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Investments
 6 Months Ended
Jun. 30, 2016
Investments, Debt and Equity Securities [Abstract]  
Investments
Investments

a)The following tables summarize the Company's available-for-sale investments.

 
June 30, 2016
(dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Holding
Gains
 
Gross
Unrealized
Holding
Losses
 
Unrealized
Other-Than-
Temporary
Impairment
Losses
 
Estimated
Fair
Value
Fixed maturities:
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government agencies
$
674,801

 
$
25,489

 
$
(9
)
 
$
—

 
$
700,281

Obligations of states, municipalities and political subdivisions
4,193,114

 
370,264

 
(2,329
)
 
—

 
4,561,049

Foreign governments
1,349,640

 
233,884

 
(305
)
 
—

 
1,583,219

Commercial mortgage-backed securities
975,606

 
48,531

 
(533
)
 
—

 
1,023,604

Residential mortgage-backed securities
805,631

 
57,100

 
(529
)
 
(2,258
)
 
859,944

Asset-backed securities
28,232

 
127

 
(17
)
 
—

 
28,342

Corporate bonds
1,563,313

 
82,823

 
(1,293
)
 
(1,653
)
 
1,643,190

Total fixed maturities
9,590,337

 
818,218

 
(5,015
)
 
(3,911
)
 
10,399,629

Equity securities:
 
 
 
 
 
 
 
 
 
Insurance, banks and other financial institutions
835,144

 
769,505

 
(12,641
)
 
—

 
1,592,008

Industrial, consumer and all other
1,555,040

 
1,270,474

 
(21,953
)
 
—

 
2,803,561

Total equity securities
2,390,184

 
2,039,979

 
(34,594
)
 
—

 
4,395,569

Short-term investments
1,995,368

 
124

 
(1
)
 
—

 
1,995,491

Investments, available-for-sale
$
13,975,889

 
$
2,858,321

 
$
(39,610
)
 
$
(3,911
)
 
$
16,790,689

 
December 31, 2015
(dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Holding
Gains
 
Gross
Unrealized
Holding
Losses
 
Unrealized
Other-Than-
Temporary
Impairment
Losses
 
Estimated
Fair
Value
Fixed maturities:
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government agencies
$
695,652

 
$
9,836

 
$
(4,781
)
 
$
—

 
$
700,707

Obligations of states, municipalities and political subdivisions
3,817,136

 
204,302

 
(8,225
)
 
—

 
4,013,213

Foreign governments
1,302,329

 
115,809

 
(1,681
)
 
—

 
1,416,457

Commercial mortgage-backed securities
657,670

 
6,867

 
(4,999
)
 
—

 
659,538

Residential mortgage-backed securities
837,964

 
22,563

 
(4,022
)
 
(2,258
)
 
854,247

Asset-backed securities
36,462

 
15

 
(406
)
 
—

 
36,071

Corporate bonds
1,690,945

 
41,123

 
(16,209
)
 
(1,624
)
 
1,714,235

Total fixed maturities
9,038,158

 
400,515

 
(40,323
)
 
(3,882
)
 
9,394,468

Equity securities:
 
 
 
 
 
 
 
 
 
Insurance, banks and other financial institutions
651,002

 
690,271

 
(6,551
)
 
—

 
1,334,722

Industrial, consumer and all other
1,557,832

 
1,227,052

 
(45,131
)
 
—

 
2,739,753

Total equity securities
2,208,834

 
1,917,323

 
(51,682
)
 
—

 
4,074,475

Short-term investments
1,642,103

 
167

 
(9
)
 
—

 
1,642,261

Investments, available-for-sale
$
12,889,095

 
$
2,318,005

 
$
(92,014
)
 
$
(3,882
)
 
$
15,111,204


b)The following tables summarize gross unrealized investment losses by the length of time that securities have continuously been in an unrealized loss position.

