10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________ 

FORM 10-K

________________________________ 

(Mark One)

ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2016

OR

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from              to

Commission file number 0-50167

________________________________ 

INFINITY PROPERTY AND CASUALTY CORPORATION

(Exact name of registrant as specified in its charter)

________________________________

OHIO	03-0483872
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2201 4TH AVENUE NORTH BIRMINGHAM, ALABAMA	35203
(Address of principal executive offices)	(Zip Code)

(205) 870-4000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:	Name of each exchange on which registered:
Common Stock, no par value	NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    ý  Yes    ¨  No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    ¨  Yes    ý  No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ý  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ý  Yes    ¨  No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	o  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    ¨  Yes    ý  No

As of June 30, 2016, the aggregate market value of the voting Common Stock held by non-affiliates of the registrant was $860,574,116 based on the last sale price of Common Stock on that date as reported by The NASDAQ Global Select Market.

As of February 17, 2017, there were 11,038,721 shares of the registrant’s Common Stock outstanding.

________________________________

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s proxy statement for the annual meeting of shareholders to be held on May 17, 2017, are incorporated by reference in Part III hereof.

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

TABLE OF CONTENTS

		Page
PART I
Item 1 -	Business	1
	Introduction	1
	Segments	1
Item 1A -	Risk Factors	5
Item 1B -	Unresolved Staff Comments	7
Item 2 -	Properties	7
Item 3 -	Legal Proceedings	7
Item 4 -	Mine Safety Disclosures	7
PART II
Item 5 -	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	8
Item 6 -	Selected Financial Data	10
Item 7 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 7A -	Quantitative and Qualitative Disclosures About Market Risk	27
Item 8 -	Financial Statements and Supplementary Data	28
Item 9 -	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	28
Item 9A -	Controls and Procedures	28
Item 9B -	Other Information	30
PART III
Item 10 -	Directors, Executive Officers and Corporate Governance	30
Item 11 -	Executive Compensation	30
Item 12 -	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	30
Item 13 -	Certain Relationships and Related Transactions, and Director Independence	30
Item 14 -	Principal Accountant Fees and Services	30
PART IV
Item 15 -	Exhibits and Financial Statement Schedules	51
Item 16 -	Form 10-K Summary	54

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains certain “forward-looking statements” which anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in this report not dealing with historical results or current facts are forward-looking and are based on estimates, assumptions and projections. Statements which include the words “assumes,” “believes,” “seeks,” “expects,” “may,” “should,” “intends,” “likely,” “targets,” “plans,” “anticipates,” “estimates” or the negative version of those words and similar statements of a future or forward-looking nature identify forward-looking statements. Examples of such forward-looking statements include statements relating to expectations concerning market conditions, premium growth, earnings, investment performance, expected losses, rate changes and loss experience.

The primary events or circumstances that could cause actual results to differ materially from what we expect include determinations with respect to reserve adequacy, realized gains or losses on the investment portfolio (including other-than-temporary impairments for credit losses), loss cost trends and competitive conditions in our key states (defined in Item 1 - Business). We undertake no obligation to publicly update or revise any of the forward-looking statements. For a more detailed discussion of some of the foregoing risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, refer to Item 1A - Risk Factors.

PART I

ITEM 1

Business

Introduction

Infinity Property and Casualty Corporation was incorporated under the laws of the State of Ohio on September 16, 2002. We are a holding company that provides insurance, through our subsidiaries, for personal auto with a concentration on nonstandard risks, commercial vehicles and classic collectors. Our headquarters is located in Birmingham, Alabama. We employed approximately 2,300 people at December 31, 2016.

We file our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports as required with the United States Securities and Exchange Commission (SEC). Any of these documents may be read and copied at the SEC’s Public Reference Room at 100 F Street N.E., Washington, DC 20549. Information regarding the operation of the SEC Public Reference Room may be obtained by calling 1-800-SEC-0330. Our filed documents may also be accessed via the SEC Internet site at http://www.sec.gov. All of our SEC filings, news releases and other information may also be accessed free of charge on our website at http://www.infinityauto.com. Information on our website is not part of this Form 10-K.

Refer to Note 1 - Significant Reporting and Accounting Policies to the Consolidated Financial Statements for additional information regarding our history and organization. References to "we" or "us", unless the context requires otherwise, include the combined operations of our subsidiaries. Unless indicated otherwise, the financial information we present in this report is on a Generally Accepted Accounting Principles (GAAP) basis. Schedules may not foot due to rounding.

Our Strategy

We offer personal and commercial auto insurance primarily in four key states: Arizona, California, Florida and Texas. Our target customers are urban and Hispanic drivers. This narrow geographic and demographic focus allows us to concentrate our efforts and resources on providing competitively priced products to underserved segments while generating adequate returns for our shareholders.

Segments

Personal Automobile is our primary insurance product. It provides coverage to individuals for liability to others for bodily injury and property damage and for physical damage to an insured's own vehicle from collision and various other perils. In addition, some states require policies to provide for first party personal injury protection, frequently referred to as no-fault coverage.

Personal auto insurance is the largest line of property and casualty insurance, accounting for approximately 37%, or $193 billion, of the estimated $521 billion of annual industry premium. Personal auto insurance comprises preferred, standard and nonstandard risks. Nonstandard risks are associated with drivers who, due to factors such as their driving record, driving experience, lapse in or absence of prior insurance, or credit history, represent a higher than normal risk. Customers in the market for nonstandard auto insurance generally seek minimum required liability limits and are willing to accept restrictive coverages in exchange for more affordable insurance, given their risk profile. There is no established industry-recognized distinction between nonstandard risks

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

and all other personal auto risks. Independent agents sell approximately 27% of all personal automobile insurance. The remainder is sold by captive agents or directly by insurance companies to their customers. We believe that, relative to the standard and preferred auto insurance market, independent agents sell a disproportionately larger portion of nonstandard auto insurance.

The personal auto insurance industry is cyclical, characterized by periods of price competition and excess capacity followed by periods of higher premium rates and shortages of underwriting capacity. These cycles may vary by geographic market.

Industrywide, rates increased 7.0%, 5.7% and 4.8% in 2016, 2015 and 2014, respectively. Our filed average rate adjustments on our personal auto business were 8.1%, 5.1% and 6.0%2016, 2015 and 2014, respectively.

The personal auto insurance industry is highly competitive and, except for regulatory considerations, there are relatively few barriers to entry. We generally compete with other insurers based on price, coverage offered, claims handling, customer service, agent commission, geographic coverage and financial strength ratings. We compete with both large national writers and small regional companies. In 2015, the five largest automobile insurance companies accounted for approximately 56% of the industry’s net written premium and the largest ten accounted for approximately 72% (2016 industry data is not yet available). Approximately 306 insurance groups and unaffiliated insurance companies compete in the personal auto insurance industry. Some of these groups specialize in nonstandard auto insurance while others insure a broad spectrum of personal auto insurance risks.

Based on data published by A.M. Best, we believe that we are the second largest provider of nonstandard personal auto coverage through independent agents in the United States. We also write standard and preferred personal auto insurance.

We have a history of underwriting results that outperform the personal auto industry. The following table compares our statutory combined ratio, net of fees, in past years with those of the private passenger auto industry. The statutory combined ratio is the sum of the loss ratio (the ratio of losses and loss adjustment expenses (LAE) to net earned premium) and the expense ratio (when calculated on a statutory accounting basis, the ratio of underwriting expenses, net of fees, to net written premium). Underwriting results are generally considered profitable when the combined ratio is under 100%; when the ratio is over 100%, underwriting results are generally considered unprofitable.

	2016		2015		2014		2013		2012		2012-2016		2007-2016
Personal Auto Segment	94.9	%	93.6	%	94.5	%	96.2	%	98.5	%	95.5	%	94.1	%
Industry (a)	107.4	%	104.6	%	102.3	%	101.6	%	102.1	%	103.7	%	102.3	%
Percentage point difference from industry	12.5	%	11.0	%	7.8	%	5.4	%	3.6	%	8.2	%	8.2	%

 ________________

(a) We obtained the private passenger auto industry combined ratios for 2007 through 2015 from A.M. Best. A.M. Best data is not available for 2016. The industry combined ratio for 2016 is an estimate based on data obtained from Conning Research and Consulting.

Commercial Vehicle provides coverage to businesses for liability to others for bodily injury and property damage and for physical damage to vehicles from collision and various other perils.

Approximately 335 insurance groups and unaffiliated insurance companies compete in the commercial vehicle insurance industry. Writers of commercial vehicle insurance typically focus on one or more of the various segments of commercial vehicle. We avoid the segments that are involved in what we consider to be hazardous operations or interstate commerce.

The primary segment of the market on which we focus is artisan contractors, which makes up approximately 17% of the industry's commercial vehicle premium. We primarily target businesses with fleets of 20 or fewer vehicles, averaging 1.9 vehicles per policy.

Classic Collectorprovides coverage to individuals with classic or antique automobiles for liability to others for bodily injury and property damage and for physical damage to an insured's own vehicle from collision and various other perils.

Our three segments contributed the following percentages of total gross written premium:

	Twelve months ended December 31,
	2016		2015		2014
Personal Auto	89	%	90	%	91	%
Commercial Vehicle	10	%	9	%	8	%
Classic Collector	1	%	1	%	1	%
Total	100	%	100	%	100	%

Refer to Note 17 – Segment Information to the Consolidated Financial Statements for information on our revenues and underwriting income by segment.

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Distribution and Marketing

We distribute our products primarily through a network of approximately 10,800 independent agencies and brokers in 15,400 locations. In 2016, 15% of our agency force produced 80% of our gross written premium, our top 10 independent agents and brokers produced 23%, seven independent agencies accounted for more than 1% each, and our top agent produced 8%. In California, Infinity’s largest state by premium volume, 54 independent agents and brokers produced 50% of gross written premium in the state (which represents 25% countrywide), and our largest broker in the state produced 15% of that premium. In Florida, Infinity's second largest state by premium volume, 31 independent agents and brokers produced 50% of gross written premium in the state (which represents 15% countrywide), and our largest agent in the state produced 18% of that premium.

We foster agent relationships by providing them with access to our Internet-based software applications along with programs and services designed to strengthen and expand their marketing, sales and service capabilities. Our Internet-based software applications provide many of our agents with e-signature capabilities and real-time underwriting, claims and policy information. We believe the array of services offered to our agents adds significant value to the agents' businesses. For example, “Easy Street” is our incentive-based program through which agents receive assistance in critical areas such as training, advertising and promotion. In 2016 we spent $9.0 million on co-op advertising and promotions.

In 2016 we also wrote $90.1 million of business sold directly to the consumer either through company-owned sales centers or via the Internet.

We are licensed to write insurance in all 50 states and the District of Columbia, but we focus our operations in targeted urban areas identified in selected states that we believe offer the greatest opportunity for premium growth and profitability.

Total gross written premium mix was as follows ($ in thousands):

	Twelve months ended December 31,
Personal Auto:	2016			2015			2014
California	49.0		%	49.2		%	45.9		%
Florida	29.4		%	31.9		%	32.8		%
Texas	6.3		%	3.9		%	4.6		%
Arizona	1.3		%	1.2		%	1.3		%
Other States	2.4		%	3.6		%	6.4		%
Total Personal Auto	88.5		%	89.8		%	91.0		%
Commercial Vehicle	10.4		%	9.1		%	8.0		%
Classic Collector	1.1		%	1.1		%	1.1		%
Total all states and all lines	100.0		%	100.0		%	100.0		%
Total all states and all lines	$	1,401,414		$	1,387,866		$	1,360,870

We implement our distribution and marketing efforts with a focus on maintaining a low cost structure. Controlling expenses allows us to price competitively and achieve better underwriting returns. Over the five years ended 2015, years for which industry data is available from A.M. Best, our statutory ratio of underwriting expenses to premium written has averaged 18.2%, which is 7.9 points better than the independent agency segment of the private passenger automobile industry average of 26.2% for the same period.

Claims Handling

We strive for accuracy, consistency and fairness in our claim resolutions. Our claims organization employs approximately 1,300people, has several field locations in each of the states in which we do business and provides a 24-hour, seven days per week toll-free service for our customers to report claims. We predominantly use our own local adjusters and appraisers.

We are committed to the field handling of claims and we believe that it provides, when compared with alternative methods, better service to our customers and better control of the claim resolution process. We open claims branch offices in urban areas where the volume of business will support them. Customer interactions can occur with generalists (initial and continuing adjusters) and specialists (staff appraisers, field casualty representatives and special investigators) based on local market volume, density and performance.

In addition to the use of field claims handling, we use centralized claims call centers to receive initial reports of losses and to adjust simple property damage claims.

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Ratings

A.M. Best has assigned our insurance company subsidiaries a group financial strength rating of “A” (Excellent). A.M. Best assigns “A” ratings to insurers that, in A.M. Best's opinion, “have an excellent ability to meet their ongoing insurance obligations.” A.M. Best bases our rating on factors that concern policyholders and not upon factors concerning investor protection.

Regulatory Environment

Our insurance company subsidiaries are subject to regulation and supervision by insurance departments of the jurisdictions in which they are domiciled or licensed to transact business. State insurance departments have broad administrative power relating to licensing insurers and agents, regulating premium rates and policy forms, establishing reserve and investment requirements, prescribing statutory accounting methods and the form and content of statutory financial reports, and regulating methods and processes of how an insurer conducts its business. Examples of the latter include the establishment in California of auto rating factor and rate approval regulations, proscription on credit-based insurance scoring, prohibition of certain business practices with auto body repair shops, and attempts to set uniform auto body repair shop parts and labor rates.

Under state insolvency and guaranty laws, regulated insurers can be assessed or required to contribute to state guaranty funds to cover policyholder losses resulting from insurer insolvencies. Many states also require insurers, as a condition of doing business in the state, to participate in various assigned risk pools, reinsurance facilities or underwriting associations, which provide insurance coverage to individuals who otherwise are unable to purchase that coverage in the voluntary market. Participation in these involuntary plans is generally in proportion to voluntary writings of related lines of business in that state. The underwriting results of these plans traditionally have been unprofitable. The amount of premium we might be required to assume in a given state in connection with an involuntary plan may be reduced because of credit we may receive for nonstandard policies that we voluntarily write. Many states also have laws and regulations that limit an insurer's ability to exit a market. For example, certain states limit an automobile insurer's ability to cancel and non-renew policies.

State insurance departments that have jurisdiction over our insurance subsidiaries may conduct routine, on-site visits and examinations of our subsidiaries' affairs. There were no open market conduct examinations as of February 28, 2017. These examinations have from time to time given rise to regulatory orders requiring remedial, injunctive or other action on the part of an insurance subsidiary or the assessment of substantial fines or other penalties against our insurance subsidiaries, and are likely to do so in the future.

The insurance laws of the states of domicile of our insurance subsidiaries contain provisions to the effect that the acquisition or change of control of a domestic insurer or of any entity that controls a domestic insurer cannot be consummated without the prior approval of the relevant insurance regulator. In addition, certain state insurance laws require pre-acquisition notification to state agencies of a change in control with respect to a non-domestic insurance company licensed to do business in that state. Such approval requirements may deter, delay or prevent certain transactions affecting the ownership of our common stock.

We are a holding company with no business operations of our own. Consequently, our ability to pay dividends to shareholders and meet our debt payment obligations is largely dependent on dividends or other distributions from our insurance company subsidiaries, current investments and cash held. State insurance laws restrict the ability of our insurance company subsidiaries to declare shareholder dividends. These subsidiaries may not make an “extraordinary dividend” until thirty days after the applicable commissioner of insurance has received notice of the intended dividend and has either not objected or has approved the payment of the extraordinary dividend within the 30-day period. An extraordinary dividend is defined as any dividend or distribution that, together with other distributions made within the preceding twelve months, exceeds the lesser of (i) 10% of the insurer's surplus; or (ii) the insurer's net income excluding realized capital gains for the twelve-month period ended the preceding December 31st, in each case determined in accordance with statutory accounting practices. In addition, an insurer's remaining surplus after payment of a cash dividend to shareholder affiliates must be both reasonable in relation to its outstanding liabilities and adequate to its financial needs.

If a shareholder dividend does not rise to the statutory level of an extraordinary dividend, then it is an “ordinary dividend.” While an insurance company’s ability to pay an ordinary dividend does not require the approval of a state insurance department, it must file a 10-day notice of ordinary dividend with the appropriate insurance department. Insurance companies that fail to notify an insurance department of the payment of an ordinary dividend are assessed administrative fines.

State insurance laws require our subsidiaries to maintain specified levels of statutory capital and surplus. Generally, the net admitted assets of insurance companies that, subject to other applicable insurance laws and regulations, are available for transfer to the parent company cannot include the net admitted assets required to meet the minimum statutory surplus requirements of the states where the companies are licensed. In addition, for competitive reasons, our insurance company subsidiaries need to maintain adequate financial strength ratings from independent rating agencies. Both of these factors may limit the ability of our insurance subsidiaries to declare and pay dividends.

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

ITEM 1A

Risk Factors

Our business operations face a number of risks. The risks below should be read and considered with other information provided in this report and in other reports and materials we have filed with the SEC. In addition to these risks, other risks and uncertainties not presently known to us or that we currently believe to be immaterial may also materially adversely affect our business, financial condition and/or operating results.

If we fail to price accurately the risks we underwrite, profitability may be affected.

Our profitability depends on our ability to set premium rates accurately. Inflationary pressures on medical care, auto parts and repair services costs complicate pricing with accuracy. Accurate pricing is also dependent on the availability of sufficient, reliable data on which to project both severity and frequency trends and timely recognition of changes in loss cost trends. This process poses more of a challenge in markets where we have less pricing experience. We could under-price risks, which could negatively affect our profit margins, or over-price risks, which could reduce sales volume and competitiveness. Either scenario could adversely affect profitability.

Because of the significant concentration of our business in California and Florida, negative developments in the regulatory, legal or economic conditions in these states may adversely affect our profitability.

California and Florida personal auto business represented 78% of our total gross written premium in 2016. In 2016 our two largest urban zones, Los Angeles and Miami, represented 54% of total gross written premium. Our personal auto business may become further concentrated in these states and within our two largest urban zones. Consequently, the dynamic nature of regulatory, legal, competitive and economic conditions in these states affects our revenues and profitability. Further, both California and Florida have regulations that limit the after-tax return on underwriting profit allowed for an insurer. These conditions could negatively affect premium revenue and make it more expensive or less profitable for us to conduct business in these states.

We rely upon a limited number of independent agents to generate a substantial portion of our business. If we were unable to retain or increase the level of business that these independent agents place with us or increase the level of business generated by other agents, our revenues would be negatively affected.

Approximately 15% of our 10,800 independent agencies and brokers accounted for approximately 80% of our gross written premium in 2016. Further, in California, 54 agencies and brokers produced 50% of our premium in the state, accounting for 25% of our premium nationwide, and in Florida, 31 independent agents and brokers produced 50% of gross written premium in the state, accounting for 15% of our premium nationwide.

We must compete with other insurance carriers for the business of these agents in an increasingly competitive marketplace. Some competitors offer more advanced systems to quote and process business, a larger variety of products, lower prices for insurance coverage, higher commissions or more attractive cash and non-cash incentives. In addition, some of our current agencies may merge or be acquired and the surviving entity may reduce the number of insurers with which business is placed.

If we fail to establish accurate loss reserves, our financial position and results of operations may be affected.

Our loss reserves are our best estimate of the amounts that will be paid for losses incurred as well as losses incurred but not reported. The accuracy of these estimates depends on a number of factors, including but not limited to the availability of sufficient and reliable historical data, inflationary pressures on medical and auto repair costs, changes in regulation, changes in frequency and severity trends and changes in our claims settlement practices. Because of the inherent uncertainty involved in the practice of establishing loss reserves, ultimate losses paid could vary materially from recorded reserves and may adversely affect our operating results.

We are vulnerable to a reduction in business written through the independent agent distribution channel.

Reliance on the independent agency as our primary distribution channel makes us vulnerable to the growing popularity of direct to consumer distribution channels, particularly the Internet. Approximately 73% of all personal automobile insurance sold in the United States is sold direct or through captive agents (agents employed by one company or selling only one company's products) and approximately 27% is sold by independent agents. A material reduction in business generated through the independent agency channel could negatively affect our revenues and growth opportunities.

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Judicial, regulatory and legislative changes or challenges to prevailing insurance industry practices as well as technology innovations are ongoing, and could adversely affect our revenue or operating results.

Political, judicial, economic and financial developments occasionally lead to challenges or changes to established industry practices. Examples include challenges to (i) the use of credit and other rating factors in making risk selection and pricing decisions; and (ii) how Florida Personal Injury Protection (PIP) payments to providers are calculated. It is difficult to predict the outcome or impact of current challenges or to identify others that might be brought in the future, but some could result in class action litigation, regulatory sanctions and substantial fines or penalties. In addition, auto technology advancements such as driverless cars, and emerging business models, including transportation network companies and usage-based insurance, could materially impact our revenue over time.

The failure to maintain or to develop further reliable, efficient and secure information technology systems would be disruptive to our operations and diminish our ability to compete successfully.

We are highly dependent on efficient and uninterrupted performance of our information technology and business systems. These systems quote, process and service our business, and perform actuarial functions necessary for pricing and product development. These systems must also be able to undergo periodic modifications and improvements without interruptions or untimely delays in service. This capability is crucial to meeting growing customer demands for user friendly, online capabilities and convenient, quality service. We are undergoing fundamental changes and improvements to our information technology (IT) platform. A failure or delay to achieve these improvements could interrupt certain processes or degrade business operations and could place us at a competitive disadvantage. Additionally, failure to maintain secure systems could result in unauthorized access to or theft of sensitive customer or company data, misappropriation of funds or disruption to our systems.

The inability to recruit, develop and retain key personnel could prevent us from executing our key business and financial objectives.

The highly competitive nature of our industry, along with the advantages that larger, better-known firms possess in the recruiting process, poses a challenge with respect to both employee retention and recruitment efforts. Successful execution of our key business and financial objectives depends, in part, on our ability to retain, develop or find qualified successors for key personnel, including our Chief Executive Officer, James Gober, and our other four named executive officers - each of whom, with the exception of our chief financial officer, has an employment agreement that expires in August 2017. The announcement of the loss of key personnel or the delay or inability to retain or appoint successors could negatively affect our stock price, our retention of other key personnel, or hinder us in achieving our business and financial objectives given the specialized knowledge of each of our executive officers and the limited pool of candidates with experience relevant to our operations.

Extra-contractual losses arising from bad faith claims could materially reduce our profitability.

In California and Florida, courts and laws are often viewed as unfavorable toward an insurer in litigation brought against it by policyholders and third-party claimants. This tends to increase our exposure to monetary damages beyond policy limits, in what are commonly referred to as "extra-contractual" or "bad faith" claims. Such claims may result in losses that materially reduce our profitability.

Our goodwill may be at risk for impairment if actual results regarding growth and profitability vary from our estimates.

At December 31, 2016, we had $75.3 million, or approximately $6.82 per share, of goodwill. In accordance with the Goodwill topic of the FASB Accounting Standards Codification, we perform impairment test procedures for goodwill on an annual basis. These procedures require us to calculate the fair value of goodwill, compare the result to our carrying value and record the amount of any shortfall as an impairment charge.

We use a variety of methods to test goodwill for impairment, including estimates of future discounted cash flows and comparisons of our market value to our major competitors. Our cash flow projections rely on assumptions that are subject to uncertainty, including premium growth, loss and loss adjustment expense ratios, interest rates and capital requirements. If actual results differ significantly from these assumptions, the fair value of our goodwill could fall below our carrying value and we could be required to record an impairment charge.

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

ITEM 1B

Unresolved Staff Comments

None.

ITEM 2

Properties

Our insurance subsidiaries lease 175,318 square feet of office space in numerous cities throughout the United States. All of these leases expire within seven years. The most significant leased office spaces are located in Miami, Florida and Cerritos, California. Refer to Note 14 – Commitments and Contingencies to the Consolidated Financial Statements for further information about leases. We own a 33,515 square foot call center in McAllen, Texas, a 50,900 square foot call center in Tucson, Arizona, and three properties in Birmingham, Alabama - a 116,433 square foot building, a 62,808 square foot warehouse and a 120,493 square foot building which serves as our corporate headquarters. The properties identified above are used by all segments reported in the Notes to Consolidated Financial Statements.

ITEM 3

Legal Proceedings

Refer to Note 13 – Legal and Regulatory Proceedings to the Consolidated Financial Statements for a discussion of our material legal proceedings. Except for those legal proceedings disclosed in Note 13 to the Consolidated Financial Statements, we believe that none of the legal proceedings to which we are subject meet the threshold for disclosure under this item.

ITEM 4

Mine Safety Disclosures

Not applicable.

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

PART II

ITEM 5

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

We had 58 registered holders of record as of February 17, 2017. Our common stock is listed and traded on the NASDAQ Global Select Market under the symbol IPCC. The stock prices in the following table are over-the-counter market quotations that reflect transactions between dealers; retail markups and commissions are not reflected. These prices may not represent actual transactions. Our closing per-share stock price on February 17, 2017, was $89.00. Refer to Note 12 – Statutory Information to the Consolidated Financial Statements for information about restrictions on transfer of funds and assets of subsidiaries.

Infinity Quarterly High and Low Stock Prices and Dividends Paid by Quarter

For the quarter ended	High		Low		Close		Dividends  Declared and Paid Per Share		Return to  Shareholders (excluding  dividends) (a)		Return to  Shareholders (including  dividends) (b)
March 31, 2015	$	87.89	$	69.87	$	82.05	$	0.43	6.2	%	6.8	%
June 30, 2015	83.03		70.21		75.84		0.43		(7.6	)%	(7.0	)%
September 30, 2015	82.57		73.90		80.54		0.43		6.2	%	6.8	%
December 31, 2015	87.61		78.41		82.23		0.43		2.1	%	2.6	%
March 31, 2016	$	84.10	$	73.26	$	80.50	$	0.52	(2.1	)%	(1.5	)%
June 30, 2016	86.79		73.92		80.66		0.52		0.2	%	0.8	%
September 30, 2016	86.74		76.37		82.63		0.52		2.4	%	3.1	%
December 31, 2016	90.50		73.80		87.90		0.52		6.4	%	7.0	%
For the twelve months ended
December 31, 2015	$	87.89	$	69.87	$	82.23	$	1.72	6.4	%	8.7	%
December 31, 2016	90.50		73.26		87.90		2.08		6.9	%	9.4	%

(a) Calculated by dividing the change in share price during the period presented by the share price at the beginning of the period presented.

(b) Calculated by dividing (i) the sum of the amount of the dividend, assuming dividend reinvestment, and the change in share price during the period presented; by (ii) the share price at the beginning of the period presented.

The information required under the heading “Equity Compensation Plan Information” is provided under Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters herein.

During the fiscal year ended December 31, 2016, all of our equity securities sold were registered under the Securities Act of 1933, as amended.

8

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

The following table presents information with respect to purchases of our common stock made during the three months ended December 31, 2016, by us or any of our "affiliated purchasers" as defined in Rule 10b-18(a)(3) under the Exchange Act:

Period	Total Number of Shares Purchased	Average Price Paid per Share (a)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value that May Yet Be Purchased Under the Plans or Programs (b)
October 1, 2016 - October 31, 2016	3,100	$	82.37	3,100	$	35,896,371
November 1, 2016 - November 30, 2016	7,700	$	81.57	7,700	$	35,266,730
December 1, 2016 - December 31, 2016	4,363	$	88.17	4,363	$	34,880,451
Total	15,163	$	83.63	15,163	$	34,880,451

(a) Average price paid per share excludes commissions.

(b) On November 4, 2014, our Board of Directors increased the authority under our current share and debt repurchase plan to a total of $75.0 million and extended the date to execute the program to December 31, 2016, from December 31, 2014. On November 1, 2016, our Board approved the extension of the date to execute the program from December 31, 2016, to December 31, 2017.

The following graph shows the comparison of cumulative total shareholder return on our common stock over the five years ended December 31, 2016. The return is measured by dividing (i) the sum of the cumulative amount of dividends, assuming dividend reinvestment, and the change in share price during the periods presented; by (ii) the share price at the beginning of the periods presented. The graph demonstrates cumulative total returns for Infinity, the NASDAQ OMX Global Total Return Index for NASDAQ US Benchmark and the NASDAQ OMX Global Total Return for Industrial Classification Benchmark (ICB): 8500 Insurance (Supersector).

Cumulative Total Return as of December 30, 2016

(Assumes a $100 investment at the close of trading on December 30, 2011)

	12/30/2011		12/31/2012		12/31/2013		12/31/2014		12/31/2015		12/30/2016
IPCC	$	100.00	$	104.27	$	130.94	$	143.98	$	156.56	$	171.60
NASDAQ US	100.00		116.43		155.41		174.78		175.62		198.47
ICB: 8500 Insurance	100.00		118.33		167.61		190.34		188.94		227.55

9

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

ITEM 6

Selected Financial Data

($ in thousands, except per share data)	2016			2015			2014			2013			2012
Gross written premium	$	1,401,414		$	1,387,866		$	1,360,870		$	1,339,819		$	1,254,929
Gross written premium growth	1.0		%	2.0		%	1.6		%	6.8		%	15.9		%
Net written premium	1,392,459			1,373,287			1,347,604			1,329,892			1,247,198
Net earned premium	1,391,664			1,346,564			1,325,935			1,302,525			1,184,090
Total revenues	1,538,706			1,484,032			1,461,709			1,443,233			1,349,585
Loss & LAE ratio	78.8		%	76.9		%	75.5		%	78.1		%	79.6		%
Underwriting ratio	17.9		%	18.7		%	19.6		%	19.9		%	21.1		%
Combined ratio	96.7		%	95.6		%	95.1		%	98.0		%	100.7		%
Net earnings	$	43,085		$	51,481		$	57,201		$	32,633		$	24,319
Net earnings per diluted share	$	3.88		$	4.51		$	4.95		$	2.80		$	2.04
Return on average common shareholders’ equity	6.2		%	7.4		%	8.4		%	5.0		%	3.7		%
Cash and investments	$	1,576,514		$	1,538,536		$	1,611,594		$	1,582,238		$	1,560,116
Total assets	2,402,601			2,385,135			2,382,998			2,315,263			2,301,413
Unpaid losses and LAE	685,455			669,965			668,177			646,577			572,894
Unearned premium	614,347			616,649			589,260			566,004			538,142
Long-term debt	273,591			273,383			273,186			272,998			272,820
Total liabilities	1,703,414			1,697,540			1,685,339			1,658,505			1,645,170
Total shareholders’ equity	699,187			687,595			697,659			656,758			656,242
Cash dividends per common share	$	2.08		$	1.72		$	1.44		$	1.20		$	0.90
Common shares outstanding	11,044			11,151			11,483			11,504			11,605
Book value per common share	$	63.31		$	61.66		$	60.75		$	57.09		$	56.55
Ratios:
Debt to total capital	28.2		%	28.6		%	28.3		%	29.5		%	29.5		%
Debt to tangible capital	30.6		%	31.0		%	30.6		%	32.1		%	32.1		%
Interest coverage	5.4			6.3			6.9			4.2			2.7

10

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 7

Management’s Discussion and Analysis (MD&A) of Financial Condition and Results of Operations

TABLE OF CONTENTS

	Page
Overview	12
Critical Accounting Policies	12
Insurance Reserves	13
Other-than-Temporary Losses on Investments	15
Accruals for Litigation	16
Goodwill	16
Liquidity and Capital Resources	16
Ratios	16
Sources of Funds	16
Uses of Funds	17
Contractual Obligations	17
Investments	17
General	17
Receivable for Securities Sold	19
Payable for Securities Purchased	19
Exposure to Market Risk	20
Interest Rate Risk	20
Credit Risk	20
Equity Price Risk	21
Results of Operations	22
Underwriting	22
Premium	22
Profitability	23
Installment and Other Fee Income	25
Net Investment Income	25
Net Realized Gains on Investments	26
Other Income	26
Interest Expense	26
Corporate General and Administrative Expenses	27
Other Expenses	27
Income Taxes	27

Refer to Cautionary Statement Regarding Forward-Looking Statements on page 1.

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

Gross written premium grew1.0% in 2016 compared with 2015 primarily from growth in Texas personal auto and countrywide Commercial Vehicle partially offset by declines in Florida as well as states where we are running off business. Refer to Results of Operations – Underwriting – Premiumfor a more detailed discussion of our gross written premium.

Net earnings and diluted earnings per share for the year ended December 31, 2016, were $43.1 million and $3.88, respectively, compared with $51.5 million and $4.51, respectively, for 2015. The decrease in net earnings and diluted earnings per share for the year ended December 31, 2016, was primarily due to a decrease in underwriting income as the result of an increase in the accident year combined ratio from97.8% at December 31, 2015, to 98.4% at December 31, 2016, and a decrease in favorable development on prior accident year loss and LAE reserves.

Included in net earnings for the year ended December 31, 2016, was $15.6 million ($24.0 million pre-tax) of favorable development on prior accident year loss and LAE reserves. This development was primarily due to decreases in severity estimates in Florida bodily injury and personal injury protection coverages related to accident years 2015 and prior, partially offset by increases in severity estimates in California material damage and bodily injury coverages as well as bodily injury coverages in our commercial vehicle product, all related to accident year 2015. This compares with $18.8 million ($28.9 million pre-tax) of favorable development for 2015. The following table displays GAAP combined ratio results by accident year developed through December 31, 2016:

	Accident Year Combined Ratio Developed Through										Prior Accident Year (Favorable)/Unfavorable Development ($ in millions)
	Dec.		Mar.		Jun.		Sep.		Dec.		YTD		YTD
	2015		2016		2016		2016		2016		2016		2016
Accident year
Prior													$	0.3
2007	92.1	%	92.1	%	92.1	%	92.1	%	92.1	%	0.0	%	0.2
2008	91.1	%	91.1	%	91.1	%	91.1	%	91.1	%	(0.0	)%	(0.2		)
2009	92.4	%	92.4	%	92.4	%	92.4	%	92.4	%	0.0	%	0.3
2010	99.4	%	99.3	%	99.3	%	99.3	%	99.3	%	(0.2	)%	(1.4		)
2011	100.2	%	100.0	%	100.0	%	100.0	%	99.8	%	(0.3	)%	(3.3		)
2012	100.1	%	99.9	%	99.8	%	99.8	%	99.6	%	(0.4	)%	(5.3		)
2013	95.5	%	95.3	%	95.1	%	94.9	%	94.8	%	(0.7	)%	(9.1		)
2014	95.4	%	95.0	%	94.6	%	94.3	%	94.4	%	(1.0	)%	(13.1		)
2015	97.8	%	98.3	%	98.0	%	98.4	%	98.3	%	0.6	%	7.7
													$	(24.0	)

Refer to Results of Operations – Underwriting – Profitability for a more detailed discussion of our underwriting results.

Pre-tax net investment income declined from $36.8 million in 2015 to $35.5 million in 2016primarily due to a decline of $0.9 million in make whole proceeds and a decrease in book yield caused by continued low reinvestment yields.

Our book value per share increased 2.7% from $61.66 at December 31, 2015, to $63.31 at December 31, 2016. This increase was primarily due to net earnings partially offset by shareholder dividends and share repurchases.

Critical Accounting Policies

(Refer to Note 1- Significant Reporting and Accounting Policies to the Consolidated Financial Statements.)

The preparation of financial statements requires management to make estimates and assumptions that can have a significant effect on amounts reported in the financial statements. As more information becomes known, these estimates and assumptions could change and thus impact amounts reported in the future. We believe that the establishment of insurance reserves, the determination of “other-than-temporary” impairment on investments, accruals for litigation and valuation of goodwill are the areas where the degree of judgment required to determine amounts recorded in the financial statements makes the accounting policies critical.

12

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

Insurance Reserves

Insurance reserves, or unpaid losses and LAE, are our best estimate of the ultimate amounts that will be paid for (i) all claims that have been reported up to the date of the current accounting period but have not yet been paid; (ii) all claims that have occurred but have not yet been reported to us (“incurred but not reported” or IBNR); and (iii) unpaid claim settlement expenses.

Incurred but not reported (IBNR) reserves are established for the quarter and year-end based on a quarterly reserve analysis by our actuarial staff. Various standard actuarial tests are applied to subsets of the business at a state, product and coverage basis. Included in the analyses are the following:

• Paid and incurred extrapolation methods utilizing paid and incurred loss development to predict ultimate losses;

• Paid and incurred frequency and severity methods utilizing paid and incurred claims count development and paid and incurred claims cost development to predict ultimate average frequency (claims count per policy or auto insured) or ultimate average severity (cost per claim); and

• Paid and incurred Bornhuetter-Ferguson methods adding expected development to actual paid or incurred experience to project ultimate losses.

For each subset of the business evaluated, each test generates a point estimate based on development factors applied to known paid and incurred losses and claim counts. Selections of development factors are based on historical loss development patterns with adjustment based on professional actuarial judgment where anticipated development patterns vary from those seen historically. Deviations from historical loss development patterns may occur due to changes in items such as claims settlement and payment practices, business mix, coverage limits and deductibles, inflation trends in auto repair and medical costs and legal and regulatory trends affecting claims settlements. This estimation of IBNR requires selection of hundreds of such factors. A single point estimate for the subset being evaluated is then selected from the results of various tests, based on a combination of simple averages of the point estimates of the various tests and selections based on professional actuarial judgment.

Estimating the liability for unpaid losses and LAE is inherently judgmental and is influenced by factors that are subject to significant variation. When possible, we make quantitative and qualitative modifications to, or selections of, such factors where deviations from historical trends in these key areas exist. We analyze the adequacy of reserves using actuarial data and analytical reserve development techniques, including projections of ultimate paid losses, to determine the ultimate amount of reserves. The list of historical trends provided above are non-exhaustive examples of major factors that we take into account in developing these estimates.

We review loss reserve adequacy quarterly by accident year at a state, product and coverage level. We adjust reserves as additional information becomes known and reflect such adjustments in current year operations.

During each quarterly review by the internal actuarial staff, using the additional information obtained with the passage of time, factor selections are updated, which in turn adjust the ultimate loss estimates and held IBNR reserves for the subset of the business and accident periods affected by such updates. The actuarial staff also performs various tests to estimate ultimate average severity and frequency of claims. Severity represents the average cost per claim and frequency represents the number of claims per auto or per policy. As an overall review, the staff then evaluates for reasonableness loss and LAE ratios by accident year by state, by product and by coverage.

Factors that can significantly affect actual frequency include, among others, changes in weather, driving patterns or trends and class of driver. Changes in claims settlement and reserving practices can affect estimates of average frequency and severity. Auto repair and medical cost inflation, jury awards and changes in policy limit profiles can affect loss severity. Estimation of LAE reserves is subject to variation from factors such as the use of outside adjusters, frequency of lawsuits, claims staffing and experience levels.

We believe that our relatively low average policy limit and concentration on the nonstandard auto driver classification generally help stabilize fluctuations in frequency and severity. For example, approximately 90% of our policies include only the state-mandated minimum policy limits for bodily injury, which somewhat mitigates the challenge of estimating average severity. These low limits tend to reduce the exposure of the loss reserves on this coverage to medical cost inflation on severe injuries since the minimum policy limits will limit the total payout.

Ultimate loss estimates, excluding extra-contractual obligation (ECO) losses, usually experience the greatest adjustment within the first 12 to 18 months after the accident year. Accordingly, the highest degree of uncertainty is associated with reserves for the current accident year because the current accident year contains the greatest proportion of losses that have not been reported or settled, and we must estimate these elements as of the current reporting date. The proportion of losses with these characteristics typically diminishes in subsequent years.

As compared with loss and LAE reserves held at December 31, 2016, our best estimate of reserve ranges using indicated results from utilized estimates of loss and LAE could range from a deficiency of 8%, or $54.6 million, to a redundancy of 11%, or $71.4

13

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

million. These ranges do not present a forecast of future redundancy or deficiency since actual development of future losses on current loss reserves may vary materially from those estimated in the year-end 2016 reserve tests. Reserves recorded are our best estimate of the ultimate amounts that will be paid.

As noted above, the highest degree of uncertainty is associated with reserves in the first 12 to 18 months. The following table displays the accident year combined ratios developed through December 31, 2016, for the four most recent accident years along with the potential combined ratios based on the low and high outcomes of the loss and LAE tests utilized:

	Combined Ratios Developed Through
	December 31, 2016
	Low		As Reported		High
Accident year
2013	94.4	%	94.8	%	95.2	%
2014	93.6	%	94.4	%	94.8	%
2015	96.9	%	98.3	%	99.3	%
2016	96.2	%	98.4	%	100.3	%

ECO losses represent estimates of losses incurred from actual or threatened litigation by claimants alleging improper handling of claims by us, which are commonly known as “bad faith” claims. Oftentimes, the onset of such litigation, subsequent discovery, settlement discussions, trial and appeal may occur several years after the date of the original claim. Because of the infrequent nature of such claims, we accrue a liability for each case based on the facts and circumstances in accordance with the Loss Contingency topic of the FASB Accounting Standards Codification, which requires that such loss be probable and estimable. As such, no reserve is permissible for IBNR for threatened litigation yet to occur on accidents with dates prior to the balance sheet date. Consequently, the effect of setting accruals for such items likely will result in unfavorable reserve development in the following reserve tables.

Calendar year losses incurred for ECOs, gross and net of reinsurance, over the past five calendar years have ranged from $1.1 million to $4.2 million, averaging $2.1 million per year. Losses for 2016, 2015 and 2014 have been $1.1 million, $2.4 million and $4.2 million, respectively.

We find it useful to evaluate accident year loss and LAE ratios by calendar year to monitor reserve development. The following table presents, by accident year, loss and LAE ratios (including IBNR):

	Accident Year Loss and LAE Ratios Through Calendar Year End
	2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
Accident year
2007	71.9	%	72.5	%	71.0	%	69.8	%	69.5	%	69.1	%	69.0	%	68.9	%	68.9	%	68.9	%
2008			73.5	%	71.9	%	69.9	%	69.6	%	69.4	%	69.2	%	69.0	%	69.0	%	68.9	%
2009					74.2	%	71.0	%	71.0	%	70.7	%	70.4	%	70.4	%	70.5	%	70.5	%
2010							75.1	%	76.7	%	76.8	%	76.9	%	76.5	%	76.7	%	76.6	%
2011									74.9	%	77.3	%	77.6	%	77.4	%	77.5	%	77.1	%
2012											78.2	%	78.7	%	79.0	%	79.0	%	78.5	%
2013													77.9	%	77.0	%	75.6	%	75.0	%
2014															76.9	%	75.8	%	74.8	%
2015																	79.1	%	79.7	%
2016																			80.5	%

14

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following table summarizes the effect on each calendar year of reserve re-estimates, net of reinsurance, for each of the accident years presented. The total of each column details the amount of reserve re-estimates made in the indicated calendar year and shows the accident years to which the re-estimates are applicable.

	Calendar Year Impact of Reserve Development by Accident Year (Favorable) Unfavorable Reserve Development
($ in millions)	2007			2008			2009			2010			2011			2012			2013			2014			2015			2016
Accident year
Prior	$	(13.5	)	$	(35.7	)	$	(34.9	)	$	(15.6	)	$	(4.3	)	$	(1.4	)	$	(0.4	)	$	(1.1	)	$	(0.0	)	$	0.3
2007				6.3			(15.6		)	(12.3		)	(2.8		)	(3.9		)	(1.5		)	(0.7		)	(0.2		)	0.2
2008							(14.8		)	(18.6		)	(2.8		)	(1.6		)	(2.0		)	(1.6		)	(0.7		)	(0.2		)
2009										(27.5		)	0.1			(2.6		)	(3.0		)	0.8			0.3			0.3
2010													14.3			1.1			0.5			(3.4		)	1.8			(1.4		)
2011																24.7			2.8			(2.0		)	0.9			(3.3		)
2012																			6.4			2.5			0.1			(5.3		)
2013																						(11.9		)	(17.1		)	(9.1		)
2014																									(14.0		)	(13.1		)
2015																												7.7
Total	$	(13.5	)	$	(29.4	)	$	(65.4	)	$	(73.9	)	$	4.5		$	16.2		$	2.9		$	(17.4	)	$	(28.9	)	$	(24.0	)

The $24.0 millionfavorable reserve development during the twelve months ended December 31, 2016, was primarily due to decreases in severity estimates in Florida bodily injury and personal injury protection coverages related to accident years 2015 and prior, partially offset by increases in severity estimates in California material damage and bodily injury coverages as well as bodily injury coverages in our commercial vehicle product, all related to accident year 2015.

The $28.9 millionfavorable reserve development during the twelve months ended December 31, 2015, was primarily due to decreases in severity estimates in Florida bodily injury coverages and California bodily injury loss adjustment expense estimates, all related to accident years 2013 and 2014.

The $17.4 millionfavorable reserve development during the twelve months ended December 31, 2014, was primarily due to decreases in California property damage severity estimates and in both severity and frequency estimates in Florida bodily injury coverages, all related to accident year 2013.

Other-than-Temporary Losses on Investments

The determination of whether unrealized losses on investments are “other-than-temporary” requires judgment based on subjective as well as objective factors. Factors we considered and resources we used in our determination include:

• whether the unrealized loss is credit-driven or a result of changes in market interest rates;

• the length of time the security’s market value has been below its cost;

• the extent to which fair value is less than cost basis;

• the intent to sell the security;

• whether it is more likely than not that there will be a requirement to sell the security before its anticipated recovery;

• historical operating, balance sheet and cash flow data contained in issuer SEC filings;

• issuer news releases;

• near-term prospects for improvement in the issuer and/or its industry;

• industry research and communications with industry specialists; and

• third-party research and credit rating reports.

We regularly evaluate our investment portfolio for potential impairment by evaluating each security position that has either of the following: a fair value of less than 95% of its book value or an unrealized loss that equals or exceeds $100,000. Since accurately predicting if or when a specific security will become other-than-temporarily impaired is not possible, total impairment charges could be material to the results of operations in a future period.

For fixed maturity securities that are other-than-temporarily impaired, we assess our intent to sell and the likelihood that we will be required to sell the security before recovery of our amortized cost. If a fixed maturity security is considered other-than-temporarily impaired but we do not intend to and are not more than likely to be required to sell the security before our recovery to amortized cost, the amount of the impairment is separated into a credit loss component and the amount due to all other factors. The excess

15

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

of the amortized cost over the present value of the expected cash flows determines the credit loss component of an impairment charge on a fixed maturity security. The present value is determined using the best estimate of cash flows discounted at (i) the effective interest rate implicit at the date of acquisition for non-structured securities; or (ii) the book yield for structured securities. The techniques and assumptions for determining the best estimate of cash flows vary depending on the type of security. We recognize the credit loss component of an impairment charge in net earnings and the non-credit component in accumulated other comprehensive income. If we intend to sell or will, more likely than not, be required to sell a security, the entire amount of the impairment is treated as a credit loss.

Accruals for Litigation

We continually evaluate potential liabilities and reserves for litigation using the criteria established by the Loss Contingency topic of the FASB Accounting Standards Codification. Under this guidance, we may only record reserves for loss if the likelihood of occurrence is probable and the amount is reasonably estimable. We consider each legal action and record reserves for losses in accordance with this guidance. We believe the current assumptions and other considerations used to estimate potential liability for litigation are appropriate. Certain claims and legal actions have been brought against us for which, under the rules described above, no loss has been accrued. While it is not possible to know with certainty the ultimate outcome of these claims or lawsuits, we do not expect them to have a material effect on our financial condition or liquidity. Refer to Note 13 – Legal and Regulatory Proceedings to the Consolidated Financial Statements for a discussion of our material legal proceedings.

Goodwill

In accordance with the Goodwill topic of the FASB Accounting Standards Codification, we perform impairment test procedures for goodwill on an annual basis. These procedures require us to calculate the fair value of goodwill, compare the result to our carrying value and record the amount of any shortfall as an impairment charge.

We performed this test as of October 1, 2016, using a variety of methods, including estimates of future discounted cash flows and comparisons of our market value to that of our major competitors. Our cash flow projections rely on assumptions that are subject to uncertainty, including premium growth, loss and LAE ratios, interest rates and capital requirements.

The October 1, 2016, test results indicated that the fair value of our goodwill exceeded our carrying value and therefore no impairment charge was required at that date. Additionally, there was no indication of impairment at December 31, 2016.

Liquidity and Capital Resources

Ratios

The National Association of Insurance Commissioners’ (NAIC) model law for risk-based capital (RBC) provides formulas to determine the amount of capital that an insurance company needs to ensure that it has an acceptable expectation of not becoming financially impaired. At December 31, 2016, the capital ratios of all our insurance subsidiaries exceeded the RBC requirements.

Sources of Funds

We are a holding company and our insurance subsidiaries conduct our operations. Accordingly, we will have continuing cash needs for administrative expenses, the payment of interest on borrowings, shareholder dividends, share repurchases and taxes.

Funds to meet expenditures at the holding company come primarily from dividends and tax payments from the insurance subsidiaries as well as cash and investments held by the holding company. The ordinary dividend capacity and total payment activity, including extraordinary dividends, of our insurance companies for the two most recent years, as well as the dividend capacity for the upcoming year, are shown in the following table ($ in thousands):

	2017		2016		2015
Maximum ordinary dividends available to Infinity	$	59,343	$	59,623	$	68,143
Dividends paid from subsidiaries to parent	N/A		60,000		68,450

As of December 31, 2016, the holding company had $156.5 million of cash and investments. In 2017, our insurance subsidiaries may pay us up to $59.3 million in ordinary dividends without prior regulatory approval. Rating agency capital requirements, among other factors, will be considered when determining the actual amount of dividends paid in 2017.

16

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

Our insurance subsidiaries generate liquidity to satisfy their obligations, primarily by collecting and investing premiums in advance of paying claims and generating investment income on their $1.4 billion investment portfolio. Our insurance subsidiaries generated positive cash flows from operations of approximately $114.0 million in 2016, $80.2 million in 2015 and $117.9 million in 2014.

At December 31, 2016, we had $275 million principal outstanding of 5.0% senior notes due September 2022 (the "5.0% Senior Notes"). The 5.0% Senior Notes accrue interest at 5.0%, payable semiannually each March and September. Refer to Note 4 – Long-Term Debt to the Consolidated Financial Statements for more information on our long-term debt.

In August 2014 we renewed our agreement for a $50 million three-year revolving credit facility (the “Credit Agreement”) that requires us to meet certain financial and other covenants. We are currently in compliance with all covenants under the Credit Agreement, and as of December 31, 2016, there were no borrowings outstanding against it.

On February 29, 2016, we filed a "shelf" registration statement with the Securities and Exchange Commission registering securities, and as long as it remains effective, it will allow us to sell any combination of senior or subordinated debt securities, common stock, preferred stock, warrants, depositary shares, purchase contracts and units in one or more offerings should we choose to do so in the future. This shelf registration statement expires March 1, 2019.

Uses of Funds

In February 2017 we increased our quarterly dividend to $0.58 per share from $0.52 per share. At this current amount, our 2017 annualized dividend payments will be approximately $25.6 million.

Our Board of Directors previously authorized a share and debt repurchase program. On November 4, 2014, our Board of Directors increased the authority to a total of $75 million and extended the date to execute the program from December 31, 2014, to December 31, 2016. On November 1, 2016, our Board approved the extension of the date to execute the program from December 31, 2016, to December 31, 2017. During 2016 we repurchased 131,829 shares at an average cost, excluding commissions, of $79.41 per share. As of December 31, 2016, we had $34.9 million of authority remaining under this program.

We believe that cash balances, cash flows generated from operations or borrowings, and maturities and sales of investments are adequate to meet our future liquidity needs and those of our insurance subsidiaries.

Contractual Obligations

Our contractual obligations and those of our insurance subsidiaries as of December 31, 2016, were ($ in thousands):

Due in	Long-Term Debt &  Interest		Operating  Leases		Capital Leases		Loss and  LAE Reserves (a)		Post-retirement Benefit  Payments (b)		Total
2017	$	13,750	$	4,542	$	722	$	426,509	$	295	$	445,818
2018 - 2019	27,500		6,278		1,409		190,922		576		226,685
2020 - 2021	27,500		3,315		535		40,120		564		72,034
2022 and after	288,750		1,225		0		27,903		1,549		319,427
Total	$	357,500	$	15,360	$	2,666	$	685,455	$	2,983	$	1,063,964

________________

(a) We base the payout pattern for reserves for losses and LAE upon historical payment patterns and they do not represent actual contractual obligations. The timing and amounts ultimately paid will vary from these estimates, as discussed above under Critical Accounting Policies and in Note 1 – Significant Reporting and Accounting Policies to the Consolidated Financial Statements.

(b) The payments for post-retirement benefits do not represent actual contractual obligations. The payments presented represent the best estimate of future contributions.

Investments

General

Our Investment Committee, which is composed exclusively of independent directors, has approved our investment guidelines. The guidelines specifically address overall investment objectives, permissible assets, prohibited assets, permitted exceptions to the guidelines and credit quality.

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

We engage three unaffiliated money managers for our fixed income portfolio and we own a Vanguard exchange-traded fund designed to track the FTSE Global All Cap Index for our equity portfolio. The investment managers conduct, in accordance with our investment guidelines, all of our investment purchases and sales. Our Chief Financial Officer and the Investment Committee, at least quarterly, review the performance of the money managers and compliance with our investment guidelines. National banks unaffiliated with the money managers maintain physical custody of securities.

Our consolidated investment portfolio at December 31, 2016, contained $1.4 billion in fixed maturity securities, $90.6 million in equity securities and $2.9 million of short-term investments, all carried at fair value with unrealized gains and losses reported in accumulated other comprehensive income, a separate component of shareholders' equity, on an after-tax basis. At December 31, 2016, we had pre-tax net unrealized losses of$2.5 million on fixed maturities and pre-tax net unrealized gains of $13.6 million on equity securities. Combined, the pre-tax net unrealized gain increased by $0.1 million for the twelve months ended December 31, 2016.

Approximately 91.3% of our fixed maturity portfolio at December 31, 2016, was rated “investment grade” (credit rating of AAA to BBB) by nationally recognized rating agencies. The average credit rating of our fixed maturity portfolio was AA- at December 31, 2016. Investment grade securities generally bear lower yields and lower degrees of risk than those that are unrated or non-investment grade. We believe that a high quality investment portfolio is more likely to generate stable and predictable investment returns.

Because we carry all of these securities at fair value in the Consolidated Balance Sheets, there is virtually no effect on liquidity or financial condition upon the sale and ultimate realization of unrealized gains and losses. The average duration of our fixed maturity portfolio was 3.3 years at December 31, 2016.

Fair values of instruments are based on (i) quoted prices in active markets for identical assets (Level 1); (ii) quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs are observable in active markets (Level 2); or (iii) valuations derived from valuation techniques in which one or more significant inputs are unobservable in the marketplace (Level 3).

Our Level 1 securities are U.S. Treasury securities, an exchange-traded fund and equity securities held in a rabbi trust. Our Level 2 securities are comprised of securities whose fair value was determined using observable market inputs. Our Level 3 securities are comprised of (i) securities for which there is no active or inactive market for similar instruments; (ii) securities whose fair value is determined based on unobservable inputs; and (iii) securities that nationally recognized statistical rating organizations do not rate.

A third party nationally recognized pricing service provides the fair value of securities in Level 2. We periodically review the third party pricing methodologies used by our primary independent pricing service to verify that prices are determined in accordance with fair value guidance in U.S. GAAP, including the use of observable market inputs, and to ensure that assets are properly classified in the fair value hierarchy.

Further, for all Level 2 securities, we compare the market price from the primary independent third party pricing service that is used to value the security with market prices from recent sales activity or, for those securities with no recent sales activity, with prices from another independent third party pricing service or non-binding broker quotes. This comparison is performed in order to determine if the price obtained from the primary independent pricing service is a reasonable price to use in our financial statements. We made no adjustments to the prices obtained from the primary independent pricing service as a result of this comparison.

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

Summarized information for our investment portfolio at December 31, 2016, follows ($ in thousands):

	Amortized Cost		Fair Value		% of Total Fair Value
Fixed maturities:
U.S. government	$	62,808	$	62,485	4.2	%
State and municipal	477,834		476,331		32.1	%
Mortgage- and asset-backed:
Residential mortgage-backed securities	343,095		340,367		22.9	%
Commercial mortgage-backed securities	70,676		69,801		4.7	%
Asset-backed securities (ABS):
Auto loans	25,636		25,671		1.7	%
Equipment leases	7,589		7,610		0.5	%
All other	4,337		4,327		0.3	%
Total ABS	37,562		37,608		2.5	%
Total mortgage- and asset-backed	451,333		447,776		30.2	%
Corporates
Investment grade	286,496		286,983		19.3	%
Non-investment grade	114,189		116,592		7.9	%
Total corporates	400,685		403,575		27.2	%
Total fixed maturities	1,392,660		1,390,167		93.7	%
Equity securities	77,013		90,640		6.1	%
Short-term investments	2,909		2,907		0.2	%
Total investment portfolio	$	1,472,582	$	1,483,714	100.0	%

The following table presents the returns, gross of investment expenses, of our investment portfolios based on quarterly investment balances as reflected in the financial statements, excluding equities invested in a rabbi trust:

	Twelve months ended December 31,
	2016		2015		2014
Return on fixed income securities:
Excluding realized gains and losses	2.6	%	2.6	%	2.5	%
Including realized gains and losses	2.6	%	2.7	%	2.8	%
Return on equity securities:
Excluding realized gains and losses	2.9	%	2.8	%	3.0	%
Including realized gains and losses	6.6	%	5.4	%	4.7	%
Return on all investments:
Excluding realized gains and losses	2.5	%	2.5	%	2.4	%
Including realized gains and losses	2.7	%	2.7	%	2.7	%

Receivable for Securities Sold

The $0.8 million balance in receivable for securities sold at December 31, 2016, represents fixed income securities sold in the normal course of business that had not settled prior to the end of the year.

Payable for Securities Purchased

The $13.9 million and $7.3 million balances in payable for securities purchased at December 31, 2016, and December 31, 2015, respectively, represent fixed income securities and treasury stock purchased in the normal course of business that had not settled prior to the end of their respective years.

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

Exposure to Market Risk

Market risk represents the potential economic loss arising from adverse changes in the fair value of financial instruments. Our exposures to market risk relate principally to our investment portfolio, which is exposed primarily to interest rate risk and credit risk and, to a lesser extent, equity price risk.

Our fixed maturity portfolio is comprised of substantially all fixed rate investments with primarily short-term and intermediate-term maturities. We strive to maintain a "laddered" portfolio, with maturities and prepaid principal spread across the maturity spectrum. This portfolio composition allows flexibility in reacting to fluctuations of interest rates. In addition, higher market rates available for new funds available for investment partially mitigate the risk of loss in fair value. We manage the portfolios of our insurance companies to achieve an adequate risk-adjusted return while maintaining sufficient liquidity to meet policyholder obligations.

Interest Rate Risk

The fair values of our fixed maturity investments fluctuate in response to changes in market interest rates. Increases and decreases in prevailing interest rates generally translate into decreases and increases, respectively, in fair values of those instruments. Additionally, the creditworthiness of the issuer, prepayment options, relative values of alternative investments, the liquidity of the instrument and other general market conditions may affect fair values of interest rate sensitive instruments.

The following table summarizes the estimated effects of hypothetical increases and decreases in interest rates resulting from parallel shifts in market yield curves on our fixed maturity portfolio and long-term debt. We assume that we will realize the effects immediately upon the change in interest rates. The hypothetical changes in market interest rates do not reflect best or worst case scenarios. Variations in market interest rates could produce significant changes in the timing of repayments due to prepayment options available. For these reasons, actual results might differ from those reflected in the table.

($ in thousands)	Sensitivity to Instantaneous Interest Rate Changes (basis points)
	(200)		(100)		(50)		—		50		100		200
Fair value of fixed maturity portfolio	$	1,478,379	$	1,436,286	$	1,413,256	$	1,390,167	$	1,367,055	$	1,343,920	$	1,297,584
Fair value of long-term debt	307,900		292,887		285,703		278,726		271,949		265,366		252,757

The following table provides information about our fixed maturity investments at December 31, 2016, which are sensitive to interest rate risk. The table shows expected principal cash flows by expected maturity date for each of the five subsequent years and collectively for all years thereafter. Callable bonds and notes are included based on call date or maturity date depending upon which date produces the most conservative yield. Mortgage-Backed Securities (MBS) and sinking fund issues are included based on maturity year adjusted for expected payment patterns. The cash flows presented take into consideration historical relationships of market yields and prepayment rates. However, the actual prepayment rate may differ from historical trends resulting in actual principal cash flows that differ from those presented below.

