Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Feb. 15, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | ||||
Document Type | 10-K | |||
Amendment Flag | false | |||
Document Period End Date | Dec. 31, 2018 | |||
Document Fiscal Year Focus | 2,018 | |||
Document Fiscal Period Focus | FY | |||
Entity Registrant Name | HORACE MANN EDUCATORS CORP /DE/ | |||
Entity Central Index Key | 850,141 | |||
Current Fiscal Year End Date | --12-31 | |||
Entity Well-known Seasoned Issuer | Yes | |||
Entity Voluntary Filers | No | |||
Entity Current Reporting Status | Yes | |||
Entity Emerging Growth Company | false | |||
Entity Small Business | false | |||
Entity Shell Company | false | |||
Entity Filer Category | Large Accelerated Filer | |||
Entity Public Float | $ 1,792.2 | $ 1,792.2 | ||
Trading Symbol | HMN | |||
Entity Common Stock, Shares Outstanding | 40,986,161 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Investments | ||
Fixed maturity securities, available for sale, at fair value (amortized cost 2018, $7,373,911; 2017, $7,302,950) | $ 7,515,318 | $ 7,724,075 |
Equity securities, available for sale, at fair value (cost 2017, $116,320) | 111,750 | 135,466 |
Limited partnership interests | 328,516 | 247,266 |
Short-term and other investments | 295,093 | 245,541 |
Total investments | 8,250,677 | 8,352,348 |
Cash | 11,906 | 7,627 |
Deferred policy acquisition costs | 298,742 | 257,826 |
Goodwill | 47,396 | 47,396 |
Other assets | 422,047 | 381,182 |
Separate Account (variable annuity) assets | 2,001,128 | 2,151,961 |
Total assets | 11,031,896 | 11,198,340 |
Policy liabilities | ||
Investment contract and life policy reserves | 5,711,193 | 5,573,735 |
Unpaid claims and claim expenses | 396,714 | 347,749 |
Unearned premiums | 276,225 | 260,539 |
Total policy liabilities | 6,384,132 | 6,182,023 |
Other policyholder funds | 767,988 | 724,261 |
Other liabilities | 290,358 | 341,053 |
Long-term debt | 297,740 | 297,469 |
Separate Account (variable annuity) liabilities | 2,001,128 | 2,151,961 |
Total liabilities | 9,741,346 | 9,696,767 |
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued | 0 | 0 |
Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2018, 65,820,369; 2017, 65,439,245 | 66 | 65 |
Additional paid-in capital | 475,109 | 464,246 |
Retained earnings | 1,216,582 | 1,231,177 |
Accumulated other comprehensive income (loss), net of tax: | ||
Net unrealized investment gains on securities | 96,941 | 300,177 |
Net funded status of benefit plans | (12,185) | (13,217) |
Treasury stock, at cost, 2018, 24,850,484 shares; 2017, 24,721,372 shares | (485,963) | (480,875) |
Total shareholders' equity | 1,290,550 | 1,501,573 |
Total liabilities and shareholders' equity | $ 11,031,896 | $ 11,198,340 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||||
Fixed maturities, available for sale, amortized cost (in usd) | $ 7,373,911 | $ 7,302,950 | ||
Equity securities, available for sale, cost (in usd) | $ 0 | $ 116,320 | ||
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||
Preferred stock, shares issued | 0 | 0 | ||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 75,000,000 | 75,000,000 | ||
Common stock, shares issued | 65,820,369 | 65,439,245 | ||
Treasury stock, shares | 24,850,484 | 24,721,372 | 24,672,932 | 23,971,522 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | |||
Insurance premiums and contract charges earned | $ 817,333 | $ 794,703 | $ 759,146 |
Net investment income | 376,507 | 373,630 | 361,186 |
Net investment gains (losses) | (12,543) | (3,406) | 4,123 |
Other income | 10,302 | 6,623 | 4,455 |
Total revenues | 1,191,599 | 1,171,550 | 1,128,910 |
Benefits, losses and expenses | |||
Benefits, claims and settlement expenses | 637,560 | 582,306 | 541,004 |
Interest credited | 206,199 | 198,635 | 192,022 |
DAC amortization expense | 109,889 | 102,185 | 96,732 |
Operating expenses | 205,413 | 187,789 | 173,112 |
Interest expense | 13,001 | 11,948 | 11,808 |
Total benefits, losses and expenses | 1,172,062 | 1,082,863 | 1,014,678 |
Income before income taxes | 19,537 | 88,687 | 114,232 |
Income tax expense (benefit) | 1,194 | (80,772) | 30,467 |
Net income | $ 18,343 | $ 169,459 | $ 83,765 |
Net income per share | |||
Basic (in usd per share) | $ 0.44 | $ 4.10 | $ 2.04 |
Diluted (in usd per share) | $ 0.44 | $ 4.08 | $ 2.02 |
Weighted average number of shares and equivalent shares | |||
Basic (in shares) | 41,570,492 | 41,364,546 | 41,158,349 |
Diluted (in shares) | 41,894,232 | 41,564,979 | 41,475,516 |
Net investment gains (losses) | |||
Total other-than-temporary impairment losses on securities | $ (1,530) | $ (12,620) | $ (11,401) |
Portion of losses recognized in other comprehensive income (loss) | 0 | 0 | (290) |
Net other-than-temporary impairment losses on securities recognized in earnings | (1,530) | (12,620) | (11,111) |
Sales and other, net | 3,491 | 7,756 | 16,286 |
Change in fair value - equity securities | (18,323) | 0 | 0 |
Change in fair value and gains realized on settlements - derivative instruments | 3,819 | 1,458 | (1,052) |
Total | $ (12,543) | $ (3,406) | $ 4,123 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Comprehensive income (loss) | |||
Net income | $ 18,343 | $ 169,459 | $ 83,765 |
Other comprehensive income (loss), net of tax: | |||
Change in net unrealized investment gains (losses) on securities | (188,195) | 74,405 | 571 |
Change in net funded status of benefit plans | 1,032 | 734 | (23) |
Cumulative effect of change in accounting principle | (15,041) | 0 | 0 |
Other comprehensive income (loss) | (202,204) | 75,139 | 548 |
Total | $ (183,861) | $ 244,598 | $ 84,313 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss), net of tax: | Treasury stock, at cost |
Beginning balance at Dec. 31, 2015 | $ 65 | $ 442,648 | $ 1,116,277 | $ 163,373 | $ (457,702) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Options exercised, 2018, 145,438 shares; 2017, 208,306 shares; 2016, 142,203 shares | 0 | |||||
Conversion of common stock units, 2018, 30,368 shares; 2017, 15,981 shares; 2016, 15,629 shares | 0 | |||||
Conversion of restricted common stock units, 2018, 212,382 shares; 2017, 313,292 shares; 2016, 222,297 shares | 0 | |||||
Options exercised and conversion of common stock units and restricted common stock units | 2,696 | |||||
Share-based compensation expense | 8,135 | |||||
Net income | $ 83,765 | 83,765 | ||||
Cash dividends, 2018, $1.14 per share; 2017, $1.10 per share; 2016, $1.06 per share | (44,310) | |||||
Reclassification of deferred taxes | 0 | 0 | ||||
Cumulative effect of change in accounting principle | 0 | 0 | 0 | |||
Change in unrealized investment gains (losses) on securities | 571 | 571 | ||||
Change in net funded status of benefit plans | (23) | (23) | ||||
Acquisition of shares, 2018, 129,112 shares; 2017, 48,440 shares; 2016, 701,410 shares | (21,513) | |||||
Ending balance at Dec. 31, 2016 | 1,293,982 | 65 | 453,479 | 1,155,732 | 163,921 | (479,215) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Options exercised, 2018, 145,438 shares; 2017, 208,306 shares; 2016, 142,203 shares | 0 | |||||
Conversion of common stock units, 2018, 30,368 shares; 2017, 15,981 shares; 2016, 15,629 shares | 0 | |||||
Conversion of restricted common stock units, 2018, 212,382 shares; 2017, 313,292 shares; 2016, 222,297 shares | 0 | |||||
Options exercised and conversion of common stock units and restricted common stock units | 2,962 | |||||
Share-based compensation expense | 7,805 | |||||
Net income | 169,459 | 169,459 | ||||
Cash dividends, 2018, $1.14 per share; 2017, $1.10 per share; 2016, $1.06 per share | (46,114) | |||||
Reclassification of deferred taxes | 47,900 | (47,900) | 47,900 | |||
Cumulative effect of change in accounting principle | 0 | 0 | 0 | |||
Change in unrealized investment gains (losses) on securities | 74,405 | 74,405 | ||||
Change in net funded status of benefit plans | 734 | 734 | ||||
Acquisition of shares, 2018, 129,112 shares; 2017, 48,440 shares; 2016, 701,410 shares | (1,660) | |||||
Ending balance at Dec. 31, 2017 | 1,501,573 | 65 | 464,246 | 1,231,177 | 286,960 | (480,875) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Options exercised, 2018, 145,438 shares; 2017, 208,306 shares; 2016, 142,203 shares | 0 | |||||
Conversion of common stock units, 2018, 30,368 shares; 2017, 15,981 shares; 2016, 15,629 shares | 0 | |||||
Conversion of restricted common stock units, 2018, 212,382 shares; 2017, 313,292 shares; 2016, 222,297 shares | 1 | |||||
Options exercised and conversion of common stock units and restricted common stock units | 3,008 | |||||
Share-based compensation expense | 7,855 | |||||
Net income | 18,343 | 18,343 | ||||
Cash dividends, 2018, $1.14 per share; 2017, $1.10 per share; 2016, $1.06 per share | (47,979) | |||||
Reclassification of deferred taxes | 0 | 0 | ||||
Cumulative effect of change in accounting principle | (15,041) | 15,041 | (15,041) | |||
Change in unrealized investment gains (losses) on securities | (188,195) | (188,195) | ||||
Change in net funded status of benefit plans | 1,032 | 1,032 | ||||
Acquisition of shares, 2018, 129,112 shares; 2017, 48,440 shares; 2016, 701,410 shares | (5,088) | |||||
Ending balance at Dec. 31, 2018 | $ 1,290,550 | $ 66 | $ 475,109 | $ 1,216,582 | $ 84,756 | $ (485,963) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Stockholders' Equity [Abstract] | |||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Options exercised, shares | 145,438 | 208,306 | 142,203 |
Conversion of common stock units, shares | 30,368 | 15,981 | 15,629 |
Conversion of restricted stock units, shares | 212,382 | 313,292 | 222,297 |
Cash dividends (in usd per share) | $ 1.14 | $ 1.10 | $ 1.06 |
Treasury stock, shares | 24,850,484 | 24,721,372 | 24,672,932 |
Treasury stock, acquisition of shares | 129,112 | 48,440 | 701,410 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows - operating activities | |||
Premiums collected | $ 760,367 | $ 739,503 | $ 710,646 |
Policyholder benefits paid | (590,479) | (528,501) | (511,017) |
Policy acquisition and other operating expenses paid | (305,000) | (283,351) | (277,076) |
Income taxes paid | (8,679) | (16,259) | (27,847) |
Investment income collected | 373,568 | 363,283 | 344,778 |
Interest expense paid | (12,532) | (11,555) | (11,754) |
Other | (16,357) | (6,534) | (16,297) |
Net cash provided by operating activities | 200,888 | 256,586 | 211,433 |
Fixed maturity securities | |||
Purchases | (1,428,889) | (1,569,220) | (1,566,047) |
Sales | 625,527 | 500,760 | 429,251 |
Maturities, paydowns, calls and redemptions | 737,535 | 927,665 | 799,653 |
Equity securities | |||
Purchases | (13,430) | (32,312) | (60,135) |
Sales and repayments | 25,498 | 53,100 | 21,210 |
Limited partnership interests | |||
Purchases | (93,545) | (103,200) | (70,177) |
Sales | 16,997 | 20,234 | 12,418 |
Change in short-term and other investments, net | (56,192) | (25,691) | 108,467 |
Net cash used in investing activities | (186,499) | (228,664) | (325,360) |
Cash flows - financing activities | |||
Dividends paid to shareholders | (46,689) | (46,114) | (44,310) |
FHLB borrowings | 0 | 50,000 | 0 |
Acquisition of treasury stock | (5,088) | (1,660) | (21,513) |
Proceeds from exercise of stock options | 3,627 | 4,190 | 3,329 |
Withholding tax payments on RSUs tendered | (3,165) | (3,245) | (4,015) |
Annuity contracts: variable, fixed and FHLB funding agreements | |||
Deposits | 489,097 | 453,146 | 520,211 |
Benefits, withdrawals and net transfers to Separate Account (variable annuity) assets | (473,003) | (411,061) | (349,915) |
Transfer of Company 401(k) to a third-party provider | 0 | (77,898) | 0 |
Life policy accounts | |||
Deposits | 8,149 | 4,883 | 4,018 |
Withdrawals and surrenders | (4,910) | (4,458) | (3,965) |
Change in book overdrafts | 21,872 | (4,748) | 11,248 |
Net cash provided by (used in) financing activities | (10,110) | (36,965) | 115,088 |
Net increase (decrease) in cash | 4,279 | (9,043) | 1,161 |
Cash at beginning of period | 7,627 | 16,670 | 15,509 |
Cash at end of period | $ 11,906 | $ 7,627 | $ 16,670 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | NOTE 1 - Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (1) the reported amounts of assets and liabilities, (2) disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and (3) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company has reclassified the presentation of certain prior period information to conform to the current year's presentation. The consolidated financial statements include the accounts of Horace Mann Educators Corporation and its wholly-owned subsidiaries (HMEC; and together with its subsidiaries, the Company or Horace Mann). HMEC and its subsidiaries have common management, share office facilities and are parties to intercompany service agreements for management, administrative, utilization of personnel, financial, investment advisory, underwriting, claims adjusting, agency and data processing services. Under these agreements, costs have been allocated among the companies in conformity with GAAP. In addition, certain of the subsidiaries have entered into intercompany reinsurance agreements. HMEC and its subsidiaries file a consolidated federal income tax return, and there are related tax sharing agreements. All significant intercompany balances and transactions have been eliminated in consolidation. The subsidiaries of HMEC market and underwrite personal lines of property and casualty insurance products (primarily personal lines automobile and property insurance), retirement products (primarily tax-qualified annuities) and life insurance, primarily to K-12 teachers, administrators and other employees of public schools and their families. HMEC's principal operating subsidiaries are Horace Mann Life Insurance Company, Horace Mann Insurance Company, Teachers Insurance Company, Horace Mann Property & Casualty Insurance Company and Horace Mann Lloyds. The Company has evaluated subsequent events through the date these consolidated financial statements were issued. There were no subsequent events requiring adjustment to the consolidated financial statements or disclosure except as described in Note 15. Investments The Company invests predominantly in fixed maturity securities. This category includes primarily bonds and notes, but also includes redeemable preferred stocks. These securities are classified as available for sale and carried at fair value. An adjustment for net unrealized investment gains (losses) on all securities available for sale and carried at fair value, is recognized as a separate component of accumulated other comprehensive income (AOCI) within shareholders' equity, net of applicable deferred taxes and the related impact on deferred policy acquisition costs (DAC) associated with annuity contracts and life insurance products with account values that would have occurred if the securities had been sold at their aggregate fair value and the proceeds reinvested at current yields. Beginning January 1, 2018, equity securities are carried at fair value with changes in fair value recognized as Net investment gains (losses). This category includes nonredeemable preferred stocks and common stocks. Limited partnership interests include investments in private equity funds, real estate funds and other funds. All investments in limited partnership interests are accounted for in accordance with the equity method of accounting. Short-term and other investments are comprised of short-term fixed maturity securities, generally carried at cost which approximates fair value; derivative instruments (all call options), carried at fair value; policy loans, carried at unpaid principal balances; mortgage loans, carried at unpaid principal balances; and restricted Federal Home Loan Bank (FHLB) membership and activity stocks, carried at redemption value which approximates fair value. The Company invests in fixed maturity securities and alternative investment funds that could qualify as variable interest entities, including corporate securities, mortgage-backed securities and asset-backed securities. Such securities have been reviewed and determined not to be subject to consolidation as the Company is not the primary beneficiary of these securities because it does not have the power to direct the activities that most significantly impact the entities' economic performance. Investment income is recognized as earned. Investment income reflects amortization of premiums and accrual of discounts on an effective-yield basis. Realized gains and losses arising from the disposal (recorded on a trade date basis) or impairment of securities are determined based upon specific identification of securities. The Company evaluates all investments in its portfolio for other-than-temporary declines in fair value as described in the following section. Other-than-temporary Impairment The Company's methodology of assessing other-than-temporary impairments (OTTI) for fixed maturity securities is based on security-specific facts and circumstances as of the reporting date. Based on these facts, if (1) the Company has the intent to sell the security, (2) it is more likely than not the Company will be required to sell the security before the anticipated recovery of the amortized cost basis, or (3) management does not expect to recover the entire amortized cost basis of the security, an OTTI is considered to have occurred. Additionally, if events become known that call into question whether the security issuer has the ability to honor its contractual commitments, such security holding will be evaluated to determine whether or not such security has suffered an other-than-temporary decline in fair value. The Company has a policy and process to evaluate fixed maturity securities (at the cusip/issuer level) on a quarterly basis to assess whether there has been OTTI. These reviews, in conjunction with the Company's investment managers' monthly credit reports and relevant factors such as (1) the financial condition and near-term prospects of the issuer, (2) the length of time and extent to which the fair value has been less than the amortized cost basis (3) the Company's intent to sell a security or whether it is more likely than not the Company will be required to sell the security before the anticipated recovery of the amortized cost basis, (4) the market leadership position of the issuer, (5) the debt ratings of the issuer, and (6) the cash flows and liquidity of the issuer or the underlying cash flows for asset-backed securities, are all considered in the impairment assessment. When OTTI is deemed to have occurred, the investment is written-down to fair value at the trade lot level and the credit-related loss portion is recognized as a net investment loss during the period. The amount of total OTTI related to non-credit factors for fixed maturity securities is recognized in other comprehensive income (OCI), net of applicable taxes, in which the Company has the intent to sell the security or if it is more likely than not the Company will be required to sell the security before the anticipated recovery of the amortized cost basis. With respect to fixed maturity securities involving securitized financial assets — primarily asset-backed and commercial mortgage-backed securities in the Company's portfolio — the securitized financial asset securities' underlying collateral cash flows are stress tested to determine if there has been any adverse change in the expected future cash flows. A decline in fair value below the amortized cost basis is not assumed to be other-than-temporary for fixed maturity securities with unrealized losses due to spread widening, market illiquidity or changes in interest rates where there exists a reasonable expectation based on the Company's consideration of all objective information available that the Company will recover the entire amortized cost basis of the security and the Company does not have the intent to sell the security before maturity or a market recovery is realized and it is more likely than not the Company will not be required to sell the security. OTTI loss will be recognized based upon all relevant facts and circumstances for each investment, as appropriate. Additional considerations for certain types of securities include the following: Corporate Fixed Maturity Securities Judgments regarding whether a corporate fixed maturity security is other-than-temporarily impaired include analyzing the issuer's financial condition and whether there has been a decline in the issuer's ability to service the specific security. The analysis of the security issuer is based on asset coverage, cash flow multiples or other industry standards. Several factors assessed include, but are not limited to, credit quality ratings, cash flow sustainability, liquidity, financial strength, industry and market position. Sources of information include, but are not limited to, management projections, independent consultants, external analysts' research, peer analysis and the Company's internal analysis. If the Company has concerns regarding the viability of the issuer or its ability to service the specific security after this assessment, a cash flow analysis is prepared to determine if the present value of future cash flows has declined below the amortized cost basis of the fixed maturity security. This analysis to determine an estimate of ultimate recovery value is combined with the estimated timing to recovery and any other applicable cash flows that are expected. If a cash flow analysis estimate is not feasible, then the market's view of cash flows implied by the period end fair value, market discount rates and effective yield are the primary factors used to estimate an ultimate recovery value. Mortgage-Backed Securities Not Issued By the U.S. Government or Federally Sponsored Agencies The Company uses an estimate of future cash flows expected to be collected to evaluate its mortgage-backed securities for OTTI. The determination of cash flow estimates is inherently subjective and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable assumptions and forecasts, are considered when developing the estimate of future cash flows expected to be collected. Information includes, but is not limited to, debt-servicing, missed refinancing opportunities and geography. Loan level characteristics such as issuer, FICO score, payment terms, level of documentation, property or residency type, and economic outlook are also utilized in financial models, along with historical performance, to estimate or measure the loan's propensity to default. Additionally, financial models take into account loan age, lease rollovers, rent volatilities, vacancy rates and exposure to refinancing as additional drivers of default. For transactions where loan level data is not available, financial models use a proxy that is based on the collateral characteristics. Loss severity is a function of multiple factors including, but not limited to, the unpaid balance, interest rate, mortgage insurance ratios, assessed property value at origination, change in property valuation and loan-to-value ratio at origination. Prepayment speeds, both actual and estimated, cost of capital rates and debt service ratios are also considered. The cash flows generated by the collateral securing these securities are then estimated with these default, loss severity and prepayment assumptions. These collateral cash flows are then utilized, along with consideration for the issuer's position in the overall structure, to estimate the future cash flows associated with the residential or commercial mortgage-backed security held by the Company. Municipal Bonds The Company's municipal bond portfolio consists primarily of special revenue bonds, which present unique considerations in evaluating OTTI, but also includes general obligation bonds. The Company evaluates special revenue bonds for OTTI based on guarantees associated with the repayment from revenues generated by the specified revenue-generating activity associated with the purpose of the bonds. Judgments regarding whether a municipal bond is other-than-temporarily impaired include analyzing the issuer's financial condition and whether there has been a decline in the overall financial condition of the issuer or its ability to service the specific security. Security credit ratings are reviewed with emphasis on the economy, finances, debt and management of the municipal issuer. Certain securities may be guaranteed by the mono-line credit insurers or other forms of guarantee. While not relied upon in the initial security purchase decision, insurance benefits are considered in the assessments for OTTI, including the credit-worthiness of the guarantor. Municipalities possess unique powers, along with a special legal standing and protections, that enable them to act quickly to restore budgetary balance and fiscal integrity. These powers include the sovereign power to tax, access to one-time revenue sources, capacity to issue or restructure debt, and ability to shift spending to other authorities. State governments often provide secondary support to local governments in times of financial stress and the federal government has provided assistance to state governments during recessions. If the Company has concerns regarding the viability of the municipal issuer or its ability to service the specific security after this analysis, a cash flow analysis is prepared to determine a present value and whether it has declined below the amortized cost basis of the security. If a cash flow analysis is not feasible, then the market's view of the period end fair value, market discount rates and effective yield are the primary factors used to estimate the present value. Credit Losses The Company estimates the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost basis and the present value of the expected future cash flows of the security. The present value is determined using the best estimate of cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate of cash flows vary depending on the type of security. Corporate fixed maturity security and municipal bond cash flow estimates are derived from scenario-based outcomes of expected restructurings or the disposition of assets using specific facts and other circumstances, including timing, security interests and loss severity and when not reasonably estimable, such securities are impaired to fair value as management's best estimate of the present value of future cash flows. The cash flow estimates for mortgage-backed and other structured securities are based on security specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds, and structural support, including subordination and guarantees. Deferred Policy Acquisition Costs The Company's DAC by reporting segment was as follows: ($ in thousands) December 31, 2018 2017 Retirement (annuity) $ 209,231 $ 174,661 Life 59,478 53,974 Property and Casualty 30,033 29,191 Total $ 298,742 $ 257,826 DAC consists of commissions, policy issuance and other costs which are incremental and directly related to the successful acquisition of new or renewal business, which are deferred and amortized on a basis consistent with the type of insurance coverage. For all investment (annuity) contracts, DAC is amortized over 20 years in proportion to estimated gross profits. DAC is amortized in proportion to estimated gross profits over 20 years for certain life insurance products with account values and over 30 years for indexed universal life (IUL) contracts. For other individual life contracts, DAC is amortized in proportion to anticipated premiums over the terms of the insurance policies ( 10 , 15 , 20 , 30 years). For property and casualty policies, DAC is amortized over the terms of the insurance policies ( 6 or 12 months). The Company periodically reviews the assumptions and estimates used in DAC and also periodically reviews its estimations of gross profits, a process sometimes referred to as "unlocking". The most significant assumptions that are involved in the estimation of annuity gross profits include interest rate spreads, future financial market performance, business surrender/lapse rates, expenses and the impact of net investment gains (losses) on fixed maturity and equity securities. For the variable deposit portion of Retirement, the Company amortizes DAC utilizing a future financial market performance assumption of a 8% reversion to the mean approach with a 200 basis point corridor around the mean during the reversion period, representing a cap and a floor on the Company's long-term assumption. The Company's practice with regard to future financial market performance assumes that long-term appreciation in the financial markets is not changed by short-term market fluctuations, but is only changed when sustained deviations are experienced. The Company monitors these fluctuations and only changes the assumption when long-term expectations change. The most significant assumptions that are involved in the estimation of life insurance gross profits include interest rates expected to be received on investments, business persistency, and mortality. Conversions from term to permanent insurance cause an immediate write down of the associated DAC. The impact on amortization due to assumption changes has an immaterial impact on the results of operations. In the event actual experience differs significantly from assumptions or assumptions are significantly revised, the Company may be required to recognize a material charge or credit to current period amortization expense for the period in which the adjustment is made. The Company recognized the following adjustments to amortization expense as a result of evaluating actual experience and prospective assumptions, the impact of unlocking: ($ in thousands) Year Ended December 31, 2018 2017 2016 Increase (decrease) to DAC amortization expense: Retirement $ 3,948 $ 1,081 $ (313 ) Life 283 (200 ) (394 ) Total $ 4,231 $ 881 $ (707 ) DAC for investment contracts and life insurance products with account values are adjusted for the impact on estimated future gross profits as if net unrealized investment gains (losses) on securities had been realized at the reporting date. This adjustment reduced DAC by $17,862 thousand and $57,995 thousand at December 31, 2018 and 2017 , respectively. The after tax impact of this adjustment is included in AOCI (net unrealized investment gains (losses) on securities) within shareholders' equity. DAC is reviewed for recoverability from future income, including net investment income, and costs which are deemed unrecoverable are expensed in the period in which the determination is made. No such costs were deemed unrecoverable during the years ended December 31, 2018 , 2017 and 2016 . Goodwill When the Company was acquired in 1989, intangible assets were recognized as goodwill in the application of purchase accounting. In addition, goodwill was recognized in 1994 related to the purchase of Horace Mann Property & Casualty Insurance Company. Goodwill represents the excess of the amounts paid to acquire a business over the fair value of its net assets at the date of acquisition. Goodwill is not amortized, but is tested for impairment at the reporting unit level at least annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. A reporting unit is defined as an operating segment or a business unit one level below an operating segment, if separate financial information is prepared and regularly reviewed by management at that level. The Company's reporting units, for which goodwill has been allocated, are equivalent to the Company's operating segments. The allocation of goodwill by reporting unit is as follows: ($ in thousands) Retirement $ 28,025 Life 9,911 Property and Casualty 9,460 Total $ 47,396 The goodwill impairment test, as defined in GAAP, allows an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity follows a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, the second step of the impairment test is performed for purposes of confirming and measuring the impairment. In the second step, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit to determine an implied goodwill value. If the carrying amount of the reporting unit goodwill exceeds the implied goodwill value, an impairment loss would be recognized in an amount equal to that excess. Any amount of goodwill determined to be impaired will be recognized as an expense in the period in which the impairment determination is made. The Company completed its annual goodwill assessment for the individual reporting units as of October 1, 2018 and did not utilize the option to perform an initial assessment of qualitative factors. The first step of the Company's analysis indicated that fair value exceeded the carrying amount for all reporting units. The process of evaluating goodwill for impairment required management to make multiple judgments and assumptions to determine the fair value of each reporting unit, including discounted cash flow calculations, the level of the Company's own share price and assumptions that market participants would make in valuing each reporting unit. Fair value estimates were based primarily on an in-depth analysis of historical experience, projected future cash flows and relevant discount rates, which considered market participant inputs and the relative risk associated with the projected cash flows. Other assumptions included levels of economic capital, future business growth, earnings projections and assets under management for each reporting unit. Estimates of fair value are subject to assumptions that are sensitive to change and represent the Company's reasonable expectation regarding future developments. The Company also considered other valuation techniques such as peer company price-to-earnings and price-to-book multiples. As part of the Company's October 1, 2018 goodwill analysis, the Company compared the fair value of the aggregated reporting units to the market capitalization of the Company. The difference between the aggregated fair value of the reporting units and the market capitalization of the Company was attributed to several factors, most notably market sentiment, trading volume and transaction premium. The amount of the transaction premium was determined to be reasonable based on insurance industry and Company-specific facts and circumstances. There were no other events or material changes in circumstances during 2018 that indicated that a material change in the fair value of the Company's reporting units had occurred. During each year from 2016 through 2018, the Company completed the required annual testing; no impairment charges were necessary as a result of such assessments. The assessment of goodwill recoverability requires significant judgment and is subject to inherent uncertainty. The use of different assumptions, within a reasonable range, could cause the fair value to be below the carrying amount. Subsequent goodwill assessments could result in impairment, particularly for any reporting unit with at-risk goodwill, due to the impact of a volatile financial market on earnings, discount rate assumptions, liquidity and market capitalization. Property and Equipment Property and equipment are carried at cost less accumulated depreciation, which is calculated using the straight-line method based on the estimated useful lives of the assets. The estimated life for real estate is identified by specific property and ranges from 20 to 45 years. The estimated useful lives of leasehold improvements and other property and equipment, including capitalized software, generally range from 3 to 10 years. The following amounts are included in Other assets in the Consolidated Balance Sheets: ($ in thousands) December 31, 2018 2017 Property and equipment $ 142,243 $ 133,803 Less: accumulated depreciation 101,267 94,862 Total $ 40,976 $ 38,941 Separate Account (Variable Annuity) Assets and Liabilities Separate Account assets represent variable annuity contractholder funds invested in various mutual funds. Separate Account assets are recorded at fair value primarily based on market quotations of the underlying securities. Separate Account liabilities are equal to the estimated fair value of Separate Account assets. The investment income, gains and losses of these accounts accrue directly to the contractholders and are not included in the results of operations of the Company. The activity of the Separate Accounts is not reflected in the Consolidated Statements of Operations except for (1) contract charges earned, (2) the activity related to contract guarantees, which are benefits on existing variable annuity contracts, and (3) the impact of financial market performance on DAC amortization expense. The Company's contract charges earned include fees charged to the Separate Accounts, including mortality charges, risk charges, policy administration fees, investment management fees and surrender charges. Investment Contract and Life Policy Reserves This table summarizes the Company's investment contract and life policy reserves. ($ in thousands) December 31, 2018 2017 Investment contract reserves $ 4,555,856 $ 4,452,972 Life policy reserves 1,155,337 1,120,763 Total $ 5,711,193 $ 5,573,735 Liabilities for future benefits on life and annuity policies are established in amounts adequate to meet the estimated future obligations on policies in force. Liabilities for future policy benefits on certain life insurance policies are computed using the net level premium method including assumptions as to investment yields, mortality, persistency, expenses and other assumptions based on the Company's experience, including a provision for adverse deviation. These assumptions are established at the time the policy is issued and are intended to estimate the experience for the period the policy benefits are payable. If experience is less favorable than the assumptions, additional liabilities may be established, resulting in recognition of a loss for that period. At December 31, 2018 , reserve investment yield assumptions ranged from 3.5% to 8.0% . Liabilities for future benefits on annuity contracts and certain long-duration life insurance contracts are carried at accumulated policyholder values without reduction for potential surrender or withdrawal charges. The liability also includes provisions for the unearned portion of certain policy charges. A guaranteed minimum death benefit (GMDB) generally provides an additional benefit if the contractholder dies and the variable annuity contract value is less than a contractually defined amount. The Company has estimated and recorded a GMDB reserve on variable annuity contracts in accordance with GAAP. Contractually defined amounts vary from contract to contract based on the date the contract was entered into as well as the GMDB feature elected by the contractholder. The Company regularly monitors the GMDB reserve considering fluctuations in financial markets. The Company has a relatively low exposure to GMDB risk as shown below. ($ in thousands) December 31, 2018 2017 GMDB reserve $ 258 $ 152 Aggregate in-the-money death benefits under the GMDB provision 48,083 28,345 Variable annuity contract value distribution based on GMDB feature: No guarantee 30 % 29 % Return of premium guarantee 65 % 65 % Guarantee of premium roll-up at an annual rate of 3% or 5% 5 % 6 % Total 100 % 100 % Reserves for Fixed Indexed Annuities and Indexed Universal Life Policies The Company offers fixed indexed annuity (FIA) products with interest crediting strategies linked to the Standard & Poor's (S&P) 500 Index and the Dow Jones Industrial Average (DJIA). The Company purchases call options on the applicable indices as an investment to provide the income needed to fund the annual index credits on the indexed products. These products are deferred fixed annuities with a guaranteed minimum interest rate plus a contingent return based on equity market performance and are considered hybrid financial instruments under GAAP. The Company elected to not use hedge accounting for derivative transactions related to the FIA products. As a result, the Company accounts for the purchased call options and the embedded derivative related to the provision of a contingent return at fair value, with changes in fair value recognized as Net investment gains (losses) in the Consolidated Statements of Operations. The embedded derivative is bifurcated from the host contract and included in Other policyholder funds in the Consolidated Balance Sheets. The host contract is accounted for as a debt instrument in accordance with GAAP and is included in Investment contract and life policy reserves in the Consolidated Balance Sheets with any discount to the minimum account value being accreted using the effective yield method. In the Consolidated Statements of Operations, accreted interest for FIA products and benefit claims on these products incurred during the reporting period are included in Benefits, claims and settlement expenses. The Company offers indexed universal life (IUL) products as part of its product portfolio with interest crediting strategies linked to the S&P 500 Index and the DJIA as well as a fixed option. The Company purchases call options monthly to economically hedge the potential liabilities arising in IUL accounts. The Company elected to not use hedge accounting for derivative transactions related to the IUL products. As a result, the Company records the purchased call options and the embedded derivative related to the provision of a contingent return at fair value, with changes in fair value reported in Net investment gains (losses) in the Consolidated Statements of Operations. IUL policies with a balance in one or more indexed accounts are considered to have an embedded derivative. The benefit reserve for the host contract is measured using the retrospective deposit method, which for Horace Mann's IUL product is equal to the account balance. The embedded derivative is bifurcated from the host contract, carried at fair value, and included in Investment contract and life policy reserves in the Consolidated Balance Sheets. See Note 3 for more information regarding the determination of fair value for the FIA and IUL embedded derivatives and purchased call options. Unpaid Claims and Claim Expenses Liabilities for Property and Casualty unpaid claims and claim expenses include provisions for payments to be made on reported claims, claims incurred but not yet reported (IBNR) and associated settlement expenses. All of the Company's reserves for Property and Casualty unpaid claims and claim expenses are carried at the full value of estimated liabilities and are not discounted for interest expected to be earned on reserves. Estimated amounts of salvage and subrogation on unpaid Property and Casualty claims are deducted from the liability for unpaid claims. Due to the nature of the Company's personal lines business, the Company has no exposure to losses related to claims for toxic waste cleanup, other environmental remediation or as |
Investments
Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Net Investment Income The components of net investment income for the following periods were: ($ in thousands) Year Ended December 31, 2018 2017 2016 Fixed maturity securities $ 353,303 $ 354,290 $ 342,773 Equity securities 6,017 6,411 4,703 Limited partnership interests 15,406 12,555 13,609 Short-term and other investments 11,981 10,214 9,668 Total investment income 386,707 383,470 370,753 Investment expenses (10,200 ) (9,840 ) (9,567 ) Net investment income $ 376,507 $ 373,630 $ 361,186 Net Investment Gains (Losses) Net investment gains (losses) for the following periods were: ($ in thousands) Year Ended December 31, 2018 2017 2016 Fixed maturity securities $ (5,713 ) $ (8,867 ) $ 5,784 Equity securities (10,649 ) 4,003 (608 ) Short-term investments and other 3,819 1,458 (1,053 ) Net investment gains (losses) $ (12,543 ) $ (3,406 ) $ 4,123 The Company, from time to time, sells invested assets subsequent to the reporting date that were considered temporarily impaired at the reporting date. Such sales are due to issuer specific events occurring subsequent to the reporting date that result in a change in the Company's intent or ability to hold an invested asset. The types of events that may result in a sale include significant changes in the economic facts and circumstances related to the invested asset, significant unforeseen changes in liquidity needs, or changes in the Company's investment strategy. Fixed Maturity and Equity Securities The Company's investment portfolio is comprised primarily of fixed maturity securities and also includes equity securities. The amortized cost or cost, net unrealized investment gains (losses), fair values and OTTI included in AOCI of all fixed maturity and equity securities in the portfolio were as follows: ($ in thousands) Amortized Cost/Cost Unrealized Gains Unrealized Losses Fair Value OTTI in AOCI December 31, 2018 (1) Fixed maturity securities U.S. Government and federally sponsored agency obligations (2) : Mortgage-backed securities $ 778,038 $ 22,724 $ 13,321 $ 787,441 $ — Other, including U.S. Treasury securities 835,096 16,127 17,681 833,542 — Municipal bonds 1,884,313 133,150 13,494 2,003,969 — Foreign government bonds 83,343 2,321 760 84,904 — Corporate bonds 2,054,105 64,296 38,891 2,079,510 — Other mortgage-backed securities 1,739,016 10,467 23,531 1,725,952 — Totals $ 7,373,911 $ 249,085 $ 107,678 $ 7,515,318 $ — December 31, 2017 Fixed maturity securities U.S. Government and federally sponsored agency obligations (2) : Mortgage-backed securities $ 669,297 $ 30,460 $ 3,032 $ 696,725 $ — Other, including U.S. Treasury securities 714,613 26,311 5,516 735,408 — Municipal bonds 1,711,581 184,107 2,435 1,893,253 — Foreign government bonds 96,780 5,958 — 102,738 — Corporate bonds 2,409,426 173,862 4,334 2,578,954 — Other mortgage-backed securities 1,701,253 22,935 7,191 1,716,997 — Totals $ 7,302,950 $ 443,633 $ 22,508 $ 7,724,075 $ — Equity securities (3) $ 116,320 $ 19,425 $ 279 $ 135,466 $ — ____________________ (1) Effective January 1, 2018, with the adoption of new accounting guidance for recognition and measurement of financial instruments, available for sale equity securities were reclassified to equity securities at fair value and are excluded from the table above as of December 31, 2018. (2) Fair value includes securities issued by Federal National Mortgage Association (FNMA) of $441,308 thousand and $361,955 thousand ; Federal Home Loan Mortgage Corporation (FHLMC) of $417,308 thousand and $400,001 thousand ; and Government National Mortgage Association (GNMA) of $96,466 thousand and $104,168 thousand as of December 31, 2018 and 2017 , respectively. (3) Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds. The following table presents the fair value and gross unrealized losses of fixed maturity and equity securities in an unrealized loss position at December 31, 2018 and 2017 , respectively. The Company views the decrease in fair value of all of the securities with unrealized losses at December 31, 2018 — which was driven largely by changes in interest rates, spread widening, financial market illiquidity and/or market volatility from the date of acquisition — as temporary. For fixed maturity securities, management does not have the intent to sell the securities and it is not more likely than not the Company will be required to sell the securities before the anticipated recovery of their amortized cost bases, and management expects to recover the entire amortized cost bases of the fixed maturity securities. Therefore, no impairment of these securities was recognized at December 31, 2018 . ($ in thousands) 12 months or less More than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses December 31, 2018 (1) Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 193,447 $ 5,026 $ 157,295 $ 8,295 $ 350,742 $ 13,321 Other 263,497 6,746 246,213 10,935 509,710 17,681 Municipal bonds 291,869 7,603 95,297 5,891 387,166 13,494 Foreign government bonds 16,250 760 — — 16,250 760 Corporate bonds 818,519 27,429 99,171 11,462 917,690 38,891 Other mortgage-backed securities 913,858 16,076 291,442 7,455 1,205,300 23,531 Total 2,497,440 63,640 889,418 44,038 3,386,858 107,678 Number of positions with a gross unrealized loss 1,052 359 1,411 Fair value as a percentage of total fixed maturities and equity securities fair value 32.7 % 11.7 % 44.4 % December 31, 2017 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 134,032 $ 1,053 $ 40,606 $ 1,979 $ 174,638 $ 3,032 Other 168,634 1,849 122,753 3,667 291,387 5,516 Municipal bonds 29,437 100 79,140 2,335 108,577 2,435 Foreign government bonds — — — — — — Corporate bonds 115,113 2,701 36,081 1,633 151,194 4,334 Other mortgage-backed securities 457,166 2,791 168,972 4,400 626,138 7,191 Total fixed maturity securities 904,382 8,494 447,552 14,014 1,351,934 22,508 Equity securities (2) 6,027 249 1,277 30 7,304 279 Combined totals $ 910,409 $ 8,743 $ 448,829 $ 14,044 $ 1,359,238 $ 22,787 Number of positions with a gross unrealized loss 354 158 512 Fair value as a percentage of total fixed maturities and equity securities fair value 11.6 % 5.7 % 17.3 % ____________________ (1) Effective January 1, 2018, with the adoption of new accounting guidance for recognition and measurement of financial instruments, available for sale equity securities were reclassified to equity securities at fair value and are excluded from the table above as of December 31, 2018. (2) Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds. Fixed maturity securities with an investment grade rating represented 95.5% of the gross unrealized losses as of December 31, 2018 . With respect to fixed maturity securities involving securitized financial assets, the underlying collateral cash flows were stress tested to determine there was no adverse change in the present value of cash flows below the amortized cost basis. Limited Partnership Interests As of December 31, 2018 and 2017, the carrying value of equity method limited partnerships totaled $328,516 thousand and $247,266 thousand , respectively. Principal factors influencing carrying value appreciation or decline include operating performance, comparable public company earnings multiples, capitalization rates and the economic environment. The Company recognizes an impairment loss for equity method limited partnerships when evidence demonstrates that the loss is other than temporary. Evidence of a loss in value that is other than temporary may include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment. Credit Losses The following table summarizes the cumulative amounts related to the Company's credit loss component of OTTI losses on fixed maturity securities held as of December 31, 2018 and 2017 that the Company did not intend to sell as of those dates, and it was not more likely than not that the Company would be required to sell the securities before the anticipated recovery of the amortized cost bases, for which the non-credit portions of OTTI losses were recognized in OCI: ($ in thousands) Year Ended December 31, 2018 2017 Cumulative credit loss (1) Beginning of period $ 3,825 $ 13,703 New credit losses — — Increases to previously recognized credit losses 246 1,995 Losses related to securities sold or paid down during the period (2,542 ) (11,873 ) End of period $ 1,529 $ 3,825 ____________________ (1) The cumulative credit loss amounts exclude OTTI losses on securities held as of the periods indicated that the Company intended to sell or it was more likely than not that the Company would be required to sell the security before the recovery of the amortized cost basis. Maturities of Fixed Maturity Securities The following table presents the distribution of the Company's fixed maturity securities portfolio by estimated expected maturity. Estimated expected maturities differ from contractual maturities, reflecting assumptions regarding borrowers' utilization of the right to call or prepay obligations with or without call or prepayment penalties. For structured securities, including mortgage-backed securities and other asset-backed securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments. ($ in thousands) December 31, 2018 Amortized Cost Fair Value Percent of Total Fair Value Estimated expected maturity: Due in 1 year or less $ 358,797 $ 363,049 4.8 % Due after 1 year through 5 years 1,690,400 1,713,593 22.8 % Due after 5 years through 10 years 2,453,572 2,465,337 32.8 % Due after 10 years through 20 years 1,931,599 1,991,726 26.5 % Due after 20 years 939,543 981,613 13.1 % Total $ 7,373,911 $ 7,515,318 100.0 % Average option-adjusted duration, in years 5.9 Sales of Fixed Maturity and Equity Securities Proceeds received from sales of fixed maturity and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each year were: ($ in thousands) Year Ended December 31, 2018 2017 2016 Fixed maturity securities Proceeds received $ 625,527 $ 500,760 $ 429,251 Gross gains realized 10,536 13,570 15,915 Gross losses realized (14,932 ) (11,842 ) (4,163 ) Equity securities Proceeds received $ 25,498 $ 50,113 $ 21,210 Gross gains realized 8,592 7,753 2,869 Gross losses realized (917 ) (1,972 ) (935 ) Net Investment Gains (Losses) The following table reconciles the net investment gains (losses) by transaction type: ($ in thousands) Year Ended December 31, 2018 2017 2016 Impairment write-downs $ — $ (1,778 ) $ (6,268 ) Change in intent write-downs (1,530 ) (10,842 ) (4,843 ) Net OTTI losses recognized in earnings (1,530 ) (12,620 ) (11,111 ) Sales and other, net 3,491 7,756 16,286 Change in fair value - equity securities (1) (18,323 ) — — Change in fair value and gains (losses) realized on settlements - derivative instruments 3,819 1,458 (1,052 ) Net investment gains (losses) $ (12,543 ) $ (3,406 ) $ 4,123 ____________________ (1) Effective January 1, 2018, with the adoption of new accounting guidance for recognition and measurement of financial instruments, equity securities are reported at fair value with changes in fair value recognized in Net investment gains (losses) and are no longer included in impairment write-downs or change in intent write-downs. Net Unrealized Investment Gains (Losses) on Securities Net unrealized investment gains (losses) on securities are computed as the difference between fair value and amortized cost for fixed maturity securities or cost for equity securities. The following table reconciles the net unrealized investment gains (losses) on securities, net of tax, included in AOCI, before the impact on DAC: ($ in thousands) Year Ended December 31, 2018 2017 2016 Net unrealized investment gains (losses) on securities, net of tax Beginning of period $ 286,176 $ 202,941 $ 201,363 Change in unrealized investment gains (losses) on securities (172,350 ) 80,073 4,943 Reclassification of net investment (gains) losses on securities to net income 12,927 3,162 (3,365 ) Cumulative effect of change in accounting principle (1) (15,041 ) — — End of period $ 111,712 $ 286,176 $ 202,941 ________________ (1) Effective January 1, 2018, with the adoption of new accounting guidance for recognition and measurement of financial instruments, available for sale equity securities were reclassified to equity securities at fair value and the related net unrealized gains were reclassified from AOCI to Retained earnings. Investment in Entities Exceeding 10% of Shareholders' Equity At December 31, 2018 and 2017 , there were no investments which exceeded 10% of total shareholders' equity in entities other than obligations of the U.S. Government and federally sponsored government agencies and authorities. Offsetting of Assets and Liabilities The Company's derivative instruments (call options) are subject to enforceable master netting arrangements. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge cash collateral in the event minimum thresholds have been reached. The following table presents the instruments that were subject to a master netting arrangement for the Company. ($ in thousands) Gross Amounts Offset in the Net Amounts of Assets/ Liabilities Presented in the Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts Consolidated Balance Sheets Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount December 31, 2018 Asset derivatives Free-standing derivatives $ 2,647 $ — $ 2,647 $ — $ 1,868 $ 779 December 31, 2017 Asset derivatives Free-standing derivatives 15,550 — 15,550 — 15,584 (34 ) Deposits At December 31, 2018 and 2017 , fixed maturity securities with a fair value of $17,695 thousand and $17,985 thousand , respectively, were on deposit with governmental agencies as required by law in various states in which the insurance subsidiaries of HMEC conduct business. In addition, at December 31, 2018 and 2017 , fixed maturity securities with a fair value of $740,016 thousand and $686,790 thousand , respectively, were on deposit with FHLB as collateral for amounts subject to funding agreements, advances and borrowings which were equal to $675,000 thousand and $625,000 thousand |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | The Company is required under GAAP to disclose estimated fair values for certain financial and nonfinancial assets and liabilities. Fair values of the Company's insurance contracts other than annuity contracts (which are investment contracts) are not required to be disclosed. However, the estimated fair values of liabilities under all insurance contracts are taken into consideration in the Company's overall management of interest rate risk through the matching of investment maturities with amounts due under insurance contracts. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between knowledgeable, unrelated and willing market participants on the measurement date. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company categorizes its financial and nonfinancial assets and liabilities into a three-level hierarchy based on the priority of the inputs to the valuation technique. The three levels of inputs that may be used to measure fair value are: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include fixed maturity and equity securities (both common stock and preferred stock) that are traded in an active exchange market, as well as U.S. Treasury securities. Level 2 Unadjusted observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for the assets or liabilities. Level 2 assets and liabilities include fixed maturity securities (1) with quoted prices that are traded less frequently than exchange-traded instruments or (2) values based on discounted cash flows with observable inputs. This category generally includes certain U.S. Government and agency mortgage-backed securities, non-agency structured securities, corporate fixed maturity securities, preferred stocks, derivative instruments and embedded derivatives. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, certain discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation and for which the significant inputs are unobservable. This category generally includes certain private debt and equity investments, as well as embedded derivatives. When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. As a result, a Level 3 fair value measurement may include inputs that are observable (Level 1 or Level 2) and unobservable (Level 3). Net transfers into or out of each of the three levels are reported as having occurred at the end of the reporting period in which the transfers were determined. The following discussion describes the valuation methodologies used for financial assets and financial liabilities measured at fair value. The techniques utilized in estimating the fair values are affected by the assumptions used, including discount rates and estimates of the amount and timing of expected future cash flows. The use of different methodologies, assumptions and inputs may have a material effect on the estimated fair values of the Company's investment holdings. Care is exercised in deriving conclusions about the Company's business, its value or financial position based on the fair value information of financial assets and liabilities presented below. Fair value estimates are made at a specific point in time, based on available market information and judgments about the financial asset or financial liability, including estimates of both the timing and amount of expected future cash flows and the credit standing of the issuer. In some cases, fair value estimates cannot be substantiated by comparison to independent markets. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial asset or financial liability. The disclosed fair values do not reflect any premium or discount that could result from offering for sale at one time an entire holding of a particular financial asset or financial liability. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2 or from Level 2 to Level 3. Potential taxes and other expenses that would be incurred in an actual sale or settlement are not reflected in amounts disclosed. Investments The Company utilizes its investment managers and its custodian bank to obtain fair value prices from independent third-party valuation service providers, broker-dealer quotes, and model prices. Each month, the Company obtains fair value prices from its investment managers and custodian bank, each of which use a variety of independent, nationally recognized pricing sources to determine market valuations for fixed maturity securities. Differences in prices between the sources that the Company considers significant are researched and the Company utilizes the price that it considers most representative of an exit price. Typical inputs used by these pricing sources include, but are not limited to, reported trades, benchmark yield curves, benchmarking of like securities, rating designations, sector groupings, issuer spreads, bids, offers, and/or estimated cash flows and prepayment speeds. The Company's fixed maturity securities portfolio is primarily publicly traded, which allows for a high percentage of the portfolio to be priced through pricing services. When the pricing sources cannot provide fair value determinations, the investment managers and custodian bank obtain non-binding price quotes from broker-dealers. And for those securities where the investment manager cannot obtain broker-dealer quotes, they will model the security, generally using anticipated cash flows of the underlying collateral. Broker-dealers' valuation methodologies as well as investment managers’ modeling methodologies are sometimes matrix-based, using indicative evaluation measures and adjustments for specific security characteristics and market sentiment. The market inputs utilized in the evaluation measures and adjustments include: benchmark yield curves, reported trades, broker-dealer quotes, ratings and corresponding issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data including anticipated cash flows, and industry and economic events. The extent of the use of each market input depends on the market sector and the market conditions. Depending on the security, the priority of the use of inputs may change or some market inputs may not be relevant. For some securities, additional inputs may be necessary. The Company analyzes price and market valuations received to verify reasonableness, to understand the key assumptions used and their sources, to conclude the prices obtained are appropriate, and to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Based on this evaluation and investment class analysis, each security is classified into Level 1, 2, or 3. The Company gains assurance that its fixed maturity securities portfolio is appropriately valued through the execution of various processes and controls designed to ensure the overall reasonableness and consistent application of valuation methodologies, including inputs and assumptions, and compliance with accounting standards. The Company’s processes and controls are designed to ensure (1) the valuation methodologies are appropriate and consistently applied, (2) the inputs and assumptions are reasonable and consistent with the objective of determining fair value, and (3) the fair values are accurately recorded. For example, on a continuing basis, the Company assesses the reasonableness of individual fair values that have stale security prices or that exceed certain thresholds as compared to previous fair values received from valuation service providers. The Company performs procedures to understand and assess the methodologies, processes and controls of valuation service providers. In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or broker-dealers to other third party valuation sources for selected securities. The Company's fixed maturity securities portfolio is primarily publicly traded, which allows for a high percentage of the portfolio to be priced through pricing services. Approximately 92.3% and 90.7% of the portfolio, based on fair value, was priced through pricing services or index priced as of December 31, 2018 and 2017 , respectively. The remainder of the portfolio was priced by broker-dealers or pricing models. When non-binding broker-dealer quotes can be corroborated by comparison to other vendor quotes, pricing models or analyses, the securities are generally classified as Level 2, otherwise they are classified as Level 3. There were no significant changes to the valuation process during 2018 . When a public quotation is not available, equity securities are valued by using non-binding broker-dealer quotes or through the use of pricing models or analyses that are based on market information regarding interest rates, credit spreads and liquidity. The underlying source data for calculating the matrix of credit spreads relative to the U.S. Treasury curve are nationally recognized indices. In addition, credit rating (or credit quality equivalent information) of securities is also factored into a pricing matrix. These inputs are based on assumptions deemed appropriate given the circumstances and are believed to be consistent with what other market participants would use when pricing such securities. There were no significant changes to the valuation process in 2018 . At December 31, 2018 , all of the publicly traded equity securities were priced from observable market quotations. Fair values of equity securities have been determined by the Company from observable market quotations, when available. Policy loans and mortgage loans as well as certain alternative investments which are accounted for using the equity method of accounting are excluded from the fair value hierarchy. In summary, the following investments are carried at fair value: • Fixed maturity securities, as described above. • Equity securities, as described above. • Short-term fixed maturity securities — Because of the nature of these assets, carrying amounts generally approximate fair values. • Derivative instruments, all call options — Fair values are based on the amount of cash expected to be received to settle each derivative instrument on the reporting date. These amounts are obtained from each of the counterparties using industry accepted valuation models and observable inputs. Significant inputs include contractual terms, underlying index prices, market volatilities, interest rates and dividend yields. • FHLB membership and activity stocks — Fair value is based on redemption value, which is equal to par value. Financial Instruments Measured and Carried at Fair Value The following table presents the Company's fair value hierarchy for those assets and liabilities measured and carried at fair value on a recurring basis. At December 31, 2018 , Level 3 investments comprised approximately 3.0% of the Company's total investment portfolio at fair value. ($ in thousands) Carrying Fair Fair Value Measurements at Reporting Date Using Amount Value Level 1 Level 2 Level 3 December 31, 2018 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 787,441 $ 787,441 $ — $ 784,224 $ 3,217 Other, including U.S. Treasury securities 833,542 833,542 13,291 820,251 — Municipal bonds 2,003,969 2,003,969 — 1,956,438 47,531 Foreign government bonds 84,904 84,904 — 84,904 — Corporate bonds 2,079,510 2,079,510 12,281 1,986,487 80,742 Other mortgage-backed securities 1,725,952 1,725,952 — 1,608,958 116,994 Total fixed maturity securities 7,515,318 7,515,318 25,572 7,241,262 248,484 Equity securities 111,750 111,750 64,330 47,415 5 Short-term investments 122,222 122,222 117,296 4,926 — Other investments 16,147 16,147 — 16,147 — Totals $ 7,765,437 $ 7,765,437 $ 207,198 $ 7,309,750 $ 248,489 Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 248 $ 248 $ — $ 248 $ — Other policyholder funds, embedded derivatives $ 78,700 $ 78,700 $ — $ — $ 78,700 December 31, 2017 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 696,725 $ 696,725 $ — $ 693,375 $ 3,350 Other, including U.S. Treasury securities 735,408 735,408 13,393 722,015 — Municipal bonds 1,893,253 1,893,253 — 1,843,925 49,328 Foreign government bonds 102,738 102,738 — 102,738 — Corporate bonds 2,578,954 2,578,954 14,345 2,491,630 72,979 Other mortgage-backed securities 1,716,997 1,716,997 — 1,612,403 104,594 Total fixed maturity securities 7,724,075 7,724,075 27,738 7,466,086 230,251 Equity securities 135,466 135,466 82,208 53,252 6 Short-term investments 62,593 62,593 62,593 — — Other investments 28,050 28,050 — 28,050 — Totals $ 7,950,184 $ 7,950,184 $ 172,539 $ 7,547,388 $ 230,257 Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 594 $ 594 $ — $ 594 $ — Other policyholder funds, embedded derivatives $ 80,733 $ 80,733 $ — $ — $ 80,733 The Company did not have any transfers between Levels 1 and 2 during 2018 . The Company transferred one equity security between Levels 2 and 1 during 2017 . The following tables present reconciliations for the periods indicated for all Level 3 assets and liabilities measured at fair value on a recurring basis. ($ in thousands) Financial Assets Financial Liabilities (1) Municipal Bonds Corporate Bonds Other Mortgage- Backed Securities (2) Total Fixed Maturity Securities Equity Securities Short-term Investments Total Beginning balance, January 1, 2018 $ 49,328 $ 72,979 $ 107,944 $ 230,251 $ 6 $ — $ 230,257 $ 80,733 Transfers into Level 3 (3) — 40,488 50,771 91,259 — — 91,259 — Transfers out of Level 3 (3) — (11,279 ) (5,200 ) (16,479 ) — — (16,479 ) — Total gains or losses Net investment gains (losses) included in net income related to financial assets — (487 ) — (487 ) 3 — (484 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — — (7,518 ) Net unrealized investment gains (losses) included in OCI (1,195 ) (2,840 ) (5,570 ) (9,605 ) — — (9,605 ) — Purchases — — — — — — — — Issuances — — — — — — — 11,183 Sales — (6,135 ) (187 ) (6,322 ) (4 ) — (6,326 ) — Settlements — — — — — — — — Paydowns, maturities and distributions (602 ) (11,984 ) (27,547 ) (40,133 ) — — (40,133 ) (5,698 ) Ending balance, December 31, 2018 $ 47,531 $ 80,742 $ 120,211 $ 248,484 $ 5 $ — $ 248,489 $ 78,700 Beginning balance, January 1, 2017 $ 46,497 $ 60,191 $ 104,659 $ 211,347 $ 6 $ 751 $ 212,104 $ 59,393 Transfers into Level 3 (3) 5,214 38,483 43,091 86,788 — — 86,788 — Transfers out of Level 3 (3) (5,557 ) (16,252 ) (6,542 ) (28,351 ) — (751 ) (29,102 ) — Total gains or losses Net investment gains (losses) included in net income related to financial assets — (1 ) (1,832 ) (1,833 ) — — (1,833 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — — 12,942 Net unrealized investment gains (losses) included in OCI 3,977 661 2,075 6,713 — — 6,713 — Purchases — — — — — — — — Issuances — — — — — — — 12,605 Sales — (1,999 ) (9,179 ) (11,178 ) — — (11,178 ) — Settlements — — — — — — — — Paydowns, maturities and distributions (803 ) (8,104 ) (24,328 ) (33,235 ) — — (33,235 ) (4,207 ) Ending balance, December 31, 2017 $ 49,328 $ 72,979 $ 107,944 $ 230,251 $ 6 $ — $ 230,257 $ 80,733 ____________________ (1) Represents embedded derivatives, all related to the Company's FIA products, reported in Other policyholder funds in the Company's Consolidated Balance Sheets. (2) Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other mortgage-backed securities. (3) Transfers into and out of Level 3 during the years ended December 31, 2018 and 2017 were attributable to changes in the availability of observable market information for individual fixed maturity securities and short-term investments. The Company's policy is to recognize transfers into and transfers out of the levels as having occurred at the end of the reporting period in which the transfers were determined. At December 31, 2018 , the Company realized a loss of $484 thousand on Level 3 securities. At December 31, 2017 the Company impaired Level 3 securities for a $1,833 thousand realized loss. For the years ended December 31, 2018 and 2017 , a realized gain of $7,518 thousand and a realized loss of $12,942 thousand , respectively, were included in earnings that were attributable to the changes in the fair value of Level 3 liabilities (embedded derivatives) still held. The valuation techniques and significant unobservable inputs used in the fair value measurement for financial assets and liabilities classified as Level 3 are subject to the control processes as previously described in this Note. Generally, valuation techniques for fixed maturity securities include spread pricing, matrix pricing and discounted cash flow methodologies; include inputs such as quoted prices for identical or similar securities that are less liquid; and are based on lower levels of trading activity than securities classified as Level 2. The valuation techniques and significant unobservable inputs used in the fair value measurement for equity securities classified as Level 3 use similar valuation techniques and significant unobservable inputs as those used for fixed maturity securities. The sensitivity of the estimated fair values to changes in the significant unobservable inputs for fixed maturity and equity securities included in Level 3 generally relates to interest rate spreads, illiquidity premiums and default rates. Significant spread widening in isolation will adversely impact the overall valuation, while significant spread tightening will lead to substantial valuation increases. Significant increases (decreases) in illiquidity premiums in isolation will result in substantially lower (higher) valuations. Significant increases (decreases) in expected default rates in isolation will result in substantially lower (higher) valuations. Financial Instruments Not Carried at Fair Value; Disclosure Required The Company has various other financial assets and financial liabilities used in the normal course of business that are not carried at fair value, but for which fair value disclosure is required. The following table presents the carrying value, fair value and fair value hierarchy of these financial assets and financial liabilities. ($ in thousands) Carrying Fair Fair Value Measurements at Reporting Date Using Amount Value Level 1 Level 2 Level 3 December 31, 2018 Financial Assets Investments Other investments $ 156,725 $ 161,449 $ — $ — $ 161,449 Financial Liabilities Investment contract and life policy reserves, fixed annuity contracts 4,555,849 4,478,338 — — 4,478,338 Investment contract and life policy reserves, account values on life contracts 87,229 90,402 — — 90,402 Other policyholder funds 689,287 689,287 — 626,325 62,962 Long-term debt 297,740 291,938 — 291,938 — December 31, 2017 Financial Assets Investments Other investments $ 154,898 $ 159,575 $ — $ — $ 159,575 Financial Liabilities Investment contract and life policy reserves, fixed annuity contracts 4,452,972 4,366,334 — — 4,366,334 Investment contract and life policy reserves, account values on life contracts 82,911 88,620 — — 88,620 Other policyholder funds 643,528 643,528 — 575,622 67,906 Long-term debt 297,469 311,315 — 311,315 — Other Investments Other investments includes policy loans and mortgage loans. For policy loans, fair value is based on estimates using discounted cash flow analysis and current interest rates being offered for new loans. For mortgage loans, fair value is estimated by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and similar remaining maturities. Investment Contract and Life Policy Reserves The fair values of fixed annuity contract liabilities and policyholder account balances on life contracts are equal to the discounted estimated future cash flows (using the Company's current interest rates for similar products including consideration of minimum guaranteed interest rates). The Company carries these financial liabilities at cost. Also, included in investment contract and life policy reserves are embedded derivatives related to the Company's IUL products. These embedded derivatives are carried at fair value with fair value equal to the fair value of the current call options purchased to hedge the liability. Other Policyholder Funds Other policyholder funds are liabilities related to supplementary contracts without life contingencies and dividend accumulations, as well as balances outstanding under funding agreements with the FHLB and embedded derivatives related to the FIA products. Except for embedded derivatives, each of these components is carried at cost, which management believes is a reasonable estimate of fair value due to the relatively short duration of these items, based on the Company's past experience. The fair value of the embedded derivatives related to FIA products is estimated at each reporting date by (1) projecting policy contract values and minimum guaranteed contract values over the expected lives of the contracts and (2) discounting the excess of the projected contract value amounts at the applicable risk free interest rates adjusted for the Company's nonperformance risk related to those liabilities. The projections of policy contract values are based on the Company's best estimate assumptions for future contract growth and decrements. The assumptions for future contract growth include the expected index credits which are derived from the fair values of the underlying call options purchased to fund such index credits and the expected costs of annual call options that will be purchased in the future to fund index credits beyond the next contract anniversary. Projections of minimum guaranteed contract values include the same best estimate assumptions for contract decrements used to project policy contract values. Long-term Debt |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | The Company offers FIA products, which are deferred fixed annuities that guarantee the return of principal to the contractholder and credit interest based on a percentage of the gain in a specified market index. The Company also offers IUL products which credit interest based on a percentage of the gain in a specified market index. When deposits are received for FIA and IUL contracts, a portion is used to purchase derivatives consisting of call options on the applicable market indices to fund the index credits due to FIA and IUL policyholders. For the Company, substantially all such call options are one-year options purchased to match the funding requirements of the underlying contracts. The call options are carried at fair value with changes in fair value included in Net investment gains (losses), a component of revenues, in the Consolidated Statements of Operations. The change in fair value of derivatives includes the gains or losses recognized at the expiration of the option term or early termination and the changes in fair value for open positions. Call options are not purchased to fund the index liabilities which may arise after the next deposit anniversary date. On the respective anniversary dates of the indexed deposits, the index used to compute the annual index credit is reset and new one-year call options are purchased to fund the next annual index credit. The cost of these purchases is managed through the terms of the FIA and IUL contracts, which permit changes to index return caps, participation rates and/or asset fees, subject to guaranteed minimums on each contract's anniversary date. By adjusting the index return caps, participation rates or asset fees, crediting rates generally can be managed except in cases where the contractual features would prevent further modifications. The future annual index credits on FIA are accounted for as a "series of embedded derivatives" over the expected life of the applicable contract with a corresponding reserve recognized. For IUL, the embedded derivative represents a single year liability for the index return. The Company carries all derivative instruments at fair value in the Consolidated Balance Sheets. The Company elected to not use hedge accounting for derivative transactions related to the FIA and IUL products. As a result, the Company recognizes the purchased call options and the embedded derivatives related to the provision of a contingent return at fair value, with changes in the fair value of the derivatives recognized immediately as Net investment gains (losses) in the Consolidated Statements of Operations. The fair values of derivative instruments, including derivative instruments embedded in FIA and IUL contracts are presented in the Consolidated Balance Sheets as follows: ($ in thousands) December 31, 2018 2017 Assets Derivative instruments, included in Short-term and other investments $ 2,647 $ 15,550 Liabilities Fixed indexed annuities - embedded derivatives, included in Other policyholder funds 78,700 80,733 Indexed universal life - embedded derivatives, included in Investment contract and life policy reserves 248 594 In general, the change in the fair value of the embedded derivatives related to FIA will not correspond to the change in fair value of the purchased call options because the purchased call options are one-year options while the options valued in the embedded derivatives represent the rights of the policyholder to receive index credits over the entire period the FIA contracts are expected to be in force, which typically exceeds 10 years. The changes in fair value of derivatives included in the Consolidated Statements of Operations were as follows: ($ in thousands) Years Ended December 31, 2018 2017 2016 Change in fair value of derivatives (1) : Revenues Net investment gains (losses) $ (4,112 ) $ 14,867 $ 4,024 Change in fair value of embedded derivatives: Revenues Net investment gains (losses) 7,931 (13,410 ) (5,076 ) ____________________ (1) Includes gains or losses recognized at the expiration of the option term or early termination and the changes in fair value for open options. The Company's strategy attempts to mitigate potential risk of loss under these agreements through a regular monitoring process, which evaluates the program's effectiveness. The Company is exposed to risk of loss in the event of nonperformance by the counterparties and, accordingly, option contracts are purchased from multiple counterparties, which are evaluated for creditworthiness prior to purchase of the contracts. All of these options have been purchased from nationally recognized financial institutions with a Standard & Poor's Global Inc. (S&P)/Moody's Investors Service, Inc. (Moody's) long-term credit rating of "BBB+/A1" or higher at the time of purchase and the maximum credit exposure to any single counterparty is subject to concentration limits. The Company also obtains credit support agreements that allow it to request the counterparty to provide cash collateral when the fair value of the exposure to the counterparty exceeds specified amounts. The notional amount and fair value of call options by counterparty and each counterparty's long-term credit ratings were as follows: ($ in thousands) December 31, 2018 December 31, 2017 Credit Rating Notional Fair Notional Fair Counterparty S&P Moody's Amount Value Amount Value Bank of America, N.A. A+ Aa3 $ 144,500 $ 870 $ 85,100 $ 6,320 Barclays Bank PLC A A2 28,500 247 48,900 1,828 Citigroup Inc. BBB+ — — — — Credit Suisse International A A1 16,100 55 21,100 1,444 Societe Generale A 89,100 1,475 91,700 5,958 Total $ 278,200 $ 2,647 $ 246,800 $ 15,550 As of December 31, 2018 and 2017 , the Company held $1,868 thousand and $15,584 thousand , respectively, of cash received from counterparties for derivative collateral, which is included in Other liabilities on the Consolidated Balance Sheets. This derivative collateral limits the Company's maximum amount of economic loss due to credit risk that would be incurred if parties to the call options failed completely to perform according to the terms of the contracts to $250 thousand |
Property and Casualty Unpaid Cl
Property and Casualty Unpaid Claims and Claim Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Insurance Loss Reserves [Abstract] | |
Property and Casualty Unpaid Claims and Claim Expenses | The following table is a summary reconciliation of the beginning and ending Property and Casualty unpaid claims and claim expense reserves for the periods indicated. The table presents reserves on both gross and net (after reinsurance) bases. The total net Property and Casualty insurance claims and claim expense incurred amounts are reflected in the Consolidated Statements of Operations. The end of the year gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets. ($ in thousands) Years Ended December 31, 2018 2017 2016 Property and Casualty segment Gross reserves, beginning of year (1) $ 319,182 $ 307,757 $ 301,569 Less: reinsurance recoverables 57,409 61,199 50,332 Net reserves, beginning of year (2) 261,773 246,558 251,237 Incurred claims and claim expenses: Claims occurring in the current year 547,959 498,989 471,099 Decrease in estimated reserves for claims occurring in prior years (3) (300 ) (2,700 ) (7,000 ) Total claims and claim expenses incurred (4) 547,659 496,289 464,099 Claims and claim expense payments for claims occurring during: Current year 369,194 333,385 323,025 Prior years 162,783 147,689 145,753 Total claims and claim expense payments 531,977 481,074 468,778 Net reserves, end of year (2) 277,455 261,773 246,558 Plus: reinsurance recoverables 89,725 57,409 61,199 Gross reserves, end of year (1) $ 367,180 $ 319,182 $ 307,757 ____________________ (1) Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Life and Retirement of $29,534 thousand , $28,567 thousand and $22,131 thousand as of December 31, 2018 , 2017 and 2016 , respectively, in addition to Property and Casualty reserves. (2) Reserves net of anticipated reinsurance recoverables. (3) Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs. Also refer to the paragraphs below for additional information regarding the reserve development recorded in 2018 , 2017 and 2016 . (4) Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Life and Retirement of $89,901 thousand , $86,017 thousand , and $76,905 thousand for the years ended December 31, 2018 , 2017 and 2016 , respectively, in addition to Property and Casualty amounts. Underwriting results for Property and Casualty are significantly influenced by estimates of the Company's ultimate liability for insured events. There is a high degree of uncertainty inherent in the estimates of ultimate losses underlying the liability for unpaid claims and claim settlement expenses. This inherent uncertainty is particularly significant for liability-related exposures due to the extended period, often many years, which transpires between a loss event, receipt of related claims data from policyholders and ultimate settlement of the claim. Reserves for Property and Casualty claims include provisions for payments to be made on reported claims (case reserves), IBNR claims and associated settlement expenses (together, loss reserves). The process by which these reserves are established requires reliance upon estimates based on known facts and on interpretations of circumstances, including the Company's experience with similar cases and historical trends involving claim payments and related patterns, pending levels of unpaid claims and product mix, as well as other factors including court decisions, economic conditions, public attitudes and medical costs. The Company believes the Property and Casualty loss reserves are appropriately established based on available facts, laws, and regulations. The Company calculates and records a single best estimate of the reserve (which is equal to the actuarial point estimate) as of each reporting date, for each line of business and its coverages for reported losses and for IBNR losses and as a result believes no other estimate is better than the recognized amount. Due to uncertainties involved, the ultimate cost of losses may vary materially from recognized amounts. The Company continually updates loss estimates using both quantitative and qualitative information from its reserving actuaries and information derived from other sources. Adjustments may be required as information develops which varies from experience, or, in some cases, augments data which previously were not considered sufficient for use in determining liabilities. The effects of these adjustments may be significant and are charged or credited to income in the period in which the adjustments are made. Numerous risk factors will affect more than one product line. One of these factors is changes in claim department practices, including claim closure rates, number of claims closed without payment, the use of third-party claim adjusters and the level of needed case reserve estimated by the adjuster. Other risk factors include changes in claim frequency, changes in claim severity, regulatory and legislative actions, court actions, changes in economic conditions and trends (e.g., medical costs, labor rates and the cost of materials), the occurrence of unusually large or frequent catastrophic loss events, timeliness of claim reporting, the state in which the claim occurred and degree of claimant fraud. The extent of the impact of a risk factor will also vary by coverages within a product line. Individual risk factors are also subject to interactions with other risk factors within product line coverages. While all product lines are exposed to these risks, there are some loss types or product lines for which the financial effect will be more significant. For instance, given the relatively large proportion (approximately 80.0% as of December 31, 2018 ) of the Company's reserves that are in the longer-tail automobile liability coverages, regulatory and court actions, changes in economic conditions and trends, and medical costs could be expected to impact this product line more extensively than others. Reserves are established for claims as they occur for each line of business based on estimates of the ultimate cost to settle the claims. The actual loss results are compared to prior estimates and differences are recorded as re-estimates. The primary actuarial techniques (development of paid loss dollars, development of reported loss dollars, methods based on expected loss ratios and methods utilizing frequency and severity of claims) used to estimate reserves and provide for losses are applied to actual paid losses and reported losses (paid losses plus individual case reserves set by claim adjusters) for an accident year to create an estimate of how losses are likely to develop over time. An accident year refers to classifying claims based on the year in which the claims occurred. For estimating short-tail coverage reserves (e.g., homeowners and automobile physical damage), which comprise approximately 20.0% of the Company's total loss reserves as of December 31, 2018 , the primary actuarial technique utilized is the development of paid loss dollars due to the relatively quick claim settlement period. As it relates to estimating long-tail coverage reserves (primarily related to automobile liability), which comprise approximately 80.0% of the Company's total loss reserves as of December 31, 2018 , the primary actuarial technique utilized is the development of reported loss dollars due to the relatively long claim settlement period. In all of the loss estimation techniques referred to above, a ratio (development factor) is calculated which compares current results to results in the prior period for each accident year. Various development factors, based on historical results, are multiplied by the current experience to estimate the development of losses of each accident year from the current time period into the next time period. The development factors for the next time period for each accident year are compounded over the remaining calendar years to calculate an estimate of ultimate losses for each accident year. Occasionally, unusual aberrations in loss patterns are caused by factors such as changes in claim reporting, settlement patterns, unusually large losses, process changes, legal or regulatory environment changes, and other influences. In these instances, analyses of alternate development factor selections are performed to evaluate the effect of these factors and judgment is applied to make appropriate development factor assumptions needed to develop a best estimate of ultimate losses. Paid losses are then subtracted from estimated ultimate losses to determine the indicated loss reserves. The difference between indicated reserves and recorded reserves is the amount of reserve re-estimate. Reserves are re-estimated quarterly. When new development factors are calculated from actual losses, and they differ from estimated development factors used in previous reserve estimates, assumptions about losses and required reserves are revised based on the new development factors. Changes to reserves are recognized in the period in which development factor changes result in reserve re-estimates. Claim count estimates are also established for claims as they occur for each line of business based on estimates of the ultimate claim counts. (These counts are derived by counting the number of claimants by insurance coverage.) The primary actuarial techniques (development of paid claim counts and development of reported claim counts) used to estimate ultimate claim counts are applied to actual paid claim counts and reported claim counts (paid claims plus individual unpaid claims set by claim adjusters) for an accident year to create an estimate of how claims are likely to develop over time. An accident year refers to classifying claims based on the year in which the claim occurred. The ultimate claim count generally gives equal consideration to the results of the two actuarial techniques described. Occasionally, unusual aberrations in claim reporting patterns or claims payment patterns may occur. In these instances, analyses of alternate development factor selections are performed to evaluate the effect of these factors and judgment is applied to make appropriate development factor assumptions needed to develop a best estimate of ultimate claims. See tables on the following pages of Note 5 for details of the average annual percentage payout of incurred claims by age, also referred to as a history of claims duration and tables illustrating the incurred and paid claims development information by accident year on a net basis for the lines of Homeowners, Auto Liability, and Auto Physical Damage, which represents 99.0% of the Company's incurred losses for 2018 . Numerous actuarial estimates of the types described above are prepared each quarter to monitor losses for each line of business, including the line's individual coverages; for reported losses and IBNR. Often, several different estimates are prepared for each detailed component, incorporating alternative analyses of changing