Fair Value (Tables)

12 Months Ended

Dec. 31, 2014

The following table presents the Company’s financial assets and liabilities measured at fair value by level at December 31, 2014:



				Fair Value Measurement Using:
	Estimated Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets measured at fair value:
Available for sale securities:
Fixed maturities and fixed maturities pledged under securities lending agreements (1):
Corporate bonds	$	3,108,513		$	—	$	3,108,513	$	—
Mortgage backed securities	943,343			—		943,343		—
Municipal bonds	1,494,122			—		1,494,122		—
Commercial mortgage backed securities	1,114,528			—		1,114,528		—
U.S. government and government agencies	1,447,972			1,447,972		—		—
Non-U.S. government securities	1,015,153			—		1,015,153		—
Asset backed securities	1,677,941			—		1,620,441		57,500
Total	10,801,572			1,447,972		9,296,100		57,500

Equity securities	658,182			658,182		—		—
Other investments	296,224			—		192,687		103,537
Short-term investments	797,226			759,621		37,605		—

Fair value option:
Investments accounted for using the fair value option:
Corporate bonds	497,101			—		497,101		—
Non-U.S. government bonds	88,411			—		88,411		—
Mortgage backed securities	22,190			—		22,190		—
Asset backed securities	24,322			—		24,322		—
Other investments	1,551,907			—		1,085,557		466,350
Short-term investments	251,601			250,580		1,021		—
Total	2,435,532			250,580		1,718,602		466,350
Total assets measured at fair value	$	14,988,736		$	3,116,355	$	11,244,994	$	627,387

Liabilities measured at fair value:
Contingent consideration liability	$	(61,845	)	$	—	$	—	$	(61,845	)
Total liabilities measured at fair value	$	(61,845	)	$	—	$	—	$	(61,845	)


(1)	In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities and short-term investments pledged. For purposes of this table, the Company has excluded the collateral received and reinvested and included the fixed maturities and short-term investments pledged.

The following table presents the Company’s financial assets and liabilities measured at fair value by level at December 31, 2013:



			Fair Value Measurement Using:
	Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets measured at fair value:
Available for sale securities:
Fixed maturities and fixed maturities pledged under securities lending agreements (1):
Corporate bonds	$	2,267,263	$	—	$	2,265,218	$	2,045
Mortgage backed securities	1,133,095		—		1,133,095		—
Municipal bonds	1,481,738		—		1,481,738		—
Commercial mortgage backed securities	1,074,497		—		1,074,497		—
U.S. government and government agencies	1,301,809		1,301,809		—		—
Non-U.S. government securities	1,085,861		—		1,085,861		—
Asset backed securities	1,332,594		—		1,332,594		—
Total	9,676,857		1,301,809		8,373,003		2,045

Equity securities	496,824		496,738		86		—
Other investments	498,310		—		327,890		170,420
Short-term investments	1,478,367		1,427,744		50,623		—

Fair value option:
Investments accounted for using the fair value option:
Corporate bonds	334,065		—		334,065		—
Non-U.S. government bonds	73,156		—		73,156		—
Mortgage backed securities	41,033		—		41,033		—
Other investments	773,280		—		395,755		377,525
Total	1,221,534		—		844,009		377,525
Total assets measured at fair value	$	13,371,892	$	3,226,291	$	9,595,611	$	549,990


(1)	In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities and short-term investments pledged. For purposes of this table, the Company has excluded the collateral received and reinvested and included the fixed maturities and short-term investments pledged.

Rollforward of Level 3 investments

The following table presents a reconciliation of the beginning and ending balances for all investments measured at fair value on a recurring basis using Level 3 inputs for 2014, 2013 and 2012:



	Fair Value Measurements Using:
	Significant Unobservable Inputs (Level 3)
			Assets												Liabilities
	Available for sale								Fair value option
	Asset Backed Securities		Corporate Bonds			Other Investments			Other Investments			Total			Contingent Consideration Liability
Year Ended December 31, 2014
Balance at beginning of year	$	—	$	2,045		$	170,420		$	377,525		$	549,990		$	—
Total gains or (losses) (realized/unrealized)
Included in earnings (1)	—		—			(39		)	16,818			16,779			(20,083		)
Included in other comprehensive income	—		—			(680		)	932			252			—
Purchases, issuances and settlements
Purchases	—		—			—			185,224			185,224			—
Issuances	—		—			—			—			—			(41,762		)
Sales	—		(2,045		)	(66,164		)	—			(68,209		)	—
Settlements	—		—			—			(114,149		)	(114,149		)	—
Transfers in and/or out of Level 3	57,500		—			—			—			57,500			—
Balance at end of year	$	57,500	$	—		$	103,537		$	466,350		$	627,387		$	(61,845	)

Year Ended December 31, 2013
Balance at beginning of year	$	—	$	98,404		$	184,202		$	195,350		$	477,956		$	—
Total gains or (losses) (realized/unrealized)
Included in earnings (1)	—		4,679			8,915			11,743			25,337			—
Included in other comprehensive income	—		(3,051		)	473			—			(2,578		)	—
Purchases, issuances and settlements
Purchases	—		—			25,000			275,067			300,067			—
Issuances	—		—			—			—			—			—
Sales	—		(96,655		)	—			(20,156		)	(116,811		)	—
Settlements	—		(1,332		)	(48,170		)	(84,479		)	(133,981		)	—
Transfers in and/or out of Level 3	—		—			—			—			—			—
Balance at end of year	$	—	$	2,045		$	170,420		$	377,525		$	549,990		$	—


(1)	Gains or losses on corporate bonds were included in net realized gains (losses) while gains or losses on other investments were included in net realized gains (losses) or net investment income. Amounts related to the contingent consideration liability were included in net realized gains (losses).

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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