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Fair Value (Tables)
 6 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]  
Fair value hierarchy
The following table presents the Company’s financial assets and liabilities measured at fair value by level at June 30, 2018:
 
 
 
Estimated Fair Value Measurements 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 (1):
 

 
 

 
 

 
 

Available for sale securities:
 

 
 

 
 

 
 

Fixed maturities:
 

 
 

 
 

 
 

Corporate bonds
$
5,535,763

 
$
—

 
$
5,526,990

 
$
8,773

Mortgage backed securities
488,699

 
—

 
488,352

 
347

Municipal bonds
1,431,256

 
—

 
1,431,256

 
—

Commercial mortgage backed securities
590,198

 
—

 
590,169

 
29

U.S. government and government agencies
2,788,272

 
2,660,621

 
127,651

 
—

Non-U.S. government securities
1,692,783

 
—

 
1,692,783

 
—

Asset backed securities
1,820,489

 
—

 
1,820,489

 
—

Total
14,347,460

 
2,660,621

 
11,677,690

 
9,149

 
 
 
 
 
 
 
 
Short-term investments
1,096,798

 
1,053,661

 
43,137

 
—

 
 
 
 
 
 
 
 
Equity securities, at fair value
546,075

 
493,975

 
52,100

 
—

 
 
 
 
 
 
 
 
Derivative instruments (4)
31,623

 
—

 
31,623

 
—

 
 
 
 
 
 
 
 
Fair value option:
 
 
 
 
 
 
 
Corporate bonds
936,840

 
—

 
925,505

 
11,335

Non-U.S. government bonds
132,162

 
—

 
132,162

 
—

Mortgage backed securities
16,410

 
—

 
16,410

 
—

Municipal bonds
7,082

 
—

 
7,082

 
—

Commercial mortgage backed securities
1,306

 
—

 
1,306

 
—

Asset backed securities
214,718

 
—

 
214,718

 
—

U.S. government and government agencies
119,985

 
119,875

 
110

 
—

Short-term investments
217,066

 
19,869

 
197,197

 
—

Equity securities
137,138

 
65,400

 
71,738

 
—

Other investments
1,260,645

 
65,665

 
1,136,766

 
58,214

Other investments measured at net asset value (2)
1,068,259

 
 
 
 
 
 
Total
4,111,611

 
270,809

 
2,702,994

 
69,549

 
 
 
 
 
 
 
 
Total assets measured at fair value
$
20,133,567

 
$
4,479,066

 
$
14,507,544

 
$
78,698

 
 
 
 
 
 
 
 
Liabilities measured at fair value:
 

 
 

 
 

 
 

Contingent consideration liabilities
$
(63,930
)
 
$
—

 
$
—

 
$
(63,930
)
Securities sold but not yet purchased (3)
(24,529
)
 
—

 
(24,529
)
 
—

Derivative instruments (4)
(22,398
)
 
—

 
(22,398
)
 
—

Total liabilities measured at fair value
$
(110,857
)
 
$
—

 
$
(46,927
)
 
$
(63,930
)

(1)
In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See Note 7, “Investment Information—Securities Lending Agreements.”
(2)
In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets.
(3)
Represents the Company’s obligations to deliver securities that it did not own at the time of sale. Such amounts are included in “other liabilities” on the Company’s consolidated balance sheets.
(4)
See Note 9, “Derivative Instruments.”
The following table presents the Company’s financial assets and liabilities measured at fair value by level at December 31, 2017:
 
 
 
Estimated Fair Value Measurements 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 (1):
 

 
 

 
 

 
 

Available for sale securities:
 

 
 

 
 

 
 

Fixed maturities:
 

 
 

 
 

 
 

Corporate bonds
$
4,434,439

 
$
—

 
$
4,424,979

 
$
9,460

Mortgage backed securities
316,141

 
—

 
315,754

 
387

Municipal bonds
2,158,840

 
—

 
2,158,840

 
—

Commercial mortgage backed securities
545,817

 
—

 
545,277

 
540

U.S. government and government agencies
3,484,257

 
3,408,902

 
75,355

 
—

Non-U.S. government securities
1,612,754

 
—

 
1,612,754

 
—

Asset backed securities
1,780,143

 
—

 
1,775,143

 
5,000

Total
14,332,391

 
3,408,902

 
10,908,102

 
15,387

 
 
