10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2020

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: 001-36311

NATIONAL GENERAL HOLDINGS CORP.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	27-1046208
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

59 Maiden Lane, 38th Floor

New York, New York 10038

(Address of Principal Executive Offices) (Zip Code)

(212) 380-9500

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share
7.50% Non-Cumulative Preferred Stock, Series A
Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B
Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series C
7.625% Subordinated Notes due 2055

Securities registered pursuant to Section 12(g) of the Act: None *See Explanatory Note

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

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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-Accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

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

As of June 30, 2020, the last business day of the registrant’s most recently completed second quarter, the aggregate market value of the common stock held by non-affiliates was $1,425,196,853. As of December 31, 2020, the number of common shares of the registrant outstanding was 113,585,043. As of January 4, 2021, all outstanding shares of the registrant are owned by The Allstate Corporation and there is no public market for the common stock.

Documents incorporated by reference: None.

EXPLANATORY NOTE

As previously reported, effective January 4, 2021, the registrant became a wholly owned subsidiary of The Allstate Corporation pursuant to a merger transaction. Accordingly, on January 4, 2021, the Nasdaq Stock Market LLC filed a Form 25 with the Securities and Exchange Commission (the “SEC”) to delist the registrant’s Common Stock from Nasdaq and to deregister the Common Stock under Section 12(b) of the Act. On January 15, 2021, the registrant filed a Form 25 with the SEC to voluntarily delist the Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series C (the “Series C Depositary Shares”), from Nasdaq and to deregister the Series C Depositary Shares under Section 12(b) of the Act. On February 2, 2021, the Nasdaq Stock Market LLC filed a Form 25 with the SEC to delist (a) the 7.50% Non-Cumulative Preferred Stock, Series A (the “Series A Preferred Stock”), (b) the Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B (the “Series B Depositary Shares”), and (c) the 7.625% Subordinated Notes Due 2055 (the “2055 Notes”) from Nasdaq and to deregister the Series A Preferred Stock, the Series B Depositary Shares and the 2055 Notes under Section 12(b) of the Act. The registrant filed with the SEC, Forms 15 with respect to the Common Stock on January 14, 2021, with respect to the Series C Depositary Shares on January 25, 2021, and with respect to the Series A Preferred Stock, the Series B Depositary Shares and the 2055 Notes on February 16, 2021, in each case, requesting that the duty of the registrant to file reports under Section 13 of the Act with respect to such securities be terminated and the duty of the registrant to file reports under Section 15(d) of the Act with respect to such securities be suspended.

NATIONAL GENERAL HOLDINGS CORP.

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	2
Item 1A.	Risk Factors	22
Item 1B.	Unresolved Staff Comments	35
Item 2.	Properties	35
Item 3.	Legal Proceedings	35
Item 4.	Mine Safety Disclosures	35
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	36
Item 6.	Selected Financial Data	39
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	69
Item 8.	Financial Statements and Supplementary Data	70
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	70
Item 9A.	Controls and Procedures	71
Item 9B.	Other Information	74
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	75
Item 11.	Executive Compensation	80
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	92
Item 13.	Certain Relationships and Related Transactions, and Director Independence	93
Item 14.	Principal Accounting Fees and Services	95
PART IV
Item 15.	Exhibits and Financial Statement Schedules	97
Item 16.	Form 10-K Summary	99
	Signatures	100

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Effective January 4, 2021, National General Holdings Corp. became a wholly owned subsidiary of The Allstate Corporation (“Allstate”). Unless the context requires otherwise, references in this report to “National General Holdings Corp.” “NGHC,” “we,” “us,” “its,” the “Company” and “our” refer to National General Holdings Corp., its consolidated subsidiaries, and the Reciprocal Exchanges.

PART I

Note on Forward-Looking Statements

This current report on Form 10-K contains “forward-looking statements” that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. Forward-looking statements can generally be identified by the use of forward-looking terminology, such as “may,” “will,” “plan,” “expect,” “project,” “intend,” “estimate,” “anticipate” and “believe” or their variations or similar terminology. There can be no assurance that actual developments will be those anticipated by us. Actual results may differ materially from those expressed or implied in these statements as a result of significant risks and uncertainties, including, but not limited to, non-receipt of expected payments from insureds or reinsurers, changes in interest rates, a downgrade in the financial strength ratings of our insurance subsidiaries, the effects of pandemics or other widespread health problems such as the ongoing COVID-19 pandemic on our business, including our investment portfolio and the national and global economy generally, the effect of the performance of financial markets on our investment portfolio, our ability to accurately underwrite and price our products and to maintain and establish accurate loss reserves, estimates of the fair value of investments, development of claims and the effect on loss reserves, large loss activity including hurricanes and wildfires, the cost and availability of reinsurance coverage, the effects of emerging claim and coverage issues, the effect of unpredictable catastrophic losses, changes in the demand for our products, the effect of general economic conditions, state and federal legislation, the effects of tax reform, regulations and regulatory investigations into industry practices, risks associated with conducting business outside the United States, developments relating to existing agreements, disruptions to our business relationships with third party vendors or agencies, breaches in data security or other disruptions involving our technology, heightened competition, changes in pricing environments, and changes in asset valuations. Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those projected, is contained in Item 1A, “Risk Factors” in this Annual Report on Form 10-K. The projections and statements in this report speak only as of the date of this report and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

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Item 1. Business

Legal Organization

Effective January 4, 2021 the Company was acquired by The Allstate Corporation (“Allstate”) pursuant to the Agreement and Plan of Merger (“Merger”), dated as of July 7, 2020, by and among the Company, Allstate, and Bluebird Acquisition Corp., an indirect wholly owned subsidiary of Allstate. As a result of the Merger, the Company became a wholly owned indirect subsidiary of Allstate. Our common shares were delisted from NASDAQ Global Select Market (“NASDAQ”) and we subsequently filed a Form 15 to deregister our securities under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our shareholders received $32.00 per share in cash from Allstate, plus a closing dividend of $2.50 per share, providing $34.50 in total value per share. Unless noted otherwise, the information provided in this Annual Report on Form 10-K is as of December 31, 2020.

Business Overview

We are a specialty personal lines insurance holding company that, through our subsidiaries, provides a variety of insurance products, including personal and small business automobile, homeowners, umbrella, recreational vehicle, motorcycle, lender-placed, supplemental health and other niche insurance products. We sell insurance products with a focus on underwriting profitability through a combination of our customized and predictive analytics and our technology driven low cost infrastructure.

Our automobile insurance products protect our customers against losses due to physical damage to their motor vehicles, bodily injury and liability to others for personal injury or property damage arising from auto accidents. Our homeowners and umbrella insurance products protect our customers against losses to dwellings and their contents from a variety of perils, as well as coverage for personal liability. We offer our Property and Casualty (“P&C”) insurance products through a network of approximately 42,620 independent agents, a number of affinity partners and through direct-response marketing programs and retail storefronts. We have approximately 4.1 million P&C policyholders.

Our Accident and Health (“A&H”) business provides accident and health insurance products not subject to the Patient Protection and Affordable Care Act (“PPACA”) and targets uninsured or underinsured individuals and employers who are interested in an alternative to PPACA-compliant major medical coverage or who are looking for supplemental insurance options to help cover out of pocket costs. We market our and other carriers’ A&H insurance products through a multi-pronged distribution platform that includes a network of over 56,100 independent agents, our in-house agencies, direct-to-consumer marketing, wholesaling, worksite marketing, and the internet.

We are licensed to operate in 50 states and the District of Columbia, but focus on niche markets. Approximately 72.7% of our P&C premium written is originated in ten core states: North Carolina, California, New York, Florida, Texas, Virginia, Louisiana, Alabama, New Jersey, and Connecticut.

For the years ended December 31, 2020, 2019, and 2018, our gross premium written was $5,635 million, $5,583 million and $5,417 million, net premium written was $4,621 million, $4,225 million and $3,828 million and total consolidated revenues were $5,552 million, $5,180 million and $4,608 million, respectively.

Our company was formed in 2009, to acquire the private passenger auto business of the U.S. consumer property and casualty insurance segment of General Motors Acceptance Corporation (“GMAC”), now known as Ally Financial Inc., which operations date back to 1939. We acquired this business on March 1, 2010.

Our wholly-owned subsidiaries include twenty-two regulated domestic insurance companies, of which twenty write primarily P&C insurance and two write A&H insurance. Our insurance subsidiaries have an “A-” (Excellent) rating by A.M. Best Company, Inc. (“A.M. Best”). We currently conduct a limited amount of business outside the United States, primarily in Bermuda.

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Two of our wholly-owned subsidiaries that we acquired in 2014, are management companies that act as attorneys-in-fact for Adirondack Insurance Exchange, a New York reciprocal insurer, and New Jersey Skylands Insurance Association, a New Jersey reciprocal insurer (together, the “Reciprocal Exchanges” or “Exchanges”). We do not own the Reciprocal Exchanges but are paid a fee to manage their business operations through our wholly-owned management companies.

Business Segments

We are a specialty national carrier with regional focuses. We manage our business through two segments:

•Property & Casualty - Our P&C segment operates its business through three primary distribution channels: agency, affinity and direct. Our agency channel focuses primarily on writing standard, preferred and nonstandard auto coverage and homeowners and umbrella coverage through our network of approximately 42,620 independent agents. In our affinity channel, we partner with a number of affinity groups and membership organizations to deliver insurance products tailored to the needs of our affinity partners’ members or customers under our affinity partners’ brand name or label, which we refer to as selling on a “white label” basis. A primary focus of a number of our affinity relationships is providing recreational vehicle coverage, of which we believe we are one of the top writers in the U.S. Our direct channel is operated through approximately 500 storefronts, web/mobile, phone sales centers and kiosks. In addition, we operate our lender-placed services through long-term distribution agreements with certain mortgage lenders.

•Accident & Health - Our A&H segment provides accident and non-major medical health insurance products targeting our existing policyholders and uninsured or underinsured individuals. Through a number of acquisitions of both carriers and general agencies, including VelaPoint, LLC, our call center general agency (“Velapoint”), National Health Insurance Company, a life and health insurance carrier (“NHIC”), Quotit Corporation, an application service provider for health insurance, HealthCompare Insurance Services, Inc., a call center agency, and Healthcare Solutions Team, LLC, a healthcare insurance managing general agency (“HST”), we have assembled a multi-pronged distribution platform that includes direct-to-consumer marketing through our call center agency, selling through approximately 56,100 independent agents, wholesaling insurance products through large general agencies/program managers and, through our affinity relationships, worksite marketing through employers and the internet.

P&C Segment

Distribution and Marketing

Agency Distribution Channel

Our agency channel focuses on writing automobile insurance, including standard, preferred and nonstandard insurance, as well as preferred homeowners and umbrella insurance, through independent insurance agents and brokers. We have established a broad geographic presence throughout the United States and have a significant market presence in our ten largest states, namely, North Carolina, California, New York, Florida, Texas, Virginia, Louisiana, Alabama, New Jersey, and Connecticut.

Relationships with our Independent Agents. We have built a strong network of approximately 42,620 independent insurance agents and brokers and provide them with competitive compensation, a user-friendly technology platform and superior service. In order to provide quick and responsive service to our agents, we operate an agency customer service call center staffed by experienced and highly-trained employees. Our focus on building and maintaining a strong agency network has created an effective variable cost distribution platform and is integral to the long-term success of our agency channel.

Our North Carolina Business. We are the largest writer of nonstandard auto insurance sold through independent agents in North Carolina, with over 50% market share. For the year ended December 31, 2020, in North Carolina, we generated $773.4 million of gross premium written.

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The North Carolina nonstandard auto insurance market is serviced by a small number of carriers with most liability insurance ceded to the state-controlled North Carolina Reinsurance Facility, the NCRF. We are not subject to any underwriting liability risk on the NCRF business written because losses are incurred by the NCRF. As a servicing carrier to the state facility, we receive a ceding commission from the NCRF to help offset operating expenses for providing the coverage to North Carolina residents.

Affinity Distribution Channel

Through the affinity distribution channel of our P&C insurance business we are a leader in affinity marketing and have been in operation since 1953, relying on best-in-class marketing strategies and analytics to maximize the value of our longstanding relationships. Our affinity relationships are generally long-term in nature. In general, an affinity partner relationship consists of a partnership agreement between a sponsoring organization and an insurance company entered into to address the specific insurance needs of the sponsor organization’s members or customers. Through the affinity relationship, the insurance company receives an endorsement that positions it favorably among the sponsoring organizations’ members or customers. In exchange for the endorsement, the affinity customer receives access to a quality insurer, advantageous pricing and customized products. A primary focus of our affinity channel is to provide recreational vehicle, or RV, insurance, of which we believe we are one of the largest writers in the U.S. In 2019, we acquired National Farmers Union Property and Casualty Company (“Farmers Union Insurance”), which maintains a long-term relationship with the National Farmers Union to sell personal lines insurance to its members.

Direct Distribution Channel

Our direct channel includes approximately 500 retail storefronts, web/mobile capabilities, phone contact centers and kiosks. The diversity of the channel supports growth through changing customer preferences, and gives National General a foothold in the industry’s fastest growing channel. Local retail stores placed in high traffic areas are central to the omni-channel strategy, and are a key component to the marketing and brand awareness efforts in our direct distribution channel. The omni-channel approach also creates a seamless customer experience, regardless of the channel or device that is used.

Lender-placed Insurance Business

We offer lender-placed insurance products and related services to mortgage lenders and servicers (“LPI Business”).

P&C Product Overview

In our P&C segment, we operate in niche businesses and offer a broad range of products employing multiple channels of distribution. Through our agency channel, we primarily sell nonstandard automobile insurance through independent agents and brokers and also offer standard and preferred auto, motorcycle, small business vehicle, homeowners and umbrella products. Through our affinity channel, we primarily underwrite and market standard and preferred auto and RV insurance.

•Standard and preferred automobile insurance. These policies provide coverage designed for drivers with greater financial resources and a less risky driving and claims history and have higher renewal retention than nonstandard policies.

•Nonstandard automobile insurance. These policies provide coverage for liability and physical damage and are designed for drivers who represent a higher-than-normal level of risk as a result of several factors, including their driving record, limited driving experience and claims history, among other factors, and consequently their premiums are generally higher than those for drivers who qualify for standard or preferred coverage.

•Homeowners insurance. Our homeowners policies are generally multiple-peril policies, providing property and liability coverages for one- and two-family, owner-occupied residences. We also offer additional personal umbrella coverage to the homeowner.

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•Recreational vehicle insurance. Unlike many of our competitors, our policies carry RV-specific endorsements tailored to these vehicles, including automatic personal effects coverage, optional replacement cost coverage, RV storage coverage and full-time liability coverage. We also bundle coverage for RVs and passenger cars in a single policy for which the customer is billed on a combined statement.

•Small business automobile insurance. These policies include liability and physical damage coverage for light-to-medium duty commercial vehicles, focused on artisan vehicles, with an average of two vehicles per policy.

•Motorcycle insurance. We provide coverage for most types of motorcycles, as well as golf carts and all-terrain vehicles. Our policy coverage offers flexibility to permit the customer to select the type (e.g., liability) and limit of insurance (e.g., $100,000/$250,000/$500,000), and to include other risks, such as add-on equipment and towing.

•Lender-placed insurance. Through the lender-placed insurance platform, we offer a full suite of lender-placed insurance products to customers, including fire, home and flood products, as well as collateral protection insurance and guaranteed asset protection products for automobiles.

Fee Income

In addition to traditional insurance premiums, we generate revenue by charging policy service fees to policyholders. These fees include service fees for installment or renewal policies and fees for insufficient funds, late payments, cancellations and various financial responsibility filing fees. The fee income we generate varies depending on the type of policy and state regulations. For the year ended December 31, 2020, our P&C segment generated $391.7 million in revenue from policy service fees.

P&C Gross Premium Written by State

We are licensed to operate in 50 states and the District of Columbia. For the year ended December 31, 2020, our top ten states represented 72.7% of our gross premium written. The following table sets forth the distribution of our P&C gross premium written by state as a percent of total gross premium written:

	Year Ended December 31,
	2020				2019				2018
	(amounts in thousands, except percentages)
North Carolina	$	773,424	15.9	%	$	770,349	16.0	%	$	729,426	15.5	%
California	691,902		14.2	%	582,240		12.1	%	720,284		15.3	%
New York	575,428		11.8	%	672,439		14.0	%	694,736		14.7	%
Florida	562,018		11.6	%	517,456		10.7	%	499,430		10.6	%
Texas	195,094		4.0	%	214,209		4.4	%	218,410		4.6	%
Virginia	168,227		3.5	%	162,008		3.4	%	148,806		3.2	%
Louisiana	167,445		3.4	%	173,237		3.6	%	142,483		3.0	%
Alabama	142,629		2.9	%	133,108		2.8	%	119,462		2.5	%
New Jersey	138,480		2.9	%	171,330		3.6	%	174,234		3.7	%
Connecticut	121,780		2.5	%	131,880		2.7	%	96,165		2.0	%
Other States	1,321,204		27.3	%	1,286,207		26.7	%	1,175,294		24.9	%
Total	$	4,857,631	100.0	%	$	4,814,463	100.0	%	$	4,718,730	100.0	%

Underwriting and Claims Management Philosophy

We believe that proactive and prompt claims management is essential to reducing losses and lowering loss adjustment expense (“LAE”) and enables us to more effectively and accurately measure reserves. To this end, we utilize our technology and extensive database of loss history in order to appropriately price and structure policies,

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maintain lower levels of loss, enhance our ability to accurately predict losses, and maintain lower claims costs. We believe that a strong underwriting foundation is best accomplished through careful risk selection and continuous evaluation of underwriting guidelines relative to loss experience. We are committed to a consistent and thorough review of new underwriting opportunities as well as our portfolio and product mix as a whole.

Underwriting, Pricing and Risk Management, and Actuarial Capabilities

We establish premium rates for insurance products based upon an analysis of expected losses using historical experience and anticipated future trends. Our product team develops the product and manages our underwriting tolerances. By utilizing a detailed actuarial analysis, our actuarial team establishes the necessary rate level for a given product and territory to achieve our targeted return. For risks which fall within our underwriting tolerances, we establish a price by matching a rate to a risk at a detailed level of segmentation. We determine the individual risk using predictive modeling developed by our analytics team with a level of precision that we believe is superior to the traditional loss cost pricing used by many of our competitors. We believe that effective collaboration among the product, analytics and actuarial teams enhances our ability to price risks appropriately and achieve our targeted rates of return.

Our actuarial group is central to the pricing and risk management process. The group carries out a number of functions including developing, tracking, and reporting on accident year loss results, monitoring and addressing national, state and channel-specific profit trends and establishing actuarial rate level needs and indications. Our actuarial group also helps ensure the integrity of reported accident year results.

To assist us in profitably underwriting our P&C products, our predictive analytics team has developed our RAD underwriting pricing tool. The RAD underwriting pricing tool offers significant advantages over our prior pricing tools by employing numerous additional components and pricing strategies such as supplemental risk and improved credit modeling. We believe the RAD underwriting pricing tool facilitates better pricing over the lifetime of a policy by employing lifetime value modeling, elasticity modeling and optimized pricing. We believe that our RAD underwriting pricing tool provides us with a competitive advantage for pricing our products relative to other auto insurers of our size.

Claims

Claims can be submitted by telephone, email or smartphone app by policyholders, producers or other parties directly to our claims department. Upon notification of a claim, our claims call center creates a loss notice based on policy information in our claims system, EPIC. The claim is then automatically assigned to a claim handler and to a field adjuster for a vehicle inspection, if necessary. An initial reserve is established based on the type and location of the exposure and data from actuarial tables. A notice to the adjuster is automatically generated immediately after a claim has been assigned. The claim handler’s manager receives a status assignment within 24 hours to ensure the claim is being investigated in a timely manner. The claim handler evaluates coverage and loss participants and investigates the loss. If the claim represents a loss exceeding $50,000, the claim handler will establish a case-specific reserve based on the potential exposure. Claims with potential losses exceeding $100,000 are referred to the large loss unit and handled by employees specially trained to handle these claims. Every claims employee is granted authority to reserve and pay up to a specified claim level. If the potential claim amount exceeds the employee’s authority level, the request is automatically forwarded through EPIC to the manager with the appropriate authority level. As part of the investigation, claim handlers contact the parties with respect to the loss and complete their investigations. Claim handlers record all investigation activities in EPIC, which are reviewed periodically by the managers in the department to ensure proper claims handling. Once the claim investigation has been completed, the claim handler works to close the claim as soon as possible. As of December 31, 2020, our Claims department includes approximately 2,740 individuals.

We carefully monitor our claim performance to ensure efficient handling. Management teams perform weekly reviews of open and aged claim reports. Through a combination of peer reviews, supervisor audits and monthly management information system reports, we believe that we have established an efficient mechanism designed to maintain and improve our level of claim handling performance.

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Competition

The property and casualty insurance market in the United States is highly competitive. We believe that our primary competition comes not only from national companies or their subsidiaries, such as The Progressive Corporation, The Travelers Companies, Inc., The Hanover Insurance Group, Inc., Selective Insurance Group, Inc., State Farm Mutual Automobile Insurance Company, Farmers Insurance Group, Assurant, Inc. and GEICO, but also from nonstandard auto focused insurers such as Mercury General Corporation, Kemper Corporation and independent agents that operate in a specific region or single state in which we operate. See Item 1A, “Risk Factors - Risks Relating to Our Insurance Operations - The insurance industry is highly competitive, and we may not be able to compete effectively against larger companies.”

We rely heavily on technology and extensive data gathering and analysis to segment markets and price accurately according to risk potential. We have remained competitive by refining our risk measurement and price segmentation skills, closely managing expenses, and achieving operating efficiencies. Superior customer service and fair and accurate claims adjusting are also important factors in our competitive strategy. With our policy administration system and our advanced underwriting pricing tools, we believe we will continue to operate well in the competitive environment.

Reinsurance Agreements

In 2017, we entered into an Auto Quota Share Agreement covering our auto line of business pursuant to which we ceded 15.0% of net liability to an unaffiliated third party reinsurer. Under the Auto Quota Share Agreement, we retain the flexibility, under certain conditions, to increase the cession percentage up to a maximum cession of 30.0% and to decrease the cession percentage to a minimum cession of 5.0%. Effective January 1, 2019, we ceded 7.0% of net liability. On July 1, 2019, we renewed our agreement for a two-year term. Effective July 1, 2019, we ceded 10.0% of net liability. Effective January 1, 2020, we cede 5.0% of net liability under new and renewal auto policies written.

In 2017, we entered into a Homeowners Quota Share Agreement covering our homeowners line of business pursuant to which we ceded 29.6% of net liability to unaffiliated third party reinsurers. Effective May 1, 2018, we ceded an additional 12.4% of net liability for a total cession of 42.0%. Effective July 1, 2019, we ceded 40.0% of net liability under new and renewal homeowners policies written. Effective July 1, 2020, we renewed our agreements for an additional one year term and cede 20.0% of net liability under new and renewal homeowners policies.

See Note 10, “Reinsurance” in the notes to our consolidated financial statements.

A&H Segment

Our A&H segment provides supplemental accident and health insurance products. One of the keys to our overall strategy revolves around distribution. We have multiple ways to reach the consumer through established channels, including:

•directly to the consumer through our in-house general agency;

•through independent agents;

•wholesaling through other general agents and Managing General Underwriters (“MGUs”); and

•through employers in the worksite.

We believe that our A&H distribution is unique because it is not driven by “company stores” - outlets that only sell products underwritten by us. In the markets where we choose not to underwrite, such as traditional individual and group fully insured major medical, we still sell these products on behalf of third-party carriers, allowing us to match consumers’ needs, whether it’s a product underwritten by us or a third-party carrier. This one-stop shopping element makes our distribution outlets attractive for both consumers and agents and enables us to promote our supplemental/ancillary products in a single sale environment.

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Our product focus in our A&H segment is offering economical and quality alternatives to the traditional group and individual insurance markets. A significant portion of the market has challenges in obtaining health insurance that balances depth of coverage with affordability. We believe we are uniquely positioned to offer greater value to our consumers because of our far-reaching distribution and focused product portfolio.

Our products fall into three broad categories: (1) supplemental/ancillary healthcare policies that mitigate exposure to high out-of-pocket costs with some major medical policies; (2) specialty accident policies and short term individual major medical policies specifically not subject to the PPACA for consumers seeking an alternative to more traditional forms of major medical insurance; and (3) self-insurance programs for small employers to assist employers who find self-insurance to be a more cost effective solution to the group healthcare needs.

A&H Product Overview

We focus on products that help individuals and employers address the ever increasing affordability challenges in healthcare. Our products include those packaged with other coverages or services to enhance the overall value proposition to the consumer, as well as standalone products. Target products for groups (through employers) and individuals include:

•Accident/AD&D. This coverage pays a stated benefit to the insured or his/her beneficiary in the event of bodily injury or death due to accidental means (other than natural causes). These policies can serve as supplemental policies underneath high deductible major medical plans that help reduce out of pocket expenses for consumers that result from unexpected events.

•Hospital Indemnity. These plans provide a fixed benefit amount for specific healthcare services (e.g., office visits, hospital stays, diagnostic care, etc.) with no deductibles or copays. They are designed for individuals who are looking for coverage that reduces out of pocket costs not covered by major medical coverage.

•Short-Term Medical. These plans can bridge the timing gap between the annual open enrollment periods (when traditional major medical insurance is available), and offers individuals financial protection for certain unexpected medical bills and other health care expenses (e.g., office visits, emergency, care, hospital stays, etc.). These plans have prescribed policy durations; typically the initial policy durations cannot exceed 12 months (or shorter durations in certain states).

•Cancer/Critical Illness. Critical illness policies provide benefits when specific diseases are first diagnosed. These benefits are paid to the individual directly, who can use them to pay for other out of pocket costs that may arise. This coverage can be sold on a guarantee and simplified issue (health questionnaire) basis either as a standalone product or packaged with other products.

•Stop Loss. Increases in health insurance costs in the group fully insured market has caused an increase in the number of employers offering self-insured plans. NHIC offers a wide array of stop loss programs together with self-insured program administration for small and large employers, as permitted by state law.

•Dental. These policies provide basic dental coverage and can be sold on a stand-alone basis or packaged with other products. They are frequently matched with discount plans and/or dental networks.

•Medicare Supplement. Medicare Supplement insurance policies fills the “gaps” in Original Medicare Plan coverage. These policies help pay some of the health care costs that the Original Medicare Plan doesn't cover and have standardized plan designs.

Ratings

Financial strength ratings are an important factor in establishing the competitive position of insurance companies and are important to our ability to market and sell our products. Rating organizations continually review the financial positions of insurers, including us. A.M. Best has currently assigned our insurance subsidiaries a rating of “A-” (Excellent). According to A.M. Best, “A-” ratings are assigned to insurers that have an excellent ability to meet their ongoing financial obligations to policyholders. This rating reflects A.M. Best’s opinion of our ability to pay claims and is not an evaluation directed to investors regarding an investment in our common stock. This rating is subject to periodic review by, and may be revised downward or revoked at the sole discretion of, A.M. Best. There can be no assurance that we will maintain our current ratings. Future changes to our rating may adversely affect our

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competitive position. See Item 1A, “Risk Factors - Risks Relating to our Business - A downgrade in the A.M. Best rating of our insurance subsidiaries would likely reduce the amount of business we are able to write and could materially adversely impact the competitive positions of our insurance subsidiaries.”

Loss Reserves

We record loss reserves for estimated losses under the insurance policies that we write and for LAE related to the investigation and settlement of policy claims. Our reserves for loss and LAE represent the estimated cost of all reported and unreported loss and LAE incurred and unpaid at any given point in time based on known facts and circumstances.

The process of establishing the liability for unpaid losses and LAE is complex and imprecise as it must take into consideration many variables that are subject to the outcome of future events. As a result, informed subjective estimates and judgments as to our ultimate exposure to losses are an important component of our loss reserving process.

Loss reserves include statistical reserves and case estimates for individual claims that have been reported and estimates for claims that have been incurred but not reported at the balance sheet date as well as estimates of the expenses associated with processing and settling all reported and unreported claims, less estimates of anticipated salvage and subrogation recoveries. Estimates are based upon past loss experience modified for current trends as well as economic, legal and social conditions. Loss reserves, except life reserves, are not discounted to present value, which would involve recognizing the time value of money and offsetting estimates of future payments by future expected investment income.

Incurred-but-not-reported (“IBNR”) reserve estimates are generally calculated by first projecting the ultimate cost of all claims that have occurred and then subtracting reported losses and loss expenses. Reported losses include cumulative paid losses and loss expenses plus case reserves. The IBNR reserve includes a provision for claims that have occurred but have not yet been reported, some of which are not yet known to the insured, as well as a provision for future development on reported claims.

We regularly review our loss reserves using a variety of actuarial methods and available information. We update the reserve estimates as historical loss experience develops, additional claims are reported and settled or as new information becomes available. Any changes in estimates are reflected in financial results in the period in which the estimates are changed.

Our actuarial review includes an actual to expected loss analysis or more detailed reserve indications for segments with changes, as well as the actuary’s reasonable reserve range compared to carried reserves. We review available actuarial indications and review carried reserves compared to the reasonable reserve range to determine whether any reserve adjustments are warranted.

Our internal actuarial analysis of the historical data provides the factors we use in our actuarial analysis in estimating our loss and LAE reserves. These factors are implicit measures over time of claims reported, average case incurred amounts, case development, severity and payment patterns. However, these factors cannot be directly used as they do not take into consideration changes in business mix, claims management, regulatory issues, medical trends, and other subjective factors. In accordance with Actuarial Standards of Practice, we generally use multiple traditional methods in determining our estimates of the ultimate unpaid claim liabilities. Each of these methods require actuarial judgment and assumptions. The techniques can include, but are not limited to:

•Paid Development Method - uses historical, cumulative paid losses by accident year and develops those actual losses to estimated ultimate losses based upon the assumption that each accident year will develop to estimated ultimate cost in a manner that is analogous to prior years.

•Paid Generalized Cape Cod Method - combines the Paid Development Method with the expected loss method, where the expected loss ratios are estimated from exposure and claims experience weighted across multiple accident periods. The selected expected loss ratio for a given accident year is derived by giving

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some weight to all of the accident years in the experience history rather than treating each accident year independently.

•Paid Bornhuetter-Ferguson Method - a combination of the Paid Development Method and the Expected Loss Method, the Paid Bornhuetter-Ferguson Method estimates ultimate losses by adding actual paid losses and projected future unpaid losses. The amounts produced are then added to cumulative paid losses to produce the final estimates of ultimate incurred losses.

•Incurred Development Method - uses historical, cumulative incurred losses by accident year and develops those actual losses to estimated ultimate losses based upon the assumption that each accident year will develop to estimated ultimate cost in a manner that is analogous to prior years.

•Incurred Generalized Cape Cod Method - combines the Incurred Development Method with the expected loss method, where the expected loss ratios are estimated from exposure and claims experience weighted across multiple accident periods. The selected expected loss ratio for a given accident year is derived by giving some weight to all of the accident years in the experience history rather than treating each accident year independently.

•Incurred Bornhuetter-Ferguson Method - a combination of the Incurred Development Method and the Expected Loss Method, the Incurred Bornhuetter-Ferguson Method estimates ultimate losses by adding actual incurred losses and projected future unreported losses. The amounts produced are then added to cumulative incurred losses to produce an estimate of ultimate incurred losses.

•Expected Loss Method - utilizes an expected ultimate loss ratio based on historical experience adjusted for trends multiplied by earned premium to project ultimate losses.

For each method, losses are projected to the ultimate amount to be paid. We then analyze the results and may emphasize or deemphasize some or all of the outcomes to reflect actuarial judgment regarding their reasonableness in relation to supplementary information and operational and industry changes. These outcomes are then aggregated to produce a single selected point estimate that is the basis for the internal actuary’s point estimate for loss reserves.

In determining the level of emphasis that may be placed on some or all of the methods, internal actuaries periodically review statistical information as to which methods are most appropriate, whether adjustments are appropriate within the particular methods, and if results produced by each method include inherent bias reflecting operational and industry changes.

This supplementary information may include:

•open and closed claim counts;

•statistics related to open and closed claim count percentages;

•claim closure rates;

•changes in average case reserves and average loss and LAE incurred on open claims;

•reported and ultimate average case incurred changes;

•reported and projected ultimate loss ratios; and

•loss payment patterns.

When reviewing reserves, we analyze historical data and estimate the impact of numerous factors such as (1) individual claim information; (2) industry and the historical loss experience; (3) legislative enactments, judicial decisions, legal developments in the imposition of damages, and changes in political attitudes; and (4) trends in general economic conditions, including the effects of inflation. This process assumes that past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for predicting future events. There is no precise method for subsequently evaluating the impact of any specific factor on the adequacy of reserves, because the eventual deficiency or redundancy is affected by multiple factors. The key assumptions we use in our determination of appropriate reserve levels include the underlying actuarial methodologies, consideration of pricing and underwriting initiatives, an evaluation of reinsurance costs and retention levels in determining the net reserves, and consideration of any claims handling impact on paid and incurred loss data trends embedded in the traditional actuarial methods.

With respect to estimating ultimate losses and LAE, the key assumptions remained consistent for the years ended December 31, 2020, 2019, and 2018, and our approach in establishing such assumptions remained consistent

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for newly underwritten lines. If circumstances bear out our assumptions, losses incurred in 2020, should develop similarly to losses incurred in 2019, and prior years. Thus, if for example, the net loss ratio for auto insurance premiums written in a given accident year is 65.0%, we expect that the net loss ratio for auto insurance premiums written in that same accident year evolving in Year 2 would also be 65.0%. However, due to the inherent uncertainty in the loss development factors, our actual liabilities may differ significantly from our original estimates.

See Note 9, “Unpaid Losses and Loss Adjustment Expense Reserves” for more information about short-duration insurance contracts and claims development tables in the notes to our consolidated financial statements.

Technology

We rely heavily on technology and extensive data gathering and analysis to evaluate and price our products accurately according to risk exposure. In order to provide our policyholders and producers with superior service and realize profitable growth, we have substantially upgraded our information technology capabilities in recent years. In 2017, we acquired ownership of our personal lines policy administration system (“NPS”) and the related intellectual property, which we previously licensed. NPS has been fully transferred to our operating environment. NPS is based on advanced server-based technology allowing quicker processing and the ability for enhanced scalability. This system allows for increased straight-through automated processing, removing the need for expensive back office processes as well as providing enhanced self-service functionality. Since inception, we have reduced our information technology operating expenses significantly. Our goal is to continue to make strategic investments in technology in order to develop sophisticated tools that enhance our customer service, product management and data analysis capabilities.

Our RAD underwriting pricing tool accurately prices specific risk exposures to assist us in profitably underwriting our P&C products. Our RAD technology offers significant advantages over our prior underwriting pricing system by employing numerous additional components and pricing strategies such as supplemental risk and improved credit modeling. We believe the RAD underwriting pricing tool will facilitate better pricing over the lifetime of a policy by employing lifetime value modeling, elasticity modeling and optimized pricing.

In our lender-placed insurance business, we use a proprietary insurance-tracking system to monitor the customers’ mortgage portfolios to verify the continuation of insurance coverage on each mortgaged property. We believe we can leverage our technology expertise to operate the business under a more efficient cost structure.

Regulation

General

We are subject to extensive regulation in the United States and to a lesser extent in Bermuda. As of December 31, 2020, we had twenty-two operating insurance subsidiaries domiciled in the United States: Integon Casualty Insurance Company, Integon General Insurance Corporation, Integon Indemnity Corporation, Integon National Insurance Company (“Integon National”), Integon Preferred Insurance Company, New South Insurance Company, MIC General Insurance Corporation, National General Insurance Company, National General Assurance Company, National General Insurance Online, Inc., National Health Insurance Company, National General Premier Insurance Company, Imperial Fire and Casualty Insurance Company, Agent Alliance Insurance Company, Century-National Insurance Company, Standard Property and Casualty Insurance Company, Direct General Insurance Company, Direct General Insurance Company of Mississippi, Direct General Life Insurance Company, Direct Insurance Company, Direct National Insurance Company and National Farmers Union Property and Casualty Company. Our insurance subsidiaries have an “A-” (Excellent) group rating by A.M. Best. We currently conduct a limited amount of business outside the United States, primarily in Bermuda.

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State Insurance Regulation

Insurance companies are subject to regulation and supervision by the department of insurance in the jurisdiction in which they are domiciled and, to a lesser extent, other jurisdictions in which they are authorized to conduct business. The primary purpose of such regulatory powers is to protect individual policyholders. State insurance authorities have broad regulatory, supervisory and administrative powers, including, among other things, the power to (a) grant and revoke licenses to transact business, including individual lines of authority, (b) set the standards of solvency to be met and maintained, (c) determine the nature of, and limitations on, investments and dividends, (d) approve policy rules, rates and forms prior to issuance, (e) regulate and conduct specific examinations regarding marketing, unfair trade, claims and fraud prevention and investigation practices, and (f) conduct periodic comprehensive examinations of the financial condition of insurance companies domiciled in their state.

Financial Oversight

Reporting Requirements

Our insurance subsidiaries are required to file detailed financial statements prepared in accordance with statutory accounting principles and other reports with the departments of insurance in all states in which they are licensed to transact business. These reports include details concerning claims reserves held by the insurer, specific investments held by the insurer, and numerous other disclosures about the insurer’s financial condition and operations. These financial statements are subject to periodic examination by the department of insurance in each state in which they are filed.

Investments

State insurance laws and insurance departments also regulate investments that insurers are permitted to make. Limitations are placed on the amounts an insurer may invest in a particular issuer, as well as the aggregate amount an insurer may invest in certain types of investments. Certain investments (such as real estate) are prohibited by certain jurisdictions.

Each of our domiciliary states has its own regulations and limitations on the amounts an insurer may invest in a particular issuer and the aggregate amount an insurer may invest in certain types of investments. In general, investments may not exceed a certain percentage of surplus, admitted assets or total investments. For example, the investments of Integon National, domiciled in North Carolina, in stocks shall not exceed twenty-five percent of Integon National’s admitted assets and the stock of any one corporation may not exceed three percent of its admitted assets. To ensure compliance in each state, we review our investment portfolio quarterly based on each states regulations and limitations.

State Insurance Department Examinations

As part of their regulatory oversight process, state insurance departments conduct periodic detailed financial examinations of insurance companies domiciled in their states, generally once every three to five years. Examinations are generally carried out in cooperation with the insurance departments of other states under guidelines promulgated by the National Association of Insurance Commissioners (“NAIC”). A second type of regulatory oversight examination of insurance companies involves a review by an insurance department of an authorized company’s market conduct, which entails a review and examination of a company’s compliance with laws governing marketing, underwriting, rating, policy-issuance, claims-handling and other aspects of its insurance business during a specified period of time.

The results of these examinations can give rise to regulatory orders requiring remedial, injunctive or other corrective action on the part of the company that is the subject of the examination or assessing fines or other penalties against that company.

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Risk-Based Capital Regulations

Our insurance subsidiaries are required to report their risk-based capital based on a formula developed and adopted by the NAIC that attempts to measure statutory capital and surplus needs based on the risks in the insurer’s mix of products and investment portfolio. The formula is designed to allow insurance regulators to identify weakly-capitalized companies. Under the formula, a company determines its “risk-based capital” by taking into account certain risks related to the insurer’s assets (including risks related to its investment portfolio and ceded reinsurance) and the insurer’s liabilities (including underwriting risks related to the nature and experience of its insurance business). The departments of insurance in our domiciliary states generally require a minimum total adjusted risk-based capital equal to 200% of an insurance company’s authorized control level risk-based capital. Each of our insurance subsidiaries had total adjusted risk-based capital substantially in excess of 200% of the authorized control level as of December 31, 2020.

Insurance Regulatory Information System Ratios

The NAIC Insurance Regulatory Information System, or IRIS, is part of a collection of analytical tools designed to provide state insurance regulators with an integrated approach to screening and analyzing the financial condition of insurance companies operating in their respective states. IRIS is intended to assist state insurance regulators in targeting resources to those insurers in greatest need of regulatory attention. IRIS consists of two phases: statistical and analytical. In the statistical phase, the NAIC database generates key financial ratio results based on financial information obtained from insurers’ annual statutory statements. The analytical phase is a review of the annual statements, financial ratios and other automated solvency tools. The primary goal of the analytical phase is to identify companies that appear to require immediate regulatory attention. A ratio result falling outside the usual range of IRIS ratios is not considered a failing result; rather, unusual values are viewed as part of the regulatory early monitoring system. Furthermore, in some years, it may not be unusual for financially sound companies to have several ratios with results outside the usual ranges. An insurance company may fall out of the usual range for one or more ratios because of specific transactions that are in themselves immaterial or because of certain reinsurance or pooling structures or changes in such structures.

Management does not anticipate regulatory action as a result of the 2020 IRIS ratio results for our U.S. Insurance Subsidiaries. In all instances in prior years, regulators have been satisfied upon any follow-up that no regulatory action was required.

Statutory Accounting Principles

Statutory accounting principles, or SAP, are a basis of accounting developed to assist insurance regulators in monitoring and regulating the solvency of insurance companies. SAP is primarily concerned with measuring an insurer’s solvency. Statutory accounting focuses on valuing assets and liabilities of insurers at financial reporting dates in accordance with appropriate insurance law and regulatory provisions applicable in each insurer’s domiciliary state.

Generally accepted accounting principles, or GAAP, like SAP, is concerned with a company’s solvency, but it is also concerned with other financial measurements, principally income and cash flows. Accordingly, GAAP gives more consideration to appropriately matching revenue and expenses and accounting for management’s stewardship of assets than does SAP. As a direct result, different assets and liabilities and different amounts of assets and liabilities will be reflected in financial statements prepared in accordance with GAAP as compared to SAP.

Credit for Reinsurance

State insurance laws permit U.S. insurance companies, as ceding insurers, to take financial statement credit for reinsurance that is ceded, so long as the assuming reinsurer satisfies the state’s credit for reinsurance laws. The Nonadmitted and Reinsurance Reform Act (“NRRA”) contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) provides that if the state of domicile of a ceding insurer is an NAIC accredited state, or has financial solvency requirements substantially similar to the requirements necessary for NAIC

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accreditation, and recognizes credit for reinsurance for the insurer’s ceded risk, then no other state may deny such credit for reinsurance. Because all states are currently accredited by the NAIC, the Dodd-Frank Act prohibits a state in which a U.S. ceding insurer is licensed but not domiciled from denying credit for reinsurance for the insurer’s ceded risk if the cedant’s domestic state regulator recognizes credit for reinsurance. The ceding company in this instance is permitted to reflect in its statutory financial statements a credit in an aggregate amount equal to the ceding company’s liability for unearned premium (which are that portion of premiums written which applies to the unexpired portion of the policy period), loss reserves and loss expense reserves to the extent ceded to the reinsurer.

Holding Company Regulation

We qualify as a holding company system under state-enacted legislation that regulates insurance holding company systems. Each insurance company in a holding company system is required to register with the insurance regulatory agency of its state of domicile and periodically furnish information concerning its operations and transactions, particularly with other companies within the holding company system that may materially affect its operations, management or financial condition.

Transactions with Affiliates

The insurance laws in most of those states provide that all transactions among members of an insurance holding company system must be fair and reasonable. These laws require disclosure of material transactions within the holding company system and, in some cases, prior notice of or approval for certain transactions, including, among other things, (a) the payment of certain dividends, (b) cost sharing agreements, (c) intercompany agency, service or management agreements, (d) acquisition or divestment of control of or merger with domestic insurers, (e) sales, purchases, exchanges, loans or extensions of credit, guarantees or investments if such transactions are equal to or exceed certain thresholds, and (f) reinsurance agreements. All transactions within a holding company system affecting an insurer must have fair and reasonable terms and are subject to other standards and requirements established by law and regulation.

Dividends

Our insurance subsidiaries are subject to statutory requirements as to maintenance of policyholders’ surplus and payment of dividends. In general, the maximum amount of dividends that US-domiciled insurance subsidiaries may pay in any 12-month period without regulatory approval is the greater of adjusted statutory net income or 10% of statutory policyholders’ surplus as of the preceding calendar year end. Adjusted statutory net income is generally defined for this purpose to be statutory net income, net of realized capital gains, for the calendar year preceding the date of the dividend. Also, most states restrict an insurance company’s ability to pay dividends in excess of its statutory unassigned surplus or earned surplus. In addition, state insurance regulators may limit or restrict an insurance company’s ability to pay stockholder dividends or as a condition to the issuance of a certificate of authority, as a condition to a change of control approval, or for other regulatory reasons.

Enterprise Risk

The Model Insurance Holding Company System Regulatory Act and Regulation (the “Amended Model Act and Regulation”) adopted by the NAIC imposes more extensive informational requirements on an insurance holding company system in order to protect the licensed insurance companies from enterprise risk, including requiring it to prepare an annual enterprise risk report that identifies the material risks within the insurance company holding system that could pose enterprise risk to the licensed insurer. To date, a number of states have adopted some or all of the changes in the Amended Model Act and Regulation, including states where some of our insurance companies are domiciled or commercially domiciled.

The Risk Management and Own Risk and Solvency Assessment (“ORSA”) Model Act, adopted by the NAIC, requires insurers to maintain a framework for identifying, assessing, monitoring and reporting on the “material and relevant risks” associated with the insurer’s current business plans. Under the ORSA Model Act, an insurer must perform at least annually a self-assessment of its current and future risks and must file a confidential report with the

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insurer’s lead insurance regulator. The ORSA report was filed in 2020, with the Company’s lead insurance regulator, as well as with certain other state regulators, and describes our process for assessing our own solvency.

Change of Control

State insurance holding company laws require prior approval by the respective state insurance departments of any change of control of an insurer. “Control” is generally defined as the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of the company, whether through the ownership of voting securities, by contract or otherwise. Control is generally presumed to exist through the direct or indirect ownership of 10% or more of the voting securities of a domestic insurance company or any entity that controls a domestic insurance company. Any person acquiring control of us or of any substantial portion of our outstanding shares would first be required to obtain the approval of the domestic regulators (including those asserting “commercial domicile”) of our insurance subsidiaries.

Any transactions that would constitute a change of control, including a change of control of us and/or any of our domestic insurance subsidiaries, would generally require the party acquiring control to obtain the prior approval of the department of insurance in the state in which the insurance company being acquired is domiciled (and in any other state in which the company may be deemed to be commercially domiciled by reason of concentration of its insurance business within such state) and may also require pre-notification in certain other states. Obtaining these approvals may result in the material delay of, or deter, any such transaction.

Market Conduct

Regulation of Insurance Rates and Approval of Policy Forms

The insurance laws of most states in which we conduct business require insurance companies to file insurance rate schedules and insurance policy forms for review and approval. If, as permitted in some states, we begin using new rates before they are approved, we may be required to issue refunds or credits to the policyholders if the new rates are ultimately deemed excessive or unfair and disapproved by the applicable state regulator. In other states, prior approval of rate changes is required and there may be long delays in the approval process or the rates may not be approved. Accordingly, our ability to respond to market developments or increased costs in that state can be adversely affected.

Restrictions on Withdrawal, Cancellation, and Nonrenewal

In addition, many states have laws and regulations that limit an insurer’s ability to withdraw from a particular market. For example, states may limit an insurer’s ability to cancel or not renew policies. Furthermore, certain states prohibit an insurer from withdrawing from one or more lines of business written in the state, except pursuant to a plan that is approved by the state insurance department. The state insurance department may disapprove any proposed plan that may lead to market disruption. Laws and regulations that limit cancellation and non-renewal and that subject program withdrawals to prior approval requirements may restrict the ability of our insurance subsidiaries to exit unprofitable markets.

Required Licensing

Our insurance subsidiaries operate under licenses issued by the department of insurance in the states in which they sell insurance. If a regulatory authority denies or delays granting a new license, our ability to offer new insurance products in that market may be substantially impaired. In addition, if the department of insurance in any state in which one of our insurance subsidiaries currently operates suspends, non-renews, or revokes an existing license, we would not be able to offer affected products in the state.

In addition, insurance agencies, producers, third-party administrators, claims adjusters and service contract providers and administrators are subject to licensing requirements and regulation by insurance regulators in various

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states in which they conduct business. Certain of our subsidiaries engage in these functions and are subject to licensing requirements and regulation by insurance regulators in various states.

Guaranty Fund Assessments

Most, if not all, of the states where we are licensed to transact business require that property and casualty insurers doing business within the state participate in a guaranty association, which is organized to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers. These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the basis of the proportionate share of the premiums written by the member insurers in the lines of business in which the impaired, insolvent or failed insurer is engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets.

Property and casualty insurance company insolvencies or failures may result in additional guaranty association assessments to our insurance subsidiaries at some future date. At this time, we are unable to determine the impact, if any, that such assessments may have on their financial positions or results of their operations. As of December 31, 2020, each of our insurance subsidiaries has established accruals for guaranty fund assessments with respect to insurers that are currently subject to insolvency proceedings.

Assigned Risks

Many states in which we conduct business require automobile liability insurers to sell bodily injury liability, property damage liability, medical expense, and uninsured motorist coverage to a proportionate number (based on the insurer’s share of the state’s automobile casualty insurance market) of those drivers applying for placement as “assigned risks.” Drivers seek placement as assigned risks because their driving records or other relevant characteristics make them difficult to insure in the voluntary market.

Federal and State Legislative and Regulatory Changes

From time to time, various regulatory and legislative changes have been proposed in the insurance industry. Among the proposals that have in the past been or are at present being considered are the possible introduction of federal regulation in addition to, or in lieu of, the current system of state regulation of insurers and proposals in various state legislatures (some of which have been enacted) to conform portions of their insurance laws and regulations to various model acts adopted by the NAIC.

Regulatory changes occur from time to time with respect to state-based industry pools, facilities or associations. In June 2019, Michigan enacted major reforms of its current system governing personal automobile insurance. These changes to the Michigan Catastrophic Claims Association (“MCCA”), effective in 2020, among other things, allowed insureds to choose levels of personal injury protection coverage, including the option to opt-out of personal injury protection coverage in certain circumstances, and implemented mandated rate reductions that correspond to the level of personal injury protection coverage chosen by insureds.

On December 22, 2017, “H.R.1”, also known as the Tax Cuts and Jobs Act of 2017 (the “TCJA”), was signed into law. The TCJA reduced the federal corporate income tax rate from 35% to 21%, which impacted the Company’s effective tax rate and after-tax earnings in the United States. The Company was also affected by certain other aspects of the TCJA, such as limitations on the deductibility of interest expense and executive compensation, deductibility of capital expenditures, and, implementation of a minimum tax on the “global intangible low-taxed income” of a “United States shareholder” of a “controlled foreign corporation.”

The Dodd-Frank Act established a Federal Insurance Office (“FIO”) within the U.S. Department of the Treasury. The Federal Insurance Office is charged with monitoring all aspects of the insurance industry (other than health insurance, certain long-term care insurance and crop insurance), gathering data, and conducting a study on methods to modernize and improve the insurance regulatory system in the United States.

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In addition, the Dodd-Frank Act gives the Federal Reserve supervisory authority over a number of financial services companies, including insurance companies, if they are designated by a two-thirds vote of the Financial Stability Oversight Council as “systemically important.” If an insurance company is designated as systemically important, the Federal Reserve’s supervisory authority could include the ability to impose heightened financial regulations upon that insurance company and could impact requirements regarding its capital, liquidity and leverage as well as its business and investment conduct.

The Dodd-Frank Act also incorporates the NRRA, which, among other things, establishes national uniform standards on how states may regulate and tax surplus lines insurance and sets national standards concerning the regulation of reinsurance. In particular, the NRRA gives regulators in the home state of an insured exclusive authority to regulate and tax surplus lines insurance transactions, and regulators in a ceding insurer’s state of domicile the sole responsibility for regulating the balance sheet credit that the ceding insurer may take for reinsurance recoverable.

Existing and new laws and regulations affecting the health insurance industry, or changes to existing laws and regulations, may transpire. The PPACA was signed into law in 2010, and, in recent years there have been several judicial and congressional challenges and a number of proposed and adopted amendments to the PPACA. The TCJA also repealed certain aspects of the PPACA. If we are unable to adapt our A&H business to current and/or future requirements of the health insurance legislation, our A&H business could be materially adversely affected.

Other possible federal regulatory developments include the introduction of legislation in Congress that would repeal the McCarran-Ferguson Act antitrust exemption for the insurance industry. The antitrust exemption allows insurers to compile and share loss data, develop standard policy forms and manuals and predict future loss costs with greater reliability, among other things. The ability of the industry, under the exemption permitted in the McCarran-Ferguson Act, to collect loss cost data and build a credible database as a means of predicting future loss costs is an important part of cost-based pricing. If the ability to collect this data were removed, the predictability of future loss costs and the reliability of pricing could be undermined.

In recent years, the lender-placed insurance business has been subject to class action litigation and investigations by state insurance regulators and federal regulatory agencies. Litigation and regulatory proceedings have included allegations of excessive premium rates and inappropriate business transactions. Unfavorable outcomes of litigation or regulatory investigations or significant problems in our relationships with regulators could adversely affect our results of operations and financial condition, reputation, and ability to continue to do business. They could also expose us to further investigations or litigation. In addition, certain of our customers in the mortgage industry are the subject of various regulatory investigations and/or litigation regarding mortgage lending practices, which could indirectly affect agreements with these clients and our business.

Privacy Regulations

The Gramm-Leach-Bliley Act is a federal law which, among other things, protects consumers from the unauthorized dissemination of certain personal information. States have also implemented additional regulations to address privacy issues. For example, the California Consumer Privacy Act (“CCPA”) was signed into law on June 28, 2018, and took effect on January 1, 2020. The CCPA, among other things, contains new disclosure obligations for businesses that collect personal information about California residents and affords those individuals new rights relating to their personal information that may affect our ability to use personal information or share it with our business partners. The CCPA also creates a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach. We will continue to monitor and assess the interpretation and enforcement of these state laws, which are continuously developing and evolving, and there is significant uncertainty with respect to how these laws and regulations may evolve and the costs and complexity of future compliance. Certain aspects of these laws and regulations apply to all financial institutions, including insurance and finance companies, and require us to maintain appropriate policies and procedures for managing and protecting certain personal information of our policyholders. We may also be subject to future privacy laws and regulations, which could impose additional costs and impact our results of operations or financial condition. The NAIC adopted the Privacy of Consumer Financial and Health Information Model Regulation in 2000, which assisted

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states in promulgating regulations to comply with the Gramm-Leach-Bliley Act. In 2002, to further facilitate the implementation of the Gramm-Leach-Bliley Act, the NAIC adopted the Standards for Safeguarding Customer Information Model Regulation. Several states have now adopted similar provisions regarding the safeguarding of policyholder information.

Additionally, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), The Health Information Technology for Economic and Clinical Health Act (“HITECH”), and the 2013 Omnibus Rule dictates the dissemination of an individual’s personal health information by covered entities and their business associates. These laws and their implementing regulations apply to health care providers and health insurers, and thereby requires our A&H business to maintain policies and procedures with regard to the storage, maintenance and disclosure of our policyholders’ personal health information.

Cybersecurity Regulation

Insurance regulators have been focusing increased attention on data security during financial exams, and new laws and regulations are pending that would impose new requirements and standards for protecting personally identifiable information of insurance company policyholders. For example, the New York Department of Financial Services enacted a comprehensive cybersecurity regulation that became effective during 2017, requiring insurance companies and other entities to have a cybersecurity program designed to protect consumers’ private data; a written policy that is approved by the board or a senior officer; a chief information security officer to help protect data and systems; and controls and plans in place to help ensure the safety of New York’s financial services industry. In addition, the NAIC has adopted the Roadmap for Cybersecurity Consumer Protections, a set of directives aimed at protecting consumer data, and is working on a new model data security law that is expected to incorporate the directives and impose additional requirements on insurance companies to the extent ultimately adopted by applicable state legislation. The NAIC has also strengthened and enhanced the cybersecurity guidance included in its handbook for state insurance examiners. We anticipate a continuing focus on new regulatory and legislative proposals at the state and federal levels that further regulate practices regarding privacy and security of personal information.

Telephone Sales Regulations

The United States Congress, the Federal Communications Commission and various states have promulgated and enacted rules and laws that govern telephone solicitations. There are numerous state statutes and regulations governing telephone sales activities that do or may apply to our operations, including the operations of our call center insurance agencies. For example, some states place restrictions on the methods and timing of calls and require that certain mandatory disclosures be made during the course of a telephone sales call. Federal and state “Do Not Call” regulations must be followed for us to engage in telephone sales activities.

Foreign Regulation

Classification

Our Bermuda subsidiaries, National General Re Ltd. (“NG Re”) and National General Insurance Ltd. (“NGIL”, and together with NG Re, the “Bermuda Insurers”), are registered as Class 3A general insurers with the Bermuda Monetary Authority (“BMA”) under the Bermuda Insurance Act, 1978 and related regulations as amended (the “Insurance Act - Bermuda”). The Bermuda Insurers’ license authorizes them to write general business other than long-term business. The BMA is responsible for the day-to-day supervision of insurers and monitors compliance with the solvency and liquidity standards imposed by the Insurance Act - Bermuda.

Annual Financial Statements, Annual Statutory Financial Return and Annual Capital and Solvency Return

Each Bermuda Insurer is required to file annually with the BMA financial statements, a statutory financial return and a capital and solvency return. The statutory financial return for an insurer includes, among other matters, statutory financial statements, a report of the approved auditor on the statutory financial statements, and a declaration of compliance confirming compliance with various minimum criteria, including certifying the company

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meets the minimum solvency margin. The capital and solvency return for each Bermuda Insurer includes a Bermuda solvency capital return model for a Class 3A insurer, a commercial insurer's solvency self-assessment, a reconciliation of net loss reserves, schedule of solvency, financial condition report, an opinion of the company’s loss reserve specialist, a schedule of eligible capital and an economic balance sheet. Each capital and solvency return also includes a capital and solvency declaration that the return fairly represents the financial condition of the respective Bermuda Insurer in all material respects.

Insurance Code of Conduct

The Insurance Code of Conduct prescribes the duties and standards with which registered insurers must adhere and comply, to ensure that the registered insurer implements sound corporate governance, risk management and internal controls. Failure to comply with these requirements is a factor considered by the BMA in determining whether an insurer is conducting its business in a sound and prudent manner. Any failure to comply with the requirements of the Insurance Code of Conduct could result in the BMA exercising its statutory powers of intervention.

Minimum Solvency Margin and Restrictions on Dividends and Distributions

Under the Insurance Act - Bermuda, the value of the general business assets of a registered Class 3A insurer must exceed the amount of its general business liabilities by an amount greater than the prescribed minimum solvency margin.

Each Bermuda Insurer cannot declare or pay dividends during any financial year if it is in breach of its minimum solvency margin or minimum liquidity ratio or if it would fail to meet such margin or ratio as a result. In addition, BMA approval would be required prior to a Bermuda Insurer declaring or paying dividends in any financial year that such Bermuda Insurer failed to meet its minimum solvency margin or minimum liquidity ratio on the last day of any financial year.

As a registered Class 3A insurer, each Bermuda Insurer is prohibited from declaring or paying dividends of more than 25% of its previous year’s total statutory capital and surplus unless it files with the BMA an affidavit stating that a declaration of the dividend has not caused the insurer to fail to meet its relevant margins. Relevant margins in relation to an insurer means its solvency margin, and in relation to an insurer carrying on general business, its minimum liquidity ratio. In addition, each Bermuda Insurer is prohibited, without the approval of the BMA, from reducing by 15% or more its total statutory capital as set out in its previous year’s financial statements.

Minimum Liquidity Ratio

Under Regulation 11 of the Insurance Returns and Solvency Regulations 1980 - Bermuda, an insurer engaged in general business is required to maintain the value of its relevant assets at not less than 75% of the amount of its relevant liabilities.

Offices

Our principal executive offices are located at 59 Maiden Lane, 38th Floor, New York New York 10038, and our telephone number at that location is (212) 380-9500. Our website is www.nationalgeneral.com. Our internet website and the information contained therein or connected thereto are not intended to be incorporated by reference into the Annual Report on Form 10-K.

Human Capital Management

As of December 31, 2020, we have approximately 9,700 employees, including part-time employees, none of whom are covered by collective bargaining arrangements.

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We are committed to ensuring that employees achieve their personal best by providing the resources needed for employees to take charge of their own future successful career at a highly rated insurance provider that is focused on innovation. We offer employment opportunities for entry-level positions, working professionals and students, and we provide training and competitive compensation in an effort to attract and retain skilled employees. Our human capital strategy focuses on our values and culture, employee development and training, and safety of our employees. The execution of this strategy is overseen at the highest levels of our organization from our senior management.

We are committed to a culture which values teamwork, entrepreneurship and opportunity. In support of our culture, we encourage the diversity of ideas and unique skills that each employee brings to our organization because all of our employees are essential to our success. We appreciate hard work and dedication and an entrepreneurial spirit.

We are a fast paced and dynamic organization, and our employees live by and exemplify what we call the 4 Es. At National General, we are Energized, Engaged, and Empowered, and we Execute every day in order to provide an exceptional experience for our customers. Our successful employees: are Engaged in the overall success of the company and always looking for a better way to address what we do as well as why and how we do things; are Energized and push themselves and colleagues to do more every day; Exhibit Empowerment through the willingness to take initiative and leadership, accepting additional responsibilities beyond regular job duties or assignments while making a positive impact on the company as a whole; and Execute and follow through on commitments while going above and beyond, exceeding the expectations of those internally and externally.

Our Code of Business Conduct and Ethics ensures that our core values of respect, teamwork, innovation, and excellence are applied throughout our organization. Our Code of Business Conduct and Ethics serves as a critical tool to help all of us recognize and report unethical conduct, while preserving our culture of honesty. We provide a certification program on our Code of Business Conduct for all of our employees annually.

Our online training platform provides our staff and management employees with access to a multitude of training courses, videos, reference material, and other tools. Our employees also receive on-the-job training to ensure we are executing appropriately for our clients.

We are committed to the safety of our employees. During the Covid-19 pandemic, we transformed large portions of our employee workforce into work-from-home roles, ensuring minimal disruption to customers and vendors while maintaining the health and safety of our employees and their communities. For areas of our organization that were not able to work remotely, precautions were taken to protect those limited employees, including the implementation of social distancing and personal protective equipment requirements, enhanced cleaning and sanitation procedures, and modified workspaces to reduce the potential for disease transmission.

Available Information

We file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14A and all amendments to those reports as required by the U.S. Securities and Exchange Commission (the “SEC”). You may obtain our electronic filings by accessing the SEC’s website at http://www.sec.gov.

You can also obtain on our website’s Investor Relations page (www.nationalgeneral.com), free of charge, a copy of our annual report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after we electronically file such reports or amendments with, or furnish them to, the SEC.

Also available at the “Corporate Governance” section of the Investor Relations page of our website, free of charge, are copies of our Code of Business Conduct and Ethics, and the Charters for our Audit, Compensation, and Nominating and Corporate Governance Committees. Copies of our Code of Business Conduct and Ethics, and Charters are also available in print free of charge, upon request by any shareholder. You can obtain such copies in

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print by contacting Investor Relations by mail at our corporate office. We intend to disclose on our website any amendment to, or waiver of, any provision of our Code of Business Conduct and Ethics applicable to our directors and executive officers that would otherwise be required to be disclosed under the rules of the SEC or Nasdaq.

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Item 1A. Risk Factors

You should carefully consider the following risks and all of the other information set forth in this report, including our consolidated financial statements and the notes thereto. The following discussion of risk factors includes forward-looking statements and our actual results may differ substantially from those discussed in such forward-looking statements. See “Note on Forward-Looking Statements.”

Risks Relating to Our Business

If we are unable to accurately underwrite risks and charge competitive yet profitable rates to our policyholders, our business, financial condition and results of operations may be adversely affected.

In general, the premiums for our insurance policies are established at the time a policy is issued and, therefore, before all of our underlying costs are known. Like other insurance companies, we rely on estimates and assumptions in setting our premium rates. Establishing adequate premiums is necessary, together with investment income, to generate sufficient revenue to offset losses, LAE and other underwriting costs and to earn a profit. If we do not accurately assess the risks that we assume, we may not charge adequate premiums to cover our losses and expenses, which would negatively affect our results of operations and our profitability. Alternatively, we could set our premiums too high, which could reduce our competitiveness and lead to lower revenues.

Pricing involves the acquisition and analysis of historical loss data, and the projection of future trends, loss costs and expenses, and inflation trends, among other factors, for each of our products in multiple risk tiers and many different markets. In order to accurately price our policies, we:

•collect and properly analyze a substantial volume of data from our insureds;

•develop, test and apply appropriate actuarial projections and rating formulas;

•closely monitor and timely recognize changes in trends; and

•project both frequency and severity of our insureds’ losses with reasonable accuracy.

We seek to implement our pricing accurately in accordance with our assumptions. Our ability to undertake these efforts successfully and, as a result, accurately price our policies, is subject to a number of risks and uncertainties, including:

•insufficient or unreliable data;

•incorrect or incomplete analysis of available data;

•uncertainties generally inherent in estimates and assumptions;

•our failure to implement appropriate actuarial projections and rating formulas or other pricing methodologies;

•regulatory constraints on rate increases;

•unexpected escalation in the costs of ongoing medical treatment;

•our failure to accurately estimate investment yields and the duration of our liability for loss and LAE; and

•unanticipated court decisions, legislation or regulatory action.

If we are unable to establish and maintain accurate loss reserves, our business, financial condition and results of operations may be materially adversely affected.

Our financial statements include loss reserves, which represent our best estimate of the amounts that our insurance subsidiaries ultimately will pay on claims that have been incurred, and the related costs of adjusting those claims, as of the date of the financial statements. The process of estimating loss reserves involves a high degree of judgment and is subject to a number of variables. These variables can be affected by both internal and external events, such as: changes in claims handling procedures, adverse changes in loss cost trends, economic conditions (including general inflation), legal trends and legislative changes, and varying judgments and viewpoints in the estimation process, among others. The impact of many of these items on ultimate loss reserves is difficult to estimate.

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As a result of these uncertainties, the ultimate paid LAE may deviate, perhaps substantially, from the point-in-time estimates of such losses and expenses, as reflected in the loss reserves included in our financial statements. To the extent that loss and LAE exceed our estimates, we will be required to immediately recognize the unfavorable development and increase loss reserves, with a corresponding reduction in our net income in the period in which the deficiency is identified. Consequently, ultimate losses paid could materially exceed reported loss reserves and have a materially adverse effect on our business, financial condition and results of operations.

The current COVID-19 pandemic could materially impact our business, our future results of operations and our overall financial condition.

In March 2020, the outbreak of COVID-19 caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization. The outbreak has become increasingly widespread in the United States, including in the markets in which we operate. Because of the size and breadth of this pandemic, all of the direct and indirect consequences of COVID-19 are not yet known and may not emerge for some time.

The COVID-19 outbreak has had a notable adverse impact on general economic conditions, including adverse impacts on automobile sales and new home sales and increased unemployment, which may decrease customer demand for our insurance products, negatively impact our premium volume, and otherwise adversely impact our future results of operations. For a further discussion of risks that can impact us as a result of an economic downturn, see “General economic conditions could materially and adversely affect our business, our liquidity and financial condition.” included in this section.

The outbreak of COVID-19 has caused, and will continue to cause, substantial disruption to our employees, distribution channels and customers through self-isolation, travel limitations, business restrictions, and otherwise. Though most of our employees are able to work remotely, these closures have nevertheless affected many of our customers and certain channels through which we sell our products and services. In addition, an interruption of our system capabilities could result in a deterioration of our ability to write and process new business, provide customer service, pay claims in a timely manner or perform other necessary business functions. Having shifted to remote working arrangements, we also face a heightened risk of cybersecurity attacks or data security incidents and are more dependent on internet and telecommunications access and capabilities. These effects, individually or in the aggregate, could adversely impact our business, financial condition, operating results and cash flows, and such adverse impacts may be material.

The disruption in the financial markets due to the continuing impact of COVID-19 could result in net realized and unrealized investment losses, including potential impairments in our fixed income portfolio. For further discussion of the risks related to our investment portfolio see “Performance of our investment portfolio is subject to a variety of investment risks that may adversely affect our financial results.” included in this section. In the event that these market conditions recur or result in a prolonged economic downturn, our results of operations, financial position and/or liquidity could be materially and adversely affected.

Federal, state, and local government actions to address and contain the impact of COVID-19 may adversely affect us. For example, regulatory actions seek to retroactively mandate coverage for losses which various types of insurance policies were not designed or priced to cover or seek to require premium refunds. Regulatory restrictions or requirements also impact pricing, risk selection and our rights and obligations with respect to our policies and insureds, including our ability to cancel policies or our right to collect premiums or fees. This may also result in an increased charge for uncollected premium and lower service and fee income. It is also possible that changes in economic conditions and steps taken by federal, state, and local governments in response to COVID-19 could require an increase in taxes at the federal, state, and local levels, which would adversely impact our results of operations.

Any of the foregoing effects, individually or in the aggregate, or other cascading effects of the COVID-19 pandemic that are not currently foreseeable, could adversely impact our business, operating results and our overall financial condition, and such adverse impacts may be material. The duration of any such impacts cannot be predicted.

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General economic conditions could materially and adversely affect our business, our liquidity and financial condition.

General economic factors beyond our control that affect our business include unemployment rates, consumer spending, residential and commercial real estate prices, U.S. debt ceiling and budget deficit concerns, tax rates and policies, changes in interest rates and the availability of credit. Such conditions may potentially affect (among other aspects of our business) the demand for and claims made under our products, the ability of customers, counterparties and others to establish or maintain their relationships with us, our ability to access and efficiently use internal and external capital resources and our investment performance. In the event that these conditions result in a prolonged period of economic uncertainty, our results of operations, our financial condition and/or liquidity, our prospects and competitor landscape could be materially and adversely affected.

Our business is dependent on the efforts of our executive officers and other key employees. If we are unsuccessful in our efforts to attract, train and retain qualified executive officers and key employees, our business may be materially adversely affected.

Our success has developed from, and will continue to depend on, the efforts of our executive officers because of their industry expertise, knowledge of our markets, and relationships with our independent agents and distribution partners. Should any of our executive officers cease working for us, we may be unable to find acceptable replacements with comparable skills and experience in the specialty P&C and A&H sectors that we target. In addition, our business is also dependent on skilled underwriters and other skilled employees. We cannot assure you that we will be able to attract, train and retain, on a timely basis and on anticipated economic and other terms, experienced and capable senior management, underwriters and support staff. We intend to pay competitive salaries, bonuses and equity-based rewards in order to attract and retain such personnel, but we may not be successful in such endeavors. The loss of key personnel, or the inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business, financial condition or operating results. We do not currently maintain life insurance policies with respect to our executive officers or other employees.

Revenues and operating profits from our P&C segment depend on our production in several key states and adverse developments in these key states could have a material adverse effect on our business, financial condition and results of operations.

For the year ended December 31, 2020, our P&C segment derived 72.7% of its gross premium written from the following ten states: North Carolina (15.9%), California (14.2%), New York (11.8%), Florida (11.6%), Texas (4.0%), Virginia (3.5%), Louisiana (3.4%), Alabama (2.9%), New Jersey (2.9%), and Connecticut (2.5%). As a result, our financial results are subject to prevailing regulatory, legal, economic, demographic, competitive, and other conditions in these states. Adverse developments relating to any of these conditions could have a material adverse effect on our business, financial condition and results of operations.

If we cannot sustain our business relationships, including our relationships with independent agents, agencies and other parties, we may be unable to compete effectively and operate profitably.

We market our products primarily through a network of independent agents and distribution partners. Our relationships with our agents are generally governed by agreements that may be terminated on short notice. Independent agencies generally are not obligated to promote our products and may sell insurance offered by our competitors. As a result, our ability to compete and remain profitable depends, in part, on our maintaining our business relationship with our independent agents and agencies, the marketing efforts of our independent agents and agencies and on our ability to offer insurance products and maintain financial strength ratings that meet the requirements and preferences of our independent agents and agencies and their policyholders.

In connection with our lender-placed insurance business, we also have relationships with certain mortgage lenders and servicers, and we insure properties securing mortgages serviced by the mortgage loan servicers with whom we do business. If such lenders terminate important business arrangements with us, or renew contracts on terms less favorable to us, our cash flows, results of operations and financial condition could be materially adversely

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affected. For example, in our lender-placed insurance business, restrictions imposed by state regulators on us or by federal regulators on our customers could affect our ability to do business with certain mortgage loan servicers or the volume or profitability of such business. Furthermore, the transfer by mortgage servicer clients of loan portfolios to other carriers or the new participation by other carriers in insuring or reinsuring lender-placed insurance risks could materially reduce our revenues and profits from this business.

Any failure on our part to be effective in any of these areas could have a material adverse effect on our business and results of operations.

Our affinity channel depends on a relatively small number of affinity partner relationships for a significant percentage of the net premium revenue that it generates, and the loss of one of these significant affinity partner relationships could have a material adverse effect on our business, financial condition and results of operations.

Our affinity channel operates primarily through relationships with affinity partners, which include major retailers and membership organizations. Our top two affinity relationships collectively represent 63% of our affinity channel written premium. Although our relationships with these and most of our other affinity partners are long-standing with long-term contracts, in the event of the termination of any of our significant affinity partner relationships, our net earned premium could be adversely affected.

If we, together with our affiliates and the other third parties that we contract with, are unable to maintain our technology platform or our technology platform fails to operate properly, or we fail to meet the technological demands of our customers with respect to the products and services we offer, our business and financial performance could be significantly harmed.

We use our own policy administration system. We also use technology systems to more accurately evaluate specific risk exposures in order to assist us in profitably underwriting our P&C products.

If we are unable to properly maintain our policy administration system and other technology systems or if our technology systems otherwise fail to perform in the manner we currently contemplate, our ability to effectively underwrite and issue policies, process claims and perform other business functions could be significantly impaired and our business and financial performance could be significantly harmed. In addition, the success of our business is dependent on our ability to resolve any issues identified with our technology arrangements during operations and make any necessary improvements in a timely manner. Further, we will need to match or exceed the technological capabilities of our competitors over time. We cannot predict with certainty the cost of such integration, maintenance and improvements, but failure to make such improvements could have an adverse effect on our business.

Also, we use e-commerce and other technology to provide, expand and market our products and services. Accordingly, we believe that it will be essential to continue to invest resources in maintaining electronic connectivity with customers and, more generally, in e-commerce and technology. Our business may suffer if we do not maintain these arrangements or keep pace with the technological demands of customers.

If we experience security breaches or other disruptions involving our technology, our ability to conduct our business could be adversely affected, we could be liable to third parties and our reputation could suffer, which could have a material adverse effect on our business.

Our business is dependent upon the uninterrupted functioning of our information technology and telecommunication systems. We rely upon our systems, as well as the systems of our vendors, for all our business operations, including underwriting and issuing policies, processing claims, providing customer service, complying with insurance regulatory requirements and performing actuarial and other analytical functions necessary for underwriting, pricing and product development. Our operations are dependent upon our ability to timely and efficiently maintain and improve our information and telecommunications systems and protect them from physical loss, telecommunications failure or other similar catastrophic events, as well as from security breaches. A shut-down of, or inability to access, one or more of our facilities, a power outage or a failure of one or more of our information technology, telecommunications or other systems could significantly impair our ability to perform such functions on

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a timely basis. In the event of a disaster such as a natural catastrophe, terrorist attack or industrial accident, or due to a computer virus or other form of cyberattacks, our systems could be inaccessible for an extended period of time. While we have implemented business contingency plans and other reasonable and appropriate internal controls to protect our systems from interruption, loss or security breaches, a sustained business interruption or system failure could adversely impact our ability to process our business, provide customer service, pay claims in a timely manner or perform other necessary business functions.

Our operations depend on the reliable and secure processing, storage and transmission of confidential and other information in our computer systems and networks. Computer viruses, hackers, phishing attempts, e-mail fraud, employee misconduct and other external hazards could expose our data systems to security breaches, cyberattacks or other disruptions. In addition, we routinely transmit and receive personal, confidential and proprietary information by electronic means. Despite security measures that we have implemented, we cannot assure you that our or third party systems and networks will not be subject to breaches or interference. Any such event may result in operational disruptions, cause payments to be made to an unintended recipient, or result in unauthorized access to or the disclosure or loss of our proprietary information or our customers’ information, which in turn may result in legal claims, regulatory scrutiny and liability, reputational damage, the incurrence of costs to eliminate or mitigate further exposure, the loss of customers or affiliated advisors or other damage to our business. In addition, the trend toward broad consumer and general public notification of such incidents could exacerbate the harm to our business, financial condition and results of operations. We could suffer harm to our business and reputation if attempted security breaches are publicized. We cannot be certain that advances in criminal capabilities, discovery of new vulnerabilities, attempts to exploit vulnerabilities in our systems, data thefts, physical system or network break-ins or inappropriate access, or other developments will not compromise or breach the technology or other security measures protecting the networks and systems used in connection with our business.

The regulatory environment surrounding information security and privacy is increasingly demanding. We are subject to numerous U.S. federal and state laws and regulations in jurisdictions outside the U.S. governing the protection of personal and confidential information of our clients or employees. These laws and regulations are increasing in complexity and number and change frequently. If any person, including any of our employees or those with whom we share such information, negligently disregards or intentionally breaches our established controls with respect to our client or employee data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions.

If our businesses, including businesses we have acquired, do not perform well, we may be required to recognize an impairment of our goodwill or other intangible assets, which could have a material adverse effect on our financial condition and results of operations.

Goodwill represents the excess of the amounts we paid to acquire subsidiaries and other businesses over the fair value of their net assets at the date of acquisition. We are required to perform goodwill impairment tests at least annually and whenever events or circumstances indicate that the carrying value may not be recoverable from estimated future cash flows. If we determine that the goodwill has been impaired, we would be required to write down the goodwill by the amount of the impairment, with a corresponding charge to net income. Such write-downs could have a material adverse effect on our financial condition and results of operations.

Intangible assets represent the amount of fair value assigned to certain assets when we acquire a subsidiary or a book of business. Intangible assets are classified as having either a finite or an indefinite life. We test the recoverability of our intangible assets at least annually. We test the recoverability of finite life intangibles whenever events or changes in circumstances indicate that the carrying value of a finite life intangible may not be recoverable. We recognize an impairment if the carrying value of an intangible asset is not recoverable and exceeds its fair value, in which circumstances we must write down the intangible asset by the amount of the impairment with a corresponding charge to net income. We own two management companies that are attorneys-in-fact for two reciprocal exchanges. If the reciprocal business does not perform well or the reciprocal exchanges are downgraded, we may be required to recognize an impairment of our intangible assets. Such write downs could have a material adverse effect on our financial condition and results of operations.

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A downgrade in the A.M. Best rating of our insurance subsidiaries would likely reduce the amount of business we are able to write and could materially adversely impact the competitive positions of our insurance subsidiaries.

Rating agencies evaluate insurance companies based on their ability to pay claims. A.M. Best has currently assigned our insurance subsidiaries a group rating of “A-” (Excellent). On July 9, 2020, following the announcement of our agreement to be acquired by Allstate, A.M. Best placed us and our subsidiaries under review with positive implications. The ratings of A.M. Best are subject to periodic review using, among other things, proprietary capital adequacy models, and are subject to revision or withdrawal at any time. Our competitive position relative to other companies is determined in part by the A.M. Best rating of our insurance subsidiaries. A.M. Best ratings are directed toward the concerns of policyholders and insurance agencies and are not intended for the protection of investors or as a recommendation to buy, hold or sell securities.

There can be no assurances that our insurance subsidiaries will be able to maintain their current ratings. Any downgrade in ratings would likely adversely affect our business through the loss of certain existing and potential policyholders and the loss of relationships with independent agencies that might move to other companies with higher ratings. We are not able to quantify the percentage of our business, in terms of premiums or otherwise, that would be affected by a downgrade in our A.M. Best ratings.

Performance of our investment portfolio is subject to a variety of investment risks that may adversely affect our financial results.

Our results are affected, in part, by the performance of our investment portfolio. Our investment portfolio contains interest rate sensitive investments, such as fixed-income securities. As of December 31, 2020, our investment in fixed-income securities was approximately $4,497.1 million, or 90.5% of our total investment portfolio. Increases in market interest rates may have an adverse impact on the value of our investment portfolio by decreasing the value of fixed-income securities. Conversely, declining market interest rates could have an adverse impact on our investment income as we invest positive cash flows from operations and as we reinvest proceeds from maturing and called investments in new investments that could yield lower rates than our investments have historically generated. Defaults in our investment portfolio may produce operating losses and adversely impact our results of operations.

Our investment portfolio also contains floating rate instruments, which typically bear interest based on LIBOR. Regulatory and industry initiatives to eliminate LIBOR as an interest rate benchmark may create uncertainty in our LIBOR-based instruments, which may adversely impact both pricing and liquidity of such instruments.

Interest rates are highly sensitive to many factors, including governmental monetary policies, domestic and international economic and political conditions, and other factors beyond our control. We may not be able to manage interest rate sensitivity effectively. Despite our efforts to maintain a high quality portfolio and manage the duration of the portfolio to reduce the effect of interest rate changes, a significant change in interest rates could have a material adverse effect on our financial condition and results of operations.

In addition, the performance of our investment portfolio generally is subject to other risks, including the following:

•the risk of decrease in value due to a deterioration in the financial condition, operating performance or business prospects of one or more issuers of our fixed-income securities;

•the risk that our portfolio may be too heavily concentrated in the securities of one or more issuers, sectors or industries;

•the risk that we will not be able to convert investment securities into cash on favorable terms and on a timely basis; and

•general movements in the values of securities markets.

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If our investment portfolio were to suffer a substantial decrease in value due to market, sector or issuer-specific conditions, our liquidity, financial condition and results of operations could be materially adversely affected. A decrease in value of an insurance subsidiary’s investment portfolio could also put the subsidiary at risk of failing to satisfy regulatory minimum capital requirements and could limit the subsidiary’s ability to write new business.

Our holding company structure and certain regulatory and other constraints, including adverse business performance, could affect our ability to satisfy our obligations.

We are a holding company and conduct our business operations through our various subsidiaries. Our principal sources of funds are dividends and other payments from our insurance subsidiaries and other operating subsidiaries, income from our investment portfolio and funds that may be raised from time to time in the capital markets. We will be largely dependent on amounts from our insurance subsidiaries to pay principal and interest on any indebtedness that we may incur, to pay holding company operating expenses, to make capital investments in our other subsidiaries and to pay dividends on our common and preferred stock. In addition, our credit agreement contains covenants that limit our ability to pay cash dividends to our stockholders under certain circumstances.

Our insurance subsidiaries are subject to statutory and regulatory restrictions imposed on insurance companies by their states of domicile, which limit the amount of cash dividends or distributions that they may pay to us unless special permission is received from the insurance regulator of the relevant domiciliary state. In general, the maximum amount of dividends that US-domiciled insurance subsidiaries may pay in any 12-month period without regulatory approval is the greater of adjusted statutory net income or 10% of statutory policyholders’ surplus as of the preceding calendar year end. Adjusted statutory net income is generally defined for this purpose to be statutory net income, net of realized capital gains, for the calendar year preceding the date of the dividend. In addition, other states may limit or restrict our insurance subsidiaries’ ability to pay stockholder dividends generally or as a condition to issuance of a certificate of authority. The aggregate amount of cash dividends and distributions that could be paid by our insurance subsidiaries without prior approval by the various domiciliary states of our insurance subsidiaries was approximately $156.4 million as of December 31, 2020, taking into account dividends paid in the prior twelve month period.

Our insurance subsidiaries are subject to minimum capital and surplus requirements. Our failure to meet these requirements could subject us to regulatory action.

The laws of the states of domicile of our insurance subsidiaries impose risk-based capital standards and other minimum capital and surplus requirements. Failure to meet applicable risk-based capital requirements or minimum statutory capital requirements could subject us to further examination or corrective action imposed by state regulators, including limitations on our writing of additional business, state supervision or liquidation. Any changes in existing risk-based capital requirements or minimum statutory capital requirements may require us to increase our statutory capital levels, which we may be unable to do. See Item 1, “Business - Regulation - State Insurance Regulation - Financial Oversight-Risk-Based Capital Regulations.”

The insurance industry is subject to extensive regulation, which may affect our ability to execute our business plan and grow our business.

We are subject to comprehensive regulation and supervision by government agencies in each of the states in which our insurance subsidiaries are domiciled or commercially domiciled, as well as all states in which they are licensed, sell insurance products, issue policies, or handle claims. Some states impose restrictions or require prior regulatory approval of specific corporate actions, which may adversely affect our ability to operate, innovate, obtain necessary rate adjustments in a timely manner or grow our business profitably. These regulations provide safeguards for policyholders and are not intended to protect the interests of stockholders. Our ability to comply with these laws and regulations, and to obtain necessary regulatory action in a timely manner is, and will continue to be, critical to our success. Some of these regulations include:

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•Required Licensing. We operate under licenses issued by the insurance department in the states in which we sell insurance. If a regulatory authority denies or delays granting a new license, our ability to enter that market quickly or offer new insurance products in that market may be substantially impaired. In addition, if the insurance department in any state in which we currently operate suspends, non-renews, or revokes an existing license, we would not be able to offer affected products in that state.

•Transactions Between Insurance Companies and Their Affiliates. Transactions between us or other of our affiliates and our insurance companies generally must be disclosed, and prior approval is required before any material or extraordinary transaction may be consummated. Approval may be refused or the time required to obtain approval may delay some transactions, which may adversely affect our ability to innovate or operate efficiently.

•Regulation of Insurance Rates and Approval of Policy Forms. The insurance laws of most states in which we conduct business require insurance companies to file insurance rate schedules and insurance policy forms for review and approval. If, as permitted in some states, we begin using new rates before they are approved, we may be required to issue refunds or credits to the policyholders if the new rates are ultimately deemed excessive or unfair and disapproved by the applicable insurance department. In most of the states in which we operate, prior approval of rate changes is required and there may be long delays in the approval process or the rates may not be approved. Accordingly, our ability to respond to market developments or increased costs in that state could be adversely affected and our ability to operate in a profitable manner may be limited.

•Restrictions on Cancellation, Non-Renewal or Withdrawal. Many of the states in which we operate have laws and regulations that limit our ability to exit a market. For example, some states limit a private passenger auto insurer’s ability to cancel and refuse to renew policies and some prohibit insurers from withdrawing one or more lines of insurance business from the state unless prior approval is received. In some states, these regulations extend to significant reductions in the amount of insurance written, not just to a complete withdrawal. Laws and regulations that limit our ability to cancel and refuse to renew policies in some states or locations and that subject withdrawal plans to prior approval requirements may restrict our ability to exit unprofitable markets, which may harm our business, financial condition and results of operations.

•Lender-placed insurance products. State departments of insurance and regulatory authorities may choose to review the appropriateness of our premium rates for our lender-placed insurance products. If the reviews by state departments of insurance lead to significant decreases in premium rates for our lender-placed insurance products, our results of operations could be materially adversely affected.

•Other Regulations. We must also comply with regulations involving, among other matters:

•the use of non-public consumer information and related privacy issues;

•the use of credit history in underwriting and rating policies;

•limitations on the ability to charge policy fees;

•limitations on types and amounts of investments;

•restrictions on the payment of dividends by our insurance subsidiaries;

•the acquisition or disposition of an insurance company or of any company controlling an insurance company;

•involuntary assignments of high-risk policies, participation in reinsurance facilities and underwriting associations, assessments and other governmental surcharges for guaranty funds, second-injury funds, catastrophe funds and other mandatory pooling arrangements;

•reporting with respect to financial condition; and

•periodic financial and market conduct examinations performed by state insurance department examiners.

The failure to comply with these laws and regulations may also result in regulatory actions, fines and penalties, and in extreme cases, revocation of our ability to do business in a particular jurisdiction. In the past we have been fined by state insurance departments for failing to comply with certain laws and regulations. In addition, we may face individual and class action lawsuits by insured and other parties for alleged violations of certain of these laws or regulations.

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Our failure to accurately and timely pay claims could adversely affect our business, financial results and liquidity.

We must accurately and timely evaluate and pay claims that are made under our policies. Many factors affect our ability to pay claims accurately and timely, including the training and experience of our claims representatives, our claims department’s culture and the effectiveness of our management, our ability to develop or select and implement appropriate procedures and systems to support our claims functions and other factors. Our failure to pay claims accurately and timely could lead to material litigation, undermine our reputation in the marketplace and materially adversely affect our financial results and liquidity.

In addition, if we do not train new claims employees effectively or lose a significant number of experienced claims employees, our claims department’s ability to handle an increasing workload could be adversely affected. In addition to potentially requiring that growth be slowed in the affected markets, our business could suffer from decreased quality of claims work which, in turn, could lower our operating margins.

Reform of the health insurance industry could materially reduce the profitability of our A&H segment.

The PPACA was signed into law in 2010. In recent years there have been several judicial and congressional challenges and proposed amendments to PPACA, and the Tax Cuts and Jobs Act of 2017 repealed certain aspects of the PPACA. Congress may consider other legislation to repeal or replace elements of the PPACA.

Due to the complexity and continued uncertainty surrounding healthcare legislation, the impact from the PPACA or any amendments to the PPACA remains difficult to predict and could significantly affect the health insurance industry. We continue to review our product offerings and make changes to adapt to the current environment and the opportunities presented. However, we could be adversely affected if our plans for operating in the current environment are unsuccessful or if there is less demand than we expect for our A&H products.

If we are unable to adapt our A&H business to current and/or future requirements of the PPACA, or if significant uncertainty continues with respect to implementation of the PPACA or other healthcare reform legislation, our A&H business could be materially adversely affected. Furthermore, should Congress extend the scope of or repeal parts of or all of the PPACA, such a development could have a material adverse effect on our A&H business. For more information on the PPACA and its impact on our A&H segment, see Item 1, “Business - A&H Segment.”

Our operations and business activities outside of the United States are subject to a number of risks, which could have an adverse effect on our business, financial condition and results of operations.

We currently conduct a limited amount of business outside the United States, primarily in Bermuda. In this jurisdiction, we are subject to a number of significant risks in conducting such business. These risks include restrictions such as capital controls and other restrictive government actions, which could have an adverse effect on our business and our reputation. Investments outside the United States also subject us to additional domestic and foreign laws and regulations, including the Foreign Corrupt Practices Act and similar laws in other countries that prohibit the making of improper payments to foreign officials. In addition, some countries have laws and regulations that lack clarity and, even with local expertise and effective controls, it can be difficult to determine the exact requirements of the local laws. Failure to comply with local laws in a particular market could have a significant and negative effect not only on our business in that market but also on our reputation generally.

Changes in accounting standards issued by the FASB or other standard-setting bodies may adversely affect our financial statements.

Our financial statements are subject to the application of accounting principles generally accepted in the United States of America, which are periodically revised and/or expanded. Accordingly, from time to time we are required to adopt new or revised accounting standards issued by recognized authoritative bodies, including the FASB. The anticipated impact of accounting pronouncements that have been issued but not yet implemented is

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disclosed in our reports filed with the SEC. See Note 2, “Significant Accounting Policies,” in the notes to our consolidated financial statements. An assessment of proposed standards, including standards on insurance contracts and accounting for financial instruments, is not provided as such proposals are subject to change through the exposure process and official positions of the FASB are determined only after extensive due process and deliberations. Therefore, the effects on our financial statements cannot be meaningfully assessed. The required adoption of future accounting standards could have a material adverse effect on our business, financial condition or results of operations, including on our net income.

Risks Relating to Our Insurance Operations

The insurance industry is highly competitive, and we may not be able to compete effectively against larger companies.

The insurance industry is highly competitive and, except for regulatory considerations, there are relatively few barriers to entry. We compete with both large national insurance providers and smaller regional companies on the basis of price, coverages offered, claims handling, customer service, agent commissions, geographic coverage and financial strength ratings. Some of our competitors have more capital, higher ratings and greater resources than we have, and may offer a broader range of products than we offer.

Many of our competitors invest heavily in advertising and marketing efforts and/or expanding their online service offerings. Many of these competitors have better brand recognition than we have and have a significantly larger market share than we do. As a result, these larger competitors may be better able to offer lower rates to consumers, to withstand larger losses, and to more effectively take advantage of new marketing opportunities. Our ability to compete against these larger competitors depends on our ability to deliver superior service and maintain our relationships with independent agents, distribution partners and affinity groups.

In our lender-placed insurance business, we use a proprietary insurance-tracking system to monitor the clients’ mortgage portfolios to verify the continuation of insurance on each mortgaged property. If, in addition to our current competitors, others in this industry develop a competing system or equivalent administering capabilities, this could adversely affect our business and results of operations.

We write a significant amount of business in the nonstandard auto insurance market, which could make us more susceptible to unfavorable market conditions which have a disproportionate effect on that customer base.

A significant amount of our P&C premium currently is written in the nonstandard auto insurance market. As a result, adverse developments in the economic, competitive or regulatory environment affecting the nonstandard customer base or the nonstandard auto insurance industry in general may have a greater effect on us as compared to a more diversified auto insurance carrier with a larger percentage of its business in other types of auto insurance products. Adverse developments of this type may have a material adverse effect on our business.

We generate significant revenue from service fees generated from our P&C and A&H policyholders, which could be adversely affected by additional insurance or consumer protection regulation.

For the year ended December 31, 2020, we generated $760.4 million in service and fee revenue from our P&C and A&H policyholders, which included, among others, origination fees, installment fees relating to installment payment plans, late payment fees, policy cancellation fees and reinstatement fees. The revenue we generate from these service fees could be reduced by changes in consumer protection or insurance regulation that restrict or prohibit our ability to charge these fees. If our ability to charge fees for these services were to be restricted or prohibited, there can be no assurance that we would be able to obtain rate increases or take other action to offset the lost revenue and the direct and indirect costs associated with providing the services, which could adversely affect our business, financial condition and results of operations.

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The insurance industry is cyclical in nature, which may affect our overall financial performance.

Historically, the financial performance of the insurance industry has tended to fluctuate in cyclical periods of price competition and excess capacity (known as a soft market) followed by periods of high premium rates and shortages of underwriting capacity (known as a hard market). The profitability of most insurance companies tends to follow this cyclical market pattern. We cannot predict with certainty the timing or duration of changes in the market cycle because the cyclicality is due in large part to the actions of our competitors and general economic factors beyond our control. These cyclical patterns, the actions of our competitors, and general economic factors could cause our revenues and net income to fluctuate, which may adversely affect our business.

Catastrophic losses or the frequency of smaller insured losses may exceed our expectations as well as the limits of our reinsurance, which could adversely affect our financial condition and results of operations.

Our P&C insurance business is subject to claims arising from catastrophes, such as hurricanes, tornadoes, windstorms, floods, earthquakes, hailstorms, severe winter weather, and fires, non-catastrophic weather and water losses or other events, such as explosions, terrorist attacks, riots, and hazardous material releases. The incidence and severity of such events are inherently unpredictable, and our losses from catastrophes could be substantial.

Longer-term weather trends are changing and new types of catastrophe losses may be developing due to climate change, a phenomenon that may be associated with extreme weather events linked to rising temperatures, including effects on global weather patterns, sea, land and air temperature, sea levels, rain and snow. Climate change could increase the frequency and severity of catastrophe losses we experience in both coastal and non-coastal areas.

In addition, it is possible that we may experience an unusual frequency of smaller losses in a particular period. In either case, the consequences could be substantial volatility in our financial condition or results of operations for any fiscal quarter or year, which could have a material adverse effect on our financial condition or results of operations and our ability to write new business. For example, our operating results for the year ended December 31, 2020, have been negatively impacted by losses resulting from severe weather-related events. Losses related to P&C weather-related events, excluding the Reciprocal Exchanges, were $150.2 million in 2020, compared to $51.2 million in 2019, an increase of $99.0 million year over year. Although we believe that our geographic and product mix creates limited exposure to catastrophic events and we attempt to manage our exposure to these types of catastrophic and cumulative losses, including through the use of reinsurance, catastrophic events are inherently unpredictable and the severity or frequency of these types of losses may exceed our expectations as well as the limits of our reinsurance coverage.

We rely on the use of credit scoring in pricing and underwriting our auto insurance policies and any legal or regulatory requirements which restrict our ability to access credit score information could decrease the accuracy of our pricing and underwriting process and thus lower our profitability.

We use credit scoring as a factor in pricing and underwriting decisions where allowed by state law. Consumer groups and regulators have questioned whether the use of credit scoring unfairly discriminates against some groups of people and are calling for laws and regulations to prohibit or restrict the use of credit scoring in underwriting and pricing. Laws or regulations that significantly curtail or regulate the use of credit scoring, if enacted in a large number of states in which we operate, could impact the integrity of our pricing and underwriting process, which could, in turn, adversely affect our business, financial condition and results of operations and make it harder for us to be profitable over time.

If market conditions cause our reinsurance to be more costly or unavailable, we may be required to bear increased risks or reduce the level of our underwriting commitments.

As part of our overall risk and capacity management strategy, we purchase excess of loss catastrophic and casualty reinsurance for protection against catastrophic events and other large losses. We also rely on quota share insurance agreements to cede a portion of the risk on the policies that we write. Market conditions beyond our

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control, in terms of price and available capacity, may affect the amount of reinsurance we acquire and our profitability.

We may be unable to maintain our current reinsurance arrangements or to obtain other reinsurance in adequate amounts and at favorable rates. Increases in the cost of reinsurance would adversely affect our profitability. In addition, if we are unable to renew our expiring arrangements or to obtain new reinsurance on favorable terms, either our net exposure to risk would increase, which would increase our costs, or, if we are unwilling to bear an increase in net risk exposures, we would have to reduce the amount of risk we underwrite, which would reduce our revenues.

We may not be able to recover amounts due from our reinsurers, which would adversely affect our financial condition.

Reinsurance does not discharge our obligations under the insurance policies we write; it merely provides us with a contractual right to seek reimbursement on certain claims. The applicable insurance company remains liable to our policyholders even if we are unable to make recoveries that we are entitled to receive under our reinsurance contracts. As a result, we are subject to credit risk with respect to our reinsurers. Losses are recovered from our reinsurers after underlying policy claims are paid. The creditworthiness of our reinsurers may change before we recover amounts to which we are entitled. Therefore, if a reinsurer is unable to meet its obligations to us, we would be responsible for claims and claim settlement expenses for which we would have otherwise received payment from the reinsurer. If we were unable to collect these amounts from our reinsurers, our costs would increase and our financial condition would be adversely affected. As of December 31, 2020, we had an aggregate amount of approximately $1,218.9 million of reinsurance recoverable, net of the allowance for estimated uncollectible reinsurance.

Our largest reinsurance recoverables are from the North Carolina Reinsurance Facility (“NCRF”) and the Michigan Catastrophic Claims Association (“MCCA”). The NCRF is a non-profit organization established to provide automobile liability reinsurance to those insurance companies that write automobile insurance in North Carolina. The MCCA is a Michigan reinsurance mechanism that covers no-fault first party medical losses of retentions in excess of $0.6 million in 2020. At December 31, 2020, the amount of reinsurance recoverable from the NCRF and the MCCA was approximately $193.3 million and $545.7 million, respectively. If any of our principal reinsurers were unable to meet its obligations to us, our financial condition and results of operations would be materially adversely affected.

The effects of emerging claim and coverage issues on our business are uncertain and negative developments in this area could have an adverse effect on our business.

As industry practices and legal, judicial, social and other environmental conditions change, unexpected and unintended issues related to claims and coverage may emerge. These issues may adversely affect our business by either extending coverage beyond our underwriting intent or by increasing the number or size of claims. In some instances, these changes may not become apparent until after we have issued insurance policies that are affected by the changes. As a result, the full extent of our liability under an insurance policy may not be known until many years after the policy is issued. For example, medical costs associated with permanent and partial disabilities may increase more rapidly or be higher than we currently expect. Changes of this nature may expose us to higher claims than we anticipated when we wrote the underlying policy. Unexpected increases in our claim costs many years after policies are issued may also result in our inability to recover from certain of our reinsurers the full amount that they would otherwise owe us for such claims costs because certain of the reinsurance agreements covering our business include commutation clauses that permit the reinsurers to terminate their obligations by making a final payment to us based on an estimate of their remaining liabilities. In addition, the potential passage of new legislation designed to expand the right to sue, to remove limitations on recovery, to deem by statute the existence of a covered occurrence, to extend the statutes of limitations or otherwise repeal or weaken tort reforms could have an adverse impact on our business. The effects of these and other unforeseen emerging claim and coverage issues are extremely hard to predict and could be harmful to our business and have a material adverse effect on our results of operations.

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The effects of litigation on our business are uncertain and could have an adverse effect on our business.

We may from time to time be subject to a variety of legal actions relating to our current and past business operations including, but not limited to, disputes over coverage or claims adjudication, including claims alleging that we have acted in bad faith in the administration of claims by our policyholders, disputes with our agents or producers over compensation and termination of contracts and related claims, disputes relating to certain business acquired or disposed of by us and disputes with former employees. We also cannot determine with any certainty what new theories of recovery may evolve or what their impact may be on our business.

Class action claims present additional exposure to substantial economic, non-economic or punitive damage awards. The loss of even one of these claims, if it results in a significant damage award or a judicial ruling that was otherwise detrimental, could create a precedent in the industry that could have an adverse effect on our business.

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Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We use an aggregate of approximately 2.5 million square feet in approximately 54 office locations and approximately 500 storefronts. We have an ownership interest in the entities that own the buildings in which we lease space at two of these locations, which represent an aggregate of approximately 0.3 million square feet.

Item 3. Legal Proceedings

We are routinely involved in legal proceedings arising in the ordinary course of business, in particular in connection with claims adjudication with respect to our policies. We believe we have recorded adequate reserves for these liabilities and that there is no individual case pending that is likely to have a material adverse effect on our financial condition or results of operations. See Note 13, “Commitments and Contingencies” in the notes to our consolidated financial statements.

Item 4. Mine Safety Disclosures

None.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

Shareholders

Our common shares began trading on the Nasdaq Global Market under the symbol “NGHC” on February 20, 2014. As a result of the Merger, on January 4, 2021, we became a wholly owned subsidiary of Allstate, our common shares were delisted from the NASDAQ Global Stock Market and we subsequently filed a Form 15 on January 14, 2021 to deregister the common shares under the Securities Exchange Act of 1934, as amended. Accordingly, our common shares are no longer publicly traded. Prior to the Merger, we had one class of common stock with 150,000,000 authorized shares at a par value of $0.01 per share. As of January 3, 2021, the day prior to the completion of the Merger, there were approximately 254 registered record holders of our common shares.

Dividend Policy

As a result of the Merger and the delisting of our common shares from the NASDAQ Global Stock Market on January 4, 2021, our common shares are now wholly owned by Allstate and there is no public market for our common shares.

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Common Stock Performance Graph

Set forth below is a line graph comparing the cumulative total shareholder return on our common stock for the five-year period (December 31, 2015 to December 31, 2020) with the cumulative total return on the Nasdaq Global Market Index and a peer group comprised of the Nasdaq Insurance Index. The graph shows the change in value of an initial $100 investment made on December 31, 2015. The stock price performance of the following graph is not necessarily indicative of future stock price performance.

Comparative Cumulative Total Returns Since December 31, 2015, for National General Holdings Corp., Nasdaq Composite Index and Nasdaq Insurance Index

This information is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference in any of our filings under the Securities Act or the Exchange Act.

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Issuer Purchases of Equity Securities

During the fourth quarter ended December 31, 2020, we did not repurchase any shares of common stock. On April 29, 2020, our Board of Directors authorized and approved a share repurchase program with a 12-month term for up to $50 million aggregate purchase price of our outstanding common shares. During the year ended December 31, 2020, we repurchased an aggregate of 459,083 common shares with a cost of $8.5 million under the program. The purchases were made in the open market in accordance with applicable federal securities laws, including Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. Pursuant to the terms of the Merger Agreement with Allstate signed July 7, 2020, we were prohibited from making any further common share repurchases prior to the close of the Merger. On January 4, 2021, our common shares were delisted from the NASDAQ Global Stock Market as a result of the Merger.

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Item 6. Selected Financial Data

The following tables set forth our selected historical consolidated financial and operating information for the periods ended and as of the dates indicated. The income statement data for the years ended December 31, 2020, 2019, and 2018, and the balance sheet data as of December 31, 2020, and 2019, are derived from our audited financial statements included elsewhere in this annual report. These historical results are not necessarily indicative of results to be expected from any future period. You should read the following selected consolidated financial information together with the other information contained in this annual report, including “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes included elsewhere in this annual report.

	Year Ended December 31,
	2020			2019			2018			2017			2016
Selected Income Statement Data(1)	(amounts in thousands, except percentages and per share data)
Gross premium written	$	5,634,547		$	5,583,080		$	5,416,839		$	4,755,985		$	3,500,898
Ceded premiums(2)	(1,013,703)			(1,358,459)			(1,589,126)			(1,178,390)			(428,202)
Net premium written	$	4,620,844		$	4,224,621		$	3,827,713		$	3,577,595		$	3,072,696
Change in unearned premium	(126,224)			(106,579)			(95,511)			76,581			(77,525)
Net earned premium	$	4,494,620		$	4,118,042		$	3,732,202		$	3,654,176		$	2,995,171
Ceding commission income	152,457			238,453			224,697			116,456			45,600
Service and fee income	760,374			641,965			561,583			502,927			380,817
Net investment income(3)	118,257			141,233			119,034			101,950			115,187
Net gain (loss) on investments	26,577			13,473			(29,545)			46,763			7,904
Other income (expense)	—			26,428			—			(198)			24,308
Total revenues	$	5,552,285		$	5,179,594		$	4,607,971		$	4,422,074		$	3,568,987
Loss and loss adjustment expense	2,824,082			2,854,468			2,662,226			2,626,082			2,092,280
Acquisition costs and other underwriting expenses(4)	990,569			827,367			735,266			672,429			497,007
General and administrative expenses(5)	1,043,193			1,041,772			938,046			912,996			709,148
Interest expense	33,772			51,544			51,425			47,086			40,180
Total expenses	$	4,891,616		$	4,775,151		$	4,386,963		$	4,258,593		$	3,338,615
Income before provision for income taxes	$	660,669		$	404,443		$	221,008		$	163,481		$	230,372
Provision for income taxes	136,461			77,013			53,484			61,273			33,998
Net income	$	524,208		$	327,430		$	167,524		$	102,208		$	196,374
Less: Net (income) loss attributable to noncontrolling interest	(10,877)			20,639			39,830			3,637			(20,668)
Net income attributable to National General Holdings Corp.	$	513,331		$	348,069		$	207,354		$	105,845		$	175,706
Dividends on preferred stock	(33,600)			(33,600)			(32,492)			(31,500)			(24,333)
Net income attributable to National General Holdings Corp. common stockholders	$	479,731		$	314,469		$	174,862		$	74,345		$	151,373
Per common share data:
Basic earnings per share	$	4.23		$	2.78		$	1.62		$	0.70		$	1.43
Weighted average shares outstanding - basic	113,512			113,200			107,660			106,588			105,952
Diluted earnings per share	$	4.14		$	2.73		$	1.59		$	0.68		$	1.40
Weighted average shares outstanding - diluted	116,427			116,097			110,822			108,752			108,278
Dividends declared per common share	$	0.20		$	0.18		$	0.16		$	0.16		$	0.14
Insurance Ratios
Net loss ratio(6)	62.8		%	69.3		%	71.3		%	71.9		%	69.9		%
Net operating expense ratio (non-GAAP)(7)(8)	24.8		%	23.7		%	23.5		%	26.4		%	26.0		%
Net combined ratio (non-GAAP)(7)(8)(9)	87.6		%	93.0		%	94.8		%	98.3		%	95.9		%
Insurance Ratios Before Amortization and Impairment (non-GAAP)
Net operating expense ratio before amortization and impairment (non-GAAP)(10)	24.3		%	22.8		%	22.7		%	24.7		%	23.6		%
Net combined ratio before amortization and impairment (non-GAAP)(10)(11)	87.1		%	92.1		%	94.0		%	96.6		%	93.5		%

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	As of December 31,
	2020		2019		2018		2017		2016
Selected Balance Sheet Data	(amounts in thousands)
Investments	$	4,969,271	$	4,854,998	$	4,226,806	$	3,649,788	$	3,631,064
Cash, cash equivalents and restricted cash	$	699,767	$	164,463	$	233,583	$	357,484	$	285,900
Premiums and other receivables, net	$	1,545,380	$	1,428,948	$	1,399,812	$	1,324,321	$	1,091,774
Reinsurance recoverable, net	$	1,218,930	$	1,394,308	$	1,611,738	$	1,294,165	$	948,236
Goodwill and Intangible assets, net	$	520,053	$	545,151	$	560,120	$	578,223	$	626,084
Total assets	$	10,127,894	$	9,756,534	$	9,439,280	$	8,439,743	$	7,238,028
Unpaid loss and loss adjustment expense reserves	$	2,889,098	$	2,886,414	$	2,957,159	$	2,663,557	$	2,273,866
Unearned premiums and other revenue	$	2,244,624	$	2,312,241	$	2,280,728	$	2,032,605	$	1,701,286
Debt	$	676,810	$	686,006	$	705,795	$	713,710	$	752,001
Total liabilities	$	6,911,896	$	7,139,040	$	7,238,409	$	6,486,318	$	5,320,670
Common stock and additional paid-in capital	$	1,078,146	$	1,066,768	$	1,058,912	$	918,818	$	914,851
Preferred stock	$	450,000	$	450,000	$	450,000	$	420,000	$	420,000
Noncontrolling interest	$	(21,165)	$	(31,960)	$	(19,967)	$	24,856	$	31,918
Total stockholders’ equity	$	3,215,998	$	2,617,494	$	2,200,871	$	1,953,425	$	1,917,358

(1) Results of operations were affected by our various acquisitions and reinsurance transactions from 2016 to 2020, and a disposition in 2019. Bargain purchase gain or gain on sale of a business is recorded in other income (expense).

(2) Premiums ceded to related parties were not material for the years ended December 31, 2020, 2019, 2018, and 2017.

(3) Earnings (losses) of equity method investments, including those with related parties, are recorded in net investment income.

(4) Acquisition costs and other underwriting expenses include policy acquisition expenses, commissions paid directly to producers, premium taxes and assessments, salary and benefits and other insurance general and administrative expenses which represent other costs that are directly attributable to insurance activities.

(5) General and administrative expenses are composed of all other operating expenses, including various departmental salaries and benefits expenses for employees that are directly involved in the maintenance of policies, information systems, and accounting for insurance transactions, and other insurance expenses such as federal excise tax, postage, telephones and internet access charges, as well as legal and auditing fees and board and bureau charges. In addition, general and administrative expenses include those charges that are related to the amortization of tangible and intangible assets and non-insurance activities in which we engage.

(6) Net loss ratio is calculated by dividing the loss and loss adjustment expense by net earned premiums.

(7) Net operating expense ratio and net combined ratio are considered non-GAAP financial measures under applicable SEC rules because a component of those ratios, net operating expense, is calculated by offsetting acquisition costs and other underwriting expenses and general and administrative expenses by ceding commission income, service and fee income and other general and administrative expenses (M&A advisory cost / Arbitration award). Management uses net operating expense ratio (non-GAAP) and net combined ratio (non-GAAP) to evaluate financial performance against historical results and establish targets on a consolidated basis. We believe this presentation enhances the understanding of our results by eliminating what we believe are volatile and unusual events and presenting the ratios with what we believe are the underlying run rates of the business. Other companies may calculate these measures differently, and, therefore, their measures may not be comparable to those used by the Company’s management. For a reconciliation of net operating expense, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation-Results of Operations-Consolidated Results of Operations.”

(8) Net operating expense ratio (non-GAAP) is calculated by dividing the net operating expense by net earned premium. Net operating expense consists of the sum of acquisition costs and other underwriting expenses and general and administrative expenses less ceding commission income, service and fee income and other general and administrative expenses (M&A advisory cost / Arbitration award).

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(9) Net combined ratio (non-GAAP) is calculated by adding net loss ratio and net operating expense ratio (non-GAAP) together.

(10) Net operating expense ratio before amortization and impairment (non-GAAP) is one component of an insurance company’s operational efficiency in administering its business. Expressed as a percentage, this is the ratio of net operating expense before non-cash amortization of intangible assets and non-cash impairment of goodwill to net earned premium.

(11) The net combined ratio before amortization and impairment (non-GAAP) is a measure of an insurance company’s overall underwriting profit. This is the sum of the net loss ratio and net operating expense ratio before amortization and impairment (non-GAAP). If the net combined ratio before amortization and impairment (non-GAAP) is at or above 100 percent, an insurance company cannot be profitable without investment income, and may not be profitable if investment income is insufficient. Management believes that this measure of underwriting profitability provides a more useful comparison to the combined ratio of other insurance companies involved in fewer acquisitions.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This Form 10-K contains certain forward-looking statements that are intended to be covered by the safe harbors created by The Private Securities Litigation Reform Act of 1995. See “Note on Forward-Looking Statements.”

The discussion of our financial condition and results of operations for the year ended December 31, 2018 included in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2019 is incorporated by reference into this MD&A.

Overview

We are a specialty personal lines insurance holding company that, through our subsidiaries, provides a variety of insurance products, including personal and small business automobile, homeowners, umbrella, recreational vehicle, motorcycle, lender-placed, supplemental health and other niche insurance products. We sell insurance products with a focus on underwriting profitability through a combination of our customized and predictive analytics and our technology driven low cost infrastructure.

Reportable Segments

We manage our business through two reportable segments, Property and Casualty (“P&C”) and Accident and Health (“A&H”), and we conduct business primarily through our twenty-two regulated domestic insurance subsidiaries:

Property and Casualty:

Agent Alliance Insurance Company

Century-National Insurance Company

Direct General Insurance Company

Direct General Insurance Company of Mississippi

Direct Insurance Company

Direct National Insurance Company

Imperial Fire and Casualty Insurance Company

Integon Casualty Insurance Company

Integon General Insurance Corporation

Integon Indemnity Corporation

Integon National Insurance Company

Integon Preferred Insurance Company

MIC General Insurance Corporation

National Farmers Union Property and Casualty Company

National General Assurance Company

National General Insurance Company

National General Insurance Online, Inc.

National General Premier Insurance Company

New South Insurance Company

Standard Property and Casualty Insurance Company

Accident and Health:

Direct General Life Insurance Company

National Health Insurance Company

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Our insurance subsidiaries have an “A-” (Excellent) group rating by A.M. Best Company, Inc. (“A.M. Best”). On July 9, 2020, following the announcement of our agreement to be acquired by Allstate, A.M. Best placed us and our subsidiaries under review with positive implications. We currently conduct a limited amount of business outside the United States, primarily in Bermuda.

Two of our wholly-owned subsidiaries are management companies that act as attorneys-in-fact for Adirondack Insurance Exchange, a New York reciprocal insurer, and New Jersey Skylands Insurance Association, a New Jersey reciprocal insurer (together, the “Reciprocal Exchanges” or “Exchanges”). We do not own the Reciprocal Exchanges but are paid a fee to manage their business operations through our wholly-owned management companies. The Reciprocal Exchanges are included in our P&C segment.

The operating results of insurance companies are subject to quarterly and yearly fluctuations due to the effect of competition on pricing, the frequency and severity of losses, the effect of weather and natural disasters on losses, general economic conditions, the general regulatory environment in states in which an insurer operates, state regulation of premium rates, changes in fair value of investments, and other factors such as changes in tax laws or global events such as the COVID-19 pandemic and the resulting health and safety, economic and regulatory impacts. The industry has been highly cyclical with periods of high premium rates and shortages of underwriting capacity followed by periods of severe price competition and excess capacity. While these cycles can have a large impact on a company’s ability to grow and retain business, we have sought to focus on niche markets and regions where we are able to maintain premium rates at generally consistent levels and maintain underwriting discipline throughout these cycles. We believe that the nature of our insurance products, including their relatively low limits, the relatively short duration of time between when claims are reported and when they are settled, and the broad geographic distribution of our customers, have allowed us to grow and retain our business throughout these cycles. Also, we have limited our exposure to catastrophe losses through reinsurance. With regard to seasonality, we tend to experience higher claims and claims expense in our P&C segment during periods of severe or inclement weather. Our operating results for the year ended December 31, 2020, have been negatively impacted by losses resulting from severe weather-related events.

We evaluate our operations by monitoring key measures of growth and profitability, including net combined ratio (non-GAAP) and operating leverage. We target a net combined ratio (non-GAAP) in the low-to-mid 90s while seeking to maintain optimal operating leverage in our insurance subsidiaries commensurate with our A.M. Best rating objectives. To achieve our targeted net combined ratio (non-GAAP) we continually seek ways to reduce our operating costs and lower our expense ratio. For the year ended December 31, 2020, our operating leverage (the ratio of net earned premium to average total stockholders’ equity) was 1.5x, which was within our planned target operating leverage of between 1.5x and 2.0x.

Investment income is also an important part of our business. Because we often do not settle claims until several months or longer after we receive the original policy premiums, we can invest cash from premiums for significant periods. We invest our capital and surplus following state and regulatory guidelines. Our net investment income was $118.3 million, $141.2 million and $119.0 million for the years ended December 31, 2020, 2019, and 2018, respectively. We held 12.3% and 3.3% of our total invested assets in cash, cash equivalents and restricted cash as of December 31, 2020, and 2019, respectively.

Our most significant balance sheet liability is our unpaid loss and LAE reserves. As of December 31, 2020, and 2019, our reserves, net of reinsurance recoverable on unpaid losses, were $1.9 billion and $1.8 billion, respectively. We record reserves for estimated losses under insurance policies that we write and for LAE related to the investigation and settlement of policy claims. Our reserves for loss and LAE represent the estimated cost of all reported and unreported loss and LAE incurred and unpaid at any given point in time based on known facts and circumstances. Reserves are based on estimates of the most likely ultimate cost of individual claims. These estimates are inherently uncertain. Judgment is required to determine the relevance of our historical experience and industry information under current facts and circumstances. The interpretation of this historical and industry data can be impacted by external forces, principally frequency and severity of future claims, length of time to achieve ultimate settlement of claims, inflation of medical costs and wages, insurance policy coverage interpretations, jury determinations and legislative changes. Accordingly, our reserves may prove to be inadequate to cover our actual

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losses. If we change our estimates, such changes would be reflected in our results of operations during the period in which they are made, with increases in our reserves resulting in decreases in our earnings.

In March 2020, the outbreak of COVID-19 caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization. Shortly thereafter, the President of the United States declared a National Emergency throughout the United States attributable to such outbreak. The outbreak has become increasingly widespread in the United States, including in the markets in which we operate. The COVID-19 pandemic has had a notable adverse impact on general economic conditions, including adverse impacts on automobile sales and new home sales and increased unemployment, which may decrease customer demand for our insurance products, negatively impact our premium volume, reduce our ability to access capital, and otherwise adversely impact our future results of operations. Additionally, federal, state, and local government actions to address and contain the impact of COVID-19 may adversely affect us. For example, regulatory actions seek to retroactively mandate coverage for losses which various types of insurance policies were not designed or priced to cover or seek to require premium refunds. Regulatory restrictions or requirements also impact pricing, risk selection and our rights and obligations with respect to our policies and insureds, including our ability to cancel policies or our right to collect premiums or fees. Because of the unprecedented size and breadth of this pandemic, and rapidly evolving situation, all of the direct and indirect consequences of COVID-19 are not yet known and may not emerge for some time.

While we continue to closely monitor the impact of the COVID-19 pandemic and assess its potential effects on our business, the extent to which the COVID-19 outbreak will impact our operations or financial results is uncertain.

For further discussion regarding the potential impact of COVID-19 and related economic conditions on the Company, see “Part I—Item 1A—Risk Factors.”

Critical Accounting Policies and Estimates

Our significant accounting policies are discussed in Note 2, “Significant Accounting Policies” in the notes to our consolidated financial statements.

Use of estimates and assumptions. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our principal estimates include unpaid losses and LAE reserves; deferred acquisition costs; reinsurance recoverable, including the provision for uncollectible amounts; recording of credit loss and impairment of fixed maturities due to credit-related factors; determining the fair value of investments; determining the fair value of stock-based awards for stock compensation; the valuation of intangibles and the determination of goodwill and goodwill impairment; and income taxes. In developing the estimates and assumptions, management uses all available evidence. Because of uncertainties associated with estimating the amounts, timing, and likelihood of possible outcomes, actual results could differ from estimates.

Premiums and other receivables. We recognize earned premium on a pro rata basis over the terms of the policies, generally periods of six or twelve months. Unearned premium represents the portion of premiums written applicable to the unexpired terms of the policies. Net premiums receivable represent premium written and not yet collected, net of an allowance for uncollectible premium. We regularly evaluate premium and other receivables and adjust for uncollectible amounts as appropriate. Receivables specifically identified as uncollectible are charged to expense in the period the determination is made. Premium refunds are recorded as an offset against gross premium written.

Premiums and other receivables are reported net of an allowance for expected credit losses. The allowance is based upon our ongoing review of amounts outstanding, historical loss data, including delinquencies and write-offs, current and forecasted economic conditions, and other relevant factors. We use a loss-rate method to estimate the

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expected credit losses. Credit risk is partially mitigated by our ability to cancel the policy if the policyholder does not pay the premium.

Service and fee income. We currently generate policy service and fee income from installment fees, late payment fees, and other finance and processing fees related to policy cancellation, policy reinstatement, and insufficient fund check returns. These fees are generally designed to offset expenses incurred in the administration of our insurance business, and are generated as follows. Installment fees are charged to permit a policyholder to pay premiums in installments rather than in a lump sum. Late payment fees are charged when premiums are remitted after the due date and any applicable grace periods. Policy cancellation fees are charged to policyholders when a policy is terminated by the policyholder prior to the expiration of the policy’s term or renewal term, as applicable. Reinstatement fees are charged to reinstate a policy that has lapsed, generally as a result of non-payment of premiums. Insufficient fund fees are charged when the customer’s payment is returned by the financial institution.

All fee income is recognized as follows. An installment fee is recognized at the time each policy installment bill is due. A late payment fee is recognized when the customer’s payment is not received after the listed due date and any applicable grace period. A policy cancellation fee is recognized at the time the customer’s policy is canceled. A policy reinstatement fee is recognized when the customer’s policy is reinstated. An insufficient fund fee is recognized when the customer’s payment is returned by the financial institution. The amounts charged are primarily intended to compensate us for the administrative costs associated with processing and administering policies that generate insurance premium; however, the amounts of fees charged are not dependent on the amount or period of insurance coverage provided and do not entail any obligation to return any portion of those funds. The costs associated with generating fee income are not separately tracked. We estimate an allowance for doubtful accounts based on a percentage of fee income.

We also collect service fees in the form of commissions and general agent fees by selling policies issued by third-party insurance companies. We do not bear insurance underwriting risk with respect to these policies. Commission income and general agent fees are recognized, net of an allowance for estimated policy cancellations, at the time when the policy is sold. The allowance for estimated third-party cancellations is periodically evaluated and adjusted as necessary.

Reserves for loss and loss adjustment expense. We record reserves for estimated losses under insurance policies that we write and for LAE related to the investigation and settlement of policy claims. Our reserves for loss and LAE represent the estimated cost of all reported and unreported loss and LAE incurred and unpaid at any given point in time based on known facts and circumstances.

Loss reserves include statistical reserves and case estimates for individual claims that have been reported and estimates for claims that have been incurred but not reported at the balance sheet date as well as estimates of the expenses associated with processing and settling all reported and unreported claims, less estimates of anticipated salvage and subrogation recoveries. Estimates are based upon past loss experience modified for current trends as well as economic, legal and social conditions. Loss reserves, except life reserves, are not discounted to present value, which would involve recognizing the time value of money and offsetting estimates of future payments by future expected investment income.

In establishing these estimates, we make various assumptions regarding a number of factors, including frequency and severity of claims, the length of time needed to achieve ultimate settlement of claims, inflation of medical costs, insurance policy coverage interpretations, jury determinations and legislative changes. Due to the inherent uncertainty associated with these estimates, and the cost of incurred but unreported claims, our actual liabilities may be different from our original estimates. On a quarterly basis, we review our reserves for loss and LAE to determine whether further adjustments are required. Any resulting adjustments are included in the period in which adjustments are determined. Additional information regarding the judgments and uncertainties surrounding our estimated reserves for loss and LAE can be found in Item 1, “Business - Loss Reserves.”

Reinsurance. We cede insurance risk under various reinsurance agreements. We seek to reduce the loss that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring certain levels

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of risk with other insurance enterprises. We remain liable with respect to any insurance ceded if the assuming companies are unable to meet their obligations under these reinsurance agreements.

Reinsurance premiums, losses and LAE ceded to other companies are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Earned premiums and losses and LAE incurred ceded to other companies have been recorded as a reduction of premium revenue and losses and LAE. Commissions allowed by reinsurers on business ceded have been recorded as ceding commission revenue to the extent the ceding commission exceeds acquisition costs. Reinsurance recoverable is reported based on the portion of reserves and paid losses and LAE that are ceded to other companies. Assessing whether or not a reinsurance contract meets the condition for risk transfer requires judgment. The determination of risk transfer is critical to reporting premiums and losses, and is based, in part, on the use of actuarial and pricing models and assumptions. If we determine that a reinsurance contract does not transfer sufficient risk, we account for the contract under deposit accounting.

Amounts recoverable from reinsurers are estimated in a manner consistent with the associated claim liability. We report our reinsurance recoverable net of an allowance for estimated uncollectible reinsurance. The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, applicable coverage defenses, and other relevant factors. We evaluate and monitor the financial condition of our reinsurers under voluntary reinsurance arrangements to minimize our exposure to significant losses from reinsurer insolvencies.

Deferred acquisition costs. Deferred acquisition costs include commissions, premium taxes, payments to affinity partners, and other direct sales costs that are directly related to the successful acquisition of insurance policies. These costs, net of ceding allowances, are deferred and amortized to the extent recoverable, over the policy period in which the related premiums are earned and/or over the expected life of the policy as applicable to A&H. Anticipated investment income is considered in determining the recoverability of these costs. We believe that these costs are recoverable.

Assessments related to insurance premiums. We are subject to a variety of insurance-related assessments, such as assessments by state guaranty funds used by state insurance regulators to cover losses of policyholders of insolvent insurance companies and for the operating expenses of such agencies. A typical obligating event would be the issuance of an insurance policy or the occurrence of a claim. These assessments are accrued in the period in which they have been incurred. We use estimated assessment rates in determining the appropriate assessment expense and accrual. We use estimates derived from state regulators and/or National Association of Insurance Commissioners (“NAIC”) Tax and Assessments Guidelines.

Unearned premium reserves. Unearned premium reserves represent the portion of premiums written applicable to the unexpired terms of the policies.

Investments. Our debt securities are classified as available for sale and are measured at fair value with unrealized gains and losses reported as a separate component of comprehensive income. Equity investments (except those accounted for under the equity method, and those that result in consolidation of the investee and certain other investments) are measured at fair value with all gains and losses reported in net income. We may sell our available-for-sale and equity securities in response to changes in interest rates, risk/reward characteristics, liquidity needs or other factors. Available-for-sale and equity securities are reported at their estimated fair values based on quoted market prices or recognized pricing services.

Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method. Net investment income is recognized when earned and includes interest and dividend income together with amortization of market premiums and discounts using the effective yield method and is net of investment management fees and other expenses. For mortgage-backed securities and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and revised as necessary. Any adjustments required due to the change in effective yields and maturities are recognized on a prospective basis through yield adjustments.

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Beginning on January 1, 2020, credit losses on available-for-sale debt securities are recognized through an allowance account. The Company reports accrued investment income separately from debt securities in the Consolidated Balance Sheets, and has elected not to measure an allowance for credit losses. Accrued investment income is written-off by reversing interest income through net investment income at the time the issuer of the bond defaults or is expected to default on payments. Uncollectible debt securities are written-off to net gain (loss) on investments when the Company determines that no additional payments of principal or interest will be received.

Goodwill and intangible assets. A purchase price paid that is in excess of net assets, i.e., goodwill, arising from a business combination is recorded as an asset and is not amortized. Intangible assets with an indefinite useful life are not amortized. Goodwill and intangible assets are tested for impairment on an annual basis or more frequently if changes in circumstances indicate that the carrying amount may not be recoverable. If the goodwill or intangible asset is impaired, it is written down to its realizable value with a corresponding expense reflected in general and administrative expenses in the consolidated statements of income.

Intangible assets that have finite lives, including but not limited to, agent and customer relationships and trademarks, are amortized over the estimated useful life of the asset. For intangible assets with finite lives, impairment is recognized if the carrying amount is not recoverable and exceeds the fair value of the intangible asset. Generally, intangible assets with finite lives are only tested for impairment if indicators of impairment, i.e, triggers, are identified. Triggers include but are not limited to, a significant adverse change in the extent, manner, or length of time in which the intangible asset is being used or a significant adverse change in legal factors or in the business climate that could affect the value of the intangible asset.

Business combinations. We account for business combinations under the acquisition method of accounting, which requires us to record assets acquired, liabilities assumed and any noncontrolling interest in the acquiree at their respective fair values as of the acquisition date. We account for the insurance and reinsurance contracts under the acquisition method as new contracts, which requires us to record assets and liabilities at fair value. We adjust the fair value of loss and LAE reserves starting with the acquired loss reserves based on our existing accounting policies and then discounting them based on expected reserve payout patterns using a current risk-free rate of interest. This risk-free interest rate is then adjusted based on different cash flow scenarios that use different payout and ultimate reserve assumptions deemed to be reasonably possible based upon the inherent uncertainties present in determining the amount and timing of payment of such reserves. The difference between the acquired loss and LAE reserves and our best estimate of the fair value of such reserves at the acquisition date is recorded as either an intangible asset or another liability, as applicable and is amortized proportionately to the reduction in the related loss reserves (e.g., over the estimated payout period of the acquired loss and LAE reserves). We assign fair values to intangible assets acquired based on valuation techniques including the income and market approaches. We record contingent consideration at fair value based on the terms of the purchase agreement with subsequent changes in fair value recorded through earnings. The purchase price is the fair value of the total consideration conveyed to the seller and we record the excess (deficiency) of the purchase price over the fair value of the acquired net assets, where applicable, as goodwill or bargain purchase gain. We expense costs associated with the acquisition of a business in the period incurred.

