þ | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. |
Delaware | 22-1867895 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
475 Steamboat Road, Greenwich, Connecticut | 06830 | |
(Address of principal executive offices) | (Zip Code) |
(203) 629-3000 | ||
(Registrant’s telephone number, including area code) | ||
None | ||
Former name, former address and former fiscal year, if changed since last report. |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
(Do not check if a smaller reporting company) | Emerging growth company o |
EX-31.1 | |
EX-31.2 | |
EX-32.1 | |
EX-101 INSTANCE DOCUMENT | |
EX-101 SCHEMA DOCUMENT | |
EX-101 CALCULATION LINKBASE DOCUMENT | |
EX-101 LABELS LINKBASE DOCUMENT | |
EX-101 PRESENTATION LINKBASE DOCUMENT | |
EX-101 DEFINITION LINKBASE DOCUMENT |
June 30, 2018 | December 31, 2017 | ||||||
(Unaudited) | (Audited) | ||||||
Assets | |||||||
Investments: | |||||||
Fixed maturity securities | $ | 13,218,729 | $ | 13,551,250 | |||
Investment funds | 1,208,586 | 1,155,677 | |||||
Real estate | 1,883,622 | 1,469,601 | |||||
Arbitrage trading account | 721,088 | 617,649 | |||||
Equity securities | 472,389 | 576,647 | |||||
Loans receivable | 98,088 | 79,684 | |||||
Total investments | 17,602,502 | 17,450,508 | |||||
Cash and cash equivalents | 911,202 | 950,471 | |||||
Premiums and fees receivable | 1,902,336 | 1,773,844 | |||||
Due from reinsurers | 1,841,056 | 1,783,200 | |||||
Deferred policy acquisition costs | 514,499 | 507,549 | |||||
Prepaid reinsurance premiums | 503,292 | 472,009 | |||||
Trading account receivables from brokers and clearing organizations | 119,628 | 189,280 | |||||
Property, furniture and equipment | 427,619 | 422,960 | |||||
Goodwill | 178,975 | 178,945 | |||||
Accrued investment income | 141,902 | 136,597 | |||||
Federal and foreign income taxes | 576 | — | |||||
Other assets | 477,557 | 434,554 | |||||
Total assets | $ | 24,621,144 | $ | 24,299,917 | |||
Liabilities and Equity | |||||||
Liabilities: | |||||||
Reserves for losses and loss expenses | $ | 11,736,575 | $ | 11,670,408 | |||
Unearned premiums | 3,441,774 | 3,290,180 | |||||
Due to reinsurers | 252,358 | 246,460 | |||||
Trading account securities sold but not yet purchased | 90,281 | 64,358 | |||||
Federal and foreign income taxes | — | 98,091 | |||||
Other liabilities | 935,356 | 981,987 | |||||
Senior notes and other debt | 1,792,055 | 1,769,052 | |||||
Subordinated debentures | 907,117 | 728,218 | |||||
Total liabilities | 19,155,516 | 18,848,754 | |||||
Equity: | |||||||
Common stock, par value $.20 per share: | |||||||
Authorized 500,000,000 shares, issued and outstanding, net of treasury shares, 121,716,402 and 121,514,852 shares, respectively | 47,024 | 47,024 | |||||
Additional paid-in capital | 1,060,308 | 1,048,283 | |||||
Retained earnings | 7,423,162 | 6,956,882 | |||||
Accumulated other comprehensive (loss) income | (395,842 | ) | 68,541 | ||||
Treasury stock, at cost, 113,401,516 and 113,603,066 shares, respectively | (2,708,534 | ) | (2,709,386 | ) | |||
Total stockholders’ equity | 5,426,118 | 5,411,344 | |||||
Noncontrolling interests | 39,510 | 39,819 | |||||
Total equity | 5,465,628 | 5,451,163 | |||||
Total liabilities and equity | $ | 24,621,144 | $ | 24,299,917 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
REVENUES: | |||||||||||||||
Net premiums written | $ | 1,624,104 | $ | 1,564,251 | $ | 3,289,442 | $ | 3,211,089 | |||||||
Change in net unearned premiums | (43,051 | ) | 4,452 | (140,981 | ) | (72,345 | ) | ||||||||
Net premiums earned | 1,581,053 | 1,568,703 | 3,148,461 | 3,138,744 | |||||||||||
Net investment income | 153,777 | 135,264 | 328,295 | 284,123 | |||||||||||
Net realized and unrealized gains on investments | 69,631 | 40,453 | 118,095 | 92,801 | |||||||||||
Revenues from non-insurance businesses | 76,698 | 69,857 | 146,869 | 135,247 | |||||||||||
Insurance service fees | 29,719 | 33,584 | 60,393 | 66,864 | |||||||||||
Other income | 38 | 188 | 50 | 688 | |||||||||||
Total revenues | 1,910,916 | 1,848,049 | 3,802,163 | 3,718,467 | |||||||||||
OPERATING COSTS AND EXPENSES: | |||||||||||||||
Losses and loss expenses | 973,636 | 964,698 | 1,936,856 | 1,944,302 | |||||||||||
Other operating costs and expenses | 593,142 | 616,632 | 1,203,581 | 1,220,332 | |||||||||||
Expenses from non-insurance businesses | 75,191 | 68,959 | 144,734 | 134,978 | |||||||||||
Interest expense | 39,705 | 36,799 | 76,760 | 73,597 | |||||||||||
Total operating costs and expenses | 1,681,674 | 1,687,088 | 3,361,931 | 3,373,209 | |||||||||||
Income before income taxes | 229,242 | 160,961 | 440,232 | 345,258 | |||||||||||
Income tax expense | (48,464 | ) | (51,388 | ) | (91,881 | ) | (111,011 | ) | |||||||
Net income before noncontrolling interests | 180,778 | 109,573 | 348,351 | 234,247 | |||||||||||
Noncontrolling interests | (703 | ) | (569 | ) | (1,879 | ) | (1,796 | ) | |||||||
Net income to common stockholders | $ | 180,075 | $ | 109,004 | $ | 346,472 | $ | 232,451 | |||||||
NET INCOME PER SHARE: | |||||||||||||||
Basic | $ | 1.42 | $ | 0.87 | $ | 2.74 | $ | 1.88 | |||||||
Diluted | $ | 1.40 | $ | 0.85 | $ | 2.70 | $ | 1.81 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income before noncontrolling interests | $ | 180,778 | $ | 109,573 | $ | 348,351 | $ | 234,247 | |||||||
Other comprehensive (loss) income: | |||||||||||||||
Change in unrealized currency translation adjustments | (104,455 | ) | 20,247 | (91,656 | ) | 42,982 | |||||||||
Change in unrealized investment gains, net of taxes | (32,442 | ) | 43,597 | (158,214 | ) | 34,766 | |||||||||
Other comprehensive (loss) income | (136,897 | ) | 63,844 | (249,870 | ) | 77,748 | |||||||||
Comprehensive income | 43,881 | 173,417 | 98,481 | 311,995 | |||||||||||
Noncontrolling interests | (666 | ) | (602 | ) | (1,853 | ) | (1,810 | ) | |||||||
Comprehensive income to common stockholders | $ | 43,215 | $ | 172,815 | $ | 96,628 | $ | 310,185 |
For the Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
COMMON STOCK: | |||||||
Beginning and end of period | $ | 47,024 | $ | 47,024 | |||
ADDITIONAL PAID-IN CAPITAL: | |||||||
Beginning of period | $ | 1,048,283 | $ | 1,037,446 | |||
Restricted stock units issued | (5,642 | ) | (295 | ) | |||
Restricted stock units expensed | 17,667 | 20,788 | |||||
End of period | $ | 1,060,308 | $ | 1,057,939 | |||
RETAINED EARNINGS: | |||||||
Beginning of period | $ | 6,956,882 | $ | 6,595,987 | |||
Cumulative effect adjustment resulting from changes in accounting principles | 215,939 | — | |||||
Net income to common stockholders | 346,472 | 232,451 | |||||
Dividends | (96,131 | ) | (93,372 | ) | |||
End of period | $ | 7,423,162 | $ | 6,735,066 | |||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME: | |||||||
Unrealized investment gains: | |||||||
Beginning of period | $ | 375,421 | $ | 427,154 | |||
Cumulative effect adjustment resulting from changes in accounting principles | (214,539 | ) | — | ||||
Change in unrealized gains on securities not other-than-temporarily impaired | (158,199 | ) | 33,908 | ||||
Change in unrealized gains on other-than-temporarily impaired securities | 11 | 844 | |||||
End of period | 2,694 | 461,906 | |||||
Currency translation adjustments: | |||||||
Beginning of period | (306,880 | ) | (371,586 | ) | |||
Net change in period | (91,656 | ) | 42,982 | ||||
End of period | (398,536 | ) | (328,604 | ) | |||
Total accumulated other comprehensive (loss) income | $ | (395,842 | ) | $ | 133,302 | ||
TREASURY STOCK: | |||||||
Beginning of period | $ | (2,709,386 | ) | $ | (2,688,817 | ) | |
Stock exercised/vested | 6,963 | 1,276 | |||||
Stock repurchased | (6,799 | ) | — | ||||
Stock issued | 688 | 728 | |||||
End of period | $ | (2,708,534 | ) | $ | (2,686,813 | ) | |
NONCONTROLLING INTERESTS: | |||||||
Beginning of period | $ | 39,819 | $ | 33,926 | |||
(Distributions) contributions | (2,162 | ) | 3,695 | ||||
Net income | 1,879 | 1,796 | |||||
Other comprehensive income (loss), net of tax | (26 | ) | 14 | ||||
End of period | $ | 39,510 | $ | 39,431 |
For the Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
CASH FROM OPERATING ACTIVITIES: | |||||||
Net income to common stockholders | $ | 346,472 | $ | 232,451 | |||
Adjustments to reconcile net income to net cash from operating activities: | |||||||
Net realized and unrealized gains on investments | (118,095 | ) | (92,801 | ) | |||
Depreciation and amortization | 56,372 | 44,679 | |||||
Noncontrolling interests | 1,879 | 1,796 | |||||
Investment funds | (53,070 | ) | (35,544 | ) | |||
Stock incentive plans | 19,722 | 22,508 | |||||
Change in: | |||||||
Arbitrage trading account | (7,871 | ) | (2,440 | ) | |||
Premiums and fees receivable | (152,832 | ) | (159,827 | ) | |||
Reinsurance accounts | (77,140 | ) | 34,985 | ||||
Deferred policy acquisition costs | (11,152 | ) | (2,236 | ) | |||
Income taxes | (39,069 | ) | (42,626 | ) | |||
Reserves for losses and loss expenses | 123,582 | 101,781 | |||||
Unearned premiums | 171,468 | 140,399 | |||||
Other | (140,904 | ) | (18,267 | ) | |||
Net cash from operating activities | 119,362 | 224,858 | |||||
CASH USED IN INVESTING ACTIVITIES: | |||||||
Proceeds from sale of fixed maturity securities | 2,773,554 | 2,069,718 | |||||
Proceeds from sale of equity securities | 284,204 | 89,340 | |||||
(Contributions to) distributions from investment funds | (4,996 | ) | 49,594 | ||||
Proceeds from maturities and prepayments of fixed maturity securities | 1,305,805 | 888,423 | |||||
Purchase of fixed maturity securities | (4,062,901 | ) | (3,164,892 | ) | |||
Purchase of equity securities | (87,059 | ) | (787 | ) | |||
Real estate purchased | (419,021 | ) | (109,846 | ) | |||
Change in loans receivable | (16,310 | ) | 10,734 | ||||
Net additions to property, furniture and equipment | (29,704 | ) | (89,715 | ) | |||
Change in balances due to security brokers | 46,641 | 104,463 | |||||
Payment for business purchased net of cash acquired | (6,637 | ) | (71,346 | ) | |||
Net cash used in investing activities | (216,424 | ) | (224,314 | ) | |||
CASH FROM (USED IN) FINANCING ACTIVITIES: | |||||||
Repayment of senior notes and other debt | (23 | ) | (1,475 | ) | |||
Net proceeds from issuance of debt | 200,838 | — | |||||
Cash dividends to common stockholders | (77,873 | ) | (15,758 | ) | |||
Purchase of common treasury shares | (6,799 | ) | — | ||||
Other, net | (1,763 | ) | (1,260 | ) | |||
Net cash from (used in) financing activities | 114,380 | (18,493 | ) | ||||
Net impact on cash due to change in foreign exchange rates | (56,587 | ) | 11,018 | ||||
Net change in cash and cash equivalents | (39,269 | ) | (6,931 | ) | |||
Cash and cash equivalents at beginning of year | 950,471 | 795,285 | |||||
Cash and cash equivalents at end of period | $ | 911,202 | $ | 788,354 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | |||||||
Basic | 126,517 | 125,334 | 126,446 | 123,623 | |||||||
Diluted | 128,339 | 128,601 | 128,189 | 128,546 |
(In thousands) | Unrealized Investment Gains (Losses) | Currency Translation Adjustments | Accumulated Other Comprehensive (Loss) Income | ||||||||
As of and for the six months ended June 30, 2018 | |||||||||||
Changes in AOCI | |||||||||||
Beginning of period | $ | 375,421 | $ | (306,880 | ) | $ | 68,541 | ||||
Cumulative effect adjustment resulting from changes in accounting principles | (214,539 | ) | — | (214,539 | ) | ||||||
Restated beginning of period | 160,882 | (306,880 | ) | (145,998 | ) | ||||||
Other comprehensive loss before reclassifications | (147,632 | ) | (91,656 | ) | (239,288 | ) | |||||
Amounts reclassified from AOCI | (10,582 | ) | — | (10,582 | ) | ||||||
Other comprehensive loss | (158,214 | ) | (91,656 | ) | (249,870 | ) | |||||
Unrealized investment loss related to noncontrolling interest | 26 | — | 26 | ||||||||
End of period | $ | 2,694 | $ | (398,536 | ) | $ | (395,842 | ) | |||
Amounts reclassified from AOCI | |||||||||||
Pre-tax | $ | (13,395 | ) | (1) | $ | — | $ | (13,395 | ) | ||
Tax effect | 2,813 | (2) | — | 2,813 | |||||||
After-tax amounts reclassified | $ | (10,582 | ) | $ | — | $ | (10,582 | ) | |||
Other comprehensive loss | |||||||||||
Pre-tax | $ | (201,336 | ) | $ | (91,656 | ) | $ | (292,992 | ) | ||
Tax effect | 43,122 | — | 43,122 | ||||||||
Other comprehensive loss | $ | (158,214 | ) | $ | (91,656 | ) | $ | (249,870 | ) | ||
As of and for the three months ended June 30, 2018 | |||||||||||
Changes in AOCI | |||||||||||
Beginning of period | $ | 35,099 | $ | (294,081 | ) | $ | (258,982 | ) | |||
Other comprehensive loss before reclassifications | (29,443 | ) | (104,455 | ) | (133,898 | ) | |||||
Amounts reclassified from AOCI | (2,999 | ) | — | (2,999 | ) | ||||||
