QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. |
Commission File Number |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
None | ||||||||
Former name, former address and former fiscal year, if changed since last report. |
Title | Trading Symbol | Name | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
EX-101 INSTANCE DOCUMENT | |||||
EX-101 SCHEMA DOCUMENT | |||||
EX-101 CALCULATION LINKBASE DOCUMENT | |||||
EX-101 LABELS LINKBASE DOCUMENT | |||||
EX-101 PRESENTATION LINKBASE DOCUMENT | |||||
EX-101 DEFINITION LINKBASE DOCUMENT |
September 30, 2020 | December 31, 2019 | ||||||||||
(Unaudited) | (Audited) | ||||||||||
Assets | |||||||||||
Investments: | |||||||||||
Fixed maturity securities (amortized cost of $ | $ | $ | |||||||||
Real estate | |||||||||||
Investment funds | |||||||||||
Arbitrage trading account | |||||||||||
Equity securities | |||||||||||
Loans receivable (net of allowance for expected credit losses of $ | |||||||||||
Total investments | |||||||||||
Cash and cash equivalents | |||||||||||
Premiums and fees receivable (net of allowance for expected credit losses of $ | |||||||||||
Due from reinsurers (net of allowance for expected credit losses of $ | |||||||||||
Deferred policy acquisition costs | |||||||||||
Prepaid reinsurance premiums | |||||||||||
Trading account receivables from brokers and clearing organizations | |||||||||||
Property, furniture and equipment | |||||||||||
Goodwill | |||||||||||
Accrued investment income | |||||||||||
Federal and foreign income taxes | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Equity | |||||||||||
Liabilities: | |||||||||||
Reserves for losses and loss expenses | $ | $ | |||||||||
Unearned premiums | |||||||||||
Due to reinsurers | |||||||||||
Trading account securities sold but not yet purchased | |||||||||||
Federal and foreign income taxes | |||||||||||
Other liabilities | |||||||||||
Senior notes and other debt | |||||||||||
Subordinated debentures | |||||||||||
Total liabilities | |||||||||||
Equity: | |||||||||||
Preferred stock, par value $ | |||||||||||
Authorized | |||||||||||
Common stock, par value $ | |||||||||||
Authorized | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost, | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Noncontrolling interests | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||
Net premiums written | $ | $ | $ | $ | |||||||||||||||||||
Change in net unearned premiums | ( | ( | ( | ( | |||||||||||||||||||
Net premiums earned | |||||||||||||||||||||||
Net investment income | |||||||||||||||||||||||
Net investment gains (losses): | |||||||||||||||||||||||
Net realized and unrealized (losses) gains on investments | ( | ( | |||||||||||||||||||||
Change in allowance for expected credit losses on investments | |||||||||||||||||||||||
Net investment gains (losses) | ( | ||||||||||||||||||||||
Revenues from non-insurance businesses | |||||||||||||||||||||||
Insurance service fees | |||||||||||||||||||||||
Other income | |||||||||||||||||||||||
Total revenues | |||||||||||||||||||||||
OPERATING COSTS AND EXPENSES: | |||||||||||||||||||||||
Losses and loss expenses | |||||||||||||||||||||||
Other operating costs and expenses | |||||||||||||||||||||||
Expenses from non-insurance businesses | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Total operating costs and expenses | |||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Income tax expense | ( | ( | ( | ( | |||||||||||||||||||
Net income before noncontrolling interests | |||||||||||||||||||||||
Noncontrolling interests | ( | ( | ( | ||||||||||||||||||||
Net income to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
NET INCOME PER SHARE: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income before noncontrolling interests | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Change in unrealized currency translation adjustments | ( | ( | ( | ||||||||||||||||||||
Change in unrealized investment gains (losses), net of taxes | ( | ||||||||||||||||||||||
Other comprehensive income (loss) | ( | ||||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||
Noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
Comprehensive income to common stockholders | $ | $ | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
COMMON STOCK: | |||||||||||||||||||||||
Beginning and end of period | $ | $ | $ | $ | |||||||||||||||||||
ADDITIONAL PAID-IN CAPITAL: | |||||||||||||||||||||||
Beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Restricted stock units issued | ( | ( | ( | ( | |||||||||||||||||||
Restricted stock units expensed | |||||||||||||||||||||||
End of period | $ | $ | $ | $ | |||||||||||||||||||
RETAINED EARNINGS: | |||||||||||||||||||||||
Beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Cumulative effect adjustment resulting from changes in accounting principles | ( | ||||||||||||||||||||||
Net income to common stockholders | |||||||||||||||||||||||
Dividends ($ | ( | ( | ( | ( | |||||||||||||||||||
End of period | $ | $ | $ | $ | |||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS: | |||||||||||||||||||||||
Unrealized investment gains (losses): | |||||||||||||||||||||||
Beginning of period | $ | $ | $ | $ | ( | ||||||||||||||||||
Cumulative effect adjustment resulting from changes in accounting principles | |||||||||||||||||||||||
Change in unrealized gains (losses) on securities without an allowance for expected credit losses | ( | ||||||||||||||||||||||
Change in unrealized gains on securities with an allowance for expected credit losses | |||||||||||||||||||||||
End of period | |||||||||||||||||||||||
Currency translation adjustments: | |||||||||||||||||||||||
Beginning of period | ( | ( | ( | ( | |||||||||||||||||||
Net change in period | ( | ( | ( | ||||||||||||||||||||
End of period | ( | ( | ( | ( | |||||||||||||||||||
Total accumulated other comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
TREASURY STOCK: | |||||||||||||||||||||||
Beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Stock exercised/vested | |||||||||||||||||||||||
Stock repurchased | ( | ( | |||||||||||||||||||||
End of period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
NONCONTROLLING INTERESTS: | |||||||||||||||||||||||
Beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Distributions | ( | ( | ( | ( | |||||||||||||||||||
Net income | ( | ||||||||||||||||||||||
Other comprehensive (loss) income, net of tax | ( | ( | |||||||||||||||||||||
End of period | $ | $ | $ | $ |
For the Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
CASH FROM OPERATING ACTIVITIES: | |||||||||||
Net income to common stockholders | $ | $ | |||||||||
Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
Net investment losses (gains) | ( | ||||||||||
Depreciation and amortization | |||||||||||
Noncontrolling interests | |||||||||||
Investment funds | ( | ( | |||||||||
Stock incentive plans | |||||||||||
Change in: | |||||||||||
Arbitrage trading account | ( | ( | |||||||||
Premiums and fees receivable | ( | ( | |||||||||
Reinsurance accounts | ( | ( | |||||||||
Deferred policy acquisition costs | ( | ( | |||||||||
Income taxes | ( | ( | |||||||||
Reserves for losses and loss expenses | |||||||||||
Unearned premiums | |||||||||||
Other | ( | ( | |||||||||
Net cash from operating activities | |||||||||||
CASH FROM (USED IN) INVESTING ACTIVITIES: | |||||||||||
Proceeds from sale of fixed maturity securities | |||||||||||
Proceeds from sale of equity securities | |||||||||||
Distributions from investment funds | |||||||||||
Proceeds from maturities and prepayments of fixed maturity securities | |||||||||||
Purchase of fixed maturity securities | ( | ( | |||||||||
Purchase of equity securities | ( | ( | |||||||||
Real estate purchased | ( | ( | |||||||||
Change in loans receivable | |||||||||||
Net purchases of property, furniture and equipment | ( | ( | |||||||||
Change in balances due to security brokers | |||||||||||
Other | |||||||||||
Net cash from (used in) investing activities | ( | ||||||||||
CASH FROM (USED IN) FINANCING ACTIVITIES: | |||||||||||
Repayment of senior notes and other debt | ( | ( | |||||||||
Net proceeds from issuance of debt | |||||||||||
Cash dividends to common stockholders | ( | ( | |||||||||
Purchase of common treasury shares | ( | ||||||||||
Other, net | ( | ( | |||||||||
Net cash from (used in) financing activities | ( | ||||||||||
Net impact on cash due to change in foreign exchange rates | ( | ( | |||||||||
Net change in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents at beginning of year | |||||||||||
Cash and cash equivalents at end of period | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
(In thousands) | Unrealized Investment Gains (Losses) | Currency Translation Adjustments | Accumulated Other Comprehensive (Loss) Income | ||||||||||||||
As of and for the nine months ended September 30, 2020 | |||||||||||||||||
Changes in AOCI | |||||||||||||||||
Beginning of period | $ | $ | ( | $ | ( | ||||||||||||
Cumulative effect adjustment resulting from changes in accounting principles | |||||||||||||||||
Restated beginning of period | ( | ( | |||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||
Amounts reclassified from AOCI | |||||||||||||||||
Other comprehensive income (loss) | ( | ||||||||||||||||
Unrealized investment gain related to noncontrolling interest | ( | ( | |||||||||||||||
End of period | $ | $ | ( | $ | ( | ||||||||||||
Amounts reclassified from AOCI | |||||||||||||||||
Pre-tax | $ | (1) | $ | $ | |||||||||||||
Tax effect | ( | (2) | ( | ||||||||||||||
After-tax amounts reclassified | $ | $ | $ | ||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||
Pre-tax | $ | $ | ( | $ | |||||||||||||
Tax effect | ( | ( | |||||||||||||||
Other comprehensive income (loss) | $ | $ | ( | $ | |||||||||||||
As of and for the three months ended September 30, 2020 | |||||||||||||||||
Changes in AOCI | |||||||||||||||||
Beginning of period | $ | $ | ( | $ | ( | ||||||||||||
Other comprehensive income before reclassifications | |||||||||||||||||
Amounts reclassified from AOCI | ( | ( | |||||||||||||||
Other comprehensive income | |||||||||||||||||
Unrealized investment gain related to noncontrolling interest | ( | ( | |||||||||||||||
Ending balance | $ | $ | ( | $ | ( | ||||||||||||
Amounts reclassified from AOCI | |||||||||||||||||
Pre-tax | $ | ( | (1) | $ | $ | ( | |||||||||||
Tax effect | (2) | ||||||||||||||||
After-tax amounts reclassified | $ | ( | $ | $ | ( | ||||||||||||
Other comprehensive income | |||||||||||||||||
Pre-tax | $ | $ | $ | ||||||||||||||
Tax effect | ( | ( | |||||||||||||||
Other comprehensive income | $ | $ | $ |
As of and for the nine months ended September 30, 2019 | |||||||||||||||||
Changes in AOCI | |||||||||||||||||
Beginning of period | $ | ( | $ | ( | $ | ( | |||||||||||
Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||
Amounts reclassified from AOCI | |||||||||||||||||
Other comprehensive income (loss) | ( | ||||||||||||||||
Unrealized investment loss related to noncontrolling interest | |||||||||||||||||
End of period | $ | $ | ( | $ | ( | ||||||||||||
Amounts reclassified from AOCI | |||||||||||||||||
Pre-tax | $ | (1) | $ | $ | |||||||||||||
Tax effect | ( | (2) | ( | ||||||||||||||
After-tax amounts reclassified | $ | $ | $ | ||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||
Pre-tax | $ | $ | ( | $ | |||||||||||||
Tax effect | ( | ( | |||||||||||||||
Other comprehensive income (loss) | $ | $ | ( | $ | |||||||||||||
As of and for the three months ended September 30, 2019 | |||||||||||||||||
Changes in AOCI | |||||||||||||||||
Beginning of period | $ | $ | ( | $ | ( | ||||||||||||
Other comprehensive loss before reclassifications | ( | ( | ( | ||||||||||||||
Amounts reclassified from AOCI | |||||||||||||||||
Other comprehensive loss | ( | ( | ( | ||||||||||||||
Unrealized investment loss related to noncontrolling interest | |||||||||||||||||
Ending balance | $ | $ | ( | $ | ( | ||||||||||||
Amounts reclassified from AOCI | |||||||||||||||||
Pre-tax | $ | (1) | $ | $ | |||||||||||||
Tax effect | ( | (2) | ( | ||||||||||||||
After-tax amounts reclassified | $ | $ | $ | ||||||||||||||
Other comprehensive loss | |||||||||||||||||
Pre-tax | $ | ( | $ | ( | $ | ( | |||||||||||
Tax effect | |||||||||||||||||
Other comprehensive loss | $ | ( | $ | ( | $ | ( |
(In thousands) | Amortized Cost | Allowance for Expected Credit Losses (1) | Gross Unrealized | Fair Value | Carrying Value | ||||||||||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||||||||||||||
Held to maturity: | |||||||||||||||||||||||||||||||||||
State and municipal | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Residential mortgage-backed | |||||||||||||||||||||||||||||||||||
Total held to maturity | ( | ||||||||||||||||||||||||||||||||||
Available for sale: | |||||||||||||||||||||||||||||||||||
U.S. government and government agency | ( | ||||||||||||||||||||||||||||||||||
State and municipal: | |||||||||||||||||||||||||||||||||||
Special revenue | ( | ||||||||||||||||||||||||||||||||||
State general obligation | |||||||||||||||||||||||||||||||||||
Pre-refunded | ( | ||||||||||||||||||||||||||||||||||
Corporate backed | ( | ||||||||||||||||||||||||||||||||||
Local general obligation | ( | ||||||||||||||||||||||||||||||||||
Total state and municipal | ( | ||||||||||||||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||||||||||||||
Residential | ( | ||||||||||||||||||||||||||||||||||
Commercial | ( | ||||||||||||||||||||||||||||||||||
Total mortgage-backed securities | ( | ||||||||||||||||||||||||||||||||||
Asset-backed | ( | ||||||||||||||||||||||||||||||||||
Corporate: | |||||||||||||||||||||||||||||||||||
Industrial | ( | ( | |||||||||||||||||||||||||||||||||
Financial | ( | ||||||||||||||||||||||||||||||||||
Utilities | ( | ||||||||||||||||||||||||||||||||||
Other | ( | ||||||||||||||||||||||||||||||||||
Total corporate | ( | ( | |||||||||||||||||||||||||||||||||
Foreign government | ( | ( | |||||||||||||||||||||||||||||||||
Total available for sale | ( | ( | |||||||||||||||||||||||||||||||||
Total investments in fixed maturity securities | $ | $ | ( | $ | $ | ( | $ | $ |
(In thousands) | Amortized Cost | Gross Unrealized | Fair Value | Carrying Value | |||||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||
Held to maturity: | |||||||||||||||||||||||||||||
State and municipal | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Residential mortgage-backed | |||||||||||||||||||||||||||||
Total held to maturity | |||||||||||||||||||||||||||||
Available for sale: | |||||||||||||||||||||||||||||
U.S. government and government agency | ( | ||||||||||||||||||||||||||||
State and municipal: | |||||||||||||||||||||||||||||
Special revenue | ( | ||||||||||||||||||||||||||||
State general obligation | ( | ||||||||||||||||||||||||||||
Pre-refunded | ( | ||||||||||||||||||||||||||||
Corporate backed | ( | ||||||||||||||||||||||||||||
Local general obligation | ( | ||||||||||||||||||||||||||||
Total state and municipal | ( | ||||||||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||||||||
Residential | ( | ||||||||||||||||||||||||||||
Commercial | ( | ||||||||||||||||||||||||||||
Total mortgage-backed securities | ( | ||||||||||||||||||||||||||||
Asset-backed | ( | ||||||||||||||||||||||||||||
Corporate: | |||||||||||||||||||||||||||||
Industrial | ( | ||||||||||||||||||||||||||||
Financial | ( | ||||||||||||||||||||||||||||
Utilities | ( | ||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||
Total corporate | ( | ||||||||||||||||||||||||||||
Foreign government | ( | ||||||||||||||||||||||||||||
Total available for sale | ( | ||||||||||||||||||||||||||||
Total investments in fixed maturity securities | $ | $ | $ | ( | $ | $ |
State and Municipal | |||||
(In thousands) | |||||
Allowance for expected credit losses at January 1, 2020 | $ | ||||
Cumulative effect adjustment resulting from changes in accounting principles | |||||
Provision for expected credit losses | |||||
Allowance for expected credit losses at September 30, 2020 | $ |
State and Municipal | |||||
(In thousands) | |||||
Allowance for expected credit losses at July 1, 2020 | $ | ||||
Provision for expected credit losses | ( | ||||
Allowance for expected credit losses at September 30, 2020 | $ |
Foreign Government | Corporate | Total | |||||||||||||||
(In thousands) | |||||||||||||||||
Allowance for expected credit losses at January 1, 2020 | $ | $ | $ | ||||||||||||||
Cumulative effect adjustment resulting from changes in accounting principles | |||||||||||||||||
Expected credit losses on securities for which credit losses were not previously recorded | |||||||||||||||||
Expected credit losses on securities for which credit losses were previously recorded | ( | ( | |||||||||||||||
Reduction due to disposals | ( | ( | ( | ||||||||||||||
Allowance for expected credit losses at September 30, 2020 | $ | $ | $ |
Foreign Government | Corporate | Total | |||||||||||||||
(In thousands) | |||||||||||||||||
Allowance for expected credit losses at July 1, 2020 | $ | $ | $ | ||||||||||||||
Expected credit losses on securities for which credit losses were not previously recorded | |||||||||||||||||
Expected credit losses on securities for which credit losses were previously recorded | ( | ( | ( | ||||||||||||||
Reduction due to disposals | ( | ( | ( | ||||||||||||||
Allowance for expected credit losses at September 30, 2020 | $ | $ | $ |
(In thousands) | Amortized Cost (1) | Fair Value | |||||||||
Due in one year or less | $ | $ | |||||||||
Due after one year through five years | |||||||||||
Due after five years through ten years | |||||||||||
Due after ten years | |||||||||||
Mortgage-backed securities | |||||||||||
Total | $ | $ |
(In thousands) | Cost | Gross Unrealized | Fair Value | Carrying Value | |||||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||||||||
Common stocks | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Preferred stocks | ( | ||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||
Common stocks | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Preferred stocks | ( | ||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Investment income earned on: | |||||||||||||||||||||||
Fixed maturity securities, including cash and cash equivalents and loans receivable | $ | $ | $ | $ | |||||||||||||||||||
Investment funds | |||||||||||||||||||||||
Arbitrage trading account | |||||||||||||||||||||||
Real estate | |||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||
Gross investment income | |||||||||||||||||||||||
Investment expense | ( | ( | ( | ( | |||||||||||||||||||
Net investment income | $ | $ | $ | $ |
Carrying Value as of | Income (Loss) from Investment Funds | ||||||||||||||||||||||
September 30, | December 31, | For the Nine Months Ended September 30, | |||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Real estate | $ | $ | $ | $ | |||||||||||||||||||
Financial services | |||||||||||||||||||||||
Energy | ( | ( | |||||||||||||||||||||
Transportation | ( | ||||||||||||||||||||||
Other funds | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Carrying Value | |||||||||||
September 30, | December 31, | ||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Properties in operation | $ | $ | |||||||||
Properties under development | |||||||||||
Total | $ | $ |
(In thousands) | September 30, 2020 | December 31, 2019 | |||||||||
Amortized cost (net of allowance for expected credit losses): | |||||||||||
Real estate loans | $ | $ | |||||||||
Commercial loans | |||||||||||
Total | $ | $ | |||||||||
Fair value: | |||||||||||
Real estate loans | $ | $ | |||||||||
Commercial loans | |||||||||||
Total | $ | $ | |||||||||
Real Estate Loans | Commercial Loans | Total | |||||||||||||||
(In thousands) | |||||||||||||||||
Allowance for expected credit losses at January 1, 2020 | $ | $ | $ | ||||||||||||||
Cumulative effect adjustment resulting from changes in accounting principles | ( | ( | |||||||||||||||
Provision for expected credit losses | |||||||||||||||||
Allowance for expected credit losses at September 30, 2020 | $ | $ | $ |
Real Estate Loans | Commercial Loans | Total | |||||||||||||||
(In thousands) | |||||||||||||||||
Allowance for expected credit losses at July 1, 2020 | $ | $ | $ | ||||||||||||||
Provision for expected credit losses | ( | ( | ( | ||||||||||||||
Allowance for expected credit losses at September 30, 2020 | $ | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Net investment gains (losses): | |||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||
Gains | $ | $ | $ | $ | |||||||||||||||||||
Losses | ( | ( | ( | ( | |||||||||||||||||||
Equity securities (1): | |||||||||||||||||||||||
Net realized (losses) gains on investment sales | ( | ( | |||||||||||||||||||||
Change in unrealized gains (losses) | ( | ||||||||||||||||||||||
Investment funds | ( | ( | |||||||||||||||||||||
Real estate | ( | ||||||||||||||||||||||
Loans receivable | ( | ||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||
Net realized and unrealized (losses) gains on investments in earnings before allowance for expected credit losses | ( | ( | |||||||||||||||||||||
Change in allowance for expected credit losses on investments (2): | |||||||||||||||||||||||
Fixed maturity securities | |||||||||||||||||||||||
Loans receivable | ( | ||||||||||||||||||||||
Change in allowance for expected credit losses on investments | |||||||||||||||||||||||
Net investment gains (losses) | ( | ||||||||||||||||||||||
Income tax (expense) benefit | ( | ( | ( | ||||||||||||||||||||
After-tax net investment gains (losses) | $ | $ | $ | ( | $ |
Change in unrealized investment gains (losses) on available for sale securities: | |||||||||||||||||||||||
Fixed maturity securities without allowance for expected credit losses | $ | $ | ( | $ | $ | ||||||||||||||||||
Fixed maturity securities with allowance for expected credit losses | |||||||||||||||||||||||
Investment funds | ( | ( | ( | ||||||||||||||||||||
Other | ( | ( | ( | ( | |||||||||||||||||||
Total change in unrealized investment gains (losses) | ( | ||||||||||||||||||||||
Income tax (expense) benefit | ( | ( | ( | ||||||||||||||||||||
Noncontrolling interests | ( | ( | |||||||||||||||||||||
After-tax change in unrealized investment gains (losses) of available for sale securities | $ | $ | ( | $ | $ |
Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||||||||||||||
(In thousands) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||||||||||||||
U.S. government and government agency | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
State and municipal | |||||||||||||||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||||||||||||||
Corporate | |||||||||||||||||||||||||||||||||||
Foreign government | |||||||||||||||||||||||||||||||||||
Fixed maturity securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||||||||
U.S. government and government agency | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
State and municipal | |||||||||||||||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||||||||||||||
Corporate | |||||||||||||||||||||||||||||||||||
Foreign government | |||||||||||||||||||||||||||||||||||
Fixed maturity securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
($ in thousands) | Number of Securities | Aggregate Fair Value | Gross Unrealized Loss | ||||||||||||||
Foreign government | $ | $ | |||||||||||||||
Corporate | |||||||||||||||||
Mortgage-backed securities | |||||||||||||||||
Total | $ | $ |
(In thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Fixed maturity securities available for sale: | |||||||||||||||||||||||
U.S. government and government agency | $ | $ | $ | $ | |||||||||||||||||||
State and municipal | |||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Corporate | |||||||||||||||||||||||
Foreign government | |||||||||||||||||||||||
Total fixed maturity securities available for sale | |||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||
Common stocks | |||||||||||||||||||||||
Preferred stocks | |||||||||||||||||||||||
Total equity securities | |||||||||||||||||||||||
Arbitrage trading account | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Trading account securities sold but not yet purchased | $ | $ | $ | $ | |||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Fixed maturity securities available for sale: | |||||||||||||||||||||||
U.S. government and government agency | $ | $ | $ | $ | |||||||||||||||||||
State and municipal | |||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Corporate | |||||||||||||||||||||||
Foreign government | |||||||||||||||||||||||
Total fixed maturity securities available for sale | |||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||
Common stocks | |||||||||||||||||||||||
Preferred stocks | |||||||||||||||||||||||
Total equity securities | |||||||||||||||||||||||
Arbitrage trading account | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Trading account securities sold but not yet purchased | $ | $ | $ | $ |
