Quarterly Financial Information

12 Months Ended

Dec. 31, 2011

Quarterly Financial Information [Abstract]

Quarterly Financial Information

19. Quarterly Financial Information (Unaudited)

Summarized quarterly financial data for 2011 and 2010 are as follows:

	Quarter Ended
	March 31		June 30			September 30			December 31
	(Amounts in thousands, except per share data)
2011
Net premiums earned	$	638,487	$	642,331		$	643,626		$	641,613
Change in fair value of investments pursuant to the fair value option	$	20,904	$	20,597		$	(64,312	)	$	54,100
Income (loss) before income taxes	$	76,911	$	75,613		$	(18,118	)	$	110,693
Net income (loss)	$	58,226	$	57,251		$	(3,782	)	$	79,469
Basic earnings per share	$	1.06	$	1.04		$	(0.07	)	$	1.45
Diluted earnings per share	$	1.06	$	1.04		$	(0.07	)(1)	$	1.45
Dividends declared per share	$	0.60	$	0.60		$	0.60		$	0.61
2010
Net premiums earned	$	640,614	$	642,717		$	642,558		$	640,796
Change in fair value of investments pursuant to the fair value option	$	18,939	$	(30,537	)	$	87,647		$	(29,469	)
Income (loss) before income taxes	$	81,290	$	15,358		$	135,839		$	(50,097	)
Net income (loss)	$	61,179	$	17,817		$	96,849		$	(23,647	)
Basic earnings per share	$	1.12	$	0.33		$	1.77		$	(0.43	)
Diluted earnings per share	$	1.12	$	0.32		$	1.77		$	(0.43	)(1)
Dividends declared per share	$	0.59	$	0.59		$	0.59		$	0.60

(1) The dilutive impact of incremental shares is excluded from loss position in accordance with GAAP.

Net income during 2011 was mainly affected by lower policy acquisition costs and operating expenses, offset by unfavorable development on loss reserves. The lower policy acquisition costs are due to the lower premium deficiency reserve and declines in other underwriting costs including agent contingent commissions. The operating expenses in 2011 decreased as a result of decreased consulting, advertising, and information technology expenditures. The unfavorable development of loss reserves is largely the result of re-estimates of California BI losses. The primary causes of the net loss during the third quarter of 2011 were driven by declines in the fair value of the Company's equity securities due to the overall decline in the equity markets.

Net income during 2010 was mainly affected by lower net premiums earned and higher total losses incurred, slightly offset by favorable development on loss reserves, and lower gains due to changes in the fair value of the Company's investment portfolio. The favorable development of loss reserves is largely the result of re-estimates of California BI losses. Declines in income during the second quarter of 2010 were driven by declines in the fair value of the Company's equity securities due to the overall decline in the equity markets, especially in the oil sector as a result of the oil spill in the Gulf of Mexico. The primary causes of the net loss during the fourth quarter of 2010 were declines in the fair value of the Company's municipal securities due to the overall decline in the municipal markets, severe losses in California from heavy rainstorms, and increased losses and a premium deficiency reserve recorded in the Florida homeowners line of business.