	Expected Principal Cash Flows
($ in thousands)	MBS and ABS only		Excluding MBS and ABS		Total		Maturing Book Yield
For the twelve months ending December 31,
2017	$	79,752	$	136,866	$	216,618	2.2
2018	53,338		142,133		195,472		2.2
2019	43,277		186,020		229,297		2.1
2020	35,692		156,590		192,282		2.6
2021	27,851		115,370		143,221		2.7
Thereafter	194,136		155,010		349,145		2.8
Total	$	434,046	$	891,989	$	1,326,035	2.4

Credit Risk

We manage credit risk by diversifying our portfolio to avoid concentrations in any single industry group or issuer and by limiting investments in securities with lower credit ratings. The largest investment in any one issuer, excluding the U.S. Government or

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

government-sponsored entities, is $16.2 million or 1.2% of the fixed income investment portfolio, and the top five investments make up 4.5% of the fixed income portfolio. All of the fixed maturities owned at December 31, 2016, were producing their stated rate of investment income.

We categorize securities by rating based upon available ratings issued by Moody's, Standard & Poor's or Fitch. If all three ratings are available but not equivalent, we exclude the lowest rating and the lower of the remaining ratings is used. If ratings are only available from two agencies, the lowest is used. This methodology is consistent with that used by the major bond indices.

The following table presents the credit rating and fair value of our fixed maturity portfolio by major security type at December 31, 2016, ($ in thousands):

	Rating
	AAA			AA			A			BBB			Non- investment Grade			Total Fair Value			% of Total Exposure
U.S. government	$	62,485		$	0		$	0		$	0		$	0		$	62,485		4.5	%
State and municipal	132,058			259,117			81,297			0			3,860			476,331			34.3	%
Mortgage- and asset-backed	426,893			16,468			1,314			3,101			0			447,776			32.2	%
Corporates	0			31,942			135,233			119,808			116,592			403,575			29.0	%
Total fair value	$	621,436		$	307,527		$	217,844		$	122,909		$	120,452		$	1,390,167		100.0	%
% of total fair value	44.7		%	22.1		%	15.7		%	8.8		%	8.7		%	100.0		%

Equity Price Risk

Equity price risk is the potential economic loss from adverse changes in equity security prices. Our exposure to equity price risk is limited, as our equity investments comprise only 6.1% of our total investment portfolio. At December 31, 2016, the fair value of our equity portfolio was $90.6 million.

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Underwriting

Premium

Our net earned premium was as follows ($ in thousands):

	Twelve months ended December 31,
	2016			2015			Change			% Change
Gross written premium:
Personal Auto	1,240,037			1,246,492			(6,455		)	(0.5	)%
Commercial Vehicle	145,272			126,036			19,237			15.3	%
Classic Collector	16,105			15,339			766			5.0	%
Total gross written premium	1,401,414			1,387,866			13,548			1.0	%
Ceded reinsurance	(8,955		)	(14,579		)	5,624			(38.6	)%
Net written premium	1,392,459			1,373,287			19,172			1.4	%
Change in unearned premium	(795		)	(26,723		)	25,928			(97.0	)%
Net earned premium	$	1,391,664		$	1,346,564		$	45,100		3.3	%
	Twelve months ended December 31,
	2015			2014			Change			% Change
Gross written premium:
Personal Auto	1,246,492			1,237,774			8,718			0.7	%
Commercial Vehicle	126,036			108,640			17,395			16.0	%
Classic Collector	15,339			14,456			883			6.1	%
Total gross written premium	1,387,866			1,360,870			26,996			2.0	%
Ceded reinsurance	(14,579		)	(13,266		)	(1,313		)	9.9	%
Net written premium	1,373,287			1,347,604			25,683			1.9	%
Change in unearned premium	(26,723		)	(21,669		)	(5,054		)	23.3	%
Net earned premium	$	1,346,564		$	1,325,935		$	20,629		1.6	%

The following table summarizes our policies in force:

	At December 31,
	2016	2015	Change		% Change
Personal Auto	705,242	766,858	(61,616	)	(8.0	)%
Commercial Vehicle	52,340	48,955	3,385		6.9	%
Classic Collector	41,473	41,178	295		0.7	%
Total policies in force	799,055	856,991	(57,936	)	(6.8	)%
	At December 31,
	2015	2014	Change		% Change
Personal Auto	766,858	801,024	(34,166	)	(4.3	)%
Commercial Vehicle	48,955	44,772	4,183		9.3	%
Classic Collector	41,178	40,825	353		0.9	%
Total policies in force	856,991	886,621	(29,630	)	(3.3	)%

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

2016 compared to 2015

It is our policy to close the books on the last Friday of the month, which resulted in 2016 being a 53-week year. Excluding the impact of this extra week, gross written premium would have decreased 0.3% for the year.

We implemented rate revisions in various states with an overall rate increase of 8.6% during 2016. Policies in force at December 31, 2016, decreased 6.8% compared with the same period of 2015.

The decrease in Personal Auto gross written premium was primarily due to a decline in Florida in response to rate increases totaling 12.8% implemented throughout the year as well as lower premium in states where we are running off business. This decrease was partially offset by growth in Texas, which grew63.2% compared with the prior year.

The gross written premium growth in our Commercial Vehicle product was primarily due to renewal business growth and higher average premiums in California and Texas.

2015 compared to 2014

We implemented rate revisions in various states with an overall rate increase of 5.4% during 2015. Gross written premium grew despite the decline in policies in force primarily due to an increase in average premiums per policy.

The increase in Personal Auto gross written premium was primarily due to growth in California, which grew 9.4%, compared with the prior year. California's premium growth, most of which occurred during the first half of 2015, was primarily due to an increase in both new and renewal business as a result of an improving economy and higher average written premiums. The growth in California was partially offset by declining gross written premium in Georgia, Nevada and Pennsylvania as we discontinued writing new business effective January 1, 2015.

The gross written premium growth in our Commercial Vehicle product was primarily due to renewal business growth and higher average premiums.

Profitability

A key operating performance measure of insurance companies is underwriting profitability, as opposed to overall profitability or net earnings. We measure underwriting profitability by the combined ratio. When the combined ratio is under 100%, we consider underwriting results profitable; when the ratio is over 100%, we consider underwriting results unprofitable. The combined ratio does not reflect investment income, other income, interest expense, corporate general and administrative expenses, other expenses or federal income taxes.

In addition to reporting financial results in accordance with GAAP, we report results on a statutory basis for insurance regulatory purposes. We evaluate underwriting profitability based on a combined ratio calculated using statutory accounting principles. The statutory combined ratio represents the sum of the following ratios: (i) losses and LAE incurred as a percentage of net earned premium; and (ii) underwriting expenses incurred, net of installment and other fees, as a percentage of net written premium. Certain expenses are treated differently under statutory and GAAP accounting principles. Under GAAP, commissions, premium taxes and other variable costs incurred in connection with successfully writing new and renewal business are capitalized as deferred policy acquisition costs and amortized on a pro rata basis over the period in which the related premium is earned. On a statutory basis, these items are expensed as incurred. Additionally, bad debt charge-offs on agent balances and premium receivables are included only in the GAAP combined ratios.

The discussion of underwriting results that follows focuses on statutory ratios and the components thereof, unless otherwise indicated.

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following tables present statutory and GAAP combined ratios:

	Twelve months ended December 31,
	2016					2015					% Point Change
	Loss & LAE Ratio		Underwriting Ratio	Combined Ratio		Loss & LAE Ratio		Underwriting Ratio	Combined Ratio		Loss & LAE Ratio		Underwriting Ratio	Combined Ratio
Personal Auto	78.9	%	16.0%	94.9	%	76.7	%	16.8%	93.6	%	2.2	%	(0.9)%	1.3	%
Commercial Vehicle	81.6	%	16.9%	98.5	%	85.0	%	16.2%	101.3	%	(3.5	)%	0.7%	(2.8	)%
Classic Collector	62.1	%	32.8%	94.9	%	52.1	%	29.0%	81.1	%	10.0	%	3.8%	13.8	%
Total statutory ratios	79.0	%	16.3%	95.3	%	77.1	%	16.9%	94.0	%	1.9	%	(0.7)%	1.2	%
Total statutory ratios excluding development	80.7	%	16.3%	97.0	%	79.2	%	16.9%	96.2	%	1.5	%	(0.7)%	0.8	%
GAAP ratios	78.8	%	17.9%	96.7	%	76.9	%	18.7%	95.6	%	1.9	%	(0.8)%	1.1	%
GAAP ratios excluding development	80.5	%	17.9%	98.4	%	79.1	%	18.7%	97.8	%	1.4	%	(0.8)%	0.7	%

	Twelve months ended December 31,
	2015					2014					% Point Change
	Loss & LAE Ratio		Underwriting Ratio	Combined Ratio		Loss & LAE Ratio		Underwriting Ratio	Combined Ratio		Loss & LAE Ratio		Underwriting Ratio	Combined Ratio
Personal Auto	76.7	%	16.8%	93.6	%	76.8	%	17.8%	94.5	%	(0.1	)%	(0.9)%	(1.0	)%
Commercial Vehicle	85.0	%	16.2%	101.3	%	63.7	%	17.4%	81.1	%	21.3	%	(1.2)%	20.2	%
Classic Collector	52.1	%	29.0%	81.1	%	62.7	%	32.5%	95.2	%	(10.6	)%	(3.5)%	(14.0	)%
Total statutory ratios	77.1	%	16.9%	94.0	%	75.7	%	17.9%	93.6	%	1.4	%	(1.0)%	0.5	%
Total statutory ratios excluding development	79.2	%	16.9%	96.2	%	77.0	%	17.9%	94.9	%	2.3	%	(1.0)%	1.3	%
GAAP ratios	76.9	%	18.7%	95.6	%	75.5	%	19.6%	95.1	%	1.4	%	(0.9)%	0.5	%
GAAP ratios excluding development	79.1	%	18.7%	97.8	%	76.9	%	19.6%	96.4	%	2.2	%	(0.9)%	1.3	%

2016 compared to 2015

The statutory combined ratio for the twelve months ended December 31, 2016, increased by 1.2points from the same period of 2015. The twelve months ended December 31, 2016, included $24.0 million of favorable development on prior year loss and LAE reserves compared with $28.9 million of favorable development on prior year loss and LAE reserves in 2015. Excluding the effect of development from both periods, the statutory combined ratio increased by 0.8point for the twelve months ended December 31, 2016, compared with 2015.

The GAAP combined ratio for the twelve months ended December 31, 2016, increased by 1.1points compared with the same period of 2015. Excluding the effect of development from both periods, the GAAP combined ratio increased by 0.7point for the twelve months ended December 31, 2016, compared with 2015.

Losses from catastrophes totaled $6.9 million during 2016, compared with $1.8 million in 2015.

The 1.3pointsincrease in the Personal Auto combined ratio for the twelve months ended December 31, 2016, was primarily due to a deterioration in the California calendar year loss and LAE ratio as a result of increases in severity estimates in the material damage and bodily injury coverages from accident year 2015.

The 2.8pointsdecline in the Commercial Vehicle product combined ratio during the twelve months ended December 31, 2016, was due to an improvement in the current accident year loss and LAE ratio primarily due to an increase in average earned premium.

2015 compared to 2014

The statutory combined ratio for the twelve months ended December 31, 2015, increased by 0.5 point from the same period of 2014. The twelve months ended December 31, 2015, included $28.9 million of favorable development on prior year loss and LAE reserves compared with $17.4 million of favorable development on prior year loss and LAE reserves in 2014. Excluding the effect

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

of development from both periods, the statutory combined ratio increased by 1.3 points for the twelve months ended December 31, 2015, compared with 2014.

The GAAP combined ratio for the twelve months ended December 31, 2015, increased by 0.5 point compared with 2014. Excluding the effect of development from both periods, the GAAP combined ratio increased by 1.3 points for the twelve months ended December 31, 2015, compared with 2014.

Losses from catastrophes totaled $1.8 million during 2015, compared with $2.5 million in 2014.

The 1.0 point decline in the Personal Auto combined ratio for the twelve months ended December 31, 2015, was primarily due to an increase in net written premium, resulting in a reduction of the underwriting ratio.

The 20.2 points increase in the Commercial Vehicle product combined ratio during the twelve months ended December 31, 2015, was primarily due to increases in both frequency and severity, resulting in higher new business loss ratios in 2015, particularly in Florida, as well as favorable development on loss and LAE reserves recognized in the twelve months ended December 31, 2014.

Installment and Other Fee Income

	Twelve months ended December 31,
($ in thousands)	2016		2015		2014
Installment and other fee income	$	107,361	$	96,753	$	95,242

The increase in installment and other fee income charged to policyholders during 2016 was primarily related to an increase in processing fees.

Net Investment Income

Investment income primarily includes gross investment revenue net of investment management fees and any changes reflect fluctuations in market rates and average invested assets as shown in the following table ($ in thousands):

	Twelve months ended December 31,
	2016			2015			2014
Gross investment income:
Interest income on fixed maturities, cash and cash equivalents	$	35,528		$	36,871		$	35,596
Dividends on equity securities	2,231			2,194			2,245
Gross investment income	37,759			39,065			37,841
Investment expenses	(2,222		)	(2,265		)	(2,211		)
Net investment income	$	35,537		$	36,800		$	35,629
Average investment balance, at cost	$	1,510,122		$	1,555,808		$	1,563,028
Annualized returns excluding realized gains and losses	2.4		%	2.4		%	2.3		%
Annualized returns including realized gains and losses	2.6		%	2.5		%	2.6		%

Pre-tax net investment income declined from $36.8 million in 2015 to $35.5 million in 2016primarily due to a decline of $0.9 million in make whole proceeds and a decrease in book yield caused by continued low reinvestment yields.

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INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

Net Realized Gains on Investments

We recorded net realized gains on sales and impairments for unrealized losses deemed other-than-temporary as follows (before tax, $ in thousands):

Twelve months ended December 31, 2016	Net Realized Gains (Losses) on Sales			Net Impairment Losses Recognized in Earnings			Total Net Realized Gains (Losses) on Investments
Fixed maturities	$	671		$	(375	)	$	296
Equity securities	2,851			0			2,851
Short-term investments	(3		)	0			(3		)
Total	$	3,519		$	(375	)	$	3,145
Twelve months ended December 31, 2015
Fixed maturities	$	2,064		$	(1,294	)	$	770
Equity securities	2,039			0			2,039
Short-term investments	0			0			0
Total	$	4,102		$	(1,294	)	$	2,809
Twelve months ended December 31, 2014
Fixed maturities	$	3,137		$	(160	)	$	2,976
Equity securities	1,303			0			1,303
Short-term investments	5			0			5
Total	$	4,444		$	(160	)	$	4,284

For our securities held with unrealized losses, we believe, based on our analysis, that (i) we will recover our cost basis in these securities; and (ii) we do not intend to sell the securities nor is it more likely than not that there will be a requirement to sell the securities before they recover in value. Should either of these beliefs change with regard to a particular security, a charge for impairment would likely be required. While it is not possible to predict accurately if or when a specific security will become impaired, charges for other-than-temporary impairments could be material to results of operations in a future period.

Other Income

	Twelve months ended December 31,
($ in thousands)	2016		2015		2014
Other income	$	1,000	$	1,106	$	619

Other income was primarily comprised of commission from the sales of third party insurance policies and items of a non-recurring nature. Other income for the year ended December 31, 2015, increased $0.5 million primarily as a result of a growth in the sales of these policies.

Interest Expense

	Twelve months ended December 31,
($ in thousands)	2016		2015		2014
5.0% Senior Notes	$	13,750	$	13,750	$	13,750
Amortization of debt issuance costs	208		197		188
Capital leases	80		81		51
Total	$	14,037	$	14,029	$	13,989

At December 31, 2016, we had $275 million principal outstanding of senior notes. These notes carry a coupon rate of 5.0% and require no principal payment until maturity in September 2022. Refer to Note 4 – Long-Term Debt to the Consolidated Financial Statements for additional information on the 5.0% Senior Notes.

26

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Management's Discussion and Analysis of Financial Condition and Results of Operations

Corporate General and Administrative Expenses

	Twelve months ended December 31,
($ in thousands)	2016		2015		2014
Corporate general and administrative expenses	$	7,899	$	7,655	$	7,514

Corporate general and administrative expenses are comprised of expenses of the holding company, including board of directors' fees, directors and officers insurance and a portion of the salaries and benefits of senior executives.

Other Expenses

	Twelve months ended December 31,
($ in thousands)	2016		2015		2014
Loss on disposal of assets	$	568	$	265	$	15
Corporate litigation expense	318		299		238
Lease related expenses	17		979		275
Loss on impairment of property	0		909		0
Other	833		844		354
Total	$	1,736	$	3,296	$	882

Other expenses for the twelve months ended December 31, 2016, decreased primarily due to losses in 2015 on subleases related to the closure of offices in Georgia, Nevada and Pennsylvania as well as a partial lease buyout on our existing corporate headquarters. In addition, we incurred an impairment to bring the book values of two properties down to the appraised value after the demolition of buildings that were on the premises at the time of purchase.

Income Taxes

The following table reconciles our U.S. statutory rate and effective tax rate for the periods ended December 31, 2016, 2015 and 2014:

	Twelve months ended December 31,
	2016		2015		2014
U.S. Statutory tax rate	35.0	%	35.0	%	35.0	%
Adjustments:
Dividends-received deduction	(0.7	)%	(0.6	)%	(0.6	)%
Tax-exempt interest	(4.0	)%	(3.6	)%	(3.3	)%
Other	0.4	%	0.4	%	0.1	%
Effective tax rate	30.7	%	31.2	%	31.2	%

The GAAP effective tax rate has decreased in 2016 primarily as a result of a more significant impact from tax-exempt interest and the dividends-received deduction due to lower pre-tax income. Refer to Note 5 – Income Taxes to the Consolidated Financial Statements for additional information on income taxes.

ITEM 7A

Quantitative and Qualitative Disclosures about Market Risk

The information required by Item 7A is included under the caption Exposure to Market Risk in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

27

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

ITEM 8

Financial Statements and Supplementary Data

Infinity Property and Casualty Corporation and Subsidiaries:
Report of Independent Registered Public Accounting Firm	31
Consolidated Statements of Earnings: Years ended December 31, 2016, 2015, and 2014	32
Consolidated Statements of Comprehensive Income: Years ended December 31, 2016, 2015, and 2014	33
Consolidated Balance Sheets: December 31, 2016, and 2015	34
Consolidated Statements of Changes in Shareholders’ Equity: Years ended December 31, 2016, 2015, and 2014	35
Consolidated Statements of Cash Flows: Years ended December 31, 2016, 2015, and 2014	36
Notes to Consolidated Financial Statements	37

ITEM 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

ITEM 9A

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of the Company's management, including its principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2016. Based on that evaluation, we concluded that the controls and procedures are effective in providing reasonable assurance that material information required to be disclosed in our reports filed with or submitted to the Securities and Exchange Commission (SEC) under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to our management, including the principal executive officer and principal financial officer, as appropriate.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Securities Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of the Company's management, including its principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2016, based on the framework in the 2013 edition of the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation, we concluded that our internal control over financial reporting was effective as of December 31, 2016.

Ernst & Young LLP, the independent registered public accounting firm that audited our consolidated financial statements contained in this Annual Report on Form 10-K, has issued an attestation report on the effectiveness of our internal control over financial reporting as of December 31, 2016, which is included herein.

Because of our inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Further, because of changes in conditions, effectiveness of internal controls over financial reporting may vary over time. Our system contains self-monitoring mechanisms, and we take actions to correct deficiencies as we identify them.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended December 31, 2016, there have been no changes to our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

28

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Report of Independent Registered Public Accounting Firm on

Internal Control over Financial Reporting

The Board of Directors and Shareholders

Infinity Property and Casualty Corporation and Subsidiaries

Wehave audited Infinity Property and Casualty Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Infinity Property and Casualty Corporation and subsidiaries' management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Infinity Property and Casualty Corporation and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on the COSO criteria.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets as of December 31, 2016, and 2015, and the related consolidated statements of changes in capital, income and comprehensive income, and cash flows for each of the three years in the period ended December 31, 2016, of Infinity Property and Casualty Corporation and subsidiaries and our report dated February 28, 2017, expressed an unqualified opinion thereon.

/S/ ERNST & YOUNG LLP

Birmingham, Alabama

February 28, 2017

29

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

ITEM 9B

Other Information

On February 22, 2017, our Board of Directors voted to amend and restate the Company’s regulations to replace the Company’s plurality voting standard with a majority voting standard in “uncontested elections,” meaning any election of directors at a meeting of the shareholders in which the number of nominees does not exceed the number of directors to be elected and in which cumulative voting is not in effect. Under this newly implemented standard, any director who does not receive in excess of fifty percent (50%) “for” votes for his or her election among the votes cast, excluding “abstentions” and “broker non-votes,” shall tender his or her resignation to the Board. Within ninety (90) days following certification of the voting results, the Board shall decide whether to accept or reject such resignation and publicly disclose its decision to accept or reject, including the rationale therefor, such resignation. A director tendering his or her resignation shall not participate in the Board’s decision of whether to accept or reject such resignation. The foregoing description of the change to the Company’s regulations does not purport to be complete and is qualified by reference to the full text of the Amended and Restated Regulations, attached as Exhibit 3.2 to this Form 10-K.

PART III

ITEM 10

Directors, Executive Officers and Corporate Governance

We make available free of charge within the Investor Relations section of our website at www.infinityauto.com, our Corporate Governance Guidelines, the Charter of each standing committee of the Board of Directors, and the Code of Ethics adopted by the Board and applicable to all of our directors, officers and employees. Requests for copies may be directed to our Corporate Secretary at Infinity Property and Casualty Corporation, 2201 4th Avenue North, Birmingham, Alabama 35203. We intend to disclose any amendments to the Code of Ethics, and any waiver from a provision of the Code of Ethics granted to our principal executive officer or principal financial officer, on our website following such amendment or waiver. We may disclose any such amendment or waiver in a report on Form 8-K filed with the SEC either in addition to or in lieu of the website disclosure. The information contained on or connected to our website is not incorporated by reference into this Form 10-K and should not be considered part of this or any other report that we file with or furnish to the SEC.

The information required by this Item 10 regarding Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act of 1934; and Corporate Governance is incorporated by reference from our Proxy Statement for the 2017 Annual Meeting of Shareholders to be held on May 17, 2017.

ITEM 11

Executive Compensation

Incorporated by reference from our Proxy Statement for the 2017 Annual Meeting of Shareholders to be held on May 17, 2017.

ITEM 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Incorporated by reference from our Proxy Statement for the 2017 Annual Meeting of Shareholders to be held on May 17, 2017.

ITEM 13

Certain Relationships and Related Transactions, and Director Independence

Incorporated by reference from our Proxy Statement for the 2017 Annual Meeting of Shareholders to be held on May 17, 2017.

ITEM 14

Principal Accountant Fees and Services

Incorporated by reference from our Proxy Statement for the 2017 Annual Meeting of Shareholders to be held on May 17, 2017.

30

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Infinity Property and Casualty Corporation and Subsidiaries

We have audited the accompanying consolidated balance sheets of Infinity Property and Casualty Corporation and subsidiaries as of December 31, 2016, and 2015, and the related consolidated statements of changes in capital, income and comprehensive income, and cash flows for each of the three years in the period ended December 31, 2016. Our audits also included the financial statement schedules listed in the Index at Item 15(a). These financial statements and schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Infinity Property and Casualty Corporation and subsidiaries at December 31, 2016, and 2015, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Infinity Property and Casualty Corporation's internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2017, expressed an unqualified opinion thereon.

/S/ ERNST & YOUNG LLP

Birmingham, Alabama

February 28, 2017

31

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(in thousands, except per share data)

	Twelve months ended December 31,
	2016			2015			% Change		2014			% Change
Revenues:
Earned premium	$	1,391,664		$	1,346,564		3.3	%	$	1,325,935		1.6	%
Installment and other fee income	107,361			96,753			11.0	%	95,242			1.6	%
Net investment income	35,537			36,800			(3.4	)%	35,629			3.3	%
Net realized gains on investments(1)	3,145			2,809			12.0	%	4,284			(34.4	)%
Other income	1,000			1,106			(9.6	)%	619			78.8	%
Total revenues	1,538,706			1,484,032			3.7	%	1,461,709			1.5	%
Costs and Expenses:
Losses and loss adjustment expenses	1,096,755			1,036,001			5.9	%	1,001,628			3.4	%
Commissions and other underwriting expenses	356,148			348,219			2.3	%	354,559			(1.8	)%
Interest expense	14,037			14,029			0.1	%	13,989			0.3	%
Corporate general and administrative expenses	7,899			7,655			3.2	%	7,514			1.9	%
Other expenses	1,736			3,296			(47.3	)%	882			273.8	%
Total costs and expenses	1,476,575			1,409,200			4.8	%	1,378,572			2.2	%
Earnings before income taxes	62,132			74,832			(17.0	)%	83,138			(10.0	)%
Provision for income taxes	19,047			23,351			(18.4	)%	25,936			(10.0	)%
Net Earnings	$	43,085		$	51,481		(16.3	)%	$	57,201		(10.0	)%
Net Earnings per Common Share:
Basic	$	3.91		$	4.54		(13.9	)%	$	5.00		(9.2	)%
Diluted	3.88			4.51			(14.0	)%	4.95			(8.9	)%
Average Number of Common Shares:
Basic	11,018			11,334			(2.8	)%	11,440			(0.9	)%
Diluted	11,101			11,417			(2.8	)%	11,562			(1.3	)%
Cash Dividends per Common Share	$	2.08		$	1.72		20.9	%	$	1.44		19.4	%
(1) Net realized gains on sales	$	3,519		$	4,102		(14.2	)%	$	4,444		(7.7	)%
Total other-than-temporary impairment (OTTI) losses	(375		)	(1,294		)	(71.1	)%	(1,023		)	26.5	%
Non-credit portion in other comprehensive income	0			0			0.0	%	888			NM
OTTI losses reclassified from other comprehensive income	0			0			0.0	%	(25		)	NM
Net impairment losses recognized in earnings	(375		)	(1,294		)	(71.1	)%	(160		)	NM
Total net realized gains on investments	$	3,145		$	2,809		12.0	%	$	4,284		(34.4	)%

NM = Not Meaningful

See Notes to Consolidated Financial Statements.

32

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

($ in thousands)

	Twelve months ended December 31,
	2016			2015			2014
Net earnings	$	43,085		$	51,481		$	57,201
Other comprehensive income before tax:
Net change in post-retirement benefit liability	88			771			235
Unrealized gains (losses) on investments:
Unrealized holding gains (losses) arising during the period	3,205			(22,091		)	14,618
Less: Reclassification adjustments for gains included in net earnings	(3,145		)	(2,809		)	(4,284		)
Unrealized gains (losses) on investments, net	61			(24,900		)	10,334
Other comprehensive income (loss), before tax	149			(24,129		)	10,569
Income tax (expense) benefit related to components of other comprehensive income	(52		)	8,445			(3,699		)
Other comprehensive income (loss), net of tax	97			(15,684		)	6,870
Comprehensive income	$	43,182		$	35,797		$	64,071

See Notes to Consolidated Financial Statements.

33

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts in line descriptions)

	December 31,
	2016			2015
Assets
Investments:
Fixed maturities – at fair value (amortized cost $1,392,660 and $1,381,510)	$	1,390,167		$	1,381,467
Equity securities – at fair value (cost $77,013 and $78,815)	90,640			89,935
Short-term investments – at fair value (amortized cost $2,909 and $4,656)	2,907			4,651
Total investments	1,483,714			1,476,053
Cash and cash equivalents	92,800			62,483
Accrued investment income	12,485			12,245
Agents’ balances and premium receivable, net of allowances for doubtful accounts of $14,207 and $15,385	495,157			511,543
Property and equipment, net of accumulated depreciation of $70,559 and $72,892	96,166			89,707
Prepaid reinsurance premium	3,410			5,385
Recoverables from reinsurers (includes $121 and $362 on paid losses and LAE)	17,251			15,056
Deferred policy acquisition costs	91,136			93,157
Current and deferred income taxes	21,635			33,926
Receivable for securities sold	795			0
Other assets	12,777			10,306
Goodwill	75,275			75,275
Total assets	$	2,402,601		$	2,385,135
Liabilities and Shareholders’ Equity
Liabilities:
Unpaid losses and loss adjustment expenses	$	685,455		$	669,965
Unearned premium	614,347			616,649
Long-term debt (fair value $278,726 and $281,581)	273,591			273,383
Commissions payable	16,176			17,406
Payable for securities purchased	13,922			7,264
Other liabilities	99,924			112,873
Total liabilities	1,703,414			1,697,540
Commitments and contingencies (See Note 14)
Shareholders’ equity:
Common stock, no par value (50,000,000 shares authorized; 21,809,954 and 21,774,520 shares issued)	$	21,829		$	21,794
Additional paid-in capital	378,745			376,025
Retained earnings	777,695			757,604
Accumulated other comprehensive income, net of tax	7,907			7,811
Treasury stock, at cost (10,766,211 and 10,623,138 shares)	(486,990		)	(475,638		)
Total shareholders’ equity	699,187			687,595
Total liabilities and shareholders’ equity	$	2,402,601		$	2,385,135

See Notes to Consolidated Financial Statements.

34

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

($ in thousands)

	Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income, Net of Tax			Treasury Stock			Total
Balance at January 1, 2014	$	21,684	$	368,902	$	685,011		$	16,624		$	(435,463	)	$	656,758
Net earnings	—		—		57,201			—			—			57,201
Net change in post-retirement benefit liability	—		—		—			153			—			153
Change in unrealized gain on investments	—		—		—			6,810			—			6,810
Change in non-credit component of impairment losses on fixed maturities	—		—		—			(93		)	—			(93		)
Comprehensive income														64,071
Dividends paid to common shareholders	—		—		(16,562		)	—			—			(16,562		)
Shares issued and share-based compensation expense, including tax benefit	61		3,466		—			—			—			3,527
Acquisition of treasury stock	—		—		—			—			(10,136		)	(10,136		)
Balance at December 31, 2014	$	21,745	$	372,368	$	725,651		$	23,494		$	(445,599	)	$	697,659
Net earnings	—		—		51,481			—			—			51,481
Net change in post-retirement benefit liability	—		—		—			501			—			501
Change in unrealized gain on investments	—		—		—			(16,795		)	—			(16,795		)
Change in non-credit component of impairment losses on fixed maturities	—		—		—			610			—			610
Comprehensive income														35,797
Dividends paid to common shareholders	—		—		(19,528		)	—			—			(19,528		)
Shares issued and share-based compensation expense, including tax benefit	49		3,658		—			—			—			3,706
Acquisition of treasury stock	—		—		—			—			(30,040		)	(30,040		)
Balance at December 31, 2015	$	21,794	$	376,025	$	757,604		$	7,811		$	(475,638	)	$	687,595
Net earnings	—		—		43,085			—			—			43,085
Net change in post-retirement benefit liability	—		—		—			57			—			57
Change in unrealized gain on investments	—		—		—			(238		)	—			(238		)
Change in non-credit component of impairment losses on fixed maturities	—		—		—			277			—			277
Comprehensive income														43,182
Dividends paid to common shareholders	—		—		(22,993		)	—			—			(22,993		)
Shares issued and share-based compensation expense, including tax benefit	35		2,720		—			—			—			2,755
Acquisition of treasury stock	—		—		—			—			(11,352		)	(11,352		)
Balance at December 31, 2016	$	21,829	$	378,745	$	777,695		$	7,907		$	(486,990	)	$	699,187

See Notes to Consolidated Financial Statements.

35

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in thousands)

	Twelve months ended December 31,
	2016			2015			2014
Operating Activities:
Net earnings	$	43,085		$	51,481		$	57,201
Adjustments:
Depreciation	14,642			12,299			10,803
Amortization	20,401			22,411			22,140
Net realized gains on investments	(3,145		)	(2,809		)	(4,284		)
Loss (gain) on disposal of property and equipment	566			1,174			(16		)
Share-based compensation expense	2,342			3,149			2,634
Excess tax benefits from share-based payment arrangements	(157		)	(298		)	(108		)
Activity related to rabbi trust	77			(49		)	48
Change in accrued investment income	(240		)	732			(205		)
Change in agents’ balances and premium receivable	16,385			(27,904		)	(32,299		)
Change in reinsurance receivables	(220		)	(1,101		)	(1,699		)
Change in deferred policy acquisition costs	2,021			(2,728		)	(2,170		)
Change in other assets	9,954			(5,902		)	4,063
Change in unpaid losses and loss adjustment expenses	15,490			1,787			21,600
Change in unearned premium	(2,301		)	27,389			23,256
Change in other liabilities	(13,678		)	(7,122		)	5,056
Net cash provided by operating activities	105,223			72,507			106,020
Investing Activities:
Purchases of fixed maturities	(479,050		)	(523,502		)	(516,522		)
Purchases of equity securities	(7,591		)	(7,000		)	(6,600		)
Purchases of short-term investments	(9,882		)	(8,413		)	(7,920		)
Purchases of property and equipment	(21,668		)	(47,300		)	(18,641		)
Maturities and redemptions of fixed maturities	163,755			198,050			167,011
Maturities and redemptions of short-term investments	2,270			1,285			2,800
Proceeds from sale of fixed maturities	290,866			329,688			238,893
Proceeds from sale of equity securities	12,185			8,489			4,999
Proceeds from sale of short-term investments	9,258			3,086			6,864
Proceeds from sale of property and equipment	2			0			34
Net cash used in investing activities	(39,855		)	(45,617		)	(129,082		)
Financing Activities:
Proceeds from stock options exercised and employee stock purchases	256			259			784
Excess tax benefits from share-based payment arrangements	157			298			108
Principal payments under capital lease obligations	(517		)	(497		)	(840		)
Acquisition of treasury stock	(11,953		)	(29,481		)	(10,100		)
Dividends paid to shareholders	(22,993		)	(19,528		)	(16,562		)
Net cash used in financing activities	(35,051		)	(48,948		)	(26,609		)
Net increase (decrease) in cash and cash equivalents	30,317			(22,058		)	(49,670		)
Cash and cash equivalents at beginning of period	62,483			84,541			134,211
Cash and cash equivalents at end of period	$	92,800		$	62,483		$	84,541

See Notes to Consolidated Financial Statements.

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INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2016

INDEX TO NOTES

1	Significant Reporting and Accounting Policies	10	Insurance Reserves
2	Fair Value	11	Reinsurance
3	Investments	12	Statutory Information
4	Long-Term Debt	13	Legal and Regulatory Proceedings
5	Income Taxes	14	Commitments and Contingencies
6	Computation of Net Earnings per Share	15	Additional Information
7	Share-Based Compensation	16	Accumulated Other Comprehensive Income
8	Benefit Plans	17	Segment Information
9	Quarterly Operating Results (Unaudited)

Note 1Significant Reporting and Accounting Policies

Nature of Operations

We currently write personal automobile insurance with a concentration on nonstandard automobile insurance, commercial vehicle insurance and classic collector automobile insurance. Personal auto insurance accounts for 89% of our total gross written premium and we primarily write it in four states. We wrote approximately 55% of our personal auto gross written premium in the state of California during 2016.

Basis of Consolidation and Reporting

The accompanying consolidated financial statements include our accounts and those of our subsidiaries. These financial statements reflect certain adjustments necessary for a fair presentation of our results of operations and financial position. Such adjustments consist of normal, recurring accruals recorded to accurately match expenses with their related revenue streams and the elimination of all significant intercompany transactions and balances.

We have evaluated events that occurred after December 31, 2016, for recognition or disclosure in our financial statements and the notes to the financial statements.

Schedules may not foot due to rounding.

Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles of the United States requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Changes in circumstances could cause actual results to differ materially from those estimates.

Investments

We consider all fixed maturity securities “available for sale” and report them at fair value with net unrealized gains or losses reported after-tax (net of any valuation allowance) as a component of accumulated other comprehensive income within shareholders' equity. We base the fair values of investments on prices quoted in the most active market for each security. If quoted prices are not available, we estimate fair value based on the fair value of comparable securities, discounted cash flow models or similar methods. We treat premium and discounts on mortgage-backed securities (MBS) and asset-backed securities (ABS) as a yield adjustment over the estimated life of the securities, adjusted for anticipated prepayments, using the interest method. We base prepayment assumptions on data from widely accepted third party data sources or internal estimates. We review the amortized cost and effective yield of the security periodically and adjust it to reflect actual prepayments and changes in expectations. For high credit quality MBS and ABS (those rated AA or above at the time of purchase), the adjustments to amortized cost are recorded

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INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

as a charge or credit to net investment income in accordance with the retrospective method. For MBS and ABS rated below AA, we adjust the yield prospectively for any changes in estimated cash flows.

Gains or losses on securities are determined on the specific identification basis. When we consider impairment in the value of a specific investment other-than-temporary (OTTI), the cost basis of that investment is reduced. For fixed maturity securities that are OTTI, we assess our intent to sell and the likelihood that we will be required to sell the security before recovery of our amortized cost. If a fixed maturity security is considered OTTI, but we do not intend to and are not more than likely to be required to sell the security prior to its recovery to amortized cost, the amount of the impairment is separated into a credit loss component and the amount due to all other factors. The excess of the amortized cost over the present value of the expected cash flows determines the credit loss component of an impairment charge on a fixed maturity security. The present value is determined using the best estimate of cash flows discounted at (i) the effective interest rate implicit at the date of acquisition for non-structured securities; or (ii) the book yield for structured securities. The techniques and assumptions for determining the best estimate of cash flows vary depending on the type of security. We recognize the credit loss component of an impairment charge in net earnings and the non-credit component in accumulated other comprehensive income.

Securities having a fair value of approximately $19.8 million at December 31, 2016, were on deposit as required by regulatory authorities.

Cash and Cash Equivalents

We consider liquid investments having original maturities of three months or less when purchased to be cash equivalents for purposes of the financial statements.

Reinsurance

Our insurance subsidiaries cede insurance to other companies. To the extent that any reinsuring companies are unable to meet obligations under agreements covering reinsurance ceded, our insurance subsidiaries would remain liable. We estimate amounts recoverable from reinsurers in a manner consistent with the claim liability associated with the reinsured policies. Our insurance subsidiaries report as assets (i) the estimated reinsurance recoverable on unpaid losses; and (ii) amounts paid to reinsurers applicable to the unexpired terms of policies in force.  

Advertising

Advertising costs are charged to expense as incurred. Total advertising costs were $9.7 million, $9.1 million and $8.7 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Deferred Policy Acquisition Costs (DPAC)

Policy acquisition costs (principally commissions, premium taxes and other marketing and underwriting expenses) related to the successful production of premium writings are deferred and charged against income ratably over the terms of the related policies. The method followed in computing DPAC limits the amount of such costs to their estimated realizable value without any consideration for anticipated investment income. Each quarter, we evaluate the recoverability of these costs. The DPAC amortization expense recognized in the Consolidated Statements of Earnings during 2016, 2015 and 2014 was $207.1 million, $203.7 million and $204.7 million, respectively.

Goodwill

In accordance with the Goodwill topic of the FASB Accounting Standards Codification (FASC), we perform impairment test procedures for goodwill on an annual basis. These procedures require us to calculate the fair value of goodwill, compare the result to our carrying value and record the amount of any shortfall as an impairment charge.

We performed this test as of October 1, 2016, using a variety of methods, including estimates of future discounted cash flows and comparisons of our market value to that of our major competitors. Our cash flow projections rely on assumptions that are subject to uncertainty, including premium growth, loss and loss adjustment expense ratios, interest rates and capital requirements.

The October 1, 2016, test results indicated that the fair value of our goodwill exceeded our carrying value and therefore no impairment charge was required at that date. Additionally, there was no indication of impairment at December 31, 2016.

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INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Unpaid Losses and Loss Adjustment Expenses (LAE)

The net liabilities stated for unpaid claims and for expenses of investigation and adjustment of unpaid claims are based upon (i) the accumulation of case estimates for losses reported prior to the close of the accounting period on direct business written; (ii) estimates received from ceding reinsurers and insurance pools and associations; (iii) estimates of unreported losses based on past experience; (iv) estimates based on experience of expenses for investigating and adjusting claims; and (v) the current state of the law and coverage litigation. These liabilities are subject to the impact of changes in claim amounts and frequency and other factors. We have not reduced liabilities for unpaid losses and LAE for reinsurance recoverables; such recoverables are recorded separately as assets. Changes in estimates of the liabilities for losses and LAE are reflected in the Consolidated Statements of Earnings in the period in which determined. In spite of the variability inherent in such estimates, we believe that the liabilities for unpaid losses and LAE are adequate.

Premium and Receivables

We earn insurance premium written over the terms of the policies on a pro rata basis. Unearned premium represents that portion of premium written which is applicable to the unexpired terms of policies in force. On reinsurance assumed from other insurance companies or written through various underwriting organizations, we base unearned premium on reports received from such companies and organizations. We provide insurance and related services to individuals and small commercial accounts throughout the United States and offer a variety of payment plans. We establish an allowance for doubtful accounts based on the relationship, on a policy basis, between receivables and unearned premium, or an aging analysis of past due balances. We charge off premium due from insureds if not collected within 90 days of the policies' expiration or cancellation dates. However, even after we charge off premium, attempts to collect the premium continue.

Income Taxes

We file a consolidated federal income tax return, which includes all 80% and greater owned U.S. subsidiaries. We and our 80% and greater owned subsidiaries are parties to a tax allocation agreement, which designates how members of the tax group share tax payments. In general, each subsidiary agrees to pay us taxes computed on a separate company taxable income basis. We agree to pay each subsidiary for the tax benefit, if any, of net losses used by other members of the consolidated group.

We calculate deferred income taxes using the “asset and liability method.” Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax basis and are measured using enacted tax rates. We recognize deferred tax assets if it is more likely than not that a benefit will be realized. We aggregate current and deferred tax assets and liabilities on the Consolidated Balance Sheets.

Property and Equipment

We report property and equipment balances at cost less accumulated depreciation. Property and equipment, which consists of land, buildings, leasehold improvements, computer equipment, capitalized software and furniture and fixtures, consisted of the following balances as of December 31, 2016 ($ in millions):

	Gross Asset		Accumulated Depreciation			Net Asset
Real estate related	$	69.5	$	(7.2	)	$	62.3
Computer equipment & software	82.9		(55.6		)	27.3
Furniture & fixtures	14.3		(7.8		)	6.6
Total	$	166.7	$	(70.6	)	$	96.2

We recognized $2.1 million, net of accumulated depreciation of $1.6 million, of equipment held under capital leases in other assets on the Consolidated Balance Sheets with the related lease obligations recorded in other liabilities. We compute depreciation over the estimated useful lives of the assets using the straight-line method. Property and equipment is a separate line item on the Consolidated Balance Sheets and we allocate the related expenses, including amortization of assets recorded under capital leases, to one or more of the following line items on the Consolidated Statements of Earnings depending on the asset: "Losses and loss adjustment expenses," "Commissions and other underwriting expenses," "Corporate general and administrative expenses" or "Other expenses."

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INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Benefit Plans

We provide retirement benefits to qualified employees and healthcare and life insurance benefits to eligible retirees. We also provide post-employment benefits to former or inactive employees (primarily those on disability) who were not deemed retired under other company plans. The projected future cost of providing these benefits is expensed over the period the employees earn such benefits.

Recently Adopted Accounting Standards

In May 2015 the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) related to the disclosure for short-duration contracts. The guidance requires additional disclosures related to the liability for unpaid claims and claim adjustment expenses in an effort to increase transparency and comparability. We adopted this standard retrospectively as of January 1, 2016. See Note 10 – Insurance Reserves to the Consolidated Financial Statements for these required disclosures.

In April 2015 the FASB issued an ASU related to the presentation of debt issuance costs. The guidance requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. We adopted this standard retrospectively as of January 1, 2016.

The following table illustrates the effect of adopting this standard on the Consolidated Balance Sheets ($ in millions):

	December 31, 2015
	As Reported		As Adjusted		Difference
Other assets	$	11.9	$	10.3	$	(1.6	)
Total assets	2,386.8		2,385.1		(1.6		)
Long-term debt	275.0		273.4		(1.6		)
Total liabilities	1,699.2		1,697.5		(1.6		)
Total liabilities and shareholders' equity	2,386.8		2,385.1		(1.6		)

In August 2014, the FASB issued an ASU related to an entity's ability to continue as a going concern. The guidance requires management to perform an assessment of an entity's ability to continue as a going concern within one year after the date that the financial statements are issued as well as disclose going concern uncertainties in the financial statements. We adopted this standard as of December 31, 2016.

Recently Issued Accounting Standards

In October 2016 the FASB issued an ASU related to the recognition of income tax on intra-entity transfers of assets other than inventory. The guidance requires the income tax to be recognized when the transfer occurs rather than when the asset is sold to an outside party. The standard is effective for annual periods beginning after December 15, 2017, and interim periods within the year of adoption, and is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We do not expect the adoption of this standard to have a material impact on our financial condition or results of operations.

In June 2016 the FASB issued an ASU related to the accounting for credit losses. The guidance generally requires credit losses on available-for-sale debt securities to be recognized as an allowance rather than as a reduction to the amortized cost of a security. The standard is effective for fiscal periods beginning after December 15, 2019, and interim periods within the year of adoption, with prospective application of the ASU required for debt securities for which an other-than-temporary impairment has been recognized before the implementation date. We do not expect the adoption of this standard to have a material impact on our financial condition or results of operations.

In March 2016 the FASB issued an ASU related to the accounting for employee share-based payments. The guidance addresses the recognition, presentation and classification of awards, forfeitures and shares withheld for tax purposes. The standard is effective for fiscal periods beginning after December 15, 2016, with each provision having a different application method. We do not expect the adoption of this standard to have a material impact on our financial condition or results of operations.

In February 2016 the FASB issued an ASU related to the accounting for leases. The guidance requires lessees to recognize lease assets and liabilities on the balance sheet. The standard is effective for fiscal years beginning after December 15, 2018, and is to

be applied retrospectively, with an option to use a modified retrospective approach for leases which commenced prior to the effective date of this ASU. We are still evaluating the impact this ASU will have on the Company's consolidated financial statements.

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INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

In January 2016 the FASB issued an ASU amending the guidance on classifying and measuring financial instruments. The guidance requires equity securities to be measured at fair value and changes in that fair value to be recognized through net income. The standard is effective for fiscal years beginning after December 15, 2017, with a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. We currently record equity securities at fair value and as of December 31, 2016, we have $8.9 million net unrealized gains, net of tax, recognized as a component of other comprehensive income.

In May 2014 the FASB issued an ASU related to the accounting for revenue from contracts with customers. Insurance contracts have been excluded from the scope of the guidance. In August 2015 the FASB issued an ASU to defer the effective date from fiscal years beginning after December 15, 2016, to fiscal years beginning after December 15, 2017. We do not expect the adoption of this standard to have a material impact on our financial condition or results of operations. As an insurance-entity, we are largely exempt from the provisions of this standard, with only fee income totaling $107.4 million for the year ending December 31, 2016, subject to this new standard.

Note 2Fair Value

Fair values of instruments are based on:

(i) quoted prices in active markets for identical assets (Level 1);

(ii) quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs are observable in active markets (Level 2); or

(iii) valuations derived from valuation techniques in which one or more significant inputs are unobservable in the marketplace (Level 3).

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INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following tables present, for each of the fair value hierarchy levels, our assets and liabilities for which we report fair value on a recurring basis ($ in thousands):

	Fair Value
December 31, 2016	Level 1			Level 2			Level 3			Total
Cash and cash equivalents	$	92,800		$	0		$	0		$	92,800
Fixed maturity securities:
U.S. government	62,480			5			0			62,485
State and municipal	0			472,471			3,860			476,331
Mortgage-backed securities:
Residential	0			340,367			0			340,367
Commercial	0			69,801			0			69,801
Total mortgage-backed securities	0			410,169			0			410,169
Asset-backed securities	0			37,196			412			37,608
Corporates	0			402,909			666			403,575
Total fixed maturities	62,480			1,322,749			4,938			1,390,167
Equity securities	90,640			0			0			90,640
Short-term investments	769			2,139			0			2,907
Total cash and investments	$	246,689		$	1,324,888		$	4,938		$	1,576,514
Percentage of total cash and investments	15.6		%	84.0		%	0.3		%	100.0		%
December 31, 2015
Cash and cash equivalents	$	62,483		$	0		$	0		$	62,483
Fixed maturity securities:
U.S. government	64,638			32			0			64,669
State and municipal	0			479,656			10			479,666
Mortgage-backed securities:
Residential	0			334,784			0			334,784
Commercial	0			70,224			0			70,224
Total mortgage-backed securities	0			405,008			0			405,008
Asset-backed securities	0			54,018			0			54,018
Corporates	0			376,582			1,524			378,105
Total fixed maturities	64,638			1,315,295			1,534			1,381,467
Equity securities	89,935			0			0			89,935
Short-term investments	0			4,651			0			4,651
Total cash and investments	$	217,056		$	1,319,946		$	1,534		$	1,538,536
Percentage of total cash and investments	14.1		%	85.8		%	0.1		%	100.0		%

We do not report our long-term debt at fair value in the Consolidated Balance Sheets. The $278.7 million and $281.6 million fair value of our long-term debt at December 31, 2016, and December 31, 2015, respectively, would be included in Level 2 of the fair value hierarchy if it were reported at fair value.

Level 1 includes cash and cash equivalents, U.S. Treasury securities, an exchange-traded fund and equities invested in a rabbi trust which funds our Supplemental Employee Retirement Plan (SERP). Level 2 includes securities whose fair value was determined using observable market inputs. Level 3 securities are comprised of (i) securities for which there is no active or inactive market for similar instruments; (ii) securities whose fair value is determined based on unobservable inputs; and (iii) securities, other than those backed by the U.S. Government, that are not rated by a nationally recognized statistical rating organization (NRSRO). We recognize transfers between levels at the beginning of the reporting period.

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INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

A third party nationally recognized pricing service provides the fair value of securities in Level 2. A summary of the significant valuation techniques and market inputs for each class of security follows:

U.S. Government: In determining the fair value for U.S. Government securities we use the market approach. The primary inputs to the valuation include reported trades, dealer quotes for identical or similar assets in markets that are not active, benchmark yields, credit spreads, reference data and industry and economic events.

State and municipal: In determining the fair value for state and municipal securities we use the market approach. The primary inputs to the valuation include reported trades, dealer quotes for identical or similar assets in markets that are not active, benchmark yields, credit spreads, reference data and industry and economic events.

Mortgage-backed securities: In determining the fair value for mortgage-backed securities we use the market approach and to a lesser extent the income approach. The primary inputs to the valuation include reported trades, dealer quotes for identical or similar assets in markets that are not active, benchmark yields, credit spreads, reference data, industry and economic events and monthly payment information.

Asset-backed securities: In determining the fair value for asset-backed securities we use the market approach and to a lesser extent the income approach. The primary inputs to the valuation include reported trades, dealer quotes for identical or similar assets in markets that are not active, benchmark yields, credit spreads, reference data, industry and economic events, monthly payment information and collateral performance.

Corporate: In determining the fair value for corporate securities we use the market approach. The primary inputs to the valuation include reported trades, dealer quotes for identical or similar assets in markets that are not active, benchmark yields, credit spreads (for investment grade securities), observations of equity and credit default swap curves (for high-yield corporates), reference data and industry and economic events.

We review the third party pricing methodologies quarterly and test for significant differences between the market price used to value the security and recent sales activity.

The following tables present the progression in the Level 3 fair value category ($ in thousands):

Twelve months ended December 31, 2016	State and Municipal			Corporates			Asset-Backed Securities			Total
Balance at beginning of period	$	10		$	1,524		$	0		$	1,534
Total (lossses) gains, unrealized or realized
Included in net earnings	(25		)	12			0			(13		)
Included in other comprehensive income	(10		)	(60		)	3			(67		)
Purchases	0			0			620			620
Settlements	(10		)	(810		)	(209		)	(1,029		)
Transfers in	3,894			0			1,338			5,232
Transfers out	0			0			(1,339		)	(1,339		)
Balance at end of period	$	3,860		$	666		$	412		$	4,938
Twelve months ended December 31, 2015
Balance at beginning of period	$	0		$	3,134		$	150		$	3,285
Total (losses) gains, unrealized or realized
Included in net earnings	(0		)	(71		)	0			(72		)
Included in other comprehensive income	0			(80		)	0			(80		)
Purchases	0			0			0			0
Settlements	0			(1,112		)	(150		)	(1,263		)
Transfers in	10			0			0			10
Transfers out	0			(347		)	0			(347		)
Balance at end of period	$	10		$	1,524		$	0		$	1,534

Of the $4.9 million fair value of securities in Level 3 at December 31, 2016, which consisted of sevensecurities, we priced three based on non-binding broker quotes, oneprice was provided by our unaffiliated money manager and threesecurities, which were included in Level 3 because they were not rated by a NRSRO, were priced by a nationally recognized pricing service.

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INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

One security was transferred from Level 2 into Level 3 during the first quarter of 2016 because a price could not be determined using observable market inputs. However, during the third quarter of 2016, a price was obtained using observable market inputs and the security was transferred back into Level 2. Three securities during 2016 were transferred from Level 2 into Level 3 because they were no longer rated by a NRSRO. There were no transfers of securities between Levels 1 and 2 during 2016. During 2015one security was transferred from Level 2 into Level 3 because it was no longer rated by a NRSRO, and one security was transferred from Level 3 into Level 2 because its fair value was determinable using observable market inputs. There were no transfers of securities between Levels 1 and 2 during 2015.

The gains or losses included in net earnings are included in the line item "Net realized gains on investments" in the Consolidated Statements of Earnings. We recognize the net gains or losses included in other comprehensive income in the line item "Unrealized gains (losses) on investments, net" in the Consolidated Statements of Comprehensive Income and the line item "Change in unrealized gain on investments" or the line item "Change in non-credit component of impairment losses on fixed maturities" in the Consolidated Statements of Changes in Shareholders’ Equity.

The following table presents the carrying value and estimated fair value of our financial instruments ($ in thousands):

	December 31, 2016				December 31, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Cash and cash equivalents	$	92,800	$	92,800	$	62,483	$	62,483
Available-for-sale securities:
Fixed maturities	1,390,167		1,390,167		1,381,467		1,381,467
Equity securities	90,640		90,640		89,935		89,935
Short-term investments	2,907		2,907		4,651		4,651
Total cash and investments	$	1,576,514	$	1,576,514	$	1,538,536	$	1,538,536
Liabilities:
Long-term debt	$	273,591	$	278,726	$	273,383	$	281,581

Refer to Note 3 – Investments to the Consolidated Financial Statements for additional information on investments and Note 4 – Long-Term Debt to the Consolidated Financial Statements for additional information on long-term debt.

Note 3Investments

We consider all fixed maturity securities “available for sale” and report them at fair value with net unrealized gains or losses reported after-tax (net of any valuation allowance) as a component of accumulated other comprehensive income within shareholders' equity. The proceeds from sales of securities for the twelve months ended December 31, 2016, were $312.3 million, and are net of $0.8 million of receivable for securities sold during 2016 that had not settled at December 31, 2016. The proceeds from sales of securities for the twelve months ended December 31, 2015, were $341.3 million. The proceeds from sales of securities for the twelve months ended December 31, 2014, were $250.8 million and are net of $4.5 million of receivable for securities sold during 2014 that had not settled at December 31, 2014.

Gross gains of $6.2 million, $7.2 million and $5.1 million were realized on sales of available for sale securities during the years ended 2016, 2015 and 2014, respectively. Gross losses of $2.7 million, $3.2 million and $0.7 million were realized on sales of available for sale securities during the years ended 2016, 2015 and 2014, respectively. Gains or losses on securities are determined on a specific identification basis.

Summarized information for the major categories of our investment portfolio follows ($ in thousands):

December 31, 2016	Amortized Cost or Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		OTTI Recognized in Accumulated OCI(1)
Fixed maturities:
U.S. government	$	62,808	$	55	$	(377	)	$	62,485	$	0
State and municipal	477,834		2,313		(3,816		)	476,331		(51		)
Mortgage-backed securities:
Residential	343,095		2,306		(5,034		)	340,367		(1,967		)
Commercial	70,676		63		(939		)	69,801		0
Total mortgage-backed securities	413,772		2,369		(5,972		)	410,169		(1,967		)
Asset-backed securities	37,562		93		(47		)	37,608		(8		)
Corporates	400,685		4,389		(1,499		)	403,575		(41		)
Total fixed maturities	1,392,660		9,219		(11,711		)	1,390,167		(2,068		)
Equity securities	77,013		13,627		0			90,640		0
Short-term investments	2,909		0		(2		)	2,907		0
Total	$	1,472,582	$	22,846	$	(11,713	)	$	1,483,714	$	(2,068	)
December 31, 2015
Fixed maturities:
U.S. government	$	64,849	$	103	$	(282	)	$	64,669	$	0
State and municipal	472,402		7,393		(129		)	479,666		(51		)
Mortgage-backed securities:
Residential	333,554		3,678		(2,448		)	334,784		(2,374		)
Commercial	71,137		16		(929		)	70,224		0
Total mortgage-backed securities	404,691		3,694		(3,377		)	405,008		(2,374		)
Asset-backed securities	54,106		50		(138		)	54,018		(8		)
Corporates	385,462		1,281		(8,638		)	378,105		(61		)
Total fixed maturities	1,381,510		12,521		(12,564		)	1,381,467		(2,495		)
Equity securities	78,815		11,120		0			89,935		0
Short-term investments	4,656		0		(4		)	4,651		0
Total	$	1,464,981	$	23,640	$	(12,568	)	$	1,476,053	$	(2,495	)
(1) The total non-credit portion of OTTI recognized in Accumulated OCI reflecting the original non-credit loss at the time the credit impairment was determined.

The following tables set forth the amount of unrealized loss by investment category and length of time that individual securities have been in a continuous unrealized loss position ($ in thousands):

	Less than 12 Months								12 Months or More
December 31, 2016	Number of Securities with Unrealized Losses	Fair Value		Gross Unrealized Losses			Unrealized Losses as % of Cost		Number of Securities with Unrealized Losses	Fair Value		Gross Unrealized Losses			Unrealized Losses as % of Cost
Fixed maturities:
U.S. government	31	$	47,640	$	(377	)	0.8	%	0	$	0	$	0		0.0	%
State and municipal	146	303,428		(3,816		)	1.2	%	0	0		0			0.0	%
Mortgage-backed securities:
Residential	381	225,117		(4,559		)	2.0	%	40	11,891		(474		)	3.8	%
Commercial	14	38,002		(788		)	2.0	%	7	26,537		(150		)	0.6	%
Total mortgage-backed securities	395	263,119		(5,347		)	2.0	%	47	38,428		(625		)	1.6	%
Asset-backed securities	9	7,836		(46		)	0.6	%	1	519		(1		)	0.1	%
Corporate	98	145,089		(1,272		)	0.9	%	7	7,745		(227		)	2.8	%
Total fixed maturities	679	767,112		(10,859		)	1.4	%	55	46,693		(852		)	1.8	%
Equity securities	0	0		0			0.0	%	0	0		0			0.0	%
Short-term investments	3	2,907		(2		)	0.1	%	0	0		0			0.0	%
Total	682	$	770,019	$	(10,861	)	1.4	%	55	$	46,693	$	(852	)	1.8	%
December 31, 2015
Fixed maturities:
U.S. government	18	$	36,024	$	(241	)	0.7	%	4	$	4,687	$	(41	)	0.9	%
State and municipal	27	54,680		(129		)	0.2	%	0	0		0			0.0	%
Mortgage-backed securities:
Residential	205	133,814		(1,436		)	1.1	%	64	39,001		(1,012		)	2.5	%
Commercial	9	28,733		(349		)	1.2	%	10	34,169		(580		)	1.7	%
Total mortgage-backed securities	214	162,547		(1,785		)	1.1	%	74	73,170		(1,592		)	2.1	%
Asset-backed securities	36	35,313		(132		)	0.4	%	2	1,153		(7		)	0.6	%
Corporate	172	239,440		(7,149		)	2.9	%	12	14,373		(1,488		)	9.4	%
Total fixed maturities	467	528,003		(9,436		)	1.8	%	92	93,384		(3,128		)	3.2	%
Equity securities	0	0		0			0.0	%	0	0		0			0.0	%
Short-term investments	2	4,651		(4		)	0.1	%	0	0		0			0.0	%
Total	469	$	532,654	$	(9,440	)	1.7	%	92	$	93,384	$	(3,128	)	3.2	%

The determination of whether unrealized losses are “other-than-temporary” requires judgment based on subjective as well as objective factors. Factors we considered and resources we used in our determination include:

• whether the unrealized loss is credit-driven or a result of changes in market interest rates;

• the length of time the security’s market value has been below its cost;

• the extent to which fair value is less than cost basis;

• the intent to sell the security;

• whether it is more likely than not that there will be a requirement to sell the security before its anticipated recovery;

• historical operating, balance sheet and cash flow data contained in issuer SEC filings;

• issuer news releases;

• near-term prospects for improvement in the issuer and/or its industry;

• industry research and communications with industry specialists; and

• third-party research and credit rating reports.

We regularly evaluate for potential impairment each security position that has either of the following: a fair value of less than 95% of its book value or an unrealized loss that equals or exceeds $100,000.

