10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2018

or

☐ Transitional Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from              to

Commission file number 0-15886

The Navigators Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	13-3138397
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
400 Atlantic Street, Stamford, Connecticut	06901
(Address of principal executive offices)	(Zip Code)

(203) 905-6090

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

The number of common shares outstanding as of July 27, 2018 was 29,765,245.

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

INDEX

Contents

PART I. FINANCIAL INFORMATION	3
Item 1.      Financial Statements	3
Consolidated Balance Sheets – June 30, 2018 (Unaudited) and December 31, 2017	3
Consolidated Statements of Income (Unaudited) – Three  and Six Months Ended June 30, 2018 and 2017	4
Consolidated Statements of Comprehensive Income  (Unaudited) – Three and Six Months Ended June 30, 2018 and 2017	5
Consolidated Statement of Stockholders’ Equity (Unaudited) –Six Months Ended June 30, 2018	6
Consolidated Statements of Cash Flows (Unaudited) – Six Months Ended June 30, 2018 and 2017	7
Notes to Interim Consolidated Financial Statements (Unaudited)	8
Item 2.      Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.      Quantitative and Qualitative Disclosures about Market Risk	56
Item 4.      Controls and Procedures	56
PART II. OTHER INFORMATION	58
Item 1.      Legal Proceedings	58
Item 1A.   Risk Factors	58
Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds	58
Item 3.      Defaults Upon Senior Securities	58
Item 4.      Mine Safety Disclosures	58
Item 5.      Other Information	58
Item 6.      Exhibits	59
Signatures	60

2

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2018			2017
amounts in thousands, except per share amounts	(Unaudited)
ASSETS
Investments:
Fixed Maturities, available-for-sale, at fair value (amortized cost: 2018:  $2,991,629;    2017: $3,027,408)	$	2,961,541		$	3,057,054
Equity Securities, at fair value (cost: 2018: $317,497; 2017: $224,159)		327,466			235,981
Other Invested Assets		38,372			30,488
Short-Term Investments, available-for-sale, at fair value (amortized cost: 2018: $6,368;    2017: $6,477)		6,368			6,480
Total Investments	$	3,333,747		$	3,330,003
Cash and Cash Equivalents		175,834			102,735
Restricted Cash and Cash Equivalents		47,522			56,229
Premiums Receivable		455,742			351,393
Prepaid Reinsurance Premiums		239,660			228,569
Reinsurance Recoverable on Paid Losses		94,503			72,494
Reinsurance Recoverable on Unpaid Losses and Loss Adjustment Expenses		799,084			809,765
Deferred Policy Acquisition Costs		157,153			135,249
Accrued Investment Income		20,276			19,480
Goodwill and Other Intangible Assets		28,272			6,596
Current Income Tax Receivable, Net		21,395			16,667
Deferred Income Tax, Net		24,552			22,271
Other Assets		91,205			73,171
Total Assets	$	5,488,945		$	5,224,622
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Reserves for Losses and Loss Adjustment Expenses	$	2,574,116		$	2,515,145
Unearned Premiums		1,125,731			987,681
Reinsurance Balances Payable		132,285			136,192
Senior Notes		263,967			263,885
Payable for Investments Purchased		45,800			—
Accounts Payable and Other Liabilities		112,962			95,754
Total Liabilities	$	4,254,861		$	3,998,657
Stockholders' Equity:
Preferred Stock ($.10 par value per share, authorized 1,000 shares, none issued)	$	—		$	—
Common Stock ($.10 par value per share, authorized 50,000 shares, issued    36,764 shares for 2018 and 36,530 shares for 2017)		3,673			3,650
Additional Paid-In Capital		376,705			376,868
Treasury Stock, at cost (7,023 shares for 2018 and 2017)		(155,801	)		(155,801	)
Retained Earnings		1,045,131			981,380
Accumulated Other Comprehensive Income (Loss)		(35,624	)		19,868
Total Stockholders' Equity	$	1,234,084		$	1,225,965
Total Liabilities and Stockholders' Equity	$	5,488,945		$	5,224,622

See accompanying Notes to Interim Consolidated Financial Statements.

3

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
amounts in thousands, except  per share amounts	2018			2017			2018			2017
Gross Written Premiums	$	497,236		$	452,179		$	992,460		$	902,484
Revenues:
Net Written Premiums		379,292			333,282			772,554			670,445
Change in Unearned Premiums		(48,277	)		(39,447	)		(118,912	)		(90,479	)
Net Earned Premiums	$	331,015		$	293,835		$	653,642		$	579,966
Net Investment Income		24,601			22,265			48,303			43,713
Net Realized and Unrealized Gains (Losses):
Total Other-Than-Temporary Impairment Losses		(18	)		29			(55	)		(1,048	)
Portion of Loss Recognized in Other Comprehensive    Income (Before Tax)		18			(29	)		55			(45	)
Net Other-Than-Temporary Impairment Losses Recognized    in Earnings		—			—			—			(1,093	)
Net Realized Gains on Investments Sold		1,787			1,694			2,956			2,743
Net Unrealized Gains (Losses) on Equity Securities at Fair   Value		1,329			—			(1,852	)		—
Total Net Realized and Unrealized Gains		3,116			1,694			1,104			1,650
Other Income (Loss)		2,628			(411	)		2,511			657
Total Revenues	$	361,360		$	317,383		$	705,560		$	625,986
Expenses:
Net Losses and Loss Adjustment Expenses	$	196,333		$	177,110		$	382,478		$	346,710
Commission Expenses		53,193			48,173			107,345			96,017
Other Operating Expenses		68,182			60,766			131,108			119,304
Interest Expense		3,864			3,861			7,728			7,722
Total Expenses	$	321,572		$	289,910		$	628,659		$	569,753
Income Before Income Taxes	$	39,788		$	27,473		$	76,901		$	56,233
Income Tax Expense		7,684			6,971			13,919			14,621
Net Income	$	32,104		$	20,502		$	62,982		$	41,612
Net Income per Common Share:
Basic	$	1.08		$	0.70		$	2.12		$	1.42
Diluted	$	1.07		$	0.69		$	2.09		$	1.39
Average Common Shares Outstanding:
Basic		29,733			29,470			29,664			29,377
Diluted		30,103			29,918			30,143			29,897
Cash Dividends Declared per Common Share	$	0.07		$	0.06		$	0.14		$	0.105

See accompanying Notes to Interim Consolidated Financial Statements.

4

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

	Three Months Ended June 30,
amounts in thousands	2018			2017
Net Income	$	32,104		$	20,502
Other Comprehensive Income (Loss):
Change in Net Unrealized Gains (Losses) on Available-For-Sale Investments:
Unrealized Gains (Losses) on Investments arising during the period, net    of Deferred Tax of $2,472 and $(7,907) in 2018 and 2017, respectively		(10,028	)		14,684
Reclassification adjustment for Net Realized (Losses) included    in Net Income net of Deferred Tax of $199 and $157 in 2018 and    2017, respectively		(809	)		(291	)
Change in Net Unrealized Gains (Losses) on Investments	$	(10,837	)	$	14,393
Change in Other-Than-Temporary Impairments
Non Credit Other-Than-Temporary Impairments arising during the period,    net of Deferred Tax of $4 and $(10) in 2018 and 2017, respectively		(14	)		19
Reclassification Adjustment for Other-Than-Temporary Impairment Credit    Losses Recognized in Net Income net of Deferred Tax of $0 in both 2018    and 2017		—			—
Change in Other-Than-Temporary Impairments	$	(14	)	$	19
Change in Foreign Currency Translation Gains (Losses), net of Deferred    Tax of $1,361 and $(423) in 2018 and 2017, respectively		(5,880	)		785
Other Comprehensive Income (Loss)	$	(16,731	)	$	15,197
Comprehensive Income	$	15,373		$	35,699

.

	Six Months Ended June 30,
amounts in thousands	2018			2017
Net Income	$	62,982		$	41,612
Other Comprehensive Income (Loss):
Change in Net Unrealized Gains (Losses) on Investments:
Unrealized Gains (Losses) on Investments arising during the period, net    of Deferred Tax of $11,856 and $(15,433) in 2018 and 2017, respectively		(44,399	)		28,661
Reclassification adjustment for Net Realized Gains (Losses) included    in Net Income net of Deferred Tax of $943 and $(215) in 2018 and    2017, respectively		(2,477	)		399
Change in Net Unrealized Gains (Losses) on Investments	$	(46,876	)	$	29,060
Change in Other-Than-Temporary Impairments
Non Credit Other-Than-Temporary Impairments arising during the period,    net of Deferred Tax of $16 and $(16) in 2018 and 2017, respectively		(44	)		29
Reclassification Adjustment for Other-Than-Temporary Impairment Credit    Losses Recognized in Net Income net of Deferred Tax of $0 and $(209) in    2018 and 2017, respectively		—			389
Change in Other-Than-Temporary Impairments	$	(44	)	$	418
Change in Foreign Currency Translation Gains (Losses), net of Deferred    Tax of $2,443 and $(280) in 2018 and 2017, respectively		(3,652	)		520
Other Comprehensive Income (Loss)	$	(50,572	)	$	29,998
Comprehensive Income	$	12,410		$	71,610

See accompanying Notes to Interim Consolidated Financial Statements

5

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)

					Additional											Accumulated Other			Total
	Common Stock				Paid-in			Treasury Stock					Retained			Comprehensive			Stockholders'
amounts in thousands	Shares		Amount		Capital			Shares		Amount			Earnings			Income (Loss)			Equity
Balance, December 31, 2017		36,530	$	3,650	$	376,868			7,023	$	(155,801	)	$	981,380		$	19,868		$	1,225,965
Net Income		—		—		—			—		—			62,982			—			62,982
Dividends Declared		—		—		—			—		—			(4,151	)		—			(4,151	)
Changes in Other Comprehensive Income:
Change in Net Unrealized Loss on Available-For-Sale    Investments		—		—		—			—		—			—			(46,876	)		(46,876	)
Change in Net Non-Credit Other-Than-    Temporary Impairment Losses		—		—		—			—		—			—			(44	)		(44	)
Change in Foreign Currency Translation    Loss		—		—		—			—		—			—			(3,652	)		(3,652	)
Total Other Comprehensive Loss		—		—		—			—		—			—			(50,572	)		(50,572	)
Cumulative Effect of Adoption of ASU 2016-01 at    January 1st, Net of Tax		—		—		—			—		—			7,748			(7,748	)		—
Cumulative Effect of Adoption of ASU 2018-02 at    January 1st, Net of Tax		—		—		—			—		—			(2,828	)		2,828			—
Shares Issued (1)		234		23		(6,134	)		—		—			—			—			(6,111	)
Share-Based Compensation		—		—		5,971			—		—			—			—			5,971
Balance, June 30, 2018		36,764	$	3,673	$	376,705			7,023	$	(155,801	)	$	1,045,131		$	(35,624	)	$	1,234,084

(1) - Includes shares issued under the Second Amended and Restated 2005 Stock Incentive Plan to Directors and the Employee Stock Purchase Plan.

See accompanying Notes to Interim Consolidated Financial Statements.

6

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Six Months Ended June 30,
amounts in thousands	2018			2017
Operating Activities:
Net Income	$	62,982		$	41,612
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation & Amortization		1,578			2,411
Share-Based Compensation		5,971			9,146
Deferred Income Taxes		(736	)		(10,793	)
Total Net Realized and Unrealized Gains		(1,104	)		(2,743	)
Net Other-Than-Temporary Impairments Recognized in Earnings		—			1,093
Changes in Assets And Liabilities:
Reinsurance Recoverable on Paid and Unpaid Losses and Loss Adjustment    Expenses		5,777			13,107
Reserves for Losses and Loss Adjustment Expenses		27,567			52,063
Prepaid Reinsurance Premiums		(8,629	)		(24,982	)
Unearned Premiums		127,861			115,511
Premiums Receivable		(106,326	)		(116,689	)
Deferred Policy Acquisition Costs		(21,991	)		(13,137	)
Accrued Investment Income		(805	)		(881	)
Reinsurance Balances Payable		(3,789	)		16,145
Current Income Tax Receivable, Net		(4,870	)		7,175
Other		(765	)		(16,134	)
Net Cash Provided by Operating Activities	$	82,721		$	72,904
Investing Activities:
Fixed Maturities
Redemptions and Maturities	$	258,931		$	165,690
Sales		271,804			95,240
Purchases		(499,956	)		(356,970	)
Equity Securities
Sales		28,757			39,487
Purchases		(76,419	)		(21,022	)
Net Sales and Purchases of Other Invested Assets		(8,591	)		(10,105	)
Net Sales, Maturities and Purchases of Short-Term Investments		32			(171	)
Net Change in Unsettled Security Transactions		43,475			12,028
Purchase of Subsidiaries, Net of Acquired Cash		(22,383	)		—
Net Purchase of Property and Equipment		(3,841	)		(2,098	)
Net Cash Used in Investing Activities	$	(8,191	)	$	(77,921	)
Financing Activities:
Proceeds from Employee Stock Purchase Plan	$	969		$	1,147
Payment of Employee Tax Withholding on Stock Compensation		(7,786	)		(13,189	)
Dividends Paid		(4,151	)		(3,092	)
Net Cash Used in Financing Activities	$	(10,968	)	$	(15,134	)
Effect of Exchange Rate on Unrestricted and Restricted Cash and Cash Equivalents	$	830		$	1,805
Change in Unrestricted and Restricted Cash and Cash Equivalents	$	64,392		$	(18,346	)
Unrestricted and Restricted Cash and Cash Equivalents at Beginning of Year		158,964			172,846
Unrestricted and Restricted Cash and Cash Equivalents at End of Period	$	223,356		$	154,500
Supplemental Information:
Income Taxes Paid, Net	$	19,349		$	21,445
Interest Paid	$	7,619		$	7,619
Issuance of Stock to Directors	$	783		$	578

See accompanying Notes to Interim Consolidated Financial Statements.

7

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Unaudited)

NOTE 1.  ORGANIZATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unless the context requires otherwise, the terms “we,” “us,” “our” or “our Company” are used to mean The Navigators Group, Inc., a Delaware holding company established in 1982, and its subsidiaries. The term “Parent Company” is used to mean The Navigators Group, Inc. without its subsidiaries.

Organization

We are an international insurance company with a long-standing area of specialization in Marine insurance. We also offer Property and Casualty (“P&C”) insurance, primarily general liability coverage and umbrella & excess liability coverage to commercial enterprises through our Primary and Excess Casualty divisions. We have also developed niches in Professional Liability insurance, through our Directors & Officers (“D&O”) and Errors & Omissions (“E&O”) divisions, as well as assumed reinsurance products.

We operate through various wholly-owned insurance and service companies. Our subsidiaries domiciled in the United States (“U.S.”) include two insurance companies, Navigators Insurance Company (“NIC”) and Navigators Specialty Insurance Company (“NSIC”), as well as our U.S. underwriting agency, Navigators Management Company (“NMC”). NIC includes a branch in the United Kingdom (“U.K”). We also have operations domiciled in the U.K., Hong Kong and Europe. Navigators International Insurance Company Ltd. (“NIIC”), Navigators Management (U.K.) Ltd. (“NMUK”) and Navigators Underwriting Ltd. (“NUL”) are domiciled in the U.K. and NUL includes European branches. Navigators Underwriting Agency Ltd. (“NUAL”), a Lloyd’s of London (“Lloyd’s”) underwriting agency, manages and provides the capital, through Navigators Corporate Underwriters Ltd. (“NCUL”), for our Lloyd’s Syndicate 1221 (the “Syndicate”), and is also domiciled in the U.K. We control 100% of the Syndicate’s stamp capacity.

On June 7, 2018, we acquired 100% ownership interest in Bracht, Deckers & Mackelbert NV, an insurance underwriting agency organized under the laws of Belgium (“BDM”) and Assurances Continentales – Continentale Verzekeringen NV, an insurance company licensed under the laws of Belgium (“ASCO”). The acquisition is being accounted for in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations.” Refer to Note 2. Business Combinations and Note 6. Goodwill and Intangible Assets for further information regarding the acquisition.

Basis of Presentation

The Consolidated Balance Sheet at June 30, 2018 and the Consolidated Statements of Income, Comprehensive Income, Stockholders’ Equity and Cash Flows for the periods ended June 30, 2018 and 2017 are unaudited. The Balance Sheet at December 31, 2017 is derived from our audited Financial Statements. The accompanying Interim Consolidated Financial Statements reflect all adjustments, which, in the opinion of management, are necessary to fairly present the results of our Company for the interim periods presented on the basis of U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All significant intercompany transactions and balances have been eliminated in consolidation. The preparation of these Financial Statements 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 reported revenues and expenses during the reporting periods. The results of operations for any interim period are not necessarily indicative of results for the full year. The Interim Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017. Certain amounts for the prior period have been reclassified to conform with the current period presentation.

Income Taxes

On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law and the new legislation contained several key tax provisions that affected us, including a one-time mandatory Deemed Repatriation Transition Tax (“Transition Tax”) on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We were required to recognize the effect of the tax law changes in the period of enactment, such as determining the Transition Tax, re-measuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), Income Tax Accounting Implications of the Tax Act, which allowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. During the fourth quarter of 2017, we made a reasonable estimate of the effects on our deferred tax balances and in relation to the Transition Tax. During the first half of 2018, we did not make any changes to this estimate; however we continue to gather additional information to more precisely compute these income tax impacts.  We expect to complete our analysis within the measurement period in accordance with SAB 118.

8

The interim income tax provision has been computed based on our estimated annual Effective Tax Rate, which represents our best estimate on a year to date basis for the interim period. As a result, the tax provision for a given quarter equals the difference between the provision recorded cumulatively year to date less the amount recorded cumulatively as of the end of the prior interim period. Our Effective Tax Rate for the quarter differs from the federal tax rate of 21% primarily due to tax-exempt investment income, the dividends received deduction and an excess tax benefit related to the vesting of stock compensation at fair market value.

Short-Term Investments Reclassifications

Cash and overseas deposits that were misclassified within Short-Term Investments were reclassified representing an immaterial correction. Cash of $20.5 million as of December 31, 2017 was reclassified from Short-Term Investments to Cash and Cash Equivalents. Overseas deposits of $28.8 million as of December 31, 2017 were reclassified from Short-Term Investments to Other Invested Assets. The reclassification of cash within Short-Term Investments to Cash and Cash Equivalents impacted the Statement of Cash Flows for the six months ended June 30, 2017 by increasing Net Cash Used in Investing Activities by $4.8 million.

New Accounting Standards Adopted in 2018

Revenue From Contracts With Customers

Effective January 1, 2018, our Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This guidance affects any contracts with customers to transfer goods or services or for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts are not in scope of the new guidance). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Our Company generates an insignificant amount of fee income that is within the scope of this guidance and was not materially impacted by the adoption of this guidance. The adoption of this guidance did not have a material impact on our results of operations, financial condition or liquidity.

Classification and Measurement of Financial Instruments

Effective January 1, 2018, our Company adopted ASU 2016-01 “Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities”. This guidance requires equity investments (except those accounted for under the equity method of accounting, investments that are consolidated or those that meet a practicability exception) to be measured at fair value with changes in fair value recognized in net income, simplifies the impairment assessment of equity investments without readily determinable values by requiring a qualitative assessment to identify impairment, eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost, requires the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liabilities in accordance with the fair value option, requires the separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and clarifies that the reporting organization should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the organization’s other deferred tax assets.

As of January 1, 2018, the adoption of this guidance resulted in a $7.7 million net after-tax increase to Retained Earnings with a corresponding decrease to Accumulated Other Comprehensive Income (Loss), resulting in no change to our Total Stockholders’ Equity. This adjustment reflects the cumulative effect adjustment to reclassify Net Unrealized Gain on Investments in Accumulated Other Comprehensive Income (Loss) for available-for-sale Equity Securities to Retained Earnings upon adoption. Upon the adoption of this guidance, Equity Securities have been measured at fair value with changes in fair value recognized in Net Income through Net Unrealized Gains (Losses) on Equity Securities at Fair Value. The other aspects of this guidance only impacted disclosure or did not apply to our Company and therefore did not impact our results of operations, financial condition or liquidity.

Cash Flows

Effective January 1, 2018, our Company adopted ASU 2016-15, “Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments” which addresses diversity in practice in how eight specific cash receipts and cash payments should be presented and classified on the statement of cash flows. The adoption of this guidance did not impact our results of operations, financial condition or liquidity.

9

Effective January 1, 2018, our Company adopted ASU 2016-18, “Statement of Cash Flows (Topic 230) – Restricted Cash” which addresses diversity in practice in the classification and presentation of changes in restricted cash on the statement of cash flows. This guidance requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Transfers between cash and cash equivalents and restricted cash and restricted cash equivalents will no longer be presented on the statement of cash flows. To assist in meeting the requirements of this guidance to provide a reconciliation from the Statement of Cash Flows to the Balance Sheet, upon adoption of this guidance our Company added new accounts titled “Cash and Cash Equivalents” and “Restricted Cash and Cash Equivalents” and reclassified amounts previously held in Short-Term Investments to these accounts for all periods presented. This resulted in the reclassification of $71.3 million of restricted and unrestricted cash and cash equivalent balances as of December 31, 2017. This guidance was adopted on a retrospective basis. Prior to the adoption of this guidance, restricted and unrestricted cash and cash equivalent balances included in the Short-Term Investments account had been presented as a cash flow provided by (used in) investing activities. Consequently, the Statement of Cash Flows for the six months ended June 30, 2017 includes a revision to increase “Net Cash Used in Investing Activities” by $18.1 million.

Income Taxes

Effective January 1, 2018, our Company adopted ASU 2016-16, “Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other than Inventory” that requires companies to account for the income tax effects of intercompany transfers of assets other than inventory when the transfer occurs. The adoption of this guidance did not impact our results of operations, financial condition or liquidity.

Definition of a Business

Effective January 1, 2018, our Company adopted ASU 2017-01, “Clarifying the Definition of a Business” that provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance will be applied to transactions prospectively. The adoption of this guidance did not impact our results of operations, financial condition or liquidity.

Tax Reform Reclassification from Other Comprehensive Income

Effective January 1, 2018, our Company early adopted ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” that permits entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings. The total impact of the remeasurement and other adjustments was reflected in 2017 income from continuing operations, regardless of where deferred taxes were originally recorded. As of January 1, 2018, the adoption of this guidance resulted in a one-time reclassification of $2.8 million, decreasing Retained Earnings and increasing Accumulated Other Comprehensive Income (Loss) primarily from the remeasurement of deferred tax assets and liabilities associated with unrealized gains and losses on investments and currency translation adjustments using the 21% corporate tax rate. 

Significant Accounting Policies

There were no notable changes in our significant accounting policies subsequent to our Annual Report on Form 10-K for the year ended December 31, 2017, with the exception of changes related to the adoption of ASU 2016-01 and ASU 2016-18 impacting the following accounting policies:

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Cash includes cash on hand and demand deposits with banks. Cash Equivalents include highly liquid investments with original maturities of three months or less including money-market funds. Restricted Cash and Cash Equivalents primarily relates to funds that are held to support regulatory and contractual obligations.

Investments

Fixed Maturities held by our Company were carried at fair value and classified as available-for-sale. Available-for-sale securities are debt securities not classified as either held-to-maturity securities or trading securities and are reported at fair value, with unrealized gains and losses excluded from earnings and reported in Accumulated Other Comprehensive Income (“AOCI”) as a separate component of Stockholders’ Equity. Fixed Maturities include bonds, mortgage-backed and asset-backed securities, and redeemable preferred stocks.  

Upon adoption of ASU 2016-01 on January 1, 2018, Equity Securities held by our Company were carried at fair value with any changes in fair value recognized in Net Income through the Net Unrealized Gains (Losses) on Equity Securities at Fair Value account. Prior to the adoption of ASU 2016-01, Equity Securities were carried at fair value and classified as available-for-sale. For our policy on Equity Securities classified as available-for-sale, refer to Note 1 within our Annual Report on Form 10-K for the year ended December 31, 2017. Equity Securities consist of common stock, exchange traded funds, mutual funds and preferred stock.

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Other Invested Assets consist of investments our Company made in certain strategic companies which are accounted for using the equity method of accounting and overseas deposits which are carried at fair value.

For our investments applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on our Company’s proportionate share of the net income or loss of the companies.  Changes in the carrying value of such investments are recorded in Other Income. In applying the equity method, we use the most recently available financial information provided by the companies which is generally three months prior to the end of the reporting period.

Overseas deposits include private funds held by the Syndicate and invested according to local regulatory requirements. The compositions of the overseas deposits vary and the deposits are based on the portfolio level reporting that is provided by Lloyd’s. The fair values of these overseas deposits were measured using the net asset value practical expedient and therefore have not been categorized within the fair value hierarchy. Changes in the fair value of the Overseas deposits are recorded in Net Investment Income.

Short-Term Investments are carried at fair value. Short-Term Investments have maturities greater than three months but less than one year from the purchase date.

All prices for our Fixed Maturities, Equity Securities and Short-Term Investments are classified as Level 1, Level 2 or Level 3 under the fair value hierarchy, as defined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 820 (“ASC 820”).  

Premiums and discounts on Fixed Maturities are amortized into interest income over the life of the security using the interest method.  For Mortgage-Backed and Asset-Backed Securities, anticipated prepayments and expected maturities are utilized in applying the interest rate method.  An effective yield is calculated based on projected principal cash flows at the time of original purchase.  The effective yield is used to amortize the purchase price of the security over the security’s expected life.  Book values are adjusted to reflect the amortization of premium or accretion of discount on a monthly basis. The projected principal cash flows are based on certain prepayment assumptions, which are generated using a prepayment model.  The prepayment model uses a number of factors to estimate prepayment activity including the current levels of interest rates (refinancing incentive), time of year (seasonality), economic activity (including housing turnover) and term and age of the underlying collateral (burnout, seasoning).  Prepayment assumptions associated with the Mortgage-Backed and Asset-Backed Securities are reviewed on a periodic basis.  When changes in prepayment assumptions are deemed necessary as the result of actual prepayments differing from anticipated prepayments, securities are revalued based upon the new prepayment assumptions utilizing the retrospective adjustment method, whereby the effective yield is recalculated to reflect actual payments to date and anticipated future payments.  The investment in such securities is adjusted to the amount that would have existed had the new effective yield been applied since the acquisition of the security.  Such adjustments, if any, are included in Net Investment Income for the current period.

Realized Gains and Losses on sales of investments are recognized when the related trades are executed and are determined on the basis of the specific identification method.

Impairment of Invested Assets

Management regularly reviews our Fixed Maturities portfolio to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of securities.

Our Company reviews the magnitude of a security’s unrealized loss compared to its cost/amortized cost and the length of time that the security has been impaired to determine if an unrealized loss is other-than-temporary. If warranted as a result of conditions relating to a particular security, our Company will also review securities with declines in fair value resulting from a headline news event involving the issuer, a headline news event involving the asset class, the advice of our external asset managers, or economic events that may impact the issuer to determine if an unrealized loss is other-than-temporary. The depth of analysis performed is dependent upon the nature and magnitude of the indicators of other-than-temporary impairment present in regards to each impaired security.

Our Company assesses the underlying fundamentals of each issuer to determine if there is a change in the amount or timing of expected cash flows. Management compares the amortized cost basis to the present value of the revised cash flows using the historical book yield to determine the credit loss portion of impairment which is recognized in earnings. All non-credit losses where we have the intent and ability to hold the security until recovery are recognized as changes in Other than Temporary Impairment (“OTTI”) losses within AOCI.

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Specifically for structured Fixed Maturities, our Company analyzes projections provided by our investment managers with respect to an expected principal loss under a range of scenarios and utilizes the most likely outcomes. The analysis relies on actual collateral performance measures such as default rate, prepayment rate and loss severity. These assumptions are applied throughout the remaining term of the deal, incorporating the transaction structure and priority of payments, to generate loss adjusted cash flows. Results of the analysis will indicate whether the security is expected ultimately to incur a loss or whether there is a material impact on yield due to either a projected loss or a change in cash flow timing. A break-even default rate is also calculated. A comparison of the break-even default rate to the actual default rate provides an indication of the level of cushion or coverage to the first dollar principal loss. For securities in which a tranche loss is present and the net present value of loss adjusted cash flows is less than book value, credit impairment is recognized in earnings. The output data also includes a number of additional metrics such as average life remaining, original and current credit support, over 60 day delinquency and security rating. The significant inputs used to measure the amount of credit loss recognized in earnings are actual delinquency rates, default probability, severity and prepayment assumptions.

Projected losses are a function of both loss severity and probability of default, which differ based on property type, vintage and the stress of the collateral.

For our policy on evaluating Equity Securities for impairment prior to the adoption of ASU 2016-01 on January 1, 2018, refer to Note 1 within our Annual Report on Form 10-K for the year ended December 31, 2017.

NOTE 2.  BUSINESS COMBINATIONS

On June 7, 2018 (the “acquisition date”), our Company acquired 100% ownership interest in BDM and ASCO. Our Company also acquired in this transaction a wholly-owned subsidiary of ASCO, Canal Re S.A., a reinsurance company licensed under the laws of the Grand Duchy of Luxembourg (“Canal Re”). The acquisition of all three of these entities will be referred to as (the “Acquisition”). The Acquisition was undertaken as part of our Company’s strategy of expanding to more brokers and insureds across Europe and reinforces our Company’s presence in the European Union’s single market. We anticipate that this will enable our Company to better serve its European clients after Brexit, and will also provide an opportunity for BDM and ASCO to reach a wider European audience.

Our Company paid a purchase price of EUR 35.0 million in cash at the acquisition date (which was approximately $40.5 million based on the exchange rate as of June 30, 2018). Additionally, our Company will be reimbursed up to EUR 5.0 million (which is approximately $5.8 million based on the exchange rate as of June 30, 2018) in the event of adverse development of claims incurred prior to December 31, 2016 as measured on December 31, 2019. This reimbursement was valued at $nil as of the acquisition date and June 30, 2018.

The purchase price was allocated to the assets acquired and liabilities assumed of BDM and ASCO based on estimated fair values as of the acquisition date and our Company recognized goodwill of $11.3 million.

Our Company identified finite lived intangible assets of $7.9 million, including customer relationships, the value of business acquired (“VOBA”), broker networks and trade name. These finite lived intangible assets will be amortized over a weighted average period of 12 years.

Our Company identified indefinite lived intangible assets of $2.5 million, related to ASCO’s European licenses.

12

The fair value of the assets acquired and liabilities assumed and the allocation of the purchase price on the acquisition date are summarized in the table below:

amounts in thousands	June 30, 2018
Consideration paid	$	40,492
Assets
Investments		45,182
Cash and Cash Equivalents		18,109
Prepaid Reinsurance Premiums		2,701
Reinsurance Recoverables on Paid Losses		1,311
Reinsurance Recoverables on Unpaid Losses and LAE		15,769
Other Assets		19,943
Fair Value of Identifiable Intangible Assets		10,391
Total Assets Acquired	$	113,406
Liabilities
Reserves for Losses and LAE		31,928
Unearned Premiums		11,139
Deferred Income Tax		8,947
Accounts Payable and Other Liabilities		32,212
Total Liabilities Assumed	$	84,226
Goodwill	$	11,312

Significant Fair Value Adjustments were as follows:

• Fair Value of Finite and Indefinite-Lived Intangibles – To establish the fair value of identifiable intangible assets related to customer relationships, licenses, value of business acquired, broker networks and trade name.

• Fair Value of Property – To adjust the carrying value of real estate property to reflect fair value.

• Fair Value of Software – To establish the fair value of internal use software systems.

• Deferred Income Tax – To reflect the deferred tax impact on the fair value adjustments.

• Goodwill – To establish the fair value of goodwill related to the Acquisition.

The business combination accounting is subject to change if additional information that existed as of the balance sheet date, but was not available, later becomes available within the measurement period, which cannot exceed twelve months from the acquisition date. The acquisition date fair values of the assets acquired and liabilities assumed, including Reserves for Losses and LAE, Deferred Income Tax and Identifiable Intangible Assets, as well as the related estimated useful lives, are provisional and may be subject to adjustments, which may impact the amounts recorded for assets acquired and liabilities assumed as well as the goodwill.

The amount of revenue and earnings of BDM and ASCO since the acquisition date has been immaterial.

NOTE 3.  SEGMENT INFORMATION

We report our results of operations consistent with the manner in which our Chief Operating Decision Maker reviews the business to assess performance through our reporting segments: U.S. Insurance, International Insurance (“Int’l Insurance”), Global Reinsurance (“GlobalRe”) and Corporate. 

We classify our business into three underwriting segments: U.S. Insurance, Int’l Insurance and GlobalRe.  Both the U.S. Insurance and Int’l Insurance reporting segments are each comprised of three operating segments: Marine, P&C and Professional Liability. The underwriting results of the acquired business from BDM and ASCO are included in the Int’l Insurance reporting segment, with no new operating segments resulting from the acquisition.

We evaluate the performance of each of the underwriting segments based on underwriting results.  Underwriting results are measured based on Underwriting Profit or Loss and the related Combined Ratio, which are both measures of underwriting profitability.   Underwriting Profit (Loss) is calculated from Net Earned Premiums less the sum of Net Losses and Loss Adjustment Expenses (“LAE”), Commission Expenses, Other Operating Expenses and Other Underwriting Income (Expense).  The Combined Ratio is derived by dividing the sum of Net Losses and LAE, Commission Expenses, Other Operating Expenses and Other Underwriting

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Income (Expense) by Net Earned Premiums.  A Combined Ratio of less than 100% indicates an Underwriting Profit and greater than 100% indicates an Underwriting Loss.  Our underwriting performance is evaluated separately from the rest of our operations.  

The performance of our investment portfolios, our liquidity and capital resource needs, our foreign currency exposure and our tax planning strategies are evaluated on a consolidated basis within our Corporate segment. We do not allocate our assets by underwriting segment as we evaluate the underwriting results of these segments separately from the results of our investments portfolio.

Financial data by segment for the three and six months ended June 30, 2018 and 2017 was as follows:

	Three Months Ended June 30, 2018
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	179,746		$	92,071		$	59,198		$	—		$	331,015
Net Losses and LAE		(111,885	)		(52,304	)		(32,144	)		—			(196,333	)
Commission Expenses		(20,382	)		(19,863	)		(13,148	)		200			(53,193	)
Other Operating Expenses		(38,447	)		(23,299	)		(6,436	)		—			(68,182	)
Other Underwriting Income (Expense)		71			—			136			(200	)		7
Underwriting Profit (Loss)	$	9,103		$	(3,395	)	$	7,606		$	—		$	13,314
Net Investment Income											24,601			24,601
Total Net Realized and Unrealized Gains											3,116			3,116
Interest Expense											(3,864	)		(3,864	)
Other Income											2,621			2,621
Income (Loss) Before Income Taxes	$	9,103		$	(3,395	)	$	7,606		$	26,474		$	39,788
Income Tax Expense											(7,684	)		(7,684	)
Net Income													$	32,104
Losses and LAE Ratio		62.2	%		56.8	%		54.3	%					59.3	%
Commission Expense Ratio		11.3	%		21.6	%		22.2	%					16.1	%
Other Operating Expense Ratio (2)		21.4	%		25.3	%		10.7	%					20.6	%
Combined Ratio		94.9	%		103.7	%		87.2	%					96.0	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

	Three Months Ended June 30, 2017
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	167,087		$	82,100		$	44,648		$	—		$	293,835
Net Losses and LAE		(105,270	)		(44,095	)		(27,745	)		—			(177,110	)
Commission Expenses		(20,460	)		(19,001	)		(8,970	)		258			(48,173	)
Other Operating Expenses		(33,140	)		(22,506	)		(5,120	)		—			(60,766	)
Other Underwriting Income (Expense)		100			—			169			(258	)		11
Underwriting Profit (Loss)		8,317			(3,502	)		2,982		$	—			7,797
Net Investment Income											22,265			22,265
Total Net Realized and Unrealized Gains											1,694			1,694
Interest Expense											(3,861	)		(3,861	)
Other Loss											(422	)		(422	)
Income (Loss) Before Income Taxes	$	8,317		$	(3,502	)	$	2,982		$	19,676		$	27,473
Income Tax Expense											(6,971	)		(6,971	)
Net Income													$	20,502
Losses and LAE Ratio		63.0	%		53.7	%		62.1	%					60.3	%
Commission Expense Ratio		12.2	%		23.1	%		20.1	%					16.4	%
Other Operating Expense Ratio (2)		19.8	%		27.5	%		11.1	%					20.6	%
Combined Ratio		95.0	%		104.3	%		93.3	%					97.3	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

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	Six Months Ended June 30, 2018
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	352,659		$	185,281		$	115,702		$	—		$	653,642
Net Losses and LAE		(222,307	)		(98,147	)		(62,024	)		—			(382,478	)
Commission Expenses		(41,243	)		(39,619	)		(26,916	)		433			(107,345	)
Other Operating Expenses		(75,438	)		(43,829	)		(11,841	)		—			(131,108	)
Other Underwriting Income (Expense)		169			—			274			(433	)		10
Underwriting Profit	$	13,840		$	3,686		$	15,195		$	—		$	32,721
Net Investment Income											48,303			48,303
Total Net Realized and Unrealized Gains											1,104			1,104
Interest Expense											(7,728	)		(7,728	)
Other Income											2,501			2,501
Income Before Income Taxes	$	13,840		$	3,686		$	15,195		$	44,179		$	76,901
Income Tax Expense											(13,919	)		(13,919	)
Net Income													$	62,982
Losses and LAE Ratio		63.0	%		53.0	%		53.6	%					58.5	%
Commission Expense Ratio		11.7	%		21.4	%		23.3	%					16.4	%
Other Operating Expense Ratio (2)		21.4	%		23.6	%		10.0	%					20.1	%
Combined Ratio		96.1	%		98.0	%		86.9	%					95.0	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

	Six Months Ended June 30, 2017
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	331,091		$	166,186		$	82,689		$	—		$	579,966
Net Losses and LAE		(204,096	)		(94,800	)		(47,814	)		—			(346,710	)
Commission Expenses		(40,844	)		(38,234	)		(17,462	)		523			(96,017	)
Other Operating Expenses		(66,612	)		(42,299	)		(10,393	)		—			(119,304	)
Other Underwriting Income (Expense)		210			—			345			(523	)		32
Underwriting Profit (Loss)	$	19,749		$	(9,147	)	$	7,365		$	—		$	17,967
Net Investment Income											43,713			43,713
Total Net Realized and Unrealized Gains											1,650			1,650
Interest Expense											(7,722	)		(7,722	)
Other Income											625			625
Income (Loss) Before Income Taxes	$	19,749		$	(9,147	)	$	7,365		$	38,266		$	56,233
Income Tax Expense											(14,621	)		(14,621	)
Net Income													$	41,612
Losses and LAE Ratio		61.6	%		57.0	%		57.8	%					59.8	%
Commission Expense Ratio		12.3	%		23.0	%		21.1	%					16.6	%
Other Operating Expense Ratio (2)		20.1	%		25.5	%		12.2	%					20.5	%
Combined Ratio		94.0	%		105.5	%		91.1	%					96.9	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

15

Revenue by operating segment for the three and six months ended June 30, 2018 and 2017 was as follows:

	Three Months Ended June 30, 2018									Three Months Ended June 30, 2017									% Change
amounts in thousands	Gross Written Premiums		Ceded Written Premiums			NetWritten Premiums		Net Earned Premiums		Gross Written Premiums		Ceded Written Premiums			Net Written Premiums		Net Earned Premiums		Gross Written Premiums			Ceded Written Premiums			NetWritten Premiums			Net Earned Premiums
U.S. Insurance
Marine	$	38,830	$	(16,918	)	$	21,912	$	21,177	$	41,687	$	(19,451	)	$	22,236	$	21,812		(6.9	%)		(13.0	%)		(1.5	%)		(2.9	%)
P&C		217,984		(54,835	)		163,149		132,630		187,492		(51,147	)		136,345		121,226		16.3	%		7.2	%		19.7	%		9.4	%
ProfessionalLiability		31,664		(4,391	)		27,273		25,939		28,007		(3,259	)		24,748		24,049		13.1	%		34.7	%		10.2	%		7.9	%
Total	$	288,478	$	(76,144	)	$	212,334	$	179,746	$	257,186	$	(73,857	)	$	183,329	$	167,087		12.2	%		3.1	%		15.8	%		7.6	%
Int'l Insurance
Marine	$	40,714	$	(11,523	)	$	29,191	$	37,197	$	49,597	$	(12,536	)	$	37,061	$	39,525		(17.9	%)		(8.1	%)		(21.2	%)		(5.9	%)
P&C		46,579		(17,705	)		28,874		23,715		46,663		(20,362	)		26,301		23,337		(0.2	%)		(13.1	%)		9.8	%		1.6	%
Professional Liability		45,230		(10,654	)		34,576		31,159		34,933		(10,911	)		24,022		19,238		29.5	%		(2.4	%)		43.9	%		62.0	%
Total	$	132,523	$	(39,882	)	$	92,641	$	92,071	$	131,193	$	(43,809	)	$	87,384	$	82,100		1.0	%		(9.0	%)		6.0	%		12.1	%
GlobalRe	$	76,235	$	(1,918	)	$	74,317	$	59,198	$	63,800	$	(1,231	)	$	62,569	$	44,648		19.5	%		55.8	%		18.8	%		32.6	%
Total	$	497,236	$	(117,944	)	$	379,292	$	331,015	$	452,179	$	(118,897	)	$	333,282	$	293,835		10.0	%		(0.8	%)		13.8	%		12.7	%