Gains (Losses) Included in: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | Beginning Balance | Earnings (Losses) | Other Comprehensive Income | Impairments | Purchases | (Sales) | Paydowns / Maturities | Transfers In / (Out) | Ending Balance | ||||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stocks | $ | $ | $ | $ | $ | $ | ( | $ | — | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Preferred stocks | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ( | $ | — | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed maturities securities available for sale: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset-backed securities | $ | $ | ( | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Total | ( | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stocks | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred stocks | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Arbitrage trading account | ( | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | $ | ( | $ | — | $ | $ | |||||||||||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Trading account securities sold but not yet purchased | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ |
September 30, | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Net reserves at beginning of period | $ | $ | |||||||||
Cumulative effect adjustment resulting from changes in accounting principles | |||||||||||
Restated net reserves at beginning of period | |||||||||||
Net provision for losses and loss expenses: | |||||||||||
Claims occurring during the current year (1) | |||||||||||
Increase in estimates for claims occurring in prior years (2) (3) | |||||||||||
Loss reserve discount accretion | |||||||||||
Total | |||||||||||
Net payments for claims: | |||||||||||
Current year | |||||||||||
Prior years | |||||||||||
Total | |||||||||||
Foreign currency translation | ( | ( | |||||||||
Net reserves at end of period | |||||||||||
Ceded reserves at end of period | |||||||||||
Gross reserves at end of period | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
(In thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Fixed maturity securities | $ | $ | $ | $ | |||||||||||||||||||
Equity securities | |||||||||||||||||||||||
Arbitrage trading account | |||||||||||||||||||||||
Loans receivable | |||||||||||||||||||||||
Cash and cash equivalents | |||||||||||||||||||||||
Trading account receivables from brokers and clearing organizations | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Due to broker | |||||||||||||||||||||||
Trading account securities sold but not yet purchased | |||||||||||||||||||||||
Subordinated debentures | |||||||||||||||||||||||
Senior notes and other debt |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Written premiums: | |||||||||||||||||||||||
Direct | $ | $ | $ | $ | |||||||||||||||||||
Assumed | |||||||||||||||||||||||
Ceded | ( | ( | ( | ( | |||||||||||||||||||
Total net premiums written | $ | $ | $ | $ | |||||||||||||||||||
Earned premiums: | |||||||||||||||||||||||
Direct | $ | $ | $ | $ | |||||||||||||||||||
Assumed | |||||||||||||||||||||||
Ceded | ( | ( | ( | ( | |||||||||||||||||||
Total net premiums earned | $ | $ | $ | $ | |||||||||||||||||||
Ceded losses and loss expenses incurred | $ | $ | $ | $ | |||||||||||||||||||
Ceded commissions earned | $ | $ | $ | $ |
(In thousands) | |||||
Allowance for expected credit losses at January 1, 2020 | $ | ||||
Cumulative effect adjustment resulting from changes in accounting principles | |||||
Provision for expected credit losses | |||||
Allowance for expected credit losses at September 30, 2020 | $ |
(In thousands) | |||||
Allowance for expected credit losses at July 1, 2020 | $ | ||||
Provision for expected credit losses | |||||
Allowance for expected credit losses at September 30, 2020 | $ |
(In thousands) | |||||
Allowance for expected credit losses at January 1, 2020 | $ | ||||
Cumulative effect adjustment resulting from changes in accounting principles | |||||
Provision for expected credit losses | |||||
Allowance for expected credit losses at September 30, 2020 | $ |
(In thousands) | |||||
Allowance for expected credit losses at July 1, 2020 | $ | ||||
Provision for expected credit losses | |||||
Allowance for expected credit losses at September 30, 2020 | $ |
($ in thousands) | Units | Fair Value | |||||||||
2020 | $ | ||||||||||
2019 | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Leases: | |||||||||||||||||||||||
Lease cost | $ | $ | $ | $ | |||||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities reported in operating cash flows | $ | $ | $ | $ | |||||||||||||||||||
Right-of-use assets obtained in exchange for new lease liabilities | $ | $ | $ | $ |
As of September 30, | |||||||||||
($ in thousands) | 2020 | 2019 | |||||||||
Right-of-use assets | $ | $ | |||||||||
Lease liabilities | $ | $ | |||||||||
Weighted-average remaining lease term | |||||||||||
Weighted-average discount rate | % | % |
(In thousands) | September 30, 2020 | ||||
Contractual Maturities: | |||||
2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
Thereafter | |||||
Total undiscounted future minimum lease payments | |||||
Less: Discount impact | ( | ||||
Total lease liability | $ |
Revenues | |||||||||||||||||||||||||||||||||||
(In thousands) | Earned Premiums (1) | Investment Income | Other | Total (2) | Pre-Tax Income (Loss) | Net Income (Loss) to Common Stockholders | |||||||||||||||||||||||||||||
Three months ended September 30, 2020 | |||||||||||||||||||||||||||||||||||
Insurance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Reinsurance & Monoline Excess | |||||||||||||||||||||||||||||||||||
Corporate, other and eliminations (3) | ( | ( | |||||||||||||||||||||||||||||||||
Net investment gains | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Three months ended September 30, 2019 | |||||||||||||||||||||||||||||||||||
Insurance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Reinsurance & Monoline Excess | |||||||||||||||||||||||||||||||||||
Corporate, other and eliminations (3) | ( | ( | |||||||||||||||||||||||||||||||||
Net investment gains | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Nine months ended September 30, 2020 | |||||||||||||||||||||||||||||||||||
Insurance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Reinsurance & Monoline Excess | |||||||||||||||||||||||||||||||||||
Corporate, other and eliminations (3) | ( | ( | |||||||||||||||||||||||||||||||||
Net investment losses | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Nine months ended September 30, 2019 | |||||||||||||||||||||||||||||||||||
Insurance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Reinsurance & Monoline Excess | |||||||||||||||||||||||||||||||||||
Corporate, other and eliminations (3) | ( | ( | |||||||||||||||||||||||||||||||||
Net investment gains | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
(In thousands) | September 30, 2020 | December 31, 2019 | |||||||||
Insurance | $ | $ | |||||||||
Reinsurance & Monoline Excess | |||||||||||
Corporate, other and eliminations | |||||||||||
Consolidated | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Insurance: | |||||||||||||||||||||||
Other liability | $ | $ | $ | $ | |||||||||||||||||||
Short-tail lines (1) | |||||||||||||||||||||||
Workers' compensation | |||||||||||||||||||||||
Commercial automobile | |||||||||||||||||||||||
Professional liability | |||||||||||||||||||||||
Total Insurance | |||||||||||||||||||||||
Reinsurance & Monoline Excess: | |||||||||||||||||||||||
Casualty reinsurance | |||||||||||||||||||||||
Monoline excess (2) | |||||||||||||||||||||||
Property reinsurance | |||||||||||||||||||||||
Total Reinsurance & Monoline Excess | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
(In thousands) | Frequency (+/-) | ||||||||||||||||
Severity (+/-) | 1% | 5% | 10% | ||||||||||||||
1% | $ | 81,566 | $ | 245,508 | $ | 450,437 | |||||||||||
5% | 245,508 | 415,944 | 628,988 | ||||||||||||||
10% | 450,437 | 628,988 | 852,178 |
(In thousands) | September 30, 2020 | December 31, 2019 | |||||||||
Insurance | $ | 8,800,434 | $ | 8,193,381 | |||||||
Reinsurance & Monoline Excess | 2,590,630 | 2,504,617 | |||||||||
Net reserves for losses and loss expenses | 11,391,064 | 10,697,998 | |||||||||
Ceded reserves for losses and loss expenses | 2,068,295 | 1,885,251 | |||||||||
Gross reserves for losses and loss expenses | $ | 13,459,359 | $ | 12,583,249 |
(In thousands) | Reported Case Reserves | Incurred But Not Reported | Total | ||||||||||||||
September 30, 2020 | |||||||||||||||||
Other liability | $ | 1,495,595 | $ | 2,754,905 | $ | 4,250,500 | |||||||||||
Workers’ compensation (1) | 956,982 | 905,652 | 1,862,634 | ||||||||||||||
Professional liability | 417,451 | 824,648 | 1,242,099 | ||||||||||||||
Commercial automobile | 427,154 | 355,200 | 782,354 | ||||||||||||||
Short-tail lines (2) | 303,236 | 359,611 | 662,847 | ||||||||||||||
Total Insurance | 3,600,418 | 5,200,016 | 8,800,434 | ||||||||||||||
Reinsurance & Monoline Excess (1) (3) | 1,454,609 | 1,136,021 | 2,590,630 | ||||||||||||||
Total | $ | 5,055,027 | $ | 6,336,037 | $ | 11,391,064 | |||||||||||
December 31, 2019 | |||||||||||||||||
Other liability | $ | 1,421,378 | $ | 2,522,957 | $ | 3,944,335 | |||||||||||
Workers’ compensation (1) | 918,619 | 964,102 | 1,882,721 | ||||||||||||||
Professional liability | 399,411 | 713,433 | 1,112,844 | ||||||||||||||
Commercial automobile | 412,036 | 300,339 | 712,375 | ||||||||||||||
Short-tail lines (2) | 271,192 | 269,914 | 541,106 | ||||||||||||||
Total Insurance | 3,422,636 | 4,770,745 | 8,193,381 | ||||||||||||||
Reinsurance & Monoline Excess (1) (3) | 1,469,363 | 1,035,254 | 2,504,617 | ||||||||||||||
Total | $ | 4,891,999 | $ | 5,805,999 | $ | 10,697,998 |
(In thousands) | 2020 | 2019 | |||||||||
Net increase in prior year loss reserves | $ | (849) | $ | (22,340) | |||||||
Increase in prior year earned premiums | 12,869 | 39,567 | |||||||||
Net favorable prior year development | $ | 12,020 | $ | 17,227 |
($ in thousands) | Number of Securities | Aggregate Fair Value | Gross Unrealized Loss | ||||||||||||||
Foreign government | 22 | $ | 91,413 | $ | 45,247 | ||||||||||||
Corporate | 13 | 28,816 | 6,343 | ||||||||||||||
Mortgage-backed securities | 8 | 1,659 | 34 | ||||||||||||||
Total | 43 | $ | 121,888 | $ | 51,624 |
($ in thousands) | Carrying Value | Percent of Total | |||||||||
Pricing source: | |||||||||||
Independent pricing services | $ | 13,638,784 | 98.7 | % | |||||||
Syndicate manager | 42,383 | 0.3 | |||||||||
Directly by the Company based on: | |||||||||||
Observable data | 139,362 | 1.0 | |||||||||
Total | $ | 13,820,529 | 100.0 | % |
($ in thousands) | 2020 | 2019 | |||||||||
Insurance: | |||||||||||
Gross premiums written | $ | 5,841,328 | $ | 5,565,862 | |||||||
Net premiums written | 4,754,791 | 4,601,077 | |||||||||
Net premiums earned | 4,481,092 | 4,396,071 | |||||||||
Loss ratio | 65.5 | % | 62.3 | % | |||||||
Expense ratio | 30.6 | % | 31.3 | % | |||||||
GAAP combined ratio | 96.1 | % | 93.6 | % | |||||||
Reinsurance & Monoline Excess: | |||||||||||
Gross premiums written | $ | 784,835 | $ | 663,279 | |||||||
Net premiums written | 710,189 | 601,894 | |||||||||
Net premiums earned | 636,161 | 520,436 | |||||||||
Loss ratio | 66.5 | % | 61.6 | % | |||||||
Expense ratio | 32.1 | % | 35.2 | % | |||||||
GAAP combined ratio | 98.6 | % | 96.8 | % | |||||||
Consolidated: | |||||||||||
Gross premiums written | $ | 6,626,163 | $ | 6,229,141 | |||||||
Net premiums written | 5,464,980 | 5,202,971 | |||||||||
Net premiums earned | 5,117,253 | 4,916,507 | |||||||||
Loss ratio | 65.6 | % | 62.2 | % | |||||||
Expense ratio | 30.8 | % | 31.7 | % | |||||||
GAAP combined ratio | 96.4 | % | 93.9 | % |
(In thousands, except per share data) | 2020 | 2019 | |||||||||
Net income to common stockholders | $ | 218,520 | $ | 562,638 | |||||||
Weighted average diluted shares | 189,515 | 193,557 | |||||||||
Net income per diluted share | $ | 1.15 | $ | 2.91 |
Amount | Average Annualized Yield | ||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Fixed maturity securities, including cash and cash equivalents and loans receivable | $ | 330,941 | $ | 386,978 | 2.9 | % | 3.5 | % | |||||||||||||||
Investment funds | 1,260 | 77,284 | 0.1 | 7.5 | |||||||||||||||||||
Arbitrage trading account | 51,985 | 26,184 | 12.4 | 8.0 | |||||||||||||||||||
Real estate | 18,807 | 17,468 | 1.2 | 1.1 | |||||||||||||||||||
Equity securities | 6,194 | 3,984 | 2.4 | 2.1 | |||||||||||||||||||
Gross investment income | 409,187 | 511,898 | 2.8 | 3.6 | |||||||||||||||||||
Investment expenses | (6,343) | (3,619) | — | — | |||||||||||||||||||
Total | $ | 402,844 | $ | 508,279 | 2.7 | % | 3.5 | % |
($ in thousands) | 2020 | 2019 | |||||||||
Policy acquisition and insurance operating expenses | $ | 1,574,507 | $ | 1,560,350 | |||||||
Insurance service expenses | 64,029 | 77,513 | |||||||||
Net foreign currency gains | (23,845) | (29,084) | |||||||||
Other costs and expenses | 138,451 | 152,182 | |||||||||
Total | $ | 1,753,142 | $ | 1,760,961 |
($ in thousands) | 2020 | 2019 | |||||||||
Insurance: | |||||||||||
Gross premiums written | $ | 1,981,816 | $ | 1,850,012 | |||||||
Net premiums written | 1,628,316 | 1,529,113 | |||||||||
Net premiums earned | 1,531,093 | 1,493,854 | |||||||||
Loss ratio | 64.4 | % | 61.8 | % | |||||||
Expense ratio | 29.7 | % | 31.2 | % | |||||||
GAAP combined ratio | 94.1 | % | 93.0 | % | |||||||
Reinsurance & Monoline Excess: | |||||||||||
Gross premiums written | $ | 280,729 | $ | 243,038 | |||||||
Net premiums written | 251,000 | 220,793 | |||||||||
Net premiums earned | 217,828 | 182,956 | |||||||||
Loss ratio | 59.1 | % | 64.6 | % | |||||||
Expense ratio | 31.2 | % | 33.7 | % | |||||||
GAAP combined ratio | 90.3 | % | 98.3 | % | |||||||
Consolidated: | |||||||||||
Gross premiums written | $ | 2,262,545 | $ | 2,093,050 | |||||||
Net premiums written | 1,879,316 | 1,749,906 | |||||||||
Net premiums earned | 1,748,921 | 1,676,810 | |||||||||
Loss ratio | 63.7 | % | 62.1 | % | |||||||
Expense ratio | 30.0 | % | 31.5 | % | |||||||
GAAP combined ratio | 93.7 | % | 93.6 | % | |||||||
(In thousands, except per share data) | 2020 | 2019 | |||||||||
Net income to common stockholders | $ | 151,678 | $ | 165,208 | |||||||
Weighted average diluted shares | 187,717 | 193,589 | |||||||||
Net income per diluted share | $ | 0.81 | $ | 0.85 |
Amount | Average Annualized Yield | ||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Fixed maturity securities, including cash and cash equivalents and loans receivable | $ | 97,080 | $ | 125,957 | 2.5 | % | 3.4 | % | |||||||||||||||
Investment funds | 18,235 | 19,033 | 6.2 | 5.7 | |||||||||||||||||||
Arbitrage trading account | 19,543 | 8,400 | 13.8 | 7.1 | |||||||||||||||||||
Real estate | 7,666 | 7,987 | 1.5 | 1.5 | |||||||||||||||||||
Equity securities | 1,907 | 1,392 | 2.2 | 2.1 | |||||||||||||||||||
Gross investment income | 144,430 | 162,769 | 2.9 | 3.4 | |||||||||||||||||||
Investment expenses | (1,780) | (1,077) | — | — | |||||||||||||||||||
Total | $ | 142,650 | $ | 161,692 | 2.8 | % | 3.4 | % |
($ in thousands) | 2020 | 2019 | |||||||||
Policy acquisition and insurance operating expenses | $ | 523,349 | $ | 528,399 | |||||||
Insurance service expenses | 21,034 | 26,171 | |||||||||
Net foreign currency losses (gains) | 5,078 | (22,590) | |||||||||
Other costs and expenses | 44,508 | 49,065 | |||||||||
Total | $ | 593,969 | $ | 581,045 |
($ in thousands) | Carrying Value | Percent of Total | |||||||||
Fixed maturity securities: | |||||||||||
U.S. government and government agencies | $ | 697,432 | 3.3 | % | |||||||
State and municipal: | |||||||||||
Special revenue | 2,305,308 | 11.0 | |||||||||
State general obligation | 429,652 | 2.1 | |||||||||
Pre-refunded | 285,224 | 1.4 | |||||||||
Corporate backed | 232,600 | 1.1 | |||||||||
Local general obligation | 438,272 | 2.1 | |||||||||
Total state and municipal | 3,691,056 | 17.7 | |||||||||
Mortgage-backed securities: | |||||||||||
Agency | 613,680 | 2.9 | |||||||||
Residential-Prime | 260,362 | 1.2 | |||||||||
Commercial | 206,025 | 1.0 | |||||||||
Residential-Alt A | 9,168 | — | |||||||||
Total mortgage-backed securities | 1,089,235 | 5.2 | |||||||||
Asset-backed securities | 3,306,439 | 15.9 | |||||||||
Corporate: | |||||||||||
Industrial | 2,326,598 | 11.2 | |||||||||
Financial | 1,524,636 | 7.3 | |||||||||
Utilities | 355,619 | 1.7 | |||||||||
Other | 32,687 | 0.2 | |||||||||
Total corporate | 4,239,540 | 20.3 | |||||||||
Foreign government and foreign government agencies | 869,344 | 4.2 | |||||||||
Total fixed maturity securities | 13,893,046 | 66.6 | |||||||||
Equity securities: | |||||||||||
Preferred stocks | 274,445 | 1.3 | |||||||||
Common stocks | 160,858 | 0.8 | |||||||||
Total equity securities | 435,303 | 2.1 | |||||||||
Cash and cash equivalents | 2,571,447 | 12.3 | |||||||||
Real estate | 2,106,474 | 10.1 | |||||||||
Investment funds | 1,163,707 | 5.6 | |||||||||
Arbitrage trading account | 595,727 | 2.9 | |||||||||
Loans receivable | 84,771 | 0.4 | |||||||||
Total investments | $ | 20,850,475 | 100.0 | % |
Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs | ||||||||||||||||||||
July 2020 | — | $ | — | — | 7,493,920 | ||||||||||||||||||
August 2020 | 84,288 | $ | 60.133 | 84,288 | 7,409,632 | ||||||||||||||||||
September 2020 | 132,476 | $ | 59.548 | 132,476 | 7,277,156 |
Number | ||||||||
Form of 2020 Performance-Based Restricted Stock Unit Agreement Under the W. R. Berkley Corporation 2018 Stock Incentive Plan | ||||||||
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/ 15d-14(a). | ||||||||
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/ 15d-14(a). | ||||||||
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||
W. R. BERKLEY CORPORATION | ||||||||
Date: | November 5, 2020 | /s/ W. Robert Berkley, Jr. | ||||||
W. Robert Berkley, Jr. | ||||||||
President and Chief Executive Officer | ||||||||
Date: | November 5, 2020 | /s/ Richard M. Baio | ||||||
Richard M. Baio | ||||||||
Executive Vice President Chief Financial Officer and Treasurer |
ROE Relative Performance* | ROE Relative Performance Vesting Percentage (% of Target)* | ||||
Less than +500 basis points | 0% | ||||
≥+500 basis points | 80.0% | ||||
≥+633 basis points | 90.0% | ||||
≥+766 basis points | 100.0% (target) | ||||
≥+900 basis points | 110.0% |
/s/ W. Robert Berkley, Jr. | |||||
W. Robert Berkley, Jr. | |||||
President and Chief Executive Officer |
/s/ Richard M. Baio | |||||
Richard M. Baio | |||||
Executive Vice President - Chief Financial Officer and Treasurer |
/s/ W. Robert Berkley, Jr. | ||
W. Robert Berkley, Jr. | ||
President and Chief Executive Officer | ||
/s/ Richard M. Baio | ||
Richard M. Baio | ||
Executive Vice President - Chief Financial Officer and Treasurer |
Consolidated Statements Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
REVENUES: | ||||
Net premiums written | $ 1,879,316 | $ 1,749,906 | $ 5,464,980 | $ 5,202,971 |
Change in net unearned premiums | (130,395) | (73,096) | (347,727) | (286,464) |
Net premiums earned | 1,748,921 | 1,676,810 | 5,117,253 | 4,916,507 |
Net investment income | 142,650 | 161,692 | 402,844 | 508,279 |
Net realized and unrealized (losses) gains on investments | (7,772) | 1,465 | (89,404) | 143,691 |
Change in allowance for expected credit losses on investments | 46,750 | 0 | 29,093 | 0 |
Net investment gains (losses) | 38,978 | 1,465 | (60,311) | 143,691 |
Revenues from non-insurance businesses | 87,495 | 101,880 | 256,966 | 283,005 |
Insurance service fees | 21,635 | 23,681 | 67,256 | 71,440 |
Other income | 140 | 188 | 2,446 | 3,200 |
Total revenues | 2,039,819 | 1,965,716 | 5,786,454 | 5,926,122 |
OPERATING COSTS AND EXPENSES: | ||||
Losses and loss expenses | 1,114,632 | 1,041,471 | 3,357,011 | 3,058,950 |
Other operating costs and expenses | 593,969 | 581,045 | 1,753,142 | 1,760,961 |
Expenses from non-insurance businesses | 85,036 | 101,743 | 256,032 | 280,141 |
Interest expense | 39,768 | 38,475 | 114,874 | 119,913 |
Total operating costs and expenses | 1,833,405 | 1,762,734 | 5,481,059 | 5,219,965 |
Income before income taxes | 206,414 | 202,982 | 305,395 | 706,157 |
Income tax expense | (54,048) | (37,831) | (84,900) | (141,965) |
Net income before noncontrolling interests | 152,366 | 165,151 | 220,495 | 564,192 |
Noncontrolling interests | (688) | 57 | (1,975) | (1,554) |
Net income to common stockholders | $ 151,678 | $ 165,208 | $ 218,520 | $ 562,638 |
NET INCOME PER SHARE: | ||||
Basic (in dollar per share) | $ 0.82 | $ 0.87 | $ 1.17 | $ 2.95 |
Diluted (in dollar per share) | $ 0.81 | $ 0.85 | $ 1.15 | $ 2.91 |
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income before noncontrolling interests | $ 152,366 | $ 165,151 | $ 220,495 | $ 564,192 |
Other comprehensive income (loss): | ||||
Change in unrealized currency translation adjustments | 40,194 | (36,682) | (36,553) | (31,414) |
Change in unrealized investment gains (losses), net of taxes | 38,273 | (24,745) | 98,016 | 219,679 |
Other comprehensive income (loss) | 78,467 | (61,427) | 61,463 | 188,265 |
Comprehensive income | 230,833 | 103,724 | 281,958 | 752,457 |
Noncontrolling interests | (685) | (66) | (1,973) | (1,659) |
Comprehensive income to common stockholders | $ 230,148 | $ 103,658 | $ 279,985 | $ 750,798 |
Consolidated Statements of Comprehensive Income |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Statements of Comprehensive Income | Consolidated Statements of Comprehensive Income The following table presents the components of the changes in accumulated other comprehensive (loss) income ("AOCI"):
____________ (1) Net investment gains (losses) in the consolidated statements of income. (2) Income tax expense in the consolidated statements of income.
|
Statements of Cash Flows |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Statements of Cash Flows | Statements of Cash Flows Interest payments were $126,932,000 and $145,930,000 for the nine months ended September 30, 2020 and 2019, respectively. Income taxes paid were $96,000,000 and $127,282,000 for the nine months ended September 30, 2020 and 2019, respectively. |
Net Investment Income |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Net Investment Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Investment Income | Net Investment Income Net investment income consisted of the following:
|
Consolidated Statements of Comprehensive Income (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of changes in accumulated other comprehensive income (loss) | The following table presents the components of the changes in accumulated other comprehensive (loss) income ("AOCI"):
____________ (1) Net investment gains (losses) in the consolidated statements of income. (2) Income tax expense in the consolidated statements of income.
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Net Investment Income (Tables) |
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Net Investment Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Investment Income | Net investment income consisted of the following:
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Net Investment Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Net Investment Income [Line Items] | ||||
Gross investment income | $ 144,430 | $ 162,769 | $ 409,187 | $ 511,898 |
Investment expense | (1,780) | (1,077) | (6,343) | (3,619) |
Net investment income | 142,650 | 161,692 | 402,844 | 508,279 |
Fixed maturity securities, including cash and cash equivalents and loans receivable | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 97,080 | 125,957 | 330,941 | 386,978 |
Investment funds | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 18,235 | 19,033 | 1,260 | 77,284 |
Arbitrage trading account | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 19,543 | 8,400 | 51,985 | 26,184 |
Real estate | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 7,666 | 7,987 | 18,807 | 17,468 |
Equity securities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | $ 1,907 | $ 1,392 | $ 6,194 | $ 3,984 |
General |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General The unaudited consolidated financial statements, which include the accounts of W. R. Berkley Corporation and its subsidiaries (the “Company”), have been prepared on the basis of U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all the information and notes required by GAAP for annual financial statements. The unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring items, which are necessary to present fairly the Company’s financial position and results of operations on a basis consistent with the prior audited consolidated financial statements. Operating results for interim periods are not necessarily indicative of the results that may be expected for the year. All significant intercompany accounts and transactions have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the revenues and expenses reflected during the reporting period. For further information related to areas of judgment and estimates and other information necessary to understand the Company’s financial position and results of operations, refer to the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The income tax provision has been computed based on the Company’s estimated annual effective tax rate. The effective income tax rate differs from the federal income tax rate of 21% principally because the utilization of losses in certain foreign jurisdictions was limited, which was partially offset by tax-exempt investment income and tax benefits related to equity-based compensation.
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Per Share Data |
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Per Share Data | Per Share Data The Company presents both basic and diluted net income per share (“EPS”) amounts. Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the period (including 7,575,168 and 7,389,781 common shares held in a grantor trust as of September 30, 2020 and 2019, respectively). The common shares held in the grantor trust are for delivery upon settlement of vested but mandatorily deferred restricted stock units ("RSUs"). Shares held by the grantor trust do not affect diluted shares outstanding since the shares deliverable under vested RSUs were already included in diluted shares outstanding. Diluted EPS is based upon the weighted average number of basic and common equivalent shares outstanding during the period and is calculated using the treasury stock method for stock incentive plans. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect. The weighted average number of common shares used in the computation of basic and diluted earnings per share was as follows:
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Recent Accounting Pronouncements and Accounting Policies |
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Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements and Accounting Policies | Recent Accounting Pronouncements and Accounting Policies Recently adopted accounting pronouncements: In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses, which amended the accounting guidance for credit losses on financial instruments. The updated guidance amended the then current other-than-temporary impairment model for available for sale debt securities by requiring the recognition of impairments relating to expected credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. This guidance also applies a new current expected credit loss model for determining credit-related impairments for financial instruments measured at amortized cost, such as reinsurance recoverables. The updated guidance was effective for reporting periods beginning after December 15, 2019. The adoption of this guidance on January 1, 2020 resulted in the recognition of an allowance for expected credit losses in connection with operating assets (premiums and fees receivable and due from reinsurers) of $5.7 million (net of tax) and a corresponding cumulative effect adjustment that decreased common stockholders' equity. Certain investments (primarily fixed maturity securities available for sale) established an allowance for expected credit loss of $24.8 million (net of tax), with a cumulative effect adjustment decreasing retained earnings by $24.8 million (net of tax) and increasing accumulated other comprehensive (loss) income ("AOCI") by $25.0 million (net of tax), resulting in $0.2 million net impact to total common stockholders' equity. All other accounting and reporting standards that have become effective in 2020 were either not applicable to the Company or their adoption did not have a material impact on the Company. Accounting and reporting standards that are not yet effective: All recently issued but not yet effective accounting and reporting standards are either not applicable to the Company or are not expected to have a material impact on the Company. Accounting policies: The following accounting policies have been updated to reflect the Company's adoption of Financial Instruments - Credit Losses as described above. Revenue recognition (related to premiums and fees receivable) Insurance premiums are recognized as written at the inception of the policy. Reinsurance premiums are estimated based upon information received from ceding companies, and subsequent differences from such estimates are recorded in the period they are determined. Insurance and reinsurance premiums are primarily earned on a pro rata basis over the policy term. Fees for services are earned over the period that the services are provided. Premiums and fees receivable are reported net of an allowance for expected credit losses with the allowance being estimated based on current and future expected conditions, historical loss data and specific identification of collectability concerns where applicable. Changes in the allowance are reported within other operating costs and expenses. Reinsurance ceded (related to due from reinsurers) The unearned portion of premiums ceded to reinsurers is reported as prepaid reinsurance premiums and earned ratably over the policy term. The estimated amounts of reinsurance recoverable on unpaid losses are reported as due from reinsurers. To the extent any reinsurer does not meet its obligations under reinsurance agreements, the Company must discharge its liability. Amounts due from reinsurers are reflected net of funds held where the right of offset is present. The Company has provided an allowance for expected credit losses for estimated uncollectible reinsurance. The allowance is estimated based on the composition of the recoverable balance, considering reinsurer credit ratings, collateral received from financial institutions and funds withheld arrangements, length of collection periods, probability of default methodology, and specific identification of collectability concerns. Changes in the allowance are reported within losses and loss expenses. Investments For available for sale securities in an unrealized loss position where the Company intends to sell, or it is more likely than not that it will be required to sell the security before recovery in value, the amortized cost basis is written down to fair value through net investment gains (losses). For available for sale securities in an unrealized loss position where the Company does not intend to sell, or it is more likely than not that it will not be required to sell the security before recovery in value, the Company evaluates whether the decline in fair value has resulted from credit losses or all other factors (non-credit factors). In making this assessment, the Company considers the extent to which fair value is less than amortized cost, changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, an allowance for expected credit losses is recorded for the credit loss through net investment gains (losses), limited by the amount that the fair value is less than the amortized cost basis. The allowance is adjusted for any change in expected credit losses and subsequent recoveries through net investment gains (losses). The impairment related to non-credit factors is recognized in other comprehensive income. For financial assets carried at amortized cost, which includes held to maturity securities and loans receivable, the Company estimates an allowance for expected credit losses based on relevant information about past events, including historical loss experience, current conditions and forecasts that affect the expected collectability of the amortized cost of the financial asset. The allowance for expected credit losses is presented as a reduction to amortized cost of the financial asset in the consolidated balance sheet and changes to the estimate for expected credit losses are recognized through net investment gains (losses). The Company’s credit assessment of allowance for expected credit losses uses a third party model for available for sale and held to maturity securities, as well as loans receivable. The allowance for expected credit losses is generally based on the performance of the underlying collateral under various economic and default scenarios that involve subjective judgments and estimates by management. Modeling these securities involves various factors, such as projected default rates, the nature and realizable value of the collateral, if any, the ability of the issuer to make scheduled payments, historical performance and other relevant economic and performance factors. A discounted cash flow analysis is used to ascertain the amount of the allowance for expected credit losses, if any. In general, the model reverts to the rating-level long-term average marginal default rates based on 10 years of historical data, beyond the forecast period. For other inputs, the model in most cases reverts to the baseline long-term assumptions linearly over 5 years beyond the forecast period. The long-term assumptions are based on the historical averages. The Company reports accrued investment income separately from fixed maturity securities, and has elected not to measure an allowance for expected credit losses for accrued investment income. Accrued investment income is written off through net investment income at the time the issuer of the bond defaults or is expected to default on payments.
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Investments In Fixed Maturity Securities |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments In Fixed Maturity Securities | Investments in Fixed Maturity Securities At September 30, 2020 and December 31, 2019, investments in fixed maturity securities were as follows:
____________ (1) Represents the amount of impairment that has resulted from credit-related factors. The change in the allowance for expected credit losses, excluding the cumulative effect adjustment resulting from changes in accounting principles, is recognized in the consolidated statements of income. Amount excludes unrealized losses relating to non-credit factors.
The following table presents the rollforward of the allowance for expected credit losses for held to maturity securities for the nine months ended September 30, 2020:
The following table presents the rollforward of the allowance for expected credit losses for held to maturity securities for the three months ended September 30, 2020:
The following table presents the rollforward of the allowance for expected credit losses for available for sale securities for the nine months ended September 30, 2020:
The following table presents the rollforward of the allowance for expected credit losses for available for sale securities for the three months ended September 30, 2020:
During the three and nine months ended September 30, 2020, the Company decreased the allowance for expected credit losses utilizing its credit loss assessment process and inputs used in its credit loss model, primarily due to the disposition of securities which previously had an allowance recorded. The amortized cost and fair value of fixed maturity securities at September 30, 2020, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay obligations.
________________ (1) Amortized cost is reduced by the allowance for expected credit losses of $871 thousand related to held to maturity securities. At September 30, 2020 and December 31, 2019, there were no investments that exceeded 10% of common stockholders' equity, other than investments in United States government and government agency securities.
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Investments in Equity Securities |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities, Available-for-sale [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Equity Securities | Investments in Fixed Maturity Securities At September 30, 2020 and December 31, 2019, investments in fixed maturity securities were as follows:
____________ (1) Represents the amount of impairment that has resulted from credit-related factors. The change in the allowance for expected credit losses, excluding the cumulative effect adjustment resulting from changes in accounting principles, is recognized in the consolidated statements of income. Amount excludes unrealized losses relating to non-credit factors.
The following table presents the rollforward of the allowance for expected credit losses for held to maturity securities for the nine months ended September 30, 2020:
The following table presents the rollforward of the allowance for expected credit losses for held to maturity securities for the three months ended September 30, 2020:
The following table presents the rollforward of the allowance for expected credit losses for available for sale securities for the nine months ended September 30, 2020:
The following table presents the rollforward of the allowance for expected credit losses for available for sale securities for the three months ended September 30, 2020:
During the three and nine months ended September 30, 2020, the Company decreased the allowance for expected credit losses utilizing its credit loss assessment process and inputs used in its credit loss model, primarily due to the disposition of securities which previously had an allowance recorded. The amortized cost and fair value of fixed maturity securities at September 30, 2020, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay obligations.
________________ (1) Amortized cost is reduced by the allowance for expected credit losses of $871 thousand related to held to maturity securities. At September 30, 2020 and December 31, 2019, there were no investments that exceeded 10% of common stockholders' equity, other than investments in United States government and government agency securities.
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Equity securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities, Available-for-sale [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Equity Securities | Investments in Equity Securities At September 30, 2020 and December 31, 2019, investments in equity securities were as follows:
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Arbitrage Trading Account |
9 Months Ended |
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Sep. 30, 2020 | |
Debt Securities, Trading, and Equity Securities, FV-NI [Abstract] | |
Arbitrage Trading Account | Arbitrage Trading Account At September 30, 2020 and December 31, 2019, the fair and carrying values of the arbitrage trading account were $596 million and $401 million, respectively. The primary focus of the trading account is merger arbitrage. Merger arbitrage is the business of investing in the securities of publicly held companies which are the targets in announced tender offers and mergers. Arbitrage investing differs from other types of investing in its focus on transactions and events believed likely to bring about a change in value over a relatively short time period (usually four months or less). The Company uses put options and call options in order to mitigate the impact of potential changes in market conditions on the merger arbitrage trading account. These options are reported at fair value. As of September 30, 2020, the fair value of long option contracts outstanding was $73 thousand (notional amount of $6.4 million) and the fair value of short option contracts outstanding was $77 thousand (notional amount of $11.4 million). Other than with respect to the use of these trading account securities, the Company does not make use of derivatives.
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Investment Funds |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Funds | Investment Funds The Company evaluates whether it is an investor in a variable interest entity ("VIE"). Such entities do not have sufficient equity at risk to finance their activities without additional subordinated financial support, or the equity investors, as a group, do not have the characteristics of a controlling financial interest (primary beneficiary). The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE's capital structure, contractual terms, nature of the VIE's operations and purpose, and the Company's relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE and on an ongoing basis. The Company is not the primary beneficiary in any of its investment funds, and accordingly, carries its interests in investment funds under the equity method of accounting. The Company’s maximum exposure to loss with respect to these investments is limited to the carrying amount reported on the Company’s consolidated balance sheet and its unfunded commitments, which were $136 million as of September 30, 2020. Investment funds consisted of the following:
The Company's share of the earnings or losses from investment funds is generally reported on a one-quarter lag in order to facilitate the timely completion of the Company's consolidated financial statements.
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Real Estate |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate | Real Estate Investment in real estate represents directly owned property held for investment, as follows:
As of September 30, 2020, properties in operation included a long-term ground lease in Washington, D.C., two office complexes in New York City, office buildings in West Palm Beach and Palm Beach, Florida, an office building in London, and the completed portion of a mixed-use project in Washington D.C.. Properties in operation are net of accumulated depreciation and amortization of $78,113,000 and $59,832,000 as of September 30, 2020 and December 31, 2019, respectively. Related depreciation expense was $19,818,000 and $8,871,000 for the nine months ended September 30, 2020 and 2019, respectively. Future minimum rental income expected on operating leases relating to properties in operation is $19,629,625 in 2020, $82,022,840 in 2021, $83,544,465 in 2022, $77,429,542 in 2023, $74,828,766 in 2024, $71,126,366 in 2025 and $672,867,459 thereafter. The Company borrowed $101,750,000 through a non-recourse loan secured by the West Palm Beach office building in 2018. The loan matures in November 2028 and carries a fixed interest rate of 4.21%. The carrying value does not reflect the outstanding financing, which is reflected within senior notes and other debt on the Company's consolidated balance sheet. A mixed-use project in Washington, D.C. has been under development in 2020 and 2019, with the completed portion reported in properties in operation as of September 30, 2020.
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Loans Receivable |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Receivable | Loans Receivable At September 30, 2020 and December 31, 2019, loans receivable were as follows:
The real estate loans are secured by commercial real estate primarily located in New York. These loans generally earn interest at floating LIBOR-based interest rates and have maturities (inclusive of extension options) through August 2025. The commercial loans are with small business owners who have secured the related financing with the assets of the business. Commercial loans primarily earn interest on a fixed basis and have varying maturities generally not exceeding 10 years. Loans receivable in non-accrual status were both $0.2 million as of September 30, 2020 and December 31, 2019. The following table presents the rollforward of the allowance for expected credit losses for loans receivable for the nine months ended September 30, 2020:
The following table presents the rollforward of the allowance for expected credit losses for loans receivable for the three months ended September 30, 2020:
The Company monitors the performance of its loans receivable and assesses the ability of the borrower to pay principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating performance of the property and market conditions. In evaluating the real estate loans, the Company considers their credit quality indicators, including loan to value ratios, which compare the outstanding loan amount to the estimated value of the property, the borrower’s financial condition and performance with respect to loan terms, the position in the capital structure, the overall leverage in the capital structure and other market conditions.
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Net Investment Gains (Losses) |
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Realized and Unrealized Investment Gains (Losses) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Investment Gains (Losses) | Net Investment Gains (Losses) Net investment gains (losses) were as follows:
______________________ (1) The net realized gains or losses on investment sales represent the total gains or losses from the purchase dates of the equity securities. The change in unrealized gains (losses) consists of two components: (i) the reversal of the gain or loss recognized in previous periods on equity securities sold and (ii) the change in unrealized gain or loss resulting from mark-to-market adjustments on equity securities still held. (2) The inclusion of the allowance for expected credit losses on investments commenced January 1, 2020 due to the adoption of ASU 2016-13. See Note 3 for more details.