 
 
 
 
 
 
Equity securities
504,333

 
498,182

 
6,151

 
—

 
 
 
 
 
 
 
 
Short-term investments
1,469,042

 
1,420,732

 
48,310

 
—

 
 
 
 
 
 
 
 
Other investments
76,427

 
74,611

 
1,816

 
—

Other investments measured at net asset value (2)
188,562

 
 
 
 
 
 
Total other investments
264,989

 
74,611

 
1,816

 
—

 
 
 
 
 
 
 
 
Derivative instruments (4)
15,747

 
—

 
15,747

 
—

 
 
 
 
 
 
 
 
Fair value option:
 
 
 
 
 
 
 
Corporate bonds
1,068,725

 
—

 
1,056,508

 
12,217

Non-U.S. government bonds
195,788

 
—

 
195,788

 
—

Mortgage backed securities
20,491

 
—

 
20,491

 
—

Municipal bonds
15,210

 
—

 
15,210

 
—

Commercial mortgage backed securities
11,997

 
—

 
11,997

 
—

Asset backed securities
99,354

 
—

 
99,354

 
—

U.S. government and government agencies
231,290

 
231,019

 
271

 
—

Short-term investments
297,426

 
40,166

 
257,260

 
—

Equity securities
139,575

 
67,440

 
72,135

 
—

Other investments
1,128,094

 
82,291

 
986,636

 
59,167

Other investments measured at net asset value (2)
1,008,287

 
 
 
 
 
 
Total
4,216,237

 
420,916

 
2,715,650

 
71,384

 
 
 
 
 
 
 
 
Total assets measured at fair value
$
20,802,739

 
$
5,823,343

 
$
13,695,776

 
$
86,771

 
 
 
 
 
 
 
 
Liabilities measured at fair value:
 

 
 

 
 

 
 

Contingent consideration liabilities
$
(60,996
)
 
$
—

 
$
—

 
$
(60,996
)
Securities sold but not yet purchased (3)
(34,375
)
 
—

 
(34,375
)
 
—

Derivative instruments (4)
(20,464
)
 
—

 
(20,464
)
 
—

Total liabilities measured at fair value
$
(115,835
)
 
$
—

 
$
(54,839
)
 
$
(60,996
)

(1)
In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See Note 7, “Investment Information—Securities Lending Agreements.”
(2)
In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets.
(3)
Represents the Company’s obligations to deliver securities that it did not own at the time of sale. Such amounts are included in “other liabilities” on the Company’s consolidated balance sheets.
(4)
See Note 9, “Derivative Instruments.”
Rollforward of Level 3 investments
The following table presents a reconciliation of the beginning and ending balances for all financial assets and liabilities measured at fair value on a recurring basis using Level 3 inputs:
 
Assets
 
Liabilities
s
Available For Sale
 
Fair Value Option
 
 
 
 
 
Structured Securities (1)
 
Corporate
Bonds
 
Corporate
Bonds
 
Other
Investments
 
Total
 
Contingent Consideration Liabilities
Three Months Ended June 30, 2018
 
 
 

 
 
 
 

 
 
 
 
Balance at beginning of period
$
5,413

 
$
9,152

 
$
11,872

 
$
58,452

 
$
84,889

 
$
(62,449
)
Total gains or (losses) (realized/unrealized)
 
 
 
 
 
 
 
 
 
 
 
Included in earnings (2)
3

 
—

 
(537
)
 
336

 
(198
)
 
(1,481
)
Included in other comprehensive income
(4
)
 
(316
)
 
—

 
—

 
(320
)
 
—

Purchases, issuances, sales and settlements
 
 
 
 
 
 
 
 
 
 
 
Purchases
—

 
393

 
—

 
—

 
393

 
—

Issuances
—

 
—

 
—

 
—

 
—

 
—

Sales
(5,003
)
 
