bonds are classified as corporate securities and deemed Level 3. For all of our fixed income securities, we periodically conduct a review to assess the reasonableness of the fair values provided by our pricing services. Our review consists of a two-pronged approach. First, we compare prices provided by our pricing services to those provided by an additional source. In some cases, we obtain prices from securities brokers and compare them to the prices provided by our pricing services. In our comparisons, if discrepancies are found, we compare our prices to actual reported trade data for like securities. No changes to the fair values supplied by our pricing services have occurred as a result of our reviews. Based on these assessments, we have determined that the fair values of our fixed income securities provided by our pricing services are reasonable. Common Stock: As of December 31, 2020, all but one of our common stock holdings were traded on an exchange. Exchange traded equities have readily observable price levels and are classified as Level 1 (fair value based on quoted market prices). Pricing for the equity security not traded on an exchange is provided by a third-party pricing source and is classified as Level 2. Due to the relatively short-term nature of cash, short-term investments, accounts receivable and accounts payable, their carrying amounts are reasonable estimates of fair value. Our investments in private funds, classified as other invested assets, are measured using the investments’ net asset value per share and are not categorized within the fair value hierarchy. The fair value of our long-term debt is discussed further in note 4. R . STOCK-BASED COMPENSATION We expense the estimated fair value of employee stock options and similar awards. We measure compensation cost for awards of equity instruments to employees based on the grant-date fair value of those awards and recognize compensation expense over the service period that the awards are expected to vest. The tax effects related to share-based payments are made through net earnings. See note 8 for further discussion and related disclosures regarding stock options. S . RISKS AND UNCERTAINTIES Certain risks and uncertainties are inherent in our day-to-day operations and in the process of preparing our consolidated financial statements. The more significant risks and uncertainties, as well as our attempt to mitigate, quantify and minimize such risks, are presented below and throughout the notes to the consolidated financial statements. Insurance Risks We compete with a large number of other companies in our selected lines of business. During periods of intense competition for premium, we are vulnerable to the actions of other companies who may seek to write business without the appropriate regard for risk and profitability. The insurance industry is often highly competitive, which can make it difficult to grow or maintain premium volume without sacrificing underwriting discipline and income. Our profitability can be significantly affected by the ability of our underwriters to accurately select and price risk and our claim personnel to appropriately deliver fair outcomes. We attempt to mitigate this risk by incentivizing our underwriters to maximize underwriting profit and remain disciplined in pricing and selecting risks. If we are unable to compete effectively in the markets in which we operate or expand our operations into new markets, our underwriting revenues may decline, as well as overall business results. Our loss reserves are based on estimates and may be inadequate to cover our actual insured losses, which would negatively impact our profitability. As of December 31, 2020, we had $1.8 billion of gross loss and LAE reserves. Significant periods of time often elapse between the occurrence of an insured loss, the reporting of the loss to the Company and our payment of that loss. As part of the reserving process, we review historical data and consider the impact of various factors such as trends in claim frequency and severity, emerging economic and social trends, inflation and changes in the regulatory and litigation environments. If the actual amount of insured losses is greater than the amount we have reserved for these losses, our profitability would suffer. Catastrophe Exposures Our insurance coverages include exposure to catastrophic events. We monitor all catastrophe exposures by quantifying our exposed policy limits in each region and by using computer-assisted modeling techniques. Additionally, we limit our risk to such catastrophes through restraining the total policy limits written in each region and by purchasing reinsurance. Our major catastrophe exposure is to losses caused by earthquakes, primarily on the West Coast. In 2020, we had reinsurance protection of $500 million in excess of $25 million first-dollar retention for earthquakes in California and $525 million in excess of a $25 million first-dollar retention for earthquakes outside of California. These amounts are subject to certain co-participations by the Company on losses |
Investments
Investments | 12 Months Ended |
Dec. 31, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | 2. INVESTMENTS Our investments are primarily composed of fixed income debt securities and common stock equity securities. All of our debt securities are classified as available-for-sale, which are carried at fair value. Our equity portfolio consists of common stocks and exchange traded funds (ETF), which are carried at fair value. A summary of net investment income is as follows: (in thousands) 2020 2019 2018 Interest on fixed income securities $ 59,755 $ 60,364 $ 54,491 Dividends on equity securities 9,728 9,950 9,814 Interest on cash, short-term investments and other invested assets 3,379 3,674 2,309 Gross investment income $ 72,862 $ 73,988 $ 66,614 Less investment expenses (4,969 ) (5,118 ) (4,529 ) Net investment income $ 67,893 $ 68,870 $ 62,085 Pretax net realized gains (losses) and net changes in unrealized gains (losses) on investments for the years ended December 31 are summarized below. (in thousands) 2020 2019 2018 Net realized gains (losses): Fixed income: Available-for-sale $ 3,872 $ 3,184 $ (2,018 ) Equity securities 15,796 14,445 69,868 Other (1,783 ) (109 ) (4,226 ) Total net realized gains (losses) $ 17,885 $ 17,520 $ 63,624 Other-than-temporary-impairment losses on investments $ — $ — $ (217 ) Net changes in unrealized gains (losses) on investments: Equity securities $ 32,317 $ 78,389 $ (98,380 ) Other invested assets (216 ) (299 ) (355 ) Total unrealized gains (losses) on equity securities recognized in net earnings $ 32,101 $ 78,090 $ (98,735 ) Fixed income: Available-for-sale $ 67,350 $ 83,758 $ (41,778 ) Investment in unconsolidated investees 3,444 1,109 (1,257 ) Other 369 — — Total unrealized gains (losses) recognized in other comprehensive earnings $ 71,163 $ 84,867 $ (43,035 ) Net realized gains (losses) and changes in unrealized gains (losses) on investments $ 121,149 $ 180,477 $ (78,363 ) The change in unrealized gain (loss) position was due to declining interest rates, increasing the fair value of fixed income securities, as well as strong equity market returns. The following is a summary of the disposition of fixed income securities and equities for the years ended December 31, with separate presentations for sales and calls/maturities: SALES Gross Realized Net Realized (in thousands) Proceeds Gains Losses Gain (Loss) 2020 Available-for-sale $ 84,697 $ 5,454 $ (1,777 ) $ 3,677 Equities 79,368 25,338 (9,542 ) 15,796 2019 Available-for-sale $ 196,799 $ 4,368 $ (2,167 ) $ 2,201 Equities 62,172 16,938 (2,493 ) 14,445 2018 Available-for-sale $ 394,318 $ 3,131 $ (5,349 ) $ (2,218 ) Equities 147,838 71,065 (1,197 ) 69,868 CALLS/MATURITIES Gross Realized Net Realized (in thousands) Proceeds Gains Losses Gain (Loss) 2020 Available-for-sale $ 283,107 $ 821 $ (27 ) $ 794 2019 Available-for-sale $ 201,698 $ 1,004 $ (21 ) $ 983 2018 Available-for-sale $ 187,380 $ 311 $ (111 ) $ 200 FAIR VALUE MEASUREMENTS Assets measured at fair value on a recurring basis as of December 31, 2020 and 2019, are summarized below: 2020 Quoted in Active Significant Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities - available-for-sale U.S. government $ — $ 183,357 $ — $ 183,357 U.S. agency — 32,872 — 32,872 Non-U.S. government & agency — 10,965 — 10,965 Agency MBS — 402,071 — 402,071 ABS/CMBS/MBS* — 218,373 — 218,373 Corporate — 798,794 17,798 816,592 Municipal — 532,396 — 532,396 Total fixed income securities - available-for-sale $ — $ 2,178,828 $ 17,798 $ 2,196,626 Equity securities 523,923 83 — 524,006 Other invested assets 6,068 — — 6,068 Total $ 529,991 $ 2,178,911 $ 17,798 $ 2,726,700 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities 2019 Quoted in Active Significant Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities - available-for-sale U.S. government $ — $ 193,661 $ — $ 193,661 U.S. agency — 38,855 — 38,855 Non-U.S. government & agency — 7,628 — 7,628 Agency MBS — 420,165 — 420,165 ABS/CMBS/MBS* — 224,870 — 224,870 Corporate — 690,297 1,770 692,067 Municipal — 405,840 — 405,840 Total fixed income securities - available-for-sale $ — $ 1,981,316 $ 1,770 $ 1,983,086 Equity securities 460,630 — — 460,630 Other invested assets — — — — Total $ 460,630 $ 1,981,316 $ 1,770 $ 2,443,716 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities The following table summarizes changes in the balance of Regulation D private placement fixed income securities whose fair value was measured using significant unobservable inputs (Level 3). (in thousands) Level 3 Securities Balance as of January 1, 2020 $ 1,770 Net realized and unrealized gains (losses) Included in net earnings as a part of: Net investment income (20 ) Net realized gains (90 ) Included in other comprehensive earnings 566 Total net realized and unrealized gains (losses) $ 456 Purchases 15,572 Balance as of December 31, 2020 $ 17,798 Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in net realized gains $ (90 ) Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in other comprehensive earnings $ 566 The amortized cost and estimated fair value of fixed income securities at December 31, 2020, by contractual maturity, are shown as follows: (in thousands) Amortized Cost Fair Value Due in one year or less $ 92,561 $ 93,689 Due after one year through five years 489,451 519,920 Due after five years through 10 years 525,083 575,940 Due after 10 years 357,134 386,633 ABS/CMBS/MBS* 597,238 620,444 Total available-for-sale $ 2,061,467 $ 2,196,626 * Asset-backed, commercial mortgage-backed and mortgage-backed securities Expected maturities may differ from contractual maturities due to call provisions on some existing securities. The amortized cost and fair value of available-for-sale securities at December 31, 2020 and 2019 are presented in the tables below. Amortized cost does not include the $14.9 million and $13.5 million of accrued interest receivable as of December 31, 2020 and 2019, respectively. 2020 Allowance Gross Gross Amortized for Credit Unrealized Unrealized (in thousands) Cost Losses Gains Losses Fair Value U.S. government $ 170,110 $ — $ 13,504 $ (257 ) $ 183,357 U.S. agency 28,902 — 3,970 — 32,872 Non-U.S. government & agency 10,298 — 667 — 10,965 Agency MBS 384,015 — 18,789 (733 ) 402,071 ABS/CMBS/MBS* 213,223 (17 ) 5,580 (413 ) 218,373 Corporate 753,404 (380 ) 64,501 (933 ) 816,592 Municipal 501,515 — 31,099 (218 ) 532,396 Total fixed income $ 2,061,467 $ (397 ) $ 138,110 $ (2,554 ) $ 2,196,626 2019 Allowance Gross Gross Amortized for Credit Unrealized Unrealized (in thousands) Cost Losses Gains Losses Fair Value U.S. government $ 186,699 $ — $ 6,994 $ (32 ) $ 193,661 U.S. agency 36,535 — 2,362 (42 ) 38,855 Non-U.S. government & agency 7,333 — 295 — 7,628 Agency MBS 411,808 — 8,920 (563 ) 420,165 ABS/CMBS/MBS* 222,832 — 2,514 (476 ) 224,870 Corporate 659,640 — 33,245 (818 ) 692,067 Municipal 390,431 — 16,131 (722 ) 405,840 Total fixed income $ 1,915,278 $ — $ 70,461 $ (2,653 ) $ 1,983,086 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities Asset-Backed, Commercial Mortgage-Backed and Mortgage-Backed Securities Ninety-four percent of our collateralized securities carry the highest credit rating by one or more major rating agencies and continue to pay according to contractual terms. For all fixed income securities at an unrealized loss at December 31, 2020, we believe it is probable that we will receive all contractual payments in the form of principal and interest. In addition, we are not required to, nor do we intend to, sell these investments prior to recovering the entire amortized cost basis of each security, which may be at maturity. Municipal Bonds As of December 31, 2020, approximately 43 percent of the municipal fixed income securities in the investment portfolio were general obligations of state and local governments and the remaining 57 percent were revenue based. Eighty-six percent of our municipal fixed income securities were rated AA or better while 99 percent were rated A or better. Allowance for Credit Losses and Unrealized Losses on Fixed Income Securities We adopted ASU 2016-13, Financial Instruments – Credit Losses, on January 1, 2020, which required the recognition of a reversible allowance for credit losses on available-for-sale fixed income securities. See note 1. C. for more information on the adoption of the ASU. Available-for-sale securities in the fixed income portfolio are subjected to several criteria to determine if those securities should be included in the allowance for expected credit loss evaluation, including: • Changes in technology that may impair the earnings potential of the investment, • The discontinuance of a segment of business that may affect future earnings potential, • Reduction of or non-payment of interest and/or principal, • Specific concerns related to the issuer’s industry or geographic area of operation, • Significant or recurring operating losses, poor cash flows and/or deteriorating liquidity ratios and • Downgrades in credit quality by a major rating agency. If changes in interest rates and credit spreads do not reasonably explain the unrealized loss for an available-for-sale security, or if any of the criteria above indicate a potential credit loss, the security is subjected to a discounted cash flow analysis. Inputs into the discounted cash flow analysis include prepayment assumptions for structured securities, default rates and recoverability rates based on credit rating. The allowance for any security is limited to the amount that the fair value is below amortized cost. As of December 31, 2020, the discounted cash flow analysis resulted in an allowance for credit losses on 21 securities. The following table presents changes in the allowance for expected credit losses on available-for-sale securities: (in thousands) 2020 Beginning balance $ — Adoption impact of ASU 2016-13 28 Increase to allowance from securities for which credit losses were not previously recorded 369 Ending balance $ 397 Net realized gains included $0.6 million of losses on fixed income securities for which we no longer had the intent to hold until recovery and the cost basis was written down to fair value. All fixed income securities continue to pay the expected coupon payments. We believe we will recover the amortized cost basis of available-for-sale securities that remain in an unrealized loss position. Prior to the adoption of ASU 2016-13, we conducted reviews of fixed income securities with unrealized losses to evaluate whether an impairment was other-than-temporary. Any credit-related impairment on fixed income securities we did not plan to sell and we were not more likely than not to be required to sell were recognized in net earnings, with the non-credit related impairment recognized in comprehensive earnings. We did not recognize any other-than-temporary impairment losses in earnings on the fixed income portfolio in 2019. As of December 31, 2020, in addition to the securities included in the allowance for credit losses, the fixed income portfolio contained 142 securities with an unrealized loss position for which an allowance for credit losses had not been recorded. The $2.6 million in associated unrealized losses represents 0.1 percent of the fixed income portfolio’s cost basis and 0.1 nrealized losses at the end of 2020 were flat compared to the previous year. The following table illustrates the total value of fixed income securities that were in an unrealized loss position as of December 31, 2020, after factoring in the allowance for credit losses, and December 31, 2019. December 31, 2020 December 31, 2019 12 Mos. 12 Mos. (in thousands) < 12 Mos. & Greater Total < 12 Mos. & Greater Total U.S. government Fair value $ 5,680 $ — $ 5,680 $ 2,505 $ 8,463 $ 10,968 Amortized cost 5,937 — 5,937 2,506 8,494 11,000 Unrealized loss $ (257 ) $ — $ (257 ) $ (1 ) $ (31 ) $ (32 ) U.S. agency Fair value $ — $ — $ — $ 6,794 $ — $ 6,794 Amortized cost — — — 6,836 — 6,836 Unrealized loss $ — $ — $ — $ (42 ) $ — $ (42 ) Agency MBS Fair value $ 43,999 $ — $ 43,999 $ 21,548 $ 41,718 $ 63,266 Amortized cost 44,732 — 44,732 21,664 42,165 63,829 Unrealized loss $ (733 ) $ — $ (733 ) $ (116 ) $ (447 ) $ (563 ) ABS/CMBS/MBS* Fair value $ 32,771 $ 16,161 $ 48,932 $ 74,968 $ 18,036 $ 93,004 Amortized cost 33,094 16,251 49,345 75,332 18,148 93,480 Unrealized loss $ (323 ) $ (90 ) $ (413 ) $ (364 ) $ (112 ) $ (476 ) Corporate Fair value $ 52,655 $ 6,235 $ 58,890 $ 16,478 $ 9,348 $ 25,826 Amortized cost 53,440 6,383 59,823 16,950 9,694 26,644 Unrealized loss $ (785 ) $ (148 ) $ (933 ) $ (472 ) $ (346 ) $ (818 ) Municipal Fair value $ 25,676 $ — $ 25,676 $ 47,018 $ — $ 47,018 Amortized cost 25,894 — 25,894 47,740 — 47,740 Unrealized loss $ (218 ) $ — $ (218 ) $ (722 ) $ — $ (722 ) Total fixed income Fair value $ 160,781 $ 22,396 $ 183,177 $ 169,311 $ 77,565 $ 246,876 Amortized cost 163,097 22,634 185,731 171,028 78,501 249,529 Unrealized loss $ (2,316 ) $ (238 ) $ (2,554 ) $ (1,717 ) $ (936 ) $ (2,653 ) * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities Unrealized Gains and Losses on Equity Securities Net unrealized gains recognized during 2020 on equity securities still held as of December 31, 2020 were $47.9 million. Net unrealized gains recognized during 2019 on equity securities still held as of December 31, 2019 were $92.8 million. Net unrealized losses recognized during 2018 on equity securities still held as of December 31, 2018 were $28.7 million. Other Invested Assets We had $54.2 million of other invested assets at December 31, 2020, compared to $70.4 million at the end of 2019. Other invested assets include investments in low income housing tax credit (LIHTC) partnerships, membership stock in the Federal Home Loan Bank of Chicago (FHLBC), investments in private funds and investments in restricted stock. Our LIHTC investments are carried at amortized cost and our investment in FHLBC stock is carried at cost. Due to the nature of the LIHTC and our membership in the FHLBC, their carrying amounts approximate fair value. The private funds are carried at fair value, using each investments’ net asset value. Restricted stock is carried at quoted market prices, as the restrictions expire within one year. Our LIHTC interests had a balance of $20.3 million at December 31, 2020, compared to $23.3 million at December 31, 2019, and recognized a total tax benefit of $3.5 million during 2020, compared to $2.5 million during 2019 and $2.2 million during 2018. Our unfunded commitment for our LIHTC investments totaled $3.8 million at December 31, 2020 and will be paid out in installments through 2035. Our investments in private funds totaled $32.1 million at December 31, 2020, compared to $46.0 million at December 31, 2019, and we had $8.3 million of associated unfunded commitments at December 31, 2020. Our interest in these investments is generally restricted from being transferred or otherwise redeemed without prior consent by the respective entities. During 2020, one of the private funds transitioned into a publicly traded common stock. Short-term restrictions on the stock, limiting our ability to sell without prior approval, were established and remain in place until the first quarter of 2021 . Our remaining investment in restricted stock was $ million as of December 31, 2020. For our remaining investments in private funds, the timed dissolution of the partnerships would trigger redemption. Restricted Assets As of December 31, 2020, $12.3 million of investments were pledged as collateral with the FHLBC to ensure timely access to the secured lending facility that ownership of the FHLBC stock provides. As of and during the year ended December 31, 2020, there were no outstanding borrowings with the FHLBC. As of December 31, 2020, fixed income securities with a carrying value of $77.7 million were on deposit with regulatory authorities as required by law. |
Policy Acquisition Costs
Policy Acquisition Costs | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Policy Acquisition Costs | 3. POLICY ACQUISITION COSTS Policy acquisition costs deferred and amortized to income for the years ended December 31 are summarized as follows: (in thousands) 2020 2019 2018 Deferred policy acquisition costs (DAC), beginning of year $ 85,044 $ 84,934 $ 77,716 Deferred: Direct commissions $ 200,917 $ 185,164 $ 175,697 Premium taxes 14,783 14,395 12,654 Ceding commissions (42,115 ) (31,140 ) (22,190 ) Net deferred $ 173,585 $ 168,419 $ 166,161 Amortized 170,204 168,309 158,943 DAC, end of year $ 88,425 $ 85,044 $ 84,934 Policy acquisition costs: Amortized to expense - DAC $ 170,204 $ 168,309 $ 158,943 Period costs: Ceding commission - contingent (4,053 ) (3,034 ) (2,241 ) Other underwriting expenses 120,287 123,422 111,036 Total policy acquisition costs $ 286,438 $ 288,697 $ 267,738 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 4. DEBT As of December 31, 2020, outstanding debt balances totaled $149.5 million, net of unamortized discount and debt issuance costs, all of which were our long-term senior notes. On October 2, 2013, we completed a public debt offering, issuing $150.0 million in senior notes maturing September 15, 2023, and paying interest semi-annually at the rate of 4.875 percent. The notes were issued at a discount resulting in proceeds, net of discount and commission, of $148.6 million. The amount of the discount is being charged to income over the life of the debt on an effective yield basis. The estimated fair value for the senior note was $165.4 million as of December 31, 2020. The fair value of our long-term debt is based on the limited observable prices that reflect thinly traded securities and is therefore classified as a Level 2 liability within the fair value hierarchy. We paid $7.3 million of interest on our senior notes in each of the last three years. The average rate on debt was 4.91 percent in 2020, 2019 and 2018. We maintain a revolving line of credit with Bank of Montreal, Chicago Branch, which permits the Company to borrow up to an aggregate principal amount of $60.0 million. This facility was entered into during 2020 and replaced the previous $50.0 million facility with JP Morgan Chase Bank N.A. Under certain conditions, the line may be increased up to an aggregate principal amount of $120.0 million. This facility has a three-year |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2020 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | 5. REINSURANCE In the ordinary course of business, our insurance subsidiaries assume and cede premiums and selected insured risks with other insurance companies, known as reinsurance. A large portion of the reinsurance is put into effect under contracts known as treaties and, in some instances, by negotiation on each individual risk (known as facultative reinsurance). In addition, there are several types of treaties including quota share, excess of loss and catastrophe reinsurance contracts that protect against losses over stipulated amounts arising from any one occurrence or event. The arrangements allow the Company to pursue greater diversification of business and serve to limit the maximum net loss to a single event, such as a catastrophe. Through the quantification of exposed policy limits in each region and the extensive use of computer-assisted modeling techniques, we monitor the concentration of risks exposed to catastrophic events. Through the purchase of reinsurance, we also generally limit our net loss on any individual risk to a maximum of $3.0 million, although retentions can vary. Premiums written and earned along with losses and settlement expenses incurred for the years ended December 31 are summarized as follows: (in thousands) 2020 2019 2018 WRITTEN Direct $ 1,107,303 $ 1,039,955 $ 934,913 Reinsurance assumed 29,129 25,047 48,303 Reinsurance ceded (244,344 ) (204,665 ) (160,041 ) Net $ 892,088 $ 860,337 $ 823,175 EARNED Direct $ 1,062,608 $ 981,121 $ 896,234 Reinsurance assumed 27,651 40,173 41,926 Reinsurance ceded (224,512 ) (182,183 ) (146,794 ) Net $ 865,747 $ 839,111 $ 791,366 LOSSES AND SETTLEMENT EXPENSES INCURRED Direct $ 608,638 $ 521,055 $ 560,421 Reinsurance assumed 18,783 21,951 20,376 Reinsurance ceded (184,537 ) (129,590 ) (152,604 ) Net $ 442,884 $ 413,416 $ 428,193 More than 88 percent of our reinsurance recoverables are due from companies with financial strength ratings of A or better by AM Best and S&P rating services. The following table displays net reinsurance balances recoverable, after consideration of collateral, from our top reinsurers as of December 31, 2020. These reinsurers all have financial strength ratings of A or better by AM Best and S&P’s ratings services. Also shown are the amounts of written premium ceded to these reinsurers during the calendar year 2020. Net Reinsurer Ceded AM Best S&P Exposure as of Percent of Premiums Percent of (dollars in thousands) Rating Rating 12/31/2020 Total Written Total Munich Re / HSB A+, Superior AA-, Very Strong $ 73,414 13.6 % $ 27,133 11.1 % Renaissance Re A+, Superior A+, Strong 41,385 7.7 % 20,314 8.3 % Endurance Re A+, Superior A+, Strong 39,673 7.3 % 13,941 5.7 % Berkley Insurance Co. A+, Superior A+, Strong 32,050 5.9 % 10,628 4.3 % Aspen UK Ltd. A, Excellent A-, Strong 31,768 5.9 % 7,590 3.1 % Scor Re A+, Superior AA-, Very Strong 28,855 5.3 % 14,516 5.9 % Hannover Ruckversicherung A+, Superior AA-, Very Strong 28,504 5.3 % 8,288 3.4 % Swiss Re / Westport Ins. Corp. A+, Superior AA-, Very Strong 26,679 4.9 % 1,556 0.6 % Toa Re A, Excellent A+, Strong 22,231 4.1 % 3,907 1.6 % Liberty Mutual A, Excellent A, Strong 21,142 3.9 % 7,288 3.0 % All other reinsurers* 195,100 36.1 % 129,183 53.0 % Total ceded exposure $ 540,801 100.0 % $ 244,344 100.0 % * All other reinsurance balances recoverable, when considered by individual reinsurer, are less than 2 percent of shareholders’ equity. The allowances for uncollectible amounts on paid and unpaid recoverables were $15.9 million and $8.6 million, respectively, at December 31, 2020. At December 31, 2019, the amounts were $15.7 million and $9.4 million, respectively. Adoption of ASU 2016-13 resulted in a $1.3 million decrease to the allowance for uncollectible amounts on reinsurance recoverables in 2020, while other changes in the allowances were due to changes in the amount of reinsurance balances outstanding, the composition of reinsurers from whom the balances were recoverable and their associated S&P default ratings. No write-offs were applied to the allowances in 2020 and less than $ 0.1 million was recovered . We have no receivables with a due date that extends beyond one year that are not included in our allowance for uncollectible amounts . |
Historical Loss And LAE Develop
Historical Loss And LAE Development | 12 Months Ended |
Dec. 31, 2020 | |
Historical Loss And L A E Development Disclosure [Abstract] | |
Historical Loss And LAE Development | 6. HISTORICAL LOSS AND LAE DEVELOPMENT The following table is a reconciliation of our unpaid losses and settlement expenses (LAE) for the years 2020, 2019 and 2018: (in thousands) 2020 2019 2018 Unpaid losses and LAE at beginning of year: Gross $ 1,574,352 $ 1,461,348 $ 1,271,503 Ceded (384,517 ) (364,999 ) (301,991 ) Net $ 1,189,835 $ 1,096,349 $ 969,512 Adoption impact of ASU 2016-13 on reinsurance balances recoverable $ (1,345 ) $ — $ — Increase (decrease) in incurred losses and LAE: Current accident year $ 543,937 $ 488,700 $ 478,143 Prior accident years (101,053 ) (75,284 ) (49,950 ) Total incurred $ 442,884 $ 413,416 $ 428,193 Loss and LAE payments for claims incurred: Current accident year $ (93,077 ) $ (80,055 ) $ (76,050 ) Prior accident year (231,977 ) (239,875 ) (225,306 ) Total paid $ (325,054 ) $ (319,930 ) $ (301,356 ) Net unpaid losses and LAE at end of year $ 1,306,320 $ 1,189,835 $ 1,096,349 Unpaid losses and LAE at end of year: Gross $ 1,750,049 $ 1,574,352 $ 1,461,348 Ceded (443,729 ) (384,517 ) (364,999 ) Net $ 1,306,320 $ 1,189,835 $ 1,096,349 We adopted ASU 2016-13, Financial Instruments – Credit Losses, on January 1, 2020, which required financial assets, including reinsurance balances recoverable, to be presented at the net amount expected to be collected. We previously maintained an allowance for uncollectible reinsurance balances prior to the adoption of this update. However, in order to comply with the updated requirements, we released $1.3 million of the allowance on uncollectible reinsurance balances upon adoption. The implementation guidance required the cumulative-effect adjustment be made to the beginning balance of retained earnings, rather than through net earnings like historical changes have and ongoing modifications will continue to be recorded. See note 1. C. for more information on the adoption of the ASU. Loss development occurs when our current estimate of ultimate losses, established through our reserve analysis processes, differs from the initial reserve estimate. The recognition of the changes in initial reserve estimates occurred over time as claims were reported, initial case reserves were established, initial reserves were reviewed in light of additional information and ultimate payments were made on the collective set of claims incurred as of that evaluation date. The new information on the ultimate settlement value of claims is continually updated until all claims in a defined set are settled. As a small specialty insurer with a diversified product portfolio, our experience will ordinarily exhibit fluctuations from period to period. While we attempt to identify and react to systematic changes in the loss environment, we also must consider the volume of claim experience directly available to the Company and interpret any particular period’s indications with a realistic technical understanding of the reliability of those observations. The following is information about incurred and paid loss development as of December 31, 2020, net of reinsurance, as well as cumulative claim frequency, the total of IBNR liabilities included within the net incurred loss amounts and average historical claims duration as of December 31, 2020. The loss information has been disaggregated so that only losses that are expected to develop in a similar manner are grouped together. This has resulted in the presentation of loss information for our property and surety segments at the segment level, while information for our casualty segment has been separated in four groupings: primary occurrence, excess occurrence, claims made and transportation. Primary occurrence includes select lines within the professional services product along with general liability, small commercial and other casualty products. Excess occurrence encompasses commercial excess and personal umbrella, while claims made includes select lines within the professional services product, executive products and other casualty. Reported claim counts represent claim events on a specified policy rather than individual claimants and includes claims that did not or are not expected to result in an incurred loss. The information about incurred and paid claims development for the years ended December 31, 2011 to 2019 is presented as unaudited required supplementary information. Casualty - Primary Occurrence (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2020 For the Years Ended December 31, Cumulative Number of Reported AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 Total IBNR Claims 2011 $ 91,139 $ 98,428 $ 94,145 $ 89,622 $ 86,342 $ 83,181 $ 82,193 $ 82,248 $ 81,579 $ 80,905 $ 1,806 5,869 2012 91,807 78,406 65,893 61,072 59,028 59,488 60,328 60,465 60,591 2,078 5,187 2013 80,823 67,297 62,882 60,329 60,162 59,556 59,116 57,106 3,350 4,315 2014 88,092 79,497 71,592 67,237 66,389 66,702 65,636 5,871 4,284 2015 94,835 84,975 83,579 78,675 76,398 75,470 9,699 4,386 2016 101,950 96,753 90,611 85,449 83,374 16,214 4,284 2017 119,741 111,391 102,583 95,513 29,201 4,441 2018 141,513 130,281 125,731 56,310 4,707 2019 146,011 135,209 90,220 4,953 2020 145,171 115,016 3,662 Total $ 924,706 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 2011 $ 5,924 $ 17,124 $ 32,978 $ 48,822 $ 60,769 $ 67,358 $ 71,413 $ 74,814 $ 76,318 $ 76,561 2012 5,897 14,539 23,889 33,822 43,276 47,970 51,611 54,391 55,679 2013 6,334 13,021 22,366 34,786 40,609 45,753 47,783 49,411 2014 11,436 18,771 29,545 40,270 47,343 52,387 55,965 2015 10,157 19,902 33,020 45,056 54,270 58,866 2016 10,142 24,186 35,764 48,042 56,152 2017 13,154 25,933 38,783 52,823 2018 15,066 32,365 48,424 2019 15,698 30,673 2020 17,096 * Presented as unaudited required supplementary information. Total $ 501,650 All outstanding liabilities before 2011, net of reinsurance 9,767 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 432,823 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 12.0 % 13.2 % 15.7 % 17.1 % 12.2 % 7.7 % 5.0 % 3.9 % 2.0 % 0.3 % Casualty - Excess Occurrence (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2020 For the Years Ended December 31, Cumulative Number of Reported AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 Total IBNR Claims 2011 $ 26,272 $ 17,148 $ 17,443 $ 18,641 $ 19,160 $ 20,959 $ 21,295 $ 22,032 $ 21,825 $ 21,657 $ 514 582 2012 29,042 21,558 21,021 21,885 21,231 22,433 23,020 25,286 26,129 826 866 2013 39,984 34,824 26,857 25,425 25,599 24,922 25,496 25,073 1,693 947 2014 50,889 39,095 35,119 32,274 33,372 33,458 35,128 3,318 902 2015 53,672 50,857 47,392 42,840 43,328 42,446 8,724 692 2016 56,341 49,385 37,676 33,125 30,251 13,570 640 2017 62,863 55,868 48,363 44,737 22,078 617 2018 69,362 62,646 54,626 37,085 541 2019 88,078 89,691 63,384 512 2020 107,579 86,608 272 Total $ 477,317 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 2011 $ 2,169 $ 5,145 $ 6,981 $ 8,793 $ 10,772 $ 16,494 $ 17,769 $ 20,214 $ 21,036 $ 21,040 2012 1,315 3,573 8,843 15,380 16,879 17,747 19,310 21,993 22,202 2013 1,060 5,701 10,967 14,545 16,967 17,956 18,524 21,229 2014 1,899 4,006 11,002 18,852 22,541 23,376 26,068 2015 2,048 10,127 19,571 23,184 28,756 31,352 2016 1,068 3,396 7,441 10,054 12,703 2017 17 5,679 9,275 15,441 2018 2,506 5,823 10,801 2019 4,213 19,044 2020 2,901 * Presented as unaudited required supplementary information. Total $ 182,781 All outstanding liabilities before 2011, net of reinsurance 18,291 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 312,827 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 4.5 % 12.1 % 15.3 % 14.4 % 9.5 % 8.4 % 5.4 % 10.8 % 2.3 % 0.0 % Casualty - Claims Made (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2020 