Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 01, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | BALDWIN & LYONS INC | ||
Entity Central Index Key | 9,346 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Information [Line Items] | |||
Entity Public Float | $ 229,880,000 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Class A (voting) [Member] | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 2,623,109 | ||
Class B (nonvoting) [Member] | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 12,402,941 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Investments: | ||
Fixed maturities (Amortized cost: 2015, $442,578; 2014, $455,385) | $ 437,184 | $ 451,809 |
Equity securities (Cost: 2015, $80,221; 2014, $78,778) | 145,498 | 162,107 |
Limited partnerships (Affiliated: 2015, $45,009; 2014, $46,987) | 75,458 | 81,230 |
Short-term and other | 2,220 | 2,966 |
Total Investments | 660,360 | 698,112 |
Cash and cash equivalents | 73,538 | 64,632 |
Accounts receivable--less allowance (2015, $600; 2014, $605) | 66,522 | 98,144 |
Accrued investment income | 3,989 | 3,682 |
Reinsurance recoverable | 215,888 | 220,221 |
Prepaid reinsurance premiums | 3,176 | 2,274 |
Deferred policy acquisition costs | 1,443 | 2,263 |
Property and equipment--less accumulated depreciation (2015, $14,768; 2014, $13,777) | 46,144 | 43,815 |
Other assets | 11,009 | 9,413 |
Current federal income taxes recoverable | 3,702 | 1,691 |
Total Assets | 1,085,771 | 1,144,247 |
Reserves: | ||
Losses and loss expenses | 513,596 | 506,102 |
Unearned premiums | 25,291 | 35,019 |
Total Reserves | 538,887 | 541,121 |
Reinsurance payable | 47,565 | 46,338 |
Short-term borrowings | 20,000 | 20,000 |
Depository liabilities | 16,847 | 48,893 |
Accounts payable and other liabilities | 56,776 | 68,426 |
Deferred federal income taxes | 11,198 | 19,973 |
Total Liabilities | 691,273 | 744,751 |
Shareholders' equity: | ||
Additional paid-in capital | 52,946 | 51,854 |
Unrealized net gains on investments | 38,924 | 51,840 |
Foreign exchange adjustment | (1,066) | 390 |
Retained earnings | 303,053 | 294,773 |
Shareholders' equity | 394,498 | 399,496 |
Total liabilities and shareholders' equity | 1,085,771 | 1,144,247 |
Class A (voting) [Member] | ||
Shareholders' equity: | ||
Common stock | 112 | 112 |
Class B (non-voting) [Member] | ||
Shareholders' equity: | ||
Common stock | $ 529 | $ 527 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||
Fixed maturities, amortized cost | $ 442,578 | $ 455,385 |
Equity securities, cost | 80,221 | 78,778 |
Limited partnerships,affiliated | 45,009 | 46,987 |
Account receivable, allowance | 600 | 605 |
Property and equipment, accumulated depreciation | $ 14,768 | $ 13,777 |
Class A (voting) [Member] | ||
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 3,000,000 | 3,000,000 |
Common stock, shares outstanding (in shares) | 2,623,109 | 2,623,109 |
Class B (non-voting) [Member] | ||
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares outstanding (in shares) | 12,402,941 | 12,356,389 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | |||
Net premiums earned | $ 263,335 | $ 261,627 | $ 252,743 |
Net investment income | 12,498 | 9,055 | 8,770 |
Commissions and other income | 5,703 | 6,430 | 5,944 |
Net realized gains on investments, excluding impairment losses | 6,439 | 15,619 | 24,257 |
Total other-than-temporary impairment losses on investments | (7,700) | (689) | (744) |
Portion of other-than-temporary impairment losses recognized in other comprehensive income | 0 | 0 | 2 |
Net realized gains (losses) on investments | (1,261) | 14,930 | 23,515 |
Total revenue | 280,275 | 292,042 | 290,972 |
Expenses: | |||
Losses and loss expenses incurred | 155,750 | 159,596 | 150,701 |
Other operating expenses | 90,573 | 88,048 | 85,361 |
Total expenses | 246,323 | 247,644 | 236,062 |
Income before federal income taxes | 33,952 | 44,398 | 54,910 |
Federal income taxes | 10,669 | 14,681 | 18,322 |
Net income | $ 23,283 | $ 29,717 | $ 36,588 |
Per share data: | |||
Basic and diluted earnings (in dollars per share) | $ 1.55 | $ 1.98 | $ 2.45 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Comprehensive Income [Abstract] | |||
Net income | $ 23,283 | $ 29,717 | $ 36,588 |
Unrealized net gains (losses) on securities: | |||
Unrealized holding net gains (losses) arising during the period | (12,639) | 7,835 | 23,711 |
Less: reclassification adjustment for net losses included in net income | (277) | (5,084) | (10,089) |
Change in unrealized gains on investments | (12,916) | 2,751 | 13,622 |
Foreign currency translation adjustments | (1,456) | (1,011) | (575) |
Other comprehensive income (loss) | (14,372) | 1,740 | 13,047 |
Comprehensive income | $ 8,911 | $ 31,457 | $ 49,635 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity $ in Thousands | USD ($) |
Shareholders' equity at beginning of year at Dec. 31, 2012 | $ 346,712 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Net income | 36,588 |
Other comprehensive income (loss) | 13,047 |
Cash dividends paid to shareholders | (14,943) |
Issuance of common stock | 320 |
Shareholders' equity at end of year: at Dec. 31, 2013 | 381,724 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Net income | 29,717 |
Other comprehensive income (loss) | 1,740 |
Cash dividends paid to shareholders | (14,947) |
Issuance of common stock | 1,262 |
Shareholders' equity at end of year: at Dec. 31, 2014 | 399,496 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Net income | 23,283 |
Other comprehensive income (loss) | (14,372) |
Cash dividends paid to shareholders | (15,003) |
Issuance of common stock | 1,094 |
Shareholders' equity at end of year: at Dec. 31, 2015 | $ 394,498 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities | |||
Net income | $ 23,283 | $ 29,717 | $ 36,588 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Change in accounts receivable and unearned premium | 22,939 | 3,230 | (16,488) |
Change in accrued investment income | (307) | (234) | 939 |
Change in reinsurance recoverable on paid losses | 4,458 | (2,785) | (1,618) |
Change in losses and loss expenses reserves net of reinsurance | 6,325 | 7,545 | (1,264) |
Change in other assets, other liabilities and current income taxes | (28,299) | (4,847) | 29,892 |
Amortization of net policy acquisition costs | 21,314 | 25,075 | 26,592 |
Net policy acquisition costs deferred | (20,495) | (25,019) | (25,819) |
Provision for deferred income taxes (benefits) | (1,819) | 1,640 | 939 |
Bond amortization | 3,388 | 4,235 | 5,068 |
(Gain) loss on sale of property | 18 | 474 | (27) |
Depreciation | 5,037 | 4,797 | 4,300 |
Net realized (gains) losses on investments | 1,261 | (14,930) | (23,515) |
Compensation expense related to restricted stock | 1,094 | 1,262 | 320 |
Net cash provided by operating activities | 38,197 | 30,160 | 35,907 |
Investing activities | |||
Purchases of fixed maturities and equity securities | (342,592) | (288,283) | (369,259) |
Purchases of limited partnership interests | (409) | (6,886) | (3,568) |
Distributions from limited partnerships | 4,494 | 1,752 | 2,528 |
Proceeds from maturities | 161,706 | 98,714 | 129,113 |
Proceeds from sales of fixed maturities | 117,338 | 167,406 | 207,723 |
Proceeds from sales of equity securities | 53,270 | 19,263 | 29,858 |
Net sales (purchases) of short-term investments | 746 | 1,925 | (690) |
Purchases of property and equipment | (7,662) | (13,451) | (28,607) |
Proceeds from disposals of property and equipment | 277 | 693 | 261 |
Net cash used in investing activities | (12,832) | (18,867) | (32,641) |
Financing activities | |||
Dividends paid to shareholders | (15,003) | (14,947) | (14,943) |
Drawings on line of credit | 0 | 10,000 | 0 |
Net cash used in financing activities | (15,003) | (4,947) | (14,943) |
Effect of foreign exchange rates on cash and cash equivalents | (1,456) | (1,011) | (575) |
Increase (decrease) in cash and cash equivalents | 8,906 | 5,335 | (12,252) |
Cash and cash equivalents at beginning of year | 64,632 | 59,297 | 71,549 |
Cash and cash equivalents at end of year | $ 73,538 | $ 64,632 | $ 59,297 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note A - Summary of Significant Accounting Policies Description of Business: Basis of Presentation: Use of Estimates: Cash and Cash Equivalents: Investments: Other investments, if any, are carried at either market value or cost, depending on the nature of the investment. Short-term investments are carried at cost, which approximates their fair values. Realized gains and losses on disposals of investments are determined by specific identification of cost of investments sold and are included in income. All fixed maturity and equity securities are considered to be available for sale; the related unrealized net gains or losses (net of applicable tax effect) are reflected directly in shareholders' equity. Included within available for sale fixed maturity securities are insurance linked securities and convertible debt securities. The changes in fair values of insurance-linked securities and portions of the changes in fair values of convertible debt securities are reflected as a component of net realized gains (losses) on investments. In accordance with the Financial Accounting Standard Board's ("FASB") other-than-temporary impairment ("OTTI") guidance, if a fixed maturity security is in an unrealized loss position and the Company has the intent to sell the fixed maturity security, or it is more likely than not that the Company will have to sell the fixed maturity security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to net realized losses on investments in the consolidated statements of operations. For impaired fixed maturity securities that the Company does not intend to sell or in cases where it is more likely than not that the Company will not have to sell such securities, but the Company expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in net realized losses on investments in the consolidated statements of operations and the non-credit component of the other-than-temporary impairment is recognized directly in shareholder's equity (accumulated other comprehensive income). The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security. The net present value is calculated by discounting the Company's best estimate of projected future cash flows at the appropriate effective interest rate. The unrealized net gains or losses (net of applicable tax effect) related to equity securities are reflected directly in shareholders' equity, unless a decline in value is determined to be other-than-temporary, in which case the loss is charged to income. In determining if and when a decline in market value below cost is other-than-temporary, an objective analysis is made of each individual security where current market value is less than cost. For any equity security where the unrealized loss exceeds 20% of original or adjusted cost, and where that decline has existed for a period of at least six months, the decline is treated as an other-than-temporary impairment. Additionally, for any equity security where the decline has existed for a period of at least one year, the decline is treated as an other-than-temporary impairment. Additionally, the Company takes into account any known subjective information in evaluating for impairment, without consideration to the Company's quantitative criteria defined above, as well as the Company's intent and ability to retain the equity security for a period of time sufficient to allow for such recovery in fair value. Property and Equipment: Goodwill and Other Intangible Assets: Reserves for Losses and Loss Expenses: Recognition of Revenue and Costs: Reinsurance Should impairment in the ability of a reinsurer to satisfy its obligations to the Company be determined to exist, current year operations would be charged in amounts sufficient to provide for the Company's additional liability. Such charges, when incurred, are included in other operating expenses, rather than losses and loss expenses incurred, since the inability of the Company to collect from reinsurers is a credit risk rather than a deficiency associated with the loss reserving process. The Company accounts for foreign and domestic reinsurance using the periodic method. Under the periodic method, premiums are recognized as revenue ratably over the contract term, and claims, including an estimate of claims incurred but not reported, are recognized as they occur. Deferred Taxes: Restricted Stock: Earnings Per Share: Comprehensive Income: Fair Value Measurements: Recent Accounting Pronouncements: January 2016 In May 2015, the FASB issued ASU 2015-09, Disclosures about Short-Duration Contracts, and this new guidance will enhance disclosures about an entity's insurance liabilities. This guidance will provide additional information about unpaid claims and claim development, including supplemental disaggregated incurred and paid claim data. Under the guidance, enhanced disclosures on claim frequency and reserving methodologies are required. The guidance is effective for annual periods beginning after December 15, 2015 and for interim periods beginning after December 15, 2016, however early adoption is permitted. The Company has not yet adopted the guidance and the adoption of this guidance will not impact our consolidated financial position, results of operations or cash flows. In May 2015, the FASB issued ASU 2015-07 – Fair Value Measurement – (Topic 820) Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or its equivalent) (a consensus of the Emerging Issues Task Force), which will be effective for fiscal years beginning after December 15, 2015. The new pronouncement was issued to ensure that all investments categorized in the fair value hierarchy are classified using a consistent approach. The Company has not yet adopted the guidance and the adoption of this guidance is not expected to have a material impact on presentation of data in the consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to clarify the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, the Company's service and fee income could be subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to the quarter ending March 31, 2018. The Company is currently evaluating the impact this guidance will have on its results of operations, financial position or liquidity. The Company does not expect the guidance to have a material impact on its results of operations, financial position or liquidity. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Investments | Note B - Investments The following is a summary of available for sale securities at December 31: Net Cost or Gross Gross Unrealized Fair Amortized Unrealized Unrealized Gains Value Cost Gains Losses (Losses) 2015: Fixed maturities: U.S. government obligations $ 103,245 $ 103,448 $ 56 $ (259 ) $ (203 ) Residential mortgage-backed securities 4,776 4,668 162 (54 ) 108 Commercial mortgage-backed securities 30,595 30,977 247 (629 ) (382 ) State and municipal obligations 110,578 109,932 806 (160 ) 646 Corporate securities 164,025 168,137 2,445 (6,557 ) (4,112 ) Foreign government obligations 23,965 25,416 404 (1,855 ) (1,451 ) Total fixed maturities 437,184 442,578 4,120 (9,514 ) (5,394 ) Equity securities: Financial institutions 21,694 10,836 11,069 (211 ) 10,858 Industrial & miscellaneous 123,804 69,385 59,338 (4,919 ) 54,419 Total equity securities 145,498 80,221 70,407 (5,130 ) 65,277 Total $ 582,682 $ 522,799 $ 74,527 $ (14,644 ) 59,883 Applicable federal income taxes (20,959 ) Net unrealized gains - net of tax $ 38,924 2014: Fixed maturities: U.S. government obligations $ 101,094 $ 101,058 $ 108 $ (72 ) $ 36 Residential mortgage-backed securities 6,066 5,830 273 (37 ) 236 Commercial mortgage-backed securities 36,440 36,210 630 (400 ) 230 State and municipal obligations 113,777 113,133 784 (140 ) 644 Corporate securities 166,966 170,822 2,005 (5,861 ) (3,856 ) Foreign government obligations 27,466 28,332 114 (980 ) (866 ) Total fixed maturities 451,809 455,385 3,914 (7,490 ) (3,576 ) Equity securities: Financial institutions 25,343 10,100 15,303 (60 ) 15,243 Industrial & miscellaneous 136,764 68,678 70,260 (2,174 ) 68,086 Total equity securities 162,107 78,778 85,563 (2,234 ) 83,329 Total $ 613,916 $ 534,163 $ 89,477 $ (9,724 ) 79,753 Applicable federal income taxes (27,913 ) Net unrealized gains - net of tax $ 51,840 The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at December 31, the aggregate fair value and gross unrealized loss categorized by the duration those securities have been continuously in an unrealized loss position. 