Noncontrolling Interest. Non-redeemable noncontrolling interest is the portion of equity (net assets) not attributable, directly or indirectly, to a parent. We have no ownership interest in the Reciprocal Exchanges. Therefore, the difference between the value of their assets and liabilities represent the value of the noncontrolling interest.

Fair value of financial instruments. Our estimates of fair value for financial assets and financial liabilities are based on the inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect our significant market assumptions.

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Level 3 assets are unobservable inputs supported by little or no market activity. The unobservable inputs represent management’s best assumptions of how market participants would price the assets or liabilities. Generally, Level 3 assets and liabilities are valued using non-binding broker quotes, pricing models, discounted cash flow methodologies, or similar techniques that require significant judgment or estimation.

Income taxes. We join our subsidiaries in the filing of a consolidated federal income tax return and are party to federal income tax allocation agreement. The Reciprocal Exchanges are not party to federal income tax allocation agreement but file separate tax returns annually. Deferred income taxes reflect the impact of temporary differences between the amount of our assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. The deferred tax asset and liability primarily consists of book versus tax differences for earned premiums, loss and LAE reserve discounting, deferred acquisition costs, earned but unbilled premiums, and unrealized holding gains and losses on debt securities.

In assessing the recoverability of deferred tax assets, management considers whether it is more likely than not that we will generate future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. If necessary, we establish a valuation allowance to reduce the deferred tax assets to the amounts that are more likely than not to be realized.

We recognize tax benefits only on tax positions that are more likely than not to be sustained upon examination by taxing authorities. Our policy is to prospectively classify accrued interest and penalties related to any unrecognized tax benefits in our income tax provision. We file our consolidated tax returns as prescribed by the tax laws of the jurisdictions in which we operate.

Principal Revenue and Expense Items

Gross premium written. Gross premium written represents premium from each insurance policy that we write, including as a servicing carrier for assigned risk plans, during a reporting period based on the effective date of the individual policy, before ceding reinsurance to third parties. Premium refunds are recorded as an offset against gross premium written.

Net premium written. Net premium written is gross premium written less that portion of premium that we cede to third-party reinsurers under reinsurance agreements. The amount ceded under these reinsurance agreements is based on a contractual formula contained in the individual reinsurance agreement.

Change in unearned premium. Change in unearned premium is the change in the balance of the portion of premium that we have written but have yet to earn during the relevant period because the policy is unexpired.

Net earned premium. Net earned premium is the earned portion of our net premium written. We earn insurance premium on a pro rata basis over the term of the policy. At the end of each reporting period, premium written that is not earned is classified as unearned premium, which is earned in subsequent periods over the remaining term of the policy. Our policies typically have a term of six months or one year. For a six-month policy written on January 1, 2020, we would earn half of the premium in the first quarter of 2020, and the other half in the second quarter of 2020.

Ceding commission income. Ceding commission income is commission we receive based on the earned premium ceded to third-party reinsurers to reimburse us for our acquisition, underwriting and other operating expenses. We earn commissions on reinsurance premium ceded in a manner consistent with the recognition of the earned premium on the underlying insurance policies, on a pro-rata basis over the terms of the policies reinsured. The portion of ceding commission revenue which represents reimbursement of successful acquisition costs related to the underlying policies is recorded as an offset to acquisition costs and other underwriting expenses.

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Service and fee income. We also generate policy service and fee income from installment fees, late payment fees, and other finance and processing fees related to policy cancellation, policy reinstatement, and insufficient fund check returns. We also collect service fees in the form of commissions and general agent fees by selling policies issued by third-party insurance companies as well as fees generated through selling our technology products to third parties.

Net investment income. We invest our statutory surplus funds and the funds supporting our insurance liabilities primarily in cash and cash equivalents, debt and equity securities. Our net investment income includes interest and dividends earned on our invested assets and earnings or losses on our equity method investments.

Net gains and losses on investments. Net realized gains occur when we sell our investment securities for more than their costs or amortized costs, as applicable; conversely, net realized losses occur when we sell our investment securities for less than their costs or amortized costs, as applicable, or we establish a credit loss allowance on our debt securities as a result of specific credit concerns. For debt securities classified as available-for-sale, other than the allowance for credit losses, we report net unrealized gains and losses within accumulated other comprehensive income in our balance sheet. We report all gains and losses on equity securities within net gains (losses) on investments in our statement of income. Net gains and losses on investments also include foreign exchange gains and losses which are generated by the remeasurement of financial statement balances that are denominated or stated in another currency into the functional currency.

Other income (expense). Other income (expense) represents the bargain purchase gain or the gain on sale of a business.

Loss and loss adjustment expense. Loss and LAE represent our largest expense item and, for any given reporting period, include estimates of future claim payments, changes in those estimates from prior reporting periods and costs associated with investigating, defending, and servicing claims. These expenses fluctuate based on the amount and types of risks we insure. We record loss and LAE related to estimates of future claim payments based on case-by-case valuations and statistical analyses. We seek to establish all reserves at the most likely ultimate exposure based on our historical claims experience. It is typical for our more serious bodily injury claims to take several years to settle, and we revise our estimates as we receive additional information about the condition of claimants and the costs of their medical treatment. Our ability to estimate loss and LAE accurately at the time of pricing our insurance policies is a critical factor in our profitability.

Acquisition costs and other underwriting expenses. Acquisition costs and other underwriting expenses consist of policy acquisition and marketing expenses, salaries and benefits expenses. Policy acquisition expenses comprise commissions attributable to those agents, wholesalers, or brokers that produce premiums written on our behalf and promotional fees attributable to our affinity relationships. Acquisition costs also include costs that are related to the successful acquisition of new or renewal insurance contracts including comprehensive loss underwriting exchange reports, motor vehicle reports, credit score checks, and policy issuance costs.

General and administrative expenses. General and administrative expenses are composed of all other operating expenses, including various departmental salaries and benefits expenses for employees that are involved in the maintenance of policies, information systems, and accounting for insurance transactions, and other insurance expenses such as federal excise tax, postage, telephones and internet access charges, as well as legal and auditing fees and board and bureau charges. In addition, general and administrative expenses include those charges that are related to the amortization of tangible and intangible assets and non-insurance activities in which we engage.

Interest expense. Interest expense represents amounts we incur on our outstanding indebtedness and interest credited on funds held balances at the applicable interest rates.

Income tax expense. We incur federal, state, and local income tax expenses as well as income tax expenses in certain foreign jurisdictions in which we operate.

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Net operating expense (non-GAAP). These expenses consist of the sum of general and administrative expenses and acquisition costs and other underwriting expenses less ceding commission income, service and fee income and other general and administrative expenses (M&A advisory cost / Arbitration award).

Underwriting income. Underwriting income is a measure of an insurance company’s overall operating profitability before items such as investment income, interest expense, and income taxes. Underwriting income is calculated as net earned premium plus ceding commission income and service and fee income less loss and LAE, acquisition costs and other underwriting expenses, and general and administrative expenses.

Insurance Ratios

Net combined ratio (non-GAAP). The net combined ratio (non-GAAP) is a measure of an insurance company’s overall underwriting profit. This is the sum of the net loss ratio and net operating expense ratio (non-GAAP). If the net combined ratio (non-GAAP) is at or above 100 percent, an insurance company cannot be profitable without investment income, and may not be profitable if investment income is insufficient. Our definition of net loss ratio and net operating expense ratio (non-GAAP) are as follows:

Net loss ratio. The net loss ratio is a measure of the underwriting profitability of an insurance company’s business. Expressed as a percentage, this is the ratio of loss and LAE incurred to net earned premium.

Net operating expense ratio (non-GAAP). The net operating expense ratio (non-GAAP) is one component of an insurance company’s operational efficiency in administering its business. Expressed as a percentage, this is the ratio of net operating expense to net earned premium.

Net combined ratio before amortization and impairment (non-GAAP). The net combined ratio before amortization and impairment (non-GAAP) is a measure of an insurance company’s overall underwriting profit. This is the sum of the net loss ratio and net operating expense ratio before amortization and impairment (non-GAAP). Management believes that this measure of underwriting profitability provides a more useful comparison to the combined ratio of other insurance companies involved in fewer acquisitions. Our definition of net operating expense ratio before amortization and impairment is as follows:

Net operating expense ratio before amortization and impairment (non-GAAP). The net operating expense ratio before amortization and impairment (non-GAAP) is one component of an insurance company’s operational efficiency in administering its business. Expressed as a percentage, this is the ratio of net operating expense before non-cash amortization of intangible assets and non-cash impairment of goodwill to net earned premium.

Net operating expense ratio, net operating expense ratio before amortization and impairment, net combined ratio and net combined ratio before amortization and impairment are considered non-GAAP financial measures under applicable SEC rules because a component of those ratios, net operating expense, is calculated by offsetting acquisition costs and other underwriting expenses and general and administrative expenses by ceding commission income and service and fee income, and is therefore a non-GAAP measure. We use net operating expense ratio (non-GAAP), net operating expense ratio before amortization and impairment (non-GAAP), net combined ratio (non-GAAP) and net combined ratio before amortization and impairment (non-GAAP) to evaluate financial performance against historical results and establish targets on a consolidated basis. We believe this presentation enhances the understanding of our results by eliminating what we believe are volatile and unusual events and presenting the ratios with what we believe are the underlying run rates of the business. Other companies may calculate these measures differently, and, therefore, their measures may not be comparable to those used by us. For a reconciliation of net operating expense, see “Results of Operations - Consolidated Results of Operations” below.

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Results of Operations

Consolidated Results of Operations

	Year Ended December 31,
	2020								2019
	NGHC		Reciprocal Exchanges		Eliminations		Total		NGHC		Reciprocal Exchanges		Eliminations		Total
Underwriting revenues:	(amounts in thousands)
Gross premium written	$	5,260,946	$	373,601	$	—	$	5,634,547	$	5,135,633	$	447,447	$	—	$	5,583,080
Ceded premiums	(841,318)		(172,385)		—		(1,013,703)		(1,145,484)		(212,975)		—		(1,358,459)
Net premium written	$	4,419,628	$	201,216	$	—	$	4,620,844	$	3,990,149	$	234,472	$	—	$	4,224,621
Change in unearned premium	(146,257)		20,033		—		(126,224)		(82,338)		(24,241)		—		(106,579)
Net earned premium	$	4,273,371	$	221,249	$	—	$	4,494,620	$	3,907,811	$	210,231	$	—	$	4,118,042
Ceding commission income	110,163		42,294		—		152,457		174,952		63,501		—		238,453
Service and fee income	807,772		6,311		(53,709)		760,374		705,006		5,755		(68,796)		641,965
Total underwriting revenues	$	5,191,306	$	269,854	$	(53,709)	$	5,407,451	$	4,787,769	$	279,487	$	(68,796)	$	4,998,460
Underwriting expenses:
Loss and loss adjustment expense	2,669,732		154,350		—		2,824,082		2,677,356		177,112		—		2,854,468
Acquisition costs and other underwriting expenses	943,739		46,830		—		990,569		782,328		45,039		—		827,367
General and administrative expenses	1,031,600		65,302		(53,709)		1,043,193		1,024,574		85,994		(68,796)		1,041,772
Total underwriting expenses	$	4,645,071	$	266,482	$	(53,709)	$	4,857,844	$	4,484,258	$	308,145	$	(68,796)	$	4,723,607
Underwriting income (loss)	$	546,235	$	3,372	$	—	$	549,607	$	303,511	$	(28,658)	$	—	$	274,853
Net investment income	121,274		7,256		(10,273)		118,257		142,174		8,638		(9,579)		141,233
Net gain (loss) on investments	14,145		12,432		—		26,577		13,603		(130)		—		13,473
Other income	—		—		—		—		26,428		—		—		26,428
Interest expense	(33,646)		(10,399)		10,273		(33,772)		(51,544)		(9,579)		9,579		(51,544)
Income (loss) before provision (benefit) for income taxes	$	648,008	$	12,661	$	—	$	660,669	$	434,172	$	(29,729)	$	—	$	404,443
Provision (benefit) for income taxes	134,677		1,784		—		136,461		86,103		(9,090)		—		77,013
Net income (loss)	$	513,331	$	10,877	$	—	$	524,208	$	348,069	$	(20,639)	$	—	$	327,430
Net gain (loss) attributable to noncontrolling interest	—		(10,877)		—		(10,877)		—		20,639		—		20,639
Net income attributable to NGHC	$	513,331	$	—	$	—	$	513,331	$	348,069	$	—	$	—	$	348,069
Dividends on preferred stock	(33,600)		—		—		(33,600)		(33,600)		—		—		(33,600)
Net income attributable to NGHC common stockholders	$	479,731	$	—	$	—	$	479,731	$	314,469	$	—	$	—	$	314,469

51

	Year Ended December 31,
	2020												2019
	NGHC			Reciprocal Exchanges			Eliminations			Total			NGHC			Reciprocal Exchanges			Eliminations			Total
Underwriting ratios:	(amounts in thousands, except percentages)
Net loss ratio	62.5		%	69.8		%	—		%	62.8		%	68.5		%	84.2		%	—		%	69.3		%
Net operating expense ratio (non-GAAP)	24.6		%	28.7		%	—		%	24.8		%	23.4		%	29.4		%	—		%	23.7		%
Net combined ratio (non-GAAP)	87.1		%	98.5		%	—		%	87.6		%	91.9		%	113.6		%	—		%	93.0		%
Underwriting ratios before amortization and impairment (non-GAAP):
Net loss ratio	62.5		%	69.8		%	—		%	62.8		%	68.5		%	84.2		%	—		%	69.3		%
Net operating expense ratio before amortization and impairment (non-GAAP)	24.1		%	28.7		%	—		%	24.3		%	22.5		%	29.4		%	—		%	22.8		%
Net combined ratio before amortization and impairment (non-GAAP)	86.6		%	98.5		%	—		%	87.1		%	91.0		%	113.6		%	—		%	92.1		%
Reconciliation of net operating expense ratio (non-GAAP):
Total expenses	$	4,678,717		$	276,881		$	(63,982)		$	4,891,616		$	4,535,802		$	317,724		$	(78,375)		$	4,775,151
Less: Loss and loss adjustment expense	2,669,732			154,350			—			2,824,082			2,677,356			177,112			—			2,854,468
Less: Interest expense	33,646			10,399			(10,273)			33,772			51,544			9,579			(9,579)			51,544
Less: Ceding commission income	110,163			42,294			—			152,457			174,952			63,501			—			238,453
Less: Service and fee income	807,772			6,311			(53,709)			760,374			705,006			5,755			(68,796)			641,965
Less: Other general and administrative expenses	8,026			—			—			8,026			14,273			—			—			14,273
Net operating expense (non-GAAP)	$	1,049,378		$	63,527		$	—		$	1,112,905		$	912,671		$	61,777		$	—		$	974,448
Net earned premium	$	4,273,371		$	221,249		$	—		$	4,494,620		$	3,907,811		$	210,231		$	—		$	4,118,042
Net operating expense ratio (non-GAAP)	24.6		%	28.7		%	—		%	24.8		%	23.4		%	29.4		%	—		%	23.7		%
Net operating expense (non-GAAP)	$	1,049,378		$	63,527		$	—		$	1,112,905		$	912,671		$	61,777		$	—		$	974,448
Less: Non-cash amortization of intangible assets	20,637			131			—			20,768			34,665			71			—			34,736
Net operating expense before amortization and impairment (non-GAAP)	$	1,028,741		$	63,396		$	—		$	1,092,137		$	878,006		$	61,706		$	—		$	939,712
Net earned premium	$	4,273,371		$	221,249		$	—		$	4,494,620		$	3,907,811		$	210,231		$	—		$	4,118,042
Net operating expense ratio before amortization and impairment (non-GAAP)	24.1		%	28.7		%	—		%	24.3		%	22.5		%	29.4		%	—		%	22.8		%

52

The Company has auto and homeowners quota share agreements (collectively, the “Quota Shares”). Effective January 1, 2020, under the auto quota share agreement we cede 5.0% of net liability under new and renewal auto policies written, compared to 7.0% and 10.0% of net liability ceded effective January 1, 2019, and July 1, 2019, respectively. From July 1, 2019, to June 30, 2020, under the homeowners quota share agreement we ceded 40.0% of net liability. Effective July 1, 2020, we cede 20.0% of net liability under homeowners policies.

In August 2019, we completed the acquisition of National Farmers Union Property and Casualty Company (“Farmers Union Insurance”). In December 2019, we sold our Euro Accident Health and Care Insurance Sweden operation (“Euroaccident”).

As a result of these transactions, comparisons between the results for the years ended December 31, 2020, and 2019, will be less meaningful.

Consolidated Results of Operations for the Year Ended December 31, 2020, Compared to the Year Ended December 31, 2019

Gross premium written. Gross premium written increased by $51.5 million, from $5,583.1 million for the year ended December 31, 2019, to $5,634.5 million for the year ended December 31, 2020. The P&C segment increased by $43.2 million, primarily driven by the acquisition of Farmers Union Insurance ($102.7 million), partially offset by a decrease in the Reciprocal Exchanges ($73.8 million). The A&H segment increased by $8.3 million due to an increase in our small group self-funded and individual products ($147.8 million), offset by the sale of Euroaccident in 2019 ($139.3 million).

Net premium written. Net premium written increased by $396.2 million, or 9.4%, from $4,224.6 million for the year ended December 31, 2019, to $4,620.8 million for the year ended December 31, 2020. Net premium written for the P&C segment increased by $370.4 million for the year ended December 31, 2020 compared to the same period in 2019, due to an increase in gross premium written and a decrease in ceded written premium to the Quota Shares ($461.2 million), partially offset by a decrease in the Reciprocal Exchanges ($33.3 million). Net premium written for the A&H segment increased by $25.8 million for the year ended December 31, 2020, compared to the same period in 2019, due to an increase in our small group self-funded and individual products ($115.1 million), offset by the sale of Euroaccident in 2019 ($89.2 million).

Net earned premium. Net earned premium increased by $376.6 million, or 9.1%, from $4,118.0 million for the year ended December 31, 2019, to $4,494.6 million for the year ended December 31, 2020. The change by segment was: P&C increased by $354.1 million and A&H increased by $22.4 million. The increase in the P&C segment was attributable to the increase in net premium written and a decrease in ceded earned premium to the Quota Shares ($301.0 million), and an increase in the Reciprocal Exchanges ($11.0 million). The increase in the A&H segment was attributable to an increase in our small group self-funded and individual products ($113.9 million), offset by the sale of Euroaccident in 2019 ($91.4 million).

Ceding commission income. Ceding commission income decreased by $86.0 million, or 36.1%, from $238.5 million for the year ended December 31, 2019, to $152.5 million for the year ended December 31, 2020, primarily driven by a decrease in ceded earned premium to the Quota Shares.

Service and fee income. Service and fee income increased by $118.4 million, or 18.4%, from $642.0 million for the year ended December 31, 2019, to $760.4 million for the year ended December 31, 2020, primarily due to an increase of $119.2 million in the A&H segment related to growth in group administration fees and third party technology fees; third party technology fees are included in other service and fee income.

53

The components of service and fee income are as follows:

	Year Ended December 31,
	2020		2019		Change		% Change
	(amounts in thousands)
Commission revenue	$	184,681	$	170,962	$	13,719	8.0	%
Finance and processing fees	138,873		134,499		4,374		3.3	%
Group health administrative fees	124,523		100,951		23,572		23.3	%
Installment fees	104,915		97,997		6,918		7.1	%
Late payment fees	32,436		34,519		(2,083)		(6.0)	%
Other service and fee income	174,946		103,037		71,909		69.8	%
Total	$	760,374	$	641,965	$	118,409	18.4	%

Loss and loss adjustment expense; net loss ratio. Loss and LAE decreased by $30.4 million, from $2,854.5 million for the year ended December 31, 2019, to $2,824.1 million for the year ended December 31, 2020, primarily reflecting lower claims frequency, as a result of less miles driven during the pandemic ($239.8 million), offset by a decrease in losses ceded to the Quota Shares ($180.3 million), the acquisition of Farmers Union Insurance ($43.6 million), and the sale of Euroaccident in 2019 ($48.3 million). The changes by segment were: P&C decreased by $38.6 million and A&H increased by $8.2 million. Losses related to P&C weather-related events, excluding the Reciprocal Exchanges, were $150.2 million in 2020, compared to $51.2 million in 2019, an increase of $99.0 million year over year.

Loss and LAE for the year ended December 31, 2020, included $4.2 million of unfavorable loss development on prior accident year loss and LAE reserves. The loss development was composed of $28.0 million of unfavorable loss development in the P&C segment, driven by the small business auto product line, and $23.8 million of favorable loss development in the A&H segment, driven by lower than expected loss ratios in the group segment. Loss and LAE for the year ended December 31, 2019, included $5.2 million of unfavorable loss development on prior accident year loss and LAE reserves. The loss development was composed of $50.5 million of unfavorable loss development in the P&C segment primarily driven by the small business auto product line, and $45.4 million of favorable loss development in the A&H segment primarily driven by overall improvement in loss ratio estimates.

Our consolidated net loss ratio decreased from 69.3% for the year ended December 31, 2019, to 62.8% for the year ended December 31, 2020.

Acquisition costs and other underwriting expenses. Acquisition costs and other underwriting expenses increased by $163.2 million, or 19.7%, from $827.4 million for the year ended December 31, 2019, to $990.6 million for the year ended December 31, 2020, due to an increase of $76.3 million in the P&C segment, as a result of the acquisition of Farmers Union Insurance and higher costs and expenses retained due to a decrease in ceded earned premium to the Quota Shares; and an increase of $86.9 million in the A&H segment, primarily due to the costs of selling policies issued by third-party insurance companies.

General and administrative expenses. General and administrative expenses increased by $1.4 million, from $1,041.8 million for the year ended December 31, 2019, to $1,043.2 million for the year ended December 31, 2020, due to an increase of $19.6 million in the P&C segment, offset by a decrease of $12.0 million in the A&H segment. The increase in the P&C segment was primarily due to organic growth, while the decrease in the A&H segment was primarily a result of the sale of Euroaccident in 2019.

Net operating expense (non-GAAP); net operating expense ratio (non-GAAP). Net operating expense increased by $138.5 million, or 14.2%, from $974.4 million for the year ended December 31, 2019, to $1,112.9 million for the year ended December 31, 2020, due to an increase of $171.5 million from the P&C segment, primarily offset by a decrease of $33.1 million from the A&H segment.

54

The consolidated net operating expense ratio increased from 23.7% for the year ended December 31, 2019, to 24.8% for the year ended December 31, 2020. Excluding the Reciprocal Exchanges, the net operating expense ratio was 24.6% and 23.4% for the years ended December 31, 2020, and 2019, respectively. The Reciprocal Exchanges’ net operating expense ratio was 28.7% and 29.4% for the years ended December 31, 2020, and 2019, respectively.

Net investment income. Net investment income decreased by $23.0 million, or 16.3%, from $141.2 million for the year ended December 31, 2019, to $118.3 million for the year ended December 31, 2020.

Net gain (loss) on investments. Net gain (loss) on investments increased by $13.1 million, from a $13.5 million gain for the year ended December 31, 2019, to a $26.6 million gain for the year ended December 31, 2020.

Interest expense. Interest expense for the years ended December 31, 2020, and 2019, was $33.8 million and $51.5 million, respectively.

Provision for income taxes. Income tax expense increased by $59.4 million, from $77.0 million for the year ended December 31, 2019, reflecting an effective tax rate of 19.0%, to $136.5 million for the year ended December 31, 2020, reflecting an effective tax rate of 20.7%.

55

P&C Segment - Results of Operations

	Year Ended December 31,
	2020												2019
	NGHC			Reciprocal Exchanges			Eliminations			Total			NGHC			Reciprocal Exchanges			Eliminations			Total
Underwriting revenues:	(amounts in thousands, except percentages)
Gross premium written	$	4,484,030		$	373,601		$	—		$	4,857,631		$	4,367,016		$	447,447		$	—		$	4,814,463
Ceded premiums	(750,783)			(172,385)			—			(923,168)			(1,037,473)			(212,975)			—			(1,250,448)
Net premium written	$	3,733,247		$	201,216		$	—		$	3,934,463		$	3,329,543		$	234,472		$	—		$	3,564,015
Change in unearned premium	(145,343)			20,033			—			(125,310)			(84,751)			(24,241)			—			(108,992)
Net earned premium	$	3,587,904		$	221,249		$	—		$	3,809,153		$	3,244,792		$	210,231		$	—		$	3,455,023
Ceding commission income	110,377			42,294			—			152,671			164,013			63,501			—			227,514
Service and fee income	439,100			6,311			(53,709)			391,702			455,519			5,755			(68,796)			392,478
Total underwriting revenues	$	4,137,381		$	269,854		$	(53,709)		$	4,353,526		$	3,864,324		$	279,487		$	(68,796)		$	4,075,015
Underwriting expenses:
Loss and loss adjustment expense	2,350,839			154,350			—			2,505,189			2,366,676			177,112			—			2,543,788
Acquisition costs and other underwriting expenses	634,456			46,830			—			681,286			559,980			45,039			—			605,019
General and administrative expenses	781,336			65,302			(53,709)			792,929			756,093			85,994			(68,796)			773,291
Total underwriting expenses	$	3,766,631		$	266,482		$	(53,709)		$	3,979,404		$	3,682,749		$	308,145		$	(68,796)		$	3,922,098
Underwriting income (loss)	$	370,750		$	3,372		$	—		$	374,122		$	181,575		$	(28,658)		$	—		$	152,917
Underwriting ratios:
Net loss ratio	65.5		%	69.8		%	—		%	65.8		%	72.9		%	84.2		%	—		%	73.6		%
Net operating expense ratio (non-GAAP)	24.1		%	28.7		%	—		%	24.4		%	21.5		%	29.4		%	—		%	21.9		%
Net combined ratio (non-GAAP)	89.6		%	98.5		%	—		%	90.2		%	94.4		%	113.6		%	—		%	95.5		%
Underwriting ratios before amortization and impairment (non-GAAP):
Net loss ratio	65.5		%	69.8		%	—		%	65.8		%	72.9		%	84.2		%	—		%	73.6		%
Net operating expense ratio before amortization and impairment (non-GAAP)	23.7		%	28.7		%	—		%	24.0		%	20.6		%	29.4		%	—		%	21.1		%
Net combined ratio before amortization and impairment (non-GAAP)	89.2		%	98.5		%	—		%	89.8		%	93.5		%	113.6		%	—		%	94.7		%
Reconciliation of net operating expense ratio (non-GAAP):
Total underwriting expenses	$	3,766,631		$	266,482		$	(53,709)		$	3,979,404		$	3,682,749		$	308,145		$	(68,796)		$	3,922,098
Less: Loss and loss adjustment expense	2,350,839			154,350			—			2,505,189			2,366,676			177,112			—			2,543,788
Less: Ceding commission income	110,377			42,294			—			152,671			164,013			63,501			—			227,514
Less: Service and fee income	439,100			6,311			(53,709)			391,702			455,519			5,755			(68,796)			392,478
Net operating expense (non-GAAP)	$	866,315		$	63,527		$	—		$	929,842		$	696,541		$	61,777		$	—		$	758,318
Net earned premium	$	3,587,904		$	221,249		$	—		$	3,809,153		$	3,244,792		$	210,231		$	—		$	3,455,023
Net operating expense ratio (non-GAAP)	24.1		%	28.7		%	—		%	24.4		%	21.5		%	29.4		%	—		%	21.9		%
Net operating expense (non-GAAP)	$	866,315		$	63,527		$	—		$	929,842		$	696,541		$	61,777		$	—		$	758,318
Less: Non-cash amortization of intangible assets	15,436			131			—			15,567			27,920			71			—			27,991
Net operating expense before amortization and impairment (non-GAAP)	$	850,879		$	63,396		$	—		$	914,275		$	668,621		$	61,706		$	—		$	730,327
Net earned premium	$	3,587,904		$	221,249		$	—		$	3,809,153		$	3,244,792		$	210,231		$	—		$	3,455,023
Net operating expense ratio before amortization and impairment (non-GAAP)	23.7		%	28.7		%	—		%	24.0		%	20.6		%	29.4		%	—		%	21.1		%

56

P&C Segment Results of Operations for the Year Ended December 31, 2020, Compared to the Year Ended December 31, 2019

Gross premium written. Gross premium written increased by $43.2 million, from $4,814.5 million for the year ended December 31, 2019, to $4,857.6 million for the year ended December 31, 2020, primarily driven by the acquisition of Farmers Union Insurance ($102.7 million), partially offset by a decrease in the Reciprocal Exchanges ($73.8 million).

Net premium written. Net premium written increased by $370.4 million, or 10.4%, from $3,564.0 million for the year ended December 31, 2019, to $3,934.5 million for the year ended December 31, 2020, due to the increase in gross premium written and a decrease in ceded written premium to the Quota Shares ($461.2 million), partially offset by a decrease in the Reciprocal Exchanges ($33.3 million).

Net earned premium. Net earned premium increased by $354.1 million, or 10.2%, from $3,455.0 million for the year ended December 31, 2019, to $3,809.2 million for the year ended December 31, 2020, attributable to the increase in net premium written, decrease in ceded earned premium to the Quota Shares ($301.0 million), and an increase in the Reciprocal Exchanges ($11.0 million).

Ceding commission income. Ceding commission income decreased by $74.8 million, or 32.9% from $227.5 million for the year ended December 31, 2019, to $152.7 million for the year ended December 31, 2020, primarily driven by a decrease in ceded earned premium to the Quota Shares.

Service and fee income. Service and fee income decreased by $0.8 million, from $392.5 million for the year ended December 31, 2019, to $391.7 million for the year ended December 31, 2020.

The components of service and fee income are as follows:

	Year Ended December 31,
	2020		2019		Change		% Change
	(amounts in thousands)
Finance and processing fees	$	129,327	$	128,302	$	1,025	0.8	%
Installment fees	104,915		97,997		6,918		7.1	%
Commission revenue	60,103		87,486		(27,383)		(31.3)	%
Late payment fees	32,377		34,210		(1,833)		(5.4)	%
Other service and fee income	64,980		44,483		20,497		46.1	%
Total	$	391,702	$	392,478	$	(776)	(0.2)	%

Loss and loss adjustment expense; net loss ratio. Loss and LAE decreased by $38.6 million, from $2,543.8 million for the year ended December 31, 2019, to $2,505.2 million for the year ended December 31, 2020, primarily reflecting lower claims frequency, as a result of less miles driven during the pandemic ($239.8 million) and the sale of Euroaccident in 2019 ($48.3 million), offset by a decrease in losses ceded to the Quota Shares ($180.3 million), and the acquisition of Farmers Union Insurance ($43.6 million). Losses related to weather-related events, excluding the Reciprocal Exchanges, were $150.2 million in 2020, compared to $51.2 million in 2019, an increase of $99.0 million year over year.

Our P&C segment net loss ratio, which includes the Reciprocal Exchanges, decreased from 73.6% for the year ended December 31, 2019, to 65.8% for the year ended December 31, 2020. Excluding the Reciprocal Exchanges, the net loss ratio was 65.5% and 72.9% for the years ended December 31, 2020, and 2019, respectively. The Reciprocal Exchanges’ net loss ratio was 69.8% and 84.2% for the years ended December 31, 2020, and 2019, respectively.

57

Acquisition costs and other underwriting expenses. Acquisition costs and other underwriting expenses increased by $76.3 million, or 12.6%, from $605.0 million for the year ended December 31, 2019, to $681.3 million for the year ended December 31, 2020. The increase was primarily due to the acquisition of Farmers Union Insurance and higher costs and expenses retained due to a decrease in ceded earned premium to the Quota Shares.

General and administrative expenses. General and administrative expenses increased by $19.6 million, from $773.3 million for the year ended December 31, 2019, to $792.9 million for the year ended December 31, 2020. The increase was primarily driven by organic growth.

Net operating expense (non-GAAP); net operating expense ratio (non-GAAP). Net operating expense increased by $171.5 million, or 22.6%, from $758.3 million for the year ended December 31, 2019, to $929.8 million for the year ended December 31, 2020. Our P&C segment net operating expense ratio was 21.9% for the year ended December 31, 2019, compared to 24.4% for the year ended December 31, 2020. The increases in net operating expense and net operating expense ratio were primarily due to organic growth, the acquisition of Farmers Union Insurance, and a decrease in ceding commission income from the Quota Shares.

Underwriting income; net combined ratio (non-GAAP). Underwriting income increased by $221.2 million, or 144.7%, from $152.9 million for the year ended December 31, 2019, to $374.1 million for the year ended December 31, 2020. The P&C segment net combined ratio decreased from 95.5% for the year ended December 31, 2019, to 90.2% for the year ended December 31, 2020. The increase in underwriting income and the decrease in the net combined ratio were primarily due to increased net earned premium and lower claims, including as a result of the recent decline in miles driven due to the COVID-19 pandemic, offset by higher expenses due to organic growth and the acquisition of Farmers Union Insurance, and a decrease in ceding commission income from the Quota Shares.

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A&H Segment - Results of Operations

	Year Ended December 31,
	2020			2019
Underwriting revenues:	(amounts in thousands, except percentages)
Gross premium written	$	776,916		$	768,617
Ceded premiums	(90,535)			(108,011)
Net premium written	$	686,381		$	660,606
Change in unearned premium	(914)			2,413
Net earned premium	$	685,467		$	663,019
Ceding commission income	(214)			10,939
Service and fee income	368,672			249,487
Total underwriting revenues	$	1,053,925		$	923,445
Underwriting expenses:
Loss and loss adjustment expense	318,893			310,680
Acquisition costs and other underwriting expenses	309,283			222,348
General and administrative expenses	242,238			254,208
Total underwriting expenses	$	870,414		$	787,236
Underwriting income	$	183,511		$	136,209
Underwriting ratios:
Net loss ratio	46.5		%	46.9		%
Net operating expense ratio (non-GAAP)	26.7		%	32.6		%
Net combined ratio (non-GAAP)	73.2		%	79.5		%
Underwriting ratios before amortization and impairment (non-GAAP):
Net loss ratio	46.5		%	46.9		%
Net operating expense ratio before amortization and impairment (non-GAAP)	25.9		%	31.6		%
Net combined ratio before amortization and impairment (non-GAAP)	72.4		%	78.5		%
Reconciliation of net operating expense ratio (non-GAAP):
Total expenses	$	870,414		$	787,236
Less: Loss and loss adjustment expense	318,893			310,680
Less: Ceding commission income	(214)			10,939
Less: Service and fee income	368,672			249,487
Net operating expense	$	183,063		$	216,130
Net earned premium	$	685,467		$	663,019
Net operating expense ratio (non-GAAP)	26.7		%	32.6		%
Net operating expense (non-GAAP)	$	183,063		$	216,130
Less: Non-cash amortization of intangible assets	5,201			6,745
Net operating expense before amortization and impairment (non-GAAP)	$	177,862		$	209,385
Net earned premium	$	685,467		$	663,019
Net operating expense ratio before amortization and impairment (non-GAAP)	25.9		%	31.6		%

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A&H Segment Results of Operations for the Year Ended December 31, 2020, Compared to the Year Ended December 31, 2019

Gross premium written. Gross premium written increased by $8.3 million, from $768.6 million for the year ended December 31, 2019, to $776.9 million for the year ended December 31, 2020, primarily due to an increase in our small group self-funded and individual products ($147.8 million), offset by the sale of Euroaccident in 2019 ($139.3 million).

Net premium written. Net premium written increased by $25.8 million, from $660.6 million for the year ended December 31, 2019, to $686.4 million for the year ended December 31, 2020, primarily due to an increase in our small group self-funded and individual products ($115.1 million), offset by the sale of Euroaccident in 2019 ($89.2 million).

Net earned premium. Net earned premium increased by $22.4 million, from $663.0 million for the year ended December 31, 2019, to $685.5 million for the year ended December 31, 2020, primarily due to an increase in our small group self-funded and individual products ($113.9 million), offset by the sale of Euroaccident in 2019 ($91.4 million).

Service and fee income. Service and fee income increased by $119.2 million, or 47.8%, from $249.5 million for the year ended December 31, 2019, to $368.7 million for the year ended December 31, 2020, primarily driven by growth in commission revenue, group administration fees and third party technology fees; third party technology fees are included in other service and fee income.

The components of service and fee income are as follows:

	Year Ended December 31,
	2020		2019		Change		% Change
	(amounts in thousands)
Commission revenue	$	124,578	$	83,476	$	41,102	49.2	%
Group health administrative fees	124,523		100,951		23,572		23.3	%
Finance and processing fees	9,546		6,197		3,349		54.0	%
Other service and fee income	110,025		58,863		51,162		86.9	%
Total	$	368,672	$	249,487	$	119,185	47.8	%

Loss and loss adjustment expense; net loss ratio. Loss and LAE increased by $8.2 million, from $310.7 million for the year ended December 31, 2019, to $318.9 million for the year ended December 31, 2020. Our A&H net loss ratio decreased from 46.9% for the year ended December 31, 2019, to 46.5% for the year ended December 31, 2020. The loss ratio decrease was primarily due to lower claims frequency.

Acquisition costs and other underwriting expenses. Acquisition costs and other underwriting expenses increased by $86.9 million, or 39.1%, from $222.3 million for the year ended December 31, 2019, to $309.3 million for the year ended December 31, 2020, primarily due to the costs of selling policies issued by third-party insurance companies.

General and administrative expenses. General and administrative expenses decreased by $12.0 million, from $254.2 million for the year ended December 31, 2019, to $242.2 million for the year ended December 31, 2020, primarily due to the sale of Euroaccident in 2019.

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Net operating expense (non-GAAP); net operating expense ratio (non-GAAP). Net operating expense decreased by $33.1 million, or 15.3%, from $216.1 million for the year ended December 31, 2019, to $183.1 million for the year ended December 31, 2020. Our A&H net operating expense ratio decreased from 32.6% for the year ended December 31, 2019, to 26.7% for the year ended December 31, 2020. The decreases in net operating expense and net operating ratio were primarily due to increased net earned premium in 2020 and the sale of Euroaccident in 2019.

Underwriting income; net combined ratio (non-GAAP). Underwriting income increased by $47.3 million, or 34.7%, from $136.2 million for the year ended December 31, 2019, to $183.5 million for the year ended December 31, 2020. Our A&H net combined ratio decreased from 79.5% for the year ended December 31, 2019, to 73.2% for the year ended December 31, 2020.

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Balance Sheets

	December 31, 2020
	NGHC		Reciprocal Exchanges		Eliminations		Total
ASSETS	(amounts in thousands)
Investments:
Debt securities, available-for-sale, at fair value	$	4,186,915	$	310,215	$	—	$	4,497,130
Short-term investments	164,199		26,887		—		191,086
Other investments	388,665		—		(107,610)		281,055
Total investments	4,739,779		337,102		(107,610)		4,969,271
Cash and cash equivalents	658,990		3,782		—		662,772
Restricted cash and cash equivalents	36,664		331		—		36,995
Accrued investment income	71,121		1,628		(44,946)		27,803
Premiums and other receivables, net	1,496,065		49,315		—		1,545,380
Deferred acquisition costs	266,705		19,200		—		285,905
Reinsurance recoverable, net	1,093,415		125,515		—		1,218,930
Prepaid reinsurance premiums	324,160		89,850		—		414,010
Property and equipment, net	377,683		—		—		377,683
Intangible assets, net	337,680		3,045		—		340,725
Goodwill	179,328		—		—		179,328
Prepaid and other assets	65,528		3,564		—		69,092
Total assets	$	9,647,118	$	633,332	$	(152,556)	$	10,127,894
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Unpaid loss and loss adjustment expense reserves	$	2,683,126	$	205,972	$	—	$	2,889,098
Unearned premiums and other revenue	2,037,536		207,088		—		2,244,624
Reinsurance payable	304,492		59,039		—		363,531
Accounts payable and accrued expenses	367,459		55,149		(44,946)		377,662
Debt	676,810		107,610		(107,610)		676,810
Other liabilities	340,532		19,639		—		360,171
Total liabilities	$	6,409,955	$	654,497	$	(152,556)	$	6,911,896
Stockholders’ equity:
Preferred stock	$	450,000	$	—	$	—	$	450,000
Common stock	1,140		—		—		1,140
Treasury stock, at cost	(8,482)		—		—		(8,482)
Additional paid-in capital	1,077,006		—		—		1,077,006
Accumulated other comprehensive income	203,203		—		—		203,203
Retained earnings	1,514,296		—		—		1,514,296
Total National General Holdings Corp. stockholders’ equity	3,237,163		—		—		3,237,163
Noncontrolling interest	—		(21,165)		—		(21,165)
Total stockholders’ equity	$	3,237,163	$	(21,165)	$	—	$	3,215,998
Total liabilities and stockholders’ equity	$	9,647,118	$	633,332	$	(152,556)	$	10,127,894

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	December 31, 2019
	NGHC		Reciprocal Exchanges		Eliminations		Total
ASSETS	(amounts in thousands)
Investments:
Debt securities, available-for-sale, at fair value	$	4,152,109	$	324,249	$	—	$	4,476,358
Short-term investments	62,108		5,245		—		67,353
Other investments	418,743		—		(107,456)		311,287
Total investments	4,632,960		329,494		(107,456)		4,854,998
Cash and cash equivalents	134,983		959		—		135,942
Restricted cash and cash equivalents	28,497		24		—		28,521
Accrued investment income	63,752		2,001		(34,826)		30,927
Premiums and other receivables, net	1,373,089		55,859		—		1,428,948
Deferred acquisition costs	240,216		23,307		—		263,523
Reinsurance recoverable, net	1,275,183		119,125		—		1,394,308
Prepaid reinsurance premiums	469,853		105,894		—		575,747
Property and equipment, net	403,586		241		—		403,827
Intangible assets, net	362,598		3,225		—		365,823
Goodwill	179,328		—		—		179,328
Prepaid and other assets	91,121		3,521		—		94,642
Total assets	$	9,255,166	$	643,650	$	(142,282)	$	9,756,534
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Unpaid loss and loss adjustment expense reserves	$	2,680,628	$	205,786	$	—	$	2,886,414
Unearned premiums and other revenue	2,059,688		252,553		—		2,312,241
Reinsurance payable	527,155		35,689		—		562,844
Accounts payable and accrued expenses	306,869		43,323		(34,826)		315,366
Debt	686,006		107,456		(107,456)		686,006
Other liabilities	345,366		30,803		—		376,169
Total liabilities	$	6,605,712	$	675,610	$	(142,282)	$	7,139,040
Stockholders’ equity:
Preferred stock	$	450,000	$	—	$	—	$	450,000
Common stock	1,134		—		—		1,134
Additional paid-in capital	1,065,634		—		—		1,065,634
Accumulated other comprehensive income	74,548		—		—		74,548
Retained earnings	1,058,138		—		—		1,058,138
Total National General Holdings Corp. stockholders’ equity	2,649,454		—		—		2,649,454
Noncontrolling interest	—		(31,960)		—		(31,960)
Total stockholders’ equity	$	2,649,454	$	(31,960)	$	—	$	2,617,494
Total liabilities and stockholders’ equity	$	9,255,166	$	643,650	$	(142,282)	$	9,756,534

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Other Material Changes in Financial Position

	December 31,
	2020		2019		Change		% Change
	(amounts in thousands)
Selected Assets:
Reinsurance recoverable, net	$	1,218,930	$	1,394,308	$	(175,378)	(12.6)	%

Changes in Financial Position During the Year Ended December 31, 2020, Compared to December 31, 2019

Reinsurance recoverable decreased by $175,378, driven by a decrease in our P&C segment ($189,429), primarily due to a decrease in ceded premiums to the Quota Shares; and an increase in the A&H segment ($14,051), due to growth in the small group self-funded and individual products.

Investment Portfolio

Our investment strategy emphasizes, first, the preservation of capital and, second, maximization of an appropriate risk-adjusted return. We seek to maximize investment returns using investment guidelines that stress prudent allocation among cash and cash equivalents, debt securities and, to a lesser extent, other investments. Cash and cash equivalents include cash on deposit, commercial paper, pooled short-term money market funds, and certificates of deposit with an original maturity of 90 days or less. Our debt securities include obligations of the U.S. Treasury or U.S. government agencies, obligations of local governments, U.S. denominated corporate obligations, mortgages guaranteed by the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation, Federal Farm Credit entities, commercial mortgage obligations, asset-backed securities, and structured securities consisting of collateralized loan and debt obligations.

The average yield on our investment portfolio was 2.7% and 3.1% for the years ended December 31, 2020, and 2019, respectively, and the average duration of the portfolio was 3.5 years and 4.2 years as of December 31, 2020, and 2019, respectively.

For more information related to our investments, see Note 4, “Investments” in the notes to our consolidated financial statements.

Liquidity and Capital Resources

We are organized as a holding company with twenty-two domestic insurance company subsidiaries and various foreign insurance and reinsurance subsidiaries, as well as various other non-insurance subsidiaries. Our principal sources of operating funds are premiums, service and fee income, investment income and proceeds from sales and maturities of investments. Our primary uses of operating funds include payments of claims and operating expenses. Currently, we pay claims using cash flow from operations and invest our excess cash primarily in debt securities and, to a lesser extent, other investments. Except as set forth below, we expect that projected cash flows from operations will provide us with sufficient liquidity to fund our anticipated growth by providing capital to increase the surplus of our insurance subsidiaries, as well as to pay claims and operating expenses, and to pay interest and principal on debt and other holding company expenses for the foreseeable future. However, if our growth attributable to prior acquisitions, internally generated growth, or a combination of these factors, exceeds our expectations, we may have to raise additional capital. If we cannot obtain adequate capital on favorable terms or at all, we may be unable to support future growth or operating requirements and, as a result, our business, financial condition, and results of operations could be adversely affected. To support our current and future policy writings, we have raised capital using a combination of debt and equity, and entered into third-party quota share reinsurance agreements.

We previously had a $340.0 million credit agreement, under which there was $140.0 million outstanding as of December 31, 2020. On January 4, 2021, the 2019 Credit Agreement was repaid and terminated in connection with the closing of the Merger.

On April 29, 2020, our Board of Directors authorized and approved a share repurchase program with a 12-month term for up to $50.0 million aggregate purchase price of our outstanding common shares. During the year ended December 31, 2020, we purchased 459,083 common shares with a cost of $8.5 million. The purchases were made in the open market in accordance with applicable federal securities laws, including Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. Pursuant to the terms of the Merger Agreement with Allstate signed July 7, 2020, we ceased making any further common share repurchases.

Our insurance subsidiaries are subject to statutory and regulatory restrictions imposed on insurance companies by their place of domicile which limit the amount of cash dividends or distributions that they may pay to us unless special permission is received from the insurance regulator of the relevant domicile. The aggregate limit imposed by the various domiciliary regulatory authorities of our insurance subsidiaries was approximately $156.4 million and $403.0 million as of December 31, 2020, and 2019, respectively, taking into account dividends paid in the prior twelve month periods. During the years ended December 31, 2020, 2019, and 2018, there were $300.0 million, $7.0 million and $156.7 million, respectively, of dividends or return of capital paid by our insurance subsidiaries.

We forecast claim payments based on our historical experience. We seek to manage the funding of claim payments by actively managing available cash and forecasting cash flows on both a short-term and long-term basis. Cash payments for claims were $2.7 billion, $2.8 billion and $2.5 billion in the years ended December 31, 2020, 2019, and 2018, respectively. Historically, we have funded claim payments from cash flow from operations (principally premiums), net of amounts ceded to our third-party reinsurers. We presently expect to maintain sufficient cash flow from operations to meet our anticipated claim obligations and operating and capital expenditure needs. Our cash, and cash equivalents (including restricted cash), and total investments increased from $4.5 billion at December 31, 2018 to $5.0 billion at December 31, 2019, and increased to $5.7 billion at December 31, 2020. We do not anticipate selling securities in our investment portfolio to pay claims or to fund operating expenses. Should circumstances arise that would require us to do so, we may incur losses on such sales, which would adversely affect our results of operations and financial condition and could reduce investment income in future periods.

We file a consolidated Federal income tax return and participate in a Federal income tax allocation agreement with our subsidiaries. Under the tax allocation agreement, each subsidiary computes and pays to the Company its respective share of the federal income tax liability primarily based on separate return calculations. The Reciprocal Exchanges are not a party to the tax allocation agreement and file separate tax returns.

The following table is a summary of our statement of cash flows:

	Year Ended December 31,
	2020		2019		Change		% Change
	(amounts in thousands)
Net cash provided by operating activities	$	600,070	$	521,611	$	78,459	15.0	%
Net cash provided by (used in) investing activities	14,188		(498,251)		512,439		(102.8)	%
Net cash used in financing activities	(78,954)		(89,361)		10,407		(11.6)	%
Effect of exchange rate changes on cash and cash equivalents	—		(3,119)		3,119		(100.0)	%
Net increase (decrease) in cash, cash equivalents, and restricted cash	$	535,304	$	(69,120)	$	604,424	(874.5)	%

Comparison of Years Ended December 31, 2020, and 2019

Net cash provided by operating activities increased by $78.5 million, primarily due to lower prepaid reinsurance premiums in 2020 compared to 2019.

Net cash provided by investing activities increased by $512.4 million, primarily due to lower purchases of investments in 2020 compared to 2019.

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Net cash used in financing activities decreased by $10.4 million, primarily due to lower repayments of debt in 2020 compared to 2019.

Reinsurance

We utilize various excess of loss, quota share, state-based industry pools or facilities, and catastrophe reinsurance programs to limit our exposure. Reinsurance agreements transfer portions of our underlying risk on the business we write. Reinsurance does not discharge or diminish our obligation to pay claims covered by the insurance policies we issue; however, it does permit us to recover certain incurred losses from our reinsurers and our reinsurance recoveries reduce the maximum loss that we may incur as a result of a covered loss event. We believe it is important to ensure that our reinsurance partners are financially strong and they generally carry at least an A.M. Best rating of “A-” (Excellent) or the reinsurance recoverable balances are collateralized. The total amount, cost and limits relating to the reinsurance coverage we purchase may vary from year to year based upon a variety of factors, including the availability of quality reinsurance at an acceptable price and the level of risk that we choose to retain for our own account.

We assume and cede insurance risks under various reinsurance agreements, on both a pro rata basis and an excess of loss basis. We purchase reinsurance to mitigate the volatility of direct and assumed business, which may be caused by the aggregate value or the concentration of written exposures in a particular geographic area or business segment and may arise from catastrophes or other large loss events.

For more information about our reinsurance agreements, see Note 10 “Reinsurance” in the notes to our consolidated financial statements.

Debt

6.75% Notes due 2024

We have $350.0 million aggregate principal amount outstanding of our 6.75% Notes due 2024 (the “6.75% Notes”). The 6.75% Notes bear interest at a rate equal to 6.75% per year, payable semiannually in arrears on May 15 and November 15 of each year. The 6.75% Notes are our general unsecured obligations and rank equally in right of payment with our other existing and future senior unsecured indebtedness and senior in right of payment to any of our indebtedness that is contractually subordinated to the 6.75% Notes. The 6.75% Notes mature on May 15, 2024, unless earlier redeemed or purchased by us. Interest expense on the 6.75% Notes was $23.6 million for each of the years ended December 31, 2020, 2019, and 2018.

7.625% Subordinated Notes due 2055

We had $100.0 million aggregate principal amount outstanding of our 7.625% subordinated notes due 2055 (the “7.625% Notes”). The 7.625% Notes bore interest at a rate equal to 7.625% per year, payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year. The 7.625% Notes were our subordinated unsecured obligations and were structurally subordinated to all existing and future indebtedness, liabilities and other obligations of our subsidiaries. The 7.625% Notes had a maturity date of September 15, 2055, unless earlier redeemed or purchased by us. Interest expense on the 7.625% Notes was $7.6 million for each of the years ended December 31, 2020, 2019, and 2018. On February 3, 2021, the 7.625% Notes were redeemed in full and ceased to be outstanding.

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Subordinated Debentures

We have junior subordinated debentures (the “Subordinated Debentures”) relating to the issuance of trust preferred securities. The Subordinated Debentures require interest-only payments to be made on a quarterly basis, with principal due at maturity. The Subordinated Debentures’ principal amounts of $41.2 million and $30.9 million mature in 2035 and 2037, respectively, and bear interest at an annual rate equal to LIBOR plus 3.40% and LIBOR plus 4.25%, respectively. The Subordinated Debentures are redeemable by us at a redemption price equal to 100% of their principal amount. Interest expense on the Subordinated Debentures for the years ended December 31, 2020, 2019, and 2018, was $3.3 million, $4.5 million and $4.3 million, respectively. The Subordinated Debentures have been called for redemption and are expected to be redeemed in full on March 15, 2021.

Revolving Credit Agreement

In 2019, we refinanced our existing credit agreement and entered into a new credit agreement (the “2019 Credit Agreement”), with JPMorgan Chase Bank, N.A., as Administrative Agent, KeyBank National Association and Fifth Third Bank, as Co-Syndication Agents, and the various lending institutions party thereto. The 2019 Credit Agreement was a $340.0 million base revolving credit facility with a letter of credit sub-limit of $150.0 million and an expansion feature of up to $50.0 million. Borrowings under the 2019 Credit Agreement bore interest at either the Alternate Base Rate (“ABR”) or the LIBOR rate. ABR borrowings under the 2019 Credit Agreement bore interest at the greatest of (a) the prime rate in effect on such day, (b) the federal funds effective rate on such day plus 0.5 percent or (c) the adjusted LIBOR rate for a one-month interest period on such day plus 1 percent. Eurodollar borrowings under the 2019 Credit Agreement bore interest at the adjusted LIBOR rate plus the Eurodollar spread for the interest period in effect. Fees payable by us under the 2019 Credit Agreement included a letter of credit participation fee, a letter of credit fronting fee with respect to each letter of credit (0.125%) and a commitment fee on the available commitments of the lenders (a range of 0.175% to 0.25% based on our consolidated leverage ratio; and as of December 31, 2020, the rate was 0.225%). The 2019 Credit Agreement had a maturity date of February 25, 2023. On January 4, 2021, the 2019 Credit Agreement was repaid and terminated in connection with the closing of the Merger.

For more information about our debt, including other outstanding debt, debt repayments, ranking and restrictive covenants, refer to Note 11, “Debt” in the notes to our consolidated financial statements.

Preferred Stock

For information about our preferred stock, refer to Note 14, “Stockholders’ Equity” in the notes to our consolidated financial statements.

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Contractual Obligations and Commitments

The following table sets forth certain of our contractual obligations as of December 31, 2020:

	Payment Due by Period
	Total		Less than 1 Year		1 – 3 Years		3 – 5 Years		More than 5 Years
	(amounts in thousands)
Loss and LAE reserves(1)	$	2,889,098	$	1,502,528	$	760,554	$	233,669	$	392,347
Debt and interest(2)(3)	790,863		270,561		53,076		364,612		102,614
Operating leases	136,091		31,525		49,049		33,295		22,222
Finance lease obligations	18,530		6,601		7,016		2,520		2,393
Employment agreement obligations	9,322		4,672		3,877		773		—
Contributions to partnerships	9,973		2,579		3,930		1,569		1,895
Total	$	3,853,877	$	1,818,466	$	877,502	$	636,438	$	521,471

(1)The loss and LAE payments due by period in the table above are based upon the loss and LAE estimates as of December 31, 2020, and actuarial estimates of expected payout patterns and are not contractual liabilities with finite maturities. Our contractual liability is to provide benefits under the policy. As a result, our calculation of loss and LAE payments due by period is subject to the same uncertainties associated with determining the level of loss and LAE generally and to the additional uncertainties arising from the difficulty of predicting when claims (including claims that have not yet been reported to us) will be paid. For a discussion of our loss and LAE estimate process, see Item 1, “Business - Loss Reserves.” Actual payments of loss and LAE by period will vary, perhaps materially, from the table above to the extent that current estimates of loss and LAE vary from actual ultimate claims amounts and as a result of variations between expected and actual payout patterns. See Item 1A, “Risk Factors - Risks Relating to Our Business - If we are unable to establish and maintain accurate loss reserves, our business, financial condition and results of operations may be materially adversely affected” for a discussion of the uncertainties associated with estimating loss and LAE.

(2) On January 4, 2021, the 2019 Credit Agreement was repaid, and on February 3, 2021, the 7.625% Notes were repaid. Repayments of principal amounts and interest are included in the less than 1 year column.

(3) The interest related to our debt by period as of December 31, 2020, was as follows: $27.4 million - less than 1 year, $53.1 million - 1 - 3 years, $14.6 million - 3 - 5 years, and $30.4 million - more than 5 years.

Inflation

We establish the pricing for insurance premiums before we know the amount of losses and LAE or the extent to which inflation may affect such amounts. We also attempt to anticipate the potential impact of inflation in establishing our reserves, especially as it relates to medical and hospital rates where historical inflation rates have exceeded the general level of inflation. Inflation above of the levels we have assumed could cause loss and LAE to be higher than we anticipated, which would require us to increase reserves and reduce earnings. Fluctuations in rates of inflation also influence interest rates, which in turn impact the market value of our investment portfolio and yields on new investments. Operating expenses, including salaries and benefits, are also usually affected by inflation.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Liquidity Risk. Liquidity risk represents our potential inability to meet all payment obligations when they become due. We maintain sufficient cash and marketable securities to fund claim payments and operations. We purchase reinsurance coverage to mitigate the risk of an unexpected rise in claims severity or frequency from catastrophic events or a single large loss. The availability, amount, and cost of reinsurance depend on market conditions and may vary significantly.

Credit Risk. Credit risk is the potential loss arising principally from adverse changes in the financial condition of the issuers of our debt securities and the financial condition of our reinsurers.

We address the credit risk related to the issuers of our debt securities by investing primarily in debt securities that are rated “BBB-” or higher by Standard & Poor’s. We also monitor the financial condition of all issuers of our debt securities. To limit our risk exposure, we employ diversification policies that limit the credit exposure to any single issuer or business sector.

We are subject to credit risk with respect to our reinsurers. Although our reinsurers are obligated to reimburse us to the extent we cede risk to them, we are ultimately liable to our policyholders on all risks we have ceded. As a result, reinsurance contracts do not limit our ultimate obligations to pay claims covered under the insurance policies we issue and we might not collect amounts recoverable from our reinsurers. We address this credit risk by selecting reinsurers that generally carry at least an A.M. Best rating of “A-” (Excellent) or the reinsurance recoverable balances are collateralized by performing, along with our reinsurance broker, periodic credit reviews of our reinsurers. If one of our reinsurers suffers a credit downgrade, we may consider various options to lessen the risk of asset impairment, including commutation, novation and letters of credit.

Market Risk. Market risk is the risk of potential economic loss principally arising from adverse changes in the fair value of financial instruments. The major components of market risk affecting us are interest rate risk and equity price risk.

Interest Rate Risk. We had debt securities with a fair value of $4.5 billion as of December 31, 2020, that are subject to interest rate risk. Interest rate risk is the risk that we may incur losses due to adverse changes in interest rates. Fluctuations in interest rates have a direct impact on the market valuation of our debt securities.

We manage our exposure to interest rate risk through a disciplined asset and liability matching and capital management process. In the management of this risk, the characteristics of duration, credit, and variability of cash flows are critical elements. These risks are assessed regularly and balanced within the context of our liability and capital position.

The table below summarizes the interest rate risk by illustrating the sensitivity of the fair value and carrying value of our debt securities as of December 31, 2020, to selected hypothetical changes in interest rates, and the associated impact on our stockholders’ equity. We anticipate that we will continue to meet our obligations out of income. We classify our debt securities primarily as available-for-sale. Temporary changes in the fair value of our debt securities impact the carrying value of these securities and are reported in our stockholders’ equity as a component of accumulated other comprehensive income, net of tax.

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The selected scenarios with our debt securities in the table below are not predictions of future events, but rather are intended to illustrate the effect such events may have on the fair value and carrying value of our debt securities and on our stockholders’ equity, each as of December 31, 2020.

Hypothetical Change in Interest Rates	Fair Value		Estimated Change in Fair Value		Hypothetical Percentage Increase (Decrease) in Stockholders’ Equity
	(amounts in thousands)
200 basis point increase	$	4,153,594	$	(343,536)	(8.4)	%
100 basis point increase	4,325,340		(171,790)		(4.2)
No change	4,497,130		—		—
100 basis point decrease	4,648,953		151,823		3.7
200 basis point decrease	4,713,487		216,357		5.3

Changes in interest rates would affect the fair market value of our fixed-rate debt instruments but would not have an impact on our earnings or cash flow. As of December 31, 2020, we had $662.2 million principal amount of debt instruments (excluding finance lease and other liabilities), of which $450.0 million were fixed-rate debt instruments. A fluctuation of 100 basis points in interest on our variable-rate debt instruments (excluding our credit facility which was repaid on January 4, 2021), which are tied to LIBOR, would affect our earnings and cash flows by $0.7 million before income tax, on an annual basis, but would not affect the fair market value of the variable-rate debt.

Item 8. Financial Statements and Supplementary Data

The financial statements and financial statement schedules required to be filed pursuant to this Item 8 are listed in the accompanying Index to Consolidated Financial Statements and Schedules at page F-1 and are filed as part of this report.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

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Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer (“CEO”) and chief financial officer (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)), as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our CEO and CFO have concluded that as of December 31, 2020, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”) and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on the assessment, management has concluded that its internal control over financial reporting was effective as of December 31, 2020, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP. Our independent registered public accounting firm, Ernst & Young LLP, has issued an audit report with respect to our internal control over financial reporting.

Changes in Internal Control

There were no changes in our internal control over financial reporting identified in Management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the fourth quarter of 2020 that materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures and Internal Control over Financial Reporting

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of

National General Holdings Corp.:

Opinion on Internal Control over Financial Reporting

We have audited National General Holdings Corp.’s internal control over financial reporting as of December 31, 2020, 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). In our opinion, National General Holdings Corp. (the “Company”) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of National General Holdings Corp. as of December 31, 2020 and 2019, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and the financial statement schedules listed in the Index at Item 15(a), and our report dated February 26, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s 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 are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. 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.

Definition and Limitations of Internal Control Over Financial Reporting

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.

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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.

/s/ Ernst & Young LLP

New York, New York

February 26, 2021

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Item 9B. Other Information

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors

During 2020, our board of directors consisted of eight members: Dr. Barbara Paris and Messrs. Donald T. DeCarlo, Patrick Fallon, Barry Karfunkel, Robert Karfunkel, John Marshaleck, John D. Nichols, Jr., and Barry D. Zyskind. Effective January 4, 2021, upon the closing of the Merger, each of Messrs. Barry Karfunkel, Robert Karfunkel and Barry D. Zyskind resigned as directors of the Company. Following the closing of the Merger and the effectiveness of the Amendment to Company Charter on January 4, 2021, the board of directors of the Company increased its size, in accordance with the Company Charter, as amended, and the Company Bylaws, to be comprised of 16 members, and each of Mr. Thomas J. Wilson, Ms. Carolyn D. Blair, Ms. Elizabeth A. Brady, Mr. Don Civgin, Mr. John E. Dugenske, Ms. Rhonda S. Ferguson, Mr. Suren Gupta, Mr. Jesse E. Merten, Mr. Mark Q. Prindiville, Mr. Mario Rizzo and Mr. Glenn T. Shapiro were appointed as directors of the Company to fill in the vacancies created by the board size increase and the resignations described above. Mr. Wilson was also appointed as Chairman of the Board, succeeding Messrs. Barry Karfunkel and Robert Karfunkel, who each served as Co-Chairman of the Board until their resignations as directors on January 4, 2021.

The following is biographical information about each of our current directors, including other public company board memberships. Age and other information in each director’s biography are as of February 26, 2021.

Donald T. DeCarlo, 82, has served on our board of directors since 2010. He is also a director of AmTrust Financial Services, Inc. (“AmTrust”) and many of its subsidiaries, where he has served since 2006. Mr. DeCarlo is an attorney in private practice. Mr. DeCarlo served as the chairman of the board of commissioners of the New York State Insurance Fund from 2011 until October 2012 and served as a commissioner from 1997 through 2009. From 1994 to 1997, Mr. DeCarlo served as Vice President and General Counsel of Travelers Insurance Companies. From 1997 to 2004, Mr. DeCarlo practiced at the law firm of Lord, Bissell & Brook, LLP, where he served as managing partner of the New York office prior to his departure. He is also a director of Greater New York Mutual Insurance Company (an insurer that primarily underwrites large property coverages) and its subsidiaries, Greater New York Custom Insurance Company, Insurance Company of Greater New York, Strathmore Insurance Company and Gramercy Indemnity Company.

Mr. DeCarlo has been selected to serve on our board of directors because of his extensive experience in the insurance industry.

Patrick Fallon, 76, joined our board of directors in 2013. Mr. Fallon is a leading banking executive with extensive experience providing financial services for leading corporations. Mr. Fallon is currently a Managing Director and Chief Operating Officer of CSG Partners, a New York headquartered boutique investment banking firm, predominantly specializing in ESOP advisory work, which he joined in December 2013. Prior to that, Mr. Fallon was a consultant to Northfield Bank. From 2009 to 2012, Mr. Fallon was a founder of, and president-commercial markets for, First National Bank of New York. From 1973 to 2009, Mr. Fallon was a senior banker for JPMorgan Chase, where he served as senior vice president & managing director from 1991 to 2009 and was a regional head of banking relationships.

Mr. Fallon has been selected to serve on our board of directors because of his extensive experience as a banking executive, providing financial services to major corporations.

John Marshaleck, 69, joined our board of directors in 2016. He previously served as Chief Financial Officer of Maiden Holdings, Ltd., a Bermuda-based reinsurance company, from 2009 until 2014, when he retired. Prior to that role, he served as Chief Operating Officer and Secretary of Maiden Holdings, Ltd. From 1983 to 2008, Mr. Marshaleck served in several capacities with GMAC RE and its predecessors, including president, chief operating officer and chief financial officer.

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Mr. Marshaleck has been selected to serve on our board of directors because of his diverse and extensive insurance and accounting experience and because he qualifies as an “audit committee financial expert” within the meaning of Securities and Exchange Commission (“SEC”) regulations and applicable Nasdaq listing standards.

John “Jay” D. Nichols, Jr., 60, joined our board of directors in 2017. Mr. Nichols currently serves as Chairman of the Board of Directors of Protective Insurance Corporation (formerly Baldwin & Lyons, Inc.), a property and casualty insurer, where he also served as interim Chief Executive Officer from October 2018 to May 2019. He previously served as Chief Executive Officer of AXIS Re, a reinsurance company, from 2012 until 2017. Prior to that role, Mr. Nichols was the President of RenaissanceRe Ventures, Ltd., where he was responsible for business development and the management of RenaissanceRe’s Joint Ventures and Venture Capital business, which included responsibility for the formation of DaVinci Reinsurance, and Top Layer Reinsurance, as well as several sidecars and other ventures. He joined RenaissanceRe in 1995 and was President from 2001 to 2010. In addition, Mr. Nichols has held various positions at Hartford Steam Boiler, Monarch Capital and accounting firm Matson, Driscoll and D’Amico. He is also a director of Delaware North Companies, Brit Reinsurance Ltd. and Enhanze Reinsurance Ltd.

Mr. Nichols has been selected to serve on our board of directors because of his extensive global insurance and reinsurance background, and his management experience and knowledge.

Barbara Paris, M.D., 69, joined our board of directors in 2013. Since 2002, Dr. Paris has been the vice-chair, medicine and the director of the Division of Geriatrics at Maimonides Medical Center. Since 2003, she has also been a Clinical Professor of Geriatrics and Palliative Medicine at the Mount Sinai School of Medicine.

Dr. Paris has been selected to serve on our board of directors because she is an experienced senior physician who has served in many leadership roles and we believe her experience is beneficial to our Accident & Health (“A&H”) segment.

Thomas J. Wilson, 63, joined our board of directors in 2021. Mr. Wilson serves as Chairman of the Board (2008 to present), President (2005 to 2015 and 2018 to present) and Chief Executive Officer (2007 to present) of Allstate, a parent of the Company, and Allstate Insurance Company (“AIC”), an affiliate of the Company. He was previously a director of State Street Corporation from 2012 to 2017.

Mr. Wilson has been selected to serve on our board of directors because he has a deep understanding of the insurance business, as well as extensive business and board leadership experience.

Carolyn D. Blair, 52, joined our board of directors in 2021. Since 2019, Ms. Blair has served as Executive Vice President and Chief Human Resources Officer of AIC, an affiliate of the Company. Previously, she was President of Tartan Advisory Group, Inc. from 2018 to 2019, and Executive Vice President, Chief Human Resources & Communications Officer of Sun Life Financial from April 2014 to June 2018.

Ms. Blair has been selected to serve on our board of directors because she has over 25 years of experience in the financial services industry as well as a deep understanding of human capital management.

Elizabeth A. Brady, 56, joined our board of directors in 2021. Since 2020, Ms. Brady has served as Executive Vice President, Chief Marketing, Customer and Communications Officer of AIC, an affiliate of the Company. Previously, she was Executive Vice President and Chief Marketing, Innovation and Corporate Relations Officer of AIC from 2018 to 2020. Prior to that, she served as Senior Vice President, Global Brand Management of Kohler Co. from 2013 to 2018.

Ms. Brady has been selected to serve on our board of directors because she has been a proven leader in innovative retail marketing, brand strategies and creative solutions.

Don Civgin, 59, joined our board of directors in 2021. Since 2020, Mr. Civgin has served as Vice Chairman of Allstate, a parent of the Company, and AIC, an affiliate of the Company, as well as Chief Executive Officer,

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Protection Products and Services of AIC. Previously, he served as President, Service Businesses of AIC from 2018 to 2020, and President, Emerging Businesses of AIC from 2015 to 2018.

Mr. Civgin has been selected to serve on our board of directors because he has extensive experience in corporate finance, strategy and mergers and acquisitions.

John E. Dugenske, 54, joined our board of directors in 2021. Since 2020, Mr. Dugenske has served as President, Investments and Financial Products of AIC, an affiliate of the Company. Previously, he served as Executive Vice President and Chief Investment and Corporate Strategy Officer of AIC from 2018 to 2020, and as Executive Vice President and Chief Investment Officer of AIC from 2017 to 2018. Prior to that, he was Group Managing Director and Global Head of Fixed Income at UBS Global Asset Management from 2008 to 2017.

Mr. Dugenske has been selected to serve on our board of directors because he has an extensive financial services background and a deep understanding of the insurance business and investments.

Rhonda S. Ferguson, 51, joined our board of directors in 2021. Since November 2020, Ms. Ferguson has served as Executive Vice President, Chief Legal Officer, General Counsel, and Secretary of Allstate, a parent of the Company, and AIC, an affiliate of the Company. Previously, she served as Executive Vice President and General Counsel of Allstate and AIC from September 2020 to November 2020. Prior to that, Ms. Ferguson served as Executive Vice President, Chief Legal Officer and Corporate Secretary of Union Pacific Railroad from 2017 to 2020; Executive Vice President and Chief Legal Officer of Union Pacific Railroad from 2016 to 2017; and Vice President, Corporate Secretary and Chief Ethics Officer of FirstEnergy Corp. from 2007 to 2016.

Ms. Ferguson has been selected to serve on our board of directors because she has extensive leadership experience in legal and regulatory compliance.

Suren Gupta, 59, joined our board of directors in 2021. Since 2020, Mr. Gupta has served as Executive Vice President, Chief Information Technology and Enterprise Services Officer of AIC, an affiliate of the Company. Previously, he served as Executive Vice President, Enterprise Technology and Strategic Ventures of AIC from 2015 to 2020. He has also served as a director of Zions Bancorporation, National Association since 2015.

Mr. Gupta has been selected to serve on our board of directors because he has deep knowledge of technology, operations and business strategy.

Jess E. Merten, 46, joined our board of directors in 2021. Since 2020, Mr. Merten has served as President, Financial Products of AIC, an affiliate of the Company. Previously, he served as Executive Vice President and Chief Risk Officer of AIC from 2017 to 2020 and as Treasurer of Allstate, a parent of the Company, and AIC from 2015 to 2019.

Mr. Merten has been selected to serve on our board of directors because he has extensive experience overseeing corporate risk, liquidity management, capital sourcing and deployment and corporate financial planning and analysis.

Mark Q. Prindiville, 53, joined our board of directors in 2021. Since 2020, Mr. Prindiville has served as Executive Vice President and Chief Risk Officer of AIC, an affiliate of the Company. Previously, he served as Senior Vice President of AIC from 2016 to 2020 and as Vice President of AIC from 2011 to 2016.

Mr. Prindiville has been selected to serve on our board of directors because he has extensive experience in business analytics, economic forecasting, asset allocation and risk management.

Mario Rizzo, 54, joined our board of directors in 2021. Since 2018, Mr. Rizzo has served as Executive Vice President and Chief Financial Officer of Allstate, a parent of the Company, and AIC, an affiliate of the Company. Previously, he served as Senior Vice President and Chief Financial Officer, Allstate Personal Lines of AIC from 2015 to 2018.

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Mr. Rizzo has been selected to serve on our board of directors because he has a deep understanding of the insurance business, financial planning and capital management.

Glenn T. Shapiro, 55, joined our board of directors in 2021. Since 2020, Mr. Shapiro has served as President, Personal Property-Liability of AIC, an affiliate of the Company. Previously, he served as President, Allstate Personal Lines of AIC from 2018 to 2020 and Executive Vice President, Claims of AIC from 2016 to 2018. Prior to that, he served as Executive Vice President and Chief Claims Officer of Liberty Mutual Commercial Insurance from 2011 to 2016.

Mr. Shapiro has been selected to serve on our board of directors because he has 30 years of experience in the insurance industry and has held various senior leadership positions in strategy and operations.

Information About our Executive Officers

The table below sets forth the names, ages and positions of our executive officers as of February 26, 2021:

Name	Age	Position(s)
Barry Karfunkel	40	Chief Executive Officer
Michael Weiner	49	Executive Vice President, Chief Financial Officer and Treasurer
Peter Rendall	48	Executive Vice President, Chief Operating Officer
Jeffrey Weissmann	43	Executive Vice President, General Counsel and Secretary
Lawrence Moloney	58	Senior Vice President, Chief Accounting Officer and Controller

Set forth below are descriptions of the backgrounds of each of our executive officers.

Barry Karfunkel has served as Chief Executive Officer of the Company since April 2016. Mr. Karfunkel served as a director from 2010 to January 4, 2021 and co-chairman of the Board from May 2018 to January 4, 2021, having resigned from such positions upon the closing of the Merger. He also served as President of the Company from November 2015 to May 2018, a position that he previously held from 2010 through 2013 prior to the Company becoming a publicly listed company. He previously served as executive vice president and chief marketing officer of the Company from 2013 to 2015. He serves as an officer and director of many of our subsidiaries. From 2009 to 2010, he was a managing director with Maiden Capital Solutions and from 2007 to 2009 he was an analyst with AmTrust Capital Partners.

Michael Weiner joined the Company in 2010 as chief financial officer. He has also served as our treasurer since December 2019. Mr. Weiner also serves as an officer and director of many of our subsidiaries. From 2009 to 2010, Mr. Weiner was the global chief financial officer of Ally Financial’s GMAC Insurance unit. From 2008 to 2009, Mr. Weiner was at Cerberus Operations and Advisory Company as a member of the financial services team. Prior to his tenure at Cerberus, Mr. Weiner held a number of financial management positions with Citigroup. He joined Citigroup from KPMG LLP, and began his career at Bankers Trust Company.

Peter Rendall currently serves as chief operating officer of the Company. Mr. Rendall has served as chief operating officer since 2015 and previously served as treasurer from 2011 through February 2019. He joined the Company in 2010 as finance manager. Prior to that, Mr. Rendall held various financial and managerial positions at GMAC Insurance Group with respect to personal lines business since August 2002.

Jeffrey Weissmann, general counsel and secretary, joined the Company in 2011. Mr. Weissmann also serves as an officer and director of many of our subsidiaries. Prior to joining the Company, from 2003 to 2011 Mr. Weissmann practiced law at Cadwalader, Wickersham & Taft, LLP in the securities, mergers & acquisitions and corporate governance areas.

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Lawrence Moloney joined the Company in December 2016 as senior vice president, finance and has served as chief accounting officer since May 2017 and also as Controller since January 4, 2021. Prior to joining the Company, Mr. Moloney served as controller of AIG North America, a division of American International Group, Inc., from September 2014 to December 2016. Prior to that role, he served as deputy controller of AIG North America from May 2012 to September 2014. Before his tenure at AIG, Mr. Moloney held a number of financial management positions with Tokio Marine Management. He joined Tokio Marine from Deloitte where he began his career. Mr. Moloney holds the Certified Public Accountant (CPA) and Chartered Management Accountant (CMA) designations.

Robert Karfunkel, a named executive officer for our 2020 fiscal year, served as President of the Company from 2018 until his resignation effective January 15, 2021. Mr. Karfunkel served as a director from May 2016 to January 4, 2021 and co-chairman of the board from May 2018 to January 4, 2021, having resigned from such positions upon the closing of the Merger. Mr. Karfunkel previously served as Executive Vice President – Chief Marketing Officer from 2016 to 2018 and Executive Vice President – Strategy and Development from 2010 to 2016. From 2010 until the completion of our initial private placement in June 2013, he also served as a director of the Company. He also served as a director and president of many of our subsidiaries while employed by the Company.

Code of Business Conduct and Ethics

All directors, officers, and employees must act ethically at all times and in accordance with our Code of Business Conduct and Ethics. This Code satisfies the definition of “code of ethics” pursuant to the rules and regulations of the SEC and complies with the requirements of Nasdaq. Our Code of Business Conduct and Ethics is posted under the “Corporate Governance” tab on the Investor Relations section of our website (www.nationalgeneral.com). We intend to disclose any amendments or waivers to the Code of Business Conduct and Ethics on our website. Information included on our website is not part of this Form 10-K.

Corporate Governance

Procedures for Nominations to the Board of Directors

On January 4, 2021, as a result of the Merger, the Company became an indirect wholly owned subsidiary of Allstate and is no longer an independent company. Because the Company’s common stock is now wholly owned by Allstate, the Company’s board of directors no longer has a formal procedure for shareholders to recommend nominees to the Company’s board of directors.

Audit Committee

The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board has determined that each member of the Audit Committee meets the independence standards contained in the Nasdaq listing standards (which the Company was previously subject to) and the independence requirements contained in Rule 10A-3(b)(1) of the Exchange Act. In addition, the Board has determined that Mr. Marshaleck qualifies as an “audit committee financial expert” within the meaning of SEC regulations and the Nasdaq listing standards. The Chair of the Audit Committee is Mr. Marshaleck, and the other members of the Audit Committee are Mr. Fallon and Dr. Paris.

The Audit Committee oversees our auditing, accounting, financial reporting, internal audit and internal control functions, appoints our independent public accounting firm and approves its services and compensation. One of its functions is to assure that the independent public accountants have the freedom, cooperation and opportunity necessary to accomplish their functions. The Audit Committee also assures that appropriate action is taken on the recommendations of the independent public accountants. In carrying out its oversight of our independent public accounting firm, the Audit Committee, among other things, ensures the rotation of the lead (or coordinating) audit partner having primary responsibility for our audit and the audit partner responsible for reviewing our audits as required by law, and meets with the independent auditor prior to the audit to discuss the planning and staffing of the

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audit. The Audit Committee also communicates with our independent auditor on matters related to the conduct of our audit and any critical audit matters (CAM) identified by our independent auditor.

As part of its oversight responsibilities, the Audit Committee also discusses with management and the independent auditor any correspondence with regulators or governmental agencies and any published reports which raise material issues regarding the Company’s financial statements or accounting policies. The Committee also discusses with the Company’s General Counsel legal matters that may have a material impact on the Company’s financial statements or compliance policies. The Audit Committee also reviews and approves related-party transactions and conflicts of interest.

Our Audit Committee Charter, which describes all of the Audit Committee’s responsibilities, is posted under the “Corporate Governance” tab on the Investor Relations section of our website (www.nationalgeneral.com).

Item 11. Executive Compensation

Compensation Committee Report

Our Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussion, has recommended to the Board that the following Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.

February 26, 2021	Donald DeCarlo (Chairman)
	Patrick Fallon
	Jay Nichols

Compensation Discussion and Analysis

Overview

This Compensation Discussion and Analysis describes compensation awarded to, earned by or paid to our named executive officers with respect to 2020. Our named executive officers for 2020 are: (i) Barry Karfunkel (Chief Executive Officer); (ii) Michael Weiner (Chief Financial Officer and Treasurer); (iii) Robert Karfunkel (former President); (iv) Peter Rendall (Chief Operating Officer); and (v) Jeffrey Weissmann (General Counsel & Secretary). This Compensation Discussion and Analysis provides a detailed review of the Company’s executive compensation program, including its philosophy and objectives, design, process, elements and determination of awards.

The Company’s executive compensation program is designed to attract and retain skilled executives to drive the Company’s strategic plan and lead to greater long-term shareholder value. In 2020, the Compensation Committee continued its approach to emphasize performance-based measures and targets for the named executive officers in accordance with the revised compensation program implemented in recent years. The Committee retained Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant to assist with the design and implementation of the 2020 annual incentive plan, based on objective financial metrics to measure performance and payouts.

At our 2020 Annual Meeting of Shareholders, we held our triennial shareholder advisory vote on the compensation of our named executive officers, referred to as a “say on pay” vote. In that vote, shareholders approved the compensation of our named executive officers, with approximately 99% of the shares voted being voted in favor of our executive compensation program.

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Compensation Philosophy and Objectives

Our approach to compensation is based upon a pay-for-performance philosophy. Our executive compensation program is designed to attract, retain and motivate executives with the skills necessary to achieve our business objectives, to reward those individuals for individual performance and to align their compensation with our Company’s performance. The Company seeks to establish and maintain a performance-driven culture that delivers exceptional value to its shareholders, and to reward individuals who fit that culture and reflect the Company’s core values. The Compensation Committee is committed to providing performance-based rewards that are tied to the execution of our business strategy, as measured by operating and financial metrics, execution of management initiatives and shareholder value creation. To align executives’ and shareholders’ interests, the Compensation Committee historically awarded a larger portion of the annual incentive awards in equity. The Company’s executive compensation program is intended to be competitive with the programs of other employers in the industry with whom we compete for talent.

Our Compensation Process

Compensation Committee. Our Compensation Committee, composed solely of independent directors, is responsible for making all executive compensation determinations with respect to our named executive officers. The Compensation Committee, working with our senior management and our independent compensation consultant, develops and implements the Company’s executive compensation program and policies.

The Compensation Committee conducts its annual review of executive performance and compensation in the first quarter of each year.

The Compensation Committee makes incentive compensation decisions based on the Company’s prior year performance, makes prospective adjustments, if any, to base salaries and target bonuses for the then-current year, and grants equity-based awards with multi-year vesting terms. This process includes a review of the performance of the Company and of each named executive officer against pre-established goals, the executive’s duties, responsibilities and experience, his or her personal contribution to the Company’s success, and, on a periodic basis, a comparison of each named executive officer’s compensation to market data for executives in similar positions at peer companies of the Company.

The Compensation Committee may also make compensation adjustments during the course of the year if circumstances are appropriate, such as when an individual is promoted or takes on additional responsibilities. Equity-based awards may also be made to individuals at any time during the year, as the Compensation Committee deems appropriate.

We believe that the compensation levels for our named executive officers are competitive and do not encourage them to take unnecessary or excessive risks.

Management. On an annual basis, our CEO presents performance assessments to the Compensation Committee with respect to each member of the Company’s senior management team, excluding himself, including recommendations for compensation decisions for prior year performance as well as prospective adjustments to compensation targets going forward.

Compensation Consultant. The Compensation Committee has engaged Meridian to serve as its independent compensation consultant. Meridian has been engaged to provide on a periodic basis, among other things, competitive benchmarking assessments of the executive compensation program, peer group analysis and selection, pay program analytics, advice on short- and long-term incentive plan design and appropriate performance measures, and any other executive compensation and governance matters for which the Compensation Committee requests assistance from time to time. Meridian advises the Compensation Committee directly, but it also works closely with management to ensure a collaborative process in implementation of an effective executive compensation program.

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Peer Group. With Meridian’s assistance, the Compensation Committee previously selected an appropriate group of peer companies for the purpose of comparing our executive compensation program with market practices and in order to inform the Compensation Committee’s decisions regarding its executive compensation program. However, the Compensation Committee does not ultimately target or benchmark compensation to any particular percentile of compensation paid by other companies, but rather considers comparator compensation as just one factor in making its compensation decisions. Other factors include Company performance and the individual’s contribution, experience and potential. After taking all these factors into account, the Compensation Committee exercises its judgment in making compensation decisions. We believe this approach gives the Company the flexibility to make compensation decisions based upon all relevant facts and circumstances.

The Company’s 2020 peer group remained unchanged from 2019 and consisted of 17 companies:

Company

Allied World Assurance Company

American National Insurance

Arch Capital Group Ltd.

Argo Group International Holdings, Ltd.

Aspen Insurance Holdings, Ltd.

CNO Financial Group Inc.

Endurance Specialty Holdings, Ltd.

First American Financial Corp

The Hanover Insurance Group, Inc.

Kemper Corp.

Mercury General Corp.

Primerica Inc.

RLI Corp.

Selective Insurance Group, Inc.

Globe Life Inc.

Validus Holdings, Ltd.

White Mountains Insurance Group Ltd.

The Compensation Committee, in consultation with Meridian, used several criteria in the selection of its peer group of companies, including company size, industry competitors, companies with talent overlap, companies with similar organizational structures and business complexity, peers of peers, company life-cycle and geographical considerations, and proxy advisory firm views.

Elements of Compensation

The primary elements of our 2020 executive compensation program are annual base salary, annual cash bonuses and equity incentives. The Compensation Committee historically assigned a heavier weight to the incentive portion of each named executive officer’s overall compensation reflecting the Committee’s belief that executive compensation should be aligned with the success of the Company and be risk-based depending upon the future performance of the Company. Set forth below is a summary of each component of the 2020 compensation opportunities for our CEO and our other named executive officers.

Base Salary. We use base salary to compensate our employees, including our named executive officers, for performing their day-to-day responsibilities. The Compensation Committee determines the base salary for each named executive officer in consideration of various factors, such as level of responsibility, prior experience, breadth of knowledge, the executive’s individual performance, achievements and contributions to the Company, and external pay practices. The Compensation Committee did not make any changes to the base salaries of the named executive

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officers for 2020, which were as follows: Barry Karfunkel, $925,000; Michael Weiner, $600,000; Robert Karfunkel, $900,000; Jeffrey Weissmann, $575,000, and Peter Rendall, $550,000.

Incentive Awards. Our annual incentive awards, which include a cash component and an equity component, are designed to motivate our employees, including our named executive officers, to drive various aspects of our business strategy. The equity portion of the incentive award is designed to not only reward named executive officers, but also to closely align their interests to those of our shareholders and to provide an additional incentive to promote our success and to remain in our service. Following the Merger, given that the Company’s common stock is now wholly owned by Allstate and the Company’s 2019 Equity Incentive Plan has been terminated, the Compensation Committee no longer has the ability to issue restricted stock units of the Company. Instead, the equity portion of the annual incentive plan for 2020 was handled by the Committee making a recommendation to Allstate to issue Allstate restricted stock units under the Allstate Equity Incentive Plan. The value of the RSUs reflected below for Mr. Weiner, Mr. Weissmann and Mr. Rendall reflect the value of the Allstate RSUs granted on February 18, 2021. No RSUs were issued to Mr. R. Karfunkel or to Mr. B. Karfunkel .

2020 Annual Incentive Plan. Our 2020 Annual Incentive Plan is designed to reward each named executive officer for his contributions to the Company’s annual performance. The 2020 Annual Incentive Plan uses operating earnings margin (25% weighting), combined ratio (25% weighting), operating return on equity (25% weighting) and gross premium written (25% weighting) as the performance metrics on which payouts are determined under this plan. The Compensation Committee maintains discretion to modify the actual payouts based on developments in the industry and in the market during the year, as well as based on the Committee’s assessment of the Company’s performance, the individual’s performance or any other factor that the Committee deems relevant. These are common metrics used to measure performance in the insurance industry and are indicative of an insurance company’s financial health. We believe achievement on these metrics will lead to an increase in long-term shareholder value. The performance metrics are defined as follows:

Operating Earnings Margin	Calculated as net income/loss attributable to the Company common stockholders excluding after-tax net gain or loss on investments (including foreign exchange gain or loss), other-than-temporary impairment losses before 2020 and credit loss on investments thereafter, earnings or losses of equity method investments (related parties), deferred tax asset impairment, non-cash amortization of intangible assets and non-cash impairment of goodwill and any significant non-recurring or infrequent items that may not be indicative of ongoing operations, and such number is then divided by the total revenue of the Company.
Combined Ratio	The sum of the loss and loss adjustment expense ratio and the operating expense ratio before amortization and impairment.
Operating Return on Equity (ROE)	Calculated by dividing annual operating earnings by the average of stockholders’ equity for the periods presented.
Gross Premium Written	Calculated as the premium from each insurance policy that the Company writes, during a reporting period based on the effective date of the individual policy, prior to ceding reinsurance to third parties.

The threshold, target and maximum performance levels for each performance measure are set by the Compensation Committee in consideration of, among other things, our strategic goals, business plans and the degree of difficulty in achieving the targets. It is the goal of the Compensation Committee to establish targets that can be achieved, but only with strong execution on our business strategy. The Compensation Committee considers reaching the maximum performance for each measure to be far less probable than reaching target performance levels. The performance goals (including threshold, target and maximum levels) established by the Compensation Committee for the 2020 fiscal year, as well as the actual performance levels achieved by the Company in 2020, were as follows:

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	Performance Measures
	Operating Earnings Margin		Combined Ratio		Operating ROE		Gross Premium Written			Total
	(amounts in millions, except percentages)
Maximum (200% payout)	10.0	%	90.0	%	13.0	%	$	5,701
Target (100% payout)	5.0	%	95.0	%	10.0	%	$	5,290
Threshold (50% payout)	—	%	100.0	%	7.0	%	$	4,879
Actual 2020 Performance	9.3	%	86.6	%	19.9	%	$	5,261
2020 Performance Score	187.0	%	200.0	%	200.0	%	96.0		%	170.7	%

The Committee approved the actual cash and recommended the equity incentive awards for each named executive officer for 2020 following careful consideration of the Company’s 2020 performance under the principles and performance metrics utilized under the 2020 Annual Incentive Plan (with such performance resulting in a payout percentage equal to 170.7% of the target as set forth above), as well as the individual performance of each named executive officer and the Company’s excellent operational year during the COVID-19 pandemic, each individual’s efforts in the Merger process and the value achieved for the Company’s stockholders.

Accordingly, the Compensation Committee determined to award the named executive officers 170.7% of their respective target awards. However, with respect to Messrs. B. Karfunkel and R. Karfunkel, such total payout percentage was only applied to the portion of the target award historically paid in cash. The target incentive value, total incentive payout percentage, and the portion of the 2020 incentive award of each named executive officer that is payable in cash and in equity, respectively, are as set forth in the table below:

	Total Incentive Payout			Incentive Payout Breakdown
Executive	Target		Total Payout Percentage	Portion Paid in Cash		Portion Paid in Equity (1)
Barry Karfunkel	$	3,056,000	170.7%	$	1,980,000	—
Michael Weiner	$	1,350,000	170.7%	$	1,014,000	$	1,289,962
Robert Karfunkel	$	2,700,000	170.7%	$	1,936,000	—
Jeffrey Weissmann	$	1,293,000	170.7%	$	950,000	$	1,258,963
Peter Rendall	$	1,182,000	170.7%	$	868,000	$	1,151,046

(1) Payable in restricted stock units of Allstate vesting over a three year period issued under The Allstate Corporation 2019 Equity Incentive Plan, subject to the terms and conditions of the plan.

Other Benefits and Perquisites. Our named executive officers are eligible to participate in all of our employee benefit plans, such as medical, dental, vision, group life, disability and our 401(k) savings plan (with a company contribution equal to up to six percent of salary, subject to certain limitations), in each case on the same basis as our other employees, subject to applicable law. Limited perquisites are provided to the named executive officers.

Employment Agreements

We have entered into an employment agreement with Mr. Weiner, which establishes his base salary level and certain bonus opportunity amounts or targets and includes termination payments in certain circumstances. None of our other named executive officers has (or had) an employment agreement. See “Employment Agreements with Executive Officers.”

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Policy on Hedging and Pledging of Company Stock

The Company does not have any practices or policies that prohibit hedging or pledging the Company’s equity securities by employees, executive officers or directors.

Tax and Accounting Considerations

The Tax Cuts and Jobs Act, which was enacted on December 22, 2017, includes a number of significant changes to Section 162(m) of the Internal Revenue Code (“Section 162(m)”), which generally apply to compensation that would have otherwise been deductible in 2018 and later fiscal years. The changes to Section 162(m) include the repeal of the qualified performance-based compensation exemption and the expansion of the definition of “covered employees” (for example, by including the CFO as a covered employee and causing the tax deductibility limitation of Section 162(m) to continue to apply to covered employees with respect to compensation paid after termination of employment). As a result of these changes, compensation paid to a covered employee generally is not deductible in 2018 or a later year, to the extent that it exceeds $1 million.

Executive Officer Compensation

Summary Compensation Table for Fiscal Year 2020

The following table sets forth information with respect to the annual and long-term compensation earned in fiscal years 2020, 2019, and 2018, by our named executive officers.

Name and Principal Position	Year	Salary		Bonus (1)		Stock Awards (2)		Option Awards		Non-Equity Incentive Plan Compensation (3)		All Other Compensation (4)		Total
Barry Karfunkel	2020	$	925,000	$	500	$	—	$	—	$	1,980,000	$	300	$	2,905,800
Chief Executive Officer	2019	925,000		—		2,911,000		—		1,771,000		270		5,607,270
	2018	925,000		—		3,088,000		—		1,879,000		270		5,892,270
Michael Weiner	2020	600,000		500		1,289,962		—		1,024,000		9,000		2,923,462
Executive Vice President,	2019	600,000		—		1,149,000		—		919,000		8,850		2,676,850
Chief Financial Officer and Treasurer	2018	600,000		—		1,219,000		—		975,000		8,700		2,802,700
Robert Karfunkel	2020	900,000		500		—		—		1,936,000		270		2,836,770
Former President	2019	900,000		—		2,399,000		—		1,738,000		270		5,037,270
	2018	900,000		—		2,545,000		—		1,843,000		240		5,288,240
Jeffrey Weissmann	2020	575,000		500		1,258,963		—		950,000		8,850		2,793,313
Executive Vice President,	2019	575,000		—		1,129,000		—		852,000		8,700		2,564,700
General Counsel & Secretary	2018	575,000		—		1,198,000		—		904,000		8,550		2,685,550
Peter Rendall	2020	550,000		500		1,151,046		—		868,000		9,000		2,578,546
Executive Vice President,	2019	550,000		—		1,033,000		—		778,000		8,850		2,369,850
Chief Operating Officer	2018	550,000		70,000		1,095,000		—		826,000		8,700		2,549,700

(1) Represents cash bonus of $500 paid to all employees during 2020.

(2) Represents the aggregate grant date fair value of awards of restricted stock units computed in accordance with ASC 718, as further discussed in Note 15, “Stock-Based Compensation” in the notes to our audited consolidated financial statements included in this Annual Report on Form 10-K . The grant date fair value of the awards granted to Mr. Weiner, Mr. Weissmann and Mr. Rendall with respect to 2020 performance is equal to $105.08, which is the closing price of Allstate’s common stock on February 18, 2021, multiplied by the number of restricted stock units awarded. The grant date fair value of the awards granted with respect to 2019 performance is equal to $21.52, which

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is the closing price at which our common stock traded on February 19, 2020, multiplied by the number of restricted stock units awarded to each named executive officer. The grant date fair value of the awards granted with respect to 2018 performance is equal to $25.60, which is the closing price at which our common stock traded on February 25, 2019, multiplied by the number of restricted stock units awarded to each named executive officer.

(3) Represents cash bonuses based on the Compensation Committee’s assessment of prior year performance.

(4) For all named executive officers, includes imputed income for personal life insurance. For each of Messrs. Weiner, Weissmann and Rendall, includes company contributions to the 401(k) plan for 2020 of $8,550.

Grants of Plan-Based Awards

The following table sets forth certain information regarding grants of plan-based awards to our named executive officers with respect to the fiscal year ended December 31, 2020.

Name	Grant Date	Approval Date	All other stock awards: number of shares of stock or units (1)	Grant date fair value of stock awards (2)
Barry Karfunkel	—	—	—	—
Michael Weiner	2/18/2021	2/18/2021	12,276	1,289,962
Robert Karfunkel	—	—	—	—
Jeffrey Weissmann	2/18/2021	2/18/2021	11,981	1,258,963
Peter Rendall	2/18/2021	2/18/2021	10,954	1,151,046

(1) The restricted stock units granted on February 18, 2021 vest ratably over three years until fully vested on February 18, 2024.

(2) This amount reflects the grant date fair value in accordance with FASB ASC 718. The grant date fair value of the awards granted with respect to 2020 is equal to $105.08, which is the price at which Allstate common stock closed on February 18, 2021, multiplied by the number of shares of restricted stock units awarded to each named executive officer.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth certain information regarding the outstanding equity awards at December 31, 2020, of our named executive officers.

	Option Awards					Stock Awards
Name	Number of securities underlying unexercised options exercisable(1)	Number of securities underlying unexercised options unexercisable	Option Exercise Price		Option Expiration Date	Number of shares or units of stock that have not vested (2)	Market value of shares or units of stock that have not vested (3)
Barry Karfunkel	743,500	—	$	10.50	6/6/2023	246,239	$	8,416,449
Michael Weiner	520,450	—	$	10.50	6/6/2023	95,690	3,270,684
Robert Karfunkel	743,500	—	$	10.50	6/6/2023	195,337	6,676,619
Jeffrey Weissmann	32,663	—	$	6.53	1/27/2022	93,981	3,212,271
	185,875	—	$	10.50	6/6/2023	—	—
Peter Rendall	—	—	—		—	83,546	2,855,602

(1) Each of the named executive officer’s options expiring in 2023 were granted on June 6, 2013 and vested ratably over four years, provided that 25% of the options vested on the first anniversary of the grant date and 6 1/4% of the options vested quarterly thereafter until the fourth anniversary of the grant date. Mr. Weissmann’s options, expiring in 2022, were granted on January 27, 2012 and vested ratably annually over five years until fully vested on January

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27, 2017. Upon the closing of the Merger on January 4, 2021, each named executive officer’s options were cancelled and converted into the right to receive $34.50, minus the exercise price per Common Share underlying such option.

(2) The restricted stock units granted on February 26, 2018, February 26, 2019 and February 20, 2020, which were subject to a three-year vesting schedule, were canceled upon the closing of the Merger on January 4, 2021 and converted into the right to receive $34.50.

(3) Amount is based on the closing price of our common stock of $34.18 on December 31, 2020, the last business day of the year, in accordance with applicable SEC rules.

Employment Agreements with Executive Officers

Employment Agreement with Michael Weiner

Pursuant to Mr. Weiner’s employment agreement, which was effective as of January 1, 2013, Mr. Weiner serves as chief financial officer of our subsidiary, National General Management Corp. (“Management Corp.”). Mr. Weiner’s employment agreement was renewed on January 1, 2021 and is in effect until January 1, 2023. The employment agreement automatically renews for additional two year periods unless 120 days’ notice of intention not to renew the employment agreement is given by us or Mr. Weiner. Mr. Weiner is eligible to receive a discretionary annual bonus, as determined based on his performance during such year and the recommendation of the chief executive officer.

Under his employment agreement, we are able to terminate Mr. Weiner at any time for “cause” as defined in the agreement and, upon such an event, we will have no further compensation or benefit obligations after the date of termination other than the payment of earned but unpaid base salary, earned but unused vacation and any unreimbursed expenses incurred as of the date of termination.

In the event of disability, we may terminate Mr. Weiner’s employment upon written notice and in the event of his death, Mr. Weiner’s employment will terminate, and in either case, Mr. Weiner (or his heirs) will be entitled to receive any earned but unpaid base salary, earned but unused vacation and any unreimbursed expenses incurred as of the date of termination.

In the event that we terminate Mr. Weiner without “cause” or he terminates his employment for “good reason,” as defined in his employment agreement, we will be required to pay Mr. Weiner severance (in accordance with normal payroll practices) at a per annum rate equal to the base salary in effect at the time of such termination for a period of 12 months following such termination, subject to receipt of an executed release of all claims and such release becoming effective under applicable law. Notwithstanding the foregoing, the obligation to pay full severance will terminate upon the parties’ mutual agreement to waive enforcement of the non-compete provision or upon Mr. Weiner’s commencement of new or alternative employment (including consulting arrangements), and the remaining severance obligation will be reduced by the base salary received from such new or alternative employment or consulting arrangement.

Mr. Weiner has agreed to keep confidential all information regarding Management Corp. and its affiliates (including the Company) that he receives during the term of his employment and thereafter. Mr. Weiner has also agreed that upon termination of employment he will not compete with us for a period of one year following the date of termination and will not solicit any of our customers, producers or employees for two years after termination.

In the event of a termination on account of a “Non-Compete Event,” as defined in the agreement, Mr. Weiner will not receive any severance, and the non-compete provision set forth in the employment agreement will not apply unless Management Corp. agrees to pay Mr. Weiner his base salary for the term of the non-compete period. In the event that Management Corp. does not renew Mr. Weiner’s employment agreement and Mr. Weiner’s employment is terminated more than 30 days after receiving notice of such non-renewal, Mr. Weiner will not receive any severance, and the non-compete provision set forth in the employment agreement will not apply unless Management Corp. agrees to pay Mr. Weiner his base salary for the term of the non-compete period. Mr. Weiner will also be

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entitled to receive any earned but unpaid base salary and any unreimbursed expenses incurred as of the date of termination.

Other Named Executive Officers

We are not currently a party to an employment agreement with any of Messrs. B. Karfunkel, Rendall or Weissmann.

Termination Payments Upon Termination or Change-in-Control.

The table below sets forth the potential payments to our named executive officers in the event of a change of control as well as under various termination scenarios. The potential payments assume that the termination event occurred on the last day of our fiscal year (December 31, 2020). Our named executive officers were entitled to these payments pursuant to the terms of our 2013 Plan and the 2019 Plan (which were terminated upon the closing of the Merger on January 4, 2021), and Mr. Weiner is entitled to payments pursuant to his employment agreement . We have assumed for purposes of the table that the Company will not exercise its discretionary right to cancel for a cash payment outstanding equity awards upon termination of employment. We have also assumed that in the event of an executive’s disability, the Company will not impose the non-competition restrictions on the executive and, as such, will not pay any severance.

Name	Termination Scenario (on 12/31/2020)	Severance		Equity Award Vesting Acceleration		Health Insurance Benefit
Barry Karfunkel	Without Cause/Good Reason	$	—	$	—	$	—
	Retirement	—		—		—
	Death or Disability(1)	—		3,959,810		—
	Change of Control(2)	—		4,623,494		—
Robert Karfunkel	Without Cause/Good Reason	—		—		—
	Retirement	—		—		—
	Death or Disability(1)	—		3,003,773		—
	Change of Control(2)	—		3,810,284		—
Michael Weiner	Without Cause/Good Reason	600,000		—		—
	Retirement	—		—		—
	Death or Disability(1)	—		1,511,554		—
	Change of Control(2)	—		1,824,939		—
Jeffrey Weissmann	Without Cause/Good Reason	—		—		—
	Retirement	—		—		—
	Death or Disability(1)	—		1,483,680		—
	Change of Control(2)	—		1,793,151		—
Peter Rendall	Without Cause/Good Reason	—		—		—
	Retirement	—		—		—
	Death or Disability(1)	—		1,274,487		—
	Change of Control(2)	—		1,640,674		—

(1) This amount includes the full vesting of restricted stock units that would have vested in the twelve months following the termination event in accordance with the named executive officers’ award agreements under the 2013 Plan and the 2019 Plan. The value of unvested restricted stock units reported in this table is calculated by multiplying the number of the unvested restricted stock units by $34.18, the closing market price of our common stock at December 31, 2020.

(2) Since the board of directors had discretion as of December 31, 2020 as to whether or not to accelerate the vesting of unvested stock options or restricted stock units granted under the 2013 Plan upon a change in control of the Company, the financial effect of such events has not been included in this table. The 2019 Plan provided that, upon a

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Change of Control (as defined in the 2019 Plan), the outstanding awards would vest and be settled as set forth in the 2019 Plan or as otherwise provided in the award agreement, unless such awards were assumed by the surviving entity or otherwise equitably converted or substituted in connection with the Change of Control.

2019 Omnibus Incentive Plan

Our board of directors and shareholders approved the 2019 Plan in 2019, which allowed for grants of equity awards, including incentive stock options, non-qualified stock options, performance shares, shares of restricted stock, unrestricted stock and restricted stock units to present and future officers, directors, employees and consultants of the Company or any subsidiary or affiliate. The aggregate number of shares of common stock for which awards may have been issued could not exceed 2.5 million shares, subject to the authority of the Company’s board of directors to adjust this amount in the event of a consolidation, reorganization, stock dividend, recapitalization or similar transaction affecting the Company’s common stock. The 2019 Plan served as a successor of the Company’s prior equity incentive plans. During 2020, outstanding awards under the prior plans continued to be outstanding and subject to their terms and conditions. Effective January 4, 2021, all outstanding equity awards under the Company’s equity plans, including the 2019 Plan were canceled in connection with the closing of the Merger in exchange for payment of the merger consideration and special pre-closing dividend in accordance with the terms of the Merger Agreement. Concurrent with the closing of the Merger, the Company’s equity plans were terminated.

Risk Assessment of Compensation Policies and Procedures

Our Compensation Committee has reviewed our material compensation policies and practices applicable to our employees, including our named executive officers, and concluded that these policies and practices do not create risks that are reasonably likely to have a material adverse effect on us.

Option Exercises and Stock Vested

The following table summarizes the exercise of stock options and the vesting of stock grants during 2020:

	Option Awards			Stock Awards
Name	Number of Shares Acquired on Exercise	Value Realized on Exercise (1)		Number of shares acquired on vesting	Value realized on vesting (2)
Barry Karfunkel	—	$	—	92,630	$	2,303,013
Michael Weiner	—	—		36,080	897,243
Robert Karfunkel	—	—		66,807	1,661,045
Jeffrey Weissmann	101,565	2,799,345		34,289	852,559
Peter Rendall	—	—		27,720	689,168

(1) The value realized on the exercise of options is the number of options exercised multiplied by the excess of the fair market value of the underlying shares on the date of exercise over the exercise price. Effective January 4, 2021, in connection with the closing of the Merger, all stock options were cancelled and converted into the right to receive $34.50, minus the exercise price per Common Share underlying such option.

(2) The value realized on the vesting of stock awards is the number of restricted stock units multiplied by the fair market value of stock, which means the closing price of the stock on the day immediately preceding the vesting date. Effective January 4, 2021, in connection with the closing of the Merger, all unvested restricted stock units were cancelled and converted into the right to receive $34.50 in cash per unit.

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Director Compensation

Our director compensation program is designed to attract and retain highly qualified directors and align their interests with those of our shareholders. We compensate directors who are not employed by the Company with a combination of cash and equity awards. During 2020, Barry Karfunkel, Robert Karfunkel, and Barry Zyskind did not receive any compensation for serving on our board of directors.

The Nominating and Corporate Governance Committee annually reviews the director compensation program and recommends proposed changes for approval by the Board. As part of this review, the Nominating and Corporate Governance Committee considers the significant amount of time expended and the skill level required by each director not employed by the Company in fulfilling his or her duties on the Board, each director’s role and involvement on the Board and its committees and the market compensation practices and levels of our peer companies.

For 2020, our director compensation program consisted of the following:

Annual Retainer (payable in quarterly increments)	$	80,000
Equity Award (subject to 1-year vesting schedule)	1,500 restricted stock units
Audit Committee Chair Supplemental Annual Retainer	$	20,000
Audit Committee Member Supplemental Annual Retainer	$	10,000
Compensation Committee Member Supplemental Annual Retainer	$	10,000
Nominating and Corporate Governance Member Supplemental Annual Retainer	$	5,000

All Board fees are paid pro rata in quarterly installments.

On April 29, 2020, each of our non-employee directors that were serving on that date received a grant of 1,500 restricted stock units under our 2019 Plan subject to a one-year vesting schedule, with full vesting on the first anniversary of the grant date. Under the terms of the awards, vested restricted stock units were to automatically convert to common stock on a one-for-one basis on the vesting date and all unvested restricted stock units were to be forfeited if the director resigned or was terminated from his or her position before the stock award vested. Effective January 4, 2021, in connection with the closing of the Merger, each non-employee director’s unvested restricted stock units were cancelled and converted into the right to receive $34.50 in cash per unit.

The following table sets forth compensation earned by our non-employee directors during the fiscal year ended December 31, 2020:

Name	Fees Earned or Paid in Cash		Stock Awards(1)		Total
Donald DeCarlo	$	95,000	$	26,970	$	121,970
Patrick Fallon	100,000		26,970		126,970
John Marshaleck	105,000		26,970		131,970
Jay Nichols	90,000		26,970		116,970
Barbara Paris, M.D.	90,000		26,970		116,970

(1) Reflects the grant date fair value of the restricted stock unit grant calculated in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718 (“ASC 718”) as discussed in Note 15 to our audited financial statements included in this Annual Report on Form 10-K . The grant date fair value of these awards is equal to the closing price of our common stock on the day prior to the date of grant ($17.98) multiplied by the number of restricted stock units awarded to each director. As of December 31, 2020, each of Messrs. DeCarlo, Fallon, Marshaleck and Nichols and Dr. Paris had 1,500 unvested restricted stock units. In addition, as of December 31, 2020, each of Messrs. DeCarlo and Fallon and Dr. Paris had 10,000 fully vested and exercisable option awards. Effective January 4, 2021, in connection with the closing of the Merger, each non-employee

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director’s unvested restricted stock units were cancelled and converted into the right to receive $34.50 in cash and their fully vested and exercisable option awards were cancelled and converted into the right to receive $34.50 in cash, minus the exercise price per Common Share underlying such option.

CEO Compensation Pay Ratio

The following pay ratio and supporting information compares the annual total compensation of our employees other than our CEO (including full-time, part-time, seasonal and temporary employees) and the annual total compensation of our CEO, as required by Section 953(b) of the Dodd-Frank Act. The pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.

For 2020, our last completed fiscal year:

•The median of the annual total compensation of all employees of our Company (other than our CEO) was $52,982; and

•The annual total compensation of our CEO, as reported in the Summary Compensation Table included in Item 11 of Part III of this Annual Report on Form 10-K, was $2,905,800.

Based on this information, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all other employees was 55 to 1.

To determine the pay ratio, we took the following steps:

We selected December 3, 2020 as the date on which to determine our median employee. As of that date, we had a total of 9,481 employees.

For purposes of identifying the median employee from the employee population base described above, we used wages, as compiled from our payroll records. We selected wages as a consistently applied compensation measure to identify our median employee, because base pay represents the principal form of compensation delivered to all of our employees. Once we identified our median employee for fiscal year 2020, such employee’s annual total compensation was calculated in accordance with Item 402(c)(2)(x) of Regulation S-K, as required pursuant to the SEC executive compensation disclosure rules.

Compensation Committee Interlocks and Insider Participation

During 2020, none of the Company’s executive officers served as a director of another entity, one of whose executive officers served on our Compensation Committee; and none of the Company’s executive officers served as a member of the compensation committee of another entity, one of whose executive officers served as a member of our Board.

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Equity Compensation Plan Information

The table below shows information regarding awards outstanding as of December 31, 2020, and shares of common stock that were available for issuance as of December 31, 2020, under our equity incentive plans.

Plan Category	Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1)	Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(2)		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Equity Compensation Plans Approved by Security Holders	3,753,927	$	10.28	1,912,935
Equity Compensation Plans Not Approved by Security Holders	—	—		—
Total	3,753,927	$	10.28	1,912,935

(1) Includes restricted stock unit awards outstanding as of December 31, 2020 that, upon vesting, provided the holder with the right to receive common shares on a one-to-one basis. For further discussion of these awards, see Note 15, “Stock-Based Compensation” in the notes to our consolidated financial statements.

(2) Only applies to outstanding options as of December 31, 2020, as restricted stock units did not have exercise prices.

On January 4, 2021, pursuant to the Merger Agreement, at the Effective Time (i) each outstanding option to purchase a Common Share, regardless of whether vested or unvested, was cancelled and converted into the right to receive $34.50 in cash, subject to any applicable tax withholdings, minus the exercise price per Common Share underlying such option and (ii) each restricted stock unit with respect to a Common Share which was outstanding as of the date the Merger Agreement, regardless of whether vested or unvested, was cancelled and converted into the right to receive $34.50 in cash, subject to any applicable tax withholdings. Upon the closing of the Merger, both the 2013 Plan and the 2019 Plan were terminated.

Security Ownership of Certain Beneficial Owners

On January 4, 2021, upon the completion of the Merger, we were acquired by Allstate through its directly wholly owned subsidiary, Allstate Insurance Holdings, LLC. Since the acquisition was completed, all of our common shares have been indirectly held by Allstate. The following table sets forth information with respect to the ownership of our common stock by Allstate as of February 1, 2021. Allstate, through its direct wholly owned subsidiary, has sole voting and investment power over our shares of common stock.

Name and Address	Amount and Nature of Beneficial Ownership	Percent of Class
Allstate Insurance Holdings, LLC(1)	100	100%
2775 Sanders Road Northbrook, IL 60062

(1) Allstate Insurance Holdings, LLC is a direct wholly owned subsidiary of The Allstate Corporation.

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Security Ownership of Directors and Executive Officers

The following table sets forth information with respect to common shares of The Allstate Corporation, the Company’s ultimate parent, beneficially owned as of February 1, 2021, by each director and named executive officer of the Company individually, and by all executive officers and directors of the Company as a group. Shares reported as beneficially owned include shares held indirectly through the Allstate 401(k) Savings Plan and other shares held indirectly. It also includes shares subject to stock options exercisable, and restricted stock units and performance stock awards subject to conversion into common shares, within sixty days of February 1, 2021. As of February 1, 2021, none of these shares were pledged as security. All of the directors and executive officers have sole voting and investment power over the shares of common stock listed or share voting and investment power with his or her spouse, except as otherwise provided below.

Name of Beneficial Owner	Amount and Nature of Beneficial Ownership of Allstate Common Stock	Common Stock Subject to Options Exercisable and Restricted Stock Units and Performance Stock Awards for which restrictions expire on or prior to April 2, 2021	Total Stock Based Ownership(1)	Percent of Class
Thomas J. Wilson	837,059	2,061,018	2,898,077	*
Carolyn D. Blair	213	9,334	9,547	*
Elizabeth A. Brady	180	40,363	40,543	*
Don Civgin	168,603	201,779	370,382	*
Donald DeCarlo	—	—	—	*
John E. Dugenske	46,759	184,913	231,672	*
Patrick Fallon	—	—	—	*
Rhonda S. Ferguson	—	—	—	*
Suren Gupta	58,479	348,461	406,940	*
John Marshaleck	—	—	—	*
Jesse E. Merten	14,288	57,767	72,055	*
Jay Nichols	—	—	—	*
Barbara Paris, M.D	—	—	—	*
Mark Q. Prindiville	8,177	55,683	63,860	*
Mario Rizzo	23,051	154,505	177,556	*
Glenn T. Shapiro	22,938	134,955	157,893	*
Barry Karfunkel	—	—	—	*
Michael Weiner	—	—	—	*
Jeffrey Weissmann	—	—	—	*
Peter Rendall	—	—	—	*
All executive officers and directors as a group (21 persons)	1,179,747	3,248,778	4,428,525	1.46%

*Less than one percent.

(1) These amounts are the sum of the number of shares shown in the prior columns.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Certain Relationships and Related Transactions

Effective on January 4, 2021, we completed our previously announced Merger with a wholly owned indirect subsidiary of Allstate and, as a result, Allstate now owns all of the Company’s outstanding common stock. Other than as stated below, since the beginning of fiscal year 2020, no director, executive officer or security holder who prior to the closing of the Merger on January 4, 2021, was known to us to own of record or beneficially more than five percent of our common securities, or any member of the immediate family of such director, executive officer or

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security holder, had or will have a direct or indirect material interest in a transaction or series of transactions in which we are, or one of our subsidiaries is, a party and the amount involved exceeds $120,000.

Our Audit Committee charter requires that all related party transactions be approved by our Audit Committee. In response to an annual questionnaire, we require directors, director nominees or appointees and executive officers to submit a description of any current or proposed related party transaction and provide updates during the year. In addition, prior to being acquired by The Allstate Corporation, we provided the Audit Committee any similar available information with respect to any known transactions with beneficial owners of 5% or more of our voting securities. If management becomes aware of any transactions during the year, management presents such transactions for approval by the Audit Committee. In the event management becomes aware of any transaction that was not approved under the policy, management will present the transaction to the Audit Committee for its action as soon as reasonably practicable, which may include termination, amendment or ratification of the transaction. The Audit Committee will approve only those transactions that are in, or are not inconsistent with, the best interests of National General Holdings Corp. and our shareholder, as is determined in good faith in accordance with its business judgment. Unless otherwise indicated below, each of these related party transactions was approved by our Audit Committee.

Other Related Party Transactions

Prior to being acquired by Allstate, the Company had a significant shareholder who, at all times during 2020, held, and continued to hold through the closing of the Merger on January 4, 2021, an ownership interest in each of AmTrust and ACP Re Holdings LLC (“ACP Re”). The Company provides services to and receives services from, or otherwise has additional relationships with, these formerly related entities. See Note 4, “Investments” and Note 16, “Related Party Transactions” in the notes to our consolidated financial statements.

Family Relationships

During 2020, Barry Karfunkel and Robert Karfunkel, brothers, were employed by the Company as chief executive officer and president, respectively. The compensation, perquisites and benefits provided to Barry Karfunkel and Robert Karfunkel in 2020 are disclosed in the “Summary Compensation Table” section of Item 11 of Part III of this Annual Report. Barry Karfunkel and Robert Karfunkel also served as co-chairmen of our board of directors during 2020 and resigned from such positions on January 4, 2021, in connection with the closing of the Merger. Effective January 15, 2021, Mr. Robert Karfunkel resigned as president of the Company. Mr. Barry Karfunkel continues to serve as chief executive officer of the Company.

Barry Zyskind, chairman and chief executive officer of AmTrust, served on our board of directors without remuneration in 2020 and resigned as director on January 4, 2021, in connection with the closing of the Merger. Mr. Zyskind is Barry Karfunkel and Robert Karfunkel’s brother-in-law.

Independence of Directors

During 2020, our common shares were listed on the Nasdaq Global Market and we therefore were subject to the Nasdaq listing standards. Although we delisted the common shares on January 4, 2021, in connection with the closing of the Merger, we remained subject to the Nasdaq listing standards due to the listing on Nasdaq of our Series A Preferred Stock, Depositary Shares representing Series B Preferred Stock, Depositary Shares representing Series C Preferred Stock and 2055 Subordinated Notes. Following the consummation of the Merger, we voluntarily redeemed the following securities effective February 3, 2021: (a) all outstanding shares of the Class A Preferred Stock, (b) all outstanding Depositary Shares and the underlying shares of the Class B Preferred Stock, and (c) the 2055 Notes. All outstanding Depositary Shares and the underlying shares of the Class C Preferred Stock were delisted from NASDAQ effective January 25, 2021. Despite no longer having any securities listed on Nasdaq or on any other exchange, we continue to apply the Nasdaq listing standards for determining the independence of our directors.

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In January 24, 2021, our board of directors determined that five of our eight directors then serving, Donald DeCarlo, Patrick Fallon, John Marshaleck, Jay Nichols, and Barbara Paris, were independent directors under the Nasdaq listing standards. During 2020, and until their resignations on January 24, 2021, three of our directors, Barry Karfunkel, Robert Karfunkel and Barry Zyskind, did not qualify as independent directors.

Following the closing of the Merger on January 24, 2021, and the subsequent increase in the size of our board of directors to sixteen members, our board of directors determined that the following five current members of our board of directors are independent under the Nasdaq listing standards: Mr. DeCarlo, Mr. Fallon, Mr. Marshaleck, Mr. Nichols, and Dr. Paris. Eleven of our current directors do not qualify as independent directors.

In accordance with the Nasdaq listing standards, all board committees were entirely independent during 2020, and remain independent as of the date hereof.

Item 14. Principal Accounting Fees and Services

Audit and Non-Audit Fees

Our Audit Committee approves the fees and other significant compensation to be paid to our independent auditors for the purpose of preparing or issuing an audit report or related work. Our Audit Committee also preapproves all auditing services and permitted non-audit services, including the fees and terms thereof, to be performed for us by our independent auditors, subject to the de minimis exceptions for non-audit services described in the Exchange Act.

Ernst & Young LLP (“E&Y”) served as our independent registered public accounting firm for the fiscal year ended December 31, 2020. Our Audit Committee reviewed and discussed with E&Y the following fees for services rendered for the 2020, and 2019, fiscal years and considered the compatibility of non-audit services with E&Y’s independence.

The following table presents the aggregate fees billed or expected to be billed for professional services rendered to us by E&Y for the 2020, and 2019, fiscal years. Other than as set forth below, no professional services were rendered or fees billed by E&Y or its international affiliates during the 2020, and 2019, fiscal years.

Ernst & Young LLP	2020		2019
Audit Fees (1)	$	5,550,000	$	7,239,400
Audit-Related Fees (2)	280,000		312,500
Tax Fees (3)	1,012,350		1,184,180
All Other Fees (4)	260,000		255,000
Total	$	7,102,350	$	8,991,080

(1) Audit fees relate to professional services rendered for: (i) the integrated audit of our annual financial statements and internal control over financial reporting, (ii) interim reports, (iii) comfort letters, (iv) acquisition work related to the audit, (v) audit of domestic and international statutory reports, and (vi) expenses incurred related to services performed.

(2) Audit-related fees relate to professional services rendered for: (i) benefit plan audits, (ii) the audits of service organization internal controls, and (iii) regulatory compliance services.

(3) Tax fees relate to professional services rendered for: tax compliance and consultation services.

(4) All other fees relate to professional services rendered for: actuarial services.

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Pre-Approval Policies and Procedures of the Audit Committee

Pursuant to its charter, the Audit Committee pre-approves all audit and permitted non-audit services, including engagement fees and terms thereof, to be performed for us by the independent auditors, subject to the exceptions for certain non-audit services approved by the Audit Committee prior to the completion of the audit in accordance with Section 10A of the Exchange Act. The Audit Committee must also pre-approve all internal control-related services to be provided by the independent auditors. The Audit Committee will generally pre-approve a list of specific services and categories of services, including audit, audit-related and other services, for the upcoming or current fiscal year, subject to a specified cost level. In addition, from time to time, we may want the independent auditors to perform additional permitted services that the Audit Committee must pre-approve before the independent auditors can proceed with providing such services. In doing this, the Audit Committee has established a procedure whereby a partner of our independent auditor, in conjunction with our Chief Financial Officer, will contact the Audit Committee Chairperson and obtain pre-approval (verbally or via email) for such services, to be followed (where appropriate) by a written engagement letter confirming such arrangements, signed by both our Chief Financial Officer and Audit Committee Chairperson. In addition, all audit and permissible non-audit services in excess of 5% over the pre-approved cost level must be separately pre-approved by the Audit Committee.

The Audit Committee may form and delegate to a subcommittee consisting of one or more members (provided that such person(s) are independent directors) its authority to grant pre-approvals of audit, permitted non-audit services and internal control-related services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)Documents filed as part of this report: The financial statements and financial schedules listed in the accompanying Index to Consolidated Financial Statements and Schedules are filed as part of this report. All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted.

(b)Schedules: See Item 15(a).

(c)Exhibits Index

Exhibit No.	Description
2.1**	Agreement and Plan of Merger, dated as of July 7, 2020 (by and among The Allstate Corporation, Bluebird Acquisition Corp. and National General Holdings Corp. (the “Company”) incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on July 8, 2020)
3.1	Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (No. 333-190454) filed on August 7, 2013)
3.2	Amendment No. 1 to the Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on January 4, 2021)
3.3	Second Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on January 4, 2021)
3.4	Certificate of Designations for 7.50% Non-Cumulative Preferred Stock, Series A (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on August 11, 2014)
3.5	Certificate of Designations of 7.50% Non-Cumulative Preferred Stock, Series B (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on March 27, 2015)
3.6	Certificate of Designations of 7.50% Non-Cumulative Preferred Stock, Series C (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on July 7, 2016)
3.7	Certificate of Designations of Fixed/Floating Rate Non-Cumulative Convertible Preferred Stock, Series D (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on July 9, 2018)
4.1	Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934
4.2	Form of Common Stock Certificate of the Company (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (No. 333-190454) filed on August 7, 2013)
4.3	Registration Rights Agreement, dated as of October 16, 2009, by and among the Company, The Michael Karfunkel 2005 Grantor Retained Annuity Trust, Michael Karfunkel and AmTrust International Insurance, Ltd., as assignee of AmTrust Financial Services, Inc. (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 (No. 333-190454) filed on August 7, 2013)
4.4	Form of Stock Certificate evidencing 7.50% Non-Cumulative Preferred Stock, Series A (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed on August 11, 2014)
4.5	Form of stock certificate evidencing 7.50% Non-Cumulative Preferred Stock, Series B (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on March 27, 2015)
4.6	Form of stock certificate evidencing 7.50% Non-Cumulative Preferred Stock, Series C (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on July 7, 2016)
4.7	Form of 6.750% Notes due 2024 (included as Exhibit A to Exhibit 4.10) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on May 28, 2014)
4.8	Form of 7.625% Subordinated Notes due 2055 (included as Exhibit A to Exhibit 4.11) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on August 18, 2015)
4.9	Indenture, dated as of May 23, 2014, by and between the Company, as Issuer, and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on May 28, 2014)
4.10	First Supplemental Indenture, dated as of May 23, 2014, by and between the Company, as Issuer, and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on May 28, 2014)

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Exhibit No.	Description
4.11	Second Supplemental Indenture, dated as of August 18, 2015, by and between the Company and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on August 18, 2015)
4.12	Third Supplemental Indenture, dated as of January 4, 2021, by and among the Company, The Allstate Corporation and the Bank of New York Mellon (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 4, 2021)
4.13	Deposit Agreement, dated March 27, 2015, among National General Holdings Corp., American Stock Transfer & Trust Company, LLC and the holders from time to time of the depositary receipts described therein (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 27, 2015)
4.14	Deposit Agreement, dated July 7, 2016, among National General Holdings Corp., American Stock Transfer & Trust Company, LLC and the holders from time to time of the depositary receipts described therein (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on July 7, 2016)
4.15	Form of depositary receipt (included as Exhibit A to Exhibit 4.12) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 27, 2015)
4.16	Form of depositary receipt (included as Exhibit A to Exhibit 4.13) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on July 7, 2016)
10.1*	National General Holdings Corp. 2019 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 6, 2019)
10.2*	Form of Non-Qualified Stock Option Agreement under the NGHC 2019 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on May 6, 2019)
10.3*	Form of Restricted Share Unit Agreement under the NGHC 2019 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on May 6, 2019)
10.4*	American Capital Acquisition Corporation 2010 Equity Incentive Plan (incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-1 (No. 333-190454) filed on August 7, 2013)
10.5*	Form of Statutory Time-Based Stock Option Agreement for the American Capital Acquisition Corporation 2010 Equity Incentive Plan (incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-1 (No. 333-190454) filed on August 7, 2013)
10.6*	Amendment to Form of Statutory Time-Based Stock Option Agreement for the American Capital Acquisition Corporation 2010 Equity Incentive Plan (incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-1 (No. 333-190454) filed on August 7, 2013)
10.7*	2013 Equity Incentive Plan (incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1 (No. 333-190454) filed on August 7, 2013)
10.8*	Form of Non-Qualified Stock Option Award Agreement for the NGHC 2013 Equity Incentive Plan (incorporated by reference to Exhibit 10.11 to the Company’s Registration Statement on Form S-1 (No. 333-190454) filed on August 7, 2013)
10.9*	Form of Incentive Stock Option Award Agreement for the NGHC 2013 Equity Incentive Plan (incorporated by reference to Exhibit 10.12 to the Company’s Registration Statement on Form S-1 (No. 333-190454) filed on August 7, 2013)
10.10*	Form of Restricted Stock Unit Agreement for the NGHC 2013 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed on August 11, 2014)
10.11*	Form of Indemnification Agreement for Directors and Certain Officers (incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-1 (No. 333-190454) filed on August 7, 2013)
10.12*	Employment Agreement, dated as of January 1, 2013, by and between National General Management Corp. and Michael Weiner (incorporated by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-1 (No. 333-190454) filed on August 7, 2013)
10.13	Credit Agreement, dated February 25, 2019, among the Company, JPMorgan Chase Bank, N.A., as Administrative Agent, KeyBank National Association and Fifth Third Bank as Co-Syndication Agents, and Associated Bank, National Association and The Bank of Nova Scotia, as Co-Documentation Agents, and the various lending institutions party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 25, 2019)
10.14	Amended and Restated Credit Agreement, dated September 20, 2016, among AmTrust Financial Services, Inc. as Administrative Agent, ACP Re Holdings, LLC, the Michael Karfunkel Family 2005 Trust, and AmTrust International Insurance, Ltd. and National General Re Ltd., as Lenders (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 21, 2016)

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Exhibit No.	Description
21.1	List of subsidiaries of the Company (filed herewith)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.1	Certification of Chief Executive Officer pursuant to 18 U.SC. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2	Certification of Chief Financial Officer pursuant to 18 U.SC. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (filed herewith)
101.SCH	Inline XBRL Taxonomy Extension Schema Document (filed herewith)
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith)
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith)
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith)
104	The Cover Page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, formatted in Inline XBRL contained in Exhibit 101.