 
June 30, 2016
 
Less than 12 months
 
12 months or longer
 
Total
(dollars in thousands)
Estimated
Fair
Value
 
Gross
Unrealized
Holding and
Other-Than-
Temporary
Impairment
Losses
 
Estimated
Fair
Value
 
Gross
Unrealized
Holding and
Other-Than-
Temporary
Impairment
Losses
 
Estimated
Fair
Value
 
Gross
Unrealized
Holding and
Other-Than-
Temporary
Impairment
Losses
Fixed maturities:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government agencies
$
7,537

 
$
(7
)
 
$
8,529

 
$
(2
)
 
$
16,066

 
$
(9
)
Obligations of states, municipalities and political subdivisions
2,789

 
(2
)
 
47,301

 
(2,327
)
 
50,090

 
(2,329
)
Foreign governments
42,255

 
(304
)
 
5,026

 
(1
)
 
47,281

 
(305
)
Commercial mortgage-backed securities
23,518

 
(142
)
 
63,738

 
(391
)
 
87,256

 
(533
)
Residential mortgage-backed securities
6,584

 
(2,304
)
 
104,340

 
(483
)
 
110,924

 
(2,787
)
Asset-backed securities
—

 
—

 
6,316

 
(17
)
 
6,316

 
(17
)
Corporate bonds
37,222

 
(1,664
)
 
104,194

 
(1,282
)
 
141,416

 
(2,946
)
Total fixed maturities
119,905

 
(4,423
)
 
339,444

 
(4,503
)
 
459,349

 
(8,926
)
Equity securities:
 
 
 
 
 
 
 
 
 
 
 
Insurance, banks and other financial institutions
77,737

 
(12,641
)
 
—

 
—

 
77,737

 
(12,641
)
Industrial, consumer and all other
191,170

 
(19,887
)
 
27,819

 
(2,066
)
 
218,989

 
(21,953
)
Total equity securities
268,907

 
(32,528
)
 
27,819

 
(2,066
)
 
296,726

 
(34,594
)
Short-term investments
99,977

 
(1
)
 
—

 
—

 
99,977

 
(1
)
Total
$
488,789

 
$
(36,952
)
 
$
367,263

 
$
(6,569
)
 
$
856,052

 
$
(43,521
)


At June 30, 2016, the Company held 216 securities with a total estimated fair value of $856.1 million and gross unrealized losses of $43.5 million. Of these 216 securities, 126 securities had been in a continuous unrealized loss position for one year or longer and had a total estimated fair value of $367.3 million and gross unrealized losses of $6.6 million. Of these securities, 119 securities were fixed maturities and seven were equity securities. The Company does not intend to sell or believe it will be required to sell these fixed maturities before recovery of their amortized cost. The Company has the ability and intent to hold these equity securities for a period of time sufficient to allow for the anticipated recovery of their fair value.

 
December 31, 2015
 
Less than 12 months
 
12 months or longer
 
Total
(dollars in thousands)
Estimated
Fair
Value
 
Gross
Unrealized
Holding and
Other-Than-
Temporary
Impairment
Losses
 
Estimated
Fair
Value
 
Gross
Unrealized
Holding and
Other-Than-
Temporary
Impairment
Losses
 
Estimated
Fair
Value
 
Gross
Unrealized
Holding and
Other-Than-
Temporary
Impairment
Losses
Fixed maturities:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government agencies
$
427,003

 
$
(3,648
)
 
$
92,552

 
$
(1,133
)
 
$
519,555

 
$
(4,781
)
Obligations of states, municipalities and political subdivisions
169,362

 
(4,864
)
 
70,101

 
(3,361
)
 
239,463

 
(8,225
)
Foreign governments
51,328

 
(249
)
 
40,345

 
(1,432
)
 
91,673

 
(1,681
)
Commercial mortgage-backed securities
289,058

 
(3,600
)
 
95,843

 
(1,399
)
 
384,901

 
(4,999
)
Residential mortgage-backed securities
78,814

 
(2,858
)
 
137,100

 
(3,422
)
 
215,914

 
(6,280
)
Asset-backed securities
6,228

 
(54
)
 
24,315

 
(352
)
 
30,543

 
(406
)
Corporate bonds
470,694

 
(9,509
)
 
343,737

 
(8,324
)
 
814,431

 
(17,833
)
Total fixed maturities
1,492,487

 
(24,782
)
 
803,993

 
(19,423
)
 
2,296,480

 
(44,205
)
Equity securities:
 
 
 
 
 
 
 
 
 
 
 
Insurance, banks and other financial institutions
63,873

 
(6,384
)
 
6,247

 
(167
)
 
70,120

 
(6,551
)
Industrial, consumer and all other
344,857

 
(44,879
)
 
2,907

 
(252
)
 
347,764

 
(45,131
)
Total equity securities
408,730

 
(51,263
)
 
9,154

 
(419
)
 
417,884

 
(51,682
)
Short-term investments
129,473

 
(9
)
 
—

 
—

 
129,473

 
(9
)
Total
$
2,030,690

 
$
(76,054
)
 
$
813,147

 
$
(19,842
)
 
$
2,843,837

 
$
(95,896
)


At December 31, 2015, the Company held 659 securities with a total estimated fair value of $2.8 billion and gross unrealized losses of $95.9 million. Of these 659 securities, 271 securities had been in a continuous unrealized loss position for one year or longer and had a total estimated fair value of $813.1 million and gross unrealized losses of $19.8 million. Of these securities, 264 securities were fixed maturities and seven were equity securities.

The Company completes a detailed analysis each quarter to assess whether the decline in the fair value of any investment below its cost basis is deemed other-than-temporary. All securities with unrealized losses are reviewed. The Company considers many factors in completing its quarterly review of securities with unrealized losses for other-than-temporary impairment, including the length of time and the extent to which fair value has been below cost and the financial condition and near-term prospects of the issuer. For equity securities, the ability and intent to hold the security for a period of time sufficient to allow for anticipated recovery is considered. For fixed maturities, the Company considers whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before recovery, the implied yield-to-maturity, the credit quality of the issuer and the ability to recover all amounts outstanding when contractually due.

For equity securities, a decline in fair value that is considered to be other-than-temporary is recognized in net income based on the fair value of the security at the time of assessment, resulting in a new cost basis for the security. For fixed maturities where the Company intends to sell the security or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, a decline in fair value is considered to be other-than-temporary and is recognized in net income based on the fair value of the security at the time of assessment, resulting in a new cost basis for the security. If the decline in fair value of a fixed maturity below its amortized cost is considered to be other-than-temporary based upon other considerations, the Company compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit-related portion of the other-than-temporary impairment, which is recognized in net income, resulting in a new cost basis for the security. Any remaining decline in fair value represents the non-credit portion of the other-than-temporary impairment, which is recognized in other comprehensive income (loss). The discount rate used to calculate the estimated present value of the cash flows expected to be collected is the effective interest rate implicit for the security at the date of purchase.

When assessing whether it intends to sell a fixed maturity or if it is likely to be required to sell a fixed maturity before recovery of its amortized cost, the Company evaluates facts and circumstances including decisions to reposition the investment portfolio, potential sales of investments to meet cash flow needs and, ultimately, current market prices.

c)The amortized cost and estimated fair value of fixed maturities at June 30, 2016 are shown below by contractual maturity.

(dollars in thousands)
Amortized
Cost
 
Estimated
Fair Value
Due in one year or less
$
720,305

 
$
726,444

Due after one year through five years
1,386,900

 
1,441,314

Due after five years through ten years
1,654,425

 
1,802,966

Due after ten years
4,019,238

 
4,517,015

 
7,780,868

 
8,487,739

Commercial mortgage-backed securities
975,606

 
1,023,604

Residential mortgage-backed securities
805,631

 
859,944

Asset-backed securities
28,232

 
28,342

Total fixed maturities
$
9,590,337

 
$
10,399,629



d)The following table presents the components of net investment income.

 
Quarter Ended June 30,
 
Six Months Ended June 30,
(dollars in thousands)
2016
 
2015
 
2016
 
2015
Interest:
 
 
 
 
 
 
 
Municipal bonds (tax-exempt)
$
22,563

 
$
24,293

 
$
44,485

 
$
50,145

Municipal bonds (taxable)
16,222

 
14,150

 
32,110

 
28,250

Other taxable bonds
36,959

 
34,013

 
72,278

 
69,151

Short-term investments, including overnight deposits
2,654

 
1,116

 
4,945

 
2,367

Dividends on equity securities
16,758

 
18,633

 
34,410

 
37,657

Income from equity method investments
3,921

 
1,712

 
3,668

 
3,056

Other
190

 
479

 
2,674

 
540

 
99,267

 
94,396

 
194,570

 
191,166

Investment expenses
(4,271
)
 
(3,810
)
 
(8,280
)
 
(7,705
)
Net investment income
$
94,996

 
$
90,586

 
$
186,290

 
$
183,461



e)The following table presents net realized investment gains and the change in net unrealized gains on investments. 

 
Quarter Ended June 30,
 
Six Months Ended June 30,
(dollars in thousands)
2016
 
2015
 
2016
 
2015
Realized gains:
 
 
 
 
 
 
 
Sales of fixed maturities
$
699

 
$
770

 
$
967

 
$
2,338

Sales of equity securities
17,798

 
7,000

 
45,526

 
22,956

Other
353

 
1,739

 
773

 
2,413

Total realized gains
18,850

 
9,509

 
47,266

 
27,707

Realized losses:
 
 
 
 
 
 
 
Sales of fixed maturities
(142
)
 
(97
)
 
(555
)
 
(221
)
Sales of equity securities
(1,780
)
 
(113
)
 
(2,498
)
 
(272
)
Other-than-temporary impairments
(3,675
)
 
—

 
(12,080
)
 
(5,092
)
Other
(718
)
 
(16
)
 
(2,996
)
 
(227
)
Total realized losses
(6,315
)
 
(226
)
 
(18,129
)
 
(5,812
)
Gains (losses) on securities measured at fair value through net income
4,706

 
(3,178
)
 
9,283

 
(10,219
)
Net realized investment gains
$
17,241

 
$
6,105

 
$
38,420

 
$
11,676

Change in net unrealized gains on investments included in other comprehensive income (loss):
 
 
 
 
 
 
 
Fixed maturities
$
213,026

 
$
(286,551
)
 
$
452,982

 
$
(180,213
)
Equity securities
42,786

 
(64,792
)
 
139,744

 
(6,447
)
Short-term investments
32

 
11

 
(35
)
 
(9
)
Net increase (decrease)
$
255,844

 
$
(351,332
)
 
$
592,691

 
$
(186,669
)


For the quarter ended June 30, 2016, other-than-temporary impairment losses recognized in net income and included in net realized investment gains totaled $3.7 million and were attributable to 12 equity securities. The write downs for the quarter included $3.0 million related to equities in industrial, consumer, or other types of businesses and $0.6 million related to equities in insurance, banks, and other financial institutions. For the six months ended June 30, 2016, other-than-temporary impairment losses recognized in net income and included in net realized investment gains totaled $12.1 million and were attributable to 21 equity securities. The write downs for the six-month period included $10.8 million related to equities in industrial, consumer, or other types of businesses and $1.3 million related to equities in insurance, banks, and other financial institutions. For the six months ended June 30, 2015, other-than-temporary impairment losses recognized in net income and included in net realized investment gains totaled $5.1 million and were attributable to 10 equity securities. The write downs for the six-month period included $4.5 million related to equities in industrial, consumer, or other types of businesses and $0.6 million related to equities in insurance, banks, and other financial institutions.