Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Company's Invested Assets and Derivative Instruments Measured at Fair Value on Recurring Basis

The following table presents information about the Company’s invested assets and derivative instruments measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value.

	Fair Value Measurements
As of September 30, 2019 (Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Fixed maturities:
U.S. treasury and agency obligations	$	165,482	$	—	$	—	$	165,482
Obligations of states and political subdivisions		—		56,032		—		56,032
Mortgage-backed securities		—		206,387		—		206,387
Commercial mortgage-backed securities		—		244,853		—		244,853
Asset-backed securities		—		183,362		—		183,362
Corporate bonds		—		274,738		—		274,738
Foreign corporate bonds		—		103,581		—		103,581
Total fixed maturities		165,482		1,068,953		—		1,234,435
Equity securities		262,367		—		—		262,367
Total assets measured at fair value (1)	$	427,849	$	1,068,953	$	—	$	1,496,802
Liabilities:
Derivative instruments	$	—	$	12,422	$	—	$	12,422
Total liabilities measured at fair value	$	—	$	12,422	$	—	$	12,422

(1) Excluded from the table above are limited partnerships of $40.1 million at September 30, 2019 whose fair value is based on net asset value as a practical expedient.

	Fair Value Measurements
As of December 31, 2018 (Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Fixed maturities:
U.S. treasury and agency obligations	$	78,855	$	—	$	—	$	78,855
Obligations of states and political subdivisions		—		95,613		—		95,613
Mortgage-backed securities		—		117,854		—		117,854
Commercial mortgage-backed securities		—		202,722		—		202,722
Asset-backed securities		—		183,754		—		183,754
Corporate bonds		—		440,855		—		440,855
Foreign corporate bonds		—		115,502		—		115,502
Total fixed maturities		78,855		1,156,300		—		1,235,155
Common stock		124,747		—		—		124,747
Total assets measured at fair value (1)	$	203,602	$	1,156,300	$	—	$	1,359,902
Liabilities:
Derivative instruments	$	—	$	4,062	$	—	$	4,062
Total liabilities measured at fair value	$	—	$	4,062	$	—	$	4,062

(1) Excluded from the table above are limited partnerships of $50.8 million at December 31, 2018 whose fair value is based on net asset value as a practical expedient.

Current Fair Value of Debt

For the Company’s material debt arrangements, the current fair value of the Company’s debt at September 30, 2019 and December 31, 2018 was as follows:

	September 30, 2019				December 31, 2018
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Margin Borrowing Facility	$	74,379	$	74,379	$	65,818	$	65,818
7.75% Subordinated Notes due 2045  (1)		96,833		99,913		96,742		92,261
7.875% Subordinated Notes due 2047 (2)		126,112		137,967		126,005		120,597
Total	$	297,324	$	312,259	$	288,565	$	278,676

(1) As of September 30, 2019 and December 31, 2018, the carrying value and fair value of the 7.75% Subordinated Notes due 2045 are net of unamortized debt issuance cost of $3.2 million and $3.3 million, respectively.

(2) As of September 30, 2019 and December 31, 2018, the carrying value and fair value of the 7.875% Subordinated Notes due 2047 are net of unamortized debt issuance cost of $3.9 million and $4.0 million, respectively.

Fair Value and Future Funding Commitments Related to These Investments

The following table provides the fair value and future funding commitments related to these investments at September 30, 2019 and December 31, 2018.

	September 30, 2019				December 31, 2018
(Dollars in thousands)	Fair Value		Future Funding Commitment		Fair Value		Future Funding Commitment
Real Estate Fund, LP  (1)	$	—	$	—	$	—	$	—
European Non-Performing Loan Fund, LP  (2)		14,732		14,214		17,893		14,214
Distressed Debt Fund, LP  (3)		25,320		29,001		32,860		20,500
Total	$	40,052	$	43,215	$	50,753	$	34,714

(1) This limited partnership invests in real estate assets through a combination of direct or indirect investments in partnerships, limited liability companies, mortgage loans, and lines of credit.  The Company does not have the contractual option to redeem its limited partnership interest but receives distributions based on the liquidation of the underlying assets.  The Company does not have the ability to sell or transfer its limited partnership interest without consent from the general partner. The Company continues to hold an investment in this limited partnership and has written the fair value down to zero.

(2) This limited partnership invests in distressed securities and assets through senior and subordinated, secured and unsecured debt and equity, in both public and private large-cap and middle-market companies.  The Company does not have the ability to sell or transfer its limited partnership interest without consent from the general partner.  The Company does not have the contractual option to redeem its limited partnership interest but receives distributions based on the liquidation of the underlying assets.  Based on the terms of the partnership agreement, the Company anticipates its interest in this partnership to be redeemed by 2020.

(3) This limited partnership invests in stressed and distressed securities and structured products.  The Company does not have the ability to sell or transfer its limited partnership interest without consent from the general partner.  The Company does not have the contractual option to redeem its limited partnership interest but receives distributions based on the liquidation of the underlying assets.  Based on the terms of the partnership agreement, the Company anticipates its interest to be redeemed no later than 2027.