Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Differences between our effective tax rate for financial statement purposes and the Federal Statutory rate

	2012			2011			2010
Statutory tax rate		35.0	%		35.0	%		35.0	%
Federal tax at statutory rate	$	194,049		$	124,252		$	171,439
Nontaxable municipal bond interest and dividend received deduction		(31,939)			(29,021)			(26,968)
State income taxes, net of federal tax benefit		3,619			3,050			2,397
Foreign income taxes		40,703			25,410			32,008
Foreign tax credit		(40,703)			(25,410)			(32,008)
Uncertain tax positions (net of federal tax benefit (expense) on state
positions: $719 in 2012, $212 in 2011 and $(52) in 2010)		878			38			(1,532)
Other, net		(3,420)			1,444			(605)
Income tax expense	$	163,187		$	99,763		$	144,731
Effective tax rate		29.4	%		28.1	%		29.5	%

The components of income tax expense

		2012		2011		2010
Federal current		$	94,493	$	47,993	$	113,837
Federal deferred			20,827		21,075		(3,218)
	Total federal		115,320		69,068		110,619
State current			2,570		2,203		1,797
State deferred			2,997		2,489		1,891
	Total state		5,567		4,692		3,688
Foreign current			34,678		28,543		31,691
Foreign deferred			6,025		(2,790)		317
	Total foreign		40,703		25,753		32,008
Uncertain tax positions			1,597		250		(1,584)
	Income tax expense	$	163,187	$	99,763	$	144,731

Composition of deferred tax assets and liabilities

		2012		2011
Excess of financial statement unearned premium over tax		$	26,192	$	26,217
Discounting of loss reserves, net of salvage and subrogation			58,105		62,402
Excess of financial statement accrued expenses over tax			18,797		16,331
Allowance for bad debts, not deductible for tax			4,733		6,216
Stock-based compensation expense in excess of deduction for tax			5,133		9,712
Financial statement loss for Lloyd’s syndicates in excess of deduction for tax			0		7,571
Tax basis in net assets of foreign subsidiaries in excess of book basis			2,811		0
Federal tax net operating loss carryforwards			4,744		4,451
State tax net operating loss carryforwards, net of federal tax benefit			2,631		3,352
Federal benefit of state uncertain tax positions			1,142		424
Valuation allowance			(9,187)		(7,983)
	Total deferred tax assets		115,101		128,693
Unrealized gain on increase in value of securities			161,098		120,854
Deferred policy acquisition costs, net of ceding commissions, deductible for tax			15,360		19,482
Amortizable goodwill for tax			97,344		84,110
Financial statement income for Lloyd’s syndicates in excess of taxable income			3,860		0
Book basis in net assets of foreign subsidiaries in excess of tax basis			0		10,504
Depreciation and other items			13,926		11,856
	Total deferred tax liabilities		291,588		246,806
	Net deferred tax liability	$	(176,487)	$	(118,113)

Changes in the valuation allowance

		2012		2011		2010
Balance at beginning of year		$	7,983	$	8,143	$	6,495
Net operating loss carryforwards			1,248		(120)		1,676
Other			(44)		(40)		(28)
	Balance at December 31	$	9,187	$	7,983	$	8,143

Changes in our liability for unrecognized gross tax benefits

		2012		2011		2010
Balance at beginning of year		$	2,522	$	2,274	$	3,821
Gross increases
Tax position of current year			145		160		289
Tax position of prior years			2,988		763		259
Gross decreases
Statute expirations			(713)		(595)		(1,244)
Settlements			(404)		0		0
Tax positions of prior years			(409)		(80)		(851)
	Balance at December 31	$	4,129	$	2,522	$	2,274