Investments (Tables)
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12 Months Ended |
Dec. 31, 2015 |
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| Investments, Debt and Equity Securities [Abstract] |
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| Amortized cost and estimated fair value of available-for-sale fixed maturities and equity securities |
Available-for-sale securities at December 31, 2015 and December 31, 2014 included the following: | | | | | | | | | | | | | | | | | | December 31, 2015 | (In thousands) | Amortized
Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Estimated Fair Value | Fixed maturities | | | | | | | | U.S. Treasury obligations | $ | 122,855 |
| | $ | 1,696 |
| | $ | 659 |
| | $ | 123,892 |
| U.S. Government-sponsored enterprise obligations | 25,456 |
| | 927 |
| | 49 |
| | 26,334 |
| State and municipal bonds | 904,719 |
| | 36,739 |
| | 823 |
| | 940,635 |
| Corporate debt | 1,296,128 |
| | 24,720 |
| | 29,162 |
| | 1,291,686 |
| Residential mortgage-backed securities | 233,659 |
| | 6,039 |
| | 1,311 |
| | 238,387 |
| Agency commercial mortgage-backed securities | 10,851 |
| | 174 |
| | 26 |
| | 10,999 |
| Other commercial mortgage-backed securities | 29,983 |
| | 354 |
| | 203 |
| | 30,134 |
| Other asset-backed securities | 98,412 |
| | 54 |
| | 246 |
| | 98,220 |
| | $ | 2,722,063 |
| | $ | 70,703 |
| | $ | 32,479 |
| | $ | 2,760,287 |
| | | | | | | | | | December 31, 2014 | (In thousands) | Amortized
Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Estimated Fair Value | Fixed maturities | | | | | | | | U.S. Treasury obligations | $ | 163,714 |
| | $ | 3,785 |
| | $ | 987 |
| | $ | 166,512 |
| U.S. Government-sponsored enterprise obligations | 38,022 |
| | 1,641 |
| | 100 |
| | 39,563 |
| State and municipal bonds | 1,015,555 |
| | 47,395 |
| | 335 |
| | 1,062,615 |
| Corporate debt | 1,389,970 |
| | 44,234 |
| | 17,103 |
| | 1,417,101 |
| Residential mortgage-backed securities | 266,306 |
| | 10,198 |
| | 448 |
| | 276,056 |
| Agency commercial mortgage-backed securities | 15,344 |
| | 208 |
| | 59 |
| | 15,493 |
| Other commercial mortgage-backed securities | 50,025 |
| | 1,137 |
| | 99 |
| | 51,063 |
| Other asset-backed securities | 116,541 |
| | 288 |
| | 205 |
| | 116,624 |
| | $ | 3,055,477 |
| | $ | 108,886 |
| | $ | 19,336 |
| | $ | 3,145,027 |
|
|
| Schedule of available for sale securities by contractual maturity |
The recorded cost basis and estimated fair value of available-for-sale fixed maturities at December 31, 2015, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands) | Amortized
Cost | | Due in one
year or less | | Due after
one year
through
five years | | Due after
five years
through
ten years | | Due after
ten years | | Total Fair
Value | Fixed maturities, available for sale | | | | | | | | | | | | U.S. Treasury obligations | $ | 122,855 |
| | $ | 10,703 |
| | $ | 94,067 |
| | $ | 15,923 |
| | $ | 3,199 |
| | $ | 123,892 |
| U.S. Government-sponsored enterprise obligations | 25,456 |
| | 2,290 |
| | 16,593 |
| | 7,312 |
| | 139 |
| | 26,334 |
| State and municipal bonds | 904,719 |
| | 48,752 |
| | 332,489 |
| | 428,872 |
| | 130,522 |
| | 940,635 |
| Corporate debt | 1,296,128 |
| | 104,746 |
| | 698,148 |
| | 455,849 |
| | 32,943 |
| | 1,291,686 |
| Residential mortgage-backed securities | 233,659 |
| |
| |
| |
| |
| | 238,387 |
| Agency commercial mortgage-backed securities | 10,851 |
| |
| |
| |
| |
| | 10,999 |
| Other commercial mortgage-backed securities | 29,983 |
| |
| |
| |
| |
| | 30,134 |
| Other asset-backed securities | 98,412 |
| |
| |
| |
| |
| | 98,220 |
| | $ | 2,722,063 |
| | | | | | | | | | $ | 2,760,287 |
|
|
| Other Investments |
