Investments (Tables)

9 Months Ended

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

	September 30, 2012
In thousands	Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Amortized Cost		OTTI Recognized in OCI
Fixed maturities:
U.S. Treasury bonds, agency bonds, and foreign government bonds	$	465,215	$	11,881	$	(55	)	$	453,389	$	—
States, municipalities and political subdivisions		443,994		34,451		(66	)		409,609		—
Mortgage-backed and asset-backed securities:
Agency mortgage-backed securities		405,229		17,582		(56	)		387,703		—
Residential mortgage obligations		39,095		711		(837	)		39,221		(278	)
Asset-backed securities		50,897		1,069		(72	)		49,900		—
Commercial mortgage-backed securities		208,742		18,126		(50	)		190,666		—
Subtotal	$	703,963	$	37,488	$	(1,015	)	$	667,490	$	(278	)
Corporate bonds		471,886		26,941		(101	)		445,046		—
Total fixed maturities	$	2,085,058	$	110,761	$	(1,237	)	$	1,975,534	$	(278	)
Equity securities - common stocks		105,930		31,377		(278	)		74,831		—
Short-term investments		187,445		—		—			187,445		—
Cash		36,252		—		—			36,252		—
Total	$	2,414,685	$	142,138	$	(1,515	)	$	2,274,062	$	(278	)

	December 31, 2011
In thousands	Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Amortized Cost		OTTI Recognized 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 September 30, 2012 are shown in the following table:

	September 30, 2012
In thousands	Fair Value		Amortized Cost
Due in one year or less	$	80,858	$	80,272
Due after one year through five years		641,625		618,478
Due after five years through ten years		429,575		397,999
Due after ten years		229,037		211,295
Mortgage- and asset-backed securities		703,963		667,490
Total	$	2,085,058	$	1,975,534

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 September 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.

In thousands	Rating	Fair Value		Percent of Total
Rating description:
Extremely strong	AAA	$	348,008		17	%
Very strong	AA		1,177,602		56	%
Strong	A		380,992		18	%
Adequate	BBB		146,910		7	%
Speculative	BB & Below		14,508		1	%
Not rated	NR		17,038		1	%
Total		$	2,085,058		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 September 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.

	September 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		4	$	16,736	$	34		7	$	58,587	$	98
7-12 months		4		4,682		3		—		—		—
> 12 months		1		4,644		18		2		6,883		285
Subtotal		9	$	26,062	$	55		9	$	65,470	$	383
States, municipalities and political subdivisions
0-6 months		1	$	401	$	2		7	$	5,894	$	72
7-12 months		2		1,473		40		1		216		1
> 12 months		3		2,297		24		5		2,420		35
Subtotal		6	$	4,171	$	66		13	$	8,530	$	108
Agency mortgage-backed securities
0-6 months		5	$	18,901	$	56		3	$	5,087	$	3
7-12 months		—		—		—		—		—		—
> 12 months		—		—		—		—		—		—
Subtotal		5	$	18,901	$	56		3	$	5,087	$	3
Residential mortgage obligations
0-6 months		2	$	550	$	19		6	$	6,672	$	184
7-12 months		—		—		—		7		5,250		313
> 12 months		41		10,356		818		47		10,749		2,351
Subtotal		43	$	10,906	$	837		60	$	22,671	$	2,848
Asset-backed securities
0-6 months		—	$	—	$	—		2	$	4,933	$	12
7-12 months		—		—		—		5		6,645		63
> 12 months		2		2,504		72		1		2		—
Subtotal		2	$	2,504	$	72		8	$	11,580	$	75
Commercial mortgage-backed securities
0-6 months		5	$	2,772	$	8		6	$	5,465	$	29
7-12 months		4		3,777		36		3		6,840		550
> 12 months		4		943		6		3		1,503		14
Subtotal		13	$	7,492	$	50		12	$	13,808	$	593
Corporate bonds
0-6 months		3	$	6,357	$	51		52	$	135,516	$	4,539
7-12 months		—		—		—		18		27,561		1,457
> 12 months		8		14,776		50		8		14,898		776
Subtotal		11	$	21,133	$	101		78	$	177,975	$	6,772
Total fixed maturities		89	$	91,169	$	1,237		183	$	305,121	$	10,782
Equity securities - common stocks
0-6 months		1	$	2,144	$	4		4	$	3,320	$	587
7-12 months		1		1,789		259		1		1,629		371
> 12 months		1		490		15		—		—		—
Total equity securities		3	$	4,423	$	278		5	$	4,949	$	958

Gross Unrealized Investment Losses

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

	September 30, 2012
In thousands	Fixed Maturities		Equity Securities		Total
Less than three months	$	—	$	—	$	—
Longer than three months and less than six months		—		—		—
Longer than six months and less than twelve months		—		—		—
Longer than twelve months		164		—		164
Total	$	164	$	—	$	164

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 September 30,								Nine Months Ended September 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		—		—		10		1,241		1		54		15		1,791
Asset-backed securities		—		—		—		—		—		—		—		—
Equities		—		—		—		—		3		639		1		547
Total		—	$	—		10	$	1,241		4	$	693		16	$	2,338
Less: Portion of loss in accumulated other comprehensive income (loss):
Corporate and other bonds			$	—			$	—			$	—			$	—
Commercial mortgage-backed securities				—				—				—				—
Residential mortgage-backed securities				—				618				43				941
Asset-backed securities				—				—				—				—
Equities				—				—				—				—
Total			$	—			$	618			$	43			$	941
Impairment losses recognized in earnings
Corporate and other bonds			$	—			$	—			$	—			$	—
Commercial mortgage-backed securities				—				—				—				—
Residential mortgage-backed securities				—				623				11				850
Asset-backed securities				—				—				—				—
Equities				—				—				639				547
Total			$	—			$	623			$	650			$	1,397

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 nine months ended September 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 September 30,				Nine Months  Ended September 30,
In thousands	2012		2011		2012		2011
Beginning balance	$	3,332	$	1,885	$	3,321	$	1,658
Additions for credit loss impairments recognized in the current period on securities not previously impaired		—		623		—		850
Additions for credit loss impairments recognized in the current period on securities previously impaired		—		—		11		—
Reductions for credit loss impairments previously recognized on securities sold during the period		—		—		—		—
Ending balance	$	3,332	$	2,508	$	3,332	$	2,508

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 September 30, 2012 is presented in the following table:

	September 30, 2012
	Gross Unrealized Losses					Fair Value
In thousands	Amount		Percent of Total			Amount		Percent of Total
Due in one year or less	$	25		2	%	$	11,387		12	%
Due after one year through five years		112		9	%		19,473		21	%
Due after five years through ten years		27		2	%		5,532		6	%
Due after ten years		58		5	%		14,974		16	%
Mortgage- and asset-backed securities		1,015		82	%		39,803		45	%
Total	$	1,237		100	%	$	91,169		100	%

Net Investment Income

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

	Three Months Ended September 30,						Nine Months Ended September 30,
In thousands	2012			2011			2012			2011
Fixed maturities	$	14,364		$	15,856		$	44,779		$	49,892
Equity securities		989			942			2,930			2,584
Short-term investments		437			205			1,452			745
Total investment income		15,790			17,003			49,161			53,221
Investment expenses		(2,193	)		(744	)		(8,529	)		(2,149	)
Net investment income	$	13,597		$	16,259		$	40,632		$	51,072

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:

	Nine Months Ended September 30,
In thousands	2012		2011
Fixed maturities	$	38,165	$	32,898
Equity securities		8,817		(8,287	)
Gross unrealized gains (losses)		46,982		24,611
Deferred income tax		15,702		8,251
Change in unrealized gains (losses), net	$	31,280	$	16,360

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 September 30,						Nine Months  Ended September 30,
In thousands	2012			2011			2012			2011
Fixed maturities:
Gains	$	4,011		$	3,315		$	11,868		$	10,625
Losses		(216	)		(77	)		(1,746	)		(6,610	)
Fixed maturities, net	$	3,795		$	3,238		$	10,122		$	4,015
Equity securities:
Gains	$	966		$	—		$	1,171		$	841
Losses		—			—			(473	)		—
Equity securities, net	$	966		$	—		$	698		$	841
Net realized gains (losses)	$	4,761		$	3,238		$	10,820		$	4,856

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 September 30, 2012 and December 31, 2011:

	September 30, 2012
In thousands	Level 1		Level 2		Level 3		Total
Fixed maturities:
U.S. Treasury bonds, agency bonds, and foreign government bonds	$	225,747	$	239,468	$	—	$	465,215
States, municipalities and political subdivisions		—		443,994		—		443,994
Mortgage-backed and asset-backed securities:
Agency mortgage-backed securities		—		405,229		—		405,229
Residential mortgage obligations		—		39,095		—		39,095
Asset-backed securities		—		50,897		—		50,897
Commercial mortgage-backed securities		—		208,742		—		208,742
Subtotal	$	—	$	703,963	$	—	$	703,963
Corporate bonds		—		471,886		—		471,886
Total fixed maturities	$	225,747	$	1,859,311	$	—	$	2,085,058
Equity securities - common stocks		105,930		—		—		105,930
Total	$	331,677	$	1,859,311	$	—	$	2,190,988

	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

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 and nine months ended September 30, 2011:

	For The Three Months Ended September 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 Mortgage Obligations	$	4,821	$	—	$	—	$	—	$	—	$	—	$	—	$	(4,821	)	$	—
Total assets	$	4,821	$	—	$	—	$	—	$	—	$	—	$	—	$	(4,821	)	$	—

	For The Nine Months Ended September 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 Mortgage Obligations	$	1,837	$	—	$	—	$	4,821	$	—	$	—	$	—	$	(6,658	)	$	—
Total assets	$	1,837	$	—	$	—	$	4,821	$	—	$	—	$	—	$	(6,658	)	$	—