*	Management contract or compensatory plan or arrangement.
**	Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K, The Company hereby undertakes to furnish supplementary copies of any of the omitted schedules upon request by the SEC.

Item 16. Form 10-K Summary

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date	NATIONAL GENERAL HOLDINGS CORP.
February 26, 2021	By:	/s/ Michael Weiner
		Name: Michael Weiner Title: Chief Financial Officer

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	Title	Date
/s/ Barry Karfunkel	Chief Executive Officer (Principal Executive Officer)	February 26, 2021
Barry Karfunkel
/s/ Michael Weiner	Chief Financial Officer (Principal Financial Officer)	February 26, 2021
Michael Weiner
/s/ Lawrence J. Moloney	Chief Accounting Officer (Principal Accounting Officer)	February 26, 2021
Lawrence J. Moloney
/s/ Donald DeCarlo	Director	February 26, 2021
Donald DeCarlo
/s/ Patrick Fallon	Director	February 26, 2021
Patrick Fallon
/s/ Barbara Paris	Director	February 26, 2021
Barbara Paris
/s/ John Marshaleck	Director	February 26, 2021
John Marshaleck
/s/ John Nichols	Director	February 26, 2021
John Nichols
/s/ Thomas J. Wilson	Chairman and Director	February 26, 2021
Thomas J. Wilson
/s/ Carolyn D. Blair	Director	February 26, 2021
Carolyn D. Blair

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Signature	Title	Date
/s/ Elizabeth A. Brady	Director	February 26, 2021
Elizabeth A. Brady
/s/ Don Civgin	Director	February 26, 2021
Don Civgin
/s/ John E. Dugenske	Director	February 26, 2021
John E. Dugenske
/s/ Rhonda S. Ferguson	Director	February 26, 2021
Rhonda S. Ferguson
/s/ Suren Gupta	Director	February 26, 2021
Suren Gupta
/s/ Jesse E. Merten	Director	February 26, 2021
Jesse E. Merten
/s/ Mark Q. Prindiville	Director	February 26, 2021
Mark Q. Prindiville
/s/ Mario Rizzo	Director	February 26, 2021
Mario Rizzo
/s/ Glenn T. Shapiro	Director	February 26, 2021
Glenn T. Shapiro

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NATIONAL GENERAL HOLDINGS CORP.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

	Page
Audited Annual Financial Statements
Report of Independent Registered Public Accounting Firm	2
Consolidated Balance Sheets as of December 31, 2020 and 2019	4
Consolidated Statements of Income for the years ended December 31, 2020, 2019 and 2018	6
Consolidated Statements of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018	7
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2020, 2019 and 2018	8
Consolidated Statements of Cash Flows for the years ended December 31, 20120, 2019 and 2018	10
Notes to the Consolidated Financial Statements	12
1. Organization	12
2. Significant Accounting Policies	12
3. Allowance for Expected Credit Losses	21
4. Investments	22
5. Fair Value of Financial Instruments	29
6. Deferred Acquisition Costs	33
7. Property and Equipment	33
8. Goodwill and Intangible Assets	34
9. Unpaid Losses and Loss Adjustment Expense Reserves	36
10. Reinsurance	50
11. Debt	54
12. Income Taxes	57
13. Commitments and Contingencies	61
14. Stockholders’ Equity	63
15. Stock-Based Compensation	67
16. Related Party Transactions	68
17. Benefits Plan	69
18. Statutory Financial Data, Risk-Based Capital and Dividend Restrictions	69
19. Earnings Per Share	72
20. Segment Information	73
21. Selected Quarterly Financial Data (Unaudited)	79
22. Subsequent Events	80
Schedules required to be filed under the provisions of Regulation S-X Article 7:
Summary of Investments — Other than Investments in Related Parties (Schedule I)	1
Condensed Financial Information of Registrant (Schedule II)	2
Supplementary Insurance Information (Schedule III)	6
Reinsurance (Schedule IV)	7
Supplemental Information Concerning Property-Casualty Insurance Operations (Schedule VI)	8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of

National General Holdings Corp.:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of National General Holdings Corp. (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and the financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, 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 26, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

F-2

Valuation of incurred but not reported reserves

Description of the Matter

At December 31, 2020, the Company’s unpaid loss and loss adjustment expense reserves were $2,889 million of which a significant portion is incurred but not reported reserves. As explained in Note 1 and 9 of the consolidated financial statements, the loss and loss adjustment expense reserves represent management’s estimate of the ultimate liability for claims that have been reported, claims that have been incurred but not reported, and expenses associated with processing and settling claims and anticipated salvage and subrogation. Incurred but not reported reserves includes a provision for claims that have occurred but have not yet been reported, as well as a provision for future development on reported claims. There is significant uncertainty inherent in determining management’s estimate of the ultimate cost of all claims that have occurred which is used to determine the incurred but not reported reserves. In particular, the estimate is sensitive to the selection and weighting of actuarial methodologies applied to project the ultimate costs and the selection of assumptions such as severity, frequency, and payment and reporting patterns that are used to determine loss factors and initial expected loss ratios. Auditing management’s estimate of incurred but not reported reserves was complex due to the highly judgmental nature of the significant assumptions used in the valuation of the estimate. The significant judgment was primarily due to the sensitivity of management’s estimate to the actuarial methods applied and the assumptions used in the determination of the loss factors and ultimate costs.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s incurred but not reported reserving process. This included, among others, controls over the review and approval processes that management has in place for the methods and assumptions used in estimating the incurred but not reported reserves.
To test the Company’s estimate of incurred but not reported reserves, our audit procedures included among others, the assistance of our actuarial specialists to evaluate the assumptions used in the actuarial methods, by comparing the significant assumptions, including severity, frequency, payment patterns and expected loss ratios to the Company’s historical experience. In addition, we evaluated the selection and the weighting of actuarial methods used by management considering the maturity of the accident periods, changes in case reserve levels and claims settlement patterns. We developed a range of reasonable reserve estimates which included performing independent projections for a sample of lines of business and compared the range of reserve estimates to the Company’s recorded reserves. We also performed a review of historical results of the development of the loss and loss adjustment expense reserves related to prior years.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2017.

New York, New York

February 26, 2021

F-3

NATIONAL GENERAL HOLDINGS CORP.

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Shares and Par Value per Share)

	December 31,
	2020		2019
ASSETS
Investments:
Debt securities, available-for-sale, at fair value (allowance for expected credit losses $0 - 2020) (Exchanges - $310,215 and $324,249; allowance for expected credit losses $0 - 2020)	$	4,497,130	$	4,476,358
Short-term investments (Exchanges - $26,887 and $5,245)	191,086		67,353
Other investments (related parties - $231,927 and $238,841)	281,055		311,287
Total investments	4,969,271		4,854,998
Cash and cash equivalents (Exchanges - $3,782 and $959)	662,772		135,942
Restricted cash and cash equivalents (Exchanges - $331 and $24)	36,995		28,521
Accrued investment income (related parties - $2,420 and $2,391) (Exchanges - $1,628 and $2,001)	27,803		30,927
Premiums and other receivables (net of allowance for expected credit losses $22,781 - 2020; net of bad debt allowance $24,067 - 2019) (Exchanges - $49,315 and $55,859; net of allowance for expected credit losses $1,165 - 2020; net of bad debt allowance $541 - 2019)	1,545,380		1,428,948
Deferred acquisition costs (Exchanges - $19,200 and $23,307)	285,905		263,523
Reinsurance recoverable (net of allowance for expected credit losses $810 - 2020) (Exchanges - $125,515 and $119,125; net of allowance for expected credit losses $174 - 2020)	1,218,930		1,394,308
Prepaid reinsurance premiums (Exchanges - $89,850 and $$105,894)	414,010		575,747
Property and equipment, net (Exchanges - $0 and $241)	377,683		403,827
Intangible assets, net (Exchanges - $3,045 and $3,225)	340,725		365,823
Goodwill	179,328		179,328
Prepaid and other assets (Exchanges - $3,564 and $3,521)	69,092		94,642
Total assets	$	10,127,894	$	9,756,534

See accompanying notes to consolidated financial statements.

F-4

NATIONAL GENERAL HOLDINGS CORP.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Shares and Par Value per Share)
	December 31,
	2020		2019
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Unpaid loss and loss adjustment expense reserves (Exchanges - $205,972 and $205,786)	$	2,889,098	$	2,886,414
Unearned premiums and other revenue (Exchanges - $207,088 and $252,553)	2,244,624		2,312,241
Reinsurance payable (Exchanges - $59,039 and $35,689)	363,531		562,844
Accounts payable and accrued expenses (Exchanges - $10,203 and $8,497)	377,662		315,366
Debt	676,810		686,006
Other liabilities (Exchanges - $19,639 and $30,803)	360,171		376,169
Total liabilities	$	6,911,896	$	7,139,040
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock, $0.01 par value - authorized 10,000,000 shares, issued and outstanding 2,565,120 shares - 2020 and 2019; Aggregate liquidation preference $450,000 - 2020 and 2019.	$	450,000	$	450,000
Common stock, $0.01 par value - authorized 150,000,000 shares, issued 114,044,126 and 113,368,811 shares - 2020 and 2019, outstanding 113,585,043 and 113,368,811 shares - 2020 and 2019.	1,140		1,134
Treasury stock, at cost - 459,083 shares - 2020	(8,482)		—
Additional paid-in capital	1,077,006		1,065,634
Accumulated other comprehensive income:
Unrealized foreign currency translation adjustment, net of tax	(443)		(202)
Unrealized gain on investments, net of tax	203,646		74,750
Total accumulated other comprehensive income	203,203		74,548
Retained earnings	1,514,296		1,058,138
Total National General Holdings Corp. stockholders’ equity	3,237,163		2,649,454
Noncontrolling interest	(21,165)		(31,960)
Total stockholders’ equity	$	3,215,998	$	2,617,494
Total liabilities and stockholders’ equity	$	10,127,894	$	9,756,534

See accompanying notes to consolidated financial statements.

F-5

NATIONAL GENERAL HOLDINGS CORP.

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Shares and Per Share Data)

	Year Ended December 31,
	2020		2019		2018
Revenues:
Net earned premium	$	4,494,620	$	4,118,042	$	3,732,202
Ceding commission income	152,457		238,453		224,697
Service and fee income	760,374		641,965		561,583
Net investment income	118,257		141,233		119,034
Net gain (loss) on investments	26,577		13,473		(29,545)
Other income	—		26,428		—
Total revenues	5,552,285		5,179,594		4,607,971
Expenses:
Loss and loss adjustment expense	2,824,082		2,854,468		2,662,226
Acquisition costs and other underwriting expenses	990,569		827,367		735,266
General and administrative expenses	1,043,193		1,041,772		938,046
Interest expense	33,772		51,544		51,425
Total expenses	4,891,616		4,775,151		4,386,963
Income before provision for income taxes	660,669		404,443		221,008
Provision for income taxes	136,461		77,013		53,484
Net income	524,208		327,430		167,524
Net (income) loss attributable to noncontrolling interest	(10,877)		20,639		39,830
Net income attributable to NGHC	513,331		348,069		207,354
Dividends on preferred stock	(33,600)		(33,600)		(32,492)
Net income attributable to NGHC common stockholders	$	479,731	$	314,469	$	174,862
Earnings Per Share (“EPS”) attributable to NGHC common stockholders:
Basic EPS	$	4.23	$	2.78	$	1.62
Diluted EPS	$	4.14	$	2.73	$	1.59

See accompanying notes to consolidated financial statements.

F-6

NATIONAL GENERAL HOLDINGS CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands)

	Year Ended December 31,
	2020		2019		2018
Net income	$	524,208	$	327,430	$	167,524
Other comprehensive income:
Foreign currency translation adjustment	(305)		18,055		(8,425)
Income tax effect	64		(3,796)		1,774
Total foreign currency translation adjustment, net of tax	(241)		14,259		(6,651)
Gross unrealized gain (loss) on investments before reclassifications	191,424		172,968		(71,936)
Income tax effect	(40,198)		(36,323)		15,107
Total change in net unrealized gain (loss) on investments, net of tax	151,226		136,645		(56,829)
Reclassification adjustments for investments gain or loss to net income:
Net realized (gain) loss on investments	(28,183)		(19,721)		18,270
Income tax effect	5,918		4,141		(3,837)
Total (gain) loss on investments reclassifications to net income, net of tax	(22,265)		(15,580)		14,433
Other comprehensive income (loss) before income tax effect	162,936		171,302		(62,091)
Income tax effect	(34,216)		(35,978)		13,044
Other comprehensive income (loss), net of tax	128,720		135,324		(49,047)
Comprehensive income	652,928		462,754		118,477
Comprehensive (income) loss attributable to noncontrolling interest	(10,942)		11,993		44,823
Comprehensive income attributable to NGHC	$	641,986	$	474,747	$	163,300

See accompanying notes to consolidated financial statements.

F-7

NATIONAL GENERAL HOLDINGS CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In Thousands, Except Shares)

	Years Ended December 31, 2020, 2019, and 2018
	Preferred Stock		Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Noncontrolling Interest		Total
Balance January 1, 2018	$	420,000	$	1,067	$	917,751	$	(8,112)	$	597,863	$	24,856	$	1,953,425
Cumulative-effect adjustment of change in accounting principles	—		—		—		36		8,794		—		8,830
Net income (loss)	—		—		—		—		207,354		(39,830)		167,524
Foreign currency translation adjustment, net of tax	—		—		—		(6,651)		—		—		(6,651)
Change in unrealized loss on investments, net of tax	—		—		—		(37,403)		—		(4,993)		(42,396)
Issuance of common stock	—		58		132,172		—		—		—		132,230
Issuance of preferred stock	30,000		—		(110)		—		—		—		29,890
Common stock dividends declared	—		—		—		—		(17,463)		—		(17,463)
Preferred stock dividends declared	—		—		—		—		(32,492)		—		(32,492)
Common stock issued under employee stock plans and exercises of stock options	—		4		1,974		—		—		—		1,978
Shares withheld related to net share settlement	—		—		(3,024)		—		—		—		(3,024)
Stock-based compensation	—		—		9,020		—		—		—		9,020
Balance December 31, 2018	450,000		1,129		1,057,783		(52,130)		764,056		(19,967)		2,200,871
Net income (loss)	—		—		—		—		348,069		(20,639)		327,430
Foreign currency translation adjustment, net of tax	—		—		—		14,259		—		—		14,259
Change in unrealized gain on investments, net of tax	—		—		—		112,419		—		8,646		121,065
Common stock dividends declared	—		—		—		—		(20,387)		—		(20,387)
Preferred stock dividends declared	—		—		—		—		(33,600)		—		(33,600)
Common stock issued under employee stock plans and exercises of stock options	—		5		589		—		—		—		594
Shares withheld related to net share settlement	—		—		(3,734)		—		—		—		(3,734)
Stock-based compensation	—		—		10,996		—		—		—		10,996
Balance December 31, 2019	$	450,000	$	1,134	$	1,065,634	$	74,548	$	1,058,138	$	(31,960)	$	2,617,494

See accompanying notes to consolidated financial statements.

F-8

NATIONAL GENERAL HOLDINGS CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In Thousands, Except Shares)

	Years Ended December 31, 2020, 2019, and 2018
	Preferred Stock		Common Stock		Treasury Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income		Retained Earnings		Noncontrolling Interest		Total
Balance January 1, 2020	$	450,000	$	1,134	$	—	$	1,065,634	$	74,548	$	1,058,138	$	(31,960)	$	2,617,494
Cumulative-effect adjustment of change in accounting principle, net of tax	—		—		—		—		—		(863)		(147)		(1,010)
Net income	—		—		—		—		—		513,331		10,877		524,208
Foreign currency translation adjustment, net of tax	—		—		—		—		(241)		—		—		(241)
Change in unrealized gain on investments, net of tax	—		—		—		—		128,896		—		65		128,961
Common stock repurchased	—		—		(8,482)		—		—		—		—		(8,482)
Common stock dividends declared	—		—		—		—		—		(22,710)		—		(22,710)
Preferred stock dividends declared	—		—		—		—		—		(33,600)		—		(33,600)
Common stock issued under employee stock plans and exercises of stock options	—		6		—		2,629		—		—		—		2,635
Shares withheld related to net share settlement	—		—		—		(3,678)		—		—		—		(3,678)
Stock-based compensation	—		—		—		12,421		—		—		—		12,421
Balance December 31, 2020	$	450,000	$	1,140	$	(8,482)	$	1,077,006	$	203,203	$	1,514,296	$	(21,165)	$	3,215,998

See accompanying notes to consolidated financial statements.

F-9

NATIONAL GENERAL HOLDINGS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

	Year Ended December 31,
	2020		2019		2018
Cash flows from operating activities:
Net income	$	524,208	$	327,430	$	167,524
Adjustments to reconcile net income to cash provided by operating activities:
Net (gain) loss on investments and gain on sale of a business	(26,577)		(39,901)		29,545
Credit loss expense	94,667		88,247		74,214
Depreciation and amortization	80,694		96,279		86,346
Stock-based compensation expense	12,421		10,996		9,020
Other, net	22,517		3,644		11,685
Changes in assets and liabilities:
Accrued investment income	3,123		(5,553)		(7,568)
Premiums and other receivables	(212,556)		(112,627)		(168,445)
Deferred acquisition costs	(22,382)		(15,055)		(38,713)
Reinsurance recoverable	174,569		194,648		(318,344)
Prepaid reinsurance premiums	161,737		93,257		(148,552)
Prepaid expenses and other assets	25,818		58,086		(17,785)
Unpaid loss and loss adjustment expense reserves	2,685		(62,965)		302,730
Unearned premiums and other revenue	(67,617)		(21,474)		265,102
Reinsurance payable	(199,314)		(42,355)		259,699
Accounts payable and accrued expenses	69,649		(7,983)		98,276
Other liabilities	(43,572)		(43,063)		(6,601)
Net cash provided by operating activities	600,070		521,611		598,133
Cash flows from investing activities:
Purchases of:
Debt securities, available-for-sale	(1,002,485)		(2,140,359)		(1,802,668)
Short-term investments	(1,959,084)		(2,773,361)		(2,919,422)
Other investments	(2,579)		(5,848)		(39,019)
Property and equipment	(39,974)		(91,664)		(102,390)
Proceeds from:
Sale of debt securities, available-for-sale	509,902		974,474		1,010,339
Maturity of debt securities, available-for-sale	645,401		347,948		314,685
Sale of short-term investments	1,838,450		3,066,577		2,610,788
Sale and return of other investments	25,257		16,733		150,366
Sale of a business, net of cash and cash equivalents sold	—		92,290		—
Other investing activities	(700)		14,959		(13,453)
Net cash provided by (used in) investing activities	$	14,188	$	(498,251)	$	(790,774)

See accompanying notes to consolidated financial statements.

F-10

NATIONAL GENERAL HOLDINGS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
	Year Ended December 31,
	2020		2019		2018
Cash flows from financing activities:
Common stock repurchased	$	(8,482)	$	—	$	—
Payments of debt issuance costs	—		(1,134)		—
Repayments of debt and principal payments under capital leases obligations	(13,130)		(32,306)		(39,000)
Issuance of common stock, net (fees $0 - 2020, $0 - 2019, and $5,770 - 2018)	—		—		132,230
Issuance of preferred stock, net (fees $0 - 2020, $0 - 2019, and $110 - 2018)	—		—		29,890
Issuance of common stock — employee share options	2,635		594		1,978
Taxes paid related to net share settlement of equity awards	(3,678)		(3,734)		(3,024)
Dividends paid to common shareholders	(22,699)		(19,239)		(17,111)
Dividends paid to preferred shareholders	(33,600)		(33,542)		(31,500)
Net cash (used in) provided by financing activities	(78,954)		(89,361)		73,463
Effect of exchange rate changes on cash and cash equivalents	—		(3,119)		(4,723)
Net increase (decrease) in cash, cash equivalents, and restricted cash	535,304		(69,120)		(123,901)
Cash, cash equivalents, and restricted cash at beginning of the year	164,463		233,583		357,484
Cash, cash equivalents, and restricted cash at end of the year	$	699,767	$	164,463	$	233,583
Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	109,936	$	38,723	$	26,763
Cash paid for interest	38,208		42,159		44,884
Supplemental disclosures of non-cash financing activities:
Accrued common stock dividends	$	5,679	$	5,669	$	4,518
Accrued preferred stock dividends	8,925		8,925		8,867

See accompanying notes to consolidated financial statements.

F-11

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

1. Organization

National General Holdings Corp. (the “Company” or “NGHC”) is an insurance holding company formed under the laws of the state of Delaware. The Company provides, through its wholly-owned subsidiaries, a variety of insurance products, including personal and small business automobile, homeowners, umbrella, recreational vehicle, motorcycle, lender-placed, supplemental health and other niche insurance products. The insurance is sold through a network of independent agents, relationships with affinity partners, direct-response marketing programs and retail storefronts. The Company is licensed to operate throughout the fifty states and the District of Columbia.

Effective January 4, 2021, the Company was acquired by The Allstate Corporation (“Allstate”) pursuant to the Agreement and Plan of Merger (“Merger”), dated as of July 7, 2020, by and among the Company, Allstate, and Bluebird Acquisition Corp., an indirect wholly owned subsidiary of Allstate. See Note 22, “Subsequent Events” for additional information.

In March 2020, the outbreak of COVID-19 caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization. The pandemic outbreak has caused an economic downturn on a global scale. As of December 31, 2020, the Company did not experience a material adverse impact due to COVID-19.

2. Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and variable interest entities (“VIE”) of which the Company is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated in consolidation.

Use of Estimates and Assumptions

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s principal estimates include unpaid losses and loss adjustment expense reserves; deferred acquisition costs; reinsurance recoverable, including the provision for uncollectible amounts; determining the fair value of investments; determining the fair value of stock-based awards for stock compensation; the valuation of intangibles and the determination of goodwill and goodwill impairment; and income taxes. In developing the estimates and assumptions, management uses all available evidence. Because of uncertainties associated with estimating the amounts, timing and likelihood of possible outcomes, actual results could differ from estimates.

Other Significant Accounting Policies

Premiums and Other Receivables

The Company recognizes earned premium on a pro rata basis over the terms of the policies, generally periods of six or twelve months. Unearned premiums represent the portion of premiums written applicable to the unexpired terms of the policies. Net premiums receivable represent premiums written and not yet collected, net of an allowance for uncollectible premiums. The Company regularly evaluates premiums and other receivables and adjusts its allowance for uncollectible amounts as appropriate. Receivables specifically identified as uncollectible are charged to expense in the period the determination is made. Premium refunds are recorded as an offset against gross premium written.

F-12

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Premiums and other receivables are reported net of an allowance for expected credit losses. The allowance is based upon the Company’s ongoing review of amounts outstanding, historical loss data, including delinquencies and write-offs, current and forecasted economic conditions, and other relevant factors. The Company uses a loss-rate method to estimate the expected credit losses. Credit risk is partially mitigated by the Company’s ability to cancel the policy if the policyholder does not pay the premium.

Cash and Cash Equivalents

The Company’s cash and cash equivalents include cash on hand, money market instruments and other debt instruments with a maturity of 90 days or less when purchased. Certain securities with original maturities of 90 days or less that are held as a portion of fixed maturity portfolios are classified as short-term investments.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents balances relate primarily to deposits in certain states in order to conduct business and certain third-party agreements. The Company also utilizes trust accounts to collateralize business with its reinsurance counterparties. Amounts described as restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.

Short-term Investments

Short-term investments include commercial paper, U.S. Treasury bills and money market funds with maturities between 91 days and less than one year at the date of acquisition.

Deferred Acquisition Costs

Deferred acquisition costs include commissions, premium taxes, payments to affinity partners, and other direct sales costs that are directly related to successful acquisition of insurance policies. These costs, net of ceding allowances, are deferred and amortized to the extent recoverable, over the policy period in which the related premiums are earned and/or over the expected life of the policy as applicable to A&H. Anticipated investment income is considered in determining the recoverability of these costs. Management believes that these costs are recoverable.

Ceding Commission Revenue

Commissions on reinsurance premiums ceded are earned in a manner consistent with the recognition of the costs to acquire the underlying policies on a pro-rata basis over the terms of the policies reinsured. The portion of ceding commission which represents reimbursement of acquisition costs related to the underlying policies is recorded as an offset to acquisition costs and other underwriting expenses. Commission in excess of acquisition costs is recorded as ceding commission income over the terms of the policies. Certain reinsurance agreements contain provisions whereby the ceding commission rates vary based on the loss experience of the policies covered by the agreements. The Company records ceding commission revenue based on its current estimate of losses on the reinsured policies subject to variable commission rates. The Company records adjustments to the ceding commission revenue in the period that changes in the estimated losses are determined.

Loss and Loss Adjustment Expense

Loss and loss adjustment expense (“LAE”) represent the estimated ultimate net costs of all reported and unreported losses incurred through the period end. The reserves for unpaid losses and LAE represent the accumulation of estimates for both reported losses and those incurred but not reported relating to direct insurance and assumed reinsurance agreements. Estimates for salvage and subrogation recoverables are recognized at the time losses are incurred and netted against the provision for losses. Insurance liabilities are based on estimates, and the

F-13

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

ultimate liability may vary from such estimates. These estimates are regularly reviewed and adjustments are included in the period in which adjustments are determined.

Business Combinations

The Company accounts for business combinations under the acquisition method of accounting, which requires the Company to record assets acquired, liabilities assumed and any noncontrolling interest in the acquiree at their respective fair values as of the acquisition date. The Company accounts for the insurance and reinsurance contracts under the acquisition method as new contracts, which requires the Company to record assets and liabilities at fair value. The Company adjusts the fair value of loss and LAE reserves starting with the acquired loss reserves based on the Company’s existing accounting policies and then discounting them based on expected reserve payout patterns using a current risk-free rate of interest. This risk-free interest rate is then adjusted based on different cash flow scenarios that use different payout and ultimate reserve assumptions deemed to be reasonably possible based upon the inherent uncertainties present in determining the amount and timing of payment of such reserves. The difference between the acquired loss and LAE reserves and the Company’s best estimate of the fair value of such reserves at the acquisition date is recorded as either an intangible asset (net loss reserve discount) or another liability (net loss reserve plus a risk premium), as applicable and is amortized proportionately to the reduction in the related loss reserves (e.g., over the estimated payout period of the acquired loss and LAE reserves). The Company assigns fair values to intangible assets acquired based on valuation techniques including the income and market approaches. The Company records contingent consideration at fair value based on the terms of the purchase agreement with subsequent changes in fair value recorded through earnings. The purchase price is the fair value of the total consideration conveyed to the seller and we record the excess (deficiency) of the purchase price over the fair value of the acquired net assets, where applicable, as goodwill or bargain purchase gain. The Company expenses costs associated with the acquisition of a business in the period incurred.

Goodwill and Intangible Assets

A purchase price paid that is in excess of net assets, i.e., goodwill, arising from a business combination is recorded as an asset and is not amortized. Intangible assets with an indefinite useful life are not amortized. Goodwill and intangible assets are tested for impairment on an annual basis or more frequently if changes in circumstances indicate that the carrying amount may not be recoverable. If the goodwill or intangible asset is impaired, it is written down to its realizable value with a corresponding expense reflected in general and administrative expenses in the consolidated statements of income.

Intangible assets that have finite lives, including but not limited to, agent and customer relationships and trademarks, are amortized over the estimated useful life of the asset. For intangible assets with finite lives, impairment is recognized if the carrying amount is not recoverable and exceeds the fair value of the intangible asset. Generally intangible assets with finite lives are only tested for impairment if indicators of impairment, i.e, triggers, are identified. Triggers include, but are not limited to, a significant adverse change in the extent, manner or length of time in which the intangible asset is being used or a significant adverse change in legal factors or in the business climate that could affect the value of the other intangible asset.

Investments

The Company has classified its debt securities as available for sale measured at fair value with unrealized gains and losses reported as a separate component of comprehensive income. Equity investments (except those accounted for under the equity method, and those that result in consolidation of the investee and certain other investments) are measured at fair value with all gains and losses reported in net income. The Company may sell its available-for-sale and equity securities in response to changes in interest rates, risk/reward characteristics, liquidity needs or other factors. Available-for-sale and equity securities are reported at their estimated fair values based on quoted market prices or recognized pricing services.

Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method. Net investment income is recognized when earned and includes interest

F-14

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

and dividend income together with amortization of market premiums and discounts using the effective yield method and is net of investment management fees and other expenses. For mortgage-backed securities and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and revised as necessary. Any adjustments required due to the change in effective yields and maturities are recognized on a prospective basis through yield adjustments.

As of December 31, 2020, and 2019, the Company had the following major types of investments:

(i)Debt securities are classified as available-for-sale and are carried at fair value. Unrealized gains or losses on available-for-sale debt securities are reported as a component of accumulated other comprehensive income.

(ii)Mortgage and structured securities are carried at fair value. The Company recognizes income using the retrospective adjustment method based on prepayments and the estimated economic lives of the securities. The effective yield reflects actual payments to date plus anticipated future payments. These investments are recorded as debt securities, available-for-sale in the consolidated balance sheets.

(iii)Short-term investments are carried at amortized cost, which approximates fair value, and includes investments with maturities between 91 days and less than one year at the date of acquisition. Income from short-term investments is reported within net investment income.

(iv)Other investments consisted of equity method investments, in which the company has the power to influence the operating or financial decisions but does not require consolidation; common stock carried at fair value (equity securities); notes receivable; long-term certificates of deposits; and other instruments carried at fair value and at cost or amortized cost. Income from other investments is reported within net investment income. Gains or losses on equity securities are reported within net gain (loss) on investments.

Beginning on January 1, 2020, credit losses on available-for-sale debt securities are recognized through an allowance account. The Company reports accrued investment income separately from debt securities in the Consolidated Balance Sheets, and has elected not to measure an allowance for credit losses. Accrued investment income is written-off by reversing interest income through net investment income at the time the issuer of the bond defaults or is expected to default on payments. Uncollectible debt securities are written-off to net gain (loss) on investments when the Company determines that no additional payments of principal or interest will be received.

Fair Value of Financial Instruments

The Company’s estimates of fair value for financial assets and financial liabilities are based on the inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. Additionally, valuation of debt securities investments is more subjective when markets are less liquid due to lack of market-based inputs, which may increase the potential that the estimated fair value of an investment is not reflective of the price at which an actual transaction could occur. Fair values of other financial instruments which are short-term in nature approximate their carrying values.

Equity Method Investments

The Company uses the equity method of accounting for investments in which its ownership interest enables the Company to influence operating or financial decisions of the investee, but the Company’s interest does not require consolidation. In applying the equity method, the Company records its investment at cost, and subsequently increases or decreases the carrying amount of the investment by its proportionate share of the net earnings or losses and other comprehensive income of the investee. Any dividends or distributions received are recorded as a decrease in the carrying value of the investment. The Company’s proportionate share of net income is reported in net investment income.

F-15

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Stock Compensation Expense

The Company recognizes stock-based compensation expense including stock options and Restricted Stock Units (“RSUs”), to be measured based on the grant date fair value of the awards, with the resulting expense recognized on a straight-line basis over the period during which the employee is required to perform service in exchange for the award. The majority of the Company’s awards are earned over a service period of three or four years.

Earnings Per Share

Basic earnings per share are computed by dividing income available to common stockholders by the number of weighted average common shares outstanding. Dilutive earnings per share are computed by dividing income available to common stockholders, adjusted for the effects of the presumed issuance of potential common shares, by the number of weighted average common shares outstanding, plus potentially issuable shares, such as options, unvested stock-based payment awards and convertible securities.

Impairment of Long-lived Assets

The carrying value of long-lived assets is evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable from the estimated undiscounted future cash flows expected to result from its use and eventual disposition. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment is measured as the amount by which the carrying amount of the assets exceeds the fair value as estimated by discounted cash flows.

Income Taxes

The Company joins its subsidiaries in the filing of a consolidated Federal income tax return and is party to a Federal income tax allocation agreement. Under the tax allocation agreement, the Company pays to or receives from its subsidiaries the amount, if any, by which the group’s Federal income tax liability was affected by virtue of inclusion of the subsidiary in the consolidated Federal return. The Reciprocal Exchanges are not party to the tax allocation agreement and file separate tax returns.

Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. The deferred tax asset and liability primarily consists of book versus tax differences for earned premiums, loss and LAE reserve discounting, deferred acquisition costs, earned but unbilled premiums, and unrealized holding gains and losses on debt securities. Changes in deferred income tax assets and liabilities that are associated with components of other comprehensive income, primarily unrealized investment gains and losses, are recorded directly to other comprehensive income. Otherwise, changes in deferred income tax assets and liabilities are included as a component of income tax expense. In assessing the recoverability of deferred tax assets, management considers whether it is more likely than not that the Company will generate future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. If necessary, the Company establishes a valuation allowance to reduce the deferred tax assets to the amounts more likely than not to be realized.

The Company recognizes tax benefits for tax positions that are more likely than not to be sustained upon examination by taxing authorities. The Company’s policy is to prospectively classify accrued interest and penalties related to any unrecognized tax benefits in its income tax provision.

Reinsurance

The Company cedes insurance risk under various reinsurance agreements. The Company seeks to reduce the loss that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring

F-16

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

certain levels of risk with other insurance enterprises. The Company remains liable with respect to any insurance ceded if the assuming companies are unable to meet their obligations under these reinsurance agreements.

Reinsurance premiums, losses and LAE ceded to other companies are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Earned premiums and losses and LAE incurred ceded to other companies have been recorded as a reduction of premium revenue and losses and LAE. Commissions allowed by reinsurers on business ceded have been recorded as ceding commission revenue to the extent the ceding commission exceeds acquisition costs. Reinsurance recoverable is reported based on the portion of reserves and paid losses and LAE that are ceded to other companies. If the Company determines that a reinsurance contract does not transfer sufficient risk, it accounts for the contract under deposit accounting.

Amounts recoverable from reinsurers are estimated in a manner consistent with the associated claim liability. The Company reports its reinsurance recoverable net of an allowance for estimated uncollectible reinsurance. The allowance is based upon the Company’s ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, applicable coverage defenses, and other relevant factors. The Company evaluates and monitors the financial condition of its reinsurers under voluntary reinsurance arrangements to minimize its exposure to significant losses from reinsurer insolvencies.

Property and Equipment

Property and equipment are recorded at cost. Maintenance and repairs are charged to operations as incurred. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, as follows:

Buildings and improvements	30 years
Leasehold improvements	Remaining lease term
Other equipment	3 to 20 years
Hardware and software	3 to 5 years

The Company capitalizes costs of computer software developed or obtained for internal use that is specifically identifiable, has determinable lives and relates to future use.

Variable Interest Entities

A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains and losses of the entity. The Company’s consolidation principles require the inclusion of VIEs in which the Company is deemed the primary beneficiary. The primary beneficiary is the entity that has both (1) the power to direct the activities of the VIE that most significantly affect that entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE.

The consolidated financial statements also include the accounts and operations of Adirondack Insurance Exchange, a New York reciprocal insurer, and New Jersey Skylands Insurance Association, a New Jersey reciprocal insurer (together, the “Reciprocal Exchanges” or “Exchanges”), VIEs of which the Company is the primary beneficiary. The Company does not own the Reciprocal Exchanges but is paid a fee to manage them.

The Company consolidates the Reciprocal Exchanges as it has determined that these are VIEs of which the Company is the primary beneficiary. The Company manages the business operations of the Reciprocal Exchanges and has the ability to direct their activities. The Company receives a management fee for the services provided to the Reciprocal Exchanges. The Reciprocal Exchanges are insurance carriers organized as unincorporated associations. In the event of dissolution, policyholders would share any residual unassigned surplus in the same proportion as the amount of insurance purchased but are not subject to assessment for any deficit in unassigned surplus of the

F-17

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Reciprocal Exchanges. The assets of the Reciprocal Exchanges can be used only to settle the obligations of the Reciprocal Exchanges and general creditors to their liabilities have no recourse to the Company as primary beneficiary. The results of operations of the Reciprocal Exchanges and the management companies are included in the Company’s P&C segment.

Noncontrolling Interest

Non-redeemable noncontrolling interest is the portion of equity (net assets) not attributable, directly or indirectly, to a parent. The Company has no ownership interest in the Reciprocal Exchanges. Therefore, the difference between the value of their assets and liabilities represent the value of the noncontrolling interest.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk are primarily cash and cash equivalents, investments and premiums and other receivables. Investments are diversified through many industries and geographic regions through the use of an investment manager who employs different investment strategies. The Company limits the amount of credit exposure with any one financial institution and believes that no significant concentration of credit risk exists with respect to cash and investments. At December 31, 2020 and 2019, the outstanding premiums and other receivables balance was generally diversified due to the Company’s diversified customer base. To reduce credit risk, the Company performs ongoing evaluations for uncollectible amounts. The Company also has receivables from its reinsurers. See Note 10, “Reinsurance” for additional information about concentration of credit risk. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company periodically evaluates the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. It is the policy of management to review all outstanding receivables at period end as well as the bad debt write-offs experienced in the past and establish an allowance for uncollectible accounts, if deemed necessary.

Service and Fee Income

The Company currently generates policy service and fee income from installment fees, late payment fees, and other finance and processing fees related to policy cancellation, policy reinstatement and insufficient funds check returns. These fees are generally designed to offset expenses incurred in the administration of the Company’s insurance business, and are generated as follows. Installment fees are charged to permit a policyholder to pay premiums in installments rather than in a lump sum. Late payment fees are charged when premiums are remitted after the due date and any applicable grace periods. Policy cancellation fees are charged to policyholders when a policy is terminated by the policyholder prior to the expiration of the policy’s term or renewal term, as applicable. Reinstatement fees are charged to reinstate a policy that has lapsed, generally as a result of non-payment of premiums. Insufficient fund fees are charged when the customer’s payment is returned by the financial institution.

All fee income is recognized as follows. An installment fee is recognized at the time each policy installment bill is due. A late payment fee is recognized when the customer’s payment is not received after the listed due date and any applicable grace period. A policy cancellation fee is recognized at the time the customer’s policy is canceled. A policy reinstatement fee is recognized when the customer’s policy is reinstated. An insufficient fund fee is recognized when the customer’s payment is returned by the financial institution. The amounts charged are primarily intended to compensate the Company for the administrative costs associated with processing and administering policies that generate insurance premium; however, the amounts of fees charged are not dependent on the amount or period of insurance coverage provided and do not entail any obligation to return any portion of those funds. The direct and indirect costs associated with generating fee income are not separately tracked. The Company estimates an allowance for doubtful accounts based on a percentage of fee income.

The Company also collects service fees in the following forms:

(i) Commission and general agent fees by selling policies issued by third-party insurance companies. The Company does not bear insurance underwriting risk with respect to these policies. Commission income and general

F-18

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

agent fees are recognized, net of an allowance for estimated policy cancellations, at the time when the policy is sold. The allowance for estimated third-party cancellations is periodically evaluated and adjusted as necessary.

(ii) Group health administrative fees by performing enrollment and claims services for self-funded employer plans. The Company does not bear insurance underwriting risk in these administrative activities. Group health administrative fees are recognized pro-rata over the term of the administrative contract with the employer, which generally covers twelve months.

Accounting Standards

Recent Accounting Standards, Adopted

Standard	Description	Date of Adoption	Effect on the Company
ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and related amendments.	This standard changed the impairment model to a new forward-looking expected loss model for most financial assets and certain other instruments. The standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which generally results in earlier recognition of allowances for credit losses on loans and other financial instruments. Many of the loss estimation techniques applied prior the adoption of the standard are still permitted, although the inputs to those techniques changed to reflect the full amount of expected credit losses. The Company continues to use judgement to determine which loss estimation method is appropriate for its circumstances. The standard became effective for interim and annual reporting periods beginning after December 15, 2019 and requires using a modified retrospective approach, recognizing a cumulative-effect adjustment as of the beginning of the first reporting period in which the standard is effective.	January 1, 2020	The Company adopted ASU 2016-13 using the modified retrospective approach and recorded a cumulative-effect adjustment, net of tax of $(863) and $(147) to the opening balance of retained earnings and non-controlling interest, respectively. The Company also increased the allowance for premiums receivable, reinsurance recoverable and deferred taxes by the same cumulative amount.
ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.	This standard established a one-step process for testing the value of the goodwill which an entity carries. ASU 2017-04 requires the goodwill impairment to be measured as the excess of the reporting unit’s carrying amount over its fair value.	January 1, 2020	The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.

F-19

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Recent Accounting Standards, Not Yet Adopted

Standard	Description	Effective Date	Effect on the Company
ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.	This standard simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification (“ASC”) 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application, among other things.	January 1, 2021	The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.
ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts and related amendments.	This standard makes targeted improvements to the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The standard is intended to: (i) improve the timeliness of recognizing changes in the liability for future policy benefits and modify the rate used to discount future cash flows, (ii) simplify and improve the accounting for certain market-based options or guarantees associated with deposit or account balance contracts, (iii) simplify the amortization of deferred acquisition costs and (iv) improve the effectiveness of the required disclosures.	January 1, 2022	The Company is currently evaluating the impact this guidance will have on its consolidated financial condition, results of operations, cash flows and disclosures.

F-20

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

3. Allowance for Expected Credit Losses

Premiums and Other Receivables

The following tables present the balances of premiums and other receivables, net of the allowance for expected credit losses, as of January 1, 2020, and December 31, 2020, and changes in the allowance for expected credit losses for the year ended December 31, 2020.

	Year Ended December 31, 2020
	Premiums and Other Receivables, Net		Allowance for Expected Credit Losses
Balance, beginning of the year	$	1,428,948	$	24,067
Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020			762
Current period provision for expected credit losses (1)			94,374
Write-offs of uncollectible premiums and other receivables			(96,422)
Balance, end of the year	$	1,545,380	$	22,781

(1) Current period charges for expected losses are recorded in general and administrative expenses.

Reinsurance Recoverable

The following tables present the balances of reinsurance recoverable, net of the allowance for estimated uncollectible reinsurance, as of January 1, 2020, and December 31, 2020, and changes in the allowance for estimated uncollectible reinsurance for the year ended December 31, 2020.

	Year Ended December 31, 2020
	Reinsurance Recoverable, Net		Allowance for Expected Credit Losses
Balance, beginning of the year	$	1,394,308	$	—
Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020			517
Current period provision for expected credit losses			293
Balance, end of the year	$	1,218,930	$	810

Other than the Company’s mandatory pools and associations reinsurance agreements, the Company’s reinsurers generally carry at least an A.M. Best rating of “A-” (Excellent) or the reinsurance recoverable balances are collateralized. The Company also maintains funds held liabilities under the auto quota share reinsurance agreement.

F-21

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

4. Investments

(a) Debt Securities, Available-For-Sale

The following tables summarize the unrealized positions for available-for-sale debt securities, disaggregated by major security type.

	Amortized		Allowance for		Gross Unrealized				Fair
December 31, 2020	Cost		Credit Losses (1)		Gains		Losses		Value
U.S. Treasury	$	51,749	$	—	$	3,199	$	—	$	54,948
Federal agencies	258		—		3		—		261
States and political subdivision bonds	304,687		—		17,758		(4)		322,441
Foreign government	1,764		—		119		—		1,883
Corporate bonds	1,992,193		—		141,234		(126)		2,133,301
Residential mortgage-backed securities	1,064,041		—		42,597		(222)		1,106,416
Commercial mortgage-backed securities	596,408		—		58,476		(252)		654,632
Asset-backed securities	27,988		—		1,140		(236)		28,892
Structured securities	195,125		—		1,009		(1,778)		194,356
Total	$	4,234,213	$	—	$	265,535	$	(2,618)	$	4,497,130
NGHC	$	3,929,138	$	—	$	260,138	$	(2,361)	$	4,186,915
Reciprocal Exchanges	305,075		—		5,397		(257)		310,215
Total	$	4,234,213	$	—	$	265,535	$	(2,618)	$	4,497,130

(1) Represents the amount of impairment that has resulted from credit-related factors recorded in net gain (loss) on investments.

	Amortized		Gross Unrealized				Fair
December 31, 2019	Cost		Gains		Losses		Value
U.S. Treasury	$	65,037	$	1,992	$	(23)	$	67,006
Federal agencies	3,907		8		—		3,915
States and political subdivision bonds	298,345		4,778		(1,441)		301,682
Foreign government	1,762		40		—		1,802
Corporate bonds	1,859,736		59,184		(2,357)		1,916,563
Residential mortgage-backed securities	1,265,830		15,747		(4,117)		1,277,460
Commercial mortgage-backed securities	585,044		27,261		(112)		612,193
Asset-backed securities	74,465		1,194		(48)		75,611
Structured securities	222,565		226		(2,665)		220,126
Total	$	4,376,691	$	110,430	$	(10,763)	$	4,476,358
NGHC	$	4,057,501	$	104,951	$	(10,343)	$	4,152,109
Reciprocal Exchanges	319,190		5,479		(420)		324,249
Total	$	4,376,691	$	110,430	$	(10,763)	$	4,476,358

F-22

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

The amortized cost and fair value of available-for-sale debt securities held as of December 31, 2020, by contractual maturity, are shown in the table below. Actual maturities may differ from contractual maturities because some borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	NGHC				Reciprocal Exchanges				Total
December 31, 2020	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	61,921	$	62,731	$	—	$	—	$	61,921	$	62,731
Due after one year through five years	1,006,518		1,075,299		69,060		71,231		1,075,578		1,146,530
Due after five years through ten years	1,050,331		1,127,435		65,495		67,259		1,115,826		1,194,694
Due after ten years	270,237		280,867		22,214		22,368		292,451		303,235
Mortgage-backed securities	1,540,131		1,640,583		148,306		149,357		1,688,437		1,789,940
Total	$	3,929,138	$	4,186,915	$	305,075	$	310,215	$	4,234,213	$	4,497,130

(b) Gross Unrealized Losses

The tables below summarize the gross unrealized losses on debt securities classified as available-for-sale, 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, 2020	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
States and political subdivision bonds	$	1,111	$	(4)	$	—	$	—	$	1,111	$	(4)
Corporate bonds	29,161		(126)		—		—		29,161		(126)
Residential mortgage-backed securities	58,742		(222)		—		—		58,742		(222)
Commercial mortgage-backed securities	40,891		(252)		—		—		40,891		(252)
Asset-backed securities	5,041		(228)		151		(8)		5,192		(236)
Structured securities	60,359		(514)		43,906		(1,264)		104,265		(1,778)
Total	$	195,305	$	(1,346)	$	44,057	$	(1,272)	$	239,362	$	(2,618)
NGHC	$	137,628	$	(1,135)	$	40,103	$	(1,226)	$	177,731	$	(2,361)
Reciprocal Exchanges	57,677		(211)		3,954		(46)		61,631		(257)
Total	$	195,305	$	(1,346)	$	44,057	$	(1,272)	$	239,362	$	(2,618)

	Less Than 12 Months				12 Months or More				Total
December 31, 2019	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury	$	19,903	$	(23)	$	500	$	—	$	20,403	$	(23)
States and political subdivision bonds	106,103		(1,415)		2,580		(26)		108,683		(1,441)
Corporate bonds	586,817		(2,253)		5,976		(104)		592,793		(2,357)
Residential mortgage-backed securities	410,484		(4,074)		3,983		(43)		414,467		(4,117)
Commercial mortgage-backed securities	18,250		(105)		748		(7)		18,998		(112)
Asset-backed securities	5,406		(29)		920		(19)		6,326		(48)
Structured securities	40,979		(94)		109,880		(2,571)		150,859		(2,665)
Total	$	1,187,942	$	(7,993)	$	124,587	$	(2,770)	$	1,312,529	$	(10,763)
NGHC	$	1,104,244	$	(7,654)	$	117,681	$	(2,689)	$	1,221,925	$	(10,343)
Reciprocal Exchanges	83,698		(339)		6,906		(81)		90,604		(420)
Total	$	1,187,942	$	(7,993)	$	124,587	$	(2,770)	$	1,312,529	$	(10,763)

F-23

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

The Company’s debt securities portfolio is sensitive to interest rate fluctuations, which impact the fair value of individual securities. There were 134 and 1,337 individual security lots at December 31, 2020, and 2019, respectively, that accounted for the gross unrealized loss. As of December 31, 2020, and 2019, the unrealized losses for those securities in unrealized loss positions for a period of twelve or more consecutive months were not greater than or equal to 25% of their amortized cost. The Company did not have a credit allowance as of December 31, 2020, as the previously recorded allowance was reduced to $0 due to a combination of market movements and sales. Some of the factors considered in assessing credit loss and impairment of fixed maturities due to credit-related factors include: (1) the magnitude of the unrealized loss in relation to the amortized cost; (2) the credit rating of the issuing entity and market or issuer events that could impact the issuer’s ability to repay the debt security; (3) the likelihood of the recoverability of principal and interest; and (4) whether it is more likely than not that the Company will be required to sell the investment prior to an anticipated recovery in value.

The Company considers different factors to determine the amount of projected future cash flows and discounting methods for corporate bonds and residential and commercial mortgage-backed or structured securities. For corporate bond securities, the split between the credit and non-credit losses is driven by assumptions regarding the amount and timing of projected future cash flows. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the security at the date of acquisition. For residential and commercial mortgage-backed and structured securities, cash flow estimates, including prepayment assumptions, are based on data from third-party data sources or internal estimates. In addition to prepayment assumptions, cash flow estimates vary based on assumptions regarding the underlying collateral including default rates, recoveries and changes in value. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security prior to impairment at the balance sheet date. The discounted cash flows become the new amortized cost basis of the debt security.

(c) Net Investment Income

The components of net investment income consisted of the following:

	Year Ended December 31,
	2020		2019		2018
Cash and short-term investments	$	542	$	4,075	$	1,659
Debt securities, available-for-sale	119,873		124,379		107,077
Other, net (related parties - $(2,230), $7,718 and $4,876)	2,728		17,353		14,597
Investment income	123,143		145,807		123,333
Investment expenses	(4,886)		(4,574)		(4,299)
Net investment income	$	118,257	$	141,233	$	119,034
NGHC	$	111,001	$	132,595	$	110,159
Reciprocal Exchanges	7,256		8,638		8,875
Net investment income	$	118,257	$	141,233	$	119,034

F-24

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

(d) Net Gain (Loss) on Investments

The table below indicates realized gains and losses on investments. Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method.

	Year Ended December 31,
	2020		2019		2018
Debt securities, available-for-sale:
Gross gains	$	29,666	$	23,178	$	4,590
Gross losses	(1,483)		(3,457)		(22,860)
Net realized gain (loss) on debt securities, available-for-sale	28,183		19,721		(18,270)
Other, net (1)	(1,606)		(6,248)		(11,275)
Net realized gain (loss) on investments	$	26,577	$	13,473	$	(29,545)
NGHC	$	14,145	$	13,603	$	(26,179)
Reciprocal Exchanges	12,432		(130)		(3,366)
Net realized gain (loss) on investments	$	26,577	$	13,473	$	(29,545)

(1) Includes gains and losses on publicly traded equity securities, other investments, and foreign currency.

(e) Credit Quality of Investments

The tables below summarize the credit quality of debt securities, as rated by Standard & Poor’s (“S&P”). If a security is not rated by S&P, an S&P equivalent is determined based on ratings from similar rating agencies. Securities that are not rated are included in the “BB+ and lower” category.

	NGHC						Reciprocal Exchanges
December 31, 2020	Amortized Cost		Fair Value		Percentage		Amortized Cost		Fair Value		Percentage
U.S. Treasury	$	37,307	$	40,213	1.0	%	$	14,441	$	14,734	4.7	%
AAA	523,929		568,028		13.6	%	28,232		28,496		9.2	%
AA, AA+, AA-	1,428,942		1,507,760		36.0	%	150,794		152,059		49.0	%
A, A+, A-	1,106,964		1,167,933		27.9	%	42,283		43,605		14.1	%
BBB, BBB+, BBB-	818,523		888,515		21.2	%	69,325		71,321		23.0	%
BB+ and lower	13,473		14,466		0.3	%	—		—		—	%
Total	$	3,929,138	$	4,186,915	100.0	%	$	305,075	$	310,215	100.0	%

	NGHC						Reciprocal Exchanges
December 31, 2019	Amortized Cost		Fair Value		Percentage		Amortized Cost		Fair Value		Percentage
U.S. Treasury	$	52,108	$	53,599	1.3	%	$	12,929	$	13,407	4.1	%
AAA	515,869		537,508		12.9	%	20,947		21,555		6.6	%
AA, AA+, AA-	1,677,787		1,697,220		40.9	%	120,113		121,720		37.5	%
A, A+, A-	954,312		976,468		23.5	%	116,747		119,041		36.7	%
BBB, BBB+, BBB-	795,594		823,239		19.8	%	48,021		48,093		14.8	%
BB+ and lower	61,831		64,075		1.6	%	433		433		0.3	%
Total	$	4,057,501	$	4,152,109	100.0	%	$	319,190	$	324,249	100.0	%

F-25

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

The tables below summarize the investment quality of the corporate bond holdings and industry concentrations.

December 31, 2020	AAA		AA+, AA, AA-		A+,A,A-		BBB+, BBB, BBB-		BB+ or Lower		Fair Value		% of Corporate Bonds Portfolio
Financial Institutions	—	%	2.3	%	24.1	%	14.1	%	—	%	$	863,046	40.5	%
Industrials	0.3	%	3.2	%	25.5	%	27.6	%	0.1	%	1,208,646		56.7	%
Utilities/Other	—	%	—	%	1.6	%	1.2	%	—	%	61,609		2.8	%
Total	0.3	%	5.5	%	51.2	%	42.9	%	0.1	%	$	2,133,301	100.0	%
NGHC	0.3	%	5.5	%	49.2	%	39.5	%	0.1	%	$	2,018,325	94.6	%
Reciprocal Exchanges	—	%	—	%	2.0	%	3.4	%	—	%	114,976		5.4	%
Total	0.3	%	5.5	%	51.2	%	42.9	%	0.1	%	$	2,133,301	100.0	%

December 31, 2019	AAA		AA+, AA, AA-		A+,A,A-		BBB+, BBB, BBB-		BB+ or Lower		Fair Value		% of Corporate Bonds Portfolio
Financial Institutions	—	%	3.6	%	25.0	%	12.1	%	0.3	%	$	785,910	41.0	%
Industrials	0.7	%	2.7	%	24.1	%	29.0	%	0.1	%	1,083,959		56.6	%
Utilities/Other	—	%	—	%	1.0	%	1.4	%	—	%	46,694		2.4	%
Total	0.7	%	6.3	%	50.1	%	42.5	%	0.4	%	$	1,916,563	100.0	%
NGHC	0.3	%	5.1	%	44.0	%	40.0	%	0.4	%	$	1,720,962	89.8	%
Reciprocal Exchanges	0.4	%	1.2	%	6.1	%	2.5	%	—	%	195,601		10.2	%
Total	0.7	%	6.3	%	50.1	%	42.5	%	0.4	%	$	1,916,563	100.0	%

(f) Cash and Cash Equivalents, Restricted Cash and Restricted Investments

The Company, in order to conduct business in certain states, is required to maintain letters of credit or assets on deposit to support state mandated regulatory requirements and certain third-party agreements. The Company also utilizes trust accounts to collateralize business with its reinsurance counterparties. These assets are held primarily in the form of cash or certain high grade securities.

Cash, cash equivalents, and restricted cash are as follows:

	December 31,
	2020		2019
Cash and cash equivalents	$	662,772	$	135,942
Restricted cash and cash equivalents	36,995		28,521
Total cash, cash equivalents and restricted cash	$	699,767	$	164,463

Restricted investments are as follows:

	December 31,
	2020		2019
Securities on deposit with state regulatory authorities	$	83,764	$	74,061
Restricted investments to trusts in certain reinsurance transactions	26,650		49,502
Total restricted investments	$	110,414	$	123,563

F-26

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

(g) Other Investments

The table below summarizes the composition of other investments:

	December 31,
	2020		2019
Equity method investments (related parties - $101,143 and $109,612)	$	136,201	$	143,511
Notes receivable (related parties - $130,784 and $129,229) (1)	130,824		129,299
Long-term Certificates of Deposit (CDs), at cost	134		20,150
Investments, at fair value	5,936		9,365
Investments, at cost or amortized cost	7,960		8,962
Total	$	281,055	$	311,287

(1) See Note 16, “Related Party Transactions” for additional information.

Equity method investments represent limited liability companies and limited partnership investments in real estate. Investments at fair value include publicly traded equity securities and the Company’s right to receive the excess servicing spread related to servicing rights, for which the Company has elected the fair value option with changes in fair value recorded in net investment income. Investments at cost or amortized cost, represent limited partnerships, loans and trusts. The Company believes its exposure to risk associated with these investments is generally limited to the investment carrying amounts.

Equity Method Investments - Related Parties

A person, who was a significant shareholder of the Company prior to the Merger, also has an ownership interest in AmTrust Financial Services, Inc. (“AmTrust”) and ACP Re Holdings LLC. (“ACP Re”). Accordingly, as of December 31, 2020, AmTrust and ACP Re were related entities of the Company.

Limited Liability Companies and Limited Partnerships

The Company holds a variable interest in the following entities but is not the primary beneficiary of such VIE’s. The Company accounts for these entities using the equity method of accounting. The Company believes its exposure to risk associated with these investments is generally limited to the investment carrying amounts.

LSC Entity

The Company has a 50% ownership interest in an entity (the “LSC Entity”) initially formed to acquire life settlement contracts, with AmTrust owning the remaining 50%. The LSC Entity used the contributed capital to pay premiums and purchase policies. A life settlement contract is a contract between the owner of a life insurance policy and a third party who obtains the ownership and beneficiary rights of the underlying life insurance policy. The LSC Entity has a 30% noncontrolling equity interest in a limited partnership managed by a third party. As of December 31, 2020, the LSC Entity directly held one life settlement contract. The life settlement contract is accounted for using the fair value method.

The Company’s equity interest in the LSC Entity as of December 31, 2020, 2019, and 2018, was $44,847, $49,477 and $48,324, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in earnings (losses) from the LSC Entity of $(5,630), $3,395 and $4,276, respectively, made contributions of $1,000, $258 and $2,000, respectively, and received distributions of $0, $2,500 and $118,635, respectively.

800 Superior, LLC

The Company holds an investment in 800 Superior, LLC, a limited liability company that owns an office building in Cleveland, Ohio, with AmTrust. AmTrust has been appointed managing member of 800 Superior, LLC. The Company and AmTrust each have a 50% ownership interest in 800 Superior, LLC.

F-27

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

The Company’s equity interest in 800 Superior, LLC as of December 31, 2020 and 2019, was $9,559 and $9,365, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in earnings (losses) from 800 Superior, LLC of $194, $1,953 and $(531), respectively, and made contributions of $0, $2,287 and $0, respectively. Additionally, the Company has a lease agreement with 800 Superior, LLC. The Company paid 800 Superior, LLC $3,045, $2,967 and $2,889 in rent for the years ended December 31, 2020, 2019, and 2018, respectively.

North Dearborn Building Company, L.P.

The Company holds an investment in North Dearborn Building Company, L.P. (“North Dearborn”), a limited partnership that owns an office building in Chicago, Illinois. AmTrust is also a limited partner in North Dearborn, and the general partner is NA Advisors GP LLC (“NA Advisors”), a related party, owned by Karfunkel family members which is managed by an unrelated third party. The Company and AmTrust each hold a 45% limited partnership interest in North Dearborn, while NA Advisors holds a 10% general partnership interest and a 10% profit interest, which NA Advisors pays to the unrelated third-party manager. North Dearborn appointed NA Advisors as the general manager to oversee the day-to-day operations of the office building.

The Company’s equity interest in North Dearborn as of December 31, 2020 and 2019, was $5,744 and $5,317, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in earnings (losses) from North Dearborn of $967, $(357) and $(243), respectively, and received distributions of $540, $540 and $1,125, respectively.

4455 LBJ Freeway, LLC

The Company holds an investment in 4455 LBJ Freeway, LLC, a limited liability company that owns an office building in Dallas, Texas, with AmTrust. AmTrust has been appointed managing member of 4455 LBJ Freeway, LLC. The Company and AmTrust each have a 50% ownership interest in 4455 LBJ Freeway, LLC.

The Company’s equity interest in 4455 LBJ Freeway, LLC as of December 31, 2020, and 2019, was $1,677 and $1,074, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in earnings from 4455 LBJ Freeway, LLC of $603, $281 and $53, respectively. Additionally, the Company has a lease agreement with 4455 LBJ Freeway, LLC. The Company paid 4455 LBJ Freeway, LLC $2,482, $2,422 and $2,225 in rent for the years ended December 31, 2020, 2019, and 2018, respectively.

Illinois Center Building, L.P.

The Company holds an investment in Illinois Center Building, L.P. (“Illinois Center”), a limited partnership that owns an office building in Chicago, Illinois. AmTrust and ACP Re are also limited partners in Illinois Center and the general partner is NA Advisors. The Company and AmTrust each hold a 37.5% limited partnership interest in Illinois Center, while ACP Re holds a 15.0% limited partnership interest. NA Advisors holds a 10.0% general partnership interest and a 10.0% profit interest, which NA Advisors pays to the unrelated third-party manager. Illinois Center appointed NA Advisors as the general manager to oversee the day-to-day operations of the office building.

The Company’s equity interest in Illinois Center as of December 31, 2020, and 2019, was $39,316 and $44,379, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in losses from Illinois Center of $(3,188), $(2,321) and $(3,390), made contributions of $0, $1,125 and $2,250, and received distributions of $1,875, $0 and $0, respectively.

F-28

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

5. Fair Value of Financial Instruments

The Company carries certain financial instruments at fair value. Assets and liabilities recorded at fair value in the Consolidated Balance Sheets are measured and classified in accordance with a fair value hierarchy consisting of three “levels” based on the observability of valuation inputs:

Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities as of the measurement date. Additionally, the entity must have the ability to access the active market and the quoted prices cannot be adjusted by the entity.

Level 2 - Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices in active markets for similar assets or liabilities; quoted prices in inactive markets for identical or similar assets or liabilities; or inputs that are observable or can be corroborated by observable market data by correlation or other means for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs are supported by little or no market activity. The unobservable inputs represent management’s best assumptions of how market participants would price the assets or liabilities. Generally, Level 3 assets and liabilities are valued using pricing models, discounted cash flow methodologies, or similar techniques that require significant judgment or estimation.

The following describes the valuation techniques used by the Company to determine the fair value measurements on a recurring basis of financial instruments held as of December 31, 2020 and 2019. The Company utilizes a pricing service (“pricing service”) to estimate fair value measurements for all its debt and equity securities.

Level 1 measurements:

•U.S. Treasury and federal agencies. The fair values of U.S. government securities are based on quoted market prices in active markets. The Company believes the market for U.S. government securities is an actively traded market given the high level of daily trading volume.

•Short-term investments. Comprised of money market funds that are traded in active markets and fair values are based on quoted market prices.

•Other investments, at fair value. Common and preferred equity securities. The pricing service utilizes market quotations for equity securities that have quoted market prices in active markets and their respective quoted prices are provided at fair value.

Level 2 measurements:

•States and political subdivision bonds, and foreign government. The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active.

•Corporate bonds. Comprised of bonds issued by corporations, public and privately placed. The fair values of short-term corporate bonds are priced using the spread above the London Interbank Offering Rate (“LIBOR”) yield curve, and the fair value of long-term corporate bonds are priced using the spread above the risk-free yield curve. The spreads are sourced from broker dealers, trade prices and the new issue market. Where pricing is unavailable from pricing services, the Company obtains non-binding quotes from broker-dealers. The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active.

•Residential and commercial mortgage-backed securities, asset-backed securities and structured securities. The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, prepayment speeds, collateral performance and credit spreads.

F-29

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Level 3 measurements:

•States and political subdivision bonds. The Company holds certain municipal bonds that finance economic development, infrastructure and environmental projects which do not have an active market. These bonds are valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable.

•Corporate bonds. The Company holds certain structured notes and term loans that do not have an active market. These bonds are valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable.

•Other investments, at fair value. Comprised of the Company’s right to receive the Excess Servicing Spread (“ESS”) related to servicing rights. The Company uses a discounted cash flow method to estimate the fair value of the ESS. The key inputs used in the estimation of ESS include prepayment speed and discount rate. Changes in the fair value of the ESS are recorded in net investment income. From time to time, the Company also holds certain equity securities that are issued by privately-held entities or direct equity investments that do not have an active market. The Company estimates the fair value of these securities primarily based on inputs such as third-party broker quotes, issuers’ book value, market multiples, and other inputs. These bonds are valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable.

Assets measured at fair value on a recurring basis are as follows:

	December 31, 2020
	Level 1		Level 2		Level 3		Total
Debt securities, available-for-sale:
U.S. Treasury	$	54,948	$	—	$	—	$	54,948
Federal agencies	261		—		—		261
States and political subdivision bonds	—		319,921		2,520		322,441
Foreign government	—		1,883		—		1,883
Corporate bonds	—		2,130,977		2,324		2,133,301
Residential mortgage-backed securities	—		1,106,416		—		1,106,416
Commercial mortgage-backed securities	—		654,632		—		654,632
Asset-backed securities	—		28,892		—		28,892
Structured securities	—		194,356		—		194,356
Total debt securities, available-for-sale	55,209		4,437,077		4,844		4,497,130
Short-term investments	171,086		20,000		—		191,086
Other investments	2,907		—		3,029		5,936
Total	$	229,202	$	4,457,077	$	7,873	$	4,694,152
NGHC	$	187,582	$	4,161,595	$	7,873	$	4,357,050
Reciprocal Exchanges	41,620		295,482		—		337,102
Total	$	229,202	$	4,457,077	$	7,873	$	4,694,152

F-30

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

	December 31, 2019
	Level 1		Level 2		Level 3		Total
Debt securities, available-for-sale:
U.S. Treasury	$	67,006	$	—	$	—	$	67,006
Federal agencies	3,915		—		—		3,915
States and political subdivision bonds	—		298,582		3,100		301,682
Foreign government	—		1,802		—		1,802
Corporate bonds	—		1,908,235		8,328		1,916,563
Residential mortgage-backed securities	—		1,277,460		—		1,277,460
Commercial mortgage-backed securities	—		612,193		—		612,193
Asset-backed securities	—		75,611		—		75,611
Structured securities	—		220,126		—		220,126
Total debt securities, available-for-sale:	70,921		4,394,009		11,428		4,476,358
Short-term investments	59,953		7,400		—		67,353
Other investments	4,881		—		4,484		9,365
Total	$	135,755	$	4,401,409	$	15,912	$	4,553,076
NGHC	$	116,602	$	4,091,068	$	15,912	$	4,223,582
Reciprocal Exchanges	19,153		310,341		—		329,494
Total	$	135,755	$	4,401,409	$	15,912	$	4,553,076

During the years ended December 31, 2020, and 2019, there were no transfers between Level 2 and Level 3.

The following tables provide a reconciliation of recurring fair value measurements of the Level 3 financial assets:

	States and political subdivision bonds		Corporate bonds		Other investments		Total
Balance as of January 1, 2020	$	3,100	$	8,328	$	4,484	$	15,912
Total gains (losses) for the period:
Included in net income	—		—		(531)		(531)
Included in other comprehensive income	(580)		(6,004)		—		(6,584)
Sales	—		—		(924)		(924)
Balance as of December 31, 2020	$	2,520	$	2,324	$	3,029	$	7,873
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period					$	(531)	$	(531)
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period	$	(580)	$	(6,004)			$	(6,584)

F-31

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

	States and political subdivision bonds		Corporate bonds		Other investments		Total
Balance as of January 1, 2019	$	3,596	$	11,767	$	7,593	$	22,956
Total gains (losses) for the period:
Included in net income	—		—		(1,851)		(1,851)
Included in other comprehensive income	(496)		(3,439)		—		(3,935)
Sales	—		—		(1,258)		(1,258)
Balance as of December 31, 2019	$	3,100	$	8,328	$	4,484	$	15,912
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period					$	(1,851)	$	(1,851)
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period	$	(496)	$	(3,439)			$	(3,935)

At December 31, 2020, and 2019, the carrying values of the Company’s cash and cash equivalents, premiums and other receivables, and accounts payable approximate the fair value given their short-term nature and were classified as Level 1. Other than goodwill, the Company did not measure any assets or liabilities at fair value on a nonrecurring basis at December 31, 2020, and 2019. Goodwill is classified as Level 3 in the fair value hierarchy. See Note 8, “Goodwill and Intangible Assets” for additional information on how the Company tested goodwill for impairment.

Fair Value Information About Financial Liabilities not Measured at Fair Value

Debt - The amount reported in the accompanying Consolidated Balance Sheets for these financial instruments represents the carrying value of the debt. See Note 11, “Debt” for additional information.

The following table presents the carrying amount and estimated fair value of debt not carried at fair value, excluding finance lease and other liabilities, as well as the input level used to determine the fair value:

		December 31, 2020				December 31, 2019
	Input Level	Carrying amount		Fair value		Carrying amount		Fair value
7.625% Notes	Level 2	$	97,015	$	101,400	$	96,928	$	103,560
6.75% Notes	Level 3	347,743		386,275		347,091		371,366
Subordinated Debentures	Level 3	72,168		72,139		72,168		72,103
2019 Credit Agreement	Level 3	140,000		144,063		140,000		148,272

F-32

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

6. Deferred Acquisition Costs

The following table reflects the amounts of policy acquisition costs deferred and amortized:

	Year Ended December 31,
	2020						2019						2018
	Property and Casualty		Accident and Health		Total		Property and Casualty		Accident and Health		Total		Property and Casualty		Accident and Health		Total
Balance, beginning of the year	$	239,293	$	24,230	$	263,523	$	226,188	$	25,220	$	251,408	$	198,283	$	18,106	$	216,389
Additions	633,775		24,420		658,195		552,921		39,491		592,412		522,914		22,898		545,812
Amortization	(613,905)		(21,908)		(635,813)		(539,816)		(37,541)		(577,357)		(495,009)		(15,784)		(510,793)
Disposition	—		—		—		—		(2,940)		(2,940)		—		—		—
Change in DAC	19,870		2,512		22,382		13,105		(990)		12,115		27,905		7,114		35,019
End of the year	$	259,163	$	26,742	$	285,905	$	239,293	$	24,230	$	263,523	$	226,188	$	25,220	$	251,408
NGHC	$	239,963	$	26,742	$	266,705	$	215,986	$	24,230	$	240,216	$	206,181	$	25,220	$	231,401
Reciprocal Exchanges	19,200		—		19,200		23,307		—		23,307		20,007		—		20,007
Balance, end of the year	$	259,163	$	26,742	$	285,905	$	239,293	$	24,230	$	263,523	$	226,188	$	25,220	$	251,408

7. Property and Equipment

The composition of property and equipment consisted of the following:

	December 31,
	2020						2019
	Cost		Accumulated Depreciation		Net Value		Cost		Accumulated Depreciation		Net Value
Land	$	5,788	$	—	$	5,788	$	5,788	$	—	$	5,788
Buildings	26,245		(3,416)		22,829		24,997		(2,669)		22,328
Leasehold improvements	39,591		(17,305)		22,286		34,238		(12,372)		21,866
Other equipment	26,909		(3,916)		22,993		24,627		(3,044)		21,583
Hardware and software	417,970		(241,420)		176,550		387,618		(196,294)		191,324
Finance lease right-of-use assets	38,867		(22,631)		16,236		37,515		(16,511)		21,004
Operating lease right-of-use assets	111,001		—		111,001		119,934		—		119,934
Total	$	666,371	$	(288,688)	$	377,683	$	634,717	$	(230,890)	$	403,827
NGHC	$	657,312	$	(279,629)	$	377,683	$	625,658	$	(222,072)	$	403,586
Reciprocal Exchanges	9,059		(9,059)		—		9,059		(8,818)		241
Total	$	666,371	$	(288,688)	$	377,683	$	634,717	$	(230,890)	$	403,827

Depreciation and amortization expense related to property and equipment for the years ended December 31, 2020, 2019, and 2018, was $59,926, $61,965 and $55,928, respectively.

F-33

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

8. Goodwill and Intangible Assets

Goodwill and intangible assets, net of amortization, are recorded as a consequence of business acquisitions. Goodwill represents the excess, if any, of the purchase price over the fair value of their net assets as of the date of acquisition. Intangible assets are recorded at their fair value as of the acquisition date. Intangible assets that are not deemed to have an indefinite useful life are amortized over their estimated useful lives. Goodwill and intangible assets that have an indefinite useful life are not subject to amortization.

Goodwill and intangible assets deemed to have an indefinite useful life are tested annually in the fourth quarter of every year for impairment. Goodwill and intangible assets are also tested whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. If it is determined that an asset has been impaired, the asset is written down by the amount of the impairment, with a corresponding charge to earnings.

With respect to goodwill, a qualitative assessment is first made to determine whether it is necessary to perform quantitative testing. This initial assessment includes, among other factors, consideration of: (i) past, current and projected future earnings and equity; (ii) recent trends and market conditions; and (iii) valuation metrics involving similar companies that are publicly-traded and acquisitions of similar companies, if available. If this initial qualitative assessment indicates that the fair value of an operating segment may be less than its carrying amount, a second step is taken, involving a comparison between the estimated fair values of the Company’s operating subsidiary with its respective carrying amount including goodwill. If the carrying value exceeds estimated fair value, there is an indication of impairment. As of December 31, 2020, there were no circumstances that indicate that the carrying amount of goodwill and intangible assets deemed to have an indefinite useful life may not be recoverable.

The composition of intangible assets and loss reserve premium consisted of the following:

December 31, 2020	Gross Balance		Accumulated Amortization		Net Value		Weighted-average amortization period
Agent/Customer relationships	$	175,352	$	(90,986)	$	84,366	6.7 years
Renewal rights	33,565		(29,351)		4,214		0.7 years
Other intangibles	47,711		(33,491)		14,220		2.9 years
Total intangible assets subject to amortization	256,628		(153,828)		102,800		5.2 years
Management contracts	118,600		—		118,600		indefinite life
State licenses	89,325		—		89,325		indefinite life
Trademarks	30,000		—		30,000		indefinite life
Total intangible assets	$	494,553	$	(153,828)	$	340,725
NGHC	$	490,653	$	(152,973)	$	337,680
Reciprocal Exchanges	3,900		(855)		3,045
Total intangible assets	$	494,553	$	(153,828)	$	340,725
Net loss reserve plus a risk premium (1)	$	(17,266)	$	14,977	$	(2,289)	0.8 years
Total	$	(17,266)	$	14,977	$	(2,289)
NGHC	$	(13,253)	$	10,998	$	(2,255)
Reciprocal Exchanges	(4,013)		3,979		(34)
Total	$	(17,266)	$	14,977	$	(2,289)

F-34

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

December 31, 2019	Gross Balance		Accumulated Amortization		Net Value
Agent/Customer relationships	$	175,157	$	(76,156)	$	99,001
Renewal rights	48,566		(41,257)		7,309
Other intangibles	49,511		(27,923)		21,588
Total intangible assets subject to amortization	273,234		(145,336)		127,898
Management contracts	118,600		—		118,600
State licenses	89,325		—		89,325
Trademarks	30,000		—		30,000
Total intangible assets	$	511,159	$	(145,336)	$	365,823
NGHC	$	507,259	$	(144,661)	$	362,598
Reciprocal Exchanges	3,900		(675)		3,225
Total intangible assets	$	511,159	$	(145,336)	$	365,823
Net loss reserve plus a risk premium (1)	$	(17,266)	$	9,947	$	(7,319)
Total	$	(17,266)	$	9,947	$	(7,319)
NGHC	$	(13,253)	$	6,017	$	(7,236)
Reciprocal Exchanges	(4,013)		3,930		(83)
Total	$	(17,266)	$	9,947	$	(7,319)

(1) Net loss reserve plus a risk premium is recorded as a liability.

Intangible assets amortization expense consisted of the following:

	Year Ended December 31,
	2020		2019		2018
Amortization	$	25,798	$	39,024	$	31,999
Amortization of loss reserve premium	(5,030)		(4,288)		(632)
Total	$	20,768	$	34,736	$	31,367
NGHC	$	20,637	$	34,665	$	31,323
Reciprocal Exchanges	131		71		44
Total	$	20,768	$	34,736	$	31,367

The estimated aggregate amortization expense for each of the next five years and thereafter is:

Year ending	NGHC		Reciprocal Exchanges		Total
2021	$	16,609	$	23	$	16,632
2022	14,657		(9)		14,648
2023	12,386		(3)		12,383
2024	11,452		—		11,452
2025	10,989		—		10,989
Thereafter	34,407		—		34,407
Total	$	100,500	$	11	$	100,511

F-35

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

9. Unpaid Losses and Loss Adjustment Expense Reserves

The unpaid losses and Loss Adjustment Expense (“LAE”) reserves are an estimate of the Company’s liability from incurred claims at the end of the reporting period. The unpaid losses and LAE reserves are the result of an ongoing analysis of recent loss development trends and emerging historical experience. Original estimates are increased or decreased as additional information becomes known regarding individual claims. In setting its reserves, the Company reviews its loss data to estimate expected loss development. Management believes that its use of standard actuarial methodology applied to its analyses of its historical experience provides a reasonable estimate of future losses. However, actual future losses may differ from the Company’s estimate, and may be affected by future events beyond the control of management, including inflation, which may favorably or unfavorably impact the ultimate settlement of the Company’s losses and LAE, as well as changes in the law and judicial interpretations.

The anticipated effect of inflation is implicitly considered when estimating liabilities for losses and LAE. In addition to inflation, the average severity of claims is affected by a number of factors that may vary by types and features of policies written. Future average severities are projected from historical trends, adjusted for implemented changes in underwriting standards and policy provisions, as well as general economic trends. These estimated trends are monitored and revised as necessary based on actual development.

The following tables present a reconciliation of beginning and ending balances for unpaid losses and LAE:

	Year Ended December 31, 2020
	Property and Casualty		Accident and Health		NGHC		Reciprocal Exchanges		Total
Gross balance at beginning of the year	$	2,528,754	$	151,874	$	2,680,628	$	205,786	$	2,886,414
Less: Reinsurance recoverable at beginning of the year	(1,016,368)		(11,266)		(1,027,634)		(84,174)		(1,111,808)
Net balance at beginning of the year	1,512,386		140,608		1,652,994		121,612		1,774,606
Incurred losses and LAE related to:
Current year	2,323,797		342,714		2,666,511		153,380		2,819,891
Prior year	27,042		(23,821)		3,221		970		4,191
Total incurred	2,350,839		318,893		2,669,732		154,350		2,824,082
Paid losses and LAE related to:
Current year	(1,432,498)		(209,319)		(1,641,817)		(94,287)		(1,736,104)
Prior year	(827,745)		(90,952)		(918,697)		(53,317)		(972,014)
Total paid	(2,260,243)		(300,271)		(2,560,514)		(147,604)		(2,708,118)
Net balance at end of the year	1,602,982		159,230		1,762,212		128,358		1,890,570
Plus: Reinsurance recoverable at end of the year	899,217		21,697		920,914		77,614		998,528
Gross balance at end of the year	$	2,502,199	$	180,927	$	2,683,126	$	205,972	$	2,889,098

F-36

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

	Year Ended December 31, 2019
	Property and Casualty		Accident and Health		NGHC		Reciprocal Exchanges		Total
Gross balance at beginning of the year	$	2,507,409	$	271,280	$	2,778,689	$	178,470	$	2,957,159
Less: Reinsurance recoverable at beginning of the year	(1,182,588)		(24,575)		(1,207,163)		(77,979)		(1,285,142)
Net balance at beginning of the year	1,324,821		246,705		1,571,526		100,491		1,672,017
Incurred losses and LAE related to:
Current year	2,320,053		356,036		2,676,089		173,215		2,849,304
Prior year	46,623		(45,356)		1,267		3,897		5,164
Total incurred	2,366,676		310,680		2,677,356		177,112		2,854,468
Paid losses and LAE related to:
Current year	(1,430,072)		(219,234)		(1,649,306)		(111,380)		(1,760,686)
Prior year	(841,613)		(109,653)		(951,266)		(44,611)		(995,877)
Total paid	(2,271,685)		(328,887)		(2,600,572)		(155,991)		(2,756,563)
Acquired losses and LAE reserves	92,574		—		92,574		—		92,574
Disposed losses and LAE reserves	—		(87,890)		(87,890)		—		(87,890)
Net balance at end of the year	1,512,386		140,608		1,652,994		121,612		1,774,606
Plus: Reinsurance recoverable at end of the year	1,016,368		11,266		1,027,634		84,174		1,111,808
Gross balance at end of the year	$	2,528,754	$	151,874	$	2,680,628	$	205,786	$	2,886,414

	Year Ended December 31, 2018
	Property and Casualty		Accident and Health		NGHC		Reciprocal Exchanges		Total
Gross balance at beginning of the year	$	2,270,551	$	249,653	$	2,520,204	$	143,353	$	2,663,557
Less: Reinsurance recoverable at beginning of the year	(1,067,495)		(9,840)		(1,077,335)		(52,408)		(1,129,743)
Net balance at beginning of the year	1,203,056		239,813		1,442,869		90,945		1,533,814
Incurred losses and LAE related to:
Current year	2,182,923		352,322		2,535,245		161,015		2,696,260
Prior year	(4,760)		(30,977)		(35,737)		1,703		(34,034)
Total incurred	2,178,163		321,345		2,499,508		162,718		2,662,226
Paid losses and LAE related to:
Current year	(1,336,359)		(188,014)		(1,524,373)		(110,053)		(1,634,426)
Prior year	(720,039)		(117,653)		(837,692)		(43,119)		(880,811)
Total paid	(2,056,398)		(305,667)		(2,362,065)		(153,172)		(2,515,237)
Unrealized foreign exchange gain	—		(8,786)		(8,786)		—		(8,786)
Net balance at end of the year	1,324,821		246,705		1,571,526		100,491		1,672,017
Plus: Reinsurance recoverable at end of the year	1,182,588		24,575		1,207,163		77,979		1,285,142
Gross balance at end of the year	$	2,507,409	$	271,280	$	2,778,689	$	178,470	$	2,957,159

Gross unpaid losses and loss adjustment expense reserves at December 31, 2019, decreased by $70,745 from December 31, 2018, primarily reflecting lower reserves from catastrophic events.

Prior Year Loss Development, Net of Reinsurance

Prior year loss development is based upon numerous estimates by line of business and accident year. No additional premiums or return premiums have been accrued as a result of the prior year effects.

F-37

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

2020. Loss and LAE for the year ended December 31, 2020, included $4,191 of unfavorable loss development on prior accident year loss and LAE reserves. The $28,012 of unfavorable loss development in the property and casualty segment (including $970 of unfavorable loss development for the Reciprocal Exchanges) was primarily driven by adverse development in the small business auto product line, while the $23,821 of favorable loss development in the accident and health segment was primarily driven by lower than expected loss ratios in the group segment. The changes in our estimates of ultimate claims costs was the result of ongoing analysis of loss emergence.

2019. Loss and LAE for the year ended December 31, 2019, included $5,164 of unfavorable loss development on prior accident year loss and LAE reserves. The $50,520 of unfavorable loss development in the property and casualty segment (including $3,897 of unfavorable loss development for the Reciprocal Exchanges), was primarily driven by adverse development in the small business auto product line, while the $45,356 of favorable loss development in the accident and health segment was primarily driven by overall improvement in loss ratio estimates.

2018. Loss and LAE for the year ended December 31, 2018, included $34,034 of favorable loss development on prior accident year loss and LAE reserves driven by $3,057 of favorable loss development in the property and casualty segment (including $1,703 of unfavorable loss development for the Reciprocal Exchanges), and $30,977 of favorable loss development in the accident and health segment primarily driven by favorable loss development in the domestic accident and health stop loss and short-term medical products.

Short-duration contracts

The following is information by reserving subgroups within segments about incurred and paid claims development as of December 31, 2020, net of reinsurance, as well as cumulative claim frequency and the total of incurred-but-not-reported liabilities (“IBNR”) plus expected development on reported claims included within the net incurred claims amounts. The information about incurred and paid claims development for the years ended prior to December 31, 2020, is presented as unaudited supplementary information.

F-38

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Property and Casualty - auto liability, including recreational vehicles and motorcycles:

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	490,230	$	485,762	$	489,010	$	494,922	$	493,873	$	497,109	$	497,324	$	496,408	$	497,424	$	497,712	$	522	238,319
2012			511,797		522,296		529,140		527,386		528,090		527,531		529,885		531,887		533,045		281		249,890
2013					544,833		556,262		556,290		563,834		567,410		572,538		575,521		575,264		287		250,134
2014							740,531		759,577		760,566		766,640		779,992		783,869		786,619		572		270,161
2015									820,213		838,040		849,051		872,064		892,244		901,823		3,434		291,921
2016											932,350		940,849		976,749		1,005,184		1,017,124		13,710		302,083
2017													929,211		912,370		941,837		968,645		16,952		296,226
2018															1,047,041		1,033,488		1,054,906		79,287		309,025
2019																	1,162,750		1,153,160		169,765		406,201
2020																			1,106,907		455,534		293,834
Total (A)																			$	8,595,205

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	224,676	$	385,749	$	442,365	$	468,059	$	482,861	$	489,191	$	494,145	$	495,833	$	496,680	$	497,044
2012			242,285		413,018		470,515		501,819		518,079		523,703		527,695		530,570		532,182
2013					259,665		440,751		504,569		540,497		559,064		567,949		571,643		573,312
2014							342,710		601,980		694,002		728,256		757,933		773,124		780,972
2015									385,592		679,461		761,150		820,007		864,226		884,717
2016											400,052		737,927		855,407		937,997		978,785
2017													392,084		706,151		832,553		902,264
2018															429,231		777,888		889,127
2019																	470,341		833,977
2020																			425,674
Total (B)																			$	7,298,054
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			1,915
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	1,299,066

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Property and Casualty - auto liability, including recreational vehicles and motorcycles	41.6	%	32.9	%	11.5	%	6.8	%	3.7	%	1.8	%	0.9	%	0.4	%	0.2	%	0.2	%

F-39

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Property and Casualty - auto physical damage, including recreational vehicles, motorcycles and lender placed auto:

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	315,273	$	308,729	$	308,298	$	308,486	$	308,760	$	308,512	$	308,536	$	308,249	$	308,132	$	308,142	$	(2)	298,034
2012			308,056		298,208		295,984		296,257		296,050		295,970		295,026		294,710		294,697		(10)		292,486
2013					335,454		329,049		328,748		328,284		328,262		328,010		327,506		327,503		(26)		285,750
2014							496,227		487,302		486,206		486,383		486,373		486,156		486,146		16		311,603
2015									541,008		544,097		544,769		544,510		544,684		544,677		4		329,111
2016											626,643		622,456		621,717		620,546		620,692		(414)		337,873
2017													600,813		570,699		567,411		566,641		370		385,080
2018															548,063		526,092		530,023		(472)		360,454
2019																	577,970		552,692		2,482		370,057
2020																			560,894		18,588		351,548
Total (A)																			$	4,792,107

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	283,501	$	308,824	$	308,634	$	308,608	$	308,578	$	308,571	$	308,557	$	308,266	$	308,131	$	308,145
2012			268,989		298,381		295,978		295,975		296,029		295,995		294,975		294,702		294,699
2013					291,064		328,832		328,456		328,299		328,280		327,976		327,510		327,522
2014							430,998		487,531		486,364		486,309		486,251		486,108		486,080
2015									478,268		544,754		544,707		544,485		544,699		544,652
2016											542,970		622,930		621,529		621,181		620,963
2017													533,907		568,639		566,918		566,181
2018															483,149		532,083		530,330
2019																	512,072		549,540
2020																			517,035
Total (B)																			$	4,745,147
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			(15)
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	46,945

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Property and Casualty - auto physical damage, including recreational vehicles, motorcycles and lender placed auto	90.6	%	9.6	%	(0.1)	%	—	%	—	%	—	%	(0.1)	%	—	%	—	%	—	%

F-40

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Property and Casualty - homeowners & other property, including lender placed homeowners:

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	506,352	$	499,170	$	498,050	$	498,184	$	497,244	$	495,246	$	494,825	$	495,170	$	495,148	$	495,156	$	1	107,871
2012			485,454		480,353		478,880		477,577		476,538		474,649		476,166		475,792		475,990		7		112,061
2013					306,761		300,868		299,561		296,618		296,907		296,756		296,760		297,159		66		75,918
2014							318,488		306,471		303,925		304,496		304,237		304,350		304,934		279		73,498
2015									357,023		349,559		351,747		353,688		351,305		351,590		1,152		69,920
2016											350,737		341,762		340,711		343,525		344,763		1,481		61,047
2017													402,798		365,092		370,068		362,176		2,096		59,284
2018															327,462		328,721		327,525		4,192		73,117
2019																	247,760		256,369		16,533		66,710
2020																			352,477		52,664		48,924
Total (A)																			$	3,568,139

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	314,139	$	457,480	$	485,054	$	489,778	$	493,408	$	494,198	$	494,525	$	494,904	$	494,922	$	494,950
2012			300,271		452,589		466,266		471,084		473,190		473,781		475,765		475,762		475,964
2013					219,937		279,743		289,302		293,101		295,332		296,383		296,442		296,567
2014							198,781		278,255		289,456		297,640		301,742		303,100		303,660
2015									233,264		319,284		336,921		342,156		345,257		346,554
2016											227,650		320,564		331,102		337,889		341,037
2017													258,234		338,065		349,600		355,265
2018															227,908		298,212		315,302
2019																	172,462		226,895
2020																			249,268
Total (B)																			$	3,405,462
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			930
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	163,607

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Property and Casualty - homeowners & other property, including lender placed homeowners	67.3	%	25.1	%	4.4	%	1.5	%	0.8	%	0.3	%	0.4	%	0.1	%	0.1	%	—	%

F-41

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Accident and Health:

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	4,804	$	4,483	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	—	8,139
2012			4,400		4,227		4,161		4,161		4,161		4,110		4,110		4,110		4,110		—		7,630
2013					23,253		28,578		26,457		26,361		26,272		26,274		26,274		26,265		—		34,173
2014							52,245		52,694		52,311		52,026		52,022		52,034		52,028		—		69,716
2015									176,104		184,586		181,536		181,740		181,717		181,678		—		242,669
2016											215,097		200,817		202,155		201,722		201,850		1		320,319
2017													211,293		186,415		182,865		182,809		135		302,098
2018															234,558		205,152		203,238		364		269,021
2019																	256,745		239,017		4,726		304,234
2020																			296,453		112,869		262,469
Total (A)																			$	1,391,929

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	2,528	$	4,469	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481
2012			3,330		4,095		4,110		4,110		4,161		4,110		4,110		4,110		4,110
2013					15,421		25,754		26,327		26,242		26,154		26,155		26,155		26,147
2014							31,765		52,053		52,405		52,147		52,140		52,153		52,147
2015									123,576		178,918		181,459		181,719		181,696		181,678
2016											125,845		196,421		201,720		201,549		201,849
2017													104,809		178,047		181,519		182,674
2018															126,269		201,457		202,874
2019																	158,345		234,291
2020																			183,585
Total (B)																			$	1,273,836
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			—
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	118,093

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Accident and Health	62.9	%	35.3	%	1.6	%	0.1	%	0.1	%	—	%	—	%	(0.4)	%	0.3	%	—	%

F-42

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Reciprocal Exchanges - auto liability:

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	47,666	$	47,834	$	47,459	$	48,841	$	51,107	$	50,898	$	50,998	$	51,161	$	51,247	$	50,703	$	—	5,065
2012			44,834		47,275		48,044		48,665		50,370		50,767		50,303		50,538		50,606		—		4,999
2013					43,684		44,341		45,479		50,180		51,263		49,854		50,595		50,810		—		5,097
2014							38,656		40,850		45,930		48,246		49,168		49,369		50,055		—		4,873
2015									35,573		33,409		34,390		34,615		34,268		34,962		—		4,335
2016											24,619		24,460		26,109		24,310		24,657		356		4,005
2017													26,214		28,762		28,804		29,806		1,244		4,949
2018															32,339		33,891		35,870		3,540		6,127
2019																	49,757		50,212		11,727		6,262
2020																			40,757		18,459		3,383
Total (A)																			$	418,438

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	15,857	$	26,603	$	35,911	$	41,931	$	46,559	$	49,570	$	50,481	$	50,979	$	51,121	$	50,676
2012			13,568		29,286		37,241		42,768		46,358		48,990		49,836		50,090		50,504
2013					14,683		29,218		35,105		41,787		47,449		48,449		49,605		50,432
2014							13,925		26,070		32,382		39,328		46,001		48,389		49,602
2015									11,910		19,501		24,614		29,538		31,587		33,223
2016											7,516		13,478		16,994		20,567		22,500
2017													9,111		17,136		19,529		23,838
2018															10,755		19,471		24,985
2019																	15,504		28,210
2020																			13,567
Total (B)																			$	347,537
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			27
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	70,928

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Reciprocal Exchanges - auto liability	30.2	%	25.1	%	13.9	%	13.0	%	9.6	%	4.6	%	2.3	%	0.9	%	0.7	%	(0.3)	%

F-43

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Reciprocal Exchanges - auto physical damage:

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	26,936	$	26,055	$	26,022	$	26,060	$	26,037	$	26,029	$	26,023	$	26,028	$	26,028	$	26,027	$	—	12,041
2012			25,752		26,459		26,189		25,914		25,842		25,841		25,845		25,842		25,820		—		11,301
2013					23,375		25,214		25,292		24,709		24,703		24,704		24,704		24,704		—		11,066
2014							29,240		27,424		25,806		25,588		25,882		26,074		26,074		—		11,526
2015									21,247		18,592		18,673		18,789		18,842		18,890		—		10,281
2016											12,270		12,921		12,985		13,213		13,197		—		8,740
2017													15,301		15,410		15,612		15,490		(5)		10,682
2018															19,146		19,272		19,200		108		13,615
2019																	27,212		27,585		(51)		14,549
2020																			21,240		(810)		10,027
Total (A)																			$	218,227

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	28,274	$	26,269	$	26,106	$	26,056	$	26,037	$	26,033	$	26,027	$	26,028	$	26,028	$	26,027
2012			23,760		26,651		26,172		25,914		25,854		25,850		25,845		25,842		25,817
2013					22,651		25,088		24,549		24,725		24,716		24,704		24,704		24,704
2014							24,528		26,165		25,772		25,427		25,685		25,946		26,071
2015									19,080		18,797		18,750		18,748		18,719		18,730
2016											12,579		13,147		13,080		13,137		13,114
2017													15,438		16,141		15,500		15,495
2018															18,925		19,246		19,093
2019																	27,974		27,632
2020																			21,633
Total (B)																			$	218,316
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			—
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	(89)

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Reciprocal Exchanges - auto physical damage	98.4	%	2.6	%	(1.3)	%	0.2	%	—	%	—	%	—	%	—	%	—	%	—	%

F-44

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Reciprocal Exchanges - homeowners & other property:

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	38,470	$	28,869	$	28,511	$	28,209	$	27,954	$	27,950	$	28,002	$	28,075	$	28,095	$	28,144	$	—	6,652
2012			25,289		20,625		21,184		19,971		20,403		20,876		20,251		20,301		20,283		—		8,427
2013					22,638		21,232		20,132		20,309		20,615		20,367		23,109		22,649		—		3,165
2014							27,706		24,846		25,625		26,614		27,141		27,231		27,212		—		4,232
2015									30,081		21,031		21,527		22,007		21,881		22,714		—		5,455
2016											36,838		35,274		34,851		34,501		34,655		78		4,799
2017													48,222		50,871		51,852		51,477		648		8,830
2018															76,925		78,166		77,582		1,471		12,998
2019																	65,888		65,380		3,312		12,238
2020																			68,723		10,427		9,349
Total (A)																			$	418,819

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	21,474	$	24,997	$	25,799	$	26,700	$	27,661	$	27,656	$	27,692	$	27,758	$	27,803	$	27,825
2012			11,087		18,021		19,367		19,847		19,961		20,668		20,121		20,256		20,238
2013					11,277		17,435		18,107		19,104		19,653		19,626		20,232		22,731
2014							15,344		22,834		23,820		25,230		26,170		27,003		27,115
2015									12,979		18,518		19,834		20,339		20,733		21,994
2016											20,978		30,615		31,632		32,933		33,399
2017													33,166		46,003		47,517		49,506
2018															55,519		69,672		72,859
2019																	45,432		58,788
2020																			44,371
Total (B)																			$	378,826
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			2,658
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	42,651

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Reciprocal Exchanges - homeowners & other property	64.9	%	22.8	%	3.3	%	2.5	%	1.3	%	1.8	%	1.0	%	0.8	%	0.5	%	1.1	%

F-45

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

The reconciliation of the net incurred and paid claims development tables to the liability for unpaid loss and LAE reserves is as follows:

	December 31, 2020
Net outstanding liabilities:
Property and Casualty - Auto Liability	$	1,299,066
Property and Casualty - Auto Physical Damage	46,945
Property and Casualty - Homeowners and Other Property	163,607
Accident and Health	118,093
Reciprocal Exchanges - Auto Liability	70,928
Reciprocal Exchanges - Auto Physical Damage	(89)
Reciprocal Exchanges - Homeowners and Other Property	42,651
Net reserve for claims and allocated claim adjustment expenses	$	1,741,201
Reinsurance recoverable(1):
Property and Casualty - Auto Liability	$	766,929
Property and Casualty - Auto Physical Damage	8,198
Property and Casualty - Homeowners and Other Property	124,090
Accident and Health	21,697
Reciprocal Exchanges - Auto Liability	28,745
Reciprocal Exchanges - Auto Physical Damage	557
Reciprocal Exchanges - Homeowners and Other Property	48,312
Reinsurance recoverable on unpaid claims and allocated claim adjustment expenses	$	998,528
Insurance lines other than short-duration	$	35,688
Acquisition	17,488
Unallocated claims adjustment expenses (“ULAE”)	96,193
Subtotal	$	149,369
Gross reserve for claims and claim adjustment expenses	$	2,889,098

(1) Includes $535,433 from MCCA and $157,611 from NCRF. See Note 10, “Reinsurance” for additional information.

F-46

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

The reconciliation of the net incurred and paid loss information in the loss reserve rollforward table and loss development tables with respect to the current accident year is as follows:

	2020 - Current Accident Year Incurred								2020 - Current Accident Year Paid
	Property and Casualty		Accident and Health		Reciprocal Exchanges		Total		Property and Casualty		Accident and Health		Reciprocal Exchanges		Total
Rollforward table	$	2,323,797	$	342,714	$	153,380	$	2,819,891	$	1,432,498	$	209,319	$	94,287	$	1,736,104
Development tables	2,020,278		296,453		130,720		2,447,451		1,191,977		183,585		79,571		1,455,133
Variance	$	303,519	$	46,261	$	22,660	$	372,440	$	240,521	$	25,734	$	14,716	$	280,971
Unallocated claims adjustment expenses	$	303,112	$	15,883	$	22,660	$	341,655	$	240,263	$	10,539	$	14,716	$	265,518
Long-duration contracts	—		30,789		—		30,789		—		15,449		—		15,449
Other	407		(411)		—		(4)		258		(254)		—		4
Variance	$	303,519	$	46,261	$	22,660	$	372,440	$	240,521	$	25,734	$	14,716	$	280,971

The reconciliation of the net incurred and paid loss information in the loss reserve rollforward table and loss development tables with respect to the prior accident year is as follows:

	2020 - Prior Accident Year Incurred								2020 - Prior Accident Year Paid
	Property and Casualty		Accident and Health		Reciprocal Exchanges		Total		Property and Casualty		Accident and Health		Reciprocal Exchanges		Total
Rollforward table	$	27,042	$	(23,821)	$	970	$	4,191	$	827,745	$	90,952	$	53,317	$	972,014
Development tables	44,333		(19,624)		4,162		28,871		734,614		78,786		50,568		863,968
Variance	$	(17,291)	$	(4,197)	$	(3,192)	$	(24,680)	$	93,131	$	12,166	$	2,749	$	108,046
Unallocated claims adjustment expenses	$	(8,881)	$	(1,285)	$	(3,586)	$	(13,752)	$	58,163	$	3,395	$	2,556	$	64,114
Accident years prior to 2011	(493)		—		394		(99)		1,442		—		193		1,635
Long-duration contracts	—		(2,912)		—		(2,912)		—		8,771		—		8,771
Acquisition	(7,917)		—		—		(7,917)		33,526		—		—		33,526
Variance	$	(17,291)	$	(4,197)	$	(3,192)	$	(24,680)	$	93,131	$	12,166	$	2,749	$	108,046

The $44,333 of unfavorable prior year loss development for Property and Casualty on a combined basis for the incurred loss development tables relates to Loss and Allocated Claims Adjustment Expenses (“ALAE”), which does not include ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. The reserve rollforward table shows prior year loss development for Loss and LAE, which includes loss development from ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. Favorable prior year loss development of $17,291 in total attributable to liabilities excluded from the incurred loss development tables resulted in total P&C Loss and LAE unfavorable prior year loss development of $27,042 shown in the reserve rollforward table.

The $19,624 of favorable prior year loss development for Accident and Health shown in the incurred loss development table relates to Loss and ALAE, which does not include ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. The reserve rollforward table shows prior year loss development for Loss and LAE, which includes prior year loss development from ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. Favorable prior year loss development of $4,197 in total attributable to liabilities excluded from the incurred loss development table resulted in total Accident and Health Loss and LAE favorable prior year loss development of $23,821 shown in the reserve rollforward table.

F-47

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

The $4,162 of unfavorable prior year loss development for the Reciprocal Exchanges on a combined basis for the incurred loss development tables relates to Loss and ALAE, which does not include ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. The reserve rollforward table shows prior year loss development for Loss and LAE, which includes loss development from ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. Favorable prior year loss development of $3,192 in total attributable to liabilities excluded from the incurred loss development tables resulted in total Reciprocal Exchanges Loss and LAE unfavorable prior year loss development of $970 shown in the reserve rollforward table.

Methodology for Estimating Incurred-But-Not-Reported Reserves

Loss and LAE reserves represent management's estimate of the ultimate liability for claims that have been reported and claims that have been incurred but not yet reported as of the balance sheet date. Because the establishment of loss and LAE reserves is a process involving estimates and judgment, currently estimated reserves may change. The Company reflects changes to the reserves in the results of operations for the period during which the estimates are changed.

Incurred-but-not-reported reserve estimates are generally calculated by first projecting the ultimate cost of all claims that have occurred and then subtracting reported losses and loss expenses. Reported losses include cumulative paid losses and loss expenses plus case reserves. Therefore, the IBNR also includes provision for expected development on reported claims.

The Company’s internal actuarial analysis of the historical data provides the factors the Company uses in its actuarial analysis in estimating its loss and LAE reserves. These factors are implicit measures over time of claims reported, average case incurred amounts, case development, severity and payment patterns. However, these factors cannot be directly used as they do not take into consideration changes in business mix, claims management, regulatory issues, medical trends, and other subjective factors. In accordance with Actuarial Standards of Practice, the Company generally uses multiple traditional methods in determining our estimates of the ultimate unpaid claim liabilities. Each of these methods require actuarial judgment and assumptions. The techniques can include, but are not limited to:

•Paid Development Method - uses historical, cumulative paid losses by accident year and develops those actual losses to estimated ultimate losses based upon the assumption that each accident year will develop to estimated ultimate cost in a manner that is analogous to prior years.

•Paid Generalized Cape Cod Method - combines the Paid Development Method with the expected loss method, where the expected loss ratios are estimated from exposure and claims experience weighted across multiple accident periods. The selected expected loss ratio for a given accident year is derived by giving some weight to all of the accident years in the experience history rather than treating each accident year independently.

•Paid Bornhuetter-Ferguson Method - a combination of the Paid Development Method and the Expected Loss Method, the Paid Bornhuetter-Ferguson Method estimates ultimate losses by adding actual paid losses and projected future unpaid losses. The amounts produced are then added to cumulative paid losses to produce the final estimates of ultimate incurred losses.

•Incurred Development Method - uses historical, cumulative incurred losses by accident year and develops those actual losses to estimated ultimate losses based upon the assumption that each accident year will develop to estimated ultimate cost in a manner that is analogous to prior years.

•Incurred Generalized Cape Cod Method - combines the Incurred Development Method with the expected loss method, where the expected loss ratios are estimated from exposure and claims experience weighted across multiple accident periods. The selected expected loss ratio for a given accident year is derived by giving some weight to all of the accident years in the experience history rather than treating each accident year independently.

•Incurred Bornhuetter - Ferguson Method - a combination of the Incurred Development Method and the Expected Loss Method, the Incurred Bornhuetter-Ferguson Method estimates ultimate losses by adding

F-48

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

actual incurred losses and projected future unreported losses. The amounts produced are then added to cumulative incurred losses to produce an estimate of ultimate incurred losses.

•Expected Loss Method - utilizes an expected ultimate loss ratio based on historical experience adjusted for trends multiplied by earned premium to project ultimate losses.

For each method, losses are projected to the ultimate amount to be paid. The Company then analyzes the results and may emphasize or deemphasize some or all of the outcomes to reflect actuarial judgment regarding their reasonableness in relation to supplementary information and operational and industry changes. These outcomes are then aggregated to produce a single selected point estimate that is the basis for the internal actuary’s point estimate for loss reserves.

Methodology for Determining Cumulative Number of Reported Claims

When the Company is notified of an incident of potential liability that may lead to demand for payment(s), a claim file is created. Methods used to summarize claim counts have not changed significantly over the time periods reported in the tables above. The methodology of counting claims for each of the Company’s segments may be summarized as follows:

Property and Casualty

The Company’s P&C claims are counted by claim number assigned to each claimant per insured event. However, if an insured event occurs and demand for payment is made with respect to more than one coverage (e.g., an automobile claim arising from the same incident demanding separate payment for liability and physical damage), there would be one claim counted for each coverage for which a demand for payment was made. Claims closed without payment are included in the cumulative number of reported P&C claims.

Accident and Health

The Company’s A&H claims are counted by claim number assigned to each claimant per illness, injury or death, regardless of number of services rendered for each incident. Claims closed without payment are not included in the cumulative number of reported A&H claims.

Reciprocal Exchanges

The Company’s Reciprocal Exchanges claims are counted by claim number assigned to each claimant per insured event. However, if an insured event occurs and demand for payment is made with respect to more than one statutory annual statement line of business (e.g., an automobile claim arising from the same incident demanding separate payment for liability and physical damage), there would be one claim counted for each line of business for which a demand for payment was made. Claims closed without payment are not included in the cumulative number of reported Reciprocal Exchanges claims.

F-49

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

10. Reinsurance

The Company utilizes various excess of loss, quota share, state-based industry pools or facilities, and catastrophe reinsurance programs to limit its exposure. Reinsurance agreements transfer portions of the underlying risk on the business the Company writes. Reinsurance does not discharge or diminish the Company’s obligation to pay claims covered by the insurance policies it issues; however, it does permit the Company to recover certain incurred losses from its reinsurers and the Company’s reinsurance recoveries reduce the maximum loss that it may incur as a result of a covered loss event. The Company’s reinsurers generally carry at least an A.M. Best rating of “A-” (Excellent) or the reinsurance recoverable balances are collateralized. The Company also maintains funds held liabilities under the auto quota share reinsurance agreement. The total amount, cost and limits relating to the reinsurance coverage the Company purchases may vary from year to year based upon a variety of factors, including the availability of quality reinsurance at an acceptable price and the level of risk that the Company chooses to retain for its account.

The Company assumes and cedes insurance risks under various reinsurance agreements, on both a pro-rata basis and excess of loss basis. The Company purchases reinsurance to mitigate the volatility of direct and assumed business, which may be caused by the aggregate value or the concentration of written exposures in a particular geographic area or business segment and may arise from catastrophes or other events. The Company pays a premium as consideration for ceding the risk.

Reinsurance recoverable is as follows:

	December 31,
	2020		2019
Reinsurance recoverable on paid losses	$	221,212	$	282,500
Reinsurance recoverable on unpaid losses	998,528		1,111,808
Allowance for uncollectible reinsurance	(810)		—
Reinsurance recoverable, net	$	1,218,930	$	1,394,308

The following is the effect of reinsurance on unpaid loss and LAE reserves and unearned premiums:

	December 31,
	2020				2019
	Assumed		Ceded		Assumed		Ceded
Unpaid loss and LAE reserves	$	27,568	$	998,528	$	50,884	$	1,111,808
Unearned premiums	18,845		414,010		15,278		575,747

The following is the effect of reinsurance on premiums and loss and LAE:

	Year Ended December 31,
	2020				2019				2018
Premium:	Written		Earned		Written		Earned		Written		Earned
Direct	$	5,574,550	$	5,613,630	$	5,508,245	$	5,486,835	$	5,317,742	$	5,049,512
Assumed	59,997		56,430		74,835		80,572		99,097		123,265
Total Gross Premium	5,634,547		5,670,060		5,583,080		5,567,407		5,416,839		5,172,777
Ceded	(1,013,703)		(1,175,440)		(1,358,459)		(1,449,365)		(1,589,126)		(1,440,575)
Net Premium	$	4,620,844	$	4,494,620	$	4,224,621	$	4,118,042	$	3,827,713	$	3,732,202

F-50

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

	Year Ended December 31,
	2020				2019				2018
	Assumed		Ceded		Assumed		Ceded		Assumed		Ceded
Loss and LAE	$	9,713	$	729,628	$	32,745	$	801,041	$	29,290	$	1,041,286

Reinsurance Agreements

In 2017, the Company entered into an Auto Quota Share Agreement (the “Auto Quota Share Agreement”) covering the Company’s auto lines of business. Effective January 1, 2019, the Company ceded 7.0% of net liability. On July 1, 2019, the Company renewed its Auto Quota Share Agreement for a two-year term. Effective July 1, 2019, the Company ceded 10.0% of net liability. The Company receives a 31.2% provisional ceding commission on premiums ceded to the reinsurer during the term of the Auto Quota Share Agreement, subject to a sliding scale adjustment to a maximum of 32.8% if the loss ratio for the reinsured business is 64.7% or less and a minimum of 30.0% if the loss ratio is 67.5% or higher. Effective January 1, 2020, the Company cedes 5.0% of net liability under new and renewal auto policies written.

In 2017, the Company entered into a Homeowners Quota Share Agreement (the “HO Quota Share Agreement”) covering the Company’s homeowners line of business. On July 1, 2019, the Company renewed its HO Quota Share Agreement for a one-year term. Effective July 1, 2019, the Company ceded 40.0% of net liability and received a 36.0% ceding commission on new and renewal business and a portion of the in-force business. A portion of the in-force business is being run-off under the prior agreements. On July 1, 2020, the Company renewed its HO Quota Share Agreement for a one-year term. Effective July 1, 2020, the Company cedes 20.0% of net liability and receives a 37.0% ceding commission on in-force, new and renewal business.

Effective May 1, 2020, with additional purchases made at June 1, 2020, and July 1, 2020, the Company renewed its property catastrophe excess of loss program, protecting the Company against catastrophic events and other large losses. The program provides coverage up to $650,000 with one reinstatement and attaches at $70,000 for the first event and $50,000 for the second event. The Company purchased additional first event coverage for named wind that attaches at $50,000. Effective October 1, 2020, the Company’s casualty program provides $35,000 in coverage in excess of a $5,000 retention.

Reciprocal Exchanges

In 2019, the Reciprocal Exchanges entered into a personal lines quota share agreement for a one-year term. The Reciprocal Exchanges ceded 42.3% of net liability on new and renewal homeowners multiple peril, dwelling fire, and automobile physical damage (comprehensive only) policies written in the states of New Jersey and New York. Effective July 1, 2020, the Reciprocal Exchanges renewed their personal lines quota share agreement for a one-year term, ceding 42.0% combined weighted average of net liability. This includes a 55.0% quota share covering homeowners multiple peril, dwelling fire, and automobile physical damage (comprehensive only) policies written in the states of New Jersey and New York as well as a 25.0% quota share on automobile liability and collision coverages.

Effective July 1, 2020, the Reciprocal Exchanges’ property catastrophe excess of loss program provided coverage up to $475,000 with a $20,000 retention, and one reinstatement. Effective July 17, 2020, the Company purchased an additional $125,000 of top layer coverage.

Industry Pools and Facilities

The Company’s reinsurance programs include premiums written under state-mandated involuntary plans for automobile, motorcycle and commercial vehicles and premiums ceded to state-provided reinsurance facilities such as Michigan Catastrophic Claims Association (“MCCA”) and North Carolina Reinsurance Facility (“NCRF”), for

F-51

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

which the Company retains no loss indemnity risk. Prepaid reinsurance premiums are recognized on a pro-rata basis over the period of risk, consistent with premiums written.

MCCA is a reinsurance mechanism that covers no-fault first party medical losses of retentions in excess of $580 until June 30, 2021. Insurers are reimbursed for their covered losses in excess of this threshold. All automobile insurers doing business in Michigan are required to participate in MCCA. Funding for MCCA comes from assessments against automobile insurers based upon their share of insured automobiles in the state. Insurers are allowed to pass along this cost to Michigan automobile policyholders.

Reinsurance recoverable from MCCA are as follows:

	December 31,
	2020		2019
Reinsurance recoverable on paid losses	$	10,221	$	9,940
Reinsurance recoverable on unpaid losses	535,433		548,370
Allowance for uncollectible reinsurance	—		—
Reinsurance recoverable, net	$	545,654	$	558,310

The following is a summary of premiums and losses ceded to MCCA:

	Year Ended December 31,
	2020		2019		2018
Ceded earned premiums	$	7,856	$	9,867	$	9,676
Ceded Loss and LAE	3,624		(23,616)		(54,105)

NCRF is a mechanism for pooling of insurance risks for insureds who cannot obtain coverage by ordinary methods. Under the Facility law, licensed and writing carriers and agents must accept and insure any eligible applicant for coverages and limits which may be ceded to the Facility. The Facility accepts cession of bodily injury and property damage liability, medical payments, and uninsured and combined uninsured/underinsured motorist’s coverages. Funding for the NCRF comes from collected premiums from automobile insurers based upon the provided coverage of the insured automobiles in the state.

Reinsurance recoverable from NCRF are as follows:

	December 31,
	2020		2019
Reinsurance recoverable on paid losses	$	35,684	$	44,759
Reinsurance recoverable on unpaid losses	157,611		146,496
Allowance for uncollectible reinsurance	—		—
Reinsurance recoverable, net	$	193,295	$	191,255

The following is a summary of premiums and losses ceded to NCRF:

	Year Ended December 31,
	2020		2019		2018
Ceded earned premiums	$	236,837	$	234,370	$	232,270
Ceded Loss and LAE	208,316		222,796		210,297

The Company believes that it is unlikely to incur any material loss as a result of non-payment of amounts owed to the Company by MCCA and NCRF because (i) the payment obligations are extended over many years, resulting in relatively small current payment obligations, (ii) both MCCA and NCRF are supported by assessments permitted by statute, and (iii) the Company has not historically incurred losses as a result of non-payment. Because MCCA and

F-52

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

NCRF are supported by assessments permitted by statute, and there have been no significant and uncollectible balances from MCCA and NCRF, the Company believes that it has no significant exposure to uncollectible reinsurance balances from these entities.

The Company has a concentration of credit risk associated with its reinsurance recoverable and premiums ceded to reinsurers. The following tables present information for each reinsurer by reinsurance recoverable, prepaid reinsurance and funds held balances:

		Recoverable on
December 31, 2020	A.M. Best Rating	Unpaid Losses		Paid Losses		Allowance for uncollectible reinsurance		Prepaid Reinsurance		Funds Held		Net
Reinsurer:
MCCA	NR (1)	$	535,433	$	10,221	$	—	$	1,251	$	—	$	546,905
NCRF	NR (1)	157,611		35,684		—		92,783		—		286,078
Hannover Ruck SE	A+	74,485		47,726		—		68,167		(149,402)		40,976
Other reinsurers' balances - each less than 5% of total (2)	—	230,999		127,581		(810)		251,809		(19,606)		589,973
Total		$	998,528	$	221,212	$	(810)	$	414,010	$	(169,008)	$	1,463,932
NGHC		$	920,914	$	173,137	$	(636)	$	324,160	$	(153,903)	$	1,263,672
Reciprocal Exchanges		77,614		48,075		(174)		89,850		(15,105)		200,260
Total		$	998,528	$	221,212	$	(810)	$	414,010	$	(169,008)	$	1,463,932

		Recoverable on
December 31, 2019	A.M. Best Rating	Unpaid Losses		Paid Losses		Prepaid Reinsurance		Funds Held		Net
Reinsurer:
MCCA	NR (1)	$	548,370	$	9,940	$	3,927	$	—	$	562,237
NCRF	NR (1)	146,496		44,759		88,022		—		279,277
Hannover Ruck SE	A+	155,223		101,064		134,878		(254,558)		136,607
Other reinsurers' balances - each less than 5% of total (2)	—	261,719		126,737		348,920		(4,884)		732,492
Total		$	1,111,808	$	282,500	$	575,747	$	(259,442)	$	1,710,613
NGHC		$	1,027,634	$	247,549	$	469,853	$	(259,442)	$	1,485,594
Reciprocal Exchanges		84,174		34,951		105,894		—		225,019
Total		$	1,111,808	$	282,500	$	575,747	$	(259,442)	$	1,710,613

(1) NR - not rated by A.M. Best.

(2) Rated A- or higher by A.M. Best or collateralized.

Funds held for reinsurers are recorded within reinsurance payable in the consolidated balance sheets. Additionally, collateral is available to the Company in the form of letters of credit and trust agreements in the amounts of $245,049 and $143,069, as of December 31, 2020, and 2019, respectively.

F-53

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

11. Debt

The following table represents the Company’s debt:

			December 31,
	Interest Rate	Maturity	2020		2019
Fixed-rate:
6.75% Notes	6.75%	2024	$	350,000	$	350,000
7.625% Notes	7.625%	2055	100,000		100,000
Floating-rate:
Subordinated Debentures I (1)	LIBOR + 3.40%	2035	41,238		41,238
Subordinated Debentures II (2)	LIBOR + 4.25%	2037	30,930		30,930
2019 Credit Agreement (3)	LIBOR + 1.75%	2023	140,000		140,000
Finance lease liabilities	Various	Various	16,690		20,477
Other	3.5%	Various	3,194		9,342
Unamortized debt issuance costs and unamortized discount			(5,242)		(5,981)
Total carrying amount of debt			$	676,810	$	686,006

(1) Interest rate was 3.62% and 5.29%, as of December 31, 2020, and 2019, respectively.

(2) Interest rate was 4.47% and 6.14%, as of December 31, 2020, and 2019, respectively.

(3) Weighted-average interest rate was 4.00% and 3.59% as of December 31, 2020, and 2019, respectively.

The following table presents the Company’s interest expense:

		Year Ended December 31,
	Interest Payment Frequency	2020		2019		2018
6.75% Notes	Semiannually	$	23,625	$	23,625	$	23,625
7.625% Notes	Quarterly	7,625		7,625		7,625
Subordinated Debentures	Quarterly	3,287		4,536		4,346
2016 Credit Agreement	Quarterly	—		1,211		7,491
2019 Credit Agreement	Quarterly	3,421		5,340		—
Finance lease liabilities	Various	1,150		1,176		621
Other(1)	Various	(5,336)		8,031		7,717
Total interest expense		$	33,772	$	51,544	$	51,425

(1) Includes interest for other liabilities, interest credited on funds held balances and accretion of debt issuance costs.

Notes

The 6.75% Notes are the Company’s general unsecured obligations and rank (i) equally in right of payment with its other existing and future senior unsecured indebtedness and (ii) senior in right of payment to any of its indebtedness that is contractually subordinated to the 6.75% Notes. The 6.75% Notes are also effectively subordinated to any of the Company’s existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness and are structurally subordinated to the existing and future indebtedness of the Company’s subsidiaries (including trade payables). The 6.75% Notes mature on May 15, 2024, unless earlier redeemed or purchased by the Company.

F-54

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

The 7.625% Notes were the Company’s subordinated unsecured obligations and ranked (i) senior in right of payment to any future junior subordinated debt, (ii) equal in right of payment with any unsecured, subordinated debt that the Company incurs in the future that ranks equally with the 7.625% Notes, and (iii) subordinate in right of payment to any of the Company’s existing and future senior debt, including amounts outstanding under the Company’s revolving credit facility, the Company’s 6.75% notes and certain of the Company’s other obligations. Also, the 7.625% Notes were structurally subordinated to all existing and future indebtedness, liabilities, and other obligations of the Company’s subsidiaries. The 7.625% Notes were schedule to mature on September 15, 2055. See Note 22, “Subsequent Events” for additional information.

Subordinated Debentures

The Company, through a subsidiary, is the issuer of junior subordinated debentures (the “Subordinated Debentures”) relating to the issuance of trust preferred securities. The Subordinated Debentures require interest-only payments to be made quarterly, with principal due at maturity. The Subordinated Debentures’ principal amounts of $41,238 and $30,930 mature in 2035 and 2037, respectively, and bear interest at an annual rate equal to LIBOR plus 3.40% and LIBOR plus 4.25%, respectively. The Subordinated Debentures are redeemable by the Company at a redemption price equal to 100% of their principal amount. The Subordinated Debentures have been called for redemption and are expected to be redeemed in full on March 15, 2021.

Credit Agreement

In 2019, the Company refinanced its existing credit agreement and entered into a new credit agreement (the “2019 Credit Agreement”), with JPMorgan Chase Bank, N.A., as Administrative Agent, KeyBank National Association and Fifth Third Bank, as Co-Syndication Agents, and the various lending institutions party thereto. The 2019 Credit Agreement was a $340,000 base revolving credit facility with a letter of credit sub-limit of $150,000 and an expansion feature of up to $50,000. Borrowings under the 2019 Credit Agreement bore interest at either the Alternate Base Rate (“ABR”) or the LIBOR rate. ABR borrowings under the 2019 Credit Agreement bore interest at the greatest of (a) the prime rate in effect on such day, (b) the federal funds effective rate on such day plus 0.5 percent, or (c) the adjusted LIBOR rate for a one-month interest period on such day plus 1 percent. Eurodollar borrowings under the 2019 Credit Agreement bore interest at the adjusted LIBOR rate plus the Eurodollar spread for the interest period in effect. Fees payable by the Company under the 2019 Credit Agreement included a letter of credit participation fee, a letter of credit fronting fee with respect to each letter of credit (0.125%), and a commitment fee on the available commitments of the lenders (a range of 0.175% to 0.25% based on the Company’s consolidated leverage ratio; and as of December 31, 2020, the rate was 0.225%). The 2019 Credit Agreement had a maturity date of February 25, 2023.

Maturities of the Company’s debt for the years subsequent to December 31, 2020 are as follows:

	2021		2022		2023		2024		2025 and thereafter		Total
6.75% Notes	$	—	$	—	$	—	$	350,000	$	—	$	350,000
7.625% Notes (1)	—		—		—		—		100,000		100,000
Subordinated Debentures I	—		—		—		—		41,238		41,238
Subordinated Debentures II	—		—		—		—		30,930		30,930
2019 Credit Agreement (2)	—		—		140,000		—		—		140,000
Finance lease liabilities	5,986		3,875		2,433		1,436		2,960		16,690
Other	3,194		—		—		—		—		3,194
Total principal amount of debt	$	9,180	$	3,875	$	142,433	$	351,436	$	175,128	$	682,052
Unamortized debt issuance costs and unamortized discount											(5,242)
Carrying amount of debt											$	676,810

(1) Were repaid on February 3, 2021.

(2) Was repaid on January 4, 2021.

F-55

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Covenants and Compliance

The indenture relating to the 6.75% Notes and 7.625% Notes contains customary covenants, such as reporting of annual and quarterly financial results, and restrictions on certain mergers and consolidations, as well as covenants relating to the incurrence of debt if the Company’s consolidated leverage ratio would exceed 0.35 to 1.00, a limitation on liens, a limitation on the disposition of stock of certain of the Company’s subsidiaries and a limitation on transactions with certain of the Company’s affiliates.

The 2019 Credit Agreement contained certain restrictive covenants customary for facilities of its type (subject to negotiated exceptions and baskets), including restrictions on indebtedness, liens, acquisitions and investments, restricted payments and dispositions. There were also financial covenants that require the Company to maintain a minimum consolidated net worth, a maximum consolidated leverage ratio, a minimum risk-based capital and a minimum rating.

The 2019 Credit Agreement also provided for customary events of default, with grace periods where customary, including failure to pay principal when due, failure to pay interest or fees within three business days after becoming due, failure to comply with covenants, breaches of representations and warranties, default under certain other indebtedness, certain insolvency or receivership events affecting the Company and its subsidiaries, the occurrence of certain material judgments, or a change in control of the Company. Upon the occurrence and during the continuation of an event of default, the administrative agent, upon the request of the requisite percentage of the lenders, may have terminated the obligations of the lenders to make loans and to issue letters of credit under the 2019 Credit Agreement, declared the Company’s obligations under the 2019 Credit Agreement to become immediately due and payable and/or exercised any and all remedies and other rights under the 2019 Credit Agreement.

As of December 31, 2020, the Company was in compliance with the covenants contained in the Company’s debt agreements.

See Note 22, “Subsequent Events” for additional information on debt instruments.

F-56

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

12. Income Taxes

The Company files a consolidated Federal income tax return and is a party to a Federal income tax allocation agreement. Under the tax allocation agreement, each subsidiary computes and pays to the Company its respective share of the federal income tax liability primarily based on separate return calculations. The Reciprocal Exchanges are not included in the Company’s consolidated tax return as the Company does not have an ownership interest in the Reciprocal Exchanges, and they are not a part of the consolidated tax sharing agreement among the Company and its subsidiaries.

Federal income tax expense consisted of the following:

	Year Ended December 31,
	2020						2019						2018
	NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total
Current tax expense (benefit)
Federal	$	115,416	$	7	$	115,423	$	69,985	$	(2,257)	$	67,728	$	27,039	$	(2,290)	$	24,749
Foreign	213		—		213		2,621		—		2,621		1,376		—		1,376
Total current tax expense (benefit)	$	115,629	$	7	$	115,636	$	72,606	$	(2,257)	$	70,349	$	28,415	$	(2,290)	$	26,125
Deferred tax expense (benefit)
Federal	$	19,048	$	1,777	$	20,825	$	13,497	$	(6,833)	$	6,664	$	28,015	$	(1,260)	$	26,755
Foreign	—		—		—		—		—		—		604		—		604
Total deferred tax expense (benefit)	$	19,048	$	1,777	$	20,825	$	13,497	$	(6,833)	$	6,664	$	28,619	$	(1,260)	$	27,359
Provision (benefit) for income taxes	$	134,677	$	1,784	$	136,461	$	86,103	$	(9,090)	$	77,013	$	57,034	$	(3,550)	$	53,484

The domestic and foreign components of income before taxes are as follows:

	Year Ended December 31,
	2020						2019						2018
	NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total
Domestic	$	608,186	$	12,661	$	620,847	$	358,079	$	(29,729)	$	328,350	$	244,463	$	(43,380)	$	201,083
Foreign	39,822		—		39,822		76,093		—		76,093		19,925		—		19,925
Income (loss)	$	648,008	$	12,661	$	660,669	$	434,172	$	(29,729)	$	404,443	$	264,388	$	(43,380)	$	221,008

The TCJA included provisions for Global Intangible Low-Taxed Income (“GILTI”), which imposes a minimum tax on global intangible low-tax income, defined as the excess income of foreign subsidiaries over a 10 percent rate of routine return on tangible business assets, and for Base Erosion and Anti-Abuse tax (“BEAT”) which imposes tax on certain base eroding payments to affiliated foreign companies. Consistent with accounting guidance, the Company treats both GILTI and BEAT as an in period tax charges when incurred in future periods for which no deferred taxes need be provided. The Company analyzed the impact of both GILTI and BEAT on its operations for the period and determined that for the year ended December 31, 2020, the Company was subject to GILTI but was not subject to the BEAT.

F-57

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Deferred income taxes are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. The tax effects of temporary differences that give rise to the net deferred tax asset or liability are presented below based upon the 2020 enacted rate of 21%.