Other investments at December 31, 2015 and December 31, 2014 were comprised as follows: | | | | | | | | | (In thousands) | December 31,
2015 | | December 31,
2014 | Investments in LPs/LLCs, at cost | $ | 44,958 |
| | $ | 53,258 |
| Convertible securities, at fair value | 30,611 |
| | 28,958 |
| Other, principally FHLB capital stock, at cost | 3,564 |
| | 3,841 |
| | $ | 79,133 |
| | $ | 86,057 |
|
|
| Unconsolidated Subsidiaries |
ProAssurance holds investments in unconsolidated subsidiaries, accounted for under the equity method. The investments include the following: | | | | | | | | | | | | | December 31, 2015 | | Carrying Value | (In thousands) | Percentage
Ownership | | December 31,
2015 | | December 31,
2014 | Investment in LPs/LLCs: | | | | | | | Qualified affordable housing tax credit partnerships | See below | | $ | 121,550 |
| | $ | 133,143 |
| Other tax credit partnerships | See below | | 8,362 |
| | — |
| All other LPs/LLCs | See below | | 181,996 |
| | 143,358 |
| | | | | $ | 311,908 |
| | $ | 276,501 |
|
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| Investments held in an unrealized loss position |
The following tables provide summarized information with respect to investments held in an unrealized loss position at December 31, 2015 and December 31, 2014, including the length of time the investment had been held in a continuous unrealized loss position. | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2015 | | Total | | Less than 12 months | | 12 months or longer | | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | (In thousands) | Value | | Loss | | Value | | Loss | | Value | | Loss | Fixed maturities, available for sale | | | | | | | | | | | | U.S. Treasury obligations | $ | 66,685 |
| | $ | 658 |
| | $ | 61,869 |
| | $ | 591 |
| | $ | 4,816 |
| | $ | 67 |
| U.S. Government-sponsored enterprise obligations | 6,819 |
| | 49 |
| | 6,819 |
| | 49 |
| | — |
| | — |
| State and municipal bonds | 46,193 |
| | 823 |
| | 36,822 |
| | 703 |
| | 9,371 |
| | 120 |
| Corporate debt | 622,991 |
| | 29,162 |
| | 555,097 |
| | 15,691 |
| | 67,894 |
| | 13,471 |
| Residential mortgage-backed securities | 87,567 |
| | 1,311 |
| | 78,961 |
| | 1,095 |
| | 8,606 |
| | 216 |
| Agency commercial mortgage-backed securities | 409 |
| | 26 |
| | — |
| | — |
| | 409 |
| | 26 |
| Other commercial mortgage-backed securities | 15,960 |
| | 203 |
| | 12,635 |
| | 170 |
| | 3,325 |
| | 33 |
| Other asset-backed securities | 79,637 |
| | 247 |
| | 74,150 |
| | 237 |
| | 5,487 |
| | 10 |
| | $ | 926,261 |
| | $ | 32,479 |
| | $ | 826,353 |
| | $ | 18,536 |
| | $ | 99,908 |
| | $ | 13,943 |
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| | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2014 | | Total | | Less than 12 months | | 12 months or longer | | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | (In thousands) | Value | | Loss | | Value | | Loss | | Value | | Loss | Fixed maturities, available for sale | | | | | | | | | | | | U.S. Treasury obligations | $ | 61,209 |
| | $ | 987 |
| | $ | 46,869 |
| | $ | 617 |
| | $ | 14,340 |
| | $ | 370 |
| U.S. Government-sponsored enterprise obligations | 6,268 |
| | 100 |
| | 2,775 |
| | 44 |
| | 3,493 |
| | 56 |
| State and municipal bonds | 39,831 |
| | 335 |
| | 18,910 |
| | 84 |
| | 20,921 |
| | 251 |
| Corporate debt | 423,107 |
| | 17,103 |
| | 326,804 |
| | 13,236 |
| | 96,303 |
| | 3,867 |
| Residential mortgage-backed securities | 45,006 |
| | 448 |
| | 14,406 |
| | 31 |
| | 30,600 |
| | 417 |
| Agency commercial mortgage-backed securities | 4,783 |
| | 59 |
| | 70 |
| | — |
| | 4,713 |
| | 59 |
| Other commercial mortgage-backed securities | 13,860 |
| | 99 |
| | 7,005 |
| | 28 |
| | 6,855 |
| | 71 |
| Other asset-backed securities | 62,577 |
| | 205 |