The following table summarizes those securities, excluding the rabbi trust, with unrealized gains or losses:

	December 31, 2016		December 31, 2015
Number of positions held with unrealized:
Gains	527		602
Losses	737		561
Number of positions held that individually exceed unrealized:
Gains of $500,000	1		2
Losses of $500,000	0		0
Percentage of positions held with unrealized:
Gains that were investment grade	85	%	94	%
Losses that were investment grade	97	%	89	%
Percentage of fair value held with unrealized:
Gains that were investment grade	84	%	95	%
Losses that were investment grade	97	%	88	%

The following table sets forth the amount of unrealized losses, excluding the rabbi trust, by age and severity at December 31, 2016, ($ in thousands):

Age of Unrealized Losses	Fair Value of Securities with Unrealized Losses		Total Gross Unrealized Losses			Less Than 5%*			5% - 10%*			Total Gross Greater Than 10%*
Three months or less	$	643,988	$	(7,965	)	$	(7,922	)	$	(43	)	$	0
Four months through six months	117,157		(2,766		)	(2,586		)	(180		)	0
Seven months through nine months	5,039		(80		)	(80		)	0			0
Ten months through twelve months	3,836		(51		)	(51		)	0			0
Greater than twelve months	46,693		(852		)	(698		)	(74		)	(81		)
Total	$	816,712	$	(11,713	)	$	(11,336	)	$	(297	)	$	(81	)

* As a percentage of amortized cost or cost.    

The change in unrealized gains (losses) on securities included the following ($ in thousands):

	Pre-tax
December 31, 2016	Fixed  Maturities			Equity  Securities			Short-Term Investments			Tax  Effects			Net
Unrealized holding (losses) gains on securities arising during the period	$	(2,153	)	$	5,359		$	(0	)	$	(1,122	)	$	2,084
Realized (gains) losses included in net earnings	(671		)	(2,851		)	3			1,232			(2,287		)
Impairment losses recognized in net earnings	375			0			0			(131		)	243
Change in unrealized, net	$	(2,449	)	$	2,508		$	2		$	(21	)	$	40
December 31, 2015
Unrealized holding losses on securities arising during the period	$	(18,699	)	$	(3,388	)	$	(4	)	$	7,732		$	(14,359	)
Realized gains included in net earnings	(2,064		)	(2,039		)	(0		)	1,436			(2,667		)
Impairment losses recognized in net earnings	1,294			0			0			(453		)	841
Change in unrealized, net	$	(19,469	)	$	(5,427	)	$	(4	)	$	8,715		$	(16,185	)
December 31, 2014
Unrealized holding gains on securities arising during the period	$	13,174		$	1,440		$	4		$	(5,116	)	$	9,502
Realized gains included in net earnings	(3,137		)	(1,303		)	(5		)	1,556			(2,889		)
Impairment losses recognized in net earnings	160			0			0			(56		)	104
Change in unrealized, net	$	10,198		$	137		$	(1	)	$	(3,617	)	$	6,717

For fixed maturity securities that are other-than-temporarily impaired, we assess our intent to sell and the likelihood that we will be required to sell the security before recovery of our amortized cost. If a fixed maturity security is considered other-than-temporarily impaired but we do not intend to and are not more than likely to be required to sell the security before our recovery to amortized cost, the amount of the impairment is separated into a credit loss component and the amount due to all other factors. The excess of the amortized cost over the present value of the expected cash flows determines the credit loss component of an impairment charge on a fixed maturity security. The present value is determined using the best estimate of cash flows discounted at (i) the effective interest rate implicit at the date of acquisition for non-structured securities; or (ii) the book yield for structured securities. The techniques and assumptions for determining the best estimate of cash flows vary depending on the type of security. We recognize the credit loss component of an impairment charge in net earnings and the non-credit component in accumulated other comprehensive income. If we intend to sell or will, more likely than not, be required to sell a security, the entire amount of the impairment is treated as a credit loss.

For our securities held with unrealized losses, we believe, based on our analysis, that we will recover our cost basis in these securities and we do not intend to sell the securities nor is it more likely than not that there will be a requirement to sell the securities before they recover in value.

The following table is a progression of credit losses on fixed maturity securities that were bifurcated between a credit and non-credit component ($ in thousands):

	2016			2015
Balance at beginning of year	$	683		$	852
Reductions for securities sold and paydowns	(127		)	(168		)
Balance at end of year	$	557		$	683

The table below sets forth the scheduled maturities of fixed maturity securities at December 31, 2016, based on their fair values ($ in thousands). We report securities that do not have a single maturity date at average maturity. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers.

	Fair Value								Amortized Cost
Maturity	Securities with Unrealized Gains		Securities with Unrealized Losses		Securities with No Unrealized Gains or Losses		All Fixed Maturity Securities		All Fixed Maturity Securities
One year or less	$	84,529	$	27,794	$	2,500	$	114,823	$	114,372
After one year through five years	244,604		346,357		1,557		592,519		591,872
After five years through ten years	102,369		129,751		1,167		233,287		233,404
After ten years	1,763		0		0		1,763		1,679
Mortgage- and asset-backed securities	137,873		309,903		0		447,776		451,333
Total	$	571,138	$	813,805	$	5,224	$	1,390,167	$	1,392,660

Net Investment Income

The following table shows investment income earned and investment expenses incurred ($ in thousands):

	Twelve months ended December 31,
	2016			2015			2014
Gross investment income:
Interest income on fixed maturities, cash and cash equivalents	$	35,528		$	36,871		$	35,596
Dividends on equity securities	2,231			2,194			2,245
Gross investment income	37,759			39,065			37,841
Investment expenses	(2,222		)	(2,265		)	(2,211		)
Net investment income	$	35,537		$	36,800		$	35,629

Note 4Long-Term Debt

	December 31,
($ in thousands)	2016		2015
Principal	$	275,000	$	275,000
Unamortized debt issuance costs	1,409		1,617
Long-term debt less unamortized debt issuance costs	$	273,591	$	273,383

In September 2012 we issued $275 million principal of senior notes due September 2022 (the “5.0% Senior Notes”). The 5.0% Senior Notes accrue interest at 5.0%, payable semiannually. At the time we issued the 5.0% Senior Notes, we capitalized $2.2 million of debt issuance costs, which we are amortizing over the term of the 5.0% Senior Notes. We calculated the December 31, 2016, fair value of $278.7 million using a 228 basis point spread to the 10-year U.S. Treasury Note of 2.446%.

We paid interest on long-term debt of $13.8 million for each of the years ended December 31, 2016, 2015 and 2014.

In August 2014 we renewed our agreement for a $50 millionthree-year revolving credit facility (the “Credit Agreement”) that requires us to meet certain financial and other covenants. We are currently in compliance with all covenants under the Credit Agreement, and as of December 31, 2016, there were no borrowings outstanding against it.

44

INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 5Income Taxes

In the years 2016, 2015 and 2014, we paid $6.7 million, $28.5 million and $20.9 million, respectively, in taxes. The following is a reconciliation of income taxes at the statutory rate of 35.0% to the effective provision for income taxes as shown in the Consolidated Statements of Earnings ($ in thousands):

	Twelve months ended December 31,
	2016			2015			2014
Earnings before income taxes	$	62,132		$	74,832		$	83,138
Income taxes at statutory rate	21,746			26,191			29,098
Effect of:
Dividends-received deduction	(466		)	(458		)	(469		)
Tax-exempt interest	(2,456		)	(2,713		)	(2,752		)
Other	223			331			59
Provision for income taxes as shown on the Consolidated Statements of Earnings	$	19,047		$	23,351		$	25,936
GAAP effective tax rate	30.7		%	31.2		%	31.2		%

The total income tax provision consists of ($ in thousands):

	2016		2015		2014
Current	$	14,782	$	23,133	$	25,342
Deferred	4,265		218		594
Provision for income taxes	$	19,047	$	23,351	$	25,936

Deferred income tax assets and liabilities reflect temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes. The significant components of deferred tax assets and liabilities included in the Consolidated Balance Sheets were as follows ($ in thousands):

	As of December 31,
	2016			2015
Deferred tax assets:
Discount on loss reserves	$	4,853		$	5,344
Unearned premium reserve	42,844			42,788
Bad debts	4,972			5,385
Accrued bonuses	2,250			1,863
Deferred compensation	6,152			5,827
Long-term incentive compensation	814			1,081
Other	5,089			4,681
Gross deferred tax assets	66,974			66,969
Valuation allowance for deferred tax assets	(326		)	(166		)
Total deferred tax assets	66,648			66,803
Deferred tax liabilities:
Deferred policy acquisition costs	(31,897		)	(32,605		)
Investment securities – unrealized gains	(3,896		)	(3,875		)
Fixed assets	(5,037		)	0
Other	(1,405		)	(1,592		)
Total deferred tax liabilities	(42,235		)	(38,072		)
Net deferred tax assets	24,413			28,731
Current income tax (payable) receivable	(2,778		)	5,195
Current and deferred income taxes	$	21,635		$	33,926

An analysis is performed on a quarterly basis to determine if there is sufficient evidence that it is more likely than not that the deferred tax assets will be recognized for tax purposes. The evidence that is considered in assessing the need for a valuation allowance includes: (i) sufficient future taxable income; (ii) sufficient ordinary and capital taxable income in carryback periods; (iii) the reversals of existing taxable temporary differences; and (iv) tax planning strategies that could be utilized to accelerate the recognition of capital gains in the future. Based on this evaluation, it is management’s belief the only valuation allowance required at December 31, 2016, and December 31, 2015, relates to a net operating loss carryover generated by an inactive company that previously filed on a separate company basis. In 2016 we purchased the remaining 49% of this company’s stock resulting in their inclusion in the consolidated income tax return. Due to the limitations that will apply to utilizing the subsidiary’s net operating loss, the valuation allowance equals 100% of the subsidiary’s net operating loss, which will start expiring in the year 2028.

We did not have any gross unrecognized tax benefits that would exceed a materiality threshold and therefore, there was no reduction to Retained Earnings in our Consolidated Balance Sheets at January 1, 2016. The gross unrecognized tax benefit did not exceed the materiality threshold as of December 31, 2016.

The Company is not currently under examination by the IRS and the statute of limitations has expired for all years prior to 2013.

Note 6Computation of Net Earnings per Share

The following table illustrates our computations of basic and diluted net earnings per common share ($ in thousands, except per share figures):

	Twelve months ended December 31,
	2016		2015		2014
Net earnings	$	43,085	$	51,481	$	57,201
Average basic shares outstanding	11,018		11,334		11,440
Basic net earnings per share	$	3.91	$	4.54	$	5.00
Average basic shares outstanding	11,018		11,334		11,440
Restricted stock not vested	26		16		37
Dilutive effect of assumed option exercises	0		0		1
Dilutive effect of Performance Share Plan	57		67		84
Average diluted shares outstanding	11,101		11,417		11,562
Diluted net earnings per share	$	3.88	$	4.51	$	4.95

Note 7Share-Based Compensation

We established the Amended and Restated 2013 Stock Incentive Plan (the “2013 Plan”), which was approved by the Company’s shareholders on May 21, 2013. Under the 2013 Plan, 750,000 shares are authorized and reserved for issuance. Upon the approval by the shareholders of the 2013 Plan, we became prohibited from issuing any further grants under the Restricted Stock Plan, Directors’ Plan, Performance Share Plan, or Stock Option Plan (collectively, the "Prior Plans"). However, all outstanding awards under the Prior Plans remain outstanding and will continue to be administered and settled with the applicable provisions of the Prior Plans. We have a policy of issuing new stock for shares issued under the 2013 Plan.

The number of shares issued, net of forfeitures, by plan, for share-based compensation arrangements was as follows:

	2016	2015		2014
	2013 Plan	2013 Plan	Prior Plans	2013 Plan	Prior Plans
Restricted Stock	0	(1,613)	0	46,328	0
Non-employee Directors’ Stock	7,596	7,013	0	8,016	0
Performance Shares	24,123	0	37,155	0	55,245
Total	31,719	5,400	37,155	54,344	55,245

The amount of total compensation cost for share-based compensation arrangements was as follows ($ in thousands):

	Twelve months ended December 31,
	2016				2015				2014
	Expense Recognized in Earnings		Tax Benefit		Expense Recognized in Earnings		Tax Benefit		Expense Recognized in Earnings		Tax Benefit
Restricted Stock	$	1,037	$	363	$	799	$	280	$	1,126	$	394
Non-employee Directors’ Stock Ownership Plan	600		210		510		178		520		182
Employee Stock Purchase Plan	46		0		45		0		55		0
Performance Shares	661		231		1,795		628		933		327
Total	$	2,343	$	804	$	3,148	$	1,086	$	2,634	$	903

Restricted Stock

On August 5, 2014, the Committee approved the grant of restricted stock to certain officers under the 2013 Plan. A total of 37,244 shares will vest in full on August 5, 2017, with the remaining 7,471 vesting on October 19, 2018. As of December 31, 2016, the weighted-average grant date fair value of these 44,715 shares was $69.54. During the vesting period, the shares of restricted stock will not have voting rights but will accrue dividends, which we will not pay until the shares have vested. We treat the restricted shares as issued and outstanding for calculation of diluted earnings per share only. Until fully vested, we will not consider the shares issued and outstanding for purposes of the basic earnings per share calculation.

Non-employee Directors’ Stock

Shares are issued to non-employee directors on or about June 1 of each year as part of their compensation. We restrict these shares from sale or transfer by any recipient for six months from the grant date. These shares are treated as issued and outstanding for basic and diluted earnings per share calculations.

Performance Shares

The purpose of the Performance Shares is to align further the interest of management with our long-term shareholders by including performance-based compensation, payable in shares of common stock, as a component of an executive’s annual compensation. The Committee administers the Performance Shares and (i) establishes the performance goals, which may include but are not limited to, combined ratio, premium growth, growth within certain geographic areas and earnings per share or return on equity over the course of the upcoming three-year period; (ii) determines the Performance Share participants; (iii) sets the performance share units to be awarded to such participants; and (iv) sets the rate at which performance share units will convert to shares of common stock based upon attainment of the performance goals.

Employee Stock Purchase Plan

Under the employee stock purchase plan (ESPP), all eligible full-time employees may purchase shares of our common stock at a 15% discount to the current market price. Employees may allocate up to 25% of their base salary with a maximum annual participation amount of $25,000. If a participant sells any shares purchased under the ESPP within one year, we preclude that employee from participating in the ESPP for one year from the date of sale. The source of shares issued to participants is treasury shares or authorized but previously unissued shares. The maximum number of shares that we may issue under the ESPP may not exceed 1,000,000, of which we have issued 72,989 as of December 31, 2016. Our ESPP is qualified under Section 423 of the Internal Revenue Code of 1986, as amended. We treat participants’ shares as issued and outstanding for basic and diluted earnings per share calculations.

Note 8Benefit Plans

We provide retirement benefits for all eligible employees by matching contributions made on participants' discretionary basis to participants' accounts in our qualified 401(k) Retirement Plan. Eligible employees may contribute up to a maximum of the lesser of $18,000 per year or 25% of the participant's salary in 2016. Participants age 50 or over at the end of the calendar year may make an additional elective deferral contribution of up to $6,000 for 2016. These additional contributions (commonly referred to as catch-up contributions) are not subject to the general limits that apply to 401(k) plans. The matching percentage made by us was 100% of participants' contributions up to a ceiling of 4% and 50% of the next 2% of contributions with a maximum match of $13,250 in 2016. The plan expense was $5.1 million, $4.9 million and $5.1 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Our Supplemental Employee Retirement Plan (SERP) is a non-qualified deferred compensation plan that enables eligible employees to make contributions and to receive employer-matching contributions that the provisions of the 401(k) Retirement Plan or laws preclude due to limits on compensation. We contributed $0.1 million to the SERP for each of the years ended December 31, 2016, 2015 and 2014. We maintain a rabbi trust that includes investments to fund the SERP. As of December 31, 2016, investments in the rabbi trust totaled $2.0 million. We reflected these investments at fair value as equity securities on the Consolidated Balance Sheets.

We maintain a non-qualified deferred compensation plan for certain highly compensated employees, which permits the participants to defer a portion of their salaries and bonuses. The deferred amounts accrue interest at our approximate long-term borrowing rate. The deferred amounts are our general obligation liability and amounted to $17.6 million, $16.6 million and $15.3 million at December 31, 2016, 2015 and 2014, respectively. We credited interest of approximately $0.7 million, $0.6 million and $0.7 million for these same periods.

We also provide post-retirement medical and life insurance benefits to certain eligible retirees. We have determined that the benefits provided under this plan are actuarially equivalent to those benefits provided by the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA). Our calculation of the accumulated post-retirement benefit obligation (APBO) as of December 31, 2016, 2015 and 2014 does not reflect the government subsidy provided by the MMA, other than as reflected in the insured over 65 rates going forward.

Unrecognized actuarial gains of $1.2 million ($0.8 million net of tax) and prior service costs of $0.2 million ($0.1 million net of tax) that have not yet been recognized in net periodic post-retirement benefit costs are included in accumulated other comprehensive income at December 31, 2016. We expect to recognize a $0.1 million actuarial gain and $0.1 million of amortization of prior service costs in net periodic post-retirement benefit income during the fiscal year ending December 31, 2017.

We recognized the unfunded status of the APBO plan of $3.6 million at December 31, 2016, in the Consolidated Balance Sheets. We expect no plan assets to be returned to us during the fiscal year ended December 31, 2017.

The following tables show data related to the APBO plan ($ in thousands):

	2016			2015
Net benefit obligation at beginning of year	$	3,729		$	4,313
Service cost	183			235
Interest cost	132			146
Participant contributions	37			30
Assumption change	44			(280		)
Actuarial gain	(176		)	(425		)
Gross benefits paid	(338		)	(289		)
Net benefit obligation at end of year	$	3,613		$	3,729

The following table discloses the components of net periodic post-retirement benefit cost ($ in thousands):

	2016			2015			2014
Service cost	$	183		$	235		$	198
Interest cost	132			146			150
Amortization of prior service cost	71			71			71
Amortization of net cumulative gain	(114		)	(5		)	(81		)
Net periodic post-retirement benefit cost	$	273		$	447		$	339

The following table discloses discount rates used to determine benefit obligations:

	2016	2015	2014
Discount rate	3.60%	3.70%	3.50%

The weighted average health care cost trend rate used in measuring the accumulated post-retirement benefit cost is 8.0% for 2017, declining to 5.0% in 2038.

The following table discloses the effects of a hypothetical one percentage point increase and the effects of a hypothetical one percentage point decrease in the assumed healthcare trend rate ($ in thousands):

	2016			2015			2014
A one percentage point hypothetical change in the assumed healthcare trend rate would have the following effect on the post-retirement benefit obligations:
1% increase	$	184		$	304		$	396
1% decrease	(162		)	(269		)	(348		)
A one percentage point hypothetical change in the assumed healthcare trend rate would have the following effect on the aggregate of the service and interest cost components of net periodic post-retirement healthcare benefit costs:
1% increase	$	40		$	49		$	40
1% decrease	(34		)	(42		)	(34		)

The following table reconciles the beginning and ending balances of the fair value of plan assets for the years ended December 31, 2016, and 2015 ($ in thousands):

	2016			2015
Fair value of plan assets at beginning of year	$	0		$	0
Employer contributions	301			259
Participant contributions	37			30
Gross benefits paid	(338		)	(289		)
Fair value of plan assets at end of year	$	0		$	0

The following table presents the funded status and the amounts recognized in the Consolidated Balance Sheets ($ in thousands):

	2016			2015
Fair value of plan assets	$	0		$	0
Benefit obligations	(3,613		)	(3,729		)
Funded status at end of year	(3,613		)	(3,729		)
Contributions made after the measurement date	0			0
Unrecognized actuarial net (gain) loss	0			0
Unrecognized prior service cost	0			0
Net amount recognized at end of year	$	(3,613	)	$	(3,729	)

The following table presents the 10-year forecast and best estimate of expected benefit payments ($ in thousands):

	2016			2015			2014
2017	$	295	2016	$	301	2015	$	259
2018	287		2017	280		2016	294
2019	289		2018	281		2017	304
2020	281		2019	294		2018	314
2021	283		2020	287		2019	337
2022-2026	1,549		2021-2025	1,583		2020-2024	1,840
10-Year Total	$	2,983		$	3,026		$	3,348

Our best estimate of contributions expected to be paid to the plan during the fiscal year beginning January 1, 2017, is $0.3 million.

45

INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 9Quarterly Operating Results (Unaudited)

While we recognize insurance premium on a relatively level basis, claim losses related to adverse weather (snow, hail, hurricanes, tornadoes, etc.) and customer driving behavior may be seasonal. Quarterly results rely heavily on estimates and are not necessarily indicative of results for longer periods.

The following are quarterly results of our consolidated operations for the three years ended December 31, 2016, ($ in thousands, except per share amounts):

2016	1st Quarter		2nd Quarter			3rd Quarter			4th Quarter		Total Year
Revenues	$	370,162	$	375,084		$	378,124		$	415,336	$	1,538,706
Net earnings	7,708		11,015			2,753			21,609		43,085
Net earnings per share:
Basic	$	0.70	$	1.00		$	0.25		$	1.96	$	3.91
Diluted	0.69		0.99			0.25			1.95		3.88
2015
Revenues	$	366,973	$	374,757		$	372,383		$	369,919	$	1,484,032
Net earnings	11,154		13,493			15,737			11,097		51,481
Net earnings per share:
Basic	$	0.98	$	1.18		$	1.39		$	0.99	$	4.54
Diluted	0.97		1.18			1.38			0.99		4.51
2014
Revenues	$	361,613	$	367,954		$	366,160		$	365,982	$	1,461,709
Net earnings	10,327		10,667			14,855			21,352		57,201
Net earnings per share:
Basic	$	0.90	$	0.93		$	1.30		$	1.87	$	5.00
Diluted	0.89		0.92			1.29			1.85		4.95
Net realized gains (losses) on investments amounted to:
	1st Quarter		2nd Quarter			3rd Quarter			4th Quarter		Total Year
2016	$	139	$	(164	)	$	1,282		$	1,887	$	3,145
2015	1,169		214			(410		)	1,835		2,809
2014	645		1,846			1,013			781		4,284

46

INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 10Insurance Reserves

The following table provides an analysis of changes in the liability for losses and LAE, net of reinsurance ($ in thousands):

	2016			2015			2014
Balance at Beginning of Period
Unpaid losses on known claims	$	237,660		$	235,037		$	221,447
IBNR losses	290,097			277,482			262,660
LAE	142,207			155,658			162,469
Total unpaid losses and LAE	669,965			668,177			646,577
Reinsurance recoverables	(14,694		)	(14,370		)	(14,431		)
Unpaid losses and LAE, net of reinsurance recoverables	655,271			653,808			632,146
Current Activity
Loss and LAE incurred:
Current accident year	1,120,756			1,064,927			1,019,033
Prior accident years	(24,001		)	(28,926		)	(17,405		)
Total loss and LAE incurred	1,096,755			1,036,001			1,001,628
Loss and LAE payments:
Current accident year	(687,554		)	(656,317		)	(602,732		)
Prior accident years	(396,147		)	(378,221		)	(377,235		)
Total loss and LAE payments	(1,083,701		)	(1,034,538		)	(979,967		)
Balance at End of Period
Unpaid losses and LAE, net of reinsurance recoverables	668,325			655,271			653,808
Add back reinsurance recoverables	17,130			14,694			14,370
Total unpaid losses and LAE	685,455			669,965			668,177
Unpaid losses on known claims	238,412			237,660			235,037
IBNR losses	306,641			290,097			277,482
LAE	140,402			142,207			155,658
Total unpaid losses and LAE	$	685,455		$	669,965		$	668,177

The $24.0 millionfavorable reserve development during the twelve months ended December 31, 2016, was primarily due to decreases in severity estimates in Florida bodily injury and personal injury protection coverages related to accident years 2015 and prior, partially offset by increases in severity estimates in California material damage and bodily injury coverages as well as bodily injury coverages in our commercial vehicle product, all related to accident year 2015.

The $28.9 millionfavorable reserve development during the twelve months ended December 31, 2015, was primarily due to decreases in severity estimates in Florida bodily injury coverages and California bodily injury loss adjustment expense estimates, all related to accident years 2013 and 2014.

The $17.4 millionfavorable reserve development during the twelve months ended December 31, 2014, was primarily due to decreases in California property damage severity estimates and in both severity and frequency estimates in Florida bodily injury coverages, all related to accident year 2013.

The following tables provide incurred losses and allocated loss adjustment expenses (ALAE) as well as cumulative paid claims and ALAE, net of reinsurance, for the prior ten accident years for our two largest lines of business. In addition, as of the most recent reporting period, the total of incurred but not reported (IBNR) reserves plus expected development on reported claims and the cumulative number of reported claims are presented ($ in thousands, except severity). The information about incurred and paid claims development for the years ended December 31, 2007 to December 31, 2015 is presented as supplementary information.

	Personal Auto
Accident Year	Incurred losses and ALAE, net of reinsurance recoverable For the years ended December 31,																				IBNR & expected development on reported claims		Cumulative number of reported claims (1)	Severity (2)
	(unaudited)
	2007		2008		2009		2010		2011		2012		2013		2014		2015		2016		2016		2016	2016
2007	$	600,087	$	612,555	$	596,818	$	585,525	$	582,153	$	578,186	$	578,429	$	577,799	$	577,577	$	577,777	$	0	283,087	$	2,041
2008			545,873		533,293		517,125		513,175		511,141		511,490		509,922		509,250		509,058		4		247,202	2,059
2009					497,393		473,328		472,772		471,867		471,714		472,523		473,000		473,359		10		230,828	2,051
2010							541,302		554,167		557,592		559,253		557,625		558,936		557,477		16		270,702	2,059
2011									608,636		633,011		638,400		637,569		638,507		635,905		578		307,904	2,063
2012											739,820		750,522		751,262		751,601		748,166		5,644		360,236	2,061
2013													805,039		805,460		789,428		782,369		11,736		364,784	2,113
2014															807,278		796,084		784,928		21,812		354,013	2,156
2015																	839,059		841,144		41,629		365,037	2,190
2016																			874,326		206,058		343,254	1,947
																	Total		$	6,784,508

Accident Year		Cumulative paid losses and ALAE, net of reinsurance recoverable For the years ended December 31,
		(unaudited)
		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
2007		$	359,059	$	522,711	$	556,520	$	568,792	$	574,082	$	575,600	$	576,656	$	577,147	$	577,383	$	577,640
2008				320,317		453,092		485,866		499,876		505,063		507,822		508,674		508,831		508,960
2009						285,154		408,535		447,178		460,463		465,453		470,032		471,789		473,074
2010								325,911		485,920		527,538		543,884		550,025		554,410		556,781
2011										374,367		554,245		602,523		621,919		629,992		633,861
2012												450,434		655,303		711,636		731,205		739,354
2013														480,464		692,039		744,188		762,770
2014																485,384		694,607		744,687
2015																		530,264		748,850
2016																				554,216
		Total																		$	6,300,193
Outstanding liabilities for unpaid losses and ALAE prior to 2007, net of reinsurance recoverable																				1,230
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance recoverable																				$	485,545
(1)	The cumulative number of reported claims is measured by individual claimant at a coverage level.
(2)	Calculated severity amounts by accident year are based on inception-to-date incurred less IBNR and expected development dollars and reported claims. Note that older accident years are more developed than recent accident years.

	Commercial Vehicle
Accident Year	Incurred losses and ALAE, net of reinsurance recoverable For the years ended December 31,																				IBNR & expected development on reported claims		Cumulative number of reported claims (1)	Severity (2)
	(unaudited)
	2007		2008		2009		2010		2011		2012		2013		2014		2015		2016		2016		2016	2016
2007	$	25,689	$	23,743	$	23,028	$	21,935	$	21,099	$	20,781	$	20,674	$	20,639	$	20,631	$	20,631	$	0	6,356	$	3,246
2008			24,457		21,187		18,960		18,893		18,320		18,045		17,973		17,996		17,996		0		6,595	2,729
2009					35,627		31,903		31,226		28,943		27,598		27,533		27,402		27,385		0		9,059	3,023
2010							41,321		39,149		35,881		34,539		33,397		33,845		33,460		44		11,202	2,983
2011									40,294		39,094		36,202		35,052		35,130		34,507		60		11,497	2,996
2012											51,085		46,950		46,284		46,405		45,832		706		13,118	3,440
2013													62,157		51,438		52,083		51,407		1,123		14,426	3,486
2014															65,724		63,304		64,682		2,128		16,735	3,738
2015																	81,849		84,314		3,271		20,043	4,043
2016																			95,536		29,491		20,309	3,252
																	Total		$	475,750

Accident Year		Cumulative paid losses and ALAE, net of reinsurance recoverable For the years ended December 31,
		(unaudited)
		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
2007		$	9,570	$	15,618	$	17,730	$	19,076	$	20,424	$	20,555	$	20,617	$	20,630	$	20,630	$	20,630
2008				9,095		14,489		16,224		17,331		17,887		17,947		17,948		17,994		17,994
2009						13,463		21,735		25,929		26,734		27,229		27,340		27,350		27,355
2010								16,110		25,904		30,120		32,192		32,690		33,286		33,349
2011										17,398		28,427		32,127		33,495		34,223		34,375
2012												22,273		35,322		41,500		43,623		44,578
2013														23,834		40,038		45,200		47,270
2014																28,628		47,162		55,131
2015																		37,918		63,932
2016																				42,467
		Total																		$	387,082
Outstanding liabilities for unpaid losses and ALAE prior to 2007, net of reinsurance recoverable																				33
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance recoverable																				$	88,700
(1)	The cumulative number of reported claims is measured by individual claimant at a coverage level.
(2)	Calculated severity amounts by accident year are based on inception-to-date incurred less IBNR and expected development dollars and reported claims. Note that older accident years are more developed than recent accident years.

The reconciliation of the net incurred and paid development tables to the liability for unpaid losses and LAE in the consolidated balance sheets is as follows ($ in thousands):

	As of December 31, 2016
Liabilities for unpaid losses and LAE:
Personal Auto	$	485,545
Commercial Vehicle	88,700
Other Lines	7,217
Total liabilities for unpaid losses and LAE, net of reinsurance	581,463
Reinsurance recoverables:
Personal Auto	7,393
Commercial Vehicle	7,941
Other Lines	1,795
Total reinsurance recoverables	17,130
Unallocated loss adjustment expenses	86,862
Gross liability for unpaid losses and LAE	$	685,455

Other Lines includes our roadside assistance coverage, which has been excluded from the Personal Auto triangles as the high frequency and low severity of these claims can distort analysis, as well as Classic Collector.

Incurred but not reported (IBNR) reserves are established for the quarter and year-end based on a quarterly reserve analysis by our actuarial staff. Various standard actuarial tests are applied to subsets of the business at a state, product and coverage basis. Included in the analyses are the following:

• Paid and incurred extrapolation methods utilizing paid and incurred loss development to predict ultimate losses;

• Paid and incurred frequency and severity methods utilizing paid and incurred claims count development and paid and incurred claims cost development to predict ultimate average frequency (claims count per policy or auto insured) or ultimate average severity (cost per claim); and

• Paid and incurred Bornhuetter-Ferguson methods adding expected development to actual paid or incurred experience to project ultimate losses.

For each subset of the business evaluated, each test generates a point estimate based on development factors applied to known paid and incurred losses and claim counts. Selections of development factors are based on historical loss development patterns with adjustment based on professional actuarial judgment where anticipated development patterns vary from those seen historically. Deviations from historical loss development patterns may occur due to changes in items such as claims settlement and payment practices, business mix, coverage limits and deductibles, inflation trends in auto repair and medical costs and legal and regulatory trends affecting claims settlements. This estimation of IBNR requires selection of hundreds of such factors. A single point estimate for the subset being evaluated is then selected from the results of various tests, based on a combination of simple averages of the point estimates of the various tests and selections based on professional actuarial judgment. During recent years, paid methods have been less reliable because of changes in settlement practices, so we have more heavily relied on incurred methods.

As described above, various actuarial methods are utilized to determine reserves that are booked to financials. Weightings of tests and methods at a detailed level may change from evaluation to evaluation based on a number of observations, measures and time elements. On an overall basis, changes to methods and/or assumptions underlying reserve estimations and selections as of December 31, 2016, were not considered material.

The following table provides supplementary information about the average annual percentage payout of incurred losses and ALAE, net of reinsurance:

	Average annual payout of losses and LAE, net of reinsurance
	(unaudited)
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Personal Auto	61.3	%	26.9	%	6.9	%	2.7	%	1.1	%	0.7	%	0.3	%	0.1	%	0.0	%	0.0	%
Commercial Vehicle	47.3	%	30.3	%	12.0	%	5.6	%	3.4	%	1.0	%	0.1	%	0.2	%	0.0	%	0.0	%

47

INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 11Reinsurance

The following table shows written and earned premium included in earnings for reinsurance assumed and amounts deducted from written and earned premium in connection with reinsurance ceded ($ in thousands):

Year	Direct Written Premium		Reinsurance Assumed		Reinsurance Ceded			Net Written Premium		% of Amount Assumed to Net
2016	$	1,401,378	$	36	$	(8,955	)	$	1,392,459	0.0	%
2015	1,387,864		2		(14,579		)	1,373,287		0.0	%
2014	1,360,807		63		(13,266		)	1,347,604		0.0	%
Year	Direct Earned Premium		Reinsurance Assumed		Reinsurance Ceded			Net Earned Premium		% of Amount Assumed to Net
2016	$	1,403,682	$	34	$	(12,052	)	$	1,391,664	0.0	%
2015	1,360,473		4		(13,913		)	1,346,564		0.0	%
2014	1,337,557		57		(11,679		)	1,325,935		0.0	%

Assumed Reinsurance

Assumed business consists of business assumed from unaffiliated insurance companies and involuntary pools and associations.

We assumed $9.7 million, $10.0 million and $11.1 million, respectively, at December 31, 2016, 2015 and 2014 of unpaid losses and LAE from unaffiliated insurance companies. We assumed less than $1,000 in premium from unaffiliated insurance companies in 2016 and 2015 and none was assumed in 2014.

During the twelve months ended December 31, 2016, 2015 and 2014, we assumed, from involuntary pools and associations, premium and unpaid losses and LAE of less than $0.1 million each.

Ceded Reinsurance

We use excess of loss, catastrophe and extra-contractual loss reinsurance to mitigate the financial impact of large or catastrophic losses. During 2014 and 2015 our catastrophe reinsurance protection was 100% of $55 million in excess of $5 million per event. During 2016 our catastrophe reinsurance protection was $95 million in excess of $5 million per event. The first $10 million of coverage was reinsured at 50% with the remaining layers at 100%. Effective June 1, 2016, we modified our excess of loss reinsurance protection for commercial auto to cover losses up to $500,000 for claims in excess of $500,000 per occurrence. In addition, we added a 75% quota share for our general liability business. Our extra-contractual loss reinsurance provides protection for losses up to $10 million in excess of $5 million for any single extra-contractual loss. We also use reinsurance to mitigate losses on our Classic Collector business.

Premium ceded for the twelve months ended December 31, 2016, includes the return of $5.9 million of unearned premium due to the termination of the previous excess of loss contract. The $1.8 million of ceding commissions associated with this unearned premium was returned to the reinsurers.

Ceded reinsurance for all programs reduced our incurred losses and LAE by $8.0 million, $4.3 million and $3.5 million for the twelve months ended December 31, 2016, 2015 and 2014, respectively.

Note 12Statutory Information

Capital and Surplus

Insurance companies are required to file financial statements with state insurance regulatory authorities prepared on an accounting basis prescribed or permitted by such authorities (statutory basis). Net earnings and capital and surplus on a statutory basis were as follows ($ in thousands):

Statutory Net Earnings						Statutory Capital and Surplus
2016		2015		2014		2016		2015
$	62,247	$	61,379	$	67,360	$	669,301	$	659,777

For the twelve-month periods ended December 31, 2016, 2015 and 2014, statutory results differed from net earnings on a GAAP basis primarily due to the amortization of deferred acquisition costs, the basis difference in realized gains and holding company expenses, including interest.

At December 31, 2016, the consolidated amount of statutory capital and surplus necessary to satisfy regulatory requirements as defined by the National Association of Insurance Commissioners' (NAIC) Risk-Based Capital (RBC) calculation was $141.9 million. This amount of statutory capital and surplus represents the Company Action Level (CAL) of minimum surplus. Falling below this level would require a company to prepare and submit an RBC plan to address the deficiency in surplus to the CAL to the commissioner of its state of domicile.

Restrictions on Transfer of Funds and Assets of Subsidiaries

As of December 31, 2016, there are no regulatory restrictions on the payment of dividends to our shareholders. However, our ability to declare and pay dividends will depend on the working capital in the holding company, as well as dividends received from our insurance subsidiaries.

Payments of dividends, loans and advances by our insurance subsidiaries are subject to certain restrictions under various state laws, federal regulations and debt covenants that limit the amount of dividends, loans and advances that can be paid. Under applicable restrictions, the maximum amount of dividends payable in 2017 from our insurance subsidiaries without regulatory approval is approximately $59.3 million. Additional amounts of dividends, loans and advances require regulatory approval.

Note 13Legal and Regulatory Proceedings

From time to time we and our subsidiaries are named as defendants in various lawsuits incidental to our insurance operations. We consider legal actions relating to claims made in the ordinary course of seeking indemnification for a loss covered by the insurance policy in establishing loss and LAE reserves.

We also face in the ordinary course of business lawsuits that seek damages beyond policy limits, commonly known as extra-contractual claims, as well as class action and individual lawsuits that involve issues not unlike those facing other insurance companies and employers. We continually evaluate potential liabilities and reserves for litigation of these types using the criteria established by the Contingencies topic of the FASC. Under this guidance we may only record reserves for a loss if the likelihood of occurrence is probable and we can reasonably estimate the amount. If a material loss is judged to be reasonably possible, we will disclose an estimated range of loss or state that an estimate cannot be made. We consider each legal action using this guidance and record reserves for losses as warranted by establishing a reserve captured within our Consolidated Balance Sheets line items “Unpaid losses and loss adjustment expenses” for extra-contractual claims and “Other liabilities” for class action and other non-claims related lawsuits. We record amounts incurred on the Consolidated Statements of Earnings within “Losses and loss adjustment expenses” for extra-contractual claims and “Other expenses” for class action and other non-claims related lawsuits.

Certain claims and legal actions have been brought against us for which we have accrued no loss, and for which an estimate of a possible range of loss cannot be made under the above rules. While it is not possible to predict the ultimate outcome of these claims or lawsuits, we do not believe they are likely to have a material effect on our financial condition or liquidity. However, losses incurred because of these cases could have a material adverse impact on net earnings in a given period.

Note 14Commitments and Contingencies

Commitments

Minimum rental commitments under non-cancelable leases with an initial or remaining term of more than one year as of December 31, 2016, were as follows ($ in thousands):

Due In	Operating Leases		Capital Leases
2017	$	4,542	$	722
2018	3,936		711
2019	2,342		698
2020	1,765		333
2021	1,550		202
Thereafter	1,225		0
Total	$	15,360	$	2,666

All of these leases expire within seven years. The most significant leased office spaces are located in Miami, Florida and Cerritos, California, with $4.3 million and $3.9 million, respectively, due over the remaining lease terms.

The operating leases above include leased vehicles. As vehicles are surrendered, they are sold for cash by the lessor. We guarantee that proceeds from sales will be at least equal to the lessor's depreciated book value. Otherwise, we are credited the excess or we pay the deficit. A significant portion of our fleet vehicles, which have minimum lease terms of 367 days, were traded in during the first six months of 2016. The lessor's depreciated book value at December 31, 2016, on the vehicles we lease was $6.3 million, which represents the maximum deficit we would be required to pay if the lessor received no proceeds from the sale. Historically, we have not made any material additional rental payments due to surrendered vehicles. As of December 31, 2016, the current fair market value of the vehicles we lease was approximately $5.0 million.

Lease expense incurred for all leases during the last three years was as follows ($ in thousands):

	Twelve months ended December 31,
	2016		2015		2014
Lease expense	$	6,688	$	9,611	$	10,447

Contingencies

Based on the criteria established by the Contingencies topic of the FASC, we have the following loss contingencies for which we accrue in our financial statements:

•     Legal and regulatory proceedings	Note 13
•     Allowances for uncollectible accounts	Note 15

For each item listed above, please refer to the notes referenced for additional discussion.

Note 15Additional Information

Allowances for Uncollectible Accounts

Agents’ balances and premium receivable included in the Consolidated Balance Sheets are net of allowances for uncollectible accounts. The provision for such losses is included in commissions and other underwriting expenses. A progression of the aggregate allowance follows ($ in thousands):

	2016			2015			2014
Beginning balance	$	15,385		$	15,510		$	15,884
Provision for losses	17,095			19,080			19,541
Uncollectible amounts written off	(18,273		)	(19,204		)	(19,916		)
Ending balance	$	14,207		$	15,385		$	15,510

Negative Cash Book Balances

Negative cash book balances, included in the line item “Other liabilities” in the Consolidated Balance Sheets, were $40.6 million, $41.4 million and $51.2 million at December 31, 2016, 2015 and 2014, respectively.

48

INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 16Accumulated Other Comprehensive Income

The components of other comprehensive income before and after tax are as follows ($ in thousands):

Twelve months ended December 31, 2016	Before Tax			Income Tax			Net
Accumulated change in post-retirement benefit liability, beginning of period	$	944		$	(331	)	$	614
Effect on other comprehensive income	88			(31		)	57
Accumulated change in post-retirement benefit liability, end of period	1,033			(361		)	671
Accumulated unrealized gains on investments, net, beginning of period	11,072			(3,875		)	7,197
Other comprehensive income before reclassification	3,205			(1,122		)	2,084
Reclassification adjustment for OTTI losses included in net income	375			(131		)	243
Reclassification adjustment for realized gains included in net income	(3,519		)	1,232			(2,287		)
Effect on other comprehensive income	61			(21		)	40
Accumulated unrealized gains on investments, net, end of period	11,133			(3,896		)	7,236
Accumulated other comprehensive income, beginning of period	12,016			(4,206		)	7,811
Change in post-retirement benefit liability	88			(31		)	57
Change in unrealized gains on investments, net	61			(21		)	40
Effect on other comprehensive income	149			(52		)	97
Accumulated other comprehensive income, end of period	$	12,165		$	(4,258	)	$	7,907
Twelve months ended December 31, 2015
Accumulated change in post-retirement benefit liability, beginning of period	$	174		$	(61	)	$	113
Effect on other comprehensive income	771			(270		)	501
Accumulated change in post-retirement benefit liability, end of period	944			(331		)	614
Accumulated unrealized gains on investments, net, beginning of period	35,972			(12,590		)	23,382
Other comprehensive income before reclassification	(22,091		)	7,732			(14,359		)
Reclassification adjustment for OTTI losses included in net income	1,294			(453		)	841
Reclassification adjustment for realized gains included in net income	(4,102		)	1,436			(2,667		)
Effect on other comprehensive income	(24,900		)	8,715			(16,185		)
Accumulated unrealized gains on investments, net, end of period	11,072			(3,875		)	7,197
Accumulated other comprehensive income, beginning of period	36,145			(12,651		)	23,494
Change in post-retirement benefit liability	771			(270		)	501
Change in unrealized gains on investments, net	(24,900		)	8,715			(16,185		)
Effect on other comprehensive income	(24,129		)	8,445			(15,684		)
Accumulated other comprehensive income, end of period	$	12,016		$	(4,206	)	$	7,811

49

INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Twelve months ended December 31, 2014	Before Tax			Income Tax			Net
Accumulated change in post-retirement benefit liability, beginning of period	$	(62	)	$	22		$	(40	)
Effect on other comprehensive income	235			(82		)	153
Accumulated change in post-retirement benefit liability, end of period	174			(61		)	113
Accumulated unrealized gains on investments, net, beginning of period	25,638			(8,973		)	16,665
Other comprehensive income before reclassification	14,618			(5,116		)	9,502
Reclassification adjustment for OTTI losses included in net income	160			(56		)	104
Reclassification adjustment for realized gains included in net income	(4,444		)	1,556			(2,889		)
Effect on other comprehensive income	10,334			(3,617		)	6,717
Accumulated unrealized gains on investments, net, end of period	35,972			(12,590		)	23,382
Accumulated other comprehensive income, beginning of period	25,576			(8,952		)	16,624
Change in post-retirement benefit liability	235			(82		)	153
Change in unrealized gains on investments, net	10,334			(3,617		)	6,717
Effect on other comprehensive income	10,569			(3,699		)	6,870
Accumulated other comprehensive income, end of period	$	36,145		$	(12,651	)	$	23,494

Note 17Segment Information

We manage our business based on product line and have three operating segments: Personal Auto, Commercial Vehicle and Classic Collector (our reportable segments are Personal Auto and Commercial Vehicle).

Our Personal Auto product provides coverage to individuals for liability to others for bodily injury and property damage and for physical damage to an insured's own vehicle from collision and various other perils. In addition, some states require policies to provide for first party personal injury protection, frequently referred to as no-fault coverage.

Our Commercial Vehicle product provides coverage to businesses for liability to others for bodily injury and property damage and for physical damage to vehicles from collision and various other perils. We primarily target businesses with fleets of 20 or fewer vehicles and average 1.9 vehicles per policy. We avoid businesses that are involved in what we consider to be hazardous operations or interstate commerce.

Our Classic Collector product provides coverage to individuals with classic or antique automobiles for liability to others for bodily injury and property damage and for physical damage to an insured's own vehicle from collision and various other perils.

Expense allocations are based on certain assumptions and estimates primarily related to revenue and volume. Depreciation and amortization expense, related to investments and debt issuance costs, are not allocated to a segment level. Total depreciation and amortization expense for 2016, 2015 and 2014 was $35.0 million, $34.7 million and $32.9 million, respectively.

All segment revenues are generated from external customers and represent the sum of "Earned premium" and "Installment and other fee income." The following table provides revenues by segment and a reconciliation to "Total revenues" as reported on the Consolidated Statements of Earnings ($ in thousands):

	Twelve months ended December 31,
Gross written premium:	2016			2015			2014
Personal Auto	$	1,240,037		$	1,246,492		$	1,237,774
Commercial Vehicle	145,272			126,036			108,640
Classic Collector	16,105			15,339			14,456
Total gross written premium	1,401,414			1,387,866			1,360,870
Ceded reinsurance:
Personal Auto	(4,036		)	(3,301		)	(3,407		)
Commercial Vehicle	(4,098		)	(10,679		)	(9,262		)
Classic Collector	(821		)	(600		)	(597		)
Total ceded reinsurance	(8,955		)	(14,579		)	(13,266		)
Net written premium:
Personal Auto	1,236,001			1,243,191			1,234,367
Commercial Vehicle	141,174			115,357			99,378
Classic Collector	15,284			14,739			13,859
Total net written premium	1,392,459			1,373,287			1,347,604
Change in unearned premium:
Personal Auto	10,401			(17,901		)	(10,506		)
Commercial Vehicle	(10,990		)	(8,395		)	(10,577		)
Classic Collector	(205		)	(427		)	(586		)
Total change in unearned premium	(795		)	(26,723		)	(21,669		)
Earned premium:
Personal Auto	1,246,402			1,225,290			1,223,860
Commercial Vehicle	130,183			106,962			88,801
Classic Collector	15,079			14,312			13,274
Total earned premium	1,391,664			1,346,564			1,325,935
Installment and other fee income:
Personal Auto	97,085			88,738			88,493
Commercial Vehicle	10,276			8,015			6,749
Classic Collector	0			0			0
Total installment and other fee income	107,361			96,753			95,242
Net investment income	35,537			36,800			35,629
Net realized gains on investments	3,145			2,809			4,284
Other income	1,000			1,106			619
Total revenues	$	1,538,706		$	1,484,032		$	1,461,709

Our management uses underwriting income and combined ratios calculated on a statutory accident year basis as primary measures of profitability. Statutory accident year underwriting income is calculated by subtracting losses and loss adjustment expenses and commissions and other underwriting expenses (including bad debt charge-offs on agents' balances and premium receivables) from the total of earned premium and installment and other fee income. The statutory accident year combined ratio represents the sum of the following ratios: (i) losses and LAE incurred, excluding development from prior accident years, as a percentage of net earned premium; and (ii) underwriting expenses incurred, including bad debt and net of fees, as a percentage of net written premium.

The primary differences between the calculation of the statutory accident year used by management and the statutory calendar year combined ratios is the exclusion of bad debt charge-offs and the inclusion of development on prior accident year loss and LAE reserves.

Certain expenses are treated differently under statutory accounting principles. Under GAAP, commissions, premium taxes and other variable costs incurred in connection with successfully writing new and renewal business are capitalized as deferred policy acquisition costs and amortized on a pro rata basis over the period in which the related premium is earned. On a statutory basis, these items are expensed as incurred. Additionally, bad debt charge-offs on agents' balances and premium receivables are included in the GAAP combined ratios.

The following tables present the underwriting income and combined ratio on a statutory accident year basis with reconciliations to "Earnings before income taxes" as presented on the Consolidated Statements of Earnings ($ in thousands). We do not allocate assets or "Provision for income taxes" to operating segments.

	Twelve months ended December 31, 2016
	Personal Auto				Commercial Vehicle					Classic Collector					Total
	Pre-tax Profit (Loss)		Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)
Statutory accident year underwriting income	$	21,766	98.4	%	$	1,905		97.0	%	$	1,022		92.8	%	$	24,692		98.2	%
Bad debt charge-offs	15,150				1,784					50					16,984
Favorable (unfavorable) development on prior accident years	27,958				(3,582		)			(375		)			24,001
Statutory calendar year underwriting income	64,874		94.9	%	106			98.5	%	697			94.9	%	65,677			95.3	%
Statutory-to-GAAP underwriting income differences															(19,555		)
GAAP calendar year underwriting income															46,122			96.7	%
Net investment income															35,537
Net realized gains on investments															3,145
Other income															1,000
Interest expense															(14,037		)
Corporate general and administrative expenses															(7,899		)
Other expenses															(1,736		)
Earnings before income taxes															$	62,132
(1) Management includes the provision for uncollectible accounts in the underwriting income and combined ratio on both statutory accident year and GAAP calendar year bases.

	Twelve months ended December 31, 2015
	Personal Auto				Commercial Vehicle					Classic Collector				Total
	Pre-tax Profit (Loss)		Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)		Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)
Statutory accident year underwriting income	$	24,876	97.7	%	$	876		97.8	%	$	2,063	84.7	%	$	27,815		97.6	%
Bad debt charge-offs	17,413				1,557					44				19,013
Favorable (unfavorable) development on prior accident years	33,633				(5,176		)			469				28,926
Statutory calendar year underwriting income	75,922		93.6	%	(2,743		)	101.3	%	2,576		81.1	%	75,754			94.0	%
Statutory-to-GAAP underwriting income differences														(16,658		)
GAAP calendar year underwriting income														59,096			95.6	%
Net investment income														36,800
Net realized gains on investments														2,809
Other income														1,106
Interest expense														(14,029		)
Corporate general and administrative expenses														(7,655		)
Other expenses														(3,296		)
Earnings before income taxes														$	74,832
(1) Management includes the provision for uncollectible accounts in the underwriting income and combined ratio on both statutory accident year and GAAP calendar year bases.

	Twelve months ended December 31, 2014
	Personal Auto				Commercial Vehicle					Classic Collector					Total
	Pre-tax Profit (Loss)		Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)
Statutory accident year underwriting income	$	46,627	96.0	%	$	(4,033	)	102.3	%	$	1,504		87.2	%	$	44,098		96.4	%
Bad debt charge-offs	18,692				1,314					18					20,025
Favorable (unfavorable) development on prior accident years	848				17,626					(1,070		)			17,405
Statutory calendar year underwriting income	66,168		94.5	%	14,907			81.1	%	453			95.2	%	81,528			93.6	%
Statutory-to-GAAP underwriting income differences															(16,537		)
GAAP calendar year underwriting income															64,990			95.1	%
Net investment income															35,629
Net realized gains on investments															4,284
Other income															619
Interest expense															(13,989		)
Corporate general and administrative expenses															(7,514		)
Other expenses															(882		)
Earnings before income taxes															$	83,138
(1) Management includes the provision for uncollectible accounts in the underwriting income and combined ratio on both statutory accident year and GAAP calendar year bases.

50

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

PART IV

ITEM 15

Exhibits and Financial Statement Schedules

		Page
(a)    Documents filed as part of this Report:
1.      Financial Statements are included in Part II, Item 8.		28
2.      Financial Statement Schedules:
A.     Selected Quarterly Financial Data is included in Note 9 to the Consolidated Financial          Statements.		46
B.     Schedules filed herewith as of December 31, 2016:
I	– Summary of Investments (refer to Note 3)	44
II	– Condensed Financial Information of Registrant	52
III	– Supplementary Insurance Information	54
IV	– Reinsurance (refer to Note 11)	48
V	– Valuation and Qualifying Accounts (refer to Note 15)	48
VI	– Supplemental Information Concerning Property-Casualty Insurance Operations (refer to Note 10 and Note 11)	Not required

All other schedules for which provisions are made in the applicable regulation of the Securities and Exchange Commission have been omitted, as they are not applicable, not required, or the information required thereby is set forth in the Financial Statements or the notes thereto.

51

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

INFINITY PROPERTY AND CASUALTY CORPORATION – PARENT ONLY

SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

Condensed Balance Sheets

($ in thousands)

	December 31,
	2016		2015
Assets:
Investment in subsidiaries	$	810,017	$	812,351
Fixed maturities – at fair value (amortized cost $132,039 and $115,042)	130,563		114,737
Equity securities – at fair value (cost $1,908 and $1,940)	1,991		1,975
Short-term investments - at fair value (amortized cost $509 and $1,073)	508		1,072
Cash and cash equivalents	25,384		27,286
Other assets	14,276		13,478
Total assets	$	982,739	$	970,899
Liabilities and Shareholders’ Equity:
Long-term debt	273,591		273,383
Other liabilities	8,970		9,035
Payable to affiliates	991		886
Shareholders’ equity	699,187		687,595
Total liabilities and shareholders’ equity	$	982,739	$	970,899

Condensed Statements of Earnings

($ in thousands)

	Twelve months ended December 31,
	2016			2015			% Change		2014			% Change
Income:
Income in equity of subsidiaries	$	55,734		$	63,511		(12.2	)%	$	69,964		(9.2	)%
Net investment income	2,412			2,074			16.3	%	1,757			18.1	%
Realized gain on investments	117			77			51.4	%	24			223.3	%
Other income	0			1			(100.0	)%	19			(97.3	)%
Total income	58,263			65,663			(11.3	)%	71,765			(8.5	)%
Costs and Expenses:
Interest expense	13,958			13,947			0.1	%	13,938			0.1	%
Corporate general and administrative expenses	7,899			7,655			3.2	%	7,514			1.9	%
Other expense	18			26			(31.8	)%	26			1.8	%
Total expenses	21,874			21,628			1.1	%	21,478			0.7	%
Earnings before income taxes	36,389			44,035			(17.4	)%	50,287			(12.4	)%
Provision for income taxes	(6,696		)	(7,445		)	(10.1	)%	(6,914		)	7.7	%
Net earnings	$	43,085		$	51,481		(16.3	)%	$	57,201		(10.0	)%

52

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

INFINITY PROPERTY AND CASUALTY CORPORATION – PARENT ONLY

Condensed Statements of Cash Flows

($ in thousands)

	Twelve months ended December 31,
	2016			2015			2014
Operating Activities:
Net income	$	43,085		$	51,481		$	57,201
Equity in consolidated subsidiaries	(55,734		)	(63,511		)	(69,964		)
Excess tax benefits from share-based payment arrangements	(157		)	(298		)	(108		)
Other	4,063			4,938			1,055
Net cash used in operating activities	(8,744		)	(7,391		)	(11,816		)
Investing Activities:
Purchases of fixed maturities	(36,202		)	(35,477		)	(26,572		)
Purchases of short-term investments	(1,905		)	(1,602		)	(821		)
Maturities and redemptions of fixed maturities	25,904			15,410			27,750
Maturities and redemptions of short-term investments	1,370			1,285			0
Proceeds from sale of fixed maturities	13,874			14,784			8,327
Proceeds from sale of short-term investments	1,061			0			0
Dividends received from subsidiary(1)	38,378			52,726			34,530
Capital contributed to subsidiaries	(1,105		)	(1,729		)	(1,338		)
Net cash provided by investing activities	41,375			45,397			41,876
Financing Activities:
Proceeds from stock options exercised and employee stock purchases	256			259			784
Excess tax benefits from share-based payment arrangements	157			298			108
Acquisition of treasury stock	(11,953		)	(29,481		)	(10,100		)
Dividends paid to shareholders	(22,993		)	(19,528		)	(16,562		)
Net cash used in financing activities	(34,534		)	(48,451		)	(25,769		)
Net (decrease) increase in cash and cash equivalents	(1,902		)	(10,445		)	4,290
Cash and cash equivalents at beginning of period	27,286			37,731			33,441
Cash and cash equivalents at end of period	$	25,384		$	27,286		$	37,731

(1) The parent received $21.6 million, $15.7 million and $25.6 million in the form of securities from subsidiaries in 2016, 2015 and 2014, respectively, not reflected in the above cash flows.

53

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

SCHEDULE III – SUPPLEMENTARY INSURANCE INFORMATION

THREE YEARS ENDED DECEMBER 31, 2016

($ in thousands)

COLUMN A	COLUMN B		COLUMN C		COLUMN D		COLUMN E		COLUMN F		COLUMN G		COLUMN H		COLUMN I		COLUMN J		COLUMN K
Segment	Deferred Policy Acquisition Costs		Future Policy Benefits, Losses, Claims and Loss Expenses		Unearned Premium		Other Policy Claims and Benefits Payable		Premium Revenue		Net Investment Income (1)		Benefits, Claims, Losses, and Settlement Expenses		Amortization of Deferred Policy Acquisition Costs		Other Operating Expenses		Premiums Written
2016
Personal Auto	$	79,429	$	573,249	$	533,436			$	1,246,402			$	981,360	$	185,473	$	130,772	$	1,236,001
Commercial Vehicle	10,526		106,956		72,978				130,183				106,031		19,363		15,448		141,174
Classic Collector	1,181		5,250		7,934				15,079				9,364		2,247		2,845		15,284
Total	$	91,136	$	685,455	$	614,347	$	0	$	1,391,664	$	35,537	$	1,096,755	$	207,083	$	149,065	$	1,392,459
2015
Personal Auto	$	82,881	$	580,983	$	543,837			$	1,225,290			$	937,694	$	185,325	$	131,277	$	1,243,191
Commercial Vehicle	9,098		85,040		65,084				106,962				90,849		16,176		11,153		115,357
Classic Collector	1,178		3,942		7,728				14,312				7,459		2,167		2,122		14,739
Total	$	93,157	$	669,965	$	616,649	$	0	$	1,346,564	$	36,800	$	1,036,001	$	203,667	$	144,552	$	1,373,287
2014
Personal Auto	$	81,362	$	597,091	$	525,935			$	1,223,860			$	936,803	$	188,924	$	137,358	$	1,234,367
Commercial Vehicle	7,937		66,976		56,023				88,801				56,506		13,703		10,127		99,378
Classic Collector	1,130		4,110		7,301				13,274				8,319		2,051		2,395		13,859
Total	$	90,428	$	668,177	$	589,260	$	0	$	1,325,935	$	35,629	$	1,001,628	$	204,678	$	149,880	$	1,347,604
(1) We do not allocate investment income to operating segments.

ITEM 16

Form 10-K Summary

None.