For the Years Ended December 31, Cumulative Number of Reported AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 Total IBNR Claims 2011 $ 17,416 $ 17,454 $ 12,260 $ 10,619 $ 8,510 $ 7,720 $ 7,852 $ 11,506 $ 14,031 $ 13,646 $ 160 682 2012 27,576 26,144 20,727 19,590 18,022 17,612 17,569 20,785 22,325 303 803 2013 40,095 41,488 44,054 40,288 38,473 37,959 38,352 37,974 1,448 1,042 2014 53,929 55,386 58,152 55,350 51,554 53,841 53,783 2,542 1,305 2015 55,006 47,831 42,206 39,906 39,653 39,619 4,699 1,337 2016 59,992 67,760 69,493 67,728 64,730 9,996 1,507 2017 60,572 62,450 62,714 57,450 8,836 1,645 2018 66,128 62,416 56,468 26,325 1,391 2019 62,918 61,712 39,891 1,502 2020 60,278 50,149 1,174 Total $ 467,985 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 2011 $ 330 $ 1,949 $ 4,508 $ 5,947 $ 5,637 $ 6,209 $ 6,835 $ 7,132 $ 7,239 $ 10,869 2012 433 4,086 6,898 9,218 10,968 14,378 15,621 16,450 16,892 2013 792 7,073 18,425 26,121 29,678 32,789 34,535 35,476 2014 1,705 9,775 27,923 35,755 40,080 44,127 46,122 2015 2,215 10,738 16,774 20,920 28,795 32,241 2016 2,060 14,558 27,465 39,370 47,999 2017 2,455 11,350 22,728 36,522 2018 1,964 11,965 18,840 2019 1,839 8,123 2020 1,488 * Presented as unaudited required supplementary information. Total $ 254,572 All outstanding liabilities before 2011, net of reinsurance 690 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 214,103 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 3.2 % 16.0 % 20.3 % 15.5 % 9.4 % 8.8 % 4.6 % 2.8 % 1.4 % 26.6 % Casualty - Transportation (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2020 For the Years Ended December 31, Cumulative Number of Reported AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 Total IBNR Claims 2011 $ 22,957 $ 23,479 $ 25,747 $ 25,272 $ 25,431 $ 25,376 $ 25,167 $ 25,614 $ 25,827 $ 26,081 $ 34 2,469 2012 21,452 22,203 22,924 23,511 23,689 23,620 23,305 23,731 23,845 114 2,286 2013 32,742 32,853 32,989 37,673 38,811 39,974 39,309 39,183 219 2,853 2014 38,361 33,015 36,452 38,590 40,202 40,508 41,156 475 3,099 2015 38,561 46,258 47,021 46,395 45,162 45,525 979 3,186 2016 50,430 53,519 54,105 52,277 52,818 2,589 3,941 2017 55,640 53,641 45,017 43,764 3,788 3,636 2018 57,597 54,592 38,719 9,200 3,396 2019 58,297 56,129 23,100 3,296 2020 43,573 20,704 1,533 Total $ 410,793 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 2011 $ 5,295 $ 9,485 $ 14,477 $ 19,443 $ 22,375 $ 23,537 $ 23,941 $ 24,377 $ 25,052 $ 25,791 2012 4,466 8,533 12,394 17,318 20,931 22,566 22,730 23,180 23,181 2013 5,306 11,978 19,761 28,220 33,480 35,923 37,327 37,915 2014 7,125 13,933 19,676 27,457 33,190 38,282 40,006 2015 6,984 20,709 29,554 37,222 39,339 41,345 2016 8,923 18,354 30,354 38,001 43,564 2017 7,979 17,070 24,090 30,260 2018 6,980 12,827 19,216 2019 7,148 15,852 2020 3,986 * Presented as unaudited required supplementary information. Total $ 281,116 All outstanding liabilities before 2011, net of reinsurance 175 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 129,852 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 16.0 % 18.5 % 18.0 % 17.9 % 11.5 % 6.9 % 2.5 % 1.7 % 1.3 % 2.8 % Property (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2020 For the Years Ended December 31, Cumulative Number of Reported AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 Total IBNR Claims 2011 $ 70,246 $ 66,924 $ 64,976 $ 63,724 $ 62,770 $ 62,570 $ 62,456 $ 62,875 $ 62,799 $ 62,754 $ 17 3,028 2012 85,485 80,155 79,181 77,569 79,175 78,125 78,161 78,002 77,924 26 2,640 2013 63,864 62,090 62,173 62,114 61,914 61,834 61,776 61,623 111 2,995 2014 56,587 49,441 48,801 48,761 49,217 49,444 49,479 101 4,561 2015 59,863 56,103 53,958 52,720 53,111 52,781 164 4,075 2016 62,900 55,594 55,384 55,930 55,424 505 3,377 2017 90,803 83,273 84,961 82,671 2,022 2,892 2018 89,091 83,457 79,961 6,172 2,333 2019 71,232 65,189 8,218 2,428 2020 118,247 40,590 2,492 Total $ 706,053 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 2011 $ 27,676 $ 48,756 $ 55,778 $ 59,099 $ 60,272 $ 61,428 $ 61,834 $ 62,729 $ 62,730 $ 62,733 2012 39,074 66,509 72,057 73,705 75,640 76,152 77,159 77,323 77,347 2013 32,208 50,840 57,407 59,259 60,520 61,195 61,325 61,335 2014 30,550 43,380 46,148 46,528 47,799 49,027 49,259 2015 32,184 49,348 50,197 51,290 52,078 52,342 2016 33,134 46,921 51,371 53,006 54,328 2017 41,314 66,818 74,415 78,360 2018 37,048 68,264 72,357 2019 30,703 51,740 2020 43,192 * Presented as unaudited required supplementary information. Total $ 602,993 All outstanding liabilities before 2011, net of reinsurance 323 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 103,383 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 50.9 % 31.6 % 7.3 % 3.0 % 2.1 % 1.3 % 0.7 % 0.6 % 0.0 % 0.0 % Surety (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2020 For the Years Ended December 31, Cumulative Number of Reported AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 Total IBNR Claims 2011 $ 13,842 $ 17,832 $ 17,792 $ 17,321 $ 16,766 $ 16,695 $ 16,480 $ 18,281 $ 18,293 $ 18,252 $ 16 1,681 2012 17,114 11,452 8,667 8,180 7,867 7,471 7,099 7,082 6,985 18 1,479 2013 16,080 7,516 6,170 5,399 5,271 5,231 5,209 5,107 33 1,407 2014 16,450 8,106 5,225 4,427 4,267 4,319 4,266 48 1,351 2015 16,958 12,957 11,113 10,456 9,792 9,521 243 1,231 2016 18,928 11,062 9,351 8,895 8,391 389 1,367 2017 16,127 8,641 8,798 8,116 673 1,724 2018 16,765 7,227 4,564 1,489 1,265 2019 14,785 7,205 4,663 953 2020 19,241 16,483 405 Total $ 91,648 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 2011 $ 8,160 $ 16,932 $ 17,151 $ 17,403 $ 17,212 $ 17,086 $ 17,086 $ 17,013 $ 18,251 $ 18,234 2012 1,883 6,680 6,726 7,416 7,536 7,406 7,065 6,996 6,941 2013 1,116 2,856 4,701 4,911 5,098 5,150 5,128 5,061 2014 722 4,283 4,166 4,059 4,131 4,234 4,214 2015 3,192 6,719 7,695 9,436 9,183 9,186 2016 3,087 5,817 6,299 7,640 8,086 2017 979 2,862 7,062 7,221 2018 1,835 2,588 2,368 2019 336 2,433 2020 835 * Presented as unaudited required supplementary information. Total $ 64,579 All outstanding liabilities before 2011, net of reinsurance (60 ) Liabilities for losses and loss adjustment expenses, net of reinsurance $ 27,009 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 24.2 % 41.4 % 12.3 % 7.0 % 1.4 % 0.2 % -1.4 % -0.9 % 3.0 % -0.1 % The following is a reconciliation of the net incurred and paid loss development tables to the liability for unpaid losses and settlement expenses in the consolidated balance sheet: (in thousands) December 31, 2020 December 31, 2019 Net outstanding liabilities: Casualty - Primary Occurrence $ 432,823 $ 403,910 Casualty - Excess Occurrence 312,827 256,153 Casualty - Claims Made 214,103 217,954 Casualty - Transportation 129,852 139,951 Property 103,383 71,965 Surety 27,009 24,988 Unallocated loss adjustment expenses 54,954 52,275 Allowance for uncollectible reinsurance balances recoverable on unpaid losses and settlement expenses 8,634 9,402 Other 22,735 13,237 Liabilities for unpaid loss and settlement expenses, net of reinsurance $ 1,306,320 $ 1,189,835 Reinsurance recoverable on unpaid claims: Casualty - Primary Occurrence $ 35,202 $ 31,122 Casualty - Excess Occurrence 88,528 98,518 Casualty - Claims Made 223,020 176,936 Casualty - Transportation 53,251 53,724 Property 40,257 21,438 Surety 4,017 11,199 Allowance for uncollectible reinsurance balances recoverable on unpaid losses and settlement expenses (8,634 ) (9,402 ) Other 8,088 982 Total reinsurance balances recoverable on unpaid losses and settlement expenses $ 443,729 $ 384,517 Total gross liability for unpaid loss and settlement expenses $ 1,750,049 $ 1,574,352 DETERMINATION OF IBNR Initial carried IBNR reserves are determined through a reserve estimation process. For most casualty and surety products, this process involves the use of an initial loss and allocated loss adjustment expense (ALAE) ratio that is applied to the earned premium for a given period. Payments and case reserves are subtracted from this initial estimate of ultimate loss and ALAE to determine a carried IBNR reserve. For most property products, the IBNR reserves are determined by IBNR percentages applied to premium earned. The percentages are determined based on historical reporting patterns and are updated periodically. No deductions for paid or case reserves are made. Shortly after natural or man-made catastrophes, we review insured locations exposed to the event and model losses based on our own exposures and industry loss estimates of the event. We also consider our knowledge of frequency and severity from early claim reports to determine an appropriate reserve for the catastrophe. Adjustments to the initial loss ratio by product and segment are made where necessary and reflect updated assumptions regarding loss experience, loss trends, price changes and prevailing risk factors. Actuaries perform a ground-up reserve study of the expected value of the unpaid loss and LAE derived using multiple standard actuarial methodologies on a quarterly basis. Each method produces an estimate of ultimate loss by accident year. We review all of these various estimates and assign weights to each based on the characteristics of the product being reviewed. These estimates are then compared to the carried loss reserves to determine the appropriateness of the current reserve balance. In addition, an emergence analysis is completed quarterly to determine if further adjustments are necessary. Upon completion of our loss and LAE estimation analysis, a review of the resulting variance between the indicated reserves and the carried reserves takes place. Our actuaries make a recommendation to management in regards to booked reserves that reflect their analytical assessment and view of estimation risk. After discussion of these analyses and all relevant risk factors, the Loss Reserve Committee, a panel of management including the lead reserving actuary, chief executive officer, chief operating officer, chief financial officer and other executives, confirms the appropriateness of the reserve balances. Actuarial models base future emergence on historic experience, with adjustments for current trends, and the appropriateness of these assumptions involved more uncertainty as of December 31, 2020. We expect there will be impacts to the timing of loss emergence and ultimate loss ratios for certain coverages we underwrite as a result of the spread of COVID-19 and the related economic shutdown. The industry is experiencing new issues, including the postponement of civil court cases, the extension of various statutes of limitations, changes in settlement trends and a significant reduction in economic activity and insured exposure in some classes. Our recorded reserves include consideration of these factors, but the duration and degree to which these issues persist, along with potential legislative, regulatory or judicial actions, could result in loss reserve deficiencies and reduce earnings in future periods. DEVELOPMENT OF IBNR RESERVES The following table summarizes our prior accident years’ loss reserve development by segment for 2020, 2019 and 2018: (in thousands) 2020 2019 2018 Casualty $ (75,075 ) $ (62,497 ) $ (33,252 ) Property (13,019 ) (4,461 ) (10,813 ) Surety (12,959 ) (8,326 ) (5,885 ) Total $ (101,053 ) $ (75,284 ) $ (49,950 ) A discussion of significant components of reserve development for the three most recent calendar years follows: 2020. We experienced favorable emergence relative to prior years’ reserve estimates in all of our segments during 2020. The casualty segment contributed $75.1 million in favorable development, inclusive of ULAE . Accident years 2017 through 2019 contributed significantly to the favorable development. This was predominantly caused by favorable frequency and severity trends that continued to be better than our long-term expectations. In addition, we believe this to be the result of our underwriters’ ability to select risk as well as an increasing rate environment within many of our casualty sublines. Nearly all of our casualty products contributed to the favorable development. Transportation contributed $19.1 million for the year. Within the primary occurrence grouping, the general liability product contributed $17.9 million to our favorable development. Within the excess occurrence grouping, commercial excess developed favorably by $12.5 million. Within the c laims made grouping, professional services coverages developed favorably by $7.8 million and medical professional liability had $6.1 million of favorable development. The marine product was the primary driver of the favorable development in the property segment. Marine contributed $6.5 million of the $13.0 million total favorable property development, inclusive of ULAE, primarily in accident years 2017 and 2018. Commercial property was favorable by $5.2 million. The surety segment experienced favorable development of $13.0 million, inclusive of ULAE. The majority of the favorable development was from accident year 2019. Contract and commercial surety products were the main contributors with favorable development of $5.9 million and $3.8 million, respectively. 2019. We experienced favorable emergence relative to prior years’ reserve estimates in all of our segments during 2019. The casualty segment contributed $62.5 million in favorable development, inclusive of unallocated loss and adjustment expenses (ULAE) , which is excluded from the incurred loss and loss adjustment expense tables above . Accident years 2017 and 2018 contributed the majority of the favorable development, with earlier years developing favorably in aggregate to a lesser extent. Risk selection by our underwriters continued to provide better results than estimated in our reserving process. Within the primary occurrence grouping, the general liability product contributed $11.8 million to our favorable development. Small commercial products were favorable by $6.3 million. Within the excess occurrence grouping, commercial excess was favorable by $6.8 million and our personal umbrella product developed favorably by $7.8 million. Within the claims made grouping, professional services coverages developed favorably by $10.2 million, which was offset by adverse development of $7.3 million on executive products and $2.3 million on medical professional liability coverages. Transportation experienced favorable development of $16.6 million, primarily on accident years 2016 through 2018. Marine contributed $2.4 million of the $4.5 million total favorable property development, inclusive of ULAE. Accident years 2017 and 2018 contributed to the marine products’ favorable development. Homeowners’ contributed $1.1 million of favorable development with other commercial property insurance and assumed reinsurance products contributing the balance. The surety segment experienced favorable development of $8.3 million, inclusive of ULAE. The majority of the favorable development was from accident year 2018, while earlier accident years developed slightly adversely. The commercial surety product was the main contributor with favorable development of $5.8 million. Contract surety had favorable development of $4.2 million, which offset $1.7 million of adverse development on miscellaneous surety. 2018. We experienced favorable emergence relative to prior years’ reserve estimates in all of our segments during 2018. Development from the casualty segment totaled $33.3 million, inclusive of ULAE . The largest amounts of favorable development came from accident years 2015 through 2017. We continued to experience emergence that was generally better than previously estimated. We attribute the favorable emergence to loss trends in most lines outperforming our long-term expectations. Further, we believe our underwriters’ risk selection contributed to the Company experiencing less loss cost inflation than originally anticipated. The primary occurrence grouping had favorable development of $15.6 million, driven by our general liability product with $6.7 million of favorable development . T he excess occurrence grouping had favorable development of $ 21.4 million, with commercial insureds contributing $ million and personal insureds contributing the remainder . C laims made exposures had adverse development of $ 3.9 million driven by medical errors and omissions coverages . Transportation had $ 0.5 million of favorable development. Our marine product was the predominant driver of the favorable development in the property segment, accounting for $5.0 million of the $10.8 million total favorable development for the segment, inclusive of ULAE. Accident years 2015 through 2017 made the largest contribution. Our excess and surplus lines commercial property product and assumed reinsurance products also contributed $2.0 million and $2.8 million of favorable development, respectively. The surety segment experienced $5.9 million of favorable development, inclusive of ULAE. The majority of the favorable development came from the 2017 accident year, which served to offset the unfavorable development from accident years 2011 and 2016. Commercial surety contributed favorable development of $6.3 million. Miscellaneous surety experienced adverse development totaling $0.8 million. ENVIRONMENTAL, ASBESTOS AND MASS TORT EXPOSURES We are subject to environmental site cleanup, asbestos removal and mass tort claims and exposures through our commercial excess, general liability and discontinued assumed casualty reinsurance lines of business. The majority of the exposure is in the excess layers of our commercial excess and assumed reinsurance books of business. The following table represents paid and unpaid environmental, asbestos and mass tort claims data (including incurred but not reported losses) as of December 31, 2020, 2019 and 2018: (in thousands) 2020 2019 2018 Loss and LAE Payments (Cumulative): Gross $ 139,804 $ 137,485 $ 136,043 Ceded (69,219 ) (68,849 ) (68,638 ) Net $ 70,585 $ 68,636 $ 67,405 Unpaid Losses and LAE at End of Year: Gross $ 22,485 $ 22,616 $ 24,262 Ceded (4,619 ) (5,149 ) (5,373 ) Net $ 17,866 $ 17,467 $ 18,889 Our environmental, asbestos and mass tort exposure is limited, relative to other insurers, as a result of entering the affected liability lines after the insurance industry had already recognized environmental and asbestos exposure as a problem and adopted appropriate coverage exclusions. The majority of our reserves are associated with products that went into runoff at least two decades ago. Some are for assumed reinsurance, some are for excess liability business and some followed from the acquisition of Underwriters Indemnity Company in 1999. During 2020, RLI experienced modest emergence of asbestos, environmental and mass tort losses and we increased our IBNR reserves for these exposures. While our environmental exposure is limited, the ultimate liability for this exposure is difficult to assess because of the extensive and complicated litigation involved in the settlement of claims and evolving legislation on issues such as joint and several liability, retroactive liability and standards of cleanup. Additionally, we participate primarily in the excess layers of coverage, where accurate estimates of ultimate loss are more difficult to derive than for primary coverage. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. INCOME TAXES The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are summarized below. (in thousands) 2020 2019 Deferred tax assets: Tax discounting of unpaid losses and settlement expenses $ 21,096 $ 19,143 Unearned premium offset 19,862 18,755 Deferred compensation 2,829 2,981 Stock option expense 2,749 2,728 Lease liability 3,971 5,140 Other 389 275 Deferred tax assets before allowance $ 50,896 $ 49,022 Less valuation allowance — — Total deferred tax assets $ 50,896 $ 49,022 Deferred tax liabilities: Net unrealized appreciation of securities $ 77,639 $ 56,532 Deferred policy acquisition costs 18,569 17,859 Lease asset 3,402 4,690 Discounting of unpaid losses and settlement expenses - Tax Cuts and Jobs Act (TCJA) implementation offset 3,181 3,817 Fixed assets 3,439 3,008 Intangible assets 1,558 1,634 Undistributed earnings of unconsolidated investees 21,813 17,673 Other 1,530 536 Total deferred tax liabilities $ 131,131 $ 105,749 Net deferred tax liability $ (80,235 ) $ (56,727 ) Income tax expense (benefit) attributable to income from operations for the years ended December 31, 2020, 2019 and 2018, differed from the amounts computed by applying the U.S. federal tax rate of 21 percent to pretax income from continuing operations as demonstrated in the following table: (in thousands) 2020 2019 2018 Provision for income taxes at the statutory federal tax rates $ 39,867 21.0 % $ 48,874 21.0 % $ 14,192 21.0 % Increase (reduction) in taxes resulting from: Enactment of TCJA — — % — — % (2,268 ) (3.4 ) % Excess tax benefit on share-based compensation (3,537 ) (1.8 ) % (3,958 ) (1.7 ) % (4,533 ) (6.7 ) % Tax-exempt interest income (1,293 ) (0.7 ) % (1,238 ) (0.5 ) % (1,795 ) (2.7 ) % Dividends received deduction (883 ) (0.5 ) % (823 ) (0.4 ) % (775 ) (1.1 ) % Investment tax credit (2,435 ) (1.3 ) % — — % — — % ESOP dividends paid deduction (1,083 ) (0.6 ) % (1,122 ) (0.5 ) % (1,184 ) (1.8 ) % Unconsolidated investee dividends (479 ) (0.2 ) % (1,802 ) (0.8 ) % — — % Nondeductible expenses 1,878 1.0 % 1,649 0.7 % 389 0.6 % Other items, net 715 0.4 % (488 ) (0.1 ) % (624 ) (0.9 ) % Total $ 32,750 17.3 % $ 41,092 17.7 % $ 3,402 5.0 % Effective rates are dependent upon components of pretax earnings and the related tax effects. The effective rate was lower in 2020 due to investment tax credits recognized using the flow-through method of accounting, whereby income taxes payable and income tax expense were reduced. Additionally, lower levels of pretax earnings caused tax-favored adjustments to be larger on a percentage basis in 2020 compared to 2019. The effective rate was significantly lower in 2018 as a result of the impact of tax reform and lower pretax income. Except for two aspects, the accounting for the tax effects of the enactment of the TCJA were completed as of December 31, 2017. The first provisional item recorded in 2017 was related to an expected disallowance of deductions for certain performance-based compensation, including bonuses and stock options. At the time of enactment, there was a lack of clarity on whether some amounts could be grandfathered in as deductible. The Internal Revenue Service (IRS) and Treasury Department provided additional guidance and we were able to finalize the accounting in 2018 by recording a $ 2.3 million deferred tax benefit to restore the deferred tax assets related to those performance-based compensation amounts. The second provisional item related to discount factors on loss reserves that the IRS had not yet published. The IRS published the factors in the fourth quarter of 2018 and we were able to complete the accounting for the effects of the enactment of the TCJA. While there was no net impact to the deferred tax amount that was recorded at December 31, 2017, we implemented the new discounting methodology and will recognize the adjustment ratably over the allowed eight-year period beginning in 2018. Our net earnings include equity in earnings of unconsolidated investees, Maui Jim and Prime. The investees do not have a policy or pattern of paying dividends. As a result, we record a deferred tax liability on the earnings at the corporate capital gains rate of 21 percent in anticipation of recovering our investments through means other than through the receipt of dividends, such as a sale. We received a $4.7 million dividend from Prime in 2020 and recognized a $0.5 million tax benefit from applying the lower tax rate applicable to affiliated dividends paid to insurance companies (10.8 percent in 2020), as compared to the corporate capital gains rate on which the deferred tax liabilities were based. In 2019, we received a $13.2 million dividend from Maui Jim and recognized a $1.8 million tax benefit from applying the lower tax rate applicable to affiliated dividends paid to non-insurance companies (7.4 percent in 2019), as compared to the corporate capital gains rate on which the deferred tax liabilities were based. Standing alone, the dividends resulted in a 0.2 percent and 0.8 percent reduction to the 2020 and 2019 effective tax rates, respectively. As no dividends were declared from unconsolidated investees in 2018, there was no impact to the 2018 effective tax rate. Dividends paid to our Employee Stock Ownership Plan (ESOP) also result in a tax deduction. Dividends paid to the ESOP in 2020, 2019 and 2018 resulted in tax benefits of $1.1 million, $1.1 million and $1.2 million, respectively. These tax benefits reduced the effective tax rate for 2020, 2019 and 2018 by 0.6 percent, 0.5 percent and 1.8 percent and, respectively. We have recorded our deferred tax assets and liabilities using the statutory federal tax rate of 21 percent. We believe it is more likely than not that all deferred tax assets will be recovered, given the carry back availability as well as the results of future operations, which will generate sufficient taxable income to realize the deferred tax asset. In addition, we believe when these deferred items reverse in future years, our taxable income will be taxed at an effective rate of 21 percent. Federal and state income taxes paid in 2020, 2019 and 2018 amounted to $23.7 million, $25.6 million and $16.4 million, respectively. Although we are not currently under audit by the IRS, tax years 2016 through 2020 remain open and are subject to examination. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefits | 8. EMPLOYEE BENEFITS EMPLOYEE STOCK OWNERSHIP, 401(K) AND INCENTIVE PLANS We maintain ESOP, 401(k) and incentive plans covering executives, managers and associates. Funding of these plans is primarily dependent upon reaching predetermined levels of operating return on equity, combined ratio and Market Value Potential (MVP). MVP is a compensation model that measures components of comprehensive earnings against a minimum required return on our capital. Bonuses are earned as we generate earnings in excess of this required return. While some management incentive plans may be affected somewhat by other performance factors, the larger influence of corporate performance ensures that the interests of our executives, managers and associates align with those of our shareholders. Our 401(k) plan allows voluntary contributions by employees and permits ESOP diversification transfers for employees meeting certain age and service requirements. We provide a basic 401(k) contribution of 3 percent of eligible compensation. Participants are 100 percent vested in both voluntary and basic contributions. Additionally, an annual discretionary profit-sharing contribution may be made to the ESOP and 401(k), subject to the achievement of certain overall financial goals and board approval. Profit-sharing contributions vest after three years of plan service. Our ESOP and 401(k) cover all employees meeting eligibility requirements. ESOP and 401(k) profit-sharing contributions are approved annually by our board of directors and are expensed in the year earned. ESOP and 401(k)-related expenses (basic and profit-sharing) were $14.4 million, $15.7 million and $8.8 million for 2020, 2019 and 2018, respectively. During 2020, the ESOP purchased 94,194 shares of RLI Corp. stock on the open market at an average price of $82.67 ($7.8 million) relating to the contribution for plan year 2019. Shares held by the ESOP as of December 31, 2020, totaled 2,612,357 and are treated as outstanding in computing our earnings per share. During 2019, the ESOP purchased 60,768 shares of RLI Corp. stock on the open market at an average price of $69.99 ($4.3 million) relating to the contribution for plan year 2018. During 2018, the ESOP purchased 98,717 shares of RLI Corp. stock on the open market at an average price of $62.80 ($6.2 million) relating to the contribution for plan year 2017. The above-mentioned ESOP purchases relate only to our annual contributions to the plan and do not include amounts or shares resulting from the reinvestment of dividends. Annual awards are provided to executives, managers and associates through our incentive plans, provided certain strategic and financial goals are met. Annual expenses for these incentive plans totaled $26.6 million, $30.1 million and $11.9 million for 2020, 2019 and 2018, respectively. DEFERRED COMPENSATION We maintain rabbi trusts for deferred compensation plans for directors, key employees and executive officers through which contributions can be invested in RLI Corp. stock or mutual funds. The employer stock in the plan cannot be diversified and is accounted for as equity, in a manner consistent with the accounting for treasury stock. At December 31, 2020, the trusts’ assets were valued at $49.3 million. STOCK PLANS Our RLI Corp. Long-Term Incentive Plan (2010 LTIP) was in place from 2010 to 2015. The 2010 LTIP provided for equity-based compensation, including stock options, up to a maximum of In 2015, our shareholders approved the 2015 RLI Corp. Long-Term Incentive Plan (2015 LTIP), which provides for equity-based compensation and replaced the 2010 LTIP. In conjunction with the adoption of the 2015 LTIP, effective May 7, 2015, options were no longer granted under the 2010 LTIP. Awards under the 2015 LTIP may be in the form of restricted stock, restricted stock units, stock options (non-qualified only), stock appreciation rights, performance units as well as other stock-based awards. Eligibility under the 2015 LTIP is limited to employees and directors of the Company or any affiliate. The granting of awards under the 2015 LTIP is solely at the discretion of the board of directors. The maximum number of shares of common stock available for distribution under the 2015 LTIP is 4,000,000 shares (subject to adjustment for changes in our capitalization and other events). Since the plan’s approval in 2015, we have granted 2,623,369 awards under the 2015 LTIP, including 340,909 in 2020. Compensation expense is based on the probable number of awards expected to vest. The total compensation expense related to equity awards was $5.4 million, $6.0 million and $5.5 million for and the total income tax benefit was Stock Options Under the 2015 LTIP, as under the 2010 LTIP, we grant stock options for shares with an exercise price equal to the fair market value of the shares at the date of grant (subject to adjustments for changes in our capitalization, including special dividends and other events as set forth in such plans). Options generally vest and become exercisable ratably over a five-year For most participants, the requisite service period and vesting period will be the same. For participants who are retirement eligible, defined by the plan as those individuals whose age and years of service equals 75, the requisite service period is deemed to be met and options are immediately expensed on the date of grant. For participants who will become retirement eligible during the vesting period, the requisite service period over which expense is recognized is the period between the grant date and the attainment of retirement eligibility. Shares issued upon option exercise are newly issued shares. The following table summarize option activity in 2020: Weighted Aggregate Weighted Average Intrinsic Average Remaining Value Options Exercise Price Contractual Life (in 000’s) Outstanding as of January 1, 2020 1,667,290 $ 62.52 Granted 322,479 92.86 Exercised (351,025 ) 52.34 Cancelled or forfeited (6,410 ) 73.42 Outstanding as of December 31, 2020 1,632,334 $ 70.67 5.16 $ 54,657 Exercisable at December 31, 2020 658,290 $ 60.35 3.74 $ 28,834 The intrinsic value, which is the difference between the fair value and the exercise price, of options exercised was $15.5 million, $20.0 million and $24.3 million during 2020, 2019 and 2018, respectively. The fair value of options were estimated using a Black-Scholes based option pricing model with the following weighted-average grant-date assumptions and weighted-average fair values as of December 31: 2020 2019 2018 Weighted-average fair value of grants $ 13.24 $ 13.49 $ 10.58 Risk-free interest rates 0.39 % 2.26 % 2.72 % Dividend yield 2.30 % 2.69 % 2.98 % Expected volatility 22.67 % 22.71 % 22.87 % Expected option life 4.96 years 4.96 years 5.07 years The risk-free rate was determined based on U.S. treasury yields that most closely approximated the option’s expected life. The dividend yield was determined based on the average annualized quarterly dividends paid during the most recent five-year period and incorporated a consideration for special dividends paid in recent history. The expected volatility was calculated based on the median of the rolling volatilities for the expected life of the options. The expected option life was determined based on historical exercise behavior and the assumption that all outstanding options will be exercised at the midpoint of the current date and remaining contractual term, adjusted for the demographics of the current year’s grant. Restricted Stock Units In addition to stock options, restricted stock units (RSUs) are granted with a value equal to the closing stock price of the Company’s stock on the dates the units are granted. For employees, these units generally have a three-year Weighted Average Grant Date RSUs Fair Value Nonvested at January 1, 2020 49,733 $ 70.07 Granted 18,430 93.24 Reinvested 920 96.14 Vested (20,837 ) 65.24 Forfeited (588 ) 79.54 Nonvested at December 31, 2020 47,658 $ 81.53 |
Statutory Information and Divid
Statutory Information and Dividend Restrictions | 12 Months Ended |
Dec. 31, 2020 | |
Statutory Information And Dividend Restrictions Disclosure [Abstract] | |
STATUTORY INFORMATION AND DIVIDEND RESTRICTIONS | 9. STATUTORY INFORMATION AND DIVIDEND RESTRICTIONS The statutory financial statements of our three insurance companies are presented on the basis of accounting practices prescribed or permitted by the Illinois Department of Insurance (IDOI), which has adopted the NAIC’s statutory accounting principles (SAP). We do not use any permitted SAP that differ from NAIC prescribed SAP. In converting from SAP to GAAP, typical adjustments include deferral of policy acquisition costs, the inclusion of statutory non-admitted assets and the inclusion of net unrealized holding gains or losses in shareholders’ equity relating to fixed income securities. The NAIC has risk-based capital (RBC) requirements for insurance companies to calculate and report information under a risk-based formula, which measures statutory capital and surplus needs based upon a regulatory definition of risk relative to the company’s balance sheet and mix of products. As of December 31, 2020, each of our insurance subsidiaries had an RBC amount in excess of the authorized control level RBC, as defined by the NAIC. RLI Insurance Company (RLI Ins.), our principal insurance company subsidiary, had an authorized control level RBC of $203.9 million, $191.0 million and $170.9 million as of December 31, 2020, 2019 and 2018, respectively, compared to actual statutory capital and surplus of $1.1 billion, $1.0 billion and $829.8 million, respectively, for these same periods. Year-end statutory surplus for 2020 presented in the table below includes $238.0 million of RLI Corp. stock (cost basis of $64.6 million) held by Mt. Hawley Insurance Company, compared to $190.9 million and $132.8 million in 2019 and 2018, respectively. The Securities Valuation Office provides specific guidance for valuing this investment, which is eliminated in our GAAP consolidated financial statements. The following table includes selected information for our insurance subsidiaries for the year ended and as of December 31: (in thousands) 2020 2019 2018 Consolidated net income, statutory basis $ 120,329 $ 129,625 $ 135,791 Consolidated surplus, statutory basis $ 1,121,592 $ 1,029,671 $ 829,775 As discussed in note 1.A., our three insurance companies are subsidiaries of RLI Corp., with RLI Ins. as the first-level, or principal, insurance subsidiary. At the holding company (RLI Corp.) level, we rely largely on dividends from our insurance company subsidiaries to meet our obligations for paying principal and interest on outstanding debt, corporate expenses and dividends to RLI Corp. shareholders. As discussed further below, dividend payments to RLI Corp. from our principal insurance subsidiary are restricted by state insurance laws as to the amount that may be paid without prior approval of the insurance regulatory authorities of Illinois. As a result, we may not be able to receive dividends from such subsidiary at times and in amounts necessary to pay desired dividends to RLI Corp. shareholders. On a GAAP basis, as of December 31, 2020, our holding company had $1.1 billion in equity. This includes amounts related to the equity of our insurance subsidiaries, which is subject to regulatory restrictions under state insurance laws. The unrestricted Ordinary dividends, which may be paid by our principal insurance subsidiary without prior regulatory approval, are subject to certain limitations based upon statutory income, surplus and earned surplus. The maximum ordinary dividend distribution from our principal insurance subsidiary in a rolling 12-month period is limited by Illinois law to the greater of 10 percent of RLI Ins. policyholder surplus, as of December 31 of the preceding year, or the net income of RLI Ins. for the 12-month period ending December 31 of the preceding year. Ordinary dividends are further restricted by the requirement that they be paid from earned surplus. In 2020, 2019 and 2018, our principal insurance subsidiary paid ordinary dividends totaling $110.0 million, $59.0 million and $13.0 million, respectively, to RLI Corp. Any dividend distribution in excess of the ordinary dividend limits is deemed extraordinary and requires prior approval from the IDOI. In 2018, our principal insurance subsidiary sought and received regulatory approval prior to the payment of extraordinary dividends totaling $110.0 million. No extraordinary dividends were paid in 2020 or 2019. As of December 31, 2020, $25.3 million of the net assets of our principal insurance subsidiary are not restricted and could be distributed to RLI Corp. as ordinary dividends. Because the limitations are based upon a rolling 12-month period, the amount and impact of these restrictions vary over time. In addition to restrictions from our principal subsidiary’s insurance regulator, we also consider internal models and how capital adequacy is defined by our rating agencies in determining amounts available for distribution. |
Commitments And Contingent Liab
Commitments And Contingent Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments And Contingent Liabilities | 10. COMMITMENTS AND CONTINGENT LIABILITIES LITIGATION We are party to numerous claims, loss and litigation matters that arise in the normal course of our business. Many of such claims, loss or litigation matters involve claims under policies that we underwrite as an insurer. We believe that the resolution of these claims and losses is not reasonably likely to have a material adverse effect on our financial condition, results of operations or cash flows. From time to time, we are also involved in various other legal proceedings and litigation unrelated to our insurance business that arise in the ordinary course of business operations. Management believes that any liabilities that may arise as a result of these legal matters is not reasonably likely to have a material adverse effect on our financial condition, results of operations or cash flows. COMMITMENTS As of December 31, 2020, we had $23.1 million of unfunded commitments related to our investments in private funds, low income housing tax credit investments and equity method investees. See note 2 for more information on our investments in private funds and low income housing tax credits. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | 11. LEASES Right-of-use (ROU) assets are included in the other assets line item and lease liabilities are included in the other liabilities line item of the consolidated balance sheet. We determine if a contract contains a lease at inception and recognize operating lease ROU assets and operating lease liabilities based on the present value of the future minimum lease payments at the commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Lease agreements may include options to extend or terminate. The options are exercised at our discretion and are included in operating lease liabilities if it is reasonably certain the option will be exercised. Lease agreements have lease and non-lease components, which are accounted for as a single lease component. Operating lease cost for future minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease cost is expensed in the period in which the obligation is incurred. Sublease income is recognized on a straight-line basis over the sublease term. The Company’s operating lease obligations are for branch office facilities. Expenses associated with leases totaled $6.9 million in 2018. The components of lease expense and other lease information as of and during the years ended December 31, 2020 and 2019 are as follows: (in thousands) 2020 2019 Operating lease cost $ 5,504 $ 5,772 Variable lease cost 1,346 1,850 Sublease income (262 ) — Total lease cost $ 6,588 $ 7,622 Cash paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases $ 5,963 $ 5,711 ROU assets obtained in exchange for new operating lease liabilities $ 81 $ 1,388 Reduction to ROU assets resulting from reduction to lease liabilities $ 18 $ 1,279 Other non-cash reductions to ROU assets $ 1,192 $ — (in thousands) 2020 2019 Operating lease ROU assets $ 16,200 $ 22,335 Operating lease liabilities $ 19,072 $ 24,475 Weighted-average remaining lease term - operating leases 3.87 years 4.69 years Weighted-average discount rate - operating leases 2.32 % 2.33 % Future minimum lease payments under non-cancellable leases as of December 31, 2020 were as follows: (in thousands) 2020 2021 $ 5,992 2022 5,915 2023 4,424 2024 2,334 2025 802 Thereafter 563 Total future minimum lease payments $ 20,030 Less imputed interest (958 ) Total operating lease liability $ 19,072 |
Operating Segment Information
Operating Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Operating Segment Information | 12. OPERATING SEGMENT INFORMATION The segments of our insurance operations include casualty, property and surety. The casualty portion of our business consists largely of commercial excess, personal umbrella, general liability, transportation and executive products coverages, as well as package business and other specialty coverages, such as professional liability and workers’ compensation for office-based professionals. We also assume a limited amount of hard-to-place risks through a quota share reinsurance agreement. We provided medical and healthcare professional liability coverage in the excess and surplus market, but exited these businesses on a runoff basis in 2019. The casualty business is subject to the risk of estimating losses and related loss reserves because the ultimate settlement of a casualty claim may take several years to fully develop. The casualty segment is also subject to inflation risk and may be affected by evolving legislation and court decisions that define the extent of coverage and the amount of compensation due for injuries or losses. Our property segment is comprised primarily of commercial fire, earthquake, difference in conditions and marine coverages. We also offer select personal lines policies, including homeowners’ coverages. Property insurance results are subject to the variability introduced by perils such as earthquakes, fires and hurricanes. Our major catastrophe exposure is to losses caused by earthquakes, primarily on the West Coast. Our second largest catastrophe exposure is to losses caused by wind storms to commercial properties throughout the Gulf and East Coast, as well as to homes we insure in Hawaii. We limit our net aggregate exposure to a catastrophic event by minimizing the total policy limits written in a particular region, purchasing reinsurance and maintaining policy terms and conditions throughout market cycles. We also use computer-assisted modeling techniques to provide estimates that help the Company carefully manage the concentration of risks exposed to catastrophic events. The surety segment specializes in writing small to large-sized commercial and contract surety coverages, including payment and performance bonds. We also offer miscellaneous bonds including license and permit, notary and court bonds. Often, our surety coverages involve a statutory requirement for bonds. While these bonds typically maintain a relatively low loss ratio, losses may fluctuate due to adverse economic conditions affecting the financial viability of our insureds. The contract surety product guarantees the construction work of a commercial contractor for a specific project. Generally, losses occur due to the deterioration of a contractor’s financial condition. This line has historically produced marginally higher loss ratios than other surety lines during economic downturns. Net investment income consists of the interest and dividend income streams from our investments in fixed income and equity securities. Interest and general corporate expenses include the cost of debt, other director and shareholder relations costs and other compensation-related expenses incurred for the benefit of the corporation, but not attributable to the operations of our insurance segments. Investee earnings represent our share in Maui Jim and Prime earnings. We own 40 percent of Maui Jim, a privately-held company which operates in the sunglass and optical goods industries, and 23 percent of Prime Holdings Insurance Services, Inc., a privately-held insurance company which specializes in hard-to-place risks. Our investment in Maui Jim, which is carried at the holding company, is unrelated to our core insurance operations. The following table summarizes our segment data based on the internal structure and reporting of information as it is used by management. The net earnings of each segment are before taxes and include revenues (if applicable), direct product or segment costs (such as commissions and claims costs), as well as allocated support costs from various support departments. Assets are not managed at the segment level and therefore are not allocated to segments. REVENUES (in thousands) 2020 2019 2018 Casualty $ 569,521 $ 558,458 $ 523,472 Property 183,720 164,022 149,261 Surety 112,506 116,631 118,633 Net premiums earned $ 865,747 $ 839,111 $ 791,366 Net investment income 67,893 68,870 62,085 Net realized gains 17,885 17,520 63,407 Net unrealized gains (losses) on equity securities 32,101 78,090 (98,735 ) Total $ 983,626 $ 1,003,591 $ 818,123 INSURANCE EXPENSES (in thousands) 2020 2019 2018 Loss and settlement expenses: Casualty $ 322,099 $ 330,156 $ 329,763 Property 111,356 73,614 83,822 Surety 9,429 9,646 14,608 Total loss and settlement expenses $ 442,884 $ 413,416 $ 428,193 Policy acquisition costs: Casualty $ 162,058 $ 166,499 $ 151,007 Property 59,926 55,986 51,830 Surety 64,454 66,212 64,901 Total policy acquisition costs $ 286,438 $ 288,697 $ 267,738 Other insurance expenses: Casualty $ 40,937 $ 41,202 $ 31,562 Property 15,620 16,279 12,725 Surety 10,271 11,949 9,516 Total other insurance expenses $ 66,828 $ 69,430 $ 53,803 Total $ 796,150 $ 771,543 $ 749,734 NET EARNINGS (in thousands) 2020 2019 2018 Casualty $ 44,427 $ 20,601 $ 11,140 Property (3,182 ) 18,143 884 Surety 28,352 28,824 29,608 Net underwriting income $ 69,597 $ 67,568 $ 41,632 Net investment income 67,893 68,870 62,085 Net realized gains 17,885 17,520 63,407 Net unrealized gains (losses) on equity securities 32,101 78,090 (98,735 ) Interest on debt (7,603 ) (7,588 ) (7,437 ) General corporate expense (10,265 ) (12,686 ) (9,427 ) Equity in earnings of unconsolidated investees 20,233 20,960 16,056 Total earnings before incomes taxes $ 189,841 $ 232,734 $ 67,581 Income tax expense 32,750 41,092 3,402 Net earnings $ 157,091 $ 191,642 $ 64,179 The following table further summarizes revenues by major product type within each segment: NET PREMIUMS EARNED Year ended December 31, (in thousands) 2020 2019 2018 CASUALTY Commercial excess and personal umbrella $ 178,214 $ 140,483 $ 124,350 General liability 91,653 98,880 93,928 Professional services 85,196 81,329 79,951 Commercial transportation 64,624 83,213 81,053 Small commercial 63,357 55,701 51,519 Executive products 26,509 27,088 21,326 Other casualty 59,968 71,764 71,345 Total $ 569,521 $ 558,458 $ 523,472 PROPERTY Marine $ 81,852 $ 74,887 $ 59,795 Commercial property 79,406 68,310 71,501 Specialty personal 19,596 19,316 16,901 Other property 2,866 1,509 1,064 Total $ 183,720 $ 164,022 $ 149,261 SURETY Commercial $ 42,872 $ 43,553 $ 43,469 Miscellaneous 42,292 44,721 46,968 Contract 27,342 28,357 28,196 Total $ 112,506 $ 116,631 $ 118,633 Grand total $ 865,747 $ 839,111 $ 791,366 |
Schedule I-Summary Of Investmen
Schedule I-Summary Of Investments-Other than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
Summary Of Investments Other Than Investments In Related Parties [Abstract] | |
Schedule I - Summary Of Investments - Other than Investments in Related Parties | RLI CORP. AND SUBSIDIARIES SCHEDULE I—SUMMARY OF INVESTMENTS—OTHER THAN INVESTMENTS IN RELATED PARTIES December 31, 2020 Column A Column B Column C Column D Amount at (in thousands) which shown in Type of Investment Cost (1) Fair Value the balance sheet Fixed maturities: Bonds: Available-for-sale: U.S. government $ 170,110 $ 183,357 $ 183,357 U.S. agency 28,902 32,872 32,872 Non-U.S. government & agency 10,298 10,965 10,965 Agency MBS 384,015 402,071 402,071 ABS/CMBS/MBS* 213,223 218,373 218,373 Corporate 753,404 816,592 816,592 Municipal 501,515 532,396 532,396 Total available-for-sale $ 2,061,467 $ 2,196,626 $ 2,196,626 Total fixed maturities $ 2,061,467 $ 2,196,626 $ 2,196,626 Equity securities: Common stock: Ind Misc and all other $ 156,941 $ 257,154 $ 257,154 ETFs (Ind/misc) 136,249 266,852 266,852 Total equity securities $ 293,190 $ 524,006 $ 524,006 Cash and short-term investments 62,217 62,217 62,217 Other invested assets 51,941 54,232 54,232 Total investments and cash $ 2,468,815 $ 2,837,081 $ 2,837,081 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities Note: See notes 1E and 2 of Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 93 of this report. (1) Original cost of equity securities and, as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts. |
Schedule II -Condensed Financia
Schedule II -Condensed Financial Information of Registrant (Parent Company) | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Schedule II -Condensed Financial Information of Registrant (Parent Company) | RLI CORP. AND SUBSIDIARIES SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY) CONDENSED BALANCE SHEETS December 31, (in thousands, except share data) 2020 2019 ASSETS Cash $ 381 $ 350 Investments in subsidiaries 1,148,342 1,034,679 Investments in unconsolidated investee 90,893 79,597 Fixed income: Available-for-sale, at fair value 64,211 45,538 (amortized cost of $60,657 and allowance for credit losses of $0 in 2020) (amortized cost of $42,747 and allowance for credit losses of $0 in 2019) Property and equipment, at cost, net of accumulated depreciation of $1,629 in 2020 and $1,562 in 2019 1,779 1,846 Income taxes receivable - current 1,500 842 Other assets 895 400 TOTAL ASSETS $ 1,308,001 $ 1,163,252 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES Accounts payable, affiliates $ 2,556 $ 1,310 Income taxes - deferred 16,988 14,578 Bonds payable, long-term debt 149,489 149,302 Interest payable, long-term debt 2,153 2,153 Other liabilities 837 521 TOTAL LIABILITIES $ 172,023 $ 167,864 SHAREHOLDERS' EQUITY Common stock ($0.01 par value) (Shares authorized - 200,000,000 in 2020 and 100,000,000 in 2019) (68,072,794 shares issued and 45,142,580 shares outstanding in 2020) (67,799,229 shares issued and 44,869,015 shares outstanding in 2019) $ 681 $ 678 Paid-in capital 335,365 321,190 Accumulated other comprehensive earnings 108,714 52,473 Retained earnings 1,084,217 1,014,046 Deferred compensation 8,292 7,980 Treasury stock, at cost (22,930,214 shares in 2020 and 2019) (401,291 ) (400,979 ) TOTAL SHAREHOLDERS’ EQUITY $ 1,135,978 $ 995,388 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,308,001 $ 1,163,252 See Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 93 of this report. RLI CORP. AND SUBSIDIARIES SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)—(continued) CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS Years ended December 31, (in thousands) 2020 2019 2018 Net investment income $ 1,412 $ 1,656 $ 648 Net realized gains (losses) 501 463 (142 ) Equity in earnings of unconsolidated investee 10,368 13,592 12,471 Selling, general and administrative expenses (10,265 ) (12,686 ) (9,427 ) Interest expense on debt (7,603 ) (7,588 ) (7,437 ) Loss before income taxes $ (5,587 ) $ (4,563 ) $ (3,887 ) Income tax benefit (2,885 ) (4,989 ) (2,359 ) Net earnings (loss) before equity in net earnings of subsidiaries $ (2,702 ) $ 426 $ (1,528 ) Equity in net earnings of subsidiaries 159,793 191,216 65,707 Net earnings $ 157,091 $ 191,642 $ 64,179 Other comprehensive earnings (loss), net of tax Unrealized gains (losses) on securities: Unrealized holding gains arising during the period $ 994 $ 1,727 $ 710 Less: reclassification adjustment for (gains) losses included in net earnings (390 ) (365 ) 112 Other comprehensive earnings - parent only $ 604 $ 1,362 $ 822 Equity in other comprehensive earnings (loss) of subsidiaries/investees 55,615 65,683 (34,819 ) Other comprehensive earnings (loss) $ 56,219 $ 67,045 $ (33,997 ) Comprehensive earnings $ 213,310 $ 258,687 $ 30,182 See Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 93 of this report. RLI CORP. AND SUBSIDIARIES SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)—(continued) CONDENSED STATEMENTS OF CASH FLOWS Years ended December 31, (in thousands) 2020 2019 2018 Cash flows from operating activities Earnings (loss) before equity in net earnings of subsidiaries $ (2,702 ) $ 426 $ (1,528 ) Adjustments to reconcile net losses to net cash provided by (used in) operating activities: Net realized (gains) losses (501 ) (463 ) 142 Depreciation 67 68 68 Other items, net 2,270 2,487 (471 ) Change in: Affiliate balances receivable/payable 1,246 1,180 1,187 Federal income taxes 1,399 (1,673 ) 3,430 Changes in investment in unconsolidated investee: Undistributed earnings (10,368 ) (13,592 ) (12,471 ) Dividends received — 13,200 9,900 Net cash provided by (used in) operating activities $ (8,589 ) $ 1,633 $ 257 Cash flows from investing activities Purchase of: Fixed income, available-for-sale $ (24,950 ) $ (2,507 ) $ (73,812 ) Other (346 ) — — Sale of: Fixed income, available-for-sale 3,767 14,273 12,056 Call or maturity of: Fixed income, available-for-sale 3,492 29,501 75,662 Net proceeds from sale (purchase) of short-term investments — — 70 Cash dividends received-subsidiaries 110,000 34,003 73,363 Net cash provided by investing activities $ 91,963 $ 75,270 $ 87,339 Cash flows from financing activities Proceeds from stock option exercises $ 8,648 $ 9,490 $ 6,076 Cash dividends paid (95,793 ) (93,315 ) (90,662 ) Other 3,802 4,058 — Net cash used in financing activities $ (83,343 ) $ (79,767 ) $ (84,586 ) Net increase (decrease) in cash $ 31 $ (2,864 ) $ 3,010 Cash at beginning of year 350 3,214 204 Cash at end of year $ 381 $ 350 $ 3,214 Interest paid on outstanding debt amounted to $7.3 million for 2020, 2019 and 2018, respectively. See Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 93 of this report. |
Schedule III-Supplementary Insu
Schedule III-Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2020 | |
Supplementary Insurance Information [Abstract] | |
Schedule III-Supplementary Insurance Information | RLI CORP. AND SUBSIDIARIES SCHEDULE III—SUPPLEMENTARY INSURANCE INFORMATION As of and for the years ended December 31, 2020, 2019 and 2018 Incurred losses Deferred policy Unpaid losses Unearned Net and settlement acquisition and settlement premiums, premiums expenses (in thousands) costs expenses, gross gross earned current year Year ended December 31, 2020 Casualty segment $ 48,255 $ 1,567,544 $ 385,736 $ 569,521 $ 397,174 Property segment 19,655 150,008 131,274 183,720 124,375 Surety segment 20,515 32,497 69,376 112,506 22,388 RLI Insurance Group $ 88,425 $ 1,750,049 $ 586,386 $ 865,747 $ 543,937 Year ended December 31, 2019 Casualty segment $ 47,805 $ 1,435,619 $ 354,118 $ 558,458 $ 392,653 Property segment 17,057 100,000 116,624 164,022 78,075 Surety segment 20,182 38,733 69,471 116,631 17,972 RLI Insurance Group $ 85,044 $ 1,574,352 $ 540,213 $ 839,111 $ 488,700 Year ended December 31, 2018 Casualty segment $ 50,040 $ 1,283,204 $ 330,836 $ 523,472 $ 363,015 Property segment 14,090 134,822 93,032 149,261 94,635 Surety segment 20,804 43,322 72,637 118,633 20,493 RLI Insurance Group $ 84,934 $ 1,461,348 $ 496,505 $ 791,366 $ 478,143 NOTE 1: Investment income is not allocated to the segments, therefore, net investment income has not been provided. See the accompanying reports of independent registered public accounting firms starting on page 93 of this report. RLI CORP. AND SUBSIDIARIES SCHEDULE III—SUPPLEMENTARY INSURANCE INFORMATION (continued) As of and for the years ended December 31, 2020, 2019 and 2018 Incurred losses and settlement Policy Other Net expenses acquisition operating premiums (in thousands) prior year costs expenses written Year ended December 31, 2020 Casualty segment $ (75,075 ) $ 162,058 $ 40,937 $ 583,244 Property segment (13,019 ) 59,926 15,620 196,603 Surety segment (12,959 ) 64,454 10,271 112,241 RLI Insurance Group $ (101,053 ) $ 286,438 $ 66,828 $ 892,088 Year ended December 31, 2019 Casualty segment $ (62,497 ) $ 166,499 $ 41,202 $ 564,979 Property segment (4,461 ) 55,986 16,279 181,974 Surety segment (8,326 ) 66,212 11,949 113,384 RLI Insurance Group $ (75,284 ) $ 288,697 $ 69,430 $ 860,337 Year ended December 31, 2018 Casualty segment $ (33,252 ) $ 151,007 $ 31,562 $ 547,177 Property segment (10,813 ) 51,830 12,725 155,601 Surety segment (5,885 ) 64,901 9,516 120,397 RLI Insurance Group $ (49,950 ) $ 267,738 $ 53,803 $ 823,175 See the accompanying reports of independent registered public accounting firms starting on page 93 of this report. |
Schedule IV-Reinsurance
Schedule IV-Reinsurance | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Schedule Of Reinsurance Premiums For Insurance Companies [Abstract] | |
Schedule IV-Reinsurance | RLI CORP. AND SUBSIDIARIES SCHEDULE IV—REINSURANCE Years ended December 31, 2020, 2019 and 2018 Percentage Ceded to Assumed of amount Direct other from other Net assumed (in thousands) amount companies companies amount to net 2020 Casualty segment $ 690,718 $ 148,271 $ 27,074 $ 569,521 4.8 % Property segment 253,781 70,398 337 183,720 0.2 % Surety segment 118,109 5,843 240 112,506 0.2 % RLI Insurance Group premiums earned $ 1,062,608 $ 224,512 $ 27,651 $ 865,747 3.2 % 2019 Casualty segment $ 641,159 $ 122,452 $ 39,751 $ 558,458 7.1 % Property segment 217,657 53,810 175 164,022 0.1 % Surety segment 122,305 5,921 247 116,631 0.2 % RLI Insurance Group premiums earned $ 981,121 $ 182,183 $ 40,173 $ 839,111 4.8 % 2018 Casualty segment $ 578,643 $ 96,639 $ 41,468 $ 523,472 7.9 % Property segment 193,855 44,634 40 149,261 0.0 % Surety segment 123,736 5,521 418 118,633 0.4 % RLI Insurance Group premiums earned $ 896,234 $ 146,794 $ 41,926 $ 791,366 5.3 % See the accompanying reports of independent registered public accounting firms starting on page 93 of this report. |
Schedule V-Valuation and Qualif
Schedule V-Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2020 | |
Valuation And Qualifying Accounts [Abstract] | |
Schedule V-Valuation and Qualifying Accounts | RLI CORP. AND SUBSIDIARIES SCHEDULE V—VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 2020, 2019 and 2018 Balance Amounts Amounts Balance at beginning charged recovered at end of (in thousands) of period to expense (written off) period 2020 Allowance for uncollectible reinsurance $ 25,066 $ (522 ) $ (5 ) $ 24,539 2019 Allowance for uncollectible reinsurance $ 25,911 $ (647 ) $ (198 ) $ 25,066 2018 Allowance for uncollectible reinsurance $ 25,911 $ — $ — $ 25,911 See the accompanying reports of independent registered public accounting firms starting on page 93 of this report. |
Schedule VI-Supplementary Infor
Schedule VI-Supplementary Information Concerning Property-Casualty Insurance Operations | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Information For Property Casualty Insurance Underwriters [Abstract] | |
Schedule VI-Supplementary Information Concerning Property-Casualty Insurance Operations | RLI CORP. AND SUBSIDIARIES SCHEDULE VI—SUPPLEMENTARY INFORMATION CONCERNING PROPERTY-CASUALTY INSURANCE OPERATIONS Years ended December 31, 2020, 2019 and 2018 (in thousands) Deferred policy Claims and Unearned Net Net Affiliation with acquisition claim adjustment premiums, premiums investment Registrant (1) costs expense reserves gross earned income 2020 $ 88,425 $ 1,750,049 $ 586,386 $ 865,747 $ 67,893 2019 $ 85,044 $ 1,574,352 $ 540,213 $ 839,111 $ 68,870 2018 $ 84,934 $ 1,461,348 $ 496,505 $ 791,366 $ 62,085 Claims and claim adjustment expenses incurred related to: Amortization Paid claims and Net Current Prior of deferred claim adjustment premiums year year acquisition costs expenses written 2020 $ 543,937 $ (101,053 ) $ 286,438 $ 325,054 $ 892,088 2019 $ 488,700 $ (75,284 ) $ 288,697 $ 319,930 $ 860,337 2018 $ 478,143 $ (49,950 ) $ 267,738 $ 301,356 $ 823,175 (1) Consolidated property-casualty insurance operations. See the accompanying reports of independent registered public accounting firms starting on page 93 of this report. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Business | A. DESCRIPTION OF BUSINESS RLI Corp. is an insurance holding company. References to “the Company,” “we,” “our,” “us” or like terms refer to the business of RLI Corp. and its subsidiaries. We underwrite select property and casualty insurance coverages through major subsidiaries collectively known as RLI Insurance Group. We conduct operations principally through three insurance companies. RLI Insurance Company (RLI Ins.), a subsidiary of RLI Corp. and our principal insurance subsidiary, writes multiple lines of insurance on an admitted basis in all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands and Guam. Mt. Hawley Insurance Company (Mt. Hawley), a subsidiary of RLI Ins., writes excess and surplus lines insurance on a non-admitted basis in all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands and Guam. Contractors Bonding and Insurance Company (CBIC), a subsidiary of RLI Ins., writes multiple lines of insurance on an admitted basis in all 50 states and the District of Columbia. On May 4, 2018, RLI Corp. changed its state of incorporation from the State of Illinois to the State of Delaware (the Reincorporation). The Reincorporation was effected by merging RLI Corp., an Illinois corporation (RLI Illinois), into RLI Corp., a Delaware corporation (RLI Delaware). The separate corporate existence of RLI Illinois ceased and RLI Delaware continues in existence as the surviving corporation and possesses all rights, privileges, powers and franchises of RLI Illinois. The Reincorporation did not result in any change in the name, business, management, fiscal year, location of the principal executive offices, assets or liabilities of the Company. Each outstanding share of RLI Illinois common stock, which had a par value of $1.00 per share, was automatically converted into one outstanding share of RLI Delaware common stock, with a par value of $0.01 per share. In order to reflect the new par value of common stock on the balance sheet, a $66.4 million reclassification from common stock to paid-in-capital was made. |
Principles of Consolidation and Basis of Presentation | B. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION The accompanying consolidated financial statements were prepared in conformity with generally accepted accounting principles in the United States of America (GAAP), which differ in some respects from those followed in reports to insurance regulatory authorities. The consolidated financial statements include the accounts of our holding company and our subsidiaries. Intercompany balances and transactions have been eliminated. The Company has evaluated subsequent events through the date these consolidated financial statements were issued. There were no subsequent events requiring adjustment to the financial statements or disclosure. |
Adopted Accounting Standards | C. ADOPTED ACCOUNTING STANDARDS ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2016-13 was issued to provide more decision-useful information about the expected credit losses on financial instruments. Previous guidance delayed the recognition of credit losses until it was probable a loss had been incurred. This update requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that is included in net earnings. Credit losses relating to available-for-sale debt securities are also required to be recorded through a reversible allowance for credit losses, but is limited to the amount by which fair value is less than amortized cost. We adopted ASU 2016-13 on January 1, 2020 using the modified-retrospective approach. The standard applied to three of the Company’s balance sheet accounts: available-for-sale fixed income securities, premiums receivable and reinsurance balances recoverable. The impact of this standard was and is expected to continue to be immaterial, as our fixed income portfolio is weighted towards higher rated bonds (83 percent rated A or better at December 31, 2020 and 85 percent at December 31, 2019), we purchase reinsurance from financially strong reinsurers, we have a long history of collecting premium receivables through various economic cycles and we had previously maintained an allowance for uncollectible premium and reinsurance balances. In total, the cumulative-effect adjustment made to the balance sheet as of the beginning of the year resulted in a $1.1 million increase to retained earnings and an increase to accumulated other comprehensive earnings of less than $0.1 million |
Prospective Accounting Standards | D. PROSPECTIVE ACCOUNTING STANDARDS There are no prospective accounting standards which would have a material impact on our financial statements as of December 31, 2020. |
Investments | E . INVESTMENTS Equity securities are carried at fair value with unrealized gains and losses recorded within net earnings. Investments in fixed income securities are classified into one of three categories: trading, held-to-maturity or available-for-sale. All of our fixed income securities are classified as available-for-sale and reported at fair value . Unrealized gains and losses on these securities are excluded from net earnings but are recorded as a separate component of comprehensive earnings and shareholders’ equity, net of deferred income taxes. Interest on fixed maturities and short-term investments is credited to earnings on an accrual basis. Premiums and discounts are amortized or accreted over the lives of the related fixed maturities. Dividends on equity securities are credited to earnings on the ex-dividend date. Realized gains and losses on disposition of investments are based on specific identification of the investments sold on the settlement date. |
Cash, Short-Term Investments and Other Invested Assets | F . CASH, SHORT-TERM INVESTMENTS AND OTHER INVESTED ASSETS Cash consists of uninvested balances in bank accounts. Other invested assets include investments in low income housing tax credit partnerships (LIHTC), membership in the Federal Home Loan Bank of Chicago (FHLBC), investments in private funds and investments in restricted stock. Our LIHTC investments are carried at amortized cost, and our investment in FHLBC stock is carried at cost. Due to the nature of cash, the LIHTCs and our membership in the FHLBC, their carrying amounts approximate fair value. The private funds are carried at fair value, using each investment’s net asset value. Restricted stock is carried at quoted market prices, as the restrictions expire within one year. |
Reinsurance | G . REINSURANCE Ceded unearned premiums and reinsurance balances recoverable on unpaid losses and settlement expenses are reported separately as an asset, rather than being netted with the related liability, since reinsurance does not relieve the Company of our liability to policyholders. Such balances are subject to the credit risk associated with the individual reinsurer. We continually monitor the financial condition of our reinsurers and actively follow up on any past due or disputed amounts. As part of our monitoring efforts, we review their annual financial statements and SEC filings for those reinsurers that are publicly traded. We also review insurance industry developments that may impact the financial condition of our reinsurers. We analyze the credit risk associated with our reinsurance balances recoverable by monitoring the AM Best and S&P ratings of our reinsurers. In addition, we subject our reinsurance recoverables to detailed recoverability tests, including a segment-based analysis using the average default rating percentage by S&P rating, which assists the Company in assessing the sufficiency of the existing allowance. Additionally, we perform an in-depth reinsurer financial condition analysis prior to the renewal of our reinsurance placements. Our policy is to charge to earnings, in the form of an allowance, an estimate of unrecoverable amounts from reinsurers. This allowance is reviewed on an ongoing basis to ensure that the amount makes a reasonable provision for reinsurance balances that we may be unable to recover. Once regulatory action (such as receivership, finding of insolvency, order of conservation or order of liquidation) is taken against a reinsurer, the paid and unpaid recoverable for the reinsurer are specifically identified and written off through the use of our allowance for estimated unrecoverable amounts from reinsurers. When we write-off such a balance, it is done in full. We then re-evaluate the remaining allowance and determine whether the balance is sufficient as detailed above and if needed, an additional allowance is recognized and income charged. |
