General Information	6 Months Ended
Jun. 30, 2015
General Information [Abstract]
General Information	(1) General Information 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. Proposed Merger with Tokio Marine On June 10, 2015, we announced that HCC had entered into an Agreement and Plan of Merger (Merger Agreement) with Tokio Marine Holdings, Inc., a Japanese corporation (Tokio Marine) and TMGC Investment (Delaware) Inc. (Merger Sub), an indirect wholly-owned subsidiary of Tokio Marine, providing for HCC to be acquired by Tokio Marine through a merger effected under Delaware law (referred to herein as merger). The Merger Agreement provides that, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into HCC with HCC continuing as the surviving corporation and an indirect wholly-owned subsidiary of Tokio Marine. Tokio Marine is the ultimate holding company of the Tokio Marine Group, which operates in the non-life insurance business, life insurance business, and financial and general businesses globally. On completion of the merger, shares of our common stock (Shares) will no longer be listed on any stock exchange or quotation system. If the Merger Agreement is adopted and the merger is completed, each outstanding Share (other than Shares held by HCC, Tokio Marine or Merger Sub or any of their respective subsidiaries, or by any holder who has properly exercised appraisal rights of such Shares in accordance with Section 262 of the General Corporation Law of the State of Delaware) will be converted into the right to receive $78.00 in cash (Merger Consideration), without interest and less any applicable tax withholdings. The Merger Agreement provides that equity-based awards held by our directors, executive officers and employees as of the effective time of the merger will be treated at the effective time as follows: 1) each outstanding option to purchase Shares (Option) granted under HCC’s 2008 Flexible Incentive Plan, as amended (Incentive Plan), whether vested or unvested, will be canceled and will only entitle the holder of the Option the right to receive an amount in cash equal to the product obtained by multiplying (A) the total number of Shares subject to the Option by (B) the excess, if any, of the Merger Consideration over the exercise price per Share of that Option, less any applicable tax withholdings; 2) HCC will waive any vesting or holding conditions or restrictions applicable to each outstanding restricted Share granted under the Incentive Plan or HCC’s 2014 Stock Promotion Plan, and at the effective time each Share will be treated in the same manner as a Share of our common stock and will entitle the holder to an amount in cash equal to the Merger Consideration, less any applicable tax withholdings; 3) with respect to any restricted Shares subject to performance based vesting (Performance Shares), the performance criteria will be deemed to have been achieved based on 100% performance and such Performance Shares will be treated the same as all other Shares in the merger and will entitle the holder to an amount in cash equal to the Merger Consideration, less any applicable tax withholdings; and 4) each outstanding restricted stock unit granted under the Incentive Plan (RSU), whether vested or unvested, will be canceled and will entitle the holder of the RSU an amount in cash equal to the product of (A) the total number of Shares subject to the RSU and (B) the Merger Consideration, less any applicable tax withholdings. Each of the parties has made customary representations and warranties and agreed to covenants in the Merger Agreement. We have agreed, among other things, to use our commercially reasonable efforts to cause our business to be conducted in the ordinary and usual course during the period between the execution of the Merger Agreement and the closing of the merger, and not to take certain actions specified in the Merger Agreement during such time. We have also agreed not to discuss alternative acquisition proposals with, or solicit alternative acquisition proposals from, third parties, subject to exceptions that allow us under certain circumstances to provide information to and participate in discussions with third parties with respect to unsolicited alternative acquisition proposals, and to terminate the Merger Agreement in order to accept such a proposal that constitutes a “Superior Proposal” (as defined in the Merger Agreement), in each case if HCC’s board of directors has determined that the failure to take such action would be inconsistent with HCC’s fiduciary duties under applicable law. The Merger Agreement provides certain termination rights for both HCC and Tokio Marine, and further provides that, upon termination of the Merger Agreement under certain circumstances, we will be obligated to pay Tokio Marine a termination fee of $187.5 million. The Merger Agreement was unanimously approved by our board of directors and is conditioned, among other things, on: 1) adoption of the Merger Agreement and approval of the merger by our shareholders, 2) receipt of required governmental approvals, including antitrust and insurance regulatory approvals and 3) other customary closing conditions. In addition, Tokio Marine’s obligation to consummate the merger is subject to the condition that the required governmental approvals have been obtained without the imposition of any “Negative Regulatory Action” (as defined in the Merger Agreement). The merger is expected to close during the fourth quarter of 2015, subject to the closing conditions described above and contained in the Merger Agreement. 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 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. Goodwill An indicator of impairment of goodwill exists when the fair value of a reporting unit is less than its carrying value. In conjunction with the change in our reporting structure discussed in Note 3, “Segments,” we now have three reporting units that are the same as our insurance underwriting segments: 1) North America Property & Casualty, 2) Accident & Health and 3) International. We conducted our annual goodwill impairment test as of June 30, 2015, which is consistent with the timeframe for our annual assessment in prior years. This test consisted of a qualitative assessment in which we determined that it is more likely than not that the fair value of each of our three reporting units exceeded its carrying amount with no indicators of impairment. 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 standard is 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 focuses on improving existing disclosure requirements to provide users with additional information about insurance liabilities for short-duration contracts. The standard does not change the existing recognition and measurement guidance for short-duration contracts. This standard is effective at December 31, 2016 and must be applied retrospectively by providing comparative disclosures for each period presented, except for those requirements that apply only to the current period. Application of this standard will have no impact on our consolidated financial position, results of operations or cash flows. 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 standard is effective at March 31, 2016 and must be applied retrospectively. We have immaterial debt issuance costs included in other assets in our consolidated balance sheets that will be reclassified as a reduction to notes payable. Application of this standard will have no impact on our consolidated financial position, results of operations or cash flows.

General Information

6 Months Ended

Jun. 30, 2015

(1) General Information

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.

Proposed Merger with Tokio Marine

On June 10, 2015, we announced that HCC had entered into an Agreement and Plan of Merger (Merger Agreement) with Tokio Marine Holdings, Inc., a Japanese corporation (Tokio Marine) and TMGC Investment (Delaware) Inc. (Merger Sub), an indirect wholly-owned subsidiary of Tokio Marine, providing for HCC to be acquired by Tokio Marine through a merger effected under Delaware law (referred to herein as merger). The Merger Agreement provides that, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into HCC with HCC continuing as the surviving corporation and an indirect wholly-owned subsidiary of Tokio Marine. Tokio Marine is the ultimate holding company of the Tokio Marine Group, which operates in the non-life insurance business, life insurance business, and financial and general businesses globally.

On completion of the merger, shares of our common stock (Shares) will no longer be listed on any stock exchange or quotation system. If the Merger Agreement is adopted and the merger is completed, each outstanding Share (other than Shares held by HCC, Tokio Marine or Merger Sub or any of their respective subsidiaries, or by any holder who has properly exercised appraisal rights of such Shares in accordance with Section 262 of the General Corporation Law of the State of Delaware) will be converted into the right to receive $78.00 in cash (Merger Consideration), without interest and less any applicable tax withholdings.

The Merger Agreement provides that equity-based awards held by our directors, executive officers and employees as of the effective time of the merger will be treated at the effective time as follows: 1) each outstanding option to purchase Shares (Option) granted under HCC’s 2008 Flexible Incentive Plan, as amended (Incentive Plan), whether vested or unvested, will be canceled and will only entitle the holder of the Option the right to receive an amount in cash equal to the product obtained by multiplying (A) the total number of Shares subject to the Option by (B) the excess, if any, of the Merger Consideration over the exercise price per Share of that Option, less any applicable tax withholdings; 2) HCC will waive any vesting or holding conditions or restrictions applicable to each outstanding restricted Share granted under the Incentive Plan or HCC’s 2014 Stock Promotion Plan, and at the effective time each Share will be treated in the same manner as a Share of our common stock and will entitle the holder to an amount in cash equal to the Merger Consideration, less any applicable tax withholdings; 3) with respect to any restricted Shares subject to performance based vesting (Performance Shares), the performance criteria will be deemed to have been achieved based on 100% performance and such Performance Shares will be treated the same as all other Shares in the merger and will entitle the holder to an amount in cash equal to the Merger Consideration, less any applicable tax withholdings; and 4) each outstanding restricted stock unit granted under the Incentive Plan (RSU), whether vested or unvested, will be canceled and will entitle the holder of the RSU an amount in cash equal to the product of (A) the total number of Shares subject to the RSU and (B) the Merger Consideration, less any applicable tax withholdings.

Each of the parties has made customary representations and warranties and agreed to covenants in the Merger Agreement. We have agreed, among other things, to use our commercially reasonable efforts to cause our business to be conducted in the ordinary and usual course during the period between the execution of the Merger Agreement and the closing of the merger, and not to take certain actions specified in the Merger Agreement during such time. We have also agreed not to discuss alternative acquisition proposals with, or solicit alternative acquisition proposals from, third parties, subject to exceptions that allow us under certain circumstances to provide information to and participate in discussions with third parties with respect to unsolicited alternative acquisition proposals, and to terminate the Merger Agreement in order to accept such a proposal that constitutes a “Superior Proposal” (as defined in the Merger Agreement), in each case if HCC’s board of directors has determined that the failure to take such action would be inconsistent with HCC’s fiduciary duties under applicable law.

The Merger Agreement provides certain termination rights for both HCC and Tokio Marine, and further provides that, upon termination of the Merger Agreement under certain circumstances, we will be obligated to pay Tokio Marine a termination fee of $187.5 million.

The Merger Agreement was unanimously approved by our board of directors and is conditioned, among other things, on: 1) adoption of the Merger Agreement and approval of the merger by our shareholders, 2) receipt of required governmental approvals, including antitrust and insurance regulatory approvals and 3) other customary closing conditions. In addition, Tokio Marine’s obligation to consummate the merger is subject to the condition that the required governmental approvals have been obtained without the imposition of any “Negative Regulatory Action” (as defined in the Merger Agreement).

The merger is expected to close during the fourth quarter of 2015, subject to the closing conditions described above and contained in the Merger Agreement.

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 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.

Goodwill

An indicator of impairment of goodwill exists when the fair value of a reporting unit is less than its carrying value. In conjunction with the change in our reporting structure discussed in Note 3, “Segments,” we now have three reporting units that are the same as our insurance underwriting segments: 1) North America Property & Casualty, 2) Accident & Health and 3) International.

We conducted our annual goodwill impairment test as of June 30, 2015, which is consistent with the timeframe for our annual assessment in prior years. This test consisted of a qualitative assessment in which we determined that it is more likely than not that the fair value of each of our three reporting units exceeded its carrying amount with no indicators of impairment.

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 standard is 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 focuses on improving existing disclosure requirements to provide users with additional information about insurance liabilities for short-duration contracts. The standard does not change the existing recognition and measurement guidance for short-duration contracts. This standard is effective at December 31, 2016 and must be applied retrospectively by providing comparative disclosures for each period presented, except for those requirements that apply only to the current period. Application of this standard will have no impact on our consolidated financial position, results of operations or cash flows.

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 standard is effective at March 31, 2016 and must be applied retrospectively. We have immaterial debt issuance costs included in other assets in our consolidated balance sheets that will be reclassified as a reduction to notes payable. Application of this standard will have no impact on our consolidated financial position, results of operations or cash flows.