claim settlement patterns and other influences on losses, from which the Company selects the best estimate for each component, occasionally incorporating additional analyses and judgment, as described above. These estimates also incorporate the historical impact of inflation into reserve estimates, the implicit assumption being that a multi-year average development factor represents an adequate provision. Based on the Company's review of these estimates, as well as the review of the independent reserve studies, the best estimate of required reserves for each line of business, including the line's individual coverages, is determined by management and is recognized for each accident year, then the required reserves for each component are summed to create the reserve balances carried on the Company's Consolidated Balance Sheets. Based on the Company's products and coverages, historical experience, and various actuarial methodologies used to develop reserve estimates, the Company estimates that the potential variability of the Property and Casualty loss reserves within a reasonable probability of other possible outcomes may be approximately plus or minus 6.0% of reserves, which equates to plus or minus approximately $13.0 thousand of net income as of December 31, 2018 . Although this evaluation reflects the most likely outcomes, it is possible the final outcome may fall below or above these estimates. Net favorable development of total reserves for Property and Casualty claims occurring in prior years was $300 thousand in 2018 , $2,700 thousand in 2017 and $7,000 thousand in 2016 . In 2018, the favorable development was predominantly the result of favorable severity trends in property for accident years 2016 and prior. In 2017, the favorable development was predominantly the result of favorable severity trends in property for accident years 2015 and prior. In 2016, the favorable development was predominantly the result of favorable severity trends in property for accident years 2014 and prior. The Company completes a detailed study of Property and Casualty reserves based on information available at the end of each quarter and year. Trends of reported losses (paid amounts and case reserves on claims reported to the Company) for each accident year are reviewed and ultimate loss costs for those accident years are estimated. The Company engages an independent property and casualty actuarial consulting firm to prepare an independent study of the Company's Property and Casualty reserves at December 31 st of each year. The result of the independent actuarial study at December 31, 2018 was consistent with management's analysis and selected estimates and did not result in any adjustments to the Company's Property and Casualty reserves recognized. At the time each of the reserve analyses was performed, the Company believed that each estimate was based upon sound methodology and such methodologies were appropriately applied and that there were no trends which indicated the likelihood of future loss reserve development. The financial impact of the net reserve development was therefore accounted for in the period that the development was determined. No other adjustments were made in the determination of the liabilities during the periods covered by these consolidated financial statements. Management believes that, based on data currently available, it has reasonably estimated the Company's ultimate losses. Below is the average annual percentage payout of incurred claims by age, also referred to as a history of claims duration: Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Homeowners 78.5 % 17.3 % 2.4 % 0.9 % 0.7 % 0.2 % — — — — Auto liability 40.9 % 35.1 % 13.7 % 6.1 % 2.7 % 1.1 % 0.3 % 0.1 % — — Auto physical damage 95.6 % 4.4 % — — — — — — — — The following tables illustrate the incurred and paid claims development by accident year on a net basis for the lines of homeowners, auto liability and auto physical damage. Conditions and trends that have affected the development of these reserves in the past will not necessarily reoccur in the future. It may not be appropriate to use this cumulative history in the projection of future performance. The information about incurred and paid claims development for the years ended December 31, 2009 to 2017 is presented as unaudited supplementary information. ($ in thousands) Homeowners Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2018 Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 113,274 $ 112,280 $ 112,970 $ 113,096 $ 113,357 $ 113,230 $ 113,216 $ 112,900 $ 112,958 $ 113,168 $ — 21,810 2010 140,994 136,907 133,358 133,235 133,216 133,136 132,859 132,905 132,627 — 25,149 2011 150,141 150,334 150,791 148,860 148,755 148,414 148,370 148,079 — 29,530 2012 108,754 109,156 109,360 106,486 106,308 106,348 106,000 — 21,578 2013 105,584 107,489 103,982 102,407 102,345 101,769 88 19,221 2014 111,647 113,505 109,059 106,844 106,554 257 20,083 2015 111,706 115,134 114,404 114,053 362 18,706 2016 115,931 118,604 117,009 724 19,830 2017 126,285 129,818 759 19,741 2018 166,793 27,697 19,515 Total $ 1,235,870 ($ in thousands) Homeowners Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 81,570 $ 104,407 $ 108,217 $ 110,324 $ 112,554 $ 112,720 $ 112,827 $ 112,848 $ 112,851 $ 112,858 2010 98,190 124,326 129,790 132,246 132,523 132,604 132,599 132,602 132,602 2011 123,046 142,846 145,852 146,908 147,451 148,026 148,014 148,069 2012 84,260 101,566 104,203 105,156 105,561 105,909 105,993 2013 76,890 96,599 99,361 100,968 101,527 101,677 2014 83,314 103,030 105,704 106,081 106,258 2015 90,704 109,303 111,882 113,321 2016 95,772 113,186 115,053 2017 106,800 128,518 2018 130,548 Total 1,194,897 Outstanding prior to 2009 66 Prior years paid — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 41,039 ($ in thousands) Auto Liability Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2018 Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 159,934 $ 158,703 $ 153,662 $ 157,941 $ 151,418 $ 150,919 $ 150,568 $ 149,822 $ 149,888 $ 149,807 $ (64 ) 49,230 2010 157,712 160,058 156,369 154,222 152,483 151,653 149,818 149,425 149,542 3 48,942 2011 150,803 146,713 145,735 143,133 142,488 139,840 138,891 138,949 210 45,976 2012 156,448 153,815 150,336 149,346 147,594 145,847 145,620 305 45,984 2013 153,860 152,858 150,720 150,657 148,111 147,993 748 47,368 2014 155,105 157,249 158,470 159,937 159,794 1,887 49,380 2015 165,517 172,553 177,021 178,325 2,441 50,596 2016 180,380 184,440 184,567 5,637 51,934 2017 187,983 188,756 19,007 48,587 2018 200,314 71,139 43,522 Total $ 1,643,667 ($ in thousands) Auto Liability Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 60,011 $ 110,921 $ 133,568 $ 142,524 $ 146,383 $ 148,783 $ 149,608 $ 149,801 $ 149,855 $ 149,871 2010 63,416 118,345 137,012 144,255 147,337 148,751 149,247 149,364 149,439 2011 61,070 108,837 126,812 133,931 136,906 138,151 138,358 138,689 2012 61,279 109,574 127,185 138,641 142,916 144,622 145,121 2013 62,224 108,856 131,214 139,954 145,291 146,770 2014 61,329 117,468 139,463 149,059 155,758 2015 70,836 134,473 157,980 170,088 2016 73,073 140,901 166,815 2017 70,682 139,531 2018 77,528 Total 1,439,610 Outstanding prior to 2009 183 Prior years paid — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 204,240 ($ in thousands) Auto Physical Damage Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2018 Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 84,539 $ 83,515 $ 83,202 $ 82,635 $ 82,000 $ 81,986 $ 81,972 $ 81,963 $ 81,972 $ 81,941 $ — 77,449 2010 84,112 83,420 83,103 83,046 83,052 83,050 83,036 83,028 83,018 2 81,581 2011 86,205 85,507 86,023 85,120 85,143 85,116 85,108 85,102 8 80,803 2012 83,770 82,337 83,402 83,431 83,354 83,342 83,334 8 78,163 2013 91,448 88,856 88,672 88,627 88,455 88,525 54 80,919 2014 95,572 95,634 95,422 95,239 95,232 (21 ) 87,899 2015 99,291 97,994 97,624 97,455 (188 ) 87,491 2016 112,430 109,515 109,348 (207 ) 93,200 2017 115,483 111,798 924 91,160 2018 109,040 (6,859 ) 91,070 Total $ 944,793 ($ in thousands) Auto Physical Damage Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 78,456 $ 82,117 $ 82,039 $ 82,015 $ 82,000 $ 81,985 $ 81,973 $ 81,963 $ 81,955 $ 81,941 2010 79,329 83,120 83,103 83,087 83,067 83,051 83,036 83,028 83,015 2011 83,227 85,254 85,181 85,148 85,127 85,116 85,108 85,095 2012 80,519 83,418 83,372 83,355 83,347 83,342 83,326 2013 85,110 88,688 88,580 88,532 88,484 88,471 2014 88,939 95,444 95,266 95,256 95,258 2015 92,138 97,850 97,685 97,638 2016 106,459 109,686 109,536 2017 105,156 110,817 2018 103,559 Total 938,656 Outstanding prior to 2009 — Prior years paid — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 6,137 The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the Consolidated Balance Sheet is as follows: ($ in thousands) Years Ended December 31, 2018 Property and Casualty segment Net reserves Homeowners $ 41,039 Auto liability 204,240 Auto physical damage 6,137 Other short duration lines 3,556 Total net reserves for unpaid claims and claim adjustment expense, net of reinsurance 254,972 Reinsurance recoverable on unpaid claims Homeowners 26,646 Auto liability 55,971 Other short duration lines 7,108 Total reinsurance recoverable on unpaid claims 89,725 Insurance lines other than short duration (1) 29,534 Unallocated claims adjustment expenses 22,483 Total other than short duration and unallocated claims adjustment expenses 52,017 Gross reserves, end of year (1) $ 396,714 ____________________ (1) |
Reinsurance and Catastrophes
Reinsurance and Catastrophes | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Reinsurance and Catastrophes | NOTE 6 - Reinsurance and Catastrophes In the normal course of business, the Company's insurance subsidiaries assume and cede reinsurance with other insurers. Reinsurance is ceded primarily to limit losses from large events and to permit recovery of a portion of direct losses; however, such a transfer does not relieve the originating insurance company of primary liability. The Company is a national underwriter and therefore has exposure to catastrophic losses in certain coastal states and other regions throughout the U.S. Catastrophes can be caused by various events including hurricanes, windstorms, hail, severe winter weather, wildfires and earthquakes, and the frequency and severity of catastrophes are inherently unpredictable. The financial impact from catastrophic losses results from both the total amount of insured exposure in the area affected by the catastrophe as well as the severity of the event. The Company seeks to reduce its exposure to catastrophe losses through the geographic diversification of its insurance coverage, deductibles, maximum coverage limits and the purchase of catastrophe reinsurance. The Company's catastrophe losses incurred of approximately $107,345 thousand , $61,814 thousand and $60,043 thousand for the years ended December 31, 2018 , 2017 and 2016 , respectively. For 2018, catastrophe losses were impacted by a number of storm and wildfire events throughout the year. The total amounts of reinsurance recoverable on unpaid insurance reserves classified as assets and reported in Other assets in the Consolidated Balance Sheets were as follows: ($ in thousands) December 31, 2018 2017 Reinsurance recoverables on reserves and unpaid claims Property and Casualty Reinsurance companies $ 33,754 $ 6,696 State insurance facilities 55,971 50,713 Life and health 9,785 11,037 Total $ 99,510 $ 68,446 The Company recognizes the cost of reinsurance premiums over the contract periods for such premiums in proportion to the insurance protection provided. Amounts recoverable from reinsurers for unpaid claims and claim settlement expenses, including estimated amounts for unsettled claims, IBNR claims and policy benefits, are estimated in a manner consistent with the insurance liability associated with the policy. The effects of reinsurance on premiums written and contract deposits; premiums and contract charges earned; and benefits, claims and settlement expenses were as follows: ($ in thousands) Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Year Ended December 31, 2018 Premiums written and contract deposits (1) $ 1,255,557 $ 28,773 $ 8,259 $ 1,235,043 Premiums and contract charges earned 841,147 28,837 5,023 817,333 Benefits, claims and settlement expenses 769,664 136,601 4,497 637,560 Year Ended December 31, 2017 Premiums written and contract deposits (1) 1,244,500 21,989 4,606 1,227,117 Premiums and contract charges earned 812,099 22,036 4,640 794,703 Benefits, claims and settlement expenses 588,621 10,472 4,157 582,306 Year Ended December 31, 2016 Premiums written and contract deposits (1) 1,280,903 22,728 4,324 1,262,499 Premiums and contract charges earned 777,651 22,826 4,321 759,146 Benefits, claims and settlement expenses 562,385 25,739 4,358 541,004 ____________________ (1) This measure is not based on accounting principles generally accepted in the U.S. (non-GAAP). An explanation of this non-GAAP measure is contained in the Glossary of Selected Terms included as an exhibit in the Company's reports filed with the SEC. There were no losses from uncollectible reinsurance recoverables in the three years ended December 31, 2018 . Past due reinsurance recoverables as of December 31, 2018 were not material. The Company maintains catastrophe excess of loss reinsurance coverage. For 2018 , the Company's catastrophe excess of loss coverage consisted of one contract in addition to a minimal amount of coverage by the Florida Hurricane Catastrophe Fund (FHCF). The catastrophe excess of loss contract provided 95% coverage for catastrophe losses above a retention of $25,000 thousand per occurrence up to $175,000 thousand per occurrence. This contract consisted of three layers, each of which provided for one mandatory reinstatement. The layers were $25,000 thousand excess of $25,000 thousand , $40,000 thousand excess of $50,000 thousand and $85,000 thousand excess of $90,000 thousand . For liability coverages, in 2018 , the Company reinsured each loss above a retention of $1,000 thousand with coverage up to $5,000 thousand on a per occurrence basis and $20,000 thousand in a clash event. (A clash cover is a reinsurance casualty excess contract requiring two or more casualty coverages or policies issued by the Company to be involved in the same loss occurrence for coverage to apply.) For property coverages, in 2018 , the Company reinsured each loss above a retention of $1,000 thousand up to $5,000 thousand on a per risk basis, including catastrophe losses. Also, the Company could submit to the reinsurers two per risk losses from the same occurrence for a total of $8,000 thousand of property recovery in any one event. The maximum individual life insurance risk retained by the Company is $300 thousand on any individual life, while either $100 thousand or $125 thousand is retained on each group life policy depending on the type of coverage. Excess amounts are reinsured. The Company also maintains a life catastrophe reinsurance program. For 2018 , the Company reinsured 100% of the catastrophe risk in excess of $1,000 thousand up to $35,000 thousand |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 7 - Debt Indebtedness and scheduled maturities consisted of the following: ($ in thousands) Effective Interest Rates Final Maturity December 31, 2018 2017 Short-term debt Bank Credit Facility Variable 2023 $ — $ — Long-term debt (1) 4.50% Senior Notes, Aggregate principal amount of $250,000 less unaccrued discount of $488 and $547 and unamortized debt issuance costs of $1,772 and $1,984 4.50% 2025 247,740 247,469 Federal Home Loan Bank borrowing 2.70% 2022 50,000 50,000 Total $ 297,740 $ 297,469 ____________________ (1) The Company designates debt obligations as "long-term" based on maturity date at issuance. Credit Agreement with Financial Institutions (Bank Credit Facility ) In 2018, HMEC's Bank Credit Agreement (the Bank Credit Facility) was amended and restated to extend the commitment termination date to June 27, 2023 from the previous termination date of July 30, 2019. The interest rate spread relative to Eurodollar base rates and the financial covenants within the agreement were not changed. The Bank Credit Facility is by and between HMEC, certain financial institutions named therein and JPMorgan Chase Bank, N.A., as administrative agent, and provides for unsecured borrowings of up to $150,000 thousand . Interest accrues at varying spreads relative to prime or Eurodollar base rates and is payable monthly or quarterly depending on the applicable base rate. The unused portion of the Bank Credit Facility is subject to a variable commitment fee, which was 0.15% on an annual basis at December 31, 2018 . 4.50% Senior Notes due 2025 (Senior Notes due 2025) On November 23, 2015, the Company issued $250,000 thousand aggregate principal amount of 4.50% senior notes, which will mature on December 1, 2025, issued at a discount of 0.265% resulting in an effective yield of 4.533% . Interest on the Senior Notes due 2025 is payable semi-annually at a rate of 4.50% . The Senior Notes due 2025 are redeemable in whole or in part, at any time, at the Company's option, at a redemption price equal to the greater of (1) 100% of the principal amount of the notes being redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted, on a semi-annual basis, at the Treasury yield (as defined in the indenture) plus 35 basis points, plus, in either of the above cases, accrued interest to the date of redemption. Federal Home Loan Bank Borrowings In 2017, HMIC became a member of the FHLB, which provides HMIC with access to collateralized borrowings and other FHLB products. As membership requires the ownership of membership stock, in June 2017, HMIC purchased common stock to meet the membership requirement. Any borrowing from the FHLB requires the purchase of FHLB activity-based common stock in an amount equal to 4.5% of the borrowing, or a lower percentage - such as 2.0% based on the Reduced Capitalization Advance Program. In the fourth quarter of 2017, HMIC purchased common stock to meet the activity-based requirement. For FHLB borrowings, the Board has authorized a maximum amount equal to the greater of 10% of admitted assets or 20% of surplus of the consolidated property and casualty companies. During the fourth quarter of 2017, the Company received $50,000 thousand in executed borrowings for HMIC. Of the total $50,000 thousand received, $25,000 thousand matures on October 5, 2022 and $25,000 thousand matures on December 2, 2022. Interest on the borrowings accrues at an annual weighted average rate of 2.70% as of December 31, 2018 . HMIC's FHLB borrowings of $50,000 thousand are included in Long-term debt in the Consolidated Balance Sheets. Covenants |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8 - Income Taxes As the result of the Tax Cuts and Jobs Act (Tax Act) enacted December 2017, the Company had recorded provisional amounts for the taxes associated with its partnership investments and the changes in discounting unpaid loss reserves based on information available at December 31, 2017. As a result of the guidance issued in 2018, the Company has determined there is no change in its estimates related to partnership investments. Updated estimates of the transition liability related to loss reserve discounting were less than the provisional amounts by approximately $1.1 million . Updated estimates of the transition liability related to life insurance reserves decreased the liability by approximately $6.8 million . The adjustments to the Company’s provisional amounts for the year ended December 31, 2018 did not impact the effective tax rate. As of December 31, 2018, there are no provisional amounts related to the impact of the Tax Act that remain in the Company’s Consolidated Financial Statements. The income tax assets and liabilities included in Other assets and Other liabilities, respectively, in the Consolidated Balance Sheets were as follows: ($ in thousands) December 31, 2018 2017 Income tax (asset) liability Current $ (20,793 ) $ (16,266 ) Deferred 103,686 157,775 Deferred tax assets and liabilities are recognized for all future tax consequences attributable to "temporary differences" between the financial statement carrying value of existing assets and liabilities and their respective tax bases. There are no deferred tax liabilities that have not been recognized. The "temporary differences" that gave rise to the deferred tax balances were as follows: ($ in thousands) December 31, 2018 2017 Deferred tax assets Unearned premium reserve reduction $ 12,112 $ 11,472 Compensation accruals 6,866 8,359 Impaired securities 1,295 2,240 Other comprehensive income - net funded status of benefit plans 3,254 3,526 Discounting of unpaid claims and claim expense tax reserves 2,772 3,889 Postretirement benefits other than pensions 302 321 Charitable contributions carryforwards 89 62 Net operating loss carryforwards 10,969 148 Total gross deferred tax assets 37,659 30,017 Deferred tax liabilities Other comprehensive income - net unrealized gains on securities 32,897 95,583 Deferred policy acquisition costs 60,330 52,438 Life insurance future policy benefit reserve 9,304 102 Life insurance future policy benefit reserve (transitional rule) 14,910 23,869 Discounting of unpaid claims and claim expense tax reserves (transitional rule) 1,203 2,513 Investment related adjustments 17,531 8,661 Intangibles 2,557 2,557 Other, net 2,613 2,069 Total gross deferred tax liabilities 141,345 187,792 Net deferred tax liability $ 103,686 $ 157,775 The Company evaluated sources and character of income, including historical earnings, loss carryback potential, taxable income from future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences, and taxable income from prudent and feasible tax planning strategies. Although realization of deferred tax assets is not assured, the Company believes it is more likely than not that gross deferred tax assets will be fully realized and that a valuation allowance with respect to the realization of the total gross deferred tax assets was not necessary as of December 31, 2018 and 2017 . At December 31, 2018, the Company had available the following carryforwards or credits. ($ in thousands) Pretax Amount Expiration Years Operating loss carryforwards $ 52,232 2037 - 2038 Charitable contributions carryforwards 424 2021 - 2023 The components of the provision for income tax expense were as follows: ($ in thousands) Years Ended December 31, 2018 2017 2016 Current $ 4,152 $ 3,813 $ 26,359 Deferred (2,958 ) (84,585 ) 4,108 Total income tax expense (benefit) $ 1,194 $ (80,772 ) $ 30,467 Income tax expense for the following periods differed from the expected tax computed by applying the federal corporate tax rate of 21% for 2018 and 35% for 2017 and 2016 to income before income taxes as follows: ($ in thousands) Years Ended December 31, 2018 2017 2016 Expected federal tax on income $ 4,103 $ 31,041 $ 39,981 Add (deduct) tax effects of: Tax-exempt interest (3,726 ) (5,335 ) (5,789 ) Dividend received deduction (412 ) (4,810 ) (5,751 ) Tax Act DTL re-measurement — (98,988 ) — Employee share-based compensation (1,134 ) (3,258 ) 127 Compensation deduction limitation 1,754 326 — Prior year adjustments 300 (293 ) 91 Other, net 309 545 1,808 Income tax expense (benefit) provided on income $ 1,194 $ (80,772 ) $ 30,467 The Company's federal income tax returns for years prior to 2014 are no longer subject to examination by the Internal Revenue Service (IRS). The Company recognizes tax benefits from tax return positions only if it is more likely than not the position will be sustainable, upon examination, on its technical merits and any relevant administrative practices or precedents. As a result, the Company applies a more likely than not recognition threshold for all tax uncertainties. The Company records liabilities for uncertain tax filing positions where it is more likely than not that the position will not be sustainable upon audit by taxing authorities. These liabilities are reevaluated routinely and are adjusted appropriately based upon changes in facts or law. The Company has no unrecorded liabilities from uncertain tax filing positions. HMEC and its subsidiaries file a consolidated federal income tax return. The federal income tax sharing agreements between HMEC and its subsidiaries, as approved by the Board, provide that tax on income is charged to each subsidiary as if it were filing a separate tax return with the limitation that each subsidiary will receive the benefit of any losses or tax credits to the extent utilized in the consolidated tax return. Intercompany balances are settled quarterly with a final settlement after filing the consolidated federal income tax return with the IRS. A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is as follows: ($ in thousands) Years Ended December 31, 2018 2017 2016 Balance as of the beginning of the year $ 1,790 $ 1,594 $ 1,039 Increases related to prior year tax positions — 101 348 Decreases related to prior year tax positions (152 ) — — Increases related to current year tax positions 96 422 283 Settlements — — — Lapse of statute — (327 ) (76 ) Balance as of the end of the year $ 1,734 $ 1,790 $ 1,594 The Company's effective tax rate would be affected to the extent there were unrecognized tax benefits that could be recognized. There are no positions for which it is reasonably possible that the total amount of unrecognized tax benefit will significantly change within the next 12 months. The Company classifies all tax related interest and penalties as income tax expense. Interest and penalties were both immaterial in each of the years ended December 31, 2018 , 2017 and 2016 |
Shareholders' Equity and Common
Shareholders' Equity and Common Stock Equivalents | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Shareholders' Equity and Common Stock Equivalents | NOTE 9 - Shareholders' Equity and Common Stock Equivalents Share Repurchase Programs and Treasury Shares Held (Common Stock) In December 2011, the Board authorized a share repurchase program allowing repurchases of up to $50,000 thousand (the 2011 Plan). In September 2015, the Board authorized an additional share repurchase program allowing repurchases of up to $50,000 thousand (the 2015 Plan) to begin following the completion of the 2011 Plan. Both share repurchase programs authorize the repurchase of HMEC's common shares in open market or privately negotiated transactions, from time to time, depending on market conditions. The share repurchase programs do not have expiration dates and may be limited or terminated at any time without notice. During 2016, the Company repurchased 701,410 shares of its common stock, or 1.7% of the shares outstanding as of December 31, 2015, at an aggregate cost of $21,513 thousand , or an average price of $30.67 per share, under the 2011 and the 2015 Plans. Utilization of the remaining authorization under the 2011 program was completed in January 2016. During 2017, the Company repurchased 48,440 shares of its common stock, or 0.1% of the shares outstanding as of December 31, 2016, at an aggregate cost of $1,660 thousand , or an average price of $34.28 per share, under the 2015 Plan. During 2018, the Company repurchased 129,112 shares of its common stock, or 0.3% of the shares outstanding as of December 31, 2017, at an aggregate cost of $5,088 thousand , or an average price of $39.41 per share, under the 2015 Plans. In total and through December 31, 2018, 2,977,162 shares were repurchased under the 2011 and 2015 Plans at an average price of $25.96 per share. The repurchase of shares was financed through use of cash. As of December 31, 2018 , $22,766 thousand remained authorized for future share repurchases under the 2015 Plan authorization. At December 31, 2018 , the Company held 24,850 thousand shares in treasury. Authorization of Preferred Stock In 1996, the shareholders of HMEC approved authorization of 1,000,000 shares of $0.001 par value preferred stock. The Board is authorized to (1) direct the issuance of the preferred stock in one or more series, (2) fix the dividend rate, conversion or exchange rights, redemption price and liquidation preference, of any series of the preferred stock, (3) fix the number of shares for any series and (4) increase or decrease the number of shares of any series. No shares of preferred stock were outstanding at December 31, 2018 and 2017 . 2010 Comprehensive Executive Compensation Plan In 2010, the shareholders of HMEC approved the 2010 Comprehensive Executive Compensation Plan (the Comprehensive Plan). The purpose of the Comprehensive Plan is to aid the Company in attracting, retaining, motivating and rewarding employees and non-employee Directors; to provide for equitable and competitive compensation opportunities, including deferral opportunities; to encourage long-term service; to recognize individual contributions and reward achievement of Company goals; and to promote the creation of long-term value for the Company's shareholders by closely aligning the interests of plan participants with those of shareholders. The Comprehensive Plan authorizes share-based and cash-based incentives for plan participants. In 2012, the shareholders of HMEC approved the implementation of a fungible share pool under which grants of full value shares will count against the share limit as two and one half shares for every share subject to a full value award. In 2015, the shareholders of HMEC approved an amendment and restatement of the Comprehensive Plan which included an increase of 3.25 million in the number of shares of common stock reserved for issuance under the Comprehensive Plan. As of December 31, 2018 , approximately 1,826 thousand shares were available for grant under the Comprehensive Plan. Shares of common stock issued under the Comprehensive Plan may be either authorized and unissued shares of HMEC or shares that have been reacquired by HMEC; however, new shares have been issued historically. As further described in the paragraphs below, CSUs, stock options and RSUs under the Comprehensive Plan were as follows: December 31, 2018 2017 2016 CSUs related to deferred compensation for Directors 32,288 61,677 74,058 CSUs related to deferred compensation for employees 24,498 24,903 51,502 Stock options 774,821 719,015 747,032 RSUs related to incentive compensation 1,008,249 1,149,679 1,419,268 Total 1,839,856 1,955,274 2,291,860 Director Common Stock Units Deferred compensation of Directors is in the form of CSUs, which represent an equal number of common shares to be issued in the future. The outstanding units of Directors serving on the Board accrue dividends at the same rate as dividends paid to HMEC's shareholders; outstanding units of retired Directors do not accrue dividends. These dividends are reinvested into additional CSUs. Employee Common Stock Units Deferred compensation of employees is in the form of CSUs, which represent an equal number of common shares to be issued in the future. Distributions of employee deferred compensation are allowed to be either in common shares or cash. Through December 31, 2018 , all distributions have been in cash. The outstanding units accrue dividends at the same rate as dividends paid to HMEC's shareholders. These dividends are reinvested into additional CSUs. Stock Options Options to purchase shares of HMEC common stock may be granted to executive officers, other employees and Directors. The options become exercisable in installments based on service generally beginning in the first year from the date of grant and generally become fully vested 4 years from the date of grant. The options generally expire 7 to 10 years from the date of grant. The exercise price of the option is equal to the market price of HMEC's common stock on the date of grant resulting in a grant date intrinsic value of $0 . Changes in outstanding options were as follows: Weighted Average Option Price per Share Range of Option Prices per Share Options Outstanding Vested and Exercisable December 31, 2017 $32.80 $17.01-$41.95 719,015 258,321 Granted $43.04 $42.95-$44.75 223,208 — Vested $31.42 $17.32-$41.95 — 158,233 Exercised $27.07 $17.01-$41.95 (145,438 ) (145,438 ) Forfeited $39.07 $31.01-$42.95 (21,964 ) — Expired — — — — December 31, 2018 $36.65 $17.32-$44.75 774,821 271,116 Option information segregated by ranges of exercise prices was as follows: December 31, 2018 Total Outstanding Options Vested and Exercisable Options Range of Option Prices per Share Options Weighted Average Option Price per Share Weighted Average Remaining Term Options Weighted Average Option Price per Share Weighted Average Remaining Term $17.01-$22.69 36,524 $19.77 0.82 36,524 $19.77 0.82 years $28.88-$33.41 320,897 $31.01 6.68 183,685 $30.85 6.40 years $38.05-$41.95 199,452 $41.82 8.19 50,907 $41.82 8.19 years $41.95-$44.75 217,948 $43.05 9.19 — — 0 years Total 774,821 $36.65 7.50 271,116 $31.42 5.98 years The weighted average exercise prices of vested and exercisable options as of December 31, 2017 and 2016 were $27.12 and $22.73 , respectively. As of December 31, 2018 , based on a closing stock price of $37.45 per share, the aggregate intrinsic (in-the-money) values of vested options and all options outstanding were $1,857 thousand and $2,713 thousand , respectively. Restricted Common Stock Units RSUs may be granted to executive officers, other employees and Directors and represent an equal number of common shares to be issued in the future. The RSUs vest in installments based on service or attainment of performance criteria generally beginning in the first year from the date of grant and generally become fully vested 1 to 5 years from the date of grant. The outstanding units accrue dividends at the same rate as dividends paid to HMEC's shareholders. These dividends are reinvested into additional RSUs. Changes in outstanding RSUs were as follows: Total Outstanding Units Vested Units Units Weighted Average Grant Date Fair Value per Unit Units Weighted Average Grant Date Fair Value per Unit December 31, 2017 1,149,679 $32.05 558,139 $19.80 Granted (1) 188,675 $42.21 — — Vested — — 144,290 $31.58 Forfeited (44,855 ) $38.08 — — Distributed (2) (285,250 ) $25.15 (285,250 ) $25.15 December 31, 2018 1,008,249 $35.64 417,179 $20.22 ____________________ (1) Includes dividends reinvested into additional RSUs. (2) |
Statutory Information and Restr
Statutory Information and Restrictions | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Statutory Information and Restrictions | The insurance departments of various states in which the insurance subsidiaries of HMEC are domiciled recognize as net income and surplus those amounts determined in conformity with statutory accounting principles prescribed or permitted by the insurance departments, which differ in certain respects from GAAP. Reconciliations of statutory capital and surplus and net income, as determined using statutory accounting principles, to the amounts included in the accompanying consolidated financial statements are as follows: ($ in thousands) December 31, 2018 2017 Statutory capital and surplus of insurance subsidiaries $ 903,564 $ 944,139 Increase (decrease) due to: Deferred policy acquisition costs 298,742 257,826 Difference in policyholder reserves 142,601 111,188 Goodwill 47,396 47,396 Investment fair value adjustments on fixed maturity securities 142,512 415,775 Difference in investment reserves 105,430 111,225 Federal income tax liability (115,667 ) (162,634 ) Net funded status of benefit plans (15,495 ) (16,789 ) Non-admitted assets and other, net 20,412 28,870 Shareholders' equity of parent company and non-insurance subsidiaries 8,795 12,046 Parent company short-term and long-term debt (247,740 ) (247,469 ) Shareholders' equity as reported herein $ 1,290,550 $ 1,501,573 ($ in thousands) Years Ended December 31, 2018 2017 2016 Statutory net income of insurance subsidiaries $ 45,977 $ 82,587 $ 74,574 Net loss of non-insurance companies (9,755 ) (4,496 ) (5,135 ) Interest expense (11,892 ) (11,836 ) (11,808 ) Tax benefit of interest expense and other parent company current tax adjustments 121 5,654 5,637 Combined net income 24,451 71,909 63,268 Increase (decrease) due to: Deferred policy acquisition costs 1,015 9,385 19,442 Policyholder benefits 26,318 30,609 14,919 Federal income tax (expense) benefit 3,020 84,198 (5,312 ) Investment reserves (31,529 ) (20,966 ) (1,320 ) Other adjustments, net (4,932 ) (5,676 ) (7,232 ) Net income as reported herein $ 18,343 $ 169,459 $ 83,765 HMEC has principal insurance subsidiaries domiciled in Illinois and Texas. The statutory financial statements of these subsidiaries are prepared in accordance with accounting principles prescribed or permitted by the Illinois Department of Insurance and the Texas Department of Insurance, as applicable. Prescribed statutory accounting principles include a variety of publications of the National Association of Insurance Commissioners (NAIC), as well as state laws, regulations and general administrative rules. The NAIC has risk-based capital guidelines to evaluate the adequacy of statutory capital and surplus in relation to risks assumed in investments, reserving policies, and volume and types of insurance business written. At December 31, 2018 and 2017 , the minimum statutory-basis capital and surplus required to be maintained by HMEC's insurance subsidiaries was $108,470 thousand and $101,463 thousand , respectively. At December 31, 2018 and 2017 , statutory capital and surplus of each of the Company's insurance subsidiaries was above required levels. The restricted net assets of HMEC's insurance subsidiaries were $17,695 thousand and $17,985 thousand as of December 31, 2018 and 2017 , respectively. The minimum statutory basis capital and surplus amount at each date is the total estimated authorized control level risk-based capital for all of HMEC's insurance subsidiaries combined. Authorized control level risk-based capital represents the minimum level of statutory basis capital and surplus necessary before the insurance commissioner in the respective state of domicile is authorized to take whatever regulatory actions considered necessary to protect the best interests of the policyholders and creditors of the insurer. The amount of restricted net assets represents the combined fair value of securities on deposit with governmental agencies for the insurance subsidiaries as required by law in various states in which the insurance subsidiaries of HMEC conduct business. HMEC relies largely on dividends from its insurance subsidiaries to meet its obligations for payment of principal and interest on debt, dividends to shareholders and parent company operating expenses, including tax payments pursuant to tax sharing agreements. Payments for share repurchase programs also have this dependency. HMEC's insurance subsidiaries are subject to various regulatory restrictions which limit the amount of annual dividends or other distributions, including loans or cash advances, available to HMEC without prior approval of the insurance regulatory authorities. As a result, HMEC may not be able to receive dividends from such subsidiaries at times and in amounts necessary to pay desired dividends to shareholders. The aggregate amount of dividends that may be paid in 2019 from all of HMEC's insurance subsidiaries without prior regulatory approval is $90,700 thousand . As disclosed in the reconciliation of the statutory capital and surplus of insurance subsidiaries to the consolidated GAAP shareholders' equity, the insurance subsidiaries have statutory capital and surplus of $903,564 thousand as of December 31, 2018 , which is subject to regulatory restrictions. At the time of this Annual Report on Form 10-K and during each of the years in the three year period ended December 31, 2018 , the Company had no |
Pension Plans and Other Postret
Pension Plans and Other Postretirement Benefits | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Pension Plans and Other Postretirement Benefits | The Company sponsors two qualified and three non-qualified retirement plans. Substantially all employees participate in the 401(k) plan. Both the qualified defined benefit plan and the two non-qualified supplemental defined benefit plans have been frozen since 2002. All participants in the frozen plans are 100% vested in their accrued benefit and all non-qualified supplemental defined benefit plan participants are receiving payments. Certain employees participate in a non-qualified defined contribution plan. Qualified Plans All employees participate in the 401(k) plan and receive a 100% vested 3% "safe harbor" company contribution based on employees' eligible earnings. The Company matches each dollar of employee contributions up to a 5% maximum — in addition to maintaining the automatic 3% "safe harbor" contribution. The matching company contribution vests after 5 years of service. The 401(k) plan is fully funded. In 2002, participants ceased accruing benefits for earnings and years of service in the frozen defined benefit plan. A substantial number of those participants are former employees of the Company who are not eligible to receive an immediate annuity benefit until age 65 and/or are not eligible for a lump sum distribution. In August of 2016, the Company announced a cash-out election "window" ending in September 2016 for all vested terminated participants. During this window, 52 former employees elected to receive a total of approximately $1,400 thousand in lump sum distributions. The Company's policy for the frozen defined benefit plan is to contribute to the plan amounts which are actuarially determined to provide sufficient funding to meet future benefit payments as defined by federal laws and regulations. For the two qualified plans, all assets are held in their respective plan trusts. Non-qualified Plans The non-qualified plans were established for specific employees whose otherwise eligible earnings exceeded the statutory limits under the qualified plans. Benefit accruals under the non-qualified supplemental defined benefit plans were frozen in 2002 and all participants are currently in payment status. Both the non-qualified frozen supplemental defined benefit plans and the non-qualified contribution plan are unfunded plans with the Company's contributions made at the time payments are made to participants. Total Expense and Contribution Plans' Information Total expense recorded for the non-qualified defined contribution, 401(k), defined benefit and supplemental retirement plans was $8,851 thousand , $9,114 thousand and $8,527 thousand for the years ended December 31, 2018 , 2017 and 2016 , respectively. Contributions to employees' accounts under the 401(k) plan and the non-qualified defined contribution plan, as well as total assets of the plans, were as follows: ($ in thousands) Year Ended December 31, 2018 2017 2016 401(k) plan Contributions to employees' accounts $ 7,655 $ 7,637 $ 6,918 Total assets at the end of the year 167,767 180,514 177,352 Non-qualified defined contribution plan Contributions to employees' accounts 70 84 72 Total assets at the end of the year — — — Defined Benefit Plan and Supplemental Retirement Plans The following tables summarize the funded status of the defined benefit and supplemental retirement pension plans as of December 31, 2018 , 2017 and 2016 (the measurement dates) and identify (1) the assumptions used to determine the projected benefit obligation and (2) the components of net pension cost for the defined benefit plan and supplemental retirement plans for the following periods: ($ in thousands) Defined Benefit Plan Supplemental Defined Benefit Plans December 31, December 31, 2018 2017 2016 2018 2017 2016 Change in benefit obligation: Projected benefit obligation at beginning of year $ 28,432 $ 29,407 $ 31,233 $ 16,832 $ 16,847 $ 17,004 Service cost 650 650 650 — — — Interest cost 947 1,091 1,244 566 631 687 Plan amendments — — — — — — Actuarial loss (gain) (2,208 ) (721 ) (220 ) (789 ) 805 488 Benefits paid (2,746 ) (1,995 ) (3,500 ) (1,205 ) (1,451 ) (1,332 ) Settlements — — — — — — Projected benefit obligation at end of year $ 25,075 $ 28,432 $ 29,407 $ 15,404 $ 16,832 $ 16,847 Change in plan assets: Fair value of plan assets at beginning of year $ 25,843 $ 25,446 $ 27,667 $ — $ — $ — Actual return on plan assets (640 ) 2,909 1,766 — — — Employer contributions — — — 1,205 1,451 1,332 Benefits paid (2,746 ) (1,995 ) (3,500 ) (1,205 ) (1,451 ) (1,332 ) Expenses paid (367 ) (517 ) (487 ) — — — Settlements — — — — — — Fair value of plan assets at end of year $ 22,090 $ 25,843 $ 25,446 $ — $ — $ — Funded status $ (2,985 ) $ (2,589 ) $ (3,961 ) $ (15,404 ) $ (16,832 ) $ (16,847 ) Prepaid (accrued) benefit expense $ 7,425 $ 8,016 $ 8,653 $ (10,320 ) $ (10,648 ) $ (11,210 ) Total amount recognized in Consolidated Balance Sheets, all in Other liabilities $ (2,985 ) $ (2,589 ) $ (3,961 ) $ (15,404 ) $ (16,832 ) $ (16,847 ) Amounts recognized in accumulated other comprehensive income (loss) (AOCI): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss 10,410 10,605 12,613 5,084 6,184 5,637 Total amount recognized in AOCI $ 10,410 $ 10,605 $ 12,613 $ 5,084 $ 6,184 $ 5,637 Information for pension plans with an accumulated benefit obligation greater than plan assets: Projected benefit obligation $ 25,075 $ 28,432 $ 29,407 $ 15,404 $ 16,832 $ 16,847 Accumulated benefit obligation 25,075 28,432 29,407 15,404 16,832 16,847 Fair value of plan assets 22,090 25,843 25,446 — — — The change in the Company's AOCI for the defined benefit plans for the year ended December 31, 2018 was primarily attributable to lower than expected asset returns and updates to mortality assumptions and an increase in the discount rate. The change in the Company's AOCI for the defined benefit plans for the year ended December 31, 2017 was primarily attributable to better than expected asset returns and updates to mortality assumptions partially offset by a decrease in the discount rate. The change in the Company's AOCI for the defined benefit plans for the year ended December 31, 2016 was primarily attributable to a decrease in the discount rate, partially offset by the performance of plan assets. ($ in thousands) Defined Benefit Plan Supplemental Defined Benefit Plans Year Ended December 31, Year Ended December 31, 2018 2017 2016 2018 2017 2016 Components of net periodic pension (income) expense: Service cost: Benefit accrual $ — $ — $ — $ — $ — $ — Other expenses 650 650 650 — — — Interest cost 947 1,091 1,244 566 631 687 Expected return on plan assets (1,377 ) (1,493 ) (1,675 ) — — — Settlement loss — — — — — — Amortization of: Prior service cost — — — — — — Actuarial loss 371 389 393 310 258 233 Net periodic pension expense $ 591 $ 637 $ 612 $ 876 $ 889 $ 920 Changes in plan assets and benefit obligations included in other comprehensive income (loss): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss (gain) 177 (1,619 ) 175 (789 ) 805 488 Amortization of: Prior service cost — — — — — — Actuarial loss (371 ) (389 ) (393 ) (310 ) (258 ) (233 ) Total recognized in other comprehensive income (loss) $ (194 ) $ (2,008 ) $ (218 ) $ (1,099 ) $ 547 $ 255 Weighted average assumptions used to determine expense: Discount rate 3.50 % 3.90 % 4.20 % 3.50 % 3.90 % 4.20 % Expected return on plan assets 5.90 % 6.25 % 6.50 % * * * Annual rate of salary increase * * * * * * Weighted average assumptions used to determine benefit obligations as of December 31: Discount rate 4.20 % 3.50 % 3.90 % 4.20 % 3.50 % 3.90 % Expected return on plan assets 5.90 % 6.25 % 6.50 % * * * Annual rate of salary increase * * * * * * ____________________ * Not applicable. The discount rates at December 31, 2018 were based on the average yield for long-term, high-grade securities available during the benefit payout period. To set its discount rate, the Company looks to leading indicators, including the Mercer Above Mean Yield Curve. The assumption for the long-term rate of return on plan assets was determined by considering actual investment experience during the lifetime of the plan, balanced with reasonable expectations of future growth considering the various classes of assets and percentage allocation for each asset class. The Company has an investment policy for the defined benefit pension plan that aligns the assets within the plan's trust to an approximate allocation of 50% equity and 50% fixed income funds. Management believes this allocation will produce the targeted long-term rate of return on assets necessary for payment of future benefit obligations, while providing adequate liquidity for payments to current beneficiaries. Assets are reviewed against the defined benefit pension plan's investment policy and the trustee has been directed to adjust invested assets at least quarterly to maintain the target allocation percentages. Fair values of the equity security funds and fixed income funds have been determined from public quotations. The following table presents the fair value hierarchy for the Company's defined benefit pension plan assets, excluding cash held. ($ in thousands) Fair Value Measurements at Reporting Date Using Total Level 1 Level 2 Level 3 December 31, 2018 Asset category Equity security funds (1) United States $ 8,198 $ — $ 8,198 $ — International 2,089 — 2,089 — Fixed income funds 11,003 — 11,003 — Short-term investment funds 800 800 — — Total $ 22,090 $ 800 $ 21,290 $ — December 31, 2017 Asset category Equity security funds (1) United States $ 10,517 $ — $ 10,517 $ — International 2,573 — 2,573 — Fixed income funds 12,165 — 12,165 — Short-term investments funds 588 588 — — Total $ 25,843 $ 588 $ 25,255 $ — ____________________ (1) None of the trust fund assets for the defined benefit pension plan have been invested in shares of HMEC's common stock. There were no Level 3 assets held during the years ended December 31, 2018 and 2017 . In 2019 , the Company expects amortization of net losses of $310 thousand and $256 thousand for the defined benefit plan and the supplemental retirement plans, respectively, and expects no amortization of prior service cost for the supplemental retirement plans to be included in net periodic pension expense. Postretirement Benefits Other than Pensions As of December 31, 2006, upon discontinuation of retiree medical benefits, Health Reimbursement Accounts (HRAs) were established for eligible participants and totaled $7,310 thousand . As of December 31, 2018 , the balance of the previously established HRAs was $1,438 thousand . Funding of HRAs was $88 thousand , $133 thousand and $218 thousand for the years ended December 31, 2018 , 2017 and 2016 , respectively. 2019 Contributions In 2019 , there is no minimum funding requirement for the Company's defined benefit plan. The following table discloses that minimum funding requirement and the expected full year contributions for the Company's plans. ($ in thousands) Defined Benefit Pension Plans Defined Benefit Plan Supplemental Defined Benefit Plans Minimum funding requirement for 2018 $ — N/A Expected contributions (approximations) for the year ended December 31, 2019 as of the time of this Form 10-K (1) — $ 1,307 ____________________ N/A - Not applicable. (1) HMEC's Annual Report on Form 10-K for the year ended December 31, 2018 . Estimated Future Benefit Payments The Company's defined benefit plan may be subject to settlement accounting. Assumptions for both the number of individuals retiring in a calendar year and their elections regarding lump sum distributions are significant factors impacting the payout patterns for each of the plans below. Therefore, actual results could vary from the estimates shown. Estimated future benefit payments as of December 31, 2018 were as follows: ($ in thousands) 2019 2020 2021 2022 2023 2024-2028 Pension plans Defined benefit plan $ 2,668 $ 2,482 $ 2,225 $ 2,346 $ 1,971 $ 8,700 Supplemental retirement plans 1,307 1,292 1,275 1,255 1,232 5,701 |
Contingencies and Commitments
Contingencies and Commitments | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | NOTE 12 - Contingencies and Commitments Lawsuits and Legal Proceedings Companies in the insurance industry have been subject to substantial litigation resulting from claims, disputes and other matters. For instance, they have faced expensive claims, including class action lawsuits, alleging, among other things, improper sales practices and improper claims settlement procedures. Negotiated settlements of certain such actions have had a material adverse effect on many insurance companies. At the time of this Annual Report on Form 10-K, the Company does not have pending litigation from which there is a reasonable possibility of material loss. Assessments for Insolvencies of Unaffiliated Insurance Companies The Company is contingently liable for possible assessments under regulatory requirements pertaining to potential insolvencies of unaffiliated insurance companies. Liabilities, which are established based upon regulatory guidance, have generally been insignificant. Leases The Company has entered into various operating lease agreements, primarily for real estate (claims and marketing offices in a few states) as well as for computer equipment and copier machines. Rental expenses were $2,794 thousand , $2,870 thousand and $2,546 thousand for the years ended December 31, 2018 , 2017 and 2016 , respectively. Future minimum lease payments under leases expiring subsequent to December 31, 2018 are as follows: ($ in thousands) As of December 31, 2018 2019 2020 2021 2022 2023 2024- 2028 2029 and beyond Minimum operating lease payments $ 2,580 $ 1,725 $ 1,200 $ 1,177 $ 483 $ — $ — Investment Commitments From time to time, the Company has outstanding commitments to purchase investments and/or commitments to lend funds under bridge loans. Unfunded commitments to purchase investments were $145,445 thousand and $106,381 thousand for the years ended December 31, 2018 and 2017 |
Supplementary Data on Cash Flow
Supplementary Data on Cash Flows | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplementary Data on Cash Flows | NOTE 13 - Supplementary Data on Cash Flows A reconciliation of net income to net cash provided by operating activities as presented in the Consolidated Statements of Cash Flows is as follows: ($ in thousands) Years Ended December 31, 2018 2017 2016 Cash flows from operating activities Net income $ 18,343 $ 169,459 $ 83,765 Adjustments to reconcile net income to net cash provided by operating activities: Net investment (gains) losses 12,543 3,406 (4,123 ) Increase in accrued investment income 4,449 (3,404 ) (2,208 ) Increase (decrease) in accrued expenses (1,088 ) (2,240 ) 4,378 Depreciation and amortization 7,357 6,615 6,896 Increase in insurance liabilities 197,472 154,061 176,315 Increase in premium receivables (10,026 ) (12,917 ) (11,496 ) Increase in deferred policy acquisition costs (783 ) (7,967 ) (15,859 ) (Increase) decrease in reinsurance recoverables (21,317 ) 11 (481 ) Increase (decrease) in income tax liabilities 5,971 (21,291 ) (1,293 ) Other (12,033 ) (29,147 ) (24,461 ) Total adjustments 182,545 87,127 127,668 Net cash provided by operating activities $ 200,888 $ 256,586 $ 211,433 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | The Company conducts and manages its business through four segments. The three operating segments, representing the major lines of insurance business, are: Property and Casualty, primarily personal lines automobile and property insurance products; Retirement, primarily tax-qualified fixed and variable annuities; and Life, life insurance. The Company does not allocate the impact of corporate-level transactions to these operating segments, consistent with the basis for management's evaluation of the results of those segments, but classifies those items in the fourth segment, Corporate and Other. In addition to ongoing transactions such as corporate debt service, net investment gains (losses) and certain public company expenses, such items also have included corporate debt retirement costs, when applicable. The accounting policies of the segments are the same as those described in Note 1 — Summary of Significant Accounting Policies. The Company accounts for intersegment transactions, primarily the allocation of operating and agency costs from Corporate and Other to Property and Casualty, Retirement and Life, on a direct cost basis. Summarized financial information for these segments is as follows: ($ in thousands) Years Ended December 31, 2018 2017 2016 Insurance premiums and contract charges earned Property and Casualty $ 665,734 $ 648,263 $ 620,514 Retirement 31,269 28,003 24,937 Life 120,330 118,437 113,695 Total $ 817,333 $ 794,703 $ 759,146 Net investment income Property and Casualty $ 40,104 $ 36,178 $ 38,998 Retirement 262,634 261,994 249,410 Life 74,399 76,195 73,567 Corporate and Other 142 78 66 Intersegment eliminations (772 ) (815 ) (855 ) Total $ 376,507 $ 373,630 $ 361,186 Net income (loss) Property and Casualty $ (14,243 ) $ 17,790 $ 25,644 Retirement 41,736 88,473 50,674 Life 18,754 77,595 16,559 Corporate and Other (27,904 ) (14,399 ) (9,112 ) Total $ 18,343 $ 169,459 $ 83,765 ($ in thousands) December 31, 2018 2017 2016 Assets Property and Casualty $ 1,236,362 $ 1,217,394 $ 1,110,958 Retirement 7,866,969 8,063,912 7,449,777 Life 1,821,351 1,815,732 1,912,771 Corporate and Other 149,014 143,784 140,104 Intersegment eliminations (41,800 ) (42,482 ) (36,786 ) Total $ 11,031,896 $ 11,198,340 $ 10,576,824 Additional significant financial information for these segments is as follows: ($ in thousands) Years Ended December 31, 2018 2017 2016 DAC amortization expense Property and Casualty $ 79,073 $ 76,967 $ 74,950 Retirement 23,186 17,759 14,635 Life 7,630 7,459 7,147 Total $ 109,889 $ 102,185 $ 96,732 Income tax expense (benefit) Property and Casualty $ (6,622 ) $ (3,279 ) $ 4,627 Retirement 10,000 (19,498 ) 20,334 Life 4,979 (51,876 ) 9,775 Corporate and Other (7,163 ) (6,119 ) (4,269 ) Total $ 1,194 $ (80,772 ) $ 30,467 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 15 - Acquisitions On October 30, 2018, the Company and Benefit Consultants Group, Inc. (BCG) entered into a Stock Purchase Agreement under which the Company acquired all of the outstanding capital stock of BCG for $25 million . The acquisition was approved by the Company’s Board and closed on January 2, 2019. On December 10, 2018, the Company and NTA Life Enterprises, LLC and Ellard Enterprises, Inc. (collectively, NTA) holding companies and their supplemental insurance subsidiaries entered into a Purchase Agreement under which the Company will acquire all of the equity interests in NTA for $405 million |
Unaudited Selected Quarterly Fi
Unaudited Selected Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Selected Quarterly Financial Data | Selected quarterly financial data is presented below. ($ in thousands, except per share data) Three Months Ended December 31, September 30, June 30, March 31, 2018 Insurance premiums written and contract deposits (1) $ 311,216 $ 338,097 $ 301,722 $ 284,008 Total revenues 278,535 311,318 306,257 295,489 Net income (loss) (20,257 ) 12,528 5,917 20,155 Per share information Basic Net income (loss) $ (0.49 ) $ 0.30 $ 0.14 $ 0.49 Shares of common stock - weighted average (2) 41,596 41,683 41,600 41,497 Diluted Net income (loss) $ (0.49 ) $ 0.30 $ 0.14 $ 0.48 Shares of common stock and equivalent shares - weighted average (2) 41,911 41,850 41,735 41,653 2017 Insurance premiums written and contract deposits (1) $ 300,416 $ 318,355 $ 311,614 $ 296,732 Total revenues 302,993 289,817 291,436 287,304 Net income 125,329 26,551 2,261 15,318 Per share information Basic Net income (3) $ 3.03 $ 0.64 $ 0.05 $ 0.37 Shares of common stock - weighted average (2) 41,419 41,433 41,368 41,135 Diluted Net income (3) $ 3.00 $ 0.64 $ 0.05 $ 0.37 Shares of common stock and equivalent shares - weighted average (2) 41,718 41,575 41,493 41,342 2016 Insurance premiums written and contract deposits (1) $ 315,917 $ 351,534 $ 311,879 $ 283,169 Total revenues 282,873 291,176 283,558 271,303 Net income 19,823 26,923 11,866 25,153 Per share information Basic Net income $ 0.48 $ 0.66 $ 0.29 $ 0.61 Shares of common stock - weighted average (2) 41,093 41,092 41,082 41,297 Diluted Net income $ 0.48 $ 0.65 $ 0.29 $ 0.61 Shares of common stock and equivalent shares - weighted average (2) 41,482 41,347 41,314 41,492 ____________________ (1) This measure is not based on accounting principles generally accepted in the U.S. (non-GAAP). An explanation of this measure is contained in the Glossary of Selected Terms included as an exhibit in the Company's reports filed with the SEC. (2) Rounded to thousands. (3) For the three months ended December 31, 2017, net income per basic share of $3.03 and net income per diluted share of $3.00 benefited $2.39 and $2.37 |
Schedule I Summary of Investmen
Schedule I Summary of Investments-Other Than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Summary of Investments-Other Than Investments in Related Parties | HORACE MANN EDUCATORS CORPORATION SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES December 31, 2018 ($ in thousands) Type of Investments Cost (1) Fair Value Amount Shown in Balance Sheet Fixed maturity securities U.S. Government and federally sponsored agency obligations $ 1,269,767 $ 1,283,622 $ 1,283,622 States, municipalities and political subdivisions 1,884,313 2,003,969 2,003,969 Foreign government bonds 83,343 84,904 84,904 Public utilities 80,355 88,296 88,296 All other corporate bonds 1,956,111 1,973,314 1,973,314 Asset-backed securities 1,320,680 1,314,352 1,314,352 Residential mortgage-backed securities (non-agency) 85,484 85,253 85,253 Commercial mortgage-backed securities 676,218 663,707 663,707 Redeemable preferred stocks 17,640 17,901 17,901 Total fixed maturity securities 7,373,911 7,515,318 7,515,318 Equity securities Industrial, miscellaneous and all other 25,452 25,452 25,452 Banking & finance and insurance companies 9,960 9,960 9,960 Public utilities 1,828 1,828 1,828 Non-redeemable preferred stocks 54,672 54,672 54,672 Closed-end fund 19,838 19,838 19,838 Total equity securities 111,750 111,750 111,750 Limited partnership interests 328,516 XXX 328,516 Short-term investments 122,222 XXX 122,222 Policy loans 153,994 XXX 153,994 Derivative instruments 7,820 $ 2,647 2,647 Mortgage loans 2,730 XXX 2,730 Other 13,500 XXX 13,500 Total investments $ 8,114,443 XXX $ 8,250,677 ____________________ (1) Bonds at original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts and impairment in value of specifically identified investments. |
Schedule II Condensed Financial
Schedule II Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule II Condensed Financial Information of Registrant | HORACE MANN EDUCATORS CORPORATION (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT BALANCE SHEETS As of December 31, 2018 and 2017 ($ in thousands, except share data) December 31, 2018 2017 ASSETS Investments and cash $ 5,255 $ 6,464 Investment in subsidiaries 1,473,538 1,685,390 Other assets 66,138 66,445 Total assets $ 1,544,931 $ 1,758,299 LIABILITIES AND SHAREHOLDERS' EQUITY Long-term debt $ 247,740 $ 247,469 Other liabilities 6,641 9,257 Total liabilities 254,381 256,726 Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued — — Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2018, 65,820,369; 2017, 65,439,245 66 65 Additional paid-in capital 475,109 464,246 Retained earnings 1,216,582 1,231,177 Accumulated other comprehensive income (loss), net of taxes: Net unrealized investment gains on securities 96,941 300,177 Net funded status of benefit plans (12,185 ) (13,217 ) Treasury stock, at cost, 2018, 24,850,484 shares; 2017, 24,721,372 shares (485,963 ) (480,875 ) Total shareholders' equity 1,290,550 1,501,573 Total liabilities and shareholders' equity $ 1,544,931 $ 1,758,299 See accompanying Note to Condensed Financial Statements. See accompanying Report of Independent Registered Public Accounting Firm. HORACE MANN EDUCATORS CORPORATION (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF OPERATIONS ($ in thousands) Year Ended December 31, 2018 2017 2016 Revenues Net investment income $ 100 $ 34 $ 20 Realized investment gains — — — Total revenues 100 34 20 Expenses Interest expense 11,892 11,835 11,808 Other 10,898 5,101 5,631 Total expenses 22,790 16,936 17,439 Loss before income tax benefit and equity in net earnings of subsidiaries (22,690 ) (16,902 ) (17,419 ) Income tax benefit (4,723 ) (6,667 ) (6,076 ) Loss before equity in net earnings of subsidiaries (17,967 ) (10,235 ) (11,343 ) Equity in net earnings of subsidiaries 36,310 179,694 95,108 Net income $ 18,343 $ 169,459 $ 83,765 See accompanying Note to Condensed Financial Statements. See accompanying Report of Independent Registered Public Accounting Firm. HORACE MANN EDUCATORS CORPORATION (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF CASH FLOWS ($ in thousands) Year Ended December 31, 2018 2017 2016 Cash flows - operating activities Interest expense paid $ (11,892 ) $ (11,503 ) $ (11,754 ) Income taxes recovered (paid) (216 ) (373 ) 8,914 Cash dividends received from subsidiaries 61,000 56,900 59,600 Other, net, including settlement of payables to subsidiaries 1,214 4,201 581 Net cash provided by operating activities 50,106 49,225 57,341 Cash flows - investing activities Net increase (decrease) in investments 1,621 (2,338 ) 9,161 Net cash provided by (used in) investing activities 1,621 (2,338 ) 9,161 Cash flows - financing activities Dividends paid to shareholders (46,689 ) (46,114 ) (44,310 ) Acquisition of treasury stock (5,088 ) (1,660 ) (21,513 ) Exercise of stock options 3,627 4,190 3,329 Withholding tax payments on RSUs tendered (3,165 ) (3,245 ) (4,015 ) Net cash used in financing activities (51,315 ) (46,829 ) (66,509 ) Net increase (decrease) in cash 412 58 (7 ) Cash at beginning of period 126 68 75 Cash at end of period $ 538 $ 126 $ 68 See accompanying Note to Condensed Financial Statements. See accompanying Report of Independent Registered Public Accounting Firm. HORACE MANN EDUCATORS CORPORATION (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT NOTE TO CONDENSED FINANCIAL STATEMENTS |
Schedule III and VI Supplementa
Schedule III and VI Supplementary Insurance Information Supplemental Information Concerning Property and Casualty Insurance Operations | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters [Abstract] | |
Schedule III and VI Supplementary Insurance Information Supplemental Information Concerning Property and Casualty Insurance Operations | HORACE MANN EDUCATORS CORPORATION SCHEDULE III: SUPPLEMENTARY INSURANCE INFORMATION SCHEDULE VI: SUPPLEMENTAL INFORMATION CONCERNING PROPERTY AND CASUALTY INSURANCE OPERATIONS ($ in thousands) Column identification for Schedule III: A B C D E F G H I J K Schedule VI: A B C D E F G H I J K Deferred policy acquisition costs Future policy Discount, if any, deducted in previous column Unearned premiums Other policy claims and benefits payable Premium revenue/ premium earned Net investment income Benefits, claims and settlement expenses Claims and claim adjustment expenses incurred related to Amortization of deferred policy acquisition costs Other operating expenses Paid claims and claim adjustment expenses Premiums written Segment Current year Prior years Year Ended December 31, 2018 Property and Casualty $ 30,033 $ 367,180 $ 0 $ 274,351 $ — $ 665,734 $ 40,104 $ 547,659 $ 547,959 $ (300 ) $ 79,073 $ 101,834 $ 531,977 $ 681,583 Retirement 209,232 4,573,170 xxx 704 764,607 31,269 262,634 168,732 xxx xxx 23,186 57,269 xxx xxx Life 59,477 1,167,557 xxx 1,170 3,381 120,330 74,399 127,368 xxx xxx 7,630 36,314 xxx xxx Other, including consolidating eliminations N/A N/A xxx N/A N/A N/A (630 ) N/A xxx xxx N/A 22,997 xxx xxx Total $ 298,742 $ 6,107,907 xxx $ 276,225 $ 767,988 $ 817,333 $ 376,507 $ 843,759 xxx xxx $ 109,889 $ 218,414 xxx xxx Year Ended December 31, 2017 Property and Casualty $ 29,191 $ 319,182 $ 0 $ 258,502 $ — $ 648,263 $ 36,178 $ 496,289 $ 498,989 $ (2,700 ) $ 76,967 $ 96,488 $ 481,074 $ 662,760 Retirement 174,661 4,466,039 xxx 705 720,926 28,003 261,994 159,385 xxx xxx 17,759 49,733 xxx xxx Life 53,974 1,136,263 xxx 1,332 3,335 118,437 76,195 125,267 xxx xxx 7,459 36,550 xxx xxx Other, including consolidating eliminations N/A N/A xxx N/A N/A N/A (737 ) N/A xxx xxx N/A 16,966 xxx xxx Total $ 257,826 $ 5,921,484 xxx $ 260,539 $ 724,261 $ 794,703 $ 373,630 $ 780,941 xxx xxx $ 102,185 $ 199,737 xxx xxx Year Ended December 31, 2016 Property and Casualty $ 27,604 $ 307,757 $ 0 $ 244,005 $ — $ 620,514 $ 38,997 $ 464,098 $ 471,098 $ (7,000 ) $ 74,950 $ 90,802 $ 468,778 $ 634,319 Retirement 188,117 4,372,062 xxx 671 705,603 24,937 249,410 151,185 xxx xxx 14,635 40,289 xxx xxx Life 51,859 1,098,038 xxx 1,598 3,347 113,695 73,567 117,743 xxx xxx 7,147 36,806 xxx xxx Other, including consolidating eliminations N/A N/A xxx N/A N/A N/A (788 ) N/A xxx xxx N/A 17,023 xxx xxx Total $ 267,580 $ 5,777,857 xxx $ 246,274 $ 708,950 $ 759,146 $ 361,186 $ 733,026 xxx xxx $ 96,732 $ 184,920 xxx xxx ____________________ N/A - Not applicable. |
Schedule IV Reinsurance
Schedule IV Reinsurance | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
Schedule IV Reinsurance | HORACE MANN EDUCATORS CORPORATION REINSURANCE ($ in thousands) Column A Column B Column C Column D Column E Column F Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Percentage of Amount Assumed to Net Year Ended December 31, 2018 Life insurance in force $ 18,277,691 $ 4,505,208 $ — $ 13,772,483 — Premiums Property and Casualty $ 682,478 $ 21,767 $ 5,023 $ 665,734 0.8 % Retirement 31,269 — — 31,269 — Life 127,400 7,070 — 120,330 — Total premiums $ 841,147 $ 28,837 $ 5,023 $ 817,333 0.6 % Year Ended December 31, 2017 Life insurance in force $ 17,564,270 $ 4,295,412 $ — $ 13,268,858 — Premiums Property and Casualty $ 658,960 $ 15,337 $ 4,640 $ 648,263 0.7 % Retirement 28,003 — — 28,003 — Life 125,136 6,699 — 118,437 — Total premiums $ 812,099 $ 22,036 $ 4,640 $ 794,703 0.6 % Year Ended December 31, 2016 Life insurance in force $ 17,025,125 $ 4,065,449 $ — $ 12,959,676 — Premiums Property and Casualty $ 632,372 $ 16,179 $ 4,321 $ 620,514 0.7 % Retirement 24,937 — — 24,937 — Life 120,342 6,647 — 113,695 — Total premiums $ 777,651 $ 22,826 $ 4,321 $ 759,146 0.6 % ____________________ Note: Premiums above include insurance premiums earned and contract charges earned. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (1) the reported amounts of assets and liabilities, (2) disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and (3) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company has reclassified the presentation of certain prior period information to conform to the current year's presentation. The consolidated financial statements include the accounts of Horace Mann Educators Corporation and its wholly-owned subsidiaries (HMEC; and together with its subsidiaries, the Company or Horace Mann). HMEC and its subsidiaries have common management, share office facilities and are parties to intercompany service agreements for management, administrative, utilization of personnel, financial, investment advisory, underwriting, claims adjusting, agency and data processing services. Under these agreements, costs have been allocated among the companies in conformity with GAAP. In addition, certain of the subsidiaries have entered into intercompany reinsurance agreements. HMEC and its subsidiaries file a consolidated federal income tax return, and there are related tax sharing agreements. All significant intercompany balances and transactions have been eliminated in consolidation. The subsidiaries of HMEC market and underwrite personal lines of property and casualty insurance products (primarily personal lines automobile and property insurance), retirement products (primarily tax-qualified annuities) and life insurance, primarily to K-12 teachers, administrators and other employees of public schools and their families. HMEC's principal operating subsidiaries are Horace Mann Life Insurance Company, Horace Mann Insurance Company, Teachers Insurance Company, Horace Mann Property & Casualty Insurance Company and Horace Mann Lloyds. |
Investments | Investments The Company invests predominantly in fixed maturity securities. This category includes primarily bonds and notes, but also includes redeemable preferred stocks. These securities are classified as available for sale and carried at fair value. An adjustment for net unrealized investment gains (losses) on all securities available for sale and carried at fair value, is recognized as a separate component of accumulated other comprehensive income (AOCI) within shareholders' equity, net of applicable deferred taxes and the related impact on deferred policy acquisition costs (DAC) associated with annuity contracts and life insurance products with account values that would have occurred if the securities had been sold at their aggregate fair value and the proceeds reinvested at current yields. Beginning January 1, 2018, equity securities are carried at fair value with changes in fair value recognized as Net investment gains (losses). This category includes nonredeemable preferred stocks and common stocks. Limited partnership interests include investments in private equity funds, real estate funds and other funds. All investments in limited partnership interests are accounted for in accordance with the equity method of accounting. Short-term and other investments are comprised of short-term fixed maturity securities, generally carried at cost which approximates fair value; derivative instruments (all call options), carried at fair value; policy loans, carried at unpaid principal balances; mortgage loans, carried at unpaid principal balances; and restricted Federal Home Loan Bank (FHLB) membership and activity stocks, carried at redemption value which approximates fair value. The Company invests in fixed maturity securities and alternative investment funds that could qualify as variable interest entities, including corporate securities, mortgage-backed securities and asset-backed securities. Such securities have been reviewed and determined not to be subject to consolidation as the Company is not the primary beneficiary of these securities because it does not have the power to direct the activities that most significantly impact the entities' economic performance. Investment income is recognized as earned. Investment income reflects amortization of premiums and accrual of discounts on an effective-yield basis. |
Other-than-temporary Impairment | Other-than-temporary Impairment The Company's methodology of assessing other-than-temporary impairments (OTTI) for fixed maturity securities is based on security-specific facts and circumstances as of the reporting date. Based on these facts, if (1) the Company has the intent to sell the security, (2) it is more likely than not the Company will be required to sell the security before the anticipated recovery of the amortized cost basis, or (3) management does not expect to recover the entire amortized cost basis of the security, an OTTI is considered to have occurred. Additionally, if events become known that call into question whether the security issuer has the ability to honor its contractual commitments, such security holding will be evaluated to determine whether or not such security has suffered an other-than-temporary decline in fair value. The Company has a policy and process to evaluate fixed maturity securities (at the cusip/issuer level) on a quarterly basis to assess whether there has been OTTI. These reviews, in conjunction with the Company's investment managers' monthly credit reports and relevant factors such as (1) the financial condition and near-term prospects of the issuer, (2) the length of time and extent to which the fair value has been less than the amortized cost basis (3) the Company's intent to sell a security or whether it is more likely than not the Company will be required to sell the security before the anticipated recovery of the amortized cost basis, (4) the market leadership position of the issuer, (5) the debt ratings of the issuer, and (6) the cash flows and liquidity of the issuer or the underlying cash flows for asset-backed securities, are all considered in the impairment assessment. When OTTI is deemed to have occurred, the investment is written-down to fair value at the trade lot level and the credit-related loss portion is recognized as a net investment loss during the period. The amount of total OTTI related to non-credit factors for fixed maturity securities is recognized in other comprehensive income (OCI), net of applicable taxes, in which the Company has the intent to sell the security or if it is more likely than not the Company will be required to sell the security before the anticipated recovery of the amortized cost basis. With respect to fixed maturity securities involving securitized financial assets — primarily asset-backed and commercial mortgage-backed securities in the Company's portfolio — the securitized financial asset securities' underlying collateral cash flows are stress tested to determine if there has been any adverse change in the expected future cash flows. A decline in fair value below the amortized cost basis is not assumed to be other-than-temporary for fixed maturity securities with unrealized losses due to spread widening, market illiquidity or changes in interest rates where there exists a reasonable expectation based on the Company's consideration of all objective information available that the Company will recover the entire amortized cost basis of the security and the Company does not have the intent to sell the security before maturity or a market recovery is realized and it is more likely than not the Company will not be required to sell the security. OTTI loss will be recognized based upon all relevant facts and circumstances for each investment, as appropriate. Additional considerations for certain types of securities include the following: Corporate Fixed Maturity Securities Judgments regarding whether a corporate fixed maturity security is other-than-temporarily impaired include analyzing the issuer's financial condition and whether there has been a decline in the issuer's ability to service the specific security. The analysis of the security issuer is based on asset coverage, cash flow multiples or other industry standards. Several factors assessed include, but are not limited to, credit quality ratings, cash flow sustainability, liquidity, financial strength, industry and market position. Sources of information include, but are not limited to, management projections, independent consultants, external analysts' research, peer analysis and the Company's internal analysis. If the Company has concerns regarding the viability of the issuer or its ability to service the specific security after this assessment, a cash flow analysis is prepared to determine if the present value of future cash flows has declined below the amortized cost basis of the fixed maturity security. This analysis to determine an estimate of ultimate recovery value is combined with the estimated timing to recovery and any other applicable cash flows that are expected. If a cash flow analysis estimate is not feasible, then the market's view of cash flows implied by the period end fair value, market discount rates and effective yield are the primary factors used to estimate an ultimate recovery value. Mortgage-Backed Securities Not Issued By the U.S. Government or Federally Sponsored Agencies The Company uses an estimate of future cash flows expected to be collected to evaluate its mortgage-backed securities for OTTI. The determination of cash flow estimates is inherently subjective and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable assumptions and forecasts, are considered when developing the estimate of future cash flows expected to be collected. Information includes, but is not limited to, debt-servicing, missed refinancing opportunities and geography. Loan level characteristics such as issuer, FICO score, payment terms, level of documentation, property or residency type, and economic outlook are also utilized in financial models, along with historical performance, to estimate or measure the loan's propensity to default. Additionally, financial models take into account loan age, lease rollovers, rent volatilities, vacancy rates and exposure to refinancing as additional drivers of default. For transactions where loan level data is not available, financial models use a proxy that is based on the collateral characteristics. Loss severity is a function of multiple factors including, but not limited to, the unpaid balance, interest rate, mortgage insurance ratios, assessed property value at origination, change in property valuation and loan-to-value ratio at origination. Prepayment speeds, both actual and estimated, cost of capital rates and debt service ratios are also considered. The cash flows generated by the collateral securing these securities are then estimated with these default, loss severity and prepayment assumptions. These collateral cash flows are then utilized, along with consideration for the issuer's position in the overall structure, to estimate the future cash flows associated with the residential or commercial mortgage-backed security held by the Company. Municipal Bonds The Company's municipal bond portfolio consists primarily of special revenue bonds, which present unique considerations in evaluating OTTI, but also includes general obligation bonds. The Company evaluates special revenue bonds for OTTI based on guarantees associated with the repayment from revenues generated by the specified revenue-generating activity associated with the purpose of the bonds. Judgments regarding whether a municipal bond is other-than-temporarily impaired include analyzing the issuer's financial condition and whether there has been a decline in the overall financial condition of the issuer or its ability to service the specific security. Security credit ratings are reviewed with emphasis on the economy, finances, debt and management of the municipal issuer. Certain securities may be guaranteed by the mono-line credit insurers or other forms of guarantee. While not relied upon in the initial security purchase decision, insurance benefits are considered in the assessments for OTTI, including the credit-worthiness of the guarantor. Municipalities possess unique powers, along with a special legal standing and protections, that enable them to act quickly to restore budgetary balance and fiscal integrity. These powers include the sovereign power to tax, access to one-time revenue sources, capacity to issue or restructure debt, and ability to shift spending to other authorities. State governments often provide secondary support to local governments in times of financial stress and the federal government has provided assistance to state governments during recessions. If the Company has concerns regarding the viability of the municipal issuer or its ability to service the specific security after this analysis, a cash flow analysis is prepared to determine a present value and whether it has declined below the amortized cost basis of the security. If a cash flow analysis is not feasible, then the market's view of the period end fair value, market discount rates and effective yield are the primary factors used to estimate the present value. Credit Losses The Company estimates the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost basis and the present value of the expected future cash flows of the security. The present value is determined using the best estimate of cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs The Company's DAC by reporting segment was as follows: ($ in thousands) December 31, 2018 2017 Retirement (annuity) $ 209,231 $ 174,661 Life 59,478 53,974 Property and Casualty 30,033 29,191 Total $ 298,742 $ 257,826 DAC consists of commissions, policy issuance and other costs which are incremental and directly related to the successful acquisition of new or renewal business, which are deferred and amortized on a basis consistent with the type of insurance coverage. For all investment (annuity) contracts, DAC is amortized over 20 years in proportion to estimated gross profits. DAC is amortized in proportion to estimated gross profits over 20 years for certain life insurance products with account values and over 30 years for indexed universal life (IUL) contracts. For other individual life contracts, DAC is amortized in proportion to anticipated premiums over the terms of the insurance policies ( 10 , 15 , 20 , 30 years). For property and casualty policies, DAC is amortized over the terms of the insurance policies ( 6 or 12 months). The Company periodically reviews the assumptions and estimates used in DAC and also periodically reviews its estimations of gross profits, a process sometimes referred to as "unlocking". The most significant assumptions that are involved in the estimation of annuity gross profits include interest rate spreads, future financial market performance, business surrender/lapse rates, expenses and the impact of net investment gains (losses) on fixed maturity and equity securities. For the variable deposit portion of Retirement, the Company amortizes DAC utilizing a future financial market performance assumption of a 8% reversion to the mean approach with a 200 basis point corridor around the mean during the reversion period, representing a cap and a floor on the Company's long-term assumption. The Company's practice with regard to future financial market performance assumes that long-term appreciation in the financial markets is not changed by short-term market fluctuations, but is only changed when sustained deviations are experienced. The Company monitors these fluctuations and only changes the assumption when long-term expectations change. The most significant assumptions that are involved in the estimation of life insurance gross profits include interest rates expected to be received on investments, business persistency, and mortality. Conversions from term to permanent insurance cause an immediate write down of the associated DAC. The impact on amortization due to assumption changes has an immaterial impact on the results of operations. In the event actual experience differs significantly from assumptions or assumptions are significantly revised, the Company may be required to recognize a material charge or credit to current period amortization expense for the period in which the adjustment is made. The Company recognized the following adjustments to amortization expense as a result of evaluating actual experience and prospective assumptions, the impact of unlocking: ($ in thousands) Year Ended December 31, 2018 2017 2016 Increase (decrease) to DAC amortization expense: Retirement $ 3,948 $ 1,081 $ (313 ) Life 283 (200 ) (394 ) Total $ 4,231 $ 881 $ (707 ) DAC for investment contracts and life insurance products with account values are adjusted for the impact on estimated future gross profits as if net unrealized investment gains (losses) on securities had been realized at the reporting date. This adjustment reduced DAC by $17,862 thousand and $57,995 thousand at December 31, 2018 and 2017 , respectively. The after tax impact of this adjustment is included in AOCI (net unrealized investment gains (losses) on securities) within shareholders' equity. DAC is reviewed for recoverability from future income, including net investment income, and costs which are deemed unrecoverable are expensed in the period in which the determination is made. No such costs were deemed unrecoverable during the years ended December 31, 2018 , 2017 and 2016 |
Goodwill | Goodwill When the Company was acquired in 1989, intangible assets were recognized as goodwill in the application of purchase accounting. In addition, goodwill was recognized in 1994 related to the purchase of Horace Mann Property & Casualty Insurance Company. Goodwill represents the excess of the amounts paid to acquire a business over the fair value of its net assets at the date of acquisition. Goodwill is not amortized, but is tested for impairment at the reporting unit level at least annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. A reporting unit is defined as an operating segment or a business unit one level below an operating segment, if separate financial information is prepared and regularly reviewed by management at that level. The Company's reporting units, for which goodwill has been allocated, are equivalent to the Company's operating segments. The allocation of goodwill by reporting unit is as follows: ($ in thousands) Retirement $ 28,025 Life 9,911 Property and Casualty 9,460 Total $ 47,396 The goodwill impairment test, as defined in GAAP, allows an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity follows a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, the second step of the impairment test is performed for purposes of confirming and measuring the impairment. In the second step, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit to determine an implied goodwill value. If the carrying amount of the reporting unit goodwill exceeds the implied goodwill value, an impairment loss would be recognized in an amount equal to that excess. Any amount of goodwill determined to be impaired will be recognized as an expense in the period in which the impairment determination is made. The Company completed its annual goodwill assessment for the individual reporting units as of October 1, 2018 and did not utilize the option to perform an initial assessment of qualitative factors. The first step of the Company's analysis indicated that fair value exceeded the carrying amount for all reporting units. The process of evaluating goodwill for impairment required management to make multiple judgments and assumptions to determine the fair value of each reporting unit, including discounted cash flow calculations, the level of the Company's own share price and assumptions that market participants would make in valuing each reporting unit. Fair value estimates were based primarily on an in-depth analysis of historical experience, projected future cash flows and relevant discount rates, which considered market participant inputs and the relative risk associated with the projected cash flows. Other assumptions included levels of economic capital, future business growth, earnings projections and assets under management for each reporting unit. Estimates of fair value are subject to assumptions that are sensitive to change and represent the Company's reasonable expectation regarding future developments. The Company also considered other valuation techniques such as peer company price-to-earnings and price-to-book multiples. As part of the Company's October 1, 2018 goodwill analysis, the Company compared the fair value of the aggregated reporting units to the market capitalization of the Company. The difference between the aggregated fair value of the reporting units and the market capitalization of the Company was attributed to several factors, most notably market sentiment, trading volume and transaction premium. The amount of the transaction premium was determined to be reasonable based on insurance industry and Company-specific facts and circumstances. There were no other events or material changes in circumstances during 2018 that indicated that a material change in the fair value of the Company's reporting units had occurred. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost less accumulated depreciation, which is calculated using the straight-line method based on the estimated useful lives of the assets. The estimated life for real estate is identified by specific property and ranges from 20 to 45 years. The estimated useful lives of leasehold improvements and other property and equipment, including capitalized software, generally range from 3 to 10 years. The following amounts are included in Other assets in the Consolidated Balance Sheets: ($ in thousands) December 31, 2018 2017 Property and equipment $ 142,243 $ 133,803 Less: accumulated depreciation 101,267 94,862 Total $ 40,976 $ 38,941 |
Separate Account (Variable Annuity) Assets and Liabilities | Separate Account (Variable Annuity) Assets and Liabilities |
Investment Contract and Life Policy Reserves | Investment Contract and Life Policy Reserves This table summarizes the Company's investment contract and life policy reserves. ($ in thousands) December 31, 2018 2017 Investment contract reserves $ 4,555,856 $ 4,452,972 Life policy reserves 1,155,337 1,120,763 Total $ 5,711,193 $ 5,573,735 Liabilities for future benefits on life and annuity policies are established in amounts adequate to meet the estimated future obligations on policies in force. Liabilities for future policy benefits on certain life insurance policies are computed using the net level premium method including assumptions as to investment yields, mortality, persistency, expenses and other assumptions based on the Company's experience, including a provision for adverse deviation. These assumptions are established at the time the policy is issued and are intended to estimate the experience for the period the policy benefits are payable. If experience is less favorable than the assumptions, additional liabilities may be established, resulting in recognition of a loss for that period. At December 31, 2018 , reserve investment yield assumptions ranged from 3.5% to 8.0% . Liabilities for future benefits on annuity contracts and certain long-duration life insurance contracts are carried at accumulated policyholder values without reduction for potential surrender or withdrawal charges. The liability also includes provisions for the unearned portion of certain policy charges. A guaranteed minimum death benefit (GMDB) generally provides an additional benefit if the contractholder dies and the variable annuity contract value is less than a contractually defined amount. The Company has estimated and recorded a GMDB reserve on variable annuity contracts in accordance with GAAP. Contractually defined amounts vary from contract to contract based on the date the contract was entered into as well as the GMDB feature elected by the contractholder. The Company regularly monitors the GMDB reserve considering fluctuations in financial markets. The Company has a relatively low exposure to GMDB risk as shown below. ($ in thousands) December 31, 2018 2017 GMDB reserve $ 258 $ 152 Aggregate in-the-money death benefits under the GMDB provision 48,083 28,345 Variable annuity contract value distribution based on GMDB feature: No guarantee 30 % 29 % Return of premium guarantee 65 % 65 % Guarantee of premium roll-up at an annual rate of 3% or 5% 5 % 6 % Total 100 % 100 % |
Reserves for Fixed Indexed Annuities and Indexed Universal Life Policies | Reserves for Fixed Indexed Annuities and Indexed Universal Life Policies The Company offers fixed indexed annuity (FIA) products with interest crediting strategies linked to the Standard & Poor's (S&P) 500 Index and the Dow Jones Industrial Average (DJIA). The Company purchases call options on the applicable indices as an investment to provide the income needed to fund the annual index credits on the indexed products. These products are deferred fixed annuities with a guaranteed minimum interest rate plus a contingent return based on equity market performance and are considered hybrid financial instruments under GAAP. The Company elected to not use hedge accounting for derivative transactions related to the FIA products. As a result, the Company accounts for the purchased call options and the embedded derivative related to the provision of a contingent return at fair value, with changes in fair value recognized as Net investment gains (losses) in the Consolidated Statements of Operations. The embedded derivative is bifurcated from the host contract and included in Other policyholder funds in the Consolidated Balance Sheets. The host contract is accounted for as a debt instrument in accordance with GAAP and is included in Investment contract and life policy reserves in the Consolidated Balance Sheets with any discount to the minimum account value being accreted using the effective yield method. In the Consolidated Statements of Operations, accreted interest for FIA products and benefit claims on these products incurred during the reporting period are included in Benefits, claims and settlement expenses. The Company offers indexed universal life (IUL) products as part of its product portfolio with interest crediting strategies linked to the S&P 500 Index and the DJIA as well as a fixed option. The Company purchases call options monthly to economically hedge the potential liabilities arising in IUL accounts. The Company elected to not use hedge accounting for derivative transactions related to the IUL products. As a result, the Company records the purchased call options and the embedded derivative related to the provision of a contingent return at fair value, with changes in fair value reported in Net investment gains (losses) in the Consolidated Statements of Operations. IUL policies with a balance in one or more indexed accounts are considered to have an embedded derivative. The benefit reserve for the host contract is measured using the retrospective deposit method, which for Horace Mann's IUL product is equal to the account balance. The embedded derivative is bifurcated from the host contract, carried at fair value, and included in Investment contract and life policy reserves in the Consolidated Balance Sheets. |
Unpaid Claims and Claim Expenses | Unpaid Claims and Claim Expenses |
Other Policyholder Funds | Other Policyholder Funds Other policyholder funds includes supplementary contracts without life contingencies and dividend accumulations, as well as balances outstanding under funding agreements with FHLB and embedded derivatives related to FIA products. Except for embedded derivatives, each of these components is carried at cost. Embedded derivatives are carried at fair value. Amounts received and repaid under FHLB funding agreements are classified as financing activities in the Company's Consolidated Statements of Cash Flows combined with annuity contract deposits and disbursements, respectively. FHLB Funding Agreements One of the Company's subsidiaries, Horace Mann Life Insurance Company (HMLIC), is a member of FHLB, which provides HMLIC with access to collateralized borrowings and other FHLB products. Any borrowing from FHLB requires the purchase of FHLB activity-based common stock in an amount equal to 4.5% of the borrowing, or a lower percentage — such as 2.0% based on the Reduced Capitalization Advance Program. For FHLB advances and funding agreements combined, HMEC's Board of Directors (Board) has authorized a maximum amount equal to 10% of HMLIC's admitted assets using prescribed statutory accounting principles. On November 11, 2018, the Company received an additional $50,000 thousand under a funding agreement for HMLIC. For the total $625,000 thousand received, $250,000 thousand matures on September 13, 2019, $125,000 thousand matures on December 15, 2023, $200,000 thousand matures on January 16, 2026 and the remaining $50,000 thousand matures on November 15, 2023. Interest on the funding agreements accrues at an annual weighted average rate of 2.47% as of December 31, 2018 . HMLIC's FHLB funding agreements of $625,000 thousand |
Insurance Premiums and Contract Charges Earned | Insurance Premiums and Contract Charges Earned Property and Casualty insurance premiums are recognized as revenue ratably over the related contract periods in proportion to the risks insured. The unexpired portions of these Property and Casualty premiums are recorded as unearned premiums, using the monthly pro rata method. |
Share-Based Compensation | Share-Based Compensation The Company grants stock options and both service-based and performance-based restricted common stock units (RSUs) to executive officers, other employees and Directors in an effort to attract and retain individuals while also aligning compensation with the interests of the Company's shareholders. Additional information regarding the Company's share-based compensation plans is contained in Note 9. Stock options are accounted for under the fair value method of accounting using a Black-Scholes valuation model to measure stock option expense at the date of grant. The fair value of RSUs is measured at the market price of the Company's common stock on the date of grant, with the exception of market-based performance awards, for which the Company uses a Monte Carlo simulation model to determine fair value for purposes of measuring RSU expense. For the years ended December 31, 2018 , 2017 and 2016 , the Company recognized $1,217 thousand , $1,347 thousand , and $1,207 thousand , respectively, of stock option expense as a result of the vesting of stock options during the respective periods. For the years ended December 31, 2018 , 2017 and 2016 , the Company recognized $6,638 thousand , $6,459 thousand and $6,929 thousand , respectively, in RSU expense as a result of the performance and/or vesting of RSUs during the respective periods. In 2018 , 2017 and 2016 , the Company granted stock options as quantified in the table below, which also provides the weighted average grant date fair value for stock options granted in each year. The fair value of stock options granted was estimated on the respective dates of grant using the Black-Scholes option pricing model with the weighted average assumptions shown in the following table. Year Ended December 31, 2018 2017 2016 Number of stock options granted 223,208 222,828 307,176 Weighted average grant date fair value of stock options granted $ 7.16 $ 6.57 $ 5.01 Weighted average assumptions: Risk-free interest rate 2.6 % 2.0 % 1.3 % Expected dividend yield 2.6 % 2.5 % 3.2 % Expected life, in years 4.8 4.9 4.9 Expected volatility (based on historical volatility) 21.5 % 21.4 % 25.6 % The weighted average fair value of nonvested stock options outstanding on December 31, 2018 was $6.65 . Total unrecognized compensation expense relating to the nonvested stock options outstanding as of December 31, 2018 was approximately $2,348 thousand . This amount will be recognized as expense over the remainder of the vesting period, which is scheduled to be 2019 through 2022. Expense is reflected on a straight-line basis over the vesting period for the entire award. Forfeitures of unvested amounts due to terminations and/or early retirements are recognized as a reduction to the related expenses. Total unrecognized compensation expense relating to RSUs outstanding as of December 31, 2018 was approximately $5,747 thousand |
Income Taxes | Income Taxes The Company uses the asset and liability method for calculating deferred federal income taxes. Income tax provisions are generally based on income reported for financial statement purposes. The provisions for federal income taxes for the years ended December 31, 2018 , 2017 and 2016 included amounts currently payable and deferred income taxes resulting from the cumulative differences in the Company's assets and liabilities, determined on a tax return versus financial statement basis. Deferred tax assets and liabilities include provisions for net unrealized investment gains (losses) on securities as well as the net funded status of benefit plans with the changes for each period included in the respective components of AOCI within shareholders' equity. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed based on the weighted average number of common shares outstanding plus the weighted average number of fully vested RSUs and common stock units (CSUs) payable as shares of HMEC common stock. Diluted earnings per share is computed based on the weighted average number of common shares and common stock equivalents outstanding, to the extent dilutive. The Company's common stock equivalents relate to outstanding common stock options, deferred compensation CSUs and incentive compensation RSUs, which are described in Note 9. The computations of net income per share on both basic and diluted bases, including reconciliations of the numerators and denominators, were as follows: ($ in thousands) Year Ended December 31, 2018 2017 2016 Basic: Net income for the period $ 18,343 $ 169,459 $ 83,765 Weighted average number of common shares during the period (in thousands) 41,570 41,365 41,158 Net income per share - basic $ 0.44 $ 4.10 $ 2.04 Diluted: Net income for the period $ 18,343 $ 169,459 $ 83,765 Weighted average number of common shares during the period (in thousands) 41,570 41,365 41,158 Weighted average number of common equivalent shares to reflect the dilutive effect of common stock equivalent securities (in thousands): Stock options 100 112 100 CSUs related to deferred compensation for employees 25 25 52 RSUs related to incentive compensation 199 63 166 Total common and common equivalent shares adjusted to calculate diluted earnings per share (in thousands) 41,894 41,565 41,476 Net income per share - diluted $ 0.44 $ 4.08 $ 2.02 Options to purchase 410,644 shares of common stock at $41.95 to $44.75 per share were granted in 2017 and 2018 but were not included in the computation of 2018 diluted earnings per share because of their anti-dilutive effect. These options, which expire in 2027 and 2028, were still outstanding at December 31, 2018 |
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) Comprehensive income (loss) represents the change in shareholders' equity during a reporting period from transactions and other events and circumstances from non-shareholder sources. For the Company, comprehensive income (loss) is equal to net income plus or minus the after tax change in net unrealized investment gains (losses) on securities and the after tax change in net funded status of benefit plans for the periods as shown in the Consolidated Statements of Changes in Shareholders' Equity. AOCI represents the accumulated change in shareholders' equity from these transactions and other events and circumstances from non-shareholder sources as shown in the Consolidated Balance Sheets. In the Consolidated Balance Sheets, the Company recognizes the net funded status of benefit plans as a component of AOCI, net of tax. Comprehensive Income (Loss) The components of comprehensive income (loss) were as follows: ($ in thousands) Year Ended December 31, 2018 2017 2016 Net income $ 18,343 $ 169,459 $ 83,765 Other comprehensive income (loss): Change in net unrealized investment gains (losses) on securities: Net unrealized investment gains (losses) on securities arising during the period (275,094 ) 105,475 6,144 Less: reclassification adjustment for net gains (losses) included in income before income tax (16,363 ) (4,863 ) 5,176 Total, before tax (258,731 ) 110,338 968 Income tax expense (benefit) (55,495 ) 35,933 397 Total, net of tax (203,236 ) 74,405 571 Change in net funded status of benefit plans: Before tax 1,294 1,461 (37 ) Income tax expense (benefit) 262 727 (14 ) Total, net of tax 1,032 734 (23 ) Total comprehensive income (loss) $ (183,861 ) $ 244,598 $ 84,313 Accumulated Other Comprehensive Income (Loss) The following table reconciles the components of AOCI for the periods indicated. ($ in thousands) Net Unrealized Investment Gains (Losses) on Securities (1)(2) Net Funded Status of Benefit Plans (1) Total (1)(3) Beginning balance, January 1, 2018 $ 300,177 $ (13,217 ) $ 286,960 Other comprehensive income (loss) before reclassifications (201,122 ) 1,032 (200,090 ) Amounts reclassified from AOCI 12,927 — 12,927 Cumulative effect of change in accounting principle (4) (15,041 ) — (15,041 ) Net current period other comprehensive income (loss) (203,236 ) 1,032 (202,204 ) Ending balance, December 31, 2018 $ 96,941 $ (12,185 ) $ 84,756 Beginning balance, January 1, 2017 $ 175,738 $ (11,817 ) $ 163,921 Other comprehensive income (loss) before reclassifications 71,244 734 71,978 Amounts reclassified from AOCI 3,161 — 3,161 Reclassification of deferred taxes (3) 50,034 (2,134 ) 47,900 Net current period other comprehensive income (loss) 124,439 (1,400 ) 123,039 Ending balance, December 31, 2017 $ 300,177 $ (13,217 ) $ 286,960 Beginning balance, January 1, 2016 $ 175,167 $ (11,794 ) $ 163,373 Other comprehensive income (loss) before reclassifications 3,935 (23 ) 3,912 Amounts reclassified from AOCI (3,364 ) — (3,364 ) Net current period other comprehensive income (loss) 571 (23 ) 548 Ending balance, December 31, 2016 $ 175,738 $ (11,817 ) $ 163,921 ___________________ (1) All amounts are net of tax. (2) The pretax amounts reclassified from AOCI, $(16,363) thousand , $(4,863) thousand and $5,176 thousand , are included in net investment gains (losses) and the related tax expenses, $(3,436) thousand , $(1,702) thousand and $1,812 thousand , are included in income tax expense in the Consolidated Statements of Operations for the years ended December 31, 2018 , 2017 and 2016 , respectively. (3) For the period ended December 31, 2017, deferred taxes attributable to net unrealized investment gains (losses) on fixed maturity and equity securities and Defined benefit plans were re-measured as a result of the enactment of the Tax Cuts and Jobs Act (Tax Act). ASC 740, Income Taxes, requires that the income tax effect from the deferred tax re-measurement be reflected in the Company’s income tax expense, even if the deferred taxes being re-measured were originally established through AOCI. The mismatch between deferred taxes established in AOCI at 35% and re-measuring these same deferred taxes at 21% through income tax expense results in stranded deferred taxes in AOCI. On February 14, 2018, the Financial Accounting Standards Board (FASB) issued accounting guidance that permits recognition of a reclassification adjustment between AOCI and Retained earnings for stranded deferred tax amounts related to the reduced corporate tax rate enacted under the Tax Act. As permitted under its provisions, the Company early adopted the accounting guidance effective for the quarterly period that ended December 31, 2017 and has elected to reclassify the stranded deferred tax amounts. The impact from early adoption resulted in an increase to AOCI and a reduction to Retained earnings of approximately $47,900 thousand ; representing the stranded deferred tax liabilities of $50,034 thousand and $(2,134) thousand for net unrealized investment gains (losses) on fixed maturity and equity securities and Defined benefit plans, respectively. (4) The Company adopted guidance on January 1, 2018 that resulted in reclassifying $15,041 thousand of after tax net unrealized gains on equity securities from AOCI to Retained earnings. |
Statements of Cash Flows | Statements of Cash Flows |
Adopted and Pending Accounting Standards | Adopted Accounting Standards Revenue Recognition In May 2014, the FASB issued accounting guidance, with an effective date that was deferred to January 1, 2018, to provide a single comprehensive model in accounting for revenue arising from contracts with customers. The guidance applies to all contracts with customers; however, certain insurance contracts are specifically excluded from this updated guidance. The Company adopted the guidance on January 1, 2018, using the modified retrospective transition method. The guidance did not have a significant impact on the Company’s consolidated financial position, results of operations, cash flows, or disclosures. Recognition and Measurement of Financial Assets and Liabilities In January 2016, the FASB issued accounting guidance to improve certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. Among other things, the guidance revises the accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The Company adopted the guidance on January 1, 2018 using the modified retrospective approach that resulted in reclassifying $15,041 thousand of after tax net unrealized gains on equity securities from AOCI to Retained earnings. The Company's Consolidated Statements of Operations were impacted as changes in fair value of equity securities are now being reported in Net investment gains (losses) instead of reported in other comprehensive income (loss) (OCI). Statement of Cash Flows -- Classification In August 2016, the FASB issued guidance to reduce diversity in practice in the statement of cash flows between operating, investing and financing activities related to the classification of cash receipts and cash payments for eight specific issues. The FASB acknowledged that current GAAP either is unclear or does not include specific guidance on these eight cash flow classification issues: (1) debt prepayment or extinguishment costs; (2) settlement of zero-coupon bonds (pertains to issuers); (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims (pertains to claimants); (5) proceeds from the settlement of corporate-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions (pertains to transferors) and (8) separately identifiable cash flows and application of the predominance principle. The Company adopted the guidance on January 1, 2018 using a retrospective approach which had no impact to the prior year amounts reported in the Consolidated Statement of Cash Flows. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Loss) On February 14, 2018, the FASB issued accounting guidance that permits recognition of a reclassification adjustment between AOCI and Retained earnings for stranded tax amounts related to the reduced corporate tax rate enacted under the Tax Act. As permitted under its provisions, the Company early adopted the accounting guidance effective for the quarterly period that ended December 31, 2017 and elected to reclassify the stranded tax amounts. The impact from early adoption resulted in an increase to AOCI and a reduction to Retained earnings of approximately $47,900 thousand ; representing the stranded deferred tax liabilities of $50,034 thousand and $(2,134) thousand for Net unrealized investment gains (losses) on securities and Net funded status of benefit plans, respectively. Pending Accounting Standards Accounting for Leases In February 2016, the FASB issued accounting and disclosure guidance to improve financial reporting and comparability among organizations about leasing transactions. Under the new guidance, a lessee will be required to recognize assets and liabilities on the balance sheet for the rights and obligations created by those leases. Consistent with current accounting guidance, the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or an operating lease. However, while current guidance requires only capital leases to be recognized on the balance sheet, the new guidance will require both operating and capital leases to be recognized on the balance sheet. This new guidance is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those annual periods, with early adoption permitted. The Company adopted the new guidance on January 1, 2019 using the optional transition method which allowed the Company to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption (i.e., comparative periods presented in the consolidated financial statements will continue to be in conformity with legacy GAAP then in effect for those periods) and resulted in recognition of additional operating liabilities of approximately $14,500 thousand , with corresponding right of use assets of the same amount based on the present value of the expected remaining lease payments under the new guidance. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued guidance to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments, including reinsurance receivables, held by companies. The new guidance replaces the incurred loss impairment methodology and requires an organization to measure and recognize all current expected credit losses (CECL) for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Companies will need to utilize forward-looking information to better inform their credit loss estimates. Companies will continue to use judgment to determine which loss estimation method is appropriate for their circumstances. Any credit losses related to available for sale debt securities will be recorded through an allowance for credit losses with this allowance having a limit equal to the amount by which fair value is below amortized cost. The guidance also requires enhanced qualitative and quantitative disclosures to provide additional information about the amounts recorded in the financial statements. For public business entities, the guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those years, using a modified-retrospective approach. Early application is permitted for annual reporting periods, and interim periods within those years, beginning after December 15, 2018. Management is evaluating the impact this guidance will have on the results of operations and financial position of the Company. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued guidance to simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill for reporting units with zero or negative carrying amounts. Public business entities should adopt the guidance prospectively for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early application is permitted. Management believes the adoption of this accounting guidance will not have a material effect on the results of operations and financial position of the Company. Accounting for Long-Duration Insurance Contracts |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Deferred policy acquisition costs asset by segment | The Company's DAC by reporting segment was as follows: ($ in thousands) December 31, 2018 2017 Retirement (annuity) $ 209,231 $ 174,661 Life 59,478 53,974 Property and Casualty 30,033 29,191 Total $ 298,742 $ 257,826 |
Adjustment to amortization expenses | The Company recognized the following adjustments to amortization expense as a result of evaluating actual experience and prospective assumptions, the impact of unlocking: ($ in thousands) Year Ended December 31, 2018 2017 2016 Increase (decrease) to DAC amortization expense: Retirement $ 3,948 $ 1,081 $ (313 ) Life 283 (200 ) (394 ) Total $ 4,231 $ 881 $ (707 ) |
Allocation of goodwill by reporting unit | The allocation of goodwill by reporting unit is as follows: ($ in thousands) Retirement $ 28,025 Life 9,911 Property and Casualty 9,460 Total $ 47,396 |
Property and Equipment | The following amounts are included in Other assets in the Consolidated Balance Sheets: ($ in thousands) December 31, 2018 2017 Property and equipment $ 142,243 $ 133,803 Less: accumulated depreciation 101,267 94,862 Total $ 40,976 $ 38,941 |
Investment Contract And Life Policy Reserves | This table summarizes the Company's investment contract and life policy reserves. ($ in thousands) December 31, 2018 2017 Investment contract reserves $ 4,555,856 $ 4,452,972 Life policy reserves 1,155,337 1,120,763 Total $ 5,711,193 $ 5,573,735 |
Summary of guaranteed minimum death benefit | The Company regularly monitors the GMDB reserve considering fluctuations in financial markets. The Company has a relatively low exposure to GMDB risk as shown below. ($ in thousands) December 31, 2018 2017 GMDB reserve $ 258 $ 152 Aggregate in-the-money death benefits under the GMDB provision 48,083 28,345 Variable annuity contract value distribution based on GMDB feature: No guarantee 30 % 29 % Return of premium guarantee 65 % 65 % Guarantee of premium roll-up at an annual rate of 3% or 5% 5 % 6 % Total 100 % 100 % |
Stock options fair value pricing model weighted-average assumptions | The fair value of stock options granted was estimated on the respective dates of grant using the Black-Scholes option pricing model with the weighted average assumptions shown in the following table. Year Ended December 31, 2018 2017 2016 Number of stock options granted 223,208 222,828 307,176 Weighted average grant date fair value of stock options granted $ 7.16 $ 6.57 $ 5.01 Weighted average assumptions: Risk-free interest rate 2.6 % 2.0 % 1.3 % Expected dividend yield 2.6 % 2.5 % 3.2 % Expected life, in years 4.8 4.9 4.9 Expected volatility (based on historical volatility) 21.5 % 21.4 % 25.6 % |
Computations of net income per share on both basic and diluted bases, including reconciliations of the numerators and denominators | The computations of net income per share on both basic and diluted bases, including reconciliations of the numerators and denominators, were as follows: ($ in thousands) Year Ended December 31, 2018 2017 2016 Basic: Net income for the period $ 18,343 $ 169,459 $ 83,765 Weighted average number of common shares during the period (in thousands) 41,570 41,365 41,158 Net income per share - basic $ 0.44 $ 4.10 $ 2.04 Diluted: Net income for the period $ 18,343 $ 169,459 $ 83,765 Weighted average number of common shares during the period (in thousands) 41,570 41,365 41,158 Weighted average number of common equivalent shares to reflect the dilutive effect of common stock equivalent securities (in thousands): Stock options 100 112 100 CSUs related to deferred compensation for employees 25 25 52 RSUs related to incentive compensation 199 63 166 Total common and common equivalent shares adjusted to calculate diluted earnings per share (in thousands) 41,894 41,565 41,476 Net income per share - diluted $ 0.44 $ 4.08 $ 2.02 |
Components of comprehensive income | The components of comprehensive income (loss) were as follows: ($ in thousands) Year Ended December 31, 2018 2017 2016 Net income $ 18,343 $ 169,459 $ 83,765 Other comprehensive income (loss): Change in net unrealized investment gains (losses) on securities: Net unrealized investment gains (losses) on securities arising during the period (275,094 ) 105,475 6,144 Less: reclassification adjustment for net gains (losses) included in income before income tax (16,363 ) (4,863 ) 5,176 Total, before tax (258,731 ) 110,338 968 Income tax expense (benefit) (55,495 ) 35,933 397 Total, net of tax (203,236 ) 74,405 571 Change in net funded status of benefit plans: Before tax 1,294 1,461 (37 ) Income tax expense (benefit) 262 727 (14 ) Total, net of tax 1,032 734 (23 ) Total comprehensive income (loss) $ (183,861 ) $ 244,598 $ 84,313 |
Accumulated Other Comprehensive Income (Loss) | The following table reconciles the components of AOCI for the periods indicated. ($ in thousands) Net Unrealized Investment Gains (Losses) on Securities (1)(2) Net Funded Status of Benefit Plans (1) Total (1)(3) Beginning balance, January 1, 2018 $ 300,177 $ (13,217 ) $ 286,960 Other comprehensive income (loss) before reclassifications (201,122 ) 1,032 (200,090 ) Amounts reclassified from AOCI 12,927 — 12,927 Cumulative effect of change in accounting principle (4) (15,041 ) — (15,041 ) Net current period other comprehensive income (loss) (203,236 ) 1,032 (202,204 ) Ending balance, December 31, 2018 $ 96,941 $ (12,185 ) $ 84,756 Beginning balance, January 1, 2017 $ 175,738 $ (11,817 ) $ 163,921 Other comprehensive income (loss) before reclassifications 71,244 734 71,978 Amounts reclassified from AOCI 3,161 — 3,161 Reclassification of deferred taxes (3) 50,034 (2,134 ) 47,900 Net current period other comprehensive income (loss) 124,439 (1,400 ) 123,039 Ending balance, December 31, 2017 $ 300,177 $ (13,217 ) $ 286,960 Beginning balance, January 1, 2016 $ 175,167 $ (11,794 ) $ 163,373 Other comprehensive income (loss) before reclassifications 3,935 (23 ) 3,912 Amounts reclassified from AOCI (3,364 ) — (3,364 ) Net current period other comprehensive income (loss) 571 (23 ) 548 Ending balance, December 31, 2016 $ 175,738 $ (11,817 ) $ 163,921 ___________________ (1) All amounts are net of tax. (2) The pretax amounts reclassified from AOCI, $(16,363) thousand , $(4,863) thousand and $5,176 thousand , are included in net investment gains (losses) and the related tax expenses, $(3,436) thousand , $(1,702) thousand and $1,812 thousand , are included in income tax expense in the Consolidated Statements of Operations for the years ended December 31, 2018 , 2017 and 2016 , respectively. (3) For the period ended December 31, 2017, deferred taxes attributable to net unrealized investment gains (losses) on fixed maturity and equity securities and Defined benefit plans were re-measured as a result of the enactment of the Tax Cuts and Jobs Act (Tax Act). ASC 740, Income Taxes, requires that the income tax effect from the deferred tax re-measurement be reflected in the Company’s income tax expense, even if the deferred taxes being re-measured were originally established through AOCI. The mismatch between deferred taxes established in AOCI at 35% and re-measuring these same deferred taxes at 21% through income tax expense results in stranded deferred taxes in AOCI. On February 14, 2018, the Financial Accounting Standards Board (FASB) issued accounting guidance that permits recognition of a reclassification adjustment between AOCI and Retained earnings for stranded deferred tax amounts related to the reduced corporate tax rate enacted under the Tax Act. As permitted under its provisions, the Company early adopted the accounting guidance effective for the quarterly period that ended December 31, 2017 and has elected to reclassify the stranded deferred tax amounts. The impact from early adoption resulted in an increase to AOCI and a reduction to Retained earnings of approximately $47,900 thousand ; representing the stranded deferred tax liabilities of $50,034 thousand and $(2,134) thousand for net unrealized investment gains (losses) on fixed maturity and equity securities and Defined benefit plans, respectively. (4) The Company adopted guidance on January 1, 2018 that resulted in reclassifying $15,041 thousand of after tax net unrealized gains on equity securities from AOCI to Retained earnings. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Components of net investment income | The components of net investment income for the following periods were: ($ in thousands) Year Ended December 31, 2018 2017 2016 Fixed maturity securities $ 353,303 $ 354,290 $ 342,773 Equity securities 6,017 6,411 4,703 Limited partnership interests 15,406 12,555 13,609 Short-term and other investments 11,981 10,214 9,668 Total investment income 386,707 383,470 370,753 Investment expenses (10,200 ) (9,840 ) (9,567 ) Net investment income $ 376,507 $ 373,630 $ 361,186 |
Summary of realized investment gains (losses) | The following table reconciles the net investment gains (losses) by transaction type: ($ in thousands) Year Ended December 31, 2018 2017 2016 Impairment write-downs $ — $ (1,778 ) $ (6,268 ) Change in intent write-downs (1,530 ) (10,842 ) (4,843 ) Net OTTI losses recognized in earnings (1,530 ) (12,620 ) (11,111 ) Sales and other, net 3,491 7,756 16,286 Change in fair value - equity securities (1) (18,323 ) — — Change in fair value and gains (losses) realized on settlements - derivative instruments 3,819 1,458 (1,052 ) Net investment gains (losses) $ (12,543 ) $ (3,406 ) $ 4,123 ____________________ (1) ($ in thousands) Year Ended December 31, 2018 2017 2016 Fixed maturity securities $ (5,713 ) $ (8,867 ) $ 5,784 Equity securities (10,649 ) 4,003 (608 ) Short-term investments and other 3,819 1,458 (1,053 ) Net investment gains (losses) $ (12,543 ) $ (3,406 ) $ 4,123 |
Unrealized gains and losses on fixed maturities and equity securities | The amortized cost or cost, net unrealized investment gains (losses), fair values and OTTI included in AOCI of all fixed maturity and equity securities in the portfolio were as follows: ($ in thousands) Amortized Cost/Cost Unrealized Gains Unrealized Losses Fair Value OTTI in AOCI December 31, 2018 (1) Fixed maturity securities U.S. Government and federally sponsored agency obligations (2) : Mortgage-backed securities $ 778,038 $ 22,724 $ 13,321 $ 787,441 $ — Other, including U.S. Treasury securities 835,096 16,127 17,681 833,542 — Municipal bonds 1,884,313 133,150 13,494 2,003,969 — Foreign government bonds 83,343 2,321 760 84,904 — Corporate bonds 2,054,105 64,296 38,891 2,079,510 — Other mortgage-backed securities 1,739,016 10,467 23,531 1,725,952 — Totals $ 7,373,911 $ 249,085 $ 107,678 $ 7,515,318 $ — December 31, 2017 Fixed maturity securities U.S. Government and federally sponsored agency obligations (2) : Mortgage-backed securities $ 669,297 $ 30,460 $ 3,032 $ 696,725 $ — Other, including U.S. Treasury securities 714,613 26,311 5,516 735,408 — Municipal bonds 1,711,581 184,107 2,435 1,893,253 — Foreign government bonds 96,780 5,958 — 102,738 — Corporate bonds 2,409,426 173,862 4,334 2,578,954 — Other mortgage-backed securities 1,701,253 22,935 7,191 1,716,997 — Totals $ 7,302,950 $ 443,633 $ 22,508 $ 7,724,075 $ — Equity securities (3) $ 116,320 $ 19,425 $ 279 $ 135,466 $ — ____________________ (1) Effective January 1, 2018, with the adoption of new accounting guidance for recognition and measurement of financial instruments, available for sale equity securities were reclassified to equity securities at fair value and are excluded from the table above as of December 31, 2018. (2) Fair value includes securities issued by Federal National Mortgage Association (FNMA) of $441,308 thousand and $361,955 thousand ; Federal Home Loan Mortgage Corporation (FHLMC) of $417,308 thousand and $400,001 thousand ; and Government National Mortgage Association (GNMA) of $96,466 thousand and $104,168 thousand as of December 31, 2018 and 2017 , respectively. (3) |
Summary of fair value and gross unrealized losses of fixed maturity securities and equity securities in an unrealized loss position | Therefore, no impairment of these securities was recognized at December 31, 2018 . ($ in thousands) 12 months or less More than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses December 31, 2018 (1) Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 193,447 $ 5,026 $ 157,295 $ 8,295 $ 350,742 $ 13,321 Other 263,497 6,746 246,213 10,935 509,710 17,681 Municipal bonds 291,869 7,603 95,297 5,891 387,166 13,494 Foreign government bonds 16,250 760 — — 16,250 760 Corporate bonds 818,519 27,429 99,171 11,462 917,690 38,891 Other mortgage-backed securities 913,858 16,076 291,442 7,455 1,205,300 23,531 Total 2,497,440 63,640 889,418 44,038 3,386,858 107,678 Number of positions with a gross unrealized loss 1,052 359 1,411 Fair value as a percentage of total fixed maturities and equity securities fair value 32.7 % 11.7 % 44.4 % December 31, 2017 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 134,032 $ 1,053 $ 40,606 $ 1,979 $ 174,638 $ 3,032 Other 168,634 1,849 122,753 3,667 291,387 5,516 Municipal bonds 29,437 100 79,140 2,335 108,577 2,435 Foreign government bonds — — — — — — Corporate bonds 115,113 2,701 36,081 1,633 151,194 4,334 Other mortgage-backed securities 457,166 2,791 168,972 4,400 626,138 7,191 Total fixed maturity securities 904,382 8,494 447,552 14,014 1,351,934 22,508 Equity securities (2) 6,027 249 1,277 30 7,304 279 Combined totals $ 910,409 $ 8,743 $ 448,829 $ 14,044 $ 1,359,238 $ 22,787 Number of positions with a gross unrealized loss 354 158 512 Fair value as a percentage of total fixed maturities and equity securities fair value 11.6 % 5.7 % 17.3 % ____________________ (1) Effective January 1, 2018, with the adoption of new accounting guidance for recognition and measurement of financial instruments, available for sale equity securities were reclassified to equity securities at fair value and are excluded from the table above as of December 31, 2018. (2) |
Summary of cumulative credit losses | The following table summarizes the cumulative amounts related to the Company's credit loss component of OTTI losses on fixed maturity securities held as of December 31, 2018 and 2017 that the Company did not intend to sell as of those dates, and it was not more likely than not that the Company would be required to sell the securities before the anticipated recovery of the amortized cost bases, for which the non-credit portions of OTTI losses were recognized in OCI: ($ in thousands) Year Ended December 31, 2018 2017 Cumulative credit loss (1) Beginning of period $ 3,825 $ 13,703 New credit losses — — Increases to previously recognized credit losses 246 1,995 Losses related to securities sold or paid down during the period (2,542 ) (11,873 ) End of period $ 1,529 $ 3,825 ____________________ (1) |
Distribution of the Company's fixed maturity portfolio by estimated expected maturity | The following table presents the distribution of the Company's fixed maturity securities portfolio by estimated expected maturity. Estimated expected maturities differ from contractual maturities, reflecting assumptions regarding borrowers' utilization of the right to call or prepay obligations with or without call or prepayment penalties. For structured securities, including mortgage-backed securities and other asset-backed securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments. ($ in thousands) December 31, 2018 Amortized Cost Fair Value Percent of Total Fair Value Estimated expected maturity: Due in 1 year or less $ 358,797 $ 363,049 4.8 % Due after 1 year through 5 years 1,690,400 1,713,593 22.8 % Due after 5 years through 10 years 2,453,572 2,465,337 32.8 % Due after 10 years through 20 years 1,931,599 1,991,726 26.5 % Due after 20 years 939,543 981,613 13.1 % Total $ 7,373,911 $ 7,515,318 100.0 % Average option-adjusted duration, in years 5.9 |
Proceeds received from sales of fixed maturities and equity securities | Proceeds received from sales of fixed maturity and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each year were: ($ in thousands) Year Ended December 31, 2018 2017 2016 Fixed maturity securities Proceeds received $ 625,527 $ 500,760 $ 429,251 Gross gains realized 10,536 13,570 15,915 Gross losses realized (14,932 ) (11,842 ) (4,163 ) Equity securities Proceeds received $ 25,498 $ 50,113 $ 21,210 Gross gains realized 8,592 7,753 2,869 Gross losses realized (917 ) (1,972 ) (935 ) |
Reconciliation of net unrealized investment gains (losses) on fixed maturity securities and equity securities | The following table reconciles the net unrealized investment gains (losses) on securities, net of tax, included in AOCI, before the impact on DAC: ($ in thousands) Year Ended December 31, 2018 2017 2016 Net unrealized investment gains (losses) on securities, net of tax Beginning of period $ 286,176 $ 202,941 $ 201,363 Change in unrealized investment gains (losses) on securities (172,350 ) 80,073 4,943 Reclassification of net investment (gains) losses on securities to net income 12,927 3,162 (3,365 ) Cumulative effect of change in accounting principle (1) (15,041 ) — — End of period $ 111,712 $ 286,176 $ 202,941 ________________ (1) |
Offsetting assets and liability | The following table presents the instruments that were subject to a master netting arrangement for the Company. ($ in thousands) Gross Amounts Offset in the Net Amounts of Assets/ Liabilities Presented in the Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts Consolidated Balance Sheets Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount December 31, 2018 Asset derivatives Free-standing derivatives $ 2,647 $ — $ 2,647 $ — $ 1,868 $ 779 December 31, 2017 Asset derivatives Free-standing derivatives 15,550 — 15,550 — 15,584 (34 ) |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Company's fair value hierarchy measured at recurring basis | The following table presents the Company's fair value hierarchy for those assets and liabilities measured and carried at fair value on a recurring basis. At December 31, 2018 , Level 3 investments comprised approximately 3.0% of the Company's total investment portfolio at fair value. ($ in thousands) Carrying Fair Fair Value Measurements at Reporting Date Using Amount Value Level 1 Level 2 Level 3 December 31, 2018 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 787,441 $ 787,441 $ — $ 784,224 $ 3,217 Other, including U.S. Treasury securities 833,542 833,542 13,291 820,251 — Municipal bonds 2,003,969 2,003,969 — 1,956,438 47,531 Foreign government bonds 84,904 84,904 — 84,904 — Corporate bonds 2,079,510 2,079,510 12,281 1,986,487 80,742 Other mortgage-backed securities 1,725,952 1,725,952 — 1,608,958 116,994 Total fixed maturity securities 7,515,318 7,515,318 25,572 7,241,262 248,484 Equity securities 111,750 111,750 64,330 47,415 5 Short-term investments 122,222 122,222 117,296 4,926 — Other investments 16,147 16,147 — 16,147 — Totals $ 7,765,437 $ 7,765,437 $ 207,198 $ 7,309,750 $ 248,489 Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 248 $ 248 $ — $ 248 $ — Other policyholder funds, embedded derivatives $ 78,700 $ 78,700 $ — $ — $ 78,700 December 31, 2017 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 696,725 $ 696,725 $ — $ 693,375 $ 3,350 Other, including U.S. Treasury securities 735,408 735,408 13,393 722,015 — Municipal bonds 1,893,253 1,893,253 — 1,843,925 49,328 Foreign government bonds 102,738 102,738 — 102,738 — Corporate bonds 2,578,954 2,578,954 14,345 2,491,630 72,979 Other mortgage-backed securities 1,716,997 1,716,997 — 1,612,403 104,594 Total fixed maturity securities 7,724,075 7,724,075 27,738 7,466,086 230,251 Equity securities 135,466 135,466 82,208 53,252 6 Short-term investments 62,593 62,593 62,593 — — Other investments 28,050 28,050 — 28,050 — Totals $ 7,950,184 $ 7,950,184 $ 172,539 $ 7,547,388 $ 230,257 Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 594 $ 594 $ — $ 594 $ — Other policyholder funds, embedded derivatives $ 80,733 $ 80,733 $ — $ — $ 80,733 |
Table for reconciliations for all Level 3 assets measured at fair value on a recurring basis | The following tables present reconciliations for the periods indicated for all Level 3 assets and liabilities measured at fair value on a recurring basis. ($ in thousands) Financial Assets Financial Liabilities (1) Municipal Bonds Corporate Bonds Other Mortgage- Backed Securities (2) Total Fixed Maturity Securities Equity Securities Short-term Investments Total Beginning balance, January 1, 2018 $ 49,328 $ 72,979 $ 107,944 $ 230,251 $ 6 $ — $ 230,257 $ 80,733 Transfers into Level 3 (3) — 40,488 50,771 91,259 — — 91,259 — Transfers out of Level 3 (3) — (11,279 ) (5,200 ) (16,479 ) — — (16,479 ) — Total gains or losses Net investment gains (losses) included in net income related to financial assets — (487 ) — (487 ) 3 — (484 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — — (7,518 ) Net unrealized investment gains (losses) included in OCI (1,195 ) (2,840 ) (5,570 ) (9,605 ) — — (9,605 ) — Purchases — — — — — — — — Issuances — — — — — — — 11,183 Sales — (6,135 ) (187 ) (6,322 ) (4 ) — (6,326 ) — Settlements — — — — — — — — Paydowns, maturities and distributions (602 ) (11,984 ) (27,547 ) (40,133 ) — — (40,133 ) (5,698 ) Ending balance, December 31, 2018 $ 47,531 $ 80,742 $ 120,211 $ 248,484 $ 5 $ — $ 248,489 $ 78,700 Beginning balance, January 1, 2017 $ 46,497 $ 60,191 $ 104,659 $ 211,347 $ 6 $ 751 $ 212,104 $ 59,393 Transfers into Level 3 (3) 5,214 38,483 43,091 86,788 — — 86,788 — Transfers out of Level 3 (3) (5,557 ) (16,252 ) (6,542 ) (28,351 ) — (751 ) (29,102 ) — Total gains or losses Net investment gains (losses) included in net income related to financial assets — (1 ) (1,832 ) (1,833 ) — — (1,833 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — — 12,942 Net unrealized investment gains (losses) included in OCI 3,977 661 2,075 6,713 — — 6,713 — Purchases — — — — — — — — Issuances — — — — — — — 12,605 Sales — (1,999 ) (9,179 ) (11,178 ) — — (11,178 ) — Settlements — — — — — — — — Paydowns, maturities and distributions (803 ) (8,104 ) (24,328 ) (33,235 ) — — (33,235 ) (4,207 ) Ending balance, December 31, 2017 $ 49,328 $ 72,979 $ 107,944 $ 230,251 $ 6 $ — $ 230,257 $ 80,733 ____________________ (1) Represents embedded derivatives, all related to the Company's FIA products, reported in Other policyholder funds in the Company's Consolidated Balance Sheets. (2) Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other mortgage-backed securities. (3) Transfers into and out of Level 3 during the years ended December 31, 2018 and 2017 |
Summary of fair value assets and liabilities measured on nonrecurring basis | The following table presents the carrying value, fair value and fair value hierarchy of these financial assets and financial liabilities. ($ in thousands) Carrying Fair Fair Value Measurements at Reporting Date Using Amount Value Level 1 Level 2 Level 3 December 31, 2018 Financial Assets Investments Other investments $ 156,725 $ 161,449 $ — $ — $ 161,449 Financial Liabilities Investment contract and life policy reserves, fixed annuity contracts 4,555,849 4,478,338 — — 4,478,338 Investment contract and life policy reserves, account values on life contracts 87,229 90,402 — — 90,402 Other policyholder funds 689,287 689,287 — 626,325 62,962 Long-term debt 297,740 291,938 — 291,938 — December 31, 2017 Financial Assets Investments Other investments $ 154,898 $ 159,575 $ — $ — $ 159,575 Financial Liabilities Investment contract and life policy reserves, fixed annuity contracts 4,452,972 4,366,334 — — 4,366,334 Investment contract and life policy reserves, account values on life contracts 82,911 88,620 — — 88,620 Other policyholder funds 643,528 643,528 — 575,622 67,906 Long-term debt 297,469 311,315 — 311,315 — |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair values of derivative instruments, including derivative instruments embedded in FIA and IUL contracts are presented in the Consolidated Balance Sheets as follows: ($ in thousands) December 31, 2018 2017 Assets Derivative instruments, included in Short-term and other investments $ 2,647 $ 15,550 Liabilities Fixed indexed annuities - embedded derivatives, included in Other policyholder funds 78,700 80,733 Indexed universal life - embedded derivatives, included in Investment contract and life policy reserves 248 594 |
Derivative Instruments, Gain (Loss) | The changes in fair value of derivatives included in the Consolidated Statements of Operations were as follows: ($ in thousands) Years Ended December 31, 2018 2017 2016 Change in fair value of derivatives (1) : Revenues Net investment gains (losses) $ (4,112 ) $ 14,867 $ 4,024 Change in fair value of embedded derivatives: Revenues Net investment gains (losses) 7,931 (13,410 ) (5,076 ) ____________________ (1) |
Financing Receivable Credit Quality Indicators | The notional amount and fair value of call options by counterparty and each counterparty's long-term credit ratings were as follows: ($ in thousands) December 31, 2018 December 31, 2017 Credit Rating Notional Fair Notional Fair Counterparty S&P Moody's Amount Value Amount Value Bank of America, N.A. A+ Aa3 $ 144,500 $ 870 $ 85,100 $ 6,320 Barclays Bank PLC A A2 28,500 247 48,900 1,828 Citigroup Inc. BBB+ — — — — Credit Suisse International A A1 16,100 55 21,100 1,444 Societe Generale A 89,100 1,475 91,700 5,958 Total $ 278,200 $ 2,647 $ 246,800 $ 15,550 |
Property and Casualty Unpaid _2
Property and Casualty Unpaid Claims and Claim Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Insurance Loss Reserves [Abstract] | |