Policy Acquisition Costs | H . POLICY ACQUISITION COSTS We defer incremental direct costs that relate to the successful acquisition of new or renewal insurance contracts, including commissions and premium taxes. Acquisition-related costs may be deemed ineligible for deferral when they are based on contingent or performance criteria beyond the basic acquisition of the insurance contract or when efforts to obtain or renew the insurance contract are unsuccessful. All eligible costs are capitalized and charged to expense in proportion to premium revenue recognized. The method followed in computing deferred policy acquisition costs limits the amount of such deferred costs to their estimated realizable value. This process contemplates the premiums to be earned, anticipated losses and settlement expenses and certain other costs expected to be incurred, but does not consider investment income. Judgments as to the ultimate recoverability of such deferred costs are reviewed on a segment basis and are highly dependent upon estimated future loss costs associated with the premiums written. This deferral methodology applies to both gross and ceded premiums and acquisition costs. |
Property and Equipment | I . PROPERTY AND EQUIPMENT Property and equipment are presented at cost less accumulated depreciation and are depreciated on a straight-line basis for financial statement purposes over periods ranging from 3 to 10 years for equipment and up to 30 years for buildings and improvements. |
Investments in Unconsolidated Investees | J . INVESTMENTS IN UNCONSOLIDATED INVESTEES Our investments accounted for under the equity method are primarily related to Maui Jim, Inc. (Maui Jim) and Prime Holdings Insurance Services, Inc. (Prime). We maintain a 40 percent interest in the equity and earnings of Maui Jim, a manufacturer of high- quality sunglasses , and a minority representation on their board of directors. Maui Jim’s chief executive officer owns a controlling majority of the outstanding shares of Maui Jim. We carry this investment at the holding company level as it is not core to our insurance operations. Our investment in Maui Jim was $ million at December 31, 20 20 and $ million at December 31, 201 9 . In 20 20 , we recorded $ million in investee earnings for Maui Jim, compared to $ million in 201 9 and $ million in 2018. As of December 31, 2020, we had a 23 percent interest in the equity and earnings of Prime. Prime writes business through two Illinois domiciled insurance carriers, Prime Insurance Company, an excess and surplus lines company, and Prime Property and Casualty Insurance Inc., an admitted insurance company. Our investment in Prime was $32.7 million at December 31, 2020 and $24.2 million at December 31, 2019. In 2020, we recorded $10.8 million in investee earnings for Prime, compared to $7.4 million in 2019 and $3.6 million in 2018. Additionally, we maintain a quota share reinsurance treaty with Prime, which contributed $15.7 million of gross premiums written and $14.3 million of net premiums earned during 2020, compared to $13.1 million of gross premiums written and $28.7 million of net premiums earned during 2019 and $41.1 million of gross premiums written and $34.2 million of net premiums earned during 2018. The decrease in premium is reflective of our decreased quota share participation with Prime. Our equity method investments recorded net income of $70.4 million in 2020, $77.3 million in 2019 and $50.2 million in 2018. Additional summarized financial information for our equity method investments as of 2020 and 2019 is outlined in the following table: (in millions) 2020 2019 Total assets $ 837.2 $ 718.5 Total liabilities 473.2 420.8 Total equity 364.0 297.7 Approximately $106.0 million of undistributed earnings from our equity method investees are included in our retained earnings as of December 31, 2020. We received dividends of $4.7 million, $13.2 million and $9.9 million from our equity method investees in 2020, 2019 and 2018, respectively. We perform annual impairment reviews of our investments in unconsolidated investees, which take into consideration current valuation and operating results. Based upon the most recent reviews, the assets were not impaired. |
Intangible Assets | K . INTANGIBLE ASSETS The composition of goodwill and intangibles at December 31, 2020 and 2019, is detailed in the following table: (in thousands) 2020 2019 Goodwill Surety $ 40,816 $ 40,816 Casualty 5,246 5,246 Total goodwill $ 46,062 $ 46,062 Intangibles State insurance licenses $ 7,500 $ 7,500 Definite-lived intangibles, net of accumulated amortization of $3,878 at 12/31/20 and $3,470 at 12/31/19 157 565 Total intangibles $ 7,657 $ 8,065 Total goodwill and intangibles $ 53,719 $ 54,127 As the amortization of goodwill and indefinite-lived intangible assets is not permitted, the assets are tested for impairment on an annual basis, or earlier if there is reason to suspect that their values may have been diminished or impaired. Annual impairment testing was performed on each of our goodwill and indefinite-lived intangible assets during 2020. Based upon these reviews, our goodwill and state insurance license indefinite-lived intangible asset were not impaired. In addition, as of December 31, 2020, there were no triggering events on goodwill and intangible assets that would suggest an updated review was necessary. During the first quarter of 2018, adverse loss experience triggered the need to test the medical professional liability reporting unit. The testing resulted in a $4.4 million non-cash impairment charge on goodwill and intangible assets in 2018. The fair value for the medical professional liability reporting unit’s agency relationships, carried as a definite-lived intangible asset, was determined by using a discounted cash flow valuation. The carrying value exceeded the fair value, resulting in a $0.8 million non-cash impairment charge. The fair value for the medical professional liability reporting unit’s goodwill was determined by using a weighted average of a market approach and discounted cash flow valuation. The carrying value exceeded the fair value in each year, resulting in a $3.6 million non-cash impairment charge in 2018. Subsequent to the 2018 impairment, the medical professional liability reporting unit had no remaining goodwill or intangible assets. All impairment charges were recorded as net realized losses in the respective period’s reporting unit. The definite-lived intangible assets are amortized against future operating results based on their estimated useful lives. Amortization of intangible assets was $0.4 million for 2020, 2019 and 2018. We anticipate we will recognize amortization expense of $0.1 million in 2021 and less than $0.1 million in 2022. |
Unpaid Losses and Settlement Expense | L . UNPAID LOSSES AND SETTLEMENT EXPENSES The liability for unpaid losses and settlement expenses represents estimates of amounts needed to pay reported and unreported claims and related expenses. The estimates are based on certain actuarial and other assumptions related to the ultimate cost to settle such claims. Such assumptions are subject to occasional changes due to evolving economic, social and political conditions. All estimates are periodically reviewed and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments are reflected in the results of operations in the period in which they are determined. Due to the inherent uncertainty in estimating reserves for losses and settlement expenses, there can be no assurance that the ultimate liability will not exceed recorded amounts. If actual liabilities do exceed recorded amounts, there will be an adverse effect. Furthermore, we may determine that recorded reserves are more than adequate to cover expected losses, which would lead to a reduction in our reserves. |
Insurance Revenue Recognition | M . INSURANCE REVENUE RECOGNITION Insurance premiums are recognized ratably over the term of the contracts, net of ceded reinsurance. Unearned premiums are calculated on a monthly pro rata basis. |
Income Taxes | N . INCOME TAXES We file a consolidated federal income tax return. Federal income taxes are accounted for using the asset and liability method under which deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities, operating losses and tax credit carry forwards. The effect on deferred taxes for a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that all or some of the deferred tax assets will not be realized. We consider uncertainties in income taxes and recognize those in our financial statements as required. As it relates to uncertainties in income taxes, our unrecognized tax benefits, including interest and penalty accruals, are not considered material to the consolidated financial statements. Also, no tax uncertainties are expected to result in significant increases or decreases to unrecognized tax benefits within the next 12-month period. Penalties and interest related to income tax uncertainties, should they occur, would be included in income tax expense in the period in which they are incurred. As an insurance company, we are subject to minimal state income tax liabilities. On a state basis, since the majority of our income is from insurance operations, we pay premium taxes which are calculated as a percentage of gross premiums written in lieu of state income taxes. Premium taxes are a component of policy acquisition costs. |
Earnings Per Share | O . EARNINGS PER SHARE Basic earnings per share (EPS) is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the dilution that could occur if securities or other contracts to issue common stock or common stock equivalents were exercised or converted into common stock. When inclusion of these items increases the earnings per share or reduces the loss per share, the effect on earnings is anti-dilutive. Under these circumstances, the diluted net earnings or net loss per share is computed excluding these items. The following represents a reconciliation of the numerator and denominator of the basic and diluted EPS computations contained in the consolidated financial statements: Weighted Average Income Shares Per Share (in thousands, except per share data) (Numerator) (Denominator) Amount For the year ended December 31, 2020 Basic EPS Income available to common shareholders $ 157,091 45,000 $ 3.49 Stock options — 376 Diluted EPS Income available to common shareholders and assumed conversions $ 157,091 45,376 $ 3.46 Anti-dilutive options excluded from diluted EPS 384 For the year ended December 31, 2019 Basic EPS Income available to common shareholders $ 191,642 44,734 $ 4.28 Stock options — 523 Diluted EPS Income available to common shareholders and assumed conversions $ 191,642 45,257 $ 4.23 Anti-dilutive options excluded from diluted EPS 65 For the year ended December 31, 2018 Basic EPS Income available to common shareholders $ 64,179 44,358 $ 1.45 Stock options — 477 Diluted EPS Income available to common shareholders and assumed conversions $ 64,179 44,835 $ 1.43 Anti-dilutive options excluded from diluted EPS 65 |
Comprehensive Earnings | P . COMPREHENSIVE EARNINGS Our comprehensive earnings include net earnings plus after-tax unrealized gains and losses on our available-for-sale fixed income portfolio. In reporting the components of comprehensive earnings, we used the federal statutory tax rate of 21 percent. Other comprehensive income (loss), as shown in the consolidated statements of earnings and comprehensive earnings, is net of tax expense (benefit) of $14.9 million, $17.8 million and $(9.0) million for 2020, 2019 and 2018, respectively. The table below illustrates the changes in the balance of each component of accumulated other comprehensive earnings for each period presented in the consolidated financial statements. The changes in accumulated other comprehensive earnings also reflect adjustments from the adoption of accounting standards. ASU 2016-01, Financial Instruments – Overall (subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, ASU 2018-02 addressed issues arising from the enactment of the Tax Cuts and Jobs Act of 2017 (TCJA). Deferred tax items are required to be revalued based on new tax laws with changes included in earnings. Since other comprehensive earnings was not affected by the revaluation of deferred tax items, the accumulated other comprehensive earnings balance was reflective of the historic tax rate instead of the newly enacted rate, which created a stranded tax effect. ASU 2018-02 allowed for the reclassification of our $3.7 million stranded tax effect out of accumulated other comprehensive earnings into retained earnings. Unrealized Gains/Losses on Available-for-Sale Securities For the Year Ended December 31, (in thousands) 2020 2019 2018 Beginning balance $ 52,473 $ (14,572 ) $ 157,919 Cumulative-effect adjustment of ASU 2016-13 (see note 1.C) 22 — — Cumulative-effect adjustment of ASU 2016-01 — — (142,219 ) Adjusted beginning balance $ 52,495 $ (14,572 ) $ 15,700 Other comprehensive earnings before reclassifications 58,986 69,560 (35,763 ) Amounts reclassified from accumulated other comprehensive earnings (2,767 ) (2,515 ) 1,766 Net current period other comprehensive earnings (loss) $ 56,219 $ 67,045 $ (33,997 ) Reclassification of stranded tax effect from implementation of TCJA — — 3,725 Ending balance $ 108,714 $ 52,473 $ (14,572 ) Balance of securities for which an allowance for credit losses has not been recognized in net earnings $ 470 $ — $ — In 2020, credit losses or the sale of an available-for-sale security resulted in amounts being reclassified from accumulated other comprehensive earnings to current period net earnings. In 2019 and 2018, the sale or other-than-temporary impairment of an available-for-sale security resulted in amounts being reclassified from accumulated other comprehensive earnings to net earnings. The effects of reclassifications out of accumulated other comprehensive earnings by the respective line items of net earnings are presented in the following table. Amount Reclassified from Accumulated Other Comprehensive Earnings (in thousands) Component of Accumulated For the Year Ended December 31, Affected line item in the Other Comprehensive Earnings 2020 2019 2018 Consolidated Statement of Earnings Unrealized gains and losses on available-for-sale securities $ 3,872 $ 3,184 $ (2,018 ) Net (369 ) — — Credit losses presented within net realized gains — — (217 ) Other-than-temporary impairment losses on investments $ 3,503 $ 3,184 $ (2,235 ) Earnings (losses) before income taxes (736 ) (669 ) 469 Income tax (expense) benefit $ 2,767 $ 2,515 $ (1,766 ) Net earnings (loss) |
Fair Value Disclosures | Q . FAIR VALUE DISCLOSURES Fair value is defined as the price in the principal market that would be received for an asset to facilitate an orderly transaction between market participants on the measurement date. We determined the fair value of certain financial instruments based on their underlying characteristics and relevant transactions in the marketplace. We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following are the levels of the fair value hierarchy and a brief description of the type of valuation inputs that are used to establish each level. Financial assets are classified based upon the lowest level of significant input that is used to determine fair value. Pricing Level 1 is applied to valuations based on readily available, unadjusted quoted prices in active markets for identical assets. Pricing Level 2 is applied to valuations based upon quoted prices for similar assets in active markets, quoted prices for identical or similar assets in inactive markets; or valuations based on models where the significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities) or can be corroborated by observable market data. Pricing Level 3 is applied to valuations that are derived from techniques in which one or more of the significant inputs are unobservable. As a part of management’s process to determine fair value, we utilize widely recognized, third-party pricing sources to determine our fair values. We have obtained an understanding of the third-party pricing sources’ valuation methodologies and inputs. The following is a description of the valuation techniques used for financial assets that are measured at fair value, including the general classification of such assets pursuant to the fair value hierarchy. Corporate, Agencies, Government and Municipal Bonds: The pricing vendor employs a multi-dimensional model which uses standard inputs including (listed in approximate order of priority for use) benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers and other reference data. The pricing vendor also monitors market indicators, as well as industry and economic events. All bonds valued using these techniques are classified as Level 2. All Corporate, Agencies, Government and Municipal securities are deemed Level 2. Mortgage-backed Securities (MBS)/Collateralized Mortgage Obligations (CMO) and Asset-backed Securities (ABS): The pricing vendor evaluation methodology includes principally interest rate movements and new issue data. Evaluation of the tranches (nonvolatile, volatile or credit sensitivity) is based on the pricing vendors’ interpretation of accepted modeling and pricing conventions. This information is then used to determine the cash flows for each tranche, benchmark yields, pre-payment assumptions and to incorporate collateral performance. To evaluate CMO volatility, an option adjusted spread model is used in combination with models that simulate interest rate paths to determine market price information. This process allows the pricing vendor to obtain evaluations of a broad universe of securities in a way that reflects changes in yield curve, index rates, implied volatility, mortgage rates and recent trade activity. MBS/CMO and ABS with corroborated, observable inputs are classified as Level 2. All of our MBS/CMO and ABS are deemed Level 2. Regulation D Private Placement Securities: The pricing vendor evaluation methodology for these securities includes a combination of observable and unobservable inputs. Observable inputs include public corporate spread matrices classified by sector, rating and average life, as well as investment and non-investment grade matrices created from fixed income indices. Unobservable inputs include a liquidity spread premium calculated based on public corporate spread and private corporate spread matrices. All Regulation D privately-placed bonds are classified as corporate securities and deemed Level 3. For all of our fixed income securities, we periodically conduct a review to assess the reasonableness of the fair values provided by our pricing services. Our review consists of a two-pronged approach. First, we compare prices provided by our pricing services to those provided by an additional source. In some cases, we obtain prices from securities brokers and compare them to the prices provided by our pricing services. In our comparisons, if discrepancies are found, we compare our prices to actual reported trade data for like securities. No changes to the fair values supplied by our pricing services have occurred as a result of our reviews. Based on these assessments, we have determined that the fair values of our fixed income securities provided by our pricing services are reasonable. Common Stock: As of December 31, 2020, all but one of our common stock holdings were traded on an exchange. Exchange traded equities have readily observable price levels and are classified as Level 1 (fair value based on quoted market prices). Pricing for the equity security not traded on an exchange is provided by a third-party pricing source and is classified as Level 2. Due to the relatively short-term nature of cash, short-term investments, accounts receivable and accounts payable, their carrying amounts are reasonable estimates of fair value. Our investments in private funds, classified as other invested assets, are measured using the investments’ net asset value per share and are not categorized within the fair value hierarchy. The fair value of our long-term debt is discussed further in note 4. |
Stock-Based Compensation | R . STOCK-BASED COMPENSATION We expense the estimated fair value of employee stock options and similar awards. We measure compensation cost for awards of equity instruments to employees based on the grant-date fair value of those awards and recognize compensation expense over the service period that the awards are expected to vest. The tax effects related to share-based payments are made through net earnings. See note 8 for further discussion and related disclosures regarding stock options. |
Risk and Uncertainties | S . RISKS AND UNCERTAINTIES Certain risks and uncertainties are inherent in our day-to-day operations and in the process of preparing our consolidated financial statements. The more significant risks and uncertainties, as well as our attempt to mitigate, quantify and minimize such risks, are presented below and throughout the notes to the consolidated financial statements. Insurance Risks We compete with a large number of other companies in our selected lines of business. During periods of intense competition for premium, we are vulnerable to the actions of other companies who may seek to write business without the appropriate regard for risk and profitability. The insurance industry is often highly competitive, which can make it difficult to grow or maintain premium volume without sacrificing underwriting discipline and income. Our profitability can be significantly affected by the ability of our underwriters to accurately select and price risk and our claim personnel to appropriately deliver fair outcomes. We attempt to mitigate this risk by incentivizing our underwriters to maximize underwriting profit and remain disciplined in pricing and selecting risks. If we are unable to compete effectively in the markets in which we operate or expand our operations into new markets, our underwriting revenues may decline, as well as overall business results. Our loss reserves are based on estimates and may be inadequate to cover our actual insured losses, which would negatively impact our profitability. As of December 31, 2020, we had $1.8 billion of gross loss and LAE reserves. Significant periods of time often elapse between the occurrence of an insured loss, the reporting of the loss to the Company and our payment of that loss. As part of the reserving process, we review historical data and consider the impact of various factors such as trends in claim frequency and severity, emerging economic and social trends, inflation and changes in the regulatory and litigation environments. If the actual amount of insured losses is greater than the amount we have reserved for these losses, our profitability would suffer. Catastrophe Exposures Our insurance coverages include exposure to catastrophic events. We monitor all catastrophe exposures by quantifying our exposed policy limits in each region and by using computer-assisted modeling techniques. Additionally, we limit our risk to such catastrophes through restraining the total policy limits written in each region and by purchasing reinsurance. Our major catastrophe exposure is to losses caused by earthquakes, primarily on the West Coast. In 2020, we had reinsurance protection of $500 million in excess of $25 million first-dollar retention for earthquakes in California and $525 million in excess of a $25 million first-dollar retention for earthquakes outside of California. These amounts are subject to certain co-participations by the Company on losses in excess of the $25 million retentions. Our second largest catastrophe exposure is to losses caused by wind storms to commercial properties throughout the Gulf and East Coasts, as well as to homes we insure in Hawaii. In 2020, these coverages were supported by $375 million in excess of a $25 million first-dollar retention in traditional catastrophe reinsurance protection, subject to certain co-participations by the Company in the excess layers. In addition, we have incidental exposure to international catastrophic events. Our catastrophe reinsurance treaty renewed on January 1, 2021. We purchased the same limits over the same first-dollar retention amounts outlined above, subject to certain retentions by us in the excess layers. We actively manage our catastrophe program to keep our net retention in line with risk tolerances and to optimize the risk/return trade off. Environmental Exposures We are subject to environmental claims and exposures primarily through our commercial excess, general liability and discontinued assumed casualty reinsurance lines of business. Although exposure to environmental claims exists in these lines of business, we seek to mitigate or control the extent of this exposure on the vast majority of this business through the following methods: (1) our policies include pollution exclusions that have been continually updated to further strengthen them, (2) our policies primarily cover moderate hazard risks and (3) we began writing this business after the insurance industry became aware of the potential pollution liability exposure and implemented changes to limit exposure to this hazard. We offer coverage for low to moderate environmental liability exposures for small contractors and asbestos and mold remediation specialists. We also provide limited coverage for individually underwritten underground storage tanks. The overall exposure is mitigated by focusing on smaller risks with low to moderate exposures. Risks that have large-scale exposures are avoided including petrochemical, chemical, mining, manufacturers and other risks that might be exposed to superfund sites. This business is covered under our casualty ceded reinsurance treaties. We made loss and settlement expense payments on environmental liability claims and have loss and settlement expense reserves for others. We include this historical environmental loss experience with the remaining loss experience in the applicable line of business to project ultimate incurred losses and settlement expenses as well as related incurred but not reported (IBNR) loss and settlement expense reserves. Although historical experience on environmental claims may not accurately reflect future environmental exposures, we used this experience to record loss and settlement expense reserves in the exposed lines of business. See further discussion of environmental exposures in note 6. Reinsurance Reinsurance does not discharge the Company from our primary liability to policyholders, and to the extent that a reinsurer is unable to meet its obligations, we would be liable. We continuously monitor the financial condition of prospective and existing reinsurers. As a result, we purchase reinsurance from a number of financially strong reinsurers. We provide an allowance for reinsurance balances deemed uncollectible. See further discussion of reinsurance exposures in note 5. Investment Risk Our investment portfolio is subject to market, credit and interest rate risks. The equity portfolio will fluctuate with movements in the overall stock market. While the equity portfolio has been constructed to have lower downside risk than the market, the portfolio is positively correlated with movements in domestic stocks. The bond portfolio is affected by interest rate changes and movement in credit spreads. We attempt to mitigate our interest rate and credit risks by constructing a well-diversified portfolio with high-quality securities with varied maturities. Downturns in the financial markets could have a negative effect on our portfolio. However, we attempt to manage this risk through asset allocation, duration and security selection. Liquidity Risk Liquidity is essential to our business and a key component of our concept of asset-liability matching. Our liquidity may be impaired by an inability to collect premium receivable or reinsurance recoverable balances in a timely manner, an inability to sell assets or redeem our investments, an inability to access funds from our insurance subsidiaries, unforeseen outflows of cash or large claim payments or an inability to access debt or equity capital markets. This situation may arise due to circumstances that we may be unable to control, such as a general market disruption, an operational problem that affects third parties or the Company, or even by the perception among market participants that we, or other market participants, are experiencing greater liquidity risk. Our credit ratings are important to our liquidity. A reduction in our credit ratings could adversely affect our liquidity and competitive position by increasing our borrowing costs or limiting our access to the capital markets. Financial Statements The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of revenues and expenses. The most significant of these amounts is the liability for unpaid losses and settlement expenses. Other estimates include investment valuation, the allowance for credit losses on fixed income securities, the collectability of reinsurance balances, recoverability of deferred tax assets and deferred policy acquisition costs. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. Although recorded estimates are supported by actuarial computations and other supportive data, the estimates are ultimately based on our expectations of future events. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. External Factors Our insurance subsidiaries are highly regulated by the state in which they are incorporated and by the states in which they do business. Such regulations, among other things, limit the amount of dividends, impose restrictions on the amount and types of investments and regulate rates insurers may charge for various coverages. We are also subject to insolvency and guaranty fund assessments for various programs designed to ensure policyholder indemnification. We generally accrue an assessment during the period in which it becomes probable that a liability has been incurred from an insolvency and the amount of the related assessment can be reasonably estimated. The National Association of Insurance Commissioners (NAIC) has developed Property/Casualty Risk-Based Capital (RBC) standards that relate an insurer’s reported statutory surplus to the risks inherent in its overall operations. The RBC formula uses the statutory annual statement to calculate the minimum indicated capital level to support investment and underwriting risk. The NAIC model law calls for various levels of regulatory action based on the magnitude of an indicated RBC capital deficiency, if any. We regularly monitor our subsidiaries’ internal capital requirements and the NAIC’s RBC developments. As of December 31, 2020, we determined that our capital levels are well in excess of the minimum capital requirements for all RBC action levels and that our capital levels are sufficient to support the level of risk inherent in our operations. See note 9 for further discussion of statutory information and related insurance regulatory restrictions. In addition, ratings are a critical factor in establishing the competitive position of insurance companies. Our insurance companies are rated by AM Best, S&P and Moody’s. Their ratings reflect their opinions of an insurance company’s and an insurance holding company’s financial strength, operating performance, strategic position and ability to meet its obligations to policyholders. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Summarized Financial Information of Equity Method Investments | (in millions) 2020 2019 Total assets $ 837.2 $ 718.5 Total liabilities 473.2 420.8 Total equity 364.0 297.7 |
Schedule of Goodwill and Intangible Assets | (in thousands) 2020 2019 Goodwill Surety $ 40,816 $ 40,816 Casualty 5,246 5,246 Total goodwill $ 46,062 $ 46,062 Intangibles State insurance licenses $ 7,500 $ 7,500 Definite-lived intangibles, net of accumulated amortization of $3,878 at 12/31/20 and $3,470 at 12/31/19 157 565 Total intangibles $ 7,657 $ 8,065 Total goodwill and intangibles $ 53,719 $ 54,127 |
Schedule of Reconciliation of Numerator and Denominator of the Basic and Diluted Earnings Per Share Computations | Weighted Average Income Shares Per Share (in thousands, except per share data) (Numerator) (Denominator) Amount For the year ended December 31, 2020 Basic EPS Income available to common shareholders $ 157,091 45,000 $ 3.49 Stock options — 376 Diluted EPS Income available to common shareholders and assumed conversions $ 157,091 45,376 $ 3.46 Anti-dilutive options excluded from diluted EPS 384 For the year ended December 31, 2019 Basic EPS Income available to common shareholders $ 191,642 44,734 $ 4.28 Stock options — 523 Diluted EPS Income available to common shareholders and assumed conversions $ 191,642 45,257 $ 4.23 Anti-dilutive options excluded from diluted EPS 65 For the year ended December 31, 2018 Basic EPS Income available to common shareholders $ 64,179 44,358 $ 1.45 Stock options — 477 Diluted EPS Income available to common shareholders and assumed conversions $ 64,179 44,835 $ 1.43 Anti-dilutive options excluded from diluted EPS 65 |
Schedule of Changes in the Balance of Each Component of Accumulated Other Comprehensive Earnings | Unrealized Gains/Losses on Available-for-Sale Securities For the Year Ended December 31, (in thousands) 2020 2019 2018 Beginning balance $ 52,473 $ (14,572 ) $ 157,919 Cumulative-effect adjustment of ASU 2016-13 (see note 1.C) 22 — — Cumulative-effect adjustment of ASU 2016-01 — — (142,219 ) Adjusted beginning balance $ 52,495 $ (14,572 ) $ 15,700 Other comprehensive earnings before reclassifications 58,986 69,560 (35,763 ) Amounts reclassified from accumulated other comprehensive earnings (2,767 ) (2,515 ) 1,766 Net current period other comprehensive earnings (loss) $ 56,219 $ 67,045 $ (33,997 ) Reclassification of stranded tax effect from implementation of TCJA — — 3,725 Ending balance $ 108,714 $ 52,473 $ (14,572 ) Balance of securities for which an allowance for credit losses has not been recognized in net earnings $ 470 $ — $ — |
Schedule of Effects of Reclassifications out of Accumulated Other Comprehensive Earnings | Amount Reclassified from Accumulated Other Comprehensive Earnings (in thousands) Component of Accumulated For the Year Ended December 31, Affected line item in the Other Comprehensive Earnings 2020 2019 2018 Consolidated Statement of Earnings Unrealized gains and losses on available-for-sale securities $ 3,872 $ 3,184 $ (2,018 ) Net (369 ) — — Credit losses presented within net realized gains — — (217 ) Other-than-temporary impairment losses on investments $ 3,503 $ 3,184 $ (2,235 ) Earnings (losses) before income taxes (736 ) (669 ) 469 Income tax (expense) benefit $ 2,767 $ 2,515 $ (1,766 ) Net earnings (loss) |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Schedule of Net Investment Income | (in thousands) 2020 2019 2018 Interest on fixed income securities $ 59,755 $ 60,364 $ 54,491 Dividends on equity securities 9,728 9,950 9,814 Interest on cash, short-term investments and other invested assets 3,379 3,674 2,309 Gross investment income $ 72,862 $ 73,988 $ 66,614 Less investment expenses (4,969 ) (5,118 ) (4,529 ) Net investment income $ 67,893 $ 68,870 $ 62,085 |
Schedule of Pretax Net Realized Investment Gains (Losses) and Net Changes in Unrealized Gains (Losses) on Investments | (in thousands) 2020 2019 2018 Net realized gains (losses): Fixed income: Available-for-sale $ 3,872 $ 3,184 $ (2,018 ) Equity securities 15,796 14,445 69,868 Other (1,783 ) (109 ) (4,226 ) Total net realized gains (losses) $ 17,885 $ 17,520 $ 63,624 Other-than-temporary-impairment losses on investments $ — $ — $ (217 ) Net changes in unrealized gains (losses) on investments: Equity securities $ 32,317 $ 78,389 $ (98,380 ) Other invested assets (216 ) (299 ) (355 ) Total unrealized gains (losses) on equity securities recognized in net earnings $ 32,101 $ 78,090 $ (98,735 ) Fixed income: Available-for-sale $ 67,350 $ 83,758 $ (41,778 ) Investment in unconsolidated investees 3,444 1,109 (1,257 ) Other 369 — — Total unrealized gains (losses) recognized in other comprehensive earnings $ 71,163 $ 84,867 $ (43,035 ) Net realized gains (losses) and changes in unrealized gains (losses) on investments $ 121,149 $ 180,477 $ (78,363 ) |
