Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2017

Fair value measurements for items measured at fair value

Assets measured at fair value included those listed, by hierarchy level, in the following tables as of December 31, 2017 and 2016:



	Table	6.1a
Fair value hierarchy - current year	December 31, 2017
Fair value hierarchy - current year	(In thousands)		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	U.S. Treasury securities and obligations of U.S. government corporations and agencies		$	178,846	$	81,598	$	97,248	$	—
	Obligations of U.S. states and political subdivisions		2,152,524		—		2,152,253		271
	Corporate debt securities		2,066,838		—		2,066,838		—
	ABS		4,923		—		4,923		—
	RMBS		181,849		—		181,849		—
	CMBS		297,312		—		297,312		—
	CLOs		101,023		—		101,023		—
	Total debt securities		4,983,315		81,598		4,901,446		271
	Equity securities ⁽¹⁾		7,246		2,978		—		4,268
	Total investments		$	4,990,561	$	84,576	$	4,901,446	$	4,539
	Real estate acquired ⁽²⁾		$	12,713	$	—	$	—	$	12,713



	Table	6.1b
Fair value hierarchy - prior year	December 31, 2016
Fair value hierarchy - prior year	(In thousands)		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	U.S. Treasury securities and obligations of U.S. government corporations and agencies		$	73,530	$	30,690	$	42,840	$	—
	Obligations of U.S. states and political subdivisions		2,143,016		—		2,142,325		691
	Corporate debt securities		1,743,910		—		1,743,910		—
	ABS		59,565		—		59,565		—
	RMBS		224,209		—		224,209		—
	CMBS		319,817		—		319,817		—
	CLOs		121,175		—		121,175		—
	Total debt securities		4,685,222		30,690		4,653,841		691
	Equity securities ⁽¹⁾		7,128		2,860		—		4,268
	Total investments		$	4,692,350	$	33,550	$	4,653,841	$	4,959
	Real estate acquired ⁽²⁾		$	11,748	$	—	$	—	$	11,748


⁽¹⁾	Equity securities in Level 3 are carried at cost, which approximates fair value.


⁽²⁾	Real estate acquired through claim settlement, which is held for sale, is reported in other assets on the consolidated balance sheets.

Reconciliation of beginning and ending balance for assets and liabilities measured at fair value with significant unobservable inputs (level 3)

For assets and liabilities measured at fair value using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances for the years ended December 31, 2017, 2016, and 2015 is shown in the following tables. There were no transfers into or out of Level 3 in those years and there we no losses included in earnings for those years attributable to the change in unrealized losses on assets still held at the end of each applicable year.



	Table	6.2a
Development of assets and liabilities classified within level 3 - current year	(In thousands)		Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	Balance at December 31, 2016		$	691		$	4,268	$	4,959		$	11,748
	Total realized/unrealized gains (losses):
	Included in earnings and reported as losses incurred, net		—			—		—			(1,315		)
	Purchases		—			—		—			34,749
	Sales		(420		)	—		(420		)	(32,469		)
	Balance at December 31, 2017		$	271		$	4,268	$	4,539		$	12,713



	Table	6.2b
Development of assets and liabilities classified within level 3 - prior year	(In thousands)		Debt Securities			Equity Securities			Total Investments			Real Estate Acquired
	Balance at December 31, 2015		$	1,228		$	2,855		$	4,083		$	12,149
	Total realized/unrealized gains (losses):
	Included in earnings and reported as net realized investment gains		—			3,579			3,579			—
	Included in earnings and reported as losses incurred, net		—			—			—			(1,142		)
	Purchases		—			4,258			4,258			36,859
	Sales		(537		)	(6,424		)	(6,961		)	(36,118		)
	Balance at December 31, 2016		$	691		$	4,268		$	4,959		$	11,748



	Table	6.2c
Development of assets and liabilities classified within level 3 - two years prior	(In thousands)		Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	Balance at December 31, 2014		$	1,846		$	321	$	2,167		$	12,658
	Total realized/unrealized gains (losses):
	Included in earnings and reported as losses incurred, net		—			—		—			(2,322		)
	Purchases		7			2,534		2,541			34,624
	Sales		(625		)	—		(625		)	(32,811		)
	Balance at December 31, 2015		$	1,228		$	2,855	$	4,083		$	12,149

Schedule of carrying value and fair value of financial liabilities measured on a recurring basis

Table 6.3 compares the carrying value and fair value of our financial liabilities disclosed, but not carried, at fair value as of December 31, 2017 and 2016.



	Table	6.3
Fair value measurements - liabilities			December 31, 2017				December 31, 2016
	(In thousands)		Carrying Value		Fair Value		Carrying Value		Fair Value
	FHLB Advance		$	155,000	$	152,124	$	155,000	$	151,905
	5% Notes		—		—		144,789		147,679
	2% Notes		—		—		204,672		308,605
	5.75% Notes		418,560		465,473		417,406		445,987
	9% Debentures		256,872		353,507		256,872		323,040
	Total financial liabilities		$	830,432	$	971,104	$	1,178,739	$	1,377,216