Reconciliation of property and casualty unpaid claims and claim expenses | The end of the year gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets. ($ in thousands) Years Ended December 31, 2018 2017 2016 Property and Casualty segment Gross reserves, beginning of year (1) $ 319,182 $ 307,757 $ 301,569 Less: reinsurance recoverables 57,409 61,199 50,332 Net reserves, beginning of year (2) 261,773 246,558 251,237 Incurred claims and claim expenses: Claims occurring in the current year 547,959 498,989 471,099 Decrease in estimated reserves for claims occurring in prior years (3) (300 ) (2,700 ) (7,000 ) Total claims and claim expenses incurred (4) 547,659 496,289 464,099 Claims and claim expense payments for claims occurring during: Current year 369,194 333,385 323,025 Prior years 162,783 147,689 145,753 Total claims and claim expense payments 531,977 481,074 468,778 Net reserves, end of year (2) 277,455 261,773 246,558 Plus: reinsurance recoverables 89,725 57,409 61,199 Gross reserves, end of year (1) $ 367,180 $ 319,182 $ 307,757 ____________________ (1) Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Life and Retirement of $29,534 thousand , $28,567 thousand and $22,131 thousand as of December 31, 2018 , 2017 and 2016 , respectively, in addition to Property and Casualty reserves. (2) Reserves net of anticipated reinsurance recoverables. (3) Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs. Also refer to the paragraphs below for additional information regarding the reserve development recorded in 2018 , 2017 and 2016 . (4) Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Life and Retirement of $89,901 thousand , $86,017 thousand , and $76,905 thousand for the years ended December 31, 2018 , 2017 and 2016 |
Schedule of average annual percentage payout of incurred claims by age, also referred to as a history of claims duration | Below is the average annual percentage payout of incurred claims by age, also referred to as a history of claims duration: Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Homeowners 78.5 % 17.3 % 2.4 % 0.9 % 0.7 % 0.2 % — — — — Auto liability 40.9 % 35.1 % 13.7 % 6.1 % 2.7 % 1.1 % 0.3 % 0.1 % — — Auto physical damage 95.6 % 4.4 % — — — — — — — — |
Schedule of Short-duration insurance contracts, claims development | The following tables illustrate the incurred and paid claims development by accident year on a net basis for the lines of homeowners, auto liability and auto physical damage. Conditions and trends that have affected the development of these reserves in the past will not necessarily reoccur in the future. It may not be appropriate to use this cumulative history in the projection of future performance. The information about incurred and paid claims development for the years ended December 31, 2009 to 2017 is presented as unaudited supplementary information. ($ in thousands) Homeowners Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2018 Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 113,274 $ 112,280 $ 112,970 $ 113,096 $ 113,357 $ 113,230 $ 113,216 $ 112,900 $ 112,958 $ 113,168 $ — 21,810 2010 140,994 136,907 133,358 133,235 133,216 133,136 132,859 132,905 132,627 — 25,149 2011 150,141 150,334 150,791 148,860 148,755 148,414 148,370 148,079 — 29,530 2012 108,754 109,156 109,360 106,486 106,308 106,348 106,000 — 21,578 2013 105,584 107,489 103,982 102,407 102,345 101,769 88 19,221 2014 111,647 113,505 109,059 106,844 106,554 257 20,083 2015 111,706 115,134 114,404 114,053 362 18,706 2016 115,931 118,604 117,009 724 19,830 2017 126,285 129,818 759 19,741 2018 166,793 27,697 19,515 Total $ 1,235,870 ($ in thousands) Homeowners Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 81,570 $ 104,407 $ 108,217 $ 110,324 $ 112,554 $ 112,720 $ 112,827 $ 112,848 $ 112,851 $ 112,858 2010 98,190 124,326 129,790 132,246 132,523 132,604 132,599 132,602 132,602 2011 123,046 142,846 145,852 146,908 147,451 148,026 148,014 148,069 2012 84,260 101,566 104,203 105,156 105,561 105,909 105,993 2013 76,890 96,599 99,361 100,968 101,527 101,677 2014 83,314 103,030 105,704 106,081 106,258 2015 90,704 109,303 111,882 113,321 2016 95,772 113,186 115,053 2017 106,800 128,518 2018 130,548 Total 1,194,897 Outstanding prior to 2009 66 Prior years paid — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 41,039 ($ in thousands) Auto Liability Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2018 Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 159,934 $ 158,703 $ 153,662 $ 157,941 $ 151,418 $ 150,919 $ 150,568 $ 149,822 $ 149,888 $ 149,807 $ (64 ) 49,230 2010 157,712 160,058 156,369 154,222 152,483 151,653 149,818 149,425 149,542 3 48,942 2011 150,803 146,713 145,735 143,133 142,488 139,840 138,891 138,949 210 45,976 2012 156,448 153,815 150,336 149,346 147,594 145,847 145,620 305 45,984 2013 153,860 152,858 150,720 150,657 148,111 147,993 748 47,368 2014 155,105 157,249 158,470 159,937 159,794 1,887 49,380 2015 165,517 172,553 177,021 178,325 2,441 50,596 2016 180,380 184,440 184,567 5,637 51,934 2017 187,983 188,756 19,007 48,587 2018 200,314 71,139 43,522 Total $ 1,643,667 ($ in thousands) Auto Liability Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 60,011 $ 110,921 $ 133,568 $ 142,524 $ 146,383 $ 148,783 $ 149,608 $ 149,801 $ 149,855 $ 149,871 2010 63,416 118,345 137,012 144,255 147,337 148,751 149,247 149,364 149,439 2011 61,070 108,837 126,812 133,931 136,906 138,151 138,358 138,689 2012 61,279 109,574 127,185 138,641 142,916 144,622 145,121 2013 62,224 108,856 131,214 139,954 145,291 146,770 2014 61,329 117,468 139,463 149,059 155,758 2015 70,836 134,473 157,980 170,088 2016 73,073 140,901 166,815 2017 70,682 139,531 2018 77,528 Total 1,439,610 Outstanding prior to 2009 183 Prior years paid — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 204,240 ($ in thousands) Auto Physical Damage Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2018 Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 84,539 $ 83,515 $ 83,202 $ 82,635 $ 82,000 $ 81,986 $ 81,972 $ 81,963 $ 81,972 $ 81,941 $ — 77,449 2010 84,112 83,420 83,103 83,046 83,052 83,050 83,036 83,028 83,018 2 81,581 2011 86,205 85,507 86,023 85,120 85,143 85,116 85,108 85,102 8 80,803 2012 83,770 82,337 83,402 83,431 83,354 83,342 83,334 8 78,163 2013 91,448 88,856 88,672 88,627 88,455 88,525 54 80,919 2014 95,572 95,634 95,422 95,239 95,232 (21 ) 87,899 2015 99,291 97,994 97,624 97,455 (188 ) 87,491 2016 112,430 109,515 109,348 (207 ) 93,200 2017 115,483 111,798 924 91,160 2018 109,040 (6,859 ) 91,070 Total $ 944,793 ($ in thousands) Auto Physical Damage Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 78,456 $ 82,117 $ 82,039 $ 82,015 $ 82,000 $ 81,985 $ 81,973 $ 81,963 $ 81,955 $ 81,941 2010 79,329 83,120 83,103 83,087 83,067 83,051 83,036 83,028 83,015 2011 83,227 85,254 85,181 85,148 85,127 85,116 85,108 85,095 2012 80,519 83,418 83,372 83,355 83,347 83,342 83,326 2013 85,110 88,688 88,580 88,532 88,484 88,471 2014 88,939 95,444 95,266 95,256 95,258 2015 92,138 97,850 97,685 97,638 2016 106,459 109,686 109,536 2017 105,156 110,817 2018 103,559 Total 938,656 Outstanding prior to 2009 — Prior years paid — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 6,137 |
Schedule of reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses | The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the Consolidated Balance Sheet is as follows: ($ in thousands) Years Ended December 31, 2018 Property and Casualty segment Net reserves Homeowners $ 41,039 Auto liability 204,240 Auto physical damage 6,137 Other short duration lines 3,556 Total net reserves for unpaid claims and claim adjustment expense, net of reinsurance 254,972 Reinsurance recoverable on unpaid claims Homeowners 26,646 Auto liability 55,971 Other short duration lines 7,108 Total reinsurance recoverable on unpaid claims 89,725 Insurance lines other than short duration (1) 29,534 Unallocated claims adjustment expenses 22,483 Total other than short duration and unallocated claims adjustment expenses 52,017 Gross reserves, end of year (1) $ 396,714 ____________________ (1) |
Reinsurance and Catastrophes (T
Reinsurance and Catastrophes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Summary of reinsurance recoverable on unpaid insurance reserves | The total amounts of reinsurance recoverable on unpaid insurance reserves classified as assets and reported in Other assets in the Consolidated Balance Sheets were as follows: ($ in thousands) December 31, 2018 2017 Reinsurance recoverables on reserves and unpaid claims Property and Casualty Reinsurance companies $ 33,754 $ 6,696 State insurance facilities 55,971 50,713 Life and health 9,785 11,037 Total $ 99,510 $ 68,446 |
Effects of reinsurance on premiums and benefits | The effects of reinsurance on premiums written and contract deposits; premiums and contract charges earned; and benefits, claims and settlement expenses were as follows: ($ in thousands) Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Year Ended December 31, 2018 Premiums written and contract deposits (1) $ 1,255,557 $ 28,773 $ 8,259 $ 1,235,043 Premiums and contract charges earned 841,147 28,837 5,023 817,333 Benefits, claims and settlement expenses 769,664 136,601 4,497 637,560 Year Ended December 31, 2017 Premiums written and contract deposits (1) 1,244,500 21,989 4,606 1,227,117 Premiums and contract charges earned 812,099 22,036 4,640 794,703 Benefits, claims and settlement expenses 588,621 10,472 4,157 582,306 Year Ended December 31, 2016 Premiums written and contract deposits (1) 1,280,903 22,728 4,324 1,262,499 Premiums and contract charges earned 777,651 22,826 4,321 759,146 Benefits, claims and settlement expenses 562,385 25,739 4,358 541,004 ____________________ (1) |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Indebtedness outstanding | Indebtedness and scheduled maturities consisted of the following: ($ in thousands) Effective Interest Rates Final Maturity December 31, 2018 2017 Short-term debt Bank Credit Facility Variable 2023 $ — $ — Long-term debt (1) 4.50% Senior Notes, Aggregate principal amount of $250,000 less unaccrued discount of $488 and $547 and unamortized debt issuance costs of $1,772 and $1,984 4.50% 2025 247,740 247,469 Federal Home Loan Bank borrowing 2.70% 2022 50,000 50,000 Total $ 297,740 $ 297,469 ____________________ (1) The Company designates debt obligations as "long-term" based on maturity date at issuance. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of income tax assets and liabilities | The income tax assets and liabilities included in Other assets and Other liabilities, respectively, in the Consolidated Balance Sheets were as follows: ($ in thousands) December 31, 2018 2017 Income tax (asset) liability Current $ (20,793 ) $ (16,266 ) Deferred 103,686 157,775 |
Summary of deferred tax assets and liabilities | The "temporary differences" that gave rise to the deferred tax balances were as follows: ($ in thousands) December 31, 2018 2017 Deferred tax assets Unearned premium reserve reduction $ 12,112 $ 11,472 Compensation accruals 6,866 8,359 Impaired securities 1,295 2,240 Other comprehensive income - net funded status of benefit plans 3,254 3,526 Discounting of unpaid claims and claim expense tax reserves 2,772 3,889 Postretirement benefits other than pensions 302 321 Charitable contributions carryforwards 89 62 Net operating loss carryforwards 10,969 148 Total gross deferred tax assets 37,659 30,017 Deferred tax liabilities Other comprehensive income - net unrealized gains on securities 32,897 95,583 Deferred policy acquisition costs 60,330 52,438 Life insurance future policy benefit reserve 9,304 102 Life insurance future policy benefit reserve (transitional rule) 14,910 23,869 Discounting of unpaid claims and claim expense tax reserves (transitional rule) 1,203 2,513 Investment related adjustments 17,531 8,661 Intangibles 2,557 2,557 Other, net 2,613 2,069 Total gross deferred tax liabilities 141,345 187,792 Net deferred tax liability $ 103,686 $ 157,775 |
Summary of Loss Carryforwards and Credits | At December 31, 2018, the Company had available the following carryforwards or credits. ($ in thousands) Pretax Amount Expiration Years Operating loss carryforwards $ 52,232 2037 - 2038 Charitable contributions carryforwards 424 2021 - 2023 |
Income Taxes Expenses | The components of the provision for income tax expense were as follows: ($ in thousands) Years Ended December 31, 2018 2017 2016 Current $ 4,152 $ 3,813 $ 26,359 Deferred (2,958 ) (84,585 ) 4,108 Total income tax expense (benefit) $ 1,194 $ (80,772 ) $ 30,467 |
Income Taxes Expenses Reconciliation | Income tax expense for the following periods differed from the expected tax computed by applying the federal corporate tax rate of 21% for 2018 and 35% for 2017 and 2016 to income before income taxes as follows: ($ in thousands) Years Ended December 31, 2018 2017 2016 Expected federal tax on income $ 4,103 $ 31,041 $ 39,981 Add (deduct) tax effects of: Tax-exempt interest (3,726 ) (5,335 ) (5,789 ) Dividend received deduction (412 ) (4,810 ) (5,751 ) Tax Act DTL re-measurement — (98,988 ) — Employee share-based compensation (1,134 ) (3,258 ) 127 Compensation deduction limitation 1,754 326 — Prior year adjustments 300 (293 ) 91 Other, net 309 545 1,808 Income tax expense (benefit) provided on income $ 1,194 $ (80,772 ) $ 30,467 |
Unrecognized tax benefits, excluding interest and penalties | A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is as follows: ($ in thousands) Years Ended December 31, 2018 2017 2016 Balance as of the beginning of the year $ 1,790 $ 1,594 $ 1,039 Increases related to prior year tax positions — 101 348 Decreases related to prior year tax positions (152 ) — — Increases related to current year tax positions 96 422 283 Settlements — — — Lapse of statute — (327 ) (76 ) Balance as of the end of the year $ 1,734 $ 1,790 $ 1,594 |
Shareholders' Equity and Comm_2
Shareholders' Equity and Common Stock Equivalents (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Summary of stock units and stock options outstanding under the Comprehensive Plan | As further described in the paragraphs below, CSUs, stock options and RSUs under the Comprehensive Plan were as follows: December 31, 2018 2017 2016 CSUs related to deferred compensation for Directors 32,288 61,677 74,058 CSUs related to deferred compensation for employees 24,498 24,903 51,502 Stock options 774,821 719,015 747,032 RSUs related to incentive compensation 1,008,249 1,149,679 1,419,268 Total 1,839,856 1,955,274 2,291,860 |
Summary of changes in outstanding options | Changes in outstanding options were as follows: Weighted Average Option Price per Share Range of Option Prices per Share Options Outstanding Vested and Exercisable December 31, 2017 $32.80 $17.01-$41.95 719,015 258,321 Granted $43.04 $42.95-$44.75 223,208 — Vested $31.42 $17.32-$41.95 — 158,233 Exercised $27.07 $17.01-$41.95 (145,438 ) (145,438 ) Forfeited $39.07 $31.01-$42.95 (21,964 ) — Expired — — — — December 31, 2018 $36.65 $17.32-$44.75 774,821 271,116 |
Summary of options outstanding segregated by ranges of exercise prices | Option information segregated by ranges of exercise prices was as follows: December 31, 2018 Total Outstanding Options Vested and Exercisable Options Range of Option Prices per Share Options Weighted Average Option Price per Share Weighted Average Remaining Term Options Weighted Average Option Price per Share Weighted Average Remaining Term $17.01-$22.69 36,524 $19.77 0.82 36,524 $19.77 0.82 years $28.88-$33.41 320,897 $31.01 6.68 183,685 $30.85 6.40 years $38.05-$41.95 199,452 $41.82 8.19 50,907 $41.82 8.19 years $41.95-$44.75 217,948 $43.05 9.19 — — 0 years Total 774,821 $36.65 7.50 271,116 $31.42 5.98 years |
Summary of changes in outstanding restricted common stock units | Changes in outstanding RSUs were as follows: Total Outstanding Units Vested Units Units Weighted Average Grant Date Fair Value per Unit Units Weighted Average Grant Date Fair Value per Unit December 31, 2017 1,149,679 $32.05 558,139 $19.80 Granted (1) 188,675 $42.21 — — Vested — — 144,290 $31.58 Forfeited (44,855 ) $38.08 — — Distributed (2) (285,250 ) $25.15 (285,250 ) $25.15 December 31, 2018 1,008,249 $35.64 417,179 $20.22 ____________________ (1) Includes dividends reinvested into additional RSUs. (2) |
Statutory Information and Res_2
Statutory Information and Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Statutory surplus and subsidiary dividend restrictions | Reconciliations of statutory capital and surplus and net income, as determined using statutory accounting principles, to the amounts included in the accompanying consolidated financial statements are as follows: ($ in thousands) December 31, 2018 2017 Statutory capital and surplus of insurance subsidiaries $ 903,564 $ 944,139 Increase (decrease) due to: Deferred policy acquisition costs 298,742 257,826 Difference in policyholder reserves 142,601 111,188 Goodwill 47,396 47,396 Investment fair value adjustments on fixed maturity securities 142,512 415,775 Difference in investment reserves 105,430 111,225 Federal income tax liability (115,667 ) (162,634 ) Net funded status of benefit plans (15,495 ) (16,789 ) Non-admitted assets and other, net 20,412 28,870 Shareholders' equity of parent company and non-insurance subsidiaries 8,795 12,046 Parent company short-term and long-term debt (247,740 ) (247,469 ) Shareholders' equity as reported herein $ 1,290,550 $ 1,501,573 ($ in thousands) Years Ended December 31, 2018 2017 2016 Statutory net income of insurance subsidiaries $ 45,977 $ 82,587 $ 74,574 Net loss of non-insurance companies (9,755 ) (4,496 ) (5,135 ) Interest expense (11,892 ) (11,836 ) (11,808 ) Tax benefit of interest expense and other parent company current tax adjustments 121 5,654 5,637 Combined net income 24,451 71,909 63,268 Increase (decrease) due to: Deferred policy acquisition costs 1,015 9,385 19,442 Policyholder benefits 26,318 30,609 14,919 Federal income tax (expense) benefit 3,020 84,198 (5,312 ) Investment reserves (31,529 ) (20,966 ) (1,320 ) Other adjustments, net (4,932 ) (5,676 ) (7,232 ) Net income as reported herein $ 18,343 $ 169,459 $ 83,765 |
Pension Plans and Other Postr_2
Pension Plans and Other Postretirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Summary of contributions to qualified defined contribution plan, 401(k), non-qualified defined contribution plan and total assets of the plans | Contributions to employees' accounts under the 401(k) plan and the non-qualified defined contribution plan, as well as total assets of the plans, were as follows: ($ in thousands) Year Ended December 31, 2018 2017 2016 401(k) plan Contributions to employees' accounts $ 7,655 $ 7,637 $ 6,918 Total assets at the end of the year 167,767 180,514 177,352 Non-qualified defined contribution plan Contributions to employees' accounts 70 84 72 Total assets at the end of the year — — — |
Funded status of the defined benefit, supplemental retirement pension plans and postretirement benefits other than pensions | The following tables summarize the funded status of the defined benefit and supplemental retirement pension plans as of December 31, 2018 , 2017 and 2016 (the measurement dates) and identify (1) the assumptions used to determine the projected benefit obligation and (2) the components of net pension cost for the defined benefit plan and supplemental retirement plans for the following periods: ($ in thousands) Defined Benefit Plan Supplemental Defined Benefit Plans December 31, December 31, 2018 2017 2016 2018 2017 2016 Change in benefit obligation: Projected benefit obligation at beginning of year $ 28,432 $ 29,407 $ 31,233 $ 16,832 $ 16,847 $ 17,004 Service cost 650 650 650 — — — Interest cost 947 1,091 1,244 566 631 687 Plan amendments — — — — — — Actuarial loss (gain) (2,208 ) (721 ) (220 ) (789 ) 805 488 Benefits paid (2,746 ) (1,995 ) (3,500 ) (1,205 ) (1,451 ) (1,332 ) Settlements — — — — — — Projected benefit obligation at end of year $ 25,075 $ 28,432 $ 29,407 $ 15,404 $ 16,832 $ 16,847 Change in plan assets: Fair value of plan assets at beginning of year $ 25,843 $ 25,446 $ 27,667 $ — $ — $ — Actual return on plan assets (640 ) 2,909 1,766 — — — Employer contributions — — — 1,205 1,451 1,332 Benefits paid (2,746 ) (1,995 ) (3,500 ) (1,205 ) (1,451 ) (1,332 ) Expenses paid (367 ) (517 ) (487 ) — — — Settlements — — — — — — Fair value of plan assets at end of year $ 22,090 $ 25,843 $ 25,446 $ — $ — $ — Funded status $ (2,985 ) $ (2,589 ) $ (3,961 ) $ (15,404 ) $ (16,832 ) $ (16,847 ) Prepaid (accrued) benefit expense $ 7,425 $ 8,016 $ 8,653 $ (10,320 ) $ (10,648 ) $ (11,210 ) Total amount recognized in Consolidated Balance Sheets, all in Other liabilities $ (2,985 ) $ (2,589 ) $ (3,961 ) $ (15,404 ) $ (16,832 ) $ (16,847 ) Amounts recognized in accumulated other comprehensive income (loss) (AOCI): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss 10,410 10,605 12,613 5,084 6,184 5,637 Total amount recognized in AOCI $ 10,410 $ 10,605 $ 12,613 $ 5,084 $ 6,184 $ 5,637 Information for pension plans with an accumulated benefit obligation greater than plan assets: Projected benefit obligation $ 25,075 $ 28,432 $ 29,407 $ 15,404 $ 16,832 $ 16,847 Accumulated benefit obligation 25,075 28,432 29,407 15,404 16,832 16,847 Fair value of plan assets 22,090 25,843 25,446 — — — |
Defined benefit plan and the supplemental defined benefit plans | ($ in thousands) Defined Benefit Plan Supplemental Defined Benefit Plans Year Ended December 31, Year Ended December 31, 2018 2017 2016 2018 2017 2016 Components of net periodic pension (income) expense: Service cost: Benefit accrual $ — $ — $ — $ — $ — $ — Other expenses 650 650 650 — — — Interest cost 947 1,091 1,244 566 631 687 Expected return on plan assets (1,377 ) (1,493 ) (1,675 ) — — — Settlement loss — — — — — — Amortization of: Prior service cost — — — — — — Actuarial loss 371 389 393 310 258 233 Net periodic pension expense $ 591 $ 637 $ 612 $ 876 $ 889 $ 920 Changes in plan assets and benefit obligations included in other comprehensive income (loss): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss (gain) 177 (1,619 ) 175 (789 ) 805 488 Amortization of: Prior service cost — — — — — — Actuarial loss (371 ) (389 ) (393 ) (310 ) (258 ) (233 ) Total recognized in other comprehensive income (loss) $ (194 ) $ (2,008 ) $ (218 ) $ (1,099 ) $ 547 $ 255 Weighted average assumptions used to determine expense: Discount rate 3.50 % 3.90 % 4.20 % 3.50 % 3.90 % 4.20 % Expected return on plan assets 5.90 % 6.25 % 6.50 % * * * Annual rate of salary increase * * * * * * Weighted average assumptions used to determine benefit obligations as of December 31: Discount rate 4.20 % 3.50 % 3.90 % 4.20 % 3.50 % 3.90 % Expected return on plan assets 5.90 % 6.25 % 6.50 % * * * Annual rate of salary increase * * * * * * ____________________ |
Fair value hierarchy for the Company's defined benefit pension plan assets | Fair values of the equity security funds and fixed income funds have been determined from public quotations. The following table presents the fair value hierarchy for the Company's defined benefit pension plan assets, excluding cash held. ($ in thousands) Fair Value Measurements at Reporting Date Using Total Level 1 Level 2 Level 3 December 31, 2018 Asset category Equity security funds (1) United States $ 8,198 $ — $ 8,198 $ — International 2,089 — 2,089 — Fixed income funds 11,003 — 11,003 — Short-term investment funds 800 800 — — Total $ 22,090 $ 800 $ 21,290 $ — December 31, 2017 Asset category Equity security funds (1) United States $ 10,517 $ — $ 10,517 $ — International 2,573 — 2,573 — Fixed income funds 12,165 — 12,165 — Short-term investments funds 588 588 — — Total $ 25,843 $ 588 $ 25,255 $ — ____________________ (1) |
Summary of minimum funding requirement and the expected full year contributions for the Company's plans | The following table discloses that minimum funding requirement and the expected full year contributions for the Company's plans. ($ in thousands) Defined Benefit Pension Plans Defined Benefit Plan Supplemental Defined Benefit Plans Minimum funding requirement for 2018 $ — N/A Expected contributions (approximations) for the year ended December 31, 2019 as of the time of this Form 10-K (1) — $ 1,307 ____________________ N/A - Not applicable. (1) HMEC's Annual Report on Form 10-K for the year ended December 31, 2018 |
Estimated future benefit payments | Estimated future benefit payments as of December 31, 2018 were as follows: ($ in thousands) 2019 2020 2021 2022 2023 2024-2028 Pension plans Defined benefit plan $ 2,668 $ 2,482 $ 2,225 $ 2,346 $ 1,971 $ 8,700 Supplemental retirement plans 1,307 1,292 1,275 1,255 1,232 5,701 |
Contingencies and Commitments (
Contingencies and Commitments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of future minimum lease payments | Future minimum lease payments under leases expiring subsequent to December 31, 2018 are as follows: ($ in thousands) As of December 31, 2018 2019 2020 2021 2022 2023 2024- 2028 2029 and beyond Minimum operating lease payments $ 2,580 $ 1,725 $ 1,200 $ 1,177 $ 483 $ — $ — |
Supplementary Data on Cash Fl_2
Supplementary Data on Cash Flows (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Reconciliation of net income to net cash provided by operating activities | A reconciliation of net income to net cash provided by operating activities as presented in the Consolidated Statements of Cash Flows is as follows: ($ in thousands) Years Ended December 31, 2018 2017 2016 Cash flows from operating activities Net income $ 18,343 $ 169,459 $ 83,765 Adjustments to reconcile net income to net cash provided by operating activities: Net investment (gains) losses 12,543 3,406 (4,123 ) Increase in accrued investment income 4,449 (3,404 ) (2,208 ) Increase (decrease) in accrued expenses (1,088 ) (2,240 ) 4,378 Depreciation and amortization 7,357 6,615 6,896 Increase in insurance liabilities 197,472 154,061 176,315 Increase in premium receivables (10,026 ) (12,917 ) (11,496 ) Increase in deferred policy acquisition costs (783 ) (7,967 ) (15,859 ) (Increase) decrease in reinsurance recoverables (21,317 ) 11 (481 ) Increase (decrease) in income tax liabilities 5,971 (21,291 ) (1,293 ) Other (12,033 ) (29,147 ) (24,461 ) Total adjustments 182,545 87,127 127,668 Net cash provided by operating activities $ 200,888 $ 256,586 $ 211,433 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Summarized financial information for these segments | Summarized financial information for these segments is as follows: ($ in thousands) Years Ended December 31, 2018 2017 2016 Insurance premiums and contract charges earned Property and Casualty $ 665,734 $ 648,263 $ 620,514 Retirement 31,269 28,003 24,937 Life 120,330 118,437 113,695 Total $ 817,333 $ 794,703 $ 759,146 Net investment income Property and Casualty $ 40,104 $ 36,178 $ 38,998 Retirement 262,634 261,994 249,410 Life 74,399 76,195 73,567 Corporate and Other 142 78 66 Intersegment eliminations (772 ) (815 ) (855 ) Total $ 376,507 $ 373,630 $ 361,186 Net income (loss) Property and Casualty $ (14,243 ) $ 17,790 $ 25,644 Retirement 41,736 88,473 50,674 Life 18,754 77,595 16,559 Corporate and Other (27,904 ) (14,399 ) (9,112 ) Total $ 18,343 $ 169,459 $ 83,765 |
Additional significant financial information for these segments | ($ in thousands) December 31, 2018 2017 2016 Assets Property and Casualty $ 1,236,362 $ 1,217,394 $ 1,110,958 Retirement 7,866,969 8,063,912 7,449,777 Life 1,821,351 1,815,732 1,912,771 Corporate and Other 149,014 143,784 140,104 Intersegment eliminations (41,800 ) (42,482 ) (36,786 ) Total $ 11,031,896 $ 11,198,340 $ 10,576,824 Additional significant financial information for these segments is as follows: ($ in thousands) Years Ended December 31, 2018 2017 2016 DAC amortization expense Property and Casualty $ 79,073 $ 76,967 $ 74,950 Retirement 23,186 17,759 14,635 Life 7,630 7,459 7,147 Total $ 109,889 $ 102,185 $ 96,732 Income tax expense (benefit) Property and Casualty $ (6,622 ) $ (3,279 ) $ 4,627 Retirement 10,000 (19,498 ) 20,334 Life 4,979 (51,876 ) 9,775 Corporate and Other (7,163 ) (6,119 ) (4,269 ) Total $ 1,194 $ (80,772 ) $ 30,467 |
Unaudited Selected Quarterly _2
Unaudited Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected quarterly financial data | Selected quarterly financial data is presented below. ($ in thousands, except per share data) Three Months Ended December 31, September 30, June 30, March 31, 2018 Insurance premiums written and contract deposits (1) $ 311,216 $ 338,097 $ 301,722 $ 284,008 Total revenues 278,535 311,318 306,257 295,489 Net income (loss) (20,257 ) 12,528 5,917 20,155 Per share information Basic Net income (loss) $ (0.49 ) $ 0.30 $ 0.14 $ 0.49 Shares of common stock - weighted average (2) 41,596 41,683 41,600 41,497 Diluted Net income (loss) $ (0.49 ) $ 0.30 $ 0.14 $ 0.48 Shares of common stock and equivalent shares - weighted average (2) 41,911 41,850 41,735 41,653 2017 Insurance premiums written and contract deposits (1) $ 300,416 $ 318,355 $ 311,614 $ 296,732 Total revenues 302,993 289,817 291,436 287,304 Net income 125,329 26,551 2,261 15,318 Per share information Basic Net income (3) $ 3.03 $ 0.64 $ 0.05 $ 0.37 Shares of common stock - weighted average (2) 41,419 41,433 41,368 41,135 Diluted Net income (3) $ 3.00 $ 0.64 $ 0.05 $ 0.37 Shares of common stock and equivalent shares - weighted average (2) 41,718 41,575 41,493 41,342 2016 Insurance premiums written and contract deposits (1) $ 315,917 $ 351,534 $ 311,879 $ 283,169 Total revenues 282,873 291,176 283,558 271,303 Net income 19,823 26,923 11,866 25,153 Per share information Basic Net income $ 0.48 $ 0.66 $ 0.29 $ 0.61 Shares of common stock - weighted average (2) 41,093 41,092 41,082 41,297 Diluted Net income $ 0.48 $ 0.65 $ 0.29 $ 0.61 Shares of common stock and equivalent shares - weighted average (2) 41,482 41,347 41,314 41,492 ____________________ (1) This measure is not based on accounting principles generally accepted in the U.S. (non-GAAP). An explanation of this measure is contained in the Glossary of Selected Terms included as an exhibit in the Company's reports filed with the SEC. (2) Rounded to thousands. (3) For the three months ended December 31, 2017, net income per basic share of $3.03 and net income per diluted share of $3.00 benefited $2.39 and $2.37 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Deferred Policy Acquisition Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Total | $ 298,742 | $ 257,826 |
Retirement (annuity) | ||
Segment Reporting Information [Line Items] | ||
Total | 209,231 | 174,661 |
Life | ||
Segment Reporting Information [Line Items] | ||
Total | 59,478 | 53,974 |
Property and Casualty | ||
Segment Reporting Information [Line Items] | ||
Total | $ 30,033 | $ 29,191 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Adjustments to Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Increase (decrease) to DAC amortization expense: | |||
Total | $ 4,231 | $ 881 | $ (707) |
Retirement | |||
Increase (decrease) to DAC amortization expense: | |||
Total | 3,948 | 1,081 | (313) |
Life | |||
Increase (decrease) to DAC amortization expense: | |||
Total | $ 283 | $ (200) | $ (394) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Goodwill by Reporting Unit (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Goodwill | $ 47,396 | $ 47,396 |
Retirement | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 28,025 | |
Life | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 9,911 | |
Property and Casualty | ||
Segment Reporting Information [Line Items] | ||
Goodwill | $ 9,460 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Property and Equipment Included in Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property and Equipment | ||
Property and equipment | $ 142,243 | $ 133,803 |
Less: accumulated depreciation | 101,267 | 94,862 |
Total | $ 40,976 | $ 38,941 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Investment Contract and Life Policy Reserves (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Investment contract reserves | $ 4,555,856 | $ 4,452,972 |
Life policy reserves | 1,155,337 | 1,120,763 |
Total | $ 5,711,193 | $ 5,573,735 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Guaranteed Minimum Death Benefit (Details) - Guarantee Minimum Death Benefit - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Net Amount at Risk by Product and Guarantee [Line Items] | ||
GMDB reserve | $ 258 | $ 152 |
Aggregate in-the-money death benefits under the GMDB provision | $ 48,083 | $ 28,345 |
Variable annuity contract value distribution based on GMDB feature: | ||
No guarantee | 30.00% | 29.00% |
Return of premium guarantee | 65.00% | 65.00% |
Guarantee of premium roll-up at an annual rate of 3% or 5% | 5.00% | 6.00% |
Total | 100.00% | 100.00% |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Fair Value Assumptions for Stock Option Pricing (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of stock options granted (in shares) | 223,208 | 222,828 | 307,176 |
Weighted average grant date fair value of stock options granted (in usd per share) | $ 7.16 | $ 6.57 | $ 5.01 |
Weighted average assumptions: | |||
Risk-free interest rate | 2.60% | 2.00% | 1.30% |
Expected dividend yield | 2.60% | 2.50% | 3.20% |
Expected life, in years | 4 years 9 months 18 days | 4 years 10 months 24 days | 4 years 10 months 24 days |
Expected volatility (based on historical volatility) | 21.50% | 21.40% | 25.60% |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Calculation of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basic: | |||||||||||||||
Net income (in usd) | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | $ 19,823 | $ 26,923 | $ 11,866 | $ 25,153 | $ 18,343 | $ 169,459 | $ 83,765 |
Weighted average number of common shares during the period (in thousands) | 41,596,000,000 | 41,683,000,000 | 41,600,000,000 | 41,497,000,000 | 41,419,000,000 | 41,433,000,000 | 41,368,000,000 | 41,135,000,000 | 41,093,000,000 | 41,092,000,000 | 41,082,000,000 | 41,297,000,000 | 41,570,492 | 41,364,546 | 41,158,349 |
Net income per share - basic (in usd per share) | $ (0.49) | $ 0.30 | $ 0.14 | $ 0.49 | $ 3.03 | $ 0.64 | $ 0.05 | $ 0.37 | $ 0.48 | $ 0.66 | $ 0.29 | $ 0.61 | $ 0.44 | $ 4.10 | $ 2.04 |
Diluted: | |||||||||||||||
Net income (in usd) | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | $ 19,823 | $ 26,923 | $ 11,866 | $ 25,153 | $ 18,343 | $ 169,459 | $ 83,765 |
Weighted average number of common shares during the period (in thousands) | 41,596,000,000 | 41,683,000,000 | 41,600,000,000 | 41,497,000,000 | 41,419,000,000 | 41,433,000,000 | 41,368,000,000 | 41,135,000,000 | 41,093,000,000 | 41,092,000,000 | 41,082,000,000 | 41,297,000,000 | 41,570,492 | 41,364,546 | 41,158,349 |
Weighted average number of common equivalent shares to reflect the dilutive effect of common stock equivalent securities (in thousands): | |||||||||||||||
Stock options | 100,000 | 112,000 | 100,000 | ||||||||||||
CSUs related to deferred compensation for employees | 25,000 | 25,000 | 52,000 | ||||||||||||
RSUs related to incentive compensation | 199,000 | 63,000 | 166,000 | ||||||||||||
Total common and common equivalent shares adjusted to calculate diluted earnings per share (in thousands) | 41,911,000,000 | 41,850,000,000 | 41,735,000,000 | 41,653,000,000 | 41,718,000,000 | 41,575,000,000 | 41,493,000,000 | 41,342,000,000 | 41,482,000,000 | 41,347,000,000 | 41,314,000,000 | 41,492,000,000 | 41,894,232 | 41,564,979 | 41,475,516 |
Net income per share - diluted (in usd per share) | $ (0.49) | $ 0.30 | $ 0.14 | $ 0.48 | $ 3 | $ 0.64 | $ 0.05 | $ 0.37 | $ 0.48 | $ 0.65 | $ 0.29 | $ 0.61 | $ 0.44 | $ 4.08 | $ 2.02 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Components of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||
Net income | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | $ 19,823 | $ 26,923 | $ 11,866 | $ 25,153 | $ 18,343 | $ 169,459 | $ 83,765 |
Change in net unrealized investment gains (losses) on securities: | |||||||||||||||
Net unrealized investment gains (losses) on securities arising during the period | (275,094) | 105,475 | 6,144 | ||||||||||||
Less: reclassification adjustment for net gains (losses) included in income before income tax | (16,363) | (4,863) | 5,176 | ||||||||||||
Total, before tax | (258,731) | 110,338 | 968 | ||||||||||||
Income tax expense (benefit) | (55,495) | 35,933 | 397 | ||||||||||||
Total, net of tax | (203,236) | 74,405 | 571 | ||||||||||||
Change in net funded status of benefit plans: | |||||||||||||||
Before tax | 1,294 | 1,461 | (37) | ||||||||||||
Income tax expense (benefit) | 262 | 727 | (14) | ||||||||||||
Total, net of tax | 1,032 | 734 | (23) | ||||||||||||
Total comprehensive income (loss) | $ (183,861) | $ 244,598 | $ 84,313 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,501,573 | $ 1,293,982 | |
Other comprehensive income (loss) before reclassifications | (200,090) | 71,978 | $ 3,912 |
Amounts reclassified from accumulated other comprehensive income (loss) | 12,927 | 3,161 | (3,364) |
Cumulative effect of change in accounting principle | (15,041) | 0 | 0 |
Reclassification of deferred taxes | 47,900 | ||
Net current period other comprehensive income (loss) | (202,204) | 123,039 | 548 |
Ending balance | 1,290,550 | 1,501,573 | 1,293,982 |
Stranded deferred tax assets | (2,134) | ||
Stranded deferred tax liabilities | 50,034 | ||
Retained earnings | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 1,231,177 | 1,155,732 | 1,116,277 |
Cumulative effect of change in accounting principle | 15,041 | 0 | 0 |
Reclassification of deferred taxes | 0 | (47,900) | 0 |
Ending balance | 1,216,582 | 1,231,177 | 1,155,732 |
Total | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 286,960 | 163,921 | 163,373 |
Cumulative effect of change in accounting principle | (15,041) | 0 | 0 |
Reclassification of deferred taxes | 0 | 47,900 | 0 |
Ending balance | 84,756 | 286,960 | 163,921 |
Unrealized Gains and Losses on Fixed Maturity and Equity Securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 300,177 | 175,738 | 175,167 |
Other comprehensive income (loss) before reclassifications | (201,122) | 71,244 | 3,935 |
Amounts reclassified from accumulated other comprehensive income (loss) | 12,927 | 3,161 | (3,364) |
Cumulative effect of change in accounting principle | (15,041) | ||
Reclassification of deferred taxes | 50,034 | ||
Net current period other comprehensive income (loss) | (203,236) | 124,439 | 571 |
Ending balance | 96,941 | 300,177 | 175,738 |
Defined Benefit Plans | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (13,217) | (11,817) | (11,794) |
Other comprehensive income (loss) before reclassifications | 1,032 | 734 | (23) |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | 0 |
Cumulative effect of change in accounting principle | 0 | ||
Reclassification of deferred taxes | (2,134) | ||
Net current period other comprehensive income (loss) | 1,032 | (1,400) | (23) |
Ending balance | $ (12,185) | $ (13,217) | $ (11,817) |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basis of Presentation [Line Items] | |||
Amortization term for acquisition costs of annuity contracts | 20 years | ||
Amortization term for acquisition costs of indexed universal life contracts | 30 years | ||
Amortization of acquisition costs for individual life contracts, first term | 10 years | ||
Amortization of acquisition costs for individual life contracts, second term | 15 years | ||
Amortization of acquisition costs for individual life contracts, third term | 20 years | ||
Amortization of acquisition costs for individual life contracts, fourth term | 30 years | ||
Amortization of acquisition costs for property and casualty contracts, first term | 6 months | ||
Amortization of acquisition costs for property and casualty contracts, second term | 12 months | ||
Weighted average fair value of nonvested options outstanding | $ 6.65 | ||
Unrecognized share-based compensation expense, nonvested options | $ 2,348 | ||
Antidilutive securities exclude from EPS computation (in shares) | 410,644 | ||
Other comprehensive income (loss), reclassification adjustment from AOCI from sale of securities | $ (16,363) | $ (4,863) | $ 5,176 |
Other tax expense (benefit) | $ (3,436) | (1,702) | 1,812 |
Minimum exercise price (in usd per share) | $ 41.95 | ||
Maximum exercise price (in usd per share) | $ 44.75 | ||
Reclassification of deferred taxes | 47,900 | ||
Accounting Standards Update 2016-02 | Pro Forma | |||
Basis of Presentation [Line Items] | |||
Operating lease liability | $ 14,500 | ||
Employee Stock Option | |||
Basis of Presentation [Line Items] | |||
Share-based compensation expense | 1,217 | 1,347 | 1,207 |
Restricted Stock Units | |||
Basis of Presentation [Line Items] | |||
Share-based compensation expense | 6,638 | 6,459 | $ 6,929 |
Unrecognized share-based compensation expense, equity instruments other than options | 5,747 | ||
Other policyholder funds | |||
Basis of Presentation [Line Items] | |||
FHLB Advances | $ 625,000 | ||
HMLIC | |||
Basis of Presentation [Line Items] | |||
Percentage of reversion to mean approach utilized to amortized policy acquisition costs | 10.00% | ||
FHLB Interest rate | 2.47% | ||
HMLIC | Maturing On September 13, 2019 | |||
Basis of Presentation [Line Items] | |||
FHLB Advances | $ 250,000 | ||
HMLIC | Maturing On December 15, 2023 | |||
Basis of Presentation [Line Items] | |||
FHLB Advances | 125,000 | ||
HMLIC | Maturing On January 16, 2026 | |||
Basis of Presentation [Line Items] | |||
FHLB Advances | 200,000 | ||
HMLIC | Investment Contracts | |||
Basis of Presentation [Line Items] | |||
FHLB Advances | $ 625,000 | ||
Maximum | |||
Basis of Presentation [Line Items] | |||
Reserve investment yield assumption life | 3.50% | ||
Minimum | |||
Basis of Presentation [Line Items] | |||
Reserve investment yield assumption life | 8.00% | ||
Real Estate Property | Maximum | |||
Basis of Presentation [Line Items] | |||
Property, plant and equipment, useful life | 45 years | ||
Real Estate Property | Minimum | |||
Basis of Presentation [Line Items] | |||
Property, plant and equipment, useful life | 20 years | ||
Lease hold Improvements And Other Property And Equipment | Maximum | |||
Basis of Presentation [Line Items] | |||
Property, plant and equipment, useful life | 10 years | ||
Lease hold Improvements And Other Property And Equipment | Minimum | |||
Basis of Presentation [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Interest Sensitive Life Contracts | |||
Basis of Presentation [Line Items] | |||
Amortization period of acquisition costs of interest sensitive life contracts | 20 years | ||
Deferred policy acquisition costs, impact of unrealized investment gains (losses) | $ 17,862 | 57,995 | |
Unrealized Gains and Losses on Fixed Maturity and Equity Securities | |||
Basis of Presentation [Line Items] | |||
Reclassification of deferred taxes | 50,034 | ||
Defined Benefit Plans | |||
Basis of Presentation [Line Items] | |||
Reclassification of deferred taxes | $ (2,134) |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net Investment Income [Line Items] | |||
Total investment income | $ 386,707 | $ 383,470 | $ 370,753 |
Investment expenses | (10,200) | (9,840) | (9,567) |
Net investment income | 376,507 | 373,630 | 361,186 |
Fixed maturity securities | |||
Net Investment Income [Line Items] | |||
Total investment income | 353,303 | 354,290 | 342,773 |
Equity securities | |||
Net Investment Income [Line Items] | |||
Total investment income | 6,017 | 6,411 | 4,703 |
Limited partnership interests | |||
Net Investment Income [Line Items] | |||
Total investment income | 15,406 | 12,555 | 13,609 |
Short-term and other investments | |||
Net Investment Income [Line Items] | |||
Total investment income | $ 11,981 | $ 10,214 | $ 9,668 |
Investments - Realized Investme
Investments - Realized Investment Gains (Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Gain (Loss) on Securities [Line Items] | |||
Net investment gains (losses) | $ (12,543) | $ (3,406) | $ 4,123 |
Fixed maturity securities | |||
Gain (Loss) on Securities [Line Items] | |||
Net investment gains (losses) | (5,713) | (8,867) | 5,784 |
Equity securities | |||
Gain (Loss) on Securities [Line Items] | |||
Net investment gains (losses) | (10,649) | 4,003 | (608) |
Short-term and other investments | |||
Gain (Loss) on Securities [Line Items] | |||
Net investment gains (losses) | $ 3,819 | $ 1,458 | $ (1,053) |
Investments - Fixed Maturities
Investments - Fixed Maturities and Equity Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost/Cost | $ 7,373,911 | $ 7,302,950 |
Amortized Cost/Cost | 0 | 116,320 |
Fair Value | 7,515,318 | 7,724,075 |
Fair Value | 111,750 | 135,466 |
Fixed maturity securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost/Cost | 7,373,911 | 7,302,950 |
Unrealized Gains | 249,085 | 443,633 |
Unrealized Losses | 107,678 | 22,508 |
Fair Value | 7,515,318 | 7,724,075 |
OTTI in AOCI | 0 | 0 |
Mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost/Cost | 778,038 | 669,297 |
Unrealized Gains | 22,724 | 30,460 |
Unrealized Losses | 13,321 | 3,032 |
Fair Value | 787,441 | 696,725 |
OTTI in AOCI | 0 | 0 |
Other, including U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost/Cost | 835,096 | 714,613 |
Unrealized Gains | 16,127 | 26,311 |
Unrealized Losses | 17,681 | 5,516 |
Fair Value | 833,542 | 735,408 |
OTTI in AOCI | 0 | 0 |
Municipal bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost/Cost | 1,884,313 | 1,711,581 |
Unrealized Gains | 133,150 | 184,107 |
Unrealized Losses | 13,494 | 2,435 |
Fair Value | 2,003,969 | 1,893,253 |
OTTI in AOCI | 0 | 0 |
Foreign government bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost/Cost | 83,343 | 96,780 |
Unrealized Gains | 2,321 | 5,958 |
Unrealized Losses | 760 | 0 |
Fair Value | 84,904 | 102,738 |
OTTI in AOCI | 0 | 0 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost/Cost | 2,054,105 | 2,409,426 |
Unrealized Gains | 64,296 | 173,862 |
Unrealized Losses | 38,891 | 4,334 |
Fair Value | 2,079,510 | 2,578,954 |
OTTI in AOCI | 0 | 0 |
Other mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost/Cost | 1,739,016 | 1,701,253 |
Unrealized Gains | 10,467 | 22,935 |
Unrealized Losses | 23,531 | 7,191 |
Fair Value | 1,725,952 | 1,716,997 |
OTTI in AOCI | 0 | 0 |
Equity securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost/Cost | 116,320 | |
Unrealized Gains | 19,425 | |
Unrealized Losses | 279 | |
Fair Value | 135,466 | |
OTTI in AOCI | 0 | |
FNMA Obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 441,308 | 361,955 |
FHLMC Obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 417,308 | 400,001 |
GNMA Obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | $ 96,466 | $ 104,168 |
Investments - Gross Unrealized
Investments - Gross Unrealized Losses of Fixed Maturities and Equity Securities in Unrealized Loss Position (Details) $ in Thousands | Dec. 31, 2018USD ($)security | Dec. 31, 2017USD ($)security |
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | $ 910,409 | |
Fixed maturity securities, Fair Value, More than 12 Months | 448,829 | |
Fixed maturity securities, Fair Value, Total | 1,359,238 | |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 8,743 | |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 14,044 | |
Fixed maturity securities, Gross Unrealized Losses, Total | $ 22,787 | |
Number of positions with a gross unrealized loss position, 12 Months or Less | security | 1,052 | 354 |
Number of position with a gross unrealized loss position, more than 12 months | security | 359 | 158 |
Number of position with a gross unrealized loss position, Total | security | 1,411 | 512 |
Fair value as a percentage of total fixed maturities and equity securities fair value, 12 Months or Less | 32.70% | 11.60% |
Fair value as a percentage of total fixed maturities and equity securities fair value, more than 12 months | 11.70% | 5.70% |
Fair value as a percentage of total fixed maturities and equity securities fair value, Total | 44.40% | 17.30% |
Total | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | $ 2,497,440 | $ 904,382 |