Schedule of Disposition of Fixed Income and Equity Securities | SALES Gross Realized Net Realized (in thousands) Proceeds Gains Losses Gain (Loss) 2020 Available-for-sale $ 84,697 $ 5,454 $ (1,777 ) $ 3,677 Equities 79,368 25,338 (9,542 ) 15,796 2019 Available-for-sale $ 196,799 $ 4,368 $ (2,167 ) $ 2,201 Equities 62,172 16,938 (2,493 ) 14,445 2018 Available-for-sale $ 394,318 $ 3,131 $ (5,349 ) $ (2,218 ) Equities 147,838 71,065 (1,197 ) 69,868 CALLS/MATURITIES Gross Realized Net Realized (in thousands) Proceeds Gains Losses Gain (Loss) 2020 Available-for-sale $ 283,107 $ 821 $ (27 ) $ 794 2019 Available-for-sale $ 201,698 $ 1,004 $ (21 ) $ 983 2018 Available-for-sale $ 187,380 $ 311 $ (111 ) $ 200 |
Fair Value, Assets Measured on Recurring Basis | Assets measured at fair value on a recurring basis as of December 31, 2020 and 2019, are summarized below: 2020 Quoted in Active Significant Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities - available-for-sale U.S. government $ — $ 183,357 $ — $ 183,357 U.S. agency — 32,872 — 32,872 Non-U.S. government & agency — 10,965 — 10,965 Agency MBS — 402,071 — 402,071 ABS/CMBS/MBS* — 218,373 — 218,373 Corporate — 798,794 17,798 816,592 Municipal — 532,396 — 532,396 Total fixed income securities - available-for-sale $ — $ 2,178,828 $ 17,798 $ 2,196,626 Equity securities 523,923 83 — 524,006 Other invested assets 6,068 — — 6,068 Total $ 529,991 $ 2,178,911 $ 17,798 $ 2,726,700 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities 2019 Quoted in Active Significant Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities - available-for-sale U.S. government $ — $ 193,661 $ — $ 193,661 U.S. agency — 38,855 — 38,855 Non-U.S. government & agency — 7,628 — 7,628 Agency MBS — 420,165 — 420,165 ABS/CMBS/MBS* — 224,870 — 224,870 Corporate — 690,297 1,770 692,067 Municipal — 405,840 — 405,840 Total fixed income securities - available-for-sale $ — $ 1,981,316 $ 1,770 $ 1,983,086 Equity securities 460,630 — — 460,630 Other invested assets — — — — Total $ 460,630 $ 1,981,316 $ 1,770 $ 2,443,716 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities |
Summary of Changes in Balance of Level 3 Securities | (in thousands) Level 3 Securities Balance as of January 1, 2020 $ 1,770 Net realized and unrealized gains (losses) Included in net earnings as a part of: Net investment income (20 ) Net realized gains (90 ) Included in other comprehensive earnings 566 Total net realized and unrealized gains (losses) $ 456 Purchases 15,572 Balance as of December 31, 2020 $ 17,798 Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in net realized gains $ (90 ) Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in other comprehensive earnings $ 566 |
Schedule of Contractual Maturity of Securities | (in thousands) Amortized Cost Fair Value Due in one year or less $ 92,561 $ 93,689 Due after one year through five years 489,451 519,920 Due after five years through 10 years 525,083 575,940 Due after 10 years 357,134 386,633 ABS/CMBS/MBS* 597,238 620,444 Total available-for-sale $ 2,061,467 $ 2,196,626 * Asset-backed, commercial mortgage-backed and mortgage-backed securities |
Schedule of Amortized Cost and Fair Value of Available-for-sale Securities | The amortized cost and fair value of available-for-sale securities at December 31, 2020 and 2019 are presented in the tables below. Amortized cost does not include the $14.9 million and $13.5 million of accrued interest receivable as of December 31, 2020 and 2019, respectively. 2020 Allowance Gross Gross Amortized for Credit Unrealized Unrealized (in thousands) Cost Losses Gains Losses Fair Value U.S. government $ 170,110 $ — $ 13,504 $ (257 ) $ 183,357 U.S. agency 28,902 — 3,970 — 32,872 Non-U.S. government & agency 10,298 — 667 — 10,965 Agency MBS 384,015 — 18,789 (733 ) 402,071 ABS/CMBS/MBS* 213,223 (17 ) 5,580 (413 ) 218,373 Corporate 753,404 (380 ) 64,501 (933 ) 816,592 Municipal 501,515 — 31,099 (218 ) 532,396 Total fixed income $ 2,061,467 $ (397 ) $ 138,110 $ (2,554 ) $ 2,196,626 2019 Allowance Gross Gross Amortized for Credit Unrealized Unrealized (in thousands) Cost Losses Gains Losses Fair Value U.S. government $ 186,699 $ — $ 6,994 $ (32 ) $ 193,661 U.S. agency 36,535 — 2,362 (42 ) 38,855 Non-U.S. government & agency 7,333 — 295 — 7,628 Agency MBS 411,808 — 8,920 (563 ) 420,165 ABS/CMBS/MBS* 222,832 — 2,514 (476 ) 224,870 Corporate 659,640 — 33,245 (818 ) 692,067 Municipal 390,431 — 16,131 (722 ) 405,840 Total fixed income $ 1,915,278 $ — $ 70,461 $ (2,653 ) $ 1,983,086 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities |
Schedule of Debt Securities Available-for-sale Allowance for Credit Loss | (in thousands) 2020 Beginning balance $ — Adoption impact of ASU 2016-13 28 Increase to allowance from securities for which credit losses were not previously recorded 369 Ending balance $ 397 |
Schedule of Securities in an Unrealized Loss Position Segregated by Type and Length of Time in an Unrealized Loss Position | December 31, 2020 December 31, 2019 12 Mos. 12 Mos. (in thousands) < 12 Mos. & Greater Total < 12 Mos. & Greater Total U.S. government Fair value $ 5,680 $ — $ 5,680 $ 2,505 $ 8,463 $ 10,968 Amortized cost 5,937 — 5,937 2,506 8,494 11,000 Unrealized loss $ (257 ) $ — $ (257 ) $ (1 ) $ (31 ) $ (32 ) U.S. agency Fair value $ — $ — $ — $ 6,794 $ — $ 6,794 Amortized cost — — — 6,836 — 6,836 Unrealized loss $ — $ — $ — $ (42 ) $ — $ (42 ) Agency MBS Fair value $ 43,999 $ — $ 43,999 $ 21,548 $ 41,718 $ 63,266 Amortized cost 44,732 — 44,732 21,664 42,165 63,829 Unrealized loss $ (733 ) $ — $ (733 ) $ (116 ) $ (447 ) $ (563 ) ABS/CMBS/MBS* Fair value $ 32,771 $ 16,161 $ 48,932 $ 74,968 $ 18,036 $ 93,004 Amortized cost 33,094 16,251 49,345 75,332 18,148 93,480 Unrealized loss $ (323 ) $ (90 ) $ (413 ) $ (364 ) $ (112 ) $ (476 ) Corporate Fair value $ 52,655 $ 6,235 $ 58,890 $ 16,478 $ 9,348 $ 25,826 Amortized cost 53,440 6,383 59,823 16,950 9,694 26,644 Unrealized loss $ (785 ) $ (148 ) $ (933 ) $ (472 ) $ (346 ) $ (818 ) Municipal Fair value $ 25,676 $ — $ 25,676 $ 47,018 $ — $ 47,018 Amortized cost 25,894 — 25,894 47,740 — 47,740 Unrealized loss $ (218 ) $ — $ (218 ) $ (722 ) $ — $ (722 ) Total fixed income Fair value $ 160,781 $ 22,396 $ 183,177 $ 169,311 $ 77,565 $ 246,876 Amortized cost 163,097 22,634 185,731 171,028 78,501 249,529 Unrealized loss $ (2,316 ) $ (238 ) $ (2,554 ) $ (1,717 ) $ (936 ) $ (2,653 ) * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities |
Policy Acquisition Costs (Table
Policy Acquisition Costs (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Schedule of Policy Acquisition Costs Deferred and Amortized to Income | Policy acquisition costs deferred and amortized to income for the years ended December 31 are summarized as follows: (in thousands) 2020 2019 2018 Deferred policy acquisition costs (DAC), beginning of year $ 85,044 $ 84,934 $ 77,716 Deferred: Direct commissions $ 200,917 $ 185,164 $ 175,697 Premium taxes 14,783 14,395 12,654 Ceding commissions (42,115 ) (31,140 ) (22,190 ) Net deferred $ 173,585 $ 168,419 $ 166,161 Amortized 170,204 168,309 158,943 DAC, end of year $ 88,425 $ 85,044 $ 84,934 Policy acquisition costs: Amortized to expense - DAC $ 170,204 $ 168,309 $ 158,943 Period costs: Ceding commission - contingent (4,053 ) (3,034 ) (2,241 ) Other underwriting expenses 120,287 123,422 111,036 Total policy acquisition costs $ 286,438 $ 288,697 $ 267,738 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Reinsurance Disclosures [Abstract] | |
Schedule of Premiums Written and Earned Along with Losses and Settlement Expenses Incurred | Premiums written and earned along with losses and settlement expenses incurred for the years ended December 31 are summarized as follows: (in thousands) 2020 2019 2018 WRITTEN Direct $ 1,107,303 $ 1,039,955 $ 934,913 Reinsurance assumed 29,129 25,047 48,303 Reinsurance ceded (244,344 ) (204,665 ) (160,041 ) Net $ 892,088 $ 860,337 $ 823,175 EARNED Direct $ 1,062,608 $ 981,121 $ 896,234 Reinsurance assumed 27,651 40,173 41,926 Reinsurance ceded (224,512 ) (182,183 ) (146,794 ) Net $ 865,747 $ 839,111 $ 791,366 LOSSES AND SETTLEMENT EXPENSES INCURRED Direct $ 608,638 $ 521,055 $ 560,421 Reinsurance assumed 18,783 21,951 20,376 Reinsurance ceded (184,537 ) (129,590 ) (152,604 ) Net $ 442,884 $ 413,416 $ 428,193 |
Schedule of Net Reinsurance Balances Recoverable, After Consideration of Collateral, from Top Reinsurers | The following table displays net reinsurance balances recoverable, after consideration of collateral, from our top reinsurers as of December 31, 2020. These reinsurers all have financial strength ratings of A or better by AM Best and S&P’s ratings services. Also shown are the amounts of written premium ceded to these reinsurers during the calendar year 2020. Net Reinsurer Ceded AM Best S&P Exposure as of Percent of Premiums Percent of (dollars in thousands) Rating Rating 12/31/2020 Total Written Total Munich Re / HSB A+, Superior AA-, Very Strong $ 73,414 13.6 % $ 27,133 11.1 % Renaissance Re A+, Superior A+, Strong 41,385 7.7 % 20,314 8.3 % Endurance Re A+, Superior A+, Strong 39,673 7.3 % 13,941 5.7 % Berkley Insurance Co. A+, Superior A+, Strong 32,050 5.9 % 10,628 4.3 % Aspen UK Ltd. A, Excellent A-, Strong 31,768 5.9 % 7,590 3.1 % Scor Re A+, Superior AA-, Very Strong 28,855 5.3 % 14,516 5.9 % Hannover Ruckversicherung A+, Superior AA-, Very Strong 28,504 5.3 % 8,288 3.4 % Swiss Re / Westport Ins. Corp. A+, Superior AA-, Very Strong 26,679 4.9 % 1,556 0.6 % Toa Re A, Excellent A+, Strong 22,231 4.1 % 3,907 1.6 % Liberty Mutual A, Excellent A, Strong 21,142 3.9 % 7,288 3.0 % All other reinsurers* 195,100 36.1 % 129,183 53.0 % Total ceded exposure $ 540,801 100.0 % $ 244,344 100.0 % * All other reinsurance balances recoverable, when considered by individual reinsurer, are less than 2 percent of shareholders’ equity. |
Historical Loss And LAE Devel_2
Historical Loss And LAE Development (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Historical Loss And L A E Development Disclosure [Abstract] | |
Schedule of Reconciliation of Unpaid Losses and Settlement Expenses (LAE) | The following table is a reconciliation of our unpaid losses and settlement expenses (LAE) for the years 2020, 2019 and 2018: (in thousands) 2020 2019 2018 Unpaid losses and LAE at beginning of year: Gross $ 1,574,352 $ 1,461,348 $ 1,271,503 Ceded (384,517 ) (364,999 ) (301,991 ) Net $ 1,189,835 $ 1,096,349 $ 969,512 Adoption impact of ASU 2016-13 on reinsurance balances recoverable $ (1,345 ) $ — $ — Increase (decrease) in incurred losses and LAE: Current accident year $ 543,937 $ 488,700 $ 478,143 Prior accident years (101,053 ) (75,284 ) (49,950 ) Total incurred $ 442,884 $ 413,416 $ 428,193 Loss and LAE payments for claims incurred: Current accident year $ (93,077 ) $ (80,055 ) $ (76,050 ) Prior accident year (231,977 ) (239,875 ) (225,306 ) Total paid $ (325,054 ) $ (319,930 ) $ (301,356 ) Net unpaid losses and LAE at end of year $ 1,306,320 $ 1,189,835 $ 1,096,349 Unpaid losses and LAE at end of year: Gross $ 1,750,049 $ 1,574,352 $ 1,461,348 Ceded (443,729 ) (384,517 ) (364,999 ) Net $ 1,306,320 $ 1,189,835 $ 1,096,349 |
Schedule of Incurred and Paid Claims Development | Casualty - Primary Occurrence (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2020 For the Years Ended December 31, Cumulative Number of Reported AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 Total IBNR Claims 2011 $ 91,139 $ 98,428 $ 94,145 $ 89,622 $ 86,342 $ 83,181 $ 82,193 $ 82,248 $ 81,579 $ 80,905 $ 1,806 5,869 2012 91,807 78,406 65,893 61,072 59,028 59,488 60,328 60,465 60,591 2,078 5,187 2013 80,823 67,297 62,882 60,329 60,162 59,556 59,116 57,106 3,350 4,315 2014 88,092 79,497 71,592 67,237 66,389 66,702 65,636 5,871 4,284 2015 94,835 84,975 83,579 78,675 76,398 75,470 9,699 4,386 2016 101,950 96,753 90,611 85,449 83,374 16,214 4,284 2017 119,741 111,391 102,583 95,513 29,201 4,441 2018 141,513 130,281 125,731 56,310 4,707 2019 146,011 135,209 90,220 4,953 2020 145,171 115,016 3,662 Total $ 924,706 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 2011 $ 5,924 $ 17,124 $ 32,978 $ 48,822 $ 60,769 $ 67,358 $ 71,413 $ 74,814 $ 76,318 $ 76,561 2012 5,897 14,539 23,889 33,822 43,276 47,970 51,611 54,391 55,679 2013 6,334 13,021 22,366 34,786 40,609 45,753 47,783 49,411 2014 11,436 18,771 29,545 40,270 47,343 52,387 55,965 2015 10,157 19,902 33,020 45,056 54,270 58,866 2016 10,142 24,186 35,764 48,042 56,152 2017 13,154 25,933 38,783 52,823 2018 15,066 32,365 48,424 2019 15,698 30,673 2020 17,096 * Presented as unaudited required supplementary information. Total $ 501,650 All outstanding liabilities before 2011, net of reinsurance 9,767 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 432,823 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 12.0 % 13.2 % 15.7 % 17.1 % 12.2 % 7.7 % 5.0 % 3.9 % 2.0 % 0.3 % Casualty - Excess Occurrence (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2020 For the Years Ended December 31, Cumulative Number of Reported AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 Total IBNR Claims 2011 $ 26,272 $ 17,148 $ 17,443 $ 18,641 $ 19,160 $ 20,959 $ 21,295 $ 22,032 $ 21,825 $ 21,657 $ 514 582 2012 29,042 21,558 21,021 21,885 21,231 22,433 23,020 25,286 26,129 826 866 2013 39,984 34,824 26,857 25,425 25,599 24,922 25,496 25,073 1,693 947 2014 50,889 39,095 35,119 32,274 33,372 33,458 35,128 3,318 902 2015 53,672 50,857 47,392 42,840 43,328 42,446 8,724 692 2016 56,341 49,385 37,676 33,125 30,251 13,570 640 2017 62,863 55,868 48,363 44,737 22,078 617 2018 69,362 62,646 54,626 37,085 541 2019 88,078 89,691 63,384 512 2020 107,579 86,608 272 Total $ 477,317 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 2011 $ 2,169 $ 5,145 $ 6,981 $ 8,793 $ 10,772 $ 16,494 $ 17,769 $ 20,214 $ 21,036 $ 21,040 2012 1,315 3,573 8,843 15,380 16,879 17,747 19,310 21,993 22,202 2013 1,060 5,701 10,967 14,545 16,967 17,956 18,524 21,229 2014 1,899 4,006 11,002 18,852 22,541 23,376 26,068 2015 2,048 10,127 19,571 23,184 28,756 31,352 2016 1,068 3,396 7,441 10,054 12,703 2017 17 5,679 9,275 15,441 2018 2,506 5,823 10,801 2019 4,213 19,044 2020 2,901 * Presented as unaudited required supplementary information. Total $ 182,781 All outstanding liabilities before 2011, net of reinsurance 18,291 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 312,827 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 4.5 % 12.1 % 15.3 % 14.4 % 9.5 % 8.4 % 5.4 % 10.8 % 2.3 % 0.0 % Casualty - Claims Made (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2020 For the Years Ended December 31, Cumulative Number of Reported AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 Total IBNR Claims 2011 $ 17,416 $ 17,454 $ 12,260 $ 10,619 $ 8,510 $ 7,720 $ 7,852 $ 11,506 $ 14,031 $ 13,646 $ 160 682 2012 27,576 26,144 20,727 19,590 18,022 17,612 17,569 20,785 22,325 303 803 2013 40,095 41,488 44,054 40,288 38,473 37,959 38,352 37,974 1,448 1,042 2014 53,929 55,386 58,152 55,350 51,554 53,841 53,783 2,542 1,305 2015 55,006 47,831 42,206 39,906 39,653 39,619 4,699 1,337 2016 59,992 67,760 69,493 67,728 64,730 9,996 1,507 2017 60,572 62,450 62,714 57,450 8,836 1,645 2018 66,128 62,416 56,468 26,325 1,391 2019 62,918 61,712 39,891 1,502 2020 60,278 50,149 1,174 Total $ 467,985 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 2011 $ 330 $ 1,949 $ 4,508 $ 5,947 $ 5,637 $ 6,209 $ 6,835 $ 7,132 $ 7,239 $ 10,869 2012 433 4,086 6,898 9,218 10,968 14,378 15,621 16,450 16,892 2013 792 7,073 18,425 26,121 29,678 32,789 34,535 35,476 2014 1,705 9,775 27,923 35,755 40,080 44,127 46,122 2015 2,215 10,738 16,774 20,920 28,795 32,241 2016 2,060 14,558 27,465 39,370 47,999 2017 2,455 11,350 22,728 36,522 2018 1,964 11,965 18,840 2019 1,839 8,123 2020 1,488 * Presented as unaudited required supplementary information. Total $ 254,572 All outstanding liabilities before 2011, net of reinsurance 690 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 214,103 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 3.2 % 16.0 % 20.3 % 15.5 % 9.4 % 8.8 % 4.6 % 2.8 % 1.4 % 26.6 % Casualty - Transportation (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2020 For the Years Ended December 31, Cumulative Number of Reported AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 Total IBNR Claims 2011 $ 22,957 $ 23,479 $ 25,747 $ 25,272 $ 25,431 $ 25,376 $ 25,167 $ 25,614 $ 25,827 $ 26,081 $ 34 2,469 2012 21,452 22,203 22,924 23,511 23,689 23,620 23,305 23,731 23,845 114 2,286 2013 32,742 32,853 32,989 37,673 38,811 39,974 39,309 39,183 219 2,853 2014 38,361 33,015 36,452 38,590 40,202 40,508 41,156 475 3,099 2015 38,561 46,258 47,021 46,395 45,162 45,525 979 3,186 2016 50,430 53,519 54,105 52,277 52,818 2,589 3,941 2017 55,640 53,641 45,017 43,764 3,788 3,636 2018 57,597 54,592 38,719 9,200 3,396 2019 58,297 56,129 23,100 3,296 2020 43,573 20,704 1,533 Total $ 410,793 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 2011 $ 5,295 $ 9,485 $ 14,477 $ 19,443 $ 22,375 $ 23,537 $ 23,941 $ 24,377 $ 25,052 $ 25,791 2012 4,466 8,533 12,394 17,318 20,931 22,566 22,730 23,180 23,181 2013 5,306 11,978 19,761 28,220 33,480 35,923 37,327 37,915 2014 7,125 13,933 19,676 27,457 33,190 38,282 40,006 2015 6,984 20,709 29,554 37,222 39,339 41,345 2016 8,923 18,354 30,354 38,001 43,564 2017 7,979 17,070 24,090 30,260 2018 6,980 12,827 19,216 2019 7,148 15,852 2020 3,986 * Presented as unaudited required supplementary information. Total $ 281,116 All outstanding liabilities before 2011, net of reinsurance 175 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 129,852 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 16.0 % 18.5 % 18.0 % 17.9 % 11.5 % 6.9 % 2.5 % 1.7 % 1.3 % 2.8 % Property (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2020 For the Years Ended December 31, Cumulative Number of Reported AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 Total IBNR Claims 2011 $ 70,246 $ 66,924 $ 64,976 $ 63,724 $ 62,770 $ 62,570 $ 62,456 $ 62,875 $ 62,799 $ 62,754 $ 17 3,028 2012 85,485 80,155 79,181 77,569 79,175 78,125 78,161 78,002 77,924 26 2,640 2013 63,864 62,090 62,173 62,114 61,914 61,834 61,776 61,623 111 2,995 2014 56,587 49,441 48,801 48,761 49,217 49,444 49,479 101 4,561 2015 59,863 56,103 53,958 52,720 53,111 52,781 164 4,075 2016 62,900 55,594 55,384 55,930 55,424 505 3,377 2017 90,803 83,273 84,961 82,671 2,022 2,892 2018 89,091 83,457 79,961 6,172 2,333 2019 71,232 65,189 8,218 2,428 2020 118,247 40,590 2,492 Total $ 706,053 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 2011 $ 27,676 $ 48,756 $ 55,778 $ 59,099 $ 60,272 $ 61,428 $ 61,834 $ 62,729 $ 62,730 $ 62,733 2012 39,074 66,509 72,057 73,705 75,640 76,152 77,159 77,323 77,347 2013 32,208 50,840 57,407 59,259 60,520 61,195 61,325 61,335 2014 30,550 43,380 46,148 46,528 47,799 49,027 49,259 2015 32,184 49,348 50,197 51,290 52,078 52,342 2016 33,134 46,921 51,371 53,006 54,328 2017 41,314 66,818 74,415 78,360 2018 37,048 68,264 72,357 2019 30,703 51,740 2020 43,192 * Presented as unaudited required supplementary information. Total $ 602,993 All outstanding liabilities before 2011, net of reinsurance 323 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 103,383 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 50.9 % 31.6 % 7.3 % 3.0 % 2.1 % 1.3 % 0.7 % 0.6 % 0.0 % 0.0 % Surety (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2020 For the Years Ended December 31, Cumulative Number of Reported AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 Total IBNR Claims 2011 $ 13,842 $ 17,832 $ 17,792 $ 17,321 $ 16,766 $ 16,695 $ 16,480 $ 18,281 $ 18,293 $ 18,252 $ 16 1,681 2012 17,114 11,452 8,667 8,180 7,867 7,471 7,099 7,082 6,985 18 1,479 2013 16,080 7,516 6,170 5,399 5,271 5,231 5,209 5,107 33 1,407 2014 16,450 8,106 5,225 4,427 4,267 4,319 4,266 48 1,351 2015 16,958 12,957 11,113 10,456 9,792 9,521 243 1,231 2016 18,928 11,062 9,351 8,895 8,391 389 1,367 2017 16,127 8,641 8,798 8,116 673 1,724 2018 16,765 7,227 4,564 1,489 1,265 2019 14,785 7,205 4,663 953 2020 19,241 16,483 405 Total $ 91,648 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020 2011 $ 8,160 $ 16,932 $ 17,151 $ 17,403 $ 17,212 $ 17,086 $ 17,086 $ 17,013 $ 18,251 $ 18,234 2012 1,883 6,680 6,726 7,416 7,536 7,406 7,065 6,996 6,941 2013 1,116 2,856 4,701 4,911 5,098 5,150 5,128 5,061 2014 722 4,283 4,166 4,059 4,131 4,234 4,214 2015 3,192 6,719 7,695 9,436 9,183 9,186 2016 3,087 5,817 6,299 7,640 8,086 2017 979 2,862 7,062 7,221 2018 1,835 2,588 2,368 2019 336 2,433 2020 835 * Presented as unaudited required supplementary information. Total $ 64,579 All outstanding liabilities before 2011, net of reinsurance (60 ) Liabilities for losses and loss adjustment expenses, net of reinsurance $ 27,009 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 24.2 % 41.4 % 12.3 % 7.0 % 1.4 % 0.2 % -1.4 % -0.9 % 3.0 % -0.1 % |
Schedule of Reconciliation of the Net Incurred and Paid Loss Development Tables to the Liability for Unpaid Losses and Settlement Expenses in the Consolidated Balance Sheet | The following is a reconciliation of the net incurred and paid loss development tables to the liability for unpaid losses and settlement expenses in the consolidated balance sheet: (in thousands) December 31, 2020 December 31, 2019 Net outstanding liabilities: Casualty - Primary Occurrence $ 432,823 $ 403,910 Casualty - Excess Occurrence 312,827 256,153 Casualty - Claims Made 214,103 217,954 Casualty - Transportation 129,852 139,951 Property 103,383 71,965 Surety 27,009 24,988 Unallocated loss adjustment expenses 54,954 52,275 Allowance for uncollectible reinsurance balances recoverable on unpaid losses and settlement expenses 8,634 9,402 Other 22,735 13,237 Liabilities for unpaid loss and settlement expenses, net of reinsurance $ 1,306,320 $ 1,189,835 Reinsurance recoverable on unpaid claims: Casualty - Primary Occurrence $ 35,202 $ 31,122 Casualty - Excess Occurrence 88,528 98,518 Casualty - Claims Made 223,020 176,936 Casualty - Transportation 53,251 53,724 Property 40,257 21,438 Surety 4,017 11,199 Allowance for uncollectible reinsurance balances recoverable on unpaid losses and settlement expenses (8,634 ) (9,402 ) Other 8,088 982 Total reinsurance balances recoverable on unpaid losses and settlement expenses $ 443,729 $ 384,517 Total gross liability for unpaid loss and settlement expenses $ 1,750,049 $ 1,574,352 |
Schedule of Prior Accident Years' Loss Reserve Development by Segment | The following table summarizes our prior accident years’ loss reserve development by segment for 2020, 2019 and 2018: (in thousands) 2020 2019 2018 Casualty $ (75,075 ) $ (62,497 ) $ (33,252 ) Property (13,019 ) (4,461 ) (10,813 ) Surety (12,959 ) (8,326 ) (5,885 ) Total $ (101,053 ) $ (75,284 ) $ (49,950 ) |
Schedule of Paid and Unpaid Environmental, Asbestos and Mass Tort Claims Data (Including Incurred but not Reported Losses) | The following table represents paid and unpaid environmental, asbestos and mass tort claims data (including incurred but not reported losses) as of December 31, 2020, 2019 and 2018: (in thousands) 2020 2019 2018 Loss and LAE Payments (Cumulative): Gross $ 139,804 $ 137,485 $ 136,043 Ceded (69,219 ) (68,849 ) (68,638 ) Net $ 70,585 $ 68,636 $ 67,405 Unpaid Losses and LAE at End of Year: Gross $ 22,485 $ 22,616 $ 24,262 Ceded (4,619 ) (5,149 ) (5,373 ) Net $ 17,866 $ 17,467 $ 18,889 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Deferred Tax Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are summarized below. (in thousands) 2020 2019 Deferred tax assets: Tax discounting of unpaid losses and settlement expenses $ 21,096 $ 19,143 Unearned premium offset 19,862 18,755 Deferred compensation 2,829 2,981 Stock option expense 2,749 2,728 Lease liability 3,971 5,140 Other 389 275 Deferred tax assets before allowance $ 50,896 $ 49,022 Less valuation allowance — — Total deferred tax assets $ 50,896 $ 49,022 Deferred tax liabilities: Net unrealized appreciation of securities $ 77,639 $ 56,532 Deferred policy acquisition costs 18,569 17,859 Lease asset 3,402 4,690 Discounting of unpaid losses and settlement expenses - Tax Cuts and Jobs Act (TCJA) implementation offset 3,181 3,817 Fixed assets 3,439 3,008 Intangible assets 1,558 1,634 Undistributed earnings of unconsolidated investees 21,813 17,673 Other 1,530 536 Total deferred tax liabilities $ 131,131 $ 105,749 Net deferred tax liability $ (80,235 ) $ (56,727 ) |
Schedule of Reconciliation of Income Tax Expense (Benefit) Attributable to Income from Operations with Amounts Computed by Applying U.S. Federal Tax Rate to Pretax Income from Continuing Operations | Income tax expense (benefit) attributable to income from operations for the years ended December 31, 2020, 2019 and 2018, differed from the amounts computed by applying the U.S. federal tax rate of 21 percent to pretax income from continuing operations as demonstrated in the following table: (in thousands) 2020 2019 2018 Provision for income taxes at the statutory federal tax rates $ 39,867 21.0 % $ 48,874 21.0 % $ 14,192 21.0 % Increase (reduction) in taxes resulting from: Enactment of TCJA — — % — — % (2,268 ) (3.4 ) % Excess tax benefit on share-based compensation (3,537 ) (1.8 ) % (3,958 ) (1.7 ) % (4,533 ) (6.7 ) % Tax-exempt interest income (1,293 ) (0.7 ) % (1,238 ) (0.5 ) % (1,795 ) (2.7 ) % Dividends received deduction (883 ) (0.5 ) % (823 ) (0.4 ) % (775 ) (1.1 ) % Investment tax credit (2,435 ) (1.3 ) % — — % — — % ESOP dividends paid deduction (1,083 ) (0.6 ) % (1,122 ) (0.5 ) % (1,184 ) (1.8 ) % Unconsolidated investee dividends (479 ) (0.2 ) % (1,802 ) (0.8 ) % — — % Nondeductible expenses 1,878 1.0 % 1,649 0.7 % 389 0.6 % Other items, net 715 0.4 % (488 ) (0.1 ) % (624 ) (0.9 ) % Total $ 32,750 17.3 % $ 41,092 17.7 % $ 3,402 5.0 % |
Employee Benefits (Tables)
Employee Benefits (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Summary of Option Activity | The following table summarize option activity in 2020: Weighted Aggregate Weighted Average Intrinsic Average Remaining Value Options Exercise Price Contractual Life (in 000’s) Outstanding as of January 1, 2020 1,667,290 $ 62.52 Granted 322,479 92.86 Exercised (351,025 ) 52.34 Cancelled or forfeited (6,410 ) 73.42 Outstanding as of December 31, 2020 1,632,334 $ 70.67 5.16 $ 54,657 Exercisable at December 31, 2020 658,290 $ 60.35 3.74 $ 28,834 |
Summary of Weighted Average Grant-date Assumptions and Weighted Average Fair Values | The fair value of options were estimated using a Black-Scholes based option pricing model with the following weighted-average grant-date assumptions and weighted-average fair values as of December 31: 2020 2019 2018 Weighted-average fair value of grants $ 13.24 $ 13.49 $ 10.58 Risk-free interest rates 0.39 % 2.26 % 2.72 % Dividend yield 2.30 % 2.69 % 2.98 % Expected volatility 22.67 % 22.71 % 22.87 % Expected option life 4.96 years 4.96 years 5.07 years |
Schedule of Restricted Stock Units Activity | Weighted Average Grant Date RSUs Fair Value Nonvested at January 1, 2020 49,733 $ 70.07 Granted 18,430 93.24 Reinvested 920 96.14 Vested (20,837 ) 65.24 Forfeited (588 ) 79.54 Nonvested at December 31, 2020 47,658 $ 81.53 |
Statutory Information and Div_2
Statutory Information and Dividend Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Statutory Information And Dividend Restrictions Disclosure [Abstract] | |
Schedule of Selected Information for Insurance Subsidiaries | (in thousands) 2020 2019 2018 Consolidated net income, statutory basis $ 120,329 $ 129,625 $ 135,791 Consolidated surplus, statutory basis $ 1,121,592 $ 1,029,671 $ 829,775 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense and Other Lease Information | The components of lease expense and other lease information as of and during the years ended December 31, 2020 and 2019 are as follows: (in thousands) 2020 2019 Operating lease cost $ 5,504 $ 5,772 Variable lease cost 1,346 1,850 Sublease income (262 ) — Total lease cost $ 6,588 $ 7,622 Cash paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases $ 5,963 $ 5,711 ROU assets obtained in exchange for new operating lease liabilities $ 81 $ 1,388 Reduction to ROU assets resulting from reduction to lease liabilities $ 18 $ 1,279 Other non-cash reductions to ROU assets $ 1,192 $ — (in thousands) 2020 2019 Operating lease ROU assets $ 16,200 $ 22,335 Operating lease liabilities $ 19,072 $ 24,475 Weighted-average remaining lease term - operating leases 3.87 years 4.69 years Weighted-average discount rate - operating leases 2.32 % 2.33 % |
Schedule of Future Minimum Lease Payments under Non-cancellable Leases | Future minimum lease payments under non-cancellable leases as of December 31, 2020 were as follows: (in thousands) 2020 2021 $ 5,992 2022 5,915 2023 4,424 2024 2,334 2025 802 Thereafter 563 Total future minimum lease payments $ 20,030 Less imputed interest (958 ) Total operating lease liability $ 19,072 |
Operating Segment Information (
Operating Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Revenues and Net Earnings by Segment | REVENUES (in thousands) 2020 2019 2018 Casualty $ 569,521 $ 558,458 $ 523,472 Property 183,720 164,022 149,261 Surety 112,506 116,631 118,633 Net premiums earned $ 865,747 $ 839,111 $ 791,366 Net investment income 67,893 68,870 62,085 Net realized gains 17,885 17,520 63,407 Net unrealized gains (losses) on equity securities 32,101 78,090 (98,735 ) Total $ 983,626 $ 1,003,591 $ 818,123 INSURANCE EXPENSES (in thousands) 2020 2019 2018 Loss and settlement expenses: Casualty $ 322,099 $ 330,156 $ 329,763 Property 111,356 73,614 83,822 Surety 9,429 9,646 14,608 Total loss and settlement expenses $ 442,884 $ 413,416 $ 428,193 Policy acquisition costs: Casualty $ 162,058 $ 166,499 $ 151,007 Property 59,926 55,986 51,830 Surety 64,454 66,212 64,901 Total policy acquisition costs $ 286,438 $ 288,697 $ 267,738 Other insurance expenses: Casualty $ 40,937 $ 41,202 $ 31,562 Property 15,620 16,279 12,725 Surety 10,271 11,949 9,516 Total other insurance expenses $ 66,828 $ 69,430 $ 53,803 Total $ 796,150 $ 771,543 $ 749,734 NET EARNINGS (in thousands) 2020 2019 2018 Casualty $ 44,427 $ 20,601 $ 11,140 Property (3,182 ) 18,143 884 Surety 28,352 28,824 29,608 Net underwriting income $ 69,597 $ 67,568 $ 41,632 Net investment income 67,893 68,870 62,085 Net realized gains 17,885 17,520 63,407 Net unrealized gains (losses) on equity securities 32,101 78,090 (98,735 ) Interest on debt (7,603 ) (7,588 ) (7,437 ) General corporate expense (10,265 ) (12,686 ) (9,427 ) Equity in earnings of unconsolidated investees 20,233 20,960 16,056 Total earnings before incomes taxes $ 189,841 $ 232,734 $ 67,581 Income tax expense 32,750 41,092 3,402 Net earnings $ 157,091 $ 191,642 $ 64,179 |
Summary of Revenue by Major Product Type | The following table further summarizes revenues by major product type within each segment: NET PREMIUMS EARNED Year ended December 31, (in thousands) 2020 2019 2018 CASUALTY Commercial excess and personal umbrella $ 178,214 $ 140,483 $ 124,350 General liability 91,653 98,880 93,928 Professional services 85,196 81,329 79,951 Commercial transportation 64,624 83,213 81,053 Small commercial 63,357 55,701 51,519 Executive products 26,509 27,088 21,326 Other casualty 59,968 71,764 71,345 Total $ 569,521 $ 558,458 $ 523,472 PROPERTY Marine $ 81,852 $ 74,887 $ 59,795 Commercial property 79,406 68,310 71,501 Specialty personal 19,596 19,316 16,901 Other property 2,866 1,509 1,064 Total $ 183,720 $ 164,022 $ 149,261 SURETY Commercial $ 42,872 $ 43,553 $ 43,469 Miscellaneous 42,292 44,721 46,968 Contract 27,342 28,357 28,196 Total $ 112,506 $ 116,631 $ 118,633 Grand total $ 865,747 $ 839,111 $ 791,366 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Description of Business - Additional Information (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020companystate$ / shares | Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2019$ / shares | Dec. 31, 2017$ / shares | |
DESCRIPTION OF BUSINESS | ||||
Number of insurance companies through which the entity conducts operations | company | 3 | |||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 1 |
Reclassification From Common Stock | $ 66,400 | |||
Reclassification Into Paid In Capital | 66,400 | |||
Common stock | ||||
DESCRIPTION OF BUSINESS | ||||
Reclassification due to change in par value | (66,409) | |||
Paid-in Capital | ||||
DESCRIPTION OF BUSINESS | ||||
Reclassification due to change in par value | $ 66,409 | |||
RLI Ins. | ||||
DESCRIPTION OF BUSINESS | ||||
Number of states in which entity operates | state | 50 | |||
Mt. Hawley Insurance Company | ||||
DESCRIPTION OF BUSINESS | ||||
Number of states in which entity operates | state | 50 | |||
Contractors Bonding and Insurance Company | ||||
DESCRIPTION OF BUSINESS | ||||
Number of states in which entity operates | state | 50 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Accounting Standards - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Retained earnings | $ 1,084,217 | $ 1,014,046 |
Accumulated other comprehensive earnings | $ 108,714 | $ 52,473 |
Percentage Of Fixed Income Portfolio Rated A Or Better | 83.00% | 85.00% |
Accounting Standards Update 2016-13 | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Change in accounting principle, accounting standards update, adopted | true | |
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2020 | |
Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Retained earnings | $ 1,100 | |
Maximum | Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Accumulated other comprehensive earnings | $ 100 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property and Equipment - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Equipment | Maximum | |
PROPERTY AND EQUIPMENT | |
Useful life | 10 years |
Equipment | Minimum | |
PROPERTY AND EQUIPMENT | |
Useful life | 3 years |
Buildings and improvements | Maximum | |
PROPERTY AND EQUIPMENT | |
Useful life | 30 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Investment in Unconsolidated Investees (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)Item | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
INVESTMENT IN UNCONSOLIDATED INVESTEES: | |||
Investment amount | $ 128,382 | $ 103,836 | |
Investee earnings recorded in income | 20,233 | 20,960 | $ 16,056 |
Reinsurance assumed | 29,129 | 25,047 | 48,303 |
Net premiums earned | 865,747 | 839,111 | 791,366 |
Undistributed earnings from equity method investees included in retained earnings | 106,000 | ||
Dividends received | 4,675 | 13,200 | 9,900 |
Investments in Unconsolidated Investees | |||
INVESTMENT IN UNCONSOLIDATED INVESTEES: | |||
Investee earnings recorded in income | $ 70,400 | 77,300 | 50,200 |
Maui Jim Inc. | |||
INVESTMENT IN UNCONSOLIDATED INVESTEES: | |||
Equity ownership interest (as a percent) | 40.00% | ||
Investment amount | $ 90,900 | 79,600 | |
Investee earnings recorded in income | $ 10,400 | 13,600 | 12,500 |
Dividends received | 13,200 | ||
Prime Holdings Insurance Services, Inc. (Prime) | |||
INVESTMENT IN UNCONSOLIDATED INVESTEES: | |||
Equity ownership interest (as a percent) | 23.00% | ||
Investment amount | $ 32,700 | 24,200 | |
Investee earnings recorded in income | $ 10,800 | 7,400 | 3,600 |
Number of insurance carriers Company writes through | Item | 2 | ||
Reinsurance assumed | $ 15,700 | 13,100 | 41,100 |