| | 59,176 |
| | 109 |
| | 3,401 |
| | 96 |
| | $ | 656,641 |
| | $ | 19,336 |
| | $ | 476,015 |
| | $ | 14,149 |
| | $ | 180,626 |
| | $ | 5,187 |
| Other investments | | | | | | | | | | | | Investments in LPs/LLCs carried at cost | $ | 23,683 |
| | $ | 3,948 |
| | $ | 22,265 |
| | $ | 3,711 |
| | $ | 1,418 |
| | $ | 237 |
|
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| Net Investment Income |
Net investment income by investment category was as follows: | | | | | | | | | | | | | | Year Ended December 31 | (In thousands) | 2015 | | 2014 | | 2013 | Fixed maturities | $ | 97,348 |
| | $ | 111,895 |
| | $ | 122,065 |
| Equities | 13,317 |
| | 10,817 |
| | 9,454 |
| Short-term and Other investments | 2,049 |
| | 8,833 |
| | 2,584 |
| BOLI | 2,053 |
| | 2,006 |
| | 1,960 |
| Investment fees and expenses | (6,107 | ) | | (7,994 | ) | | (6,798 | ) | Net investment income | $ | 108,660 |
| | $ | 125,557 |
| | $ | 129,265 |
|
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| Net realized investment gains (losses) |
The following table provides detailed information regarding net realized investment gains (losses): | | | | | | | | | | | | | | Year Ended December 31 | (In thousands) | 2015 | | 2014 | | 2013 | Total OTTI losses: | | | | | | State and municipal bonds | $ | — |
| | $ | (50 | ) | | $ | (71 | ) | Corporate debt | (11,781 | ) | | (1,425 | ) | | — |
| Other investments | (8,136 | ) | | — |
| | — |
| Portion recognized in OCI: | | | | | | Corporate debt | 4,572 |
| | 268 |
| | — |
| Net impairments recognized in earnings | (15,345 | ) | | (1,207 | ) | | (71 | ) | Gross realized gains, available-for-sale securities | 11,936 |
| | 5,627 |
| | 18,130 |
| Gross realized (losses), available-for-sale securities | (11,481 | ) | | (1,103 | ) | | (7,031 | ) | Net realized gains (losses), trading securities | 1,080 |
| | 28,018 |
| | 20,444 |
| Net realized gains (losses), Other investments | 464 |
| | 326 |
| | — |
| Change in unrealized holding gains (losses), trading securities | (28,343 | ) | | (18,883 | ) | | 35,507 |
| Change in unrealized holding gains (losses), convertible securities, carried at fair value | (896 | ) | | 1,876 |
| | — |
| Other | 946 |
| | — |
| | 925 |
| Net realized investment gains (losses) | $ | (41,639 | ) | | $ | 14,654 |
| | $ | 67,904 |
|
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| Cumulative credit losses recorded in earnings related to impaired debt securities for which a portion of the OTTI has been recorded in OCI |
The following table presents a roll forward of cumulative credit losses recorded in earnings related to impaired debt securities for which a portion of the OTTI was recorded in OCI. | | | | | | | | | | | | | (In thousands) | 2015 | | 2014 | | 2013 | Balance January 1 | $ | 232 |
| | $ | 83 |
| | $ | 3,301 |
| Additional credit losses recognized during the period, related to securities for which: | | | | | | No OTTI has been previously recognized | 3,648 |
| | 149 |
| | — |
| OTTI has been previously recognized | 2,645 |
| | — |
| | — |
| Reductions due to: | | | | | | Securities sold during the period (realized) | (774 | ) | | — |
| | (3,218 | ) | Balance December 31 | $ | 5,751 |
| | $ | 232 |
| | $ | 83 |
|
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| Information regarding sales and purchases of available-for-sale securities |
Other information regarding sales and purchases of available-for-sale securities is as follows: | | | | | | | | | | | | Year Ended December 31 | (In millions) | 2015 | 2014 | 2013 | Proceeds from sales (exclusive of maturities and paydowns) | $ | 481.8 |
| $ | 244.9 |
| $ | 593.3 |
| Purchases | $ | 580.6 |
| $ | 645.1 |
| $ | 519.2 |
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