54

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

INFINITY PROPERTY AND CASUALTY CORPORATION AND SUBSIDIARIES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Infinity Property and Casualty Corporation has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Signed: February 28, 2017

Infinity Property and Casualty Corporation
By:	/S/    JAMES R. GOBER
	James R. Gober
	Chief Executive Officer

We, the undersigned directors and officers of Infinity Property and Casualty Corporation, hereby severally constitute and appoint James R. Gober and Robert H. Bateman, and each of them singly, our true and lawful attorneys with full power to them and each of them to sign for us, in our names in the capacities indicated below, and any and all amendments to this Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Capacity	Date
/S/    JAMES R. GOBER	Chairman of the Board of Directors, Chief Executive Officer, and President (principal executive officer)	February 28, 2017
James R. Gober
/S/    ROBERT H. BATEMAN	Executive Vice President, Chief Financial Officer, and Treasurer (principal financial and accounting officer)	February 28, 2017
Robert H. Bateman
/S/    VICTOR T. ADAMO	Director*	February 28, 2017
Victor T. Adamo
/S/    RICHARD J. BIELEN	Director*	February 28, 2017
Richard J. Bielen
/S/    ANGELA BROCK-KYLE	Director*	February 28, 2017
Angela Brock-Kyle
/S/    TERESA A. CANIDA	Director	February 28, 2017
Teresa A. Canida
/S/    HAROLD E. LAYMAN	Director*	February 28, 2017
Harold E. Layman
/S/    E. ROBERT MEANEY	Director*	February 28, 2017
E. Robert Meaney
/S/    WILLIAM S. STARNES	Director*	February 28, 2017
William S. Starnes
/S/    JAMES L. WEIDNER	Director*	February 28, 2017
James L. Weidner
/S/    SAMUEL J. WEINHOFF	Director	February 28, 2017
Samuel J. Weinhoff

________________

* Member of the Audit Committee

55

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

INDEX TO EXHIBITS

Number	Exhibit Description
3.1	Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Infinity’s Form 10-Q filed on August 8, 2007)
3.2	Amended and Restated Regulations
4.1	Form of Senior Indentures, dated August 6, 2010, between Infinity and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.4 to Infinity’s Form S-3 filed on August 6, 2010)
4.2	Form of Subordinated Indenture between Infinity and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 to Infinity’s Form S-3 filed on August 6, 2010)
4.3	Form of Junior Subordinated Indenture between Infinity and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.6 to Infinity’s Form S-3 filed on August 6, 2010)
4.4	First Supplemental Indenture to Senior Indenture, dated September 17, 2012, between Infinity and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Infinity's Form 8-K filed on September 17, 2012)
Material Contracts:
10.1	Reinsurance Agreement between Infinity Standard Insurance Company [formerly known as Windsor Insurance Company], as Reinsurer, and Great American Insurance Company and Affiliates, as Reassured (incorporated by reference to Exhibit 10.4 to Infinity’s Form 10-K filed on March 31, 2003)
10.2	Side Letter Agreement to amend Reinsurance Agreement between Infinity Standard Insurance Company [formerly known as Windsor Insurance Company], as Reinsurer, and Great American Insurance Company and Affiliates, as Reassured (incorporated by reference to Exhibit 10 to Infinity’s Form 8-K filed on February 1, 2007)
10.3	Tax Allocation Agreement, dated December 31, 2003, and effective February 13, 2003, by and among Infinity and its Subsidiaries (incorporated by reference to Exhibit 10.24 to Infinity’s Form 10-K/A filed on April 2, 2004)
10.4	Amended and Restated Credit Agreement, dated August 31, 2008, between Infinity and Regions Bank (incorporated by reference to Exhibit 10 to Infinity's Form 8-K filed on September 4, 2008)
10.5	First Amendment to Amended and Restated Credit Agreement, dated August 31, 2011, between Infinity and Regions Bank (incorporated by reference to Exhibit 10 to Infinity’s Form 8-K filed on September 1, 2011)
10.6	Second Amendment to Amended and Restated Credit Agreement, dated August 20, 2014, between Infinity and Regions Bank (incorporated by reference to Exhibit 10 to Infinity's Form 8-K filed on August 26, 2014)
10.7	Amended and Restated Employee Stock Purchase Plan (incorporated by reference to Exhibit 10 to Infinity’s Form 10-Q filed on August 6, 2010)	(*)
10.8	Deferred Compensation Plan, as amended and restated effective January 1, 2005 (incorporated by reference to Exhibit 10.9 to Infinity's Form 10-K filed February 26, 2010)	(*)
10.9	Supplemental Retirement Plan, as amended and restated effective January 1, 2010 (incorporated by reference to Exhibit 10.10 to Infinity's Form 10-K filed February 26, 2010)	(*)
10.10	Employment Agreement for James R. Gober (incorporated by reference to Exhibit 10.1 to Infinity’s Form 8-K filed on September 17, 2014)	(*)
10.11	Employment Agreement for Glen N. Godwin (incorporated by reference to Exhibit 10.2 to Infinity’s Form 8-K filed on September 17, 2014)	(*)
10.12	Employment Agreement for Scott C. Pitrone (incorporated by reference to Exhibit 10.3 to Infinity’s Form 8-K filed on September 17, 2014)	(*)
10.13	Employment Agreement for Samuel J. Simon (incorporated by reference to Exhibit 10.4 to Infinity’s Form 8-K filed on September 17, 2014)	(*)

56

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

10.14	Employment Agreement for Roger Smith (incorporated by reference to Exhibit 10.5 to Infinity’s Form 8-K filed on September 17, 2014)	(*)
10.15	Annual Executive Bonus Plan (incorporated by reference to Appendix A to Infinity’s Definitive Proxy Statement, Schedule 14A filed on April 15, 2015)	(*)
10.16	Form of Performance Share Award Agreement (incorporated by reference to Exhibit 10 to Infinity's Form 10-Q filed on May 8, 2014)	(*)
10.17	Third Amended and Restated 2013 Stock Incentive Plan	(*)
10.18	Form of Restricted Share Award Agreement (incorporated by reference to Exhibit 10.25 to Infinity's Form 10-Q filed on February 26, 2015)	(*)
10.19	Retirement and Consulting Services Agreement for Roger Smith (incorporated by reference to Exhibit 10 to Infinity's Form 8-K filed on August 20, 2015)	(*)
10.20	Employment Agreement for Robert H. Bateman (incorporated by reference to Exhibit 10 to Infinity's Form 8-K filed on October 22, 2015)	(*)
10.21	Form of Indemnification Agreement (incorporated by reference to Exhibit 10.25 of Infinity's Form 10-K filed on February 25, 2016)	(*)
21	Subsidiaries of the Registrant
23	Consent of Independent Registered Public Accounting Firm
31.1	Certification of the Chief Executive Officer under Exchange Act Rule 13a-14(a).
31.2	Certification of the Chief Financial Officer under Exchange Act Rule 15d-14(a).
32	Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

________________

(*) Management Contract or Compensatory Plan or Arrangement.

57

EX-3.2

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

EXHIBIT 3.2

EXHIBIT 3.2 - AMENDED AND RESTATED REGULATIONS

REGULATIONS

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OF

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INFINITY PROPERTY AND CASUALTY CORPORATION (THE "CORPORATION")

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AMENDED AND RESTATED AS OF FEBRUARY 22, 2017

ARTICLE I

SHAREHOLDERS

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Section 1. ANNUAL MEETINGS. The annual meeting of the Shareholders of this Corporation, for the election of the Board of Directors and the transaction of such other business as may properly be brought before such meeting, shall be held on the date and at the time and place, if any, designated by the Board of Directors or, if the Board of Directors shall so determine, designated by the Chairman of the Board or the President. These Regulations expressly authorize the Board of Directors to determine that the annual meeting of the Shareholders, as well as any special meeting of the Shareholders, shall not be held at any physical place but instead shall be held solely by means of communications equipment as authorized by Ohio Revised Code sec. 1701.40(C). If the annual meeting is not held or if Directors are not elected thereat, a special meeting may be called and held for that purpose.

Section 2. SPECIAL MEETINGS. Special meetings of the Shareholders may be held on any business day when called by the Chairman of the Board, the

President, a majority of Directors or persons holding shares entitled to exercise fifty percent (50%) of all voting power of the Corporation.

Section 3. PLACE OF MEETINGS. Any meeting of Shareholders may be held at such place, if any, within or without the State of Ohio as may be designated in the notice of said meeting.

Section 4. NOTICE OF MEETING AND WAIVER OF NOTICE

4.1 NOTICE. Written notice of the time, place and purposes of any meeting of Shareholders shall be given to each Shareholder entitled thereto not less than seven (7) days nor more than sixty (60) days before the date fixed for the meeting and as prescribed by law. Such notice shall be given to the Shareholders by mail, overnight delivery service or any other means of communications authorized by the Shareholder to whom notice is sent pursuant to Ohio Revised Code sec. 1701.41 at the Shareholders' respective addresses as they appear on the records of the Corporation. Notice shall be deemed to have been given on the day mailed or delivered to the overnight delivery service provider or on the day such other means of authorized communication is given or made. If any meeting is adjourned to another time or place, if any, no notice as to such adjourned meeting need be given other than by announcement at the meeting at which such an adjournment is taken. No business shall be transacted at any such adjourned meeting except as might have been lawfully transacted at the meeting at which such adjournment was taken.

4.2 NOTICE TO JOINT OWNERS; SHAREHOLDERS WITH SAME ADDRESS.

All notices with respect to any shares to which persons are entitled by joint or common ownership may be given to that one of such persons who is named first upon the books of the Corporation, and notice so given shall be sufficient notice to all the holders of such shares. Without limiting the manner by which notice

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

otherwise may be given effectively to Shareholders, any notice to Shareholders given by the Corporation shall, to the extent permitted by applicable law, be effective if given by a single written notice to Shareholders who share an address if consented to by the Shareholders at that address to whom such notice is given. Any such consent shall be revocable by a Shareholder by written notice to the Corporation. Any Shareholder sharing an address who or that fails to object in writing to the Corporation, within sixty (60) days of having been given written notice by the Corporation of its intention to send the single notice, shall be deemed to have consented to receiving such single written notice.

4.3 WAIVER. Notice of any meeting may be waived in writing by any Shareholder either before or after any meeting, or by attendance at such meeting, in person or by proxy, without protest to its commencement.

Section 5. SHAREHOLDERS ENTITLED TO NOTICE AND TO VOTE. If a record date shall not be fixed, the record date for the determination of Shareholders entitled to notice of or to vote at any meeting of Shareholders shall be the close of business on the twentieth day prior to the date of the meeting and only Shareholders of record at such record date shall be entitled to notice of and to vote at such meeting.

Section 6. QUORUM. The holders of shares entitling them to exercise a majority of the voting power of the Corporation, present in person, by proxy or by use of communications equipment, shall constitute a quorum for any meeting. The Shareholders present in person or by proxy or by use of communications equipment, whether or not a quorum be present, may adjourn the meeting from time to time without notice other than by announcement at the meeting.

Section 7. VOTING. Except as provided by statute or in the Corporation's Articles of Incorporation (as amended or restated from time to time, the "Articles"), every Shareholder entitled to vote shall be entitled to cast one (1) vote on each proposal submitted to the meeting for each share held of record on the record date for the determination of the Shareholders entitled to vote at the meeting. At any meeting at which a quorum is present, all business which may properly come before the meeting in accordance with these Regulations shall be determined by a majority of votes cast, except when a greater proportion is required by law, the Articles or these Regulations; provided, however, that no action required by law, the Articles or these Regulations to be authorized or taken by the holders of a designated proportion of the shares or voting power of the Corporation may be authorized or taken by a lesser proportion.

Section 8. ORGANIZATION OF MEETINGS.

8.1 PRESIDING OFFICER. The Chairman of the Board, or in his absence, the President, or the person designated by the Board of Directors, shall call all meetings of the Shareholders to order and shall act as Chairman thereof. The Chairman of any Shareholders' meeting shall call the meeting to order, establish the agenda, and conduct the business of the meeting in accordance therewith or, at the Chairman's discretion, it may be conducted otherwise in accordance with the wishes of the Shareholders in attendance. The date and time of the opening and closing of the polls for each matter upon which the Shareholders will vote at the meeting shall be announced at the meeting.

The Chairman shall also conduct the meeting in an orderly manner, rule on the precedence of, and procedure on, motions and other procedural matters, and exercise discretion with respect to such procedural matters with fairness and good faith toward all those entitled to take part. The Chairman may impose reasonable limits on the amount of time taken up at the meeting on discussion in general or on remarks by any one Shareholder. Should any person in attendance become unruly or obstruct the meeting proceedings, the Chairman shall have the power to have such person removed from participation. Notwithstanding anything in the Regulations to the contrary, no business shall be conducted at a meeting except in accordance with the procedures set forth in this Section 8.1 and in Section 9 of this Article I. The Chairman of any Shareholders' meeting shall, if the facts warrant, determine and declare to the meeting that any proposed item of business was not brought before the meeting in accordance with the provisions of this Section 8.1 and in Section 9 of this Article I and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

8.2 MINUTES. The Secretary of the Corporation, or in his absence, an Assistant Secretary, or, in the absence of both, a person appointed by the Chairman of the meeting, shall act as Secretary of the meeting and shall keep and make a record of the proceedings thereat.

Section 9. NOTICE OF SHAREHOLDER BUSINESS. At an annual or special meeting of the Shareholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before a meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) properly brought before the meeting by or at the direction of the Board of Directors, (c) properly brought before an annual meeting by a Shareholder, or (d) properly brought before a special meeting by a Shareholder, but if, and only if, the notice of a special meeting provides for business to be brought before the meeting by Shareholders. For business to be properly brought before a meeting by a Shareholder, the Shareholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a Shareholder proposal to be presented at an annual meeting shall be received at the Corporation's principal executive offices not less than one hundred twenty (120) calendar days in advance of the date that the Corporation's proxy statement was released to Shareholders in connection with the previous year's annual meeting of Shareholders, except that if no annual meeting was held in the previous year or the date of the annual meeting has been changed by more than thirty (30) calendar days from the date contemplated at the time of the previous year's proxy statement, or in the event of a special meeting, notice by the Shareholder to be timely must be received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. A Shareholder's notice to the Secretary shall set forth as to each matter the Shareholder proposes to bring before the annual or special meeting (a) a brief description of the business desired to be brought before the annual or special meeting and the reasons for conducting such business at the special meeting, (b) the name and address, as they appear on the Corporation's books, of the Shareholder proposing such business, (c) the class and number of shares of the Corporation which are beneficially owned by the Shareholder, and (d) any material interest of the Shareholder in such business. If the Shareholder desires to make a nomination for the office of Director, the notice shall also set forth (a) the name and residence of each such nominee; and (b) the consent of such nominee to serve as Director if so elected.

Section 10. PROXIES. A person who is entitled to attend a Shareholders' meeting, to vote thereat or to execute consents, waivers and releases, may be represented at such meeting or vote thereat, and execute consents, waivers and releases and exercise any of his rights, by proxy or proxies appointed by a writing signed by such person, or by his duly authorized attorney, which may be transmitted physically or by telegram, cablegram, electronic mail or by any other electronic or other transmission capable of authentication.

Section 11. LIST OF SHAREHOLDERS. At any meeting of Shareholders a list of Shareholders, alphabetically arranged, showing the number and classes of shares held by each on the record date applicable to such meeting, shall be produced on the request of any Shareholder. If the meeting of Shareholders is to be held solely or in part by means of communications equipment, the Corporation shall make the list of Shareholders open to examination by any Shareholder or proxyholder during the whole time of the meeting on a reasonably accessible electronic network. The Directors are expressly authorized to adopt guidelines and procedures to permit the Corporation to verify that any person accessing the list is a Shareholder of the Corporation or a proxyholder for a Shareholder of the Corporation.

ARTICLE II

DIRECTORS

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Section 1. GENERAL POWERS. The authority of this Corporation shall be exercised by or under the direction of the Board of Directors, except where the law, the Articles or these Regulations require action to be authorized or taken by the Shareholders.

Section 2. NUMBER AND QUALIFICATION OF DIRECTORS.

2.1 NUMBER. The number of Directors, which shall not be less than two (2), may be fixed or changed at a meeting of the Shareholders called for the purpose of electing Directors at which a quorum is

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

present by a majority of the votes cast at the meeting. In addition, the number of Directors may be fixed or changed by action of the Directors at any meeting at which a quorum is present by a majority vote of the Directors present at the meeting. The number of Directors elected shall be deemed to be the number of Directors fixed unless otherwise fixed by resolution adopted at the meeting at which such Directors are elected.

2.2 QUALIFICATIONS. Directors need not be Shareholders of the Corporation.

2.3 ELECTION OF DIRECTORS. The election of Directors at all meetings of the Shareholders at which Directors are to be elected shall be by ballot, and a majority of the votes cast at any meeting for the election of Directors at which a quorum is present shall elect Directors. For purposes of this Article 2.3, a majority of votes cast shall mean that the number of shares voted “for” a Director’s election exceeds fifty percent (50%) of the number of votes cast with respect to that Director’s election. Votes cast shall include direction to withhold authority in each case and shall exclude “abstentions” and “broker non-votes” with respect to that Director’s election. Notwithstanding the foregoing, if the number of nominees exceeds the number of Directors to be elected or if cumulative voting is in effect, the Directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of Directors. If a Director is not elected by a majority of votes cast, such Director shall offer to tender his or her resignation to the Board of Directors. The Board of Directors will, within ninety (90) days following certification of the election results, decide whether to accept or reject such Director’s resignation and publicly disclose its decision and the rationale for such decision. A Director who tenders his or her resignation pursuant to this Article 2.3 shall not participate in the Board of Directors’ decision regarding whether to accept such resignation.

Section 3. TERM OF OFFICE OF DIRECTORS.

3.1 TERM. Except as otherwise provided in the Articles, each Director shall hold office until the date of the annual meeting of the Shareholders held three (3) years after the date the Director is elected and until his successor has been elected or until his earlier resignation, removal from office or death. Directors shall only be subject to removal as provided in the Articles or by other lawful procedures.

3.2 RESIGNATION. A resignation from the Board of Directors shall be deemed to take effect immediately upon its being received by any incumbent corporate officer other than an officer who is also the resigning Director, unless some other time is specified in the resignation.

3.3 VACANCIES AND NEWLY CREATED DIRECTOR'S OFFICES. Subject to the rights of the holders of any series of Preferred Stock of the Corporation, in the event of any vacancies or newly created director's office or offices in the Board of Directors for any reason, the remaining Directors, though less than a majority of the whole Board, may fill any such vacancy for the unexpired term.

Section 4. MEETINGS OF DIRECTORS.

4.1 REGULAR MEETINGS. Regular meetings of the Board of Directors shall be held at such times and places, if any, as may be fixed by the Directors.

4.2 SPECIAL MEETINGS. Special meetings of the Board of Directors may be held at any time upon call of the Chairman of the Board, the President or any two Directors.

4.3 PLACE OF MEETING. Any meeting of Directors may be held at such place, if any, within or without the State of Ohio as may be designated in the notice of said meeting.

4.4 NOTICE OF MEETING AND WAIVER OF NOTICE. Notice of the time and place of any regular or special meeting of the Board of Directors shall be given to each Director by personal delivery, or by mail, telegram, cablegram, overnight delivery service or any other means of communication authorized by a Director at least forty-eight (48) hours before the meeting, which notice need not specify the purpose of the meeting.

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

Section 5. QUORUM AND VOTING. At any meeting of Directors, not less than one-half of the whole authorized number of Directors is necessary to constitute a quorum for such meeting, except that a majority of the remaining Directors in office shall constitute a quorum for filling a vacancy in the Board. At any meeting at which a quorum is present, all acts, questions, and business which may come before the meeting shall be determined by a majority of votes cast by the Directors present at such meeting, unless the vote of a greater number is required by the Articles or these Regulations.

Section 6. COMMITTEES.

6.1 APPOINTMENT. The Board of Directors may from time to time appoint certain of its members to act as a committee or committees in the intervals between meetings of the Board and may delegate to such committee or committees power to be exercised under the control and direction of the Board. Each such committee and each member thereof shall serve at the pleasure of the Board.

6.2 EXECUTIVE COMMITTEE. In particular, the Board of Directors may create from its membership and define the powers and duties of an Executive Committee. During the intervals between meetings of the Board of Directors, the Executive Committee shall possess and may exercise all of the powers of the Board of Directors in the management and control and the business of the Corporation to the extent permitted by law.

6.3 COMMITTEE ACTION. Unless otherwise provided by the Board of Directors, a majority of the members of any committee appointed by the Board of Directors pursuant to this Section shall constitute a quorum at any meeting thereof and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of such committee. Any such committee shall prescribe its own rules for calling and holding meetings and its method of procedure, subject to any rules prescribed by the Board of Directors, and shall keep a written record of all action taken by it.

Section 7. ACTION OF DIRECTORS WITHOUT A MEETING. Any action which may be taken at a meeting of Directors or any committee thereof may be taken without a meeting if authorized by a writing or writings signed by all the Directors or all of the members of the particular committee, which writing or writings shall be filed or entered upon the records of the Corporation.

Section 8. COMPENSATION OF DIRECTORS. The Board of Directors may allow compensation to Directors for performance of their duties and for attendance at meetings or for any special services, may allow compensation to members of any committee and may reimburse any Director for his expenses in connection with attending any Board or committee meeting.

Section 9. RELATIONSHIP WITH CORPORATION. Directors shall not be barred from providing professional or other services to the Corporation. No contract, action or transaction shall be void or voidable with respect to the Corporation for the reason that it is between or affects the Corporation and one or more of its Directors, or between or affects the Corporation and any other person in which one or more of its Directors are directors, trustees or officers or have a financial or personal interest or for the reason that one or more interested Directors participate in or vote at the meeting of the Directors or committee thereof that authorizes such contract, action or transaction, if, in any such case, any of the following apply:

9.1 the material facts as to the Director's relationship or interest and as to the contract, action or transaction are disclosed or are known to the Directors or the committee and the Directors or committee, in good faith, reasonably justified by such facts, authorize the contract, action or transaction by the affirmative vote of a majority of the disinterested Directors, even though the disinterested Directors constitute less than a quorum;

9.2 the material facts as to the Director's relationship or interest and as to the contract, action or transaction are disclosed or are known to the Shareholders entitled to vote thereon and the contract, action or

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

transaction is specifically approved at a meeting of the Shareholders held for such purpose by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the Corporation held by persons not interested in the contract, action or transaction; or

9.3 the contract, action or transaction is fair as to the Corporation as of the time it is authorized or approved by the Directors, a committee thereof or the Shareholders.

Section 10. ATTENDANCE AT MEETINGS OF PERSONS WHO ARE NOT DIRECTORS.

Unless waived by the Chairman, any Director who desires the presence at any regular or special meeting of the Board of Directors of a person who is not a Director, shall so notify all other Directors, not less than twenty-four (24) hours before such meeting, request the presence of such person and state the reason in writing. Such person will not be permitted to attend the Directors' meeting unless a majority of the Directors in attendance vote to admit such person to the meeting. Such vote shall constitute the first order of business for any such meeting of the Board of Directors. Such right to attend, whether granted by waiver or vote, may be revoked at any time during any such meeting by the vote of a majority of the Directors in attendance.

ARTICLE III

OFFICERS

Section 1. GENERAL PROVISIONS. The Board of Directors shall elect a President, a Secretary and a Treasurer, and may elect a Chairman of the Board, a Chief Executive Officer, a Chief Operating Officer, one or more Vice Presidents, and such other officers and assistant officers as the Board may from time to time deem necessary or appropriate. The Chairman of the Board, if any, shall be a Director, but none of the other officers need be a Director. Any two or more offices may be held by the same person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity if such instrument is required to be executed, acknowledged or verified by two or more officers.

Section 2. POWERS AND DUTIES. All officers, as between themselves and the Corporation, shall respectively have such authority and perform such duties as are customarily incident to their respective offices, and as may be specified from time to time by the Board of Directors, regardless of whether such authority and duties are customarily incident to such office. The Chief Executive Officer shall also serve either as Chairman of the Board or President and shall have plenary power over the business and activities of the Corporation and over its officers and employees, subject, however, to the control of the Board of Directors and any limitations thereon contained in these Regulations. In the absence of any officer of the Corporation, or for any other reason the Board of Directors may deem sufficient, the powers or duties of such officer, or any of them may be delegated to any other officer or to any Director. The Board of Directors may from time to time delegate to any officer authority to appoint and remove subordinate officers and to prescribe their authority and duties.

Section 3. TERM OF OFFICE AND REMOVAL.

3.1 TERM. Each officer of the Corporation shall hold office at the pleasure of the Board of Directors.

3.2 REMOVAL. The Board of Directors may remove any officer at any time with or without cause by the affirmative vote of a majority of Directors in office.

Section 4. COMPENSATION OF OFFICERS. The Directors shall establish the compensation of officers and employees or may, to the extent not prohibited by law, delegate such authority to a committee of Directors, the President or a Chief Executive Officer, as they determine.

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

ARTICLE IV

INDEMNIFICATION

Section 1. RIGHT TO INDEMNIFICATION. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including, without limitation, as a witness) in any actual or threatened action, suit or proceeding, whether civil, criminal, administrative, or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director or officer of the Corporation or that, being or having been such a director or officer of the Corporation, he or she is or was serving at the request of the Directors or an executive officer of the Corporation as a director, officer, partner, employee or agent of another corporation or of a partnership, joint venture, trust, limited liability company or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whenever the basis of such proceeding is alleged action in an official capacity as such a director, officer, partner, employee, or agent, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the General Corporation Law of Ohio, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), or by other applicable law as then in effect, against all expense, liability and loss (including, without limitation, attorneys' fees, costs of investigation, judgments, fines, excise taxes or penalties arising under the Employee Retirement Income Security Act of 1974 ("ERISA"), rules or orders of the Securities and Exchange Commission or other federal or state acts, rules or regulations) actually incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the indemnitee's heirs, executors, and administrators. Except as provided in Section 2 with respect to proceedings seeking to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized or ratified by the Board of Directors of the Corporation.

The right to indemnification conferred in this Section 1 shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending or prosecuting any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"). An advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it is proved by clear and convincing evidence in a court of competent jurisdiction that his or her omission or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the Corporation or undertaken with reckless disregard for the best interests of the Corporation. An advancement of expenses shall not be made if the Corporation's Board of Directors makes a good faith determination that such payment would violate applicable law.

Section 2. RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under Section 1 is not paid in full by the Corporation within thirty (30) days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall also be entitled to be paid the expense of prosecuting or defending such suit. The indemnitee shall be presumed to be entitled to indemnification under this Article IV upon submission of a written claim (and, in an action brought to enforce a claim for an advancement of expenses, where the required undertaking has been tendered to the Corporation), and thereafter the Corporation shall have the burden of proof to overcome the presumption that the indemnitee is so entitled. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or its Shareholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or its Shareholders) that the indemnitee is not entitled to indemnification, shall be a defense to the suit or create a presumption that the indemnitee is not so entitled.

Section 3. NONEXCLUSIVITY AND SURVIVAL OF RIGHTS. The rights to indemnification and to the advancement of expenses conferred in this Article IV shall not be exclusive of any other right which any person may

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

have or hereafter acquire under any statute, provisions of the Articles, these Regulations, agreement, vote of Shareholders or disinterested Directors or otherwise.

Notwithstanding any amendment to or repeal of this Article IV, or of any of the procedures established by the Board of Directors pursuant to Section 6, any indemnitee shall be entitled to indemnification and to advancement of expenses in accordance with the provisions hereof and thereof with respect to any acts or omissions of such indemnitee occurring prior to such amendment or repeal.

Without limiting the generality of the foregoing paragraph, the rights to indemnification and to the advancement of expenses conferred in this Article IV shall, notwithstanding any amendment to or repeal of this Article IV, inure to the benefit of any person who otherwise may be entitled to be indemnified pursuant to this Article IV (or the estate or personal representative of such person) for a period of six years after the date such person's service to or in behalf of the Corporation shall have terminated or for such longer period as may be required in the event of a lengthening in the applicable statute of limitations.

Section 4. INSURANCE, CONTRACTS, AND FUNDING. The Corporation may maintain insurance, at its expense, to protect itself and any Director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust, limited liability company or other enterprise against any expense, liability, or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of Ohio. The Corporation may enter into contracts with any indemnitee in furtherance of the provisions of this Article IV and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect indemnification as provided in this Article IV.

Section 5. INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION. The Corporation may, by action of its Board of Directors, authorize one or more executive officers to grant rights to advancement of expenses to employees or agents of the Corporation on such terms and conditions no less stringent than provided in Section 1 hereof as such officer or officers deem appropriate under the circumstances. The Corporation may, by action of its Board of Directors, grant rights to indemnification and advancement of expenses to employees or agents or groups of employees or agents of the Corporation with the same scope and effect as the provisions of this Article IV with respect to the indemnification and advancement of expenses of directors and officers of the Corporation; provided, however, that an undertaking shall be made by an employee or agent only if required by the Board of Directors.

Section 6. PROCEDURES FOR THE SUBMISSION OF CLAIMS. The Board of Directors may establish reasonable procedures for the submission of claims for indemnification pursuant to this Article IV, determination of the entitlement of any person thereto and review of any such determination. Such procedures shall be set forth in an appendix to these Regulations and shall be deemed for all purposes to be a part hereof.

ARTICLE V

AMENDMENTS

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These Regulations may be amended, restated or modified by the affirmative vote or the written consent of the Shareholders entitled to exercise a majority of the voting power on such proposal; provided, however, that Article II, Section 2 and Section 3, Article IV and this Article V may only be amended, restated or modified, whether directly or by means of merger or consolidation, if the amendment, restatement or modification is approved by the holders of a majority of "disinterested shares" (determined as specified in Ohio Revised Code sec. 1704.01(C)(9)) then entitled to vote generally on an amendment of these Regulations, voting as a single class. If an amendment, restatement or modification is adopted by written consent the Secretary shall mail a copy of such amendment, restatement or modification to each Shareholder who would be entitled to vote thereon and did not participate in the adoption thereof. These Regulations may also be amended, restated or modified, without a vote of the Shareholders, by the affirmative vote of a majority of the Directors to the extent permitted by Ohio law at the time of such amendment, restatement or modification.

EX-10.17

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

EXHIBIT 10.17

EXHIBIT 10.17 - THIRD AMENDED AND RESTATED 2013 STOCK INCENTIVE PLAN

INFINITY PROPERTY AND CASUALTY CORPORATION

THIRD AMENDED AND RESTATED 2013 STOCK INCENTIVE PLAN

1. Purposes

The purposes of the Plan are to provide long-term incentives to those persons with significant responsibility for the success and growth of the Company, to align the interests of such persons with those of the Company’s shareholders, to assist the Company in recruiting, retaining and motivating employees, directors and consultants on a competitive basis and to link compensation to performance.

2. Definitions

For purposes of the Plan, the following capitalized terms shall have the meanings specified below:

(a) “Affiliate” has the meaning set forth in Rule 12b-2 under the Exchange Act.

(b) “Award” means a grant of Stock Options, Stock Appreciation Rights, Restricted Shares or Restricted Share Units, Performance Shares or Performance Units, or any or all of them, to a Participant.

(c) “Award Agreement” means an agreement, either in written or electronic format, between the Company and a Participant setting forth the terms and conditions of an Award granted to the Participant.

(d) “Award Value” means the number of Common Shares to be distributed to a Participant who has received an Award of Performance Shares or Performance Units following the Termination Date of such Award.

(e) “Beneficial Owner” has the meaning given in Rule 13d-3 under the Exchange Act.

(f) “Board” means the Board of Directors of the Company.

(g) “Cause” means, unless otherwise provided in the Participant’s Award Agreement, (i) the Participant’s failure or refusal to materially perform his/her duties; (ii) the Participant’s failure or refusal to follow material lawful directions of the Board or any other act of material insubordination on the part of Participant; (iii) the engaging by the Participant in misconduct, including but not limited to any type of conduct which is materially and demonstrably injurious to the Company or any of its divisions, Subsidiaries or Affiliates, monetarily or otherwise; (iv) any conviction of, or plea of guilty or nolo contendere, by the Participant to a felony (other than a traffic violation); or (v) the commission (or attempted commission) of any act of fraud or dishonesty by the Participant which is materially detrimental to the business or reputation of the Company or any of its divisions, Subsidiaries or Affiliates.

(h) “Change in Control” means the occurrence of one or more of the following events:

(i) Any Person or group of Persons becomes both a Beneficial Owner (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) directly or indirectly of securities representing 30% or more of the total number of votes that may be cast for the election of directors of the Company, whether by open market purchases, by tender offer or exchange offer, through issuance of new shares by the Company or by merger or consolidation;

(ii) Within two (2) years after a merger, consolidation, liquidation or sale of assets involving the Company, or a contested election of a Company director or directors, or any combination of the foregoing, the individuals who were directors of the Company immediately prior to the merger, consolidation, liquidation, sale of assets or contested election shall cease to constitute a majority of the Board; or

(iii) Within two (2) years after a tender offer or exchange offer for voting securities of the Company, the individuals who were directors of the Company immediately prior to the commencement of the tender offer or exchange offer shall cease to constitute a majority of the Board.

(i) “Code” means the Internal Revenue Code of 1986, as amended, and any rules, regulations or guidance promulgated thereunder. Any reference to the Code or a section thereof shall also refer to any successor Code or section.

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

(j) “Committee” means a committee appointed by the Board consisting of at least three members of the Board, all meeting the definitions of “outside director” set forth in Code Section 162(m), “independent director” set forth in The Nasdaq Stock Market rules, and “non-employee director” set forth in Rule 16b-3 of the Exchange Act, or any successor definitions adopted for a similar purpose by the Internal Revenue Service, any national securities exchange on which the Common Shares are listed or the Securities and Exchange Commission.

(k) “Common Share” or “Common Shares” means one or more of the common shares, without par value, of the Company.

(l) “Company” means Infinity Property & Casualty Corporation, a corporation organized under the laws of the State of Ohio, its subsidiaries, divisions and affiliated businesses.

(m) “Commencement Date” means January 1 of any year in which an Award of Performance Shares or Performance Units is made.

(n) “Date of Grant” means the date on which the Committee authorizes the grant of an Award or such later date as may be specified by the Committee in such authorization.

(o) “Disability” means the failure of the Participant to render services to the Company for a continuous period of six (6) months because of the Participant’s physical or mental disability or illness. The Committee may substitute a different definition for the term “Disability” in its discretion as it deems appropriate.

(p) “Effective Date” has the meaning set forth in Section 13(a).

(q) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any rules, regulations, schedules or guidance promulgated thereunder. Any reference to the Exchange Act or a section thereof shall also refer to any successor Exchange Act or section.

(r) “Exercise Price” means the purchase price of a Common Share covered by a Stock Option or SAR, as applicable.

(s) “Fair Market Value” on any date means the closing price of the Common Shares as reported on The Nasdaq Stock Market or, if applicable, any other national securities exchange on which the Common Shares are principally traded, or, if there were no sales of Common Shares on such date, then on the immediately preceding date on which there were any sales of Common Shares. If the Common Shares cease to be traded on a national securities exchange, the Fair Market Value shall be determined pursuant to a reasonable valuation method prescribed by the Committee. In the case of an ISO (or Tandem SAR), Fair Market Value shall be determined by the Committee in accordance with Code Section 422. For Awards intended to be exempt from Code Section 409A, Fair Market Value shall be determined by the Committee in accordance with Code Section 409A.

(t) “Full-Value Award” means Restricted Shares, Restricted Share Units, Performance Shares, Performance Share Units or unrestricted Common Shares.

(u) “ISO” means an Incentive Stock Option satisfying the requirements of Code Section 422 and designated as an ISO by the Committee.

(v) “Non-Employee Director” means a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act.

(w) “NQSO” means a non-qualified Stock Option that does not satisfy the requirements of Code Section 422 or that is not designated as an ISO by the Committee.

(x) “Participant” means a person eligible to receive an Award under the Plan, as set forth in Section 4, and designated by the Committee to receive an Award subject to the conditions set forth in the Plan and any Award Agreement.

(y) “Performance-Based Exception” means the performance-based exception to the deductibility limitations of Code Section 162(m), as set forth in Code Section 162(m)(4)(C).

(z) “Performance Goals” means the goals established by the Committee, as described in Section 6(e)(ii).

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(aa) “Performance Measures” means the criteria set out in Section 6(e)(iii) that may be used by the Committee as the basis for a Performance Goal.

(bb) “Performance Period” means the period established by the Committee during which the achievement of Performance Goals is assessed in order to determine whether and to what extent an Award that is conditioned on attaining Performance Goals has been earned.

(cc) “Performance Share” means an Award granted to a Participant pursuant to Section 6(d).

(dd) “Performance Unit” means an Award granted to a Participant pursuant to Section 6(d).

(ee) “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, except that such term shall not include (i) the Company or any of its Affiliates, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of Company securities.

(ff) “Plan” means the Infinity Property and Casualty Corporation Amended and Restated 2013 Stock Incentive Plan, as may be further amended and restated from time to time.

(gg) “Prior Plans” mean each of the Company’s 2002 Restricted Stock Plan (as amended and restated effective July 31, 2007), Amended and Restated 2002 Stock Option Plan, Non-Employee Director’s Stock Ownership Plan and Second Amended and Restated 2008 Performance Share Plan.

(hh) “Restricted Shares” means Common Shares that are subject to restrictions, as described in Section 6(c).

(ii) “Restricted Share Units” means a right, as described in Section 6(c), denominated in Common Shares to receive an amount, payable in either cash, Common Shares, Restricted Shares, or a combination thereof, equal to the value of a specified number of Common Shares.

(jj) “Restriction Period” means, with respect to any Full-Value Award (other than an Award to a Non-Employee Director), the period during which any risk of forfeiture or other restrictions set by the Committee, including performance restrictions, remain in effect until such time as they have lapsed under the terms and conditions of the Full-Value Award or as otherwise determined by the Committee, including the Performance Period for Full-Value Awards intended to qualify for the Performance-Based Exception.

(kk) “Retirement” means retirement with the Company at or after age 65 or at or after the later of age 55 and ten years of service.

(ll) “Securities Act” means the Securities Act of 1933, as amended, and any rules, regulations, schedules or guidance promulgated thereunder. Any reference to the Securities Act or a section thereof shall also refer to any successor Securities Act or section.

(mm) “Stock Appreciation Right” or “SAR” means the right, as described in Section 6(b), to receive a payment equal to the excess of the Fair Market Value of a Common Share on the date the SAR is exercised over the Exercise Price established for that SAR at the time of grant, multiplied by the number of Common Shares with respect to which the SAR is exercised.

(nn) “Stock Option” means the right, as described in Section 6(a), to purchase Common Shares at a specified price for a specified period of time. Stock Options include ISOs and NQSOs.

(oo) “Subsidiary” has the meaning set forth in Section 424(f) of the Code.

(pp) “Tandem SAR” means a SAR granted in tandem with a Stock Option.

(qq) “Termination Date” means the date on which the term of an Award of Performance Shares or Performance Units expires.

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3. Administration of the Plan

(a) Authority of Committee. The Plan shall be administered by the Committee. Unless otherwise determined by the Board, the Compensation Committee of the Board shall serve as the Committee, except that with respect to Awards to Non-Employee Directors, the Nominating and Corporate Governance Committee of the Board shall serve as the Committee. The Committee shall have all the powers vested in it by the terms of the Plan, such powers to include the sole and exclusive authority to (within the limitations described in the Plan):

(i) select Participants to be granted Awards under the Plan and grant Awards pursuant to the terms of the Plan;

(ii) determine the type, size and terms of the Awards to be granted to each Participant;

(iii) determine the time when Awards are to be granted and any conditions that must be satisfied before an Award is granted;

(iv) establish objectives and conditions for earning an Award;

(v) determine all other terms and conditions, not inconsistent with the terms of the Plan and any operative employment or other agreement, of any Award granted under the Plan, and determine the appropriate Award Agreement evidencing the Award;

(vi) determine whether the terms, conditions, and objectives for earning an Award have been met, including, without limitation, any such determination or certification, as the case may be, required for compliance with Code Section 162(m);

(vii) modify or waive the terms and conditions of Awards granted under the Plan, in a manner not inconsistent with the terms of the Plan and any operative employment or other agreement, accelerate the vesting, exercise or payment of an Award or cancel or suspend an Award;

(viii) determine whether the amount or payment of an Award should be reduced or eliminated, and determine if, when and under what conditions payment of all or any part of any Award may be deferred;

(ix) determine the guidelines and/or procedures for the payment or exercise of Awards;

(x) determine whether an Award may be intended to qualify, regardless of its amount, as deductible in its entirety for federal income tax purposes, including whether any Awards granted to an employee should qualify for the Performance-Based Exception;

(xi) adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan;

(xii) construe, interpret, administer and implement the Plan, any Award Agreements or related documents and correct any defect, supply an omission or reconcile any inconsistency in or between the Plan, any Award Agreement or related documents; and

(xiii) make factual determinations with respect to the Plan and any Awards and otherwise supervise the administration of the Plan.

(b) Binding Authority. The Committee’s interpretations of the Plan, and all actions taken and determinations made by the Committee pursuant to the powers vested in it under the Plan, shall be conclusive and binding on all parties, including the Company, its shareholders and all Participants.

(c) Delegation of Authority. To the extent not prohibited by law or the rules of the national securities exchange on which the Company’s Common Shares are listed, the Committee may allocate its authority hereunder to one or more of its members or delegate its authority hereunder to one or more Non-Employee Directors or one or more officers of the Company, except that no such allocation or delegation shall be permitted with respect to Awards intended to qualify for the Performance-Based Exception, and may grant authority to employees of the Company to execute documents on behalf of the Committee or to otherwise assist in the administration and operation of the Plan. When the Committee delegates its authority hereunder to one or more officers of the Company, it shall specify the total number of Awards that the officer or officers may award and the terms on which any Awards may be issued, offered or sold. In no event shall the Committee authorize any officer to designate such officer as a recipient of any Awards.

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4. Eligibility

Subject to the terms and conditions of the Plan, the Committee may select, from all eligible persons, Participants to whom Awards shall be granted under the Plan and shall determine the nature and amount of each Award. Eligible persons include any of the following individuals: (i) any officer or key employee of the Company, (ii) any consultant (as defined in the General Instructions to the Form S-8 registration statement under the Securities Act) to the Company, and (iii) any Non-Employee Director. All Awards shall be evidenced by an Award Agreement, and Awards may be conditioned upon the Participant’s execution of an Award Agreement.

5. Common Shares Subject to the Plan

(a) Authorized Number of Common Shares. Unless otherwise authorized by the Company’s shareholders and subject to this Section 5 and Section 8, the maximum aggregate number of Common Shares available for issuance under the Plan is 750,000. Upon the Effective Date, the Prior Plans will terminate and no further Awards shall be granted thereunder; provided that all outstanding awards under the Prior Plans as of the Effective Date shall remain outstanding and shall be administered and settled in accordance with the provisions of the Prior Plans, as applicable.

(i) The maximum number of Common Shares available for grant with respect to Full-Value Awards is 750,000.

(ii) The maximum number of Common Shares available for issuance with respect to ISOs is 750,000.

(b) Share Counting. The following rules shall apply in determining the number of Common Shares available for grant under the Plan:

(i) Common Shares subject to any Award shall be counted against the maximum share limitation as one Common Share for every Common Share subject thereto.

(ii) To the extent that any Award is forfeited, cancelled, settled in cash, returned to the Company for failure to satisfy vesting requirements or other conditions of the Award or otherwise terminates without an issuance of Common Shares being made, the maximum share limitation shall be credited with one Common Share for each Common Share subject to such Award, and such number of credited Common Shares may again be made subject to Awards under the Plan.

(iii) Any Common Shares underlying Awards granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who become employees of the Company as a result of a merger, consolidation, acquisition or other corporate transaction shall not, unless required by law or regulation, count against the reserve of available Common Shares under the Plan.

(c) Award Limitations. Subject to the adjustment provisions of Section 8, the following limits shall apply with respect to Awards intended to quality for the Performance-Based Exception:

(i) The maximum aggregate number of Common Shares that may be subject to Stock Options or SARs granted in any calendar year to any one Participant shall be 300,000 Common Shares.

(ii) The maximum aggregate number of Common Shares that may be subject to Full-Value Awards granted in any calendar year to any one Participant shall be 100,000 Common Shares.

(d) Shares to be Delivered. Common Shares to be delivered by the Company under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

6. Awards to Participants

(a) Stock Options.

(i) Grants. Subject to the terms and conditions of the Plan, Stock Options may be granted to Participants, in such number and upon such terms and conditions as the Committee determines, and may consist of ISOs or NQSOs. Stock options may be granted alone or with Tandem SARs. With respect to Stock Options granted with Tandem SARs, the exercise of either such Stock Options or Tandem SARs will result in the simultaneous cancellation of the same number of Stock Options or Tandem SARs, as the case may be.

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(ii) Exercise Price. The Exercise Price shall be equal to or, at the Committee’s discretion, greater than the Fair Market Value on the date the Stock Option is granted, unless the Stock Option was granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who became employees of the Company as a result of a merger, consolidation, acquisition or other corporate transaction, in which case the assumption or substitution shall be accomplished in a manner that permits the Stock Option to be exempt from Code Section 409A.

(iii) Term. The term of Stock Options shall be determined by the Committee in its sole discretion, but in no event shall the term exceed ten years from the Date of Grant.

(iv) ISO Limits. ISOs may be granted only to Participants who are employees of the Company (or of any parent or Subsidiary) on the Date of Grant, and may only be granted to an employee who, at the time the Stock Option is granted, does not own more than ten percent of the total combined voting power of all classes of stock of the Company (or of any parent or Subsidiary), unless (A) the Exercise Price is at least 110% percent of the Fair Market Value on the Date of Grant, and (B) the ISO is not exercisable after five years from the Date of Grant. The aggregate Fair Market Value of all Common Shares, determined at the time the ISOs are granted, with respect to which ISOs are exercisable by a Participant for the first time during any calendar year (under all plans of the Company) shall not exceed $100,000 or such other amount as may subsequently be specified by the Code. If such Fair Market Value exceeds the $100,000 limit, the ISOs exceeding the limit shall be treated as NQSOs, taking the Stock Options in the order each was granted. The terms of all ISOs shall be consistent with and contain or be deemed to contain all provisions required to qualify as an “incentive stock option” under Code Section 422.

(v) No Repricing. Subject to the adjustment provisions of Section 8, without the approval of the Company’s shareholders, (A) the Exercise Price for any outstanding Stock Option may not be decreased after the Date of Grant, (B) no outstanding Stock Option may be surrendered to the Company as consideration for the grant of a new Stock Option with a lower Exercise Price, and (C) no other modifications to any outstanding Stock Option may be made that would be treated as a “repricing” under the then applicable rules, regulations or listing requirements adopted by the national securities exchange on which the Common Shares are listed.

(vi) Form of Payment. Vested Stock Options may be exercised in whole or in part, and the Exercise Price shall be paid to the Company at the time of exercise, subject to any applicable rules or regulations adopted by the Committee:

(A) to the extent permitted by applicable law, pursuant to cashless exercise procedures that are approved by the Committee;

(B) through the tender of unrestricted Common Shares owned by the Participant (or by delivering a certification or attestation of ownership of such Common Shares) valued at their Fair Market Value on the date of exercise;

(C) in cash or its equivalent; or

(D) by any combination of (A), (B), and (C) above.

(vii) No Dividends or Shareholder Rights. No dividends or dividend equivalents may be paid on Stock Options. Except as otherwise provided herein, a Participant shall have no rights as a holder of Common Shares covered by a Stock Option unless and until such Common Shares have been registered to the Participant as the owner.

(b) Stock Appreciation Rights.

(i) Grants. Subject to the terms and provisions of the Plan, SARs may be granted to Participants, in such number and upon such terms and conditions as the Committee determines, and may be granted alone or as Tandem SARs. With respect to Tandem SARs, the exercise of either such Stock Options or SARs will result in the simultaneous cancellation of the same number of Tandem SARs or Stock Options, as the case may be.

(ii) Exercise Price. The Exercise Price shall be equal to or, at the Committee’s discretion, greater than Fair Market Value on the date the SAR is granted, unless the SAR was granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who became employees of the Company as a result of a merger, consolidation, acquisition or other corporate transaction involving the Company, in

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which case the assumption or substitution shall be accomplished in a manner that permits the SAR to be exempt from Code Section 409A.

(iii) Term. The term of a SAR shall be determined by the Committee in its sole discretion, but in no event shall the term exceed ten years from the Date of Grant; provided that, each SAR granted in tandem with a Stock Option shall terminate upon the termination or exercise of the related Stock Option.

(iv) No Repricing. Subject to the adjustment provisions of Section 8, without the approval of the Company’s shareholders, (A) the Exercise Price for any outstanding SAR may not be decreased after the Date of Grant, (B) no outstanding SAR may be surrendered to the Company as consideration for the grant of a new SAR with a lower Exercise Price, and (C) no other modifications to any outstanding SAR may be made that would be treated as a “repricing” under the then applicable rules, regulations or listing requirements adopted by the national securities exchange on which the Common Shares are listed.

(v) Form of Payment. Vested SARs may be exercised in whole or in part, and the Committee may authorize payment of a SAR in the form of cash, Common Shares valued at its Fair Market Value on the date of the exercise or a combination thereof, or by any other method as the Committee may determine.

(vi) Tandem SARs. Tandem SARs may be exercised for all or part of the Common Shares subject to the related Stock Option upon the surrender of the right to exercise the equivalent portion of the related Stock Option. A Tandem SAR may be exercised only with respect to the Common Shares for which its related Stock Option is then exercisable. Notwithstanding any other provision of the Plan to the contrary, with respect to a Tandem SAR granted in connection with an ISO: (A) the Tandem SAR will expire no later than the expiration of the underlying ISO; (B) the value of the payout with respect to the Tandem SAR may be for no more than 100% of the excess of the Fair Market Value of the Common Shares subject to the underlying ISO at the time the Tandem SAR is exercised over the Exercise Price of the underlying ISO; and (C) the Tandem SAR may be exercised only when the Fair Market Value of the Common Shares subject to the ISO exceeds the Exercise Price of the ISO.

(vii) No Dividends or Shareholder Rights. No dividends or dividend equivalents may be paid on SARs. Except as otherwise provided herein, a Participant shall have no rights as a holder of Common Shares covered by a SAR unless and until such Common Shares have been registered to the Participant as the owner.

(c) Restricted Shares and Restricted Share Units.

(i) Grants. Subject to the terms and provisions of the Plan, Restricted Shares and Restricted Share Units may be granted to Participants in such number and upon such terms and conditions as the Committee determines. Restricted Shares will be registered in the name of the Participant and deposited with the Company or its agent in certificated or book-entry form.

(ii) Restrictions. Restricted Shares or Restricted Share Units may be granted at no cost or at a purchase price determined by the Committee, which may be less than the Fair Market Value, but subject to such terms and conditions as the Committee determines, including, without limitation: forfeiture conditions, transfer restrictions, restrictions based upon the achievement of specific performance goals (Company-wide, divisional and/or individual), which may be based on one or more Performance Measures, time-based restrictions on vesting and/or restrictions under applicable federal or state securities laws. Subject to Sections 9 and 10, for Awards to employees, no Restricted Shares or Restricted Share Units conditioned upon the achievement of performance shall be based on a Restriction Period of less than one year, and, except as may be determined by the Committee, any Restriction Period based solely on continued employment or service (time-based) shall be for a minimum of three years, subject to (A) pro rata or graded vesting prior to the expiration of such time-based Restriction Period, and (B) acceleration due to the Participant’s death, Disability or Retirement, in each case as specified in the applicable Award Agreement; provided that the Restriction Period applicable to the first vesting date of an Award subject to pro rata or graded vesting (as referenced in (A) above) may be for less than one year, provided the first vesting date is no earlier than the fiscal year-end date of the fiscal year during which the Award was granted. To the extent the Restricted Shares or Restricted Share Units are intended to qualify for the Performance-Based Exception, except as may be determined by the Committee, the applicable restrictions shall be based on the achievement of Performance Goals over a Performance Period, as described in Section 6(e).

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(iii) Transfer Restrictions. During the Restriction Period, Restricted Shares and Restricted Share Units may not be sold, assigned, transferred or otherwise disposed of, or mortgaged, pledged or otherwise encumbered. In order to enforce the limitations imposed upon the Restricted Shares, the Committee may (A) cause a legend or legends to be placed on any certificates evidencing such Restricted Shares, and/or (B) cause “stop transfer” instructions to be issued, as it deems necessary or appropriate.

(iv) Dividends and Voting Rights. Unless otherwise determined by the Committee, during the Restriction Period, Participants who hold Restricted Shares shall have the right to receive dividends in cash or other property or other distribution or rights in respect of the Restricted Shares but shall not have the right to vote the Restricted Shares as the record owners; provided that, unless otherwise determined by the Committee, any dividends or other property payable to a Participant during the Restriction Period shall be distributed to the Participant only if and when the restrictions imposed on the applicable Restricted Shares lapse. Unless otherwise determined by the Committee, during the Restriction Period, Participants who hold Restricted Shares Units shall be credited with dividend equivalents in respect of such Restricted Share Units; provided that, unless otherwise determined by the Committee, such dividend equivalents shall be distributed (without interest) to the Participant only if and when the restrictions imposed on the applicable Restricted Share Units lapse. Participants shall have no other rights as a shareholder with respect to Restricted Share Units unless otherwise determined by the Committee. Notwithstanding the forgoing, no Restricted Shares or Restricted Share Units conditioned upon the achievement of performance shall provide the Participant with dividend or shareholder rights unless otherwise determined by the Committee; provided that an Award Agreement may provide for payment (in money or shares) equal to the dividends paid on the number of Common Shares payable upon vesting of such Restricted Shares or Restricted Share Units or at any time prior thereto.

(v) Payment of Restricted Share Units. Restricted Share Units that become payable in accordance with their terms and conditions shall be settled in cash, Common Shares, Restricted Shares, or a combination thereof, as determined by the Committee.

(vi) Ownership. Restricted Shares shall be registered in the name of the Participant on the books and records of the Company or its designee (or by one or more physical certificates if physical certificates are issued) subject to the applicable restrictions imposed by the Plan. At the end of the Restriction Period that applies to Restricted Shares, the number of shares to which the Participant is entitled shall be delivered to the Participant free and clear of the restrictions, either in certificated or book-entry form. No Common Shares shall be registered in the name of the Participant with respect to Restricted Share Units, and Participants shall have no ownership interest in the Common Shares to which the Restricted Share Units relate, unless and until payment is made in Common Shares.

(vii) Forfeiture. If a Participant who holds Restricted Shares or Restricted Share Units fails to satisfy the restrictions, terms or conditions applicable to the Award, except as otherwise determined by the Committee, the Participant shall forfeit the Restricted Shares or Restricted Share Units. The Committee may at any time waive such restrictions or accelerate the date or dates on which the restrictions will lapse; however, to the extent the Restricted Shares or Restricted Share Units are intended to qualify for the Performance-Based Exception, the provisions of Section 6(e)(iv) will apply.

(d) Performance Shares and Performance Units.

(i) Grants. Subject to the terms and provisions of the Plan, Performance Shares and Performance Units may be granted to Participants in such number and upon such terms and conditions as the Committee determines.

(ii) Award Value of Performance Shares/Units. The Award Value of each Performance Share and Performance Unit shall be calculated immediately following the Termination Date, unless the Committee designates a different day for such calculation at the time of grant.

(iii) Term. Performance Shares and Performance Units shall terminate on a Termination Date to be determined by the Committee in its sole discretion.

(iv) Vesting. Performance Shares and Performance Units shall vest as of the Termination Date, but only if the Participant is actively employed on a full-time basis with the Company through the Termination Date.

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(v) Forfeiture. All unvested Performance Shares and Performance Units shall be forfeited on Termination Date or such other date as may be set forth in the Award Agreement or determined by the Committee at the time of grant in its sole discretion.

(e) Performance-Based Exception.

(i) Grants. Subject to the provisions of the Plan, Full-Value Awards granted in a manner that is intended to qualify for the Performance-Based Exception shall be conditioned upon the achievement of Performance Goals as the Committee shall determine, in its sole discretion.

(ii) Performance Goals. Performance Goals shall be based on one or more Performance Measures, over a Performance Period, as to be determined by the Committee.

(iii) Performance Measures. The Performance Measure(s) may be described in terms of objectives that are related to the individual Participant or objectives that are Company-wide or related to a subsidiary, division, department, region, function or business unit of the Company, and shall consist of one or more or any combination of the following criteria: combined ratio, premium growth, including growth within certain specific geographical areas, cash flow, profit, revenue, stock price, market share, sales, net income, operating income, return ratios, earnings per share, earnings (which may include an add back for taxes, interest, and/or depreciation and amortization), operating earnings, profit margins, earnings per Common Share, favorable comparison to established budgets, return on equity or shareholders’ equity, return on assets, attainment of strategic and operational initiatives, comparisons with various stock market indices, reduction in costs or a combination of such factors, personal performance measures, working capital, total assets, net assets, return on sales, return on invested capital, gross margin, costs, shareholders’ equity, shareholder return and/or productivity or productivity improvement. The Performance Goals based on these Performance Measures may be expressed in absolute terms, before or after taxes, or relative to the performance of other entities.

(iv) Treatment of Awards. With respect to any Full-Value Award that is intended to qualify for the Performance-Based Exception: (A) the Committee shall interpret the Plan and this Section 6(e) in light of Code Section 162(m), (B) the Committee shall not amend the Full-Value Award in any way that would adversely affect the treatment of the Full-Value Award under Code Section 162(m), and (C) such Full-Value Award shall not vest or be paid until the Committee shall first have certified that the Performance Goals have been achieved.

(f) Unrestricted Share Awards.

Subject to the terms and provisions of the Plan, the Committee may grant awards of unrestricted Common Shares to Participants in such number and upon such terms and conditions as the Committee determines in recognition of outstanding achievements or contributions by such Participants or otherwise. Unrestricted Common Shares issued on a bonus basis may be issued for no cash consideration.

(g) Provisions Applicable to Non-Employee Directors.

(i) Full-Value Awards. The Committee shall have authority to grant to Non-Employee Directors, on or about June 1 of each year during which a Non-Employee Director is a member of the Company’s Board and is serving on the Board as of June 1, a Full Value Award determined by dividing $55,000 (the “Equity Grant Value”) by the average of the per share Fair Market Value of Common Shares for the five (5) trading days ending on the last business day prior to June 1 of the applicable year; the resulting number shall then be rounded up to the nearest share. Effective as of May 20, 2014, the Equity Grant Value shall be increased from $55,000 to $65,000. Effective as of February 23, 2017, the Equity Grant Value shall be increased from $65,000 to $80,000. The Committee may change the Equity Grant Value from time to time, or may determine that a fixed number of shares be granted in lieu of using the “Equity Grant Value” method described above, in each case without shareholder approval. Full-Value Awards granted to Non-Employee Directors pursuant to this Section 6(g)(i) shall not be transferrable by Non-Employee Directors for a period of six (6) months from the Date of Grant. Notwithstanding the foregoing, the Committee may grant to Non-Employee Directors Stock Options in lieu of or in addition to Restricted Shares.

(ii) Additional Payment in Common Stock in Lieu of Cash. On or prior to January 1 of any calendar year, any Non-Employee Director may notify the Company that he or she is electing to receive unrestricted Common Shares in lieu of a specified percentage (not to exceed 50%) of cash compensation scheduled to be received in

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the upcoming calendar year; provided, however, that this amount shall exclude such cash compensation to be earned for attending Board and/or committee meetings. Such additionally issued Common Shares shall be governed by the terms and provisions of Section 6(g)(i) above and the additional terms and provisions of this Plan.

(iii) Additional Transfer Restrictions. No Non-Employee Director may dispose of any shares received pursuant to an Award under Section 6(g)(i) of this Plan until such Non-Employee Director beneficially owns the target amount of Common Shares required by stock ownership guidelines adopted by the Company (the “Share Ownership Target”). Thereafter, no Non-Employee Director shall dispose of any shares received pursuant to an Award under Section 6(g)(i) of this Plan such that such Non-Employee Director’s direct or indirect ownership of Common Shares would be less than the Share Ownership Target.

7. Deferred Payment

Subject to the terms of the Plan, the Committee may determine that all or a portion of any Award to a Participant, whether it is to be paid in cash, Common Shares or a combination thereof, shall be deferred or may, in its sole discretion, approve deferral elections made by Participants. Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion, which terms shall comply with Code Section 409A.

8. Dilution and Other Adjustments

In the event of any merger, reorganization, consolidation, liquidation, recapitalization, reclassification, redesignation, stock dividend, other distribution (whether in the form of cash, shares or otherwise), stock split, reverse stock split, spin off, combination, repurchase or exchange of shares or issuance of warrants or rights to purchase shares or other securities, or other change in corporate structure affecting the Common Shares, the Committee shall make such adjustments in the aggregate number and type of Common Shares which may be delivered and the individual award maximums as set forth in Section 5, the number and type of Common Shares subject to outstanding Awards and the Exercise Price or other price of Common Shares subject to outstanding Awards (provided the number of Common Shares subject to any Award shall always be a whole number), as may be and to the extent determined to be appropriate and equitable by the Committee to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. Such adjustment shall be conclusive and binding for all purposes of the Plan. Any such adjustment of an ISO or SAR shall be made in compliance with Code Sections 422 and 424, and no such adjustment shall be made that would cause any Award which is or becomes subject to Code Section 409A to fail to comply with the requirements of Code Section 409A or is exempt from Code Section 409A to become subject to Code Section 409A.

9. Change in Control

Notwithstanding any other provision of the Plan to the contrary, immediately upon the occurrence of a Change in Control, the following provisions of this Section 9 shall apply except to the extent an Award Agreement provides for a different treatment (in which case the Award Agreement shall govern):

(a) all outstanding Stock Options and SARs vest and become fully exercisable; and

(b) all Full-Value Awards (including Performance Shares and Performance Units) become fully vested.