	Six Months Ended June 30, 2018									Six Months Ended June 30, 2017									% Change
amounts in thousands	Gross Written Premiums		Ceded Written Premiums			NetWritten Premiums		Net Earned Premiums		Gross Written Premiums		Ceded Written Premiums			NetWritten Premiums		Net Earned Premiums		Gross Written Premiums			Ceded Written Premiums			NetWritten Premiums			Net Earned Premiums
U.S. Insurance
Marine	$	80,554	$	(34,398	)	$	46,156	$	42,269	$	82,637	$	(36,971	)	$	45,666	$	44,506		(2.5	%)		(7.0	%)		1.1	%		(5.0	%)
P&C		386,177		(99,747	)		286,430		260,220		358,126		(89,345	)		268,781		240,349		7.8	%		11.6	%		6.6	%		8.3	%
ProfessionalLiability		61,675		(8,580	)		53,095		50,170		54,028		(9,028	)		45,000		46,236		14.2	%		(5.0	%)		18.0	%		8.5	%
Total	$	528,406	$	(142,725	)	$	385,681	$	352,659	$	494,791	$	(135,344	)	$	359,447	$	331,091		6.8	%		5.5	%		7.3	%		6.5	%
Int'l Insurance
Marine	$	97,192	$	(19,577	)	$	77,615	$	76,476	$	118,430	$	(23,462	)	$	94,968	$	77,020		(17.9	%)		(16.6	%)		(18.3	%)		(0.7	%)
P&C		80,539		(31,372	)		49,167		45,484		87,031		(50,008	)		37,023		45,517		(7.5	%)		(37.3	%)		32.8	%		(0.1	%)
ProfessionalLiability		82,664		(17,821	)		64,843		63,321		67,592		(16,932	)		50,660		43,649		22.3	%		5.3	%		28.0	%		45.1	%
Total	$	260,395	$	(68,770	)	$	191,625	$	185,281	$	273,053	$	(90,402	)	$	182,651	$	166,186		(4.6	%)		(23.9	%)		4.9	%		11.5	%
GlobalRe	$	203,659	$	(8,411	)	$	195,248	$	115,702	$	134,640	$	(6,293	)	$	128,347	$	82,689		51.3	%		33.7	%		52.1	%		39.9	%
Total	$	992,460	$	(219,906	)	$	772,554	$	653,642	$	902,484	$	(232,039	)	$	670,445	$	579,966		10.0	%		(5.2	%)		15.2	%		12.7	%

16

NOTE 4.  INVESTMENTS

The following tables set forth our Company’s Available-For-Sale Investments as of June 30, 2018 and December 31, 2017 and include Other-Than-Temporary-Impairment (“OTTI”) securities recognized within Accumulated Other Comprehensive Income (“AOCI”):

	June 30, 2018
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
amounts in thousands	Value		Gains		(Losses)			Cost
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	289,612	$	955	$	(4,189	)	$	292,846
States, Municipalities and Political Subdivisions		658,129		10,410		(4,870	)		652,589
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		362,870		1,091		(14,497	)		376,276
Residential Mortgage Obligations		96,134		464		(431	)		96,101
Asset-Backed Securities		476,838		737		(2,749	)		478,850
Commercial Mortgage-Backed Securities		168,609		807		(2,817	)		170,619
Subtotal	$	1,104,451	$	3,099	$	(20,494	)	$	1,121,846
Corporate Exposures (1)		909,349		4,303		(19,302	)		924,348
Total Fixed Maturities	$	2,961,541	$	18,767	$	(48,855	)	$	2,991,629
Short-Term Investments		6,368		—		—			6,368
Total Available-For-Sale Investments	$	2,967,909	$	18,767	$	(48,855	)	$	2,997,997

(1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

	December 31, 2017
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
amounts in thousands	Value		Gains		(Losses)			Cost
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	393,563	$	2,081	$	(2,014	)	$	393,496
States, Municipalities and Political Subdivisions		814,632		20,136		(1,423	)		795,919
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		407,619		2,352		(5,414	)		410,681
Residential Mortgage Obligations		54,104		606		(79	)		53,577
Asset-Backed Securities		328,753		2,138		(663	)		327,278
Commercial Mortgage-Backed Securities		160,904		2,354		(1,182	)		159,732
Subtotal	$	951,380	$	7,450	$	(7,338	)	$	951,268
Corporate Exposures (1)		897,479		14,491		(3,737	)		886,725
Total Fixed Maturities	$	3,057,054	$	44,158	$	(14,512	)	$	3,027,408
Equity Securities:
Common Stocks	$	52,439	$	7,423	$	(112	)	$	45,128
Preferred Stocks		183,542		6,071		(1,560	)		179,031
Total Equity Securities	$	235,981	$	13,494	$	(1,672	)	$	224,159
Short-Term Investments		6,480		3		—			6,477
Total Available-For-Sale Investments	$	3,299,515	$	57,655	$	(16,184	)	$	3,258,044

(1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

17

The following table sets forth our Company’s Equity Securities at fair value as of June 30, 2018:

	As of June 30, 2018
			Gross		Gross
	Fair		Unrealized		Unrealized			Cost
amounts in thousands	Value		Gains		(Losses)
Equity Securities:
Common Stocks	$	145,077	$	9,749	$	(499	)	$	135,827
Preferred Stocks		182,389		3,854		(3,135	)		181,670
Total Equity Securities	$	327,466	$	13,603	$	(3,634	)	$	317,497

Our Company made investments in certain companies, which are reported as Other Invested Assets on the Consolidated Balance Sheet and accounted for using the equity method.  In applying the equity method, these investments were initially recorded at cost and subsequently adjusted based on our Company’s proportionate share of the net income or loss of the investments. Our initial purchase price for these investments was $2.0 million with a current carrying value of $1.7 million at June 30, 2018 and  December 31, 2017, as reflected on our Consolidated Balance Sheet.  

Other Invested Assets also includes overseas deposits with a fair value of $36.6 million at June 30, 2018 and $28.8 million at December 31, 2017.  The overseas deposits consist of investments in private funds which are managed centrally by The Corporation of Lloyds in support of all Lloyd’s market participants. The funds consist of fixed income securities, bank deposits, and cash invested in local markets which are intended to fulfill regulatory deposit requirements in worldwide jurisdictions. Our Company’s ability to withdraw from the funds is restricted by an annual and quarterly funding and release process managed by Lloyd’s in conjunction with Syndicate 1221’s capital requirements in various jurisdictions.

As of June 30, 2018 and December 31, 2017, our Company did not have a concentration of greater than 5% of invested assets in a single non-government backed issuer.

As of June 30, 2018 and December 31, 2017, Fixed Maturities for which Non-Credit OTTI was previously recognized and included in AOCI were in a Net Unrealized Gain position of $0.4 million and $0.5 million, respectively.

The fair value of our Company’s Fixed Maturities investment portfolio may fluctuate significantly in response to various factors such as changes in interest rates, investment quality ratings, foreign exchange rates and credit spreads. Our Company does not have the intent to sell nor is it more likely than not that it will have to sell Fixed Maturities in unrealized loss positions that are not other-than-temporarily impaired before recovery. For structured securities, default probability and severity assumptions differ based on property type, vintage and the stress of the collateral. Our Company does not intend to sell, and it is more likely than not that our Company will not be required to sell, these securities before the recovery of the amortized cost basis. Our Company may realize investment losses to the extent our liquidity needs require the disposition of Fixed Maturity securities in unfavorable interest rate, liquidity or credit spread environments. Significant changes in the factors our Company considers when evaluating investments for impairment losses could result in a significant change in impairment losses reported in the Consolidated Financial Statements.

The contractual maturity dates for Fixed Maturities categorized by the number of years until maturity as of June 30, 2018 are shown in the following table:

	June 30, 2018
	Fair		Amortized
amounts in thousands	Value		Cost
Due in one year or less	$	219,948	$	221,066
Due after one year through five years		722,278		732,073
Due after five years through ten years		336,352		338,140
Due after ten years		578,512		578,504
Mortgage-Backed and Asset-Backed Securities		1,104,451		1,121,846
Total	$	2,961,541	$	2,991,629

Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Prepayment assumptions associated with the Mortgage-Backed and Asset-Backed Securities are reviewed on a periodic basis. When changes in prepayment assumptions are deemed necessary as the result of actual prepayments differing from anticipated prepayments, securities are revalued based upon the new prepayment assumptions utilizing the retrospective accounting method. Due to the periodic repayment of principal, our Mortgage-Backed and Asset-Backed Securities are estimated to have an effective maturity of approximately 5.3 years.

18

The following tables summarize all Available-For-Sale securities in a gross unrealized loss position as of June 30, 2018 and December 31, 2017, showing the aggregate fair value and gross unrealized loss by the length of time those securities have continuously been in a gross unrealized loss position:

	June 30, 2018
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
amounts in thousands	Value		(Losses)			Value		(Losses)			Value		(Losses)
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	220,029	$	(3,420	)	$	39,864	$	(769	)	$	259,893	$	(4,189	)
States, Municipalities and Political Subdivisions		213,600		(3,184	)		42,654		(1,686	)		256,254		(4,870	)
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		115,138		(3,504	)		214,279		(10,993	)		329,417		(14,497	)
Residential Mortgage Obligations		78,032		(421	)		387		(10	)		78,419		(431	)
Asset-Backed Securities		273,120		(2,413	)		23,583		(336	)		296,703		(2,749	)
Commercial Mortgage-Backed Securities		59,304		(954	)		22,124		(1,863	)		81,428		(2,817	)
Subtotal	$	525,594	$	(7,292	)	$	260,373	$	(13,202	)	$	785,967	$	(20,494	)
Corporate Exposures (1)		643,226		(15,432	)		101,454		(3,870	)		744,680		(19,302	)
Total Fixed Maturities	$	1,602,449	$	(29,328	)	$	444,345	$	(19,527	)	$	2,046,794	$	(48,855	)

(1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

	December 31, 2017
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
amounts in thousands	Value		(Losses)			Value		(Losses)			Value		(Losses)
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	273,672	$	(1,502	)	$	54,484	$	(512	)	$	328,156	$	(2,014	)
States, Municipalities and Political Subdivisions		74,097		(503	)		45,085		(920	)		119,182		(1,423	)
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		87,496		(346	)		236,745		(5,068	)		324,241		(5,414	)
Residential Mortgage Obligations		12,418		(62	)		546		(17	)		12,964		(79	)
Asset-Backed Securities		85,877		(468	)		24,733		(195	)		110,610		(663	)
Commercial Mortgage-Backed Securities		20,482		(95	)		22,903		(1,087	)		43,385		(1,182	)
Subtotal	$	206,273	$	(971	)	$	284,927	$	(6,367	)	$	491,200	$	(7,338	)
Corporate Exposures (1)		295,433		(1,690	)		121,410		(2,047	)		416,843		(3,737	)
Total Fixed Maturities	$	849,475	$	(4,666	)	$	505,906	$	(9,846	)	$	1,355,381	$	(14,512	)
Equity Securities:
Common Stocks	$	11,245	$	(81	)	$	1,770	$	(31	)	$	13,015	$	(112	)
Preferred Stocks		50,861		(1,524	)		662		(36	)		51,523		(1,560	)
Total Equity Securities	$	62,106	$	(1,605	)	$	2,432	$	(67	)	$	64,538	$	(1,672	)
Total Fixed Maturities and Equity Securities	$	911,581	$	(6,271	)	$	508,338	$	(9,913	)	$	1,419,919	$	(16,184	)

(1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

Our Company analyzes impaired securities quarterly to determine if any impairments are other-than-temporary.  The above securities with unrealized losses are deemed to be temporarily impaired based on our evaluation.

19

As of June 30, 2018, there were 753 Fixed Maturities in an unrealized loss position. As of December 31, 2017, there were 454 Fixed Maturities and 22 Equity Securities in an unrealized loss position. As of June 30, 2018, the gross unrealized loss for the greater than 12 months category consists primarily of Agency Residential Mortgage-Backed Securities and Corporate Exposures principally due to an increase in interest rates and spread widening. The gross unrealized loss for the less than 12 months category for the period ended June 30, 2018 consists primarily of Corporate Exposures due to spread widening.  As of December 31, 2017, the gross unrealized loss for the greater than 12 month category consists primarily of Agency Residential Mortgage-Backed Securities and Corporate Exposures and is mostly due to an increase in interest rates since the time of purchase.  The gross unrealized loss for the less than 12 months category for the period ended December 31, 2017 consists primarily of Corporate Bonds and Preferred Stocks, which are reported in Equity Securities, due to an increase in interest rates since time of purchase, as well as Foreign Government Bonds due to an unfavorable exchange rate movement in our Canadian portfolio.

As of June 30, 2018 and December 31, 2017, the largest unrealized loss by a non-government backed issuer in the investment portfolio was $1.7 million and $0.7 million, respectively.

Our Company’s ability to hold securities is supported by sufficient cash flow from our operations and from maturities within our investment portfolio in order to meet our claims payments and other disbursement obligations arising from our underwriting operations without selling such investments.  With respect to securities where the decline in value is determined to be temporary and the security’s value is not written down, a subsequent decision may be made to sell that security and realize a loss.  Subsequent decisions on security sales are made within the context of overall risk monitoring, changing information and market conditions.  

Upon adoption of ASU 2016-01 as of January 1, 2018, changes in the fair value of Equity Securities are recognized through Net Income. Our Company did not have any credit related OTTI losses during the three months ended June 30, 2018 or 2017. Our Company did not have any credit related OTTI losses during the six months ended June 30, 2018. Our Company had two credit related OTTI losses of $1.1 million in the equity portfolio during the six months ended June 30, 2017.    

As of June 30, 2018 and 2017, the cumulative amounts related to our Company’s credit loss portion of the OTTI losses on Fixed Maturities was $2.4 million.  There were no changes to the cumulative amounts of our Company’s credit loss portion of OTTI for the three and six months ended June 30, 2018 and 2017.

Our Company’s Net Investment Income was derived from the following sources:

	Three Months Ended June 30,						Six Months Ended June 30,
amounts in thousands	2018			2017			2018			2017
Fixed Maturities	$	21,719		$	19,186		$	42,771		$	37,527
Equity Securities		3,161			3,780			6,086			7,564
Short-Term Investments, Cash & Cash Equivalents		415			87			642			170
Other Invested Assets		141			113			327			242
Total Investment Income	$	25,436		$	23,166		$	49,826		$	45,503
Investment Expenses		(835	)		(901	)		(1,523	)		(1,790	)
Net Investment Income	$	24,601		$	22,265		$	48,303		$	43,713

20

Realized Gains and Losses on Investments Sold, excluding net OTTI losses recognized in earnings, for the periods indicated, were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
amounts in thousands	2018			2017			2018			2017
Fixed Maturities:
Gains	$	1,541		$	344		$	3,347		$	812
Losses		(481	)		(958	)		(756	)		(2,214	)
Fixed Maturities, Net	$	1,060		$	(614	)	$	2,591		$	(1,402	)
Short-Term Investments, Cash & Cash Equivalents:
Gains	$	63		$	119		$	81		$	226
Losses		(21	)		(45	)		(195	)		(125	)
Short-Term, Net	$	42		$	74		$	(114	)	$	101
Other Invested Assets:
Gains	$	20		$	16		$	70		$	21
Losses		(45	)		(24	)		(86	)		(135	)
Other Invested Assets, Net	$	(25	)	$	(8	)	$	(16	)	$	(114	)
Equity Securities:
Gains	$	754		$	2,470		$	754		$	4,386
Losses		(44	)		(228	)		(259	)		(228	)
Equity Securities, Net	$	710		$	2,242		$	495		$	4,158
Net Realized Gains on Investments Sold	$	1,787		$	1,694		$	2,956		$	2,743

The following table presents the portion of Net Unrealized Gains (Losses) recognized during the three and six months ended June 30, 2018, that relates to Equity Securities held as of June 30, 2018:

	Three Months Ended June 30,		Six Months Ended June 30,
amounts in thousands	2018		2018
Equity Securities:
Total Net Realized and Unrealized Gains (Losses) recognized   during the period	$	2,039	$	(1,357	)
Less: Net Realized Gains on Investments Sold recognized during   the period		710		495
Net Unrealized Gains (Losses) recognized during the period	$	1,329	$	(1,852	)

NOTE 5.  FAIR VALUE MEASUREMENT

The fair value of our financial instruments is determined based on the following fair value hierarchy:

Level 1 – Quoted prices for identical instruments in active markets.  Examples are listed equities and fixed income securities traded on an exchange.  U.S. Treasury securities are reported as Level 1 and are valued based on unadjusted quoted prices for identical assets in active markets that our Company can access.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.  Examples are Asset-Backed and Mortgage-Backed Securities that are similar to other Asset-Backed or Mortgage-Backed Securities observed in the market. U.S. Government Agency Securities are reported as Level 2 and are valued using yields and spreads that are observable in active markets.

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.  An example would be a private placement with minimal liquidity.

21

The following tables present, for each of the fair value hierarchy levels as defined by the accounting guidance for fair value measurements described above, our Company’s Fixed Maturities and Equity Securities by asset class that are measured at fair value on a recurring basis, as well as the fair value of the 5.75% Senior Notes due October 15, 2023 (the “Senior Notes”) carried at amortized cost as of June 30, 2018 and December 31, 2017:

	June 30, 2018
amounts in thousands	Level 1		Level 2		Level 3		Total
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	80,379	$	209,233	$	—	$	289,612
States, Municipalities and Political Subdivisions		—		658,129		—		658,129
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		—		362,870		—		362,870
Residential Mortgage Obligations		—		96,134		—		96,134
Asset-Backed Securities		—		476,838		—		476,838
Commercial Mortgage-Backed Securities		—		168,609		—		168,609
Subtotal	$	—	$	1,104,451	$	—	$	1,104,451
Corporate Exposures		—		909,349		—		909,349
Total Fixed Maturities	$	80,379	$	2,881,162	$	—	$	2,961,541
Equity Securities:
Common Stocks	$	38,441	$	106,636	$	—	$	145,077
Preferred Stocks		—		182,389		—		182,389
Total Equity Securities	$	38,441	$	289,025	$	—	$	327,466
Short-Term Investments		—		6,368		—		6,368
Total Assets Measured at Fair Value	$	118,820	$	3,176,555	$	—	$	3,295,375
Senior Notes	$	—	$	273,865	$	—	$	273,865
Total Liabilities Measured at Fair Value	$	—	$	273,865	$	—	$	273,865

	December 31, 2017
amounts in thousands	Level 1		Level 2		Level 3		Total
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	178,251	$	215,312	$	—	$	393,563
States, Municipalities and Political Subdivisions		—		814,632		—		814,632
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		—		407,619		—		407,619
Residential Mortgage Obligations		—		54,104		—		54,104
Asset-Backed Securities		—		328,753		—		328,753
Commercial Mortgage-Backed Securities		—		160,904		—		160,904
Subtotal	$	—	$	951,380	$	—	$	951,380
Corporate Exposures		—		897,479		—		897,479
Total Fixed Maturities	$	178,251	$	2,878,803	$	—	$	3,057,054
Equity Securities:
Common Stocks	$	52,439	$	—	$	—	$	52,439
Preferred Stocks		—		183,542		—		183,542
Total Equity Securities	$	52,439	$	183,542	$	—	$	235,981
Short-Term Investments		6,480		—		—		6,480
Total Assets Measured at Fair Value	$	237,170	$	3,062,345	$	—	$	3,299,515
Senior Notes	$	—	$	277,951	$	—	$	277,951
Total Liabilities Measured at Fair Value	$	—	$	277,951	$	—	$	277,951

Other Financial assets and liabilities including Cash, Premium Receivable, Reinsurance Recoverable and Reinsurance Balances Payable are carried at cost, which approximates fair value.  Our Company has Overseas deposits in Other Invested Assets of $36.6 million and $28.8 million at June 30, 2018 and December 2017, respectively, which is measured at fair value using the net asset value (“NAV”) as a practical expedient.

22

Our Company did not have any transfers between Level 1 and Level 2 classifications for the three and six months ended June 30, 2018 and 2017.  

As of June 30, 2018, our Company did not have any Level 3 assets.

NOTE 6.  GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following table shows an analysis of goodwill by reporting segment:

	Six Months Ended June 30,
	U.S.		Int'l
amounts in thousands	Insurance		Insurance			Total
Goodwill at Beginning of the Period	$	1,978	$	2,482		$	4,460
Goodwill Acquired		—		11,312			11,312
Foreign Currency Translation Adjustment		—		(27	)		(27	)
Goodwill at End of the Period	$	1,978	$	13,767		$	15,745

The goodwill acquired primarily relates to expected synergies from combining operations of BDM and ASCO and is not expected to be deductible for tax purposes. The fair values of the assets acquired and liabilities assumed may be subject to adjustments, which may impact the amount recorded for goodwill.

Intangibles

The gross carrying value and weighted average amortization period of intangible assets by type at June 30, 2018 was as follows:

	As of June 30, 2018
	Gross		Weighted Average
amounts in thousands	Carrying Amount		Amortization Period
Finite-Lived Assets
ASCO Customer Relationships	$	4,739	15 years
ASCO VOBA		1,694	4 years
BDM Broker Networks		1,002	15 years
BDM Trade Name		493	1 year
Total	$	7,928
Indefinite-Lived Assets
ASCO European Licenses	$	2,463	indefinite
NUAL Lloyd's Syndicate Capacity		2,136	indefinite
Total	$	4,599

The aggregate amortization expense since the acquisition date of BDM and ASCO has been immaterial.

The fair values of the intangible assets acquired may be subject to adjustments, which may impact the amounts recorded.

The estimated remaining amortization expense for the finite-lived intangible assets is as follows:

amounts in thousands	Total
2018	$	649
2019		1,053
2020		806
2021		806
2022		594
2023 and thereafter		4,020
Total	$	7,928

23

NOTE 7.  LOSS RESERVES

We establish reserves for the estimated unpaid ultimate liability for losses and LAE under the terms of our policies and agreements.  The determination of Reserves for Losses and LAE is partially dependent upon the receipt of information from agents and brokers.  Reserves include estimates for both claims that have been reported and for those that have been incurred but not reported (“IBNR”), and include estimates of expenses associated with processing and settling these claims.  Reserves are recorded in Reserves for Losses and LAE in the Consolidated Balance Sheets.  Our estimates and judgements may be revised as additional experience and other data become available and are reviewed, as new or improved methodologies are developed, or as laws change. Frequency/severity analyses are also performed for certain books of business.  To the extent that reserves are found deficient or redundant, a strengthening or release is recognized as a charge or credit to earnings.

The following table summarizes our Company’s Reserves for Losses and LAE activity for the six months ended June 30, 2018 and 2017:

	For the Six Months Ended June 30,
amounts in thousands	2018			2017
Net Reserves for Losses and LAE at Beginning of Year	$	1,705,380		$	1,510,451
Acquired Net Reserves		16,159			—
Provision for Losses and LAE for Claims Occurring in the Current Year		379,158			331,595
Increase (Decrease) in Estimated Losses and LAE for Claims Occurring in Prior Years		3,320			15,115
Incurred Losses and LAE	$	382,478		$	346,710
Losses and LAE Paid for Claims Occurring During:
Current Year		(32,832	)		(47,235	)
Prior Years		(292,843	)		(249,895	)
Losses and LAE Payments	$	(325,675	)	$	(297,130	)
Foreign Currency Adjustment		(3,310	)		3,432
Net Reserves for Losses and LAE at End of Period		1,775,032			1,563,463
Reinsurance Recoverables on Unpaid Losses and LAE		799,084			782,864
Gross Reserves for Losses and LAE at End of Period	$	2,574,116		$	2,346,327

For the six months ended June 30, 2018, our Incurred Losses and LAE increased $35.8 million as compared to the same period in 2017, primarily due to growth in Net Earned Premium over the prior year.

In addition, we incurred $3.3 million of net prior AY reserve strengthening for the six months ended June 30, 2018 due to net unfavorable non-catastrophe related loss emergence of $11.8 million primarily within our Int’l and U.S. Insurance reporting segments, partially offset by net catastrophe loss releases $8.5 million primarily related to Hurricanes Harvey, Irma and Maria (the “Hurricane events”) and the Puebla, Mexico Earthquake that occurred in the third quarter of 2017. This compared to $15.1 million of net prior AY reserve strengthening for the same period in 2017related to unfavorable loss emergence within our Int’l Insurance and GlobalRe reporting segments.

For the six months ended June 30, 2018, our Losses and LAE Payments increased $28.5 million as compared to the same period in 2017, primarily due to increased claim payments associated with the catastrophe activity occurring in the third quarter of 2017.

Our June 30, 2018 Net Reserves for Losses and LAE includes estimated amounts for numerous catastrophe events. We caution that the magnitude and complexity of losses arising from these events inherently increases the level of uncertainty and therefore the level of management judgment involved in arriving at our estimated Net Reserves for Losses and LAE. As a result, our actual losses for these events may ultimately differ materially from our current estimates.

NOTE 8. CEDED REINSURANCE

As of June 30, 2018, the credit quality distribution of our Company’s Reinsurance recoverable of $1.1 billion for ceded paid losses, ceded unpaid losses and LAE, and ceded unearned premiums based on insurer financial strength ratings from A.M. Best or S&P was not significantly different from the credit quality distribution as of December 31, 2017.    

Our allowance for uncollectible reinsurance was $12.6  million as of June 30, 2018 and December 31, 2017.

As of June 30, 2018, the list of our 10 largest reinsurers measured by the amount of Reinsurance recoverable for ceded losses and LAE and ceded unearned premium, together with the reinsurance recoverable and collateral, was similar to the list as of December 31, 2017.

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NOTE 9.  DEBT

During the first quarter of 2018, the Company reclassified certain overseas deposits from Short-Term Investments to Other Invested Assets. Refer to Note 1. Organization & Summary of Significant Accounting Policies. Although the nature of the investments did not change, this reclassification caused the Company to exceed a covenant of our Club Facility that sets a limitation on other investments as a percentage of total investments.  Our Company has received a waiver of compliance with respect to this covenant, which was subsequently amended to increase the percentage of other investments permitted. As of June 30, 2018, our Company was in compliance with all covenants for our Club Facility, Senior Notes, Australian Facility and Bilateral Facility.

NOTE 10.  COMMITMENTS AND CONTINGENCIES

In 2013, the State of Connecticut (“the State”) awarded our Company up to $11.5 million ($8.0 million in loans and $3.5 million in grants) to move our corporate headquarters to Stamford, Connecticut.  The loan is non-interest bearing, has a term of 10 years and is subject to forgiveness based on our compliance with certain conditions set forth in the agreement with the State.  The amount of the loan to be received is dependent on our Company reaching certain milestones for creation of new jobs over a five-year period, and the funds are to be used to offset certain equipment purchases, facility costs, training of employees and other eligible project-related costs.  As of June 30, 2018, our Company has received $11.5 million of the award ($8.0 million in loans and $3.5 million of the grant) and earned a loan forgiveness credit of $7.0 million with the State. Our Company is recognizing the amount of loan and grants received over the period in which offsetting expenses are recognized. Our Company recognized $0.4 million and $0.7 million of the incentive for the three and six months ended June 30, 2018, respectively. As of June 30, 2018 and December 31, 2017, our Company has deferred revenue of $5.3 million and $4.4 million, respectively, which is included in Other Liabilities on the Consolidated Balance Sheets.

On February 16, 2017, our Company entered into a guarantee, pursuant to which it guaranteed all of the liabilities and obligations of NIIC (the “Guarantee”). The Guarantee will remain effective until all of such liabilities and obligations are discharged, and in the event that our Company does not meet its obligations under the Guarantee, any person who is covered by an insurance policy, certificate of coverage or reinsurance contract issued by NIIC will be a third party beneficiary under the Guarantee.  Our Company’s obligations under the Guarantee may be terminated by providing twelve months prior written notice to NIIC. However the obligations of our Company under the Guarantee terminate immediately in the event that (i) the majority of the outstanding voting capital stock in NIIC is sold to any non-affiliated entity; (ii) A.M. Best has confirmed that NIIC will receive the same financial strength rating as NIC or NSIC, without the benefit of the Guarantee; or (iii) NIIC withdraws its request to be rated by A.M. Best, provided that NIIC has not been downgraded within the prior twelve months.

In the ordinary course of conducting business, our Parent Company’s subsidiaries are involved in various legal proceedings. Most of these proceedings consist of claims litigation involving our Parent Company’s subsidiaries as either: (a) liability insurers defending or providing indemnity for third party claims brought against insureds or (b) insurers defending first party coverage claims brought against them. In general, our Company believes we have valid defenses to these cases. Our Company’s management believes that the ultimate liability, if any, with respect to these legal proceedings, after consideration of provisions made for potential losses and cost of defense, will not be material to our Company’s Consolidated Balance Sheets, Statements of Income and Statements of Cash Flows.

NOTE 11.  STOCK-BASED COMPENSATION

Stock-based compensation granted under our Company’s stock plans is expensed in tranches over the vesting period. Non-performance based grants generally vest equally over a three or four-year period. Performance units generally cliff vest three years after they are granted. Each performance unit and restricted stock unit represents a contingent right to receive one share of Common Stock as of the vesting date. Such Common Stock may be subject to forfeiture for the payment of any required tax withholding.

The activity related to our Company's restricted stock unit awards was as follows:

	Six Months Ended June 30, 2018
	Number of Awards			Weighted Average Grant Date Fair Value (1)
Nonvested at the beginning of the period		159,539		$	41.60
Granted		21,593		$	49.03
Vested (2)		(65,236	)	$	34.16
Forfeited		(7,000	)	$	38.00
Nonvested at the end of the period		108,896		$	47.76

(1) Fair value is based on the closing price of our common shares on the NASDAQ on the grant date.

(2) This amount represents the gross number of shares vested before any share forfeiture to pay required tax withholdings. For the six months ended June 30, 2018 share awards of 25,814 were withheld for tax payments at a weighted average vest date fair value of $55.21.

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The activity related to our Company's performance-based equity awards was as follows:

	Six Months Ended June 30, 2018
	Number of Awards			Weighted Average Grant Date Fair Value (1)
Nonvested at the beginning of the period		966,361		$	43.39
Granted		247,554		$	54.15
Performance Adjustment		(59,833	)	$	37.25
Vested (2)		(274,299	)	$	37.25
Forfeited		(16,250	)	$	43.27
Nonvested at the end of the period		863,533		$	48.85

(1) Fair value is based on the closing price of our common shares on the NASDAQ on the grant date.

(2) This amount represents the gross number of shares vested before any share forfeiture to pay required tax withholdings. For the six months ended June 30, 2018 share awards of 117,005 were withheld for tax payments at a weighted average vest date fair value of $55.65.

NOTE 12. STOCKHOLDERS’ EQUITY

On May 10, 2018 our Board of Directors declared a cash dividend of $0.07 per share that was paid on June 29, 2018. 

The declaration and amount of any future dividend will be at the discretion of the Board of Directors, and will depend upon many factors, including financial condition, results of operations, business requirements, regulatory and legal constraints and other factors the Board of Directors deems relevant.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

Some of the statements in this Quarterly Report on Form 10-Q are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in or incorporated by reference in this Quarterly Report are forward-looking statements.  Whenever used in this report, the words “estimate,” “expect,” “believe,” “may,” “will,” “intend,” “continue” or similar expressions or their negative are intended to identify such forward-looking statements.  Forward-looking statements are derived from information that we currently have and assumptions that we make, and are subject to a number of risks and uncertainties, including those described in the “Risk Factors” section of our 2017 Annual Report on Form 10-K.  We operate in a competitive environment, with new risks emerging from time to time. We cannot assure you that anticipated results will be achieved, since actual results may differ materially because of both known and unknown risks and uncertainties which we face.

In light of these risks, uncertainties and assumptions, any forward-looking events discussed in this Form 10-Q may not occur, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of their respective dates.

U.S. GAAP and Non-GAAP Financial Performance Metrics

Throughout this Quarterly Report, we present our operations in the way we believe will be most meaningful, useful and transparent to anyone using this financial information to evaluate our performance. In addition to the presentation of Net Income, Book Value, Book Value per Share, Net Losses and LAE Reserves and Combined Ratio, we show certain non-GAAP financial measures as defined in Regulation G that we believe are valuable in managing our business and drawing comparisons to our peers. These non-GAAP measures are Net Operating Earnings and Underwriting Profit (Loss).

The following is a list of GAAP and non-GAAP measures found throughout this report with their definitions, relationships to GAAP measures and explanations of their importance to our operations:

Book Value and Book Value Per Share

Book Value is equivalent to Stockholders’ Equity and Book Value per Share is calculated by dividing Stockholders’ Equity by the number of outstanding shares at the end of the interim period.

Net Losses and LAE Reserves

Reserves for Losses and LAE, as shown in the liabilities section of our Consolidated Balance Sheets, represents the total gross obligations to claimants for both estimates of known claims and estimates for IBNR claims. The related asset item, Reinsurance Recoverable on Unpaid Losses and LAE, is the estimate of both known claims and IBNR that we expect to recover from reinsurers. The net of these two items is generally referred to as Net Losses and LAE Reserves and is commonly used in our disclosures regarding the process of establishing these various estimated amounts.

Combined Ratio

The Combined Ratio is a common insurance industry measure of profitability for any underwriting operation and is calculated in three components. First, the Loss Ratio is represented by Net Losses and LAE divided by Net Earned Premiums. The second component is the Commission Expense Ratio, which is Commission Expenses divided by Net Earned Premiums. The third component is the Other Operating Expense Ratio, which reflects the sum of Other Operating Expenses and Other Underwriting Income (Expense), divided by Net Earned Premiums. All items included in these components of the Combined Ratio are presented in our GAAP Consolidated Financial Statements. The sum of the Loss, Commission Expense and Other Operating Expense Ratios is the Combined Ratio. The difference between the Combined Ratio and 100% reflects the rate of Underwriting Profit (Loss). For example, a Combined Ratio of 85% implies that for every $100 of premium we earn, we record $15 of Underwriting Profit.

Net Operating Earnings

Net Operating Earnings is a “non-GAAP financial measure” as defined in Regulation G. Net Operating Earnings is comprised of Net Income excluding After-Tax Total Net Realized and Unrealized Gains (Losses), After-Tax Foreign Exchange Gains (Losses) and the Net Gain on Disposition of Product Line recognized in our Consolidated Statements of Income. We believe that this presentation reflects the underlying fundamentals of our business.

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A reconciliation of Net Income (the nearest GAAP financial measure) to Net Operating Earnings can be found in Item 2, Results of Operations. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our business and enables investors and other users of our financial information to analyze underlying business performance in a manner similar to management. We also believe this measure follows industry practice and, therefore facilitates comparison of our performance with our peer group.

Underwriting Profit (Loss)

Underwriting Profit (Loss) represents one measure of the pre-tax profitability of our insurance operations and is derived by subtracting the following from Net Earned Premiums: Net Losses and LAE Incurred, Commission Expenses, Other Operating Expenses and Other Underwriting Income (Expense). This information is available in total and by segment in Note 3 – Segment Information in the Interim Consolidated Financial Statements. The nearest comparable GAAP measure is Income Before Income Taxes which, in addition to Net Underwriting Profit (Loss), includes Net Investment Income, Total Net Realized and Unrealized Gains (Losses) recognized in our Consolidated Statements of Income, Interest Expense and Other Income (Loss). While this measure is presented in the footnotes to the Interim Consolidated Financial Statements, it is considered a “non-GAAP financial measure” as defined in Regulation G when presented elsewhere on a consolidated basis.

A reconciliation of total Net Underwriting Profit (Loss) and its components to Income Before Income Taxes (the nearest GAAP financial measure) can be found in Item 1, Note 3 to the Interim Consolidated Financial Statements and in Item 2, Segment Results. We believe that presentation of Net Underwriting Profit (Loss) provides investors with an enhanced understanding of our results of operations, by highlighting the underlying pre-tax profitability of our underwriting activities.

Overview

The discussion and analysis of our financial condition and results of operations contained herein should be read in conjunction with our 2017 Annual Report on Form 10-K in its entirety as well as the statements under “Forward-Looking Statements” and the Interim Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for a complete description of events, trends, uncertainties, risks and critical accounting estimates affecting us.

Unless the context requires otherwise, the terms “we,” “us,”  “our” or “our Company” are used to mean The Navigators Group, Inc., a Delaware holding company established in 1982, and its subsidiaries. The term “Parent Company” is used to mean The Navigators Group, Inc. without its subsidiaries.

We are an international insurance company with a long-standing area of specialization in Marine insurance. We also offer P&C insurance, primarily general liability coverage and umbrella & excess liability coverage to commercial enterprises through our Primary and Excess Casualty divisions. We have also developed niches in Professional Liability insurance, through our D&O and E&O divisions, as well as assumed reinsurance products.

On February 7, 2018, certain wholly owned subsidiaries of our Company entered into a Renewal Rights Agreement with Thomas Miller Specialty Underwriting Agency Limited and Thomas Miller & Co Limited (collectively “Thomas Miller”), pursuant to which Thomas Miller agreed to acquire the renewal rights to our Company’s fixed-premium protection and indemnity business. During the first quarter of 2018, our Company recorded a gain from this transaction. Our Company agreed to continue to underwrite such business from February 8, 2018 through an end date of August 31, 2018, which was originally June 30, 2018, while all transitional arrangements are put in place, but will cede 100% of such business through a quota share agreement. After August 31, 2018 this business will renew through Thomas Miller. Our Company will remain responsible for all losses occurring prior to February 8, 2018 on such business, and our Company will continue to participate in the protection and indemnity market primarily through reinsurance of mutual clubs via our Lloyd’s of London (“Lloyd’s”) syndicate, Syndicate 1221.

On June 7, 2018 (the “acquisition date”), the Company acquired 100% ownership interest in Bracht, Deckers & Mackelbert NV, an insurance underwriting agency organized under the laws of Belgium (“BDM”), and Assurances Continentales – Continentale Verzekeringen NV, an insurance company licensed under the laws of Belgium (“ASCO”). The Company also acquired in this transaction a wholly-owned subsidiary of ASCO, Canal Re S.A., a reinsurance company licensed under the laws of the Grand Duchy of Luxembourg (“Canal Re”). The acquisition of all three of these entities will be referred to as (the “Acquisition”). The Acquisition was undertaken as part of the Company’s strategy of expanding to more brokers and insured across Europe and reinforces the Company’s presence in the European Union’s single market. We anticipate that this will enable the Company to better serve its European clients after Brexit, and will also provide opportunity for BDM and ASCO to reach a wider European audience.

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Financial Highlights – Selected Indicators

	Three Months Ended				Six Months Ended
amounts in thousands, except per share amounts	June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
Results of Operations Data:
Net Earned Premiums	$	331,015	$	293,835	$	653,642	$	579,966
Net Investment Income		24,601		22,265		48,303		43,713
Underwriting Profit		13,314		7,797		32,721		17,967
Net Income		32,104		20,502		62,982		41,612
Net Income per Diluted Share	$	1.07	$	0.69	$	2.09	$	1.39
Net Cash provided by Operating Activities	$	46,958	$	35,561	$	82,721	$	72,904

amounts in thousands, except per share amounts	As of June 30, 2018		As of December 31, 2017
Balance Sheet Data:
Total Assets	$	5,488,945	$	5,224,622
Total Shareholders' Equity	$	1,234,084	$	1,225,965
Book Value per Share	$	41.49	$	41.55

Our revenue is primarily comprised of premiums and investment income. Cash flow is generated from premiums collected and investment income received less paid losses and loss expenses, commission and administrative expenses as well as the timing of reinsurance receipts and payments. Our products are distributed through multiple channels, utilizing global, national and regional retail and wholesale insurance brokers.

