Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2019 |
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _______ to _______ |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Names of each exchange on which registered | |||
Global Select Market |
x | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company |
Page Number | ||
• | the inherent uncertainty of estimating reserves and the possibility that incurred losses may be greater than our loss and loss adjustment expense reserves; |
• | inaccurate estimates and judgments in our risk management may expose us to greater risks than intended; |
• | the potential loss of key members of our management team or key employees and our ability to attract and retain personnel; |
• | adverse economic factors resulting in the sale of fewer policies than expected or an increase in the frequency or severity of claims, or both; |
• | a decline in our financial strength rating resulting in a reduction of new or renewal business; |
• | reliance on a select group of brokers and agents for a significant portion of our business and the impact of our potential failure to maintain such relationships; |
• | reliance on a select group of customers for a significant portion of our business and the impact of our potential failure to maintain such relationships; |
• | losses resulting from reinsurance counterparties failing to pay us on reinsurance claims, insurance companies with whom we have a fronting arrangement failing to pay us for claims, or an insured group of companies with whom we have an indemnification arrangement failing to perform their reimbursement obligations; |
• | changes in laws or government regulation, including tax or insurance law and regulations; |
• | the ongoing effect of Public Law No. 115-97, informally titled the Tax Cuts and Jobs Act, which may have a significant effect on us including, among other things, by potentially increasing our tax rate, as well as on our shareholders; |
• | in the event we do not qualify for the insurance company exception to the passive foreign investment company (“PFIC”) rules and are therefore considered a PFIC, there could be material adverse tax consequences to an investor that is subject to U.S. federal income taxation; |
• | the Company or any of its foreign subsidiaries becoming subject to U.S. federal income taxation; |
• | a failure of any of the loss limitations or exclusions we utilize to shield us from unanticipated financial losses or legal exposures, or other liabilities; |
• | losses from catastrophic events which substantially exceed our expectations and/or exceed the amount of reinsurance we have purchased to protect us from such events; |
• | potential effects on our business of emerging claim and coverage issues; |
• | exposure to credit risk, interest rate risk and other market risk in our investment portfolio; |
• | our ability to obtain reinsurance coverage at prices and on terms that allow us to transfer risk and adequately protect our company against financial loss; |
• | the potential impact of internal or external fraud, operational errors, systems malfunctions or cyber security incidents; |
• | our ability to manage our growth effectively; |
• | inadequacy of premiums we charge to compensate us for our losses incurred; |
• | failure to maintain effective internal controls in accordance with Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”); and |
• | changes in our financial condition, regulations or other factors that may restrict our subsidiaries’ ability to pay us dividends. |
(Unaudited) June 30, 2019 | December 31, 2018 | ||||||
(in thousands) | |||||||
Assets | |||||||
Invested assets: | |||||||
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2019 – $1,302,946; 2018 – $1,199,409) | $ | $ | |||||
Equity securities, at fair value (cost: 2019 – $80,846; 2018 – $77,152) | |||||||
Bank loan participations held-for-investment, at amortized cost, net of allowance | |||||||
Short-term investments | |||||||
Other invested assets | |||||||
Total invested assets | |||||||
Cash and cash equivalents | |||||||
Accrued investment income | |||||||
Premiums receivable and agents’ balances, net | |||||||
Reinsurance recoverable on unpaid losses | |||||||
Reinsurance recoverable on paid losses | |||||||
Prepaid reinsurance premiums | |||||||
Deferred policy acquisition costs | |||||||
Intangible assets, net | |||||||
Goodwill | |||||||
Other assets | |||||||
Total assets | $ | $ |
(Unaudited) June 30, 2019 | December 31, 2018 | ||||||
(in thousands, except share amounts) | |||||||
Liabilities and Shareholders’ Equity | |||||||
Liabilities: | |||||||
Reserve for losses and loss adjustment expenses | $ | $ | |||||
Unearned premiums | |||||||
Payables to reinsurers | |||||||
Senior debt | |||||||
Junior subordinated debt | |||||||
Accrued expenses | |||||||
Other liabilities | |||||||
Total liabilities | |||||||
Commitments and contingent liabilities | |||||||
Shareholders’ equity: | |||||||
Common Shares – 2019 and 2018: $0.0002 par value; 200,000,000 shares authorized; 30,330,675 and 29,988,460 shares issued and outstanding, respectively | |||||||
Preferred Shares – 2019 and 2018: $0.00125 par value; 20,000,000 shares authorized; no shares issued and outstanding | |||||||
Additional paid-in capital | |||||||
Retained earnings | |||||||
Accumulated other comprehensive income (loss) | ( | ) | |||||
Total shareholders’ equity | |||||||
Total liabilities and shareholders’ equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands, except share amounts) | |||||||||||||||
Revenues | |||||||||||||||
Gross written premiums | $ | $ | $ | $ | |||||||||||
Ceded written premiums | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net written premiums | |||||||||||||||
Change in net unearned premiums | ( | ) | ( | ) | |||||||||||
Net earned premiums | |||||||||||||||
Net investment income | |||||||||||||||
Net realized and unrealized gains (losses) on investments | ( | ) | ( | ) | |||||||||||
Other income | |||||||||||||||
Total revenues | |||||||||||||||
Expenses | |||||||||||||||
Losses and loss adjustment expenses | |||||||||||||||
Other operating expenses | |||||||||||||||
Other expenses | |||||||||||||||
Interest expense | |||||||||||||||
Amortization of intangible assets | |||||||||||||||
Total expenses | |||||||||||||||
Income before taxes | |||||||||||||||
Income tax expense | |||||||||||||||
Net income | |||||||||||||||
Other comprehensive income (loss): | |||||||||||||||
Net unrealized gains (losses), net of taxes of $1,865 and $3,311 in 2019 and $(183) and $(727) in 2018 | ( | ) | ( | ) | |||||||||||
Total comprehensive income | $ | $ | $ | $ | |||||||||||
Per share data: | |||||||||||||||
Basic earnings per share | $ | $ | $ | $ | |||||||||||
Diluted earnings per share | $ | $ | $ | $ | |||||||||||
Dividend declared per share | $ | $ | $ | $ | |||||||||||
Weighted-average common shares outstanding: | |||||||||||||||
Basic | |||||||||||||||
Diluted |
Number of Common Shares Outstanding | Common Shares (Par) | Preferred Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||
(in thousands, except share amounts) | ||||||||||||||||||||||||||
Balances at March 31, 2019 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | |||||||||||||||||||||
Dividends | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||
Exercise of stock options | — | — | — | — | ||||||||||||||||||||||
Vesting of RSUs | — | — | — | — | ||||||||||||||||||||||
Compensation expense under share incentive plans | — | — | — | — | — | |||||||||||||||||||||
Balances at June 30, 2019 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Balances at December 31, 2018 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | |||||||||||||||||||||
Dividends | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||
Exercise of stock options | — | — | — | — | ||||||||||||||||||||||
Vesting of RSUs | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||
Compensation expense under share incentive plans | — | — | — | — | — | |||||||||||||||||||||
Adoption of ASU No. 2016-02, derecognition of build-to-suit lease, (see Note 1) | — | — | — | — | — | |||||||||||||||||||||
Balances at June 30, 2019 | $ | $ | $ | $ | $ | $ |
Number of Common Shares Outstanding | Common Shares (Par) | Preferred Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||
(in thousands, except share amounts) | ||||||||||||||||||||||||||
Balances at March 31, 2018 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||
Dividends | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||
Exercise of stock options | — | — | — | — | ||||||||||||||||||||||
Vesting of RSUs | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||
Compensation expense under share incentive plans | — | — | — | — | — | |||||||||||||||||||||
Balances at June 30, 2018 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
Balances at December 31, 2017 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||
Dividends | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||
Exercise of stock options | — | — | — | — | ||||||||||||||||||||||
Vesting of RSUs | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||
Compensation expense under share incentive plans | — | — | — | — | — | |||||||||||||||||||||
Cumulative effect of adoption of ASU No. 2016-01, net of taxes | — | — | — | ( | ) | |||||||||||||||||||||
Cumulative effect of adoption of ASU No. 2018-02 | — | — | — | — | ( | ) | ||||||||||||||||||||
Balances at June 30, 2018 | $ | $ | $ | $ | $ | ( | ) | $ |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
(in thousands) | |||||||
Operating activities | |||||||
Net cash provided by operating activities | $ | $ | |||||
Investing activities | |||||||
Securities available-for-sale: | |||||||
Purchases – fixed maturity securities | ( | ) | ( | ) | |||
Sales – fixed maturity securities | |||||||
Maturities and calls – fixed maturity securities | |||||||
Purchases – equity securities | ( | ) | ( | ) | |||
Sales – equity securities | |||||||
Bank loan participations: | |||||||
Purchases | ( | ) | ( | ) | |||
Sales | |||||||
Maturities | |||||||
Other invested assets: | |||||||
Purchases | ( | ) | |||||
Return of capital | |||||||
Redemptions | |||||||
Short-term investments, net | |||||||
Securities receivable or payable, net | |||||||
Purchases of property and equipment | ( | ) | ( | ) | |||
Net cash used in investing activities | ( | ) | ( | ) | |||
Financing activities | |||||||
Senior debt repayment | ( | ) | |||||
Dividends paid | ( | ) | ( | ) | |||
Issuance of common shares under equity incentive plans | |||||||
Common share repurchases | ( | ) | ( | ) | |||
Other financing activities | ( | ) | |||||
Net cash used in financing activities | ( | ) | ( | ) | |||
Change in cash and cash equivalents | ( | ) | |||||
Cash and cash equivalents at beginning of period | |||||||
Cash and cash equivalents at end of period | $ | $ | |||||
Supplemental information | |||||||
Interest paid | $ | $ |
• | James River Group Holdings UK Limited (“James River UK”) is an insurance holding company formed in 2015 in the United Kingdom (“U.K.”). JRG Holdings contributed James River Group, Inc. (“James River Group”), a U.S. insurance holding company, to James River UK in 2015. |
• | James River Group is a Delaware domiciled insurance holding company formed in 2002 which owns all of the Company’s U.S.-based subsidiaries, either directly or indirectly through one of its wholly-owned U.S. subsidiaries. James River Group oversees the Company’s U.S. insurance operations and maintains all of the outstanding debt in the U.S. |
• | James River Insurance Company is an Ohio domiciled excess and surplus lines insurance company that, with its wholly-owned insurance subsidiary, James River Casualty Company, is authorized to write business in every state and the District of Columbia. |
• | Falls Lake National Insurance Company (“Falls Lake National”) is an Ohio domiciled insurance company which wholly owns Stonewood Insurance Company (“Stonewood Insurance”), a North Carolina domiciled company, and Falls Lake Fire and Casualty Company, a California domiciled company. Falls Lake National and its subsidiaries primarily write specialty admitted fronting and program business and individual risk workers' compensation insurance. |
• | JRG Reinsurance Company Ltd. (“JRG Re”) was formed in 2007 and commenced operations in 2008. JRG Re, a Bermuda domiciled reinsurer, primarily provides non-catastrophe casualty reinsurance to U.S. third parties and, through December 31, 2017, to the Company’s U.S.-based insurance subsidiaries. |
• | Carolina Re Ltd (“Carolina Re”) was formed in 2018 and as of January 1, 2018 provides reinsurance to the Company’s U.S.-based insurance subsidiaries. Carolina Re is also the cedent on a stop loss reinsurance treaty with JRG Re. |
Years ending December 31, | (in thousands) | ||
2019 | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
Thereafter | |||
Total lease payments | |||
Less imputed interest | ( | ) | |
Total operating lease liabilities | $ |
Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
June 30, 2019 | |||||||||||||||
Fixed maturity securities: | |||||||||||||||
State and municipal | $ | $ | $ | ( | ) | $ | |||||||||
Residential mortgage-backed | ( | ) | |||||||||||||
Corporate | ( | ) | |||||||||||||
Commercial mortgage and asset-backed | ( | ) | |||||||||||||
U.S. Treasury securities and obligations guaranteed by the U.S. government | ( | ) | |||||||||||||
Redeemable preferred stock | |||||||||||||||
Total fixed maturity securities, available-for-sale | $ | $ | $ | ( | ) | $ | |||||||||
December 31, 2018 | |||||||||||||||
Fixed maturity securities: | |||||||||||||||
State and municipal | $ | $ | $ | ( | ) | $ | |||||||||
Residential mortgage-backed | ( | ) | |||||||||||||
Corporate | ( | ) | |||||||||||||
Commercial mortgage and asset-backed | ( | ) | |||||||||||||
U.S. Treasury securities and obligations guaranteed by the U.S. government | ( | ) | |||||||||||||
Redeemable preferred stock | ( | ) | |||||||||||||
Total fixed maturity securities, available-for-sale | $ | $ | $ | ( | ) | $ |
Cost or Amortized Cost | Fair Value | ||||||
(in thousands) | |||||||
One year or less | $ | $ | |||||
After one year through five years | |||||||
After five years through ten years | |||||||
After ten years | |||||||
Residential mortgage-backed | |||||||
Commercial mortgage and asset-backed | |||||||
Redeemable preferred stock | |||||||
Total | $ | $ |
Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
June 30, 2019 | |||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||
State and municipal | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||
Residential mortgage-backed | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Corporate | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Commercial mortgage and asset-backed | ( | ) | ( | ) | ( | ) | |||||||||||||||||
U.S. Treasury securities and obligations guaranteed by the U.S. government | ( | ) | ( | ) | |||||||||||||||||||
Total fixed maturity securities, available-for-sale | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||
December 31, 2018 | |||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||
State and municipal | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||
Residential mortgage-backed | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Corporate | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Commercial mortgage and asset-backed | ( | ) | ( | ) | ( | ) | |||||||||||||||||
U.S. Treasury securities and obligations guaranteed by the U.S. government | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Redeemable preferred stock | ( | ) | ( | ) | |||||||||||||||||||
Total fixed maturity securities, available-for-sale | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Fixed maturity securities: | |||||||||||||||
Gross realized gains | $ | $ | $ | $ | |||||||||||
Gross realized losses | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
( | ) | ||||||||||||||
Bank loan participations: | |||||||||||||||
Gross realized gains | |||||||||||||||
Gross realized losses | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
( | ) | ( | ) | ( | ) | ||||||||||
Equity securities: | |||||||||||||||
Gross realized gains | |||||||||||||||
Gross realized losses | ( | ) | ( | ) | ( | ) | |||||||||
Changes in fair values of equity securities | ( | ) | |||||||||||||
( | ) | ||||||||||||||
Short-term investments and other: | |||||||||||||||
Gross realized gains | |||||||||||||||
Gross realized losses | ( | ) | |||||||||||||
( | ) | ||||||||||||||
Total | $ | $ | ( | ) | $ | $ | ( | ) |
Carrying Value | Investment Income | ||||||||||||||||||||||
June 30, | December 31, | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Renewable energy LLCs (a) | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||
Renewable energy notes receivable (b) | |||||||||||||||||||||||
Limited partnerships (c) | |||||||||||||||||||||||
Bank holding companies (d) | |||||||||||||||||||||||
Total other invested assets | $ | $ | $ | $ | $ | $ |
(a) | The Company’s Corporate and Other segment owns equity interests ranging from |
(b) | The Company's Corporate and Other segment has invested in notes receivable for renewable energy projects. At June 30, 2019, the Company holds an $ |
(c) | The Company owns investments in limited partnerships that invest in concentrated portfolios including publicly-traded small cap equities, loans of middle market private equity sponsored companies, equity tranches of collateralized loan obligations (“CLOs”), and tranches of distressed home loans. Income from the partnerships is recognized under the equity method of accounting. The Company’s Corporate and Other segment held an investment in a limited partnership with a carrying value of $ |
(d) | The Company's Corporate and Other segment holds $ |
June 30, 2019 | December 31, 2018 | ||||||||||||||||
Life (Years) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
($ in thousands) | |||||||||||||||||
Intangible Assets | |||||||||||||||||
Trademarks | Indefinite | $ | $ | — | $ | $ | — | ||||||||||
Insurance licenses and authorities | Indefinite | — | — | ||||||||||||||
Identifiable intangibles not subject to amortization | — | — | |||||||||||||||
Broker relationships | |||||||||||||||||
Identifiable intangible assets subject to amortization | |||||||||||||||||
$ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||
Net income to shareholders | $ | $ | $ | $ | |||||||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | |||||||||||||||
Common share equivalents | |||||||||||||||
Diluted | |||||||||||||||
Earnings per share: | |||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||
Common share equivalents | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Diluted | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period | $ | $ | $ | $ | |||||||||||
Add: Incurred losses and loss adjustment expenses net of reinsurance: | |||||||||||||||
Current year | |||||||||||||||
Prior years | ( | ) | |||||||||||||
Total incurred losses and loss and adjustment expenses | |||||||||||||||
Deduct: Loss and loss adjustment expense payments net of reinsurance: | |||||||||||||||
Current year | |||||||||||||||
Prior years | |||||||||||||||
Total loss and loss adjustment expense payments | |||||||||||||||
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at end of period | |||||||||||||||
Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period | |||||||||||||||
Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Unrealized gains (losses) arising during the period, before U.S. income taxes | $ | $ | ( | ) | $ | $ | ( | ) | |||||||
U.S. income taxes | ( | ) | ( | ) | |||||||||||
Unrealized gains (losses) arising during the period, net of U.S. income taxes | ( | ) | ( | ) | |||||||||||
Less reclassification adjustment: | |||||||||||||||
Net realized investment gains (losses) | ( | ) | |||||||||||||
U.S. income taxes | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Reclassification adjustment for investment gains (losses) realized in net income | ( | ) | |||||||||||||
Other comprehensive income (loss) | $ | $ | ( | ) | $ | $ | ( | ) |
Excess and Surplus Lines | Specialty Admitted Insurance | Casualty Reinsurance | Corporate and Other | Total | |||||||||||||||
(in thousands) | |||||||||||||||||||
Three Months Ended June 30, 2019 | |||||||||||||||||||
Gross written premiums | $ | $ | $ | $ | $ | ||||||||||||||
Net earned premiums | |||||||||||||||||||
Underwriting profit (loss) of insurance segments | ( | ) | |||||||||||||||||
Net investment income | |||||||||||||||||||
Interest expense | |||||||||||||||||||
Segment revenues | |||||||||||||||||||
Segment goodwill | |||||||||||||||||||
Segment assets | |||||||||||||||||||
Three Months Ended June 30, 2018 | |||||||||||||||||||
Gross written premiums | $ | $ | $ | $ | $ | ||||||||||||||
Net earned premiums | |||||||||||||||||||
Underwriting profit of insurance segments | |||||||||||||||||||
Net investment income | |||||||||||||||||||
Interest expense | |||||||||||||||||||
Segment revenues | |||||||||||||||||||
Segment goodwill | |||||||||||||||||||
Segment assets |
Excess and Surplus Lines | Specialty Admitted Insurance | Casualty Reinsurance | Corporate and Other | Total | |||||||||||||||
(in thousands) | |||||||||||||||||||
Six Months Ended June 30, 2019 | |||||||||||||||||||
Gross written premiums | $ | $ | $ | $ | $ | ||||||||||||||
Net earned premiums | |||||||||||||||||||
Underwriting profit of insurance segments | |||||||||||||||||||
Net investment income | |||||||||||||||||||
Interest expense | |||||||||||||||||||
Segment revenues | |||||||||||||||||||
Segment goodwill | |||||||||||||||||||
Segment assets | |||||||||||||||||||
Six Months Ended June 30, 2018 | |||||||||||||||||||
Gross written premiums | $ | $ | $ | $ | $ | ||||||||||||||
Net earned premiums | |||||||||||||||||||
Underwriting profit of insurance segments | |||||||||||||||||||
Net investment income | |||||||||||||||||||
Interest expense | |||||||||||||||||||
Segment revenues | |||||||||||||||||||
Segment goodwill | |||||||||||||||||||
Segment assets |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Underwriting profit (loss) of the insurance segments: | |||||||||||||||
Excess and Surplus Lines | $ | $ | $ | $ | |||||||||||
Specialty Admitted Insurance | |||||||||||||||
Casualty Reinsurance | ( | ) | |||||||||||||
Total underwriting profit of insurance segments | |||||||||||||||
Other operating expenses of the Corporate and Other segment | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Underwriting profit | |||||||||||||||
Net investment income | |||||||||||||||
Net realized and unrealized gains (losses) on investments | ( | ) | ( | ) | |||||||||||
Amortization of intangible assets | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other income and expenses | ( | ) | ( | ) | |||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Income before taxes | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Amortization of policy acquisition costs | $ | $ | $ | $ | |||||||||||
Other underwriting expenses of the operating segments | |||||||||||||||
Other operating expenses of the Corporate and Other segment | |||||||||||||||
Total | $ | $ | $ | $ |
Fair Value Measurements Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets Level 1 | Significant Other Observable Inputs Level 2 | Significant Unobservable Inputs Level 3 | Total | ||||||||||||
(in thousands) | |||||||||||||||
Fixed maturity securities, available-for-sale: | |||||||||||||||
State and municipal | $ | $ | $ | $ | |||||||||||
Residential mortgage-backed | |||||||||||||||
Corporate | |||||||||||||||
Commercial mortgage and asset-backed | |||||||||||||||
U.S. Treasury securities and obligations guaranteed by the U.S. government | |||||||||||||||
Redeemable preferred stock | |||||||||||||||
Total fixed maturity securities, available-for-sale | $ | $ | $ | $ | |||||||||||
Equity securities: | |||||||||||||||
Preferred stock | |||||||||||||||
Common stock | |||||||||||||||
Total equity securities | $ | $ | $ | $ | |||||||||||
Short-term investments | $ | $ | $ | $ |
Fair Value Measurements Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets Level 1 | Significant Other Observable Inputs Level 2 | Significant Unobservable Inputs Level 3 | Total | ||||||||||||
(in thousands) | |||||||||||||||
Fixed maturity securities, available-for-sale: | |||||||||||||||
State and municipal | $ | $ | $ | $ | |||||||||||
Residential mortgage-backed | |||||||||||||||
Corporate | |||||||||||||||
Commercial mortgage and asset-backed | |||||||||||||||
U.S. Treasury securities and obligations guaranteed by the U.S. government | |||||||||||||||
Redeemable preferred stock | |||||||||||||||
Total fixed maturity securities, available-for-sale | $ | $ | $ | $ | |||||||||||
Equity securities: | |||||||||||||||
Preferred stock | |||||||||||||||
Common stock | |||||||||||||||
Total equity securities | $ | $ | $ | $ | |||||||||||
Short-term investments | $ | $ | $ | $ |
Fair Value Measurements Using | |||||||||||||||
Quoted Prices In Active Markets for Identical Assets Level 1 | Significant Other Observable Inputs Level 2 | Significant Unobservable Inputs Level 3 | Total | ||||||||||||
(in thousands) | |||||||||||||||
June 30, 2019 | |||||||||||||||
Bank loan participations held-for-investment | $ | $ | $ | $ | |||||||||||
December 31, 2018 | |||||||||||||||
Bank loan participations held-for-investment | $ | $ | $ | $ |
June 30, 2019 | December 31, 2018 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
Assets | |||||||||||||||
Fixed maturity securities, available-for-sale | $ | $ | $ | $ | |||||||||||
Equity securities | |||||||||||||||
Bank loan participations held-for-investment | |||||||||||||||
Cash and cash equivalents | |||||||||||||||
Short-term investments | |||||||||||||||
Other invested assets – notes receivable | |||||||||||||||
Liabilities | |||||||||||||||
Senior debt | |||||||||||||||
Junior subordinated debt |
Date of Declaration | Dividend per Common Share | Payable to Shareholders of Record on | Payment Date | Total Amount | ||||||||
2019 | ||||||||||||
February 20, 2019 | $ | March 11, 2019 | March 29, 2019 | $ | ||||||||
April 30, 2019 | $ | June 10, 2019 | June 28, 2019 | $ | ||||||||
$ | $ | |||||||||||
2018 | ||||||||||||
February 22, 2018 | $ | March 12, 2018 | March 30, 2018 | $ | ||||||||
May 1, 2018 | $ | June 11, 2018 | June 29, 2018 | $ | ||||||||
$ | $ |
Six Months Ended June 30, | |||||||||||||
2019 | 2018 | ||||||||||||
Shares | Weighted- Average Exercise Price | Shares | Weighted- Average Exercise Price | ||||||||||
Outstanding: | |||||||||||||
Beginning of period | $ | $ | |||||||||||
Granted | $ | $ | |||||||||||
Exercised | ( | ) | $ | ( | ) | $ | |||||||
Forfeited | ( | ) | $ | ( | ) | $ | |||||||
End of period | $ | $ | |||||||||||
Exercisable, end of period | $ | $ |
Six Months Ended June 30, | |||||||||||||
2019 | 2018 | ||||||||||||
Shares | Weighted- Average Grant Date Fair Value | Shares | Weighted- Average Grant Date Fair Value | ||||||||||
Unvested, beginning of period | $ | $ | |||||||||||
Granted | $ | $ | |||||||||||
Vested | ( | ) | $ | ( | ) | $ | |||||||
Forfeited | ( | ) | $ | ( | ) | $ | |||||||
Unvested, end of period | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Share based compensation expense | $ | $ | $ | $ | |||||||||||
U.S. tax benefit on share based compensation expense |
• | The Excess and Surplus Lines segment offers commercial excess and surplus lines liability and property insurance in every U.S. state, the District of Columbia, Puerto Rico and the U.S. Virgin Islands through James River Insurance Company and its wholly-owned subsidiary, James River Casualty Company; |
• | The Specialty Admitted Insurance segment focuses on niche classes within the standard insurance markets, such as workers’ compensation coverage for residential contractors, light manufacturing operations, transportation workers and healthcare workers and fronting business, where we retain a small percentage of the risk and seek to earn fee income by allowing other carriers and producers to use our licensure, ratings and infrastructure. This segment has admitted licenses and the authority to write excess and surplus lines insurance in 49 states and the District of Columbia; |
• | The Casualty Reinsurance segment primarily provides proportional and working layer casualty reinsurance to third parties (primarily through reinsurance intermediaries) and stop loss reinsurance to Carolina Re Ltd (“Carolina Re”), through JRG Reinsurance Company Ltd. (“JRG Re”), both Bermuda-based reinsurance companies. JRG Re has also in the past provided reinsurance to the Company's U.S. based insurance subsidiaries through a quota-share reinsurance agreement; Carolina Re was formed in 2018 to do this as well; and |
• | The Corporate and Other segment consists of the management and treasury activities of our holding companies, interest expense associated with our debt, and expenses of our holding companies, including public company expenses, that are not reimbursed by our insurance segments. |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | ||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
($ in thousands) | |||||||||||||||||||||
Gross written premiums | $ | 380,003 | $ | 293,378 | 29.5 | % | $ | 707,337 | $ | 591,494 | 19.6 | % | |||||||||
Net retention (1) | 63.1 | % | 64.3 | % | 63.3 | % | 67.6 | % | |||||||||||||
Net written premiums | $ | 239,910 | $ | 188,606 | 27.2 | % | $ | 447,651 | $ | 399,584 | 12.0 | % | |||||||||
Net earned premiums | $ | 199,114 | $ | 208,210 | (4.4 | )% | $ | 389,266 | $ | 409,152 | (4.9 | )% | |||||||||
Losses and loss adjustment expenses | (147,053 | ) | (154,595 | ) | (4.9 | )% | (286,980 | ) | (298,367 | ) | (3.8 | )% | |||||||||
Other operating expenses | (42,486 | ) | (48,088 | ) | (11.6 | )% | (85,565 | ) | (98,023 | ) | (12.7 | )% | |||||||||
Underwriting profit (2), (3) | 9,575 | 5,527 | 73.2 | % | 16,721 | 12,762 | 31.0 | % | |||||||||||||
Net investment income | 17,535 | 16,135 | 8.7 | % | 36,966 | 29,391 | 25.8 | % | |||||||||||||
Net realized and unrealized gains (losses) on investments | 1,063 | (64 | ) | ‒ | 2,688 | (874 | ) | ‒ | |||||||||||||
Other income and expense | (378 | ) | 4 | ‒ | (132 | ) | 108 | ‒ | |||||||||||||
Interest expense | (2,684 | ) | (2,946 | ) | (8.9 | )% | (5,492 | ) | (5,468 | ) | 0.4 | % | |||||||||
Amortization of intangible assets | (149 | ) | (149 | ) | ‒ | (298 | ) | (298 | ) | ‒ | |||||||||||
Income before taxes | 24,962 | 18,507 | 34.9 | % | 50,453 | 35,621 | 41.6 | % | |||||||||||||
Income tax expense | 4,655 | 1,523 | 205.6 | % | 7,418 | 3,004 | 146.9 | % | |||||||||||||
Net income | $ | 20,307 | $ | 16,984 | 19.6 | % | $ | 43,035 | $ | 32,617 | 31.9 | % | |||||||||
Adjusted net operating income (4) | $ | 20,177 | $ | 17,569 | 14.8 | % | $ | 41,890 | $ | 34,138 | 22.7 | % | |||||||||
Ratios: | |||||||||||||||||||||
Loss ratio | 73.9 | % | 74.2 | % | 73.7 | % | 72.9 | % | |||||||||||||
Expense ratio | 21.3 | % | 23.1 | % | 22.0 | % | 24.0 | % | |||||||||||||
Combined ratio | 95.2 | % | 97.3 | % | 95.7 | % | 96.9 | % |
(1) | Net retention is defined as the ratio of net written premiums to gross written premiums. |
(2) | Underwriting profit is a non-GAAP measure. See “Reconciliation of Non-GAAP Measures” for a reconciliation to income before tax and for additional information. |
(3) | Included in underwriting results for the three and six months ended June 30, 2019 is gross fee income of $6.2 million and $12.6 million, respectively ($7.4 million and $15.6 million for the same periods in the prior year). |
(4) | Adjusted net operating income is a non-GAAP measure. See “Reconciliation of Non-GAAP Measures” for reconciliation to net income and for additional information. |
• | Net realized and unrealized investment gains (losses) of $1.1 million and $(64,000) for the three months ended June 30, 2019 and 2018, respectively. See “— Investing Results" for more information on these realized and unrealized investment gains (losses). |
• | Interest expense of $457,000 for the three months ended June 30, 2018 relating to finance expenses in connection with a minority interest in a real estate partnership pursuant to which we were previously deemed an owner for accounting purposes. Effective with the Company's adoption of ASU 2016-02, Leases (Topic 842) on January 1, 2019, the Company is no longer deemed the owner for accounting purposes and there is no comparable expense for the three months ended June 30, 2019. |
Three Months Ended June 30, | |||||||||||||||
2019 | 2018 | ||||||||||||||
Income Before Taxes | Net Income | Income Before Taxes | Net Income | ||||||||||||
($ in thousands) | |||||||||||||||
Income as reported | $ | 24,962 | $ | 20,307 | $ | 18,507 | $ | 16,984 | |||||||
Net realized and unrealized investment (gains) losses | (1,063 | ) | (670 | ) | 64 | 98 | |||||||||
Other expenses | 683 | 540 | 93 | 126 | |||||||||||
Interest expense on leased building the Company was previously deemed to own for accounting purposes | — | — | 457 | 361 | |||||||||||
Adjusted net operating income | $ | 24,582 | $ | 20,177 | $ | 19,121 | $ | 17,569 |
• | Net realized and unrealized investment gains (losses) of $2.7 million and $(874,000) for the six months ended June 30, 2019 and 2018, respectively. See “— Investing Results" for more information on these realized and unrealized investment gains (losses). |
• | Interest expense of $775,000 for the six months ended June 30, 2018 relating to finance expenses in connection with a minority interest in a real estate partnership pursuant to which we were previously deemed an owner for accounting purposes. Effective with the Company's adoption of ASU 2016-02, Leases (Topic 842) on January 1, 2019, the Company is no longer deemed the owner for accounting purposes and there is no comparable expense for the six months ended June 30, 2019. |
Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | ||||||||||||||
Income Before Taxes | Net Income | Income Before Taxes | Net Income | ||||||||||||
($ in thousands) | |||||||||||||||
Income as reported | $ | 50,453 | $ | 43,035 | $ | 35,621 | $ | 32,617 | |||||||
Net realized and unrealized investment (gains) losses | (2,688 | ) | (1,685 | ) | 874 | 763 | |||||||||
Other expenses | 683 | 540 | 97 | 146 | |||||||||||
Interest expense on leased building the Company was previously deemed to own for accounting purposes | — | — | 775 | 612 | |||||||||||
Adjusted net operating income | $ | 48,448 | $ | 41,890 | $ | 37,367 | $ | 34,138 |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | ||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
($ in thousands) | |||||||||||||||||||||
Gross written premiums: | |||||||||||||||||||||
Excess and Surplus Lines | $ | 260,277 | $ | 165,398 | 57.4 | % | $ | 446,826 | $ | 332,884 | 34.2 | % | |||||||||
Specialty Admitted Insurance | 89,472 | 97,100 | (7.9 | )% | 192,425 | 184,501 | 4.3 | % | |||||||||||||
Casualty Reinsurance | 30,254 | 30,880 | (2.0 | )% | 68,086 | 74,109 | (8.1 | )% | |||||||||||||
$ | 380,003 | $ | 293,378 | 29.5 | % | $ | 707,337 | $ | 591,494 | 19.6 | % | ||||||||||
Net written premiums: | |||||||||||||||||||||
Excess and Surplus Lines | $ | 195,624 | $ | 143,235 | 36.6 | % | $ | 350,485 | $ | 297,166 | 17.9 | % | |||||||||
Specialty Admitted Insurance | 14,034 | 14,487 | (3.1 | )% | 29,055 | 28,305 | 2.6 | % | |||||||||||||
Casualty Reinsurance | 30,252 | 30,884 | (2.0 | )% | 68,111 | 74,113 | (8.1 | )% | |||||||||||||
$ | 239,910 | $ | 188,606 | 27.2 | % | $ | 447,651 | $ | 399,584 | 12.0 | % | ||||||||||
Net earned premiums: | |||||||||||||||||||||
Excess and Surplus Lines | $ | 150,921 | $ | 139,127 | 8.5 | % | $ | 292,593 | $ | 269,098 | 8.7 | % | |||||||||
Specialty Admitted Insurance | 13,086 | 14,266 | (8.3 | )% | 25,446 | 27,606 | (7.8 | )% | |||||||||||||
Casualty Reinsurance | 35,107 | 54,817 | (36.0 | )% | 71,227 | 112,448 | (36.7 | )% | |||||||||||||
$ | 199,114 | $ | 208,210 | (4.4 | )% | $ | 389,266 | $ | 409,152 | (4.9 | )% |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | ||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
($ in thousands) | |||||||||||||||||||||
Commercial Auto | $ | 107,543 | $ | 81,127 | 32.6 | % | $ | 199,545 | $ | 158,339 | 26.0 | % | |||||||||
General Casualty | 43,697 | 16,726 | 161.3 | % | 64,980 | 31,278 | 107.7 | % | |||||||||||||
Manufacturers & Contractors | 28,026 | 22,034 | 27.2 | % | 51,537 | 39,634 | 30.0 | % | |||||||||||||
Excess Casualty | 31,476 | 14,870 | 111.7 | % | 46,646 | 24,666 | 89.1 | % | |||||||||||||
Excess Property | 12,483 | 6,116 | 104.1 | % | 17,260 | 9,535 | 81.0 | % | |||||||||||||
Energy | 10,712 | 6,607 | 62.1 | % | 17,119 | 18,127 | (5.6 | )% | |||||||||||||
Allied Health | 5,377 | 2,421 | 122.1 | % | 14,633 | 23,543 | (37.8 | )% | |||||||||||||
All other divisions | 20,963 | 15,497 | 35.3 | % | 35,106 | 27,762 | 26.5 | % | |||||||||||||
Excess and Surplus Lines gross written premium | $ | 260,277 | $ | 165,398 | 57.4 | % | $ | 446,826 | $ | 332,884 | 34.2 | % |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | ||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
($ in thousands) | |||||||||||||||||||||
Individual risk workers’ compensation premium | $ | 15,988 | $ | 12,808 | 24.8 | % | $ | 32,981 | $ | 25,395 | 29.9 | % | |||||||||
Fronting and program premium | 73,484 | 84,292 | (12.8 | )% | 159,444 | 159,106 | 0.2 | % | |||||||||||||
Specialty Admitted gross written premium | $ | 89,472 | $ | 97,100 | (7.9 | )% | $ | 192,425 | $ | 184,501 | 4.3 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Excess and Surplus Lines | 75.2 | % | 86.6 | % | 78.4 | % | 89.3 | % | |||
Specialty Admitted Insurance | 15.7 | % | 14.9 | % | 15.1 | % | 15.3 | % | |||
Casualty Reinsurance | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||
Total | 63.1 | % | 64.3 | % | 63.3 | % | 67.6 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Excess and Surplus Lines | 89.5 | % | 92.7 | % | 90.1 | % | 92.0 | % | |||
Specialty Admitted Insurance | 90.1 | % | 93.1 | % | 88.5 | % | 90.5 | % | |||
Casualty Reinsurance | 100.3 | % | 96.8 | % | 99.7 | % | 96.9 | % | |||
Total | 95.2 | % | 97.3 | % | 95.7 | % | 96.9 | % |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | ||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
($ in thousands) | |||||||||||||||||||||
Gross written premiums | $ | 260,277 | $ | 165,398 | 57.4 | % | $ | 446,826 | $ | 332,884 | 34.2 | % | |||||||||
Net written premiums | $ | 195,624 | $ | 143,235 | 36.6 | % | $ | 350,485 | $ | 297,166 | 17.9 | % | |||||||||
Net earned premiums | $ | 150,921 | $ | 139,127 | 8.5 | % | $ | 292,593 | $ | 269,098 | 8.7 | % | |||||||||
Losses and loss adjustment expenses | (115,637 | ) | (109,607 | ) | 5.5 | % | (223,842 | ) | (210,226 | ) | 6.5 | % | |||||||||
Underwriting expenses | (19,474 | ) | (19,403 | ) | 0.4 | % | (39,839 | ) | (37,456 | ) | 6.4 | % | |||||||||
Underwriting profit (1), (2) | $ | 15,810 | $ | 10,117 | 56.3 | % | $ | 28,912 | $ | 21,416 | 35.0 | % | |||||||||
Ratios: | |||||||||||||||||||||
Loss ratio | 76.6 | % | 78.8 | % | 76.5 | % | 78.1 | % | |||||||||||||
Expense ratio | 12.9 | % | 13.9 | % | 13.6 | % | 13.9 | % | |||||||||||||
Combined ratio | 89.5 | % | 92.7 | % | 90.1 | % | 92.0 | % |
(1) | Underwriting Profit is a non-GAAP Measure. See “Reconciliation of Non-GAAP Measures” for a reconciliation to income before tax and for additional information. |
(2) | Underwriting results include gross fee income of $2.3 million and $5.0 million for the three and six months ended June 30, 2019, respectively ($3.7 million and $8.5 million for the same periods in the prior year). |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | ||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
($ in thousands) | |||||||||||||||||||||
Gross written premiums | $ | 89,472 | $ | 97,100 | (7.9 | )% | $ | 192,425 | $ | 184,501 | 4.3 | % | |||||||||
Net written premiums | $ | 14,034 | $ | 14,487 | (3.1 | )% | $ | 29,055 | $ | 28,305 | 2.6 | % | |||||||||
Net earned premiums | $ | 13,086 | $ | 14,266 | (8.3 | )% | $ | 25,446 | $ | 27,606 | (7.8 | )% | |||||||||
Losses and loss adjustment expenses | (8,402 | ) | (9,426 | ) | (10.9 | )% | (15,604 | ) | (17,037 | ) | (8.4 | )% | |||||||||
Underwriting expenses | (3,386 | ) | (3,852 | ) | (12.1 | )% | (6,921 | ) | (7,958 | ) | (13.0 | )% | |||||||||
Underwriting profit (1), (2) | $ | 1,298 | $ | 988 | 31.4 | % | $ | 2,921 | $ | 2,611 | 11.9 | % | |||||||||
Ratios: | |||||||||||||||||||||
Loss ratio | 64.2 | % | 66.1 | % | 61.3 | % | 61.7 | % | |||||||||||||
Expense ratio | 25.9 | % | 27.0 | % | 27.2 | % | 28.8 | % | |||||||||||||
Combined ratio | 90.1 | % | 93.1 | % | 88.5 | % | 90.5 | % |
(1) | Underwriting Profit is a non-GAAP Measure. See “Reconciliation of Non-GAAP Measures” for a reconciliation to income before tax and for additional information. |
(2) | Underwriting results include gross fee income of $3.8 million and $7.6 million for the three and six months ended June 30, 2019, respectively ($3.7 million and $7.1 million for the same periods in the prior year). |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | ||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
($ in thousands) | |||||||||||||||||||||
Gross written premiums | $ | 30,254 | $ | 30,880 | (2.0 | )% | $ | 68,086 | $ | 74,109 | (8.1 | )% | |||||||||
Net written premiums | $ | 30,252 | $ | 30,884 | (2.0 | )% | $ | 68,111 | $ | 74,113 | (8.1 | )% | |||||||||
Net earned premiums | $ | 35,107 | $ | 54,817 | (36.0 | )% | $ | 71,227 | $ | 112,448 | (36.7 | )% | |||||||||
Losses and loss adjustment expenses | (23,014 | ) | (35,562 | ) | (35.3 | )% | (47,534 | ) | (71,104 | ) | (33.1 | )% | |||||||||
Underwriting expenses | (12,193 | ) | (17,526 | ) | (30.4 | )% | (23,466 | ) | (37,871 | ) | (38.0 | )% | |||||||||
Underwriting (loss) profit (1) | $ | (100 | ) | $ | 1,729 | ‒ | $ | 227 | $ | 3,473 | (93.5 | )% | |||||||||
Ratios: | |||||||||||||||||||||
Loss ratio | 65.6 | % | 64.9 | % | 66.7 | % | 63.2 | % | |||||||||||||
Expense ratio | 34.7 | % | 31.9 | % | 33.0 | % | 33.7 | % | |||||||||||||
Combined ratio | 100.3 | % | 96.8 | % | 99.7 | % | 96.9 | % |
(1) | Underwriting Profit is a non-GAAP Measure. See “Reconciliation of Non-GAAP Measures” for a reconciliation to income before tax and for additional information. |
Gross Reserves at June 30, 2019 | |||||||||||
Case | IBNR | Total | |||||||||
($ in thousands) | |||||||||||
Excess and Surplus Lines | $ | 393,962 | $ | 651,291 | $ | 1,045,253 | |||||
Specialty Admitted Insurance | 167,970 | 297,180 | 465,150 | ||||||||
Casualty Reinsurance | 106,538 | 166,393 | 272,931 | ||||||||
Total | $ | 668,470 | $ | 1,114,864 | $ | 1,783,334 |
Net Reserves at June 30, 2019 | |||||||||||
Case | IBNR | Total | |||||||||
($ in thousands) | |||||||||||
Excess and Surplus Lines | $ | 364,208 | $ | 514,965 | $ | 879,173 | |||||
Specialty Admitted Insurance | 34,549 | 55,281 | 89,830 | ||||||||
Casualty Reinsurance | 103,539 | 165,388 | 268,927 | ||||||||
Total | $ | 502,296 | $ | 735,634 | $ | 1,237,930 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||||||||
($ in thousands) | |||||||||||||||||||||
Renewable energy LLCs | $ | (13 | ) | $ | 530 | ‒ | $ | 908 | $ | 1,741 | (47.8 | )% | |||||||||
Other private investments | 1,142 | 1,506 | (24.2 | )% | 3,625 | 2,116 | 71.3 | % | |||||||||||||
Other invested assets | 1,129 | 2,036 | (44.5 | )% | 4,533 | 3,857 | 17.5 | % | |||||||||||||
All other net investment income | 16,406 | 14,099 | 16.4 | % | 32,433 | 25,534 | 27.0 | % | |||||||||||||
Total net investment income | $ | 17,535 | $ | 16,135 | 8.7 | % | $ | 36,966 | $ | 29,391 | 25.8 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
($ in thousands) | |||||||||||||||
Fixed maturity securities | $ | 10,157 | $ | 7,733 | $ | 19,647 | $ | 15,101 | |||||||
Bank loan participations | 5,162 | 5,435 | 10,226 | 8,552 | |||||||||||
Equity securities | 1,295 | 1,346 | 2,632 | 2,674 | |||||||||||
Other invested assets | 1,129 | 2,036 | 4,533 | 3,857 | |||||||||||
Cash, cash equivalents, short-term investments, and other | 992 | 639 | 2,306 | 1,228 | |||||||||||
Gross investment income | 18,735 | 17,189 | 39,344 | 31,412 | |||||||||||
Investment expense | (1,200 | ) | (1,054 | ) | (2,378 | ) | (2,021 | ) | |||||||
Net investment income | $ | 17,535 | $ | 16,135 | $ | 36,966 | $ | 29,391 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Annualized gross investment yield on: | |||||||||||
Average cash and invested assets | 3.9 | % | 4.1 | % | 4.2 | % | 3.8 | % | |||
Average fixed maturity securities | 3.8 | % | 4.0 | % | 3.9 | % | 3.7 | % |
June 30, 2019 | December 31, 2018 | ||||||||||||||||||||
Cost or Amortized Cost | Fair Value | % of Total Fair Value | Cost or Amortized Cost | Fair Value | % of Total Fair Value | ||||||||||||||||
($ in thousands) | |||||||||||||||||||||
Fixed maturity securities, available-for-sale: | |||||||||||||||||||||
State and municipal | $ | 130,215 | $ | 138,250 | 10.4 | % | $ | 147,160 | $ | 149,295 | 12.6 | % | |||||||||
Residential mortgage-backed | 249,452 | 249,758 | 18.8 | % | 208,869 | 204,109 | 17.2 | % | |||||||||||||
Corporate | 590,233 | 606,274 | 45.4 | % | 534,024 | 524,768 | 44.3 | % | |||||||||||||
Commercial mortgage and asset-backed | 216,771 | 220,076 | 16.5 | % | 199,528 | 197,025 | 16.6 | % | |||||||||||||
U.S. Treasury securities and obligations guaranteed by the U.S. government | 114,250 | 115,633 | 8.7 | % | 107,803 | 107,193 | 9.1 | % | |||||||||||||
Redeemable preferred stock | 2,025 | 2,051 | 0.2 | % | 2,025 | 1,812 | 0.2 | % | |||||||||||||
Total fixed maturity securities, available-for-sale | $ | 1,302,946 | $ | 1,332,042 | 100.0 | % | $ | 1,199,409 | $ | 1,184,202 | 100.0 | % |
Standard & Poor’s or Equivalent Designation | Fair Value | % of Total | ||||
($ in thousands) | ||||||
AAA | $ | 224,134 | 16.8 | % | ||
AA | 518,320 | 38.9 | % | |||
A | 460,757 | 34.6 | % | |||
BBB | 123,533 | 9.3 | % | |||
Below BB and unrated | 5,298 | 0.4 | % | |||
Total | $ | 1,332,042 | 100.0 | % |
Industry | Fair Value | % of Total | ||||
($ in thousands) | ||||||
Industrials and Other | $ | 141,454 | 23.3 | % | ||
Financial | 160,736 | 26.5 | % | |||
Consumer Discretionary | 85,891 | 14.2 | % | |||
Health Care | 91,673 | 15.1 | % | |||
Consumer Staples | 63,368 | 10.5 | % | |||
Utilities | 63,152 | 10.4 | % | |||
Total | $ | 606,274 | 100.0 | % |
Public/Private | Fair Value | % of Total | ||||
($ in thousands) | ||||||
Publicly traded | $ | 539,740 | 89.0 | % | ||
Privately placed | 66,534 | 11.0 | % | |||
Total | $ | 606,274 | 100.0 | % |
June 30, 2019 | ||||||||||
Amortized Cost | Fair Value | % of Total Value | ||||||||
($ in thousands) | ||||||||||
Due in: | ||||||||||
One year or less | $ | 46,982 | $ | 47,016 | 3.5 | % | ||||
After one year through five years | 481,646 | 490,856 | 36.8 | % | ||||||
After five years through ten years | 210,431 | 218,335 | 16.4 | % | ||||||
After ten years | 95,639 | 103,950 | 7.8 | % | ||||||
Residential mortgage-backed | 249,452 | 249,758 | 18.8 | % | ||||||
Commercial mortgage and asset-backed | 216,771 | 220,076 | 16.5 | % | ||||||
Redeemable preferred stock | 2,025 | 2,051 | 0.2 | % | ||||||
Total | $ | 1,302,946 | $ | 1,332,042 | 100.0 | % |
• | A $102.5 million secured revolving facility used by JRG Re to issue letters of credit for the benefit of third-party reinsureds. This portion of our credit facility is secured by our investment securities. At June 30, 2019, the Company had $65.8 million of letters of credit issued under the secured facility. |
• | A $112.5 million unsecured revolving facility to meet the working capital needs of the Company. All unpaid principal on the revolver is due at maturity. Interest accrues quarterly and is payable in arrears at 3-month LIBOR plus a margin which is currently 1.5% and is subject to change according to terms in the credit agreement. At June 30, 2019, the Company had a drawn balance of $73.3 million outstanding on the unsecured revolver. |
James River Capital Trust I | James River Capital Trust II | James River Capital Trust III | James River Capital Trust IV | Franklin Holdings II (Bermuda) Capital Trust I | |||||
($ in thousands) | |||||||||
Issue date | May 26, 2004 | December 15, 2004 | June 15, 2006 | December 11, 2007 | January 10, 2008 | ||||
Principal amount of trust preferred securities | $7,000 | $15,000 | $20,000 | $54,000 | $30,000 | ||||
Principal amount of junior subordinated debt | $7,217 | $15,464 | $20,619 | $55,670 | $30,928 | ||||
Carrying amount of junior subordinated debt net of repurchases | $7,217 | $15,464 | $20,619 | $44,827 | $15,928 | ||||
Maturity date of junior subordinated debt, unless accelerated earlier | May 24, 2034 | December 15, 2034 | June 15, 2036 | December 15, 2037 | March 15, 2038 | ||||
Trust common stock | $217 | $464 | $619 | $1,670 | $928 | ||||
Interest rate, per annum | Three-Month LIBOR plus 4.0% | Three-Month LIBOR plus 3.4% | Three-Month LIBOR plus 3.0% | Three-Month LIBOR plus 3.1% | Three-Month LIBOR plus 4.0% |
Company Retention | ||
Casualty | ||
Primary Specialty Casualty, including Professional Liability | Up to $1.0 million per occurrence, subject to a $1.0 million aggregate deductible. | |
Primary Casualty | Up to $2.0 million per occurrence. (1) | |
Excess Casualty | Up to $1.0 million per occurrence. (2) | |
Property | Up to $5.0 million per event. (3) |
(1) | Total exposure to any one claim is generally $1.0 million. |
(2) | For policies with an occurrence limit up to $10.0 million, the excess casualty treaty is set such that our retention is no more than $1.0 million. |
(3) | The property catastrophe reinsurance treaty has a limit of $40.0 million with one reinstatement. |
Line of Business | Coverage | |
Casualty | | |
Workers’ Compensation | | Quota share coverage for 50% of the first $600,000.(1)(2) Excess of loss coverage for $29.4 million in excess of $600,000.(1)(2) |
Auto Programs | | Quota share coverage for 85-90% of limits up to $1.5 million liability and $5.0 million physical damage per occurrence |
General Liability & Professional Liability – Programs | | Quota share coverage for 90% - 100% of limits up to $2.0 million per occurrence. |
Property | | |
Commercial Property within Package - Programs | Quota share coverage for 100% of limits up to $25.0 million per occurrence. | |
Catastrophe Coverage | Excess of Loss coverage for $44.0 million in excess of $1.0 million |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
($ in thousands) | |||||||
Cash and cash equivalents provided by (used in): | |||||||
Operating activities | $ | 68,123 | $ | 164,086 | |||
Investing activities | (37,470 | ) | (43,732 | ) | |||
Financing activities | (33,985 | ) | (16,482 | ) | |||
Change in cash and cash equivalents | $ | (3,332 | ) | $ | 103,872 |
Six Months Ended June 30, | |||||||||||||
2019 | 2018 | ||||||||||||
Shares | Weighted- Average Exercise Price | Shares | Weighted- Average Exercise Price | ||||||||||
Outstanding: | |||||||||||||
Beginning of period | 1,115,324 | $ | 29.02 | 1,479,236 | $ | 27.81 | |||||||
Granted | — | $ | — | — | $ | — | |||||||
Exercised | (336,350 | ) | $ | 26.22 | (255,609 | ) | $ | 21.14 | |||||
Forfeited | (5,395 | ) | $ | 38.13 | (29,446 | ) | $ | 36.26 | |||||
End of period | 773,579 | $ | 30.18 | 1,194,181 | $ | 29.04 | |||||||
Exercisable, end of period | 717,610 | $ | 29.24 | 876,816 | $ | 26.59 |
Six Months Ended June 30, | |||||||||||||
2019 | 2018 | ||||||||||||
Shares | Weighted- Average Grant Date Fair Value | Shares | Weighted- Average Grant Date Fair Value | ||||||||||
Unvested, beginning of period | 300,142 | $ | 39.22 | 178,882 | $ | 37.93 | |||||||
Granted | 178,556 | $ | 42.08 | 214,907 | $ | 39.81 | |||||||
Vested | (111,212 | ) | $ | 39.90 | (63,191 | ) | $ | 40.92 | |||||
Forfeited | (9,555 | ) | $ | 40.84 | (4,454 | ) | $ | 41.04 | |||||
Unvested, end of period | 357,931 | $ | 40.39 | 326,144 | $ | 38.55 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Underwriting profit (loss) of the insurance segments: | |||||||||||||||
Excess and Surplus Lines | $ | 15,810 | $ | 10,117 | $ | 28,912 | $ | 21,416 | |||||||
Specialty Admitted Insurance | 1,298 | 988 | 2,921 | 2,611 | |||||||||||
Casualty Reinsurance | (100 | ) | 1,729 | 227 | 3,473 | ||||||||||
Total underwriting profit of insurance segments | 17,008 | 12,834 | 32,060 | 27,500 | |||||||||||
Other operating expenses of the Corporate and Other segment | (7,433 | ) | (7,307 | ) | (15,339 | ) | (14,738 | ) | |||||||
Underwriting profit (1) | 9,575 | 5,527 | 16,721 | 12,762 | |||||||||||
Net investment income | 17,535 | 16,135 | 36,966 | 29,391 | |||||||||||
Net realized and unrealized gains (losses) on investments | 1,063 | (64 | ) | 2,688 | (874 | ) | |||||||||
Amortization of intangible assets | (149 | ) | (149 | ) | (298 | ) | (298 | ) | |||||||
Other income and expenses | (378 | ) | 4 | (132 | ) | 108 | |||||||||
Interest expense | (2,684 | ) | (2,946 | ) | (5,492 | ) | (5,468 | ) | |||||||
Income before taxes | $ | 24,962 | $ | 18,507 | $ | 50,453 | $ | 35,621 |
(1) | Included in underwriting results for the three and six months ended June 30, 2019 is gross fee income of $6.2 million and $12.6 million, respectively ($7.4 million and $15.6 million for the same periods in the prior year). |
Three Months Ended June 30, | |||||||||||||||
2019 | 2018 | ||||||||||||||
Income Before Taxes | Net Income | Income Before Taxes | Net Income | ||||||||||||
($ in thousands) | |||||||||||||||
Income as reported | $ | 24,962 | $ | 20,307 | $ | 18,507 | $ | 16,984 | |||||||
Net realized and unrealized investment (gains) losses | (1,063 | ) | (670 | ) | 64 | 98 | |||||||||
Other expenses | 683 | 540 | 93 | 126 | |||||||||||
Interest expense on leased building the Company was previously deemed to own for accounting purposes | — | — | 457 | 361 | |||||||||||
Adjusted net operating income | $ | 24,582 | $ | 20,177 | $ | 19,121 | $ | 17,569 |
Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | ||||||||||||||
Income Before Taxes | Net Income | Income Before Taxes | Net Income | ||||||||||||
($ in thousands) | |||||||||||||||
Income as reported | $ | 50,453 | $ | 43,035 | $ | 35,621 | $ | 32,617 | |||||||
Net realized and unrealized investment (gains) losses | (2,688 | ) | (1,685 | ) | 874 | 763 | |||||||||
Other expenses | 683 | 540 | 97 | 146 | |||||||||||
Interest expense on leased building the Company was previously deemed to own for accounting purposes | — | — | 775 | 612 | |||||||||||
Adjusted net operating income | $ | 48,448 | $ | 41,890 | $ | 37,367 | $ | 34,138 |
June 30, 2019 | December 31, 2018 | ||||||||||||||
Equity | Equity per Share | Equity | Equity per Share | ||||||||||||
($ in thousands, except share amounts) | |||||||||||||||
Shareholders’ equity | $ | 791,050 | $ | 26.08 | $ | 709,241 | $ | 23.65 | |||||||
Less: | |||||||||||||||
Goodwill | 181,831 | 5.99 | 181,831 | 6.06 | |||||||||||
Intangible assets | 37,239 | 1.23 | 37,537 | 1.25 | |||||||||||
Tangible equity | $ | 571,980 | $ | 18.86 | $ | 489,873 | $ | 16.34 | |||||||
Dividends to shareholders for the six months ended June 30, 2019 | 18,339 | 0.60 | |||||||||||||
Pre-dividend tangible equity | $ | 590,319 | $ | 19.46 |
Exhibit Number | Description | |
3.1 | ||
3.2 | ||
3.3 | ||
3.4 | ||
3.5 | ||
3.6 | ||
10.1 | ||
31.1 | ||
31.2 | ||
32 | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
James River Group Holdings, Ltd. | |||
Date: | August 2, 2019 | By: | /s/ Robert P. Myron |
Robert P. Myron | |||
President and Chief Executive Officer | |||
(Principal Executive Officer) | |||
Date: | August 2, 2019 | By: | /s/ Sarah C. Doran |
Sarah C. Doran | |||
Chief Financial Officer | |||
(Principal Financial Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of James River Group Holdings, Ltd.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Robert P. Myron | |
Robert P. Myron | |
President and Chief Executive Officer | |
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of James River Group Holdings, Ltd.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Sarah C. Doran | |
Sarah C. Doran | |
Chief Financial Officer | |
(Principal Financial Officer) |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Robert P. Myron | |
Robert P. Myron | |
President and Chief Executive Officer | |
(Principal Executive Officer) | |
August 2, 2019 | |
/s/ Sarah C. Doran | |
Sarah C. Doran | |
Chief Financial Officer | |
(Principal Financial Officer) | |
August 2, 2019 |
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Available-for-sale debt securities, amortized cost | $ 1,302,946 | $ 1,199,409 |
Available-for-sale equity securities, amortized cost | $ 80,846 | $ 77,152 |
Common stock, par value (in dollars per share) | $ 0.0002 | $ 0.0002 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 30,330,675 | 29,988,460 |
Common stock, shares outstanding | 30,330,675 | 29,988,460 |
Preferred stock par value (in dollars per share) | $ 0.00125 | $ 0.00125 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Revenues | ||||
Gross written premiums | $ 380,003 | $ 293,378 | $ 707,337 | $ 591,494 |
Ceded written premiums | (140,093) | (104,772) | (259,686) | (191,910) |
Net written premiums | 239,910 | 188,606 | 447,651 | 399,584 |
Change in net unearned premiums | (40,796) | 19,604 | (58,385) | 9,568 |
Net earned premiums | 199,114 | 208,210 | 389,266 | 409,152 |
Net investment income | 17,535 | 16,135 | 36,966 | 29,391 |
Net realized and unrealized gains (losses) on investments | 1,063 | (64) | 2,688 | (874) |
Other income | 2,662 | 3,760 | 5,581 | 8,716 |
Total revenues | 220,374 | 228,041 | 434,501 | 446,385 |
Expenses | ||||
Losses and loss adjustment expenses | 147,053 | 154,595 | 286,980 | 298,367 |
Other operating expenses | 44,843 | 51,751 | 90,595 | 106,534 |
Other expenses | 683 | 93 | 683 | 97 |
Interest expense | 2,684 | 2,946 | 5,492 | 5,468 |
Amortization of intangible assets | 149 | 149 | 298 | 298 |
Total expenses | 195,412 | 209,534 | 384,048 | 410,764 |
Income before taxes | 24,962 | 18,507 | 50,453 | 35,621 |
Income tax expense | 4,655 | 1,523 | 7,418 | 3,004 |
Net income | 20,307 | 16,984 | 43,035 | 32,617 |
Other comprehensive income (loss): | ||||
Net unrealized gains (losses), net of taxes of $1,865 and $3,311 in 2019 and $(183) and $(727) in 2018 | 20,732 | (6,558) | 40,992 | (25,105) |
Total comprehensive income | $ 41,039 | $ 10,426 | $ 84,027 | $ 7,512 |
Per share data: | ||||
Basic earnings per share (in dollars per share) | $ 0.67 | $ 0.57 | $ 1.43 | $ 1.09 |
Diluted earnings per share (in dollars per share) | 0.66 | 0.56 | 1.41 | 1.08 |
Dividend declared per share (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.60 | $ 0.60 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 30,246,420 | 29,882,988 | 30,153,426 | 29,823,982 |
Diluted (in shares) | 30,689,074 | 30,293,933 | 30,581,205 | 30,243,946 |
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Income Statement [Abstract] | ||||
Tax on net unrealized gains (losses) | $ 1,865 | $ 3,311 | $ (183) | $ (727) |
Accounting Policies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies | Accounting Policies Organization James River Group Holdings, Ltd. (referred to as “JRG Holdings” or, with its subsidiaries, the “Company”) is an exempted holding company registered in Bermuda, organized for the purpose of acquiring and managing insurance and reinsurance entities. The Company owns five insurance companies based in the United States (“U.S.”) focused on specialty insurance niches and two Bermuda-based reinsurance companies as described below:
Basis of Presentation The accompanying condensed consolidated financial statements and notes have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and do not contain all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements include the results of the Company and its subsidiaries from their respective dates of inception or acquisition, as applicable. Readers are urged to review the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for a more complete description of the Company’s business and accounting policies. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results of operations for the full year. The consolidated balance sheet as of December 31, 2018 was derived from the Company’s audited annual consolidated financial statements. Intercompany transactions and balances have been eliminated. Estimates and Assumptions Preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying disclosures. Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates. Variable Interest Entities Entities that do not have sufficient equity at risk to allow the entity to finance its activities without additional financial support or in which the equity investors, as a group, do not have the characteristic of a controlling financial interest are referred to as variable interest entities (“VIE”). A VIE is consolidated by the variable interest holder that is determined to have the controlling financial interest (primary beneficiary) as a result of having both the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE’s capital structure, contractual terms, nature of the VIE’s operations and purpose, and the Company’s relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE. The Company reassesses its VIE determination with respect to an entity on an ongoing basis. The Company holds interests in VIEs through certain equity method investments included in “other invested assets” in the accompanying condensed consolidated balance sheets. The Company has determined that it should not consolidate any of the VIEs as it is not the primary beneficiary in any of the relationships. Although the investments resulted in the Company holding variable interests in the entities, they did not empower the Company to direct the activities that most significantly impact the economic performance of the entities. The Company’s investments related to these VIEs totaled $30.4 million and $29.8 million as of June 30, 2019 and December 31, 2018, respectively, representing the Company’s maximum exposure to loss. Income Tax Expense Our effective tax rate fluctuates from period to period based on the relative mix of income reported by country and the respective tax rates imposed by each tax jurisdiction. For the three months ended June 30, 2019 and 2018, our U.S. federal income tax expense was 18.6% and 8.2% of income before taxes, respectively (14.7% and 8.4% for the six months ended June 30, 2019 and 2018, respectively). For U.S.-sourced income, the Company’s U.S. federal income tax expense differs from the amounts computed by applying the federal statutory income tax rate to income before taxes due primarily to interest income on tax-advantaged state and municipal securities, dividends received income, and excess tax benefits on share based compensation. The effective tax rates for the three and six months ended June 30, 2019 were elevated due to changes in reserve estimates between accident years in the commercial auto business, and the related impact on the mix of income reported by country. Effective January 1, 2018, the Company adopted ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This update was issued as a result of the enactment of the Tax Cuts and Jobs Act of 2017 ("TCJA"). The ASU allows for the option to reclassify the stranded tax effects resulting from the implementation of the TCJA out of accumulated other comprehensive income and into retained earnings. The reclassification resulted in a $711,000 decrease to the Company's retained earnings with a corresponding increase to accumulated other comprehensive income in the first quarter of 2018 in connection with the Company's adoption of this ASU. Adopted Accounting Standards Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842). This update requires the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. The Company adopted the new standard using a modified retrospective transition method, applying the transition provisions at the beginning of the period of adoption. The Company elected the package of practical expedients permitted under the transition guidance within the new standard and did not elect to use hindsight in determining the lease term. Upon adoption of the new standard, the Company derecognized assets of $22.6 million and liabilities of $30.9 million associated with a lease that was designated as build-to-suit under the previous guidance, and recorded a cumulative-effect adjustment to retained earnings of $8.3 million. The Company recorded right-of-use assets of $17.2 million and lease liabilities of $17.8 million at adoption of the new standard associated with operating leases for office space in Bermuda, North Carolina, Virginia, Arizona, and Georgia. The new standard did not materially impact the Company's results of operations, earnings per share, or cash flows, and did not impact compliance under the covenants of our current credit agreements. At June 30, 2019, right-of-use assets and lease liabilities were $16.9 million and $17.8 million, respectively. Operating lease costs were $1.2 million and $2.5 million in the three and six months ended June 30, 2019, respectively, compared to $1.1 million and $2.2 million in the respective prior year periods. The weighted-average discount rate and weighted average remaining lease term for operating leases was 4.3% and 5.7 years, respectively, as of June 30, 2019. The table below summarizes maturities of the Company’s operating lease liabilities as of June 30, 2019, which reconciles to total lease liabilities included in other liabilities on the Company’s condensed consolidated balance sheet.
Prospective Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Current GAAP requires the recognition of credit losses when it is probable a loss has been incurred. The update will require financial assets measured at amortized cost, such as bank loan participations held for investment, to be presented at the net amount expected to be collected by means of an allowance for credit losses that is reflected in net income. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which fair value is below amortized cost. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Upon adoption, this ASU will be applied using the modified-retrospective approach, by which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period presented. The Company is in the process of analyzing how adopting this ASU will affect the Company’s financial statements.
|
Investments |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments The Company’s available-for-sale fixed maturity securities are summarized as follows:
The amortized cost and fair value of available-for-sale investments in fixed maturity securities at June 30, 2019 are summarized, by contractual maturity, as follows:
Actual maturities may differ for some securities because borrowers have the right to call or prepay obligations with or without penalties. The following table shows the Company’s gross unrealized losses and fair value for available-for-sale securities aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position:
The Company held securities of 77 issuers that were in an unrealized loss position at June 30, 2019 with a total fair value of $281.7 million and gross unrealized losses of $3.1 million. None of the fixed maturity securities with unrealized losses has ever missed, or been delinquent on, a scheduled principal or interest payment. At June 30, 2019, 99.6% of the Company’s fixed maturity security portfolio was rated “BBB-” or better (“investment grade”) by Standard & Poor’s or received an equivalent rating from another nationally recognized rating agency. Fixed maturity securities with ratings below investment grade by Standard & Poor’s or another nationally recognized rating agency at June 30, 2019 had an aggregate fair value of $5.3 million and an aggregate net unrealized gain of $48,000. At March 31, 2019, management concluded that three fixed maturity securities from one issuer that we intended to sell at a loss in the second quarter were impaired. The Company recorded impairment losses on these securities of $271,000 in the three months ended March 31, 2019. Management concluded that none of the fixed maturity securities with an unrealized loss at June 30, 2019 or December 31, 2018 had experienced an other-than-temporary impairment. For fixed maturity securities available-for-sale that are not other-than-temporarily impaired at June 30, 2019, management does not intend to sell the securities in an unrealized loss position, and it is not “more likely than not” that the Company will be required to sell these securities before a recovery in their value to their amortized cost basis occurs. Management concluded that two loans from one issuer in the Company's bank loan portfolio were impaired at June 30, 2019. At June 30, 2019, the impaired loans had a carrying value of $3.4 million, unpaid principal of $3.6 million, and an allowance for credit losses of $231,000. Management concluded that none of the loans in the Company's bank loan portfolio were impaired at December 31, 2018. The aggregate allowance for credit losses on impaired loans was $1.2 million at June 30, 2018 and $3.2 million at December 31, 2017. At December 31, 2017, the Company held a participation in a loan with unpaid principal of $807,000 issued by a company that produces and supplies power to Puerto Rico through a power purchase agreement with Puerto Rico Electric Power Authority, a public corporation and governmental agency of the Commonwealth of Puerto Rico. Management concluded that an allowance for credit losses should be established on the loan at December 31, 2017 to reduce its carrying value to $0. In the first quarter of 2018, the full outstanding principal on the loan was repaid and the Company recognized a realized gain of $807,000 on the repayment. Bank loan participations generally have a credit rating that is below investment grade (i.e. below “BBB-” for Standard & Poor’s) at the date of purchase. These bank loans are primarily senior, secured floating-rate debt rated “BB”, “B”, or “CCC” by Standard & Poor’s or an equivalent rating from another nationally recognized rating agency. These bank loans include assignments of, and participations in, performing and non-performing senior corporate debt generally acquired through primary bank syndications and in secondary markets. Bank loans consist of, but are not limited to, term loans, the funded and unfunded portions of revolving credit loans, and other similar loans and investments. Management believed that it was probable at the time that these loans were acquired that the Company would be able to collect all contractually required payments receivable. Generally, the accrual of interest on a bank loan participation is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest. A bank loan participation may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. Generally, bank loan participations are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt. Interest received on nonaccrual loans generally is reported as investment income. There were no bank loans on nonaccrual status at June 30, 2019 or December 31, 2018. The allowance for credit losses is maintained at a level believed adequate by management to absorb estimated probable credit losses. Management’s periodic evaluation of the adequacy of the allowance is based on consultations and advice of the Company’s independent investment manager, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, current economic conditions, and other relevant factors. When an observable market price for a loan is available, the Company has recorded an allowance equal to the difference between the fair value and the amortized cost of bank loans that it has determined to be impaired as a practical expedient for an estimate of probable future cash flows to be collected on those bank loans. Bank loans are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The average recorded investment in impaired bank loans was $1.7 million and $3.7 million during the six months ended June 30, 2019 and 2018, respectively. Investment income of $0 and $65,000, respectively, was recognized during the time within those periods that the loans were impaired. The Company recorded net realized investment losses of $231,000 and $1.8 million in the three and six months ended June 30, 2019, respectively, for changes in the fair value of impaired bank loans (net realized investment losses of $896,000 and $893,000 in three and six months ended June 30, 2018 respectively). The Company’s net realized and unrealized gains and losses on investments are summarized as follows:
Realized investment gains or losses are determined on a specific identification basis. The Company invests selectively in private debt and equity opportunities. These investments, which together comprise the Company’s other invested assets, are primarily focused in renewable energy, limited partnerships, and bank holding companies.
months ended June 30, 2019, respectively ($328,000 and $625,000 for the three and six months ended June 30, 2018, respectively).
At June 30, 2019 and December 31, 2018, the Company held an investment in a CLO where one of the underlying loans was issued by the Bank Holding Company. The investment, with a carrying value of $3.4 million at June 30, 2019, is classified as an available-for-sale fixed maturity.
|
Goodwill and Intangible Assets |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets On December 11, 2007, the Company completed an acquisition of James River Group by acquiring 100% of the outstanding shares of James River Group common stock, referred to herein as the “Merger”. The transaction was accounted for under the purchase method of accounting, and goodwill and intangible assets were recognized by the Company as a result of the transaction. Goodwill resulting from the Merger was $181.8 million at June 30, 2019 and December 31, 2018. The gross carrying amounts and accumulated amortization for each major specifically identifiable intangible asset class were as follows:
|
Earnings Per Share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The following represents a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations contained in the condensed consolidated financial statements:
Common share equivalents relate to our outstanding equity awards (stock options and restricted share units ("RSUs")). For the three and six months ended June 30, 2019, common share equivalents of 9,735 and 170,310 shares, respectively, were excluded from the calculations of diluted earnings per share as their effects were anti-dilutive (182,246 and 187,502 shares in the three and six months ended June 30, 2018, respectively).
|
Reserve for Losses and Loss Adjustment Expenses |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liability for Claims and Claims Adjustment Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserve for Losses and Loss Adjustment Expenses | Reserve for Losses and Loss Adjustment Expenses The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses, net of reinsurance, to the gross amounts reported in the condensed consolidated balance sheets:
The Company experienced $2.3 million of adverse reserve development in the three months ended June 30, 2019 on the reserve for losses and loss adjustment expenses held at December 31, 2018. This reserve development included $1.2 million of adverse development in the Excess and Surplus Lines segment, as adverse development in the 2016 and 2017 accident years for commercial auto business were largely offset by favorable development in the 2018 accident year for commercial auto business. The Specialty Admitted Insurance segment experienced $1.2 million of favorable development due to favorable development in the workers' compensation business for prior accident years. The Company also experienced $2.4 million of adverse development in the Casualty Reinsurance segment primarily related to losses from risk profiles and treaty structures that the Company no longer writes. The Company experienced $2.2 million of adverse reserve development in the three months ended June 30, 2018 on the reserve for losses and loss adjustment expenses held at December 31, 2017. This reserve development included $58,000 of favorable development in the Excess and Surplus Lines segment, primarily from $1.9 million of favorable development on the property catastrophe losses from the September 2017 storms coupled with adverse development in commercial auto business and favorable development in other core Excess and Surplus Lines. The Specialty Admitted Insurance segment experienced $167,000 of favorable development, primarily due to favorable development in the workers' compensation business for prior accident years, partially offset by adverse development on certain terminated program business. The Company also experienced $2.4 million of adverse development in the Casualty Reinsurance segment primarily related to losses from risk profiles and treaty structures that the Company no longer writes. The Company experienced $3.3 million of adverse reserve development in the six months ended June 30, 2019 on the reserve for losses and loss adjustment expenses held at December 31, 2018. This reserve development included $1.2 million of adverse development in the Excess and Surplus Lines segment, as adverse development in the 2016 and 2017 accident years for commercial auto business were largely offset by favorable development in the 2018 accident year for commercial auto business. The Specialty Admitted Insurance segment experienced $3.3 million of favorable development due to favorable development in the workers' compensation business for prior accident years. The Company also experienced $5.3 million of adverse development in the Casualty Reinsurance segment primarily related to losses from risk profiles and treaty structures that the Company no longer writes. The Company experienced $386,000 of favorable reserve development in the six months ended June 30, 2018 on the reserve for losses and loss adjustment expenses held at December 31, 2017. This reserve development included $1.2 million of favorable development in the Excess and Surplus Lines segment, primarily from $1.9 million of favorable development on the property catastrophe losses from the September 2017 storms coupled with adverse development in commercial auto business and favorable development in other core Excess and Surplus Lines. The Specialty Admitted Insurance segment experienced $1.5 million of favorable development, primarily due to favorable development in the workers' compensation business for prior accident years, partially offset by adverse development on certain terminated program business. The Company also experienced $2.3 million of favorable development in the Casualty Reinsurance segment primarily related to losses from risk profiles and treaty structures that the Company no longer writes.
|
Other Comprehensive Income (Loss) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) The following table summarizes the components of other comprehensive income (loss):
In addition to the $331,000 and $103,000 of net realized investment gains on available-for-sale fixed maturity securities for the three and six months ended June 30, 2019, respectively ($108,000 of net realized investment gains and $93,000 of net realized investment losses in the respective prior year periods), the Company also recognized $1.2 million and $2.9 million of net realized investment losses in the respective periods on its investments in bank loan participations ($646,000 of net realized investment losses and $474,000 of net realized investment gains in the respective prior year periods), and $1.9 million and $5.4 million of net realized gains in the respective periods for the change in fair values of equity securities ($521,000 of net realized gains and $1.2 million of net realized losses in the respective prior year periods).
|
Contingent Liabilities |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | Contingent Liabilities The Company is a party to various lawsuits arising in the ordinary course of its operations. The Company believes that the ultimate resolution of these matters will not materially impact its financial position, cash flows, or results of operations. JRG Re has entered into three letter of credit facilities with banks as security to third-party reinsureds on reinsurance assumed by JRG Re. JRG Re has established custodial accounts to secure these letters of credit. Under a $75.0 million facility, $48.2 million of letters of credit were issued through June 30, 2019 which were secured by deposits of $60.2 million. Under a $102.5 million facility, $65.8 million of letters of credit were issued through June 30, 2019 which were secured by deposits of $86.8 million. Under a $100.0 million facility, $5.3 million of letters of credit were issued through June 30, 2019 which were secured by deposits of $10.7 million. JRG Re has also established trust accounts to secure its obligations to selected reinsureds. The total amount deposited in the trust accounts for the benefit of third-party reinsureds was $294.7 million at June 30, 2019. The Company is a party to a set of insurance contracts with an insured group of companies under which the Company pays losses and loss adjustment expenses on the contract. The Company has indemnity agreements with this group of insured parties (non-insurance entities) and is contractually entitled to receive reimbursement for a significant portion of the losses and loss adjustment expenses paid on behalf of the insured parties and other expenses incurred by the Company. The insured parties are required to collateralize all amounts currently due to the Company and to provide additional collateral sufficient to cover the amounts that may be recoverable under the indemnity agreement, including, among other things, case loss and loss adjustment expense reserves, IBNR loss and loss adjustment expense reserves, extra contractual obligations and excess of policy limits liabilities. The collateral is currently provided through a collateral trust arrangement established in favor of the Company by a captive insurance company affiliate of the insured group. At June 30, 2019, the cash equivalent collateral held in the collateral trust arrangement was approximately $1,162.7 million, which exceeds the amount of claims receivable and unpaid reported losses and loss adjustment expenses outstanding. The Company has ongoing exposure to estimated losses and expenses on these contracts growing at a faster pace than growth in our collateral balances. In addition, we have credit exposure if our estimates of future losses and loss adjustment expenses and other amounts recoverable, which are the basis for establishing collateral balances, are lower than actual amounts paid or payable. The amount of our credit exposure in any of these instances could be material. To mitigate these risks, we closely and frequently monitor our exposure compared to our collateral held, and we request additional collateral when our analysis indicates that we have uncollateralized exposure.
|
Segment Information |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company has four reportable segments: the Excess and Surplus Lines segment, the Specialty Admitted Insurance segment, the Casualty Reinsurance segment, and the Corporate and Other segment. Segment profit (loss) is measured by underwriting profit (loss), which is generally defined as net earned premiums less loss and loss adjustment expenses and other operating expenses of the operating segments. Gross fee income of the Excess and Surplus Lines segment is included in that segment’s underwriting profit. Gross fee income of $2.3 million and $3.7 million was included in underwriting profit for the three months ended June 30, 2019 and 2018, respectively ($5.0 million and $8.5 million for the six months ended June 30, 2019 and 2018, respectively). Segment results are reported prior to the effects of intercompany reinsurance agreements among the Company’s insurance subsidiaries. The following table summarizes the Company’s segment results:
The following table reconciles the underwriting profit (loss) of the operating segments by individual segment to consolidated income before taxes:
|
Other Operating Expenses and Other Expenses |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Operating Expenses And Other Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Operating Expenses and Other Expenses | Other Operating Expenses and Other Expenses Other operating expenses consist of the following:
Other expenses of $683,000 for the three and six months ended June 30, 2019 consist of employee severance costs. Other expenses of $93,000 and $97,000 for the three and six months ended June 30, 2018 primarily consist of legal and professional services and other costs related to secondary share offerings.
|
Fair Value Measurements |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Three levels of inputs are used to measure fair value of financial instruments: (1) Level 1: quoted price (unadjusted) in active markets for identical assets, (2) Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument, and (3) Level 3: inputs to the valuation methodology are unobservable for the asset or liability. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. To measure fair value, the Company obtains quoted market prices for its investment securities from its outside investment managers. If a quoted market price is not available, the Company uses prices of similar securities. Values for U.S. Treasury and publicly-traded equity securities are generally based on Level 1 inputs which use the market approach valuation technique. The values for all other fixed maturity securities (including state and municipal securities and obligations of U.S. government corporations and agencies) generally incorporate significant Level 2 inputs, and in some cases, Level 3 inputs, using the market approach and income approach valuation techniques. There have been no changes in the Company’s use of valuation techniques since December 31, 2017. The Company reviews fair value prices provided by its outside investment managers for reasonableness by comparing the fair values provided by the managers to those provided by its investment custodian. The Company also reviews and monitors changes in unrealized gains and losses. The Company has not historically adjusted security prices. The Company obtains an understanding of the methods, models and inputs used by the investment managers and independent pricing services, and controls are in place to validate that prices provided represent fair values. The Company’s control process includes, but is not limited to, initial and ongoing evaluation of the methodologies used, a review of specific securities and an assessment for proper classification within the fair value hierarchy, and obtaining and reviewing internal control reports for our investment manager that obtains fair values from independent pricing services. Assets measured at fair value on a recurring basis as of June 30, 2019 are summarized below:
Assets measured at fair value on a recurring basis as of December 31, 2018 are summarized below:
The Company held one available-for-sale fixed maturity security at December 31, 2018 for which the fair value was determined using significant unobservable inputs (Level 3). A market approach using prices in trades of comparable securities was utilized to determine a fair value of $4.2 million for the security at December 31, 2018. A principal payment of $456,000 was received on the available-for-sale fixed maturity security in the three months ended March 31, 2019. The Company was able to obtain a quoted price from a pricing vendor for the available-for-sale fixed maturity security at March 31, 2019 and it was transferred to Level 2. At June 30, 2019 and December 31, 2018, the Company held equity securities for which the fair value was determined using significant unobservable inputs (Level 3). In the three months ended June 30, 2019, one equity security was transferred from Level 1 to Level 3 as the security was no longer actively traded. A market approach using prices in trades of comparable securities was utilized to determine a fair value for the equity securities of $3.1 million at June 30, 2019 and $214,000 at December 31, 2018. There were no purchases or sales of Level 3 securities for the six months ended June 30, 2019 or 2018. There were no transfers involving Level 3 securities for the six months ended June 30, 2018. Transfers out of Level 3 occur when the Company is able to obtain reliable prices from pricing vendors for securities for which the Company was previously unable to obtain reliable prices. Transfers in to Level 3 occur when the Company is unable to obtain reliable prices for securities from pricing vendors and instead must use broker price quotes to value the securities. There were no transfers between Level 1 and Level 2 during the six months ended June 30, 2019 or 2018. The Company recognizes transfers between levels at the beginning of the reporting period. There were no realized gains or losses included in earnings for the six months ended June 30, 2019 attributable to the change in unrealized gains or losses relating to Level 3 assets valued at fair value on a recurring basis that are still held at June 30, 2019. The Company measures certain bank loan participations at fair value on a non-recurring basis during the year as part of the Company’s impairment evaluation when loans are determined by management to be impaired. Assets measured at fair value on a nonrecurring basis are summarized below:
Bank loan participations held-for-investment that were determined to be impaired were written down to their fair value of $3.4 million at June 30, 2019. Management concluded that none of the bank loan participations held-for-investment were impaired as of December 31, 2018. In the determination of the fair value for bank loan participations and certain high yield bonds, the Company’s investment manager endeavors to obtain data from multiple external pricing sources. External pricing sources may include brokers, dealers and price data vendors that provide a composite price based on prices from multiple dealers. Such external pricing sources typically provide valuations for normal institutional size trading units of such securities using methods based on market transactions for comparable securities, and various relationships between securities, as generally recognized by institutional dealers. For investments in which the investment manager determines that only one external pricing source is appropriate or if only one external price is available, the relevant investment is generally recorded at fair value based on such price. Investments for which external sources are not available or are determined by the investment manager not to be representative of fair value are recorded at fair value as determined by the Company, with input from its investment managers and valuation specialists as considered necessary. In determining the fair value of such investments, the Company considers one or more of the following factors: type of security held, convertibility or exchangeability of the security, redeemability of the security (including the timing of redemptions), application of industry accepted valuation models, recent trading activity, liquidity, estimates of liquidation value, purchase cost, and prices received for securities with similar terms of the same issuer or similar issuers. At June 30, 2019 and December 31, 2018, there were no investments for which external sources were unavailable to determine fair value. The carrying values and fair values of financial instruments are summarized below:
The fair values of fixed maturity securities and equity securities have been determined using quoted market prices for securities traded in the public market or prices using bid or closing prices for securities not traded in the public marketplace. The fair values of cash and cash equivalents and short-term investments approximate their carrying values due to their short-term maturity. The fair values of other invested assets-notes receivable, senior debt, and junior subordinated debt at June 30, 2019 and December 31, 2018 were determined by calculating the present value of expected future cash flows under the terms of the note agreements or debt agreements, as applicable, discounted at an estimated market rate of interest at June 30, 2019 and December 31, 2018, respectively. The fair values of bank loan participations held-for-investment, senior debt, and junior subordinated debt at June 30, 2019 and December 31, 2018 were determined using inputs to the valuation methodology that are unobservable (Level 3).
|
Capital Stock and Equity Awards |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Stock and Equity Awards | Capital Stock and Equity Awards The Company issued 342,215 common shares in the six months ended June 30, 2019 with 265,938 of the new shares related to stock option exercises and 76,277 of the new shares related to vesting of RSUs. The total common shares outstanding increased from 29,988,460 at December 31, 2018 to 30,330,675 at June 30, 2019. The Company declared the following dividends during the first six months of 2019 and 2018:
Included in the total dividends for the six months ended June 30, 2019 and 2018 are $216,000 and $197,000, respectively, of dividend equivalents on unvested RSUs. The balance of dividends payable on unvested RSUs was $554,000 at June 30, 2019 and $557,000 at December 31, 2018. Equity Incentive Plans The Company’s shareholders have approved various equity incentive plans, including the Amended and Restated 2009 Equity Incentive Plan (the “Legacy Plan”), the 2014 Long Term Incentive Plan (“2014 LTIP”), and the 2014 Non-Employee Director Incentive Plan (“2014 Director Plan”) (collectively, the “Plans”). All awards issued under the Plans are issued at the discretion of the Board of Directors. Under the Legacy Plan, employees received non-qualified stock options. Options are outstanding under the Legacy Plan; however, no additional awards may be granted. Employees are eligible to receive non-qualified stock options, incentive stock options, share appreciation rights, performance shares, restricted shares, RSUs, and other awards under the 2014 LTIP. The maximum number of shares available for issuance under the 2014 LTIP is 4,171,150, and at June 30, 2019, 1,573,528 shares are available for grant. Non-employee directors of the Company are eligible to receive non-qualified stock options, share appreciation rights, performance shares, restricted shares, RSUs, and other awards under the 2014 Director Plan. At the 2019 Annual General Meeting of Shareholders of the Company held on April 30, 2019, the Company's shareholders approved an amendment to the 2014 Director Plan. The Board of Directors of the Company had previously approved the amendment. The amendment increased the number of the Company's common shares authorized for issuance under the 2014 Director Plan by 100,000 shares. The maximum number of shares available for issuance under the 2014 Director Plan is 150,000, and at June 30, 2019, 108,594 shares are available for grant. Generally, awards issued under the 2014 LTIP and 2014 Director Plan vest immediately in the event that an award recipient is terminated without Cause (as defined in the applicable plans), and in the case of the 2014 LTIP for Good Reason (as defined in the applicable plans), at any time following a Change in Control (as defined in the applicable plans). Options The following table summarizes option activity:
All of the outstanding options vest over three to four years and have a contractual life of seven years from the original date of grant. All of the outstanding options have an exercise price equal to the fair value of the underlying shares at the date of grant. The weighted-average remaining contractual life of the options outstanding and options exercisable at June 30, 2019 was 3.4 years and 3.3 years, respectively. RSUs The following table summarizes RSU activity:
The vesting period of RSUs granted to employees range from one to five years and vest ratably over the respective vesting period, and the majority vest in three years. All RSUs granted to date to non-employee directors had a one year vesting period. The holders of RSUs are entitled to dividend equivalents. The dividend equivalents are settled in cash at the same time that the underlying RSUs vest and are subject to the same risk of forfeiture as the underlying shares. The fair value of the RSUs granted is based on the market price of the underlying shares at the date of grant. Compensation Expense Share based compensation expense is recognized on a straight line basis over the vesting period. The amount of expense and related tax benefit is summarized below:
As of June 30, 2019, the Company had $12.0 million of unrecognized share based compensation expense expected to be charged to earnings over a weighted-average period of 2.0 years.
|
Subsequent Events |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 30, 2019, the Board of Directors declared a cash dividend of $0.30 per common share. The dividend is payable on September 30, 2019 to shareholders of record on September 16, 2019. On July 30, 2019, the Board of Directors granted awards under the 2014 LTIP to the Company’s employees. RSUs for 522 shares were awarded with a fair value on the date of grant of $47.89 per share. The RSUs vest over three years.
|
Accounting Policies (Policies) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements and notes have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and do not contain all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements include the results of the Company and its subsidiaries from their respective dates of inception or acquisition, as applicable. Readers are urged to review the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for a more complete description of the Company’s business and accounting policies. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results of operations for the full year. The consolidated balance sheet as of December 31, 2018 was derived from the Company’s audited annual consolidated financial statements. Intercompany transactions and balances have been eliminated.
|
||||||||||||||||||||||||||||||||||||||||||||||||
Estimates and Assumptions | Estimates and Assumptions Preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying disclosures. Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates.
|
||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | Variable Interest Entities Entities that do not have sufficient equity at risk to allow the entity to finance its activities without additional financial support or in which the equity investors, as a group, do not have the characteristic of a controlling financial interest are referred to as variable interest entities (“VIE”). A VIE is consolidated by the variable interest holder that is determined to have the controlling financial interest (primary beneficiary) as a result of having both the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE’s capital structure, contractual terms, nature of the VIE’s operations and purpose, and the Company’s relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE. The Company reassesses its VIE determination with respect to an entity on an ongoing basis. The Company holds interests in VIEs through certain equity method investments included in “other invested assets” in the accompanying condensed consolidated balance sheets. The Company has determined that it should not consolidate any of the VIEs as it is not the primary beneficiary in any of the relationships. Although the investments resulted in the Company holding variable interests in the entities, they did not empower the Company to direct the activities that most significantly impact the economic performance of the entities.
|
||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Expense | Income Tax Expense Our effective tax rate fluctuates from period to period based on the relative mix of income reported by country and the respective tax rates imposed by each tax jurisdiction. For the three months ended June 30, 2019 and 2018, our U.S. federal income tax expense was 18.6% and 8.2% of income before taxes, respectively (14.7% and 8.4% for the six months ended June 30, 2019 and 2018, respectively). For U.S.-sourced income, the Company’s U.S. federal income tax expense differs from the amounts computed by applying the federal statutory income tax rate to income before taxes due primarily to interest income on tax-advantaged state and municipal securities, dividends received income, and excess tax benefits on share based compensation. The effective tax rates for the three and six months ended June 30, 2019 were elevated due to changes in reserve estimates between accident years in the commercial auto business, and the related impact on the mix of income reported by country. Effective January 1, 2018, the Company adopted ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This update was issued as a result of the enactment of the Tax Cuts and Jobs Act of 2017 ("TCJA"). The ASU allows for the option to reclassify the stranded tax effects resulting from the implementation of the TCJA out of accumulated other comprehensive income and into retained earnings.
|
||||||||||||||||||||||||||||||||||||||||||||||||
Adopted and Prospective Accounting Standards | Adopted Accounting Standards Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842). This update requires the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. The Company adopted the new standard using a modified retrospective transition method, applying the transition provisions at the beginning of the period of adoption. The Company elected the package of practical expedients permitted under the transition guidance within the new standard and did not elect to use hindsight in determining the lease term. Upon adoption of the new standard, the Company derecognized assets of $22.6 million and liabilities of $30.9 million associated with a lease that was designated as build-to-suit under the previous guidance, and recorded a cumulative-effect adjustment to retained earnings of $8.3 million. The Company recorded right-of-use assets of $17.2 million and lease liabilities of $17.8 million at adoption of the new standard associated with operating leases for office space in Bermuda, North Carolina, Virginia, Arizona, and Georgia. The new standard did not materially impact the Company's results of operations, earnings per share, or cash flows, and did not impact compliance under the covenants of our current credit agreements. At June 30, 2019, right-of-use assets and lease liabilities were $16.9 million and $17.8 million, respectively. Operating lease costs were $1.2 million and $2.5 million in the three and six months ended June 30, 2019, respectively, compared to $1.1 million and $2.2 million in the respective prior year periods. The weighted-average discount rate and weighted average remaining lease term for operating leases was 4.3% and 5.7 years, respectively, as of June 30, 2019. The table below summarizes maturities of the Company’s operating lease liabilities as of June 30, 2019, which reconciles to total lease liabilities included in other liabilities on the Company’s condensed consolidated balance sheet.
Prospective Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Current GAAP requires the recognition of credit losses when it is probable a loss has been incurred. The update will require financial assets measured at amortized cost, such as bank loan participations held for investment, to be presented at the net amount expected to be collected by means of an allowance for credit losses that is reflected in net income. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which fair value is below amortized cost. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Upon adoption, this ASU will be applied using the modified-retrospective approach, by which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period presented. The Company is in the process of analyzing how adopting this ASU will affect the Company’s financial statements.
|
Accounting Policies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Operating Leases Maturity | The table below summarizes maturities of the Company’s operating lease liabilities as of June 30, 2019, which reconciles to total lease liabilities included in other liabilities on the Company’s condensed consolidated balance sheet.
|
Investments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of summary of available-for-sale investments | The Company’s available-for-sale fixed maturity securities are summarized as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of summary of available-for-sale investments by contractual maturity | The amortized cost and fair value of available-for-sale investments in fixed maturity securities at June 30, 2019 are summarized, by contractual maturity, as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of gross unrealized losses and fair value for available-for-sale securities | The following table shows the Company’s gross unrealized losses and fair value for available-for-sale securities aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of summary of realized gains and losses | The Company’s net realized and unrealized gains and losses on investments are summarized as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other invested assets | The Company invests selectively in private debt and equity opportunities. These investments, which together comprise the Company’s other invested assets, are primarily focused in renewable energy, limited partnerships, and bank holding companies.
months ended June 30, 2019, respectively ($328,000 and $625,000 for the three and six months ended June 30, 2018, respectively).
(d) The Company's Corporate and Other segment holds $4.5 million of subordinated notes issued by a bank holding company for which the Company’s Non-Executive Chairman was previously the Lead Independent Director and an investor and for which one of the Company’s directors was an investor and is currently a lender (the "Bank Holding Company"). Interest on the notes, which mature on August 12, 2023, is fixed at 7.6% per annum. Interest income on the notes was $172,000 in both the six months ended June 30, 2019 and 2018, respectively.
|
Goodwill and Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of gross carrying amounts and accumulated amortization | The gross carrying amounts and accumulated amortization for each major specifically identifiable intangible asset class were as follows:
|
Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of numerator and denominator of basic and diluted earnings per share | The following represents a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations contained in the condensed consolidated financial statements:
|
Reserve for Losses and Loss Adjustment Expenses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liability for Claims and Claims Adjustment Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of beginning and ending reserve balances for losses and loss adjustment expenses | The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses, net of reinsurance, to the gross amounts reported in the condensed consolidated balance sheets:
|
Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of comprehensive income (loss) | The following table summarizes the components of other comprehensive income (loss):
|
Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of summary of company's segment results | The following table summarizes the Company’s segment results:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of underwriting profit of operating segments by individual segment and reconciliation to consolidated income before taxes | The following table reconciles the underwriting profit (loss) of the operating segments by individual segment to consolidated income before taxes:
|
Other Operating Expenses and Other Expenses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Operating Expenses And Other Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other operating expenses | Other operating expenses consist of the following:
|
Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets measured at fair value on a recurring basis | Assets measured at fair value on a recurring basis as of June 30, 2019 are summarized below:
Assets measured at fair value on a recurring basis as of December 31, 2018 are summarized below:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets measured at fair value on a nonrecurring basis | Assets measured at fair value on a nonrecurring basis are summarized below:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of carrying value and fair value | The carrying values and fair values of financial instruments are summarized below:
|
Capital Stock and Equity Awards (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of dividends | The Company declared the following dividends during the first six months of 2019 and 2018:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of summary of option activity | The following table summarizes option activity:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of summary of RSU activity | The following table summarizes RSU activity:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of summary of amount of expense and related tax benefit | Share based compensation expense is recognized on a straight line basis over the vesting period. The amount of expense and related tax benefit is summarized below:
|
Accounting Policies - Summary of Operating Lease Maturities (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Accounting Policies [Abstract] | |
2019 | $ 1,864 |
2020 | 3,680 |
2021 | 3,491 |
2022 | 3,293 |
2023 | 3,099 |
Thereafter | 4,706 |
Total lease payments | 20,133 |
Less imputed interest | (2,347) |
Total operating lease liabilities | $ 17,786 |
Investments - Schedule of Contract Maturities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Cost or Amortized Cost | ||
One year or less | $ 46,982 | |
After one year through five years | 481,646 | |
After five years through ten years | 210,431 | |
After ten years | 95,639 | |
Residential mortgage-backed | 249,452 | |
Commercial mortgage and asset-backed | 216,771 | |
Redeemable preferred stock | 2,025 | |
Total fixed maturity securities, Cost or Amortized Cost | 1,302,946 | $ 1,199,409 |
Fair Value | ||
One year or less | 47,016 | |
After one year through five years | 490,856 | |
After five years through ten years | 218,335 | |
After ten years | 103,950 | |
Residential mortgage-backed | 249,758 | |
Commercial mortgage and asset-backed | 220,076 | |
Redeemable preferred stock | 2,051 | |
Total investments available-for-sale, Fair Value | $ 1,332,042 | $ 1,184,202 |
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
Jun. 30, 2018 |
Dec. 11, 2007 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 181,831 | $ 181,831 | $ 181,831 | |
James River Group, Inc. | ||||
Business Acquisition [Line Items] | ||||
Percentage of outstanding shares | 100.00% |
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Acquired Intangible Assets [Line Items] | ||
Identifiable intangibles not subject to amortization | $ 31,164 | $ 31,164 |
Identifiable intangible assets subject to amortization | ||
Gross Carrying Amount | 11,611 | 11,611 |
Accumulated Amortization | 5,536 | 5,238 |
Total Intangible Assets, Gross | 42,775 | 42,775 |
Trademarks | ||
Acquired Intangible Assets [Line Items] | ||
Identifiable intangibles not subject to amortization | 22,200 | 22,200 |
Insurance licenses and authorities | ||
Acquired Intangible Assets [Line Items] | ||
Identifiable intangibles not subject to amortization | 8,964 | 8,964 |
Broker relationships | ||
Identifiable intangible assets subject to amortization | ||
Gross Carrying Amount | 11,611 | 11,611 |
Accumulated Amortization | $ 5,536 | $ 5,238 |
Life (Years) | 24 years 7 months 6 days |
Earnings Per Share - Narrative (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Stock options and restricted share units ("RSU's") | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of securities excluded from the calculations of diluted earnings per share | 9,735 | 182,246 | 170,310 | 187,502 |
Earnings Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Earnings Per Share [Abstract] | ||||
Net income to shareholders | $ 20,307 | $ 16,984 | $ 43,035 | $ 32,617 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 30,246,420 | 29,882,988 | 30,153,426 | 29,823,982 |
Common share equivalents (in shares) | 442,654 | 410,945 | 427,779 | 419,964 |
Diluted (in shares) | 30,689,074 | 30,293,933 | 30,581,205 | 30,243,946 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.67 | $ 0.57 | $ 1.43 | $ 1.09 |
Common share equivalents (in dollars per share) | (0.01) | (0.01) | (0.02) | (0.01) |
Diluted (in dollars per share) | $ 0.66 | $ 0.56 | $ 1.41 | $ 1.08 |
Reserve for Losses and Loss Adjustment Expenses - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Favorable development on prior year loss reserves | ||||
Reserve for losses and loss adjustment expenses | $ (2,315,000) | $ (2,224,000) | $ (3,283,000) | $ 386,000 |
Excess and Surplus Lines | ||||
Favorable development on prior year loss reserves | ||||
Reserve for losses and loss adjustment expenses | (1,200,000) | 58,000 | (1,200,000) | 1,200,000 |
Specialty Admitted Insurance | ||||
Favorable development on prior year loss reserves | ||||
Reserve for losses and loss adjustment expenses | 1,200,000 | 167,000 | 3,300,000 | 1,500,000 |
Casualty Reinsurance | ||||
Favorable development on prior year loss reserves | ||||
Reserve for losses and loss adjustment expenses | $ (2,400,000) | (2,400,000) | $ (5,300,000) | 2,300,000 |
Accident year 2017 | Excess and Surplus Lines | ||||
Favorable development on prior year loss reserves | ||||
Reserve for losses and loss adjustment expenses | $ 1,900,000 | $ 1,900,000 |
Other Comprehensive Income (Loss) - Summary of Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Unrealized gains (losses) arising during the period, before U.S. income taxes | $ 22,928 | $ (6,633) | $ 44,406 | $ (25,925) |
U.S. income taxes | (1,908) | 155 | (3,355) | 699 |
Unrealized gains (losses) arising during the period, net of U.S. income taxes | 21,020 | (6,478) | 41,051 | (25,226) |
Less reclassification adjustment: | ||||
Net realized investment gains (losses) | 331 | 108 | 103 | (93) |
U.S. income taxes | (43) | (28) | (44) | (28) |
Reclassification adjustment for investment gains (losses) realized in net income | 288 | 80 | 59 | (121) |
Other comprehensive income (loss) | $ 20,732 | $ (6,558) | $ 40,992 | $ (25,105) |
Other Comprehensive Income (Loss) - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Fixed maturity securities | $ 331 | $ 108 | $ 103 | $ (93) |
Bank loan participations | (1,171) | (646) | (2,850) | 474 |
Equity securities, changes in fair values of equity securities | $ 1,900 | $ 521 | $ 5,449 | $ (1,189) |
Segment Information - Narrative (Details) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
segment
|
Jun. 30, 2018
USD ($)
|
|
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 4 | |||
Fee income in Excess and Surplus Lines segment | $ | $ 2.3 | $ 3.7 | $ 5.0 | $ 8.5 |
Segment Information - Summary of Segment Results (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Segment Reporting Information [Line Items] | |||||
Gross written premiums | $ 380,003 | $ 293,378 | $ 707,337 | $ 591,494 | |
Net earned premiums | 199,114 | 208,210 | 389,266 | 409,152 | |
Underwriting profit of insurance segments | 17,008 | 12,834 | 32,060 | 27,500 | |
Net investment income | 17,535 | 16,135 | 36,966 | 29,391 | |
Interest expense | 2,684 | 2,946 | 5,492 | 5,468 | |
Segment revenues | 220,374 | 228,041 | 434,501 | 446,385 | |
Segment goodwill | 181,831 | 181,831 | 181,831 | 181,831 | $ 181,831 |
Segment assets | 3,451,107 | 2,937,376 | 3,451,107 | 2,937,376 | $ 3,136,776 |
Excess and Surplus Lines | |||||
Segment Reporting Information [Line Items] | |||||
Gross written premiums | 260,277 | 165,398 | 446,826 | 332,884 | |
Net earned premiums | 150,921 | 139,127 | 292,593 | 269,098 | |
Underwriting profit of insurance segments | 15,810 | 10,117 | 28,912 | 21,416 | |
Net investment income | 4,229 | 4,350 | 9,773 | 7,392 | |
Interest expense | 0 | 0 | 0 | 0 | |
Segment revenues | 158,574 | 147,012 | 311,011 | 284,339 | |
Segment goodwill | 181,831 | 181,831 | 181,831 | 181,831 | |
Segment assets | 1,122,080 | 907,314 | 1,122,080 | 907,314 | |
Specialty Admitted Insurance | |||||
Segment Reporting Information [Line Items] | |||||
Gross written premiums | 89,472 | 97,100 | 192,425 | 184,501 | |
Net earned premiums | 13,086 | 14,266 | 25,446 | 27,606 | |
Underwriting profit of insurance segments | 1,298 | 988 | 2,921 | 2,611 | |
Net investment income | 918 | 839 | 1,815 | 1,550 | |
Interest expense | 0 | 0 | 0 | 0 | |
Segment revenues | 14,940 | 15,436 | 28,676 | 29,391 | |
Segment goodwill | 0 | 0 | 0 | 0 | |
Segment assets | 721,506 | 566,196 | 721,506 | 566,196 | |
Casualty Reinsurance | |||||
Segment Reporting Information [Line Items] | |||||
Gross written premiums | 30,254 | 30,880 | 68,086 | 74,109 | |
Net earned premiums | 35,107 | 54,817 | 71,227 | 112,448 | |
Underwriting profit of insurance segments | (100) | 1,729 | 227 | 3,473 | |
Net investment income | 11,986 | 9,662 | 23,158 | 17,679 | |
Interest expense | 0 | 0 | 0 | 0 | |
Segment revenues | 46,318 | 64,254 | 92,328 | 129,780 | |
Segment goodwill | 0 | 0 | 0 | 0 | |
Segment assets | 1,544,565 | 1,378,305 | 1,544,565 | 1,378,305 | |
Corporate and other | |||||
Segment Reporting Information [Line Items] | |||||
Gross written premiums | 0 | 0 | 0 | 0 | |
Net earned premiums | 0 | 0 | 0 | 0 | |
Underwriting profit of insurance segments | 0 | 0 | 0 | 0 | |
Net investment income | 402 | 1,284 | 2,220 | 2,770 | |
Interest expense | 2,684 | 2,946 | 5,492 | 5,468 | |
Segment revenues | 542 | 1,339 | 2,486 | 2,875 | |
Segment goodwill | 0 | 0 | 0 | 0 | |
Segment assets | $ 62,956 | $ 85,561 | $ 62,956 | $ 85,561 |
Other Operating Expenses and Other Expenses (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Other Operating Expenses And Other Expenses [Abstract] | ||||
Amortization of policy acquisition costs | $ 23,150 | $ 28,672 | $ 41,771 | $ 58,870 |
Other underwriting expenses of the operating segments | 14,260 | 15,772 | 33,485 | 32,926 |
Other operating expenses of the Corporate and Other segment | 7,433 | 7,307 | 15,339 | 14,738 |
Total | 44,843 | 51,751 | 90,595 | 106,534 |
Other expenses | $ 683 | $ 93 | $ 683 | $ 97 |
Fair Value Measurements - Summary of Assets Fair Value on a Nonrecurring Basis (Details) - Nonrecurring basis - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank loan participations held-for-investment | $ 3,359 | $ 0 |
Quoted Prices in Active Markets for Identical Assets Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank loan participations held-for-investment | 0 | 0 |
Significant Other Observable Inputs Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank loan participations held-for-investment | 0 | 0 |
Significant Unobservable Inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank loan participations held-for-investment | $ 3,359 | $ 0 |
Capital Stock and Equity Awards - Schedule of Dividends (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 28, 2019 |
Apr. 30, 2019 |
Mar. 29, 2019 |
Feb. 20, 2019 |
Jun. 29, 2018 |
May 01, 2018 |
Mar. 30, 2018 |
Feb. 22, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Stockholders' Equity Note [Abstract] | ||||||||||||
Dividend declared per share (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.60 | $ 0.60 | ||||
Total Amount | $ 9,204,804 | $ 9,146,357 | $ 9,066,023 | $ 9,049,476 | $ 18,351,161 | $ 18,115,499 |
Capital Stock and Equity Awards - Equity Incentive Plans (Details) |
Jun. 30, 2019
shares
|
---|---|
2014 LTIP | Non-qualified stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum number of shares available for issuance | 4,171,150 |
Number of shares available for grant | 1,573,528 |
2014 Director Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum number of shares available for issuance | 150,000 |
Number of shares available for grant | 108,594 |
Capital Stock and Equity Awards - Summary of RSU Activity (Details) - RSUs - $ / shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Shares | ||
Unvested, beginning of period (in shares) | 300,142 | 178,882 |
Granted (in shares) | 178,556 | 214,907 |
Vested (in shares) | (111,212) | (63,191) |
Forfeited (in shares) | (9,555) | (4,454) |
Unvested, end of period (in shares) | 357,931 | 326,144 |
Shares | ||
Unvested, beginning of period (in dollars per share) | $ 39.22 | $ 37.93 |
Granted (in dollars per share) | 42.08 | 39.81 |
Vested (in dollars per share) | 39.90 | 40.92 |
Forfeited (in dollars per share) | 40.84 | 41.04 |
Unvested, end of period (in dollars per share) | $ 40.39 | $ 38.55 |
Vesting period (in years) | 3 years | |
Non-employee directors | ||
Shares | ||
Vesting period (in years) | 1 year | |
Minimum | ||
Shares | ||
Vesting period (in years) | 1 year | |
Maximum | ||
Shares | ||
Vesting period (in years) | 5 years |
Capital Stock and Equity Awards - Summary of Share Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Stockholders' Equity Note [Abstract] | ||||
Share based compensation expense | $ 1,810 | $ 1,660 | $ 3,484 | $ 3,115 |
U.S. tax benefit on share based compensation expense | $ 220 | $ 198 | $ 420 | $ 371 |
Capital Stock and Equity Awards - Compensation Expense (Details) $ in Millions |
3 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Equity [Abstract] | |
Unrecognized share based compensation expense | $ 12.0 |
Weighted-average period of unrecognized share based compensation expense (in years) | 2 years |
Subsequent Events (Details) - $ / shares |
6 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2019 |
Sep. 16, 2019 |
Jul. 30, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Subsequent event | |||||
Subsequent Event [Line Items] | |||||
Cash dividend declared (in dollars per share) | $ 0.30 | ||||
Dividends payable, date to be paid | Sep. 30, 2019 | ||||
Dividend payable, record date | Sep. 16, 2019 | ||||
RSUs | |||||
Subsequent Event [Line Items] | |||||
Granted (in shares) | 178,556 | 214,907 | |||
Granted (in dollars per share) | $ 42.08 | $ 39.81 | |||
Vesting period (in years) | 3 years | ||||
RSUs | 2014 LTIP | Subsequent event | |||||
Subsequent Event [Line Items] | |||||
Granted (in shares) | 522 | ||||
Granted (in dollars per share) | $ 47.89 | ||||
Vesting period (in years) | 3 years |
Label | Element | Value |
---|---|---|
Accounting Standards Update 2016-01 [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (4,682,000) |
Accounting Standards Update 2018-02 [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 711,000 |
!U^^S^11
M _ 4@(=:!I#-_ M5M"P$[STQ+'Y'S3<.-UBOS=%,VJ6P[W3R4L_>2D+2(K@9
MHU&S&S3X@R:;-('VGR#8"<'6@,P,,'I@0)P&Q!I$,X,$+9(<)(F5M%829DGD
MAD1.2+2"$)(O*(,FGE%(DB$W)792XC4E6M82KRE1'KHIB9.2."CA@I*L*3@G
M;DKJI*0."EY0TC4%Y;F;DCDIF8-"%I1L18E2E+@IN9.2.RC1@I*O*!B%Y,&2
MA&ULE5C; BFV-JBIDY20
M/&E$U<:KA5U[[%<+==1UU Q5BIV'NWEK5;VU[_0O,32$\@ P'3
MAX2X)\0?A.0A(>D)R?]FH#V!CC*@KG;7S#73+$NE: /9/8>&V5>'Y]1<5VZ#
M[G;<-]-/9:+G+*'3%)VM4(]9=AARA<$XOL6L/9@!@8R#P0;QV5B2.SJY3;"Z
M1V" 8J@N"*(J+YKP<+V\E9>E
MHK[ 0/R]":_MY/NBE_*UKK_U%[_=7R]%WZ*P#7=='Z**'R]A';;;/E)LQ[]C
MT.6ISK[@]/M;]%\&\5',UZH-ZWK[S^:^>[I>NN7B/CQ4S]ON2_WZ:Q@%F>5B
M5/][> G;B/
=A GF8UY2/T/D(<3OX$:B $#^$_P0Z?]Z)
-B6*RC\*+XK,FI'8J?>]
M"$^<'CGVI@S.V(IXA^(=>J\%3VXS=@U$<\QIBN&KF'2)8,B^I.!;*4[\%9QO
MPW>;"G<1OOM'X6&;8+])L(\$^S=+W(KY\%\2MNJI!MO$:7*D-$,7)WGE70;V
MCL
0)/HT:Y'\(! W! &0 'AL+W=O
M
'8J'JPO]'F.&C5S%E,*8UX
MFYY5:Y_G.?][&!Z0S@'I)0#8/P/H'$"=@&2JS+;Z46BQ6O3J'/73V^K$>"C@
MGIK-W(R+=N_L?Z;;P:R>5K3,%LEI3#1C'B9,>H5);Q%K'Y'_A22F@$L5*5I%
M:N/I314YGH"B":A-P&X2%$X;$R:WF-9B6,[+0)T,I6$(3>G03)CLFJ:$G 7:
MR5">#.'A#D_F\:1 & 6<)T=YDJ4IT1XG*/Z4"+;EA=%8-LXRL,1'N;P<)^'I!G. @37)O%YBMP5)_&(@)*4
ML]S5*/'./P#GC 1>)00, WRM\L#N :YV2/]#K3/H1D<%@8", +<%P'S!%>P,
MNF'BI,Q"5+@U .8-KF;!-X<42DI#YP)W!T#LP9,M^/X A/*,!*AP@P#$(3SI
M@F\11KM%5@:H<), S"5<]0)B$^;.4H3>%>X3@!F%*V! G()DH9..&P4@3L&]
MGK@O3$I3PKRO+ *$DAE?<8I*KK[^XW7LF^CW53M$+TJ;BX3]W.^4TM(D)7>F
MP8.Y 5XFM=SI<5B8<3]=@Z:)5MU\Q4LN]\S5'U!+ P04 " !'>0)/2]HD
MS&D% 9'@ &0 'AL+W=OS
MMXO5$VF/W<[\"L_6&)C?X%G27YO>Z?M;W)>T.F9E';R8QA[VNR/YP9A&V_C1
M1QO_R5X<;X-<'YKV5=KWJK\]]8/&G(>;872[GB[_ E!+ P04 " !'>0)/
M VE(:/0" #A"@ &0 'AL+W=O
2LN-@7 $AD2HP5432G$@7P6V]7F
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MGM_1SJNM'*WM&&]V\@[9NMH^'MX W$WNZI=-L[?7;*=CX