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Fixed Maturity Securities In An Unrealized Loss Position |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed Maturity Securities In An Unrealized Loss Position | Fixed Maturity Securities in an Unrealized Loss Position The following tables summarize all fixed maturity securities in an unrealized loss position at September 30, 2020 and December 31, 2019 by the length of time those securities have been continuously in an unrealized loss position:
Substantially all of the securities in an unrealized loss position are rated investment grade, except for the securities in the foreign government classification. In general, fair value in all classifications were affected by market disruptions caused by COVID-19. A significant amount of the unrealized loss on foreign government securities is the result of changes in currency exchange rates. A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at September 30, 2020 is presented in the table below:
For fixed maturity securities that management does not intend to sell or to be required to sell, the portion of the decline in value that is considered to be due to credit factors is recognized in earnings, and the portion of the decline in value that is considered to be due to non-credit factors is recognized in other comprehensive income. The Company has evaluated its fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become due.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The Company’s fixed maturity available for sale securities, equity securities and its arbitrage trading account securities are carried at fair value. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 - Quoted prices for similar assets or valuations based on inputs that are observable. Level 3 - Estimates of fair value based on internal pricing methodologies using unobservable inputs. Unobservable inputs are only used to measure fair value to the extent that observable inputs are not available. Substantially all of the Company’s fixed maturity securities were priced by independent pricing services. The prices provided by the independent pricing services are estimated based on observable market data in active markets utilizing pricing models and processes, which may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, sector groupings, matrix pricing and reference data. The pricing services may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs are available for each security evaluation on any given day. The pricing services used by the Company have indicated that they will only produce an estimate of fair value if objectively verifiable information is available. The determination of whether markets are active or inactive is based upon the volume and level of activity for a particular asset class. The Company reviews the prices provided by pricing services for reasonableness and periodically performs independent price tests of a sample of securities to ensure proper valuation. If prices from independent pricing services are not available for fixed maturity securities, the Company estimates the fair value. For Level 2 securities, the Company utilizes pricing models and processes which may include benchmark yields, sector groupings, matrix pricing, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, bids, offers and reference data. Where broker quotes are used, the Company generally requests two or more quotes and sets a price within the range of quotes received based on its assessment of the credibility of the quote and its own evaluation of the security. The Company generally does not adjust quotes received from brokers. For securities traded only in private negotiations, the Company determines fair value based primarily on the cost of such securities, which is adjusted to reflect prices of recent placements of securities of the same issuer, financial projections, credit quality and business developments of the issuer and other relevant information. For Level 3 securities, the Company generally uses a discounted cash flow model to estimate the fair value of fixed maturity securities. The cash flow models are based upon assumptions as to prevailing credit spreads, interest rate and interest rate volatility, time to maturity and subordination levels. Projected cash flows are discounted at rates that are adjusted to reflect illiquidity, where appropriate. The following tables present the assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 by level:
The following tables summarize changes in Level 3 assets and liabilities for the nine months ended September 30, 2020 and for the year ended December 31, 2019:
For the nine months ended September 30, 2020, there were no securities transferred into or out of Level 3. For the year ended December 31, 2019, there were two common stocks transferred into Level 3 in the arbitrage trading account where publicly traded prices were no longer available, and both were sold by year end. Fair Value of Financial Instruments The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:
The estimated fair values of the Company’s fixed maturity securities, equity securities and arbitrage trading account securities are based on various valuation techniques that rely on fair value measurements as described in Note 15. The fair value of loans receivable are estimated by using current institutional purchaser yield requirements for loans with similar credit characteristics, which is considered a Level 2 input. The fair value of the senior notes and other debt and the subordinated debentures is based on spreads for similar securities, which is considered a Level 2 input. In October 2020, the Company redeemed $350 million aggregate principal amount of 5.625% subordinated debentures due 2053.
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Reserves for Loss and Loss Expenses |
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Reserves for Loss and Loss Expenses | Reserves for Loss and Loss Expenses The Company's reserves for losses and loss expenses are comprised of case reserves and incurred but not reported liabilities ("IBNR"). When a claim is reported, a case reserve is established for the estimated ultimate payment based upon known information about the claim. As more information about the claim becomes available over time, case reserves are adjusted up or down as appropriate. Reserves are also established on an aggregate basis to provide for IBNR liabilities and expected loss reserve development on reported claims. Loss reserves included in the Company’s financial statements represent management’s best estimates based upon an actuarially derived point estimate and other considerations. The Company uses a variety of actuarial techniques and methods to derive an actuarial point estimate for each operating unit. These methods include paid loss development, incurred loss development, paid and incurred Bornhuetter-Ferguson methods and frequency and severity methods. In circumstances where one actuarial method is considered more credible than the others, that method is used to set the point estimate. The actuarial point estimate may also be based on a judgmental weighting of estimates produced from each of the methods considered. Industry loss experience is used to supplement the Company’s own data in selecting “tail factors” in areas where the Company’s own data is limited. The actuarial data is analyzed by line of business, coverage and accident or policy year, as appropriate, for each operating unit. The establishment of the actuarially derived loss reserve point estimate also includes consideration of qualitative factors that may affect the ultimate losses. These qualitative considerations include, among others, the impact of re-underwriting initiatives, changes in the mix of business, changes in distribution sources and changes in policy terms and conditions. The key assumptions used to arrive at the best estimate of loss reserves are the expected loss ratios, rate of loss cost inflation, and reported and paid loss emergence patterns. Expected loss ratios represent management’s expectation of losses at the time the business is priced and written, before any actual claims experience has emerged. This expectation is a significant determinant of the estimate of loss reserves for recently written business where there is little paid or incurred loss data to consider. Expected loss ratios are generally derived from historical loss ratios adjusted for the impact of rate changes, loss cost trends and known changes in the type of risks underwritten. Expected loss ratios are estimated for each key line of business within each operating unit. Expected loss cost inflation is particularly important for the long-tail lines, such as excess casualty, and claims with a high medical component, such as workers’ compensation. Reported and paid loss emergence patterns are used to project current reported or paid loss amounts to their ultimate settlement value. Loss development factors are based on the historical emergence patterns of paid and incurred losses, and are derived from the Company’s own experience and industry data. The paid loss emergence pattern is also significant to excess and assumed workers’ compensation reserves because those reserves are discounted to their estimated present value based upon such estimated payout patterns. Loss frequency and severity are measures of loss activity that are considered in determining the key assumptions described in our discussion of loss and loss expense reserves, including expected loss ratios, rate of loss cost inflation and reported and paid loss emergence patterns. Loss frequency is a measure of the number of claims per unit of insured exposure, and loss severity is a measure of the average size of claims. Factors affecting loss frequency include the effectiveness of loss controls and safety programs and changes in economic activity or weather patterns. Factors affecting loss severity include changes in policy limits, retentions, rate of inflation and judicial interpretations. Another factor affecting estimates of loss frequency and severity is the loss reporting lag, which is the period of time between the occurrence of a loss and the date the loss is reported to the Company. The length of the loss reporting lag affects our ability to accurately predict loss frequency (loss frequencies are more predictable for lines with short reporting lags) as well as the amount of reserves needed for incurred but not reported losses (less IBNR is required for lines with short reporting lags). As a result, loss reserves for lines with short reporting lags are likely to have less variation from initial loss estimates. For lines with short reporting lags, which include commercial automobile, primary workers’ compensation, other liability (claims-made) and property business, the key assumption is the loss emergence pattern used to project ultimate loss estimates from known losses paid or reported to date. For lines of business with long reporting lags, which include other liability (occurrence), products liability, excess workers’ compensation and liability reinsurance, the key assumption is the expected loss ratio since there is often little paid or incurred loss data to consider. Historically, the Company has experienced less variation from its initial loss estimates for lines of businesses with short reporting lags than for lines of business with long reporting lags. The key assumptions used in calculating the most recent estimate of the loss reserves are reviewed each quarter and adjusted, to the extent necessary, to reflect the latest reported loss data, current trends and other factors observed. The table below provides a reconciliation of the beginning and ending reserve balances:
_______________________________________ (1) Claims occurring during the current year are net of loss reserve discounts of $8 million and $15 million for the nine months ended September 30, 2020 and 2019, respectively. (2) The change in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in prior years decreased by $19 million and increased by $12 million for the nine months ended September 30, 2020 and 2019, respectively. (3) For certain retrospectively rated insurance policies and reinsurance agreements, reserve development is offset by additional or return premiums. Favorable development, net of additional and return premiums, was $12 million and $17 million for the nine months ended September 30, 2020 and 2019, respectively. The ongoing COVID-19 global pandemic has impacted, and will likely continue to impact, the Company’s results through its effect on claim frequency and severity. Loss cost trends have been impacted and will likely be further impacted by COVID-19-related claims in certain lines of business, as well as by other effects of COVID-19 associated with economic conditions, inflation, and social distancing and work from home rules, for example. Although it is still too early to determine the net impact, it appears that the losses incurred due to COVID-19-related claims are being offset, to a certain extent, by lower claim frequency in certain lines of our businesses, including commercial auto, workers’ compensation, and other liability. However, given the continuing nature of the pandemic, the impact of COVID-19 could ultimately increase or decrease overall loss cost trends and is likely to have differing impacts on the Company's different lines of business. Most of the COVID-19-related claims reported to the Company to date involve certain short-tailed lines of business, including contingency and event cancellation, business interruption, and film production delay. The Company expects additional claims to be reported for these lines of business. The Company has also received COVID-19-related claims for longer-tailed casualty lines of business such as workers’ compensation and other liability; however, the estimated incurred loss impact for these reported claims appears to be modest at this time. Given the continuing uncertainty regarding the pandemic's pervasiveness and the time needed to develop widespread treatments and vaccines, and the related economic impacts, the future impact that the pandemic may have on claim frequency and severity remains uncertain at this time. In workers’ compensation, for example, nearly two-thirds of the states have enacted rules, legislation or administrative orders creating a presumption that certain “essential” workers who contract COVID-19 did so through the course of their employment. Several other states are considering similar actions, including varying the definition of “essential” workers. While the ultimate impact of these presumptions are unknown at this time, the Company believes that such state actions will likely increase workers’ compensation claims with respect to workers deemed “essential,” although this impact may be partially offset by lower workers’ compensation claim frequency with respect to non-essential workers. The Company has estimated the potential COVID-19 impact to its workers’ compensation, contingency and event cancellation, and other lines of business under a number of possible scenarios; however, due to COVID-19’s evolving impact and the still limited amount of available data, there remains a high degree of uncertainty around the Company’s COVID-19 reserves. In addition, several states (and international jurisdictions), through regulation, legislation and/or judicial action, continue to seek to expand policy coverage terms beyond the policy’s intended coverage, including, for example, but not limited to, property coverages, where there are attempts to extend business interruption coverage where there is no physical damage or loss to property, and attempts to disregard policy exclusions for communicable disease. Accordingly, losses arising from these actions, and the other factors described above, could exceed the Company’s reserves established for those related policies. For the nine months ended September 30, 2020, the Company has recognized losses for COVID-19-related claims activity, net of reinsurance, of approximately $143 million, of which $121 million relates to the Insurance segment and $22 million relates to the Reinsurance & Monoline Excess segment. Of the $143 million of COVID-19-related losses, $69 million are reported losses and $74 million is booked as IBNR. During the nine months ended September 30, 2020, favorable prior year development (net of additional and return premiums) of $12 million included $19 million of favorable development for the Insurance segment, partially offset by $7 million of adverse development for the Reinsurance & Monoline Excess segment. The overall favorable development for the Insurance segment was primarily attributable to favorable development on workers’ compensation business, partially offset by adverse development on professional liability business. The favorable workers’ compensation development was spread across many prior accident years, including prior to 2010, but was especially significant in accident year 2019. The favorable workers’ compensation development reflects a continuation of the benign loss cost trends experienced during recent years, particularly the favorable claim frequency trends. Our ongoing workers’ compensation claims management efforts, including active medical case management and use of networks and specialty vendors to control medical and pharmaceutical benefit costs, have also added to the favorable workers’ compensation prior year development. The adverse professional liability development was mainly concentrated in accident years 2016 through 2018 and was largely driven by higher than expected large losses being reported in the directors and officers and lawyers professional liability lines of business. The adverse development for the Reinsurance & Monoline Excess segment was mainly driven by non-proportional reinsurance assumed liability business written in the U.K. for accident years 2016 through 2018, partially offset by favorable development on excess workers’ compensation business. The adverse development was driven by a greater than expected number of reported large losses. During the nine months ended September 30, 2019, favorable prior year development (net of additional and return premiums) of $17 million included $18 million of favorable development for the Insurance segment, partially offset by $1 million of adverse development for the Reinsurance & Monoline Excess segment. The overall favorable development for the Insurance segment was primarily attributable to favorable development on workers’ compensation business, partially offset by adverse development on general liability, professional liability, and commercial auto liability business. The favorable workers’ compensation development was mainly attributable to accident years 2014 through 2018, and reflects a continuation of the benign loss cost trends experienced during recent years, particularly the favorable claim frequency trends (i.e., number of reported claims per unit of exposure). The adverse general liability development was mainly related to accident years 2015 through 2017 and was driven by a higher than expected number of large losses being reported in the period. The adverse professional liability development was mainly from accident years 2013 through 2016 and was driven by an increased frequency of large losses relating to lawyers professional and directors and officers liability. The adverse commercial auto liability development was primarily related to accident years 2015 through 2018 (with most in 2018), and was driven by a higher than expected number of large losses.
