XML 48 R33.htm IDEA: XBRL DOCUMENT v3.8.0.1
Investments (Tables)
 12 Months Ended
Dec. 31, 2017
Schedule of Investments [Abstract]  
Original or amortized cost, estimated fair value and gross unrealized gains and losses of available-for-sale and other investments
The original or amortized cost, estimated fair value and gross unrealized gains and losses of fixed maturities and other investments at December 31, 2017 and 2016, are as follows:
December 31, 2017
 
Original or
amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair value
AFS fixed maturities:
 
 
 
 
 
 
 
 
U.S. treasury bonds
 
$
60,711

 
$
103

 
$
(13
)
 
$
60,801

U.S. agency bonds – mortgage-backed
 
2,026,305

 
8,074

 
(19,765
)
 
2,014,614

U.S. agency bonds – other
 
29,941

 
4

 
(163
)
 
29,782

Non-U.S. government and supranational bonds
 
33,381

 
231

 
(1,736
)
 
31,876

Asset-backed securities
 
317,544

 
4,065

 
(199
)
 
321,410

Corporate bonds
 
1,557,611

 
43,271

 
(17,571
)
 
1,583,311

Municipal bonds
 
2,500

 
76

 
—

 
2,576

Total AFS fixed maturities
 
4,027,993

 
55,824

 
(39,447
)
 
4,044,370

HTM fixed maturities:
 
 
 
 
 
 
 
 
Corporate bonds
 
1,037,464

 
28,694

 
(913
)
 
1,065,245

Municipal bonds
 
60,337

 
128

 
(84
)
 
60,381

Total HTM fixed maturities
 
1,097,801

 
28,822

 
(997
)
 
1,125,626

Other investments
 
5,219

 
1,381

 
—

 
6,600

Total investments
 
$
5,131,013

 
$
86,027

 
$
(40,444
)
 
$
5,176,596

December 31, 2016
 
Original or
amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair value
AFS fixed maturities:
 
 
 
 
 
 
 
 
U.S. treasury bonds
 
$
5,186

 
$
238

 
$
(11
)
 
$
5,413

U.S. agency bonds – mortgage-backed
 
1,720,436

 
12,867

 
(17,265
)
 
1,716,038

U.S. agency bonds – other
 
18,082

 
20

 
—

 
18,102

Non-U.S. government and supranational bonds
 
35,158

 
73

 
(5,297
)
 
29,934

Asset-backed securities
 
217,232

 
3,713

 
(69
)
 
220,876

Corporate bonds
 
1,947,347

 
30,951

 
(62,093
)
 
1,916,205

Municipal bonds
 
62,201

 
2,897

 
—

 
65,098

Total AFS fixed maturities
 
4,005,642

 
50,759

 
(84,735
)
 
3,971,666

HTM fixed maturities:
 
 
 
 
 
 
 
 
Corporate bonds
 
752,212

 
16,370

 
(2,447
)
 
766,135

Total HTM fixed maturities
 
752,212

 
16,370

 
(2,447
)
 
766,135

Other investments
 
10,057

 
3,003

 
—

 
13,060

Total investments
 
$
4,767,911

 
$
70,132

 
$
(87,182
)
 
$
4,750,861
Contractual maturities of fixed maturities, available-for-sale
The contractual maturities of our fixed maturities are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
 
AFS fixed maturities
 
HTM fixed maturities
December 31, 2017
 
Amortized cost
 
Fair value
 
Amortized cost
 
Fair value
Maturity
 
 
 
 
 
 
 
 
Due in one year or less
 
$
92,657

 
$
91,054

 
$
40,533

 
$
40,503

Due after one year through five years
 
578,427

 
582,583

 
333,003

 
342,141

Due after five years through ten years
 
987,819

 
1,009,652

 
724,265

 
742,982

Due after ten years
 
25,241

 
25,057

 
—

 
—

 
 
1,684,144

 
1,708,346

 
1,097,801

 
1,125,626

U.S. agency bonds – mortgage-backed
 
2,026,305

 
2,014,614

 
—

 
—

Asset-backed securities
 
317,544

 
321,410

 
—

 
—

Total fixed maturities
 
$
4,027,993

 
$
4,044,370

 
$
1,097,801

 
$
1,125,626
Summary of available-for-sale securities and other investments in an unrealized loss position and the aggregate fair value and gross unrealized loss by length of time the securities have continuously been in an unrealized loss position
The following tables summarize fixed maturities in an unrealized loss position and the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:
 
 
Less than 12 Months
 
12 Months or More
 
Total
December 31, 2017
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
Fixed maturities
 
 
 
 
 
 
 
 
 
 
 
 
U.S. treasury bonds
 
$
—

 
$
—

 
$
587

 
$
(13
)
 
$
587

 
$
(13
)
U.S. agency bonds – mortgage-backed
 
842,000

 
(6,920
)
 
539,704

 
(12,845
)
 
1,381,704

 
(19,765
)
U.S. agency bonds – other
 
19,816

 
(163
)
 
—

 
—

 
19,816

 
(163
)
Non–U.S. government and supranational bonds
 
12,825

 
(971
)
 
15,253

 
(765
)
 
28,078

 
(1,736
)
Asset-backed securities
 
68,703

 
(150
)
 
3,017

 
(49
)
 
71,720

 
(199
)
Corporate bonds
 
247,341

 
(3,905
)
 
348,594

 
(14,579
)
 
595,935

 
(18,484
)
Municipal bonds
 
39,492

 
(84
)
 
—

 
—

 
39,492

 
(84
)
Total temporarily impaired fixed maturities
 
$
1,230,177

 
$
(12,193
)
 
$
907,155

 
$
(28,251
)
 
$
2,137,332

 
$
(40,444
)
At December 31, 2017, there were approximately 244 securities in an unrealized loss position with a fair value of $2,137,332 and unrealized losses of $40,444. Of these securities, there were 100 securities that have been in an unrealized loss position for 12 months or greater with a fair value of $907,155 and unrealized losses of $28,251.
 
 
Less than 12 Months
 
12 Months or More
 
Total
December 31, 2016
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
Fixed maturities
 
 
 
 
 
 
 
 
 
 
 
 
U.S. treasury bonds
 
$
589

 
$
(11
)
 
$
—

 
$
—

 
$
589

 
$
(11
)
U.S. agency bonds – mortgage-backed
 
997,943

 
(14,440
)
 
47,969

 
(2,825
)
 
1,045,912

 
(17,265
)
Non-U.S. government and supranational bonds
 
3,169

 
(160
)
 
25,236

 
(5,137
)
 
28,405

 
(5,297
)
Asset-backed securities
 
30,589

 
(69
)
 
—

 
—

 
30,589

 
(69
)
Corporate bonds
 
642,599

 
(15,058
)
 
357,954

 
(49,482
)
 
1,000,553

 
(64,540
)
Total temporarily impaired fixed maturities
 
$
1,674,889

 
$
(29,738
)
 
$
431,159

 
$
(57,444
)
 
$
2,106,048

 
$
(87,182
)
Summary of the credit ratings of fixed maturities
The following summarizes the credit ratings of our fixed maturities:
Ratings(1) at December 31, 2017
 
Amortized cost
 
Fair value
 
% of Total
fair value
U.S. treasury bonds
 
$
60,711

 
$
60,801

 
1.2
%
U.S. agency bonds
 
2,056,246

 
2,044,396

 
39.6
%
AAA
 
245,562

 
249,073

 
4.8
%
AA+, AA, AA-
 
204,792

 
207,898

 
4.0
%
A+, A, A-
 
1,381,031

 
1,404,451

 
27.2
%
BBB+, BBB, BBB-
 
1,125,471

 
1,149,511

 
22.2
%
BB+ or lower
 
51,981

 
53,866

 
1.0
%
Total fixed maturities
 
$
5,125,794

 
$
5,169,996

 
100.0
%
Ratings(1) at December 31, 2016
 
Amortized cost
 
Fair value
 
% of Total
fair value
U.S. treasury bonds
 
$
5,186

 
$
5,413

 
0.1
%
U.S. agency bonds
 
1,738,518

 
1,734,140

 
36.6
%
AAA
 
170,515

 
171,090

 
3.6
%
AA+, AA, AA-
 
238,315

 
237,169

 
5.0
%
A+, A, A-
 
1,386,023

 
1,374,860

 
29.0
%
BBB+, BBB, BBB-
 
1,053,529

 
1,047,376

 
22.2
%
BB+ or lower
 
165,768

 
167,753

 
3.5
%
Total fixed maturities
 
$
4,757,854

 
$
4,737,801

 
100.0
%
(1) 
Based on Standard & Poor’s ("S&P"), or equivalent, ratings
Portfolio of other investments
The table below shows our portfolio of other investments:
December 31,
 
