FOR THE QUARTERLY PERIOD ENDED:
September 30, 2015
|
Commission file number:
1-14527
|
Delaware
|
22-3263609
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
YES
|
X
|
NO
|
YES
|
X
|
NO
|
Large accelerated filer
|
Accelerated filer
|
|||
Non-accelerated filer
|
X
|
Smaller reporting company
|
||
(Do not check if smaller reporting company)
|
YES
|
NO
|
X
|
Number of Shares Outstanding
|
||
Class
|
At November 1, 2015
|
|
Common Shares, $0.01 par value
|
1,000
|
Item 1.
|
Financial Statements
|
|||
Consolidated Balance Sheets at September 30, 2015 (unaudited) and
|
||||
December 31, 2014
|
1
|
|||
Consolidated Statements of Operations and Comprehensive Income (Loss) for the
|
||||
three and nine months ended September 30, 2015 and 2014 (unaudited)
|
2
|
|||
Consolidated Statements of Changes in Stockholder's Equity for the three and nine
|
||||
months ended September 30, 2015 and 2014 (unaudited)
|
3
|
|||
Consolidated Statements of Cash Flows for the nine months ended
|
||||
September 30, 2015 and 2014 (unaudited)
|
4
|
|||
Notes to Consolidated Interim Financial Statements (unaudited)
|
5
|
|||
Item 2.
|
Management's Discussion and Analysis of Financial Condition and
|
|||
Results of Operation
|
28
|
|||
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
44
|
||
Item 4.
|
Controls and Procedures
|
44
|
||
Item 1.
|
Legal Proceedings
|
44
|
||
Item 1A.
|
Risk Factors
|
45
|
||
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
45
|
||
Item 3.
|
Defaults Upon Senior Securities
|
45
|
||
Item 4.
|
Mine Safety Disclosures
|
45
|
||
Item 5.
|
Other Information
|
45
|
||
Item 6.
|
Exhibits
|
45
|
September 30,
|
December 31,
|
|||||||
(Dollars in thousands, except par value per share)
|
2015
|
2014
|
||||||
(unaudited)
|
||||||||
ASSETS:
|
||||||||
Fixed maturities - available for sale, at market value
|
$
|
5,384,362
|
$
|
5,293,411
|
||||
(amortized cost: 2015, $5,327,880; 2014, $5,235,523)
|
||||||||
Fixed maturities - available for sale, at fair value
|
-
|
1,509
|
||||||
Equity securities - available for sale, at market value (cost: 2015, $0; 2014, $15)
|
-
|
16
|
||||||
Equity securities - available for sale, at fair value
|
1,199,347
|
1,299,037
|
||||||
Short-term investments
|
382,233
|
564,364
|
||||||
Other invested assets (cost: 2015, $427,980; 2014, $435,010)
|
427,980
|
435,010
|
||||||
Other invested assets, at fair value
|
1,684,860
|
1,655,311
|
||||||
Cash
|
276,132
|
323,975
|
||||||
Total investments and cash
|
9,354,914
|
9,572,633
|
||||||
Note receivable - affiliated
|
250,000
|
250,000
|
||||||
Accrued investment income
|
48,522
|
45,386
|
||||||
Premiums receivable
|
1,306,646
|
1,086,203
|
||||||
Reinsurance receivables - unaffiliated
|
712,958
|
659,303
|
||||||
Reinsurance receivables - affiliated
|
3,459,615
|
3,372,715
|
||||||
Funds held by reinsureds
|
181,146
|
182,159
|
||||||
Deferred acquisition costs
|
89,267
|
109,262
|
||||||
Prepaid reinsurance premiums
|
849,228
|
809,083
|
||||||
Other assets
|
298,322
|
235,576
|
||||||
TOTAL ASSETS
|
$
|
16,550,618
|
$
|
16,322,320
|
||||
LIABILITIES:
|
||||||||
Reserve for losses and loss adjustment expenses
|
$
|
7,878,119
|
$
|
7,843,856
|
||||
Unearned premium reserve
|
1,468,945
|
1,442,122
|
||||||
Funds held under reinsurance treaties
|
101,842
|
101,743
|
||||||
Losses in the course of payment
|
310,398
|
178,521
|
||||||
Commission reserves
|
52,936
|
63,110
|
||||||
Other net payable to reinsurers
|
971,929
|
1,028,549
|
||||||
4.868% Senior notes due 6/1/2044
|
400,000
|
400,000
|
||||||
6.6% Long term notes due 5/1/2067
|
238,367
|
238,364
|
||||||
Accrued interest on debt and borrowings
|
12,341
|
3,537
|
||||||
Income taxes
|
24,378
|
46,835
|
||||||
Unsettled securities payable
|
39,309
|
41,092
|
||||||
Other liabilities
|
264,795
|
361,874
|
||||||
Total liabilities
|
11,763,359
|
11,749,603
|
||||||
Commitments and Contingencies (Note 6)
|
||||||||
STOCKHOLDER'S EQUITY:
|
||||||||
Common stock, par value: $0.01; 3,000 shares authorized;
|
||||||||
1,000 shares issued and outstanding (2015 and 2014)
|
-
|
-
|
||||||
Additional paid-in capital
|
372,566
|
362,293
|
||||||
Accumulated other comprehensive income (loss), net of deferred income tax expense
|
||||||||
(benefit) of ($19,525) at 2015 and $2,434 at 2014
|
(36,263
|
)
|
4,519
|
|||||
Retained earnings
|
4,450,956
|
4,205,905
|
||||||
Total stockholder's equity
|
4,787,259
|
4,572,717
|
||||||
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY
|
$
|
16,550,618
|
$
|
16,322,320
|
||||
The accompanying notes are an integral part of the consolidated financial statements.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
REVENUES:
|
||||||||||||||||
Premiums earned
|
$
|
546,050
|
$
|
569,597
|
$
|
1,588,536
|
$
|
1,560,778
|
||||||||
Net investment income
|
63,363
|
83,446
|
206,869
|
215,869
|
||||||||||||
Net realized capital gains (losses):
|
||||||||||||||||
Other-than-temporary impairments on fixed maturity securities
|
(10,502
|
)
|
-
|
(43,433
|
)
|
(199
|
)
|
|||||||||
Other-than-temporary impairments on fixed maturity securities
|
||||||||||||||||
transferred to other comprehensive income (loss)
|
-
|
-
|
-
|
-
|
||||||||||||
Realized gain on sale of subsidiary
|
94,704
|
-
|
94,704
|
-
|
||||||||||||
Other net realized capital gains (losses)
|
(111,193
|
)
|
(160
|
)
|
(100,445
|
)
|
121,103
|
|||||||||
Total net realized capital gains (losses)
|
(121,695
|
)
|
(160
|
)
|
(49,174
|
)
|
120,904
|
|||||||||
Other income (expense)
|
10,828
|
(3,739
|
)
|
38,950
|
(15,576
|
)
|
||||||||||
Total revenues
|
498,546
|
649,144
|
1,785,181
|
1,881,975
|
||||||||||||
CLAIMS AND EXPENSES:
|
||||||||||||||||
Incurred losses and loss adjustment expenses
|
370,754
|
380,580
|
1,002,513
|
980,143
|
||||||||||||
Commission, brokerage, taxes and fees
|
72,151
|
79,168
|
241,635
|
240,584
|
||||||||||||
Other underwriting expenses
|
56,953
|
50,623
|
157,069
|
137,032
|
||||||||||||
Corporate expenses
|
1,637
|
4,620
|
5,031
|
5,398
|
||||||||||||
Interest, fee and bond issue cost amortization expense
|
8,859
|
12,292
|
26,576
|
28,539
|
||||||||||||
Total claims and expenses
|
510,354
|
527,283
|
1,432,824
|
1,391,696
|
||||||||||||
INCOME (LOSS) BEFORE TAXES
|
(11,808
|
)
|
121,861
|
352,357
|
490,279
|
|||||||||||
Income tax expense (benefit)
|
(7,149
|
)
|
21,720
|
107,306
|
145,498
|
|||||||||||
NET INCOME (LOSS)
|
$
|
(4,659
|
)
|
$
|
100,141
|
$
|
245,051
|
$
|
344,781
|
|||||||
Other comprehensive income (loss), net of tax:
|
||||||||||||||||
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period
|
(29,878
|
)
|
(26,221
|
)
|
(49,866
|
)
|
13,678
|
|||||||||
Less: reclassification adjustment for realized losses (gains) included in net income (loss)
|
11,625
|
(696
|
)
|
48,951
|
1,459
|
|||||||||||
Total URA(D) on securities arising during the period
|
(18,253
|
)
|
(26,917
|
)
|
(915
|
)
|
15,137
|
|||||||||
Foreign currency translation adjustments
|
(27,473
|
)
|
(7,472
|
)
|
(44,636
|
)
|
(8,587
|
)
|
||||||||
Benefit plan actuarial net gain (loss) for the period
|
-
|
-
|
-
|
-
|
||||||||||||
Reclassification adjustment for amortization of net (gain) loss included in net income (loss)
|
1,556
|
825
|
4,769
|
2,366
|
||||||||||||
Total benefit plan net gain (loss) for the period
|
1,556
|
825
|
4,769
|
2,366
|
||||||||||||
Total other comprehensive income (loss), net of tax
|
(44,170
|
)
|
(33,564
|
)
|
(40,782
|
)
|
8,916
|
|||||||||
COMPREHENSIVE INCOME (LOSS)
|
$
|
(48,829
|
)
|
$
|
66,577
|
$
|
204,269
|
$
|
353,697
|
|||||||
The accompanying notes are an integral part of the consolidated financial statements.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in thousands, except share amounts)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
COMMON STOCK (shares outstanding):
|
||||||||||||||||
Balance, beginning of period
|
1,000
|
1,000
|
1,000
|
1,000
|
||||||||||||
Balance, end of period
|
1,000
|
1,000
|
1,000
|
1,000
|
||||||||||||
ADDITIONAL PAID-IN CAPITAL:
|
||||||||||||||||
Balance, beginning of period
|
$
|
369,284
|
$
|
357,537
|
$
|
362,293
|
$
|
351,051
|
||||||||
Share-based compensation plans
|
3,282
|
2,453
|
10,273
|
8,939
|
||||||||||||
Balance, end of period
|
372,566
|
359,990
|
372,566
|
359,990
|
||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS),
|
||||||||||||||||
NET OF DEFERRED INCOME TAXES:
|
||||||||||||||||
Balance, beginning of period
|
7,907
|
130,128
|
4,519
|
87,648
|
||||||||||||
Net increase (decrease) during the period
|
(44,170
|
)
|
(33,564
|
)
|
(40,782
|
)
|
8,916
|
|||||||||
Balance, end of period
|
(36,263
|
)
|
96,564
|
(36,263
|
)
|
96,564
|
||||||||||
RETAINED EARNINGS:
|
||||||||||||||||
Balance, beginning of period
|
4,455,615
|
3,996,419
|
4,205,905
|
3,751,779
|
||||||||||||
Net income (loss)
|
(4,659
|
)
|
100,141
|
245,051
|
344,781
|
|||||||||||
Balance, end of period
|
4,450,956
|
4,096,560
|
4,450,956
|
4,096,560
|
||||||||||||
TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD
|
$
|
4,787,259
|
$
|
4,553,114
|
$
|
4,787,259
|
$
|
4,553,114
|
||||||||
The accompanying notes are an integral part of the consolidated financial statements.