Other comprehensive loss | (32,442 | ) | (104,455 | ) | (136,897 | ) | |||||
Unrealized investment loss related to noncontrolling interest | 37 | — | 37 | ||||||||
End of period | $ | 2,694 | $ | (398,536 | ) | $ | (395,842 | ) | |||
Amounts reclassified from AOCI | |||||||||||
Pre-tax | $ | (3,796 | ) | (1) | $ | — | $ | (3,796 | ) | ||
Tax effect | 797 | (2) | — | 797 | |||||||
After-tax amounts reclassified | $ | (2,999 | ) | $ | — | $ | (2,999 | ) | |||
Other comprehensive loss | |||||||||||
Pre-tax | $ | (40,488 | ) | $ | (104,455 | ) | $ | (144,943 | ) | ||
Tax effect | 8,046 | — | 8,046 | ||||||||
Other comprehensive loss | $ | (32,442 | ) | $ | (104,455 | ) | $ | (136,897 | ) |
(In thousands) | Unrealized Investment Gains (Losses) | Currency Translation Adjustments | Accumulated Other Comprehensive (Loss) Income | ||||||||
As of and for the six months ended June 30, 2017 | |||||||||||
Changes in AOCI | |||||||||||
Beginning of period | $ | 427,154 | $ | (371,586 | ) | $ | 55,568 | ||||
Other comprehensive income before reclassifications | 89,309 | 42,982 | 132,291 | ||||||||
Amounts reclassified from AOCI | (54,543 | ) | — | (54,543 | ) | ||||||
Other comprehensive income | 34,766 | 42,982 | 77,748 | ||||||||
Unrealized investment gain related to noncontrolling interest | (14 | ) | — | (14 | ) | ||||||
End of period | $ | 461,906 | $ | (328,604 | ) | $ | 133,302 | ||||
Amounts reclassified from AOCI | |||||||||||
Pre-tax | $ | (83,912 | ) | (1) | $ | — | $ | (83,912 | ) | ||
Tax effect | 29,369 | (2) | — | 29,369 | |||||||
After-tax amounts reclassified | $ | (54,543 | ) | $ | — | $ | (54,543 | ) | |||
Other comprehensive income | |||||||||||
Pre-tax | $ | 58,711 | $ | 42,982 | $ | 101,693 | |||||
Tax effect | (23,945 | ) | — | (23,945 | ) | ||||||
Other comprehensive income | $ | 34,766 | $ | 42,982 | $ | 77,748 | |||||
As of and for the three months ended June 30, 2017 | |||||||||||
Changes in AOCI | |||||||||||
Beginning of period | $ | 418,342 | $ | (348,851 | ) | $ | 69,491 | ||||
Other comprehensive income before reclassifications | 69,315 | 20,247 | 89,562 | ||||||||
Amounts reclassified from AOCI | (25,718 | ) | — | (25,718 | ) | ||||||
Other comprehensive income | 43,597 | 20,247 | 63,844 | ||||||||
Unrealized investment gain related to noncontrolling interest | (33 | ) | — | (33 | ) | ||||||
End of period | $ | 461,906 | $ | (328,604 | ) | $ | 133,302 | ||||
Amounts reclassified from AOCI | |||||||||||
Pre-tax | $ | (39,566 | ) | (1) | $ | — | $ | (39,566 | ) | ||
Tax effect | 13,848 | (2) | — | 13,848 | |||||||
After-tax amounts reclassified | $ | (25,718 | ) | $ | — | $ | (25,718 | ) | |||
Other comprehensive income | |||||||||||
Pre-tax | $ | 68,282 | $ | 20,247 | $ | 88,529 | |||||
Tax effect | (24,685 | ) | — | (24,685 | ) | ||||||
Other comprehensive income | $ | 43,597 | $ | 20,247 | $ | 63,844 |
(In thousands) | Amortized Cost | Gross Unrealized | Fair Value | Carrying Value | |||||||||||||||
Gains | Losses | ||||||||||||||||||
June 30, 2018 | |||||||||||||||||||
Held to maturity: | |||||||||||||||||||
State and municipal | $ | 67,049 | $ | 11,828 | $ | — | $ | 78,877 | $ | 67,049 | |||||||||
Residential mortgage-backed | 12,037 | 835 | — | 12,872 | 12,037 | ||||||||||||||
Total held to maturity | 79,086 | 12,663 | — | 91,749 | 79,086 | ||||||||||||||
Available for sale: | |||||||||||||||||||
U.S. government and government agency | 482,639 | 5,257 | (6,263 | ) | 481,633 | 481,633 | |||||||||||||
State and municipal: | |||||||||||||||||||
Special revenue | 2,529,100 | 32,331 | (25,828 | ) | 2,535,603 | 2,535,603 | |||||||||||||
State general obligation | 339,685 | 10,749 | (1,814 | ) | 348,620 | 348,620 | |||||||||||||
Pre-refunded | 429,119 | 18,829 | (103 | ) | 447,845 | 447,845 | |||||||||||||
Corporate backed | 325,752 | 7,278 | (1,643 | ) | 331,387 | 331,387 | |||||||||||||
Local general obligation | 387,745 | 16,485 | (2,831 | ) | 401,399 | 401,399 | |||||||||||||
Total state and municipal | 4,011,401 | 85,672 | (32,219 | ) | 4,064,854 | 4,064,854 | |||||||||||||
Mortgage-backed securities: | |||||||||||||||||||
Residential (1) | 1,116,207 | 5,206 | (26,083 | ) | 1,095,330 | 1,095,330 | |||||||||||||
Commercial | 368,000 | 969 | (5,787 | ) | 363,182 | 363,182 | |||||||||||||
Total mortgage-backed securities | 1,484,207 | 6,175 | (31,870 | ) | 1,458,512 | 1,458,512 | |||||||||||||
Asset-backed | 2,356,736 | 11,263 | (13,084 | ) | 2,354,915 | 2,354,915 | |||||||||||||
Corporate: | |||||||||||||||||||
Industrial | 2,333,914 | 19,159 | (44,380 | ) | 2,308,693 | 2,308,693 | |||||||||||||
Financial | 1,355,554 | 16,775 | (19,375 | ) | 1,352,954 | 1,352,954 | |||||||||||||
Utilities | 273,223 | 8,004 | (6,201 | ) | 275,026 | 275,026 | |||||||||||||
Other | 41,779 | 2 | (265 | ) | 41,516 | 41,516 | |||||||||||||
Total corporate | 4,004,470 | 43,940 | (70,221 | ) | 3,978,189 | 3,978,189 | |||||||||||||
Foreign | 767,417 | 39,993 | (5,870 | ) | 801,540 | 801,540 | |||||||||||||
Total available for sale | 13,106,870 | 192,300 | (159,527 | ) | 13,139,643 | 13,139,643 | |||||||||||||
Total investments in fixed maturity securities | $ | 13,185,956 | $ | 204,963 | $ | (159,527 | ) | $ | 13,231,392 | $ | 13,218,729 |
(In thousands) | Amortized Cost | Gross Unrealized | Fair Value | Carrying Value | |||||||||||||||
Gains | Losses | ||||||||||||||||||
December 31, 2017 | |||||||||||||||||||
Held to maturity: | |||||||||||||||||||
State and municipal | $ | 65,882 | $ | 14,499 | $ | — | $ | 80,381 | $ | 65,882 | |||||||||
Residential mortgage-backed | 13,450 | 1,227 | — | 14,677 | 13,450 | ||||||||||||||
Total held to maturity | 79,332 | 15,726 | — | 95,058 | 79,332 | ||||||||||||||
Available for sale: | |||||||||||||||||||
U.S. government and government agency | 372,748 | 8,824 | (3,832 | ) | 377,740 | 377,740 | |||||||||||||
State and municipal: | |||||||||||||||||||
Special revenue | 2,663,245 | 53,512 | (10,027 | ) | 2,706,730 | 2,706,730 | |||||||||||||
State general obligation | 439,358 | 16,087 | (711 | ) | 454,734 | 454,734 | |||||||||||||
Pre-refunded | 436,241 | 22,701 | (9 | ) | 458,933 | 458,933 | |||||||||||||
Corporate backed | 375,268 | 10,059 | (860 | ) | 384,467 | 384,467 | |||||||||||||
Local general obligation | 417,955 | 23,242 | (967 | ) | 440,230 | 440,230 | |||||||||||||
Total state and municipal | 4,332,067 | 125,601 | (12,574 | ) | 4,445,094 | 4,445,094 | |||||||||||||
Mortgage-backed securities: | |||||||||||||||||||
Residential (1) | 1,043,629 | 9,304 | (13,547 | ) | 1,039,386 | 1,039,386 | |||||||||||||
Commercial | 261,652 | 1,521 | (2,628 | ) | 260,545 | 260,545 | |||||||||||||
Total mortgage-backed securities | 1,305,281 | 10,825 | (16,175 | ) | 1,299,931 | 1,299,931 | |||||||||||||
Asset-backed | 2,111,132 | 11,024 | (10,612 | ) | 2,111,544 | 2,111,544 | |||||||||||||
Corporate: | |||||||||||||||||||
Industrial | 2,574,400 | 52,210 | (7,718 | ) | 2,618,892 | 2,618,892 | |||||||||||||
Financial | 1,402,161 | 37,744 | (5,138 | ) | 1,434,767 | 1,434,767 | |||||||||||||
Utilities | 284,886 | 11,316 | (1,248 | ) | 294,954 | 294,954 | |||||||||||||
Other | 40,560 | 5 | (66 | ) | 40,499 | 40,499 | |||||||||||||
Total corporate | 4,302,007 | 101,275 | (14,170 | ) | 4,389,112 | 4,389,112 | |||||||||||||
Foreign | 819,345 | 32,018 | (2,866 | ) | 848,497 | 848,497 | |||||||||||||
Total available for sale | 13,242,580 | 289,567 | (60,229 | ) | 13,471,918 | 13,471,918 | |||||||||||||
Total investments in fixed maturity securities | $ | 13,321,912 | $ | 305,293 | $ | (60,229 | ) | $ | 13,566,976 | $ | 13,551,250 |
(In thousands) | Amortized Cost | Fair Value | |||||
Due in one year or less | $ | 841,253 | $ | 849,860 | |||
Due after one year through five years | 4,392,395 | 4,428,769 | |||||
Due after five years through ten years | 3,042,177 | 3,074,332 | |||||
Due after ten years | 3,413,887 | 3,407,047 | |||||
Mortgage-backed securities | 1,496,244 | 1,471,384 | |||||
Total | $ | 13,185,956 | $ | 13,231,392 |
(In thousands) | Cost | Gross Unrealized (1) | Fair Value | Carrying Value | |||||||||||||||
Gains | Losses | ||||||||||||||||||
June 30, 2018 | |||||||||||||||||||
Common stocks | $ | 126,453 | $ | 170,313 | $ | (8,739 | ) | $ | 288,027 | $ | 288,027 | ||||||||
Preferred stocks | 124,150 | 61,807 | (1,595 | ) | 184,362 | 184,362 | |||||||||||||
Total | $ | 250,603 | $ | 232,120 | $ | (10,334 | ) | $ | 472,389 | $ | 472,389 | ||||||||
December 31, 2017 | |||||||||||||||||||
Common stocks | $ | 81,855 | $ | 272,309 | $ | (1,960 | ) | $ | 352,204 | $ | 352,204 | ||||||||
Preferred stocks | 124,150 | 102,890 | (2,597 | ) | 224,443 | 224,443 | |||||||||||||
Total | $ | 206,005 | $ | 375,199 | $ | (4,557 | ) | $ | 576,647 | $ | 576,647 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Investment income earned on: | |||||||||||||||
Fixed maturity securities, including cash and cash equivalents and loans receivable | $ | 129,665 | $ | 116,796 | $ | 252,911 | $ | 229,142 | |||||||
Investment funds | 12,716 | 8,895 | 53,070 | 35,544 | |||||||||||
Arbitrage trading account | 8,333 | 5,457 | 13,524 | 11,817 | |||||||||||
Real estate | 3,174 | 5,286 | 9,742 | 9,852 | |||||||||||
Equity securities | 559 | 602 | 1,205 | 1,241 | |||||||||||
Gross investment income | 154,447 | 137,036 | 330,452 | 287,596 | |||||||||||
Investment expense | (670 | ) | (1,772 | ) | (2,157 | ) | (3,473 | ) | |||||||
Net investment income | $ | 153,777 | $ | 135,264 | $ | 328,295 | $ | 284,123 |
Carrying Value as of | Income (Loss) from Investment Funds | ||||||||||||||
June 30, | December 31, | For the Six Months Ended June 30, | |||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Real estate | $ | 622,796 | $ | 606,995 | $ | 35,826 | $ | 19,518 | |||||||
Energy | 76,406 | 82,882 | (1,256 | ) | (8,639 | ) | |||||||||
Other funds | 509,384 | 465,800 | 18,500 | 24,665 | |||||||||||
Total | $ | 1,208,586 | $ | 1,155,677 | $ | 53,070 | $ | 35,544 |
Carrying Value | |||||||
June 30, | December 31, | ||||||
(In thousands) | 2018 | 2017 | |||||
Properties in operation | $ | 767,882 | $ | 451,691 | |||
Properties under development | 1,115,740 | 1,017,910 | |||||
Total | $ | 1,883,622 | $ | 1,469,601 |
(In thousands) | June 30, 2018 | December 31, 2017 | |||||
Amortized cost (net of valuation allowance): | |||||||
Real estate loans | $ | 62,986 | $ | 66,057 | |||
Commercial loans | 35,102 | 13,627 | |||||
Total | $ | 98,088 | $ | 79,684 | |||
Fair value: | |||||||
Real estate loans | $ | 63,796 | $ | 66,917 | |||
Commercial loans | 36,604 | 15,130 | |||||
Total | $ | 100,400 | $ | 82,047 | |||
Valuation allowance: | |||||||
Specific | $ | 1,200 | $ | 1,200 | |||
General | 2,183 | 2,183 | |||||
Total | $ | 3,383 | $ | 3,383 | |||
For the Three Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Change in valuation allowance | $ | — | $ | — | |||
For the Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Decrease in valuation allowance | $ | — | $ | (14 | ) |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net realized and unrealized gains (losses) on investments in earnings | |||||||||||||||
Fixed maturity securities: | |||||||||||||||
Gains | $ | 7,921 | $ | 7,427 | $ | 21,260 | $ | 13,032 | |||||||
Losses | (4,125 | ) | — | (7,865 | ) | (3,965 | ) | ||||||||
Equity securities (1): | |||||||||||||||
Net realized gains on investment sales | 119,422 | 32,139 | 241,743 | 74,846 | |||||||||||
Change in unrealized gains | (54,652 | ) | — | (148,857 | ) | — | |||||||||
Investment funds | (353 | ) | (112 | ) | (234 | ) | 1,155 | ||||||||
Real estate | (402 | ) | (364 | ) | 7,596 | 2,936 | |||||||||
Loans receivable | 1 | — | 2,059 | — | |||||||||||
Other | 1,819 | 1,363 | 2,393 | 4,797 | |||||||||||
Net realized and unrealized gains on investments in earnings before OTTI | 69,631 | 40,453 | 118,095 | 92,801 | |||||||||||
Other-than-temporary impairments | — | — | — | — | |||||||||||
Net realized and unrealized gains on investments in earnings | 69,631 | 40,453 | 118,095 | 92,801 | |||||||||||
Income tax expense | (14,623 | ) | (14,159 | ) | (24,800 | ) | (32,480 | ) | |||||||
After-tax net realized and unrealized gains on investments in earnings | $ | 55,008 | $ | 26,294 | $ | 93,295 | $ | 60,321 |
Change in unrealized investment gains of available for sale securities: | |||||||||||||||
Fixed maturity securities | $ | (36,848 | ) | $ | 56,857 | $ | (196,575 | ) | $ | 94,841 | |||||
Previously impaired fixed maturity securities | (2 | ) | 743 | 11 | 844 | ||||||||||
Equity securities available for sale (2) | — | 6,176 | — | (42,686 | ) | ||||||||||
Investment funds | (3,638 | ) | 4,506 | (4,772 | ) | 5,712 | |||||||||
Total change in unrealized investment gains | (40,488 | ) | 68,282 | (201,336 | ) | 58,711 | |||||||||
Income tax benefit (expense) | 8,118 | (24,713 | ) | 43,194 | (23,973 | ) | |||||||||
Noncontrolling interests | 37 | (5 | ) | 26 | 14 | ||||||||||
After-tax change in unrealized investment gains of available for sale securities | $ | (32,333 | ) | $ | 43,564 | $ | (158,116 | ) | $ | 34,752 |
Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
(In thousands) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||
June 30, 2018 | |||||||||||||||||||||||
U.S. government and government agency | $ | 245,718 | $ | 2,852 | $ | 93,232 | $ | 3,411 | $ | 338,950 | $ | 6,263 | |||||||||||
State and municipal | 1,406,792 | 22,540 | 302,403 | 9,679 | 1,709,195 | 32,219 | |||||||||||||||||
Mortgage-backed securities | 859,133 | 17,171 | 328,074 | 14,699 | 1,187,207 | 31,870 | |||||||||||||||||
Asset-backed securities | 1,538,222 | 12,216 | 160,722 | 868 | 1,698,944 | 13,084 | |||||||||||||||||
Corporate | 2,171,776 | 61,233 | 155,159 | 8,988 | 2,326,935 | 70,221 | |||||||||||||||||
Foreign government | 181,036 | 4,754 | 67,869 | 1,116 | 248,905 | 5,870 | |||||||||||||||||
Fixed maturity securities | $ | 6,402,677 | $ | 120,766 | $ | 1,107,459 | $ | 38,761 | $ | 7,510,136 | $ | 159,527 | |||||||||||
December 31, 2017 | |||||||||||||||||||||||
U.S. government and government agency | $ | 92,167 | $ | 1,491 | $ | 72,055 | $ | 2,341 | $ | 164,222 | $ | 3,832 | |||||||||||
State and municipal | 735,972 | 5,944 | 345,755 | 6,630 | 1,081,727 | 12,574 | |||||||||||||||||
Mortgage-backed securities | 480,435 | 5,110 | 373,956 | 11,065 | 854,391 | 16,175 | |||||||||||||||||
Asset-backed securities | 1,127,309 | 8,298 | 167,412 | 2,314 | 1,294,721 | 10,612 | |||||||||||||||||
Corporate | 1,103,747 | 8,224 | 170,858 | 5,946 | 1,274,605 | 14,170 | |||||||||||||||||
Foreign government | 244,139 | 2,615 | 25,824 | 251 | 269,963 | 2,866 | |||||||||||||||||
Fixed maturity securities | $ | 3,783,769 | $ | 31,682 | $ | 1,155,860 | $ | 28,547 | $ | 4,939,629 | $ | 60,229 |
($ in thousands) | Number of Securities | Aggregate Fair Value | Gross Unrealized Loss | |||||||
Corporate | 13 | $ | 97,985 | $ | 4,199 | |||||
Foreign government | 12 | 51,383 | 2,773 | |||||||
Asset-backed securities | 3 | 268 | 104 | |||||||
Mortgage-backed securities | 4 | 3,477 | 28 | |||||||
State and municipal | 1 | 3,622 | 2 | |||||||
Total | 33 | $ | 156,735 | $ | 7,106 |
(In thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||
June 30, 2018 | |||||||||||||||
Assets: | |||||||||||||||
Fixed maturity securities available for sale: | |||||||||||||||
U.S. government and government agency | $ | 481,633 | $ | — | $ | 481,633 | $ | — | |||||||
State and municipal | 4,064,854 | — | 4,064,854 | — | |||||||||||
Mortgage-backed securities | 1,458,512 | — | 1,458,512 | — | |||||||||||
Asset-backed securities | 2,354,915 | — | 2,354,814 | 101 | |||||||||||
Corporate | 3,978,189 | — | 3,978,189 | — | |||||||||||
Foreign government | 801,540 | — | 801,540 | — | |||||||||||
Total fixed maturity securities available for sale | 13,139,643 | — | 13,139,542 | 101 | |||||||||||
Equity securities: | |||||||||||||||
Common stocks | 288,027 | 279,102 | — | 8,925 | |||||||||||
Preferred stocks | 184,362 | — | 173,518 | 10,844 | |||||||||||
Total equity securities | 472,389 | 279,102 | 173,518 | 19,769 | |||||||||||
Arbitrage trading account | 721,088 | 446,901 | 274,187 | — | |||||||||||
Total | $ | 14,333,120 | $ | 726,003 | $ | 13,587,247 | $ | 19,870 | |||||||
Liabilities: | |||||||||||||||
Trading account securities sold but not yet purchased | $ | 90,281 | $ | 90,281 | $ | — | $ | — | |||||||
December 31, 2017 | |||||||||||||||
Assets: | |||||||||||||||
Fixed maturity securities available for sale: | |||||||||||||||
U.S. government and government agency | $ | 377,740 | $ | — | $ | 377,740 | $ | — | |||||||
State and municipal | 4,445,094 | — | 4,445,094 | — | |||||||||||
Mortgage-backed securities | 1,299,931 | — | 1,299,931 | — | |||||||||||
Asset-backed securities | 2,111,544 | — | 2,111,372 | 172 | |||||||||||
Corporate | 4,389,112 | — | 4,389,112 | — | |||||||||||
Foreign government | 848,497 | — | 848,497 | — | |||||||||||
Total fixed maturity securities available for sale | 13,471,918 | — | 13,471,746 | 172 | |||||||||||
Equity securities: | |||||||||||||||
Common stocks | 352,204 | 342,834 | — | 9,370 | |||||||||||
Preferred stocks | 224,443 | — | 213,600 | 10,843 | |||||||||||
Total equity securities | 576,647 | 342,834 | 213,600 | 20,213 | |||||||||||
Arbitrage trading account | 617,649 | 471,420 | 146,229 | — | |||||||||||
Total | $ | 14,666,214 | $ | 814,254 | $ | 13,831,575 | $ | 20,385 | |||||||
Liabilities: | |||||||||||||||
Trading account securities sold but not yet purchased | $ | 64,358 | $ | 64,358 | $ | — | $ | — |
Gains (Losses) Included in: | ||||||||||||||||||||||||||||||||||||
(In thousands) | Beginning Balance | Earnings (Losses) | Other Comprehensive Income (Loss) | Impairments | Purchases | (Sales) | Paydowns / Maturities | Transfers In / (Out) | Ending Balance | |||||||||||||||||||||||||||
Six Months Ended June 30, 2018 | ||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||
Fixed maturities securities available for sale: | ||||||||||||||||||||||||||||||||||||
Asset-backed securities | $ | 172 | $ | (2 | ) | $ | 46 | $ | — | $ | — | $ | (115 | ) | $ | — | $ | — | $ | 101 | ||||||||||||||||
Total | 172 | (2 | ) | 46 | — | — | (115 | ) | — | — | 101 | |||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||||||||||||
Common stocks | 9,370 | (445 | ) | — | — | — | — | — | — | 8,925 | ||||||||||||||||||||||||||
Preferred stocks | 10,843 | 1 | — | — | — | — | — | — | 10,844 | |||||||||||||||||||||||||||
Total | 20,213 | (444 | ) | — | — | — | — | — | — | 19,769 | ||||||||||||||||||||||||||
Arbitrage trading account | — | (29 | ) | — | — | 3,882 | (11 | ) | — | (3,842 | ) | — | ||||||||||||||||||||||||
Total | $ | 20,385 | $ | (475 | ) | $ | 46 | $ | — | $ | 3,882 | $ | (126 | ) | $ | — | $ | (3,842 | ) | $ | 19,870 | |||||||||||||||
Year Ended December 31, 2017 | ||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||
Fixed maturities securities available for sale: | ||||||||||||||||||||||||||||||||||||
Asset-backed securities | $ | 183 | $ | 3 | $ | 34 | $ | — | $ | — | $ | (48 | ) | $ | — | $ | — | $ | 172 | |||||||||||||||||
Total | 183 | 3 | 34 | — | — | (48 | ) | — | — | 172 | ||||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||||||||||||
Common stocks | 8,754 | — | 616 | — | — | — | — | — | 9,370 | |||||||||||||||||||||||||||
Preferred stocks | 3,662 | 8 | — | — | 7,173 | — | — | — | 10,843 | |||||||||||||||||||||||||||
Total | 12,416 | 8 | 616 | — | 7,173 | — | — | — | 20,213 | |||||||||||||||||||||||||||
Arbitrage trading account | — | 8 | — | — | — | (8 | ) | — | — | — | ||||||||||||||||||||||||||
Total | $ | 12,599 | $ | 19 | $ | 650 | $ | — | $ | 7,173 | $ | (56 | ) | $ | — | $ | — | $ | 20,385 |
June 30, | |||||||
(In thousands) | 2018 | 2017 | |||||
Net reserves at beginning of year | $ | 10,056,914 | $ | 9,590,265 | |||
Net provision for losses and loss expenses: | |||||||
Claims occurring during the current year (1) | 1,916,140 | 1,926,394 | |||||
Decrease in estimates for claims occurring in prior years (2) (3) | (246 | ) | (6,459 | ) | |||
Loss reserve discount accretion | 20,962 | 24,367 | |||||
Total | 1,936,856 | 1,944,302 | |||||
Net payments for claims: | |||||||
Current year | 316,567 | 315,437 | |||||
Prior year | 1,527,522 | 1,432,828 | |||||
Total | 1,844,089 | 1,748,265 | |||||
Foreign currency translation | (72,351 | ) | 37,097 | ||||
Net reserves at end of period | 10,077,330 | 9,823,399 | |||||
Ceded reserves at end of period | 1,659,245 | 1,500,868 | |||||
Gross reserves at end of period | $ | 11,736,575 | $ | 11,324,267 |
June 30, 2018 | December 31, 2017 | ||||||||||||||
(In thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||
Assets: | |||||||||||||||
Fixed maturity securities | $ | 13,218,729 | $ | 13,231,392 | $ | 13,551,250 | $ | 13,566,976 | |||||||
Equity securities | 472,389 | 472,389 | 576,647 | 576,647 | |||||||||||
Arbitrage trading account | 721,088 | 721,088 | 617,649 | 617,649 | |||||||||||
Loans receivable | 98,088 | 100,400 | 79,684 | 82,047 | |||||||||||
Cash and cash equivalents | 911,202 | 911,202 | 950,471 | 950,471 | |||||||||||
Trading account receivables from brokers and clearing organizations | 119,628 | 119,628 | 189,280 | 189,280 | |||||||||||
Liabilities: | |||||||||||||||
Due to broker | 62,522 | 62,522 | 15,920 | 15,920 | |||||||||||
Trading account securities sold but not yet purchased | 90,281 | 90,281 | 64,358 | 64,358 | |||||||||||
Subordinated debentures | 907,117 | 929,297 | 728,218 | 769,060 | |||||||||||
Senior notes and other debt | 1,792,055 | 1,918,004 | 1,769,052 | 1,945,313 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Written premiums: | |||||||||||||||
Direct | $ | 1,785,266 | $ | 1,727,014 | $ | 3,572,501 | $ | 3,448,076 | |||||||
Assumed | 162,808 | 160,139 | 354,995 | 375,283 | |||||||||||
Ceded | (323,970 | ) | (322,902 | ) | (638,054 | ) | (612,270 | ) | |||||||
Total net premiums written | $ | 1,624,104 | $ | 1,564,251 | $ | 3,289,442 | $ | 3,211,089 | |||||||
Earned premiums: | |||||||||||||||
Direct | $ | 1,705,277 | $ | 1,666,938 | $ | 3,379,827 | $ | 3,280,302 | |||||||
Assumed | 180,509 | 193,683 | 369,375 | 402,310 | |||||||||||
Ceded | (304,733 | ) | (291,918 | ) | (600,741 | ) | (543,868 | ) | |||||||
Total net premiums earned | $ | 1,581,053 | $ | 1,568,703 | $ | 3,148,461 | $ | 3,138,744 | |||||||
Ceded losses and loss expenses incurred | $ | 161,073 | $ | 142,609 | $ | 400,068 | $ | 177,801 | |||||||
Ceded commissions earned | $ | 65,922 | $ | 57,752 | $ | 132,278 | $ | 114,302 |
($ in thousands) | Units | Fair Value | ||||
2018 | 13,025 | $ | 963 | |||
2017 | 6,020 | $ | 405 |
• | Insurance - predominantly commercial insurance business, including excess and surplus lines, admitted lines and specialty personal lines throughout the United States, as well as insurance business in the United Kingdom, Continental Europe, South America, Canada, Mexico, Scandinavia, Asia and Australia. |
• | Reinsurance - reinsurance business on a facultative and treaty basis, primarily in the United States, the United Kingdom, Continental Europe, Australia, the Asia-Pacific Region and South Africa. |
Revenues | |||||||||||||||||||||||
(In thousands) | Earned Premiums | Investment Income | Other | Total (1) | Pre-Tax Income (Loss) | Net Income (Loss) to Common Stockholders | |||||||||||||||||
Three months ended June 30, 2018 | |||||||||||||||||||||||
Insurance | $ | 1,456,008 | $ | 114,333 | $ | 18,707 | $ | 1,589,048 | $ | 198,052 | $ | 156,200 | |||||||||||
Reinsurance | 125,045 | 22,123 | — | 147,168 | 21,303 | 16,784 | |||||||||||||||||
Corporate, other and eliminations (2) | — | 17,321 | 87,748 | 105,069 | (59,744 | ) | (47,918 | ) | |||||||||||||||
Net realized and unrealized gains on investments | — | — | 69,631 | 69,631 | 69,631 | 55,009 | |||||||||||||||||
Total | $ | 1,581,053 | $ | 153,777 | $ | 176,086 | $ | 1,910,916 | $ | 229,242 | $ | 180,075 | |||||||||||
Three months ended June 30, 2017 | |||||||||||||||||||||||
Insurance | $ | 1,415,586 | $ | 102,719 | $ | 22,984 | $ | 1,541,289 | $ | 186,134 | $ | 124,442 | |||||||||||
Reinsurance | 153,117 | 21,491 | — | 174,608 | 14,771 | 10,324 | |||||||||||||||||
Corporate, other and eliminations (2) | — | 11,054 | 80,645 | 91,699 | (80,397 | ) | (52,056 | ) | |||||||||||||||
Net realized and unrealized gains on investments | — | — | 40,453 | 40,453 | 40,453 | 26,294 | |||||||||||||||||
Total | $ | 1,568,703 | $ | 135,264 | $ | 144,082 | $ | 1,848,049 | $ | 160,961 | $ | 109,004 | |||||||||||
Six Months Ended June 30, 2018 | |||||||||||||||||||||||
Insurance | $ | 2,888,345 | $ | 250,195 | $ | 37,675 | $ | 3,176,215 | $ | 427,080 | $ | 337,826 | |||||||||||
Reinsurance | 260,116 | 46,773 | — | 306,889 | 35,895 | 28,438 | |||||||||||||||||
Corporate, other and eliminations (2) | — | 31,327 | 169,637 | 200,964 | (140,838 | ) | (113,087 | ) | |||||||||||||||
Net realized and unrealized gains on investments | — | — | 118,095 | 118,095 | 118,095 | 93,295 | |||||||||||||||||
Total | $ | 3,148,461 | $ | 328,295 | $ | 325,407 | $ | 3,802,163 | $ | 440,232 | $ | 346,472 | |||||||||||
Six Months Ended June 30, 2017 | |||||||||||||||||||||||
Insurance | $ | 2,828,755 | $ | 214,628 | $ | 41,271 | $ | 3,084,654 | $ | 386,127 | $ | 257,458 | |||||||||||
Reinsurance | 309,989 | 46,269 | — | 356,258 | 19,364 | 13,983 | |||||||||||||||||
Corporate, other and eliminations (2) | — | 23,226 | 161,528 | 184,754 | (153,034 | ) | (99,311 | ) | |||||||||||||||
Net realized and unrealized gains on investments | — | — | 92,801 | 92,801 | 92,801 | 60,321 | |||||||||||||||||
Total | $ | 3,138,744 | $ | 284,123 | $ | 295,600 | $ | 3,718,467 | $ | 345,258 | $ | 232,451 |
(2) | Corporate, other and eliminations represent corporate revenues and expenses that are not allocated to business segments. |
(In thousands) | June 30, 2018 | December 31, 2017 | |||||
Insurance | $ | 19,219,312 | $ | 19,263,193 | |||
Reinsurance | 2,929,066 | 3,169,731 | |||||
Corporate, other and eliminations | 2,472,766 | 1,866,993 | |||||
Consolidated | $ | 24,621,144 | $ | 24,299,917 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Insurance: | |||||||||||||||
Other liability | $ | 474,721 | $ | 460,059 | $ | 938,889 | $ | 911,889 | |||||||
Workers’ compensation | 377,346 | 366,950 | 743,295 | 728,086 | |||||||||||
Short-tail lines (1) | 288,398 | 282,623 | 583,503 | 579,413 | |||||||||||
Commercial automobile | 175,812 | 169,599 | 351,010 | 340,170 | |||||||||||
Professional liability | 139,731 | 136,355 | 271,648 | 269,197 | |||||||||||
Total Insurance | 1,456,008 | 1,415,586 | 2,888,345 | 2,828,755 | |||||||||||
Reinsurance: | |||||||||||||||
Casualty | 86,841 | 93,212 | 177,411 | 187,952 | |||||||||||
Property | 38,204 | 59,905 | 82,705 | 122,037 | |||||||||||
Total Reinsurance | 125,045 | 153,117 | 260,116 | 309,989 | |||||||||||
Total | $ | 1,581,053 | $ | 1,568,703 | $ | 3,148,461 | $ | 3,138,744 |
(In thousands) | Frequency (+/-) | ||||||||||
Severity (+/-) | 1% | 5% | 10% | ||||||||
1% | $ | 79,667 | $ | 239,794 | $ | 439,953 | |||||
5% | 239,794 | 406,263 | 614,349 | ||||||||
10% | 439,953 | 614,349 | 832,344 |
(In thousands) | June 30, 2018 | December 31, 2017 | |||||
Insurance | $ | 8,460,866 | $ | 8,341,622 | |||
Reinsurance | 1,616,464 | 1,715,292 | |||||
Net reserves for losses and loss expenses | 10,077,330 | 10,056,914 | |||||
Ceded reserves for losses and loss expenses | 1,659,245 | 1,613,494 | |||||
Gross reserves for losses and loss expenses | $ | 11,736,575 | $ | 11,670,408 |
(In thousands) | Reported Case Reserves | Incurred But Not Reported | Total | ||||||||
June 30, 2018 | |||||||||||
Other liability | $ | 1,283,692 | $ | 2,285,039 | $ | 3,568,731 | |||||
Workers’ compensation (1) | 1,566,664 | 1,234,109 | 2,800,773 | ||||||||
Professional liability | 299,439 | 614,209 | 913,648 | ||||||||
Commercial automobile | 349,099 | 281,772 | 630,871 | ||||||||
Short-tail lines (2) | 256,649 | 290,194 | 546,843 | ||||||||
Total Insurance | 3,755,543 | 4,705,323 | 8,460,866 | ||||||||
Reinsurance (1) | 873,376 | 743,088 | 1,616,464 | ||||||||
Total | $ | 4,628,919 | $ | 5,448,411 | $ | 10,077,330 | |||||
December 31, 2017 | |||||||||||
Other liability | $ | 1,261,957 | $ | 2,189,596 | $ | 3,451,553 | |||||
Workers’ compensation (1) | 1,543,379 | 1,242,501 | 2,785,880 | ||||||||
Professional liability | 295,269 | 618,107 | 913,376 | ||||||||
Commercial automobile | 364,900 | 269,942 | 634,842 | ||||||||
Short-tail lines (2) | 297,777 | 258,194 | 555,971 | ||||||||
Total Insurance | 3,763,282 | 4,578,340 | 8,341,622 | ||||||||
Reinsurance (1) | 919,497 | 795,795 | 1,715,292 | ||||||||
Total | $ | 4,682,779 | $ | 5,374,135 | $ | 10,056,914 |
(In thousands) | 2018 | 2017 | |||||
Net decrease in prior year loss reserves | $ | 246 | $ | 6,459 | |||
Increase in prior year earned premiums | 19,102 | 17,111 | |||||
Net favorable prior year development | $ | 19,348 | $ | 23,570 |
($ in thousands) | Number of Securities | Aggregate Fair Value | Gross Unrealized Loss | |||||||
Unrealized loss less than 20% of amortized cost | 1,058 | $ | 7,507,563 | $ | 158,780 | |||||
Unrealized loss of 20% or greater of amortized cost: | ||||||||||
Less than twelve months | 2 | 2,570 | 743 | |||||||
Twelve months and longer | 2 | 3 | 4 | |||||||
Total | 1,062 | $ | 7,510,136 | $ | 159,527 |
($ in thousands) | Number of Securities | Aggregate Fair Value | Gross Unrealized Loss | |||||||
Corporate | 13 | $ | 97,985 | $ | 4,199 | |||||
Foreign government | 12 | 51,383 | 2,773 | |||||||
Asset-backed securities | 3 | 268 | 104 | |||||||
Mortgage-backed securities | 4 | 3,477 | 28 | |||||||
State and municipal | 1 | 3,622 | 2 | |||||||
Total | 33 | $ | 156,735 | $ | 7,106 |
($ in thousands) | Carrying Value | Percent of Total | ||||
Pricing source: | ||||||
Independent pricing services | $ | 12,969,064 | 98.7 | % | ||
Syndicate manager | 38,141 | 0.3 | ||||
Directly by the Company based on: | ||||||
Observable data | 132,337 | 1.0 | ||||
Cash flow model | 101 | — | ||||
Total | $ | 13,139,643 | 100.0 | % |
($ in thousands) | 2018 | 2017 | |||||
Insurance: | |||||||
Gross premiums written | $ | 3,659,199 | $ | 3,515,139 | |||
Net premiums written | 3,056,578 | 2,932,303 | |||||
Net premiums earned | 2,888,345 | 2,828,755 | |||||
Loss ratio | 61.1 | % | 61.0 | % | |||
Expense ratio | 32.8 | % | 33.0 | % | |||
GAAP combined ratio | 93.9 | % | 94.0 | % | |||
Reinsurance: | |||||||
Gross premiums written | $ | 268,296 | $ | 308,220 | |||
Net premiums written | 232,864 | 278,786 | |||||
Net premiums earned | 260,116 | 309,989 | |||||
Loss ratio | 66.1 | % | 70.6 | % | |||
Expense ratio | 38.1 | % | 38.1 | % | |||
GAAP combined ratio | 104.2 | % | 108.7 | % | |||
Consolidated: | |||||||
Gross premiums written | $ | 3,927,495 | $ | 3,823,359 | |||
Net premiums written | 3,289,442 | 3,211,089 | |||||
Net premiums earned | 3,148,461 | 3,138,744 | |||||
Loss ratio | 61.5 | % | 61.9 | % | |||
Expense ratio | 33.3 | % | 33.5 | % | |||
GAAP combined ratio | 94.8 | % | 95.4 | % |
(In thousands, except per share data) | 2018 | 2017 | |||||
Net income to common stockholders | $ | 346,472 | $ | 232,451 | |||
Weighted average diluted shares | 128,189 | 128,546 | |||||
Net income per diluted share | $ | 2.70 | $ | 1.81 |
• | Insurance - gross premiums increased 4% to $3,659 million in 2018 from $3,515 million in 2017. Gross premiums increased $67 million (6%) for other liability, $41 million (5%) for short-tail lines, $36 million (10%) for professional liability, and $27 million (7%) for commercial auto and decreased $27 million (3%) for workers' compensation. |
• | Reinsurance - gross premiums decreased 13% to $268 million in 2018 from $308 million in 2017. Gross premiums decreased $21 million (19%) for property lines and $19 million (10%) for casualty lines. |
Amount | Average Annualized Yield | ||||||||||||
($ in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||
Fixed maturity securities, including cash and cash equivalents and loans receivable | $ | 252,911 | $ | 229,142 | 3.5 | % | 3.3 | % | |||||
Investment funds | 53,070 | 35,544 | 8.9 | 5.7 | |||||||||
Arbitrage trading account | 13,524 | 11,817 | 4.1 | 4.3 | |||||||||
Real estate | 9,742 | 9,852 | 1.1 | 1.6 | |||||||||
Equity securities | 1,205 | 1,241 | 1.1 | 1.2 | |||||||||
Gross investment income | 330,452 | 287,596 | 3.6 | 3.3 | |||||||||
Investment expenses | (2,157 | ) | (3,473 | ) | — | — | |||||||
Total | $ | 328,295 | $ | 284,123 | 3.6 | % | 3.3 | % |
• | Insurance - The loss ratio was 61.1% in 2018 and 61.0% in 2017. Catastrophe losses were $20 million in 2018 compared with $47 million in 2017. Favorable prior year reserve development was $26 million in 2018 and $49 million in 2017. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.3 points to 61.3% in 2018 from 61.0% in 2017. |
• | Reinsurance - The loss ratio of 66.1% in 2018 was 4.5 points lower than the loss ratio of 70.6% in 2017. Catastrophe losses were $1 million in both 2018 and 2017. Adverse prior year reserve development was $7 million in 2018 and $26 million in 2017. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.9 points to 63.0% in 2018 from 62.1% in 2017. |
($ in thousands) | 2018 | 2017 | |||||
Policy acquisition and insurance operating expenses | $ | 1,047,093 | $ | 1,051,116 | |||
Insurance service expenses | 63,702 | 64,856 | |||||
Net foreign currency (gains) losses | (4,767 | ) | 12,477 | ||||
Other costs and expenses | 97,553 | 91,883 | |||||
Total | $ | 1,203,581 | $ | 1,220,332 |
($ in thousands) | 2018 | 2017 | |||||
Insurance: | |||||||
Gross premiums written | $ | 1,821,228 | $ | 1,745,734 | |||
Net premiums written | 1,513,526 | 1,438,169 | |||||
Net premiums earned | 1,456,008 | 1,415,586 | |||||
Loss ratio | 61.5 | % | 61.1 | % | |||
Expense ratio | 32.9 | % | 33.0 | % | |||
GAAP combined ratio | 94.4 | % | 94.1 | % | |||
Reinsurance: | |||||||
Gross premiums written | $ | 126,846 | $ | 141,418 | |||
Net premiums written | 110,578 | 126,082 | |||||
Net premiums earned | 125,045 | 153,117 | |||||
Loss ratio | 62.0 | % | 65.2 | % | |||
Expense ratio | 38.7 | % | 39.2 | % | |||
GAAP combined ratio | 100.7 | % | 104.4 | % | |||
Consolidated: | |||||||
Gross premiums written | $ | 1,948,074 | $ | 1,887,152 | |||
Net premiums written | 1,624,104 | 1,564,251 | |||||
Net premiums earned | 1,581,053 | 1,568,703 | |||||
Loss ratio | 61.6 | % | 61.5 | % | |||
Expense ratio | 33.3 | % | 33.6 | % | |||
GAAP combined ratio | 94.9 | % | 95.1 | % |
(In thousands, except per share data) | 2018 | 2017 | |||||
Net income to common stockholders | $ | 180,075 | $ | 109,004 | |||
Weighted average diluted shares | 128,339 | 128,601 | |||||
Net income per diluted share | $ | 1.40 | $ | 0.85 |
• | Insurance - gross premiums increased 4% to $1,821million in 2018 from $1,746 million in 2017. Gross premiums increased $31 million (6%) for other liability, $25 million (6%) for short-tail lines, $16 million (9%) for professional liability, and $15 million (9%) for commercial auto and decreased $12 million (3%) for workers' compensation. |
• | Reinsurance - gross premiums decreased 10% to $127 million in 2018 from $141 million in 2017. Gross premiums decreased $8 million (8%) for casualty lines and $6 million (14%) for property lines. |
Amount | Average Annualized Yield | ||||||||||||
($ in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||
Fixed maturity securities, including cash and cash equivalents and loans receivable | $ | 129,665 | $ | 116,796 | 3.6 | % | 3.3 | % | |||||
Investment funds | 12,716 | 8,895 | 4.2 | 2.9 | |||||||||
Arbitrage trading account | 8,333 | 5,457 | 5.0 | 3.4 | |||||||||
Real estate | 3,174 | 5,286 | 0.7 | 1.7 | |||||||||
Equity securities | 559 | 602 | 1.0 | 1.2 | |||||||||
Gross investment income | 154,447 | 137,036 | 3.4 | 3.2 | |||||||||
Investment expenses | (670 | ) | (1,772 | ) | — | — | |||||||
Total | $ | 153,777 | $ | 135,264 | 3.4 | % | 3.1 | % |
• | Insurance - The loss ratio was 61.5% in 2018 and 61.1% in 2017. Catastrophe losses were $13 million in 2018 compared with $33 million in 2017. Favorable prior year reserve development was $10 million in 2018 and $23 million in 2017. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.9 points to 61.3% in 2018 from 60.4% in 2017. |
• | Reinsurance - The loss ratio of 62.0% in 2018 was 3.2 points lower than the loss ratio of 65.2% in 2017. Catastrophe losses were $1 million in both 2018 and 2017. Adverse prior year reserve development was $3 million in 2018 and $2 million in 2017. The loss ratio excluding catastrophe losses and prior year reserve development decreased 4.5 points to 59.0% in 2018 from 63.5% in 2017. |
($ in thousands) | 2018 | 2017 | |||||
Policy acquisition and insurance operating expenses | $ | 526,862 | $ | 527,707 | |||
Insurance service expenses | 30,990 | 34,923 | |||||
Net foreign currency (gains) losses | (18,251 | ) | 6,968 | ||||
Other costs and expenses | 53,541 | 47,034 | |||||
Total | $ | 593,142 | $ | 616,632 |
($ in thousands) | Carrying Value | Percent of Total | ||||
Fixed maturity securities: | ||||||
U.S. government and government agencies | $ | 481,633 | 2.6 | % | ||
State and municipal: | ||||||
Special revenue | 2,554,685 | 13.8 | ||||
Pre-refunded (1) | 453,704 | 2.5 | ||||
Local general obligation | 406,327 | 2.2 | ||||
State general obligation | 385,800 | 2.1 | ||||
Corporate backed | 331,387 | 1.8 | ||||
Total state and municipal | 4,131,903 | 22.4 | ||||
Mortgage-backed securities: | ||||||
Agency | 874,125 | 4.7 | ||||
Commercial | 363,182 | 2.0 | ||||
Residential-Prime | 205,996 | 1.1 | ||||
Residential-Alt A | 27,246 | 0.1 | ||||
Total mortgage-backed securities | 1,470,549 | 7.9 | ||||
Asset-backed securities | 2,354,915 | 12.7 | ||||
Corporate: | ||||||
Industrial | 2,308,693 | 12.5 | ||||
Financial | 1,352,954 | 7.3 | ||||
Utilities | 275,026 | 1.5 | ||||
Other | 41,516 | 0.2 | ||||
Total corporate | 3,978,189 | 21.5 | ||||
Foreign government and foreign government agencies | 801,540 | 4.3 | ||||
Total fixed maturity securities | 13,218,729 | 71.4 | ||||
Equity securities: | ||||||
Common stocks | 288,027 | 1.6 | ||||
Preferred stocks | 184,362 | 1.0 | ||||
Total equity securities | 472,389 | 2.6 | ||||
Real estate | 1,883,622 | 10.2 | ||||
Investment funds | 1,208,586 | 6.5 | ||||
Cash and cash equivalents | 911,202 | 4.9 | ||||
Arbitrage trading account | 721,088 | 3.9 | ||||
Loans receivable | 98,088 | 0.5 | ||||
Total investments | $ | 18,513,704 | 100.0 | % |
Number | ||
(31.1) | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/ 15d-14(a). | |
(31.2) | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/ 15d-14(a). | |
(32.1) | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
W. R. BERKLEY CORPORATION | ||
Date: | August 6, 2018 | /s/ W. Robert Berkley, Jr. |
W. Robert Berkley, Jr. | ||
President and Chief Executive Officer | ||
Date: | August 6, 2018 | /s/ Richard M. Baio |
Richard M. Baio | ||
Senior Vice President - Chief Financial Officer and Treasurer |
/s/ W. Robert Berkley, Jr. | |
W. Robert Berkley, Jr. | |
President and Chief Executive Officer |
/s/ Richard M. Baio | |
Richard M. Baio | |
Senior Vice President — Chief Financial Officer and Treasurer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ W. Robert Berkley, Jr. |
W. Robert Berkley, Jr. |
President and Chief Executive Officer |
/s/ Richard M. Baio |
Richard M. Baio |
Senior Vice President — Chief Financial Officer and Treasurer |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 31, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | BERKLEY W R CORP | |
Entity Central Index Key | 0000011544 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 121,809,298 |
Consolidated Balance Sheets Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollar per share) | $ 0.2 | $ 0.2 |
Common shares authorized | 500,000,000 | 500,000,000 |
Common shares issued | 121,716,402 | 121,514,852 |
Common shares outstanding | 121,716,402 | 121,514,852 |
Treasury stock issued at cost | 113,401,516 | 113,603,066 |
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
REVENUES: | ||||
Net premiums written | $ 1,624,104 | $ 1,564,251 | $ 3,289,442 | $ 3,211,089 |
Change in net unearned premiums | (43,051) | 4,452 | (140,981) | (72,345) |
Net premiums earned | 1,581,053 | 1,568,703 | 3,148,461 | 3,138,744 |
Net investment income | 153,777 | 135,264 | 328,295 | 284,123 |
Net realized and unrealized gains on investments | 69,631 | 40,453 | 118,095 | 92,801 |
Revenues from non-insurance businesses | 76,698 | 69,857 | 146,869 | 135,247 |
Insurance service fees | 29,719 | 33,584 | 60,393 | 66,864 |
Other income | 38 | 188 | 50 | 688 |
Total revenues | 1,910,916 | 1,848,049 | 3,802,163 | 3,718,467 |
OPERATING COSTS AND EXPENSES: | ||||
Losses and loss expenses | 973,636 | 964,698 | 1,936,856 | 1,944,302 |
Other operating costs and expenses | 593,142 | 616,632 | 1,203,581 | 1,220,332 |
Expenses from non-insurance businesses | 75,191 | 68,959 | 144,734 | 134,978 |
Interest expense | 39,705 | 36,799 | 76,760 | 73,597 |
Total operating costs and expenses | 1,681,674 | 1,687,088 | 3,361,931 | 3,373,209 |
Income before income taxes | 229,242 | 160,961 | 440,232 | 345,258 |
Income tax expense | (48,464) | (51,388) | (91,881) | (111,011) |
Net income before noncontrolling interests | 180,778 | 109,573 | 348,351 | 234,247 |
Noncontrolling interests | (703) | (569) | (1,879) | (1,796) |
Net income to common stockholders | $ 180,075 | $ 109,004 | $ 346,472 | $ 232,451 |
NET INCOME PER SHARE: | ||||
Basic (in dollar per share) | $ 1.42 | $ 0.87 | $ 2.74 | $ 1.88 |
Diluted (in dollar per share) | $ 1.40 | $ 0.85 | $ 2.70 | $ 1.81 |
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income before noncontrolling interests | $ 180,778 | $ 109,573 | $ 348,351 | $ 234,247 |
Other comprehensive (loss) income: | ||||
Change in unrealized currency translation adjustments | (104,455) | 20,247 | (91,656) | 42,982 |
Change in unrealized investment gains, net of taxes | (32,442) | 43,597 | (158,214) | 34,766 |
Other comprehensive income (loss) | (136,897) | 63,844 | (249,870) | 77,748 |
Comprehensive income | 43,881 | 173,417 | 98,481 | 311,995 |
Noncontrolling interests | (666) | (602) | (1,853) | (1,810) |
Comprehensive income to common stockholders | $ 43,215 | $ 172,815 | $ 96,628 | $ 310,185 |
General |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General The unaudited consolidated financial statements, which include the accounts of W. R. Berkley Corporation and its subsidiaries (the “Company”) have been prepared on the basis of U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all the information and notes required by GAAP for annual financial statements. The unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring items, which are necessary to present fairly the Company’s financial position and results of operations on a basis consistent with the prior audited consolidated financial statements. Operating results for interim periods are not necessarily indicative of the results that may be expected for the year. All significant intercompany accounts and transactions have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the revenues and expenses reflected during the reporting period. For further information related to a description of areas of judgment and estimates and other information necessary to understand the Company’s financial position and results of operations, refer to the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Reclassifications have been made in the 2017 financial statements as originally reported to conform to the presentation of the 2018 financial statements. The income tax provision has been computed based on the Company’s estimated annual effective tax rate. The effective tax rate for the quarter differs from the federal income tax rate of 21% principally because of tax-exempt investment income, as well as tax on income from foreign jurisdictions with different tax rates. |
Per Share Data |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per Share Data | Per Share Data The Company presents both basic and diluted net income per share (“EPS”) amounts. Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the period (including 4,847,303 and 4,087,731 common shares held in a grantor trust as of June 30, 2018 and 2017, respectively). The common shares held in the grantor trust are for delivery upon settlement of vested but mandatorily deferred restricted stock units ("RSUs"). Shares held by the grantor trust do not affect diluted shares outstanding since the shares deliverable under vested RSUs were already included in diluted shares outstanding. Diluted EPS is based upon the weighted average number of basic and common equivalent shares outstanding during the period and is calculated using the treasury stock method for stock incentive plans. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect. The weighted average number of common shares used in the computation of basic and diluted earnings per share was as follows:
|
Recent Accounting Pronouncements |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently adopted accounting pronouncements: In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Customers. ASU 2014-09 clarifies the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, the Company’s insurance service fee revenue and non-insurance business revenue are subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The updated guidance, as amended by ASU 2015-14, was effective for public business entities for annual and interim reporting periods beginning after December 15, 2017. The Company adopted this guidance on January 1, 2018 on a prospective basis. The impact of applying this guidance prospectively was a cumulative effect adjustment that increased retained earnings, a component of stockholders' equity, by $1 million after-tax. In January 2016, the FASB issued ASU 2016-01, Financial Instruments. ASU 2016-01 amends the accounting guidance for financial instruments to require all equity investments with readily determinable fair values to be measured at fair value with changes in the fair value recognized in net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The updated guidance was effective for public business entities for annual reporting periods beginning after December 15, 2017 and interim periods within those years. The Company adopted this updated guidance on January 1, 2018 on a prospective basis. The impact of applying this guidance prospectively was a cumulative effect adjustment that increased retained earnings and decreased accumulated other comprehensive income ("AOCI") by offsetting amounts of $291 million, resulting in no net impact to total stockholders' equity. Following the adoption, the Company reports changes in fair value related to equity securities within net realized and unrealized gains on investments. In February 2018, the FASB issued ASU 2018-02, Reporting Comprehensive Income, which amends previous guidance to allow a reclassification to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The amount of the reclassification includes the effect of the change in the U.S. federal corporate income tax rate on the gross deferred tax amounts and related valuation allowances, if any, at the date of the enactment of the Tax Act related to items in AOCI. The updated guidance will be effective for reporting periods beginning after December 15, 2018, and is eligible for early adoption. The Company adopted this updated guidance on January 1, 2018. The impact of applying this guidance was a cumulative effect adjustment that decreased retained earnings and increased AOCI by offsetting amounts of $76 million, resulting in no net impact to total stockholders' equity. All other accounting and reporting standards that have become effective in 2018 were either not applicable to the Company or their adoption did not have a material impact on the Company. Accounting and reporting standards that are not yet effective: In February 2016, the FASB issued ASU 2016-02, Leases, which amends the accounting and disclosure guidance for leases. This guidance retains the two classifications of a lease, as either an operating or finance lease, both of which will require lessees to recognize a right-of-use asset and a lease liability for leases with terms of more than 12 months. The right-of-use asset and the lease liability will be determined based upon the present value of cash flows. Finance leases will reflect the financial arrangement by recognizing interest expense on the lease liability separately from the amortization expense of the right-of-use asset. Operating leases will recognize lease expense (with no separate recognition of interest expense) on a straight-line basis over the term of the lease. The accounting by lessors is not significantly changed by the updated guidance. The updated guidance is effective for reporting periods beginning after December 15, 2018, and can be adopted prospectively or will require that the earliest comparative period presented include the measurement and recognition of existing leases with an adjustment to equity as if the updated guidance had always been applied. The Company is currently evaluating the impact that the adoption of this guidance will have on its results of operations, financial position and liquidity. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which amends the accounting guidance for credit losses on financial instruments. The updated guidance amends the current other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. This guidance also applies a new current expected credit loss model for determining credit-related impairments for financial instruments measured at amortized cost. The updated guidance is effective for reporting periods beginning after December 15, 2019. The Company will not be able to determine the impact the adoption of this guidance will have on its results of operations, financial position or liquidity until the year the guidance becomes effective. All other recently issued but not yet effective accounting and reporting standards are either not applicable to the Company or are not expected to have a material impact on the Company. |
Consolidated Statements of Comprehensive Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Statements of Comprehensive Income | Consolidated Statement of Comprehensive Income The following table presents the components of the changes in accumulated other comprehensive (loss) income ("AOCI"):
_________________________ (1) Net realized and unrealized gains on investments in the consolidated statements of income. (2) Income tax expense in the consolidated statements of income.
_________________________ (1) Net realized and unrealized gains on investments in the consolidated statements of income. (2) Income tax expense in the consolidated statements of income. |
Statements of Cash Flow |
6 Months Ended |
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Jun. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Statements of Cash Flow | Statements of Cash Flow Interest payments were $72,878,000 and $72,528,000 and income taxes paid were $111,000,000 and $145,123,000 in the six months ended June 30, 2018 and 2017, respectively. |
Investments In Fixed Maturity Securities |
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Schedule of Available-for-sale Securities [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments In Fixed Maturity Securities | Investments in Fixed Maturity Securities At June 30, 2018 and December 31, 2017, investments in fixed maturity securities were as follows:
____________ (1) Gross unrealized gains for residential mortgage-backed securities include $87,647 and $76,467 as of June 30, 2018 and December 31, 2017, respectively, related to securities with the non-credit portion of other-than-temporary impairments (“OTTI”) recognized in accumulated other comprehensive income. The amortized cost and fair value of fixed maturity securities at June 30, 2018, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay obligations.
At June 30, 2018 and December 31, 2017, there were no investments that exceeded 10% of common stockholders' equity, other than investments in United States government and government agency securities. |
Investments in Equity Securities |
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Equity securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Equity Securities | Investments in Equity Securities At June 30, 2018 and December 31, 2017, investments in equity securities were as follows:
______________________ (1) Effective January 1, 2018, the Company adopted new accounting guidance that requires all equity investments with readily determinable fair values (subject to certain exceptions) to be measured at fair value with changes in the fair value recognized through net income. Refer to Note 3 for additional information. |
Arbitrage Trading Account |
6 Months Ended |
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Jun. 30, 2018 | |
Trading Securities [Abstract] | |
Arbitrage Trading Account | Arbitrage Trading Account At June 30, 2018 and December 31, 2017, the fair and carrying values of the arbitrage trading account were $721 million and $618 million, respectively. The primary focus of the trading account is merger arbitrage. Merger arbitrage is the business of investing in the securities of publicly held companies which are the targets in announced tender offers and mergers. Arbitrage investing differs from other types of investing in its focus on transactions and events believed likely to bring about a change in value over a relatively short time period (usually four months or less). The Company uses put options, call options and swap contracts in order to mitigate the impact of potential changes in market conditions on the merger arbitrage trading account. These options and contracts are reported at fair value. As of June 30, 2018, the fair value of long option contracts outstanding was $0.2 million (notional amount of $15.0 million) and the fair value of short option contracts outstanding was $0.3 million (notional amount of $16.4 million). Other than with respect to the use of these trading account securities, the Company does not make use of derivatives. |
Net Investment Income |
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Net Investment Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Investment Income | Net Investment Income Net investment income consists of the following:
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Investment Funds |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Funds | Investment Funds The Company evaluates whether it is an investor in a variable interest entity ("VIE"). Such entities do not have sufficient equity at risk to finance their activities without additional subordinated financial support, or the equity investors, as a group, do not have the characteristics of a controlling financial interest (primary beneficiary). The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE's capital structure, contractual terms, nature of the VIE's operations and purpose, and the Company's relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE and on an ongoing basis. The Company is not the primary beneficiary in any of its investment funds, and accordingly, carries its interests in investment funds under the equity method of accounting. The Company’s maximum exposure to loss with respect to these investments is limited to the carrying amount reported on the Company’s consolidated balance sheet and its unfunded commitments, which were $319 million as of June 30, 2018. Investment funds consisted of the following:
The Company's share of the earnings or losses of investment funds is generally reported on a one-quarter lag in order to facilitate the timely completion of the Company's consolidated financial statements. |
Real Estate |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate | Real Estate Investment in real estate represents directly owned property held for investment, as follows:
In 2018, properties in operation included a long-term ground lease in Washington, D.C., a hotel in Memphis, Tennessee, two office complexes in New York City and office buildings in West Palm Beach and Palm Beach, Florida. Properties in operation are net of accumulated depreciation and amortization of $36,170,000 and $25,646,000 as of June 30, 2018 and December 31, 2017, respectively. Related depreciation expense was $10,784,000 and $3,604,000 for the six months ended June 30, 2018 and 2017, respectively. Future minimum rental income expected on operating leases relating to properties in operation is $26,207,569 in 2018, $54,753,308 in 2019, $53,482,025 in 2020, $52,568,588 in 2021, $48,834,325 in 2022, $42,215,085 in 2023 and $500,806,048 thereafter. Properties under development include an office building in London and a mixed-use project in Washington, D.C. |
Loans Receivable |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Receivable | Loans Receivable Loans receivable are as follows:
Loans receivable in non-accrual status were $1.5 million and $4.3 million as of June 30, 2018 and December 31, 2017, respectively. The Company monitors the performance of its loans receivable and assesses the ability of the borrower to pay principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating performance of the property and market conditions. Loans receivable with a potential for default are further assessed using discounted cash flow analysis and comparable cost and sales methodologies, if appropriate. The real estate loans are secured by commercial real estate primarily located in New York. These loans generally earn interest at floating LIBOR-based interest rates and have maturities (inclusive of extension options) through August 2025. The commercial loans are with small business owners who have secured the related financing with the assets of the business. Commercial loans primarily earn interest on a fixed basis and have varying maturities generally not exceeding 10 years. In evaluating the real estate loans, the Company considers their credit quality indicators, including loan to value ratios, which compare the outstanding loan amount to the estimated value of the property, the borrower’s financial condition and performance with respect to loan terms, the position in the capital structure, the overall leverage in the capital structure and other market conditions. Based on these considerations, none of the real estate loans were considered to be impaired at June 30, 2018, and accordingly, the Company determined that a specific valuation allowance was not required. |
Realized And Unrealized Investment Gains (Losses) on Investments |
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Realized and Unrealized Investment Gains (Losses) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized And Unrealized Investment Gains (Losses) on Investments | Realized and Unrealized Gains (Losses) on Investments Net realized and unrealized gains (losses) on investments are as follows:
(1) The net realized gains or losses on investment sales represent the total gains or losses from the purchase dates of the equity securities. The change in unrealized gains consists of two components: (i) the reversal of the gain or loss recognized in previous periods on equity securities sold and (ii) the change in unrealized gain or loss resulting from mark-to-market adjustments on equity securities still held. (2) Effective January 1, 2018, the Company adopted new accounting guidance that requires all equity investments with readily determinable fair values (subject to certain exceptions) to be measured at fair value with changes in the fair value recognized in net income. The Company recorded an adjustment of $291 million to opening AOCI net of tax as a result of this guidance. Refer to Note 3 for further information. |
Fixed Maturity Securities In An Unrealized Loss Position |
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Investments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed Maturity Securities In An Unrealized Loss Position | Fixed Maturity Securities in an Unrealized Loss Position The following tables summarize all fixed maturity securities in an unrealized loss position at June 30, 2018 and December 31, 2017 by the length of time those securities have been continuously in an unrealized loss position:
A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at June 30, 2018 is presented in the table below:
For OTTI of fixed maturity securities that management does not intend to sell or to be required to sell, the portion of the decline in value that is considered to be due to credit factors is recognized in earnings, and the portion of the decline in value that is considered to be due to non-credit factors is recognized in other comprehensive income. The Company has evaluated its fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become due and does not consider any of these securities to be OTTI. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The Company’s fixed maturity securities, equity securities and arbitrage trading account securities are carried at fair value. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 - Quoted prices for similar assets or valuations based on inputs that are observable. Level 3 - Estimates of fair value based on internal pricing methodologies using unobservable inputs. Unobservable inputs are only used to measure fair value to the extent that observable inputs are not available. Substantially, all of the Company’s fixed maturity securities were priced by independent pricing services. The prices provided by the independent pricing services are estimated based on observable market data in active markets utilizing pricing models and processes, which may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, sector groupings, matrix pricing and reference data. The pricing services may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs are available for each security evaluation on any given day. The pricing services used by the Company have indicated that they will only produce an estimate of fair value if objectively verifiable information is available. The determination of whether markets are active or inactive is based upon the volume and level of activity for a particular asset class. The Company reviews the prices provided by pricing services for reasonableness and periodically performs independent price tests of a sample of securities to ensure proper valuation. If prices from independent pricing services are not available for fixed maturity securities, the Company estimates the fair value. For Level 2 securities, the Company utilizes pricing models and processes which may include benchmark yields, sector groupings, matrix pricing, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, bids, offers and reference data. Where broker quotes are used, the Company generally requests two or more quotes and sets a price within the range of quotes received based on its assessment of the credibility of the quote and its own evaluation of the security. The Company generally does not adjust quotes received from brokers. For securities traded only in private negotiations, the Company determines fair value based primarily on the cost of such securities, which is adjusted to reflect prices of recent placements of securities of the same issuer, financial projections, credit quality and business developments of the issuer and other relevant information. For Level 3 securities, the Company generally uses a discounted cash flow model to estimate the fair value of fixed maturity securities. The cash flow models are based upon assumptions as to prevailing credit spreads, interest rate and interest rate volatility, time to maturity and subordination levels. Projected cash flows are discounted at rates that are adjusted to reflect illiquidity, where appropriate. The following tables present the assets and liabilities measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017 by level:
There were no significant transfers between Levels 1 and 2 during the six months ended June 30, 2018 or during the year ended December 31, 2017. The following tables summarize changes in Level 3 assets and liabilities for the six months ended June 30, 2018 and for the year ended December 31, 2017:
During the six months ended June 30, 2018, one common stock in the arbitrage trading account was transferred out of Level 3 as the security became publicly traded on a stock exchange. For the year ended December 31, 2017, there were no transfers out of Level 3. Fair Value of Financial Instruments The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:
The estimated fair values of the Company’s fixed maturity securities, equity securities and arbitrage trading account securities are based on various valuation techniques that rely on fair value measurements as described in Note 15. The fair value of loans receivable are estimated by using current institutional purchaser yield requirements for loans with similar credit characteristics, which is considered a Level 2 input. The fair value of the senior notes and other debt and the subordinated debentures is based on spreads for similar securities, which is considered a Level 2 input. |
Reserves for Loss and Loss Expenses |
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Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves for Loss and Loss Expenses | Reserves for Loss and Loss Expenses The Company's reserves for losses and loss expenses are comprised of case reserves and incurred but not reported liabilities ("IBNR"). When a claim is reported, a case reserve is established for the estimated ultimate payment based upon known information about the claim. As more information about the claim becomes available over time, case reserves are adjusted up or down as appropriate. Reserves are also established on an aggregate basis to provide for IBNR liabilities and expected loss reserve development on reported claims. Loss reserves included in the Company’s financial statements represent management’s best estimates based upon an actuarially derived point estimate and other considerations. The Company uses a variety of actuarial techniques and methods to derive an actuarial point estimate for each operating unit. These methods include paid loss development, incurred loss development, paid and incurred Bornhuetter-Ferguson methods and frequency and severity methods. In circumstances where one actuarial method is considered more credible than the others, that method is used to set the point estimate. The actuarial point estimate may also be based on a judgmental weighting of estimates produced from each of the methods considered. Industry loss experience is used to supplement the Company’s own data in selecting “tail factors” in areas where the Company’s own data is limited. The actuarial data is analyzed by line of business, coverage and accident or policy year, as appropriate, for each operating unit. The establishment of the actuarially derived loss reserve point estimate also includes consideration of qualitative factors that may affect the ultimate losses. These qualitative considerations include, among others, the impact of re-underwriting initiatives, changes in the mix of business, changes in distribution sources and changes in policy terms and conditions. The key assumptions used to arrive at the best estimate of loss reserves are the expected loss ratios, rate of loss cost inflation, and reported and paid loss emergence patterns. Expected loss ratios represent management’s expectation of losses at the time the business is priced and written, before any actual claims experience has emerged. This expectation is a significant determinant of the estimate of loss reserves for recently written business where there is little paid or incurred loss data to consider. Expected loss ratios are generally derived from historical loss ratios adjusted for the impact of rate changes, loss cost trends and known changes in the type of risks underwritten. Expected loss ratios are estimated for each key line of business within each operating unit. Expected loss cost inflation is particularly important for the long-tail lines, such as excess casualty, and claims with a high medical component, such as workers’ compensation. Reported and paid loss emergence patterns are used to project current reported or paid loss amounts to their ultimate settlement value. Loss development factors are based on the historical emergence patterns of paid and incurred losses, and are derived from the Company’s own experience and industry data. The paid loss emergence pattern is also significant to excess and assumed workers’ compensation reserves because those reserves are discounted to their estimated present value based upon such estimated payout patterns. Loss frequency and severity are measures of loss activity that are considered in determining the key assumptions described in our discussion of loss and loss expense reserves, including expected loss ratios, rate of loss cost inflation and reported and paid loss emergence patterns. Loss frequency is a measure of the number of claims per unit of insured exposure, and loss severity is a measure of the average size of claims. Factors affecting loss frequency include the effectiveness of loss controls and safety programs and changes in economic activity or weather patterns. Factors affecting loss severity include changes in policy limits, retentions, rate of inflation and judicial interpretations. Another factor affecting estimates of loss frequency and severity is the loss reporting lag, which is the period of time between the occurrence of a loss and the date the loss is reported to the Company. The length of the loss reporting lag affects our ability to accurately predict loss frequency (loss frequencies are more predictable for lines with short reporting lags) as well as the amount of reserves needed for incurred but not reported losses (less IBNR is required for lines with short reporting lags). As a result, loss reserves for lines with short reporting lags are likely to have less variation from initial loss estimates. For lines with short reporting lags, which include commercial automobile, primary workers’ compensation, other liability (claims-made) and property business, the key assumption is the loss emergence pattern used to project ultimate loss estimates from known losses paid or reported to date. For lines of business with long reporting lags, which include other liability (occurrence), products liability, excess workers’ compensation and liability reinsurance, the key assumption is the expected loss ratio since there is often little paid or incurred loss data to consider. Historically, the Company has experienced less variation from its initial loss estimates for lines of businesses with short reporting lags than for lines of business with long reporting lags. The key assumptions used in calculating the most recent estimate of the loss reserves are reviewed each quarter and adjusted, to the extent necessary, to reflect the latest reported loss data, current trends and other factors observed. The table below provides a reconciliation of the beginning and ending reserve balances:
_______________________________________ (1) Claims occurring during the current year are net of loss reserve discounts of $12,818,000 and $11,349,000 for the six months ended June 30, 2018 and 2017, respectively. (2) The decrease in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in prior years decreased by $6,132,000 and $14,873,000 for the six months ended June 30, 2018 and 2017, respectively. (3) For certain retrospectively rated insurance policies and reinsurance agreements, reserve development is offset by additional or return premiums. Favorable development, net of additional and return premiums, was $19 million and $24 million for the six months ended June 30, 2018 and 2017, respectively. During the six months ended June 30, 2018, favorable prior year development (net of additional and return premiums) of $19.3 million included $26.5 million of favorable development for the Insurance segment, partially offset by $7.2 million of adverse development for the Reinsurance segment. The favorable development for the Insurance segment was primarily attributable to workers’ compensation business. The favorable workers’ compensation development was spread across many accident years, including prior to 2008, but was most significant in accident years 2015 through 2017. The favorable workers’ compensation development reflects a continuation of the benign loss cost trends experienced in recent years, particularly the favorable claim frequency trends (i.e., number of reported claims per unit of exposure). The adverse development for the Reinsurance segment was mainly driven by U.S. casualty facultative business from accident years 2008 and prior related to construction projects. During the six months ended June 30, 2017, favorable prior year development (net of additional and return premiums) of $23.6 million included $49.4 million of favorable development for the Insurance segment, partially offset by $25.8 million of adverse development for the Reinsurance segment. The favorable development for the Insurance segment was primarily attributable to workers' compensation business (including excess workers' compensation) and excess & surplus lines casualty business. The favorable workers' compensation development was spread across many accident years, including prior to 2008, but was most significant in accident years 2014 and 2015. The favorable workers' compensation development reflects a continuation of the benign loss cost trends experienced during 2016, particularly the favorable claim frequency trends (i.e., number of reported claims per unit of exposure). The favorable development for excess & surplus lines casualty business resulted from loss cost trends emerging more favorably than our initial expectations, primarily in accident years 2014 through 2016. The adverse development for the Reinsurance segment was almost entirely due to reserve strengthening during the first quarter associated with claims impacted by the change in the Ogden discount rate in the U.K. The Ogden rate is the discount rate used to calculate lump-sum bodily injury payouts in the U.K., and was reduced by the U.K. Ministry of Justice from +2.5% to -0.75%. The adverse development mostly related to U.K. motor bodily injury claims which we reinsured on an excess of loss basis in accident years 2012 through 2016. |
Fair Value Of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Of Financial Instruments | Fair Value Measurements The Company’s fixed maturity securities, equity securities and arbitrage trading account securities are carried at fair value. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 - Quoted prices for similar assets or valuations based on inputs that are observable. Level 3 - Estimates of fair value based on internal pricing methodologies using unobservable inputs. Unobservable inputs are only used to measure fair value to the extent that observable inputs are not available. Substantially, all of the Company’s fixed maturity securities were priced by independent pricing services. The prices provided by the independent pricing services are estimated based on observable market data in active markets utilizing pricing models and processes, which may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, sector groupings, matrix pricing and reference data. The pricing services may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs are available for each security evaluation on any given day. The pricing services used by the Company have indicated that they will only produce an estimate of fair value if objectively verifiable information is available. The determination of whether markets are active or inactive is based upon the volume and level of activity for a particular asset class. The Company reviews the prices provided by pricing services for reasonableness and periodically performs independent price tests of a sample of securities to ensure proper valuation. If prices from independent pricing services are not available for fixed maturity securities, the Company estimates the fair value. For Level 2 securities, the Company utilizes pricing models and processes which may include benchmark yields, sector groupings, matrix pricing, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, bids, offers and reference data. Where broker quotes are used, the Company generally requests two or more quotes and sets a price within the range of quotes received based on its assessment of the credibility of the quote and its own evaluation of the security. The Company generally does not adjust quotes received from brokers. For securities traded only in private negotiations, the Company determines fair value based primarily on the cost of such securities, which is adjusted to reflect prices of recent placements of securities of the same issuer, financial projections, credit quality and business developments of the issuer and other relevant information. For Level 3 securities, the Company generally uses a discounted cash flow model to estimate the fair value of fixed maturity securities. The cash flow models are based upon assumptions as to prevailing credit spreads, interest rate and interest rate volatility, time to maturity and subordination levels. Projected cash flows are discounted at rates that are adjusted to reflect illiquidity, where appropriate. The following tables present the assets and liabilities measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017 by level:
There were no significant transfers between Levels 1 and 2 during the six months ended June 30, 2018 or during the year ended December 31, 2017. The following tables summarize changes in Level 3 assets and liabilities for the six months ended June 30, 2018 and for the year ended December 31, 2017:
During the six months ended June 30, 2018, one common stock in the arbitrage trading account was transferred out of Level 3 as the security became publicly traded on a stock exchange. For the year ended December 31, 2017, there were no transfers out of Level 3. Fair Value of Financial Instruments The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:
The estimated fair values of the Company’s fixed maturity securities, equity securities and arbitrage trading account securities are based on various valuation techniques that rely on fair value measurements as described in Note 15. The fair value of loans receivable are estimated by using current institutional purchaser yield requirements for loans with similar credit characteristics, which is considered a Level 2 input. The fair value of the senior notes and other debt and the subordinated debentures is based on spreads for similar securities, which is considered a Level 2 input. |
Reinsurance |
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Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance | Reinsurance The following is a summary of reinsurance financial information:
The Company reinsures a portion of its insurance exposures in order to reduce its net liability on individual risks and catastrophe losses. The Company also cedes premiums to state assigned risk plans and captive insurance companies. Estimated amounts due from reinsurers are reported net of reserves for uncollectible reinsurance of $1 million as of both June 30, 2018 and December 31, 2017. |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||
Restricted Stock Units | Restricted Stock Units Pursuant to its stock incentive plan, the Company may issue restricted stock units ("RSUs") to employees of the Company and its subsidiaries. The RSUs generally vest three to five years from the award date and are subject to other vesting and forfeiture provisions contained in the award agreement. RSUs are expensed pro-ratably over the vesting period. RSU expenses were $18 million and $21 million for the six months ended June 30, 2018 and 2017, respectively. A summary of RSUs issued in the six months ended June 30, 2018 and 2017 follows:
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Litigation and Contingent Liabilities |
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Commitments and Contingencies Disclosure [Abstract] | |
Litigation and Contingent Liabilities | Litigation and Contingent Liabilities In the ordinary course of business, the Company is subject to disputes, litigation and arbitration arising from its insurance and reinsurance businesses. These matters are generally related to insurance and reinsurance claims and are considered in the establishment of loss and loss expense reserves. In addition, the Company may also become involved in legal actions which seek extra-contractual damages, punitive damages or penalties, including claims alleging bad faith in handling of insurance claims. The Company expects its ultimate liability with respect to such matters will not be material to its financial condition. However, adverse outcomes on such matters are possible, from time to time, and could be material to the Company’s results of operations in any particular financial reporting period. |
Business Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | Business Segments The Company’s reportable segments include the following two business segments, plus a corporate segment:
The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Income tax expense and benefits are calculated based upon the Company's overall effective tax rate. Summary financial information about the Company's reporting segments is presented in the following tables. Income (loss) before income taxes by segment includes allocated investment income. Identifiable assets by segment are those assets used in or allocated to the operation of each segment.
(1)Revenues for Insurance from foreign countries for the three months ended June 30, 2018 and 2017 were $176 million and $168 million, and for the six months ended June 30, 2018 and 2017 were $359 million and $347 million, respectively. Revenues for Reinsurance from foreign countries for the three months ended June 30, 2018 and 2017 were $55 million and $50 million, and for the six months ended June 30, 2018 and 2017 were $112 million and $101 million, respectively.
Identifiable Assets
Net premiums earned by major line of business are as follows:
______________ (1) Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery and other lines. |
Recent Accounting Pronouncements (Policies) |
6 Months Ended |
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Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Per Share Data | Per Share Data The Company presents both basic and diluted net income per share (“EPS”) amounts. Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the period (including 4,847,303 and 4,087,731 common shares held in a grantor trust as of June 30, 2018 and 2017, respectively). The common shares held in the grantor trust are for delivery upon settlement of vested but mandatorily deferred restricted stock units ("RSUs"). Shares held by the grantor trust do not affect diluted shares outstanding since the shares deliverable under vested RSUs were already included in diluted shares outstanding. Diluted EPS is based upon the weighted average number of basic and common equivalent shares outstanding during the period and is calculated using the treasury stock method for stock incentive plans. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently adopted accounting pronouncements: In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Customers. ASU 2014-09 clarifies the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, the Company’s insurance service fee revenue and non-insurance business revenue are subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The updated guidance, as amended by ASU 2015-14, was effective for public business entities for annual and interim reporting periods beginning after December 15, 2017. The Company adopted this guidance on January 1, 2018 on a prospective basis. The impact of applying this guidance prospectively was a cumulative effect adjustment that increased retained earnings, a component of stockholders' equity, by $1 million after-tax. In January 2016, the FASB issued ASU 2016-01, Financial Instruments. ASU 2016-01 amends the accounting guidance for financial instruments to require all equity investments with readily determinable fair values to be measured at fair value with changes in the fair value recognized in net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The updated guidance was effective for public business entities for annual reporting periods beginning after December 15, 2017 and interim periods within those years. The Company adopted this updated guidance on January 1, 2018 on a prospective basis. The impact of applying this guidance prospectively was a cumulative effect adjustment that increased retained earnings and decreased accumulated other comprehensive income ("AOCI") by offsetting amounts of $291 million, resulting in no net impact to total stockholders' equity. Following the adoption, the Company reports changes in fair value related to equity securities within net realized and unrealized gains on investments. In February 2018, the FASB issued ASU 2018-02, Reporting Comprehensive Income, which amends previous guidance to allow a reclassification to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The amount of the reclassification includes the effect of the change in the U.S. federal corporate income tax rate on the gross deferred tax amounts and related valuation allowances, if any, at the date of the enactment of the Tax Act related to items in AOCI. The updated guidance will be effective for reporting periods beginning after December 15, 2018, and is eligible for early adoption. The Company adopted this updated guidance on January 1, 2018. The impact of applying this guidance was a cumulative effect adjustment that decreased retained earnings and increased AOCI by offsetting amounts of $76 million, resulting in no net impact to total stockholders' equity. All other accounting and reporting standards that have become effective in 2018 were either not applicable to the Company or their adoption did not have a material impact on the Company. Accounting and reporting standards that are not yet effective: In February 2016, the FASB issued ASU 2016-02, Leases, which amends the accounting and disclosure guidance for leases. This guidance retains the two classifications of a lease, as either an operating or finance lease, both of which will require lessees to recognize a right-of-use asset and a lease liability for leases with terms of more than 12 months. The right-of-use asset and the lease liability will be determined based upon the present value of cash flows. Finance leases will reflect the financial arrangement by recognizing interest expense on the lease liability separately from the amortization expense of the right-of-use asset. Operating leases will recognize lease expense (with no separate recognition of interest expense) on a straight-line basis over the term of the lease. The accounting by lessors is not significantly changed by the updated guidance. The updated guidance is effective for reporting periods beginning after December 15, 2018, and can be adopted prospectively or will require that the earliest comparative period presented include the measurement and recognition of existing leases with an adjustment to equity as if the updated guidance had always been applied. The Company is currently evaluating the impact that the adoption of this guidance will have on its results of operations, financial position and liquidity. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which amends the accounting guidance for credit losses on financial instruments. The updated guidance amends the current other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. This guidance also applies a new current expected credit loss model for determining credit-related impairments for financial instruments measured at amortized cost. The updated guidance is effective for reporting periods beginning after December 15, 2019. The Company will not be able to determine the impact the adoption of this guidance will have on its results of operations, financial position or liquidity until the year the guidance becomes effective. All other recently issued but not yet effective accounting and reporting standards are either not applicable to the Company or are not expected to have a material impact on the Company. |
Per Share Data (Tables) |
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Weighted average number of common shares | The weighted average number of common shares used in the computation of basic and diluted earnings per share was as follows:
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Consolidated Statements of Comprehensive Income (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of changes in accumulated other comprehensive income (loss) | The following table presents the components of the changes in accumulated other comprehensive (loss) income ("AOCI"):
_________________________ (1) Net realized and unrealized gains on investments in the consolidated statements of income. (2) Income tax expense in the consolidated statements of income.
_________________________ (1) Net realized and unrealized gains on investments in the consolidated statements of income. (2) Income tax expense in the consolidated statements of income. |
Investments in Fixed Maturity Securities (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of investments in fixed maturity securities | At June 30, 2018 and December 31, 2017, investments in fixed maturity securities were as follows:
____________ (1) Gross unrealized gains for residential mortgage-backed securities include $87,647 and $76,467 as of June 30, 2018 and December 31, 2017, respectively, related to securities with the non-credit portion of other-than-temporary impairments (“OTTI”) recognized in accumulated other comprehensive incom |
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Amortized cost and fair value of fixed maturity securities by contractual maturity | The amortized cost and fair value of fixed maturity securities at June 30, 2018, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay obligations.
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Investments in Equity Securities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investments in Equity Securities | At June 30, 2018 and December 31, 2017, investments in equity securities were as follows:
______________________ (1) Effective January 1, 2018, the Company adopted new accounting guidance that requires all equity investments with readily determinable fair values (subject to certain exceptions) to be measured at fair value with changes in the fair value recognized through net income. Refer to Note 3 for additional information. |
Net Investment Income (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Investment Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Investment Income | Net investment income consists of the following:
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Investment Funds (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investment Funds | Investment funds consisted of the following:
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Real Estate Real Estate (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Investments | Investment in real estate represents directly owned property held for investment, as follows:
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Loans Receivable Loans Receivable (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans Receivable | Loans receivable are as follows:
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Realized And Unrealized Investment Gains (Losses) on Investments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized and Unrealized Investment Gains (Losses) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized and Unrealized Investment Gains (Losses) | ealized and unrealized gains (losses) on investments are as follows:
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Unrealized Gain (Loss) on Investments |
(1) The net realized gains or losses on investment sales represent the total gains or losses from the purchase dates of the equity securities. The change in unrealized gains consists of two components: (i) the reversal of the gain or loss recognized in previous periods on equity securities sold and (ii) the change in unrealized gain or loss resulting from mark-to-market adjustments on equity securities still held. (2) Effective January 1, 2018, the Company adopted new accounting guidance that requires all equity investments with readily determinable fair values (subject to certain exceptions) to be measured at fair value with changes in the fair value recognized in net income. The Company recorded an adjustment of $291 million to opening AOCI net of tax as a result of this guidance. Refer to Note 3 for further information. |
Fixed Maturity Securities In An Unrealized Loss Position Fixed Maturity Securities In An Unrealized Loss Position (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of Financial Position [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities in an unrealized loss position | The following tables summarize all fixed maturity securities in an unrealized loss position at June 30, 2018 and December 31, 2017 by the length of time those securities have been continuously in an unrealized loss position:
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Non-Investment Grade Fixed Maturity Securities | A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at June 30, 2018 is presented in the table below:
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets And Liabilities Measured At Fair value, On A Recurring Basis | The following tables present the assets and liabilities measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017 by level:
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Summarize Changes In Level 3 Assets | The following tables summarize changes in Level 3 assets and liabilities for the six months ended June 30, 2018 and for the year ended December 31, 2017:
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Reserves for Loss and Loss Expenses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserve Balances | The table below provides a reconciliation of the beginning and ending reserve balances:
_______________________________________ (1) Claims occurring during the current year are net of loss reserve discounts of $12,818,000 and $11,349,000 for the six months ended June 30, 2018 and 2017, respectively. (2) The decrease in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in prior years decreased by $6,132,000 and $14,873,000 for the six months ended June 30, 2018 and 2017, respectively. (3) For certain retrospectively rated insurance policies and reinsurance agreements, reserve development is offset by additional or return premiums. Favorable development, net of additional and return premiums, was $19 million and $24 million for the six months ended June 30, 2018 and 2017, respectively. |
Fair Value of Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amounts And Estimated Fair Values Of Financial Instruments | The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:
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Reinsurance (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance Financial Information | The following is a summary of reinsurance financial information:
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Restricted Stock Units (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||
Summary Of Restricted Stock Units Issued | A summary of RSUs issued in the six months ended June 30, 2018 and 2017 follows:
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Business Segments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information Of Company Operating Segments |
(1)Revenues for Insurance from foreign countries for the three months ended June 30, 2018 and 2017 were $176 million and $168 million, and for the six months ended June 30, 2018 and 2017 were $359 million and $347 million, respectively. Revenues for Reinsurance from foreign countries for the three months ended June 30, 2018 and 2017 were $55 million and $50 million, and for the six months ended June 30, 2018 and 2017 were $112 million and $101 million, respectively.
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Identifiable Assets By Segment | Identifiable Assets
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Net Premiums Earned By Major Line Of Business | Net premiums earned by major line of business are as follows:
______________ (1) Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery and other lines. |
General (Details) |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Federal Income Tax Rate | 21.00% |
Per Share Data (Narrative) (Details) - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Earnings Per Share [Abstract] | ||
Weighted average number of shares held in grantor trust | 4,847,303 | 4,087,731 |
Per Share Data (Weighted Average Number of Common Shares Used In the Computation of Basic and Diluted Earnings per Share) (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Earnings Per Share [Abstract] | ||||
Basic (shares) | 126,517 | 125,334 | 126,446 | 123,623 |
Diluted (shares) | 128,339 | 128,601 | 128,189 | 128,546 |
Statements of Cash Flow (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Supplemental Cash Flow Elements [Abstract] | ||
Interest payments | $ 72,878,000 | $ 72,528,000 |
Income taxes paid | $ 111,000,000 | $ 145,123,000 |
Investments In Fixed Maturity Securities Investments in Fixed Maturity Securities (Amortized cost and fair value of fixed maturity securities) (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Amortized Cost, Due in one year or less | $ 841,253 | |
Amortized Cost, Due after one year through five years | 4,392,395 | |
Amortized Cost, Due after five years through ten years | 3,042,177 | |
Amortized Cost, Due after ten years | 3,413,887 | |
Amortized Cost, Mortgaged-backed securities | 1,496,244 | |
Total investments in fixed maturity securities, Amortized Value | 13,185,956 | $ 13,321,912 |
Fair Value, Due in one year or less | 849,860 | |
Fair Value, Due after one year through five years | 4,428,769 | |
Fair Value, Due after five years through ten years | 3,074,332 | |
Fair Value, Due after ten years | 3,407,047 | |
Fair Value, Mortgage-backed securities | 1,471,384 | |
Total investments in fixed maturity securities, Fair Value | $ 13,231,392 | $ 13,566,976 |
Arbitrage Trading Account (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Derivative [Line Items] | ||
Arbitrage trading account | $ 721,088 | $ 617,649 |
Long | Options held | ||
Derivative [Line Items] | ||
Fair value of derivative | 200 | |
Notional amount of derivative | 15,000 | |
Short | Options held | ||
Derivative [Line Items] | ||
Fair value of derivative | 300 | |
Notional amount of derivative | $ 16,400 |
Net Investment Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Net Investment Income [Line Items] | ||||
Gross investment income | $ 154,447 | $ 137,036 | $ 330,452 | $ 287,596 |
Investment expense | (670) | (1,772) | (2,157) | (3,473) |
Net investment income | 153,777 | 135,264 | 328,295 | 284,123 |
Fixed maturity securities, including cash and cash equivalents and loans receivable | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 129,665 | 116,796 | 252,911 | 229,142 |
Investment funds | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 12,716 | 8,895 | 53,070 | 35,544 |
Arbitrage trading account | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 8,333 | 5,457 | 13,524 | 11,817 |
Real estate | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 3,174 | 5,286 | 9,742 | 9,852 |
Equity securities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | $ 559 | $ 602 | $ 1,205 | $ 1,241 |
Investment Funds Investment Funds (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2018 |
Dec. 31, 2017 |
|
Schedule of Equity Method Investments [Line Items] | |||
Unfunded commitments | $ 319,000 | ||
Investment funds | 1,208,586 | $ 1,155,677 | |
Income (Loss) from Investment Funds | $ 35,544 | 53,070 | |
Real estate | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment funds | 622,796 | 606,995 | |
Income (Loss) from Investment Funds | 19,518 | 35,826 | |
Energy | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment funds | 76,406 | 82,882 | |
Income (Loss) from Investment Funds | (8,639) | (1,256) | |
Other funds | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment funds | 509,384 | $ 465,800 | |
Income (Loss) from Investment Funds | $ 24,665 | $ 18,500 |
Real Estate Real Estate (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Real Estate [Abstract] | ||
Properties in operation | $ 767,882 | $ 451,691 |
Properties under development | 1,115,740 | 1,017,910 |
Total | $ 1,883,622 | $ 1,469,601 |
Real Estate Real Estate (Narrative) (Details) - USD ($) |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Real Estate [Abstract] | |||
Accumulated depreciation and amortization on properties | $ 36,170,000 | $ 25,646,000 | |
Real estate depreciation expense | 10,784,000 | $ 3,604,000 | |
Lease future minimum payments 2017 | 26,207,569 | ||
Lease future minimum payments 2018 | 54,753,308 | ||
Lease future minimum payments 2019 | 53,482,025 | ||
Lease future minimum payments 2020 | 52,568,588 | ||
Lease future minimum payments 2021 | 48,834,325 | ||
Lease future minimum payments 2022 | 42,215,085 | ||
Lease future minimum payments there after | $ 500,806,048 |
Loans Receivable (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans receivable, gross | $ 98,088 | $ 98,088 | $ 79,684 | ||
Loans receivable | 100,400 | 100,400 | 82,047 | ||
Valuation allowance, specific | 1,200 | 1,200 | 1,200 | ||
Valuation allowance, general | 2,183 | 2,183 | 2,183 | ||
Valuation allowance of loans receivable | 3,383 | 3,383 | 3,383 | ||
Decrease in valuation allowance | 0 | $ 0 | 0 | $ (14) | |
Loans in nonaccrual status | 1,500 | 1,500 | 4,300 | ||
Real estate loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans receivable, gross | 62,986 | 62,986 | 66,057 | ||
Loans receivable | 63,796 | 63,796 | 66,917 | ||
Commercial loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans receivable, gross | 35,102 | 35,102 | 13,627 | ||
Loans receivable | $ 36,604 | $ 36,604 | $ 15,130 |
Realized And Unrealized Investment Gains (Losses) on Investments (Realized and unrealized investmetns gains(losses)) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Realized and Unrealized Investment Gains Losses [Line Items] | ||||
Fixed maturity securities, gains | $ 7,921 | $ 7,427 | $ 21,260 | $ 13,032 |
Fixed maturity securities, losses | (4,125) | 0 | (7,865) | (3,965) |
Net realized gains on investment sales | 119,422 | 32,139 | 241,743 | 74,846 |
Change in unrealized gains | (54,652) | 0 | (148,857) | 0 |
Investment funds | (353) | (112) | (234) | 1,155 |
Real estate | (402) | (364) | 7,596 | 2,936 |
Loans receivable | 1 | 0 | 2,059 | 0 |
Other | 1,819 | 1,363 | 2,393 | 4,797 |
Net realized and unrealized gains on investments in earnings before OTTI | 69,631 | 40,453 | 118,095 | 92,801 |
Other-than-temporary impairments | 0 | 0 | 0 | 0 |
Net realized and unrealized gains on investments in earnings | 69,631 | 40,453 | 118,095 | 92,801 |
Income tax expense | (14,623) | (14,159) | (24,800) | (32,480) |
After-tax net realized and unrealized gains on investments in earnings | $ 55,008 | $ 26,294 | $ 93,295 | $ 60,321 |
Reserves for Loss and Loss Expenses (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Net reserves at beginning of year | $ 10,056,914 | $ 9,590,265 | |
Net provision for losses and loss expenses: | |||
Claims occurring during the current year | 1,916,140 | 1,926,394 | |
Decrease in estimates for claims occurring in prior years | (246) | (6,459) | |
Loss reserve discount accretion | 20,962 | 24,367 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims | 1,936,856 | 1,944,302 | |
Net payments for claims: | |||
Current year | 316,567 | 315,437 | |
Prior year | 1,527,522 | 1,432,828 | |
Total | 1,844,089 | 1,748,265 | |
Foreign currency translation | (72,351) | 37,097 | |
Net reserves at end of period | 10,077,330 | 9,823,399 | |
Ceded reserves at end of period | 1,659,245 | 1,500,868 | |
Gross reserves at end of period | $ 11,736,575 | $ 11,324,267 | $ 11,670,408 |
Reserves for Loss and Loss Expenses (Narrative) (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Net of loss reserve discounts | $ 12,818 | $ 11,349 | ||
Decrease in estimates for claims | 6,132 | 14,873 | ||
Adjustment expense | 19,000 | 24,000 | ||
Insurance | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Adjustment expense | 19,300 | 23,600 | ||
Favorable reserve development net of premium offsets | 26,500 | 49,400 | ||
Reinsurance | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Unfavorable reserve development net of premium offsets | $ 7,200 | $ 25,800 | ||
Reinsurance reserves ogden discount rate | (0.75%) | 2.50% |
Reinsurance (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Written premiums: | |||||
Written premiums, direct | $ 1,785,266 | $ 1,727,014 | $ 3,572,501 | $ 3,448,076 | |
Written premiums, assumed | 162,808 | 160,139 | 354,995 | 375,283 | |
Written premiums, ceded | (323,970) | (322,902) | (638,054) | (612,270) | |
Total net premiums written | 1,624,104 | 1,564,251 | 3,289,442 | 3,211,089 | |
Earned premiums: | |||||
Earned premiums, direct | 1,705,277 | 1,666,938 | 3,379,827 | 3,280,302 | |
Earned premiums, assumed | 180,509 | 193,683 | 369,375 | 402,310 | |
Earned premiums, ceded | (304,733) | (291,918) | (600,741) | (543,868) | |
Net premiums earned | 1,581,053 | 1,568,703 | 3,148,461 | 3,138,744 | |
Ceded losses and loss expenses incurred | 161,073 | 142,609 | 400,068 | 177,801 | |
Ceded commissions earned | 65,922 | $ 57,752 | 132,278 | $ 114,302 | |
Uncollectible reinsurance | $ 1,000 | $ 1,000 | $ 1,000 |
Restricted Stock Units (Summary of Restricted Stock Units Issued) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Share-Based Compensation Arrangement by Share-based Payment Award [Line Item] | ||
Share based compensation expense | $ 18,000 | $ 21,000 |
Restricted stock | ||
Share-Based Compensation Arrangement by Share-based Payment Award [Line Item] | ||
Restricted stock units (in units) | 13,025 | 6,020,000 |
Fair Value | $ 963 | $ 405 |
Minimum | Restricted stock | ||
Share-Based Compensation Arrangement by Share-based Payment Award [Line Item] | ||
Award vesting period | 3 years | |
Maximum | Restricted stock | ||
Share-Based Compensation Arrangement by Share-based Payment Award [Line Item] | ||
Award vesting period | 5 years |
Business Segments (Identifiable Assets by Segment) (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Consolidated Assets | $ 24,621,144 | $ 24,299,917 |
Operating Segments | Insurance | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Consolidated Assets | 19,219,312 | 19,263,193 |
Operating Segments | Reinsurance | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Consolidated Assets | 2,929,066 | 3,169,731 |
Corporate, other and eliminations | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Consolidated Assets | $ 2,472,766 | $ 1,866,993 |
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