2017
 
2016
 
 
Fair value
 
% of Total
fair value
 
Fair value
 
% of Total
fair value
Investment in limited partnerships
 
$
5,100

 
77.3
%
 
$
5,474

 
41.9
%
Investment in quoted equity
 
—

 
—
%
 
6,586

 
50.4
%
Other
 
1,500

 
22.7
%
 
1,000

 
7.7
%
Total other investments
 
$
6,600

 
100.0
%
 
$
13,060

 
100.0
%
Net investment income
Net investment income was derived from the following sources:
For the Year Ended December 31,
 
2017
 
2016
 
2015
Fixed maturities
 
$
166,625

 
$
147,011

 
$
132,394

Cash and cash equivalents
 
1,973

 
1,628

 
1,025

Loan to related party
 
3,447

 
2,360

 
1,865

Other
 
1,833

 
1,818

 
1,865

 
 
173,878

 
152,817

 
137,149

Investment expenses
 
(7,533
)
 
(6,925
)
 
(6,057
)
Net investment income
 
$
166,345

 
$
145,892

 
$
131,092
Analysis of realized and unrealized gains on investment
The following provides an analysis of net realized gains on investment included in the Consolidated Statements of Income:
For the Year Ended December 31, 2017
 
Gross gains
 
Gross losses
 
Net
AFS fixed maturities
 
$
7,598

 
$
(1,254
)
 
$
6,344

Other investments
 
5,878

 
—

 
5,878

Net realized gains on investment
 
$
13,476

 
$
(1,254
)
 
$
12,222

For the Year Ended December 31, 2016
 
Gross gains
 
Gross losses
 
Net
AFS fixed maturities
 
$
7,140

 
$
(916
)
 
$
6,224

Other investments
 
550

 
—

 
550

Net realized gains on investment
 
$
7,690

 
$
(916
)
 
$
6,774

For the Year Ended December 31, 2015
 
Gross gains
 
Gross losses
 
Net
AFS fixed maturities
 
$
2,849

 
$
(543
)
 
$
2,306

Other investments
 
192

 
—

 
192

Net realized gains on investment
 
$
3,041

 
$
(543
)
 
$
2,498
Net unrealized gains on available-for-sale securities and other investments
Net unrealized gains (losses) were as follows:
December 31,
 
2017
 
2016
 
2015
Fixed maturities
 
$
20,586

 
$
(23,635
)
 
$
(55,024
)
Other investments
 
1,381

 
3,003

 
996

Total net unrealized gains (losses)
 
21,967

 
(20,632
)
 
(54,028
)
Deferred income tax
 
(78
)
 
(84
)
 
(84
)
Net unrealized gains (losses), net of deferred income tax
 
$
21,889

 
$
(20,716
)
 
$
(54,112
)
Change, net of deferred income tax
 
$
42,605

 
$
33,396

 
$
(132,691
)
Fair value of restricted assets
The fair value of our restricted assets was as follows:
December 31,
 
2017
 
2016
Restricted cash – third party agreements
 
$
50,411

 
$
56,891

Restricted cash – related party agreements
 
73,017

 
46,777

Restricted cash – U.S. state regulatory authorities
 
156

 
120

Total restricted cash
 
123,584

 
103,788

Restricted investments – in trust for third party agreements at fair value (amortized cost: 2017 – $1,311,538; 2016 – $1,307,926)
 
1,326,695

 
1,299,569

Restricted investments AFS– in trust for related party agreements at fair value (amortized cost: 2017 – $2,256,494; 2016 – $2,242,565)
 
2,288,472

 
2,225,066

Restricted investments HTM– in trust for related party agreements at fair value (amortized cost: 2017 – $1,097,801; 2016 – $752,212)
 
1,125,626

 
766,135

Restricted investments – in trust for U.S. state regulatory authorities (amortized cost: 2017 – $4,076; 2016 – $4,059)
 
4,147

 
4,238

Total restricted investments
 
4,744,940

 
4,295,008

Total restricted cash and investments
 
$
4,868,524

 
$
4,398,796