We report our results of operations consistent with the manner in which our Chief Operating Decision Maker reviews the business to assess performance by our four reportable segments: U.S. Insurance, Int’l Insurance, GlobalRe and Corporate.  

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Results of Operations

The following table presents a summary of our consolidated financial results for the three and six months ended June 30, 2018 and 2017:

	Three Months Ended June 30,						Six Months Ended June 30,						%Change
amounts in thousands, except per share amounts	2018			2017			2018			2017			QTD			YTD
Gross Written Premiums	$	497,236		$	452,179		$	992,460		$	902,484			10.0	%		10.0	%
Ceded Written Premiums		(117,944	)		(118,897	)		(219,906	)		(232,039	)		(0.8	%)		(5.2	%)
Net Written Premiums		379,292			333,282			772,554			670,445			13.8	%		15.2	%
Net Earned Premiums		331,015			293,835			653,642			579,966			12.7	%		12.7	%
Net Losses and LAE		(196,333	)		(177,110	)		(382,478	)		(346,710	)		10.9	%		10.3	%
Commission Expenses		(53,193	)		(48,173	)		(107,345	)		(96,017	)		10.4	%		11.8	%
Other Operating Expenses		(68,182	)		(60,766	)		(131,108	)		(119,304	)		12.2	%		9.9	%
Other Underwriting Income		7			11			10			32			(36.4	%)		(68.8	%)
Underwriting Profit	$	13,314		$	7,797		$	32,721		$	17,967			70.8	%		82.1	%
Net Investment Income		24,601			22,265			48,303			43,713			10.5	%		10.5	%
Total Net Realized and Unrealized Gains		3,116			1,694			1,104			1,650			84.0	%		(33.1	%)
Interest Expense		(3,864	)		(3,861	)		(7,728	)		(7,722	)		0.1	%		0.1	%
Other Income (Loss)		2,621			(422	)		2,501			625		NM			NM
Income Before Income Taxes	$	39,788		$	27,473		$	76,901		$	56,233			44.8	%		36.8	%
Income Tax Expense		(7,684	)		(6,971	)		(13,919	)		(14,621	)		10.2	%		(4.8	%)
Net Income	$	32,104		$	20,502		$	62,982		$	41,612			56.6	%		51.4	%
Net Income per Basic Share	$	1.08		$	0.70		$	2.12		$	1.42
Net Income per Diluted Share	$	1.07		$	0.69		$	2.09		$	1.39
Effective Tax Rate		19.3	%		25.4	%		18.1	%		26.0	%
Losses and LAE Ratio		59.3	%		60.3	%		58.5	%		59.8	%
Commission Expense Ratio		16.1	%		16.4	%		16.4	%		16.6	%
Other Operating Expense Ratio (1)		20.6	%		20.6	%		20.1	%		20.5	%
Combined Ratio		96.0	%		97.3	%		95.0	%		96.9	%

(1) - Includes Other Operating Expenses and Other Underwriting Income.

NM - Percentage change not meaningful

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The following tables calculate our Net Operating Earnings for the three and six months ended June 30, 2018 and 2017:

	Three Months Ended June 30, 2018									Three Months Ended June 30, 2017									% Change
amounts in thousands, except per share amounts	Pre-Tax			Tax (1)			After-Tax			Pre-Tax			Tax (1)			After-Tax			QTD
Net Income	$	39,788		$	(7,684	)	$	32,104		$	27,473		$	(6,971	)	$	20,502			56.6	%
Adjustments to Net Income:
Total Net Realized and Unrealized Losses		(3,116	)		654			(2,462	)		(1,694	)		593			(1,101	)		123.7	%
FX Losses (Gains)		(2,586	)		543			(2,043	)		463			(162	)		301		NM
Net Operating Earnings	$	34,086		$	(6,487	)	$	27,599		$	26,242		$	(6,540	)	$	19,702			40.1	%
Average Common Shares Outstanding:
Basic								29,733									29,470
Diluted								30,103									29,918
Net Operating Earnings per Common Share:
Basic							$	0.93								$	0.67
Diluted							$	0.92								$	0.66

(1) - Tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of any other relevant factors.

NM - Percentage change not meaningful

	Six Months Ended June 30, 2018									Six Months Ended June 30, 2017									% Change
amounts in thousands, except per share amounts	Pre-Tax			Tax (1)			After-Tax			Pre-Tax			Tax (1)			After-Tax			YTD
Net Income	$	76,901		$	(13,919	)	$	62,982		$	56,233		$	(14,621	)	$	41,612			51.4	%
Adjustments to Net Income:
Total Net Realized and Unrealized Losses		(1,104	)		232			(872	)		(1,650	)		578			(1,072	)		(18.6	%)
FX Losses (Gains)		(1,064	)		223			(841	)		(660	)		231			(429	)		96.1	%
Net Gain on Disposition of Product Line		(948	)		199			(749	)		—			—			—		NM
Net Operating Earnings	$	73,785		$	(13,265	)	$	60,520		$	53,923		$	(13,812	)	$	40,111			50.9	%
Average Common Shares Outstanding:
Basic								29,664									29,377
Diluted								30,143									29,897
Net Operating Earnings per Common Share:
Basic							$	2.04								$	1.37
Diluted							$	2.01								$	1.34

(1) - Tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of any other relevant factors.

NM - Percentage change not meaningful

Underwriting Profit

Quarter to Date Variance

Underwriting Profit was $13.3 million for the three months ended June 30, 2018 increasing $5.5 million from the same period in 2017. This increase was driven by the impact of growth in Net Earned Premiums across all of our reporting segments, as well as a $6.7 million decrease in Net Prior Accident Year Reserve Strengthening for the three months ended June 30, 2018 compared to the same period in 2017. Although Commission Expenses increased for the three months ended June 30, 2018 compared to the same period in 2017, this increase in conjunction with growth in Net Earned Premium caused a lower Commission Expense Ratio resulting in an additional contribution to Underwriting Profit period over period. These increases to Underwriting Profit were partially offset by an increase in Other Operating Expenses primarily due to an increase in employee expenses, professional service fees and information technology costs associated with new business initiatives and expansion of our global platform, as well as the impact of foreign exchange rates. Also partially offsetting the increases to Underwriting Profit was an increase in the Net Current Accident Year Losses and LAE Ratio.

Year to Date Variance

Underwriting Profit was $32.7 million for the six months ended June 30, 2018 increasing $14.8 million from the same period in 2017. This increase was driven by the impact of growth in Net Earned Premiums across all of our reporting segments, as well as an $11.8 million decrease in Net Prior Accident Year Reserve Strengthening for the six months ended June 30, 2018 compared to the same period in 2017. These increases to Underwriting Profit were partially offset by an increase in Other Operating Expenses primarily due to an increase in employee expenses, professional service fees and information technology costs associated with new business

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initiatives and expansion of our global platform, as well as the impact of foreign exchange rates. Also partially offsetting the increases to Underwriting Profit was an increase in the Net Current Accident Year Losses and LAE Ratio. While Commission Expenses increased for the six months ended June 30, 2018 compared to the same period in 2017, this was in line with Net Earned Premium growth resulting in relatively consistent ratios period over period.

For more detail on Underwriting Profit (Loss), see the U.S. Insurance, Int’l Insurance and GlobalRe reporting segment results sections included herein.

A major component of our Underwriting Profit (Loss) is Net Losses and LAE.  The following table presents the current and prior accident year (“AY”) changes in our Net Losses and LAE Ratio for the three and six months ended June 30, 2018 and 2017:

	Three Months Ended June 30,						Point
	2018			2017			Change
Net Losses and LAE Ratio		59.3	%		60.3	%		(1.0	)
Net Prior AY Reserve (Release)/Strengthening		0.4	%		2.7	%		(2.3	)
Net Current AY Losses and LAE Ratio		58.9	%		57.6	%		1.3

	Six Months Ended June 30,						Point
	2018			2017			Change
Net Losses and LAE Ratio		58.5	%		59.8	%		(1.3	)
Net Prior AY Reserve (Release)/Strengthening		0.5	%		2.6	%		(2.1	)
Net Current AY Losses and LAE Ratio		58.0	%		57.2	%		0.8

Quarter to Date Variance

For the three months ended June 30, 2018, our Reported Net Losses and LAE Ratio decreased 1.0 points as compared to the same period in 2017 driven by:

Prior Year Reserve Development

For the three months ended June 30, 2018, our Net Prior AY Losses and LAE Ratio decreased 2.3 points as compared to the same period in 2017 driven by:

• The three months ended June 30, 2018 recognized $1.4 million of Net Prior AY Reserve Strengthening. This strengthening was attributable to unfavorable non-catastrophe related loss emergence within our Int’l Insurance reporting segment, partially offset by net catastrophe loss releases primarily related to the Hurricane events and the Puebla, Mexico Earthquake that occurred in the third quarter of 2017 within our U.S. and Int’l Insurance reporting segments.

• The three months ended June 30, 2017 recognized $8.0 million of Net Prior AY Reserve Strengthening. This strengthening was primarily related to attritional loss development in our Int’l Insurance reporting segment and the settlement of a large Accident & Health (“A&H”) claim in our GlobalRe reporting segment.

Changes in the Current Accident Year Loss Ratio

For the three months ended June 30, 2018, our Net Current AY losses and LAE Ratio increased 1.3 points as compared to the same period in 2017 primarily driven by unfavorable performance within our Int’l Insurance reporting segment and changes in mix of business, partially offset by a lower level of catastrophe losses within our GlobalRe reporting segment.

Year to Date Variance

For the six months ended June 30, 2018, our Reported Net Losses and LAE Ratio decreased 1.3 points as compared to the same period in 2017 driven by:

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Prior Year Reserve Development

For the six months ended June 30, 2018, our Net Prior AY Losses and LAE Ratio decreased 2.1 points as compared to the same period in 2017 driven by:

• The six months ended June 30, 2018 recognized $3.3 million of Net Prior AY Reserve Strengthening. This strengthening was attributable to unfavorable non-catastrophe related loss emergence within our U.S. and Int’l Insurance reporting segments, partially offset by net catastrophe loss releases primarily related to the Hurricane events and the Puebla, Mexico Earthquake that occurred in the third quarter of 2017.

• The six months ended June 30, 2017 recognized $15.1 million of Net Prior AY Reserve Strengthening attributable to the same drivers as the quarter to date variance.

Changes in the Current Accident Year Loss Ratio

For the six months ended June 30, 2018, our Net Current AY losses and LAE Ratio increased 0.8 points as compared to the same period in 2017 attributable to the same drivers as the quarter to date variance.

Net Investment Income

Our Net Investment Income was derived from the following sources:

	Three Months Ended June 30,						Six Months Ended June 30,
amounts in thousands	2018			2017			2018			2017
Fixed Maturities	$	21,719		$	19,186		$	42,771		$	37,527
Equity Securities		3,161			3,780			6,086			7,564
Short-Term Investments, Cash & Cash Equivalents		415			87			642			170
Other Invested Assets		141			113			327			242
Total Investment Income	$	25,436		$	23,166		$	49,826		$	45,503
Investment Expenses		(835	)		(901	)		(1,523	)		(1,790	)
Net Investment Income	$	24,601		$	22,265		$	48,303		$	43,713

Quarter and Year to Date Variance

The increase in Net Investment Income for the three and six months ended June 30, 2018 as compared to the same period in the prior year was due to growth of invested assets in the Fixed Maturities portfolio. The annualized pre-tax yield, excluding Total Net Realized and Unrealized Gains and Losses recognized in our Results of Operations, for the three months ended June 30, 2018 and 2017 was 2.8%. The annualized pre-tax yield, excluding Total Net Realized and Unrealized Gains and Losses recognized in our Results of Operations, for the six months ended June 30, 2018 was 2.8%, compared to 2.7% for the same period in 2017.

As part of our overall investment strategy, we seek to build a tax efficient investment portfolio by maintaining an allocation of tax- exempt municipal bonds. The tax-exempt portion of our Fixed Maturities portfolio was 17.6% at June 30, 2018 as compared to 19.5% at June 30, 2017. Additionally, substantially all of our equity portfolio is invested in tax efficient securities which qualify for the dividends received deduction. The tax equivalent yield for the three months ended June 30, 2018 and 2017 was 3.0% and 3.2%, respectively. The tax equivalent yield for the six months ended June 30, 2018 and 2017 was 3.0% and 3.1%, respectively. The decrease in the tax equivalent yield is due to the Tax Cuts and Jobs Act enacted on December 22, 2017 (the “Tax Act”), which resulted in lower tax benefits associated with the tax exempt portions of our investment portfolio.

OTTI Losses Recognized in Earnings

Quarter and Year to Date Variance

Our Company had no credit related OTTI losses during the three months ended June 30, 2018 and 2017. Our Company had no credit related OTTI losses during the six months ended June 30, 2018. Our Company had two credit related OTTI losses of $1.1 million in our equity portfolio during the six months ended June 30, 2017.  Upon the adoption of ASU 2016-01 as of January 1, 2018, changes in the fair value of Equity Securities are now recognized in Net Income.

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Net Realized Gains and Losses on Investments Sold

Net Realized Gains and Losses on Investments Sold, excluding OTTI Losses Recognized in Earnings, for the periods indicated were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
amounts in thousands	2018			2017			2018			2017
Fixed Maturities:
Gains	$	1,541		$	344		$	3,347		$	812
Losses		(481	)		(958	)		(756	)		(2,214	)
Fixed Maturities, Net	$	1,060		$	(614	)	$	2,591		$	(1,402	)
Short-Term Investments, Cash & Cash Equivalents:
Gains	$	63		$	119		$	81		$	226
Losses		(21	)		(45	)		(195	)		(125	)
Short-Term, Net	$	42		$	74		$	(114	)	$	101
Other Invested Assets:
Gains	$	20		$	16		$	70		$	21
Losses		(45	)		(24	)		(86	)		(135	)
Other Invested Assets, Net	$	(25	)	$	(8	)	$	(16	)	$	(114	)
Equity Securities:
Gains	$	754		$	2,470		$	754		$	4,386
Losses		(44	)		(228	)		(259	)		(228	)
Equity Securities, Net	$	710		$	2,242		$	495		$	4,158
Net Realized Gains on Investments Sold	$	1,787		$	1,694		$	2,956		$	2,743

Quarter and Year to Date Variance

Net Realized Gains and Losses are generated as part of the normal ongoing management of our investment portfolio. Net Realized Gains of $1.8 million for the three months ended June 30, 2018 are primarily due to the sale of Municipal Bonds as we re-evaluate this asset class in light of the tax changes enacted as part of the Tax Act in 2017.  To a lesser extent, realized gains are driven by sales of Preferred Stocks within our Equity portfolio. Net Realized Gains of $3.0 million for the six months ended June 30, 2018 are primarily due to the sale of Municipal Bond and Corporate Exposures. Net Realized Gains of $1.7 million and $2.7 million for the three and six months ended June 30, 2017, respectively, are primarily due to the sale of Common Equity Securities, partially offset by foreign currency losses on our Canadian denominated Foreign Government Bonds

Net Unrealized Gains and Losses on Investments at Fair Value through Net Income

Quarter and Year to Date Variance

For the three and six months ended June 30, 2018, our Company had $1.3 million of net unrealized gains and $1.9 million of net unrealized losses, respectively, on our Equity Securities, which were recognized in Net Income pursuant to ASU 2016-01, which we adopted effective January 1, 2018.

Interest Expense

Quarter and Year to Date Variance

Interest Expense was $3.9 million and $7.7 million for the three and six months ended June 30, 2018, respectively, relating to our $265.0 million principal amount of the Senior Notes.  The effective interest rate related to the Senior Notes, based on the proceeds net of discount and all issuance costs, is approximately 5.86%.

34

Other Income (Loss)

Quarter to Date Variance

Other Income (Loss) for the three months ended June 30, 2018 was $2.6 million compared to $(0.4) million for the same period in 2017. The Other Income for the three months ended June 30, 2018 was attributable to net realized and unrealized foreign exchange gains driven by the re-measurement of net insurance related liabilities impacted by the strengthening of the U.S. Dollar against the Great British pound, Euro and Canadian Dollar.

Year to Date Variance

Other Income for the six months ended June 30, 2018 was $2.5 million compared to $0.6 million for the same period in 2017. The Other Income for the six months ended June 30, 2018 was attributable to revenue from the sale of renewal rights for our Company’s fixed-premium protection and indemnity business during the first quarter as well as net realized and unrealized foreign exchange gains driven by the re-measurement of net insurance related liabilities impacted by the strengthening of the U.S. Dollar against the Great British pound, Euro and Canadian Dollar.

Income Taxes

Quarter and Year to Date Variance

We recorded an Effective Tax Rate of 19.3% and 18.1% for the three and six months ended June 30, 2018, respectively, compared to 25.4% and 26.0% for the same periods in 2017. The decrease of 6.1 points and 7.9 points for the three and six months ended June 30, 2018, respectively, is mostly driven by the benefit of the lowered statutory tax rate from 35% in 2017 to 21% in 2018 under the Tax Act. The income tax provision has been computed based on our estimated interim annual Effective Tax Rate incorporating discrete items. Our Effective Tax Rate for the quarter and year-to-date differs from the federal tax rate of 21% primarily due to tax-exempt investment income, the dividends received deduction, and an excess tax benefit related to the vesting of stock compensation at fair market value.

Segment Results

The following tables summarize our Consolidated Financial Results by reporting segment for the three and six months ended June 30, 2018 and 2017:

	Three Months Ended June 30, 2018
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	179,746		$	92,071		$	59,198		$	—		$	331,015
Net Losses and LAE		(111,885	)		(52,304	)		(32,144	)		—			(196,333	)
Commission Expenses		(20,382	)		(19,863	)		(13,148	)		200			(53,193	)
Other Operating Expenses		(38,447	)		(23,299	)		(6,436	)		—			(68,182	)
Other Underwriting Income (Expense)		71			—			136			(200	)		7
Underwriting Profit (Loss)	$	9,103		$	(3,395	)	$	7,606		$	—		$	13,314
Net Investment Income											24,601			24,601
Total Net Realized and Unrealized Gains											3,116			3,116
Interest Expense											(3,864	)		(3,864	)
Other Income											2,621			2,621
Income (Loss) Before Income Taxes	$	9,103		$	(3,395	)	$	7,606		$	26,474		$	39,788
Income Tax Expense											(7,684	)		(7,684	)
Net Income													$	32,104
Losses and LAE Ratio		62.2	%		56.8	%		54.3	%					59.3	%
Commission Expense Ratio		11.3	%		21.6	%		22.2	%					16.1	%
Other Operating Expense Ratio (2)		21.4	%		25.3	%		10.7	%					20.6	%
Combined Ratio		94.9	%		103.7	%		87.2	%					96.0	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

35

	Three Months Ended June 30, 2017
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	167,087		$	82,100		$	44,648		$	—		$	293,835
Net Losses and LAE		(105,270	)		(44,095	)		(27,745	)		—			(177,110	)
Commission Expenses		(20,460	)		(19,001	)		(8,970	)		258			(48,173	)
Other Operating Expenses		(33,140	)		(22,506	)		(5,120	)		—			(60,766	)
Other Underwriting Income (Expense)		100			—			169			(258	)		11
Underwriting Profit (Loss)		8,317			(3,502	)		2,982		$	—			7,797
Net Investment Income											22,265			22,265
Total Net Realized and Unrealized Gains											1,694			1,694
Interest Expense											(3,861	)		(3,861	)
Other Loss											(422	)		(422	)
Income (Loss) Before Income Taxes	$	8,317		$	(3,502	)	$	2,982		$	19,676		$	27,473
Income Tax Expense											(6,971	)		(6,971	)
Net Income													$	20,502
Losses and LAE Ratio		63.0	%		53.7	%		62.1	%					60.3	%
Commission Expense Ratio		12.2	%		23.1	%		20.1	%					16.4	%
Other Operating Expense Ratio (2)		19.8	%		27.5	%		11.1	%					20.6	%
Combined Ratio		95.0	%		104.3	%		93.3	%					97.3	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

	Six Months Ended June 30, 2018
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	352,659		$	185,281		$	115,702		$	—		$	653,642
Net Losses and LAE		(222,307	)		(98,147	)		(62,024	)		—			(382,478	)
Commission Expenses		(41,243	)		(39,619	)		(26,916	)		433			(107,345	)
Other Operating Expenses		(75,438	)		(43,829	)		(11,841	)		—			(131,108	)
Other Underwriting Income (Expense)		169			—			274			(433	)		10
Underwriting Profit	$	13,840		$	3,686		$	15,195		$	—		$	32,721
Net Investment Income											48,303			48,303
Total Net Realized and Unrealized Gains											1,104			1,104
Interest Expense											(7,728	)		(7,728	)
Other Income											2,501			2,501
Income Before Income Taxes	$	13,840		$	3,686		$	15,195		$	44,179		$	76,901
Income Tax Expense											(13,919	)		(13,919	)
Net Income													$	62,982
Losses and LAE Ratio		63.0	%		53.0	%		53.6	%					58.5	%
Commission Expense Ratio		11.7	%		21.4	%		23.3	%					16.4	%
Other Operating Expense Ratio (2)		21.4	%		23.6	%		10.0	%					20.1	%
Combined Ratio		96.1	%		98.0	%		86.9	%					95.0	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

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	Six Months Ended June 30, 2017
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	331,091		$	166,186		$	82,689		$	—		$	579,966
Net Losses and LAE		(204,096	)		(94,800	)		(47,814	)		—			(346,710	)
Commission Expenses		(40,844	)		(38,234	)		(17,462	)		523			(96,017	)
Other Operating Expenses		(66,612	)		(42,299	)		(10,393	)		—			(119,304	)
Other Underwriting Income (Expense)		210			—			345			(523	)		32
Underwriting Profit (Loss)	$	19,749		$	(9,147	)	$	7,365		$	—		$	17,967
Net Investment Income											43,713			43,713
Total Net Realized and Unrealized Gains											1,650			1,650
Interest Expense											(7,722	)		(7,722	)
Other Income											625			625
Income (Loss) Before Income Taxes	$	19,749		$	(9,147	)	$	7,365		$	38,266		$	56,233
Income Tax Expense											(14,621	)		(14,621	)
Net Income													$	41,612
Losses and LAE Ratio		61.6	%		57.0	%		57.8	%					59.8	%
Commission Expense Ratio		12.3	%		23.0	%		21.1	%					16.6	%
Other Operating Expense Ratio (2)		20.1	%		25.5	%		12.2	%					20.5	%
Combined Ratio		94.0	%		105.5	%		91.1	%					96.9	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

U.S. Insurance

The following tables summarize our Underwriting Profit (Loss) by operating segment for our U.S. Insurance reporting segment for the three and six months ended June 30, 2018 and 2017:

	U.S. Insurance
	Three Months Ended June 30, 2018
amounts in thousands	Marine			P&C			Professional Liability			Total			%Change Total
Gross Written Premiums	$	38,830		$	217,984		$	31,664		$	288,478			12.2	%
Ceded Written Premiums		(16,918	)		(54,835	)		(4,391	)		(76,144	)		3.1	%
Net Written Premiums		21,912			163,149			27,273			212,334			15.8	%
Net Earned Premiums	$	21,177		$	132,630		$	25,939		$	179,746			7.6	%
Net Losses and LAE		(9,517	)		(86,192	)		(16,176	)		(111,885	)		6.3	%
Commission Expenses		(780	)		(15,089	)		(4,513	)		(20,382	)		(0.4	%)
Other Operating Expenses		(6,934	)		(26,231	)		(5,282	)		(38,447	)		16.0	%
Other Underwriting Income		53			13			5			71			(29.0	%)
Underwriting Profit (Loss)	$	3,999		$	5,131		$	(27	)	$	9,103			9.5	%
Losses and LAE Ratio		44.9	%		65.0	%		62.4	%		62.2	%
Commission Expense Ratio		3.7	%		11.4	%		17.4	%		11.3	%
Other Operating Expense Ratio (1)		32.5	%		19.7	%		20.3	%		21.4	%
Combined Ratio		81.1	%		96.1	%		100.1	%		94.9	%

(1) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

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	U.S. Insurance
	Three Months Ended June 30, 2017
amounts in thousands	Marine			P&C			Professional Liability			Total
Gross Written Premiums	$	41,687		$	187,492		$	28,007		$	257,186
Ceded Written Premiums		(19,451	)		(51,147	)		(3,259	)		(73,857	)
Net Written Premiums		22,236			136,345			24,748			183,329
Net Earned Premiums	$	21,812		$	121,226		$	24,049		$	167,087
Net Losses and LAE		(12,767	)		(77,858	)		(14,645	)		(105,270	)
Commission Expenses		(1,575	)		(15,232	)		(3,653	)		(20,460	)
Other Operating Expenses		(6,798	)		(21,645	)		(4,697	)		(33,140	)
Other Underwriting Income		82			9			9			100
Underwriting Profit	$	754		$	6,500		$	1,063		$	8,317
Losses and LAE Ratio		58.5	%		64.2	%		60.9	%		63.0	%
Commission Expense Ratio		7.2	%		12.6	%		15.2	%		12.2	%
Other Operating Expense Ratio (1)		30.8	%		17.8	%		19.5	%		19.8	%
Combined Ratio		96.5	%		94.6	%		95.6	%		95.0	%

(1) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

	U.S. Insurance
	Six Months Ended June 30, 2018
amounts in thousands	Marine			P&C			Professional Liability			Total			%Change Total
Gross Written Premiums	$	80,554		$	386,177		$	61,675		$	528,406			6.8	%
Ceded Written Premiums		(34,398	)		(99,747	)		(8,580	)		(142,725	)		5.5	%
Net Written Premiums		46,156			286,430			53,095			385,681			7.3	%
Net Earned Premiums	$	42,269		$	260,220		$	50,170		$	352,659			6.5	%
Net Losses and LAE		(25,269	)		(167,110	)		(29,928	)		(222,307	)		8.9	%
Commission Expenses		(2,188	)		(30,256	)		(8,799	)		(41,243	)		1.0	%
Other Operating Expenses		(13,209	)		(51,855	)		(10,374	)		(75,438	)		13.3	%
Other Underwriting Income		130			28			11			169			(19.5	%)
Underwriting Profit	$	1,733		$	11,027		$	1,080		$	13,840			(29.9	%)
Losses and LAE Ratio		59.8	%		64.2	%		59.7	%		63.0	%
Commission Expense Ratio		5.2	%		11.6	%		17.5	%		11.7	%
Other Operating Expense Ratio (1)		30.9	%		20.0	%		20.6	%		21.4	%
Combined Ratio		95.9	%		95.8	%		97.8	%		96.1	%

(1) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

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	U.S. Insurance
	Six Months Ended June 30, 2017
amounts in thousands	Marine			P&C			Professional Liability			Total
Gross Written Premiums	$	82,637		$	358,126		$	54,028		$	494,791
Ceded Written Premiums		(36,971	)		(89,345	)		(9,028	)		(135,344	)
Net Written Premiums		45,666			268,781			45,000			359,447
Net Earned Premiums	$	44,506		$	240,349		$	46,236		$	331,091
Net Losses and LAE		(26,542	)		(149,607	)		(27,947	)		(204,096	)
Commission Expenses		(3,047	)		(30,598	)		(7,199	)		(40,844	)
Other Operating Expenses		(13,619	)		(43,459	)		(9,534	)		(66,612	)
Other Underwriting Income		165			27			18			210
Underwriting Profit	$	1,463		$	16,712		$	1,574		$	19,749
Losses and LAE Ratio		59.6	%		62.2	%		60.4	%		61.6	%
Commission Expense Ratio		6.8	%		12.7	%		15.6	%		12.3	%
Other Operating Expense Ratio (1)		30.3	%		18.1	%		20.6	%		20.1	%
Combined Ratio		96.7	%		93.0	%		96.6	%		94.0	%

(1) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

Gross Written Premiums

Quarter to Date Variance

Gross Written Premiums increased $31.3 million for the three months ended June 30, 2018 as compared to the same period in 2017, driven by a $30.5 million and $3.7 million increase in our P&C and Professional Liability operating segments, respectively, partially offset by a decrease in our Marine operating segment of $2.9 million.

The decrease in our Marine operating segment was driven by a decrease in our Craft product due to nonrenewal of an underperforming program, offset by an increase in our Inland Marine product due to new business and an increased level of renewals.

The increase in our P&C operating segment was mainly driven by increases in our Excess Casualty, Auto and Other P&C divisions. The increase in our Excess Casualty division was mostly driven by an increased level of renewals, new business, and improved rates. New business production drove increases in our Property product within our Other P&C division as well as our Auto division

The increase in our Professional Liability operating segment was primarily due to increased rates, new business and an increased level of renewals.

Average renewal premium rates for our U.S. Insurance reporting segment for the three months ended June 30, 2018 increased 3.4% compared to the same period in 2017, driven by increases of 4.5%, 1.3% and 0.2% within our P&C, Professional Liability and Marine operating segments, respectively.

Year to Date Variance

Gross Written Premiums increased $33.6 million for the six months ended June 30, 2018 as compared to the same period in 2017, driven by a $28.1 million and $7.6 million increase in our P&C and Professional Liability operating segments, respectively, partially offset by a decrease in our Marine operating segment of $2.1 million.

The decrease in our Marine operating segment was driven by a decrease in our Craft product due to nonrenewal of an underperforming program. This decrease was partially offset by an increase in our Marine Liability product due to the timing of renewals and rate improvement as well as an increase in our Inland Marine product driven by new business and an increased level of renewals.

The increase in our P&C operating segment was driven by increases in our Other P&C, Auto, Excess Casualty, and Environmental divisions, partially offset by a decrease in our Primary Casualty division. New business production and increased renewal rates drove increases in our Property product within our Other P&C division as well as our Auto division. The increase in our Excess Casualty division was attributable to new business and improved rates on renewals for our Commercial Retail Excess Casualty product,

39

partially offset by a decrease in premium for our Specialty Wholesale Excess Casualty product due to two large non-recurring construction projects coverage accounts written in the first quarter of 2017. The increase in our Environmental division was attributable to an increased level of renewals including the renewal of multi-year contracts not available for renewal in the prior year. The decrease in our Primary Casualty division was related to the nonrenewal of underperforming accounts.

The increase in our Professional Liability operating segment was attributable to the same drivers as the quarter to date variance.

Average renewal premium rates for our U.S. Insurance reporting segment for the six months ended June 30, 2018 increased 3.1% compared to the same period in 2017, driven by increases of 3.8%, 1.7% and 1.5% within our P&C, Professional Liability and Marine operating segments, respectively.

Ceded Written Premiums

Quarter to Date Variances

Ceded Written Premiums were $76.1 million, resulting in a retention ratio of 73.6% of Net Written Premiums to Gross Written Premiums, for the three months ended June 30, 2018 compared to $73.9 million, resulting in a retention ratio of 71.3%, for the same period in 2017. The increase in the retention ratio was driven by our Marine and P&C operating segments, partially offset by a decrease in the retention ratio for our Professional Liability operating segment.

The increase in our Marine operating segment’s retention ratio was primarily driven by a reduction in proportional reinsurance in our Craft product related to business that was not renewed which had proportional cessions, partially offset by an increase in quota share cessions on our Fishing Vessels product in 2018.

The increase in our P&C operating segment’s retention ratio was primarily the result of additional reinsurance on our Property product impacting the second quarter of 2017.

The decrease in our Professional Liability operating segment’s retention ratio for the three months ended June 30, 2018 was primarily the result of an excess of loss increased ceded premium estimate on our E&O division in the second quarter of 2017. This decrease was partially offset by a reduction in proportional reinsurance coverage that supports our D&O division.

Year to Date Variances

Ceded Written Premiums were $142.7 million, resulting in a retention ratio of 73.0%, for the six months ended June 30, 2018 compared to $135.3 million, resulting in a retention ratio of 72.6%, for the same period in 2017. The increase in the retention ratio was driven by our Marine and Professional Liability operating segments, partially offset by a decrease in the retention ratio for our P&C operating segment.

The increase in our Marine operating segment’s retention ratio was attributable to the same drivers as the quarter to date variance.

The decrease in our P&C operating segment’s retention ratio was primarily the result of changes in the mix of business within this operating segment.

The increase in our Professional Liability operating segment’s retention ratio was primarily attributable to a reduction in proportional reinsurance coverage that supports our D&O division.

Net Earned Premiums

Quarter and Year to Date Variances

Net Earned Premiums increased $12.7 million and $21.6 million for the three and six months ended June 30, 2018, respectively, as compared to the same periods in 2017 driven by growth in our P&C operating segment and recent reductions in the level of proportional reinsurance within our Professional Liability operating segment. These increases in Net Earned Premiums were partially offset by a reduction in the amount of premiums written in our Marine operating segment as well as the impact of increased proportional reinsurance on our Property product within the P&C operating segment.

40

Net Losses and LAE

The Net Losses and LAE reserves as of June 30, 2018 and December 31, 2017 were as follows:

	U.S. Insurance
	As of June 30, 2018								As of December 31, 2017
amounts in thousands	Marine		P&C		Professional Liability		Total		Marine		P&C		Professional Liability		Total		Total % Change
Case Reserves	$	51,576	$	197,765	$	34,839	$	284,180	$	58,301	$	192,291	$	26,774	$	277,366		2.5	%
IBNR Reserves		50,637		740,654		87,603		878,894		45,393		700,264		86,649		832,306		5.6	%
Total	$	102,213	$	938,419	$	122,442	$	1,163,074	$	103,694	$	892,555	$	113,423	$	1,109,672		4.8	%

The following tables present the current and prior accident year changes in our Net Losses and LAE Ratio for the three and six months ended June 30, 2018 and 2017:

	U.S. Insurance
	Three Months Ended June 30, 2018												Three Months Ended June 30, 2017
							Professional												Professional						Point
	Marine			P&C			Liability			Total			Marine			P&C			Liability			Total			Change
Net Losses and LAE Ratio		44.9	%		65.0	%		62.4	%		62.2	%		58.5	%		64.2	%		60.9	%		63.0	%		(0.8	)
Net Prior AY Reserve    (Release)/Strengthening		(16.0	%)		(0.2	%)		5.5	%		(1.2	%)		1.4	%		0.0	%		0.0	%		0.2	%		(1.4	)
Net Current AY Losses and LAE Ratio		60.9	%		65.2	%		56.9	%		63.4	%		57.1	%		64.2	%		60.9	%		62.8	%		0.6

	U.S. Insurance
	Six Months Ended June 30, 2018												Six Months Ended June 30, 2017
							Professional												Professional						Point
	Marine			P&C			Liability			Total			Marine			P&C			Liability			Total			Change
Net Losses and LAE Ratio		59.8	%		64.2	%		59.7	%		63.0	%		59.6	%		62.2	%		60.4	%		61.6	%		1.4
Net Prior AY Reserve    (Release)/Strengthening		(0.2	%)		0.5	%		2.8	%		0.7	%		2.0	%		(0.5	%)		0.0	%		(0.1	%)		0.8
Net Current AY Losses and LAE Ratio		60.0	%		63.7	%		56.9	%		62.3	%		57.6	%		62.7	%		60.4	%		61.7	%		0.6

Quarter to Date Variance

For the three months ended June 30, 2018, our Net Losses and LAE Ratio decreased 0.8 points as compared to the same period in 2017 driven by:

Prior Year Reserve Development

For the three months ended June 30, 2018, our Net Prior AY Losses and LAE Ratio decreased 1.4 points as compared to the same period in 2017 primarily driven by:

• Our Marine operating segment recognized $3.4 million of Net Prior AY Reserve Releases attributable to $1.4 million of catastrophe loss release related to the Hurricane events that occurred in the third quarter of 2017 and $2.0 million of loss releases due to better than expected loss emergence in our Marine Liability and Hull products. This compares to $0.3 million of Net Prior AY Reserve Strengthening for the same period in 2017.

The above decrease in our Net Prior AY Loss and LAE Ratio was partially offset by:

• Our Professional Liability operating segment recognized $1.4 million of Net Prior AY Reserve Strengthening related to worse than expected loss emergence within our E&O and D&O divisions.

Changes in the Current Accident Year Loss Ratio

For the three months ended June 30, 2018, our Net Current AY Losses and LAE Ratio increased 0.6 points as compared to the same period in 2017, primarily driven by increases in our P&C and Marine operating segments due to unfavorable performance within certain key products, partially offset by changes in product mix and favorable performance within our Professional Liability operating segment.

41

Year to Date Variance

For the six months ended June 30, 2018, our Net Losses and LAE Ratio increased 1.4 points as compared to the same period in 2017 driven by:

Prior Year Reserve Development

For the six months ended June 30, 2018, our Net Prior AY Losses and LAE Ratio increased 0.8 points as compared to the same period in 2017 primarily driven by:

• Our P&C operating segment recognized $1.3 million of Net Prior AY Reserve Strengthening related to $2.4 million of adverse development primarily due to worse than expected loss emergence within our Property and Other P&C products, partially offset by $1.1 million of catastrophe loss release related to the Hurricane events that occurred in the third quarter of 2017 mainly within our Property product. This compares to $1.1 million of Net Prior AY Reserve Releases for the same period in 2017 due to favorable loss emergence within our Environmental and Excess Casualty divisions.

• Our Professional Liability operating segment recognized $1.4 million of Net Prior AY Reserve Strengthening related to the same drivers as the quarter to date.

The above increases in our Net Prior AY Loss and LAE Ratio were partially offset by:

• Our Marine operating segment recognized $0.1 million of Net Prior AY Reserve Releases primarily due to catastrophe loss release related to the Hurricane events that occurred in the third quarter of 2017 and better than expected loss emergence in our Marine Liability and Hull products, offset by worse than expected loss emergence on our Craft and Fishing Vessel product lines. This compares to $0.9 million of Net Prior AY reserve strengthening for the six months ended June 30, 2017 due to large loss activity.

Changes in the Current Accident Year Loss Ratio

For the six months ended June 30, 2018, our Net Current AY Losses and LAE Ratio increased 0.6 points as compared to the same period in 2017, attributable to the same drivers as the quarter to date variance.

Commission Expenses

Quarter and Year to Date Variances

Our Commission Expense Ratio for the three and six months ended June 30, 2018 decreased 0.9 points and 0.6 points as compared to the same periods in 2017, mostly driven by our Marine and P&C operating segments, partially offset by an increase in our Professional Liability operating segment.

Our Marine operating segment’s Commission Expense Ratio decreased due to lower gross commission rates on certain product lines, changes in the mix of business, and greater ceded profit commission income.

Our P&C operating segment’s Commission Expense Ratio decreased primarily due changes in the mix of business with an increase in Property business which generates greater ceding commission income related to a large proportional reinsurance program.

Our Professional Liability operating segment’s Commission Expense Ratio increased due to the reduction in proportional reinsurance and the related ceding commission benefits primarily within our D&O division.

Other Operating Expenses

Quarter and Year to Date Variances

Other Operating Expenses for the three and six months ended June 30, 2018 increased $5.3 million and $8.8 million, respectively, as compared to the same periods in 2017, primarily due to an increase in costs associated with new business initiatives including applicable support and information technology expenses as well as higher professional service fees.