	December 31,
	2020						2019
	NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total
Deferred tax assets:
Accrued expenses	$	7,577	$	289	$	7,866	$	3,178	$	683	$	3,861
Unearned premiums and other revenue	71,872		4,242		76,114		64,155		5,146		69,301
Bad debt	4,628		281		4,909		4,876		114		4,990
Loss reserve discount	13,071		1,167		14,238		10,355		1,042		11,397
Net operating loss carryforwards	107,869		11,175		119,044		102,535		13,962		116,497
Surplus note interest	—		—		—		2,081		—		2,081
Other	7,773		2,099		9,872		9,740		4,882		14,622
Gross deferred tax assets	212,790		19,253		232,043		196,920		25,829		222,749
Less: Valuation allowance	(72,212)		(5,670)		(77,882)		(65,257)		(6,523)		(71,780)
Total deferred tax assets	140,578		13,583		154,161		131,663		19,306		150,969
Deferred tax liabilities:
Deferred acquisition costs	52,719		4,032		56,751		49,828		4,894		54,722
Intangible assets	39,348		632		39,980		36,495		700		37,195
Goodwill	4,418		—		4,418		4,204		—		4,204
Property and equipment	39,160		—		39,160		28,922		—		28,922
Investments	4,390		107		4,497		—		—		—
Deferred commissions	18,875		—		18,875		—		—		—
Surplus note interest	—		10,747		10,747		—		13,828		13,828
Unrealized capital gains	54,016		1,080		55,096		19,870		1,062		20,932
Other	—		—		—		11,671		81		11,752
Gross deferred tax liabilities	212,926		16,598		229,524		150,990		20,565		171,555
Deferred tax asset	$	—	$	—	$	—	$	—	$	—	$	—
Deferred tax liability	$	(72,348)	$	(3,015)	$	(75,363)	$	(19,327)	$	(1,259)	$	(20,586)

Excluding the Reciprocal Exchanges, there were $72,212 and $65,257 of deferred tax asset valuation allowances as of December 31, 2020, and 2019, respectively. In assessing the reliability of gross deferred tax assets, management considers whether it is more likely than not that some portion or all of the gross deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. During 2019 the Company recognized significant increases in its Net Operating Loss carryforwards (“NOL”) related to foreign operations. Management believes that it is more likely than not that the results of future operations will not generate sufficient taxable income to realize all of the deferred tax assets related to the NOLs from foreign operations within a reasonable time period. As such, the Company recorded a change in valuation allowance of $6,954 against these NOLs.

For the Reciprocal Exchanges, the Company had a partial valuation allowance against the net deferred tax assets as of December 31, 2020, and 2019, respectively, and no tax benefit from consolidated pre-tax losses generated for the years ended December 31, 2020, and 2019, was recognized. For the year ended December 31, 2020, New Jersey Skylands Insurance Association (“NJSIA”) had negative evidence in the form of a multi-year history of net operating losses for tax purposes that supported the determination that the realized net deferred tax asset should be fully reserved.

F-58

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Excluding the Reciprocal Exchanges, the Company had U.S. federal NOLs of $62,731, $67,406 and $58,082 available for tax purposes for the years ended December 31, 2020, 2019, and 2018, respectively. The NOLs expire between December 31, 2029 and December 31, 2037.

The Reciprocal Exchanges had NOLs of $53,214, $66,484 and $54,300 available for the years ended December 31, 2020, 2019, and 2018, respectively. The NOLs expire between December 31, 2020 and December 31, 2039.

The Company’s income tax expense (benefit) differs from the statutory U.S. federal amount computed by applying the federal income tax rate of 21% for the years ended December 31, 2020, 2019, and 2018. The reasons for such differences are as follows:

	Year Ended December 31, 2020
	NGHC			Tax Rate		Reciprocal Exchanges			Tax Rate		Total			Tax Rate
Income before provision for income taxes	$	648,008				$	12,661				$	660,669
Tax rate	21.0		%			21.0		%			21.0		%
Computed “expected” tax expense	$	136,082		21.0	%	$	2,659		21.0	%	$	138,741		21.0	%
Tax effects resulting from:
Tax-exempt interest	(486)			(0.1)		(13)			(0.1)		(499)			(0.1)
Effect of foreign operations	351			0.1		—			—		351			0.1
State taxes	1,556			0.2		—			—		1,556			0.2
Change in valuation allowance	6,954			1.1		(903)			(7.1)		6,051			0.9
Benefits of operating loss carryforwards	(6,954)			(1.1)		—			—		(6,954)			(1.1)
Other permanent items	(2,826)			(0.4)		41			0.3		(2,785)			(0.3)
Provision for income taxes	$	134,677		20.8	%	$	1,784		14.1	%	$	136,461		20.7	%

	Year Ended December 31, 2019
	NGHC			Tax Rate		Reciprocal Exchanges			Tax Rate		Total			Tax Rate
Income (loss) before provision for income taxes	$	434,172				$	(29,729)				$	404,443
Tax rate	21.0		%			21.0		%			21.0		%
Computed “expected” tax expense	$	91,176		21.0	%	$	(6,243)		21.0	%	$	84,933		21.0	%
Tax effects resulting from:
Tax-exempt interest	(810)			(0.2)		(28)			0.1		(838)			(0.2)
Effect of foreign operations	(1,192)			(0.3)		—			—		(1,192)			(0.3)
State taxes	(2,357)			(0.5)		210			(0.7)		(2,147)			(0.5)
Change in valuation allowance	11,541			2.7		(105)			0.4		11,436			2.8
Benefits of operating loss carryforwards	(11,541)			(2.7)		—			—		(11,541)			(2.9)
Other permanent items	(714)			(0.2)		(2,924)			9.8		(3,638)			(0.9)
Provision (benefit) for income taxes	$	86,103		19.8	%	$	(9,090)		30.6	%	$	77,013		19.0	%

F-59

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

	Year Ended December 31, 2018
	NGHC			Tax Rate		Reciprocal Exchanges			Tax Rate		Total			Tax Rate
Income (loss) before provision for income taxes	$	264,388				$	(43,380)				$	221,008
Tax rate	21.0		%			21.0		%			21.0		%
Computed “expected” tax expense	$	55,521		21.0	%	$	(9,110)		21.0	%	$	46,411		21.0	%
Tax effects resulting from:
Tax-exempt interest	(910)			(0.3)		(30)			0.1		(940)			(0.4)
Effect of foreign operations	2,807			1.1		—			—		2,807			1.3
State taxes	4,578			1.7		—			—		4,578			2.1
Change in valuation allowance	53,716			20.3		1,218			(2.8)		54,934			24.9
Benefits of operating loss carryforwards	(53,716)			(20.3)		—			—		(53,716)			(24.3)
Effects of TCJA	(951)			(0.4)		(366)			0.8		(1,317)			(0.6)
Other permanent items	(4,011)			(1.5)		4,738			(10.9)		727			0.2
Provision (benefit) for income taxes	$	57,034		21.6	%	$	(3,550)		8.2	%	$	53,484		24.2	%

Accounting for Uncertainty in Income Taxes

Unrecognized tax benefits

The Company recognizes tax positions in the consolidated financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax return and amounts recognized in the consolidated financial statements.

The following table represents a reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits:

	Year Ended December 31,
	2020
Gross unrecognized tax benefits, beginning of the year	$	—
Increases in tax positions for prior years	3,889
Increases in tax positions for current year	720
Gross unrecognized tax benefits, end of the year	$	4,609

No unrecognized tax benefits or related interest and penalties were recorded prior to 2020. At December 31, 2020, our unrecognized tax benefits, excluding interest and penalties, were $4,609. Interest and penalties related to unrecognized tax benefits are recorded in the income tax expense. At December 31, 2020, NGHC accrued an expense of $1,300 (net of federal benefit) and $1,100, respectively, for payment of interest and penalties. The Company does not anticipate any significant changes to the total unrecognized tax liabilities in the next 12 months.

Regulatory tax examinations

All tax liabilities are payable to the Internal Revenue Service (“IRS”) and various state and local taxing agencies. The Company’s subsidiaries are currently under audit by the IRS for the 2016, 2017, and 2018 tax years and open to audit for the 2019 tax year. For state and local tax purposes, the Company is open to audit for tax years ended December 31, 2014 forward, depending on jurisdiction.

On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES” Act) to mitigate the economic impacts of COVID-19. The Company believes that the provisions of the CARES Act did not have a material impact on its U.S. federal tax liabilities.

F-60

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

13. Commitments and Contingencies

Lease Commitments

The Company leases certain retail stores, office space, land, and equipment. The Company is obligated under leases for office space and storefronts expiring at various dates through 2028. The office space and storefronts lease expense for the years ended December 31, 2020, 2019, and 2018, was $37,827, $37,082, and $35,723, respectively. Future minimum lease payments as of December 31, 2020, for each of the next five years and thereafter are as follows:

	Operating		Finance
December 31,	Leases		Leases		Total
2021	$	31,525	$	6,601	$	38,126
2022	27,225		4,296		31,521
2023	21,824		2,720		24,544
2024	18,186		1,638		19,824
2025	15,109		882		15,991
Thereafter	22,222		2,393		24,615
Total lease payments	$	136,091	$	18,530	$	154,621
Less: Interest	(16,764)		(1,840)
Present value of lease liabilities	$	119,327	$	16,690

Employment Agreements

The Company has entered into employment agreements with certain individuals. The employment agreements provide for bonuses, executive benefits and severance payments under certain circumstances. Amounts payable under these agreements for the next five years are as follows:

December 31,
2021	$	4,672
2022	2,574
2023	1,303
2024	773
2025	—
Total	$	9,322

Litigation

The Company is routinely involved in legal proceedings arising in the ordinary course of business, in particular in connection with claims adjudication with respect to its policies. Management believes it has recorded adequate reserves for these liabilities and that there is no individual case pending that is likely to have a material adverse effect on our financial condition or results of operations.

On July 25, 2019, the City of North Miami Beach Police Officers’ and Firefighters’ Retirement Plan filed a complaint in the U.S. District Court for the Central District of California against the Company and certain of its officers. On November 19, 2019, the U.S. District Court for the Central District of California granted the Company’s Motion to Transfer the case to the Southern District of New York. On January 10, 2020, lead plaintiffs Town of Davie Police Officers Retirement System and Massachusetts Laborers’ Pension Fund filed an amended Complaint asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder based on allegedly false and misleading statements made by the Company in its SEC

F-61

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

filings in relationship to the Company’s involvement in the historical and no longer existing Wells Fargo collateral protection insurance program on behalf of a purported class of individuals and entities who purchased or otherwise acquired shares of the Company’s common stock between July 15, 2015, and August 9, 2017. The amended complaint sought damages in an amount to be proven at trial. The Company filed a Motion to Dismiss the amended complaint on March 10, 2020. On January 21, 2021, the Judge granted our Motion to Dismiss in full and granted the plaintiffs leave to amend the complaint. Management believes that the claims set forth in the amended complaint are unfounded and without merit and intends to vigorously contest any further amended complaint. The Company notes, however, that in light of the inherent uncertainty in legal proceedings, the Company can give no assurance as to the ultimate resolution of the matter, and an estimate of the possible loss or range of loss, if any, cannot be made at this time.

F-62

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

14. Stockholders’ Equity

Preferred Stock

In 2014, the Company completed a public offering of 2,200,000 shares of 7.50% Non-Cumulative Preferred Stock, Series A, $0.01 par value per share (the “Series A Preferred Stock”). Dividends were payable on the liquidation preference amount of $25 per share, on a non-cumulative basis, when, as and if declared by the Board of Directors, quarterly in arrears on the 15th day of January, April, July, and October of each year at an annual rate of 7.50%. Dividends on the Series A Preferred Stock were not cumulative. Accordingly, in the event dividends were not declared on the Series A Preferred Stock for payment on any dividend payment date, then those dividends did not accumulate and were not payable. If the Company did not declare a dividend before the dividend payment date for any dividend period, the Company did not have an obligation to pay dividends for that dividend period, whether or not dividends on the Series A Preferred Stock were declared for any future dividend payment. The Series A Preferred Stock was not redeemable before July 15, 2019. After that date, the Company may have redeemed at its option, in whole or in part, the Series A Preferred Stock at a redemption price of $25 per share, plus any declared and unpaid dividends for prior dividend periods and accrued but unpaid dividends (whether or not declared) for the then-current dividend period.

In 2015, the Company completed a public offering of 6,600,000 of its depositary shares, each representing a 1/40th interest in a share of its 7.50% Non-Cumulative Preferred Stock, Series B, $0.01 par value per share (the “Series B Preferred Stock”), with a liquidation preference of $1,000 per share (equivalent to $25 per depositary share). Each depositary share entitled the holder to a proportional fractional interest in all rights and preferences of the Series B Preferred Stock represented thereby (including any dividend, liquidation, redemption, and voting rights). Dividends on the Series B Preferred Stock represented by the depositary shares were payable on the liquidation preference amount, on a non-cumulative basis, when, as and if declared by the Company’s Board of Directors, at a rate of 7.50% per annum, quarterly in arrears, on January 15, April 15, July 15, and October 15 of each year. Dividends on the Series B Preferred Stock were not cumulative. Accordingly, in the event dividends were not declared on the Series B Preferred Stock for payment on any dividend payment date, then those dividends did not accumulate and were not be payable. If the Company did not declare a dividend before the dividend payment date for any dividend period, the Company did not have an obligation to pay dividends for that dividend period, whether or not dividends on the Series B Preferred Stock were declared for any future dividend payment. The Series B Preferred Stock represented by the depositary shares was not redeemable before April 15, 2020. After that date, the Company may have redeemed at its option, in whole or in part, the Series B Preferred Stock represented by the depositary shares at a redemption price of $1,000 per share (equivalent to $25 per depositary share) plus any declared and unpaid dividends for prior dividend periods and accrued but unpaid dividends (whether or not declared) for the then-current dividend period. A total of 6,600,000 depositary shares (equivalent to 165,000 shares of Series B Preferred Stock) were issued.

In 2016, the Company completed a public offering of 8,000,000 of its depositary shares, each representing a 1/40th interest in a share of its 7.50% Non-Cumulative Preferred Stock, Series C, $0.01 par value per share (the “Series C Preferred Stock”), with a liquidation preference of $1,000 per share (equivalent to $25 per depositary share). Each depositary share entitles the holder to a proportional fractional interest in all rights and preferences of the Series C Preferred Stock represented thereby (including any dividend, liquidation, redemption, and voting rights). Dividends on the Series C Preferred Stock represented by the depositary shares will be payable on the liquidation preference amount, on a non-cumulative basis, when, as and if declared by the Company’s Board of Directors, at a rate of 7.50% per annum, quarterly in arrears, on January 15, April 15, July 15, and October 15 of each year. Dividends on the Series C Preferred Stock are not cumulative. Accordingly, in the event dividends are not declared on the Series C Preferred Stock for payment on any dividend payment date, then those dividends will not accumulate and will not be payable. If the Company has not declared a dividend before the dividend payment date for any dividend period, the Company will have no obligation to pay dividends for that dividend period, whether or not dividends on the Series C Preferred Stock are declared for any future dividend payment. The Series C Preferred Stock represented by the depositary shares is not redeemable before July 15, 2021. After that date, the Company may redeem at its option, in whole or in part, the Series C Preferred Stock represented by the depositary shares at a redemption price of $1,000 per share (equivalent to $25 per depositary share) plus any declared and unpaid

F-63

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

dividends for prior dividend periods and accrued but unpaid dividends (whether or not declared) for the then-current dividend period. A total of 8,000,000 depositary shares (equivalent to 200,000 shares of Series C Preferred Stock) were issued.

In 2018, the Company completed a private placement of 120 shares of a new series of preferred stock, par value $0.01 per share, designated as its Fixed/Floating Rate Non-Cumulative Convertible Preferred Stock, Series D (the “Series D Preferred Stock”), with a liquidation preference of $250,000 per share, for aggregate proceeds of $30,000. Holders of Series D Preferred Stock were entitled to receive, when, as and if declared by the Company’s board of directors, non-cumulative cash dividends per share at the per annum rate of 7.00% before July 15, 2023, and thereafter at the annual rate of six-month LIBOR plus 5.4941%. Dividends were payable semi-annually in arrears on the 15th day of January and July of each year, commencing on January 15, 2019. On or after July 15, 2023 (or in the event of a fundamental change of the Company, at any time), the Series D Preferred Stock could be converted at the holder’s option into shares of the Company’s common stock at a conversion rate of 6,578.9474 shares of common stock for each share of Series D Preferred Stock, subject to adjustment, which equates to an initial conversion price of $38 per share.

See Note 22, “Subsequent Events” for additional information on shareholders’ equity.

The following table summarizes the Company’s preferred stock issued and outstanding as of December 31, 2020, and 2019.

Series	Dividend rate per year		Shares of preferred stock issued and outstanding	Depositary shares issued and outstanding	Liquidation preference per share		Aggregate liquidation preference
A	7.50	%	2,200,000	—	$	25	$	55,000
B	7.50	%	165,000	6,600,000	$	1,000	$	165,000
C	7.50	%	200,000	8,000,000	$	1,000	$	200,000
D	Fixed/ Floating(1)		120	—	$	250,000	$	30,000
			2,565,120				$	450,000

(1) Dividend rate is fixed at 7.00% prior to July 15, 2023, and floating at six-month LIBOR plus 5.4941% thereafter.

F-64

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Common and Preferred Stock Dividends

Dividends are payable on the Company’s common and preferred stock only when, as and if declared by the Company’s Board of Directors in its discretion, from funds legally available for this purpose. The following tables present the class of stock, declaration date and dividends paid per share in 2020, 2019, and 2018:

Class of Stock	Declaration Date	Dividend Per Share		Dividend Per Depositary Share
Common stock	October 29, 2020	$	0.05
Common stock	July 31, 2020	$	0.05
Common stock	April 29, 2020	$	0.05
Common stock	February 20, 2020	$	0.05
Preferred stock Series A	October 29, 2020	$	0.46875
Preferred stock Series A	July 31, 2020	$	0.46875
Preferred stock Series A	April 29, 2020	$	0.46875
Preferred stock Series A	February 20, 2020	$	0.46875
Preferred stock Series B and Series C	October 29, 2020	$	18.75	$	0.46875
Preferred stock Series B and Series C	July 31, 2020	$	18.75	$	0.46875
Preferred stock Series B and Series C	April 29, 2020	$	18.75	$	0.46875
Preferred stock Series B and Series C	February 20, 2020	$	18.75	$	0.46875
Preferred stock Series D	October 29, 2020	$	8,750.00
Preferred stock Series D	April 29, 2020	$	8,750.00

Class of Stock	Declaration Date	Dividend Per Share		Dividend Per Depositary Share
Common stock	October 30, 2019	$	0.05
Common stock	July 29, 2019	$	0.05
Common stock	May 6, 2019	$	0.04
Common stock	February 25, 2019	$	0.04
Preferred stock Series A	October 30, 2019	$	0.46875
Preferred stock Series A	July 29, 2019	$	0.46875
Preferred stock Series A	May 6, 2019	$	0.46875
Preferred stock Series A	February 25, 2019	$	0.46875
Preferred stock Series B and Series C	October 30, 2019	$	18.75	$	0.46875
Preferred stock Series B and Series C	July 29, 2019	$	18.75	$	0.46875
Preferred stock Series B and Series C	May 6, 2019	$	18.75	$	0.46875
Preferred stock Series B and Series C	February 25, 2019	$	18.75	$	0.46875
Preferred stock Series D	October 30, 2019	$	8,750.00
Preferred stock Series D	May 6, 2019	$	8,750.00

F-65

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Class of Stock	Declaration Date	Dividend Per Share		Dividend Per Depositary Share
Common stock	October 29, 2018	$	0.04
Common stock	August 6, 2018	$	0.04
Common stock	May 7, 2018	$	0.04
Common stock	February 26, 2018	$	0.04
Preferred stock Series A	October 29, 2018	$	0.46875
Preferred stock Series A	August 6, 2018	$	0.46875
Preferred stock Series A	May 7, 2018	$	0.46875
Preferred stock Series A	February 26, 2018	$	0.46875
Preferred stock Series B and Series C	October 29, 2018	$	18.75	$	0.46875
Preferred stock Series B and Series C	August 6, 2018	$	18.75	$	0.46875
Preferred stock Series B and Series C	May 7, 2018	$	18.75	$	0.46875
Preferred stock Series B and Series C	February 26, 2018	$	18.75	$	0.46875
Preferred stock Series D	October 29, 2018	$	8,263.89

Share Repurchase Program

On April 29, 2020, the Board of Directors authorized and approved a share repurchase program with a 12- month term for up to $50,000 aggregate purchase price of the Company’s outstanding common shares. During the year ended December 31, 2020, the Company purchased 459,083 common shares with a cost of $8,482. The purchases were made in the open market in accordance with applicable federal securities laws, including Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. Pursuant to the terms of the Merger Agreement with Allstate signed July 7, 2020, the Company ceased making any further common share repurchases.

Shares Roll forward

The following table presents a roll forward of outstanding common shares.

	Year Ended December 31,
	2020	2019
Common stock:
Balance, beginning of the year	113,368,811	112,940,595
Shares issued under employee stock plans and exercises of stock options	854,914	578,201
Shares withheld related to net share settlement	(179,599)	(149,985)
Balance, end of the year	114,044,126	113,368,811
Treasury stock:
Balance beginning of the year	—	—
Repurchases of common stock	(459,083)	—
Balance, end of the period	(459,083)	—
Shares outstanding at end of the year	113,585,043	113,368,811

F-66

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

15. Stock-Based Compensation

In 2019, the Company’s stockholders approved the 2019 Omnibus Incentive Plan (the “2019 Plan”). The 2019 Plan authorized up to 2.5 million shares of the Company’s stock for awards of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSU”), performance share units, performance units, cash-based awards, or other stock-based awards. The number of shares of common stock for which awards could be issued under the 2019 Plan could not exceed 2.5 million shares, subject to the authority of the Company’s Board of Directors to adjust this amount in the event of consolidation, reorganization, stock dividend, recapitalization, or similar transaction affecting the Company’s common stock. The 2019 Plan served as a successor of the Company’s prior equity incentive plans. Outstanding awards under the prior plans continued to be outstanding and subject to their terms and conditions. As of December 31, 2020, approximately 1.9 million shares of the Company’s common stock remained available for grants under the 2019 Plan.

Stock Options

A summary of the stock option awards granted under the prior plans is shown below:

	Shares Subject to Options Outstanding
Year Ended December 31, 2020	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (1)
Outstanding at beginning of the year	3,025,587	$	9.83
Exercised	(388,236)	6.79
Outstanding and exercisable at end of the year	2,637,351	$	10.28	2.4	$	63,036

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing price of the Company’s common stock of $34.18, as reported on the Nasdaq Global Market on December 31, 2020.

No options were granted, forfeited or expired during the year ended December 31, 2020. The total intrinsic value of the options exercised during the years ended December 31, 2020, 2019, and 2018, was $7,685, $3,105 and $5,011, respectively. The total fair value of stock options vested for the years ended December 31, 2020, 2019, and 2018 was $1,044, $239 and $783, respectively.

Restricted Stock Units

The Company granted RSUs with a grant date value equal to the closing stock price of the Company’s stock on the dates the units were granted. Prior to the acquisition of the Company by Allstate, the RSUs vested over three or four years and were net share settled. Under the net share settlement procedures, upon each settlement date, RSUs were withheld to cover the required withholding tax, which was based on the value of the RSUs on the settlement date as determined by the closing price of the Company’s common stock on the trading day immediately preceding the applicable settlement date. The remaining amounts were delivered to the recipient as shares of the Company’s common stock. The amount remitted to the tax authorities for the employees’ tax obligation to the tax authorities is reflected as a financing activity in the consolidated statements of cash flows. These shares withheld by the Company as a result of the net settlement of RSUs were no longer considered outstanding on a diluted basis, thereby reducing the Company’s diluted shares used to calculate earnings per share.

F-67

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

A summary of the RSUs is shown below:

	RSUs
Year Ended December 31, 2020	Number of RSUs	Weighted-Average Grant Date Fair Value
Non-vested at beginning of the year	1,033,631	$	23.98
Granted	561,497	21.46
Vested	(466,678)	23.68
Forfeited	(11,874)	21.75
Non-vested at end of the year	1,116,576	$	22.86

The weighted-average grant date fair value of RSUs for the years ended December 31, 2020, 2019, and 2018, was $21.46, $25.42 and $21.36, respectively. The total fair value of the RSUs vested for the years ended December 31, 2020, 2019, and 2018, was $11,051, $9,259 and $7,068, respectively.

Stock-Based Compensation Expense

Stock-based compensation expense, included in general and administrative expenses, for all stock-based compensation plans was $12,421, $10,996 and $9,020 for the years ended December 31, 2020, 2019, and 2018, respectively.

As of December 31, 2020, the Company had approximately $15,577 of unrecognized stock-based compensation expense related to RSU awards. This unrecognized stock-based compensation expense was expected to be recognized over a weighted-average period of approximately 1.3 years.

On January 4, 2021, following the acquisition of the Company by Allstate, the Company’s outstanding 2,637,351 options and 1,116,576 RSUs were cancelled and converted into the right to receive cash consideration, less applicable withholding taxes. See Note 22, “Subsequent Events” for additional information.

16. Related Party Transactions

The significant shareholder of the Company prior to the Merger also has an ownership interest in AmTrust and ACP Re. Accordingly, as of December 31, 2020, AmTrust and ACP Re were related entities of the Company. The Company is a party to the following transactions with these related entities:

Equity Method Investments

The Company has an ownership interest in an LSC Entity, limited liability companies and limited partnerships with related parties. See Note 4, “Investments - Equity Method Investments - Related Parties” for additional information.

Agreements with ACP Re

Credit Agreement

The Company is party to a credit agreement (the “ACP Re Credit Agreement”) by and among AmTrust, as administrative agent, ACP Re Holdings, LLC, a Delaware limited liability company owned by a related party trust (the “Trust”), as borrower, and AmTrust and the Company, as lenders of $250,000 ($125,000 each lender). The amounts borrowed are secured by equity interests, cash and, other investments held by ACP Re Holdings, LLC in an amount equal to 115% of the outstanding loan balance. The maturity date of the loan is September 20, 2036. The interest rate on the outstanding principal balance is a fixed annual rate of 3.7%, provided that up to 1.2% thereof

F-68

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

may be paid in kind. The Trust is required to cause ACP Re Holdings, LLC to maintain assets having a value greater than 115% of the outstanding loan balance, and if there is a shortfall, the Trust will make a contribution to ACP Re Holdings, LLC of assets having a market value of at least the shortfall (the “Maintenance Covenant”). Commencing on September 20, 2026, and for each year thereafter, two percent of the then outstanding principal balance of the loan (inclusive of any amounts previously paid in kind) is due and payable. A change of control of greater than 50% and an uncured breach of the Maintenance Covenant are included as events of default.

As of December 31, 2020, and 2019, the Company had a receivable for the principal amount related to the ACP Re Credit Agreement of $130,784 and $129,229, respectively. The Company recorded interest income of $4,825, $4,767 and $4,711 for the years ended December 31, 2020, 2019, and 2018, respectively, under the ACP Re Credit Agreement. Management determined no impairment reserve was needed for the carrying value of the loan at December 31, 2020, and 2019, based on the collateral levels maintained.

Other Related Party Transactions

Lease Agreements

The Company leases office space at 59 Maiden Lane in New York, New York from 59 Maiden Lane Associates LLC, an entity that is wholly-owned by the Karfunkel family. The lease term is through 2022. The Company paid $830, $830 and $830 in rent for the years ended December 31, 2020, 2019, and 2018, respectively.

The Company leases office space at 30 North LaSalle Street, Chicago, Illinois from 30 North LaSalle Street Partners LLC, an entity that is wholly-owned by the Karfunkel family. The lease term is through 2025. The Company paid $440, $309 and $302 in rent for the years ended December 31, 2020, 2019, and 2018, respectively.

17. Benefits Plan

A significant number of the Company’s employees participate in a defined contribution plan. Employer contributions vary based on criteria specific to the plan. Contribution expense was $11,624, $10,212 and $9,292 for the years ended December 31, 2020, 2019, and 2018, respectively.

18. Statutory Financial Data, Risk-Based Capital and Dividend Restrictions

The Company’s insurance subsidiaries file financial statements in accordance with statutory accounting practices (“SAP”) prescribed or permitted by domestic or foreign insurance regulatory authorities. The differences between statutory financial statements and financial statements prepared in accordance with GAAP vary between domestic and foreign jurisdictions. The principal differences relate to: (1) acquisition costs incurred in connection with acquiring new business which are charged to expense under SAP but under GAAP are deferred and amortized as the related premiums are earned; (2) ceding commission revenues are earned when ceded premiums are written except for ceding commission revenues in excess of anticipated acquisition costs, which are deferred and amortized as ceded premiums are earned. GAAP requires that all ceding commission revenues be earned as the underlying ceded premiums are earned over the term of the reinsurance agreements; (3) certain assets including certain receivables, a portion of the net deferred tax asset, prepaid expenses and furniture and equipment are not admitted; (4) limitation on net deferred tax assets created by the tax effects of temporary differences; (5) unpaid losses and loss expense, and unearned premium reserves are presented gross of reinsurance with a corresponding asset recorded; and (6) debt securities portfolios that are carried at fair value and changes in fair value are reflected directly in unassigned surplus, net of related deferred taxes.

F-69

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Risk-Based Capital

Insurance companies in the U.S. are subject to certain Risk-Based Capital (“RBC”) requirements as specified by the National Association of Insurance Commissioners (“NAIC”). Under such requirements, the amount of statutory capital and surplus maintained by an insurance company is to be determined on asset risk, underwriting risk and other risk factors. As of December 31, 2020, and 2019, the statutory capital and surplus of all of the Company’s insurance subsidiaries domiciled in the U.S. exceeded the RBC requirements.

Our Bermuda subsidiaries, National General Re Ltd. (“NG Re”) and National General Insurance Ltd. (“NGIL”, and together with NG Re, the “Bermuda Insurers”) are registered as Class 3A insurers by the Bermuda Monetary Authority (“BMA”) under the Bermuda Insurance Act 1978, and related regulations as amended (the “Insurance Act - Bermuda”). As a result, the revised regulations require that the available statutory capital and surplus for each Bermuda Insurer be equal to or exceed the value of both its Minimum Margin of Solvency (“MMS”) and the Enhanced Capital Requirement (“ECR”). The capital and solvency return will be filed with the BMA on or before April 30, 2021, and the ECR based on the economic balance sheet will not be available until this filing is completed. The capital and surplus requirement is based on the statutory capital MMS prior to the ECR and the 25% of ECR criteria being calculated. The required MMS on this basis was $269,219 and $255,393 as of December 31, 2020, and 2019, respectively.

Statutory Financial Data

The following tables present the statutory capital and surplus, and net income under SAP:

	December 31,
Statutory capital and surplus	2020		2019
Property and Casualty Insurance Companies:
Domestic	$	1,619,460	$	1,600,740
Foreign	791,028		760,658
Total	$	2,410,488	$	2,361,398
Life Insurance Companies:
Domestic	$	79,977	$	53,022

	Year Ended December 31,
Statutory net income (loss)	2020		2019		2018
Property and Casualty Insurance Companies:
Domestic	$	214,313	$	156,771	$	16,737
Foreign	174,861		106,734		64,810
Total	$	389,174	$	263,505	$	81,547
Life Insurance Companies:
Domestic	$	7,963	$	7,125	$	9,827

Reciprocal Exchanges

The Reciprocal Exchanges prepare their statutory basis financial statements under SAP. As of December 31, 2020, and 2019, the Reciprocal Exchanges had combined statutory capital and surplus of $109,314 and $84,340, respectively. For the years ended December 31, 2020, 2019, and 2018, the Reciprocal Exchanges had combined SAP net income (loss) of $26,106, $(27,033) and $(24,194), respectively. The Reciprocal Exchanges are required to maintain minimum capital and surplus in accordance with regulatory requirements. As of December 31, 2020, and 2019, the capital and surplus levels of the Reciprocal Exchanges exceeded such required levels. The Reciprocal Exchanges are not owned by the Company but managed through management agreements. Accordingly, the Reciprocal Exchanges’ net assets are not available to the Company.

F-70

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

Due to the finalization of the Company’s combined statutory filings, amounts for 2019 have changed compared to those previously reported in our Annual Report on Form 10-K for the year ended December 31, 2019.

Dividend Restrictions

The Company’s insurance subsidiaries are subject to statutory and regulatory restrictions, applicable to insurance companies, imposed by the states of domicile, which limit the amount of cash dividends or distributions that they may pay unless special permission is received from the state of domicile. This limit was approximately $156,400 and $402,970 as of December 31, 2020, and 2019, respectively. During the years ended December 31, 2020, 2019, and 2018, there were $300,000, $7,000 and $156,660 of dividends and return of capital paid by the Company’s insurance subsidiaries to their parent company or the Company, respectively.

F-71

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

19. Earnings Per Share

The following is a summary of the elements used in calculating basic and diluted earnings per common share:

	Year Ended December 31,
	2020		2019		2018
Numerator:
Net income attributable to NGHC	$	513,331	$	348,069	$	207,354
Preferred stock dividends - nonconvertible	(31,500)		(31,500)		(31,500)
Preferred stock dividends - convertible	(2,100)		(2,100)		(992)
Numerator for basic EPS	479,731		314,469		174,862
Effect of dilutive securities:
Preferred stock dividends - convertible	2,100		2,100		992
Numerator for diluted EPS - after assumed conversions	$	481,831	$	316,569	$	175,854
Denominator:
Denominator for basic EPS - weighted-average shares outstanding	113,511,669		113,199,501		107,659,813
Effect of dilutive securities:
Employee stock options	1,739,871		1,833,736		2,053,681
RSUs	385,582		274,262		319,089
Convertible preferred stock	789,473		789,473		789,473
Dilutive potential common shares	2,914,926		2,897,471		3,162,243
Denominator for diluted EPS - weighted-average shares outstanding and assumed conversions	116,426,595		116,096,972		110,822,056
EPS attributable to NGHC common stockholders:
Basic EPS	$	4.23	$	2.78	$	1.62
Diluted EPS	$	4.14	$	2.73	$	1.59

F-72

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

20. Segment Information

The Company currently operates two business segments, “Property and Casualty” and “Accident and Health.” The “Corporate and Other” column represents the activities of the holding company, as well as income from the Company’s investment portfolio. The Company evaluates segment profits attributable to the performance of activities within the segment separately from the results of the Company’s investment portfolio. Other operating expenses allocated to the segments are called “General and administrative expenses” which are allocated on an actual basis except corporate salaries and benefits where management’s judgment is applied. In determining total assets by segment, the Company identifies those assets that are attributable to a particular segment such as premiums receivable, deferred acquisition costs, reinsurance recoverable, prepaid reinsurance premiums, intangible assets and goodwill, while the remaining assets are allocated to Corporate and Other.

The Property and Casualty segment, which includes the Reciprocal Exchanges and the management companies, reports the management fees earned by the Company from the Reciprocal Exchanges for underwriting, investment management and other services as service and fee income. The effects of these transactions between the Company and the Reciprocal Exchanges are eliminated in consolidation to derive consolidated net income. However, the management fee income is reported in net income attributable to NGHC and included in the basic and diluted earnings per share.

The following tables summarize the results of operations of the operating segments:

	Year Ended December 31, 2020
	Property and Casualty		Accident and Health		Corporate and Other		Total
Underwriting revenues:
Gross premium written	$	4,857,631	$	776,916	$	—	$	5,634,547
Ceded premiums	(923,168)		(90,535)		—		(1,013,703)
Net premium written	3,934,463		686,381		—		4,620,844
Change in unearned premium	(125,310)		(914)		—		(126,224)
Net earned premium	3,809,153		685,467		—		4,494,620
Ceding commission income	152,671		(214)		—		152,457
Service and fee income	391,702		368,672		—		760,374
Total underwriting revenues	4,353,526		1,053,925		—		5,407,451
Underwriting expenses:
Loss and loss adjustment expense	2,505,189		318,893		—		2,824,082
Acquisition costs and other underwriting expenses	681,286		309,283		—		990,569
General and administrative expenses	792,929		242,238		8,026		1,043,193
Total underwriting expenses	3,979,404		870,414		8,026		4,857,844
Underwriting income	374,122		183,511		(8,026)		549,607
Net investment income	—		—		118,257		118,257
Net gain on investments	—		—		26,577		26,577
Interest expense	—		—		(33,772)		(33,772)
Provision for income taxes	—		—		(136,461)		(136,461)
Net income attributable to noncontrolling interest	—		—		(10,877)		(10,877)
Net income attributable to NGHC	$	374,122	$	183,511	$	(44,302)	$	513,331

F-73

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

	Year Ended December 31, 2019
	Property and Casualty		Accident and Health		Corporate and Other		Total
Underwriting revenues:
Gross premium written	$	4,814,463	$	768,617	$	—	$	5,583,080
Ceded premiums	(1,250,448)		(108,011)		—		(1,358,459)
Net premium written	3,564,015		660,606		—		4,224,621
Change in unearned premium	(108,992)		2,413		—		(106,579)
Net earned premium	3,455,023		663,019		—		4,118,042
Ceding commission income	227,514		10,939		—		238,453
Service and fee income	392,478		249,487		—		641,965
Total underwriting revenues	4,075,015		923,445		—		4,998,460
Underwriting expenses:
Loss and loss adjustment expense	2,543,788		310,680		—		2,854,468
Acquisition costs and other underwriting expenses	605,019		222,348		—		827,367
General and administrative expenses	773,291		254,208		14,273		1,041,772
Total underwriting expenses	3,922,098		787,236		14,273		4,723,607
Underwriting income	152,917		136,209		(14,273)		274,853
Net investment income	—		—		141,233		141,233
Net gain on investments	—		—		13,473		13,473
Other income					26,428		26,428
Interest expense	—		—		(51,544)		(51,544)
Provision for income taxes	—		—		(77,013)		(77,013)
Net loss attributable to noncontrolling interest	—		—		20,639		20,639
Net income attributable to NGHC	$	152,917	$	136,209	$	58,943	$	348,069

F-74

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

	Year Ended December 31, 2018
	Property and Casualty		Accident and Health		Corporate and Other		Total
Underwriting revenues:
Gross premium written	$	4,718,730	$	698,109	$	—	$	5,416,839
Ceded premiums	(1,517,556)		(71,570)		—		(1,589,126)
Net premium written	3,201,174		626,539		—		3,827,713
Change in unearned premium	(85,385)		(10,126)		—		(95,511)
Net earned premium	3,115,789		616,413		—		3,732,202
Ceding commission income	217,694		7,003		—		224,697
Service and fee income	375,603		185,980		—		561,583
Total underwriting revenues	3,709,086		809,396		—		4,518,482
Underwriting expenses:
Loss and loss adjustment expense	2,340,881		321,345		—		2,662,226
Acquisition costs and other underwriting expenses	550,540		184,726		—		735,266
General and administrative expenses	726,238		201,808		10,000		938,046
Total underwriting expenses	3,617,659		707,879		10,000		4,335,538
Underwriting income	91,427		101,517		(10,000)		182,944
Net investment income	—		—		119,034		119,034
Net loss on investments	—		—		(29,545)		(29,545)
Interest expense	—		—		(51,425)		(51,425)
Provision for income taxes	—		—		(53,484)		(53,484)
Net loss attributable to noncontrolling interest	—		—		39,830		39,830
Net income attributable to NGHC	$	91,427	$	101,517	$	14,410	$	207,354

The following tables summarize the financial position of the operating segments:

	December 31, 2020
	Property and Casualty		Accident and Health		Corporate and Other		Total
Premiums and other receivables, net	$	1,304,636	$	237,474	$	3,270	$	1,545,380
Deferred acquisition costs	259,163		26,742		—		285,905
Reinsurance recoverable, net	1,187,855		31,075		—		1,218,930
Prepaid reinsurance premiums	412,950		1,060		—		414,010
Goodwill and Intangible assets, net	416,828		103,225		—		520,053
Prepaid and other assets	45,235		18,322		5,535		69,092
Corporate and other assets	—		—		6,074,524		6,074,524
Total assets	$	3,626,667	$	417,898	$	6,083,329	$	10,127,894

F-75

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

	December 31, 2019
	Property and Casualty		Accident and Health		Corporate and Other		Total
Premiums and other receivables, net	$	1,292,813	$	131,877	$	4,258	$	1,428,948
Deferred acquisition costs	239,293		24,230		—		263,523
Reinsurance recoverable, net	1,377,284		17,024		—		1,394,308
Prepaid reinsurance premiums	575,712		35		—		575,747
Goodwill and Intangible assets, net	436,724		108,427		—		545,151
Prepaid and other assets	56,960		32,852		4,830		94,642
Corporate and other assets	—		—		5,454,215		5,454,215
Total assets	$	3,978,786	$	314,445	$	5,463,303	$	9,756,534

The following table summarizes service and fee income by source within each operating segment:

	Year Ended December 31,
	2020						2019						2018
	Property and Casualty		Accident and Health		Total		Property and Casualty		Accident and Health		Total		Property and Casualty		Accident and Health		Total
Commission revenue	$	60,103	$	124,578	$	184,681	$	87,486	$	83,476	$	170,962	$	93,235	$	70,086	$	163,321
Finance and processing fees	129,327		9,546		138,873		128,302		6,197		134,499		121,058		4,535		125,593
Group health administrative fees	—		124,523		124,523		—		100,951		100,951		—		79,411		79,411
Installment fees	104,915		—		104,915		97,997		—		97,997		92,785		—		92,785
Late payment fees	32,377		59		32,436		34,210		309		34,519		33,765		86		33,851
Other service and fee income	64,980		109,966		174,946		44,483		58,554		103,037		34,760		31,862		66,622
Total	$	391,702	$	368,672	$	760,374	$	392,478	$	249,487	$	641,965	$	375,603	$	185,980	$	561,583
NGHC	$	385,391	$	368,672	$	754,063	$	386,723	$	249,487	$	636,210	$	369,852	$	185,980	$	555,832
Reciprocal Exchanges	6,311		—		6,311		5,755		—		5,755		5,751		—		5,751
Total	$	391,702	$	368,672	$	760,374	$	392,478	$	249,487	$	641,965	$	375,603	$	185,980	$	561,583

F-76

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

The following tables show a summary of premiums and fee income by product line:

	Year Ended December 31,
Gross Premium Written	2020		2019		2018
Property and Casualty
Personal Auto	$	2,817,396	$	2,721,202	$	2,637,176
Homeowners	751,918		718,819		688,006
RV/Packaged	215,138		212,746		208,394
Small Business Auto	251,328		315,569		319,299
Lender-placed Insurance	402,768		342,267		363,056
Other	45,482		56,413		53,876
Total Property and Casualty	4,484,030		4,367,016		4,269,807
Accident and Health
Group	366,847		288,549		239,729
Individual	410,069		340,731		308,122
International	—		139,337		150,258
Total Accident and Health	776,916		768,617		698,109
Total NGHC	$	5,260,946	$	5,135,633	$	4,967,916
Reciprocal Exchanges
Personal Auto	$	131,286	$	152,688	$	153,129
Homeowners	238,972		290,972		291,907
Other	3,343		3,787		3,887
Total Reciprocal Exchanges	$	373,601	$	447,447	$	448,923
Total Gross Premium Written	$	5,634,547	$	5,583,080	$	5,416,839

	Year Ended December 31,
Net Premium Written	2020		2019		2018
Property and Casualty
Personal Auto	$	2,475,384	$	2,260,385	$	2,016,858
Homeowners	521,331		404,278		331,120
RV/Packaged	209,479		198,737		206,740
Small Business Auto	192,859		249,067		233,456
Lender-placed Insurance	314,642		198,171		202,069
Other	19,552		18,905		27,366
Total Property and Casualty	3,733,247		3,329,543		3,017,609
Accident and Health
Group	284,189		231,388		197,386
Individual	402,192		340,049		308,065
International	—		89,169		121,088
Total Accident and Health	686,381		660,606		626,539
Total NGHC	$	4,419,628	$	3,990,149	$	3,644,148
Reciprocal Exchanges
Personal Auto	$	91,182	$	134,958	$	61,759
Homeowners	108,624		98,009		120,875
Other	1,410		1,505		931
Total Reciprocal Exchanges	$	201,216	$	234,472	$	183,565
Total Net Premium Written	$	4,620,844	$	4,224,621	$	3,827,713

F-77

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

	Year Ended December 31,
Net Earned Premium	2020		2019		2018
Property and Casualty
Personal Auto	$	2,403,879	$	2,190,748	$	1,927,667
Homeowners	452,739		405,306		329,850
RV/Packaged	200,854		195,639		197,258
Small Business Auto	216,888		252,359		237,587
Lender-placed Insurance	293,353		182,231		215,811
Other	20,191		18,509		20,855
Total Property and Casualty	3,587,904		3,244,792		2,929,028
Accident and Health
Group	284,197		231,398		197,406
Individual	401,270		340,251		307,952
International	—		91,370		111,055
Total Accident and Health	685,467		663,019		616,413
Total NGHC	$	4,273,371	$	3,907,811	$	3,545,441
Reciprocal Exchanges
Personal Auto	$	111,353	$	106,549	$	59,923
Homeowners	108,629		101,964		125,806
Other	1,267		1,718		1,032
Total Reciprocal Exchanges	$	221,249	$	210,231	$	186,761
Total Net Earned Premium	$	4,494,620	$	4,118,042	$	3,732,202

	Year Ended December 31,
Fee Income	2020		2019		2018
Property and Casualty
Service and Fee Income	$	385,391	$	386,723	$	369,852
Ceding Commission Income	110,377		164,013		160,945
Total Property and Casualty	495,768		550,736		530,797
Accident and Health
Service and Fee Income
Group	172,526		134,206		104,504
Individual	11,062		9,650		9,304
Third-Party Fee	185,084		105,631		72,172
Total Service and Fee Income	368,672		249,487		185,980
Ceding Commission Income	(214)		10,939		7,003
Total Accident and Health	368,458		260,426		192,983
Total NGHC	$	864,226	$	811,162	$	723,780
Reciprocal Exchanges
Service and Fee Income	$	6,311	$	5,755	$	5,751
Ceding Commission Income	42,294		63,501		56,749
Total Reciprocal Exchanges	$	48,605	$	69,256	$	62,500
Total Fee Income	$	912,831	$	880,418	$	786,280

F-78

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

21. Selected Quarterly Financial Data (Unaudited)

The following tables summarize quarterly financial data:

	2020
	March 31,		June 30,		September 30,		December 31,
Total revenues	$	1,328,334	$	1,329,132	$	1,443,009	$	1,451,810
Total expenses	1,199,589		1,104,012		1,298,712		1,289,303
Provision for income taxes	28,172		50,507		27,428		30,354
Net income	100,573		174,613		116,869		132,153
Net income attributable to NGHC	100,759		166,574		109,969		136,029
Net income attributable to NGHC common stockholders	92,884		157,649		102,094		127,104
Basic EPS	$	0.82	$	1.39	$	0.90	$	1.12
Diluted EPS	$	0.80	$	1.37	$	0.88	$	1.10

	2019
	March 31,		June 30,		September 30,		December 31,
Total revenues	$	1,232,665	$	1,269,652	$	1,308,172	$	1,369,105
Total expenses	1,124,820		1,170,353		1,231,186		1,248,792
Provision for income taxes	22,506		22,241		16,747		15,519
Net income	85,339		77,058		60,239		104,794
Net income attributable to NGHC	91,758		77,876		71,154		107,281
Net income attributable to NGHC common stockholders	83,883		68,951		63,279		98,356
Basic EPS	$	0.74	$	0.61	$	0.56	$	0.87
Diluted EPS	$	0.72	$	0.60	$	0.54	$	0.85

Due to changes in number of shares outstanding from quarter to quarter, the total earnings per share of the four quarters may not necessarily equal the earnings per share for the year.

F-79

NATIONAL GENERAL HOLDINGS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Shares and Per Share Data)

22. Subsequent Events

Effective January 4, 2021 the Company was acquired by Allstate pursuant to the Agreement and Plan of Merger (“Merger”), dated as of July 7, 2020, by and among the Company, Allstate, and Bluebird Acquisition Corp., an indirect wholly owned subsidiary of Allstate. As a result of the Merger, the Company became a wholly owned indirect subsidiary of Allstate and our common shares were delisted from the NASDAQ Global Select Market (“NASDAQ”) and NASDAQ filed a Form 25 with respect to the common shares and we subsequently filed a Form 15 with the Securities and Exchange Commission requesting that our duty to file reports under Section 13 of the Securities Exchange Act of 1934, as amended (the “Act”) with respect to such securities be terminated and our duty to file reports under Section 15(d) of the Act with respect to such securities be suspended. The Company’s shareholders received $32.00 per share in cash from Allstate, plus a closing dividend of $2.50 per share, providing $34.50 in total value per share. In addition, (i) each outstanding option to purchase a share of Common Stock, regardless of whether vested or unvested, was cancelled and converted into the right to receive $34.50 in cash, subject to any applicable tax withholding, minus the exercise price per share underlying such option and (ii) each outstanding RSU, regardless of whether vested or unvested, was cancelled and converted into the right to receive $34.50 in cash, subject to any applicable tax withholding.

On January 4, 2021 and in connection with the Merger, the Company entered into the Third Supplemental Indenture (the “Third Supplemental Indenture”), by and among the Company, as the issuer, Allstate, as the guarantor, and The Bank of New York Mellon (the “Notes Trustee”), as trustee, supplementing that certain Indenture, dated as of May 23, 2014, by and between the Company and the Notes Trustee, as supplemented by the First Supplemental Indenture, dated as of May 23, 2014 (as supplemented, the “Indenture”), relating to the issuance of 6.75% Senior Notes due 2024 (the “2024 Notes”), pursuant to which the Company, Allstate and the Notes Trustee agreed to amend the Indenture to: (i) amend certain information covenants in the Indenture to replace the requirement of the Company to provide certain information to the holders of the 2024 Notes with a requirement of Allstate to provide similar information in respect of Allstate, and (ii) add Allstate as a guarantor of the payment obligations of the Company with respect to the 2024 Notes. As required by the Indenture, a majority of the holders of the 2024 Notes consented to the Third Supplemental Indenture.

On January 4, 2021, and in connection with the Merger, the Company terminated the Credit Agreement, dated as of February 25, 2019 (the “2019 Credit Agreement”), by and among the Company, as the borrower, JPMorgan Chase Bank, N.A., as the administrative agent (the “Agent”), KeyBank National Association and Fifth Third Bank as co-syndication agents, and Associated Bank, National Association and The Bank of Nova Scotia, as co-documentation agents, and the various lending institutions party thereto, and the other Loan Documents (as defined in the 2019 Credit Agreement) by prepaying all outstanding amounts thereunder.

Effective January 4, 2021, a subsidiary of the Company ceded certain new, renewal, and in-force business to Allstate Insurance Company, a subsidiary of Allstate. The Company transferred approximately $988,144 in settlement of the initial transfer.

Following the consummation of the Merger, we voluntarily redeemed the following securities effective February 3, 2021: (a) all outstanding shares of 7.50% Non-Cumulative Preferred Stock, Series A, (par value $0.01 per share) (the “Class A Preferred Stock”), (b) all outstanding Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B and the underlying shares of 7.50% Non-Cumulative Preferred Stock, Series B (par value $0.01 per share) (collectively, the “Class B Preferred Stock”), (c) all outstanding shares of Fixed/Floating Rate Non-Cumulative Convertible Preferred Stock, Series D (the “Series D Preferred Stock”) (par value $0.01 per share), and (d) the aggregate outstanding principal amount of our 7.625% Subordinated Notes Due 2055 (the “2055 Notes”). All outstanding Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series C and the underlying shares of 7.50% Non-Cumulative Preferred Stock, Series C (par value $0.01 per share) (collectively, the “Class C Preferred Stock”) were delisted from NASDAQ effective January 25, 2021, and we subsequently filed a Form 15 with the Securities and Exchange Commission requesting that our duty to file reports under Section 13 of the Act with respect to such securities be terminated and our duty to file reports under Section 15(d) of the Act with respect to such securities be suspended.

F-80

Schedule I

NATIONAL GENERAL HOLDINGS CORP.

SUMMARY OF INVESTMENTS

OTHER THAN INVESTMENTS IN RELATED PARTIES

(In Thousands)

December 31, 2020	Cost (1)		Value		Amount at which shown in the Balance Sheet
Debt Securities:
Bonds:
U.S. government and government agencies and authorities	$	52,004	$	55,208	$	55,208
States, municipalities and political subdivisions	304,688		322,441		322,441
Foreign governments	1,765		1,884		1,884
Public utilities	56,998		61,608		61,608
All other corporate bonds (2)	3,818,758		4,055,989		4,055,989
Total Debt Securities	4,234,213		4,497,130		4,497,130
Equity Securities:
Common Stock
Industrial, miscellaneous and all other (3)	18,911		2,909		2,909
Total Equity Securities	18,911		2,909		2,909
Other investments (4)	46,219		46,219		46,219
Other short-term investments	191,086		191,086		191,086
Total Investments (other than investments in related parties)	$	4,490,429	$	4,737,344	$	4,737,344

(1) Original cost of equity securities and, as to debt securities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts.

(2) Includes structured securities, residential and commercial mortgage-backed securities.

(3) Included in “Other investments” in the consolidated balance sheets.

(4) Excludes equity securities.

1

Schedule II

NATIONAL GENERAL HOLDINGS CORP.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

BALANCE SHEETS — PARENT COMPANY ONLY

(In Thousands)

	December 31,
	2020		2019
ASSETS
Investments:
Debt securities, available-for-sale, at fair value (amortized cost - $0 and $95,527)	$	—	$	98,187
Short-term investments	—		4,807
Equity investment in subsidiaries	3,289,136		2,937,575
Total investments	3,289,136		3,040,569
Cash and cash equivalents	403,631		852
Accrued investment income	—		835
Property and equipment, net	142,042		158,670
Prepaid and other assets	10,874		26,658
Total assets	$	3,845,683	$	3,227,584
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	44,927	$	26,071
Debt	584,758		584,019
Total liabilities	$	629,685	$	610,090
Stockholders’ equity:
Total stockholders’ equity	$	3,215,998	$	2,617,494
Total liabilities and stockholders’ equity	$	3,845,683	$	3,227,584

See accompanying notes to condensed financial statements.

2

Schedule II

NATIONAL GENERAL HOLDINGS CORP.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

STATEMENTS OF INCOME AND COMPREHENSIVE INCOME — PARENT COMPANY ONLY

(In Thousands)

	Year Ended December 31,
	2020		2019		2018
Revenues:
Service and fee income	$	53,005	$	48,781	$	44,932
Investment income	2,200		3,929		1,205
Net gain (loss) on investments	7,094		1,026		(1,571)
Equity in undistributed net income of subsidiaries	513,023		365,932		232,101
Total revenues	575,322		419,668		276,667
Expenses:
Interest expense	35,618		38,670		39,380
Other expense, net	30,906		38,499		30,847
Total expenses	66,524		77,169		70,227
Income before provision (benefit) for income taxes	508,798		342,499		206,440
Benefit for income taxes	(4,533)		(5,570)		(914)
Net income attributable to NGHC	513,331		348,069		207,354
Dividends on preferred stock	(33,600)		(33,600)		(32,492)
Net income attributable to NGHC common stockholders	$	479,731	$	314,469	$	174,862
Net income attributable to NGHC	$	513,331	$	348,069	$	207,354
Other comprehensive income (loss), net of tax	128,655		126,678		(44,054)
Comprehensive income attributable to NGHC	$	641,986	$	474,747	$	163,300

See accompanying notes to condensed financial statements.

3

Schedule II

NATIONAL GENERAL HOLDINGS CORP.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

STATEMENTS OF CASH FLOWS — PARENT COMPANY ONLY

(In Thousands)

	Year Ended December 31,
	2020		2019		2018
Cash flows from operating activities:
Net income attributable to NGHC	$	513,331	$	348,069	$	207,354
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Net (gain) loss on investments	(7,094)		(1,026)		1,571
Depreciation and amortization	26,244		23,280		20,668
Net amortization of premium net of discount on debt securities	700		233		581
Stock-based compensation expense	12,421		10,996		9,020
Equity in undistributed net income of subsidiaries	(513,023)		(365,932)		(232,101)
Changes in assets and liabilities:
Accrued investment income	835		(108)		(500)
Prepaid and other assets	15,499		4,927		23,334
Accounts payable, accrued expenses and other liabilities	301,328		(1,728)		8,993
Net cash provided by operating activities	350,241		18,711		38,920
Cash flows from investing activities:
Purchases of:
Debt securities, available-for-sale	(6,986)		(46,832)		(70,308)
Short-term investments	(389,372)		(284,875)		(342,137)
Property and equipment	(9,840)		(75,673)		(73,563)
Proceeds from:
Sale of debt securities, available-for-sale	91,301		20,723		16,052
Maturity of debt securities, available-for-sale	16,813		10,218		2,208
Sale of short-term investments	394,296		397,945		225,395
Distributions received from subsidiaries	102,150		50,825		130,772
Contributions and acquisition of subsidiaries	(80,000)		(17,091)		(9,875)
Net cash provided by (used in) investing activities	118,362		55,240		(121,456)
Cash flows from financing activities:
Common stock repurchased	(8,482)		—		—
Payments of debt issuance costs	—		(1,134)		—
Repayments of debt and return of capital	—		(20,000)		(30,000)
Issuances of common and preferred stock, net of fees	—		—		162,120
Issuance of common stock — employee share options	2,635		594		1,978
Taxes paid related to net share settlement of equity awards	(3,678)		(3,734)		(3,024)
Dividends paid to common and preferred shareholders	(56,299)		(52,781)		(48,611)
Net cash (used in) provided by financing activities	(65,824)		(77,055)		82,463
Net increase (decrease) in cash and cash equivalents	402,779		(3,104)		(73)
Cash and cash equivalents, beginning of the year	852		3,956		4,029
Cash and cash equivalents, end of the year	$	403,631	$	852	$	3,956

See accompanying notes to condensed financial statements.

4

Schedule II

NATIONAL GENERAL HOLDINGS CORP.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

NOTES — PARENT COMPANY ONLY

1. Basis of Presentation

In the parent-company-only financial statements, the Company’s investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. The Company’s share of net income of its unconsolidated subsidiaries is included in consolidated income using the equity method. The parent-company-only financial statements should be read in conjunction with the Company’s consolidated financial statements. Certain prior period amounts have been reclassified to conform to the current-year presentation.

2. Debt

For information relating to debt, see Note 11, “Debt” in the notes to the Company’s consolidated financial statements.

3. Dividends

For information relating to cash dividends paid to the registrant or the Company by its consolidated subsidiaries and investees accounted for by the equity method, see Note 18, “Statutory Financial Data, Risk-Based Capital and Dividend Restrictions” in the notes to the Company’s consolidated financial statements.

4. Subsequent Events

For information relating to subsequent events, see Note 22, “Subsequent Events” in the notes to the Company’s consolidated financial statements.

5

Schedule III

NATIONAL GENERAL HOLDINGS CORP.

SUPPLEMENTARY INSURANCE INFORMATION

(In Thousands)

	As of December 31,						Year Ended December 31,
Segment	Deferred Acquisition Costs		Unpaid Loss and Loss Adjustment Expense Reserves		Unearned Premiums		Net Earned Premium		Net Investment Income		Loss and Loss Adjustment Expense Incurred		Deferred Acquisition Costs Amortization		Other Operating Expenses		Net Written Premium
2020
Property and Casualty	$	259,163	$	2,708,171	$	2,173,399	$	3,809,153	$	—	$	2,505,189	$	613,905	$	67,381	$	3,934,463
Accident and Health	26,742		180,927		10,307		685,467		—		318,893		21,908		287,375		686,381
Corporate and Other	—		—		—		—		118,257		—		—		—		—
Total	$	285,905	$	2,889,098	$	2,183,706	$	4,494,620	$	118,257	$	2,824,082	$	635,813	$	354,756	$	4,620,844
2019
Property and Casualty	$	239,293	$	2,734,540	$	2,210,851	$	3,455,023	$	—	$	2,543,788	$	539,816	$	65,203	$	3,564,015
Accident and Health	24,230		151,874		8,368		663,019		—		310,680		37,541		184,807		660,606
Corporate and Other	—		—		—		—		141,233		—		—		—		—
Total	$	263,523	$	2,886,414	$	2,219,219	$	4,118,042	$	141,233	$	2,854,468	$	577,357	$	250,010	$	4,224,621
2018
Property and Casualty	$	226,188	$	2,685,879	$	2,120,283	$	3,115,789	$	—	$	2,340,881	$	495,009	$	55,531	$	3,201,174
Accident and Health	25,220		271,280		36,554		616,413		—		321,345		15,784		168,942		626,539
Corporate and Other	—		—		—		—		119,034		—		—		—		—
Total	$	251,408	$	2,957,159	$	2,156,837	$	3,732,202	$	119,034	$	2,662,226	$	510,793	$	224,473	$	3,827,713

6

Schedule IV

NATIONAL GENERAL HOLDINGS CORP.

REINSURANCE

(In Thousands)

Year Ended December 31,	Gross Amount		Ceded to Other Companies		Assumed from Other Companies		Net Amount		Percent of Amount Assumed to Net
2020
Earned Premiums	$	5,613,630	$	(1,175,440)	$	56,430	$	4,494,620	1.3	%
2019
Earned Premiums	$	5,486,835	$	(1,449,365)	$	80,572	$	4,118,042	2.0	%
2018
Earned Premiums	$	5,049,512	$	(1,440,575)	$	123,265	$	3,732,202	3.3	%

7

Schedule VI

NATIONAL GENERAL HOLDINGS CORP.

SUPPLEMENTAL INFORMATION CONCERNING

PROPERTY-CASUALTY INSURANCE OPERATIONS

(In Thousands)

	Losses and Loss Adjustment Expenses Incurred Related to				Paid Losses and Loss Adjustment Expenses
Year Ended December 31,	Current Year		Prior Years
2020
Property and Casualty (1)	$	2,477,177	$	28,012	$	2,407,847
Accident and Health	342,714		(23,821)		300,271
Total	$	2,819,891	$	4,191	$	2,708,118
2019
Property and Casualty (1)	$	2,493,268	$	50,520	$	2,427,676
Accident and Health	356,036		(45,356)		328,887
Total	$	2,849,304	$	5,164	$	2,756,563
2018
Property and Casualty (1)	$	2,343,938	$	(3,057)	$	2,209,570
Accident and Health	352,322		(30,977)		305,667
Total	$	2,696,260	$	(34,034)	$	2,515,237

(1) Property and Casualty includes the Reciprocal Exchanges.

8

EX-4.1

EXHIBIT 4.1

DESCRIPTION OF SECURITIES

REGISTERED UNDER SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

As of December 31, 2020, the Company had five classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): (1) our common stock, par value $0.01 per share, (2) our 7.50% Non-Cumulative Preferred Stock, Series A, (3) our Depositary Shares, each Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B, (4) our Depositary Shares, each Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series C and (5) our 7.625% Subordinated Notes due 2055. All of the information provided in this Exhibit 4.1 is as of December 31, 2020.

DESCRIPTION OF COMMON STOCK

The following description set forth below of our common stock is only a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our Second Amended and Restated Certificate of Incorporation (as amended and restated, the “Certificate of Incorporation”), which is incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part, and our Amended and Restated Bylaws (as amended and restated, the “Bylaws”), which are incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (No. 333-190454) filed on August 7, 2013, and applicable Delaware law. We encourage you to read our Certificate of Incorporation, our Bylaws and the applicable provisions of Delaware law.

Our Certificate of Incorporation authorizes the issuance of 150,000,000 shares of common stock, $0.01 par value per share.

During 2020, our common stock was listed on the Nasdaq Global Market under the symbol “NGHC.”

Voting Power

The holders of our common stock are entitled to one vote per share on any matter to be voted upon by stockholders.

The holders of common stock are not entitled to cumulative voting rights with respect to the election of directors, which means that the holders of a majority of the voting power of our common stock voted can elect all of the directors then standing for election.

Dividend

Holders of shares of common stock are entitled to receive ratably the dividends, if any, as may be declared from time to time by the board of directors out of funds legally available therefor, subject to any contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock or debt securities. As described below, holders of our 7.50% Non-Cumulative Preferred Stock, Series A, 7.50% Non-Cumulative Preferred Stock, Series B, and 7.50% Non-Cumulative Preferred Stock, Series C are entitled to receive dividends in preference to and in priority over dividends on common stock and dividends on any future series of preferred stock may be cumulative or non-cumulative as determined by our board of directors.

Preemptive or Other Rights

Holders of our common stock have no preemptive or conversion rights or other subscription rights and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of our outstanding 7.50% Non-Cumulative Preferred Stock, Series A, 7.50% Non-Cumulative Preferred Stock, Series B, and 7.50% Non-Cumulative Preferred Stock, Series C, and the holders of shares of any series of preferred stock which we may designate in the future.

Liquidation

In the event of our liquidation, dissolution or winding up, the holders of our common stock are entitled to share ratably in the assets legally available for distribution to stockholders after the payment of all of our known debts and liabilities and after adequate provision has been made for each class of stock then outstanding that has preference over our common stock.

Certain Anti-Takeover Effects of Provisions of Our Bylaws and Delaware Law

Special Meetings of Stockholders

Our Certificate of Incorporation generally provides that special meetings of our stockholders may be called only by the chairman of the board of directors, the chief executive officer, the president or by resolution of the board of directors. Stockholders are not permitted to call a special meeting or require our board of directors to call a special meeting. At any special meeting of our stockholders, only such business will be conducted as has been specified in the notice of meeting given by or at the direction of our board of directors or otherwise properly brought before the special meeting by or at the direction of our board of directors.

No Cumulative Voting

The Delaware General Corporation Law (the “DGCL”) provides that stockholders are not entitled to the right to cumulate votes in the election of directors unless a corporation’s certificate of incorporation provides otherwise. Our Certificate of Incorporation does not provide for cumulative voting in the election of directors.

Advance Notice Requirements for Stockholder Proposals and Director Nominations

Our Bylaws provide that stockholders seeking to bring business before a meeting of stockholders, or to nominate candidates for election as directors at a meeting of stockholders, must provide timely notice of their intent in writing. To be timely, a stockholder’s notice must be delivered to our principal executive offices not less than 90 days nor more than 120 days prior to the one year anniversary of the date of the preceding year’s annual meeting of stockholders. Our Bylaws also specify certain requirements as to the form and content of a stockholder’s notice, including the stockholder’s ownership of the Company, synthetic equity transactions engaged in by the stockholder related to the Company, any proxies or voting agreements pursuant to which such stockholder has a right to vote shares of the Company, any stock borrowing agreements entered into by the stockholder related to the Company, any performance related fees the stockholder is entitled to based on changes in the value of the stock of the Company and any other information that would be required to be made in connection with a solicitation of proxies by such stockholder pursuant to Section 14(a) of the Exchange Act. Our Bylaws also require that such stockholder provide information concerning each item of business proposed by the stockholder and individuals nominated for election as a director, as applicable. Failure to timely comply with these provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.

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Stockholder-Initiated Bylaws Amendments

Our Bylaws may be adopted, amended, altered or repealed by stockholders only upon approval of at least a majority of the voting power of all the then outstanding shares of our common stock. Additionally, our Bylaws may be amended, altered or repealed by the board of directors by a majority vote.

Authorized but Unissued Shares

Our authorized but unissued shares of common stock are available for future issuances without stockholder approval and can be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

“Blank Check Preferred Stock”

Our board of directors is authorized, without further action by our stockholders, to issue shares of preferred stock in one or more classes or series, and with respect to each series, to fix the number of shares constituting that series, and establish the rights and terms of that series. The board of directors may also from time to time authorize the issuance of additional shares of preferred stock, in one or more series, without stockholder action. The purpose of authorizing the board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays and uncertainties associated with a stockholder vote on specific issuances. The issuance of preferred stock while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or discourage a third party from acquiring, a majority of our outstanding voting shares. Our board of directors may issue preferred stock with voting and conversion rights that could adversely affect the voting power of the holders of our common stock.

Section 203 of the DGCL

We are subject to Section 203 of the DGCL. Subject to certain exceptions, Section 203 of the DGCL prohibits a public Delaware corporation from engaging in a business combination (as defined in such section) with an “interested stockholder” (defined generally as any person who beneficially owns 15% or more of the outstanding voting stock of such corporation or any person affiliated with such person) for a period of three years following the time that such stockholder became an interested stockholder, unless: (1) prior to such time the board of directors of such corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (2) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of such corporation at the time the transaction commenced (excluding for purposes of determining the voting stock of such corporation outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (a) by persons who are directors and also officers of such corporation and (b) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer); or (3) on or subsequent to such time, the business combination is approved by the board of directors of such corporation and authorized at a meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock of such corporation not owned by the interested stockholder.

Limitation of Liability and Indemnification Matters

As permitted by the DGCL, our Certificate of Incorporation includes provisions that limit or eliminate the personal liability of our directors for a breach of their fiduciary duty of care as a director. The duty of care generally requires that, when acting on behalf of the corporation, directors exercise an informed business judgment based on all material information reasonably available to them. Consequently, a director will not be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted under Delaware law.

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Our Certificate of Incorporation also authorizes us to indemnify our officers, directors and other agents to the fullest extent permitted under Delaware law, and we may advance expenses to our directors, officers and employees in connection with a legal proceeding, subject to limited exceptions. As permitted by the DGCL, our Certificate of Incorporation provides that:

•we will indemnify our directors and officers to the fullest extent permitted by the DGCL, subject to limited exceptions; and

•we may purchase and maintain insurance on behalf of our current or former directors, officers, employees or agents against any liability asserted against them and incurred by them in any such capacity, or arising out of their status as such.

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In addition, we have entered into indemnification agreements with each of our executive officers and directors pursuant to which each executive officer and director will be indemnified as described above (or furnished contribution by us if indemnification is unavailable) and will be advanced costs and expenses subject to delivery of an undertaking to repay any advanced amounts if it is ultimately determined that such executive officer or director is not entitled to indemnification for such costs and expenses.

Forum

Our Bylaws provide that, subject to certain exceptions, unless we consent in writing to an alternative forum, a state or federal court located in the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer, employee or agent of the Company to the Company or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our Certificate of Incorporation or our Bylaws, or (iv) any action asserting a claim governed by the internal affairs doctrine. The Bylaws further provide that any person or entity purchasing or otherwise acquiring an interest in our shares of capital stock is deemed to have notice of and consented to the foregoing. Although we believe this provision benefits the Company by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, it may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees.

Transfer Agent

Our registrar and transfer agent for the shares is American Stock Transfer & Trust Company.

Insurance Regulations Concerning Change of Control

State insurance holding company laws require prior approval by the respective state insurance departments of any change of control of an insurer. “Control” is generally defined as the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of the company, whether through the ownership of voting securities, by contract or otherwise. Control is generally presumed to exist through the direct or indirect ownership of 10% or more of the voting securities of a domestic insurance company or any entity that controls a domestic insurance company. Any purchase of our shares that would result in the purchaser owning more than 10% of our voting securities will be presumed to result in the acquisition of control of our insurance subsidiaries and require prior regulatory approval.

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DESCRIPTION OF THE SERIES A PREFERRED STOCK

The following description set forth below of our 7.50% Non-Cumulative Preferred Stock, Series A (“Series A Preferred Stock”) is only a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our Certificate of Incorporation and our Certificate of Designations for our 7.50% Non-Cumulative Preferred Stock, Series A, each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part. You should refer to such certificate for specific information on the Series A Preferred Stock.

General

The Certificate of Designations sets forth the specific rights, preferences, limitations and other terms of the Series A Preferred Stock. The Series A Preferred Stock is a single series of authorized preferred stock consisting of 2,200,000 shares.

Our Certificate of Incorporation permits us to authorize the issuance of up to 10,000,000 shares of preferred stock, in one or more series without stockholder action. The Series A Preferred Stock constitute a series of our authorized preferred stock. We may from time to time, without notice to or the consent of holders of the Series A Preferred Stock, issue shares of preferred stock that rank equally with or junior to the Series A Preferred Stock. We may also from time to time, without notice to or consent of holders of the Series A Preferred Stock, issue additional shares of the Series A Preferred Stock; provided, that any such additional shares of Series A Preferred Stock are not treated as “disqualified preferred stock” within the meaning of Section 1059(f)(2) of the Internal Revenue Code (or any successor provision) and such additional shares of Series A Preferred Stock are otherwise treated as fungible with our already outstanding Series A Preferred Stock for U.S. federal income tax purposes. The additional shares of Series A Preferred Stock would form a single series with our already outstanding Series A Preferred Stock. We have the authority to issue fractional shares of Series A Preferred Stock.

The Series A Preferred Stock are fully paid and non-assessable. Holders of the Series A Preferred Stock do not have preemptive or similar rights to acquire any of our capital stock. Holders do not have the right to convert Series A Preferred Stock into, or exchange Series A Preferred Stock for, shares of any other class or series of shares or other securities of ours. The Series A Preferred Stock has no stated maturity and is not subject to any sinking fund, retirement fund or purchase fund or other obligation of the Company to redeem or purchase the Series A Preferred Stock.

Ranking

The Series A Preferred Stock rank senior to our common stock and any other junior stock with respect to the payment of dividends and distributions of assets upon liquidation, dissolution or winding-up, equally with the Series B Preferred Stock, the Series C Preferred Stock and each other series of our preferred stock that we may issue the terms of which provide that they rank equally with the Series A Preferred Stock with respect to the payment of dividends and distributions of assets upon liquidation, dissolution or winding-up and junior to each other series of our preferred stock that we may issue in the future the terms of which provide that they rank senior to the Series A Preferred Stock with respect to the payment of dividends and distributions of assets upon our liquidation, dissolution or winding-up.

Dividends

Dividends on the Series A Preferred Stock are not mandatory. Holders of Series A Preferred Stock are entitled to receive dividends only when, as and if declared by the Board of Directors of the Company or a duly authorized committee of the Board, out of lawfully available funds for the payment of dividends, non-cumulative cash dividends from the original issue date, quarterly on the 15th day of January, April, July and October of each year, commencing on October 15, 2014. These dividends will accrue with respect to a particular dividend period on the liquidation preference amount of $25.00 per share at an annual rate of 7.50%. In the event that we issue additional

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Series A Preferred Stock after the original issue date, dividends on such additional shares may accrue from the original issue date or any other date we specify at the time such additional shares are issued.

Dividends, if so declared, will be payable to holders of record of the Series A Preferred Stock as they appear on our books on the applicable record date, which shall be January 1, April 1, July 1 and October 1, as applicable, immediately preceding the applicable dividend payment date or such other record date fixed by our Board of Directors (or a duly authorized committee of the Board) that is not more than 60 nor less than 10 days prior to such dividend payment date (each, a “dividend record date”). These dividend record dates will apply regardless of whether a particular dividend record date is a business day.

A dividend period is the period from and including a dividend payment date to but excluding the next dividend payment date. Dividends payable on the Series A Preferred Stock are computed on the basis of a 360-day year consisting of twelve 30-day months. If any date on which dividends would otherwise be payable is not a business day, then the dividend payment date will be the next succeeding business day with the same force and effect as if made on the original dividend payment date, and no additional dividends shall accrue on the amount so payable from such date to such next succeeding business day.

Dividends on the Series A Preferred Stock are not cumulative. Accordingly, if our Board of Directors, or a duly authorized committee of the Board, does not declare a dividend on the Series A Preferred Stock payable in respect of any dividend period before the related dividend payment date, such dividend will not accumulate and will not be payable and we will have no obligation to pay a dividend for that dividend period on the dividend payment date or at any future time or to pay interest with respect to such dividends, whether or not dividends are declared for any future dividend period on the Series A Preferred Stock or any other parity stock we may issue in the future.

So long as any Series A Preferred Stock remain outstanding for any dividend period, unless the full dividends for the latest completed dividend period on all outstanding Series A Preferred Stock and parity stock (as defined below) have been declared and paid (or declared and a sum sufficient for the payment thereof has been set aside):

•no dividend shall be paid or declared on our common stock, or any other junior stock (other than a dividend payable solely in common stock or other junior stock);

•no common stock or other junior stock shall be purchased, redeemed or otherwise acquired for consideration by us, directly or indirectly (other than (1) as a result of a reclassification of junior stock for or into other junior stock, or the exchange or conversion of one share of junior stock for or into another share of junior stock, or (2) through the use of the proceeds of a substantially contemporaneous sale of junior stock) nor shall any monies be paid to or made available for a sinking fund for the redemption of such stock (it being understood that the provisions of this bullet point shall not apply to grants or settlements of grants pursuant to any equity compensation plan adopted by us); and

•no shares of Series A Preferred Stock or parity stock shall be repurchased, redeemed or otherwise acquired for consideration by us other than pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series A Preferred Stock and such parity stock except by conversion into or exchange for junior stock.

As used in this Exhibit 4.1, “junior stock” means any class or series of our capital stock that ranks junior to the Series A Preferred Stock either as to the payment of dividends or as to the distribution of assets upon our liquidation, dissolution or winding-up. As of the date of this Exhibit 4.1, junior stock consists solely of our common stock.

As used in this Exhibit 4.1, “parity stock” means any class or series of our capital stock that ranks equally with the Series A Preferred Stock with respect to the payment of dividends and in the distribution of assets on our liquidation, dissolution or winding-up. As of the date of this Exhibit 4.1, parity stock consists of our Series B Preferred Stock and Series C Preferred Stock.

When dividends are not paid (or duly provided for) in full on any dividend payment date (or, in the case of parity stock having dividend payment dates different from the dividend payment dates pertaining to the Series A

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Preferred Stock, on a dividend payment date falling within the related dividend period for the Series A Preferred Stock) upon the Series A Preferred Stock and any parity stock, all dividends declared by our Board of Directors or a duly authorized committee of the Board upon the Series A Preferred Stock and all such parity stock and payable on such dividend payment date (or, in the case of parity stock having dividend payment dates different from the dividend payment dates pertaining to the Series A Preferred Stock, on a dividend payment date falling within the related dividend period for the Series A Preferred Stock) shall be declared by the Board or such committee pro rata so that the respective amounts of such dividends shall bear the same ratio to each other as all declared dividends per share of Series A Preferred Stock and all parity stock payable on such dividend payment date (or, in the case of parity stock having dividend payment dates different from the dividend payment dates pertaining to the Series A Preferred Stock, on a dividend payment date falling within the related dividend period for the Series A Preferred Stock) bear to each other.

Our ability to pay dividends on the Series A Preferred Stock may be limited by the terms of our agreements governing our existing and future indebtedness and by the provisions of other existing and future agreements.

In addition, we are a holding company and conduct our business operations through our various subsidiaries. Our principal sources of funds are dividends and other payments from our insurance subsidiaries, income from our investment portfolio and funds that may be raised from time to time in the capital markets. We will be largely dependent on amounts from our insurance subsidiaries to pay principal and interest on any indebtedness that we may incur, to pay holding company operating expenses, to make capital investments in our other subsidiaries and to pay dividends on our capital stock, including the Series A Preferred Stock.

Our insurance subsidiaries are subject to statutory and regulatory restrictions imposed on insurance companies by their states of domicile, which limit the amount of cash dividends or distributions that they may pay to us unless special permission is received from the insurance regulator of the relevant domiciliary state. In general, the maximum amount of dividends that the insurance subsidiaries may pay in any 12-month period without regulatory approval is the greater of adjusted statutory net income or 10% of statutory policyholders’ surplus as of the preceding calendar year end. Adjusted statutory net income is generally defined for this purpose to be statutory net income, net of realized capital gains, for the calendar year preceding the date of the dividend. In addition, other states may limit or restrict our insurance subsidiaries’ ability to pay stockholder dividends generally or as a condition to issuance of a certificate of authority.

Liquidation Rights

Upon our voluntary or involuntary liquidation, dissolution or winding-up, holders of the Series A Preferred Stock and any parity stock are entitled to receive out of our assets available for distribution to stockholders, after satisfaction of liabilities to creditors, if any, but before any distribution of assets is made to holders of our common stock or any of our other junior stock, a liquidating distribution in the amount equal to the liquidation preference of $25.00 per share of Series A Preferred Stock or the amount of the liquidation preference of such parity stock, as applicable, plus any declared and unpaid dividends. Holders of the Series A Preferred Stock will not be entitled to any other amounts from us after they have received their full liquidation preference plus any declared and unpaid dividends.

In any such distribution, if our assets are not sufficient to pay the liquidation distributions in full to all holders of the Series A Preferred Stock and all holders of any parity stock, the amounts paid to the holders of Series A Preferred Stock and to the holders of any parity stock will be paid pro rata in accordance with the respective aggregate liquidation distributions of those holders. In any such distribution, the liquidation distribution to any holder of preferred stock means the amount payable to such holder in such distribution, including any declared but unpaid dividends (and any unpaid, accrued cumulative dividends in the case of any holder of shares on which dividends accrue on a cumulative basis). If the liquidation distributions have been paid in full to all holders of shares of the Series A Preferred Stock and any holders of shares of parity stock and shares ranking senior to the Series A Preferred Stock with respect to the distribution of assets upon liquidation, dissolution or winding-up, the holders of our other classes of capital stock will be entitled to receive all of our remaining assets according to their respective rights and preferences.

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For purposes of this section, a consolidation or merger involving the Company with any other entity, including the consolidation or merger in which the holders of Series A Preferred Stock receive cash, securities or other property for their shares, or the sale or transfer of all or substantially all of the property and assets of the Company for cash, securities or other property, will not be deemed to constitute a liquidation, dissolution or winding-up.

Redemption

The Series A Preferred Stock is not subject to any mandatory redemption, sinking fund, retirement fund, purchase fund or other similar provisions.

As of July 15, 2019, the Series A Preferred Stock are redeemable at our option, in whole or in part, upon not less than 30 days nor more than 60 days notice, at a redemption price equal to $25.00 per share plus declared and unpaid dividends on the shares of Series A Preferred Stock called for redemption for prior dividend periods, if any, plus accrued but unpaid dividends (whether or not declared) thereon for the then-current dividend period, to, but excluding, the date of redemption, without accumulation of any other undeclared dividends. Holders of the Series A Preferred Stock have no right to require the redemption of the Series A Preferred Stock.

The redemption price for any shares of Series A Preferred Stock shall be payable on the redemption date to the holders of such shares against book entry transfer or surrender of the certificate(s) evidencing such shares to us or our agent. Any declared but unpaid dividends payable on a redemption date that occurs subsequent to the dividend record date for a dividend period shall not be paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares on such dividend record date relating to the dividend payment date provided in “-Dividends” above.

If shares of the Series A Preferred Stock are to be redeemed, the notice of redemption shall be given by first class mail to the holders of record of the Series A Preferred Stock to be redeemed, mailed not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided that, if the Series A Preferred Stock is held in book-entry form through The Depository Trust Company, or “DTC,” we may give such notice in any manner permitted by DTC). Each notice of redemption will include a statement setting forth:

•the redemption date;

•the number of shares of Series A Preferred Stock to be redeemed and, if less than all the shares of Series A Preferred Stock held by such holder are to be redeemed, the number of such shares of Series A Preferred Stock to be redeemed from such holder;

•the redemption price; and

•that the shares should be delivered via book entry transfer or the place or places where holders may surrender certificates evidencing the Series A Preferred Stock for payment of the redemption price.

If notice of redemption of any shares of Series A Preferred Stock has been given and if the funds necessary for such redemption and to pay declared and unpaid dividends have been set aside by us for the benefit of the holders of such shares of Series A Preferred Stock so called for redemption, then, from and after the redemption date, no further dividends will be declared on such shares of Series A Preferred Stock, such shares of Series A Preferred Stock shall no longer be deemed outstanding and all rights of the holders of such shares of Series A Preferred Stock will terminate, except the right to receive the redemption price, without interest.

In case of any redemption of only part of the shares of Series A Preferred Stock at the time outstanding, the shares of Series A Preferred Stock to be redeemed shall be selected either pro rata or in such other manner as we may determine to be fair and equitable.

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Our ability to redeem the Series A Preferred Stock as described above may be limited by the terms of our agreements governing our existing and future indebtedness and by the provisions of other existing and future agreements.

Voting Rights

Except as provided below or as otherwise may be required by applicable law, the holders of the Series A Preferred Stock have no voting rights.

Whenever dividends on any Series A Preferred Stock shall have not been declared and paid for the equivalent of six or more dividend periods, whether or not for consecutive dividend periods (a “nonpayment event”), the holders of the Series A Preferred Stock, voting together as a single class with holders of any and all other series of voting preferred stock (as defined below) then outstanding, will be entitled to vote for the election of a total of two additional members of the Board of Directors of the Company (the “preferred stock directors”), provided that the election of any such directors shall not cause us to violate the corporate governance requirement of any exchange on which our securities may be listed or quoted that listed or quoted companies must have a majority of independent directors. The number of preferred stock directors will not be more than two at any time. In the event of a non-payment event the number of directors on our Board of Directors shall automatically increase by two and the new directors shall be elected at a special meeting called at the request of the holders of record of at least 20% of the aggregate voting power of the Series A Preferred Stock or of any other series of voting preferred stock (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders of the Company, in which event such election shall be held at such next annual or special meeting of stockholders), and at each subsequent annual meeting.

As used in this Exhibit 4.1, “voting preferred stock” means, with regard to any election or removal of a preferred stock director or any other matter as to which the holders of Series A Preferred Stock are entitled to vote, any other class or series of our parity stock upon which like voting rights have been conferred and are exercisable. Whether a plurality, majority or other portion of the Series A Preferred Stock and any other voting preferred stock have been voted in favor of any matter shall be determined by reference to the aggregate voting power of the Series A Preferred Stock and voting preferred stock voted.

If and when dividends for at least four consecutive dividend periods following a nonpayment event have been paid in full (or declared and a sum sufficient for such payment shall have been set aside), the holders of the Series A Preferred Stock shall be divested of the foregoing voting rights (subject to revesting in the event of each subsequent nonpayment event) and, if such voting rights for all other holders of voting preferred stock have terminated, the term of office of each preferred stock director so elected shall terminate and the number of directors on the Board of Directors of the Company shall automatically decrease by two. In determining whether dividends have been paid for four dividend periods following a nonpayment event, we may take account of any dividend we elect to pay for such a dividend period after the regular dividend payment date for that period has passed.

Any preferred stock director may be removed at any time without cause by the holders of record of a majority of the aggregate voting power, as determined under our Certificate of Incorporation, of the Series A Preferred Stock and any other shares of voting preferred stock then outstanding (voting together as a single class) when they have the voting rights described above. So long as a nonpayment event shall continue, any vacancy in the office of a preferred stock director (other than prior to the initial election after a nonpayment event) may be filled by the written consent of the preferred stock director remaining in office, or if none remains in office, by a vote of the holders of record of a majority of the outstanding shares of Series A Preferred Stock and any other shares of voting preferred stock then outstanding (voting together as a single class) when they have the voting rights described above. Any vote of stockholders to remove, or to fill a vacancy in the office of, a preferred stock director may be taken at a special or annual meeting of such stockholders, called as provided above for an initial election of preferred stock director after a nonpayment event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders of the Company, in which event such election shall be held at such next annual or special meeting of stockholders). The preferred stock directors shall each be entitled to one vote per director on any matter. Each preferred stock director elected at any special or annual meeting of stockholders or by

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written consent of the other preferred stock director shall hold office until the next annual meeting of the stockholders of the Company if such office shall not have previously terminated as above provided.

So long as any shares of Series A Preferred Stock remain outstanding and subject in all cases to any other vote of stockholders required under applicable law or our Certificate of Incorporation:

•we will not, without the affirmative vote or consent of the holders of at least two-thirds of the voting power of Series A Preferred Stock and all other series of voting preferred stock entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing without a meeting or at a meeting, authorize or create, or increase the authorized amount of, any specific class or series of capital stock ranking senior to the Series A Preferred Stock with respect to the payment of dividends or the distribution of our assets upon our liquidation, dissolution or winding up;

•we will not, without the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock given in person or by proxy, either in writing without a meeting or at a meeting:

•amend, alter or repeal the provisions of our Certificate of Incorporation or the Certificate of Designations for the Series A Preferred Stock so as to adversely affect the rights, preferences, privileges and voting powers of the Series A Preferred Stock; or

•consummate a binding share exchange or reclassification involving the Series A Preferred Stock or a merger or consolidation of us with another entity, unless in each case (i) shares of Series A Preferred Stock remain outstanding or, in the case of any such merger or consolidation with respect to which we are not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, in each case, that is an entity organized and existing under the laws of the United States of America, any state thereof or the District of Columbia, and (ii) such shares of Series A Preferred Stock remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers and limitations and restrictions, taken as a whole, as are not less favorable to the holders thereof than the rights, preferences, privileges and voting powers and limitations and restrictions of the Series A Preferred Stock, taken as a whole, provided, however, that (1) any increase in the amount of our authorized but unissued shares of preferred stock, (2) any increase in the authorized or issued shares of Series A Preferred Stock, and (3) the creation and issuance, or an increase in the authorized or issued amount, of other series of preferred stock ranking equally with or junior to the Series A Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution of assets upon our liquidation, dissolution or winding up, will not be deemed to adversely affect the rights, preferences, privileges or voting powers of the Series A Preferred Stock.

Without the consent of the holders of the Series A Preferred Stock, so long as such action does not adversely affect the rights, preferences, privileges and voting powers and limitations and restrictions of the Series A Preferred Stock, the Board of Directors of the Company may, subject to any vote of our stockholders required by applicable law or our Certificate of Incorporation, by resolution, amend, alter, supplement or repeal any terms of the Series A Preferred Stock:

•to cure any ambiguity, or to cure, correct or supplement any provision contained in the Certificate of Designations for the Series A Preferred Stock that may be defective or inconsistent; or

•to make any provision with respect to matters or questions arising with respect to the Series A Preferred Stock that is not inconsistent with the provisions of the Certificate of Designations;

provided that any such amendment, alteration, supplement or repeal of any terms of the Series A Preferred Stock effected in order to conform the terms thereof to the description of the terms of the Series A Preferred Stock set forth under “Description of the Series A Preferred Stock” in this Exhibit 4.1 shall be deemed not to adversely affect the rights, preferences, privileges and voting powers of the Series A Preferred Stock.

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On each matter on which holders of Series A Preferred Stock are entitled to vote, each share of Series A Preferred Stock will be entitled to one vote, and when shares of any other class or series of our preferred stock have the right to vote with the Series A Preferred Stock as a single class on any matter, the Series A Preferred Stock and the shares of each such other class or series will have one vote for each $25.00 of liquidation preference (excluding accrued and unpaid dividends).

The foregoing voting provisions will not apply with respect to the Series A Preferred Stock if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding Series A Preferred Stock shall have been redeemed or called for redemption upon proper notice and sufficient funds shall have been set aside by us for the benefit of the holders of Series A Preferred Stock to effect such redemption.

Conversion

Holders do not have the right to convert Series A Preferred Stock into, or exchange Series A Preferred Stock for, any other securities or property of the Company.

Listing of the Series A Preferred Stock

The Series A Preferred Stock are listed on the Nasdaq Global Market under the symbol “NGHCP.”

Transfer Agent, Registrar, Dividend Disbursing Agent and Redemption Agent

American Stock Transfer & Trust Company is the transfer agent, registrar, dividend disbursing agent and redemption agent for the Series A Preferred Stock.

Book-Entry; Delivery and Form

The Series A Preferred Stock are represented by one or more global securities that are deposited with and registered in the name of DTC or its nominee. The global securities are issued to DTC, the depository for the Series A Preferred Stock, who keeps a computerized record of its participants whose clients have purchased the Series A Preferred Stock. Each participant will then keep a record of its clients. Unless exchanged in whole or in part for a certificated security, a global security may not be transferred. However, DTC, its nominees, and their successors may transfer a global security as a whole to one another. Beneficial interests in the global securities will be shown on, and transfers of the global securities will be made only through, records maintained by DTC and its participants.

Purchases of Series A Preferred Stock through the DTC system must be made by or through a direct participant, who receives credit for the Series A Preferred Stock on DTC’s records. The beneficial owner’s ownership interest is only recorded in the direct (or indirect) participants’ records. DTC has no knowledge of the beneficial owner’s individual ownership of the Series A Preferred Stock. DTC’s records only show the identity of the direct participants and the amount of the Series A Preferred Stock held by or through them. The beneficial owner does not receive a written confirmation of its purchase or sale or any periodic account statement directly from DTC. The beneficial owner receives these from its direct (or indirect) participant. Thus, the direct (or indirect) participants are responsible for keeping accurate account of the holdings of their customers.

We wire dividend payments to DTC’s nominee and we treat DTC’s nominee as the owner of the global securities for all purposes. Accordingly, we have no direct responsibility or liability to pay amounts due on the global securities to any other beneficial owner in the global securities.

Any redemption notices will be sent by us directly to DTC, who will in turn inform the direct participants, who will then contact the beneficial holders.

It is DTC’s current practice, upon receipt of any payment of dividends or liquidation amount, to credit direct participants’ accounts on the payment date based on their holdings of beneficial interests in the global securities as shown on DTC’s records. In addition, it is DTC’s current practice to assign any consenting or voting rights to direct

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participants whose accounts are credited with preferred securities on a record date, by using an omnibus proxy. Payments by participants to owners of beneficial interests in the global securities, and voting by participants, will be based on the customary practices between the participants and owners of beneficial interests, as is the case with the Series A Preferred Stock held for the account of customers registered in “street name.” However, payments will be the responsibility of the participants and not of DTC or us.

Shares of Series A Preferred Stock represented by global securities are exchangeable for certificated securities with the same terms in authorized denominations only if:

•DTC is unwilling or unable to continue as depositary or if DTC ceases to be a clearing agency registered under applicable law and a successor depositary is not appointed by us within 90 days; or

•we determine not to require all of the Series A Preferred Stock to be represented by global securities.

If the book-entry-only system is discontinued, the transfer agent will keep the registration books for the Series A Preferred Stock at its corporate office.

DESCRIPTION OF THE SERIES B PREFERRED STOCK

The following description set forth below of our 7.50% Non-Cumulative Preferred Stock, Series B (“Series B Preferred Stock”) is only a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our Certificate of Incorporation and our Certificate of Designations for our 7.50% Non-Cumulative Preferred Stock, Series B, each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part. You should refer to such certificate for specific information on the Series B Preferred Stock.

General

The Certificate of Designations sets forth the specific rights, preferences, limitations and other terms of the Series B Preferred Stock as represented by the depositary shares. The Series B Preferred Stock is a single series of authorized preferred stock consisting of 165,000 shares.

The Certificate of Incorporation permits us to authorize the issuance of up to 10,000,000 shares of preferred stock, in one or more series without stockholder action. The Series B Preferred Stock constitutes a series of our authorized preferred stock. We may from time to time, without notice to or the consent of holders of the Series B Preferred Stock (or the consent of the holders of the depositary shares), issue shares of preferred stock that rank equally with or junior to the Series B Preferred Stock. We may also from time to time, without notice to or consent of holders of the Series B Preferred Stock (or the consent of the holders of the depositary shares), issue additional shares of the Series B Preferred Stock; provided, that any such additional shares of Series B Preferred Stock are not treated as “disqualified preferred stock” within the meaning of Section 1059(f)(2) of the Internal Revenue Code (or any successor provision) and such additional shares of Series B Preferred Stock are otherwise treated as fungible with our already outstanding Series B Preferred Stock as represented by the depositary shares for U.S. federal income tax purposes. The additional shares of Series B Preferred Stock would form a single series with our already outstanding Series B Preferred Stock represented by the depositary shares. We have the authority to issue fractional shares of Series B Preferred Stock.

The Series B Preferred Stock is fully paid and non-assessable. Holders of the Series B Preferred Stock do not have preemptive or similar rights to acquire any of our capital stock. Holders do not have the right to convert Series B Preferred Stock into, or exchange Series B Preferred Stock for, shares of any other class or series of shares or other securities of ours. The Series B Preferred Stock has no stated maturity and is not subject to any sinking fund, retirement fund or purchase fund or other obligation of the Company to redeem or purchase the Series B Preferred Stock represented by the depositary shares.

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Ranking

The Series B Preferred Stock rank senior to our common stock and any other junior stock (as defined herein) with respect to the payment of dividends and distributions of assets upon liquidation, dissolution or winding-up, equally with our Series A Preferred Stock and Series C Preferred Stock and each other series of our preferred stock that we may issue the terms of which provide that they rank equally with the Series B Preferred Stock with respect to the payment of dividends and distributions of assets upon liquidation, dissolution or winding-up and junior to each other series of our preferred stock that we may issue in the future the terms of which provide that they rank senior to the Series B Preferred Stock with respect to the payment of dividends and distributions of assets upon our liquidation, dissolution or winding-up.

Dividends

Dividends on the Series B Preferred Stock are not mandatory. Holders of Series B Preferred Stock are entitled to receive dividends only when, as and if declared by the Board of Directors of the Company or a duly authorized committee of the Board, out of lawfully available funds for the payment of dividends, non-cumulative cash dividends from the original issue date, quarterly on the 15th day of January, April, July and October of each year, commencing on July 15, 2015. These dividends will accrue with respect to a particular dividend period on the liquidation preference amount of $1,000 per share at an annual rate of 7.50% from and including the original issue date or the most recent dividend payment date. In the event that we issue additional Series B Preferred Stock after the original issue date, dividends on such additional shares may accrue from the original issue date or the most recent dividend payment date at the time such additional shares are issued.

Dividends, if so declared, are payable to holders of record of the Series B Preferred Stock as represented by the depositary shares as they appear on our books on the applicable record date, which shall be January 1, April 1, July 1 and October 1, as applicable, immediately preceding the applicable dividend payment date or such other record date fixed by our Board of Directors (or a duly authorized committee of the Board) that is not more than 60 nor less than 10 days prior to such dividend payment date (each, a “dividend record date”). These dividend record dates will apply regardless of whether a particular dividend record date is a business day.

A dividend period is the period from and including a dividend payment date to but excluding the next dividend payment date. Dividends payable on the Series B Preferred Stock are computed on the basis of a 360-day year consisting of twelve 30-day months. If any date on which dividends would otherwise be payable is not a business day, then the dividend payment date will be the next succeeding business day with the same force and effect as if made on the original dividend payment date, and no additional dividends shall accrue on the amount so payable from such date to such next succeeding business day.

Dividends on the Series B Preferred Stock are not cumulative. Accordingly, if our Board of Directors, or a duly authorized committee of the Board, does not declare a dividend on the Series B Preferred Stock payable in respect of any dividend period before the related dividend payment date, such dividend will not accumulate and will not be payable and we will have no obligation to pay a dividend for that dividend period on the dividend payment date or at any future time or to pay interest with respect to such dividends, whether or not dividends are declared for any future dividend period on the Series B Preferred Stock or any other parity stock we may issue in the future.

So long as any Series B Preferred Stock remains outstanding for any dividend period, unless the full dividends for the latest completed dividend period on all outstanding Series B Preferred Stock and parity stock (as defined below) have been declared and paid (or declared and a sum sufficient for the payment thereof has been set aside):

•no dividend shall be paid or declared on our common stock, or any other junior stock (other than a dividend payable solely in common stock or other junior stock);

•no common stock or other junior stock shall be purchased, redeemed or otherwise acquired for consideration by us, directly or indirectly (other than (1) as a result of a reclassification of junior stock for or into other junior stock, or the exchange or conversion of one share of junior stock for or into another

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share of junior stock, or (2) through the use of the proceeds of a substantially contemporaneous sale of junior stock or (3) in connection with grants or settlements of grants (including any “cashless exercise” or “net share settlement”) pursuant to any equity compensation plan adopted by us)) nor shall any monies be paid to or made available for a sinking fund for the redemption of such stock; and

•no shares of Series B Preferred Stock or parity stock shall be repurchased, redeemed or otherwise acquired for consideration by us other than pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series B Preferred Stock and such parity stock except by conversion into or exchange for junior stock.

As used in this Exhibit 4.1, “junior stock” means any class or series of our capital stock that ranks junior to the Series B Preferred Stock either as to the payment of dividends or as to the distribution of assets upon our liquidation, dissolution or winding-up. As of the date of this Exhibit 4.1, junior stock consists solely of our common stock.

As used in this Exhibit 4.1, “parity stock” means any class or series of our capital stock that ranks equally with the Series B Preferred Stock with respect to the payment of dividends and in the distribution of assets on our liquidation, dissolution or winding-up. As of the date of this Exhibit 4.1, parity stock consists of our Series A Preferred Stock and Series C Preferred Stock.

When dividends are not paid (or duly provided for) in full on any dividend payment date (or, in the case of parity stock having dividend payment dates different from the dividend payment dates pertaining to the Series B Preferred Stock as represented by the depositary shares, on a dividend payment date falling within the related dividend period for the Series B Preferred Stock) upon the Series B Preferred Stock and any parity stock, all dividends declared by our Board of Directors or a duly authorized committee of the Board upon the Series B Preferred Stock and all such parity stock and payable on such dividend payment date (or, in the case of parity stock having dividend payment dates different from the dividend payment dates pertaining to the Series B Preferred Stock, on a dividend payment date falling within the related dividend period for the Series B Preferred Stock) shall be declared by the Board or such committee pro rata based on the liquidation preference of Series B Preferred Stock and all such parity stock so that the respective amounts of such dividends shall bear the same ratio to each other as all declared dividends per share of Series B Preferred Stock and all parity stock payable on such dividend payment date (or, in the case of parity stock having dividend payment dates different from the dividend payment dates pertaining to the Series B Preferred Stock, on a dividend payment date falling within the related dividend period for the Series B Preferred Stock) bear to each other.

Our ability to pay dividends on the Series B Preferred Stock may be limited by the terms of our agreements governing our existing and future indebtedness and by the provisions of other existing and future agreements.

In addition, we are a holding company and conduct our business operations through our various subsidiaries. Our principal sources of funds are dividends and other payments from our insurance subsidiaries, income from our investment portfolio and funds that may be raised from time to time in the capital markets. We will be largely dependent on amounts from our insurance subsidiaries to pay principal and interest on any indebtedness that we may incur, to pay holding company operating expenses, to make capital investments in our other subsidiaries and to pay dividends on our capital stock, including the Series B Preferred Stock.

Our insurance subsidiaries are subject to statutory and regulatory restrictions imposed on insurance companies by their states of domicile, which limit the amount of cash dividends or distributions that they may pay to us unless special permission is received from the insurance regulator of the relevant domiciliary state. In general, the maximum amount of dividends that the insurance subsidiaries may pay in any 12-month period without regulatory approval is the greater of adjusted statutory net income or 10% of statutory policyholders’ surplus as of the preceding calendar year end. Adjusted statutory net income is generally defined for this purpose to be statutory net income, net of realized capital gains, for the calendar year preceding the date of the dividend. In addition, other states may limit or restrict our insurance subsidiaries’ ability to pay stockholder dividends generally or as a condition to issuance of a certificate of authority.

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Liquidation Rights

Upon our voluntary or involuntary liquidation, dissolution or winding-up, holders of the Series B Preferred Stock and any parity stock are entitled to receive out of our assets available for distribution to stockholders, after satisfaction of liabilities to creditors, if any, but before any distribution of assets is made to holders of our common stock or any of our other junior stock, a liquidating distribution in the amount equal to the liquidation preference of $1,000 per share of Series B Preferred Stock or the amount of the liquidation preference of such parity stock, as applicable, plus any declared and unpaid dividends. Holders of the Series B Preferred Stock will not be entitled to any other amounts from us after they have received their full liquidation preference plus any declared and unpaid dividends.

In any such distribution, if our assets are not sufficient to pay the liquidation distributions in full to all holders of the Series B Preferred Stock and all holders of any parity stock, the amounts paid to the holders of Series B Preferred Stock and to the holders of any parity stock will be paid pro rata in accordance with the respective aggregate liquidation distributions of those holders. In any such distribution, the liquidation distribution to any holder of preferred stock means the amount payable to such holder in such distribution, including liquidation preference and any declared but unpaid dividends (and any unpaid, accrued cumulative dividends in the case of any holder of shares on which dividends accrue on a cumulative basis). If the liquidation distributions have been paid in full to all holders of shares of the Series B Preferred Stock and any holders of shares of parity stock and shares ranking senior to the Series B Preferred Stock with respect to the distribution of assets upon liquidation, dissolution or winding-up, the holders of our other classes of capital stock will be entitled to receive all of our remaining assets according to their respective rights and preferences.

For purposes of this section, a consolidation or merger involving the Company with any other entity, including the consolidation or merger in which the holders of Series B Preferred Stock receive cash, securities or other property for their shares, or the sale or transfer of all or substantially all of the property and assets of the Company for cash, securities or other property, will not be deemed to constitute a liquidation, dissolution or winding-up.

Redemption

The Series B Preferred Stock represented by the depositary shares is not subject to any mandatory redemption, sinking fund, retirement fund, purchase fund or other similar provisions.

The Series B Preferred Stock is not redeemable prior to April 15, 2020. On and after that date, the Series B Preferred Stock will be redeemable at our option, in whole or in part, upon not less than 30 days nor more than 60 days notice, at a redemption price equal to $1,000 per share plus declared and unpaid dividends on the shares of Series B Preferred Stock called for redemption for prior dividend periods, if any, plus accrued but unpaid dividends (whether or not declared) thereon for the then-current dividend period, to, but excluding, the date of redemption, without accumulation of any other undeclared dividends. Holders of the Series B Preferred Stock and, in turn, the holders of the depositary shares have no right to require the redemption of the Series B Preferred Stock.

The redemption price for any shares of Series B Preferred Stock shall be payable on the redemption date to the holders of such shares against book entry transfer or surrender of the certificate(s) evidencing such shares to us or our agent. Any declared but unpaid dividends payable on a redemption date that occurs subsequent to the dividend record date for a dividend period shall not be paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares on such dividend record date relating to the dividend payment date provided in “-Dividends” above.

If shares of the Series B Preferred Stock are to be redeemed, the notice of redemption shall be given by first class mail to the holders of record of the Series B Preferred Stock to be redeemed, mailed not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided that, if the Series B Preferred Stock is held in book-entry form through The Depository Trust Company, or “DTC,” we may give such notice in any manner permitted by DTC). Each notice of redemption will include a statement setting forth:

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•the redemption date;

•the number of shares of Series B Preferred Stock to be redeemed and, if less than all the shares of Series B Preferred Stock held by such holder are to be redeemed, the number of such shares of Series B Preferred Stock to be redeemed from such holder;

•the redemption price; and

•that the shares should be delivered via book entry transfer or the place or places where holders may surrender certificates evidencing the Series B Preferred Stock for payment of the redemption price.

•

If notice of redemption of any shares of Series B Preferred Stock has been given and if the funds necessary for such redemption and to pay declared and unpaid dividends have been set aside by us for the benefit of the holders of such shares of Series B Preferred Stock so called for redemption, then, from and after the redemption date, no further dividends will be declared on such shares of Series B Preferred Stock as represented by the depositary shares, such shares of Series B Preferred Stock shall no longer be deemed outstanding and all rights of the holders of such shares of Series B Preferred Stock will terminate, except the right to receive the redemption price, without interest.

In case of any redemption of only part of the shares of Series B Preferred Stock at the time outstanding, the shares of Series B Preferred Stock to be redeemed shall be selected either pro rata or by lot.

Our ability to redeem the Series B Preferred Stock as described above may be limited by the terms of our agreements governing our existing and future indebtedness and by the provisions of other existing and future agreements.

Voting Rights

Except as provided below or as otherwise may be required by applicable law, the holders of the Series B Preferred Stock and, in turn, the holders of the depositary shares representing the Series B Preferred Stock have no voting rights.

Whenever dividends on any Series B Preferred Stock shall not have been declared and paid for the equivalent of six or more dividend periods, whether or not for consecutive dividend periods (a “nonpayment event”), the holders of the Series B Preferred Stock, voting together as a single class with holders of any and all other series of voting preferred stock (as defined below) then outstanding, will be entitled to vote for the election of a total of two additional members of the Board of Directors of the Company (the “preferred stock directors”), provided that the election of any such directors shall not cause us to violate the corporate governance requirement of any exchange on which our securities may be listed or quoted that listed or quoted companies must have a majority of independent directors. The number of preferred stock directors will not be more than two at any time. In the event that the holders of the Series B Preferred Stock, and any such other holders of voting preferred stock, shall be entitled to vote for the election of the preferred stock directors following a nonpayment event, the number of directors on the Company’s Board of Directors shall automatically be increased by two and such directors shall be initially elected following such nonpayment event at a special or annual meeting called at the request of the holders of record of at least 20% of the aggregate voting power of the Series B Preferred Stock and any other such series of voting preferred stock then outstanding (provided that if such request is received less than 90 days before the date fixed for an annual or special meeting of the stockholders of the Company, then such election shall not be held at such annual or special meeting of stockholders but at a subsequent annual or special meeting), and at each subsequent annual meeting of stockholders of the Company, so long as the rights related to a nonpayment event remain in effect.

As used in this Exhibit 4.1, “voting preferred stock” means, with regard to any election or removal of a preferred stock director or any other matter as to which the holders of Series B Preferred Stock are entitled to vote, any other class or series of our parity stock upon which like voting rights have been conferred and are exercisable.

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If and when dividends, for at least four consecutive dividend periods following a nonpayment event have been paid in full (or declared and a sum sufficient for such payment shall have been set aside), the holders of the Series B Preferred Stock shall be divested of the foregoing voting rights (subject to revesting in the event of each subsequent nonpayment event) and, if such voting rights for all other holders of voting preferred stock have terminated, the term of office of each preferred stock director so elected shall terminate and the number of directors on the Board of Directors of the Company shall automatically decrease by two. In determining whether dividends have been paid for four dividend periods following a nonpayment event, we may take account of any dividend we elect to pay for such a dividend period after the regular dividend payment date for that period has passed.

Any preferred stock director may be removed at any time without cause by the holders of record of a majority of the aggregate voting power, as determined under the Certificate of Incorporation, of the Series B Preferred Stock and any other shares of voting preferred stock then outstanding (voting together as a single class) when they have the voting rights described above. So long as a nonpayment event shall continue, any vacancy in the office of a preferred stock director (other than prior to the initial election after a nonpayment event) may be filled by the written consent of the preferred stock director remaining in office, or if none remains in office, by a vote of the holders of record of a majority of the outstanding shares of Series B Preferred Stock and any other shares of voting preferred stock then outstanding (voting together as a single class) when they have the voting rights described above. Any vote of stockholders to remove, or to fill a vacancy in the office of, a preferred stock director may be taken at a special or annual meeting of such stockholders, called as provided above for an initial election of preferred stock director after a nonpayment event (provided that if such request is received less than 90 days before the date fixed for an annual or special meeting of the stockholders of the Company, then such election shall not be held at such annual or special meeting of stockholders but at a subsequent annual or special meeting). The preferred stock directors shall each be entitled to one vote per director on any matter. Each preferred stock director elected at any special or annual meeting of stockholders or by written consent of the other preferred stock director shall hold office until the next annual meeting of the stockholders of the Company if such office shall not have previously terminated as above provided.

So long as any shares of Series B Preferred Stock remain outstanding and subject in all cases to any other vote of stockholders required under applicable law or the Certificate of Incorporation:

•we will not, without the affirmative vote or consent of the holders of at least two-thirds of the voting power of Series B Preferred Stock and all other series of voting preferred stock entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing without a meeting or at a meeting, authorize or create, or increase the authorized amount of, any specific class or series of capital stock ranking senior to the Series B Preferred Stock with respect to the payment of dividends or the distribution of our assets upon our liquidation, dissolution or winding up;

•we will not, without the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of Series B Preferred Stock given in person or by proxy, either in writing without a meeting or at a meeting:

•amend, alter or repeal the provisions of the Certificate of Incorporation or the Certificate of Designations so as to adversely affect the rights, preferences, privileges and voting powers of the Series B Preferred Stock; or

•consummate a binding share exchange or reclassification involving the Series B Preferred Stock or a merger or consolidation of us with another entity, unless in each case (i) shares of Series B Preferred Stock remain outstanding or, in the case of any such merger or consolidation with respect to which we are not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, in each case, that is an entity organized and existing under the laws of the United States of America, any state thereof or the District of Columbia, and (ii) such shares of Series B Preferred Stock remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers and limitations and restrictions, taken as a whole, as are not less favorable to the holders thereof than the rights, preferences, privileges and voting powers and limitations

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and restrictions of the Series B Preferred Stock, taken as a whole, provided, however, that (1) any increase in the amount of our authorized but unissued shares of preferred stock, (2) any increase in the authorized or issued shares of Series B Preferred Stock, and (3) the creation and issuance, or an increase in the authorized or issued amount, of other series of preferred stock ranking equally with or junior to the Series B Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/ or the distribution of assets upon our liquidation, dissolution or winding up, will not be deemed to adversely affect the rights, preferences, privileges or voting powers of the Series B Preferred Stock.

Without the consent of the holders of the Series B Preferred Stock so long as such action does not adversely affect the rights, preferences, privileges and voting powers and limitations and restrictions of the Series B Preferred Stock, the Board of Directors of the Company may, subject to any vote of our stockholders required by applicable law or the Certificate of Incorporation, by resolution, amend, alter, supplement or repeal any terms of the Series B Preferred Stock:

•to cure any ambiguity, or to cure, correct or supplement any provision contained in the Certificate of Designations that may be defective or inconsistent; or

•to make any provision with respect to matters or questions arising with respect to the Series B Preferred Stock that is not inconsistent with the provisions of the Certificate of Designations;

provided that any such amendment, alteration, supplement or repeal of any terms of the Series B Preferred Stock effected in order to conform the terms thereof to the description of the terms of the Series B Preferred Stock set forth under “Description of the Series B Preferred Stock” in this Exhibit 4.1 shall be deemed not to adversely affect the rights, preferences, privileges and voting powers of the Series B Preferred Stock.

On each matter on which holders of Series B Preferred Stock are entitled to vote, each share of Series B Preferred Stock will be entitled to one vote, and when shares of any other class or series of our preferred stock have the right to vote with the Series B Preferred Stock as a single class on any matter, the Series B Preferred Stock and the shares of each such other class or series will have one vote for each $25.00 of liquidation preference (excluding accrued and unpaid dividends)(equivalent to one per depositary share).

The foregoing voting provisions will not apply with respect to the Series B Preferred Stock if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding Series B Preferred Stock shall have been redeemed or called for redemption upon proper notice and sufficient funds shall have been set aside by us for the benefit of the holders of Series B Preferred Stock to effect such redemption.

Conversion

Holders do not have the right to convert Series B Preferred Stock into, or exchange Series B Preferred Stock for, any other securities or property of the Company.

Listing of the Series B Preferred Stock

The Series B Preferred Stock are not listed on any exchange except as represented by the depositary shares.

DESCRIPTION OF THE DEPOSITARY SHARES REPRESENTING INTERESTS IN THE

SERIES B PREFERRED STOCK

The following description set forth below of our depositary shares representing fractional interests in the Series B Preferred Stock is only a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to the terms and provisions of the Series B Deposit Agreement (as defined below), the form of depositary receipts, which contain the terms and provisions of the depositary shares, our Certificate of Incorporation

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and our Certificate of Designations for our 7.50% Non-Cumulative Preferred Stock, Series B, each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part.

General

Each depositary share represents a 1/40th interest in a share of the Series B Preferred Stock and is evidenced by a depositary receipt. We deposited the underlying shares of the Series B Preferred Stock with the depositary pursuant to a deposit agreement among us, American Stock Transfer & Trust Company, LLC, acting as depositary, and the holders from time to time of the depositary receipts (the “Series B Deposit Agreement”). Subject to the terms of the Series B Deposit Agreement, each owner of a depositary receipt is entitled, in proportion to the fractional interest of a share of Series B Preferred Stock represented by the depositary shares evidenced by that depositary receipt, to all the rights and preferences of Series B Preferred Stock represented by those depositary shares (including any dividend, liquidation, redemption and voting rights).

The depositary shares are evidenced by depositary receipts issued pursuant to the Series B Deposit Agreement. Immediately following the issuance and delivery of the Series B Preferred Stock by us to the depositary, we caused the depositary to issue, on our behalf, the depositary receipts.

Dividends and Other Distributions

Any dividend or other distribution (including upon our voluntary or involuntary liquidation, dissolution or winding-up) paid in respect of a depositary share will be in an amount equal to 1/40th of the dividend declared or distribution payable, as the case may be, on the underlying share of the Series B Preferred Stock. The depositary will distribute all cash dividends and other cash distributions received on the Series B Preferred Stock to the holders of record of the depositary receipts in proportion to the number of depositary shares held by each holder on the relevant record date. In the event of a distribution other than in cash, the depositary will distribute property received by it to the holders of record of the depositary receipts in proportion to the number of depositary shares held by each holder, unless the depositary determines that this distribution is not feasible, in which case the depositary may, with our approval, adopt a method of distribution that it deems practicable, including the sale of the property and distribution of the net proceeds of that sale to the holders of the depositary receipts.

Record dates for the payment of dividends and other matters relating to the depositary shares will be the same as the corresponding record dates for the Series B Preferred Stock represented by the depositary shares.

The amount paid as dividends or otherwise distributable by the depositary with respect to the depositary shares or the underlying Series B Preferred Stock will be reduced by any amounts required to be withheld by us or the depositary on account of taxes or other governmental charges. The depositary may refuse to make any payment or distribution, or any transfer, exchange or withdrawal of any depositary shares or the shares of the Series B Preferred Stock until such taxes or other governmental charges are paid.

Withdrawal of Series B Preferred Stock

Unless the related depositary shares have been previously called for redemption, a holder of depositary shares may surrender his or her depositary receipts at the corporate trust office of the depositary, pay any taxes, charges and fees provided for in the Series B Deposit Agreement and comply with any other requirements of the Series B Deposit Agreement for the number of shares of Series B Preferred Stock and any money or other property represented by such holder’s depositary receipts. A holder of depositary shares who withdraws shares of Series B Preferred Stock will be entitled to receive whole shares of Series B Preferred Stock on the basis set forth herein; partial shares of Series B Preferred Stock will not be issued.

However, holders of whole shares of Series B Preferred Stock will not be entitled to deposit those shares under the Series B Deposit Agreement or to receive depositary receipts for those shares after the withdrawal. If the depositary shares surrendered by the holder in connection with the withdrawal exceed the number of depositary

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shares that represent the number of whole shares of Series B Preferred Stock to be withdrawn, the depositary will deliver to the holder at the same time a new depositary receipt evidencing the excess number of depositary shares.

Redemption

If the Series B Preferred Stock underlying the depositary shares is redeemed, in whole or in part, a corresponding number of depositary shares will be redeemed with the proceeds received by the depositary from the redemption of the Series B Preferred Stock held by the depositary. The redemption price per depositary share will be equal to 1/40th of the applicable redemption price per share payable in respect of such Series B Preferred Stock.

Whenever we redeem shares of Series B Preferred Stock held by the depositary, the depositary will redeem, as of the same redemption date, the number of depositary shares representing shares of Series B Preferred Stock so redeemed. If fewer than all of the outstanding depositary shares are redeemed, the depositary will select the depositary shares to be redeemed pro rata or by lot. The depositary will mail notice of redemption to holders of the depositary receipts not less than 30 and not more than 60 days prior to the date fixed for redemption of the Series B Preferred Stock represented by the depositary shares and the related depositary shares.

Voting Rights

Because each depositary share represents a 1/40th interest in a share of the Series B Preferred Stock, holders of depositary receipts will be entitled to 1/40th of a vote per share of the Series B Preferred Stock under those limited circumstances in which holders of the Series B Preferred Stock represented by the depositary shares are entitled to vote. Holders of the depositary shares representing the Series B Preferred Stock do not have any voting rights, except for the limited voting rights described under “Description of the Series B Preferred Stock-Voting Rights.”

When the depositary receives notice of any meeting at which the holders of the Series B Preferred Stock are entitled to vote, the depositary will mail (or otherwise transmit by an authorized method) the information contained in the notice to the record holders of the depositary shares relating to the Series B Preferred Stock. Each record holder of the depositary shares on the record date, which will be the same date as the record date for the Series B Preferred Stock, may instruct the depositary to vote the number of the Series B Preferred Stock votes represented by the holder’s depositary shares. To the extent possible, the depositary will vote the number of the Series B Preferred Stock votes represented by depositary shares in accordance with the instructions it receives.

We will agree to take all reasonable actions that the depositary determines are necessary to enable the depositary to vote as instructed. If the depositary does not receive specific instructions from the holders of any depositary shares representing the Series B Preferred Stock, it will vote all depositary shares held by it proportionately with instructions received.

Conversion

Holders of depositary receipts do not have the right to convert depositary shares representing the Series B Preferred Stock into, or exchange depositary shares representing the Series B Preferred Stock for, any other securities or property of the Company.

Amendment and Termination of the Series B Deposit Agreement

The form of depositary receipt evidencing the depositary shares and any provision of the Series B Deposit Agreement may be amended by agreement between us and the depositary. However, any amendment that materially and adversely alters the rights of the existing holders of depositary shares will not be effective unless the amendment has been approved by the record holders of at least a majority of the depositary shares then outstanding. Either we or the depositary may terminate the Series B Deposit Agreement if there has been a final distribution in respect of the Series B Preferred Stock in connection with our liquidation, dissolution, or winding up.

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Charges of Depositary

We will pay all transfer and other taxes, assessments, and governmental charges arising solely from the existence of the depositary arrangements, and we paid the fees of the depositary in connection with the initial deposit of the Series B Preferred Stock represented by the depositary shares. Holders of depositary receipts will pay transfer and other taxes, assessments, and governmental charges and any other charges as are expressly provided in the Series B Deposit Agreement to be for their accounts. The depositary may refuse to effect any transfer of a depositary receipt or any withdrawals of Series B Preferred Stock evidenced by a depositary receipt until all taxes, assessments, and governmental charges with respect to the depositary receipt or Series B Preferred Stock are paid by their holders.

Resignation and Removal of Depositary

The depositary may resign at any time by delivering to us notice of its election to do so, and we may remove the depositary at any time. Any resignation or removal will take effect only upon the appointment of a successor depositary and the successor depositary’s acceptance of the appointment. Any successor depositary must be a U.S. bank or trust company.

Miscellaneous

The depositary will forward to the holders of depositary shares all of our reports and communications which are delivered to the depositary and which we are required to furnish to the holders of our Series B Preferred Stock.

Neither we nor the depositary will be liable if we are prevented or delayed by law or any circumstance beyond our control in performing our obligations under the Series B Deposit Agreement. All of our obligations as well as the depositary’s obligations under the Series B Deposit Agreement are limited to performance in good faith of our respective duties set forth in the Series B Deposit Agreement, and neither of us will be obligated to prosecute or defend any legal proceeding relating to any depositary shares or Series B Preferred Stock unless provided with satisfactory indemnity. We, and the depository, may rely upon written advice of counsel or accountants, or information provided by persons presenting Series B Preferred Stock for deposit, holders of depositary shares, or other persons believed to be competent and on documents believed to be genuine.

Listing of the Depositary Shares

The depositary shares representing the Series B Preferred Stock are listed on the Nasdaq Global Market under the symbol “NGHCO.”

Transfer Agent, Registrar, Dividend Disbursing Agent and Redemption Agent

American Stock Transfer & Trust Company, LLC is the transfer agent, registrar, dividend disbursing agent and redemption agent for the depositary shares representing the Series B Preferred Stock.

Book-Entry; Delivery and Form

The depositary shares are represented by one or more global securities that are deposited with and registered in the name of DTC or its nominee. The global securities are issued to DTC, the depository for the depositary shares, who keeps a computerized record of its participants whose clients have purchased the depositary shares. Each participant will then keep a record of its clients. Unless exchanged in whole or in part for a certificated security, a global security may not be transferred. However, DTC, its nominees, and their successors may transfer a global security as a whole to one another. Beneficial interests in the global securities will be shown on, and transfers of the global securities will be made only through, records maintained by DTC and its participants.

Purchases of depositary shares through the DTC system must be made by or through a direct participant, who receives credit for the depositary shares on DTC’s records. The beneficial owner’s ownership interest is only

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recorded in the direct (or indirect) participants’ records. DTC’s records only show the identity of the direct participants and the amount of the depositary shares held by or through them. The beneficial owner does not receive a written confirmation of the purchase or sale or any periodic account statement directly from DTC. The beneficial owner receives these from its direct (or indirect) participant. Thus, the direct (or indirect) participants are responsible for keeping accurate account of the holdings of their customers.

We wire dividend payments to DTC’s nominee and we treat DTC’s nominee as the owner of the global securities for all purposes. Accordingly, we have no direct responsibility or liability to pay amounts due on the global securities to any beneficial owner in the global securities.

Any redemption notices will be sent by us directly to DTC, who will in turn inform the direct participants, who will then contact the beneficial holders.

It is DTC’s current practice, upon receipt of any payment of dividends or liquidation amount, to credit direct participants’ accounts on the payment date based on their holdings of beneficial interests in the global securities as shown on DTC’s records. In addition, it is DTC’s current practice to assign any consenting or voting rights to direct participants whose accounts are credited with preferred securities on a record date, by using an omnibus proxy. Payments by participants to owners of beneficial interests in the global securities, and voting by participants, will be based on the customary practices between the participants and owners of beneficial interests, as is the case with the Series B Preferred Stock held for the account of customers registered in “street name.” However, payments will be the responsibility of the participants and not of DTC or us.

Depositary Shares represented by global securities will be exchangeable for certificated securities with the same terms in authorized denominations only if:

•DTC is unwilling or unable to continue as depositary or if DTC ceases to be a clearing agency registered under applicable law and a successor depositary is not appointed by us within 90 days; or

•we determine not to require all of the depositary shares to be represented by global securities.

If the book-entry-only system is discontinued, the transfer agent will keep the registration books for the depositary shares at its corporate office.

DESCRIPTION OF THE SERIES C PREFERRED STOCK

The following description set forth below of our 7.50% Non-Cumulative Preferred Stock, Series C (“Series C Preferred Stock”) is only a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our Certificate of Incorporation and our Certificate of Designations for our 7.50% Non-Cumulative Preferred Stock, Series C, each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part. You should refer to such certificate for specific information on the Series C Preferred Stock.

General

The Certificate of Designations sets forth the specific rights, preferences, limitations and other terms of the Series C Preferred Stock as represented by the depositary shares. The Series C Preferred Stock is a single series of authorized preferred stock consisting of 200,000 shares.

The Certificate of Incorporation permits us to authorize the issuance of up to 10,000,000 shares of preferred stock, in one or more series without stockholder action. The Series C Preferred Stock constitutes a series of our authorized preferred stock. We may from time to time, without notice to or the consent of holders of the Series C Preferred Stock (or the consent of the holders of the depositary shares), issue shares of preferred stock that rank

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equally with or junior to the Series C Preferred Stock. We may also from time to time, without notice to or consent of holders of the Series C Preferred Stock (or the consent of the holders of the depositary shares), issue additional shares of the Series C Preferred Stock; provided, that any such additional shares of Series C Preferred Stock are not treated as “disqualified preferred stock” within the meaning of Section 1059(f)(2) of the Internal Revenue Code (or any successor provision) and such additional shares of Series C Preferred Stock are otherwise treated as fungible with the already outstanding Series C Preferred Stock as represented by the depositary shares for U.S. federal income tax purposes. The additional shares of Series C Preferred Stock would form a single series with the already outstanding Series C Preferred Stock represented by the depositary shares. We have the authority to issue fractional shares of Series C Preferred Stock.

The Series C Preferred Stock is fully paid and non-assessable. Holders of the Series C Preferred Stock do not have preemptive or similar rights to acquire any of our capital stock. Holders do not have the right to convert Series C Preferred Stock into, or exchange Series C Preferred Stock for, shares of any other class or series of shares or other securities of ours. The Series C Preferred Stock has no stated maturity and is not subject to any sinking fund, retirement fund or purchase fund or other obligation of the Company to redeem or purchase the Series C Preferred Stock as represented by the depositary shares.

Ranking

The Series C Preferred Stock rank senior to our common stock and any other junior stock (as defined herein) with respect to the payment of dividends and distributions of assets upon liquidation, dissolution or winding-up, equally with our Series A Preferred Stock, Series B Preferred Stock and each other series of our preferred stock that we may issue the terms of which provide that they rank equally with the Series C Preferred Stock with respect to the payment of dividends and distributions of assets upon liquidation, dissolution or winding-up and junior to each other series of our preferred stock that we may issue in the future the terms of which provide that they rank senior to the Series C Preferred Stock with respect to the payment of dividends and distributions of assets upon our liquidation, dissolution or winding-up.

Dividends

Dividends on the Series C Preferred Stock are not mandatory. Holders of Series C Preferred Stock are entitled to receive only when, as and if declared by the Board of Directors of the Company or a duly authorized committee of the Board, out of lawfully available funds for the payment of dividends, non-cumulative cash dividends from the original issue date, quarterly on the 15th day of January, April, July and October of each year, commencing on October 15, 2016. These dividends will accrue with respect to a particular dividend period on the liquidation preference amount of $1,000 per share at an annual rate of 7.50% from and including the original issue date or the most recent dividend payment date. In the event that we issue additional Series C Preferred Stock after the original issue date, dividends on such additional shares may accrue from the original issue date or the most recent dividend payment date at the time such additional shares are issued.

Dividends, if so declared, are payable to holders of record of the Series C Preferred Stock as represented by the depositary shares as they appear on our books on the applicable record date, which shall be January 1, April 1, July 1 and October 1, as applicable, immediately preceding the applicable dividend payment date or such other record date fixed by our Board of Directors (or a duly authorized committee of the Board) that is not more than 60 nor less than 10 days prior to such dividend payment date (each, a “dividend record date”). These dividend record dates will apply regardless of whether a particular dividend record date is a business day.

A dividend period is the period from and including a dividend payment date to but excluding the next dividend payment date. Dividends payable on the Series C Preferred Stock will be computed on the basis of a 360-day year consisting of twelve 30-day months. If any date on which dividends would otherwise be payable is not a business day, then the dividend payment date will be the next succeeding business day with the same force and effect as if made on the original dividend payment date, and no additional dividends shall accrue on the amount so payable from such date to such next succeeding business day.

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Dividends on the Series C Preferred Stock are not cumulative. Accordingly, if our Board of Directors, or a duly authorized committee of the Board, does not declare a dividend on the Series C Preferred Stock payable in respect of any dividend period before the related dividend payment date, such dividend will not accumulate and will not be payable and we will have no obligation to pay a dividend for that dividend period on the dividend payment date or at any future time or to pay interest with respect to such dividends, whether or not dividends are declared for any future dividend period on the Series C Preferred Stock or any other parity stock we may issue in the future.

