Investments (Tables)

12 Months Ended

Dec. 31, 2011

Cash and Investments Including Other-Than-Temporarily Impaired ("OTTI") Securities Recognized within Other Comprehensive Income ("OCI")

The following tables set forth the Company’s cash and investments as of December 31, 2011 and 2010. The table below includes other-than-temporarily impaired (“OTTI”) securities recognized within other comprehensive income (“OCI”).

		September 30,		September 30,		September 30,			September 30,		September 30,
	December 31, 2011
			Gross		Gross					OTTI
			Unrealized		Unrealized			Amortized		Recognized
In thousands	Fair Value		Gains		Losses			Cost		in OCI
Fixed maturities:
U.S. Government Treasury bonds, agency bonds, and foreign government bonds	$	336,070	$	8,979	$	(383	)	$	327,474	$	—
States, municipalities and political subdivisions		410,836		28,887		(108	)		382,057		—
Mortgage-backed and asset-backed securities:
Agency mortgage-backed securities		395,860		17,321		(3	)		378,542		—
Residential mortgage obligations		23,148		8		(2,848	)		25,988		(1,682	)
Asset-backed securities		48,934		695		(75	)		48,314		—
Commercial mortgage-backed securities		216,034		10,508		(593	)		206,119		—
Subtotal	$	683,976	$	28,532	$	(3,519	)	$	658,963	$	(1,682	)
Corporate bonds		457,187		15,743		(6,772	)		448,216		—
Total fixed-maturities	$	1,888,069	$	82,141	$	(10,782	)	$	1,816,710	$	(1,682	)
Equity securities - common stocks		95,849		23,240		(958	)		73,567		—
Short-term investments		122,220		—		—			122,220		—
Cash		127,360		—		—			127,360
Total	$	2,233,498	$	105,381	$	(11,740	)	$	2,139,857	$	(1,682	)

		September 30,		September 30,		September 30,			September 30,		September 30,
	December 31, 2010
			Gross		Gross					OTTI
			Unrealized		Unrealized			Amortized		Recognized
In thousands	Fair Value		Gains		Losses			Cost		in OCI
Fixed-maturities:
U.S. Government Treasury bonds, agency bonds, and foreign government bonds	$	324,145	$	5,229	$	(4,499	)	$	323,415	$	—
States, municipalities and political subdivisions		392,250		11,903		(3,805	)		384,152		—
Mortgage-backed and asset-backed securities:
Agency mortgage-backed securities		382,628		10,127		(2,434	)		374,935		—
Residential mortgage obligations		20,463		24		(2,393	)		22,832		(1,646	)
Asset-backed securities		46,093		247		(292	)		46,138		—
Commercial mortgage-backed securities		190,015		4,804		(1,794	)		187,005		—
Subtotal	$	639,199	$	15,202	$	(6,913	)	$	630,910	$	(1,646	)
Corporate bonds		526,651		15,075		(5,545	)		517,121		—
Total fixed-maturities	$	1,882,245	$	47,409	$	(20,762	)	$	1,855,598	$	(1,646	)
Equity securities - common stocks		87,258		22,475		(10	)		64,793		—
Short-term investments		153,057		—		—			153,057		—
Cash		31,768		—		—			31,768		—
Total	$	2,154,328	$	69,884	$	(20,772	)	$	2,105,216	$	(1,646	)

Scheduled Maturity Dates for Fixed Maturity Securities by Number of Years Until Maturity

The contractual maturity dates for fixed maturity securities categorized by the number of years until maturity as of December 31, 2011 are shown in the following table:

		September 30,		September 30,
	December 31, 2011
			Amortized
In thousands	Fair Value		Cost
Due in one year or less	$	65,454	$	64,925
Due after one year through five years		551,225		542,238
Due after five years through ten years		372,275		349,061
Due after ten years		215,139		201,523
Mortgage- and asset-backed securities		683,976		658,963
Total	$	1,888,069	$	1,816,710

Amount and Percentage of Fixed Maturities and Short-term Investments

The table includes fixed maturities and short-term investments at fair value, and the total rating is the weighted average quality rating.

	September 30,		September 30,		September 30,
	December 31, 2011
				Percent of
In thousands	Rating	Fair Value		Total
Rating description:
Extremely strong	AAA	$	291,600		15	%
Very strong	AA		1,048,922		56	%
Strong	A		422,777		22	%
Adequate	BBB		108,299		6	%
Speculative	BB & Below		11,665		1	%
Not rated	NR		4,806		0	%
Total	AA	$	1,888,069		100	%

Summary of Aggregate Fair Value and Gross Unrealized Loss by Length of Time Securities had Continuously been in Gross Unrealized Loss Position as Well as Number of Securities

The following table summarizes all securities in a gross unrealized loss position as of December 31, 2011 and 2010, showing the aggregate fair value and gross unrealized loss by the length of time those securities had continuously been in a gross unrealized loss position as well as the relevant number of securities.

		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
	December 31, 2011						December 31, 2010
In thousands, except # of securities	Number of Securities		Fair Value		Gross Unrealized Loss		Number  of Securities		Fair Value		Gross Unrealized Loss
Fixed maturities:
U.S. Government Treasury bonds, agency bonds, and foreign government bonds
0-6 months		7	$	58,587	$	98		36	$	163,253	$	4,499
7-12 months				—		—		—		—		—
> 12 months		2		6,883		285		—		—		—
Subtotal		9	$	65,470	$	383		36	$	163,253	$	4,499
States, municipalities and political subdivisions
0-6 months		7	$	5,894	$	72		57	$	112,291	$	3,749
7-12 months		1		216		1		1		1,004		20
> 12 months		5		2,420		35		4		1,317		36
Subtotal		13	$	8,530	$	108		62	$	114,612	$	3,805
Agency mortgage-backed securities
0-6 months		3	$	5,087	$	3		36	$	139,226	$	2,434
7-12 months				—		—		—		—		—
> 12 months				—		—		—		—		—
Subtotal		3	$	5,087	$	3		36	$	139,226	$	2,434
Residential mortgage obligations
0-6 months		6	$	6,672	$	184		3	$	3,215	$	20
7-12 months		7		5,250		313		—		—		—
> 12 months		47		10,749		2,351		52		15,939		2,373
Subtotal		60	$	22,671	$	2,848		55	$	19,154	$	2,393
Asset-backed securities
0-6 months		2	$	4,933	$	12		7	$	28,175	$	292
7-12 months		5		6,645		63		—		—		—
> 12 months		1		2		—		1		2		—
Subtotal		8	$	11,580	$	75		8	$	28,177	$	292
Commercial mortgage-backed securities
0-6 months		6	$	5,465	$	29		16	$	78,212	$	1,755
7-12 months		3		6,840		550		—		—		—
> 12 months		3		1,503		14		2		491		39
Subtotal		12	$	13,808	$	593		18	$	78,703	$	1,794
Corporate bonds
0-6 months		52	$	135,516	$	4,539		98	$	214,180	$	5,545
7-12 months		18		27,561		1,457		—		—		—
> 12 months		8		14,898		776		—		—		—
Subtotal		78	$	177,975	$	6,772		98	$	214,180	$	5,545
Total fixed maturities		183	$	305,121	$	10,782		313	$	757,305	$	20,762
Equity securities - common stocks
0-6 months		4	$	3,320	$	587		1	$	322	$	10
7-12 months		1		1,629		371		—		—		—
> 12 months		—		—		—		—		—		—
Total equity securities		5	$	4,949	$	958		1	$	322	$	10

Gross Unrealized Investment Losses

The following table summarizes the gross unrealized investment losses as of December 31, 2011 by length of time where the fair value is less than 80% of amortized cost.

		September 30,			September 30,			September 30,		September 30,			September 30,
	Period for Which Fair Value is Less than 80% of Amortized Cost
In thousands	Less than 3 months			Longer than 3 months, less than 6 months			6 months or longer, less than 12 months		12 months or longer			Total
Fixed maturities	$	—		$	—		$	—	$	(1,039	)	$	(1,039	)
Equity securities		(243	)		(103	)		—		—			(346	)
Total	$	(243	)	$	(103	)	$	—	$	(1,039	)	$	(1,385	)

Summary of Activity Related to OTTI Losses

The table below summarizes the Company’s activity related to OTTI losses for the periods indicated:

		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
	Year Ended December 31,
	2011				2010				2009
In thousands, except # of securities	Number of Securities		Amount		Number  of Securities		Amount		Number of Securities		Amount
Total other than temporary impairment losses:
Corporate and other bonds		1	$	109		—	$	—		2	$	564
Commercial mortgage-backed securities		—		—		—		—		—		—
Residential mortgage-backed securities		19		2,616		18		1,835		39		19,783
Asset-backed securities		—		—		—		—		1		143
Equities		2		892		2		387		56		8,775
Total		22	$	3,617		20	$	2,222		98	$	29,265
Less: Portion of loss in accumulated other comprehensive income (loss):
Corporate and other bonds			$	—			$	—			$	—
Commercial mortgage-backed securities				—				—				—
Residential mortgage-backed securities				1,632				1,142				17,324
Asset-backed securities				—				—				64
Equities				—				—				—
Total			$	1,632			$	1,142			$	17,388
Impairment losses recognized in earnings:
Corporate and other bonds			$	109			$	—			$	564
Commercial mortgage-backed securities				—				—				—
Residential mortgage-backed securities				984				693				2,458
Asset-backed securities				—				—				80
Equities				892				387				8,775
Total			$	1,985			$	1,080			$	11,877

Summary of Cumulative Amounts Related to Credit Loss Portion of the OTTI Losses on Debt Securities

The following table summarizes the cumulative amounts related to the Company’s credit loss portion of the OTTI losses on debt securities for the periods ended December 31, 2011, 2010 and 2009. The Company does not intend to sell and it is more likely than not that it will not be required to sell the securities prior to recovery of the amortized cost basis and for which the non-credit loss portion is included in other comprehensive income:

		September 30,		September 30,			September 30,
	Year Ended December 31,
In thousands	2011		2010			2009
Beginning balance	$	2,228	$	2,523		$	—
Additions for credit loss impairments recognized in the current period on securities not previously impaired		109		271			3,102
Additions for credit loss impairments recognized in the current period on securities previously impaired		984		422			—
Reductions for credit loss impairments previously recognized on securities sold during the period		—		(988	)		(579	)
Ending balance	$	3,321	$	2,228		$	2,523

Contractual Maturity by Number of Years Until Maturity for Fixed Maturity Securities with a Gross Unrealized Loss

The contractual maturity dates for fixed maturity securities categorized by the number of years until maturity, with a gross unrealized loss as of December 31, 2011 is presented in the following table:

		September 30,		September 30,			September 30,		September 30,
	December 31, 2011
	Gross Unrealized Losses					Fair Value
In thousands	Amount		Percent of Total			Amount		Percent of Total
Due in one year or less	$	8		0	%	$	5,570		2	%
Due after one year through five years		4,992		46	%		190,234		62	%
Due after five years through ten years		1,786		17	%		42,649		14	%
Due after ten years		477		4	%		13,522		4	%
Mortgage- and asset-backed securities		3,519		33	%		53,146		18	%
Total	$	10,782		100	%	$	305,121		100	%

Net Investment Income

The Company’s net investment income was derived from the following sources:

		September 30,			September 30,			September 30,
	Year Ended December 31,
In thousands	2011			2010			2009
Fixed maturities	$	65,060		$	69,996		$	74,779
Equity securities		5,071			3,028			2,464
Short-term investments		964			965			811
		71,095			73,989			78,054
Investment expenses		(7,595	)		(2,327	)		(2,542	)
Net investment income	$	63,500		$	71,662		$	75,512

Change in Net Unrealized Gains/(Losses)

The change in net unrealized gains/(losses), inclusive of the change in the non credit portion of other-than-temporary impairment losses, consisted of:

		September 30,			September 30,			September 30,
	Year Ended December 31,
In thousands	2011			2010			2009
Fixed maturities	$	44,712		$	(12,039	)	$	59,667
Equity securities		(183	)		7,231			15,955
Gross unrealized gains (losses)		44,529			(4,808	)		75,622
Deferred income tax		15,143			(1,324	)		25,602
Change in net unrealized gains (losses), net	$	29,386		$	(3,484	)	$	50,020

Realized Gains and Losses Excluding Net Other-Than-Temporary Impairment Losses Recognized in Earnings

Realized gains/(losses), excluding net other-than-temporary impairment losses recognized in earnings, for the periods indicated were as follows:

		September 30,			September 30,			September 30,
	Year Ended December 31,
In thousands	2011			2010			2009
Fixed maturities:
Gains	$	11,678		$	42,932		$	18,312
Losses		(7,044	)		(3,239	)		(9,676	)
Fixed maturities, net	$	4,634		$	39,693		$	8,636
Equity securities:
Gains	$	9,319		$	1,867		$	2,110
Losses		(1,957	)		(241	)		(1,529	)
Equity securities, net	$	7,362		$	1,626		$	581
Net realized gains (losses)	$	11,996		$	41,319		$	9,217

Fixed Maturities and Equity Securities by Asset Class that are Measured at Fair Value

The following tables present, for each of the fair value hierarchy levels as defined in ASC 820, Fair Value Measurements, the Company’s fixed maturities and equity securities by asset class that are measured at fair value as of December 31, 2011 and 2010:

		September 30,		September 30,		September 30,		September 30,
	December 31, 2011
In thousands	Level 1		Level 2		Level 3		Total
Fixed-maturities:
U.S. Government Treasury bonds, agency bonds, and foreign government bonds	$	136,625	$	199,445	$	—	$	336,070
States, municipalities and political subdivisions		—		410,836		—		410,836
Mortgage-backed and asset-backed securities:								—
Agency mortgage-backed securities		—		395,860		—		395,860
Residential mortgage obligations		—		23,148		—		23,148
Asset-backed securities		—		48,934		—		48,934
Commercial mortgage-backed securities		—		216,034		—		216,034
Subtotal	$	—	$	683,976	$	—	$	683,976
Corporate bonds		—		457,187		—		457,187
Total fixed-maturities	$	136,625	$	1,751,444	$	—	$	1,888,069
Equity securities - common stocks		95,849		—		—		95,849
Total	$	232,474	$	1,751,444	$	—	$	1,983,918

		September 30,		September 30,		September 30,		September 30,
	December 31, 2010
In thousands	Level 1		Level 2		Level 3		Total
Fixed-maturities:
U.S. Government Treasury bonds, agency bonds, and foreign government bonds	$	212,933	$	111,212	$	—	$	324,145
States, municipalities and political subdivisions		—		392,250		—		392,250
Mortgage-backed and asset-backed securities:								—
Agency mortgage-backed securities		—		382,628		—		382,628
Residential mortgage obligations		—		20,463		—		20,463
Asset-backed securities		—		46,093		—		46,093
Commercial mortgage-backed securities		—		188,178		1,837		190,015
Subtotal	$	—	$	637,362	$	1,837	$	639,199
Corporate bonds		—		526,651		—		526,651
Total fixed-maturities	$	212,933	$	1,667,475	$	1,837	$	1,882,245
Equity securities - common stocks		87,258		—		—		87,258
Total	$	300,191	$	1,667,475	$	1,837	$	1,969,503

Reconciliation of Beginning and Ending Balances for All Investments Measured at Fair Value Using Level 3 Inputs

The following tables present a reconciliation of the beginning and ending balances for all investments measured at fair value using Level 3 inputs for the years ended December 31, 2011, 2010, and 2009.

		xxxxxx		xxxxxx		xxxxxx			xxxxxx		xxxxxx			xxxxxx		xxxxxx		xxxxxx			xxxxxx
	Year Ended December 31, 2011
			Realized		Unrealized										Transfers		Transfers
	Beginning		Gains		Gains										into		out of			Ending
In thousands	Balance		(Losses)		(Losses)			Purchases		Sales			Settlements		Level 3		Level 3			Balance
Assets:
Commercial
Mortgage Obligations	$	1,837	$	—	$	94		$	—	$	—		$	—	$	—	$	(1,931	)	$	—
Total assets	$	1,837	$	—	$	94		$	—	$	—		$	—	$	—	$	(1,931	)	$	—
	Year Ended December 31, 2010
	Beginning		Realized Gains		Unrealized Gains										Transfers into		Transfers out of			Ending
In thousands	Balance		(Losses)		(Losses)			Purchases		Sales			Settlements		Level 3		Level 3			Balance
Assets:
Commercial
Mortgage Obligations	$	—	$	—	$	(19	)	$	1,856	$	—		$	—	$	—	$	—		$	1,837
Total assets	$	—	$	—	$	(19	)	$	1,856	$	—		$	—	$	—	$	—		$	1,837
	Year Ended December 31, 2009
	Beginning		Realized Gains		Unrealized Gains										Transfers into		Transfers out of			Ending
In thousands	Balance		(Losses)		(Losses)			Purchases		Sales			Settlements		Level 3		Level 3			Balance
Assets:
Commercial
Mortgage Obligations	$	156	$	—	$	23		$	—	$	(23	)	$	—	$	—	$	(156	)	$	—
Total assets	$	156	$	—	$	23		$	—	$	(23	)	$	—	$	—	$	(156	)	$	—