Fair Value (Tables)

12 Months Ended

Dec. 31, 2019

The following table presents the Company’s financial assets and liabilities measured at fair value by level at December 31, 2019:



				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 (1):
Available for sale securities:
Fixed maturities:
Corporate bonds	$	6,406,591		$	—	$	6,397,740		$	8,851
Mortgage backed securities	562,309			—		562,055			254
Municipal bonds	881,926			—		881,926			—
Commercial mortgage backed securities	733,108			—		733,108			—
U.S. government and government agencies	4,916,592			4,805,581		111,011			—
Non-U.S. government securities	2,078,757			—		2,078,757			—
Asset backed securities	1,683,753			—		1,678,791			4,962
Total	17,263,036			4,805,581		12,443,388			14,067

Short-term investments	956,546			904,804		51,742			—

Equity securities, at fair value	850,283			789,596		4,798			55,889

Derivative instruments (4)	48,946			—		48,946			—

Fair value option:
Corporate bonds	488,402			—		487,470			932
Non-U.S. government bonds	50,465			—		50,465			—
Mortgage backed securities	11,947			—		11,947			—
Municipal bonds	377			—		377			—
Commercial mortgage backed securities	1,134			—		1,134			—
Asset backed securities	200,163			—		200,163			—
U.S. government and government agencies	1,962			1,852		110			—
Short-term investments	377,014			333,320		43,694			—
Equity securities	102,697			43,962		641			58,094
Other investments	1,418,273			53,287		1,296,169			68,817
Other investments measured at net asset value (2)	1,011,043
Total	3,663,477			432,421		2,092,170			127,843

Total assets measured at fair value	$	22,782,288		$	6,932,402	$	14,641,044		$	197,799

Liabilities measured at fair value:
Contingent consideration liabilities	$	(7,998	)	$	—	$	—		$	(7,998	)
Securities sold but not yet purchased (3)	(66,257		)	—		(66,257		)	—
Derivative instruments (4)	(39,750		)	—		(39,750		)	—
Total liabilities measured at fair value	$	(114,005	)	$	—	$	(106,007	)	$	(7,998	)


(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 8.

(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 10.

The following table presents the Company’s financial assets and liabilities measured at fair value by level at December 31, 2018:



				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 (1):
Available for sale securities:
Fixed maturities:
Corporate bonds	$	5,537,548		$	—	$	5,529,407		$	8,141
Mortgage backed securities	541,193			—		540,884			309
Municipal bonds	1,013,395			—		1,013,395			—
Commercial mortgage backed securities	729,442			—		729,438			4
U.S. government and government agencies	3,758,698			3,657,181		101,517			—
Non-U.S. government securities	1,771,338			—		1,771,338			—
Asset backed securities	1,600,896			—		1,600,896			—
Total	14,952,510			3,657,181		11,286,875			8,454

Equity securities	353,794			321,927		31,867			—

Short-term investments	955,880			875,881		79,999			—

Derivative instruments (4)	73,893			—		73,893			—

Fair value option:
Corporate bonds	852,585			—		846,827			5,758
Non-U.S. government bonds	79,066			—		79,066			—
Mortgage backed securities	16,731			—		16,731			—
Municipal bonds	7,144			—		7,144			—
Commercial mortgage backed securities	—			—		—			—
Asset backed securities	178,790			—		178,790			—
U.S. government and government agencies	111,246			111,138		108			—
Short-term investments	322,177			278,579		43,598			—
Equity securities	103,893			48,827		55,066			—
Other investments	1,254,220			39,107		1,152,408			62,705
Other investments measured at net asset value (2)	1,057,719
Total	3,983,571			477,651		2,379,738			68,463

Total assets measured at fair value	$	20,319,648		$	5,332,640	$	13,852,372		$	76,917

Liabilities measured at fair value:
Contingent consideration liabilities	$	(66,665	)	$	—	$	—		$	(66,665	)
Securities sold but not yet purchased (3)	(7,790		)	—		(7,790		)	—
Derivative instruments (4)	(20,664		)	—		(20,664		)	—
Total liabilities measured at fair value	$	(95,119	)	$	—	$	(28,454	)	$	(66,665	)


(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 8.

(2)


(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 10.

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 for 2019 and 2018:



				Assets														Liabilities
	Available For Sale						Fair Value Option								Fair Value
	Structured Securities (1)			Corporate Bonds			Corporate Bonds			Other Investments			Equity Securities		Equity Securities			Contingent Consideration Liabilities
Year Ended December 31, 2019
Balance at beginning of year	$	313		$	8,141		$	5,758		$	62,705		$	—	$	—		$	(66,665	)
Total gains or (losses) (realized/unrealized)
Included in earnings (2)	1,760			2			(162		)	(8,119		)	1,949		(3,418		)	(1,478		)
Included in other comprehensive income	3			(267		)	—			—			—		—			—
Purchases, issuances, sales and settlements
Purchases	—			881			—			3,746			—		36,077			—
Issuances	—			—			—			—			—		—			(548		)
Sales	(1,757		)	—			(28,583		)	(20,495		)	—		(27,982		)	—
Settlements	(552		)	(1,766		)	—			(600		)	—		—			60,693
Transfers in and/or out of Level 3	5,449			1,860			23,919			31,580			56,145		51,212			—
Balance at end of year	$	5,216		$	8,851		$	932		$	68,817		$	58,094	$	55,889		$	(7,998	)

Year Ended December 31, 2018
Balance at beginning of year	$	5,927		$	9,460		$	12,217		$	59,167		$	—	$	—		$	(60,996	)
Total gains or (losses) (realized/unrealized)
Included in earnings (2)	4			(1		)	(334		)	(1,416		)	—		—			(5,669		)
Included in other comprehensive income	(11		)	(296		)	—			—			—		—			—
Purchases, issuances, sales and settlements
Purchases	—			802			—			6,250			—		—			—
Issuances	—			—			—			—			—		—			—
Sales	(5,003		)	—			—			(296		)	—		—			—
Settlements	(604		)	(1,824		)	(6,125		)	(1,000		)	—		—			—
Transfers in and/or out of Level 3	—			—			—			—			—		—			—
Balance at end of year	$	313		$	8,141		$	5,758		$	62,705		$	—	$	—		$	(66,665	)


(1)	Includes asset backed securities, mortgage backed securities and commercial mortgage backed securities.


(2)	Gains or losses were included in net realized gains (losses).