10. Termination

(a) Termination by Death, Disability, or Retirement. Unless otherwise provided in the Participant’s Award Agreement, the vesting of an Award shall be immediately accelerated upon a Participant’s death, Disability, or Retirement; provided that the vesting of Performance Shares and Performance Units in connection with Retirement shall only be accelerated on a pro-rata basis based upon the amount of days that have passed since the Commencement Date and; provided further that for Full-Value Awards intended to qualify for the Performance-Based Exception, in the case of Retirement no vesting may occur or no distribution may be made prior to the attainment of the Performance Goals. Stock Options and SARs may thereafter be exercised for a period of one year following such termination, in the case of death or Disability, and 90 days in the case of Retirement (or such other period as the Committee may specify at or after the time of grant) or until the expiration of the stated term of such Stock Option, whichever period is shorter.

10

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

(b) Termination for Cause. Unless otherwise provided in the Participant’s Award Agreement, if a Participant’s employment or service terminates for Cause, (i) all Stock Options and SARs (or portions thereof) which have not been exercised, whether vested or not, and (ii) all Full-Value Awards, shall immediately be forfeited upon termination, including such Awards that are subject to performance conditions (or unearned portions thereof).

(c) Other Terminations.

(i) By the Company. Unless otherwise provided in the Participant’s Award Agreement, if a Participant’s employment or service is terminated by the Company for any reason other than Cause, (x) any unvested portion of Stock Options or SARs held by the Participant at the time of termination shall become vested and such Stock Options and SARs may be exercised for a period of three months (or such other period as the Committee may specify at or after the time of grant) from the termination date, or until the expiration of the original term of the Stock Option or SAR, whichever period is shorter; provided that, for Stock Options and SARs intended to qualify for the Performance-Based Exception, no vesting may occur or no distribution may be made prior to the attainment of the Performance Goals and (y) all Full-Value Awards shall become fully-vested upon termination; provided that, the vesting of Performance Shares and Performance Units shall only be accelerated on a pro-rata basis based upon the amount of days that have passed since the Commencement Date and; provided further that, for Full-Value Awards intended to qualify for the Performance-Based Exception, no vesting may occur or no distribution may be made prior to the attainment of the Performance Goals. If a Participant dies during the three month period referred to in clause (x) above, any unexercised Stock Option or SAR held by the Participant or transferred pursuant to the provisions of this Plan, shall be exercisable, to the full extent that such Stock Option was exercisable at the time of death, for a period of one year after the date of death of the Participant or until the expiration of the stated term of such Stock Option, whichever period is shorter.

(ii) By the Participant. Unless otherwise provided in the Participant’s Award Agreement, if a Participant’s employment or service is terminated by the Participant for any reason other than death, Disability or Retirement, (x) any vested portion of Stock Options or SARs held by the Participant at the time of termination may be exercised for a period of three months (or such other period as the Committee may specify at or after the time of grant) from the termination date, or until the expiration of the original term of the Stock Option or SAR, whichever period is shorter, (y) no unvested portion of any Stock Option or SAR shall become vested, including such Awards that are subject to performance conditions (or unearned portions thereof), and (z) all Full-Value Awards, including such Awards that are subject to performance conditions (or unearned portions thereof), shall immediately be forfeited upon termination. If a Participant dies during the three month period referred to in clause (x) above, any unexercised Stock Option or SAR held by the Participant or transferred pursuant to the provisions of this Plan, shall be exercisable, to the full extent that such Stock Option was exercisable at the time of death, for a period of one year after the date of death of the Participant or until the expiration of the stated term of such Stock Option, whichever period is shorter.

(d) Limitation for ISOs. No ISO may be exercised more than three months following termination of employment for any reason (including Retirement) other than death or Disability, nor more than one year following termination of employment for the reason of death or Disability (as defined in Code Section 422), or such Award will no longer qualify as an ISO and shall thereafter be, and receive the tax treatment applicable to, a NQSO. For this purpose, a termination of employment is cessation of employment, under the rules applicable to ISOs, such that no employment relationship exists between the Participant and the Company.

(e) Transfers and Leaves of Absence. The transfer of a Participant within the Company shall not be deemed a termination of employment except as required by Code Sections 422 and 409A, and other applicable laws. The following leaves of absences are not deemed to be a termination of employment:

(i) if approved in writing by the Company, for military service, sickness or any other purpose approved by the Company, and the period of absence does not exceed 90 days;

(ii) if in excess of 90 days, if approved in writing by the Company, but only if the Participant’s right to reemployment is guaranteed by statute or contract and provided that the Participant returns to work within 30 days after the end of such absence; and

(iii) subject to the restrictions of Code Section 409A and to the extent that such discretion is permitted by law, if the Committee determines in its discretion that the absence is not a termination of employment.

11

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

11. Recoupment or Recovery Policy

Any Award shall be subject to forfeiture or repayment pursuant to the terms of any applicable compensation recoupment or recovery policy adopted by the Company, Committee or Board, as thereafter amended, including any policy adopted to comply with the rules of any stock exchange on which the Common Shares are traded or the Securities and Exchange Commission.

12. Miscellaneous Provisions

(a) Rights as a Shareholder. Except as otherwise provided herein, a Participant shall have no rights as a shareholder with respect to Awards hereunder, unless and until the Common Shares have been registered to the Participant as the owner.

(b) No Loans. No loans from the Company to Participants shall be permitted in connection with the Plan.

(c) Assignment or Transfer. Except as otherwise provided under the Plan, no Award or any rights or interests therein shall be transferable other than by will or the laws of descent and distribution. The Committee may, in its discretion, provide that an Award (other than an ISO) is transferable without the payment of any consideration to a Participant’s family member, subject to such terms and conditions as the Committee may impose. For this purpose, “family member” has the meaning given to such term in the General Instructions to the Form S-8 registration statement under the Securities Act. All Awards shall be exercisable, during the Participant’s lifetime, only by the Participant or a person who is a permitted transferee pursuant to this Section 12(c). Once awarded, the Common Shares (other than Restricted Shares) received by Participants may be freely transferred, assigned, pledged or otherwise subjected to lien, subject to the restrictions imposed by the Securities Act, Section 16 of the Exchange Act and the Company’s Insider Trading Policy, each as amended.

(d) Withholding Taxes. The Company shall have the right to deduct from all Awards paid in cash to a Participant any taxes required by law to be withheld with respect to such Awards. All statutory applicable withholding taxes arising with respect to Awards paid in Common Shares to a Participant shall be satisfied by the Company retaining Common Shares having a Fair Market Value on the date the tax is to be determined that is equal to the amount of such statutory applicable withholding tax (rounded, if necessary, to the next lowest whole number of Common Shares); provided, however, that, subject to any restrictions or limitations that the Company deems appropriate, a Participant may elect to satisfy applicable withholding tax through cash or cash proceeds.

(e) No Rights to Awards. Neither the Plan nor any action taken hereunder shall be construed as giving any person any right to be retained in the employ or service of the Company, and the Plan shall not interfere with or limit in any way the right of the Company to terminate any person’s employment or service at any time. Except as set forth herein, no employee or other person shall have any claim or right to be granted an Award under the Plan. By accepting an Award, the Participant acknowledges and agrees that (i) the Award will be exclusively governed by the Plan, including the right of the Company to amend or cancel the Plan at any time without the Company incurring liability to the Participant (except, to the extent the terms of the Award so provide, for Awards already granted under the Plan), (ii) the Participant is not entitled to future award grants under the Plan or any other plan, and (iii) the value of any Awards received shall be excluded from the calculation of termination or other severance payments or benefits.

(f) Beneficiary Designation. To the extent allowed by the Committee, each Participant under the Plan may name any beneficiary or beneficiaries to whom any benefit under the Plan is to be paid in case of his or her death before he or she receives all of such benefit. Unless the Committee determines otherwise, each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee and shall be effective only when received in writing by the Company during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.

(g) Fractional Shares. Fractional Common Shares shall not be issued or transferred under an Award, but the Committee may direct that cash be paid in lieu of fractional shares or may round off fractional shares, in its discretion.

(h) Unfunded Plan. The Plan shall be unfunded and any benefits under the Plan shall represent an unsecured promise to pay by the Company. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a general unsecured creditor of the Company.

12

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

(i) Severability. If any provision of the Plan is deemed illegal or invalid, the illegality or invalidity shall not affect the remaining provisions of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

(j) Limitation of Liability. Members of the Board and the Committee and officers and employees of the Company who are their designees acting under the Plan shall be fully protected in relying in good faith upon the advice of counsel and shall incur no liability except for gross or willful misconduct in the performance of their duties hereunder.

(k) Successors . All obligations of the Company with respect to Awards granted under the Plan shall be binding on any successor to the Company, whether as a result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

(l) Code Section 409A Compliance. Each Award granted under the Plan is intended to be either exempt from or in compliance with the requirements of Code Section 409A and any regulations or guidance that may be adopted thereunder, including any transition relief available under applicable guidance. The Plan may be amended or interpreted by the Committee as it determines appropriate in accordance with Code Section 409A and to avoid a plan failure under Code Section 409A(a)(1). If a Participant is a “specified employee” as defined in Code Section 409A at the time of the Participant’s separation from service with the Company, then solely to the extent necessary to avoid the imposition of any additional tax under Code Section 409A, the commencement of any payments or benefits under an Award shall be deferred until the date that is six months following the Participant’s separation from service (or such other period as required to comply with Code Section 409A).

13. Effective Date, Amendments, Governing Law and Plan Termination

(a) Effective Date. The Effective Date of the Plan is the date on which the Company’s shareholders approve the Plan at a duly held shareholder meeting.

(b) Amendments .

(i) Amendment of the Plan. The Committee or the Board may at any time terminate or amend the Plan in whole or in part, but no such action shall materially and adversely affect any rights or obligations with respect to any Awards granted prior to the date of such termination or amendment without the consent of the affected Participant, except to the extent that the Committee reasonably determines that such termination or amendment is necessary or appropriate to comply with applicable law or the rules and regulations of any stock exchange on which the Common Shares are traded or to preserve any intended favorable, or avoid any unintended unfavorable, tax effects for the Company, Plan or Participants. Notwithstanding the foregoing, unless the Company’s shareholders shall have first approved the amendment, no amendment of the Plan shall be effective if the amendment would: (A) increase the maximum number of Common Shares that may be delivered under the Plan or to any one individual (except to the extent made pursuant to Section 8 hereof), (B) extend the maximum period during which Awards may be granted under the Plan, (C) add to the types of awards that can be made under the Plan, (D) modify the requirements as to eligibility for participation in the Plan, (E) permit a repricing or decrease the Exercise Price to less than the Fair Market Value on the Date of Grant of any Stock Option or SAR, except for adjustments made pursuant to Section 8, (F) materially increase benefits to Participants, or (G) otherwise require shareholder approval pursuant to the Plan or applicable law or the rules of the principal securities exchange on which Common Shares are traded.

(ii) Amendment of Awards. The Committee may amend, prospectively or retroactively, the terms of an Award, provided that no such amendment is inconsistent with the terms of the Plan or would materially and adversely affect the rights of any Participant without his or her written consent.

(c) Governing Law. To the extent not preempted by Federal law, the Plan and all Award Agreements are construed in accordance with and governed by the laws of the State of Ohio. The Plan is not intended to be governed by the Employment Retirement Income Security Act of 1974, and shall be so construed and administered.

(d) Plan Termination. No Awards shall be made under the Plan after the tenth anniversary of the Effective Date.

13

EX-21

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

EXHIBIT 21

EXHIBIT 21 - SUBSIDIARIES OF THE REGISTRANT

The following is a list of subsidiaries of Infinity at December 31, 2016. Except as otherwise noted, all corporations are subsidiaries of Infinity and, if indented, subsidiaries of the company under which they are listed.

Name of Company	Incorporated	Percentage of Ownership
Hillstar Insurance Company	Indiana	100
Infinity Financial Centers, LLC	Delaware	100
Infinity Insurance Company	Indiana	100
Infinity Insurance Agency, Inc.	Georgia	100
Infinity Agency of Texas, Inc.	Texas	100
Infinity Assurance Insurance Company	Ohio	100
Infinity Auto Insurance Company	Ohio	100
Leader Group, Inc.	Ohio	100
Leader Managing General Agency, Inc.	Texas	100
Infinity Casualty Insurance Company	Ohio	100
Infinity County Mutual Insurance Company	Texas	(a)
Infinity Indemnity Insurance Company	Indiana	100
Infinity Preferred Insurance Company	Ohio	100
Infinity Reserve Insurance Company	Ohio	100
Infinity Safeguard Insurance Company	Ohio	100
Infinity Security Insurance Company	Indiana	100
Infinity Select Insurance Company	Indiana	100
Infinity Standard Insurance Company	Indiana	100
Infinity Property and Casualty Services, Inc.	Georgia	100
Casualty Underwriters, Inc.	Georgia	100
The Infinity Group, Inc.	Indiana	100

________________

(a)    Denotes company that is affiliated but not owned.

EX-23

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

EXHIBIT 23

EXHIBIT 23 – CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements of our reports dated February 28, 2017, with respect to the consolidated financial statements and schedules of Infinity Property and Casualty Corporation and subsidiaries and the effectiveness of internal control over financial reporting of Infinity Property and Casualty Corporation and subsidiaries, included in this Annual Report (Form 10-K) of Infinity Property and Casualty Corporation and subsidiaries for the year ended December 31, 2016:

Form	Registration Number	Description
S-8	333-117711	Employee Stock Purchase Plan
S-3	333-209799	Automatic Shelf Registration Statement of securities of well-known seasoned issuers
S-8	333-189173	Amended and Restated 2013 Stock Incentive Plan

Birmingham, Alabama
February 28, 2017	/S/ ERNST & YOUNG LLP

EX-31.1

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

EXHIBIT 31.1

CERTIFICATIONS

I, James R. Gober, certify that:

1. I have reviewed this annual report on Form 10-K of Infinity Property and Casualty Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

February 28, 2017	BY:	/s/ JAMES R GOBER
		James R. Gober
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

EXHIBIT 31.2

CERTIFICATIONS

I, Robert H. Bateman, certify that:

1. I have reviewed this annual report on Form 10-K of Infinity Property and Casualty Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

February 28, 2017	BY:	/s/ ROBERT H. BATEMAN
		Robert H. Bateman
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

EX-32

INFINITY PROPERTY AND CASUALTY CORPORATION 10-K

EXHIBIT 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the filing with the Securities and Exchange Commission of the Annual Report of Infinity Property and Casualty Corporation (the “Company”) on Form 10-K for the period ended December 31, 2016, (the “Report”), each of the undersigned officers of the Company, certifies, pursuant to 18 U.S.C. Section 1350, that to the best of his knowledge:

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.

February 28, 2017	BY:	/s/ JAMES R. GOBER
		James R. Gober
		President and Chief Executive Officer
February 28, 2017	BY:	/s/ ROBERT H. BATEMAN
		Robert H. Bateman
		Executive Vice President, Chief Financial Officer and Treasurer

XML

Document and Entity Information Document - USD ($)	12 Months Ended
	Dec. 31, 2016	Feb. 17, 2017	Jun. 30, 2016
Document Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY
Entity Registrant Name	INFINITY PROPERTY & CASUALTY CORP
Entity Central Index Key	0001195933
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		11,038,721
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 860,574,116

XML

Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Revenues:
Earned premium	$ 1,391,664	$ 1,346,564	$ 1,325,935
Earned premium, percent change	3.30%	1.60%
Installment and other fee income	$ 107,361	$ 96,753	95,242
Installment and other fee income, percent change	11.00%	1.60%
Net investment income	$ 35,537	$ 36,800	35,629
Net investment income, percent change	(3.40%)	3.30%
Net realized gains on investments	$ 3,145	$ 2,809	4,284
Net realized gains on investments, percent change	12.00%	(34.40%)
Other income	$ 1,000	$ 1,106	619
Other income, percent change	(9.60%)	78.80%
Total revenues	$ 1,538,706	$ 1,484,032	1,461,709
Total revenues, percent change	3.70%	1.50%
Costs and Expenses:
Losses and loss adjustment expenses	$ 1,096,755	$ 1,036,001	1,001,628
Losses and loss adjustment expense, percent change	5.90%	3.40%
Commissions and other underwriting expenses	$ 356,148	$ 348,219	354,559
Commissions and other underwriting expenses, percent change	2.30%	(1.80%)
Interest expense	$ 14,037	$ 14,029	13,989
Interest expense, percent change	0.10%	0.30%
Corporate general and administrative expenses	$ 7,899	$ 7,655	7,514
Corporate general and administrative expenses, percent change	3.20%	1.90%
Other expenses	$ 1,736	$ 3,296	882
Other expenses, percent change	(47.30%)	273.80%
Total costs and expenses	$ 1,476,575	$ 1,409,200	1,378,572
Total costs and expenses, percent change	4.80%	2.20%
Earnings before income taxes	$ 62,132	$ 74,832	83,138
Earnings before income taxes, percent change	(17.00%)	(10.00%)
Provision for income taxes	$ 19,047	$ 23,351	25,936
Provision for income taxes, percent change	(18.40%)	(10.00%)
Net Earnings	$ 43,085	$ 51,481	$ 57,201
Net Earnings, percent change	(16.30%)	(10.00%)
Net Earnings per Common Share:
Basic earnings per share (usd per share)	$ 3.91	$ 4.54	$ 5.00
Basic earnings per share, percent change	(13.90%)	(9.20%)
Diluted earnings per share (usd per share)	$ 3.88	$ 4.51	$ 4.95
Diluted earnings per share, percent change	(14.00%)	(8.90%)
Average Number of Common Shares:
Basic average number of common shares	11,018	11,334	11,440
Basic average number of common shares, percent change	(2.80%)	(0.90%)
Diluted average number of common shares	11,101	11,417	11,562
Diluted average number of common shares, percent change	(2.80%)	(1.30%)
Cash Dividends per Common Share (usd per share)	$ 2.08	$ 1.72	$ 1.44
Cash Dividends per Common Share, percent change	20.90%	19.40%
Net realized gains before impairment losses	$ 3,519	$ 4,102	$ 4,444
Net realized gains before impairment losses, percent change	(14.20%)	(7.70%)
Total other-than-temporary impairment (OTTI) losses	$ (375)	$ (1,294)	(1,023)
Total other-than-temporary impairment (OTTI) losses, percent change	(71.10%)	26.50%
Non-credit portion in other comprehensive income	$ 0	$ 0	888
Non-credit portion in other comprehensive income, percent change	0.00%
OTTI losses reclassified from other comprehensive income	$ 0	0	(25)
OTTI losses reclassified from other comprehensive income, percent change	0.00%
Net impairment losses recognized in earnings	$ (375)	$ (1,294)	$ (160)
Net impairment losses recognized in earnings, percent change	(71.10%)

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Statement of Comprehensive Income [Abstract]
Net earnings	$ 43,085	$ 51,481	$ 57,201
Other comprehensive income before tax:
Net change in post-retirement benefit liability	88	771	235
Unrealized gains (losses) on investments:
Unrealized holding gains (losses) arising during the period	3,205	(22,091)	14,618
Less: Reclassification adjustments for gains included in net earnings	(3,145)	(2,809)	(4,284)
Unrealized gains (losses) on investments, net	61	(24,900)	10,334
Other comprehensive income (loss), before tax	149	(24,129)	10,569
Income tax (expense) benefit related to components of other comprehensive income	52	(8,445)	3,699
Other comprehensive income (loss), net of tax	97	(15,684)	6,870
Comprehensive income	$ 43,182	$ 35,797	$ 64,071

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Investments:
Fixed maturities – at fair value (amortized cost $1,392,660 and $1,381,510)	$ 1,390,167	$ 1,381,467
Equity securities – at fair value (cost $77,013 and $78,815)	90,640	89,935
Short-term investments – at fair value (amortized cost $2,909 and $4,656)	2,907	4,651
Total investments	1,483,714	1,476,053
Cash and cash equivalents	92,800	62,483
Accrued investment income	12,485	12,245
Agents’ balances and premium receivable, net of allowances for doubtful accounts of $14,207 and $15,385	495,157	511,543
Property and equipment, net of accumulated depreciation of $70,559 and $72,892	96,166	89,707
Prepaid reinsurance premium	3,410	5,385
Recoverables from reinsurers (includes $121 and $362 on paid losses and LAE)	17,251	15,056
Deferred policy acquisition costs	91,136	93,157
Current and deferred income taxes	21,635	33,926
Receivable for securities sold	795	0
Other assets	12,777	10,306
Goodwill	75,275	75,275
Total assets	2,402,601	2,385,135
Liabilities:
Unpaid losses and loss adjustment expenses	685,455	669,965
Unearned premium	614,347	616,649
Long-term debt (fair value $278,726 and $281,581)	273,591	273,383
Commissions payable	16,176	17,406
Payable for securities purchased	13,922	7,264
Other liabilities	99,924	112,873
Total liabilities	1,703,414	1,697,540
Commitments and contingencies (See Note 14)
Shareholders’ equity:
Common stock, no par value (50,000,000 shares authorized; 21,809,954 and 21,774,520 shares issued)	21,829	21,794
Additional paid-in capital	378,745	376,025
Retained earnings	777,695	757,604
Accumulated other comprehensive income, net of tax	7,907	7,811
Treasury stock, at cost (10,766,211 and 10,623,138 shares)	(486,990)	(475,638)
Total shareholders’ equity	699,187	687,595
Total liabilities and shareholders’ equity	$ 2,402,601	$ 2,385,135

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Fixed maturities, amortized costs	$ 1,392,660	$ 1,381,510
Equity securities, cost	77,013	78,815
Short-term investments, cost	2,909	4,656
Agents' balances and premium receivable, allowance for doubtful accounts	14,207	15,385
Property and equipment, accumulated depreciation	70,559	72,892
Recoverable from reinsurers, paid losses and loss adjustment expenses	121	362
Long-term debt	$ 278,726	$ 281,581
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	21,809,954	21,774,520
Treasury stock, shares	10,766,211	10,623,138

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Consolidated Statements Of Changes In Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income, Net of Tax	Treasury Stock
Beginning Balance at Dec. 31, 2013	$ 656,758	$ 21,684	$ 368,902	$ 685,011	$ 16,624	$ (435,463)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	57,201	0	0	57,201	0	0
Net change in post-retirement benefit liability	153	0	0	0	153	0
Change in unrealized gain on investments	6,810	0	0	0	6,810	0
Change in non-credit component of impairment losses on fixed maturities	(93)	0	0	0	(93)	0
Comprehensive income	64,071
Dividends paid to common shareholders	(16,562)	0	0	(16,562)	0	0
Shares issued and share-based compensation expense, including tax benefit	3,527	61	3,466	0	0	0
Acquisition of treasury stock	(10,136)	0	0	0	0	(10,136)
Ending Balance at Dec. 31, 2014	697,659	21,745	372,368	725,651	23,494	(445,599)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	51,481	0	0	51,481	0	0
Net change in post-retirement benefit liability	501	0	0	0	501	0
Change in unrealized gain on investments	(16,795)	0	0	0	(16,795)	0
Change in non-credit component of impairment losses on fixed maturities	610	0	0	0	610	0
Comprehensive income	35,797
Dividends paid to common shareholders	(19,528)	0	0	(19,528)	0	0
Shares issued and share-based compensation expense, including tax benefit	3,706	49	3,658	0	0	0
Acquisition of treasury stock	(30,040)	0	0	0	0	(30,040)
Ending Balance at Dec. 31, 2015	687,595	21,794	376,025	757,604	7,811	(475,638)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	43,085	0	0	43,085	0	0
Net change in post-retirement benefit liability	57	0	0	0	57	0
Change in unrealized gain on investments	(238)	0	0	0	(238)	0
Change in non-credit component of impairment losses on fixed maturities	277	0	0	0	277	0
Comprehensive income	43,182
Dividends paid to common shareholders	(22,993)	0	0	(22,993)	0	0
Shares issued and share-based compensation expense, including tax benefit	2,755	35	2,720	0	0	0
Acquisition of treasury stock	(11,352)	0	0	0	0	(11,352)
Ending Balance at Dec. 31, 2016	$ 699,187	$ 21,829	$ 378,745	$ 777,695	$ 7,907	$ (486,990)

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Operating Activities:
Net earnings	$ 43,085	$ 51,481	$ 57,201
Adjustments:
Depreciation	14,642	12,299	10,803
Amortization	20,401	22,411	22,140
Net realized gains on investments	(3,145)	(2,809)	(4,284)
Loss (gain) on disposal of property and equipment	566	1,174	(16)
Share-based compensation expense	2,342	3,149	2,634
Excess tax benefits from share-based payment arrangements	(157)	(298)	(108)
Activity related to rabbi trust	77	(49)	48
Change in accrued investment income	(240)	732	(205)
Change in agents’ balances and premium receivable	16,385	(27,904)	(32,299)
Change in reinsurance receivables	(220)	(1,101)	(1,699)
Change in deferred policy acquisition costs	2,021	(2,728)	(2,170)
Change in other assets	9,954	(5,902)	4,063
Change in unpaid losses and loss adjustment expenses	15,490	1,787	21,600
Change in unearned premium	(2,301)	27,389	23,256
Change in other liabilities	(13,678)	(7,122)	5,056
Net cash provided by operating activities	105,223	72,507	106,020
Investing Activities:
Purchases of fixed maturities	(479,050)	(523,502)	(516,522)
Purchases of equity securities	(7,591)	(7,000)	(6,600)
Purchases of short-term investments	(9,882)	(8,413)	(7,920)
Purchases of property and equipment	(21,668)	(47,300)	(18,641)
Maturities and redemptions of fixed maturities	163,755	198,050	167,011
Maturities and redemptions of short-term investments	2,270	1,285	2,800
Proceeds from sale of fixed maturities	290,866	329,688	238,893
Proceeds from sale of equity securities	12,185	8,489	4,999
Proceeds from sale of short-term investments	9,258	3,086	6,864
Proceeds from sale of property and equipment	2	0	34
Net cash used in investing activities	(39,855)	(45,617)	(129,082)
Financing Activities:
Proceeds from stock options exercised and employee stock purchases	256	259	784
Excess tax benefits from share-based payment arrangements	157	298	108
Principal payments under capital lease obligations	(517)	(497)	(840)
Acquisition of treasury stock	(11,953)	(29,481)	(10,100)
Dividends paid to shareholders	(22,993)	(19,528)	(16,562)
Net cash used in financing activities	(35,051)	(48,948)	(26,609)
Net increase (decrease) in cash and cash equivalents	30,317	(22,058)	(49,670)
Cash and cash equivalents at beginning of period	62,483	84,541	134,211
Cash and cash equivalents at end of period	$ 92,800	$ 62,483	$ 84,541

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Significant Reporting and Accounting Policies

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Significant Reporting and Accounting Policies

Significant Reporting and Accounting Policies

Nature of Operations

We currently write personal automobile insurance with a concentration on nonstandard automobile insurance, commercial vehicle insurance and classic collector automobile insurance. Personal auto insurance accounts for 89% of our total gross written premium and we primarily write it in four states. We wrote approximately 55% of our personal auto gross written premium in the state of California during 2016.

Basis of Consolidation and Reporting

The accompanying consolidated financial statements include our accounts and those of our subsidiaries. These financial statements reflect certain adjustments necessary for a fair presentation of our results of operations and financial position. Such adjustments consist of normal, recurring accruals recorded to accurately match expenses with their related revenue streams and the elimination of all significant intercompany transactions and balances.

We have evaluated events that occurred after December 31, 2016, for recognition or disclosure in our financial statements and the notes to the financial statements.

Schedules may not foot due to rounding.

Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles of the United States requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Changes in circumstances could cause actual results to differ materially from those estimates.

Investments

We consider all fixed maturity securities “available for sale” and report them at fair value with net unrealized gains or losses reported after-tax (net of any valuation allowance) as a component of accumulated other comprehensive income within shareholders' equity. We base the fair values of investments on prices quoted in the most active market for each security. If quoted prices are not available, we estimate fair value based on the fair value of comparable securities, discounted cash flow models or similar methods. We treat premium and discounts on mortgage-backed securities (MBS) and asset-backed securities (ABS) as a yield adjustment over the estimated life of the securities, adjusted for anticipated prepayments, using the interest method. We base prepayment assumptions on data from widely accepted third party data sources or internal estimates. We review the amortized cost and effective yield of the security periodically and adjust it to reflect actual prepayments and changes in expectations. For high credit quality MBS and ABS (those rated AA or above at the time of purchase), the adjustments to amortized cost are recorded as a charge or credit to net investment income in accordance with the retrospective method. For MBS and ABS rated below AA, we adjust the yield prospectively for any changes in estimated cash flows.

Gains or losses on securities are determined on the specific identification basis. When we consider impairment in the value of a specific investment other-than-temporary (OTTI), the cost basis of that investment is reduced. For fixed maturity securities that are OTTI, we assess our intent to sell and the likelihood that we will be required to sell the security before recovery of our amortized cost. If a fixed maturity security is considered OTTI, but we do not intend to and are not more than likely to be required to sell the security prior to its recovery to amortized cost, the amount of the impairment is separated into a credit loss component and the amount due to all other factors. The excess of the amortized cost over the present value of the expected cash flows determines the credit loss component of an impairment charge on a fixed maturity security. The present value is determined using the best estimate of cash flows discounted at (i) the effective interest rate implicit at the date of acquisition for non-structured securities; or (ii) the book yield for structured securities. The techniques and assumptions for determining the best estimate of cash flows vary depending on the type of security. We recognize the credit loss component of an impairment charge in net earnings and the non-credit component in accumulated other comprehensive income.

Securities having a fair value of approximately $19.8 million at December 31, 2016, were on deposit as required by regulatory authorities.

Cash and Cash Equivalents

We consider liquid investments having original maturities of three months or less when purchased to be cash equivalents for purposes of the financial statements.

Reinsurance

Our insurance subsidiaries cede insurance to other companies. To the extent that any reinsuring companies are unable to meet obligations under agreements covering reinsurance ceded, our insurance subsidiaries would remain liable. We estimate amounts recoverable from reinsurers in a manner consistent with the claim liability associated with the reinsured policies. Our insurance subsidiaries report as assets (i) the estimated reinsurance recoverable on unpaid losses; and (ii) amounts paid to reinsurers applicable to the unexpired terms of policies in force.  

Advertising

Advertising costs are charged to expense as incurred. Total advertising costs were $9.7 million, $9.1 million and $8.7 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Deferred Policy Acquisition Costs (DPAC)

Policy acquisition costs (principally commissions, premium taxes and other marketing and underwriting expenses) related to the successful production of premium writings are deferred and charged against income ratably over the terms of the related policies. The method followed in computing DPAC limits the amount of such costs to their estimated realizable value without any consideration for anticipated investment income. Each quarter, we evaluate the recoverability of these costs. The DPAC amortization expense recognized in the Consolidated Statements of Earnings during 2016, 2015 and 2014 was $207.1 million, $203.7 million and $204.7 million, respectively.

Goodwill

In accordance with the Goodwill topic of the FASB Accounting Standards Codification (FASC), we perform impairment test procedures for goodwill on an annual basis. These procedures require us to calculate the fair value of goodwill, compare the result to our carrying value and record the amount of any shortfall as an impairment charge.

We performed this test as of October 1, 2016, using a variety of methods, including estimates of future discounted cash flows and comparisons of our market value to that of our major competitors. Our cash flow projections rely on assumptions that are subject to uncertainty, including premium growth, loss and loss adjustment expense ratios, interest rates and capital requirements.

The October 1, 2016, test results indicated that the fair value of our goodwill exceeded our carrying value and therefore no impairment charge was required at that date. Additionally, there was no indication of impairment at December 31, 2016.

Unpaid Losses and Loss Adjustment Expenses (LAE)

The net liabilities stated for unpaid claims and for expenses of investigation and adjustment of unpaid claims are based upon (i) the accumulation of case estimates for losses reported prior to the close of the accounting period on direct business written; (ii) estimates received from ceding reinsurers and insurance pools and associations; (iii) estimates of unreported losses based on past experience; (iv) estimates based on experience of expenses for investigating and adjusting claims; and (v) the current state of the law and coverage litigation. These liabilities are subject to the impact of changes in claim amounts and frequency and other factors. We have not reduced liabilities for unpaid losses and LAE for reinsurance recoverables; such recoverables are recorded separately as assets. Changes in estimates of the liabilities for losses and LAE are reflected in the Consolidated Statements of Earnings in the period in which determined. In spite of the variability inherent in such estimates, we believe that the liabilities for unpaid losses and LAE are adequate.

Premium and Receivables

We earn insurance premium written over the terms of the policies on a pro rata basis. Unearned premium represents that portion of premium written which is applicable to the unexpired terms of policies in force. On reinsurance assumed from other insurance companies or written through various underwriting organizations, we base unearned premium on reports received from such companies and organizations. We provide insurance and related services to individuals and small commercial accounts throughout the United States and offer a variety of payment plans. We establish an allowance for doubtful accounts based on the relationship, on a policy basis, between receivables and unearned premium, or an aging analysis of past due balances. We charge off premium due from insureds if not collected within 90 days of the policies' expiration or cancellation dates. However, even after we charge off premium, attempts to collect the premium continue.

Income Taxes

We file a consolidated federal income tax return, which includes all 80% and greater owned U.S. subsidiaries. We and our 80% and greater owned subsidiaries are parties to a tax allocation agreement, which designates how members of the tax group share tax payments. In general, each subsidiary agrees to pay us taxes computed on a separate company taxable income basis. We agree to pay each subsidiary for the tax benefit, if any, of net losses used by other members of the consolidated group.

We calculate deferred income taxes using the “asset and liability method.” Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax basis and are measured using enacted tax rates. We recognize deferred tax assets if it is more likely than not that a benefit will be realized. We aggregate current and deferred tax assets and liabilities on the Consolidated Balance Sheets.

Property and Equipment

We report property and equipment balances at cost less accumulated depreciation. Property and equipment, which consists of land, buildings, leasehold improvements, computer equipment, capitalized software and furniture and fixtures, consisted of the following balances as of December 31, 2016 ($ in millions):

	Gross Asset		Accumulated Depreciation			Net Asset
Real estate related	$	69.5	$	(7.2	)	$	62.3
Computer equipment & software	82.9		(55.6		)	27.3
Furniture & fixtures	14.3		(7.8		)	6.6
Total	$	166.7	$	(70.6	)	$	96.2

We recognized $2.1 million, net of accumulated depreciation of $1.6 million, of equipment held under capital leases in other assets on the Consolidated Balance Sheets with the related lease obligations recorded in other liabilities. We compute depreciation over the estimated useful lives of the assets using the straight-line method. Property and equipment is a separate line item on the Consolidated Balance Sheets and we allocate the related expenses, including amortization of assets recorded under capital leases, to one or more of the following line items on the Consolidated Statements of Earnings depending on the asset: "Losses and loss adjustment expenses," "Commissions and other underwriting expenses," "Corporate general and administrative expenses" or "Other expenses."

Benefit Plans

We provide retirement benefits to qualified employees and healthcare and life insurance benefits to eligible retirees. We also provide post-employment benefits to former or inactive employees (primarily those on disability) who were not deemed retired under other company plans. The projected future cost of providing these benefits is expensed over the period the employees earn such benefits.

Recently Adopted Accounting Standards

In May 2015 the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) related to the disclosure for short-duration contracts. The guidance requires additional disclosures related to the liability for unpaid claims and claim adjustment expenses in an effort to increase transparency and comparability. We adopted this standard retrospectively as of January 1, 2016. See Note 10 – Insurance Reserves to the Consolidated Financial Statements for these required disclosures.

In April 2015 the FASB issued an ASU related to the presentation of debt issuance costs. The guidance requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. We adopted this standard retrospectively as of January 1, 2016.

The following table illustrates the effect of adopting this standard on the Consolidated Balance Sheets ($ in millions):

	December 31, 2015
	As Reported		As Adjusted		Difference
Other assets	$	11.9	$	10.3	$	(1.6	)
Total assets	2,386.8		2,385.1		(1.6		)
Long-term debt	275.0		273.4		(1.6		)
Total liabilities	1,699.2		1,697.5		(1.6		)
Total liabilities and shareholders' equity	2,386.8		2,385.1		(1.6		)

In August 2014, the FASB issued an ASU related to an entity's ability to continue as a going concern. The guidance requires management to perform an assessment of an entity's ability to continue as a going concern within one year after the date that the financial statements are issued as well as disclose going concern uncertainties in the financial statements. We adopted this standard as of December 31, 2016.

Recently Issued Accounting Standards

In October 2016 the FASB issued an ASU related to the recognition of income tax on intra-entity transfers of assets other than inventory. The guidance requires the income tax to be recognized when the transfer occurs rather than when the asset is sold to an outside party. The standard is effective for annual periods beginning after December 15, 2017, and interim periods within the year of adoption, and is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We do not expect the adoption of this standard to have a material impact on our financial condition or results of operations.

In June 2016 the FASB issued an ASU related to the accounting for credit losses. The guidance generally requires credit losses on available-for-sale debt securities to be recognized as an allowance rather than as a reduction to the amortized cost of a security. The standard is effective for fiscal periods beginning after December 15, 2019, and interim periods within the year of adoption, with prospective application of the ASU required for debt securities for which an other-than-temporary impairment has been recognized before the implementation date. We do not expect the adoption of this standard to have a material impact on our financial condition or results of operations.

In March 2016 the FASB issued an ASU related to the accounting for employee share-based payments. The guidance addresses the recognition, presentation and classification of awards, forfeitures and shares withheld for tax purposes. The standard is effective for fiscal periods beginning after December 15, 2016, with each provision having a different application method. We do not expect the adoption of this standard to have a material impact on our financial condition or results of operations.

In February 2016 the FASB issued an ASU related to the accounting for leases. The guidance requires lessees to recognize lease assets and liabilities on the balance sheet. The standard is effective for fiscal years beginning after December 15, 2018, and is to

be applied retrospectively, with an option to use a modified retrospective approach for leases which commenced prior to the effective date of this ASU. We are still evaluating the impact this ASU will have on the Company's consolidated financial statements.

In January 2016 the FASB issued an ASU amending the guidance on classifying and measuring financial instruments. The guidance requires equity securities to be measured at fair value and changes in that fair value to be recognized through net income. The standard is effective for fiscal years beginning after December 15, 2017, with a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. We currently record equity securities at fair value and as of December 31, 2016, we have $8.9 million net unrealized gains, net of tax, recognized as a component of other comprehensive income.

In May 2014 the FASB issued an ASU related to the accounting for revenue from contracts with customers. Insurance contracts have been excluded from the scope of the guidance. In August 2015 the FASB issued an ASU to defer the effective date from fiscal years beginning after December 15, 2016, to fiscal years beginning after December 15, 2017. We do not expect the adoption of this standard to have a material impact on our financial condition or results of operations. As an insurance-entity, we are largely exempt from the provisions of this standard, with only fee income totaling $107.4 million for the year ending December 31, 2016, subject to this new standard.

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Fair Value

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

Fair values of instruments are based on:

(i) quoted prices in active markets for identical assets (Level 1);

(ii) quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs are observable in active markets (Level 2); or

(iii) valuations derived from valuation techniques in which one or more significant inputs are unobservable in the marketplace (Level 3).

The following tables present, for each of the fair value hierarchy levels, our assets and liabilities for which we report fair value on a recurring basis ($ in thousands):

	Fair Value
December 31, 2016	Level 1			Level 2			Level 3			Total
Cash and cash equivalents	$	92,800		$	0		$	0		$	92,800
Fixed maturity securities:
U.S. government	62,480			5			0			62,485
State and municipal	0			472,471			3,860			476,331
Mortgage-backed securities:
Residential	0			340,367			0			340,367
Commercial	0			69,801			0			69,801
Total mortgage-backed securities	0			410,169			0			410,169
Asset-backed securities	0			37,196			412			37,608
Corporates	0			402,909			666			403,575
Total fixed maturities	62,480			1,322,749			4,938			1,390,167
Equity securities	90,640			0			0			90,640
Short-term investments	769			2,139			0			2,907
Total cash and investments	$	246,689		$	1,324,888		$	4,938		$	1,576,514
Percentage of total cash and investments	15.6		%	84.0		%	0.3		%	100.0		%
December 31, 2015
Cash and cash equivalents	$	62,483		$	0		$	0		$	62,483
Fixed maturity securities:
U.S. government	64,638			32			0			64,669
State and municipal	0			479,656			10			479,666
Mortgage-backed securities:
Residential	0			334,784			0			334,784
Commercial	0			70,224			0			70,224
Total mortgage-backed securities	0			405,008			0			405,008
Asset-backed securities	0			54,018			0			54,018
Corporates	0			376,582			1,524			378,105
Total fixed maturities	64,638			1,315,295			1,534			1,381,467
Equity securities	89,935			0			0			89,935
Short-term investments	0			4,651			0			4,651
Total cash and investments	$	217,056		$	1,319,946		$	1,534		$	1,538,536
Percentage of total cash and investments	14.1		%	85.8		%	0.1		%	100.0		%

We do not report our long-term debt at fair value in the Consolidated Balance Sheets. The $278.7 million and $281.6 million fair value of our long-term debt at December 31, 2016, and December 31, 2015, respectively, would be included in Level 2 of the fair value hierarchy if it were reported at fair value.

Level 1 includes cash and cash equivalents, U.S. Treasury securities, an exchange-traded fund and equities invested in a rabbi trust which funds our Supplemental Employee Retirement Plan (SERP). Level 2 includes securities whose fair value was determined using observable market inputs. Level 3 securities are comprised of (i) securities for which there is no active or inactive market for similar instruments; (ii) securities whose fair value is determined based on unobservable inputs; and (iii) securities, other than those backed by the U.S. Government, that are not rated by a nationally recognized statistical rating organization (NRSRO). We recognize transfers between levels at the beginning of the reporting period.

A third party nationally recognized pricing service provides the fair value of securities in Level 2. A summary of the significant valuation techniques and market inputs for each class of security follows:

U.S. Government: In determining the fair value for U.S. Government securities we use the market approach. The primary inputs to the valuation include reported trades, dealer quotes for identical or similar assets in markets that are not active, benchmark yields, credit spreads, reference data and industry and economic events.

State and municipal: In determining the fair value for state and municipal securities we use the market approach. The primary inputs to the valuation include reported trades, dealer quotes for identical or similar assets in markets that are not active, benchmark yields, credit spreads, reference data and industry and economic events.

Mortgage-backed securities: In determining the fair value for mortgage-backed securities we use the market approach and to a lesser extent the income approach. The primary inputs to the valuation include reported trades, dealer quotes for identical or similar assets in markets that are not active, benchmark yields, credit spreads, reference data, industry and economic events and monthly payment information.

Asset-backed securities: In determining the fair value for asset-backed securities we use the market approach and to a lesser extent the income approach. The primary inputs to the valuation include reported trades, dealer quotes for identical or similar assets in markets that are not active, benchmark yields, credit spreads, reference data, industry and economic events, monthly payment information and collateral performance.

Corporate: In determining the fair value for corporate securities we use the market approach. The primary inputs to the valuation include reported trades, dealer quotes for identical or similar assets in markets that are not active, benchmark yields, credit spreads (for investment grade securities), observations of equity and credit default swap curves (for high-yield corporates), reference data and industry and economic events.

We review the third party pricing methodologies quarterly and test for significant differences between the market price used to value the security and recent sales activity.

The following tables present the progression in the Level 3 fair value category ($ in thousands):

Twelve months ended December 31, 2016	State and Municipal			Corporates			Asset-Backed Securities			Total
Balance at beginning of period	$	10		$	1,524		$	0		$	1,534
Total (lossses) gains, unrealized or realized
Included in net earnings	(25		)	12			0			(13		)
Included in other comprehensive income	(10		)	(60		)	3			(67		)
Purchases	0			0			620			620
Settlements	(10		)	(810		)	(209		)	(1,029		)
Transfers in	3,894			0			1,338			5,232
Transfers out	0			0			(1,339		)	(1,339		)
Balance at end of period	$	3,860		$	666		$	412		$	4,938
Twelve months ended December 31, 2015
Balance at beginning of period	$	0		$	3,134		$	150		$	3,285
Total (losses) gains, unrealized or realized
Included in net earnings	(0		)	(71		)	0			(72		)
Included in other comprehensive income	0			(80		)	0			(80		)
Purchases	0			0			0			0
Settlements	0			(1,112		)	(150		)	(1,263		)
Transfers in	10			0			0			10
Transfers out	0			(347		)	0			(347		)
Balance at end of period	$	10		$	1,524		$	0		$	1,534

Of the $4.9 million fair value of securities in Level 3 at December 31, 2016, which consisted of sevensecurities, we priced three based on non-binding broker quotes, oneprice was provided by our unaffiliated money manager and threesecurities, which were included in Level 3 because they were not rated by a NRSRO, were priced by a nationally recognized pricing service.

One security was transferred from Level 2 into Level 3 during the first quarter of 2016 because a price could not be determined using observable market inputs. However, during the third quarter of 2016, a price was obtained using observable market inputs and the security was transferred back into Level 2. Three securities during 2016 were transferred from Level 2 into Level 3 because they were no longer rated by a NRSRO. There were no transfers of securities between Levels 1 and 2 during 2016. During 2015one security was transferred from Level 2 into Level 3 because it was no longer rated by a NRSRO, and one security was transferred from Level 3 into Level 2 because its fair value was determinable using observable market inputs. There were no transfers of securities between Levels 1 and 2 during 2015.

The gains or losses included in net earnings are included in the line item "Net realized gains on investments" in the Consolidated Statements of Earnings. We recognize the net gains or losses included in other comprehensive income in the line item "Unrealized gains (losses) on investments, net" in the Consolidated Statements of Comprehensive Income and the line item "Change in unrealized gain on investments" or the line item "Change in non-credit component of impairment losses on fixed maturities" in the Consolidated Statements of Changes in Shareholders’ Equity.

The following table presents the carrying value and estimated fair value of our financial instruments ($ in thousands):

	December 31, 2016				December 31, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Cash and cash equivalents	$	92,800	$	92,800	$	62,483	$	62,483
Available-for-sale securities:
Fixed maturities	1,390,167		1,390,167		1,381,467		1,381,467
Equity securities	90,640		90,640		89,935		89,935
Short-term investments	2,907		2,907		4,651		4,651
Total cash and investments	$	1,576,514	$	1,576,514	$	1,538,536	$	1,538,536
Liabilities:
Long-term debt	$	273,591	$	278,726	$	273,383	$	281,581

Refer to Note 3 – Investments to the Consolidated Financial Statements for additional information on investments and Note 4 – Long-Term Debt to the Consolidated Financial Statements for additional information on long-term debt.

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Investments

12 Months Ended

Dec. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

We consider all fixed maturity securities “available for sale” and report them at fair value with net unrealized gains or losses reported after-tax (net of any valuation allowance) as a component of accumulated other comprehensive income within shareholders' equity. The proceeds from sales of securities for the twelve months ended December 31, 2016, were $312.3 million, and are net of $0.8 million of receivable for securities sold during 2016 that had not settled at December 31, 2016. The proceeds from sales of securities for the twelve months ended December 31, 2015, were $341.3 million. The proceeds from sales of securities for the twelve months ended December 31, 2014, were $250.8 million and are net of $4.5 million of receivable for securities sold during 2014 that had not settled at December 31, 2014.

Gross gains of $6.2 million, $7.2 million and $5.1 million were realized on sales of available for sale securities during the years ended 2016, 2015 and 2014, respectively. Gross losses of $2.7 million, $3.2 million and $0.7 million were realized on sales of available for sale securities during the years ended 2016, 2015 and 2014, respectively. Gains or losses on securities are determined on a specific identification basis.

Summarized information for the major categories of our investment portfolio follows ($ in thousands):

December 31, 2016	Amortized Cost or Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		OTTI Recognized in Accumulated OCI(1)
Fixed maturities:
U.S. government	$	62,808	$	55	$	(377	)	$	62,485	$	0
State and municipal	477,834		2,313		(3,816		)	476,331		(51		)
Mortgage-backed securities:
Residential	343,095		2,306		(5,034		)	340,367		(1,967		)
Commercial	70,676		63		(939		)	69,801		0
Total mortgage-backed securities	413,772		2,369		(5,972		)	410,169		(1,967		)
Asset-backed securities	37,562		93		(47		)	37,608		(8		)
Corporates	400,685		4,389		(1,499		)	403,575		(41		)
Total fixed maturities	1,392,660		9,219		(11,711		)	1,390,167		(2,068		)
Equity securities	77,013		13,627		0			90,640		0
Short-term investments	2,909		0		(2		)	2,907		0
Total	$	1,472,582	$	22,846	$	(11,713	)	$	1,483,714	$	(2,068	)
December 31, 2015
Fixed maturities:
U.S. government	$	64,849	$	103	$	(282	)	$	64,669	$	0
State and municipal	472,402		7,393		(129		)	479,666		(51		)
Mortgage-backed securities:
Residential	333,554		3,678		(2,448		)	334,784		(2,374		)
Commercial	71,137		16		(929		)	70,224		0
Total mortgage-backed securities	404,691		3,694		(3,377		)	405,008		(2,374		)
Asset-backed securities	54,106		50		(138		)	54,018		(8		)
Corporates	385,462		1,281		(8,638		)	378,105		(61		)
Total fixed maturities	1,381,510		12,521		(12,564		)	1,381,467		(2,495		)
Equity securities	78,815		11,120		0			89,935		0
Short-term investments	4,656		0		(4		)	4,651		0
Total	$	1,464,981	$	23,640	$	(12,568	)	$	1,476,053	$	(2,495	)
(1) The total non-credit portion of OTTI recognized in Accumulated OCI reflecting the original non-credit loss at the time the credit impairment was determined.

The following tables set forth the amount of unrealized loss by investment category and length of time that individual securities have been in a continuous unrealized loss position ($ in thousands):

	Less than 12 Months								12 Months or More
December 31, 2016	Number of Securities with Unrealized Losses	Fair Value		Gross Unrealized Losses			Unrealized Losses as % of Cost		Number of Securities with Unrealized Losses	Fair Value		Gross Unrealized Losses			Unrealized Losses as % of Cost
Fixed maturities:
U.S. government	31	$	47,640	$	(377	)	0.8	%	0	$	0	$	0		0.0	%
State and municipal	146	303,428		(3,816		)	1.2	%	0	0		0			0.0	%
Mortgage-backed securities:
Residential	381	225,117		(4,559		)	2.0	%	40	11,891		(474		)	3.8	%
Commercial	14	38,002		(788		)	2.0	%	7	26,537		(150		)	0.6	%
Total mortgage-backed securities	395	263,119		(5,347		)	2.0	%	47	38,428		(625		)	1.6	%
Asset-backed securities	9	7,836		(46		)	0.6	%	1	519		(1		)	0.1	%
Corporate	98	145,089		(1,272		)	0.9	%	7	7,745		(227		)	2.8	%
Total fixed maturities	679	767,112		(10,859		)	1.4	%	55	46,693		(852		)	1.8	%
Equity securities	0	0		0			0.0	%	0	0		0			0.0	%
Short-term investments	3	2,907		(2		)	0.1	%	0	0		0			0.0	%
Total	682	$	770,019	$	(10,861	)	1.4	%	55	$	46,693	$	(852	)	1.8	%
December 31, 2015
Fixed maturities:
U.S. government	18	$	36,024	$	(241	)	0.7	%	4	$	4,687	$	(41	)	0.9	%
State and municipal	27	54,680		(129		)	0.2	%	0	0		0			0.0	%
Mortgage-backed securities:
Residential	205	133,814		(1,436		)	1.1	%	64	39,001		(1,012		)	2.5	%
Commercial	9	28,733		(349		)	1.2	%	10	34,169		(580		)	1.7	%
Total mortgage-backed securities	214	162,547		(1,785		)	1.1	%	74	73,170		(1,592		)	2.1	%
Asset-backed securities	36	35,313		(132		)	0.4	%	2	1,153		(7		)	0.6	%
Corporate	172	239,440		(7,149		)	2.9	%	12	14,373		(1,488		)	9.4	%
Total fixed maturities	467	528,003		(9,436		)	1.8	%	92	93,384		(3,128		)	3.2	%
Equity securities	0	0		0			0.0	%	0	0		0			0.0	%
Short-term investments	2	4,651		(4		)	0.1	%	0	0		0			0.0	%
Total	469	$	532,654	$	(9,440	)	1.7	%	92	$	93,384	$	(3,128	)	3.2	%

The determination of whether unrealized losses are “other-than-temporary” requires judgment based on subjective as well as objective factors. Factors we considered and resources we used in our determination include:

• whether the unrealized loss is credit-driven or a result of changes in market interest rates;

• the length of time the security’s market value has been below its cost;

• the extent to which fair value is less than cost basis;

• the intent to sell the security;

• whether it is more likely than not that there will be a requirement to sell the security before its anticipated recovery;

• historical operating, balance sheet and cash flow data contained in issuer SEC filings;

• issuer news releases;

• near-term prospects for improvement in the issuer and/or its industry;

• industry research and communications with industry specialists; and

• third-party research and credit rating reports.

We regularly evaluate for potential impairment each security position that has either of the following: a fair value of less than 95% of its book value or an unrealized loss that equals or exceeds $100,000.

The following table summarizes those securities, excluding the rabbi trust, with unrealized gains or losses:

	December 31, 2016		December 31, 2015
Number of positions held with unrealized:
Gains	527		602
Losses	737		561
Number of positions held that individually exceed unrealized:
Gains of $500,000	1		2
Losses of $500,000	0		0
Percentage of positions held with unrealized:
Gains that were investment grade	85	%	94	%
Losses that were investment grade	97	%	89	%
Percentage of fair value held with unrealized:
Gains that were investment grade	84	%	95	%
Losses that were investment grade	97	%	88	%

The following table sets forth the amount of unrealized losses, excluding the rabbi trust, by age and severity at December 31, 2016, ($ in thousands):

Age of Unrealized Losses	Fair Value of Securities with Unrealized Losses		Total Gross Unrealized Losses			Less Than 5%*			5% - 10%*			Total Gross Greater Than 10%*
Three months or less	$	643,988	$	(7,965	)	$	(7,922	)	$	(43	)	$	0
Four months through six months	117,157		(2,766		)	(2,586		)	(180		)	0
Seven months through nine months	5,039		(80		)	(80		)	0			0
Ten months through twelve months	3,836		(51		)	(51		)	0			0
Greater than twelve months	46,693		(852		)	(698		)	(74		)	(81		)
Total	$	816,712	$	(11,713	)	$	(11,336	)	$	(297	)	$	(81	)

* As a percentage of amortized cost or cost.    

The change in unrealized gains (losses) on securities included the following ($ in thousands):

	Pre-tax
December 31, 2016	Fixed  Maturities			Equity  Securities			Short-Term Investments			Tax  Effects			Net
Unrealized holding (losses) gains on securities arising during the period	$	(2,153	)	$	5,359		$	(0	)	$	(1,122	)	$	2,084
Realized (gains) losses included in net earnings	(671		)	(2,851		)	3			1,232			(2,287		)
Impairment losses recognized in net earnings	375			0			0			(131		)	243
Change in unrealized, net	$	(2,449	)	$	2,508		$	2		$	(21	)	$	40
December 31, 2015
Unrealized holding losses on securities arising during the period	$	(18,699	)	$	(3,388	)	$	(4	)	$	7,732		$	(14,359	)
Realized gains included in net earnings	(2,064		)	(2,039		)	(0		)	1,436			(2,667		)
Impairment losses recognized in net earnings	1,294			0			0			(453		)	841
Change in unrealized, net	$	(19,469	)	$	(5,427	)	$	(4	)	$	8,715		$	(16,185	)
December 31, 2014
Unrealized holding gains on securities arising during the period	$	13,174		$	1,440		$	4		$	(5,116	)	$	9,502
Realized gains included in net earnings	(3,137		)	(1,303		)	(5		)	1,556			(2,889		)
Impairment losses recognized in net earnings	160			0			0			(56		)	104
Change in unrealized, net	$	10,198		$	137		$	(1	)	$	(3,617	)	$	6,717

For fixed maturity securities that are other-than-temporarily impaired, we assess our intent to sell and the likelihood that we will be required to sell the security before recovery of our amortized cost. If a fixed maturity security is considered other-than-temporarily impaired but we do not intend to and are not more than likely to be required to sell the security before our recovery to amortized cost, the amount of the impairment is separated into a credit loss component and the amount due to all other factors. The excess of the amortized cost over the present value of the expected cash flows determines the credit loss component of an impairment charge on a fixed maturity security. The present value is determined using the best estimate of cash flows discounted at (i) the effective interest rate implicit at the date of acquisition for non-structured securities; or (ii) the book yield for structured securities. The techniques and assumptions for determining the best estimate of cash flows vary depending on the type of security. We recognize the credit loss component of an impairment charge in net earnings and the non-credit component in accumulated other comprehensive income. If we intend to sell or will, more likely than not, be required to sell a security, the entire amount of the impairment is treated as a credit loss.

For our securities held with unrealized losses, we believe, based on our analysis, that we will recover our cost basis in these securities and we do not intend to sell the securities nor is it more likely than not that there will be a requirement to sell the securities before they recover in value.

The following table is a progression of credit losses on fixed maturity securities that were bifurcated between a credit and non-credit component ($ in thousands):

	2016			2015
Balance at beginning of year	$	683		$	852
Reductions for securities sold and paydowns	(127		)	(168		)
Balance at end of year	$	557		$	683

The table below sets forth the scheduled maturities of fixed maturity securities at December 31, 2016, based on their fair values ($ in thousands). We report securities that do not have a single maturity date at average maturity. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers.

	Fair Value								Amortized Cost
Maturity	Securities with Unrealized Gains		Securities with Unrealized Losses		Securities with No Unrealized Gains or Losses		All Fixed Maturity Securities		All Fixed Maturity Securities
One year or less	$	84,529	$	27,794	$	2,500	$	114,823	$	114,372
After one year through five years	244,604		346,357		1,557		592,519		591,872
After five years through ten years	102,369		129,751		1,167		233,287		233,404
After ten years	1,763		0		0		1,763		1,679
Mortgage- and asset-backed securities	137,873		309,903		0		447,776		451,333
Total	$	571,138	$	813,805	$	5,224	$	1,390,167	$	1,392,660

Net Investment Income

The following table shows investment income earned and investment expenses incurred ($ in thousands):

	Twelve months ended December 31,
	2016			2015			2014
Gross investment income:
Interest income on fixed maturities, cash and cash equivalents	$	35,528		$	36,871		$	35,596
Dividends on equity securities	2,231			2,194			2,245
Gross investment income	37,759			39,065			37,841
Investment expenses	(2,222		)	(2,265		)	(2,211		)
Net investment income	$	35,537		$	36,800		$	35,629

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Long-Term Debt

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

Long-term Debt

Long-Term Debt

	December 31,
($ in thousands)	2016		2015
Principal	$	275,000	$	275,000
Unamortized debt issuance costs	1,409		1,617
Long-term debt less unamortized debt issuance costs	$	273,591	$	273,383

In September 2012 we issued $275 million principal of senior notes due September 2022 (the “5.0% Senior Notes”). The 5.0% Senior Notes accrue interest at 5.0%, payable semiannually. At the time we issued the 5.0% Senior Notes, we capitalized $2.2 million of debt issuance costs, which we are amortizing over the term of the 5.0% Senior Notes. We calculated the December 31, 2016, fair value of $278.7 million using a 228 basis point spread to the 10-year U.S. Treasury Note of 2.446%.

We paid interest on long-term debt of $13.8 million for each of the years ended December 31, 2016, 2015 and 2014.

In August 2014 we renewed our agreement for a $50 millionthree-year revolving credit facility (the “Credit Agreement”) that requires us to meet certain financial and other covenants. We are currently in compliance with all covenants under the Credit Agreement, and as of December 31, 2016, there were no borrowings outstanding against it.

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Income Taxes

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

In the years 2016, 2015 and 2014, we paid $6.7 million, $28.5 million and $20.9 million, respectively, in taxes. The following is a reconciliation of income taxes at the statutory rate of 35.0% to the effective provision for income taxes as shown in the Consolidated Statements of Earnings ($ in thousands):

	Twelve months ended December 31,
	2016			2015			2014
Earnings before income taxes	$	62,132		$	74,832		$	83,138
Income taxes at statutory rate	21,746			26,191			29,098
Effect of:
Dividends-received deduction	(466		)	(458		)	(469		)
Tax-exempt interest	(2,456		)	(2,713		)	(2,752		)
Other	223			331			59
Provision for income taxes as shown on the Consolidated Statements of Earnings	$	19,047		$	23,351		$	25,936
GAAP effective tax rate	30.7		%	31.2		%	31.2		%

The total income tax provision consists of ($ in thousands):

	2016		2015		2014
Current	$	14,782	$	23,133	$	25,342
Deferred	4,265		218		594
Provision for income taxes	$	19,047	$	23,351	$	25,936

Deferred income tax assets and liabilities reflect temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes. The significant components of deferred tax assets and liabilities included in the Consolidated Balance Sheets were as follows ($ in thousands):

	As of December 31,
	2016			2015
Deferred tax assets:
Discount on loss reserves	$	4,853		$	5,344
Unearned premium reserve	42,844			42,788
Bad debts	4,972			5,385
Accrued bonuses	2,250			1,863
Deferred compensation	6,152			5,827
Long-term incentive compensation	814			1,081
Other	5,089			4,681
Gross deferred tax assets	66,974			66,969
Valuation allowance for deferred tax assets	(326		)	(166		)
Total deferred tax assets	66,648			66,803
Deferred tax liabilities:
Deferred policy acquisition costs	(31,897		)	(32,605		)
Investment securities – unrealized gains	(3,896		)	(3,875		)
Fixed assets	(5,037		)	0
Other	(1,405		)	(1,592		)
Total deferred tax liabilities	(42,235		)	(38,072		)
Net deferred tax assets	24,413			28,731
Current income tax (payable) receivable	(2,778		)	5,195
Current and deferred income taxes	$	21,635		$	33,926

An analysis is performed on a quarterly basis to determine if there is sufficient evidence that it is more likely than not that the deferred tax assets will be recognized for tax purposes. The evidence that is considered in assessing the need for a valuation allowance includes: (i) sufficient future taxable income; (ii) sufficient ordinary and capital taxable income in carryback periods; (iii) the reversals of existing taxable temporary differences; and (iv) tax planning strategies that could be utilized to accelerate the recognition of capital gains in the future. Based on this evaluation, it is management’s belief the only valuation allowance required at December 31, 2016, and December 31, 2015, relates to a net operating loss carryover generated by an inactive company that previously filed on a separate company basis. In 2016 we purchased the remaining 49% of this company’s stock resulting in their inclusion in the consolidated income tax return. Due to the limitations that will apply to utilizing the subsidiary’s net operating loss, the valuation allowance equals 100% of the subsidiary’s net operating loss, which will start expiring in the year 2028.

We did not have any gross unrecognized tax benefits that would exceed a materiality threshold and therefore, there was no reduction to Retained Earnings in our Consolidated Balance Sheets at January 1, 2016. The gross unrecognized tax benefit did not exceed the materiality threshold as of December 31, 2016.

The Company is not currently under examination by the IRS and the statute of limitations has expired for all years prior to 2013.

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Computation Of Earnings Per Share

12 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Computation of Earnings per Share

Computation of Net Earnings per Share

The following table illustrates our computations of basic and diluted net earnings per common share ($ in thousands, except per share figures):

	Twelve months ended December 31,
	2016		2015		2014
Net earnings	$	43,085	$	51,481	$	57,201
Average basic shares outstanding	11,018		11,334		11,440
Basic net earnings per share	$	3.91	$	4.54	$	5.00
Average basic shares outstanding	11,018		11,334		11,440
Restricted stock not vested	26		16		37
Dilutive effect of assumed option exercises	0		0		1
Dilutive effect of Performance Share Plan	57		67		84
Average diluted shares outstanding	11,101		11,417		11,562
Diluted net earnings per share	$	3.88	$	4.51	$	4.95

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Share-Based Compensation

12 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Share-Based Compensation

We established the Amended and Restated 2013 Stock Incentive Plan (the “2013 Plan”), which was approved by the Company’s shareholders on May 21, 2013. Under the 2013 Plan, 750,000 shares are authorized and reserved for issuance. Upon the approval by the shareholders of the 2013 Plan, we became prohibited from issuing any further grants under the Restricted Stock Plan, Directors’ Plan, Performance Share Plan, or Stock Option Plan (collectively, the "Prior Plans"). However, all outstanding awards under the Prior Plans remain outstanding and will continue to be administered and settled with the applicable provisions of the Prior Plans. We have a policy of issuing new stock for shares issued under the 2013 Plan.

The number of shares issued, net of forfeitures, by plan, for share-based compensation arrangements was as follows:

	2016	2015		2014
	2013 Plan	2013 Plan	Prior Plans	2013 Plan	Prior Plans
Restricted Stock	0	(1,613)	0	46,328	0
Non-employee Directors’ Stock	7,596	7,013	0	8,016	0
Performance Shares	24,123	0	37,155	0	55,245
Total	31,719	5,400	37,155	54,344	55,245

The amount of total compensation cost for share-based compensation arrangements was as follows ($ in thousands):

	Twelve months ended December 31,
	2016				2015				2014
	Expense Recognized in Earnings		Tax Benefit		Expense Recognized in Earnings		Tax Benefit		Expense Recognized in Earnings		Tax Benefit
Restricted Stock	$	1,037	$	363	$	799	$	280	$	1,126	$	394
Non-employee Directors’ Stock Ownership Plan	600		210		510		178		520		182
Employee Stock Purchase Plan	46		0		45		0		55		0
Performance Shares	661		231		1,795		628		933		327
Total	$	2,343	$	804	$	3,148	$	1,086	$	2,634	$	903

Restricted Stock

On August 5, 2014, the Committee approved the grant of restricted stock to certain officers under the 2013 Plan. A total of 37,244 shares will vest in full on August 5, 2017, with the remaining 7,471 vesting on October 19, 2018. As of December 31, 2016, the weighted-average grant date fair value of these 44,715 shares was $69.54. During the vesting period, the shares of restricted stock will not have voting rights but will accrue dividends, which we will not pay until the shares have vested. We treat the restricted shares as issued and outstanding for calculation of diluted earnings per share only. Until fully vested, we will not consider the shares issued and outstanding for purposes of the basic earnings per share calculation.

Non-employee Directors’ Stock

Shares are issued to non-employee directors on or about June 1 of each year as part of their compensation. We restrict these shares from sale or transfer by any recipient for six months from the grant date. These shares are treated as issued and outstanding for basic and diluted earnings per share calculations.

Performance Shares

The purpose of the Performance Shares is to align further the interest of management with our long-term shareholders by including performance-based compensation, payable in shares of common stock, as a component of an executive’s annual compensation. The Committee administers the Performance Shares and (i) establishes the performance goals, which may include but are not limited to, combined ratio, premium growth, growth within certain geographic areas and earnings per share or return on equity over the course of the upcoming three-year period; (ii) determines the Performance Share participants; (iii) sets the performance share units to be awarded to such participants; and (iv) sets the rate at which performance share units will convert to shares of common stock based upon attainment of the performance goals.

Employee Stock Purchase Plan

Under the employee stock purchase plan (ESPP), all eligible full-time employees may purchase shares of our common stock at a 15% discount to the current market price. Employees may allocate up to 25% of their base salary with a maximum annual participation amount of $25,000. If a participant sells any shares purchased under the ESPP within one year, we preclude that employee from participating in the ESPP for one year from the date of sale. The source of shares issued to participants is treasury shares or authorized but previously unissued shares. The maximum number of shares that we may issue under the ESPP may not exceed 1,000,000, of which we have issued 72,989 as of December 31, 2016. Our ESPP is qualified under Section 423 of the Internal Revenue Code of 1986, as amended. We treat participants’ shares as issued and outstanding for basic and diluted earnings per share calculations.

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Benefit Plans

12 Months Ended

Dec. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Benefit Plans

Benefit Plans

We provide retirement benefits for all eligible employees by matching contributions made on participants' discretionary basis to participants' accounts in our qualified 401(k) Retirement Plan. Eligible employees may contribute up to a maximum of the lesser of $18,000 per year or 25% of the participant's salary in 2016. Participants age 50 or over at the end of the calendar year may make an additional elective deferral contribution of up to $6,000 for 2016. These additional contributions (commonly referred to as catch-up contributions) are not subject to the general limits that apply to 401(k) plans. The matching percentage made by us was 100% of participants' contributions up to a ceiling of 4% and 50% of the next 2% of contributions with a maximum match of $13,250 in 2016. The plan expense was $5.1 million, $4.9 million and $5.1 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Our Supplemental Employee Retirement Plan (SERP) is a non-qualified deferred compensation plan that enables eligible employees to make contributions and to receive employer-matching contributions that the provisions of the 401(k) Retirement Plan or laws preclude due to limits on compensation. We contributed $0.1 million to the SERP for each of the years ended December 31, 2016, 2015 and 2014. We maintain a rabbi trust that includes investments to fund the SERP. As of December 31, 2016, investments in the rabbi trust totaled $2.0 million. We reflected these investments at fair value as equity securities on the Consolidated Balance Sheets.

We maintain a non-qualified deferred compensation plan for certain highly compensated employees, which permits the participants to defer a portion of their salaries and bonuses. The deferred amounts accrue interest at our approximate long-term borrowing rate. The deferred amounts are our general obligation liability and amounted to $17.6 million, $16.6 million and $15.3 million at December 31, 2016, 2015 and 2014, respectively. We credited interest of approximately $0.7 million, $0.6 million and $0.7 million for these same periods.

We also provide post-retirement medical and life insurance benefits to certain eligible retirees. We have determined that the benefits provided under this plan are actuarially equivalent to those benefits provided by the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA). Our calculation of the accumulated post-retirement benefit obligation (APBO) as of December 31, 2016, 2015 and 2014 does not reflect the government subsidy provided by the MMA, other than as reflected in the insured over 65 rates going forward.

Unrecognized actuarial gains of $1.2 million ($0.8 million net of tax) and prior service costs of $0.2 million ($0.1 million net of tax) that have not yet been recognized in net periodic post-retirement benefit costs are included in accumulated other comprehensive income at December 31, 2016. We expect to recognize a $0.1 million actuarial gain and $0.1 million of amortization of prior service costs in net periodic post-retirement benefit income during the fiscal year ending December 31, 2017.

We recognized the unfunded status of the APBO plan of $3.6 million at December 31, 2016, in the Consolidated Balance Sheets. We expect no plan assets to be returned to us during the fiscal year ended December 31, 2017.

The following tables show data related to the APBO plan ($ in thousands):

	2016			2015
Net benefit obligation at beginning of year	$	3,729		$	4,313
Service cost	183			235
Interest cost	132			146
Participant contributions	37			30
Assumption change	44			(280		)
Actuarial gain	(176		)	(425		)
Gross benefits paid	(338		)	(289		)
Net benefit obligation at end of year	$	3,613		$	3,729

The following table discloses the components of net periodic post-retirement benefit cost ($ in thousands):

	2016			2015			2014
Service cost	$	183		$	235		$	198
Interest cost	132			146			150
Amortization of prior service cost	71			71			71
Amortization of net cumulative gain	(114		)	(5		)	(81		)
Net periodic post-retirement benefit cost	$	273		$	447		$	339

The following table discloses discount rates used to determine benefit obligations:

	2016	2015	2014
Discount rate	3.60%	3.70%	3.50%

The weighted average health care cost trend rate used in measuring the accumulated post-retirement benefit cost is 8.0% for 2017, declining to 5.0% in 2038.

The following table discloses the effects of a hypothetical one percentage point increase and the effects of a hypothetical one percentage point decrease in the assumed healthcare trend rate ($ in thousands):

	2016			2015			2014
A one percentage point hypothetical change in the assumed healthcare trend rate would have the following effect on the post-retirement benefit obligations:
1% increase	$	184		$	304		$	396
1% decrease	(162		)	(269		)	(348		)
A one percentage point hypothetical change in the assumed healthcare trend rate would have the following effect on the aggregate of the service and interest cost components of net periodic post-retirement healthcare benefit costs:
1% increase	$	40		$	49		$	40
1% decrease	(34		)	(42		)	(34		)

The following table reconciles the beginning and ending balances of the fair value of plan assets for the years ended December 31, 2016, and 2015 ($ in thousands):

	2016			2015
Fair value of plan assets at beginning of year	$	0		$	0
Employer contributions	301			259
Participant contributions	37			30
Gross benefits paid	(338		)	(289		)
Fair value of plan assets at end of year	$	0		$	0

The following table presents the funded status and the amounts recognized in the Consolidated Balance Sheets ($ in thousands):

	2016			2015
Fair value of plan assets	$	0		$	0
Benefit obligations	(3,613		)	(3,729		)
Funded status at end of year	(3,613		)	(3,729		)
Contributions made after the measurement date	0			0
Unrecognized actuarial net (gain) loss	0			0
Unrecognized prior service cost	0			0
Net amount recognized at end of year	$	(3,613	)	$	(3,729	)

The following table presents the 10-year forecast and best estimate of expected benefit payments ($ in thousands):

	2016			2015			2014
2017	$	295	2016	$	301	2015	$	259
2018	287		2017	280		2016	294
2019	289		2018	281		2017	304
2020	281		2019	294		2018	314
2021	283		2020	287		2019	337
2022-2026	1,549		2021-2025	1,583		2020-2024	1,840
10-Year Total	$	2,983		$	3,026		$	3,348

Our best estimate of contributions expected to be paid to the plan during the fiscal year beginning January 1, 2017, is $0.3 million.

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Quarterly Operating Results (Unaudited)

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Quarterly Operating Results

Quarterly Operating Results (Unaudited)

While we recognize insurance premium on a relatively level basis, claim losses related to adverse weather (snow, hail, hurricanes, tornadoes, etc.) and customer driving behavior may be seasonal. Quarterly results rely heavily on estimates and are not necessarily indicative of results for longer periods.

The following are quarterly results of our consolidated operations for the three years ended December 31, 2016, ($ in thousands, except per share amounts):

2016	1st Quarter		2nd Quarter			3rd Quarter			4th Quarter		Total Year
Revenues	$	370,162	$	375,084		$	378,124		$	415,336	$	1,538,706
Net earnings	7,708		11,015			2,753			21,609		43,085
Net earnings per share:
Basic	$	0.70	$	1.00		$	0.25		$	1.96	$	3.91
Diluted	0.69		0.99			0.25			1.95		3.88
2015
Revenues	$	366,973	$	374,757		$	372,383		$	369,919	$	1,484,032
Net earnings	11,154		13,493			15,737			11,097		51,481
Net earnings per share:
Basic	$	0.98	$	1.18		$	1.39		$	0.99	$	4.54
Diluted	0.97		1.18			1.38			0.99		4.51
2014
Revenues	$	361,613	$	367,954		$	366,160		$	365,982	$	1,461,709
Net earnings	10,327		10,667			14,855			21,352		57,201
Net earnings per share:
Basic	$	0.90	$	0.93		$	1.30		$	1.87	$	5.00
Diluted	0.89		0.92			1.29			1.85		4.95
Net realized gains (losses) on investments amounted to:
	1st Quarter		2nd Quarter			3rd Quarter			4th Quarter		Total Year
2016	$	139	$	(164	)	$	1,282		$	1,887	$	3,145
2015	1,169		214			(410		)	1,835		2,809
2014	645		1,846			1,013			781		4,284

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Insurance Reserves

12 Months Ended

Dec. 31, 2016

Insurance [Abstract]

Insurance Reserves

Insurance Reserves

The following table provides an analysis of changes in the liability for losses and LAE, net of reinsurance ($ in thousands):

	2016			2015			2014
Balance at Beginning of Period
Unpaid losses on known claims	$	237,660		$	235,037		$	221,447
IBNR losses	290,097			277,482			262,660
LAE	142,207			155,658			162,469
Total unpaid losses and LAE	669,965			668,177			646,577
Reinsurance recoverables	(14,694		)	(14,370		)	(14,431		)
Unpaid losses and LAE, net of reinsurance recoverables	655,271			653,808			632,146
Current Activity
Loss and LAE incurred:
Current accident year	1,120,756			1,064,927			1,019,033
Prior accident years	(24,001		)	(28,926		)	(17,405		)
Total loss and LAE incurred	1,096,755			1,036,001			1,001,628
Loss and LAE payments:
Current accident year	(687,554		)	(656,317		)	(602,732		)
Prior accident years	(396,147		)	(378,221		)	(377,235		)
Total loss and LAE payments	(1,083,701		)	(1,034,538		)	(979,967		)
Balance at End of Period
Unpaid losses and LAE, net of reinsurance recoverables	668,325			655,271			653,808
Add back reinsurance recoverables	17,130			14,694			14,370
Total unpaid losses and LAE	685,455			669,965			668,177
Unpaid losses on known claims	238,412			237,660			235,037
IBNR losses	306,641			290,097			277,482
LAE	140,402			142,207			155,658
Total unpaid losses and LAE	$	685,455		$	669,965		$	668,177

The $24.0 millionfavorable reserve development during the twelve months ended December 31, 2016, was primarily due to decreases in severity estimates in Florida bodily injury and personal injury protection coverages related to accident years 2015 and prior, partially offset by increases in severity estimates in California material damage and bodily injury coverages as well as bodily injury coverages in our commercial vehicle product, all related to accident year 2015.

The $28.9 millionfavorable reserve development during the twelve months ended December 31, 2015, was primarily due to decreases in severity estimates in Florida bodily injury coverages and California bodily injury loss adjustment expense estimates, all related to accident years 2013 and 2014.

The $17.4 millionfavorable reserve development during the twelve months ended December 31, 2014, was primarily due to decreases in California property damage severity estimates and in both severity and frequency estimates in Florida bodily injury coverages, all related to accident year 2013.

The following tables provide incurred losses and allocated loss adjustment expenses (ALAE) as well as cumulative paid claims and ALAE, net of reinsurance, for the prior ten accident years for our two largest lines of business. In addition, as of the most recent reporting period, the total of incurred but not reported (IBNR) reserves plus expected development on reported claims and the cumulative number of reported claims are presented ($ in thousands, except severity). The information about incurred and paid claims development for the years ended December 31, 2007 to December 31, 2015 is presented as supplementary information.

	Personal Auto
Accident Year	Incurred losses and ALAE, net of reinsurance recoverable For the years ended December 31,																				IBNR & expected development on reported claims		Cumulative number of reported claims (1)	Severity (2)
	(unaudited)
	2007		2008		2009		2010		2011		2012		2013		2014		2015		2016		2016		2016	2016
2007	$	600,087	$	612,555	$	596,818	$	585,525	$	582,153	$	578,186	$	578,429	$	577,799	$	577,577	$	577,777	$	0	283,087	$	2,041
2008			545,873		533,293		517,125		513,175		511,141		511,490		509,922		509,250		509,058		4		247,202	2,059
2009					497,393		473,328		472,772		471,867		471,714		472,523		473,000		473,359		10		230,828	2,051
2010							541,302		554,167		557,592		559,253		557,625		558,936		557,477		16		270,702	2,059
2011									608,636		633,011		638,400		637,569		638,507		635,905		578		307,904	2,063
2012											739,820		750,522		751,262		751,601		748,166		5,644		360,236	2,061
2013													805,039		805,460		789,428		782,369		11,736		364,784	2,113
2014															807,278		796,084		784,928		21,812		354,013	2,156
2015																	839,059		841,144		41,629		365,037	2,190
2016																			874,326		206,058		343,254	1,947
																	Total		$	6,784,508

Accident Year		Cumulative paid losses and ALAE, net of reinsurance recoverable For the years ended December 31,
		(unaudited)
		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
2007		$	359,059	$	522,711	$	556,520	$	568,792	$	574,082	$	575,600	$	576,656	$	577,147	$	577,383	$	577,640
2008				320,317		453,092		485,866		499,876		505,063		507,822		508,674		508,831		508,960
2009						285,154		408,535		447,178		460,463		465,453		470,032		471,789		473,074
2010								325,911		485,920		527,538		543,884		550,025		554,410		556,781
2011										374,367		554,245		602,523		621,919		629,992		633,861
2012												450,434		655,303		711,636		731,205		739,354
2013														480,464		692,039		744,188		762,770
2014																485,384		694,607		744,687
2015																		530,264		748,850
2016																				554,216
		Total																		$	6,300,193
Outstanding liabilities for unpaid losses and ALAE prior to 2007, net of reinsurance recoverable																				1,230
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance recoverable																				$	485,545
(1)	The cumulative number of reported claims is measured by individual claimant at a coverage level.
(2)	Calculated severity amounts by accident year are based on inception-to-date incurred less IBNR and expected development dollars and reported claims. Note that older accident years are more developed than recent accident years.

	Commercial Vehicle
Accident Year	Incurred losses and ALAE, net of reinsurance recoverable For the years ended December 31,																				IBNR & expected development on reported claims		Cumulative number of reported claims (1)	Severity (2)
	(unaudited)
	2007		2008		2009		2010		2011		2012		2013		2014		2015		2016		2016		2016	2016
2007	$	25,689	$	23,743	$	23,028	$	21,935	$	21,099	$	20,781	$	20,674	$	20,639	$	20,631	$	20,631	$	0	6,356	$	3,246
2008			24,457		21,187		18,960		18,893		18,320		18,045		17,973		17,996		17,996		0		6,595	2,729
2009					35,627		31,903		31,226		28,943		27,598		27,533		27,402		27,385		0		9,059	3,023
2010							41,321		39,149		35,881		34,539		33,397		33,845		33,460		44		11,202	2,983
2011									40,294		39,094		36,202		35,052		35,130		34,507		60		11,497	2,996
2012											51,085		46,950		46,284		46,405		45,832		706		13,118	3,440
2013													62,157		51,438		52,083		51,407		1,123		14,426	3,486
2014															65,724		63,304		64,682		2,128		16,735	3,738
2015																	81,849		84,314		3,271		20,043	4,043
2016																			95,536		29,491		20,309	3,252
																	Total		$	475,750

Accident Year		Cumulative paid losses and ALAE, net of reinsurance recoverable For the years ended December 31,
		(unaudited)
		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
2007		$	9,570	$	15,618	$	17,730	$	19,076	$	20,424	$	20,555	$	20,617	$	20,630	$	20,630	$	20,630
2008				9,095		14,489		16,224		17,331		17,887		17,947		17,948		17,994		17,994
2009						13,463		21,735		25,929		26,734		27,229		27,340		27,350		27,355
2010								16,110		25,904		30,120		32,192		32,690		33,286		33,349
2011										17,398		28,427		32,127		33,495		34,223		34,375
2012												22,273		35,322		41,500		43,623		44,578
2013														23,834		40,038		45,200		47,270
2014																28,628		47,162		55,131
2015																		37,918		63,932
2016																				42,467
		Total																		$	387,082
Outstanding liabilities for unpaid losses and ALAE prior to 2007, net of reinsurance recoverable																				33
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance recoverable																				$	88,700
(1)	The cumulative number of reported claims is measured by individual claimant at a coverage level.
(2)	Calculated severity amounts by accident year are based on inception-to-date incurred less IBNR and expected development dollars and reported claims. Note that older accident years are more developed than recent accident years.

The reconciliation of the net incurred and paid development tables to the liability for unpaid losses and LAE in the consolidated balance sheets is as follows ($ in thousands):

	As of December 31, 2016
Liabilities for unpaid losses and LAE:
Personal Auto	$	485,545
Commercial Vehicle	88,700
Other Lines	7,217
Total liabilities for unpaid losses and LAE, net of reinsurance	581,463
Reinsurance recoverables:
Personal Auto	7,393
Commercial Vehicle	7,941
Other Lines	1,795
Total reinsurance recoverables	17,130
Unallocated loss adjustment expenses	86,862
Gross liability for unpaid losses and LAE	$	685,455

Other Lines includes our roadside assistance coverage, which has been excluded from the Personal Auto triangles as the high frequency and low severity of these claims can distort analysis, as well as Classic Collector.

Incurred but not reported (IBNR) reserves are established for the quarter and year-end based on a quarterly reserve analysis by our actuarial staff. Various standard actuarial tests are applied to subsets of the business at a state, product and coverage basis. Included in the analyses are the following:

• Paid and incurred extrapolation methods utilizing paid and incurred loss development to predict ultimate losses;

• Paid and incurred frequency and severity methods utilizing paid and incurred claims count development and paid and incurred claims cost development to predict ultimate average frequency (claims count per policy or auto insured) or ultimate average severity (cost per claim); and

• Paid and incurred Bornhuetter-Ferguson methods adding expected development to actual paid or incurred experience to project ultimate losses.

For each subset of the business evaluated, each test generates a point estimate based on development factors applied to known paid and incurred losses and claim counts. Selections of development factors are based on historical loss development patterns with adjustment based on professional actuarial judgment where anticipated development patterns vary from those seen historically. Deviations from historical loss development patterns may occur due to changes in items such as claims settlement and payment practices, business mix, coverage limits and deductibles, inflation trends in auto repair and medical costs and legal and regulatory trends affecting claims settlements. This estimation of IBNR requires selection of hundreds of such factors. A single point estimate for the subset being evaluated is then selected from the results of various tests, based on a combination of simple averages of the point estimates of the various tests and selections based on professional actuarial judgment. During recent years, paid methods have been less reliable because of changes in settlement practices, so we have more heavily relied on incurred methods.

As described above, various actuarial methods are utilized to determine reserves that are booked to financials. Weightings of tests and methods at a detailed level may change from evaluation to evaluation based on a number of observations, measures and time elements. On an overall basis, changes to methods and/or assumptions underlying reserve estimations and selections as of December 31, 2016, were not considered material.

The following table provides supplementary information about the average annual percentage payout of incurred losses and ALAE, net of reinsurance:

	Average annual payout of losses and LAE, net of reinsurance
	(unaudited)
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Personal Auto	61.3	%	26.9	%	6.9	%	2.7	%	1.1	%	0.7	%	0.3	%	0.1	%	0.0	%	0.0	%
Commercial Vehicle	47.3	%	30.3	%	12.0	%	5.6	%	3.4	%	1.0	%	0.1	%	0.2	%	0.0	%	0.0	%

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Reinsurance

12 Months Ended

Dec. 31, 2016

Reinsurance Disclosures [Abstract]

Reinsurance

Reinsurance

The following table shows written and earned premium included in earnings for reinsurance assumed and amounts deducted from written and earned premium in connection with reinsurance ceded ($ in thousands):

Year	Direct Written Premium		Reinsurance Assumed		Reinsurance Ceded			Net Written Premium		% of Amount Assumed to Net
2016	$	1,401,378	$	36	$	(8,955	)	$	1,392,459	0.0	%
2015	1,387,864		2		(14,579		)	1,373,287		0.0	%
2014	1,360,807		63		(13,266		)	1,347,604		0.0	%
Year	Direct Earned Premium		Reinsurance Assumed		Reinsurance Ceded			Net Earned Premium		% of Amount Assumed to Net
2016	$	1,403,682	$	34	$	(12,052	)	$	1,391,664	0.0	%
2015	1,360,473		4		(13,913		)	1,346,564		0.0	%
2014	1,337,557		57		(11,679		)	1,325,935		0.0	%

Assumed Reinsurance

Assumed business consists of business assumed from unaffiliated insurance companies and involuntary pools and associations.

We assumed $9.7 million, $10.0 million and $11.1 million, respectively, at December 31, 2016, 2015 and 2014 of unpaid losses and LAE from unaffiliated insurance companies. We assumed less than $1,000 in premium from unaffiliated insurance companies in 2016 and 2015 and none was assumed in 2014.

During the twelve months ended December 31, 2016, 2015 and 2014, we assumed, from involuntary pools and associations, premium and unpaid losses and LAE of less than $0.1 million each.

Ceded Reinsurance

We use excess of loss, catastrophe and extra-contractual loss reinsurance to mitigate the financial impact of large or catastrophic losses. During 2014 and 2015 our catastrophe reinsurance protection was 100% of $55 million in excess of $5 million per event. During 2016 our catastrophe reinsurance protection was $95 million in excess of $5 million per event. The first $10 million of coverage was reinsured at 50% with the remaining layers at 100%. Effective June 1, 2016, we modified our excess of loss reinsurance protection for commercial auto to cover losses up to $500,000 for claims in excess of $500,000 per occurrence. In addition, we added a 75% quota share for our general liability business. Our extra-contractual loss reinsurance provides protection for losses up to $10 million in excess of $5 million for any single extra-contractual loss. We also use reinsurance to mitigate losses on our Classic Collector business.

Premium ceded for the twelve months ended December 31, 2016, includes the return of $5.9 million of unearned premium due to the termination of the previous excess of loss contract. The $1.8 million of ceding commissions associated with this unearned premium was returned to the reinsurers.

Ceded reinsurance for all programs reduced our incurred losses and LAE by $8.0 million, $4.3 million and $3.5 million for the twelve months ended December 31, 2016, 2015 and 2014, respectively.

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Statutory Information

12 Months Ended

Dec. 31, 2016

Insurance [Abstract]

Statutory Information

Statutory Information

Capital and Surplus

Insurance companies are required to file financial statements with state insurance regulatory authorities prepared on an accounting basis prescribed or permitted by such authorities (statutory basis). Net earnings and capital and surplus on a statutory basis were as follows ($ in thousands):

Statutory Net Earnings						Statutory Capital and Surplus
2016		2015		2014		2016		2015
$	62,247	$	61,379	$	67,360	$	669,301	$	659,777

For the twelve-month periods ended December 31, 2016, 2015 and 2014, statutory results differed from net earnings on a GAAP basis primarily due to the amortization of deferred acquisition costs, the basis difference in realized gains and holding company expenses, including interest.

At December 31, 2016, the consolidated amount of statutory capital and surplus necessary to satisfy regulatory requirements as defined by the National Association of Insurance Commissioners' (NAIC) Risk-Based Capital (RBC) calculation was $141.9 million. This amount of statutory capital and surplus represents the Company Action Level (CAL) of minimum surplus. Falling below this level would require a company to prepare and submit an RBC plan to address the deficiency in surplus to the CAL to the commissioner of its state of domicile.

Restrictions on Transfer of Funds and Assets of Subsidiaries

As of December 31, 2016, there are no regulatory restrictions on the payment of dividends to our shareholders. However, our ability to declare and pay dividends will depend on the working capital in the holding company, as well as dividends received from our insurance subsidiaries.

Payments of dividends, loans and advances by our insurance subsidiaries are subject to certain restrictions under various state laws, federal regulations and debt covenants that limit the amount of dividends, loans and advances that can be paid. Under applicable restrictions, the maximum amount of dividends payable in 2017 from our insurance subsidiaries without regulatory approval is approximately $59.3 million. Additional amounts of dividends, loans and advances require regulatory approval.

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Legal and Regulatory Proceedings

12 Months Ended

Dec. 31, 2016

Loss Contingency [Abstract]

Legal and Regulatory Proceedings

Legal and Regulatory Proceedings

From time to time we and our subsidiaries are named as defendants in various lawsuits incidental to our insurance operations. We consider legal actions relating to claims made in the ordinary course of seeking indemnification for a loss covered by the insurance policy in establishing loss and LAE reserves.

We also face in the ordinary course of business lawsuits that seek damages beyond policy limits, commonly known as extra-contractual claims, as well as class action and individual lawsuits that involve issues not unlike those facing other insurance companies and employers. We continually evaluate potential liabilities and reserves for litigation of these types using the criteria established by the Contingencies topic of the FASC. Under this guidance we may only record reserves for a loss if the likelihood of occurrence is probable and we can reasonably estimate the amount. If a material loss is judged to be reasonably possible, we will disclose an estimated range of loss or state that an estimate cannot be made. We consider each legal action using this guidance and record reserves for losses as warranted by establishing a reserve captured within our Consolidated Balance Sheets line items “Unpaid losses and loss adjustment expenses” for extra-contractual claims and “Other liabilities” for class action and other non-claims related lawsuits. We record amounts incurred on the Consolidated Statements of Earnings within “Losses and loss adjustment expenses” for extra-contractual claims and “Other expenses” for class action and other non-claims related lawsuits.

Certain claims and legal actions have been brought against us for which we have accrued no loss, and for which an estimate of a possible range of loss cannot be made under the above rules. While it is not possible to predict the ultimate outcome of these claims or lawsuits, we do not believe they are likely to have a material effect on our financial condition or liquidity. However, losses incurred because of these cases could have a material adverse impact on net earnings in a given period.

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Commitments And Contingencies

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Commitments

Minimum rental commitments under non-cancelable leases with an initial or remaining term of more than one year as of December 31, 2016, were as follows ($ in thousands):

Due In	Operating Leases		Capital Leases
2017	$	4,542	$	722
2018	3,936		711
2019	2,342		698
2020	1,765		333
2021	1,550		202
Thereafter	1,225		0
Total	$	15,360	$	2,666

All of these leases expire within seven years. The most significant leased office spaces are located in Miami, Florida and Cerritos, California, with $4.3 million and $3.9 million, respectively, due over the remaining lease terms.

The operating leases above include leased vehicles. As vehicles are surrendered, they are sold for cash by the lessor. We guarantee that proceeds from sales will be at least equal to the lessor's depreciated book value. Otherwise, we are credited the excess or we pay the deficit. A significant portion of our fleet vehicles, which have minimum lease terms of 367 days, were traded in during the first six months of 2016. The lessor's depreciated book value at December 31, 2016, on the vehicles we lease was $6.3 million, which represents the maximum deficit we would be required to pay if the lessor received no proceeds from the sale. Historically, we have not made any material additional rental payments due to surrendered vehicles. As of December 31, 2016, the current fair market value of the vehicles we lease was approximately $5.0 million.

Lease expense incurred for all leases during the last three years was as follows ($ in thousands):

	Twelve months ended December 31,
	2016		2015		2014
Lease expense	$	6,688	$	9,611	$	10,447

Contingencies

Based on the criteria established by the Contingencies topic of the FASC, we have the following loss contingencies for which we accrue in our financial statements:

•     Legal and regulatory proceedings	Note 13
•     Allowances for uncollectible accounts	Note 15

For each item listed above, please refer to the notes referenced for additional discussion.

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Additional Information

12 Months Ended

Dec. 31, 2016

Additional Information [Abstract]

Additional Information

Additional Information

Allowances for Uncollectible Accounts

Agents’ balances and premium receivable included in the Consolidated Balance Sheets are net of allowances for uncollectible accounts. The provision for such losses is included in commissions and other underwriting expenses. A progression of the aggregate allowance follows ($ in thousands):

	2016			2015			2014
Beginning balance	$	15,385		$	15,510		$	15,884
Provision for losses	17,095			19,080			19,541
Uncollectible amounts written off	(18,273		)	(19,204		)	(19,916		)
Ending balance	$	14,207		$	15,385		$	15,510

Negative Cash Book Balances

Negative cash book balances, included in the line item “Other liabilities” in the Consolidated Balance Sheets, were $40.6 million, $41.4 million and $51.2 million at December 31, 2016, 2015 and 2014, respectively.

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Accumulated Other Comprehensive Income

12 Months Ended

Dec. 31, 2016

Stockholders' Equity Note [Abstract]

Accumulated Other Comprehensive Income

The components of other comprehensive income before and after tax are as follows ($ in thousands):

Twelve months ended December 31, 2016	Before Tax			Income Tax			Net
Accumulated change in post-retirement benefit liability, beginning of period	$	944		$	(331	)	$	614
Effect on other comprehensive income	88			(31		)	57
Accumulated change in post-retirement benefit liability, end of period	1,033			(361		)	671
Accumulated unrealized gains on investments, net, beginning of period	11,072			(3,875		)	7,197
Other comprehensive income before reclassification	3,205			(1,122		)	2,084
Reclassification adjustment for OTTI losses included in net income	375			(131		)	243
Reclassification adjustment for realized gains included in net income	(3,519		)	1,232			(2,287		)
Effect on other comprehensive income	61			(21		)	40
Accumulated unrealized gains on investments, net, end of period	11,133			(3,896		)	7,236
Accumulated other comprehensive income, beginning of period	12,016			(4,206		)	7,811
Change in post-retirement benefit liability	88			(31		)	57
Change in unrealized gains on investments, net	61			(21		)	40
Effect on other comprehensive income	149			(52		)	97
Accumulated other comprehensive income, end of period	$	12,165		$	(4,258	)	$	7,907
Twelve months ended December 31, 2015
Accumulated change in post-retirement benefit liability, beginning of period	$	174		$	(61	)	$	113
Effect on other comprehensive income	771			(270		)	501
Accumulated change in post-retirement benefit liability, end of period	944			(331		)	614
Accumulated unrealized gains on investments, net, beginning of period	35,972			(12,590		)	23,382
Other comprehensive income before reclassification	(22,091		)	7,732			(14,359		)
Reclassification adjustment for OTTI losses included in net income	1,294			(453		)	841
Reclassification adjustment for realized gains included in net income	(4,102		)	1,436			(2,667		)
Effect on other comprehensive income	(24,900		)	8,715			(16,185		)
Accumulated unrealized gains on investments, net, end of period	11,072			(3,875		)	7,197
Accumulated other comprehensive income, beginning of period	36,145			(12,651		)	23,494
Change in post-retirement benefit liability	771			(270		)	501
Change in unrealized gains on investments, net	(24,900		)	8,715			(16,185		)
Effect on other comprehensive income	(24,129		)	8,445			(15,684		)
Accumulated other comprehensive income, end of period	$	12,016		$	(4,206	)	$	7,811

Twelve months ended December 31, 2014	Before Tax			Income Tax			Net
Accumulated change in post-retirement benefit liability, beginning of period	$	(62	)	$	22		$	(40	)
Effect on other comprehensive income	235			(82		)	153
Accumulated change in post-retirement benefit liability, end of period	174			(61		)	113
Accumulated unrealized gains on investments, net, beginning of period	25,638			(8,973		)	16,665
Other comprehensive income before reclassification	14,618			(5,116		)	9,502
Reclassification adjustment for OTTI losses included in net income	160			(56		)	104
Reclassification adjustment for realized gains included in net income	(4,444		)	1,556			(2,889		)
Effect on other comprehensive income	10,334			(3,617		)	6,717
Accumulated unrealized gains on investments, net, end of period	35,972			(12,590		)	23,382
Accumulated other comprehensive income, beginning of period	25,576			(8,952		)	16,624
Change in post-retirement benefit liability	235			(82		)	153
Change in unrealized gains on investments, net	10,334			(3,617		)	6,717
Effect on other comprehensive income	10,569			(3,699		)	6,870
Accumulated other comprehensive income, end of period	$	36,145		$	(12,651	)	$	23,494

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Segment Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Information

Segment Information

We manage our business based on product line and have three operating segments: Personal Auto, Commercial Vehicle and Classic Collector (our reportable segments are Personal Auto and Commercial Vehicle).

Our Personal Auto product provides coverage to individuals for liability to others for bodily injury and property damage and for physical damage to an insured's own vehicle from collision and various other perils. In addition, some states require policies to provide for first party personal injury protection, frequently referred to as no-fault coverage.

Our Commercial Vehicle product provides coverage to businesses for liability to others for bodily injury and property damage and for physical damage to vehicles from collision and various other perils. We primarily target businesses with fleets of 20 or fewer vehicles and average 1.9 vehicles per policy. We avoid businesses that are involved in what we consider to be hazardous operations or interstate commerce.

Our Classic Collector product provides coverage to individuals with classic or antique automobiles for liability to others for bodily injury and property damage and for physical damage to an insured's own vehicle from collision and various other perils.

Expense allocations are based on certain assumptions and estimates primarily related to revenue and volume. Depreciation and amortization expense, related to investments and debt issuance costs, are not allocated to a segment level. Total depreciation and amortization expense for 2016, 2015 and 2014 was $35.0 million, $34.7 million and $32.9 million, respectively.

All segment revenues are generated from external customers and represent the sum of "Earned premium" and "Installment and other fee income." The following table provides revenues by segment and a reconciliation to "Total revenues" as reported on the Consolidated Statements of Earnings ($ in thousands):

	Twelve months ended December 31,
Gross written premium:	2016			2015			2014
Personal Auto	$	1,240,037		$	1,246,492		$	1,237,774
Commercial Vehicle	145,272			126,036			108,640
Classic Collector	16,105			15,339			14,456
Total gross written premium	1,401,414			1,387,866			1,360,870
Ceded reinsurance:
Personal Auto	(4,036		)	(3,301		)	(3,407		)
Commercial Vehicle	(4,098		)	(10,679		)	(9,262		)
Classic Collector	(821		)	(600		)	(597		)
Total ceded reinsurance	(8,955		)	(14,579		)	(13,266		)
Net written premium:
Personal Auto	1,236,001			1,243,191			1,234,367
Commercial Vehicle	141,174			115,357			99,378
Classic Collector	15,284			14,739			13,859
Total net written premium	1,392,459			1,373,287			1,347,604
Change in unearned premium:
Personal Auto	10,401			(17,901		)	(10,506		)
Commercial Vehicle	(10,990		)	(8,395		)	(10,577		)
Classic Collector	(205		)	(427		)	(586		)
Total change in unearned premium	(795		)	(26,723		)	(21,669		)
Earned premium:
Personal Auto	1,246,402			1,225,290			1,223,860
Commercial Vehicle	130,183			106,962			88,801
Classic Collector	15,079			14,312			13,274
Total earned premium	1,391,664			1,346,564			1,325,935
Installment and other fee income:
Personal Auto	97,085			88,738			88,493
Commercial Vehicle	10,276			8,015			6,749
Classic Collector	0			0			0
Total installment and other fee income	107,361			96,753			95,242
Net investment income	35,537			36,800			35,629
Net realized gains on investments	3,145			2,809			4,284
Other income	1,000			1,106			619
Total revenues	$	1,538,706		$	1,484,032		$	1,461,709

Our management uses underwriting income and combined ratios calculated on a statutory accident year basis as primary measures of profitability. Statutory accident year underwriting income is calculated by subtracting losses and loss adjustment expenses and commissions and other underwriting expenses (including bad debt charge-offs on agents' balances and premium receivables) from the total of earned premium and installment and other fee income. The statutory accident year combined ratio represents the sum of the following ratios: (i) losses and LAE incurred, excluding development from prior accident years, as a percentage of net earned premium; and (ii) underwriting expenses incurred, including bad debt and net of fees, as a percentage of net written premium.

The primary differences between the calculation of the statutory accident year used by management and the statutory calendar year combined ratios is the exclusion of bad debt charge-offs and the inclusion of development on prior accident year loss and LAE reserves.

Certain expenses are treated differently under statutory accounting principles. Under GAAP, commissions, premium taxes and other variable costs incurred in connection with successfully writing new and renewal business are capitalized as deferred policy acquisition costs and amortized on a pro rata basis over the period in which the related premium is earned. On a statutory basis, these items are expensed as incurred. Additionally, bad debt charge-offs on agents' balances and premium receivables are included in the GAAP combined ratios.

The following tables present the underwriting income and combined ratio on a statutory accident year basis with reconciliations to "Earnings before income taxes" as presented on the Consolidated Statements of Earnings ($ in thousands). We do not allocate assets or "Provision for income taxes" to operating segments.

	Twelve months ended December 31, 2016
	Personal Auto				Commercial Vehicle					Classic Collector					Total
	Pre-tax Profit (Loss)		Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)
Statutory accident year underwriting income	$	21,766	98.4	%	$	1,905		97.0	%	$	1,022		92.8	%	$	24,692		98.2	%
Bad debt charge-offs	15,150				1,784					50					16,984
Favorable (unfavorable) development on prior accident years	27,958				(3,582		)			(375		)			24,001
Statutory calendar year underwriting income	64,874		94.9	%	106			98.5	%	697			94.9	%	65,677			95.3	%
Statutory-to-GAAP underwriting income differences															(19,555		)
GAAP calendar year underwriting income															46,122			96.7	%
Net investment income															35,537
Net realized gains on investments															3,145
Other income															1,000
Interest expense															(14,037		)
Corporate general and administrative expenses															(7,899		)
Other expenses															(1,736		)
Earnings before income taxes															$	62,132
(1) Management includes the provision for uncollectible accounts in the underwriting income and combined ratio on both statutory accident year and GAAP calendar year bases.

	Twelve months ended December 31, 2015
	Personal Auto				Commercial Vehicle					Classic Collector				Total
	Pre-tax Profit (Loss)		Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)		Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)
Statutory accident year underwriting income	$	24,876	97.7	%	$	876		97.8	%	$	2,063	84.7	%	$	27,815		97.6	%
Bad debt charge-offs	17,413				1,557					44				19,013
Favorable (unfavorable) development on prior accident years	33,633				(5,176		)			469				28,926
Statutory calendar year underwriting income	75,922		93.6	%	(2,743		)	101.3	%	2,576		81.1	%	75,754			94.0	%
Statutory-to-GAAP underwriting income differences														(16,658		)
GAAP calendar year underwriting income														59,096			95.6	%
Net investment income														36,800
Net realized gains on investments														2,809
Other income														1,106
Interest expense														(14,029		)
Corporate general and administrative expenses														(7,655		)
Other expenses														(3,296		)
Earnings before income taxes														$	74,832
(1) Management includes the provision for uncollectible accounts in the underwriting income and combined ratio on both statutory accident year and GAAP calendar year bases.

	Twelve months ended December 31, 2014
	Personal Auto				Commercial Vehicle					Classic Collector					Total
	Pre-tax Profit (Loss)		Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)
Statutory accident year underwriting income	$	46,627	96.0	%	$	(4,033	)	102.3	%	$	1,504		87.2	%	$	44,098		96.4	%
Bad debt charge-offs	18,692				1,314					18					20,025
Favorable (unfavorable) development on prior accident years	848				17,626					(1,070		)			17,405
Statutory calendar year underwriting income	66,168		94.5	%	14,907			81.1	%	453			95.2	%	81,528			93.6	%
Statutory-to-GAAP underwriting income differences															(16,537		)
GAAP calendar year underwriting income															64,990			95.1	%
Net investment income															35,629
Net realized gains on investments															4,284
Other income															619
Interest expense															(13,989		)
Corporate general and administrative expenses															(7,514		)
Other expenses															(882		)
Earnings before income taxes															$	83,138
(1) Management includes the provision for uncollectible accounts in the underwriting income and combined ratio on both statutory accident year and GAAP calendar year bases.

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SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

INFINITY PROPERTY AND CASUALTY CORPORATION – PARENT ONLY

SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

Condensed Balance Sheets

($ in thousands)

	December 31,
	2016		2015
Assets:
Investment in subsidiaries	$	810,017	$	812,351
Fixed maturities – at fair value (amortized cost $132,039 and $115,042)	130,563		114,737
Equity securities – at fair value (cost $1,908 and $1,940)	1,991		1,975
Short-term investments - at fair value (amortized cost $509 and $1,073)	508		1,072
Cash and cash equivalents	25,384		27,286
Other assets	14,276		13,478
Total assets	$	982,739	$	970,899
Liabilities and Shareholders’ Equity:
Long-term debt	273,591		273,383
Other liabilities	8,970		9,035
Payable to affiliates	991		886
Shareholders’ equity	699,187		687,595
Total liabilities and shareholders’ equity	$	982,739	$	970,899

Condensed Statements of Earnings

($ in thousands)

	Twelve months ended December 31,
	2016			2015			% Change		2014			% Change
Income:
Income in equity of subsidiaries	$	55,734		$	63,511		(12.2	)%	$	69,964		(9.2	)%
Net investment income	2,412			2,074			16.3	%	1,757			18.1	%
Realized gain on investments	117			77			51.4	%	24			223.3	%
Other income	0			1			(100.0	)%	19			(97.3	)%
Total income	58,263			65,663			(11.3	)%	71,765			(8.5	)%
Costs and Expenses:
Interest expense	13,958			13,947			0.1	%	13,938			0.1	%
Corporate general and administrative expenses	7,899			7,655			3.2	%	7,514			1.9	%
Other expense	18			26			(31.8	)%	26			1.8	%
Total expenses	21,874			21,628			1.1	%	21,478			0.7	%
Earnings before income taxes	36,389			44,035			(17.4	)%	50,287			(12.4	)%
Provision for income taxes	(6,696		)	(7,445		)	(10.1	)%	(6,914		)	7.7	%
Net earnings	$	43,085		$	51,481		(16.3	)%	$	57,201		(10.0	)%

INFINITY PROPERTY AND CASUALTY CORPORATION – PARENT ONLY

Condensed Statements of Cash Flows

($ in thousands)

	Twelve months ended December 31,
	2016			2015			2014
Operating Activities:
Net income	$	43,085		$	51,481		$	57,201
Equity in consolidated subsidiaries	(55,734		)	(63,511		)	(69,964		)
Excess tax benefits from share-based payment arrangements	(157		)	(298		)	(108		)
Other	4,063			4,938			1,055
Net cash used in operating activities	(8,744		)	(7,391		)	(11,816		)
Investing Activities:
Purchases of fixed maturities	(36,202		)	(35,477		)	(26,572		)
Purchases of short-term investments	(1,905		)	(1,602		)	(821		)
Maturities and redemptions of fixed maturities	25,904			15,410			27,750
Maturities and redemptions of short-term investments	1,370			1,285			0
Proceeds from sale of fixed maturities	13,874			14,784			8,327
Proceeds from sale of short-term investments	1,061			0			0
Dividends received from subsidiary(1)	38,378			52,726			34,530
Capital contributed to subsidiaries	(1,105		)	(1,729		)	(1,338		)
Net cash provided by investing activities	41,375			45,397			41,876
Financing Activities:
Proceeds from stock options exercised and employee stock purchases	256			259			784
Excess tax benefits from share-based payment arrangements	157			298			108
Acquisition of treasury stock	(11,953		)	(29,481		)	(10,100		)
Dividends paid to shareholders	(22,993		)	(19,528		)	(16,562		)
Net cash used in financing activities	(34,534		)	(48,451		)	(25,769		)
Net (decrease) increase in cash and cash equivalents	(1,902		)	(10,445		)	4,290
Cash and cash equivalents at beginning of period	27,286			37,731			33,441
Cash and cash equivalents at end of period	$	25,384		$	27,286		$	37,731

(1) The parent received $21.6 million, $15.7 million and $25.6 million in the form of securities from subsidiaries in 2016, 2015 and 2014, respectively, not reflected in the above cash flows.

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SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION

12 Months Ended

Dec. 31, 2016

Supplementary Insurance Information [Abstract]

SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION

SCHEDULE III – SUPPLEMENTARY INSURANCE INFORMATION

THREE YEARS ENDED DECEMBER 31, 2016

($ in thousands)

COLUMN A	COLUMN B		COLUMN C		COLUMN D		COLUMN E		COLUMN F		COLUMN G		COLUMN H		COLUMN I		COLUMN J		COLUMN K
Segment	Deferred Policy Acquisition Costs		Future Policy Benefits, Losses, Claims and Loss Expenses		Unearned Premium		Other Policy Claims and Benefits Payable		Premium Revenue		Net Investment Income (1)		Benefits, Claims, Losses, and Settlement Expenses		Amortization of Deferred Policy Acquisition Costs		Other Operating Expenses		Premiums Written
2016
Personal Auto	$	79,429	$	573,249	$	533,436			$	1,246,402			$	981,360	$	185,473	$	130,772	$	1,236,001
Commercial Vehicle	10,526		106,956		72,978				130,183				106,031		19,363		15,448		141,174
Classic Collector	1,181		5,250		7,934				15,079				9,364		2,247		2,845		15,284
Total	$	91,136	$	685,455	$	614,347	$	0	$	1,391,664	$	35,537	$	1,096,755	$	207,083	$	149,065	$	1,392,459
2015
Personal Auto	$	82,881	$	580,983	$	543,837			$	1,225,290			$	937,694	$	185,325	$	131,277	$	1,243,191
Commercial Vehicle	9,098		85,040		65,084				106,962				90,849		16,176		11,153		115,357
Classic Collector	1,178		3,942		7,728				14,312				7,459		2,167		2,122		14,739
Total	$	93,157	$	669,965	$	616,649	$	0	$	1,346,564	$	36,800	$	1,036,001	$	203,667	$	144,552	$	1,373,287
2014
Personal Auto	$	81,362	$	597,091	$	525,935			$	1,223,860			$	936,803	$	188,924	$	137,358	$	1,234,367
Commercial Vehicle	7,937		66,976		56,023				88,801				56,506		13,703		10,127		99,378
Classic Collector	1,130		4,110		7,301				13,274				8,319		2,051		2,395		13,859
Total	$	90,428	$	668,177	$	589,260	$	0	$	1,325,935	$	35,629	$	1,001,628	$	204,678	$	149,880	$	1,347,604
(1) We do not allocate investment income to operating segments.

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Significant Reporting and Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Nature of Operations

Nature of Operations

We currently write personal automobile insurance with a concentration on nonstandard automobile insurance, commercial vehicle insurance and classic collector automobile insurance. Personal auto insurance accounts for 89% of our total gross written premium and we primarily write it in four states. We wrote approximately 55% of our personal auto gross written premium in the state of California during 2016.

Basis of Consolidation and Reporting

Basis of Consolidation and Reporting

The accompanying consolidated financial statements include our accounts and those of our subsidiaries. These financial statements reflect certain adjustments necessary for a fair presentation of our results of operations and financial position. Such adjustments consist of normal, recurring accruals recorded to accurately match expenses with their related revenue streams and the elimination of all significant intercompany transactions and balances.

We have evaluated events that occurred after December 31, 2016, for recognition or disclosure in our financial statements and the notes to the financial statements.

Schedules may not foot due to rounding.

Estimates

Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles of the United States requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Changes in circumstances could cause actual results to differ materially from those estimates.

Investments

Investments

We consider all fixed maturity securities “available for sale” and report them at fair value with net unrealized gains or losses reported after-tax (net of any valuation allowance) as a component of accumulated other comprehensive income within shareholders' equity. We base the fair values of investments on prices quoted in the most active market for each security. If quoted prices are not available, we estimate fair value based on the fair value of comparable securities, discounted cash flow models or similar methods. We treat premium and discounts on mortgage-backed securities (MBS) and asset-backed securities (ABS) as a yield adjustment over the estimated life of the securities, adjusted for anticipated prepayments, using the interest method. We base prepayment assumptions on data from widely accepted third party data sources or internal estimates. We review the amortized cost and effective yield of the security periodically and adjust it to reflect actual prepayments and changes in expectations. For high credit quality MBS and ABS (those rated AA or above at the time of purchase), the adjustments to amortized cost are recorded as a charge or credit to net investment income in accordance with the retrospective method. For MBS and ABS rated below AA, we adjust the yield prospectively for any changes in estimated cash flows.

Gains or losses on securities are determined on the specific identification basis. When we consider impairment in the value of a specific investment other-than-temporary (OTTI), the cost basis of that investment is reduced. For fixed maturity securities that are OTTI, we assess our intent to sell and the likelihood that we will be required to sell the security before recovery of our amortized cost. If a fixed maturity security is considered OTTI, but we do not intend to and are not more than likely to be required to sell the security prior to its recovery to amortized cost, the amount of the impairment is separated into a credit loss component and the amount due to all other factors. The excess of the amortized cost over the present value of the expected cash flows determines the credit loss component of an impairment charge on a fixed maturity security. The present value is determined using the best estimate of cash flows discounted at (i) the effective interest rate implicit at the date of acquisition for non-structured securities; or (ii) the book yield for structured securities. The techniques and assumptions for determining the best estimate of cash flows vary depending on the type of security. We recognize the credit loss component of an impairment charge in net earnings and the non-credit component in accumulated other comprehensive income.

Securities having a fair value of approximately $19.8 million at December 31, 2016, were on deposit as required by regulatory authorities.

Cash and Cash Equivalents

Cash and Cash Equivalents

We consider liquid investments having original maturities of three months or less when purchased to be cash equivalents for purposes of the financial statements.

Reinsurance

Reinsurance

Our insurance subsidiaries cede insurance to other companies. To the extent that any reinsuring companies are unable to meet obligations under agreements covering reinsurance ceded, our insurance subsidiaries would remain liable. We estimate amounts recoverable from reinsurers in a manner consistent with the claim liability associated with the reinsured policies. Our insurance subsidiaries report as assets (i) the estimated reinsurance recoverable on unpaid losses; and (ii) amounts paid to reinsurers applicable to the unexpired terms of policies in force.

Advertising

Advertising

Advertising costs are charged to expense as incurred. Total advertising costs were $9.7 million, $9.1 million and $8.7 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Deferred Policy Acquisition Costs (DPAC)

Deferred Policy Acquisition Costs (DPAC)

Policy acquisition costs (principally commissions, premium taxes and other marketing and underwriting expenses) related to the successful production of premium writings are deferred and charged against income ratably over the terms of the related policies. The method followed in computing DPAC limits the amount of such costs to their estimated realizable value without any consideration for anticipated investment income. Each quarter, we evaluate the recoverability of these costs. The DPAC amortization expense recognized in the Consolidated Statements of Earnings during 2016, 2015 and 2014 was $207.1 million, $203.7 million and $204.7 million, respectively.

Goodwill

Goodwill

In accordance with the Goodwill topic of the FASB Accounting Standards Codification (FASC), we perform impairment test procedures for goodwill on an annual basis. These procedures require us to calculate the fair value of goodwill, compare the result to our carrying value and record the amount of any shortfall as an impairment charge.

We performed this test as of October 1, 2016, using a variety of methods, including estimates of future discounted cash flows and comparisons of our market value to that of our major competitors. Our cash flow projections rely on assumptions that are subject to uncertainty, including premium growth, loss and loss adjustment expense ratios, interest rates and capital requirements.

The October 1, 2016, test results indicated that the fair value of our goodwill exceeded our carrying value and therefore no impairment charge was required at that date. Additionally, there was no indication of impairment at December 31, 2016.

Unpaid Losses and Loss Adjustment Expense (LAE)

Unpaid Losses and Loss Adjustment Expenses (LAE)

The net liabilities stated for unpaid claims and for expenses of investigation and adjustment of unpaid claims are based upon (i) the accumulation of case estimates for losses reported prior to the close of the accounting period on direct business written; (ii) estimates received from ceding reinsurers and insurance pools and associations; (iii) estimates of unreported losses based on past experience; (iv) estimates based on experience of expenses for investigating and adjusting claims; and (v) the current state of the law and coverage litigation. These liabilities are subject to the impact of changes in claim amounts and frequency and other factors. We have not reduced liabilities for unpaid losses and LAE for reinsurance recoverables; such recoverables are recorded separately as assets. Changes in estimates of the liabilities for losses and LAE are reflected in the Consolidated Statements of Earnings in the period in which determined. In spite of the variability inherent in such estimates, we believe that the liabilities for unpaid losses and LAE are adequate.

Premium and Receivables

Premium and Receivables

We earn insurance premium written over the terms of the policies on a pro rata basis. Unearned premium represents that portion of premium written which is applicable to the unexpired terms of policies in force. On reinsurance assumed from other insurance companies or written through various underwriting organizations, we base unearned premium on reports received from such companies and organizations. We provide insurance and related services to individuals and small commercial accounts throughout the United States and offer a variety of payment plans. We establish an allowance for doubtful accounts based on the relationship, on a policy basis, between receivables and unearned premium, or an aging analysis of past due balances. We charge off premium due from insureds if not collected within 90 days of the policies' expiration or cancellation dates. However, even after we charge off premium, attempts to collect the premium continue.

Income Taxes

Income Taxes

We file a consolidated federal income tax return, which includes all 80% and greater owned U.S. subsidiaries. We and our 80% and greater owned subsidiaries are parties to a tax allocation agreement, which designates how members of the tax group share tax payments. In general, each subsidiary agrees to pay us taxes computed on a separate company taxable income basis. We agree to pay each subsidiary for the tax benefit, if any, of net losses used by other members of the consolidated group.

We calculate deferred income taxes using the “asset and liability method.” Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax basis and are measured using enacted tax rates. We recognize deferred tax assets if it is more likely than not that a benefit will be realized. We aggregate current and deferred tax assets and liabilities on the Consolidated Balance Sheets.

Property and Equipment

Property and Equipment

We report property and equipment balances at cost less accumulated depreciation. Property and equipment, which consists of land, buildings, leasehold improvements, computer equipment, capitalized software and furniture and fixtures, consisted of the following balances as of December 31, 2016 ($ in millions):

	Gross Asset		Accumulated Depreciation			Net Asset
Real estate related	$	69.5	$	(7.2	)	$	62.3
Computer equipment & software	82.9		(55.6		)	27.3
Furniture & fixtures	14.3		(7.8		)	6.6
Total	$	166.7	$	(70.6	)	$	96.2

We recognized $2.1 million, net of accumulated depreciation of $1.6 million, of equipment held under capital leases in other assets on the Consolidated Balance Sheets with the related lease obligations recorded in other liabilities. We compute depreciation over the estimated useful lives of the assets using the straight-line method. Property and equipment is a separate line item on the Consolidated Balance Sheets and we allocate the related expenses, including amortization of assets recorded under capital leases, to one or more of the following line items on the Consolidated Statements of Earnings depending on the asset: "Losses and loss adjustment expenses," "Commissions and other underwriting expenses," "Corporate general and administrative expenses" or "Other expenses."

Benefit Plans

Benefit Plans

We provide retirement benefits to qualified employees and healthcare and life insurance benefits to eligible retirees. We also provide post-employment benefits to former or inactive employees (primarily those on disability) who were not deemed retired under other company plans. The projected future cost of providing these benefits is expensed over the period the employees earn such benefits.

Recently Adopted and Issued Accounting Standards

Recently Adopted Accounting Standards

In May 2015 the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) related to the disclosure for short-duration contracts. The guidance requires additional disclosures related to the liability for unpaid claims and claim adjustment expenses in an effort to increase transparency and comparability. We adopted this standard retrospectively as of January 1, 2016. See Note 10 – Insurance Reserves to the Consolidated Financial Statements for these required disclosures.

In April 2015 the FASB issued an ASU related to the presentation of debt issuance costs. The guidance requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. We adopted this standard retrospectively as of January 1, 2016.

The following table illustrates the effect of adopting this standard on the Consolidated Balance Sheets ($ in millions):

	December 31, 2015
	As Reported		As Adjusted		Difference
Other assets	$	11.9	$	10.3	$	(1.6	)
Total assets	2,386.8		2,385.1		(1.6		)
Long-term debt	275.0		273.4		(1.6		)
Total liabilities	1,699.2		1,697.5		(1.6		)
Total liabilities and shareholders' equity	2,386.8		2,385.1		(1.6		)

In August 2014, the FASB issued an ASU related to an entity's ability to continue as a going concern. The guidance requires management to perform an assessment of an entity's ability to continue as a going concern within one year after the date that the financial statements are issued as well as disclose going concern uncertainties in the financial statements. We adopted this standard as of December 31, 2016.

Recently Issued Accounting Standards

In October 2016 the FASB issued an ASU related to the recognition of income tax on intra-entity transfers of assets other than inventory. The guidance requires the income tax to be recognized when the transfer occurs rather than when the asset is sold to an outside party. The standard is effective for annual periods beginning after December 15, 2017, and interim periods within the year of adoption, and is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We do not expect the adoption of this standard to have a material impact on our financial condition or results of operations.

In June 2016 the FASB issued an ASU related to the accounting for credit losses. The guidance generally requires credit losses on available-for-sale debt securities to be recognized as an allowance rather than as a reduction to the amortized cost of a security. The standard is effective for fiscal periods beginning after December 15, 2019, and interim periods within the year of adoption, with prospective application of the ASU required for debt securities for which an other-than-temporary impairment has been recognized before the implementation date. We do not expect the adoption of this standard to have a material impact on our financial condition or results of operations.

In March 2016 the FASB issued an ASU related to the accounting for employee share-based payments. The guidance addresses the recognition, presentation and classification of awards, forfeitures and shares withheld for tax purposes. The standard is effective for fiscal periods beginning after December 15, 2016, with each provision having a different application method. We do not expect the adoption of this standard to have a material impact on our financial condition or results of operations.

In February 2016 the FASB issued an ASU related to the accounting for leases. The guidance requires lessees to recognize lease assets and liabilities on the balance sheet. The standard is effective for fiscal years beginning after December 15, 2018, and is to

be applied retrospectively, with an option to use a modified retrospective approach for leases which commenced prior to the effective date of this ASU. We are still evaluating the impact this ASU will have on the Company's consolidated financial statements.

In January 2016 the FASB issued an ASU amending the guidance on classifying and measuring financial instruments. The guidance requires equity securities to be measured at fair value and changes in that fair value to be recognized through net income. The standard is effective for fiscal years beginning after December 15, 2017, with a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. We currently record equity securities at fair value and as of December 31, 2016, we have $8.9 million net unrealized gains, net of tax, recognized as a component of other comprehensive income.

In May 2014 the FASB issued an ASU related to the accounting for revenue from contracts with customers. Insurance contracts have been excluded from the scope of the guidance. In August 2015 the FASB issued an ASU to defer the effective date from fiscal years beginning after December 15, 2016, to fiscal years beginning after December 15, 2017. We do not expect the adoption of this standard to have a material impact on our financial condition or results of operations. As an insurance-entity, we are largely exempt from the provisions of this standard, with only fee income totaling $107.4 million for the year ending December 31, 2016, subject to this new standard.

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Significant Reporting and Accounting Policies Significant Reporting and Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Schedule of Property, Plant and Equipment

Property and Equipment

We report property and equipment balances at cost less accumulated depreciation. Property and equipment, which consists of land, buildings, leasehold improvements, computer equipment, capitalized software and furniture and fixtures, consisted of the following balances as of December 31, 2016 ($ in millions):

	Gross Asset		Accumulated Depreciation			Net Asset
Real estate related	$	69.5	$	(7.2	)	$	62.3
Computer equipment & software	82.9		(55.6		)	27.3
Furniture & fixtures	14.3		(7.8		)	6.6
Total	$	166.7	$	(70.6	)	$	96.2

We recognized $2.1 million, net of accumulated depreciation of $1.6 million, of equipment held under capital leases in other assets on the Consolidated Balance Sheets with the related lease obligations recorded in other liabilities. We compute depreciation over the estimated useful lives of the assets using the straight-line method. Property and equipment is a separate line item on the Consolidated Balance Sheets and we allocate the related expenses, including amortization of assets recorded under capital leases, to one or more of the following line items on the Consolidated Statements of Earnings depending on the asset: "Losses and loss adjustment expenses," "Commissions and other underwriting expenses," "Corporate general and administrative expenses" or "Other expenses."

Schedule of effect of adopting new ASU on the Consolidated Balance Sheets

The following table illustrates the effect of adopting this standard on the Consolidated Balance Sheets ($ in millions):

	December 31, 2015
	As Reported		As Adjusted		Difference
Other assets	$	11.9	$	10.3	$	(1.6	)
Total assets	2,386.8		2,385.1		(1.6		)
Long-term debt	275.0		273.4		(1.6		)
Total liabilities	1,699.2		1,697.5		(1.6		)
Total liabilities and shareholders' equity	2,386.8		2,385.1		(1.6		)

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Fair Value (Tables)

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Fair value by hierarchy

The following tables present, for each of the fair value hierarchy levels, our assets and liabilities for which we report fair value on a recurring basis ($ in thousands):

	Fair Value
December 31, 2016	Level 1			Level 2			Level 3			Total
Cash and cash equivalents	$	92,800		$	0		$	0		$	92,800
Fixed maturity securities:
U.S. government	62,480			5			0			62,485
State and municipal	0			472,471			3,860			476,331
Mortgage-backed securities:
Residential	0			340,367			0			340,367
Commercial	0			69,801			0			69,801
Total mortgage-backed securities	0			410,169			0			410,169
Asset-backed securities	0			37,196			412			37,608
Corporates	0			402,909			666			403,575
Total fixed maturities	62,480			1,322,749			4,938			1,390,167
Equity securities	90,640			0			0			90,640
Short-term investments	769			2,139			0			2,907
Total cash and investments	$	246,689		$	1,324,888		$	4,938		$	1,576,514
Percentage of total cash and investments	15.6		%	84.0		%	0.3		%	100.0		%
December 31, 2015
Cash and cash equivalents	$	62,483		$	0		$	0		$	62,483
Fixed maturity securities:
U.S. government	64,638			32			0			64,669
State and municipal	0			479,656			10			479,666
Mortgage-backed securities:
Residential	0			334,784			0			334,784
Commercial	0			70,224			0			70,224
Total mortgage-backed securities	0			405,008			0			405,008
Asset-backed securities	0			54,018			0			54,018
Corporates	0			376,582			1,524			378,105
Total fixed maturities	64,638			1,315,295			1,534			1,381,467
Equity securities	89,935			0			0			89,935
Short-term investments	0			4,651			0			4,651
Total cash and investments	$	217,056		$	1,319,946		$	1,534		$	1,538,536
Percentage of total cash and investments	14.1		%	85.8		%	0.1		%	100.0		%

Fair value level 3 reconciliation

The following tables present the progression in the Level 3 fair value category ($ in thousands):

Twelve months ended December 31, 2016	State and Municipal			Corporates			Asset-Backed Securities			Total
Balance at beginning of period	$	10		$	1,524		$	0		$	1,534
Total (lossses) gains, unrealized or realized
Included in net earnings	(25		)	12			0			(13		)
Included in other comprehensive income	(10		)	(60		)	3			(67		)
Purchases	0			0			620			620
Settlements	(10		)	(810		)	(209		)	(1,029		)
Transfers in	3,894			0			1,338			5,232
Transfers out	0			0			(1,339		)	(1,339		)
Balance at end of period	$	3,860		$	666		$	412		$	4,938
Twelve months ended December 31, 2015
Balance at beginning of period	$	0		$	3,134		$	150		$	3,285
Total (losses) gains, unrealized or realized
Included in net earnings	(0		)	(71		)	0			(72		)
Included in other comprehensive income	0			(80		)	0			(80		)
Purchases	0			0			0			0
Settlements	0			(1,112		)	(150		)	(1,263		)
Transfers in	10			0			0			10
Transfers out	0			(347		)	0			(347		)
Balance at end of period	$	10		$	1,524		$	0		$	1,534

Carrying value and estimated fair value

The following table presents the carrying value and estimated fair value of our financial instruments ($ in thousands):

	December 31, 2016				December 31, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Cash and cash equivalents	$	92,800	$	92,800	$	62,483	$	62,483
Available-for-sale securities:
Fixed maturities	1,390,167		1,390,167		1,381,467		1,381,467
Equity securities	90,640		90,640		89,935		89,935
Short-term investments	2,907		2,907		4,651		4,651
Total cash and investments	$	1,576,514	$	1,576,514	$	1,538,536	$	1,538,536
Liabilities:
Long-term debt	$	273,591	$	278,726	$	273,383	$	281,581

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Investments (Tables)

12 Months Ended

Dec. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Summarized information of investment portfolio

Summarized information for the major categories of our investment portfolio follows ($ in thousands):

December 31, 2016	Amortized Cost or Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		OTTI Recognized in Accumulated OCI(1)
Fixed maturities:
U.S. government	$	62,808	$	55	$	(377	)	$	62,485	$	0
State and municipal	477,834		2,313		(3,816		)	476,331		(51		)
Mortgage-backed securities:
Residential	343,095		2,306		(5,034		)	340,367		(1,967		)
Commercial	70,676		63		(939		)	69,801		0
Total mortgage-backed securities	413,772		2,369		(5,972		)	410,169		(1,967		)
Asset-backed securities	37,562		93		(47		)	37,608		(8		)
Corporates	400,685		4,389		(1,499		)	403,575		(41		)
Total fixed maturities	1,392,660		9,219		(11,711		)	1,390,167		(2,068		)
Equity securities	77,013		13,627		0			90,640		0
Short-term investments	2,909		0		(2		)	2,907		0
Total	$	1,472,582	$	22,846	$	(11,713	)	$	1,483,714	$	(2,068	)
December 31, 2015
Fixed maturities:
U.S. government	$	64,849	$	103	$	(282	)	$	64,669	$	0
State and municipal	472,402		7,393		(129		)	479,666		(51		)
Mortgage-backed securities:
Residential	333,554		3,678		(2,448		)	334,784		(2,374		)
Commercial	71,137		16		(929		)	70,224		0
Total mortgage-backed securities	404,691		3,694		(3,377		)	405,008		(2,374		)
Asset-backed securities	54,106		50		(138		)	54,018		(8		)
Corporates	385,462		1,281		(8,638		)	378,105		(61		)
Total fixed maturities	1,381,510		12,521		(12,564		)	1,381,467		(2,495		)
Equity securities	78,815		11,120		0			89,935		0
Short-term investments	4,656		0		(4		)	4,651		0
Total	$	1,464,981	$	23,640	$	(12,568	)	$	1,476,053	$	(2,495	)
(1) The total non-credit portion of OTTI recognized in Accumulated OCI reflecting the original non-credit loss at the time the credit impairment was determined.

Unrealized loss by investment category and length of time

The following tables set forth the amount of unrealized loss by investment category and length of time that individual securities have been in a continuous unrealized loss position ($ in thousands):

	Less than 12 Months								12 Months or More
December 31, 2016	Number of Securities with Unrealized Losses	Fair Value		Gross Unrealized Losses			Unrealized Losses as % of Cost		Number of Securities with Unrealized Losses	Fair Value		Gross Unrealized Losses			Unrealized Losses as % of Cost
Fixed maturities:
U.S. government	31	$	47,640	$	(377	)	0.8	%	0	$	0	$	0		0.0	%
State and municipal	146	303,428		(3,816		)	1.2	%	0	0		0			0.0	%
Mortgage-backed securities:
Residential	381	225,117		(4,559		)	2.0	%	40	11,891		(474		)	3.8	%
Commercial	14	38,002		(788		)	2.0	%	7	26,537		(150		)	0.6	%
Total mortgage-backed securities	395	263,119		(5,347		)	2.0	%	47	38,428		(625		)	1.6	%
Asset-backed securities	9	7,836		(46		)	0.6	%	1	519		(1		)	0.1	%
Corporate	98	145,089		(1,272		)	0.9	%	7	7,745		(227		)	2.8	%
Total fixed maturities	679	767,112		(10,859		)	1.4	%	55	46,693		(852		)	1.8	%
Equity securities	0	0		0			0.0	%	0	0		0			0.0	%
Short-term investments	3	2,907		(2		)	0.1	%	0	0		0			0.0	%
Total	682	$	770,019	$	(10,861	)	1.4	%	55	$	46,693	$	(852	)	1.8	%
December 31, 2015
Fixed maturities:
U.S. government	18	$	36,024	$	(241	)	0.7	%	4	$	4,687	$	(41	)	0.9	%
State and municipal	27	54,680		(129		)	0.2	%	0	0		0			0.0	%
Mortgage-backed securities:
Residential	205	133,814		(1,436		)	1.1	%	64	39,001		(1,012		)	2.5	%
Commercial	9	28,733		(349		)	1.2	%	10	34,169		(580		)	1.7	%
Total mortgage-backed securities	214	162,547		(1,785		)	1.1	%	74	73,170		(1,592		)	2.1	%
Asset-backed securities	36	35,313		(132		)	0.4	%	2	1,153		(7		)	0.6	%
Corporate	172	239,440		(7,149		)	2.9	%	12	14,373		(1,488		)	9.4	%
Total fixed maturities	467	528,003		(9,436		)	1.8	%	92	93,384		(3,128		)	3.2	%
Equity securities	0	0		0			0.0	%	0	0		0			0.0	%
Short-term investments	2	4,651		(4		)	0.1	%	0	0		0			0.0	%
Total	469	$	532,654	$	(9,440	)	1.7	%	92	$	93,384	$	(3,128	)	3.2	%

Summary of unrealized gains or losses

The following table summarizes those securities, excluding the rabbi trust, with unrealized gains or losses:

	December 31, 2016		December 31, 2015
Number of positions held with unrealized:
Gains	527		602
Losses	737		561
Number of positions held that individually exceed unrealized:
Gains of $500,000	1		2
Losses of $500,000	0		0
Percentage of positions held with unrealized:
Gains that were investment grade	85	%	94	%
Losses that were investment grade	97	%	89	%
Percentage of fair value held with unrealized:
Gains that were investment grade	84	%	95	%
Losses that were investment grade	97	%	88	%

Unrealized loss by age and severity

The following table sets forth the amount of unrealized losses, excluding the rabbi trust, by age and severity at December 31, 2016, ($ in thousands):

Age of Unrealized Losses	Fair Value of Securities with Unrealized Losses		Total Gross Unrealized Losses			Less Than 5%*			5% - 10%*			Total Gross Greater Than 10%*
Three months or less	$	643,988	$	(7,965	)	$	(7,922	)	$	(43	)	$	0
Four months through six months	117,157		(2,766		)	(2,586		)	(180		)	0
Seven months through nine months	5,039		(80		)	(80		)	0			0
Ten months through twelve months	3,836		(51		)	(51		)	0			0
Greater than twelve months	46,693		(852		)	(698		)	(74		)	(81		)
Total	$	816,712	$	(11,713	)	$	(11,336	)	$	(297	)	$	(81	)

* As a percentage of amortized cost or cost.

Change in unrealized gains (losses) on marketable securities

The change in unrealized gains (losses) on securities included the following ($ in thousands):

	Pre-tax
December 31, 2016	Fixed  Maturities			Equity  Securities			Short-Term Investments			Tax  Effects			Net
Unrealized holding (losses) gains on securities arising during the period	$	(2,153	)	$	5,359		$	(0	)	$	(1,122	)	$	2,084
Realized (gains) losses included in net earnings	(671		)	(2,851		)	3			1,232			(2,287		)
Impairment losses recognized in net earnings	375			0			0			(131		)	243
Change in unrealized, net	$	(2,449	)	$	2,508		$	2		$	(21	)	$	40
December 31, 2015
Unrealized holding losses on securities arising during the period	$	(18,699	)	$	(3,388	)	$	(4	)	$	7,732		$	(14,359	)
Realized gains included in net earnings	(2,064		)	(2,039		)	(0		)	1,436			(2,667		)
Impairment losses recognized in net earnings	1,294			0			0			(453		)	841
Change in unrealized, net	$	(19,469	)	$	(5,427	)	$	(4	)	$	8,715		$	(16,185	)
December 31, 2014
Unrealized holding gains on securities arising during the period	$	13,174		$	1,440		$	4		$	(5,116	)	$	9,502
Realized gains included in net earnings	(3,137		)	(1,303		)	(5		)	1,556			(2,889		)
Impairment losses recognized in net earnings	160			0			0			(56		)	104
Change in unrealized, net	$	10,198		$	137		$	(1	)	$	(3,617	)	$	6,717

For fixed maturity securities that are other-than-temporarily impaired, we assess our intent to sell and the likelihood that we will be required to sell the security before recovery of our amortized cost. If a fixed maturity security is considered other-than-temporarily impaired but we do not intend to and are not more than likely to be required to sell the security before our recovery to amortized cost, the amount of the impairment is separated into a credit loss component and the amount due to all other factors. The excess of the amortized cost over the present value of the expected cash flows determines the credit loss component of an impairment charge on a fixed maturity security. The present value is determined using the best estimate of cash flows discounted at (i) the effective interest rate implicit at the date of acquisition for non-structured securities; or (ii) the book yield for structured securities. The techniques and assumptions for determining the best estimate of cash flows vary depending on the type of security. We recognize the credit loss component of an impairment charge in net earnings and the non-credit component in accumulated other comprehensive income. If we intend to sell or will, more likely than not, be required to sell a security, the entire amount of the impairment is treated as a credit loss.

Progression of credit losses on fixed maturity securities

The following table is a progression of credit losses on fixed maturity securities that were bifurcated between a credit and non-credit component ($ in thousands):

	2016			2015
Balance at beginning of year	$	683		$	852
Reductions for securities sold and paydowns	(127		)	(168		)
Balance at end of year	$	557		$	683

Scheduled maturities of fixed maturity securities

Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers.

	Fair Value								Amortized Cost
Maturity	Securities with Unrealized Gains		Securities with Unrealized Losses		Securities with No Unrealized Gains or Losses		All Fixed Maturity Securities		All Fixed Maturity Securities
One year or less	$	84,529	$	27,794	$	2,500	$	114,823	$	114,372
After one year through five years	244,604		346,357		1,557		592,519		591,872
After five years through ten years	102,369		129,751		1,167		233,287		233,404
After ten years	1,763		0		0		1,763		1,679
Mortgage- and asset-backed securities	137,873		309,903		0		447,776		451,333
Total	$	571,138	$	813,805	$	5,224	$	1,390,167	$	1,392,660

Investment income

The following table shows investment income earned and investment expenses incurred ($ in thousands):

	Twelve months ended December 31,
	2016			2015			2014
Gross investment income:
Interest income on fixed maturities, cash and cash equivalents	$	35,528		$	36,871		$	35,596
Dividends on equity securities	2,231			2,194			2,245
Gross investment income	37,759			39,065			37,841
Investment expenses	(2,222		)	(2,265		)	(2,211		)
Net investment income	$	35,537		$	36,800		$	35,629

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Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

Schedule of long-term debt

	December 31,
($ in thousands)	2016		2015
Principal	$	275,000	$	275,000
Unamortized debt issuance costs	1,409		1,617
Long-term debt less unamortized debt issuance costs	$	273,591	$	273,383

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Reconciliation of provision for income taxes

The following is a reconciliation of income taxes at the statutory rate of 35.0% to the effective provision for income taxes as shown in the Consolidated Statements of Earnings ($ in thousands):

	Twelve months ended December 31,
	2016			2015			2014
Earnings before income taxes	$	62,132		$	74,832		$	83,138
Income taxes at statutory rate	21,746			26,191			29,098
Effect of:
Dividends-received deduction	(466		)	(458		)	(469		)
Tax-exempt interest	(2,456		)	(2,713		)	(2,752		)
Other	223			331			59
Provision for income taxes as shown on the Consolidated Statements of Earnings	$	19,047		$	23,351		$	25,936
GAAP effective tax rate	30.7		%	31.2		%	31.2		%

Components of income tax expense

The total income tax provision consists of ($ in thousands):

	2016		2015		2014
Current	$	14,782	$	23,133	$	25,342
Deferred	4,265		218		594
Provision for income taxes	$	19,047	$	23,351	$	25,936

Schedule of deferred tax assets and liabilities

The significant components of deferred tax assets and liabilities included in the Consolidated Balance Sheets were as follows ($ in thousands):

	As of December 31,
	2016			2015
Deferred tax assets:
Discount on loss reserves	$	4,853		$	5,344
Unearned premium reserve	42,844			42,788
Bad debts	4,972			5,385
Accrued bonuses	2,250			1,863
Deferred compensation	6,152			5,827
Long-term incentive compensation	814			1,081
Other	5,089			4,681
Gross deferred tax assets	66,974			66,969
Valuation allowance for deferred tax assets	(326		)	(166		)
Total deferred tax assets	66,648			66,803
Deferred tax liabilities:
Deferred policy acquisition costs	(31,897		)	(32,605		)
Investment securities – unrealized gains	(3,896		)	(3,875		)
Fixed assets	(5,037		)	0
Other	(1,405		)	(1,592		)
Total deferred tax liabilities	(42,235		)	(38,072		)
Net deferred tax assets	24,413			28,731
Current income tax (payable) receivable	(2,778		)	5,195
Current and deferred income taxes	$	21,635		$	33,926

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Computation Of Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Schedule of Earnings per Share

Computation of Net Earnings per Share

The following table illustrates our computations of basic and diluted net earnings per common share ($ in thousands, except per share figures):

	Twelve months ended December 31,
	2016		2015		2014
Net earnings	$	43,085	$	51,481	$	57,201
Average basic shares outstanding	11,018		11,334		11,440
Basic net earnings per share	$	3.91	$	4.54	$	5.00
Average basic shares outstanding	11,018		11,334		11,440
Restricted stock not vested	26		16		37
Dilutive effect of assumed option exercises	0		0		1
Dilutive effect of Performance Share Plan	57		67		84
Average diluted shares outstanding	11,101		11,417		11,562
Diluted net earnings per share	$	3.88	$	4.51	$	4.95

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Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Shares Issued by Plan

The number of shares issued, net of forfeitures, by plan, for share-based compensation arrangements was as follows:

	2016	2015		2014
	2013 Plan	2013 Plan	Prior Plans	2013 Plan	Prior Plans
Restricted Stock	0	(1,613)	0	46,328	0
Non-employee Directors’ Stock	7,596	7,013	0	8,016	0
Performance Shares	24,123	0	37,155	0	55,245
Total	31,719	5,400	37,155	54,344	55,245

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block]

The amount of total compensation cost for share-based compensation arrangements was as follows ($ in thousands):

	Twelve months ended December 31,
	2016				2015				2014
	Expense Recognized in Earnings		Tax Benefit		Expense Recognized in Earnings		Tax Benefit		Expense Recognized in Earnings		Tax Benefit
Restricted Stock	$	1,037	$	363	$	799	$	280	$	1,126	$	394
Non-employee Directors’ Stock Ownership Plan	600		210		510		178		520		182
Employee Stock Purchase Plan	46		0		45		0		55		0
Performance Shares	661		231		1,795		628		933		327
Total	$	2,343	$	804	$	3,148	$	1,086	$	2,634	$	903

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Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Schedule of net benefit obligation

The following tables show data related to the APBO plan ($ in thousands):

	2016			2015
Net benefit obligation at beginning of year	$	3,729		$	4,313
Service cost	183			235
Interest cost	132			146
Participant contributions	37			30
Assumption change	44			(280		)
Actuarial gain	(176		)	(425		)
Gross benefits paid	(338		)	(289		)
Net benefit obligation at end of year	$	3,613		$	3,729

Schedule of weighted-average assumptions used

The following table discloses discount rates used to determine benefit obligations:

	2016	2015	2014
Discount rate	3.60%	3.70%	3.50%

Schedule of net benefit costs

The following table discloses the components of net periodic post-retirement benefit cost ($ in thousands):

	2016			2015			2014
Service cost	$	183		$	235		$	198
Interest cost	132			146			150
Amortization of prior service cost	71			71			71
Amortization of net cumulative gain	(114		)	(5		)	(81		)
Net periodic post-retirement benefit cost	$	273		$	447		$	339

Schedule of health care cost trend rates

The following table discloses the effects of a hypothetical one percentage point increase and the effects of a hypothetical one percentage point decrease in the assumed healthcare trend rate ($ in thousands):

	2016			2015			2014
A one percentage point hypothetical change in the assumed healthcare trend rate would have the following effect on the post-retirement benefit obligations:
1% increase	$	184		$	304		$	396
1% decrease	(162		)	(269		)	(348		)
A one percentage point hypothetical change in the assumed healthcare trend rate would have the following effect on the aggregate of the service and interest cost components of net periodic post-retirement healthcare benefit costs:
1% increase	$	40		$	49		$	40
1% decrease	(34		)	(42		)	(34		)

Schedule of changes in fair value of plan assets

The following table reconciles the beginning and ending balances of the fair value of plan assets for the years ended December 31, 2016, and 2015 ($ in thousands):

	2016			2015
Fair value of plan assets at beginning of year	$	0		$	0
Employer contributions	301			259
Participant contributions	37			30
Gross benefits paid	(338		)	(289		)
Fair value of plan assets at end of year	$	0		$	0

Schedule of amounts recognized in balance sheet

The following table presents the funded status and the amounts recognized in the Consolidated Balance Sheets ($ in thousands):

	2016			2015
Fair value of plan assets	$	0		$	0
Benefit obligations	(3,613		)	(3,729		)
Funded status at end of year	(3,613		)	(3,729		)
Contributions made after the measurement date	0			0
Unrecognized actuarial net (gain) loss	0			0
Unrecognized prior service cost	0			0
Net amount recognized at end of year	$	(3,613	)	$	(3,729	)

Schedule of expected benefit payments

The following table presents the 10-year forecast and best estimate of expected benefit payments ($ in thousands):

	2016			2015			2014
2017	$	295	2016	$	301	2015	$	259
2018	287		2017	280		2016	294
2019	289		2018	281		2017	304
2020	281		2019	294		2018	314
2021	283		2020	287		2019	337
2022-2026	1,549		2021-2025	1,583		2020-2024	1,840
10-Year Total	$	2,983		$	3,026		$	3,348

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Quarterly Operating Results (Tables)

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Schedule of quarterly financial information

The following are quarterly results of our consolidated operations for the three years ended December 31, 2016, ($ in thousands, except per share amounts):

2016	1st Quarter		2nd Quarter			3rd Quarter			4th Quarter		Total Year
Revenues	$	370,162	$	375,084		$	378,124		$	415,336	$	1,538,706
Net earnings	7,708		11,015			2,753			21,609		43,085
Net earnings per share:
Basic	$	0.70	$	1.00		$	0.25		$	1.96	$	3.91
Diluted	0.69		0.99			0.25			1.95		3.88
2015
Revenues	$	366,973	$	374,757		$	372,383		$	369,919	$	1,484,032
Net earnings	11,154		13,493			15,737			11,097		51,481
Net earnings per share:
Basic	$	0.98	$	1.18		$	1.39		$	0.99	$	4.54
Diluted	0.97		1.18			1.38			0.99		4.51
2014
Revenues	$	361,613	$	367,954		$	366,160		$	365,982	$	1,461,709
Net earnings	10,327		10,667			14,855			21,352		57,201
Net earnings per share:
Basic	$	0.90	$	0.93		$	1.30		$	1.87	$	5.00
Diluted	0.89		0.92			1.29			1.85		4.95
Net realized gains (losses) on investments amounted to:
	1st Quarter		2nd Quarter			3rd Quarter			4th Quarter		Total Year
2016	$	139	$	(164	)	$	1,282		$	1,887	$	3,145
2015	1,169		214			(410		)	1,835		2,809
2014	645		1,846			1,013			781		4,284

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Insurance Reserves (Tables)

12 Months Ended

Dec. 31, 2016

Insurance [Abstract]

Liability for unpaid losses and LAE

The following table provides an analysis of changes in the liability for losses and LAE, net of reinsurance ($ in thousands):

	2016			2015			2014
Balance at Beginning of Period
Unpaid losses on known claims	$	237,660		$	235,037		$	221,447
IBNR losses	290,097			277,482			262,660
LAE	142,207			155,658			162,469
Total unpaid losses and LAE	669,965			668,177			646,577
Reinsurance recoverables	(14,694		)	(14,370		)	(14,431		)
Unpaid losses and LAE, net of reinsurance recoverables	655,271			653,808			632,146
Current Activity
Loss and LAE incurred:
Current accident year	1,120,756			1,064,927			1,019,033
Prior accident years	(24,001		)	(28,926		)	(17,405		)
Total loss and LAE incurred	1,096,755			1,036,001			1,001,628
Loss and LAE payments:
Current accident year	(687,554		)	(656,317		)	(602,732		)
Prior accident years	(396,147		)	(378,221		)	(377,235		)
Total loss and LAE payments	(1,083,701		)	(1,034,538		)	(979,967		)
Balance at End of Period
Unpaid losses and LAE, net of reinsurance recoverables	668,325			655,271			653,808
Add back reinsurance recoverables	17,130			14,694			14,370
Total unpaid losses and LAE	685,455			669,965			668,177
Unpaid losses on known claims	238,412			237,660			235,037
IBNR losses	306,641			290,097			277,482
LAE	140,402			142,207			155,658
Total unpaid losses and LAE	$	685,455		$	669,965		$	668,177

Schedule of incurred losses and cumulative paid claims for prior ten accident years

The following tables provide incurred losses and allocated loss adjustment expenses (ALAE) as well as cumulative paid claims and ALAE, net of reinsurance, for the prior ten accident years for our two largest lines of business. In addition, as of the most recent reporting period, the total of incurred but not reported (IBNR) reserves plus expected development on reported claims and the cumulative number of reported claims are presented ($ in thousands, except severity). The information about incurred and paid claims development for the years ended December 31, 2007 to December 31, 2015 is presented as supplementary information.

	Personal Auto
Accident Year	Incurred losses and ALAE, net of reinsurance recoverable For the years ended December 31,																				IBNR & expected development on reported claims		Cumulative number of reported claims (1)	Severity (2)
	(unaudited)
	2007		2008		2009		2010		2011		2012		2013		2014		2015		2016		2016		2016	2016
2007	$	600,087	$	612,555	$	596,818	$	585,525	$	582,153	$	578,186	$	578,429	$	577,799	$	577,577	$	577,777	$	0	283,087	$	2,041
2008			545,873		533,293		517,125		513,175		511,141		511,490		509,922		509,250		509,058		4		247,202	2,059
2009					497,393		473,328		472,772		471,867		471,714		472,523		473,000		473,359		10		230,828	2,051
2010							541,302		554,167		557,592		559,253		557,625		558,936		557,477		16		270,702	2,059
2011									608,636		633,011		638,400		637,569		638,507		635,905		578		307,904	2,063
2012											739,820		750,522		751,262		751,601		748,166		5,644		360,236	2,061
2013													805,039		805,460		789,428		782,369		11,736		364,784	2,113
2014															807,278		796,084		784,928		21,812		354,013	2,156
2015																	839,059		841,144		41,629		365,037	2,190
2016																			874,326		206,058		343,254	1,947
																	Total		$	6,784,508

Accident Year		Cumulative paid losses and ALAE, net of reinsurance recoverable For the years ended December 31,
		(unaudited)
		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
2007		$	359,059	$	522,711	$	556,520	$	568,792	$	574,082	$	575,600	$	576,656	$	577,147	$	577,383	$	577,640
2008				320,317		453,092		485,866		499,876		505,063		507,822		508,674		508,831		508,960
2009						285,154		408,535		447,178		460,463		465,453		470,032		471,789		473,074
2010								325,911		485,920		527,538		543,884		550,025		554,410		556,781
2011										374,367		554,245		602,523		621,919		629,992		633,861
2012												450,434		655,303		711,636		731,205		739,354
2013														480,464		692,039		744,188		762,770
2014																485,384		694,607		744,687
2015																		530,264		748,850
2016																				554,216
		Total																		$	6,300,193
Outstanding liabilities for unpaid losses and ALAE prior to 2007, net of reinsurance recoverable																				1,230
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance recoverable																				$	485,545
(1)	The cumulative number of reported claims is measured by individual claimant at a coverage level.
(2)	Calculated severity amounts by accident year are based on inception-to-date incurred less IBNR and expected development dollars and reported claims. Note that older accident years are more developed than recent accident years.

	Commercial Vehicle
Accident Year	Incurred losses and ALAE, net of reinsurance recoverable For the years ended December 31,																				IBNR & expected development on reported claims		Cumulative number of reported claims (1)	Severity (2)
	(unaudited)
	2007		2008		2009		2010		2011		2012		2013		2014		2015		2016		2016		2016	2016
2007	$	25,689	$	23,743	$	23,028	$	21,935	$	21,099	$	20,781	$	20,674	$	20,639	$	20,631	$	20,631	$	0	6,356	$	3,246
2008			24,457		21,187		18,960		18,893		18,320		18,045		17,973		17,996		17,996		0		6,595	2,729
2009					35,627		31,903		31,226		28,943		27,598		27,533		27,402		27,385		0		9,059	3,023
2010							41,321		39,149		35,881		34,539		33,397		33,845		33,460		44		11,202	2,983
2011									40,294		39,094		36,202		35,052		35,130		34,507		60		11,497	2,996
2012											51,085		46,950		46,284		46,405		45,832		706		13,118	3,440
2013													62,157		51,438		52,083		51,407		1,123		14,426	3,486
2014															65,724		63,304		64,682		2,128		16,735	3,738
2015																	81,849		84,314		3,271		20,043	4,043
2016																			95,536		29,491		20,309	3,252
																	Total		$	475,750

Accident Year		Cumulative paid losses and ALAE, net of reinsurance recoverable For the years ended December 31,
		(unaudited)
		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
2007		$	9,570	$	15,618	$	17,730	$	19,076	$	20,424	$	20,555	$	20,617	$	20,630	$	20,630	$	20,630
2008				9,095		14,489		16,224		17,331		17,887		17,947		17,948		17,994		17,994
2009						13,463		21,735		25,929		26,734		27,229		27,340		27,350		27,355
2010								16,110		25,904		30,120		32,192		32,690		33,286		33,349
2011										17,398		28,427		32,127		33,495		34,223		34,375
2012												22,273		35,322		41,500		43,623		44,578
2013														23,834		40,038		45,200		47,270
2014																28,628		47,162		55,131
2015																		37,918		63,932
2016																				42,467
		Total																		$	387,082
Outstanding liabilities for unpaid losses and ALAE prior to 2007, net of reinsurance recoverable																				33
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance recoverable																				$	88,700
(1)	The cumulative number of reported claims is measured by individual claimant at a coverage level.
(2)	Calculated severity amounts by accident year are based on inception-to-date incurred less IBNR and expected development dollars and reported claims. Note that older accident years are more developed than recent accident years.

Reconciliation of net incurred and paid development tables to liability for unpaid losses and LAE

The reconciliation of the net incurred and paid development tables to the liability for unpaid losses and LAE in the consolidated balance sheets is as follows ($ in thousands):

	As of December 31, 2016
Liabilities for unpaid losses and LAE:
Personal Auto	$	485,545
Commercial Vehicle	88,700
Other Lines	7,217
Total liabilities for unpaid losses and LAE, net of reinsurance	581,463
Reinsurance recoverables:
Personal Auto	7,393
Commercial Vehicle	7,941
Other Lines	1,795
Total reinsurance recoverables	17,130
Unallocated loss adjustment expenses	86,862
Gross liability for unpaid losses and LAE	$	685,455

Schedule of average annual payout of incurred losses and ALAE

The following table provides supplementary information about the average annual percentage payout of incurred losses and ALAE, net of reinsurance:

	Average annual payout of losses and LAE, net of reinsurance
	(unaudited)
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Personal Auto	61.3	%	26.9	%	6.9	%	2.7	%	1.1	%	0.7	%	0.3	%	0.1	%	0.0	%	0.0	%
Commercial Vehicle	47.3	%	30.3	%	12.0	%	5.6	%	3.4	%	1.0	%	0.1	%	0.2	%	0.0	%	0.0	%

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Reinsurance (Tables)

12 Months Ended

Dec. 31, 2016

Reinsurance Disclosures [Abstract]

Schedule of reinsurance assumed and ceded

The following table shows written and earned premium included in earnings for reinsurance assumed and amounts deducted from written and earned premium in connection with reinsurance ceded ($ in thousands):

Year	Direct Written Premium		Reinsurance Assumed		Reinsurance Ceded			Net Written Premium		% of Amount Assumed to Net
2016	$	1,401,378	$	36	$	(8,955	)	$	1,392,459	0.0	%
2015	1,387,864		2		(14,579		)	1,373,287		0.0	%
2014	1,360,807		63		(13,266		)	1,347,604		0.0	%
Year	Direct Earned Premium		Reinsurance Assumed		Reinsurance Ceded			Net Earned Premium		% of Amount Assumed to Net
2016	$	1,403,682	$	34	$	(12,052	)	$	1,391,664	0.0	%
2015	1,360,473		4		(13,913		)	1,346,564		0.0	%
2014	1,337,557		57		(11,679		)	1,325,935		0.0	%

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Statutory Information (Tables)

12 Months Ended

Dec. 31, 2016

Insurance [Abstract]

Statutory accounting practices disclosure

Net earnings and capital and surplus on a statutory basis were as follows ($ in thousands):

Statutory Net Earnings						Statutory Capital and Surplus
2016		2015		2014		2016		2015
$	62,247	$	61,379	$	67,360	$	669,301	$	659,777

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Commitments And Contingencies (Tables)

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Schedule of future minimum rental payments for operating leases

Minimum rental commitments under non-cancelable leases with an initial or remaining term of more than one year as of December 31, 2016, were as follows ($ in thousands):

Due In	Operating Leases		Capital Leases
2017	$	4,542	$	722
2018	3,936		711
2019	2,342		698
2020	1,765		333
2021	1,550		202
Thereafter	1,225		0
Total	$	15,360	$	2,666

Schedule of Rent Expense

Lease expense incurred for all leases during the last three years was as follows ($ in thousands):

	Twelve months ended December 31,
	2016		2015		2014
Lease expense	$	6,688	$	9,611	$	10,447

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Additional Information (Tables)

12 Months Ended

Dec. 31, 2016

Additional Information [Abstract]

Schedule of allowances for uncollectible accounts

A progression of the aggregate allowance follows ($ in thousands):

	2016			2015			2014
Beginning balance	$	15,385		$	15,510		$	15,884
Provision for losses	17,095			19,080			19,541
Uncollectible amounts written off	(18,273		)	(19,204		)	(19,916		)
Ending balance	$	14,207		$	15,385		$	15,510

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Accumulated Other Comprehensive Income (Tables)

12 Months Ended

Dec. 31, 2016

Stockholders' Equity Note [Abstract]

Schedule of Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

The components of other comprehensive income before and after tax are as follows ($ in thousands):

Twelve months ended December 31, 2016	Before Tax			Income Tax			Net
Accumulated change in post-retirement benefit liability, beginning of period	$	944		$	(331	)	$	614
Effect on other comprehensive income	88			(31		)	57
Accumulated change in post-retirement benefit liability, end of period	1,033			(361		)	671
Accumulated unrealized gains on investments, net, beginning of period	11,072			(3,875		)	7,197
Other comprehensive income before reclassification	3,205			(1,122		)	2,084
Reclassification adjustment for OTTI losses included in net income	375			(131		)	243
Reclassification adjustment for realized gains included in net income	(3,519		)	1,232			(2,287		)
Effect on other comprehensive income	61			(21		)	40
Accumulated unrealized gains on investments, net, end of period	11,133			(3,896		)	7,236
Accumulated other comprehensive income, beginning of period	12,016			(4,206		)	7,811
Change in post-retirement benefit liability	88			(31		)	57
Change in unrealized gains on investments, net	61			(21		)	40
Effect on other comprehensive income	149			(52		)	97
Accumulated other comprehensive income, end of period	$	12,165		$	(4,258	)	$	7,907
Twelve months ended December 31, 2015
Accumulated change in post-retirement benefit liability, beginning of period	$	174		$	(61	)	$	113
Effect on other comprehensive income	771			(270		)	501
Accumulated change in post-retirement benefit liability, end of period	944			(331		)	614
Accumulated unrealized gains on investments, net, beginning of period	35,972			(12,590		)	23,382
Other comprehensive income before reclassification	(22,091		)	7,732			(14,359		)
Reclassification adjustment for OTTI losses included in net income	1,294			(453		)	841
Reclassification adjustment for realized gains included in net income	(4,102		)	1,436			(2,667		)
Effect on other comprehensive income	(24,900		)	8,715			(16,185		)
Accumulated unrealized gains on investments, net, end of period	11,072			(3,875		)	7,197
Accumulated other comprehensive income, beginning of period	36,145			(12,651		)	23,494
Change in post-retirement benefit liability	771			(270		)	501
Change in unrealized gains on investments, net	(24,900		)	8,715			(16,185		)
Effect on other comprehensive income	(24,129		)	8,445			(15,684		)
Accumulated other comprehensive income, end of period	$	12,016		$	(4,206	)	$	7,811

Twelve months ended December 31, 2014	Before Tax			Income Tax			Net
Accumulated change in post-retirement benefit liability, beginning of period	$	(62	)	$	22		$	(40	)
Effect on other comprehensive income	235			(82		)	153
Accumulated change in post-retirement benefit liability, end of period	174			(61		)	113
Accumulated unrealized gains on investments, net, beginning of period	25,638			(8,973		)	16,665
Other comprehensive income before reclassification	14,618			(5,116		)	9,502
Reclassification adjustment for OTTI losses included in net income	160			(56		)	104
Reclassification adjustment for realized gains included in net income	(4,444		)	1,556			(2,889		)
Effect on other comprehensive income	10,334			(3,617		)	6,717
Accumulated unrealized gains on investments, net, end of period	35,972			(12,590		)	23,382
Accumulated other comprehensive income, beginning of period	25,576			(8,952		)	16,624
Change in post-retirement benefit liability	235			(82		)	153
Change in unrealized gains on investments, net	10,334			(3,617		)	6,717
Effect on other comprehensive income	10,569			(3,699		)	6,870
Accumulated other comprehensive income, end of period	$	36,145		$	(12,651	)	$	23,494

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Segment Information (Tables)

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Schedule of Segment Revenues and Earnings Before Income Taxes

The following table provides revenues by segment and a reconciliation to "Total revenues" as reported on the Consolidated Statements of Earnings ($ in thousands):

	Twelve months ended December 31,
Gross written premium:	2016			2015			2014
Personal Auto	$	1,240,037		$	1,246,492		$	1,237,774
Commercial Vehicle	145,272			126,036			108,640
Classic Collector	16,105			15,339			14,456
Total gross written premium	1,401,414			1,387,866			1,360,870
Ceded reinsurance:
Personal Auto	(4,036		)	(3,301		)	(3,407		)
Commercial Vehicle	(4,098		)	(10,679		)	(9,262		)
Classic Collector	(821		)	(600		)	(597		)
Total ceded reinsurance	(8,955		)	(14,579		)	(13,266		)
Net written premium:
Personal Auto	1,236,001			1,243,191			1,234,367
Commercial Vehicle	141,174			115,357			99,378
Classic Collector	15,284			14,739			13,859
Total net written premium	1,392,459			1,373,287			1,347,604
Change in unearned premium:
Personal Auto	10,401			(17,901		)	(10,506		)
Commercial Vehicle	(10,990		)	(8,395		)	(10,577		)
Classic Collector	(205		)	(427		)	(586		)
Total change in unearned premium	(795		)	(26,723		)	(21,669		)
Earned premium:
Personal Auto	1,246,402			1,225,290			1,223,860
Commercial Vehicle	130,183			106,962			88,801
Classic Collector	15,079			14,312			13,274
Total earned premium	1,391,664			1,346,564			1,325,935
Installment and other fee income:
Personal Auto	97,085			88,738			88,493
Commercial Vehicle	10,276			8,015			6,749
Classic Collector	0			0			0
Total installment and other fee income	107,361			96,753			95,242
Net investment income	35,537			36,800			35,629
Net realized gains on investments	3,145			2,809			4,284
Other income	1,000			1,106			619
Total revenues	$	1,538,706		$	1,484,032		$	1,461,709

The following tables present the underwriting income and combined ratio on a statutory accident year basis with reconciliations to "Earnings before income taxes" as presented on the Consolidated Statements of Earnings ($ in thousands). We do not allocate assets or "Provision for income taxes" to operating segments.

	Twelve months ended December 31, 2016
	Personal Auto				Commercial Vehicle					Classic Collector					Total
	Pre-tax Profit (Loss)		Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)
Statutory accident year underwriting income	$	21,766	98.4	%	$	1,905		97.0	%	$	1,022		92.8	%	$	24,692		98.2	%
Bad debt charge-offs	15,150				1,784					50					16,984
Favorable (unfavorable) development on prior accident years	27,958				(3,582		)			(375		)			24,001
Statutory calendar year underwriting income	64,874		94.9	%	106			98.5	%	697			94.9	%	65,677			95.3	%
Statutory-to-GAAP underwriting income differences															(19,555		)
GAAP calendar year underwriting income															46,122			96.7	%
Net investment income															35,537
Net realized gains on investments															3,145
Other income															1,000
Interest expense															(14,037		)
Corporate general and administrative expenses															(7,899		)
Other expenses															(1,736		)
Earnings before income taxes															$	62,132
(1) Management includes the provision for uncollectible accounts in the underwriting income and combined ratio on both statutory accident year and GAAP calendar year bases.

	Twelve months ended December 31, 2015
	Personal Auto				Commercial Vehicle					Classic Collector				Total
	Pre-tax Profit (Loss)		Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)		Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)
Statutory accident year underwriting income	$	24,876	97.7	%	$	876		97.8	%	$	2,063	84.7	%	$	27,815		97.6	%
Bad debt charge-offs	17,413				1,557					44				19,013
Favorable (unfavorable) development on prior accident years	33,633				(5,176		)			469				28,926
Statutory calendar year underwriting income	75,922		93.6	%	(2,743		)	101.3	%	2,576		81.1	%	75,754			94.0	%
Statutory-to-GAAP underwriting income differences														(16,658		)
GAAP calendar year underwriting income														59,096			95.6	%
Net investment income														36,800
Net realized gains on investments														2,809
Other income														1,106
Interest expense														(14,029		)
Corporate general and administrative expenses														(7,655		)
Other expenses														(3,296		)
Earnings before income taxes														$	74,832
(1) Management includes the provision for uncollectible accounts in the underwriting income and combined ratio on both statutory accident year and GAAP calendar year bases.

	Twelve months ended December 31, 2014
	Personal Auto				Commercial Vehicle					Classic Collector					Total
	Pre-tax Profit (Loss)		Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)		Pre-tax Profit (Loss)			Combined Ratio (1)
Statutory accident year underwriting income	$	46,627	96.0	%	$	(4,033	)	102.3	%	$	1,504		87.2	%	$	44,098		96.4	%
Bad debt charge-offs	18,692				1,314					18					20,025
Favorable (unfavorable) development on prior accident years	848				17,626					(1,070		)			17,405
Statutory calendar year underwriting income	66,168		94.5	%	14,907			81.1	%	453			95.2	%	81,528			93.6	%
Statutory-to-GAAP underwriting income differences															(16,537		)
GAAP calendar year underwriting income															64,990			95.1	%
Net investment income															35,629
Net realized gains on investments															4,284
Other income															619
Interest expense															(13,989		)
Corporate general and administrative expenses															(7,514		)
Other expenses															(882		)
Earnings before income taxes															$	83,138
(1) Management includes the provision for uncollectible accounts in the underwriting income and combined ratio on both statutory accident year and GAAP calendar year bases.

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Significant Reporting and Accounting Policies (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) states	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Concentration Risk [Line Items]
Number of states primarily writes insurance | states	4
Installment and other fee income	$ 107,361	$ 96,753	$ 95,242
Available-for-sale securities	19,800
Advertising costs	9,700	9,100	8,700
Deferred policy acquisition cost, amortization expense	$ (207,100)	$ (203,700)	$ (204,700)
Off premium charges	90 days
Personal auto insurance [Member] | Sales Revenue, Product Line [Member] | Product Concentration Risk [Member]
Concentration Risk [Line Items]
Portion of total gross written premiums (percent)	89.00%
Personal auto insurance [Member] | Sales Revenue, Product Line [Member] | Geographic Concentration Risk [Member] | California
Concentration Risk [Line Items]
Portion of total gross written premiums (percent)	55.00%

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Significant Reporting and Accounting Policies Significant Reporting and Accounting Policies (Details 2) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Gross Asset	$ 166,700
Accumulated Depreciation	(70,559)	$ (72,892)
Net Asset	96,166	$ 89,707
Capital Leases [Abstract]
Capital leases net of depreciation	2,100
Capital lease accumulated depreciation	1,600
Real Estate Related [Member]
Property, Plant and Equipment [Line Items]
Gross Asset	69,500
Accumulated Depreciation	(7,200)
Net Asset	62,300
Computer Equipment & Software [Member]
Property, Plant and Equipment [Line Items]
Gross Asset	82,900
Accumulated Depreciation	(55,600)
Net Asset	27,300
Furniture & Fixtures [Member]
Property, Plant and Equipment [Line Items]
Gross Asset	14,300
Accumulated Depreciation	(7,800)
Net Asset	$ 6,600

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Significant Reporting and Accounting Policies Significant Reporting and Accounting Policies - Affect of Adoption (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other assets	$ 12,777	$ 10,306
Assets	2,402,601	2,385,135
Long-term debt	273,591	273,383
Liabilities	1,703,414	1,697,540
Liabilities and Equity	2,402,601	2,385,135
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax	2,084	(14,359)	$ 9,502
Installment and other fee income	107,361	96,753	$ 95,242
Scenario, Previously Reported [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other assets		11,900
Assets		2,386,800
Long-term debt		275,000
Liabilities		1,699,200
Liabilities and Equity		2,386,800
Restatement Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other assets		(1,600)
Assets		(1,600)
Long-term debt		(1,600)
Liabilities		(1,600)
Liabilities and Equity		$ (1,600)
Equity securities
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax	$ 8,900

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Fair Value - Fair Value by Hierarchy (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	$ 1,483,714	$ 1,476,053
Long-term debt	278,726	281,581
Fixed maturities
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	1,390,167	1,381,467
U.S. government
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	62,485	64,669
State and municipal
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	476,331	479,666
Mortgage-backed securities:
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	410,169	405,008
Residential
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	340,367	334,784
Commercial
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	69,801	70,224
Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	37,608	54,018
Corporates
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	403,575	378,105
Equity securities
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	90,640	89,935
Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	2,907	4,651
Recurring basis
Fair Value, Assets and Liabilities Measured on Recurring Basis
Cash and cash equivalents	92,800	62,483
Total cash and investments	$ 1,576,514	$ 1,538,536
Percentage of total cash and investments	100.00%	100.00%
Recurring basis | Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis
Cash and cash equivalents	$ 92,800	$ 62,483
Total cash and investments	$ 246,689	$ 217,056
Percentage of total cash and investments	15.60%	14.10%
Recurring basis | Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis
Cash and cash equivalents	$ 0	$ 0
Total cash and investments	$ 1,324,888	$ 1,319,946
Percentage of total cash and investments	84.00%	85.80%
Long-term debt	$ 278,700	$ 281,600
Recurring basis | Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis
Cash and cash equivalents	0	0
Total cash and investments	$ 4,938	$ 1,534
Percentage of total cash and investments	0.30%	0.10%
Recurring basis | Fixed maturities
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	$ 1,390,167	$ 1,381,467
Recurring basis | Fixed maturities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	62,480	64,638
Recurring basis | Fixed maturities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	1,322,749	1,315,295
Recurring basis | Fixed maturities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	4,938	1,534
Recurring basis | U.S. government
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	62,485	64,669
Recurring basis | U.S. government | Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	62,480	64,638
Recurring basis | U.S. government | Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	5	32
Recurring basis | U.S. government | Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	0	0
Recurring basis | State and municipal
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	476,331	479,666
Recurring basis | State and municipal | Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	0	0
Recurring basis | State and municipal | Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	472,471	479,656
Recurring basis | State and municipal | Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	3,860	10
Recurring basis | Mortgage-backed securities:
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	410,169	405,008
Recurring basis | Mortgage-backed securities: | Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	0	0
Recurring basis | Mortgage-backed securities: | Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	410,169	405,008
Recurring basis | Mortgage-backed securities: | Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	0	0
Recurring basis | Residential
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	340,367	334,784
Recurring basis | Residential | Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	0	0
Recurring basis | Residential | Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	340,367	334,784
Recurring basis | Residential | Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	0	0
Recurring basis | Commercial
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	69,801	70,224
Recurring basis | Commercial | Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	0	0
Recurring basis | Commercial | Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	69,801	70,224
Recurring basis | Commercial | Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	0	0
Recurring basis | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	37,608	54,018
Recurring basis | Asset-backed securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	0	0
Recurring basis | Asset-backed securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	37,196	54,018
Recurring basis | Asset-backed securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	412	0
Recurring basis | Corporates
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	403,575	378,105
Recurring basis | Corporates | Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	0	0
Recurring basis | Corporates | Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	402,909	376,582
Recurring basis | Corporates | Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	666	1,524
Recurring basis | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	90,640	89,935
Recurring basis | Equity securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	90,640	89,935
Recurring basis | Equity securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	0	0
Recurring basis | Equity securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	0	0
Recurring basis | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	2,907	4,651
Recurring basis | Short-term investments | Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	769	0
Recurring basis | Short-term investments | Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	2,139	4,651
Recurring basis | Short-term investments | Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis
Available-for-sale securities:	$ 0	$ 0

XML

Fair Value - Level 3 Investments (Details) $ in Thousands	3 Months Ended			12 Months Ended
	Mar. 31, 2016 USD ($) security	Sep. 30, 2015 security	Mar. 31, 2015 USD ($) security	Dec. 31, 2016 USD ($) Securities security	Dec. 31, 2015 USD ($)
Level 3 reconciliation
Number of securities | Securities				7
Number of non-binding securities | Securities				3
Number of unaffiliated securities | Securities				1
Number of nationally recognized securities | Securities				3
Number of securities transferred from Level 2 to Level 3 | security	1		1	3
Number of securities transferred from Level 3 to Level 2 | security		1
Recurring basis | Level 3
Level 3 reconciliation
Balance at beginning of period	$ 1,534		$ 3,285	$ 1,534	$ 3,285
Included in net earnings				(13)	(72)
Included in other comprehensive income				(67)	(80)
Purchases				620	0
Settlements				(1,029)	(1,263)
Transfers in				5,232	10
Transfers out				(1,339)	(347)
Balance at end of period				4,938	1,534
Recurring basis | Level 3 | State and municipal
Level 3 reconciliation
Balance at beginning of period	10		0	10	0
Included in net earnings				(25)	0
Included in other comprehensive income				(10)	0
Purchases				0	0
Settlements				(10)	0
Transfers in				3,894	10
Transfers out				0	0
Balance at end of period				3,860	10
Recurring basis | Level 3 | Corporates
Level 3 reconciliation
Balance at beginning of period	1,524		3,134	1,524	3,134
Included in net earnings				12	(71)
Included in other comprehensive income				(60)	(80)
Purchases				0	0
Settlements				(810)	(1,112)
Transfers in				0	0
Transfers out				0	(347)
Balance at end of period				666	1,524
Recurring basis | Level 3 | Asset-Backed Securities
Level 3 reconciliation
Balance at beginning of period	$ 0		$ 150	0	150
Included in net earnings				0	0
Included in other comprehensive income				3	0
Purchases				620	0
Settlements				(209)	(150)
Transfers in				1,338	0
Transfers out				(1,339)	0
Balance at end of period				$ 412	$ 0

XML

Fair Value - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities:	$ 1,483,714	$ 1,476,053
Long-term debt	278,726	281,581
Fixed maturities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities:	1,390,167	1,381,467
Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities:	90,640	89,935
Short-term investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities:	2,907	4,651
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	92,800	62,483
Total cash and investments	1,576,514	1,538,536
Long-term debt	273,591	273,383
Carrying Value | Fixed maturities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities:	1,390,167	1,381,467
Carrying Value | Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities:	90,640	89,935
Carrying Value | Short-term investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities:	2,907	4,651
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	92,800	62,483
Total cash and investments	1,576,514	1,538,536
Long-term debt	278,726	281,581
Fair Value | Fixed maturities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities:	1,390,167	1,381,467
Fair Value | Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities:	90,640	89,935
Fair Value | Short-term investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities:	$ 2,907	$ 4,651

XML

Investments - Textual (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Proceeds from sale of securities	$ 312,300	$ 341,300	$ 250,800
Receivable for securities sold	795	0	4,500
Gross realized gains on sale of securities	6,200	7,200	5,100
Gross realized losses on sale of securities	$ 2,700	$ 3,200	$ 700

XML

Investments - Investments by major category (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost or Cost	$ 1,472,582	$ 1,464,981
Gross Unrealized Gains	22,846	23,640
Gross Unrealized Losses	(11,713)	(12,568)
Fair Value	1,483,714	1,476,053
OTTI Recognized in Accumulated OCI	(2,068)	(2,495)	[1]
Fixed maturities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost or Cost	1,392,660	1,381,510
Gross Unrealized Gains	9,219	12,521
Gross Unrealized Losses	(11,711)	(12,564)
Fair Value	1,390,167	1,381,467
OTTI Recognized in Accumulated OCI	(2,068)	(2,495)	[1]
U.S. government
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost or Cost	62,808	64,849
Gross Unrealized Gains	55	103
Gross Unrealized Losses	(377)	(282)
Fair Value	62,485	64,669
OTTI Recognized in Accumulated OCI	0	0	[1]
State and municipal
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost or Cost	477,834	472,402
Gross Unrealized Gains	2,313	7,393
Gross Unrealized Losses	(3,816)	(129)
Fair Value	476,331	479,666
OTTI Recognized in Accumulated OCI	(51)	(51)	[1]
Mortgage-backed securities:
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost or Cost	413,772	404,691
Gross Unrealized Gains	2,369	3,694
Gross Unrealized Losses	(5,972)	(3,377)
Fair Value	410,169	405,008
OTTI Recognized in Accumulated OCI	(1,967)	(2,374)	[1]
Residential
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost or Cost	343,095	333,554
Gross Unrealized Gains	2,306	3,678
Gross Unrealized Losses	(5,034)	(2,448)
Fair Value	340,367	334,784
OTTI Recognized in Accumulated OCI	(1,967)	(2,374)	[1]
Commercial
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost or Cost	70,676	71,137
Gross Unrealized Gains	63	16
Gross Unrealized Losses	(939)	(929)
Fair Value	69,801	70,224
OTTI Recognized in Accumulated OCI	0	0	[1]
Asset-backed securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost or Cost	37,562	54,106
Gross Unrealized Gains	93	50
Gross Unrealized Losses	(47)	(138)
Fair Value	37,608	54,018
OTTI Recognized in Accumulated OCI	(8)	(8)	[1]
Corporates
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost or Cost	400,685	385,462
Gross Unrealized Gains	4,389	1,281
Gross Unrealized Losses	(1,499)	(8,638)
Fair Value	403,575	378,105
OTTI Recognized in Accumulated OCI	(41)	(61)	[1]
Equity securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost or Cost	77,013	78,815
Gross Unrealized Gains	13,627	11,120
Gross Unrealized Losses	0	0
Fair Value	90,640	89,935
OTTI Recognized in Accumulated OCI	0	0	[1]
Short-term investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost or Cost	2,909	4,656
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(2)	(4)
Fair Value	2,907	4,651
OTTI Recognized in Accumulated OCI	$ 0	$ 0

[1] The total non-credit portion of OTTI recognized in Accumulated OCI reflecting the original non-credit loss at the time the credit impairment was determined.

