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Segment Information
 6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]  
Segment Information

13.

Segment Information

The Company manages its business through four business segments.  Commercial Specialty offers specialty property and casualty products designed for product lines such as Small Business Binding Authority, Property Brokerage, and Programs. Specialty Property offers specialty personal lines property and casualty insurance products.  Farm, Ranch, & Stable offers specialized property and casualty coverage including Commercial Farm Auto and Excess/Umbrella Coverage for the agriculture industry as well as specialized insurance products for the equine mortality and major medical industry.  Reinsurance Operations provides reinsurance solutions through brokers and primary writers including insurance and reinsurance companies.

 

During the 1st quarter of 2019, the Company re-evaluated its Personal Lines segment and determined that Personal Lines should be bifurcated into two reportable segments: Specialty Property and Farm, Ranch, & Stable.  This is the result of changing how Specialty Property and Farm, Ranch, & Stable are managed and reported.  Specialty Property is managed out of the Company’s Scottsdale, Arizona office; whereas, Farm, Ranch, & Stable is managed out of the Company’s Omaha, Nebraska office.  In the past, Farm, Ranch, & Stable reported to the Scottsdale, Arizona office and now it reports directly to the Company’s main headquarters in Bala Cynwyd, Pennsylvania.  Results for Specialty Property and Farm, Ranch, & Stable are separately measured, resources are separately allocated to each of these lines, and employees in each line are now being rewarded based on each line’s separate results.  Accordingly, the Company will report Specialty Property and Farm, Ranch, & Stable as two separate reportable segments. In addition, the Company has changed the name of its Commercial Lines segment to Commercial Specialty to better align with its key product offerings. The segment results for the quarter ended June 30, 2018 have been revised to reflect these changes.

The following are tabulations of business segment information for the quarters and six months ended June 30, 2019 and 2018:

 

Quarter Ended June 30, 2019

(Dollars in thousands)

 

Commercial

Specialty

 

(1)

Specialty Property

 

(1)

Farm, Ranch, & Stable

 

(1)

Reinsurance

Operations

 

(2)

Total

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

 

$

77,079

 

 

$

46,486

 

(4)

$

23,697

 

 

$

32,059

 

 

$

179,321

 

Net premiums written

 

$

67,107

 

 

$

39,828

 

 

$

20,075

 

 

$

32,059

 

 

$

159,069

 

Net premiums earned

 

$

56,705

 

 

$

35,567

 

 

$

17,350

 

 

$

18,579

 

 

$

128,201

 

Other income

 

 

—

 

 

 

498

 

 

 

32

 

 

 

(8

)

 

 

522

 

Total revenues

 

 

56,705

 

 

 

36,065

 

 

 

17,382

 

 

 

18,571

 

 

 

128,723

 

Losses and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

 

32,691

 

 

 

11,111

 

 

 

13,126

 

 

 

13,147

 

 

 

70,075

 

Acquisition costs and other underwriting expenses

 

 

22,890

 

 

 

14,939

 

 

 

7,345

 

 

 

5,360

 

 

 

50,534

 

Income (loss) from segments

 

$

1,124

 

 

$

10,015

 

 

$

(3,089

)

 

$

64

 

 

$

8,114

 

Unallocated Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,826

 

Net realized investment gain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,590

 

Corporate and other operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,639

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,042

)

Income before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,849

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,186

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,663

 

Total assets

 

$

869,221

 

 

$

319,220

 

 

$

171,887

 

 

$

655,144

 

(3)

$

2,015,472

 

 

(1)

Includes business ceded to the Company’s Reinsurance Operations.  This quota share agreement was cancelled effective January 1, 2018.

(2)

External business only, excluding business assumed from affiliates.

(3)

Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries.

(4)

Includes ($39) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement.

 

Quarter Ended June 30, 2018

(Dollars in thousands)

 

Commercial

Specialty

 

(1)

Specialty Property

 

(1)

Farm, Ranch, & Stable

 

(1)

Reinsurance

Operations

 

(2)

Total

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

 

$

69,973

 

 

$

47,030

 

(7)

$

21,515

 

 

$

20,299

 

 

$

158,817

 

Net premiums written

 

$

61,350

 

 

$

36,509

 

 

$

18,298

 

 

$

20,297

 

 

$

136,454

 

Net premiums earned

 

$

52,252

 

 

$

33,409

 

 

$

16,471

 

 

$

11,785

 

 

$

113,917

 

Other income

 

 

—

 

 

 

440

 

 

 

32

 

 

 

(148

)

 

 

324

 

Total revenues

 

 

52,252

 

 

 

33,849

 

 

 

16,503

 

 

 

11,637

 

 

 

114,241

 

Losses and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

 

25,095

 

 

 

17,903

 

 

 

12,106

 

 

 

3,757

 

 

 

58,861

 

Acquisition costs and other underwriting expenses

 

 

21,051

 

(3)

 

14,813

 

(4)

 

7,414

 

(5)

 

4,235

 

 

 

47,513

 

Income (loss) from segments

 

$

6,106

 

 

$

1,133

 

 

$

(3,017

)

 

$

3,645

 

 

$

7,867

 

Unallocated Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,954

 

Net realized investment losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,830

 

Corporate and other operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,918

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,940

)

Income before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,793

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,399

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,192

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

896,698

 

 

$

340,478

 

 

$

183,335

 

 

$

561,308

 

(6)

$

1,981,819

 

 

(1)

Includes business ceded to the Company’s Reinsurance Operations.  This quota share agreement was cancelled effective January 1, 2018.