42

Int’l Insurance

The following tables summarize our Underwriting Profit (Loss) by operating segment for our Int’l Insurance reporting segment for the three and six months ended June 30, 2018 and 2017: 

	Int'l Insurance
	Three Months Ended June 30, 2018
amounts in thousands	Marine			P&C			Professional Liability			Total			%Change Total
Gross Written Premiums	$	40,714		$	46,579		$	45,230		$	132,523			1.0	%
Ceded Written Premiums		(11,523	)		(17,705	)		(10,654	)		(39,882	)		(9.0	%)
Net Written Premiums		29,191			28,874			34,576			92,641			6.0	%
Net Earned Premiums	$	37,197		$	23,715		$	31,159		$	92,071			12.1	%
Net Losses and LAE		(29,287	)		(6,294	)		(16,723	)		(52,304	)		18.6	%
Commission Expenses		(8,945	)		(2,984	)		(7,935	)		(19,863	)		4.5	%
Other Operating Expenses		(7,931	)		(8,703	)		(6,664	)		(23,299	)		3.5	%
Underwriting Profit (Loss)	$	(8,966	)	$	5,734		$	(163	)	$	(3,395	)		(3.0	%)
Losses and LAE Ratio		78.7	%		26.5	%		53.7	%		56.8	%
Commission Expense Ratio		24.0	%		12.6	%		25.5	%		21.6	%
Other Operating Expense Ratio		21.4	%		36.7	%		21.3	%		25.3	%
Combined Ratio		124.1	%		75.8	%		100.5	%		103.7	%

	Int'l Insurance
	Three Months Ended June 30, 2017
amounts in thousands	Marine			P&C			Professional Liability			Total
Gross Written Premiums	$	49,597		$	46,663		$	34,933		$	131,193
Ceded Written Premiums		(12,536	)		(20,362	)		(10,911	)		(43,809	)
Net Written Premiums		37,061			26,301			24,022			87,384
Net Earned Premiums	$	39,525		$	23,337		$	19,238		$	82,100
Net Losses and LAE		(23,848	)		(8,867	)		(11,380	)		(44,095	)
Commission Expenses		(9,517	)		(4,577	)		(4,907	)		(19,001	)
Other Operating Expenses		(9,226	)		(7,946	)		(5,334	)		(22,506	)
Underwriting Profit (Loss)	$	(3,066	)	$	1,947		$	(2,383	)	$	(3,502	)
Losses and LAE Ratio		60.3	%		38.0	%		59.2	%		53.7	%
Commission Expense Ratio		24.1	%		19.6	%		25.5	%		23.1	%
Other Operating Expense Ratio		23.4	%		34.1	%		27.7	%		27.5	%
Combined Ratio		107.8	%		91.7	%		112.4	%		104.3	%

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	Int'l Insurance
	Six Months Ended June 30, 2018
amounts in thousands	Marine			P&C			Professional Liability			Total			% Change Total
Gross Written Premiums	$	97,192		$	80,539		$	82,664		$	260,395			(4.6	%)
Ceded Written Premiums		(19,577	)		(31,372	)		(17,821	)		(68,770	)		(23.9	%)
Net Written Premiums		77,615			49,167			64,843			191,625			4.9	%
Net Earned Premiums	$	76,476		$	45,484		$	63,321		$	185,281			11.5	%
Net Losses and LAE		(49,733	)		(15,517	)		(32,897	)		(98,147	)		3.5	%
Commission Expenses		(18,675	)		(5,549	)		(15,396	)		(39,619	)		3.6	%
Other Operating Expenses		(14,741	)		(16,382	)		(12,705	)		(43,829	)		3.6	%
Underwriting Profit (Loss)	$	(6,673	)	$	8,036		$	2,323		$	3,686		NM
Losses and LAE Ratio		65.0	%		34.1	%		52.0	%		53.0	%
Commission Expense Ratio		24.4	%		12.2	%		24.3	%		21.4	%
Other Operating Expense Ratio (1)		19.3	%		36.0	%		20.0	%		23.6	%
Combined Ratio		108.7	%		82.3	%		96.3	%		98.0	%

NM – Percentage change not meaningful

	Int'l Insurance
	Six Months Ended June 30, 2017
amounts in thousands	Marine			P&C			Professional Liability			Total
Gross Written Premiums	$	118,430		$	87,031		$	67,592		$	273,053
Ceded Written Premiums		(23,462	)		(50,008	)		(16,932	)		(90,402	)
Net Written Premiums		94,968			37,023			50,660			182,651
Net Earned Premiums	$	77,020		$	45,517		$	43,649		$	166,186
Net Losses and LAE		(44,449	)		(24,736	)		(25,615	)		(94,800	)
Commission Expenses		(19,058	)		(8,319	)		(10,857	)		(38,234	)
Other Operating Expenses		(17,666	)		(14,369	)		(10,264	)		(42,299	)
Underwriting Loss	$	(4,153	)	$	(1,907	)	$	(3,087	)	$	(9,147	)
Losses and LAE Ratio		57.7	%		54.3	%		58.7	%		57.0	%
Commission Expense Ratio		24.7	%		18.3	%		24.9	%		23.0	%
Other Operating Expense Ratio (1)		23.0	%		31.6	%		23.5	%		25.5	%
Combined Ratio		105.4	%		104.2	%		107.1	%		105.5	%

Gross Written Premiums

Quarter to Date Variance

Gross Written Premiums increased $1.3 million for the three months ended June 30, 2018 compared to the same period in 2017, driven by an increase in our Professional Liability operating segment of $10.3 million, partially offset by decreases in our Marine operating segment of $8.9 million.

The decrease in our Marine operating segment was driven by decreases in our Hull, Transport, Marine Liability, Cargo, and Specie products. The decrease in our Hull product was primarily related to the timing of certain construction driven contracts and non-renewals. The decrease in our Transport and Marine Liability products was primarily driven by declined renewals of several large binding authorities. The decrease in our Cargo product was related to remedial actions on certain accounts. The decrease in our Specie product was related to timing and non-renewals.

Gross Written Premiums remained relatively consistent in our P&C operating segment as declines in our Property division were offset by increases in our General Liability, Energy & Engineering and Political Violence & Terrorism divisions driven by new business production. The decrease in our Property division was related to strategic actions taken to exit our International and North American Property businesses in 2017.

44

The increase in our Professional Liability operating segment was primarily driven by rate improvement and growth in new business across all divisions within this operating segment.

Average renewal premium rates for our Int’l Insurance reporting segment for the three months ended June 30, 2018 increased 2.7% compared to the same period in 2017, driven by increases of 5.0%, 2.0% and 0.8% in our P&C, Professional Liability and Marine operating segments, respectively.

Year to Date Variance

Gross Written Premiums decreased $12.7 million for the six months ended June 30, 2018 compared to the same period in 2017, driven by decreases in our Marine and P&C operating segments of $21.2 million and $6.5 million, respectively, partially offset by an increase in our Professional Liability operating segment of $15.1 million.

The decrease in our Marine operating segment was due to decreases in our Transport, Protection & Indemnity, Marine Liability, and Hull products. The decreases in our Transport, Marine Liability, and Hull products were attributable to the same drivers as the quarter to date variances. The decrease in our Protection & Indemnity product was driven by timing of renewals and policy cancellations associated with decision to sell the renewal rights to our fixed-premium protection and indemnity business.

The decrease in our P&C operating segment was attributable to the same drivers as the quarter to date variance.

The increase in our Professional Liability operating segment was attributable to the same drivers as the quarter to date variance.

Average renewal premium rates for our Int’l Insurance reporting segment for the six months ended June 30, 2018 increased 2.9% compared to the same period in 2017, driven by increases of 4.6%, 2.4% and 1.4% in our P&C, Marine and Professional Liability operating segments, respectively.

Ceded Written Premiums

Quarter and Year to Date Variance

Ceded Written Premiums were $39.9 million, resulting in a retention ratio of 69.9% of Net Written Premiums to Gross Written Premiums, and $68.8 million, resulting in a retention ratio of 73.6%, for the three and six months ended June 30, 2018, respectively. This compares to $43.8 million, resulting in a retention ratio of 66.6%, and $90.4 million, resulting in a retention ratio of 66.9%, for the three and six months ended June 30, 2017, respectively. The increase in the retention ratio was driven by our P&C and Professional Liability operating segments. The P&C operating segment’s increase was driven by 2017 strategic actions to exit our Property division, thereby ceding 100% of our North American business, which is now in the latter stages of run-off, as well as an increase in our Energy & Engineering division’s retention ratio due to a reduction in quota share reinsurance during the second quarter of 2018. The increase in our Professional Liability operating segment’s retention ratio was attributable to lower facultative and excess of loss reinsurance costs. These increases to the retention ratio were partially offset by a decrease in the retention ratio of our Marine operating segment largely driven by our renewal rights agreement with Thomas Miller Specialty in 2018 that included a 100% cession of our fixed-premium protection and indemnity business.

Net Earned Premiums

Quarter and Year to Date Variances

Net Earned Premiums increased $10.0 million and $19.1 million for the three and six months ended June 30, 2018, as compared to the same periods in 2017 driven by growth in our Professional Liability operating segment across all divisions, partially offset by the strategic actions to exit our Property division and decreased production in our Marine operating segment including the impact of our renewal rights agreement with Thomas Miller Specialty.

Net Losses and LAE

The Net Losses and LAE Reserves as of June 30, 2018 and December 31, 2017 were as follows:

	Int'l Insurance
	As of June 30, 2018								As of December 31, 2017
amounts in thousands	Marine		P&C		Professional Liability		Total		Marine		P&C		Professional Liability		Total		Total% Change
Case Reserves	$	172,149	$	75,011	$	39,551	$	286,711	$	181,369	$	66,412	$	31,463	$	279,244		2.7	%
IBNR Reserves		36,540		24,928		101,453		162,921		39,949		37,067		87,211		164,227		(0.8	%)
Total	$	208,689	$	99,939	$	141,004	$	449,632	$	221,318	$	103,479	$	118,674	$	443,471		1.4	%

45

The following tables present the current and prior accident year changes in our Net Losses and LAE Ratio for the three and six months ended June 30, 2018 and 2017:

	Int'l Insurance
	Three Months Ended June 30, 2018												Three Months Ended June 30, 2017
							Professional												Professional						Point
	Marine			P&C			Liability			Total			Marine			P&C			Liability			Total			Change
Net Losses and LAE Ratio		78.7	%		26.5	%		53.7	%		56.8	%		60.3	%		38.0	%		59.2	%		53.7	%		3.1
Net Prior AY Reserve    (Release)/Strengthening		20.6	%		(18.3	%)		0.0	%		3.6	%		8.7	%		(5.6	%)		13.5	%		5.8	%		(2.2	)
Net Current AY Losses and LAE Ratio		58.1	%		44.8	%		53.7	%		53.2	%		51.6	%		43.6	%		45.7	%		47.9	%		5.3

	Int'l Insurance
	Six Months Ended June 30, 2018												Six Months Ended June 30, 2017
							Professional												Professional						Point
	Marine			P&C			Liability			Total			Marine			P&C			Liability			Total			Change
Net Losses and LAE Ratio		65.0	%		34.1	%		52.0	%		53.0	%		57.7	%		54.3	%		58.7	%		57.0	%		(4.0	)
Net Prior AY Reserve    (Release)/Strengthening		9.1	%		(11.5	%)		(1.4	%)		0.5	%		4.1	%		7.7	%		10.8	%		6.8	%		(6.3	)
Net Current AY Losses and LAE Ratio		55.9	%		45.6	%		53.4	%		52.5	%		53.6	%		46.6	%		47.9	%		50.2	%		2.3

Quarter to Date Variance

For the three months ended June 30, 2018, our Reported Net Losses and LAE Ratio increased 3.1 points as compared to the same period in 2017 driven by:

Prior Year Reserve Development

For the three months ended June 30, 2018, our Net Prior AY Losses and LAE Ratio decreased 2.2 points as compared to the same period in 2017 primarily driven by:

• Our P&C operating segment for the three months ended June 30, 2018 recognized $4.3 million of Net Prior AY Reserve Releases related to $2.9 million of catastrophe loss release primarily related to the Hurricane events and the Puebla, Mexico Earthquake that occurred in the third quarter of 2017 and $1.4 million of net non-catastrophe related loss release with better than expected loss emergence in our Property and Political Violence & Terrorism divisions partially offset by worse than expected loss emergence within our Offshore Energy division. This compares to $1.3 million of Net Prior AY Reserve Releases for the same period in 2017 related to better than expected loss emergence in our Offshore Energy division, partially offset by worse than expected loss emergence within our Property division.

• Our Professional Liability operating segment for the three months ended June 30, 2018 did not recognize any Net Prior AY Reserve Development. This compares to $2.6 million of Net Prior AY Reserve Strengthening for the same period in 2017 primarily due to worse than expected loss emergence in our D&O and E&O divisions.

The above decreases in our Net Prior AY Loss and LAE Ratio were partially offset by:

• Our Marine operating segment for the three months ended June 30, 2018 recognized $7.7 million of Net Prior AY Reserve Strengthening including $8.0 million of reserve strengthening within the Cargo and Transport products due to worse than expected loss emergence, partially offset by $0.3 million of catastrophe loss release primarily related to the Hurricane events that occurred in the third quarter of 2017. This compares to $3.5 million of Net Prior AY Reserve Strengthening for the same period in 2017 due to worse than expected loss emergence primarily related to our Specie product.

Changes in the Current Accident Year Loss Ratio

For the three months ended June 30, 2018, our Net Current AY Losses and LAE Ratio increased 5.3 points as compared to the same period in 2017, primarily driven by unfavorable performance within certain key products within the Marine and Professional Liability operating segments, as well as increases in all three operating segments due to changes in the mix of business.

46

Year to Date Variance

For the six months ended June 30, 2018, our Reported Net Losses and LAE Ratio decreased 4.0 points as compared to the same period in 2017 driven by:

Prior Year Reserve Development

For the six months ended June 30, 2018, our Net Prior AY Losses and LAE Ratio decreased 6.3 points as compared to the same period in 2017 primarily driven by:

• Our P&C operating segment for the six months ended June 30, 2018 recognized $5.2 million of Net Prior AY Reserve Releases related to $5.8 million of catastrophe loss release primarily related to the Hurricane events and the Puebla, Mexico Earthquake that occurred in the third quarter of 2017, partially offset by $0.6 million of net non-catastrophe related reserve strengthening with unfavorable loss emergence on the runoff of our Property division’s business and worse than expected loss emergence within our Offshore Energy division partially offset by better than expected loss emergence in our Political Violence & Terrorism division. This compares to $3.5 million of Net Prior AY Reserve Strengthening for the same period in 2017 due to worse than expected loss emergence within our Property division primarily resulting from late reported claims, partially offset by better than expected loss emergence on our Offshore Energy business.

• Our Professional Liability operating segment for the six months ended June 30, 2018 recognized $0.9 million of Net Prior AY Reserve Releases related to better than expected loss emergence within our E&O division. This compares to $4.7 million of Net Prior AY Reserve Strengthening for the same period in 2017 primarily due to worse than expected loss emergence on our D&O and E&O business.

The above decreases in our Net Prior AY Loss and LAE Ratio were partially offset by:

• Our Marine operating segment for the six months ended June 30, 2018 recognized $7.0 million of Net Prior AY Reserve Strengthening, including $9.2 million of reserve strengthening primarily within the Cargo and Transport products due to worse than expected loss emergence, partially offset by $2.2 million of catastrophe loss release primarily related to the Hurricane events that occurred in the third quarter of 2017. This compares to $3.1 million of Net Prior AY Reserve Strengthening for the same period in 2017 due to worse than expected loss emergence primarily related to our Specie product.

Changes in the Current Accident Year Loss Ratio

For the six months ended June 30, 2018, our Net Current AY Losses and LAE Ratio increased 2.3 points as compared to the same period in 2017 attributable to the same drivers as the quarter to date variance.

Commission Expenses

Quarter and Year to Date Variances

Our Commission Expense Ratio for the three and six months ended June 30, 2018 decreased 1.5 points and 1.6 points, respectively, as compared to the same periods in 2017, driven by our P&C operating segment, reflecting reduced acquisition costs within our Energy & Engineering division due to a favorable adjustment to a prior underwriting year gross commission estimate and reductions in profit commission expense, as compared to the prior periods.

Other Operating Expenses

Quarter and Year to Date Variances

Other Operating Expenses for the three and six months ended June 30, 2018 increased $0.8 million and $1.5 million, respectively, as compared to the same periods in 2017 primarily due to increased professional fees, including expenses relating to the acquisition of BDM and ASCO, and the impact of foreign exchange rates. An increase in Net Earned Premiums resulted in the Other Operating Expense Ratio decreasing by 2.2 points and 1.9 points for the three and six months ended June 30, 2018, respectively, as compared to the same periods in 2017.

47

GlobalRe

The following tables summarize our Underwriting Profit for our GlobalRe reporting segment for the three and six months ended June 30, 2018 and 2017:

	GlobalRe
	Three Months Ended June 30,
amounts in thousands	2018			2017			% Change
Gross Written Premiums	$	76,235		$	63,800			19.5	%
Ceded Written Premiums		(1,918	)		(1,231	)		55.8	%
Net Written Premiums		74,317			62,569			18.8	%
Net Earned Premiums	$	59,198		$	44,648			32.6	%
Net Losses and LAE		(32,144	)		(27,745	)		15.9	%
Commission Expenses		(13,148	)		(8,970	)		46.6	%
Other Operating Expenses		(6,436	)		(5,120	)		25.7	%
Other Underwriting Income		136			169			(19.5	%)
Underwriting Profit	$	7,606		$	2,982		NM
Losses and LAE Ratio		54.3	%		62.1	%
Commission Expense Ratio		22.2	%		20.1	%
Other Operating Expense Ratio (1)		10.7	%		11.1	%
Combined Ratio		87.2	%		93.3	%

(1) - Includes Other Operating Expenses and Other Underwriting Income.

NM - Percentage change not meaningful

	GlobalRe
	Six Months Ended June 30,
amounts in thousands	2018			2017			% Change
Gross Written Premiums	$	203,659		$	134,640			51.3	%
Ceded Written Premiums		(8,411	)		(6,293	)		33.7	%
Net Written Premiums		195,248			128,347			52.1	%
Net Earned Premiums	$	115,702		$	82,689			39.9	%
Net Losses and LAE		(62,024	)		(47,814	)		29.7	%
Commission Expenses		(26,916	)		(17,462	)		54.1	%
Other Operating Expenses		(11,841	)		(10,393	)		13.9	%
Other Underwriting Income		274			345			(20.6	%)
Underwriting Profit	$	15,195		$	7,365			106.3	%
Losses and LAE Ratio		53.6	%		57.8	%
Commission Expense Ratio		23.3	%		21.1	%
Other Operating Expense Ratio (1)		10.0	%		12.2	%
Combined Ratio		86.9	%		91.1	%

(1) - Includes Other Operating Expenses and Other Underwriting Income.

Gross Written Premiums

Quarter To Date Variance

Gross Written Premiums increased $12.4 million for the three months ended June 30, 2018, compared to the same period in 2017, primarily due to increases in our P&C, Agriculture, Specialty Casualty, and Surety products, driven by new business and increased renewals, partially offset by a decrease in our Accident & Health product. In addition to new business and increased renewals, our P&C and Agriculture products were also impacted by increased premium estimates and the timing of renewals, and the increases in our Specialty Casualty and Surety products were partially offset by a decrease in premium estimates on prior year contracts. The decrease in our Accident & Health product was driven by renewal timing and decreased premium estimates, partially offset by an increase in renewal business.

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Year To Date Variance

Gross Written Premiums increased $69.0 million for the six months ended June 30, 2018, compared to the same period in 2017, primarily due to increases in our Accident & Health, P&C, Specialty Casualty, and Surety products. Our Accident & Health product increased by $41.7 million, primarily driven by new business and increased renewals. The increase for our P&C product was attributable to the same drivers as the quarter to date variance. The increase in our Specialty Casualty product was due to timing largely related to inception date changes on two contracts, new business, and increased renewals. The increase in our Surety product was driven by increased lines, underlying program growth on renewals, and increased premium estimates primarily on prior year contracts.

Ceded Written Premiums

Quarter To Date Variances

Ceded Written Premiums were $1.9 million, resulting in a retention ratio of 97.5% of Net Written Premiums to Gross Written Premiums, for the three months ended June 30, 2018 compared to $1.2 million, resulting in a retention ratio of 98.1%, for the same period in 2017. The decrease in the retention ratio was primarily driven by additional ceded coverage purchased on our P&C products during the quarter and an increase in ceded RRPs relating to our P&C products.

Year To Date Variances

Ceded Written Premiums were $8.4 million, resulting in a retention ratio of 95.9%, for the six months ended June 30, 2018 compared to $6.3 million, resulting in a retention ratio of 95.3%, for the same period in 2017. The increase in the retention ratio was primarily driven by changes in the mix of business with proportionately more Accident & Health premium, which had 100% retention, partially offset by additional ceded coverage purchased on our P&C products during the quarter and an increase in ceded RRPs relating to our P&C products.

Net Earned Premiums

Quarter and Year To Date Variances

Net Earned Premiums for the three and six months ended June 30, 2018 increased $14.6 million and $33.0 million, respectively, as compared to the same periods in 2017, primarily due to growth in our Accident & Health, P&C, and Specialty Casualty products.

Net Losses and LAE

The Net Losses and LAE Reserves as of June 30, 2018 and December 31, 2017 were as follows:

	GlobalRe
	As of
	June 30,		December 31,
amounts in thousands	2018		2017		% Change
Case Reserves	$	58,300	$	58,962		(1.1	%)
IBNR Reserves		104,026		93,275		11.5	%
Total	$	162,326	$	152,237		6.6	%

The following tables present the current and prior accident year changes in our Net Losses and LAE Ratio for the three and six months ended June 30, 2018 and 2017:

	GlobalRe
	Three Months Ended June 30,						Point
	2018			2017			Change
Net Losses and LAE Ratio		54.3	%		62.1	%		(7.8	)
Net Prior AY Reserve (Release)/Strengthening		0.4	%		6.7	%		(6.3	)
Net Current AY Losses and LAE Ratio		53.9	%		55.4	%		(1.5	)

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	GlobalRe
	Six Months Ended June 30,						Point
	2018			2017			Change
Net Losses and LAE Ratio		53.6	%		57.8	%		(4.2	)
Net Prior AY Reserve (Release)/Strengthening		(0.1	%)		4.8	%		(4.9	)
Net Current AY Losses and LAE Ratio		53.7	%		53.0	%		0.7

Quarter To Date Variance

For the three months ended June 30, 2018, our Reported Net Losses and LAE Ratio decreased 7.8 points as compared to the same period in 2017 driven by:

Prior Year Reserve Development

For the three months ended June 30, 2018, our Net Prior AY Losses and LAE Ratio decreased 6.3 points as compared to the same period in 2017 primarily driven by:

• Our GlobalRe operating segment for the three months ended June 30, 2018 recognized $0.2 million of Net Prior AY Reserve Strengthening, including $0.9 million of catastrophe loss strengthening, partially offset by $0.7 million of reserve release on our Accident & Health product. This compares to $3.0 million of Net Prior AY Reserve Strengthening for the same period in 2017 mostly related to the settlement of a large Accident & Health claim.

Changes in the Current Accident Year Loss Ratio

For the three months ended June 30, 2018, our Net Current AY Losses and LAE Ratio decreased 1.5 points as compared to the same period in 2017, primarily driven by catastrophe losses attributable to weather-related events during the three months ended June 30, 2017, partially offset by changes in the mix of business with an increase in Net Earned Premiums related to our Accident & Health and Specialty Casualty products, which carries a higher loss ratio.

Year To Date Variance

For the six months ended June 30, 2018, our Reported Net Losses and LAE Ratio decreased 4.2 points as compared to the same period in 2017 driven by:

Prior Year Reserve Development

For the six months ended June 30, 2018, our Net Prior AY Losses and LAE Ratio decreased 4.9 points as compared to the same period in 2017 primarily driven by:

• Our GlobalRe operating segment for the six months ended June 30, 2018 recognized $0.1 million of Net Prior AY Reserve Release. This release was primarily related to net favorable loss emergence in our Accident & Health, Marine, and Surety products, partially offset by net catastrophe loss strengthening in our P&C product. This compares to $3.9 million of Net Prior AY Reserve Strengthening for the same period in 2017 mostly related to the settlement of a large Accident & Health claim.

Changes in the Current Accident Year Loss Ratio

For the six months ended June 30, 2018, our Net Current AY Losses and LAE Ratio increased 0.7 points as compared to the same period in 2017, primarily driven by changes in the mix of business with an increase in Net Earned Premiums related to our Accident & Health and Specialty Casualty products, which carries a higher loss ratio, partially offset by catastrophe losses attributable to weather-related events during the six months ended June 30, 2017.

Commission Expenses

Quarter and Year To Date Variances

Our Commission Expense Ratio for the three and six months ended June 30, 2018 increased 2.1 points and 2.2 points, respectively, as compared to the same periods in 2017, primarily due to changes in the mix of business with more proportional Accident & Health and Specialty Casualty premium earned with higher Commission Expense Ratios as well as a greater profit commission expense over prior year.

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Other Operating Expenses

Quarter and Year To Date Variances

Other Operating Expenses for the three and six months ended June 30, 2018 increased $1.3 million and $1.4 million, respectively, as compared to the same periods in 2017, primarily due to costs associated with new business initiatives including increased employee expenses and premium taxes on our Latin America business. An increase in Net Earned Premiums resulted in the Other Operating Expense Ratio decreasing by 0.4 points and 2.2 points for the three and six months ended June 30, 2018, respectively, as compared to the same periods in 2017.

Capital Resources and Liquidity

Capital Resources

Our capital resources consist of funds deployed or available to be deployed to support our business operations.  As of June 30, 2018 and December 31, 2017, our capital resources were as follows:

	As of
amounts in thousands	June 30, 2018			December 31, 2017
Senior Notes	$	263,967		$	263,885
Stockholders' Equity		1,234,084			1,225,965
Total Capitalization	$	1,498,051		$	1,489,850
Ratio of Debt to Total Capitalization		17.6	%		17.7	%

As part of our capital management program, we may seek to raise additional capital or may seek to return capital to our stockholders through share repurchases, cash dividends or other methods (or a combination of such methods).  Any such determination will be at the discretion of our Parent Company’s Board of Directors and will be dependent upon our profits, financial requirements and other factors, including legal restrictions, rating agency requirements, credit facility limitations and such other factors as our Board of Directors deems relevant.

We primarily rely upon dividends from our subsidiaries to meet our Parent Company’s obligations, which mostly consist of semi-annual (April and October) interest payments of $7.6 million on the Senior Notes. In the second quarter of 2018 NIC paid a dividend of $41.0 million to our Parent Company, related to the funding of the acquisition of BDM and ASCO. As described in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2017, we continue to believe that the dividend capacity of our subsidiaries will provide our Parent Company with sufficient liquidity for the foreseeable future.

Senior Notes and Credit Facility

As of June 30, 2018, letters of credit with an aggregate face amount of 24.0 million Australian Dollars were outstanding under the credit facility with Barclays Bank PLC that we entered into on November 4, 2016 and amended on October 30, 2017 (the “Australian Facility”).

As of June 30, 2018, letters of credit with an aggregate face amount of $140.0 million and £60.0 million were outstanding under the credit facility with ING Bank N.V., London Branch, individually and as administrative agent for a syndicate of lenders, that we entered into on November 7, 2016 (the “Club Facility”), and we had an aggregate of $1.2 million of cash collateral posted.  

As of June 30, 2018, letters of credit with an aggregate face amount of $25.0 million were outstanding under the credit facility with ING Bank N.V., London Branch, that we entered into on November 20, 2015 and amended on November 7, 2016 (the “Bilateral Facility”).

During the first quarter of 2018, the Company reclassified certain overseas deposits from Short-Term Investments to Other Invested Assets. Refer to Note 1. Organization & Summary of Significant Accounting Policies in the Notes to Interim Consolidated Financial Statements. Although the nature of the investments did not change, this reclassification caused the Company to exceed a covenant of our Club Facility that sets a limitation on other investments as a percentage of total investments.  Our Company received a waiver of compliance with respect to this covenant, which was subsequently amended to increase the percentage of other investments permitted. As of June 30, 2018, our Company was in compliance with all covenants for our Club Facility, Senior Notes, Australian Facility and Bilateral Facility.

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Shelf Registration

We generally maintain the ability to issue certain classes of debt and equity securities via a universal shelf registration statement filed with the SEC, which is renewed every three years. The shelf registration provides us the means to access the debt and equity markets relatively quickly. Our current shelf registration, which was filed on April 13, 2018, with the SEC expires in 2021. This report is not an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state.

Consolidated Cash Flows

We believe that the cash flow generated by the operating activities of our subsidiaries will provide sufficient funds for us to meet our liquidity needs over the next twelve months.  Beyond the next twelve months, cash flow available to us may be influenced by a variety of factors, including general economic conditions and conditions in the insurance and reinsurance markets, as well as fluctuations from year to year in claims experience.

We believe that we have adequately managed our cash flow requirements related to reinsurance recoveries from their positive cash flows and the use of available short-term funds when applicable.  However, there can be no assurances that we will be able to continue to adequately manage such recoveries in the future or that collection disputes or reinsurer insolvencies will not arise that could materially increase the collection time lags or result in recoverable write-offs causing additional incurred losses and liquidity constraints to our Company.  The payment of gross claims and related collections from reinsurers with respect to large losses could significantly impact our liquidity needs.  However, in general, we expect to collect our paid reinsurance recoverables under the terms described above.

Net Cash Provided by Operating Activities was $82.7 million for the six months ended June 30, 2018 compared to $72.9 million for the same period in 2017. Operating cash flow increased from the prior year due to additional premium collections resulting from the growth of our business, higher investment income collected as a result of the growth in assets under management, and lower operating expense payments resulting from smaller incentive compensation payments in 2018 as compared with 2017. The growth in operating cash flows was partially offset by increased claim payments in 2018, as compared with 2017, associated with the catastrophe loss activity occurring in the third quarter of 2017.

Net Cash Used in Investing Activities was $8.2 million for the six months ended June 30, 2018 compared to $77.9 million for the same period in 2017. The decrease in cash used in investing activities is due in part to a temporary increase in cash equivalents at June 30, 2018 as we await investment opportunities and hold cash equivalents for unsettled trades at the end of the quarter. Additionally, investing cash flows for the six months ended June 30, 2018 were impacted by cash acquired resulting from the Acquisition as discussed in Note 2. Business Combinations. The cash inflow from the sale of Fixed Maturities to fund the Acquisition was offset by the cash outflow to purchase the subsidiaries.

Net Cash Used in Financing Activities was $11.0 million for the six months ended June 30, 2018 compared to $15.1 million for the same period in 2017. The decrease in cash used in financing activities is primarily related to reduced tax withholding payments on vested stock compensation in 2018 as compared with 2017.

Investments

Our investment portfolio is invested primarily in publicly traded, investment grade, fixed income securities with an average credit quality of “AA-/Aa3” as rated by S&P or Moody’s.  As of June 30, 2018, our portfolio had a duration of 3.5 years.  Management periodically projects cash flow of the investment portfolio and other sources in order to maintain the appropriate levels of liquidity in an effort to ensure our ability to satisfy claims.  

As of June 30, 2018 and December 31, 2017, all Fixed Maturities Securities were classified as Available-For-Sale. Upon adoption of the FASB’s ASU 2016-01 as of January 1, 2018, our Equity Securities have been measured at fair value with changes in fair value recognized through Net Income. Prior to the adoption of ASU 2016-01, our Equity Securities were classified as Available-For-Sale with change in fair value recognized through Accumulated Other Comprehensive Income.

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The portfolio is externally managed by independent, professional investment managers and is broadly diversified across geographies, sectors, and issuers. The primary objectives are to maximize total investment return in the context of preserving and enhancing stockholder value and the statutory surplus of our regulated insurance companies.  As part of our overall investment strategy, we seek to build a tax efficient investment portfolio by maintaining an allocation to tax-exempt municipal bonds. The tax-exempt portion of our Fixed Maturities portfolio at June 30, 2018 was 17.6% compared to 22.4% at December 31, 2017.  Additionally, substantially all of our equity portfolio is invested in tax efficient securities which qualify for the dividends received deduction.  The investments are subject to the oversight of the respective insurance companies’ Boards of Directors and the Finance Committee of our Parent Company’s Board of Directors.

We are a specialty insurance company and periods of moderate economic recession or inflation tend not to have a significant direct effect on underwriting operations.  They do, however, impact our investment portfolio.  A decrease in interest rates will tend to decrease our yield and have a positive effect on the fair value of our invested assets.  An increase in interest rates will tend to increase our yield and have a negative effect on the fair value of our invested assets.

The following table summarizes the composition of our investments at fair value:

	Fair Value as of
amounts in thousands	June 30, 2018		December 31, 2017		% Change
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and    Foreign Government Bonds	$	289,612	$	393,563		(26.4	%)
States, Municipalities and Political Subdivisions		658,129		814,632		(19.2	%)
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		362,870		407,619		(11.0	%)
Residential Mortgage Obligations		96,134		54,104		77.7	%
Asset-Backed Securities		476,838		328,753		45.0	%
Commercial Mortgage-Backed Securities		168,609		160,904		4.8	%
Subtotal	$	1,104,451	$	951,380		16.1	%
Corporate Exposures		909,349		897,479		1.3	%
Total Fixed Maturities	$	2,961,541	$	3,057,054		(3.1	%)
Equity Securities:
Common Stocks	$	145,077	$	52,439		176.7	%
Preferred Stocks		182,389		183,542		(0.6	%)
Total Equity Securities	$	327,466	$	235,981		38.8	%
Short-Term Investments		6,368		6,480		(1.7	%)
Total Investments	$	3,295,375	$	3,299,515		(0.1	%)

Fixed Maturities decreased from December 31, 2017 due to an increase in interest rates and spread widening which impacted our longer dated municipal securities as well as certain corporate exposures.  To a lesser extent, proceeds from the sale of Treasury bonds were used to fund the Acquisition as well as reinvested into equity mutual funds tracking broad market indices.  The increase in common stocks is due to the equity portfolio of ASCO and Canal Re, which was acquired as part of the purchase of these entities, as well as the purchase of passively managed equity mutual funds.  Furthermore, certain short dated municipal securities were sold due to technical market factors with proceeds reinvested in cash equivalents.

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The following table sets forth the amount of our Fixed Maturities as of June 30, 2018 by S&P credit rating or, if an S&P rating is not available, the equivalent Moody’s rating. The total rating is the weighted average quality rating for the Fixed Maturities portfolio as a whole.

		As of June 30, 2018
amounts in thousands	Rating	Fair Value		AmortizedCost
Rating Description:
Extremely Strong	AAA	$	483,681	$	487,539
Very Strong	AA		1,254,293		1,267,675
Strong	A		728,837		736,095
Adequate	BBB		382,526		385,675
Speculative	BB & Below		111,295		113,876
Not Rated	NR		909		769
Total	AA-	$	2,961,541	$	2,991,629

The following table sets forth the composition of the non-government guaranteed Fixed Maturities categorized by asset class and generally equivalent S&P and Moody’s ratings (not all securities in our portfolio are rated by both S&P and Moody’s) as of June 30, 2018:

	As of June 30, 2018
amounts in thousands	AAA		AA		A		BBB		BBand below		Not Rated		FairValue		Amortized Cost
Municipal Bonds	$	68,017	$	420,846	$	153,199	$	16,067	$	—	$	—	$	658,129	$	652,589
Agency Residential Mortgage-Backed		—		362,870		—		—		—		—		362,870		376,276
Residential Mortgage-Backed		46,178		5,536		308		40,237		2,966		909		96,134		96,101
Asset-Backed		170,883		191,400		87,051		27,504		—		-		476,838		478,850
Commercial Mortgage-Backed		101,897		39,567		27,145		—		—		—		168,609		170,619
Corporate Exposures		7,371		60,627		434,303		298,719		108,329		—		909,349		924,348
Total	$	394,346	$	1,080,846	$	702,006	$	382,527	$	111,295	$	909	$	2,671,929	$	2,698,783

The following table sets forth our U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds, as well as our State, Municipality and Political Subdivision bond holdings by type:

	As of June 30, 2018
amounts in thousands	FairValue		AmortizedCost
U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds:
U.S. Treasury Bonds	$	80,379	$	80,508
Agency Bonds		80,760		81,456
Foreign Government Bonds		128,473		130,882
Total U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds	$	289,612	$	292,846
States, Municipalities and Political Subdivisions:
General Obligation	$	132,045	$	130,924
Prerefunded		52,872		51,374
Revenue		339,229		334,567
Taxable		133,983		135,724
Total States, Municipalities and Political Subdivisions	$	658,129	$	652,589

As of June 30, 2018, we own $27.0 million of municipal securities, which are credit enhanced by various financial guarantors that have an average underlying credit rating of A+.  

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The following table sets forth our Agency Residential Mortgage-Backed Securities (“ARMBS”) issued by the Government National Mortgage Association (“GNMA”), Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”) and the quality category (Prime, Alternative A-paper (“Alt-A”), and Other Non-Agency) for Residential Mortgage-Backed Securities (“RMBS”) as of June 30, 2018:

	As of June 30, 2018
amounts in thousands	Fair Value		AmortizedCost
ARMBS:
GNMA	$	38,295	$	38,982
FNMA		227,034		236,343
FHLMC		97,541		100,951
Total Agency Residential  Mortgage-Backed Securities	$	362,870	$	376,276
RMBS:
Prime	$	49,184	$	48,945
Alt-A		772		697
Other  Non-Agency		46,178		46,459
Total Residential Mortgage-Backed Securities	$	96,134	$	96,101

We analyze our Mortgage-Backed Securities by credit quality of the underlying collateral distinguishing between the securities issued by FNMA, FHLMC and GNMA, which are federal government sponsored entities, and non-agency backed securities broken out by Prime, Alt-A,  and Other Non-Agency collateral. The securities issued by FNMA and FHLMC are the obligations of each respective entity. The U.S. Department of the Treasury has agreed to provide support to FNMA and FHLMC under a Preferred Stock Purchase Agreement by committing to make quarterly payments to these enterprises, if needed, to maintain a zero net worth.

Prime collateral consists of mortgages or other collateral from the most creditworthy borrowers. Alt-A collateral consists of mortgages or other collateral from borrowers, which have a risk potential greater than Prime but less than subprime. The subprime collateral consists of mortgages or other collateral from borrowers with low credit ratings. We have no exposure to subprime RMBS at June 30, 2018. Prime, subprime and Alt-A categories are as defined by S&P.

Details of the collateral of our Asset-Backed Securities portfolio as of June 30, 2018 are presented below:

	As of June 30, 2018
amounts in thousands	Fair Value		AmortizedCost
Auto Loans	$	41,668	$	42,126
Single Family Rentals		83,782		84,294
Consumer Loans		54,248		54,757
Credit Cards		23,113		23,238
Collateralized Loan Obligations		184,727		184,928
Time Share		28,028		28,531
Miscellaneous		61,272		60,976
Total Asset-Backed Securities	$	476,838	$	478,850

Details of our Corporate Exposures portfolio as of June 30, 2018 are presented below:

	As of June 30, 2018
amounts in thousands	Fair Value		AmortizedCost
Corporate Exposures:
Corporate Bonds	$	718,523	$	728,955
Hybrid Bonds		155,824		160,857
Redeemable Preferred Stocks		35,002		34,536
Total Corporate Exposures	$	909,349	$	924,348

As of June 30, 2018, the fair value of securities issued in foreign countries was $324.7 million, with an amortized cost of $330.6 million, representing 10.0% of our total Fixed Maturities and Equity Securities. Our largest exposure is Canada with a total of $141.9 million followed by the United Kingdom with a total of $37.9 million.

Our Company did not have gross unrealized investment losses where the fair value was less than 80% of amortized cost as of June 30, 2018.

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Our Company did not have any credit related OTTI losses during the three months ended June 30, 2018 or 2017. Our Company did not have any credit related OTTI losses during the six months ended June 30, 2018. Our Company had two credit related OTTI losses of $1.1 million in the equity portfolio during the six months ended June 30, 2017.

The fair value of our investment portfolio may fluctuate significantly in response to various factors such as changes in interest rates, investment quality ratings, equity prices, foreign exchange rates and credit spreads. We do not have the intent to sell nor is it more likely than not that we will have to sell Fixed Maturities in unrealized loss positions that are not other-than-temporarily impaired before recovery. For structured securities, default probability and severity assumptions differ based on property type, vintage and the stress of the collateral. We do not intend to sell any of these securities and it is more likely than not that we will not be required to sell these securities before the recovery of the amortized cost basis. Upon adoption of ASU-2016-01 as of January 1, 2018, the changes in the fair value of Equity Securities is recognized through Net Income. We may realize investment losses to the extent our liquidity needs require the disposition of Fixed Maturity securities in unfavorable interest rate, liquidity or credit spread environments. Significant changes in the factors we consider when evaluating investments for impairment losses could result in a significant change in impairment losses reported in the Consolidated Financial Statements.

Critical Accounting Estimates

Our Company’s Annual Report on Form 10-K for the year ended December 31, 2017 discloses our critical accounting estimates (refer to Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates).

We believe the items that require the most subjective and complex estimates involve the reporting of:

• Reserves for Losses and LAE (including losses that have occurred but were not reported to us by the financial reporting date);

• Reinsurance Recoverables, including a provision for uncollectible reinsurance;

• Written and Unearned Premiums;

• The recoverability of Deferred Tax Assets;

• The impairment of investment securities; and

• Valuation of invested assets.