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Investments - Continuous loss position investments (Details)	12 Months Ended
	Dec. 31, 2016 USD ($) Securities	Dec. 31, 2015 USD ($) Securities
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Gross Unrealized Losses	$ (11,713,000)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | Securities	737	561
Less than 12 Months
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months, Fair Value	$ 770,019,000	$ 532,654,000
Less than 12 months, Gross Unrealized Losses	$ (10,861,000)	$ (9,440,000)
Unrealized Losses as Percentage of Cost	1.40%	1.70%
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	682	469
Less than 12 Months | Fixed maturities
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months., Number of Securities with Unrealized Losses | Securities	679	467
Less than 12 Months, Fair Value	$ 767,112,000	$ 528,003,000
Less than 12 months, Gross Unrealized Losses	$ (10,859,000)	$ (9,436,000)
Unrealized Losses as Percentage of Cost	1.40%	1.80%
Less than 12 Months | U.S. government
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months., Number of Securities with Unrealized Losses | Securities	31	18
Less than 12 Months, Fair Value	$ 47,640,000	$ 36,024,000
Less than 12 months, Gross Unrealized Losses	$ (377,000)	$ (241,000)
Unrealized Losses as Percentage of Cost	0.80%	0.70%
Less than 12 Months | State and municipal
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months., Number of Securities with Unrealized Losses | Securities	146	27
Less than 12 Months, Fair Value	$ 303,428,000	$ 54,680,000
Less than 12 months, Gross Unrealized Losses	$ (3,816,000)	$ (129,000)
Unrealized Losses as Percentage of Cost	1.20%	0.20%
Less than 12 Months | Mortgage-backed securities:
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months., Number of Securities with Unrealized Losses | Securities	395	214
Less than 12 Months, Fair Value	$ 263,119,000	$ 162,547,000
Less than 12 months, Gross Unrealized Losses	$ (5,347,000)	$ (1,785,000)
Unrealized Losses as Percentage of Cost	2.00%	1.10%
Less than 12 Months | Residential
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months., Number of Securities with Unrealized Losses | Securities	381	205
Less than 12 Months, Fair Value	$ 225,117,000	$ 133,814,000
Less than 12 months, Gross Unrealized Losses	$ (4,559,000)	$ (1,436,000)
Unrealized Losses as Percentage of Cost	2.00%	1.10%
Less than 12 Months | Commercial
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months., Number of Securities with Unrealized Losses | Securities	14	9
Less than 12 Months, Fair Value	$ 38,002,000	$ 28,733,000
Less than 12 months, Gross Unrealized Losses	$ (788,000)	$ (349,000)
Unrealized Losses as Percentage of Cost	2.00%	1.20%
Less than 12 Months | Asset-backed securities
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months., Number of Securities with Unrealized Losses | Securities	9	36
Less than 12 Months, Fair Value	$ 7,836,000	$ 35,313,000
Less than 12 months, Gross Unrealized Losses	$ (46,000)	$ (132,000)
Unrealized Losses as Percentage of Cost	0.60%	0.40%
Less than 12 Months | Corporates
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months., Number of Securities with Unrealized Losses | Securities	98	172
Less than 12 Months, Fair Value	$ 145,089,000	$ 239,440,000
Less than 12 months, Gross Unrealized Losses	$ (1,272,000)	$ (7,149,000)
Unrealized Losses as Percentage of Cost	0.90%	2.90%
Less than 12 Months | Equity securities
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months., Number of Securities with Unrealized Losses | Securities	0	0
Less than 12 Months, Fair Value	$ 0	$ 0
Less than 12 months, Gross Unrealized Losses	$ 0	$ 0
Unrealized Losses as Percentage of Cost	0.00%	0.00%
Less than 12 Months | Short-term investments
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months., Number of Securities with Unrealized Losses	3	2
Less than 12 Months, Fair Value	$ 2,907,000	$ 4,651,000
Less than 12 months, Gross Unrealized Losses	$ (2,000)	$ (4,000)
Unrealized Losses as Percentage of Cost	0.10%	0.10%
12 Months or More
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses as Percentage of Cost	1.80%	3.20%
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	55	92
12 Months or More, Fair Value	$ 46,693,000	$ 93,384,000
12 Months or More, Gross Unrealized Losses	$ (852,000)	$ (3,128,000)
12 Months or More | Fixed maturities
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses as Percentage of Cost	1.80%	3.20%
12 Months or More, Number of Securities with Unrealized Losses | Securities	55	92
12 Months or More, Fair Value	$ 46,693,000	$ 93,384,000
12 Months or More, Gross Unrealized Losses	$ (852,000)	$ (3,128,000)
12 Months or More | U.S. government
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses as Percentage of Cost	0.00%	0.90%
12 Months or More, Number of Securities with Unrealized Losses | Securities	0	4
12 Months or More, Fair Value	$ 0	$ 4,687,000
12 Months or More, Gross Unrealized Losses	$ 0	$ (41,000)
12 Months or More | State and municipal
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses as Percentage of Cost	0.00%	0.00%
12 Months or More, Number of Securities with Unrealized Losses | Securities	0	0
12 Months or More, Fair Value	$ 0	$ 0
12 Months or More, Gross Unrealized Losses	$ 0	$ 0
12 Months or More | Mortgage-backed securities:
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses as Percentage of Cost	1.60%	2.10%
12 Months or More, Number of Securities with Unrealized Losses | Securities	47	74
12 Months or More, Fair Value	$ 38,428,000	$ 73,170,000
12 Months or More, Gross Unrealized Losses	$ (625,000)	$ (1,592,000)
12 Months or More | Residential
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses as Percentage of Cost	3.80%	2.50%
12 Months or More, Number of Securities with Unrealized Losses | Securities	40	64
12 Months or More, Fair Value	$ 11,891,000	$ 39,001,000
12 Months or More, Gross Unrealized Losses	$ (474,000)	$ (1,012,000)
12 Months or More | Commercial
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses as Percentage of Cost	0.60%	1.70%
12 Months or More, Number of Securities with Unrealized Losses | Securities	7	10
12 Months or More, Fair Value	$ 26,537,000	$ 34,169,000
12 Months or More, Gross Unrealized Losses	$ (150,000)	$ (580,000)
12 Months or More | Asset-backed securities
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses as Percentage of Cost	0.10%	0.60%
12 Months or More, Number of Securities with Unrealized Losses | Securities	1	2
12 Months or More, Fair Value	$ 519,000	$ 1,153,000
12 Months or More, Gross Unrealized Losses	$ (1,000)	$ (7,000)
12 Months or More | Corporates
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses as Percentage of Cost	2.80%	9.40%
12 Months or More, Number of Securities with Unrealized Losses | Securities	7	12
12 Months or More, Fair Value	$ 7,745,000	$ 14,373,000
12 Months or More, Gross Unrealized Losses	$ (227,000)	$ (1,488,000)
12 Months or More | Equity securities
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses as Percentage of Cost	0.00%	0.00%
12 Months or More, Number of Securities with Unrealized Losses | Securities	0	0
12 Months or More, Fair Value	$ 0	$ 0
12 Months or More, Gross Unrealized Losses	$ 0	$ 0
12 Months or More | Short-term investments
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses as Percentage of Cost	0.00%	0.00%
12 Months or More, Number of Securities with Unrealized Losses	0	0
12 Months or More, Fair Value	$ 0	$ 0
12 Months or More, Gross Unrealized Losses	0	$ 0
12 Months or more [Member]
Schedule of Available-for-sale Securities [Line Items]
12 Months or More, Fair Value	46,693,000
12 Months or More, Gross Unrealized Losses	$ (852,000)
Maximum [Member]
Schedule of Available-for-sale Securities [Line Items]
Threshold for impairment evaluation, percentage of book value	95.00%
Minimum
Schedule of Available-for-sale Securities [Line Items]
Threshold for impairment evaluation, unrealized loss amount	$ 100,000

XML

Investments - Summary of unrealized gains and losses (Details)	12 Months Ended
	Dec. 31, 2016 USD ($) Securities	Dec. 31, 2015 USD ($) Securities
Investments, Debt and Equity Securities [Abstract]
Number of positions held with unrealized gains	527	602
Number of positions held with unrealized losses	737	561
Number of positions held that individually exceed unrealized gains of $500,000	1.00	2
Individual unrealized gain threshold | $	$ 500,000	$ 500,000
Number of positions held that individually exceed unrealized losses of $500,000	0	0
Individual unrealized loss threshold | $	$ 500,000	$ 500,000
Percentage of positions held with unrealized gains that were investment grade	85.00%	94.00%
Percentage of positions held with unrealized losses that were investment grade	97.00%	89.00%
Percentage of fair value held with unrealized gains that were investment grade	84.00%	95.00%
Percentage of fair value held with unrealized losses that were investment grade	97.00%	88.00%

XML

Investments - Unrealized losses by age and severity (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Fair Value of Securities with Unrealized Losses	$ 816,712
Total Gross Unrealized Losses	(11,713)
0-3 months
Schedule of Available-for-sale Securities [Line Items]
Fair Value of Securities with Unrealized Losses, 0-12 Months	643,988
Total Gross Unrealized Losses, 0-12 Months	(7,965)
3-6 months
Schedule of Available-for-sale Securities [Line Items]
Fair Value of Securities with Unrealized Losses, 0-12 Months	117,157
Total Gross Unrealized Losses, 0-12 Months	(2,766)
6-9 months
Schedule of Available-for-sale Securities [Line Items]
Fair Value of Securities with Unrealized Losses, 0-12 Months	5,039
Total Gross Unrealized Losses, 0-12 Months	(80)
9-12 months
Schedule of Available-for-sale Securities [Line Items]
Fair Value of Securities with Unrealized Losses, 0-12 Months	3,836
Total Gross Unrealized Losses, 0-12 Months	(51)
Greater than twelve months
Schedule of Available-for-sale Securities [Line Items]
Fair Value of Securities with Unrealized Losses, Greater Than 12 Months	46,693	$ 93,384
Total Gross Unrealized Losses, Greater Than 12 Months	(852)	$ (3,128)
Less Than 5% as a Percentage of Amortized Cost or Cost
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses	(11,336)
Less Than 5% as a Percentage of Amortized Cost or Cost | 0-3 months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, 0-12 Months	(7,922)
Less Than 5% as a Percentage of Amortized Cost or Cost | 3-6 months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, 0-12 Months	(2,586)
Less Than 5% as a Percentage of Amortized Cost or Cost | 6-9 months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, 0-12 Months	(80)
Less Than 5% as a Percentage of Amortized Cost or Cost | 9-12 months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, 0-12 Months	(51)
Less Than 5% as a Percentage of Amortized Cost or Cost | Greater than twelve months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, Greater Than 12 Months	(698)
5% - 10% as a Percentage of Amortized Cost or Cost
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses	(297)
5% - 10% as a Percentage of Amortized Cost or Cost | 0-3 months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, 0-12 Months	(43)
5% - 10% as a Percentage of Amortized Cost or Cost | 3-6 months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, 0-12 Months	(180)
5% - 10% as a Percentage of Amortized Cost or Cost | 6-9 months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, 0-12 Months	0
5% - 10% as a Percentage of Amortized Cost or Cost | 9-12 months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, 0-12 Months	0
5% - 10% as a Percentage of Amortized Cost or Cost | Greater than twelve months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, Greater Than 12 Months	(74)
Greater Than 10% as a Percentage of Amortized Cost or Cost
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses	(81)
Greater Than 10% as a Percentage of Amortized Cost or Cost | 0-3 months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, 0-12 Months	0
Greater Than 10% as a Percentage of Amortized Cost or Cost | 3-6 months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, 0-12 Months	0
Greater Than 10% as a Percentage of Amortized Cost or Cost | 6-9 months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, 0-12 Months	0
Greater Than 10% as a Percentage of Amortized Cost or Cost | 9-12 months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, 0-12 Months	0
Greater Than 10% as a Percentage of Amortized Cost or Cost | Greater than twelve months
Schedule of Available-for-sale Securities [Line Items]
Total Gross Unrealized Losses, Greater Than 12 Months	$ (81)

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Investments - Change in unrealized gains and losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Unrealized holding gains (losses) on securities arising during the period, pre-tax	$ 3,205	$ (22,091)	$ 14,618
Realized (gains) losses on securities sold, pre-tax	3,519	4,102	4,444
Impairment losses recognized in net earnings, pre-tax	(375)	(1,294)	(160)
Unrealized holding gains (losses) on securities arising during the period, tax effects	(1,122)	7,732	(5,116)
Realized (gains) losses on securities sold, tax effects	1,232	1,436	1,556
Impairment losses recognized in net earnings, tax effect	(131)	(453)	(56)
Change in unrealized gains (losses) on marketable securities, net, tax effects	(21)	8,715	(3,617)
Unrealized holding gains (losses) on securities arising during period, net of tax	2,084	(14,359)	9,502
Realized (gains) losses on securities sold, net of tax	2,287	2,667	2,889
Impairment loss recognized in earnings, net of tax	243	841	104
Change in unrealized gains (losses) on marketable securities, net, net of tax	40	(16,185)	6,717
Fixed maturities
Schedule of Available-for-sale Securities [Line Items]
Unrealized holding gains (losses) on securities arising during the period, pre-tax	(2,153)	(18,699)	13,174
Realized (gains) losses on securities sold, pre-tax	(671)	(2,064)	(3,137)
Impairment losses recognized in net earnings, pre-tax	375	1,294	160
Unrealized gains (losses) on investments, net, pre-tax	(2,449)	(19,469)	10,198
Equity securities
Schedule of Available-for-sale Securities [Line Items]
Unrealized holding gains (losses) on securities arising during the period, pre-tax	5,359	(3,388)	1,440
Realized (gains) losses on securities sold, pre-tax	(2,851)	(2,039)	(1,303)
Impairment losses recognized in net earnings, pre-tax	0	0	0
Unrealized gains (losses) on investments, net, pre-tax	2,508	(5,427)	137
Unrealized holding gains (losses) on securities arising during period, net of tax	8,900
Short-term investments
Schedule of Available-for-sale Securities [Line Items]
Unrealized holding gains (losses) on securities arising during the period, pre-tax	0	(4)	4
Realized (gains) losses on securities sold, pre-tax	3	0	(5)
Impairment losses recognized in net earnings, pre-tax	0	0	0
Unrealized gains (losses) on investments, net, pre-tax	$ 2	$ (4)	$ (1)

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Investments - Credit losses rollforward (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Credit losses on fixed maturity securities
Balance at beginning of year	$ 683	$ 852
Reductions for securities sold and paydowns	(127)	(168)
Balance at end of year	$ 557	$ 683

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Investments - Investments by contractual maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
One year or less, fair value	$ 114,823
One year or less, amortized cost	114,372
After one year through five years, fair value	592,519
After one year through five years, amortized cost	591,872
After five years through ten years, fair value	233,287
After five years through ten years, amortized cost	233,404
After ten years, fair value	1,763
After ten years, amortized cost basis	1,679
Mortgage-backed, asset-backed and collateralized mortgage obligations, fair value	447,776
Mortgage-backed, asset-backed and collateralized mortgage obligations, amortized cost	451,333
Fixed maturities	1,390,167	$ 1,381,467
Fixed maturities, amortized costs	1,392,660	$ 1,381,510
Securities with Unrealized Gains
Schedule of Available-for-sale Securities [Line Items]
One year or less, fair value	84,529
After one year through five years, fair value	244,604
After five years through ten years, fair value	102,369
After ten years, fair value	1,763
Mortgage-backed, asset-backed and collateralized mortgage obligations, fair value	137,873
Fixed maturities	571,138
Securities with Unrealized Losses
Schedule of Available-for-sale Securities [Line Items]
One year or less, fair value	27,794
After one year through five years, fair value	346,357
After five years through ten years, fair value	129,751
After ten years, fair value	0
Mortgage-backed, asset-backed and collateralized mortgage obligations, fair value	309,903
Fixed maturities	813,805
Securities with No Unrealized Gains or Losses
Schedule of Available-for-sale Securities [Line Items]
One year or less, fair value	2,500
After one year through five years, fair value	1,557
After five years through ten years, fair value	1,167
After ten years, fair value	0
Mortgage-backed, asset-backed and collateralized mortgage obligations, fair value	0
Fixed maturities	$ 5,224

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Investments-Investment Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]
Interest income on fixed maturities, cash and cash equivalents	$ 35,528	$ 36,871	$ 35,596
Dividends on equity securities	2,231	2,194	2,245
Gross investment income	37,759	39,065	37,841
Investment expenses	(2,222)	(2,265)	(2,211)
Net investment income	$ 35,537	$ 36,800	$ 35,629

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Long-Term Debt - Long-term Debt Less Unamortized Debt Issuance Costs (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015	Sep. 30, 2012
Debt Instrument [Line Items]
Long-term debt less unamortized debt issuance costs	$ 273,591,000	$ 273,383,000
Senior Notes | Senior Notes Due 2022
Debt Instrument [Line Items]
Principal	275,000,000	275,000,000	$ 275,000,000
Unamortized debt issuance costs	1,409,000	1,617,000
Long-term debt less unamortized debt issuance costs	$ 273,591,000	$ 273,383,000

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Long-Term Debt (Details) - USD ($)	1 Months Ended	12 Months Ended
	Aug. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Sep. 30, 2012
Debt Instrument [Line Items]
Interest payments on debt		$ 13,800,000	$ 13,800,000	$ 13,800,000
US Treasury Notes Securities [Member]
Debt Instrument [Line Items]
Fair Value, Debt Instrument, Valuation Basis, US Treasury Note Rate, Term of Note Used			10 years
Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility capacity	$ 50,000,000
Term of revolving credit facility	3 years
Senior Notes Due 2022 | Senior Notes
Debt Instrument [Line Items]
Principal		275,000,000	$ 275,000,000		$ 275,000,000
Coupon rate					5.00%
Debt Issuance Costs, Gross					$ 2,200,000
Long-term Debt, Fair Value		$ 278,700,000
Fair value spread to U.S. Treasury Note rate		2.28%
Treasury note rate used for debt fair value calculation		2.446%

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Income Taxes-reconciliation to GAAP effective tax rate (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Income tax payments	$ 6,700	$ 28,500	$ 20,900
Federal statutory income tax rate (percent)	35.00%
Remaining interest of inactive company purchased	49.00%
Income tax reconciliation
Earnings before income taxes	$ 62,132	74,832	83,138
Income taxes at statutory rates	21,746	26,191	29,098
Dividends-received deduction	(466)	(458)	(469)
Tax-exempt interest	(2,456)	(2,713)	(2,752)
Other	223	331	59
Provision for income taxes	$ 19,047	$ 23,351	$ 25,936
GAAP effective tax rate (percent)	30.70%	31.20%	31.20%

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Income Taxes-Provision for income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Operating Loss Carryforwards [Line Items]
Current	$ 14,782	$ 23,133	$ 25,342
Deferred	4,265	218	594
Provision for income taxes	$ 19,047	$ 23,351	$ 25,936

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Income Taxes-Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Deferred tax assets:
Discount on loss reserves	$ 4,853	$ 5,344
Unearned premium reserve	42,844	42,788
Bad debts	4,972	5,385
Accrued bonuses	2,250	1,863
Deferred compensation	6,152	5,827
Long-term incentive compensation	814	1,081
Other	5,089	4,681
Gross deferred tax assets	66,974	66,969
Valuation allowance for deferred tax assets	(326)	(166)
Deferred tax assets, net of valuation allowance	66,648	66,803
Deferred tax liabilities:
Deferred policy acquisition costs	(31,897)	(32,605)
Investment securities – unrealized gains	(3,896)	(3,875)
Fixed assets	(5,037)	0
Other	(1,405)	(1,592)
Net deferred tax assets	(42,235)	(38,072)
Net deferred tax assets	24,413	28,731
Current income taxes	(2,778)	5,195
Current and deferred income taxes	$ 21,635	$ 33,926

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Computation Of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Computation of net earnings per share
Net earnings	$ 21,609	$ 2,753	$ 11,015	$ 7,708	$ 11,097	$ 15,737	$ 13,493	$ 11,154	$ 21,352	$ 14,855	$ 10,667	$ 10,327	$ 43,085	$ 51,481	$ 57,201
Average basic shares outstanding (shares)													11,018	11,334	11,440
Basic earnings per share (usd per share)	$ 1.96	$ 0.25	$ 1.00	$ 0.70	$ 0.99	$ 1.39	$ 1.18	$ 0.98	$ 1.87	$ 1.30	$ 0.93	$ 0.90	$ 3.91	$ 4.54	$ 5.00
Average diluted shares outstanding (shares)													11,101	11,417	11,562
Diluted earnings per share (usd per share)	$ 1.95	$ 0.25	$ 0.99	$ 0.69	$ 0.99	$ 1.38	$ 1.18	$ 0.97	$ 1.85	$ 1.29	$ 0.92	$ 0.89	$ 3.88	$ 4.51	$ 4.95
Restricted stock
Computation of net earnings per share
Dilutive shares													26	16	37
Stock options
Computation of net earnings per share
Dilutive shares													0	0	1
Performance Shares
Computation of net earnings per share
Dilutive shares													57	67	84

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Share-Based Compensation - Plans (Details)	May 21, 2013 shares
2013 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance (shares)	750,000

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Share-Based Compensation - Share Awards (Details) - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Non-employee Directors' Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued, net of forfeitures (shares)		0	0
2013 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued, net of forfeitures (shares)	31,719	5,400	54,344
Prior Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued, net of forfeitures (shares)		37,155	55,245
Officers | 2013 Plan | Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued, net of forfeitures (shares)	0	(1,613)	46,328
Officers | 2013 Plan | Non-employee Directors' Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued, net of forfeitures (shares)	7,596	7,013	8,016
Officers | 2013 Plan | Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued, net of forfeitures (shares)	24,123	0	0
Officers | Prior Plan | Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued, net of forfeitures (shares)		0	0
Officers | Prior Plan | Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued, net of forfeitures (shares)		37,155	55,245

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Share-Based Compensation - Compensation Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expense Recognized in Earnings	$ 2,343	$ 3,148	$ 2,634
Tax Benefit	804	1,086	903
Restricted Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expense Recognized in Earnings	1,037	799	1,126
Tax Benefit	363	280	394
Directors Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expense Recognized in Earnings	600	510	520
Tax Benefit	210	178	182
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expense Recognized in Earnings	46	45	55
Tax Benefit	0	0	0
PSP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expense Recognized in Earnings	661	1,795	933
Tax Benefit	$ 231	$ 628	$ 327

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Share-Based Compensation Share-Based Compensation - Restricted Stock Activity (Details) - $ / shares	Oct. 19, 2018	Aug. 05, 2017	Dec. 31, 2016
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested options (in shares)			44,715
Nonvested options (in dollars per share)			$ 69.54
Forecast | Officers | 2013 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares expected to vest (in shares)		37,244
Awards granted (shares)	7,471

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Share-Based Compensation - Employee Stock Purchase Plan (Details) - ESPP	12 Months Ended
	Dec. 31, 2016 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for issuance (in shares)	1,000,000
Outstanding (in shares)	72,989
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Discount from market price on purchase date	15.00%
Maximum percentage of employee base salary	25.00%
Maximum annual purchase amount per employee | $	$ 25,000

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Benefit Plans-Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Maximum employee annual contribution	$ 18,000
Maximum employee annual contribution, percent	25.00%
Minimum age eligible for catch-up contributions	50 years
Maximum employee annual catch-up contribution	$ 6,000
Maximum annual contribution per employee, amount	13,250
Employer contribution	5,100,000	$ 4,900,000	$ 5,100,000
Unrecognized actuarial gain, gross	(1,200,000)
Unrecognized actuarial gain, net	800,000
Net prior service cost, before tax	200,000
Net prior service cost, after tax	100,000
Amortization of net gains (losses)	100,000
Amortization of prior service cost	100,000
Funded status at end of year	(3,613,000)	(3,729,000)
Estimated future employer contributions in next fiscal year	300,000
Benefit obligation	3,613,000	3,729,000	4,313,000
Deferred compensation, excluding share-based payments and retirement benefits [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Recorded liability	17,600,000	16,600,000	15,300,000
Interest expense	700,000	600,000	700,000
Supplemental Employee Retirement Plan, Defined Benefit [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Employer contribution	100,000	$ 100,000	$ 100,000
Rabbi Trust [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Investments in the rabbi trust	$ 2,000,000
Threshold One [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Maximum employer annual contribution per employee, (percent)	4.00%
Employer match after initial threshold, percent	100.00%
Threshold Two [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Maximum employer annual contribution per employee, (percent)	2.00%
Employer match after initial threshold, percent	50.00%

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Benefit Plans-Net Benefit Obligation at End of Year (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Net benefit obligation at end of year	$ 3,729	$ 4,313
Service cost	183	235	$ 198
Interest cost	132	146	150
Participant contributions	37	30
Assumption change	44	(280)
Actuarial gain	(176)	(425)
Gross benefits paid	(338)	(289)
Net benefit obligation at end of year	$ 3,613	$ 3,729	$ 4,313

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Benefit Plans-Weighted Average Assumptions (Details)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract]
Discount rate	3.60%	3.70%	3.50%
Health care cost trend rate assumed for next fiscal year	8.00%
Ultimate health care cost trend rate	5.00%
Year that rate reaches ultimate trend rate	2038

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Benefit Plans-Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service cost	$ 183	$ 235	$ 198
Interest cost	132	146	150
Amortization of prior service cost	71	71	71
Amortization of net cumulative gain	(114)	(5)	(81)
Net periodic post-retirement benefit cost	$ 273	$ 447	$ 339

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Benefit Plans-Effect of One-Percentage Point Change in Assumed Health Care Cost Trend Rates (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan, Effect of One-Percentage Point Change in Assumed Health Care Cost Trend Rates [Abstract]
Post-retirement benefit obligations 1% increase	$ 184	$ 304	$ 396
Post-retirement benefit obligations 1% decrease	(162)	(269)	(348)
Service and interest cost components 1% increase	40	49	40
Service and interest cost components 1% decrease	$ (34)	$ (42)	$ (34)

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Benefit Plans-Fair Value of Plan Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	$ 0	$ 0
Employer contributions	301	259
Participant contributions	37	30
Gross benefits paid	(338)	(289)
Fair value of plan assets at end of year	$ 0	$ 0

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Benefit Plans- Amount Recognized in Balance Sheet (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Compensation and Retirement Disclosure [Abstract]
Fair value of plan assets	$ 0	$ 0	$ 0
Benefit obligation	3,613	3,729	$ 4,313
Funded status at end of year	(3,613)	(3,729)
Contributions made after the measurement date	0	0
Unrecognized actuarial net (gain) loss	0	0
Unrecognized prior service cost	$ 0	$ 0

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Benefit Plans- Expected Future Benefit Payments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity [Abstract]
Next twelve months	$ 295	$ 301	$ 259
Year two	287	280	294
Year three	289	281	304
Year four	281	294	314
Year five	283	287	337
Years five through ten	1,549	1,583	1,840
Total expected future benefit payments	2,983	$ 3,026	$ 3,348
Estimated future employer contributions in next fiscal year	$ 300

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Quarterly Operating Results (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Quarterly Financial Information Disclosure [Abstract]
Total revenues	$ 415,336	$ 378,124	$ 375,084	$ 370,162	$ 369,919	$ 372,383	$ 374,757	$ 366,973	$ 365,982	$ 366,160	$ 367,954	$ 361,613	$ 1,538,706	$ 1,484,032	$ 1,461,709
Net earnings	$ 21,609	$ 2,753	$ 11,015	$ 7,708	$ 11,097	$ 15,737	$ 13,493	$ 11,154	$ 21,352	$ 14,855	$ 10,667	$ 10,327	$ 43,085	$ 51,481	$ 57,201
Basic earnings per share (usd per share)	$ 1.96	$ 0.25	$ 1.00	$ 0.70	$ 0.99	$ 1.39	$ 1.18	$ 0.98	$ 1.87	$ 1.30	$ 0.93	$ 0.90	$ 3.91	$ 4.54	$ 5.00
Diluted earnings per share (usd per share)	$ 1.95	$ 0.25	$ 0.99	$ 0.69	$ 0.99	$ 1.38	$ 1.18	$ 0.97	$ 1.85	$ 1.29	$ 0.92	$ 0.89	$ 3.88	$ 4.51	$ 4.95
Realized gains (losses) on investments	$ 1,887	$ 1,282	$ (164)	$ 139	$ 1,835	$ (410)	$ 214	$ 1,169	$ 781	$ 1,013	$ 1,846	$ 645	$ 3,145	$ 2,809	$ 4,284

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Insurance Reserves - Changes in Liability for Losses and LAE (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Balance at Beginning of Period [Abstract]
Unpaid losses on known claims	$ 237,660	$ 235,037	$ 221,447
IBNR losses	290,097	277,482	262,660
LAE	142,207	155,658	162,469
Total unpaid losses and LAE	669,965	668,177	646,577
Reinsurance recoverables	(14,694)	(14,370)	(14,431)
Unpaid losses and LAE, net of reinsurance recoverables	655,271	653,808	632,146
Current Activity [Abstract]
Loss and LAE incurred, current accident year	1,120,756	1,064,927	1,019,033
Favorable (unfavorable) development on prior accident years	(24,001)	(28,926)	(17,405)
Total loss and LAE incurred	1,096,755	1,036,001	1,001,628
Loss and LAE payments, current accident year	(687,554)	(656,317)	(602,732)
Loss and LAE payments, prior accident years	(396,147)	(378,221)	(377,235)
Total loss and LAE payments	(1,083,701)	(1,034,538)	(979,967)
Balance at End of Period [Abstract]
Unpaid losses and LAE, net of reinsurance recoverables	668,325	655,271	653,808
Add back reinsurance recoverables	17,130	14,694	14,370
Total unpaid losses and LAE	685,455	669,965	668,177
Unpaid losses on known claims	238,412	237,660	235,037
IBNR losses	306,641	290,097	277,482
LAE	$ 140,402	$ 142,207	$ 155,658

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Insurance Reserves - Incurred Losses and Cumulative Paid Claims for Prior Ten Accident Years (Details) $ in Thousands	Dec. 31, 2016 USD ($) reported_claim $ / reported_claim	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)	Dec. 31, 2008 USD ($)	Dec. 31, 2007 USD ($)
Claims Development [Line Items]
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance recoverable	$ 581,463
Personal Auto
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	6,784,508
Cumulative paid losses and ALAE, net of reinsurance recoverable	6,300,193
Outstanding liabilities for unpaid losses and ALAE prior to 2007, net of reinsurance recoverable	1,230
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance recoverable	485,545
Commercial Vehicle
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	475,750
Cumulative paid losses and ALAE, net of reinsurance recoverable	387,082
Outstanding liabilities for unpaid losses and ALAE prior to 2007, net of reinsurance recoverable	33
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance recoverable	88,700
2007 | Personal Auto
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	577,777	$ 577,577	$ 577,799	$ 578,429	$ 578,186	$ 582,153	$ 585,525	$ 596,818	$ 612,555	$ 600,087
IBNR & expected development on reported claims	$ 0
Cumulative number of reported claims | reported_claim	283,087
Severity | $ / reported_claim	2,041
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 577,640	577,383	577,147	576,656	575,600	574,082	568,792	556,520	522,711	359,059
2007 | Commercial Vehicle
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	20,631	20,631	20,639	20,674	20,781	21,099	21,935	23,028	23,743	25,689
IBNR & expected development on reported claims	$ 0
Cumulative number of reported claims | reported_claim	6,356
Severity | $ / reported_claim	3,246
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 20,630	20,630	20,630	20,617	20,555	20,424	19,076	17,730	15,618	$ 9,570
2008 | Personal Auto
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	509,058	509,250	509,922	511,490	511,141	513,175	517,125	533,293	545,873
IBNR & expected development on reported claims	$ 4
Cumulative number of reported claims | reported_claim	247,202
Severity | $ / reported_claim	2,059
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 508,960	508,831	508,674	507,822	505,063	499,876	485,866	453,092	320,317
2008 | Commercial Vehicle
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	17,996	17,996	17,973	18,045	18,320	18,893	18,960	21,187	24,457
IBNR & expected development on reported claims	$ 0
Cumulative number of reported claims | reported_claim	6,595
Severity | $ / reported_claim	2,729
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 17,994	17,994	17,948	17,947	17,887	17,331	16,224	14,489	$ 9,095
2009 | Personal Auto
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	473,359	473,000	472,523	471,714	471,867	472,772	473,328	497,393
IBNR & expected development on reported claims	$ 10
Cumulative number of reported claims | reported_claim	230,828
Severity | $ / reported_claim	2,051
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 473,074	471,789	470,032	465,453	460,463	447,178	408,535	285,154
2009 | Commercial Vehicle
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	27,385	27,402	27,533	27,598	28,943	31,226	31,903	35,627
IBNR & expected development on reported claims	$ 0
Cumulative number of reported claims | reported_claim	9,059
Severity | $ / reported_claim	3,023
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 27,355	27,350	27,340	27,229	26,734	25,929	21,735	$ 13,463
2010 | Personal Auto
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	557,477	558,936	557,625	559,253	557,592	554,167	541,302
IBNR & expected development on reported claims	$ 16
Cumulative number of reported claims | reported_claim	270,702
Severity | $ / reported_claim	2,059
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 556,781	554,410	550,025	543,884	527,538	485,920	325,911
2010 | Commercial Vehicle
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	33,460	33,845	33,397	34,539	35,881	39,149	41,321
IBNR & expected development on reported claims	$ 44
Cumulative number of reported claims | reported_claim	11,202
Severity | $ / reported_claim	2,983
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 33,349	33,286	32,690	32,192	30,120	25,904	$ 16,110
2011 | Personal Auto
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	635,905	638,507	637,569	638,400	633,011	608,636
IBNR & expected development on reported claims	$ 578
Cumulative number of reported claims | reported_claim	307,904
Severity | $ / reported_claim	2,063
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 633,861	629,992	621,919	602,523	554,245	374,367
2011 | Commercial Vehicle
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	34,507	35,130	35,052	36,202	39,094	40,294
IBNR & expected development on reported claims	$ 60
Cumulative number of reported claims | reported_claim	11,497
Severity | $ / reported_claim	2,996
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 34,375	34,223	33,495	32,127	28,427	$ 17,398
2012 | Personal Auto
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	748,166	751,601	751,262	750,522	739,820
IBNR & expected development on reported claims	$ 5,644
Cumulative number of reported claims | reported_claim	360,236
Severity | $ / reported_claim	2,061
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 739,354	731,205	711,636	655,303	450,434
2012 | Commercial Vehicle
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	45,832	46,405	46,284	46,950	51,085
IBNR & expected development on reported claims	$ 706
Cumulative number of reported claims | reported_claim	13,118
Severity | $ / reported_claim	3,440
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 44,578	43,623	41,500	35,322	$ 22,273
2013 | Personal Auto
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	782,369	789,428	805,460	805,039
IBNR & expected development on reported claims	$ 11,736
Cumulative number of reported claims | reported_claim	364,784
Severity | $ / reported_claim	2,113
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 762,770	744,188	692,039	480,464
2013 | Commercial Vehicle
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	51,407	52,083	51,438	62,157
IBNR & expected development on reported claims	$ 1,123
Cumulative number of reported claims | reported_claim	14,426
Severity | $ / reported_claim	3,486
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 47,270	45,200	40,038	$ 23,834
2014 | Personal Auto
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	784,928	796,084	807,278
IBNR & expected development on reported claims	$ 21,812
Cumulative number of reported claims | reported_claim	354,013
Severity | $ / reported_claim	2,156
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 744,687	694,607	485,384
2014 | Commercial Vehicle
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	64,682	63,304	65,724
IBNR & expected development on reported claims	$ 2,128
Cumulative number of reported claims | reported_claim	16,735
Severity | $ / reported_claim	3,738
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 55,131	47,162	$ 28,628
2015 | Personal Auto
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	841,144	839,059
IBNR & expected development on reported claims	$ 41,629
Cumulative number of reported claims | reported_claim	365,037
Severity | $ / reported_claim	2,190
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 748,850	530,264
2015 | Commercial Vehicle
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	84,314	81,849
IBNR & expected development on reported claims	$ 3,271
Cumulative number of reported claims | reported_claim	20,043
Severity | $ / reported_claim	4,043
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 63,932	$ 37,918
2016 | Personal Auto
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	874,326
IBNR & expected development on reported claims	$ 206,058
Cumulative number of reported claims | reported_claim	343,254
Severity | $ / reported_claim	1,947
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 554,216
2016 | Commercial Vehicle
Claims Development [Line Items]
Incurred losses and ALAE, net of reinsurance recoverable	95,536
IBNR & expected development on reported claims	$ 29,491
Cumulative number of reported claims | reported_claim	20,309
Severity | $ / reported_claim	3,252
Cumulative paid losses and ALAE, net of reinsurance recoverable	$ 42,467

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Insurance Reserves - Reconciliation of Net Incurred and Paid Development Tables to Liability for Unpaid Losses and LAE (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Liabilities for unpaid losses and LAE, net of reinsurance	$ 581,463
Reinsurance recoverables	17,130	$ 14,694	$ 14,370	$ 14,431
Unallocated loss adjustment expenses	86,862
Gross liability for unpaid losses and LAE	685,455	$ 669,965	$ 668,177	$ 646,577
Personal Auto
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Liabilities for unpaid losses and LAE, net of reinsurance	485,545
Reinsurance recoverables	7,393
Commercial Vehicle
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Liabilities for unpaid losses and LAE, net of reinsurance	88,700
Reinsurance recoverables	7,941
Other Lines
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Liabilities for unpaid losses and LAE, net of reinsurance	7,217
Reinsurance recoverables	$ 1,795

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Insurance Reserves - Average Annual Percentage Payout (Details)	Dec. 31, 2016
Personal Auto
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]
Year 1	61.30%
Year 2	26.90%
Year 3	6.90%
Year 4	2.70%
Year 5	1.10%
Year 6	0.70%
Year 7	0.30%
Year 8	0.10%
Year 9	0.00%
Year 10	0.00%
Commercial Vehicle
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]
Year 1	47.30%
Year 2	30.30%
Year 3	12.00%
Year 4	5.60%
Year 5	3.40%
Year 6	1.00%
Year 7	0.10%
Year 8	0.20%
Year 9	0.00%
Year 10	0.00%

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Reinsurance-Table (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Reinsurance Disclosures [Abstract]
Direct written premium, gross amount	$ 1,401,378	$ 1,387,864	$ 1,360,807
Direct written premium, amount assumed from other companies	36	2	63
Direct written premium, amount ceded to other companies	(8,955)	(14,579)	(13,266)
Direct written premium, net amount	$ 1,392,459	$ 1,373,287	$ 1,347,604
Direct written premium, percentage of amount assumed to net	0.00%	0.00%	0.00%
Direct earned premium, gross amount	$ 1,403,682	$ 1,360,473	$ 1,337,557
Direct earned premium, amount assumed from other companies	34	4	57
Direct earned premium, amount ceded to other companies	(12,052)	(13,913)	(11,679)
Direct earned premium, net amount	$ 1,391,664	$ 1,346,564	$ 1,325,935
Direct earned premium, percentage of amount assumed to net	0.00%	0.00%	0.00%

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Reinsurance- Narrative (Details) - USD ($)		12 Months Ended
	Jun. 01, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Liability for unpaid losses and LAE		$ 9,700,000	$ 10,000,000	$ 11,100,000
Amount assumed from other companies (less than)			$ 1,000	$ 0
Catastrophe reinsurance, additional coverage, third party recovery, percentage			100.00%	100.00%
Additional coverage, loss coverage base per event		95,000,000	$ 55,000,000	$ 55,000,000
Additional coverage, minimum loss threshold per event		5,000,000	5,000,000	5,000,000
Property catastrophe reinsurance, first layer		$ 10,000,000
First layer percentage reinsured		50.00%
Remaining layers percentage reinsured		100.00%
Unearned premium returned due to termination of excess loss contract		$ 5,900,000
Ceding commissions		1,800,000
Reduction in losses due to amount ceded to other companies		8,000,000	4,300,000	3,500,000
General liability [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Quota share for general liability	75.00%
Involuntary Pools and Associations [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Amount assumed from other companies (less than)		100,000	$ 100,000	$ 100,000
Commercial Auto Insurance [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Maximum third party recovery	$ 500,000
Minimum loss threshold per event	$ 500,000
Extra-Contractual Loss Reinsurance [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Maximum third party recovery		10,000,000
Minimum loss threshold per event		$ 5,000,000

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Statutory Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Insurance [Abstract]
Statutory net earnings	$ 62,247	$ 61,379	$ 67,360
Statutory policyholders' surplus	669,301	$ 659,777
Statutory capital and surplus required	141,900
Amount available for dividend distribution without prior approval from regulatory agency	$ 59,300

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Commitments And Contingencies Details (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2017	$ 4,542
2018	3,936
2019	2,342
2020	1,765
2021	1,550
Thereafter	1,225
Total	$ 15,360
Operating leases, lease expiration period	7 years
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2017	$ 722
2018	711
2019	698
2020	333
2021	202
Thereafter	0
Total	2,666
Lease expense	6,688	$ 9,611	$ 10,447
Guarantor Obligations, Maximum Exposure, Undiscounted	6,300
Birmingham, Alabama [Member]
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
Total	3,900
Los Angeles, California [Member]
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
Total	4,300
Automobiles [Member]
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
Total	$ 5,000
Minimum | Automobiles [Member]
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
Minimum lease terms	367 days

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Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Allowance for Doubtful Accounts Receivable [Roll Forward]
Beginning balance	$ 15,385	$ 15,510	$ 15,884
Provision for losses	17,095	19,080	19,541
Uncollectible amounts written off	(18,273)	(19,204)	(19,916)
Ending balance	14,207	15,385	15,510
Supplemental Cash Flow Elements [Abstract]
Negative cash book balances	$ 40,600	$ 41,400	$ 51,200

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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2016
Before Tax [Abstract]
Accumulated other comprehensive income, beginning of period	$ 12,016	$ 36,145	$ 25,576
Effect on other comprehensive income	149	(24,129)	10,569
Accumulated other comprehensive income, end of period	12,165	12,016	36,145
Income Tax [Abstract]
Accumulated other comprehensive income, beginning of period	(4,206)	(12,651)	(8,952)
Effect on other comprehensive income	(52)	8,445	(3,699)
Accumulated other comprehensive income, end of period	(4,258)	(4,206)	(12,651)
Net [Abstract]
Accumulated other comprehensive income, beginning of period	7,811	23,494	16,624
Other Comprehensive Income (Loss), Net of Tax	97	(15,684)	6,870
Accumulated other comprehensive income, end of period	7,811	23,494	16,624	$ 7,907
Accumulated Change Postretirement Benefite Liability [Member]
Before Tax [Abstract]
Accumulated other comprehensive income, beginning of period	944	174	(62)
Effect on other comprehensive income	88	771	235
Accumulated other comprehensive income, end of period	1,033	944	174
Income Tax [Abstract]
Accumulated other comprehensive income, beginning of period	(331)	(61)	22
Effect on other comprehensive income	(31)	(270)	(82)
Accumulated other comprehensive income, end of period	(361)	(331)	(61)
Net [Abstract]
Accumulated other comprehensive income, beginning of period	614	113	(40)
Other Comprehensive Income (Loss), Net of Tax	57	501	153
Accumulated other comprehensive income, end of period	614	113	(40)	671
Accumulated Unrealized Gains on Investments, net [Member]
Before Tax [Abstract]
Accumulated other comprehensive income, beginning of period	11,072	35,972	25,638
Effect on other comprehensive income	61	(24,900)	10,334
Other comprehensive income before reclassification	3,205	(22,091)	14,618
Accumulated other comprehensive income, end of period	11,133	11,072	35,972
Income Tax [Abstract]
Accumulated other comprehensive income, beginning of period	(3,875)	(12,590)	(8,973)
Other comprehensive income before reclassification	(1,122)	7,732	(5,116)
Effect on other comprehensive income	(21)	8,715	(3,617)
Accumulated other comprehensive income, end of period	(3,896)	(3,875)	(12,590)
Net [Abstract]
Accumulated other comprehensive income, beginning of period	7,197	23,382	16,665
Other comprehensive income before reclassification	2,084	(14,359)	9,502
Other Comprehensive Income (Loss), Net of Tax	40	(16,185)	6,717
Accumulated other comprehensive income, end of period	7,197	23,382	16,665	$ 7,236
Reclassification Adjustment for Other-than-Temporary Impairment [Member]
Before Tax [Abstract]
Reclassification adjustment	375	1,294	160
Income Tax [Abstract]
Reclassification adjustment	(131)	(453)	(56)
Net [Abstract]
Reclassification adjustment	243	841	104
Accumulated Unrealized Gains on Investments, Net [Member]
Before Tax [Abstract]
Effect on other comprehensive income	61	(24,900)	10,334
Reclassification adjustment	(3,519)	(4,102)	(4,444)
Income Tax [Abstract]
Reclassification adjustment	1,232	1,436	1,556
Effect on other comprehensive income	(21)	8,715	(3,617)
Net [Abstract]
Reclassification adjustment	(2,287)	(2,667)	(2,889)
Other Comprehensive Income (Loss), Net of Tax	$ 40	$ (16,185)	$ 6,717

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Segment Information - Narrative (Details) $ in Millions	12 Months Ended
	Dec. 31, 2016 USD ($) vehicle / policy vehicle segment	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Segment Reporting [Abstract]
Number of operating segments | segment	3
Number of vehicles in fleet in target businesses (or fewer) | vehicle	20
Average vehicles per policy | vehicle / policy	1.9
Depreciation and amortization expense | $	$ 35.0	$ 34.7	$ 32.9

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Segment Information - Revenues by segment and reconciliation to Total revenues (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Gross written premium													$ 1,401,414	$ 1,387,866	$ 1,360,870
Ceded reinsurance													(8,955)	(14,579)	(13,266)
Net written premium													1,392,459	1,373,287	1,347,604
Change in unearned premium													(795)	(26,723)	(21,669)
Earned premium													1,391,664	1,346,564	1,325,935
Installment and other fee income													107,361	96,753	95,242
Net investment income													35,537	36,800	35,629
Net realized gains on investments	$ 1,887	$ 1,282	$ (164)	$ 139	$ 1,835	$ (410)	$ 214	$ 1,169	$ 781	$ 1,013	$ 1,846	$ 645	3,145	2,809	4,284
Other income													1,000	1,106	619
Total revenues	$ 415,336	$ 378,124	$ 375,084	$ 370,162	$ 369,919	$ 372,383	$ 374,757	$ 366,973	$ 365,982	$ 366,160	$ 367,954	$ 361,613	1,538,706	1,484,032	1,461,709
Personal Auto
Segment Reporting Information [Line Items]
Gross written premium													1,240,037	1,246,492	1,237,774
Ceded reinsurance													(4,036)	(3,301)	(3,407)
Net written premium													1,236,001	1,243,191	1,234,367
Change in unearned premium													10,401	(17,901)	(10,506)
Earned premium													1,246,402	1,225,290	1,223,860
Installment and other fee income													97,085	88,738	88,493
Commercial Vehicle
Segment Reporting Information [Line Items]
Gross written premium													145,272	126,036	108,640
Ceded reinsurance													(4,098)	(10,679)	(9,262)
Net written premium													141,174	115,357	99,378
Change in unearned premium													(10,990)	(8,395)	(10,577)
Earned premium													130,183	106,962	88,801
Installment and other fee income													10,276	8,015	6,749
Classic Collector
Segment Reporting Information [Line Items]
Gross written premium													16,105	15,339	14,456
Ceded reinsurance													(821)	(600)	(597)
Net written premium													15,284	14,739	13,859
Change in unearned premium													(205)	(427)	(586)
Earned premium													15,079	14,312	13,274
Installment and other fee income													$ 0	$ 0	$ 0

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Segment Information - Underwriting income and reconciliations to Earnings before income taxes (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Statutory accident year underwriting income													$ 24,692	$ 27,815	$ 44,098
Statutory accident year underwriting income, Combined Ratio													98.20%	97.60%	96.40%
Bad debt charge-offs													$ 16,984	$ 19,013	$ 20,025
Favorable (unfavorable) development on prior accident years													24,001	28,926	17,405
Statutory calendar year underwriting income													$ 65,677	$ 75,754	$ 81,528
Statutory calendar year underwriting income, Combined Ratio													95.30%	94.00%	93.60%
Statutory-to-GAAP underwriting income differences													$ (19,555)	$ (16,658)	$ (16,537)
GAAP calendar year underwriting income													$ 46,122	$ 59,096	$ 64,990
GAAP calendar year underwriting income, Combined Ratio													96.70%	95.60%	95.10%
Net investment income													$ 35,537	$ 36,800	$ 35,629
Net realized gains on investments	$ 1,887	$ 1,282	$ (164)	$ 139	$ 1,835	$ (410)	$ 214	$ 1,169	$ 781	$ 1,013	$ 1,846	$ 645	3,145	2,809	4,284
Other income													1,000	1,106	619
Interest expense													(14,037)	(14,029)	(13,989)
Corporate general and administrative expenses													(7,899)	(7,655)	(7,514)
Other expenses													(1,736)	(3,296)	(882)
Earnings before income taxes													62,132	74,832	83,138
Personal Auto
Segment Reporting Information [Line Items]
Statutory accident year underwriting income													$ 21,766	$ 24,876	$ 46,627
Statutory accident year underwriting income, Combined Ratio													98.40%	97.70%	96.00%
Bad debt charge-offs													$ 15,150	$ 17,413	$ 18,692
Favorable (unfavorable) development on prior accident years													27,958	33,633	848
Statutory calendar year underwriting income													$ 64,874	$ 75,922	$ 66,168
Statutory calendar year underwriting income, Combined Ratio													94.90%	93.60%	94.50%
Commercial Vehicle
Segment Reporting Information [Line Items]
Statutory accident year underwriting income													$ 1,905	$ 876	$ (4,033)
Statutory accident year underwriting income, Combined Ratio													97.00%	97.80%	102.30%
Bad debt charge-offs													$ 1,784	$ 1,557	$ 1,314
Favorable (unfavorable) development on prior accident years													(3,582)	(5,176)	17,626
Statutory calendar year underwriting income													$ 106	$ (2,743)	$ 14,907
Statutory calendar year underwriting income, Combined Ratio													98.50%	101.30%	81.10%
Classic Collector
Segment Reporting Information [Line Items]
Statutory accident year underwriting income													$ 1,022	$ 2,063	$ 1,504
Statutory accident year underwriting income, Combined Ratio													92.80%	84.70%	87.20%
Bad debt charge-offs													$ 50	$ 44	$ 18
Favorable (unfavorable) development on prior accident years													(375)	469	(1,070)
Statutory calendar year underwriting income													$ 697	$ 2,576	$ 453
Statutory calendar year underwriting income, Combined Ratio													94.90%	81.10%	95.20%

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SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Condensed Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Condensed Financial Statements, Captions [Line Items]
Fixed maturities	$ 1,390,167	$ 1,381,467
Equity securities – at fair value (cost $1,908 and $1,940)	90,640	89,935
Short-term investments - at fair value (amortized cost $509 and $1,073)	2,907	4,651
Cash and cash equivalents	92,800	62,483	$ 84,541	$ 134,211
Other assets	12,777	10,306
Total assets	2,402,601	2,385,135
Long-term debt	273,591	273,383
Other liabilities	99,924	112,873
Shareholders’ equity	699,187	687,595	697,659	656,758
Total liabilities and shareholders’ equity	2,402,601	2,385,135
Parent
Condensed Financial Statements, Captions [Line Items]
Investment in subsidiaries	810,017	812,351
Fixed maturities	130,563	114,737
Equity securities – at fair value (cost $1,908 and $1,940)	1,991	1,975
Short-term investments - at fair value (amortized cost $509 and $1,073)	508	1,072
Cash and cash equivalents	25,384	27,286	$ 37,731	$ 33,441
Other assets	14,276	13,478
Total assets	982,739	970,899
Long-term debt	273,591	273,383
Other liabilities	8,970	9,035
Payable to affiliates	991	886
Shareholders’ equity	699,187	687,595
Total liabilities and shareholders’ equity	$ 982,739	$ 970,899

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SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Condensed Balance Sheets (Parenthetical) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Condensed Financial Statements, Captions [Line Items]
Fixed maturities, amortized costs	$ 1,392,660	$ 1,381,510
Equity securities, cost	77,013	78,815
Short-term investments, cost	2,909	4,656
Parent
Condensed Financial Statements, Captions [Line Items]
Fixed maturities, amortized costs	132,039	115,042
Equity securities, cost	1,908	1,940
Short-term investments, cost	$ 509	$ 1,073

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SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Condensed Statements of Earnings (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Condensed Financial Statements, Captions [Line Items]
Net investment income													$ 35,537	$ 36,800	$ 35,629
Net investment income, percent change													(3.40%)	3.30%
Net realized gains on investments	$ 1,887	$ 1,282	$ (164)	$ 139	$ 1,835	$ (410)	$ 214	$ 1,169	$ 781	$ 1,013	$ 1,846	$ 645	$ 3,145	$ 2,809	4,284
Net realized gains on investments, percent change													12.00%	(34.40%)
Other income													$ 1,000	$ 1,106	619
Other income, percent change													(9.60%)	78.80%
Total revenues	415,336	378,124	375,084	370,162	369,919	372,383	374,757	366,973	365,982	366,160	367,954	361,613	$ 1,538,706	$ 1,484,032	1,461,709
Total revenues, percent change													3.70%	1.50%
Interest expense													$ 14,037	$ 14,029	13,989
Interest expense, percent change													0.10%	0.30%
Corporate general and administrative expenses													$ 7,899	$ 7,655	7,514
Corporate general and administrative expenses, percent change													3.20%	1.90%
Other expenses													$ 1,736	$ 3,296	882
Other expenses, percent change													(47.30%)	273.80%
Total costs and expenses													$ 1,476,575	$ 1,409,200	1,378,572
Total costs and expenses, percent change													4.80%	2.20%
Earnings before income taxes													$ 62,132	$ 74,832	83,138
Earnings before income taxes, percent change													(17.00%)	(10.00%)
Provision for income taxes													$ 19,047	$ 23,351	25,936
Provision for income taxes, percent change													(18.40%)	(10.00%)
Net earnings	$ 21,609	$ 2,753	$ 11,015	$ 7,708	$ 11,097	$ 15,737	$ 13,493	$ 11,154	$ 21,352	$ 14,855	$ 10,667	$ 10,327	$ 43,085	$ 51,481	57,201
Net Earnings, percent change													(16.30%)	(10.00%)
Parent
Condensed Financial Statements, Captions [Line Items]
Income in equity of subsidiaries													$ 55,734	$ 63,511	69,964
Income in equity of subsidiaries, percent change													(12.20%)	(9.20%)
Net investment income													$ 2,412	$ 2,074	1,757
Net investment income, percent change													16.30%	18.10%
Net realized gains on investments													$ 117	$ 77	24
Net realized gains on investments, percent change													51.40%	223.30%
Other income													$ 0	$ 1	19
Other income, percent change													(100.00%)	(97.30%)
Total revenues													$ 58,263	$ 65,663	71,765
Total revenues, percent change													(11.30%)	(8.50%)
Interest expense													$ 13,958	$ 13,947	13,938
Interest expense, percent change													0.10%	0.10%
Corporate general and administrative expenses													$ 7,899	$ 7,655	7,514
Corporate general and administrative expenses, percent change													3.20%	1.90%
Other expenses													$ 18	$ 26	26
Other expenses, percent change													(31.80%)	1.80%
Total costs and expenses													$ 21,874	$ 21,628	21,478
Total costs and expenses, percent change													1.10%	0.70%
Earnings before income taxes													$ 36,389	$ 44,035	50,287
Earnings before income taxes, percent change													(17.40%)	(12.40%)
Provision for income taxes													$ (6,696)	$ (7,445)	(6,914)
Provision for income taxes, percent change													(10.10%)	7.70%
Net earnings													$ 43,085	$ 51,481	$ 57,201
Net Earnings, percent change													(16.30%)	(10.00%)

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SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands		3 Months Ended												12 Months Ended
		Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Condensed Financial Statements, Captions [Line Items]
Net Earnings		$ 21,609	$ 2,753	$ 11,015	$ 7,708	$ 11,097	$ 15,737	$ 13,493	$ 11,154	$ 21,352	$ 14,855	$ 10,667	$ 10,327	$ 43,085	$ 51,481	$ 57,201
Excess tax benefits from share-based payment arrangements														(157)	(298)	(108)
Net cash provided by operating activities														105,223	72,507	106,020
Purchases of fixed maturities														(479,050)	(523,502)	(516,522)
Purchases of short-term investments														(9,882)	(8,413)	(7,920)
Maturities and redemptions of fixed maturities														163,755	198,050	167,011
Maturities and redemptions of short-term investments														2,270	1,285	2,800
Proceeds from sale of fixed maturities														290,866	329,688	238,893
Proceeds from sale of short-term investments														9,258	3,086	6,864
Net cash used in investing activities														(39,855)	(45,617)	(129,082)
Proceeds from stock options exercised and employee stock purchases														256	259	784
Excess tax benefits from share-based payment arrangements														157	298	108
Acquisition of treasury stock														(11,953)	(29,481)	(10,100)
Dividends paid to shareholders														(22,993)	(19,528)	(16,562)
Net cash used in financing activities														(35,051)	(48,948)	(26,609)
Net increase (decrease) in cash and cash equivalents														30,317	(22,058)	(49,670)
Cash and cash equivalents at beginning of period					62,483				84,541				134,211	62,483	84,541	134,211
Cash and cash equivalents at end of period		92,800				62,483				84,541				92,800	62,483	84,541
Parent
Condensed Financial Statements, Captions [Line Items]
Net Earnings														43,085	51,481	57,201
Equity in consolidated subsidiaries														(55,734)	(63,511)	(69,964)
Excess tax benefits from share-based payment arrangements														(157)	(298)	(108)
Other														4,063	4,938	1,055
Net cash provided by operating activities														(8,744)	(7,391)	(11,816)
Purchases of fixed maturities														(36,202)	(35,477)	(26,572)
Purchases of short-term investments														(1,905)	(1,602)	(821)
Maturities and redemptions of fixed maturities														25,904	15,410	27,750
Maturities and redemptions of short-term investments														1,370	1,285	0
Proceeds from sale of fixed maturities														13,874	14,784	8,327
Proceeds from sale of short-term investments														1,061	0	0
Dividends received from subsidiary	[1]													38,378	52,726	34,530
Capital contributed to subsidiaries														(1,105)	(1,729)	(1,338)
Net cash used in investing activities														41,375	45,397	41,876
Proceeds from stock options exercised and employee stock purchases														256	259	784
Excess tax benefits from share-based payment arrangements														157	298	108
Acquisition of treasury stock														(11,953)	(29,481)	(10,100)
Dividends paid to shareholders														(22,993)	(19,528)	(16,562)
Net cash used in financing activities														(34,534)	(48,451)	(25,769)
Net increase (decrease) in cash and cash equivalents														(1,902)	(10,445)	4,290
Cash and cash equivalents at beginning of period					$ 27,286				$ 37,731				$ 33,441	27,286	37,731	33,441
Cash and cash equivalents at end of period		$ 25,384				$ 27,286				$ 37,731				25,384	27,286	37,731
Securities received from subsidiaries														$ 21,600	$ 15,700	$ 25,600

[1] The parent received $21.6 million, $15.7 million and $25.6 million in the form of securities from subsidiaries in 2016, 2015 and 2014, respectively, not reflected in the above cash flows.

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SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Supplementary Insurance Information, by Segment [Line Items]
Deferred Policy Acquisition Costs	$ 91,136	$ 93,157	$ 90,428
Future Policy Benefits, Losses, Claims and Loss Expenses	685,455	669,965	668,177
Unearned Premium	614,347	616,649	589,260
Other Policy Claims and Benefits Payable	0	0	0
Premium Revenue	1,391,664	1,346,564	1,325,935
Net Investment Income	35,537	36,800	35,629
Benefits, Claims, Losses, and Settlement Expenses	1,096,755	1,036,001	1,001,628
Amortization of Deferred Policy Acquisition Costs	207,083	203,667	204,678
Other Operating Expenses	149,065	144,552	149,880
Premiums Written	1,392,459	1,373,287	1,347,604
Personal Auto
Supplementary Insurance Information, by Segment [Line Items]
Deferred Policy Acquisition Costs	79,429	82,881	81,362
Future Policy Benefits, Losses, Claims and Loss Expenses	573,249	580,983	597,091
Unearned Premium	533,436	543,837	525,935
Premium Revenue	1,246,402	1,225,290	1,223,860
Benefits, Claims, Losses, and Settlement Expenses	981,360	937,694	936,803
Amortization of Deferred Policy Acquisition Costs	185,473	185,325	188,924
Other Operating Expenses	130,772	131,277	137,358
Premiums Written	1,236,001	1,243,191	1,234,367
Commercial Vehicle
Supplementary Insurance Information, by Segment [Line Items]
Deferred Policy Acquisition Costs	10,526	9,098	7,937
Future Policy Benefits, Losses, Claims and Loss Expenses	106,956	85,040	66,976
Unearned Premium	72,978	65,084	56,023
Premium Revenue	130,183	106,962	88,801
Benefits, Claims, Losses, and Settlement Expenses	106,031	90,849	56,506
Amortization of Deferred Policy Acquisition Costs	19,363	16,176	13,703
Other Operating Expenses	15,448	11,153	10,127
Premiums Written	141,174	115,357	99,378
Classic Collector
Supplementary Insurance Information, by Segment [Line Items]
Deferred Policy Acquisition Costs	1,181	1,178	1,130
Future Policy Benefits, Losses, Claims and Loss Expenses	5,250	3,942	4,110
Unearned Premium	7,934	7,728	7,301
Premium Revenue	15,079	14,312	13,274
Benefits, Claims, Losses, and Settlement Expenses	9,364	7,459	8,319
Amortization of Deferred Policy Acquisition Costs	2,247	2,167	2,051
Other Operating Expenses	2,845	2,122	2,395
Premiums Written	$ 15,284	$ 14,739	$ 13,859