Investments (Tables)

12 Months Ended

Dec. 31, 2013

Cash and Investments Including Other-Than-Temporarily Impaired Securities Recognized within Other Comprehensive Income

The following tables set forth the Company’s cash and investments as of December 31, 2013 and 2012. The tables below include OTTI securities recognized within AOCI.

	December 31, 2013
			Gross		Gross
			Unrealized		Unrealized			Amortized
In thousands	Fair Value		Gains		Losses			Cost
Fixed maturities:
U.S. Treasury bonds, agency bonds and foreign government bonds	$	441,685	$	2,854	$	(8,855	)	$	447,686
States, municipalities and political subdivisions		460,422		9,298		(13,651	)		464,775
Mortgage-backed and asset-backed securities:
Agency mortgage-backed securities		301,274		6,779		(6,016	)		300,511
Residential mortgage obligations		41,755		1,212		(161	)		40,704
Asset-backed securities		125,133		653		(480	)		124,960
Commercial mortgage-backed securities		172,750		7,656		(374	)		165,468
Subtotal	$	640,912	$	16,300	$	(7,031	)	$	631,643
Corporate bonds		504,854		15,402		(3,443	)		492,895
Total fixed maturities	$	2,047,873	$	43,854	$	(32,980	)	$	2,036,999
Equity securities—common stocks		143,954		25,700		(550	)		118,804
Short-term investments		296,250		—		—			296,250
Cash		86,509		—		—			86,509
Total	$	2,574,586	$	69,554	$	(33,530	)	$	2,538,562

	December 31, 2012
			Gross		Gross
			Unrealized		Unrealized			Amortized
In thousands	Fair Value		Gains		Losses			Cost
Fixed maturities:
U.S. Treasury bonds, agency bonds and foreign government bonds	$	649,692	$	8,654	$	(36	)	$	641,074
States, municipalities and political subdivisions		322,947		18,712		(380	)		304,615
Mortgage-backed and asset-backed securities:
Agency mortgage-backed securities		384,445		13,652		(204	)		370,997
Residential mortgage obligations		38,692		1,053		(549	)		38,188
Asset-backed securities		50,382		1,133		(49	)		49,298
Commercial mortgage-backed securities		204,821		17,996		(18	)		186,843
Subtotal	$	678,340	$	33,834	$	(820	)	$	645,326
Corporate bonds		470,854		27,129		(25	)		443,750
Total fixed maturities	$	2,121,833	$	88,329	$	(1,261	)	$	2,034,765
Equity securities—common stocks		101,297		16,919		(626	)		85,004
Short-term investments		153,788		—		—			153,788
Cash		45,336		—		—			45,336
Total	$	2,422,254	$	105,248	$	(1,887	)	$	2,318,893

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, 2013 are shown in the following table:

	December 31, 2013
			Amortized
In thousands	Fair Value		Cost
Due in one year or less	$	85,240	$	84,691
Due after one year through five years		627,515		615,267
Due after five years through ten years		443,197		446,918
Due after ten years		251,009		258,480
Mortgage- and asset-backed securities		640,912		631,643
Total	$	2,047,873	$	2,036,999

Amount and Percentage of Fixed Maturities by Rating

The following table shows the amount and percentage of the Company’s fixed maturities as of December 31, 2013 by Standard & Poor’s (“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.

	December 31, 2013
				Percent
In thousands	Rating	Fair Value		of Total
Rating description:
Extremely strong	AAA	$	348,908		17	%
Very strong	AA		1,047,155		51	%
Strong	A		452,455		22	%
Adequate	BBB		184,302		9	%
Speculative	BB & Below		11,500		1	%
Not rated	NR		3,553		0	%
Total	AA	$	2,047,873		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, 2013 and 2012, 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.

	December 31, 2013						December 31, 2012
					Gross						Gross
	Number of				Unrealized		Number of				Unrealized
In thousands, except # of securities	Securities		Fair Value		Loss		Securities		Fair Value		Loss
Fixed maturities:
U.S. Treasury bonds, agency bonds, and foreign government bonds
0-6 months		27	$	136,360	$	1,096		8	$	23,760	$	22
7-12 months		26		149,370		7,759		3		14,118		11
> 12 months		—		—		—		1		4,652		3
Subtotal		53	$	285,730	$	8,855		12	$	42,530	$	36
States, municipalities and political subdivisions
0-6 months		28	$	40,132	$	297		10	$	21,299	$	325
7-12 months		104		205,152		12,100		—		—		—
> 12 months		6		12,357		1,254		4		2,908		55
Subtotal		138	$	257,641	$	13,651		14	$	24,207	$	380
Agency mortgage-backed securities
0-6 months		39	$	39,458	$	434		10	$	62,516	$	174
7-12 months		64		77,860		3,768		2		1,671		30
> 12 months		9		22,784		1,814		—		—		—
Subtotal		112	$	140,102	$	6,016		12	$	64,187	$	204
Residential mortgage obligations
0-6 months		3	$	431	$	2		6	$	1,825	$	22
7-12 months		7		950		29		—		—		—
> 12 months		15		2,467		130		35		7,252		527
Subtotal		25	$	3,848	$	161		41	$	9,077	$	549
Asset-backed securities
0-6 months		14	$	75,887	$	479		—	$	—	$	—
7-12 months		1		203		1		—		—		—
> 12 months		—		—		—		2		2,369		49
Subtotal		15	$	76,090	$	480		2	$	2,369	$	49
Commercial mortgage-backed securities
0-6 months		4	$	6,712	$	31		7	$	2,639	$	7
7-12 months		2		15,098		322		—		—		—
> 12 months		4		774		21		5		845		11
Subtotal		10	$	22,584	$	374		12	$	3,484	$	18
Corporate bonds
0-6 months		34	$	93,591	$	717		2	$	3,528	$	6
7-12 months		18		55,021		2,726		—		—		—
> 12 months		—		—		—		4		6,689		19
Subtotal		52	$	148,612	$	3,443		6	$	10,217	$	25
Total fixed maturities		405	$	934,607	$	32,980		99	$	156,071	$	1,261
Equity securities—common stocks
0-6 months		5	$	7,387	$	422		13	$	23,345	$	522
7-12 months		2		3,538		128		1		1,943		104
> 12 months		—		—		—		—		—		—
Total equity securities		7	$	10,925	$	550		14	$	25,288	$	626

Summary of Activity Related to Other-Than-Temporary Impairment Losses

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

	Year Ended December 31,
	2013				2012				2011
	Number of				Number of				Number of
In thousands, except # of securities	Securities		Amount		Securities		Amount		Securities		Amount
Total OTTI losses:
Corporate and other bonds		1	$	1,822		—	$	—		1	$	109
Commercial mortgage-backed securities		—		—		—		—		—		—
Residential mortgage-backed securities		—		—		1		55		19		2,616
Asset-backed securities		—		—		—		—		—		—
Equities		3		571		3		847		2		892
Total		4	$	2,393		4	$	902		22	$	3,617
Less: Portion of loss in accumulated other comprehensive income (loss):
Corporate and other bonds			$	—			$	—			$	—
Commercial mortgage-backed securities				—				—				—
Residential mortgage-backed securities				—				44				1,632
Asset-backed securities				—				—				—
Equities				—				—				—
Total			$	—			$	44			$	1,632
Impairment losses recognized in earnings:
Corporate and other bonds			$	1,822			$	—			$	109
Commercial mortgage-backed securities				—				—				—
Residential mortgage-backed securities				—				11				984
Asset-backed securities				—				—				—
Equities				571				847				892
Total			$	2,393			$	858			$	1,985

Summary of Cumulative Amounts Related to Credit Loss Portion of Other-Than-Temporary Impairment 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 years ended December 31, 2013, 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 for which the non-credit loss portion is included in OCI.

	Year Ended December 31,
In thousands	2013		2012		2011
Beginning balance	$	3,332	$	3,321	$	2,228
Additions for credit loss impairments recognized in the current period on securities not previously impaired		1,822				109
Additions for credit loss impairments recognized in the current period on securities previously impaired				11		984
Reductions for credit loss impairments previously recognized on securities sold during the period		—		—		—
Ending balance	$	5,154	$	3,332	$	3,321

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, 2013 is presented in the following table:

	December 31, 2013
	Gross Unrealized Losses					Fair Value
			Percent					Percent
In thousands	Amount		of Total			Amount		of Total
Due in one year or less	$	1		0	%	$	7,687		1	%
Due after one year through five years		2,152		7	%		242,879		26	%
Due after five years through ten years		13,585		41	%		262,989		28	%
Due after ten years		10,211		31	%		178,428		19	%
Mortgage- and asset-backed securities		7,031		21	%		242,624		26	%
Total	$	32,980		100	%	$	934,607		100	%

Net Investment Income

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

	Year Ended December 31,
In thousands	2013			2012			2011
Fixed maturities	$	53,898		$	58,995		$	65,060
Equity securities		4,835			3,945			5,071
Short-term investments		774			1,694			964
Total investment income		59,507			64,634			71,095
Investment expenses		(3,256	)		(10,386	)		(7,595	)
Net investment income	$	56,251		$	54,248		$	63,500

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:

	Year Ended December 31,
In thousands	2013			2012			2011
Fixed maturities	$	(76,194	)	$	15,709		$	44,712
Equity securities		8,857			(5,989	)		(183	)
Gross unrealized gains (losses)		(67,337	)		9,720			44,529
Deferred income tax		(23,565	)		3,418			15,143
Change in net unrealized gains (losses), net	$	(43,772	)	$	6,302		$	29,386

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:

	Year Ended December 31,
In thousands	2013			2012			2011
Fixed maturities:
Gains	$	8,539		$	28,789		$	11,678
Losses		(2,797	)		(1,915	)		(7,044	)
Fixed maturities, net	$	5,742		$	26,874		$	4,634
Equity securities:
Gains	$	17,955		$	14,673		$	9,319
Losses		(758	)		(473	)		(1,957	)
Equity securities, net	$	17,197		$	14,200		$	7,362
Net realized gains (losses)	$	22,939		$	41,074		$	11,996

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 December 31, 2013 and 2012:

	December 31, 2013
In thousands	Level 1		Level 2		Level 3		Total
Fixed maturities:
U.S. Treasury bonds, agency bonds and foreign government bonds	$	242,379	$	199,306	$	—	$	441,685
States, municipalities and political subdivisions		—		460,422		—		460,422
Mortgage-backed and asset-backed securities:								—
Agency mortgage-backed securities		—		301,274		—		301,274
Residential mortgage obligations		—		41,755		—		41,755
Asset-backed securities		—		125,133		—		125,133
Commercial mortgage-backed securities		—		172,750		—		172,750
Subtotal	$	—	$	640,912	$	—	$	640,912
Corporate bonds		—		500,447		4,407		504,854
Total fixed maturities	$	242,379	$	1,801,087	$	4,407	$	2,047,873
Equity securities—common stocks		143,954		—		—		143,954
Total	$	386,333	$	1,801,087	$	4,407	$	2,191,827

	December 31, 2012
In thousands	Level 1		Level 2		Level 3		Total
Fixed maturities:
U.S. Treasury bonds, agency bonds and foreign government bonds	$	414,502	$	235,190	$	—	$	649,692
States, municipalities and political subdivisions		—		322,947		—		322,947
Mortgage-backed and asset-backed securities:								—
Agency mortgage-backed securities		—		384,445		—		384,445
Residential mortgage obligations		—		38,692		—		38,692
Asset-backed securities		—		50,382		—		50,382
Commercial mortgage-backed securities		—		204,821		—		204,821
Subtotal	$	—	$	678,340	$	—	$	678,340
Corporate bonds		—		470,854		—		470,854
Total fixed maturities	$	414,502	$	1,707,331	$	—	$	2,121,833
Equity securities—common stocks		101,297		—		—		101,297
Total	$	515,799	$	1,707,331	$	—	$	2,223,130

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, 2013 and 2011. As of December 31, 2012, the Company did not have any Level 3 assets.

	Year Ended December 31, 2013
			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:
Coporate Bond	$	—	$	—	$	(42	)	$	4,660	$	(211	)	$	—	$	—	$	—	$	4,407
Total assets	$	—	$	—	$	(42	)	$	4,660	$	(211	)	$	—	$	—	$	—	$	4,407

	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	)	$	—