Net premiums earned | 14,300 | $ 28,700 | $ 34,200 |
Dividends received | $ 4,700 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Summarized Financial Information of Equity Method Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
INVESTMENT IN UNCONSOLIDATED INVESTEES: | ||||
Total assets | $ 3,938,485 | $ 3,545,721 | ||
Total liabilities | 2,802,507 | 2,550,333 | ||
Total equity | 1,135,978 | 995,388 | $ 806,842 | $ 853,598 |
Investments in Unconsolidated Investees | ||||
INVESTMENT IN UNCONSOLIDATED INVESTEES: | ||||
Total assets | 837,200 | 718,500 | ||
Total liabilities | 473,200 | 420,800 | ||
Total equity | $ 364,000 | $ 297,700 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||
Goodwill | $ 46,062 | $ 46,062 |
State insurance licenses | 7,500 | 7,500 |
Definite-lived intangibles, net of accumulated amortization of $3,878 at 12/31/20 and $3,470 at 12/31/19 | 157 | 565 |
Total intangibles | 7,657 | 8,065 |
Total goodwill and intangibles | 53,719 | 54,127 |
Surety | ||
Business Acquisition [Line Items] | ||
Goodwill | 40,816 | 40,816 |
Casualty | ||
Business Acquisition [Line Items] | ||
Goodwill | $ 5,246 | $ 5,246 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Intangible Assets - Schedule of Goodwill and Intangible Assets (Parenthetical) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Accumulated amortization of definite-lived intangibles | $ 3,878 | $ 3,470 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Intangible Assets - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | |||
Goodwill and intangible asset impairment | $ 0 | ||
Goodwill and intangibles | 53,719,000 | $ 54,127,000 | |
Amortization of intangible assets | 400,000 | $ 400,000 | $ 400,000 |
Expected amortization in 2021 | 100,000 | ||
Maximum | |||
Business Acquisition [Line Items] | |||
Expected amortization in 2022 | $ 100,000 | ||
Casualty Segment | Medical Professional Liability | |||
Business Acquisition [Line Items] | |||
Goodwill and intangible asset impairment | 4,400,000 | ||
Impairment of intangible assets, finite-lived | 800,000 | ||
Goodwill impairment loss | 3,600,000 | ||
Goodwill and intangibles | $ 0 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Schedule of Reconciliation of Numerator and Denominator of the Basic and Diluted Earnings Per Share Computations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Basic EPS, Income (Numerator) | |||
Income available to common shareholders | $ 157,091 | $ 191,642 | $ 64,179 |
Diluted EPS, Income (Numerator) | |||
Income available to common shareholders and assumed conversions | $ 157,091 | $ 191,642 | $ 64,179 |
Basic EPS, Weighted Average Shares (Denominator) | |||
Number of shares outstanding | 45,000 | 44,734 | 44,358 |
Effect of Dilutive Securities, Shares (Denominator) | |||
Stock options | 376 | 523 | 477 |
Diluted EPS, Weighted Average Shares (Denominator) | |||
Number of shares outstanding | 45,376 | 45,257 | 44,835 |
Earnings Per Share, Diluted, Other Disclosures | |||
Anti-dilutive options excluded from diluted EPS | 384 | 65 | 65 |
Basic EPS, Per Share Amount | |||
Basic net earnings per share (in dollars per share) | $ 3.49 | $ 4.28 | $ 1.45 |
Diluted EPS, Per Share Amount | |||
Diluted earnings per share (in dollars per share) | $ 3.46 | $ 4.23 | $ 1.43 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Comprehensive Earnings - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2018 | |
COMPREHENSIVE EARNINGS | ||||
Tax rate used (as a percent) | 21.00% | 21.00% | 21.00% | |
Other comprehensive income (loss), tax | $ 14,900 | $ 17,800 | $ (9,000) | |
Accumulated other comprehensive earnings | $ 108,714 | $ 52,473 | ||
Reclassification of stranded tax effect per ASU 2018-02 | $ 3,700 | |||
Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-01 | ||||
COMPREHENSIVE EARNINGS | ||||
Accumulated other comprehensive earnings | $ (142,200) |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Schedule of Changes in the Balance of Each Component of Accumulated Other Comprehensive Earnings (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in the balance of each component of accumulated other comprehensive earnings | |||
Beginning balance | $ 52,473 | ||
Net current period other comprehensive earnings (loss) | 56,219 | $ 67,045 | $ (33,997) |
Reclassification of stranded tax effect per ASU 2018-02 | 3,700 | ||
Ending balance | 108,714 | 52,473 | |
Balance of securities for which an allowance for credit losses has not been recognized in net earnings | 470 | ||
Unrealized Gains and Losses on Available-for-Sale Securities | |||
Changes in the balance of each component of accumulated other comprehensive earnings | |||
Beginning balance | 52,473 | (14,572) | 157,919 |
Other comprehensive earnings before reclassifications | 58,986 | 69,560 | (35,763) |
Amounts reclassified from accumulated other comprehensive earnings | (2,767) | (2,515) | 1,766 |
Reclassification of stranded tax effect per ASU 2018-02 | 3,725 | ||
Ending balance | 108,714 | 52,473 | (14,572) |
Unrealized Gains and Losses on Available-for-Sale Securities | Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | |||
Changes in the balance of each component of accumulated other comprehensive earnings | |||
Beginning balance | 22 | ||
Ending balance | 22 | ||
Unrealized Gains and Losses on Available-for-Sale Securities | Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-01 | |||
Changes in the balance of each component of accumulated other comprehensive earnings | |||
Beginning balance | (142,219) | ||
Unrealized Gains and Losses on Available-for-Sale Securities | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Changes in the balance of each component of accumulated other comprehensive earnings | |||
Beginning balance | $ 52,495 | (14,572) | 15,700 |
Ending balance | $ 52,495 | $ (14,572) |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Schedule of Effects of Reclassifications out of Accumulated Other Comprehensive Earnings (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reclassification Adjustment Out of Accumulated Other Comprehensive Income | |||
Net realized gains | $ 17,885 | $ 17,520 | $ 63,624 |
Other-than-temporary-impairment losses on investments | (217) | ||
Earnings before income taxes | 189,841 | 232,734 | 67,581 |
Income tax expense | (32,750) | (41,092) | (3,402) |
Net earnings | 157,091 | 191,642 | 64,179 |
Unrealized Gains and Losses on Available-for-Sale Securities | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment Out of Accumulated Other Comprehensive Income | |||
Net realized gains | 3,872 | 3,184 | (2,018) |
Credit losses presented within net realized gains | (369) | ||
Other-than-temporary-impairment losses on investments | (217) | ||
Earnings before income taxes | 3,503 | 3,184 | (2,235) |
Income tax expense | (736) | (669) | 469 |
Net earnings | $ 2,767 | $ 2,515 | $ (1,766) |
Summary of Significant Accou_16
Summary of Significant Accounting Policies - Insurance Risk - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||||
Unpaid losses and settlement expenses | $ 1,750,049 | $ 1,574,352 | $ 1,461,348 | $ 1,271,503 |
Summary of Significant Accou_17
Summary of Significant Accounting Policies - Catastrophe Exposures - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
California Earthquake | |
Liability For Catastrophe Claims [Line Items] | |
Catastrophe reinsurance | $ 500 |
First-dollar retention | 25 |
Non-California Earthquake | |
Liability For Catastrophe Claims [Line Items] | |
Catastrophe reinsurance | 525 |
First-dollar retention | 25 |
Earthquake | |
Liability For Catastrophe Claims [Line Items] | |
First-dollar retention | 25 |
Other Perils | |
Liability For Catastrophe Claims [Line Items] | |
Catastrophe reinsurance | 375 |
First-dollar retention | $ 25 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | $ 72,862 | $ 73,988 | $ 66,614 |
Less investment expenses | (4,969) | (5,118) | (4,529) |
Net investment income | 67,893 | 68,870 | 62,085 |
Debt Securities | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 59,755 | 60,364 | 54,491 |
Equity Securities | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 9,728 | 9,950 | 9,814 |
Cash and Short-term Investments | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | $ 3,379 | $ 3,674 | $ 2,309 |
Investments - Schedule of Preta
Investments - Schedule of Pretax Net Realized Investment Gains (Losses) and Net Changes in Unrealized Gains (Losses) on Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Investment1 [Line Items] | |||
Net realized gains (losses), excluding OTTI | $ 17,885 | $ 17,520 | $ 63,624 |
Other-than-temporary-impairment losses on investments | (217) | ||
Net unrealized gains (losses) on equity securities | 32,101 | 78,090 | (98,735) |
Net changes in unrealized gains (losses) on investments: | 71,163 | 84,867 | (43,035) |
Net realized gains (losses) and changes in unrealized gains (losses) on investments | 121,149 | 180,477 | (78,363) |
Debt Securities | Available for sale securities | |||
Investment1 [Line Items] | |||
Net realized gains (losses), excluding OTTI | 3,872 | 3,184 | (2,018) |
Net changes in unrealized gains (losses) on investments: | 67,350 | 83,758 | (41,778) |
Equity Securities | |||
Investment1 [Line Items] | |||
Net realized gains (losses), excluding OTTI | 15,796 | 14,445 | 69,868 |
Net unrealized gains (losses) on equity securities | 32,317 | 78,389 | (98,380) |
Other | |||
Investment1 [Line Items] | |||
Net realized gains (losses), excluding OTTI | (1,783) | (109) | (4,226) |
Net unrealized gains (losses) on equity securities | (216) | (299) | (355) |
Net changes in unrealized gains (losses) on investments: | 369 | ||
Equity Method Investments | |||
Investment1 [Line Items] | |||
Net changes in unrealized gains (losses) on investments: | $ 3,444 | $ 1,109 | $ (1,257) |
Investments - Disposition of Fi
Investments - Disposition of Fixed Income and Equity Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SALES | Debt Securities | Available for sale securities | |||
Summary of the disposition of fixed income and equity securities | |||
Proceeds From Sales | $ 84,697 | $ 196,799 | $ 394,318 |
Gross Realized Gains | 5,454 | 4,368 | 3,131 |
Gross Realized Losses | (1,777) | (2,167) | (5,349) |
Net Realized Gain (Loss) | 3,677 | 2,201 | (2,218) |
SALES | Equity Securities | |||
Summary of the disposition of fixed income and equity securities | |||
Proceeds From Sales | 79,368 | 62,172 | 147,838 |
Gross Realized Gains | 25,338 | 16,938 | 71,065 |
Gross Realized Losses | (9,542) | (2,493) | (1,197) |
Net Realized Gain (Loss) | 15,796 | 14,445 | 69,868 |
CALLS/MATURITIES | Debt Securities | Available for sale securities | |||
Summary of the disposition of fixed income and equity securities | |||
Proceeds From Sales | 283,107 | 201,698 | 187,380 |
Gross Realized Gains | 821 | 1,004 | 311 |
Gross Realized Losses | (27) | (21) | (111) |
Net Realized Gain (Loss) | $ 794 | $ 983 | $ 200 |
Investments - Assets Measured a
Investments - Assets Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets measured at Fair Value | ||
Available-for-sale fixed income | $ 2,196,626 | $ 1,983,086 |
Equity securities | 524,006 | 460,630 |
Municipal | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 532,396 | 405,840 |
Fair Value Measured on Recurring Basis | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 2,196,626 | 1,983,086 |
Equity securities | 524,006 | 460,630 |
Other invested assets | 6,068 | |
Total assets at fair value | 2,726,700 | 2,443,716 |
Fair Value Measured on Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets measured at Fair Value | ||
Equity securities | 523,923 | 460,630 |
Other invested assets | 6,068 | |
Total assets at fair value | 529,991 | 460,630 |
Fair Value Measured on Recurring Basis | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 2,178,828 | 1,981,316 |
Equity securities | 83 | |
Total assets at fair value | 2,178,911 | 1,981,316 |
Fair Value Measured on Recurring Basis | Significant Unobservable Inputs (Level 3) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 17,798 | 1,770 |
Total assets at fair value | 17,798 | 1,770 |
Fair Value Measured on Recurring Basis | U.S. government | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 183,357 | 193,661 |
Fair Value Measured on Recurring Basis | U.S. government | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 183,357 | 193,661 |
Fair Value Measured on Recurring Basis | U.S. Agency | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 32,872 | 38,855 |
Fair Value Measured on Recurring Basis | U.S. Agency | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 32,872 | 38,855 |
Fair Value Measured on Recurring Basis | Non-U.S. govt. & agency | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 10,965 | 7,628 |
Fair Value Measured on Recurring Basis | Non-U.S. govt. & agency | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 10,965 | 7,628 |
Fair Value Measured on Recurring Basis | Agency MBS | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 402,071 | 420,165 |
Fair Value Measured on Recurring Basis | Agency MBS | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 402,071 | 420,165 |
Fair Value Measured on Recurring Basis | ABS/CMBS/MBS | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 218,373 | 224,870 |
Fair Value Measured on Recurring Basis | ABS/CMBS/MBS | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 218,373 | 224,870 |
Fair Value Measured on Recurring Basis | Corporate Debt | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 816,592 | 692,067 |
Fair Value Measured on Recurring Basis | Corporate Debt | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 798,794 | 690,297 |
Fair Value Measured on Recurring Basis | Corporate Debt | Significant Unobservable Inputs (Level 3) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 17,798 | 1,770 |
Fair Value Measured on Recurring Basis | Municipal | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 532,396 | 405,840 |
Fair Value Measured on Recurring Basis | Municipal | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | $ 532,396 | $ 405,840 |
Investments - Summary of Change
Investments - Summary of Changes in Balance of Level 3 securities (Details) - Regulation D Private Placement Fixed Income Securities $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Summary of changes in Level 3 securities | |
Beginning balance | $ 1,770 |
Net investment income | (20) |
Net realized gains | (90) |
Included in other comprehensive earnings | 566 |
Total net realized and unrealized gains (losses) | 456 |
Purchases | 15,572 |
Ending balance | 17,798 |
Other Comprehensive Earnings (Loss) | |
Summary of changes in Level 3 securities | |
Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in net realized gains | 566 |
Net Realized Gains (Losses) | |
Summary of changes in Level 3 securities | |
Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in net realized gains | $ (90) |
Investments - Amortized Cost an
Investments - Amortized Cost and Fair Value of Available-for-sale Fixed Income Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Amortized Cost | ||
Due in one year or less | $ 92,561 | |
Due after one year through five years | 489,451 | |
Due after five years through 10 years | 525,083 | |
Due after 10 years | 357,134 | |
ABS/CMBS/MBS* | 597,238 | |
Total available-for-sale | 2,061,467 | $ 1,915,278 |
Fair Value | ||
Due in one year or less | 93,689 | |
Due after one year through five years | 519,920 | |
Due after five years through 10 years | 575,940 | |
Due after 10 years | 386,633 | |
ABS/CMBS/MBS* | 620,444 | |
Total available-for-sale | $ 2,196,626 | $ 1,983,086 |
Investments - Additional Inform
Investments - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)security | Dec. 31, 2019USD ($) | |
Investment Holdings [Line Items] | ||
Accrued investment income | $ 16,126,000 | $ 14,587,000 |
Debt Securities | ||
Investment Holdings [Line Items] | ||
Accrued investment income | $ 14,900 | 13,500 |
Number of debt securities for which there is an allowance for credit losses | security | 21 | |
Net realized gains | $ 600,000 | |
Other-than-temporary impairment loss, debt securities, available-for-sale, recognized in earnings | 0 | |
Number of debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded | security | 142 | |
Unrealized loss | $ 2,554,000 | 2,653,000 |
Unrealized losses as percentage of fixed income portfolio cost basis | 0.10% | |
Unrealized losses relative to total invested assets (as a percent) | 0.10% | |
Number of unrealized loss positions | security | 142 | |
Number of securities in unrealized loss positions for 12 months or longer | security | 31 | |
ABS/CMBS/MBS | ||
Investment Holdings [Line Items] | ||
Percentage of securities of portfolio rated with highest credit rating by by one or more major rating agency | 94.00% | |
Unrealized loss | $ 413,000 | 476,000 |
Municipal | ||
Investment Holdings [Line Items] | ||
General obligations to state and local governments Percentage | 43.00% | |
Revenue based obligations percentage | 57.00% | |
Percentage of securities of portfolio rated as AA or better | 86.00% | |
Percentage of securities of portfolio rated as A or better | 99.00% | |
Unrealized loss | $ 218,000 | $ 722,000 |
Investments - Amortized Cost _2
Investments - Amortized Cost and Fair Value of Available-for-sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investment1 [Line Items] | ||
Total available-for-sale | $ 2,061,467 | $ 1,915,278 |
Allowance for Credit Losses | (397) | 0 |
Gross Unrealized Gains | 138,110 | 70,461 |
Gross Unrealized Losses | (2,554) | (2,653) |
Fair Value | 2,196,626 | 1,983,086 |
U.S. government | ||
Investment1 [Line Items] | ||
Total available-for-sale | 170,110 | 186,699 |
Gross Unrealized Gains | 13,504 | 6,994 |
Gross Unrealized Losses | (257) | (32) |
Fair Value | 183,357 | 193,661 |
U.S. Agency | ||
Investment1 [Line Items] | ||
Total available-for-sale | 28,902 | 36,535 |
Gross Unrealized Gains | 3,970 | 2,362 |
Gross Unrealized Losses | (42) | |
Fair Value | 32,872 | 38,855 |
Non-U.S. govt. & agency | ||
Investment1 [Line Items] | ||
Total available-for-sale | 10,298 | 7,333 |
Gross Unrealized Gains | 667 | 295 |
Fair Value | 10,965 | 7,628 |
Agency MBS | ||
Investment1 [Line Items] | ||
Total available-for-sale | 384,015 | 411,808 |
Gross Unrealized Gains | 18,789 | 8,920 |
Gross Unrealized Losses | (733) | (563) |
Fair Value | 402,071 | 420,165 |
ABS/CMBS/MBS | ||
Investment1 [Line Items] | ||
Total available-for-sale | 213,223 | 222,832 |
Allowance for Credit Losses | (17) | |
Gross Unrealized Gains | 5,580 | 2,514 |
Gross Unrealized Losses | (413) | (476) |
Fair Value | 218,373 | 224,870 |
Corporate Debt | ||
Investment1 [Line Items] | ||
Total available-for-sale | 753,404 | 659,640 |
Allowance for Credit Losses | (380) | |
Gross Unrealized Gains | 64,501 | 33,245 |
Gross Unrealized Losses | (933) | (818) |
Fair Value | 816,592 | 692,067 |
Municipal | ||
Investment1 [Line Items] | ||
Total available-for-sale | 501,515 | 390,431 |
Gross Unrealized Gains | 31,099 | 16,131 |
Gross Unrealized Losses | (218) | (722) |
Fair Value | $ 532,396 | $ 405,840 |
Investments - Schedule of Debt
Investments - Schedule of Debt Securities Available-for-sale Allowance for Credit Loss (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Investment Holdings [Line Items] | |
Beginning balance | $ 0 |
Increase to allowance from securities for which credit losses were not previously recorded | 369 |
Ending balance | 397 |
ASU 2016-13 | |
Investment Holdings [Line Items] | |
Adoption impact of ASU 2016-13 | $ 28 |
Investments - Schedule of Secur
Investments - Schedule of Securities in an Unrealized Loss Position Segregated by Type and Length of Time in an Unrealized Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
U.S. government | ||
Fair Value | ||
Less than 12 months | $ 5,680 | $ 2,505 |
12 months and greater | 8,463 | |
Total Fair Value | 5,680 | 10,968 |
Amortized Cost | ||
Amortized cost, less than 12 months | 5,937 | 2,506 |
12 months and greater | 8,494 | |
Total Cost or Amortized Cost | 5,937 | 11,000 |
Unrealized Loss | ||
Less than 12 months | (257) | (1) |
12 months and greater | (31) | |
Total Unrealized Loss | (257) | (32) |
U.S. Agency | ||
Fair Value | ||
Less than 12 months | 6,794 | |
Total Fair Value | 6,794 | |
Amortized Cost | ||
Amortized cost, less than 12 months | 6,836 | |
Total Cost or Amortized Cost | 6,836 | |
Unrealized Loss | ||
Less than 12 months | (42) | |
Total Unrealized Loss | (42) | |
Agency MBS | ||
Fair Value | ||
Less than 12 months | 43,999 | 21,548 |
12 months and greater | 41,718 | |
Total Fair Value | 43,999 | 63,266 |
Amortized Cost | ||
Amortized cost, less than 12 months | 44,732 | 21,664 |
12 months and greater | 42,165 | |
Total Cost or Amortized Cost | 44,732 | 63,829 |
Unrealized Loss | ||
Less than 12 months | (733) | (116) |
12 months and greater | (447) | |
Total Unrealized Loss | (733) | (563) |
Corporate Debt | ||
Fair Value | ||
Less than 12 months | 52,655 | 16,478 |
12 months and greater | 6,235 | 9,348 |
Total Fair Value | 58,890 | 25,826 |
Amortized Cost | ||
Amortized cost, less than 12 months | 53,440 | 16,950 |
12 months and greater | 6,383 | 9,694 |
Total Cost or Amortized Cost | 59,823 | 26,644 |
Unrealized Loss | ||
Less than 12 months | (785) | (472) |
12 months and greater | (148) | (346) |
Total Unrealized Loss | (933) | (818) |
ABS/CMBS/MBS | ||
Fair Value | ||
Less than 12 months | 32,771 | 74,968 |
12 months and greater | 16,161 | 18,036 |
Total Fair Value | 48,932 | 93,004 |
Amortized Cost | ||
Amortized cost, less than 12 months | 33,094 | 75,332 |
12 months and greater | 16,251 | 18,148 |
Total Cost or Amortized Cost | 49,345 | 93,480 |
Unrealized Loss | ||
Less than 12 months | (323) | (364) |
12 months and greater | (90) | (112) |
Total Unrealized Loss | (413) | (476) |
Municipal | ||
Fair Value | ||
Less than 12 months | 25,676 | 47,018 |
Total Fair Value | 25,676 | 47,018 |
Amortized Cost | ||
Amortized cost, less than 12 months | 25,894 | 47,740 |
Total Cost or Amortized Cost | 25,894 | 47,740 |
Unrealized Loss | ||
Less than 12 months | (218) | (722) |
Total Unrealized Loss | (218) | (722) |
Debt Securities | ||
Fair Value | ||
Less than 12 months | 160,781 | 169,311 |
12 months and greater | 22,396 | 77,565 |
Total Fair Value | 183,177 | 246,876 |
Amortized Cost | ||
Amortized cost, less than 12 months | 163,097 | 171,028 |
12 months and greater | 22,634 | 78,501 |
Total Cost or Amortized Cost | 185,731 | 249,529 |
Unrealized Loss | ||
Less than 12 months | (2,316) | (1,717) |
12 months and greater | (238) | (936) |
Total Unrealized Loss | $ (2,554) | $ (2,653) |
Investments - Allowance for Cre
Investments - Allowance for Credit Losses, Unrealized Losses on Securities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity Securities | |||
Investment Holdings [Line Items] | |||
Unrealized gains (losses) on equity securities still held | $ 47.9 | $ 92.8 | $ 28.7 |
Investments - Debt and Short-te
Investments - Debt and Short-term Investments (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Investment Holdings [Line Items] | |||
Other investments | $ 54,232,000 | $ 70,441,000 | |
Investment in federal home loan bank stock | us-gaap:AssetPledgedAsCollateralMember | ||
Fair value investments entities that calculate net asset value per share unfunded commitments | $ 23,100,000 | ||
Fixed maturities and short-term investments on deposit with either regulatory authorities or banks | 77,700,000 | ||
FHLBC | |||
Investment Holdings [Line Items] | |||
Investments pledged as collateral | 12,300,000 | ||
Federal home loan bank borrowings fair value disclosure | 0 | ||
Investment In Low Income Housing Tax Credit Partnership Net Of Amortization | |||
Investment Holdings [Line Items] | |||
Other investments | 20,300,000 | 23,300,000 | |
Total tax benefit on investments in housing tax credit partnership | 3,500,000 | 2,500,000 | $ 2,200,000 |
Qualified affordable housing project investments, commitment | 3,800,000 | ||
Investment in Private Funds | |||
Investment Holdings [Line Items] | |||
Other investments | 32,100,000 | $ 46,000,000 | |
Fair value investments entities that calculate net asset value per share unfunded commitments | 8,300,000 | ||
Investment in Restricted Stock | |||
Investment Holdings [Line Items] | |||
Other investments | $ 6,100,000 |
Policy Acquisition Costs - Sche
Policy Acquisition Costs - Schedule of Policy Acquisition Costs Deferred and Amortized to Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Policy acquisition costs deferred and amortized to income | |||
Deferred policy acquisition costs (DAC), beginning of year | $ 85,044 | $ 84,934 | $ 77,716 |
Deferred: | |||
Direct commissions | 200,917 | 185,164 | 175,697 |
Premium taxes | 14,783 | 14,395 | 12,654 |
Ceding commissions | (42,115) | (31,140) | (22,190) |
Net deferred | 173,585 | 168,419 | 166,161 |
Amortized | 170,204 | 168,309 | 158,943 |
DAC, end of year | 88,425 | 85,044 | 84,934 |
Policy acquisition costs: | |||
Amortized | 170,204 | 168,309 | 158,943 |
Period costs: | |||
Ceding commission - contingent | (4,053) | (3,034) | (2,241) |
Other underwriting expenses | 120,287 | 123,422 | 111,036 |
Total policy acquisition costs | $ 286,438 | $ 288,697 | $ 267,738 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Oct. 02, 2013 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||
Bonds payable, long-term debt | $ 149,489,000 | $ 149,302,000 | ||
Interest paid | 7,300,000 | $ 7,300,000 | $ 7,300,000 | |
Senior Notes Maturing September 15, 2023 | ||||
Debt Instrument [Line Items] | ||||
Issue of senior notes by public debt offering | $ 150,000,000 | |||
Debt instrument maturity date | Sep. 15, 2023 | |||
Stated interest rate, payable semi-annually (as a percent) | 4.875% | |||
Proceeds from issuance of debt, net of discount and commission | $ 148,600,000 | |||
Estimated fair value of senior notes | $ 165,400,000 | |||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Average interest rate on debt (as a percent) | 4.91% | 4.91% | 4.91% | |
Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Borrowing capacity under revolving line of credit facility | $ 60,000,000 | $ 50,000,000 | ||
Maximum borrowing capacity conditional expansion | $ 120,000,000 | |||
Term of facility | 3 years | |||
Line of credit facility expiration date | Mar. 27, 2023 | |||
Amount outstanding on this facility | $ 0 | $ 0 | $ 0 |
Reinsurance - Additional Inform
Reinsurance - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | |
Ceded Credit Risk [Line Items] | |||
Maximum amount beyond which net loss on any individual risk is limited through the purchase of reinsurance | $ 3,000,000 | ||
Percentage of reinsurance recoverables due from companies with financial strength ratings of "A" or better by A.M. Best and S&P rating services | 88.00% | ||
Amount of allowance for uncollectible amounts on paid recoverables | $ 15,900,000 | $ 15,700,000 | |
Reinsurance balances recoverable on unpaid losses and settlement expenses, allowances for uncollectible amounts | 8,634,000 | $ 9,402,000 | |
Financing receivable, allowance for credit loss, write-off | 0 | ||
Amount of allowance for uncollectible amounts due beyond one year | $ 0 | ||
Threshold period for including reinsurance receivables in the allowance for uncollectible amounts | 1 year | ||
Maximum | |||
Ceded Credit Risk [Line Items] | |||
Financing receivable, allowance for credit loss, recovery | $ 100,000 | ||
Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Ceded Credit Risk [Line Items] | |||
Adoption impact of ASU 2016-13 on reinsurance balances recoverable | $ 1,300,000 |
Reinsurance - Schedule of Premi
Reinsurance - Schedule of Premiums Written and Earned Along with Losses and Settlement Expenses Incurred (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
WRITTEN | |||
Direct | $ 1,107,303 | $ 1,039,955 | $ 934,913 |
Reinsurance assumed | 29,129 | 25,047 | 48,303 |
Reinsurance ceded | (244,344) | (204,665) | (160,041) |
Net | 892,088 | 860,337 | 823,175 |
EARNED | |||
Direct | 1,062,608 | 981,121 | 896,234 |
Reinsurance assumed | 27,651 | 40,173 | 41,926 |
Reinsurance ceded | (224,512) | (182,183) | (146,794) |
Net | 865,747 | 839,111 | 791,366 |
LOSSES AND SETTLEMENT EXPENSES INCURRED | |||
Direct | 608,638 | 521,055 | 560,421 |
Reinsurance assumed | 18,783 | 21,951 | 20,376 |
Reinsurance ceded | (184,537) | (129,590) | (152,604) |
Net | $ 442,884 | $ 413,416 | $ 428,193 |
Reinsurance - Schedule of Net R
Reinsurance - Schedule of Net Reinsurance Balances Recoverable, After Consideration of Collateral, from Top Reinsurers (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 540,801 | ||
Ceded Premiums Written | $ 244,344 | $ 204,665 | $ 160,041 |
Percent of Total Ceded Premium Written | 100.00% | ||
Reinsurance balances recoverable as a percentage of shareholder's equity, threshold for disclosure | 2.00% | ||
Reinsurer Concentration Risk | Reinsurance Recoverable | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 100.00% | ||
Munich Re America / HSB | AM Best Rating, A+, Superior | S&P Rating, AA-, Very Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 73,414 | ||
Ceded Premiums Written | $ 27,133 | ||
Percent of Total Ceded Premium Written | 11.10% | ||
Munich Re America / HSB | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, AA-, Very Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 13.60% | ||
Swiss Re /Westport Ins. Corp. | AM Best Rating, A+, Superior | S&P Rating, AA-, Very Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 26,679 | ||
Ceded Premiums Written | $ 1,556 | ||
Percent of Total Ceded Premium Written | 0.60% | ||
Swiss Re /Westport Ins. Corp. | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, AA-, Very Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 4.90% | ||
Endurance Re | AM Best Rating, A+, Superior | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 39,673 | ||
Ceded Premiums Written | $ 13,941 | ||
Percent of Total Ceded Premium Written | 5.70% | ||
Endurance Re | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 7.30% | ||
Aspen UK Ltd. | AM Best Rating, A, Excellent | S&P Rating, A, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 31,768 | ||
Ceded Premiums Written | $ 7,590 | ||
Percent of Total Ceded Premium Written | 3.10% | ||
Aspen UK Ltd. | Reinsurer Concentration Risk | AM Best Rating, A, Excellent | Reinsurance Recoverable | S&P Rating, A, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 5.90% | ||
Berkley Insurance Co. | AM Best Rating, A+, Superior | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 32,050 | ||
Ceded Premiums Written | $ 10,628 | ||
Percent of Total Ceded Premium Written | 4.30% | ||
Berkley Insurance Co. | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 5.90% | ||
Renaissance Re | AM Best Rating, A+, Superior | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 41,385 | ||
Ceded Premiums Written | $ 20,314 | ||
Percent of Total Ceded Premium Written | 8.30% | ||
Renaissance Re | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 7.70% | ||
Scor Re | AM Best Rating, A+, Superior | S&P Rating, AA-, Very Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 28,855 | ||
Ceded Premiums Written | $ 14,516 | ||
Percent of Total Ceded Premium Written | 5.90% | ||
Scor Re | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, AA-, Very Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 5.30% | ||
Hannover Ruckversicherung | AM Best Rating, A+, Superior | S&P Rating, AA-, Very Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 28,504 | ||
Ceded Premiums Written | $ 8,288 | ||
Percent of Total Ceded Premium Written | 3.40% | ||
Hannover Ruckversicherung | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, AA-, Very Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 5.30% | ||
Toa Re | AM Best Rating, A, Excellent | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 22,231 | ||
Ceded Premiums Written | $ 3,907 | ||
Percent of Total Ceded Premium Written | 1.60% | ||
Toa Re | Reinsurer Concentration Risk | AM Best Rating, A, Excellent | Reinsurance Recoverable | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 4.10% | ||
Liberty Mutual | AM Best Rating, A, Excellent | S&P Rating, A, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 21,142 | ||
Ceded Premiums Written | $ 7,288 | ||
Percent of Total Ceded Premium Written | 3.00% | ||
Liberty Mutual | Reinsurer Concentration Risk | AM Best Rating, A, Excellent | Reinsurance Recoverable | S&P Rating, A, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 3.90% | ||
All Other Reinsurers | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 195,100 | ||
Ceded Premiums Written | $ 129,183 | ||
Percent of Total Ceded Premium Written | 53.00% | ||
All Other Reinsurers | Reinsurer Concentration Risk | Reinsurance Recoverable | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 36.10% |
Historical Loss and LAE Devel_3
Historical Loss and LAE Development - Schedule of Reconciliation of Unpaid Losses and Settlement Expenses (LAE) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Unpaid losses and LAE at beginning of year: | |||
Gross | $ 1,574,352 | $ 1,461,348 | $ 1,271,503 |
Ceded | (384,517) | (364,999) | (301,991) |
Net | 1,189,835 | 1,096,349 | 969,512 |
Increase (decrease) in incurred losses and LAE: | |||
Current accident year | 543,937 | 488,700 | 478,143 |
Prior accident years | (101,053) | (75,284) | (49,950) |
Total incurred | 442,884 | 413,416 | 428,193 |
Loss and LAE payments for claims incurred: | |||
Current accident year | (93,077) | (80,055) | (76,050) |
Prior accident year | (231,977) | (239,875) | (225,306) |
Total paid | (325,054) | (319,930) | (301,356) |
Net unpaid losses and LAE at end of year | 1,306,320 | 1,189,835 | 1,096,349 |
Unpaid losses and LAE at end of year: | |||
Gross | 1,750,049 | 1,574,352 | 1,461,348 |
Ceded | (443,729) | (384,517) | (364,999) |
Net unpaid losses and LAE at end of year | 1,306,320 | 1,189,835 | $ 1,096,349 |
Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Unpaid losses and LAE at beginning of year: | |||
Ceded | $ (1,345) | ||
Unpaid losses and LAE at end of year: | |||
Ceded | $ (1,345) |
Historical Loss and LAE Devel_4
Historical Loss and LAE Development - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
(Favorable)/Unfavorable Reserve Development | ||||
Unpaid losses and LAE, Ceded | $ 443,729 | $ 384,517 | $ 364,999 | $ 301,991 |
(Favorable)/unfavorable reserve development | (101,053) | (75,284) | (49,950) | |
Casualty Segment | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | (75,075) | (62,497) | (33,252) | |
Property segment | ||||
(Favorable)/Unfavorable Reserve Development | ||||
Unpaid losses and LAE, Ceded | 40,257 | 21,438 | ||
(Favorable)/unfavorable reserve development | (13,019) | (4,461) | (10,813) | |
Property segment | Marine | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | (6,500) | (2,400) | (5,000) | |
Property segment | Commercial Property | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | (5,200) | (2,000) | ||
Property segment | Specialty Personal | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | (1,100) | |||
Property segment | Assumed Property | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | (2,800) | |||
Surety Segment | ||||
(Favorable)/Unfavorable Reserve Development | ||||
Unpaid losses and LAE, Ceded | 4,017 | 11,199 | ||
(Favorable)/unfavorable reserve development | (12,959) | (8,326) | (5,885) | |
Surety Segment | Commercial Surety Product | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | (3,800) | (5,800) | (6,300) | |
