Investments (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2012 and December 31, 2011. The tables below includes other-than-temporarily impaired (“OTTI”) securities recognized within other comprehensive income (“OCI”).

	June 30, 2012
			Gross		Gross					OTTI
			Unrealized		Unrealized			Amortized		Recognized
In thousands	Fair Value		Gains		Losses			Cost		in OCI
Fixed maturities:
U.S. Treasury bonds, agency bonds, and foreign government bonds	$	454,523	$	10,330	$	(160	)	$	444,353	$	—
States, municipalities and political subdivisions		426,218		29,960		(115	)		396,373		—
Mortgage-backed and asset-backed securities:
Agency mortgage-backed securities		398,310		17,393		(44	)		380,961		—
Residential mortgage obligations		37,805		44		(1,651	)		39,412		(887	)
Asset-backed securities		54,416		933		(33	)		53,516		—
Commercial mortgage-backed securities		209,273		14,456		(55	)		194,872		—
Subtotal	$	699,804	$	32,826	$	(1,783	)	$	668,761	$	(887	)
Corporate bonds		443,884		18,519		(779	)		426,144		—
Total fixed maturities	$	2,024,429	$	91,635	$	(2,837	)	$	1,935,631	$	(887	)
Equity securities—common stocks		103,649		29,709		(517	)		74,457		—
Short-term investments		161,983		—		—			161,983		—
Cash		45,842		—		—			45,842		—
Total	$	2,335,903	$	121,344	$	(3,354	)	$	2,217,913	$	(887	)

	December 31, 2011
			Gross		Gross					OTTI
			Unrealized		Unrealized			Amortized		Recognized
In thousands	Fair Value		Gains		Losses			Cost		in OCI
Fixed maturities:
U.S. 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 June 30, 2012 are shown in the following table:

	June 30, 2012
			Amortized
In thousands	Fair Value		Cost
Due in one year or less	$	56,876	$	56,483
Due after one year through five years		658,027		641,379
Due after five years through ten years		379,158		353,733
Due after ten years		230,564		215,275
Mortgage- and asset-backed securities		699,804		668,761
Total	$	2,024,429	$	1,935,631

Amount and Percentage of Fixed Maturities and Short-term Investments

The following table shows the amount and percentage of the Company’s fixed maturities as of June 30, 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 at fair value, and the total rating is the weighted average quality rating.

				Percent of
In thousands	Rating	Fair Value		Total
Rating description:
Extremely strong	AAA	$	341,094		17	%
Very strong	AA		1,150,879		56	%
Strong	A		381,490		19	%
Adequate	BBB		132,820		7	%
Speculative	BB & Below		14,282		1	%
Not rated	NR		3,864		0	%
Total		$	2,024,429		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 June 30, 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.

	June 30, 2012						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		13	$	55,371	$	71		7	$	58,587	$	98
7-12 months		—		—		—		—		—		—
> 12 months		1		4,580		89		2		6,883		285
Subtotal		14	$	59,951	$	160		9	$	65,470	$	383
States, municipalities and political subdivisions
0-6 months		5	$	3,805	$	48		7	$	5,894	$	72
7-12 months		5		3,369		46		1		216		1
> 12 months		2		1,580		21		5		2,420		35
Subtotal		12	$	8,754	$	115		13	$	8,530	$	108
Agency mortgage-backed securities
0-6 months		2	$	1,683	$	44		3	$	5,087	$	3
7-12 months		—		—		—		—		—		—
> 12 months		—		—		—		—		—		—
Subtotal		2	$	1,683	$	44		3	$	5,087	$	3
Residential mortgage obligations
0-6 months		1	$	18,163	$	56		6	$	6,672	$	184
7-12 months		7		2,673		88		7		5,250		313
> 12 months		48		12,151		1,507		47		10,749		2,351
Subtotal		56	$	32,987	$	1,651		60	$	22,671	$	2,848
Asset-backed securities
0-6 months		2	$	7,045	$	4		2	$	4,933	$	12
7-12 months		1		369		1		5		6,645		63
> 12 months		5		4,610		28		1		2		—
Subtotal		8	$	12,024	$	33		8	$	11,580	$	75
Commercial mortgage-backed securities
0-6 months		3	$	520	$	1		6	$	5,465	$	29
7-12 months		4		3,754		43		3		6,840		550
> 12 months		4		1,035		11		3		1,503		14
Subtotal		11	$	5,309	$	55		12	$	13,808	$	593
Corporate bonds
0-6 months		3	$	18,246	$	47		52	$	135,516	$	4,539
7-12 months		16		35,128		443		18		27,561		1,457
> 12 months		10		13,406		289		8		14,898		776
Subtotal		29	$	66,780	$	779		78	$	177,975	$	6,772
Total fixed maturities		132	$	187,488	$	2,837		183	$	305,121	$	10,782
Equity securities—common stocks
0-6 months		1	$	1,579	$	469		4	$	3,320	$	587
7-12 months		1		1,540		48		1		1,629		371
> 12 months		—		—		—		—		—		—
Total equity securities		2	$	3,119	$	517		5	$	4,949	$	958

Gross Unrealized Investment Losses

The following table summarizes the gross unrealized investment losses as of June 30, 2012 by the length of time that the fair value continues to be less than 80% of amortized cost:

	June 30, 2012
	Fixed		Equity
In thousands	Maturities		Securities		Total
Less than three months	$	—	$	—	$	—
Longer than three months and less than six months		—		468		468
Longer than six months and less than twelve months		—		—		—
Longer than twelve months		230		—		230
Total	$	230	$	468	$	698

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 June 30,								Six Months Ended June 30,
	2012				2011				2012				2011
In thousands, except # of securities	Number of Securities		Amount		Number of Securities		Amount		Number of Securities		Amount		Number of Securities		Amount
Total OTTI losses:
Corporate and other bonds		—	$	—		—	$	—		—	$	—		—	$	—
Commercial mortgage-backed securities		—		—		—		—		—		—		—		—
Residential mortgage-backed securities		—		—		6		516		1		54		7		549
Asset-backed securities		—		—		—		—		—		—		—		—
Equities		2		496		1		317		3		639		1		547
Total		2	$	496		7	$	833		4	$	693		8	$	1,096
Less: Portion of loss in accumulated other comprehensive income (loss):
Corporate and other bonds			$	—			$	—			$	—			$	—
Commercial mortgage-backed securities				—				—				—				—
Residential mortgage-backed securities				—				301				43				322
Asset-backed securities				—				—				—				—
Equities				—				—				—				—
Total			$	—			$	301			$	43			$	322
Impairment losses recognized in earnings
Corporate and other bonds			$	—			$	—			$	—			$	—
Commercial mortgage-backed securities				—				—				—				—
Residential mortgage-backed securities				—				215				11				227
Asset-backed securities				—				—				—				—
Equities				496				317				639				547
Total			$	496			$	532			$	650			$	774

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 and six months ended June 30, 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 June 30,				Six Months Ended June 30,
In thousands	2012		2011		2012		2011
Beginning balance	$	3,332	$	2,239	$	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		—		215		11		226
Reductions for credit loss impairments previously recognized on securities sold during the period		—		—		—		—
Ending balance	$	3,332	$	2,454	$	3,332	$	2,454

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 June 30, 2012 is presented in the following table:

	June 30, 2012
	Gross Unrealized Losses					Fair Value
			Percent of					Percent of
In thousands	Amount		Total			Amount		Total
Due in one year or less	$	108		4	%	$	11,872		6	%
Due after one year through five years		530		19	%		77,548		41	%
Due after five years through ten years		305		11	%		33,587		18	%
Due after ten years		111		4	%		12,478		7	%
Mortgage- and asset-backed securities		1,783		62	%		52,003		28	%
Total	$	2,837		100	%	$	187,488		100	%

Net Investment Income

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

	Three Months Ended June 30,						Six Months Ended June 30,
In thousands	2012			2011			2012			2011
Fixed maturities	$	15,006		$	16,844		$	30,416		$	34,034
Equity securities		994			859			1,941			1,642
Short-term investments		701			274			1,014			542
Total investment income		16,701			17,977			33,371			36,218
Investment expenses		(924	)		(548	)		(6,336	)		(1,405	)
Net investment income	$	15,777		$	17,429		$	27,035		$	34,813

Change in Net Unrealized Gains/(Losses)

The change in net unrealized gains and losses, inclusive of the change in the non-credit portion of OTTI losses, consisted of:

	Six Months Ended June 30,
In thousands	2012		2011
Fixed maturities	$	17,439	$	21,206
Equity securities		6,910		4,238
Gross unrealized gains (losses)		24,349		25,444
Deferred income tax		7,796		8,573
Change in unrealized gains (losses), net	$	16,553	$	16,871

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

Realized gains and losses, excluding net OTTI losses recognized in earnings, for the periods indicated were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
In thousands	2012			2011			2012			2011
Fixed maturities:
Gains	$	4,717		$	4,443		$	7,858		$	7,312
Losses		(231	)		(2,277	)		(1,530	)		(6,534	)
Fixed maturities, net	$	4,486		$	2,166		$	6,328		$	778
Equity securities:
Gains	$	204		$	840		$	204		$	840
Losses		(473	)		—			(473	)		—
Equity securities, net	$	(269	)	$	840		$	(269	)	$	840
Net realized gains (losses)	$	4,217		$	3,006		$	6,059		$	1,618

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 and described below, the Company’s fixed maturities and equity securities by asset class that are measured at fair value on a recurring basis as of June 30, 2012 and December 31, 2011:

	June 30, 2012
In thousands	Level 1		Level 2		Level 3		Total
Fixed maturities:
U.S. Treasury bonds, agency bonds, and foreign government bonds	$	174,237	$	280,286	$	—	$	454,523
States, municipalities and political subdivisions		—		426,218		—		426,218
Mortgage-backed and asset-backed securities:
Agency mortgage-backed securities		—		398,310		—		398,310
Residential mortgage obligations		—		37,805		—		37,805
Asset-backed securities		—		54,416		—		54,416
Commercial mortgage-backed securities		—		209,273		—		209,273
Subtotal	$	—	$	699,804	$	—	$	699,804
Corporate bonds		—		443,884		—		443,884
Total fixed maturities	$	174,237	$	1,850,192	$	—	$	2,024,429
Equity securities—common stocks		103,649		—		—		103,649
Total	$	277,886	$	1,850,192	$	—	$	2,128,078

	December 31, 2011
In thousands	Level 1		Level 2		Level 3		Total
Fixed maturities:
U.S. 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

	For The Six Months Ended June 30, 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	$	1,837	$	—	$	(26	)	$	(4	)	$	—	$	—	$	—	$	(1,807	)	$	—
Total assets	$	1,837	$	—	$	(26	)	$	(4	)	$	—	$	—	$	—	$	(1,807	)	$	—