We believe that the critical accounting estimates discussion in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2017 continues to describe the significant estimates and judgements included in the preparation of our Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Refer to Item 7A included in our Company’s 2017 Annual Report on Form 10-K. There have been no material changes to this item since December 31, 2017.

Item 4. Controls and Procedures

(a) Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this Quarterly Report.  Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of the end of such period our Company’s disclosure controls and procedures are effective in identifying, on a timely basis, material information required to be disclosed in our reports filed or submitted under the Exchange Act.

On June 7, 2018 we acquired Bracht, Deckers & Mackelbert NV (“BDM”), a specialty underwriting agency, and its affiliated insurance company, Assurances Continentales – Continentale Verzekeringen NV (“ASCO”). SEC guidance permits management to omit an assessment of an acquired business’ internal control over financial reporting from management’s assessment of internal control over financial reporting for a period not to exceed one year from the date of the acquisition. Accordingly, we have not yet included BDM and ASCO in our assessment of the effectiveness of our disclosure controls and procedures and internal control over financial reporting as of June 30, 2018. For the three months ended June 30, 2018, BDM and ASCO accounted for $nil of our total net revenue, and as of June 30, 2018 had total assets of $113.4 million.

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(b) There have been no changes during our second fiscal quarter in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our Company’s internal control over financial reporting. As described above, our management excluded an assessment of the internal controls over financial reporting of BDM and ASCO from its assessment of the effectiveness of our internal control over financial reporting as of June 30, 2018. The Company has begun integrating BDM and ASCO into its existing control procedures, which may lead us to modify certain internal controls in future periods.

We have commenced certain transformation initiatives to automate, centralize and simplify our business processes and systems. These are long-term initiatives that we believe will enhance our internal control over financial reporting due to increased automation and integration of related processes. The commencement of these initiatives has not materially affected our internal control over financial reporting, however, we will continue to monitor and evaluate the effectiveness of our internal control over financial reporting throughout the transformation.

(c) In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

57

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of conducting business, our subsidiaries are involved in various legal proceedings, either indirectly as insurers for parties or directly as defendants. Most of these proceedings consist of claims litigation involving our subsidiaries as either: (a) liability insurers defending or providing indemnity for third party claims brought against insureds or (b) insurers defending first party coverage claims brought against us. Our Company accounts for such activity through the establishment of unpaid losses and LAE reserves. Our Company’s management believes that our ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and cost of defense, will not be material to the consolidated financial condition, results of operations, or cash flows of our Company.

Our subsidiaries are also occasionally involved with other legal actions, some of which assert claims for substantial amounts. These actions include claims asserting extra contractual obligations, such as claims involving allegations of bad faith in the handling of claims or the underwriting of policies. In general, our Company believes we have valid defenses to these cases. Our Company’s management expects that the ultimate liability, if any, with respect to such extra-contractual matters will not be material to our consolidated financial position. Nonetheless, given the large or indeterminate amounts sought in certain of these matters, and the inherent unpredictability of litigation, an adverse outcome in such matters could, from time to time, have a material adverse outcome on our consolidated results of operations or cash flows in a particular fiscal quarter or year.

Item 1A. Risk Factors

There have been no material changes from the risk factors as previously disclosed in our Company’s 2017 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None

58

Item 6. Exhibits

Exhibit No.	Description of Exhibit
11-1	Computation of Per Share Earnings	*
31-1	Certification of CEO per Section 302 of the Sarbanes-Oxley Act	*
31-2	Certification of CFO per Section 302 of the Sarbanes-Oxley Act	*
32-1	Certification of CEO per Section 906 of the Sarbanes-Oxley Act (This exhibit is intended to be furnished in accordance with Regulation S-K item 601(b)(32)(ii) and shall not be deemed to be filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference).	*
32-2	Certification of CFO per Section 906 of the Sarbanes-Oxley Act (This exhibit is intended to be furnished in accordance with Regulation S-K item 601(b)(32)(ii) and shall not be deemed to be filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference).	*
101.INS	XBRL Instance Document	*
101.SCH	XBRL Taxonomy Extension Scheme	*
101.CAL	XBRL Taxonomy Extension Calculation Database	*
101.LAB	XBRL Taxonomy Extension Label Linkbase	*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	*
101.DEF	XBRL Taxonomy Extension Definition Linkbase	*

* Included herein

59

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	The Navigators Group, Inc.
	(Company)
Dated:  August 9, 2018	By:	/s/ Ciro M. DeFalco
		Ciro M. DeFalco
		Executive Vice President and Chief Financial Officer

60

EX-11.1

Exhibit 11.1

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Computation of Per Share Earnings

The following table presents the computation of Basic and Diluted Earnings per Share for the three and six months ended June 30, 2018 and 2017:

	Three Months Ended June 30,				Six Months Ended June 30,
amounts in thousands, except per share amounts	2018		2017		2018		2017
Net Income	$	32,104	$	20,502	$	62,982	$	41,612
Basic Weighted Average Shares		29,733		29,470		29,664		29,377
Effect of Common Stock Equivalents:
Assumed Vesting of Stock Grants		370		448		479		520
Diluted Weighted Average Shares		30,103		29,918		30,143		29,897
Net Income per Common Share:
Basic	$	1.08	$	0.70	$	2.12	$	1.42
Diluted	$	1.07	$	0.69	$	2.09	$	1.39
Anti-dilutive Shares Excluded from the Dilutive Computation		—		164		—		108

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PER

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Stanley A. Galanski, certify that:

1. I have reviewed this report on Form 10-Q of The Navigators Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2018	/s/ Stanley A. Galanski
	Name:	Stanley A. Galanski
	Title:	President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PER

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Ciro M. DeFalco, certify that:

1. I have reviewed this report on Form 10-Q of The Navigators Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2018	/s/ Ciro M. DeFalco
	Name:	Ciro M. DeFalco
	Title:	Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of The Navigators Group, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stanley A. Galanski, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Stanley A. Galanski

Stanley A. Galanski

President and Chief Executive Officer

August 9, 2018

A signed original of this written statement required by Section 906 has been provided to The Navigators Group, Inc. and will be retained by The Navigators Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of The Navigators Group, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ciro M. DeFalco, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Ciro M. DeFalco

Ciro M. DeFalco

Executive Vice President and Chief Financial Officer

August 9, 2018

A signed original of this written statement required by Section 906 has been provided to The Navigators Group, Inc. and will be retained by The Navigators Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 27, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Trading Symbol	NAVG
Entity Registrant Name	NAVIGATORS GROUP INC
Entity Central Index Key	0000793547
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		29,765,245

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Investments:
Available-for-sale, at fair value	$ 2,967,909
Equity Securities, at fair value (cost: 2018: $317,497; 2017: $224,159)		$ 235,981
Equity Securities, at fair value (cost: 2018: $317,497; 2017: $224,159)	327,466
Other Invested Assets	38,372	30,488
Total Investments	3,333,747	3,330,003
Cash and Cash Equivalents	175,834	102,735
Restricted Cash and Cash Equivalents	47,522	56,229
Premiums Receivable	455,742	351,393
Prepaid Reinsurance Premiums	239,660	228,569
Reinsurance Recoverable on Paid Losses	94,503	72,494
Reinsurance Recoverable on Unpaid Losses and Loss Adjustment Expenses	799,084	809,765
Deferred Policy Acquisition Costs	157,153	135,249
Accrued Investment Income	20,276	19,480
Goodwill and Other Intangible Assets	28,272	6,596
Current Income Tax Receivable, Net	21,395	16,667
Deferred Income Tax, Net	24,552	22,271
Other Assets	91,205	73,171
Total Assets	5,488,945	5,224,622
Liabilities:
Reserves for Losses and Loss Adjustment Expenses	2,574,116	2,515,145
Unearned Premiums	1,125,731	987,681
Reinsurance Balances Payable	132,285	136,192
Senior Notes	263,967	263,885
Payable for Investments Purchased	45,800	0
Accounts Payable and Other Liabilities	112,962	95,754
Total Liabilities	4,254,861	3,998,657
Stockholders' Equity:
Preferred Stock ($.10 par value per share, authorized 1,000 shares, none issued)	0	0
Common Stock ($.10 par value per share, authorized 50,000 shares, issued 36,764 shares for 2018 and 36,530 shares for 2017)	3,673	3,650
Additional Paid-In Capital	376,705	376,868
Treasury Stock, at cost (7,023 shares for 2018 and 2017)	(155,801)	(155,801)
Retained Earnings	1,045,131	981,380
Accumulated Other Comprehensive Income (Loss)	(35,624)	19,868
Total Stockholders' Equity	1,234,084	1,225,965
Total Liabilities and Stockholders' Equity	5,488,945	5,224,622
Fixed Maturities
Investments:
Available-for-sale, at fair value	2,961,541	3,057,054
Short-Term Investments
Investments:
Available-for-sale, at fair value	$ 6,368	$ 6,480

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Amortized cost	$ 2,997,997
Equity Securities, cost		$ 224,159
Equity Securities, cost	$ 317,497
Preferred Stock, par value	$ 0.10	$ 0.10
Preferred Stock, authorized shares	1,000,000	1,000,000
Preferred Stock, issued shares	0	0
Common Stock, par value	$ 0.10	$ 0.10
Common Stock, authorized shares	50,000,000	50,000,000
Common Stock, issued shares	36,764,000	36,530,000
Treasury Stock, shares	7,023,000	7,023,000
Fixed Maturities
Amortized cost	$ 2,991,629	$ 3,027,408
Short-Term Investments
Amortized cost	$ 6,368	$ 6,477

XML

Consolidated Statements of Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Gross Written Premiums	$ 497,236	$ 452,179	$ 992,460	$ 902,484
Revenues:
Net Written Premiums	379,292	333,282	772,554	670,445
Change in Unearned Premiums	(48,277)	(39,447)	(118,912)	(90,479)
Net Earned Premiums	331,015	293,835	653,642	579,966
Net Investment Income	24,601	22,265	48,303	43,713
Net Realized and Unrealized Gains (Losses):
Total Other-Than-Temporary Impairment Losses	(18)	29	(55)	(1,048)
Portion of Loss Recognized in Other Comprehensive Income (Before Tax)	18	(29)	55	(45)
Net Other-Than-Temporary Impairment Losses Recognized in Earnings	0	0	0	(1,093)
Net Realized Gains on Investments Sold	1,787	1,694	2,956	2,743
Net Unrealized Gains (Losses) on Equity Securities at Fair Value	1,329		(1,852)
Total Net Realized and Unrealized Gains	3,116	1,694	1,104	1,650
Other Income (Loss)	2,628	(411)	2,511	657
Total Revenues	361,360	317,383	705,560	625,986
Expenses:
Net Losses and Loss Adjustment Expenses	196,333	177,110	382,478	346,710
Commission Expenses	53,193	48,173	107,345	96,017
Other Operating Expenses	68,182	60,766	131,108	119,304
Interest Expense	3,864	3,861	7,728	7,722
Total Expenses	321,572	289,910	628,659	569,753
Income (Loss) Before Income Taxes	39,788	27,473	76,901	56,233
Income Tax Expense	7,684	6,971	13,919	14,621
Net Income (Loss)	$ 32,104	$ 20,502	$ 62,982	$ 41,612
Net Income per Common Share:
Basic	$ 1.08	$ 0.70	$ 2.12	$ 1.42
Diluted	$ 1.07	$ 0.69	$ 2.09	$ 1.39
Average common shares outstanding:
Basic	29,733	29,470	29,664	29,377
Diluted	30,103	29,918	30,143	29,897
Cash Dividends Declared per Common Share	$ 0.07	$ 0.06	$ 0.14	$ 0.105

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement Of Income And Comprehensive Income [Abstract]
Net Income	$ 32,104	$ 20,502	$ 62,982	$ 41,612
Change in Net Unrealized Gains (Losses) on Available-For-Sale Investments:
Unrealized Gains (Losses) on Investments arising during the period, net of Deferred Tax	(10,028)	14,684	(44,399)	28,661
Reclassification adjustment for Net Realized Gains (Losses) included in Net Income net of Deferred Tax	(809)	(291)	(2,477)	399
Change in Net Unrealized Gains (Losses) on Investments	(10,837)	14,393	(46,876)	29,060
Change in Other-Than-Temporary Impairments
Non Credit Other-Than-Temporary Impairments arising during the period, net of Deferred Tax	(14)	19	(44)	29
Reclassification Adjustment for Other-Than-Temporary Impairment Credit Losses Recognized in Net Income net of Deferred Tax	0	0	0	389
Change in Other-Than-Temporary Impairments	(14)	19	(44)	418
Change in Foreign Currency Translation Gains (Losses), net of Deferred Tax	(5,880)	785	(3,652)	520
Other Comprehensive Income (Loss)	(16,731)	15,197	(50,572)	29,998
Comprehensive Income	$ 15,373	$ 35,699	$ 12,410	$ 71,610

XML

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement Of Income And Comprehensive Income [Abstract]
Unrealized Gains (Losses) on Investments arising during the period, Deferred Tax	$ 2,472	$ (7,907)	$ 11,856	$ (15,433)
Reclassification adjustment for Net Realized (Gains) Losses included in Net Income, Deferred Tax	199	157	943	(215)
Non Credit Other-Than-Temporary Impairments arising during the period, Deferred Tax	4	(10)	16	(16)
Reclassification Adjustment for Other-Than-Temporary Impairment Credit Losses Recognized in Net Income, Deferred Tax	0	0	0	(209)
Change in Foreign Currency Translation Gains (Losses), Deferred Tax	$ 1,361	$ (423)	$ 2,443	$ (280)

XML

Consolidated Statement of Stockholders' Equity - 6 months ended Jun. 30, 2018 - USD ($) shares in Thousands, $ in Thousands		Total	Common Stock	Additional Paid-in Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Dec. 31, 2017		$ 1,225,965	$ 3,650	$ 376,868	$ (155,801)	$ 981,380	$ 19,868
Beginning Balance (in shares) at Dec. 31, 2017		36,530	36,530		7,023
Net Income		$ 62,982				62,982
Dividends Declared		(4,151)				(4,151)
Changes in Other Comprehensive Income:
Change in Net Unrealized Loss on Available-For-Sale Investments		(46,876)					(46,876)
Change in Net Non-Credit Other-Than- Temporary Impairment Losses		(44)					(44)
Change in Foreign Currency Translation Loss		(3,652)					(3,652)
Other Comprehensive Income (Loss)		(50,572)					(50,572)
Cumulative Effect of Adoption of ASU at January 1st, Net of Tax | ASU 2016-01						7,748	(7,748)
Cumulative Effect of Adoption of ASU at January 1st, Net of Tax | Accounting Standards Update 2018-02						(2,828)	2,828
Shares Issued	[1]	(6,111)	$ 23	(6,134)
Shares issued (in shares)	[1]		234
Share-Based Compensation		5,971		5,971
Ending Balance at Jun. 30, 2018		$ 1,234,084	$ 3,673	$ 376,705	$ (155,801)	$ 1,045,131	$ (35,624)
Ending Balance (in shares) at Jun. 30, 2018		36,764	36,764		7,023

[1] Includes shares issued under the Second Amended and Restated 2005 Stock Incentive Plan to Directors and the Employee Stock Purchase Plan.

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Operating Activities:
Net Income	$ 62,982	$ 41,612
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation & Amortization	1,578	2,411
Share-Based Compensation	5,971	9,146
Deferred Income Taxes	(736)	(10,793)
Total Net Realized and Unrealized Gains	(1,104)	(2,743)
Net Other-Than-Temporary Impairments Recognized in Earnings	0	1,093
Changes in Assets And Liabilities:
Reinsurance Recoverable on Paid and Unpaid Losses and Loss Adjustment Expenses	5,777	13,107
Reserves for Losses and Loss Adjustment Expenses	27,567	52,063
Prepaid Reinsurance Premiums	(8,629)	(24,982)
Unearned Premiums	127,861	115,511
Premiums Receivable	(106,326)	(116,689)
Deferred Policy Acquisition Costs	(21,991)	(13,137)
Accrued Investment Income	(805)	(881)
Reinsurance Balances Payable	(3,789)	16,145
Current Income Tax Receivable, Net	(4,870)	7,175
Other	(765)	(16,134)
Net Cash Provided by Operating Activities	82,721	72,904
Fixed Maturities
Redemptions and Maturities	258,931	165,690
Sales	271,804	95,240
Purchases	(499,956)	(356,970)
Equity Securities
Sales		39,487
Sales	28,757
Purchases		(21,022)
Purchases	(76,419)
Net Sales and Purchases of Other Invested Assets	(8,591)	(10,105)
Net Sales, Maturities and Purchases of Short-Term Investments	32	(171)
Net Change in Unsettled Security Transactions	43,475	12,028
Purchase of Subsidiaries, Net of Acquired Cash	(22,383)	0
Net Purchase of Property and Equipment	(3,841)	(2,098)
Net Cash Used in Investing Activities	(8,191)	(77,921)
Financing Activities:
Proceeds from Employee Stock Purchase Plan	969	1,147
Payment of Employee Tax Withholding on Stock Compensation	(7,786)	(13,189)
Dividends Paid	(4,151)	(3,092)
Net Cash Used in Financing Activities	(10,968)	(15,134)
Effect of Exchange Rate on Unrestricted and Restricted Cash and Cash Equivalents	830	1,805
Change in Unrestricted and Restricted Cash and Cash Equivalents	64,392	(18,346)
Unrestricted and Restricted Cash and Cash Equivalents at Beginning of Year	158,964	172,846
Unrestricted and Restricted Cash and Cash Equivalents at End of Period	223,356	154,500
Supplemental Information:
Income Taxes Paid, Net	19,349	21,445
Interest Paid	7,619	7,619
Issuance of Stock to Directors	$ 783	$ 578

XML

Organization and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Organization and Summary of Significant Accounting Policies

NOTE 1.  ORGANIZATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unless the context requires otherwise, the terms “we,” “us,” “our” or “our Company” are used to mean The Navigators Group, Inc., a Delaware holding company established in 1982, and its subsidiaries. The term “Parent Company” is used to mean The Navigators Group, Inc. without its subsidiaries.

Organization

We are an international insurance company with a long-standing area of specialization in Marine insurance. We also offer Property and Casualty (“P&C”) insurance, primarily general liability coverage and umbrella & excess liability coverage to commercial enterprises through our Primary and Excess Casualty divisions. We have also developed niches in Professional Liability insurance, through our Directors & Officers (“D&O”) and Errors & Omissions (“E&O”) divisions, as well as assumed reinsurance products.

We operate through various wholly-owned insurance and service companies. Our subsidiaries domiciled in the United States (“U.S.”) include two insurance companies, Navigators Insurance Company (“NIC”) and Navigators Specialty Insurance Company (“NSIC”), as well as our U.S. underwriting agency, Navigators Management Company (“NMC”). NIC includes a branch in the United Kingdom (“U.K”). We also have operations domiciled in the U.K., Hong Kong and Europe. Navigators International Insurance Company Ltd. (“NIIC”), Navigators Management (U.K.) Ltd. (“NMUK”) and Navigators Underwriting Ltd. (“NUL”) are domiciled in the U.K. and NUL includes European branches. Navigators Underwriting Agency Ltd. (“NUAL”), a Lloyd’s of London (“Lloyd’s”) underwriting agency, manages and provides the capital, through Navigators Corporate Underwriters Ltd. (“NCUL”), for our Lloyd’s Syndicate 1221 (the “Syndicate”), and is also domiciled in the U.K. We control 100% of the Syndicate’s stamp capacity.

On June 7, 2018, we acquired 100% ownership interest in Bracht, Deckers & Mackelbert NV, an insurance underwriting agency organized under the laws of Belgium (“BDM”) and Assurances Continentales – Continentale Verzekeringen NV, an insurance company licensed under the laws of Belgium (“ASCO”). The acquisition is being accounted for in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations.” Refer to Note 2. Business Combinations and Note 6. Goodwill and Intangible Assets for further information regarding the acquisition.

Basis of Presentation

The Consolidated Balance Sheet at June 30, 2018 and the Consolidated Statements of Income, Comprehensive Income, Stockholders’ Equity and Cash Flows for the periods ended June 30, 2018 and 2017 are unaudited. The Balance Sheet at December 31, 2017 is derived from our audited Financial Statements. The accompanying Interim Consolidated Financial Statements reflect all adjustments, which, in the opinion of management, are necessary to fairly present the results of our Company for the interim periods presented on the basis of U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All significant intercompany transactions and balances have been eliminated in consolidation. The preparation of these Financial Statements 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 reported revenues and expenses during the reporting periods. The results of operations for any interim period are not necessarily indicative of results for the full year. The Interim Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017. Certain amounts for the prior period have been reclassified to conform with the current period presentation.

Income Taxes

On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law and the new legislation contained several key tax provisions that affected us, including a one-time mandatory Deemed Repatriation Transition Tax (“Transition Tax”) on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We were required to recognize the effect of the tax law changes in the period of enactment, such as determining the Transition Tax, re-measuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), Income Tax Accounting Implications of the Tax Act, which allowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. During the fourth quarter of 2017, we made a reasonable estimate of the effects on our deferred tax balances and in relation to the Transition Tax. During the first half of 2018, we did not make any changes to this estimate; however we continue to gather additional information to more precisely compute these income tax impacts.  We expect to complete our analysis within the measurement period in accordance with SAB 118.

The interim income tax provision has been computed based on our estimated annual Effective Tax Rate, which represents our best estimate on a year to date basis for the interim period. As a result, the tax provision for a given quarter equals the difference between the provision recorded cumulatively year to date less the amount recorded cumulatively as of the end of the prior interim period. Our Effective Tax Rate for the quarter differs from the federal tax rate of 21% primarily due to tax-exempt investment income, the dividends received deduction and an excess tax benefit related to the vesting of stock compensation at fair market value.

Short-Term Investments Reclassifications

Cash and overseas deposits that were misclassified within Short-Term Investments were reclassified representing an immaterial correction. Cash of $20.5 million as of December 31, 2017 was reclassified from Short-Term Investments to Cash and Cash Equivalents. Overseas deposits of $28.8 million as of December 31, 2017 were reclassified from Short-Term Investments to Other Invested Assets. The reclassification of cash within Short-Term Investments to Cash and Cash Equivalents impacted the Statement of Cash Flows for the six months ended June 30, 2017 by increasing Net Cash Used in Investing Activities by $4.8 million.

New Accounting Standards Adopted in 2018

Revenue From Contracts With Customers

Effective January 1, 2018, our Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This guidance affects any contracts with customers to transfer goods or services or for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts are not in scope of the new guidance). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Our Company generates an insignificant amount of fee income that is within the scope of this guidance and was not materially impacted by the adoption of this guidance. The adoption of this guidance did not have a material impact on our results of operations, financial condition or liquidity.

Classification and Measurement of Financial Instruments

Effective January 1, 2018, our Company adopted ASU 2016-01 “Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities”. This guidance requires equity investments (except those accounted for under the equity method of accounting, investments that are consolidated or those that meet a practicability exception) to be measured at fair value with changes in fair value recognized in net income, simplifies the impairment assessment of equity investments without readily determinable values by requiring a qualitative assessment to identify impairment, eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost, requires the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liabilities in accordance with the fair value option, requires the separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and clarifies that the reporting organization should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the organization’s other deferred tax assets.

As of January 1, 2018, the adoption of this guidance resulted in a $7.7 million net after-tax increase to Retained Earnings with a corresponding decrease to Accumulated Other Comprehensive Income (Loss), resulting in no change to our Total Stockholders’ Equity. This adjustment reflects the cumulative effect adjustment to reclassify Net Unrealized Gain on Investments in Accumulated Other Comprehensive Income (Loss) for available-for-sale Equity Securities to Retained Earnings upon adoption. Upon the adoption of this guidance, Equity Securities have been measured at fair value with changes in fair value recognized in Net Income through Net Unrealized Gains (Losses) on Equity Securities at Fair Value. The other aspects of this guidance only impacted disclosure or did not apply to our Company and therefore did not impact our results of operations, financial condition or liquidity.

Cash Flows

Effective January 1, 2018, our Company adopted ASU 2016-15, “Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments” which addresses diversity in practice in how eight specific cash receipts and cash payments should be presented and classified on the statement of cash flows. The adoption of this guidance did not impact our results of operations, financial condition or liquidity.

Effective January 1, 2018, our Company adopted ASU 2016-18, “Statement of Cash Flows (Topic 230) – Restricted Cash” which addresses diversity in practice in the classification and presentation of changes in restricted cash on the statement of cash flows. This guidance requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Transfers between cash and cash equivalents and restricted cash and restricted cash equivalents will no longer be presented on the statement of cash flows. To assist in meeting the requirements of this guidance to provide a reconciliation from the Statement of Cash Flows to the Balance Sheet, upon adoption of this guidance our Company added new accounts titled “Cash and Cash Equivalents” and “Restricted Cash and Cash Equivalents” and reclassified amounts previously held in Short-Term Investments to these accounts for all periods presented. This resulted in the reclassification of $71.3 million of restricted and unrestricted cash and cash equivalent balances as of December 31, 2017. This guidance was adopted on a retrospective basis. Prior to the adoption of this guidance, restricted and unrestricted cash and cash equivalent balances included in the Short-Term Investments account had been presented as a cash flow provided by (used in) investing activities. Consequently, the Statement of Cash Flows for the six months ended June 30, 2017 includes a revision to increase “Net Cash Used in Investing Activities” by $18.1 million.

Income Taxes

Effective January 1, 2018, our Company adopted ASU 2016-16, “Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other than Inventory” that requires companies to account for the income tax effects of intercompany transfers of assets other than inventory when the transfer occurs. The adoption of this guidance did not impact our results of operations, financial condition or liquidity.

Definition of a Business

Effective January 1, 2018, our Company adopted ASU 2017-01, “Clarifying the Definition of a Business” that provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance will be applied to transactions prospectively. The adoption of this guidance did not impact our results of operations, financial condition or liquidity.

Tax Reform Reclassification from Other Comprehensive Income

Effective January 1, 2018, our Company early adopted ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” that permits entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings. The total impact of the remeasurement and other adjustments was reflected in 2017 income from continuing operations, regardless of where deferred taxes were originally recorded. As of January 1, 2018, the adoption of this guidance resulted in a one-time reclassification of $2.8 million, decreasing Retained Earnings and increasing Accumulated Other Comprehensive Income (Loss) primarily from the remeasurement of deferred tax assets and liabilities associated with unrealized gains and losses on investments and currency translation adjustments using the 21% corporate tax rate. 

Significant Accounting Policies

There were no notable changes in our significant accounting policies subsequent to our Annual Report on Form 10-K for the year ended December 31, 2017, with the exception of changes related to the adoption of ASU 2016-01 and ASU 2016-18 impacting the following accounting policies:

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Cash includes cash on hand and demand deposits with banks. Cash Equivalents include highly liquid investments with original maturities of three months or less including money-market funds. Restricted Cash and Cash Equivalents primarily relates to funds that are held to support regulatory and contractual obligations.

Investments

Fixed Maturities held by our Company were carried at fair value and classified as available-for-sale. Available-for-sale securities are debt securities not classified as either held-to-maturity securities or trading securities and are reported at fair value, with unrealized gains and losses excluded from earnings and reported in Accumulated Other Comprehensive Income (“AOCI”) as a separate component of Stockholders’ Equity. Fixed Maturities include bonds, mortgage-backed and asset-backed securities, and redeemable preferred stocks.  

Upon adoption of ASU 2016-01 on January 1, 2018, Equity Securities held by our Company were carried at fair value with any changes in fair value recognized in Net Income through the Net Unrealized Gains (Losses) on Equity Securities at Fair Value account. Prior to the adoption of ASU 2016-01, Equity Securities were carried at fair value and classified as available-for-sale. For our policy on Equity Securities classified as available-for-sale, refer to Note 1 within our Annual Report on Form 10-K for the year ended December 31, 2017. Equity Securities consist of common stock, exchange traded funds, mutual funds and preferred stock.

Other Invested Assets consist of investments our Company made in certain strategic companies which are accounted for using the equity method of accounting and overseas deposits which are carried at fair value.

For our investments applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on our Company’s proportionate share of the net income or loss of the companies.  Changes in the carrying value of such investments are recorded in Other Income. In applying the equity method, we use the most recently available financial information provided by the companies which is generally three months prior to the end of the reporting period.

Overseas deposits include private funds held by the Syndicate and invested according to local regulatory requirements. The compositions of the overseas deposits vary and the deposits are based on the portfolio level reporting that is provided by Lloyd’s. The fair values of these overseas deposits were measured using the net asset value practical expedient and therefore have not been categorized within the fair value hierarchy. Changes in the fair value of the Overseas deposits are recorded in Net Investment Income.

Short-Term Investments are carried at fair value.  Short-Term Investments have maturities greater than three months but less than one year from the purchase date.

All prices for our Fixed Maturities, Equity Securities and Short-Term Investments are classified as Level 1, Level 2 or Level 3 under the fair value hierarchy, as defined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 820 (“ASC 820”).  

Premiums and discounts on Fixed Maturities are amortized into interest income over the life of the security using the interest method.  For Mortgage-Backed and Asset-Backed Securities, anticipated prepayments and expected maturities are utilized in applying the interest rate method.  An effective yield is calculated based on projected principal cash flows at the time of original purchase.  The effective yield is used to amortize the purchase price of the security over the security’s expected life.  Book values are adjusted to reflect the amortization of premium or accretion of discount on a monthly basis. The projected principal cash flows are based on certain prepayment assumptions, which are generated using a prepayment model.  The prepayment model uses a number of factors to estimate prepayment activity including the current levels of interest rates (refinancing incentive), time of year (seasonality), economic activity (including housing turnover) and term and age of the underlying collateral (burnout, seasoning).  Prepayment assumptions associated with the Mortgage-Backed and Asset-Backed Securities are reviewed on a periodic basis.  When changes in prepayment assumptions are deemed necessary as the result of actual prepayments differing from anticipated prepayments, securities are revalued based upon the new prepayment assumptions utilizing the retrospective adjustment method, whereby the effective yield is recalculated to reflect actual payments to date and anticipated future payments.  The investment in such securities is adjusted to the amount that would have existed had the new effective yield been applied since the acquisition of the security.  Such adjustments, if any, are included in Net Investment Income for the current period.

Realized Gains and Losses on sales of investments are recognized when the related trades are executed and are determined on the basis of the specific identification method.

Impairment of Invested Assets

Management regularly reviews our Fixed Maturities portfolio to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of securities.

Our Company reviews the magnitude of a security’s unrealized loss compared to its cost/amortized cost and the length of time that the security has been impaired to determine if an unrealized loss is other-than-temporary. If warranted as a result of conditions relating to a particular security, our Company will also review securities with declines in fair value resulting from a headline news event involving the issuer, a headline news event involving the asset class, the advice of our external asset managers, or economic events that may impact the issuer to determine if an unrealized loss is other-than-temporary. The depth of analysis performed is dependent upon the nature and magnitude of the indicators of other-than-temporary impairment present in regards to each impaired security.

Our Company assesses the underlying fundamentals of each issuer to determine if there is a change in the amount or timing of expected cash flows. Management compares the amortized cost basis to the present value of the revised cash flows using the historical book yield to determine the credit loss portion of impairment which is recognized in earnings. All non-credit losses where we have the intent and ability to hold the security until recovery are recognized as changes in Other than Temporary Impairment (“OTTI”) losses within AOCI.

Specifically for structured Fixed Maturities, our Company analyzes projections provided by our investment managers with respect to an expected principal loss under a range of scenarios and utilizes the most likely outcomes. The analysis relies on actual collateral performance measures such as default rate, prepayment rate and loss severity. These assumptions are applied throughout the remaining term of the deal, incorporating the transaction structure and priority of payments, to generate loss adjusted cash flows. Results of the analysis will indicate whether the security is expected ultimately to incur a loss or whether there is a material impact on yield due to either a projected loss or a change in cash flow timing. A break-even default rate is also calculated. A comparison of the break-even default rate to the actual default rate provides an indication of the level of cushion or coverage to the first dollar principal loss. For securities in which a tranche loss is present and the net present value of loss adjusted cash flows is less than book value, credit impairment is recognized in earnings. The output data also includes a number of additional metrics such as average life remaining, original and current credit support, over 60 day delinquency and security rating. The significant inputs used to measure the amount of credit loss recognized in earnings are actual delinquency rates, default probability, severity and prepayment assumptions.

Projected losses are a function of both loss severity and probability of default, which differ based on property type, vintage and the stress of the collateral.

For our policy on evaluating Equity Securities for impairment prior to the adoption of ASU 2016-01 on January 1, 2018, refer to Note 1 within our Annual Report on Form 10-K for the year ended December 31, 2017.

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Business Combinations

6 Months Ended

Jun. 30, 2018

Business Combinations [Abstract]

Business Combinations

NOTE 2.  BUSINESS COMBINATIONS

On June 7, 2018 (the “acquisition date”), our Company acquired 100% ownership interest in BDM and ASCO. Our Company also acquired in this transaction a wholly-owned subsidiary of ASCO, Canal Re S.A., a reinsurance company licensed under the laws of the Grand Duchy of Luxembourg (“Canal Re”). The acquisition of all three of these entities will be referred to as (the “Acquisition”). The Acquisition was undertaken as part of our Company’s strategy of expanding to more brokers and insureds across Europe and reinforces our Company’s presence in the European Union’s single market. We anticipate that this will enable our Company to better serve its European clients after Brexit, and will also provide an opportunity for BDM and ASCO to reach a wider European audience.

Our Company paid a purchase price of EUR 35.0 million in cash at the acquisition date (which was approximately $40.5 million based on the exchange rate as of June 30, 2018). Additionally, our Company will be reimbursed up to EUR 5.0 million (which is approximately $5.8 million based on the exchange rate as of June 30, 2018) in the event of adverse development of claims incurred prior to December 31, 2016 as measured on December 31, 2019. This reimbursement was valued at $nil as of the acquisition date and June 30, 2018.

The purchase price was allocated to the assets acquired and liabilities assumed of BDM and ASCO based on estimated fair values as of the acquisition date and our Company recognized goodwill of $11.3 million.

Our Company identified finite lived intangible assets of $7.9 million, including customer relationships, the value of business acquired (“VOBA”), broker networks and trade name. These finite lived intangible assets will be amortized over a weighted average period of 12 years.

Our Company identified indefinite lived intangible assets of $2.5 million, related to ASCO’s European licenses.

The fair value of the assets acquired and liabilities assumed and the allocation of the purchase price on the acquisition date are summarized in the table below:

amounts in thousands	June 30, 2018
Consideration paid	$	40,492
Assets
Investments		45,182
Cash and Cash Equivalents		18,109
Prepaid Reinsurance Premiums		2,701
Reinsurance Recoverables on Paid Losses		1,311
Reinsurance Recoverables on Unpaid Losses and LAE		15,769
Other Assets		19,943
Fair Value of Identifiable Intangible Assets		10,391
Total Assets Acquired	$	113,406
Liabilities
Reserves for Losses and LAE		31,928
Unearned Premiums		11,139
Deferred Income Tax		8,947
Accounts Payable and Other Liabilities		32,212
Total Liabilities Assumed	$	84,226
Goodwill	$	11,312

Significant Fair Value Adjustments were as follows:

• Fair Value of Finite and Indefinite-Lived Intangibles – To establish the fair value of identifiable intangible assets related to customer relationships, licenses, value of business acquired, broker networks and trade name.

• Fair Value of Property – To adjust the carrying value of real estate property to reflect fair value.

• Fair Value of Software – To establish the fair value of internal use software systems.

• Deferred Income Tax – To reflect the deferred tax impact on the fair value adjustments.

• Goodwill – To establish the fair value of goodwill related to the Acquisition.

The business combination accounting is subject to change if additional information that existed as of the balance sheet date, but was not available, later becomes available within the measurement period, which cannot exceed twelve months from the acquisition date. The acquisition date fair values of the assets acquired and liabilities assumed, including Reserves for Losses and LAE, Deferred Income Tax and Identifiable Intangible Assets, as well as the related estimated useful lives, are provisional and may be subject to adjustments, which may impact the amounts recorded for assets acquired and liabilities assumed as well as the goodwill.

The amount of revenue and earnings of BDM and ASCO since the acquisition date has been immaterial.

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Segment Information

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Segment Information

NOTE 3.  SEGMENT INFORMATION

We report our results of operations consistent with the manner in which our Chief Operating Decision Maker reviews the business to assess performance through our reporting segments: U.S. Insurance, International Insurance (“Int’l Insurance”), Global Reinsurance (“GlobalRe”) and Corporate. 

We classify our business into three underwriting segments: U.S. Insurance, Int’l Insurance and GlobalRe.  Both the U.S. Insurance and Int’l Insurance reporting segments are each comprised of three operating segments: Marine, P&C and Professional Liability. The underwriting results of the acquired business from BDM and ASCO are included in the Int’l Insurance reporting segment, with no new operating segments resulting from the acquisition.

We evaluate the performance of each of the underwriting segments based on underwriting results.  Underwriting results are measured based on Underwriting Profit or Loss and the related Combined Ratio, which are both measures of underwriting profitability.   Underwriting Profit (Loss) is calculated from Net Earned Premiums less the sum of Net Losses and Loss Adjustment Expenses (“LAE”), Commission Expenses, Other Operating Expenses and Other Underwriting Income (Expense).  The Combined Ratio is derived by dividing the sum of Net Losses and LAE, Commission Expenses, Other Operating Expenses and Other Underwriting Income (Expense) by Net Earned Premiums.  A Combined Ratio of less than 100% indicates an Underwriting Profit and greater than 100% indicates an Underwriting Loss.  Our underwriting performance is evaluated separately from the rest of our operations.  

The performance of our investment portfolios, our liquidity and capital resource needs, our foreign currency exposure and our tax planning strategies are evaluated on a consolidated basis within our Corporate segment. We do not allocate our assets by underwriting segment as we evaluate the underwriting results of these segments separately from the results of our investments portfolio.