So long as any Series C Preferred Stock remains outstanding for any dividend period, unless the full dividends for the latest completed dividend period on all outstanding Series C Preferred Stock and parity stock (as defined below) have been declared and paid (or declared and a sum sufficient for the payment thereof has been set aside):

•no dividend shall be paid or declared on our common stock, or any other junior stock (other than a dividend payable solely in common stock or other junior stock);

•no common stock or other junior stock shall be purchased, redeemed or otherwise acquired for consideration by us, directly or indirectly (other than (1) as a result of a reclassification of junior stock for or into other junior stock, or the exchange or conversion of one share of junior stock for or into another share of junior stock, or (2) through the use of the proceeds of a substantially contemporaneous sale of junior stock or (3) in connection with grants or settlements of grants (including any “cashless exercise” or “net share settlement”) pursuant to any equity compensation plan adopted by us) nor shall any monies be paid to or made available for a sinking fund for the redemption of such stock; and

•no shares of Series C Preferred Stock or parity stock shall be repurchased, redeemed or otherwise acquired for consideration by us other than pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series C Preferred Stock and such parity stock except by conversion into or exchange for junior stock.

As used in this Exhibit 4.1, “junior stock” means any class or series of our capital stock that ranks junior to the Series C Preferred Stock either as to the payment of dividends or as to the distribution of assets upon our liquidation, dissolution or winding-up. As of the date of this Exhibit 4.1, junior stock consists solely of our common stock.

As used in this Exhibit 4.1, “parity stock” means any class or series of our capital stock that ranks equally with the Series C Preferred Stock with respect to the payment of dividends and in the distribution of assets on our liquidation, dissolution or winding-up. As of the date of this Exhibit 4.1, parity stock consists of our Series A Preferred Stock and Series B Preferred Stock.

When dividends are not paid (or duly provided for) in full on any dividend payment date (or, in the case of parity stock having dividend payment dates different from the dividend payment dates pertaining to the Series C Preferred Stock as represented by the depositary shares, on a dividend payment date falling within the related dividend period for the Series C Preferred Stock) upon the Series C Preferred Stock and any parity stock, all dividends declared by our Board of Directors or a duly authorized committee of the Board upon the Series C Preferred Stock and all such parity stock and payable on such dividend payment date (or, in the case of parity stock having dividend payment dates different from the dividend payment dates pertaining to the Series C Preferred Stock, on a dividend payment date falling within the related dividend period for the Series C Preferred Stock) shall be declared by the Board or such committee pro rata based on the liquidation preference of Series C Preferred Stock and all such parity stock so that the respective amounts of such dividends shall bear the same ratio to each other as all declared dividends per share of Series C Preferred Stock and all parity stock payable on such dividend payment date (or, in the case of parity stock having dividend payment dates different from the dividend payment dates pertaining to the Series C Preferred Stock, on a dividend payment date falling within the related dividend period for the Series C Preferred Stock) bear to each other.

Our ability to pay dividends on the Series C Preferred Stock may be limited by the terms of our agreements governing our existing and future indebtedness and by the provisions of other existing and future agreements.

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In addition, we are a holding company and conduct our business operations through our various subsidiaries. Our principal sources of funds are dividends and other payments from our insurance subsidiaries, income from our investment portfolio and funds that may be raised from time to time in the capital markets. We will be largely dependent on amounts from our insurance subsidiaries to pay principal and interest on any indebtedness that we may incur, to pay holding company operating expenses, to make capital investments in our other subsidiaries and to pay dividends on our capital stock, including the Series C Preferred Stock.

Our insurance subsidiaries are subject to statutory and regulatory restrictions imposed on insurance companies by their states of domicile, which limit the amount of cash dividends or distributions that they may pay to us unless special permission is received from the insurance regulator of the relevant domiciliary state. In general, the maximum amount of dividends that the insurance subsidiaries may pay in any 12-month period without regulatory approval is the greater of adjusted statutory net income or 10% of statutory policyholders’ surplus as of the preceding calendar year end. Adjusted statutory net income is generally defined for this purpose to be statutory net income, net of realized capital gains, for the calendar year preceding the date of the dividend. In addition, other states may limit or restrict our insurance subsidiaries’ ability to pay stockholder dividends generally or as a condition to issuance of a certificate of authority.

Liquidation Rights

Upon our voluntary or involuntary liquidation, dissolution or winding-up, holders of the Series C Preferred Stock and any parity stock are entitled to receive out of our assets available for distribution to stockholders, after satisfaction of liabilities to creditors, if any, but before any distribution of assets is made to holders of our common stock or any of our other junior stock, a liquidating distribution in the amount equal to the liquidation preference of $1,000 per share of Series C Preferred Stock or the amount of the liquidation preference of such parity stock, as applicable, plus any declared and unpaid dividends. Holders of the Series C Preferred Stock will not be entitled to any other amounts from us after they have received their full liquidation preference plus any declared and unpaid dividends.

In any such distribution, if our assets are not sufficient to pay the liquidation distributions in full to all holders of the Series C Preferred Stock and all holders of any parity stock, the amounts paid to the holders of Series C Preferred Stock and to the holders of any parity stock will be paid pro rata in accordance with the respective aggregate liquidation distributions of those holders. In any such distribution, the liquidation distribution to any holder of preferred stock means the amount payable to such holder in such distribution, including liquidation preference and any declared but unpaid dividends (and any unpaid, accrued cumulative dividends in the case of any holder of shares on which dividends accrue on a cumulative basis). If the liquidation distributions have been paid in full to all holders of shares of the Series C Preferred Stock and any holders of shares of parity stock and shares ranking senior to the Series C Preferred Stock with respect to the distribution of assets upon liquidation, dissolution or winding-up, the holders of our other classes of capital stock will be entitled to receive all of our remaining assets according to their respective rights and preferences.

For purposes of this section, a consolidation or merger involving the Company with any other entity, including the consolidation or merger in which the holders of Series C Preferred Stock receive cash, securities or other property for their shares, or the sale or transfer of all or substantially all of the property and assets of the Company for cash, securities or other property, will not be deemed to constitute a liquidation, dissolution or winding-up.

Redemption

The Series C Preferred Stock as represented by the depositary shares is not subject to any mandatory redemption, sinking fund, retirement fund, purchase fund or other similar provisions.

The Series C Preferred Stock is not redeemable prior to July 15, 2021. On and after that date, the Series C Preferred Stock will be redeemable at our option, in whole or in part, upon not less than 30 days nor more than 60 days notice, at a redemption price equal to $1,000 per share plus declared and unpaid dividends on the shares of Series C Preferred Stock called for redemption for prior dividend periods, if any, plus accrued but unpaid dividends

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(whether or not declared) thereon for the then-current dividend period, to, but excluding, the date of redemption, without accumulation of any other undeclared dividends. Holders of the Series C Preferred Stock and, in turn, the holders of the depositary shares have no right to require the redemption of the Series C Preferred Stock.

The redemption price for any shares of Series C Preferred Stock shall be payable on the redemption date to the holders of such shares against book entry transfer or surrender of the certificate(s) evidencing such shares to us or our agent. Any declared but unpaid dividends payable on a redemption date that occurs subsequent to the dividend record date for a dividend period shall not be paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares on such dividend record date relating to the dividend payment date provided in “-Dividends” above.

If shares of the Series C Preferred Stock are to be redeemed, the notice of redemption shall be given by first class mail to the holders of record of the Series C Preferred Stock to be redeemed, mailed not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided that, if the Series C Preferred Stock is held in book-entry form through The Depository Trust Company, or “DTC,” we may give such notice in any manner permitted by DTC). Each notice of redemption will include a statement setting forth:

•the redemption date;

•the number of shares of Series C Preferred Stock to be redeemed and, if less than all the shares of Series C Preferred Stock held by such holder are to be redeemed, the number of such shares of Series C Preferred Stock to be redeemed from such holder;

•the redemption price; and

•that the shares should be delivered via book entry transfer or the place or places where holders may surrender certificates evidencing the Series C Preferred Stock for payment of the redemption price.

If notice of redemption of any shares of Series C Preferred Stock has been given and if the funds necessary for such redemption and to pay declared and unpaid dividends have been set aside by us for the benefit of the holders of such shares of Series C Preferred Stock so called for redemption, then, from and after the redemption date, no further dividends will be declared on such shares of Series C Preferred Stock as represented by the depositary shares, such shares of Series C Preferred Stock shall no longer be deemed outstanding and all rights of the holders of such shares of Series C Preferred Stock will terminate, except the right to receive the redemption price, without interest.

In case of any redemption of only part of the shares of Series C Preferred Stock at the time outstanding, the shares of Series C Preferred Stock to be redeemed shall be selected either pro rata or by lot.

Our ability to redeem the Series C Preferred Stock as described above may be limited by the terms of our agreements governing our existing and future indebtedness and by the provisions of other existing and future agreements.

Voting Rights

Except as provided below or as otherwise may be required by applicable law, the holders of the Series C Preferred Stock and, in turn, the holders of the depositary shares representing the Series C Preferred Stock will have no voting rights.

Whenever dividends on any Series C Preferred Stock shall not have been declared and paid for the equivalent of six or more dividend periods, whether or not for consecutive dividend periods (a “nonpayment event”), the holders of the Series C Preferred Stock, voting together as a single class with holders of any and all other series of voting preferred stock (as defined below) then outstanding, will be entitled to vote for the election of a total of two additional members of the Board of Directors of the Company (the “preferred stock directors”), provided that the

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election of any such directors shall not cause us to violate the corporate governance requirement of any exchange on which our securities may be listed or quoted that listed or quoted companies must have a majority of independent directors. The number of preferred stock directors will not be more than two at any time. In the event that the holders of the Series C Preferred Stock, and any such other holders of voting preferred stock, shall be entitled to vote for the election of the preferred stock directors following a nonpayment event, the number of directors on the Company’s Board of Directors shall automatically be increased by two and such directors shall be initially elected following such nonpayment event at a special or annual meeting called at the request of the holders of record of at least 20% of the aggregate voting power of the Series C Preferred Stock and any other such series of voting preferred stock then outstanding (provided that if such request is received less than 90 days before the date fixed for an annual or special meeting of the stockholders of the Company, then such election shall not be held at such annual or special meeting of stockholders but at a subsequent annual or special meeting), and at each subsequent annual meeting of stockholders of the Company, so long as the rights related to a nonpayment event remain in effect.

As used in this Exhibit 4.1, “voting preferred stock” means, with regard to any election or removal of a preferred stock director or any other matter as to which the holders of Series C Preferred Stock are entitled to vote, any other class or series of our parity stock upon which like voting rights have been conferred and are exercisable, including the Series A Preferred Stock and the Series B Preferred Stock.

If and when dividends, for at least four consecutive dividend periods following a nonpayment event have been paid in full (or declared and a sum sufficient for such payment shall have been set aside), the holders of the Series C Preferred Stock shall be divested of the foregoing voting rights (subject to revesting in the event of each subsequent nonpayment event) and, if such voting rights for all other holders of voting preferred stock have terminated, the term of office of each preferred stock director so elected shall terminate and the number of directors on the Board of Directors of the Company shall automatically decrease by two. In determining whether dividends have been paid for four dividend periods following a nonpayment event, we may take account of any dividend we elect to pay for such a dividend period after the regular dividend payment date for that period has passed.

Any preferred stock director may be removed at any time without cause by the holders of record of a majority of the aggregate voting power, as determined under the Certificate of Incorporation, of the Series C Preferred Stock and any other shares of voting preferred stock then outstanding (voting together as a single class) when they have the voting rights described above. So long as a nonpayment event shall continue, any vacancy in the office of a preferred stock director (other than prior to the initial election after a nonpayment event) may be filled by the written consent of the preferred stock director remaining in office, or if none remains in office, by a vote of the holders of record of a majority of the outstanding shares of Series C Preferred Stock and any other shares of voting preferred stock then outstanding (voting together as a single class) when they have the voting rights described above. Any vote of stockholders to remove, or to fill a vacancy in the office of, a preferred stock director may be taken at a special or annual meeting of such stockholders, called as provided above for an initial election of preferred stock director after a nonpayment event (provided that if such request is received less than 90 days before the date fixed for an annual or special meeting of the stockholders of the Company, then such election shall not be held at such annual or special meeting of stockholders but at a subsequent annual or special meeting). The preferred stock directors shall each be entitled to one vote per director on any matter. Each preferred stock director elected at any special or annual meeting of stockholders or by written consent of the other preferred stock director shall hold office until the next annual meeting of the stockholders of the Company if such office shall not have previously terminated as above provided.

So long as any shares of Series C Preferred Stock remain outstanding and subject in all cases to any other vote of stockholders required under applicable law or the Certificate of Incorporation:

•we will not, without the affirmative vote or consent of the holders of at least two-thirds of the voting power of Series C Preferred Stock and all other series of voting preferred stock entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing without a meeting or at a meeting, authorize or create, or increase the authorized amount of, any specific class or series of capital stock ranking senior to the Series C Preferred Stock with respect to the payment of dividends or the distribution of our assets upon our liquidation, dissolution or winding up;

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•we will not, without the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of Series C Preferred Stock given in person or by proxy, either in writing without a meeting or at a meeting:

•amend, alter or repeal the provisions of the Certificate of Incorporation or the Certificate of Designations so as to adversely affect the rights, preferences, privileges and voting powers of the Series C Preferred Stock; or

•consummate a binding share exchange or reclassification involving the Series C Preferred Stock or a merger or consolidation of us with another entity, unless in each case (i) shares of Series C Preferred Stock remain outstanding or, in the case of any such merger or consolidation with respect to which we are not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, in each case, that is an entity organized and existing under the laws of the United States of America, any state thereof or the District of Columbia, and (ii) such shares of Series C Preferred Stock remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers and limitations and restrictions, taken as a whole, as are not less favorable to the holders thereof than the rights, preferences, privileges and voting powers and limitations and restrictions of the Series C Preferred Stock, taken as a whole,

provided, however, that (1) any increase in the amount of our authorized but unissued shares of preferred stock, (2) any increase in the authorized or issued shares of Series C Preferred Stock, and (3) the creation and issuance, or an increase in the authorized or issued amount, of other series of preferred stock ranking equally with or junior to the Series C Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/ or the distribution of assets upon our liquidation, dissolution or winding up, will not be deemed to adversely affect the rights, preferences, privileges or voting powers of the Series C Preferred Stock.

Without the consent of the holders of the Series C Preferred Stock so long as such action does not adversely affect the rights, preferences, privileges and voting powers and limitations and restrictions of the Series C Preferred Stock, the Board of Directors of the Company may, subject to any vote of our stockholders required by applicable law or the Certificate of Incorporation, by resolution, amend, alter, supplement or repeal any terms of the Series C Preferred Stock:

•to cure any ambiguity, or to cure, correct or supplement any provision contained in the Certificate of Designations that may be defective or inconsistent; or

•to make any provision with respect to matters or questions arising with respect to the Series C Preferred Stock that is not inconsistent with the provisions of the Certificate of Designations;

provided that any such amendment, alteration, supplement or repeal of any terms of the Series C Preferred Stock effected in order to conform the terms thereof to the description of the terms of the Series C Preferred Stock set forth under “Description of the Series C Preferred Stock” in this Exhibit 4.1 shall be deemed not to adversely affect the rights, preferences, privileges and voting powers of the Series C Preferred Stock.

On each matter on which holders of Series C Preferred Stock are entitled to vote, each share of Series C Preferred Stock will be entitled to one vote, and when shares of any other class or series of our preferred stock have the right to vote with the Series C Preferred Stock as a single class on any matter, the Series C Preferred Stock and the shares of each such other class or series will have one vote for each $25.00 of liquidation preference (excluding accrued and unpaid dividends)(equivalent to one vote per depositary share).

The foregoing voting provisions will not apply with respect to the Series C Preferred Stock if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding Series C Preferred Stock shall have been redeemed or called for redemption upon proper notice and sufficient funds shall have been set aside by us for the benefit of the holders of Series C Preferred Stock to effect such redemption.

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Conversion

Holders do not have the right to convert Series C Preferred Stock into, or exchange Series C Preferred Stock for, any other securities or property of the Company.

Listing of the Series C Preferred Stock

The Series C Preferred Stock are not listed on any exchange except as represented by the depositary shares.

DESCRIPTION OF THE DEPOSITARY SHARES REPRESENTING INTERESTS IN THE

SERIES C PREFERRED STOCK

The following description set forth below of our depositary shares representing fractional interests in the Series C Preferred Stock is only a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to the terms and provisions of the Series C Deposit Agreement (as defined below), the form of depositary receipts, which contain the terms and provisions of the depositary shares, our Certificate of Incorporation and our Certificate of Designations for our 7.50% Non-Cumulative Preferred Stock, Series C, each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part.

General

Each depositary share represents a 1/40th interest in a share of the Series C Preferred Stock and is evidenced by a depositary receipt. We deposited the underlying shares of the Series C Preferred Stock with the depositary pursuant to a deposit agreement among us, American Stock Transfer & Trust Company, LLC, acting as depositary, and the holders from time to time of the depositary receipts (the “Series C Deposit Agreement”). Subject to the terms of the Series C Deposit Agreement, each owner of a depositary receipt is entitled, in proportion to the fractional interest of a share of Series C Preferred Stock represented by the depositary shares evidenced by that depositary receipt, to all the rights and preferences of Series C Preferred Stock represented by those depositary shares (including any dividend, liquidation, redemption and voting rights).

The depositary shares are evidenced by depositary receipts issued pursuant to the Series C Deposit Agreement. Immediately following the issuance and delivery of the Series C Preferred Stock by us to the depositary, we caused the depositary to issue, on our behalf, the depositary receipts.

Dividends and Other Distributions

Any dividend or other distribution (including upon our voluntary or involuntary liquidation, dissolution or winding-up) paid in respect of a depositary share will be in an amount equal to 1/40th of the dividend declared or distribution payable, as the case may be, on the underlying share of the Series C Preferred Stock. The depositary will distribute all cash dividends and other cash distributions received on the Series C Preferred Stock to the holders of record of the depositary receipts in proportion to the number of depositary shares held by each holder on the relevant record date. In the event of a distribution other than in cash, the depositary will distribute property received by it to the holders of record of the depositary receipts in proportion to the number of depositary shares held by each holder, unless the depositary determines that this distribution is not feasible, in which case the depositary may, with our approval, adopt a method of distribution that it deems practicable, including the sale of the property and distribution of the net proceeds of that sale to the holders of the depositary receipts.

Record dates for the payment of dividends and other matters relating to the depositary shares will be the same as the corresponding record dates for the Series C Preferred Stock represented by the depositary shares.

The amount paid as dividends or otherwise distributable by the depositary with respect to the depositary shares or the underlying Series C Preferred Stock will be reduced by any amounts required to be withheld by us or the depositary on account of taxes or other governmental charges. The depositary may refuse to make any payment or

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distribution, or any transfer, exchange or withdrawal of any depositary shares or the shares of the Series C Preferred Stock until such taxes or other governmental charges are paid.

Withdrawal of Series C Preferred Stock

Unless the related depositary shares have been previously called for redemption, a holder of depositary shares may surrender his or her depositary receipts at the corporate trust office of the depositary, pay any taxes, charges and fees provided for in the Series C Deposit Agreement and comply with any other requirements of the Series C Deposit Agreement for the number of shares of Series C Preferred Stock and any money or other property represented by such holder’s depositary receipts. A holder of depositary shares who withdraws shares of Series C Preferred Stock will be entitled to receive whole shares of Series C Preferred Stock on the basis set forth herein; partial shares of Series C Preferred Stock will not be issued.

However, holders of whole shares of Series C Preferred Stock will not be entitled to deposit those shares under the Series C Deposit Agreement or to receive depositary receipts for those shares after the withdrawal. If the depositary shares surrendered by the holder in connection with the withdrawal exceed the number of depositary shares that represent the number of whole shares of Series C Preferred Stock to be withdrawn, the depositary will deliver to the holder at the same time a new depositary receipt evidencing the excess number of depositary shares.

Redemption

If the Series C Preferred Stock underlying the depositary shares is redeemed, in whole or in part, a corresponding number of depositary shares will be redeemed with the proceeds received by the depositary from the redemption of the Series C Preferred Stock held by the depositary. The redemption price per depositary share will be equal to 1/40th of the applicable redemption price per share payable in respect of such Series C Preferred Stock.

Whenever we redeem shares of Series C Preferred Stock held by the depositary, the depositary will redeem, as of the same redemption date, the number of depositary shares representing shares of Series C Preferred Stock so redeemed. If fewer than all of the outstanding depositary shares are redeemed, the depositary will select the depositary shares to be redeemed pro rata or by lot. The depositary will mail notice of redemption to holders of the depositary receipts not less than 30 and not more than 60 days prior to the date fixed for redemption of the Series C Preferred Stock represented by the depositary shares and the related depositary shares.

Voting Rights

Because each depositary share represents a 1/40th interest in a share of the Series C Preferred Stock, holders of depositary receipts are entitled to 1/40th of a vote per share of the Series C Preferred Stock under those limited circumstances in which holders of the Series C Preferred Stock represented by the depositary shares are entitled to vote. Holders of the depositary shares representing the Series C Preferred Stock do not have any voting rights, except for the limited voting rights described under “Description of the Series C Preferred Stock-Voting Rights.”

When the depositary receives notice of any meeting at which the holders of the Series C Preferred Stock are entitled to vote, the depositary will mail (or otherwise transmit by an authorized method) the information contained in the notice to the record holders of the depositary shares relating to the Series C Preferred Stock. Each record holder of the depositary shares on the record date, which will be the same date as the record date for the Series C Preferred Stock, may instruct the depositary to vote the number of the Series C Preferred Stock votes represented by the holder’s depositary shares. To the extent possible, the depositary will vote the number of the Series C Preferred Stock votes represented by depositary shares in accordance with the instructions it receives.

We will agree to take all reasonable actions that the depositary determines are necessary to enable the depositary to vote as instructed. If the depositary does not receive specific instructions from the holders of any depositary shares representing the Series C Preferred Stock, it will vote all depositary shares held by it proportionately with instructions received.

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Conversion

Holders of depositary receipts do not have the right to convert depositary shares representing the Series C Preferred Stock into, or exchange depositary shares representing the Series C Preferred Stock for, any other securities or property of the Company.

Amendment and Termination of the Series C Deposit Agreement

The form of depositary receipt evidencing the depositary shares and any provision of the Series C Deposit Agreement may be amended by agreement between us and the depositary. However, any amendment that materially and adversely alters the rights of the existing holders of depositary shares will not be effective unless the amendment has been approved by the record holders of at least a majority of the depositary shares then outstanding. Either we or the depositary may terminate the Series C Deposit Agreement if there has been a final distribution in respect of the Series C Preferred Stock in connection with our liquidation, dissolution, or winding up.

Charges of Depositary

We will pay all transfer and other taxes, assessments, and governmental charges arising solely from the existence of the depositary arrangements, and we paid the fees of the depositary in connection with the initial deposit of the Series C Preferred Stock represented by the depositary shares. Holders of depositary receipts will pay transfer and other taxes, assessments, and governmental charges and any other charges as are expressly provided in the Series C Deposit Agreement to be for their accounts. The depositary may refuse to effect any transfer of a depositary receipt or any withdrawals of Series C Preferred Stock evidenced by a depositary receipt until all taxes, assessments, and governmental charges with respect to the depositary receipt or Series C Preferred Stock are paid by their holders.

Resignation and Removal of Depositary

The depositary may resign at any time by delivering to us notice of its election to do so, and we may remove the depositary at any time. Any resignation or removal will take effect only upon the appointment of a successor depositary and the successor depositary’s acceptance of the appointment. Any successor depositary must be a U.S. bank or trust company.

Miscellaneous

The depositary will forward to the holders of depositary shares all of our reports and communications which are delivered to the depositary and which we are required to furnish to the holders of our Series C Preferred Stock.

Neither we nor the depositary will be liable if we are prevented or delayed by law or any circumstance beyond our control in performing our obligations under the Series C Deposit Agreement. All of our obligations as well as the depositary’s obligations under the Series C Deposit Agreement are limited to performance in good faith of our respective duties set forth in the Series C Deposit Agreement, and neither of us will be obligated to prosecute or defend any legal proceeding relating to any depositary shares or Series C Preferred Stock unless provided with satisfactory indemnity. We, and the depository, may rely upon written advice of counsel or accountants, or information provided by persons presenting Series C Preferred Stock for deposit, holders of depositary shares, or other persons believed to be competent and on documents believed to be genuine.

Listing of the Depositary Shares

The depositary shares representing the Series C Preferred Stock are listed on the Nasdaq Global Market under the symbol “NGHCN.”

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Transfer Agent, Registrar, Dividend Disbursing Agent and Redemption Agent

American Stock Transfer & Trust Company, LLC is the transfer agent, registrar, dividend disbursing agent and redemption agent for the depositary shares representing the Series C Preferred Stock.

Book-Entry; Delivery and Form

The depositary shares are represented by one or more global securities that are deposited with and registered in the name of DTC or its nominee. The global securities are issued to DTC, the depository for the depositary shares, who keeps a computerized record of its participants whose clients have purchased the depositary shares. Each participant will then keep a record of its clients. Unless exchanged in whole or in part for a certificated security, a global security may not be transferred. However, DTC, its nominees, and their successors may transfer a global security as a whole to one another. Beneficial interests in the global securities will be shown on, and transfers of the global securities will be made only through, records maintained by DTC and its participants.

Purchases of depositary shares through the DTC system must be made by or through a direct participant, who receives credit for the depositary shares on DTC’s records. The beneficial owner’s ownership interest is only recorded in the direct (or indirect) participants’ records. DTC has no knowledge of the beneficial owner’s ownership of the depositary shares. DTC’s records only show the identity of the direct participants and the amount of the depositary shares held by or through them. The beneficial owner does not receive a written confirmation of its purchase or sale or any periodic account statement directly from DTC. The beneficial owner receives these from its direct (or indirect) participant. Thus, the direct (or indirect) participants are responsible for keeping accurate account of the holdings of their customers.

We wire dividend payments to DTC’s nominee and we treat DTC’s nominee as the owner of the global securities for all purposes. Accordingly, we have no direct responsibility or liability to pay amounts due on the global securities to any beneficial owner in the global securities.

Any redemption notices will be sent by us directly to DTC, who will in turn inform the direct participants, who will then contact the beneficial holders.

It is DTC’s current practice, upon receipt of any payment of dividends or liquidation amount, to credit direct participants’ accounts on the payment date based on their holdings of beneficial interests in the global securities as shown on DTC’s records. In addition, it is DTC’s current practice to assign any consenting or voting rights to direct participants whose accounts are credited with preferred securities on a record date, by using an omnibus proxy. Payments by participants to owners of beneficial interests in the global securities, and voting by participants, will be based on the customary practices between the participants and owners of beneficial interests, as is the case with the Series C Preferred Stock held for the account of customers registered in “street name.” However, payments will be the responsibility of the participants and not of DTC or us.

Depositary Shares represented by global securities will be exchangeable for certificated securities with the same terms in authorized denominations only if:

•DTC is unwilling or unable to continue as depositary or if DTC ceases to be a clearing agency registered under applicable law and a successor depositary is not appointed by us within 90 days; or

•we determine not to require all of the depositary shares to be represented by global securities.

If the book-entry-only system is discontinued, the transfer agent will keep the registration books for the depositary shares at its corporate office.

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DESCRIPTION OF THE NOTES

The following description set forth below of our 7.625% Subordinated Notes due 2055 (the “Notes”) is only a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to the pertinent sections of the indenture, which we refer to as the base indenture, dated as of May 23, 2014, between us and The Bank of New York Mellon, as trustee, as supplemented by a supplemental indenture with respect to the Notes, which we refer to as the supplemental indenture. We refer to the base indenture and the supplemental indenture, collectively, as the indenture. The base indenture and supplemental indenture are incorporated by reference as exhibits to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part.

General

We issued $100,000,000 aggregate principal amount of the Notes pursuant to the indenture. The Notes are unsecured, subordinated debt instruments. The Notes are issued in fully-registered book-entry form without coupons and in denominations of $25 and integral multiples of $25 in excess thereof. The Notes have a maturity date of September 15, 2055.

Holders of the Notes and the trustee have no right to accelerate the maturity of the Notes in the event we fail to pay interest or principal on the Notes, fail to perform any other obligation under the Notes or in the indenture or default on any other securities issued by us. See “-Events of Default” below.

The indenture does not require the maintenance of any financial ratios or specified levels of net worth or liquidity. The indenture does not contain provisions that would afford holders of Notes protection in the event of a sudden and dramatic decline in our credit quality resulting from any highly leveraged transaction, reorganization, restructuring, merger or similar transaction involving us that may adversely affect holders. The indenture does not restrict us in any way, now or in the future, from incurring additional indebtedness, including Senior Indebtedness (as defined below) that would rank senior in right of payment to the Notes. The Notes are not entitled to a sinking fund and cannot be redeemed at the option of the holder.

Interest Rate

Subject to applicable law, as described below, interest on the Notes accrues from and including the original issue date to, but excluding, the maturity date or earlier acceleration or redemption at an annual rate equal to 7.625%, and is payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, commencing on December 15, 2015, to the record holders at the close of business on the immediately preceding March 1, June 1, September 1 or December 1, as applicable (whether or not a Business Day). If the interest payment date falls on a day that is not a Business Day, interest will be paid on the next succeeding Business Day (and without any interest or other payment in respect of any such delay).

Interest on the Notes will accrue from the most recent date on which interest has been paid or duly provided for, or if no interest has been paid or duly provided for, the date of initial issuance. Interest on the Notes will cease to accrue upon the earlier of the maturity date and any date of redemption. The amount of interest payable for any interest payment period will be computed on the basis of a 360-day year comprised of twelve 30-day months.

“Business Day” means any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or to be closed.

Ranking

The payment of the principal of and interest on the Notes is expressly subordinated, to the extent and in the manner set forth in the indenture, to the prior payment in full of all of our Senior Indebtedness.

“Senior Indebtedness” is defined in the indenture to include the principal of (and premium, if any) and unpaid interest on (x) Indebtedness of the Company, whether outstanding on the date of the indenture or thereafter created,

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incurred, assumed or guaranteed, for money borrowed other than (a) any Indebtedness of the Company which when incurred, and without respect to any election under Section 1111(b) of the Federal Bankruptcy Code, was without recourse to the Company, (b) any Indebtedness of the Company to any of its subsidiaries, (c) Indebtedness to any employee of the Company, (d) any liability for taxes, (e) Trade Payables and (f) any Indebtedness of the Company which is expressly subordinate in right of payment to any other Indebtedness of the Company, and (y) renewals, extensions, modifications and refundings of any such Indebtedness. For purposes of the foregoing and the definition of “Senior Indebtedness,” the phrase “subordinated in right of payment” means debt subordination only and not lien subordination, and accordingly, (i) unsecured indebtedness shall not be deemed to be subordinated in right of payment to secured indebtedness merely by virtue of the fact that it is unsecured, and (ii) junior liens, second liens and other contractual arrangements that provide for priorities among Holders of the same or different issues of indebtedness with respect to any collateral or the proceeds of collateral shall not constitute subordination in right of payment.

“Indebtedness” is defined in the indenture as any and all obligations of a Person (as defined in the indenture) for money borrowed which, in accordance with GAAP, would be reflected on the balance sheet of such Person as a liability on the date as of which Indebtedness is to be determined.

“Trade Payables” is defined in the indenture as accounts payable or any other Indebtedness or monetary obligations to trade creditors created or assumed by the Company or any Subsidiary (as defined in the indenture) of the Company in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities).

In addition, the Notes are structurally subordinated to all existing and future indebtedness, liabilities and other obligations of our subsidiaries. Because we are a holding company, we rely primarily on dividends and other payments from our subsidiaries to pay interest and principal on our outstanding debt obligations and to make payments on our other securities.

If certain events in bankruptcy, insolvency or reorganization occur relating to us, we will first pay all Senior Indebtedness, including any interest accrued after the events occur, in full before we make any payment or distribution, whether in cash, securities or other property, on account of the principal of or interest on the Notes. In such an event, we will pay or deliver directly to the holders of Senior Indebtedness, any payment or distribution otherwise payable or deliverable to holders of the Notes. We will make the payments to the holders of Senior Indebtedness according to priorities existing among those holders until we have paid all Senior Indebtedness, including accrued interest, in full. If, notwithstanding the preceding sentence, the trustee or the holder of any Note receives any payment or distribution before all Senior Indebtedness is paid in full, and if such fact shall, at or prior to the time of such payment or distribution, have been made known to the trustee or such holder, then such payment or distribution shall be paid over or delivered for application to the payment of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness.

If such events of bankruptcy, insolvency or reorganization occur, after we have paid in full all amounts owed on Senior Indebtedness, the holders of Notes together with the holders of any of our other obligations that rank equally with the Notes will be entitled to receive from our remaining assets any principal, premium or interest due at that time on the Notes and such other obligations before we make any payment or other distribution on account of any of our capital stock or obligations ranking junior to the Notes.

In addition, if any principal, premium or interest in respect of Senior Indebtedness is not paid within any applicable grace period (including at maturity) or any other default on Senior Indebtedness occurs and the maturity of such Senior Indebtedness is accelerated in accordance with its terms, we may not pay the principal of, or premium, if any, or interest on, the Notes or repurchase, redeem or otherwise retire any Notes, unless, in each case, the default has been cured or waived and any such acceleration has been rescinded or such Senior Indebtedness has been paid in full in cash, subject to certain exceptions as provided in the indenture. If the Notes are declared due and payable before their stated maturity, the holders of Senior Indebtedness outstanding at the time the Notes so become

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due and payable shall be entitled to receive payment in full of all amounts due or to become due on or in respect of such Senior Indebtedness before the holders of the Notes are entitled to receive any payment on the Notes. If, notwithstanding the foregoing, we make any payment to the trustee or the holder of any Note prohibited by the preceding sentences, and if such fact shall, at or prior to the time of such payment, have been made known to the trustee or such holder, such payment must be paid over and delivered to us.

Because of the subordination provisions of the indenture, if we become insolvent, holders of Senior Indebtedness may receive more, ratably, and holders of the Notes may receive less, ratably, than our other creditors.

The Notes do not limit our or our subsidiaries’ ability to incur additional debt, including debt that ranks senior or pari passu (i) in right of payment and (ii) upon our liquidation to the Notes. The Notes are our subordinated unsecured obligations and rank (i) senior in right of payment to any existing and future junior subordinated debt, (ii) equally in right of payment with any unsecured subordinated debt that we incur in the future that ranks equally with the Notes, and (iii) subordinate in right of payment to any of our existing and future Senior Indebtedness.

Optional Redemption

We may redeem the Notes in $25 increments in whole or in part on September 15, 2020, or on any date thereafter, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest to, but not including, the date of redemption. If we redeem only a portion of the Notes on any date of redemption, we may subsequently redeem additional Notes.

If we are redeeming less than all the Notes at any time, the Notes to be redeemed will be selected in accordance with the procedures of DTC and which may provide for the selection or redemption of a portion of the principal amount of any Note so long as the unredeemed portion of the principal amount of any Note is in an authorized denomination.

The notices of redemption will be sent at least 30 days but not more than 60 days before the applicable redemption date to each holder of Notes being redeemed or transmitted otherwise in accordance with the procedures of DTC. If any Note is to be redeemed in part only, any notice of redemption that relates to that Note will state the portion of the principal amount to be redeemed.

Notice of redemption having been given, any Notes to be redeemed shall, on the redemption date, become due and payable at the redemption price and from and after such date (unless we default in the payment of the redemption price) such Notes shall cease to bear interest. Upon surrender of any such Notes for redemption, such Notes shall be paid by us at the redemption price.

If any Notes called for redemption shall not be paid upon surrender for redemption, the principal thereof shall, until paid, bear interest from the redemption date at the rate prescribed in the Notes.

Denominations

The outstanding Notes were issued only in fully-registered book-entry form without coupons in denominations of $25 each and integral multiples of $25 in excess thereof.

Events of Default

The indenture provides that certain events of bankruptcy, insolvency, reorganization or receivership relating to us or a Significant Subsidiary are events of default with respect to the Notes.

“Significant Subsidiary” means a Subsidiary, including its Subsidiaries, that meets any of the conditions set forth in the definition of “significant subsidiary” in Article 1, Rule 1-02 of Regulation S-X. “Subsidiary” means a corporation, company (including any limited liability company), association, partnership, joint venture, trust or other

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business entity in which the Company and/or one or more of the Company’s other Subsidiaries owns at least 50% of the voting stock thereof.

The indenture defines a default with respect to the Notes as:

•default in any payment of interest on any Note when due and payable, and the default continues for a period of thirty (30) calendar days;

•default in payment of principal or premium, if any, on the Notes when due, regardless of whether such payment became due because of maturity, redemption, acceleration or otherwise; or

•failure to perform any other covenant or warranty in the indenture that applies to the Notes for 90 days after we have received written notice of the failure to perform in the manner specified in the indenture.

There is only a right of acceleration in the case of an event of default. There is no right of acceleration in the case of a default. Accordingly, payment of principal of the Notes may be accelerated only in the case of the bankruptcy, insolvency, reorganization or receivership of us or a Significant Subsidiary. If we default in the payment of principal or interest on the Notes or we fail to perform any other covenant in the indenture, the holders of the Notes have no right to accelerate the maturity of the Notes and declare the Notes immediately due and payable.

If an event of default relating to bankruptcy, insolvency, reorganization or receivership occurs, the principal amount of all the Notes will automatically, and without action by the trustee or any holder, become immediately due and payable. Subject to certain conditions, the holders of a majority in principal amount of the Notes may rescind such declaration.

The indenture provides that if default is made on payment of interest and continues for a 30 day period or if default is made on payment of principal of the Notes, we will, upon demand of the trustee, pay to it, for the benefit of the holder of any such Note, the whole amount then due and payable on such Note for principal, premium, if any, and interest. The indenture further provides that if we fail to pay such amount immediately upon such demand, the trustee may, among other things, institute a judicial proceeding for its collection.

In cases specified in the indenture, the holders of a majority in principal amount of the Notes may waive any default on behalf of all holders of the Notes, except a default in the payment of principal or interest or a default in the performance of a covenant or provision of the indenture which cannot be modified without the consent of each holder. We are required to file annually with the trustee a certificate as to whether or not we are in compliance with all the conditions and covenants applicable to us under the indenture.

Within 90 days after the trustee’s knowledge of the occurrence of any default with respect to the Notes, the trustee shall transmit by mail to all holders of Notes, notice of such default unless such default shall have been cured or waived.

The holders of a majority of the aggregate outstanding principal amount of the Notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee with respect to the Notes.

Consolidation, Merger and Sale of Assets

The indenture provides that we shall not amalgamate or consolidate with, merge with or into, or convey, transfer or lease our properties and assets substantially as an entirety to another person, unless (i) the resulting, surviving or transferee person (if not us) shall expressly assume, by supplemental indenture, executed and delivered to the trustee, in form satisfactory to the trustee, all of our obligations under the Notes and the indenture; and (ii) immediately after giving effect to such transaction, no default or event of default has occurred and is continuing under the indenture with respect to the Notes. Upon any such amalgamation, consolidation, merger, conveyance, transfer or lease, the resulting, surviving or transferee person (if not us) shall succeed to, and may exercise every

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right and power of ours under the indenture, and we shall be discharged from our obligations under the Notes and the indenture except in the case of any such lease. At our election, this requirement will not apply to any conveyance, transfer or lease of our properties and assets substantially as an entirety to one or more of our subsidiaries.

Modification and Amendment

Subject to certain exceptions, the indenture or the Notes may be amended with the consent of the holders of at least a majority of the principal amount of then outstanding Notes (including without limitation, consents obtained in connection with a repurchase of, or tender or exchange offer for, Notes) and, subject to certain exceptions, any past default or compliance with any provisions may be waived with the consent of the holders of a majority of the principal amount of then outstanding Notes (including, without limitation, consents obtained in connection with a repurchase of, or tender offer or exchange offer for, Notes). However, without the consent of each holder of a then outstanding Note affected, no amendment may, among other things:

•reduce the percentage in aggregate principal amount of Notes outstanding necessary to waive any past default or event of default;

•reduce the rate of interest on any Note or change the time for payment of interest on any Note;

•reduce the principal of any Note or change the maturity date of any Note;

•change the place or currency of payment on any Note;

•impair the right of any holder to receive payment of principal of and interest, if any, on, its Notes or to institute suit for the enforcement of any such payment with respect to such holder’s Notes; or

•make any change in the provisions described in this “-Modification and Amendment” section or in the waiver provisions of the indenture that require each holder’s consent to modify and amend or to waive.

Without the consent of any holder of the Notes, we and the trustee may amend the indenture or the Notes:

•to cure any ambiguity, omission, defect or inconsistency in the indenture or the Notes, including to eliminate any conflict with the terms of the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”);

• to conform the terms of the indenture or the Notes to the description thereof in the accompanying prospectus relating to the offering of the Notes;

•to evidence the succession by a successor corporation and to provide for the assumption by a successor corporation of our obligations under the indenture;

•to add guarantees with respect to the Notes;

•to secure the Notes;

•to add (or expand) the covenants, restrictions or conditions for the benefit of the holders or to surrender any right or power conferred upon us;

•to make any other change that does not adversely affect the rights of any holder of the Notes in any material respect (other than any holder that consents to such change);

•to provide for a successor trustee;

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•to comply with the applicable procedures of the depositary; or

•to comply with any rules or requirements in connection with the qualification of the indenture under the Trust Indenture Act.

Holders do not need to approve the particular form of any proposed amendment. It will be sufficient if such Holders approve the substance of the proposed amendment. After an amendment under the indenture becomes effective, we are required to mail to the Holders a notice briefly describing such amendment. However, the failure to give such notice to all the holders, or any defect in the notice, will not impair or affect the validity of the amendment.

Satisfaction and Discharge; Defeasance

We may satisfy and discharge our obligations under the indenture by delivering to the securities registrar for cancellation all outstanding Notes or by depositing with the trustee or delivering to the holders, as applicable, after the Notes have become due and payable, whether at the maturity date or otherwise, cash sufficient to pay all of the outstanding Notes and paying all other sums payable under the indenture by us. Such discharge is subject to the other terms contained in the indenture, including the requirement that we provide an officer’s certificate and opinion to the trustee that all of the conditions precedent to the satisfaction and discharge have been satisfied.

Covenant Defeasance

The “covenant defeasance” provisions of the indenture, which would allow us to cease to comply with any restrictive covenants applicable to the Notes, are not applicable to the Notes because there are no restrictive covenants applicable to the Notes.

Governing Law

The indenture and the Notes are governed by and construed in accordance with the laws of the State of New York. The indenture is subject to the provisions of the Trust Indenture Act.

Listing

The Notes are listed on Nasdaq Global Market under the symbol “NGHCZ.”

Further Issuances

We may, from time to time, without the consent of the holders of the Notes, create and issue additional notes having the same terms and conditions as the Notes that are equal in rank to the Notes in all respects (or in all respects except for the issue date, the issue price and, if applicable, the first interest payment date and the initial interest accrual date). These notes will be consolidated and form a single series with the Notes, provided, however, that a separate CUSIP, common code or ISIN, as applicable, will be issued for any additional notes unless the additional notes and the Notes of such series are fungible for U.S. federal income tax purposes.

About the Trustee

The Bank of New York Mellon is the trustee under the indenture and is the principal paying agent and registrar for the Notes.

The trustee under the indenture may resign or be removed with respect to one or more series of debt securities under the indenture and a successor trustee may be appointed to act with respect to such series.

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EX-21.1

EXHIBIT 21.1

SUBSIDIARIES

Entity Name	Jurisdiction of Incorporation or Formation
1100 Compton, LLC	Delaware
ABC Agency Network of Texas, LLC	Texas
ABC Agency Network, Inc.	Louisiana
Adirondack AIF, LLC	New York
Agent Alliance Insurance Company	Alabama
AgentCubed, LLC	Idaho
Allied Producers Reinsurance Company, Ltd.	Bermuda
America’s Health Care/RX Plan Agency, Inc.	Delaware
American Capital Acquisition Investments S.A.	Luxembourg
Assigned Risk Solutions Ltd.	New Jersey
Century-National Insurance Company	California
ClearSide General Insurance Services, LLC	California
Direct Administration, Inc.	Tennessee
Direct Bay, LLC	Florida
Direct General Consumer Products, Inc.	Tennessee
Direct General Financial Services, Inc.	Tennessee
Direct General Insurance Agency, Inc.	Tennessee
Direct General Insurance Company	Indiana
Direct General Insurance Company of Mississippi	Mississippi
Direct General Life Insurance Company	South Carolina
Direct General Premium Finance Company	Tennessee
Direct Insurance Company	North Carolina
Direct National Insurance Company	North Carolina
Health Network Group, LLC	Delaware
Healthcare Solutions Team, LLC	Illinois
HealthCompare Insurance Services, Inc.	Delaware
Imperial Fire and Casualty Insurance Company	North Carolina
Imperial General Agency of Texas, Inc.	Texas
Imperial Insurance Managers, LLC	Texas
Imperial Marketing Corporation	Louisiana
Integon Casualty Insurance Company	North Carolina
Integon General Insurance Corporation	North Carolina
Integon Indemnity Corporation	North Carolina
Integon National Insurance Company	North Carolina
Integon Preferred Insurance Company	North Carolina
Integon Properties S.A. de C.V.	Mexico
Integon Service Co, S.A. de C.V.	Mexico
John Alden Financial Corporation	Delaware
LeadCloud, LLC	Maryland
MIC General Insurance Corporation	Michigan
National Farmers Union Property and Casualty Company	North Carolina

Entity Name	Jurisdiction of Incorporation or Formation
National General Assurance Company	Missouri
National General Holdings Bermuda, Ltd.	Bermuda
National General Holdings Luxembourg S.à.r.l.	Luxembourg
National General Insurance Company	Missouri
National General Insurance, Ltd.	Bermuda
National General Insurance Management Ltd.	Bermuda
National General Insurance Marketing, Inc.	Missouri
National General Insurance Online, Inc.	Missouri
National General Lender Services, Inc.	Delaware
National General Management Corp.	Delaware
National General Motor Club, Inc.	North Carolina
National General Premier Insurance Company	California
National General Re Ltd.	Bermuda
National Health Insurance Company	Texas
New Jersey Skylands Management, LLC	Delaware
New South Insurance Company	North Carolina
Newport Management Corporation	California
NG Holdings, LLC	Delaware
NGLS Adjusting, LLC	Delaware
NGLS Insurance Services, Inc.	California
NSM Sales Corporation	Nevada
Personal Express Insurance Services, Inc.	California
Quotit Corporation	California
RAC Insurance Partners, LLC	Florida
Renuant, LLC	Nevada
Right Choice Insurance Agency Inc.	Tennessee
Seattle Specialty Insurance Services, Inc.	Washington
Standard Property and Casualty Insurance Company	Illinois
Syndeste, LLC	Virginia
The Association Benefits Solution, LLC	Delaware
Velapoint, LLC	Washington
Western General Agency, Inc.	California

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Barry Karfunkel, certify that:

1.I have reviewed this Annual Report on Form 10-K of National General Holdings Corp.;

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 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 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.

Dated: February 26, 2021	By:	/s/ Barry Karfunkel
		Barry Karfunkel Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael Weiner, certify that:

1.I have reviewed this Annual Report on Form 10-K of National General Holdings Corp.;

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 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 the 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 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.

Dated: February 26, 2021	By:	/s/ Michael Weiner
		Michael Weiner Chief Financial Officer (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Barry Karfunkel, Chief Executive Officer (Principal Executive Officer) of National General Holdings Corp. (the “Company”), hereby certify, that, to my knowledge:

1.The Annual Report on Form 10-K for the year ended December 31, 2020 (the “Report”) of the Company 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.

Dated: February 26, 2021	By:	/s/ Barry Karfunkel
		Barry Karfunkel Chief Executive Officer (Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Michael Weiner, Chief Financial Officer (Principal Financial Officer) of National General Holdings Corp. (the “Company”), hereby certify, that, to my knowledge:

1.The Annual Report on Form 10-K for the year ended December 31, 2020 (the “Report”) of the Company 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.

Dated: February 26, 2021	By:	/s/ Michael Weiner
		Michael Weiner Chief Financial Officer (Principal Financial Officer)

XML

Cover Page - USD ($)	12 Months Ended
	Dec. 31, 2020	Jun. 30, 2020
Document Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-36311
Entity Registrant Name	NATIONAL GENERAL HOLDINGS CORP.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-1046208
Entity Address, Address Line One	59 Maiden Lane
Entity Address, Address Line Two	38th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10038
City Area Code	212
Local Phone Number	380-9500
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float		$ 1,425,196,853
Entity Common Stock, Shares Outstanding	113,585,043
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Central Index Key	0001578735
Common Stock, par value $0.01 per share
Document Information
Title of 12(b) Security	Common Stock, par value $0.01 per share
7.50% Non-Cumulative Preferred Stock, Series A
Document Information
Title of 12(b) Security	7.50% Non-Cumulative Preferred Stock, Series A
Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B
Document Information
Title of 12(b) Security	Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B
Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series C
Document Information
Title of 12(b) Security	Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series C
7.625% Subordinated Notes due 2055
Document Information
Title of 12(b) Security	7.625% Subordinated Notes due 2055

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Investments:
Debt securities, available-for-sale, at fair value (allowance for expected credit losses $0 - 2020) (Exchanges - $310,215 and $324,249; allowance for expected credit losses $0 - 2020)	$ 4,497,130	$ 4,476,358
Short-term investments (Exchanges - $26,887 and $5,245)	191,086	67,353
Other investments (related parties - $231,927 and $238,841)	281,055	311,287
Total investments	4,969,271	4,854,998
Cash and cash equivalents (Exchanges - $3,782 and $959)	662,772	135,942
Restricted cash and cash equivalents (Exchanges - $331 and $24)	36,995	28,521
Accrued investment income (related parties - $2,420 and $2,391) (Exchanges - $1,628 and $2,001)	27,803	30,927
Premiums and other receivables (net of allowance for expected credit losses $22,781 - 2020; net of bad debt allowance $24,067 - 2019) (Exchanges - $49,315 and $55,859; net of allowance for expected credit losses $1,165 - 2020; net of bad debt allowance $541 - 2019)	1,545,380	1,428,948
Deferred acquisition costs (Exchanges - $19,200 and $23,307)	285,905	263,523
Reinsurance recoverable (net of allowance for expected credit losses $810 - 2020) (Exchanges - $125,515 and $119,125; net of allowance for expected credit losses $174 - 2020)	1,218,930	1,394,308
Prepaid reinsurance premiums (Exchanges - $89,850 and $$105,894)	414,010	575,747
Property and equipment, net (Exchanges - $0 and $241)	377,683	403,827
Intangible assets, net (Exchanges - $3,045 and $3,225)	340,725	365,823
Goodwill	179,328	179,328
Prepaid and other assets (Exchanges - $3,564 and $3,521)	69,092	94,642
Total assets	10,127,894	9,756,534
Liabilities:
Unpaid loss and loss adjustment expense reserves (Exchanges - $205,972 and $205,786)	2,889,098	2,886,414
Unearned premiums and other revenue (Exchanges - $207,088 and $252,553)	2,244,624	2,312,241
Reinsurance payable (Exchanges - $59,039 and $35,689)	363,531	562,844
Accounts payable and accrued expenses (Exchanges - $10,203 and $8,497)	377,662	315,366
Debt	676,810	686,006
Other liabilities (Exchanges - $19,639 and $30,803)	360,171	376,169
Total liabilities	6,911,896	7,139,040
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock, $0.01 par value - authorized 10,000,000 shares, issued and outstanding 2,565,120 shares - 2020 and 2019; Aggregate liquidation preference $450,000 - 2020 and 2019.	450,000	450,000
Common stock, $0.01 par value - authorized 150,000,000 shares, issued 114,044,126 and 113,368,811 shares - 2020 and 2019, outstanding 113,585,043 and 113,368,811 shares - 2020 and 2019.	1,140	1,134
Treasury stock, at cost - 459,083 shares - 2020	(8,482)	0
Additional paid-in capital	1,077,006	1,065,634
Accumulated other comprehensive income:
Unrealized foreign currency translation adjustment, net of tax	(443)	(202)
Unrealized gain on investments, net of tax	203,646	74,750
Total accumulated other comprehensive income	203,203	74,548
Retained earnings	1,514,296	1,058,138
Total National General Holdings Corp. stockholders’ equity	3,237,163	2,649,454
Noncontrolling interest	(21,165)	(31,960)
Total stockholders’ equity	3,215,998	2,617,494
Total liabilities and stockholders’ equity	$ 10,127,894	$ 9,756,534

XML

Consolidated Balance Sheets (Parenthetical) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Investments:
Debt securities, available-for-sale, allowance for expected credit losses	$ 0
Debt securities, available-for-sale at fair value	4,497,130,000	$ 4,476,358,000
Short-term investments	191,086,000	67,353,000
Other investments	281,055,000	311,287,000
Cash and cash equivalents	662,772,000	135,942,000
Restricted cash and cash equivalents	36,995,000	28,521,000
Accrued investment income	27,803,000	30,927,000
Premiums and other receivables, allowance for expected credit Losses	22,781,000	24,067,000
Premiums and other receivables, net	1,545,380,000	1,428,948,000
Deferred acquisition costs	285,905,000	263,523,000
Reinsurance recoverable, allowance for expected credit losses	810,000	0
Reinsurance recoverable, net	1,218,930,000	1,394,308,000
Prepaid reinsurance premiums	414,010,000	575,747,000
Property and equipment, net	377,683,000	403,827,000
Total Intangible assets, Net Value	340,725,000	365,823,000
Prepaid and other assets	69,092,000	94,642,000
Liabilities:
Unpaid loss and loss adjustment expense reserves	2,889,098,000	2,886,414,000
Unearned premiums and other revenue	2,244,624,000	2,312,241,000
Reinsurance payable	363,531,000	562,844,000
Accounts payable and accrued expenses	377,662,000	315,366,000
Other liabilities	$ 360,171,000	$ 376,169,000
Stockholders’ equity:
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Shares of preferred stock issued (in shares)	2,565,120	2,565,120
Preferred stock, shares outstanding (in shares)	2,565,120	2,565,120
Aggregate liquidation preference	$ 450,000,000	$ 450,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, issued (in shares)	114,044,126	113,368,811
Common stock, outstanding (in shares)	113,585,043	113,368,811
Treasury stock, at cost (in shares)	459,083	0
Reciprocal Exchanges
Investments:
Debt securities, available-for-sale, allowance for expected credit losses	$ 0
Debt securities, available-for-sale at fair value	310,215,000	$ 324,249,000
Short-term investments	26,887,000	5,245,000
Cash and cash equivalents	3,782,000	959,000
Restricted cash and cash equivalents	331,000	24,000
Accrued investment income	1,628,000	2,001,000
Premiums and other receivables, allowance for expected credit Losses	1,165,000	541,000
Premiums and other receivables, net	49,315,000	55,859,000
Deferred acquisition costs	19,200,000	23,307,000
Reinsurance recoverable, allowance for expected credit losses	174,000
Reinsurance recoverable, net	125,515,000	119,125,000
Prepaid reinsurance premiums	89,850,000	105,894,000
Property and equipment, net	0	241,000
Total Intangible assets, Net Value	3,045,000	3,225,000
Prepaid and other assets	3,564,000	3,521,000
Liabilities:
Unpaid loss and loss adjustment expense reserves	205,972,000	205,786,000
Unearned premiums and other revenue	207,088,000	252,553,000
Reinsurance payable	59,039,000	35,689,000
Accounts payable and accrued expenses	10,203,000	8,497,000
Other liabilities	19,639,000	30,803,000
Related parties
Investments:
Other investments	231,927,000	238,841,000
Accrued investment income	$ 2,420,000	$ 2,391,000

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Consolidated Statements of Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues:
Net earned premium	$ 4,494,620	$ 4,118,042	$ 3,732,202
Ceding commission income	152,457	238,453	224,697
Service and fee income	760,374	641,965	561,583
Net investment income	118,257	141,233	119,034
Net gain (loss) on investments	26,577	13,473	(29,545)
Other income	0	26,428	0
Total revenues	5,552,285	5,179,594	4,607,971
Expenses:
Loss and loss adjustment expense	2,824,082	2,854,468	2,662,226
Acquisition costs and other underwriting expenses	990,569	827,367	735,266
General and administrative expenses	1,043,193	1,041,772	938,046
Interest expense	33,772	51,544	51,425
Total expenses	4,891,616	4,775,151	4,386,963
Income before provision for income taxes	660,669	404,443	221,008
Provision for income taxes	136,461	77,013	53,484
Net income	524,208	327,430	167,524
Net (income) loss attributable to noncontrolling interest	(10,877)	20,639	39,830
Net income attributable to NGHC	513,331	348,069	207,354
Dividends on preferred stock	(33,600)	(33,600)	(32,492)
Net income attributable to NGHC common stockholders	$ 479,731	$ 314,469	$ 174,862
Earnings Per Share (“EPS”) attributable to NGHC common stockholders:
Basic EPS (in dollars per share)	$ 4.23	$ 2.78	$ 1.62
Diluted EPS (in dollars per share)	$ 4.14	$ 2.73	$ 1.59

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 524,208	$ 327,430	$ 167,524
Other comprehensive income:
Foreign currency translation adjustment	(305)	18,055	(8,425)
Income tax effect	64	(3,796)	1,774
Total foreign currency translation adjustment, net of tax	(241)	14,259	(6,651)
Gross unrealized gain (loss) on investments before reclassifications	191,424	172,968	(71,936)
Income tax effect	(40,198)	(36,323)	15,107
Total change in net unrealized gain (loss) on investments, net of tax	151,226	136,645	(56,829)
Net realized (gain) loss on investments	(28,183)	(19,721)	18,270
Income tax effect	5,918	4,141	(3,837)
Total (gain) loss on investments reclassifications to net income, net of tax	(22,265)	(15,580)	14,433
Other comprehensive income (loss) before income tax effect	162,936	171,302	(62,091)
Income tax effect	(34,216)	(35,978)	13,044
Other comprehensive income (loss), net of tax	128,720	135,324	(49,047)
Comprehensive income	652,928	462,754	118,477
Comprehensive (income) loss attributable to noncontrolling interest	(10,942)	11,993	44,823
Comprehensive income attributable to NGHC	$ 641,986	$ 474,747	$ 163,300

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Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Preferred stock Series D	Preferred Stock	Preferred Stock Preferred stock Series D	Common stock	Treasury Stock	Additional Paid-in Capital	Additional Paid-in Capital Preferred stock Series D	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Noncontrolling Interest
Increase (Decrease) in Stockholders' Equity
Cumulative-effect adjustment of change in accounting principles	$ 8,830								$ 36	$ 8,794
Beginning balance at Dec. 31, 2017	1,953,425		$ 420,000		$ 1,067		$ 917,751		(8,112)	597,863	$ 24,856
Increase (Decrease) in Stockholders' Equity
Net income (loss)	167,524									207,354	(39,830)
Foreign currency translation adjustment, net of tax	(6,651)								(6,651)
Change in unrealized gain (loss) on investments, net of tax	(42,396)								(37,403)		(4,993)
Issuance of stock	132,230	$ 29,890		$ 30,000	58		132,172	$ (110)
Common stock dividends declared	(17,463)									(17,463)
Preferred stock dividends declared	(32,492)									(32,492)
Common stock issued under employee stock plans and exercises of stock options	1,978				4		1,974
Shares withheld related to net share settlement	(3,024)						(3,024)
Stock-based compensation	9,020						9,020
Ending balance at Dec. 31, 2018	2,200,871		450,000		1,129		1,057,783		(52,130)	764,056	(19,967)
Increase (Decrease) in Stockholders' Equity
Net income (loss)	327,430									348,069	(20,639)
Foreign currency translation adjustment, net of tax	14,259								14,259
Change in unrealized gain (loss) on investments, net of tax	121,065								112,419		8,646
Common stock dividends declared	(20,387)									(20,387)
Preferred stock dividends declared	(33,600)									(33,600)
Common stock issued under employee stock plans and exercises of stock options	594				5		589
Shares withheld related to net share settlement	(3,734)						(3,734)
Stock-based compensation	10,996						10,996
Ending balance at Dec. 31, 2019	2,617,494		450,000		1,134	$ 0	1,065,634		74,548	1,058,138	(31,960)
Increase (Decrease) in Stockholders' Equity
Net income (loss)	524,208									513,331	10,877
Foreign currency translation adjustment, net of tax	(241)								(241)
Change in unrealized gain (loss) on investments, net of tax	128,961								128,896		65
Common stock repurchased	(8,482)					(8,482)
Common stock dividends declared	(22,710)									(22,710)
Preferred stock dividends declared	(33,600)									(33,600)
Common stock issued under employee stock plans and exercises of stock options	2,635				6		2,629
Shares withheld related to net share settlement	(3,678)						(3,678)
Stock-based compensation	12,421						12,421
Ending balance at Dec. 31, 2020	$ 3,215,998		$ 450,000		$ 1,140	$ (8,482)	$ 1,077,006		$ 203,203	$ 1,514,296	$ (21,165)

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Consolidated Statements of Cash Flows $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Cash flows from operating activities:
Net income	$ 524,208	$ 327,430	$ 167,524
Adjustments to reconcile net income to cash provided by operating activities:
Net (gain) loss on investments and gain on sale of a business	(26,577)	(39,901)	29,545
Credit loss expense	94,667	88,247	74,214
Depreciation and amortization	80,694	96,279	86,346
Stock-based compensation expense	12,421	10,996	9,020
Other, net	22,517	3,644	11,685
Changes in assets and liabilities:
Accrued investment income	3,123	(5,553)	(7,568)
Premiums and other receivables	(212,556)	(112,627)	(168,445)
Deferred acquisition costs	(22,382)	(15,055)	(38,713)
Reinsurance recoverable	174,569	194,648	(318,344)
Prepaid reinsurance premiums	161,737	93,257	(148,552)
Prepaid expenses and other assets	25,818	58,086	(17,785)
Unpaid loss and loss adjustment expense reserves	2,685	(62,965)	302,730
Unearned premiums and other revenue	(67,617)	(21,474)	265,102
Reinsurance payable	(199,314)	(42,355)	259,699
Accounts payable and accrued expenses	69,649	(7,983)	98,276
Other liabilities	(43,572)	(43,063)	(6,601)
Net cash provided by operating activities	600,070	521,611	598,133
Cash flows from investing activities:
Debt securities, available-for-sale	(1,002,485)	(2,140,359)	(1,802,668)
Short-term investments	(1,959,084)	(2,773,361)	(2,919,422)
Other investments	(2,579)	(5,848)	(39,019)
Property and equipment	(39,974)	(91,664)	(102,390)
Sale of debt securities, available-for-sale	509,902	974,474	1,010,339
Maturity of debt securities, available-for-sale	645,401	347,948	314,685
Sale of short-term investments	1,838,450	3,066,577	2,610,788
Sale and return of other investments	25,257	16,733	150,366
Sale of a business, net of cash and cash equivalents sold	0	92,290	0
Other investing activities	(700)	14,959	(13,453)
Net cash provided by (used in) investing activities	14,188	(498,251)	(790,774)
Cash flows from financing activities:
Common stock repurchased	(8,482)	0	0
Payments of debt issuance costs	0	(1,134)	0
Repayments of debt and principal payments under capital leases obligations	(13,130)	(32,306)	(39,000)
Issuance of common stock, net (fees $0 - 2020, $0 - 2019, and $5,770 - 2018)	0	0	132,230
Issuance of preferred stock, net (fees $0 - 2020, $0 - 2019, and $110 - 2018)	0	0	29,890
Issuance of common stock — employee share options	2,635	594	1,978
Taxes paid related to net share settlement of equity awards	(3,678)	(3,734)	(3,024)
Dividends paid to common shareholders	(22,699)	(19,239)	(17,111)
Dividends paid to preferred shareholders	(33,600)	(33,542)	(31,500)
Net cash (used in) provided by financing activities	(78,954)	(89,361)	73,463
Effect of exchange rate changes on cash and cash equivalents	0	(3,119)	(4,723)
Net increase (decrease) in cash, cash equivalents, and restricted cash	535,304	(69,120)	(123,901)
Cash, cash equivalents, and restricted cash at beginning of the year	164,463	233,583	357,484
Cash, cash equivalents, and restricted cash at end of the year	699,767	164,463	233,583
Supplemental disclosures of cash flow information:
Cash paid for income taxes	109,936	38,723	26,763
Cash paid for interest	38,208	42,159	44,884
Common stock
Dividends Payable
Dividends Payable	5,679	5,669	4,518
Preferred Stock
Dividends Payable
Dividends Payable	$ 8,925	$ 8,925	$ 8,867

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Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Common stock
Cost of issuance of stock	$ 0	$ 0	$ 5,770
Preferred Stock
Cost of issuance of stock	$ 0	$ 0	$ 110

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Organization

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

National General Holdings Corp. (the “Company” or “NGHC”) is an insurance holding company formed under the laws of the state of Delaware. The Company provides, through its wholly-owned subsidiaries, a variety of insurance products, including personal and small business automobile, homeowners, umbrella, recreational vehicle, motorcycle, lender-placed, supplemental health and other niche insurance products. The insurance is sold through a network of independent agents, relationships with affinity partners, direct-response marketing programs and retail storefronts. The Company is licensed to operate throughout the fifty states and the District of Columbia.

Effective January 4, 2021, the Company was acquired by The Allstate Corporation (“Allstate”) pursuant to the Agreement and Plan of Merger (“Merger”), dated as of July 7, 2020, by and among the Company, Allstate, and Bluebird Acquisition Corp., an indirect wholly owned subsidiary of Allstate. See Note 22, “Subsequent Events” for additional information.

In March 2020, the outbreak of COVID-19 caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization. The pandemic outbreak has caused an economic downturn on a global scale. As of December 31, 2020, the Company did not experience a material adverse impact due to COVID-19.

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and variable interest entities (“VIE”) of which the Company is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated in consolidation.

Use of Estimates and Assumptions

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s principal estimates include unpaid losses and loss adjustment expense reserves; deferred acquisition costs; reinsurance recoverable, including the provision for uncollectible amounts; determining the fair value of investments; determining the fair value of stock-based awards for stock compensation; the valuation of intangibles and the determination of goodwill and goodwill impairment; and income taxes. In developing the estimates and assumptions, management uses all available evidence. Because of uncertainties associated with estimating the amounts, timing and likelihood of possible outcomes, actual results could differ from estimates.

Other Significant Accounting Policies

Premiums and Other Receivables

The Company recognizes earned premium on a pro rata basis over the terms of the policies, generally periods of six or twelve months. Unearned premiums represent the portion of premiums written applicable to the unexpired terms of the policies. Net premiums receivable represent premiums written and not yet collected, net of an allowance for uncollectible premiums. The Company regularly evaluates premiums and other receivables and adjusts its allowance for uncollectible amounts as appropriate. Receivables specifically identified as uncollectible are charged to expense in the period the determination is made. Premium refunds are recorded as an offset against gross premium written.

Premiums and other receivables are reported net of an allowance for expected credit losses. The allowance is based upon the Company’s ongoing review of amounts outstanding, historical loss data, including delinquencies and write-offs, current and forecasted economic conditions, and other relevant factors. The Company uses a loss-rate method to estimate the expected credit losses. Credit risk is partially mitigated by the Company’s ability to cancel the policy if the policyholder does not pay the premium.

Cash and Cash Equivalents

The Company’s cash and cash equivalents include cash on hand, money market instruments and other debt instruments with a maturity of 90 days or less when purchased. Certain securities with original maturities of 90 days or less that are held as a portion of fixed maturity portfolios are classified as short-term investments.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents balances relate primarily to deposits in certain states in order to conduct business and certain third-party agreements. The Company also utilizes trust accounts to collateralize business with its reinsurance counterparties. Amounts described as restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.

Short-term Investments

Short-term investments include commercial paper, U.S. Treasury bills and money market funds with maturities between 91 days and less than one year at the date of acquisition.

Deferred Acquisition Costs

Deferred acquisition costs include commissions, premium taxes, payments to affinity partners, and other direct sales costs that are directly related to successful acquisition of insurance policies. These costs, net of ceding allowances, are deferred and amortized to the extent recoverable, over the policy period in which the related premiums are earned and/or over the expected life of the policy as applicable to A&H. Anticipated investment income is considered in determining the recoverability of these costs. Management believes that these costs are recoverable.

Ceding Commission Revenue

Commissions on reinsurance premiums ceded are earned in a manner consistent with the recognition of the costs to acquire the underlying policies on a pro-rata basis over the terms of the policies reinsured. The portion of ceding commission which represents reimbursement of acquisition costs related to the underlying policies is recorded as an offset to acquisition costs and other underwriting expenses. Commission in excess of acquisition costs is recorded as ceding commission income over the terms of the policies. Certain reinsurance agreements contain provisions whereby the ceding commission rates vary based on the loss experience of the policies covered by the agreements. The Company records ceding commission revenue based on its current estimate of losses on the reinsured policies subject to variable commission rates. The Company records adjustments to the ceding commission revenue in the period that changes in the estimated losses are determined.

Loss and Loss Adjustment Expense

Loss and loss adjustment expense (“LAE”) represent the estimated ultimate net costs of all reported and unreported losses incurred through the period end. The reserves for unpaid losses and LAE represent the accumulation of estimates for both reported losses and those incurred but not reported relating to direct insurance and assumed reinsurance agreements. Estimates for salvage and subrogation recoverables are recognized at the time losses are incurred and netted against the provision for losses. Insurance liabilities are based on estimates, and the

ultimate liability may vary from such estimates. These estimates are regularly reviewed and adjustments are included in the period in which adjustments are determined.

Business Combinations

The Company accounts for business combinations under the acquisition method of accounting, which requires the Company to record assets acquired, liabilities assumed and any noncontrolling interest in the acquiree at their respective fair values as of the acquisition date. The Company accounts for the insurance and reinsurance contracts under the acquisition method as new contracts, which requires the Company to record assets and liabilities at fair value. The Company adjusts the fair value of loss and LAE reserves starting with the acquired loss reserves based on the Company’s existing accounting policies and then discounting them based on expected reserve payout patterns using a current risk-free rate of interest. This risk-free interest rate is then adjusted based on different cash flow scenarios that use different payout and ultimate reserve assumptions deemed to be reasonably possible based upon the inherent uncertainties present in determining the amount and timing of payment of such reserves. The difference between the acquired loss and LAE reserves and the Company’s best estimate of the fair value of such reserves at the acquisition date is recorded as either an intangible asset (net loss reserve discount) or another liability (net loss reserve plus a risk premium), as applicable and is amortized proportionately to the reduction in the related loss reserves (e.g., over the estimated payout period of the acquired loss and LAE reserves). The Company assigns fair values to intangible assets acquired based on valuation techniques including the income and market approaches. The Company records contingent consideration at fair value based on the terms of the purchase agreement with subsequent changes in fair value recorded through earnings. The purchase price is the fair value of the total consideration conveyed to the seller and we record the excess (deficiency) of the purchase price over the fair value of the acquired net assets, where applicable, as goodwill or bargain purchase gain. The Company expenses costs associated with the acquisition of a business in the period incurred.

Goodwill and Intangible Assets

A purchase price paid that is in excess of net assets, i.e., goodwill, arising from a business combination is recorded as an asset and is not amortized. Intangible assets with an indefinite useful life are not amortized. Goodwill and intangible assets are tested for impairment on an annual basis or more frequently if changes in circumstances indicate that the carrying amount may not be recoverable. If the goodwill or intangible asset is impaired, it is written down to its realizable value with a corresponding expense reflected in general and administrative expenses in the consolidated statements of income.

Intangible assets that have finite lives, including but not limited to, agent and customer relationships and trademarks, are amortized over the estimated useful life of the asset. For intangible assets with finite lives, impairment is recognized if the carrying amount is not recoverable and exceeds the fair value of the intangible asset. Generally intangible assets with finite lives are only tested for impairment if indicators of impairment, i.e, triggers, are identified. Triggers include, but are not limited to, a significant adverse change in the extent, manner or length of time in which the intangible asset is being used or a significant adverse change in legal factors or in the business climate that could affect the value of the other intangible asset.

Investments

The Company has classified its debt securities as available for sale measured at fair value with unrealized gains and losses reported as a separate component of comprehensive income. Equity investments (except those accounted for under the equity method, and those that result in consolidation of the investee and certain other investments) are measured at fair value with all gains and losses reported in net income. The Company may sell its available-for-sale and equity securities in response to changes in interest rates, risk/reward characteristics, liquidity needs or other factors. Available-for-sale and equity securities are reported at their estimated fair values based on quoted market prices or recognized pricing services.

Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method. Net investment income is recognized when earned and includes interest

and dividend income together with amortization of market premiums and discounts using the effective yield method and is net of investment management fees and other expenses. For mortgage-backed securities and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and revised as necessary. Any adjustments required due to the change in effective yields and maturities are recognized on a prospective basis through yield adjustments.

As of December 31, 2020, and 2019, the Company had the following major types of investments:

(i)Debt securities are classified as available-for-sale and are carried at fair value. Unrealized gains or losses on available-for-sale debt securities are reported as a component of accumulated other comprehensive income.

(ii)Mortgage and structured securities are carried at fair value. The Company recognizes income using the retrospective adjustment method based on prepayments and the estimated economic lives of the securities. The effective yield reflects actual payments to date plus anticipated future payments. These investments are recorded as debt securities, available-for-sale in the consolidated balance sheets.

(iii)Short-term investments are carried at amortized cost, which approximates fair value, and includes investments with maturities between 91 days and less than one year at the date of acquisition. Income from short-term investments is reported within net investment income.

(iv)Other investments consisted of equity method investments, in which the company has the power to influence the operating or financial decisions but does not require consolidation; common stock carried at fair value (equity securities); notes receivable; long-term certificates of deposits; and other instruments carried at fair value and at cost or amortized cost. Income from other investments is reported within net investment income. Gains or losses on equity securities are reported within net gain (loss) on investments.

Beginning on January 1, 2020, credit losses on available-for-sale debt securities are recognized through an allowance account. The Company reports accrued investment income separately from debt securities in the Consolidated Balance Sheets, and has elected not to measure an allowance for credit losses. Accrued investment income is written-off by reversing interest income through net investment income at the time the issuer of the bond defaults or is expected to default on payments. Uncollectible debt securities are written-off to net gain (loss) on investments when the Company determines that no additional payments of principal or interest will be received.

Fair Value of Financial Instruments

The Company’s estimates of fair value for financial assets and financial liabilities are based on the inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. Additionally, valuation of debt securities investments is more subjective when markets are less liquid due to lack of market-based inputs, which may increase the potential that the estimated fair value of an investment is not reflective of the price at which an actual transaction could occur. Fair values of other financial instruments which are short-term in nature approximate their carrying values.

Equity Method Investments

The Company uses the equity method of accounting for investments in which its ownership interest enables the Company to influence operating or financial decisions of the investee, but the Company’s interest does not require consolidation. In applying the equity method, the Company records its investment at cost, and subsequently increases or decreases the carrying amount of the investment by its proportionate share of the net earnings or losses and other comprehensive income of the investee. Any dividends or distributions received are recorded as a decrease in the carrying value of the investment. The Company’s proportionate share of net income is reported in net investment income.

Stock Compensation Expense

The Company recognizes stock-based compensation expense including stock options and Restricted Stock Units (“RSUs”), to be measured based on the grant date fair value of the awards, with the resulting expense recognized on a straight-line basis over the period during which the employee is required to perform service in exchange for the award. The majority of the Company’s awards are earned over a service period of three or four years.

Earnings Per Share

Basic earnings per share are computed by dividing income available to common stockholders by the number of weighted average common shares outstanding. Dilutive earnings per share are computed by dividing income available to common stockholders, adjusted for the effects of the presumed issuance of potential common shares, by the number of weighted average common shares outstanding, plus potentially issuable shares, such as options, unvested stock-based payment awards and convertible securities.

Impairment of Long-lived Assets

The carrying value of long-lived assets is evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable from the estimated undiscounted future cash flows expected to result from its use and eventual disposition. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment is measured as the amount by which the carrying amount of the assets exceeds the fair value as estimated by discounted cash flows.

Income Taxes

The Company joins its subsidiaries in the filing of a consolidated Federal income tax return and is party to a Federal income tax allocation agreement. Under the tax allocation agreement, the Company pays to or receives from its subsidiaries the amount, if any, by which the group’s Federal income tax liability was affected by virtue of inclusion of the subsidiary in the consolidated Federal return. The Reciprocal Exchanges are not party to the tax allocation agreement and file separate tax returns.

Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. The deferred tax asset and liability primarily consists of book versus tax differences for earned premiums, loss and LAE reserve discounting, deferred acquisition costs, earned but unbilled premiums, and unrealized holding gains and losses on debt securities. Changes in deferred income tax assets and liabilities that are associated with components of other comprehensive income, primarily unrealized investment gains and losses, are recorded directly to other comprehensive income. Otherwise, changes in deferred income tax assets and liabilities are included as a component of income tax expense. In assessing the recoverability of deferred tax assets, management considers whether it is more likely than not that the Company will generate future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. If necessary, the Company establishes a valuation allowance to reduce the deferred tax assets to the amounts more likely than not to be realized.

The Company recognizes tax benefits for tax positions that are more likely than not to be sustained upon examination by taxing authorities. The Company’s policy is to prospectively classify accrued interest and penalties related to any unrecognized tax benefits in its income tax provision.

Reinsurance

The Company cedes insurance risk under various reinsurance agreements. The Company seeks to reduce the loss that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring

certain levels of risk with other insurance enterprises. The Company remains liable with respect to any insurance ceded if the assuming companies are unable to meet their obligations under these reinsurance agreements.

Reinsurance premiums, losses and LAE ceded to other companies are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Earned premiums and losses and LAE incurred ceded to other companies have been recorded as a reduction of premium revenue and losses and LAE. Commissions allowed by reinsurers on business ceded have been recorded as ceding commission revenue to the extent the ceding commission exceeds acquisition costs. Reinsurance recoverable is reported based on the portion of reserves and paid losses and LAE that are ceded to other companies. If the Company determines that a reinsurance contract does not transfer sufficient risk, it accounts for the contract under deposit accounting.

Amounts recoverable from reinsurers are estimated in a manner consistent with the associated claim liability. The Company reports its reinsurance recoverable net of an allowance for estimated uncollectible reinsurance. The allowance is based upon the Company’s ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, applicable coverage defenses, and other relevant factors. The Company evaluates and monitors the financial condition of its reinsurers under voluntary reinsurance arrangements to minimize its exposure to significant losses from reinsurer insolvencies.

Property and Equipment

Property and equipment are recorded at cost. Maintenance and repairs are charged to operations as incurred. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, as follows:

Buildings and improvements	30 years
Leasehold improvements	Remaining lease term
Other equipment	3 to 20 years
Hardware and software	3 to 5 years

The Company capitalizes costs of computer software developed or obtained for internal use that is specifically identifiable, has determinable lives and relates to future use.

Variable Interest Entities

A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains and losses of the entity. The Company’s consolidation principles require the inclusion of VIEs in which the Company is deemed the primary beneficiary. The primary beneficiary is the entity that has both (1) the power to direct the activities of the VIE that most significantly affect that entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE.

The consolidated financial statements also include the accounts and operations of Adirondack Insurance Exchange, a New York reciprocal insurer, and New Jersey Skylands Insurance Association, a New Jersey reciprocal insurer (together, the “Reciprocal Exchanges” or “Exchanges”), VIEs of which the Company is the primary beneficiary. The Company does not own the Reciprocal Exchanges but is paid a fee to manage them.

The Company consolidates the Reciprocal Exchanges as it has determined that these are VIEs of which the Company is the primary beneficiary. The Company manages the business operations of the Reciprocal Exchanges and has the ability to direct their activities. The Company receives a management fee for the services provided to the Reciprocal Exchanges. The Reciprocal Exchanges are insurance carriers organized as unincorporated associations. In the event of dissolution, policyholders would share any residual unassigned surplus in the same proportion as the amount of insurance purchased but are not subject to assessment for any deficit in unassigned surplus of the

Reciprocal Exchanges. The assets of the Reciprocal Exchanges can be used only to settle the obligations of the Reciprocal Exchanges and general creditors to their liabilities have no recourse to the Company as primary beneficiary. The results of operations of the Reciprocal Exchanges and the management companies are included in the Company’s P&C segment.

Noncontrolling Interest

Non-redeemable noncontrolling interest is the portion of equity (net assets) not attributable, directly or indirectly, to a parent. The Company has no ownership interest in the Reciprocal Exchanges. Therefore, the difference between the value of their assets and liabilities represent the value of the noncontrolling interest.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk are primarily cash and cash equivalents, investments and premiums and other receivables. Investments are diversified through many industries and geographic regions through the use of an investment manager who employs different investment strategies. The Company limits the amount of credit exposure with any one financial institution and believes that no significant concentration of credit risk exists with respect to cash and investments. At December 31, 2020 and 2019, the outstanding premiums and other receivables balance was generally diversified due to the Company’s diversified customer base. To reduce credit risk, the Company performs ongoing evaluations for uncollectible amounts. The Company also has receivables from its reinsurers. See Note 10, “Reinsurance” for additional information about concentration of credit risk. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company periodically evaluates the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. It is the policy of management to review all outstanding receivables at period end as well as the bad debt write-offs experienced in the past and establish an allowance for uncollectible accounts, if deemed necessary.

Service and Fee Income

The Company currently generates policy service and fee income from installment fees, late payment fees, and other finance and processing fees related to policy cancellation, policy reinstatement and insufficient funds check returns. These fees are generally designed to offset expenses incurred in the administration of the Company’s insurance business, and are generated as follows. Installment fees are charged to permit a policyholder to pay premiums in installments rather than in a lump sum. Late payment fees are charged when premiums are remitted after the due date and any applicable grace periods. Policy cancellation fees are charged to policyholders when a policy is terminated by the policyholder prior to the expiration of the policy’s term or renewal term, as applicable. Reinstatement fees are charged to reinstate a policy that has lapsed, generally as a result of non-payment of premiums. Insufficient fund fees are charged when the customer’s payment is returned by the financial institution.

All fee income is recognized as follows. An installment fee is recognized at the time each policy installment bill is due. A late payment fee is recognized when the customer’s payment is not received after the listed due date and any applicable grace period. A policy cancellation fee is recognized at the time the customer’s policy is canceled. A policy reinstatement fee is recognized when the customer’s policy is reinstated. An insufficient fund fee is recognized when the customer’s payment is returned by the financial institution. The amounts charged are primarily intended to compensate the Company for the administrative costs associated with processing and administering policies that generate insurance premium; however, the amounts of fees charged are not dependent on the amount or period of insurance coverage provided and do not entail any obligation to return any portion of those funds. The direct and indirect costs associated with generating fee income are not separately tracked. The Company estimates an allowance for doubtful accounts based on a percentage of fee income.

The Company also collects service fees in the following forms:

(i) Commission and general agent fees by selling policies issued by third-party insurance companies. The Company does not bear insurance underwriting risk with respect to these policies. Commission income and general

agent fees are recognized, net of an allowance for estimated policy cancellations, at the time when the policy is sold. The allowance for estimated third-party cancellations is periodically evaluated and adjusted as necessary.

(ii) Group health administrative fees by performing enrollment and claims services for self-funded employer plans. The Company does not bear insurance underwriting risk in these administrative activities. Group health administrative fees are recognized pro-rata over the term of the administrative contract with the employer, which generally covers twelve months.

Accounting Standards

Recent Accounting Standards, Adopted

Standard	Description	Date of Adoption	Effect on the Company
ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and related amendments.	This standard changed the impairment model to a new forward-looking expected loss model for most financial assets and certain other instruments. The standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which generally results in earlier recognition of allowances for credit losses on loans and other financial instruments. Many of the loss estimation techniques applied prior the adoption of the standard are still permitted, although the inputs to those techniques changed to reflect the full amount of expected credit losses. The Company continues to use judgement to determine which loss estimation method is appropriate for its circumstances. The standard became effective for interim and annual reporting periods beginning after December 15, 2019 and requires using a modified retrospective approach, recognizing a cumulative-effect adjustment as of the beginning of the first reporting period in which the standard is effective.	January 1, 2020	The Company adopted ASU 2016-13 using the modified retrospective approach and recorded a cumulative-effect adjustment, net of tax of $(863) and $(147) to the opening balance of retained earnings and non-controlling interest, respectively. The Company also increased the allowance for premiums receivable, reinsurance recoverable and deferred taxes by the same cumulative amount.
ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.	This standard established a one-step process for testing the value of the goodwill which an entity carries. ASU 2017-04 requires the goodwill impairment to be measured as the excess of the reporting unit’s carrying amount over its fair value.	January 1, 2020	The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Standards, Not Yet Adopted

Standard	Description	Effective Date	Effect on the Company
ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.	This standard simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification (“ASC”) 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application, among other things.	January 1, 2021	The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.
ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts and related amendments.	This standard makes targeted improvements to the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The standard is intended to: (i) improve the timeliness of recognizing changes in the liability for future policy benefits and modify the rate used to discount future cash flows, (ii) simplify and improve the accounting for certain market-based options or guarantees associated with deposit or account balance contracts, (iii) simplify the amortization of deferred acquisition costs and (iv) improve the effectiveness of the required disclosures.	January 1, 2022	The Company is currently evaluating the impact this guidance will have on its consolidated financial condition, results of operations, cash flows and disclosures.

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Allowance for Expected Credit Losses

12 Months Ended

Dec. 31, 2020

Credit Loss [Abstract]

Allowance for Expected Credit Losses

Allowance for Expected Credit Losses

Premiums and Other Receivables

The following tables present the balances of premiums and other receivables, net of the allowance for expected credit losses, as of January 1, 2020, and December 31, 2020, and changes in the allowance for expected credit losses for the year ended December 31, 2020.

	Year Ended December 31, 2020
	Premiums and Other Receivables, Net		Allowance for Expected Credit Losses
Balance, beginning of the year	$	1,428,948	$	24,067
Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020			762
Current period provision for expected credit losses (1)			94,374
Write-offs of uncollectible premiums and other receivables			(96,422)
Balance, end of the year	$	1,545,380	$	22,781

(1) Current period charges for expected losses are recorded in general and administrative expenses.

Reinsurance Recoverable

The following tables present the balances of reinsurance recoverable, net of the allowance for estimated uncollectible reinsurance, as of January 1, 2020, and December 31, 2020, and changes in the allowance for estimated uncollectible reinsurance for the year ended December 31, 2020.

	Year Ended December 31, 2020
	Reinsurance Recoverable, Net		Allowance for Expected Credit Losses
Balance, beginning of the year	$	1,394,308	$	—
Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020			517
Current period provision for expected credit losses			293
Balance, end of the year	$	1,218,930	$	810

Other than the Company’s mandatory pools and associations reinsurance agreements, the Company’s reinsurers generally carry at least an A.M. Best rating of “A-” (Excellent) or the reinsurance recoverable balances are collateralized. The Company also maintains funds held liabilities under the auto quota share reinsurance agreement.

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Investments

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

(a) Debt Securities, Available-For-Sale

The following tables summarize the unrealized positions for available-for-sale debt securities, disaggregated by major security type.

	Amortized		Allowance for		Gross Unrealized				Fair
December 31, 2020	Cost		Credit Losses (1)		Gains		Losses		Value
U.S. Treasury	$	51,749	$	—	$	3,199	$	—	$	54,948
Federal agencies	258		—		3		—		261
States and political subdivision bonds	304,687		—		17,758		(4)		322,441
Foreign government	1,764		—		119		—		1,883
Corporate bonds	1,992,193		—		141,234		(126)		2,133,301
Residential mortgage-backed securities	1,064,041		—		42,597		(222)		1,106,416
Commercial mortgage-backed securities	596,408		—		58,476		(252)		654,632
Asset-backed securities	27,988		—		1,140		(236)		28,892
Structured securities	195,125		—		1,009		(1,778)		194,356
Total	$	4,234,213	$	—	$	265,535	$	(2,618)	$	4,497,130
NGHC	$	3,929,138	$	—	$	260,138	$	(2,361)	$	4,186,915
Reciprocal Exchanges	305,075		—		5,397		(257)		310,215
Total	$	4,234,213	$	—	$	265,535	$	(2,618)	$	4,497,130

(1) Represents the amount of impairment that has resulted from credit-related factors recorded in net gain (loss) on investments.

	Amortized		Gross Unrealized				Fair
December 31, 2019	Cost		Gains		Losses		Value
U.S. Treasury	$	65,037	$	1,992	$	(23)	$	67,006
Federal agencies	3,907		8		—		3,915
States and political subdivision bonds	298,345		4,778		(1,441)		301,682
Foreign government	1,762		40		—		1,802
Corporate bonds	1,859,736		59,184		(2,357)		1,916,563
Residential mortgage-backed securities	1,265,830		15,747		(4,117)		1,277,460
Commercial mortgage-backed securities	585,044		27,261		(112)		612,193
Asset-backed securities	74,465		1,194		(48)		75,611
Structured securities	222,565		226		(2,665)		220,126
Total	$	4,376,691	$	110,430	$	(10,763)	$	4,476,358
NGHC	$	4,057,501	$	104,951	$	(10,343)	$	4,152,109
Reciprocal Exchanges	319,190		5,479		(420)		324,249
Total	$	4,376,691	$	110,430	$	(10,763)	$	4,476,358

The amortized cost and fair value of available-for-sale debt securities held as of December 31, 2020, by contractual maturity, are shown in the table below. Actual maturities may differ from contractual maturities because some borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	NGHC				Reciprocal Exchanges				Total
December 31, 2020	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	61,921	$	62,731	$	—	$	—	$	61,921	$	62,731
Due after one year through five years	1,006,518		1,075,299		69,060		71,231		1,075,578		1,146,530
Due after five years through ten years	1,050,331		1,127,435		65,495		67,259		1,115,826		1,194,694
Due after ten years	270,237		280,867		22,214		22,368		292,451		303,235
Mortgage-backed securities	1,540,131		1,640,583		148,306		149,357		1,688,437		1,789,940
Total	$	3,929,138	$	4,186,915	$	305,075	$	310,215	$	4,234,213	$	4,497,130

(b) Gross Unrealized Losses

The tables below summarize the gross unrealized losses on debt securities classified as available-for-sale, 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, 2020	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
States and political subdivision bonds	$	1,111	$	(4)	$	—	$	—	$	1,111	$	(4)
Corporate bonds	29,161		(126)		—		—		29,161		(126)
Residential mortgage-backed securities	58,742		(222)		—		—		58,742		(222)
Commercial mortgage-backed securities	40,891		(252)		—		—		40,891		(252)
Asset-backed securities	5,041		(228)		151		(8)		5,192		(236)
Structured securities	60,359		(514)		43,906		(1,264)		104,265		(1,778)
Total	$	195,305	$	(1,346)	$	44,057	$	(1,272)	$	239,362	$	(2,618)
NGHC	$	137,628	$	(1,135)	$	40,103	$	(1,226)	$	177,731	$	(2,361)
Reciprocal Exchanges	57,677		(211)		3,954		(46)		61,631		(257)
Total	$	195,305	$	(1,346)	$	44,057	$	(1,272)	$	239,362	$	(2,618)

	Less Than 12 Months				12 Months or More				Total
December 31, 2019	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury	$	19,903	$	(23)	$	500	$	—	$	20,403	$	(23)
States and political subdivision bonds	106,103		(1,415)		2,580		(26)		108,683		(1,441)
Corporate bonds	586,817		(2,253)		5,976		(104)		592,793		(2,357)
Residential mortgage-backed securities	410,484		(4,074)		3,983		(43)		414,467		(4,117)
Commercial mortgage-backed securities	18,250		(105)		748		(7)		18,998		(112)
Asset-backed securities	5,406		(29)		920		(19)		6,326		(48)
Structured securities	40,979		(94)		109,880		(2,571)		150,859		(2,665)
Total	$	1,187,942	$	(7,993)	$	124,587	$	(2,770)	$	1,312,529	$	(10,763)
NGHC	$	1,104,244	$	(7,654)	$	117,681	$	(2,689)	$	1,221,925	$	(10,343)
Reciprocal Exchanges	83,698		(339)		6,906		(81)		90,604		(420)
Total	$	1,187,942	$	(7,993)	$	124,587	$	(2,770)	$	1,312,529	$	(10,763)

The Company’s debt securities portfolio is sensitive to interest rate fluctuations, which impact the fair value of individual securities. There were 134 and 1,337 individual security lots at December 31, 2020, and 2019, respectively, that accounted for the gross unrealized loss. As of December 31, 2020, and 2019, the unrealized losses for those securities in unrealized loss positions for a period of twelve or more consecutive months were not greater than or equal to 25% of their amortized cost. The Company did not have a credit allowance as of December 31, 2020, as the previously recorded allowance was reduced to $0 due to a combination of market movements and sales. Some of the factors considered in assessing credit loss and impairment of fixed maturities due to credit-related factors include: (1) the magnitude of the unrealized loss in relation to the amortized cost; (2) the credit rating of the issuing entity and market or issuer events that could impact the issuer’s ability to repay the debt security; (3) the likelihood of the recoverability of principal and interest; and (4) whether it is more likely than not that the Company will be required to sell the investment prior to an anticipated recovery in value.

The Company considers different factors to determine the amount of projected future cash flows and discounting methods for corporate bonds and residential and commercial mortgage-backed or structured securities. For corporate bond securities, the split between the credit and non-credit losses is driven by assumptions regarding the amount and timing of projected future cash flows. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the security at the date of acquisition. For residential and commercial mortgage-backed and structured securities, cash flow estimates, including prepayment assumptions, are based on data from third-party data sources or internal estimates. In addition to prepayment assumptions, cash flow estimates vary based on assumptions regarding the underlying collateral including default rates, recoveries and changes in value. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security prior to impairment at the balance sheet date. The discounted cash flows become the new amortized cost basis of the debt security.

(c) Net Investment Income

The components of net investment income consisted of the following:

	Year Ended December 31,
	2020		2019		2018
Cash and short-term investments	$	542	$	4,075	$	1,659
Debt securities, available-for-sale	119,873		124,379		107,077
Other, net (related parties - $(2,230), $7,718 and $4,876)	2,728		17,353		14,597
Investment income	123,143		145,807		123,333
Investment expenses	(4,886)		(4,574)		(4,299)
Net investment income	$	118,257	$	141,233	$	119,034
NGHC	$	111,001	$	132,595	$	110,159
Reciprocal Exchanges	7,256		8,638		8,875
Net investment income	$	118,257	$	141,233	$	119,034

(d) Net Gain (Loss) on Investments

The table below indicates realized gains and losses on investments. Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method.

	Year Ended December 31,
	2020		2019		2018
Debt securities, available-for-sale:
Gross gains	$	29,666	$	23,178	$	4,590
Gross losses	(1,483)		(3,457)		(22,860)
Net realized gain (loss) on debt securities, available-for-sale	28,183		19,721		(18,270)
Other, net (1)	(1,606)		(6,248)		(11,275)
Net realized gain (loss) on investments	$	26,577	$	13,473	$	(29,545)
NGHC	$	14,145	$	13,603	$	(26,179)
Reciprocal Exchanges	12,432		(130)		(3,366)
Net realized gain (loss) on investments	$	26,577	$	13,473	$	(29,545)

(1) Includes gains and losses on publicly traded equity securities, other investments, and foreign currency.

(e) Credit Quality of Investments

The tables below summarize the credit quality of debt securities, as rated by Standard & Poor’s (“S&P”). If a security is not rated by S&P, an S&P equivalent is determined based on ratings from similar rating agencies. Securities that are not rated are included in the “BB+ and lower” category.

	NGHC						Reciprocal Exchanges
December 31, 2020	Amortized Cost		Fair Value		Percentage		Amortized Cost		Fair Value		Percentage
U.S. Treasury	$	37,307	$	40,213	1.0	%	$	14,441	$	14,734	4.7	%
AAA	523,929		568,028		13.6	%	28,232		28,496		9.2	%
AA, AA+, AA-	1,428,942		1,507,760		36.0	%	150,794		152,059		49.0	%
A, A+, A-	1,106,964		1,167,933		27.9	%	42,283		43,605		14.1	%
BBB, BBB+, BBB-	818,523		888,515		21.2	%	69,325		71,321		23.0	%
BB+ and lower	13,473		14,466		0.3	%	—		—		—	%
Total	$	3,929,138	$	4,186,915	100.0	%	$	305,075	$	310,215	100.0	%

	NGHC						Reciprocal Exchanges
December 31, 2019	Amortized Cost		Fair Value		Percentage		Amortized Cost		Fair Value		Percentage
U.S. Treasury	$	52,108	$	53,599	1.3	%	$	12,929	$	13,407	4.1	%
AAA	515,869		537,508		12.9	%	20,947		21,555		6.6	%
AA, AA+, AA-	1,677,787		1,697,220		40.9	%	120,113		121,720		37.5	%
A, A+, A-	954,312		976,468		23.5	%	116,747		119,041		36.7	%
BBB, BBB+, BBB-	795,594		823,239		19.8	%	48,021		48,093		14.8	%
BB+ and lower	61,831		64,075		1.6	%	433		433		0.3	%
Total	$	4,057,501	$	4,152,109	100.0	%	$	319,190	$	324,249	100.0	%

The tables below summarize the investment quality of the corporate bond holdings and industry concentrations.

December 31, 2020	AAA		AA+, AA, AA-		A+,A,A-		BBB+, BBB, BBB-		BB+ or Lower		Fair Value		% of Corporate Bonds Portfolio
Financial Institutions	—	%	2.3	%	24.1	%	14.1	%	—	%	$	863,046	40.5	%
Industrials	0.3	%	3.2	%	25.5	%	27.6	%	0.1	%	1,208,646		56.7	%
Utilities/Other	—	%	—	%	1.6	%	1.2	%	—	%	61,609		2.8	%
Total	0.3	%	5.5	%	51.2	%	42.9	%	0.1	%	$	2,133,301	100.0	%
NGHC	0.3	%	5.5	%	49.2	%	39.5	%	0.1	%	$	2,018,325	94.6	%
Reciprocal Exchanges	—	%	—	%	2.0	%	3.4	%	—	%	114,976		5.4	%
Total	0.3	%	5.5	%	51.2	%	42.9	%	0.1	%	$	2,133,301	100.0	%

December 31, 2019	AAA		AA+, AA, AA-		A+,A,A-		BBB+, BBB, BBB-		BB+ or Lower		Fair Value		% of Corporate Bonds Portfolio
Financial Institutions	—	%	3.6	%	25.0	%	12.1	%	0.3	%	$	785,910	41.0	%
Industrials	0.7	%	2.7	%	24.1	%	29.0	%	0.1	%	1,083,959		56.6	%
Utilities/Other	—	%	—	%	1.0	%	1.4	%	—	%	46,694		2.4	%
Total	0.7	%	6.3	%	50.1	%	42.5	%	0.4	%	$	1,916,563	100.0	%
NGHC	0.3	%	5.1	%	44.0	%	40.0	%	0.4	%	$	1,720,962	89.8	%
Reciprocal Exchanges	0.4	%	1.2	%	6.1	%	2.5	%	—	%	195,601		10.2	%
Total	0.7	%	6.3	%	50.1	%	42.5	%	0.4	%	$	1,916,563	100.0	%

(f) Cash and Cash Equivalents, Restricted Cash and Restricted Investments

The Company, in order to conduct business in certain states, is required to maintain letters of credit or assets on deposit to support state mandated regulatory requirements and certain third-party agreements. The Company also utilizes trust accounts to collateralize business with its reinsurance counterparties. These assets are held primarily in the form of cash or certain high grade securities.

Cash, cash equivalents, and restricted cash are as follows:

	December 31,
	2020		2019
Cash and cash equivalents	$	662,772	$	135,942
Restricted cash and cash equivalents	36,995		28,521
Total cash, cash equivalents and restricted cash	$	699,767	$	164,463

Restricted investments are as follows:

	December 31,
	2020		2019
Securities on deposit with state regulatory authorities	$	83,764	$	74,061
Restricted investments to trusts in certain reinsurance transactions	26,650		49,502
Total restricted investments	$	110,414	$	123,563

(g) Other Investments

The table below summarizes the composition of other investments:

	December 31,
	2020		2019
Equity method investments (related parties - $101,143 and $109,612)	$	136,201	$	143,511
Notes receivable (related parties - $130,784 and $129,229) (1)	130,824		129,299
Long-term Certificates of Deposit (CDs), at cost	134		20,150
Investments, at fair value	5,936		9,365
Investments, at cost or amortized cost	7,960		8,962
Total	$	281,055	$	311,287

(1) See Note 16, “Related Party Transactions” for additional information.

Equity method investments represent limited liability companies and limited partnership investments in real estate. Investments at fair value include publicly traded equity securities and the Company’s right to receive the excess servicing spread related to servicing rights, for which the Company has elected the fair value option with changes in fair value recorded in net investment income. Investments at cost or amortized cost, represent limited partnerships, loans and trusts. The Company believes its exposure to risk associated with these investments is generally limited to the investment carrying amounts.

Equity Method Investments - Related Parties

A person, who was a significant shareholder of the Company prior to the Merger, also has an ownership interest in AmTrust Financial Services, Inc. (“AmTrust”) and ACP Re Holdings LLC. (“ACP Re”). Accordingly, as of December 31, 2020, AmTrust and ACP Re were related entities of the Company.

Limited Liability Companies and Limited Partnerships

The Company holds a variable interest in the following entities but is not the primary beneficiary of such VIE’s. The Company accounts for these entities using the equity method of accounting. The Company believes its exposure to risk associated with these investments is generally limited to the investment carrying amounts.

LSC Entity

The Company has a 50% ownership interest in an entity (the “LSC Entity”) initially formed to acquire life settlement contracts, with AmTrust owning the remaining 50%. The LSC Entity used the contributed capital to pay premiums and purchase policies. A life settlement contract is a contract between the owner of a life insurance policy and a third party who obtains the ownership and beneficiary rights of the underlying life insurance policy. The LSC Entity has a 30% noncontrolling equity interest in a limited partnership managed by a third party. As of December 31, 2020, the LSC Entity directly held one life settlement contract. The life settlement contract is accounted for using the fair value method.

The Company’s equity interest in the LSC Entity as of December 31, 2020, 2019, and 2018, was $44,847, $49,477 and $48,324, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in earnings (losses) from the LSC Entity of $(5,630), $3,395 and $4,276, respectively, made contributions of $1,000, $258 and $2,000, respectively, and received distributions of $0, $2,500 and $118,635, respectively.

800 Superior, LLC

The Company holds an investment in 800 Superior, LLC, a limited liability company that owns an office building in Cleveland, Ohio, with AmTrust. AmTrust has been appointed managing member of 800 Superior, LLC. The Company and AmTrust each have a 50% ownership interest in 800 Superior, LLC.

The Company’s equity interest in 800 Superior, LLC as of December 31, 2020 and 2019, was $9,559 and $9,365, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in earnings (losses) from 800 Superior, LLC of $194, $1,953 and $(531), respectively, and made contributions of $0, $2,287 and $0, respectively. Additionally, the Company has a lease agreement with 800 Superior, LLC. The Company paid 800 Superior, LLC $3,045, $2,967 and $2,889 in rent for the years ended December 31, 2020, 2019, and 2018, respectively.

North Dearborn Building Company, L.P.

The Company holds an investment in North Dearborn Building Company, L.P. (“North Dearborn”), a limited partnership that owns an office building in Chicago, Illinois. AmTrust is also a limited partner in North Dearborn, and the general partner is NA Advisors GP LLC (“NA Advisors”), a related party, owned by Karfunkel family members which is managed by an unrelated third party. The Company and AmTrust each hold a 45% limited partnership interest in North Dearborn, while NA Advisors holds a 10% general partnership interest and a 10% profit interest, which NA Advisors pays to the unrelated third-party manager. North Dearborn appointed NA Advisors as the general manager to oversee the day-to-day operations of the office building.

The Company’s equity interest in North Dearborn as of December 31, 2020 and 2019, was $5,744 and $5,317, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in earnings (losses) from North Dearborn of $967, $(357) and $(243), respectively, and received distributions of $540, $540 and $1,125, respectively.

4455 LBJ Freeway, LLC

The Company holds an investment in 4455 LBJ Freeway, LLC, a limited liability company that owns an office building in Dallas, Texas, with AmTrust. AmTrust has been appointed managing member of 4455 LBJ Freeway, LLC. The Company and AmTrust each have a 50% ownership interest in 4455 LBJ Freeway, LLC.

The Company’s equity interest in 4455 LBJ Freeway, LLC as of December 31, 2020, and 2019, was $1,677 and $1,074, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in earnings from 4455 LBJ Freeway, LLC of $603, $281 and $53, respectively. Additionally, the Company has a lease agreement with 4455 LBJ Freeway, LLC. The Company paid 4455 LBJ Freeway, LLC $2,482, $2,422 and $2,225 in rent for the years ended December 31, 2020, 2019, and 2018, respectively.

Illinois Center Building, L.P.

The Company holds an investment in Illinois Center Building, L.P. (“Illinois Center”), a limited partnership that owns an office building in Chicago, Illinois. AmTrust and ACP Re are also limited partners in Illinois Center and the general partner is NA Advisors. The Company and AmTrust each hold a 37.5% limited partnership interest in Illinois Center, while ACP Re holds a 15.0% limited partnership interest. NA Advisors holds a 10.0% general partnership interest and a 10.0% profit interest, which NA Advisors pays to the unrelated third-party manager. Illinois Center appointed NA Advisors as the general manager to oversee the day-to-day operations of the office building.

The Company’s equity interest in Illinois Center as of December 31, 2020, and 2019, was $39,316 and $44,379, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in losses from Illinois Center of $(3,188), $(2,321) and $(3,390), made contributions of $0, $1,125 and $2,250, and received distributions of $1,875, $0 and $0, respectively.

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Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company carries certain financial instruments at fair value. Assets and liabilities recorded at fair value in the Consolidated Balance Sheets are measured and classified in accordance with a fair value hierarchy consisting of three “levels” based on the observability of valuation inputs:

Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities as of the measurement date. Additionally, the entity must have the ability to access the active market and the quoted prices cannot be adjusted by the entity.

Level 2 - Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices in active markets for similar assets or liabilities; quoted prices in inactive markets for identical or similar assets or liabilities; or inputs that are observable or can be corroborated by observable market data by correlation or other means for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs are supported by little or no market activity. The unobservable inputs represent management’s best assumptions of how market participants would price the assets or liabilities. Generally, Level 3 assets and liabilities are valued using pricing models, discounted cash flow methodologies, or similar techniques that require significant judgment or estimation.

The following describes the valuation techniques used by the Company to determine the fair value measurements on a recurring basis of financial instruments held as of December 31, 2020 and 2019. The Company utilizes a pricing service (“pricing service”) to estimate fair value measurements for all its debt and equity securities.

Level 1 measurements:

•U.S. Treasury and federal agencies. The fair values of U.S. government securities are based on quoted market prices in active markets. The Company believes the market for U.S. government securities is an actively traded market given the high level of daily trading volume.

•Short-term investments. Comprised of money market funds that are traded in active markets and fair values are based on quoted market prices.

•Other investments, at fair value. Common and preferred equity securities. The pricing service utilizes market quotations for equity securities that have quoted market prices in active markets and their respective quoted prices are provided at fair value.

Level 2 measurements:

•States and political subdivision bonds, and foreign government. The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active.

•Corporate bonds. Comprised of bonds issued by corporations, public and privately placed. The fair values of short-term corporate bonds are priced using the spread above the London Interbank Offering Rate (“LIBOR”) yield curve, and the fair value of long-term corporate bonds are priced using the spread above the risk-free yield curve. The spreads are sourced from broker dealers, trade prices and the new issue market. Where pricing is unavailable from pricing services, the Company obtains non-binding quotes from broker-dealers. The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active.

•Residential and commercial mortgage-backed securities, asset-backed securities and structured securities. The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, prepayment speeds, collateral performance and credit spreads.

Level 3 measurements:

•States and political subdivision bonds. The Company holds certain municipal bonds that finance economic development, infrastructure and environmental projects which do not have an active market. These bonds are valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable.

•Corporate bonds. The Company holds certain structured notes and term loans that do not have an active market. These bonds are valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable.

•Other investments, at fair value. Comprised of the Company’s right to receive the Excess Servicing Spread (“ESS”) related to servicing rights. The Company uses a discounted cash flow method to estimate the fair value of the ESS. The key inputs used in the estimation of ESS include prepayment speed and discount rate. Changes in the fair value of the ESS are recorded in net investment income. From time to time, the Company also holds certain equity securities that are issued by privately-held entities or direct equity investments that do not have an active market. The Company estimates the fair value of these securities primarily based on inputs such as third-party broker quotes, issuers’ book value, market multiples, and other inputs. These bonds are valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable.

Assets measured at fair value on a recurring basis are as follows:

	December 31, 2020
	Level 1		Level 2		Level 3		Total
Debt securities, available-for-sale:
U.S. Treasury	$	54,948	$	—	$	—	$	54,948
Federal agencies	261		—		—		261
States and political subdivision bonds	—		319,921		2,520		322,441
Foreign government	—		1,883		—		1,883
Corporate bonds	—		2,130,977		2,324		2,133,301
Residential mortgage-backed securities	—		1,106,416		—		1,106,416
Commercial mortgage-backed securities	—		654,632		—		654,632
Asset-backed securities	—		28,892		—		28,892
Structured securities	—		194,356		—		194,356
Total debt securities, available-for-sale	55,209		4,437,077		4,844		4,497,130
Short-term investments	171,086		20,000		—		191,086
Other investments	2,907		—		3,029		5,936
Total	$	229,202	$	4,457,077	$	7,873	$	4,694,152
NGHC	$	187,582	$	4,161,595	$	7,873	$	4,357,050
Reciprocal Exchanges	41,620		295,482		—		337,102
Total	$	229,202	$	4,457,077	$	7,873	$	4,694,152

	December 31, 2019
	Level 1		Level 2		Level 3		Total
Debt securities, available-for-sale:
U.S. Treasury	$	67,006	$	—	$	—	$	67,006
Federal agencies	3,915		—		—		3,915
States and political subdivision bonds	—		298,582		3,100		301,682
Foreign government	—		1,802		—		1,802
Corporate bonds	—		1,908,235		8,328		1,916,563
Residential mortgage-backed securities	—		1,277,460		—		1,277,460
Commercial mortgage-backed securities	—		612,193		—		612,193
Asset-backed securities	—		75,611		—		75,611
Structured securities	—		220,126		—		220,126
Total debt securities, available-for-sale:	70,921		4,394,009		11,428		4,476,358
Short-term investments	59,953		7,400		—		67,353
Other investments	4,881		—		4,484		9,365
Total	$	135,755	$	4,401,409	$	15,912	$	4,553,076
NGHC	$	116,602	$	4,091,068	$	15,912	$	4,223,582
Reciprocal Exchanges	19,153		310,341		—		329,494
Total	$	135,755	$	4,401,409	$	15,912	$	4,553,076

During the years ended December 31, 2020, and 2019, there were no transfers between Level 2 and Level 3.

The following tables provide a reconciliation of recurring fair value measurements of the Level 3 financial assets:

	States and political subdivision bonds		Corporate bonds		Other investments		Total
Balance as of January 1, 2020	$	3,100	$	8,328	$	4,484	$	15,912
Total gains (losses) for the period:
Included in net income	—		—		(531)		(531)
Included in other comprehensive income	(580)		(6,004)		—		(6,584)
Sales	—		—		(924)		(924)
Balance as of December 31, 2020	$	2,520	$	2,324	$	3,029	$	7,873
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period					$	(531)	$	(531)
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period	$	(580)	$	(6,004)			$	(6,584)

	States and political subdivision bonds		Corporate bonds		Other investments		Total
Balance as of January 1, 2019	$	3,596	$	11,767	$	7,593	$	22,956
Total gains (losses) for the period:
Included in net income	—		—		(1,851)		(1,851)
Included in other comprehensive income	(496)		(3,439)		—		(3,935)
Sales	—		—		(1,258)		(1,258)
Balance as of December 31, 2019	$	3,100	$	8,328	$	4,484	$	15,912
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period					$	(1,851)	$	(1,851)
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period	$	(496)	$	(3,439)			$	(3,935)

At December 31, 2020, and 2019, the carrying values of the Company’s cash and cash equivalents, premiums and other receivables, and accounts payable approximate the fair value given their short-term nature and were classified as Level 1. Other than goodwill, the Company did not measure any assets or liabilities at fair value on a nonrecurring basis at December 31, 2020, and 2019. Goodwill is classified as Level 3 in the fair value hierarchy. See Note 8, “Goodwill and Intangible Assets” for additional information on how the Company tested goodwill for impairment.

Fair Value Information About Financial Liabilities not Measured at Fair Value

Debt - The amount reported in the accompanying Consolidated Balance Sheets for these financial instruments represents the carrying value of the debt. See Note 11, “Debt” for additional information.

The following table presents the carrying amount and estimated fair value of debt not carried at fair value, excluding finance lease and other liabilities, as well as the input level used to determine the fair value:

		December 31, 2020				December 31, 2019
	Input Level	Carrying amount		Fair value		Carrying amount		Fair value
7.625% Notes	Level 2	$	97,015	$	101,400	$	96,928	$	103,560
6.75% Notes	Level 3	347,743		386,275		347,091		371,366
Subordinated Debentures	Level 3	72,168		72,139		72,168		72,103
2019 Credit Agreement	Level 3	140,000		144,063		140,000		148,272

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Deferred Acquisition Costs

12 Months Ended

Dec. 31, 2020

Deferred Policy Acquisition Costs Disclosures [Abstract]

Deferred Acquisition Costs

Deferred Acquisition Costs

The following table reflects the amounts of policy acquisition costs deferred and amortized:

	Year Ended December 31,
	2020						2019						2018
	Property and Casualty		Accident and Health		Total		Property and Casualty		Accident and Health		Total		Property and Casualty		Accident and Health		Total
Balance, beginning of the year	$	239,293	$	24,230	$	263,523	$	226,188	$	25,220	$	251,408	$	198,283	$	18,106	$	216,389
Additions	633,775		24,420		658,195		552,921		39,491		592,412		522,914		22,898		545,812
Amortization	(613,905)		(21,908)		(635,813)		(539,816)		(37,541)		(577,357)		(495,009)		(15,784)		(510,793)
Disposition	—		—		—		—		(2,940)		(2,940)		—		—		—
Change in DAC	19,870		2,512		22,382		13,105		(990)		12,115		27,905		7,114		35,019
End of the year	$	259,163	$	26,742	$	285,905	$	239,293	$	24,230	$	263,523	$	226,188	$	25,220	$	251,408
NGHC	$	239,963	$	26,742	$	266,705	$	215,986	$	24,230	$	240,216	$	206,181	$	25,220	$	231,401
Reciprocal Exchanges	19,200		—		19,200		23,307		—		23,307		20,007		—		20,007
Balance, end of the year	$	259,163	$	26,742	$	285,905	$	239,293	$	24,230	$	263,523	$	226,188	$	25,220	$	251,408

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Property and Equipment

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

The composition of property and equipment consisted of the following:

	December 31,
	2020						2019
	Cost		Accumulated Depreciation		Net Value		Cost		Accumulated Depreciation		Net Value
Land	$	5,788	$	—	$	5,788	$	5,788	$	—	$	5,788
Buildings	26,245		(3,416)		22,829		24,997		(2,669)		22,328
Leasehold improvements	39,591		(17,305)		22,286		34,238		(12,372)		21,866
Other equipment	26,909		(3,916)		22,993		24,627		(3,044)		21,583
Hardware and software	417,970		(241,420)		176,550		387,618		(196,294)		191,324
Finance lease right-of-use assets	38,867		(22,631)		16,236		37,515		(16,511)		21,004
Operating lease right-of-use assets	111,001		—		111,001		119,934		—		119,934
Total	$	666,371	$	(288,688)	$	377,683	$	634,717	$	(230,890)	$	403,827
NGHC	$	657,312	$	(279,629)	$	377,683	$	625,658	$	(222,072)	$	403,586
Reciprocal Exchanges	9,059		(9,059)		—		9,059		(8,818)		241
Total	$	666,371	$	(288,688)	$	377,683	$	634,717	$	(230,890)	$	403,827

Depreciation and amortization expense related to property and equipment for the years ended December 31, 2020, 2019, and 2018, was $59,926, $61,965 and $55,928, respectively.

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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill and intangible assets, net of amortization, are recorded as a consequence of business acquisitions. Goodwill represents the excess, if any, of the purchase price over the fair value of their net assets as of the date of acquisition. Intangible assets are recorded at their fair value as of the acquisition date. Intangible assets that are not deemed to have an indefinite useful life are amortized over their estimated useful lives. Goodwill and intangible assets that have an indefinite useful life are not subject to amortization.

Goodwill and intangible assets deemed to have an indefinite useful life are tested annually in the fourth quarter of every year for impairment. Goodwill and intangible assets are also tested whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. If it is determined that an asset has been impaired, the asset is written down by the amount of the impairment, with a corresponding charge to earnings.

With respect to goodwill, a qualitative assessment is first made to determine whether it is necessary to perform quantitative testing. This initial assessment includes, among other factors, consideration of: (i) past, current and projected future earnings and equity; (ii) recent trends and market conditions; and (iii) valuation metrics involving similar companies that are publicly-traded and acquisitions of similar companies, if available. If this initial qualitative assessment indicates that the fair value of an operating segment may be less than its carrying amount, a second step is taken, involving a comparison between the estimated fair values of the Company’s operating subsidiary with its respective carrying amount including goodwill. If the carrying value exceeds estimated fair value, there is an indication of impairment. As of December 31, 2020, there were no circumstances that indicate that the carrying amount of goodwill and intangible assets deemed to have an indefinite useful life may not be recoverable.

The composition of intangible assets and loss reserve premium consisted of the following:

December 31, 2020	Gross Balance		Accumulated Amortization		Net Value		Weighted-average amortization period
Agent/Customer relationships	$	175,352	$	(90,986)	$	84,366	6.7 years
Renewal rights	33,565		(29,351)		4,214		0.7 years
Other intangibles	47,711		(33,491)		14,220		2.9 years
Total intangible assets subject to amortization	256,628		(153,828)		102,800		5.2 years
Management contracts	118,600		—		118,600		indefinite life
State licenses	89,325		—		89,325		indefinite life
Trademarks	30,000		—		30,000		indefinite life
Total intangible assets	$	494,553	$	(153,828)	$	340,725
NGHC	$	490,653	$	(152,973)	$	337,680
Reciprocal Exchanges	3,900		(855)		3,045
Total intangible assets	$	494,553	$	(153,828)	$	340,725
Net loss reserve plus a risk premium (1)	$	(17,266)	$	14,977	$	(2,289)	0.8 years
Total	$	(17,266)	$	14,977	$	(2,289)
NGHC	$	(13,253)	$	10,998	$	(2,255)
Reciprocal Exchanges	(4,013)		3,979		(34)
Total	$	(17,266)	$	14,977	$	(2,289)

December 31, 2019	Gross Balance		Accumulated Amortization		Net Value
Agent/Customer relationships	$	175,157	$	(76,156)	$	99,001
Renewal rights	48,566		(41,257)		7,309
Other intangibles	49,511		(27,923)		21,588
Total intangible assets subject to amortization	273,234		(145,336)		127,898
Management contracts	118,600		—		118,600
State licenses	89,325		—		89,325
Trademarks	30,000		—		30,000
Total intangible assets	$	511,159	$	(145,336)	$	365,823
NGHC	$	507,259	$	(144,661)	$	362,598
Reciprocal Exchanges	3,900		(675)		3,225
Total intangible assets	$	511,159	$	(145,336)	$	365,823
Net loss reserve plus a risk premium (1)	$	(17,266)	$	9,947	$	(7,319)
Total	$	(17,266)	$	9,947	$	(7,319)
NGHC	$	(13,253)	$	6,017	$	(7,236)
Reciprocal Exchanges	(4,013)		3,930		(83)
Total	$	(17,266)	$	9,947	$	(7,319)

(1) Net loss reserve plus a risk premium is recorded as a liability.

Intangible assets amortization expense consisted of the following:

	Year Ended December 31,
	2020		2019		2018
Amortization	$	25,798	$	39,024	$	31,999
Amortization of loss reserve premium	(5,030)		(4,288)		(632)
Total	$	20,768	$	34,736	$	31,367
NGHC	$	20,637	$	34,665	$	31,323
Reciprocal Exchanges	131		71		44
Total	$	20,768	$	34,736	$	31,367

The estimated aggregate amortization expense for each of the next five years and thereafter is:

Year ending	NGHC		Reciprocal Exchanges		Total
2021	$	16,609	$	23	$	16,632
2022	14,657		(9)		14,648
2023	12,386		(3)		12,383
2024	11,452		—		11,452
2025	10,989		—		10,989
Thereafter	34,407		—		34,407
Total	$	100,500	$	11	$	100,511

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Unpaid Losses and Loss Adjustment Expense Reserves

12 Months Ended

Dec. 31, 2020

Insurance [Abstract]

Unpaid Losses and Loss Adjustment Expense Reserves

Unpaid Losses and Loss Adjustment Expense Reserves

The unpaid losses and Loss Adjustment Expense (“LAE”) reserves are an estimate of the Company’s liability from incurred claims at the end of the reporting period. The unpaid losses and LAE reserves are the result of an ongoing analysis of recent loss development trends and emerging historical experience. Original estimates are increased or decreased as additional information becomes known regarding individual claims. In setting its reserves, the Company reviews its loss data to estimate expected loss development. Management believes that its use of standard actuarial methodology applied to its analyses of its historical experience provides a reasonable estimate of future losses. However, actual future losses may differ from the Company’s estimate, and may be affected by future events beyond the control of management, including inflation, which may favorably or unfavorably impact the ultimate settlement of the Company’s losses and LAE, as well as changes in the law and judicial interpretations.

The anticipated effect of inflation is implicitly considered when estimating liabilities for losses and LAE. In addition to inflation, the average severity of claims is affected by a number of factors that may vary by types and features of policies written. Future average severities are projected from historical trends, adjusted for implemented changes in underwriting standards and policy provisions, as well as general economic trends. These estimated trends are monitored and revised as necessary based on actual development.

The following tables present a reconciliation of beginning and ending balances for unpaid losses and LAE:

	Year Ended December 31, 2020
	Property and Casualty		Accident and Health		NGHC		Reciprocal Exchanges		Total
Gross balance at beginning of the year	$	2,528,754	$	151,874	$	2,680,628	$	205,786	$	2,886,414
Less: Reinsurance recoverable at beginning of the year	(1,016,368)		(11,266)		(1,027,634)		(84,174)		(1,111,808)
Net balance at beginning of the year	1,512,386		140,608		1,652,994		121,612		1,774,606
Incurred losses and LAE related to:
Current year	2,323,797		342,714		2,666,511		153,380		2,819,891
Prior year	27,042		(23,821)		3,221		970		4,191
Total incurred	2,350,839		318,893		2,669,732		154,350		2,824,082
Paid losses and LAE related to:
Current year	(1,432,498)		(209,319)		(1,641,817)		(94,287)		(1,736,104)
Prior year	(827,745)		(90,952)		(918,697)		(53,317)		(972,014)
Total paid	(2,260,243)		(300,271)		(2,560,514)		(147,604)		(2,708,118)
Net balance at end of the year	1,602,982		159,230		1,762,212		128,358		1,890,570
Plus: Reinsurance recoverable at end of the year	899,217		21,697		920,914		77,614		998,528
Gross balance at end of the year	$	2,502,199	$	180,927	$	2,683,126	$	205,972	$	2,889,098

	Year Ended December 31, 2019
	Property and Casualty		Accident and Health		NGHC		Reciprocal Exchanges		Total
Gross balance at beginning of the year	$	2,507,409	$	271,280	$	2,778,689	$	178,470	$	2,957,159
Less: Reinsurance recoverable at beginning of the year	(1,182,588)		(24,575)		(1,207,163)		(77,979)		(1,285,142)
Net balance at beginning of the year	1,324,821		246,705		1,571,526		100,491		1,672,017
Incurred losses and LAE related to:
Current year	2,320,053		356,036		2,676,089		173,215		2,849,304
Prior year	46,623		(45,356)		1,267		3,897		5,164
Total incurred	2,366,676		310,680		2,677,356		177,112		2,854,468
Paid losses and LAE related to:
Current year	(1,430,072)		(219,234)		(1,649,306)		(111,380)		(1,760,686)
Prior year	(841,613)		(109,653)		(951,266)		(44,611)		(995,877)
Total paid	(2,271,685)		(328,887)		(2,600,572)		(155,991)		(2,756,563)
Acquired losses and LAE reserves	92,574		—		92,574		—		92,574
Disposed losses and LAE reserves	—		(87,890)		(87,890)		—		(87,890)
Net balance at end of the year	1,512,386		140,608		1,652,994		121,612		1,774,606
Plus: Reinsurance recoverable at end of the year	1,016,368		11,266		1,027,634		84,174		1,111,808
Gross balance at end of the year	$	2,528,754	$	151,874	$	2,680,628	$	205,786	$	2,886,414

	Year Ended December 31, 2018
	Property and Casualty		Accident and Health		NGHC		Reciprocal Exchanges		Total
Gross balance at beginning of the year	$	2,270,551	$	249,653	$	2,520,204	$	143,353	$	2,663,557
Less: Reinsurance recoverable at beginning of the year	(1,067,495)		(9,840)		(1,077,335)		(52,408)		(1,129,743)
Net balance at beginning of the year	1,203,056		239,813		1,442,869		90,945		1,533,814
Incurred losses and LAE related to:
Current year	2,182,923		352,322		2,535,245		161,015		2,696,260
Prior year	(4,760)		(30,977)		(35,737)		1,703		(34,034)
Total incurred	2,178,163		321,345		2,499,508		162,718		2,662,226
Paid losses and LAE related to:
Current year	(1,336,359)		(188,014)		(1,524,373)		(110,053)		(1,634,426)
Prior year	(720,039)		(117,653)		(837,692)		(43,119)		(880,811)
Total paid	(2,056,398)		(305,667)		(2,362,065)		(153,172)		(2,515,237)
Unrealized foreign exchange gain	—		(8,786)		(8,786)		—		(8,786)
Net balance at end of the year	1,324,821		246,705		1,571,526		100,491		1,672,017
Plus: Reinsurance recoverable at end of the year	1,182,588		24,575		1,207,163		77,979		1,285,142
Gross balance at end of the year	$	2,507,409	$	271,280	$	2,778,689	$	178,470	$	2,957,159

Gross unpaid losses and loss adjustment expense reserves at December 31, 2019, decreased by $70,745 from December 31, 2018, primarily reflecting lower reserves from catastrophic events.

Prior Year Loss Development, Net of Reinsurance

Prior year loss development is based upon numerous estimates by line of business and accident year. No additional premiums or return premiums have been accrued as a result of the prior year effects.

2020. Loss and LAE for the year ended December 31, 2020, included $4,191 of unfavorable loss development on prior accident year loss and LAE reserves. The $28,012 of unfavorable loss development in the property and casualty segment (including $970 of unfavorable loss development for the Reciprocal Exchanges) was primarily driven by adverse development in the small business auto product line, while the $23,821 of favorable loss development in the accident and health segment was primarily driven by lower than expected loss ratios in the group segment. The changes in our estimates of ultimate claims costs was the result of ongoing analysis of loss emergence.

2019. Loss and LAE for the year ended December 31, 2019, included $5,164 of unfavorable loss development on prior accident year loss and LAE reserves. The $50,520 of unfavorable loss development in the property and casualty segment (including $3,897 of unfavorable loss development for the Reciprocal Exchanges), was primarily driven by adverse development in the small business auto product line, while the $45,356 of favorable loss development in the accident and health segment was primarily driven by overall improvement in loss ratio estimates.

2018. Loss and LAE for the year ended December 31, 2018, included $34,034 of favorable loss development on prior accident year loss and LAE reserves driven by $3,057 of favorable loss development in the property and casualty segment (including $1,703 of unfavorable loss development for the Reciprocal Exchanges), and $30,977 of favorable loss development in the accident and health segment primarily driven by favorable loss development in the domestic accident and health stop loss and short-term medical products.

Short-duration contracts

The following is information by reserving subgroups within segments about incurred and paid claims development as of December 31, 2020, net of reinsurance, as well as cumulative claim frequency and the total of incurred-but-not-reported liabilities (“IBNR”) plus expected development on reported claims included within the net incurred claims amounts. The information about incurred and paid claims development for the years ended prior to December 31, 2020, is presented as unaudited supplementary information.