Fixed maturity securities, Fair Value, More than 12 Months | 889,418 | 447,552 |
Fixed maturity securities, Fair Value, Total | 3,386,858 | 1,351,934 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 63,640 | 8,494 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 44,038 | 14,014 |
Fixed maturity securities, Gross Unrealized Losses, Total | 107,678 | 22,508 |
Mortgage-backed securities | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 193,447 | 134,032 |
Fixed maturity securities, Fair Value, More than 12 Months | 157,295 | 40,606 |
Fixed maturity securities, Fair Value, Total | 350,742 | 174,638 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 5,026 | 1,053 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 8,295 | 1,979 |
Fixed maturity securities, Gross Unrealized Losses, Total | 13,321 | 3,032 |
Other | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 263,497 | 168,634 |
Fixed maturity securities, Fair Value, More than 12 Months | 246,213 | 122,753 |
Fixed maturity securities, Fair Value, Total | 509,710 | 291,387 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 6,746 | 1,849 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 10,935 | 3,667 |
Fixed maturity securities, Gross Unrealized Losses, Total | 17,681 | 5,516 |
Municipal bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 291,869 | 29,437 |
Fixed maturity securities, Fair Value, More than 12 Months | 95,297 | 79,140 |
Fixed maturity securities, Fair Value, Total | 387,166 | 108,577 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 7,603 | 100 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 5,891 | 2,335 |
Fixed maturity securities, Gross Unrealized Losses, Total | 13,494 | 2,435 |
Foreign government bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 16,250 | 0 |
Fixed maturity securities, Fair Value, More than 12 Months | 0 | 0 |
Fixed maturity securities, Fair Value, Total | 16,250 | 0 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 760 | 0 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 0 | 0 |
Fixed maturity securities, Gross Unrealized Losses, Total | 760 | 0 |
Corporate bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 818,519 | 115,113 |
Fixed maturity securities, Fair Value, More than 12 Months | 99,171 | 36,081 |
Fixed maturity securities, Fair Value, Total | 917,690 | 151,194 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 27,429 | 2,701 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 11,462 | 1,633 |
Fixed maturity securities, Gross Unrealized Losses, Total | 38,891 | 4,334 |
Other mortgage-backed securities | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 913,858 | 457,166 |
Fixed maturity securities, Fair Value, More than 12 Months | 291,442 | 168,972 |
Fixed maturity securities, Fair Value, Total | 1,205,300 | 626,138 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 16,076 | 2,791 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 7,455 | 4,400 |
Fixed maturity securities, Gross Unrealized Losses, Total | $ 23,531 | 7,191 |
Equity securities | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 6,027 | |
Fixed maturity securities, Fair Value, More than 12 Months | 1,277 | |
Fixed maturity securities, Fair Value, Total | 7,304 | |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 249 | |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 30 | |
Fixed maturity securities, Gross Unrealized Losses, Total | $ 279 |
Investments - Credit Losses (De
Investments - Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cumulative credit loss | ||
Beginning of period | $ 3,825 | $ 13,703 |
New credit losses | 0 | 0 |
Increases to previously recognized credit losses | 246 | 1,995 |
Losses related to securities sold or paid down during the period | (2,542) | (11,873) |
End of period | $ 1,529 | $ 3,825 |
Investments - Maturities of Fix
Investments - Maturities of Fixed Maturities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Amortized Cost | ||
Due in 1 year or less | $ 358,797 | |
Due after 1 year through 5 years | 1,690,400 | |
Due after 5 years through 10 years | 2,453,572 | |
Due after 10 years through 20 years | 1,931,599 | |
Due after 20 years | 939,543 | |
Amortized Cost/Cost | 7,373,911 | $ 7,302,950 |
Fair Value | ||
Due in 1 year or less | 363,049 | |
Due after 1 year through 5 years | 1,713,593 | |
Due after 5 years through 10 years | 2,465,337 | |
Due after 10 years through 20 years | 1,991,726 | |
Due after 20 years | 981,613 | |
Total | $ 7,515,318 | $ 7,724,075 |
Percent of Total Fair Value | ||
Due in 1 year or less | 4.80% | |
Due after 1 year through 5 years | 22.80% | |
Due after 5 years through 10 years | 32.80% | |
Due after 10 years through 20 years | 26.50% | |
Due after 20 years | 13.10% | |
Total | 100.00% | |
Average option-adjusted duration, in years | 5 years 10 months 24 days |
Investments - Sales of Fixed Ma
Investments - Sales of Fixed Maturities and Equity Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Securities, Available-for-sale [Line Items] | |||
Proceeds received | $ 625,527 | $ 500,760 | $ 429,251 |
Proceeds received | 25,498 | 50,113 | 21,210 |
Fixed maturity securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross gains realized | 10,536 | 13,570 | 15,915 |
Gross losses realized | (14,932) | (11,842) | (4,163) |
Equity securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross gains realized | 8,592 | 7,753 | 2,869 |
Gross losses realized | $ (917) | $ (1,972) | $ (935) |
Investments - Net Unrealized In
Investments - Net Unrealized Investment Gains and Losses on Fixed Maturities and Equity Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,501,573 | $ 1,293,982 | |
Change in unrealized investment gains (losses) on securities | (188,195) | 74,405 | $ 571 |
Cumulative effect of change in accounting principle | (15,041) | 0 | 0 |
Ending balance | 1,290,550 | 1,501,573 | 1,293,982 |
Unrealized Gains and Losses on Fixed Maturity and Equity Securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 300,177 | 175,738 | 175,167 |
Cumulative effect of change in accounting principle | (15,041) | ||
Ending balance | 96,941 | 300,177 | 175,738 |
Unrealized Gains and Losses on Fixed Maturity and Equity Securities | Fixed maturity securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 286,176 | 202,941 | 201,363 |
Change in unrealized investment gains (losses) on securities | (172,350) | 80,073 | 4,943 |
Reclassification of net investment (gains) losses on securities to net income | (12,927) | (3,162) | 3,365 |
Ending balance | $ 111,712 | $ 286,176 | $ 202,941 |
Investments - Offsetting of Ass
Investments - Offsetting of Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Asset derivatives: | ||
Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheets | $ 2,647 | $ 15,550 |
Free-standing derivatives | ||
Asset derivatives: | ||
Gross Amounts | 2,647 | 15,550 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheets | 2,647 | 15,550 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Cash Collateral Received | 1,868 | 15,584 |
Net Amount | $ 779 | $ (34) |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Investment Holdings [Line Items] | ||
Investment grade rating | 95.50% | |
Fair value of issued securities | $ 7,515,318 | $ 7,724,075 |
FHLB funding agreements | 675,000 | 625,000 |
Limited partnership interests | 328,516 | 247,266 |
Governmental agencies as required by law in various states | ||
Investment Holdings [Line Items] | ||
Fair value of issued securities | 17,695 | 17,985 |
FHLB of Chicago | ||
Investment Holdings [Line Items] | ||
Fair value of issued securities | $ 740,016 | $ 686,790 |
Investments - Net Realized Gain
Investments - Net Realized Gains (Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |||
Total other-than-temporary impairment losses on securities | $ (1,530) | $ (12,620) | $ (11,401) |
Portion of losses recognized in other comprehensive income (loss) | 0 | 0 | (290) |
Net other-than-temporary impairment losses on securities recognized in earnings | (1,530) | (12,620) | (11,111) |
Sales and other, net | 3,491 | 7,756 | 16,286 |
Change in fair value - equity securities | (18,323) | 0 | 0 |
Change in fair value and gains realized on settlements - derivative instruments | 3,819 | 1,458 | (1,052) |
Total | $ (12,543) | $ (3,406) | $ 4,123 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Financial Instruments Measured and Carried at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Carrying Amount | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | $ 7,765,437 | $ 7,950,184 |
Investment contract and life policy reserves, embedded derivatives | 248 | 594 |
Other policyholder funds, embedded derivatives | 78,700 | 80,733 |
Carrying Amount | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 7,515,318 | 7,724,075 |
Carrying Amount | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 122,222 | 62,593 |
Carrying Amount | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 787,441 | 696,725 |
Carrying Amount | Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 833,542 | 735,408 |
Carrying Amount | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 2,003,969 | 1,893,253 |
Carrying Amount | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 84,904 | 102,738 |
Carrying Amount | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 2,079,510 | 2,578,954 |
Carrying Amount | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 1,725,952 | 1,716,997 |
Carrying Amount | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 111,750 | 135,466 |
Carrying Amount | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 16,147 | 28,050 |
Fair Value | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 7,765,437 | 7,950,184 |
Investment contract and life policy reserves, embedded derivatives | 248 | 594 |
Other policyholder funds, embedded derivatives | 78,700 | 80,733 |
Fair Value | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 7,515,318 | 7,724,075 |
Fair Value | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 122,222 | 62,593 |
Fair Value | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 787,441 | 696,725 |
Fair Value | Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 833,542 | 735,408 |
Fair Value | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 2,003,969 | 1,893,253 |
Fair Value | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 84,904 | 102,738 |
Fair Value | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 2,079,510 | 2,578,954 |
Fair Value | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 1,725,952 | 1,716,997 |
Fair Value | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 111,750 | 135,466 |
Fair Value | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 16,147 | 28,050 |
Fair Value | Level 1 | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 207,198 | 172,539 |
Investment contract and life policy reserves, embedded derivatives | 0 | 0 |
Other policyholder funds, embedded derivatives | 0 | 0 |
Fair Value | Level 1 | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 25,572 | 27,738 |
Fair Value | Level 1 | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 117,296 | 62,593 |
Fair Value | Level 1 | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 1 | Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 13,291 | 13,393 |
Fair Value | Level 1 | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 1 | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 1 | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 12,281 | 14,345 |
Fair Value | Level 1 | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 1 | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 64,330 | 82,208 |
Fair Value | Level 1 | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 2 | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 7,309,750 | 7,547,388 |
Investment contract and life policy reserves, embedded derivatives | 248 | 594 |
Other policyholder funds, embedded derivatives | 0 | 0 |
Fair Value | Level 2 | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 7,241,262 | 7,466,086 |
Fair Value | Level 2 | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 4,926 | 0 |
Fair Value | Level 2 | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 784,224 | 693,375 |
Fair Value | Level 2 | Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 820,251 | 722,015 |
Fair Value | Level 2 | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 1,956,438 | 1,843,925 |
Fair Value | Level 2 | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 84,904 | 102,738 |
Fair Value | Level 2 | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 1,986,487 | 2,491,630 |
Fair Value | Level 2 | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 1,608,958 | 1,612,403 |
Fair Value | Level 2 | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 47,415 | 53,252 |
Fair Value | Level 2 | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 16,147 | 28,050 |
Fair Value | Level 3 | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 248,489 | 230,257 |
Investment contract and life policy reserves, embedded derivatives | 0 | 0 |
Other policyholder funds, embedded derivatives | 78,700 | 80,733 |
Fair Value | Level 3 | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 248,484 | 230,251 |
Fair Value | Level 3 | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 3 | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 3,217 | 3,350 |
Fair Value | Level 3 | Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 3 | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 47,531 | 49,328 |
Fair Value | Level 3 | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 3 | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 80,742 | 72,979 |
Fair Value | Level 3 | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 116,994 | 104,594 |
Fair Value | Level 3 | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 5 | 6 |
Fair Value | Level 3 | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Transfers Between Different Fair Value Levels (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Financial Assets | ||
Beginning balance | $ 230,257 | $ 212,104 |
Transfers into Level 3 | 91,259 | 86,788 |
Transfers out of Level 3 | (16,479) | (29,102) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | (484) | (1,833) |
Net unrealized investment gains (losses) included in OCI | (9,605) | 6,713 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | (6,326) | (11,178) |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (40,133) | (33,235) |
Ending balance | 248,489 | 230,257 |
Financial Liabilities | ||
Beginning balance | 80,733 | 59,393 |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Total gains or losses | ||
Net realized (gains) losses included in net income related to financial liabilities | (7,518) | 12,942 |
Net unrealized investment gains (losses) included in OCI | 0 | 0 |
Purchases | 0 | 0 |
Issuances | 11,183 | 12,605 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (5,698) | (4,207) |
Ending balance | 78,700 | 80,733 |
Short-term Investments | ||
Financial Assets | ||
Beginning balance | 0 | 751 |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | (751) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | 0 | 0 |
Net unrealized investment gains (losses) included in OCI | 0 | 0 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | 0 | 0 |
Ending balance | 0 | 0 |
Municipal bonds | ||
Financial Assets | ||
Beginning balance | 49,328 | 46,497 |
Transfers into Level 3 | 0 | 5,214 |
Transfers out of Level 3 | 0 | (5,557) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | 0 | 0 |
Net unrealized investment gains (losses) included in OCI | (1,195) | 3,977 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (602) | (803) |
Ending balance | 47,531 | 49,328 |
Corporate bonds | ||
Financial Assets | ||
Beginning balance | 72,979 | 60,191 |
Transfers into Level 3 | 40,488 | 38,483 |
Transfers out of Level 3 | (11,279) | (16,252) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | (487) | (1) |
Net unrealized investment gains (losses) included in OCI | (2,840) | 661 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | (6,135) | (1,999) |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (11,984) | (8,104) |
Ending balance | 80,742 | 72,979 |
Other mortgage-backed securities | ||
Financial Assets | ||
Beginning balance | 107,944 | 104,659 |
Transfers into Level 3 | 50,771 | 43,091 |
Transfers out of Level 3 | (5,200) | (6,542) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | 0 | (1,832) |
Net unrealized investment gains (losses) included in OCI | (5,570) | 2,075 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | (187) | (9,179) |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (27,547) | (24,328) |
Ending balance | 120,211 | 107,944 |
Total | ||
Financial Assets | ||
Beginning balance | 230,251 | 211,347 |
Transfers into Level 3 | 91,259 | 86,788 |
Transfers out of Level 3 | (16,479) | (28,351) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | (487) | (1,833) |
Net unrealized investment gains (losses) included in OCI | (9,605) | 6,713 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | (6,322) | (11,178) |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (40,133) | (33,235) |
Ending balance | 248,484 | 230,251 |
Equity securities | ||
Financial Assets | ||
Beginning balance | 6 | 6 |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | 3 | 0 |
Net unrealized investment gains (losses) included in OCI | 0 | 0 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | (4) | 0 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | 0 | 0 |
Ending balance | $ 5 | $ 6 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Level 1 | ||
Investments | ||
Other investments | $ 0 | $ 0 |
Financial Liabilities | ||
Investment contract and life policy reserves, fixed annuity contracts | 0 | 0 |
Investment contract and life policy reserves, account values on life contracts | 0 | 0 |
Other policyholder funds | 0 | 0 |
Long-term debt | 0 | 0 |
Level 2 | ||
Investments | ||
Other investments | 0 | 0 |
Financial Liabilities | ||
Investment contract and life policy reserves, fixed annuity contracts | 0 | 0 |
Investment contract and life policy reserves, account values on life contracts | 0 | 0 |
Other policyholder funds | 626,325 | 575,622 |
Long-term debt | 291,938 | 311,315 |
Level 3 | ||
Investments | ||
Other investments | 161,449 | 159,575 |
Financial Liabilities | ||
Investment contract and life policy reserves, fixed annuity contracts | 4,478,338 | 4,366,334 |
Investment contract and life policy reserves, account values on life contracts | 90,402 | 88,620 |
Other policyholder funds | 62,962 | 67,906 |
Long-term debt | 0 | 0 |
Carrying Amount | ||
Investments | ||
Other investments | 156,725 | 154,898 |
Financial Liabilities | ||
Investment contract and life policy reserves, fixed annuity contracts | 4,555,849 | 4,452,972 |
Investment contract and life policy reserves, account values on life contracts | 87,229 | 82,911 |
Other policyholder funds | 689,287 | 643,528 |
Long-term debt | 297,740 | 297,469 |
Fair Value | ||
Investments | ||
Other investments | 161,449 | 159,575 |
Financial Liabilities | ||
Investment contract and life policy reserves, fixed annuity contracts | 4,478,338 | 4,366,334 |
Investment contract and life policy reserves, account values on life contracts | 90,402 | 88,620 |
Other policyholder funds | 689,287 | 643,528 |
Long-term debt | $ 291,938 | $ 311,315 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Percentage of investment portfolio fair value pricing services or index price | 92.30% | 90.70% | |
Net investment gains (losses) | $ 7,931 | $ (13,410) | $ (5,076) |
Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Percentage of investment portfolio fair value pricing services or index price | 3.00% | ||
Realized loss on impairment of securities | $ 484 | 1,833 | |
Net investment gains (losses) | $ (7,518) | $ 12,942 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Derivatives in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Derivative instruments, included in Short-term and other investments | $ 2,647 | $ 15,550 |
Liabilities | ||
Fixed indexed annuities - embedded derivatives, included in Other policyholder funds | 78,700 | 80,733 |
Indexed universal life - embedded derivatives, included in Investment contract and life policy reserves | $ 248 | $ 594 |
Derivative Instruments - Fair_2
Derivative Instruments - Fair Value of Derivatives Included in Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Change in fair value of derivatives: | |||
Net investment gains (losses) | $ (4,112) | $ 14,867 | $ 4,024 |
Change in fair value of embedded derivatives: | |||
Net investment gains (losses) | $ 7,931 | $ (13,410) | $ (5,076) |
Derivative Instruments - Notion
Derivative Instruments - Notional and Fair Value Amounts of Derivative Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Notional Amount | $ 278,200 | $ 246,800 |
Fair Value | 2,647 | 15,550 |
Bank of America, N.A. | ||
Derivative [Line Items] | ||
Notional Amount | 144,500 | 85,100 |
Fair Value | 870 | 6,320 |
Barclays Bank PLC | ||
Derivative [Line Items] | ||
Notional Amount | 28,500 | 48,900 |
Fair Value | 247 | 1,828 |
Citigroup Inc. | ||
Derivative [Line Items] | ||
Notional Amount | 0 | 0 |
Fair Value | 0 | 0 |
Credit Suisse International | ||
Derivative [Line Items] | ||
Notional Amount | 16,100 | 21,100 |
Fair Value | 55 | 1,444 |
Societe Generale | ||
Derivative [Line Items] | ||
Notional Amount | 89,100 | 91,700 |
Fair Value | $ 1,475 | $ 5,958 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivatives, Fair Value [Line Items] | ||
Fixed indexed annuities term minimum | 10 years | |
Financial instrument, maximum exposure | $ 250 | |
Other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of collateral | $ 1,868 | $ 15,584 |
Property and Casualty Unpaid _3
Property and Casualty Unpaid Claims and Claim Expenses - Summary of Reinsurance Reserve Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Gross reserves, beginning of year | $ 347,749 | ||
Less: reinsurance recoverables | 68,446 | ||
Claims and claim expense payments for claims occurring during: | |||
Plus: reinsurance recoverables | 99,510 | $ 68,446 | |
Gross reserves, end of year | 396,714 | 347,749 | |
Benefits, claims and settlement expenses, Net Amount | 637,560 | 582,306 | $ 541,004 |
Property and Casualty segment | |||
Segment Reporting Information [Line Items] | |||
Gross reserves, beginning of year | 319,182 | 307,757 | 301,569 |
Less: reinsurance recoverables | 57,409 | 61,199 | 50,332 |
Net reserves, beginning of year | 261,773 | 246,558 | 251,237 |
Incurred claims and claim expenses: | |||
Claims occurring in the current year | 547,959 | 498,989 | 471,099 |
Decrease in estimated reserves for claims occurring in prior years | (300) | (2,700) | (7,000) |
Total claims and claim expenses incurred | 547,659 | 496,289 | 464,099 |
Claims and claim expense payments for claims occurring during: | |||
Current year | 369,194 | 333,385 | 323,025 |
Prior years | 162,783 | 147,689 | 145,753 |
Total claims and claim expense payments | 531,977 | 481,074 | 468,778 |
Net reserves, end of year | 277,455 | 261,773 | 246,558 |
Plus: reinsurance recoverables | 89,725 | 57,409 | 61,199 |
Gross reserves, end of year | 367,180 | 319,182 | 307,757 |
Life and Annuity segments | |||
Segment Reporting Information [Line Items] | |||
Net reserves, beginning of year | 28,567 | 22,131 | |
Claims and claim expense payments for claims occurring during: | |||
Net reserves, end of year | 29,534 | 28,567 | 22,131 |
Benefits, claims and settlement expenses, Net Amount | $ 89,901 | $ 86,017 | $ 76,905 |
Property and Casualty Unpaid _4
Property and Casualty Unpaid Claims and Claim Expenses - Average Annual Percentage Payout Of Incurred Claims by Age (Details) | Dec. 31, 2018 |
Homeowners | |
Year One | 78.50% |
Year Two | 17.30% |
Year Three | 2.40% |
Year Four | 0.90% |
Year Five | 0.70% |
Year Six | 0.20% |
Year Seven | 0.00% |
Year Eight | 0.00% |
Year Nine | 0.00% |
Year Ten | 0.00% |
Auto liability | |
Year One | 40.90% |
Year Two | 35.10% |
Year Three | 13.70% |
Year Four | 6.10% |
Year Five | 2.70% |
Year Six | 1.10% |
Year Seven | 0.30% |
Year Eight | 0.10% |
Year Nine | 0.00% |
Year Ten | 0.00% |
Auto physical damage | |
Year One | 95.60% |
Year Two | 4.40% |
Year Three | 0.00% |
Year Four | 0.00% |
Year Five | 0.00% |
Year Six | 0.00% |
Year Seven | 0.00% |
Year Eight | 0.00% |
Year Nine | 0.00% |
Year Ten | 0.00% |
Property and Casualty Unpaid _5
Property and Casualty Unpaid Claims and Claim Expenses - Incurred and Paid Claims by Accident Year on a Net Basis (Details) $ in Thousands | Dec. 31, 2018USD ($)claim | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2010USD ($) | Dec. 31, 2009USD ($) |
Homeowners | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | $ 1,235,870 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 1,194,897 | |||||||||
Outstanding prior to 2009 | 66 | |||||||||
Prior years paid | 0 | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 41,039 | |||||||||
Homeowners | 2009 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 113,168 | $ 112,958 | $ 112,900 | $ 113,216 | $ 113,230 | $ 113,357 | $ 113,096 | $ 112,970 | $ 112,280 | $ 113,274 |
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 21,810,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 112,858 | 112,851 | 112,848 | 112,827 | 112,720 | 112,554 | 110,324 | 108,217 | 104,407 | 81,570 |
Homeowners | 2010 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 132,627 | 132,905 | 132,859 | 133,136 | 133,216 | 133,235 | 133,358 | 136,907 | 140,994 | |
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 25,149,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 132,602 | 132,602 | 132,599 | 132,604 | 132,523 | 132,246 | 129,790 | 124,326 | 98,190 | |
Homeowners | 2011 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 148,079 | 148,370 | 148,414 | 148,755 | 148,860 | 150,791 | 150,334 | 150,141 | ||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 29,530,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 148,069 | 148,014 | 148,026 | 147,451 | 146,908 | 145,852 | 142,846 | 123,046 | ||
Homeowners | 2012 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 106,000 | 106,348 | 106,308 | 106,486 | 109,360 | 109,156 | 108,754 | |||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 21,578,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 105,993 | 105,909 | 105,561 | 105,156 | 104,203 | 101,566 | 84,260 | |||
Homeowners | 2013 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 101,769 | 102,345 | 102,407 | 103,982 | 107,489 | 105,584 | ||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 88 | |||||||||
Cumulative number of reported claims | claim | 19,221,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 101,677 | 101,527 | 100,968 | 99,361 | 96,599 | 76,890 | ||||
Homeowners | 2014 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 106,554 | 106,844 | 109,059 | 113,505 | 111,647 | |||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 257 | |||||||||
Cumulative number of reported claims | claim | 20,083,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 106,258 | 106,081 | 105,704 | 103,030 | 83,314 | |||||
Homeowners | 2015 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 114,053 | 114,404 | 115,134 | 111,706 | ||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 362 | |||||||||
Cumulative number of reported claims | claim | 18,706,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 113,321 | 111,882 | 109,303 | 90,704 | ||||||
Homeowners | 2016 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 117,009 | 118,604 | 115,931 | |||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 724 | |||||||||
Cumulative number of reported claims | claim | 19,830,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 115,053 | 113,186 | 95,772 | |||||||
Homeowners | 2017 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 129,818 | 126,285 | ||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 759 | |||||||||
Cumulative number of reported claims | claim | 19,741,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 128,518 | 106,800 | ||||||||
Homeowners | 2018 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 166,793 | |||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 27,697 | |||||||||
Cumulative number of reported claims | claim | 19,515,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 130,548 | |||||||||
Auto liability | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 1,643,667 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 1,439,610 | |||||||||
Outstanding prior to 2009 | 183 | |||||||||
Prior years paid | 0 | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 204,240 | |||||||||
Auto liability | 2009 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 149,807 | 149,888 | 149,822 | 150,568 | 150,919 | 151,418 | 157,941 | 153,662 | 158,703 | 159,934 |
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ (64) | |||||||||
Cumulative number of reported claims | claim | 49,230,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 149,871 | 149,855 | 149,801 | 149,608 | 148,783 | 146,383 | 142,524 | 133,568 | 110,921 | 60,011 |
Auto liability | 2010 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 149,542 | 149,425 | 149,818 | 151,653 | 152,483 | 154,222 | 156,369 | 160,058 | 157,712 | |
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 3 | |||||||||
Cumulative number of reported claims | claim | 48,942,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 149,439 | 149,364 | 149,247 | 148,751 | 147,337 | 144,255 | 137,012 | 118,345 | 63,416 | |
Auto liability | 2011 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 138,949 | 138,891 | 139,840 | 142,488 | 143,133 | 145,735 | 146,713 | 150,803 | ||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 210 | |||||||||
Cumulative number of reported claims | claim | 45,976,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 138,689 | 138,358 | 138,151 | 136,906 | 133,931 | 126,812 | 108,837 | 61,070 | ||
Auto liability | 2012 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 145,620 | 145,847 | 147,594 | 149,346 | 150,336 | 153,815 | 156,448 | |||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 305 | |||||||||
Cumulative number of reported claims | claim | 45,984,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 145,121 | 144,622 | 142,916 | 138,641 | 127,185 | 109,574 | 61,279 | |||
Auto liability | 2013 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 147,993 | 148,111 | 150,657 | 150,720 | 152,858 | 153,860 | ||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 748 | |||||||||
Cumulative number of reported claims | claim | 47,368,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 146,770 | 145,291 | 139,954 | 131,214 | 108,856 | 62,224 | ||||
Auto liability | 2014 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 159,794 | 159,937 | 158,470 | 157,249 | 155,105 | |||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 1,887 | |||||||||
Cumulative number of reported claims | claim | 49,380,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 155,758 | 149,059 | 139,463 | 117,468 | 61,329 | |||||
Auto liability | 2015 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 178,325 | 177,021 | 172,553 | 165,517 | ||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 2,441 | |||||||||
Cumulative number of reported claims | claim | 50,596,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 170,088 | 157,980 | 134,473 | 70,836 | ||||||
Auto liability | 2016 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 184,567 | 184,440 | 180,380 | |||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 5,637 | |||||||||
Cumulative number of reported claims | claim | 51,934,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 166,815 | 140,901 | 73,073 | |||||||
Auto liability | 2017 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 188,756 | 187,983 | ||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 19,007 | |||||||||
Cumulative number of reported claims | claim | 48,587,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 139,531 | 70,682 | ||||||||
Auto liability | 2018 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 200,314 | |||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 71,139 | |||||||||
Cumulative number of reported claims | claim | 43,522,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 77,528 | |||||||||
Auto physical damage | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 944,793 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 938,656 | |||||||||
Outstanding prior to 2009 | 0 | |||||||||
Prior years paid | 0 | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 6,137 | |||||||||
Auto physical damage | 2009 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 81,941 | 81,972 | 81,963 | 81,972 | 81,986 | 82,000 | 82,635 | 83,202 | 83,515 | 84,539 |
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 77,449,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 81,941 | 81,955 | 81,963 | 81,973 | 81,985 | 82,000 | 82,015 | 82,039 | 82,117 | $ 78,456 |
Auto physical damage | 2010 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 83,018 | 83,028 | 83,036 | 83,050 | 83,052 | 83,046 | 83,103 | 83,420 | 84,112 | |
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 2 | |||||||||
Cumulative number of reported claims | claim | 81,581,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 83,015 | 83,028 | 83,036 | 83,051 | 83,067 | 83,087 | 83,103 | 83,120 | $ 79,329 | |
Auto physical damage | 2011 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 85,102 | 85,108 | 85,116 | 85,143 | 85,120 | 86,023 | 85,507 | 86,205 | ||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 8 | |||||||||
Cumulative number of reported claims | claim | 80,803,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 85,095 | 85,108 | 85,116 | 85,127 | 85,148 | 85,181 | 85,254 | $ 83,227 | ||
Auto physical damage | 2012 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 83,334 | 83,342 | 83,354 | 83,431 | 83,402 | 82,337 | 83,770 | |||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 8 | |||||||||
Cumulative number of reported claims | claim | 78,163,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 83,326 | 83,342 | 83,347 | 83,355 | 83,372 | 83,418 | $ 80,519 | |||
Auto physical damage | 2013 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 88,525 | 88,455 | 88,627 | 88,672 | 88,856 | 91,448 | ||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 54 | |||||||||
Cumulative number of reported claims | claim | 80,919,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 88,471 | 88,484 | 88,532 | 88,580 | 88,688 | $ 85,110 | ||||
Auto physical damage | 2014 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 95,232 | 95,239 | 95,422 | 95,634 | 95,572 | |||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ (21) | |||||||||
Cumulative number of reported claims | claim | 87,899,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 95,258 | 95,256 | 95,266 | 95,444 | $ 88,939 | |||||
Auto physical damage | 2015 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 97,455 | 97,624 | 97,994 | 99,291 | ||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ (188) | |||||||||
Cumulative number of reported claims | claim | 87,491,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 97,638 | 97,685 | 97,850 | $ 92,138 | ||||||
Auto physical damage | 2016 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 109,348 | 109,515 | 112,430 | |||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ (207) | |||||||||
Cumulative number of reported claims | claim | 93,200,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 109,536 | 109,686 | $ 106,459 | |||||||
Auto physical damage | 2017 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 111,798 | 115,483 | ||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 924 | |||||||||
Cumulative number of reported claims | claim | 91,160,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 110,817 | $ 105,156 | ||||||||
Auto physical damage | 2018 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 109,040 | |||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ (6,859) | |||||||||
Cumulative number of reported claims | claim | 91,070,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 103,559 |
Property and Casualty Unpaid _6
Property and Casualty Unpaid Claims and Claim Expenses - Reconciliation of Net Incurred and Paid Claims (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Liability for Claims and Claims Adjustment Expense, Total | $ 396,714 | $ 347,749 |
Property, Liability and Casualty Insurance Product Line [Member] | ||
Reinsurance Recoverables, Including Reinsurance Premium Paid | 89,725 | |
Short-duration Insurance Contracts, Liability for Unpaid Claims and Claims Adjustment Expense, Accumulated Unallocated Claim Adjustment Expense | 22,483 | |
Liability For Other Than Short Duration And Unallocated Claims Adjustment Expenses | 52,017 | |
Short-duration Insurance Contracts, Liability for Unpaid Claims and Allocated Claim Adjustment Expense, Net | 254,972 | |
Property, Liability and Casualty Insurance Product Line [Member] | Homeowners | ||
Reinsurance Recoverables, Including Reinsurance Premium Paid | 26,646 | |
Short-duration Insurance Contracts, Liability for Unpaid Claims and Allocated Claim Adjustment Expense, Net | 41,039 | |
Property, Liability and Casualty Insurance Product Line [Member] | Auto liability | ||
Reinsurance Recoverables, Including Reinsurance Premium Paid | 55,971 | |
Short-duration Insurance Contracts, Liability for Unpaid Claims and Allocated Claim Adjustment Expense, Net | 204,240 | |
Property, Liability and Casualty Insurance Product Line [Member] | Auto physical damage | ||
Short-duration Insurance Contracts, Liability for Unpaid Claims and Allocated Claim Adjustment Expense, Net | 6,137 | |
Property, Liability and Casualty Insurance Product Line [Member] | Other Short Duration Lines [Member] | ||
Reinsurance Recoverables, Including Reinsurance Premium Paid | 7,108 | |
Short-duration Insurance Contracts, Liability for Unpaid Claims and Allocated Claim Adjustment Expense, Net | 3,556 | |
Property, Liability and Casualty Insurance Product Line [Member] | Other Than Short Duration Line [Member] | ||
Prior years paid | $ 29,534 |
Property and Casualty Unpaid _7
Property and Casualty Unpaid Claims and Claim Expenses - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Insurance Loss Reserves [Abstract] | |||
Automobile liability coverage percent reserves | 80.00% | ||
Short tail coverage reserves as a percentage of total reserves | 20.00% | ||
Long tail coverage reserves as percentage of reserves | 80.00% | ||
Percentage of losses incurred | 99.00% | ||
Potential variability of property and casualty loss reserves | 6.00% | ||
Probability of other possible outcomes possible impact on net income | $ 13,000 | ||
Favorable development of total reserves for property and casualty claims occurring in prior years | $ 300,000 | $ 2,700,000 | $ 7,000,000 |
Reinsurance and Catastrophes -
Reinsurance and Catastrophes - Total Amounts of Reinsurance Recoverables On Unpaid Insurance Reserves (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of reinsurance recoverable on unpaid insurance reserves | ||
Reinsurance Recoverables | $ 99,510 | $ 68,446 |
Reinsurance companies | ||
Summary of reinsurance recoverable on unpaid insurance reserves | ||
Reinsurance Recoverables | 33,754 | 6,696 |
State insurance facilities | ||
Summary of reinsurance recoverable on unpaid insurance reserves | ||
Reinsurance Recoverables | 55,971 | 50,713 |
Life and health | ||
Summary of reinsurance recoverable on unpaid insurance reserves | ||
Reinsurance Recoverables | $ 9,785 | $ 11,037 |
Reinsurance and Catastrophes _2
Reinsurance and Catastrophes - Effects of Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effects of reinsurance on premiums and benefits | |||
Premiums written and contract deposits, Gross Amount | $ 1,255,557 | $ 1,244,500 | $ 1,280,903 |
Premiums written and contract deposits, Ceded to Other Companies | 28,773 | 21,989 | 22,728 |
Premiums written and contract deposits, Assumed from Other Companies | 8,259 | 4,606 | 4,324 |
Premiums written and contract deposits, Net Amount | 1,235,043 | 1,227,117 | 1,262,499 |
Premiums and contract charges earned, Gross Amount | 841,147 | 812,099 | 777,651 |
Premiums and contract charges earned, Ceded to Other Companies | 28,837 | 22,036 | 22,826 |
Premiums and contract charges earned, Assumed from Other Companies | 5,023 | 4,640 | 4,321 |
Premiums and contract charges earned, Net Amount | 817,333 | 794,703 | 759,146 |
Benefits, claims and settlement expenses, Gross Amount | 769,664 | 588,621 | 562,385 |
Benefits, claims and settlement expenses, Ceded to Other Companies | 136,601 | 10,472 | 25,739 |
Benefits, claims and settlement expenses, Assumed from Other Companies | 4,497 | 4,157 | 4,358 |
Benefits, claims and settlement expenses, Net Amount | $ 637,560 | $ 582,306 | $ 541,004 |
Reinsurance and Catastrophes _3
Reinsurance and Catastrophes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reinsurance Recoverable on Unpaid Insurance Reserves [Line Items] | |||
Losses incurred for catastrophe claims, carrying amount | $ 107,345,000 | $ 61,814,000 | $ 60,043,000 |
Percentage of coverage for catastrophe losses above retention amount, layer one | 95.00% | ||
Coverage above retention per occurrence under layer one catastrophe reinsurance | $ 25,000,000 | ||
Retention base amount per occurrence under layer one | 25,000,000 | ||
Coverage above retention per occurrence under layer two catastrophe reinsurance | 40,000,000 | ||
Retention base amount per occurrence under layer two | 50,000,000 | ||
Coverage above retention per occurrence under layer three catastrophe reinsurance | 85,000,000 | ||
Retention base amount per occurrence under layer three | 90,000,000 | ||
Reinsured amount of each loss above retention in clash event | 20,000,000 | ||
Amount of maximum individual life insurance risk retained | 300,000 | ||
Amount of property recovery related to risk losses | $ 8,000,000 | ||
Percentage of life reinsured catastrophe risk in excess specified retention per occurrence amount | 100.00% | ||
Maximum | |||
Reinsurance Recoverable on Unpaid Insurance Reserves [Line Items] | |||
Retention amount per occurrence related to catastrophe losses, layer one | $ 175,000,000 | ||
Amount of maximum group life policy insurance risk retained | 125,000 | ||
Liability coverages, Company reinsured each loss above a retention per occurrence | 5,000,000 | ||
Amount of life catastrophe risk in excess of per occurrence | 35,000,000 | ||
Maximum | Property and Casualty | |||
Reinsurance Recoverable on Unpaid Insurance Reserves [Line Items] | |||
Reinsured amount of each property loss above retention per occurrence | 5,000,000 | ||
Minimum | |||
Reinsurance Recoverable on Unpaid Insurance Reserves [Line Items] | |||
Retention amount per occurrence related to catastrophe losses, layer one | 25,000,000 | ||
Amount of maximum group life policy insurance risk retained | 100,000 | ||
Liability coverages, Company reinsured each loss above a retention per occurrence | 1,000,000 | ||
Amount life catastrophe risk retention per occurrence | 1,000,000 | ||
Minimum | Property and Casualty | |||
Reinsurance Recoverable on Unpaid Insurance Reserves [Line Items] | |||
Retention amount of each property loss per occurrence | $ 1,000,000 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Short-term debt | ||
Bank Credit Facility | $ 0 | $ 0 |
Long-term debt | ||
Long-term debt | 297,740,000 | 297,469,000 |
Total | $ 297,740,000 | 297,469,000 |
4.50% Senior Notes | ||
Debt Instrument [Line Items] | ||
Effective Interest Rates | 4.50% | |
Long-term debt | ||
Long-term debt | $ 247,740,000 | 247,469,000 |
Principal amount | 250,000,000 | |
Unamortized discount | 488,000 | 547,000 |
Unamortized debt issuance costs | $ 1,772,000 | 1,984,000 |
Federal Home Loan Bank borrowing | ||
Debt Instrument [Line Items] | ||
Effective Interest Rates | 2.70% | |
Long-term debt | ||
Long-term debt | $ 50,000,000 | $ 50,000,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Dec. 07, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||||
FHLB borrowings | $ 25,000,000 | $ 50,000,000 | $ 0 | $ 50,000,000 | $ 0 |
FHLB advances interest rate | 2.70% | ||||
Current Unsecured Bank Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 150,000,000 | ||||
Variable commitment fee | 0.15% | ||||
4.50% Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Stated rate | 4.50% | ||||
Principal amount | $ 250,000,000 | ||||
Discount percent on issuance | 0.265% | ||||
Effective interest percentage | 4.533% | ||||
October 5, 2022 | |||||
Debt Instrument [Line Items] | |||||
FHLB Advances | $ 25,000,000 | $ 25,000,000 | |||
December 2, 2022 | |||||
Debt Instrument [Line Items] | |||||
FHLB Advances | $ 25,000,000 | ||||
Long-term debt | |||||
Debt Instrument [Line Items] | |||||
FHLB Advances | $ 50,000,000 |
Income Taxes - Income Tax Asset
Income Taxes - Income Tax Assets and Liabilities Included in Other Assets and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Income tax (asset) liability | ||
Current | $ (20,793) | $ (16,266) |
Deferred | $ 103,686 | $ 157,775 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets | ||
Unearned premium reserve reduction | $ 12,112 | $ 11,472 |
Compensation accruals | 6,866 | 8,359 |
Impaired securities | 1,295 | 2,240 |
Other comprehensive income - net funded status of benefit plans | 3,254 | 3,526 |
Discounting of unpaid claims and claim expense tax reserves | 2,772 | 3,889 |
Postretirement benefits other than pensions | 302 | 321 |
Charitable contributions carryforwards | 89 | 62 |
Net operating loss carryforwards | 10,969 | 148 |
Total gross deferred tax assets | 37,659 | 30,017 |
Deferred tax liabilities | ||
Other comprehensive income - net unrealized gains on securities | 32,897 | 95,583 |
Deferred policy acquisition costs | 60,330 | 52,438 |
Life insurance future policy benefit reserve | 9,304 | 102 |
Life insurance future policy benefit reserve (transitional rule) | 14,910 | 23,869 |
Discounting of unpaid claims and claim expense tax reserves (transitional rule) | 1,203 | 2,513 |
Investment related adjustments | 17,531 | 8,661 |
Intangibles | 2,557 | 2,557 |
Other, net | 2,613 | 2,069 |
Total gross deferred tax liabilities | 141,345 | 187,792 |
Net deferred tax liability | $ 103,686 | $ 157,775 |
Income Taxes - Summary of Loss
Income Taxes - Summary of Loss Carryforwards and Credits (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Income Tax Disclosure [Abstract] | |
Operating loss carryforwards | $ 52,232 |
Charitable contributions carryforwards | $ 424 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Current | $ 4,152 | $ 3,813 | $ 26,359 |
Deferred | (2,958) | (84,585) | 4,108 |
Total income tax expense (benefit) | $ 1,194 | $ (80,772) | $ 30,467 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Expected federal tax on income | $ 4,103 | $ 31,041 | $ 39,981 |
Add (deduct) tax effects of: | |||
Tax-exempt interest | (3,726) | (5,335) | (5,789) |
Dividend received deduction | (412) | (4,810) | (5,751) |
Tax Act DTL re-measurement | 0 | (98,988) | 0 |
Employee share-based compensation | (1,134) | (3,258) | 127 |
Compensation deduction limitation | 1,754 | 326 | 0 |
Prior year adjustments | 300 | (293) | 91 |
Other, net | 309 | 545 | 1,808 |
Total income tax expense (benefit) | $ 1,194 | $ (80,772) | $ 30,467 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance as of the beginning of the year | $ 1,790 | $ 1,594 | $ 1,039 |
Increases related to prior year tax positions | 0 | 101 | 348 |
Decreases related to prior year tax positions | (152) | 0 | 0 |