Financial data by segment for the three and six months ended June 30, 2018 and 2017 was as follows:

	Three Months Ended June 30, 2018
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	179,746		$	92,071		$	59,198		$	—		$	331,015
Net Losses and LAE		(111,885	)		(52,304	)		(32,144	)		—			(196,333	)
Commission Expenses		(20,382	)		(19,863	)		(13,148	)		200			(53,193	)
Other Operating Expenses		(38,447	)		(23,299	)		(6,436	)		—			(68,182	)
Other Underwriting Income (Expense)		71			—			136			(200	)		7
Underwriting Profit (Loss)	$	9,103		$	(3,395	)	$	7,606		$	—		$	13,314
Net Investment Income											24,601			24,601
Total Net Realized and Unrealized Gains											3,116			3,116
Interest Expense											(3,864	)		(3,864	)
Other Income											2,621			2,621
Income (Loss) Before Income Taxes	$	9,103		$	(3,395	)	$	7,606		$	26,474		$	39,788
Income Tax Expense											(7,684	)		(7,684	)
Net Income													$	32,104
Losses and LAE Ratio		62.2	%		56.8	%		54.3	%					59.3	%
Commission Expense Ratio		11.3	%		21.6	%		22.2	%					16.1	%
Other Operating Expense Ratio (2)		21.4	%		25.3	%		10.7	%					20.6	%
Combined Ratio		94.9	%		103.7	%		87.2	%					96.0	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

	Three Months Ended June 30, 2017
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	167,087		$	82,100		$	44,648		$	—		$	293,835
Net Losses and LAE		(105,270	)		(44,095	)		(27,745	)		—			(177,110	)
Commission Expenses		(20,460	)		(19,001	)		(8,970	)		258			(48,173	)
Other Operating Expenses		(33,140	)		(22,506	)		(5,120	)		—			(60,766	)
Other Underwriting Income (Expense)		100			—			169			(258	)		11
Underwriting Profit (Loss)		8,317			(3,502	)		2,982		$	—			7,797
Net Investment Income											22,265			22,265
Total Net Realized and Unrealized Gains											1,694			1,694
Interest Expense											(3,861	)		(3,861	)
Other Loss											(422	)		(422	)
Income (Loss) Before Income Taxes	$	8,317		$	(3,502	)	$	2,982		$	19,676		$	27,473
Income Tax Expense											(6,971	)		(6,971	)
Net Income													$	20,502
Losses and LAE Ratio		63.0	%		53.7	%		62.1	%					60.3	%
Commission Expense Ratio		12.2	%		23.1	%		20.1	%					16.4	%
Other Operating Expense Ratio (2)		19.8	%		27.5	%		11.1	%					20.6	%
Combined Ratio		95.0	%		104.3	%		93.3	%					97.3	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

	Six Months Ended June 30, 2018
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	352,659		$	185,281		$	115,702		$	—		$	653,642
Net Losses and LAE		(222,307	)		(98,147	)		(62,024	)		—			(382,478	)
Commission Expenses		(41,243	)		(39,619	)		(26,916	)		433			(107,345	)
Other Operating Expenses		(75,438	)		(43,829	)		(11,841	)		—			(131,108	)
Other Underwriting Income (Expense)		169			—			274			(433	)		10
Underwriting Profit	$	13,840		$	3,686		$	15,195		$	—		$	32,721
Net Investment Income											48,303			48,303
Total Net Realized and Unrealized Gains											1,104			1,104
Interest Expense											(7,728	)		(7,728	)
Other Income											2,501			2,501
Income Before Income Taxes	$	13,840		$	3,686		$	15,195		$	44,179		$	76,901
Income Tax Expense											(13,919	)		(13,919	)
Net Income													$	62,982
Losses and LAE Ratio		63.0	%		53.0	%		53.6	%					58.5	%
Commission Expense Ratio		11.7	%		21.4	%		23.3	%					16.4	%
Other Operating Expense Ratio (2)		21.4	%		23.6	%		10.0	%					20.1	%
Combined Ratio		96.1	%		98.0	%		86.9	%					95.0	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

	Six Months Ended June 30, 2017
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	331,091		$	166,186		$	82,689		$	—		$	579,966
Net Losses and LAE		(204,096	)		(94,800	)		(47,814	)		—			(346,710	)
Commission Expenses		(40,844	)		(38,234	)		(17,462	)		523			(96,017	)
Other Operating Expenses		(66,612	)		(42,299	)		(10,393	)		—			(119,304	)
Other Underwriting Income (Expense)		210			—			345			(523	)		32
Underwriting Profit (Loss)	$	19,749		$	(9,147	)	$	7,365		$	—		$	17,967
Net Investment Income											43,713			43,713
Total Net Realized and Unrealized Gains											1,650			1,650
Interest Expense											(7,722	)		(7,722	)
Other Income											625			625
Income (Loss) Before Income Taxes	$	19,749		$	(9,147	)	$	7,365		$	38,266		$	56,233
Income Tax Expense											(14,621	)		(14,621	)
Net Income													$	41,612
Losses and LAE Ratio		61.6	%		57.0	%		57.8	%					59.8	%
Commission Expense Ratio		12.3	%		23.0	%		21.1	%					16.6	%
Other Operating Expense Ratio (2)		20.1	%		25.5	%		12.2	%					20.5	%
Combined Ratio		94.0	%		105.5	%		91.1	%					96.9	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

Revenue by operating segment for the three and six months ended June 30, 2018 and 2017 was as follows:

	Three Months Ended June 30, 2018									Three Months Ended June 30, 2017									% Change
amounts in thousands	Gross Written Premiums		Ceded Written Premiums			NetWritten Premiums		Net Earned Premiums		Gross Written Premiums		Ceded Written Premiums			Net Written Premiums		Net Earned Premiums		Gross Written Premiums			Ceded Written Premiums			NetWritten Premiums			Net Earned Premiums
U.S. Insurance
Marine	$	38,830	$	(16,918	)	$	21,912	$	21,177	$	41,687	$	(19,451	)	$	22,236	$	21,812		(6.9	%)		(13.0	%)		(1.5	%)		(2.9	%)
P&C		217,984		(54,835	)		163,149		132,630		187,492		(51,147	)		136,345		121,226		16.3	%		7.2	%		19.7	%		9.4	%
ProfessionalLiability		31,664		(4,391	)		27,273		25,939		28,007		(3,259	)		24,748		24,049		13.1	%		34.7	%		10.2	%		7.9	%
Total	$	288,478	$	(76,144	)	$	212,334	$	179,746	$	257,186	$	(73,857	)	$	183,329	$	167,087		12.2	%		3.1	%		15.8	%		7.6	%
Int'l Insurance
Marine	$	40,714	$	(11,523	)	$	29,191	$	37,197	$	49,597	$	(12,536	)	$	37,061	$	39,525		(17.9	%)		(8.1	%)		(21.2	%)		(5.9	%)
P&C		46,579		(17,705	)		28,874		23,715		46,663		(20,362	)		26,301		23,337		(0.2	%)		(13.1	%)		9.8	%		1.6	%
Professional Liability		45,230		(10,654	)		34,576		31,159		34,933		(10,911	)		24,022		19,238		29.5	%		(2.4	%)		43.9	%		62.0	%
Total	$	132,523	$	(39,882	)	$	92,641	$	92,071	$	131,193	$	(43,809	)	$	87,384	$	82,100		1.0	%		(9.0	%)		6.0	%		12.1	%
GlobalRe	$	76,235	$	(1,918	)	$	74,317	$	59,198	$	63,800	$	(1,231	)	$	62,569	$	44,648		19.5	%		55.8	%		18.8	%		32.6	%
Total	$	497,236	$	(117,944	)	$	379,292	$	331,015	$	452,179	$	(118,897	)	$	333,282	$	293,835		10.0	%		(0.8	%)		13.8	%		12.7	%

	Six Months Ended June 30, 2018									Six Months Ended June 30, 2017									% Change
amounts in thousands	Gross Written Premiums		Ceded Written Premiums			NetWritten Premiums		Net Earned Premiums		Gross Written Premiums		Ceded Written Premiums			NetWritten Premiums		Net Earned Premiums		Gross Written Premiums			Ceded Written Premiums			NetWritten Premiums			Net Earned Premiums
U.S. Insurance
Marine	$	80,554	$	(34,398	)	$	46,156	$	42,269	$	82,637	$	(36,971	)	$	45,666	$	44,506		(2.5	%)		(7.0	%)		1.1	%		(5.0	%)
P&C		386,177		(99,747	)		286,430		260,220		358,126		(89,345	)		268,781		240,349		7.8	%		11.6	%		6.6	%		8.3	%
ProfessionalLiability		61,675		(8,580	)		53,095		50,170		54,028		(9,028	)		45,000		46,236		14.2	%		(5.0	%)		18.0	%		8.5	%
Total	$	528,406	$	(142,725	)	$	385,681	$	352,659	$	494,791	$	(135,344	)	$	359,447	$	331,091		6.8	%		5.5	%		7.3	%		6.5	%
Int'l Insurance
Marine	$	97,192	$	(19,577	)	$	77,615	$	76,476	$	118,430	$	(23,462	)	$	94,968	$	77,020		(17.9	%)		(16.6	%)		(18.3	%)		(0.7	%)
P&C		80,539		(31,372	)		49,167		45,484		87,031		(50,008	)		37,023		45,517		(7.5	%)		(37.3	%)		32.8	%		(0.1	%)
ProfessionalLiability		82,664		(17,821	)		64,843		63,321		67,592		(16,932	)		50,660		43,649		22.3	%		5.3	%		28.0	%		45.1	%
Total	$	260,395	$	(68,770	)	$	191,625	$	185,281	$	273,053	$	(90,402	)	$	182,651	$	166,186		(4.6	%)		(23.9	%)		4.9	%		11.5	%
GlobalRe	$	203,659	$	(8,411	)	$	195,248	$	115,702	$	134,640	$	(6,293	)	$	128,347	$	82,689		51.3	%		33.7	%		52.1	%		39.9	%
Total	$	992,460	$	(219,906	)	$	772,554	$	653,642	$	902,484	$	(232,039	)	$	670,445	$	579,966		10.0	%		(5.2	%)		15.2	%		12.7	%

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Investments

6 Months Ended

Jun. 30, 2018

Investments Debt And Equity Securities [Abstract]

Investments

NOTE 4.  INVESTMENTS

The following tables set forth our Company’s Available-For-Sale Investments as of June 30, 2018 and December 31, 2017 and include Other-Than-Temporary-Impairment (“OTTI”) securities recognized within Accumulated Other Comprehensive Income (“AOCI”):

	June 30, 2018
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
amounts in thousands	Value		Gains		(Losses)			Cost
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	289,612	$	955	$	(4,189	)	$	292,846
States, Municipalities and Political Subdivisions		658,129		10,410		(4,870	)		652,589
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		362,870		1,091		(14,497	)		376,276
Residential Mortgage Obligations		96,134		464		(431	)		96,101
Asset-Backed Securities		476,838		737		(2,749	)		478,850
Commercial Mortgage-Backed Securities		168,609		807		(2,817	)		170,619
Subtotal	$	1,104,451	$	3,099	$	(20,494	)	$	1,121,846
Corporate Exposures (1)		909,349		4,303		(19,302	)		924,348
Total Fixed Maturities	$	2,961,541	$	18,767	$	(48,855	)	$	2,991,629
Short-Term Investments		6,368		—		—			6,368
Total Available-For-Sale Investments	$	2,967,909	$	18,767	$	(48,855	)	$	2,997,997

(1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

	December 31, 2017
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
amounts in thousands	Value		Gains		(Losses)			Cost
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	393,563	$	2,081	$	(2,014	)	$	393,496
States, Municipalities and Political Subdivisions		814,632		20,136		(1,423	)		795,919
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		407,619		2,352		(5,414	)		410,681
Residential Mortgage Obligations		54,104		606		(79	)		53,577
Asset-Backed Securities		328,753		2,138		(663	)		327,278
Commercial Mortgage-Backed Securities		160,904		2,354		(1,182	)		159,732
Subtotal	$	951,380	$	7,450	$	(7,338	)	$	951,268
Corporate Exposures (1)		897,479		14,491		(3,737	)		886,725
Total Fixed Maturities	$	3,057,054	$	44,158	$	(14,512	)	$	3,027,408
Equity Securities:
Common Stocks	$	52,439	$	7,423	$	(112	)	$	45,128
Preferred Stocks		183,542		6,071		(1,560	)		179,031
Total Equity Securities	$	235,981	$	13,494	$	(1,672	)	$	224,159
Short-Term Investments		6,480		3		—			6,477
Total Available-For-Sale Investments	$	3,299,515	$	57,655	$	(16,184	)	$	3,258,044

(1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

The following table sets forth our Company’s Equity Securities at fair value as of June 30, 2018:

	As of June 30, 2018
			Gross		Gross
	Fair		Unrealized		Unrealized			Cost
amounts in thousands	Value		Gains		(Losses)
Equity Securities:
Common Stocks	$	145,077	$	9,749	$	(499	)	$	135,827
Preferred Stocks		182,389		3,854		(3,135	)		181,670
Total Equity Securities	$	327,466	$	13,603	$	(3,634	)	$	317,497

Our Company made investments in certain companies, which are reported as Other Invested Assets on the Consolidated Balance Sheet and accounted for using the equity method.  In applying the equity method, these investments were initially recorded at cost and subsequently adjusted based on our Company’s proportionate share of the net income or loss of the investments. Our initial purchase price for these investments was $2.0 million with a current carrying value of $1.7 million at June 30, 2018 and  December 31, 2017, as reflected on our Consolidated Balance Sheet.  

Other Invested Assets also includes overseas deposits with a fair value of $36.6 million at June 30, 2018 and $28.8 million at December 31, 2017.  The overseas deposits consist of investments in private funds which are managed centrally by The Corporation of Lloyds in support of all Lloyd’s market participants. The funds consist of fixed income securities, bank deposits, and cash invested in local markets which are intended to fulfill regulatory deposit requirements in worldwide jurisdictions. Our Company’s ability to withdraw from the funds is restricted by an annual and quarterly funding and release process managed by Lloyd’s in conjunction with Syndicate 1221’s capital requirements in various jurisdictions.

As of June 30, 2018 and December 31, 2017, our Company did not have a concentration of greater than 5% of invested assets in a single non-government backed issuer.

As of June 30, 2018 and December 31, 2017, Fixed Maturities for which Non-Credit OTTI was previously recognized and included in AOCI were in a Net Unrealized Gain position of $0.4 million and $0.5 million, respectively.

The fair value of our Company’s Fixed Maturities investment portfolio may fluctuate significantly in response to various factors such as changes in interest rates, investment quality ratings, foreign exchange rates and credit spreads. Our Company does not have the intent to sell nor is it more likely than not that it will have to sell Fixed Maturities in unrealized loss positions that are not other-than-temporarily impaired before recovery. For structured securities, default probability and severity assumptions differ based on property type, vintage and the stress of the collateral. Our Company does not intend to sell, and it is more likely than not that our Company will not be required to sell, these securities before the recovery of the amortized cost basis. Our Company may realize investment losses to the extent our liquidity needs require the disposition of Fixed Maturity securities in unfavorable interest rate, liquidity or credit spread environments. Significant changes in the factors our Company considers when evaluating investments for impairment losses could result in a significant change in impairment losses reported in the Consolidated Financial Statements.

The contractual maturity dates for Fixed Maturities categorized by the number of years until maturity as of June 30, 2018 are shown in the following table:

	June 30, 2018
	Fair		Amortized
amounts in thousands	Value		Cost
Due in one year or less	$	219,948	$	221,066
Due after one year through five years		722,278		732,073
Due after five years through ten years		336,352		338,140
Due after ten years		578,512		578,504
Mortgage-Backed and Asset-Backed Securities		1,104,451		1,121,846
Total	$	2,961,541	$	2,991,629

Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Prepayment assumptions associated with the Mortgage-Backed and Asset-Backed Securities are reviewed on a periodic basis. When changes in prepayment assumptions are deemed necessary as the result of actual prepayments differing from anticipated prepayments, securities are revalued based upon the new prepayment assumptions utilizing the retrospective accounting method. Due to the periodic repayment of principal, our Mortgage-Backed and Asset-Backed Securities are estimated to have an effective maturity of approximately 5.3 years.

The following tables summarize all Available-For-Sale securities in a gross unrealized loss position as of June 30, 2018 and December 31, 2017, showing the aggregate fair value and gross unrealized loss by the length of time those securities have continuously been in a gross unrealized loss position:

	June 30, 2018
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
amounts in thousands	Value		(Losses)			Value		(Losses)			Value		(Losses)
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	220,029	$	(3,420	)	$	39,864	$	(769	)	$	259,893	$	(4,189	)
States, Municipalities and Political Subdivisions		213,600		(3,184	)		42,654		(1,686	)		256,254		(4,870	)
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		115,138		(3,504	)		214,279		(10,993	)		329,417		(14,497	)
Residential Mortgage Obligations		78,032		(421	)		387		(10	)		78,419		(431	)
Asset-Backed Securities		273,120		(2,413	)		23,583		(336	)		296,703		(2,749	)
Commercial Mortgage-Backed Securities		59,304		(954	)		22,124		(1,863	)		81,428		(2,817	)
Subtotal	$	525,594	$	(7,292	)	$	260,373	$	(13,202	)	$	785,967	$	(20,494	)
Corporate Exposures (1)		643,226		(15,432	)		101,454		(3,870	)		744,680		(19,302	)
Total Fixed Maturities	$	1,602,449	$	(29,328	)	$	444,345	$	(19,527	)	$	2,046,794	$	(48,855	)

(1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

	December 31, 2017
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
amounts in thousands	Value		(Losses)			Value		(Losses)			Value		(Losses)
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	273,672	$	(1,502	)	$	54,484	$	(512	)	$	328,156	$	(2,014	)
States, Municipalities and Political Subdivisions		74,097		(503	)		45,085		(920	)		119,182		(1,423	)
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		87,496		(346	)		236,745		(5,068	)		324,241		(5,414	)
Residential Mortgage Obligations		12,418		(62	)		546		(17	)		12,964		(79	)
Asset-Backed Securities		85,877		(468	)		24,733		(195	)		110,610		(663	)
Commercial Mortgage-Backed Securities		20,482		(95	)		22,903		(1,087	)		43,385		(1,182	)
Subtotal	$	206,273	$	(971	)	$	284,927	$	(6,367	)	$	491,200	$	(7,338	)
Corporate Exposures (1)		295,433		(1,690	)		121,410		(2,047	)		416,843		(3,737	)
Total Fixed Maturities	$	849,475	$	(4,666	)	$	505,906	$	(9,846	)	$	1,355,381	$	(14,512	)
Equity Securities:
Common Stocks	$	11,245	$	(81	)	$	1,770	$	(31	)	$	13,015	$	(112	)
Preferred Stocks		50,861		(1,524	)		662		(36	)		51,523		(1,560	)
Total Equity Securities	$	62,106	$	(1,605	)	$	2,432	$	(67	)	$	64,538	$	(1,672	)
Total Fixed Maturities and Equity Securities	$	911,581	$	(6,271	)	$	508,338	$	(9,913	)	$	1,419,919	$	(16,184	)

(1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

Our Company analyzes impaired securities quarterly to determine if any impairments are other-than-temporary.  The above securities with unrealized losses are deemed to be temporarily impaired based on our evaluation.

As of June 30, 2018, there were 753 Fixed Maturities in an unrealized loss position. As of December 31, 2017, there were 454 Fixed Maturities and 22 Equity Securities in an unrealized loss position. As of June 30, 2018, the gross unrealized loss for the greater than 12 months category consists primarily of Agency Residential Mortgage-Backed Securities and Corporate Exposures principally due to an increase in interest rates and spread widening. The gross unrealized loss for the less than 12 months category for the period ended June 30, 2018 consists primarily of Corporate Exposures due to spread widening.  As of December 31, 2017, the gross unrealized loss for the greater than 12 month category consists primarily of Agency Residential Mortgage-Backed Securities and Corporate Exposures and is mostly due to an increase in interest rates since the time of purchase.  The gross unrealized loss for the less than 12 months category for the period ended December 31, 2017 consists primarily of Corporate Bonds and Preferred Stocks, which are reported in Equity Securities, due to an increase in interest rates since time of purchase, as well as Foreign Government Bonds due to an unfavorable exchange rate movement in our Canadian portfolio.

As of June 30, 2018 and December 31, 2017, the largest unrealized loss by a non-government backed issuer in the investment portfolio was $1.7 million and $0.7 million, respectively.

Our Company’s ability to hold securities is supported by sufficient cash flow from our operations and from maturities within our investment portfolio in order to meet our claims payments and other disbursement obligations arising from our underwriting operations without selling such investments.  With respect to securities where the decline in value is determined to be temporary and the security’s value is not written down, a subsequent decision may be made to sell that security and realize a loss.  Subsequent decisions on security sales are made within the context of overall risk monitoring, changing information and market conditions.  

Upon adoption of ASU 2016-01 as of January 1, 2018, changes in the fair value of Equity Securities are recognized through Net Income. Our Company did not have any credit related OTTI losses during the three months ended June 30, 2018 or 2017. Our Company did not have any credit related OTTI losses during the six months ended June 30, 2018. Our Company had two credit related OTTI losses of $1.1 million in the equity portfolio during the six months ended June 30, 2017.  

As of June 30, 2018 and 2017, the cumulative amounts related to our Company’s credit loss portion of the OTTI losses on Fixed Maturities was $2.4 million.  There were no changes to the cumulative amounts of our Company’s credit loss portion of OTTI for the three and six months ended June 30, 2018 and 2017.

Our Company’s Net Investment Income was derived from the following sources:

	Three Months Ended June 30,						Six Months Ended June 30,
amounts in thousands	2018			2017			2018			2017
Fixed Maturities	$	21,719		$	19,186		$	42,771		$	37,527
Equity Securities		3,161			3,780			6,086			7,564
Short-Term Investments, Cash & Cash Equivalents		415			87			642			170
Other Invested Assets		141			113			327			242
Total Investment Income	$	25,436		$	23,166		$	49,826		$	45,503
Investment Expenses		(835	)		(901	)		(1,523	)		(1,790	)
Net Investment Income	$	24,601		$	22,265		$	48,303		$	43,713

Realized Gains and Losses on Investments Sold, excluding net OTTI losses recognized in earnings, for the periods indicated, were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
amounts in thousands	2018			2017			2018			2017
Fixed Maturities:
Gains	$	1,541		$	344		$	3,347		$	812
Losses		(481	)		(958	)		(756	)		(2,214	)
Fixed Maturities, Net	$	1,060		$	(614	)	$	2,591		$	(1,402	)
Short-Term Investments, Cash & Cash Equivalents:
Gains	$	63		$	119		$	81		$	226
Losses		(21	)		(45	)		(195	)		(125	)
Short-Term, Net	$	42		$	74		$	(114	)	$	101
Other Invested Assets:
Gains	$	20		$	16		$	70		$	21
Losses		(45	)		(24	)		(86	)		(135	)
Other Invested Assets, Net	$	(25	)	$	(8	)	$	(16	)	$	(114	)
Equity Securities:
Gains	$	754		$	2,470		$	754		$	4,386
Losses		(44	)		(228	)		(259	)		(228	)
Equity Securities, Net	$	710		$	2,242		$	495		$	4,158
Net Realized Gains on Investments Sold	$	1,787		$	1,694		$	2,956		$	2,743

The following table presents the portion of Net Unrealized Gains (Losses) recognized during the three and six months ended June 30, 2018, that relates to Equity Securities held as of June 30, 2018:

	Three Months Ended June 30,		Six Months Ended June 30,
amounts in thousands	2018		2018
Equity Securities:
Total Net Realized and Unrealized Gains (Losses) recognized   during the period	$	2,039	$	(1,357	)
Less: Net Realized Gains on Investments Sold recognized during   the period		710		495
Net Unrealized Gains (Losses) recognized during the period	$	1,329	$	(1,852	)

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Fair Value Measurement

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurement

NOTE 5.  FAIR VALUE MEASUREMENT

The fair value of our financial instruments is determined based on the following fair value hierarchy:

Level 1 – Quoted prices for identical instruments in active markets.  Examples are listed equities and fixed income securities traded on an exchange.  U.S. Treasury securities are reported as Level 1 and are valued based on unadjusted quoted prices for identical assets in active markets that our Company can access.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.  Examples are Asset-Backed and Mortgage-Backed Securities that are similar to other Asset-Backed or Mortgage-Backed Securities observed in the market. U.S. Government Agency Securities are reported as Level 2 and are valued using yields and spreads that are observable in active markets.

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.  An example would be a private placement with minimal liquidity.

The following tables present, for each of the fair value hierarchy levels as defined by the accounting guidance for fair value measurements described above, our Company’s Fixed Maturities and Equity Securities by asset class that are measured at fair value on a recurring basis, as well as the fair value of the 5.75% Senior Notes due October 15, 2023 (the “Senior Notes”) carried at amortized cost as of June 30, 2018 and December 31, 2017:

	June 30, 2018
amounts in thousands	Level 1		Level 2		Level 3		Total
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	80,379	$	209,233	$	—	$	289,612
States, Municipalities and Political Subdivisions		—		658,129		—		658,129
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		—		362,870		—		362,870
Residential Mortgage Obligations		—		96,134		—		96,134
Asset-Backed Securities		—		476,838		—		476,838
Commercial Mortgage-Backed Securities		—		168,609		—		168,609
Subtotal	$	—	$	1,104,451	$	—	$	1,104,451
Corporate Exposures		—		909,349		—		909,349
Total Fixed Maturities	$	80,379	$	2,881,162	$	—	$	2,961,541
Equity Securities:
Common Stocks	$	38,441	$	106,636	$	—	$	145,077
Preferred Stocks		—		182,389		—		182,389
Total Equity Securities	$	38,441	$	289,025	$	—	$	327,466
Short-Term Investments		—		6,368		—		6,368
Total Assets Measured at Fair Value	$	118,820	$	3,176,555	$	—	$	3,295,375
Senior Notes	$	—	$	273,865	$	—	$	273,865
Total Liabilities Measured at Fair Value	$	—	$	273,865	$	—	$	273,865

	December 31, 2017
amounts in thousands	Level 1		Level 2		Level 3		Total
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	178,251	$	215,312	$	—	$	393,563
States, Municipalities and Political Subdivisions		—		814,632		—		814,632
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		—		407,619		—		407,619
Residential Mortgage Obligations		—		54,104		—		54,104
Asset-Backed Securities		—		328,753		—		328,753
Commercial Mortgage-Backed Securities		—		160,904		—		160,904
Subtotal	$	—	$	951,380	$	—	$	951,380
Corporate Exposures		—		897,479		—		897,479
Total Fixed Maturities	$	178,251	$	2,878,803	$	—	$	3,057,054
Equity Securities:
Common Stocks	$	52,439	$	—	$	—	$	52,439
Preferred Stocks		—		183,542		—		183,542
Total Equity Securities	$	52,439	$	183,542	$	—	$	235,981
Short-Term Investments		6,480		—		—		6,480
Total Assets Measured at Fair Value	$	237,170	$	3,062,345	$	—	$	3,299,515
Senior Notes	$	—	$	277,951	$	—	$	277,951
Total Liabilities Measured at Fair Value	$	—	$	277,951	$	—	$	277,951

Other Financial assets and liabilities including Cash, Premium Receivable, Reinsurance Recoverable and Reinsurance Balances Payable are carried at cost, which approximates fair value.  Our Company has Overseas deposits in Other Invested Assets of $36.6 million and $28.8 million at June 30, 2018 and December 2017, respectively, which is measured at fair value using the net asset value (“NAV”) as a practical expedient.

Our Company did not have any transfers between Level 1 and Level 2 classifications for the three and six months ended June 30, 2018 and 2017.   

As of June 30, 2018, our Company did not have any Level 3 assets.

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

NOTE 6.  GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following table shows an analysis of goodwill by reporting segment:

	Six Months Ended June 30,
	U.S.		Int'l
amounts in thousands	Insurance		Insurance			Total
Goodwill at Beginning of the Period	$	1,978	$	2,482		$	4,460
Goodwill Acquired		—		11,312			11,312
Foreign Currency Translation Adjustment		—		(27	)		(27	)
Goodwill at End of the Period	$	1,978	$	13,767		$	15,745

The goodwill acquired primarily relates to expected synergies from combining operations of BDM and ASCO and is not expected to be deductible for tax purposes. The fair values of the assets acquired and liabilities assumed may be subject to adjustments, which may impact the amount recorded for goodwill.

Intangibles

The gross carrying value and weighted average amortization period of intangible assets by type at June 30, 2018 was as follows:

	As of June 30, 2018
	Gross		Weighted Average
amounts in thousands	Carrying Amount		Amortization Period
Finite-Lived Assets
ASCO Customer Relationships	$	4,739	15 years
ASCO VOBA		1,694	4 years
BDM Broker Networks		1,002	15 years
BDM Trade Name		493	1 year
Total	$	7,928
Indefinite-Lived Assets
ASCO European Licenses	$	2,463	indefinite
NUAL Lloyd's Syndicate Capacity		2,136	indefinite
Total	$	4,599

The aggregate amortization expense since the acquisition date of BDM and ASCO has been immaterial.

The fair values of the intangible assets acquired may be subject to adjustments, which may impact the amounts recorded.

The estimated remaining amortization expense for the finite-lived intangible assets is as follows:

amounts in thousands	Total
2018	$	649
2019		1,053
2020		806
2021		806
2022		594
2023 and thereafter		4,020
Total	$	7,928

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Loss Reserves

6 Months Ended

Jun. 30, 2018

Insurance [Abstract]

Loss Reserves

NOTE 7.  LOSS RESERVES

We establish reserves for the estimated unpaid ultimate liability for losses and LAE under the terms of our policies and agreements.  The determination of Reserves for Losses and LAE is partially dependent upon the receipt of information from agents and brokers.  Reserves include estimates for both claims that have been reported and for those that have been incurred but not reported (“IBNR”), and include estimates of expenses associated with processing and settling these claims.  Reserves are recorded in Reserves for Losses and LAE in the Consolidated Balance Sheets.  Our estimates and judgements may be revised as additional experience and other data become available and are reviewed, as new or improved methodologies are developed, or as laws change. Frequency/severity analyses are also performed for certain books of business.  To the extent that reserves are found deficient or redundant, a strengthening or release is recognized as a charge or credit to earnings.

The following table summarizes our Company’s Reserves for Losses and LAE activity for the six months ended June 30, 2018 and 2017:

	For the Six Months Ended June 30,
amounts in thousands	2018			2017
Net Reserves for Losses and LAE at Beginning of Year	$	1,705,380		$	1,510,451
Acquired Net Reserves		16,159			—
Provision for Losses and LAE for Claims Occurring in the Current Year		379,158			331,595
Increase (Decrease) in Estimated Losses and LAE for Claims Occurring in Prior Years		3,320			15,115
Incurred Losses and LAE	$	382,478		$	346,710
Losses and LAE Paid for Claims Occurring During:
Current Year		(32,832	)		(47,235	)
Prior Years		(292,843	)		(249,895	)
Losses and LAE Payments	$	(325,675	)	$	(297,130	)
Foreign Currency Adjustment		(3,310	)		3,432
Net Reserves for Losses and LAE at End of Period		1,775,032			1,563,463
Reinsurance Recoverables on Unpaid Losses and LAE		799,084			782,864
Gross Reserves for Losses and LAE at End of Period	$	2,574,116		$	2,346,327

For the six months ended June 30, 2018, our Incurred Losses and LAE increased $35.8 million as compared to the same period in 2017, primarily due to growth in Net Earned Premium over the prior year.

In addition, we incurred $3.3 million of net prior AY reserve strengthening for the six months ended June 30, 2018 due to net unfavorable non-catastrophe related loss emergence of $11.8 million primarily within our Int’l and U.S. Insurance reporting segments, partially offset by net catastrophe loss releases $8.5 million primarily related to Hurricanes Harvey, Irma and Maria (the “Hurricane events”) and the Puebla, Mexico Earthquake that occurred in the third quarter of 2017. This compared to $15.1 million of net prior AY reserve strengthening for the same period in 2017related to unfavorable loss emergence within our Int’l Insurance and GlobalRe reporting segments.

For the six months ended June 30, 2018, our Losses and LAE Payments increased $28.5 million as compared to the same period in 2017, primarily due to increased claim payments associated with the catastrophe activity occurring in the third quarter of 2017.

Our June 30, 2018 Net Reserves for Losses and LAE includes estimated amounts for numerous catastrophe events. We caution that the magnitude and complexity of losses arising from these events inherently increases the level of uncertainty and therefore the level of management judgment involved in arriving at our estimated Net Reserves for Losses and LAE. As a result, our actual losses for these events may ultimately differ materially from our current estimates.

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Ceded Reinsurance

6 Months Ended

Jun. 30, 2018

Insurance [Abstract]

Ceded Reinsurance

NOTE 8. CEDED REINSURANCE

As of June 30, 2018, the credit quality distribution of our Company’s Reinsurance recoverable of $1.1 billion for ceded paid losses, ceded unpaid losses and LAE, and ceded unearned premiums based on insurer financial strength ratings from A.M. Best or S&P was not significantly different from the credit quality distribution as of December 31, 2017.    

Our allowance for uncollectible reinsurance was $12.6 million as of June 30, 2018 and December 31, 2017.

As of June 30, 2018, the list of our 10 largest reinsurers measured by the amount of Reinsurance recoverable for ceded losses and LAE and ceded unearned premium, together with the reinsurance recoverable and collateral, was similar to the list as of December 31, 2017.

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Debt

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt

NOTE 9.  DEBT

During the first quarter of 2018, the Company reclassified certain overseas deposits from Short-Term Investments to Other Invested Assets. Refer to Note 1. Organization & Summary of Significant Accounting Policies. Although the nature of the investments did not change, this reclassification caused the Company to exceed a covenant of our Club Facility that sets a limitation on other investments as a percentage of total investments.  Our Company has received a waiver of compliance with respect to this covenant, which was subsequently amended to increase the percentage of other investments permitted. As of June 30, 2018, our Company was in compliance with all covenants for our Club Facility, Senior Notes, Australian Facility and Bilateral Facility.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 10.  COMMITMENTS AND CONTINGENCIES

In 2013, the State of Connecticut (“the State”) awarded our Company up to $11.5 million ($8.0 million in loans and $3.5 million in grants) to move our corporate headquarters to Stamford, Connecticut.  The loan is non-interest bearing, has a term of 10 years and is subject to forgiveness based on our compliance with certain conditions set forth in the agreement with the State.  The amount of the loan to be received is dependent on our Company reaching certain milestones for creation of new jobs over a five-year period, and the funds are to be used to offset certain equipment purchases, facility costs, training of employees and other eligible project-related costs.  As of June 30, 2018, our Company has received $11.5 million of the award ($8.0 million in loans and $3.5 million of the grant) and earned a loan forgiveness credit of $7.0 million with the State. Our Company is recognizing the amount of loan and grants received over the period in which offsetting expenses are recognized. Our Company recognized $0.4 million and $0.7 million of the incentive for the three and six months ended June 30, 2018, respectively. As of June 30, 2018 and December 31, 2017, our Company has deferred revenue of $5.3 million and $4.4 million, respectively, which is included in Other Liabilities on the Consolidated Balance Sheets.

On February 16, 2017, our Company entered into a guarantee, pursuant to which it guaranteed all of the liabilities and obligations of NIIC (the “Guarantee”). The Guarantee will remain effective until all of such liabilities and obligations are discharged, and in the event that our Company does not meet its obligations under the Guarantee, any person who is covered by an insurance policy, certificate of coverage or reinsurance contract issued by NIIC will be a third party beneficiary under the Guarantee.  Our Company’s obligations under the Guarantee may be terminated by providing twelve months prior written notice to NIIC. However the obligations of our Company under the Guarantee terminate immediately in the event that (i) the majority of the outstanding voting capital stock in NIIC is sold to any non-affiliated entity; (ii) A.M. Best has confirmed that NIIC will receive the same financial strength rating as NIC or NSIC, without the benefit of the Guarantee; or (iii) NIIC withdraws its request to be rated by A.M. Best, provided that NIIC has not been downgraded within the prior twelve months.

In the ordinary course of conducting business, our Parent Company’s subsidiaries are involved in various legal proceedings. Most of these proceedings consist of claims litigation involving our Parent Company’s subsidiaries as either: (a) liability insurers defending or providing indemnity for third party claims brought against insureds or (b) insurers defending first party coverage claims brought against them. In general, our Company believes we have valid defenses to these cases. Our Company’s management believes that the ultimate liability, if any, with respect to these legal proceedings, after consideration of provisions made for potential losses and cost of defense, will not be material to our Company’s Consolidated Balance Sheets, Statements of Income and Statements of Cash Flows.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

NOTE 11.  STOCK-BASED COMPENSATION

Stock-based compensation granted under our Company’s stock plans is expensed in tranches over the vesting period. Non-performance based grants generally vest equally over a three or four-year period. Performance units generally cliff vest three years after they are granted. Each performance unit and restricted stock unit represents a contingent right to receive one share of Common Stock as of the vesting date. Such Common Stock may be subject to forfeiture for the payment of any required tax withholding.

The activity related to our Company's restricted stock unit awards was as follows:

	Six Months Ended June 30, 2018
	Number of Awards			Weighted Average Grant Date Fair Value (1)
Nonvested at the beginning of the period		159,539		$	41.60
Granted		21,593		$	49.03
Vested (2)		(65,236	)	$	34.16
Forfeited		(7,000	)	$	38.00
Nonvested at the end of the period		108,896		$	47.76

(1) Fair value is based on the closing price of our common shares on the NASDAQ on the grant date.

(2) This amount represents the gross number of shares vested before any share forfeiture to pay required tax withholdings. For the six months ended June 30, 2018 share awards of 25,814 were withheld for tax payments at a weighted average vest date fair value of $55.21.

The activity related to our Company's performance-based equity awards was as follows:

	Six Months Ended June 30, 2018
	Number of Awards			Weighted Average Grant Date Fair Value (1)
Nonvested at the beginning of the period		966,361		$	43.39
Granted		247,554		$	54.15
Performance Adjustment		(59,833	)	$	37.25
Vested (2)		(274,299	)	$	37.25
Forfeited		(16,250	)	$	43.27
Nonvested at the end of the period		863,533		$	48.85

(1) Fair value is based on the closing price of our common shares on the NASDAQ on the grant date.

(2) This amount represents the gross number of shares vested before any share forfeiture to pay required tax withholdings. For the six months ended June 30, 2018 share awards of 117,005 were withheld for tax payments at a weighted average vest date fair value of $55.65.

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Stockholders Equity

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Stockholders' Equity

NOTE 12. STOCKHOLDERS’ EQUITY

On May 10, 2018 our Board of Directors declared a cash dividend of $0.07 per share that was paid on June 29, 2018. 

The declaration and amount of any future dividend will be at the discretion of the Board of Directors, and will depend upon many factors, including financial condition, results of operations, business requirements, regulatory and legal constraints and other factors the Board of Directors deems relevant.

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Organization and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Organization

Organization

We are an international insurance company with a long-standing area of specialization in Marine insurance. We also offer Property and Casualty (“P&C”) insurance, primarily general liability coverage and umbrella & excess liability coverage to commercial enterprises through our Primary and Excess Casualty divisions. We have also developed niches in Professional Liability insurance, through our Directors & Officers (“D&O”) and Errors & Omissions (“E&O”) divisions, as well as assumed reinsurance products.

We operate through various wholly-owned insurance and service companies. Our subsidiaries domiciled in the United States (“U.S.”) include two insurance companies, Navigators Insurance Company (“NIC”) and Navigators Specialty Insurance Company (“NSIC”), as well as our U.S. underwriting agency, Navigators Management Company (“NMC”). NIC includes a branch in the United Kingdom (“U.K”). We also have operations domiciled in the U.K., Hong Kong and Europe. Navigators International Insurance Company Ltd. (“NIIC”), Navigators Management (U.K.) Ltd. (“NMUK”) and Navigators Underwriting Ltd. (“NUL”) are domiciled in the U.K. and NUL includes European branches. Navigators Underwriting Agency Ltd. (“NUAL”), a Lloyd’s of London (“Lloyd’s”) underwriting agency, manages and provides the capital, through Navigators Corporate Underwriters Ltd. (“NCUL”), for our Lloyd’s Syndicate 1221 (the “Syndicate”), and is also domiciled in the U.K. We control 100% of the Syndicate’s stamp capacity.

On June 7, 2018, we acquired 100% ownership interest in Bracht, Deckers & Mackelbert NV, an insurance underwriting agency organized under the laws of Belgium (“BDM”) and Assurances Continentales – Continentale Verzekeringen NV, an insurance company licensed under the laws of Belgium (“ASCO”). The acquisition is being accounted for in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations.” Refer to Note 2. Business Combinations and Note 6. Goodwill and Intangible Assets for further information regarding the acquisition.

Basis of Presentation

Basis of Presentation

The Consolidated Balance Sheet at June 30, 2018 and the Consolidated Statements of Income, Comprehensive Income, Stockholders’ Equity and Cash Flows for the periods ended June 30, 2018 and 2017 are unaudited. The Balance Sheet at December 31, 2017 is derived from our audited Financial Statements. The accompanying Interim Consolidated Financial Statements reflect all adjustments, which, in the opinion of management, are necessary to fairly present the results of our Company for the interim periods presented on the basis of U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All significant intercompany transactions and balances have been eliminated in consolidation. The preparation of these Financial Statements 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 reported revenues and expenses during the reporting periods. The results of operations for any interim period are not necessarily indicative of results for the full year. The Interim Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017. Certain amounts for the prior period have been reclassified to conform with the current period presentation.

Income Taxes

Income Taxes

On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law and the new legislation contained several key tax provisions that affected us, including a one-time mandatory Deemed Repatriation Transition Tax (“Transition Tax”) on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We were required to recognize the effect of the tax law changes in the period of enactment, such as determining the Transition Tax, re-measuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), Income Tax Accounting Implications of the Tax Act, which allowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. During the fourth quarter of 2017, we made a reasonable estimate of the effects on our deferred tax balances and in relation to the Transition Tax. During the first half of 2018, we did not make any changes to this estimate; however we continue to gather additional information to more precisely compute these income tax impacts.  We expect to complete our analysis within the measurement period in accordance with SAB 118.

The interim income tax provision has been computed based on our estimated annual Effective Tax Rate, which represents our best estimate on a year to date basis for the interim period. As a result, the tax provision for a given quarter equals the difference between the provision recorded cumulatively year to date less the amount recorded cumulatively as of the end of the prior interim period. Our Effective Tax Rate for the quarter differs from the federal tax rate of 21% primarily due to tax-exempt investment income, the dividends received deduction and an excess tax benefit related to the vesting of stock compensation at fair market value.