Property and Casualty - auto liability, including recreational vehicles and motorcycles:

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	490,230	$	485,762	$	489,010	$	494,922	$	493,873	$	497,109	$	497,324	$	496,408	$	497,424	$	497,712	$	522	238,319
2012			511,797		522,296		529,140		527,386		528,090		527,531		529,885		531,887		533,045		281		249,890
2013					544,833		556,262		556,290		563,834		567,410		572,538		575,521		575,264		287		250,134
2014							740,531		759,577		760,566		766,640		779,992		783,869		786,619		572		270,161
2015									820,213		838,040		849,051		872,064		892,244		901,823		3,434		291,921
2016											932,350		940,849		976,749		1,005,184		1,017,124		13,710		302,083
2017													929,211		912,370		941,837		968,645		16,952		296,226
2018															1,047,041		1,033,488		1,054,906		79,287		309,025
2019																	1,162,750		1,153,160		169,765		406,201
2020																			1,106,907		455,534		293,834
Total (A)																			$	8,595,205

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	224,676	$	385,749	$	442,365	$	468,059	$	482,861	$	489,191	$	494,145	$	495,833	$	496,680	$	497,044
2012			242,285		413,018		470,515		501,819		518,079		523,703		527,695		530,570		532,182
2013					259,665		440,751		504,569		540,497		559,064		567,949		571,643		573,312
2014							342,710		601,980		694,002		728,256		757,933		773,124		780,972
2015									385,592		679,461		761,150		820,007		864,226		884,717
2016											400,052		737,927		855,407		937,997		978,785
2017													392,084		706,151		832,553		902,264
2018															429,231		777,888		889,127
2019																	470,341		833,977
2020																			425,674
Total (B)																			$	7,298,054
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			1,915
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	1,299,066

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Property and Casualty - auto liability, including recreational vehicles and motorcycles	41.6	%	32.9	%	11.5	%	6.8	%	3.7	%	1.8	%	0.9	%	0.4	%	0.2	%	0.2	%

Property and Casualty - auto physical damage, including recreational vehicles, motorcycles and lender placed auto:

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	315,273	$	308,729	$	308,298	$	308,486	$	308,760	$	308,512	$	308,536	$	308,249	$	308,132	$	308,142	$	(2)	298,034
2012			308,056		298,208		295,984		296,257		296,050		295,970		295,026		294,710		294,697		(10)		292,486
2013					335,454		329,049		328,748		328,284		328,262		328,010		327,506		327,503		(26)		285,750
2014							496,227		487,302		486,206		486,383		486,373		486,156		486,146		16		311,603
2015									541,008		544,097		544,769		544,510		544,684		544,677		4		329,111
2016											626,643		622,456		621,717		620,546		620,692		(414)		337,873
2017													600,813		570,699		567,411		566,641		370		385,080
2018															548,063		526,092		530,023		(472)		360,454
2019																	577,970		552,692		2,482		370,057
2020																			560,894		18,588		351,548
Total (A)																			$	4,792,107

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	283,501	$	308,824	$	308,634	$	308,608	$	308,578	$	308,571	$	308,557	$	308,266	$	308,131	$	308,145
2012			268,989		298,381		295,978		295,975		296,029		295,995		294,975		294,702		294,699
2013					291,064		328,832		328,456		328,299		328,280		327,976		327,510		327,522
2014							430,998		487,531		486,364		486,309		486,251		486,108		486,080
2015									478,268		544,754		544,707		544,485		544,699		544,652
2016											542,970		622,930		621,529		621,181		620,963
2017													533,907		568,639		566,918		566,181
2018															483,149		532,083		530,330
2019																	512,072		549,540
2020																			517,035
Total (B)																			$	4,745,147
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			(15)
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	46,945

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Property and Casualty - auto physical damage, including recreational vehicles, motorcycles and lender placed auto	90.6	%	9.6	%	(0.1)	%	—	%	—	%	—	%	(0.1)	%	—	%	—	%	—	%

Property and Casualty - homeowners & other property, including lender placed homeowners:

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	506,352	$	499,170	$	498,050	$	498,184	$	497,244	$	495,246	$	494,825	$	495,170	$	495,148	$	495,156	$	1	107,871
2012			485,454		480,353		478,880		477,577		476,538		474,649		476,166		475,792		475,990		7		112,061
2013					306,761		300,868		299,561		296,618		296,907		296,756		296,760		297,159		66		75,918
2014							318,488		306,471		303,925		304,496		304,237		304,350		304,934		279		73,498
2015									357,023		349,559		351,747		353,688		351,305		351,590		1,152		69,920
2016											350,737		341,762		340,711		343,525		344,763		1,481		61,047
2017													402,798		365,092		370,068		362,176		2,096		59,284
2018															327,462		328,721		327,525		4,192		73,117
2019																	247,760		256,369		16,533		66,710
2020																			352,477		52,664		48,924
Total (A)																			$	3,568,139

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	314,139	$	457,480	$	485,054	$	489,778	$	493,408	$	494,198	$	494,525	$	494,904	$	494,922	$	494,950
2012			300,271		452,589		466,266		471,084		473,190		473,781		475,765		475,762		475,964
2013					219,937		279,743		289,302		293,101		295,332		296,383		296,442		296,567
2014							198,781		278,255		289,456		297,640		301,742		303,100		303,660
2015									233,264		319,284		336,921		342,156		345,257		346,554
2016											227,650		320,564		331,102		337,889		341,037
2017													258,234		338,065		349,600		355,265
2018															227,908		298,212		315,302
2019																	172,462		226,895
2020																			249,268
Total (B)																			$	3,405,462
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			930
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	163,607

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Property and Casualty - homeowners & other property, including lender placed homeowners	67.3	%	25.1	%	4.4	%	1.5	%	0.8	%	0.3	%	0.4	%	0.1	%	0.1	%	—	%

Accident and Health:

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	4,804	$	4,483	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	—	8,139
2012			4,400		4,227		4,161		4,161		4,161		4,110		4,110		4,110		4,110		—		7,630
2013					23,253		28,578		26,457		26,361		26,272		26,274		26,274		26,265		—		34,173
2014							52,245		52,694		52,311		52,026		52,022		52,034		52,028		—		69,716
2015									176,104		184,586		181,536		181,740		181,717		181,678		—		242,669
2016											215,097		200,817		202,155		201,722		201,850		1		320,319
2017													211,293		186,415		182,865		182,809		135		302,098
2018															234,558		205,152		203,238		364		269,021
2019																	256,745		239,017		4,726		304,234
2020																			296,453		112,869		262,469
Total (A)																			$	1,391,929

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	2,528	$	4,469	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481
2012			3,330		4,095		4,110		4,110		4,161		4,110		4,110		4,110		4,110
2013					15,421		25,754		26,327		26,242		26,154		26,155		26,155		26,147
2014							31,765		52,053		52,405		52,147		52,140		52,153		52,147
2015									123,576		178,918		181,459		181,719		181,696		181,678
2016											125,845		196,421		201,720		201,549		201,849
2017													104,809		178,047		181,519		182,674
2018															126,269		201,457		202,874
2019																	158,345		234,291
2020																			183,585
Total (B)																			$	1,273,836
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			—
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	118,093

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Accident and Health	62.9	%	35.3	%	1.6	%	0.1	%	0.1	%	—	%	—	%	(0.4)	%	0.3	%	—	%

Reciprocal Exchanges - auto liability:

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	47,666	$	47,834	$	47,459	$	48,841	$	51,107	$	50,898	$	50,998	$	51,161	$	51,247	$	50,703	$	—	5,065
2012			44,834		47,275		48,044		48,665		50,370		50,767		50,303		50,538		50,606		—		4,999
2013					43,684		44,341		45,479		50,180		51,263		49,854		50,595		50,810		—		5,097
2014							38,656		40,850		45,930		48,246		49,168		49,369		50,055		—		4,873
2015									35,573		33,409		34,390		34,615		34,268		34,962		—		4,335
2016											24,619		24,460		26,109		24,310		24,657		356		4,005
2017													26,214		28,762		28,804		29,806		1,244		4,949
2018															32,339		33,891		35,870		3,540		6,127
2019																	49,757		50,212		11,727		6,262
2020																			40,757		18,459		3,383
Total (A)																			$	418,438

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	15,857	$	26,603	$	35,911	$	41,931	$	46,559	$	49,570	$	50,481	$	50,979	$	51,121	$	50,676
2012			13,568		29,286		37,241		42,768		46,358		48,990		49,836		50,090		50,504
2013					14,683		29,218		35,105		41,787		47,449		48,449		49,605		50,432
2014							13,925		26,070		32,382		39,328		46,001		48,389		49,602
2015									11,910		19,501		24,614		29,538		31,587		33,223
2016											7,516		13,478		16,994		20,567		22,500
2017													9,111		17,136		19,529		23,838
2018															10,755		19,471		24,985
2019																	15,504		28,210
2020																			13,567
Total (B)																			$	347,537
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			27
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	70,928

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Reciprocal Exchanges - auto liability	30.2	%	25.1	%	13.9	%	13.0	%	9.6	%	4.6	%	2.3	%	0.9	%	0.7	%	(0.3)	%

Reciprocal Exchanges - auto physical damage:

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	26,936	$	26,055	$	26,022	$	26,060	$	26,037	$	26,029	$	26,023	$	26,028	$	26,028	$	26,027	$	—	12,041
2012			25,752		26,459		26,189		25,914		25,842		25,841		25,845		25,842		25,820		—		11,301
2013					23,375		25,214		25,292		24,709		24,703		24,704		24,704		24,704		—		11,066
2014							29,240		27,424		25,806		25,588		25,882		26,074		26,074		—		11,526
2015									21,247		18,592		18,673		18,789		18,842		18,890		—		10,281
2016											12,270		12,921		12,985		13,213		13,197		—		8,740
2017													15,301		15,410		15,612		15,490		(5)		10,682
2018															19,146		19,272		19,200		108		13,615
2019																	27,212		27,585		(51)		14,549
2020																			21,240		(810)		10,027
Total (A)																			$	218,227

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	28,274	$	26,269	$	26,106	$	26,056	$	26,037	$	26,033	$	26,027	$	26,028	$	26,028	$	26,027
2012			23,760		26,651		26,172		25,914		25,854		25,850		25,845		25,842		25,817
2013					22,651		25,088		24,549		24,725		24,716		24,704		24,704		24,704
2014							24,528		26,165		25,772		25,427		25,685		25,946		26,071
2015									19,080		18,797		18,750		18,748		18,719		18,730
2016											12,579		13,147		13,080		13,137		13,114
2017													15,438		16,141		15,500		15,495
2018															18,925		19,246		19,093
2019																	27,974		27,632
2020																			21,633
Total (B)																			$	218,316
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			—
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	(89)

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Reciprocal Exchanges - auto physical damage	98.4	%	2.6	%	(1.3)	%	0.2	%	—	%	—	%	—	%	—	%	—	%	—	%

Reciprocal Exchanges - homeowners & other property:

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	38,470	$	28,869	$	28,511	$	28,209	$	27,954	$	27,950	$	28,002	$	28,075	$	28,095	$	28,144	$	—	6,652
2012			25,289		20,625		21,184		19,971		20,403		20,876		20,251		20,301		20,283		—		8,427
2013					22,638		21,232		20,132		20,309		20,615		20,367		23,109		22,649		—		3,165
2014							27,706		24,846		25,625		26,614		27,141		27,231		27,212		—		4,232
2015									30,081		21,031		21,527		22,007		21,881		22,714		—		5,455
2016											36,838		35,274		34,851		34,501		34,655		78		4,799
2017													48,222		50,871		51,852		51,477		648		8,830
2018															76,925		78,166		77,582		1,471		12,998
2019																	65,888		65,380		3,312		12,238
2020																			68,723		10,427		9,349
Total (A)																			$	418,819

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	21,474	$	24,997	$	25,799	$	26,700	$	27,661	$	27,656	$	27,692	$	27,758	$	27,803	$	27,825
2012			11,087		18,021		19,367		19,847		19,961		20,668		20,121		20,256		20,238
2013					11,277		17,435		18,107		19,104		19,653		19,626		20,232		22,731
2014							15,344		22,834		23,820		25,230		26,170		27,003		27,115
2015									12,979		18,518		19,834		20,339		20,733		21,994
2016											20,978		30,615		31,632		32,933		33,399
2017													33,166		46,003		47,517		49,506
2018															55,519		69,672		72,859
2019																	45,432		58,788
2020																			44,371
Total (B)																			$	378,826
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			2,658
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	42,651

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Reciprocal Exchanges - homeowners & other property	64.9	%	22.8	%	3.3	%	2.5	%	1.3	%	1.8	%	1.0	%	0.8	%	0.5	%	1.1	%

The reconciliation of the net incurred and paid claims development tables to the liability for unpaid loss and LAE reserves is as follows:

	December 31, 2020
Net outstanding liabilities:
Property and Casualty - Auto Liability	$	1,299,066
Property and Casualty - Auto Physical Damage	46,945
Property and Casualty - Homeowners and Other Property	163,607
Accident and Health	118,093
Reciprocal Exchanges - Auto Liability	70,928
Reciprocal Exchanges - Auto Physical Damage	(89)
Reciprocal Exchanges - Homeowners and Other Property	42,651
Net reserve for claims and allocated claim adjustment expenses	$	1,741,201
Reinsurance recoverable(1):
Property and Casualty - Auto Liability	$	766,929
Property and Casualty - Auto Physical Damage	8,198
Property and Casualty - Homeowners and Other Property	124,090
Accident and Health	21,697
Reciprocal Exchanges - Auto Liability	28,745
Reciprocal Exchanges - Auto Physical Damage	557
Reciprocal Exchanges - Homeowners and Other Property	48,312
Reinsurance recoverable on unpaid claims and allocated claim adjustment expenses	$	998,528
Insurance lines other than short-duration	$	35,688
Acquisition	17,488
Unallocated claims adjustment expenses (“ULAE”)	96,193
Subtotal	$	149,369
Gross reserve for claims and claim adjustment expenses	$	2,889,098

(1) Includes $535,433 from MCCA and $157,611 from NCRF. See Note 10, “Reinsurance” for additional information.

The reconciliation of the net incurred and paid loss information in the loss reserve rollforward table and loss development tables with respect to the current accident year is as follows:

	2020 - Current Accident Year Incurred								2020 - Current Accident Year Paid
	Property and Casualty		Accident and Health		Reciprocal Exchanges		Total		Property and Casualty		Accident and Health		Reciprocal Exchanges		Total
Rollforward table	$	2,323,797	$	342,714	$	153,380	$	2,819,891	$	1,432,498	$	209,319	$	94,287	$	1,736,104
Development tables	2,020,278		296,453		130,720		2,447,451		1,191,977		183,585		79,571		1,455,133
Variance	$	303,519	$	46,261	$	22,660	$	372,440	$	240,521	$	25,734	$	14,716	$	280,971
Unallocated claims adjustment expenses	$	303,112	$	15,883	$	22,660	$	341,655	$	240,263	$	10,539	$	14,716	$	265,518
Long-duration contracts	—		30,789		—		30,789		—		15,449		—		15,449
Other	407		(411)		—		(4)		258		(254)		—		4
Variance	$	303,519	$	46,261	$	22,660	$	372,440	$	240,521	$	25,734	$	14,716	$	280,971

The reconciliation of the net incurred and paid loss information in the loss reserve rollforward table and loss development tables with respect to the prior accident year is as follows:

	2020 - Prior Accident Year Incurred								2020 - Prior Accident Year Paid
	Property and Casualty		Accident and Health		Reciprocal Exchanges		Total		Property and Casualty		Accident and Health		Reciprocal Exchanges		Total
Rollforward table	$	27,042	$	(23,821)	$	970	$	4,191	$	827,745	$	90,952	$	53,317	$	972,014
Development tables	44,333		(19,624)		4,162		28,871		734,614		78,786		50,568		863,968
Variance	$	(17,291)	$	(4,197)	$	(3,192)	$	(24,680)	$	93,131	$	12,166	$	2,749	$	108,046
Unallocated claims adjustment expenses	$	(8,881)	$	(1,285)	$	(3,586)	$	(13,752)	$	58,163	$	3,395	$	2,556	$	64,114
Accident years prior to 2011	(493)		—		394		(99)		1,442		—		193		1,635
Long-duration contracts	—		(2,912)		—		(2,912)		—		8,771		—		8,771
Acquisition	(7,917)		—		—		(7,917)		33,526		—		—		33,526
Variance	$	(17,291)	$	(4,197)	$	(3,192)	$	(24,680)	$	93,131	$	12,166	$	2,749	$	108,046

The $44,333 of unfavorable prior year loss development for Property and Casualty on a combined basis for the incurred loss development tables relates to Loss and Allocated Claims Adjustment Expenses (“ALAE”), which does not include ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. The reserve rollforward table shows prior year loss development for Loss and LAE, which includes loss development from ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. Favorable prior year loss development of $17,291 in total attributable to liabilities excluded from the incurred loss development tables resulted in total P&C Loss and LAE unfavorable prior year loss development of $27,042 shown in the reserve rollforward table.

The $19,624 of favorable prior year loss development for Accident and Health shown in the incurred loss development table relates to Loss and ALAE, which does not include ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. The reserve rollforward table shows prior year loss development for Loss and LAE, which includes prior year loss development from ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. Favorable prior year loss development of $4,197 in total attributable to liabilities excluded from the incurred loss development table resulted in total Accident and Health Loss and LAE favorable prior year loss development of $23,821 shown in the reserve rollforward table.

The $4,162 of unfavorable prior year loss development for the Reciprocal Exchanges on a combined basis for the incurred loss development tables relates to Loss and ALAE, which does not include ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. The reserve rollforward table shows prior year loss development for Loss and LAE, which includes loss development from ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. Favorable prior year loss development of $3,192 in total attributable to liabilities excluded from the incurred loss development tables resulted in total Reciprocal Exchanges Loss and LAE unfavorable prior year loss development of $970 shown in the reserve rollforward table.

Methodology for Estimating Incurred-But-Not-Reported Reserves

Loss and LAE reserves represent management's estimate of the ultimate liability for claims that have been reported and claims that have been incurred but not yet reported as of the balance sheet date. Because the establishment of loss and LAE reserves is a process involving estimates and judgment, currently estimated reserves may change. The Company reflects changes to the reserves in the results of operations for the period during which the estimates are changed.

Incurred-but-not-reported reserve estimates are generally calculated by first projecting the ultimate cost of all claims that have occurred and then subtracting reported losses and loss expenses. Reported losses include cumulative paid losses and loss expenses plus case reserves. Therefore, the IBNR also includes provision for expected development on reported claims.

The Company’s internal actuarial analysis of the historical data provides the factors the Company uses in its actuarial analysis in estimating its loss and LAE reserves. These factors are implicit measures over time of claims reported, average case incurred amounts, case development, severity and payment patterns. However, these factors cannot be directly used as they do not take into consideration changes in business mix, claims management, regulatory issues, medical trends, and other subjective factors. In accordance with Actuarial Standards of Practice, the Company generally uses multiple traditional methods in determining our estimates of the ultimate unpaid claim liabilities. Each of these methods require actuarial judgment and assumptions. The techniques can include, but are not limited to:

•Paid Development Method - uses historical, cumulative paid losses by accident year and develops those actual losses to estimated ultimate losses based upon the assumption that each accident year will develop to estimated ultimate cost in a manner that is analogous to prior years.

•Paid Generalized Cape Cod Method - combines the Paid Development Method with the expected loss method, where the expected loss ratios are estimated from exposure and claims experience weighted across multiple accident periods. The selected expected loss ratio for a given accident year is derived by giving some weight to all of the accident years in the experience history rather than treating each accident year independently.

•Paid Bornhuetter-Ferguson Method - a combination of the Paid Development Method and the Expected Loss Method, the Paid Bornhuetter-Ferguson Method estimates ultimate losses by adding actual paid losses and projected future unpaid losses. The amounts produced are then added to cumulative paid losses to produce the final estimates of ultimate incurred losses.

•Incurred Development Method - uses historical, cumulative incurred losses by accident year and develops those actual losses to estimated ultimate losses based upon the assumption that each accident year will develop to estimated ultimate cost in a manner that is analogous to prior years.

•Incurred Generalized Cape Cod Method - combines the Incurred Development Method with the expected loss method, where the expected loss ratios are estimated from exposure and claims experience weighted across multiple accident periods. The selected expected loss ratio for a given accident year is derived by giving some weight to all of the accident years in the experience history rather than treating each accident year independently.

•Incurred Bornhuetter - Ferguson Method - a combination of the Incurred Development Method and the Expected Loss Method, the Incurred Bornhuetter-Ferguson Method estimates ultimate losses by adding

actual incurred losses and projected future unreported losses. The amounts produced are then added to cumulative incurred losses to produce an estimate of ultimate incurred losses.

•Expected Loss Method - utilizes an expected ultimate loss ratio based on historical experience adjusted for trends multiplied by earned premium to project ultimate losses.

For each method, losses are projected to the ultimate amount to be paid. The Company then analyzes the results and may emphasize or deemphasize some or all of the outcomes to reflect actuarial judgment regarding their reasonableness in relation to supplementary information and operational and industry changes. These outcomes are then aggregated to produce a single selected point estimate that is the basis for the internal actuary’s point estimate for loss reserves.

Methodology for Determining Cumulative Number of Reported Claims

When the Company is notified of an incident of potential liability that may lead to demand for payment(s), a claim file is created. Methods used to summarize claim counts have not changed significantly over the time periods reported in the tables above. The methodology of counting claims for each of the Company’s segments may be summarized as follows:

Property and Casualty

The Company’s P&C claims are counted by claim number assigned to each claimant per insured event. However, if an insured event occurs and demand for payment is made with respect to more than one coverage (e.g., an automobile claim arising from the same incident demanding separate payment for liability and physical damage), there would be one claim counted for each coverage for which a demand for payment was made. Claims closed without payment are included in the cumulative number of reported P&C claims.

Accident and Health

The Company’s A&H claims are counted by claim number assigned to each claimant per illness, injury or death, regardless of number of services rendered for each incident. Claims closed without payment are not included in the cumulative number of reported A&H claims.

Reciprocal Exchanges

The Company’s Reciprocal Exchanges claims are counted by claim number assigned to each claimant per insured event. However, if an insured event occurs and demand for payment is made with respect to more than one statutory annual statement line of business (e.g., an automobile claim arising from the same incident demanding separate payment for liability and physical damage), there would be one claim counted for each line of business for which a demand for payment was made. Claims closed without payment are not included in the cumulative number of reported Reciprocal Exchanges claims.

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Reinsurance

12 Months Ended

Dec. 31, 2020

Insurance [Abstract]

Reinsurance

Reinsurance

The Company utilizes various excess of loss, quota share, state-based industry pools or facilities, and catastrophe reinsurance programs to limit its exposure. Reinsurance agreements transfer portions of the underlying risk on the business the Company writes. Reinsurance does not discharge or diminish the Company’s obligation to pay claims covered by the insurance policies it issues; however, it does permit the Company to recover certain incurred losses from its reinsurers and the Company’s reinsurance recoveries reduce the maximum loss that it may incur as a result of a covered loss event. The Company’s reinsurers generally carry at least an A.M. Best rating of “A-” (Excellent) or the reinsurance recoverable balances are collateralized. The Company also maintains funds held liabilities under the auto quota share reinsurance agreement. The total amount, cost and limits relating to the reinsurance coverage the Company purchases may vary from year to year based upon a variety of factors, including the availability of quality reinsurance at an acceptable price and the level of risk that the Company chooses to retain for its account.

The Company assumes and cedes insurance risks under various reinsurance agreements, on both a pro-rata basis and excess of loss basis. The Company purchases reinsurance to mitigate the volatility of direct and assumed business, which may be caused by the aggregate value or the concentration of written exposures in a particular geographic area or business segment and may arise from catastrophes or other events. The Company pays a premium as consideration for ceding the risk.

Reinsurance recoverable is as follows:

	December 31,
	2020		2019
Reinsurance recoverable on paid losses	$	221,212	$	282,500
Reinsurance recoverable on unpaid losses	998,528		1,111,808
Allowance for uncollectible reinsurance	(810)		—
Reinsurance recoverable, net	$	1,218,930	$	1,394,308

The following is the effect of reinsurance on unpaid loss and LAE reserves and unearned premiums:

	December 31,
	2020				2019
	Assumed		Ceded		Assumed		Ceded
Unpaid loss and LAE reserves	$	27,568	$	998,528	$	50,884	$	1,111,808
Unearned premiums	18,845		414,010		15,278		575,747

The following is the effect of reinsurance on premiums and loss and LAE:

	Year Ended December 31,
	2020				2019				2018
Premium:	Written		Earned		Written		Earned		Written		Earned
Direct	$	5,574,550	$	5,613,630	$	5,508,245	$	5,486,835	$	5,317,742	$	5,049,512
Assumed	59,997		56,430		74,835		80,572		99,097		123,265
Total Gross Premium	5,634,547		5,670,060		5,583,080		5,567,407		5,416,839		5,172,777
Ceded	(1,013,703)		(1,175,440)		(1,358,459)		(1,449,365)		(1,589,126)		(1,440,575)
Net Premium	$	4,620,844	$	4,494,620	$	4,224,621	$	4,118,042	$	3,827,713	$	3,732,202

	Year Ended December 31,
	2020				2019				2018
	Assumed		Ceded		Assumed		Ceded		Assumed		Ceded
Loss and LAE	$	9,713	$	729,628	$	32,745	$	801,041	$	29,290	$	1,041,286

Reinsurance Agreements

In 2017, the Company entered into an Auto Quota Share Agreement (the “Auto Quota Share Agreement”) covering the Company’s auto lines of business. Effective January 1, 2019, the Company ceded 7.0% of net liability. On July 1, 2019, the Company renewed its Auto Quota Share Agreement for a two-year term. Effective July 1, 2019, the Company ceded 10.0% of net liability. The Company receives a 31.2% provisional ceding commission on premiums ceded to the reinsurer during the term of the Auto Quota Share Agreement, subject to a sliding scale adjustment to a maximum of 32.8% if the loss ratio for the reinsured business is 64.7% or less and a minimum of 30.0% if the loss ratio is 67.5% or higher. Effective January 1, 2020, the Company cedes 5.0% of net liability under new and renewal auto policies written.

In 2017, the Company entered into a Homeowners Quota Share Agreement (the “HO Quota Share Agreement”) covering the Company’s homeowners line of business. On July 1, 2019, the Company renewed its HO Quota Share Agreement for a one-year term. Effective July 1, 2019, the Company ceded 40.0% of net liability and received a 36.0% ceding commission on new and renewal business and a portion of the in-force business. A portion of the in-force business is being run-off under the prior agreements. On July 1, 2020, the Company renewed its HO Quota Share Agreement for a one-year term. Effective July 1, 2020, the Company cedes 20.0% of net liability and receives a 37.0% ceding commission on in-force, new and renewal business.

Effective May 1, 2020, with additional purchases made at June 1, 2020, and July 1, 2020, the Company renewed its property catastrophe excess of loss program, protecting the Company against catastrophic events and other large losses. The program provides coverage up to $650,000 with one reinstatement and attaches at $70,000 for the first event and $50,000 for the second event. The Company purchased additional first event coverage for named wind that attaches at $50,000. Effective October 1, 2020, the Company’s casualty program provides $35,000 in coverage in excess of a $5,000 retention.

Reciprocal Exchanges

In 2019, the Reciprocal Exchanges entered into a personal lines quota share agreement for a one-year term. The Reciprocal Exchanges ceded 42.3% of net liability on new and renewal homeowners multiple peril, dwelling fire, and automobile physical damage (comprehensive only) policies written in the states of New Jersey and New York. Effective July 1, 2020, the Reciprocal Exchanges renewed their personal lines quota share agreement for a one-year term, ceding 42.0% combined weighted average of net liability. This includes a 55.0% quota share covering homeowners multiple peril, dwelling fire, and automobile physical damage (comprehensive only) policies written in the states of New Jersey and New York as well as a 25.0% quota share on automobile liability and collision coverages.

Effective July 1, 2020, the Reciprocal Exchanges’ property catastrophe excess of loss program provided coverage up to $475,000 with a $20,000 retention, and one reinstatement. Effective July 17, 2020, the Company purchased an additional $125,000 of top layer coverage.

Industry Pools and Facilities

The Company’s reinsurance programs include premiums written under state-mandated involuntary plans for automobile, motorcycle and commercial vehicles and premiums ceded to state-provided reinsurance facilities such as Michigan Catastrophic Claims Association (“MCCA”) and North Carolina Reinsurance Facility (“NCRF”), for

which the Company retains no loss indemnity risk. Prepaid reinsurance premiums are recognized on a pro-rata basis over the period of risk, consistent with premiums written.

MCCA is a reinsurance mechanism that covers no-fault first party medical losses of retentions in excess of $580 until June 30, 2021. Insurers are reimbursed for their covered losses in excess of this threshold. All automobile insurers doing business in Michigan are required to participate in MCCA. Funding for MCCA comes from assessments against automobile insurers based upon their share of insured automobiles in the state. Insurers are allowed to pass along this cost to Michigan automobile policyholders.

Reinsurance recoverable from MCCA are as follows:

	December 31,
	2020		2019
Reinsurance recoverable on paid losses	$	10,221	$	9,940
Reinsurance recoverable on unpaid losses	535,433		548,370
Allowance for uncollectible reinsurance	—		—
Reinsurance recoverable, net	$	545,654	$	558,310

The following is a summary of premiums and losses ceded to MCCA:

	Year Ended December 31,
	2020		2019		2018
Ceded earned premiums	$	7,856	$	9,867	$	9,676
Ceded Loss and LAE	3,624		(23,616)		(54,105)

NCRF is a mechanism for pooling of insurance risks for insureds who cannot obtain coverage by ordinary methods. Under the Facility law, licensed and writing carriers and agents must accept and insure any eligible applicant for coverages and limits which may be ceded to the Facility. The Facility accepts cession of bodily injury and property damage liability, medical payments, and uninsured and combined uninsured/underinsured motorist’s coverages. Funding for the NCRF comes from collected premiums from automobile insurers based upon the provided coverage of the insured automobiles in the state.

Reinsurance recoverable from NCRF are as follows:

	December 31,
	2020		2019
Reinsurance recoverable on paid losses	$	35,684	$	44,759
Reinsurance recoverable on unpaid losses	157,611		146,496
Allowance for uncollectible reinsurance	—		—
Reinsurance recoverable, net	$	193,295	$	191,255

The following is a summary of premiums and losses ceded to NCRF:

	Year Ended December 31,
	2020		2019		2018
Ceded earned premiums	$	236,837	$	234,370	$	232,270
Ceded Loss and LAE	208,316		222,796		210,297

The Company believes that it is unlikely to incur any material loss as a result of non-payment of amounts owed to the Company by MCCA and NCRF because (i) the payment obligations are extended over many years, resulting in relatively small current payment obligations, (ii) both MCCA and NCRF are supported by assessments permitted by statute, and (iii) the Company has not historically incurred losses as a result of non-payment. Because MCCA and

NCRF are supported by assessments permitted by statute, and there have been no significant and uncollectible balances from MCCA and NCRF, the Company believes that it has no significant exposure to uncollectible reinsurance balances from these entities.

The Company has a concentration of credit risk associated with its reinsurance recoverable and premiums ceded to reinsurers. The following tables present information for each reinsurer by reinsurance recoverable, prepaid reinsurance and funds held balances:

		Recoverable on
December 31, 2020	A.M. Best Rating	Unpaid Losses		Paid Losses		Allowance for uncollectible reinsurance		Prepaid Reinsurance		Funds Held		Net
Reinsurer:
MCCA	NR (1)	$	535,433	$	10,221	$	—	$	1,251	$	—	$	546,905
NCRF	NR (1)	157,611		35,684		—		92,783		—		286,078
Hannover Ruck SE	A+	74,485		47,726		—		68,167		(149,402)		40,976
Other reinsurers' balances - each less than 5% of total (2)	—	230,999		127,581		(810)		251,809		(19,606)		589,973
Total		$	998,528	$	221,212	$	(810)	$	414,010	$	(169,008)	$	1,463,932
NGHC		$	920,914	$	173,137	$	(636)	$	324,160	$	(153,903)	$	1,263,672
Reciprocal Exchanges		77,614		48,075		(174)		89,850		(15,105)		200,260
Total		$	998,528	$	221,212	$	(810)	$	414,010	$	(169,008)	$	1,463,932

		Recoverable on
December 31, 2019	A.M. Best Rating	Unpaid Losses		Paid Losses		Prepaid Reinsurance		Funds Held		Net
Reinsurer:
MCCA	NR (1)	$	548,370	$	9,940	$	3,927	$	—	$	562,237
NCRF	NR (1)	146,496		44,759		88,022		—		279,277
Hannover Ruck SE	A+	155,223		101,064		134,878		(254,558)		136,607
Other reinsurers' balances - each less than 5% of total (2)	—	261,719		126,737		348,920		(4,884)		732,492
Total		$	1,111,808	$	282,500	$	575,747	$	(259,442)	$	1,710,613
NGHC		$	1,027,634	$	247,549	$	469,853	$	(259,442)	$	1,485,594
Reciprocal Exchanges		84,174		34,951		105,894		—		225,019
Total		$	1,111,808	$	282,500	$	575,747	$	(259,442)	$	1,710,613

(1) NR - not rated by A.M. Best.

(2) Rated A- or higher by A.M. Best or collateralized.

Funds held for reinsurers are recorded within reinsurance payable in the consolidated balance sheets. Additionally, collateral is available to the Company in the form of letters of credit and trust agreements in the amounts of $245,049 and $143,069, as of December 31, 2020, and 2019, respectively.

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Debt

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Debt

Debt

The following table represents the Company’s debt:

			December 31,
	Interest Rate	Maturity	2020		2019
Fixed-rate:
6.75% Notes	6.75%	2024	$	350,000	$	350,000
7.625% Notes	7.625%	2055	100,000		100,000
Floating-rate:
Subordinated Debentures I (1)	LIBOR + 3.40%	2035	41,238		41,238
Subordinated Debentures II (2)	LIBOR + 4.25%	2037	30,930		30,930
2019 Credit Agreement (3)	LIBOR + 1.75%	2023	140,000		140,000
Finance lease liabilities	Various	Various	16,690		20,477
Other	3.5%	Various	3,194		9,342
Unamortized debt issuance costs and unamortized discount			(5,242)		(5,981)
Total carrying amount of debt			$	676,810	$	686,006

(1) Interest rate was 3.62% and 5.29%, as of December 31, 2020, and 2019, respectively.

(2) Interest rate was 4.47% and 6.14%, as of December 31, 2020, and 2019, respectively.

(3) Weighted-average interest rate was 4.00% and 3.59% as of December 31, 2020, and 2019, respectively.

The following table presents the Company’s interest expense:

		Year Ended December 31,
	Interest Payment Frequency	2020		2019		2018
6.75% Notes	Semiannually	$	23,625	$	23,625	$	23,625
7.625% Notes	Quarterly	7,625		7,625		7,625
Subordinated Debentures	Quarterly	3,287		4,536		4,346
2016 Credit Agreement	Quarterly	—		1,211		7,491
2019 Credit Agreement	Quarterly	3,421		5,340		—
Finance lease liabilities	Various	1,150		1,176		621
Other(1)	Various	(5,336)		8,031		7,717
Total interest expense		$	33,772	$	51,544	$	51,425

(1) Includes interest for other liabilities, interest credited on funds held balances and accretion of debt issuance costs.

Notes

The 6.75% Notes are the Company’s general unsecured obligations and rank (i) equally in right of payment with its other existing and future senior unsecured indebtedness and (ii) senior in right of payment to any of its indebtedness that is contractually subordinated to the 6.75% Notes. The 6.75% Notes are also effectively subordinated to any of the Company’s existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness and are structurally subordinated to the existing and future indebtedness of the Company’s subsidiaries (including trade payables). The 6.75% Notes mature on May 15, 2024, unless earlier redeemed or purchased by the Company.

The 7.625% Notes were the Company’s subordinated unsecured obligations and ranked (i) senior in right of payment to any future junior subordinated debt, (ii) equal in right of payment with any unsecured, subordinated debt that the Company incurs in the future that ranks equally with the 7.625% Notes, and (iii) subordinate in right of payment to any of the Company’s existing and future senior debt, including amounts outstanding under the Company’s revolving credit facility, the Company’s 6.75% notes and certain of the Company’s other obligations. Also, the 7.625% Notes were structurally subordinated to all existing and future indebtedness, liabilities, and other obligations of the Company’s subsidiaries. The 7.625% Notes were schedule to mature on September 15, 2055. See Note 22, “Subsequent Events” for additional information.

Subordinated Debentures

The Company, through a subsidiary, is the issuer of junior subordinated debentures (the “Subordinated Debentures”) relating to the issuance of trust preferred securities. The Subordinated Debentures require interest-only payments to be made quarterly, with principal due at maturity. The Subordinated Debentures’ principal amounts of $41,238 and $30,930 mature in 2035 and 2037, respectively, and bear interest at an annual rate equal to LIBOR plus 3.40% and LIBOR plus 4.25%, respectively. The Subordinated Debentures are redeemable by the Company at a redemption price equal to 100% of their principal amount. The Subordinated Debentures have been called for redemption and are expected to be redeemed in full on March 15, 2021.

Credit Agreement

In 2019, the Company refinanced its existing credit agreement and entered into a new credit agreement (the “2019 Credit Agreement”), with JPMorgan Chase Bank, N.A., as Administrative Agent, KeyBank National Association and Fifth Third Bank, as Co-Syndication Agents, and the various lending institutions party thereto. The 2019 Credit Agreement was a $340,000 base revolving credit facility with a letter of credit sub-limit of $150,000 and an expansion feature of up to $50,000. Borrowings under the 2019 Credit Agreement bore interest at either the Alternate Base Rate (“ABR”) or the LIBOR rate. ABR borrowings under the 2019 Credit Agreement bore interest at the greatest of (a) the prime rate in effect on such day, (b) the federal funds effective rate on such day plus 0.5 percent, or (c) the adjusted LIBOR rate for a one-month interest period on such day plus 1 percent. Eurodollar borrowings under the 2019 Credit Agreement bore interest at the adjusted LIBOR rate plus the Eurodollar spread for the interest period in effect. Fees payable by the Company under the 2019 Credit Agreement included a letter of credit participation fee, a letter of credit fronting fee with respect to each letter of credit (0.125%), and a commitment fee on the available commitments of the lenders (a range of 0.175% to 0.25% based on the Company’s consolidated leverage ratio; and as of December 31, 2020, the rate was 0.225%). The 2019 Credit Agreement had a maturity date of February 25, 2023.

Maturities of the Company’s debt for the years subsequent to December 31, 2020 are as follows:

	2021		2022		2023		2024		2025 and thereafter		Total
6.75% Notes	$	—	$	—	$	—	$	350,000	$	—	$	350,000
7.625% Notes (1)	—		—		—		—		100,000		100,000
Subordinated Debentures I	—		—		—		—		41,238		41,238
Subordinated Debentures II	—		—		—		—		30,930		30,930
2019 Credit Agreement (2)	—		—		140,000		—		—		140,000
Finance lease liabilities	5,986		3,875		2,433		1,436		2,960		16,690
Other	3,194		—		—		—		—		3,194
Total principal amount of debt	$	9,180	$	3,875	$	142,433	$	351,436	$	175,128	$	682,052
Unamortized debt issuance costs and unamortized discount											(5,242)
Carrying amount of debt											$	676,810

(1) Were repaid on February 3, 2021.

(2) Was repaid on January 4, 2021.

Covenants and Compliance

The indenture relating to the 6.75% Notes and 7.625% Notes contains customary covenants, such as reporting of annual and quarterly financial results, and restrictions on certain mergers and consolidations, as well as covenants relating to the incurrence of debt if the Company’s consolidated leverage ratio would exceed 0.35 to 1.00, a limitation on liens, a limitation on the disposition of stock of certain of the Company’s subsidiaries and a limitation on transactions with certain of the Company’s affiliates.

The 2019 Credit Agreement contained certain restrictive covenants customary for facilities of its type (subject to negotiated exceptions and baskets), including restrictions on indebtedness, liens, acquisitions and investments, restricted payments and dispositions. There were also financial covenants that require the Company to maintain a minimum consolidated net worth, a maximum consolidated leverage ratio, a minimum risk-based capital and a minimum rating.

The 2019 Credit Agreement also provided for customary events of default, with grace periods where customary, including failure to pay principal when due, failure to pay interest or fees within three business days after becoming due, failure to comply with covenants, breaches of representations and warranties, default under certain other indebtedness, certain insolvency or receivership events affecting the Company and its subsidiaries, the occurrence of certain material judgments, or a change in control of the Company. Upon the occurrence and during the continuation of an event of default, the administrative agent, upon the request of the requisite percentage of the lenders, may have terminated the obligations of the lenders to make loans and to issue letters of credit under the 2019 Credit Agreement, declared the Company’s obligations under the 2019 Credit Agreement to become immediately due and payable and/or exercised any and all remedies and other rights under the 2019 Credit Agreement.

As of December 31, 2020, the Company was in compliance with the covenants contained in the Company’s debt agreements.

See Note 22, “Subsequent Events” for additional information on debt instruments.

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Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company files a consolidated Federal income tax return and is a party to a Federal income tax allocation agreement. Under the tax allocation agreement, each subsidiary computes and pays to the Company its respective share of the federal income tax liability primarily based on separate return calculations. The Reciprocal Exchanges are not included in the Company’s consolidated tax return as the Company does not have an ownership interest in the Reciprocal Exchanges, and they are not a part of the consolidated tax sharing agreement among the Company and its subsidiaries.

Federal income tax expense consisted of the following:

	Year Ended December 31,
	2020						2019						2018
	NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total
Current tax expense (benefit)
Federal	$	115,416	$	7	$	115,423	$	69,985	$	(2,257)	$	67,728	$	27,039	$	(2,290)	$	24,749
Foreign	213		—		213		2,621		—		2,621		1,376		—		1,376
Total current tax expense (benefit)	$	115,629	$	7	$	115,636	$	72,606	$	(2,257)	$	70,349	$	28,415	$	(2,290)	$	26,125
Deferred tax expense (benefit)
Federal	$	19,048	$	1,777	$	20,825	$	13,497	$	(6,833)	$	6,664	$	28,015	$	(1,260)	$	26,755
Foreign	—		—		—		—		—		—		604		—		604
Total deferred tax expense (benefit)	$	19,048	$	1,777	$	20,825	$	13,497	$	(6,833)	$	6,664	$	28,619	$	(1,260)	$	27,359
Provision (benefit) for income taxes	$	134,677	$	1,784	$	136,461	$	86,103	$	(9,090)	$	77,013	$	57,034	$	(3,550)	$	53,484

The domestic and foreign components of income before taxes are as follows:

	Year Ended December 31,
	2020						2019						2018
	NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total
Domestic	$	608,186	$	12,661	$	620,847	$	358,079	$	(29,729)	$	328,350	$	244,463	$	(43,380)	$	201,083
Foreign	39,822		—		39,822		76,093		—		76,093		19,925		—		19,925
Income (loss)	$	648,008	$	12,661	$	660,669	$	434,172	$	(29,729)	$	404,443	$	264,388	$	(43,380)	$	221,008

The TCJA included provisions for Global Intangible Low-Taxed Income (“GILTI”), which imposes a minimum tax on global intangible low-tax income, defined as the excess income of foreign subsidiaries over a 10 percent rate of routine return on tangible business assets, and for Base Erosion and Anti-Abuse tax (“BEAT”) which imposes tax on certain base eroding payments to affiliated foreign companies. Consistent with accounting guidance, the Company treats both GILTI and BEAT as an in period tax charges when incurred in future periods for which no deferred taxes need be provided. The Company analyzed the impact of both GILTI and BEAT on its operations for the period and determined that for the year ended December 31, 2020, the Company was subject to GILTI but was not subject to the BEAT.

Deferred income taxes are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. The tax effects of temporary differences that give rise to the net deferred tax asset or liability are presented below based upon the 2020 enacted rate of 21%.

	December 31,
	2020						2019
	NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total
Deferred tax assets:
Accrued expenses	$	7,577	$	289	$	7,866	$	3,178	$	683	$	3,861
Unearned premiums and other revenue	71,872		4,242		76,114		64,155		5,146		69,301
Bad debt	4,628		281		4,909		4,876		114		4,990
Loss reserve discount	13,071		1,167		14,238		10,355		1,042		11,397
Net operating loss carryforwards	107,869		11,175		119,044		102,535		13,962		116,497
Surplus note interest	—		—		—		2,081		—		2,081
Other	7,773		2,099		9,872		9,740		4,882		14,622
Gross deferred tax assets	212,790		19,253		232,043		196,920		25,829		222,749
Less: Valuation allowance	(72,212)		(5,670)		(77,882)		(65,257)		(6,523)		(71,780)
Total deferred tax assets	140,578		13,583		154,161		131,663		19,306		150,969
Deferred tax liabilities:
Deferred acquisition costs	52,719		4,032		56,751		49,828		4,894		54,722
Intangible assets	39,348		632		39,980		36,495		700		37,195
Goodwill	4,418		—		4,418		4,204		—		4,204
Property and equipment	39,160		—		39,160		28,922		—		28,922
Investments	4,390		107		4,497		—		—		—
Deferred commissions	18,875		—		18,875		—		—		—
Surplus note interest	—		10,747		10,747		—		13,828		13,828
Unrealized capital gains	54,016		1,080		55,096		19,870		1,062		20,932
Other	—		—		—		11,671		81		11,752
Gross deferred tax liabilities	212,926		16,598		229,524		150,990		20,565		171,555
Deferred tax asset	$	—	$	—	$	—	$	—	$	—	$	—
Deferred tax liability	$	(72,348)	$	(3,015)	$	(75,363)	$	(19,327)	$	(1,259)	$	(20,586)

Excluding the Reciprocal Exchanges, there were $72,212 and $65,257 of deferred tax asset valuation allowances as of December 31, 2020, and 2019, respectively. In assessing the reliability of gross deferred tax assets, management considers whether it is more likely than not that some portion or all of the gross deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. During 2019 the Company recognized significant increases in its Net Operating Loss carryforwards (“NOL”) related to foreign operations. Management believes that it is more likely than not that the results of future operations will not generate sufficient taxable income to realize all of the deferred tax assets related to the NOLs from foreign operations within a reasonable time period. As such, the Company recorded a change in valuation allowance of $6,954 against these NOLs.

For the Reciprocal Exchanges, the Company had a partial valuation allowance against the net deferred tax assets as of December 31, 2020, and 2019, respectively, and no tax benefit from consolidated pre-tax losses generated for the years ended December 31, 2020, and 2019, was recognized. For the year ended December 31, 2020, New Jersey Skylands Insurance Association (“NJSIA”) had negative evidence in the form of a multi-year history of net operating losses for tax purposes that supported the determination that the realized net deferred tax asset should be fully reserved.

Excluding the Reciprocal Exchanges, the Company had U.S. federal NOLs of $62,731, $67,406 and $58,082 available for tax purposes for the years ended December 31, 2020, 2019, and 2018, respectively. The NOLs expire between December 31, 2029 and December 31, 2037.

The Reciprocal Exchanges had NOLs of $53,214, $66,484 and $54,300 available for the years ended December 31, 2020, 2019, and 2018, respectively. The NOLs expire between December 31, 2020 and December 31, 2039.

The Company’s income tax expense (benefit) differs from the statutory U.S. federal amount computed by applying the federal income tax rate of 21% for the years ended December 31, 2020, 2019, and 2018. The reasons for such differences are as follows:

	Year Ended December 31, 2020
	NGHC			Tax Rate		Reciprocal Exchanges			Tax Rate		Total			Tax Rate
Income before provision for income taxes	$	648,008				$	12,661				$	660,669
Tax rate	21.0		%			21.0		%			21.0		%
Computed “expected” tax expense	$	136,082		21.0	%	$	2,659		21.0	%	$	138,741		21.0	%
Tax effects resulting from:
Tax-exempt interest	(486)			(0.1)		(13)			(0.1)		(499)			(0.1)
Effect of foreign operations	351			0.1		—			—		351			0.1
State taxes	1,556			0.2		—			—		1,556			0.2
Change in valuation allowance	6,954			1.1		(903)			(7.1)		6,051			0.9
Benefits of operating loss carryforwards	(6,954)			(1.1)		—			—		(6,954)			(1.1)
Other permanent items	(2,826)			(0.4)		41			0.3		(2,785)			(0.3)
Provision for income taxes	$	134,677		20.8	%	$	1,784		14.1	%	$	136,461		20.7	%

	Year Ended December 31, 2019
	NGHC			Tax Rate		Reciprocal Exchanges			Tax Rate		Total			Tax Rate
Income (loss) before provision for income taxes	$	434,172				$	(29,729)				$	404,443
Tax rate	21.0		%			21.0		%			21.0		%
Computed “expected” tax expense	$	91,176		21.0	%	$	(6,243)		21.0	%	$	84,933		21.0	%
Tax effects resulting from:
Tax-exempt interest	(810)			(0.2)		(28)			0.1		(838)			(0.2)
Effect of foreign operations	(1,192)			(0.3)		—			—		(1,192)			(0.3)
State taxes	(2,357)			(0.5)		210			(0.7)		(2,147)			(0.5)
Change in valuation allowance	11,541			2.7		(105)			0.4		11,436			2.8
Benefits of operating loss carryforwards	(11,541)			(2.7)		—			—		(11,541)			(2.9)
Other permanent items	(714)			(0.2)		(2,924)			9.8		(3,638)			(0.9)
Provision (benefit) for income taxes	$	86,103		19.8	%	$	(9,090)		30.6	%	$	77,013		19.0	%

	Year Ended December 31, 2018
	NGHC			Tax Rate		Reciprocal Exchanges			Tax Rate		Total			Tax Rate
Income (loss) before provision for income taxes	$	264,388				$	(43,380)				$	221,008
Tax rate	21.0		%			21.0		%			21.0		%
Computed “expected” tax expense	$	55,521		21.0	%	$	(9,110)		21.0	%	$	46,411		21.0	%
Tax effects resulting from:
Tax-exempt interest	(910)			(0.3)		(30)			0.1		(940)			(0.4)
Effect of foreign operations	2,807			1.1		—			—		2,807			1.3
State taxes	4,578			1.7		—			—		4,578			2.1
Change in valuation allowance	53,716			20.3		1,218			(2.8)		54,934			24.9
Benefits of operating loss carryforwards	(53,716)			(20.3)		—			—		(53,716)			(24.3)
Effects of TCJA	(951)			(0.4)		(366)			0.8		(1,317)			(0.6)
Other permanent items	(4,011)			(1.5)		4,738			(10.9)		727			0.2
Provision (benefit) for income taxes	$	57,034		21.6	%	$	(3,550)		8.2	%	$	53,484		24.2	%

Accounting for Uncertainty in Income Taxes

Unrecognized tax benefits

The Company recognizes tax positions in the consolidated financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax return and amounts recognized in the consolidated financial statements.

The following table represents a reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits:

	Year Ended December 31,
	2020
Gross unrecognized tax benefits, beginning of the year	$	—
Increases in tax positions for prior years	3,889
Increases in tax positions for current year	720
Gross unrecognized tax benefits, end of the year	$	4,609

No unrecognized tax benefits or related interest and penalties were recorded prior to 2020. At December 31, 2020, our unrecognized tax benefits, excluding interest and penalties, were $4,609. Interest and penalties related to unrecognized tax benefits are recorded in the income tax expense. At December 31, 2020, NGHC accrued an expense of $1,300 (net of federal benefit) and $1,100, respectively, for payment of interest and penalties. The Company does not anticipate any significant changes to the total unrecognized tax liabilities in the next 12 months.

Regulatory tax examinations

All tax liabilities are payable to the Internal Revenue Service (“IRS”) and various state and local taxing agencies. The Company’s subsidiaries are currently under audit by the IRS for the 2016, 2017, and 2018 tax years and open to audit for the 2019 tax year. For state and local tax purposes, the Company is open to audit for tax years ended December 31, 2014 forward, depending on jurisdiction.

On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES” Act) to mitigate the economic impacts of COVID-19. The Company believes that the provisions of the CARES Act did not have a material impact on its U.S. federal tax liabilities.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Lease Commitments

The Company leases certain retail stores, office space, land, and equipment. The Company is obligated under leases for office space and storefronts expiring at various dates through 2028. The office space and storefronts lease expense for the years ended December 31, 2020, 2019, and 2018, was $37,827, $37,082, and $35,723, respectively. Future minimum lease payments as of December 31, 2020, for each of the next five years and thereafter are as follows:

	Operating		Finance
December 31,	Leases		Leases		Total
2021	$	31,525	$	6,601	$	38,126
2022	27,225		4,296		31,521
2023	21,824		2,720		24,544
2024	18,186		1,638		19,824
2025	15,109		882		15,991
Thereafter	22,222		2,393		24,615
Total lease payments	$	136,091	$	18,530	$	154,621
Less: Interest	(16,764)		(1,840)
Present value of lease liabilities	$	119,327	$	16,690

Employment Agreements

The Company has entered into employment agreements with certain individuals. The employment agreements provide for bonuses, executive benefits and severance payments under certain circumstances. Amounts payable under these agreements for the next five years are as follows:

December 31,
2021	$	4,672
2022	2,574
2023	1,303
2024	773
2025	—
Total	$	9,322

Litigation

The Company is routinely involved in legal proceedings arising in the ordinary course of business, in particular in connection with claims adjudication with respect to its policies. Management believes it has recorded adequate reserves for these liabilities and that there is no individual case pending that is likely to have a material adverse effect on our financial condition or results of operations.

On July 25, 2019, the City of North Miami Beach Police Officers’ and Firefighters’ Retirement Plan filed a complaint in the U.S. District Court for the Central District of California against the Company and certain of its officers. On November 19, 2019, the U.S. District Court for the Central District of California granted the Company’s Motion to Transfer the case to the Southern District of New York. On January 10, 2020, lead plaintiffs Town of Davie Police Officers Retirement System and Massachusetts Laborers’ Pension Fund filed an amended Complaint asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder based on allegedly false and misleading statements made by the Company in its SEC

filings in relationship to the Company’s involvement in the historical and no longer existing Wells Fargo collateral protection insurance program on behalf of a purported class of individuals and entities who purchased or otherwise acquired shares of the Company’s common stock between July 15, 2015, and August 9, 2017. The amended complaint sought damages in an amount to be proven at trial. The Company filed a Motion to Dismiss the amended complaint on March 10, 2020. On January 21, 2021, the Judge granted our Motion to Dismiss in full and granted the plaintiffs leave to amend the complaint. Management believes that the claims set forth in the amended complaint are unfounded and without merit and intends to vigorously contest any further amended complaint. The Company notes, however, that in light of the inherent uncertainty in legal proceedings, the Company can give no assurance as to the ultimate resolution of the matter, and an estimate of the possible loss or range of loss, if any, cannot be made at this time.

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Stockholders' Equity

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Preferred Stock

In 2014, the Company completed a public offering of 2,200,000 shares of 7.50% Non-Cumulative Preferred Stock, Series A, $0.01 par value per share (the “Series A Preferred Stock”). Dividends were payable on the liquidation preference amount of $25 per share, on a non-cumulative basis, when, as and if declared by the Board of Directors, quarterly in arrears on the 15th day of January, April, July, and October of each year at an annual rate of 7.50%. Dividends on the Series A Preferred Stock were not cumulative. Accordingly, in the event dividends were not declared on the Series A Preferred Stock for payment on any dividend payment date, then those dividends did not accumulate and were not payable. If the Company did not declare a dividend before the dividend payment date for any dividend period, the Company did not have an obligation to pay dividends for that dividend period, whether or not dividends on the Series A Preferred Stock were declared for any future dividend payment. The Series A Preferred Stock was not redeemable before July 15, 2019. After that date, the Company may have redeemed at its option, in whole or in part, the Series A Preferred Stock at a redemption price of $25 per share, plus any declared and unpaid dividends for prior dividend periods and accrued but unpaid dividends (whether or not declared) for the then-current dividend period.

In 2015, the Company completed a public offering of 6,600,000 of its depositary shares, each representing a 1/40th interest in a share of its 7.50% Non-Cumulative Preferred Stock, Series B, $0.01 par value per share (the “Series B Preferred Stock”), with a liquidation preference of $1,000 per share (equivalent to $25 per depositary share). Each depositary share entitled the holder to a proportional fractional interest in all rights and preferences of the Series B Preferred Stock represented thereby (including any dividend, liquidation, redemption, and voting rights). Dividends on the Series B Preferred Stock represented by the depositary shares were payable on the liquidation preference amount, on a non-cumulative basis, when, as and if declared by the Company’s Board of Directors, at a rate of 7.50% per annum, quarterly in arrears, on January 15, April 15, July 15, and October 15 of each year. Dividends on the Series B Preferred Stock were not cumulative. Accordingly, in the event dividends were not declared on the Series B Preferred Stock for payment on any dividend payment date, then those dividends did not accumulate and were not be payable. If the Company did not declare a dividend before the dividend payment date for any dividend period, the Company did not have an obligation to pay dividends for that dividend period, whether or not dividends on the Series B Preferred Stock were declared for any future dividend payment. The Series B Preferred Stock represented by the depositary shares was not redeemable before April 15, 2020. After that date, the Company may have redeemed at its option, in whole or in part, the Series B Preferred Stock represented by the depositary shares at a redemption price of $1,000 per share (equivalent to $25 per depositary share) plus any declared and unpaid dividends for prior dividend periods and accrued but unpaid dividends (whether or not declared) for the then-current dividend period. A total of 6,600,000 depositary shares (equivalent to 165,000 shares of Series B Preferred Stock) were issued.

In 2016, the Company completed a public offering of 8,000,000 of its depositary shares, each representing a 1/40th interest in a share of its 7.50% Non-Cumulative Preferred Stock, Series C, $0.01 par value per share (the “Series C Preferred Stock”), with a liquidation preference of $1,000 per share (equivalent to $25 per depositary share). Each depositary share entitles the holder to a proportional fractional interest in all rights and preferences of the Series C Preferred Stock represented thereby (including any dividend, liquidation, redemption, and voting rights). Dividends on the Series C Preferred Stock represented by the depositary shares will be payable on the liquidation preference amount, on a non-cumulative basis, when, as and if declared by the Company’s Board of Directors, at a rate of 7.50% per annum, quarterly in arrears, on January 15, April 15, July 15, and October 15 of each year. Dividends on the Series C Preferred Stock are not cumulative. Accordingly, in the event dividends are not declared on the Series C Preferred Stock for payment on any dividend payment date, then those dividends will not accumulate and will not be payable. If the Company has not declared a dividend before the dividend payment date for any dividend period, the Company will have no obligation to pay dividends for that dividend period, whether or not dividends on the Series C Preferred Stock are declared for any future dividend payment. The Series C Preferred Stock represented by the depositary shares is not redeemable before July 15, 2021. After that date, the Company may redeem at its option, in whole or in part, the Series C Preferred Stock represented by the depositary shares at a redemption price of $1,000 per share (equivalent to $25 per depositary share) plus any declared and unpaid

dividends for prior dividend periods and accrued but unpaid dividends (whether or not declared) for the then-current dividend period. A total of 8,000,000 depositary shares (equivalent to 200,000 shares of Series C Preferred Stock) were issued.

In 2018, the Company completed a private placement of 120 shares of a new series of preferred stock, par value $0.01 per share, designated as its Fixed/Floating Rate Non-Cumulative Convertible Preferred Stock, Series D (the “Series D Preferred Stock”), with a liquidation preference of $250,000 per share, for aggregate proceeds of $30,000. Holders of Series D Preferred Stock were entitled to receive, when, as and if declared by the Company’s board of directors, non-cumulative cash dividends per share at the per annum rate of 7.00% before July 15, 2023, and thereafter at the annual rate of six-month LIBOR plus 5.4941%. Dividends were payable semi-annually in arrears on the 15th day of January and July of each year, commencing on January 15, 2019. On or after July 15, 2023 (or in the event of a fundamental change of the Company, at any time), the Series D Preferred Stock could be converted at the holder’s option into shares of the Company’s common stock at a conversion rate of 6,578.9474 shares of common stock for each share of Series D Preferred Stock, subject to adjustment, which equates to an initial conversion price of $38 per share.

See Note 22, “Subsequent Events” for additional information on shareholders’ equity.

The following table summarizes the Company’s preferred stock issued and outstanding as of December 31, 2020, and 2019.

Series	Dividend rate per year		Shares of preferred stock issued and outstanding	Depositary shares issued and outstanding	Liquidation preference per share		Aggregate liquidation preference
A	7.50	%	2,200,000	—	$	25	$	55,000
B	7.50	%	165,000	6,600,000	$	1,000	$	165,000
C	7.50	%	200,000	8,000,000	$	1,000	$	200,000
D	Fixed/ Floating(1)		120	—	$	250,000	$	30,000
			2,565,120				$	450,000

(1) Dividend rate is fixed at 7.00% prior to July 15, 2023, and floating at six-month LIBOR plus 5.4941% thereafter.

Common and Preferred Stock Dividends

Dividends are payable on the Company’s common and preferred stock only when, as and if declared by the Company’s Board of Directors in its discretion, from funds legally available for this purpose. The following tables present the class of stock, declaration date and dividends paid per share in 2020, 2019, and 2018:

Class of Stock	Declaration Date	Dividend Per Share		Dividend Per Depositary Share
Common stock	October 29, 2020	$	0.05
Common stock	July 31, 2020	$	0.05
Common stock	April 29, 2020	$	0.05
Common stock	February 20, 2020	$	0.05
Preferred stock Series A	October 29, 2020	$	0.46875
Preferred stock Series A	July 31, 2020	$	0.46875
Preferred stock Series A	April 29, 2020	$	0.46875
Preferred stock Series A	February 20, 2020	$	0.46875
Preferred stock Series B and Series C	October 29, 2020	$	18.75	$	0.46875
Preferred stock Series B and Series C	July 31, 2020	$	18.75	$	0.46875
Preferred stock Series B and Series C	April 29, 2020	$	18.75	$	0.46875
Preferred stock Series B and Series C	February 20, 2020	$	18.75	$	0.46875
Preferred stock Series D	October 29, 2020	$	8,750.00
Preferred stock Series D	April 29, 2020	$	8,750.00

Class of Stock	Declaration Date	Dividend Per Share		Dividend Per Depositary Share
Common stock	October 30, 2019	$	0.05
Common stock	July 29, 2019	$	0.05
Common stock	May 6, 2019	$	0.04
Common stock	February 25, 2019	$	0.04
Preferred stock Series A	October 30, 2019	$	0.46875
Preferred stock Series A	July 29, 2019	$	0.46875
Preferred stock Series A	May 6, 2019	$	0.46875
Preferred stock Series A	February 25, 2019	$	0.46875
Preferred stock Series B and Series C	October 30, 2019	$	18.75	$	0.46875
Preferred stock Series B and Series C	July 29, 2019	$	18.75	$	0.46875
Preferred stock Series B and Series C	May 6, 2019	$	18.75	$	0.46875
Preferred stock Series B and Series C	February 25, 2019	$	18.75	$	0.46875
Preferred stock Series D	October 30, 2019	$	8,750.00
Preferred stock Series D	May 6, 2019	$	8,750.00

Class of Stock	Declaration Date	Dividend Per Share		Dividend Per Depositary Share
Common stock	October 29, 2018	$	0.04
Common stock	August 6, 2018	$	0.04
Common stock	May 7, 2018	$	0.04
Common stock	February 26, 2018	$	0.04
Preferred stock Series A	October 29, 2018	$	0.46875
Preferred stock Series A	August 6, 2018	$	0.46875
Preferred stock Series A	May 7, 2018	$	0.46875
Preferred stock Series A	February 26, 2018	$	0.46875
Preferred stock Series B and Series C	October 29, 2018	$	18.75	$	0.46875
Preferred stock Series B and Series C	August 6, 2018	$	18.75	$	0.46875
Preferred stock Series B and Series C	May 7, 2018	$	18.75	$	0.46875
Preferred stock Series B and Series C	February 26, 2018	$	18.75	$	0.46875
Preferred stock Series D	October 29, 2018	$	8,263.89

Share Repurchase Program

On April 29, 2020, the Board of Directors authorized and approved a share repurchase program with a 12- month term for up to $50,000 aggregate purchase price of the Company’s outstanding common shares. During the year ended December 31, 2020, the Company purchased 459,083 common shares with a cost of $8,482. The purchases were made in the open market in accordance with applicable federal securities laws, including Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. Pursuant to the terms of the Merger Agreement with Allstate signed July 7, 2020, the Company ceased making any further common share repurchases.

Shares Roll forward

The following table presents a roll forward of outstanding common shares.

	Year Ended December 31,
	2020	2019
Common stock:
Balance, beginning of the year	113,368,811	112,940,595
Shares issued under employee stock plans and exercises of stock options	854,914	578,201
Shares withheld related to net share settlement	(179,599)	(149,985)
Balance, end of the year	114,044,126	113,368,811
Treasury stock:
Balance beginning of the year	—	—
Repurchases of common stock	(459,083)	—
Balance, end of the period	(459,083)	—
Shares outstanding at end of the year	113,585,043	113,368,811

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

In 2019, the Company’s stockholders approved the 2019 Omnibus Incentive Plan (the “2019 Plan”). The 2019 Plan authorized up to 2.5 million shares of the Company’s stock for awards of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSU”), performance share units, performance units, cash-based awards, or other stock-based awards. The number of shares of common stock for which awards could be issued under the 2019 Plan could not exceed 2.5 million shares, subject to the authority of the Company’s Board of Directors to adjust this amount in the event of consolidation, reorganization, stock dividend, recapitalization, or similar transaction affecting the Company’s common stock. The 2019 Plan served as a successor of the Company’s prior equity incentive plans. Outstanding awards under the prior plans continued to be outstanding and subject to their terms and conditions. As of December 31, 2020, approximately 1.9 million shares of the Company’s common stock remained available for grants under the 2019 Plan.

Stock Options

A summary of the stock option awards granted under the prior plans is shown below:

	Shares Subject to Options Outstanding
Year Ended December 31, 2020	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (1)
Outstanding at beginning of the year	3,025,587	$	9.83
Exercised	(388,236)	6.79
Outstanding and exercisable at end of the year	2,637,351	$	10.28	2.4	$	63,036

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing price of the Company’s common stock of $34.18, as reported on the Nasdaq Global Market on December 31, 2020.

No options were granted, forfeited or expired during the year ended December 31, 2020. The total intrinsic value of the options exercised during the years ended December 31, 2020, 2019, and 2018, was $7,685, $3,105 and $5,011, respectively. The total fair value of stock options vested for the years ended December 31, 2020, 2019, and 2018 was $1,044, $239 and $783, respectively.

Restricted Stock Units

The Company granted RSUs with a grant date value equal to the closing stock price of the Company’s stock on the dates the units were granted. Prior to the acquisition of the Company by Allstate, the RSUs vested over three or four years and were net share settled. Under the net share settlement procedures, upon each settlement date, RSUs were withheld to cover the required withholding tax, which was based on the value of the RSUs on the settlement date as determined by the closing price of the Company’s common stock on the trading day immediately preceding the applicable settlement date. The remaining amounts were delivered to the recipient as shares of the Company’s common stock. The amount remitted to the tax authorities for the employees’ tax obligation to the tax authorities is reflected as a financing activity in the consolidated statements of cash flows. These shares withheld by the Company as a result of the net settlement of RSUs were no longer considered outstanding on a diluted basis, thereby reducing the Company’s diluted shares used to calculate earnings per share.

A summary of the RSUs is shown below:

	RSUs
Year Ended December 31, 2020	Number of RSUs	Weighted-Average Grant Date Fair Value
Non-vested at beginning of the year	1,033,631	$	23.98
Granted	561,497	21.46
Vested	(466,678)	23.68
Forfeited	(11,874)	21.75
Non-vested at end of the year	1,116,576	$	22.86

The weighted-average grant date fair value of RSUs for the years ended December 31, 2020, 2019, and 2018, was $21.46, $25.42 and $21.36, respectively. The total fair value of the RSUs vested for the years ended December 31, 2020, 2019, and 2018, was $11,051, $9,259 and $7,068, respectively.

Stock-Based Compensation Expense

Stock-based compensation expense, included in general and administrative expenses, for all stock-based compensation plans was $12,421, $10,996 and $9,020 for the years ended December 31, 2020, 2019, and 2018, respectively.

As of December 31, 2020, the Company had approximately $15,577 of unrecognized stock-based compensation expense related to RSU awards. This unrecognized stock-based compensation expense was expected to be recognized over a weighted-average period of approximately 1.3 years.

On January 4, 2021, following the acquisition of the Company by Allstate, the Company’s outstanding 2,637,351 options and 1,116,576 RSUs were cancelled and converted into the right to receive cash consideration, less applicable withholding taxes. See Note 22, “Subsequent Events” for additional information.

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Related Party Transactions

12 Months Ended

Dec. 31, 2020

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

The significant shareholder of the Company prior to the Merger also has an ownership interest in AmTrust and ACP Re. Accordingly, as of December 31, 2020, AmTrust and ACP Re were related entities of the Company. The Company is a party to the following transactions with these related entities:

Equity Method Investments

The Company has an ownership interest in an LSC Entity, limited liability companies and limited partnerships with related parties. See Note 4, “Investments - Equity Method Investments - Related Parties” for additional information.

Agreements with ACP Re

Credit Agreement

The Company is party to a credit agreement (the “ACP Re Credit Agreement”) by and among AmTrust, as administrative agent, ACP Re Holdings, LLC, a Delaware limited liability company owned by a related party trust (the “Trust”), as borrower, and AmTrust and the Company, as lenders of $250,000 ($125,000 each lender). The amounts borrowed are secured by equity interests, cash and, other investments held by ACP Re Holdings, LLC in an amount equal to 115% of the outstanding loan balance. The maturity date of the loan is September 20, 2036. The interest rate on the outstanding principal balance is a fixed annual rate of 3.7%, provided that up to 1.2% thereof

may be paid in kind. The Trust is required to cause ACP Re Holdings, LLC to maintain assets having a value greater than 115% of the outstanding loan balance, and if there is a shortfall, the Trust will make a contribution to ACP Re Holdings, LLC of assets having a market value of at least the shortfall (the “Maintenance Covenant”). Commencing on September 20, 2026, and for each year thereafter, two percent of the then outstanding principal balance of the loan (inclusive of any amounts previously paid in kind) is due and payable. A change of control of greater than 50% and an uncured breach of the Maintenance Covenant are included as events of default.

As of December 31, 2020, and 2019, the Company had a receivable for the principal amount related to the ACP Re Credit Agreement of $130,784 and $129,229, respectively. The Company recorded interest income of $4,825, $4,767 and $4,711 for the years ended December 31, 2020, 2019, and 2018, respectively, under the ACP Re Credit Agreement. Management determined no impairment reserve was needed for the carrying value of the loan at December 31, 2020, and 2019, based on the collateral levels maintained.

Other Related Party Transactions

Lease Agreements

The Company leases office space at 59 Maiden Lane in New York, New York from 59 Maiden Lane Associates LLC, an entity that is wholly-owned by the Karfunkel family. The lease term is through 2022. The Company paid $830, $830 and $830 in rent for the years ended December 31, 2020, 2019, and 2018, respectively.

The Company leases office space at 30 North LaSalle Street, Chicago, Illinois from 30 North LaSalle Street Partners LLC, an entity that is wholly-owned by the Karfunkel family. The lease term is through 2025. The Company paid $440, $309 and $302 in rent for the years ended December 31, 2020, 2019, and 2018, respectively.

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Benefits Plan	12 Months Ended
	Dec. 31, 2020
Retirement Benefits [Abstract]
Benefits Plan	Benefits PlanA significant number of the Company’s employees participate in a defined contribution plan. Employer contributions vary based on criteria specific to the plan. Contribution expense was $11,624, $10,212 and $9,292 for the years ended December 31, 2020, 2019, and 2018, respectively.

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Statutory Financial Data, Risk-Based Capital and Dividend Restrictions

12 Months Ended

Dec. 31, 2020

Insurance [Abstract]

Statutory Financial Data, Risk-Based Capital and Dividend Restrictions

Statutory Financial Data, Risk-Based Capital and Dividend RestrictionsThe Company’s insurance subsidiaries file financial statements in accordance with statutory accounting practices (“SAP”) prescribed or permitted by domestic or foreign insurance regulatory authorities. The differences between statutory financial statements and financial statements prepared in accordance with GAAP vary between domestic and foreign jurisdictions. The principal differences relate to: (1) acquisition costs incurred in connection with acquiring new business which are charged to expense under SAP but under GAAP are deferred and amortized as the related premiums are earned; (2) ceding commission revenues are earned when ceded premiums are written except for ceding commission revenues in excess of anticipated acquisition costs, which are deferred and amortized as ceded premiums are earned. GAAP requires that all ceding commission revenues be earned as the underlying ceded premiums are earned over the term of the reinsurance agreements; (3) certain assets including certain receivables, a portion of the net deferred tax asset, prepaid expenses and furniture and equipment are not admitted; (4) limitation on net deferred tax assets created by the tax effects of temporary differences; (5) unpaid losses and loss expense, and unearned premium reserves are presented gross of reinsurance with a corresponding asset recorded; and (6) debt securities portfolios that are carried at fair value and changes in fair value are reflected directly in unassigned surplus, net of related deferred taxes.

Risk-Based Capital

Insurance companies in the U.S. are subject to certain Risk-Based Capital (“RBC”) requirements as specified by the National Association of Insurance Commissioners (“NAIC”). Under such requirements, the amount of statutory capital and surplus maintained by an insurance company is to be determined on asset risk, underwriting risk and other risk factors. As of December 31, 2020, and 2019, the statutory capital and surplus of all of the Company’s insurance subsidiaries domiciled in the U.S. exceeded the RBC requirements.

Our Bermuda subsidiaries, National General Re Ltd. (“NG Re”) and National General Insurance Ltd. (“NGIL”, and together with NG Re, the “Bermuda Insurers”) are registered as Class 3A insurers by the Bermuda Monetary Authority (“BMA”) under the Bermuda Insurance Act 1978, and related regulations as amended (the “Insurance Act - Bermuda”). As a result, the revised regulations require that the available statutory capital and surplus for each Bermuda Insurer be equal to or exceed the value of both its Minimum Margin of Solvency (“MMS”) and the Enhanced Capital Requirement (“ECR”). The capital and solvency return will be filed with the BMA on or before April 30, 2021, and the ECR based on the economic balance sheet will not be available until this filing is completed. The capital and surplus requirement is based on the statutory capital MMS prior to the ECR and the 25% of ECR criteria being calculated. The required MMS on this basis was $269,219 and $255,393 as of December 31, 2020, and 2019, respectively.

Statutory Financial Data

The following tables present the statutory capital and surplus, and net income under SAP:

	December 31,
Statutory capital and surplus	2020		2019
Property and Casualty Insurance Companies:
Domestic	$	1,619,460	$	1,600,740
Foreign	791,028		760,658
Total	$	2,410,488	$	2,361,398
Life Insurance Companies:
Domestic	$	79,977	$	53,022

	Year Ended December 31,
Statutory net income (loss)	2020		2019		2018
Property and Casualty Insurance Companies:
Domestic	$	214,313	$	156,771	$	16,737
Foreign	174,861		106,734		64,810
Total	$	389,174	$	263,505	$	81,547
Life Insurance Companies:
Domestic	$	7,963	$	7,125	$	9,827

Reciprocal Exchanges

The Reciprocal Exchanges prepare their statutory basis financial statements under SAP. As of December 31, 2020, and 2019, the Reciprocal Exchanges had combined statutory capital and surplus of $109,314 and $84,340, respectively. For the years ended December 31, 2020, 2019, and 2018, the Reciprocal Exchanges had combined SAP net income (loss) of $26,106, $(27,033) and $(24,194), respectively. The Reciprocal Exchanges are required to maintain minimum capital and surplus in accordance with regulatory requirements. As of December 31, 2020, and 2019, the capital and surplus levels of the Reciprocal Exchanges exceeded such required levels. The Reciprocal Exchanges are not owned by the Company but managed through management agreements. Accordingly, the Reciprocal Exchanges’ net assets are not available to the Company.

Due to the finalization of the Company’s combined statutory filings, amounts for 2019 have changed compared to those previously reported in our Annual Report on Form 10-K for the year ended December 31, 2019.

Dividend Restrictions

The Company’s insurance subsidiaries are subject to statutory and regulatory restrictions, applicable to insurance companies, imposed by the states of domicile, which limit the amount of cash dividends or distributions that they may pay unless special permission is received from the state of domicile. This limit was approximately $156,400 and $402,970 as of December 31, 2020, and 2019, respectively. During the years ended December 31, 2020, 2019, and 2018, there were $300,000, $7,000 and $156,660 of dividends and return of capital paid by the Company’s insurance subsidiaries to their parent company or the Company, respectively.

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Earnings Per Share

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The following is a summary of the elements used in calculating basic and diluted earnings per common share:

	Year Ended December 31,
	2020		2019		2018
Numerator:
Net income attributable to NGHC	$	513,331	$	348,069	$	207,354
Preferred stock dividends - nonconvertible	(31,500)		(31,500)		(31,500)
Preferred stock dividends - convertible	(2,100)		(2,100)		(992)
Numerator for basic EPS	479,731		314,469		174,862
Effect of dilutive securities:
Preferred stock dividends - convertible	2,100		2,100		992
Numerator for diluted EPS - after assumed conversions	$	481,831	$	316,569	$	175,854
Denominator:
Denominator for basic EPS - weighted-average shares outstanding	113,511,669		113,199,501		107,659,813
Effect of dilutive securities:
Employee stock options	1,739,871		1,833,736		2,053,681
RSUs	385,582		274,262		319,089
Convertible preferred stock	789,473		789,473		789,473
Dilutive potential common shares	2,914,926		2,897,471		3,162,243
Denominator for diluted EPS - weighted-average shares outstanding and assumed conversions	116,426,595		116,096,972		110,822,056
EPS attributable to NGHC common stockholders:
Basic EPS	$	4.23	$	2.78	$	1.62
Diluted EPS	$	4.14	$	2.73	$	1.59

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Segment Information

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company currently operates two business segments, “Property and Casualty” and “Accident and Health.” The “Corporate and Other” column represents the activities of the holding company, as well as income from the Company’s investment portfolio. The Company evaluates segment profits attributable to the performance of activities within the segment separately from the results of the Company’s investment portfolio. Other operating expenses allocated to the segments are called “General and administrative expenses” which are allocated on an actual basis except corporate salaries and benefits where management’s judgment is applied. In determining total assets by segment, the Company identifies those assets that are attributable to a particular segment such as premiums receivable, deferred acquisition costs, reinsurance recoverable, prepaid reinsurance premiums, intangible assets and goodwill, while the remaining assets are allocated to Corporate and Other.

The Property and Casualty segment, which includes the Reciprocal Exchanges and the management companies, reports the management fees earned by the Company from the Reciprocal Exchanges for underwriting, investment management and other services as service and fee income. The effects of these transactions between the Company and the Reciprocal Exchanges are eliminated in consolidation to derive consolidated net income. However, the management fee income is reported in net income attributable to NGHC and included in the basic and diluted earnings per share.

The following tables summarize the results of operations of the operating segments:

	Year Ended December 31, 2020
	Property and Casualty		Accident and Health		Corporate and Other		Total
Underwriting revenues:
Gross premium written	$	4,857,631	$	776,916	$	—	$	5,634,547
Ceded premiums	(923,168)		(90,535)		—		(1,013,703)
Net premium written	3,934,463		686,381		—		4,620,844
Change in unearned premium	(125,310)		(914)		—		(126,224)
Net earned premium	3,809,153		685,467		—		4,494,620
Ceding commission income	152,671		(214)		—		152,457
Service and fee income	391,702		368,672		—		760,374
Total underwriting revenues	4,353,526		1,053,925		—		5,407,451
Underwriting expenses:
Loss and loss adjustment expense	2,505,189		318,893		—		2,824,082
Acquisition costs and other underwriting expenses	681,286		309,283		—		990,569
General and administrative expenses	792,929		242,238		8,026		1,043,193
Total underwriting expenses	3,979,404		870,414		8,026		4,857,844
Underwriting income	374,122		183,511		(8,026)		549,607
Net investment income	—		—		118,257		118,257
Net gain on investments	—		—		26,577		26,577
Interest expense	—		—		(33,772)		(33,772)
Provision for income taxes	—		—		(136,461)		(136,461)
Net income attributable to noncontrolling interest	—		—		(10,877)		(10,877)
Net income attributable to NGHC	$	374,122	$	183,511	$	(44,302)	$	513,331

	Year Ended December 31, 2019
	Property and Casualty		Accident and Health		Corporate and Other		Total
Underwriting revenues:
Gross premium written	$	4,814,463	$	768,617	$	—	$	5,583,080
Ceded premiums	(1,250,448)		(108,011)		—		(1,358,459)
Net premium written	3,564,015		660,606		—		4,224,621
Change in unearned premium	(108,992)		2,413		—		(106,579)
Net earned premium	3,455,023		663,019		—		4,118,042
Ceding commission income	227,514		10,939		—		238,453
Service and fee income	392,478		249,487		—		641,965
Total underwriting revenues	4,075,015		923,445		—		4,998,460
Underwriting expenses:
Loss and loss adjustment expense	2,543,788		310,680		—		2,854,468
Acquisition costs and other underwriting expenses	605,019		222,348		—		827,367
General and administrative expenses	773,291		254,208		14,273		1,041,772
Total underwriting expenses	3,922,098		787,236		14,273		4,723,607
Underwriting income	152,917		136,209		(14,273)		274,853
Net investment income	—		—		141,233		141,233
Net gain on investments	—		—		13,473		13,473
Other income					26,428		26,428
Interest expense	—		—		(51,544)		(51,544)
Provision for income taxes	—		—		(77,013)		(77,013)
Net loss attributable to noncontrolling interest	—		—		20,639		20,639
Net income attributable to NGHC	$	152,917	$	136,209	$	58,943	$	348,069

	Year Ended December 31, 2018
	Property and Casualty		Accident and Health		Corporate and Other		Total
Underwriting revenues:
Gross premium written	$	4,718,730	$	698,109	$	—	$	5,416,839
Ceded premiums	(1,517,556)		(71,570)		—		(1,589,126)
Net premium written	3,201,174		626,539		—		3,827,713
Change in unearned premium	(85,385)		(10,126)		—		(95,511)
Net earned premium	3,115,789		616,413		—		3,732,202
Ceding commission income	217,694		7,003		—		224,697
Service and fee income	375,603		185,980		—		561,583
Total underwriting revenues	3,709,086		809,396		—		4,518,482
Underwriting expenses:
Loss and loss adjustment expense	2,340,881		321,345		—		2,662,226
Acquisition costs and other underwriting expenses	550,540		184,726		—		735,266
General and administrative expenses	726,238		201,808		10,000		938,046
Total underwriting expenses	3,617,659		707,879		10,000		4,335,538
Underwriting income	91,427		101,517		(10,000)		182,944
Net investment income	—		—		119,034		119,034
Net loss on investments	—		—		(29,545)		(29,545)
Interest expense	—		—		(51,425)		(51,425)
Provision for income taxes	—		—		(53,484)		(53,484)
Net loss attributable to noncontrolling interest	—		—		39,830		39,830
Net income attributable to NGHC	$	91,427	$	101,517	$	14,410	$	207,354

The following tables summarize the financial position of the operating segments:

	December 31, 2020
	Property and Casualty		Accident and Health		Corporate and Other		Total
Premiums and other receivables, net	$	1,304,636	$	237,474	$	3,270	$	1,545,380
Deferred acquisition costs	259,163		26,742		—		285,905
Reinsurance recoverable, net	1,187,855		31,075		—		1,218,930
Prepaid reinsurance premiums	412,950		1,060		—		414,010
Goodwill and Intangible assets, net	416,828		103,225		—		520,053
Prepaid and other assets	45,235		18,322		5,535		69,092
Corporate and other assets	—		—		6,074,524		6,074,524
Total assets	$	3,626,667	$	417,898	$	6,083,329	$	10,127,894

	December 31, 2019
	Property and Casualty		Accident and Health		Corporate and Other		Total
Premiums and other receivables, net	$	1,292,813	$	131,877	$	4,258	$	1,428,948
Deferred acquisition costs	239,293		24,230		—		263,523
Reinsurance recoverable, net	1,377,284		17,024		—		1,394,308
Prepaid reinsurance premiums	575,712		35		—		575,747
Goodwill and Intangible assets, net	436,724		108,427		—		545,151
Prepaid and other assets	56,960		32,852		4,830		94,642
Corporate and other assets	—		—		5,454,215		5,454,215
Total assets	$	3,978,786	$	314,445	$	5,463,303	$	9,756,534

The following table summarizes service and fee income by source within each operating segment:

	Year Ended December 31,
	2020						2019						2018
	Property and Casualty		Accident and Health		Total		Property and Casualty		Accident and Health		Total		Property and Casualty		Accident and Health		Total
Commission revenue	$	60,103	$	124,578	$	184,681	$	87,486	$	83,476	$	170,962	$	93,235	$	70,086	$	163,321
Finance and processing fees	129,327		9,546		138,873		128,302		6,197		134,499		121,058		4,535		125,593
Group health administrative fees	—		124,523		124,523		—		100,951		100,951		—		79,411		79,411
Installment fees	104,915		—		104,915		97,997		—		97,997		92,785		—		92,785
Late payment fees	32,377		59		32,436		34,210		309		34,519		33,765		86		33,851
Other service and fee income	64,980		109,966		174,946		44,483		58,554		103,037		34,760		31,862		66,622
Total	$	391,702	$	368,672	$	760,374	$	392,478	$	249,487	$	641,965	$	375,603	$	185,980	$	561,583
NGHC	$	385,391	$	368,672	$	754,063	$	386,723	$	249,487	$	636,210	$	369,852	$	185,980	$	555,832
Reciprocal Exchanges	6,311		—		6,311		5,755		—		5,755		5,751		—		5,751
Total	$	391,702	$	368,672	$	760,374	$	392,478	$	249,487	$	641,965	$	375,603	$	185,980	$	561,583

The following tables show a summary of premiums and fee income by product line:

	Year Ended December 31,
Gross Premium Written	2020		2019		2018
Property and Casualty
Personal Auto	$	2,817,396	$	2,721,202	$	2,637,176
Homeowners	751,918		718,819		688,006
RV/Packaged	215,138		212,746		208,394
Small Business Auto	251,328		315,569		319,299
Lender-placed Insurance	402,768		342,267		363,056
Other	45,482		56,413		53,876
Total Property and Casualty	4,484,030		4,367,016		4,269,807
Accident and Health
Group	366,847		288,549		239,729
Individual	410,069		340,731		308,122
International	—		139,337		150,258
Total Accident and Health	776,916		768,617		698,109
Total NGHC	$	5,260,946	$	5,135,633	$	4,967,916
Reciprocal Exchanges
Personal Auto	$	131,286	$	152,688	$	153,129
Homeowners	238,972		290,972		291,907
Other	3,343		3,787		3,887
Total Reciprocal Exchanges	$	373,601	$	447,447	$	448,923
Total Gross Premium Written	$	5,634,547	$	5,583,080	$	5,416,839

	Year Ended December 31,
Net Premium Written	2020		2019		2018
Property and Casualty
Personal Auto	$	2,475,384	$	2,260,385	$	2,016,858
Homeowners	521,331		404,278		331,120
RV/Packaged	209,479		198,737		206,740
Small Business Auto	192,859		249,067		233,456
Lender-placed Insurance	314,642		198,171		202,069
Other	19,552		18,905		27,366
Total Property and Casualty	3,733,247		3,329,543		3,017,609
Accident and Health
Group	284,189		231,388		197,386
Individual	402,192		340,049		308,065
International	—		89,169		121,088
Total Accident and Health	686,381		660,606		626,539
Total NGHC	$	4,419,628	$	3,990,149	$	3,644,148
Reciprocal Exchanges
Personal Auto	$	91,182	$	134,958	$	61,759
Homeowners	108,624		98,009		120,875
Other	1,410		1,505		931
Total Reciprocal Exchanges	$	201,216	$	234,472	$	183,565
Total Net Premium Written	$	4,620,844	$	4,224,621	$	3,827,713

	Year Ended December 31,
Net Earned Premium	2020		2019		2018
Property and Casualty
Personal Auto	$	2,403,879	$	2,190,748	$	1,927,667
Homeowners	452,739		405,306		329,850
RV/Packaged	200,854		195,639		197,258
Small Business Auto	216,888		252,359		237,587
Lender-placed Insurance	293,353		182,231		215,811
Other	20,191		18,509		20,855
Total Property and Casualty	3,587,904		3,244,792		2,929,028
Accident and Health
Group	284,197		231,398		197,406
Individual	401,270		340,251		307,952
International	—		91,370		111,055
Total Accident and Health	685,467		663,019		616,413
Total NGHC	$	4,273,371	$	3,907,811	$	3,545,441
Reciprocal Exchanges
Personal Auto	$	111,353	$	106,549	$	59,923
Homeowners	108,629		101,964		125,806
Other	1,267		1,718		1,032
Total Reciprocal Exchanges	$	221,249	$	210,231	$	186,761
Total Net Earned Premium	$	4,494,620	$	4,118,042	$	3,732,202

	Year Ended December 31,
Fee Income	2020		2019		2018
Property and Casualty
Service and Fee Income	$	385,391	$	386,723	$	369,852
Ceding Commission Income	110,377		164,013		160,945
Total Property and Casualty	495,768		550,736		530,797
Accident and Health
Service and Fee Income
Group	172,526		134,206		104,504
Individual	11,062		9,650		9,304
Third-Party Fee	185,084		105,631		72,172
Total Service and Fee Income	368,672		249,487		185,980
Ceding Commission Income	(214)		10,939		7,003
Total Accident and Health	368,458		260,426		192,983
Total NGHC	$	864,226	$	811,162	$	723,780
Reciprocal Exchanges
Service and Fee Income	$	6,311	$	5,755	$	5,751
Ceding Commission Income	42,294		63,501		56,749
Total Reciprocal Exchanges	$	48,605	$	69,256	$	62,500
Total Fee Income	$	912,831	$	880,418	$	786,280

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Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

Selected Quarterly Financial Data (Unaudited)

Selected Quarterly Financial Data (Unaudited)

The following tables summarize quarterly financial data:

	2020
	March 31,		June 30,		September 30,		December 31,
Total revenues	$	1,328,334	$	1,329,132	$	1,443,009	$	1,451,810
Total expenses	1,199,589		1,104,012		1,298,712		1,289,303
Provision for income taxes	28,172		50,507		27,428		30,354
Net income	100,573		174,613		116,869		132,153
Net income attributable to NGHC	100,759		166,574		109,969		136,029
Net income attributable to NGHC common stockholders	92,884		157,649		102,094		127,104
Basic EPS	$	0.82	$	1.39	$	0.90	$	1.12
Diluted EPS	$	0.80	$	1.37	$	0.88	$	1.10

	2019
	March 31,		June 30,		September 30,		December 31,
Total revenues	$	1,232,665	$	1,269,652	$	1,308,172	$	1,369,105
Total expenses	1,124,820		1,170,353		1,231,186		1,248,792
Provision for income taxes	22,506		22,241		16,747		15,519
Net income	85,339		77,058		60,239		104,794
Net income attributable to NGHC	91,758		77,876		71,154		107,281
Net income attributable to NGHC common stockholders	83,883		68,951		63,279		98,356
Basic EPS	$	0.74	$	0.61	$	0.56	$	0.87
Diluted EPS	$	0.72	$	0.60	$	0.54	$	0.85

Due to changes in number of shares outstanding from quarter to quarter, the total earnings per share of the four quarters may not necessarily equal the earnings per share for the year.

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Subsequent Events

12 Months Ended

Dec. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Effective January 4, 2021 the Company was acquired by Allstate pursuant to the Agreement and Plan of Merger (“Merger”), dated as of July 7, 2020, by and among the Company, Allstate, and Bluebird Acquisition Corp., an indirect wholly owned subsidiary of Allstate. As a result of the Merger, the Company became a wholly owned indirect subsidiary of Allstate and our common shares were delisted from the NASDAQ Global Select Market (“NASDAQ”) and NASDAQ filed a Form 25 with respect to the common shares and we subsequently filed a Form 15 with the Securities and Exchange Commission requesting that our duty to file reports under Section 13 of the Securities Exchange Act of 1934, as amended (the “Act”) with respect to such securities be terminated and our duty to file reports under Section 15(d) of the Act with respect to such securities be suspended. The Company’s shareholders received $32.00 per share in cash from Allstate, plus a closing dividend of $2.50 per share, providing $34.50 in total value per share. In addition, (i) each outstanding option to purchase a share of Common Stock, regardless of whether vested or unvested, was cancelled and converted into the right to receive $34.50 in cash, subject to any applicable tax withholding, minus the exercise price per share underlying such option and (ii) each outstanding RSU, regardless of whether vested or unvested, was cancelled and converted into the right to receive $34.50 in cash, subject to any applicable tax withholding.

On January 4, 2021 and in connection with the Merger, the Company entered into the Third Supplemental Indenture (the “Third Supplemental Indenture”), by and among the Company, as the issuer, Allstate, as the guarantor, and The Bank of New York Mellon (the “Notes Trustee”), as trustee, supplementing that certain Indenture, dated as of May 23, 2014, by and between the Company and the Notes Trustee, as supplemented by the First Supplemental Indenture, dated as of May 23, 2014 (as supplemented, the “Indenture”), relating to the issuance of 6.75% Senior Notes due 2024 (the “2024 Notes”), pursuant to which the Company, Allstate and the Notes Trustee agreed to amend the Indenture to: (i) amend certain information covenants in the Indenture to replace the requirement of the Company to provide certain information to the holders of the 2024 Notes with a requirement of Allstate to provide similar information in respect of Allstate, and (ii) add Allstate as a guarantor of the payment obligations of the Company with respect to the 2024 Notes. As required by the Indenture, a majority of the holders of the 2024 Notes consented to the Third Supplemental Indenture.

On January 4, 2021, and in connection with the Merger, the Company terminated the Credit Agreement, dated as of February 25, 2019 (the “2019 Credit Agreement”), by and among the Company, as the borrower, JPMorgan Chase Bank, N.A., as the administrative agent (the “Agent”), KeyBank National Association and Fifth Third Bank as co-syndication agents, and Associated Bank, National Association and The Bank of Nova Scotia, as co-documentation agents, and the various lending institutions party thereto, and the other Loan Documents (as defined in the 2019 Credit Agreement) by prepaying all outstanding amounts thereunder.

Effective January 4, 2021, a subsidiary of the Company ceded certain new, renewal, and in-force business to Allstate Insurance Company, a subsidiary of Allstate. The Company transferred approximately $988,144 in settlement of the initial transfer.

Following the consummation of the Merger, we voluntarily redeemed the following securities effective February 3, 2021: (a) all outstanding shares of 7.50% Non-Cumulative Preferred Stock, Series A, (par value $0.01 per share) (the “Class A Preferred Stock”), (b) all outstanding Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B and the underlying shares of 7.50% Non-Cumulative Preferred Stock, Series B (par value $0.01 per share) (collectively, the “Class B Preferred Stock”), (c) all outstanding shares of Fixed/Floating Rate Non-Cumulative Convertible Preferred Stock, Series D (the “Series D Preferred Stock”) (par value $0.01 per share), and (d) the aggregate outstanding principal amount of our 7.625% Subordinated Notes Due 2055 (the “2055 Notes”). All outstanding Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series C and the underlying shares of 7.50% Non-Cumulative Preferred Stock, Series C (par value $0.01 per share) (collectively, the “Class C Preferred Stock”) were delisted from NASDAQ effective January 25, 2021, and we subsequently filed a Form 15 with the Securities and Exchange Commission requesting that our duty to file reports under Section 13 of the Act with respect to such securities be terminated and our duty to file reports under Section 15(d) of the Act with respect to such securities be suspended.

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Schedule I - Summary of Investments Other than Investments in Related Parties

12 Months Ended

Dec. 31, 2020

SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract]

Schedule I - Summary of Investments Other than Investments in Related Parties

Schedule I

NATIONAL GENERAL HOLDINGS CORP.

SUMMARY OF INVESTMENTS

OTHER THAN INVESTMENTS IN RELATED PARTIES

(In Thousands)

December 31, 2020	Cost (1)		Value		Amount at which shown in the Balance Sheet
Debt Securities:
Bonds:
U.S. government and government agencies and authorities	$	52,004	$	55,208	$	55,208
States, municipalities and political subdivisions	304,688		322,441		322,441
Foreign governments	1,765		1,884		1,884
Public utilities	56,998		61,608		61,608
All other corporate bonds (2)	3,818,758		4,055,989		4,055,989
Total Debt Securities	4,234,213		4,497,130		4,497,130
Equity Securities:
Common Stock
Industrial, miscellaneous and all other (3)	18,911		2,909		2,909
Total Equity Securities	18,911		2,909		2,909
Other investments (4)	46,219		46,219		46,219
Other short-term investments	191,086		191,086		191,086
Total Investments (other than investments in related parties)	$	4,490,429	$	4,737,344	$	4,737,344

(1) Original cost of equity securities and, as to debt securities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts.

(2) Includes structured securities, residential and commercial mortgage-backed securities.

(3) Included in “Other investments” in the consolidated balance sheets.

(4) Excludes equity securities.

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Schedule II - Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2020

Condensed Financial Information Disclosure [Abstract]

Schedule II - Condensed Financial Information of Registrant

Schedule II

NATIONAL GENERAL HOLDINGS CORP.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

BALANCE SHEETS — PARENT COMPANY ONLY

(In Thousands)

	December 31,
	2020		2019
ASSETS
Investments:
Debt securities, available-for-sale, at fair value (amortized cost - $0 and $95,527)	$	—	$	98,187
Short-term investments	—		4,807
Equity investment in subsidiaries	3,289,136		2,937,575
Total investments	3,289,136		3,040,569
Cash and cash equivalents	403,631		852
Accrued investment income	—		835
Property and equipment, net	142,042		158,670
Prepaid and other assets	10,874		26,658
Total assets	$	3,845,683	$	3,227,584
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	44,927	$	26,071
Debt	584,758		584,019
Total liabilities	$	629,685	$	610,090
Stockholders’ equity:
Total stockholders’ equity	$	3,215,998	$	2,617,494
Total liabilities and stockholders’ equity	$	3,845,683	$	3,227,584

See accompanying notes to condensed financial statements.

Schedule II

NATIONAL GENERAL HOLDINGS CORP.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

STATEMENTS OF INCOME AND COMPREHENSIVE INCOME — PARENT COMPANY ONLY

(In Thousands)

	Year Ended December 31,
	2020		2019		2018
Revenues:
Service and fee income	$	53,005	$	48,781	$	44,932
Investment income	2,200		3,929		1,205
Net gain (loss) on investments	7,094		1,026		(1,571)
Equity in undistributed net income of subsidiaries	513,023		365,932		232,101
Total revenues	575,322		419,668		276,667
Expenses:
Interest expense	35,618		38,670		39,380
Other expense, net	30,906		38,499		30,847
Total expenses	66,524		77,169		70,227
Income before provision (benefit) for income taxes	508,798		342,499		206,440
Benefit for income taxes	(4,533)		(5,570)		(914)
Net income attributable to NGHC	513,331		348,069		207,354
Dividends on preferred stock	(33,600)		(33,600)		(32,492)
Net income attributable to NGHC common stockholders	$	479,731	$	314,469	$	174,862
Net income attributable to NGHC	$	513,331	$	348,069	$	207,354
Other comprehensive income (loss), net of tax	128,655		126,678		(44,054)
Comprehensive income attributable to NGHC	$	641,986	$	474,747	$	163,300

See accompanying notes to condensed financial statements.

Schedule II

NATIONAL GENERAL HOLDINGS CORP.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

STATEMENTS OF CASH FLOWS — PARENT COMPANY ONLY

(In Thousands)

	Year Ended December 31,
	2020		2019		2018
Cash flows from operating activities:
Net income attributable to NGHC	$	513,331	$	348,069	$	207,354
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Net (gain) loss on investments	(7,094)		(1,026)		1,571
Depreciation and amortization	26,244		23,280		20,668
Net amortization of premium net of discount on debt securities	700		233		581
Stock-based compensation expense	12,421		10,996		9,020
Equity in undistributed net income of subsidiaries	(513,023)		(365,932)		(232,101)
Changes in assets and liabilities:
Accrued investment income	835		(108)		(500)
Prepaid and other assets	15,499		4,927		23,334
Accounts payable, accrued expenses and other liabilities	301,328		(1,728)		8,993
Net cash provided by operating activities	350,241		18,711		38,920
Cash flows from investing activities:
Purchases of:
Debt securities, available-for-sale	(6,986)		(46,832)		(70,308)
Short-term investments	(389,372)		(284,875)		(342,137)
Property and equipment	(9,840)		(75,673)		(73,563)
Proceeds from:
Sale of debt securities, available-for-sale	91,301		20,723		16,052
Maturity of debt securities, available-for-sale	16,813		10,218		2,208
Sale of short-term investments	394,296		397,945		225,395
Distributions received from subsidiaries	102,150		50,825		130,772
Contributions and acquisition of subsidiaries	(80,000)		(17,091)		(9,875)
Net cash provided by (used in) investing activities	118,362		55,240		(121,456)
Cash flows from financing activities:
Common stock repurchased	(8,482)		—		—
Payments of debt issuance costs	—		(1,134)		—
Repayments of debt and return of capital	—		(20,000)		(30,000)
Issuances of common and preferred stock, net of fees	—		—		162,120
Issuance of common stock — employee share options	2,635		594		1,978
Taxes paid related to net share settlement of equity awards	(3,678)		(3,734)		(3,024)
Dividends paid to common and preferred shareholders	(56,299)		(52,781)		(48,611)
Net cash (used in) provided by financing activities	(65,824)		(77,055)		82,463
Net increase (decrease) in cash and cash equivalents	402,779		(3,104)		(73)
Cash and cash equivalents, beginning of the year	852		3,956		4,029
Cash and cash equivalents, end of the year	$	403,631	$	852	$	3,956

See accompanying notes to condensed financial statements.

Schedule II

NATIONAL GENERAL HOLDINGS CORP.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

NOTES — PARENT COMPANY ONLY

1. Basis of Presentation

In the parent-company-only financial statements, the Company’s investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. The Company’s share of net income of its unconsolidated subsidiaries is included in consolidated income using the equity method. The parent-company-only financial statements should be read in conjunction with the Company’s consolidated financial statements. Certain prior period amounts have been reclassified to conform to the current-year presentation.

2. Debt

For information relating to debt, see Note 11, “Debt” in the notes to the Company’s consolidated financial statements.

3. Dividends

For information relating to cash dividends paid to the registrant or the Company by its consolidated subsidiaries and investees accounted for by the equity method, see Note 18, “Statutory Financial Data, Risk-Based Capital and Dividend Restrictions” in the notes to the Company’s consolidated financial statements.

4. Subsequent Events

For information relating to subsequent events, see Note 22, “Subsequent Events” in the notes to the Company’s consolidated financial statements.

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Schedule III - Supplementary Insurance Information

12 Months Ended

Dec. 31, 2020

SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract]

Schedule III - Supplementary Insurance Information

Schedule III

NATIONAL GENERAL HOLDINGS CORP.

SUPPLEMENTARY INSURANCE INFORMATION

(In Thousands)

	As of December 31,						Year Ended December 31,
Segment	Deferred Acquisition Costs		Unpaid Loss and Loss Adjustment Expense Reserves		Unearned Premiums		Net Earned Premium		Net Investment Income		Loss and Loss Adjustment Expense Incurred		Deferred Acquisition Costs Amortization		Other Operating Expenses		Net Written Premium
2020
Property and Casualty	$	259,163	$	2,708,171	$	2,173,399	$	3,809,153	$	—	$	2,505,189	$	613,905	$	67,381	$	3,934,463
Accident and Health	26,742		180,927		10,307		685,467		—		318,893		21,908		287,375		686,381
Corporate and Other	—		—		—		—		118,257		—		—		—		—
Total	$	285,905	$	2,889,098	$	2,183,706	$	4,494,620	$	118,257	$	2,824,082	$	635,813	$	354,756	$	4,620,844
2019
Property and Casualty	$	239,293	$	2,734,540	$	2,210,851	$	3,455,023	$	—	$	2,543,788	$	539,816	$	65,203	$	3,564,015
Accident and Health	24,230		151,874		8,368		663,019		—		310,680		37,541		184,807		660,606
Corporate and Other	—		—		—		—		141,233		—		—		—		—
Total	$	263,523	$	2,886,414	$	2,219,219	$	4,118,042	$	141,233	$	2,854,468	$	577,357	$	250,010	$	4,224,621
2018
Property and Casualty	$	226,188	$	2,685,879	$	2,120,283	$	3,115,789	$	—	$	2,340,881	$	495,009	$	55,531	$	3,201,174
Accident and Health	25,220		271,280		36,554		616,413		—		321,345		15,784		168,942		626,539
Corporate and Other	—		—		—		—		119,034		—		—		—		—
Total	$	251,408	$	2,957,159	$	2,156,837	$	3,732,202	$	119,034	$	2,662,226	$	510,793	$	224,473	$	3,827,713

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Schedule IV - Reinsurance

12 Months Ended

Dec. 31, 2020

SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract]

Schedule IV - Reinsurance

Schedule IV

NATIONAL GENERAL HOLDINGS CORP.

REINSURANCE

(In Thousands)

Year Ended December 31,	Gross Amount		Ceded to Other Companies		Assumed from Other Companies		Net Amount		Percent of Amount Assumed to Net
2020
Earned Premiums	$	5,613,630	$	(1,175,440)	$	56,430	$	4,494,620	1.3	%
2019
Earned Premiums	$	5,486,835	$	(1,449,365)	$	80,572	$	4,118,042	2.0	%
2018
Earned Premiums	$	5,049,512	$	(1,440,575)	$	123,265	$	3,732,202	3.3	%

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Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations

12 Months Ended

Dec. 31, 2020

SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters [Abstract]

Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations

Schedule VI

NATIONAL GENERAL HOLDINGS CORP.

SUPPLEMENTAL INFORMATION CONCERNING

PROPERTY-CASUALTY INSURANCE OPERATIONS

(In Thousands)

	Losses and Loss Adjustment Expenses Incurred Related to				Paid Losses and Loss Adjustment Expenses
Year Ended December 31,	Current Year		Prior Years
2020
Property and Casualty (1)	$	2,477,177	$	28,012	$	2,407,847
Accident and Health	342,714		(23,821)		300,271
Total	$	2,819,891	$	4,191	$	2,708,118
2019
Property and Casualty (1)	$	2,493,268	$	50,520	$	2,427,676
Accident and Health	356,036		(45,356)		328,887
Total	$	2,849,304	$	5,164	$	2,756,563
2018
Property and Casualty (1)	$	2,343,938	$	(3,057)	$	2,209,570
Accident and Health	352,322		(30,977)		305,667
Total	$	2,696,260	$	(34,034)	$	2,515,237

(1) Property and Casualty includes the Reciprocal Exchanges.

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and variable interest entities (“VIE”) of which the Company is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated in consolidation.

Use of Estimates and Assumptions

Use of Estimates and Assumptions

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s principal estimates include unpaid losses and loss adjustment expense reserves; deferred acquisition costs; reinsurance recoverable, including the provision for uncollectible amounts; determining the fair value of investments; determining the fair value of stock-based awards for stock compensation; the valuation of intangibles and the determination of goodwill and goodwill impairment; and income taxes. In developing the estimates and assumptions, management uses all available evidence. Because of uncertainties associated with estimating the amounts, timing and likelihood of possible outcomes, actual results could differ from estimates.

Premiums and Other Receivables

Premiums and Other ReceivablesThe Company recognizes earned premium on a pro rata basis over the terms of the policies, generally periods of six or twelve months. Unearned premiums represent the portion of premiums written applicable to the unexpired terms of the policies.

Allowance for Uncollectible Premiums

Net premiums receivable represent premiums written and not yet collected, net of an allowance for uncollectible premiums. The Company regularly evaluates premiums and other receivables and adjusts its allowance for uncollectible amounts as appropriate. Receivables specifically identified as uncollectible are charged to expense in the period the determination is made. Premium refunds are recorded as an offset against gross premium written.Premiums and other receivables are reported net of an allowance for expected credit losses. The allowance is based upon the Company’s ongoing review of amounts outstanding, historical loss data, including delinquencies and write-offs, current and forecasted economic conditions, and other relevant factors. The Company uses a loss-rate method to estimate the expected credit losses. Credit risk is partially mitigated by the Company’s ability to cancel the policy if the policyholder does not pay the premium.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company’s cash and cash equivalents include cash on hand, money market instruments and other debt instruments with a maturity of 90 days or less when purchased. Certain securities with original maturities of 90 days or less that are held as a portion of fixed maturity portfolios are classified as short-term investments.

Restricted Cash and Cash Equivalents and Short-term Investments

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents balances relate primarily to deposits in certain states in order to conduct business and certain third-party agreements. The Company also utilizes trust accounts to collateralize business with its reinsurance counterparties. Amounts described as restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.

Short-term Investments

Short-term investments include commercial paper, U.S. Treasury bills and money market funds with maturities between 91 days and less than one year at the date of acquisition.

Deferred Acquisition Costs

Deferred Acquisition Costs

Deferred acquisition costs include commissions, premium taxes, payments to affinity partners, and other direct sales costs that are directly related to successful acquisition of insurance policies. These costs, net of ceding allowances, are deferred and amortized to the extent recoverable, over the policy period in which the related premiums are earned and/or over the expected life of the policy as applicable to A&H. Anticipated investment income is considered in determining the recoverability of these costs. Management believes that these costs are recoverable.

Ceding Commission Revenue and Service and fee income

Ceding Commission Revenue

Commissions on reinsurance premiums ceded are earned in a manner consistent with the recognition of the costs to acquire the underlying policies on a pro-rata basis over the terms of the policies reinsured. The portion of ceding commission which represents reimbursement of acquisition costs related to the underlying policies is recorded as an offset to acquisition costs and other underwriting expenses. Commission in excess of acquisition costs is recorded as ceding commission income over the terms of the policies. Certain reinsurance agreements contain provisions whereby the ceding commission rates vary based on the loss experience of the policies covered by the agreements. The Company records ceding commission revenue based on its current estimate of losses on the reinsured policies subject to variable commission rates. The Company records adjustments to the ceding commission revenue in the period that changes in the estimated losses are determined.

Service and Fee Income

The Company currently generates policy service and fee income from installment fees, late payment fees, and other finance and processing fees related to policy cancellation, policy reinstatement and insufficient funds check returns. These fees are generally designed to offset expenses incurred in the administration of the Company’s insurance business, and are generated as follows. Installment fees are charged to permit a policyholder to pay premiums in installments rather than in a lump sum. Late payment fees are charged when premiums are remitted after the due date and any applicable grace periods. Policy cancellation fees are charged to policyholders when a policy is terminated by the policyholder prior to the expiration of the policy’s term or renewal term, as applicable. Reinstatement fees are charged to reinstate a policy that has lapsed, generally as a result of non-payment of premiums. Insufficient fund fees are charged when the customer’s payment is returned by the financial institution.

All fee income is recognized as follows. An installment fee is recognized at the time each policy installment bill is due. A late payment fee is recognized when the customer’s payment is not received after the listed due date and any applicable grace period. A policy cancellation fee is recognized at the time the customer’s policy is canceled. A policy reinstatement fee is recognized when the customer’s policy is reinstated. An insufficient fund fee is recognized when the customer’s payment is returned by the financial institution. The amounts charged are primarily intended to compensate the Company for the administrative costs associated with processing and administering policies that generate insurance premium; however, the amounts of fees charged are not dependent on the amount or period of insurance coverage provided and do not entail any obligation to return any portion of those funds. The direct and indirect costs associated with generating fee income are not separately tracked. The Company estimates an allowance for doubtful accounts based on a percentage of fee income.

The Company also collects service fees in the following forms:

(i) Commission and general agent fees by selling policies issued by third-party insurance companies. The Company does not bear insurance underwriting risk with respect to these policies. Commission income and general

agent fees are recognized, net of an allowance for estimated policy cancellations, at the time when the policy is sold. The allowance for estimated third-party cancellations is periodically evaluated and adjusted as necessary.

(ii) Group health administrative fees by performing enrollment and claims services for self-funded employer plans. The Company does not bear insurance underwriting risk in these administrative activities. Group health administrative fees are recognized pro-rata over the term of the administrative contract with the employer, which generally covers twelve months.

Loss and Loss Adjustment Expenses

Loss and Loss Adjustment Expense

Loss and loss adjustment expense (“LAE”) represent the estimated ultimate net costs of all reported and unreported losses incurred through the period end. The reserves for unpaid losses and LAE represent the accumulation of estimates for both reported losses and those incurred but not reported relating to direct insurance and assumed reinsurance agreements. Estimates for salvage and subrogation recoverables are recognized at the time losses are incurred and netted against the provision for losses. Insurance liabilities are based on estimates, and the

ultimate liability may vary from such estimates. These estimates are regularly reviewed and adjustments are included in the period in which adjustments are determined.

Business Combinations

Business Combinations

The Company accounts for business combinations under the acquisition method of accounting, which requires the Company to record assets acquired, liabilities assumed and any noncontrolling interest in the acquiree at their respective fair values as of the acquisition date. The Company accounts for the insurance and reinsurance contracts under the acquisition method as new contracts, which requires the Company to record assets and liabilities at fair value. The Company adjusts the fair value of loss and LAE reserves starting with the acquired loss reserves based on the Company’s existing accounting policies and then discounting them based on expected reserve payout patterns using a current risk-free rate of interest. This risk-free interest rate is then adjusted based on different cash flow scenarios that use different payout and ultimate reserve assumptions deemed to be reasonably possible based upon the inherent uncertainties present in determining the amount and timing of payment of such reserves. The difference between the acquired loss and LAE reserves and the Company’s best estimate of the fair value of such reserves at the acquisition date is recorded as either an intangible asset (net loss reserve discount) or another liability (net loss reserve plus a risk premium), as applicable and is amortized proportionately to the reduction in the related loss reserves (e.g., over the estimated payout period of the acquired loss and LAE reserves). The Company assigns fair values to intangible assets acquired based on valuation techniques including the income and market approaches. The Company records contingent consideration at fair value based on the terms of the purchase agreement with subsequent changes in fair value recorded through earnings. The purchase price is the fair value of the total consideration conveyed to the seller and we record the excess (deficiency) of the purchase price over the fair value of the acquired net assets, where applicable, as goodwill or bargain purchase gain. The Company expenses costs associated with the acquisition of a business in the period incurred.

Goodwill and Intangible Assets

Goodwill and Intangible Assets

A purchase price paid that is in excess of net assets, i.e., goodwill, arising from a business combination is recorded as an asset and is not amortized. Intangible assets with an indefinite useful life are not amortized. Goodwill and intangible assets are tested for impairment on an annual basis or more frequently if changes in circumstances indicate that the carrying amount may not be recoverable. If the goodwill or intangible asset is impaired, it is written down to its realizable value with a corresponding expense reflected in general and administrative expenses in the consolidated statements of income.

Intangible assets that have finite lives, including but not limited to, agent and customer relationships and trademarks, are amortized over the estimated useful life of the asset. For intangible assets with finite lives, impairment is recognized if the carrying amount is not recoverable and exceeds the fair value of the intangible asset. Generally intangible assets with finite lives are only tested for impairment if indicators of impairment, i.e, triggers, are identified. Triggers include, but are not limited to, a significant adverse change in the extent, manner or length of time in which the intangible asset is being used or a significant adverse change in legal factors or in the business climate that could affect the value of the other intangible asset.

Investments

Investments

The Company has classified its debt securities as available for sale measured at fair value with unrealized gains and losses reported as a separate component of comprehensive income. Equity investments (except those accounted for under the equity method, and those that result in consolidation of the investee and certain other investments) are measured at fair value with all gains and losses reported in net income. The Company may sell its available-for-sale and equity securities in response to changes in interest rates, risk/reward characteristics, liquidity needs or other factors. Available-for-sale and equity securities are reported at their estimated fair values based on quoted market prices or recognized pricing services.

Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method. Net investment income is recognized when earned and includes interest

and dividend income together with amortization of market premiums and discounts using the effective yield method and is net of investment management fees and other expenses. For mortgage-backed securities and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and revised as necessary. Any adjustments required due to the change in effective yields and maturities are recognized on a prospective basis through yield adjustments.

As of December 31, 2020, and 2019, the Company had the following major types of investments:

(i)Debt securities are classified as available-for-sale and are carried at fair value. Unrealized gains or losses on available-for-sale debt securities are reported as a component of accumulated other comprehensive income.

(ii)Mortgage and structured securities are carried at fair value. The Company recognizes income using the retrospective adjustment method based on prepayments and the estimated economic lives of the securities. The effective yield reflects actual payments to date plus anticipated future payments. These investments are recorded as debt securities, available-for-sale in the consolidated balance sheets.

(iii)Short-term investments are carried at amortized cost, which approximates fair value, and includes investments with maturities between 91 days and less than one year at the date of acquisition. Income from short-term investments is reported within net investment income.

(iv)Other investments consisted of equity method investments, in which the company has the power to influence the operating or financial decisions but does not require consolidation; common stock carried at fair value (equity securities); notes receivable; long-term certificates of deposits; and other instruments carried at fair value and at cost or amortized cost. Income from other investments is reported within net investment income. Gains or losses on equity securities are reported within net gain (loss) on investments.

Investments

Beginning on January 1, 2020, credit losses on available-for-sale debt securities are recognized through an allowance account. The Company reports accrued investment income separately from debt securities in the Consolidated Balance Sheets, and has elected not to measure an allowance for credit losses. Accrued investment income is written-off by reversing interest income through net investment income at the time the issuer of the bond defaults or is expected to default on payments. Uncollectible debt securities are written-off to net gain (loss) on investments when the Company determines that no additional payments of principal or interest will be received.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company’s estimates of fair value for financial assets and financial liabilities are based on the inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. Additionally, valuation of debt securities investments is more subjective when markets are less liquid due to lack of market-based inputs, which may increase the potential that the estimated fair value of an investment is not reflective of the price at which an actual transaction could occur. Fair values of other financial instruments which are short-term in nature approximate their carrying values.

Equity Method Investments

Equity Method Investments

The Company uses the equity method of accounting for investments in which its ownership interest enables the Company to influence operating or financial decisions of the investee, but the Company’s interest does not require consolidation. In applying the equity method, the Company records its investment at cost, and subsequently increases or decreases the carrying amount of the investment by its proportionate share of the net earnings or losses and other comprehensive income of the investee. Any dividends or distributions received are recorded as a decrease in the carrying value of the investment. The Company’s proportionate share of net income is reported in net investment income.

Stock Compensation Expense

Stock Compensation Expense

The Company recognizes stock-based compensation expense including stock options and Restricted Stock Units (“RSUs”), to be measured based on the grant date fair value of the awards, with the resulting expense recognized on a straight-line basis over the period during which the employee is required to perform service in exchange for the award. The majority of the Company’s awards are earned over a service period of three or four years.

Earnings Per Share

Earnings Per Share

Basic earnings per share are computed by dividing income available to common stockholders by the number of weighted average common shares outstanding. Dilutive earnings per share are computed by dividing income available to common stockholders, adjusted for the effects of the presumed issuance of potential common shares, by the number of weighted average common shares outstanding, plus potentially issuable shares, such as options, unvested stock-based payment awards and convertible securities.

Impairment of Long-lived Assets

Impairment of Long-lived Assets

The carrying value of long-lived assets is evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable from the estimated undiscounted future cash flows expected to result from its use and eventual disposition. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment is measured as the amount by which the carrying amount of the assets exceeds the fair value as estimated by discounted cash flows.

Income Taxes

Income Taxes

The Company joins its subsidiaries in the filing of a consolidated Federal income tax return and is party to a Federal income tax allocation agreement. Under the tax allocation agreement, the Company pays to or receives from its subsidiaries the amount, if any, by which the group’s Federal income tax liability was affected by virtue of inclusion of the subsidiary in the consolidated Federal return. The Reciprocal Exchanges are not party to the tax allocation agreement and file separate tax returns.

Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. The deferred tax asset and liability primarily consists of book versus tax differences for earned premiums, loss and LAE reserve discounting, deferred acquisition costs, earned but unbilled premiums, and unrealized holding gains and losses on debt securities. Changes in deferred income tax assets and liabilities that are associated with components of other comprehensive income, primarily unrealized investment gains and losses, are recorded directly to other comprehensive income. Otherwise, changes in deferred income tax assets and liabilities are included as a component of income tax expense. In assessing the recoverability of deferred tax assets, management considers whether it is more likely than not that the Company will generate future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. If necessary, the Company establishes a valuation allowance to reduce the deferred tax assets to the amounts more likely than not to be realized.

The Company recognizes tax benefits for tax positions that are more likely than not to be sustained upon examination by taxing authorities. The Company’s policy is to prospectively classify accrued interest and penalties related to any unrecognized tax benefits in its income tax provision.

Reinsurance

Reinsurance

The Company cedes insurance risk under various reinsurance agreements. The Company seeks to reduce the loss that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring

certain levels of risk with other insurance enterprises. The Company remains liable with respect to any insurance ceded if the assuming companies are unable to meet their obligations under these reinsurance agreements.

Reinsurance premiums, losses and LAE ceded to other companies are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Earned premiums and losses and LAE incurred ceded to other companies have been recorded as a reduction of premium revenue and losses and LAE. Commissions allowed by reinsurers on business ceded have been recorded as ceding commission revenue to the extent the ceding commission exceeds acquisition costs. Reinsurance recoverable is reported based on the portion of reserves and paid losses and LAE that are ceded to other companies. If the Company determines that a reinsurance contract does not transfer sufficient risk, it accounts for the contract under deposit accounting.

Amounts recoverable from reinsurers are estimated in a manner consistent with the associated claim liability. The Company reports its reinsurance recoverable net of an allowance for estimated uncollectible reinsurance. The allowance is based upon the Company’s ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, applicable coverage defenses, and other relevant factors. The Company evaluates and monitors the financial condition of its reinsurers under voluntary reinsurance arrangements to minimize its exposure to significant losses from reinsurer insolvencies.

Property and Equipment

Property and Equipment

Property and equipment are recorded at cost. Maintenance and repairs are charged to operations as incurred. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, as follows:

Buildings and improvements	30 years
Leasehold improvements	Remaining lease term
Other equipment	3 to 20 years
Hardware and software	3 to 5 years

The Company capitalizes costs of computer software developed or obtained for internal use that is specifically identifiable, has determinable lives and relates to future use.

Variable Interest Entities and Noncontrolling Interest

Variable Interest Entities

A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains and losses of the entity. The Company’s consolidation principles require the inclusion of VIEs in which the Company is deemed the primary beneficiary. The primary beneficiary is the entity that has both (1) the power to direct the activities of the VIE that most significantly affect that entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE.

The consolidated financial statements also include the accounts and operations of Adirondack Insurance Exchange, a New York reciprocal insurer, and New Jersey Skylands Insurance Association, a New Jersey reciprocal insurer (together, the “Reciprocal Exchanges” or “Exchanges”), VIEs of which the Company is the primary beneficiary. The Company does not own the Reciprocal Exchanges but is paid a fee to manage them.

The Company consolidates the Reciprocal Exchanges as it has determined that these are VIEs of which the Company is the primary beneficiary. The Company manages the business operations of the Reciprocal Exchanges and has the ability to direct their activities. The Company receives a management fee for the services provided to the Reciprocal Exchanges. The Reciprocal Exchanges are insurance carriers organized as unincorporated associations. In the event of dissolution, policyholders would share any residual unassigned surplus in the same proportion as the amount of insurance purchased but are not subject to assessment for any deficit in unassigned surplus of the

Reciprocal Exchanges. The assets of the Reciprocal Exchanges can be used only to settle the obligations of the Reciprocal Exchanges and general creditors to their liabilities have no recourse to the Company as primary beneficiary. The results of operations of the Reciprocal Exchanges and the management companies are included in the Company’s P&C segment.

Noncontrolling Interest

Non-redeemable noncontrolling interest is the portion of equity (net assets) not attributable, directly or indirectly, to a parent. The Company has no ownership interest in the Reciprocal Exchanges. Therefore, the difference between the value of their assets and liabilities represent the value of the noncontrolling interest.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk are primarily cash and cash equivalents, investments and premiums and other receivables. Investments are diversified through many industries and geographic regions through the use of an investment manager who employs different investment strategies. The Company limits the amount of credit exposure with any one financial institution and believes that no significant concentration of credit risk exists with respect to cash and investments. At December 31, 2020 and 2019, the outstanding premiums and other receivables balance was generally diversified due to the Company’s diversified customer base. To reduce credit risk, the Company performs ongoing evaluations for uncollectible amounts. The Company also has receivables from its reinsurers. See Note 10, “Reinsurance” for additional information about concentration of credit risk. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company periodically evaluates the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. It is the policy of management to review all outstanding receivables at period end as well as the bad debt write-offs experienced in the past and establish an allowance for uncollectible accounts, if deemed necessary.

Recent Accounting Standards

Accounting Standards

Recent Accounting Standards, Adopted

Standard	Description	Date of Adoption	Effect on the Company
ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and related amendments.	This standard changed the impairment model to a new forward-looking expected loss model for most financial assets and certain other instruments. The standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which generally results in earlier recognition of allowances for credit losses on loans and other financial instruments. Many of the loss estimation techniques applied prior the adoption of the standard are still permitted, although the inputs to those techniques changed to reflect the full amount of expected credit losses. The Company continues to use judgement to determine which loss estimation method is appropriate for its circumstances. The standard became effective for interim and annual reporting periods beginning after December 15, 2019 and requires using a modified retrospective approach, recognizing a cumulative-effect adjustment as of the beginning of the first reporting period in which the standard is effective.	January 1, 2020	The Company adopted ASU 2016-13 using the modified retrospective approach and recorded a cumulative-effect adjustment, net of tax of $(863) and $(147) to the opening balance of retained earnings and non-controlling interest, respectively. The Company also increased the allowance for premiums receivable, reinsurance recoverable and deferred taxes by the same cumulative amount.
ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.	This standard established a one-step process for testing the value of the goodwill which an entity carries. ASU 2017-04 requires the goodwill impairment to be measured as the excess of the reporting unit’s carrying amount over its fair value.	January 1, 2020	The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Standards, Not Yet Adopted

Standard	Description	Effective Date	Effect on the Company
ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.	This standard simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification (“ASC”) 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application, among other things.	January 1, 2021	The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.
ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts and related amendments.	This standard makes targeted improvements to the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The standard is intended to: (i) improve the timeliness of recognizing changes in the liability for future policy benefits and modify the rate used to discount future cash flows, (ii) simplify and improve the accounting for certain market-based options or guarantees associated with deposit or account balance contracts, (iii) simplify the amortization of deferred acquisition costs and (iv) improve the effectiveness of the required disclosures.	January 1, 2022	The Company is currently evaluating the impact this guidance will have on its consolidated financial condition, results of operations, cash flows and disclosures.

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Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Schedule of Useful Lives of Property and Equipment

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, as follows:

Buildings and improvements	30 years
Leasehold improvements	Remaining lease term
Other equipment	3 to 20 years
Hardware and software	3 to 5 years

The composition of property and equipment consisted of the following:

	December 31,
	2020						2019
	Cost		Accumulated Depreciation		Net Value		Cost		Accumulated Depreciation		Net Value
Land	$	5,788	$	—	$	5,788	$	5,788	$	—	$	5,788
Buildings	26,245		(3,416)		22,829		24,997		(2,669)		22,328
Leasehold improvements	39,591		(17,305)		22,286		34,238		(12,372)		21,866
Other equipment	26,909		(3,916)		22,993		24,627		(3,044)		21,583
Hardware and software	417,970		(241,420)		176,550		387,618		(196,294)		191,324
Finance lease right-of-use assets	38,867		(22,631)		16,236		37,515		(16,511)		21,004
Operating lease right-of-use assets	111,001		—		111,001		119,934		—		119,934
Total	$	666,371	$	(288,688)	$	377,683	$	634,717	$	(230,890)	$	403,827
NGHC	$	657,312	$	(279,629)	$	377,683	$	625,658	$	(222,072)	$	403,586
Reciprocal Exchanges	9,059		(9,059)		—		9,059		(8,818)		241
Total	$	666,371	$	(288,688)	$	377,683	$	634,717	$	(230,890)	$	403,827

Accounting Standards

Recent Accounting Standards, Adopted

Standard	Description	Date of Adoption	Effect on the Company
ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and related amendments.	This standard changed the impairment model to a new forward-looking expected loss model for most financial assets and certain other instruments. The standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which generally results in earlier recognition of allowances for credit losses on loans and other financial instruments. Many of the loss estimation techniques applied prior the adoption of the standard are still permitted, although the inputs to those techniques changed to reflect the full amount of expected credit losses. The Company continues to use judgement to determine which loss estimation method is appropriate for its circumstances. The standard became effective for interim and annual reporting periods beginning after December 15, 2019 and requires using a modified retrospective approach, recognizing a cumulative-effect adjustment as of the beginning of the first reporting period in which the standard is effective.	January 1, 2020	The Company adopted ASU 2016-13 using the modified retrospective approach and recorded a cumulative-effect adjustment, net of tax of $(863) and $(147) to the opening balance of retained earnings and non-controlling interest, respectively. The Company also increased the allowance for premiums receivable, reinsurance recoverable and deferred taxes by the same cumulative amount.
ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.	This standard established a one-step process for testing the value of the goodwill which an entity carries. ASU 2017-04 requires the goodwill impairment to be measured as the excess of the reporting unit’s carrying amount over its fair value.	January 1, 2020	The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Standards, Not Yet Adopted

Standard	Description	Effective Date	Effect on the Company
ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.	This standard simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification (“ASC”) 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application, among other things.	January 1, 2021	The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.
ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts and related amendments.	This standard makes targeted improvements to the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The standard is intended to: (i) improve the timeliness of recognizing changes in the liability for future policy benefits and modify the rate used to discount future cash flows, (ii) simplify and improve the accounting for certain market-based options or guarantees associated with deposit or account balance contracts, (iii) simplify the amortization of deferred acquisition costs and (iv) improve the effectiveness of the required disclosures.	January 1, 2022	The Company is currently evaluating the impact this guidance will have on its consolidated financial condition, results of operations, cash flows and disclosures.

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Allowance for Expected Credit Losses (Tables)

12 Months Ended

Dec. 31, 2020

Credit Loss [Abstract]

Premiums and Other Receivables, Allowance for Credit Losses

The following tables present the balances of premiums and other receivables, net of the allowance for expected credit losses, as of January 1, 2020, and December 31, 2020, and changes in the allowance for expected credit losses for the year ended December 31, 2020.

	Year Ended December 31, 2020
	Premiums and Other Receivables, Net		Allowance for Expected Credit Losses
Balance, beginning of the year	$	1,428,948	$	24,067
Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020			762
Current period provision for expected credit losses (1)			94,374
Write-offs of uncollectible premiums and other receivables			(96,422)
Balance, end of the year	$	1,545,380	$	22,781

(1) Current period charges for expected losses are recorded in general and administrative expenses.

Reinsurance Recoverable, Allowance for Credit Losses

The following tables present the balances of reinsurance recoverable, net of the allowance for estimated uncollectible reinsurance, as of January 1, 2020, and December 31, 2020, and changes in the allowance for estimated uncollectible reinsurance for the year ended December 31, 2020.

	Year Ended December 31, 2020
	Reinsurance Recoverable, Net		Allowance for Expected Credit Losses
Balance, beginning of the year	$	1,394,308	$	—
Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020			517
Current period provision for expected credit losses			293
Balance, end of the year	$	1,218,930	$	810

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Investments (Tables)

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Available-for-Sale Debt Securities

The following tables summarize the unrealized positions for available-for-sale debt securities, disaggregated by major security type.

	Amortized		Allowance for		Gross Unrealized				Fair
December 31, 2020	Cost		Credit Losses (1)		Gains		Losses		Value
U.S. Treasury	$	51,749	$	—	$	3,199	$	—	$	54,948
Federal agencies	258		—		3		—		261
States and political subdivision bonds	304,687		—		17,758		(4)		322,441
Foreign government	1,764		—		119		—		1,883
Corporate bonds	1,992,193		—		141,234		(126)		2,133,301
Residential mortgage-backed securities	1,064,041		—		42,597		(222)		1,106,416
Commercial mortgage-backed securities	596,408		—		58,476		(252)		654,632
Asset-backed securities	27,988		—		1,140		(236)		28,892
Structured securities	195,125		—		1,009		(1,778)		194,356
Total	$	4,234,213	$	—	$	265,535	$	(2,618)	$	4,497,130
NGHC	$	3,929,138	$	—	$	260,138	$	(2,361)	$	4,186,915
Reciprocal Exchanges	305,075		—		5,397		(257)		310,215
Total	$	4,234,213	$	—	$	265,535	$	(2,618)	$	4,497,130

(1) Represents the amount of impairment that has resulted from credit-related factors recorded in net gain (loss) on investments.

	Amortized		Gross Unrealized				Fair
December 31, 2019	Cost		Gains		Losses		Value
U.S. Treasury	$	65,037	$	1,992	$	(23)	$	67,006
Federal agencies	3,907		8		—		3,915
States and political subdivision bonds	298,345		4,778		(1,441)		301,682
Foreign government	1,762		40		—		1,802
Corporate bonds	1,859,736		59,184		(2,357)		1,916,563
Residential mortgage-backed securities	1,265,830		15,747		(4,117)		1,277,460
Commercial mortgage-backed securities	585,044		27,261		(112)		612,193
Asset-backed securities	74,465		1,194		(48)		75,611
Structured securities	222,565		226		(2,665)		220,126
Total	$	4,376,691	$	110,430	$	(10,763)	$	4,476,358
NGHC	$	4,057,501	$	104,951	$	(10,343)	$	4,152,109
Reciprocal Exchanges	319,190		5,479		(420)		324,249
Total	$	4,376,691	$	110,430	$	(10,763)	$	4,476,358

Available-for-Sale Debt Securities Classified by Contractual Maturity

The amortized cost and fair value of available-for-sale debt securities held as of December 31, 2020, by contractual maturity, are shown in the table below. Actual maturities may differ from contractual maturities because some borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	NGHC				Reciprocal Exchanges				Total
December 31, 2020	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	61,921	$	62,731	$	—	$	—	$	61,921	$	62,731
Due after one year through five years	1,006,518		1,075,299		69,060		71,231		1,075,578		1,146,530
Due after five years through ten years	1,050,331		1,127,435		65,495		67,259		1,115,826		1,194,694
Due after ten years	270,237		280,867		22,214		22,368		292,451		303,235
Mortgage-backed securities	1,540,131		1,640,583		148,306		149,357		1,688,437		1,789,940
Total	$	3,929,138	$	4,186,915	$	305,075	$	310,215	$	4,234,213	$	4,497,130

Gross Unrealized Losses

The tables below summarize the gross unrealized losses on debt securities classified as available-for-sale, 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, 2020	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
States and political subdivision bonds	$	1,111	$	(4)	$	—	$	—	$	1,111	$	(4)
Corporate bonds	29,161		(126)		—		—		29,161		(126)
Residential mortgage-backed securities	58,742		(222)		—		—		58,742		(222)
Commercial mortgage-backed securities	40,891		(252)		—		—		40,891		(252)
Asset-backed securities	5,041		(228)		151		(8)		5,192		(236)
Structured securities	60,359		(514)		43,906		(1,264)		104,265		(1,778)
Total	$	195,305	$	(1,346)	$	44,057	$	(1,272)	$	239,362	$	(2,618)
NGHC	$	137,628	$	(1,135)	$	40,103	$	(1,226)	$	177,731	$	(2,361)
Reciprocal Exchanges	57,677		(211)		3,954		(46)		61,631		(257)
Total	$	195,305	$	(1,346)	$	44,057	$	(1,272)	$	239,362	$	(2,618)

	Less Than 12 Months				12 Months or More				Total
December 31, 2019	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury	$	19,903	$	(23)	$	500	$	—	$	20,403	$	(23)
States and political subdivision bonds	106,103		(1,415)		2,580		(26)		108,683		(1,441)
Corporate bonds	586,817		(2,253)		5,976		(104)		592,793		(2,357)
Residential mortgage-backed securities	410,484		(4,074)		3,983		(43)		414,467		(4,117)
Commercial mortgage-backed securities	18,250		(105)		748		(7)		18,998		(112)
Asset-backed securities	5,406		(29)		920		(19)		6,326		(48)
Structured securities	40,979		(94)		109,880		(2,571)		150,859		(2,665)
Total	$	1,187,942	$	(7,993)	$	124,587	$	(2,770)	$	1,312,529	$	(10,763)
NGHC	$	1,104,244	$	(7,654)	$	117,681	$	(2,689)	$	1,221,925	$	(10,343)
Reciprocal Exchanges	83,698		(339)		6,906		(81)		90,604		(420)
Total	$	1,187,942	$	(7,993)	$	124,587	$	(2,770)	$	1,312,529	$	(10,763)

Net Investment Income

The components of net investment income consisted of the following:

	Year Ended December 31,
	2020		2019		2018
Cash and short-term investments	$	542	$	4,075	$	1,659
Debt securities, available-for-sale	119,873		124,379		107,077
Other, net (related parties - $(2,230), $7,718 and $4,876)	2,728		17,353		14,597
Investment income	123,143		145,807		123,333
Investment expenses	(4,886)		(4,574)		(4,299)
Net investment income	$	118,257	$	141,233	$	119,034
NGHC	$	111,001	$	132,595	$	110,159
Reciprocal Exchanges	7,256		8,638		8,875
Net investment income	$	118,257	$	141,233	$	119,034

Net Realized Gains and Losses on Investments

The table below indicates realized gains and losses on investments. Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method.

	Year Ended December 31,
	2020		2019		2018
Debt securities, available-for-sale:
Gross gains	$	29,666	$	23,178	$	4,590
Gross losses	(1,483)		(3,457)		(22,860)
Net realized gain (loss) on debt securities, available-for-sale	28,183		19,721		(18,270)
Other, net (1)	(1,606)		(6,248)		(11,275)
Net realized gain (loss) on investments	$	26,577	$	13,473	$	(29,545)
NGHC	$	14,145	$	13,603	$	(26,179)
Reciprocal Exchanges	12,432		(130)		(3,366)
Net realized gain (loss) on investments	$	26,577	$	13,473	$	(29,545)

(1) Includes gains and losses on publicly traded equity securities, other investments, and foreign currency.

Credit Quality of Investments

The tables below summarize the credit quality of debt securities, as rated by Standard & Poor’s (“S&P”). If a security is not rated by S&P, an S&P equivalent is determined based on ratings from similar rating agencies. Securities that are not rated are included in the “BB+ and lower” category.

	NGHC						Reciprocal Exchanges
December 31, 2020	Amortized Cost		Fair Value		Percentage		Amortized Cost		Fair Value		Percentage
U.S. Treasury	$	37,307	$	40,213	1.0	%	$	14,441	$	14,734	4.7	%
AAA	523,929		568,028		13.6	%	28,232		28,496		9.2	%
AA, AA+, AA-	1,428,942		1,507,760		36.0	%	150,794		152,059		49.0	%
A, A+, A-	1,106,964		1,167,933		27.9	%	42,283		43,605		14.1	%
BBB, BBB+, BBB-	818,523		888,515		21.2	%	69,325		71,321		23.0	%
BB+ and lower	13,473		14,466		0.3	%	—		—		—	%
Total	$	3,929,138	$	4,186,915	100.0	%	$	305,075	$	310,215	100.0	%

	NGHC						Reciprocal Exchanges
December 31, 2019	Amortized Cost		Fair Value		Percentage		Amortized Cost		Fair Value		Percentage
U.S. Treasury	$	52,108	$	53,599	1.3	%	$	12,929	$	13,407	4.1	%
AAA	515,869		537,508		12.9	%	20,947		21,555		6.6	%
AA, AA+, AA-	1,677,787		1,697,220		40.9	%	120,113		121,720		37.5	%
A, A+, A-	954,312		976,468		23.5	%	116,747		119,041		36.7	%
BBB, BBB+, BBB-	795,594		823,239		19.8	%	48,021		48,093		14.8	%
BB+ and lower	61,831		64,075		1.6	%	433		433		0.3	%
Total	$	4,057,501	$	4,152,109	100.0	%	$	319,190	$	324,249	100.0	%

The tables below summarize the investment quality of the corporate bond holdings and industry concentrations.

December 31, 2020	AAA		AA+, AA, AA-		A+,A,A-		BBB+, BBB, BBB-		BB+ or Lower		Fair Value		% of Corporate Bonds Portfolio
Financial Institutions	—	%	2.3	%	24.1	%	14.1	%	—	%	$	863,046	40.5	%
Industrials	0.3	%	3.2	%	25.5	%	27.6	%	0.1	%	1,208,646		56.7	%
Utilities/Other	—	%	—	%	1.6	%	1.2	%	—	%	61,609		2.8	%
Total	0.3	%	5.5	%	51.2	%	42.9	%	0.1	%	$	2,133,301	100.0	%
NGHC	0.3	%	5.5	%	49.2	%	39.5	%	0.1	%	$	2,018,325	94.6	%
Reciprocal Exchanges	—	%	—	%	2.0	%	3.4	%	—	%	114,976		5.4	%
Total	0.3	%	5.5	%	51.2	%	42.9	%	0.1	%	$	2,133,301	100.0	%

December 31, 2019	AAA		AA+, AA, AA-		A+,A,A-		BBB+, BBB, BBB-		BB+ or Lower		Fair Value		% of Corporate Bonds Portfolio
Financial Institutions	—	%	3.6	%	25.0	%	12.1	%	0.3	%	$	785,910	41.0	%
Industrials	0.7	%	2.7	%	24.1	%	29.0	%	0.1	%	1,083,959		56.6	%
Utilities/Other	—	%	—	%	1.0	%	1.4	%	—	%	46,694		2.4	%
Total	0.7	%	6.3	%	50.1	%	42.5	%	0.4	%	$	1,916,563	100.0	%
NGHC	0.3	%	5.1	%	44.0	%	40.0	%	0.4	%	$	1,720,962	89.8	%
Reciprocal Exchanges	0.4	%	1.2	%	6.1	%	2.5	%	—	%	195,601		10.2	%
Total	0.7	%	6.3	%	50.1	%	42.5	%	0.4	%	$	1,916,563	100.0	%

Cash and Cash Equivalents, Restricted Cash and Restricted Investments

Cash, cash equivalents, and restricted cash are as follows:

	December 31,
	2020		2019
Cash and cash equivalents	$	662,772	$	135,942
Restricted cash and cash equivalents	36,995		28,521
Total cash, cash equivalents and restricted cash	$	699,767	$	164,463

Restricted investments are as follows:

	December 31,
	2020		2019
Securities on deposit with state regulatory authorities	$	83,764	$	74,061
Restricted investments to trusts in certain reinsurance transactions	26,650		49,502
Total restricted investments	$	110,414	$	123,563

Cash and Cash Equivalents, Restricted Cash and Restricted Investments

Cash, cash equivalents, and restricted cash are as follows:

	December 31,
	2020		2019
Cash and cash equivalents	$	662,772	$	135,942
Restricted cash and cash equivalents	36,995		28,521
Total cash, cash equivalents and restricted cash	$	699,767	$	164,463

Restricted investments are as follows:

	December 31,
	2020		2019
Securities on deposit with state regulatory authorities	$	83,764	$	74,061
Restricted investments to trusts in certain reinsurance transactions	26,650		49,502
Total restricted investments	$	110,414	$	123,563

Other Investments

The table below summarizes the composition of other investments:

	December 31,
	2020		2019
Equity method investments (related parties - $101,143 and $109,612)	$	136,201	$	143,511
Notes receivable (related parties - $130,784 and $129,229) (1)	130,824		129,299
Long-term Certificates of Deposit (CDs), at cost	134		20,150
Investments, at fair value	5,936		9,365
Investments, at cost or amortized cost	7,960		8,962
Total	$	281,055	$	311,287

(1) See Note 16, “Related Party Transactions” for additional information.

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Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value on a Recurring Basis

Assets measured at fair value on a recurring basis are as follows:

	December 31, 2020
	Level 1		Level 2		Level 3		Total
Debt securities, available-for-sale:
U.S. Treasury	$	54,948	$	—	$	—	$	54,948
Federal agencies	261		—		—		261
States and political subdivision bonds	—		319,921		2,520		322,441
Foreign government	—		1,883		—		1,883
Corporate bonds	—		2,130,977		2,324		2,133,301
Residential mortgage-backed securities	—		1,106,416		—		1,106,416
Commercial mortgage-backed securities	—		654,632		—		654,632
Asset-backed securities	—		28,892		—		28,892
Structured securities	—		194,356		—		194,356
Total debt securities, available-for-sale	55,209		4,437,077		4,844		4,497,130
Short-term investments	171,086		20,000		—		191,086
Other investments	2,907		—		3,029		5,936
Total	$	229,202	$	4,457,077	$	7,873	$	4,694,152
NGHC	$	187,582	$	4,161,595	$	7,873	$	4,357,050
Reciprocal Exchanges	41,620		295,482		—		337,102
Total	$	229,202	$	4,457,077	$	7,873	$	4,694,152

	December 31, 2019
	Level 1		Level 2		Level 3		Total
Debt securities, available-for-sale:
U.S. Treasury	$	67,006	$	—	$	—	$	67,006
Federal agencies	3,915		—		—		3,915
States and political subdivision bonds	—		298,582		3,100		301,682
Foreign government	—		1,802		—		1,802
Corporate bonds	—		1,908,235		8,328		1,916,563
Residential mortgage-backed securities	—		1,277,460		—		1,277,460
Commercial mortgage-backed securities	—		612,193		—		612,193
Asset-backed securities	—		75,611		—		75,611
Structured securities	—		220,126		—		220,126
Total debt securities, available-for-sale:	70,921		4,394,009		11,428		4,476,358
Short-term investments	59,953		7,400		—		67,353
Other investments	4,881		—		4,484		9,365
Total	$	135,755	$	4,401,409	$	15,912	$	4,553,076
NGHC	$	116,602	$	4,091,068	$	15,912	$	4,223,582
Reciprocal Exchanges	19,153		310,341		—		329,494
Total	$	135,755	$	4,401,409	$	15,912	$	4,553,076

Reconciliation of Recurring Fair Value Measurements of Level 3 Financial Assets

The following tables provide a reconciliation of recurring fair value measurements of the Level 3 financial assets:

	States and political subdivision bonds		Corporate bonds		Other investments		Total
Balance as of January 1, 2020	$	3,100	$	8,328	$	4,484	$	15,912
Total gains (losses) for the period:
Included in net income	—		—		(531)		(531)
Included in other comprehensive income	(580)		(6,004)		—		(6,584)
Sales	—		—		(924)		(924)
Balance as of December 31, 2020	$	2,520	$	2,324	$	3,029	$	7,873
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period					$	(531)	$	(531)
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period	$	(580)	$	(6,004)			$	(6,584)

	States and political subdivision bonds		Corporate bonds		Other investments		Total
Balance as of January 1, 2019	$	3,596	$	11,767	$	7,593	$	22,956
Total gains (losses) for the period:
Included in net income	—		—		(1,851)		(1,851)
Included in other comprehensive income	(496)		(3,439)		—		(3,935)
Sales	—		—		(1,258)		(1,258)
Balance as of December 31, 2019	$	3,100	$	8,328	$	4,484	$	15,912
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period					$	(1,851)	$	(1,851)
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period	$	(496)	$	(3,439)			$	(3,935)

Schedule of Carrying Values and Estimated Fair Values of Debt not Carried at Fair Value

The following table presents the carrying amount and estimated fair value of debt not carried at fair value, excluding finance lease and other liabilities, as well as the input level used to determine the fair value:

		December 31, 2020				December 31, 2019
	Input Level	Carrying amount		Fair value		Carrying amount		Fair value
7.625% Notes	Level 2	$	97,015	$	101,400	$	96,928	$	103,560
6.75% Notes	Level 3	347,743		386,275		347,091		371,366
Subordinated Debentures	Level 3	72,168		72,139		72,168		72,103
2019 Credit Agreement	Level 3	140,000		144,063		140,000		148,272

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Deferred Acquisition Costs (Tables)

12 Months Ended

Dec. 31, 2020

Deferred Policy Acquisition Costs Disclosures [Abstract]

Deferred Acquisition Costs

The following table reflects the amounts of policy acquisition costs deferred and amortized:

	Year Ended December 31,
	2020						2019						2018
	Property and Casualty		Accident and Health		Total		Property and Casualty		Accident and Health		Total		Property and Casualty		Accident and Health		Total
Balance, beginning of the year	$	239,293	$	24,230	$	263,523	$	226,188	$	25,220	$	251,408	$	198,283	$	18,106	$	216,389
Additions	633,775		24,420		658,195		552,921		39,491		592,412		522,914		22,898		545,812
Amortization	(613,905)		(21,908)		(635,813)		(539,816)		(37,541)		(577,357)		(495,009)		(15,784)		(510,793)
Disposition	—		—		—		—		(2,940)		(2,940)		—		—		—
Change in DAC	19,870		2,512		22,382		13,105		(990)		12,115		27,905		7,114		35,019
End of the year	$	259,163	$	26,742	$	285,905	$	239,293	$	24,230	$	263,523	$	226,188	$	25,220	$	251,408
NGHC	$	239,963	$	26,742	$	266,705	$	215,986	$	24,230	$	240,216	$	206,181	$	25,220	$	231,401
Reciprocal Exchanges	19,200		—		19,200		23,307		—		23,307		20,007		—		20,007
Balance, end of the year	$	259,163	$	26,742	$	285,905	$	239,293	$	24,230	$	263,523	$	226,188	$	25,220	$	251,408

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Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Schedule of Composition of Property and Equipment

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, as follows:

Buildings and improvements	30 years
Leasehold improvements	Remaining lease term
Other equipment	3 to 20 years
Hardware and software	3 to 5 years

The composition of property and equipment consisted of the following:

	December 31,
	2020						2019
	Cost		Accumulated Depreciation		Net Value		Cost		Accumulated Depreciation		Net Value
Land	$	5,788	$	—	$	5,788	$	5,788	$	—	$	5,788
Buildings	26,245		(3,416)		22,829		24,997		(2,669)		22,328
Leasehold improvements	39,591		(17,305)		22,286		34,238		(12,372)		21,866
Other equipment	26,909		(3,916)		22,993		24,627		(3,044)		21,583
Hardware and software	417,970		(241,420)		176,550		387,618		(196,294)		191,324
Finance lease right-of-use assets	38,867		(22,631)		16,236		37,515		(16,511)		21,004
Operating lease right-of-use assets	111,001		—		111,001		119,934		—		119,934
Total	$	666,371	$	(288,688)	$	377,683	$	634,717	$	(230,890)	$	403,827
NGHC	$	657,312	$	(279,629)	$	377,683	$	625,658	$	(222,072)	$	403,586
Reciprocal Exchanges	9,059		(9,059)		—		9,059		(8,818)		241
Total	$	666,371	$	(288,688)	$	377,683	$	634,717	$	(230,890)	$	403,827

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Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Composition of Intangible Assets and Loss Reserve Premium

The composition of intangible assets and loss reserve premium consisted of the following:

December 31, 2020	Gross Balance		Accumulated Amortization		Net Value		Weighted-average amortization period
Agent/Customer relationships	$	175,352	$	(90,986)	$	84,366	6.7 years
Renewal rights	33,565		(29,351)		4,214		0.7 years
Other intangibles	47,711		(33,491)		14,220		2.9 years
Total intangible assets subject to amortization	256,628		(153,828)		102,800		5.2 years
Management contracts	118,600		—		118,600		indefinite life
State licenses	89,325		—		89,325		indefinite life
Trademarks	30,000		—		30,000		indefinite life
Total intangible assets	$	494,553	$	(153,828)	$	340,725
NGHC	$	490,653	$	(152,973)	$	337,680
Reciprocal Exchanges	3,900		(855)		3,045
Total intangible assets	$	494,553	$	(153,828)	$	340,725
Net loss reserve plus a risk premium (1)	$	(17,266)	$	14,977	$	(2,289)	0.8 years
Total	$	(17,266)	$	14,977	$	(2,289)
NGHC	$	(13,253)	$	10,998	$	(2,255)
Reciprocal Exchanges	(4,013)		3,979		(34)
Total	$	(17,266)	$	14,977	$	(2,289)

December 31, 2019	Gross Balance		Accumulated Amortization		Net Value
Agent/Customer relationships	$	175,157	$	(76,156)	$	99,001
Renewal rights	48,566		(41,257)		7,309
Other intangibles	49,511		(27,923)		21,588
Total intangible assets subject to amortization	273,234		(145,336)		127,898
Management contracts	118,600		—		118,600
State licenses	89,325		—		89,325
Trademarks	30,000		—		30,000
Total intangible assets	$	511,159	$	(145,336)	$	365,823
NGHC	$	507,259	$	(144,661)	$	362,598
Reciprocal Exchanges	3,900		(675)		3,225
Total intangible assets	$	511,159	$	(145,336)	$	365,823
Net loss reserve plus a risk premium (1)	$	(17,266)	$	9,947	$	(7,319)
Total	$	(17,266)	$	9,947	$	(7,319)
NGHC	$	(13,253)	$	6,017	$	(7,236)
Reciprocal Exchanges	(4,013)		3,930		(83)
Total	$	(17,266)	$	9,947	$	(7,319)

(1) Net loss reserve plus a risk premium is recorded as a liability.

Schedule of Intangible Assets Amortization Expense

Intangible assets amortization expense consisted of the following:

	Year Ended December 31,
	2020		2019		2018
Amortization	$	25,798	$	39,024	$	31,999
Amortization of loss reserve premium	(5,030)		(4,288)		(632)
Total	$	20,768	$	34,736	$	31,367
NGHC	$	20,637	$	34,665	$	31,323
Reciprocal Exchanges	131		71		44
Total	$	20,768	$	34,736	$	31,367

Schedule of Aggregated Amortization Expense for Each of the Next Five Years and Thereafter

The estimated aggregate amortization expense for each of the next five years and thereafter is:

Year ending	NGHC		Reciprocal Exchanges		Total
2021	$	16,609	$	23	$	16,632
2022	14,657		(9)		14,648
2023	12,386		(3)		12,383
2024	11,452		—		11,452
2025	10,989		—		10,989
Thereafter	34,407		—		34,407
Total	$	100,500	$	11	$	100,511

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Unpaid Losses and Loss Adjustment Expense Reserves (Tables)

12 Months Ended

Dec. 31, 2020

Insurance [Abstract]

Schedule of Liability for Unpaid Claims and Claims Adjustment Expenses

The following tables present a reconciliation of beginning and ending balances for unpaid losses and LAE:

	Year Ended December 31, 2020
	Property and Casualty		Accident and Health		NGHC		Reciprocal Exchanges		Total
Gross balance at beginning of the year	$	2,528,754	$	151,874	$	2,680,628	$	205,786	$	2,886,414
Less: Reinsurance recoverable at beginning of the year	(1,016,368)		(11,266)		(1,027,634)		(84,174)		(1,111,808)
Net balance at beginning of the year	1,512,386		140,608		1,652,994		121,612		1,774,606
Incurred losses and LAE related to:
Current year	2,323,797		342,714		2,666,511		153,380		2,819,891
Prior year	27,042		(23,821)		3,221		970		4,191
Total incurred	2,350,839		318,893		2,669,732		154,350		2,824,082
Paid losses and LAE related to:
Current year	(1,432,498)		(209,319)		(1,641,817)		(94,287)		(1,736,104)
Prior year	(827,745)		(90,952)		(918,697)		(53,317)		(972,014)
Total paid	(2,260,243)		(300,271)		(2,560,514)		(147,604)		(2,708,118)
Net balance at end of the year	1,602,982		159,230		1,762,212		128,358		1,890,570
Plus: Reinsurance recoverable at end of the year	899,217		21,697		920,914		77,614		998,528
Gross balance at end of the year	$	2,502,199	$	180,927	$	2,683,126	$	205,972	$	2,889,098

	Year Ended December 31, 2019
	Property and Casualty		Accident and Health		NGHC		Reciprocal Exchanges		Total
Gross balance at beginning of the year	$	2,507,409	$	271,280	$	2,778,689	$	178,470	$	2,957,159
Less: Reinsurance recoverable at beginning of the year	(1,182,588)		(24,575)		(1,207,163)		(77,979)		(1,285,142)
Net balance at beginning of the year	1,324,821		246,705		1,571,526		100,491		1,672,017
Incurred losses and LAE related to:
Current year	2,320,053		356,036		2,676,089		173,215		2,849,304
Prior year	46,623		(45,356)		1,267		3,897		5,164
Total incurred	2,366,676		310,680		2,677,356		177,112		2,854,468
Paid losses and LAE related to:
Current year	(1,430,072)		(219,234)		(1,649,306)		(111,380)		(1,760,686)
Prior year	(841,613)		(109,653)		(951,266)		(44,611)		(995,877)
Total paid	(2,271,685)		(328,887)		(2,600,572)		(155,991)		(2,756,563)
Acquired losses and LAE reserves	92,574		—		92,574		—		92,574
Disposed losses and LAE reserves	—		(87,890)		(87,890)		—		(87,890)
Net balance at end of the year	1,512,386		140,608		1,652,994		121,612		1,774,606
Plus: Reinsurance recoverable at end of the year	1,016,368		11,266		1,027,634		84,174		1,111,808
Gross balance at end of the year	$	2,528,754	$	151,874	$	2,680,628	$	205,786	$	2,886,414

	Year Ended December 31, 2018
	Property and Casualty		Accident and Health		NGHC		Reciprocal Exchanges		Total
Gross balance at beginning of the year	$	2,270,551	$	249,653	$	2,520,204	$	143,353	$	2,663,557
Less: Reinsurance recoverable at beginning of the year	(1,067,495)		(9,840)		(1,077,335)		(52,408)		(1,129,743)
Net balance at beginning of the year	1,203,056		239,813		1,442,869		90,945		1,533,814
Incurred losses and LAE related to:
Current year	2,182,923		352,322		2,535,245		161,015		2,696,260
Prior year	(4,760)		(30,977)		(35,737)		1,703		(34,034)
Total incurred	2,178,163		321,345		2,499,508		162,718		2,662,226
Paid losses and LAE related to:
Current year	(1,336,359)		(188,014)		(1,524,373)		(110,053)		(1,634,426)
Prior year	(720,039)		(117,653)		(837,692)		(43,119)		(880,811)
Total paid	(2,056,398)		(305,667)		(2,362,065)		(153,172)		(2,515,237)
Unrealized foreign exchange gain	—		(8,786)		(8,786)		—		(8,786)
Net balance at end of the year	1,324,821		246,705		1,571,526		100,491		1,672,017
Plus: Reinsurance recoverable at end of the year	1,182,588		24,575		1,207,163		77,979		1,285,142
Gross balance at end of the year	$	2,507,409	$	271,280	$	2,778,689	$	178,470	$	2,957,159

Short-duration Insurance Contracts, Claims Development

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	490,230	$	485,762	$	489,010	$	494,922	$	493,873	$	497,109	$	497,324	$	496,408	$	497,424	$	497,712	$	522	238,319
2012			511,797		522,296		529,140		527,386		528,090		527,531		529,885		531,887		533,045		281		249,890
2013					544,833		556,262		556,290		563,834		567,410		572,538		575,521		575,264		287		250,134
2014							740,531		759,577		760,566		766,640		779,992		783,869		786,619		572		270,161
2015									820,213		838,040		849,051		872,064		892,244		901,823		3,434		291,921
2016											932,350		940,849		976,749		1,005,184		1,017,124		13,710		302,083
2017													929,211		912,370		941,837		968,645		16,952		296,226
2018															1,047,041		1,033,488		1,054,906		79,287		309,025
2019																	1,162,750		1,153,160		169,765		406,201
2020																			1,106,907		455,534		293,834
Total (A)																			$	8,595,205

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	224,676	$	385,749	$	442,365	$	468,059	$	482,861	$	489,191	$	494,145	$	495,833	$	496,680	$	497,044
2012			242,285		413,018		470,515		501,819		518,079		523,703		527,695		530,570		532,182
2013					259,665		440,751		504,569		540,497		559,064		567,949		571,643		573,312
2014							342,710		601,980		694,002		728,256		757,933		773,124		780,972
2015									385,592		679,461		761,150		820,007		864,226		884,717
2016											400,052		737,927		855,407		937,997		978,785
2017													392,084		706,151		832,553		902,264
2018															429,231		777,888		889,127
2019																	470,341		833,977
2020																			425,674
Total (B)																			$	7,298,054
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			1,915
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	1,299,066

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	315,273	$	308,729	$	308,298	$	308,486	$	308,760	$	308,512	$	308,536	$	308,249	$	308,132	$	308,142	$	(2)	298,034
2012			308,056		298,208		295,984		296,257		296,050		295,970		295,026		294,710		294,697		(10)		292,486
2013					335,454		329,049		328,748		328,284		328,262		328,010		327,506		327,503		(26)		285,750
2014							496,227		487,302		486,206		486,383		486,373		486,156		486,146		16		311,603
2015									541,008		544,097		544,769		544,510		544,684		544,677		4		329,111
2016											626,643		622,456		621,717		620,546		620,692		(414)		337,873
2017													600,813		570,699		567,411		566,641		370		385,080
2018															548,063		526,092		530,023		(472)		360,454
2019																	577,970		552,692		2,482		370,057
2020																			560,894		18,588		351,548
Total (A)																			$	4,792,107

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	283,501	$	308,824	$	308,634	$	308,608	$	308,578	$	308,571	$	308,557	$	308,266	$	308,131	$	308,145
2012			268,989		298,381		295,978		295,975		296,029		295,995		294,975		294,702		294,699
2013					291,064		328,832		328,456		328,299		328,280		327,976		327,510		327,522
2014							430,998		487,531		486,364		486,309		486,251		486,108		486,080
2015									478,268		544,754		544,707		544,485		544,699		544,652
2016											542,970		622,930		621,529		621,181		620,963
2017													533,907		568,639		566,918		566,181
2018															483,149		532,083		530,330
2019																	512,072		549,540
2020																			517,035
Total (B)																			$	4,745,147
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			(15)
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	46,945

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	506,352	$	499,170	$	498,050	$	498,184	$	497,244	$	495,246	$	494,825	$	495,170	$	495,148	$	495,156	$	1	107,871
2012			485,454		480,353		478,880		477,577		476,538		474,649		476,166		475,792		475,990		7		112,061
2013					306,761		300,868		299,561		296,618		296,907		296,756		296,760		297,159		66		75,918
2014							318,488		306,471		303,925		304,496		304,237		304,350		304,934		279		73,498
2015									357,023		349,559		351,747		353,688		351,305		351,590		1,152		69,920
2016											350,737		341,762		340,711		343,525		344,763		1,481		61,047
2017													402,798		365,092		370,068		362,176		2,096		59,284
2018															327,462		328,721		327,525		4,192		73,117
2019																	247,760		256,369		16,533		66,710
2020																			352,477		52,664		48,924
Total (A)																			$	3,568,139

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	314,139	$	457,480	$	485,054	$	489,778	$	493,408	$	494,198	$	494,525	$	494,904	$	494,922	$	494,950
2012			300,271		452,589		466,266		471,084		473,190		473,781		475,765		475,762		475,964
2013					219,937		279,743		289,302		293,101		295,332		296,383		296,442		296,567
2014							198,781		278,255		289,456		297,640		301,742		303,100		303,660
2015									233,264		319,284		336,921		342,156		345,257		346,554
2016											227,650		320,564		331,102		337,889		341,037
2017													258,234		338,065		349,600		355,265
2018															227,908		298,212		315,302
2019																	172,462		226,895
2020																			249,268
Total (B)																			$	3,405,462
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			930
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	163,607

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	4,804	$	4,483	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	—	8,139
2012			4,400		4,227		4,161		4,161		4,161		4,110		4,110		4,110		4,110		—		7,630
2013					23,253		28,578		26,457		26,361		26,272		26,274		26,274		26,265		—		34,173
2014							52,245		52,694		52,311		52,026		52,022		52,034		52,028		—		69,716
2015									176,104		184,586		181,536		181,740		181,717		181,678		—		242,669
2016											215,097		200,817		202,155		201,722		201,850		1		320,319
2017													211,293		186,415		182,865		182,809		135		302,098
2018															234,558		205,152		203,238		364		269,021
2019																	256,745		239,017		4,726		304,234
2020																			296,453		112,869		262,469
Total (A)																			$	1,391,929

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	2,528	$	4,469	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481	$	4,481
2012			3,330		4,095		4,110		4,110		4,161		4,110		4,110		4,110		4,110
2013					15,421		25,754		26,327		26,242		26,154		26,155		26,155		26,147
2014							31,765		52,053		52,405		52,147		52,140		52,153		52,147
2015									123,576		178,918		181,459		181,719		181,696		181,678
2016											125,845		196,421		201,720		201,549		201,849
2017													104,809		178,047		181,519		182,674
2018															126,269		201,457		202,874
2019																	158,345		234,291
2020																			183,585
Total (B)																			$	1,273,836
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			—
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	118,093

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	47,666	$	47,834	$	47,459	$	48,841	$	51,107	$	50,898	$	50,998	$	51,161	$	51,247	$	50,703	$	—	5,065
2012			44,834		47,275		48,044		48,665		50,370		50,767		50,303		50,538		50,606		—		4,999
2013					43,684		44,341		45,479		50,180		51,263		49,854		50,595		50,810		—		5,097
2014							38,656		40,850		45,930		48,246		49,168		49,369		50,055		—		4,873
2015									35,573		33,409		34,390		34,615		34,268		34,962		—		4,335
2016											24,619		24,460		26,109		24,310		24,657		356		4,005
2017													26,214		28,762		28,804		29,806		1,244		4,949
2018															32,339		33,891		35,870		3,540		6,127
2019																	49,757		50,212		11,727		6,262
2020																			40,757		18,459		3,383
Total (A)																			$	418,438

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	15,857	$	26,603	$	35,911	$	41,931	$	46,559	$	49,570	$	50,481	$	50,979	$	51,121	$	50,676
2012			13,568		29,286		37,241		42,768		46,358		48,990		49,836		50,090		50,504
2013					14,683		29,218		35,105		41,787		47,449		48,449		49,605		50,432
2014							13,925		26,070		32,382		39,328		46,001		48,389		49,602
2015									11,910		19,501		24,614		29,538		31,587		33,223
2016											7,516		13,478		16,994		20,567		22,500
2017													9,111		17,136		19,529		23,838
2018															10,755		19,471		24,985
2019																	15,504		28,210
2020																			13,567
Total (B)																			$	347,537
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			27
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	70,928

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	26,936	$	26,055	$	26,022	$	26,060	$	26,037	$	26,029	$	26,023	$	26,028	$	26,028	$	26,027	$	—	12,041
2012			25,752		26,459		26,189		25,914		25,842		25,841		25,845		25,842		25,820		—		11,301
2013					23,375		25,214		25,292		24,709		24,703		24,704		24,704		24,704		—		11,066
2014							29,240		27,424		25,806		25,588		25,882		26,074		26,074		—		11,526
2015									21,247		18,592		18,673		18,789		18,842		18,890		—		10,281
2016											12,270		12,921		12,985		13,213		13,197		—		8,740
2017													15,301		15,410		15,612		15,490		(5)		10,682
2018															19,146		19,272		19,200		108		13,615
2019																	27,212		27,585		(51)		14,549
2020																			21,240		(810)		10,027
Total (A)																			$	218,227

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	28,274	$	26,269	$	26,106	$	26,056	$	26,037	$	26,033	$	26,027	$	26,028	$	26,028	$	26,027
2012			23,760		26,651		26,172		25,914		25,854		25,850		25,845		25,842		25,817
2013					22,651		25,088		24,549		24,725		24,716		24,704		24,704		24,704
2014							24,528		26,165		25,772		25,427		25,685		25,946		26,071
2015									19,080		18,797		18,750		18,748		18,719		18,730
2016											12,579		13,147		13,080		13,137		13,114
2017													15,438		16,141		15,500		15,495
2018															18,925		19,246		19,093
2019																	27,974		27,632
2020																			21,633
Total (B)																			$	218,316
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			—
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	(89)

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,																				December 31, 2020
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		Total of IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(unaudited)
2011	$	38,470	$	28,869	$	28,511	$	28,209	$	27,954	$	27,950	$	28,002	$	28,075	$	28,095	$	28,144	$	—	6,652
2012			25,289		20,625		21,184		19,971		20,403		20,876		20,251		20,301		20,283		—		8,427
2013					22,638		21,232		20,132		20,309		20,615		20,367		23,109		22,649		—		3,165
2014							27,706		24,846		25,625		26,614		27,141		27,231		27,212		—		4,232
2015									30,081		21,031		21,527		22,007		21,881		22,714		—		5,455
2016											36,838		35,274		34,851		34,501		34,655		78		4,799
2017													48,222		50,871		51,852		51,477		648		8,830
2018															76,925		78,166		77,582		1,471		12,998
2019																	65,888		65,380		3,312		12,238
2020																			68,723		10,427		9,349
Total (A)																			$	418,819

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Year Ended December 31,
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
	(unaudited)
2011	$	21,474	$	24,997	$	25,799	$	26,700	$	27,661	$	27,656	$	27,692	$	27,758	$	27,803	$	27,825
2012			11,087		18,021		19,367		19,847		19,961		20,668		20,121		20,256		20,238
2013					11,277		17,435		18,107		19,104		19,653		19,626		20,232		22,731
2014							15,344		22,834		23,820		25,230		26,170		27,003		27,115
2015									12,979		18,518		19,834		20,339		20,733		21,994
2016											20,978		30,615		31,632		32,933		33,399
2017													33,166		46,003		47,517		49,506
2018															55,519		69,672		72,859
2019																	45,432		58,788
2020																			44,371
Total (B)																			$	378,826
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)																			2,658
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)																			$	42,651

Short-duration Insurance Contracts, Schedule of Historical Claims Duration

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Property and Casualty - auto liability, including recreational vehicles and motorcycles	41.6	%	32.9	%	11.5	%	6.8	%	3.7	%	1.8	%	0.9	%	0.4	%	0.2	%	0.2	%

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Property and Casualty - auto physical damage, including recreational vehicles, motorcycles and lender placed auto	90.6	%	9.6	%	(0.1)	%	—	%	—	%	—	%	(0.1)	%	—	%	—	%	—	%

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Property and Casualty - homeowners & other property, including lender placed homeowners	67.3	%	25.1	%	4.4	%	1.5	%	0.8	%	0.3	%	0.4	%	0.1	%	0.1	%	—	%

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Accident and Health	62.9	%	35.3	%	1.6	%	0.1	%	0.1	%	—	%	—	%	(0.4)	%	0.3	%	—	%

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Reciprocal Exchanges - auto liability	30.2	%	25.1	%	13.9	%	13.0	%	9.6	%	4.6	%	2.3	%	0.9	%	0.7	%	(0.3)	%

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Reciprocal Exchanges - auto physical damage	98.4	%	2.6	%	(1.3)	%	0.2	%	—	%	—	%	—	%	—	%	—	%	—	%

Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	(unaudited)
Reciprocal Exchanges - homeowners & other property	64.9	%	22.8	%	3.3	%	2.5	%	1.3	%	1.8	%	1.0	%	0.8	%	0.5	%	1.1	%

Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability

The reconciliation of the net incurred and paid claims development tables to the liability for unpaid loss and LAE reserves is as follows:

	December 31, 2020
Net outstanding liabilities:
Property and Casualty - Auto Liability	$	1,299,066
Property and Casualty - Auto Physical Damage	46,945
Property and Casualty - Homeowners and Other Property	163,607
Accident and Health	118,093
Reciprocal Exchanges - Auto Liability	70,928
Reciprocal Exchanges - Auto Physical Damage	(89)
Reciprocal Exchanges - Homeowners and Other Property	42,651
Net reserve for claims and allocated claim adjustment expenses	$	1,741,201
Reinsurance recoverable(1):
Property and Casualty - Auto Liability	$	766,929
Property and Casualty - Auto Physical Damage	8,198
Property and Casualty - Homeowners and Other Property	124,090
Accident and Health	21,697
Reciprocal Exchanges - Auto Liability	28,745
Reciprocal Exchanges - Auto Physical Damage	557
Reciprocal Exchanges - Homeowners and Other Property	48,312
Reinsurance recoverable on unpaid claims and allocated claim adjustment expenses	$	998,528
Insurance lines other than short-duration	$	35,688
Acquisition	17,488
Unallocated claims adjustment expenses (“ULAE”)	96,193
Subtotal	$	149,369
Gross reserve for claims and claim adjustment expenses	$	2,889,098

(1) Includes $535,433 from MCCA and $157,611 from NCRF. See Note 10, “Reinsurance” for additional information.

The reconciliation of the net incurred and paid loss information in the loss reserve rollforward table and loss development tables with respect to the current accident year is as follows:

	2020 - Current Accident Year Incurred								2020 - Current Accident Year Paid
	Property and Casualty		Accident and Health		Reciprocal Exchanges		Total		Property and Casualty		Accident and Health		Reciprocal Exchanges		Total
Rollforward table	$	2,323,797	$	342,714	$	153,380	$	2,819,891	$	1,432,498	$	209,319	$	94,287	$	1,736,104
Development tables	2,020,278		296,453		130,720		2,447,451		1,191,977		183,585		79,571		1,455,133
Variance	$	303,519	$	46,261	$	22,660	$	372,440	$	240,521	$	25,734	$	14,716	$	280,971
Unallocated claims adjustment expenses	$	303,112	$	15,883	$	22,660	$	341,655	$	240,263	$	10,539	$	14,716	$	265,518
Long-duration contracts	—		30,789		—		30,789		—		15,449		—		15,449
Other	407		(411)		—		(4)		258		(254)		—		4
Variance	$	303,519	$	46,261	$	22,660	$	372,440	$	240,521	$	25,734	$	14,716	$	280,971

The reconciliation of the net incurred and paid loss information in the loss reserve rollforward table and loss development tables with respect to the prior accident year is as follows:

	2020 - Prior Accident Year Incurred								2020 - Prior Accident Year Paid
	Property and Casualty		Accident and Health		Reciprocal Exchanges		Total		Property and Casualty		Accident and Health		Reciprocal Exchanges		Total
Rollforward table	$	27,042	$	(23,821)	$	970	$	4,191	$	827,745	$	90,952	$	53,317	$	972,014
Development tables	44,333		(19,624)		4,162		28,871		734,614		78,786		50,568		863,968
Variance	$	(17,291)	$	(4,197)	$	(3,192)	$	(24,680)	$	93,131	$	12,166	$	2,749	$	108,046
Unallocated claims adjustment expenses	$	(8,881)	$	(1,285)	$	(3,586)	$	(13,752)	$	58,163	$	3,395	$	2,556	$	64,114
Accident years prior to 2011	(493)		—		394		(99)		1,442		—		193		1,635
Long-duration contracts	—		(2,912)		—		(2,912)		—		8,771		—		8,771
Acquisition	(7,917)		—		—		(7,917)		33,526		—		—		33,526
Variance	$	(17,291)	$	(4,197)	$	(3,192)	$	(24,680)	$	93,131	$	12,166	$	2,749	$	108,046

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Reinsurance (Tables)

12 Months Ended

Dec. 31, 2020

Ceded Credit Risk

Schedule of Effects of Reinsurance on Premiums and Losses

Reinsurance recoverable is as follows:

	December 31,
	2020		2019
Reinsurance recoverable on paid losses	$	221,212	$	282,500
Reinsurance recoverable on unpaid losses	998,528		1,111,808
Allowance for uncollectible reinsurance	(810)		—
Reinsurance recoverable, net	$	1,218,930	$	1,394,308

The following is the effect of reinsurance on unpaid loss and LAE reserves and unearned premiums:

	December 31,
	2020				2019
	Assumed		Ceded		Assumed		Ceded
Unpaid loss and LAE reserves	$	27,568	$	998,528	$	50,884	$	1,111,808
Unearned premiums	18,845		414,010		15,278		575,747

The following is the effect of reinsurance on premiums and loss and LAE:

	Year Ended December 31,
	2020				2019				2018
Premium:	Written		Earned		Written		Earned		Written		Earned
Direct	$	5,574,550	$	5,613,630	$	5,508,245	$	5,486,835	$	5,317,742	$	5,049,512
Assumed	59,997		56,430		74,835		80,572		99,097		123,265
Total Gross Premium	5,634,547		5,670,060		5,583,080		5,567,407		5,416,839		5,172,777
Ceded	(1,013,703)		(1,175,440)		(1,358,459)		(1,449,365)		(1,589,126)		(1,440,575)
Net Premium	$	4,620,844	$	4,494,620	$	4,224,621	$	4,118,042	$	3,827,713	$	3,732,202

	Year Ended December 31,
	2020				2019				2018
	Assumed		Ceded		Assumed		Ceded		Assumed		Ceded
Loss and LAE	$	9,713	$	729,628	$	32,745	$	801,041	$	29,290	$	1,041,286

Schedule of Information for each Reinsurer

The following tables present information for each reinsurer by reinsurance recoverable, prepaid reinsurance and funds held balances:

		Recoverable on
December 31, 2020	A.M. Best Rating	Unpaid Losses		Paid Losses		Allowance for uncollectible reinsurance		Prepaid Reinsurance		Funds Held		Net
Reinsurer:
MCCA	NR (1)	$	535,433	$	10,221	$	—	$	1,251	$	—	$	546,905
NCRF	NR (1)	157,611		35,684		—		92,783		—		286,078
Hannover Ruck SE	A+	74,485		47,726		—		68,167		(149,402)		40,976
Other reinsurers' balances - each less than 5% of total (2)	—	230,999		127,581		(810)		251,809		(19,606)		589,973
Total		$	998,528	$	221,212	$	(810)	$	414,010	$	(169,008)	$	1,463,932
NGHC		$	920,914	$	173,137	$	(636)	$	324,160	$	(153,903)	$	1,263,672
Reciprocal Exchanges		77,614		48,075		(174)		89,850		(15,105)		200,260
Total		$	998,528	$	221,212	$	(810)	$	414,010	$	(169,008)	$	1,463,932

		Recoverable on
December 31, 2019	A.M. Best Rating	Unpaid Losses		Paid Losses		Prepaid Reinsurance		Funds Held		Net
Reinsurer:
MCCA	NR (1)	$	548,370	$	9,940	$	3,927	$	—	$	562,237
NCRF	NR (1)	146,496		44,759		88,022		—		279,277
Hannover Ruck SE	A+	155,223		101,064		134,878		(254,558)		136,607
Other reinsurers' balances - each less than 5% of total (2)	—	261,719		126,737		348,920		(4,884)		732,492
Total		$	1,111,808	$	282,500	$	575,747	$	(259,442)	$	1,710,613
NGHC		$	1,027,634	$	247,549	$	469,853	$	(259,442)	$	1,485,594
Reciprocal Exchanges		84,174		34,951		105,894		—		225,019
Total		$	1,111,808	$	282,500	$	575,747	$	(259,442)	$	1,710,613

(1) NR - not rated by A.M. Best.

(2) Rated A- or higher by A.M. Best or collateralized.

MCCA

Ceded Credit Risk

Schedule of Effects of Reinsurance on Premiums and Losses

Reinsurance recoverable from MCCA are as follows:

	December 31,
	2020		2019
Reinsurance recoverable on paid losses	$	10,221	$	9,940
Reinsurance recoverable on unpaid losses	535,433		548,370
Allowance for uncollectible reinsurance	—		—
Reinsurance recoverable, net	$	545,654	$	558,310

Schedule of Summary of Premiums and Losses Ceded

The following is a summary of premiums and losses ceded to MCCA:

	Year Ended December 31,
	2020		2019		2018
Ceded earned premiums	$	7,856	$	9,867	$	9,676
Ceded Loss and LAE	3,624		(23,616)		(54,105)

NCRF

Ceded Credit Risk

Schedule of Effects of Reinsurance on Premiums and Losses

Reinsurance recoverable from NCRF are as follows:

	December 31,
	2020		2019
Reinsurance recoverable on paid losses	$	35,684	$	44,759
Reinsurance recoverable on unpaid losses	157,611		146,496
Allowance for uncollectible reinsurance	—		—
Reinsurance recoverable, net	$	193,295	$	191,255

Schedule of Summary of Premiums and Losses Ceded

The following is a summary of premiums and losses ceded to NCRF:

	Year Ended December 31,
	2020		2019		2018
Ceded earned premiums	$	236,837	$	234,370	$	232,270
Ceded Loss and LAE	208,316		222,796		210,297

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Debt (Tables)

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Schedule of Debt Instruments

The following table represents the Company’s debt:

			December 31,
	Interest Rate	Maturity	2020		2019
Fixed-rate:
6.75% Notes	6.75%	2024	$	350,000	$	350,000
7.625% Notes	7.625%	2055	100,000		100,000
Floating-rate:
Subordinated Debentures I (1)	LIBOR + 3.40%	2035	41,238		41,238
Subordinated Debentures II (2)	LIBOR + 4.25%	2037	30,930		30,930
2019 Credit Agreement (3)	LIBOR + 1.75%	2023	140,000		140,000
Finance lease liabilities	Various	Various	16,690		20,477
Other	3.5%	Various	3,194		9,342
Unamortized debt issuance costs and unamortized discount			(5,242)		(5,981)
Total carrying amount of debt			$	676,810	$	686,006

(1) Interest rate was 3.62% and 5.29%, as of December 31, 2020, and 2019, respectively.

(2) Interest rate was 4.47% and 6.14%, as of December 31, 2020, and 2019, respectively.

(3) Weighted-average interest rate was 4.00% and 3.59% as of December 31, 2020, and 2019, respectively.

Schedule of Interest Expense

The following table presents the Company’s interest expense:

		Year Ended December 31,
	Interest Payment Frequency	2020		2019		2018
6.75% Notes	Semiannually	$	23,625	$	23,625	$	23,625
7.625% Notes	Quarterly	7,625		7,625		7,625
Subordinated Debentures	Quarterly	3,287		4,536		4,346
2016 Credit Agreement	Quarterly	—		1,211		7,491
2019 Credit Agreement	Quarterly	3,421		5,340		—
Finance lease liabilities	Various	1,150		1,176		621
Other(1)	Various	(5,336)		8,031		7,717
Total interest expense		$	33,772	$	51,544	$	51,425

(1) Includes interest for other liabilities, interest credited on funds held balances and accretion of debt issuance costs.

Schedule of Maturities of Long-term Debt

Maturities of the Company’s debt for the years subsequent to December 31, 2020 are as follows:

	2021		2022		2023		2024		2025 and thereafter		Total
6.75% Notes	$	—	$	—	$	—	$	350,000	$	—	$	350,000
7.625% Notes (1)	—		—		—		—		100,000		100,000
Subordinated Debentures I	—		—		—		—		41,238		41,238
Subordinated Debentures II	—		—		—		—		30,930		30,930
2019 Credit Agreement (2)	—		—		140,000		—		—		140,000
Finance lease liabilities	5,986		3,875		2,433		1,436		2,960		16,690
Other	3,194		—		—		—		—		3,194
Total principal amount of debt	$	9,180	$	3,875	$	142,433	$	351,436	$	175,128	$	682,052
Unamortized debt issuance costs and unamortized discount											(5,242)
Carrying amount of debt											$	676,810

(1) Were repaid on February 3, 2021.

(2) Was repaid on January 4, 2021.

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

Federal income tax expense consisted of the following:

	Year Ended December 31,
	2020						2019						2018
	NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total
Current tax expense (benefit)
Federal	$	115,416	$	7	$	115,423	$	69,985	$	(2,257)	$	67,728	$	27,039	$	(2,290)	$	24,749
Foreign	213		—		213		2,621		—		2,621		1,376		—		1,376
Total current tax expense (benefit)	$	115,629	$	7	$	115,636	$	72,606	$	(2,257)	$	70,349	$	28,415	$	(2,290)	$	26,125
Deferred tax expense (benefit)
Federal	$	19,048	$	1,777	$	20,825	$	13,497	$	(6,833)	$	6,664	$	28,015	$	(1,260)	$	26,755
Foreign	—		—		—		—		—		—		604		—		604
Total deferred tax expense (benefit)	$	19,048	$	1,777	$	20,825	$	13,497	$	(6,833)	$	6,664	$	28,619	$	(1,260)	$	27,359
Provision (benefit) for income taxes	$	134,677	$	1,784	$	136,461	$	86,103	$	(9,090)	$	77,013	$	57,034	$	(3,550)	$	53,484

Schedule of Income before Income Tax, Domestic and Foreign

The domestic and foreign components of income before taxes are as follows:

	Year Ended December 31,
	2020						2019						2018
	NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total
Domestic	$	608,186	$	12,661	$	620,847	$	358,079	$	(29,729)	$	328,350	$	244,463	$	(43,380)	$	201,083
Foreign	39,822		—		39,822		76,093		—		76,093		19,925		—		19,925
Income (loss)	$	648,008	$	12,661	$	660,669	$	434,172	$	(29,729)	$	404,443	$	264,388	$	(43,380)	$	221,008

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to the net deferred tax asset or liability are presented below based upon the 2020 enacted rate of 21%.

	December 31,
	2020						2019
	NGHC		Reciprocal Exchanges		Total		NGHC		Reciprocal Exchanges		Total
Deferred tax assets:
Accrued expenses	$	7,577	$	289	$	7,866	$	3,178	$	683	$	3,861
Unearned premiums and other revenue	71,872		4,242		76,114		64,155		5,146		69,301
Bad debt	4,628		281		4,909		4,876		114		4,990
Loss reserve discount	13,071		1,167		14,238		10,355		1,042		11,397
Net operating loss carryforwards	107,869		11,175		119,044		102,535		13,962		116,497
Surplus note interest	—		—		—		2,081		—		2,081
Other	7,773		2,099		9,872		9,740		4,882		14,622
Gross deferred tax assets	212,790		19,253		232,043		196,920		25,829		222,749
Less: Valuation allowance	(72,212)		(5,670)		(77,882)		(65,257)		(6,523)		(71,780)
Total deferred tax assets	140,578		13,583		154,161		131,663		19,306		150,969
Deferred tax liabilities:
Deferred acquisition costs	52,719		4,032		56,751		49,828		4,894		54,722
Intangible assets	39,348		632		39,980		36,495		700		37,195
Goodwill	4,418		—		4,418		4,204		—		4,204
Property and equipment	39,160		—		39,160		28,922		—		28,922
Investments	4,390		107		4,497		—		—		—
Deferred commissions	18,875		—		18,875		—		—		—
Surplus note interest	—		10,747		10,747		—		13,828		13,828
Unrealized capital gains	54,016		1,080		55,096		19,870		1,062		20,932
Other	—		—		—		11,671		81		11,752
Gross deferred tax liabilities	212,926		16,598		229,524		150,990		20,565		171,555
Deferred tax asset	$	—	$	—	$	—	$	—	$	—	$	—
Deferred tax liability	$	(72,348)	$	(3,015)	$	(75,363)	$	(19,327)	$	(1,259)	$	(20,586)

Schedule of Effective Income Tax Rate Reconciliation

The Company’s income tax expense (benefit) differs from the statutory U.S. federal amount computed by applying the federal income tax rate of 21% for the years ended December 31, 2020, 2019, and 2018. The reasons for such differences are as follows:

	Year Ended December 31, 2020
	NGHC			Tax Rate		Reciprocal Exchanges			Tax Rate		Total			Tax Rate
Income before provision for income taxes	$	648,008				$	12,661				$	660,669
Tax rate	21.0		%			21.0		%			21.0		%
Computed “expected” tax expense	$	136,082		21.0	%	$	2,659		21.0	%	$	138,741		21.0	%
Tax effects resulting from:
Tax-exempt interest	(486)			(0.1)		(13)			(0.1)		(499)			(0.1)
Effect of foreign operations	351			0.1		—			—		351			0.1
State taxes	1,556			0.2		—			—		1,556			0.2
Change in valuation allowance	6,954			1.1		(903)			(7.1)		6,051			0.9
Benefits of operating loss carryforwards	(6,954)			(1.1)		—			—		(6,954)			(1.1)
Other permanent items	(2,826)			(0.4)		41			0.3		(2,785)			(0.3)
Provision for income taxes	$	134,677		20.8	%	$	1,784		14.1	%	$	136,461		20.7	%

	Year Ended December 31, 2019
	NGHC			Tax Rate		Reciprocal Exchanges			Tax Rate		Total			Tax Rate
Income (loss) before provision for income taxes	$	434,172				$	(29,729)				$	404,443
Tax rate	21.0		%			21.0		%			21.0		%
Computed “expected” tax expense	$	91,176		21.0	%	$	(6,243)		21.0	%	$	84,933		21.0	%
Tax effects resulting from:
Tax-exempt interest	(810)			(0.2)		(28)			0.1		(838)			(0.2)
Effect of foreign operations	(1,192)			(0.3)		—			—		(1,192)			(0.3)
State taxes	(2,357)			(0.5)		210			(0.7)		(2,147)			(0.5)
Change in valuation allowance	11,541			2.7		(105)			0.4		11,436			2.8
Benefits of operating loss carryforwards	(11,541)			(2.7)		—			—		(11,541)			(2.9)
Other permanent items	(714)			(0.2)		(2,924)			9.8		(3,638)			(0.9)
Provision (benefit) for income taxes	$	86,103		19.8	%	$	(9,090)		30.6	%	$	77,013		19.0	%

	Year Ended December 31, 2018
	NGHC			Tax Rate		Reciprocal Exchanges			Tax Rate		Total			Tax Rate
Income (loss) before provision for income taxes	$	264,388				$	(43,380)				$	221,008
Tax rate	21.0		%			21.0		%			21.0		%
Computed “expected” tax expense	$	55,521		21.0	%	$	(9,110)		21.0	%	$	46,411		21.0	%
Tax effects resulting from:
Tax-exempt interest	(910)			(0.3)		(30)			0.1		(940)			(0.4)
Effect of foreign operations	2,807			1.1		—			—		2,807			1.3
State taxes	4,578			1.7		—			—		4,578			2.1
Change in valuation allowance	53,716			20.3		1,218			(2.8)		54,934			24.9
Benefits of operating loss carryforwards	(53,716)			(20.3)		—			—		(53,716)			(24.3)
Effects of TCJA	(951)			(0.4)		(366)			0.8		(1,317)			(0.6)
Other permanent items	(4,011)			(1.5)		4,738			(10.9)		727			0.2
Provision (benefit) for income taxes	$	57,034		21.6	%	$	(3,550)		8.2	%	$	53,484		24.2	%

Reconciliation of Gross Unrecognized Tax Benefits

The following table represents a reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits:

	Year Ended December 31,
	2020
Gross unrecognized tax benefits, beginning of the year	$	—
Increases in tax positions for prior years	3,889
Increases in tax positions for current year	720
Gross unrecognized tax benefits, end of the year	$	4,609

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Maturity of Operating Lease Liabilities

Future minimum lease payments as of December 31, 2020, for each of the next five years and thereafter are as follows:

	Operating		Finance
December 31,	Leases		Leases		Total
2021	$	31,525	$	6,601	$	38,126
2022	27,225		4,296		31,521
2023	21,824		2,720		24,544
2024	18,186		1,638		19,824
2025	15,109		882		15,991
Thereafter	22,222		2,393		24,615
Total lease payments	$	136,091	$	18,530	$	154,621
Less: Interest	(16,764)		(1,840)
Present value of lease liabilities	$	119,327	$	16,690

Schedule of Maturity of Financing Lease Liabilities

Future minimum lease payments as of December 31, 2020, for each of the next five years and thereafter are as follows:

	Operating		Finance
December 31,	Leases		Leases		Total
2021	$	31,525	$	6,601	$	38,126
2022	27,225		4,296		31,521
2023	21,824		2,720		24,544
2024	18,186		1,638		19,824
2025	15,109		882		15,991
Thereafter	22,222		2,393		24,615
Total lease payments	$	136,091	$	18,530	$	154,621
Less: Interest	(16,764)		(1,840)
Present value of lease liabilities	$	119,327	$	16,690

Schedule of Amounts Payable under Employment Agreements

The Company has entered into employment agreements with certain individuals. The employment agreements provide for bonuses, executive benefits and severance payments under certain circumstances. Amounts payable under these agreements for the next five years are as follows:

December 31,
2021	$	4,672
2022	2,574
2023	1,303
2024	773
2025	—
Total	$	9,322

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Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Schedule of Preferred Stock

The following table summarizes the Company’s preferred stock issued and outstanding as of December 31, 2020, and 2019.

Series	Dividend rate per year		Shares of preferred stock issued and outstanding	Depositary shares issued and outstanding	Liquidation preference per share		Aggregate liquidation preference
A	7.50	%	2,200,000	—	$	25	$	55,000
B	7.50	%	165,000	6,600,000	$	1,000	$	165,000
C	7.50	%	200,000	8,000,000	$	1,000	$	200,000
D	Fixed/ Floating(1)		120	—	$	250,000	$	30,000
			2,565,120				$	450,000

(1) Dividend rate is fixed at 7.00% prior to July 15, 2023, and floating at six-month LIBOR plus 5.4941% thereafter.

Schedule of Dividends Declared

The following tables present the class of stock, declaration date and dividends paid per share in 2020, 2019, and 2018:

Class of Stock	Declaration Date	Dividend Per Share		Dividend Per Depositary Share
Common stock	October 29, 2020	$	0.05
Common stock	July 31, 2020	$	0.05
Common stock	April 29, 2020	$	0.05
Common stock	February 20, 2020	$	0.05
Preferred stock Series A	October 29, 2020	$	0.46875
Preferred stock Series A	July 31, 2020	$	0.46875
Preferred stock Series A	April 29, 2020	$	0.46875
Preferred stock Series A	February 20, 2020	$	0.46875
Preferred stock Series B and Series C	October 29, 2020	$	18.75	$	0.46875
Preferred stock Series B and Series C	July 31, 2020	$	18.75	$	0.46875
Preferred stock Series B and Series C	April 29, 2020	$	18.75	$	0.46875
Preferred stock Series B and Series C	February 20, 2020	$	18.75	$	0.46875
Preferred stock Series D	October 29, 2020	$	8,750.00
Preferred stock Series D	April 29, 2020	$	8,750.00

Class of Stock	Declaration Date	Dividend Per Share		Dividend Per Depositary Share
Common stock	October 30, 2019	$	0.05
Common stock	July 29, 2019	$	0.05
Common stock	May 6, 2019	$	0.04
Common stock	February 25, 2019	$	0.04
Preferred stock Series A	October 30, 2019	$	0.46875
Preferred stock Series A	July 29, 2019	$	0.46875
Preferred stock Series A	May 6, 2019	$	0.46875
Preferred stock Series A	February 25, 2019	$	0.46875
Preferred stock Series B and Series C	October 30, 2019	$	18.75	$	0.46875
Preferred stock Series B and Series C	July 29, 2019	$	18.75	$	0.46875
Preferred stock Series B and Series C	May 6, 2019	$	18.75	$	0.46875
Preferred stock Series B and Series C	February 25, 2019	$	18.75	$	0.46875
Preferred stock Series D	October 30, 2019	$	8,750.00
Preferred stock Series D	May 6, 2019	$	8,750.00

Class of Stock	Declaration Date	Dividend Per Share		Dividend Per Depositary Share
Common stock	October 29, 2018	$	0.04
Common stock	August 6, 2018	$	0.04
Common stock	May 7, 2018	$	0.04
Common stock	February 26, 2018	$	0.04
Preferred stock Series A	October 29, 2018	$	0.46875
Preferred stock Series A	August 6, 2018	$	0.46875
Preferred stock Series A	May 7, 2018	$	0.46875
Preferred stock Series A	February 26, 2018	$	0.46875
Preferred stock Series B and Series C	October 29, 2018	$	18.75	$	0.46875
Preferred stock Series B and Series C	August 6, 2018	$	18.75	$	0.46875
Preferred stock Series B and Series C	May 7, 2018	$	18.75	$	0.46875
Preferred stock Series B and Series C	February 26, 2018	$	18.75	$	0.46875
Preferred stock Series D	October 29, 2018	$	8,263.89

Schedule of Common Stock Outstanding Roll Forward

The following table presents a roll forward of outstanding common shares.

	Year Ended December 31,
	2020	2019
Common stock:
Balance, beginning of the year	113,368,811	112,940,595
Shares issued under employee stock plans and exercises of stock options	854,914	578,201
Shares withheld related to net share settlement	(179,599)	(149,985)
Balance, end of the year	114,044,126	113,368,811
Treasury stock:
Balance beginning of the year	—	—
Repurchases of common stock	(459,083)	—
Balance, end of the period	(459,083)	—
Shares outstanding at end of the year	113,585,043	113,368,811

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity

A summary of the stock option awards granted under the prior plans is shown below:

	Shares Subject to Options Outstanding
Year Ended December 31, 2020	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (1)
Outstanding at beginning of the year	3,025,587	$	9.83
Exercised	(388,236)	6.79
Outstanding and exercisable at end of the year	2,637,351	$	10.28	2.4	$	63,036

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing price of the Company’s common stock of $34.18, as reported on the Nasdaq Global Market on December 31, 2020.

Schedule of Share-based Compensation, Restricted Stock Units Award Activity

A summary of the RSUs is shown below:

	RSUs
Year Ended December 31, 2020	Number of RSUs	Weighted-Average Grant Date Fair Value
Non-vested at beginning of the year	1,033,631	$	23.98
Granted	561,497	21.46
Vested	(466,678)	23.68
Forfeited	(11,874)	21.75
Non-vested at end of the year	1,116,576	$	22.86

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Statutory Financial Data, Risk-Based Capital and Dividend Restrictions (Tables)

12 Months Ended

Dec. 31, 2020

Insurance [Abstract]

Statutory Accounting Practices Disclosure

The following tables present the statutory capital and surplus, and net income under SAP:

	December 31,
Statutory capital and surplus	2020		2019
Property and Casualty Insurance Companies:
Domestic	$	1,619,460	$	1,600,740
Foreign	791,028		760,658
Total	$	2,410,488	$	2,361,398
Life Insurance Companies:
Domestic	$	79,977	$	53,022

	Year Ended December 31,
Statutory net income (loss)	2020		2019		2018
Property and Casualty Insurance Companies:
Domestic	$	214,313	$	156,771	$	16,737
Foreign	174,861		106,734		64,810
Total	$	389,174	$	263,505	$	81,547
Life Insurance Companies:
Domestic	$	7,963	$	7,125	$	9,827

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following is a summary of the elements used in calculating basic and diluted earnings per common share:

	Year Ended December 31,
	2020		2019		2018
Numerator:
Net income attributable to NGHC	$	513,331	$	348,069	$	207,354
Preferred stock dividends - nonconvertible	(31,500)		(31,500)		(31,500)
Preferred stock dividends - convertible	(2,100)		(2,100)		(992)
Numerator for basic EPS	479,731		314,469		174,862
Effect of dilutive securities:
Preferred stock dividends - convertible	2,100		2,100		992
Numerator for diluted EPS - after assumed conversions	$	481,831	$	316,569	$	175,854
Denominator:
Denominator for basic EPS - weighted-average shares outstanding	113,511,669		113,199,501		107,659,813
Effect of dilutive securities:
Employee stock options	1,739,871		1,833,736		2,053,681
RSUs	385,582		274,262		319,089
Convertible preferred stock	789,473		789,473		789,473
Dilutive potential common shares	2,914,926		2,897,471		3,162,243
Denominator for diluted EPS - weighted-average shares outstanding and assumed conversions	116,426,595		116,096,972		110,822,056
EPS attributable to NGHC common stockholders:
Basic EPS	$	4.23	$	2.78	$	1.62
Diluted EPS	$	4.14	$	2.73	$	1.59

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Segment Information (Tables)

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Results of Operations by Segment

The following tables summarize the results of operations of the operating segments:

	Year Ended December 31, 2020
	Property and Casualty		Accident and Health		Corporate and Other		Total
Underwriting revenues:
Gross premium written	$	4,857,631	$	776,916	$	—	$	5,634,547
Ceded premiums	(923,168)		(90,535)		—		(1,013,703)
Net premium written	3,934,463		686,381		—		4,620,844
Change in unearned premium	(125,310)		(914)		—		(126,224)
Net earned premium	3,809,153		685,467		—		4,494,620
Ceding commission income	152,671		(214)		—		152,457
Service and fee income	391,702		368,672		—		760,374
Total underwriting revenues	4,353,526		1,053,925		—		5,407,451
Underwriting expenses:
Loss and loss adjustment expense	2,505,189		318,893		—		2,824,082
Acquisition costs and other underwriting expenses	681,286		309,283		—		990,569
General and administrative expenses	792,929		242,238		8,026		1,043,193
Total underwriting expenses	3,979,404		870,414		8,026		4,857,844
Underwriting income	374,122		183,511		(8,026)		549,607
Net investment income	—		—		118,257		118,257
Net gain on investments	—		—		26,577		26,577
Interest expense	—		—		(33,772)		(33,772)
Provision for income taxes	—		—		(136,461)		(136,461)
Net income attributable to noncontrolling interest	—		—		(10,877)		(10,877)
Net income attributable to NGHC	$	374,122	$	183,511	$	(44,302)	$	513,331

	Year Ended December 31, 2019
	Property and Casualty		Accident and Health		Corporate and Other		Total
Underwriting revenues:
Gross premium written	$	4,814,463	$	768,617	$	—	$	5,583,080
Ceded premiums	(1,250,448)		(108,011)		—		(1,358,459)
Net premium written	3,564,015		660,606		—		4,224,621
Change in unearned premium	(108,992)		2,413		—		(106,579)
Net earned premium	3,455,023		663,019		—		4,118,042
Ceding commission income	227,514		10,939		—		238,453
Service and fee income	392,478		249,487		—		641,965
Total underwriting revenues	4,075,015		923,445		—		4,998,460
Underwriting expenses:
Loss and loss adjustment expense	2,543,788		310,680		—		2,854,468
Acquisition costs and other underwriting expenses	605,019		222,348		—		827,367
General and administrative expenses	773,291		254,208		14,273		1,041,772
Total underwriting expenses	3,922,098		787,236		14,273		4,723,607
Underwriting income	152,917		136,209		(14,273)		274,853
Net investment income	—		—		141,233		141,233
Net gain on investments	—		—		13,473		13,473
Other income					26,428		26,428
Interest expense	—		—		(51,544)		(51,544)
Provision for income taxes	—		—		(77,013)		(77,013)
Net loss attributable to noncontrolling interest	—		—		20,639		20,639
Net income attributable to NGHC	$	152,917	$	136,209	$	58,943	$	348,069

	Year Ended December 31, 2018
	Property and Casualty		Accident and Health		Corporate and Other		Total
Underwriting revenues:
Gross premium written	$	4,718,730	$	698,109	$	—	$	5,416,839
Ceded premiums	(1,517,556)		(71,570)		—		(1,589,126)
Net premium written	3,201,174		626,539		—		3,827,713
Change in unearned premium	(85,385)		(10,126)		—		(95,511)
Net earned premium	3,115,789		616,413		—		3,732,202
Ceding commission income	217,694		7,003		—		224,697
Service and fee income	375,603		185,980		—		561,583
Total underwriting revenues	3,709,086		809,396		—		4,518,482
Underwriting expenses:
Loss and loss adjustment expense	2,340,881		321,345		—		2,662,226
Acquisition costs and other underwriting expenses	550,540		184,726		—		735,266
General and administrative expenses	726,238		201,808		10,000		938,046
Total underwriting expenses	3,617,659		707,879		10,000		4,335,538
Underwriting income	91,427		101,517		(10,000)		182,944
Net investment income	—		—		119,034		119,034
Net loss on investments	—		—		(29,545)		(29,545)
Interest expense	—		—		(51,425)		(51,425)
Provision for income taxes	—		—		(53,484)		(53,484)
Net loss attributable to noncontrolling interest	—		—		39,830		39,830
Net income attributable to NGHC	$	91,427	$	101,517	$	14,410	$	207,354

The following tables summarize the financial position of the operating segments:

	December 31, 2020
	Property and Casualty		Accident and Health		Corporate and Other		Total
Premiums and other receivables, net	$	1,304,636	$	237,474	$	3,270	$	1,545,380
Deferred acquisition costs	259,163		26,742		—		285,905
Reinsurance recoverable, net	1,187,855		31,075		—		1,218,930
Prepaid reinsurance premiums	412,950		1,060		—		414,010
Goodwill and Intangible assets, net	416,828		103,225		—		520,053
Prepaid and other assets	45,235		18,322		5,535		69,092
Corporate and other assets	—		—		6,074,524		6,074,524
Total assets	$	3,626,667	$	417,898	$	6,083,329	$	10,127,894

	December 31, 2019
	Property and Casualty		Accident and Health		Corporate and Other		Total
Premiums and other receivables, net	$	1,292,813	$	131,877	$	4,258	$	1,428,948
Deferred acquisition costs	239,293		24,230		—		263,523
Reinsurance recoverable, net	1,377,284		17,024		—		1,394,308
Prepaid reinsurance premiums	575,712		35		—		575,747
Goodwill and Intangible assets, net	436,724		108,427		—		545,151
Prepaid and other assets	56,960		32,852		4,830		94,642
Corporate and other assets	—		—		5,454,215		5,454,215
Total assets	$	3,978,786	$	314,445	$	5,463,303	$	9,756,534

Revenue from External Customers by Geographic Areas

The following table summarizes service and fee income by source within each operating segment:

	Year Ended December 31,
	2020						2019						2018
	Property and Casualty		Accident and Health		Total		Property and Casualty		Accident and Health		Total		Property and Casualty		Accident and Health		Total
Commission revenue	$	60,103	$	124,578	$	184,681	$	87,486	$	83,476	$	170,962	$	93,235	$	70,086	$	163,321
Finance and processing fees	129,327		9,546		138,873		128,302		6,197		134,499		121,058		4,535		125,593
Group health administrative fees	—		124,523		124,523		—		100,951		100,951		—		79,411		79,411
Installment fees	104,915		—		104,915		97,997		—		97,997		92,785		—		92,785
Late payment fees	32,377		59		32,436		34,210		309		34,519		33,765		86		33,851
Other service and fee income	64,980		109,966		174,946		44,483		58,554		103,037		34,760		31,862		66,622
Total	$	391,702	$	368,672	$	760,374	$	392,478	$	249,487	$	641,965	$	375,603	$	185,980	$	561,583
NGHC	$	385,391	$	368,672	$	754,063	$	386,723	$	249,487	$	636,210	$	369,852	$	185,980	$	555,832
Reciprocal Exchanges	6,311		—		6,311		5,755		—		5,755		5,751		—		5,751
Total	$	391,702	$	368,672	$	760,374	$	392,478	$	249,487	$	641,965	$	375,603	$	185,980	$	561,583

Revenue from External Customers by Product Type

The following tables show a summary of premiums and fee income by product line:

	Year Ended December 31,
Gross Premium Written	2020		2019		2018
Property and Casualty
Personal Auto	$	2,817,396	$	2,721,202	$	2,637,176
Homeowners	751,918		718,819		688,006
RV/Packaged	215,138		212,746		208,394
Small Business Auto	251,328		315,569		319,299
Lender-placed Insurance	402,768		342,267		363,056
Other	45,482		56,413		53,876
Total Property and Casualty	4,484,030		4,367,016		4,269,807
Accident and Health
Group	366,847		288,549		239,729
Individual	410,069		340,731		308,122
International	—		139,337		150,258
Total Accident and Health	776,916		768,617		698,109
Total NGHC	$	5,260,946	$	5,135,633	$	4,967,916
Reciprocal Exchanges
Personal Auto	$	131,286	$	152,688	$	153,129
Homeowners	238,972		290,972		291,907
Other	3,343		3,787		3,887
Total Reciprocal Exchanges	$	373,601	$	447,447	$	448,923
Total Gross Premium Written	$	5,634,547	$	5,583,080	$	5,416,839

	Year Ended December 31,
Net Premium Written	2020		2019		2018
Property and Casualty
Personal Auto	$	2,475,384	$	2,260,385	$	2,016,858
Homeowners	521,331		404,278		331,120
RV/Packaged	209,479		198,737		206,740
Small Business Auto	192,859		249,067		233,456
Lender-placed Insurance	314,642		198,171		202,069
Other	19,552		18,905		27,366
Total Property and Casualty	3,733,247		3,329,543		3,017,609
Accident and Health
Group	284,189		231,388		197,386
Individual	402,192		340,049		308,065
International	—		89,169		121,088
Total Accident and Health	686,381		660,606		626,539
Total NGHC	$	4,419,628	$	3,990,149	$	3,644,148
Reciprocal Exchanges
Personal Auto	$	91,182	$	134,958	$	61,759
Homeowners	108,624		98,009		120,875
Other	1,410		1,505		931
Total Reciprocal Exchanges	$	201,216	$	234,472	$	183,565
Total Net Premium Written	$	4,620,844	$	4,224,621	$	3,827,713

	Year Ended December 31,
Net Earned Premium	2020		2019		2018
Property and Casualty
Personal Auto	$	2,403,879	$	2,190,748	$	1,927,667
Homeowners	452,739		405,306		329,850
RV/Packaged	200,854		195,639		197,258
Small Business Auto	216,888		252,359		237,587
Lender-placed Insurance	293,353		182,231		215,811
Other	20,191		18,509		20,855
Total Property and Casualty	3,587,904		3,244,792		2,929,028
Accident and Health
Group	284,197		231,398		197,406
Individual	401,270		340,251		307,952
International	—		91,370		111,055
Total Accident and Health	685,467		663,019		616,413
Total NGHC	$	4,273,371	$	3,907,811	$	3,545,441
Reciprocal Exchanges
Personal Auto	$	111,353	$	106,549	$	59,923
Homeowners	108,629		101,964		125,806
Other	1,267		1,718		1,032
Total Reciprocal Exchanges	$	221,249	$	210,231	$	186,761
Total Net Earned Premium	$	4,494,620	$	4,118,042	$	3,732,202

	Year Ended December 31,
Fee Income	2020		2019		2018
Property and Casualty
Service and Fee Income	$	385,391	$	386,723	$	369,852
Ceding Commission Income	110,377		164,013		160,945
Total Property and Casualty	495,768		550,736		530,797
Accident and Health
Service and Fee Income
Group	172,526		134,206		104,504
Individual	11,062		9,650		9,304
Third-Party Fee	185,084		105,631		72,172
Total Service and Fee Income	368,672		249,487		185,980
Ceding Commission Income	(214)		10,939		7,003
Total Accident and Health	368,458		260,426		192,983
Total NGHC	$	864,226	$	811,162	$	723,780
Reciprocal Exchanges
Service and Fee Income	$	6,311	$	5,755	$	5,751
Ceding Commission Income	42,294		63,501		56,749
Total Reciprocal Exchanges	$	48,605	$	69,256	$	62,500
Total Fee Income	$	912,831	$	880,418	$	786,280

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Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

Schedule of Selected Quarterly Financial Information

The following tables summarize quarterly financial data:

	2020
	March 31,		June 30,		September 30,		December 31,
Total revenues	$	1,328,334	$	1,329,132	$	1,443,009	$	1,451,810
Total expenses	1,199,589		1,104,012		1,298,712		1,289,303
Provision for income taxes	28,172		50,507		27,428		30,354
Net income	100,573		174,613		116,869		132,153
Net income attributable to NGHC	100,759		166,574		109,969		136,029
Net income attributable to NGHC common stockholders	92,884		157,649		102,094		127,104
Basic EPS	$	0.82	$	1.39	$	0.90	$	1.12
Diluted EPS	$	0.80	$	1.37	$	0.88	$	1.10

	2019
	March 31,		June 30,		September 30,		December 31,
Total revenues	$	1,232,665	$	1,269,652	$	1,308,172	$	1,369,105
Total expenses	1,124,820		1,170,353		1,231,186		1,248,792
Provision for income taxes	22,506		22,241		16,747		15,519
Net income	85,339		77,058		60,239		104,794
Net income attributable to NGHC	91,758		77,876		71,154		107,281
Net income attributable to NGHC common stockholders	83,883		68,951		63,279		98,356
Basic EPS	$	0.74	$	0.61	$	0.56	$	0.87
Diluted EPS	$	0.72	$	0.60	$	0.54	$	0.85

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Organization (Details)	Dec. 31, 2020 state
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of states in which the Company is licensed to operate	50

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Significant Accounting Policies - Premiums and Other Receivables (Details)	12 Months Ended
	Dec. 31, 2020
Accounting Policies [Abstract]
Premium receivables, period for recognition, minimum	6 months
Premium receivables, period for recognition, maximum	12 months

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Significant Accounting Policies - Stock Compensation Expense (Details) - Restricted Stock Units (RSUs)	12 Months Ended
	Dec. 31, 2020
Minimum
Share-based Compensation
Award vesting period	3 years
Maximum
Share-based Compensation
Award vesting period	4 years

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Significant Accounting Policies - Premises and Equipment (Details)	12 Months Ended
	Dec. 31, 2020
Buildings and improvements
Property, Plant and Equipment
Estimated useful life	30 years
Other equipment | Minimum
Property, Plant and Equipment
Estimated useful life	3 years
Other equipment | Maximum
Property, Plant and Equipment
Estimated useful life	20 years
Hardware and software | Minimum
Property, Plant and Equipment
Estimated useful life	3 years
Hardware and software | Maximum
Property, Plant and Equipment
Estimated useful life	5 years

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Significant Accounting Policies - Recent Accounting Standards, Adopted (Details) - USD ($) $ in Thousands	Jan. 01, 2020	Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle
Cumulative-effect adjustment of change in accounting principles		$ 8,830
Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle
Cumulative-effect adjustment of change in accounting principles		$ 8,794
Accounting Standards Update 2016-13
New Accounting Pronouncements or Change in Accounting Principle
Cumulative-effect adjustment of change in accounting principles	$ (1,010)
Accounting Standards Update 2016-13 | Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle
Cumulative-effect adjustment of change in accounting principles	(863)
Accounting Standards Update 2016-13 | Noncontrolling Interest
New Accounting Pronouncements or Change in Accounting Principle
Cumulative-effect adjustment of change in accounting principles	$ (147)

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Allowance for Expected Credit Losses - Premiums and Other receivables - Changes in Allowance for Expected Credit Losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
New Accounting Pronouncements or Change in Accounting Principle
Premiums and other receivables, net	$ 1,545,380	$ 1,428,948
Premium Receivable, Allowance for Credit Loss
Balance, beginning of the year	24,067
Current period provision for expected credit losses	94,374
Write-offs of uncollectible premiums and other receivables	(96,422)
Balance, end of the year	22,781
Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020
Premium Receivable, Allowance for Credit Loss
Balance, beginning of the year	$ 762

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Allowance for Expected Credit Losses - Reinsurance Recoverable - Changes In Allowance for Expected Credit Losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
New Accounting Pronouncements or Change in Accounting Principle
Reinsurance recoverable, net	$ 1,218,930	$ 1,394,308
Reinsurance Recoverable, Allowance for Credit Loss
Balance, beginning of the year	0
Current period provision for expected credit losses	293
Balance, end of the year	810
Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020
Reinsurance Recoverable, Allowance for Credit Loss
Balance, beginning of the year	$ 517

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Investments - Debt Securities, Available-for-sale (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale
Amortized Cost	$ 4,234,213,000	$ 4,376,691,000
Allowance for Credit Losses	0
Gross Unrealized Gains	265,535,000	110,430,000
Gross Unrealized Losses	(2,618,000)	(10,763,000)
Fair Value	4,497,130,000	4,476,358,000
Reciprocal Exchanges
Debt Securities, Available-for-sale
Amortized Cost	305,075,000	319,190,000
Allowance for Credit Losses	0
Gross Unrealized Gains	5,397,000	5,479,000
Gross Unrealized Losses	(257,000)	(420,000)
Fair Value	310,215,000	324,249,000
NGHC
Debt Securities, Available-for-sale
Amortized Cost	3,929,138,000	4,057,501,000
Allowance for Credit Losses	0
Gross Unrealized Gains	260,138,000	104,951,000
Gross Unrealized Losses	(2,361,000)	(10,343,000)
Fair Value	4,186,915,000	4,152,109,000
U.S. Treasury
Debt Securities, Available-for-sale
Amortized Cost	51,749,000	65,037,000
Allowance for Credit Losses	0
Gross Unrealized Gains	3,199,000	1,992,000
Gross Unrealized Losses	0	(23,000)
Fair Value	54,948,000	67,006,000
Federal agencies
Debt Securities, Available-for-sale
Amortized Cost	258,000	3,907,000
Allowance for Credit Losses	0
Gross Unrealized Gains	3,000	8,000
Gross Unrealized Losses	0	0
Fair Value	261,000	3,915,000
States and political subdivision bonds
Debt Securities, Available-for-sale
Amortized Cost	304,687,000	298,345,000
Allowance for Credit Losses	0
Gross Unrealized Gains	17,758,000	4,778,000
Gross Unrealized Losses	(4,000)	(1,441,000)
Fair Value	322,441,000	301,682,000
Foreign government
Debt Securities, Available-for-sale
Amortized Cost	1,764,000	1,762,000
Allowance for Credit Losses	0
Gross Unrealized Gains	119,000	40,000
Gross Unrealized Losses	0	0
Fair Value	1,883,000	1,802,000
Corporate bonds
Debt Securities, Available-for-sale
Amortized Cost	1,992,193,000	1,859,736,000
Allowance for Credit Losses	0
Gross Unrealized Gains	141,234,000	59,184,000
Gross Unrealized Losses	(126,000)	(2,357,000)
Fair Value	2,133,301,000	1,916,563,000
Residential mortgage-backed securities
Debt Securities, Available-for-sale
Amortized Cost	1,064,041,000	1,265,830,000
Allowance for Credit Losses	0
Gross Unrealized Gains	42,597,000	15,747,000
Gross Unrealized Losses	(222,000)	(4,117,000)
Fair Value	1,106,416,000	1,277,460,000
Commercial mortgage-backed securities
Debt Securities, Available-for-sale
Amortized Cost	596,408,000	585,044,000
Allowance for Credit Losses	0
Gross Unrealized Gains	58,476,000	27,261,000
Gross Unrealized Losses	(252,000)	(112,000)
Fair Value	654,632,000	612,193,000
Asset-backed securities
Debt Securities, Available-for-sale
Amortized Cost	27,988,000	74,465,000
Allowance for Credit Losses	0
Gross Unrealized Gains	1,140,000	1,194,000
Gross Unrealized Losses	(236,000)	(48,000)
Fair Value	28,892,000	75,611,000
Structured securities
Debt Securities, Available-for-sale
Amortized Cost	195,125,000	222,565,000
Allowance for Credit Losses	0
Gross Unrealized Gains	1,009,000	226,000
Gross Unrealized Losses	(1,778,000)	(2,665,000)
Fair Value	$ 194,356,000	$ 220,126,000

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Investments - Debt Securities Maturities (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Amortized Cost
Due in one year or less	$ 61,921
Due after one year through five years	1,075,578
Due after five years through ten years	1,115,826
Due after ten years	292,451
Mortgage-backed securities	1,688,437
Total	4,234,213
Fair Value
Due in one year or less	62,731
Due after one year through five years	1,146,530
Due after five years through ten years	1,194,694
Due after ten years	303,235
Mortgage-backed securities	1,789,940
Total	4,497,130
Reciprocal Exchanges
Amortized Cost
Due in one year or less	0
Due after one year through five years	69,060
Due after five years through ten years	65,495
Due after ten years	22,214
Mortgage-backed securities	148,306
Total	305,075
Fair Value
Due in one year or less	0
Due after one year through five years	71,231
Due after five years through ten years	67,259
Due after ten years	22,368
Mortgage-backed securities	149,357
Total	310,215
NGHC
Amortized Cost
Due in one year or less	61,921
Due after one year through five years	1,006,518
Due after five years through ten years	1,050,331
Due after ten years	270,237
Mortgage-backed securities	1,540,131
Total	3,929,138
Fair Value
Due in one year or less	62,731
Due after one year through five years	1,075,299
Due after five years through ten years	1,127,435
Due after ten years	280,867
Mortgage-backed securities	1,640,583
Total	$ 4,186,915

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Investments - Gross Unrealized Losses (Details)	Dec. 31, 2020 USD ($) security	Dec. 31, 2019 USD ($) security
Debt Securities, Available-for-sale
Less Than 12 Months, Fair Value	$ 195,305,000	$ 1,187,942,000
Less Than 12 Months, Unrealized Losses	(1,346,000)	(7,993,000)
12 Months or More, Fair Value	44,057,000	124,587,000
12 Months or More, Unrealized Losses	(1,272,000)	(2,770,000)
Total, Fair Value	239,362,000	1,312,529,000
Total, Unrealized Losses	$ (2,618,000)	$ (10,763,000)
Number of securities with gross unrealized loss | security	134	1,337
Percent of amortized cost	25.00%	25.00%
Debt securities, available-for-sale, allowance for expected credit losses	$ 0
Reciprocal Exchanges
Debt Securities, Available-for-sale
Less Than 12 Months, Fair Value	57,677,000	$ 83,698,000
Less Than 12 Months, Unrealized Losses	(211,000)	(339,000)
12 Months or More, Fair Value	3,954,000	6,906,000
12 Months or More, Unrealized Losses	(46,000)	(81,000)
Total, Fair Value	61,631,000	90,604,000
Total, Unrealized Losses	(257,000)	(420,000)
Debt securities, available-for-sale, allowance for expected credit losses	0
NGHC
Debt Securities, Available-for-sale
Less Than 12 Months, Fair Value	137,628,000	1,104,244,000
Less Than 12 Months, Unrealized Losses	(1,135,000)	(7,654,000)
12 Months or More, Fair Value	40,103,000	117,681,000
12 Months or More, Unrealized Losses	(1,226,000)	(2,689,000)
Total, Fair Value	177,731,000	1,221,925,000
Total, Unrealized Losses	(2,361,000)	(10,343,000)
Debt securities, available-for-sale, allowance for expected credit losses	0
U.S. Treasury
Debt Securities, Available-for-sale
Less Than 12 Months, Fair Value		19,903,000
Less Than 12 Months, Unrealized Losses		(23,000)
12 Months or More, Fair Value		500,000
12 Months or More, Unrealized Losses		0
Total, Fair Value		20,403,000
Total, Unrealized Losses		(23,000)
Debt securities, available-for-sale, allowance for expected credit losses	0
States and political subdivision bonds
Debt Securities, Available-for-sale
Less Than 12 Months, Fair Value	1,111,000	106,103,000
Less Than 12 Months, Unrealized Losses	(4,000)	(1,415,000)
12 Months or More, Fair Value	0	2,580,000
12 Months or More, Unrealized Losses	0	(26,000)
Total, Fair Value	1,111,000	108,683,000
Total, Unrealized Losses	(4,000)	(1,441,000)
Debt securities, available-for-sale, allowance for expected credit losses	0
Corporate bonds
Debt Securities, Available-for-sale
Less Than 12 Months, Fair Value	29,161,000	586,817,000
Less Than 12 Months, Unrealized Losses	(126,000)	(2,253,000)
12 Months or More, Fair Value	0	5,976,000
12 Months or More, Unrealized Losses	0	(104,000)
Total, Fair Value	29,161,000	592,793,000
Total, Unrealized Losses	(126,000)	(2,357,000)
Debt securities, available-for-sale, allowance for expected credit losses	0
Residential mortgage-backed securities
Debt Securities, Available-for-sale
Less Than 12 Months, Fair Value	58,742,000	410,484,000
Less Than 12 Months, Unrealized Losses	(222,000)	(4,074,000)
12 Months or More, Fair Value	0	3,983,000
12 Months or More, Unrealized Losses	0	(43,000)
Total, Fair Value	58,742,000	414,467,000
Total, Unrealized Losses	(222,000)	(4,117,000)
Debt securities, available-for-sale, allowance for expected credit losses	0
Commercial mortgage-backed securities
Debt Securities, Available-for-sale
Less Than 12 Months, Fair Value	40,891,000	18,250,000
Less Than 12 Months, Unrealized Losses	(252,000)	(105,000)
12 Months or More, Fair Value	0	748,000
12 Months or More, Unrealized Losses	0	(7,000)
Total, Fair Value	40,891,000	18,998,000
Total, Unrealized Losses	(252,000)	(112,000)
Debt securities, available-for-sale, allowance for expected credit losses	0
Asset-backed securities
Debt Securities, Available-for-sale
Less Than 12 Months, Fair Value	5,041,000	5,406,000
Less Than 12 Months, Unrealized Losses	(228,000)	(29,000)
12 Months or More, Fair Value	151,000	920,000
12 Months or More, Unrealized Losses	(8,000)	(19,000)
Total, Fair Value	5,192,000	6,326,000
Total, Unrealized Losses	(236,000)	(48,000)
Debt securities, available-for-sale, allowance for expected credit losses	0
Structured securities
Debt Securities, Available-for-sale
Less Than 12 Months, Fair Value	60,359,000	40,979,000
Less Than 12 Months, Unrealized Losses	(514,000)	(94,000)
12 Months or More, Fair Value	43,906,000	109,880,000
12 Months or More, Unrealized Losses	(1,264,000)	(2,571,000)
Total, Fair Value	104,265,000	150,859,000
Total, Unrealized Losses	(1,778,000)	$ (2,665,000)
Debt securities, available-for-sale, allowance for expected credit losses	$ 0

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Investments - Net Investment Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net Investment Income
Investment income	$ 123,143	$ 145,807	$ 123,333
Investment expenses	(4,886)	(4,574)	(4,299)
Net investment income	118,257	141,233	119,034
Reciprocal Exchanges
Net Investment Income
Net investment income	7,256	8,638	8,875
NGHC
Net Investment Income
Net investment income	111,001	132,595	110,159
Cash and short-term investments
Net Investment Income
Investment Income	542	4,075	1,659
Debt securities, available-for-sale
Net Investment Income
Investment Income	119,873	124,379	107,077
Other
Net Investment Income
Other, net	2,728	17,353	14,597
Related parties | Other
Net Investment Income
Other, net	$ (2,230)	$ 7,718	$ 4,876

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Investments - Net Gain (Loss) on Investments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Gain (Loss) on Investments
Other, net	$ (1,606)	$ (6,248)	$ (11,275)
Net loss on investments	26,577	13,473	(29,545)
Reciprocal Exchanges
Gain (Loss) on Investments
Net loss on investments	12,432	(130)	(3,366)
NGHC
Gain (Loss) on Investments
Net loss on investments	14,145	13,603	(26,179)
Debt securities, available-for-sale
Gain (Loss) on Investments
Gross gains	29,666	23,178	4,590
Gross losses	(1,483)	(3,457)	(22,860)
Net realized gain (loss) on debt securities, available-for-sale	$ 28,183	$ 19,721	$ (18,270)

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Investments - Credit Quality of Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Debt securities, available-for-sale | Reciprocal Exchanges
Debt Securities, Available-for-sale
Amortized Cost	$ 305,075	$ 319,190
Fair Value	$ 310,215	$ 324,249
Percentage	100.00%	100.00%
Debt securities, available-for-sale | NGHC
Debt Securities, Available-for-sale
Amortized Cost	$ 3,929,138	$ 4,057,501
Fair Value	$ 4,186,915	$ 4,152,109
Percentage	100.00%	100.00%
U.S. Treasury | Reciprocal Exchanges
Debt Securities, Available-for-sale
Amortized Cost	$ 14,441	$ 12,929
Fair Value	$ 14,734	$ 13,407
Percentage	4.70%	4.10%
U.S. Treasury | NGHC
Debt Securities, Available-for-sale
Amortized Cost	$ 37,307	$ 52,108
Fair Value	$ 40,213	$ 53,599
Percentage	1.00%	1.30%
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | AAA | Reciprocal Exchanges
Debt Securities, Available-for-sale
Amortized Cost	$ 28,232	$ 20,947
Fair Value	$ 28,496	$ 21,555
Percentage	9.20%	6.60%
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | AAA | NGHC
Debt Securities, Available-for-sale
Amortized Cost	$ 523,929	$ 515,869
Fair Value	$ 568,028	$ 537,508
Percentage	13.60%	12.90%
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | AA, AA+, AA- | Reciprocal Exchanges
Debt Securities, Available-for-sale
Amortized Cost	$ 150,794	$ 120,113
Fair Value	$ 152,059	$ 121,720
Percentage	49.00%	37.50%
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | AA, AA+, AA- | NGHC
Debt Securities, Available-for-sale
Amortized Cost	$ 1,428,942	$ 1,677,787
Fair Value	$ 1,507,760	$ 1,697,220
Percentage	36.00%	40.90%
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | A, A+, A- | Reciprocal Exchanges
Debt Securities, Available-for-sale
Amortized Cost	$ 42,283	$ 116,747
Fair Value	$ 43,605	$ 119,041
Percentage	14.10%	36.70%
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | A, A+, A- | NGHC
Debt Securities, Available-for-sale
Amortized Cost	$ 1,106,964	$ 954,312
Fair Value	$ 1,167,933	$ 976,468
Percentage	27.90%	23.50%
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | BBB, BBB+, BBB- | Reciprocal Exchanges
Debt Securities, Available-for-sale
Amortized Cost	$ 69,325	$ 48,021
Fair Value	$ 71,321	$ 48,093
Percentage	23.00%	14.80%
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | BBB, BBB+, BBB- | NGHC
Debt Securities, Available-for-sale
Amortized Cost	$ 818,523	$ 795,594
Fair Value	$ 888,515	$ 823,239
Percentage	21.20%	19.80%
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | BB+ and lower | Reciprocal Exchanges
Debt Securities, Available-for-sale
Amortized Cost	$ 0	$ 433
Fair Value	$ 0	$ 433
Percentage	0.00%	0.30%
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | BB+ and lower | NGHC
Debt Securities, Available-for-sale
Amortized Cost	$ 13,473	$ 61,831
Fair Value	$ 14,466	$ 64,075
Percentage	0.30%	1.60%

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Investments - Investment Quality Summary (Details) - Corporate Debt Securities - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale
Fair Value	$ 2,133,301	$ 1,916,563
% of Corporate Bonds Portfolio	100.00%	100.00%
Reciprocal Exchanges
Debt Securities, Available-for-sale
Fair Value	$ 114,976	$ 195,601
% of Corporate Bonds Portfolio	5.40%	10.20%
NGHC
Debt Securities, Available-for-sale
Fair Value	$ 2,018,325	$ 1,720,962
% of Corporate Bonds Portfolio	94.60%	89.80%
Financial Institutions
Debt Securities, Available-for-sale
Fair Value	$ 863,046	$ 785,910
% of Corporate Bonds Portfolio	40.50%	41.00%
Industrials
Debt Securities, Available-for-sale
Fair Value	$ 1,208,646	$ 1,083,959
% of Corporate Bonds Portfolio	56.70%	56.60%
Utilities And Other
Debt Securities, Available-for-sale
Fair Value	$ 61,609	$ 46,694
% of Corporate Bonds Portfolio	2.80%	2.40%
AAA
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	0.30%	0.70%
AAA | Reciprocal Exchanges
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	0.00%	0.40%
AAA | NGHC
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	0.30%	0.30%
AAA | Financial Institutions
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	0.00%	0.00%
AAA | Industrials
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	0.30%	0.70%
AAA | Utilities And Other
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	0.00%	0.00%
AA, AA+, AA-
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	5.50%	6.30%
AA, AA+, AA- | Reciprocal Exchanges
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	0.00%	1.20%
AA, AA+, AA- | NGHC
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	5.50%	5.10%
AA, AA+, AA- | Financial Institutions
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	2.30%	3.60%
AA, AA+, AA- | Industrials
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	3.20%	2.70%
AA, AA+, AA- | Utilities And Other
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	0.00%	0.00%
A, A+, A-
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	51.20%	50.10%
A, A+, A- | Reciprocal Exchanges
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	2.00%	6.10%
A, A+, A- | NGHC
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	49.20%	44.00%
A, A+, A- | Financial Institutions
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	24.10%	25.00%
A, A+, A- | Industrials
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	25.50%	24.10%
A, A+, A- | Utilities And Other
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	1.60%	1.00%
BBB, BBB+, BBB-
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	42.90%	42.50%
BBB, BBB+, BBB- | Reciprocal Exchanges
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	3.40%	2.50%
BBB, BBB+, BBB- | NGHC
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	39.50%	40.00%
BBB, BBB+, BBB- | Financial Institutions
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	14.10%	12.10%
BBB, BBB+, BBB- | Industrials
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	27.60%	29.00%
BBB, BBB+, BBB- | Utilities And Other
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	1.20%	1.40%
BB+ and lower
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	0.10%	0.40%
BB+ and lower | Reciprocal Exchanges
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	0.00%	0.00%
BB+ and lower | NGHC
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	0.10%	0.40%
BB+ and lower | Financial Institutions
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	0.00%	0.30%
BB+ and lower | Industrials
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	0.10%	0.10%
BB+ and lower | Utilities And Other
Debt Securities, Available-for-sale
Investment quality - corporate bond holdings and industry concentrations	0.00%	0.00%

XML

Investments - Cash and Cash Equivalents, Restricted Cash and Restricted Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Investments, Debt and Equity Securities [Abstract]
Cash and cash equivalents	$ 662,772	$ 135,942
Restricted cash and cash equivalents	36,995	28,521
Total cash, cash equivalents and restricted cash	699,767	164,463	$ 233,583	$ 357,484
Securities on deposit with state regulatory authorities	83,764	74,061
Restricted investments to trusts in certain reinsurance transactions	26,650	49,502
Total restricted investments	$ 110,414	$ 123,563

XML

Investments - Other Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Investment
Other investments	$ 281,055	$ 311,287
Equity Method Investments
Investment
Other investments	136,201	143,511
Notes Receivable
Investment
Other investments	130,784	129,229
Long-term Certificates of Deposit (CDs), at cost
Investment
Other investments	134	20,150
Investments, at fair value
Investment
Other investments	5,936	9,365
Investments, at cost or amortized cost
Investment
Other investments	7,960	8,962
Related parties
Investment
Other investments	231,927	238,841
Related parties | Equity Method Investments
Investment
Other investments	101,143	109,612
Related parties | Notes Receivable
Investment
Other investments	$ 130,824	$ 129,299

XML

Investments - Related Parties - LSC Entity (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) contract	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
LSC Entity | AmTrust Financial Services, Inc.
Schedule of Equity Method Investments
Equity method investment, ownership percentage	50.00%
LSC Entities investment in LP
Schedule of Equity Method Investments
Equity method investment, ownership percentage	30.00%
VIE, Not primary beneficiary | LSC Entity | Related parties
Schedule of Equity Method Investments
Equity method investment, ownership percentage	50.00%
Life settlement contracts, investment method, number of contracts | contract	1
Equity method investments	$ 44,847	$ 49,477	$ 48,324
Earnings (losses) of equity method investments	(5,630)	3,395	4,276
Payments to Acquire Equity Method Investments	1,000	258	2,000
Distributions	$ 0	$ 2,500	$ 118,635

XML

Investments - Related Parties - 800 Superior, LLC (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Schedule of Equity Method Investments
Rent expense			$ 35,723
800 Superior, LLC | Related parties
Schedule of Equity Method Investments
Rent expense	$ 3,045	$ 2,967	2,889
800 Superior, LLC | Related parties | VIE, Not primary beneficiary
Schedule of Equity Method Investments
Equity method investments	9,559	9,365
Earnings (losses) of equity method investments	194	1,953	(531)
Payments to Acquire Equity Method Investments	$ 0	$ 2,287	$ 0
800 Superior, LLC | AmTrust Financial Services, Inc. | Related parties | VIE, Not primary beneficiary
Schedule of Equity Method Investments
Equity method investment, ownership percentage	50.00%

XML

Investments - Related Parties - North Dearborn Building Company, L.P. (Details) - North Dearborn Building Company, L.P. - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Related parties | VIE, Not primary beneficiary
Schedule of Equity Method Investments
Equity method investments	$ 5,744	$ 5,317
Earnings (losses) of equity method investments	967	(357)	$ (243)
Distributions	$ 540	$ 540	$ 1,125
AmTrust Financial Services, Inc. | Related parties | VIE, Not primary beneficiary
Schedule of Equity Method Investments
Equity method investment, ownership percentage	45.00%
NA Advisors GP LLC
Schedule of Equity Method Investments
Limited partnership, percentage participation	10.00%
Limited partnership, percentage of profit interest	10.00%

XML

Investments - Related Parties - 4455 LBJ Freeway, LLC (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Schedule of Equity Method Investments
Rent expense			$ 35,723
4455 LBJ Freeway, LLC | Related parties
Schedule of Equity Method Investments
Equity method investments	$ 1,677	$ 1,074
4455 LBJ Freeway, LLC | Related parties | VIE, Not primary beneficiary
Schedule of Equity Method Investments
Earnings (losses) of equity method investments	$ 603	281	53
4455 LBJ Freeway, LLC | Related parties | AmTrust Financial Services, Inc. | VIE, Not primary beneficiary
Schedule of Equity Method Investments
Equity method investment, ownership percentage	50.00%
4455 LBJ Freeway, LLC | Related parties | 4455 LBJ Freeway, LLC
Schedule of Equity Method Investments
Rent expense	$ 2,482	$ 2,422	$ 2,225

XML

Investments - Related Parties - Illinois Center Building, L.P. (Details) - Illinois Center Building, L.P. - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Related parties | VIE, Not primary beneficiary
Schedule of Equity Method Investments
Equity method investments	$ 39,316	$ 44,379
Earnings (losses) of equity method investments	(3,188)	(2,321)	$ (3,390)
Payments to Acquire Equity Method Investments	0	1,125	2,250
Distributions	$ 1,875	$ 0	$ 0
AmTrust Financial Services, Inc. | Related parties | VIE, Not primary beneficiary
Schedule of Equity Method Investments
Equity method investment, ownership percentage	37.50%
ACP Re
Schedule of Equity Method Investments
Limited partnership, percentage participation	15.00%
NA Advisors GP LLC
Schedule of Equity Method Investments
Limited partnership, percentage participation	10.00%
Limited partnership, percentage of profit interest	10.00%

XML

Fair Value of Financial Instruments - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	$ 4,497,130	$ 4,476,358
Short-term investments	191,086	67,353
Other investments	281,055	311,287
Reciprocal Exchanges
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	310,215	324,249
Short-term investments	26,887	5,245
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	4,497,130	4,476,358
Total	4,694,152	4,553,076
Recurring | Reciprocal Exchanges
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total	337,102	329,494
Level 1 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	55,209	70,921
Total	229,202	135,755
Level 1 | Recurring | Reciprocal Exchanges
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total	41,620	19,153
Level 2 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	4,437,077	4,394,009
Total	4,457,077	4,401,409
Level 2 | Recurring | Reciprocal Exchanges
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total	295,482	310,341
Level 3 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	4,844	11,428
Total	7,873	15,912
Level 3 | Recurring | Reciprocal Exchanges
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total	0	0
NGHC
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	4,186,915	4,152,109
NGHC | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total	4,357,050	4,223,582
NGHC | Level 1 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total	187,582	116,602
NGHC | Level 2 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total	4,161,595	4,091,068
NGHC | Level 3 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total	7,873	15,912
U.S. Treasury
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	54,948	67,006
U.S. Treasury | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	54,948	67,006
U.S. Treasury | Level 1 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	54,948	67,006
U.S. Treasury | Level 2 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
U.S. Treasury | Level 3 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
Federal agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	261	3,915
Federal agencies | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	261	3,915
Federal agencies | Level 1 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	261	3,915
Federal agencies | Level 2 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
Federal agencies | Level 3 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
States and political subdivision bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	322,441	301,682
States and political subdivision bonds | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	322,441	301,682
States and political subdivision bonds | Level 1 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
States and political subdivision bonds | Level 2 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	319,921	298,582
States and political subdivision bonds | Level 3 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	2,520	3,100
Foreign government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	1,883	1,802
Foreign government | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	1,883	1,802
Foreign government | Level 1 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
Foreign government | Level 2 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	1,883	1,802
Foreign government | Level 3 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	2,133,301	1,916,563
Corporate bonds | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	2,133,301	1,916,563
Corporate bonds | Level 1 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
Corporate bonds | Level 2 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	2,130,977	1,908,235
Corporate bonds | Level 3 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	2,324	8,328
Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	1,106,416	1,277,460
Residential mortgage-backed securities | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	1,106,416	1,277,460
Residential mortgage-backed securities | Level 1 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
Residential mortgage-backed securities | Level 2 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	1,106,416	1,277,460
Residential mortgage-backed securities | Level 3 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	654,632	612,193
Commercial mortgage-backed securities | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	654,632	612,193
Commercial mortgage-backed securities | Level 1 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
Commercial mortgage-backed securities | Level 2 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	654,632	612,193
Commercial mortgage-backed securities | Level 3 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	28,892	75,611
Asset-backed securities | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	28,892	75,611
Asset-backed securities | Level 1 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
Asset-backed securities | Level 2 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	28,892	75,611
Asset-backed securities | Level 3 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
Structured securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	194,356	220,126
Structured securities | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	194,356	220,126
Structured securities | Level 1 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
Structured securities | Level 2 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	194,356	220,126
Structured securities | Level 3 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Debt securities, available-for-sale at fair value	0	0
Short-term Investments | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term investments	191,086	67,353
Short-term Investments | Level 1 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term investments	171,086	59,953
Short-term Investments | Level 2 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term investments	20,000	7,400
Short-term Investments | Level 3 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term investments	0	0
Other investments | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Other investments	5,936	9,365
Other investments | Level 1 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Other investments	2,907	4,881
Other investments | Level 2 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Other investments	0	0
Other investments | Level 3 | Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Other investments	$ 3,029	$ 4,484

XML

Fair Value of Financial Instruments - Changes in Fair Value of Level 3 Financial Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation
Balance, beginning of period	$ 15,912	$ 22,956
Total gains (losses) for the period:
Included in net income	(531)	(1,851)
Included in other comprehensive income	(6,584)	(3,935)
Sales	(924)	(1,258)
Balance, end of period	7,873	15,912
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period	(531)	(1,851)
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period	(6,584)	(3,935)
States and political subdivision bonds
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation
Balance, beginning of period	3,100	3,596
Total gains (losses) for the period:
Included in net income	0	0
Included in other comprehensive income	(580)	(496)
Sales	0	0
Balance, end of period	2,520	3,100
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period	(580)	(496)
Corporate bonds
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation
Balance, beginning of period	8,328	11,767
Total gains (losses) for the period:
Included in net income	0	0
Included in other comprehensive income	(6,004)	(3,439)
Sales	0	0
Balance, end of period	2,324	8,328
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period	(6,004)	(3,439)
Other investments
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation
Balance, beginning of period	4,484	7,593
Total gains (losses) for the period:
Included in net income	(531)	(1,851)
Included in other comprehensive income	0	0
Sales	(924)	(1,258)
Balance, end of period	3,029	4,484
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period	$ (531)	$ (1,851)

XML

Fair Value of Financial Instruments - Carrying Value and Fair Value of Debt not Carried at Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Carrying amount	$ 676,810	$ 686,006
7.625% Notes | Senior Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Interest rate on debt	7.625%
Carrying amount	$ 97,015	96,928
6.75% Notes | Senior Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Interest rate on debt	6.75%
Carrying amount	$ 347,743	347,091
Subordinated Debentures | Surplus Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Carrying amount	72,168	72,168
2019 Credit Agreement | Line of Credit
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Carrying amount	140,000	140,000
Level 2 | 7.625% Notes | Senior Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Fair value	101,400	103,560
Level 3 | 6.75% Notes | Senior Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Fair value	386,275	371,366
Level 3 | Subordinated Debentures | Surplus Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Fair value	72,139	72,103
Level 3 | 2019 Credit Agreement | Line of Credit
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Fair value	$ 144,063	$ 148,272

XML

Deferred Acquisition Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Movement Analysis of Deferred Policy Acquisition Costs
Balance, beginning of the year	$ 263,523	$ 251,408	$ 216,389
Additions	658,195	592,412	545,812
Amortization	(635,813)	(577,357)	(510,793)
Disposition	0	(2,940)	0
Change in DAC	22,382	12,115	35,019
Balance, end of the year	285,905	263,523	251,408
Reciprocal Exchanges
Movement Analysis of Deferred Policy Acquisition Costs
Balance, beginning of the year	23,307	20,007
Balance, end of the year	19,200	23,307	20,007
NGHC
Movement Analysis of Deferred Policy Acquisition Costs
Balance, beginning of the year	240,216	231,401
Balance, end of the year	266,705	240,216	231,401
Property and Casualty
Movement Analysis of Deferred Policy Acquisition Costs
Balance, beginning of the year	239,293	226,188	198,283
Additions	633,775	552,921	522,914
Amortization	(613,905)	(539,816)	(495,009)
Disposition	0	0	0
Change in DAC	19,870	13,105	27,905
Balance, end of the year	259,163	239,293	226,188
Property and Casualty | Reciprocal Exchanges
Movement Analysis of Deferred Policy Acquisition Costs
Balance, beginning of the year	23,307	20,007
Balance, end of the year	19,200	23,307	20,007
Property and Casualty | NGHC
Movement Analysis of Deferred Policy Acquisition Costs
Balance, beginning of the year	215,986	206,181
Balance, end of the year	239,963	215,986	206,181
Accident and Health
Movement Analysis of Deferred Policy Acquisition Costs
Balance, beginning of the year	24,230	25,220	18,106
Additions	24,420	39,491	22,898
Amortization	(21,908)	(37,541)	(15,784)
Disposition	0	(2,940)	0
Change in DAC	2,512	(990)	7,114
Balance, end of the year	26,742	24,230	25,220
Accident and Health | Reciprocal Exchanges
Movement Analysis of Deferred Policy Acquisition Costs
Balance, beginning of the year	0	0
Balance, end of the year	0	0	0
Accident and Health | NGHC
Movement Analysis of Deferred Policy Acquisition Costs
Balance, beginning of the year	24,230	25,220
Balance, end of the year	$ 26,742	$ 24,230	$ 25,220

XML

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment
Finance lease right-of-use assets, Cost	$ 38,867	$ 37,515
Finance lease right-of-use assets, Accumulated Depreciation	(22,631)	(16,511)
Finance lease right-of-use assets, Net Value	16,236	21,004
Operating lease right-of-use assets	111,001	119,934
Total, Cost	666,371	634,717
Total, Accumulated Depreciation	(288,688)	(230,890)
Total, Net Value	377,683	403,827
Depreciation and amortization expense	59,926	61,965	$ 55,928
Reciprocal Exchanges
Property, Plant and Equipment
Total, Cost	9,059	9,059
Total, Accumulated Depreciation	(9,059)	(8,818)
Total, Net Value	0	241
NGHC
Property, Plant and Equipment
Total, Cost	657,312	625,658
Total, Accumulated Depreciation	(279,629)	(222,072)
Total, Net Value	377,683	403,586
Land
Property, Plant and Equipment
Cost	5,788	5,788
Accumulated Depreciation	0	0
Net Value	5,788	5,788
Buildings
Property, Plant and Equipment
Cost	26,245	24,997
Accumulated Depreciation	(3,416)	(2,669)
Net Value	22,829	22,328
Leasehold improvements
Property, Plant and Equipment
Cost	39,591	34,238
Accumulated Depreciation	(17,305)	(12,372)
Net Value	22,286	21,866
Other equipment
Property, Plant and Equipment
Cost	26,909	24,627
Accumulated Depreciation	(3,916)	(3,044)
Net Value	22,993	21,583
Hardware and software
Property, Plant and Equipment
Cost	417,970	387,618
Accumulated Depreciation	(241,420)	(196,294)
Net Value	$ 176,550	$ 191,324

XML

Goodwill and Intangible Assets - Composition of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets
Finite-lived intangible assets, Gross Balance	$ 256,628	$ 273,234
Finite-lived intangible assets, , Accumulated Amortization	(153,828)	(145,336)
Total	$ 102,800	127,898
Finite-lived intangible assets, Weighted-average amortization period	5 years 2 months 12 days
Total Intangible assets, Gross Balance	$ 494,553	511,159
Intangible assets, net	340,725	365,823
Net loss reserve plus a risk premium, Gross Balance	(17,266)	(17,266)
Net loss reserve plus a risk premium, Accumulated Amortization	14,977	9,947
Net loss reserve plus a risk premium, Net Value	$ (2,289)	(7,319)
Net loss reserve plus a risk premium, weighted average amortization period	9 months 18 days
Reciprocal Exchanges
Finite-Lived Intangible Assets
Finite-lived intangible assets, , Accumulated Amortization	$ (855)	(675)
Total Intangible assets, Gross Balance	3,900	3,900
Intangible assets, net	3,045	3,225
Net loss reserve plus a risk premium, Gross Balance	(4,013)	(4,013)
Net loss reserve plus a risk premium, Accumulated Amortization	3,979	3,930
Net loss reserve plus a risk premium, Net Value	(34)	(83)
NGHC
Finite-Lived Intangible Assets
Finite-lived intangible assets, , Accumulated Amortization	(152,973)	(144,661)
Total Intangible assets, Gross Balance	490,653	507,259
Intangible assets, net	337,680	362,598
Net loss reserve plus a risk premium, Gross Balance	(13,253)	(13,253)
Net loss reserve plus a risk premium, Accumulated Amortization	10,998	6,017
Net loss reserve plus a risk premium, Net Value	(2,255)	(7,236)
Management contracts
Indefinite-lived Intangible Assets
Indefinite-lived intangible assets, excluding goodwill	118,600	118,600
State licenses
Indefinite-lived Intangible Assets
Indefinite-lived intangible assets, excluding goodwill	89,325	89,325
Trademarks
Indefinite-lived Intangible Assets
Indefinite-lived intangible assets, excluding goodwill	30,000	30,000
Agent/Customer relationships
Finite-Lived Intangible Assets
Finite-lived intangible assets, Gross Balance	175,352	175,157
Finite-lived intangible assets, , Accumulated Amortization	(90,986)	(76,156)
Total	$ 84,366	99,001
Finite-lived intangible assets, Weighted-average amortization period	6 years 8 months 12 days
Renewal rights
Finite-Lived Intangible Assets
Finite-lived intangible assets, Gross Balance	$ 33,565	48,566
Finite-lived intangible assets, , Accumulated Amortization	(29,351)	(41,257)
Total	$ 4,214	7,309
Finite-lived intangible assets, Weighted-average amortization period	8 months 12 days
Other intangibles
Finite-Lived Intangible Assets
Finite-lived intangible assets, Gross Balance	$ 47,711	49,511
Finite-lived intangible assets, , Accumulated Amortization	(33,491)	(27,923)
Total	$ 14,220	$ 21,588
Finite-lived intangible assets, Weighted-average amortization period	2 years 10 months 24 days

XML

Goodwill and Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Schedule of Amortization Expense
Amortization	$ 80,694	$ 96,279	$ 86,346
Total	20,768	34,736	31,367
Reciprocal Exchanges
Schedule of Amortization Expense
Total	131	71	44
Other intangibles
Schedule of Amortization Expense
Amortization	25,798	39,024	31,999
Loss reserve discount
Schedule of Amortization Expense
Amortization of loss reserve premium	(5,030)	(4,288)	(632)
NGHC
Schedule of Amortization Expense
Total	$ 20,637	$ 34,665	$ 31,323

XML

Goodwill and Intangible Assets - Future Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Entity Information
Total	$ 102,800	$ 127,898
Finite-Lived Intangible Assets, Excluding Loss Reserve And Premium Risk
Entity Information
2021	16,632
2022	14,648
2023	12,383
2024	11,452
2025	10,989
Thereafter	34,407
Total	100,511
Finite-Lived Intangible Assets, Excluding Loss Reserve And Premium Risk | Reciprocal Exchanges
Entity Information
2021	23
2022	(9)
2023	(3)
2024	0
2025	0
Thereafter	0
Total	11
Finite-Lived Intangible Assets, Excluding Loss Reserve And Premium Risk | NGHC
Entity Information
2021	16,609
2022	14,657
2023	12,386
2024	11,452
2025	10,989
Thereafter	34,407
Total	$ 100,500

XML

Unpaid Losses and Loss Adjustment Expense Reserves - Activity of Loss Reserves (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Liability for Unpaid Claims and Claims Adjustment Expense
Gross balance at beginning of the year	$ 2,889,098	$ 2,886,414	$ 2,957,159
Less: Reinsurance recoverable at beginning of the year	(1,111,808)	(1,285,142)	(1,129,743)
Net balance at beginning of the year	1,774,606	1,672,017	1,533,814
Incurred losses and LAE related to:
Current year	2,819,891	2,849,304	2,696,260
Prior year	4,191	5,164	(34,034)
Total incurred	2,824,082	2,854,468	2,662,226
Paid losses and LAE related to:
Current year	(1,736,104)	(1,760,686)	(1,634,426)
Prior year	(972,014)	(995,877)	(880,811)
Total paid	(2,708,118)	(2,756,563)	(2,515,237)
Acquired losses and LAE reserves		92,574
Disposed losses and LAE reserves		(87,890)
Unrealized foreign exchange gain			(8,786)
Net balance at end of the year	1,890,570	1,774,606	1,672,017
Plus: Reinsurance recoverable at end of the year	998,528	1,111,808	1,285,142
Gross balance at end of the year	2,886,414	2,957,159	2,663,557
Reciprocal Exchanges
Liability for Unpaid Claims and Claims Adjustment Expense
Gross balance at beginning of the year	205,972	205,786
Paid losses and LAE related to:
Gross balance at end of the year	205,786
NGHC
Liability for Unpaid Claims and Claims Adjustment Expense
Gross balance at beginning of the year	2,683,126	2,680,628	2,778,689
Less: Reinsurance recoverable at beginning of the year	(1,027,634)	(1,207,163)	(1,077,335)
Net balance at beginning of the year	1,652,994	1,571,526	1,442,869
Incurred losses and LAE related to:
Current year	2,666,511	2,676,089	2,535,245
Prior year	3,221	1,267	(35,737)
Total incurred	2,669,732	2,677,356	2,499,508
Paid losses and LAE related to:
Current year	(1,641,817)	(1,649,306)	(1,524,373)
Prior year	(918,697)	(951,266)	(837,692)
Total paid	(2,560,514)	(2,600,572)	(2,362,065)
Acquired losses and LAE reserves		92,574
Disposed losses and LAE reserves		(87,890)
Unrealized foreign exchange gain			(8,786)
Net balance at end of the year	1,762,212	1,652,994	1,571,526
Plus: Reinsurance recoverable at end of the year	920,914	1,027,634	1,207,163
Gross balance at end of the year	2,680,628	2,778,689	2,520,204
Property and Casualty
Incurred losses and LAE related to:
Current year	2,477,177	2,493,268	2,343,938
Prior year	28,012	50,520	(3,057)
Property and Casualty | Reciprocal Exchanges
Liability for Unpaid Claims and Claims Adjustment Expense
Gross balance at beginning of the year	205,972	205,786	178,470
Less: Reinsurance recoverable at beginning of the year	(84,174)	(77,979)	(52,408)
Net balance at beginning of the year	121,612	100,491	90,945
Incurred losses and LAE related to:
Current year	153,380	173,215	161,015
Prior year	970	3,897	1,703
Total incurred	154,350	177,112	162,718
Paid losses and LAE related to:
Current year	(94,287)	(111,380)	(110,053)
Prior year	(53,317)	(44,611)	(43,119)
Total paid	(147,604)	(155,991)	(153,172)
Acquired losses and LAE reserves		0
Disposed losses and LAE reserves		0
Unrealized foreign exchange gain			0
Net balance at end of the year	128,358	121,612	100,491
Plus: Reinsurance recoverable at end of the year	77,614	84,174	77,979
Gross balance at end of the year	205,786	178,470	143,353
Property and Casualty | NGHC
Liability for Unpaid Claims and Claims Adjustment Expense
Gross balance at beginning of the year	2,502,199	2,528,754	2,507,409
Less: Reinsurance recoverable at beginning of the year	(1,016,368)	(1,182,588)	(1,067,495)
Net balance at beginning of the year	1,512,386	1,324,821	1,203,056
Incurred losses and LAE related to:
Current year	2,323,797	2,320,053	2,182,923
Prior year	27,042	46,623	(4,760)
Total incurred	2,350,839	2,366,676	2,178,163
Paid losses and LAE related to:
Current year	(1,432,498)	(1,430,072)	(1,336,359)
Prior year	(827,745)	(841,613)	(720,039)
Total paid	(2,260,243)	(2,271,685)	(2,056,398)
Acquired losses and LAE reserves		92,574
Disposed losses and LAE reserves		0
Unrealized foreign exchange gain			0
Net balance at end of the year	1,602,982	1,512,386	1,324,821
Plus: Reinsurance recoverable at end of the year	899,217	1,016,368	1,182,588
Gross balance at end of the year	2,528,754	2,507,409	2,270,551
Accident and Health
Incurred losses and LAE related to:
Current year	342,714	356,036	352,322
Prior year	(23,821)	(45,356)	(30,977)
Accident and Health | NGHC
Liability for Unpaid Claims and Claims Adjustment Expense
Gross balance at beginning of the year	180,927	151,874	271,280
Less: Reinsurance recoverable at beginning of the year	(11,266)	(24,575)	(9,840)
Net balance at beginning of the year	140,608	246,705	239,813
Incurred losses and LAE related to:
Current year	342,714	356,036	352,322
Prior year	(23,821)	(45,356)	(30,977)
Total incurred	318,893	310,680	321,345
Paid losses and LAE related to:
Current year	(209,319)	(219,234)	(188,014)
Prior year	(90,952)	(109,653)	(117,653)
Total paid	(300,271)	(328,887)	(305,667)
Acquired losses and LAE reserves		0
Disposed losses and LAE reserves		(87,890)
Unrealized foreign exchange gain			(8,786)
Net balance at end of the year	159,230	140,608	246,705
Plus: Reinsurance recoverable at end of the year	21,697	11,266	24,575
Gross balance at end of the year	$ 151,874	$ 271,280	$ 249,653

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Unpaid Losses and Loss Adjustment Expense Reserves - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Liability for Claims and Claims Adjustment Expense
Increase (decrease) in gross unpaid losses and loss adjustment expense reserves		$ (70,745)
Unfavorable (favorable) loss development on prior year loss and LAE reserves	$ 4,191	5,164	$ (34,034)
NGHC
Liability for Claims and Claims Adjustment Expense
Unfavorable (favorable) loss development on prior year loss and LAE reserves	3,221	1,267	(35,737)
Property and Casualty
Liability for Claims and Claims Adjustment Expense
Unfavorable (favorable) loss development on prior year loss and LAE reserves	28,012	50,520	(3,057)
Property and Casualty | Reciprocal Exchanges
Liability for Claims and Claims Adjustment Expense
Unfavorable (favorable) loss development on prior year loss and LAE reserves	970	3,897	1,703
Property and Casualty | NGHC
Liability for Claims and Claims Adjustment Expense
Unfavorable (favorable) loss development on prior year loss and LAE reserves	27,042	46,623	(4,760)
Accident and Health
Liability for Claims and Claims Adjustment Expense
Unfavorable (favorable) loss development on prior year loss and LAE reserves	(23,821)	(45,356)	(30,977)
Accident and Health | NGHC
Liability for Claims and Claims Adjustment Expense
Unfavorable (favorable) loss development on prior year loss and LAE reserves	$ (23,821)	$ (45,356)	$ (30,977)