2015 2014 Number of Securities Fair Value Gross Unrealized Loss Number of Securities Fair Value Gross Unrealized Loss Fixed maturity securities: 12 months or less 328 $ 205,475 $ (5,070 ) 591 $ 176,756 $ (6,083 ) Greater than 12 months 168 108,043 (4,444 ) 140 27,667 (1,407 ) Total fixed maturities 496 313,518 (9,514 ) 731 204,423 (7,490 ) Equity securities: 12 months or less 73 26,517 (5,130 ) 33 13,538 (2,170 ) Greater than 12 months - - - 3 686 (64 ) Total equity securities 73 26,517 (5,130 ) 36 14,224 (2,234 ) Total 569 $ 340,035 $ (14,644 ) 767 $ 218,647 $ (9,724 ) Unrealized losses in the Company's fixed maturity portfolio are generally the result of interest rate or foreign currency fluctuations as well as the disruption of credit markets occasioned by financial market turmoil. The average unrealized loss for all fixed maturity securities in a loss position at December 31, 2015 is approximately 3% of original or adjusted cost. The Company does not intend to sell any fixed maturity securities which are in an unrealized loss position at December 31, 2015 and it is not more likely than not that the Company will have to sell any fixed maturity security before recovery of its amortized cost basis. For equity securities, the Company has evaluated the near-term prospects of the investments in relation to the severity and duration of the impairment and, based on that evaluation, the Company has the ability and intent to hold these investments for a period sufficient to allow for recovery of fair value. Accordingly, the Company does not believe the unrealized losses represent an other-than-temporary impairment as of December 31, 2015. The fair value and the cost or amortized cost of fixed maturity investments at December 31, 2015, by contractual maturity, is shown below. Actual maturities may differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties. Pre-refunded municipal bonds are classified based on their pre-refunded call dates. Fair Value Cost or Amortized Cost One year or less $ 74,187 17.0 % $ 75,854 17.1 % Excess of one year to five years 242,713 55.5 244,033 55.1 Excess of five years to ten years 36,452 8.3 37,269 8.4 Excess of ten years 3,218 0.8 2,901 0.7 Total maturities 356,570 81.6 360,057 81.3 Asset-backed securities 80,614 18.4 82,521 18.7 $ 437,184 100.0 % $ 442,578 100.0 % Major categories of investment income for the years ended December 31 are summarized as follows: 2015 2014 2013 Interest on fixed maturities $ 11,663 $ 8,806 $ 9,023 Dividends on equity securities 3,445 2,693 2,166 Money market funds, Short-term and other 32 37 49 15,140 11,536 11,238 Investment expenses (2,642 ) (2,481 ) (2,468 ) Net investment income $ 12,498 $ 9,055 $ 8,770 Gains and losses on investments, including equity method earnings from limited partnerships, for the years ended December 31 are summarized below: 2015 2014 2013 Fixed maturities: Gross gains $ 6,633 $ 6,480 $ 7,235 Gross losses (13,634 ) (4,596 ) (4,371 ) Net gains (losses) (7,001 ) 1,884 2,864 Equity securities: Gross gains 21,070 7,467 15,374 Gross losses (13,643 ) (1,529 ) (2,718 ) Net gains 7,427 5,938 12,656 Limited partnerships - net gain (loss) (1,687 ) 7,108 7,995 Total net gains (losses) $ (1,261 ) $ 14,930 $ 23,515 Shareholders' equity includes approximately $26,521, net of deferred federal income taxes, of undistributed earnings from limited partnerships as of December 31, 2015. Gain and loss activity for fixed maturity and equity security investments, as shown in the previous table, include adjustments for other-than-temporary impairment for the years ended December 31 summarized as follows: 2015 2014 2013 Cumulative charges to income at beginning of year $ 7,168 $ 6,770 $ 7,773 Writedowns based on objective and subjective criteria 7,700 689 742 Recovery of prior writedowns upon sale or disposal (4,355 ) (291 ) (1,745 ) Net pre-tax realized gain (loss) (3,345 ) (398 ) 1,003 Cumulative charges to income at end of year $ 10,513 $ 7,168 $ 6,770 Addition (reduction) to earnings per share from net after-tax OTTI gain (loss) $ (.14 ) $ (.02 ) $ .04 Unrealized gain on investments previously written down at end of the year - see note below $ 14,710 $ 17,127 $ 13,129 Note: Recovery in market value of an investment which has previously been adjusted for other-than-temporary impairment is treated as an unrealized gain until the investment matures or is sold. There is no primary or secondary market for the Company's investments in limited partnerships and, in most cases, the Company is prohibited from disposing of its limited partnership interests for some period of time and generally must seek approval from the applicable general partner for any such disposal. Distributions of earnings from these partnerships are largely at the sole discretion of the general partners and distributions are generally not received by the Company for many years after the earnings have been reported. The Company has commitments to contribute an additional $2,459 to various limited partnerships as of December 31, 2015. The Company has invested a total of $23,000 in two limited partnerships, with an aggregate estimated value of $45,009 at December 31, 2015, that are managed by organizations in which four directors of the Company are executive officers, directors or owners. The Company's ownership interest in these limited partnerships ranges from 5% to 17%. These limited partnerships added ($1,978), $7,088 and $1,154, net of fees, to investment gains (losses) in 2015, 2014 and 2013, respectively. During 2015, 2014 and 2013, the Company has recorded management fees of $749, $697 and $640, respectively, and performance-based fees of $0, $0 and $18, respectively, to these organizations for management of these limited partnerships. The Company utilizes the services of an investment firm of which two directors of the Company are employees or partial owners. This investment firm may serve as agent for purchases and sales of securities and manages equity securities and fixed maturity portfolios with an aggregate market value of approximately $62,156 at December 31, 2015. Total commissions and net fees earned by the investment firm and affiliates on these transactions and for advice and consulting were approximately $235, $212 and $239 during 2015, 2014 and 2013, respectively. The Company's limited partnerships include one significant investment which invests in public and private equity markets in India. This limited partnership investment's value as of December 31, 2015 and 2014 was $28,270 and $29,868, respectively. At December 31, 2015, the Company's estimated ownership interest in this limited partnership investment was approximately 5%. The Company's share of earnings (losses) from this limited partnership investment was ($1,599), $7,176 and ($3,176) in 2015, 2014 and 2013, respectively. The summarized financial information of the significant limited partnership investment as of and for the years ended December 31 is as follows: 2015 2014 2013 Total assets $ 511,118 $ 565,500 $ 493,028 Total partners' capital 470,783 542,700 444,337 Net increase (decrease) in partners' capital resulting from operations (19,603 ) 125,700 (64,550 ) The fair value of regulatory deposits with various insurance departments in the United States and Canada totaled $84,198 and $76,406 at December 31, 2015 and 2014, respectively. Short-term investments at December 31, 2015 include $2,220 in time certificates of deposit issued by a Bermuda bank. The Company's fixed maturities are over 85% invested in investment grade fixed maturity investments. The Company has a total of $2,969, representing three different investments, of fixed maturity investments which were originally issued with guarantees by three different third party insurance companies, with the largest exposure to a single investment being $1,997. The average S&P credit rating of such investments, with consideration of the guarantee, is AA. The average S&P underlying credit rating of such investments, without consideration of the guarantee, would remain AA. The Company does not have any direct exposure to any guarantor. Approximately $61,271 of fixed maturity investments (8.4% of total invested assets) consists of bonds rated as less than investment grade at year end. These investments include a diversified portfolio of over 40 investments and have a $3,185 aggregate net As of December 31, 2015, the Company had committed funds totaling $5,000 related to one bridge loan agreement. The Company retains possession of these committed funds which will only be loaned in the unlikely event that long-term financing is unavailable to the counter party in the market. |
Loss and Loss Expense Reserves
Loss and Loss Expense Reserves | 12 Months Ended |
Dec. 31, 2015 | |
Loss and Loss Expense Reserves [Abstract] | |
Loss and Loss Expense Reserves | Note C - Loss and Loss Expense Reserves Activity in the reserves for losses and loss expenses is summarized as follows. All amounts are shown net of reinsurance, unless otherwise indicated. 2015 2014 2013 Reserves at the beginning of the year $ 295,583 $ 288,088 $ 289,236 Provision for losses and loss expenses: Claims occurring during the current year 165,812 169,950 156,264 Claims occurring during prior years (10,062 ) (10,354 ) (5,563 ) Total incurred 155,750 159,596 150,701 Loss and loss expense payments: Claims occurring during the current year 56,710 59,826 47,908 Claims occurring during prior years 92,870 92,275 103,941 Total paid 149,580 152,101 151,849 Reserves at the end of the year 301,753 295,583 288,088 Reinsurance recoverable on unpaid losses at the end of the year 211,843 210,519 186,382 Reserves, gross of reinsurance recoverable, at the end of the year $ 513,596 $ 506,102 $ 474,470 The table above shows that a savings of $10,062 was developed during 2015 in the settlement of claims occurring on or before December 31, 2014 with comparative developments for the two previous calendar years. The net savings for each year are composed of individual claim savings and deficiencies which, in the aggregate have resulted from the settlement of claims at amounts lower than previously reserved and from changes in estimates of losses incurred but not reported as part of the normal reserving process. The major components of the developments shown above are as follows for the years ended December 31: 2015 2014 2013 Property and casualty insurance $ (10,289 ) $ (5,423 ) $ (1,725 ) Reinsurance 227 (4,931 ) (3,838 ) Totals $ (10,062 ) $ (10,354 ) $ (5,563 ) Favorable loss development is influenced by the Company's long-standing policy of reserving for losses realistically and a willingness to settle claims based upon a seasoned evaluation of its exposures. Loss reserves pertaining to the Company's property reinsurance business are established partially by the ceding reinsurers although the Company routinely adjusts such reserves if management determines that additional reserves could be necessary. There is potential for fluctuations in loss developments related to reinsurance assumed to be more pronounced than those experienced on directly produced business which is reserved entirely by Company personnel. In addition, changes in the Company's net retention under reinsurance treaties will impact developments as more or less business is retained. These trends were considered in the establishment of the Company's reserves at December 31, 2015 and 2014. Loss reserves on certain permanent total disability workers' compensation reserves have been discounted to present value at pre-tax rates not exceeding 3.5%. At December 31, 2015 and 2014, loss reserves have been reduced by approximately $2,110 and $3,129, respectively. Discounting is applied to these claims since the amount of periodic payments to be made during the lifetime of claimants is fixed and determinable. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2015 | |
Reinsurance [Abstract] | |
Reinsurance | Note D – Reinsurance The insurance subsidiaries cede portions of their gross premiums written to certain other insurers under excess of loss and quota share treaties and by facultative placements. Reinsurance treaties with other companies permit the recovery of a portion of related direct losses. Management determines the amount of net exposure it is willing to accept generally on a product line basis. Certain treaties covering fleet transportation risks include annual deductibles which must be exceeded before the Company can recover under the terms of the treaty. The Company retains a higher percentage of the direct premium in consideration of these deductible provisions. The Company remains liable to the extent the reinsuring companies are unable to meet their obligations under reinsurance contracts. The Company also serves as an assuming reinsurer on treaties with direct writing insurance companies and, prior to June 30, 2015, under retrocessions from other reinsurers for catastrophic property coverages. Accordingly, for periods prior to that date, the occurrence of catastrophic events could have had a significant impact on the Company's operations. The Company also assumes reinsurance from direct writing insurance companies for casualty insurance coverages. In addition, the insurance subsidiaries participate in certain mandatory residual market pools which require insurance companies to provide coverages on assigned risks. The assigned risk pools allocate participation to all insurers based upon each insurer's portion of premium writings on a state or national level. Historically, the operation of these assigned risk pools have resulted in net losses allocated to the Company although such losses have not been material in relation to the Company's operations. The following table summarizes the impact of reinsurance ceded and assumed on the Company's net premiums written and earned for the most recent three years: Premiums Written Premiums Earned 2015 2014 2013 2015 2014 2013 Direct $ 366,668 $ 343,200 $ 314,784 $ 370,499 $ 342,656 $ 313,842 Ceded on direct (128,338 ) (118,942 ) (112,967 ) (128,135 ) (117,973 ) (111,057 ) Net direct 238,330 224,258 201,817 242,364 224,683 202,785 Assumed 16,885 39,188 54,692 21,533 38,219 52,783 Ceded on assumed (562 ) (1,275 ) (2,825 ) (562 ) (1,275 ) (2,825 ) Net assumed 16,323 37,913 51,867 20,971 36,944 49,958 Net $ 254,653 $ 262,171 $ 253,684 $ 263,335 $ 261,627 $ 252,743 Net losses and loss expenses incurred for 2015, 2014 and 2013 have been reduced by ceded reinsurance recoveries of approximately $75,581, $105,891 Net losses and loss expenses incurred for 2015, 2014 and 2013 include approximately $13,492, $20,288 and $17,696, respectively, relating to reinsurance assumed from non-affiliated insurance or reinsurance companies. Components of reinsurance recoverable at December 31 are as follows: 2015 2014 Case unpaid losses, net of valuation allowance $ 120,320 $ 143,403 Incurred but not reported unpaid losses and loss expenses 90,578 66,325 Paid losses and loss expenses 2,452 6,910 Unearned premiums 2,538 3,583 $ 215,888 $ 220,221 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
Income Taxes | Note E - Income Taxes Deferred income taxes are calculated to account for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities as of December 31 are as follows: 2015 2014 Deferred tax liabilities: Unrealized gain on fixed income and equity security investments $ 20,959 $ 27,914 Deferred acquisition costs 877 1,341 Loss and loss expense reserves 2,305 2,373 Limited partnership investments 1,771 4,636 Accelerated depreciation 897 601 Other 1,024 628 Total deferred tax liabilities 27,833 37,493 Deferred tax assets: Loss and loss expense reserves 9,349 10,973 Unearned premiums discount 1,593 2,201 Other-than-temporary investment declines 3,437 2,049 Deferred compensation 1,699 1,565 Deferred ceding commission 371 549 Other 186 183 Total deferred tax assets 16,635 17,520 Net deferred tax liabilities $ (11,198 ) $ (19,973 ) A summary of the difference between federal income tax expense computed at the statutory rate and that reported in the consolidated financial statements is as follows: 2015 2014 2013 Statutory federal income rate applied to pretax income $ 11,883 $ 15,539 $ 19,218 Tax effect of (deduction): Tax-exempt investment income (919 ) (924 ) (811 ) Other (295 ) 66 (85 ) Federal income tax expense $ 10,669 $ 14,681 $ 18,322 Federal income tax expense consists of the following: 2015 2014 2013 Taxes (benefit) on pre-tax income: Current $ 12,488 $ 13,041 $ 17,383 Deferred (1,819 ) 1,640 939 $ 10,669 $ 14,681 $ 18,322 The components of the provision for deferred federal income taxes are as follows: 2015 2014 2013 Limited partnerships $ (2,865 ) $ 2,025 $ 1,058 Discounts of loss and loss expense reserves 1,526 113 313 Unearned premium discount 608 (38 ) (65 ) Deferred compensation (127 ) (685 ) (146 ) Other-than-temporary investment declines (1,416 ) (19 ) 680 Deferred acquisitions costs and ceding commission (287 ) (20 ) (271 ) Other 742 264 (630 ) Provision for deferred federal income tax $ (1,819 ) $ 1,640 $ 939 Cash flows related to federal income taxes paid, net of refunds received, for 2015, 2014 and 2013 were $14,500, $11,619 and $17,250, respectively. The Company is required to establish a valuation allowance for any portion of the gross deferred tax asset that management believes will not be realized. Management has determined that no such valuation allowance is necessary at December 31, 2015 or 2014. As of December 31, 2015, only the calendar year 2014 remains subject to examination by the IRS. The Company has no uncertain tax positions as of December 31, 2015 or 2014. The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits in income tax expense and changes in such accruals would impact the Company's effective tax rate. There were no amounts accrued for the payment of interest at December 31, 2015, 2014 and 2013. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | Note F - Shareholders' Equity Changes in common stock outstanding and additional paid-in capital are as follows: Additional Class A Class B Paid-in Shares Amount Shares Amount Capital Balance at January 1, 2013 2,623,109 $ 112 12,290,035 $ 524 $ 50,275 Restricted stock grants - - 14,156 1 319 Balance at December 31, 2013 2,623,109 112 12,304,191 525 50,594 Restricted stock grants - - 52,198 2 1,260 Balance at December 31, 2014 2,623,109 112 12,356,389 527 51,854 Restricted stock grants - - 46,552 2 1,092 Balance at December 31, 2015 2,623,109 $ 112 12,402,941 $ 529 $ 52,946 The Company's Class A and Class B common stock has a stated value of approximately $.04 per share. The Company paid a total of $15,003, $14,947 and $14,943, or $1.00 per share, in dividends for the years 2015, 2014 and 2013, respectively. |
Other Operating Expenses
Other Operating Expenses | 12 Months Ended |
Dec. 31, 2015 | |
Other Operating Expenses [Abstract] | |
Other Operating Expenses | Note G - Other Operating Expenses Details of other operating expenses for the years ended December 31: 2015 2014 2013 Amortization of gross deferred policy acquisition costs $ 50,270 $ 48,872 $ 47,414 Other underwriting expenses 42,638 37,830 35,281 Expense allowances from reinsurers (28,956 ) (23,797 ) (20,822 ) Total underwriting expenses 63,952 62,905 61,873 Operating expenses of non-insurance companies 26,621 25,143 23,488 Total other operating expenses $ 90,573 $ 88,048 $ 85,361 The Company entered into a consulting contract with an insurance intermediary, capital advisor and insurance management firm of which a director of the Company is CEO and a Managing Director. The consulting contract provides for an annual fee of $300. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Note H - Employee Benefit Plans The Company maintains a defined contribution 401(k) Employee Savings and Profit Sharing Plan (the "Plan") which covers nearly all employees who have completed one year of service. The Company's contributions to the Plan for 2015, 2014 and 2013 were $2,090, $1,798 and $1,798, respectively. |
Stock Purchase and Option Plans
Stock Purchase and Option Plans | 12 Months Ended |
Dec. 31, 2015 | |
Stock Purchase and Option Plans [Abstract] | |
Stock Purchase and Option Plans | Note I - Stock Purchase and Option Plans In accordance with the terms of the 1981 Stock Purchase Plan (1981 Plan), the Company is obligated to repurchase shares issued under the 1981 Plan, at a price equal to 90% of the book value of the shares at the end of the quarter immediately preceding the date of repurchase. A limited number of shares have ever been repurchased under the 1981 Plan. At December 31, 2015, there were 121,286 shares (Class A) and 339,546 shares (Class B) outstanding which remain eligible for repurchase by the Company. The Company maintains a single restricted stock unit plan which is described below. Restricted Stock: Each year, beginning in 2009, the Company has issued shares of class B restricted stock to the Company's outside directors. The shares serve as the annual retainer compensation for the outside directors for the periods shown below. The shares are distributed on the vesting date and have a total value of $480, $440 and $440 for the annual periods ended 2015, 2014 and 2013, respectively. The table below provides detail of the stock issuances for 2015, 2014 and 2013: Effective Number of Shares Vesting Value Date Issued Date Period Per Share 5/7/2013 18,106 5/7/2014 7/1/2013 - 6/30/2014 $ 24.30 5/8/2014 17,237 5/8/2015 7/1/2014 - 6/30/2015 $ 25.53 5/12/2015 21,252 5/12/2016 7/1/2015 - 6/30/2016 $ 22.59 Compensation expense related to the above stock grant is recognized over the period in which the directors render the services. Director compensation cost associated with restricted stock grants of $460, $440 and $440 was charged against income for the restricted stock units for 2015, 2014 and 2013, respectively. Effective February 4, 2015, the Company issued 36,646 shares of class B restricted stock to certain of the Company's executives. The restricted shares will be paid solely in the Company's class B stock. The restricted shares represent a portion of the calendar year 2014 compensation to certain executives under the terms of the Company's Executive Incentive Bonus Plan. The restricted shares will vest ratably over a three year period from the date of grant and are accelerated for retirement eligible recipients in accordance with the non-substantive post-grant date vesting clause of ASC 715, Compensation-Retirement Benefits. Restricted stock was valued based on the closing price of the stock on the day the award was granted. Each share was valued at $23.29 per share representing a total value of $853. Non-vested restricted shares will be forfeited should an executive's employment terminate for any reason other than death, disability, or retirement as defined by the Compensation Committee. Effective February 5, 2016, the Company issued 47,333 shares of class B restricted stock to certain of the Company's executives. The restricted shares will be paid solely in the Company's class B stock. The restricted shares represent a portion of the calendar year 2015 compensation to certain executives under the terms of the Company's Executive Incentive Bonus Plan. The restricted shares will vest ratably over a three year period from the date of grant and are accelerated for retirement eligible recipients in accordance with the non-substantive post-grant date vesting clause of ASC 715, Compensation-Retirement Benefits. Restricted stock was valued based on the closing price of the stock on the day the award was granted. Each share was valued at $23.30 per share representing a total value of $1,103. Non-vested restricted shares will be forfeited should an executive's employment terminate for any reason other than death, disability, or retirement as defined by the Compensation Committee. |
Reportable Segments
Reportable Segments | 12 Months Ended |
Dec. 31, 2015 | |
Reportable Segments [Abstract] | |
Reportable Segments | Note J - Reportable Segments The Company operates within two reportable business segments: property and casualty insurance and reinsurance. The property and casualty insurance segment provides multiple line insurance coverage primarily to fleet transportation companies as well as to independent contractors who contract with fleet transportation companies. In addition, the Company provides private passenger automobile products to individuals, workers' compensation coverage to small businesses and professional liability products on a selective basis. The reinsurance segment currently accepts professional liability cessions from other insurance companies. From 1992 until July 1, 2014, the reinsurance segment accepted property cessions from other insurance companies and retrocessions from reinsurance companies, principally reinsuring against catastrophes. Final exposure to property catastrophe losses expired on June 30, 2015. The Company evaluates performance and allocates resources based on past or expected results from insurance underwriting operations before income taxes. Underwriting gain or loss does not include net investment income or gains or losses on the Company's investment portfolio. All investment-related revenues are managed at the corporate level. Underwriting gain or loss for the property and casualty insurance segment includes revenue and expense from the Company's agency operations since the agency operations serve as a primary direct marketing facility for this segment. Management does not identify or allocate assets to reportable segments when evaluating segment performance and depreciation expense is not material for any of the reportable segments. The accounting policies of each reportable segment are the same as those described in the summary of significant accounting policies. The following table provides certain profit and loss information for each reportable segment for the years ended December 31: 2015 2014 2013 Direct and assumed premium written: Property and casualty insurance $ 366,668 $ 343,200 $ 314,784 Reinsurance 16,885 39,188 54,692 Totals $ 383,553 $ 382,388 $ 369,476 Net premium earned: Property and casualty insurance $ 242,364 $ 224,683 $ 202,785 Reinsurance 20,971 36,944 49,958 Totals $ 263,335 $ 261,627 $ 252,743 Underwriting gain: Property and casualty insurance $ 40,431 $ 32,663 $ 25,558 Reinsurance (1,504 ) 2,147 12,278 Totals $ 38,927 $ 34,810 $ 37,836 The following table reconciles reportable segment profits to the Company's consolidated income before federal income taxes: 2015 2014 2013 Profit: Underwriting gain $ 38,927 $ 34,810 $ 37,836 Net investment income 12,498 9,055 8,770 Net realized gains (losses) on investments (1,261 ) 14,930 23,515 Corporate expenses (16,212 ) (14,397 ) (15,211 ) Income before federal income taxes $ 33,952 $ 44,398 $ 54,910 One customer of the property and casualty insurance segment, FedEx Ground Systems, Inc. An additional $209,434, $197,767 and $171,615 for 2015, 2014 and 2013, respectively, is placed with the Company by a non-affiliated broker on behalf of contracted service providers of this same customer |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note K - Earnings Per Share The following is a reconciliation of the denominators used in the calculation of basic and diluted earnings per share for the years ended December 31: 2015 2014 2013 Average share outstanding for basic earnings per share 15,010,454 14,963,959 14,906,416 Dilutive effect of share equivalents 11,308 11,935 17,345 Average shares outstanding for diluted earnings per share 15,021,762 14,975,894 14,923,761 |
Concentrations of Credit Risk
Concentrations of Credit Risk | 12 Months Ended |
Dec. 31, 2015 | |
Concentrations of Credit Risk [Abstract] | |
Concentrations of Credit Risk | Note L - Concentrations of Credit Risk The Company writes policies of excess insurance attaching above self-insured retentions ("SIR") and also writes policies that contain per-claim deductibles. Those losses and claims that fall within the SIR limits are obligations of the insured; however, the Company writes surety bonds in favor of various regulatory agencies guaranteeing the insureds' payment of claims within the SIR. Further, specified portions of losses and claims incurred under large deductible policies, while obligations of the Company, are contractually reimbursable to the Company from the insureds. The Company requires collateral from its insureds to serve as a source of reimbursement if the Company is obligated to pay claims within the SIR by reason of an insured's default or if the insured fails to reimburse the Company for deductible amounts paid by the Company. Acceptable collateral may be provided in the form of letters of credit on Company approved banks, Company approved marketable securities or cash. At December 31, 2015, the Company held collateral in the aggregate amount of $248,637. The amount of collateral required of an insured is determined by the financial condition of the insured, the type of obligations guaranteed by the Company, estimated reserves for incurred losses within the SIR or deductible that have been reported to the insured or the Company, estimated incurred but not reported losses, and estimates for losses that are expected to occur, within the SIR or deductible, prior to the next collateral adjustment date. In general, the Company attempts to hold collateral equal to 100% of the ultimate losses that would be paid by or due the Company in the event of an insured's default. Periodic audits are conducted by the Company to evaluate its exposure and the collateral required. If a deficiency in collateral is noted as the result of an audit, additional collateral is requested immediately. Because collateral amounts contain numerous estimates of the Company's exposure, are adjusted only periodically and are sometimes reduced based on the superior financial condition of the insured, the amount of collateral held by the Company at a given point in time may not be sufficient to fully reimburse the Company for all of its guarantees or amounts due in the event of an insured's default. In that regard, the Company is not fully collateralized for the guarantees made for, or the deductible amounts that may be due from FedEx Ground and certain of its subsidiaries and related entities, and in the event of their default, such default may have a material adverse impact on the Company. The Company estimates its uncollateralized exposure related to this customer to be as much as 47% of shareholders' equity at December 31, 2015. The Company's balance sheet includes paid and estimated unpaid amounts recoverable from reinsurers under various agreements totaling $232,735 at December 31, 2015. These recoverables are only partially collateralized. The two largest amounts due from individual reinsurers, net of collateral and offsets, were $36,796 and $17,817 at December 31, 2015. Investments in limited partnerships include an aggregate of $45,009 invested in two limited partnerships, New Vernon India Fund and New Vernon Global Opportunity Fund which are managed by organizations in which four directors of the Company are executive officers, directors and owners. |
Acquisition and related Goodwil
Acquisition and related Goodwill and Intangibles | 12 Months Ended |
Dec. 31, 2015 | |
Acquisition and related Goodwill and Intangibles [Abstract] | |
Acquisition and related Goodwill and Intangibles | Note M – Acquisition and related Goodwill and Intangibles On October 31, 2008, the Company purchased a commercial lines specialty insurance agency for a cash purchase price of $3,500. The acquisition is part of the Company's property and casualty insurance segment. As part of the purchase, the Company recorded goodwill of $3,152 and intangible assets related to customer relationships and employment agreements of $179 which are included in Other Assets in the consolidated balance sheets and have recorded amortization of intangible assets of $0, $4 and $17 during 2015, 2014, and 2013, respectively. Accumulated amortization of intangible assets was $179 as of December 31, 2015 and 2014. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value [Abstract] | |
Fair Value | Note N – Fair Value Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The carrying amounts reported in the consolidated balance sheets for cash, accounts receivables, reinsurance recoverable, notes receivable, accounts payable and accrued expenses, income taxes payable, short term borrowings and unearned income approximate fair value because of the short term nature of these items. The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis: As of December 31, 2015: Description Total Level 1 Level 2 Level 3 Fixed maturities: U.S. government obligations $ 103,245 $ - $ 103,245 $ - Residential mortgage-backed securities 4,776 - 4,776 - Commercial mortgage-backed securities 30,595 - 29,226 1,369 State and municipal obligations 110,578 - 110,578 - Corporate securities 161,630 - 146,488 15,142 Options embedded in convertible securities 2,395 - 2,395 - Foreign government obligations 23,965 - 23,683 282 Total fixed maturities 437,184 - 420,391 16,793 Equity securities: Financial institutions 21,694 21,694 - - Industrial & miscellaneous 123,804 123,804 - - Total equity securities 145,498 145,498 - - Short term 2,220 2,220 - - Cash equivalents 69,517 - 69,517 - Total $ 654,419 $ 147,718 $ 489,908 $ 16,793 As of December 31, 2014: Description Total Level 1 Level 2 Level 3 Fixed maturities: U.S. government obligations $ 101,094 $ - $ 101,094 $ - Residential mortgage-backed securities 6,066 - 6,066 - Commercial mortgage-backed securities 36,440 - 36,440 - State and municipal obligations 113,777 - 113,777 - Corporate securities 164,068 - 151,860 12,208 Options embedded in convertible securities 2,898 - 2,898 - Foreign government obligations 27,466 - 27,466 - Total fixed maturities 451,809 - 439,601 12,208 Equity securities: Financial institutions 25,343 25,343 - - Industrial & miscellaneous 136,764 136,764 - - Total equity securities 162,107 162,107 - - Short term 2,966 2,966 - - Cash equivalents 59,309 - 59,309 - Total $ 676,191 $ 165,073 $ 498,910 $ 12,208 Level inputs, as defined by the FASB guidance, are as follows: Level Input: Input Definition: Level 1 Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level 2 Inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market data at the measurement date. Level 3 Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The Level 3 assets consist of a portfolio of corporate convertible bonds, commercial mortgage-backed securities and a limited amount of foreign government obligations. The assets are valued using various unobservable inputs including extrapolated data, proprietary models and indicative quotes. Transfers into Level 3 during 2015 and 2014 relate to securities previously classified as Level 2. A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs is as follows for the years ended December 31: 2015 2014 Beginning of period balance $ 12,208 $ - Total gains or losses (realized) included in income (104 ) - Purchases 2,284 - Settlements (8,068 ) - Transfers into Level 3 11,586 12,208 Transfers out of Level 3 (1,113 ) - End of period balance $ 16,793 $ 12,208 Quoted market prices are obtained whenever possible. Where quoted market prices are not available, fair values are estimated using present value or other valuation techniques. These techniques are significantly affected by our assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs have not been considered in estimating fair values. Transfers between levels, if any, are recorded as of the beginning of the reporting period. There were no significant transfers of assets between Level 1 and Level 2 during 2015. In addition to the preceding disclosures on assets recorded at fair value in the consolidated balance sheets, FASB guidance also requires the disclosure of fair values for certain other financial instruments for which it is practicable to estimate fair value, whether or not such values are recognized in the consolidated balance sheets. Non-financial instruments such as real estate, property and equipment, other assets, deferred income taxes and intangible assets, and certain financial instruments such as policy reserve liabilities are excluded from the fair value disclosures. Therefore, the fair value amounts cannot be aggregated to determine the underlying economic value to the Company. The following methods, assumptions and inputs were used to estimate the fair value of each class of financial instrument: Limited partnerships: The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to carry the investment at its proportionate share of the limited partnership's equity. The underlying assets of the Company's investments in limited partnerships are carried primarily at fair value, and, therefore, the Company's carrying value of limited partnerships approximates fair value. As these investments are not actively traded and the corresponding inputs are based on data provided by the investees, they are classified as Level 3. Short-term borrowings: The fair value of our short-term borrowings is based on quoted market prices for the same or similar debt, or, if no quoted market prices are available, on the current market interest rates available to us for debt of similar terms and remaining maturities. A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company's consolidated balance sheet at December 31, 2015 and 2014 is as follows: 2015: Carrying Fair Value Value Level 1 Level 2 Level 3 Total Assets: Limited partnerships $ 75,458 $ - $ - $ 75,458 $ 75,458 Liabilities: Short-term borrowings 20,000 - 20,000 - 20,000 2014: Assets: Limited partnerships $ 81,230 $ - $ - $ 81,230 $ 81,230 Liabilities: Short-term borrowings 20,000 - 20,000 - 20,000 |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Results of Operations (Unaudited) [Abstract] | |
Quarterly Results of Operations (Unaudited) | Note O - Quarterly Results of Operations (Unaudited) Quarterly results of operations are as follows: Results by Quarter 2015 2014 1st 2nd 3rd 4th 1st 2nd 3rd 4th Net premiums earned $ 66,446 $ 65,449 $ 65,445 $ 65,995 $ 63,842 $ 62,905 $ 65,947 $ 68,933 Net investment income 2,815 2,898 3,014 3,771 2,294 2,090 2,073 2,599 Net gains (losses) on investments 3,743 (1,166 ) (2,086 ) (1,753 ) 4,070 8,089 658 2,113 Losses and loss expenses incurred 41,646 37,031 35,212 41,860 39,289 40,282 38,693 41,332 Net income 6,243 5,718 7,780 3,541 6,361 9,340 5,770 8,246 Net income per share - diluted $ .42 $ .38 $ .52 $ .24 $ .42 $ .62 $ .39 $ .55 |
Statutory
Statutory | 12 Months Ended |
Dec. 31, 2015 | |
Statutory [Abstract] | |
Statutory | Note P - Statutory Net income of the insurance subsidiaries, all of which are wholly owned, as determined in accordance with statutory accounting practices, was $25,627, $27,143 and $30,886 for 2015, 2014 and 2013, respectively. Consolidated statutory capital and surplus for these subsidiaries was $390,823 and $398,762 at December 31, 2015 and 2014, respectively, of which $62,539 may be transferred by dividend or loan to the parent company during calendar year 2016 with proper notification to, but without approval from, regulatory authorities. An additional $239,249 of shareholders' equity of such insurance subsidiaries could, under existing regulations, be advanced or loaned to the parent company with prior notification to and approval from regulatory authorities, although it is unlikely that transfers of this size would be practical. State regulatory authorities prescribe calculations of the minimum amount of statutory capital and surplus necessary for each insurance company to remain authorized. These computations are referred to as Risk Based Capital ("RBC") requirements and are based on a number of complex factors taking into consideration the quality and nature of assets, the historical adequacy of recorded liabilities and the specific nature of business conducted. At December 31, 2015 the minimum statutory capital and surplus requirements of the insurance subsidiaries was $87,688. Actual consolidated statutory capital and surplus at December 31, 2015 exceeded this requirement by $303,135, which equals to 346% of minimum RBC. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Leases | Note Q - Leases The Company leases certain computer and related equipment using noncancelable operating leases. Lease expense for 2015, 2014 and 2013 was $175, $330 and $1,324, respectively. At December 31, 2015, future lease payments for operating leases with initial or remaining noncancelable terms of one year or more consisted of the following: 2016 $ 148 2017 116 2018 & thereafter - Total minimum payments required $ 264 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income | Note R – Accumulated Other Comprehensive Income A reconciliation of the components of accumulated other comprehensive income at December 31 is as follows: 2015 2014 Investments: Total unrealized gain before federal income taxes $ 59,883 $ 79,753 Deferred tax liability (20,959 ) (27,913 ) Net unrealized gains on investments 38,924 51,840 Foreign exchange adjustment: Total unrealized gains (losses) (1,640 ) 600 Deferred tax benefit (liability) 574 (210 ) Net unrealized gains (losses) on foreign exchange adjustment (1,066 ) 390 Accumulated other comprehensive income $ 37,858 $ 52,230 Details of changes in net unrealized gains on investments for the years ended December 31 are as follows: 2015 2014 2013 Investments: Pre-tax holding gains (losses) on debt and equity securities arising during period $ (19,445 ) $ 12,055 $ 36,477 Less: applicable federal income taxes (6,806 ) 4,220 12,766 (12,639 ) 7,835 23,711 Pre-tax gains on debt and equity securities included in net income during period 426 7,823 15,520 Less: applicable federal income taxes 149 2,739 5,431 277 5,084 10,089 Change in unrealized gains on investments $ (12,916 ) $ 2,751 $ 13,622 Reconciliation of accumulated other comprehensive income and retained earnings for the years ended December 31 are as follows: 2015 2014 2013 Beginning accumulated other comprehensive income $ 52,230 $ 50,490 $ 37,443 Change in foreign exchange adjustment (1,456 ) (1,011 ) (575 ) Change in unrealized net gains on investments (12,916 ) 2,751 13,622 Ending accumulated other comprehensive income $ 37,858 $ 52,230 $ 50,490 2015 2014 2013 Beginning retained earnings $ 294,773 $ 280,003 $ 258,358 Net income 23,283 29,717 36,588 Dividends (15,003 ) (14,947 ) (14,943 ) Ending retained earnings $ 303,053 $ 294,773 $ 280,003 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2015 | |
Debt [Abstract] | |
Debt | Note S – Debt The Company maintains a revolving line of credit with a $40,000 limit and an expiration date of September 23, 2018. Interest on this line of credit is referenced to LIBOR and can be fixed for periods of up to one year at the Company's option. Outstanding drawings on this line of credit were $20,000 as of December 31, 2015 and 2014, respectively. At December 31, 2015, the effective interest rate was 1.52%. The Company has $20,000 remaining unused under the line of credit at December 31, 2015. The current outstanding borrowings were used for general corporate purposes. |
SCHEDULE I -SUMMARY OF INVESTME
SCHEDULE I -SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | 12 Months Ended |
Dec. 31, 2015 | |
SCHEDULE I -- SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES [Abstract] | |
SCHEDULE I -- SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | SCHEDULE I -- SUMMARY OF INVESTMENTS- OTHER THAN INVESTMENTS IN RELATED PARTIES Form 10-K - Year Ended December 31, 2015 Baldwin & Lyons, Inc. and Subsidiaries (Dollars in thousands) Column A Column B Column C Column D Amount At Which Shown Fair In The Balance Type of Investment Cost Value Sheet (A) Fixed Maturities: Bonds: U.S. government obligations 103,448 103,245 103,245 Mortgage-backed securities 35,645 35,371 35,371 State and municipal obligations 109,932 110,578 110,578 Foreign government obligations 25,416 23,965 23,965 Corporate securities 168,137 164,025 164,025 Total fixed maturities 442,578 437,184 437,184 Equity Securities: Common Stocks: Industrial, miscellaneous and all other 80,221 145,498 145,498 Total equity securities 80,221 145,498 145,498 Limited partnerships 30,449 30,449 30,449 Short-term: Certificates of deposit 2,220 2,220 2,220 Total short-term and other 2,220 2,220 2,220 Total investments $ 555,468 $ 615,351 $ 615,351 (A) Investments presented above do not include $69,517 of money market funds classified with cash and cash equivalents in the balance sheet. |
SCHEDULE II CONDENSED FINANCIAL
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT | 12 Months Ended |
Dec. 31, 2015 | |
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT [Abstract] | |
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT | SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT Form 10-K Baldwin & Lyons, Inc. (Dollars in thousands) Condensed Balance Sheets December 31 2015 2014 Assets Investment in subsidiaries $ 405,192 $ 415,304 Due from affiliates 2,945 2,762 Investments other than subsidiaries: Fixed maturities 12,181 11,924 Limited partnerships 208 233 12,389 12,157 Cash and cash equivalents 17,934 16,615 Accounts receivable 6,418 5,157 Other assets 21,067 17,905 Total assets $ 465,945 $ 469,900 Liabilities and shareholders' equity Liabilities: Premiums payable $ 21,672 $ 27,850 Deposits from insureds 23,484 18,303 Notes payable to bank 20,000 20,000 Other liabilities 6,291 4,251 71,447 70,404 Shareholders' equity: Common stock: Class A 112 112 Class B 529 527 Additional paid-in capital 52,946 51,854 Unrealized net gains on investments 38,924 51,840 Foreign exchange adjustment (1,066 ) 390 Retained earnings 303,053 294,773 394,498 399,496 Total liabilities and shareholders' equity $ 465,945 $ 469,900 SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT Form 10-K Baldwin & Lyons, Inc. (Dollars in thousands) Condensed Statements of Operations Year Ended December 31 2015 2014 2013 Revenue: Commissions and service fees $ 23,523 $ 22,153 $ 21,597 Cash dividends from subsidiaries 20,000 15,000 15,000 Net investment income 120 102 54 Net realized losses on investments (22 ) (27 ) (11 ) Other (17 ) 126 41 43,604 37,354 36,681 Expenses: Salary and related items 17,616 15,543 15,965 Other 7,297 7,978 6,633 24,913 23,521 22,598 Income before federal income taxes and equity in undistributed income of subsidiaries 18,691 13,833 14,083 Federal income tax benefit (350 ) (294 ) (348 ) 19,041 14,127 14,431 Equity in undistributed income of subsidiaries 4,242 15,590 22,157 Net income $ 23,283 $ 29,717 $ 36,588 SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT Form 10-K Baldwin & Lyons, Inc. (Dollars in thousands) Condensed Statements of Cash Flows Year Ended December 31 2015 2014 2013 Net cash provided by operating activities $ 21,841 $ 19,719 $ 15,125 Investing activities: Purchases of long-term investments (4,792 ) (6,398 ) (10,322 ) Sales or maturities of long-term investments 4,194 5,253 9,982 Distributions from limited partnerships - 13 - Net purchases of property and equipment (4,921 ) (6,873 ) (1,775 ) Other - - (362 ) Net cash used in investing activities (5,519 ) (8,005 ) (2,477 ) Financing activities: Dividends paid to shareholders (15,003 ) (14,947 ) (14,943 ) Drawings on line of credit - 10,000 - Net cash used in financing activities (15,003 ) (4,947 ) (14,943 ) Increase (decrease) in cash and cash equivalents 1,319 6,767 (2,295 ) Cash and cash equivalents at beginning of year 16,615 9,848 12,143 Cash and cash equivalents at end of year $ 17,934 $ 16,615 $ 9,848 Note to Condensed Financial Statements -- Basis of Presentation The Company's investment in subsidiaries is stated at cost plus equity in the undistributed earnings of subsidiaries since the date of acquisition. The Company's share of net income of its subsidiaries is included in income using the equity method. These financial statements should be read in conjunction with the Company's consolidated financial statements. |
SCHEDULE III SUPPLEMENTARY INSU
SCHEDULE III SUPPLEMENTARY INSURANCE INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
SCHEDULE III SUPPLEMENTARY INSURANCE INFORMATION [Abstract] | |
SCHEDULE III SUPPLEMENTARY INSURANCE INFORMATION | SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION Form 10-K Baldwin & Lyons, Inc. and Subsidiaries (Dollars in thousands) Column A Column B Column C Column D Column E Column F Column G Column H Column I Column J Column K As of December 31 Year Ended December 31 Reserves for Unpaid Other Benefits, Amortization Deferred Claims Policy Claims, of Deferred Policy and Claim Claims and Net Net Losses and Policy Other Net Acquisition Acquisition Unearned Benefits Premium Investment Settlement Acquisition Operating Premiums Segment Costs Expenses Premiums Payable Earned Income Expenses Costs Expenses Written (C) (A) (B) (C) Property/Casualty Insurance 2015 $ 1,443 $ 464,305 $ 18,579 --- $ 242,364 $ 12,498 $ 142,258 $ 50,270 $ 13,682 $ 238,330 2014 2,263 449,133 23,659 --- 224,683 9,055 139,308 48,872 14,033 224,258 2013 2,319 408,469 26,303 --- 202,785 8,770 133,005 47,414 14,459 201,817 Reinsurance 2015 --- $ 49,291 $ 6,712 --- $ 20,971 $ 12,498 $ 13,492 --- $ 13,682 $ 16,323 2014 --- 56,969 11,360 --- 36,944 9,055 20,288 --- 14,033 37,913 2013 --- 66,001 10,390 --- 49,958 8,770 17,696 --- 14,459 51,867 (A) Allocations of certain expenses have been made to investment income, settlement expenses and other operating expenses and are based on a number of assumptions and estimates. Results among these categories would change if different methods were applied. (B) Commission allowances relating to reinsurance ceded are offset against other operating expenses. (C) Amounts are not broken down into separate segments; entire consolidated amount included in each segment. |
SCHEDULE IV - REINSURANCE
SCHEDULE IV - REINSURANCE | 12 Months Ended |
Dec. 31, 2015 | |
SCHEDULE IV -- REINSURANCE [Abstract] | |
SCHEDULE IV -- REINSURANCE | SCHEDULE IV -- REINSURANCE Form 10-K Baldwin & Lyons, Inc. and Subsidiaries (Dollars in thousands) Column A Column B Column C Column D Column E Column F % of Ceded Assumed Amount Direct to Other from Other Net Assumed to Premiums Companies Companies Amount Net Premiums Earned - Property/casualty insurance: Years Ended December 31: 2015 $ 370,499 $ 128,697 $ 21,533 $ 263,335 8.0 2014 342,656 119,248 38,219 261,627 14.1 2013 313,842 113,882 52,783 252,743 19.8 Note: Included in Ceded to Other Companies is $562, $1,275 and $2,825 for 2015, 2014 and 2013, respectively, relating to retrocessions associated with premiums assumed from other companies. Amount Assumed to Net percentage above considers the impact of this retrocession. |
SCHEDULE VI SUPPLEMENTAL INFORM
SCHEDULE VI SUPPLEMENTAL INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS | 12 Months Ended |
Dec. 31, 2015 | |
SCHEDULE VI SUPPLEMENTAL INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS [Abstract] | |
SCHEDULE VI SUPPLEMENTAL INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS | SCHEDULE VI--SUPPLEMENTAL INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS Form 10-K Baldwin & Lyons, Inc. and Subsidiaries (Dollars in thousands) Column A Column B Column C Column D Column E Column F Column G Column H Column I Column J Column K As of December 31 Year Ended December 31 Claims and Claim Amortiza- Adjustment Expenses tion of Incurred Related to Deferred Paid Claims AFFILIATION Deferred Policy Reserves for Unpaid Claims Discount, if any (1) (2) Policy and Claim Net WITH Policy Acquisition and Claim Adjustment Deducted in Unearned Earned Net Investment Current Prior Acquisition Adjustment Premiums REGISTRANT Costs Expenses Column C Premiums Premiums Income Year Years Costs Expenses Written Consolidated Property/Casualty Subsidiaries: (A) 2015 $1,443 $513,596 $2,110 $25,291 $263,335 $12,498 $165,812 $(10,062) $50,270 $149,580 $254,653 2014 2,263 506,102 3,129 35,019 261,627 9,055 169,950 (10,354) 48,872 152,101 262,171 2013 2,319 474,470 5,885 36,693 252,743 8,770 156,264 (5,563) 47,414 151,849 253,684 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Description of Business | Description of Business: |
Basis of Presentation | Basis of Presentation: |
Use of Estimate | Use of Estimates: |
Cash and Cash Equivalents | Cash and Cash Equivalents: |
Investments | Investments: Other investments, if any, are carried at either market value or cost, depending on the nature of the investment. Short-term investments are carried at cost, which approximates their fair values. Realized gains and losses on disposals of investments are determined by specific identification of cost of investments sold and are included in income. All fixed maturity and equity securities are considered to be available for sale; the related unrealized net gains or losses (net of applicable tax effect) are reflected directly in shareholders' equity. Included within available for sale fixed maturity securities are insurance linked securities and convertible debt securities. The changes in fair values of insurance-linked securities and portions of the changes in fair values of convertible debt securities are reflected as a component of net realized gains (losses) on investments. In accordance with the Financial Accounting Standard Board's ("FASB") other-than-temporary impairment ("OTTI") guidance, if a fixed maturity security is in an unrealized loss position and the Company has the intent to sell the fixed maturity security, or it is more likely than not that the Company will have to sell the fixed maturity security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to net realized losses on investments in the consolidated statements of operations. For impaired fixed maturity securities that the Company does not intend to sell or in cases where it is more likely than not that the Company will not have to sell such securities, but the Company expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in net realized losses on investments in the consolidated statements of operations and the non-credit component of the other-than-temporary impairment is recognized directly in shareholder's equity (accumulated other comprehensive income). The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security. The net present value is calculated by discounting the Company's best estimate of projected future cash flows at the appropriate effective interest rate. The unrealized net gains or losses (net of applicable tax effect) related to equity securities are reflected directly in shareholders' equity, unless a decline in value is determined to be other-than-temporary, in which case the loss is charged to income. In determining if and when a decline in market value below cost is other-than-temporary, an objective analysis is made of each individual security where current market value is less than cost. For any equity security where the unrealized loss exceeds 20% of original or adjusted cost, and where that decline has existed for a period of at least six months, the decline is treated as an other-than-temporary impairment. Additionally, for any equity security where the decline has existed for a period of at least one year, the decline is treated as an other-than-temporary impairment. Additionally, the Company takes into account any known subjective information in evaluating for impairment, without consideration to the Company's quantitative criteria defined above, as well as the Company's intent and ability to retain the equity security for a period of time sufficient to allow for such recovery in fair value. |
Property and Equipment | Property and Equipment: |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets: |
Reserves for Losses and Loss Expenses | Reserves for Losses and Loss Expenses: |
Recognition of Revenue and Costs | Recognition of Revenue and Costs: |
Reinsurance | Reinsurance Should impairment in the ability of a reinsurer to satisfy its obligations to the Company be determined to exist, current year operations would be charged in amounts sufficient to provide for the Company's additional liability. Such charges, when incurred, are included in other operating expenses, rather than losses and loss expenses incurred, since the inability of the Company to collect from reinsurers is a credit risk rather than a deficiency associated with the loss reserving process. The Company accounts for foreign and domestic reinsurance using the periodic method. Under the periodic method, premiums are recognized as revenue ratably over the contract term, and claims, including an estimate of claims incurred but not reported, are recognized as they occur. |
Deferred Taxes | Deferred Taxes: |
Restricted Stock | Restricted Stock: |
Earnings Per Share | Earnings Per Share: |
Comprehensive Income | Comprehensive Income: |
Fair Value Measurements | Fair Value Measurements: |
Recent Accounting Pronouncements | Recent Accounting Pronouncements: January 2016 In May 2015, the FASB issued ASU 2015-09, Disclosures about Short-Duration Contracts, and this new guidance will enhance disclosures about an entity's insurance liabilities. This guidance will provide additional information about unpaid claims and claim development, including supplemental disaggregated incurred and paid claim data. Under the guidance, enhanced disclosures on claim frequency and reserving methodologies are required. The guidance is effective for annual periods beginning after December 15, 2015 and for interim periods beginning after December 15, 2016, however early adoption is permitted. The Company has not yet adopted the guidance and the adoption of this guidance will not impact our consolidated financial position, results of operations or cash flows. In May 2015, the FASB issued ASU 2015-07 – Fair Value Measurement – (Topic 820) Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or its equivalent) (a consensus of the Emerging Issues Task Force), which will be effective for fiscal years beginning after December 15, 2015. The new pronouncement was issued to ensure that all investments categorized in the fair value hierarchy are classified using a consistent approach. The Company has not yet adopted the guidance and the adoption of this guidance is not expected to have a material impact on presentation of data in the consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to clarify the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, the Company's service and fee income could be subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to the quarter ending March 31, 2018. The Company is currently evaluating the impact this guidance will have on its results of operations, financial position or liquidity. The Company does not expect the guidance to have a material impact on its results of operations, financial position or liquidity. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Summary of available for sale securities | The following is a summary of available for sale securities at December 31: Net Cost or Gross Gross Unrealized Fair Amortized Unrealized Unrealized Gains Value Cost Gains Losses (Losses) 2015: Fixed maturities: U.S. government obligations $ 103,245 $ 103,448 $ 56 $ (259 ) $ (203 ) Residential mortgage-backed securities 4,776 4,668 162 (54 ) 108 Commercial mortgage-backed securities 30,595 30,977 247 (629 ) (382 ) State and municipal obligations 110,578 109,932 806 (160 ) 646 Corporate securities 164,025 168,137 2,445 (6,557 ) (4,112 ) Foreign government obligations 23,965 25,416 404 (1,855 ) (1,451 ) Total fixed maturities 437,184 442,578 4,120 (9,514 ) (5,394 ) Equity securities: Financial institutions 21,694 10,836 11,069 (211 ) 10,858 Industrial & miscellaneous 123,804 69,385 59,338 (4,919 ) 54,419 Total equity securities 145,498 80,221 70,407 (5,130 ) 65,277 Total $ 582,682 $ 522,799 $ 74,527 $ (14,644 ) 59,883 Applicable federal income taxes (20,959 ) Net unrealized gains - net of tax $ 38,924 2014: Fixed maturities: U.S. government obligations $ 101,094 $ 101,058 $ 108 $ (72 ) $ 36 Residential mortgage-backed securities 6,066 5,830 273 (37 ) 236 Commercial mortgage-backed securities 36,440 36,210 630 (400 ) 230 State and municipal obligations 113,777 113,133 784 (140 ) 644 Corporate securities 166,966 170,822 2,005 (5,861 ) (3,856 ) Foreign government obligations 27,466 28,332 114 (980 ) (866 ) Total fixed maturities 451,809 455,385 3,914 (7,490 ) (3,576 ) Equity securities: Financial institutions 25,343 10,100 15,303 (60 ) 15,243 Industrial & miscellaneous 136,764 68,678 70,260 (2,174 ) 68,086 Total equity securities 162,107 78,778 85,563 (2,234 ) 83,329 Total $ 613,916 $ 534,163 $ 89,477 $ (9,724 ) 79,753 Applicable federal income taxes (27,913 ) Net unrealized gains - net of tax $ 51,840 |
Fixed maturity and equity security investments in unrealized loss position | The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at December 31, the aggregate fair value and gross unrealized loss categorized by the duration those securities have been continuously in an unrealized loss position. 2015 2014 Number of Securities Fair Value Gross Unrealized Loss Number of Securities Fair Value Gross Unrealized Loss Fixed maturity securities: 12 months or less 328 $ 205,475 $ (5,070 ) 591 $ 176,756 $ (6,083 ) Greater than 12 months 168 108,043 (4,444 ) 140 27,667 (1,407 ) Total fixed maturities 496 313,518 (9,514 ) 731 204,423 (7,490 ) Equity securities: 12 months or less 73 26,517 (5,130 ) 33 13,538 (2,170 ) Greater than 12 months - - - 3 686 (64 ) Total equity securities 73 26,517 (5,130 ) 36 14,224 (2,234 ) Total 569 $ 340,035 $ (14,644 ) 767 $ 218,647 $ (9,724 ) |
Fair value and cost or amortized cost of fixed maturity investments by contractual maturity | The fair value and the cost or amortized cost of fixed maturity investments at December 31, 2015, by contractual maturity, is shown below. Actual maturities may differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties. Pre-refunded municipal bonds are classified based on their pre-refunded call dates. Fair Value Cost or Amortized Cost One year or less $ 74,187 17.0 % $ 75,854 17.1 % Excess of one year to five years 242,713 55.5 244,033 55.1 Excess of five years to ten years 36,452 8.3 37,269 8.4 Excess of ten years 3,218 0.8 2,901 0.7 Total maturities 356,570 81.6 360,057 81.3 Asset-backed securities 80,614 18.4 82,521 18.7 $ 437,184 100.0 % $ 442,578 100.0 % |
Major categories of investment income | Major categories of investment income for the years ended December 31 are summarized as follows: 2015 2014 2013 Interest on fixed maturities $ 11,663 $ 8,806 $ 9,023 Dividends on equity securities 3,445 2,693 2,166 Money market funds, Short-term and other 32 37 49 15,140 11,536 11,238 Investment expenses (2,642 ) (2,481 ) (2,468 ) Net investment income $ 12,498 $ 9,055 $ 8,770 |
Realized gains (losses) on investments | Gains and losses on investments, including equity method earnings from limited partnerships, for the years ended December 31 are summarized below: 2015 2014 2013 Fixed maturities: Gross gains $ 6,633 $ 6,480 $ 7,235 Gross losses (13,634 ) (4,596 ) (4,371 ) Net gains (losses) (7,001 ) 1,884 2,864 Equity securities: Gross gains 21,070 7,467 15,374 Gross losses (13,643 ) (1,529 ) (2,718 ) Net gains 7,427 5,938 12,656 Limited partnerships - net gain (loss) (1,687 ) 7,108 7,995 Total net gains (losses) $ (1,261 ) $ 14,930 $ 23,515 |
Adjustments for other-than-temporary impairments | Gain and loss activity for fixed maturity and equity security investments, as shown in the previous table, include adjustments for other-than-temporary impairment for the years ended December 31 summarized as follows: 2015 2014 2013 Cumulative charges to income at beginning of year $ 7,168 $ 6,770 $ 7,773 Writedowns based on objective and subjective criteria 7,700 689 742 Recovery of prior writedowns upon sale or disposal (4,355 ) (291 ) (1,745 ) Net pre-tax realized gain (loss) (3,345 ) (398 ) 1,003 Cumulative charges to income at end of year $ 10,513 $ 7,168 $ 6,770 Addition (reduction) to earnings per share from net after-tax OTTI gain (loss) $ (.14 ) $ (.02 ) $ .04 Unrealized gain on investments previously written down at end of the year - see note below $ 14,710 $ 17,127 $ 13,129 |
Financial information of significant limited partnership investment | The summarized financial information of the significant limited partnership investment as of and for the years ended December 31 is as follows: 2015 2014 2013 Total assets $ 511,118 $ 565,500 $ 493,028 Total partners' capital 470,783 542,700 444,337 Net increase (decrease) in partners' capital resulting from operations (19,603 ) 125,700 (64,550 ) |
Loss and Loss Expense Reserves
Loss and Loss Expense Reserves (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Loss and Loss Expense Reserves [Abstract] | |
Summary of activity in reserves for losses and loss expenses | The major components of the developments shown above are as follows for the years ended December 31: 2015 2014 2013 Property and casualty insurance $ (10,289 ) $ (5,423 ) $ (1,725 ) Reinsurance 227 (4,931 ) (3,838 ) Totals $ (10,062 ) $ (10,354 ) $ (5,563 ) |
Major components of developments of claims' (savings) deficiency | The major components of the developments shown above are as follows for the years ended December 31: 2015 2014 2013 Property and casualty insurance $ (10,289 ) $ (5,423 ) $ (1,725 ) Reinsurance 227 (4,931 ) (3,838 ) Totals $ (10,062 ) $ (10,354 ) $ (5,563 ) |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Reinsurance [Abstract] | |
Impact of reinsurance ceded and assumed on the company's net premium written and earned | The following table summarizes the impact of reinsurance ceded and assumed on the Company's net premiums written and earned for the most recent three years: Premiums Written Premiums Earned 2015 2014 2013 2015 2014 2013 Direct $ 366,668 $ 343,200 $ 314,784 $ 370,499 $ 342,656 $ 313,842 Ceded on direct (128,338 ) (118,942 ) (112,967 ) (128,135 ) (117,973 ) (111,057 ) Net direct 238,330 224,258 201,817 242,364 224,683 202,785 Assumed 16,885 39,188 54,692 21,533 38,219 52,783 Ceded on assumed (562 ) (1,275 ) (2,825 ) (562 ) (1,275 ) (2,825 ) Net assumed 16,323 37,913 51,867 20,971 36,944 49,958 Net $ 254,653 $ 262,171 $ 253,684 $ 263,335 $ 261,627 $ 252,743 |
Components of reinsurance recoverable | Components of reinsurance recoverable at December 31 are as follows: 2015 2014 Case unpaid losses, net of valuation allowance $ 120,320 $ 143,403 Incurred but not reported unpaid losses and loss expenses 90,578 66,325 Paid losses and loss expenses 2,452 6,910 Unearned premiums 2,538 3,583 $ 215,888 $ 220,221 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
Significant components of deferred tax assets and liabilities | Significant components of the Company's deferred tax assets and liabilities as of December 31 are as follows: 2015 2014 Deferred tax liabilities: Unrealized gain on fixed income and equity security investments $ 20,959 $ 27,914 Deferred acquisition costs 877 1,341 Loss and loss expense reserves 2,305 2,373 Limited partnership investments 1,771 4,636 Accelerated depreciation 897 601 Other 1,024 628 Total deferred tax liabilities 27,833 37,493 Deferred tax assets: Loss and loss expense reserves 9,349 10,973 Unearned premiums discount 1,593 2,201 Other-than-temporary investment declines 3,437 2,049 Deferred compensation 1,699 1,565 Deferred ceding commission 371 549 Other 186 183 Total deferred tax assets 16,635 17,520 Net deferred tax liabilities $ (11,198 ) $ (19,973 ) |
Summary of the difference between federal income taxes expense computed at the statutory rate | A summary of the difference between federal income tax expense computed at the statutory rate and that reported in the consolidated financial statements is as follows: 2015 2014 2013 Statutory federal income rate applied to pretax income $ 11,883 $ 15,539 $ 19,218 Tax effect of (deduction): Tax-exempt investment income (919 ) (924 ) (811 ) Other (295 ) 66 (85 ) Federal income tax expense $ 10,669 $ 14,681 $ 18,322 |
Federal income tax expense | Federal income tax expense consists of the following: 2015 2014 2013 Taxes (benefit) on pre-tax income: Current $ 12,488 $ 13,041 $ 17,383 Deferred (1,819 ) 1,640 939 $ 10,669 $ 14,681 $ 18,322 |
Components of provisions for deferred federal income taxes (credits) | The components of the provision for deferred federal income taxes are as follows: 2015 2014 2013 Limited partnerships $ (2,865 ) $ 2,025 $ 1,058 Discounts of loss and loss expense reserves 1,526 113 313 Unearned premium discount 608 (38 ) (65 ) Deferred compensation (127 ) (685 ) (146 ) Other-than-temporary investment declines (1,416 ) (19 ) 680 Deferred acquisitions costs and ceding commission (287 ) (20 ) (271 ) Other 742 264 (630 ) Provision for deferred federal income tax $ (1,819 ) $ 1,640 $ 939 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Shareholders' Equity [Abstract] | |
Changes in common stock outstanding and additional paid-in capital | Changes in common stock outstanding and additional paid-in capital are as follows: Additional Class A Class B Paid-in Shares Amount Shares Amount Capital Balance at January 1, 2013 2,623,109 $ 112 12,290,035 $ 524 $ 50,275 Restricted stock grants - - 14,156 1 319 Balance at December 31, 2013 2,623,109 112 12,304,191 525 50,594 Restricted stock grants - - 52,198 2 1,260 Balance at December 31, 2014 2,623,109 112 12,356,389 527 51,854 Restricted stock grants - - 46,552 2 1,092 Balance at December 31, 2015 2,623,109 $ 112 12,402,941 $ 529 $ 52,946 |
Other Operating Expenses (Table
Other Operating Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Operating Expenses [Abstract] | |
Details of other operating expenses | Details of other operating expenses for the years ended December 31: 2015 2014 2013 Amortization of gross deferred policy acquisition costs $ 50,270 $ 48,872 $ 47,414 Other underwriting expenses 42,638 37,830 35,281 Expense allowances from reinsurers (28,956 ) (23,797 ) (20,822 ) Total underwriting expenses 63,952 62,905 61,873 Operating expenses of non-insurance companies 26,621 25,143 23,488 Total other operating expenses $ 90,573 $ 88,048 $ 85,361 |
Stock Purchase and Option Pla39
Stock Purchase and Option Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stock Purchase and Option Plans [Abstract] | |
Summary of stock issuances | The table below provides detail of the stock issuances for 2015, 2014 and 2013: Effective Number of Shares Vesting Value Date Issued Date Period Per Share 5/7/2013 18,106 5/7/2014 7/1/2013 - 6/30/2014 $ 24.30 5/8/2014 17,237 5/8/2015 7/1/2014 - 6/30/2015 $ 25.53 5/12/2015 21,252 5/12/2016 7/1/2015 - 6/30/2016 $ 22.59 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Reportable Segments [Abstract] | |
Schedule of segment reporting information, by segment | The following table provides certain profit and loss information for each reportable segment for the years ended December 31: 2015 2014 2013 Direct and assumed premium written: Property and casualty insurance $ 366,668 $ 343,200 $ 314,784 Reinsurance 16,885 39,188 54,692 Totals $ 383,553 $ 382,388 $ 369,476 Net premium earned: Property and casualty insurance $ 242,364 $ 224,683 $ 202,785 Reinsurance 20,971 36,944 49,958 Totals $ 263,335 $ 261,627 $ 252,743 Underwriting gain: Property and casualty insurance $ 40,431 $ 32,663 $ 25,558 Reinsurance (1,504 ) 2,147 12,278 Totals $ 38,927 $ 34,810 $ 37,836 |
Reconciliation of operating profit (loss) from segments to consolidated | The following table reconciles reportable segment profits to the Company's consolidated income before federal income taxes: 2015 2014 2013 Profit: Underwriting gain $ 38,927 $ 34,810 $ 37,836 Net investment income 12,498 9,055 8,770 Net realized gains (losses) on investments (1,261 ) 14,930 23,515 Corporate expenses (16,212 ) (14,397 ) (15,211 ) Income before federal income taxes $ 33,952 $ 44,398 $ 54,910 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Reconciliation of the denominators used in the calculation of basic and diluted earnings per share | The following is a reconciliation of the denominators used in the calculation of basic and diluted earnings per share for the years ended December 31: 2015 2014 2013 Average share outstanding for basic earnings per share 15,010,454 14,963,959 14,906,416 Dilutive effect of share equivalents 11,308 11,935 17,345 Average shares outstanding for diluted earnings per share 15,021,762 14,975,894 14,923,761 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value [Abstract] | |
Fair value measurements by level for assets measured at fair value on a recurring basis | The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis: As of December 31, 2015: Description Total Level 1 Level 2 Level 3 Fixed maturities: U.S. government obligations $ 103,245 $ - $ 103,245 $ - Residential mortgage-backed securities 4,776 - 4,776 - Commercial mortgage-backed securities 30,595 - 29,226 1,369 State and municipal obligations 110,578 - 110,578 - Corporate securities 161,630 - 146,488 15,142 Options embedded in convertible securities 2,395 - 2,395 - Foreign government obligations 23,965 - 23,683 282 Total fixed maturities 437,184 - 420,391 16,793 Equity securities: Financial institutions 21,694 21,694 - - Industrial & miscellaneous 123,804 123,804 - - Total equity securities 145,498 145,498 - - Short term 2,220 2,220 - - Cash equivalents 69,517 - 69,517 - Total $ 654,419 $ 147,718 $ 489,908 $ 16,793 As of December 31, 2014: Description Total Level 1 Level 2 Level 3 Fixed maturities: U.S. government obligations $ 101,094 $ - $ 101,094 $ - Residential mortgage-backed securities 6,066 - 6,066 - Commercial mortgage-backed securities 36,440 - 36,440 - State and municipal obligations 113,777 - 113,777 - Corporate securities 164,068 - 151,860 12,208 Options embedded in convertible securities 2,898 - 2,898 - Foreign government obligations 27,466 - 27,466 - Total fixed maturities 451,809 - 439,601 12,208 Equity securities: Financial institutions 25,343 25,343 - - Industrial & miscellaneous 136,764 136,764 - - Total equity securities 162,107 162,107 - - Short term 2,966 2,966 - - Cash equivalents 59,309 - 59,309 - Total $ 676,191 $ 165,073 $ 498,910 $ 12,208 |
Reconciliation of beginning and ending balances of assets measured at fair value on a recurring basis using level 3 inputs | A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs is as follows for the years ended December 31: 2015 2014 Beginning of period balance $ 12,208 $ - Total gains or losses (realized) included in income (104 ) - Purchases 2,284 - Settlements (8,068 ) - Transfers into Level 3 11,586 12,208 Transfers out of Level 3 (1,113 ) - End of period balance $ 16,793 $ 12,208 |
Summary of the carrying value and fair value by level of financial instruments | A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company's consolidated balance sheet at December 31, 2015 and 2014 is as follows: 2015: Carrying Fair Value Value Level 1 Level 2 Level 3 Total Assets: Limited partnerships $ 75,458 $ - $ - $ 75,458 $ 75,458 Liabilities: Short-term borrowings 20,000 - 20,000 - 20,000 2014: Assets: Limited partnerships $ 81,230 $ - $ - $ 81,230 $ 81,230 Liabilities: Short-term borrowings 20,000 - 20,000 - 20,000 |
Quarterly Results of Operatio43
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Results of Operations (Unaudited) [Abstract] | |
Quarterly results of operations | Quarterly results of operations are as follows: Results by Quarter 2015 2014 1st 2nd 3rd 4th 1st 2nd 3rd 4th Net premiums earned $ 66,446 $ 65,449 $ 65,445 $ 65,995 $ 63,842 $ 62,905 $ 65,947 $ 68,933 Net investment income 2,815 2,898 3,014 3,771 2,294 2,090 2,073 2,599 Net gains (losses) on investments 3,743 (1,166 ) (2,086 ) (1,753 ) 4,070 8,089 658 2,113 Losses and loss expenses incurred 41,646 37,031 35,212 41,860 39,289 40,282 38,693 41,332 Net income 6,243 5,718 7,780 3,541 6,361 9,340 5,770 8,246 Net income per share - diluted $ .42 $ .38 $ .52 $ .24 $ .42 $ .62 $ .39 $ .55 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Future lease payments for operating leases with initial or remaining noncancelable terms of one year or more | At December 31, 2015, future lease payments for operating leases with initial or remaining noncancelable terms of one year or more consisted of the following: 2016 $ 148 2017 116 2018 & thereafter - Total minimum payments required $ 264 |
Accumulated Other Comprehensi45
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income [Abstract] | |
Reconciliation of components of accumulated other comprehensive income | A reconciliation of the components of accumulated other comprehensive income at December 31 is as follows: 2015 2014 Investments: Total unrealized gain before federal income taxes $ 59,883 $ 79,753 Deferred tax liability (20,959 ) (27,913 ) Net unrealized gains on investments 38,924 51,840 Foreign exchange adjustment: Total unrealized gains (losses) (1,640 ) 600 Deferred tax benefit (liability) 574 (210 ) Net unrealized gains (losses) on foreign exchange adjustment (1,066 ) 390 Accumulated other comprehensive income $ 37,858 $ 52,230 |
Changes in net unrealized gains on investments | Details of changes in net unrealized gains on investments for the years ended December 31 are as follows: 2015 2014 2013 Investments: Pre-tax holding gains (losses) on debt and equity securities arising during period $ (19,445 ) $ 12,055 $ 36,477 Less: applicable federal income taxes (6,806 ) 4,220 12,766 (12,639 ) 7,835 23,711 Pre-tax gains on debt and equity securities included in net income during period 426 7,823 15,520 Less: applicable federal income taxes 149 2,739 5,431 277 5,084 10,089 Change in unrealized gains on investments $ (12,916 ) $ 2,751 $ 13,622 |
Reconciliation of accumulated other comprehensive income and retained earnings | Reconciliation of accumulated other comprehensive income and retained earnings for the years ended December 31 are as follows: 2015 2014 2013 Beginning accumulated other comprehensive income $ 52,230 $ 50,490 $ 37,443 Change in foreign exchange adjustment (1,456 ) (1,011 ) (575 ) Change in unrealized net gains on investments (12,916 ) 2,751 13,622 Ending accumulated other comprehensive income $ 37,858 $ 52,230 $ 50,490 2015 2014 2013 Beginning retained earnings $ 294,773 $ 280,003 $ 258,358 Net income 23,283 29,717 36,588 Dividends (15,003 ) (14,947 ) (14,943 ) Ending retained earnings $ 303,053 $ 294,773 $ 280,003 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Percentage of decline on cost of securities treated as other-than-temporary impairment | 20.00% |
Period of decline on the cost of equity securities that will be considered other-than-temporary impairment | 6 months |
Investments (Details)
Investments (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)DirectorSecurityAgreementPartnershipInvestment$ / shares | Dec. 31, 2014USD ($)Security$ / shares | Dec. 31, 2013USD ($)$ / shares | |
Major Categories of Investment Income [Line Items] | |||
Investment Income | $ 15,140 | $ 11,536 | $ 11,238 |
Investment expenses | (2,642) | (2,481) | (2,468) |
Net investment income | 12,498 | 9,055 | 8,770 |
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | |||
Applicable federal income taxes | (20,959) | (27,913) | |
Net unrealized gains - net of tax | $ 38,924 | $ 51,840 | |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | |||
Number of Securities, Total | Security | 569 | 767 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||
Fair value, total | $ 340,035 | $ 218,647 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses [Abstract] | |||
Gross unrealized loss, total | (14,644) | (9,724) | |
Gain and Loss on Investment [Abstract] | |||
Limited partnerships - net gain (loss) | (1,687) | 7,108 | 7,995 |
Total net gains (losses) | (1,261) | 14,930 | 23,515 |
Shareholders' equity, net of deferred federal income taxes and undistributed earnings from limited partnership | 26,512 | ||
Adjustments for other-than-temporary impairment [Roll Forward] | |||
Cumulative charges to income at beginning of year | 7,168 | 6,770 | 7,773 |
Writedowns based on objective and subjective criteria | 7,700 | 689 | 742 |
Recovery of prior writedowns upon sale or disposal | (4,355) | (291) | (1,745) |
Net pre-tax realized gain (loss) | (3,345) | (398) | 1,003 |
Cumulative charges to income at end of year | $ 10,513 | $ 7,168 | $ 6,770 |
Addition (reduction) to earnings per share from net after-tax OTI gain (loss) (in dollars per share) | $ / shares | $ (0.14) | $ (0.02) | $ 0.04 |
Unrealized gain on investments previously written down at end of the year - see note below | $ 14,710 | $ 17,127 | $ 13,129 |
Committed funds for bridge loans | $ 5,000 | ||
Number of bridge loan agreements | Agreement | 1 | ||
Limited Partners' Capital Account [Line Items] | |||
Number of partnerships investment | Partnership | 2 | ||
Aggregate estimated value of limited partnership | $ 45,009 | 46,987 | |
Market value of equity and fixed maturity securities portfolio managed by broker dealers | 62,156 | ||
Total commissions and net fees earned by broker dealers and affiliates | 235 | 212 | 239 |
Summarized financial information of significant limited partnership investments [Abstract] | |||
Total assets | 1,085,771 | 1,144,247 | |
Total partners' capital | 45,009 | 46,987 | |
Regulatory deposits with various insurance departments in United States and Canada, fair value | 84,198 | 76,406 | |
Time certificate of deposit included in short-term investments | $ 2,220 | ||
Percentage of fixed maturities invested in investment grade fixed maturity | 85.00% | ||
Total fixed maturity investments | $ 2,969 | ||
Number of different investments in fixed maturity | Investment | 3 | ||
Number of different third party insurance companies issuing fixed maturity investments with guarantees | Investment | 3 | ||
Amount of largest exposure to a single investment | $ 1,997 | ||
Fixed maturity investment below investment grade | $ 61,271 | ||
Percentage of fixed maturity investment to total invested assets | 8.40% | ||
Number of investments in diversified portfolio including catastrophe bonds | Investment | 40 | ||
Net unrealized loss position of diversified portfolio | $ 3,185 | ||
Directors [Member] | |||
Limited Partners' Capital Account [Line Items] | |||
Number of company employees employed by investment firm | Director | 2 | ||
U.S. Government Obligations [Member] | |||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | |||
Fair value | $ 103,245 | 101,094 | |
Cost or amortized cost | 103,448 | 101,058 | |
Gross unrealized gains | 56 | 108 | |
Gross unrealized losses | (259) | (72) | |
Net unrealized gains (losses) | (203) | 36 | |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | |||
Available-for-sale Securities, Debt Securities, Total | 103,245 | 101,094 | |
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis [Abstract] | |||
Cost or amortized cost | 103,448 | 101,058 | |
Residential Mortgage-Backed Securities [Member] | |||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | |||
Fair value | 4,776 | 6,066 | |
Cost or amortized cost | 4,668 | 5,830 | |
Gross unrealized gains | 162 | 273 | |
Gross unrealized losses | (54) | (37) | |
Net unrealized gains (losses) | 108 | 236 | |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | |||
Available-for-sale Securities, Debt Securities, Total | 4,776 | 6,066 | |
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis [Abstract] | |||
Cost or amortized cost | 4,668 | 5,830 | |
Commercial Mortgage-backed Securities [Member] | |||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | |||
Fair value | 30,595 | 36,440 | |
Cost or amortized cost | 30,977 | 36,210 | |
Gross unrealized gains | 247 | 630 | |
Gross unrealized losses | (629) | (400) | |
Net unrealized gains (losses) | (382) | 230 | |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | |||
Available-for-sale Securities, Debt Securities, Total | 30,595 | 36,440 | |
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis [Abstract] | |||
Cost or amortized cost | 30,977 | 36,210 | |
State and Municipal Obligations [Member] | |||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | |||
Fair value | 110,578 | 113,777 | |
Cost or amortized cost | 109,932 | 113,133 | |
Gross unrealized gains | 806 | 784 | |
Gross unrealized losses | (160) | (140) | |
Net unrealized gains (losses) | 646 | 644 | |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | |||
Available-for-sale Securities, Debt Securities, Total | 110,578 | 113,777 | |
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis [Abstract] | |||
Cost or amortized cost | 109,932 | 113,133 | |
Corporate Securities [Member] | |||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | |||
Fair value | 164,025 | 166,966 | |
Cost or amortized cost | 168,137 | 170,822 | |
Gross unrealized gains | 2,445 | 2,005 | |
Gross unrealized losses | (6,557) | (5,861) | |
Net unrealized gains (losses) | (4,112) | (3,856) | |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | |||
Available-for-sale Securities, Debt Securities, Total | 164,025 | 166,966 | |
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis [Abstract] | |||
Cost or amortized cost | 168,137 | 170,822 | |
Foreign Government Obligations [Member] | |||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | |||
Fair value | 23,965 | 27,466 | |
Cost or amortized cost | 25,416 | 28,332 | |
Gross unrealized gains | 404 | 114 | |
Gross unrealized losses | (1,855) | (980) | |
Net unrealized gains (losses) | (1,451) | (866) | |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | |||
Available-for-sale Securities, Debt Securities, Total | 23,965 | 27,466 | |
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis [Abstract] | |||
Cost or amortized cost | 25,416 | 28,332 | |
Total Fixed Maturities [Member] | |||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | |||
Fair value | 437,184 | 451,809 | |
Cost or amortized cost | 442,578 | 455,385 | |
Gross unrealized gains | 4,120 | 3,914 | |
Gross unrealized losses | (9,514) | (7,490) | |
Net unrealized gains (losses) | $ (5,394) | $ (3,576) | |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | |||
Number of Securities 12 months or less | Security | 328 | 591 | |
Number of Securities Greater than 12 months | Security | 168 | 140 | |
Number of Securities, Total | Security | 496 | 731 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||
Fair value, 12 months or less | $ 205,475 | $ 176,756 | |
Fair value, Greater than 12 months | 108,043 | 27,667 | |
Fair value, total | 313,518 | 204,423 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses [Abstract] | |||
Gross unrealized loss, less than 12 months | (5,070) | (6,083) | |
Gross unrealized loss, 12 months or longer | (4,444) | (1,407) | |
Gross unrealized loss, total | $ (9,514) | (7,490) | |
Average unrealized loss for securities in loss position | 3.00% | ||
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | |||
One year or less | $ 74,187 | ||
Excess of one year to five years | 242,713 | ||
Excess of five years to ten years | 36,452 | ||
Excess of ten years | 3,218 | ||
Total maturities | 356,570 | ||
Asset-backed securities | 80,614 | ||
Available-for-sale Securities, Debt Securities, Total | $ 437,184 | 451,809 | |
Percentage of Available for sale Securities, Debt Maturities, Fair Value [Abstract] | |||
One year or less | 17.00% | ||
Excess of one year to five years | 55.50% | ||
Excess of five years to ten years | 8.30% | ||
Excess of ten years | 0.80% | ||
Total maturities | 81.60% | ||
Asset-backed securities | 18.40% | ||
Available-for-sale Securities, Debt Securities, Total | 100.00% | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis [Abstract] | |||
One year or less | $ 75,854 | ||
Excess of one year to five years | 244,033 | ||
Excess of five years to ten years | 37,269 | ||
Excess of ten years | 2,901 | ||
Total maturities | 360,057 | ||
Asset-backed securities | 82,521 | ||
Cost or amortized cost | $ 442,578 | 455,385 | |
Percentage of Available for sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract] | |||
One year or less | 17.10% | ||
Excess of one year to five years | 55.10% | ||
Excess of five years to ten years | 8.40% | ||
Excess of ten years | 0.70% | ||
Total maturities | 81.30% | ||
Asset-backed securities | 18.70% | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Total | 100.00% | ||
Gain and Loss on Investment [Abstract] | |||
Gross gains | $ 6,633 | 6,480 | 7,235 |
Gross losses | (13,634) | (4,596) | (4,371) |
Net gains (losses) | (7,001) | 1,884 | 2,864 |
Financial Institutions [Member] | |||
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract] | |||
Fair value | 21,694 | 25,343 | |
Cost or amortized cost | 10,836 | 10,100 | |
Gross unrealized gains | 11,069 | 15,303 | |
Gross unrealized losses | (211) | (60) | |
Net unrealized gains (losses) | 10,858 | 15,243 | |
Industrial & Miscellaneous [Member] | |||
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract] | |||
Fair value | 123,804 | 136,764 | |
Cost or amortized cost | 69,385 | 68,678 | |
Gross unrealized gains | 59,338 | 70,260 | |
Gross unrealized losses | (4,919) | (2,174) | |
Net unrealized gains (losses) | 54,419 | 68,086 | |
Total Equity Securities [Member] | |||
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract] | |||
Fair value | 145,498 | 162,107 | |
Cost or amortized cost | 80,221 | 78,778 | |
Gross unrealized gains | 70,407 | 85,563 | |
Gross unrealized losses | (5,130) | (2,234) | |
Net unrealized gains (losses) | $ 65,277 | $ 83,329 | |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | |||
Number of Securities 12 months or less | Security | 73 | 33 | |
Number of Securities Greater than 12 months | Security | 0 | 3 | |
Number of Securities, Total | Security | 73 | 36 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||
Fair value, 12 months or less | $ 26,517 | $ 13,538 | |
Fair value, Greater than 12 months | 0 | 686 | |
Fair value, total | 26,517 | 14,224 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses [Abstract] | |||
Gross unrealized loss, less than 12 months | (5,130) | (2,170) | |
Gross unrealized loss, 12 months or longer | 0 | (64) | |
Gross unrealized loss, total | (5,130) | (2,234) | |
Gain and Loss on Investment [Abstract] | |||
Gross gains | 21,070 | 7,467 | 15,374 |
Gross losses | (13,643) | (1,529) | (2,718) |
Net gains (losses) | 7,427 | 5,938 | 12,656 |
Total Available-for-Sale Securities [Member] | |||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | |||
Fair value | 582,682 | 613,916 | |
Cost or amortized cost | 522,799 | 534,163 | |
Gross unrealized gains | 74,527 | 89,477 | |
Gross unrealized losses | (14,644) | (9,724) | |
Net unrealized gains (losses) | 59,883 | 79,753 | |
Limited Partnership [Member] | |||
Limited Partners' Capital Account [Line Items] | |||
Commitment to make additional contributions to various limited partnerships | 2,459 | ||
Total investment in three limited partnerships | $ 23,000 | ||
Number of partnerships investment | Partnership | 2 | ||
Aggregate estimated value of limited partnership | $ 45,009 | ||
Number of directors that are executive officers, directors, and owners of the organization managing the limited partnership | Director | 4 | ||
Investment gains (losses), net of fees | $ (1,978) | 7,088 | 1,154 |
Management fees | 749 | 697 | 640 |
Performance-based fees | 0 | 0 | 18 |
Summarized financial information of significant limited partnership investments [Abstract] | |||
Total partners' capital | $ 45,009 | ||
Limited Partnership [Member] | Minimum [Member] | |||
Limited Partners' Capital Account [Line Items] | |||
Ownership interest in limited partnership | 5.00% | ||
Limited Partnership [Member] | Maximum [Member] | |||
Limited Partners' Capital Account [Line Items] | |||
Ownership interest in limited partnership | 17.00% | ||
Significant Limited Partnership [Member] | |||
Limited Partners' Capital Account [Line Items] | |||
Aggregate estimated value of limited partnership | $ 470,783 | 542,700 | 444,337 |
Number of significant investments in public and private equity market in India | Investment | 1 | ||
Significant investment in public and private equity markets in India, value | $ 28,270 | 29,868 | |
Estimated ownership interest in significant limited partnership investment | 5.00% | ||
Earnings from significant limited partnership investment | $ (1,599) | 7,176 | (3,176) |
Summarized financial information of significant limited partnership investments [Abstract] | |||
Total assets | 511,118 | 565,500 | 493,028 |
Total partners' capital | 470,783 | 542,700 | 444,337 |
Net increase (decrease) in partners' capital resulting from operations | (19,603) | 125,700 | (64,550) |
Total Fixed Maturities [Member] | |||
Major Categories of Investment Income [Line Items] | |||
Investment Income | 11,663 | 8,806 | 9,023 |
Total Equity Securities [Member] | |||
Major Categories of Investment Income [Line Items] | |||
Investment Income | 3,445 | 2,693 | 2,166 |
Money Market Funds, Short term and Other [Member] | |||
Major Categories of Investment Income [Line Items] | |||
Investment Income | $ 32 | $ 37 | $ 49 |
Loss and Loss Expense Reserve48
Loss and Loss Expense Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Activity in the reserve for losses and loss expenses [Roll Forward] | |||
Reserves at the beginning of the year | $ 295,583 | $ 288,088 | $ 289,236 |
Provision for losses and loss expenses [Abstract] | |||
Claims occurring during the current year | 165,812 | 169,950 | 156,264 |
Claims occurring during prior years | (10,062) | (10,354) | (5,563) |
Total incurred | 155,750 | 159,596 | 150,701 |
Loss and loss expense payments [Abstract] | |||
Claims occurring during the current year | 56,710 | 59,826 | 47,908 |
Claims occurring during prior years | 92,870 | 92,275 | 103,941 |
Total paid | 149,580 | 152,101 | 151,849 |
Reserves at the end of the year | 301,753 | 295,583 | 288,088 |
Reinsurance recoverable on unpaid losses at the end of the year | 211,843 | 210,519 | 186,382 |
Reserves, gross of reinsurance recoverable, at the end of the year | 513,596 | 506,102 | 474,470 |
Savings developed in settlements of claims with comparative developments for previous calendar years | $ 10,062 | ||
Period of comparative developments | 2 years | ||
Major Components of the Development of (Savings) deficiency [Abstract] | |||
Property and casualty insurance | $ (10,289) | (5,423) | (1,725) |
Reinsurance | 227 | (4,931) | (3,838) |
Total | $ (10,062) | (10,354) | $ (5,563) |
Workers' Compensation Discount [Abstract] | |||
Loss reserves on certain permanent total disability workers' compensation reserves discounted to present value at pre-tax rates | 3.50% | ||
Amount of reduction in loss reserves | $ 2,110 | $ 3,129 |
Reinsurance (Details)
Reinsurance (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Premiums Written [Abstract] | |||||||||||
Direct | $ 366,668 | $ 343,200 | $ 314,784 | ||||||||
Ceded on direct | (128,338) | (118,942) | (112,967) | ||||||||