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Fair Value Of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Of Financial Instruments | Fair Value Measurements The Company’s fixed maturity available for sale securities, equity securities and its arbitrage trading account securities are carried at fair value. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 - Quoted prices for similar assets or valuations based on inputs that are observable. Level 3 - Estimates of fair value based on internal pricing methodologies using unobservable inputs. Unobservable inputs are only used to measure fair value to the extent that observable inputs are not available. Substantially all of the Company’s fixed maturity securities were priced by independent pricing services. The prices provided by the independent pricing services are estimated based on observable market data in active markets utilizing pricing models and processes, which may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, sector groupings, matrix pricing and reference data. The pricing services may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs are available for each security evaluation on any given day. The pricing services used by the Company have indicated that they will only produce an estimate of fair value if objectively verifiable information is available. The determination of whether markets are active or inactive is based upon the volume and level of activity for a particular asset class. The Company reviews the prices provided by pricing services for reasonableness and periodically performs independent price tests of a sample of securities to ensure proper valuation. If prices from independent pricing services are not available for fixed maturity securities, the Company estimates the fair value. For Level 2 securities, the Company utilizes pricing models and processes which may include benchmark yields, sector groupings, matrix pricing, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, bids, offers and reference data. Where broker quotes are used, the Company generally requests two or more quotes and sets a price within the range of quotes received based on its assessment of the credibility of the quote and its own evaluation of the security. The Company generally does not adjust quotes received from brokers. For securities traded only in private negotiations, the Company determines fair value based primarily on the cost of such securities, which is adjusted to reflect prices of recent placements of securities of the same issuer, financial projections, credit quality and business developments of the issuer and other relevant information. For Level 3 securities, the Company generally uses a discounted cash flow model to estimate the fair value of fixed maturity securities. The cash flow models are based upon assumptions as to prevailing credit spreads, interest rate and interest rate volatility, time to maturity and subordination levels. Projected cash flows are discounted at rates that are adjusted to reflect illiquidity, where appropriate. The following tables present the assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 by level:
The following tables summarize changes in Level 3 assets and liabilities for the nine months ended September 30, 2020 and for the year ended December 31, 2019:
For the nine months ended September 30, 2020, there were no securities transferred into or out of Level 3. For the year ended December 31, 2019, there were two common stocks transferred into Level 3 in the arbitrage trading account where publicly traded prices were no longer available, and both were sold by year end. Fair Value of Financial Instruments The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:
The estimated fair values of the Company’s fixed maturity securities, equity securities and arbitrage trading account securities are based on various valuation techniques that rely on fair value measurements as described in Note 15. The fair value of loans receivable are estimated by using current institutional purchaser yield requirements for loans with similar credit characteristics, which is considered a Level 2 input. The fair value of the senior notes and other debt and the subordinated debentures is based on spreads for similar securities, which is considered a Level 2 input. In October 2020, the Company redeemed $350 million aggregate principal amount of 5.625% subordinated debentures due 2053.
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Premiums and Reinsurance Related Information |
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Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premiums and Reinsurance Related Information | Premiums and Reinsurance Related Information The following is a summary of insurance and reinsurance financial information:
The following table presents the rollforward of the allowance for expected credit losses for premiums and fees receivable for the nine months ended September 30, 2020:
The following table presents the rollforward of the allowance for expected credit losses for premiums and fees receivable for the three months ended September 30, 2020:
The Company reinsures a portion of its insurance exposures in order to reduce its net liability on individual risks and catastrophe losses. The Company also cedes premiums to state assigned risk plans and captive insurance companies. Estimated amounts due from reinsurers are reported net of an allowance for expected credit losses. The following table presents the rollforward of the allowance for expected credit losses associated with due from reinsurers for the nine months ended September 30, 2020:
The following table presents the rollforward of the allowance for expected credit losses associated with due from reinsurers for the three months ended September 30, 2020:
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Restricted Stock Units |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | Restricted Stock Units Pursuant to its stock incentive plan, the Company may issue restricted stock units ("RSUs") to employees of the Company and its subsidiaries. The RSUs generally vest to five years from the award date and are subject to other vesting and forfeiture provisions contained in the award agreement. RSUs are expensed pro-ratably over the vesting period. RSU expenses were $35 million and $36 million for the nine months ended September 30, 2020 and 2019, respectively. A summary of RSUs issued in the nine months ended September 30, 2020 and 2019 follows:
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Litigation and Contingent Liabilities |
9 Months Ended |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation and Contingent Liabilities | Litigation and Contingent Liabilities In the ordinary course of business, the Company is subject to disputes, litigation and arbitration arising from its insurance and reinsurance businesses. These matters are generally related to insurance and reinsurance claims and are considered in the establishment of loss and loss expense reserves. In addition, the Company may also become involved in legal actions which seek extra-contractual damages, punitive damages or penalties, including claims alleging bad faith in handling of insurance claims. The Company expects its ultimate liability with respect to such matters will not be material to its financial condition. However, adverse outcomes on such matters are possible, from time to time, and could be material to the Company’s results of operations in any particular financial reporting period. |
Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Lessees are required to recognize a right-of-use asset and a lease liability for leases with terms of more than 12 months on the balance sheet. All leases disclosed within this footnote are classified as operating leases. Recognized right-of-use asset and lease liability are reported within other assets and other liabilities, respectively, in the consolidated balance sheet. Lease expense is reported in other operating costs and expenses in the consolidated statement of income and accounted for on a straight-line basis over the lease term. To determine the discount rate used to calculate present value of future minimum lease payments, the Company uses its incremental borrowing rate during the lease commencement period in line with the respective lease duration. In certain cases, the Company has the option to renew the lease. Lease renewal future payments are included in the present value of the future minimum lease payments when the Company determines it is reasonably certain to renew. The main leases entered into by the Company are for office space used by the Company’s operating units across the world. Additionally, the Company, to a lesser extent, has equipment leases mainly for office equipment. Further information relating to operating lease expense and other operating lease information are as follows:
Contractual maturities of the Company’s future minimum lease payments are as follows:
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Business Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | Business Segments The Company’s reportable segments include the following two business segments, plus a corporate segment: •Insurance - predominantly commercial insurance business, including excess and surplus lines, admitted lines and specialty personal lines throughout the United States, as well as insurance business in the United Kingdom, Continental Europe, South America, Canada, Mexico, Scandinavia, Asia and Australia. •Reinsurance & Monoline Excess - reinsurance business on a facultative and treaty basis, primarily in the United States, the United Kingdom, Continental Europe, Australia, the Asia-Pacific Region and South Africa, as well as operations that solely retain risk on an excess basis. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Income tax expense and benefits are calculated based upon the Company's overall effective tax rate. Summary financial information about the Company's reporting segments is presented in the following tables. Income (loss) before income taxes by segment includes allocated investment income. Identifiable assets by segment are those assets used in or allocated to the operation of each segment.
_________________ (1) Certain amounts included in earned premiums of each segment are related to inter-segment transactions. (2) Revenues for Insurance from foreign countries for the three months ended September 30, 2020 and 2019 were $183 million and $185 million, respectively, and for the nine months ended September 30, 2020 and 2019 were $500 million and $535 million, respectively. Revenues for Reinsurance & Monoline Excess from foreign countries for the three months ended September 30, 2020 and 2019 were $77 million and $65 million, respectively, and for the nine months ended September 30, 2020 and 2019 were $212 million and $186 million, respectively. (3) Corporate, other and eliminations represent corporate revenues and expenses that are not allocated to business segments. Identifiable Assets
Net premiums earned by major line of business are as follows:
______________ (1) Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery and other lines. (2) Monoline excess includes operations that solely retain risk on an excess basis.
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Recent Accounting Pronouncements and Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Per Share Data | Per Share Data The Company presents both basic and diluted net income per share (“EPS”) amounts. Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the period (including 7,575,168 and 7,389,781 common shares held in a grantor trust as of September 30, 2020 and 2019, respectively). The common shares held in the grantor trust are for delivery upon settlement of vested but mandatorily deferred restricted stock units ("RSUs"). Shares held by the grantor trust do not affect diluted shares outstanding since the shares deliverable under vested RSUs were already included in diluted shares outstanding. Diluted EPS is based upon the weighted average number of basic and common equivalent shares outstanding during the period and is calculated using the treasury stock method for stock incentive plans. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect |
Recent Accounting Pronouncements | Recent Accounting Pronouncements and Accounting Policies Recently adopted accounting pronouncements: In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses, which amended the accounting guidance for credit losses on financial instruments. The updated guidance amended the then current other-than-temporary impairment model for available for sale debt securities by requiring the recognition of impairments relating to expected credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. This guidance also applies a new current expected credit loss model for determining credit-related impairments for financial instruments measured at amortized cost, such as reinsurance recoverables. The updated guidance was effective for reporting periods beginning after December 15, 2019. The adoption of this guidance on January 1, 2020 resulted in the recognition of an allowance for expected credit losses in connection with operating assets (premiums and fees receivable and due from reinsurers) of $5.7 million (net of tax) and a corresponding cumulative effect adjustment that decreased common stockholders' equity. Certain investments (primarily fixed maturity securities available for sale) established an allowance for expected credit loss of $24.8 million (net of tax), with a cumulative effect adjustment decreasing retained earnings by $24.8 million (net of tax) and increasing accumulated other comprehensive (loss) income ("AOCI") by $25.0 million (net of tax), resulting in $0.2 million net impact to total common stockholders' equity. All other accounting and reporting standards that have become effective in 2020 were either not applicable to the Company or their adoption did not have a material impact on the Company. Accounting and reporting standards that are not yet effective: All recently issued but not yet effective accounting and reporting standards are either not applicable to the Company or are not expected to have a material impact on the Company.
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Per Share Data (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average number of common shares | The weighted average number of common shares used in the computation of basic and diluted earnings per share was as follows:
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Investments in Fixed Maturity Securities (Tables) |
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Schedule of investments in fixed maturity securities | At September 30, 2020 and December 31, 2019, investments in fixed maturity securities were as follows:
____________ (1) Represents the amount of impairment that has resulted from credit-related factors. The change in the allowance for expected credit losses, excluding the cumulative effect adjustment resulting from changes in accounting principles, is recognized in the consolidated statements of income. Amount excludes unrealized losses relating to non-credit factors.
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Debt Securities, Held-to-maturity, Allowance for Credit Loss | The following table presents the rollforward of the allowance for expected credit losses for held to maturity securities for the nine months ended September 30, 2020:
The following table presents the rollforward of the allowance for expected credit losses for held to maturity securities for the three months ended September 30, 2020:
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Debt Securities, Available-for-sale, Allowance for Credit Loss | The following table presents the rollforward of the allowance for expected credit losses for available for sale securities for the nine months ended September 30, 2020:
The following table presents the rollforward of the allowance for expected credit losses for available for sale securities for the three months ended September 30, 2020:
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Amortized cost and fair value of fixed maturity securities by contractual maturity | The amortized cost and fair value of fixed maturity securities at September 30, 2020, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay obligations.
________________ (1) Amortized cost is reduced by the allowance for expected credit losses of $871 thousand related to held to maturity securities.
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Investments in Equity Securities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities, Available-for-sale [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investments in Equity Securities | At September 30, 2020 and December 31, 2019, investments in equity securities were as follows:
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Investment Funds (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investment Funds | Investment funds consisted of the following:
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Real Estate (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Investments | Investment in real estate represents directly owned property held for investment, as follows:
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Loans Receivable Loans Receivable (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans Receivable | oans receivable were as follows:
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Financing Receivable, Allowance for Credit Loss | The following table presents the rollforward of the allowance for expected credit losses for loans receivable for the nine months ended September 30, 2020:
The following table presents the rollforward of the allowance for expected credit losses for loans receivable for the three months ended September 30, 2020:
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Net Investment Gains (Losses) (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized and Unrealized Investment Gains (Losses) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized And Unrealized Investment Gains (Losses) | Net investment gains (losses) were as follows:
______________________ (1) The net realized gains or losses on investment sales represent the total gains or losses from the purchase dates of the equity securities. The change in unrealized gains (losses) consists of two components: (i) the reversal of the gain or loss recognized in previous periods on equity securities sold and (ii) the change in unrealized gain or loss resulting from mark-to-market adjustments on equity securities still held. (2) The inclusion of the allowance for expected credit losses on investments commenced January 1, 2020 due to the adoption of ASU 2016-13. See Note 3 for more details.
