Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2018

The following tables present the balances of assets measured at fair value on a recurring basis by level within the fair value hierarchy.



	December 31, 2018
(dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Fixed maturities, available-for-sale:
U.S. Treasury securities	$	—	$	246,642	$	—	$	246,642
U.S. government-sponsored enterprises	—		359,322		—		359,322
Obligations of states, municipalities and political subdivisions	—		4,352,930		—		4,352,930
Foreign governments	—		1,559,604		—		1,559,604
Commercial mortgage-backed securities	—		1,650,199		—		1,650,199
Residential mortgage-backed securities	—		880,172		—		880,172
Asset-backed securities	—		19,408		—		19,408
Corporate bonds	—		974,911		—		974,911
Total fixed maturities, available-for-sale	—		10,043,188		—		10,043,188
Equity securities:
Insurance, banks and other financial institutions	1,876,811		—		53,728		1,930,539
Industrial, consumer and all other	3,790,406		—		—		3,790,406
Total equity securities	5,667,217		—		53,728		5,720,945
Short-term investments, available-for-sale	981,616		96,080		—		1,077,696
Total investments	$	6,648,833	$	10,139,268	$	53,728	$	16,841,829



	December 31, 2017
(dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Investments available-for-sale:
Fixed maturities:
U.S. Treasury securities	$	—	$	160,613	$	—	$	160,613
U.S. government-sponsored enterprises	—		363,520		—		363,520
Obligations of states, municipalities and political subdivisions	—		4,566,562		—		4,566,562
Foreign governments	—		1,489,228		—		1,489,228
Commercial mortgage-backed securities	—		1,234,326		—		1,234,326
Residential mortgage-backed securities	—		856,168		—		856,168
Asset-backed securities	—		34,728		—		34,728
Corporate bonds	—		1,235,525		—		1,235,525
Total fixed maturities	—		9,940,670		—		9,940,670
Equity securities: ⁽¹⁾
Insurance, banks and other financial institutions	1,934,224		—		168,809		2,103,033
Industrial, consumer and all other	3,864,814		—		—		3,864,814
Total equity securities	5,799,038		—		168,809		5,967,847
Short-term investments	2,065,749		95,225		—		2,160,974
Total investments available-for-sale ⁽¹⁾	$	7,864,787	$	10,035,895	$	168,809	$	18,069,491


⁽¹⁾	Effective January 1, 2018, the Company adopted ASU No. 2016-01 and equity securities are no longer classified as available-for-sale. Prior periods have not been restated to conform to the current presentation. See note 1.

The following table summarizes changes in Level 3 investments measured at fair value on a recurring basis.



(dollars in thousands)	2018			2017
Equity securities, beginning of period	$	168,809		$	191,203
Purchases	28,900			56,250
Sales	(35,335		)	(26,674		)
Net investment losses on Level 3 investments ⁽¹⁾	(108,646		)	(51,970		)
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Equity securities, end of period	$	53,728		$	168,809


⁽¹⁾	Included in change in fair value of equity securities in the consolidated statements of income (loss) and comprehensive income (loss) for the years ended December 31, 2018 and 2017.