Surety Segment | Contract Surety Product | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | (5,900) | (4,200) | ||
Surety Segment | Miscellaneous Surety Product | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | 1,700 | 800 | ||
Primary Occurrence | Casualty Segment | ||||
(Favorable)/Unfavorable Reserve Development | ||||
Unpaid losses and LAE, Ceded | 35,202 | 31,122 | ||
(Favorable)/unfavorable reserve development | (15,600) | |||
Primary Occurrence | Casualty Segment | General Liability | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | (17,900) | (11,800) | (6,700) | |
Primary Occurrence | Casualty Segment | P&C Package | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | (6,300) | |||
Excess Occurrence | Casualty Segment | ||||
(Favorable)/Unfavorable Reserve Development | ||||
Unpaid losses and LAE, Ceded | 88,528 | 98,518 | ||
(Favorable)/unfavorable reserve development | (21,400) | |||
Excess Occurrence | Casualty Segment | Commercial Products | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | (12,500) | (6,800) | (10,800) | |
Excess Occurrence | Casualty Segment | Personal Umbrella | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | (7,800) | |||
Claim Made | Casualty Segment | ||||
(Favorable)/Unfavorable Reserve Development | ||||
Unpaid losses and LAE, Ceded | 223,020 | 176,936 | ||
(Favorable)/unfavorable reserve development | 3,900 | |||
Claim Made | Casualty Segment | Miscellaneous Professional Liability | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | (7,800) | (10,200) | ||
Claim Made | Casualty Segment | Medical Professional Liability | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | (6,100) | 2,300 | ||
Claim Made | Casualty Segment | Executive Products | ||||
(Favorable)/Unfavorable Reserve Development | ||||
(Favorable)/unfavorable reserve development | 7,300 | |||
Transportation | Casualty Segment | ||||
(Favorable)/Unfavorable Reserve Development | ||||
Unpaid losses and LAE, Ceded | 53,251 | 53,724 | ||
(Favorable)/unfavorable reserve development | $ (19,100) | (16,600) | $ (500) | |
Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
(Favorable)/Unfavorable Reserve Development | ||||
Unpaid losses and LAE, Ceded | $ 1,345 |
Historical Loss and LAE Devel_5
Historical Loss and LAE Development - Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands | Dec. 31, 2020USD ($)Claim | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) |
Claims Development | ||||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | $ 1,306,320 | $ 1,189,835 | ||||||||
Casualty Segment | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 924,706 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 501,650 | |||||||||
All outstanding liabilities before 2011, net of reinsurance | 9,767 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 432,823 | 403,910 | ||||||||
Casualty Segment | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 477,317 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 182,781 | |||||||||
All outstanding liabilities before 2011, net of reinsurance | 18,291 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 312,827 | 256,153 | ||||||||
Casualty Segment | Claim Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 467,985 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 254,572 | |||||||||
All outstanding liabilities before 2011, net of reinsurance | 690 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 214,103 | 217,954 | ||||||||
Casualty Segment | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 410,793 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 281,116 | |||||||||
All outstanding liabilities before 2011, net of reinsurance | 175 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 129,852 | 139,951 | ||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2011 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 80,905 | 81,579 | $ 82,248 | $ 82,193 | $ 83,181 | $ 86,342 | $ 89,622 | $ 94,145 | $ 98,428 | $ 91,139 |
Total IBNR | $ 1,806 | |||||||||
Cumulative number of reported claims | Claim | 5,869 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 76,561 | 76,318 | 74,814 | 71,413 | 67,358 | 60,769 | 48,822 | 32,978 | 17,124 | 5,924 |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2011 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 21,657 | 21,825 | 22,032 | 21,295 | 20,959 | 19,160 | 18,641 | 17,443 | 17,148 | 26,272 |
Total IBNR | $ 514 | |||||||||
Cumulative number of reported claims | Claim | 582 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 21,040 | 21,036 | 20,214 | 17,769 | 16,494 | 10,772 | 8,793 | 6,981 | 5,145 | 2,169 |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2011 | Claim Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 13,646 | 14,031 | 11,506 | 7,852 | 7,720 | 8,510 | 10,619 | 12,260 | 17,454 | 17,416 |
Total IBNR | $ 160 | |||||||||
Cumulative number of reported claims | Claim | 682 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 10,869 | 7,239 | 7,132 | 6,835 | 6,209 | 5,637 | 5,947 | 4,508 | 1,949 | 330 |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2011 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 26,081 | 25,827 | 25,614 | 25,167 | 25,376 | 25,431 | 25,272 | 25,747 | 23,479 | 22,957 |
Total IBNR | $ 34 | |||||||||
Cumulative number of reported claims | Claim | 2,469 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 25,791 | 25,052 | 24,377 | 23,941 | 23,537 | 22,375 | 19,443 | 14,477 | 9,485 | 5,295 |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2012 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 60,591 | 60,465 | 60,328 | 59,488 | 59,028 | 61,072 | 65,893 | 78,406 | 91,807 | |
Total IBNR | $ 2,078 | |||||||||
Cumulative number of reported claims | Claim | 5,187 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 55,679 | 54,391 | 51,611 | 47,970 | 43,276 | 33,822 | 23,889 | 14,539 | 5,897 | |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2012 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 26,129 | 25,286 | 23,020 | 22,433 | 21,231 | 21,885 | 21,021 | 21,558 | 29,042 | |
Total IBNR | $ 826 | |||||||||
Cumulative number of reported claims | Claim | 866 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 22,202 | 21,993 | 19,310 | 17,747 | 16,879 | 15,380 | 8,843 | 3,573 | 1,315 | |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2012 | Claim Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 22,325 | 20,785 | 17,569 | 17,612 | 18,022 | 19,590 | 20,727 | 26,144 | 27,576 | |
Total IBNR | $ 303 | |||||||||
Cumulative number of reported claims | Claim | 803 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 16,892 | 16,450 | 15,621 | 14,378 | 10,968 | 9,218 | 6,898 | 4,086 | 433 | |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2012 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 23,845 | 23,731 | 23,305 | 23,620 | 23,689 | 23,511 | 22,924 | 22,203 | 21,452 | |
Total IBNR | $ 114 | |||||||||
Cumulative number of reported claims | Claim | 2,286 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 23,181 | 23,180 | 22,730 | 22,566 | 20,931 | 17,318 | 12,394 | 8,533 | 4,466 | |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2013 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 57,106 | 59,116 | 59,556 | 60,162 | 60,329 | 62,882 | 67,297 | 80,823 | ||
Total IBNR | $ 3,350 | |||||||||
Cumulative number of reported claims | Claim | 4,315 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 49,411 | 47,783 | 45,753 | 40,609 | 34,786 | 22,366 | 13,021 | 6,334 | ||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2013 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 25,073 | 25,496 | 24,922 | 25,599 | 25,425 | 26,857 | 34,824 | 39,984 | ||
Total IBNR | $ 1,693 | |||||||||
Cumulative number of reported claims | Claim | 947 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 21,229 | 18,524 | 17,956 | 16,967 | 14,545 | 10,967 | 5,701 | 1,060 | ||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2013 | Claim Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 37,974 | 38,352 | 37,959 | 38,473 | 40,288 | 44,054 | 41,488 | 40,095 | ||
Total IBNR | $ 1,448 | |||||||||
Cumulative number of reported claims | Claim | 1,042 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 35,476 | 34,535 | 32,789 | 29,678 | 26,121 | 18,425 | 7,073 | 792 | ||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2013 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 39,183 | 39,309 | 39,974 | 38,811 | 37,673 | 32,989 | 32,853 | 32,742 | ||
Total IBNR | $ 219 | |||||||||
Cumulative number of reported claims | Claim | 2,853 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 37,915 | 37,327 | 35,923 | 33,480 | 28,220 | 19,761 | 11,978 | 5,306 | ||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2014 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 65,636 | 66,702 | 66,389 | 67,237 | 71,592 | 79,497 | 88,092 | |||
Total IBNR | $ 5,871 | |||||||||
Cumulative number of reported claims | Claim | 4,284 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 55,965 | 52,387 | 47,343 | 40,270 | 29,545 | 18,771 | 11,436 | |||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2014 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 35,128 | 33,458 | 33,372 | 32,274 | 35,119 | 39,095 | 50,889 | |||
Total IBNR | $ 3,318 | |||||||||
Cumulative number of reported claims | Claim | 902 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 26,068 | 23,376 | 22,541 | 18,852 | 11,002 | 4,006 | 1,899 | |||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2014 | Claim Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 53,783 | 53,841 | 51,554 | 55,350 | 58,152 | 55,386 | 53,929 | |||
Total IBNR | $ 2,542 | |||||||||
Cumulative number of reported claims | Claim | 1,305 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 46,122 | 44,127 | 40,080 | 35,755 | 27,923 | 9,775 | 1,705 | |||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2014 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 41,156 | 40,508 | 40,202 | 38,590 | 36,452 | 33,015 | 38,361 | |||
Total IBNR | $ 475 | |||||||||
Cumulative number of reported claims | Claim | 3,099 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 40,006 | 38,282 | 33,190 | 27,457 | 19,676 | 13,933 | 7,125 | |||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2015 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 75,470 | 76,398 | 78,675 | 83,579 | 84,975 | 94,835 | ||||
Total IBNR | $ 9,699 | |||||||||
Cumulative number of reported claims | Claim | 4,386 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 58,866 | 54,270 | 45,056 | 33,020 | 19,902 | 10,157 | ||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2015 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 42,446 | 43,328 | 42,840 | 47,392 | 50,857 | 53,672 | ||||
Total IBNR | $ 8,724 | |||||||||
Cumulative number of reported claims | Claim | 692 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 31,352 | 28,756 | 23,184 | 19,571 | 10,127 | 2,048 | ||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2015 | Claim Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 39,619 | 39,653 | 39,906 | 42,206 | 47,831 | 55,006 | ||||
Total IBNR | $ 4,699 | |||||||||
Cumulative number of reported claims | Claim | 1,337 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 32,241 | 28,795 | 20,920 | 16,774 | 10,738 | 2,215 | ||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2015 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 45,525 | 45,162 | 46,395 | 47,021 | 46,258 | 38,561 | ||||
Total IBNR | $ 979 | |||||||||
Cumulative number of reported claims | Claim | 3,186 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 41,345 | 39,339 | 37,222 | 29,554 | 20,709 | 6,984 | ||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2016 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 83,374 | 85,449 | 90,611 | 96,753 | 101,950 | |||||
Total IBNR | $ 16,214 | |||||||||
Cumulative number of reported claims | Claim | 4,284 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 56,152 | 48,042 | 35,764 | 24,186 | 10,142 | |||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2016 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 30,251 | 33,125 | 37,676 | 49,385 | 56,341 | |||||
Total IBNR | $ 13,570 | |||||||||
Cumulative number of reported claims | Claim | 640 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 12,703 | 10,054 | 7,441 | 3,396 | 1,068 | |||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2016 | Claim Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 64,730 | 67,728 | 69,493 | 67,760 | 59,992 | |||||
Total IBNR | $ 9,996 | |||||||||
Cumulative number of reported claims | Claim | 1,507 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 47,999 | 39,370 | 27,465 | 14,558 | 2,060 | |||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2016 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 52,818 | 52,277 | 54,105 | 53,519 | 50,430 | |||||
Total IBNR | $ 2,589 | |||||||||
Cumulative number of reported claims | Claim | 3,941 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 43,564 | 38,001 | 30,354 | 18,354 | 8,923 | |||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2017 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 95,513 | 102,583 | 111,391 | 119,741 | ||||||
Total IBNR | $ 29,201 | |||||||||
Cumulative number of reported claims | Claim | 4,441 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 52,823 | 38,783 | 25,933 | 13,154 | ||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2017 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 44,737 | 48,363 | 55,868 | 62,863 | ||||||
Total IBNR | $ 22,078 | |||||||||
Cumulative number of reported claims | Claim | 617 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 15,441 | 9,275 | 5,679 | 17 | ||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2017 | Claim Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 57,450 | 62,714 | 62,450 | 60,572 | ||||||
Total IBNR | $ 8,836 | |||||||||
Cumulative number of reported claims | Claim | 1,645 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 36,522 | 22,728 | 11,350 | 2,455 | ||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2017 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 43,764 | 45,017 | 53,641 | 55,640 | ||||||
Total IBNR | $ 3,788 | |||||||||
Cumulative number of reported claims | Claim | 3,636 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 30,260 | 24,090 | 17,070 | 7,979 | ||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2018 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 125,731 | 130,281 | 141,513 | |||||||
Total IBNR | $ 56,310 | |||||||||
Cumulative number of reported claims | Claim | 4,707 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 48,424 | 32,365 | 15,066 | |||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2018 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 54,626 | 62,646 | 69,362 | |||||||
Total IBNR | $ 37,085 | |||||||||
Cumulative number of reported claims | Claim | 541 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 10,801 | 5,823 | 2,506 | |||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2018 | Claim Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 56,468 | 62,416 | 66,128 | |||||||
Total IBNR | $ 26,325 | |||||||||
Cumulative number of reported claims | Claim | 1,391 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 18,840 | 11,965 | 1,964 | |||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2018 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 38,719 | 54,592 | 57,597 | |||||||
Total IBNR | $ 9,200 | |||||||||
Cumulative number of reported claims | Claim | 3,396 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 19,216 | 12,827 | 6,980 | |||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2019 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 135,209 | 146,011 | ||||||||
Total IBNR | $ 90,220 | |||||||||
Cumulative number of reported claims | Claim | 4,953 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 30,673 | 15,698 | ||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2019 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 89,691 | 88,078 | ||||||||
Total IBNR | $ 63,384 | |||||||||
Cumulative number of reported claims | Claim | 512 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 19,044 | 4,213 | ||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2019 | Claim Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 61,712 | 62,918 | ||||||||
Total IBNR | $ 39,891 | |||||||||
Cumulative number of reported claims | Claim | 1,502 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 8,123 | 1,839 | ||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2019 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 56,129 | 58,297 | ||||||||
Total IBNR | $ 23,100 | |||||||||
Cumulative number of reported claims | Claim | 3,296 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 15,852 | 7,148 | ||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2020 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 145,171 | |||||||||
Total IBNR | $ 115,016 | |||||||||
Cumulative number of reported claims | Claim | 3,662 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 17,096 | |||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2020 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 107,579 | |||||||||
Total IBNR | $ 86,608 | |||||||||
Cumulative number of reported claims | Claim | 272 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 2,901 | |||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2020 | Claim Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 60,278 | |||||||||
Total IBNR | $ 50,149 | |||||||||
Cumulative number of reported claims | Claim | 1,174 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 1,488 | |||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2020 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 43,573 | |||||||||
Total IBNR | $ 20,704 | |||||||||
Cumulative number of reported claims | Claim | 1,533 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 3,986 | |||||||||
Property segment | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 706,053 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 602,993 | |||||||||
All outstanding liabilities before 2011, net of reinsurance | 323 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 103,383 | 71,965 | ||||||||
Property segment | Short-duration Insurance Contracts, Accident Year 2011 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 62,754 | 62,799 | 62,875 | 62,456 | 62,570 | 62,770 | 63,724 | 64,976 | 66,924 | 70,246 |
Total IBNR | $ 17 | |||||||||
Cumulative number of reported claims | Claim | 3,028 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 62,733 | 62,730 | 62,729 | 61,834 | 61,428 | 60,272 | 59,099 | 55,778 | 48,756 | 27,676 |
Property segment | Short-duration Insurance Contracts, Accident Year 2012 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 77,924 | 78,002 | 78,161 | 78,125 | 79,175 | 77,569 | 79,181 | 80,155 | 85,485 | |
Total IBNR | $ 26 | |||||||||
Cumulative number of reported claims | Claim | 2,640 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 77,347 | 77,323 | 77,159 | 76,152 | 75,640 | 73,705 | 72,057 | 66,509 | 39,074 | |
Property segment | Short-duration Insurance Contracts, Accident Year 2013 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 61,623 | 61,776 | 61,834 | 61,914 | 62,114 | 62,173 | 62,090 | 63,864 | ||
Total IBNR | $ 111 | |||||||||
Cumulative number of reported claims | Claim | 2,995 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 61,335 | 61,325 | 61,195 | 60,520 | 59,259 | 57,407 | 50,840 | 32,208 | ||
Property segment | Short-duration Insurance Contracts, Accident Year 2014 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 49,479 | 49,444 | 49,217 | 48,761 | 48,801 | 49,441 | 56,587 | |||
Total IBNR | $ 101 | |||||||||
Cumulative number of reported claims | Claim | 4,561 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 49,259 | 49,027 | 47,799 | 46,528 | 46,148 | 43,380 | 30,550 | |||
Property segment | Short-duration Insurance Contracts, Accident Year 2015 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 52,781 | 53,111 | 52,720 | 53,958 | 56,103 | 59,863 | ||||
Total IBNR | $ 164 | |||||||||
Cumulative number of reported claims | Claim | 4,075 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 52,342 | 52,078 | 51,290 | 50,197 | 49,348 | 32,184 | ||||
Property segment | Short-duration Insurance Contracts, Accident Year 2016 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 55,424 | 55,930 | 55,384 | 55,594 | 62,900 | |||||
Total IBNR | $ 505 | |||||||||
Cumulative number of reported claims | Claim | 3,377 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 54,328 | 53,006 | 51,371 | 46,921 | 33,134 | |||||
Property segment | Short-duration Insurance Contracts, Accident Year 2017 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 82,671 | 84,961 | 83,273 | 90,803 | ||||||
Total IBNR | $ 2,022 | |||||||||
Cumulative number of reported claims | Claim | 2,892 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 78,360 | 74,415 | 66,818 | 41,314 | ||||||
Property segment | Short-duration Insurance Contracts, Accident Year 2018 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 79,961 | 83,457 | 89,091 | |||||||
Total IBNR | $ 6,172 | |||||||||
Cumulative number of reported claims | Claim | 2,333 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 72,357 | 68,264 | 37,048 | |||||||
Property segment | Short-duration Insurance Contracts, Accident Year 2019 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 65,189 | 71,232 | ||||||||
Total IBNR | $ 8,218 | |||||||||
Cumulative number of reported claims | Claim | 2,428 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 51,740 | 30,703 | ||||||||
Property segment | Short-duration Insurance Contracts, Accident Year 2020 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 118,247 | |||||||||
Total IBNR | $ 40,590 | |||||||||
Cumulative number of reported claims | Claim | 2,492 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 43,192 | |||||||||
Surety Segment | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 91,648 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 64,579 | |||||||||
All outstanding liabilities before 2011, net of reinsurance | (60) | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 27,009 | 24,988 | ||||||||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2011 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 18,252 | 18,293 | 18,281 | 16,480 | 16,695 | 16,766 | 17,321 | 17,792 | 17,832 | 13,842 |
Total IBNR | $ 16 | |||||||||
Cumulative number of reported claims | Claim | 1,681 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 18,234 | 18,251 | 17,013 | 17,086 | 17,086 | 17,212 | 17,403 | 17,151 | 16,932 | $ 8,160 |
Surety Segment | Short-duration Insurance Contracts, Accident Year 2012 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 6,985 | 7,082 | 7,099 | 7,471 | 7,867 | 8,180 | 8,667 | 11,452 | 17,114 | |
Total IBNR | $ 18 | |||||||||
Cumulative number of reported claims | Claim | 1,479 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 6,941 | 6,996 | 7,065 | 7,406 | 7,536 | 7,416 | 6,726 | 6,680 | $ 1,883 | |
Surety Segment | Short-duration Insurance Contracts, Accident Year 2013 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 5,107 | 5,209 | 5,231 | 5,271 | 5,399 | 6,170 | 7,516 | 16,080 | ||
Total IBNR | $ 33 | |||||||||
Cumulative number of reported claims | Claim | 1,407 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 5,061 | 5,128 | 5,150 | 5,098 | 4,911 | 4,701 | 2,856 | $ 1,116 | ||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2014 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 4,266 | 4,319 | 4,267 | 4,427 | 5,225 | 8,106 | 16,450 | |||
Total IBNR | $ 48 | |||||||||
Cumulative number of reported claims | Claim | 1,351 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 4,214 | 4,234 | 4,131 | 4,059 | 4,166 | 4,283 | $ 722 | |||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2015 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 9,521 | 9,792 | 10,456 | 11,113 | 12,957 | 16,958 | ||||
Total IBNR | $ 243 | |||||||||
Cumulative number of reported claims | Claim | 1,231 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 9,186 | 9,183 | 9,436 | 7,695 | 6,719 | $ 3,192 | ||||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2016 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 8,391 | 8,895 | 9,351 | 11,062 | 18,928 | |||||
Total IBNR | $ 389 | |||||||||
Cumulative number of reported claims | Claim | 1,367 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 8,086 | 7,640 | 6,299 | 5,817 | $ 3,087 | |||||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2017 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 8,116 | 8,798 | 8,641 | 16,127 | ||||||
Total IBNR | $ 673 | |||||||||
Cumulative number of reported claims | Claim | 1,724 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 7,221 | 7,062 | 2,862 | $ 979 | ||||||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2018 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 4,564 | 7,227 | 16,765 | |||||||
Total IBNR | $ 1,489 | |||||||||
Cumulative number of reported claims | Claim | 1,265 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 2,368 | 2,588 | $ 1,835 | |||||||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2019 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 7,205 | 14,785 | ||||||||
Total IBNR | $ 4,663 | |||||||||
Cumulative number of reported claims | Claim | 953 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 2,433 | $ 336 | ||||||||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2020 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 19,241 | |||||||||
Total IBNR | $ 16,483 | |||||||||
Cumulative number of reported claims | Claim | 405 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 835 |
Historical Loss and LAE Devel_6
Historical Loss and LAE Development - Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance (Details) | Dec. 31, 2020 |
Property segment | |
Shortduration Insurance Contracts Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred losses by age, Year 1 | 50.90% |
Average annual percentage payout of incurred losses by age, Year 2 | 31.60% |
Average annual percentage payout of incurred losses by age, Year 3 | 7.30% |
Average annual percentage payout of incurred losses by age, Year 4 | 3.00% |
Average annual percentage payout of incurred losses by age, Year 5 | 2.10% |
Average annual percentage payout of incurred losses by age, Year 6 | 1.30% |
Average annual percentage payout of incurred losses by age, Year 7 | 0.70% |
Average annual percentage payout of incurred losses by age, Year 8 | 0.60% |
Average annual percentage payout of incurred losses by age, Year 9 | 0.00% |
Average annual percentage payout of incurred losses by age, Year 10 | 0.00% |
Surety Segment | |
Shortduration Insurance Contracts Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred losses by age, Year 1 | 24.20% |
Average annual percentage payout of incurred losses by age, Year 2 | 41.40% |
Average annual percentage payout of incurred losses by age, Year 3 | 12.30% |
Average annual percentage payout of incurred losses by age, Year 4 | 7.00% |
Average annual percentage payout of incurred losses by age, Year 5 | 1.40% |
Average annual percentage payout of incurred losses by age, Year 6 | 0.20% |
Average annual percentage payout of incurred losses by age, Year 7 | (1.40%) |
Average annual percentage payout of incurred losses by age, Year 8 | (0.90%) |
Average annual percentage payout of incurred losses by age, Year 9 | 3.00% |
Average annual percentage payout of incurred losses by age, Year 10 | (0.10%) |
Primary Occurrence | Casualty Segment | |
Shortduration Insurance Contracts Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred losses by age, Year 1 | 12.00% |
Average annual percentage payout of incurred losses by age, Year 2 | 13.20% |
Average annual percentage payout of incurred losses by age, Year 3 | 15.70% |
Average annual percentage payout of incurred losses by age, Year 4 | 17.10% |
Average annual percentage payout of incurred losses by age, Year 5 | 12.20% |
Average annual percentage payout of incurred losses by age, Year 6 | 7.70% |
Average annual percentage payout of incurred losses by age, Year 7 | 5.00% |
Average annual percentage payout of incurred losses by age, Year 8 | 3.90% |
Average annual percentage payout of incurred losses by age, Year 9 | 2.00% |
Average annual percentage payout of incurred losses by age, Year 10 | 0.30% |
Excess Occurrence | Casualty Segment | |
Shortduration Insurance Contracts Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred losses by age, Year 1 | 4.50% |
Average annual percentage payout of incurred losses by age, Year 2 | 12.10% |
Average annual percentage payout of incurred losses by age, Year 3 | 15.30% |
Average annual percentage payout of incurred losses by age, Year 4 | 14.40% |
Average annual percentage payout of incurred losses by age, Year 5 | 9.50% |
Average annual percentage payout of incurred losses by age, Year 6 | 8.40% |
Average annual percentage payout of incurred losses by age, Year 7 | 5.40% |
Average annual percentage payout of incurred losses by age, Year 8 | 10.80% |
Average annual percentage payout of incurred losses by age, Year 9 | 2.30% |
Average annual percentage payout of incurred losses by age, Year 10 | 0.00% |
Claim Made | Casualty Segment | |
Shortduration Insurance Contracts Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred losses by age, Year 1 | 3.20% |
Average annual percentage payout of incurred losses by age, Year 2 | 16.00% |
Average annual percentage payout of incurred losses by age, Year 3 | 20.30% |
Average annual percentage payout of incurred losses by age, Year 4 | 15.50% |
Average annual percentage payout of incurred losses by age, Year 5 | 9.40% |
Average annual percentage payout of incurred losses by age, Year 6 | 8.80% |
Average annual percentage payout of incurred losses by age, Year 7 | 4.60% |
Average annual percentage payout of incurred losses by age, Year 8 | 2.80% |
Average annual percentage payout of incurred losses by age, Year 9 | 1.40% |
Average annual percentage payout of incurred losses by age, Year 10 | 26.60% |
Transportation | Casualty Segment | |
Shortduration Insurance Contracts Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred losses by age, Year 1 | 16.00% |
Average annual percentage payout of incurred losses by age, Year 2 | 18.50% |
Average annual percentage payout of incurred losses by age, Year 3 | 18.00% |
Average annual percentage payout of incurred losses by age, Year 4 | 17.90% |
Average annual percentage payout of incurred losses by age, Year 5 | 11.50% |
Average annual percentage payout of incurred losses by age, Year 6 | 6.90% |
Average annual percentage payout of incurred losses by age, Year 7 | 2.50% |
Average annual percentage payout of incurred losses by age, Year 8 | 1.70% |
Average annual percentage payout of incurred losses by age, Year 9 | 1.30% |
Average annual percentage payout of incurred losses by age, Year 10 | 2.80% |
Historical Loss and LAE Devel_7
Historical Loss and LAE Development - Reconciliation of Incurred and Paid Loss Development to the Liability for Unpaid Losses and Settlement Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Unpaid losses and settlement expenses | $ 1,750,049 | $ 1,574,352 | $ 1,461,348 | $ 1,271,503 |
Liabilities for losses and loss adjustment expenses, net of reinsurance | 1,306,320 | 1,189,835 | ||
Unallocated loss adjustment expenses | 54,954 | 52,275 | ||
Reinsurance balances recoverable on unpaid losses and settlement expenses, allowances for uncollectible amounts | 8,634 | 9,402 | ||
Other | 22,735 | 13,237 | ||
Reinsurance recoverable on unpaid claims | 443,729 | 384,517 | $ 364,999 | $ 301,991 |
Other | 8,088 | 982 | ||
Total gross liability for unpaid loss and settlement expenses | 1,750,049 | 1,574,352 | ||
Casualty Segment | Primary Occurrence | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 432,823 | 403,910 | ||
Reinsurance recoverable on unpaid claims | 35,202 | 31,122 | ||
Casualty Segment | Excess Occurrence | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 312,827 | 256,153 | ||
Reinsurance recoverable on unpaid claims | 88,528 | 98,518 | ||
Casualty Segment | Claim Made | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 214,103 | 217,954 | ||
Reinsurance recoverable on unpaid claims | 223,020 | 176,936 | ||
Casualty Segment | Transportation | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 129,852 | 139,951 | ||
Reinsurance recoverable on unpaid claims | 53,251 | 53,724 | ||
Property segment | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 103,383 | 71,965 | ||
Reinsurance recoverable on unpaid claims | 40,257 | 21,438 | ||
Surety Segment | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 27,009 | 24,988 | ||
Reinsurance recoverable on unpaid claims | $ 4,017 | $ 11,199 |
Historical Loss and LAE Devel_8
Historical Loss and LAE Development - Reserve Development (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
(Favorable)/Unfavorable Reserve Development | |||
(Favorable)/unfavorable reserve development | $ (101,053) | $ (75,284) | $ (49,950) |
Casualty Segment | |||
(Favorable)/Unfavorable Reserve Development | |||
(Favorable)/unfavorable reserve development | (75,075) | (62,497) | (33,252) |
Property segment | |||
(Favorable)/Unfavorable Reserve Development | |||
(Favorable)/unfavorable reserve development | (13,019) | (4,461) | (10,813) |
Surety Segment | |||
(Favorable)/Unfavorable Reserve Development | |||
(Favorable)/unfavorable reserve development | $ (12,959) | $ (8,326) | $ (5,885) |
Historical Loss and LAE Devel_9
Historical Loss and LAE Development - Environmental, Asbestos and Mass Tort Exposures (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Unpaid losses and LAE at beginning of year: | ||||
Gross | $ 1,750,049 | $ 1,574,352 | $ 1,461,348 | $ 1,271,503 |
Net | 1,306,320 | 1,189,835 | 1,096,349 | $ 969,512 |
Asbestos and Environmental Exposures | ||||
Loss and LAE Payments (Cumulative): | ||||
Gross | 139,804 | 137,485 | 136,043 | |
Ceded | (69,219) | (68,849) | (68,638) | |
Net | 70,585 | 68,636 | 67,405 | |
Unpaid losses and LAE at beginning of year: | ||||
Gross | 22,485 | 22,616 | 24,262 | |
Ceded | (4,619) | (5,149) | (5,373) | |
Net | $ 17,866 | $ 17,467 | $ 18,889 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Tax discounting of unpaid losses and settlement expenses | $ 21,096 | $ 19,143 |
Unearned premium offset | 19,862 | 18,755 |
Deferred compensation | 2,829 | 2,981 |
Stock option expense | 2,749 | 2,728 |
Lease liability | 3,971 | 5,140 |
Other | 389 | 275 |
Deferred tax assets before allowance | 50,896 | 49,022 |
Total deferred tax assets | 50,896 | 49,022 |
Deferred tax liabilities: | ||
Net unrealized appreciation of securities | 77,639 | 56,532 |
Deferred policy acquisition costs | 18,569 | 17,859 |
Lease asset | 3,402 | 4,690 |
Discounting of unpaid losses and settlement expenses - Tax Cuts and Jobs Act (TCJA) implementation offset | 3,181 | 3,817 |
Fixed assets | 3,439 | 3,008 |
Intangible assets | 1,558 | 1,634 |
Undistributed earnings of unconsolidated investees | 21,813 | 17,673 |
Other | 1,530 | 536 |
Total deferred tax liabilities | 131,131 | 105,749 |
Net deferred tax liability | $ (80,235) | $ (56,727) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax [Line Items] | |||
U.S. federal tax rate | 21.00% | 21.00% | 21.00% |
Tax Cuts and Jobs Act, Measurement Period Adjustment, Income Tax Expense (Benefit) | $ 2,300 | ||
Capital gains rate (as a percent) | 21.00% | ||
Dividends received | $ 4,675 | $ 13,200 | 9,900 |
Unconsolidated investee dividends | $ 479 | $ 1,802 | |
Effective rate reduction due to unconsolidated investee dividends (as a percent) | 0.20% | 0.80% | |
ESOP dividends paid deduction | $ 1,083 | $ 1,122 | $ 1,184 |
Effective rate reduction due to dividends paid to ESOP (as a percent) | 0.60% | 0.50% | 1.80% |
Expected effective tax rate when deferred items reverse in future years (as a percent) | 21.00% | ||
Federal and state income taxes paid | $ 23,700 | $ 25,600 | $ 16,400 |
Maui Jim Inc. | |||
Income Tax [Line Items] | |||
Dividends received | 13,200 | ||
Unconsolidated investee dividends | $ 1,800 | ||
Lower tax rate (as a percent) | 7.40% | ||
Prime Holdings Insurance Services, Inc. (Prime) | |||
Income Tax [Line Items] | |||
Dividends received | 4,700 | ||
Unconsolidated investee dividends | $ 500 | ||
Lower tax rate (as a percent) | 10.80% |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Tax Expense (Benefit) Attributable to Income from Operations with Amounts Computed by Applying U.S. Federal Tax Rate to Pretax Income from Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of income tax expense reported to amount computed by applying the U.S. federal tax rate | |||
Provision for income taxes at the statutory federal tax rates | $ 39,867 | $ 48,874 | $ 14,192 |
Increase (reduction) in taxes resulting from: | |||
Enactment of TCJA | (2,268) | ||
Excess tax benefit on share-based compensation | (3,537) | (3,958) | (4,533) |
Tax-exempt interest income | (1,293) | (1,238) | (1,795) |
Dividends received deduction | (883) | (823) | (775) |
Investment tax credit | (2,435) | ||
ESOP dividends paid deduction | (1,083) | (1,122) | (1,184) |
Unconsolidated investee dividends | (479) | (1,802) | |
Nondeductible expenses | 1,878 | 1,649 | 389 |
Other items, net | 715 | (488) | (624) |
Income tax expense (benefit) | $ 32,750 | $ 41,092 | $ 3,402 |
Reconciliation of income tax expense rate to the U.S. federal tax rate | |||
Tax rate used (as a percent) | 21.00% | 21.00% | 21.00% |
Enactment of Tax Cuts and Jobs Act (TCJA) (as a percent) | (3.40%) | ||
Excess tax benefit on share-based compensation (as a percent) | (1.80%) | (1.70%) | (6.70%) |
Effective rate reduction due to tax exempt interest income (as a percent) | (0.70%) | (0.50%) | (2.70%) |
Effective rate reduction due to dividend received (as a percent) | (0.50%) | (0.40%) | (1.10%) |
Effective rate reduction due to investment tax credit (as a percent) | (1.30%) | ||
Effective rate reduction due to dividend paid to ESOP (as a percent) | (0.60%) | (0.50%) | (1.80%) |
Effective rate reduction due to unconsolidated investee dividends (as a percent) | (0.20%) | (0.80%) | |
Effective rate reduction due to nondeductible expenses (as a percent) | 1.00% | 0.70% | 0.60% |
Effective rate reduction due to other items, net (as a percent) | 0.40% | (0.10%) | (0.90%) |
Total tax expense | 17.30% | 17.70% | 5.00% |
Employee Benefits - Employee St
Employee Benefits - Employee Stock Ownership, 401(K) and Deferred Compensation Plan - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Stock Ownership, 401(K) And Deferred Compensation Plan | |||
Annual expenses for incentive plans | $ 26.6 | $ 30.1 | $ 11.9 |
Employee 401(k) Plans | |||
Employee Stock Ownership, 401(K) And Deferred Compensation Plan | |||
Employer contribution as a percent of eligible compensation | 3.00% | ||
Vesting percentage in basic and voluntary contributions | 100.00% | ||
ESOP and 401(k) Plans | |||
Employee Stock Ownership, 401(K) And Deferred Compensation Plan | |||
Vesting period of profit sharing contributions | 3 years | ||
Expenses recognized | $ 14.4 | $ 15.7 | $ 8.8 |
Employee Stock Ownership Plan (ESOP) | |||
Employee Stock Ownership, 401(K) And Deferred Compensation Plan | |||
Shares purchased under defined contribution plan | 94,194 | 60,768 | 98,717 |
Average price of shares purchased (in dollars per share) | $ 82.67 | $ 69.99 | $ 62.80 |
Aggregate price of shares purchased | $ 7.8 | $ 4.3 | $ 6.2 |
Shares held by the ESOP | 2,612,357 | ||
Deferred Compensation Plan | |||
Employee Stock Ownership, 401(K) And Deferred Compensation Plan | |||
Assets held under trust | $ 49.3 |
Employee Benefits - Stock Plans
Employee Benefits - Stock Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | 60 Months Ended | 68 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | May 06, 2015 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Options granted (in shares) | 322,479 | ||||
Aggregate Intrinsic Value, Options Exercised | $ 15.5 | $ 20 | $ 24.3 | ||
RLI Corp. Long-Term Incentive Plan (2010 LTIP) | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares authorized for grant | 4,000,000 | ||||
Options granted (in shares) | 2,878,000 | ||||
RLI Corp. Long-Term Incentive Plan (2015 LTIP) | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares authorized for grant | 4,000,000 | 4,000,000 | |||
Options granted (in shares) | 340,909 | 2,623,369 | |||
Stock-based compensation expenses | $ 5.4 | 6 | 5.5 | ||
Income tax benefit from stock-based compensation | 0.9 | $ 0.9 | $ 0.9 | ||
Unrecognized stock-based compensation expense | $ 6.4 | $ 6.4 | |||
Stock-based compensation expenses, recognition period | 2 years 7 months 24 days | ||||
RLI Corp. Long-Term Incentive Plan (LTIP 2010 and LTIP 2015) | Stock Options | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Award vesting period | 5 years | ||||
Term of options | 8 years | ||||
Age and period of service of the participant to be eligible for retirement | 75 years |
Employee Benefits - Summary of
Employee Benefits - Summary of Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Weighted Number of Options Outstanding | |||
Outstanding Options, Beginning Balance | 1,667,290 | ||
Options granted (in shares) | 322,479 | ||
Options Exercised | (351,025) | ||
Options Canceled or Forfeited | (6,410) | ||
Outstanding Options, Ending Balance | 1,632,334 | 1,667,290 | |
Exercisable Options, Ending Balance | 658,290 | ||
Weighted Average Exercise Price | |||
Weighted Average Exercise Price, Outstanding Options, Beginning Balance | $ 62.52 | ||
Weighted Average Exercise Price, Options Granted | 92.86 | ||
Weighted Average Exercise Price, Options Exercised | 52.34 | ||
Weighted Average Exercise Price, Options Canceled or Forfeited | 73.42 | ||
Weighted Average Exercise Price, Outstanding Options, Ending Balance | 70.67 | $ 62.52 | |
Weighted Average Exercise Price, Exercisable Options | $ 60.35 | ||
Weighted Average Remaining Contractual Life | |||
Weighted Average Remaining Contractual Life, Outstanding Options | 5 years 1 month 28 days | ||
Weighted Average Remaining Contractual Life, Exercisable Options | 3 years 8 months 26 days | ||
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value, Options Exercised | $ 15,500 | $ 20,000 | $ 24,300 |
Aggregate Intrinsic Value, Outstanding Options | 54,657 | ||
Aggregate Intrinsic Value, Exercisable Options | $ 28,834 |
Employee Benefits - Summary o_2
Employee Benefits - Summary of Weighted Average Grant-date Assumptions and Weighted Average Fair Values (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Weighted average grant date assumptions and weighted average fair value | |||
Weighted-average fair value of grants | $ 13.24 | $ 13.49 | $ 10.58 |
Risk-free interest rates | 0.39% | 2.26% | 2.72% |
Dividend yield | 2.30% | 2.69% | 2.98% |
Expected volatility | 22.67% | 22.71% | 22.87% |
Expected option life | 4 years 11 months 15 days | 4 years 11 months 15 days | 5 years 25 days |
Employee Benefits - Restricted
Employee Benefits - Restricted Stock Units - Additional Information (Details) - Restricted Stock Units (RSUs) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Age and period of service of the participant to be eligible for retirement | 75 years | |
Fair value of restricted stock units vested | $ 1.5 | $ 0.7 |
Employees | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Directors | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Award vesting period | 1 year |
Employee Benefits - Schedule of
Employee Benefits - Schedule of Restricted Stock Units Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Number of RSUs | |
RSUs Nonvested, Beginning Balance | shares | 49,733 |
RSUs Granted | shares | 18,430 |
RSUs Reinvested | shares | 920 |
RSUs Vested | shares | (20,837) |
RSUs Forfeited | shares | (588) |
RSUs Nonvested, Ending Balance | shares | 47,658 |
Weighted Average Grant Date Fair Value | |
Weighted Average Grant Date Fair Value, Nonvested, Beginning Balance | $ / shares | $ 70.07 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 93.24 |
Weighted Average Grant Date Fair Value, Reinvested | $ / shares | 96.14 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 65.24 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 79.54 |
Weighted Average Grant Date Fair Value, Nonvested, Ending Balance | $ / shares | $ 81.53 |
Statutory Information and Div_3
Statutory Information and Dividend Restrictions - Additional Information (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($)company | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Statutory Accounting Practices [Line Items] | ||||
Number of insurance companies | company | 3 | |||
Fair value of investment in affiliate included in statutory surplus | $ 238,000 | $ 190,900 | $ 132,800 | |
Cost basis of investment in affiliate included in statutory surplus | 64,600 | |||
Equity | 1,135,978 | 995,388 | 806,842 | $ 853,598 |
Remaining unrestricted equity, liquid assets | 64,600 | |||
RLI Ins. | ||||
Statutory Accounting Practices [Line Items] | ||||
Authorized control level RBC | 203,900 | 191,000 | 170,900 | |
Consolidated surplus, statutory basis | $ 1,100,000 | 1,000,000 | 829,800 | |
Dividend restriction as percentage of policyholder surplus | 10.00% | |||
Payments of Ordinary Dividends | $ 110,000 | 59,000 | 13,000 | |
Extraordinary dividend paid after seeking and receiving approval from the Illinois regulatory authorities | $ 0 | $ 110,000 | ||
Non restricted net assets | $ 25,300 |
Statutory Information and Div_4
Statutory Information and Dividend Restrictions - Schedule of Selected Information for Insurance Subsidiaries (Details) - Insurance Subsidiaries - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Selected information for insurance subsidiaries | |||
Consolidated net income, statutory basis | $ 120,329 | $ 129,625 | $ 135,791 |
Consolidated surplus, statutory basis | $ 1,121,592 | $ 1,029,671 | $ 829,775 |
Commitments And Contingent Li_2
Commitments And Contingent Liabilities (Details) $ in Millions | Dec. 31, 2020USD ($) |
Other Assets | |
Fair value investments entities that calculate net asset value per share unfunded commitments | $ 23.1 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Leases [Abstract] | |
Expense associated with operating leases | $ 6.9 |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Expense and Other Lease Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 5,504 | $ 5,772 |
Variable lease cost | 1,346 | 1,850 |
Sublease income | (262) | |
Total lease cost | 6,588 | 7,622 |
Cash paid for amounts included in measurement of lease liabilities | ||
Operating cash flows from operating leases | 5,963 | 5,711 |
ROU assets obtained in exchange for new operating lease liabilities | 81 | 1,388 |
Reduction to ROU assets resulting from reduction to lease liabilities | 18 | 1,279 |
Other non-cash reductions to ROU assets | 1,192 | |
Operating lease ROU assets | $ 16,200 | $ 22,335 |
Operating Lease Right Of Use Asset Statement Of Financial Position Extensible List | us-gaap:OtherAssets | us-gaap:OtherAssets |
Operating lease liabilities | $ 19,072 | $ 24,475 |
Operating Lease Liability Statement Of Financial Position Extensible List | us-gaap:OtherLiabilities | us-gaap:OtherLiabilities |
Weighted-average remaining lease term - operating leases | 3 years 10 months 13 days | 4 years 8 months 8 days |
Weighted-average discount rate - operating leases | 2.32% | 2.33% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments under Non-cancellable Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Future minimum lease payments under non-cancellable leases | ||
2021 | $ 5,992 | |
2022 | 5,915 | |
2023 | 4,424 | |
2024 | 2,334 | |
2025 | 802 | |
Thereafter | 563 | |
Total future minimum lease payments | 20,030 | |
Less imputed interest | (958) | |
Total operating lease liability | $ 19,072 | $ 24,475 |
Operating Segment Information -
Operating Segment Information - Additional Information (Details) | Dec. 31, 2020 |
Maui Jim Inc. | |
Segment Reporting Information [Line Items] | |
Ownership percentage | 40.00% |
Prime Holdings Insurance Services, Inc. (Prime) | |
Segment Reporting Information [Line Items] | |
Ownership percentage | 23.00% |
Operating Segment Information_2
Operating Segment Information - Summary of Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUES | |||
Net premiums earned | $ 865,747 | $ 839,111 | $ 791,366 |
Net investment income | 67,893 | 68,870 | 62,085 |
Net realized gains | 17,885 | 17,520 | 63,407 |
Net unrealized gains (losses) on equity securities | 32,101 | 78,090 | (98,735) |
Consolidated revenue | 983,626 | 1,003,591 | 818,123 |
INSURANCE EXPENSES | |||
Loss and settlement expenses | 442,884 | 413,416 | 428,193 |
Policy acquisition costs | 286,438 | 288,697 | 267,738 |
Other insurance expenses | 66,828 | 69,430 | 53,803 |
Insurance expenses | 796,150 | 771,543 | 749,734 |
NET EARNINGS | |||
Net underwriting income | 69,597 | 67,568 | 41,632 |
Net investment income | 67,893 | 68,870 | 62,085 |
Net realized gains | 17,885 | 17,520 | 63,407 |
Net unrealized gains (losses) on equity securities | 32,101 | 78,090 | (98,735) |
Interest on debt | (7,603) | (7,588) | (7,437) |
General corporate expense | (10,265) | (12,686) | (9,427) |
Equity in earnings of unconsolidated investees | 20,233 | 20,960 | 16,056 |
Earnings before income taxes | 189,841 | 232,734 | 67,581 |
Income tax expense | 32,750 | 41,092 | 3,402 |
Net earnings | 157,091 | 191,642 | 64,179 |
Casualty Segment | |||
REVENUES | |||
Net premiums earned | 569,521 | 558,458 | 523,472 |
INSURANCE EXPENSES | |||
Loss and settlement expenses | 322,099 | 330,156 | 329,763 |
Policy acquisition costs | 162,058 | 166,499 | 151,007 |
Other insurance expenses | 40,937 | 41,202 | 31,562 |
NET EARNINGS | |||
Net underwriting income | 44,427 | 20,601 | 11,140 |
Property segment | |||
REVENUES | |||
Net premiums earned | 183,720 | 164,022 | 149,261 |
INSURANCE EXPENSES | |||
Loss and settlement expenses | 111,356 | 73,614 | 83,822 |
Policy acquisition costs | 59,926 | 55,986 | 51,830 |
Other insurance expenses | 15,620 | 16,279 | 12,725 |
NET EARNINGS | |||
Net underwriting income | (3,182) | 18,143 | 884 |
Surety Segment | |||
REVENUES | |||
Net premiums earned | 112,506 | 116,631 | 118,633 |
INSURANCE EXPENSES | |||
Loss and settlement expenses | 9,429 | 9,646 | 14,608 |
Policy acquisition costs | 64,454 | 66,212 | 64,901 |
Other insurance expenses | 10,271 | 11,949 | 9,516 |
NET EARNINGS | |||
Net underwriting income | $ 28,352 | $ 28,824 | $ 29,608 |
Operating Segment Information_3
Operating Segment Information - Summary of Revenue by Major Product Type (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Net premiums earned | $ 865,747 | $ 839,111 | $ 791,366 |
Casualty Segment | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 569,521 | 558,458 | 523,472 |
Casualty Segment | Commercial excess and personal umbrella | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 178,214 | 140,483 | 124,350 |
Casualty Segment | General Liability | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 91,653 | 98,880 | 93,928 |
Casualty Segment | Commercial transportation | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 64,624 | 83,213 | 81,053 |
Casualty Segment | Professional services | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 85,196 | 81,329 | 79,951 |
Casualty Segment | Small commercial | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 63,357 | 55,701 | 51,519 |
Casualty Segment | Executive Products | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 26,509 | 27,088 | 21,326 |
Casualty Segment | Other casualty | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 59,968 | 71,764 | 71,345 |
Property segment | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 183,720 | 164,022 | 149,261 |
Property segment | Marine | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 81,852 | 74,887 | 59,795 |
Property segment | Commercial property | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 79,406 | 68,310 | 71,501 |
Property segment | Specialty Personal | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 19,596 | 19,316 | 16,901 |
Property segment | Other property | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 2,866 | 1,509 | 1,064 |
Surety Segment | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 112,506 | 116,631 | 118,633 |
Surety Segment | Miscellaneous | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 42,292 | 44,721 | 46,968 |
Surety Segment | Commercial | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 42,872 | 43,553 | 43,469 |
Surety Segment | Contract | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | $ 27,342 | $ 28,357 | $ 28,196 |
Schedule I-Summary Of Investm_2
Schedule I-Summary Of Investments-Other than Investments in Related Parties (Details) $ in Thousands | Dec. 31, 2020USD ($) |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | $ 2,468,815 |
Fair Value | 2,837,081 |
Amount at which shown in the balance sheet | 2,837,081 |
Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 2,061,467 |
Fair Value | 2,196,626 |
Amount at which shown in the balance sheet | 2,196,626 |
Debt Securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 2,061,467 |
Fair Value | 2,196,626 |
Amount at which shown in the balance sheet | 2,196,626 |
U.S. government | Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 170,110 |
Fair Value | 183,357 |
Amount at which shown in the balance sheet | 183,357 |
U.S. Agency | Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 28,902 |
Fair Value | 32,872 |
Amount at which shown in the balance sheet | 32,872 |
Non-U.S. govt. & agency | Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 10,298 |
Fair Value | 10,965 |
Amount at which shown in the balance sheet | 10,965 |
Agency MBS | Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 384,015 |
Fair Value | 402,071 |
Amount at which shown in the balance sheet | 402,071 |
ABS/CMBS/MBS | Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 213,223 |
Fair Value | 218,373 |
Amount at which shown in the balance sheet | 218,373 |
Corporate Debt | Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 753,404 |
Fair Value | 816,592 |
Amount at which shown in the balance sheet | 816,592 |
Municipal | Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 501,515 |
Fair Value | 532,396 |
Amount at which shown in the balance sheet | 532,396 |
Equity Securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 293,190 |
Fair Value | 524,006 |
Amount at which shown in the balance sheet | 524,006 |
Ind Misc & All Other | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 156,941 |
Fair Value | 257,154 |
Amount at which shown in the balance sheet | 257,154 |
ETFs (Ind/misc) | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 136,249 |
Fair Value | 266,852 |
Amount at which shown in the balance sheet | 266,852 |
Cash and Short-term Investments | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 62,217 |
Fair Value | 62,217 |
Amount at which shown in the balance sheet | 62,217 |
Other Invested Assets | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 51,941 |
Fair Value | 54,232 |
Amount at which shown in the balance sheet | $ 54,232 |
Schedule II - Condensed Financi
Schedule II - Condensed Financial Information of Registrant (Parent Company) - Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||||
Cash | $ 62,217 | $ 46,203 | ||
Investment in unconsolidated investees | 128,382 | 103,836 | ||
Fixed income: | ||||
Available-for-sale, at fair value (amortized cost of $60,657 and allowance for credit losses of $0 in 2020) (amortized cost of $42,747 and allowance for credit losses of $0 in 2019) | 2,196,626 | 1,983,086 | ||
Property and equipment, at cost, net of accumulated depreciation of $1,629 in 2020 and $1,562 in 2019 | 51,406 | 53,121 | ||
TOTAL ASSETS | 3,938,485 | 3,545,721 | ||
LIABILITIES | ||||
Bonds payable, long-term debt | 149,489 | 149,302 | ||
TOTAL LIABILITIES | 2,802,507 | 2,550,333 | ||
SHAREHOLDERS' EQUITY | ||||
Common stock ($0.01 par value) (Shares authorized - 200,000,000 in 2020 and 100,000,000 in 2019) (68,072,794 shares issued and 45,142,580 shares outstanding in 2020) (67,799,229 shares issued and 44,869,015 shares outstanding in 2019) | 681 | 678 | ||
Paid-in capital | 335,365 | 321,190 | ||
Accumulated other comprehensive earnings | 108,714 | 52,473 | ||
Retained earnings | 1,084,217 | 1,014,046 | ||
Deferred compensation | 8,292 | 7,980 | ||
Treasury stock, at cost (22,930,214 shares in 2020 and 2019) | (401,291) | (400,979) | ||
TOTAL SHAREHOLDERS' EQUITY | 1,135,978 | 995,388 | $ 806,842 | $ 853,598 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 3,938,485 | 3,545,721 | ||
Parent Company | ||||
ASSETS | ||||
Cash | 381 | 350 | ||
Investments in subsidiaries | 1,148,342 | 1,034,679 | ||
Investment in unconsolidated investees | 90,893 | 79,597 | ||
Fixed income: | ||||
Available-for-sale, at fair value (amortized cost of $60,657 and allowance for credit losses of $0 in 2020) (amortized cost of $42,747 and allowance for credit losses of $0 in 2019) | 64,211 | 45,538 | ||
Property and equipment, at cost, net of accumulated depreciation of $1,629 in 2020 and $1,562 in 2019 | 1,779 | 1,846 | ||
Income taxes receivable - current | 1,500 | 842 | ||
Other assets | 895 | 400 | ||
TOTAL ASSETS | 1,308,001 | 1,163,252 | ||
LIABILITIES | ||||
Accounts payable, affiliates | 2,556 | 1,310 | ||
Income taxes - deferred | 16,988 | 14,578 | ||
Bonds payable, long-term debt | 149,489 | 149,302 | ||
Interest payable, long-term debt | 2,153 | 2,153 | ||
Other liabilities | 837 | 521 | ||
TOTAL LIABILITIES | 172,023 | 167,864 | ||
SHAREHOLDERS' EQUITY | ||||
Common stock ($0.01 par value) (Shares authorized - 200,000,000 in 2020 and 100,000,000 in 2019) (68,072,794 shares issued and 45,142,580 shares outstanding in 2020) (67,799,229 shares issued and 44,869,015 shares outstanding in 2019) | 681 | 678 | ||
Paid-in capital | 335,365 | 321,190 | ||
Accumulated other comprehensive earnings | 108,714 | 52,473 | ||
Retained earnings | 1,084,217 | 1,014,046 | ||
Deferred compensation | 8,292 | 7,980 | ||
Treasury stock, at cost (22,930,214 shares in 2020 and 2019) | (401,291) | (400,979) | ||
TOTAL SHAREHOLDERS' EQUITY | 1,135,978 | 995,388 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,308,001 | $ 1,163,252 |
Schedule II - Condensed Finan_2
Schedule II - Condensed Financial Information of Registrant (Parent Company) - Balance Sheets (Parenthetical) (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Condensed Balance Sheet Statements Captions [Line Items] | ||||
Available-for-sale, amortized cost | $ 2,061,467 | $ 1,915,278 | ||
Available-for-sale, allowance for credit losses | 397 | 0 | ||
Property and equipment, accumulated depreciation | $ 68,682 | $ 62,703 | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 1 |
Common stock, shares authorized (in shares) | 200,000,000 | 100,000,000 | ||
Common stock, shares issued (in shares) | 68,072,794 | 67,799,229 | ||
Common stock, shares outstanding (in shares) | 45,142,580 | 44,869,015 | ||
Treasury stock, shares (in shares) | 22,930,214 | 22,930,214 | ||
Parent Company | ||||
Condensed Balance Sheet Statements Captions [Line Items] | ||||
Available-for-sale, amortized cost | $ 60,657 | $ 42,747 | ||
Available-for-sale, allowance for credit losses | 0 | 0 | ||
Property and equipment, accumulated depreciation | $ 1,629 | $ 1,562 | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized (in shares) | 200,000,000 | 100,000,000 | ||
Common stock, shares issued (in shares) | 68,072,794 | 67,799,229 | ||
Common stock, shares outstanding (in shares) | 45,142,580 | 44,869,015 | ||
Treasury stock, shares (in shares) | 22,930,214 | 22,930,214 |
Schedule II - Condensed Finan_3
Schedule II - Condensed Financial Information of Registrant (Parent Company) - Condensed Statements of Earnings and Comprehensive Earnings (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed Statement Of Income Captions [Line Items] | |||
Net investment income | $ 67,893 | $ 68,870 | $ 62,085 |
Net realized gains | 17,885 | 17,520 | 63,624 |
Equity in earnings of unconsolidated investees | 20,233 | 20,960 | 16,056 |
Interest on debt | (7,603) | (7,588) | (7,437) |
Earnings before income taxes | 189,841 | 232,734 | 67,581 |
Income tax expense | 32,750 | 41,092 | 3,402 |
Net earnings | 157,091 | 191,642 | 64,179 |
Unrealized gains (losses) on securities: | |||
Net current period other comprehensive earnings (loss) | 56,219 | 67,045 | (33,997) |
Comprehensive earnings | 213,310 | 258,687 | 30,182 |
Parent Company | |||
Condensed Statement Of Income Captions [Line Items] | |||
Net investment income | 1,412 | 1,656 | 648 |
Net realized gains | 501 | 463 | (142) |
Equity in earnings of unconsolidated investees | 10,368 | 13,592 | 12,471 |
Selling, general and administrative expenses | (10,265) | (12,686) | (9,427) |
Interest on debt | (7,603) | (7,588) | (7,437) |
Earnings before income taxes | (5,587) | (4,563) | (3,887) |
Income tax expense | (2,885) | (4,989) | (2,359) |
Net earnings (loss) before equity in net earnings of subsidiaries | (2,702) | 426 | (1,528) |
Equity in net earnings of subsidiaries | 159,793 | 191,216 | 65,707 |
Net earnings | 157,091 | 191,642 | 64,179 |
Unrealized gains (losses) on securities: | |||
Unrealized holding gains arising during the period | 994 | 1,727 | 710 |
Less: reclassification adjustment for (gains) losses included in net earnings | (390) | (365) | 112 |
Other comprehensive earnings - parent only | 604 | 1,362 | 822 |
Equity in other comprehensive earnings (loss) of subsidiaries/investees | 55,615 | 65,683 | (34,819) |
Net current period other comprehensive earnings (loss) | 56,219 | 67,045 | (33,997) |
Comprehensive earnings | $ 213,310 | $ 258,687 | $ 30,182 |
Schedule II - Condensed Finan_4
Schedule II - Condensed Financial Information of Registrant (Parent Company) - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net earnings | $ 157,091 | $ 191,642 | $ 64,179 |
Adjustments to reconcile net losses to net cash provided by (used in) operating activities: | |||
Net realized (gains) losses | (17,885) | (17,520) | (63,624) |
Depreciation | 7,432 | 8,164 | 7,042 |
Other items, net | 10,460 | 25,341 | 6,171 |
Changes in investment in unconsolidated investees: | |||
Undistributed earnings | (20,233) | (20,960) | (16,056) |
Dividends received | 4,675 | 13,200 | 9,900 |
Net cash provided by operating activities | 263,259 | 276,917 | 217,102 |
Purchase of: | |||
Fixed income securities, available-for-sale | (518,362) | (539,726) | (725,675) |
Other | (12,851) | (22,751) | (18,754) |
Sale of: | |||
Fixed income securities, available-for-sale | 84,587 | 196,558 | 395,019 |
Call or maturity of: | |||
Fixed income, available-for-sale | 283,107 | 201,383 | 187,380 |
Net proceeds from sale (purchase) of short-term investments | 11,550 | (1,570) | |
Net cash used in investing activities | (167,987) | (184,753) | (134,209) |
Cash flows from financing activities: | |||
Proceeds from stock option exercises | 8,648 | 9,490 | 6,076 |
Net cash used in financing activities | (79,258) | (76,101) | (77,024) |
Net increase in cash | 16,014 | 16,063 | 5,869 |
Cash at beginning of year | 46,203 | 30,140 | 24,271 |
Cash at end of year | 62,217 | 46,203 | 30,140 |
Parent Company | |||
Cash flows from operating activities: | |||
Net earnings | (2,702) | 426 | (1,528) |
Adjustments to reconcile net losses to net cash provided by (used in) operating activities: | |||
Net realized (gains) losses | (501) | (463) | 142 |
Depreciation | 67 | 68 | 68 |
Other items, net | 2,270 | 2,487 | (471) |
Change in: | |||
Affiliate balances receivable/payable | 1,246 | 1,180 | 1,187 |
Federal income taxes | 1,399 | (1,673) | 3,430 |
Changes in investment in unconsolidated investees: | |||
Undistributed earnings | (10,368) | (13,592) | (12,471) |
Dividends received | 13,200 | 9,900 | |
Net cash provided by operating activities | (8,589) | 1,633 | 257 |
Purchase of: | |||
Fixed income securities, available-for-sale | (24,950) | (2,507) | (73,812) |
Other | (346) | ||
Sale of: | |||
Fixed income securities, available-for-sale | 3,767 | 14,273 | 12,056 |
Call or maturity of: | |||
Fixed income, available-for-sale | 3,492 | 29,501 | 75,662 |
Net proceeds from sale (purchase) of short-term investments | 70 | ||
Cash dividends received-subsidiaries | 110,000 | 34,003 | 73,363 |
Net cash used in investing activities | 91,963 | 75,270 | 87,339 |
Cash flows from financing activities: | |||
Proceeds from stock option exercises | 8,648 | 9,490 | 6,076 |
Cash dividends paid | (95,793) | (93,315) | (90,662) |
Other | 3,802 | 4,058 | |
Net cash used in financing activities | (83,343) | (79,767) | (84,586) |
Net increase in cash | 31 | (2,864) | 3,010 |
Cash at beginning of year | 350 | 3,214 | 204 |
Cash at end of year | $ 381 | $ 350 | $ 3,214 |
Schedule II - Condensed Finan_5
Schedule II - Condensed Financial Information of Registrant (Parent Company) - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed Cash Flow Statements Captions [Line Items] | |||
Interest paid | $ 7.3 | $ 7.3 | $ 7.3 |
Parent Company | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Interest paid | $ 7.3 | $ 7.3 | $ 7.3 |
Schedule III-Supplementary In_2
Schedule III-Supplementary Insurance Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplementary insurance information | |||
Deferred policy acquisition costs | $ 88,425 | $ 85,044 | $ 84,934 |
Unpaid losses and settlement expenses, gross | 1,750,049 | 1,574,352 | 1,461,348 |
Unearned premiums, gross | 586,386 | 540,213 | 496,505 |
Net premiums earned | 865,747 | 839,111 | 791,366 |
Incurred losses and settlement expenses | |||
Current accident year | 543,937 | 488,700 | 478,143 |
Prior accident years | (101,053) | (75,284) | (49,950) |
Policy acquisition costs | 286,438 | 288,697 | 267,738 |
Other operating expenses | 66,828 | 69,430 | 53,803 |
Net premiums written | 892,088 | 860,337 | 823,175 |
Casualty Segment | |||
Supplementary insurance information | |||
Deferred policy acquisition costs | 48,255 | 47,805 | 50,040 |
Unpaid losses and settlement expenses, gross | 1,567,544 | 1,435,619 | 1,283,204 |
Unearned premiums, gross | 385,736 | 354,118 | 330,836 |
Net premiums earned | 569,521 | 558,458 | 523,472 |
Incurred losses and settlement expenses | |||
Current accident year | 397,174 | 392,653 | 363,015 |
Prior accident years | (75,075) | (62,497) | (33,252) |
Policy acquisition costs | 162,058 | 166,499 | 151,007 |
Other operating expenses | 40,937 | 41,202 | 31,562 |
Net premiums written | 583,244 | 564,979 | 547,177 |
Property segment | |||
Supplementary insurance information | |||
Deferred policy acquisition costs | 19,655 | 17,057 | 14,090 |
Unpaid losses and settlement expenses, gross | 150,008 | 100,000 | 134,822 |
Unearned premiums, gross | 131,274 | 116,624 | 93,032 |
Net premiums earned | 183,720 | 164,022 | 149,261 |
Incurred losses and settlement expenses | |||
Current accident year | 124,375 | 78,075 | 94,635 |
Prior accident years | (13,019) | (4,461) | (10,813) |
Policy acquisition costs | 59,926 | 55,986 | 51,830 |
Other operating expenses | 15,620 | 16,279 | 12,725 |
Net premiums written | 196,603 | 181,974 | 155,601 |
Surety Segment | |||
Supplementary insurance information | |||
Deferred policy acquisition costs | 20,515 | 20,182 | 20,804 |
Unpaid losses and settlement expenses, gross | 32,497 | 38,733 | 43,322 |
Unearned premiums, gross | 69,376 | 69,471 | 72,637 |
Net premiums earned | 112,506 | 116,631 | 118,633 |
Incurred losses and settlement expenses | |||
Current accident year | 22,388 | 17,972 | 20,493 |
Prior accident years | (12,959) | (8,326) | (5,885) |
Policy acquisition costs | 64,454 | 66,212 | 64,901 |
Other operating expenses | 10,271 | 11,949 | 9,516 |
Net premiums written | $ 112,241 | $ 113,384 | $ 120,397 |
Schedule IV-Reinsurance (Detail
Schedule IV-Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
RLI Insurance Group Premiums earned | |||
Direct amount | $ 1,062,608 | $ 981,121 | $ 896,234 |
Ceded to other companies | 224,512 | 182,183 | 146,794 |
Assumed from other companies | 27,651 | 40,173 | 41,926 |
Net | $ 865,747 | $ 839,111 | $ 791,366 |
Percentage of amount assumed to net | 3.20% | 4.80% | 5.30% |
Casualty Segment | |||
RLI Insurance Group Premiums earned | |||
Direct amount | $ 690,718 | $ 641,159 | $ 578,643 |
Ceded to other companies | 148,271 | 122,452 | 96,639 |
Assumed from other companies | 27,074 | 39,751 | 41,468 |
Net | $ 569,521 | $ 558,458 | $ 523,472 |
Percentage of amount assumed to net | 4.80% | 7.10% | 7.90% |
Property segment | |||
RLI Insurance Group Premiums earned | |||
Direct amount | $ 253,781 | $ 217,657 | $ 193,855 |
Ceded to other companies | 70,398 | 53,810 | 44,634 |
Assumed from other companies | 337 | 175 | 40 |
Net | $ 183,720 | $ 164,022 | $ 149,261 |
Percentage of amount assumed to net | 0.20% | 0.10% | 0.00% |
Surety segment | |||
RLI Insurance Group Premiums earned | |||
Direct amount | $ 118,109 | $ 122,305 | $ 123,736 |
Ceded to other companies | 5,843 | 5,921 | 5,521 |
Assumed from other companies | 240 | 247 | 418 |
Net | $ 112,506 | $ 116,631 | $ 118,633 |
Percentage of amount assumed to net | 0.20% | 0.20% | 0.40% |
Schedule V-Valuation and Qual_2
Schedule V-Valuation and Qualifying Accounts (Details) - Allowance for Uncollectible Reinsurance - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Valuation allowances and qualifying accounts | |||
Balance at beginning of period | $ 25,066 | $ 25,911 | $ 25,911 |
Amounts charged to expense | (522) | (647) | |
Amounts recovered (written off) | (5) | (198) | |
Balance at end of period | $ 24,539 | $ 25,066 | $ 25,911 |
Schedule VI-Supplementary Inf_2
Schedule VI-Supplementary Information Concerning Property-Casualty Insurance Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Claims and claim adjustment expenses incurred related to: | |||
Current accident year | $ 543,937 | $ 488,700 | $ 478,143 |
Prior accident years | (101,053) | (75,284) | (49,950) |
Amortization of deferred acquisition costs | 286,438 | 288,697 | 267,738 |
Consolidated Property-Casualty Insurance Operations | |||
Supplemental Information For Property Casualty Insurance Underwriters [Line Items] | |||
Deferred policy acquisition costs | 88,425 | 85,044 | 84,934 |
Claims and claim adjustment expense reserves | 1,750,049 | 1,574,352 | 1,461,348 |
Unearned premiums, gross | 586,386 | 540,213 | 496,505 |
Net premiums earned | 865,747 | 839,111 | 791,366 |
Net investment income | 67,893 | 68,870 | 62,085 |
Claims and claim adjustment expenses incurred related to: | |||
Current accident year | 543,937 | 488,700 | 478,143 |
Prior accident years | (101,053) | (75,284) | (49,950) |
Amortization of deferred acquisition costs | 286,438 | 288,697 | 267,738 |
Paid claims and claims adjustment expenses | 325,054 | 319,930 | 301,356 |
Net premiums written | $ 892,088 | $ 860,337 | $ 823,175 |