—

 
—

 
(74
)
 
(5,077
)
 
—

Settlements
(33
)
 
(456
)
 
—

 
(500
)
 
(989
)
 
—

Transfers in and/or out of Level 3
—

 
—

 
—

 
—

 
—

 
—

Balance at end of period
$
376

 
$
8,773

 
$
11,335

 
$
58,214

 
$
78,698

 
$
(63,930
)
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30, 2017
 
 
 

 
 
 
 

 
 

 
 
Balance at beginning of period
$
10,637

 
$
18,601

 
$
—

 
$
25,000

 
$
54,238

 
$
(125,544
)
Total gains or (losses) (realized/unrealized)
 
 
 
 
 
 
 
 
 
 
 
Included in earnings (2)
3,072

 
636

 
—

 
—

 
3,708

 
(3,441
)
Included in other comprehensive income
—

 
—

 
—

 
—

 
—

 
—

Purchases, issuances, sales and settlements
 
 
 
 
 
 
 
 
 
 
 
Purchases
—

 
4,935

 
—

 
—

 
4,935

 
—

Issuances
—

 
—

 
—

 
—

 
—

 
—

Sales
(13,640
)
 
(12,602
)
 
—

 
—

 
(26,242
)
 
—

Settlements
(69
)
 
—

 
—

 
—

 
(69
)
 
71,739

Transfers in and/or out of Level 3
—

 
—

 
—

 
—

 
—

 
—

Balance at end of period
$
—

 
$
11,570

 
$
—

 
$
25,000

 
$
36,570

 
$
(57,246
)
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2018
 
 
 

 
 
 
 

 
 
 
 
Balance at beginning of year
$
5,927

 
$
9,460

 
$
12,217

 
$
59,167

 
$
86,771

 
$
(60,996
)
Total gains or (losses) (realized/unrealized)
 
 
 
 
 
 
 
 
 
 
 
Included in earnings (2)
4

 
—

 
(612
)
 
(379
)
 
(987
)
 
(2,934
)
Included in other comprehensive income
(8
)
 
(168
)
 
—

 
—

 
(176
)
 
—

Purchases, issuances, sales and settlements
 
 
 
 
 
 
 
 
 
 
 
Purchases
—

 
393

 
—

 
—

 
393

 
—

Issuances
—

 
—

 
—

 
—

 
—

 
—

Sales
(5,003
)
 
—

 
—

 
(74
)
 
(5,077
)
 
—

Settlements
(544
)
 
(912
)
 
(270
)
 
(500
)
 
(2,226
)
 
—

Transfers in and/or out of Level 3
—

 
—

 
—

 
—

 
—

 
—

Balance at end of period
$
376

 
$
8,773

 
$
11,335

 
$
58,214

 
$
78,698

 
$
(63,930
)
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2017
 
 
 

 
 
 
 

 
 

 
 
Balance at beginning of year
$
11,289

 
$
18,344

 
$
—

 
$
25,000

 
$
54,633

 
$
(122,350
)
Total gains or (losses) (realized/unrealized)
 
 
 
 
 
 
 
 
 
 
 
Included in earnings (2)
3,779

 
893

 
—

 
—

 
4,672

 
(7,087
)
Included in other comprehensive income
—

 
—

 
—

 
—

 
—

 
—

Purchases, issuances, sales and settlements
 
 
 
 
 
 
 
 
 
 
 
Purchases
—

 
4,935

 
—

 
—

 
4,935

 
—

Issuances
—

 
—

 
—

 
—

 
—

 
—

Sales
(13,640
)
 
(12,602
)
 
—

 
—

 
(26,242
)
 
—

Settlements
(1,428
)
 
—

 
—

 
—

 
(1,428
)
 
72,191

Transfers in and/or out of Level 3
—

 
—

 
—

 
—

 
—

 
—

Balance at end of period
$
—

 
$
11,570

 
$
—

 
$
25,000

 
$
36,570

 
$
(57,246
)


(1)
Includes asset backed securities, mortgage backed securities and commercial mortgage backed securities.
(2)
Gains or losses were included in net realized gains (losses).