Short-Term Investments Reclassifications

Short-Term Investments Reclassifications

Cash and overseas deposits that were misclassified within Short-Term Investments were reclassified representing an immaterial correction. Cash of $20.5 million as of December 31, 2017 was reclassified from Short-Term Investments to Cash and Cash Equivalents. Overseas deposits of $28.8 million as of December 31, 2017 were reclassified from Short-Term Investments to Other Invested Assets. The reclassification of cash within Short-Term Investments to Cash and Cash Equivalents impacted the Statement of Cash Flows for the six months ended June 30, 2017 by increasing Net Cash Used in Investing Activities by $4.8 million.

New Accounting Standards Adopted in 2018

New Accounting Standards Adopted in 2018

Revenue From Contracts With Customers

Effective January 1, 2018, our Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This guidance affects any contracts with customers to transfer goods or services or for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts are not in scope of the new guidance). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Our Company generates an insignificant amount of fee income that is within the scope of this guidance and was not materially impacted by the adoption of this guidance. The adoption of this guidance did not have a material impact on our results of operations, financial condition or liquidity.

Classification and Measurement of Financial Instruments

Effective January 1, 2018, our Company adopted ASU 2016-01 “Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities”. This guidance requires equity investments (except those accounted for under the equity method of accounting, investments that are consolidated or those that meet a practicability exception) to be measured at fair value with changes in fair value recognized in net income, simplifies the impairment assessment of equity investments without readily determinable values by requiring a qualitative assessment to identify impairment, eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost, requires the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liabilities in accordance with the fair value option, requires the separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and clarifies that the reporting organization should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the organization’s other deferred tax assets.

As of January 1, 2018, the adoption of this guidance resulted in a $7.7 million net after-tax increase to Retained Earnings with a corresponding decrease to Accumulated Other Comprehensive Income (Loss), resulting in no change to our Total Stockholders’ Equity. This adjustment reflects the cumulative effect adjustment to reclassify Net Unrealized Gain on Investments in Accumulated Other Comprehensive Income (Loss) for available-for-sale Equity Securities to Retained Earnings upon adoption. Upon the adoption of this guidance, Equity Securities have been measured at fair value with changes in fair value recognized in Net Income through Net Unrealized Gains (Losses) on Equity Securities at Fair Value. The other aspects of this guidance only impacted disclosure or did not apply to our Company and therefore did not impact our results of operations, financial condition or liquidity.

Cash Flows

Effective January 1, 2018, our Company adopted ASU 2016-15, “Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments” which addresses diversity in practice in how eight specific cash receipts and cash payments should be presented and classified on the statement of cash flows. The adoption of this guidance did not impact our results of operations, financial condition or liquidity.

Effective January 1, 2018, our Company adopted ASU 2016-18, “Statement of Cash Flows (Topic 230) – Restricted Cash” which addresses diversity in practice in the classification and presentation of changes in restricted cash on the statement of cash flows. This guidance requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Transfers between cash and cash equivalents and restricted cash and restricted cash equivalents will no longer be presented on the statement of cash flows. To assist in meeting the requirements of this guidance to provide a reconciliation from the Statement of Cash Flows to the Balance Sheet, upon adoption of this guidance our Company added new accounts titled “Cash and Cash Equivalents” and “Restricted Cash and Cash Equivalents” and reclassified amounts previously held in Short-Term Investments to these accounts for all periods presented. This resulted in the reclassification of $71.3 million of restricted and unrestricted cash and cash equivalent balances as of December 31, 2017. This guidance was adopted on a retrospective basis. Prior to the adoption of this guidance, restricted and unrestricted cash and cash equivalent balances included in the Short-Term Investments account had been presented as a cash flow provided by (used in) investing activities. Consequently, the Statement of Cash Flows for the six months ended June 30, 2017 includes a revision to increase “Net Cash Used in Investing Activities” by $18.1 million.

Income Taxes

Effective January 1, 2018, our Company adopted ASU 2016-16, “Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other than Inventory” that requires companies to account for the income tax effects of intercompany transfers of assets other than inventory when the transfer occurs. The adoption of this guidance did not impact our results of operations, financial condition or liquidity.

Definition of a Business

Effective January 1, 2018, our Company adopted ASU 2017-01, “Clarifying the Definition of a Business” that provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance will be applied to transactions prospectively. The adoption of this guidance did not impact our results of operations, financial condition or liquidity.

Tax Reform Reclassification from Other Comprehensive Income

Effective January 1, 2018, our Company early adopted ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” that permits entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings. The total impact of the remeasurement and other adjustments was reflected in 2017 income from continuing operations, regardless of where deferred taxes were originally recorded. As of January 1, 2018, the adoption of this guidance resulted in a one-time reclassification of $2.8 million, decreasing Retained Earnings and increasing Accumulated Other Comprehensive Income (Loss) primarily from the remeasurement of deferred tax assets and liabilities associated with unrealized gains and losses on investments and currency translation adjustments using the 21% corporate tax rate. 

Significant Accounting Policies

Significant Accounting Policies

There were no notable changes in our significant accounting policies subsequent to our Annual Report on Form 10-K for the year ended December 31, 2017, with the exception of changes related to the adoption of ASU 2016-01 and ASU 2016-18 impacting the following accounting policies:

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Cash includes cash on hand and demand deposits with banks. Cash Equivalents include highly liquid investments with original maturities of three months or less including money-market funds. Restricted Cash and Cash Equivalents primarily relates to funds that are held to support regulatory and contractual obligations.

Investments

Investments

Fixed Maturities held by our Company were carried at fair value and classified as available-for-sale. Available-for-sale securities are debt securities not classified as either held-to-maturity securities or trading securities and are reported at fair value, with unrealized gains and losses excluded from earnings and reported in Accumulated Other Comprehensive Income (“AOCI”) as a separate component of Stockholders’ Equity. Fixed Maturities include bonds, mortgage-backed and asset-backed securities, and redeemable preferred stocks.  

Upon adoption of ASU 2016-01 on January 1, 2018, Equity Securities held by our Company were carried at fair value with any changes in fair value recognized in Net Income through the Net Unrealized Gains (Losses) on Equity Securities at Fair Value account. Prior to the adoption of ASU 2016-01, Equity Securities were carried at fair value and classified as available-for-sale. For our policy on Equity Securities classified as available-for-sale, refer to Note 1 within our Annual Report on Form 10-K for the year ended December 31, 2017. Equity Securities consist of common stock, exchange traded funds, mutual funds and preferred stock.

Other Invested Assets consist of investments our Company made in certain strategic companies which are accounted for using the equity method of accounting and overseas deposits which are carried at fair value.

For our investments applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on our Company’s proportionate share of the net income or loss of the companies.  Changes in the carrying value of such investments are recorded in Other Income. In applying the equity method, we use the most recently available financial information provided by the companies which is generally three months prior to the end of the reporting period.

Overseas deposits include private funds held by the Syndicate and invested according to local regulatory requirements. The compositions of the overseas deposits vary and the deposits are based on the portfolio level reporting that is provided by Lloyd’s. The fair values of these overseas deposits were measured using the net asset value practical expedient and therefore have not been categorized within the fair value hierarchy. Changes in the fair value of the Overseas deposits are recorded in Net Investment Income.

Short-Term Investments are carried at fair value.  Short-Term Investments have maturities greater than three months but less than one year from the purchase date.

All prices for our Fixed Maturities, Equity Securities and Short-Term Investments are classified as Level 1, Level 2 or Level 3 under the fair value hierarchy, as defined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 820 (“ASC 820”).  

Premiums and discounts on Fixed Maturities are amortized into interest income over the life of the security using the interest method.  For Mortgage-Backed and Asset-Backed Securities, anticipated prepayments and expected maturities are utilized in applying the interest rate method.  An effective yield is calculated based on projected principal cash flows at the time of original purchase.  The effective yield is used to amortize the purchase price of the security over the security’s expected life.  Book values are adjusted to reflect the amortization of premium or accretion of discount on a monthly basis. The projected principal cash flows are based on certain prepayment assumptions, which are generated using a prepayment model.  The prepayment model uses a number of factors to estimate prepayment activity including the current levels of interest rates (refinancing incentive), time of year (seasonality), economic activity (including housing turnover) and term and age of the underlying collateral (burnout, seasoning).  Prepayment assumptions associated with the Mortgage-Backed and Asset-Backed Securities are reviewed on a periodic basis.  When changes in prepayment assumptions are deemed necessary as the result of actual prepayments differing from anticipated prepayments, securities are revalued based upon the new prepayment assumptions utilizing the retrospective adjustment method, whereby the effective yield is recalculated to reflect actual payments to date and anticipated future payments.  The investment in such securities is adjusted to the amount that would have existed had the new effective yield been applied since the acquisition of the security.  Such adjustments, if any, are included in Net Investment Income for the current period.

Realized Gains and Losses on sales of investments are recognized when the related trades are executed and are determined on the basis of the specific identification method.

Impairment of Invested Assets

Management regularly reviews our Fixed Maturities portfolio to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of securities.

Our Company reviews the magnitude of a security’s unrealized loss compared to its cost/amortized cost and the length of time that the security has been impaired to determine if an unrealized loss is other-than-temporary. If warranted as a result of conditions relating to a particular security, our Company will also review securities with declines in fair value resulting from a headline news event involving the issuer, a headline news event involving the asset class, the advice of our external asset managers, or economic events that may impact the issuer to determine if an unrealized loss is other-than-temporary. The depth of analysis performed is dependent upon the nature and magnitude of the indicators of other-than-temporary impairment present in regards to each impaired security.

Our Company assesses the underlying fundamentals of each issuer to determine if there is a change in the amount or timing of expected cash flows. Management compares the amortized cost basis to the present value of the revised cash flows using the historical book yield to determine the credit loss portion of impairment which is recognized in earnings. All non-credit losses where we have the intent and ability to hold the security until recovery are recognized as changes in Other than Temporary Impairment (“OTTI”) losses within AOCI.

Specifically for structured Fixed Maturities, our Company analyzes projections provided by our investment managers with respect to an expected principal loss under a range of scenarios and utilizes the most likely outcomes. The analysis relies on actual collateral performance measures such as default rate, prepayment rate and loss severity. These assumptions are applied throughout the remaining term of the deal, incorporating the transaction structure and priority of payments, to generate loss adjusted cash flows. Results of the analysis will indicate whether the security is expected ultimately to incur a loss or whether there is a material impact on yield due to either a projected loss or a change in cash flow timing. A break-even default rate is also calculated. A comparison of the break-even default rate to the actual default rate provides an indication of the level of cushion or coverage to the first dollar principal loss. For securities in which a tranche loss is present and the net present value of loss adjusted cash flows is less than book value, credit impairment is recognized in earnings. The output data also includes a number of additional metrics such as average life remaining, original and current credit support, over 60 day delinquency and security rating. The significant inputs used to measure the amount of credit loss recognized in earnings are actual delinquency rates, default probability, severity and prepayment assumptions.

Projected losses are a function of both loss severity and probability of default, which differ based on property type, vintage and the stress of the collateral.

For our policy on evaluating Equity Securities for impairment prior to the adoption of ASU 2016-01 on January 1, 2018, refer to Note 1 within our Annual Report on Form 10-K for the year ended December 31, 2017.

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Business Combinations (Tables)

6 Months Ended

Jun. 30, 2018

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The fair value of the assets acquired and liabilities assumed and the allocation of the purchase price on the acquisition date are summarized in the table below:

amounts in thousands	June 30, 2018
Consideration paid	$	40,492
Assets
Investments		45,182
Cash and Cash Equivalents		18,109
Prepaid Reinsurance Premiums		2,701
Reinsurance Recoverables on Paid Losses		1,311
Reinsurance Recoverables on Unpaid Losses and LAE		15,769
Other Assets		19,943
Fair Value of Identifiable Intangible Assets		10,391
Total Assets Acquired	$	113,406
Liabilities
Reserves for Losses and LAE		31,928
Unearned Premiums		11,139
Deferred Income Tax		8,947
Accounts Payable and Other Liabilities		32,212
Total Liabilities Assumed	$	84,226
Goodwill	$	11,312

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Financial Data by Segment

Financial data by segment for the three and six months ended June 30, 2018 and 2017 was as follows:

	Three Months Ended June 30, 2018
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	179,746		$	92,071		$	59,198		$	—		$	331,015
Net Losses and LAE		(111,885	)		(52,304	)		(32,144	)		—			(196,333	)
Commission Expenses		(20,382	)		(19,863	)		(13,148	)		200			(53,193	)
Other Operating Expenses		(38,447	)		(23,299	)		(6,436	)		—			(68,182	)
Other Underwriting Income (Expense)		71			—			136			(200	)		7
Underwriting Profit (Loss)	$	9,103		$	(3,395	)	$	7,606		$	—		$	13,314
Net Investment Income											24,601			24,601
Total Net Realized and Unrealized Gains											3,116			3,116
Interest Expense											(3,864	)		(3,864	)
Other Income											2,621			2,621
Income (Loss) Before Income Taxes	$	9,103		$	(3,395	)	$	7,606		$	26,474		$	39,788
Income Tax Expense											(7,684	)		(7,684	)
Net Income													$	32,104
Losses and LAE Ratio		62.2	%		56.8	%		54.3	%					59.3	%
Commission Expense Ratio		11.3	%		21.6	%		22.2	%					16.1	%
Other Operating Expense Ratio (2)		21.4	%		25.3	%		10.7	%					20.6	%
Combined Ratio		94.9	%		103.7	%		87.2	%					96.0	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

	Three Months Ended June 30, 2017
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	167,087		$	82,100		$	44,648		$	—		$	293,835
Net Losses and LAE		(105,270	)		(44,095	)		(27,745	)		—			(177,110	)
Commission Expenses		(20,460	)		(19,001	)		(8,970	)		258			(48,173	)
Other Operating Expenses		(33,140	)		(22,506	)		(5,120	)		—			(60,766	)
Other Underwriting Income (Expense)		100			—			169			(258	)		11
Underwriting Profit (Loss)		8,317			(3,502	)		2,982		$	—			7,797
Net Investment Income											22,265			22,265
Total Net Realized and Unrealized Gains											1,694			1,694
Interest Expense											(3,861	)		(3,861	)
Other Loss											(422	)		(422	)
Income (Loss) Before Income Taxes	$	8,317		$	(3,502	)	$	2,982		$	19,676		$	27,473
Income Tax Expense											(6,971	)		(6,971	)
Net Income													$	20,502
Losses and LAE Ratio		63.0	%		53.7	%		62.1	%					60.3	%
Commission Expense Ratio		12.2	%		23.1	%		20.1	%					16.4	%
Other Operating Expense Ratio (2)		19.8	%		27.5	%		11.1	%					20.6	%
Combined Ratio		95.0	%		104.3	%		93.3	%					97.3	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

	Six Months Ended June 30, 2018
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	352,659		$	185,281		$	115,702		$	—		$	653,642
Net Losses and LAE		(222,307	)		(98,147	)		(62,024	)		—			(382,478	)
Commission Expenses		(41,243	)		(39,619	)		(26,916	)		433			(107,345	)
Other Operating Expenses		(75,438	)		(43,829	)		(11,841	)		—			(131,108	)
Other Underwriting Income (Expense)		169			—			274			(433	)		10
Underwriting Profit	$	13,840		$	3,686		$	15,195		$	—		$	32,721
Net Investment Income											48,303			48,303
Total Net Realized and Unrealized Gains											1,104			1,104
Interest Expense											(7,728	)		(7,728	)
Other Income											2,501			2,501
Income Before Income Taxes	$	13,840		$	3,686		$	15,195		$	44,179		$	76,901
Income Tax Expense											(13,919	)		(13,919	)
Net Income													$	62,982
Losses and LAE Ratio		63.0	%		53.0	%		53.6	%					58.5	%
Commission Expense Ratio		11.7	%		21.4	%		23.3	%					16.4	%
Other Operating Expense Ratio (2)		21.4	%		23.6	%		10.0	%					20.1	%
Combined Ratio		96.1	%		98.0	%		86.9	%					95.0	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

	Six Months Ended June 30, 2017
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net Earned Premiums	$	331,091		$	166,186		$	82,689		$	—		$	579,966
Net Losses and LAE		(204,096	)		(94,800	)		(47,814	)		—			(346,710	)
Commission Expenses		(40,844	)		(38,234	)		(17,462	)		523			(96,017	)
Other Operating Expenses		(66,612	)		(42,299	)		(10,393	)		—			(119,304	)
Other Underwriting Income (Expense)		210			—			345			(523	)		32
Underwriting Profit (Loss)	$	19,749		$	(9,147	)	$	7,365		$	—		$	17,967
Net Investment Income											43,713			43,713
Total Net Realized and Unrealized Gains											1,650			1,650
Interest Expense											(7,722	)		(7,722	)
Other Income											625			625
Income (Loss) Before Income Taxes	$	19,749		$	(9,147	)	$	7,365		$	38,266		$	56,233
Income Tax Expense											(14,621	)		(14,621	)
Net Income													$	41,612
Losses and LAE Ratio		61.6	%		57.0	%		57.8	%					59.8	%
Commission Expense Ratio		12.3	%		23.0	%		21.1	%					16.6	%
Other Operating Expense Ratio (2)		20.1	%		25.5	%		12.2	%					20.5	%
Combined Ratio		94.0	%		105.5	%		91.1	%					96.9	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

Revenue by Operating Segment

Revenue by operating segment for the three and six months ended June 30, 2018 and 2017 was as follows:

	Three Months Ended June 30, 2018									Three Months Ended June 30, 2017									% Change
amounts in thousands	Gross Written Premiums		Ceded Written Premiums			NetWritten Premiums		Net Earned Premiums		Gross Written Premiums		Ceded Written Premiums			Net Written Premiums		Net Earned Premiums		Gross Written Premiums			Ceded Written Premiums			NetWritten Premiums			Net Earned Premiums
U.S. Insurance
Marine	$	38,830	$	(16,918	)	$	21,912	$	21,177	$	41,687	$	(19,451	)	$	22,236	$	21,812		(6.9	%)		(13.0	%)		(1.5	%)		(2.9	%)
P&C		217,984		(54,835	)		163,149		132,630		187,492		(51,147	)		136,345		121,226		16.3	%		7.2	%		19.7	%		9.4	%
ProfessionalLiability		31,664		(4,391	)		27,273		25,939		28,007		(3,259	)		24,748		24,049		13.1	%		34.7	%		10.2	%		7.9	%
Total	$	288,478	$	(76,144	)	$	212,334	$	179,746	$	257,186	$	(73,857	)	$	183,329	$	167,087		12.2	%		3.1	%		15.8	%		7.6	%
Int'l Insurance
Marine	$	40,714	$	(11,523	)	$	29,191	$	37,197	$	49,597	$	(12,536	)	$	37,061	$	39,525		(17.9	%)		(8.1	%)		(21.2	%)		(5.9	%)
P&C		46,579		(17,705	)		28,874		23,715		46,663		(20,362	)		26,301		23,337		(0.2	%)		(13.1	%)		9.8	%		1.6	%
Professional Liability		45,230		(10,654	)		34,576		31,159		34,933		(10,911	)		24,022		19,238		29.5	%		(2.4	%)		43.9	%		62.0	%
Total	$	132,523	$	(39,882	)	$	92,641	$	92,071	$	131,193	$	(43,809	)	$	87,384	$	82,100		1.0	%		(9.0	%)		6.0	%		12.1	%
GlobalRe	$	76,235	$	(1,918	)	$	74,317	$	59,198	$	63,800	$	(1,231	)	$	62,569	$	44,648		19.5	%		55.8	%		18.8	%		32.6	%
Total	$	497,236	$	(117,944	)	$	379,292	$	331,015	$	452,179	$	(118,897	)	$	333,282	$	293,835		10.0	%		(0.8	%)		13.8	%		12.7	%

	Six Months Ended June 30, 2018									Six Months Ended June 30, 2017									% Change
amounts in thousands	Gross Written Premiums		Ceded Written Premiums			NetWritten Premiums		Net Earned Premiums		Gross Written Premiums		Ceded Written Premiums			NetWritten Premiums		Net Earned Premiums		Gross Written Premiums			Ceded Written Premiums			NetWritten Premiums			Net Earned Premiums
U.S. Insurance
Marine	$	80,554	$	(34,398	)	$	46,156	$	42,269	$	82,637	$	(36,971	)	$	45,666	$	44,506		(2.5	%)		(7.0	%)		1.1	%		(5.0	%)
P&C		386,177		(99,747	)		286,430		260,220		358,126		(89,345	)		268,781		240,349		7.8	%		11.6	%		6.6	%		8.3	%
ProfessionalLiability		61,675		(8,580	)		53,095		50,170		54,028		(9,028	)		45,000		46,236		14.2	%		(5.0	%)		18.0	%		8.5	%
Total	$	528,406	$	(142,725	)	$	385,681	$	352,659	$	494,791	$	(135,344	)	$	359,447	$	331,091		6.8	%		5.5	%		7.3	%		6.5	%
Int'l Insurance
Marine	$	97,192	$	(19,577	)	$	77,615	$	76,476	$	118,430	$	(23,462	)	$	94,968	$	77,020		(17.9	%)		(16.6	%)		(18.3	%)		(0.7	%)
P&C		80,539		(31,372	)		49,167		45,484		87,031		(50,008	)		37,023		45,517		(7.5	%)		(37.3	%)		32.8	%		(0.1	%)
ProfessionalLiability		82,664		(17,821	)		64,843		63,321		67,592		(16,932	)		50,660		43,649		22.3	%		5.3	%		28.0	%		45.1	%
Total	$	260,395	$	(68,770	)	$	191,625	$	185,281	$	273,053	$	(90,402	)	$	182,651	$	166,186		(4.6	%)		(23.9	%)		4.9	%		11.5	%
GlobalRe	$	203,659	$	(8,411	)	$	195,248	$	115,702	$	134,640	$	(6,293	)	$	128,347	$	82,689		51.3	%		33.7	%		52.1	%		39.9	%
Total	$	992,460	$	(219,906	)	$	772,554	$	653,642	$	902,484	$	(232,039	)	$	670,445	$	579,966		10.0	%		(5.2	%)		15.2	%		12.7	%

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Investments (Tables)

6 Months Ended

Jun. 30, 2018

Investments Debt And Equity Securities [Abstract]

Available-for-Sale Investments Including Other-Than-Temporarily Impaired Securities Recognized within Accumulated Other Comprehensive Income

The following tables set forth our Company’s Available-For-Sale Investments as of June 30, 2018 and December 31, 2017 and include Other-Than-Temporary-Impairment (“OTTI”) securities recognized within Accumulated Other Comprehensive Income (“AOCI”):

	June 30, 2018
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
amounts in thousands	Value		Gains		(Losses)			Cost
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	289,612	$	955	$	(4,189	)	$	292,846
States, Municipalities and Political Subdivisions		658,129		10,410		(4,870	)		652,589
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		362,870		1,091		(14,497	)		376,276
Residential Mortgage Obligations		96,134		464		(431	)		96,101
Asset-Backed Securities		476,838		737		(2,749	)		478,850
Commercial Mortgage-Backed Securities		168,609		807		(2,817	)		170,619
Subtotal	$	1,104,451	$	3,099	$	(20,494	)	$	1,121,846
Corporate Exposures (1)		909,349		4,303		(19,302	)		924,348
Total Fixed Maturities	$	2,961,541	$	18,767	$	(48,855	)	$	2,991,629
Short-Term Investments		6,368		—		—			6,368
Total Available-For-Sale Investments	$	2,967,909	$	18,767	$	(48,855	)	$	2,997,997

(1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

	December 31, 2017
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
amounts in thousands	Value		Gains		(Losses)			Cost
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	393,563	$	2,081	$	(2,014	)	$	393,496
States, Municipalities and Political Subdivisions		814,632		20,136		(1,423	)		795,919
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		407,619		2,352		(5,414	)		410,681
Residential Mortgage Obligations		54,104		606		(79	)		53,577
Asset-Backed Securities		328,753		2,138		(663	)		327,278
Commercial Mortgage-Backed Securities		160,904		2,354		(1,182	)		159,732
Subtotal	$	951,380	$	7,450	$	(7,338	)	$	951,268
Corporate Exposures (1)		897,479		14,491		(3,737	)		886,725
Total Fixed Maturities	$	3,057,054	$	44,158	$	(14,512	)	$	3,027,408
Equity Securities:
Common Stocks	$	52,439	$	7,423	$	(112	)	$	45,128
Preferred Stocks		183,542		6,071		(1,560	)		179,031
Total Equity Securities	$	235,981	$	13,494	$	(1,672	)	$	224,159
Short-Term Investments		6,480		3		—			6,477
Total Available-For-Sale Investments	$	3,299,515	$	57,655	$	(16,184	)	$	3,258,044

(1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

Equity Securities at Fair Value

The following table sets forth our Company’s Equity Securities at fair value as of June 30, 2018:

	As of June 30, 2018
			Gross		Gross
	Fair		Unrealized		Unrealized			Cost
amounts in thousands	Value		Gains		(Losses)
Equity Securities:
Common Stocks	$	145,077	$	9,749	$	(499	)	$	135,827
Preferred Stocks		182,389		3,854		(3,135	)		181,670
Total Equity Securities	$	327,466	$	13,603	$	(3,634	)	$	317,497

Scheduled Maturity Dates for Fixed Maturity Securities by Number of Years Until Maturity

The contractual maturity dates for Fixed Maturities categorized by the number of years until maturity as of June 30, 2018 are shown in the following table:

	June 30, 2018
	Fair		Amortized
amounts in thousands	Value		Cost
Due in one year or less	$	219,948	$	221,066
Due after one year through five years		722,278		732,073
Due after five years through ten years		336,352		338,140
Due after ten years		578,512		578,504
Mortgage-Backed and Asset-Backed Securities		1,104,451		1,121,846
Total	$	2,961,541	$	2,991,629

Summary of Aggregate Fair Value and Gross Unrealized Loss by Length of Time Securities had Continuously been in Gross Unrealized Loss Position

The following tables summarize all Available-For-Sale securities in a gross unrealized loss position as of June 30, 2018 and December 31, 2017, showing the aggregate fair value and gross unrealized loss by the length of time those securities have continuously been in a gross unrealized loss position:

	June 30, 2018
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
amounts in thousands	Value		(Losses)			Value		(Losses)			Value		(Losses)
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	220,029	$	(3,420	)	$	39,864	$	(769	)	$	259,893	$	(4,189	)
States, Municipalities and Political Subdivisions		213,600		(3,184	)		42,654		(1,686	)		256,254		(4,870	)
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		115,138		(3,504	)		214,279		(10,993	)		329,417		(14,497	)
Residential Mortgage Obligations		78,032		(421	)		387		(10	)		78,419		(431	)
Asset-Backed Securities		273,120		(2,413	)		23,583		(336	)		296,703		(2,749	)
Commercial Mortgage-Backed Securities		59,304		(954	)		22,124		(1,863	)		81,428		(2,817	)
Subtotal	$	525,594	$	(7,292	)	$	260,373	$	(13,202	)	$	785,967	$	(20,494	)
Corporate Exposures (1)		643,226		(15,432	)		101,454		(3,870	)		744,680		(19,302	)
Total Fixed Maturities	$	1,602,449	$	(29,328	)	$	444,345	$	(19,527	)	$	2,046,794	$	(48,855	)

(1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

	December 31, 2017
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
amounts in thousands	Value		(Losses)			Value		(Losses)			Value		(Losses)
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	273,672	$	(1,502	)	$	54,484	$	(512	)	$	328,156	$	(2,014	)
States, Municipalities and Political Subdivisions		74,097		(503	)		45,085		(920	)		119,182		(1,423	)
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		87,496		(346	)		236,745		(5,068	)		324,241		(5,414	)
Residential Mortgage Obligations		12,418		(62	)		546		(17	)		12,964		(79	)
Asset-Backed Securities		85,877		(468	)		24,733		(195	)		110,610		(663	)
Commercial Mortgage-Backed Securities		20,482		(95	)		22,903		(1,087	)		43,385		(1,182	)
Subtotal	$	206,273	$	(971	)	$	284,927	$	(6,367	)	$	491,200	$	(7,338	)
Corporate Exposures (1)		295,433		(1,690	)		121,410		(2,047	)		416,843		(3,737	)
Total Fixed Maturities	$	849,475	$	(4,666	)	$	505,906	$	(9,846	)	$	1,355,381	$	(14,512	)
Equity Securities:
Common Stocks	$	11,245	$	(81	)	$	1,770	$	(31	)	$	13,015	$	(112	)
Preferred Stocks		50,861		(1,524	)		662		(36	)		51,523		(1,560	)
Total Equity Securities	$	62,106	$	(1,605	)	$	2,432	$	(67	)	$	64,538	$	(1,672	)
Total Fixed Maturities and Equity Securities	$	911,581	$	(6,271	)	$	508,338	$	(9,913	)	$	1,419,919	$	(16,184	)

(1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

Net Investment Income

Our Company’s Net Investment Income was derived from the following sources:

	Three Months Ended June 30,						Six Months Ended June 30,
amounts in thousands	2018			2017			2018			2017
Fixed Maturities	$	21,719		$	19,186		$	42,771		$	37,527
Equity Securities		3,161			3,780			6,086			7,564
Short-Term Investments, Cash & Cash Equivalents		415			87			642			170
Other Invested Assets		141			113			327			242
Total Investment Income	$	25,436		$	23,166		$	49,826		$	45,503
Investment Expenses		(835	)		(901	)		(1,523	)		(1,790	)
Net Investment Income	$	24,601		$	22,265		$	48,303		$	43,713

Realized Gains and Losses on Investments Sold, Excluding Net Other-Than-Temporary Impairment Losses Recognized in Earnings

Realized Gains and Losses on Investments Sold, excluding net OTTI losses recognized in earnings, for the periods indicated, were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
amounts in thousands	2018			2017			2018			2017
Fixed Maturities:
Gains	$	1,541		$	344		$	3,347		$	812
Losses		(481	)		(958	)		(756	)		(2,214	)
Fixed Maturities, Net	$	1,060		$	(614	)	$	2,591		$	(1,402	)
Short-Term Investments, Cash & Cash Equivalents:
Gains	$	63		$	119		$	81		$	226
Losses		(21	)		(45	)		(195	)		(125	)
Short-Term, Net	$	42		$	74		$	(114	)	$	101
Other Invested Assets:
Gains	$	20		$	16		$	70		$	21
Losses		(45	)		(24	)		(86	)		(135	)
Other Invested Assets, Net	$	(25	)	$	(8	)	$	(16	)	$	(114	)
Equity Securities:
Gains	$	754		$	2,470		$	754		$	4,386
Losses		(44	)		(228	)		(259	)		(228	)
Equity Securities, Net	$	710		$	2,242		$	495		$	4,158
Net Realized Gains on Investments Sold	$	1,787		$	1,694		$	2,956		$	2,743

Portion of Net Unrealized Losses Recognized to Equity Securities

The following table presents the portion of Net Unrealized Gains (Losses) recognized during the three and six months ended June 30, 2018, that relates to Equity Securities held as of June 30, 2018:

	Three Months Ended June 30,		Six Months Ended June 30,
amounts in thousands	2018		2018
Equity Securities:
Total Net Realized and Unrealized Gains (Losses) recognized   during the period	$	2,039	$	(1,357	)
Less: Net Realized Gains on Investments Sold recognized during   the period		710		495
Net Unrealized Gains (Losses) recognized during the period	$	1,329	$	(1,852	)

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Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fixed Maturities and Equity Securities by Asset Class that are Measured at Fair Value

The following tables present, for each of the fair value hierarchy levels as defined by the accounting guidance for fair value measurements described above, our Company’s Fixed Maturities and Equity Securities by asset class that are measured at fair value on a recurring basis, as well as the fair value of the 5.75% Senior Notes due October 15, 2023 (the “Senior Notes”) carried at amortized cost as of June 30, 2018 and December 31, 2017:

	June 30, 2018
amounts in thousands	Level 1		Level 2		Level 3		Total
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	80,379	$	209,233	$	—	$	289,612
States, Municipalities and Political Subdivisions		—		658,129		—		658,129
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		—		362,870		—		362,870
Residential Mortgage Obligations		—		96,134		—		96,134
Asset-Backed Securities		—		476,838		—		476,838
Commercial Mortgage-Backed Securities		—		168,609		—		168,609
Subtotal	$	—	$	1,104,451	$	—	$	1,104,451
Corporate Exposures		—		909,349		—		909,349
Total Fixed Maturities	$	80,379	$	2,881,162	$	—	$	2,961,541
Equity Securities:
Common Stocks	$	38,441	$	106,636	$	—	$	145,077
Preferred Stocks		—		182,389		—		182,389
Total Equity Securities	$	38,441	$	289,025	$	—	$	327,466
Short-Term Investments		—		6,368		—		6,368
Total Assets Measured at Fair Value	$	118,820	$	3,176,555	$	—	$	3,295,375
Senior Notes	$	—	$	273,865	$	—	$	273,865
Total Liabilities Measured at Fair Value	$	—	$	273,865	$	—	$	273,865

	December 31, 2017
amounts in thousands	Level 1		Level 2		Level 3		Total
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign    Government Bonds	$	178,251	$	215,312	$	—	$	393,563
States, Municipalities and Political Subdivisions		—		814,632		—		814,632
Mortgage-Backed and Asset-Backed Securities:
Agency Residential Mortgage-Backed Securities		—		407,619		—		407,619
Residential Mortgage Obligations		—		54,104		—		54,104
Asset-Backed Securities		—		328,753		—		328,753
Commercial Mortgage-Backed Securities		—		160,904		—		160,904
Subtotal	$	—	$	951,380	$	—	$	951,380
Corporate Exposures		—		897,479		—		897,479
Total Fixed Maturities	$	178,251	$	2,878,803	$	—	$	3,057,054
Equity Securities:
Common Stocks	$	52,439	$	—	$	—	$	52,439
Preferred Stocks		—		183,542		—		183,542
Total Equity Securities	$	52,439	$	183,542	$	—	$	235,981
Short-Term Investments		6,480		—		—		6,480
Total Assets Measured at Fair Value	$	237,170	$	3,062,345	$	—	$	3,299,515
Senior Notes	$	—	$	277,951	$	—	$	277,951
Total Liabilities Measured at Fair Value	$	—	$	277,951	$	—	$	277,951

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Analysis of Goodwill by Reporting Segment

The following table shows an analysis of goodwill by reporting segment:

	Six Months Ended June 30,
	U.S.		Int'l
amounts in thousands	Insurance		Insurance			Total
Goodwill at Beginning of the Period	$	1,978	$	2,482		$	4,460
Goodwill Acquired		—		11,312			11,312
Foreign Currency Translation Adjustment		—		(27	)		(27	)
Goodwill at End of the Period	$	1,978	$	13,767		$	15,745

Summary of Gross Carrying Value and Weighted Average Amortization Period of Intangible Assets by Type

The gross carrying value and weighted average amortization period of intangible assets by type at June 30, 2018 was as follows:

	As of June 30, 2018
	Gross		Weighted Average
amounts in thousands	Carrying Amount		Amortization Period
Finite-Lived Assets
ASCO Customer Relationships	$	4,739	15 years
ASCO VOBA		1,694	4 years
BDM Broker Networks		1,002	15 years
BDM Trade Name		493	1 year
Total	$	7,928
Indefinite-Lived Assets
ASCO European Licenses	$	2,463	indefinite
NUAL Lloyd's Syndicate Capacity		2,136	indefinite
Total	$	4,599

Summary of Estimated Remaining Amortization Expense for Finite-Lived Intangible Assets

The estimated remaining amortization expense for the finite-lived intangible assets is as follows:

amounts in thousands	Total
2018	$	649
2019		1,053
2020		806
2021		806
2022		594
2023 and thereafter		4,020
Total	$	7,928

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Loss Reserves (Tables)

6 Months Ended

Jun. 30, 2018

Insurance [Abstract]

Summary of Reserves for Losses and LAE Activity

The following table summarizes our Company’s Reserves for Losses and LAE activity for the six months ended June 30, 2018 and 2017:

	For the Six Months Ended June 30,
amounts in thousands	2018			2017
Net Reserves for Losses and LAE at Beginning of Year	$	1,705,380		$	1,510,451
Acquired Net Reserves		16,159			—
Provision for Losses and LAE for Claims Occurring in the Current Year		379,158			331,595
Increase (Decrease) in Estimated Losses and LAE for Claims Occurring in Prior Years		3,320			15,115
Incurred Losses and LAE	$	382,478		$	346,710
Losses and LAE Paid for Claims Occurring During:
Current Year		(32,832	)		(47,235	)
Prior Years		(292,843	)		(249,895	)
Losses and LAE Payments	$	(325,675	)	$	(297,130	)
Foreign Currency Adjustment		(3,310	)		3,432
Net Reserves for Losses and LAE at End of Period		1,775,032			1,563,463
Reinsurance Recoverables on Unpaid Losses and LAE		799,084			782,864
Gross Reserves for Losses and LAE at End of Period	$	2,574,116		$	2,346,327

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Restricted Stock Unit Awards

The activity related to our Company's restricted stock unit awards was as follows:

	Six Months Ended June 30, 2018
	Number of Awards			Weighted Average Grant Date Fair Value (1)
Nonvested at the beginning of the period		159,539		$	41.60
Granted		21,593		$	49.03
Vested (2)		(65,236	)	$	34.16
Forfeited		(7,000	)	$	38.00
Nonvested at the end of the period		108,896		$	47.76

(1) Fair value is based on the closing price of our common shares on the NASDAQ on the grant date.

(2) This amount represents the gross number of shares vested before any share forfeiture to pay required tax withholdings. For the six months ended June 30, 2018 share awards of 25,814 were withheld for tax payments at a weighted average vest date fair value of $55.21.

Performance-based Equity Awards

The activity related to our Company's performance-based equity awards was as follows:

	Six Months Ended June 30, 2018
	Number of Awards			Weighted Average Grant Date Fair Value (1)
Nonvested at the beginning of the period		966,361		$	43.39
Granted		247,554		$	54.15
Performance Adjustment		(59,833	)	$	37.25
Vested (2)		(274,299	)	$	37.25
Forfeited		(16,250	)	$	43.27
Nonvested at the end of the period		863,533		$	48.85

(1) Fair value is based on the closing price of our common shares on the NASDAQ on the grant date.

(2) This amount represents the gross number of shares vested before any share forfeiture to pay required tax withholdings. For the six months ended June 30, 2018 share awards of 117,005 were withheld for tax payments at a weighted average vest date fair value of $55.65.

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Organization and Summary of Significant Accounting Policies - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018 USD ($) Insurance	Jun. 30, 2017 USD ($)	Jun. 07, 2018	Jan. 01, 2018 USD ($)	Dec. 31, 2017 USD ($)
Organization And Summary Of Significant Accounting Policies [Line Items]
Number of insurance companies | Insurance	2
Corporate income tax rate	21.00%
Increase net cash used in investing activities	$ 8,191,000	$ 77,921,000
Accounting Standards Update 2016-01
Organization And Summary Of Significant Accounting Policies [Line Items]
Cumulative-effect adjustment from adoption				$ 0
Accounting Standards Update 2016-01 | Retained Earnings
Organization And Summary Of Significant Accounting Policies [Line Items]
Cumulative-effect adjustment from adoption				7,700,000
Accounting Standards Update 2016-01 | Accumulated Other Comprehensive Income (Loss)
Organization And Summary Of Significant Accounting Policies [Line Items]
Cumulative-effect adjustment from adoption				(7,700,000)
Accounting Standards Update 2016-18
Organization And Summary Of Significant Accounting Policies [Line Items]
Increase net cash used in investing activities		18,100,000
Reclassification of restricted and unrestricted cash and cash equivalent					$ 71,300,000
Accounting Standards Update 2018-02 | Retained Earnings
Organization And Summary Of Significant Accounting Policies [Line Items]
Cumulative-effect adjustment from adoption				(2,800,000)
Accounting Standards Update 2018-02 | Accumulated Other Comprehensive Income (Loss)
Organization And Summary Of Significant Accounting Policies [Line Items]
Cumulative-effect adjustment from adoption				$ 2,800,000
Immaterial Reclassification Correction
Organization And Summary Of Significant Accounting Policies [Line Items]
Cash reclassified from short- term investment to cash and cash equivalent					20,500,000
Oversee deposit reclassified from short-term investments to other invested asset					$ 28,800,000
Increase net cash used in investing activities		$ 4,800,000
Bracht, Deckers & Mackelbert NV and Assurances Continentales - Continentale Verzekeringen NV
Organization And Summary Of Significant Accounting Policies [Line Items]
Business acquisition, percentage of ownership interest acquired			100.00%
Syndicate 1221
Organization And Summary Of Significant Accounting Policies [Line Items]
Percentage control of stamp capacity	100.00%

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Business Combinations - Additional Information (Detail) € in Millions				6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 07, 2018 USD ($)	Jun. 07, 2018 EUR (€)	Jun. 30, 2018 USD ($)	Jun. 07, 2018 EUR (€)	Dec. 31, 2017 USD ($)
Business Acquisition [Line Items]
Goodwill recognized at date of acquisition	$ 15,745,000			$ 15,745,000		$ 4,460,000
Bracht, Deckers & Mackelbert NV and Assurances Continentales - Continentale Verzekeringen NV
Business Acquisition [Line Items]
Acquisition date		Jun. 07, 2018	Jun. 07, 2018
Business acquisition, name of acquired entity				BDM and ASCO
Business acquisition, percentage of ownership interest acquired		100.00%			100.00%
Business acquisition, purchase price	40,500,000	$ 40,492,000	€ 35.0
Additional reimbursement amount receivable	5,800,000			$ 5,800,000	€ 5.0
Business combination, fair value of acquisition reimbursement amount	0	0		0
Goodwill recognized at date of acquisition	$ 11,312,000	11,300,000		$ 11,312,000
Business combination, identified finite lived intangible assets		$ 7,900,000
Business combination, finite lived intangible assets weighted average amortization period		12 years	12 years
Business combination, indefinite intangible assets		$ 2,500,000

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Business Combinations - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) $ in Thousands, € in Millions	Jun. 30, 2018 USD ($)	Jun. 07, 2018 USD ($)	Jun. 07, 2018 EUR (€)	Dec. 31, 2017 USD ($)
Liabilities
Goodwill	$ 15,745			$ 4,460
Bracht, Deckers & Mackelbert NV and Assurances Continentales - Continentale Verzekeringen NV
Business Acquisition [Line Items]
Consideration paid	40,500	$ 40,492	€ 35.0
Assets
Investments	45,182
Cash and Cash Equivalents	18,109
Prepaid Reinsurance Premiums	2,701
Reinsurance Recoverables on Paid Losses	1,311
Reinsurance Recoverables on Unpaid Losses and LAE	15,769
Other Assets	19,943
Fair Value of Identifiable Intangible Assets	10,391
Total Assets Acquired	113,406
Liabilities
Reserves for Losses and LAE	31,928
Unearned Premiums	11,139
Deferred Income Tax	8,947
Accounts Payable and Other Liabilities	32,212
Total Liabilities Assumed	84,226
Goodwill	$ 11,312	$ 11,300

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Segment Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018 Segment
Segment Reporting Information [Line Items]
Number of underwriting Segments	3
U.S.Insurance
Segment Reporting Information [Line Items]
Number of Operating Segments	3
International Insurance
Segment Reporting Information [Line Items]
Number of Operating Segments	3

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Financial Data by Segment (Detail) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting Information [Line Items]
Net Earned Premiums		$ 331,015	$ 293,835	$ 653,642	$ 579,966
Net Losses and LAE		(196,333)	(177,110)	(382,478)	(346,710)
Commission Expenses		(53,193)	(48,173)	(107,345)	(96,017)
Other Operating Expenses		(68,182)	(60,766)	(131,108)	(119,304)
Other Underwriting Income (Expense)		7	11	10	32
Underwriting Profit (Loss)		13,314	7,797	32,721	17,967
Net Investment Income		24,601	22,265	48,303	43,713
Total Net Realized and Unrealized Gains		3,116	1,694	1,104	1,650
Interest Expense		(3,864)	(3,861)	(7,728)	(7,722)
Other Income (Loss)		2,621	(422)	2,501	625
Income (Loss) Before Income Taxes		39,788	27,473	76,901	56,233
Income Tax Expense		(7,684)	(6,971)	(13,919)	(14,621)
Net Income (Loss)		$ 32,104	$ 20,502	$ 62,982	$ 41,612
Losses and LAE Ratio		59.30%	60.30%	58.50%	59.80%
Commission Expense Ratio		16.10%	16.40%	16.40%	16.60%
Other Operating Expense Ratio	[1]	20.60%	20.60%	20.10%	20.50%
Combined Ratio		96.00%	97.30%	95.00%	96.90%
U.S.Insurance
Segment Reporting Information [Line Items]
Net Earned Premiums		$ 179,746	$ 167,087	$ 352,659	$ 331,091
Net Losses and LAE		(111,885)	(105,270)	(222,307)	(204,096)
Commission Expenses		(20,382)	(20,460)	(41,243)	(40,844)
Other Operating Expenses		(38,447)	(33,140)	(75,438)	(66,612)
Other Underwriting Income (Expense)		71	100	169	210
Underwriting Profit (Loss)		9,103	8,317	13,840	19,749
Income (Loss) Before Income Taxes		$ 9,103	$ 8,317	$ 13,840	$ 19,749
Losses and LAE Ratio		62.20%	63.00%	63.00%	61.60%
Commission Expense Ratio		11.30%	12.20%	11.70%	12.30%
Other Operating Expense Ratio	[1]	21.40%	19.80%	21.40%	20.10%
Combined Ratio		94.90%	95.00%	96.10%	94.00%
International Insurance
Segment Reporting Information [Line Items]
Net Earned Premiums		$ 92,071	$ 82,100	$ 185,281	$ 166,186
Net Losses and LAE		(52,304)	(44,095)	(98,147)	(94,800)
Commission Expenses		(19,863)	(19,001)	(39,619)	(38,234)
Other Operating Expenses		(23,299)	(22,506)	(43,829)	(42,299)
Underwriting Profit (Loss)		(3,395)	(3,502)	3,686	(9,147)
Income (Loss) Before Income Taxes		$ (3,395)	$ (3,502)	$ 3,686	$ (9,147)
Losses and LAE Ratio		56.80%	53.70%	53.00%	57.00%
Commission Expense Ratio		21.60%	23.10%	21.40%	23.00%
Other Operating Expense Ratio	[1]	25.30%	27.50%	23.60%	25.50%
Combined Ratio		103.70%	104.30%	98.00%	105.50%
Global Reinsurance
Segment Reporting Information [Line Items]
Net Earned Premiums		$ 59,198	$ 44,648	$ 115,702	$ 82,689
Net Losses and LAE		(32,144)	(27,745)	(62,024)	(47,814)
Commission Expenses		(13,148)	(8,970)	(26,916)	(17,462)
Other Operating Expenses		(6,436)	(5,120)	(11,841)	(10,393)
Other Underwriting Income (Expense)		136	169	274	345
Underwriting Profit (Loss)		7,606	2,982	15,195	7,365
Income (Loss) Before Income Taxes		$ 7,606	$ 2,982	$ 15,195	$ 7,365
Losses and LAE Ratio		54.30%	62.10%	53.60%	57.80%
Commission Expense Ratio		22.20%	20.10%	23.30%	21.10%
Other Operating Expense Ratio	[1]	10.70%	11.10%	10.00%	12.20%
Combined Ratio		87.20%	93.30%	86.90%	91.10%
Corporate
Segment Reporting Information [Line Items]
Net Investment Income	[2]	$ 24,601	$ 22,265	$ 48,303	$ 43,713
Total Net Realized and Unrealized Gains	[2]	3,116	1,694	1,104	1,650
Interest Expense	[2]	(3,864)	(3,861)	(7,728)	(7,722)
Other Income (Loss)	[2]	2,621	(422)	2,501	625
Income (Loss) Before Income Taxes	[2]	26,474	19,676	44,179	38,266
Income Tax Expense	[2]	(7,684)	(6,971)	(13,919)	(14,621)
Intersegment Elimination
Segment Reporting Information [Line Items]
Commission Expenses	[2]	200	258	433	523
Other Underwriting Income (Expense)	[2]	$ (200)	$ (258)	$ (433)	$ (523)

[1] Includes Other Operating Expenses and Other Underwriting Income (Expense).

[2] Includes Corporate segment intercompany eliminations.

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Revenue by Operating Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting Information [Line Items]
Gross Written Premiums	$ 497,236	$ 452,179	$ 992,460	$ 902,484
Ceded Written Premiums	(117,944)	(118,897)	(219,906)	(232,039)
Net Written Premiums	379,292	333,282	772,554	670,445
Net Earned Premiums	$ 331,015	293,835	$ 653,642	579,966
% Change Gross Written Premiums	10.00%		10.00%
% Change Ceded Written Premiums	(0.80%)		(5.20%)
% Change Net Written Premiums	13.80%		15.20%
% Change Net Earned Premiums	12.70%		12.70%
U.S.Insurance
Segment Reporting Information [Line Items]
Gross Written Premiums	$ 288,478	257,186	$ 528,406	494,791
Ceded Written Premiums	(76,144)	(73,857)	(142,725)	(135,344)
Net Written Premiums	212,334	183,329	385,681	359,447
Net Earned Premiums	$ 179,746	167,087	$ 352,659	331,091
% Change Gross Written Premiums	12.20%		6.80%
% Change Ceded Written Premiums	3.10%		5.50%
% Change Net Written Premiums	15.80%		7.30%
% Change Net Earned Premiums	7.60%		6.50%
U.S.Insurance | Marine
Segment Reporting Information [Line Items]
Gross Written Premiums	$ 38,830	41,687	$ 80,554	82,637
Ceded Written Premiums	(16,918)	(19,451)	(34,398)	(36,971)
Net Written Premiums	21,912	22,236	46,156	45,666
Net Earned Premiums	$ 21,177	21,812	$ 42,269	44,506
% Change Gross Written Premiums	(6.90%)		(2.50%)
% Change Ceded Written Premiums	(13.00%)		(7.00%)
% Change Net Written Premiums	(1.50%)		1.10%
% Change Net Earned Premiums	(2.90%)		(5.00%)
U.S.Insurance | Property Casualty
Segment Reporting Information [Line Items]
Gross Written Premiums	$ 217,984	187,492	$ 386,177	358,126
Ceded Written Premiums	(54,835)	(51,147)	(99,747)	(89,345)
Net Written Premiums	163,149	136,345	286,430	268,781
Net Earned Premiums	$ 132,630	121,226	$ 260,220	240,349
% Change Gross Written Premiums	16.30%		7.80%
% Change Ceded Written Premiums	7.20%		11.60%
% Change Net Written Premiums	19.70%		6.60%
% Change Net Earned Premiums	9.40%		8.30%
U.S.Insurance | Professional Liability
Segment Reporting Information [Line Items]
Gross Written Premiums	$ 31,664	28,007	$ 61,675	54,028
Ceded Written Premiums	(4,391)	(3,259)	(8,580)	(9,028)
Net Written Premiums	27,273	24,748	53,095	45,000
Net Earned Premiums	$ 25,939	24,049	$ 50,170	46,236
% Change Gross Written Premiums	13.10%		14.20%
% Change Ceded Written Premiums	34.70%		(5.00%)
% Change Net Written Premiums	10.20%		18.00%
% Change Net Earned Premiums	7.90%		8.50%
International Insurance
Segment Reporting Information [Line Items]
Gross Written Premiums	$ 132,523	131,193	$ 260,395	273,053
Ceded Written Premiums	(39,882)	(43,809)	(68,770)	(90,402)
Net Written Premiums	92,641	87,384	191,625	182,651
Net Earned Premiums	$ 92,071	82,100	$ 185,281	166,186
% Change Gross Written Premiums	1.00%		(4.60%)
% Change Ceded Written Premiums	(9.00%)		(23.90%)
% Change Net Written Premiums	6.00%		4.90%
% Change Net Earned Premiums	12.10%		11.50%
International Insurance | Marine
Segment Reporting Information [Line Items]
Gross Written Premiums	$ 40,714	49,597	$ 97,192	118,430
Ceded Written Premiums	(11,523)	(12,536)	(19,577)	(23,462)
Net Written Premiums	29,191	37,061	77,615	94,968
Net Earned Premiums	$ 37,197	39,525	$ 76,476	77,020
% Change Gross Written Premiums	(17.90%)		(17.90%)
% Change Ceded Written Premiums	(8.10%)		(16.60%)
% Change Net Written Premiums	(21.20%)		(18.30%)
% Change Net Earned Premiums	(5.90%)		(0.70%)
International Insurance | Property Casualty
Segment Reporting Information [Line Items]
Gross Written Premiums	$ 46,579	46,663	$ 80,539	87,031
Ceded Written Premiums	(17,705)	(20,362)	(31,372)	(50,008)
Net Written Premiums	28,874	26,301	49,167	37,023
Net Earned Premiums	$ 23,715	23,337	$ 45,484	45,517
% Change Gross Written Premiums	(0.20%)		(7.50%)
% Change Ceded Written Premiums	(13.10%)		(37.30%)
% Change Net Written Premiums	9.80%		32.80%
% Change Net Earned Premiums	1.60%		(0.10%)
International Insurance | Professional Liability
Segment Reporting Information [Line Items]
Gross Written Premiums	$ 45,230	34,933	$ 82,664	67,592
Ceded Written Premiums	(10,654)	(10,911)	(17,821)	(16,932)
Net Written Premiums	34,576	24,022	64,843	50,660
Net Earned Premiums	$ 31,159	19,238	$ 63,321	43,649
% Change Gross Written Premiums	29.50%		22.30%
% Change Ceded Written Premiums	(2.40%)		5.30%
% Change Net Written Premiums	43.90%		28.00%
% Change Net Earned Premiums	62.00%		45.10%
Global Reinsurance
Segment Reporting Information [Line Items]
Gross Written Premiums	$ 76,235	63,800	$ 203,659	134,640
Ceded Written Premiums	(1,918)	(1,231)	(8,411)	(6,293)
Net Written Premiums	74,317	62,569	195,248	128,347
Net Earned Premiums	$ 59,198	$ 44,648	$ 115,702	$ 82,689
% Change Gross Written Premiums	19.50%		51.30%
% Change Ceded Written Premiums	55.80%		33.70%
% Change Net Written Premiums	18.80%		52.10%
% Change Net Earned Premiums	32.60%		39.90%

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Available-for-Sale Investments Including Other-Than-Temporarily Impaired Securities Recognized within Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands		Jun. 30, 2018	Dec. 31, 2017
Gain (Loss) on Investments [Line Items]
Total available for sale investments		$ 2,967,909
Gross Unrealized Gains		18,767
Gross Unrealized Losses		(48,855)
Amortized Cost		2,997,997
Total available for sale investments			$ 3,299,515
Gross Unrealized Gains			57,655
Gross Unrealized Losses			(16,184)
Amortized Cost			3,258,044
Fixed Maturities
Gain (Loss) on Investments [Line Items]
Total available for sale investments		2,961,541	3,057,054
Gross Unrealized Gains		18,767	44,158
Gross Unrealized Losses		(48,855)	(14,512)
Amortized Cost		2,991,629	3,027,408
Fixed Maturities | U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds
Gain (Loss) on Investments [Line Items]
Total available for sale investments		289,612	393,563
Gross Unrealized Gains		955	2,081
Gross Unrealized Losses		(4,189)	(2,014)
Amortized Cost		292,846	393,496
Fixed Maturities | States, Municipalities and Political Subdivisions
Gain (Loss) on Investments [Line Items]
Total available for sale investments		658,129	814,632
Gross Unrealized Gains		10,410	20,136
Gross Unrealized Losses		(4,870)	(1,423)
Amortized Cost		652,589	795,919
Fixed Maturities | Agency Residential Mortgage-Backed Securities
Gain (Loss) on Investments [Line Items]
Total available for sale investments		362,870	407,619
Gross Unrealized Gains		1,091	2,352
Gross Unrealized Losses		(14,497)	(5,414)
Amortized Cost		376,276	410,681
Fixed Maturities | Residential Mortgage Backed Securities
Gain (Loss) on Investments [Line Items]
Total available for sale investments		96,134	54,104
Gross Unrealized Gains		464	606
Gross Unrealized Losses		(431)	(79)
Amortized Cost		96,101	53,577
Fixed Maturities | Asset-Backed Securities
Gain (Loss) on Investments [Line Items]
Total available for sale investments		476,838	328,753
Gross Unrealized Gains		737	2,138
Gross Unrealized Losses		(2,749)	(663)
Amortized Cost		478,850	327,278
Fixed Maturities | Commercial Mortgage-Backed Securities
Gain (Loss) on Investments [Line Items]
Total available for sale investments		168,609	160,904
Gross Unrealized Gains		807	2,354
Gross Unrealized Losses		(2,817)	(1,182)
Amortized Cost		170,619	159,732
Fixed Maturities | Mortgage-Backed and Asset-Backed Securities
Gain (Loss) on Investments [Line Items]
Total available for sale investments		1,104,451	951,380
Gross Unrealized Gains		3,099	7,450
Gross Unrealized Losses		(20,494)	(7,338)
Amortized Cost		1,121,846	951,268
Fixed Maturities | Corporate Exposures
Gain (Loss) on Investments [Line Items]
Total available for sale investments	[1]	909,349	897,479
Gross Unrealized Gains	[1]	4,303	14,491
Gross Unrealized Losses	[1]	(19,302)	(3,737)
Amortized Cost	[1]	924,348	886,725
Short-Term Investments
Gain (Loss) on Investments [Line Items]
Total available for sale investments		6,368	6,480
Gross Unrealized Gains			3
Amortized Cost		$ 6,368	6,477
Equity Securities
Gain (Loss) on Investments [Line Items]
Total available for sale investments			235,981
Gross Unrealized Gains			13,494
Gross Unrealized Losses			(1,672)
Amortized Cost			224,159
Equity Securities | Common Stocks
Gain (Loss) on Investments [Line Items]
Total available for sale investments			52,439
Gross Unrealized Gains			7,423
Gross Unrealized Losses			(112)
Amortized Cost			45,128
Equity Securities | Preferred Stocks
Gain (Loss) on Investments [Line Items]
Total available for sale investments			183,542
Gross Unrealized Gains			6,071
Gross Unrealized Losses			(1,560)
Amortized Cost			$ 179,031

[1] Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

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Equity Securities at Fair Value (Detail) $ in Thousands	Jun. 30, 2018 USD ($)
Gain (Loss) on Investments [Line Items]
Fair Value	$ 327,466
Gross Unrealized Gains	13,603
Gross Unrealized (Losses)	(3,634)
Cost	317,497
Common Stock
Gain (Loss) on Investments [Line Items]
Fair Value	145,077
Gross Unrealized Gains	9,749
Gross Unrealized (Losses)	(499)
Cost	135,827
Preferred Stocks
Gain (Loss) on Investments [Line Items]
Fair Value	182,389
Gross Unrealized Gains	3,854
Gross Unrealized (Losses)	(3,135)
Cost	$ 181,670

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Investments - Additional Information (Detail)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018 USD ($) Security	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) Security	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($) Security
Schedule of Investments [Line Items]
Other Invested Assets	$ 2,000,000		$ 2,000,000		$ 1,700,000
Non-credit OTTI on fixed maturities in a net unrealized gain position			400,000		$ 500,000
OTTI losses	0	$ 0	0	$ 1,100,000
Change to cumulative amounts of credit loss portion of OTTI losses	$ 0	0	$ 0	0
Fixed Maturities
Schedule of Investments [Line Items]
Number of securities in unrealized loss position | Security	753		753		454
Gross Unrealized Loss	$ 48,855,000		$ 48,855,000		$ 14,512,000
Cumulative amounts related to credit loss portion of OTTI losses	$ 2,400,000	$ 2,400,000	$ 2,400,000	$ 2,400,000
Equity Securities
Schedule of Investments [Line Items]
Number of securities in unrealized loss position | Security					22
Non-government-backed securities | Maximum
Schedule of Investments [Line Items]
Percentage of investment	5.00%		5.00%		5.00%
Gross Unrealized Loss	$ 1,700,000		$ 1,700,000		$ 700,000
Mortgage-Backed and Asset-Backed Securities
Schedule of Investments [Line Items]
Securities, effective maturities			5 years 3 months 18 days
Mortgage-Backed and Asset-Backed Securities | Fixed Maturities
Schedule of Investments [Line Items]
Gross Unrealized Loss	20,494,000		$ 20,494,000		7,338,000
Other Invested Assets
Schedule of Investments [Line Items]
Overseas deposits, fair value	$ 36,600,000		$ 36,600,000		$ 28,800,000

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Scheduled Maturity Dates for Fixed Maturity Securities by Number of Years Until Maturity (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Fair Value
Total	$ 2,967,909
Amortized Cost
Amortized Cost	2,997,997
Fixed Maturities
Fair Value
Due in one year or less	219,948
Due after one year through five years	722,278
Due after five years through ten years	336,352
Due after ten years	578,512
Mortgage-Backed and Asset-Backed Securities	1,104,451
Total	2,961,541	$ 3,057,054
Amortized Cost
Due in one year or less	221,066
Due after one year through five years	732,073
Due after five years through ten years	338,140
Due after ten years	578,504
Mortgage-Backed and Asset-Backed Securities	1,121,846
Amortized Cost	$ 2,991,629	$ 3,027,408

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Summary of Aggregate Fair Value and Gross Unrealized Loss by Length of Time Securities had Continuously been in Gross Unrealized Loss Position as Well as Number of Securities (Detail) - USD ($) $ in Thousands		Jun. 30, 2018	Dec. 31, 2017
Gain (Loss) on Investments [Line Items]
Less than 12 months Fair Value			$ 911,581
Less than 12 months Gross Unrealized Losses			(6,271)
Greater than 12 months Fair Value			508,338
Greater than 12 months Gross Unrealized Losses			(9,913)
Fair Value			1,419,919
Gross Unrealized Losses			(16,184)
Fixed Maturities
Gain (Loss) on Investments [Line Items]
Less than 12 months Fair Value		$ 1,602,449	849,475
Less than 12 months Gross Unrealized Losses		(29,328)	(4,666)
Greater than 12 months Fair Value		444,345	505,906
Greater than 12 months Gross Unrealized Losses		(19,527)	(9,846)
Fair Value		2,046,794	1,355,381
Gross Unrealized Losses		(48,855)	(14,512)
Fixed Maturities | U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds
Gain (Loss) on Investments [Line Items]
Less than 12 months Fair Value		220,029	273,672
Less than 12 months Gross Unrealized Losses		(3,420)	(1,502)
Greater than 12 months Fair Value		39,864	54,484
Greater than 12 months Gross Unrealized Losses		(769)	(512)
Fair Value		259,893	328,156
Gross Unrealized Losses		(4,189)	(2,014)
Fixed Maturities | States, Municipalities and Political Subdivisions
Gain (Loss) on Investments [Line Items]
Less than 12 months Fair Value		213,600	74,097
Less than 12 months Gross Unrealized Losses		(3,184)	(503)
Greater than 12 months Fair Value		42,654	45,085
Greater than 12 months Gross Unrealized Losses		(1,686)	(920)
Fair Value		256,254	119,182
Gross Unrealized Losses		(4,870)	(1,423)
Fixed Maturities | Agency Residential Mortgage-Backed Securities
Gain (Loss) on Investments [Line Items]
Less than 12 months Fair Value		115,138	87,496
Less than 12 months Gross Unrealized Losses		(3,504)	(346)
Greater than 12 months Fair Value		214,279	236,745
Greater than 12 months Gross Unrealized Losses		(10,993)	(5,068)
Fair Value		329,417	324,241
Gross Unrealized Losses		(14,497)	(5,414)
Fixed Maturities | Residential Mortgage Backed Securities
Gain (Loss) on Investments [Line Items]
Less than 12 months Fair Value		78,032	12,418
Less than 12 months Gross Unrealized Losses		(421)	(62)
Greater than 12 months Fair Value		387	546
Greater than 12 months Gross Unrealized Losses		(10)	(17)
Fair Value		78,419	12,964
Gross Unrealized Losses		(431)	(79)
Fixed Maturities | Asset-Backed Securities
Gain (Loss) on Investments [Line Items]
Less than 12 months Fair Value		273,120	85,877
Less than 12 months Gross Unrealized Losses		(2,413)	(468)
Greater than 12 months Fair Value		23,583	24,733
Greater than 12 months Gross Unrealized Losses		(336)	(195)
Fair Value		296,703	110,610
Gross Unrealized Losses		(2,749)	(663)
Fixed Maturities | Commercial Mortgage-Backed Securities
Gain (Loss) on Investments [Line Items]
Less than 12 months Fair Value		59,304	20,482
Less than 12 months Gross Unrealized Losses		(954)	(95)
Greater than 12 months Fair Value		22,124	22,903
Greater than 12 months Gross Unrealized Losses		(1,863)	(1,087)
Fair Value		81,428	43,385
Gross Unrealized Losses		(2,817)	(1,182)
Fixed Maturities | Mortgage-Backed and Asset-Backed Securities
Gain (Loss) on Investments [Line Items]
Less than 12 months Fair Value		525,594	206,273
Less than 12 months Gross Unrealized Losses		(7,292)	(971)
Greater than 12 months Fair Value		260,373	284,927
Greater than 12 months Gross Unrealized Losses		(13,202)	(6,367)
Fair Value		785,967	491,200
Gross Unrealized Losses		(20,494)	(7,338)
Fixed Maturities | Corporate Exposures
Gain (Loss) on Investments [Line Items]
Less than 12 months Fair Value	[1]	643,226	295,433
Less than 12 months Gross Unrealized Losses	[1]	(15,432)	(1,690)
Greater than 12 months Fair Value	[1]	101,454	121,410
Greater than 12 months Gross Unrealized Losses	[1]	(3,870)	(2,047)
Fair Value	[1]	744,680	416,843
Gross Unrealized Losses	[1]	$ (19,302)	(3,737)
Equity Securities
Gain (Loss) on Investments [Line Items]
Less than 12 months Fair Value			62,106
Less than 12 months Gross Unrealized Losses			(1,605)
Greater than 12 months Fair Value			2,432
Greater than 12 months Gross Unrealized Losses			(67)
Fair Value			64,538
Gross Unrealized Losses			(1,672)
Equity Securities | Common Stocks
Gain (Loss) on Investments [Line Items]
Less than 12 months Fair Value			11,245
Less than 12 months Gross Unrealized Losses			(81)
Greater than 12 months Fair Value			1,770
Greater than 12 months Gross Unrealized Losses			(31)
Fair Value			13,015
Gross Unrealized Losses			(112)
Equity Securities | Preferred Stocks
Gain (Loss) on Investments [Line Items]
Less than 12 months Fair Value			50,861
Less than 12 months Gross Unrealized Losses			(1,524)
Greater than 12 months Fair Value			662
Greater than 12 months Gross Unrealized Losses			(36)
Fair Value			51,523
Gross Unrealized Losses			$ (1,560)

[1] Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

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Net Investment Income (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net Investment Income [Line Items]
Investment Income	$ 25,436	$ 23,166	$ 49,826	$ 45,503
Investment Expenses	(835)	(901)	(1,523)	(1,790)
Net Investment Income	24,601	22,265	48,303	43,713
Fixed Maturities
Net Investment Income [Line Items]
Investment Income	21,719	19,186	42,771	37,527
Equity Securities
Net Investment Income [Line Items]
Investment Income	3,161	3,780	6,086	7,564
Short-Term Investments, Cash & Cash Equivalents
Net Investment Income [Line Items]
Investment Income	415	87	642	170
Other Invested Assets
Net Investment Income [Line Items]
Investment Income	$ 141	$ 113	$ 327	$ 242

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Realized Gains and Losses on Investment Sold, Excluding Net Other-Than-Temporary Impairment Losses Recognized in Earnings (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Gain (Loss) on Investments [Line Items]
Net Realized Gains (Losses) on Investments Sold	$ 1,787	$ 1,694	$ 2,956	$ 2,743
Fixed Maturities
Gain (Loss) on Investments [Line Items]
Gains	1,541	344	3,347	812
Losses	(481)	(958)	(756)	(2,214)
Net Realized Gains (Losses) on Investments Sold	1,060	(614)	2,591	(1,402)
Short-Term Investments, Cash & Cash Equivalents
Gain (Loss) on Investments [Line Items]
Gains	63	119	81	226
Losses	(21)	(45)	(195)	(125)
Net Realized Gains (Losses) on Investments Sold	42	74	(114)	101
Other Invested Assets
Gain (Loss) on Investments [Line Items]
Gains	20	16	70	21
Losses	(45)	(24)	(86)	(135)
Net Realized Gains (Losses) on Investments Sold	(25)	(8)	(16)	(114)
Equity Securities
Gain (Loss) on Investments [Line Items]
Gains	754		754
Gains		2,470		4,386
Losses	(44)		(259)
Losses		(228)		(228)
Net Realized Gains (Losses) on Investments Sold	$ 710		$ 495
Net Realized Gains (Losses) on Investments Sold		$ 2,242		$ 4,158

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Portion of Net Unrealized Losses Recognized to Equity Securities (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Gain (Loss) on Investments [Line Items]
Net Unrealized Gains (Losses) recognized during the period	$ 1,329	$ (1,852)
Equity Securities
Gain (Loss) on Investments [Line Items]
Total Net Realized and Unrealized Gains (Losses) recognized during the period	2,039	(1,357)
Less: Net Realized Gains on Investments Sold recognized during the period	710	495
Net Unrealized Gains (Losses) recognized during the period	$ 1,329	$ (1,852)

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Fair Value Measurement - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets at fair value	$ 36,600,000	$ 28,800,000
Significant transfers between Level 1 and Level 2	0		$ 0
Level 3 assets	$ 0
5.75% Senior Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate stated on senior notes	5.75%
Senior notes due date	Oct. 15, 2023

XML

Fixed Maturities and Equity Securities by Asset Class that are Measured at Fair Value (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Assets Measured at Fair Value	$ 3,295,375	$ 3,299,515
Total Liabilities Measured at Fair Value	273,865	277,951
Fixed Maturities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	2,961,541	3,057,054
Fixed Maturities | U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	289,612	393,563
Fixed Maturities | States, Municipalities and Political Subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	658,129	814,632
Fixed Maturities | Agency Residential Mortgage-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	362,870	407,619
Fixed Maturities | Residential Mortgage Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	96,134	54,104
Fixed Maturities | Asset-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	476,838	328,753
Fixed Maturities | Commercial Mortgage-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	168,609	160,904
Fixed Maturities | Mortgage-Backed and Asset-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	1,104,451	951,380
Fixed Maturities | Corporate Exposures
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	909,349	897,479
Equity Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	327,466	235,981
Equity Securities | Common Stocks
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	145,077	52,439
Equity Securities | Preferred Stocks
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	182,389	183,542
Short-Term Investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	6,368	6,480
Senior Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior Notes, at Fair Value	273,865	277,951
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Assets Measured at Fair Value	118,820	237,170
Total Liabilities Measured at Fair Value	0	0
Level 1 | Fixed Maturities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	80,379	178,251
Level 1 | Fixed Maturities | U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	80,379	178,251
Level 1 | Fixed Maturities | States, Municipalities and Political Subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 1 | Fixed Maturities | Agency Residential Mortgage-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 1 | Fixed Maturities | Residential Mortgage Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 1 | Fixed Maturities | Asset-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 1 | Fixed Maturities | Commercial Mortgage-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 1 | Fixed Maturities | Mortgage-Backed and Asset-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 1 | Fixed Maturities | Corporate Exposures
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 1 | Equity Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	38,441	52,439
Level 1 | Equity Securities | Common Stocks
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	38,441	52,439
Level 1 | Equity Securities | Preferred Stocks
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 1 | Short-Term Investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	6,480
Level 1 | Senior Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior Notes, at Fair Value	0	0
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Assets Measured at Fair Value	3,176,555	3,062,345
Total Liabilities Measured at Fair Value	273,865	277,951
Level 2 | Fixed Maturities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	2,881,162	2,878,803
Level 2 | Fixed Maturities | U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	209,233	215,312
Level 2 | Fixed Maturities | States, Municipalities and Political Subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	658,129	814,632
Level 2 | Fixed Maturities | Agency Residential Mortgage-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	362,870	407,619
Level 2 | Fixed Maturities | Residential Mortgage Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	96,134	54,104
Level 2 | Fixed Maturities | Asset-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	476,838	328,753
Level 2 | Fixed Maturities | Commercial Mortgage-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	168,609	160,904
Level 2 | Fixed Maturities | Mortgage-Backed and Asset-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	1,104,451	951,380
Level 2 | Fixed Maturities | Corporate Exposures
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	909,349	897,479
Level 2 | Equity Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	289,025	183,542
Level 2 | Equity Securities | Common Stocks
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	106,636	0
Level 2 | Equity Securities | Preferred Stocks
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	182,389	183,542
Level 2 | Short-Term Investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	6,368	0
Level 2 | Senior Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior Notes, at Fair Value	273,865	277,951
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Assets Measured at Fair Value	0	0
Total Liabilities Measured at Fair Value	0	0
Level 3 | Fixed Maturities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 3 | Fixed Maturities | U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 3 | Fixed Maturities | States, Municipalities and Political Subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 3 | Fixed Maturities | Agency Residential Mortgage-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 3 | Fixed Maturities | Residential Mortgage Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 3 | Fixed Maturities | Asset-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 3 | Fixed Maturities | Commercial Mortgage-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 3 | Fixed Maturities | Mortgage-Backed and Asset-Backed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 3 | Fixed Maturities | Corporate Exposures
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 3 | Equity Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 3 | Equity Securities | Common Stocks
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 3 | Equity Securities | Preferred Stocks
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 3 | Short-Term Investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed Maturities and Equity Securities, at Fair Value	0	0
Level 3 | Senior Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior Notes, at Fair Value	$ 0	$ 0

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Goodwill and Intangible Assets - Summary of Analysis of Goodwill by Reporting Segment (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($)
Goodwill [Line Items]
Goodwill at Beginning of the Period	$ 4,460
Goodwill Acquired	11,312
Foreign Currency Translation Adjustment	(27)
Goodwill at End of the Period	15,745
U.S.Insurance
Goodwill [Line Items]
Goodwill at Beginning of the Period	1,978
Goodwill at End of the Period	1,978
International Insurance
Goodwill [Line Items]
Goodwill at Beginning of the Period	2,482
Goodwill Acquired	11,312
Foreign Currency Translation Adjustment	(27)
Goodwill at End of the Period	$ 13,767

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Goodwill and Intangible Assets - Summary of Gross Carrying Value and Weighted Average Amortization Period of Intangible Assets by Type (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($)
Intangible Assets [Line Items]
Finite-Lived Assets, Gross Carrying Amount	$ 7,928
Indefinite-Lived Assets, Gross Carrying Amount	4,599
ASCO Customer Relationships
Intangible Assets [Line Items]
Finite-Lived Assets, Gross Carrying Amount	$ 4,739
Finite-Lived Assets, Weighted Average Amortization Period	15 years
ASCO VOBA
Intangible Assets [Line Items]
Finite-Lived Assets, Gross Carrying Amount	$ 1,694
Finite-Lived Assets, Weighted Average Amortization Period	4 years
BDM Broker Networks
Intangible Assets [Line Items]
Finite-Lived Assets, Gross Carrying Amount	$ 1,002
Finite-Lived Assets, Weighted Average Amortization Period	15 years
BDM Trade Name
Intangible Assets [Line Items]
Finite-Lived Assets, Gross Carrying Amount	$ 493
Finite-Lived Assets, Weighted Average Amortization Period	1 year
ASCO European Licenses
Intangible Assets [Line Items]
Indefinite-Lived Assets, Gross Carrying Amount	$ 2,463
NUAL Lloyd's Syndicate Capacity
Intangible Assets [Line Items]
Indefinite-Lived Assets, Gross Carrying Amount	$ 2,136

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Goodwill and Intangible Assets - Summary of Estimated Remaining Amortization Expense for Finite-Lived Intangible Assets (Detail) $ in Thousands	Jun. 30, 2018 USD ($)
Finite Lived Intangible Assets Future Amortization Expense Current And Five Succeeding Fiscal Years [Abstract]
2018	$ 649
2019	1,053
2020	806
2021	806
2022	594
2023 and thereafter	4,020
Total	$ 7,928

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Summary of Reserves for Losses and LAE Activity (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Insurance [Abstract]
Net Reserves for Losses and LAE at Beginning of Year	$ 1,705,380	$ 1,510,451
Acquired Net Reserves	16,159
Provision for Losses and LAE for Claims Occurring in the Current Year	379,158	331,595
Increase (Decrease) in Estimated Losses and LAE for Claims Occurring in Prior Years	3,320	15,115
Incurred Losses and LAE	382,478	346,710
Losses and LAE Paid for Claims Occurring During:
Current Year	(32,832)	(47,235)
Prior Years	(292,843)	(249,895)
Losses and LAE Payments	(325,675)	(297,130)
Foreign Currency Adjustment	(3,310)	3,432
Net Reserves for Losses and LAE at End of Period	1,775,032	1,563,463
Reinsurance Recoverables on Unpaid Losses and LAE	799,084	782,864	$ 809,765
Gross Reserves for Losses and LAE at End of Period	$ 2,574,116	$ 2,346,327	$ 2,515,145

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Loss Reserves - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Causes Of Increase Decrease In Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]
Increased in incurred losses and LAE	$ 35,800
Net prior accident year reserve strengthening	3,320	$ 15,115
Increase in losses and loss adjustment expense payments	28,500
Non-catastrophe
Causes Of Increase Decrease In Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]
Net prior accident year reserve strengthening	11,800
Catastrophe
Causes Of Increase Decrease In Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]
Net prior accident year reserve strengthening	$ 8,500

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Ceded Reinsurance - Additional Information (Detail) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Insurance [Abstract]
Reinsurance recoverables	$ 1,100.0
Allowance for uncollectible reinsurance	$ 12.6	$ 12.6

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Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Dec. 31, 2013	Dec. 31, 2017
Commitments And Contingencies Disclosure [Abstract]
Incentive awarded to the company by the State of Connecticut, total		$ 11.5	$ 11.5
Incentive awarded to the company by the State of Connecticut, non-interest bearing loans		8.0	8.0
Incentive awarded to the company by the State of Connecticut, grants		$ 3.5	$ 3.5
Non-interest bearing incentive loan term		10 years
Forgiveness awarded to the company by the state of Connecticut		$ 7.0
Incentive awarded to the company by the State of Connecticut, revenue recognized	$ 0.7	0.4
Incentive awarded to the company by the State of Connecticut, deferred revenue	$ 5.3	$ 5.3		$ 4.4

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Stock-Based Compensation - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018
Non-Performance Based Grants | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based payment award, award vesting period	3 years
Non-Performance Based Grants | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based payment award, award vesting period	4 years
Performance Based Grants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based payment award, award vesting period	3 years

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Restricted Stock Unit Awards (Detail) - Restricted Stock Units (RSUs)	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Number of Awards
Nonvested at the beginning of the period | shares	159,539
Granted | shares	21,593
Vested | shares	(65,236)
Forfeited | shares	(7,000)
Nonvested at the end of the period | shares	108,896
Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period | $ / shares	$ 41.60
Granted | $ / shares	49.03
Vested | $ / shares	34.16
Forfeited | $ / shares	38.00
Nonvested at the end of the period | $ / shares	$ 47.76

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Restricted Stock Unit Awards (Parenthetical) (Detail) - Restricted Stock Units (RSUs)	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share awards withheld for tax payments | shares	25,814
Weighted average vest date fair value, withheld for tax payments | $ / shares	$ 55.21

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Performance-based Equity Awards (Detail) - Performance-based Equity Awards	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Number of Awards
Nonvested at the beginning of the period | shares	966,361
Granted | shares	247,554
Performance Adjustment | shares	(59,833)
Vested | shares	(274,299)
Forfeited | shares	(16,250)
Nonvested at the end of the period | shares	863,533
Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period | $ / shares	$ 43.39
Granted | $ / shares	54.15
Performance Adjustment | $ / shares	37.25
Vested | $ / shares	37.25
Forfeited | $ / shares	43.27
Nonvested at the end of the period | $ / shares	$ 48.85

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Performance-based Equity Awards (Parenthetical) (Detail) - Performance-based Equity Awards	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share awards withheld for tax payments | shares	117,005
Weighted average vest date fair value, withheld for tax payments | $ / shares	$ 55.65

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Stockholders Equity - Additional Information (Detail) - $ / shares		6 Months Ended
	May 10, 2018	Jun. 30, 2018
Equity [Abstract]
Common stock dividend paid per share	$ 0.07
Dividend payable record date		Jun. 29, 2018