Increases related to current year tax positions | 96 | 422 | 283 |
Settlements | 0 | 0 | 0 |
Lapse of statute | 0 | (327) | (76) |
Balance as of the end of the year | $ 1,734 | $ 1,790 | $ 1,594 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Income Tax Disclosure [Abstract] | |
Difference from provisional amounts | $ 1.1 |
Decrease in tax liability | $ 6.8 |
Effective statutory tax rate | 21.00% |
Shareholders' Equity and Comm_3
Shareholders' Equity and Common Stock Equivalents - Narrative (Details) - USD ($) | 12 Months Ended | 84 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares reacquired during period (in shares) | 129,112 | 48,440 | 701,410 | 2,977,162 | |||
Percentage of outstanding shares reacquired | 0.30% | 0.10% | 1.70% | ||||
Shares reacquired during period, value | $ 5,088,000 | $ 1,660,000 | $ 21,513,000 | ||||
Share price of treasury stock acquired during period (in usd per share) | $ 39.41 | $ 34.28 | $ 30.67 | $ 25.96 | |||
Remaining authorized repurchase amount | $ 22,766,000 | $ 22,766,000 | |||||
Treasury stock (in shares) | 24,850,484 | 24,721,372 | 24,672,932 | 24,850,484 | 23,971,522 | ||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 | ||||
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Intrinsic value | 0 | ||||||
Weighted average exercise prices of vested and exercisable options (in usd per share) | 31.42 | $ 27.12 | $ 22.73 | 31.42 | |||
Share price (in usd per share) | $ 37.45 | $ 37.45 | |||||
Aggregate intrinsic value of vested options | $ 1,857,000 | $ 1,857,000 | |||||
Aggregate intrinsic value of options | $ 2,713,000 | $ 2,713,000 | |||||
Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expiration period | 7 years | ||||||
Minimum | Employee Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Minimum | Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 1 year | ||||||
Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expiration period | 10 years | ||||||
Maximum | Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 5 years | ||||||
2011 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Authorized repurchase amount | $ 50,000,000 | ||||||
2015 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Authorized repurchase amount | $ 50,000,000 | ||||||
Comprehensive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Amended increase in shares reserved for issuance (in shares) | 3,250,000 | ||||||
Shares available for grant (in shares) | 1,826,000 | 1,826,000 |
Shareholders' Equity and Comm_4
Shareholders' Equity and Common Stock Equivalents - Outstanding Stock Units and Stock Options under Comprehensive Plan (Details) - shares | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options | 774,821 | 719,015 | 747,032 |
RSUs related to incentive compensation | 1,008,249 | 1,149,679 | 1,419,268 |
Total | 1,839,856 | 1,955,274 | 2,291,860 |
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock units related to deferred compensation | 32,288 | 61,677 | 74,058 |
Employee Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock units related to deferred compensation | 24,498 | 24,903 | 51,502 |
Shareholders' Equity and Comm_5
Shareholders' Equity and Common Stock Equivalents - Stock Option Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted Average Option Price per Share | |||
Weighted Average Option Price per Share, Beginning Balance (in usd per share) | $ 32.80 | ||
Weighted Average Option Price per Share, Options Granted (in usd per share) | 43.04 | ||
Weighted Average Option Price per Share, Options Vested (in usd per share) | 31.42 | ||
Weighted Average Option Price per Share, Options Exercised (in usd per share) | 27.07 | ||
Weighted Average Option Price per Share, Options Forfeited (in usd per share) | 39.07 | ||
Weighted Average Option Price per Share, Options Expired (in usd per share) | 0 | ||
Weighted Average Option Price per Share, Ending Balance (in usd per share) | $ 36.65 | $ 32.80 | |
Outstanding | |||
Options Outstanding, Beginning Balance (in shares) | 719,015 | 747,032 | |
Options Outstanding, Granted (in shares) | 223,208 | 222,828 | 307,176 |
Options Outstanding, Vested (in shares) | 0 | ||
Options Outstanding, Exercised (in shares) | (145,438) | ||
Options Outstanding, Forfeited (in shares) | (21,964) | ||
Options Outstanding, Expired (in shares) | 0 | ||
Options Outstanding, Ending Balance (in shares) | 774,821 | 719,015 | 747,032 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Exercisable [Roll Forward] | |||
Options Vested and Exercisable, Beginning Balance (in shares) | 258,321 | ||
Options Vested and Exercisable, Granted (in shares) | 0 | ||
Options Vested and Exercisable, Vested (in shares) | 158,233 | ||
Options Vested and Exercisable, Exercisable (in shares) | (145,438) | ||
Options Vested and Exercisable, Forfeited (in shares) | 0 | ||
Options Vested and Exercisable, Expired (in shares) | 0 | ||
Options Vested and Exercisable, Ending Balance (in shares) | 271,116 | 258,321 | |
Minimum | |||
Weighted Average Option Price per Share | |||
Weighted Average Option Price per Share, Ending Balance (in usd per share) | $ 41.95 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Range of Option Prices [Roll Forward] | |||
Range of Option Prices per Share, Beginning Balance (in usd per share) | 17.01 | ||
Range of Option Prices per Share, Granted (in usd per share) | 42.95 | ||
Range of Option Prices per Share, Vested (in usd per share) | 17.32 | ||
Range of Option Prices per Share, Exercised (in usd per share) | 17.01 | ||
Range of Option Prices per Share, Forfeited (in usd per share) | 31.01 | ||
Range of Option Prices per Share, Expired (in usd per share) | 0 | ||
Range of Option Prices per Share, Ending Balance (in usd per share) | 17.32 | $ 17.01 | |
Maximum | |||
Weighted Average Option Price per Share | |||
Weighted Average Option Price per Share, Ending Balance (in usd per share) | 44.75 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Range of Option Prices [Roll Forward] | |||
Range of Option Prices per Share, Beginning Balance (in usd per share) | 41.95 | ||
Range of Option Prices per Share, Granted (in usd per share) | 44.75 | ||
Range of Option Prices per Share, Vested (in usd per share) | 41.95 | ||
Range of Option Prices per Share, Exercised (in usd per share) | 41.95 | ||
Range of Option Prices per Share, Forfeited (in usd per share) | 42.95 | ||
Range of Option Prices per Share, Expired (in usd per share) | 0 | ||
Range of Option Prices per Share, Ending Balance (in usd per share) | $ 44.75 | $ 41.95 |
Shareholders' Equity and Comm_6
Shareholders' Equity and Common Stock Equivalents - Stock Option Information by Ranges of Exercise Prices (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 774,821 | 719,015 | 747,032 |
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 36.65 | $ 32.80 | |
Total Outstanding Options, Weighted Average Remaining Term | 7 years 6 months | ||
Vested and Exercisable Options (in shares) | 271,116 | 258,321 | |
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 31.42 | $ 27.12 | $ 22.73 |
Vested and Exercisable Options, Weighted Average Remaining Term | 5 years 11 months 23 days | ||
Minimum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 41.95 | ||
Maximum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 44.75 | ||
Range One | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 36,524 | ||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 19.77 | ||
Total Outstanding Options, Weighted Average Remaining Term | 9 months 25 days | ||
Vested and Exercisable Options (in shares) | 36,524 | ||
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 19.77 | ||
Vested and Exercisable Options, Weighted Average Remaining Term | 9 months 25 days | ||
Range One | Minimum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 17.01 | ||
Range One | Maximum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 22.69 | ||
Range Two | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 320,897 | ||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 31.01 | ||
Total Outstanding Options, Weighted Average Remaining Term | 6 years 8 months 5 days | ||
Vested and Exercisable Options (in shares) | 183,685 | ||
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 30.85 | ||
Vested and Exercisable Options, Weighted Average Remaining Term | 6 years 4 months 24 days | ||
Range Two | Minimum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 28.88 | ||
Range Two | Maximum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 33.41 | ||
Range Three | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 199,452 | ||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 41.82 | ||
Total Outstanding Options, Weighted Average Remaining Term | 8 years 2 months 8 days | ||
Vested and Exercisable Options (in shares) | 50,907 | ||
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 41.82 | ||
Vested and Exercisable Options, Weighted Average Remaining Term | 8 years 2 months 8 days | ||
Range Three | Minimum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 38.05 | ||
Range Three | Maximum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 41.95 | ||
Range Four | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 217,948 | ||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 43.05 | ||
Total Outstanding Options, Weighted Average Remaining Term | 9 years 2 months 8 days | ||
Vested and Exercisable Options (in shares) | 0 | ||
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 0 | ||
Vested and Exercisable Options, Weighted Average Remaining Term | 0 years |
Shareholders' Equity and Comm_7
Shareholders' Equity and Common Stock Equivalents - Restricted Stock Activity (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Total Outstanding Units | |
Beginning balance, Total Outstanding, Units (in shares) | shares | 1,149,679 |
Granted, Total Outstanding Units (in shares) | shares | 188,675 |
Vested, Total Outstanding Units (in shares) | shares | 0 |
Forfeited, Total Outstanding Units (in shares) | shares | (44,855) |
Distributed, Total Outstanding Units (in shares) | shares | (285,250) |
Ending balance, Total Outstanding, Units (in shares) | shares | 1,008,249 |
Total Outstanding Units, Weighted Average Grant Date Fair Value per Unit | |
Beginning balance, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | $ 32.05 |
Granted, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 42.21 |
Vested, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 0 |
Forfeited, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 38.08 |
Distributed, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 25.15 |
Ending balance, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | $ 35.64 |
Vested Units | |
Beginning balance, Vested, Units (in shares) | shares | 558,139 |
Granted, Vested, Units (in shares) | shares | 0 |
Vested, Vested, Units (in shares) | shares | 144,290 |
Forfeited, Vested, Units (in shares) | shares | 0 |
Distributed, Vested, Units (in shares) | shares | (285,250) |
Ending balance, Vested, Units (in shares) | shares | 417,179 |
Vested Units, Weighted Average Grant Date Fair Value per Unit | |
Beginning balance, Vested, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | $ 19.80 |
Granted, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 0 |
Vested, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 31.58 |
Forfeited, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 0 |
Distributed, Vested, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 25.15 |
Ending balance, Vested, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | $ 20.22 |
Statutory Information and Res_3
Statutory Information and Restrictions - Reconciliations of Statutory Capital, Surplus and Net Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Insurance [Abstract] | |||||||||||||||
Statutory capital and surplus of insurance subsidiaries | $ 903,564 | $ 944,139 | $ 903,564 | $ 944,139 | |||||||||||
Increase (decrease) due to: | |||||||||||||||
Deferred policy acquisition costs | 298,742 | 257,826 | 298,742 | 257,826 | |||||||||||
Difference in policyholder reserves | 142,601 | 111,188 | 142,601 | 111,188 | |||||||||||
Goodwill | 47,396 | 47,396 | 47,396 | 47,396 | |||||||||||
Investment fair value adjustments on fixed maturity securities | 142,512 | 415,775 | 142,512 | 415,775 | |||||||||||
Difference in investment reserves | 105,430 | 111,225 | 105,430 | 111,225 | |||||||||||
Federal income tax liability | (115,667) | (162,634) | (115,667) | (162,634) | |||||||||||
Net funded status of benefit plans | (15,495) | (16,789) | (15,495) | (16,789) | |||||||||||
Non-admitted assets and other, net | 20,412 | 28,870 | 20,412 | 28,870 | |||||||||||
Shareholders' equity of parent company and non-insurance subsidiaries | 8,795 | 12,046 | 8,795 | 12,046 | |||||||||||
Parent company short-term and long-term debt | (247,740) | (247,469) | (247,740) | (247,469) | |||||||||||
Total shareholders' equity | 1,290,550 | 1,501,573 | $ 1,293,982 | 1,290,550 | 1,501,573 | $ 1,293,982 | |||||||||
Statutory net income of insurance subsidiaries | 45,977 | 82,587 | 74,574 | ||||||||||||
Net loss of non-insurance companies | (9,755) | (4,496) | (5,135) | ||||||||||||
Interest expense | (11,892) | (11,836) | (11,808) | ||||||||||||
Tax benefit of interest expense and other parent company current tax adjustments | 121 | 5,654 | 5,637 | ||||||||||||
Combined net income | 24,451 | 71,909 | 63,268 | ||||||||||||
Increase (decrease) due to: | |||||||||||||||
Deferred policy acquisition costs | 1,015 | 9,385 | 19,442 | ||||||||||||
Policyholder benefits | 26,318 | 30,609 | 14,919 | ||||||||||||
Federal income tax (expense) benefit | 3,020 | 84,198 | (5,312) | ||||||||||||
Investment reserves | (31,529) | (20,966) | (1,320) | ||||||||||||
Other adjustments, net | (4,932) | (5,676) | (7,232) | ||||||||||||
Net income | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | $ 19,823 | $ 26,923 | $ 11,866 | $ 25,153 | $ 18,343 | $ 169,459 | $ 83,765 |
Statutory Information and Res_4
Statutory Information and Restrictions - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Insurance [Abstract] | ||
Minimum statutory-basis capital and surplus | $ 108,470 | $ 101,463 |
Restricted net assets of HMEC's insurance subsidiaries | 17,695 | 17,985 |
Aggregate amount of dividends | 90,700 | |
Statutory capital and surplus of insurance subsidiaries | $ 903,564 | $ 944,139 |
Pension Plans and Other Postr_3
Pension Plans and Other Postretirement Benefits - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | Sep. 30, 2016 | Dec. 31, 2006 | |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension cost (credit) | $ 8,851 | $ 9,114 | $ 8,527 | |||
Health reimbursement account, amount | 1,438 | $ 7,310 | ||||
Health reimbursement accounts funding | 88 | $ 133 | $ 218 | |||
Defined Benefit Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Expected amortization of gain (loss) next year | 310 | |||||
Supplemental Defined Benefit Plans | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Expected amortization of gain (loss) next year | $ 256 | |||||
Qualified plan | Defined Benefit Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Award granted, amount | $ 1,400 | |||||
Qualified plan | 401(k) plan | Defined Benefit Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Vested percentage of contributions | 100.00% | |||||
Employer matching contribution as percent of employees' gross pay | 3.00% | |||||
Vesting period for Company contributions | 5 years | |||||
Qualified plan | Qualified defined contribution plan | Defined Benefit Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Minimum years of service required | 1 year | |||||
Equity securities | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 50.00% | |||||
Fixed income funds | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 50.00% |
Pension Plans and Other Postr_4
Pension Plans and Other Postretirement Benefits - Contributions and Plan Assets (Details) - Pension Plan - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions to employees' accounts | $ 0 | $ 0 | $ 0 | |
Total assets at the end of the year | 22,090 | 25,843 | 25,446 | $ 27,667 |
Qualified plan | 401(k) plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions to employees' accounts | 7,655 | 7,637 | 6,918 | |
Total assets at the end of the year | 167,767 | 180,514 | 177,352 | |
Nonqualified plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions to employees' accounts | 70 | 84 | 72 | |
Total assets at the end of the year | $ 0 | $ 0 | $ 0 |
Pension Plans and Other Postr_5
Pension Plans and Other Postretirement Benefits - Defined Benefit Plan and Supplemental Retirement Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan | |||
Change in benefit obligation: | |||
Benefit obligations at beginning of year | $ 28,432 | $ 29,407 | $ 31,233 |
Service cost | 650 | 650 | 650 |
Interest cost | 947 | 1,091 | 1,244 |
Plan amendments | 0 | 0 | 0 |
Actuarial loss (gain) | 2,208 | 721 | 220 |
Benefits paid | (2,746) | (1,995) | (3,500) |
Settlements | 0 | 0 | 0 |
Benefit obligations at beginning of year | 25,075 | 28,432 | 29,407 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 25,843 | 25,446 | 27,667 |
Actual return on plan assets | (640) | 2,909 | 1,766 |
Employer contributions | 0 | 0 | 0 |
Benefits paid | (2,746) | (1,995) | (3,500) |
Expenses paid | (367) | (517) | (487) |
Settlements | 0 | 0 | 0 |
Fair value of plan assets at end of year | 22,090 | 25,843 | 25,446 |
Funded status | 2,985 | 2,589 | 3,961 |
Prepaid (accrued) benefit expense | 7,425 | 8,016 | 8,653 |
Total amount recognized in Consolidated Balance Sheets, all in Other liabilities | (2,985) | (2,589) | (3,961) |
Amounts recognized in accumulated other comprehensive income (loss) ("AOCI"): | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss | 10,410 | 10,605 | 12,613 |
Total amount recognized in AOCI | 10,410 | 10,605 | 12,613 |
Information for pension plans with an accumulated benefit obligation greater than plan assets: | |||
Projected benefit obligation | 25,075 | 28,432 | 29,407 |
Accumulated benefit obligation | 25,075 | 28,432 | 29,407 |
Fair value of plan assets | 22,090 | 25,843 | 25,446 |
Supplemental Defined Benefit Plans | |||
Change in benefit obligation: | |||
Benefit obligations at beginning of year | 16,832 | 16,847 | 17,004 |
Service cost | 0 | 0 | 0 |
Interest cost | 566 | 631 | 687 |
Plan amendments | 0 | 0 | 0 |
Actuarial loss (gain) | 789 | (805) | (488) |
Benefits paid | (1,205) | (1,451) | (1,332) |
Settlements | 0 | 0 | 0 |
Benefit obligations at beginning of year | 15,404 | 16,832 | 16,847 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 0 | 0 | 0 |
Actual return on plan assets | 0 | 0 | 0 |
Employer contributions | 1,205 | 1,451 | 1,332 |
Benefits paid | (1,205) | (1,451) | (1,332) |
Expenses paid | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Fair value of plan assets at end of year | 0 | 0 | 0 |
Funded status | 15,404 | 16,832 | 16,847 |
Prepaid (accrued) benefit expense | (10,320) | (10,648) | (11,210) |
Total amount recognized in Consolidated Balance Sheets, all in Other liabilities | (15,404) | (16,832) | (16,847) |
Amounts recognized in accumulated other comprehensive income (loss) ("AOCI"): | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss | 5,084 | 6,184 | 5,637 |
Total amount recognized in AOCI | 5,084 | 6,184 | 5,637 |
Information for pension plans with an accumulated benefit obligation greater than plan assets: | |||
Projected benefit obligation | 15,404 | 16,832 | 16,847 |
Accumulated benefit obligation | 15,404 | 16,832 | 16,847 |
Fair value of plan assets | $ 0 | $ 0 | $ 0 |
Pension Plans and Other Postr_6
Pension Plans and Other Postretirement Benefits - Components of Net Periodic Cost, Changes in Plan Assets and Benefit Obligations, and AOCI Impacts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Amortization of: | |||
Total recognized in other comprehensive income (loss) | $ (1,294) | $ (1,461) | $ 37 |
Defined Benefit Plan | |||
Service cost: | |||
Benefit accrual | 0 | 0 | 0 |
Other expenses | 650 | 650 | 650 |
Interest cost | 947 | 1,091 | 1,244 |
Expected return on plan assets | (1,377) | (1,493) | (1,675) |
Settlement loss | 0 | 0 | 0 |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | 371 | 389 | 393 |
Net periodic pension expense | 591 | 637 | 612 |
Changes in plan assets and benefit obligations included in other comprehensive income (loss): | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss (gain) | 177 | (1,619) | 175 |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | (371) | (389) | (393) |
Total recognized in other comprehensive income (loss) | $ (194) | $ (2,008) | $ (218) |
Weighted average assumptions used to determine expense: | |||
Discount rate | 3.50% | 3.90% | 4.20% |
Expected return on plan assets | 5.90% | 6.25% | 6.50% |
Weighted average assumptions used to determine benefit obligations as of December 31: | |||
Discount rate | 4.20% | 3.50% | 3.90% |
Expected return on plan assets | 5.90% | 6.25% | 6.50% |
Supplemental Defined Benefit Plans | |||
Service cost: | |||
Benefit accrual | $ 0 | $ 0 | $ 0 |
Other expenses | 0 | 0 | 0 |
Interest cost | 566 | 631 | 687 |
Expected return on plan assets | 0 | 0 | 0 |
Settlement loss | 0 | 0 | 0 |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | 310 | 258 | 233 |
Net periodic pension expense | 876 | 889 | 920 |
Changes in plan assets and benefit obligations included in other comprehensive income (loss): | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss (gain) | (789) | 805 | 488 |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | (310) | (258) | (233) |
Total recognized in other comprehensive income (loss) | $ (1,099) | $ 547 | $ 255 |
Weighted average assumptions used to determine expense: | |||
Discount rate | 3.50% | 3.90% | 4.20% |
Weighted average assumptions used to determine benefit obligations as of December 31: | |||
Discount rate | 4.20% | 3.50% | 3.90% |
Pension Plans and Other Postr_7
Pension Plans and Other Postretirement Benefits - Fair Value of Plan Assets (Details) - Defined Benefit Plan - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | |||
Total | $ 22,090 | $ 25,843 | $ 25,446 |
Fixed income funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 11,003 | 12,165 | |
Short-term investment funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 800 | 588 | |
Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 800 | 588 | |
Level 1 | Fixed income funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 0 | 0 | |
Level 1 | Short-term investment funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 800 | 588 | |
Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 21,290 | 25,255 | |
Level 2 | Fixed income funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 11,003 | 12,165 | |
Level 2 | Short-term investment funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 0 | 0 | |
Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 0 | 0 | |
Level 3 | Fixed income funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 0 | 0 | |
Level 3 | Short-term investment funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 0 | 0 | |
United States | Equity security funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 8,198 | 10,517 | |
United States | Level 1 | Equity security funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 0 | 0 | |
United States | Level 2 | Equity security funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 8,198 | 10,517 | |
United States | Level 3 | Equity security funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 0 | 0 | |
International | Equity security funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 2,089 | 2,573 | |
International | Level 1 | Equity security funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 0 | 0 | |
International | Level 2 | Equity security funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | 2,089 | 2,573 | |
International | Level 3 | Equity security funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | $ 0 | $ 0 |
Pension Plans and Other Postr_8
Pension Plans and Other Postretirement Benefits - Contributions (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Defined Benefit Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Minimum funding requirement | $ 0 |
Expected contributions (approximations) | 0 |
Supplemental Defined Benefit Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contributions (approximations) | $ 1,307 |
Pension Plans and Other Postr_9
Pension Plans and Other Postretirement Benefits - Estimated Future Benefit Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Defined Benefit Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2,019 | $ 2,668 |
2,020 | 2,482 |
2,021 | 2,225 |
2,022 | 2,346 |
2,023 | 1,971 |
2024-2028 | 8,700 |
Supplemental Defined Benefit Plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2,019 | 1,307 |
2,020 | 1,292 |
2,021 | 1,275 |
2,022 | 1,255 |
2,023 | 1,232 |
2024-2028 | $ 5,701 |
Contingencies and Commitments -
Contingencies and Commitments - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 2,580 |
2,020 | 1,725 |
2,021 | 1,200 |
2,022 | 1,177 |
2,023 | 483 |
2024-2028 | 0 |
2029 and beyond | $ 0 |
Contingencies and Commitments_2
Contingencies and Commitments - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rental expenses | $ 2,794 | $ 2,870 | $ 2,546 |
Remaining minimum amount committed | $ 145,445 | $ 106,381 |
Supplementary Data on Cash Fl_3
Supplementary Data on Cash Flows - Reconciliation of Net Income to Cash Provided by Operating Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | |||||||||||||||
Net income | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | $ 19,823 | $ 26,923 | $ 11,866 | $ 25,153 | $ 18,343 | $ 169,459 | $ 83,765 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Net investment (gains) losses | 12,543 | 3,406 | (4,123) | ||||||||||||
Increase in accrued investment income | 4,449 | (3,404) | (2,208) | ||||||||||||
Increase (decrease) in accrued expenses | (1,088) | (2,240) | 4,378 | ||||||||||||
Depreciation and amortization | 7,357 | 6,615 | 6,896 | ||||||||||||
Increase in insurance liabilities | 197,472 | 154,061 | 176,315 | ||||||||||||
Increase in premium receivables | (10,026) | (12,917) | (11,496) | ||||||||||||
Increase in deferred policy acquisition costs | (783) | (7,967) | (15,859) | ||||||||||||
(Increase) decrease in reinsurance recoverables | (21,317) | 11 | (481) | ||||||||||||
Increase (decrease) in income tax liabilities | 5,971 | (21,291) | (1,293) | ||||||||||||
Other | (12,033) | (29,147) | (24,461) | ||||||||||||
Total adjustments | 182,545 | 87,127 | 127,668 | ||||||||||||
Net cash provided by operating activities | $ 200,888 | $ 256,586 | $ 211,433 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2018segment | |
Segment Reporting [Abstract] | |
Business segments | 4 |
Operating segments | 3 |
Segment Information - Summarize
Segment Information - Summarized Financial Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | $ 817,333 | $ 794,703 | $ 759,146 | ||||||||||||
Net investment income | 376,507 | 373,630 | 361,186 | ||||||||||||
Net income (loss) | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | $ 19,823 | $ 26,923 | $ 11,866 | $ 25,153 | 18,343 | 169,459 | 83,765 |
Assets | 11,031,896 | 11,198,340 | 10,576,824 | 11,031,896 | 11,198,340 | 10,576,824 | |||||||||
Intersegment eliminations | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Net investment income | (772) | (815) | (855) | ||||||||||||
Assets | (41,800) | (42,482) | (36,786) | (41,800) | (42,482) | (36,786) | |||||||||
Property and Casualty | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Net income (loss) | (14,243) | 17,790 | 25,644 | ||||||||||||
Property and Casualty | Operating Segments | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 665,734 | 648,263 | 620,514 | ||||||||||||
Net investment income | 40,104 | 36,178 | 38,998 | ||||||||||||
Assets | 1,236,362 | 1,217,394 | 1,110,958 | 1,236,362 | 1,217,394 | 1,110,958 | |||||||||
Retirement | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Net income (loss) | 41,736 | 88,473 | 50,674 | ||||||||||||
Retirement | Operating Segments | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 31,269 | 28,003 | 24,937 | ||||||||||||
Net investment income | 262,634 | 261,994 | 249,410 | ||||||||||||
Assets | 7,866,969 | 8,063,912 | 7,449,777 | 7,866,969 | 8,063,912 | 7,449,777 | |||||||||
Life | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Net income (loss) | 18,754 | 77,595 | 16,559 | ||||||||||||
Life | Operating Segments | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 120,330 | 118,437 | 113,695 | ||||||||||||
Net investment income | 74,399 | 76,195 | 73,567 | ||||||||||||
Assets | 1,821,351 | 1,815,732 | 1,912,771 | 1,821,351 | 1,815,732 | 1,912,771 | |||||||||
Corporate and Other | Corporate and Other | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Net investment income | 142 | 78 | 66 | ||||||||||||
Net income (loss) | (27,904) | (14,399) | (9,112) | ||||||||||||
Assets | $ 149,014 | $ 143,784 | $ 140,104 | $ 149,014 | $ 143,784 | $ 140,104 |
Segment Information - Additiona
Segment Information - Additional Significant Financial Information by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
DAC amortization expense | $ 109,889 | $ 102,185 | $ 96,732 |
Income tax expense (benefit) | 1,194 | (80,772) | 30,467 |
Property and Casualty | |||
Segment Reporting Information [Line Items] | |||
DAC amortization expense | 79,073 | 76,967 | 74,950 |
Retirement | |||
Segment Reporting Information [Line Items] | |||
DAC amortization expense | 23,186 | 17,759 | 14,635 |
Life | |||
Segment Reporting Information [Line Items] | |||
DAC amortization expense | 7,630 | 7,459 | 7,147 |
Operating Segments | Property and Casualty | |||
Segment Reporting Information [Line Items] | |||
Income tax expense (benefit) | (6,622) | (3,279) | 4,627 |
Operating Segments | Retirement | |||
Segment Reporting Information [Line Items] | |||
Income tax expense (benefit) | 10,000 | (19,498) | 20,334 |
Operating Segments | Life | |||
Segment Reporting Information [Line Items] | |||
Income tax expense (benefit) | 4,979 | (51,876) | 9,775 |
Corporate and Other | Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Income tax expense (benefit) | $ (7,163) | $ (6,119) | $ (4,269) |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Millions | Dec. 10, 2018 | Oct. 30, 2018 |
Benefit Consultants Group Inc. | ||
Business Acquisition [Line Items] | ||
Business acquisitions | $ 25 | |
NTA Life Enterprises | ||
Business Acquisition [Line Items] | ||
Business acquisitions | $ 405 |
Unaudited Selected Quarterly _3
Unaudited Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||
Insurance premiums written and contract deposits | $ 311,216 | $ 338,097 | $ 301,722 | $ 284,008 | $ 300,416 | $ 318,355 | $ 311,614 | $ 296,732 | $ 315,917 | $ 351,534 | $ 311,879 | $ 283,169 | |||
Total revenues | 278,535 | 311,318 | 306,257 | 295,489 | 302,993 | 289,817 | 291,436 | 287,304 | 282,873 | 291,176 | 283,558 | 271,303 | $ 1,191,599 | $ 1,171,550 | $ 1,128,910 |
Net income | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | $ 19,823 | $ 26,923 | $ 11,866 | $ 25,153 | $ 18,343 | $ 169,459 | $ 83,765 |
Basic | |||||||||||||||
Net income - basic (in usd per share) | $ (0.49) | $ 0.30 | $ 0.14 | $ 0.49 | $ 3.03 | $ 0.64 | $ 0.05 | $ 0.37 | $ 0.48 | $ 0.66 | $ 0.29 | $ 0.61 | $ 0.44 | $ 4.10 | $ 2.04 |
Shares of common stock - weighted average basic (in shares) | 41,596,000,000 | 41,683,000,000 | 41,600,000,000 | 41,497,000,000 | 41,419,000,000 | 41,433,000,000 | 41,368,000,000 | 41,135,000,000 | 41,093,000,000 | 41,092,000,000 | 41,082,000,000 | 41,297,000,000 | 41,570,492 | 41,364,546 | 41,158,349 |
Diluted | |||||||||||||||
Net income - diluted (in usd per share) | $ (0.49) | $ 0.30 | $ 0.14 | $ 0.48 | $ 3 | $ 0.64 | $ 0.05 | $ 0.37 | $ 0.48 | $ 0.65 | $ 0.29 | $ 0.61 | $ 0.44 | $ 4.08 | $ 2.02 |
Shares of common stock and equivalent shares - weighted average diluted (in shares) | 41,911,000,000 | 41,850,000,000 | 41,735,000,000 | 41,653,000,000 | 41,718,000,000 | 41,575,000,000 | 41,493,000,000 | 41,342,000,000 | 41,482,000,000 | 41,347,000,000 | 41,314,000,000 | 41,492,000,000 | 41,894,232 | 41,564,979 | 41,475,516 |
TCJA effect, earnings per share, basic (in usd per share) | $ 2.39 | ||||||||||||||
TCJA effect, earnings per share, diluted (in usd per share) | $ 2.37 |
Schedule I Summary of Investm_2
Schedule I Summary of Investments-Other Than Investments in Related Parties (Details) $ in Thousands | Dec. 31, 2018USD ($) |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | $ 8,114,443 |
Amount Shown in Balance Sheet | 8,250,677 |
Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 7,373,911 |
Fair Value | 7,515,318 |
Amount Shown in Balance Sheet | 7,515,318 |
Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 111,750 |
Fair Value | 111,750 |
Amount Shown in Balance Sheet | 111,750 |
U.S. Government and federally sponsored agency obligations | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 1,269,767 |
Fair Value | 1,283,622 |
Amount Shown in Balance Sheet | 1,283,622 |
States, municipalities and political subdivisions | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 1,884,313 |
Fair Value | 2,003,969 |
Amount Shown in Balance Sheet | 2,003,969 |
Foreign government bonds | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 83,343 |
Fair Value | 84,904 |
Amount Shown in Balance Sheet | 84,904 |
Public utilities | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 80,355 |
Fair Value | 88,296 |
Amount Shown in Balance Sheet | 88,296 |
All other corporate bonds | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 1,956,111 |
Fair Value | 1,973,314 |
Amount Shown in Balance Sheet | 1,973,314 |
Asset-backed securities | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 1,320,680 |
Fair Value | 1,314,352 |
Amount Shown in Balance Sheet | 1,314,352 |
Residential mortgage-backed securities (non-agency) | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 85,484 |
Fair Value | 85,253 |
Amount Shown in Balance Sheet | 85,253 |
Commercial mortgage-backed securities | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 676,218 |
Fair Value | 663,707 |
Amount Shown in Balance Sheet | 663,707 |
Redeemable preferred stocks | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 17,640 |
Fair Value | 17,901 |
Amount Shown in Balance Sheet | 17,901 |
Industrial, miscellaneous and all other | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 25,452 |
Fair Value | 25,452 |
Amount Shown in Balance Sheet | 25,452 |
Banking & finance and insurance companies | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 9,960 |
Fair Value | 9,960 |
Amount Shown in Balance Sheet | 9,960 |
Public utilities | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 1,828 |
Fair Value | 1,828 |
Amount Shown in Balance Sheet | 1,828 |
Non-redeemable preferred stocks | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 54,672 |
Fair Value | 54,672 |
Amount Shown in Balance Sheet | 54,672 |
Closed-end fund | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 19,838 |
Fair Value | 19,838 |
Amount Shown in Balance Sheet | 19,838 |
Limited partnership interests | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 328,516 |
Amount Shown in Balance Sheet | 328,516 |
Short-term Investments | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 122,222 |
Amount Shown in Balance Sheet | 122,222 |
Policy loans | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 153,994 |
Amount Shown in Balance Sheet | 153,994 |
Derivative instruments | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 7,820 |
Fair Value | 2,647 |
Amount Shown in Balance Sheet | 2,647 |
Mortgage loans | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 2,730 |
Amount Shown in Balance Sheet | 2,730 |
Other | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 13,500 |
Amount Shown in Balance Sheet | $ 13,500 |
Schedule II Condensed Financi_2
Schedule II Condensed Financial Information of Registrant - Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | |||
Investment in subsidiaries | $ 328,516 | $ 247,266 | |
Other assets | 422,047 | 381,182 | |
Total assets | 11,031,896 | 11,198,340 | $ 10,576,824 |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Long-term debt | 297,740 | 297,469 | |
Other liabilities | 290,358 | 341,053 | |
Total liabilities | 9,741,346 | 9,696,767 | |
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued | 0 | 0 | |
Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2018, 65,820,369; 2017, 65,439,245 | 66 | 65 | |
Additional paid-in capital | 475,109 | 464,246 | |
Retained earnings | 1,216,582 | 1,231,177 | |
Accumulated other comprehensive income (loss), net of taxes: | |||
Net unrealized investment gains on securities | 96,941 | 300,177 | |
Net funded status of pension benefit obligations | (12,185) | (13,217) | |
Treasury stock, at cost, 2018, 24,850,484 shares; 2017, 24,721,372 shares | (485,963) | (480,875) | |
Total shareholders' equity | 1,290,550 | 1,501,573 | $ 1,293,982 |
Total liabilities and shareholders' equity | 11,031,896 | 11,198,340 | |
Parent Company [Member] | |||
ASSETS | |||
Investments and cash | 5,255 | 6,464 | |
Investment in subsidiaries | 1,473,538 | 1,685,390 | |
Other assets | 66,138 | 66,445 | |
Total assets | 1,544,931 | 1,758,299 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Long-term debt | 247,740 | 247,469 | |
Other liabilities | 6,641 | 9,257 | |
Total liabilities | 254,381 | 256,726 | |
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued | 0 | 0 | |
Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2018, 65,820,369; 2017, 65,439,245 | 66 | 65 | |
Additional paid-in capital | 475,109 | 464,246 | |
Retained earnings | 1,216,582 | 1,231,177 | |
Accumulated other comprehensive income (loss), net of taxes: | |||
Net unrealized investment gains on securities | 96,941 | 300,177 | |
Net funded status of pension benefit obligations | (12,185) | (13,217) | |
Treasury stock, at cost, 2018, 24,850,484 shares; 2017, 24,721,372 shares | (485,963) | (480,875) | |
Total shareholders' equity | 1,290,550 | 1,501,573 | |
Total liabilities and shareholders' equity | $ 1,544,931 | $ 1,758,299 |
Schedule II Condensed Financi_3
Schedule II Condensed Financial Information of Registrant - Condensed Balance Sheet (Additional Information) (Details) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Condensed Financial Statements, Captions [Line Items] | ||||
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 | ||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | ||
Preferred Stock, Shares Issued | 0 | 0 | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |
Common Stock, Shares Authorized | 75,000,000 | 75,000,000 | ||
Common Stock, Shares, Issued | 65,820,369 | 65,439,245 | ||
Treasury stock (in shares) | 24,850,484 | 24,721,372 | 24,672,932 | 23,971,522 |
Parent Company [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 | ||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | ||
Preferred Stock, Shares Issued | 0 | 0 | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||
Common Stock, Shares Authorized | 75,000,000 | 75,000,000 | ||
Common Stock, Shares, Issued | 65,820,369 | 65,439,245 | ||
Treasury stock (in shares) | 24,850,484 | 24,721,372 |
Schedule II Condensed Financi_4
Schedule II Condensed Financial Information of Registrant - Condensed Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | |||||||||||||||
Net investment income | $ 376,507 | $ 373,630 | $ 361,186 | ||||||||||||
Realized investment gains | (12,543) | (3,406) | 4,123 | ||||||||||||
Total revenues | $ 278,535 | $ 311,318 | $ 306,257 | $ 295,489 | $ 302,993 | $ 289,817 | $ 291,436 | $ 287,304 | $ 282,873 | $ 291,176 | $ 283,558 | $ 271,303 | 1,191,599 | 1,171,550 | 1,128,910 |
Expenses | |||||||||||||||
Interest expense | 13,001 | 11,948 | 11,808 | ||||||||||||
Total expenses | 1,172,062 | 1,082,863 | 1,014,678 | ||||||||||||
Income tax benefit | 1,194 | (80,772) | 30,467 | ||||||||||||
Net income | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | $ 19,823 | $ 26,923 | $ 11,866 | $ 25,153 | 18,343 | 169,459 | 83,765 |
Parent Company [Member] | |||||||||||||||
Revenues | |||||||||||||||
Net investment income | 100 | 34 | 20 | ||||||||||||
Realized investment gains | 0 | 0 | 0 | ||||||||||||
Total revenues | 100 | 34 | 20 | ||||||||||||
Expenses | |||||||||||||||
Interest expense | 11,892 | 11,835 | 11,808 | ||||||||||||
Other | 10,898 | 5,101 | 5,631 | ||||||||||||
Total expenses | 22,790 | 16,936 | 17,439 | ||||||||||||
Loss before income tax benefit and equity in net earnings of subsidiaries | (22,690) | (16,902) | (17,419) | ||||||||||||
Income tax benefit | (4,723) | (6,667) | (6,076) | ||||||||||||
Loss before equity in net earnings of subsidiaries | (17,967) | (10,235) | (11,343) | ||||||||||||
Equity in net earnings of subsidiaries | 36,310 | 179,694 | 95,108 | ||||||||||||
Net income | $ 18,343 | $ 169,459 | $ 83,765 |
Schedule II Condensed Financi_5
Schedule II Condensed Financial Information of Registrant - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows - operating activities | |||
Interest expense paid | $ (12,532) | $ (11,555) | $ (11,754) |
Income taxes paid | (8,679) | (16,259) | (27,847) |
Other, net, including settlement of payables to subsidiaries | (16,357) | (6,534) | (16,297) |
Net cash provided by operating activities | 200,888 | 256,586 | 211,433 |
Cash flows - investing activities | |||
Net Cash Provided by (Used in) Investing Activities | (186,499) | (228,664) | (325,360) |
Cash flows - financing activities | |||
Dividends paid to shareholders | (46,689) | (46,114) | (44,310) |
Proceeds from exercise of stock options | 3,627 | 4,190 | 3,329 |
Withholding tax payments on RSUs tendered | (3,165) | (3,245) | (4,015) |
Net cash used in financing activities | (10,110) | (36,965) | 115,088 |
Net increase (decrease) in cash | 4,279 | (9,043) | 1,161 |
Cash at beginning of period | 7,627 | 16,670 | 15,509 |
Cash at end of period | 11,906 | 7,627 | 16,670 |
Parent Company [Member] | |||
Cash flows - operating activities | |||
Interest expense paid | (11,892) | (11,503) | (11,754) |
Income taxes paid | (216) | (373) | 8,914 |
Cash dividends received from subsidiaries | 61,000 | 56,900 | 59,600 |
Other, net, including settlement of payables to subsidiaries | 1,214 | 4,201 | 581 |
Net cash provided by operating activities | 50,106 | 49,225 | 57,341 |
Cash flows - investing activities | |||
Net increase (decrease) in investments | 1,621 | (2,338) | 9,161 |
Net Cash Provided by (Used in) Investing Activities | 1,621 | (2,338) | 9,161 |
Cash flows - financing activities | |||
Dividends paid to shareholders | (46,689) | (46,114) | (44,310) |
Acquisition of treasury stock | (5,088) | (1,660) | (21,513) |
Proceeds from exercise of stock options | 3,627 | 4,190 | 3,329 |
Withholding tax payments on RSUs tendered | (3,165) | (3,245) | (4,015) |
Net cash used in financing activities | (51,315) | (46,829) | (66,509) |
Net increase (decrease) in cash | 412 | 58 | (7) |
Cash at beginning of period | 126 | 68 | 75 |
Cash at end of period | $ 538 | $ 126 | $ 68 |
Schedule III and VI Supplemen_2
Schedule III and VI Supplementary Insurance Information Supplemental Information Concerning Property and Casualty Insurance Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | $ 298,742 | $ 257,826 | $ 267,580 |
Future policy benefits, claims and claim expenses | 6,107,907 | 5,921,484 | 5,777,857 |
Unearned premiums | 276,225 | 260,539 | 246,274 |
Other policy claims and benefits payable | 767,988 | 724,261 | 708,950 |
Premium revenue/ premium earned | 817,333 | 794,703 | 759,146 |
Net investment income | 376,507 | 373,630 | 361,186 |
Benefits, claims and settlement expenses | 843,759 | 780,941 | 733,026 |
Amortization of deferred policy acquisition costs | 109,889 | 102,185 | 96,732 |
Other operating expenses | 218,414 | 199,737 | 184,920 |
Property and Casualty | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | 30,033 | 29,191 | 27,604 |
Future policy benefits, claims and claim expenses | 367,180 | 319,182 | 307,757 |
Discount, if any, deducted in previous column | 0 | 0 | 0 |
Unearned premiums | 274,351 | 258,502 | 244,005 |
Other policy claims and benefits payable | 0 | 0 | 0 |
Premium revenue/ premium earned | 665,734 | 648,263 | 620,514 |
Net investment income | 40,104 | 36,178 | 38,997 |
Benefits, claims and settlement expenses | 547,659 | 496,289 | 464,098 |
Claims and claims adjustment expense incurred related to current year | 547,959 | 498,989 | 471,098 |
Claims and claims adjustment expense incurred related to prior years | (300) | (2,700) | (7,000) |
Amortization of deferred policy acquisition costs | 79,073 | 76,967 | 74,950 |
Other operating expenses | 101,834 | 96,488 | 90,802 |
Paid claims and claim adjustment expenses | 531,977 | 481,074 | 468,778 |
Premiums written | 681,583 | 662,760 | 634,319 |
Retirement | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | 209,232 | 174,661 | 188,117 |
Future policy benefits, claims and claim expenses | 4,573,170 | 4,466,039 | 4,372,062 |
Unearned premiums | 704 | 705 | 671 |
Other policy claims and benefits payable | 764,607 | 720,926 | 705,603 |
Premium revenue/ premium earned | 31,269 | 28,003 | 24,937 |
Net investment income | 262,634 | 261,994 | 249,410 |
Benefits, claims and settlement expenses | 168,732 | 159,385 | 151,185 |
Amortization of deferred policy acquisition costs | 23,186 | 17,759 | 14,635 |
Other operating expenses | 57,269 | 49,733 | 40,289 |
Life | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | 59,477 | 53,974 | 51,859 |
Future policy benefits, claims and claim expenses | 1,167,557 | 1,136,263 | 1,098,038 |
Unearned premiums | 1,170 | 1,332 | 1,598 |
Other policy claims and benefits payable | 3,381 | 3,335 | 3,347 |
Premium revenue/ premium earned | 120,330 | 118,437 | 113,695 |
Net investment income | 74,399 | 76,195 | 73,567 |
Benefits, claims and settlement expenses | 127,368 | 125,267 | 117,743 |
Amortization of deferred policy acquisition costs | 7,630 | 7,459 | 7,147 |
Other operating expenses | 36,314 | 36,550 | 36,806 |
Other, including consolidating eliminations | Eliminations | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Net investment income | (630) | (737) | (788) |
Other operating expenses | $ 22,997 | $ 16,966 | $ 17,023 |
Schedule IV Reinsurance (Detail
Schedule IV Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Life insurance in force | |||
Gross Amount | $ 18,277,691 | $ 17,564,270 | $ 17,025,125 |
Ceded to Other Companies | 4,505,208 | 4,295,412 | 4,065,449 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | $ 13,772,483 | $ 13,268,858 | $ 12,959,676 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |
Premiums | |||
Gross Amount | $ 841,147 | $ 812,099 | $ 777,651 |
Ceded to Other Companies | 28,837 | 22,036 | 22,826 |
Assumed from Other Companies | 5,023 | 4,640 | 4,321 |
Net Amount | $ 817,333 | $ 794,703 | $ 759,146 |
Percentage of Amount Assumed to Net | 0.60% | 0.60% | 0.60% |
Property and Casualty | |||
Premiums | |||
Gross Amount | $ 682,478 | $ 658,960 | $ 632,372 |
Ceded to Other Companies | 21,767 | 15,337 | 16,179 |
Assumed from Other Companies | 5,023 | 4,640 | 4,321 |
Net Amount | $ 665,734 | $ 648,263 | $ 620,514 |
Percentage of Amount Assumed to Net | 0.80% | 0.70% | 0.70% |
Retirement | |||
Premiums | |||
Gross Amount | $ 31,269 | $ 28,003 | $ 24,937 |
Ceded to Other Companies | 0 | 0 | 0 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | $ 31,269 | $ 28,003 | $ 24,937 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |
Life | |||
Premiums | |||
Gross Amount | $ 127,400 | $ 125,136 | $ 120,342 |
Ceded to Other Companies | 7,070 | 6,699 | 6,647 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | $ 120,330 | $ 118,437 | $ 113,695 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |