10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the Quarterly Period Ended March 31, 2015.

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

from                            to                             

Commission file number 001-13790

HCC Insurance Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	76-0336636
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
13403 Northwest Freeway, Houston, Texas	77040-6094
(Address of principal executive offices)	(Zip Code)

(713) 690-7300

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ   No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ   No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨   No þ

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

On April 30, 2015, there were approximately 95.7 million shares of common stock outstanding.

HCC Insurance Holdings, Inc. and Subsidiaries

Table of Contents

	Page
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets — March 31, 2015 and December 31, 2014	5
Consolidated Statements of Earnings — Three months ended March 31, 2015 and 2014	6
Consolidated Statements of Comprehensive Income — Three months ended March 31, 2015 and 2014	7
Consolidated Statement of Changes in Shareholders’ Equity — Three months ended March 31, 2015	8
Consolidated Statements of Cash Flows — Three months ended March 31, 2015 and 2014	9
Notes to Consolidated Financial Statements	10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3. Quantitative and Qualitative Disclosures About Market Risk	40
Item 4. Controls and Procedures	41
Part II. OTHER INFORMATION
Item 1. Legal Proceedings	42
Item 1A. Risk Factors	42
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3. Defaults Upon Senior Securities	42
Item 4. Mine Safety Disclosures	42
Item 5. Other Information	42
Item 6. Exhibits	43
Signatures	44

2

FORWARD-LOOKING STATEMENTS

This Report on Form 10-Q contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. These forward-looking statements reflect our current expectations and projections about future events and include information about possible or assumed future results of our operations. All statements, other than statements of historical facts, included or incorporated by reference in this Report that address activities, events or developments that we expect or anticipate may occur in the future, including such things as growth of our business and operations, business strategy, competitive strengths, goals, plans, future capital expenditures and references to future successes may be considered forward-looking statements. Generally, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “probably” or similar expressions indicate forward-looking statements.

Many risks and uncertainties may have an impact on the matters addressed in these forward-looking statements, which could affect our future financial results and performance, including, among other things:

• the effects of catastrophe losses,

• volatility in crop prices and crop yields,

• the cyclical nature of the insurance business,

• inherent uncertainties in the loss estimation process, which can adversely impact the adequacy of loss reserves,

• the impact of past and future potential economic or credit market downturns, including any potential ratings downgrade or impairment of the debt securities of sovereign issuers,

• the effects of emerging claim and coverage issues,

• the effects of extensive governmental regulation of the insurance industry,

• changes to the country’s health care delivery system,

• the effects of climate change on the risks we insure,

• potential risk with agents and brokers,

• the effects of industry consolidations,

• our assessment of underwriting risk,

• our retention of risk, which could expose us to potential losses,

• the adequacy of reinsurance protection,

• the ability and willingness of reinsurers to pay balances due us,

• the occurrence of terrorist activities,

• our ability to maintain our competitive position,

• fluctuations in securities markets, which may reduce the value of our investment portfolio, reduce investment income or generate realized investment losses,

• changes in our assigned financial strength ratings,

• our ability to raise capital and funds for liquidity in the future,

3

• attraction and retention of qualified employees,

• our ability to successfully expand our business through the acquisition of insurance-related companies,

• impairment of goodwill,

• the ability of our insurance company subsidiaries to pay dividends in needed amounts,

• fluctuations in foreign exchange rates,

• failure of, or loss of security related to, our information technology systems,

• difficulties with outsourcing relationships, and

• change of control.

We described these risks and uncertainties in greater detail in Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2014.

These events or factors could cause our results or performance to differ materially from those we express in our forward-looking statements. Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and, therefore, the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements that are included in this Report, our inclusion of this information is not a representation by us or any other person that our objectives or plans will be achieved.

Our forward-looking statements speak only at the date made, and we will not update these forward-looking statements unless the securities laws require us to do so. In light of these risks, uncertainties and assumptions, any forward-looking events discussed in this Report may not occur.

4

HCC Insurance Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets

(unaudited, in thousands except per share data)

	March 31, 2015		December 31, 2014
ASSETS
Investments
Fixed maturity securities – available for sale, at fair value (amortized cost:     2015 – $6,192,036 and 2014 – $6,352,737)	$	6,452,444	$	6,610,368
Equity securities – available for sale, at fair value (cost: 2015 – $325,435     and 2014 – $291,070)		334,763		296,352
Short-term investments, at cost (approximates fair value)		325,154		258,186
Total investments		7,112,361		7,164,906
Cash		93,464		102,093
Restricted cash and securities		122,526		119,010
Premium, claims and other receivables		727,615		553,027
Reinsurance recoverables		1,176,141		1,168,900
Ceded unearned premium		332,646		316,715
Ceded life and annuity benefits		48,590		48,499
Deferred policy acquisition costs		236,661		220,321
Goodwill		949,351		905,636
Other assets		226,942		115,239
Total assets	$	11,026,297	$	10,714,346
LIABILITIES
Loss and loss adjustment expense payable	$	3,693,165	$	3,728,085
Life and annuity policy benefits		48,590		48,499
Reinsurance, premium and claims payable		434,198		301,476
Unearned premium		1,305,327		1,198,930
Deferred ceding commissions		101,169		94,202
Notes payable		889,290		824,251
Accounts payable and accrued liabilities		621,131		615,552
Total liabilities		7,092,870		6,810,995
SHAREHOLDERS’ EQUITY
Common stock, $1.00 par value; 250,000 shares authorized (shares issued: 2015 – 126,794 and 2014 – 126,472; outstanding: 2015 – 95,868 and 2014 – 96,521)		126,794		126,472
Additional paid-in capital		1,115,796		1,113,551
Retained earnings		3,526,071		3,441,424
Accumulated other comprehensive income		172,262		175,014
Treasury stock, at cost (shares: 2015 – 30,926 and 2014 – 29,951)		(1,007,496)		(953,110)
Total shareholders’ equity		3,933,427		3,903,351
Total liabilities and shareholders’ equity	$	11,026,297	$	10,714,346

See Notes to Consolidated Financial Statements.

5

HCC Insurance Holdings, Inc. and Subsidiaries

Consolidated Statements of Earnings

(unaudited, in thousands except per share data)

	Three months ended March 31,
	2015		2014
REVENUE
Net earned premium	$	600,563	$	562,612
Net investment income		53,482		56,806
Other operating income		9,219		9,266
Net realized investment gain		13,186		20,246
Total revenue		676,450		648,930
EXPENSE
Loss and loss adjustment expense, net		365,162		330,746
Policy acquisition costs, net		75,211		69,041
Other operating expense		77,483		87,052
Interest expense		7,766		7,119
Total expense		525,622		493,958
Earnings before income tax expense		150,828		154,972
Income tax expense		37,911		47,061
Net earnings	$	112,917	$	107,911
Earnings per common share
Basic	$	1.17	$	1.08
Diluted	$	1.17	$	1.07

See Notes to Consolidated Financial Statements.

6

HCC Insurance Holdings, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(unaudited, in thousands)

	Three months ended March 31,
	2015		2014
Net earnings	$	112,917	$	107,911
Other comprehensive income (loss)
Investment gains:
Investment gains during the period		20,009		86,080
Income tax charge		7,205		30,570
Investment gains, net of tax		12,804		55,510
Less reclassification adjustments to:
Net realized investment gain		13,186		20,246
Income tax expense		4,615		7,086
Total reclassifications included in net earnings, net of tax		8,571		13,160
Net unrealized investment gains		4,233		42,350
Foreign currency translation adjustment		(7,052)		788
Income tax benefit		(67)		(432)
Foreign currency translation adjustment, net of tax		(6,985)		1,220
Other comprehensive income (loss)		(2,752)		43,570
Comprehensive income	$	110,165	$	151,481

See Notes to Consolidated Financial Statements.

7

HCC Insurance Holdings, Inc. and Subsidiaries

Consolidated Statement of Changes in Shareholders’ Equity

Three months ended March 31, 2015

(unaudited, in thousands except per share data)

	Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive income		Treasury stock		Total shareholders’ equity
Balance at December 31, 2014	$	126,472	$	1,113,551	$	3,441,424	$	175,014	$	(953,110)	$	3,903,351
Net earnings		-		-		112,917		-		-		112,917
Other comprehensive loss		-		-		-		(2,752)		-		(2,752)
Stock-based compensation		371		4,260		-		-		-		4,631
Issuance of 39 shares for exercise of options, including tax effect		39		3,570		-		-		-		3,609
Issuance of 49 shares for employee stock purchase plan		49		1,975		-		-		-		2,024
Surrender of 137 shares of restricted stock for employees’ tax liabilty		(137)		(7,560)		-		-		-		(7,697)
Purchase of 975 common shares		-		-		-		-		(54,386)		(54,386)
Cash dividends declared, $0.295 per share		-		-		(28,270)		-		-		(28,270)
Balance at March 31, 2015	$	126,794	$	1,115,796	$	3,526,071	$	172,262	$	(1,007,496)	$	3,933,427

See Notes to Consolidated Financial Statements.

8

HCC Insurance Holdings, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited, in thousands)

	Three months ended March 31,
	2015		2014
Operating activities
Net earnings	$	112,917	$	107,911
Adjustments to reconcile net earnings to net cash provided by operating activities:
Change in premium, claims and other receivables		11,039		(44,966)
Change in reinsurance recoverables		169,610		55,197
Change in ceded unearned premium		16,972		(5,939)
Change in loss and loss adjustment expense payable		(209,125)		(53,892)
Change in unearned premium		50,280		32,475
Change in reinsurance, premium and claims payable		(893)		71,873
Change in accounts payable and accrued liabilities		(70,757)		(51,885)
Stock-based compensation expense		4,631		4,214
Depreciation and amortization expense		5,517		4,169
Gain on investments		(13,186)		(20,246)
Other, net		(45,859)		(3,447)
Cash provided by operating activities		31,146		95,464
Investing activities
Sales of available for sale fixed maturity securities		167,206		119,011
Sales of equity securities		66,412		144,075
Maturity or call of available for sale fixed maturity securities		159,814		131,204
Cost of available for sale fixed maturity securities acquired		(128,692)		(179,789)
Cost of equity securities acquired		(100,594)		(70,841)
Change in short-term investments		(73,033)		(248,749)
Payments for purchase of businesses, net of cash received		(100,398)		(2,579)
Other, net		(1,328)		(2,224)
Cash used by investing activities		(10,613)		(109,892)
Financing activities
Advances on line of credit		150,000		100,000
Payments on line of credit		(100,004)		(30,000)
Sale of common stock		5,633		8,428
Purchase of common stock		(44,546)		(30,774)
Dividends paid		(28,451)		(22,575)
Other, net		(11,794)		3,572
Cash provided (used) by financing activities		(29,162)		28,651
Net increase (decrease) in cash		(8,629)		14,223
Cash at beginning of year		102,093		58,301
Cash at end of period	$	93,464	$	72,524

See Notes to Consolidated Financial Statements.

9

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

(1) General Information and Significant Accounting and Reporting Policies

HCC Insurance Holdings, Inc. (HCC) and its subsidiaries (collectively we, us or our) include domestic and foreign property and casualty and life insurance companies and underwriting agencies with offices in the United States, the United Kingdom, Spain and Ireland. We underwrite a variety of largely non-correlated specialty insurance products, including property and casualty, accident and health, agriculture, surety and credit product lines, in approximately 180 countries. We market our products through a network of independent agents and brokers, through managing general agents owned by the company, and directly to consumers. In addition, we assume insurance written by other insurance companies.

Basis of Presentation

Our unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and include the accounts of HCC and its subsidiaries. We have made all adjustments that, in our opinion, are necessary for a fair statement of results of the interim periods, and all such adjustments are of a normal recurring nature. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements include the results of operations and cash flows of Producers Ag Insurance Group, Inc. (ProAg) from January 1, 2015, the effective acquisition date (see Note 2, “Acquisition”).

The consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2014. The consolidated balance sheet at December 31, 2014 was derived from the audited financial statements but does not include all disclosures required by GAAP.

Management must make estimates and assumptions that affect amounts reported in our consolidated financial statements and in disclosures of contingent assets and liabilities. Ultimate results could differ from those estimates.

In conjunction with the acquisition of ProAg in the first quarter of 2015, HCC’s executive management changed the structure under which it manages and evaluates the results of our numerous product lines. See Note 3, “Segments” for discussion of our new reporting structure.

New Accounting and Reporting Policies

The following policies changed in the first quarter of 2015.

Agriculture

The majority of premium written in our new agriculture business relates to multi-peril crop insurance (MPCI), written through the federal crop insurance program administered by the U.S. Department of Agriculture’s Risk Management Agency and the Federal Crop Insurance Corporation (FCIC). We record written premium for our agriculture business as we process acreage reports received from the policyholders. Written premium is earned ratably over the period of risk commencing on the final planting date set by the FCIC, which approximates the start of planting season, and ending on the estimated crop harvest date.

We have a net receivable (payable) due from (to) the FCIC for settlement of MPCI reinsurance. If a net receivable, it is reflected in our consolidated balance sheet with premium, claims and other receivables. If a net payable, it is reflected in our consolidated balance sheet with reinsurance, premium and claims payable.

Income Taxes

Effective in 2015, for certain foreign subsidiaries, we do not provide deferred tax liabilities on undistributed earnings that are essentially permanent in duration. For other foreign subsidiaries, we provide U.S. taxes on undistributed earnings at the U.S. statutory rate of 35%, offset by an adjustment for foreign tax credits, when required. In prior years, we provided U.S. taxes on all undistributed earnings of our foreign subsidiaries at the U.S. statutory rate of 35%, offset by an adjustment for foreign tax credits, when required.

10

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

Recent Accounting Guidance

An accounting standard issued in 2014 will change the manner in which most companies recognize revenue. The standard requires that revenue reflect the transfer of goods or services to customers based on the consideration/payment the company expects to be entitled to in exchange for those goods or services; however, the standard does not change the accounting for insurance contracts or investment income. The new standard also requires enhanced disclosures about revenue. This accounting guidance is currently expected to be effective in the first quarter of 2018. The standard may be applied on a full retrospective or modified retrospective approach. We are currently assessing the impact the implementation of this standard will have on our consolidated financial statements.

An accounting standard issued in 2015 changes the presentation of debt issuance costs related to a recognized debt liability. The standard requires debt issuance costs be presented as a reduction of the debt liability, rather than as a deferred charge asset. This accounting guidance is effective at March 31, 2016 and must be applied retrospectively. We had debt issuance costs of $4.0 million at March 31, 2015 and $4.2 million at December 31, 2014 that were included in other assets in our consolidated balance sheets. Under this guidance, these debt issuance costs would be reclassified as a reduction to notes payable in our consolidated balance sheets. Application of this guidance will have no impact on our consolidated financial position, results of operations or cash flows.

(2) Acquisition

Effective January 1, 2015, we completed the acquisition of all of the capital stock of ProAg from CUNA Mutual Group for $104.5 million cash, subject to a net worth adjustment. ProAg writes multi-peril crop, crop hail and other named peril insurance. Crop insurance is a non-correlated line of business we strategically targeted to add to our diversified portfolio of specialty insurance businesses. On April 28, 2015, the parties agreed to reduce the purchase price by $2.1 million in finalization of the net worth adjustment. Our initial accounting of this business acquisition, recorded as of March 31, 2015, will change by an immaterial amount based on the settlement of the final purchase price. We expect to complete this accounting in the second quarter of 2015.

As of March 31, 2015, we allocated the provisional purchase price to the acquired identifiable assets and liabilities of ProAg based on estimated fair values at the acquisition date. We recorded $458.5 million of tangible assets, primarily receivables and reinsurance recoverables, and $453.0 million of liabilities, primarily reserves and reinsurance payables. The majority of these assets and liabilities related to ProAg’s reinsurance year 2014, which is 100% ceded to the FCIC and third party reinsurers (including CUNA Mutual Group) under existing reinsurance agreements. We expect settlement of reinsurance year 2014 amounts to occur with all parties during the fourth quarter of 2015.

We also recognized $54.0 million of intangible assets and $45.0 million of goodwill, neither of which is tax deductible. The goodwill primarily represents the value of ProAg’s assembled workforce and opportunities for future expansion utilizing ProAg’s infrastructure. The intangible assets relate to agent relationships and ProAg’s trade name with fair values of $23.0 million and $8.0 million, respectively, which will be amortized over a useful life of 15 years and 10 years, respectively. Indefinite-lived intangible assets of $23.0 million relate to state and federal insurance licenses, which will be reviewed annually for impairment. Intangible assets are included in other assets in our consolidated balance sheet.

(3) Segments

In the first quarter of 2015, following the acquisition of ProAg, HCC’s executive management changed the structure under which it manages and evaluates the results of our numerous product lines. We now report our results in four operating segments, consisting of three insurance underwriting segments: 1) North America Property & Casualty, 2) Accident & Health and 3) International, and the Investing segment.

11

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

Each of our three insurance underwriting segments bears risk for insurance coverage written within its portfolio of insurance products. Each segment generates income from premium written by our underwriting agencies, through third party agents and brokers, or on a direct basis. Fee and commission income earned by our agencies from third party insurance companies is included in segment revenue. Each segment incurs insurance losses, acquisition costs, claims management costs and other administrative expenses related to our insurance companies and underwriting agencies. Internal claims department costs are managed and reported as a component of loss and loss adjustment expense. We monitor and assess each segment’s pretax results based on underwriting profit, gross and net written premium, and its combined ratio, consisting of the segment’s net loss ratio and expense ratio.

Included in the portfolio of products for each insurance underwriting segment are the following key products:

• North America Property & Casualty – directors’ and officers’ liability (D&O), primary and excess casualty, small account errors and omissions liability, employment practices liability, agriculture, aviation, sports and entertainment, public risk, surety, and various smaller products.

• Accident & Health – medical stop-loss, short-term domestic and international medical, and travel.

• International – marine and energy, property treaty, property (direct and facultative), accident and health, D&O, professional indemnity, casualty, surety, and credit.

The North America Property & Casualty segment includes the former U.S. Property & Casualty segment, the U.S. portion of the former Professional Liability segment, the Surety portion of the former U.S. Surety & Credit segment and ProAg’s agriculture business. The International segment includes the former International segment, the International portion of the former Professional Liability segment, and the Credit portion of the former U.S. Surety & Credit segment. The Accident & Health and Investing segments are unchanged from the prior presentation. All prior period information has been recast to present our segment disclosures and information on a comparable basis with our new segment reporting structure.

The Investing segment includes our consolidated investment portfolio, as well as all investment income, investment related expenses, realized investment gains and losses, and other-than-temporary impairment credit losses on investments. All investment activity is reported as revenue, consistent with our consolidated presentation.

In addition to our segments, we include a Corporate & Other category to reconcile segment results to consolidated totals. The Corporate & Other category includes: 1) corporate operating expenses not allocated to the segments, 2) interest expense on notes payable, 3) foreign currency expense (benefit) and 4) underwriting results of our Exited Lines. Our Exited Lines include product lines that we no longer write and do not expect to write in the future.

12

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

The following tables present information by business segment.

	North America Property & Casualty		Accident & Health		International		Investing		Corporate & Other		Consolidated
Three months ended March 31, 2015
Net earned premium	$	209,239	$	254,950	$	136,377	$	-	$	(3)	$	600,563
Other revenue		6,102		2,013		1,008		66,668		96		75,887
Segment revenue		215,341		256,963		137,385		66,668		93		676,450
Loss and LAE		116,436		187,011		61,443		-		272		365,162
Other expense		68,348		38,665		47,311		-		6,136		160,460
Segment expense		184,784		225,676		108,754		-		6,408		525,622
Segment pretax earnings (loss)	$	30,557	$	31,287	$	28,631	$	66,668	$	(6,315)	$	150,828
Three months ended March 31, 2014
Net earned premium	$	201,334	$	232,143	$	128,844	$	-	$	291	$	562,612
Other revenue		5,431		1,640		976		77,052		1,219		86,318
Segment revenue		206,765		233,783		129,820		77,052		1,510		648,930
Loss and LAE		103,553		170,805		56,314		-		74		330,746
Other expense		57,538		34,573		46,475		-		24,626		163,212
Segment expense		161,091		205,378		102,789		-		24,700		493,958
Segment pretax earnings (loss)	$	45,674	$	28,405	$	27,031	$	77,052	$	(23,190)	$	154,972

13

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

In conjunction with the resegmentation, we reassigned the goodwill associated with the lines of business in our former Professional Liability and U.S. Surety & Credit reporting units at December 31, 2014 to the applicable North America Property & Casualty and International reporting units. We allocated goodwill to the lines of business within the former reporting units based on the relative fair value of each line of business to the sum of the former reporting unit’s total fair value at December 31, 2014. We noted no indicators of impairment as of December 31, 2014, after allocation of the goodwill.

The goodwill balances by reportable segment, after allocation of the goodwill in our former reporting units, are presented below. We noted no indicators of impairment in our goodwill as of March 31, 2015.

	North America Property & Casualty		Accident & Health		International		Total
Balance at beginning of year	$	552,006	$	144,113	$	209,517	$	905,636
Acquisition of ProAg		45,000		-		-		45,000
Other, principally foreign exchange		100		-		(1,385)		(1,285)
Balance at March 31, 2015	$	597,106	$	144,113	$	208,132	$	949,351
The table below presents total assets by segment following our resegmentation.
					March 31,		December 31,
					2015		2014
North America Property & Casualty					$	2,232,696	$	1,894,756
Accident & Health						244,394		242,278
International						1,092,640		1,073,889
Investing						7,178,088		7,228,608
Corporate & Other						278,479		274,815
Total					$	11,026,297	$	10,714,346

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HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

(4) Investments

The cost or amortized cost, gross unrealized gain or loss, and fair value of our fixed maturity and equity securities, all of which are classified as available for sale, were as follows:

	Cost or amortized cost		Gross unrealized gain		Gross unrealized loss		Fair value
March 31, 2015
U.S. government and government agency securities	$	73,540	$	983	$	(7)	$	74,516
Fixed maturity securities of states, municipalities and political subdivisions		877,954		56,164		(55)		934,063
Special purpose revenue bonds of states, municipalities and political subdivisions		2,253,237		143,514		(1,065)		2,395,686
Corporate securities		726,320		28,287		(2,584)		752,023
Residential mortgage-backed securities		770,957		22,259		(1,806)		791,410
Commercial mortgage-backed securities		567,340		26,032		(592)		592,780
Asset-backed securities		369,289		1,051		(1,038)		369,302
Foreign government securities		124,957		471		(3,396)		122,032
Foreign corporate securities		428,442		7,830		(15,640)		420,632
Total fixed maturity securities	$	6,192,036	$	286,591	$	(26,183)	$	6,452,444
Equity securities	$	325,435	$	25,464	$	(16,136)	$	334,763
December 31, 2014
U.S. government and government agency securities	$	70,279	$	827	$	(137)	$	70,969
Fixed maturity securities of states, municipalities and political subdivisions		896,130		58,738		(160)		954,708
Special purpose revenue bonds of states, municipalities and political subdivisions		2,246,707		143,291		(986)		2,389,012
Corporate securities		777,242		25,983		(4,656)		798,569
Residential mortgage-backed securities		805,458		20,215		(3,979)		821,694
Commercial mortgage-backed securities		593,956		19,707		(2,032)		611,631
Asset-backed securities		369,103		316		(2,592)		366,827
Foreign government securities		119,479		767		(1,554)		118,692
Foreign corporate securities		474,383		10,776		(6,893)		478,266
Total fixed maturity securities	$	6,352,737	$	280,620	$	(22,989)	$	6,610,368
Equity securities	$	291,070	$	24,069	$	(18,787)	$	296,352

15

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

Substantially all of our fixed maturity securities are investment grade. The following tables display the gross unrealized losses and fair value of all available for sale securities that were in a continuous unrealized loss position for the periods indicated.

	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
	Fair value		losses		Fair value		losses		Fair value		losses
March 31, 2015
Fixed maturity securities
U.S. government and government agency securities	$	421	$	-	$	3,985	$	(7)	$	4,406	$	(7)
Fixed maturity securities of states, municipalities and political subdivisions		16,379		(55)		-		-		16,379		(55)
Special purpose revenue bonds of states, municipalities and political subdivisions		84,718		(587)		17,341		(478)		102,059		(1,065)
Corporate securities		66,827		(1,578)		42,230		(1,006)		109,057		(2,584)
Residential mortgage-backed securities		75,826		(540)		104,754		(1,266)		180,580		(1,806)
Commercial mortgage-backed securities		12,013		(155)		25,852		(437)		37,865		(592)
Asset-backed securities		73,934		(119)		91,570		(919)		165,504		(1,038)
Foreign government securities		51,165		(3,392)		1,242		(4)		52,407		(3,396)
Foreign corporate securities		167,020		(12,267)		20,657		(3,373)		187,677		(15,640)
Equity securities		139,886		(12,696)		11,501		(3,440)		151,387		(16,136)
Total	$	688,189	$	(31,389)	$	319,132	$	(10,930)	$	1,007,321	$	(42,319)
December 31, 2014
Fixed maturity securities
U.S. government and government agency securities	$	14,813	$	(8)	$	11,236	$	(129)	$	26,049	$	(137)
Fixed maturity securities of states, municipalities and political subdivisions		3,857		(21)		19,337		(139)		23,194		(160)
Special purpose revenue bonds of states, municipalities and political subdivisions		4,041		(19)		100,947		(967)		104,988		(986)
Corporate securities		211,111		(2,498)		48,091		(2,158)		259,202		(4,656)
Residential mortgage-backed securities		37,434		(100)		226,256		(3,879)		263,690		(3,979)
Commercial mortgage-backed securities		5,228		(26)		99,868		(2,006)		105,096		(2,032)
Asset-backed securities		181,579		(1,245)		78,797		(1,347)		260,376		(2,592)
Foreign government securities		55,280		(1,498)		7,187		(56)		62,467		(1,554)
Foreign corporate securities		182,163		(4,587)		21,571		(2,306)		203,734		(6,893)
Equity securities		111,251		(17,839)		3,934		(948)		115,185		(18,787)
Total	$	806,757	$	(27,841)	$	617,224	$	(13,935)	$	1,423,981	$	(41,776)

16

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

At March 31, 2015, we held approximately 2,910 fixed maturity and equity securities, of which 20% included at least one lot in an unrealized loss position. A security has an impairment loss when its fair value is less than its cost or amortized cost at the balance sheet date. We evaluate our securities for possible other-than-temporary impairment losses at each quarter end. Our reviews cover all impaired securities where the loss exceeds $1.0 million and the loss either exceeds 10% of cost or the security had been in a loss position for longer than twelve consecutive months. We do not consider the $42.3 million of gross unrealized losses in our portfolio at March 31, 2015 to be other-than-temporary impairments as these losses relate to non-credit factors, such as interest rate changes, fluctuations in exchange rates and market conditions. We recognized no other-than-temporary impairment losses in the first quarter of 2015 and 2014.

The amortized cost and fair value of our fixed maturity securities at March 31, 2015, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The weighted-average life of our mortgage-backed and asset-backed securities was 5.1 years at March 31, 2015.

	Cost or amortized cost		Fair value
Due in 1 year or less	$	156,470	$	153,783
Due after 1 year through 5 years		1,117,553		1,138,249
Due after 5 years through 10 years		1,322,979		1,400,954
Due after 10 years through 15 years		884,731		945,028
Due after 15 years		1,002,717		1,060,938
Securities with contractual maturities		4,484,450		4,698,952
Mortgage-backed and asset-backed securities		1,707,586		1,753,492
Total fixed maturity securities	$	6,192,036	$	6,452,444

Realized pretax gains (losses) on the sale of investments included the following:

	Three months ended March 31,
	2015		2014
Gains
Fixed maturity securities	$	13,876	$	1,132
Equity securities		10,311		24,438
Total gains		24,187		25,570
Losses
Fixed maturity securities		(1,472)		(2,155)
Equity securities		(9,529)		(3,169)
Total losses		(11,001)		(5,324)
Net
Fixed maturity securities		12,404		(1,023)
Equity securities		782		21,269
Net realized investment gain	$	13,186	$	20,246

17

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

(5) Fair Value Measurements

Our financial instruments include assets and liabilities carried at fair value, as well as assets and liabilities carried at cost or amortized cost but disclosed at fair value in our financial statements. In determining fair value, we generally apply the market approach, which uses prices and other relevant data based on market transactions involving identical or comparable assets and liabilities. We classify our financial instruments into the following three-level hierarchy:

• Level 1 – Inputs are based on quoted prices in active markets for identical instruments.

• Level 2 – Inputs are based on observable market data (other than quoted prices), or are derived from or corroborated by observable market data.

• Level 3 – Inputs are unobservable and not corroborated by market data.

Our Level 1 investments consist of U.S. Treasuries, money market funds and equity securities traded in an active exchange market. We use unadjusted quoted prices for identical instruments to measure fair value.

Our Level 2 investments include most of our fixed maturity securities, which consist of U.S. government agency securities, foreign government securities, municipal bonds (including those held as restricted securities), corporate debt securities, bank loans, foreign debt securities, mortgage-backed and asset-backed securities (including collateralized loan obligations), and deposits supporting our Lloyd’s syndicate business. Level 2 also includes certificates of deposit and other interest-bearing deposits at banks, which we report as short-term investments. We measure fair value for the majority of our Level 2 investments using matrix pricing and observable market data, including benchmark securities or yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, bids, offers, default rates, loss severity and other economic measures. We measure fair value for our structured securities using observable market data in cash flow models.

We are responsible for the prices used in our fair value measurements. We use independent pricing services to assist us in determining fair value of all of our Level 2 investments. The pricing services provide a single price or quote per security. We use data provided by our third party investment managers and Lloyd’s of London to value the remaining Level 2 investments. To validate that these quoted prices are reasonable estimates of fair value, we perform various quantitative and qualitative procedures, including: 1) evaluation of the underlying methodologies, 2) analysis of recent sales activity, 3) analytical review of our fair values against current market prices and 4) comparison of the pricing services’ fair value to other pricing services’ fair value for the same investment. No markets for our investments were judged to be inactive at period end. Based on these procedures, we did not adjust the prices or quotes provided by our independent pricing services, third party investment managers or Lloyd’s of London as of March 31, 2015 or December 31, 2014.

Our Level 2 financial instruments also include our notes payable. We determine the fair value of our 6.30% Senior Notes based on quoted prices in an inactive market. The fair value of borrowings under our Revolving Loan Facility approximates the carrying amount because interest is based on 30-day LIBOR plus a margin.

Our Level 3 securities include certain fixed maturity securities and an insurance contract that we account for as a derivative and classify in other assets. Our Level 3 category also includes liabilities for future earnout payments due to former owners of businesses we acquired, which are classified within accounts payable and accrued liabilities. We determine fair value of the derivative and the earnout payments based on internally developed models that use assumptions or other data that are not readily observable from objective sources.

18

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

The following tables present the fair value of our financial instruments that were carried or disclosed at fair value. Unless indicated, these items were carried at fair value on our consolidated balance sheets. There were no material transfers between Level 1, Level 2 or Level 3 in the first quarter of 2015 and 2014.

	Level 1		Level 2		Level 3		Total
March 31, 2015
Fixed maturity securities
U.S. government and government agency securities	$	69,238	$	5,278	$	-	$	74,516
Fixed maturity securities of states, municipalities and political subdivisions		-		934,063		-		934,063
Special purpose revenue bonds of states, municipalities and political subdivisions		-		2,395,686		-		2,395,686
Corporate securities		-		751,875		148		752,023
Residential mortgage-backed securities		-		791,410		-		791,410
Commercial mortgage-backed securities		-		592,780		-		592,780
Asset-backed securities		-		369,302		-		369,302
Foreign government securities		-		122,032		-		122,032
Foreign corporate securities		-		420,632		-		420,632
Total fixed maturity securities		69,238		6,383,058		148		6,452,444
Equity securities		334,763		-		-		334,763
Short-term investments*		187,436		137,718		-		325,154
Restricted cash and securities		-		3,156		-		3,156
Premium, claims and other receivables		-		53,212		-		53,212
Other assets		17		-		1,395		1,412
Total assets measured at fair value	$	591,454	$	6,577,144	$	1,543	$	7,170,141
Notes payable*	$	-	$	936,968	$	-	$	936,968
Accounts payable and accrued liabilities - earnout liabilities		-		3,156		8,301		11,457
Total liabilities measured at fair value	$	-	$	940,124	$	8,301	$	948,425

* Carried at cost or amortized cost on consolidated balance sheet.

19

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

	Level 1		Level 2		Level 3		Total
December 31, 2014
Fixed maturity securities
U.S. government and government agency securities	$	63,663	$	7,306	$	-	$	70,969
Fixed maturity securities of states, municipalities and political subdivisions		-		954,708		-		954,708
Special purpose revenue bonds of states, municipalities and political subdivisions		-		2,389,012		-		2,389,012
Corporate securities		-		798,421		148		798,569
Residential mortgage-backed securities		-		821,694		-		821,694
Commercial mortgage-backed securities		-		611,631		-		611,631
Asset-backed securities		-		366,827		-		366,827
Foreign government securities		-		118,692		-		118,692
Foreign corporate securities		-		478,266		-		478,266
Total fixed maturity securities		63,663		6,546,557		148		6,610,368
Equity securities		296,352		-		-		296,352
Short-term investments*		159,297		98,889		-		258,186
Restricted cash and securities		-		2,729		-		2,729
Premium, claims and other receivables		-		56,493		-		56,493
Other assets		18		-		1,306		1,324
Total assets measured at fair value	$	519,330	$	6,704,668	$	1,454	$	7,225,452
Notes payable*	$	-	$	875,094	$	-	$	875,094
Accounts payable and accrued liabilities - earnout liabilities		-		2,729		8,744		11,473
Total liabilities measured at fair value	$	-	$	877,823	$	8,744	$	886,567

* Carried at cost or amortized cost on consolidated balance sheet.

20

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

(6) Reinsurance

In the normal course of business, our insurance companies cede a portion of their premium to reinsurers through treaty and facultative reinsurance agreements. Although reinsurance does not discharge the direct insurer from liability to its policyholder, our insurance companies participate in such agreements in order to limit their loss exposure, protect them against catastrophic losses and diversify their business. The following tables present the effect of such reinsurance transactions on our premium, loss and loss adjustment expense and policy acquisition costs.

	Three months ended March 31,
	2015		2014
Direct written premium	$	717,048	$	620,512
Reinsurance assumed		109,088		126,210
Reinsurance ceded		(157,220)		(156,540)
Net written premium	$	668,916	$	590,182
Direct earned premium	$	703,584	$	637,313
Reinsurance assumed		71,168		76,023
Reinsurance ceded		(174,189)		(150,724)
Net earned premium	$	600,563	$	562,612
Direct loss and loss adjustment expense	$	458,726	$	359,629
Reinsurance assumed		27,216		41,802
Reinsurance ceded		(120,780)		(70,685)
Net loss and loss adjustment expense	$	365,162	$	330,746
Policy acquisition costs	$	115,070	$	104,645
Ceding commissions		(39,859)		(35,604)
Net policy acquisition costs	$	75,211	$	69,041

The table below shows the components of our reinsurance recoverables in our consolidated balance sheets.

	March 31,		December 31,
	2015		2014
Reinsurance recoverable on paid losses	$	95,157	$	99,937
Reinsurance recoverable on outstanding losses		448,069		443,059
Reinsurance recoverable on incurred but not reported losses		634,415		627,404
Reserve for uncollectible reinsurance		(1,500)		(1,500)
Total reinsurance recoverables	$	1,176,141	$	1,168,900

21

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

At each quarter end, we review our financial exposure to the reinsurance market based on our individual reinsurance recoverable balances as of the prior quarter end. We take actions to collect outstanding balances or to mitigate our exposure to possible uncollectible amounts. We had a $1.5 million reserve for potentially uncollectible amounts at March 31, 2015. Reinsurance recoverables related to our settlement of Spanish surety bond claims totaled $86.3 million at March 31, 2015, including $43.4 million on paid losses. Our reinsurers have paid our reinsurance claims in full on a timely basis, with the exception of a small number of reinsurers that are currently in run-off and disputing balances owed us. Recoverables from these run-off reinsurers totaled $41.5 million, including $36.8 million on paid losses, at March 31, 2015 (at quarter-end foreign currency exchange rate). No payments have been received from these reinsurers despite their participation in contracts on essentially the same terms of our other reinsurers. We are vigorously pursuing collection of these recoverables, including through arbitration where necessary, and believe these amounts are fully recoverable. Accordingly, we have not recorded a reserve for uncollectibility related to these amounts. While we believe our current reserve is adequate based on information currently available, market conditions may change or additional information might be obtained that may require us to change the reserve in the future.

(7) Liability for Unpaid Loss and Loss Adjustment Expense

The table below provides a reconciliation of our liability for loss and loss adjustment expense payable (referred to as reserves). We recognized no prior year loss development in the first quarter of 2015 and 2014.

	Three months ended March 31,
	2015		2014
Reserves at beginning of period	$	3,728,085	$	3,902,132
Less reinsurance recoverables on reserves		1,070,463		1,122,731
Net reserves at beginning of period		2,657,622		2,779,401
Net reserve additions from acquired business		9,386		-
Net loss and loss adjustment expense		365,162		330,746
Net loss and loss adjustment expense payments		(388,538)		(363,858)
Foreign currency adjustment		(32,951)		2,552
Net reserves at end of period		2,610,681		2,748,841
Plus reinsurance recoverables on reserves		1,082,484		1,098,576
Reserves at end of period	$	3,693,165	$	3,847,417

22

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

(8) Notes Payable

Our notes payable consisted of the following:

	March 31,		December 31,
	2015		2014
6.30% Senior Notes	$	299,290	$	299,251
$825.0 million Revolving Loan Facility		590,000		525,000
Total notes payable	$	889,290	$	824,251

There have been no changes to the terms and conditions related to our 6.30% Senior Notes or the $825.0 million Revolving Loan Facility (the Facility) from those described in Note 7, “Notes Payable” to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2014. We were in compliance with debt covenants related to our 6.30% Senior Notes and the Facility at March 31, 2015.

The weighted-average interest rate on borrowings under the Facility at March 31, 2015 was 1.4%. The borrowings and letters of credit issued under the Facility reduced our available borrowing capacity on the Facility to $230.1 million at March 31, 2015.

(9) Income Taxes

The following table summarizes the differences between our effective tax rate for financial statement purposes and the Federal statutory rate.

	Three months ended March 31,
	2015			2014
Statutory tax rate		35.0	%		35.0	%
Federal tax at statutory rate	$	52,790		$	54,240
Nontaxable municipal bond interest and dividend received deduction		(9,752)			(8,927)
State income taxes, net of federal tax benefit		717			834
Foreign income taxes		9,951			7,226
Foreign tax credit		(9,776)			(7,226)
Indefinitely reinvested earnings of foreign subsidiaries		(9,134)			-
Uncertain tax positions (net of federal tax benefit on state positions: $93 in 2015 and $144 in 2014)		2,234			320
Other, net		881			594
Income tax expense	$	37,911		$	47,061
Effective tax rate		25.1	%		30.4	%

23

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

In the first quarter of 2015, we made an initial assertion that we would indefinitely reinvest the cumulative undistributed earnings of certain foreign subsidiaries primarily organized in the United Kingdom and Spain, which have statutory tax rates of 20.0% and 28.0%, respectively. We made no similar assertion in the first quarter of 2014 or in any periods previously reported. Our 2015 assertion generated a tax benefit of $9.1 million, which included $5.9 million on cumulative undistributed foreign earnings through December 31, 2014 and $3.2 million on undistributed foreign earnings recorded in the first quarter of 2015. Our assertion excluded undistributed foreign earnings that previously have been taxed as deemed dividend inclusions under U.S. tax rules, as well as 2015 earnings for which an assertion cannot be made unless certain U.S. tax regulations are extended for 2015 and future years. At March 31, 2015, our foreign earnings considered to be indefinitely reinvested outside the United States totaled $321.2 million, all of which are subject to U.S. taxes, offset by an adjustment for foreign tax credits, if repatriated. In cases where we could not assert or do not intend to assert indefinite reinvestment of the undistributed earnings of certain foreign subsidiaries, we provided taxes on such undistributed earnings at the U.S. statutory rate of 35.0%, offset by an adjustment for foreign tax credits, where applicable.

(10) Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income in our consolidated balance sheets were as follows:

	Net unrealized investment gains		Foreign currency translation adjustment		Accumulated other comprehensive income
Three months ended March 31, 2015
Balance at December 31, 2014	$	169,984	$	5,030	$	175,014
Other comprehensive income (loss)		4,233		(6,985)		(2,752)
Balance at March 31, 2015	$	174,217	$	(1,955)	$	172,262

(11) Earnings Per Share

The following table details the numerator and denominator used in our earnings per share calculations.

	Three months ended March 31,
	2015		2014
Net earnings	$	112,917	$	107,911
Less: net earnings attributable to unvested restricted stock		(1,641)		(1,692)
Net earnings available to common stock	$	111,276	$	106,219
Weighted-average common shares outstanding		94,881		98,662
Dilutive effect of outstanding securities (determined using treasury stock method)		316		251
Weighted-average common shares and potential common shares outstanding		95,197		98,913
Earnings per common share
Basic	$	1.17	$	1.08
Diluted	$	1.17	$	1.07

24

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

(12) Stock-Based Compensation

In 2015, we granted the following shares of restricted stock and restricted stock units.

	Number of shares		Weighted-average grant date fair value		Aggregate fair value		Vesting period
Restricted stock		299	$	55.81	$	16,692		1 - 4 years
Restricted stock units		4		55.78		245		4 years

Certain awards of restricted stock and restricted stock units contain a performance condition based on the ultimate results for the applicable underwriting year. The number of such shares that vest could be higher or lower than initially granted. We measure fair value for these awards based on the closing price of our common stock on the grant date, and we recognize expense on a straight-line basis over the vesting period for those restricted stock awards or units expected to vest.

Certain of our executive officers were granted performance-based restricted stock in 2015. This restricted stock vests after three years and can vest from 0% to 200% of the initial shares granted. Vesting is based equally on an operating return on equity performance factor and a total shareholder return performance factor.

(13) Commitments and Contingencies

Catastrophe and Large Loss Exposure

We have exposure to catastrophic and other large losses caused by natural perils (such as hurricanes, tornados, earthquakes, tsunamis, floods, droughts and hail storms), and man-made events (such as terrorist attacks). The incidence, timing and severity of these losses are unpredictable. We assess our exposures in areas most vulnerable to natural catastrophes and apply procedures to ascertain our probable maximum loss from a single event. We maintain reinsurance protection to reduce our potential losses from a future event. In the first quarter of 2015 and 2014, we recognized accident year net catastrophe losses, after reinsurance and reinstatement premium, of $5.0 million and $4.6 million, respectively, related to various small catastrophes.

Litigation

We are a party to lawsuits, arbitrations and other proceedings that arise in the normal course of our business. Many of such lawsuits, arbitrations and other proceedings involve claims under policies that we underwrite as an insurer or reinsurer, the liabilities for which, we believe, have been adequately included in our loss reserves. Also, from time to time, we are a party to lawsuits, arbitrations and other proceedings that relate to disputes with third parties, or that involve alleged errors and omissions on the part of our subsidiaries. We have provided accruals for these items to the extent we deem the losses probable and reasonably estimable. Although the ultimate outcome of these matters cannot be determined at this time, based on present information, the availability of insurance coverage and advice received from our outside legal counsel, we believe the resolution of any such matters will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or cash flows.

25

HCC Insurance Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited, tables in thousands except per share data)

Indemnifications

In conjunction with the sales of business assets and subsidiaries, we have provided indemnifications to the buyers. Certain indemnifications cover typical representations and warranties related to our responsibilities to perform under the sales contracts. Under other indemnifications, we agree to reimburse the purchasers for taxes or ERISA-related amounts, if any, assessed after the sale date but related to pre-sale activities. We cannot quantify the maximum potential exposure covered by all of our indemnifications because the indemnifications cover a variety of matters, operations and scenarios and some have no time limit. For those with a time limit, the longest indemnification expires in 2025. We accrue a loss when a valid claim is made by a purchaser and we believe we have potential exposure.

(14) Supplemental Information

Supplemental cash flow information was as follows:

	Three months ended March 31,
	2015		2014
Income taxes paid (refunded)	$	28,926	$	(478	)
Interest paid		2,161		1,539
Dividends declared but not paid at end of period		28,270		22,500
Purchases of common stock not paid at end of period		9,840		639

26

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis should be read in conjunction with our Consolidated Financial Statements and the related Notes as of March 31, 2015 and December 31, 2014.

Overview

We are a specialty insurance group with offices in the United States, the United Kingdom, Spain and Ireland, transacting business in approximately 180 countries. Our shares trade on the New York Stock Exchange and closed at $56.96 on April 30, 2015, resulting in market capitalization of $5.4 billion.

We underwrite and manage a variety of largely non-correlated specialty insurance products through these three insurance underwriting segments: North America Property & Casualty, Accident & Health and International. We market our insurance products through a network of independent agents and brokers, through managing general agents owned by the company, and directly to consumers. In addition, we assume insurance written by other insurance companies.

Our organization is focused on generating consistent, industry-leading combined ratios. We concentrate our insurance writings in selected specialty lines of business in which we believe we can achieve meaningful underwriting profit. We rely on experienced underwriting personnel working within defined and monitored limits, as well as our access to and expertise in the reinsurance marketplace, to limit or reduce risk. By focusing on underwriting profitability, we are able to accomplish our primary objectives of maximizing net earnings and growing book value per share.

Our major insurance companies have financial strength ratings of AA (Very Strong) from Standard & Poor’s Financial Services LLC, A+ (Superior) from A.M. Best Company, Inc., AA (Very Strong) from Fitch Ratings, and A1 (Good Security) from Moody’s Investors Service, Inc.

At March 31, 2015, we had consolidated shareholders’ equity of $3.9 billion and book value per share of $41.03. In the first quarter of 2015, we purchased $54.4 million of our common stock at an average cost of $55.77 per share and paid $28.5 million of dividends at $0.295 per share. We produced total revenue of $676.5 million in the first quarter of 2015, compared to $648.9 million in the same quarter of 2014. Our first quarter results and key metrics were as follows:

	Three months ended March 31,
	2015			2014
Net earnings	$	112,917		$	107,911
Earnings per diluted share	$	1.17		$	1.07
Net loss ratio		60.8	%		58.8	%
Expense ratio		25.7			24.6
Combined ratio		86.5	%		83.4	%

Our consolidated results for the first quarter of 2015 include the results of Producers Ag Insurance Group, Inc. (ProAg), which we acquired for a final purchase price of $102.4 million, effective January 1, 2015. ProAg contributed $72.6 million, $54.7 million and $17.0 million of gross written, net written and net earned premium, respectively, to consolidated premium in the first quarter of 2015. Including $2.0 million of transaction costs, ProAg’s operations generated a net loss of $7.7 million, or $0.08 per diluted share, in the first quarter of 2015. The majority of this loss relates to the seasonal nature of the crop insurance business. ProAg’s operations increased our first quarter 2015 consolidated loss ratio, expense ratio and combined ratio by 0.8, 1.1 and 1.9 percentage points, respectively. Assuming ProAg’s operations remain in line with our expectations, we expect ProAg will break even for full year 2015, and its higher net earned premium in the second half of 2015 will normalize its expense ratio for 2015.

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Comparisons in the following sections refer to the first quarter of 2015, compared to the same period of 2014. The 2015 consolidated financial statements include ProAg’s financial position, results of operations and cash flows; there are no comparable amounts in our 2014 consolidated financial position, results of operations and cash flows. Amounts in tables are in thousands, except for earnings per share, percentages, ratios and number of employees.

Reporting Segment Changes

In the first quarter of 2015, following the acquisition of ProAg, HCC’s executive management changed the structure under which it manages and evaluates the results of our numerous product lines. We now report our results in four operating segments, consisting of three insurance underwriting segments: 1) North America Property & Casualty, 2) Accident & Health and 3) International, and the Investing segment. See Note 3, “Segments” in the accompanying consolidated financial statements for additional information about our new segments. All prior period information in this Form 10-Q has been recast to present our segment disclosures and information on a comparable basis with our new segment reporting structure.

Revenue

Gross written premium, net written premium and net earned premium are detailed below by segment.

	Three months ended March 31,
	2015		2014
North America Property & Casualty	$	349,377	$	288,274
Accident & Health		260,144		235,917
International		216,618		222,240
Exited Lines		(3)		291
Total gross written premium	$	826,136	$	746,722
North America Property & Casualty	$	238,227	$	177,132
Accident & Health		255,918		234,751
International		174,774		178,008
Exited Lines		(3)		291
Total net written premium	$	668,916	$	590,182
North America Property & Casualty	$	209,239	$	201,334
Accident & Health		254,950		232,143
International		136,377		128,844
Exited Lines		(3)		291
Total net earned premium	$	600,563	$	562,612

Growth in premium occurred primarily in our North America Property & Casualty segment, due to our new agriculture business, and in our Accident & Health segment, from growth of our medical stop-loss and short-term medical products. See the “Segment Operations” section below for further discussion of the relationship and changes in premium within each insurance underwriting segment.

Net investment income, which is included in our Investing segment, decreased 6% quarter-over-quarter primarily due to lower dividend income following our sale of equity securities in 2014. Our net realized investment gains decreased $7.1 million in the first quarter of 2015, as we sold a large block of equity securities in the first quarter of 2014. See the “Investing Segment” section below for further discussion of our investing activities.

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Loss and Loss Adjustment Expense

The tables below detail our net loss and loss adjustment expense and our net loss ratios on a consolidated basis and for our segments.

	Three months ended March 31,
	2015			2014
North America Property & Casualty	$	116,436		$	103,553
Accident & Health		187,011			170,805
International		61,443			56,314
Exited Lines		272			74
Net loss and loss adjustment expense	$	365,162		$	330,746
North America Property & Casualty		55.6	%		51.4	%
Accident & Health		73.4			73.6
International		45.1			43.7
Consolidated net loss ratio		60.8	%		58.8	%
Consolidated accident year net loss ratio		60.8	%		58.8	%
Net paid loss ratio		64.7	%		64.7	%

Net loss and loss adjustment expense (referred to as loss expense) increased $34.4 million in the first quarter of 2015 compared to the same period in 2014. The higher loss expense stemmed from our: 1) North America Property & Casualty segment, due to the addition of our agriculture business, 2) Accident & Health segment, from growth of our medical stop-loss and short-term medical products and 3) International segment, due to growth in our specialty lines of business. We recognized no prior year loss development or large catastrophes in the first quarter of 2015 and 2014. See the “Segment Operations” section below for additional discussion of the changes in our loss expense, as well as discussion of the net loss ratios for each segment for 2015 and 2014.

While our net paid loss ratio remained constant quarter-over-quarter, the mix of paid losses varied in the two quarters. The amount of claims paid fluctuates due to the timing of claims settlement, the occurrence of catastrophic events and commutations, and the mix of our business. To settle claims related to Spanish surety bonds, we paid $10.0 million and $35.4 million net of reinsurance in the first quarter of 2015 and 2014, respectively. This activity increased the respective net paid loss ratio by 1.7 and 6.3 percentage points in these quarters.

Policy Acquisition Costs

The percentage of policy acquisition costs to net earned premium was 12.5% and 12.3% for the first quarter of 2015 and 2014, respectively. The difference between periods primarily related to increased commissions due to proportionately higher writings of our short-term medical product.

Other Operating Expense

Other operating expense includes a foreign currency benefit of $18.0 million recognized in the first quarter of 2015, compared to foreign currency expense of $3.9 million recognized in the first quarter of 2014. The significant change in the foreign currency benefit/expense related to strengthening of the U.S. dollar relative to the British pound sterling and the Euro during the first quarter of 2015.

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Excluding the effect of foreign currency benefit/expense, other operating expense increased 15% quarter-over-quarter, mainly due to increased compensation and operating costs in 2015 related to ProAg’s operations. Our employee count has grown to 2,480 at March 31, 2015, from 1,983 at December 31, 2014, primarily due to our acquisition of ProAg. Other operating expense included stock-based compensation expense of $4.6 million in 2015 and $4.2 million in 2014. At March 31, 2015, there was approximately $40.5 million of total unrecognized compensation expense, related to unvested restricted stock awards and units, stock options and our employee stock purchase plan, that is expected to be recognized over a weighted-average period of 2.0 years.

Interest Expense

Interest expense was $7.8 million and $7.1 million in the first quarter of 2015 and 2014, respectively, and included $4.8 million for our Senior Notes in both years.

Income Tax Expense

Our effective income tax rate was 25.1% for the first quarter of 2015, compared to 30.4% for the same period of 2014. In the first quarter of 2015, we made an initial assertion that we would indefinitely reinvest $321.2 million of cumulative undistributed earnings of certain foreign subsidiaries primarily organized in the United Kingdom and Spain. As a result of this assertion, we recognized a tax benefit of $9.1 million, which included $5.9 million on cumulative undistributed foreign earnings through December 31, 2014 and $3.2 million on undistributed foreign earnings recorded in the first quarter of 2015. We made no similar assertion in the first quarter of 2014. If these cumulative earnings were to be repatriated in the future, we would be subject to U.S. income taxes at 35.0%, offset by an adjustment for foreign tax credits. Our future effective tax rate may fluctuate due to tax law and tax rate changes in the United States and foreign taxing jurisdictions, as well as the interaction and complexity of taxation within the various jurisdictions.

Segment Operations

Each of our insurance underwriting segments bears risk for insurance coverage written within its portfolio of insurance products. Each segment generates income from premium written by our underwriting agencies, through third party agents and brokers, or on a direct basis. Certain segments also write facultative or individual account reinsurance, as well as treaty reinsurance business. In some cases, we purchase reinsurance to limit our losses from both individual policy losses and multiple policy losses from catastrophic occurrences and from aggregate losses in a year. Our segments maintain disciplined expense management and a streamlined management structure, which results in favorable expense ratios. The following provides operational information about our insurance underwriting segments, the Investing segment and the Corporate & Other category.

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North America Property & Casualty Segment

The segment’s product groupings and their major products are:

• Liability – directors’ and officers’ liability (D&O), primary and excess casualty, small account errors and omissions liability, and employment practices liability.

• Agriculture – ProAg’s products, including multi-peril crop, crop hail, and other named peril.

• Other Specialty – aviation, sports and entertainment, public risk, surety, and various smaller products.

The following tables summarize the operations of the North America Property & Casualty segment.

	Three months ended March 31,
	2015			2014
Net earned premium	$	209,239		$	201,334
Other revenue		6,102			5,431
Segment revenue		215,341			206,765
Loss and loss adjustment expense, net		116,436			103,553
Other expense		68,348			57,538
Segment expense		184,784			161,091
Segment pretax earnings	$	30,557		$	45,674
Net loss ratio		55.6	%		51.4	%
Expense ratio		32.7			28.6
Combined ratio		88.3	%		80.0	%
Liability	$	101,507		$	96,075
Agriculture		16,989			-
Other Specialty		90,743			105,259
Total net earned premium	$	209,239		$	201,334
Liability		62.1	%		63.7	%
Agriculture		88.0			-
Other Specialty		42.4			40.2
Total net loss ratio		55.6	%		51.4	%
Liability	$	128,277		$	121,537
Agriculture		72,615			-
Other Specialty		148,485			166,737
Total gross written premium	$	349,377		$	288,274

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	Three months ended March 31,
	2015		2014
Liability	$	95,951	$	85,403
Agriculture		54,657		-
Other Specialty		87,619		91,729
Total net written premium	$	238,227	$	177,132

Our North America Property & Casualty segment pretax earnings decreased $15.1 million quarter-over-quarter, driven by a pretax loss in our agriculture business of $8.7 million, which included $0.6 million for amortization of purchased intangibles related to the ProAg acquisition. The seasonal nature of the agriculture business results in net earned premium being concentrated in the third quarter, while mostly fixed operating expenses are incurred relatively evenly throughout the year. Excluding the results of Agriculture, the segment’s pretax earnings decreased $6.4 million in 2015, primarily due to the timing of net earned premium from our title product, which is included in Other Specialty. We wrote more title premium in the first quarter of 2014, compared to the first quarter of 2015.

Written and earned premium increased in 2015 due to our new agriculture business. Excluding Agriculture, net earned premium decreased in 2015 due to reduced premium from title and other products included in Other Specialty, partially offset by growth in our primary casualty product included in Liability. The segment’s net loss ratio and expense ratio increased in 2015, primarily due to the agriculture business, which added 2.8 percentage points and 2.9 percentage points, respectively. The majority of the agriculture premium will earn in the second half of the year; therefore, we expect the Agriculture operations will be in line with our break even expectations for full year 2015 and the segment’s 2015 expense ratio will decline significantly by year end.

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Accident & Health Segment

The following tables summarize the operations of the Accident & Health segment.

	Three months ended March 31,
	2015			2014
Net earned premium	$	254,950		$	232,143
Other revenue		2,013			1,640
Segment revenue		256,963			233,783
Loss and loss adjustment expense, net		187,011			170,805
Other expense		38,665			34,573
Segment expense		225,676			205,378
Segment pretax earnings	$	31,287		$	28,405
Net loss ratio		73.4	%		73.6	%
Expense ratio		15.2			14.9
Combined ratio		88.6	%		88.5	%
Total gross written premium	$	260,144		$	235,917
Total net written premium	$	255,918		$	234,751

The Accident & Health segment pretax earnings increased 10% in the first quarter of 2015, compared to the same period of 2014. This increase was directly attributable to writing new medical stop-loss and short-term medical business, as well as rate increases on renewal business in 2015. The segment’s expense ratio increased in 2015 due to higher commissions, primarily due to proportionately higher writings of our short-term medical product.

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International Segment

The segment’s product groupings and their major products are:

• London Market – marine and energy, property treaty, property (direct and facultative), and accident and health.

• Specialty – D&O, professional indemnity, casualty, surety, and credit.

The following tables summarize the operations of the International segment.

	Three months ended March 31,
	2015			2014
Net earned premium	$	136,377		$	128,844
Other revenue		1,008			976
Segment revenue		137,385			129,820
Loss and loss adjustment expense, net		61,443			56,314
Other expense		47,311			46,475
Segment expense		108,754			102,789
Segment pretax earnings	$	28,631		$	27,031
Net loss ratio		45.1	%		43.7	%
Expense ratio		34.7			36.1
Combined ratio		79.8	%		79.8	%
London Market	$	63,358		$	61,661
Specialty		73,019			67,183
Total net earned premium	$	136,377		$	128,844
London Market		38.9	%		36.5	%
Specialty		50.4			50.3
Total net loss ratios		45.1	%		43.7	%
London Market	$	117,931		$	131,979
Specialty		98,687			90,261
Total gross written premium	$	216,618		$	222,240
London Market	$	96,678		$	107,259
Specialty		78,096			70,749
Total net written premium	$	174,774		$	178,008

Our International segment pretax earnings increased 6% in the first quarter of 2015, compared to the same period of 2014, primarily from higher net earned premium. Written premium from our Specialty products grew in 2015, but was more than offset by decreased writings in our London Market line of business, due to reduced pricing, expanded competition and lower energy prices. The segment’s 2015 expense ratio benefited from a stronger U.S. dollar compared to the British pound sterling and the Euro in the first quarter of 2015, compared to the first quarter of 2014.

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Investing Segment

We invest the majority of our funds in highly-rated fixed maturity securities, which are designated as available for sale securities. We held $6.5 billion of fixed maturity securities at March 31, 2015. Substantially all of our fixed maturity securities were investment grade and 74% were rated AAA or AA. In addition, we held $334.8 million of equity securities at March 31, 2015.

The following tables summarize the results and certain key metrics of our Investing segment.

	Three months ended March 31,
	2015			2014
Net investment income from:
Fixed maturity securities
Taxable	$	24,718		$	23,260
Exempt from U.S. income taxes		27,341			28,583
Total fixed maturity securities		52,059			51,843
Equity securities		2,736			6,637
Other		418			431
Total investment income		55,213			58,911
Investment expense		(1,731)			(2,105)
Total net investment income		53,482			56,806
Net realized investment gain		13,186			20,246
Segment pretax earnings	$	66,668		$	77,052
Fixed maturity securities:
Average yield *		3.3	%		3.5	%
Average tax equivalent yield *		4.1	%		4.4	%
Weighted-average life		8.0 years			8.2 years
Weighted-average duration		4.7 years			5.0 years
Weighted-average rating		AA			AA

* Excluding realized and unrealized gains and losses.

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This table summarizes our investments by type, all of which were reported at fair value, at March 31, 2015 and December 31, 2014.

	March 31, 2015					December 31, 2014
	Amount		%			Amount		%
Fixed maturity securities
U.S. government and government agency securities	$	74,516		1	%	$	70,969		1	%
Fixed maturity securities of states, municipalities and political subdivisions		934,063		13			954,708		13
Special purpose revenue bonds of states, municipalities and political subdivisions		2,395,686		34			2,389,012		33
Corporate securities		752,023		10			798,569		11
Residential mortgage-backed securities		791,410		11			821,694		11
Commercial mortgage-backed securities		592,780		8			611,631		9
Asset-backed securities		369,302		5			366,827		5
Foreign government securities		122,032		2			118,692		2
Foreign corporate securities		420,632		6			478,266		7
Equity securities		334,763		5			296,352		4
Short-term investments		325,154		5			258,186		4
Total investments	$	7,112,361		100	%	$	7,164,906		100	%

Our total investments decreased $52.5 million in 2015, principally due to cash paid for the acquisition of ProAg, partially offset by newly generated cash flow. At March 31, 2015, the net unrealized gain on our investment portfolio was $269.7 million, compared to $262.9 million at December 31, 2014. The increase in the net unrealized gain was due to the continuing decline in interest rates in 2015. Rates on 10-year U.S. Treasury notes declined 24 basis points in the first quarter of 2015.

In the first quarter of 2015, we sold bonds with a book value of approximately $155.0 million, and realized a net gain of $12.4 million, primarily related to our merger of certain International subsidiaries. In the first quarter of 2014, we sold equity securities with a book value of $142.0 million, and realized a net gain of $21.3 million, in order to reposition our overall investment portfolio.

The ratings of our individual securities within our fixed maturity securities portfolio at March 31, 2015 were as follows:

	Amount		%
AAA	$	1,054,210		16	%
AA		3,733,587		58
A		1,242,483		20
BBB		277,370		4
BB and below		144,794		2
Total fixed maturity securities	$	6,452,444		100	%

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Corporate & Other

The following table summarizes activity in the Corporate & Other category.

	Three months ended March 31,
	2015		2014
Net earned premium	$	(3)	$	291
Other revenue		96		1,219
Total revenue		93		1,510
Loss and loss adjustment expense, net		272		74
Other expense – Exited Lines		608		683
Other expense – Corporate		15,772		12,971
Interest expense		7,736		7,061
Foreign currency expense (benefit)		(17,980)		3,911
Total expense		6,408		24,700
Pretax loss	$	(6,315)	$	(23,190)

Our Corporate expenses not allocated to the segments increased quarter-over-quarter, primarily due to professional services of $2.0 million incurred in connection with our acquisition of ProAg in 2015. The impact of foreign currency benefit/expense fluctuated period-over-period principally due to changes in the value of the British pound sterling and the Euro relative to the U.S. dollar. We hold available for sale securities denominated in non-functional currencies to economically hedge the currency exchange risk on our loss reserves denominated in non-functional currencies. The foreign currency benefit/expense related to loss reserves is recorded through the income statement, while the foreign currency benefit/expense related to available for sale securities is recorded through other comprehensive income within shareholders’ equity. This mismatch may cause fluctuations in our reported foreign currency benefit/expense in future periods.

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Liquidity and Capital Management

We believe we have sufficient sources of liquidity at both a consolidated and insurance company legal entity level to pay claims and meet our other contractual obligations and liabilities as they become due in the short-term and long-term. Our current sources of liquidity include: 1) significant operating cash flow generated by our insurance companies, 2) our investment portfolio, most of which is held by our insurance companies, 3) our revolving loan facility and 4) a $1.0 billion shelf registration. Our sources of liquidity are discussed below.

Cash Flow

We manage the liquidity of our insurance companies such that each subsidiary’s anticipated claims payments will be met by its own current operating cash flows, cash, short-term investments or investment maturities. Our insurance companies receive substantial cash from premiums, reinsurance recoverables, surety collateral, outward commutations, proceeds from sales and redemptions of investments, and investment income. Their principal cash outflows are for the payment of claims and loss adjustment expenses, premium payments to reinsurers, return of surety collateral, inward commutations, purchases of investments, policy acquisition costs, operating expenses, taxes and dividends paid to the parent company. We report all of the insurance companies’ investing activity in our Investing segment for segment reporting purposes. Our parent company’s principal cash inflows relate to its investment portfolio and dividends paid by the insurance companies, and its principal cash outflows relate to debt service, acquisitions, operating expenses, dividends paid to shareholders and common stock purchases. Cash provided by operating activities can fluctuate due to timing differences in the collection of premium receivables, reinsurance recoverables and surety collateral; the payment of losses, premium payables and return of surety collateral; and the completion of commutations.

The components of our net operating cash flows are summarized in the following table.

	Three months ended March 31,
	2015			2014
Net earnings	$	112,917		$	107,911
Change in premium, claims and other receivables, net of reinsurance, premium and claims payable		10,146			26,907
Change in unearned premium, net		67,252			26,536
Change in loss and loss adjustment expense payable, net of reinsurance recoverables		(39,515	)		1,305
Change in accounts payable and accrued liabilities		(70,757	)		(51,885	)
Gain on investments		(13,186	)		(20,246	)
Other, net		(35,711	)		4,936
Cash provided by operating activities	$	31,146		$	95,464

Our cash provided by operating activities was $31.1 million in the first quarter of 2015, compared to $95.5 million in the same period of 2014. We paid $28.9 million of income tax payments in 2015, compared to minimal payments in 2014. Other fluctuations in our cash provided by operating activities relate to the timing of the collection and the payment of insurance-related receivables and payables. Related to Spanish surety bonds, we paid claims of $16.5 million and collected reinsurance of $6.9 million in the first quarter of 2015, compared to paying claims of $85.0 million and collecting reinsurance of $72.4 million in the first quarter of 2014. At March 31, 2015, we had gross reserves of $68.0 million, ceded reserves of $42.9 million, and paid loss recoverables from reinsurers of $43.4 million related to Spanish surety bonds. The net impact of our payment of claims and collection of recoverables related to these bonds will continue to impact our cash provided by operating activities in future periods.

Cash flows related to multi-peril crop insurance, which represents the majority of our agriculture business, differ from cash flows related to our other products. Premiums from insureds are transferred to the Federal Crop Insurance Corporation (FCIC) or paid by us on a preset schedule, if not paid by the insured. Claims paid to insureds are reimbursed by the FCIC within several days of payment. We settle each reinsurance year with the FCIC in October of the following year. Settlements with other reinsurers occur shortly after settlement with the FCIC. We pay the majority of agent commissions during the first nine months of the year and employee compensation and other operating expenses evenly throughout the year. Reimbursement from the FCIC for administrative and operating expenses occurs in October and is calculated as a percentage of gross written premium. The 2015 reimbursement is expected to cover approximately 45% of agents commissions, employee compensation and other operating expenses for the year. The timing of these cash flows has historically created quarterly volatility in ProAg’s operating cash flows. Our consolidated operating cash flow will be reduced in 2015 and 2016, as the 2015 reinsurance year will settle in October 2016.

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Investments

At March 31, 2015, we held a $7.1 billion investment portfolio, which included $325.2 million of liquid short-term investments. Our fixed maturity and equity securities portfolios are classified as available for sale. We expect to hold our fixed maturity securities until maturity, but we would be able to sell these securities, as well as our equity securities, to generate cash if needed. The parent company held $681.8 million of cash and investments at March 31, 2015, which are available to cover the holding company’s required cash disbursements.

In the first quarter of 2015, we entered into a commitment to invest up to $150.0 million in a middle market senior loan program. The loans must meet certain criteria and are floating rate instruments generally tied to three-month LIBOR. We anticipate the loan program will be fully funded over the next twelve months and the loans will have an expected life of three years. To date, no loans have been funded under this agreement.

Revolving Loan Facility

We maintain an $825.0 million Revolving Loan Facility (Facility), of which $230.1 million of available capacity remained at March 31, 2015. During the past several years, we used the Facility to fund purchases of our common stock. We expect to continue to use the Facility to opportunistically repurchase stock. The Facility expires in April 2019. See Note 7, “Notes Payable” to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2014 for additional information related to the Facility and our long-term indebtedness.

Subsidiary Dividends

We consider the undistributed earnings of certain foreign subsidiaries to be indefinitely reinvested and, accordingly, no U.S. deferred income taxes have been provided thereon. At March 31, 2015, our foreign subsidiaries associated with indefinitely reinvested foreign earnings had $243.1 million of cash and short-term investments and $63.9 million of undistributed foreign earnings considered to be previously taxed income under U.S. tax rules. We believe that future cash from our domestic operations, together with our ability to access funds available under our Facility, provide adequate resources to fund both our short-term and long-term operating requirements, capital expenditures, share repurchases, dividend payments, debt service requirements, acquisitions and new business development activities in the United States. We do not anticipate the need to repatriate either previously taxed or indefinitely reinvested foreign earnings to the United States to satisfy domestic liquidity needs arising in the ordinary course of business. In the event that we determine in the future to repatriate some or all of the foreign earnings that are considered indefinitely reinvested outside of the United States, we would be required to record additional tax expense at that time.

Share Purchases

In 2014, our Board of Directors (the Board) authorized a $500.0 million stock purchase plan (the Plan). Purchases under the Plan may be made in the open market or in privately negotiated transactions from time-to-time in compliance with applicable laws, rules and regulations, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended. Purchases under the Plan will be made subject to market and business conditions, the level of cash generated from our operations, cash required for acquisitions, our debt covenant compliance, and other relevant factors. The Plan does not obligate us to purchase any particular number of shares, has no expiration date, and may be suspended or discontinued at any time at the Board’s discretion. As of April 30, 2015, $285.3 million of repurchase authority remains under the Plan.

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We purchased our common stock in the first quarter of 2015 and 2014 as follows:

	Three months ended March 31,
	2015		2014
Shares of common stock		975		736
Total cost	$	54,386	$	31,413
Weighted-average cost per share	$	55.77	$	42.66

Shelf Registration

We have a new “Universal Shelf” registration statement, which was filed and became effective in March 2015 and expires in March 2018. The current Universal Shelf provides for the issuance of $1.0 billion of securities, which may be debt securities, equity securities, or a combination thereof. The Universal Shelf provides us the means to access the debt and equity markets relatively quickly, if we are satisfied with the current pricing in the financial markets.

Critical Accounting Policies

We provided information about our critical accounting policies in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies,” in our Annual Report on Form 10-K for the year ended December 31, 2014. We have made no changes in the identification or methods of application of these policies, except as described below.

Deferred Taxes

We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities. Beginning in the first quarter of 2015, for certain of our foreign subsidiaries, we do not provide deferred tax liabilities on undistributed earnings that are essentially permanent in duration. We regularly review our deferred tax assets for recoverability, taking into consideration our history of earnings, expectations for future earnings, taxable income in carryback years and the expected timing of the reversals of existing temporary differences. When we believe it is more likely than not that a deferred tax asset will not be realized, we establish a valuation allowance for that deferred tax asset. Although realization is not assured, we believe that, as of March 31, 2015, it is more likely than not that we will be able to realize the benefit of recorded deferred tax assets, with the exception of certain tax loss carryforwards for which valuation allowances have been provided. If there is a material change in the tax laws such that the actual effective tax rate changes or the time periods within which the underlying temporary differences become taxable or deductible change, we will reevaluate our assumptions, which could result in a change in the valuation allowance required.

Recent Accounting Guidance

See Note 1, “General Information — Recent Accounting Guidance” to the Consolidated Financial Statements for a description of recently issued accounting guidance that will impact our consolidated financial statements in future periods.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in market risk from the information provided in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended December 31, 2014.

40

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Act)) that are designed to ensure that required information is recorded, processed, summarized and reported within the required timeframe, as specified in rules set forth by the Securities and Exchange Commission. Our disclosure controls and procedures are also designed to ensure that information required to be disclosed is accumulated and communicated to management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), to allow timely decisions regarding required disclosures.

Our management, with the participation of our CEO and CFO, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2015, except as otherwise noted below, using criteria established in the Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective in providing reasonable assurance of achieving the purposes described in Rule 13a-15(e) under the Act as of March 31, 2015.

Effective January 1, 2015, we completed the acquisition of ProAg and are currently in the process, but have not completed, the integration of ProAg’s policies, processes, technology and operations. In conducting the evaluation of the effectiveness of internal control over financial reporting as of March 31, 2015, our management excluded the internal controls related to ProAg’s systems and processes. We expect to complete our internal control evaluation related to ProAg during 2015.

(b) Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

41

Part II — Other Information

Item 1. Legal Proceedings

We are a party to lawsuits, arbitrations and other proceedings that arise in the normal course of our business. Many of such lawsuits, arbitrations and other proceedings involve claims under policies that we underwrite as an insurer or reinsurer, the liabilities for which, we believe, have been adequately included in our loss reserves. Also, from time to time, we are a party to lawsuits, arbitrations and other proceedings that relate to disputes with third parties, or that involve alleged errors and omissions on the part of our subsidiaries. We have provided accruals for these items to the extent we deem the losses probable and reasonably estimable. Although the ultimate outcome of these matters cannot be determined at this time, based on present information, the availability of insurance coverage and advice received from our outside legal counsel, we believe the resolution of any such matters will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Item 1A. Risk Factors

There have been no material changes in the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In 2014, the Board approved the purchase of up to $500.0 million of our common stock (the Plan). Purchases under the Plan may be made in the open market or in privately negotiated transactions from time-to-time in compliance with applicable laws, rules and regulations, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended. Purchases under the Plan will be made, subject to market and business conditions, the level of cash generated from our operations, cash required for acquisitions, our debt covenant compliance, and other relevant factors. The Plan does not obligate us to purchase any particular number of shares, has no expiration date, and may be suspended or discontinued at any time at the Board’s discretion. Our purchases in the first quarter of 2015 were as follows:

Period	Total number of     shares purchased		Average price     paid per share	Total number of shares purchased as part of publicly announced         plans or programs		Approximate dollar value of shares that may yet be purchased under       the plans or programs
January		204,727	$53.01		204,727	$341,069,419
February		9,066	$53.26		9,066	$340,586,548
March		761,377	$56.54		761,377	$297,534,932

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

42

Item 6. Exhibits

Exhibit Number
2.1		Stock Purchase Agreement, dated September 29, 2014, by and among CMFG Life Insurance Company, CUNA Mutual Investment Corporation and HCC Insurance Holdings, Inc. (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on September 30, 2014).
3.1		Restated Certificate of Incorporation and Amendment of Certificate of Incorporation of HCC Insurance Holdings, Inc., filed with Delaware Secretary of State on July 23, 1996 and May 21, 1998, respectively (incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-8 (Registration No. 333-61687) filed on August 17, 1998).
3.2		Fourth Amended and Restated Bylaws of HCC Insurance Holdings, Inc. (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on August 22, 2013).
4.1		Indenture, dated August 23, 2001, between HCC Insurance Holdings, Inc. and First Union National Bank related to Debt Securities (Senior Debt) (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on August 24, 2001).
4.2		Form of Fourth Supplemental Indenture, dated November 16, 2009, between HCC Insurance Holdings, Inc. and U.S. Bank National Association related to 6.30% Senior Notes due 2019 (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed on November 13, 2009).
12	†	Statement Regarding Computation of Ratios.
31.1	†	Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	†	Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	†	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	†	The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 formatted in XBRL: 1) Consolidated Balance Sheets, 2) Consolidated Statements of Earnings, 3) Consolidated Statements of Comprehensive Income, 4) Consolidated Statement of Changes in Shareholders’ Equity, 5) Consolidated Statements of Cash Flows and 6) Notes to Consolidated Financial Statements.

† Filed herewith.

43

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	HCC Insurance Holdings, Inc.
	(Registrant)
May 6, 2015	/s/ Christopher J.B. Williams
(Date)	Christopher J.B. Williams,
	Chief Executive Officer
May 6, 2015	/s/ Pamela J. Penny
(Date)	Pamela J. Penny, Executive Vice President
	and Chief Accounting Officer

44

EX-12

Exhibit 12

HCC Insurance Holdings, Inc. and Subsidiaries

Statement of Ratios

(unaudited, in thousands except ratios)

	Three months ended March 31,
	2015			2014
Net loss ratio
Loss and loss adjustment expense, net	$	365,162		$	330,746
Net earned premium		600,563			562,612
Net loss ratio		60.8	%		58.8	%
(Net loss ratio = net loss and loss adjustment expense divided by net earned premium)
Expense ratio
Segment underwriting expense (1)	$	154,324		$	138,586
Segment net earned premium (2)		600,566			562,321
Expense ratio		25.7	%		24.6	%
(Expense ratio = segment underwriting expense divided by segment net earned premium)
Combined ratio		86.5	%		83.4	%
(Combined ratio = net loss ratio plus expense ratio)
Accident year net loss ratio
Loss and loss adjustment expense, net	$	365,162		$	330,746
Add: Favorable (adverse) development		-			-
Accident year net loss and loss adjustment expense	$	365,162		$	330,746
Net earned premium	$	600,563		$	562,612
Add: (Increase) decrease related to prior year reinstatement premium		-			-
Accident year net earned premium	$	600,563		$	562,612
Accident year net loss ratio		60.8	%		58.8	%
(Accident year net loss ratio = accident year net loss and loss adjustment expense divided by accident year net earned premium)

(1) Sum of Other Expense for each of our insurance segments.

(2) Sum of Net Earned Premium for each of our insurance segments.

HCC Insurance Holdings, Inc. and Subsidiaries

Statement of Ratios

(unaudited, in thousands except ratios)

	Three months ended March 31,
	2015			2014
Net paid loss ratio
Losses paid, net of reinsurance	$	388,538		$	363,858
Net earned premium		600,563			562,612
Net paid loss ratio		64.7	%		64.7	%
(Net paid loss ratio = losses paid, net of reinsurance, divided by net earned premium)
Ratio of earnings to fixed charges
Interest factor of rent expense (3)	$	1,456		$	1,359
Interest expense		7,766			7,119
Total fixed charges	$	9,222		$	8,478
Earnings before income tax expense	$	150,828		$	154,972
Interest factor of rent expense (3)		1,456			1,359
Interest expense		7,766			7,119
Earnings per calculation	$	160,050		$	163,450
Ratio of earnings to fixed charges (4)		17.36			19.28

(3) Estimated to be 33% of total rent expense.

(4) Earnings per calculation divided by total fixed charges.

EX-31.1

Exhibit 31.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER

I, Christopher J.B. Williams, certify that:

1. I have reviewed this quarterly report on Form 10-Q of HCC Insurance Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 6, 2015	/s/ Christopher J.B. Williams
(Date)	Christopher J.B. Williams,
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER

I, Brad T. Irick, certify that:

1. I have reviewed this quarterly report on Form 10-Q of HCC Insurance Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 6, 2015	/s/ Brad T. Irick
(Date)	Brad T. Irick, Executive Vice President
	and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION WITH RESPECT TO

QUARTERLY REPORT OF

HCC INSURANCE HOLDINGS, INC.

The undersigned, being the Chief Executive Officer and Chief Financial Officer of HCC Insurance Holdings, Inc. (the Company), pursuant to 18 U.S.C. §1350 as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, do hereby certify to the best of their knowledge with respect to the Quarterly Report of the Company on Form 10-Q, as filed with the Securities and Exchange Commission for the quarter ended March 31, 2015 (the Report):

1. that the Report fully complies with all requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended; and

2. that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods presented in the Report.

May 6, 2015	/s/ Christopher J.B. Williams
(Date)	Christopher J.B. Williams,
	Chief Executive Officer

May 6, 2015	/s/ Brad T. Irick
(Date)	Brad T. Irick, Executive Vice President
	and Chief Financial Officer

This certification is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of such section. This certification is not deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates it by reference. A signed original of this certification has been provided to HCC Insurance Holdings, Inc. and will be retained by HCC Insurance Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Segments (Goodwill Rollforward) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Goodwill [Line Items]
Balance at beginning of year	$ 905,636
Acquisition of ProAg	45,000
Other, principally foreign exchange	(1,285)
Balance at March 31, 2015	949,351
North America Property & Casualty [Member]
Goodwill [Line Items]
Balance at beginning of year	552,006
Acquisition of ProAg	45,000
Other, principally foreign exchange	100
Balance at March 31, 2015	597,106
Accident & Health [Member]
Goodwill [Line Items]
Balance at beginning of year		144,113
Balance at March 31, 2015	144,113	144,113
International [Member]
Goodwill [Line Items]
Balance at beginning of year	209,517
Other, principally foreign exchange	(1,385)
Balance at March 31, 2015	$ 208,132

XML

Income Taxes (Effective Tax Rate Reconciliation) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Differences between our effective tax rate for financial statement purposes and the Federal statutory rate
Statutory tax rate	35.00%	35.00%
Federal tax at statutory rate	$ 52,790	$ 54,240
Nontaxable municipal bond interest and dividend received deduction	(9,752)	(8,927)
State income taxes, net of federal tax benefit	717	834
Foreign income taxes	9,951	7,226
Foreign tax credits	(9,776)	(7,226)
Indefinitely reinvested earnings of foreign subsidiaries	(9,134)	0
Uncertain tax positions (net of federal tax benefit on state positions: $93 in 2015, $144 in 2014)	2,234	320
Other, net	881	594
Income tax expense	$ 37,911	$ 47,061
Effective tax rate	25.10%	30.40%

XML

Reinsurance (Reinsurance Transactions Effect) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Effect of reinsurance transactions on our premium, loss and loss adjustment expense and policy acquisition costs
Direct written premium	$ 717,048	$ 620,512
Reinsurance assumed	109,088	126,210
Reinsurance ceded	(157,220)	(156,540)
Net written premium	668,916	590,182
Direct earned premium	703,584	637,313
Reinsurance assumed	71,168	76,023
Reinsurance ceded	(174,189)	(150,724)
Net earned premium	600,563	562,612
Direct loss and loss adjustment expense	458,726	359,629
Reinsurance assumed	27,216	41,802
Reinsurance ceded	(120,780)	(70,685)
Net loss and loss adjustment expense	365,162	330,746
Policy acquisition costs	115,070	104,645
Ceding commissions	(39,859)	(35,604)
Net policy acquisition costs	$ 75,211	$ 69,041

XML

Income Taxes (Narrative or Textuals) (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Indefinitely reinvested earnings of foreign subsidiaries (Line items)
Indefinitely reinvested earnings of foreign subsidiaries	$ 9,134,000	$ 0
Undistributed Earnings of Foreign Subsidiaries	321,200,000
Cumluative undistributed foreign earnings through December 31, 2014 [Member]
Indefinitely reinvested earnings of foreign subsidiaries (Line items)
Indefinitely reinvested earnings of foreign subsidiaries	5,900,000
Cumluative undistributed foreign earnings first quarter of 2015 [Member]
Indefinitely reinvested earnings of foreign subsidiaries (Line items)
Indefinitely reinvested earnings of foreign subsidiaries	$ 3,200,000
United Kingdom
Foreign statutory tax rate (Line Items)
Foreign statutory tax rate	20.00%
Spain
Foreign statutory tax rate (Line Items)
Foreign statutory tax rate	28.00%

XML

Fair Value Measurements (Assets and Liabilities FV) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Available for sale
Fixed maturity securities - available for sale	$ 6,452,444	$ 6,610,368
Equity securities - available for sale, at fair value	334,763	296,352
Short-term investments*	325,154	258,186
Restricted cash and securities	3,156	2,729
Premium, claims and other receivables	53,212	56,493
Other assets	1,412	1,324
Total assets measured at fair value	7,170,141	7,225,452
Notes payable	936,968	875,094
Accounts payable and accrued liabilities - earnout liabilities	11,457	11,473
Total liabilities measured at fair value	948,425	886,567
Fair Value, Inputs, Level 1 [Member]
Available for sale
Fixed maturity securities - available for sale	69,238	63,663
Equity securities - available for sale, at fair value	334,763	296,352
Short-term investments*	187,436	159,297
Other assets	17	18
Total assets measured at fair value	591,454	519,330
Fair Value, Inputs, Level 2 [Member]
Available for sale
Fixed maturity securities - available for sale	6,383,058	6,546,557
Short-term investments*	137,718	98,889
Restricted cash and securities	3,156	2,729
Premium, claims and other receivables	53,212	56,493
Total assets measured at fair value	6,577,144	6,704,668
Notes payable	936,968	875,094
Accounts payable and accrued liabilities - earnout liabilities	3,156	2,729
Total liabilities measured at fair value	940,124	877,823
Fair Value, Inputs, Level 3 [Member]
Available for sale
Fixed maturity securities - available for sale	148	148
Other assets	1,395	1,306
Total assets measured at fair value	1,543	1,454
Accounts payable and accrued liabilities - earnout liabilities	8,301	8,744
Total liabilities measured at fair value	8,301	8,744
US Government and Government Agency Securities [Member]
Available for sale
Fixed maturity securities - available for sale	74,516	70,969
US Government and Government Agency Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Available for sale
Fixed maturity securities - available for sale	69,238	63,663
US Government and Government Agency Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale
Fixed maturity securities - available for sale	5,278	7,306
Fixed Maturity Securities of States, Municipalities and Political Subdivisions Securities [Member]
Available for sale
Fixed maturity securities - available for sale	934,063	954,708
Fixed Maturity Securities of States, Municipalities and Political Subdivisions Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale
Fixed maturity securities - available for sale	934,063	954,708
Special Purpose Revenue Bonds Of States Municipalities And Political Subdivisions [Member]
Available for sale
Fixed maturity securities - available for sale	2,395,686	2,389,012
Special Purpose Revenue Bonds Of States Municipalities And Political Subdivisions [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale
Fixed maturity securities - available for sale	2,395,686	2,389,012
Corporate Securities [Member]
Available for sale
Fixed maturity securities - available for sale	752,023	798,569
Corporate Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale
Fixed maturity securities - available for sale	751,875	798,421
Corporate Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Available for sale
Fixed maturity securities - available for sale	148	148
Residential Mortgage Backed Securities [Member]
Available for sale
Fixed maturity securities - available for sale	791,410	821,694
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale
Fixed maturity securities - available for sale	791,410	821,694
Commercial Mortgage Backed Securities [Member]
Available for sale
Fixed maturity securities - available for sale	592,780	611,631
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale
Fixed maturity securities - available for sale	592,780	611,631
Asset-backed Securities [Member]
Available for sale
Fixed maturity securities - available for sale	369,302	366,827
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale
Fixed maturity securities - available for sale	369,302	366,827
Foreign Government Securities [Member]
Available for sale
Fixed maturity securities - available for sale	122,032	118,692
Foreign Government Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale
Fixed maturity securities - available for sale	122,032	118,692
Foreign Corporate Securities [Member]
Available for sale
Fixed maturity securities - available for sale	420,632	478,266
Foreign Corporate Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale
Fixed maturity securities - available for sale	$ 420,632	$ 478,266

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

Earnings per share

		Three months ended March 31,
		2015		2014
Net earnings		$	112,917	$	107,911
Less: net earnings attributable to unvested restricted stock			(1,641)		(1,692)
	Net earnings available to common stock	$	111,276	$	106,219
Weighted-average common shares outstanding			94,881		98,662
Dilutive effect of outstanding securities (determined using treasury stock method)			316		251
	Weighted-average common shares and potential common shares outstanding		95,197		98,913
Earnings per common share
	Basic	$	1.17	$	1.08
	Diluted	$	1.17	$	1.07

XML

Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Earnings Per Share, Basic and Diluted
Net earnings	$ 112,917	$ 107,911
Less: net earnings attributable to unvested restricted stock	1,641	1,692
Net earnings available to common stock	111,276	106,219
Weighted-average common shares outstanding	94,881	98,662
Dilutive effect of outstanding securities (determined using treasury stock method)	316	251
Weighted-average common shares and potential common shares outstanding	95,197	98,913
Earnings Per Share, Basic	$ 1.17	$ 1.08
Earnings Per Share, Diluted	$ 1.17	$ 1.07
Net earnings available to common stock	$ 111,276	$ 106,219

XML

Segments (Tables)

3 Months Ended

Mar. 31, 2015

Segments [Abstract]

Information by business segment

			North America Property		Accident						Corporate
			& Casualty		& Health		International		Investing		& Other		Consolidated
Three months ended March 31, 2015
Net earned premium			$	209,239	$	254,950	$	136,377	$	-	$	(3)	$	600,563
Other revenue				6,102		2,013		1,008		66,668		96		75,887
	Segment revenue			215,341		256,963		137,385		66,668		93		676,450
Loss and LAE				116,436		187,011		61,443		-		272		365,162
Other expense				68,348		38,665		47,311		-		6,136		160,460
	Segment expense			184,784		225,676		108,754		-		6,408		525,622
		Segment pretax earnings (loss)	$	30,557	$	31,287	$	28,631	$	66,668	$	(6,315)	$	150,828

Three months ended March 31, 2014
Net earned premium			$	201,334	$	232,143	$	128,844	$	-	$	291	$	562,612
Other revenue				5,431		1,640		976		77,052		1,219		86,318
	Segment revenue			206,765		233,783		129,820		77,052		1,510		648,930
Loss and LAE				103,553		170,805		56,314		-		74		330,746
Other expense				57,538		34,573		46,475		-		24,626		163,212
	Segment expense			161,091		205,378		102,789		-		24,700		493,958
		Segment pretax earnings (loss)	$	45,674	$	28,405	$	27,031	$	77,052	$	(23,190)	$	154,972

Schedule Of Goodwill [Text Block]

		North America Property		Accident
		& Casualty		& Health		International		Total
Balance at beginning of year		$	552,006	$	144,113	$	209,517	$	905,636
Acquisition of ProAg			45,000		-		-		45,000
Other, principally foreign exchange			100		-		(1,385)		(1,285)
	Balance at March 31, 2015	$	597,106	$	144,113	$	208,132	$	949,351

Total assets by segment

	March 31,		December 31,
	2015		2014
North America Property & Casualty	$	2,232,696	$	1,894,756
Accident & Health		244,394		242,278
International		1,092,640		1,073,889
Investing		7,178,088		7,228,608
Corporate & Other		278,479		274,815
Total	$	11,026,297	$	10,714,346

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Reinsurance (Narrative or Textuals) (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Reinsurance [Abstract]
Recoverables related to Spanish surety bonds	$ 86,300,000
Paid loss recoverables related to Spanish surety bonds	43,400,000
Recoverables in dispute from run-off reinsurers related to Spanish surety bonds	41,500,000
Paid loss recoverables in dispute from run-off reinsurers related to Spanish surety bonds	36,800,000
Reserve for uncollectible reinsurance	$ 1,500,000	$ 1,500,000

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Investments (Securities in Unrealized Loss Position) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position
Less than 12 months, Fair value	$ 688,189	$ 806,757
Less than 12 months, Unrealized losses	(31,389)	(27,841)
12 months or more, Fair value	319,132	617,224
12 months or more, Unrealized losses	(10,930)	(13,935)
Total, Fair value	1,007,321	1,423,981
Total, Unrealized losses	(42,319)	(41,776)
US Government and Government Agency Securities [Member]
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position
Less than 12 months, Fair value	421	14,813
Less than 12 months, Unrealized losses	0	(8)
12 months or more, Fair value	3,985	11,236
12 months or more, Unrealized losses	(7)	(129)
Total, Fair value	4,406	26,049
Total, Unrealized losses	(7)	(137)
Fixed Maturity Securities of States, Municipalities and Political Subdivisions Securities [Member]
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position
Less than 12 months, Fair value	16,379	3,857
Less than 12 months, Unrealized losses	(55)	(21)
12 months or more, Fair value	0	19,337
12 months or more, Unrealized losses	0	(139)
Total, Fair value	16,379	23,194
Total, Unrealized losses	(55)	(160)
Special Purpose Revenue Bonds Of States Municipalities And Political Subdivisions [Member]
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position
Less than 12 months, Fair value	84,718	4,041
Less than 12 months, Unrealized losses	(587)	(19)
12 months or more, Fair value	17,341	100,947
12 months or more, Unrealized losses	(478)	(967)
Total, Fair value	102,059	104,988
Total, Unrealized losses	(1,065)	(986)
Corporate Securities [Member]
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position
Less than 12 months, Fair value	66,827	211,111
Less than 12 months, Unrealized losses	(1,578)	(2,498)
12 months or more, Fair value	42,230	48,091
12 months or more, Unrealized losses	(1,006)	(2,158)
Total, Fair value	109,057	259,202
Total, Unrealized losses	(2,584)	(4,656)
Residential Mortgage Backed Securities [Member]
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position
Less than 12 months, Fair value	75,826	37,434
Less than 12 months, Unrealized losses	(540)	(100)
12 months or more, Fair value	104,754	226,256
12 months or more, Unrealized losses	(1,266)	(3,879)
Total, Fair value	180,580	263,690
Total, Unrealized losses	(1,806)	(3,979)
Commercial Mortgage Backed Securities [Member]
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position
Less than 12 months, Fair value	12,013	5,228
Less than 12 months, Unrealized losses	(155)	(26)
12 months or more, Fair value	25,852	99,868
12 months or more, Unrealized losses	(437)	(2,006)
Total, Fair value	37,865	105,096
Total, Unrealized losses	(592)	(2,032)
Asset-backed Securities [Member]
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position
Less than 12 months, Fair value	73,934	181,579
Less than 12 months, Unrealized losses	(119)	(1,245)
12 months or more, Fair value	91,570	78,797
12 months or more, Unrealized losses	(919)	(1,347)
Total, Fair value	165,504	260,376
Total, Unrealized losses	(1,038)	(2,592)
Foreign Government Securities [Member]
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position
Less than 12 months, Fair value	51,165	55,280
Less than 12 months, Unrealized losses	(3,392)	(1,498)
12 months or more, Fair value	1,242	7,187
12 months or more, Unrealized losses	(4)	(56)
Total, Fair value	52,407	62,467
Total, Unrealized losses	(3,396)	(1,554)
Foreign Corporate Securities [Member]
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position
Less than 12 months, Fair value	167,020	182,163
Less than 12 months, Unrealized losses	(12,267)	(4,587)
12 months or more, Fair value	20,657	21,571
12 months or more, Unrealized losses	(3,373)	(2,306)
Total, Fair value	187,677	203,734
Total, Unrealized losses	(15,640)	(6,893)
Equity Securities [Member]
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position
Less than 12 months, Fair value	139,886	111,251
Less than 12 months, Unrealized losses	(12,696)	(17,839)
12 months or more, Fair value	11,501	3,934
12 months or more, Unrealized losses	(3,440)	(948)
Total, Fair value	151,387	115,185
Total, Unrealized losses	$ (16,136)	$ (18,787)

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Acquisition (Narrative) (Details Textuals) (USD $)	0 Months Ended		3 Months Ended
	Apr. 28, 2015	Jan. 01, 2015	Mar. 31, 2015
Provisional Business Combinations [Abstract]
Amount of goodwill recognized in acquisition			$ 45,000,000
Cash paid to acquire an entity		104,500,000
Finite Lived Intangible Assets (Line Items)
Intangible Assets as of the Acquisition Date			54,000,000
Proceeds From Previous Acquisition	2,100,000
Indefinite-lived intangible assets			23,000,000
Percentage of ProAg 2014 Business Ceded to FCIC and Third Party Reinsurers			100.00%
Tangible assets recorded mainly for ProAg's receivables and reinsurance recoverables			458,500,000
Liabilities recorded mainly for ProAg's reserves and reinsurance payables			453,000,000
Agent relationships [Member]
Finite Lived Intangible Assets (Line Items)
Useful lives of finite-lived intangible assets acquired, years			15 years
Acquired Finite-lived intangible assets			23,000,000
Trade name [Member]
Finite Lived Intangible Assets (Line Items)
Useful lives of finite-lived intangible assets acquired, years			10 years
Acquired Finite-lived intangible assets			$ 8,000,000

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Notes Payable (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Notes Payable [Line Items]
Notes payable	$ 889,290	$ 824,251
6.3% Senior Notes [Member]
Notes Payable [Line Items]
Notes payable	299,290	299,251
Revolving Loan Facility [Member]
Notes Payable [Line Items]
Notes payable	$ 590,000	$ 525,000

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Supplemental Information (Supplemental Cash Flow Information) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Supplemental Information
Income taxes paid (refunded)	$ 28,926	$ (478)
Interest paid	2,161	1,539
Proceeds from sales of available for sale fixed maturity securities	167,206	119,011
Proceeds from sales of equity securities	66,412	144,075
Dividends declared but not paid at end of period	28,270	22,500
Purchases of common stock not paid at end of period	$ 9,840	$ 639

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Fair Value Measurements (Narrative or Textuals) (Details)	Mar. 31, 2015
Fair Value Measurements [Abstract]
Interest rate of senior notes	6.30%

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General Information

3 Months Ended

Mar. 31, 2015

General Information [Abstract]

General Information

(1) General Information

HCC Insurance Holdings, Inc. (HCC) and its subsidiaries (collectively we, us or our) include domestic andforeign property and casualty and life insurance companies and underwriting agencies with offices in theUnited States, the United Kingdom, Spain and Ireland. We underwrite a variety of largely non-correlated specialty insurance products, including property and casualty, accident and health, agriculture, surety and credit product lines, in approximately 180 countries. We market our products through a network of independent agents and brokers, through managing general agents owned by the company, and directly to consumers. In addition, we assume insurance written by other insurance companies.

Basis of Presentation

Our unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and include the accounts of HCC and its subsidiaries. We have made all adjustments that, in our opinion, are necessary for a fair statement of results of the interim periods, and all such adjustments are of a normal recurring nature. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements include the results of operations and cash flows of Producers Ag Insurance Group, Inc. (ProAg) from January 1, 2015, the effective acquisition date (see Note 2, “Acquisition”).

The consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2014. The consolidated balance sheet at December 31, 2014 was derived from the audited financial statements but does not include all disclosures required by GAAP.

Management must make estimates and assumptions that affect amounts reported in our consolidated financial statements and in disclosures of contingent assets and liabilities. Ultimate results could differ from those estimates.

In conjunction with the acquisition of ProAg in the first quarter of 2015, HCC’s executive management changed the structure under which it manages and evaluates the results of our numerous product lines. See Note 3, “Segments” for discussion of our new reporting structure.

New Accounting and Reporting Policies

The following policies changed in the first quarter of 2015.

Agriculture

The majority of premium written in our new agriculture business relates to multi-peril crop insurance (MPCI), written through the federal crop insurance program administered by the U.S. Department of Agriculture’s Risk Management Agency and the Federal Crop Insurance Corporation (FCIC). We record written premium for our agriculture business as we process acreage reports received from the policyholders. Written premium is earned ratably over the period of risk commencing on the final planting date set by the FCIC, which approximates the start of planting season, and ending on the estimated crop harvest date.

We have a net receivable (payable) due from (to) the FCIC for settlement of MPCI reinsurance. If a net receivable, it is reflected in our consolidated balance sheet with premium, claims and other receivables. If a net payable, it is reflected in our consolidated balance sheet with reinsurance, premium and claims payable.

Income Taxes

Effective in 2015, for certain foreign subsidiaries, we do not provide deferred tax liabilities on undistributed earnings that are essentially permanent in duration. For other foreign subsidiaries, we provide U.S. taxes on undistributed earnings at the U.S. statutory rate of 35%, offset by an adjustment for foreign tax credits, when required. In prior years, we provided U.S. taxes onall undistributed earnings of our foreign subsidiariesat the U.S. statutory rate of 35%, offset by an adjustment for foreign tax credits, when required.

Recent Accounting Guidance

An accounting standard issued in 2014 will change the manner in which most companies recognize revenue. The standard requires that revenue reflect the transfer of goods or services to customers based on the consideration/payment the company expects to be entitled to in exchange for those goods or services; however, the standard does not change the accounting for insurance contracts or investment income. The new standard also requires enhanced disclosures about revenue. This accounting guidance is currently expected to be effective in the first quarter of 2018. The standard may be applied on a full retrospective or modified retrospective approach. We are currently assessing the impact the implementation of this standard will have on our consolidated financial statements.

An accounting standard issued in 2015 changes the presentation of debt issuance costs related to a recognized debt liability. The standard requires debt issuance costs be presented as a reduction of the debt liability, rather than as a deferred charge asset. This accounting guidance is effective at March 31, 2016 and must be applied retrospectively. We had debt issuance costs of $4.0 million at March 31,2015 and $4.2 million at December 31, 2014 that were included in other assets in our consolidated balance sheets. Under this guidance, these debt issuance costs would be reclassified as a reduction to notes payable in our consolidated balance sheets. Application of this guidance will have no impact on our consolidated financial position, results of operations or cash flows.

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Investments (Securities by Contractual Maturity (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Amortized cost and fair value of fixed maturity securities investments classified by contractual maturity date
Due in 1 year or less, Available for sale, Cost or amortized cost	$ 156,470
Due after 1 year through 5 years, Available for sale, Cost or amortized cost	1,117,553
Due after 5 years through 10 years, Available for sale, Cost or amortized cost	1,322,979
Due after 10 years through 15 years, Available for sale, Cost or amortized cost	884,731
Due after 15 years, Available for sale, Cost or amortized cost	1,002,717
Securities with contractual maturities, Available for sale, Cost or amortized cost	4,484,450
Mortgage-backed and asset-backed securities, Available for sale, Cost or amortized cost	1,707,586
Available-for-sale fixed maturity Securities, Amortized Cost Basis	6,192,036	6,352,737
Due in 1 year or less, Available for sale, Fair value	153,783
Due after 1 year through 5 years, Available for sale, Fair value	1,138,249
Due after 5 years through 10 years, Available for sale, Fair value	1,400,954
Due after 10 years through 15 years, Available for sale, Fair value	945,028
Due after 15 years, Available for sale, Fair value	1,060,938
Securities with contractual maturities, Available for sale, Fair value	4,698,952
Mortgage-backed and asset-backed securities, Available for sale, Fair value	1,753,492
Available-for-sale Securities, Fixed Maturity Securities, Fair value	$ 6,452,444	$ 6,610,368

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Liability for Unpaid Loss and Loss Adjustment Expense (Tables)

3 Months Ended

Mar. 31, 2015

Liability for Unpaid Loss and Loss Adjustment Expense

Rollforward of Liability for Unpaid Loss and Loss Adjustment Expense

		Three months ended March 31,
		2015		2014
Reserves at beginning of period		$	3,728,085	$	3,902,132
Less reinsurance recoverables on reserves			1,070,463		1,122,731
	Net reserves at beginning of period		2,657,622		2,779,401
Net reserve additions from acquired business			9,386		-
Net loss and loss adjustment expense			365,162		330,746
Net loss and loss adjustment expense payments			(388,538)		(363,858)
Foreign currency adjustment			(32,951)		2,552
	Net reserves at end of period		2,610,681		2,748,841
Plus reinsurance recoverables on reserves			1,082,484		1,098,576
	Reserves at end of period	$	3,693,165	$	3,847,417

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Reinsurance (Tables)

3 Months Ended

Mar. 31, 2015

Reinsurance [Abstract]

Effect of reinsurance transactions on our premium, loss and loss adjustment expense and policy acquisition costs

		Three months ended March 31,
		2015		2014
Direct written premium		$	717,048	$	620,512
Reinsurance assumed			109,088		126,210
Reinsurance ceded			(157,220)		(156,540)
	Net written premium	$	668,916	$	590,182
Direct earned premium		$	703,584	$	637,313
Reinsurance assumed			71,168		76,023
Reinsurance ceded			(174,189)		(150,724)
	Net earned premium	$	600,563	$	562,612
Direct loss and loss adjustment expense		$	458,726	$	359,629
Reinsurance assumed			27,216		41,802
Reinsurance ceded			(120,780)		(70,685)
	Net loss and loss adjustment expense	$	365,162	$	330,746

Policy acquisition costs		$	115,070	$	104,645
Ceding commissions			(39,859)		(35,604)
	Net policy acquisition costs	$	75,211	$	69,041

Components of our reinsurance recoverables

		March 31,		December 31,
		2015		2014
Reinsurance recoverable on paid losses		$	95,157	$	99,937
Reinsurance recoverable on outstanding losses			448,069		443,059
Reinsurance recoverable on incurred but not reported losses			634,415		627,404
Reserve for uncollectible reinsurance			(1,500)		(1,500)
	Total reinsurance recoverables	$	1,176,141	$	1,168,900

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Accumulated Other Comprehensive Income (Rollforward of Comprehensive Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Accumulated Other Comprehensive Income, Net of Tax, Beginning Balance	$ 175,014
Other comprehensive income	(2,752)	43,570
Accumulated Other Comprehensive Income, Net of Tax, Ending Balance	172,262
Accumulated Net Unrealized Investment Gain [Member]
Accumulated Other Comprehensive Income, Net of Tax, Beginning Balance	169,984
Other comprehensive income	4,233
Accumulated Other Comprehensive Income, Net of Tax, Ending Balance	174,217
Accumulated Translation Adjustment [Member]
Accumulated Other Comprehensive Income, Net of Tax, Beginning Balance	5,030
Other comprehensive income	(6,985)
Accumulated Other Comprehensive Income, Net of Tax, Ending Balance	(1,955)
Accumulated other comprehensive income [Member]
Other comprehensive income	$ (2,752)

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Investments (Realized Gain Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Realized pretax gains (losses) on the sale of investments
Gains	$ 24,187	$ 25,570
Losses	(11,001)	(5,324)
Net realized investment gain	13,186	20,246
Fixed Maturity Securities [Member]
Realized pretax gains (losses) on the sale of investments
Gains	13,876	1,132
Losses	(1,472)	(2,155)
Net realized investment gain	12,404	(1,023)
Equity Securities [Member]
Realized pretax gains (losses) on the sale of investments
Gains	10,311	24,438
Losses	(9,529)	(3,169)
Net realized investment gain	$ 782	$ 21,269

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Notes Payable (Tables)

3 Months Ended

Mar. 31, 2015

Notes Payable [Abstract]

Notes Payable

		March 31,		December 31,
		2015		2014
6.30% Senior Notes		$	299,290	$	299,251
$825.0 million Revolving Loan Facility			590,000		525,000
	Total notes payable	$	889,290	$	824,251

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2015

Income Taxes [Abstract]

Differences between our effective tax rate for financial statement purposes and the Federal Statutory rate

	Three months ended March 31,
	2015			2014
Statutory tax rate		35.0	%		35.0	%
Federal tax at statutory rate	$	52,790		$	54,240
Nontaxable municipal bond interest and dividend received deduction		(9,752)			(8,927)
State income taxes, net of federal tax benefit		717			834
Foreign income taxes		9,951			7,226
Foreign tax credit		(9,776)			(7,226)
Indefinitely reinvested earnings of foreign subsidiaries		(9,134)			-
Uncertain tax positions (net of federal tax benefit on state
positions: $93 in 2015 and $144 in 2014)		2,234			320
Other, net		881			594
Income tax expense	$	37,911		$	47,061
Effective tax rate		25.1	%		30.4	%

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Operating activities
Net earnings	$ 112,917	$ 107,911
Adjustments to reconcile net earnings to net cash provided by operating activities:
Change in premium, claims and other receivables	11,039	(44,966)
Change in reinsurance recoverables	169,610	55,197
Change in ceded unearned premium	16,972	(5,939)
Change in loss and loss adjustment expense payable	(209,125)	(53,892)
Change in unearned premium	50,280	32,475
Change in reinsurance, premium and claims payable	(893)	71,873
Change in accounts payable and accrued liabilities	(70,757)	(51,885)
Stock-based compensation expense	4,631	4,214
Depreciation and amortization expense	5,517	4,169
Gain on investments	(13,186)	(20,246)
Other, net	(45,859)	(3,447)
Cash provided by operating activities	31,146	95,464
Investing activities
Sales of available for sale fixed maturity securities	167,206	119,011
Sales of equity securities	66,412	144,075
Maturity or call of available for sale fixed maturity securities	159,814	131,204
Cost of available for sale fixed maturity securities acquired	(128,692)	(179,789)
Cost of equity securities acquired	(100,594)	(70,841)
Change in short-term investments	(73,033)	(248,749)
Payments for purchase of businesses, net of cash received	(100,398)	(2,579)
Other, net	(1,328)	(2,224)
Cash used by investing activities	(10,613)	(109,892)
Financing activities
Advances on line of credit	150,000	100,000
Payments on line of credit	(100,004)	(30,000)
Sale of common stock	5,633	8,428
Purchase of common stock	(44,546)	(30,774)
Dividends paid	(28,451)	(22,575)
Other, net	(11,794)	3,572
Cash provided (used) by financing activities	(29,162)	28,651
Net increase (decrease) in cash	(8,629)	14,223
Cash at beginning of year	102,093	58,301
Cash at end of period	$ 93,464	$ 72,524

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2015

Accumulated Other Comprehensive Income [Abstract]

Schedule of Accumulated Other Comprehensive Income [Table Text Block]

				Foreign		Accumulated
		Net unrealized		currency		other
		investment		translation		comprehensive
		gains		adjustment		income
Three months ended March 31, 2015
Balance at December 31, 2014		$	169,984	$	5,030	$	175,014
Other comprehensive income (loss)			4,233		(6,985)		(2,752)
	Balance at March 31, 2015	$	174,217	$	(1,955)	$	172,262

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Segments (Assets by Segment) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Assets	$ 11,026,297	$ 10,714,346
North America Property & Casualty [Member]
Segment Reporting Information [Line Items]
Assets	2,232,696	1,894,756
Accident And Health [Member]
Segment Reporting Information [Line Items]
Assets	244,394	242,278
International [Member]
Segment Reporting Information [Line Items]
Assets	1,092,640	1,073,889
Investing [Member]
Segment Reporting Information [Line Items]
Assets	7,178,088	7,228,608
Corporate And Other [Member]
Segment Reporting Information [Line Items]
Assets	$ 278,479	$ 274,815

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Notes Payable (Narrative or Textuals) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015
Notes Payable [Abstract]
Interest rate of senior notes	6.30%
Borrowing capacity under line of credit facility	$ 825.0
Borrowing rate under revolving loan facility	1.40%
Remaining borrowing capacity under Revolving Loan Facility as reduced by outstanding letters of credit	$ 230.1

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Investments
Fixed maturity securities - available for sale, at fair value (amortized cost: 2015 - $6,192,036 and 2014 - $6,352,737)	$ 6,452,444	$ 6,610,368
Equity securities - available for sale, at fair value (cost: 2015 - $325,435 and 2014 - $291,070)	334,763	296,352
Short-term investments, at cost (approximates fair value)	325,154	258,186
Total investments	7,112,361	7,164,906
Cash	93,464	102,093
Restricted cash and securities	122,526	119,010
Premium, claims and other receivables	727,615	553,027
Reinsurance recoverables	1,176,141	1,168,900
Ceded unearned premium	332,646	316,715
Ceded life and annuity benefits	48,590	48,499
Deferred policy acquisition costs	236,661	220,321
Goodwill	949,351	905,636
Other assets	226,942	115,239
Total assets	11,026,297	10,714,346
LIABILITIES
Loss and loss adjustment expense payable	3,693,165	3,728,085
Life and annuity policy benefits	48,590	48,499
Reinsurance, premium and claims payable	434,198	301,476
Unearned premium	1,305,327	1,198,930
Deferred ceding commissions	101,169	94,202
Notes payable	889,290	824,251
Accounts payable and accrued liabilities	621,131	615,552
Total liabilities	7,092,870	6,810,995
SHAREHOLDERS' EQUITY
Common stock, $1.00 par value; 250,000 shares authorized (shares issued: 2015 - 126,794 and 2014 - 126,472; outstanding: 2015 - 95,868 and 2014 - 96,521)	126,794	126,472
Additional paid-in capital	1,115,796	1,113,551
Retained earnings	3,526,071	3,441,424
Accumulated other comprehensive income	172,262	175,014
Treasury stock, at cost (shares: 2015 - 30,926 and 2014 - 29,951)	(1,007,496)	(953,110)
Total shareholders' equity	3,933,427	3,903,351
Total liabilities and shareholders' equity	$ 11,026,297	$ 10,714,346

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Investments (Narrative or Textual) (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Investment [Abstract]
Condition for categorizing the impaired securities	$ 1,000,000
Condition for categorizing the impaired securities, percentage	10.00%
Weighted-average life of mortgage-backed and asset-backed securities, Years	5.1
Number of fixed maturity and equity securities held	2,910
Percentage of securities in unrealized loss position	20.00%
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	$ (42,319,000)	$ (41,776,000)

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Consolidated Statement of Changes in Shareholders' Equity (USD $) In Thousands	Total	Common stock [Member]	Additional paid-in capital [Member]	Retained earnings [Member]	Accumulated other comprehensive income [Member]	Treasury stock [Member]
Balance at Dec. 31, 2014	$ 3,903,351	$ 126,472	$ 1,113,551	$ 3,441,424	$ 175,014	$ (953,110)
Net earnings	112,917			112,917
Other comprehensive income	(2,752)				(2,752)
Stock-based compensation	4,631	371	4,260
Issuance of 39 shares for exercise of options, including tax effect	3,609	39	3,570
Issuance of 49 shares for employee stock purchase plan	2,024	49	1,975
Surrender of 137 shares of restricted stock for employee's tax liability	(7,697)	(137)	(7,560)
Purchase of 975 common shares	(54,386)					(54,386)
Cash dividends declared, $0.295 per share	(28,270)			(28,270)
Balance at Mar. 31, 2015	$ 3,933,427	$ 126,794	$ 1,115,796	$ 3,526,071	$ 172,262	$ (1,007,496)

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Stock based Compensation (Narrative or Textuals) (Details)	3 Months Ended
	Mar. 31, 2015
MinimumMember
Stock Based Compensation [Line Items]
Percentage Of Restricted Stock Shares Vesting Range	0.00%
MaximumMember
Stock Based Compensation [Line Items]
Percentage Of Restricted Stock Shares Vesting Range	200.00%

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Supplemental Information (Tables)

3 Months Ended

Mar. 31, 2015

Supplemental Information [Abstract]

Supplemental Information

	Three months ended March 31,
	2015		2014
Income taxes paid (refunded)	$	28,926	$	(478)
Interest paid		2,161		1,539
Dividends declared but not paid at end of period		28,270		22,500
Purchases of common stock not paid at end of period		9,840		639

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies [Abstract]

Commitments and Contingencies

(13)Commitments and Contingencies

Catastrophe and Large Loss Exposure

We have exposure to catastrophic and other large losses caused by natural perils (such as hurricanes, tornados, earthquakes, tsunamis, floods, droughts and hail storms), and man-made events (such as terrorist attacks). The incidence, timing and severity of these losses are unpredictable. We assess our exposures in areas most vulnerable to natural catastrophes and apply procedures to ascertain our probable maximum loss from a single event. We maintain reinsurance protection to reduce our potential losses from a future event.In the first quarter of 2015 and 2014, we recognized accident year net catastrophe losses, after reinsurance and reinstatement premium, of $5.0 million and $4.6 million, respectively, related to various small catastrophes.

Litigation

We are a party to lawsuits, arbitrations and other proceedings that arise in the normal course of our business. Many of such lawsuits, arbitrations and other proceedings involve claims under policies that we underwrite as an insurer or reinsurer, the liabilities for which, we believe, have been adequately included in our loss reserves. Also, from time to time, we are a party to lawsuits, arbitrations and other proceedings that relate to disputes with third parties, or that involve alleged errors and omissions on the part of our subsidiaries. We have provided accruals for these items to the extent we deem the losses probable and reasonably estimable. Although the ultimate outcome of these matters cannot be determined at this time, based on present information, the availability of insurance coverage and advice received from our outside legal counsel, we believe the resolution of any such matters will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Indemnifications

In conjunction with the sales of business assets and subsidiaries, we have provided indemnifications to the buyers. Certain indemnifications cover typical representations and warranties related to our responsibilities to perform under the sales contracts. Under other indemnifications, we agree to reimburse the purchasers for taxes or ERISA-related amounts, if any, assessed after the sale date but related to pre-sale activities. We cannot quantify the maximum potential exposure covered by all of our indemnifications because the indemnifications cover a variety of matters, operations and scenarios and some have no time limit. For those with a time limit, the longest indemnification expires in 2025. We accrue a loss when a valid claim is made by a purchaser and we believe we have potential exposure.

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General Information (Details Textuals) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 countries	Mar. 31, 2014	Dec. 31, 2014
General Information [Abstract]
Number of countries in which The Company underwrites non-correlated specialty insurance products	180
Unamortized Debt Issuance Cost	$ 4.0		$ 4.2
Statutory tax rate	35.00%	35.00%

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General Information (Policies)

3 Months Ended

Mar. 31, 2015

General Information [Abstract]

Agriculture Premium and Receivables

New Accounting and Reporting Policies

The following policies changed in the first quarter of 2015.

Agriculture

The majority of premium written in our new agriculture business relates to multi-peril crop insurance (MPCI), written through the federal crop insurance program administered by the U.S. Department of Agriculture’s Risk Management Agency and the Federal Crop Insurance Corporation (FCIC). We record written premium for our agriculture business as we process acreage reports received from the policyholders. Written premium is earned ratably over the period of risk commencing on the final planting date set by the FCIC, which approximates the start of planting season, and ending on the estimated crop harvest date.

We have a net receivable (payable) due from (to) the FCIC for settlement of MPCI reinsurance. If a net receivable, it is reflected in our consolidated balance sheet with premium, claims and other receivables. If a net payable, it is reflected in our consolidated balance sheet with reinsurance, premium and claims payable.

Income taxes

Income Taxes

Effective in 2015, for certain foreign subsidiaries, we do not provide deferred tax liabilities on undistributed earnings that are essentially permanent in duration. For other foreign subsidiaries, we provide U.S. taxes on undistributed earnings at the U.S. statutory rate of 35%, offset by an adjustment for foreign tax credits, when required. In prior years, we provided U.S. taxes onall undistributed earnings of our foreign subsidiariesat the U.S. statutory rate of 35%, offset by an adjustment for foreign tax credits, when required.

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Consolidated Statement of Changes in Shareholders' Equity (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Issuance of shares for exercise of options	39
Issuance of shares for employee stock purchase plan	49
Surrender of shares of restricted stock for employee's tax liability	(137)
Purchase of common shares	975
Cash dividends declared	$ 0.295

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Investments
Fixed maturity securities, available for sale, amortized cost	$ 6,192,036	$ 6,352,737
Equity securities, available for sale, cost	$ 325,435	$ 291,070
SHAREHOLDERS' EQUITY
Common stock, par value	$ 1	$ 1
Common stock, shares authorized	250,000	250,000
Common stock, shares issued	126,794	126,472
Common stock, shares outstanding	95,868	96,521
Treasury stock	30,926	29,951

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Income Taxes

3 Months Ended

Mar. 31, 2015

Income Taxes [Abstract]

Income Taxes [Text Block]

(9)  Income Taxes

The following table summarizes the differences between our effective tax rate for financial statement purposes and the Federal statutory rate.

	Three months ended March 31,
	2015			2014
Statutory tax rate		35.0	%		35.0	%
Federal tax at statutory rate	$	52,790		$	54,240
Nontaxable municipal bond interest and dividend received deduction		(9,752)			(8,927)
State income taxes, net of federal tax benefit		717			834
Foreign income taxes		9,951			7,226
Foreign tax credit		(9,776)			(7,226)
Indefinitely reinvested earnings of foreign subsidiaries		(9,134)			-
Uncertain tax positions (net of federal tax benefit on state
positions: $93 in 2015 and $144 in 2014)		2,234			320
Other, net		881			594
Income tax expense	$	37,911		$	47,061
Effective tax rate		25.1	%		30.4	%

In the first quarter of 2015, we made an initial assertion that we would indefinitely reinvest the cumulative undistributed earnings of certain foreign subsidiaries primarily organized in the United Kingdom and Spain, which have statutory tax rates of 20.0% and 28.0%, respectively. We made no similar assertion in the first quarter of 2014 or in any periods previously reported. Our 2015 assertion generated a tax benefit of $9.1 million, which included $5.9 million on cumulative undistributed foreign earnings through December 31, 2014 and $3.2 million on undistributed foreign earnings recorded in the first quarter of 2015. Our assertion excluded undistributed foreign earnings that previously have been taxed as deemed dividend inclusions under U.S. tax rules, as well as 2015 earnings for which an assertion cannot be made unless certain U.S. tax regulations are extended for 2015 and future years. At March 31, 2015, our foreign earnings considered to be indefinitely reinvested outside the United States totaled $321.2 million, all of which are subject to U.S. taxes, offset by an adjustment for foreign tax credits, if repatriated. In cases where we could not assert or do not intend to assert indefinite reinvestment of the undistributed earnings of certain foreign subsidiaries, we provided taxes on such undistributed earnings at the U.S. statutory rate of 35.0%, offset by an adjustment for foreign tax credits, where applicable.

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Document and Entity Information In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Apr. 30, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	HCC INSURANCE HOLDINGS INC/DE/
Entity Central Index Key	0000888919
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		95.7

XML

Income Taxes (Parentheticals) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Income Taxes [Abstract]
Federal tax benefit on state positions	$ 93	$ 144

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Consolidated Statement of Earnings (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
REVENUE
Net earned premium	$ 600,563	$ 562,612
Net investment income	53,482	56,806
Other operating income	9,219	9,266
Net realized investment gain	13,186	20,246
Total revenue	676,450	648,930
EXPENSE
Loss and loss adjustment expense, net	365,162	330,746
Policy acquisition costs, net	75,211	69,041
Other operating expense	77,483	87,052
Interest expense	7,766	7,119
Total expense	525,622	493,958
Earnings before income taxes	150,828	154,972
Income tax expense	37,911	47,061
Net earnings	$ 112,917	$ 107,911
Earnings per common share
Basic	$ 1.17	$ 1.08
Diluted	$ 1.17	$ 1.07

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Investments

3 Months Ended

Mar. 31, 2015

Investment [Abstract]

Investments

(4) Investments

The cost or amortized cost, gross unrealized gain or loss, and fair value of our fixed maturity and equity securities, all of which are classified as available for sale, were as follows:

		Cost or		Gross		Gross
		amortized		unrealized		unrealized
		cost		gain		loss		Fair value
March 31, 2015
U.S. government and government agency securities		$	73,540	$	983	$	(7)	$	74,516
Fixed maturity securities of states, municipalities
	and political subdivisions		877,954		56,164		(55)		934,063
Special purpose revenue bonds of states, municipalities
	and political subdivisions		2,253,237		143,514		(1,065)		2,395,686
Corporate securities			726,320		28,287		(2,584)		752,023
Residential mortgage-backed securities			770,957		22,259		(1,806)		791,410
Commercial mortgage-backed securities			567,340		26,032		(592)		592,780
Asset-backed securities			369,289		1,051		(1,038)		369,302
Foreign government securities			124,957		471		(3,396)		122,032
Foreign corporate securities			428,442		7,830		(15,640)		420,632
	Total fixed maturity securities	$	6,192,036	$	286,591	$	(26,183)	$	6,452,444
Equity securities		$	325,435	$	25,464	$	(16,136)	$	334,763

December 31, 2014
U.S. government and government agency securities		$	70,279	$	827	$	(137)	$	70,969
Fixed maturity securities of states, municipalities
	and political subdivisions		896,130		58,738		(160)		954,708
Special purpose revenue bonds of states, municipalities
	and political subdivisions		2,246,707		143,291		(986)		2,389,012
Corporate securities			777,242		25,983		(4,656)		798,569
Residential mortgage-backed securities			805,458		20,215		(3,979)		821,694
Commercial mortgage-backed securities			593,956		19,707		(2,032)		611,631
Asset-backed securities			369,103		316		(2,592)		366,827
Foreign government securities			119,479		767		(1,554)		118,692
Foreign corporate securities			474,383		10,776		(6,893)		478,266
	Total fixed maturity securities	$	6,352,737	$	280,620	$	(22,989)	$	6,610,368
Equity securities		$	291,070	$	24,069	$	(18,787)	$	296,352

Substantially all of our fixed maturity securities are investment grade. The following tables display the gross unrealized losses and fair value of all available for sale securities that were in a continuous unrealized loss position for the periods indicated.

				Less than 12 months				12 months or more				Total
						Unrealized				Unrealized				Unrealized
				Fair value		losses		Fair value		losses		Fair value		losses
March 31, 2015
Fixed maturity securities
	U.S. government and government agency
		securities		$	421	$	-	$	3,985	$	(7)	$	4,406	$	(7)
	Fixed maturity securities of states,
		municipalities and political subdivisions			16,379		(55)		-		-		16,379		(55)
	Special purpose revenue bonds of states,
		municipalities and political subdivisions			84,718		(587)		17,341		(478)		102,059		(1,065)
	Corporate securities				66,827		(1,578)		42,230		(1,006)		109,057		(2,584)
	Residential mortgage-backed securities				75,826		(540)		104,754		(1,266)		180,580		(1,806)
	Commercial mortgage-backed securities				12,013		(155)		25,852		(437)		37,865		(592)
	Asset-backed securities				73,934		(119)		91,570		(919)		165,504		(1,038)
	Foreign government securities				51,165		(3,392)		1,242		(4)		52,407		(3,396)
	Foreign corporate securities				167,020		(12,267)		20,657		(3,373)		187,677		(15,640)
Equity securities					139,886		(12,696)		11,501		(3,440)		151,387		(16,136)
			Total	$	688,189	$	(31,389)	$	319,132	$	(10,930)	$	1,007,321	$	(42,319)

December 31, 2014
Fixed maturity securities
	U.S. government and government agency
		securities		$	14,813	$	(8)	$	11,236	$	(129)	$	26,049	$	(137)
	Fixed maturity securities of states,
		municipalities and political subdivisions			3,857		(21)		19,337		(139)		23,194		(160)
	Special purpose revenue bonds of states,
		municipalities and political subdivisions			4,041		(19)		100,947		(967)		104,988		(986)
	Corporate securities				211,111		(2,498)		48,091		(2,158)		259,202		(4,656)
	Residential mortgage-backed securities				37,434		(100)		226,256		(3,879)		263,690		(3,979)
	Commercial mortgage-backed securities				5,228		(26)		99,868		(2,006)		105,096		(2,032)
	Asset-backed securities				181,579		(1,245)		78,797		(1,347)		260,376		(2,592)
	Foreign government securities				55,280		(1,498)		7,187		(56)		62,467		(1,554)
	Foreign corporate securities				182,163		(4,587)		21,571		(2,306)		203,734		(6,893)
Equity securities					111,251		(17,839)		3,934		(948)		115,185		(18,787)
			Total	$	806,757	$	(27,841)	$	617,224	$	(13,935)	$	1,423,981	$	(41,776)

At March 31,2015, we held approximately 2,910fixed maturity and equity securities, of which 20% included at least one lot in an unrealized loss position. A security has an impairment loss when its fair value is less than its cost or amortized cost at the balance sheet date. We evaluate our securities for possible other-than-temporary impairment losses at each quarter end. Our reviews cover all impaired securities where the loss exceeds $1.0 million and the loss eitherexceeds 10% of cost or the security had been in a loss position for longer than twelve consecutive months. We do not consider the $42.3 million of gross unrealized losses in our portfolio atMarch 31,2015 to be other-than-temporary impairments as these losses relate to non-credit factors, such as interest rate changes, fluctuations in exchange rates and market conditions. We recognized no other-than-temporary impairment losses inthe first quarter of 2015 and 2014.

The amortized cost and fair value of our fixed maturity securities at March 31,2015, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The weighted-average life of our mortgage-backed and asset-backed securities was 5.1 years at March 31,2015.

		Cost or amortized cost		Fair value
Due in 1 year or less		$	156,470	$	153,783
Due after 1 year through 5 years			1,117,553		1,138,249
Due after 5 years through 10 years			1,322,979		1,400,954
Due after 10 years through 15 years			884,731		945,028
Due after 15 years			1,002,717		1,060,938
	Securities with contractual maturities		4,484,450		4,698,952
Mortgage-backed and asset-backed securities			1,707,586		1,753,492
	Total fixed maturity securities	$	6,192,036	$	6,452,444

Realized pretax gains (losses) on the sale of investments included the following:

			Three months ended March 31,
			2015		2014
Gains
	Fixed maturity securities		$	13,876	$	1,132
	Equity securities			10,311		24,438
		Total gains		24,187		25,570
Losses
	Fixed maturity securities			(1,472)		(2,155)
	Equity securities			(9,529)		(3,169)
		Total losses		(11,001)		(5,324)
Net
	Fixed maturity securities			12,404		(1,023)
	Equity securities			782		21,269
		Net realized investment gain (loss)	$	13,186	$	20,246

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Segments

3 Months Ended

Mar. 31, 2015

Segments [Abstract]

Segments

(3) Segments

In the first quarter of 2015, following the acquisition of ProAg, HCC’s executive management changed the structure under which it manages and evaluates the results of our numerous product lines. We now report our results in four operating segments, consisting of three insurance underwriting segments: 1) North AmericaProperty & Casualty, 2) Accident & Health and 3) International, and the Investingsegment.

Each of our three insurance underwriting segments bears risk for insurance coverage written within its portfolio of insurance products. Each segment generates income from premium written by our underwriting agencies, through third party agents and brokers, or on a direct basis. Fee and commission income earned by our agencies from third party insurance companies is included in segment revenue. Each segment incurs insurance losses, acquisition costs, claims management costs and other administrative expenses related to our insurance companies and underwriting agencies. Internal claims department costs are managed and reported as a component of loss and loss adjustment expense. We monitor and assess each segment’s pretax results based on underwriting profit, gross and net written premium, and its combined ratio, consisting of the segment’s net loss ratio and expense ratio.

Included in the portfolio of products for each insurance underwriting segment are the following key products:

•North AmericaProperty & Casualty – directors' and officers' liability (D&O), primary and excess casualty, small account errors and omissions liability, employment practices liability, agriculture, aviation, sports and entertainment, public risk, surety, and various smaller products.

•Accident & Health – medical stop-loss, short-term domestic and international medical, and travel.

•International – marine and energy, property treaty, property (direct and facultative), accident and health, D&O, professional indemnity, casualty, surety, and credit.

The North America Property & Casualty segment includes the former U.S. Property & Casualty segment, the U.S. portion of the former Professional Liability segment, the Surety portion of the former U.S. Surety & Credit segment and ProAg’s agriculture business. The International segment includes the former International segment, the International portion of the former Professional Liability segment, and the Credit portion of the former U.S. Surety & Credit segment. The Accident & Health and Investing segments are unchanged from the prior presentation. All prior period information has been recast to present our segment disclosures and information on a comparable basis with our new segment reporting structure.

The Investing segment includes our consolidated investment portfolio, as well as all investment income, investment related expenses, realized investment gains and losses, and other-than-temporary impairment credit losses on investments. All investment activity is reported as revenue, consistent with our consolidated presentation.

In addition to our segments, we include a Corporate & Other category to reconcile segment results to consolidated totals. The Corporate & Other category includes: 1) corporate operating expenses not allocated to the segments, 2) interest expense on notes payable, 3) foreign currency expense (benefit) and 4) underwriting results of our Exited Lines. Our Exited Lines include product lines that we no longer write and do not expect to write in the future.

The following tables present information by business segment.

			North America Property		Accident						Corporate
			& Casualty		& Health		International		Investing		& Other		Consolidated
Three months ended March 31, 2015
Net earned premium			$	209,239	$	254,950	$	136,377	$	-	$	(3)	$	600,563
Other revenue				6,102		2,013		1,008		66,668		96		75,887
	Segment revenue			215,341		256,963		137,385		66,668		93		676,450
Loss and LAE				116,436		187,011		61,443		-		272		365,162
Other expense				68,348		38,665		47,311		-		6,136		160,460
	Segment expense			184,784		225,676		108,754		-		6,408		525,622
		Segment pretax earnings (loss)	$	30,557	$	31,287	$	28,631	$	66,668	$	(6,315)	$	150,828

Three months ended March 31, 2014
Net earned premium			$	201,334	$	232,143	$	128,844	$	-	$	291	$	562,612
Other revenue				5,431		1,640		976		77,052		1,219		86,318
	Segment revenue			206,765		233,783		129,820		77,052		1,510		648,930
Loss and LAE				103,553		170,805		56,314		-		74		330,746
Other expense				57,538		34,573		46,475		-		24,626		163,212
	Segment expense			161,091		205,378		102,789		-		24,700		493,958
		Segment pretax earnings (loss)	$	45,674	$	28,405	$	27,031	$	77,052	$	(23,190)	$	154,972

In conjunction with the resegmentation, we reassigned the goodwill associated with the lines of business in our former Professional Liability and U.S. Surety & Credit reporting units at December 31, 2014 to the applicable North America Property & Casualty and International reporting units. We allocated goodwill to the lines of business within the former reporting units based on the relative fair value of each line of business to the sum of the former reporting unit’s total fair value at December 31, 2014. We noted no indicators of impairment as of December 31, 2014, after allocation of goodwill.

The goodwill balances by reportable segment, after allocation of the goodwill in our former reporting units, are presented below. We noted no indicators of impairment in our goodwill as of March 31, 2015.

		North America Property		Accident
		& Casualty		& Health		International		Total
Balance at beginning of year		$	552,006	$	144,113	$	209,517	$	905,636
Acquisition of ProAg			45,000		-		-		45,000
Other, principally foreign exchange			100		-		(1,385)		(1,285)
	Balance at March 31, 2015	$	597,106	$	144,113	$	208,132	$	949,351

The table below presents total assets by segment following our resegmentation.

	March 31,		December 31,
	2015		2014
North America Property & Casualty	$	2,232,696	$	1,894,756
Accident & Health		244,394		242,278
International		1,092,640		1,073,889
Investing		7,178,088		7,228,608
Corporate & Other		278,479		274,815
Total	$	11,026,297	$	10,714,346

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Supplemental Information

3 Months Ended

Mar. 31, 2015

Supplemental Information [Abstract]

Supplemental Information

(14) Supplemental Information

Supplemental cash flow information was as follows:

	Three months ended March 31,
	2015		2014
Income taxes paid (refunded)	$	28,926	$	(478)
Interest paid		2,161		1,539
Dividends declared but not paid at end of period		28,270		22,500
Purchases of common stock not paid at end of period		9,840		639

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Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2015

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income [Text Block]

(10) Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income in our consolidated balance sheets were as follows:

				Foreign		Accumulated
		Net unrealized		currency		other
		investment		translation		comprehensive
		gains		adjustment		income
Three months ended March 31, 2015
Balance at December 31, 2014		$	169,984	$	5,030	$	175,014
Other comprehensive income (loss)			4,233		(6,985)		(2,752)
	Balance at March 31, 2015	$	174,217	$	(1,955)	$	172,262

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Liability for Unpaid Loss and Loss Adjustment Expense

3 Months Ended

Mar. 31, 2015

Liability for Unpaid Loss and Loss Adjustment Expense

Liability For Future Policy Benefits And Unpaid Claims Disclosure TextBlock

(7) Liability for Unpaid Loss and Loss Adjustment Expense

The table below provides a reconciliation of our liability for loss and loss adjustment expense payable (referred to as reserves). We recognized no prior year loss development in the first quarter of 2015 and 2014.

		Three months ended March 31,
		2015		2014
Reserves at beginning of period		$	3,728,085	$	3,902,132
Less reinsurance recoverables on reserves			1,070,463		1,122,731
	Net reserves at beginning of period		2,657,622		2,779,401
Net reserve additions from acquired business			9,386		-
Net loss and loss adjustment expense			365,162		330,746
Net loss and loss adjustment expense payments			(388,538)		(363,858)
Foreign currency adjustment			(32,951)		2,552
	Net reserves at end of period		2,610,681		2,748,841
Plus reinsurance recoverables on reserves			1,082,484		1,098,576
	Reserves at end of period	$	3,693,165	$	3,847,417

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Commitments and Contingencies (Narrative or Textuals) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Commitments And Contingencies [Line Items]
Pretax cat loss after reinsurance	$ 5.0	$ 4.6
Longest Indemnification Expiration Date	2025

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Fair Value Measurements

3 Months Ended

Mar. 31, 2015

Fair Value Measurements [Abstract]

Fair Value Measurements

(5) Fair Value Measurements

Our financial instruments include assets and liabilities carried at fair value, as well as assets and liabilities carried at cost or amortized cost but disclosed at fair value in our financial statements.In determining fair value, we generally apply the market approach, which uses prices and other relevant data based on market transactions involving identical or comparable assets and liabilities. We classify our financial instruments into the following three-level hierarchy:

•Level 1 – Inputs are based on quoted prices in active markets for identical instruments.

•Level 2 – Inputs are based on observable market data (other than quoted prices), or are derived from or corroborated by observable market data.

•Level 3 – Inputs are unobservable and not corroborated by market data.

Our Level 1 investments consist ofU.S. Treasuries, money market fundsand equity securities traded in an active exchange market. We use unadjusted quoted prices for identical instruments to measure fair value.

Our Level 2 investments include most of our fixed maturity securities, which consist of U.S. government agency securities, foreign government securities, municipal bonds (including those held as restricted securities), corporate debt securities, bank loans, foreign debt securities, mortgage-backed and asset-backed securities (including collateralized loan obligations), and deposits supporting our Lloyd’s syndicate business. Level 2 also includes certificates of deposit and other interest-bearing deposits at banks, which we report as short-term investments. We measure fair value for the majority of our Level 2 investments using matrix pricing and observable market data, including benchmark securities or yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, bids, offers, default rates, loss severity and other economic measures. We measure fair value for our structured securities using observable market data in cash flow models.

We are responsible for the prices used in our fair value measurements. We use independent pricing services to assist us in determining fair value of all of our Level 2 investments. The pricing services provide a single price or quote per security. We use data provided by our third party investment managers and Lloyd’s of London to value the remaining Level 2 investments. To validate that these quoted prices are reasonable estimates of fair value, we perform various quantitative and qualitative procedures, including: 1) evaluation of the underlying methodologies, 2) analysis of recent sales activity, 3) analytical review of our fair values against current market prices and 4) comparison of the pricing services’ fair value to other pricing services’ fair value for the same investment. No markets for our investments were judged to be inactive at period end. Based on these procedures, we did not adjust the prices or quotes provided by our independent pricing services, third party investment managers or Lloyd’s of London as of March 31,2015 or December 31, 2014.

Our Level 2 financial instruments also include our notes payable. We determine the fair value of our 6.30% Senior Notes based on quoted prices in an inactive market. The fair value of borrowings under our Revolving Loan Facility approximates the carrying amount because interest is based on 30-day LIBOR plus a margin.

Our Level 3 securities include certain fixed maturity securities and an insurance contract that we account for as a derivative and classify in other assets. Our Level 3 category also includes liabilities for future earnoutpayments due to former owners of businesses we acquired, which are classified within accounts payable and accrued liabilities. We determine fair value of the derivative and the earnout payments based on internally developed models that use assumptions or other data that are not readily observable from objective sources.

The following tables present the fair value of our financial instruments that were carried or disclosed at fair value. Unless indicated, these items were carried at fair value on our consolidated balance sheets. There were no material transfers between Level 1, Level 2 or Level 3 in the first quarter of 2015 and 2014.

			Level 1		Level 2		Level 3		Total
March 31, 2015
Fixed maturity securities
	U.S. government and government agency securities		$	69,238	$	5,278	$	-	$	74,516
	Fixed maturity securities of states, municipalities
		and political subdivisions		-		934,063		-		934,063
	Special purpose revenue bonds of states, municipalities
		and political subdivisions		-		2,395,686		-		2,395,686
	Corporate securities			-		751,875		148		752,023
	Residential mortgage-backed securities			-		791,410		-		791,410
	Commercial mortgage-backed securities			-		592,780		-		592,780
	Asset-backed securities			-		369,302		-		369,302
	Foreign government securities			-		122,032		-		122,032
	Foreign corporate securities			-		420,632		-		420,632
		Total fixed maturity securities		69,238		6,383,058		148		6,452,444
Equity securities				334,763		-		-		334,763
Short-term investments*				187,436		137,718		-		325,154
Restricted cash and securities				-		3,156		-		3,156
Premium, claims and other receivables				-		53,212		-		53,212
Other assets				17		-		1,395		1,412
	Total assets measured at fair value		$	591,454	$	6,577,144	$	1,543	$	7,170,141
Notes payable*			$	-	$	936,968	$	-	$	936,968
Accounts payable and accrued liabilities - earnout liabilities				-		3,156		8,301		11,457
	Total liabilities measured at fair value		$	-	$	940,124	$	8,301	$	948,425

__________

* Carried at cost or amortized cost on consolidated balance sheet.

			Level 1		Level 2		Level 3		Total
December 31, 2014
Fixed maturity securities
	U.S. government and government agency securities		$	63,663	$	7,306	$	-	$	70,969
	Fixed maturity securities of states, municipalities
		and political subdivisions		-		954,708		-		954,708
	Special purpose revenue bonds of states, municipalities
		and political subdivisions		-		2,389,012		-		2,389,012
	Corporate securities			-		798,421		148		798,569
	Residential mortgage-backed securities			-		821,694		-		821,694
	Commercial mortgage-backed securities			-		611,631		-		611,631
	Asset-backed securities			-		366,827		-		366,827
	Foreign government securities			-		118,692		-		118,692
	Foreign corporate securities			-		478,266		-		478,266
		Total fixed maturity securities		63,663		6,546,557		148		6,610,368
Equity securities				296,352		-		-		296,352
Short-term investments*				159,297		98,889		-		258,186
Restricted cash and securities				-		2,729		-		2,729
Premium, claims and other receivables				-		56,493		-		56,493
Other assets				18		-		1,306		1,324
	Total assets measured at fair value		$	519,330	$	6,704,668	$	1,454	$	7,225,452
Notes payable*			$	-	$	875,094	$	-	$	875,094
Accounts payable and accrued liabilities - earnout liabilities				-		2,729		8,744		11,473
	Total liabilities measured at fair value		$	-	$	877,823	$	8,744	$	886,567

__________

*Carried at cost or amortized cost on consolidated balance sheet.

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Reinsurance

3 Months Ended

Mar. 31, 2015

Reinsurance [Abstract]

Reinsurance

(6) Reinsurance

In the normal course of business, our insurance companies cede a portion of their premium to reinsurers through treaty and facultative reinsurance agreements. Although reinsurance does not discharge the direct insurer from liability to its policyholder, our insurance companies participate in such agreements in order to limit their loss exposure, protect them against catastrophic losses and diversify their business. The following tables present the effect of such reinsurance transactions on our premium, loss and loss adjustment expense and policy acquisition costs.

		Three months ended March 31,
		2015		2014
Direct written premium		$	717,048	$	620,512
Reinsurance assumed			109,088		126,210
Reinsurance ceded			(157,220)		(156,540)
	Net written premium	$	668,916	$	590,182
Direct earned premium		$	703,584	$	637,313
Reinsurance assumed			71,168		76,023
Reinsurance ceded			(174,189)		(150,724)
	Net earned premium	$	600,563	$	562,612
Direct loss and loss adjustment expense		$	458,726	$	359,629
Reinsurance assumed			27,216		41,802
Reinsurance ceded			(120,780)		(70,685)
	Net loss and loss adjustment expense	$	365,162	$	330,746

Policy acquisition costs		$	115,070	$	104,645
Ceding commissions			(39,859)		(35,604)
	Net policy acquisition costs	$	75,211	$	69,041

The table below shows the components of our reinsurance recoverables in our consolidated balance sheets.

		March 31,		December 31,
		2015		2014
Reinsurance recoverable on paid losses		$	95,157	$	99,937
Reinsurance recoverable on outstanding losses			448,069		443,059
Reinsurance recoverable on incurred but not reported losses			634,415		627,404
Reserve for uncollectible reinsurance			(1,500)		(1,500)
	Total reinsurance recoverables	$	1,176,141	$	1,168,900

At each quarter end, we review our financial exposure to the reinsurance market based on our individual reinsurance recoverable balances as of the prior quarter end. We take actions to collect outstanding balances or to mitigate our exposure to possible uncollectible amounts. We had a $1.5 million reserve for potentially uncollectible amounts at March 31,2015. Reinsurance recoverables related to our settlement of Spanish surety bond claims totaled $86.3 million at March 31,2015, including $43.4 million on paid losses. Our reinsurers have paid our reinsurance claims in full on a timely basis, with the exception of a small number of reinsurers that are currently in run-off and disputing balances owed us. Recoverables from these run-off reinsurers totaled $41.5million, including $36.8 million on paid losses, at March 31,2015 (at quarter-end foreign currency exchange rate). No payments have been received from these reinsurers despite their participation in contracts on essentially the same terms of our other reinsurers. We are vigorously pursuing collection of these recoverables, including through arbitration where necessary, and believe these amounts are fully recoverable. Accordingly, we have not recorded a reserve for uncollectibility related to these amounts. While we believe our current reserve is adequate based on information currently available, market conditions may change or additional information might be obtained that may require us to change the reserve in the future.

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Notes Payable

3 Months Ended

Mar. 31, 2015

Notes Payable [Abstract]

Notes Payable

(8) Notes Payable

Our notes payable consisted of the following:

		March 31,		December 31,
		2015		2014
6.30% Senior Notes		$	299,290	$	299,251
$825.0 million Revolving Loan Facility			590,000		525,000
	Total notes payable	$	889,290	$	824,251

There have been no changes to the terms and conditions related to our 6.30% Senior Notes or the $825.0 million Revolving Loan Facility (the Facility) from those described in Note 7, “Notes Payable” to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2014. We were in compliance with debt covenants related to our 6.30% Senior Notes and the Facility at March 31, 2015.

The weighted-average interest rate on borrowings under the Facility at March 31, 2015was 1.4%. The borrowings and letters of credit issued under the Facility reduced our available borrowing capacity on the Facility to $230.1 million at March 31, 2015.

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Stock Based Compensation (Tables)

3 Months Ended

Mar. 31, 2015

Share-based Compensation [Abstract]

Schedule of Share-based Compensation, Common Stock, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

		Weighted-average
	Number	grant date		Aggregate		Vesting
	of shares	fair value		fair value		period
Restricted stock	299	$	55.81	$	16,692	1 - 4 years
Restricted stock units	4		55.78		245	4 years

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Liability for Unpaid Loss and Loss Adjustment Expense (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
LiabilityForUnpaidClaimsAndClaimsAdjustmentExpenseNetAbstract
Reserves at beginning of period	$ 3,728,085	$ 3,902,132
Less reinsurance recoverables on reserves	1,070,463	1,122,731
Net reserves at beginning of period	2,657,622	2,779,401
Net reserve additions from acquired business	9,386
Net loss and loss adjustment expense:
Net loss and loss adjustment expense	365,162	330,746
Net loss and loss adjustment expense payments for claims occurring during:
Net loss and loss adjustment expense payments	(388,538)	(363,858)
Foreign currency adjustment	(32,951)	2,552
Net reserves at end of period	2,610,681	2,748,841
Plus reinsurance recoverables on reserves	1,082,484	1,098,576
Reserves at end of period	$ 3,693,165	$ 3,847,417

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Stock based Compensation

3 Months Ended

Mar. 31, 2015

Stock based Compensation [Abstract]

Stock based Compensation

(12) Stock-Based Compensation

In 2015, we granted the following shares ofrestricted stock and restricted stock units.

		Weighted-average
	Number	grant date		Aggregate		Vesting
	of shares	fair value		fair value		period
Restricted stock	299	$	55.81	$	16,692	1 - 4 years
Restricted stock units	4		55.78		245	4 years

Certain awards of restricted stock and restricted stock units contain a performance condition based on the ultimate results for the applicable underwriting year.The number of such shares that vest could be higher or lowerthan initially granted.We measure fair value for these awards based on the closing price of our common stock on the grant date, and we recognize expense on a straight-line basis over the vesting period for those restricted stock awards or units expected to vest.

Certain of our executive officers were granted performance-based restricted stock in 2015. This restricted stock vests after three years and can vest from 0% to 200% of the initial shares granted.Vesting is based equally on an operating return on equity performance factor and a total shareholder return performance factor.

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Investments (Tables)

3 Months Ended

Mar. 31, 2015

Investment [Abstract]

Fixed Maturity & Equity Securities Available For Sale

		Cost or		Gross		Gross
		amortized		unrealized		unrealized
		cost		gain		loss		Fair value
March 31, 2015
U.S. government and government agency securities		$	73,540	$	983	$	(7)	$	74,516
Fixed maturity securities of states, municipalities
	and political subdivisions		877,954		56,164		(55)		934,063
Special purpose revenue bonds of states, municipalities
	and political subdivisions		2,253,237		143,514		(1,065)		2,395,686
Corporate securities			726,320		28,287		(2,584)		752,023
Residential mortgage-backed securities			770,957		22,259		(1,806)		791,410
Commercial mortgage-backed securities			567,340		26,032		(592)		592,780
Asset-backed securities			369,289		1,051		(1,038)		369,302
Foreign government securities			124,957		471		(3,396)		122,032
Foreign corporate securities			428,442		7,830		(15,640)		420,632
	Total fixed maturity securities	$	6,192,036	$	286,591	$	(26,183)	$	6,452,444
Equity securities		$	325,435	$	25,464	$	(16,136)	$	334,763

December 31, 2014
U.S. government and government agency securities		$	70,279	$	827	$	(137)	$	70,969
Fixed maturity securities of states, municipalities
	and political subdivisions		896,130		58,738		(160)		954,708
Special purpose revenue bonds of states, municipalities
	and political subdivisions		2,246,707		143,291		(986)		2,389,012
Corporate securities			777,242		25,983		(4,656)		798,569
Residential mortgage-backed securities			805,458		20,215		(3,979)		821,694
Commercial mortgage-backed securities			593,956		19,707		(2,032)		611,631
Asset-backed securities			369,103		316		(2,592)		366,827
Foreign government securities			119,479		767		(1,554)		118,692
Foreign corporate securities			474,383		10,776		(6,893)		478,266
	Total fixed maturity securities	$	6,352,737	$	280,620	$	(22,989)	$	6,610,368
Equity securities		$	291,070	$	24,069	$	(18,787)	$	296,352

Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position

				Less than 12 months				12 months or more				Total
						Unrealized				Unrealized				Unrealized
				Fair value		losses		Fair value		losses		Fair value		losses
March 31, 2015
Fixed maturity securities
	U.S. government and government agency
		securities		$	421	$	-	$	3,985	$	(7)	$	4,406	$	(7)
	Fixed maturity securities of states,
		municipalities and political subdivisions			16,379		(55)		-		-		16,379		(55)
	Special purpose revenue bonds of states,
		municipalities and political subdivisions			84,718		(587)		17,341		(478)		102,059		(1,065)
	Corporate securities				66,827		(1,578)		42,230		(1,006)		109,057		(2,584)
	Residential mortgage-backed securities				75,826		(540)		104,754		(1,266)		180,580		(1,806)
	Commercial mortgage-backed securities				12,013		(155)		25,852		(437)		37,865		(592)
	Asset-backed securities				73,934		(119)		91,570		(919)		165,504		(1,038)
	Foreign government securities				51,165		(3,392)		1,242		(4)		52,407		(3,396)
	Foreign corporate securities				167,020		(12,267)		20,657		(3,373)		187,677		(15,640)
Equity securities					139,886		(12,696)		11,501		(3,440)		151,387		(16,136)
			Total	$	688,189	$	(31,389)	$	319,132	$	(10,930)	$	1,007,321	$	(42,319)

December 31, 2014
Fixed maturity securities
	U.S. government and government agency
		securities		$	14,813	$	(8)	$	11,236	$	(129)	$	26,049	$	(137)
	Fixed maturity securities of states,
		municipalities and political subdivisions			3,857		(21)		19,337		(139)		23,194		(160)
	Special purpose revenue bonds of states,
		municipalities and political subdivisions			4,041		(19)		100,947		(967)		104,988		(986)
	Corporate securities				211,111		(2,498)		48,091		(2,158)		259,202		(4,656)
	Residential mortgage-backed securities				37,434		(100)		226,256		(3,879)		263,690		(3,979)
	Commercial mortgage-backed securities				5,228		(26)		99,868		(2,006)		105,096		(2,032)
	Asset-backed securities				181,579		(1,245)		78,797		(1,347)		260,376		(2,592)
	Foreign government securities				55,280		(1,498)		7,187		(56)		62,467		(1,554)
	Foreign corporate securities				182,163		(4,587)		21,571		(2,306)		203,734		(6,893)
Equity securities					111,251		(17,839)		3,934		(948)		115,185		(18,787)
			Total	$	806,757	$	(27,841)	$	617,224	$	(13,935)	$	1,423,981	$	(41,776)

Amortized cost and fair value of fixed maturity securities investments classified by contractual maturity date

		Cost or amortized cost		Fair value
Due in 1 year or less		$	156,470	$	153,783
Due after 1 year through 5 years			1,117,553		1,138,249
Due after 5 years through 10 years			1,322,979		1,400,954
Due after 10 years through 15 years			884,731		945,028
Due after 15 years			1,002,717		1,060,938
	Securities with contractual maturities		4,484,450		4,698,952
Mortgage-backed and asset-backed securities			1,707,586		1,753,492
	Total fixed maturity securities	$	6,192,036	$	6,452,444

Realized pretax gains (losses) on the sale of investments

			Three months ended March 31,
			2015		2014
Gains
	Fixed maturity securities		$	13,876	$	1,132
	Equity securities			10,311		24,438
		Total gains		24,187		25,570
Losses
	Fixed maturity securities			(1,472)		(2,155)
	Equity securities			(9,529)		(3,169)
		Total losses		(11,001)		(5,324)
Net
	Fixed maturity securities			12,404		(1,023)
	Equity securities			782		21,269
		Net realized investment gain (loss)	$	13,186	$	20,246

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Reinsurance (Reinsurance Recoverables) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Components of reinsurance recoverables
Reinsurance recoverable on paid losses	$ 95,157	$ 99,937
Reinsurance recoverable on outstanding losses	448,069	443,059
Reinsurance recoverable on incurred but not reported losses	634,415	627,404
Reserve for uncollectible reinsurance	(1,500)	(1,500)
Total reinsurance recoverables	$ 1,176,141	$ 1,168,900

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Investments (Schedule of Available for Sale Securities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Fixed Maturity & Equity Securities Available for Sale
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis	$ 6,192,036	$ 6,352,737
Gross unrealized gain	286,591	280,620
Gross unrealized loss	(26,183)	(22,989)
Fixed maturity securities - available for sale	6,452,444	6,610,368
Available for sale equity securities
Available-for-sale Equity Securities, Amortized Cost Basis	325,435	291,070
Gross unrealized gain	25,464	24,069
Gross unrealized loss	(16,136)	(18,787)
Available-for-sale Securities, Equity Securities	334,763	296,352
US Government and Government Agency Securities [Member]
Fixed Maturity & Equity Securities Available for Sale
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis	73,540	70,279
Gross unrealized gain	983	827
Gross unrealized loss	(7)	(137)
Fixed maturity securities - available for sale	74,516	70,969
Fixed Maturity Securities of States, Municipalities and Political Subdivisions Securities [Member]
Fixed Maturity & Equity Securities Available for Sale
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis	877,954	896,130
Gross unrealized gain	56,164	58,738
Gross unrealized loss	(55)	(160)
Fixed maturity securities - available for sale	934,063	954,708
Special Purpose Revenue Bonds Of States Municipalities And Political Subdivisions [Member]
Fixed Maturity & Equity Securities Available for Sale
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis	2,253,237	2,246,707
Gross unrealized gain	143,514	143,291
Gross unrealized loss	(1,065)	(986)
Fixed maturity securities - available for sale	2,395,686	2,389,012
Corporate Securities [Member]
Fixed Maturity & Equity Securities Available for Sale
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis	726,320	777,242
Gross unrealized gain	28,287	25,983
Gross unrealized loss	(2,584)	(4,656)
Fixed maturity securities - available for sale	752,023	798,569
Residential Mortgage Backed Securities [Member]
Fixed Maturity & Equity Securities Available for Sale
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis	770,957	805,458
Gross unrealized gain	22,259	20,215
Gross unrealized loss	(1,806)	(3,979)
Fixed maturity securities - available for sale	791,410	821,694
Commercial Mortgage Backed Securities [Member]
Fixed Maturity & Equity Securities Available for Sale
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis	567,340	593,956
Gross unrealized gain	26,032	19,707
Gross unrealized loss	(592)	(2,032)
Fixed maturity securities - available for sale	592,780	611,631
Asset-backed Securities [Member]
Fixed Maturity & Equity Securities Available for Sale
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis	369,289	369,103
Gross unrealized gain	1,051	316
Gross unrealized loss	(1,038)	(2,592)
Fixed maturity securities - available for sale	369,302	366,827
Foreign Government Securities [Member]
Fixed Maturity & Equity Securities Available for Sale
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis	124,957	119,479
Gross unrealized gain	471	767
Gross unrealized loss	(3,396)	(1,554)
Fixed maturity securities - available for sale	122,032	118,692
Foreign Corporate Securities [Member]
Fixed Maturity & Equity Securities Available for Sale
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis	428,442	474,383
Gross unrealized gain	7,830	10,776
Gross unrealized loss	(15,640)	(6,893)
Fixed maturity securities - available for sale	$ 420,632	$ 478,266

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Consolidated Statement of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Statement of Income and Comprehensive Income [Abstract]
Net earnings	$ 112,917	$ 107,911
Investment gains:
Investment gains during the period	20,009	86,080
Income tax charge	7,205	30,570
Investments gains, net of tax	12,804	55,510
Less reclassification adjustments to:
Net realized investment gain	13,186	20,246
Income tax expense	4,615	7,086
Total reclassifications included in net earnings, net of tax	8,571	13,160
Net unrealized investment gains	4,233	42,350
Foreign currency translation adjustment	(7,052)	788
Income tax benefit	(67)	(432)
Foreign currency translation adjustment, net of tax	(6,985)	1,220
Other comprehensive income (loss)	(2,752)	43,570
Comprehensive income	$ 110,165	$ 151,481

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Acquisition

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Acquisition

(2) Acquisition

Effective January 1, 2015, we completed the acquisition of all of the capital stock of ProAg from CUNA Mutual Group for $104.5 million cash, subject to a net worth adjustment. ProAg writes multi-peril crop, crop hail and other named peril insurance. Crop insurance is a non-correlated line of business we strategically targeted to add to our diversified portfolio of specialty insurance businesses. On April 28, 2015, the parties agreed to reduce the purchase price by $2.1 million in finalization of the net worth adjustment. Our initial accounting of this business acquisition, recorded as of March 31, 2015, will change by an immaterial amount based on the settlement of the final purchase price. We expect to complete this accounting in the second quarter of 2015.

As of March 31, 2015, we allocated the provisional purchase price to the acquired identifiable assets and liabilities of ProAg based on estimated fair values at the acquisition date. We recorded $458.5 million of tangible assets, primarily receivables and reinsurance recoverables, and $453.0 million of liabilities, primarily reserves and reinsurance payables. The majority of these assets and liabilities related to ProAg’s reinsurance year 2014, which is 100% ceded to the FCIC and third party reinsurers (including CUNA Mutual Group) under existing reinsurance agreements. We expect settlement of reinsurance year 2014 amounts to occur with all parties during the fourth quarter of 2015.

We also recognized $54.0 million of intangible assets and $45.0 million of goodwill, neither of which is tax deductible. The goodwill primarily represents the value of ProAg’s assembled workforce and opportunities for future expansion utilizing ProAg’s infrastructure. The intangible assets relate to agent relationships and ProAg’s trade name with fair values of $23.0 million and $8.0 million, respectively, which will be amortized over a useful life of 15 years and 10 years, respectively. Indefinite-lived intangible assetsof $23.0 million relate to state and federal insurance licenses, which will be reviewed annually for impairment. Intangible assets are included in other assets in our consolidated balance sheet.

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Stock based compensation (Schedule of Stock-based Compensation Grants) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Restricted stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares	299
Weighted-average grant date fair value, awarded	$ 55.81
Aggregate fair value	$ 16,692
Restricted stock [Member] | MinimumMember
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
Restricted stock [Member] | MaximumMember
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Restricted stock units (RSU) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares	4
Weighted-average grant date fair value, awarded	$ 55.78
Aggregate fair value	$ 245
Restricted stock units (RSU) [Member] | MinimumMember
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Restricted stock units (RSU) [Member] | MaximumMember
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value Measurements [Abstract]

Assets and liabilities at fair value

			Level 1		Level 2		Level 3		Total
March 31, 2015
Fixed maturity securities
	U.S. government and government agency securities		$	69,238	$	5,278	$	-	$	74,516
	Fixed maturity securities of states, municipalities
		and political subdivisions		-		934,063		-		934,063
	Special purpose revenue bonds of states, municipalities
		and political subdivisions		-		2,395,686		-		2,395,686
	Corporate securities			-		751,875		148		752,023
	Residential mortgage-backed securities			-		791,410		-		791,410
	Commercial mortgage-backed securities			-		592,780		-		592,780
	Asset-backed securities			-		369,302		-		369,302
	Foreign government securities			-		122,032		-		122,032
	Foreign corporate securities			-		420,632		-		420,632
		Total fixed maturity securities		69,238		6,383,058		148		6,452,444
Equity securities				334,763		-		-		334,763
Short-term investments*				187,436		137,718		-		325,154
Restricted cash and securities				-		3,156		-		3,156
Premium, claims and other receivables				-		53,212		-		53,212
Other assets				17		-		1,395		1,412
	Total assets measured at fair value		$	591,454	$	6,577,144	$	1,543	$	7,170,141
Notes payable*			$	-	$	936,968	$	-	$	936,968
Accounts payable and accrued liabilities - earnout liabilities				-		3,156		8,301		11,457
	Total liabilities measured at fair value		$	-	$	940,124	$	8,301	$	948,425

			Level 1		Level 2		Level 3		Total
December 31, 2014
Fixed maturity securities
	U.S. government and government agency securities		$	63,663	$	7,306	$	-	$	70,969
	Fixed maturity securities of states, municipalities
		and political subdivisions		-		954,708		-		954,708
	Special purpose revenue bonds of states, municipalities
		and political subdivisions		-		2,389,012		-		2,389,012
	Corporate securities			-		798,421		148		798,569
	Residential mortgage-backed securities			-		821,694		-		821,694
	Commercial mortgage-backed securities			-		611,631		-		611,631
	Asset-backed securities			-		366,827		-		366,827
	Foreign government securities			-		118,692		-		118,692
	Foreign corporate securities			-		478,266		-		478,266
		Total fixed maturity securities		63,663		6,546,557		148		6,610,368
Equity securities				296,352		-		-		296,352
Short-term investments*				159,297		98,889		-		258,186
Restricted cash and securities				-		2,729		-		2,729
Premium, claims and other receivables				-		56,493		-		56,493
Other assets				18		-		1,306		1,324
	Total assets measured at fair value		$	519,330	$	6,704,668	$	1,454	$	7,225,452
Notes payable*			$	-	$	875,094	$	-	$	875,094
Accounts payable and accrued liabilities - earnout liabilities				-		2,729		8,744		11,473
	Total liabilities measured at fair value		$	-	$	877,823	$	8,744	$	886,567

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Segments Pretax Earnings by Segment (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Information by business segment
Net earned premium	$ 600,563	$ 562,612
Other revenue	75,887	86,318
Total revenue	676,450	648,930
Loss and LAE	365,162	330,746
Other expense	160,460	163,212
Total expense	525,622	493,958
Earnings before income taxes	150,828	154,972
North America Property & Casualty [Member]
Information by business segment
Net earned premium	209,239	201,334
Other revenue	6,102	5,431
Total revenue	215,341	206,765
Loss and LAE	116,436	103,553
Other expense	68,348	57,538
Total expense	184,784	161,091
Earnings before income taxes	30,557	45,674
Accident & Health [Member]
Information by business segment
Net earned premium	254,950	232,143
Other revenue	2,013	1,640
Total revenue	256,963	233,783
Loss and LAE	187,011	170,805
Other expense	38,665	34,573
Total expense	225,676	205,378
Earnings before income taxes	31,287	28,405
International [Member]
Information by business segment
Net earned premium	136,377	128,844
Other revenue	1,008	976
Total revenue	137,385	129,820
Loss and LAE	61,443	56,314
Other expense	47,311	46,475
Total expense	108,754	102,789
Earnings before income taxes	28,631	27,031
Investing [Member]
Information by business segment
Net earned premium	0	0
Other revenue	66,668	77,052
Total revenue	66,668	77,052
Loss and LAE	0	0
Other expense	0	0
Total expense	0	0
Earnings before income taxes	66,668	77,052
Corporate & Other [Member]
Information by business segment
Net earned premium	(3)	291
Other revenue	96	1,219
Total revenue	93	1,510
Loss and LAE	272	74
Other expense	6,136	24,626
Total expense	6,408	24,700
Earnings before income taxes	$ (6,315)	$ (23,190)

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Earnings Per Share

3 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

Earnings Per Share

(11)Earnings Per Share

The following table details the numerator and denominator used in our earnings per share calculations.

		Three months ended March 31,
		2015		2014
Net earnings		$	112,917	$	107,911
Less: net earnings attributable to unvested restricted stock			(1,641)		(1,692)
	Net earnings available to common stock	$	111,276	$	106,219
Weighted-average common shares outstanding			94,881		98,662
Dilutive effect of outstanding securities (determined using treasury stock method)			316		251
	Weighted-average common shares and potential common shares outstanding		95,197		98,913
Earnings per common share
	Basic	$	1.17	$	1.08
	Diluted	$	1.17	$	1.07