|
Nine Months Ended
|
||||||||
September 30,
|
||||||||
(Dollars in thousands)
|
2015
|
2014
|
||||||
(unaudited)
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$
|
245,051
|
$
|
344,781
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Decrease (increase) in premiums receivable
|
(225,922
|
)
|
(237,390
|
)
|
||||
Decrease (increase) in funds held by reinsureds, net
|
589
|
762
|
||||||
Decrease (increase) in reinsurance receivables
|
(169,328
|
)
|
(778,374
|
)
|
||||
Decrease (increase) in income taxes
|
(212
|
)
|
12,264
|
|||||
Decrease (increase) in prepaid reinsurance premiums
|
(44,177
|
)
|
(198,306
|
)
|
||||
Increase (decrease) in reserve for losses and loss adjustment expenses
|
107,006
|
150,411
|
||||||
Increase (decrease) in unearned premiums
|
34,627
|
241,650
|
||||||
Increase (decrease) in other net payable to reinsurers
|
(50,813
|
)
|
353,468
|
|||||
Increase (decrease) in losses in course of payment
|
133,244
|
164,072
|
||||||
Change in equity adjustments in limited partnerships
|
(16,409
|
)
|
(17,643
|
)
|
||||
Distribution of limited partnership income
|
36,883
|
32,548
|
||||||
Change in other assets and liabilities, net
|
(2,719
|
)
|
(2,744
|
)
|
||||
Non-cash compensation expense
|
6,303
|
5,700
|
||||||
Amortization of bond premium (accrual of bond discount)
|
13,978
|
14,502
|
||||||
Amortization of underwriting discount on senior notes
|
3
|
43
|
||||||
Net realized capital (gains) losses
|
49,174
|
(120,904
|
)
|
|||||
Net cash provided by (used in) operating activities
|
117,278
|
(35,160
|
)
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from fixed maturities matured/called - available for sale, at market value
|
696,268
|
829,363
|
||||||
Proceeds from fixed maturities matured/called - available for sale, at fair value
|
-
|
875
|
||||||
Proceeds from fixed maturities sold - available for sale, at market value
|
418,284
|
547,682
|
||||||
Proceeds from fixed maturities sold - available for sale, at fair value
|
1,824
|
23,855
|
||||||
Proceeds from equity securities sold - available for sale, at market value
|
16
|
-
|
||||||
Proceeds from equity securities sold - available for sale, at fair value
|
442,276
|
404,627
|
||||||
Proceeds from sale of subsidiary (net of cash disposed)
|
3,934
|
-
|
||||||
Distributions from other invested assets
|
36,130
|
41,854
|
||||||
Cost of fixed maturities acquired - available for sale, at market value
|
(1,403,187
|
)
|
(2,008,937
|
)
|
||||
Cost of fixed maturities acquired - available for sale, at fair value
|
(234
|
)
|
(23,684
|
)
|
||||
Cost of equity securities acquired - available for sale, at fair value
|
(442,306
|
)
|
(237,749
|
)
|
||||
Cost of other invested assets acquired
|
(49,575
|
)
|
(76,717
|
)
|
||||
Net change in short-term investments
|
176,876
|
97,262
|
||||||
Net change in unsettled securities transactions
|
(12,069
|
)
|
(9,474
|
)
|
||||
Net cash provided by (used in) investing activities
|
(131,763
|
)
|
(411,043
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Tax benefit from share-based compensation
|
3,970
|
3,239
|
||||||
Net proceeds from issuance of senior notes
|
-
|
400,000
|
||||||
Net cash provided by (used in) financing activities
|
3,970
|
403,239
|
||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(37,328
|
)
|
1,575
|
|||||
Net increase (decrease) in cash
|
(47,843
|
)
|
(41,389
|
)
|
||||
Cash, beginning of period
|
323,975
|
316,807
|
||||||
Cash, end of period
|
$
|
276,132
|
$
|
275,418
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||
Income taxes paid (recovered)
|
$
|
104,727
|
$
|
129,608
|
||||
Interest paid
|
17,608
|
14,719
|
||||||
The accompanying notes are an integral part of the consolidated financial statements.
|
At September 30, 2015
|
||||||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Market
|
OTTI in AOCI
|
||||||||||||||||
(Dollars in thousands)
|
Cost
|
Appreciation
|
Depreciation
|
Value
|
(a)
|
|||||||||||||||
Fixed maturity securities
|
||||||||||||||||||||
U.S. Treasury securities and obligations of
|
||||||||||||||||||||
U.S. government agencies and corporations
|
$
|
222,879
|
$
|
4,634
|
$
|
(69
|
)
|
$
|
227,444
|
$
|
-
|
|||||||||
Obligations of U.S. states and political subdivisions
|
683,715
|
32,088
|
(1,524
|
)
|
714,279
|
-
|
||||||||||||||
Corporate securities
|
2,012,649
|
35,136
|
(48,623
|
)
|
1,999,162
|
6
|
||||||||||||||
Asset-backed securities
|
132,004
|
689
|
(232
|
)
|
132,461
|
-
|
||||||||||||||
Mortgage-backed securities
|
||||||||||||||||||||
Commercial
|
62,616
|
1,960
|
(55
|
)
|
64,521
|
-
|
||||||||||||||
Agency residential
|
720,508
|
7,833
|
(2,306
|
)
|
726,035
|
-
|
||||||||||||||
Non-agency residential
|
141
|
27
|
-
|
168
|
-
|
|||||||||||||||
Foreign government securities
|
448,501
|
25,864
|
(9,658
|
)
|
464,707
|
-
|
||||||||||||||
Foreign corporate securities
|
1,044,867
|
33,424
|
(22,706
|
)
|
1,055,585
|
16
|
||||||||||||||
Total fixed maturity securities
|
$
|
5,327,880
|
$
|
141,655
|
$
|
(85,173
|
)
|
$
|
5,384,362
|
$
|
22
|
|||||||||
Equity securities
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
At December 31, 2014
|
||||||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Market
|
OTTI in AOCI
|
||||||||||||||||
(Dollars in thousands)
|
Cost
|
Appreciation
|
Depreciation
|
Value
|
(a)
|
|||||||||||||||
Fixed maturity securities
|
||||||||||||||||||||
U.S. Treasury securities and obligations of
|
||||||||||||||||||||
U.S. government agencies and corporations
|
$
|
135,724
|
$
|
1,416
|
$
|
(304
|
)
|
$
|
136,836
|
$
|
-
|
|||||||||
Obligations of U.S. states and political subdivisions
|
783,129
|
41,969
|
(626
|
)
|
824,472
|
-
|
||||||||||||||
Corporate securities
|
1,992,200
|
39,954
|
(53,219
|
)
|
1,978,935
|
(9,735
|
)
|
|||||||||||||
Asset-backed securities
|
94,470
|
727
|
(374
|
)
|
94,823
|
-
|
||||||||||||||
Mortgage-backed securities
|
||||||||||||||||||||
Commercial
|
57,027
|
2,292
|
(51
|
)
|
59,268
|
-
|
||||||||||||||
Agency residential
|
596,140
|
6,697
|
(4,720
|
)
|
598,117
|
-
|
||||||||||||||
Non-agency residential
|
271
|
44
|
-
|
315
|
-
|
|||||||||||||||
Foreign government securities
|
515,016
|
27,415
|
(5,344
|
)
|
537,087
|
-
|
||||||||||||||
Foreign corporate securities
|
1,061,546
|
27,832
|
(25,820
|
)
|
1,063,558
|
-
|
||||||||||||||
Total fixed maturity securities
|
$
|
5,235,523
|
$
|
148,346
|
$
|
(90,458
|
)
|
$
|
5,293,411
|
$
|
(9,735
|
)
|
||||||||
Equity securities
|
$
|
15
|
$
|
1
|
$
|
-
|
$
|
16
|
$
|
-
|
At September 30, 2015
|
At December 31, 2014
|
|||||||||||||||
Amortized
|
Market
|
Amortized
|
Market
|
|||||||||||||
(Dollars in thousands)
|
Cost
|
Value
|
Cost
|
Value
|
||||||||||||
Fixed maturity securities – available for sale
|
||||||||||||||||
Due in one year or less
|
$
|
345,345
|
$
|
345,322
|
$
|
385,721
|
$
|
384,022
|
||||||||
Due after one year through five years
|
2,495,023
|
2,506,790
|
2,387,533
|
2,369,917
|
||||||||||||
Due after five years through ten years
|
970,585
|
971,624
|
1,025,221
|
1,029,077
|
||||||||||||
Due after ten years
|
601,658
|
637,441
|
689,140
|
757,872
|
||||||||||||
Asset-backed securities
|
132,004
|
132,461
|
94,470
|
94,823
|
||||||||||||
Mortgage-backed securities
|
||||||||||||||||
Commercial
|
62,616
|
64,521
|
57,027
|
59,268
|
||||||||||||
Agency residential
|
720,508
|
726,035
|
596,140
|
598,117
|
||||||||||||
Non-agency residential
|
141
|
168
|
271
|
315
|
||||||||||||
Total fixed maturity securities
|
$
|
5,327,880
|
$
|
5,384,362
|
$
|
5,235,523
|
$
|
5,293,411
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Increase (decrease) during the period between the market value and cost
|
||||||||||||||||
of investments carried at market value, and deferred taxes thereon:
|
||||||||||||||||
Fixed maturity securities
|
$
|
(28,103
|
)
|
$
|
(41,410
|
)
|
$
|
(11,164
|
)
|
$
|
23,285
|
|||||
Fixed maturity securities, other-than-temporary impairment
|
22
|
-
|
9,757
|
-
|
||||||||||||
Equity securities
|
-
|
1
|
(1
|
)
|
3
|
|||||||||||
Change in unrealized appreciation (depreciation), pre-tax
|
(28,081
|
)
|
(41,409
|
)
|
(1,408
|
)
|
23,288
|
|||||||||
Deferred tax benefit (expense)
|
9,835
|
14,492
|
3,907
|
(8,151
|
)
|
|||||||||||
Deferred tax benefit (expense), other-than-temporary impairment
|
(7
|
)
|
-
|
(3,414
|
)
|
-
|
||||||||||
Change in unrealized appreciation (depreciation),
|
||||||||||||||||
net of deferred taxes, included in stockholder's equity
|
$
|
(18,253
|
)
|
$
|
(26,917
|
)
|
$
|
(915
|
)
|
$
|
15,137
|
Duration of Unrealized Loss at September 30, 2015 By Security Type
|
||||||||||||||||||||||||
Less than 12 months
|
Greater than 12 months
|
Total
|
||||||||||||||||||||||
Gross
|
Gross
|
Gross
|
||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||
(Dollars in thousands)
|
Market Value
|
Depreciation
|
Market Value
|
Depreciation
|
Market Value
|
Depreciation
|
||||||||||||||||||
Fixed maturity securities - available for sale
|
||||||||||||||||||||||||
U.S. Treasury securities and obligations of
|
||||||||||||||||||||||||
U.S. government agencies and corporations
|
$
|
201
|
$
|
(1
|
)
|
$
|
1,844
|
$
|
(68
|
)
|
$
|
2,045
|
$
|
(69
|
)
|
|||||||||
Obligations of U.S. states and political subdivisions
|
20,162
|
(316
|
)
|
35,460
|
(1,208
|
)
|
55,622
|
(1,524
|
)
|
|||||||||||||||
Corporate securities
|
647,568
|
(34,098
|
)
|
291,894
|
(14,525
|
)
|
939,462
|
(48,623
|
)
|
|||||||||||||||
Asset-backed securities
|
49,224
|
(203
|
)
|
8,601
|
(29
|
)
|
57,825
|
(232
|
)
|
|||||||||||||||
Mortgage-backed securities
|
||||||||||||||||||||||||
Commercial
|
6,003
|
|
(55
|
)
|
-
|
-
|
6,003
|
(55
|
)
|
|||||||||||||||
Agency residential
|
97,964
|
(762
|
)
|
157,863
|
(1,544
|
)
|
255,827
|
(2,306
|
)
|
|||||||||||||||
Non-agency residential
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Foreign government securities
|
115,876
|
(3,827
|
)
|
66,812
|
(5,831
|
)
|
182,688
|
(9,658
|
)
|
|||||||||||||||
Foreign corporate securities
|
286,978
|
(18,810
|
)
|
72,392
|
(3,896
|
)
|
359,370
|
(22,706
|
)
|
|||||||||||||||
Total fixed maturity securities
|
$
|
1,223,976
|
$
|
(58,072
|
)
|
$
|
634,866
|
$
|
(27,101
|
)
|
$
|
1,858,842
|
$
|
(85,173
|
)
|
|||||||||
Equity securities
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Total
|
$
|
1,223,976
|
$
|
(58,072
|
)
|
$
|
634,866
|
$
|
(27,101
|
)
|
$
|
1,858,842
|
$
|
(85,173
|
)
|
Duration of Unrealized Loss at September 30, 2015 By Maturity
|
||||||||||||||||||||||||
Less than 12 months
|
Greater than 12 months
|
Total
|
||||||||||||||||||||||
Gross
|
Gross
|
Gross
|
||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||
(Dollars in thousands)
|
Market Value
|
Depreciation
|
Market Value
|
Depreciation
|
Market Value
|
Depreciation
|
||||||||||||||||||
Fixed maturity securities
|
||||||||||||||||||||||||
Due in one year or less
|
$
|
36,780
|
$
|
(1,633
|
)
|
$
|
17,019
|
$
|
(1,710
|
)
|
$
|
53,799
|
$
|
(3,343
|
)
|
|||||||||
Due in one year through five years
|
594,454
|
(29,341
|
)
|
304,349
|
(15,213
|
)
|
898,803
|
(44,554
|
)
|
|||||||||||||||
Due in five years through ten years
|
382,520
|
(23,273
|
)
|
109,012
|
(7,616
|
)
|
491,532
|
(30,889
|
)
|
|||||||||||||||
Due after ten years
|
57,031
|
(2,805
|
)
|
38,022
|
(989
|
)
|
95,053
|
(3,794
|
)
|
|||||||||||||||
Asset-backed securities
|
49,224
|
(203
|
)
|
8,601
|
(29
|
)
|
57,825
|
(232
|
)
|
|||||||||||||||
Mortgage-backed securities
|
103,967
|
(817
|
)
|
157,863
|
(1,544
|
)
|
261,830
|
(2,361
|
)
|
|||||||||||||||
Total fixed maturity securities
|
$
|
1,223,976
|
$
|
(58,072
|
)
|
$
|
634,866
|
$
|
(27,101
|
)
|
$
|
1,858,842
|
$
|
(85,173
|
)
|
Duration of Unrealized Loss at December 31, 2014 By Security Type
|
||||||||||||||||||||||||
Less than 12 months
|
Greater than 12 months
|
Total
|
||||||||||||||||||||||
Gross
|
Gross
|
Gross
|
||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||
(Dollars in thousands)
|
Market Value
|
Depreciation
|
Market Value
|
Depreciation
|
Market Value
|
Depreciation
|
||||||||||||||||||
Fixed maturity securities - available for sale
|
||||||||||||||||||||||||
U.S. Treasury securities and obligations of
|
||||||||||||||||||||||||
U.S. government agencies and corporations
|
$
|
13,187
|
$
|
(20
|
)
|
$
|
26,897
|
$
|
(284
|
)
|
$
|
40,084
|
$
|
(304
|
)
|
|||||||||
Obligations of U.S. states and political subdivisions
|
20,428
|
(242
|
)
|
18,199
|
(384
|
)
|
38,627
|
(626
|
)
|
|||||||||||||||
Corporate securities
|
830,928
|
(48,891
|
)
|
171,207
|
(4,328
|
)
|
1,002,135
|
(53,219
|
)
|
|||||||||||||||
Asset-backed securities
|
62,451
|
(374
|
)
|
-
|
-
|
62,451
|
(374
|
)
|
||||||||||||||||
Mortgage-backed securities
|
||||||||||||||||||||||||
Commercial
|
11,742
|
(51
|
)
|
-
|
-
|
11,742
|
(51
|
)
|
||||||||||||||||
Agency residential
|
24,230
|
(59
|
)
|
267,824
|
(4,661
|
)
|
292,054
|
(4,720
|
)
|
|||||||||||||||
Non-agency residential
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Foreign government securities
|
45,521
|
(913
|
)
|
53,086
|
(4,431
|
)
|
98,607
|
(5,344
|
)
|
|||||||||||||||
Foreign corporate securities
|
228,733
|
(21,704
|
)
|
117,713
|
(4,116
|
)
|
346,446
|
(25,820
|
)
|
|||||||||||||||
Total fixed maturity securities
|
$
|
1,237,220
|
$
|
(72,254
|
)
|
$
|
654,926
|
$
|
(18,204
|
)
|
$
|
1,892,146
|
$
|
(90,458
|
)
|
|||||||||
Equity securities
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Total
|
$
|
1,237,220
|
$
|
(72,254
|
)
|
$
|
654,926
|
$
|
(18,204
|
)
|
$
|
1,892,146
|
$
|
(90,458
|
)
|
Duration of Unrealized Loss at December 31, 2014 By Maturity
|
||||||||||||||||||||||||
Less than 12 months
|
Greater than 12 months
|
Total
|
||||||||||||||||||||||
Gross
|
Gross
|
Gross
|
||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||
(Dollars in thousands)
|
Market Value
|
Depreciation
|
Market Value
|
Depreciation
|
Market Value
|
Depreciation
|
||||||||||||||||||
Fixed maturity securities
|
||||||||||||||||||||||||
Due in one year or less
|
$
|
12,858
|
$
|
(550
|
)
|
$
|
53,528
|
$
|
(4,224
|
)
|
$
|
66,386
|
$
|
(4,774
|
)
|
|||||||||
Due in one year through five years
|
622,137
|
(51,262
|
)
|
243,192
|
(6,306
|
)
|
865,329
|
(57,568
|
)
|
|||||||||||||||
Due in five years through ten years
|
467,187
|
(18,958
|
)
|
66,630
|
(2,018
|
)
|
533,817
|
(20,976
|
)
|
|||||||||||||||
Due after ten years
|
36,615
|
(1,000
|
)
|
23,752
|
(995
|
)
|
60,367
|
(1,995
|
)
|
|||||||||||||||
Asset-backed securities
|
62,451
|
(374
|
)
|
-
|
-
|
62,451
|
(374
|
)
|
||||||||||||||||
Mortgage-backed securities
|
35,972
|
(110
|
)
|
267,824
|
(4,661
|
)
|
303,796
|
(4,771
|
)
|
|||||||||||||||
Total fixed maturity securities
|
$
|
1,237,220
|
$
|
(72,254
|
)
|
$
|
654,926
|
$
|
(18,204
|
)
|
$
|
1,892,146
|
$
|
(90,458
|
)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Fixed maturities
|
$
|
46,414
|
$
|
52,515
|
$
|
140,829
|
$
|
157,515
|
||||||||
Equity securities
|
8,004
|
7,966
|
26,638
|
26,083
|
||||||||||||
Short-term investments and cash
|
220
|
196
|
705
|
841
|
||||||||||||
Other invested assets
|
||||||||||||||||
Limited partnerships
|
3,021
|
19,254
|
17,676
|
18,862
|
||||||||||||
Dividends from Parent's shares
|
9,234
|
7,290
|
27,702
|
21,870
|
||||||||||||
Other
|
(242
|
)
|
869
|
1,366
|
3,220
|
|||||||||||
Gross investment income before adjustments
|
66,651
|
88,090
|
214,916
|
228,391
|
||||||||||||
Funds held interest income (expense)
|
940
|
970
|
4,326
|
4,262
|
||||||||||||
Interest income from Parent
|
1,075
|
-
|
3,225
|
-
|
||||||||||||
Gross investment income
|
68,666
|
89,060
|
222,467
|
232,653
|
||||||||||||
Investment expenses
|
(5,303
|
)
|
(5,614
|
)
|
(15,598
|
)
|
(16,784
|
)
|
||||||||
Net investment income
|
$
|
63,363
|
$
|
83,446
|
$
|
206,869
|
$
|
215,869
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Fixed maturity securities, market value:
|
||||||||||||||||
Other-than-temporary impairments
|
$
|
(10,502
|
)
|
$
|
-
|
$
|
(43,433
|
)
|
$
|
(199
|
)
|
|||||
Gains (losses) from sales
|
(6,636
|
)
|
1,070
|
(30,362
|
)
|
(1,855
|
)
|
|||||||||
Fixed maturity securities, fair value:
|
||||||||||||||||
Gains (losses) from sales
|
(17
|
)
|
82
|
25
|
1,022
|
|||||||||||
Gains (losses) from fair value adjustments
|
-
|
(938
|
)
|
56
|
(938
|
)
|
||||||||||
Equity securities, market value:
|
||||||||||||||||
Gains (losses) from sales
|
-
|
-
|
1
|
-
|
||||||||||||
Equity securities, fair value:
|
||||||||||||||||
Gains (losses) from sales
|
(13,656
|
)
|
(2,589
|
)
|
(14,010
|
)
|
(2,204
|
)
|
||||||||
Gains (losses) from fair value adjustments
|
(101,322
|
)
|
(12,559
|
)
|
(85,710
|
)
|
65,399
|
|||||||||
Other invested assets, fair value:
|
||||||||||||||||
Gains (losses) from fair value adjustments
|
(84,272
|
)
|
14,775
|
29,549
|
59,681
|
|||||||||||
Gain on sale of subsidiary
|
94,704
|
-
|
94,704
|
-
|
||||||||||||
Short-term investment gains (losses)
|
6
|
(1
|
)
|
6
|
(2
|
)
|
||||||||||
Total net realized capital gains (losses)
|
$
|
(121,695
|
)
|
$
|
(160
|
)
|
$
|
(49,174
|
)
|
$
|
120,904
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Proceeds from sales of fixed maturity securities
|
$
|
130,284
|
$
|
222,915
|
$
|
420,108
|
$
|
571,537
|
||||||||
Gross gains from sales
|
1,401
|
4,408
|
9,039
|
10,698
|
||||||||||||
Gross losses from sales
|
(8,054
|
)
|
(3,256
|
)
|
(39,376
|
)
|
(11,531
|
)
|
||||||||
Proceeds from sales of equity securities
|
$
|
138,799
|
$
|
111,684
|
$
|
442,292
|
$
|
404,627
|
||||||||
Gross gains from sales
|
5,241
|
1,697
|
17,655
|
12,019
|
||||||||||||
Gross losses from sales
|
(18,896
|
)
|
(4,286
|
)
|
(31,664
|
)
|
(14,223
|
)
|
Level 1: | Inputs to the valuation methodology are observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in an active market; |
Level 2: | Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; |
Level 3: | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
·
|
U.S. Treasury securities and obligations of U.S. government agencies and corporations are primarily comprised of U.S. Treasury bonds and the fair value is based on observable market inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields;
|
·
|
Obligations of U.S. states and political subdivisions are comprised of state and municipal bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;
|
·
|
Corporate securities are primarily comprised of U.S. corporate and public utility bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;
|
·
|
Asset-backed and mortgage-backed securities fair values are based on observable inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields and cash flow models using observable inputs such as prepayment speeds, collateral performance and default spreads;
|
·
|
Foreign government securities are comprised of global non-U.S. sovereign bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities and models with observable inputs such as benchmark yields and credit spreads and then, where applicable, converted to U.S. dollars using an exchange rate from a nationally recognized source;
|
·
|
Foreign corporate securities are comprised of global non-U.S. corporate bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities and models with observable inputs such as benchmark yields and credit spreads and then, where applicable, converted to U.S. dollars using an exchange rate from a nationally recognized source.
|
Fair Value Measurement Using:
|
||||||||||||||||
Quoted Prices
|
||||||||||||||||
in Active
|
Significant
|
|||||||||||||||
Markets for
|
Other
|
Significant
|
||||||||||||||
Identical
|
Observable
|
Unobservable
|
||||||||||||||
Assets
|
Inputs
|
Inputs
|
||||||||||||||
(Dollars in thousands)
|
September 30, 2015
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Assets:
|
||||||||||||||||
Fixed maturities, market value
|
||||||||||||||||
U.S. Treasury securities and obligations of
|
||||||||||||||||
U.S. government agencies and corporations
|
$
|
227,444
|
$
|
-
|
$
|
227,444
|
$
|
-
|
||||||||
Obligations of U.S. States and political subdivisions
|
714,279
|
-
|
714,279
|
-
|
||||||||||||
Corporate securities
|
1,999,162
|
-
|
1,993,887
|
5,275
|
||||||||||||
Asset-backed securities
|
132,461
|
-
|
132,461
|
-
|
||||||||||||
Mortgage-backed securities
|
||||||||||||||||
Commercial
|
64,521
|
-
|
64,521
|
-
|
||||||||||||
Agency residential
|
726,035
|
-
|
726,035
|
-
|
||||||||||||
Non-agency residential
|
168
|
-
|
168
|
-
|
||||||||||||
Foreign government securities
|
464,707
|
-
|
464,707
|
-
|
||||||||||||
Foreign corporate securities
|
1,055,585
|
-
|
1,049,460
|
6,125
|
||||||||||||
Total fixed maturities, market value
|
5,384,362
|
-
|
5,372,962
|
11,400
|
||||||||||||
Fixed maturities, fair value
|
-
|
-
|
-
|
-
|
||||||||||||
Equity securities, market value
|
-
|
-
|
-
|
-
|
||||||||||||
Equity securities, fair value
|
1,199,347
|
1,109,801
|
89,546
|
-
|
||||||||||||
Other invested assets, fair value
|
1,684,860
|
1,684,860
|
-
|
-
|
Fair Value Measurement Using:
|
||||||||||||||||
Quoted Prices
|
||||||||||||||||
in Active
|
Significant
|
|||||||||||||||
Markets for
|
Other
|
Significant
|
||||||||||||||
Identical
|
Observable
|
Unobservable
|
||||||||||||||
Assets
|
Inputs
|
Inputs
|
||||||||||||||
(Dollars in thousands)
|
December 31, 2014
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Assets:
|
||||||||||||||||
Fixed maturities, market value
|
||||||||||||||||
U.S. Treasury securities and obligations of
|
||||||||||||||||
U.S. government agencies and corporations
|
$
|
136,836
|
$
|
-
|
$
|
136,836
|
$
|
-
|
||||||||
Obligations of U.S. States and political subdivisions
|
824,472
|
-
|
824,472
|
-
|
||||||||||||
Corporate securities
|
1,978,935
|
-
|
1,978,935
|
-
|
||||||||||||
Asset-backed securities
|
94,823
|
-
|
94,823
|
-
|
||||||||||||
Mortgage-backed securities
|
||||||||||||||||
Commercial
|
59,268
|
-
|
50,671
|
8,597
|
||||||||||||
Agency residential
|
598,117
|
-
|
598,117
|
-
|
||||||||||||
Non-agency residential
|
315
|
-
|
315
|
-
|
||||||||||||
Foreign government securities
|
537,087
|
-
|
537,087
|
-
|
||||||||||||
Foreign corporate securities
|
1,063,558
|
-
|
1,056,392
|
7,166
|
||||||||||||
Total fixed maturities, market value
|
5,293,411
|
-
|
5,277,648
|
15,763
|
||||||||||||
Fixed maturities, fair value
|
1,509
|
-
|
1,509
|
-
|
||||||||||||
Equity securities, market value
|
16
|
16
|
-
|
-
|
||||||||||||
Equity securities, fair value
|
1,299,037
|
1,188,613
|
110,424
|
-
|
||||||||||||
Other invested assets, fair value
|
1,655,311
|
1,655,311
|
-
|
-
|
Three Months Ended September 30, 2015
|
Nine Months Ended September 30, 2015
|
|||||||||||||||||||||||||||
Corporate
|
Foreign
|
Corporate
|
Foreign
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
Securities
|
Corporate
|
Total
|
Securities
|
CMBS
|
Corporate
|
Total
|
|||||||||||||||||||||
Beginning balance
|
$
|
1,958
|
$
|
7,837
|
$
|
9,795
|
$
|
-
|
$
|
8,597
|
$
|
7,166
|
$
|
15,763
|
||||||||||||||
Total gains or (losses) (realized/unrealized)
|
||||||||||||||||||||||||||||
Included in earnings
|
(6
|
)
|
62
|
56
|
(2
|
)
|
-
|
177
|
175
|
|||||||||||||||||||
Included in other comprehensive income (loss)
|
(93
|
)
|
(1,287
|
)
|
(1,380
|
)
|
(95
|
)
|
-
|
(1,216
|
)
|
(1,311
|
)
|
|||||||||||||||
Purchases, issuances and settlements
|
1,723
|
-
|
1,723
|
3,651
|
-
|
-
|
3,651
|
|||||||||||||||||||||
Transfers in and/or (out) of Level 3
|
1,693
|
(487
|
)
|
1,206
|
1,721
|
(8,597
|
)
|
(2
|
)
|
(6,878
|
)
|
|||||||||||||||||
Ending balance
|
$
|
5,275
|
$
|
6,125
|
$
|
11,400
|
$
|
5,275
|
$
|
-
|
$
|
6,125
|
$
|
11,400
|
||||||||||||||
The amount of total gains or losses for the period
|
||||||||||||||||||||||||||||
included in earnings (or changes in net assets)
|
||||||||||||||||||||||||||||
attributable to the change in unrealized gains
|
||||||||||||||||||||||||||||
or losses relating to assets still held at the
|
||||||||||||||||||||||||||||
reporting date
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||
(Some amounts may not reconcile due to rounding.)
|
Three Months Ended September 30, 2014
|
Nine Months Ended September 30, 2014
|
|||||||||||||||||||||||||||||||||||||||
Corporate
|
Asset-backed
|
Foreign
|
Non-agency
|
Corporate
|
Asset-backed
|
Foreign
|
Non-agency
|
|||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
Securities
|
Securities
|
Corporate
|
RMBS
|
Total
|
Securities
|
Securities
|
Corporate
|
RMBS
|
Total
|
||||||||||||||||||||||||||||||
Beginning balance
|
$
|
-
|
$
|
2,528
|
$
|
-
|
$
|
4
|
$
|
2,532
|
$
|
-
|
$
|
3,533
|
$
|
481
|
$
|
4
|
$
|
4,018
|
||||||||||||||||||||
Total gains or (losses) (realized/unrealized)
|
||||||||||||||||||||||||||||||||||||||||
Included in earnings
|
-
|
1,235
|
-
|
2
|
1,237
|
-
|
1,291
|
18
|
3
|
1,312
|
||||||||||||||||||||||||||||||
Included in other comprehensive income (loss)
|
42
|
(284
|
)
|
(50
|
)
|
(3
|
)
|
(295
|
)
|
42
|
(191
|
)
|
(70
|
)
|
(3
|
)
|
(222
|
)
|
||||||||||||||||||||||
Purchases, issuances and settlements
|
1,274
|
17,898
|
3,614
|
(3
|
)
|
22,783
|
1,274
|
16,744
|
3,135
|
(4
|
)
|
21,149
|
||||||||||||||||||||||||||||
Transfers in and/or (out) of Level 3
|
-
|
(1,101
|
)
|
-
|
-
|
(1,101
|
)
|
-
|
(1,101
|
)
|
-
|
-
|
(1,101
|
)
|
||||||||||||||||||||||||||
Ending balance
|
$
|
1,316
|
$
|
20,276
|
$
|
3,564
|
$
|
-
|
$
|
25,156
|
$
|
1,316
|
$
|
20,276
|
$
|
3,564
|
$
|
-
|
$
|
25,156
|
||||||||||||||||||||
The amount of total gains or losses for the period
|
||||||||||||||||||||||||||||||||||||||||
included in earnings (or changes in net assets)
|
||||||||||||||||||||||||||||||||||||||||
attributable to the change in unrealized gains
|
||||||||||||||||||||||||||||||||||||||||
or losses relating to assets still held at the
|
||||||||||||||||||||||||||||||||||||||||
reporting date
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||||||||
(Some amounts may not reconcile due to rounding.)
|
At September 30,
|
At December 31,
|
|||||||
(Dollars in thousands)
|
2015
|
2014
|
||||||
The Prudential
|
$
|
142,661
|
$
|
142,653
|
||||
Unaffiliated life insurance company
|
32,414
|
31,964
|
Three Months Ended September 30, 2015
|
Nine Months Ended September 30, 2015
|
|||||||||||||||||||||||
(Dollars in thousands)
|
Before Tax
|
Tax Effect
|
Net of Tax
|
Before Tax
|
Tax Effect
|
Net of Tax
|
||||||||||||||||||
Unrealized appreciation (depreciation) ("URA(D)") on securities - temporary
|
$
|
(45,240
|
)
|
$
|
15,347
|
$
|
(29,893
|
)
|
$
|
(84,958
|
)
|
$
|
28,749
|
$
|
(56,209
|
)
|
||||||||
URA(D) on securities - OTTI
|
22
|
(7
|
)
|
15
|
9,757
|
(3,414
|
)
|
6,343
|
||||||||||||||||
Reclassification of net realized losses (gains) included in net income (loss)
|
17,137
|
(5,512
|
)
|
11,625
|
73,793
|
(24,842
|
)
|
48,951
|
||||||||||||||||
Foreign currency translation adjustments
|
(42,266
|
)
|
14,793
|
(27,473
|
)
|
(68,670
|
)
|
24,034
|
(44,636
|
)
|
||||||||||||||
Benefit plan actuarial net gain (loss)
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Reclassification of amortization of net gain (loss) included in net income (loss)
|
2,393
|
(837
|
)
|
1,556
|
7,336
|
(2,567
|
)
|
4,769
|
||||||||||||||||
Total other comprehensive income (loss)
|
$
|
(67,954
|
)
|
$
|
23,784
|
$
|
(44,170
|
)
|
$
|
(62,742
|
)
|
$
|
21,960
|
$
|
(40,782
|
)
|
||||||||
(Some amounts may not reconcile due to rounding)
|
Three Months Ended September 30, 2014
|
Nine Months Ended September 30, 2014
|
|||||||||||||||||||||||
(Dollars in thousands)
|
Before Tax
|
Tax Effect
|
Net of Tax
|
Before Tax
|
Tax Effect
|
Net of Tax
|
||||||||||||||||||
Unrealized appreciation (depreciation) ("URA(D)") on securities - temporary
|
$
|
(40,339
|
)
|
$
|
14,118
|
$
|
(26,221
|
)
|
$
|
21,234
|
$
|
(7,556
|
)
|
$
|
13,678
|
|||||||||
URA(D) on securities - OTTI
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Reclassification of net realized losses (gains) included in net income (loss)
|
(1,070
|
)
|
374
|
(696
|
)
|
2,054
|
(595
|
)
|
1,459
|
|||||||||||||||
Foreign currency translation adjustments
|
(11,496
|
)
|
4,024
|
(7,472
|
)
|
(13,211
|
)
|
4,624
|
(8,587
|
)
|
||||||||||||||
Benefit plan actuarial net gain (loss)
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Reclassification of amortization of net gain (loss) included in net income (loss)
|
1,269
|
(444
|
)
|
825
|
3,640
|
(1,274
|
)
|
2,366
|
||||||||||||||||
Total other comprehensive income (loss)
|
$
|
(51,636
|
)
|
$
|
18,072
|
$
|
(33,564
|
)
|
$
|
13,717
|
$
|
(4,801
|
)
|
$
|
8,916
|
|||||||||
(Some amounts may not reconcile due to rounding)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||
September 30,
|
September 30,
|
Affected line item within the statements of
|
||||||||||||||||
AOCI component
|
2015
|
2014
|
2015
|
2014
|
operations and comprehensive income (loss)
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||||
URA(D) on securities
|
$
|
17,137
|
$
|
(1,070
|
)
|
$
|
73,793
|
$
|
2,054
|
Other net realized capital gains (losses)
|
||||||||
(5,512
|
)
|
374
|
(24,842
|
)
|
(595
|
)
|
Income tax expense (benefit)
|
|||||||||||
$
|
11,625
|
$
|
(696
|
)
|
$
|
48,951
|
$
|
1,459
|
Net income (loss)
|
|||||||||
Benefit plan net gain (loss)
|
$
|
2,393
|
$
|
1,269
|
$
|
7,336
|
$
|
3,640
|
Other underwriting expenses
|
|||||||||
(837
|
)
|
(444
|
)
|
(2,567
|
)
|
(1,274
|
)
|
Income tax expense (benefit)
|
||||||||||
$
|
1,556
|
$
|
825
|
$
|
4,769
|
$
|
2,366
|
Net income (loss)
|
||||||||||
(Some amounts may not reconcile due to rounding)
|
Nine Months Ended
|
Twelve Months Ended
|
|||||||
September 30,
|
December 31,
|
|||||||
(Dollars in thousands)
|
2015
|
2014
|
||||||
Beginning balance of URA (D) on securities
|
$
|
37,628
|
$
|
55,457
|
||||
Current period change in URA (D) of investments - temporary
|
(7,258
|
)
|
(11,501
|
)
|
||||
Current period change in URA (D) of investments - non-credit OTTI
|
6,343
|
(6,328
|
)
|
|||||
Ending balance of URA (D) on securities
|
36,713
|
37,628
|
||||||
Beginning balance of foreign currency translation adjustments
|
41,877
|
71,087
|
||||||
Current period change in foreign currency translation adjustments
|
(44,636
|
)
|
(29,210
|
)
|
||||
Ending balance of foreign currency translation adjustments
|
(2,759
|
)
|
41,877
|
|||||
Beginning balance of benefit plan net gain (loss)
|
(74,986
|
)
|
(38,896
|
)
|
||||
Current period change in benefit plan net gain (loss)
|
4,769
|
(36,090
|
)
|
|||||
Ending balance of benefit plan net gain (loss)
|
(70,217
|
)
|
(74,986
|
)
|
||||
Ending balance of accumulated other comprehensive income (loss)
|
$
|
(36,263
|
)
|
$
|
4,519
|
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||||||||
Consolidated Balance
|
Consolidated Balance
|
||||||||||||||||||||||||
(Dollars in thousands)
|
Date Issued
|
Date Due
|
Principal Amounts
|
Sheet Amount
|
Market Value
|
Sheet Amount
|
Market Value
|
||||||||||||||||||
4.868% Senior notes
|
06/05/2014
|
06/01/2044
|
$
|
400,000
|
$
|
400,000
|
$
|
388,768
|
$
|
400,000
|
$
|
404,892
|
|||||||||||||
5.40% Senior notes
|
10/12/2004
|
10/15/2014
|
250,000
|
-
|
-
|
-
|
-
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Interest expense incurred
|
$
|
4,868
|
$
|
8,256
|
$
|
14,604
|
$
|
16,385
|
Maturity Date
|
September 30, 2015
|
December 31, 2014
|
|||||||||||||||||||||||||||
Original
|
Consolidated Balance
|
Consolidated Balance
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
Date Issued
|
Principal Amount
|
Scheduled
|
Final
|
Sheet Amount
|
Market Value
|
Sheet Amount
|
Market Value
|
|||||||||||||||||||||
6.6% Long term subordinated notes
|
04/26/2007
|
$
|
400,000
|
05/15/2037
|
05/01/2067
|
$
|
238,367
|
$
|
218,281
|
$
|
238,364
|
$
|
246,312
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Interest expense incurred
|
$
|
3,937
|
$
|
3,937
|
$
|
11,811
|
$
|
11,811
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
U.S. Reinsurance
|
September 30,
|
September 30,
|
||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Gross written premiums
|
$
|
601,570
|
$
|
679,904
|
$
|
1,615,276
|
$
|
1,663,320
|
||||||||
Net written premiums
|
247,352
|
304,442
|
672,753
|
771,054
|
||||||||||||
Premiums earned
|
$
|
235,275
|
$
|
275,521
|
$
|
726,113
|
$
|
739,977
|
||||||||
Incurred losses and LAE
|
109,137
|
125,475
|
337,065
|
371,135
|
||||||||||||
Commission and brokerage
|
48,881
|
51,231
|
141,948
|
144,747
|
||||||||||||
Other underwriting expenses
|
13,718
|
12,119
|
37,054
|
33,054
|
||||||||||||
Underwriting gain (loss)
|
$
|
63,539
|
$
|
86,696
|
$
|
210,046
|
$
|
191,041
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
International
|
September 30,
|
September 30,
|
||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Gross written premiums
|
$
|
374,138
|
$
|
419,457
|
$
|
1,019,406
|
$
|
1,214,343
|
||||||||
Net written premiums
|
147,991
|
157,932
|
417,071
|
446,599
|
||||||||||||
Premiums earned
|
$
|
135,130
|
$
|
145,662
|
$
|
433,751
|
$
|
438,394
|
||||||||
Incurred losses and LAE
|
128,454
|
113,703
|
339,926
|
286,166
|
||||||||||||
Commission and brokerage
|
27,936
|
23,767
|
93,178
|
80,348
|
||||||||||||
Other underwriting expenses
|
9,128
|
8,759
|
25,292
|
24,689
|
||||||||||||
Underwriting gain (loss)
|
$
|
(30,388
|
)
|
$
|
(567
|
)
|
$
|
(24,645
|
)
|
$
|
47,191
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
Insurance
|
September 30,
|
September 30,
|
||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Gross written premiums
|
$
|
473,003
|
$
|
354,033
|
$
|
1,130,233
|
$
|
885,006
|
||||||||
Net written premiums
|
203,730
|
149,542
|
490,140
|
386,694
|
||||||||||||
Premiums earned
|
$
|
175,645
|
$
|
148,414
|
$
|
428,672
|
$
|
382,407
|
||||||||
Incurred losses and LAE
|
133,163
|
141,402
|
325,522
|
322,842
|
||||||||||||
Commission and brokerage
|
(4,666
|
)
|
4,170
|
6,509
|
15,489
|
|||||||||||
Other underwriting expenses
|
34,107
|
29,745
|
94,723
|
79,289
|
||||||||||||
Underwriting gain (loss)
|
$
|
13,041
|
$
|
(26,903
|
)
|
$
|
1,918
|
$
|
(35,213
|
)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Underwriting gain (loss)
|
$
|
46,192
|
$
|
59,226
|
$
|
187,319
|
$
|
203,019
|
||||||||
Net investment income
|
63,363
|
83,446
|
206,869
|
215,869
|
||||||||||||
Net realized capital gains (losses)
|
(121,695
|
)
|
(160
|
)
|
(49,174
|
)
|
120,904
|
|||||||||
Corporate expense
|
(1,637
|
)
|
(4,620
|
)
|
(5,031
|
)
|
(5,398
|
)
|
||||||||
Interest, fee and bond issue cost amortization expense
|
(8,859
|
)
|
(12,292
|
)
|
(26,576
|
)
|
(28,539
|
)
|
||||||||
Other income (expense)
|
10,828
|
(3,739
|
)
|
38,950
|
(15,576
|
)
|
||||||||||
Income (loss) before taxes
|
$
|
(11,808
|
)
|
$
|
121,861
|
$
|
352,357
|
$
|
490,279
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Canada gross written premiums
|
$
|
31,903
|
$
|
41,644
|
$
|
85,575
|
$
|
116,133
|
Common Shares
|
||
Authorized for
|
||
Amendment Date
|
Repurchase
|
|
(Dollars in thousands)
|
||
09/21/2004
|
5,000,000
|
|
07/21/2008
|
5,000,000
|
|
02/24/2010
|
5,000,000
|
|
02/22/2012
|
5,000,000
|
|
05/15/2013
|
5,000,000
|
|
11/19/2014
|
5,000,000
|
|
30,000,000
|
(Dollars in thousands)
|
||||
Total purchase price
|
$
|
835,371
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Dividends received
|
$
|
9,234
|
$
|
7,290
|
$
|
27,702
|
$
|
21,870
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Expenses incurred
|
$
|
20,359
|
$
|
22,149
|
$
|
58,555
|
$
|
55,668
|
(Dollars in thousands)
|
||||||||||||||||||||
Percent
|
Assuming
|
Single
|
Aggregate
|
|||||||||||||||||
Coverage Period
|
Ceding Company
|
Ceded
|
Company
|
Type of Business
|
Occurrence Limit
|
Limit
|
||||||||||||||
01/01/2002-12/31/2002
|
Everest Re
|
20.0 | % |
Bermuda Re
|
property / casualty business
|
$ | - | $ | - | |||||||||||
01/01/2003-12/31/2003
|
Everest Re
|
25.0 | % |
Bermuda Re
|
property / casualty business
|
- | - | |||||||||||||
01/01/2004-12/31/2005
|
Everest Re
|
22.5 | % |
Bermuda Re
|
property / casualty business
|
- | - | |||||||||||||
Everest Re | 2.5 | % | Everest International | property / casualty business | - | - | ||||||||||||||
01/01/2006-12/31/2006
|
Everest Re
|
18.0 | % |
Bermuda Re
|
property business
|
125,000 | (1) | - | ||||||||||||
Everest Re | 2.0 | % | Everest International | property business | - | - | ||||||||||||||
01/01/2006-12/31/2007
|
Everest Re
|
31.5 | % |
Bermuda Re
|
casualty business
|
- | - | |||||||||||||
Everest Re | 3.5 | % | Everest International | casualty business | - | - | ||||||||||||||
01/01/2007-12/31/2007
|
Everest Re
|
22.5 | % |
Bermuda Re
|
property business
|
130,000 | (1) | - | ||||||||||||
Everest Re | 2.5 | % | Everest International | property business | - | - | ||||||||||||||
01/01/2008-12/31/2008
|
Everest Re
|
36.0 | % |
Bermuda Re
|
property / casualty business
|
130,000 | (1) | 275,000 | (2) | |||||||||||
Everest Re | 4.0 | % | Everest International | property / casualty business | - | - | ||||||||||||||
01/01/2009-12/31/2009
|
Everest Re
|
36.0 | % |
Bermuda Re
|
property / casualty business
|
150,000 | (1) | 325,000 | (2) | |||||||||||
Everest Re | 8.0 | % | Everest International | property / casualty business | - | - | ||||||||||||||
01/01/2010-12/31/2010
|
Everest Re
|
44.0 | % |
Bermuda Re
|
property / casualty business
|
150,000 | 325,000 | |||||||||||||
01/01/2011-12/31/2011
|
Everest Re
|
50.0 | % |
Bermuda Re
|
property / casualty business
|
150,000 | 300,000 | |||||||||||||
01/01/2012-12/31/2014
|
Everest Re
|
50.0 | % |
Bermuda Re
|
property / casualty business
|
100,000 | 200,000 | |||||||||||||
01/01/2015 | Everest Re | 50.0 | % | Bermuda Re | property / casualty business | 162,500 | 325,000 | |||||||||||||
01/01/2003-12/31/2006
|
Everest Re- Canadian Branch
|
50.0 | % |
Bermuda Re
|
property business
|
- | - | |||||||||||||
01/01/2007-12/31/2009
|
Everest Re- Canadian Branch
|
60.0 | % |
Bermuda Re
|
property business
|
- | - | |||||||||||||
01/01/2010-12/31/2010
|
Everest Re- Canadian Branch
|
60.0 | % |
Bermuda Re
|
property business
|
350,000 | (3) | - | ||||||||||||
01/01/2011-12/31/2011
|
Everest Re- Canadian Branch
|
60.0 | % |
Bermuda Re
|
property business
|
350,000 | (3) | - | ||||||||||||
01/01/2012-12/31/2012
|
Everest Re- Canadian Branch
|
75.0 | % |
Bermuda Re
|
property / casualty business
|
206,250 | (3) | 412,500 | (3) | |||||||||||
01/01/2013-12/31/2013
|
Everest Re- Canadian Branch
|
75.0 | % |
Bermuda Re
|
property / casualty business
|
150,000 | (3) | 412,500 | (3) | |||||||||||
01/01/2014 | Everest Re- Canadian Branch | 75.0 | % | Bermuda Re | property / casualty business | 262,500 | (3) | 412,500 | (3) | |||||||||||
01/01/2012
|
Everest Canada
|
80.0 | % |
Everest Re- Canadian Branch
|
property business
|
- | - |
(1)
|
The single occurance limit is applied before the loss cessions to either Bermuda Re or Everest International. | |||||||||||||
(2)
|
The aggregate limit is applied before the loss cessions to either Bermuda Re or Everest International. | |||||||||||||
(3)
|
Amounts shown are Canadian dollars. |
Liability Limits
|
||||||||
(Dollars in thousands)
|
Exceeding
|
Not to Exceed
|
||||||
Losses per one occurrence
|
$
|
100,000
|
$
|
150,000
|
(Dollars in thousands)
|
|||||||||||||||
Effective
|
Transferring
|
Assuming
|
% of Business or
|
Covered Period
|
|||||||||||
Date
|
Company
|
Company
|
Amount of Transfer
|
of Transfer
|
|||||||||||
09/19/2000
|
Mt. McKinley
|
Bermuda Re
|
100
|
%
|
All years
|
||||||||||
10/01/2001
|
Everest Re (Belgium Branch)
|
Bermuda Re
|
100
|
%
|
All years
|
||||||||||
10/01/2008
|
Everest Re
|
Bermuda Re
|
$
|
747,022
|
01/01/2002-12/31/2007
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
Bermuda Re
|
September 30,
|
September 30,
|
||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Ceded written premiums
|
$
|
646,001
|
$
|
664,316
|
$
|
1,713,502
|
$
|
1,706,390
|
||||||||
Ceded earned premiums
|
591,656
|
598,641
|
1,708,807
|
1,613,741
|
||||||||||||
Ceded losses and LAE (a)
|
343,660
|
344,513
|
984,371
|
879,336
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
Everest International
|
September 30,
|
September 30,
|
||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Ceded written premiums
|
$
|
168
|
$
|
131
|
$
|
313
|
$
|
219
|
||||||||
Ceded earned premiums
|
208
|
176
|
441
|
450
|
||||||||||||
Ceded losses and LAE
|
(724
|
)
|
(321
|
)
|
156
|
1,823
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
Everest Canada
|
September 30,
|
September 30,
|
||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Assumed written premiums
|
$
|
11,046
|
$
|
10,425
|
$
|
29,533
|
$
|
25,650
|
||||||||
Assumed earned premiums
|
9,174
|
7,106
|
26,498
|
17,062
|
||||||||||||
Assumed losses and LAE
|
4,041
|
4,104
|
15,062
|
10,487
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
Mt. Logan Re
|
September 30,
|
September 30,
|
||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Ceded written premiums
|
$
|
68,078
|
$
|
44,728
|
$
|
162,640
|
$
|
93,322
|
||||||||
Ceded earned premiums
|
55,234
|
38,458
|
141,668
|
78,975
|
||||||||||||
Ceded losses and LAE
|
17,071
|
3,113
|
38,542
|
17,904
|
||||||||||||
Assumed written premiums
|
4,230
|
578
|
11,626
|
10,497
|
||||||||||||
Assumed earned premiums
|
4,230
|
5,786
|
11,626
|
10,497
|
||||||||||||
Assumed losses and LAE
|
-
|
-
|
-
|
-
|
Pension Benefits
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Service cost
|
$
|
3,203
|
$
|
2,460
|
$
|
9,398
|
$
|
7,381
|
||||||||
Interest cost
|
2,758
|
2,542
|
7,926
|
7,625
|
||||||||||||
Expected return on plan assets
|
(2,904
|
)
|
(2,822
|
)
|
(8,710
|
)
|
(8,468
|
)
|
||||||||
Amortization of prior service cost
|
4
|
13
|
15
|
38
|
||||||||||||
Amortization of net (income) loss
|
2,312
|
1,173
|
6,824
|
3,356
|
||||||||||||
FAS 88 settlement charge
|
-
|
5,269
|
-
|
5,269
|
||||||||||||
Net periodic benefit cost
|
$
|
5,373
|
$
|
8,635
|
$
|
15,453
|
$
|
15,201
|
Other Benefits
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Service cost
|
$
|
498
|
$
|
407
|
$
|
1,498
|
$
|
1,221
|
||||||||
Interest cost
|
329
|
342
|
987
|
1,026
|
||||||||||||
Amortization of net (income) loss
|
76
|
82
|
497
|
246
|
||||||||||||
Net periodic benefit cost
|
$
|
903
|
$
|
831
|
$
|
2,982
|
$
|
2,493
|
(Dollars in thousands)
|
||||
Investments and cash
|
$
|
16,223
|
||
Reinsurance recoverables
|
142,057
|
|||
Deferred tax asset
|
35,451
|
|||
Total assets held for sale
|
$
|
193,731
|
||
Reserve for losses and loss adjustment expenses
|
$
|
137,704
|
||
Deferred gain on retroactive reinsurance
|
94,704
|
|||
Other liabilities
|
130
|
|||
Total liabilities held for sale
|
$
|
232,538
|
||
Net liabilities held for sale
|
$
|
(38,807
|
)
|
Three Months Ended
|
Percentage
|
Nine Months Ended
|
Percentage
|
|||||||||||||||||||||
September 30,
|
Increase/
|
September 30,
|
Increase/
|
|||||||||||||||||||||
(Dollars in millions)
|
2015
|
2014
|
(Decrease)
|
2015
|
2014
|
(Decrease)
|
||||||||||||||||||
Gross written premiums
|
$
|
1,448.7
|
$
|
1,453.4
|
-0.3
|
%
|
$
|
3,764.9
|
$
|
3,762.7
|
0.1
|
%
|
||||||||||||
Net written premiums
|
599.1
|
611.9
|
-2.1
|
%
|
1,580.0
|
1,604.3
|
-1.5
|
%
|
||||||||||||||||
REVENUES:
|
||||||||||||||||||||||||
Premiums earned
|
$
|
546.1
|
$
|
569.6
|
-4.1
|
%
|
$
|
1,588.5
|
$
|
1,560.8
|
1.8
|
%
|
||||||||||||
Net investment income
|
63.4
|
83.4
|
-24.1
|
%
|
206.9
|
215.9
|
-4.2
|
%
|
||||||||||||||||
Net realized capital gains (losses)
|
(121.7
|
)
|
(0.2
|
)
|
NM
|
(49.2
|
)
|
120.9
|
-140.7
|
%
|
||||||||||||||
Other income (expense)
|
10.8
|
(3.7
|
)
|
NM
|
39.0
|
(15.6
|
)
|
NM
|
||||||||||||||||
Total revenues
|
498.5
|
649.1
|
-23.2
|
%
|
1,785.2
|
1,882.0
|
-5.1
|
%
|
||||||||||||||||
CLAIMS AND EXPENSES:
|
||||||||||||||||||||||||
Incurred losses and loss adjustment expenses
|
370.8
|
380.6
|
-2.6
|
%
|
1,002.5
|
980.1
|
2.3
|
%
|
||||||||||||||||
Commission, brokerage, taxes and fees
|
72.2
|
79.2
|
-8.9
|
%
|
241.6
|
240.6
|
0.4
|
%
|
||||||||||||||||
Other underwriting expenses
|
57.0
|
50.6
|
12.5
|
%
|
157.1
|
137.0
|
14.6
|
%
|
||||||||||||||||
Corporate expense
|
1.6
|
4.6
|
-64.6
|
%
|
5.0
|
5.4
|
-6.8
|
%
|
||||||||||||||||
Interest, fee and bond issue cost amortization expense
|
8.9
|
12.3
|
-27.9
|
%
|
26.6
|
28.5
|
-6.9
|
%
|
||||||||||||||||
Total claims and expenses
|
510.4
|
527.3
|
-3.2
|
%
|
1,432.8
|
1,391.7
|
3.0
|
%
|
||||||||||||||||
INCOME (LOSS) BEFORE TAXES
|
(11.8
|
)
|
121.9
|
-109.7
|
%
|
352.4
|
490.3
|
-28.1
|
%
|
|||||||||||||||
Income tax expense (benefit)
|
(7.1
|
)
|
21.7
|
-132.9
|
%
|
107.3
|
145.5
|
-26.2
|
%
|
|||||||||||||||
NET INCOME (LOSS)
|
$
|
(4.7
|
)
|
$
|
100.1
|
-104.7
|
%
|
$
|
245.1
|
$
|
344.8
|
-28.9
|
%
|
|||||||||||
RATIOS:
|
Point Change
|
Point Change
|
||||||||||||||||||||||
Loss ratio
|
67.9
|
%
|
66.8
|
%
|
1.1
|
63.1
|
%
|
62.8
|
%
|
0.3
|
||||||||||||||
Commission and brokerage ratio
|
13.2
|
%
|
13.9
|
%
|
(0.7
|
)
|
15.2
|
%
|
15.4
|
%
|
(0.2
|
)
|
||||||||||||
Other underwriting expense ratio
|
10.4
|
%
|
8.9
|
%
|
1.5
|
9.9
|
%
|
8.8
|
%
|
1.1
|
||||||||||||||
Combined ratio
|
91.5
|
%
|
89.6
|
%
|
1.9
|
88.2
|
%
|
87.0
|
%
|
1.2
|
||||||||||||||
At
|
At
|
Percentage
|
||||||||||||||||||||||
September 30,
|
December 31,
|
Increase/
|
||||||||||||||||||||||
(Dollars in millions)
|
2015 | 2014 |
(Decrease)
|
|||||||||||||||||||||
Balance sheet data:
|
||||||||||||||||||||||||
Total investments and cash
|
$
|
9,354.9
|
$
|
9,572.6
|
-2.3
|
%
|
||||||||||||||||||
Total assets
|
16,550.6
|
16,322.3
|
1.4
|
%
|
||||||||||||||||||||
Loss and loss adjustment expense reserves
|
7,878.1
|
7,843.9
|
0.4
|
%
|
||||||||||||||||||||
Total debt
|
638.4
|
638.4
|
0.0
|
%
|
||||||||||||||||||||
Total liabilities
|
11,763.4
|
11,749.6
|
0.1
|
%
|
||||||||||||||||||||
Stockholder's equity
|
4,787.3
|
4,572.7
|
4.7
|
%
|
||||||||||||||||||||
(NM, not meaningful)
|
||||||||||||||||||||||||
(Some amounts may not reconcile due to rounding)
|
Three Months Ended September 30,
|
|||||||||||||||||||||||||||
Current
|
Ratio %/
|
Prior
|
Ratio %/
|
Total
|
Ratio %/
|
||||||||||||||||||||||
(Dollars in millions)
|
Year
|
Pt Change
|
Years
|
Pt Change
|
Incurred
|
Pt Change
|
|||||||||||||||||||||
2015
|
|||||||||||||||||||||||||||
Attritional (a)
|
$
|
351.1
|
64.4
|
%
|
$
|
3.3
|
0.6
|
%
|
$
|
354.5
|
65.0
|
%
|
|||||||||||||||
Catastrophes
|
17.2
|
3.1
|
%
|
|
(0.9
|
)
|
-0.2
|
%
|
|
16.3
|
2.9
|
%
|
|
||||||||||||||
Total
|
$
|
368.3
|
67.5
|
%
|
|
$
|
2.4
|
0.4
|
%
|
|
$
|
370.8
|
67.9
|
%
|
|
||||||||||||
2014
|
|||||||||||||||||||||||||||
Attritional (a)
|
$
|
372.4
|
65.3
|
%
|
$
|
(3.1
|
)
|
-0.5
|
%
|
$
|
369.3
|
64.8
|
%
|
||||||||||||||
Catastrophes
|
14.7
|
2.6
|
%
|
|
(3.4
|
)
|
-0.6
|
%
|
|
11.3
|
2.0
|
%
|
|
||||||||||||||
Total
|
$
|
387.1
|
67.9
|
%
|
|
$
|
(6.5
|
)
|
-1.1
|
%
|
|
$
|
380.6
|
66.8
|
%
|
|
|||||||||||
Variance 2015/2014
|
|||||||||||||||||||||||||||
Attritional (a)
|
$
|
(21.3
|
)
|
(0.9
|
)
|
pts
|
$
|
6.4
|
1.1
|
pts
|
$
|
(14.8
|
)
|
0.2
|
pts
|
||||||||||||
Catastrophes
|
2.5
|
0.5
|
pts
|
2.5
|
0.4
|
pts
|
5.0
|
0.9
|
pts
|
||||||||||||||||||
Total
|
$
|
(18.8
|
)
|
(0.4
|
)
|
pts
|
$
|
8.9
|
1.5
|
pts
|
$
|
(9.8
|
)
|
1.1
|
pts
|
||||||||||||
(a) Attritional losses exclude catastrophe losses.
|
|||||||||||||||||||||||||||
(Some amounts may not reconcile due to rounding.)
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||
Current
|
Ratio %/
|
Prior
|
Ratio %/
|
Total
|
Ratio %/
|
||||||||||||||||||||||
(Dollars in millions)
|
Year
|
Pt Change
|
Years
|
Pt Change
|
Incurred
|
Pt Change
|
|||||||||||||||||||||
2015
|
|||||||||||||||||||||||||||
Attritional (a)
|
$
|
973.2
|
61.3
|
%
|
$
|
2.0
|
0.1
|
%
|
$
|
975.2
|
61.4
|
%
|
|||||||||||||||
Catastrophes
|
35.3
|
2.2
|
%
|
|
(8.0
|
)
|
-0.5
|
%
|
|
27.3
|
1.7
|
%
|
|
||||||||||||||
Total
|
$
|
1,008.5
|
63.5
|
%
|
|
$
|
(6.0
|
)
|
-0.4
|
%
|
|
$
|
1,002.5
|
63.1
|
%
|
|
|||||||||||
2014
|
|||||||||||||||||||||||||||
Attritional (a)
|
$
|
956.3
|
61.3
|
%
|
$
|
(5.5
|
)
|
-0.4
|
%
|
$
|
950.8
|
60.9
|
%
|
||||||||||||||
Catastrophes
|
35.1
|
2.3
|
%
|
|
(5.8
|
)
|
-0.4
|
%
|
|
29.3
|
1.9
|
%
|
|
||||||||||||||
Total
|
$
|
991.4
|
63.6
|
%
|
|
$
|
(11.3
|
)
|
-0.8
|
%
|
|
$
|
980.1
|
62.8
|
%
|
|
|||||||||||
Variance 2015/2014
|
|||||||||||||||||||||||||||
Attritional (a)
|
$
|
16.9
|
-
|
pts
|
$
|
7.5
|
0.5
|
pts
|
$
|
24.4
|
0.5
|
pts
|
|||||||||||||||
Catastrophes
|
0.2
|
(0.1
|
)
|
pts
|
(2.2
|
)
|
(0.1
|
)
|
pts
|
(2.0
|
)
|
(0.2
|
)
|
pts
|
|||||||||||||
Total
|
$
|
17.1
|
(0.1
|
)
|
pts
|
$
|
5.3
|
0.4
|
pts
|
$
|
22.4
|
0.3
|
pts
|
||||||||||||||
(a) Attritional losses exclude catastrophe losses.
|
|||||||||||||||||||||||||||
(Some amounts may not reconcile due to rounding.)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(Dollars in millions)
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Fixed maturities
|
$
|
46.4
|
$
|
52.5
|
$
|
140.8
|
$
|
157.5
|
||||||||
Equity securities
|
8.0
|
8.0
|
26.6
|
26.1
|
||||||||||||
Short-term investments and cash
|
0.2
|
0.2
|
0.7
|
0.8
|
||||||||||||
Other invested assets
|
||||||||||||||||
Limited partnerships
|
3.0
|
19.3
|
17.7
|
18.9
|
||||||||||||
Dividends from Parent's shares
|
9.2
|
7.3
|
27.7
|
21.9
|
||||||||||||
Other
|
(0.2
|
)
|
0.9
|
1.4
|
3.2
|
|||||||||||
Gross investment income before adjustments
|
66.6
|
88.1
|
214.9
|
228.4
|
||||||||||||
Funds held interest income (expense)
|
0.9
|
1.0
|
4.3
|
4.3
|
||||||||||||
Interest income from Parent
|
1.0
|
-
|
3.2
|
-
|
||||||||||||
Gross investment income
|
68.7
|
89.1
|
222.5
|
232.7
|
||||||||||||
Investment expenses
|
(5.3
|
)
|
(5.6
|
)
|
(15.6
|
)
|
(16.8
|
)
|
||||||||
Net investment income
|
$
|
63.4
|
$
|
83.4
|
$
|
206.9
|
$
|
215.9
|
||||||||
(Some amounts may not reconcile due to rounding.)
|
At
|
At
|
||||||
September 30,
|
December 31,
|
||||||
2015
|
2014
|
||||||
Imbedded pre-tax yield of cash and invested assets at December 31
|
3.3%
|
3.1%
|
|||||
Imbedded after-tax yield of cash and invested assets at December 31
|
2.3%
|
2.2%
|
Three Months Ended
|
Nine Months Ended
|
||||||
September 30,
|
September 30,
|
||||||
2015
|
2014
|
2015
|
2014
|
||||
Annualized pre-tax yield on average cash and invested assets
|
3.1%
|
3.8%
|
3.3%
|
3.4%
|
|||
Annualized after-tax yield on average cash and invested assets
|
2.1%
|
2.6%
|
2.3%
|
2.4%
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||
(Dollars in millions)
|
2015
|
2014
|
Variance
|
2015
|
2014
|
Variance
|
||||||||||||||||||
Gains (losses) from sales:
|
||||||||||||||||||||||||
Fixed maturity securities, market value
|
||||||||||||||||||||||||
Gains
|
$
|
1.4
|
$
|
4.3
|
$
|
(2.9
|
)
|
$
|
9.0
|
$
|
9.4
|
$
|
(0.4
|
)
|
||||||||||
Losses
|
(8.1
|
)
|
(3.3
|
)
|
(4.8
|
)
|
(39.4
|
)
|
(11.3
|
)
|
(28.1
|
)
|
||||||||||||
Total
|
(6.7
|
)
|
1.0
|
(7.7
|
)
|
(30.4
|
)
|
(1.9
|
)
|
(28.5
|
)
|
|||||||||||||
Fixed maturity securities, fair value
|
||||||||||||||||||||||||
Gains
|
-
|
0.1
|
(0.1
|
)
|
-
|
1.3
|
(1.3
|
)
|
||||||||||||||||
Losses
|
-
|
-
|
-
|
-
|
(0.3
|
)
|
0.3
|
|||||||||||||||||
Total
|
-
|
0.1
|
(0.1
|
)
|
-
|
1.0
|
(1.0
|
)
|
||||||||||||||||
Equity securities, fair value
|
||||||||||||||||||||||||
Gains
|
5.3
|
1.7
|
3.6
|
17.7
|
12.0
|
5.7
|
||||||||||||||||||
Losses
|
(18.9
|
)
|
(4.3
|
)
|
(14.6
|
)
|
(31.7
|
)
|
(14.2
|
)
|
(17.5
|
)
|
||||||||||||
Total
|
(13.6
|
)
|
(2.6
|
)
|
(11.0
|
)
|
(14.0
|
)
|
(2.2
|
)
|
(11.8
|
)
|
||||||||||||
Total net realized gains (losses) from sales
|
||||||||||||||||||||||||
Gains
|
6.6
|
6.1
|
0.5
|
26.7
|
22.7
|
4.0
|
||||||||||||||||||
Losses
|
(26.9
|
)
|
(7.6
|
)
|
(19.3
|
)
|
(71.0
|
)
|
(25.8
|
)
|
(45.2
|
)
|
||||||||||||
Total
|
(20.3
|
)
|
(1.4
|
)
|
(18.9
|
)
|
(44.3
|
)
|
(3.0
|
)
|
(41.3
|
)
|
||||||||||||
Gain on sale of subsidiary:
|
94.7
|
-
|
94.7
|
94.7
|
-
|
94.7
|
||||||||||||||||||
Other than temporary impairments:
|
(10.5
|
)
|
-
|
(10.5
|
)
|
(43.4
|
)
|
(0.2
|
)
|
(43.2
|
)
|
|||||||||||||
Gains (losses) from fair value adjustments:
|
||||||||||||||||||||||||
Fixed maturities, fair value
|
-
|
(0.9
|
)
|
0.9
|
0.1
|
(0.9
|
)
|
1.0
|
||||||||||||||||
Equity securities, fair value
|
(101.3
|
)
|
(12.6
|
)
|
(88.7
|
)
|
(85.7
|
)
|
65.4
|
(151.1
|
)
|
|||||||||||||
Other invested assets, fair value
|
(84.3
|
)
|
14.8
|
(99.1
|
)
|
29.5
|
59.7
|
(30.2
|
)
|
|||||||||||||||
Total
|
(185.6
|
)
|
1.2
|
(186.8
|
)
|
(56.1
|
)
|
124.1
|
(180.2
|
)
|
||||||||||||||
Total net realized gains (losses)
|
$
|
(121.7
|
)
|
$
|
(0.2
|
)
|
$
|
(121.5
|
)
|
$
|
(49.2
|
)
|
$
|
120.9
|
$
|
(170.0
|
)
|
|||||||
(Some amounts may not reconcile due to rounding)
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||
(Dollars in millions)
|
2015
|
2014
|
Variance
|
% Change
|
2015
|
2014
|
Variance
|
% Change
|
||||||||||||||||||||||||
Gross written premiums
|
$
|
601.6
|
$
|
679.9
|
$
|
(78.3
|
)
|
-11.5
|
%
|
$
|
1,615.3
|
$
|
1,663.3
|
$
|
(48.0
|
)
|
-2.9
|
%
|
||||||||||||||
Net written premiums
|
247.4
|
304.4
|
(57.1
|
)
|
-18.8
|
%
|
672.8
|
771.1
|
(98.3
|
)
|
-12.7
|
%
|
||||||||||||||||||||
Premiums earned
|
$
|
235.3
|
$
|
275.5
|
$
|
(40.2
|
)
|
-14.6
|
%
|
$
|
726.1
|
$
|
740.0
|
$
|
(13.9
|
)
|
-1.9
|
%
|
||||||||||||||
Incurred losses and LAE
|
109.1
|
125.5
|
(16.3
|
)
|
-13.0
|
%
|
337.1
|
371.1
|
(34.1
|
)
|
-9.2
|
%
|
||||||||||||||||||||
Commission and brokerage
|
48.9
|
51.2
|
(2.4
|
)
|
-4.6
|
%
|
141.9
|
144.7
|
(2.8
|
)
|
-1.9
|
%
|
||||||||||||||||||||
Other underwriting expenses
|
13.7
|
12.1
|
1.6
|
13.2
|
%
|
37.1
|
33.1
|
4.0
|
12.1
|
%
|
||||||||||||||||||||||
Underwriting gain (loss)
|
$
|
63.5
|
$
|
86.7
|
$
|
(23.2
|
)
|
-26.7
|
%
|
$
|
210.0
|
$
|
191.0
|
$
|
19.0
|
9.9
|
%
|
|||||||||||||||
Point Chg
|
Point Chg
|
|||||||||||||||||||||||||||||||
Loss ratio
|
46.4
|
%
|
45.5
|
%
|
0.9
|
46.4
|
%
|
50.2
|
%
|
(3.8
|
)
|
|||||||||||||||||||||
Commission and brokerage ratio
|
20.8
|
%
|
18.6
|
%
|
2.2
|
19.5
|
%
|
19.6
|
%
|
(0.1
|
)
|
|||||||||||||||||||||
Other underwriting expense ratio
|
5.8
|
%
|
4.4
|
%
|
1.4
|
5.2
|
%
|
4.4
|
%
|
0.8
|
||||||||||||||||||||||
Combined ratio
|
73.0
|
%
|
68.5
|
%
|
4.5
|
71.2
|
%
|
74.2
|
%
|
(3.1
|
)
|
|||||||||||||||||||||
(Some amounts may not reconcile due to rounding)
|
Three Months Ended September 30,
|
|||||||||||||||||||||||||||
Current
|
Ratio %/
|
Prior
|
Ratio %/
|
Total
|
Ratio %/
|
||||||||||||||||||||||
(Dollars in millions)
|
Year
|
Pt Change
|
Years
|
Pt Change
|
Incurred
|
Pt Change
|
|||||||||||||||||||||
2015
|
|||||||||||||||||||||||||||
Attritional
|
$
|
108.1
|
45.9
|
%
|
$
|
1.5
|
0.6
|
%
|
$
|
109.6
|
46.5
|
%
|
|||||||||||||||
Catastrophes
|
0.1
|
0.1
|
%
|
|
(0.5
|
)
|
-0.2
|
%
|
|
(0.4
|
)
|
-0.1
|
%
|
|
|||||||||||||
Total segment
|
$
|
108.2
|
46.0
|
%
|
|
$
|
0.9
|
0.4
|
%
|
|
$
|
109.1
|
46.4
|
%
|
|
||||||||||||
2014
|
|||||||||||||||||||||||||||
Attritional
|
$
|
125.2
|
45.4
|
%
|
$
|
-
|
0.0
|
%
|
$
|
125.2
|
45.4
|
%
|
|||||||||||||||
Catastrophes
|
-
|
0.0
|
%
|
|
0.3
|
0.1
|
%
|
|
0.3
|
0.1
|
%
|
|
|||||||||||||||
Total segment
|
$
|
125.2
|
45.4
|
%
|
|
$
|
0.3
|
0.1
|
%
|
|
$
|
125.5
|
45.5
|
%
|
|
||||||||||||
Variance 2015/2014
|
|||||||||||||||||||||||||||
Attritional
|
$
|
(17.1
|
)
|
0.5
|
pts
|
$
|
1.5
|
0.6
|
pts
|
$
|
(15.6
|
)
|
1.1
|
pts
|
|||||||||||||
Catastrophes
|
0.1
|
0.1
|
pts
|
(0.8
|
)
|
(0.3
|
)
|
pts
|
(0.7
|
)
|
(0.2
|
)
|
pts
|
||||||||||||||
Total segment
|
$
|
(17.0
|
)
|
0.6
|
pts
|
$
|
0.6
|
0.3
|
pts
|
$
|
(16.3
|
)
|
0.9
|
pts
|
|||||||||||||
(Some amounts may not reconcile due to rounding.)
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||
Current
|
Ratio %/
|
Prior
|
Ratio %/
|
Total
|
Ratio %/
|
||||||||||||||||||||||
(Dollars in millions)
|
Year
|
Pt Change
|
Years
|
Pt Change
|
Incurred
|
Pt Change
|
|||||||||||||||||||||
2015
|
|||||||||||||||||||||||||||
Attritional
|
$
|
360.9
|
49.7
|
%
|
$
|
(17.5
|
)
|
-2.4
|
%
|
$
|
343.5
|
47.3
|
%
|
||||||||||||||
Catastrophes
|
0.1
|
0.0
|
%
|
|
(6.5
|
)
|
-0.9
|
%
|
|
(6.4
|
)
|
-0.9
|
%
|
|
|||||||||||||
Total segment
|
$
|
361.1
|
49.7
|
%
|
|
$
|
(24.0
|
)
|
-3.3
|
%
|
|
$
|
337.1
|
46.4
|
%
|
|
|||||||||||
2014
|
|||||||||||||||||||||||||||
Attritional
|
$
|
373.2
|
50.6
|
%
|
$
|
(4.9
|
)
|
-0.7
|
%
|
$
|
368.3
|
49.9
|
%
|
||||||||||||||
Catastrophes
|
3.2
|
0.4
|
%
|
|
(0.4
|
)
|
-0.1
|
%
|
|
2.8
|
0.3
|
%
|
|
||||||||||||||
Total segment
|
$
|
376.4
|
51.0
|
%
|
|
$
|
(5.3
|
)
|
-0.8
|
%
|
|
$
|
371.1
|
50.2
|
%
|
|
|||||||||||
Variance 2015/2014
|
|||||||||||||||||||||||||||
Attritional
|
$
|
(12.3
|
)
|
(0.9
|
)
|
pts
|
$
|
(12.6
|
)
|
(1.7
|
)
|
pts
|
$
|
(24.8
|
)
|
(2.6
|
)
|
pts
|
|||||||||
Catastrophes
|
(3.1
|
)
|
(0.4
|
)
|
pts
|
(6.1
|
)
|
(0.8
|
)
|
pts
|
(9.2
|
)
|
(1.2
|
)
|
pts
|
||||||||||||
Total segment
|
$
|
(15.3
|
)
|
(1.3
|
)
|
pts
|
$
|
(18.7
|
)
|
(2.5
|
)
|
pts
|
$
|
(34.1
|
)
|
(3.8
|
)
|
pts
|
|||||||||
(Some amounts may not reconcile due to rounding.)
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||
(Dollars in millions)
|
2015
|
2014
|
Variance
|
% Change
|
2015
|
2014
|
Variance
|
% Change
|
||||||||||||||||||||||||
Gross written premiums
|
$
|
374.1
|
$
|
419.5
|
$
|
(45.3
|
)
|
-10.8
|
%
|
$
|
1,019.4
|
$
|
1,214.3
|
$
|
(194.9
|
)
|
-16.1
|
%
|
||||||||||||||
Net written premiums
|
148.0
|
157.9
|
(9.9
|
)
|
-6.3
|
%
|
417.1
|
446.6
|
(29.5
|
)
|
-6.6
|
%
|
||||||||||||||||||||
Premiums earned
|
$
|
135.1
|
$
|
145.7
|
$
|
(10.5
|
)
|
-7.2
|
%
|
$
|
433.8
|
$
|
438.4
|
$
|
(4.6
|
)
|
-1.1
|
%
|
||||||||||||||
Incurred losses and LAE
|
128.5
|
113.7
|
14.8
|
13.0
|
%
|
339.9
|
286.2
|
53.8
|
18.8
|
%
|
||||||||||||||||||||||
Commission and brokerage
|
27.9
|
23.8
|
4.2
|
17.5
|
%
|
93.2
|
80.3
|
12.8
|
16.0
|
%
|
||||||||||||||||||||||
Other underwriting expenses
|
9.1
|
8.8
|
0.4
|
4.2
|
%
|
25.3
|
24.7
|
0.6
|
2.4
|
%
|
||||||||||||||||||||||
Underwriting gain (loss)
|
$
|
(30.4
|
)
|
$
|
(0.6
|
)
|
$
|
(29.8
|
)
|
NM
|
$
|
(24.6
|
)
|
$
|
47.2
|
$
|
(71.8
|
)
|
-152.2
|
%
|
||||||||||||
Point Chg
|
Point Chg
|
|||||||||||||||||||||||||||||||
Loss ratio
|
95.1
|
%
|
78.1
|
%
|
17.0
|
78.4
|
%
|
65.3
|
%
|
13.1
|
||||||||||||||||||||||
Commission and brokerage ratio
|
20.7
|
%
|
16.3
|
%
|
4.4
|
21.5
|
%
|
18.3
|
%
|
3.2
|
||||||||||||||||||||||
Other underwriting expense ratio
|
6.7
|
%
|
6.0
|
%
|
0.7
|
5.8
|
%
|
5.6
|
%
|
0.2
|
||||||||||||||||||||||
Combined ratio
|
122.5
|
%
|
100.4
|
%
|
22.1
|
105.7
|
%
|
89.2
|
%
|
16.5
|
||||||||||||||||||||||
(NM, not meaningful)
|
||||||||||||||||||||||||||||||||
(Some amounts may not reconcile due to rounding)
|
Three Months Ended September 30,
|
|||||||||||||||||||||||||||
Current
|
Ratio %/
|
Prior
|
Ratio %/
|
Total
|
Ratio %/
|
||||||||||||||||||||||
(Dollars in millions)
|
Year
|
Pt Change
|
Years
|
Pt Change
|
Incurred
|
Pt Change
|
|||||||||||||||||||||
2015
|
|||||||||||||||||||||||||||
Attritional
|
$
|
111.0
|
82.2
|
%
|
$
|
0.9
|
0.7
|
%
|
$
|
112.0
|
82.9
|
%
|
|||||||||||||||
Catastrophes
|
17.0
|
12.6
|
%
|
|
(0.6
|
)
|
-0.4
|
%
|
|
16.5
|
12.2
|
%
|
|
||||||||||||||
Total segment
|
$
|
128.1
|
94.8
|
%
|
|
$
|
0.4
|
0.3
|
%
|
|
$
|
128.5
|
95.1
|
%
|
|
||||||||||||
2014
|
|||||||||||||||||||||||||||
Attritional
|
$
|
106.6
|
73.2
|
%
|
$
|
(3.8
|
)
|
-2.6
|
%
|
$
|
102.8
|
70.6
|
%
|
||||||||||||||
Catastrophes
|
14.7
|
10.1
|
%
|
|
(3.7
|
)
|
-2.6
|
%
|
|
10.9
|
7.5
|
%
|
|
||||||||||||||
Total segment
|
$
|
121.3
|
83.3
|
%
|
|
$
|
(7.6
|
)
|
-5.2
|
%
|
|
$
|
113.7
|
78.1
|
%
|
|
|||||||||||
Variance 2015/2014
|
|||||||||||||||||||||||||||
Attritional
|
$
|
4.4
|
9.0
|
pts
|
$
|
4.7
|
3.3
|
pts
|
$
|
9.2
|
12.3
|
pts
|
|||||||||||||||
Catastrophes
|
2.3
|
2.5
|
pts
|
3.1
|
2.2
|
pts
|
5.6
|
4.7
|
pts
|
||||||||||||||||||
Total segment
|
$
|
6.8
|
11.5
|
pts
|
$
|
8.0
|
5.5
|
pts
|
$
|
14.8
|
17.0
|
pts
|
|||||||||||||||
(Some amounts may not reconcile due to rounding.)
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||
Current
|
Ratio %/
|
Prior
|
Ratio %/
|
Total
|
Ratio %/
|
||||||||||||||||||||||
(Dollars in millions)
|
Year
|
Pt Change
|
Years
|
Pt Change
|
Incurred
|
Pt Change
|
|||||||||||||||||||||
2015
|
|||||||||||||||||||||||||||
Attritional
|
$
|
304.9
|
70.3
|
%
|
$
|
1.6
|
0.4
|
%
|
$
|
306.5
|
70.7
|
%
|
|||||||||||||||
Catastrophes
|
35.1
|
8.1
|
%
|
|
(1.7
|
)
|
-0.4
|
%
|
|
33.4
|
7.7
|
%
|
|
||||||||||||||
Total segment
|
$
|
340.0
|
78.4
|
%
|
|
$
|
(0.1
|
)
|
0.0
|
%
|
|
$
|
339.9
|
78.4
|
%
|
|
|||||||||||
2014
|
|||||||||||||||||||||||||||
Attritional
|
$
|
263.7
|
60.1
|
%
|
$
|
(4.1
|
)
|
-0.9
|
%
|
$
|
259.7
|
59.2
|
%
|
||||||||||||||
Catastrophes
|
32.0
|
7.3
|
%
|
|
(5.5
|
)
|
-1.2
|
%
|
|
26.5
|
6.1
|
%
|
|
||||||||||||||
Total segment
|
$
|
295.7
|
67.4
|
%
|
|
$
|
(9.5
|
)
|
-2.1
|
%
|
|
$
|
286.2
|
65.3
|
%
|
|
|||||||||||
Variance 2015/2014
|
|||||||||||||||||||||||||||
Attritional
|
$
|
41.2
|
10.2
|
pts
|
$
|
5.7
|
1.3
|
pts
|
$
|
46.8
|
11.5
|
pts
|
|||||||||||||||
Catastrophes
|
3.1
|
0.8
|
pts
|
3.8
|
0.8
|
pts
|
6.9
|
1.6
|
pts
|
||||||||||||||||||
Total segment
|
$
|
44.3
|
11.0
|
pts
|
$
|
9.4
|
2.1
|
pts
|
$
|
53.8
|
13.1
|
pts
|
|||||||||||||||
(Some amounts may not reconcile due to rounding.)
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||
(Dollars in millions)
|
2015
|
2014
|
Variance
|
% Change
|
2015
|
2014
|
Variance
|
% Change
|
||||||||||||||||||||||||
Gross written premiums
|
$
|
473.0
|
$
|
354.0
|
$
|
119.0
|
33.6
|
%
|
$
|
1,130.2
|
$
|
885.0
|
$
|
245.2
|
27.7
|
%
|
||||||||||||||||
Net written premiums
|
203.7
|
149.5
|
54.2
|
36.2
|
%
|
490.1
|
386.7
|
103.4
|
26.8
|
%
|
||||||||||||||||||||||
Premiums earned
|
$
|
175.6
|
$
|
148.4
|
$
|
27.2
|
18.3
|
%
|
$
|
428.7
|
$
|
382.4
|
$
|
46.3
|
12.1
|
%
|
||||||||||||||||
Incurred losses and LAE
|
133.2
|
141.4
|
(8.2
|
)
|
-5.8
|
%
|
325.5
|
322.8
|
2.7
|
0.8
|
%
|
|||||||||||||||||||||
Commission and brokerage
|
(4.7
|
)
|
4.2
|
(8.8
|
)
|
-211.9
|
%
|
6.5
|
15.5
|
(9.0
|
)
|
-58.0
|
%
|
|||||||||||||||||||
Other underwriting expenses
|
34.1
|
29.7
|
4.4
|
14.7
|
%
|
94.7
|
79.3
|
15.4
|
19.5
|
%
|
||||||||||||||||||||||
Underwriting gain (loss)
|
$
|
13.0
|
$
|
(26.9
|
)
|
$
|
39.9
|
-148.5
|
%
|
$
|
1.9
|
$
|
(35.2
|
)
|
$
|
37.1
|
-105.4
|
%
|
||||||||||||||
Point Chg
|
Point Chg
|
|||||||||||||||||||||||||||||||
Loss ratio
|
75.8
|
%
|
95.3
|
%
|
(19.5
|
)
|
75.9
|
%
|
84.4
|
%
|
(8.5
|
)
|
||||||||||||||||||||
Commission and brokerage ratio
|
-2.7
|
%
|
2.8
|
%
|
(5.5
|
)
|
1.5
|
%
|
4.1
|
%
|
(2.6
|
)
|
||||||||||||||||||||
Other underwriting expense ratio
|
19.5
|
%
|
20.0
|
%
|
(0.5
|
)
|
22.2
|
%
|
20.7
|
%
|
1.5
|
|||||||||||||||||||||
Combined ratio
|
92.6
|
%
|
118.1
|
%
|
(25.5
|
)
|
99.6
|
%
|
109.2
|
%
|
(9.6
|
)
|
||||||||||||||||||||
(Some amounts may not reconcile due to rounding)
|
Three Months Ended September 30,
|
|||||||||||||||||||||||||||
Current
|
Ratio %/
|
Prior
|
Ratio %/
|
Total
|
Ratio %/
|
||||||||||||||||||||||
(Dollars in millions)
|
Year
|
Pt Change
|
Years
|
Pt Change
|
Incurred
|
Pt Change
|
|||||||||||||||||||||
2015
|
|||||||||||||||||||||||||||
Attritional
|
$
|
132.0
|
75.2
|
%
|
$
|
0.9
|
0.5
|
%
|
$
|
132.9
|
75.7
|
%
|
|||||||||||||||
Catastrophes
|
-
|
0.0
|
%
|
|
0.2
|
0.1
|
%
|
|
0.2
|
0.1
|
%
|
|
|||||||||||||||
Total segment
|
$
|
132.0
|
75.2
|
%
|
|
$
|
1.2
|
0.7
|
%
|
|
$
|
133.2
|
75.8
|
%
|
|
||||||||||||
2014
|
|||||||||||||||||||||||||||
Attritional
|
$
|
140.6
|
94.8
|
%
|
$
|
0.8
|
0.5
|
%
|
$
|
141.4
|
95.3
|
%
|
|||||||||||||||
Catastrophes
|
-
|
0.0
|
%
|
|
-
|
0.0
|
%
|
|
-
|
0.0
|
%
|
|
|||||||||||||||
Total segment
|
$
|
140.6
|
94.8
|
%
|
|
$
|
0.8
|
0.5
|
%
|
|
$
|
141.4
|
95.3
|
%
|
|
||||||||||||
Variance 2015/2014
|
|||||||||||||||||||||||||||
Attritional
|
$
|
(8.6
|
)
|
(19.6
|
)
|
pts
|
$
|
0.1
|
-
|
pts
|
$
|
(8.5
|
)
|
(19.6
|
)
|
pts
|
|||||||||||
Catastrophes
|
-
|
-
|
pts
|
0.2
|
0.1
|
pts
|
0.2
|
0.1
|
pts
|
||||||||||||||||||
Total segment
|
$
|
(8.6
|
)
|
(19.6
|
)
|
pts
|
$
|
0.4
|
0.1
|
pts
|
$
|
(8.2
|
)
|
(19.5
|
)
|
pts
|
|||||||||||
(Some amounts may not reconcile due to rounding.)
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||
Current
|
Ratio %/
|
Prior
|
Ratio %/
|
Total
|
Ratio %/
|
||||||||||||||||||||||
(Dollars in millions)
|
Year
|
Pt Change
|
Years
|
Pt Change
|
Incurred
|
Pt Change
|
|||||||||||||||||||||
2015
|
|||||||||||||||||||||||||||
Attritional
|
$
|
307.4
|
71.7
|
%
|
$
|
17.9
|
4.1
|
%
|
$
|
325.3
|
75.8
|
%
|
|||||||||||||||
Catastrophes
|
-
|
0.0
|
%
|
|
0.3
|
0.1
|
%
|
|
0.3
|
0.1
|
%
|
|
|||||||||||||||
Total segment
|
$
|
307.4
|
71.7
|
%
|
|
$
|
18.2
|
4.2
|
%
|
|
$
|
325.5
|
75.9
|
%
|
|
||||||||||||
2014
|
|||||||||||||||||||||||||||
Attritional
|
$
|
319.4
|
83.5
|
%
|
$
|
3.4
|
0.9
|
%
|
$
|
322.8
|
84.4
|
%
|
|||||||||||||||
Catastrophes
|
-
|
0.0
|
%
|
|
0.1
|
0.0
|
%
|
|
0.1
|
0.0
|
%
|
|
|||||||||||||||
Total segment
|
$
|
319.4
|
83.5
|
%
|
|
$
|
3.4
|
0.9
|
%
|
|
$
|
322.8
|
84.4
|
%
|
|
||||||||||||
Variance 2015/2014
|
|||||||||||||||||||||||||||
Attritional
|
$
|
(12.0
|
)
|
(11.8
|
)
|
pts
|
$
|
14.5
|
3.2
|
pts
|
$
|
2.5
|
(8.6
|
)
|
pts
|
||||||||||||
Catastrophes
|
-
|
-
|
pts
|
0.2
|
0.1
|
pts
|
0.2
|
0.1
|
pts
|
||||||||||||||||||
Total segment
|
$
|
(12.0
|
)
|
(11.8
|
)
|
pts
|
$
|
14.7
|
3.3
|
pts
|
$
|
2.7
|
(8.5
|
)
|
pts
|
||||||||||||
(Some amounts may not reconcile due to rounding.)
|
Impact of Interest Rate Shift in Basis Points
|
||||||||||||||||||||
At September 30, 2015
|
||||||||||||||||||||
(Dollars in millions)
|
-200 | -100 | 0 | 100 | 200 | |||||||||||||||
Total Market/Fair Value
|
$
|
6,059.0
|
$
|
5,916.8
|
$
|
5,766.6
|
$
|
5,607.1
|
$
|
5,442.5
|
||||||||||
Market/Fair Value Change from Base (%)
|
5.1
|
%
|
2.6
|
%
|
0.0
|
%
|
-2.8
|
%
|
-5.6
|
%
|
||||||||||
Change in Unrealized Appreciation
|
||||||||||||||||||||
After-tax from Base ($)
|
$
|
190.1
|
$
|
97.6
|
$
|
-
|
$
|
(103.7
|
)
|
$
|
(210.7
|
)
|
Impact of Percentage Change in Equity Fair/Market Values
|
||||||||||||||||||||
At September 30, 2015
|
||||||||||||||||||||
(Dollars in millions)
|
-20% | -10% | 0% | 10% | 20% | |||||||||||||||
Fair/Market Value of the Equity Portfolio
|
$
|
959.5
|
$
|
1,079.4
|
$
|
1,199.3
|
$
|
1,319.3
|
$
|
1,439.2
|
||||||||||
After-tax Change in Fair/Market Value
|
(155.9
|
)
|
(78.0
|
)
|
-
|
78.0
|
155.9
|
Exhibit Index:
|
||
Exhibit No.
|
Description
|
|
31.1
|
Section 302 Certification of Dominic J. Addesso
|
|
31.2
|
Section 302 Certification of Craig Howie
|
|
32.1
|
Section 906 Certification of Dominic J. Addesso and Craig Howie
|
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
Everest Reinsurance Holdings, Inc.
|
||||
(Registrant)
|
||||
/S/ CRAIG HOWIE
|
||||
Craig Howie
|
||||
Executive Vice President and
|
||||
Chief Financial Officer
|
||||
(Duly Authorized Officer and Principal Financial Officer)
|
||||
1. | I have reviewed this quarterly report on Form 10-Q of Everest Reinsurance 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(s) 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: |
5. | The registrant's other certifying officer(s) 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): |
/S/ DOMINIC J. ADDESSO
|
||
Dominic J. Addesso
|
||
Chairman, President and
|
||
Chief Executive Officer
|
1. | I have reviewed this quarterly report on Form 10-Q of Everest Reinsurance 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(s) 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: |
5. | The registrant's other certifying officer(s) 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): |
/S/ CRAIG HOWIE
|
||||
Craig Howie
|
||||
Executive Vice President and
|
||||
Chief Financial Officer
|
1. | The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934, and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/S/ DOMINIC J. ADDESSO | |||
Dominic J. Addesso
|
|||
Chairman, President and
|
|||
Chief Executive Officer
|
|||
/S/ CRAIG HOWIE | |||
Craig Howie
|
|||
Executive Vice President and
|
|||
Chief Financial Officer
|
|||
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