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Investment Operations (Tables)
12 Months Ended
Dec. 31, 2019
Investment Operations [Abstract]  
Available-For-Sale Fixed Maturity Securities by Investment Category
Available-For-Sale Fixed Maturity Securities by Investment Category
 
 
 
December 31, 2019
 
Amortized
 Cost
 
Gross
 Unrealized
 Gains
 
Gross
 Unrealized
 Losses
 
 Fair
 Value
 
Non-credit losses on other-than-temporary impairments (1)
 
(Dollars in thousands)
Fixed maturities:
 
 
 
 
 
 
 
 
 
Corporate
$
3,376,432

 
$
418,049

 
$
(15,531
)
 
$
3,778,950

 
$

Residential mortgage-backed
626,663

 
47,654

 
(1,929
)
 
672,388

 
1,997

Commercial mortgage-backed
969,453

 
77,433

 
(1,413
)
 
1,045,473

 

Other asset-backed
697,390

 
19,745

 
(2,614
)
 
714,521

 
502

United States Government and agencies
12,417

 
1,711

 
(5
)
 
14,123

 

States and political subdivisions
1,332,914

 
145,125

 
(866
)
 
1,477,173

 

Total fixed maturities
$
7,015,269

 
$
709,717

 
$
(22,358
)
 
$
7,702,628

 
$
2,499


 
December 31, 2018
 
Amortized
 Cost
 
Gross
 Unrealized
 Gains
 
Gross
 Unrealized
 Losses
 

 Fair
 Value
 
Non-credit losses on other-than-temporary impairments (1)
 
(Dollars in thousands)
Fixed maturities:
 
 
 
 
 
 
 
 
 
Corporate
$
3,231,846

 
$
138,972

 
$
(90,933
)
 
$
3,279,885

 
$

Residential mortgage-backed
584,133

 
29,969

 
(7,242
)
 
606,860

 
2,823

Commercial mortgage-backed
873,672

 
24,284

 
(19,390
)
 
878,566

 

Other asset-backed
697,332

 
15,567

 
(5,329
)
 
707,570

 
1,143

United States Government and agencies
19,673

 
996

 
(134
)
 
20,535

 

States and political subdivisions
1,449,621

 
95,921

 
(5,913
)
 
1,539,629

 

Total fixed maturities
$
6,856,277

 
$
305,709

 
$
(128,941
)
 
$
7,033,045

 
$
3,966


(1)
Non-credit losses subsequent to the initial impairment measurement date on OTTI losses are included in the gross unrealized gains and gross unrealized losses columns above. The non-credit loss component of OTTI losses for residential mortgage-backed and other asset-backed securities at December 31, 2019 and December 31, 2018 were in an unrealized gain position due to increases in estimated fair value subsequent to initial recognition of non-credit losses on such securities.

Available-For-Sale Fixed Maturities by Maturity Date
Available-For-Sale Fixed Maturities by Maturity Date
 
 
 
 
 
 
 
 
December 31, 2019
 
Amortized
 Cost
 

 Fair Value
 
(Dollars in thousands)
Due in one year or less
$
66,353

 
$
67,542

Due after one year through five years
546,639

 
575,142

Due after five years through ten years
731,902

 
805,484

Due after ten years
3,376,869

 
3,822,078

 
4,721,763

 
5,270,246

Mortgage-backed and other asset-backed
2,293,506

 
2,432,382

Total fixed maturities
$
7,015,269

 
$
7,702,628



Net Unrealized Gains on Investments in Accumulated Other Comprehensive Income
Net Unrealized Gains on Investments in Accumulated Other Comprehensive Income
 
 
 
 
 
December 31,
 
2019
 
2018
 
(Dollars in thousands)
Net unrealized appreciation on:
 
 
 
Fixed maturities - available for sale
$
687,359

 
$
176,768

Adjustments for assumed changes in amortization pattern of:
 
 
 
Deferred acquisition costs
(200,227
)
 
(46,732
)
Value of insurance in force acquired
(12,498
)
 
(6,878
)
Unearned revenue reserve
18,025

 
5,134

Adjustments for assumed changes in policyholder liabilities
(30,642
)
 
(1,642
)
Provision for deferred income taxes (see Note 5)
(97,023
)
 
(26,596
)
Net unrealized investment gains
$
364,994

 
$
100,054


Change in Unrealized Appreciation/Depreciation of Investments - Recorded in Accumulated Other Comprehensive Income

Change in Unrealized Appreciation/Depreciation of Investments - Recorded in Accumulated Other Comprehensive Income
 
 
 
 
 
 
 
Year ended December 31,
 
2019
 
2018
 
2017
 
(Dollars in thousands)
Fixed maturities - available for sale
$
510,591

 
$
(357,950
)
 
$
187,639

Equity securities

 

 
4,941

Change in unrealized appreciation/depreciation of investments
$
510,591

 
$
(357,950
)
 
$
192,580


Fixed Maturity Securities with Unrealized Losses by Length of Time
Fixed Maturity Securities with Unrealized Losses by Length of Time
 
 
 
 
 
 
 
 
 
December 31, 2019
 
 
Less than one year
 
One year or more
 
Total
 
 
Description of Securities
 
 Fair Value
 
Unrealized Losses
 
 Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
 
Percent of Total
 
 
(Dollars in thousands)
 
 
Fixed maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate
 
$
114,520

 
$
(2,476
)
 
$
84,719

 
$
(13,055
)
 
$
199,239

 
$
(15,531
)
 
69.5
%
Residential mortgage-backed
 
68,743

 
(1,435
)
 
6,941

 
(494
)
 
75,684

 
(1,929
)
 
8.6
%
Commercial mortgage-backed
 
46,537

 
(1,266
)
 
2,610

 
(147
)
 
49,147

 
(1,413
)
 
6.3
%
Other asset-backed
 
112,462

 
(519
)
 
102,439

 
(2,095
)
 
214,901

 
(2,614
)
 
11.7
%
United States Government and agencies
 

 

 
2,494

 
(5
)
 
2,494

 
(5
)
 
%
States and political subdivisions
 
19,367

 
(379
)
 
5,936

 
(487
)
 
25,303

 
(866
)
 
3.9
%
Total fixed maturities
 
$
361,629

 
$
(6,075
)
 
$
205,139

 
$
(16,283
)
 
$
566,768

 
$
(22,358
)
 
100.0
%

Fixed Maturity Securities with Unrealized Losses by Length of Time
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 
Less than one year
 
One year or more
 
Total
 
 
Description of Securities
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
 
 Fair Value
 
Unrealized Losses
 
Percent of Total
 
 
(Dollars in thousands)
 
 
Fixed maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate
 
$
1,035,176

 
$
(60,299
)
 
$
207,381

 
$
(30,634
)
 
$
1,242,557

 
$
(90,933
)
 
70.5
%
Residential mortgage-backed
 
191,365

 
(4,482
)
 
74,113

 
(2,760
)
 
265,478

 
(7,242
)
 
5.6
%
Commercial mortgage-backed
 
302,159

 
(9,947
)
 
148,855

 
(9,443
)
 
451,014

 
(19,390
)
 
15.0
%
Other asset-backed
 
250,119

 
(3,397
)
 
149,997

 
(1,932
)
 
400,116

 
(5,329
)
 
4.1
%
United States Government and agencies
 

 

 
6,474

 
(134
)
 
6,474

 
(134
)
 
0.1
%
States and political subdivisions
 
144,681

 
(3,885
)
 
16,943

 
(2,028
)
 
161,624

 
(5,913
)
 
4.7
%
Total fixed maturities
 
$
1,923,500

 
$
(82,010
)
 
$
603,763

 
$
(46,931
)
 
$
2,527,263

 
$
(128,941
)
 
100.0
%

Mortgage Loans by Collateral Type
Mortgage Loans by Collateral Type
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2019
 
December 31, 2018
Collateral Type
 
Carrying Value
 
Percent of Total
 
Carrying Value
 
Percent of Total
 
 
(Dollars in thousands)
Office
 
$
417,746

 
41.3
%
 
$
454,694

 
43.7
%
Retail
 
345,870

 
34.2

 
332,579

 
32.0

Industrial
 
235,274

 
23.2

 
234,453

 
22.6

Other
 
12,788

 
1.3

 
18,103

 
1.7

Total
 
$
1,011,678

 
100.0
%
 
$
1,039,829

 
100.0
%

Mortgage Loans by Geographic Location within the United States
Mortgage Loans by Geographic Location within the United States
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2019
 
December 31, 2018
Region of the United States
 
Carrying Value
 
Percent of Total
 
Carrying Value
 
Percent of Total
 
 
(Dollars in thousands)
South Atlantic
 
$
288,299

 
28.5
%
 
$
301,206

 
29.0
%
Pacific
 
164,996

 
16.3

 
162,824

 
15.7

East North Central
 
117,053

 
11.6

 
117,768

 
11.3

West North Central
 
108,942

 
10.8

 
126,320

 
12.1

Mountain
 
96,857

 
9.6

 
101,335

 
9.7

East South Central
 
81,275

 
8.0

 
76,098

 
7.3

West South Central
 
76,650

 
7.6

 
85,919

 
8.3

Middle Atlantic
 
45,687

 
4.5

 
34,843

 
3.4

New England
 
31,919

 
3.1

 
33,516

 
3.2

Total
 
$
1,011,678

 
100.0
%
 
$
1,039,829

 
100.0
%

Mortgage Loans by Loan-to-Value Ratio
Mortgage Loans by Loan-to-Value Ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2019
 
December 31, 2018
Loan-to-Value Ratio
 

Carrying Value
 
Percent of Total
 
Carrying Value
 
Percent of Total
 
 
(Dollars in thousands)
0% - 50%
 
$
412,973

 
40.8
%
 
$
409,089

 
39.3
%
51% - 60%
 
310,869

 
30.7

 
314,038

 
30.2

61% - 70%
 
256,280

 
25.4

 
264,973

 
25.5

71% - 80%
 
31,556

 
3.1

 
37,418

 
3.6

81% - 90%
 

 

 
14,311

 
1.4

Total
 
$
1,011,678

 
100.0
%
 
$
1,039,829

 
100.0
%

Mortgage Loans by Year of Origination
Mortgage Loans by Year of Origination
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2019
 
December 31, 2018
 
 
Carrying Value
 
Percent of Total
 
Carrying Value
 
Percent of Total
 
 
(Dollars in thousands)
2019
 
$
69,319

 
6.8
%
 
$

 
%
2018
 
128,334

 
12.7

 
137,519

 
13.2

2017
 
200,283

 
19.8

 
207,540

 
20.0

2016
 
144,311

 
14.3

 
149,437

 
14.4

2015
 
119,724

 
11.8

 
128,877

 
12.4

2014 and prior
 
349,707

 
34.6

 
416,456

 
40.0

Total
 
$
1,011,678

 
100.0
%
 
$
1,039,829

 
100.0
%


Impaired Mortgage Loans
 Impaired Mortgage Loans
 
December 31,
 
2019
 
2018
 
(Dollars in thousands)
Unpaid principal balance
$
4,632

 
$
18,622

Less:
 
 
 
Related allowance
(329
)
 
(3,107
)
Carrying value of impaired mortgage loans
$
4,303

 
$
15,515


Allowance on Mortgage Loans
 Allowance on Mortgage Loans
 
Year ended December 31,
 
2019
 
2018
 
(Dollars in thousands)
Balance at beginning of period
$
3,107

 
$
497

Allowances established

 
2,778

Recoveries
(2,778
)
 
(168
)
Balance at end of period
$
329

 
$
3,107


Components of Net Investment Income
Components of Net Investment Income
 
Year ended December 31,
 
2019
 
2018
 
2017
 
(Dollars in thousands)
Fixed maturities - available for sale
$
334,557

 
$
340,498

 
$
344,302

Equity securities
8,718

 
8,488

 
6,502

Mortgage loans
46,182

 
45,294

 
42,185

Policy loans
9,416

 
9,210

 
9,014

Short-term investments, cash and cash equivalents
1,043

 
772

 
506

Derivative income (loss)
25,282

 
(10,405
)
 
7,687

Prepayment fee income and other
7,332

 
9,208

 
12,470

 
432,530

 
403,065

 
422,666

Less investment expenses
(7,532
)
 
(8,447
)
 
(7,467
)
Net investment income
$
424,998

 
$
394,618

 
$
415,199


Realized Gains (Losses) - Recorded in Income
Realized Gains (Losses) - Recorded in Income 
 
 
 
 
 
 
Year ended December 31,
 
2019
 
2018
 
2017
 
(Dollars in thousands)
Realized gains (losses) on investments
 
 
 
 
 
Fixed maturities:
 
 
 
 
 
Gross gains
$
3,779

 
$
2,195

 
$
1,426

Gross losses
(3,777
)
 
(363
)
 
(1,081
)
Equity securities

 

 
(90
)
Mortgage loans
2,778

 

 

Real estate
54

 

 
304

Other
(4
)
 
(19
)
 
40

 
2,830

 
1,813

 
599

Net gains and (losses) recognized during the period on equity securities held at the end of the period (1)
5,666

 
(8,137
)
 

Net gains and (losses) recognized during the period on equity securities sold during the period
27

 
(952
)
 

Net gains (losses) recognized during the period on equity securities
5,693

 
(9,089
)
 

Net realized gains (losses)
8,523

 
(7,276
)
 
599

 
 
 
 
 
 
Impairment losses recognized in earnings:
 
 
 
 
 
Credit-related portion of fixed maturity losses (2)

 
(32
)
 

Other credit-related (3)
(919
)
 
(4,966
)
 
(1,553
)
Net realized gains (losses) on investments recorded in income
$
7,604

 
$
(12,274
)
 
$
(954
)

(1)
See Note 1 to our consolidated financial statements for discussion of change in accounting policy for equity securities during 2018.
(2)
Amount represents the credit-related losses recognized for fixed maturities that were impaired through income but not written down to fair value. As discussed above, the non-credit portion of the losses have been recognized in other comprehensive income (loss).
(3)
Amount represents credit-related losses for fixed maturities, mortgage loans, and other investments written down to fair value through income.

Credit Loss Component of Other-than-temporary Impairments on Fixed Maturities
Credit Loss Component of Other-Than-Temporary Impairments on Fixed Maturities
 
 
 
 
 
Year ended December 31,
 
 
2019
 
2018
 
 
(Dollars in thousands)
Balance at beginning of period
 
$
(5,963
)
 
$
(12,392
)
Increases to previously impaired investments
 

 
(32
)
Reductions due to investments sold
 
1,147

 
3,932

Reduction for credit loss that no longer has a portion of the OTTI loss recognized in other comprehensive income
 

 
2,529

Balance at end of period
 
$
(4,816
)
 
$
(5,963
)

VIE Investments by Category
VIE Investments by Category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2019
 
December 31, 2018
 
Carrying Value
 
Maximum Exposure to Loss
 
Carrying Value
 
Maximum Exposure to Loss
 
(Dollars in thousands)
LIHTC investments
$
42,907

 
$
43,834

 
$
54,037

 
$
55,597

Investment companies
53,388

 
103,125

 
40,236

 
79,578

Real estate limited partnerships
9,565

 
15,527

 
8,945

 
15,673

Other
492

 
492

 
483

 
493

Total
$
106,352

 
$
162,978

 
$
103,701

 
$
151,341


Schedule of Derivative Instruments
Derivatives Instruments by Type
 
 
December 31, 2019
 
December 31, 2018
 
(Dollars in thousands)
Assets
 
 
 
Freestanding derivatives:
 
 
 
Call options (reported in other investments)
$
31,469

 
$
4,745

Embedded derivatives:
 
 
 
Modified coinsurance (reported in reinsurance recoverable)
2,327

 
157

Interest-only security (reported in fixed maturities)
385

 
855

Total assets
$
34,181

 
$
5,757

 
 
 
 
Liabilities
 
 
 
Embedded derivatives:
 
 
 
Indexed products (reported in liability for future policy benefits)
$
76,346

 
$
40,028

Modified coinsurance (reported in other liabilities)
254

 
780

Total liabilities
$
76,600

 
$
40,808

Derivative Income (Loss)
 
 
 
 
 
 
 
 
Year ended December 31,
 
 
2019
 
2018
 
2017
 
 
(Dollars in thousands)
Freestanding derivatives:
 
 
 
 
 
 
Call options
 
$
22,497

 
$
(7,749
)
 
$
9,372

Embedded derivatives:
 


 


 


Modified coinsurance
 
2,695

 
(2,480
)
 
(1,440
)
Interest-only security
 
90

 
(176
)
 
(246
)
Indexed products
 
(23,050
)
 
3,243

 
321

Total income (loss) from derivatives
 
$
2,232

 
$
(7,162
)
 
$
8,007