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Fixed Maturity Securities In An Unrealized Loss Position (Tables) |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities in an unrealized loss position | The following tables summarize all fixed maturity securities in an unrealized loss position at September 30, 2020 and December 31, 2019 by the length of time those securities have been continuously in an unrealized loss position:
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Non-Investment Grade Fixed Maturity Securities | A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at September 30, 2020 is presented in the table below:
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets And Liabilities Measured At Fair value, On A Recurring Basis | The following tables present the assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 by level:
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Summarize Changes In Level 3 Assets | The following tables summarize changes in Level 3 assets and liabilities for the nine months ended September 30, 2020 and for the year ended December 31, 2019:
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Reserves for Loss and Loss Expenses (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserve Balances | The table below provides a reconciliation of the beginning and ending reserve balances:
_______________________________________ (1) Claims occurring during the current year are net of loss reserve discounts of $8 million and $15 million for the nine months ended September 30, 2020 and 2019, respectively. (2) The change in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in prior years decreased by $19 million and increased by $12 million for the nine months ended September 30, 2020 and 2019, respectively. (3) For certain retrospectively rated insurance policies and reinsurance agreements, reserve development is offset by additional or return premiums. Favorable development, net of additional and return premiums, was $12 million and $17 million for the nine months ended September 30, 2020 and 2019, respectively.
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Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amounts And Estimated Fair Values Of Financial Instruments | The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:
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Premiums and Reinsurance Related Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance Financial Information | The following is a summary of insurance and reinsurance financial information:
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Premium receivable, allowance for credit loss | The following table presents the rollforward of the allowance for expected credit losses for premiums and fees receivable for the nine months ended September 30, 2020:
The following table presents the rollforward of the allowance for expected credit losses for premiums and fees receivable for the three months ended September 30, 2020:
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Reinsurance Recoverable, Allowance for Credit Loss | The following table presents the rollforward of the allowance for expected credit losses associated with due from reinsurers for the nine months ended September 30, 2020:
The following table presents the rollforward of the allowance for expected credit losses associated with due from reinsurers for the three months ended September 30, 2020:
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Restricted Stock Units (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Restricted Stock Units Issued | A summary of RSUs issued in the nine months ended September 30, 2020 and 2019 follows:
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Leases (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | Further information relating to operating lease expense and other operating lease information are as follows:
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Supplemental Balance Sheet Information |
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Maturities of Operating Lease Liabilities | Contractual maturities of the Company’s future minimum lease payments are as follows:
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Business Segments (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information Of Company Operating Segments |
_________________ (1) Certain amounts included in earned premiums of each segment are related to inter-segment transactions. (2) Revenues for Insurance from foreign countries for the three months ended September 30, 2020 and 2019 were $183 million and $185 million, respectively, and for the nine months ended September 30, 2020 and 2019 were $500 million and $535 million, respectively. Revenues for Reinsurance & Monoline Excess from foreign countries for the three months ended September 30, 2020 and 2019 were $77 million and $65 million, respectively, and for the nine months ended September 30, 2020 and 2019 were $212 million and $186 million, respectively. (3) Corporate, other and eliminations represent corporate revenues and expenses that are not allocated to business segments
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Identifiable Assets By Segment |
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Net Premiums Earned By Major Line Of Business | Net premiums earned by major line of business are as follows:
______________ (1) Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery and other lines. (2) Monoline excess includes operations that solely retain risk on an excess basis.
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General (Details) |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Federal Income Tax Rate | 21.00% |
Per Share Data (Narrative) (Details) - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Earnings Per Share [Abstract] | ||
Weighted average number of shares held in grantor trust | 7,575,168,000 | 7,389,781 |
Per Share Data (Weighted Average Number of Common Shares Used In the Computation of Basic and Diluted Earnings per Share) (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Earnings Per Share [Abstract] | ||||
Basic (shares) | 185,765 | 190,862 | 187,338 | 190,593 |
Diluted (shares) | 187,717 | 193,589 | 189,515 | 193,557 |
Statements of Cash Flows (Details) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Supplemental Cash Flow Elements [Abstract] | ||
Interest payments | $ 126,932,000 | $ 145,930,000 |
Income taxes paid | $ 96,000,000 | $ 127,282,000 |
Investments in Fixed Maturity Securities (HTM Allowance for Credit Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2020 |
|
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward] | ||
Allowance for expected credit losses at January 1, 2020 | $ (948) | $ 0 |
Cumulative effect adjustment resulting from changes in accounting principles | 871 | 871 |
Provision for expected credit losses | (77) | 802 |
Allowance for expected credit losses at September 30, 2020 | $ 871 | 871 |
Cumulative effect adjustment resulting from changes in accounting principles | ||
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward] | ||
Allowance for expected credit losses at January 1, 2020 | 69 | |
Cumulative effect adjustment resulting from changes in accounting principles | $ 69 |
Arbitrage Trading Account (Details) - USD ($) |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivative [Line Items] | ||
Arbitrage trading account | $ 595,727,000 | $ 400,809,000 |
Long | Options held | ||
Derivative [Line Items] | ||
Fair value of derivative | 73,000 | |
Notional amount of derivative | 6,400,000 | |
Short | Options held | ||
Derivative [Line Items] | ||
Fair value of derivative | 77,000 | |
Notional amount of derivative | $ 11,400,000 |
Real Estate (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Real Estate [Abstract] | ||
Properties in operation | $ 1,651,343 | $ 1,351,249 |
Properties under development | 455,131 | 754,701 |
Total | $ 2,106,474 | $ 2,105,950 |
Real Estate (Narrative) (Details) - USD ($) |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Debt Instrument [Line Items] | |||
Accumulated depreciation and amortization on properties | $ 78,113,000 | $ 59,832,000 | |
Real estate depreciation expense | 19,818,000 | $ 8,871,000 | |
Lease future minimum payments 2020 | 19,629,625 | ||
Lease future minimum payments 2021 | 82,022,840 | ||
Lease future minimum payments 2022 | 83,544,465 | ||
Lease future minimum payments 2023 | 77,429,542 | ||
Lease future minimum payments 2024 | 74,828,766 | ||
Lease future minimum payments 2025 | 71,126,366 | ||
Lease future minimum payments there after | 672,867,459 | ||
Secured Debt | |||
Debt Instrument [Line Items] | |||
Fae value of debt | $ 101,750,000 | ||
Interest rate, percent | 4.21% |
Loans Receivable (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross | $ 84,771 | $ 91,799 |
Loans receivable | 86,530 | 94,613 |
Loans in nonaccrual status | 200 | 200 |
Real estate loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross | 52,089 | 58,541 |
Loans receivable | 53,848 | 59,853 |
Commercial loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross | 32,682 | 33,258 |
Loans receivable | $ 32,682 | $ 34,760 |
Loans receivable maturity term | 10 years |
Net Investment Gains (Losses) (Net Investment Gains (Losses)) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Fixed maturity securities, gains | $ 3,811 | $ 2,100 | $ 23,586 | $ 10,503 |
Fixed maturity securities, losses | (39,162) | (4,984) | (53,243) | (11,879) |
Net realized (losses) gains on investment sales | (176) | (11) | 5,551 | 23,328 |
Change in unrealized gains (losses) | 30,693 | 4,226 | (61,859) | 115,722 |
Investment funds | 203 | (456) | 31,299 | (398) |
Real estate | 3,841 | 417 | (3,983) | 6,184 |
Loans receivable | 0 | 0 | 0 | (970) |
Other | (6,982) | 173 | (30,755) | 1,201 |
Net realized and unrealized (losses) gains on investments in earnings before allowance for expected credit losses | (7,772) | 1,465 | (89,404) | 143,691 |
Fixed maturity securities | 43,874 | 0 | 33,147 | 0 |
Loans receivable | 2,876 | 0 | (4,054) | 0 |
Change in allowance for expected credit losses on investments | 46,750 | 0 | 29,093 | 0 |
Net investment gains (losses) | 38,978 | 1,465 | (60,311) | 143,691 |
Income tax (expense) benefit | (8,855) | (308) | 13,622 | (30,175) |
After-tax net investment gains (losses) | $ 30,123 | $ 1,157 | $ (46,689) | $ 113,516 |
Fair Value Measurements (Narrative) (Details) - USD ($) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Fair Value Disclosures [Abstract] | ||
Securities transferred into or out of level 3, net | $ 0 | |
Securities transferred into or out of level 3, net | $ 2 |
Reserves for Loss and Loss Expenses (Narrative) (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Net of loss reserve discounts | $ 8.0 | $ 15.0 |
Increase (decrease) in estimates for claims | 19.0 | (12.0) |
Adjustment expense | 12.0 | 17.0 |
Liability recognized for best estimate net of reinsurance | 143.0 | |
Liability recognized for best estimate net of reinsurance, reported losses | 69.0 | |
Liability recognized for best estimate net of reinsurance, incurred but not reported (IBNR) | 74.0 | |
Insurance | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Liability recognized for best estimate net of reinsurance | 121.0 | |
Favorable reserve development net of premium offsets | 19.0 | 18.0 |
Reinsurance & Monoline Excess | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Liability recognized for best estimate net of reinsurance | 22.0 | |
Unfavorable reserve development net of premium offsets | $ 7.0 | $ 1.0 |
Fair Value Of Financial Instruments Fair Value of Financial Instruments (Narrative) (Details) - Subordinated Debt - Subsequent Event |
1 Months Ended |
---|---|
Oct. 31, 2020
USD ($)
| |
Debt Instrument, Redemption [Line Items] | |
Subordinated debt, redemption price, amount | $ 350,000,000 |
Subordinated debt, redemption price, percentage | 5.625% |
Premiums and Reinsurance Related Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Written premiums: | ||||||
Written premiums, direct | $ 2,018,530 | $ 1,853,881 | $ 5,875,379 | $ 5,566,728 | ||
Written premiums, assumed | 244,015 | 239,169 | 750,784 | 662,412 | ||
Written premiums, ceded | (383,229) | (343,144) | (1,161,183) | (1,026,169) | ||
Total net premiums written | 1,879,316 | 1,749,906 | 5,464,980 | 5,202,971 | ||
Earned premiums: | ||||||
Earned premiums, direct | 1,877,234 | 1,797,726 | 5,511,791 | 5,294,773 | ||
Earned premiums, assumed | 237,815 | 209,094 | 699,025 | 595,946 | ||
Earned premiums, ceded | (366,128) | (330,010) | (1,093,563) | (974,212) | ||
Net premiums earned | 1,748,921 | 1,676,810 | 5,117,253 | 4,916,507 | ||
Ceded losses and loss expenses incurred | 209,706 | 172,009 | 677,761 | 584,323 | ||
Ceded commissions earned | 89,104 | $ 76,001 | 255,742 | $ 220,110 | ||
Cumulative effect adjustment resulting from changes in accounting principles | $ 7,741 | $ 7,741 | $ 7,175 | $ 690 |
Restricted Stock Units (Summary of Restricted Stock Units Issued) (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Share-Based Compensation Arrangement by Share-based Payment Award [Line Item] | ||
Share based compensation expense | $ 35,000 | $ 36,000 |
Restricted stock | ||
Share-Based Compensation Arrangement by Share-based Payment Award [Line Item] | ||
Restricted stock units (in units) | 953,519 | 839,263 |
Fair Value | $ 59,683 | $ 59,435 |
Minimum | Restricted stock | ||
Share-Based Compensation Arrangement by Share-based Payment Award [Line Item] | ||
Award vesting period | 3 years | |
Maximum | Restricted stock | ||
Share-Based Compensation Arrangement by Share-based Payment Award [Line Item] | ||
Award vesting period | 5 years |
Leases (Lease Cost) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Leases [Abstract] | ||||
Lease cost | $ 11,016 | $ 10,734 | $ 33,130 | $ 32,969 |
Cash paid for amounts included in the measurement of lease liabilities reported in operating cash flows | 11,560 | 11,241 | 33,869 | 34,030 |
Right-of-use assets obtained in exchange for new lease liabilities | $ 1,344 | $ 23,211 | $ 5,639 | $ 31,095 |
Leases (Supplemental Balance Sheet Information) (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Leases [Abstract] | ||
Operating lease, right-of-use asset | $ 172,473 | $ 194,553 |
Operating lease, liability | $ 211,808 | $ 226,291 |
Weighted-average remaining lease term | 6 years 8 months 12 days | 7 years 2 months 12 days |
Weighted-average discount rate | 5.93% | 5.97% |
Leases (Maturities of Operating Lease Liabilities) (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Leases [Abstract] | ||
Remainder of 2019 | $ 12,162 | |
2021 | 46,835 | |
2022 | 41,637 | |
2023 | 37,737 | |
2024 | 31,439 | |
Thereafter | 78,806 | |
Total undiscounted future minimum lease payments | 248,616 | |
Less: Discount impact | (36,808) | |
Total lease liability | $ 211,808 | $ 226,291 |
Business Segments (Identifiable Assets by Segment) (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Consolidated Assets | $ 28,212,370 | $ 26,630,030 |
Operating Segments | Insurance | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Consolidated Assets | 21,060,144 | 20,005,802 |
Operating Segments | Reinsurance & Monoline Excess | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Consolidated Assets | 4,697,249 | 4,710,819 |
Corporate, other and eliminations | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Consolidated Assets | $ 2,454,977 | $ 1,913,409 |
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