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Unpaid Losses and Loss Adjustment Expense Reserves - P&C - Auto Liability - Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands	Dec. 31, 2020 USD ($) claim	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)
2019
Claims Development
Total (A)	$ 28,871
2020
Claims Development
Total (A)	2,447,451
Property and Casualty | 2019
Claims Development
Total (A)	44,333
Property and Casualty | 2020
Claims Development
Total (A)	2,020,278
Property and Casualty | Property and Casualty - Auto Liability
Claims Development
Total (A)	8,595,205
Property and Casualty | Property and Casualty - Auto Liability | 2011
Claims Development
Total (A)	497,712	$ 497,424	$ 496,408	$ 497,324	$ 497,109	$ 493,873	$ 494,922	$ 489,010	$ 485,762	$ 490,230
Total of IBNR Plus Expected Development on Reported Claims	$ 522
Cumulative Number of Reported Claims | claim	238,319,000
Property and Casualty | Property and Casualty - Auto Liability | 2012
Claims Development
Total (A)	$ 533,045	531,887	529,885	527,531	528,090	527,386	529,140	522,296	$ 511,797
Total of IBNR Plus Expected Development on Reported Claims	$ 281
Cumulative Number of Reported Claims | claim	249,890,000
Property and Casualty | Property and Casualty - Auto Liability | 2013
Claims Development
Total (A)	$ 575,264	575,521	572,538	567,410	563,834	556,290	556,262	$ 544,833
Total of IBNR Plus Expected Development on Reported Claims	$ 287
Cumulative Number of Reported Claims | claim	250,134,000
Property and Casualty | Property and Casualty - Auto Liability | 2014
Claims Development
Total (A)	$ 786,619	783,869	779,992	766,640	760,566	759,577	$ 740,531
Total of IBNR Plus Expected Development on Reported Claims	$ 572
Cumulative Number of Reported Claims | claim	270,161,000
Property and Casualty | Property and Casualty - Auto Liability | 2015
Claims Development
Total (A)	$ 901,823	892,244	872,064	849,051	838,040	$ 820,213
Total of IBNR Plus Expected Development on Reported Claims	$ 3,434
Cumulative Number of Reported Claims | claim	291,921,000
Property and Casualty | Property and Casualty - Auto Liability | 2016
Claims Development
Total (A)	$ 1,017,124	1,005,184	976,749	940,849	$ 932,350
Total of IBNR Plus Expected Development on Reported Claims	$ 13,710
Cumulative Number of Reported Claims | claim	302,083,000
Property and Casualty | Property and Casualty - Auto Liability | 2017
Claims Development
Total (A)	$ 968,645	941,837	912,370	$ 929,211
Total of IBNR Plus Expected Development on Reported Claims	$ 16,952
Cumulative Number of Reported Claims | claim	296,226,000
Property and Casualty | Property and Casualty - Auto Liability | 2018
Claims Development
Total (A)	$ 1,054,906	1,033,488	$ 1,047,041
Total of IBNR Plus Expected Development on Reported Claims	$ 79,287
Cumulative Number of Reported Claims | claim	309,025,000
Property and Casualty | Property and Casualty - Auto Liability | 2019
Claims Development
Total (A)	$ 1,153,160	$ 1,162,750
Total of IBNR Plus Expected Development on Reported Claims	$ 169,765
Cumulative Number of Reported Claims | claim	406,201,000
Property and Casualty | Property and Casualty - Auto Liability | 2020
Claims Development
Total (A)	$ 1,106,907
Total of IBNR Plus Expected Development on Reported Claims	$ 455,534
Cumulative Number of Reported Claims | claim	293,834,000

XML

Unpaid Losses and Loss Adjustment Expense Reserves - P&C - Auto Liability - Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Claims Development
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	$ 1,741,201
Property and Casualty | Property and Casualty - Auto Liability
Claims Development
Total (B)	7,298,054
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)	1,915
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	1,299,066
Property and Casualty | Property and Casualty - Auto Liability | 2011
Claims Development
Total (B)	497,044	$ 496,680	$ 495,833	$ 494,145	$ 489,191	$ 482,861	$ 468,059	$ 442,365	$ 385,749	$ 224,676
Property and Casualty | Property and Casualty - Auto Liability | 2012
Claims Development
Total (B)	532,182	530,570	527,695	523,703	518,079	501,819	470,515	413,018	$ 242,285
Property and Casualty | Property and Casualty - Auto Liability | 2013
Claims Development
Total (B)	573,312	571,643	567,949	559,064	540,497	504,569	440,751	$ 259,665
Property and Casualty | Property and Casualty - Auto Liability | 2014
Claims Development
Total (B)	780,972	773,124	757,933	728,256	694,002	601,980	$ 342,710
Property and Casualty | Property and Casualty - Auto Liability | 2015
Claims Development
Total (B)	884,717	864,226	820,007	761,150	679,461	$ 385,592
Property and Casualty | Property and Casualty - Auto Liability | 2016
Claims Development
Total (B)	978,785	937,997	855,407	737,927	$ 400,052
Property and Casualty | Property and Casualty - Auto Liability | 2017
Claims Development
Total (B)	902,264	832,553	706,151	$ 392,084
Property and Casualty | Property and Casualty - Auto Liability | 2018
Claims Development
Total (B)	889,127	777,888	$ 429,231
Property and Casualty | Property and Casualty - Auto Liability | 2019
Claims Development
Total (B)	833,977	$ 470,341
Property and Casualty | Property and Casualty - Auto Liability | 2020
Claims Development
Total (B)	$ 425,674

XML

Unpaid Losses and Loss Adjustment Expense Reserves - P&C - Auto Physical Damage - Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands	Dec. 31, 2020 USD ($) claim	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)
2019
Claims Development
Total (A)	$ 28,871
2020
Claims Development
Total (A)	2,447,451
Property and Casualty | 2019
Claims Development
Total (A)	44,333
Property and Casualty | 2020
Claims Development
Total (A)	2,020,278
Property and Casualty | Property and Casualty - Auto Physical Damage
Claims Development
Total (A)	4,792,107
Property and Casualty | Property and Casualty - Auto Physical Damage | 2011
Claims Development
Total (A)	308,142	$ 308,132	$ 308,249	$ 308,536	$ 308,512	$ 308,760	$ 308,486	$ 308,298	$ 308,729	$ 315,273
Total of IBNR Plus Expected Development on Reported Claims	$ (2)
Cumulative Number of Reported Claims | claim	298,034,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2012
Claims Development
Total (A)	$ 294,697	294,710	295,026	295,970	296,050	296,257	295,984	298,208	$ 308,056
Total of IBNR Plus Expected Development on Reported Claims	$ (10)
Cumulative Number of Reported Claims | claim	292,486,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2013
Claims Development
Total (A)	$ 327,503	327,506	328,010	328,262	328,284	328,748	329,049	$ 335,454
Total of IBNR Plus Expected Development on Reported Claims	$ (26)
Cumulative Number of Reported Claims | claim	285,750,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2014
Claims Development
Total (A)	$ 486,146	486,156	486,373	486,383	486,206	487,302	$ 496,227
Total of IBNR Plus Expected Development on Reported Claims	$ 16
Cumulative Number of Reported Claims | claim	311,603,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2015
Claims Development
Total (A)	$ 544,677	544,684	544,510	544,769	544,097	$ 541,008
Total of IBNR Plus Expected Development on Reported Claims	$ 4
Cumulative Number of Reported Claims | claim	329,111,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2016
Claims Development
Total (A)	$ 620,692	620,546	621,717	622,456	$ 626,643
Total of IBNR Plus Expected Development on Reported Claims	$ (414)
Cumulative Number of Reported Claims | claim	337,873,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2017
Claims Development
Total (A)	$ 566,641	567,411	570,699	$ 600,813
Total of IBNR Plus Expected Development on Reported Claims	$ 370
Cumulative Number of Reported Claims | claim	385,080,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2018
Claims Development
Total (A)	$ 530,023	526,092	$ 548,063
Total of IBNR Plus Expected Development on Reported Claims	$ (472)
Cumulative Number of Reported Claims | claim	360,454,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2019
Claims Development
Total (A)	$ 552,692	$ 577,970
Total of IBNR Plus Expected Development on Reported Claims	$ 2,482
Cumulative Number of Reported Claims | claim	370,057,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2020
Claims Development
Total (A)	$ 560,894
Total of IBNR Plus Expected Development on Reported Claims	$ 18,588
Cumulative Number of Reported Claims | claim	351,548,000

XML

Unpaid Losses and Loss Adjustment Expense Reserves - P&C - Auto Physical Damage - Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Claims Development
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	$ 1,741,201
Property and Casualty | Property and Casualty - Auto Physical Damage
Claims Development
Total (B)	4,745,147
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)	(15)
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	46,945
Property and Casualty | Property and Casualty - Auto Physical Damage | 2011
Claims Development
Total (B)	308,145	$ 308,131	$ 308,266	$ 308,557	$ 308,571	$ 308,578	$ 308,608	$ 308,634	$ 308,824	$ 283,501
Property and Casualty | Property and Casualty - Auto Physical Damage | 2012
Claims Development
Total (B)	294,699	294,702	294,975	295,995	296,029	295,975	295,978	298,381	$ 268,989
Property and Casualty | Property and Casualty - Auto Physical Damage | 2013
Claims Development
Total (B)	327,522	327,510	327,976	328,280	328,299	328,456	328,832	$ 291,064
Property and Casualty | Property and Casualty - Auto Physical Damage | 2014
Claims Development
Total (B)	486,080	486,108	486,251	486,309	486,364	487,531	$ 430,998
Property and Casualty | Property and Casualty - Auto Physical Damage | 2015
Claims Development
Total (B)	544,652	544,699	544,485	544,707	544,754	$ 478,268
Property and Casualty | Property and Casualty - Auto Physical Damage | 2016
Claims Development
Total (B)	620,963	621,181	621,529	622,930	$ 542,970
Property and Casualty | Property and Casualty - Auto Physical Damage | 2017
Claims Development
Total (B)	566,181	566,918	568,639	$ 533,907
Property and Casualty | Property and Casualty - Auto Physical Damage | 2018
Claims Development
Total (B)	530,330	532,083	$ 483,149
Property and Casualty | Property and Casualty - Auto Physical Damage | 2019
Claims Development
Total (B)	549,540	$ 512,072
Property and Casualty | Property and Casualty - Auto Physical Damage | 2020
Claims Development
Total (B)	$ 517,035

XML

Unpaid Losses and Loss Adjustment Expense Reserves - P&C - Homeowners and other - Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands	Dec. 31, 2020 USD ($) claim	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)
2019
Claims Development
Total (A)	$ 28,871
2020
Claims Development
Total (A)	2,447,451
Property and Casualty | 2019
Claims Development
Total (A)	44,333
Property and Casualty | 2020
Claims Development
Total (A)	2,020,278
Property and Casualty | Property and Casualty - Homeowners and other
Claims Development
Total (A)	3,568,139
Property and Casualty | Property and Casualty - Homeowners and other | 2011
Claims Development
Total (A)	495,156	$ 495,148	$ 495,170	$ 494,825	$ 495,246	$ 497,244	$ 498,184	$ 498,050	$ 499,170	$ 506,352
Total of IBNR Plus Expected Development on Reported Claims	$ 1
Cumulative Number of Reported Claims | claim	107,871,000
Property and Casualty | Property and Casualty - Homeowners and other | 2012
Claims Development
Total (A)	$ 475,990	475,792	476,166	474,649	476,538	477,577	478,880	480,353	$ 485,454
Total of IBNR Plus Expected Development on Reported Claims	$ 7
Cumulative Number of Reported Claims | claim	112,061,000
Property and Casualty | Property and Casualty - Homeowners and other | 2013
Claims Development
Total (A)	$ 297,159	296,760	296,756	296,907	296,618	299,561	300,868	$ 306,761
Total of IBNR Plus Expected Development on Reported Claims	$ 66
Cumulative Number of Reported Claims | claim	75,918,000
Property and Casualty | Property and Casualty - Homeowners and other | 2014
Claims Development
Total (A)	$ 304,934	304,350	304,237	304,496	303,925	306,471	$ 318,488
Total of IBNR Plus Expected Development on Reported Claims	$ 279
Cumulative Number of Reported Claims | claim	73,498,000
Property and Casualty | Property and Casualty - Homeowners and other | 2015
Claims Development
Total (A)	$ 351,590	351,305	353,688	351,747	349,559	$ 357,023
Total of IBNR Plus Expected Development on Reported Claims	$ 1,152
Cumulative Number of Reported Claims | claim	69,920,000
Property and Casualty | Property and Casualty - Homeowners and other | 2016
Claims Development
Total (A)	$ 344,763	343,525	340,711	341,762	$ 350,737
Total of IBNR Plus Expected Development on Reported Claims	$ 1,481
Cumulative Number of Reported Claims | claim	61,047,000
Property and Casualty | Property and Casualty - Homeowners and other | 2017
Claims Development
Total (A)	$ 362,176	370,068	365,092	$ 402,798
Total of IBNR Plus Expected Development on Reported Claims	$ 2,096
Cumulative Number of Reported Claims | claim	59,284,000
Property and Casualty | Property and Casualty - Homeowners and other | 2018
Claims Development
Total (A)	$ 327,525	328,721	$ 327,462
Total of IBNR Plus Expected Development on Reported Claims	$ 4,192
Cumulative Number of Reported Claims | claim	73,117,000
Property and Casualty | Property and Casualty - Homeowners and other | 2019
Claims Development
Total (A)	$ 256,369	$ 247,760
Total of IBNR Plus Expected Development on Reported Claims	$ 16,533
Cumulative Number of Reported Claims | claim	66,710,000
Property and Casualty | Property and Casualty - Homeowners and other | 2020
Claims Development
Total (A)	$ 352,477
Total of IBNR Plus Expected Development on Reported Claims	$ 52,664
Cumulative Number of Reported Claims | claim	48,924,000

XML

Unpaid Losses and Loss Adjustment Expense Reserves - P&C - Homeowners and other - Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Claims Development
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	$ 1,741,201
Property and Casualty | Property and Casualty - Homeowners and other
Claims Development
Total (B)	3,405,462
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)	930
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	163,607
Property and Casualty | Property and Casualty - Homeowners and other | 2011
Claims Development
Total (B)	494,950	$ 494,922	$ 494,904	$ 494,525	$ 494,198	$ 493,408	$ 489,778	$ 485,054	$ 457,480	$ 314,139
Property and Casualty | Property and Casualty - Homeowners and other | 2012
Claims Development
Total (B)	475,964	475,762	475,765	473,781	473,190	471,084	466,266	452,589	$ 300,271
Property and Casualty | Property and Casualty - Homeowners and other | 2013
Claims Development
Total (B)	296,567	296,442	296,383	295,332	293,101	289,302	279,743	$ 219,937
Property and Casualty | Property and Casualty - Homeowners and other | 2014
Claims Development
Total (B)	303,660	303,100	301,742	297,640	289,456	278,255	$ 198,781
Property and Casualty | Property and Casualty - Homeowners and other | 2015
Claims Development
Total (B)	346,554	345,257	342,156	336,921	319,284	$ 233,264
Property and Casualty | Property and Casualty - Homeowners and other | 2016
Claims Development
Total (B)	341,037	337,889	331,102	320,564	$ 227,650
Property and Casualty | Property and Casualty - Homeowners and other | 2017
Claims Development
Total (B)	355,265	349,600	338,065	$ 258,234
Property and Casualty | Property and Casualty - Homeowners and other | 2018
Claims Development
Total (B)	315,302	298,212	$ 227,908
Property and Casualty | Property and Casualty - Homeowners and other | 2019
Claims Development
Total (B)	226,895	$ 172,462
Property and Casualty | Property and Casualty - Homeowners and other | 2020
Claims Development
Total (B)	$ 249,268

XML

Unpaid Losses and Loss Adjustment Expense Reserves - A&H - Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands	Dec. 31, 2020 USD ($) claim	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)
2019
Claims Development
Total (A)	$ 28,871
2020
Claims Development
Total (A)	2,447,451
Accident and Health | 2019
Claims Development
Total (A)	(19,624)
Accident and Health | 2020
Claims Development
Total (A)	296,453
Accident and Health | Accident and Health
Claims Development
Total (A)	1,391,929
Accident and Health | Accident and Health | 2011
Claims Development
Total (A)	4,481	$ 4,481	$ 4,481	$ 4,481	$ 4,481	$ 4,481	$ 4,481	$ 4,481	$ 4,483	$ 4,804
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	8,139,000
Accident and Health | Accident and Health | 2012
Claims Development
Total (A)	$ 4,110	4,110	4,110	4,110	4,161	4,161	4,161	4,227	$ 4,400
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	7,630,000
Accident and Health | Accident and Health | 2013
Claims Development
Total (A)	$ 26,265	26,274	26,274	26,272	26,361	26,457	28,578	$ 23,253
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	34,173,000
Accident and Health | Accident and Health | 2014
Claims Development
Total (A)	$ 52,028	52,034	52,022	52,026	52,311	52,694	$ 52,245
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	69,716,000
Accident and Health | Accident and Health | 2015
Claims Development
Total (A)	$ 181,678	181,717	181,740	181,536	184,586	$ 176,104
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	242,669,000
Accident and Health | Accident and Health | 2016
Claims Development
Total (A)	$ 201,850	201,722	202,155	200,817	$ 215,097
Total of IBNR Plus Expected Development on Reported Claims	$ 1
Cumulative Number of Reported Claims | claim	320,319,000
Accident and Health | Accident and Health | 2017
Claims Development
Total (A)	$ 182,809	182,865	186,415	$ 211,293
Total of IBNR Plus Expected Development on Reported Claims	$ 135
Cumulative Number of Reported Claims | claim	302,098,000
Accident and Health | Accident and Health | 2018
Claims Development
Total (A)	$ 203,238	205,152	$ 234,558
Total of IBNR Plus Expected Development on Reported Claims	$ 364
Cumulative Number of Reported Claims | claim	269,021,000
Accident and Health | Accident and Health | 2019
Claims Development
Total (A)	$ 239,017	$ 256,745
Total of IBNR Plus Expected Development on Reported Claims	$ 4,726
Cumulative Number of Reported Claims | claim	304,234,000
Accident and Health | Accident and Health | 2020
Claims Development
Total (A)	$ 296,453
Total of IBNR Plus Expected Development on Reported Claims	$ 112,869
Cumulative Number of Reported Claims | claim	262,469,000

XML

Unpaid Losses and Loss Adjustment Expense Reserves - A&H - Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Claims Development
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	$ 1,741,201
Accident and Health | Accident and Health
Claims Development
Total (B)	1,273,836
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)	0
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	118,093
Accident and Health | Accident and Health | 2011
Claims Development
Total (B)	4,481	$ 4,481	$ 4,481	$ 4,481	$ 4,481	$ 4,481	$ 4,481	$ 4,481	$ 4,469	$ 2,528
Accident and Health | Accident and Health | 2012
Claims Development
Total (B)	4,110	4,110	4,110	4,110	4,161	4,110	4,110	4,095	$ 3,330
Accident and Health | Accident and Health | 2013
Claims Development
Total (B)	26,147	26,155	26,155	26,154	26,242	26,327	25,754	$ 15,421
Accident and Health | Accident and Health | 2014
Claims Development
Total (B)	52,147	52,153	52,140	52,147	52,405	52,053	$ 31,765
Accident and Health | Accident and Health | 2015
Claims Development
Total (B)	181,678	181,696	181,719	181,459	178,918	$ 123,576
Accident and Health | Accident and Health | 2016
Claims Development
Total (B)	201,849	201,549	201,720	196,421	$ 125,845
Accident and Health | Accident and Health | 2017
Claims Development
Total (B)	182,674	181,519	178,047	$ 104,809
Accident and Health | Accident and Health | 2018
Claims Development
Total (B)	202,874	201,457	$ 126,269
Accident and Health | Accident and Health | 2019
Claims Development
Total (B)	234,291	$ 158,345
Accident and Health | Accident and Health | 2020
Claims Development
Total (B)	$ 183,585

XML

Unpaid Losses and Loss Adjustment Expense Reserves - Reciprocal Exchanges - Auto Liability - Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands	Dec. 31, 2020 USD ($) claim	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)
2019
Claims Development
Total (A)	$ 28,871
2019 | Reciprocal Exchanges
Claims Development
Total (A)	4,162
2020
Claims Development
Total (A)	2,447,451
2020 | Reciprocal Exchanges
Claims Development
Total (A)	130,720
Property and Casualty | 2019
Claims Development
Total (A)	44,333
Property and Casualty | 2020
Claims Development
Total (A)	2,020,278
Property and Casualty | Property and Casualty - Auto Liability
Claims Development
Total (A)	8,595,205
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges
Claims Development
Total (A)	418,438
Property and Casualty | Property and Casualty - Auto Liability | 2011
Claims Development
Total (A)	497,712	$ 497,424	$ 496,408	$ 497,324	$ 497,109	$ 493,873	$ 494,922	$ 489,010	$ 485,762	$ 490,230
Total of IBNR Plus Expected Development on Reported Claims	$ 522
Cumulative Number of Reported Claims | claim	238,319,000
Property and Casualty | Property and Casualty - Auto Liability | 2011 | Reciprocal Exchanges
Claims Development
Total (A)	$ 50,703	51,247	51,161	50,998	50,898	51,107	48,841	47,459	47,834	$ 47,666
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	5,065,000
Property and Casualty | Property and Casualty - Auto Liability | 2012
Claims Development
Total (A)	$ 533,045	531,887	529,885	527,531	528,090	527,386	529,140	522,296	511,797
Total of IBNR Plus Expected Development on Reported Claims	$ 281
Cumulative Number of Reported Claims | claim	249,890,000
Property and Casualty | Property and Casualty - Auto Liability | 2012 | Reciprocal Exchanges
Claims Development
Total (A)	$ 50,606	50,538	50,303	50,767	50,370	48,665	48,044	47,275	$ 44,834
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	4,999,000
Property and Casualty | Property and Casualty - Auto Liability | 2013
Claims Development
Total (A)	$ 575,264	575,521	572,538	567,410	563,834	556,290	556,262	544,833
Total of IBNR Plus Expected Development on Reported Claims	$ 287
Cumulative Number of Reported Claims | claim	250,134,000
Property and Casualty | Property and Casualty - Auto Liability | 2013 | Reciprocal Exchanges
Claims Development
Total (A)	$ 50,810	50,595	49,854	51,263	50,180	45,479	44,341	$ 43,684
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	5,097,000
Property and Casualty | Property and Casualty - Auto Liability | 2014
Claims Development
Total (A)	$ 786,619	783,869	779,992	766,640	760,566	759,577	740,531
Total of IBNR Plus Expected Development on Reported Claims	$ 572
Cumulative Number of Reported Claims | claim	270,161,000
Property and Casualty | Property and Casualty - Auto Liability | 2014 | Reciprocal Exchanges
Claims Development
Total (A)	$ 50,055	49,369	49,168	48,246	45,930	40,850	$ 38,656
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	4,873,000
Property and Casualty | Property and Casualty - Auto Liability | 2015
Claims Development
Total (A)	$ 901,823	892,244	872,064	849,051	838,040	820,213
Total of IBNR Plus Expected Development on Reported Claims	$ 3,434
Cumulative Number of Reported Claims | claim	291,921,000
Property and Casualty | Property and Casualty - Auto Liability | 2015 | Reciprocal Exchanges
Claims Development
Total (A)	$ 34,962	34,268	34,615	34,390	33,409	$ 35,573
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	4,335,000
Property and Casualty | Property and Casualty - Auto Liability | 2016
Claims Development
Total (A)	$ 1,017,124	1,005,184	976,749	940,849	932,350
Total of IBNR Plus Expected Development on Reported Claims	$ 13,710
Cumulative Number of Reported Claims | claim	302,083,000
Property and Casualty | Property and Casualty - Auto Liability | 2016 | Reciprocal Exchanges
Claims Development
Total (A)	$ 24,657	24,310	26,109	24,460	$ 24,619
Total of IBNR Plus Expected Development on Reported Claims	$ 356
Cumulative Number of Reported Claims | claim	4,005,000
Property and Casualty | Property and Casualty - Auto Liability | 2017
Claims Development
Total (A)	$ 968,645	941,837	912,370	929,211
Total of IBNR Plus Expected Development on Reported Claims	$ 16,952
Cumulative Number of Reported Claims | claim	296,226,000
Property and Casualty | Property and Casualty - Auto Liability | 2017 | Reciprocal Exchanges
Claims Development
Total (A)	$ 29,806	28,804	28,762	$ 26,214
Total of IBNR Plus Expected Development on Reported Claims	$ 1,244
Cumulative Number of Reported Claims | claim	4,949,000
Property and Casualty | Property and Casualty - Auto Liability | 2018
Claims Development
Total (A)	$ 1,054,906	1,033,488	1,047,041
Total of IBNR Plus Expected Development on Reported Claims	$ 79,287
Cumulative Number of Reported Claims | claim	309,025,000
Property and Casualty | Property and Casualty - Auto Liability | 2018 | Reciprocal Exchanges
Claims Development
Total (A)	$ 35,870	33,891	$ 32,339
Total of IBNR Plus Expected Development on Reported Claims	$ 3,540
Cumulative Number of Reported Claims | claim	6,127,000
Property and Casualty | Property and Casualty - Auto Liability | 2019
Claims Development
Total (A)	$ 1,153,160	1,162,750
Total of IBNR Plus Expected Development on Reported Claims	$ 169,765
Cumulative Number of Reported Claims | claim	406,201,000
Property and Casualty | Property and Casualty - Auto Liability | 2019 | Reciprocal Exchanges
Claims Development
Total (A)	$ 50,212	$ 49,757
Total of IBNR Plus Expected Development on Reported Claims	$ 11,727
Cumulative Number of Reported Claims | claim	6,262,000
Property and Casualty | Property and Casualty - Auto Liability | 2020
Claims Development
Total (A)	$ 1,106,907
Total of IBNR Plus Expected Development on Reported Claims	$ 455,534
Cumulative Number of Reported Claims | claim	293,834,000
Property and Casualty | Property and Casualty - Auto Liability | 2020 | Reciprocal Exchanges
Claims Development
Total (A)	$ 40,757
Total of IBNR Plus Expected Development on Reported Claims	$ 18,459
Cumulative Number of Reported Claims | claim	3,383,000

XML

Unpaid Losses and Loss Adjustment Expense Reserves - Reciprocal Exchanges - Auto Liability - Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Claims Development
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	$ 1,741,201
Property and Casualty | Property and Casualty - Auto Liability
Claims Development
Total (B)	7,298,054
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)	1,915
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	1,299,066
Property and Casualty | Property and Casualty - Auto Liability | 2011
Claims Development
Total (B)	497,044	$ 496,680	$ 495,833	$ 494,145	$ 489,191	$ 482,861	$ 468,059	$ 442,365	$ 385,749	$ 224,676
Property and Casualty | Property and Casualty - Auto Liability | 2012
Claims Development
Total (B)	532,182	530,570	527,695	523,703	518,079	501,819	470,515	413,018	242,285
Property and Casualty | Property and Casualty - Auto Liability | 2013
Claims Development
Total (B)	573,312	571,643	567,949	559,064	540,497	504,569	440,751	259,665
Property and Casualty | Property and Casualty - Auto Liability | 2014
Claims Development
Total (B)	780,972	773,124	757,933	728,256	694,002	601,980	342,710
Property and Casualty | Property and Casualty - Auto Liability | 2015
Claims Development
Total (B)	884,717	864,226	820,007	761,150	679,461	385,592
Property and Casualty | Property and Casualty - Auto Liability | 2016
Claims Development
Total (B)	978,785	937,997	855,407	737,927	400,052
Property and Casualty | Property and Casualty - Auto Liability | 2017
Claims Development
Total (B)	902,264	832,553	706,151	392,084
Property and Casualty | Property and Casualty - Auto Liability | 2018
Claims Development
Total (B)	889,127	777,888	429,231
Property and Casualty | Property and Casualty - Auto Liability | 2019
Claims Development
Total (B)	833,977	470,341
Property and Casualty | Property and Casualty - Auto Liability | 2020
Claims Development
Total (B)	425,674
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges
Claims Development
Total (B)	347,537
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)	27
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	70,928
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2011
Claims Development
Total (B)	50,676	51,121	50,979	50,481	49,570	46,559	41,931	35,911	26,603	$ 15,857
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2012
Claims Development
Total (B)	50,504	50,090	49,836	48,990	46,358	42,768	37,241	29,286	$ 13,568
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2013
Claims Development
Total (B)	50,432	49,605	48,449	47,449	41,787	35,105	29,218	$ 14,683
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2014
Claims Development
Total (B)	49,602	48,389	46,001	39,328	32,382	26,070	$ 13,925
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2015
Claims Development
Total (B)	33,223	31,587	29,538	24,614	19,501	$ 11,910
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2016
Claims Development
Total (B)	22,500	20,567	16,994	13,478	$ 7,516
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2017
Claims Development
Total (B)	23,838	19,529	17,136	$ 9,111
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2018
Claims Development
Total (B)	24,985	19,471	$ 10,755
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2019
Claims Development
Total (B)	28,210	$ 15,504
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2020
Claims Development
Total (B)	$ 13,567

XML

Unpaid Losses and Loss Adjustment Expense Reserves - Reciprocal Exchanges - Auto Physical Damage - Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands	Dec. 31, 2020 USD ($) claim	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)
2019
Claims Development
Total (A)	$ 28,871
2020
Claims Development
Total (A)	2,447,451
Reciprocal Exchanges | 2019
Claims Development
Total (A)	4,162
Reciprocal Exchanges | 2020
Claims Development
Total (A)	130,720
Property and Casualty | 2019
Claims Development
Total (A)	44,333
Property and Casualty | 2020
Claims Development
Total (A)	2,020,278
Property and Casualty | Property and Casualty - Auto Physical Damage
Claims Development
Total (A)	4,792,107
Property and Casualty | Property and Casualty - Auto Physical Damage | 2011
Claims Development
Total (A)	308,142	$ 308,132	$ 308,249	$ 308,536	$ 308,512	$ 308,760	$ 308,486	$ 308,298	$ 308,729	$ 315,273
Total of IBNR Plus Expected Development on Reported Claims	$ (2)
Cumulative Number of Reported Claims | claim	298,034,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2012
Claims Development
Total (A)	$ 294,697	294,710	295,026	295,970	296,050	296,257	295,984	298,208	308,056
Total of IBNR Plus Expected Development on Reported Claims	$ (10)
Cumulative Number of Reported Claims | claim	292,486,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2013
Claims Development
Total (A)	$ 327,503	327,506	328,010	328,262	328,284	328,748	329,049	335,454
Total of IBNR Plus Expected Development on Reported Claims	$ (26)
Cumulative Number of Reported Claims | claim	285,750,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2014
Claims Development
Total (A)	$ 486,146	486,156	486,373	486,383	486,206	487,302	496,227
Total of IBNR Plus Expected Development on Reported Claims	$ 16
Cumulative Number of Reported Claims | claim	311,603,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2015
Claims Development
Total (A)	$ 544,677	544,684	544,510	544,769	544,097	541,008
Total of IBNR Plus Expected Development on Reported Claims	$ 4
Cumulative Number of Reported Claims | claim	329,111,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2016
Claims Development
Total (A)	$ 620,692	620,546	621,717	622,456	626,643
Total of IBNR Plus Expected Development on Reported Claims	$ (414)
Cumulative Number of Reported Claims | claim	337,873,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2017
Claims Development
Total (A)	$ 566,641	567,411	570,699	600,813
Total of IBNR Plus Expected Development on Reported Claims	$ 370
Cumulative Number of Reported Claims | claim	385,080,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2018
Claims Development
Total (A)	$ 530,023	526,092	548,063
Total of IBNR Plus Expected Development on Reported Claims	$ (472)
Cumulative Number of Reported Claims | claim	360,454,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2019
Claims Development
Total (A)	$ 552,692	577,970
Total of IBNR Plus Expected Development on Reported Claims	$ 2,482
Cumulative Number of Reported Claims | claim	370,057,000
Property and Casualty | Property and Casualty - Auto Physical Damage | 2020
Claims Development
Total (A)	$ 560,894
Total of IBNR Plus Expected Development on Reported Claims	$ 18,588
Cumulative Number of Reported Claims | claim	351,548,000
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges
Claims Development
Total (A)	$ 218,227
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2011
Claims Development
Total (A)	26,027	26,028	26,028	26,023	26,029	26,037	26,060	26,022	26,055	$ 26,936
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	12,041,000
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2012
Claims Development
Total (A)	$ 25,820	25,842	25,845	25,841	25,842	25,914	26,189	26,459	$ 25,752
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	11,301,000
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2013
Claims Development
Total (A)	$ 24,704	24,704	24,704	24,703	24,709	25,292	25,214	$ 23,375
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	11,066,000
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2014
Claims Development
Total (A)	$ 26,074	26,074	25,882	25,588	25,806	27,424	$ 29,240
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	11,526,000
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2015
Claims Development
Total (A)	$ 18,890	18,842	18,789	18,673	18,592	$ 21,247
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	10,281,000
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2016
Claims Development
Total (A)	$ 13,197	13,213	12,985	12,921	$ 12,270
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	8,740,000
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2017
Claims Development
Total (A)	$ 15,490	15,612	15,410	$ 15,301
Total of IBNR Plus Expected Development on Reported Claims	$ (5)
Cumulative Number of Reported Claims | claim	10,682,000
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2018
Claims Development
Total (A)	$ 19,200	19,272	$ 19,146
Total of IBNR Plus Expected Development on Reported Claims	$ 108
Cumulative Number of Reported Claims | claim	13,615,000
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2019
Claims Development
Total (A)	$ 27,585	$ 27,212
Total of IBNR Plus Expected Development on Reported Claims	$ (51)
Cumulative Number of Reported Claims | claim	14,549,000
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2020
Claims Development
Total (A)	$ 21,240
Total of IBNR Plus Expected Development on Reported Claims	$ (810)
Cumulative Number of Reported Claims | claim	10,027,000

XML

Unpaid Losses and Loss Adjustment Expense Reserves - Reciprocal Exchanges - Auto Physical Damage - Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Claims Development
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	$ 1,741,201
Property and Casualty | Property and Casualty - Auto Physical Damage
Claims Development
Total (B)	4,745,147
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)	(15)
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	46,945
Property and Casualty | Property and Casualty - Auto Physical Damage | 2011
Claims Development
Total (B)	308,145	$ 308,131	$ 308,266	$ 308,557	$ 308,571	$ 308,578	$ 308,608	$ 308,634	$ 308,824	$ 283,501
Property and Casualty | Property and Casualty - Auto Physical Damage | 2012
Claims Development
Total (B)	294,699	294,702	294,975	295,995	296,029	295,975	295,978	298,381	268,989
Property and Casualty | Property and Casualty - Auto Physical Damage | 2013
Claims Development
Total (B)	327,522	327,510	327,976	328,280	328,299	328,456	328,832	291,064
Property and Casualty | Property and Casualty - Auto Physical Damage | 2014
Claims Development
Total (B)	486,080	486,108	486,251	486,309	486,364	487,531	430,998
Property and Casualty | Property and Casualty - Auto Physical Damage | 2015
Claims Development
Total (B)	544,652	544,699	544,485	544,707	544,754	478,268
Property and Casualty | Property and Casualty - Auto Physical Damage | 2016
Claims Development
Total (B)	620,963	621,181	621,529	622,930	542,970
Property and Casualty | Property and Casualty - Auto Physical Damage | 2017
Claims Development
Total (B)	566,181	566,918	568,639	533,907
Property and Casualty | Property and Casualty - Auto Physical Damage | 2018
Claims Development
Total (B)	530,330	532,083	483,149
Property and Casualty | Property and Casualty - Auto Physical Damage | 2019
Claims Development
Total (B)	549,540	512,072
Property and Casualty | Property and Casualty - Auto Physical Damage | 2020
Claims Development
Total (B)	517,035
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges
Claims Development
Total (B)	218,316
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)	0
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	(89)
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2011
Claims Development
Total (B)	26,027	26,028	26,028	26,027	26,033	26,037	26,056	26,106	26,269	$ 28,274
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2012
Claims Development
Total (B)	25,817	25,842	25,845	25,850	25,854	25,914	26,172	26,651	$ 23,760
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2013
Claims Development
Total (B)	24,704	24,704	24,704	24,716	24,725	24,549	25,088	$ 22,651
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2014
Claims Development
Total (B)	26,071	25,946	25,685	25,427	25,772	26,165	$ 24,528
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2015
Claims Development
Total (B)	18,730	18,719	18,748	18,750	18,797	$ 19,080
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2016
Claims Development
Total (B)	13,114	13,137	13,080	13,147	$ 12,579
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2017
Claims Development
Total (B)	15,495	15,500	16,141	$ 15,438
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2018
Claims Development
Total (B)	19,093	19,246	$ 18,925
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2019
Claims Development
Total (B)	27,632	$ 27,974
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2020
Claims Development
Total (B)	$ 21,633

XML

Unpaid Losses and Loss Adjustment Expense Reserves - Reciprocal Exchanges - Homeowners and other - Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands	Dec. 31, 2020 USD ($) claim	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)
2019
Claims Development
Total (A)	$ 28,871
2020
Claims Development
Total (A)	2,447,451
Reciprocal Exchanges | 2019
Claims Development
Total (A)	4,162
Reciprocal Exchanges | 2020
Claims Development
Total (A)	130,720
Property and Casualty | 2019
Claims Development
Total (A)	44,333
Property and Casualty | 2020
Claims Development
Total (A)	2,020,278
Property and Casualty | Property and Casualty - Homeowners and other
Claims Development
Total (A)	3,568,139
Property and Casualty | Property and Casualty - Homeowners and other | 2011
Claims Development
Total (A)	495,156	$ 495,148	$ 495,170	$ 494,825	$ 495,246	$ 497,244	$ 498,184	$ 498,050	$ 499,170	$ 506,352
Total of IBNR Plus Expected Development on Reported Claims	$ 1
Cumulative Number of Reported Claims | claim	107,871,000
Property and Casualty | Property and Casualty - Homeowners and other | 2012
Claims Development
Total (A)	$ 475,990	475,792	476,166	474,649	476,538	477,577	478,880	480,353	485,454
Total of IBNR Plus Expected Development on Reported Claims	$ 7
Cumulative Number of Reported Claims | claim	112,061,000
Property and Casualty | Property and Casualty - Homeowners and other | 2013
Claims Development
Total (A)	$ 297,159	296,760	296,756	296,907	296,618	299,561	300,868	306,761
Total of IBNR Plus Expected Development on Reported Claims	$ 66
Cumulative Number of Reported Claims | claim	75,918,000
Property and Casualty | Property and Casualty - Homeowners and other | 2014
Claims Development
Total (A)	$ 304,934	304,350	304,237	304,496	303,925	306,471	318,488
Total of IBNR Plus Expected Development on Reported Claims	$ 279
Cumulative Number of Reported Claims | claim	73,498,000
Property and Casualty | Property and Casualty - Homeowners and other | 2015
Claims Development
Total (A)	$ 351,590	351,305	353,688	351,747	349,559	357,023
Total of IBNR Plus Expected Development on Reported Claims	$ 1,152
Cumulative Number of Reported Claims | claim	69,920,000
Property and Casualty | Property and Casualty - Homeowners and other | 2016
Claims Development
Total (A)	$ 344,763	343,525	340,711	341,762	350,737
Total of IBNR Plus Expected Development on Reported Claims	$ 1,481
Cumulative Number of Reported Claims | claim	61,047,000
Property and Casualty | Property and Casualty - Homeowners and other | 2017
Claims Development
Total (A)	$ 362,176	370,068	365,092	402,798
Total of IBNR Plus Expected Development on Reported Claims	$ 2,096
Cumulative Number of Reported Claims | claim	59,284,000
Property and Casualty | Property and Casualty - Homeowners and other | 2018
Claims Development
Total (A)	$ 327,525	328,721	327,462
Total of IBNR Plus Expected Development on Reported Claims	$ 4,192
Cumulative Number of Reported Claims | claim	73,117,000
Property and Casualty | Property and Casualty - Homeowners and other | 2019
Claims Development
Total (A)	$ 256,369	247,760
Total of IBNR Plus Expected Development on Reported Claims	$ 16,533
Cumulative Number of Reported Claims | claim	66,710,000
Property and Casualty | Property and Casualty - Homeowners and other | 2020
Claims Development
Total (A)	$ 352,477
Total of IBNR Plus Expected Development on Reported Claims	$ 52,664
Cumulative Number of Reported Claims | claim	48,924,000
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges
Claims Development
Total (A)	$ 418,819
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2011
Claims Development
Total (A)	28,144	28,095	28,075	28,002	27,950	27,954	28,209	28,511	28,869	$ 38,470
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	6,652,000
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2012
Claims Development
Total (A)	$ 20,283	20,301	20,251	20,876	20,403	19,971	21,184	20,625	$ 25,289
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	8,427,000
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2013
Claims Development
Total (A)	$ 22,649	23,109	20,367	20,615	20,309	20,132	21,232	$ 22,638
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	3,165,000
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2014
Claims Development
Total (A)	$ 27,212	27,231	27,141	26,614	25,625	24,846	$ 27,706
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	4,232,000
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2015
Claims Development
Total (A)	$ 22,714	21,881	22,007	21,527	21,031	$ 30,081
Total of IBNR Plus Expected Development on Reported Claims	$ 0
Cumulative Number of Reported Claims | claim	5,455,000
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2016
Claims Development
Total (A)	$ 34,655	34,501	34,851	35,274	$ 36,838
Total of IBNR Plus Expected Development on Reported Claims	$ 78
Cumulative Number of Reported Claims | claim	4,799,000
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2017
Claims Development
Total (A)	$ 51,477	51,852	50,871	$ 48,222
Total of IBNR Plus Expected Development on Reported Claims	$ 648
Cumulative Number of Reported Claims | claim	8,830,000
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2018
Claims Development
Total (A)	$ 77,582	78,166	$ 76,925
Total of IBNR Plus Expected Development on Reported Claims	$ 1,471
Cumulative Number of Reported Claims | claim	12,998,000
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2019
Claims Development
Total (A)	$ 65,380	$ 65,888
Total of IBNR Plus Expected Development on Reported Claims	$ 3,312
Cumulative Number of Reported Claims | claim	12,238,000
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2020
Claims Development
Total (A)	$ 68,723
Total of IBNR Plus Expected Development on Reported Claims	$ 10,427
Cumulative Number of Reported Claims | claim	9,349,000

XML

Unpaid Losses and Loss Adjustment Expense Reserves - Reciprocal Exchanges - Homeowners and other - Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Claims Development
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	$ 1,741,201
Property and Casualty | Property and Casualty - Homeowners and other
Claims Development
Total (B)	3,405,462
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)	930
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	163,607
Property and Casualty | Property and Casualty - Homeowners and other | 2011
Claims Development
Total (B)	494,950	$ 494,922	$ 494,904	$ 494,525	$ 494,198	$ 493,408	$ 489,778	$ 485,054	$ 457,480	$ 314,139
Property and Casualty | Property and Casualty - Homeowners and other | 2012
Claims Development
Total (B)	475,964	475,762	475,765	473,781	473,190	471,084	466,266	452,589	300,271
Property and Casualty | Property and Casualty - Homeowners and other | 2013
Claims Development
Total (B)	296,567	296,442	296,383	295,332	293,101	289,302	279,743	219,937
Property and Casualty | Property and Casualty - Homeowners and other | 2014
Claims Development
Total (B)	303,660	303,100	301,742	297,640	289,456	278,255	198,781
Property and Casualty | Property and Casualty - Homeowners and other | 2015
Claims Development
Total (B)	346,554	345,257	342,156	336,921	319,284	233,264
Property and Casualty | Property and Casualty - Homeowners and other | 2016
Claims Development
Total (B)	341,037	337,889	331,102	320,564	227,650
Property and Casualty | Property and Casualty - Homeowners and other | 2017
Claims Development
Total (B)	355,265	349,600	338,065	258,234
Property and Casualty | Property and Casualty - Homeowners and other | 2018
Claims Development
Total (B)	315,302	298,212	227,908
Property and Casualty | Property and Casualty - Homeowners and other | 2019
Claims Development
Total (B)	226,895	172,462
Property and Casualty | Property and Casualty - Homeowners and other | 2020
Claims Development
Total (B)	249,268
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges
Claims Development
Total (B)	378,826
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C)	2,658
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C)	42,651
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2011
Claims Development
Total (B)	27,825	27,803	27,758	27,692	27,656	27,661	26,700	25,799	24,997	$ 21,474
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2012
Claims Development
Total (B)	20,238	20,256	20,121	20,668	19,961	19,847	19,367	18,021	$ 11,087
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2013
Claims Development
Total (B)	22,731	20,232	19,626	19,653	19,104	18,107	17,435	$ 11,277
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2014
Claims Development
Total (B)	27,115	27,003	26,170	25,230	23,820	22,834	$ 15,344
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2015
Claims Development
Total (B)	21,994	20,733	20,339	19,834	18,518	$ 12,979
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2016
Claims Development
Total (B)	33,399	32,933	31,632	30,615	$ 20,978
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2017
Claims Development
Total (B)	49,506	47,517	46,003	$ 33,166
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2018
Claims Development
Total (B)	72,859	69,672	$ 55,519
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2019
Claims Development
Total (B)	58,788	$ 45,432
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2020
Claims Development
Total (B)	$ 44,371

XML

Unpaid Losses and Loss Adjustment Expense Reserves - Historical Claims (Details)	Dec. 31, 2020
Property and Casualty | Property and Casualty - Auto Liability
Short-duration Insurance Contracts, Historical Claims Duration
Average annual percentage payout, year 1	41.60%
Average annual percentage payout, year 2	32.90%
Average annual percentage payout, year 3	11.50%
Average annual percentage payout, year 4	6.80%
Average annual percentage payout, year 5	3.70%
Average annual percentage payout, year 6	1.80%
Average annual percentage payout, year 7	0.90%
Average annual percentage payout, year 8	0.40%
Average annual percentage payout, year 9	0.20%
Average annual percentage payout, year 10	0.20%
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges
Short-duration Insurance Contracts, Historical Claims Duration
Average annual percentage payout, year 1	30.20%
Average annual percentage payout, year 2	25.10%
Average annual percentage payout, year 3	13.90%
Average annual percentage payout, year 4	13.00%
Average annual percentage payout, year 5	9.60%
Average annual percentage payout, year 6	4.60%
Average annual percentage payout, year 7	2.30%
Average annual percentage payout, year 8	0.90%
Average annual percentage payout, year 9	0.70%
Average annual percentage payout, year 10	(0.30%)
Property and Casualty | Property and Casualty - Auto Physical Damage
Short-duration Insurance Contracts, Historical Claims Duration
Average annual percentage payout, year 1	90.60%
Average annual percentage payout, year 2	9.60%
Average annual percentage payout, year 3	(0.10%)
Average annual percentage payout, year 4	0.00%
Average annual percentage payout, year 5	0.00%
Average annual percentage payout, year 6	0.00%
Average annual percentage payout, year 7	(0.10%)
Average annual percentage payout, year 8	0.00%
Average annual percentage payout, year 9	0.00%
Average annual percentage payout, year 10	0.00%
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges
Short-duration Insurance Contracts, Historical Claims Duration
Average annual percentage payout, year 1	98.40%
Average annual percentage payout, year 2	2.60%
Average annual percentage payout, year 3	(1.30%)
Average annual percentage payout, year 4	0.20%
Average annual percentage payout, year 5	0.00%
Average annual percentage payout, year 6	0.00%
Average annual percentage payout, year 7	0.00%
Average annual percentage payout, year 8	0.00%
Average annual percentage payout, year 9	0.00%
Average annual percentage payout, year 10	0.00%
Property and Casualty | Property and Casualty - Homeowners and other
Short-duration Insurance Contracts, Historical Claims Duration
Average annual percentage payout, year 1	67.30%
Average annual percentage payout, year 2	25.10%
Average annual percentage payout, year 3	4.40%
Average annual percentage payout, year 4	1.50%
Average annual percentage payout, year 5	0.80%
Average annual percentage payout, year 6	0.30%
Average annual percentage payout, year 7	0.40%
Average annual percentage payout, year 8	0.10%
Average annual percentage payout, year 9	0.10%
Average annual percentage payout, year 10	0.00%
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges
Short-duration Insurance Contracts, Historical Claims Duration
Average annual percentage payout, year 1	64.90%
Average annual percentage payout, year 2	22.80%
Average annual percentage payout, year 3	3.30%
Average annual percentage payout, year 4	2.50%
Average annual percentage payout, year 5	1.30%
Average annual percentage payout, year 6	1.80%
Average annual percentage payout, year 7	1.00%
Average annual percentage payout, year 8	0.80%
Average annual percentage payout, year 9	0.50%
Average annual percentage payout, year 10	1.10%
Accident and Health | Accident and Health
Short-duration Insurance Contracts, Historical Claims Duration
Average annual percentage payout, year 1	62.90%
Average annual percentage payout, year 2	35.30%
Average annual percentage payout, year 3	1.60%
Average annual percentage payout, year 4	0.10%
Average annual percentage payout, year 5	0.10%
Average annual percentage payout, year 6	0.00%
Average annual percentage payout, year 7	0.00%
Average annual percentage payout, year 8	(0.40%)
Average annual percentage payout, year 9	0.30%
Average annual percentage payout, year 10	0.00%

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Unpaid Losses and Loss Adjustment Expense Reserves - Reconciliation of Net Incurred and Paid Claims Development (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability
Net reserve for claims and allocated claim adjustment expenses	$ 1,741,201
Reinsurance recoverable, net	1,218,930	$ 1,394,308
Reinsurance recoverable on unpaid losses	998,528
Insurance lines other than short-duration	35,688
Acquisition	17,488
Unallocated claims adjustment expenses (“ULAE”)	96,193
Subtotal	149,369
Unpaid loss and loss adjustment expense reserves	2,889,098	2,886,414	$ 2,957,159	$ 2,663,557
Recoverable on unpaid losses	998,528	1,111,808	1,285,142	1,129,743
Reinsurance recoverable on unpaid losses	998,528	1,111,808
Reciprocal Exchanges
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability
Reinsurance recoverable, net	125,515	119,125
Unpaid loss and loss adjustment expense reserves	205,972	205,786
Reinsurance recoverable on unpaid losses	77,614	84,174
MCCA
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability
Reinsurance recoverable, net	545,654	558,310
Reinsurance recoverable on unpaid losses	535,433	548,370
NCRF
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability
Reinsurance recoverable, net	193,295	191,255
Reinsurance recoverable on unpaid losses	157,611	146,496
Property and Casualty | Reciprocal Exchanges
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability
Unpaid loss and loss adjustment expense reserves	205,972	205,786	178,470	143,353
Recoverable on unpaid losses	77,614	$ 84,174	$ 77,979	$ 52,408
Property and Casualty | Property and Casualty - Auto Liability
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability
Net reserve for claims and allocated claim adjustment expenses	1,299,066
Reinsurance recoverable, net	766,929
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability
Net reserve for claims and allocated claim adjustment expenses	70,928
Reinsurance recoverable, net	28,745
Property and Casualty | Property and Casualty - Auto Physical Damage
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability
Net reserve for claims and allocated claim adjustment expenses	46,945
Reinsurance recoverable, net	8,198
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability
Net reserve for claims and allocated claim adjustment expenses	(89)
Reinsurance recoverable, net	557
Property and Casualty | Property and Casualty - Homeowners and other
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability
Net reserve for claims and allocated claim adjustment expenses	163,607
Reinsurance recoverable, net	124,090
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability
Net reserve for claims and allocated claim adjustment expenses	42,651
Reinsurance recoverable, net	48,312
Accident and Health | Accident and Health
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability
Net reserve for claims and allocated claim adjustment expenses	118,093
Reinsurance recoverable, net	$ 21,697

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Unpaid Losses and Loss Adjustment Expense Reserves - Reconciliation of Net Incurred and Paid Loss Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
2020 - Current Accident Year Paid
Rollforward table	$ 1,736,104	$ 1,760,686	$ 1,634,426
Development tables	2,819,891	2,849,304	2,696,260
Property and Casualty
2020 - Current Accident Year Paid
Development tables	2,477,177	2,493,268	2,343,938
Property and Casualty | Reciprocal Exchanges
2020 - Current Accident Year Paid
Rollforward table	94,287	111,380	110,053
Development tables	153,380	173,215	161,015
Accident and Health
2020 - Current Accident Year Paid
Development tables	342,714	$ 356,036	$ 352,322
2020
2020 - Current Accident Year Incurred
Rollforward table	2,819,891
Development tables	2,447,451
Variance	372,440
Unallocated claims adjustment expenses	341,655
Long-duration contracts	30,789
Other	(4)
Variance	372,440
2020 - Current Accident Year Paid
Rollforward table	1,736,104
Development tables	1,455,133
Variance	280,971
Unallocated claims adjustment expenses	265,518
Long-duration contracts	15,449
Other	4
Variance	280,971
2020 | Reciprocal Exchanges
2020 - Current Accident Year Incurred
Rollforward table	153,380
Development tables	130,720
Variance	22,660
Unallocated claims adjustment expenses	22,660
Long-duration contracts	0
Other	0
Variance	22,660
2020 - Current Accident Year Paid
Rollforward table	94,287
Development tables	79,571
Variance	14,716
Unallocated claims adjustment expenses	14,716
Long-duration contracts	0
Other	0
Variance	14,716
2020 | Property and Casualty
2020 - Current Accident Year Incurred
Rollforward table	2,323,797
Development tables	2,020,278
Variance	303,519
Unallocated claims adjustment expenses	303,112
Long-duration contracts	0
Other	407
Variance	303,519
2020 - Current Accident Year Paid
Rollforward table	1,432,498
Development tables	1,191,977
Variance	240,521
Unallocated claims adjustment expenses	240,263
Long-duration contracts	0
Other	258
Variance	240,521
2020 | Accident and Health
2020 - Current Accident Year Incurred
Rollforward table	342,714
Development tables	296,453
Variance	46,261
Unallocated claims adjustment expenses	15,883
Long-duration contracts	30,789
Other	(411)
Variance	46,261
2020 - Current Accident Year Paid
Rollforward table	209,319
Development tables	183,585
Variance	25,734
Unallocated claims adjustment expenses	10,539
Long-duration contracts	15,449
Other	(254)
Variance	25,734
2019
2020 - Current Accident Year Incurred
Rollforward table	4,191
Development tables	28,871
Variance	(24,680)
Unallocated claims adjustment expenses	(13,752)
Accident years prior to 2011	(99)
Long-duration contracts	(2,912)
Acquisition	(7,917)
Variance	(24,680)
2020 - Current Accident Year Paid
Rollforward table	972,014
Development tables	863,968
Variance	108,046
Unallocated claims adjustment expenses	64,114
Accident years prior to 2011	1,635
Long-duration contracts	8,771
Acquisition	33,526
Variance	108,046
2019 | Reciprocal Exchanges
2020 - Current Accident Year Incurred
Rollforward table	970
Development tables	4,162
Variance	(3,192)
Unallocated claims adjustment expenses	(3,586)
Accident years prior to 2011	394
Long-duration contracts	0
Acquisition	0
Variance	(3,192)
2020 - Current Accident Year Paid
Rollforward table	53,317
Development tables	50,568
Variance	2,749
Unallocated claims adjustment expenses	2,556
Accident years prior to 2011	193
Long-duration contracts	0
Acquisition	0
Variance	2,749
2019 | Property and Casualty
2020 - Current Accident Year Incurred
Rollforward table	27,042
Development tables	44,333
Variance	(17,291)
Unallocated claims adjustment expenses	(8,881)
Accident years prior to 2011	(493)
Long-duration contracts	0
Acquisition	(7,917)
Variance	(17,291)
2020 - Current Accident Year Paid
Rollforward table	827,745
Development tables	734,614
Variance	93,131
Unallocated claims adjustment expenses	58,163
Accident years prior to 2011	1,442
Long-duration contracts	0
Acquisition	33,526
Variance	93,131
2019 | Accident and Health
2020 - Current Accident Year Incurred
Rollforward table	(23,821)
Development tables	(19,624)
Variance	(4,197)
Unallocated claims adjustment expenses	(1,285)
Accident years prior to 2011	0
Long-duration contracts	(2,912)
Acquisition	0
Variance	(4,197)
2020 - Current Accident Year Paid
Rollforward table	90,952
Development tables	78,786
Variance	12,166
Unallocated claims adjustment expenses	3,395
Accident years prior to 2011	0
Long-duration contracts	8,771
Acquisition	0
Variance	$ 12,166

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Reinsurance - Reinsurance Recoverable (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Reinsurance recoverable
Reinsurance recoverable on paid losses	$ 221,212	$ 282,500
Reinsurance recoverable on unpaid losses	998,528	1,111,808
Allowance for uncollectible reinsurance	(810)	0
Reinsurance recoverable, net	1,218,930	1,394,308
MCCA
Reinsurance recoverable
Reinsurance recoverable on paid losses	10,221	9,940
Reinsurance recoverable on unpaid losses	535,433	548,370
Allowance for uncollectible reinsurance	0	0
Reinsurance recoverable, net	545,654	558,310
NCRF
Reinsurance recoverable
Reinsurance recoverable on paid losses	35,684	44,759
Reinsurance recoverable on unpaid losses	157,611	146,496
Allowance for uncollectible reinsurance	0	0
Reinsurance recoverable, net	$ 193,295	$ 191,255

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Reinsurance - Effect of Reinsurance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Assumed
Unpaid loss and LAE reserves	$ 27,568	$ 50,884
Unearned premiums	18,845	15,278
Ceded
Reinsurance recoverable on unpaid losses	998,528	1,111,808
Prepaid Reinsurance	414,010	575,747
Written
Direct	5,574,550	5,508,245	$ 5,317,742
Assumed	59,997	74,835	99,097
Total Gross Premium	5,634,547	5,583,080	5,416,839
Ceded	(1,013,703)	(1,358,459)	(1,589,126)
Net Premium	4,620,844	4,224,621	3,827,713
Earned
Direct	5,613,630	5,486,835	5,049,512
Assumed	56,430	80,572	123,265
Total Gross Premium	5,670,060	5,567,407	5,172,777
Ceded	(1,175,440)	(1,449,365)	(1,440,575)
Net Premium	4,494,620	4,118,042	3,732,202
Loss and LAE
Assumed	9,713	32,745	29,290
Ceded	$ 729,628	$ 801,041	$ 1,041,286

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Reinsurance - Narrative (Details) $ in Thousands								12 Months Ended
	Oct. 01, 2020 USD ($)	Jul. 17, 2020 USD ($)	Jul. 01, 2020 USD ($) reinstatement	May 01, 2020 USD ($) reinstatement	Jan. 01, 2020	Jul. 01, 2019	Jan. 01, 2019	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Reinsurance Retention Policy
Funds held under reinsurance agreements								$ 169,008	$ 259,442
Ceded Credit Risk, Secured
Reinsurance Retention Policy
Funds held under reinsurance agreements								245,049	143,069
MCCA
Reinsurance Retention Policy
Funds held under reinsurance agreements								0	0
Reciprocal Exchanges
Reinsurance Retention Policy
Funds held under reinsurance agreements								15,105	$ 0
Personal Auto
Reinsurance Retention Policy
Reinsurance - percentage of business ceded					5.00%	10.00%	7.00%
Reinsurance - percentage of ceding commission						31.20%
Quota share agreement, term						2 years
Homeowners
Reinsurance Retention Policy
Reinsurance - percentage of business ceded			20.00%			40.00%
Reinsurance - percentage of ceding commission			37.00%			36.00%
Quota share agreement, term			1 year			1 year
Property Catastrophe Program
Reinsurance Retention Policy
Amount of coverage in excess of retention				$ 650,000
Number of reinstatements | reinstatement				1
Property Catastrophe Program | Reciprocal Exchanges
Reinsurance Retention Policy
Amount of coverage in excess of retention			$ 475,000
Number of reinstatements | reinstatement			1
Retention amount			$ 20,000
Casualty Program
Reinsurance Retention Policy
Amount of coverage in excess of retention	$ 35,000
Retention amount	$ 5,000
Medical Insurance | MCCA
Reinsurance Retention Policy
Amount of coverage in excess of retention								$ 580
Personal Lines | Reciprocal Exchanges
Reinsurance Retention Policy
Reinsurance - percentage of business ceded			42.00%
Quota share agreement, term			1 year						1 year
Personal Lines, Homeowners | Reciprocal Exchanges
Reinsurance Retention Policy
Reinsurance - percentage of business ceded			55.00%						42.30%
Personal Lines, Auto | Reciprocal Exchanges
Reinsurance Retention Policy
Reinsurance - percentage of business ceded			25.00%
Top Layer Coverage
Reinsurance Retention Policy
Amount of coverage in excess of retention		$ 125,000
Minimum | Personal Auto
Reinsurance Retention Policy
Reinsurance - percentage of ceding commission						30.00%
Loss ratio						64.70%
Maximum | Personal Auto
Reinsurance Retention Policy
Reinsurance - percentage of ceding commission						32.80%
Loss ratio						67.50%
First Event | Property Catastrophe Program
Reinsurance Retention Policy
Retention amount				$ 70,000
Second Event | Property Catastrophe Program
Reinsurance Retention Policy
Retention amount				50,000
First Event, Named Wind | Property Catastrophe Program
Reinsurance Retention Policy
Retention amount				$ 50,000

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Reinsurance - Premiums and Losses Ceded (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Ceded Credit Risk
Ceded earned premiums	$ 1,175,440	$ 1,449,365	$ 1,440,575
Ceded Loss and LAE	729,628	801,041	1,041,286
MCCA
Ceded Credit Risk
Ceded earned premiums	7,856	9,867	9,676
Ceded Loss and LAE	3,624	(23,616)	(54,105)
NCRF
Ceded Credit Risk
Ceded earned premiums	236,837	234,370	232,270
Ceded Loss and LAE	$ 208,316	$ 222,796	$ 210,297

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Reinsurance - Concentration of Credit Risk by Reinsurer (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Ceded Credit Risk
Reinsurance recoverable on unpaid losses	$ 998,528	$ 1,111,808
Reinsurance recoverable on paid losses	221,212	282,500
Allowance for uncollectible reinsurance	(810)	0
Prepaid Reinsurance	414,010	575,747
Funds Held	(169,008)	(259,442)
Net	1,463,932	1,710,613
Reciprocal Exchanges
Ceded Credit Risk
Reinsurance recoverable on unpaid losses	77,614	84,174
Reinsurance recoverable on paid losses	48,075	34,951
Allowance for uncollectible reinsurance	(174)
Prepaid Reinsurance	89,850	105,894
Funds Held	(15,105)	0
Net	200,260	225,019
NGHC
Ceded Credit Risk
Reinsurance recoverable on unpaid losses	920,914	1,027,634
Reinsurance recoverable on paid losses	173,137	247,549
Allowance for uncollectible reinsurance	(636)
Prepaid Reinsurance	324,160	469,853
Funds Held	(153,903)	(259,442)
Net	1,263,672	1,485,594
MCCA
Ceded Credit Risk
Reinsurance recoverable on unpaid losses	535,433	548,370
Reinsurance recoverable on paid losses	10,221	9,940
Allowance for uncollectible reinsurance	0	0
Prepaid Reinsurance	1,251	3,927
Funds Held	0	0
Net	546,905	562,237
NCRF
Ceded Credit Risk
Reinsurance recoverable on unpaid losses	157,611	146,496
Reinsurance recoverable on paid losses	35,684	44,759
Allowance for uncollectible reinsurance	0	0
Prepaid Reinsurance	92,783	88,022
Funds Held	0	0
Net	286,078	279,277
Hannover Ruck SE
Ceded Credit Risk
Reinsurance recoverable on unpaid losses	74,485	155,223
Reinsurance recoverable on paid losses	47,726	101,064
Allowance for uncollectible reinsurance	0
Prepaid Reinsurance	68,167	134,878
Funds Held	(149,402)	(254,558)
Net	40,976	136,607
Other reinsurers' balances - each less than 5% of total
Ceded Credit Risk
Reinsurance recoverable on unpaid losses	230,999	261,719
Reinsurance recoverable on paid losses	127,581	126,737
Allowance for uncollectible reinsurance	(810)
Prepaid Reinsurance	251,809	348,920
Funds Held	(19,606)	(4,884)
Net	$ 589,973	$ 732,492

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Debt - Debt Instruments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Debt Instrument
Present value of lease liabilities	$ 16,690	$ 20,477
Unamortized debt issuance costs and unamortized discount	(5,242)	(5,981)
Carrying amount of debt	$ 676,810	686,006
Senior Notes | 6.75% Notes
Debt Instrument
Interest rate on debt	6.75%
Notes payable	$ 350,000	350,000
Senior Notes | 7.625% Notes
Debt Instrument
Interest rate on debt	7.625%
Notes payable	$ 100,000	$ 100,000
Surplus Notes | Subordinated Debentures I
Debt Instrument
Interest rate on debt	3.62%	5.29%
Notes payable	$ 41,238	$ 41,238
Surplus Notes | Subordinated Debentures II
Debt Instrument
Interest rate on debt	4.47%	6.14%
Notes payable	$ 30,930	$ 30,930
Other
Debt Instrument
Interest rate on debt	3.50%
Notes payable	$ 3,194	9,342
2019 Credit Agreement
Debt Instrument
Notes payable	$ 140,000	$ 140,000
JPMorgan Chase, N.A. | 2019 Credit Agreement
Debt Instrument
Interest rate on credit agreement	4.00%	3.59%
London Interbank Offered Rate (LIBOR) | Surplus Notes | Subordinated Debentures I
Debt Instrument
Debt Instrument, description of variable rate basis	LIBOR
Debt instrument, basis spread on variable rate	3.40%
London Interbank Offered Rate (LIBOR) | Surplus Notes | Subordinated Debentures II
Debt Instrument
Debt Instrument, description of variable rate basis	LIBOR
Debt instrument, basis spread on variable rate	4.25%
London Interbank Offered Rate (LIBOR) | JPMorgan Chase, N.A. | 2019 Credit Agreement
Debt Instrument
Debt Instrument, description of variable rate basis		LIBOR
Debt instrument, basis spread on variable rate	1.75%	1.00%

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Debt - Interest Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Debt Instrument
Finance lease liabilities	$ 1,150	$ 1,176	$ 621
Interest expense	33,772	51,544	51,425
Other
Debt Instrument
Interest expense, debt	$ (5,336)	8,031	7,717
Senior Notes | 6.75% Notes
Debt Instrument
Interest rate on debt	6.75%
Interest expense, debt	$ 23,625	23,625	23,625
Senior Notes | 7.625% Notes
Debt Instrument
Interest rate on debt	7.625%
Interest expense, debt	$ 7,625	7,625	7,625
Surplus Notes | Subordinated Debentures
Debt Instrument
Interest expense, debt	3,287	4,536	4,346
JPMorgan Chase, N.A. | 2016 Credit Agreement
Debt Instrument
Interest expense, debt	0	1,211	7,491
JPMorgan Chase, N.A. | 2019 Credit Agreement
Debt Instrument
Interest expense, debt	$ 3,421	$ 5,340	$ 0

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Debt - Notes (Details) - Senior Notes	Dec. 31, 2020
6.75% Notes
Debt Instrument
Interest rate on debt	6.75%
7.625% Notes
Debt Instrument
Interest rate on debt	7.625%

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Debt - Subordinated Debentures (Details) - Surplus Notes - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Subordinated Debentures
Debt Instrument
Debt instrument, redemption price, percentage	100.00%
Subordinated Debentures I
Debt Instrument
Notes payable	$ 41,238	$ 41,238
Subordinated Debentures I | London Interbank Offered Rate (LIBOR)
Debt Instrument
Debt instrument, basis spread on variable rate	3.40%
Debt Instrument, description of variable rate basis	LIBOR
Subordinated Debentures II
Debt Instrument
Notes payable	$ 30,930	$ 30,930
Subordinated Debentures II | London Interbank Offered Rate (LIBOR)
Debt Instrument
Debt instrument, basis spread on variable rate	4.25%
Debt Instrument, description of variable rate basis	LIBOR

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Debt - Credit Agreement (Details) - 2019 Credit Agreement - JPMorgan Chase, N.A. - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Debt Instrument
Line of credit facility, maximum amount outstanding during period		$ 340,000
Letter of credit fronting fee		0.125%
Line of credit facility, commitment fee percentage	0.225%
London Interbank Offered Rate (LIBOR)
Debt Instrument
Debt Instrument, description of variable rate basis		LIBOR
Debt instrument, basis spread on variable rate	1.75%	1.00%
Fed Funds Rate
Debt Instrument
Debt instrument, basis spread on variable rate		0.50%
Minimum
Debt Instrument
Line of credit facility, current borrowing capacity		$ 150,000
Line of credit facility, commitment fee percentage		0.175%
Maximum
Debt Instrument
Line of credit facility, current borrowing capacity		$ 50,000
Line of credit facility, commitment fee percentage		0.25%

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Debt - Debt Maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Finance Leases
2021	$ 5,986
2022	3,875
2023	2,433
2024	1,436
2025 and thereafter	2,960
Total	16,690	$ 20,477
Debt and Finance Leases
2021	9,180
2022	3,875
2023	142,433
2024	351,436
2025 and thereafter	175,128
Total	682,052
Less: Unamortized debt issuance costs and unamortized discount	(5,242)	(5,981)
Carrying amount of debt	676,810	$ 686,006
2019 Credit Agreement | JPMorgan Chase, N.A.
Debt, Excluding Finance Leases
2021	0
2022	0
2023	140,000
2024	0
2025 and thereafter	0
Total	$ 140,000
Senior Notes | 6.75% Notes
Maturities of Debt
Interest rate on debt	6.75%
Debt, Excluding Finance Leases
2021	$ 0
2022	0
2023	0
2024	350,000
2025 and thereafter	0
Total	$ 350,000
Senior Notes | 7.625% Notes
Maturities of Debt
Interest rate on debt	7.625%
Debt, Excluding Finance Leases
2021	$ 0
2022	0
2023	0
2024	0
2025 and thereafter	100,000
Total	$ 100,000
Surplus Notes | Subordinated Debentures I
Maturities of Debt
Interest rate on debt	3.62%	5.29%
Debt, Excluding Finance Leases
2021	$ 0
2022	0
2023	0
2024	0
2025 and thereafter	41,238
Total	$ 41,238
Surplus Notes | Subordinated Debentures II
Maturities of Debt
Interest rate on debt	4.47%	6.14%
Debt, Excluding Finance Leases
2021	$ 0
2022	0
2023	0
2024	0
2025 and thereafter	30,930
Total	$ 30,930
Other
Maturities of Debt
Interest rate on debt	3.50%
Other | Other
Debt, Excluding Finance Leases
2021	$ 3,194
2022	0
2023	0
2024	0
2025 and thereafter	0
Total	$ 3,194

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Debt - Covenants and Compliance (Details) - Senior Notes	Dec. 31, 2020
Indenture Excess Leverage Ratio | Minimum
Debt Instrument
Ratio of indebtedness to net capital	0.35
Indenture Excess Leverage Ratio | Maximum
Debt Instrument
Ratio of indebtedness to net capital	1.00
6.75% Notes
Debt Instrument
Interest rate on debt	6.75%
7.625% Notes
Debt Instrument
Interest rate on debt	7.625%

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Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Current tax expense (benefit)
Federal									$ 115,423	$ 67,728	$ 24,749
Foreign									213	2,621	1,376
Total current tax expense (benefit)									115,636	70,349	26,125
Deferred tax expense (benefit)
Federal									20,825	6,664	26,755
Foreign									0	0	604
Total deferred tax expense (benefit)									20,825	6,664	27,359
Provision (benefit) for income taxes	$ 30,354	$ 27,428	$ 50,507	$ 28,172	$ 15,519	$ 16,747	$ 22,241	$ 22,506	136,461	77,013	53,484
Reciprocal Exchanges
Current tax expense (benefit)
Federal									7	(2,257)	(2,290)
Foreign									0	0	0
Total current tax expense (benefit)									7	(2,257)	(2,290)
Deferred tax expense (benefit)
Federal									1,777	(6,833)	(1,260)
Foreign									0	0	0
Total deferred tax expense (benefit)									1,777	(6,833)	(1,260)
Provision (benefit) for income taxes									1,784	(9,090)	(3,550)
NGHC
Current tax expense (benefit)
Federal									115,416	69,985	27,039
Foreign									213	2,621	1,376
Total current tax expense (benefit)									115,629	72,606	28,415
Deferred tax expense (benefit)
Federal									19,048	13,497	28,015
Foreign									0	0	604
Total deferred tax expense (benefit)									19,048	13,497	28,619
Provision (benefit) for income taxes									$ 134,677	$ 86,103	$ 57,034

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Income Taxes - Domestic and Foreign Components of Income Before Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Entity Information
Domestic	$ 620,847	$ 328,350	$ 201,083
Foreign	39,822	76,093	19,925
Income (loss)	660,669	404,443	221,008
Reciprocal Exchanges
Entity Information
Domestic	12,661	(29,729)	(43,380)
Foreign	0	0	0
Income (loss)	12,661	(29,729)	(43,380)
NGHC
Entity Information
Domestic	608,186	358,079	244,463
Foreign	39,822	76,093	19,925
Income (loss)	$ 648,008	$ 434,172	$ 264,388

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Income Taxes - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure
Federal tax rate	21.00%	21.00%	21.00%
Deferred tax assets, valuation allowance	$ 77,882	$ 71,780
Benefits of operating loss carryforwards	6,954	11,541	$ 53,716
Net operating loss carryforwards	62,731	67,406	$ 58,082
Unrecognized tax benefits	4,609	$ 0
Unrecognized tax benefits, Interest accrued	1,300
Unrecognized tax benefits, penalties accrued	$ 1,100
Reciprocal Exchanges
Income Tax Disclosure
Federal tax rate	21.00%	21.00%	21.00%
Deferred tax assets, valuation allowance	$ 5,670	$ 6,523
Benefits of operating loss carryforwards	0	0	$ 0
Net operating loss carryforwards	$ 53,214	$ 66,484	$ 54,300
NGHC
Income Tax Disclosure
Federal tax rate	21.00%	21.00%	21.00%
Deferred tax assets, valuation allowance	$ 72,212	$ 65,257
Benefits of operating loss carryforwards	$ 6,954	$ 11,541	$ 53,716

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Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets:
Accrued expenses	$ 7,866	$ 3,861
Unearned premiums and other revenue	76,114	69,301
Bad debt	4,909	4,990
Loss reserve discount	14,238	11,397
Net operating loss carryforwards	119,044	116,497
Surplus note interest	0	2,081
Other	9,872	14,622
Gross deferred tax assets	232,043	222,749
Less: Valuation allowance	(77,882)	(71,780)
Total deferred tax assets	154,161	150,969
Deferred tax liabilities:
Deferred acquisition costs	56,751	54,722
Intangible assets	39,980	37,195
Goodwill	4,418	4,204
Property and equipment	39,160	28,922
Investments	4,497	0
Deferred commissions	18,875	0
Surplus note interest	10,747	13,828
Unrealized capital gains	55,096	20,932
Other	0	11,752
Gross deferred tax liabilities	229,524	171,555
Deferred tax asset	0	0
Deferred tax liability	(75,363)	(20,586)
Reciprocal Exchanges
Deferred tax assets:
Accrued expenses	289	683
Unearned premiums and other revenue	4,242	5,146
Bad debt	281	114
Loss reserve discount	1,167	1,042
Net operating loss carryforwards	11,175	13,962
Surplus note interest	0	0
Other	2,099	4,882
Gross deferred tax assets	19,253	25,829
Less: Valuation allowance	(5,670)	(6,523)
Total deferred tax assets	13,583	19,306
Deferred tax liabilities:
Deferred acquisition costs	4,032	4,894
Intangible assets	632	700
Goodwill	0	0
Property and equipment	0	0
Investments	107	0
Deferred commissions	0	0
Surplus note interest	10,747	13,828
Unrealized capital gains	1,080	1,062
Other	0	81
Gross deferred tax liabilities	16,598	20,565
Deferred tax asset	0	0
Deferred tax liability	(3,015)	(1,259)
NGHC
Deferred tax assets:
Accrued expenses	7,577	3,178
Unearned premiums and other revenue	71,872	64,155
Bad debt	4,628	4,876
Loss reserve discount	13,071	10,355
Net operating loss carryforwards	107,869	102,535
Surplus note interest	0	2,081
Other	7,773	9,740
Gross deferred tax assets	212,790	196,920
Less: Valuation allowance	(72,212)	(65,257)
Total deferred tax assets	140,578	131,663
Deferred tax liabilities:
Deferred acquisition costs	52,719	49,828
Intangible assets	39,348	36,495
Goodwill	4,418	4,204
Property and equipment	39,160	28,922
Investments	4,390	0
Deferred commissions	18,875	0
Surplus note interest	0	0
Unrealized capital gains	54,016	19,870
Other	0	11,671
Gross deferred tax liabilities	212,926	150,990
Deferred tax asset	0	0
Deferred tax liability	$ (72,348)	$ (19,327)

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Income Taxes - Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Entity Information
Income (loss) before provision for income taxes									$ 660,669	$ 404,443	$ 221,008
Tax rate									21.00%	21.00%	21.00%
Computed “expected” tax expense									$ 138,741	$ 84,933	$ 46,411
NGHC
Tax-exempt interest									(499)	(838)	(940)
Effect of foreign operations									351	(1,192)	2,807
State taxes									1,556	(2,147)	4,578
Change in valuation allowance									6,051	11,436	54,934
Benefits of operating loss carryforwards									(6,954)	(11,541)	(53,716)
Effects of TCJA											(1,317)
Other permanent items									(2,785)	(3,638)	727
Provision (benefit) for income taxes	$ 30,354	$ 27,428	$ 50,507	$ 28,172	$ 15,519	$ 16,747	$ 22,241	$ 22,506	$ 136,461	$ 77,013	$ 53,484
Tax Rate
Tax rate									21.00%	21.00%	21.00%
Tax-exempt interest									(0.10%)	(0.20%)	(0.40%)
Effect of foreign operations									0.10%	(0.30%)	1.30%
State taxes									0.20%	(0.50%)	2.10%
Change in valuation allowance									0.90%	2.80%	24.90%
Benefits of operating loss carryforwards									(1.10%)	(2.90%)	(24.30%)
Effects of TCJA											(0.006)
Other permanent items									(0.30%)	(0.90%)	0.20%
Provision (benefit) for income taxes									20.70%	19.00%	24.20%
Reciprocal Exchanges
Entity Information
Income (loss) before provision for income taxes									$ 12,661	$ (29,729)	$ (43,380)
Tax rate									21.00%	21.00%	21.00%
Computed “expected” tax expense									$ 2,659	$ (6,243)	$ (9,110)
NGHC
Tax-exempt interest									(13)	(28)	(30)
Effect of foreign operations									0	0	0
State taxes									0	210	0
Change in valuation allowance									(903)	(105)	1,218
Benefits of operating loss carryforwards									0	0	0
Effects of TCJA											(366)
Other permanent items									41	(2,924)	4,738
Provision (benefit) for income taxes									$ 1,784	$ (9,090)	$ (3,550)
Tax Rate
Tax rate									21.00%	21.00%	21.00%
Tax-exempt interest									(0.10%)	0.10%	0.10%
Effect of foreign operations									0.00%	0.00%	0.00%
State taxes									0.00%	(0.70%)	0.00%
Change in valuation allowance									(7.10%)	0.40%	(2.80%)
Benefits of operating loss carryforwards									0.00%	0.00%	0.00%
Effects of TCJA											0.008
Other permanent items									0.30%	9.80%	(10.90%)
Provision (benefit) for income taxes									14.10%	30.60%	8.20%
NGHC
Entity Information
Income (loss) before provision for income taxes									$ 648,008	$ 434,172	$ 264,388
Tax rate									21.00%	21.00%	21.00%
Computed “expected” tax expense									$ 136,082	$ 91,176	$ 55,521
NGHC
Tax-exempt interest									(486)	(810)	(910)
Effect of foreign operations									351	(1,192)	2,807
State taxes									1,556	(2,357)	4,578
Change in valuation allowance									6,954	11,541	53,716
Benefits of operating loss carryforwards									(6,954)	(11,541)	(53,716)
Effects of TCJA											(951)
Other permanent items									(2,826)	(714)	(4,011)
Provision (benefit) for income taxes									$ 134,677	$ 86,103	$ 57,034
Tax Rate
Tax rate									21.00%	21.00%	21.00%
Tax-exempt interest									(0.10%)	(0.20%)	(0.30%)
Effect of foreign operations									0.10%	(0.30%)	1.10%
State taxes									0.20%	(0.50%)	1.70%
Change in valuation allowance									1.10%	2.70%	20.30%
Benefits of operating loss carryforwards									(1.10%)	(2.70%)	(20.30%)
Effects of TCJA											(0.004)
Other permanent items									(0.40%)	(0.20%)	(1.50%)
Provision (benefit) for income taxes									20.80%	19.80%	21.60%

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Income Taxes - Reconciliation of Gross Unrecognized Tax Benefits (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Gross unrecognized tax benefits, beginning of the year	$ 0
Increases in tax positions for prior years	3,889
Increases in tax positions for current year	720
Gross unrecognized tax benefits, end of the year	$ 4,609

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Commitments and Contingencies - Lease Commitments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Lease expense	$ 37,827	$ 37,082
Lease expense			$ 35,723
Operating Leases
2021	31,525
2022	27,225
2023	21,824
2024	18,186
2025	15,109
Thereafter	22,222
Total lease payments	136,091
Less: Interest	(16,764)
Present value of lease liabilities	119,327
Finance Leases
2021	6,601
2022	4,296
2023	2,720
2024	1,638
2025	882
Thereafter	2,393
Total lease payments	18,530
Less: Interest	(1,840)
Present value of lease liabilities	16,690	$ 20,477
Total
2021	38,126
2022	31,521
2023	24,544
2024	19,824
2025	15,991
Thereafter	24,615
Total lease payments	$ 154,621

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Commitments and Contingencies - Employment Agreements (Details) - Employment Agreements $ in Thousands	Dec. 31, 2020 USD ($)
Other Commitments
2021	$ 4,672
2022	2,574
2023	1,303
2024	773
2025	0
Total	$ 9,322

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Stockholders' Equity - Narrative (Details) - USD ($)			12 Months Ended					66 Months Ended
	Jul. 15, 2023	Apr. 29, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Jul. 14, 2023	Dec. 31, 2018
Class of Stock
Shares of preferred stock issued (in shares)			2,565,120	2,565,120
Preferred stock, par value (in dollars per share)			$ 0.01	$ 0.01
Preferred stock, value, issued			$ 450,000,000	$ 450,000,000
Stock repurchase program, period		12 months
Stock repurchase program, authorized amount		$ 50,000,000
Common stock repurchased (in shares)			459,083
Common stock repurchased			$ 8,482,000
Preferred Stock
Class of Stock
Shares of preferred stock issued (in shares)			2,565,120	2,565,120
Preferred Stock | American Depositary Shares
Class of Stock
Shares of preferred stock issued (in shares)					8,000,000	6,600,000
Liquidation preference (in dollars per share)					$ 25	$ 25
Preferred Stock | Series B Preferred Stock
Class of Stock
Shares of preferred stock issued (in shares)			165,000	165,000
Dividend rate per year			7.50%	7.50%		7.50%
Preferred stock, par value (in dollars per share)						$ 0.01
Liquidation preference (in dollars per share)			$ 1,000	$ 1,000		1,000
Preferred Stock | Preferred stock Series A
Class of Stock
Shares of preferred stock issued (in shares)			2,200,000	2,200,000			2,200,000
Dividend rate per year			7.50%	7.50%			7.50%
Preferred stock, par value (in dollars per share)							$ 0.01
Liquidation preference (in dollars per share)			$ 25	$ 25		$ 25	$ 25
Preferred Stock | Series C Preferred Stock
Class of Stock
Shares of preferred stock issued (in shares)			200,000	200,000	200,000
Dividend rate per year			7.50%	7.50%	7.50%
Preferred stock, par value (in dollars per share)					$ 0.01
Liquidation preference (in dollars per share)			$ 1,000	$ 1,000	$ 1,000
Preferred Stock | Preferred stock Series D
Class of Stock
Shares of preferred stock issued (in shares)			120	120					120
Preferred stock, par value (in dollars per share)									$ 0.01
Liquidation preference (in dollars per share)			$ 250,000	$ 250,000					$ 250,000
Preferred stock, value, issued									$ 30,000,000
Preferred Stock | Preferred stock Series D | Forecast
Class of Stock
Dividend rate per year	5.4941%							7.00%
Convertible preferred stock, shares issued (in shares)	6,578.9474
Preferred stock, redemption price per share (in dollars per share)	$ 38
Common stock | Series B Preferred Stock
Class of Stock
Shares of preferred stock issued (in shares)						165,000

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Stockholders' Equity - Preferred Stock (Details) - USD ($)		12 Months Ended					66 Months Ended
	Jul. 15, 2023	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Jul. 14, 2023	Dec. 31, 2018
Class of Stock
Shares of preferred stock issued (in shares)		2,565,120	2,565,120
Aggregate liquidation preference		$ 450,000,000	$ 450,000,000
Preferred Stock
Class of Stock
Shares of preferred stock issued (in shares)		2,565,120	2,565,120
Aggregate liquidation preference		$ 450,000,000	$ 450,000,000
Preferred Stock | A
Class of Stock
Dividend rate per year		7.50%	7.50%			7.50%
Shares of preferred stock issued (in shares)		2,200,000	2,200,000			2,200,000
Depositary shares issued (in shares)		0	0
Liquidation preference (in dollars per share)		$ 25	$ 25		$ 25	$ 25
Aggregate liquidation preference		$ 55,000,000	$ 55,000,000
Preferred Stock | B
Class of Stock
Dividend rate per year		7.50%	7.50%		7.50%
Shares of preferred stock issued (in shares)		165,000	165,000
Depositary shares issued (in shares)		6,600,000	6,600,000
Liquidation preference (in dollars per share)		$ 1,000	$ 1,000		$ 1,000
Aggregate liquidation preference		$ 165,000,000	$ 165,000,000
Preferred Stock | C
Class of Stock
Dividend rate per year		7.50%	7.50%	7.50%
Shares of preferred stock issued (in shares)		200,000	200,000	200,000
Depositary shares issued (in shares)		8,000,000	8,000,000
Liquidation preference (in dollars per share)		$ 1,000	$ 1,000	$ 1,000
Aggregate liquidation preference		$ 200,000,000	$ 200,000,000
Preferred Stock | D
Class of Stock
Shares of preferred stock issued (in shares)		120	120					120
Depositary shares issued (in shares)		0	0
Liquidation preference (in dollars per share)		$ 250,000	$ 250,000					$ 250,000
Aggregate liquidation preference		$ 30,000,000	$ 30,000,000
Preferred Stock | D | Forecast
Class of Stock
Dividend rate per year	5.4941%						7.00%

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Stockholders' Equity - Dividends Declared (Details) - $ / shares	3 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018
Common stock
Class of Stock
Declaration Date	Oct. 29, 2020	Jul. 31, 2020	Apr. 29, 2020	Feb. 20, 2020	Oct. 30, 2019	Jul. 29, 2019	May 06, 2019	Feb. 25, 2019	Oct. 29, 2018	Aug. 06, 2018	May 07, 2018	Feb. 26, 2018
Dividend Per Share (in dollars per share)	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.04	$ 0.04	$ 0.04	$ 0.04	$ 0.04	$ 0.04
Preferred stock Series A
Class of Stock
Declaration Date	Oct. 29, 2020	Jul. 31, 2020	Apr. 29, 2020	Feb. 20, 2020	Oct. 30, 2019	Jul. 29, 2019	May 06, 2019	Feb. 25, 2019	Oct. 29, 2018	Aug. 06, 2018	May 07, 2018	Feb. 26, 2018
Dividend Per Share (in dollars per share)	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875
Preferred stock Series B and Series C
Class of Stock
Declaration Date	Oct. 29, 2020	Jul. 31, 2020	Apr. 29, 2020	Feb. 20, 2020	Oct. 30, 2019	Jul. 29, 2019	May 06, 2019	Feb. 25, 2019	Oct. 29, 2018	Aug. 06, 2018	May 07, 2018	Feb. 26, 2018
Dividend Per Share (in dollars per share)	$ 18.75	$ 18.75	$ 18.75	$ 18.75	$ 18.75	$ 18.75	$ 18.75	$ 18.75	$ 18.75	$ 18.75	$ 18.75	$ 18.75
Dividend Per Depositary Share (in dollars per share)	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875	$ 0.46875
Preferred stock Series D
Class of Stock
Declaration Date	Oct. 29, 2020		Apr. 29, 2020		Oct. 30, 2019		May 06, 2019		Oct. 29, 2018
Dividend Per Share (in dollars per share)	$ 8,750.00		$ 8,750.00		$ 8,750.00		$ 8,750.00		$ 8,263.89

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Stockholders' Equity - Shares Rollforward (Details) - shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Increase (Decrease) in Stockholders' Equity
Common Stock, beginning of the year (in shares)	113,368,811	112,940,595
Shares issued under employee stock plans and exercises of stock options (in shares)	854,914	578,201
Shares withheld related to net share settlement (in shares)	(179,599)	(149,985)
Common Stock, end of the year (in shares)	114,044,126	113,368,811
Treasury Stock, beginning of the year (in shares)	0	0
Repurchases of common stock (in shares)	(459,083)
Treasury Stock, at end of the year (in shares)	(459,083)	0
Shares outstanding at end of the year (in shares)	113,585,043	113,368,811
Common stock
Increase (Decrease) in Stockholders' Equity
Repurchases of common stock (in shares)	(459,083)	0

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Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award
Share-based compensation expense	$ 12,421	$ 10,996	$ 9,020
Unrecognized compensation cost	$ 15,577
Nonvested award, cost not yet recognized, period for recognition (in years)	1 year 3 months 18 days
Employee Stock option
Share-based Compensation Arrangement by Share-based Payment Award
Options granted in period (in shares)	0
Options forfeited or expired (in shares)	0
Intrinsic value of stock options exercised	$ 7,685	3,105	5,011
Fair value options vested in period	$ 1,044	$ 239	$ 783
Options outstanding	2,637,351	3,025,587
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award
Granted (in dollars per share)	$ 21.46	$ 25.42	$ 21.36
Vested in period, fair value	$ 11,051	$ 9,259	$ 7,068
RSUs outstanding	1,116,576	1,033,631
Restricted Stock Units (RSUs) | Minimum
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period	3 years
Restricted Stock Units (RSUs) | Maximum
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period	4 years
Common stock
Share-based Compensation Arrangement by Share-based Payment Award
Number of shares authorized (in shares)		2,500,000
Number of shares available (in shares)	1,900,000

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Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) $ / shares shares
Aggregate Intrinsic Value
Share price (in dollars per share)	$ 34.18
Employee Stock option
Number of Shares
Outstanding at beginning of the year (in shares) | shares	3,025,587
Exercised (in shares) | shares	(388,236)
Outstanding at end of the year (in shares) | shares	2,637,351
Exercisable at end of the year (in shares) | shares	2,637,351
Weighted-Average Exercise Price
Outstanding at beginning of the year (in dollars per share)	$ 9.83
Exercised (in dollars per share)	6.79
Outstanding at end of the year (in dollars per share)	10.28
Exercisable at end of the year (in dollars per share)	$ 10.28
Weighted-Average Remaining Contractual Term (in years)
Outstanding at end of the year	2 years 4 months 24 days
Exercisable at end of the year	2 years 4 months 24 days
Aggregate Intrinsic Value
Outstanding at end of the year | $	$ 63,036
Exercisable at end of the year | $	$ 63,036

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Stock-Based Compensation - RSU Activity (Details) - Restricted Stock Units (RSUs) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Number of RSUs
Non-vested at beginning of the year (in shares)	1,033,631
Granted (in shares)	561,497
Vested (in shares)	(466,678)
Forfeited (in shares)	(11,874)
Non-vested at end of of the year (in shares)	1,116,576	1,033,631
Weighted-Average Grant Date Fair Value
Non-vested at beginning of the year(in dollars per share)	$ 23.98
Granted (in dollars per share)	21.46	$ 25.42	$ 21.36
Vested (in dollars per share)	23.68
Forfeited (in dollars per share)	21.75
Non-vested at end of the year (in dollars per share)	$ 22.86	$ 23.98

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Related Party Transactions - Agreements with ACP Re (Details) - USD ($) $ in Thousands		12 Months Ended
	Sep. 20, 2026	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Related Party Transaction
Other investments		$ 281,055	$ 311,287
Notes Receivable
Related Party Transaction
Other investments		130,784	129,229
Related parties
Related Party Transaction
Other investments		231,927	238,841
Related parties | Notes Receivable
Related Party Transaction
Other investments		130,824	129,299
Related parties | ACP Re
Related Party Transaction
Notes receivable, related parties		$ 250,000
Maintenance covenant, minimum collateral interest as percent of value of outstanding loan balance		115.00%
Minimum percent of change in control included as events of default		50.00%
Related parties | Loans
Related Party Transaction
Notes receivable, related parties		$ 125,000
Related parties | Loans | ACP Re
Related Party Transaction
Interest rate on debt		3.70%
Maximum percent of interest that may be paid in kind		1.20%
Interest income, related party		$ 4,825	$ 4,767	$ 4,711
Related parties | Loans | ACP Re | Forecast
Related Party Transaction
Percent of outstanding principal balance of loan due and payable annually after tenth anniversary	2.00%

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Related Party Transactions - Other Related Party Transactions (Details) - Related parties - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Lease Agreement 59 Maiden Lane
Related Party Transaction
Related party transaction, expenses from transactions with related party	$ 830	$ 830	$ 830
Lease Agreement 30 North LaSalle
Related Party Transaction
Related party transaction, expenses from transactions with related party	$ 440	$ 309	$ 302

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Benefits Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Retirement Benefits [Abstract]
Contribution expense	$ 11,624	$ 10,212	$ 9,292

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Statutory Financial Data, Risk-Based Capital and Dividend Restrictions - Statutory Financial Data (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Statutory Accounting Practices
Statutory capital and surplus	$ 269,219	$ 255,393
Reciprocal Exchanges
Statutory Accounting Practices
Statutory capital and surplus	109,314	84,340
Statutory net income (loss)	26,106	(27,033)	$ (24,194)
Property and Casualty Domestic Entities
Statutory Accounting Practices
Statutory capital and surplus	1,619,460	1,600,740
Statutory net income (loss)	214,313	156,771	16,737
Property and Casualty Foreign Entities
Statutory Accounting Practices
Statutory capital and surplus	791,028	760,658
Statutory net income (loss)	174,861	106,734	64,810
Property and Casualty
Statutory Accounting Practices
Statutory capital and surplus	2,410,488	2,361,398
Statutory net income (loss)	389,174	263,505	81,547
Life Insurance Domestic Entities
Statutory Accounting Practices
Statutory capital and surplus	79,977	53,022
Statutory net income (loss)	$ 7,963	$ 7,125	$ 9,827

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Statutory Financial Data, Risk-Based Capital and Dividend Restrictions - Dividend Restrictions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Insurance [Abstract]
Statutory accounting practices, statutory amount available for dividend payments with regulatory approval	$ 156,400	$ 402,970
Dividends and return of capital	$ 300,000	$ 7,000	$ 156,660

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Numerator:
Net income attributable to NGHC	$ 136,029	$ 109,969	$ 166,574	$ 100,759	$ 107,281	$ 71,154	$ 77,876	$ 91,758	$ 513,331	$ 348,069	$ 207,354
Dividends on preferred stock									(33,600)	(33,600)	(32,492)
Numerator for basic EPS	$ 127,104	$ 102,094	$ 157,649	$ 92,884	$ 98,356	$ 63,279	$ 68,951	$ 83,883	479,731	314,469	174,862
Effect of dilutive securities:
Preferred stock dividends - convertible									2,100	2,100	992
Numerator for diluted EPS - after assumed conversions									$ 481,831	$ 316,569	$ 175,854
Denominator:
Denominator for basic EPS - weighted-average shares outstanding (in shares)									113,511,669	113,199,501	107,659,813
Effect of dilutive securities:
Convertible preferred stock (in shares)									789,473	789,473	789,473
Dilutive potential common shares (in shares)									2,914,926	2,897,471	3,162,243
Denominator for diluted EPS - weighted-average shares outstanding and assumed conversions (in shares)									116,426,595	116,096,972	110,822,056
EPS attributable to NGHC common stockholders:
Basic EPS (in dollars per share)	$ 1.12	$ 0.90	$ 1.39	$ 0.82	$ 0.87	$ 0.56	$ 0.61	$ 0.74	$ 4.23	$ 2.78	$ 1.62
Diluted EPS (in dollars per share)	$ 1.10	$ 0.88	$ 1.37	$ 0.80	$ 0.85	$ 0.54	$ 0.60	$ 0.72	$ 4.14	$ 2.73	$ 1.59
Preferred stock dividends - nonconvertible
Numerator:
Dividends on preferred stock									$ (31,500)	$ (31,500)	$ (31,500)
Preferred stock dividends - convertible
Numerator:
Dividends on preferred stock									$ (2,100)	$ (2,100)	$ (992)
Employee stock options
Effect of dilutive securities:
Share options (in shares)									1,739,871	1,833,736	2,053,681
RSUs
Effect of dilutive securities:
Share options (in shares)									385,582	274,262	319,089

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Segment Information - Results of Operations (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2020 USD ($) segment	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Segment Reporting [Abstract]
Number of business segments | segment									2
Underwriting revenues:
Gross premium written									$ 5,634,547	$ 5,583,080	$ 5,416,839
Ceded premiums									(1,013,703)	(1,358,459)	(1,589,126)
Net premium written									4,620,844	4,224,621	3,827,713
Change in unearned premium									(126,224)	(106,579)	(95,511)
Net earned premium									4,494,620	4,118,042	3,732,202
Ceding commission income									152,457	238,453	224,697
Service and fee income									760,374	641,965	561,583
Total underwriting revenues									5,407,451	4,998,460	4,518,482
Underwriting expenses:
Loss and loss adjustment expense									2,824,082	2,854,468	2,662,226
Acquisition costs and other underwriting expenses									990,569	827,367	735,266
General and administrative expenses									1,043,193	1,041,772	938,046
Total underwriting expenses									4,857,844	4,723,607	4,335,538
Underwriting income									549,607	274,853	182,944
Net investment income									118,257	141,233	119,034
Net loss on investments									26,577	13,473	(29,545)
Other income									0	26,428	0
Interest expense									(33,772)	(51,544)	(51,425)
Provision for income taxes	$ (30,354)	$ (27,428)	$ (50,507)	$ (28,172)	$ (15,519)	$ (16,747)	$ (22,241)	$ (22,506)	(136,461)	(77,013)	(53,484)
Net income attributable to noncontrolling interest									(10,877)	20,639	39,830
Net income attributable to NGHC	$ 136,029	$ 109,969	$ 166,574	$ 100,759	$ 107,281	$ 71,154	$ 77,876	$ 91,758	513,331	348,069	207,354
Operating Segments | Property and Casualty
Underwriting revenues:
Gross premium written									4,857,631	4,814,463	4,718,730
Ceded premiums									(923,168)	(1,250,448)	(1,517,556)
Net premium written									3,934,463	3,564,015	3,201,174
Change in unearned premium									(125,310)	(108,992)	(85,385)
Net earned premium									3,809,153	3,455,023	3,115,789
Ceding commission income									152,671	227,514	217,694
Service and fee income									391,702	392,478	375,603
Total underwriting revenues									4,353,526	4,075,015	3,709,086
Underwriting expenses:
Loss and loss adjustment expense									2,505,189	2,543,788	2,340,881
Acquisition costs and other underwriting expenses									681,286	605,019	550,540
General and administrative expenses									792,929	773,291	726,238
Total underwriting expenses									3,979,404	3,922,098	3,617,659
Underwriting income									374,122	152,917	91,427
Net investment income									0	0	0
Net loss on investments									0	0	0
Other income
Interest expense									0	0	0
Provision for income taxes									0	0	0
Net income attributable to noncontrolling interest									0	0	0
Net income attributable to NGHC									374,122	152,917	91,427
Operating Segments | Accident and Health
Underwriting revenues:
Gross premium written									776,916	768,617	698,109
Ceded premiums									(90,535)	(108,011)	(71,570)
Net premium written									686,381	660,606	626,539
Change in unearned premium									(914)	2,413	(10,126)
Net earned premium									685,467	663,019	616,413
Ceding commission income									(214)	10,939	7,003
Service and fee income									368,672	249,487	185,980
Total underwriting revenues									1,053,925	923,445	809,396
Underwriting expenses:
Loss and loss adjustment expense									318,893	310,680	321,345
Acquisition costs and other underwriting expenses									309,283	222,348	184,726
General and administrative expenses									242,238	254,208	201,808
Total underwriting expenses									870,414	787,236	707,879
Underwriting income									183,511	136,209	101,517
Net investment income									0	0	0
Net loss on investments									0	0	0
Other income
Interest expense									0	0	0
Provision for income taxes									0	0	0
Net income attributable to noncontrolling interest									0	0	0
Net income attributable to NGHC									183,511	136,209	101,517
Corporate and Other
Underwriting revenues:
Gross premium written									0	0	0
Ceded premiums									0	0	0
Net premium written									0	0	0
Change in unearned premium									0	0	0
Net earned premium									0	0	0
Ceding commission income									0	0	0
Service and fee income									0	0	0
Total underwriting revenues									0	0	0
Underwriting expenses:
Loss and loss adjustment expense									0	0	0
Acquisition costs and other underwriting expenses									0	0	0
General and administrative expenses									8,026	14,273	10,000
Total underwriting expenses									8,026	14,273	10,000
Underwriting income									(8,026)	(14,273)	(10,000)
Net investment income									118,257	141,233	119,034
Net loss on investments									26,577	13,473	(29,545)
Other income										26,428
Interest expense									(33,772)	(51,544)	(51,425)
Provision for income taxes									(136,461)	(77,013)	(53,484)
Net income attributable to noncontrolling interest									(10,877)	20,639	39,830
Net income attributable to NGHC									$ (44,302)	$ 58,943	$ 14,410

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Segment Information - Financial Position (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Segment Reporting Information
Premiums and other receivables, net	$ 1,545,380	$ 1,428,948
Deferred acquisition costs	285,905	263,523
Reinsurance recoverable, net	1,218,930	1,394,308
Prepaid reinsurance premiums	414,010	575,747
Goodwill and Intangible assets, net	520,053	545,151
Prepaid and other assets	69,092	94,642
Corporate and other assets	6,074,524	5,454,215
Total assets	10,127,894	9,756,534
Operating Segments | Property and Casualty
Segment Reporting Information
Premiums and other receivables, net	1,304,636	1,292,813
Deferred acquisition costs	259,163	239,293
Reinsurance recoverable, net	1,187,855	1,377,284
Prepaid reinsurance premiums	412,950	575,712
Goodwill and Intangible assets, net	416,828	436,724
Prepaid and other assets	45,235	56,960
Corporate and other assets	0	0
Total assets	3,626,667	3,978,786
Operating Segments | Accident and Health
Segment Reporting Information
Premiums and other receivables, net	237,474	131,877
Deferred acquisition costs	26,742	24,230
Reinsurance recoverable, net	31,075	17,024
Prepaid reinsurance premiums	1,060	35
Goodwill and Intangible assets, net	103,225	108,427
Prepaid and other assets	18,322	32,852
Corporate and other assets	0	0
Total assets	417,898	314,445
Corporate and Other
Segment Reporting Information
Premiums and other receivables, net	3,270	4,258
Deferred acquisition costs	0	0
Reinsurance recoverable, net	0	0
Prepaid reinsurance premiums	0	0
Goodwill and Intangible assets, net	0	0
Prepaid and other assets	5,535	4,830
Corporate and other assets	6,074,524	5,454,215
Total assets	$ 6,083,329	$ 5,463,303

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Segment Information - Service and Fee Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information
Service and fee income	$ 760,374	$ 641,965	$ 561,583
Reciprocal Exchanges
Segment Reporting Information
Service and fee income	6,311	5,755	5,751
NGHC
Segment Reporting Information
Service and fee income	754,063	636,210	555,832
Commission revenue
Segment Reporting Information
Service and fee income	184,681	170,962	163,321
Finance and processing fees
Segment Reporting Information
Service and fee income	138,873	134,499	125,593
Group health administrative fees
Segment Reporting Information
Service and fee income	124,523	100,951	79,411
Installment fees
Segment Reporting Information
Service and fee income	104,915	97,997	92,785
Late payment fees
Segment Reporting Information
Service and fee income	32,436	34,519	33,851
Other service and fee income
Segment Reporting Information
Service and fee income	174,946	103,037	66,622
Property and Casualty
Segment Reporting Information
Service and fee income	391,702	392,478	375,603
Property and Casualty | Reciprocal Exchanges
Segment Reporting Information
Service and fee income	6,311	5,755	5,751
Property and Casualty | NGHC
Segment Reporting Information
Service and fee income	385,391	386,723	369,852
Property and Casualty | Commission revenue
Segment Reporting Information
Service and fee income	60,103	87,486	93,235
Property and Casualty | Finance and processing fees
Segment Reporting Information
Service and fee income	129,327	128,302	121,058
Property and Casualty | Group health administrative fees
Segment Reporting Information
Service and fee income	0	0	0
Property and Casualty | Installment fees
Segment Reporting Information
Service and fee income	104,915	97,997	92,785
Property and Casualty | Late payment fees
Segment Reporting Information
Service and fee income	32,377	34,210	33,765
Property and Casualty | Other service and fee income
Segment Reporting Information
Service and fee income	64,980	44,483	34,760
Accident and Health
Segment Reporting Information
Service and fee income	368,672	249,487	185,980
Accident and Health | Reciprocal Exchanges
Segment Reporting Information
Service and fee income	0	0	0
Accident and Health | NGHC
Segment Reporting Information
Service and fee income	368,672	249,487	185,980
Accident and Health | Commission revenue
Segment Reporting Information
Service and fee income	124,578	83,476	70,086
Accident and Health | Finance and processing fees
Segment Reporting Information
Service and fee income	9,546	6,197	4,535
Accident and Health | Group health administrative fees
Segment Reporting Information
Service and fee income	124,523	100,951	79,411
Accident and Health | Installment fees
Segment Reporting Information
Service and fee income	0	0	0
Accident and Health | Late payment fees
Segment Reporting Information
Service and fee income	59	309	86
Accident and Health | Other service and fee income
Segment Reporting Information
Service and fee income	$ 109,966	$ 58,554	$ 31,862

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Segment Information - Gross Premium Written (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information
Total Gross Premium Written	$ 5,634,547	$ 5,583,080	$ 5,416,839
NGHC
Segment Reporting Information
Total Gross Premium Written	5,260,946	5,135,633	4,967,916
Property and Casualty | Reciprocal Exchanges
Segment Reporting Information
Total Gross Premium Written	373,601	447,447	448,923
Property and Casualty | NGHC
Segment Reporting Information
Total Gross Premium Written	4,484,030	4,367,016	4,269,807
Property and Casualty | Personal Auto | Reciprocal Exchanges
Segment Reporting Information
Total Gross Premium Written	131,286	152,688	153,129
Property and Casualty | Personal Auto | NGHC
Segment Reporting Information
Total Gross Premium Written	2,817,396	2,721,202	2,637,176
Property and Casualty | Homeowners | Reciprocal Exchanges
Segment Reporting Information
Total Gross Premium Written	238,972	290,972	291,907
Property and Casualty | Homeowners | NGHC
Segment Reporting Information
Total Gross Premium Written	751,918	718,819	688,006
Property and Casualty | RV/Packaged | NGHC
Segment Reporting Information
Total Gross Premium Written	215,138	212,746	208,394
Property and Casualty | Small Business Auto | NGHC
Segment Reporting Information
Total Gross Premium Written	251,328	315,569	319,299
Property and Casualty | Lender-placed Insurance | NGHC
Segment Reporting Information
Total Gross Premium Written	402,768	342,267	363,056
Property and Casualty | Other | Reciprocal Exchanges
Segment Reporting Information
Total Gross Premium Written	3,343	3,787	3,887
Property and Casualty | Other | NGHC
Segment Reporting Information
Total Gross Premium Written	45,482	56,413	53,876
Accident and Health | NGHC
Segment Reporting Information
Total Gross Premium Written	776,916	768,617	698,109
Accident and Health | Group | NGHC
Segment Reporting Information
Total Gross Premium Written	366,847	288,549	239,729
Accident and Health | Individual | NGHC
Segment Reporting Information
Total Gross Premium Written	410,069	340,731	308,122
Accident and Health | International | NGHC
Segment Reporting Information
Total Gross Premium Written	$ 0	$ 139,337	$ 150,258

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Segment Information - Net Premium Written (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information
Total Net Premium Written	$ 4,620,844	$ 4,224,621	$ 3,827,713
NGHC
Segment Reporting Information
Total Net Premium Written	4,419,628	3,990,149	3,644,148
Property and Casualty | Reciprocal Exchanges
Segment Reporting Information
Total Net Premium Written	201,216	234,472	183,565
Property and Casualty | NGHC
Segment Reporting Information
Total Net Premium Written	3,733,247	3,329,543	3,017,609
Property and Casualty | Personal Auto | Reciprocal Exchanges
Segment Reporting Information
Total Net Premium Written	91,182	134,958	61,759
Property and Casualty | Personal Auto | NGHC
Segment Reporting Information
Total Net Premium Written	2,475,384	2,260,385	2,016,858
Property and Casualty | Homeowners | Reciprocal Exchanges
Segment Reporting Information
Total Net Premium Written	108,624	98,009	120,875
Property and Casualty | Homeowners | NGHC
Segment Reporting Information
Total Net Premium Written	521,331	404,278	331,120
Property and Casualty | RV/Packaged | NGHC
Segment Reporting Information
Total Net Premium Written	209,479	198,737	206,740
Property and Casualty | Small Business Auto | NGHC
Segment Reporting Information
Total Net Premium Written	192,859	249,067	233,456
Property and Casualty | Lender-placed Insurance | NGHC
Segment Reporting Information
Total Net Premium Written	314,642	198,171	202,069
Property and Casualty | Other | Reciprocal Exchanges
Segment Reporting Information
Total Net Premium Written	1,410	1,505	931
Property and Casualty | Other | NGHC
Segment Reporting Information
Total Net Premium Written	19,552	18,905	27,366
Accident and Health | NGHC
Segment Reporting Information
Total Net Premium Written	686,381	660,606	626,539
Accident and Health | Group | NGHC
Segment Reporting Information
Total Net Premium Written	284,189	231,388	197,386
Accident and Health | Individual | NGHC
Segment Reporting Information
Total Net Premium Written	402,192	340,049	308,065
Accident and Health | International | NGHC
Segment Reporting Information
Total Net Premium Written	$ 0	$ 89,169	$ 121,088

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Segment Information - Net Earned Premium (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information
Net earned premium	$ 4,494,620	$ 4,118,042	$ 3,732,202
NGHC
Segment Reporting Information
Net earned premium	4,273,371	3,907,811	3,545,441
Property and Casualty | Reciprocal Exchanges
Segment Reporting Information
Net earned premium	221,249	210,231	186,761
Property and Casualty | NGHC
Segment Reporting Information
Net earned premium	3,587,904	3,244,792	2,929,028
Property and Casualty | Personal Auto | Reciprocal Exchanges
Segment Reporting Information
Net earned premium	111,353	106,549	59,923
Property and Casualty | Personal Auto | NGHC
Segment Reporting Information
Net earned premium	2,403,879	2,190,748	1,927,667
Property and Casualty | Homeowners | Reciprocal Exchanges
Segment Reporting Information
Net earned premium	108,629	101,964	125,806
Property and Casualty | Homeowners | NGHC
Segment Reporting Information
Net earned premium	452,739	405,306	329,850
Property and Casualty | RV/Packaged | NGHC
Segment Reporting Information
Net earned premium	200,854	195,639	197,258
Property and Casualty | Small Business Auto | NGHC
Segment Reporting Information
Net earned premium	216,888	252,359	237,587
Property and Casualty | Lender-placed Insurance | NGHC
Segment Reporting Information
Net earned premium	293,353	182,231	215,811
Property and Casualty | Other | Reciprocal Exchanges
Segment Reporting Information
Net earned premium	1,267	1,718	1,032
Property and Casualty | Other | NGHC
Segment Reporting Information
Net earned premium	20,191	18,509	20,855
Accident and Health | NGHC
Segment Reporting Information
Net earned premium	685,467	663,019	616,413
Accident and Health | Group | NGHC
Segment Reporting Information
Net earned premium	284,197	231,398	197,406
Accident and Health | Individual | NGHC
Segment Reporting Information
Net earned premium	401,270	340,251	307,952
Accident and Health | International | NGHC
Segment Reporting Information
Net earned premium	$ 0	$ 91,370	$ 111,055

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Segment Information - Fee Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information
Service and fee income	$ 760,374	$ 641,965	$ 561,583
Ceding commission income	152,457	238,453	224,697
Fee Income	912,831	880,418	786,280
NGHC
Segment Reporting Information
Fee Income	864,226	811,162	723,780
Property and Casualty | Reciprocal Exchanges
Segment Reporting Information
Service and fee income	6,311	5,755	5,751
Ceding commission income	42,294	63,501	56,749
Fee Income	48,605	69,256	62,500
Property and Casualty | NGHC
Segment Reporting Information
Service and fee income	385,391	386,723	369,852
Ceding commission income	110,377	164,013	160,945
Fee Income	495,768	550,736	530,797
Accident and Health | NGHC
Segment Reporting Information
Service and fee income	368,672	249,487	185,980
Ceding commission income	(214)	10,939	7,003
Fee Income	368,458	260,426	192,983
Accident and Health | Group | NGHC
Segment Reporting Information
Service and fee income	172,526	134,206	104,504
Accident and Health | Individual | NGHC
Segment Reporting Information
Service and fee income	11,062	9,650	9,304
Accident and Health | Third Party Fee | NGHC
Segment Reporting Information
Service and fee income	$ 185,084	$ 105,631	$ 72,172

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Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Quarterly Financial Information Disclosure [Abstract]
Total revenues	$ 1,451,810	$ 1,443,009	$ 1,329,132	$ 1,328,334	$ 1,369,105	$ 1,308,172	$ 1,269,652	$ 1,232,665	$ 5,552,285	$ 5,179,594	$ 4,607,971
Total expenses	1,289,303	1,298,712	1,104,012	1,199,589	1,248,792	1,231,186	1,170,353	1,124,820	4,891,616	4,775,151	4,386,963
Provision for income taxes	30,354	27,428	50,507	28,172	15,519	16,747	22,241	22,506	136,461	77,013	53,484
Net income	132,153	116,869	174,613	100,573	104,794	60,239	77,058	85,339	524,208	327,430	167,524
Net income attributable to NGHC	136,029	109,969	166,574	100,759	107,281	71,154	77,876	91,758	513,331	348,069	207,354
Net income attributable to NGHC common stockholders	$ 127,104	$ 102,094	$ 157,649	$ 92,884	$ 98,356	$ 63,279	$ 68,951	$ 83,883	$ 479,731	$ 314,469	$ 174,862
Basic EPS (in dollars per share)	$ 1.12	$ 0.90	$ 1.39	$ 0.82	$ 0.87	$ 0.56	$ 0.61	$ 0.74	$ 4.23	$ 2.78	$ 1.62
Diluted EPS (in dollars per share)	$ 1.10	$ 0.88	$ 1.37	$ 0.80	$ 0.85	$ 0.54	$ 0.60	$ 0.72	$ 4.14	$ 2.73	$ 1.59

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Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Jan. 04, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2018
Subsequent Event
Preferred stock, par value (in dollars per share)		$ 0.01	$ 0.01
7.50% Non-Cumulative Preferred Stock, Series A | Preferred Stock
Subsequent Event
Dividend rate per year		7.50%	7.50%			7.50%
Preferred stock, par value (in dollars per share)						$ 0.01
Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B | Preferred Stock
Subsequent Event
Dividend rate per year		7.50%	7.50%		7.50%
Preferred stock, par value (in dollars per share)					$ 0.01
Preferred stock Series D | Preferred Stock
Subsequent Event
Preferred stock, par value (in dollars per share)							$ 0.01
Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series C | Preferred Stock
Subsequent Event
Dividend rate per year		7.50%	7.50%	7.50%
Preferred stock, par value (in dollars per share)				$ 0.01
6.75% Notes | Senior Notes
Subsequent Event
Interest rate on debt		6.75%
7.625% Notes | Senior Notes
Subsequent Event
Interest rate on debt		7.625%
Subsequent Event
Subsequent Event
Settlement for initial transfer of ceded business	$ 988,144
NGHC | Allstate | Subsequent Event
Subsequent Event
Acquisition, share price, cash (in dollars per share)	$ 32.00
Acquisition share price, closing dividend (in dollars per share)	2.50
Acquisition, share price (in dollars per share)	34.50
Common stock conversion to cash (in dollars per share)	34.50
RSU conversion to cash (in dollars per share)	$ 34.50

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Schedule I - Summary of Investments Other than Investments in Related Parties (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Investments, excluding Equity Investments In Unconsolidated Subsidiaries
Summary of Investments, Other than Investments in Related Parties, Reportable Data
Cost	$ 4,490,429
Value	4,737,344
Amount at which shown in the Balance Sheet	4,737,344
Total Debt Securities
Summary of Investments, Other than Investments in Related Parties, Reportable Data
Cost	4,234,213
Value	4,497,130
Amount at which shown in the Balance Sheet	4,497,130
U.S. government and government agencies and authorities
Summary of Investments, Other than Investments in Related Parties, Reportable Data
Cost	52,004
Value	55,208
Amount at which shown in the Balance Sheet	55,208
States, municipalities and political subdivisions
Summary of Investments, Other than Investments in Related Parties, Reportable Data
Cost	304,688
Value	322,441
Amount at which shown in the Balance Sheet	322,441
Foreign governments
Summary of Investments, Other than Investments in Related Parties, Reportable Data
Cost	1,765
Value	1,884
Amount at which shown in the Balance Sheet	1,884
Public utilities
Summary of Investments, Other than Investments in Related Parties, Reportable Data
Cost	56,998
Value	61,608
Amount at which shown in the Balance Sheet	61,608
All other corporate bonds
Summary of Investments, Other than Investments in Related Parties, Reportable Data
Cost	3,818,758
Value	4,055,989
Amount at which shown in the Balance Sheet	4,055,989
Total Equity Securities
Summary of Investments, Other than Investments in Related Parties, Reportable Data
Cost	18,911
Value	2,909
Amount at which shown in the Balance Sheet	2,909
Industrial, miscellaneous and all other
Summary of Investments, Other than Investments in Related Parties, Reportable Data
Cost	18,911
Value	2,909
Amount at which shown in the Balance Sheet	2,909
Other investments
Summary of Investments, Other than Investments in Related Parties, Reportable Data
Cost	46,219
Value	46,219
Amount at which shown in the Balance Sheet	46,219
Other Short-term Investments
Summary of Investments, Other than Investments in Related Parties, Reportable Data
Cost	191,086
Value	191,086
Amount at which shown in the Balance Sheet	$ 191,086

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Schedule II - Condensed Financial Information of Registrant - Balance Sheets - Parent Company Only (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Investments:
Debt securities, available-for-sale, amortized cost	$ 4,234,213	$ 4,376,691
Debt securities, available-for-sale at fair value	4,497,130	4,476,358
Short-term investments	191,086	67,353
Total investments	4,969,271	4,854,998
Cash and cash equivalents	662,772	135,942
Accrued investment income	27,803	30,927
Prepaid and other assets	69,092	94,642
Total assets	10,127,894	9,756,534
Liabilities:
Accounts payable, accrued expenses and other liabilities	377,662	315,366
Debt	676,810	686,006
Total liabilities	6,911,896	7,139,040
Stockholders’ equity:
Total stockholders’ equity	3,215,998	2,617,494	$ 2,200,871	$ 1,953,425
Total liabilities and stockholders’ equity	10,127,894	9,756,534
Parent Company
Investments:
Debt securities, available-for-sale, amortized cost	0	95,527
Debt securities, available-for-sale at fair value	0	98,187
Short-term investments	0	4,807
Equity investment in subsidiaries	3,289,136	2,937,575
Total investments	3,289,136	3,040,569
Cash and cash equivalents	403,631	852
Accrued investment income	0	835
Property and equipment, net	142,042	158,670
Prepaid and other assets	10,874	26,658
Total assets	3,845,683	3,227,584
Liabilities:
Accounts payable, accrued expenses and other liabilities	44,927	26,071
Debt	584,758	584,019
Total liabilities	629,685	610,090
Stockholders’ equity:
Total stockholders’ equity	3,215,998	2,617,494
Total liabilities and stockholders’ equity	$ 3,845,683	$ 3,227,584

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Schedule II - Condensed Financial Information of Registrant - Statements of Comprehensive Income - Parent Company Only (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues:
Service and fee income									$ 760,374	$ 641,965	$ 561,583
Investment income									118,257	141,233	119,034
Total revenues	$ 1,451,810	$ 1,443,009	$ 1,329,132	$ 1,328,334	$ 1,369,105	$ 1,308,172	$ 1,269,652	$ 1,232,665	5,552,285	5,179,594	4,607,971
Expenses:
Interest expense									33,772	51,544	51,425
Total expenses	1,289,303	1,298,712	1,104,012	1,199,589	1,248,792	1,231,186	1,170,353	1,124,820	4,891,616	4,775,151	4,386,963
Income before provision (benefit) for income taxes									660,669	404,443	221,008
Benefit for income taxes	30,354	27,428	50,507	28,172	15,519	16,747	22,241	22,506	136,461	77,013	53,484
Net income attributable to NGHC	136,029	109,969	166,574	100,759	107,281	71,154	77,876	91,758	513,331	348,069	207,354
Dividends on preferred stock									(33,600)	(33,600)	(32,492)
Net income attributable to NGHC common stockholders	$ 127,104	$ 102,094	$ 157,649	$ 92,884	$ 98,356	$ 63,279	$ 68,951	$ 83,883	479,731	314,469	174,862
Comprehensive income attributable to NGHC									641,986	474,747	163,300
Parent Company
Revenues:
Service and fee income									53,005	48,781	44,932
Investment income									2,200	3,929	1,205
Net gain (loss) on investments									7,094	1,026	(1,571)
Equity in undistributed net income of subsidiaries									513,023	365,932	232,101
Total revenues									575,322	419,668	276,667
Expenses:
Interest expense									35,618	38,670	39,380
Other expense, net									30,906	38,499	30,847
Total expenses									66,524	77,169	70,227
Income before provision (benefit) for income taxes									508,798	342,499	206,440
Benefit for income taxes									(4,533)	(5,570)	(914)
Net income attributable to NGHC									513,331	348,069	207,354
Dividends on preferred stock									(33,600)	(33,600)	(32,492)
Net income attributable to NGHC common stockholders									479,731	314,469	174,862
Other comprehensive income (loss), net of tax									128,655	126,678	(44,054)
Comprehensive income attributable to NGHC									$ 641,986	$ 474,747	$ 163,300

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Schedule II - Condensed Financial Information of Registrant - Statements of Cash Flows - Parent Company Only (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Condensed Financial Statements, Captions
Net income	$ 132,153	$ 116,869	$ 174,613	$ 100,573	$ 104,794	$ 60,239	$ 77,058	$ 85,339	$ 524,208	$ 327,430	$ 167,524
Adjustments to reconcile net income to cash provided by operating activities:
Net (gain) loss on investments									(26,577)	(13,473)	29,545
Depreciation and amortization									80,694	96,279	86,346
Stock-based compensation expense									12,421	10,996	9,020
Changes in assets and liabilities:
Accrued investment income									3,123	(5,553)	(7,568)
Prepaid expenses and other assets									25,818	58,086	(17,785)
Net cash provided by operating activities									600,070	521,611	598,133
Cash flows from investing activities:
Debt securities, available-for-sale									(1,002,485)	(2,140,359)	(1,802,668)
Short-term investments									(1,959,084)	(2,773,361)	(2,919,422)
Property and equipment									(39,974)	(91,664)	(102,390)
Sale of debt securities, available-for-sale									509,902	974,474	1,010,339
Maturity of debt securities, available-for-sale									645,401	347,948	314,685
Sale of short-term investments									1,838,450	3,066,577	2,610,788
Net cash provided by (used in) investing activities									14,188	(498,251)	(790,774)
Cash flows from financing activities:
Common stock repurchased									(8,482)	0	0
Payments of debt issuance costs									0	(1,134)	0
Issuance of common stock — employee share options									2,635	594	1,978
Taxes paid related to net share settlement of equity awards									(3,678)	(3,734)	(3,024)
Net cash (used in) provided by financing activities									(78,954)	(89,361)	73,463
Net increase (decrease) in cash, cash equivalents, and restricted cash									535,304	(69,120)	(123,901)
Cash, cash equivalents, and restricted cash at beginning of the year				164,463				233,583	164,463	233,583	357,484
Cash, cash equivalents, and restricted cash at end of the year	699,767				164,463				699,767	164,463	233,583
Parent Company
Condensed Financial Statements, Captions
Net income									513,331	348,069	207,354
Adjustments to reconcile net income to cash provided by operating activities:
Net (gain) loss on investments									(7,094)	(1,026)	1,571
Depreciation and amortization									26,244	23,280	20,668
Net amortization of premium net of discount on debt securities									700	233	581
Stock-based compensation expense									12,421	10,996	9,020
Equity in undistributed net income of subsidiaries									(513,023)	(365,932)	(232,101)
Changes in assets and liabilities:
Accrued investment income									835	(108)	(500)
Prepaid expenses and other assets									15,499	4,927	23,334
Accounts payable, accrued expenses and other liabilities									301,328	(1,728)	8,993
Net cash provided by operating activities									350,241	18,711	38,920
Cash flows from investing activities:
Debt securities, available-for-sale									(6,986)	(46,832)	(70,308)
Short-term investments									(389,372)	(284,875)	(342,137)
Property and equipment									(9,840)	(75,673)	(73,563)
Sale of debt securities, available-for-sale									91,301	20,723	16,052
Maturity of debt securities, available-for-sale									16,813	10,218	2,208
Sale of short-term investments									394,296	397,945	225,395
Distributions received from subsidiaries									102,150	50,825	130,772
Contributions and acquisition of subsidiaries									(80,000)	(17,091)	(9,875)
Net cash provided by (used in) investing activities									118,362	55,240	(121,456)
Cash flows from financing activities:
Common stock repurchased									(8,482)	0	0
Payments of debt issuance costs									0	(1,134)	0
Repayments of debt and return of capital									0	(20,000)	(30,000)
Issuances of common and preferred stock, net of fees									0	0	162,120
Issuance of common stock — employee share options									2,635	594	1,978
Taxes paid related to net share settlement of equity awards									(3,678)	(3,734)	(3,024)
Dividends paid to common and preferred shareholders									(56,299)	(52,781)	(48,611)
Net cash (used in) provided by financing activities									(65,824)	(77,055)	82,463
Net increase (decrease) in cash, cash equivalents, and restricted cash									402,779	(3,104)	(73)
Cash, cash equivalents, and restricted cash at beginning of the year				$ 852				$ 3,956	852	3,956	4,029
Cash, cash equivalents, and restricted cash at end of the year	$ 403,631				$ 852				$ 403,631	$ 852	$ 3,956

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Schedule III - Supplementary Insurance Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Supplementary Insurance Information, by Segment
Deferred Acquisition Costs	$ 285,905	$ 263,523	$ 251,408
Unpaid Loss and Loss Adjustment Expense Reserves	2,889,098	2,886,414	2,957,159
Unearned Premiums	2,183,706	2,219,219	2,156,837
Net Earned Premium	4,494,620	4,118,042	3,732,202
Net Investment Income	118,257	141,233	119,034
Loss and Loss Adjustment Expense Incurred	2,824,082	2,854,468	2,662,226
Deferred Acquisition Costs Amortization	635,813	577,357	510,793
Other Operating Expenses	354,756	250,010	224,473
Net Written Premium	4,620,844	4,224,621	3,827,713
Operating Segments | Property and Casualty
Supplementary Insurance Information, by Segment
Deferred Acquisition Costs	259,163	239,293	226,188
Unpaid Loss and Loss Adjustment Expense Reserves	2,708,171	2,734,540	2,685,879
Unearned Premiums	2,173,399	2,210,851	2,120,283
Net Earned Premium	3,809,153	3,455,023	3,115,789
Net Investment Income	0	0	0
Loss and Loss Adjustment Expense Incurred	2,505,189	2,543,788	2,340,881
Deferred Acquisition Costs Amortization	613,905	539,816	495,009
Other Operating Expenses	67,381	65,203	55,531
Net Written Premium	3,934,463	3,564,015	3,201,174
Operating Segments | Accident and Health
Supplementary Insurance Information, by Segment
Deferred Acquisition Costs	26,742	24,230	25,220
Unpaid Loss and Loss Adjustment Expense Reserves	180,927	151,874	271,280
Unearned Premiums	10,307	8,368	36,554
Net Earned Premium	685,467	663,019	616,413
Net Investment Income	0	0	0
Loss and Loss Adjustment Expense Incurred	318,893	310,680	321,345
Deferred Acquisition Costs Amortization	21,908	37,541	15,784
Other Operating Expenses	287,375	184,807	168,942
Net Written Premium	686,381	660,606	626,539
Corporate and Other
Supplementary Insurance Information, by Segment
Deferred Acquisition Costs	0	0	0
Unpaid Loss and Loss Adjustment Expense Reserves	0	0	0
Unearned Premiums	0	0	0
Net Earned Premium	0	0	0
Net Investment Income	118,257	141,233	119,034
Loss and Loss Adjustment Expense Incurred	0	0	0
Deferred Acquisition Costs Amortization	0	0	0
Other Operating Expenses	0	0	0
Net Written Premium	$ 0	$ 0	$ 0

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Schedule IV - Reinsurance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract]
Gross Amount	$ 5,613,630	$ 5,486,835	$ 5,049,512
Ceded to Other Companies	(1,175,440)	(1,449,365)	(1,440,575)
Assumed from Other Companies	56,430	80,572	123,265
Net Premium	$ 4,494,620	$ 4,118,042	$ 3,732,202
Percent of Amount Assumed to Net	1.30%	2.00%	3.30%

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Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters
Losses and Loss Adjustment Expenses Incurred Related to Current Year	$ 2,819,891	$ 2,849,304	$ 2,696,260
Losses and Loss Adjustment Expenses Incurred Related to Prior Years	4,191	5,164	(34,034)
Paid Losses and Loss Adjustment Expenses	2,708,118	2,756,563	2,515,237
Property and Casualty
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters
Losses and Loss Adjustment Expenses Incurred Related to Current Year	2,477,177	2,493,268	2,343,938
Losses and Loss Adjustment Expenses Incurred Related to Prior Years	28,012	50,520	(3,057)
Paid Losses and Loss Adjustment Expenses	2,407,847	2,427,676	2,209,570
Accident and Health
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters
Losses and Loss Adjustment Expenses Incurred Related to Current Year	342,714	356,036	352,322
Losses and Loss Adjustment Expenses Incurred Related to Prior Years	(23,821)	(45,356)	(30,977)
Paid Losses and Loss Adjustment Expenses	$ 300,271	$ 328,887	$ 305,667