Investments (Tables)

3 Months Ended

Mar. 31, 2012

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 March 31, 2012 and December 31, 2011. The table below includes other-than-temporarily impaired (“OTTI”) securities recognized within other comprehensive income (“OCI”).

	As of March 31, 2012
In thousands	Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Amortized Cost		OTTI Recognized in OCI
Fixed maturities:
U.S. Government Treasury bonds, agency bonds, and foreign government bonds	$	418,876	$	8,032	$	(856	)	$	411,700	$	—
States, municipalities and political subdivisions		398,399		28,185		(156	)		370,370		—
Mortgage-backed and asset-backed securities:
Agency mortgage-backed securities		385,239		16,240		(7	)		369,006		—
Residential mortgage obligations		20,254		35		(2,009	)		22,228		(1,037	)
Asset-backed securities		49,077		874		(45	)		48,248		—
Commercial mortgage-backed securities		212,609		13,248		(76	)		199,437		—
Subtotal	$	667,179	$	30,397	$	(2,137	)	$	638,919	$	(1,037	)
Corporate bonds		459,109		17,945		(923	)		442,087		—
Total fixed maturities	$	1,943,563	$	84,559	$	(4,072	)	$	1,863,076	$	(1,037	)
Equity securities — common stocks		102,400		27,263		(342	)		75,479		—
Short-term investments		202,977		—		—			202,977		—
Cash		45,508		—		—			45,508		—
Total	$	2,294,448	$	111,822	$	(4,414	)	$	2,187,040	$	(1,037	)

	As of December 31, 2011
In thousands	Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Amortized Cost		OTTI Recognized 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	)

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 March 31, 2012 are shown in the following table:

	As of March 31, 2012
In thousands	Fair Value		Amortized Cost
Due in one year or less	$	46,615	$	46,244
Due after one year through five years		627,418		611,661
Due after five years through ten years		385,720		363,151
Due after ten years		216,631		203,101
Mortgage- and asset-backed securities		667,179		638,919
Total	$	1,943,563	$	1,863,076

Amount and Percentage of Fixed Maturities and Short-term Investments

The following table shows the amount and percentage of the Company’s fixed maturities and short-term investments at March 31, 2012 by S&P credit rating or, if an S&P rating is not available, the equivalent Moody’s Investor Services (“Moody’s”) rating. The table includes fixed maturities and short-term investments at fair value, and the total rating is the weighted average quality rating.

In thousands	Rating	Fair Value		Percent of Total
Rating description:
Extremely strong	AAA	$	316,690		16	%
Very strong	AA		1,076,193		56	%
Strong	A		411,864		21	%
Adequate	BBB		123,112		6	%
Speculative	BB & Below		11,833		1	%
Not rated	NR		3,871		0	%
Total	AA	$	1,943,563		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 March 31, 2012 and December 31, 2011, 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.

	As of March 31, 2012						As of December 31, 2011
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		28	$	173,094	$	755		7	$	58,587	$	98
7-12 months		—		—		—		—		—		—
> 12 months		2		7,060		101		2		6,883		285
Subtotal		30	$	180,154	$	856		9	$	65,470	$	383
States, municipalities and political subdivisions
0-6 months		6	$	6,731	$	99		7	$	5,894	$	72
7-12 months		2		1,906		34		1		216		1
> 12 months		3		1,717		23		5		2,420		35
Subtotal		11	$	10,354	$	156		13	$	8,530	$	108
Agency mortgage-backed securities
0-6 months		4	$	7,368	$	7		3	$	5,087	$	3
7-12 months		—		—		—		—		—		—
> 12 months		—		—		—		—		—		—
Subtotal		4	$	7,368	$	7		3	$	5,087	$	3
Residential mortgage obligations
0-6 months		3	$	787	$	100		6	$	6,672	$	184
7-12 months		5		2,534		101		7		5,250		313
> 12 months		47		11,780		1,808		47		10,749		2,351
Subtotal		55	$	15,101	$	2,009		60	$	22,671	$	2,848
Asset-backed securities
0-6 months		—	$	—	$	—		2	$	4,933	$	12
7-12 months		4		5,291		45		5		6,645		63
> 12 months		1		2		—		1		2		—
Subtotal		5	$	5,293	$	45		8	$	11,580	$	75
Commercial mortgage-backed securities
0-6 months		7	$	9,311	$	45		6	$	5,465	$	29
7-12 months		2		185		6		3		6,840		550
> 12 months		2		1,040		25		3		1,503		14
Subtotal		11	$	10,536	$	76		12	$	13,808	$	593
Corporate bonds
0-6 months		9	$	37,306	$	138		52	$	135,516	$	4,539
7-12 months		20		39,538		575		18		27,561		1,457
> 12 months		6		7,900		210		8		14,898		776
Subtotal		35	$	84,744	$	923		78	$	177,975	$	6,772
Total fixed maturities		151	$	313,550	$	4,072		183	$	305,121	$	10,782
Equity securities-common stocks
0-6 months		1	$	2,032	$	15		4	$	3,320	$	587
7-12 months		2		3,262		327		1		1,629		371
> 12 months		—		—		—		—		—		—
Total equity securities		3	$	5,294	$	342		5	$	4,949	$	958

Gross Unrealized Investment Losses

The following table summarizes the gross unrealized investment losses as of March 31, 2012 by length of time where the fair value is less than 80% of amortized cost.

	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	$	—	$	—	$	—	$	(547	)	$	(547	)
Equity securities		—		—		—		—			—
Total	$	—	$	—	$	—	$	(547	)	$	(547	)

Summary of Activity Related to OTTI Losses

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

	Three Months Ended March 31,
	2012				2011
In thousands, except # of securities	Number of Securities		Amount		Number of Securities		Amount
Total other-than-temporary impairment losses:
Corporate and other bonds		—	$	—		—	$	—
Commercial mortgage-backed securities		—		—		—		—
Residential mortgage-backed securities		1		55		1		33
Asset-backed securities		—		—		—		—
Equities		2		143		1		230
Total		3	$	198		2	$	263
Less: Portion of loss in accumulated other comprehensive income (loss):
Corporate and other bonds			$	—			$	—
Commercial mortgage-backed securities				—				—
Residential mortgage-backed securities				44				22
Asset-backed securities				—				—
Equities				—				—
Total			$	44			$	22
Impairment losses recognized in earnings
Corporate and other bonds			$	—			$	—
Commercial mortgage-backed securities				—				—
Residential mortgage-backed securities				11				11
Asset-backed securities				—				—
Equities				143				230
Total			$	154			$	241

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 three months ended March 31, 2012 and 2011. 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:

	Three Months Ended March 31,
In thousands	2012		2011
Beginning balance	$	3,321	$	2,228
Additions for credit loss impairments recognized in the current period on securities not previously impaired		—		—
Additions for credit loss impairments recognized in the current period on securities previously impaired		11		11
Reductions for credit loss impairments previously recognized on securities sold during the period		—		—
Ending balance	$	3,332	$	2,239

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 March 31, 2012 is presented in the following table:

	As of March 31, 2012
	Gross Unrealized Losses					Fair Value
In thousands	Amount		Percent of Total			Amount		Percent of Total
Due in one year or less	$	102		3	%	$	12,586		4	%
Due after one year through five years		938		23	%		183,891		58	%
Due after five years through ten years		694		17	%		52,004		17	%
Due after ten years		201		5	%		26,771		9	%
Mortgage- and asset-backed securities		2,137		52	%		38,298		12	%
Total	$	4,072		100	%	$	313,550		100	%

Net Investment Income

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

	Three Months Ended March 31,
In thousands	2012			2011
Fixed maturities	$	15,411		$	17,192
Equity securities		947			783
Short-term investments		312			267
Total investment income		16,670			18,242
Investment expenses		(5,412	)		(858	)
Net investment income	$	11,258		$	17,384

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:

	Three Months Ended March 31,
In thousands	2012		2011
Fixed maturities	$	9,128	$	(3,640	)
Equity securities		4,639		3,861
Gross unrealized gains (losses)		13,767		221
Deferred income tax		4,818		183
Change in net unrealized gains (losses), net	$	8,949	$	38

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:

	Three Months Ended March 31,
In thousands	2012			2011
Fixed maturities:
Gains	$	3,142		$	2,867
Losses		(1,300	)		(4,256	)
Fixed maturities, net	$	1,842		$	(1,389	)
Equity securities:
Gains	$	—		$	—
Losses		—			—
Equity securities, net	$	—		$	—
Net realized gains (losses)	$	1,842		$	(1,389	)

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 by the accounting guidance for fair value measurements, the Company’s fixed maturities and equity securities by asset class that are measured at fair value on a recurring basis as of March 31, 2012 and December 31, 2011:

	As of March 31, 2012
In thousands	Level 1		Level 2		Level 3		Total
Fixed maturities:
U.S. Government Treasury bonds, agency bonds, and foreign government bonds	$	181,701	$	237,175	$	—	$	418,876
States, municipalities and political subdivisions		—		398,399		—		398,399
Mortgage-backed and asset-backed securities:								—
Agency mortgage-backed securities		—		385,239		—		385,239
Residential mortgage obligations		—		20,254		—		20,254
Asset-backed securities		—		49,077		—		49,077
Commercial mortgage-backed securities		—		212,609		—		212,609
Subtotal	$	—	$	667,179	$	—	$	667,179
Corporate bonds		—		459,109		—		459,109
Total fixed maturities	$	181,701	$	1,761,862	$	—	$	1,943,563
Equity securities-common stocks		102,400		—		—		102,400
Total	$	284,101	$	1,761,862	$	—	$	2,045,963

	As of 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

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 during the three months ended March 31, 2011:

	For The Three Months Ended March 31, 2011
In thousands	Beginning Balance		Realized Gains (Losses)		Unrealized Gains (Losses)			Purchases		Sales			Settlements		Transfers into Level 3		Transfers out of Level 3			Ending Balance
Assets:
Commercial Mortgage Obligations	$	1,837	$	—	$	(26	)	$	—	$	(4	)	$	—	$	—	$	(1,807	)	$	—
Total assets	$	1,837	$	—	$	(26	)	$	—	$	(4	)	$	—	$	—	$	(1,807	)	$	—