Net direct | 238,330 | 224,258 | 201,817 | ||||||||
Assumed | 16,885 | 39,188 | 54,692 | ||||||||
Ceded on assumed | (562) | (1,275) | (2,825) | ||||||||
Net assumed | 16,323 | 37,913 | 51,867 | ||||||||
Net | 254,653 | 262,171 | 253,684 | ||||||||
Premium Earned [Abstract] | |||||||||||
Direct | 370,499 | 342,656 | 313,842 | ||||||||
Ceded on direct | (128,135) | (117,973) | (111,057) | ||||||||
Net direct | 242,364 | 224,683 | 202,785 | ||||||||
Assumed | 21,533 | 38,219 | 52,783 | ||||||||
Ceded on assumed | (562) | (1,275) | (2,825) | ||||||||
Net assumed | 20,971 | 36,944 | 49,958 | ||||||||
Net | $ 65,995 | $ 65,445 | $ 65,449 | $ 66,446 | $ 68,933 | $ 65,947 | $ 62,905 | $ 63,842 | 263,335 | 261,627 | 252,743 |
Net losses and loss expenses incurred reduced by ceded reinsurance recoveries | 75,581 | 105,891 | 107,321 | ||||||||
Net losses and loss expense incurred from reinsurance assumed from non-affiliates | 13,492 | 20,288 | $ 17,696 | ||||||||
Components of reinsurance recoverable [Abstract] | |||||||||||
Case unpaid losses, net of valuation allowance | 120,320 | 143,403 | 120,320 | 143,403 | |||||||
Incurred but not reported unpaid losses and loss expenses | 90,578 | 66,325 | 90,578 | 66,325 | |||||||
Paid losses and loss expenses | 2,452 | 6,910 | 2,452 | 6,910 | |||||||
Unearned premiums | 2,538 | 3,583 | 2,538 | 3,583 | |||||||
Reinsurance recoverable | $ 215,888 | $ 220,221 | $ 215,888 | $ 220,221 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred tax liabilities [Abstract] | |||
Unrealized gain on fixed income and equity security investments | $ 20,959 | $ 27,914 | |
Deferred acquisition costs | 877 | 1,341 | |
Loss and loss expense reserves | 2,305 | 2,373 | |
Limited partnership investments | 1,771 | 4,636 | |
Accelerated depreciation | 897 | 601 | |
Other | 1,024 | 628 | |
Total deferred tax liabilities | 27,833 | 37,493 | |
Deferred tax assets [Abstract] | |||
Loss and loss expense reserves | 9,349 | 10,973 | |
Unearned premiums discount | 1,593 | 2,201 | |
Other-than-temporary investment declines | 3,437 | 2,049 | |
Deferred ceding commission | 371 | 549 | |
Deferred compensation | 1,699 | 1,565 | |
Other | 186 | 183 | |
Total deferred tax assets | 16,635 | 17,520 | |
Net deferred tax liabilities | (11,198) | (19,973) | |
Summary of the difference between federal income tax expense computed at statutory rate [Abstract] | |||
Statutory federal income rate applied to pretax income | 11,883 | 15,539 | $ 19,218 |
Tax effect of (deduction) [Abstract] | |||
Tax-exempt investment income | (919) | (924) | (811) |
Other | (295) | 66 | (85) |
Federal income tax expense | 10,669 | 14,681 | 18,322 |
Taxes on pre-tax income [Abstract] | |||
Current | 12,488 | 13,041 | 17,383 |
Deferred | (1,819) | 1,640 | 939 |
Federal income tax expense | 10,669 | 14,681 | 18,322 |
Components of the provisions for deferred federal income taxes (credits) [Abstract] | |||
Limited partnerships | (2,865) | 2,025 | 1,058 |
Discounts of loss and loss expense reserves | 1,526 | 113 | 313 |
Unearned premium discount | 608 | (38) | (65) |
Deferred compensation | (127) | (685) | (146) |
Other-than-temporary investment declines | (1,416) | (19) | 680 |
Deferred acquisitions costs and ceding commission | (287) | (20) | (271) |
Other | 742 | 264 | (630) |
Provision for deferred federal income tax | (1,819) | 1,640 | 939 |
Cash flows related to federal income taxes paid, net of refunds received | $ 14,500 | $ 11,619 | $ 17,250 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Amount [Abstract] | |||
Dividends paid to shareholders | $ 15,003 | $ 14,947 | $ 14,943 |
Cash dividends paid (in dollars per share) | $ 1 | $ 1 | $ 1 |
Additional Paid-in Capital [Member] | |||
Amount [Abstract] | |||
Balance, Beginning period | $ 51,854 | $ 50,594 | $ 50,275 |
Restricted stock grant | 1,092 | 1,260 | 319 |
Balance, Period end | $ 52,946 | $ 51,854 | $ 50,594 |
Class A [Member] | |||
Shares [Abstract] | |||
Balance, Beginning period (in shares) | 2,623,109 | 2,623,109 | 2,623,109 |
Restricted stock grant (in shares) | 0 | 0 | 0 |
Balance, Period end (in shares) | 2,623,109 | 2,623,109 | 2,623,109 |
Amount [Abstract] | |||
Balance, Beginning period | $ 112 | $ 112 | $ 112 |
Restricted stock grant | 0 | 0 | 0 |
Balance, Period end | $ 112 | $ 112 | $ 112 |
Stated value of common stock (in dollars per share) | $ 0.04 | ||
Class B [Member] | |||
Shares [Abstract] | |||
Balance, Beginning period (in shares) | 12,356,389 | 12,304,191 | 12,290,035 |
Restricted stock grant (in shares) | 46,552 | 52,198 | 14,156 |
Balance, Period end (in shares) | 12,402,941 | 12,356,389 | 12,304,191 |
Amount [Abstract] | |||
Balance, Beginning period | $ 527 | $ 525 | $ 524 |
Restricted stock grant | 2 | 2 | 1 |
Balance, Period end | $ 529 | $ 527 | $ 525 |
Stated value of common stock (in dollars per share) | $ 0.04 |
Other Operating Expenses (Detai
Other Operating Expenses (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Other Operating Expenses [Abstract] | |||
Amortization of gross deferred policy acquisition costs | $ 50,270,000 | $ 48,872,000 | $ 47,414,000 |
Other underwriting expenses | 42,638,000 | 37,830,000 | 35,281,000 |
Expense allowances from reinsurers | (28,956,000) | (23,797,000) | (20,822,000) |
Total underwriting expenses | 63,952,000 | 62,905,000 | 61,873,000 |
Operating expenses of non-insurance companies | 26,621,000 | 25,143,000 | 23,488,000 |
Total other operating expenses | 90,573,000 | $ 88,048,000 | $ 85,361,000 |
Director [Member] | |||
Consulting Contract [Abstract] | |||
Annual consulting contract fee | $ 300 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - 401(k) Employee Savings and Profit Sharing Plan [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Requisite service period | 1 year | ||
Company's contribution to the plan | $ 2,090 | $ 1,798 | $ 1,798 |
Stock Purchase and Option Pla54
Stock Purchase and Option Plans (Details) $ / shares in Units, $ in Thousands | Feb. 05, 2016USD ($)$ / sharesshares | May. 12, 2015$ / sharesshares | Feb. 04, 2015USD ($)$ / sharesshares | May. 08, 2014$ / sharesshares | May. 07, 2013$ / sharesshares | Dec. 31, 2015USD ($)Planshares | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Restricted Stock Units (RSUs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of share based compensation plans | Plan | 1 | |||||||
Restricted Stock Units (RSUs) [Member] | Outside Director [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Compensation cost charged against income | $ | $ 460 | $ 440 | $ 440 | |||||
Restricted Stock Units (RSUs) [Member] | Class B [Member] | Outside Director [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total value of shares issued | $ | $ 480 | $ 440 | $ 440 | |||||
Summary of stock Issuances [Abstract] | ||||||||
Number of shares issued (in shares) | 21,252 | 17,237 | 18,106 | |||||
Vesting Date | May 12, 2016 | May 8, 2015 | May 7, 2014 | |||||
Period | 7/1/2015 - 6/30/2016 | 7/1/2014 - 6/30/2015 | 7/1/2013 - 6/30/2014 | |||||
Value of each share issued (in dollars per share) | $ / shares | $ 22.59 | $ 25.53 | $ 24.30 | |||||
Restricted Stock Units (RSUs) [Member] | Class B [Member] | Executives [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares issued (in shares) | 36,646 | |||||||
Total value of shares issued | $ | $ 853 | |||||||
Summary of stock Issuances [Abstract] | ||||||||
Value of each share issued (in dollars per share) | $ / shares | $ 23.29 | |||||||
Period restricted stocks will vest ratably from date of grant | 3 years | |||||||
Restricted Stock Units (RSUs) [Member] | Class B [Member] | Executives [Member] | Subsequent Event [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares issued (in shares) | 47,333 | |||||||
Total value of shares issued | $ | $ 1,103 | |||||||
Summary of stock Issuances [Abstract] | ||||||||
Value of each share issued (in dollars per share) | $ / shares | $ 23.30 | |||||||
Period restricted stocks will vest ratably from date of grant | 3 years | |||||||
1981 Stock Purchase Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Purchase price of shares obligated to be repurchased, percentage of book value | 90.00% | |||||||
1981 Stock Purchase Plan [Member] | Class A [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of outstanding shares eligible for repurchase (in shares) | 121,286 | |||||||
1981 Stock Purchase Plan [Member] | Class B [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of outstanding shares eligible for repurchase (in shares) | 339,546 |
Reportable Segments (Details)
Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | $ 65,995 | $ 65,445 | $ 65,449 | $ 66,446 | $ 68,933 | $ 65,947 | $ 62,905 | $ 63,842 | $ 263,335 | $ 261,627 | $ 252,743 |
Reconciliation from Segment Totals to Consolidated [Abstract] | |||||||||||
Net investment income | 12,498 | 9,055 | 8,770 | ||||||||
Income before federal income taxes | 33,952 | 44,398 | 54,910 | ||||||||
Reportable Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Direct and assumed premium written | 383,553 | 382,388 | 369,476 | ||||||||
Net premiums earned | 263,335 | 261,627 | 252,743 | ||||||||
Underwriting gain | 38,927 | 34,810 | 37,836 | ||||||||
Reconciliation from Segment Totals to Consolidated [Abstract] | |||||||||||
Underwriting gain | 38,927 | 34,810 | 37,836 | ||||||||
Reportable Segments [Member] | Property and Casualty Insurance [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Direct and assumed premium written | 366,668 | 343,200 | 314,784 | ||||||||
Net premiums earned | 242,364 | 224,683 | 202,785 | ||||||||
Underwriting gain | 40,431 | 32,663 | 25,558 | ||||||||
Reconciliation from Segment Totals to Consolidated [Abstract] | |||||||||||
Underwriting gain | 40,431 | 32,663 | 25,558 | ||||||||
Reportable Segments [Member] | Reinsurance [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Direct and assumed premium written | 16,885 | 39,188 | 54,692 | ||||||||
Net premiums earned | 20,971 | 36,944 | 49,958 | ||||||||
Underwriting gain | (1,504) | 2,147 | 12,278 | ||||||||
Reconciliation from Segment Totals to Consolidated [Abstract] | |||||||||||
Underwriting gain | (1,504) | 2,147 | 12,278 | ||||||||
Segment Reconciling Items [Member] | |||||||||||
Reconciliation from Segment Totals to Consolidated [Abstract] | |||||||||||
Net investment income | 12,498 | 9,055 | 8,770 | ||||||||
Net realized gains (losses) on investments | (1,261) | 14,930 | 23,515 | ||||||||
Corporate expenses | $ (16,212) | $ (14,397) | $ (15,211) |
Reportable Segments, Schedule o
Reportable Segments, Schedule of Revenue by Major Customers, by Reporting Segments (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)SegmentCustomer | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Reportable Segments [Abstract] | |||
Number of reportable segments | Segment | 2 | ||
Property and Casualty Insurance [Member] | FedEx Ground, Certain Subsidiaries, and Related Entities [Member] | |||
Revenue, Major Customer [Line Items] | |||
Number of major customer | Customer | 1 | ||
Direct And Assumed Premiums Written | $ 17,773 | $ 18,951 | $ 27,004 |
Property and Casualty Insurance [Member] | Non-affiliated Broker on Behalf of Independent Contractors [Member] | |||
Revenue, Major Customer [Line Items] | |||
Direct And Assumed Premiums Written | $ 209,434 | $ 197,767 | $ 171,615 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of the denominators used in the calculation of basic and diluted earnings per share [Abstract] | |||
Average share outstanding for basic earnings per share (in shares) | 15,010,454 | 14,963,959 | 14,906,416 |
Dilutive effect of share equivalents (in shares) | 11,308 | 11,935 | 17,345 |
Average shares outstanding for diluted earnings per share (in shares) | 15,021,762 | 14,975,894 | 14,923,761 |
Concentrations of Credit Risk (
Concentrations of Credit Risk (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)PartnershipDirector | |
Concentrations of Credit Risk [Abstract] | |
Guarantor obligations, aggregate amount of collateral held | $ 248,637 |
Collateral held that is equal to the ultimate losses that would be paid or due in the event of insured's default | 100.00% |
Uncollateralized exposure as a percentage of shareholder's equity | 47.00% |
Reinsurance recoverables, gross | $ 232,735 |
Largest estimated amounts due from individual reinsurers, one | 36,796 |
Second largest estimated amounts due from individual reinsurers, two | 17,817 |
Aggregate investment in limited partnerships | $ 45,009 |
Number of limited partnerships investment | Partnership | 2 |
Number of directors that are executive officers, directors, and owners | Director | 4 |
Acquisition and related Goodw59
Acquisition and related Goodwill and Intangibles (Details) - Transportation Specialty Insurance Agency [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | |||
Date of acquisition agreement | Oct. 31, 2008 | ||
Cash purchase price | $ 3,500 | ||
Recorded goodwill | 3,152 | ||
Customer Relationships and Employment Agreements [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets included in other assets | 179 | ||
Amortization of intangible assets | 0 | $ 4 | $ 17 |
Accumulated amortization on intangible assets | $ 179 | $ 179 |
Fair Value (Details)
Fair Value (Details) - Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fixed maturities: [Abstract] | ||
U.S. government obligations | $ 103,245 | $ 101,094 |
Residential mortgage-backed securities | 4,776 | 6,066 |
Commercial mortgage-backed securities | 30,595 | 36,440 |
State and municipal obligations | 110,578 | 113,777 |
Corporate securities | 161,630 | 164,068 |
Options embedded in convertible securities | 2,395 | 2,898 |
Foreign government obligations | 23,965 | 27,466 |
Total fixed maturities | 437,184 | 451,809 |
Equity securities: [Abstract] | ||
Financial institutions | 21,694 | 25,343 |
Industrial & miscellaneous | 123,804 | 136,764 |
Total equity securities | 145,498 | 162,107 |
Short term | 2,220 | 2,966 |
Cash equivalents | 69,517 | 59,309 |
Total fair value | 654,419 | 676,191 |
Level 1 [Member] | ||
Fixed maturities: [Abstract] | ||
U.S. government obligations | 0 | 0 |
Residential mortgage-backed securities | 0 | 0 |
Commercial mortgage-backed securities | 0 | 0 |
State and municipal obligations | 0 | 0 |
Corporate securities | 0 | 0 |
Options embedded in convertible securities | 0 | 0 |
Foreign government obligations | 0 | 0 |
Total fixed maturities | 0 | 0 |
Equity securities: [Abstract] | ||
Financial institutions | 21,694 | 25,343 |
Industrial & miscellaneous | 123,804 | 136,764 |
Total equity securities | 145,498 | 162,107 |
Short term | 2,220 | 2,966 |
Cash equivalents | 0 | 0 |
Total fair value | 147,718 | 165,073 |
Level 2 [Member] | ||
Fixed maturities: [Abstract] | ||
U.S. government obligations | 103,245 | 101,094 |
Residential mortgage-backed securities | 4,776 | 6,066 |
Commercial mortgage-backed securities | 29,226 | 36,440 |
State and municipal obligations | 110,578 | 113,777 |
Corporate securities | 146,488 | 151,860 |
Options embedded in convertible securities | 2,395 | 2,898 |
Foreign government obligations | 23,683 | 27,466 |
Total fixed maturities | 420,391 | 439,601 |
Equity securities: [Abstract] | ||
Financial institutions | 0 | 0 |
Industrial & miscellaneous | 0 | 0 |
Total equity securities | 0 | 0 |
Short term | 0 | 0 |
Cash equivalents | 69,517 | 59,309 |
Total fair value | 489,908 | 498,910 |
Level 3 [Member] | ||
Fixed maturities: [Abstract] | ||
U.S. government obligations | 0 | 0 |
Residential mortgage-backed securities | 0 | 0 |
Commercial mortgage-backed securities | 1,369 | 0 |
State and municipal obligations | 0 | 0 |
Corporate securities | 15,142 | 12,208 |
Options embedded in convertible securities | 0 | 0 |
Foreign government obligations | 282 | 0 |
Total fixed maturities | 16,793 | 12,208 |
Equity securities: [Abstract] | ||
Financial institutions | 0 | 0 |
Industrial & miscellaneous | 0 | 0 |
Total equity securities | 0 | 0 |
Short term | 0 | 0 |
Cash equivalents | 0 | 0 |
Total fair value | $ 16,793 | $ 12,208 |
Fair Value, Unobservable Input
Fair Value, Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair value assets measured on recurring basis unobservable input reconciliation calculation [Roll Forward] | ||
Beginning of period balance | $ 12,208 | $ 0 |
Total gains or losses (realized) included in income | (104) | 0 |
Purchases | 2,284 | 0 |
Settlements | (8,068) | 0 |
Transfers into Level 3 | 11,586 | 12,208 |
Transfers out of level 3 | (1,113) | 0 |
End of period balance | $ 16,793 | $ 12,208 |
Fair Value, Balance Sheet Group
Fair Value, Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Carrying Value [Member] | ||
Assets [Abstract] | ||
Limited partnerships | $ 75,458 | $ 81,230 |
Liabilities [Abstract] | ||
Short-term borrowings | 20,000 | 20,000 |
Fair Value [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 75,458 | 81,230 |
Liabilities [Abstract] | ||
Short-term borrowings | 20,000 | 20,000 |
Fair Value [Member] | Level 1 [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 0 | 0 |
Liabilities [Abstract] | ||
Short-term borrowings | 0 | 0 |
Fair Value [Member] | Level 2 [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 0 | 0 |
Liabilities [Abstract] | ||
Short-term borrowings | 20,000 | 20,000 |
Fair Value [Member] | Level 3 [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 75,458 | 81,230 |
Liabilities [Abstract] | ||
Short-term borrowings | $ 0 | $ 0 |
Quarterly Results of Operatio63
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Results of Operations (Unaudited) [Abstract] | |||||||||||
Net premiums earned | $ 65,995 | $ 65,445 | $ 65,449 | $ 66,446 | $ 68,933 | $ 65,947 | $ 62,905 | $ 63,842 | $ 263,335 | $ 261,627 | $ 252,743 |
Net investment income | 3,771 | 3,014 | 2,898 | 2,815 | 2,599 | 2,073 | 2,090 | 2,294 | 12,498 | 9,055 | 8,770 |
Net gains on investments | (1,753) | (2,086) | (1,166) | 3,743 | 2,113 | 658 | 8,089 | 4,070 | |||
Losses and loss expenses incurred | 41,860 | 35,212 | 37,031 | 41,646 | 41,332 | 38,693 | 40,282 | 39,289 | 155,750 | 159,596 | 150,701 |
Net income | $ 3,541 | $ 7,780 | $ 5,718 | $ 6,243 | $ 8,246 | $ 5,770 | $ 9,340 | $ 6,361 | $ 23,283 | $ 29,717 | $ 36,588 |
Net income per share - diluted (in dollars per share) | $ 0.24 | $ 0.52 | $ 0.38 | $ 0.42 | $ 0.55 | $ 0.39 | $ 0.62 | $ 0.42 |
Statutory (Details)
Statutory (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statutory [Abstract] | |||
Net income (loss) of the insurance subsidiaries in accordance with statutory accounting practices | $ 25,627 | $ 27,143 | $ 30,886 |
Consolidated statutory capital and surplus for subsidiaries | 390,823 | $ 398,762 | |
Amount of statutory surplus transferred by dividend or loan to the parent company | 62,539 | ||
Additional shareholders' equity of insurance subsidiaries that could be advanced or loaned to parent company with prior notification and approval from regulatory authorities | 239,249 | ||
Minimum statutory surplus necessary for the insurance subsidiaries to satisfy statutory risk based capital requirements | 87,688 | ||
Consolidated statutory capital and surplus exceeded requirement | $ 303,135 | ||
Excess statutory capital and surplus to risk based capital | 346.00% |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Leases [Abstract] | |||
Lease expense | $ 175 | $ 330 | $ 1,324 |
Future lease payments for operating leases with initial or remaining noncancelable term of one year or more [Abstract] | |||
2,016 | 148 | ||
2,017 | 116 | ||
2018 & Thereafter | 0 | ||
Total minimum payments required | $ 264 |
Accumulated Other Comprehensi66
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Investments [Abstract] | |||||||||||
Total unrealized gain before federal income taxes | $ 59,883 | $ 79,753 | $ 59,883 | $ 79,753 | |||||||
Deferred tax liability | (20,959) | (27,913) | (20,959) | (27,913) | |||||||
Net unrealized gains on investments | 38,924 | 51,840 | 38,924 | 51,840 | |||||||
Foreign exchange adjustment [Abstract] | |||||||||||
Total unrealized gains (losses) | (1,640) | 600 | (1,640) | 600 | |||||||
Deferred tax benefit (liability) | 574 | (210) | 574 | (210) | |||||||
Net unrealized gains (losses) on foreign exchange adjustment | (1,066) | 390 | (1,066) | 390 | |||||||
Accumulated other comprehensive income | 37,858 | 52,230 | 37,858 | 52,230 | |||||||
Investments [Abstract] | |||||||||||
Pre-tax holding gains (losses) on debt and equity securities arising during period | (19,445) | 12,055 | $ 36,477 | ||||||||
Less: applicable federal income taxes | (6,806) | 4,220 | 12,766 | ||||||||
Net unrealized gains on investments | (12,639) | 7,835 | 23,711 | ||||||||
Pre-tax gains on debt and equity securities included in net income during period | 426 | 7,823 | 15,520 | ||||||||
Less: applicable federal income taxes | 149 | 2,739 | 5,431 | ||||||||
Other comprehensive income (loss), reclassification adjustment for sale of securities included in net income, net of tax | 277 | 5,084 | 10,089 | ||||||||
Change in unrealized gains on investments | (12,916) | 2,751 | 13,622 | ||||||||
Reconciliation of Accumulated Other Comprehensive Income [Roll Forward] | |||||||||||
Shareholders' equity at beginning of year | $ 399,496 | $ 381,724 | 399,496 | 381,724 | 346,712 | ||||||
Change in unrealized net gains on investments | (12,916) | 2,751 | 13,622 | ||||||||
Shareholders' equity at end of year: | 394,498 | 399,496 | 394,498 | 399,496 | 381,724 | ||||||
Retained Earnings [Roll Forward] | |||||||||||
Beginning retained earnings | 294,773 | 280,003 | 294,773 | 280,003 | 258,358 | ||||||
Net income | 3,541 | $ 7,780 | $ 5,718 | 6,243 | 8,246 | $ 5,770 | $ 9,340 | 6,361 | 23,283 | 29,717 | 36,588 |
Dividends | (15,003) | (14,947) | (14,943) | ||||||||
Ending retained earnings | 303,053 | 294,773 | 303,053 | 294,773 | 280,003 | ||||||
AOCI Attributable to Parent [Member] | |||||||||||
Investments [Abstract] | |||||||||||
Change in unrealized gains on investments | (12,916) | 2,751 | 13,622 | ||||||||
Reconciliation of Accumulated Other Comprehensive Income [Roll Forward] | |||||||||||
Shareholders' equity at beginning of year | $ 52,230 | $ 50,490 | 52,230 | 50,490 | 37,443 | ||||||
Change in foreign exchange adjustment | (1,456) | (1,011) | (575) | ||||||||
Change in unrealized net gains on investments | (12,916) | 2,751 | 13,622 | ||||||||
Shareholders' equity at end of year: | $ 37,858 | $ 52,230 | $ 37,858 | $ 52,230 | $ 50,490 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Debt [Abstract] | ||
Revolving line of credit limit | $ 40,000 | |
Line of credit maturity date | Sep. 23, 2018 | |
Period of fixed interest on line of credit at company's options | 1 year | |
Outstanding drawings on line of credit | $ 20,000 | $ 20,000 |
Effective interest rate | 1.52% | |
Remaining unused amount under line of credit | $ 20,000 |
SCHEDULE I -SUMMARY OF INVEST68
SCHEDULE I -SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Cost | $ 442,578 | $ 455,385 | |
Amount at which shown in the balance sheet | 2,969 | ||
Money markets fund classified with cash and cash equivalent and excluded from other investments in related party | 69,517 | ||
Total Investments [Member] | |||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Cost | 555,468 | ||
Fair value | 615,351 | ||
Amount at which shown in the balance sheet | [1] | 615,351 | |
Limited Partnership [Member] | |||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Cost | 30,449 | ||
Fair value | 30,449 | ||
Amount at which shown in the balance sheet | [1] | 30,449 | |
Bonds [Member] | Total Fixed Maturities [Member] | |||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Cost | 442,578 | ||
Fair value | 437,184 | ||
Amount at which shown in the balance sheet | [1] | 437,184 | |
Bonds [Member] | U.S Government Obligations [Member] | |||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Cost | 103,448 | ||
Fair value | 103,245 | ||
Amount at which shown in the balance sheet | [1] | 103,245 | |
Bonds [Member] | Mortgage-backed Securities [Member] | |||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Cost | 35,645 | ||
Fair value | 35,371 | ||
Amount at which shown in the balance sheet | [1] | 35,371 | |
Bonds [Member] | State and Municipal Obligations [Member] | |||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Cost | 109,932 | ||
Fair value | 110,578 | ||
Amount at which shown in the balance sheet | [1] | 110,578 | |
Bonds [Member] | Foreign Government Obligations [Member] | |||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Cost | 25,416 | ||
Fair value | 23,965 | ||
Amount at which shown in the balance sheet | [1] | 23,965 | |
Bonds [Member] | Corporate Securities [Member] | |||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Cost | 168,137 | ||
Fair value | 164,025 | ||
Amount at which shown in the balance sheet | [1] | 164,025 | |
Common Stocks [Member] | Total Equity Securities [Member] | |||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Cost | 80,221 | ||
Fair value | 145,498 | ||
Amount at which shown in the balance sheet | [1] | 145,498 | |
Common Stocks [Member] | Industrial, Miscellaneous, and All Others [Member] | |||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Cost | 80,221 | ||
Fair value | 145,498 | ||
Amount at which shown in the balance sheet | [1] | 145,498 | |
Short-term [Member] | Total Short-term and Other [Member] | |||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Cost | 2,220 | ||
Fair value | 2,220 | ||
Amount at which shown in the balance sheet | [1] | 2,220 | |
Short-term [Member] | Certificates of Deposit [Member] | |||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Cost | 2,220 | ||
Fair value | 2,220 | ||
Amount at which shown in the balance sheet | [1] | $ 2,220 | |
[1] | Investments presented above do not include $69,517 of money market funds classified with cash and cash equivalents in the balance sheet. |
SCHEDULE II CONDENSED FINANCI69
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Investments other than subsidiaries [Abstract] | |||||||||||||||
Fixed maturities | $ 437,184 | $ 451,809 | |||||||||||||
Limited partnerships | 75,458 | 81,230 | |||||||||||||
Total Investments | 660,360 | 698,112 | |||||||||||||
Cash and cash equivalents | $ 73,538 | $ 64,632 | $ 64,632 | $ 59,297 | $ 73,538 | $ 64,632 | $ 71,549 | 73,538 | 64,632 | $ 59,297 | $ 71,549 | ||||
Accounts receivable | 66,522 | 98,144 | |||||||||||||
Other assets | 11,009 | 9,413 | |||||||||||||
Total Assets | 1,085,771 | 1,144,247 | |||||||||||||
Liabilities [Abstract] | |||||||||||||||
Total Liabilities | 691,273 | 744,751 | |||||||||||||
Shareholders' equity [Abstract] | |||||||||||||||
Additional paid-in capital | 52,946 | 51,854 | |||||||||||||
Unrealized net gains on investments | 38,924 | 51,840 | |||||||||||||
Foreign exchange adjustment | (1,066) | 390 | |||||||||||||
Retained earnings | 303,053 | 294,773 | 280,003 | 258,358 | |||||||||||
Shareholders' equity | 394,498 | 399,496 | 381,724 | 346,712 | |||||||||||
Total liabilities and shareholders' equity | 1,085,771 | 1,144,247 | |||||||||||||
Revenue [Abstract] | |||||||||||||||
Commissions and service fees | 5,703 | 6,430 | 5,944 | ||||||||||||
Net investment income | 3,771 | $ 3,014 | $ 2,898 | 2,815 | 2,599 | $ 2,073 | $ 2,090 | 2,294 | 12,498 | 9,055 | 8,770 | ||||
Net realized losses on investments | (1,261) | 14,930 | 23,515 | ||||||||||||
Total revenue | 280,275 | 292,042 | 290,972 | ||||||||||||
Expenses [Abstract] | |||||||||||||||
Other | 90,573 | 88,048 | 85,361 | ||||||||||||
Total expenses | 246,323 | 247,644 | 236,062 | ||||||||||||
Income before federal income taxes and equity in undistributed income of subsidiaries | 33,952 | 44,398 | 54,910 | ||||||||||||
Federal income tax benefit | 10,669 | 14,681 | 18,322 | ||||||||||||
Equity in undistributed income of subsidiaries | (1,687) | 7,108 | 7,995 | ||||||||||||
Net income | 3,541 | $ 7,780 | $ 5,718 | 6,243 | 8,246 | $ 5,770 | $ 9,340 | 6,361 | 23,283 | 29,717 | 36,588 | ||||
Condensed Statements of Cash Flows [Abstract] | |||||||||||||||
Net cash provided by operating activities | 38,197 | 30,160 | 35,907 | ||||||||||||
Investing activities [Abstract] | |||||||||||||||
Distributions from limited partnerships | 4,494 | 1,752 | 2,528 | ||||||||||||
Net cash used in investing activities | (12,832) | (18,867) | (32,641) | ||||||||||||
Financing activities [Abstract] | |||||||||||||||
Dividends paid to shareholders | (15,003) | (14,947) | (14,943) | ||||||||||||
Net cash used in financing activities | (15,003) | (4,947) | (14,943) | ||||||||||||
Increase (decrease) in cash and cash equivalents | 8,906 | 5,335 | (12,252) | ||||||||||||
Cash and cash equivalents at beginning of year | 64,632 | 59,297 | 64,632 | 59,297 | 71,549 | ||||||||||
Cash and cash equivalents at end of year | 73,538 | 64,632 | 73,538 | 64,632 | 59,297 | ||||||||||
Class A [Member] | |||||||||||||||
Shareholders' equity [Abstract] | |||||||||||||||
Common stock | 112 | 112 | |||||||||||||
Class B [Member] | |||||||||||||||
Shareholders' equity [Abstract] | |||||||||||||||
Common stock | 529 | 527 | |||||||||||||
Parent Company [Member] | |||||||||||||||
Assets [Abstract] | |||||||||||||||
Investment in subsidiaries | 405,192 | 415,304 | |||||||||||||
Due from affiliates | 2,945 | 2,762 | |||||||||||||
Investments other than subsidiaries [Abstract] | |||||||||||||||
Fixed maturities | 12,181 | 11,924 | |||||||||||||
Limited partnerships | 208 | 233 | |||||||||||||
Total Investments | 12,389 | 12,157 | |||||||||||||
Cash and cash equivalents | 17,934 | 16,615 | 16,615 | 9,848 | 16,615 | 16,615 | 9,848 | 17,934 | 16,615 | $ 9,848 | $ 12,143 | ||||
Accounts receivable | 6,418 | 5,157 | |||||||||||||
Other assets | 21,067 | 17,905 | |||||||||||||
Total Assets | 465,945 | 469,900 | |||||||||||||
Liabilities [Abstract] | |||||||||||||||
Premiums payable | 21,672 | 27,850 | |||||||||||||
Deposits from insureds | 23,484 | 18,303 | |||||||||||||
Notes payable to bank | 20,000 | 20,000 | |||||||||||||
Other liabilities | 6,291 | 4,251 | |||||||||||||
Total Liabilities | 71,447 | 70,404 | |||||||||||||
Shareholders' equity [Abstract] | |||||||||||||||
Additional paid-in capital | 52,946 | 51,854 | |||||||||||||
Unrealized net gains on investments | 38,924 | 51,840 | |||||||||||||
Foreign exchange adjustment | (1,066) | 390 | |||||||||||||
Retained earnings | 303,053 | 294,773 | |||||||||||||
Shareholders' equity | 394,498 | 399,496 | |||||||||||||
Total liabilities and shareholders' equity | 465,945 | 469,900 | |||||||||||||
Revenue [Abstract] | |||||||||||||||
Commissions and service fees | 23,523 | 22,153 | 21,597 | ||||||||||||
Cash dividends from subsidiaries | 20,000 | 15,000 | 15,000 | ||||||||||||
Net investment income | 120 | 102 | 54 | ||||||||||||
Net realized losses on investments | (22) | (27) | (11) | ||||||||||||
Other | (17) | 126 | 41 | ||||||||||||
Total revenue | 43,604 | 37,354 | 36,681 | ||||||||||||
Expenses [Abstract] | |||||||||||||||
Salary and related items | 17,616 | 15,543 | 15,965 | ||||||||||||
Other | 7,297 | 7,978 | 6,633 | ||||||||||||
Total expenses | 24,913 | 23,521 | 22,598 | ||||||||||||
Income before federal income taxes and equity in undistributed income of subsidiaries | 18,691 | 13,833 | 14,083 | ||||||||||||
Federal income tax benefit | (350) | (294) | (348) | ||||||||||||
Income before equity in undistributed income of subsidiaries | 19,041 | 14,127 | 14,431 | ||||||||||||
Equity in undistributed income of subsidiaries | 4,242 | 15,590 | 22,157 | ||||||||||||
Net income | 23,283 | 29,717 | 36,588 | ||||||||||||
Condensed Statements of Cash Flows [Abstract] | |||||||||||||||
Net cash provided by operating activities | 21,841 | 19,719 | 15,125 | ||||||||||||
Investing activities [Abstract] | |||||||||||||||
Purchases of long-term investments | (4,792) | (6,398) | (10,322) | ||||||||||||
Sales or maturities of long-term investments | 4,194 | 5,253 | 9,982 | ||||||||||||
Distributions from limited partnerships | 0 | 13 | 0 | ||||||||||||
Net purchases of property and equipment | (4,921) | (6,873) | (1,775) | ||||||||||||
Other | 0 | 0 | (362) | ||||||||||||
Net cash used in investing activities | (5,519) | (8,005) | (2,477) | ||||||||||||
Financing activities [Abstract] | |||||||||||||||
Dividends paid to shareholders | (15,003) | (14,947) | (14,943) | ||||||||||||
Drawings on line of credit | 0 | 10,000 | 0 | ||||||||||||
Net cash used in financing activities | (15,003) | (4,947) | (14,943) | ||||||||||||
Increase (decrease) in cash and cash equivalents | 1,319 | 6,767 | (2,295) | ||||||||||||
Cash and cash equivalents at beginning of year | $ 16,615 | $ 9,848 | 16,615 | 9,848 | 12,143 | ||||||||||
Cash and cash equivalents at end of year | $ 17,934 | $ 16,615 | $ 17,934 | $ 16,615 | $ 9,848 | ||||||||||
Parent Company [Member] | Class A [Member] | |||||||||||||||
Shareholders' equity [Abstract] | |||||||||||||||
Common stock | 112 | 112 | |||||||||||||
Parent Company [Member] | Class B [Member] | |||||||||||||||
Shareholders' equity [Abstract] | |||||||||||||||
Common stock | $ 529 | $ 527 |
SCHEDULE III SUPPLEMENTARY IN70
SCHEDULE III SUPPLEMENTARY INSURANCE INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Property and Casualty Insurance [Member] | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
Deferred Policy Acquisition Costs | $ 1,443 | $ 2,263 | $ 2,319 | |
Reserves for Unpaid Claims and Claim Acquisition Expenses | 464,305 | 449,133 | 408,469 | |
Unearned Premiums | 18,579 | 23,659 | 26,303 | |
Other Policy Claims and Benefits Payable | 0 | 0 | 0 | |
Net Premium Earned | 242,364 | 224,683 | 202,785 | |
Net Investment Income | [1] | 12,498 | 9,055 | 8,770 |
Benefits, Claims, Losses and Settlement Expenses | [2] | 142,258 | 139,308 | 133,005 |
Amortization of Deferred Policy Acquisition Costs | 50,270 | 48,872 | 47,414 | |
Other Operating Expenses | [1],[3] | 13,682 | 14,033 | 14,459 |
Net Premiums Written | 238,330 | 224,258 | 201,817 | |
Reinsurance [Member] | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
Deferred Policy Acquisition Costs | 0 | 0 | 0 | |
Reserves for Unpaid Claims and Claim Acquisition Expenses | 49,291 | 56,969 | 66,001 | |
Unearned Premiums | 6,712 | 11,360 | 10,390 | |
Other Policy Claims and Benefits Payable | 0 | 0 | 0 | |
Net Premium Earned | 20,971 | 36,944 | 49,958 | |
Net Investment Income | [1] | 12,498 | 9,055 | 8,770 |
Benefits, Claims, Losses and Settlement Expenses | [2] | 13,492 | 20,288 | 17,696 |
Amortization of Deferred Policy Acquisition Costs | 0 | 0 | 0 | |
Other Operating Expenses | [1],[3] | 13,682 | 14,033 | 14,459 |
Net Premiums Written | $ 16,323 | $ 37,913 | $ 51,867 | |
[1] | Amounts are not broken down into separate segments; entire consolidated amount included in each segment. | |||
[2] | Allocations of certain expenses have been made to investment income, settlement expenses and other operating expenses and are based on a number of assumptions and estimates. Results among these categories would change if different methods were applied. | |||
[3] | Commission allowances relating to reinsurance ceded are offset against other operating expenses. |
SCHEDULE IV - REINSURANCE (Deta
SCHEDULE IV - REINSURANCE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||||||||||
Direct Premiums | $ 370,499 | $ 342,656 | $ 313,842 | ||||||||
Ceded to Other Companies | 562 | 1,275 | 2,825 | ||||||||
Assumed from Other Companies | 21,533 | 38,219 | 52,783 | ||||||||
Net Amount | $ 65,995 | $ 65,445 | $ 65,449 | $ 66,446 | $ 68,933 | $ 65,947 | $ 62,905 | $ 63,842 | 263,335 | 261,627 | 252,743 |
Retrocessions associated with premiums assumed from other companies | 562 | 1,275 | 2,825 | ||||||||
Property and Casualty Insurance [Member] | |||||||||||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||||||||||
Direct Premiums | 370,499 | 342,656 | 313,842 | ||||||||
Ceded to Other Companies | 128,697 | 119,248 | 113,882 | ||||||||
Assumed from Other Companies | 21,533 | 38,219 | 52,783 | ||||||||
Net Amount | $ 263,335 | $ 261,627 | $ 252,743 | ||||||||
% of Amount Assumed to Net | 8.00% | 14.10% | 19.80% |
SCHEDULE VI SUPPLEMENTAL INFO72
SCHEDULE VI SUPPLEMENTAL INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||
Deferred Policy Acquisition Costs | $ 1,443 | $ 2,263 | $ 2,319 | |
Reserves for Unpaid Claims and Claim Adjustment Expenses | 513,596 | 506,102 | 474,470 | |
Discount if any Deducted in Column C | [1] | 2,110 | 3,129 | 5,885 |
Unearned Premiums | 25,291 | 35,019 | 36,693 | |
Earned Premiums | 263,335 | 261,627 | 252,743 | |
Net Investment Income | 12,498 | 9,055 | 8,770 | |
Claims and Claim Adjustment Expenses Incurred Related to Current Year | 165,812 | 169,950 | 156,264 | |
Claims and Claim Adjustment Expenses Incurred Related to Prior Years | (10,062) | (10,354) | (5,563) | |
Amortization of Deferred Policy Acquisition Costs | 50,270 | 48,872 | 47,414 | |
Paid Claims and Claim Adjustment Expenses | 149,580 | 152,101 | 151,849 | |
Net Premiums Written | $ 254,653 | $ 262,171 | $ 253,684 | |
Loss reserve discounted present value cash flow pretax interest rate utilized | 3.50% | 3.50% | 3.50% | |
[1] | Loss reserves on certain reinsurance assumed and permanent total disability worker's compensation claims have been discounted to present value using pretax interest rates not exceeding 3.5%. |