(2)

External business only, excluding business assumed from affiliates.

(3)

Includes federal excise tax of $116 relating to cessions from Commercial Specialty to Reinsurance Operations.

(4)

Includes federal excise tax of $93 relating to cessions from Specialty Property to Reinsurance Operations.

(5)

Includes federal excise tax of $44 relating to cessions from Farm, Ranch, & Stable to Reinsurance Operations.

(6)

Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries.

(7)

Includes ($989) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement.

Six Months Ended June 30, 2019

(Dollars in thousands)

 

Commercial

Specialty

 

(1)

Specialty Property

 

(1)

Farm, Ranch, & Stable

 

(1)

Reinsurance

Operations

 

(2)

Total

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

 

$

141,292

 

 

$

86,160

 

(4)

$

44,462

 

 

$

49,608

 

 

$

321,522

 

Net premiums written

 

$

122,277

 

 

$

73,040

 

 

$

37,567

 

 

$

49,601

 

 

$

282,485

 

Net premiums earned

 

$

112,346

 

 

$

70,186

 

 

$

34,472

 

 

$

33,286

 

 

$

250,290

 

Other income (loss)

 

 

—

 

 

 

941

 

 

 

62

 

 

 

7

 

 

 

1,010

 

Total revenues

 

 

112,346

 

 

 

71,127

 

 

 

34,534

 

 

 

33,293

 

 

 

251,300

 

Losses and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

 

54,342

 

 

 

31,614

 

 

 

21,264

 

 

 

21,176

 

 

 

128,396

 

Acquisition costs and other underwriting expenses

 

 

45,702

 

 

 

29,592

 

 

 

14,627

 

 

 

10,356

 

 

 

100,277

 

Income (loss) from segments

 

$

12,302

 

 

$

9,921

 

 

$

(1,357

)

 

$

1,761

 

 

$

22,627

 

Unallocated Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21,045

 

Net realized investment gain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,980

 

Corporate and other operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,844

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,065

)

Income before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

39,743

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,480

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

34,263

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

869,221

 

 

$

319,220

 

 

$

171,887

 

 

$

655,144

 

(3)

$

2,015,472

 

 

(1)

Includes business ceded to the Company’s Reinsurance Operations.  This quota share agreement was cancelled effective January 1, 2018.

(2)

External business only, excluding business assumed from affiliates.

(3)

Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries.

(4)

Includes ($177) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement.

 

Six Months Ended June 30, 2018

(Dollars in thousands)

 

Commercial

Specialty

 

(1)

Specialty Property

 

(1)

Farm, Ranch, & Stable

 

(1)

Reinsurance

Operations

 

(2)

Total

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

 

$

123,746

 

 

$

88,374

 

(7)

$

40,336

 

 

$

30,608

 

 

$

283,064

 

Net premiums written

 

$

109,656

 

 

$

69,519

 

 

$

34,543

 

 

$

30,606

 

 

$

244,324

 

Net premiums earned

 

$

99,614

 

 

$

67,396

 

 

$

33,096

 

 

$

21,813

 

 

$

221,919

 

Other income

 

 

—

 

 

 

886

 

 

 

89

 

 

 

(97

)

 

 

878

 

Total revenues

 

 

99,614

 

 

 

68,282

 

 

 

33,185

 

 

 

21,716

 

 

 

222,797

 

Losses and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

 

50,124

 

 

 

39,089

 

 

 

18,541

 

 

 

7,179

 

 

 

114,933

 

Acquisition costs and other underwriting expenses

 

 

40,256

 

(3)

 

29,767

 

(4)

 

14,639

 

(5)

 

7,854

 

 

 

92,516

 

Income (loss) from segments

 

$

9,234

 

 

$

(574

)

 

$

5

 

 

$

6,683

 

 

$

15,348

 

Unallocated Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22,358

 

Net realized investment losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,514

 

Corporate and other operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,178

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,801

)

Income before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,241

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,652

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

896,698

 

 

$

340,478

 

 

$

183,335

 

 

$

561,308

 

(6)

$

1,981,819

 

 

(1)

Includes business ceded to the Company’s Reinsurance Operations.  This quota share agreement was cancelled effective January 1, 2018.

(2)

External business only, excluding business assumed from affiliates.

(3)

Includes federal excise tax of $290 relating to cessions from Commercial Specialty to Reinsurance Operations.

(4)

Includes federal excise tax of $234 relating to cessions from Specialty Property to Reinsurance Operations.

(5)

Includes federal excise tax of $109 relating to cessions from Farm, Ranch, & Stable to Reinsurance Operations.

(6)

Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries.

(7)

Includes ($1,856) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement.