10-Q

 SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

Form 10-Q

Quarterly Report Pursuant to Section 13 or 15 (d)

of the Securities Exchange Act of 1934

                                                                                                                                                                                                                                For Quarter Ended                                                                                 Commission file number

                                                                                                                                                                                                                                 March 31, 2013                                                                                            0-5534

BALDWIN & LYONS, INC.

(Exact name of registrant as specified in its charter)

INDIANA (State or other jurisdiction of  Incorporation or organization	35-0160330 (I.R.S. Employer Identification Number)
1099 N. Meridian Street, Indianapolis, Indiana (Address of principal executive offices)	46204 (Zip Code)

Registrant's telephone number, including area code:  (317) 636-9800

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ü     No ____

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ____    Accelerated filer ü Non-accelerated filer ____

Small Reporting Company ____

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ____    No ü

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of May 1, 2013:

TITLE OF CLASS                                                              NUMBER OF SHARES OUTSTANDING

  Common Stock, No Par Value:

Class A (voting)                                                                                                2,623,109

Class B (nonvoting)                                                                                        12,290,107

Index to Exhibits located on page 26.

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PART I – FINANCIAL INFORMATION

ITEM 1  FINANCIAL STATEMENTS

Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets
(in thousands, except share data)
	March 31		December 31
	2013		2012
Assets
Investments:
Fixed maturities	$	432,621	$	445,669
Equity securities		115,377		107,582
Limited partnerships		62,668		59,954
Short-term		3,740		4,201
		614,406		617,406
Cash and cash equivalents		84,278		71,549
Accounts receivable		80,680		83,400
Reinsurance recoverable		177,482		175,191
Other assets		59,873		32,232
Current federal income taxes		-		3,246
	$	1,016,719	$	983,024
Liabilities and shareholders' equity
Reserves for losses and loss expenses	$	456,246	$	455,454
Reserves for unearned premiums		33,055		37,273
Short-term borrowings		10,000		10,000
Accounts payable and accrued expenses		145,299		125,007
Current federal income taxes		2,796		-
Deferred federal income taxes		10,751		8,578
		658,147		636,312
Shareholders' equity:
Common stock-no par value:
Class A voting -- authorized 3,000,000 shares;
outstanding -- 2013 - 2,623,109; 2012 - 2,623,109		112		112
Class B non-voting -- authorized 20,000,000 shares;
outstanding -- 2013 - 12,290,107; 2012 - 12,290,035		524		524
Additional paid-in capital		50,264		50,275
Unrealized net gains on investments		36,358		35,467
Foreign exchange adjustment		1,790		1,976
Retained earnings		269,524		258,358
		358,572		346,712
	$	1,016,719	$	983,024

See notes to condensed consolidated financial statements.

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Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Statements of Operations
(in thousands, except per share data)
	Three Months Ended
	March 31
	2013			2012
Revenues
Net premiums earned	$	61,098		$	61,551
Net investment income		2,410			2,422
Commissions and other income		1,383			1,506
Net realized gains on investments, excluding
impairment losses		14,353			5,381
Total other-than-temporary impairment losses on investments		(6	)		-
Net realized gains on investments		14,347			5,381
		79,238			70,860
Expenses
Losses and loss expenses incurred		34,533			34,904
Other operating expenses		22,026			18,957
		56,559			53,861
Income before federal income taxes		22,679			16,999
Federal income taxes		7,736			5,493
Net income	$	14,943		$	11,506
Per share data:
Basic and diluted earnings	$	1.00		$	.78
Dividends paid to shareholders	$	.25		$	.25
Reconciliation of shares outstanding:
Average shares outstanding - basic		14,878			14,826
Dilutive effect of share equivalents		33			16
Average shares outstanding - diluted		14,911			14,842

See notes to condensed consolidated financial statements.

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Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Statements of Comprehensive Income
(in thousands)
	Three Months Ended
	March 31
	2013			2012
Net income	$	14,943		$	11,506
Other comprehensive income, net of tax:
Unrealized net gains on securities:
Unrealized net gains arising during the period		7,803			7,639
Less: reclassification adjustment for net gains
included in net income		6,912			(26	)
		891			7,665
Foreign currency translation adjustments		(186	)		204
Other comprehensive income		705			7,869
Comprehensive income	$	15,648		$	19,375

See notes to condensed consolidated financial statements.

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Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
(in thousands)
	Three Months Ended
	March 31
	2013			2012
Net cash provided by operating activities	$	12,304		$	11,666
Investing activities:
Purchases of available-for-sale investments		(92,439	)		(104,714	)
Purchases of limited partnership interests		-			(1,538	)
Proceeds from sales or maturities
of available-for-sale investments		113,044			78,829
Net sales of short-term investments		461			382
Other investing activities		(16,678	)		3,552
Net cash provided by (used in) investing activities		4,388			(23,489	)
Financing activities:
Dividends paid to shareholders		(3,777	)		(3,749	)
Net cash used in financing activities		(3,777	)		(3,749	)
Effect of foreign exchange rates on cash and cash equivalents		(186	)		204
Increase (decrease) in cash and cash equivalents		12,729			(15,368	)
Cash and cash equivalents at beginning of period		71,549			89,726
Cash and cash equivalents at end of period	$	84,278		$	74,358

See notes to condensed consolidated financial statements.

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Notes to Condensed Unaudited Consolidated Financial Statements

(All dollar amounts presented in these notes are in thousands, except per share data)

(1) Summary of Significant Accounting Policies

Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included.  Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ended December 31, 2013.  Interim financial statements should be read in conjunction with the Company’s annual audited financial statements and other disclosures included in the Company’s most recent Form 10-K.

Investments:  Carrying amounts for fixed maturity securities represent fair value and are based on quoted market prices, where available, or broker/dealer quotes for specific securities where quoted market prices are not available.  Equity securities are carried at quoted market prices (fair value).  The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to record its proportionate share of the limited partnership’s net income.  To the extent that the limited partnership investees include both realized and unrealized investment gains or losses in the determination of net income or loss, then the Company would also recognize, through its consolidated statements of operations, its proportionate share of the investee’s unrealized as well as realized investment gains or losses.

Other investments, if any, are carried at either fair value or cost, depending on the nature of the investment.  Short-term investments are carried at cost which approximates their fair values.

Realized gains and losses on disposals of investments are determined by specific identification of the cost of investments sold and are included in income.  All fixed maturity and equity securities are considered to be available for sale; the related unrealized net gains or losses (net of applicable tax effect) are reflected directly in shareholders’ equity.  Included within available for sale fixed maturity securities are insurance-linked securities and convertible debt securities.  The changes in fair values of insurance-linked securities and portions of the changes in fair values of convertible debt securities are reflected as a component of net realized gains (losses).

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

With respect to other–than-temporary impairment of investments, if a fixed maturity security is in an unrealized loss position and the Company has the intent to sell the fixed maturity security, or it is more likely than not that the Company will have to sell the fixed maturity security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to net realized losses on investments in the consolidated statements of operations.   For impaired fixed maturity securities that the Company does not intend to sell or it is more likely than not that the Company will not have to sell such securities, but the Company expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in net realized losses on investments in the consolidated statements of operations and the non-credit component of the other-than-temporary impairment is recognized directly in shareholders’ equity (accumulated other comprehensive income).

The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security.  Furthermore, unrealized losses caused by non-credit related factors related to fixed maturity securities for which the Company expects to fully recover the amortized cost basis continue to be recognized in accumulated other comprehensive income.

The unrealized net gains or losses (net of applicable tax effect) related to equity securities are reflected directly in shareholders’ equity, unless a decline in value is determined to be other-than-temporary, in which case the loss is charged to income.  In determining if and when a decline in market value below cost is other-than-temporary, an objective analysis is made of each individual security where current market value is less than cost.  For any equity security where the unrealized loss exceeds 20% of original or adjusted cost, and where that decline has existed for a period of at least six months, the decline is treated as an other-than-temporary impairment, subject to an evaluation as to possible future recovery.  Additionally, the Company takes into account any known subjective information in evaluating for impairment without consideration to the Company’s quantitative criteria defined above.

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

(2) Investments:

The following is a summary of available-for-sale securities at March 31, 2013 and December 31, 2012:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
March 31, 2013
Fixed maturities
U.S. government obligations	$	75,562	$	75,575	$	81	$	(94	)	$	(13	)
Residential mortgage-backed securities		23,190		21,611		1,692		(113	)		1,579
Commercial mortgage-backed securities		12,444		11,663		806		(25	)		781
States and municipal obligations		179,854		179,180		784		(110	)		674
Corporate securities		119,717		117,988		2,861		(1,132	)		1,729
Foreign government obligations		21,854		21,641		300		(87	)		213
Total fixed maturities		432,621		427,658		6,524		(1,561	)		4,963
Equity securities:
Financial institutions		13,205		5,618		7,627		(40	)		7,587
Industrial & miscellaneous		102,172		58,786		44,261		(875	)		43,386
Total equity securities		115,377		64,404		51,888		(915	)		50,973
Total	$	547,998	$	492,062	$	58,412	$	(2,476	)		55,936
							Applicable federal income taxes				(19,578	)
							Net unrealized gains - net of tax			$	36,358
December 31, 2012
Fixed maturities
U.S. government obligations	$	70,742	$	70,720	$	43	$	(21	)	$	22
Residential mortgage-backed securities		25,040		23,954		1,218		(132	)		1,086
Commercial mortgage-backed securities		11,828		11,006		849		(27	)		822
State and municipal obligations		194,865		194,258		757		(150	)		607
Corporate securities		120,596		118,574		2,923		(901	)		2,022
Foreign government obligations		22,598		22,047		602		(51	)		551
Total fixed maturities		445,669		440,559		6,392		(1,282	)		5,110
Equity securities:
Financial institutions		12,394		5,925		6,542		(73	)		6,469
Industrial & miscellaneous		95,188		52,202		44,568		(1,582	)		42,986
Total equity securities		107,582		58,127		51,110		(1,655	)		49,455
Total	$	553,251	$	498,686	$	57,502	$	(2,937	)		54,565
							Applicable federal income taxes				(19,098	)
							Net unrealized gains - net of tax			$	35,467

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

The Company has six other-than-temporarily impaired fixed maturity securities at March 31, 2013 compared to five such securities at December 31, 2012.  Four of these investments have other-than-temporary impairment losses recognized in accumulated other comprehensive income at both March 31, 2013 and December 31, 2012.

The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at March 31, 2013 and December 31, 2012, respectively, the aggregate fair value and gross unrealized loss categorized by the duration those securities have been continuously in an unrealized loss position.

	March 31, 2013							December 31, 2012
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		176	$	65,966	$	(792	)		170	$	90,607	$	(483	)
Greater than 12 months		52		24,190		(769	)		58		19,283		(799	)
Total fixed maturities		228		90,156		(1,561	)		228		109,890		(1,282	)
Equity securities:
12 months or less		24		14,247		(896	)		20		6,955		(842	)
Greater than 12 months		2		244		(19	)		11		6,640		(813	)
Total equity securities		26		14,491		(915	)		31		13,595		(1,655	)
Total fixed maturity and equity securities		254	$	104,647	$	(2,476	)		259	$	123,485	$	(2,937	)

The fair value and the cost or amortized cost of fixed maturity investments at March 31, 2013, by contractual maturity, are shown below.  Actual maturities may ultimately differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties. Pre-refunded municipal bonds are classified based on their pre-refunded call dates.

	Fair Value		Cost or Amortized Cost
One year or less	$	145,477	$	144,847
Excess of one year to five years		207,061		205,716
Excess of five years to ten years		28,331		27,851
Excess of ten years		2,584		2,423
Total maturities		383,453		380,837
Asset-backed securities		49,168		46,821
	$	432,621	$	427,658

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

Following is a summary of the components of net realized gains on investments for the periods presented in the accompanying consolidated statements of operations.

	Three Months Ended
	March 31
	2013			2012
Fixed maturities:
Gross gains	$	1,419		$	550
Gross losses		(1,337	)		(971	)
Net realized gains (losses)		82			(421	)
Equity securities:
Gross gains		11,712			524
Gross losses		(1,160	)		(142	)
Net realized gains		10,552			382
Limited partnerships - net gain		3,713			5,420
Totals	$	14,347		$	5,381

Net realized gains activity for investments, as shown in the previous table, are further detailed as follows:

	Three Months Ended
	March 31
	2013			2012
Realized net gains (losses) on the disposal of securities	$	9,244		$	(96	)
Mark-to-market adjustment		210			57
Equity in gains of limited partnership
investments - realized and unrealized		3,713			5,420
Impairment:
Write-downs based upon objective criteria		(6	)		-
Recovery of prior write-downs
upon sale or disposal		1,186			-
Totals	$	14,347		$	5,381

The mark-to-market adjustments in the table above represent the changes in fair value of (1) options embedded in convertible debt securities and (2) insurance-linked securities held by the Company.

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

The income from limited partnerships for the quarter ending March 31, 2013 includes an estimated $2,733 of net unrealized gains reported to the Company as part of the underlying assets of the various limited partnerships.  The value of limited partnerships at March 31, 2013 includes approximately $7,173 of net unrealized gains reported to the Company as part of the underlying assets of the various limited partnerships. Shareholders’ equity at March 31, 2013 includes approximately $22,114, net of deferred federal income taxes, of earnings undistributed by limited partnerships.

(3) Reinsurance:

The following table summarizes the Company’s transactions with reinsurers for the 2013 and 2012 comparative periods.

	2013		2012
Quarter ended March 31:
Premiums ceded to reinsurers	$	27,012	$	24,748
Losses and loss expenses
ceded to reinsurers		22,134		7,804
Commissions from reinsurers		4,037		3,835

(4) Reportable Segments:

The Company has two reportable business segments in its operations:  Property and Casualty Insurance and Reinsurance.

The Property and Casualty Insurance segment provides multiple line insurance coverage primarily to fleet transportation companies as well as to independent contractors who contract with fleet transportation companies.  In addition, the Company provides private passenger automobile products to individuals, and commercial multi-peril and professional liability products on a selective basis.

The Reinsurance segment accepts property and casualty cessions from other insurance companies as well as retrocessions from selected reinsurance companies, principally reinsuring against catastrophes.  In addition, the Reinsurance segment accepts selected professional liability cessions from other insurance companies.

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

The following table provides certain revenue and profit and loss information for each reportable segment.  All amounts presented are computed based upon U.S. generally accepted accounting principles.  Segment profit for Property and Casualty Insurance includes the direct marketing agency operations conducted by the parent company for this segment and is computed after elimination of inter-company commissions.

	2013						2012
	Direct and Assumed Premium Written		Net Premium Earned		Segment Profit		Direct and Assumed Premium Written		Net Premium Earned		Segment Profit
Three months ended March 31:
Property and Casualty Insurance	$	70,189	$	47,860	$	5,234	$	75,226	$	47,909	$	6,933
Reinsurance		13,702		13,238		4,770		14,827		13,642		6,137
Totals	$	83,891	$	61,098	$	10,004	$	90,053	$	61,551	$	13,070

The following table reconciles reportable segment income to the Company’s consolidated income before federal income taxes.

	Three Months Ended
	March 31
	2013			2012
Profit (Loss):
Segment profit	$	10,004		$	13,070
Net investment income		2,410			2,422
Net gains on investments		14,347			5,381
Corporate expenses		(4,082	)		(3,874	)
Income before federal income taxes	$	22,679		$	16,999

Segment profit includes both net premiums earned and fees and other income associated with the business conducted by the segment.

Management does not identify or allocate assets to reportable segments when evaluating segment performance and depreciation expense is not material for any of the reportable segments.

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

(5) Debt:

The Company maintains a revolving line of credit with a $30,000 limit and an expiration date of September 23, 2014.  Interest on this line of credit is referenced to LIBOR and can be fixed for periods of up to one year at the Company’s option.  Outstanding drawings on this line of credit were $10,000 as of March 31, 2013 and December 31, 2012.  At March 31, 2013, the effective interest rate was 1.10%.  The Company has $20,000 remaining unused under the line of credit at March 31, 2013. 

(6) Taxes:

As of March 31, 2013, the Company’s 2009 and subsequent tax years remain subject to examination by the IRS.  The effective rate differs from the normal statutory rate primarily as a result of tax-exempt investment income.

(Space Intentionally Left Blank)

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

(7) Fair Value:

Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis:

As of March 31, 2013:
Description	Total		Level 1		Level 2		Level 3
U.S. government obligations	$	75,562	$	75,562	$	-	$	-
Residential mortgage-backed securities		23,190		-		23,190		-
Commercial mortgage-backed securities		12,444		-		12,444		-
State and municipal obligations		179,854		-		179,854		-
Corporate securities		117,835		-		107,362		10,473
Options embedded in convertible securities		1,882		-		1,882		-
Foreign government obligations		21,854		-		21,854		-
Total fixed maturities		432,621		75,562		346,586		10,473
Equity securities		115,377		115,377		-		-
Short term		3,740		3,740		-		-
Cash equivalents		80,032		-		80,032		-
	$	631,770	$	194,679	$	426,618	$	10,473

As of December 31, 2012:
Description	Total		Level 1		Level 2		Level 3
U.S. government obligations	$	70,742	$	70,742	$	-	$	-
Residential mortgage-backed securities		25,040		-		25,040		-
Commercial mortgage-backed securities		11,828		-		11,828		-
State and municipal obligations		194,865		-		194,865		-
Corporate securities		118,945		-		107,263		11,682
Options embedded in convertible securities		1,651		-		1,651		-
Foreign government obligations		22,598		-		22,598		-
Total fixed maturities		445,669		70,742		363,245		11,682
Equity securities		107,582		107,582		-		-
Short term		4,201		4,201		-		-
Cash equivalents		64,450		-		64,450		-
	$	621,902	$	182,525	$	427,695	$	11,682

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

Level inputs, as defined by FASB Fair Value Measurements, are as follows:

Level Input:	Input Definition:
Level 1	Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
Level 2	Inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market data at the measurement date.
Level 3	Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The following methods, assumptions and inputs were used to determine the fair value of each class of the following assets recorded at fair value in the consolidated balance sheets:

Cash equivalents:  Cash equivalents primarily consist of highly rated money market funds purchased at par value with specified yield rates. Due to underlying assets of these funds, we designate all cash equivalents as Level 2.

Fixed maturities: Fair values of fixed maturities are based on quoted market prices, where available. These fair values are obtained primarily from third party pricing services, which generally use Level 1 or Level 2 inputs for the determination of fair value to facilitate fair value measurements and disclosures. U.S. government obligations represent Level 1 securities, while Level 2 securities primarily include corporate securities, states and municipal obligations, foreign government obligations, and mortgage-backed securities. For securities not actively traded, the third party pricing services may use quoted market prices of comparable instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include, but are not limited to, broker quotes, benchmark yields, credit spreads, default rates and prepayment speeds.

Equity securities: Fair values of equity securities are designated as Level 1 and are based on quoted market prices.

The Level 3 assets consist of an investment portfolio of insurance-linked securities.  The insurance-linked securities are valued using the average of estimated market quotes from multiple insurance-linked securities brokers.  The broker quotes include Level 3 inputs which are significant to the valuation of the insurance-linked securities and vary by 0-3% from each other. There was no Level 3 sales, no transfers into Level 3 and no transfers out of Level 3 during 2013 or 2012.  A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs is as follows for the three months ended March 31, 2013 and for the year ended December 31, 2012:

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

	2013			2012
Beginning of period balance	$	11,682		$	17,050
Net realized and unrealized gain included in
earnings or changes in net assets		403			1,653
Purchases		258			400
Settlements		(1,870	)		(7,421	)
End of period balance	$	10,473		$	11,682

There were no transfers of assets between Level 1 and Level 2 during the three months ended March 31, 2013 and 2012.  Transfers between levels, if any, are recorded as of the beginning of the reporting period.

In addition to the preceding disclosures on assets recorded at fair value in the consolidated balance sheets, FASB guidance also requires the disclosure of fair values for certain other financial instruments for which it is practicable to estimate fair value, whether or not such values are recognized in the consolidated balance sheets.

Non-financial instruments such as real estate, property and equipment, other assets, deferred income taxes and intangible assets, and certain financial instruments such as reserves for losses and loss expenses are excluded from the fair value disclosures.  Therefore, the fair value amounts cannot be aggregated to determine the Company’s underlying economic value.

The carrying amounts reported in the consolidated balance sheets for cash, accounts receivables, reinsurance recoverable, notes receivable, accounts payable and accrued expenses, income taxes receivable or payable and unearned premiums approximate fair value because of the short term nature of these items.  These assets and liabilities are not included in the table below.

The following methods, assumptions and inputs were used to estimate the fair value of each class of financial instrument:

Limited partnerships: The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to carry the investment at its proportionate share of the limited partnership’s equity.   The underlying assets of the Company’s investments in limited partnerships are carried at fair value, and, therefore, the Company’s carrying value of limited partnerships approximates fair value.  As these investments are not actively traded and the corresponding inputs are based on data provided by the investees, they are classified as Level 3.

Short-term borrowings: The fair value of our short-term borrowings is based on quoted market prices for the same or similar debt, or, if no quoted market prices are available, on the current market interest rates available to us for debt of similar terms and remaining maturities.

- 16 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company’s consolidated balance sheets at March 31, 2013 and December 31, 2012 are as follows:

	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
March 31, 2013
Assets:   Limited partnerships	$	62,668	$	-	$	-	$	62,668	$	62,668
Liabilities:   Short-term borrowings		10,000		-		10,000		-		10,000
December 31, 2012
Assets:   Limited partnerships		59,954		-		-		59,954		59,954
Liabilities:   Short-term borrowings		10,000		-		10,000		-		10,000

(8) Restricted Stock:

The Company grants shares of class B restricted stock to the Company’s outside directors as their annual retainer compensation.  The shares are distributed on the vesting date, one year following the date of grant, and had a total value of $440 for each of the annual periods presented.  The table below provides detail of the stock issuances for 2011 and 2012:

Effective	Number of Shares		Vesting	Service	Value
Date	Issued		Date	Period	Per Share
5/10/2011		19,558	5/10/2012	7/1/2011 - 6/30/2012	$	22.50
5/8/2012		20,119	5/8/2013	7/1/2012 - 6/30/2013	$	21.87

Compensation expense related to the above stock grant is recognized over the period in which the directors render the services.

Effective February 4, 2013, the Company issued 52,389 shares of class B restricted stock to certain of the Company’s executives.  The restricted shares were paid solely in the Company’s class B stock.  The restricted shares represent a portion of compensation to certain executives under the Company’s 2012 Executive Incentive Bonus Plan.  The restricted shares will vest ratably over a three year period from the date of grant and are accelerated for retirement eligible recipients due to the non-substantive post-grant date vesting clause per ASC 715, Compensation-Retirement Benefits.  Restricted stock was valued based on the closing price of the stock on the day the award was granted.  Each share was valued at $23.69 per share representing a total value of $1,241.  Non-vested restricted shares will be forfeited should an executive’s employment terminate for any reason other than death, disability, or retirement as defined by the Compensation Committee.

- 17 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

(9) Commitments and Contingencies:

In the ordinary, regular and routine course of their business, the Company and its insurance Subsidiaries are frequently involved in various matters of litigation relating principally to claims for insurance coverage provided.  No currently pending matter is deemed by management to be material to the Company.

In February, 2013, the Company purchased a building in Carmel, Indiana to serve as its future home office.  No external funds were utilized for this purchase.  Rather, short-term investments were and will be liquidated to provide for the purchase and necessary renovations which are expected to be completed in late 2013.  A total of $25 million is expected to be capitalized for the acquisition of the home office building.

(10) Accumulated Other Comprehensive Income:

The following table illustrates changes in accumulated other comprehensive income by component for the quarter ending March 31, 2013:

				Unrealized
				holding gains on
	Foreign			available-for-sale
	Currency			securities			Total
Beginning balance	$	1,976		$	35,467		$	37,443
Other comprehensive income
before reclassifications		(186	)		7,803			7,617
Amounts reclassified from
accumulated other
comprehensive income		-			(6,912	)		(6,912	)
Net current-period other
comprehensive income		(186	)		891			705
Ending balance	$	1,790		$	36,358		$	38,148

 (11) Subsequent Events:

We have evaluated subsequent events for recognition or disclosure in the consolidated financial statements filed on Form 10-Q with the SEC and no events have occurred during the period which require recognition or disclosure.

- 18 -

ITEM 2  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

              AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

The Company generally experiences positive cash flow from operations resulting from the fact that premiums are collected on insurance policies in advance of the disbursement of funds in payment of claims.  Operating costs of the property/casualty insurance subsidiaries, other than loss and loss expense payments and commissions paid to related agency companies, generally average less than 30% of premiums earned and the remaining amount is available for investment for varying periods of time pending the settlement of claims relating to the insurance coverage provided. The Company’s cash flow relating to premiums is significantly affected by reinsurance programs in effect from time-to-time whereby the Company cedes both premium and risk to other insurance and reinsurance companies.  These programs vary significantly among products.

The Company has generated positive cash flow for 15 consecutive quarters.  For the first three months of 2013, the Company experienced positive cash flow from operations totaling $12.3 million, which compares to positive cash flow from operations of $11.7 million generated during the first three months of 2012.  The increase in cash flow from the 2012 period is primarily due to increased premium collections.

The Company's investment philosophy has emphasized the purchase of relatively short-term instruments with maximum quality and liquidity.  The average life of the Company's fixed income (bond and short-term investment) portfolio, using contractual maturities applied to par value, was 3.47 years at March 31, 2013, which is substantially shorter than the average life of the Company’s liabilities.

Financing activity for the first three months of 2013 included regular dividend payments to shareholders of $3.8 million ($.25 per share).

The Company’s assets at March 31, 2013 included $80.0 million in investments classified as cash equivalents that were readily convertible to cash without significant market penalty.  An additional $148.8 million of fixed maturity investments (at par) will mature within the twelve-month period following March 31, 2013.   The Company believes that these liquid investments are more than sufficient to provide for projected claim payments and operating cost demands.

Consolidated shareholders’ equity is composed largely of GAAP shareholders’ equity of the insurance subsidiaries.  As such, there are statutory restrictions on the transfer of substantial portions of this equity to the parent company.  At March 31, 2013, $51.7 million may be transferred by dividend or loan to the parent company during the remainder of 2013 without approval by, or prior notification to, regulatory authorities.  An additional $212.7 million of shareholder’s equity of the insurance subsidiaries could, theoretically, be advanced or loaned to the parent company with prior notification to, and approval from, regulatory authorities, although it is unlikely that transfers of this size would be practical.  The Company believes that these restrictions pose no material liquidity concerns to the Company.  The Company also believes that the financial strength and stability of the subsidiaries would permit ready access by the parent company to short-term and long-term sources of credit.  The parent company had cash and marketable securities valued at $5.0 million at March 31, 2013.

- 19 -

The Company’s annualized net premium writing to surplus ratio for the first three months of 2013 was approximately 67%.  Regulatory guidelines generally allow for writings of between 100% and 300% ofsurplus, depending on the line of business.  Accordingly, the Company could increase net premium writings significantly with no need to raise additional capital.  Further, the insurance subsidiaries’ individual capital levels are several times higher than the minimum amounts designated by the National Association of Insurance Commissioners.

Results of Operations

Comparison of First Quarter, 2013 to First Quarter, 2012

Direct and assumed premiums written during the first quarter of 2013 decreased $6.2 million (6.8%), while net premiums earned decreased only $0.5 million (0.7%), as compared to the same period of 2012.  The Company’s Property and Casualty Insurance segment reported a decrease in premium written of 6.7% and a decrease in earned premiums of 0.1% while the Reinsurance segment reported a decrease in premium written of 7.6% and a decrease in premium earned of 3.0%.  In the Property and Casualty Insurance segment, direct and assumed premiums written were impacted principally by the Company’s planned and announced strategic reduction in property exposure, including withdrawal from the Florida commercial multi-peril market, begun in mid-2012 and, to a lesser degree, lower personal automobile premium resulting from rate increases implemented during 2012.  These decreases were partially offset by increased premium from core fleet transportation products as well as an increase in the professional liability book of business.  The disproportionate impact of the changes on premium written compared to earned is reflective of the normal differences in the recognition of earned premium compared to written as well as the differences in ceding rates on the mix of business inforce.  The decrease to the Reinsurance segment is also associated with strategic reduction in global catastrophe risk implemented effective January 1, 2012.  The following table provides information regarding premiums written and earned for each segment for the quarter ended March 31 (dollars in thousands):

- 20 -

	Direct and Assumed Premium Written		Net Premium Written		Net Premium Earned
2013
Property & Casualty Insurance	$	70,189	$	45,465	$	47,860
Reinsurance		13,702		13,040		13,238
Totals	$	83,891	$	58,505	$	61,098
2012
Property & Casualty Insurance	$	75,226	$	49,707	$	47,909
Reinsurance		14,827		14,248		13,642
Totals	$	90,053	$	63,955	$	61,551

Premium ceded to reinsurers on insurance business produced by the Property and Casualty Insurance segment averaged 35.2% of premium written for the current quarter compared to 33.9% in the 2012 first quarter, with the increase reflective of routine changes in treaty structures as well as the impact of the proportion of new products which are ceded at generally higher proportions than legacy products.

Net investment income, before tax, during the first quarter of 2013 was slightly lower than the first quarter of 2012 due primarily to lower available interest rates for bonds.  Pre-tax bond yields averaged 2.0% during the current quarter compared to 2.2% for the prior year period.  In addition, receipt of dividends on equity securities was lower in the 2013 quarter.  Overall after-tax yields decreased from 1.6% to 1.5% while average invested funds, bolstered by positive cash flow, were nearly 6% higher.

The first quarter 2013 net realized investment gains of $14.3 million resulted primarily from $9.2 million in gains reported from direct trading, $3.7 million reported by limited partnerships and $1.4 million of mark-to-market and other-than-temporary impairment adjustments.  Comparative first quarter 2012 overall net realized investment gains were $5.4 million, consisting almost entirely of limited partnership results.  Investment gains and losses result from decisions regarding the sale of individual securities and the change in total value of limited partnerships and, as such, should not be expected to be consistent from period to period.

Losses and loss expenses incurred during the first quarter of 2013 were generally consistent with the prior year period showing just a $0.4 million decrease.  The loss ratios for each segment were as follows:

	2013			2012
Property and Casualty Insurance		65.7	%		65.4	%
Reinsurance		23.2			26.0
Total		56.5			56.7

- 21 -

Other operating expenses, for the first quarter of 2013, increased $3.1 million, or 16.2%, from the first quarter of 2012.  The ratio of consolidated other operating expenses to operating revenue was 34.0% during the first quarter of 2013 compared to 29.0% for the 2012 first quarter.  This increase was driven by (1) contingent profit accruals related to the excellent property reinsurance results, (2) increased training and administrative costs associated with the Company’s expanded claims operations and (3) the addition to staff in anticipation of expansion of existing product lines.

The effective federal tax rate on consolidated income for the first quarter of 2013 was 34.1%.  The effective rate differs from the normal statutory rate primarily as a result of tax-exempt investment income.

As a result of the factors mentioned above, net income increased $3.4 million during the first quarter of 2013 as compared to the 2012 period.

Forward-Looking Information

Any forward-looking statements in this report, including without limitation, statements relating to the Company’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following:  (i) the Company’s plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company;  (ii) the Company’s business is highly competitive and the entrance of new competitors into or the expansion of the operations by existing competitors in the Company’s markets and other changes in the market for insurance products could adversely affect the Company’s plans and results of operations;  (iii) other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission; and (iv) other risks and factors which may be beyond the control or foresight of the Company.  Readers are     encouraged to review the Company’s annual report for its full statement regarding forward-looking information.

Critical Accounting Policies

There have been no changes in the Company's critical accounting policies as disclosed in the Form 10-K filed for the year ended December 31, 2012.

- 22 -

Concentrations of Credit Risk

The insurance subsidiaries cede portions of their gross premiums to numerous reinsurers under quota share and excess of loss treaties as well as facultative placements.  These reinsurers assume commensurate portions of the risk of loss covered by the contracts.  As losses are reported and reserved, portions of the gross losses attributable to reinsurers are established as receivable assets and losses incurred are reduced.  At March 31, 2013, amounts due from reinsurers on paid and unpaid losses, are estimated to total approximately $172 million.  Of this total, approximately $60 million (35%) represents the Company’s provision for incurred but not reported losses and loss adjustment expenses attributable to reinsurers.  Because of the large policy limits reinsured by the Company, the ultimate amount of incurred but not reported losses and loss adjustment expenses attributable to reinsurers could vary significantly from the estimate provided; however, absent the inability to collect from reinsurers, such variance would not result in changes in net claim losses incurred by the Company.

At March 31, 2013, limited partnership investments include approximately $39.4 million consisting of three partnerships which are managed by organizations in which certain of the Company’s directors are officers, directors, general partners or owners.  Each of these investments contains profit sharing agreements to the affiliated organizations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our exposure to market risk since the disclosure in our Form 10-K for the year ended December 31, 2012.

ITEM 4. CONTROLS AND PROCEDURES

(a)  The Corporation's Chief Executive Officer and Chief Financial Officer evaluated the disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report.  Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Corporation's disclosure controls and procedures are effective.

(b)  There were no significant changes in the Corporation's internal control over financial reporting identified in connection with the foregoing evaluation that occurred during the Corporation's last fiscal quarter that have affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 5. OTHER INFORMATION

Nothing to report.

- 23 -

ITEM 6 (a)  EXHIBITS

Number and caption from Exhibit

Table of Regulation S-K Item 601                                                                                                 Exhibit No.

(31.1)           Certification of CEO                                                                           EXHIBIT 31.1

pursuant to Section 302 of the                                                                           Certification of CEO

Sarbanes-Oxley Act of 2002

(31.2)           Certification of CFO                                                                           EXHIBIT 31.2

pursuant to Section 302 of the                                                                           Certification of CFO

Sarbanes-Oxley Act of 2002

(32)           Certification of CEO and CFO                                                                           EXHIBIT 32

pursuant to 18 U.S.C. 1350, as                                                                           Certification of CEO and CFO

adopted pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

- 24 -

SIGNATURES

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

                                       BALDWIN & LYONS, INC.

Date     May 7, 2013                                                                By  /s/ Joseph J. DeVito

Joseph J. DeVito, CEO and President

Date     May 7, 2013                                                                By   /s/ G. Patrick Corydon 

G. Patrick Corydon,

Executive Vice President – Finance

(Principal Financial and

  Accounting Officer)

- 25 -

BALDWIN & LYONS, INC.

Form 10-Q for the fiscal quarter ended March 31, 2013

                                                                             INDEX TO EXHIBITS

Begins on sequential

page number of Form

Exhibit Number                                                                             10-Q           _

EXHIBIT 31.1                                                                               27

Certification of CEO

pursuant to Section 302 of the

Sarbanes-Oxley Act

EXHIBIT 31.2                                                                               29

Certification of CFO

pursuant to Section 302 of the

Sarbanes-Oxley Act

EXHIBIT 32                                                                                31

Certification of CEO and CFO

pursuant to 18 U.S.C. 1350,

as adopted pursuant to Section

906 of the Sarbanes-Oxley Act

- 26 -

EX-31.1

Exhibit 31.1

CERTIFICATION

PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Joseph J. DeVito, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Baldwin & Lyons, Inc.;

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

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

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

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

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

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

- 27 -

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

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

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

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

Date: May 7, 2013

/s/ Joseph J. DeVito

Chief Executive Officer and President

- 28 -

EX-31.2

Exhibit 31.2

CERTIFICATION

PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, G. Patrick Corydon, certify that:

1. I have reviewed this report on Form 10-Q of Baldwin & Lyons, Inc.;

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

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

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

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

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

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

- 29 -

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

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

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

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

Date:  May 7, 2013

/s/ G. Patrick Corydon

Executive Vice President and Chief Financial Officer

- 30 -

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Baldwin & Lyons, Inc. (the "Company") on Form 10-Q for the quarterly period ending March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Joseph J. DeVito, Chief Executive Officer and President of the Company, and G. Patrick Corydon, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) 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.

May 7, 2013

/s/ Joseph J. DeVito

Chief Executive Officer and President

/s/ G. Patrick Corydon

Executive Vice President and Chief Financial Officer

- 31 -

XML

Restricted Stock (Details) (USD $) In Thousands, except Share data, unless otherwise specified	1 Months Ended		3 Months Ended		12 Months Ended		0 Months Ended
	May 31, 2012	May 31, 2011	Mar. 31, 2013	Mar. 31, 2013 Restricted Stock Units (RSUs) [Member]	Dec. 31, 2012 Restricted Stock Units (RSUs) [Member] Class B [Member] Outside Director [Member]	Dec. 31, 2011 Restricted Stock Units (RSUs) [Member] Class B [Member] Outside Director [Member]	Feb. 04, 2013 Restricted Stock Units (RSUs) [Member] Class B [Member] Executives [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares distribution period from grant date			1 year
Total value of shares issued					$ 440	$ 440	$ 1,241
Shares issued (in shares)							52,389
Value of each share issued (in dollars per share)	$ 21.87	$ 22.50					$ 23.69
Summary of stock Issuances [Abstract]
Shares granted (in shares)	20,119	19,558
Vesting Date	May 08, 2013	May 10, 2012
Service Period	7/1/2012 - 6/30/2013	7/1/2011 - 6/30/2012
Period restricted stocks will vest ratably from date of grant				3 years

XML

Summary of Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2013
Summary of Significant Accounting Policies [Abstract]
Percentage of decline on cost of securities treated as other-than-temporary impairment (in hundredths)	20.00%
Period of decline on the cost of equity securities that will be considered other-than-temporary impairment	6 months

XML

Reinsurance

3 Months Ended

Mar. 31, 2013

Reinsurance [Abstract]

Reinsurance

(3) Reinsurance:

The following table summarizes the Company's transactions with reinsurers for the 2013 and 2012 comparative periods.

	2013		2012
Quarter ended March 31:
Premiums ceded to reinsurers	$	27,012	$	24,748
Losses and loss expenses
ceded to reinsurers		22,134		7,804
Commissions from reinsurers		4,037		3,835

XML

Debt (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Debt [Abstract]
Revolving line of credit limit	$ 30,000
Line of credit maturity date	Sep. 23, 2014
Period of fixed interest on line of credit at company's options	1 year
Outstanding drawings on line of credit	10,000	10,000
Effective interest rate (in hundredths)	1.10%
Remaining unused amount under line of credit	$ 20,000

XML

Reportable Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 Segment	Mar. 31, 2012
Reportable Segments [Abstract]
Number of reportable segments	2
Segment Reporting Information [Line Items]
Direct and Assumed Premium Written	$ 83,891	$ 90,053
Net Premiums Earned	61,098	61,551
Segment Profit	10,004	13,070
Reconciliation from segment totals to consolidated [Abstract]
Segment profit	10,004	13,070
Net investment income	2,410	2,422
Net gains on investments	14,347	5,381
Corporate expenses	(4,082)	(3,874)
Income before federal income taxes	22,679	16,999
Property and Casualty Insurance [Member]
Segment Reporting Information [Line Items]
Direct and Assumed Premium Written	70,189	75,226
Net Premiums Earned	47,860	47,909
Segment Profit	5,234	6,933
Reconciliation from segment totals to consolidated [Abstract]
Segment profit	5,234	6,933
Reinsurance [Member]
Segment Reporting Information [Line Items]
Direct and Assumed Premium Written	13,702	14,827
Net Premiums Earned	13,238	13,642
Segment Profit	4,770	6,137
Reconciliation from segment totals to consolidated [Abstract]
Segment profit	$ 4,770	$ 6,137

XML

Fair Value (Details) (Recurring [Member], USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
US government obligations	$ 75,562	$ 70,742
Residential mortgage-backed securities	23,190	25,040
Commercial mortgage-backed securities	12,444	11,828
State and municipal obligations	179,854	194,865
Corporate securities	117,835	118,945
Options embedded in convertible securities	1,882	1,651
Foreign government obligations	21,854	22,598
Total fixed maturities	432,621	445,669
Equity securities	115,377	107,582
Short term	3,740	4,201
Cash equivalents	80,032	64,450
Total fair value	631,770	621,902
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
US government obligations	75,562	70,742
Residential mortgage-backed securities	0	0
Commercial mortgage-backed securities	0	0
State and municipal obligations	0	0
Corporate securities	0	0
Options embedded in convertible securities	0	0
Foreign government obligations	0	0
Total fixed maturities	75,562	70,742
Equity securities	115,377	107,582
Short term	3,740	4,201
Cash equivalents	0	0
Total fair value	194,679	182,525
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
US government obligations	0	0
Residential mortgage-backed securities	23,190	25,040
Commercial mortgage-backed securities	12,444	11,828
State and municipal obligations	179,854	194,865
Corporate securities	107,362	107,263
Options embedded in convertible securities	1,882	1,651
Foreign government obligations	21,854	22,598
Total fixed maturities	346,586	363,245
Equity securities	0	0
Short term	0	0
Cash equivalents	80,032	64,450
Total fair value	426,618	427,695
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
US government obligations	0	0
Residential mortgage-backed securities	0	0
Commercial mortgage-backed securities	0	0
State and municipal obligations	0	0
Corporate securities	10,473	11,682
Options embedded in convertible securities	0	0
Foreign government obligations	0	0
Total fixed maturities	10,473	11,682
Equity securities	0	0
Short term	0	0
Cash equivalents	0	0
Total fair value	$ 10,473	$ 11,682

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Fair Value, Unobservable Input Reconciliation (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Fair value assets measured on recurring basis unobservable input reconciliation calculation [Roll Forward]
Beginning of period balance	$ 11,682	$ 17,050
Net realized and unrealized gain included in earnings or changes in net assets	403	1,653
Purchases	258	400
Settlements	(1,870)	(7,421)
End of period balance	10,473	11,682
Insurance Linked Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Sales	0
Transfers into Level 3	0
Transfers out of Level 3	$ 0
Insurance Linked Securities [Member] | Maximum [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Percentage of variance in values of securities (in hundredths)	300.00%
Insurance Linked Securities [Member] | Minimum [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Percentage of variance in values of securities (in hundredths)	0.00%

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Investments

3 Months Ended

Mar. 31, 2013

Investments [Abstract]

Investments

(2) Investments:

The following is a summary of available-for-sale securities at March 31, 2013 and December 31, 2012:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
March 31, 2013
Fixed maturities
U.S. government obligations	$	75,562	$	75,575	$	81	$	(94	)	$	(13	)
Residential mortgage-backed securities		23,190		21,611		1,692		(113	)		1,579
Commercial mortgage-backed securities		12,444		11,663		806		(25	)		781
States and municipal obligations		179,854		179,180		784		(110	)		674
Corporate securities		119,717		117,988		2,861		(1,132	)		1,729
Foreign government obligations		21,854		21,641		300		(87	)		213
Total fixed maturities		432,621		427,658		6,524		(1,561	)		4,963
Equity securities:
Financial institutions		13,205		5,618		7,627		(40	)		7,587
Industrial & miscellaneous		102,172		58,786		44,261		(875	)		43,386
Total equity securities		115,377		64,404		51,888		(915	)		50,973
Total	$	547,998	$	492,062	$	58,412	$	(2,476	)		55,936
							Applicable federal income taxes				(19,578	)
							Net unrealized gains - net of tax			$	36,358
December 31, 2012
Fixed maturities
U.S. government obligations	$	70,742	$	70,720	$	43	$	(21	)	$	22
Residential mortgage-backed securities		25,040		23,954		1,218		(132	)		1,086
Commercial mortgage-backed securities		11,828		11,006		849		(27	)		822
State and municipal obligations		194,865		194,258		757		(150	)		607
Corporate securities		120,596		118,574		2,923		(901	)		2,022
Foreign government obligations		22,598		22,047		602		(51	)		551
Total fixed maturities		445,669		440,559		6,392		(1,282	)		5,110
Equity securities:
Financial institutions		12,394		5,925		6,542		(73	)		6,469
Industrial & miscellaneous		95,188		52,202		44,568		(1,582	)		42,986
Total equity securities		107,582		58,127		51,110		(1,655	)		49,455
Total	$	553,251	$	498,686	$	57,502	$	(2,937	)		54,565
							Applicable federal income taxes				(19,098	)
							Net unrealized gains - net of tax			$	35,467

The Company has six other-than-temporarily impaired fixed maturity securities at March 31, 2013 compared to five such securities at December 31, 2012.  Four of these investments have other-than-temporary impairment losses recognized in accumulated other comprehensive income at both March 31, 2013 and December 31, 2012.

The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at March 31, 2013 and December 31, 2012, respectively, the aggregate fair value and gross unrealized loss categorized by the duration those securities have been continuously in an unrealized loss position.

	March 31, 2013							December 31, 2012
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		176	$	65,966	$	(792	)		170	$	90,607	$	(483	)
Greater than 12 months		52		24,190		(769	)		58		19,283		(799	)
Total fixed maturities		228		90,156		(1,561	)		228		109,890		(1,282	)
Equity securities:
12 months or less		24		14,247		(896	)		20		6,955		(842	)
Greater than 12 months		2		244		(19	)		11		6,640		(813	)
Total equity securities		26		14,491		(915	)		31		13,595		(1,655	)
Total fixed maturity and equity securities		254	$	104,647	$	(2,476	)		259	$	123,485	$	(2,937	)

The fair value and the cost or amortized cost of fixed maturity investments at March 31, 2013, by contractual maturity, are shown below.  Actual maturities may ultimately differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties. Pre-refunded municipal bonds are classified based on their pre-refunded call dates.

	Fair Value		Cost or Amortized Cost
One year or less	$	145,477	$	144,847
Excess of one year to five years		207,061		205,716
Excess of five years to ten years		28,331		27,851
Excess of ten years		2,584		2,423
Total maturities		383,453		380,837
Asset-backed securities		49,168		46,821
	$	432,621	$	427,658

Following is a summary of the components of net realized gains on investments for the periods presented in the accompanying consolidated statements of operations.

	Three Months Ended
	March 31
	2013			2012
Fixed maturities:
Gross gains	$	1,419		$	550
Gross losses		(1,337	)		(971	)
Net realized gains (losses)		82			(421	)
Equity securities:
Gross gains		11,712			524
Gross losses		(1,160	)		(142	)
Net realized gains		10,552			382
Limited partnerships - net gain		3,713			5,420
Totals	$	14,347		$	5,381

Net realized gains activity for investments, as shown in the previous table, are further detailed as follows:

	Three Months Ended
	March 31
	2013			2012
Realized net gains (losses) on the disposal of securities	$	9,244		$	(96	)
Mark-to-market adjustment		210			57
Equity in gains of limited partnership
investments - realized and unrealized		3,713			5,420
Impairment:
Write-downs based upon objective criteria		(6	)		-
Recovery of prior write-downs
upon sale or disposal		1,186			-
Totals	$	14,347		$	5,381

The mark-to-market adjustments in the table above represent the changes in fair value of (1) options embedded in convertible debt securities and (2) insurance-linked securities held by the Company.

The income from limited partnerships for the quarter ending March 31, 2013 includes an estimated $2,733 of net unrealized gains reported to the Company as part of the underlying assets of the various limited partnerships.  The value of limited partnerships at March 31, 2013 includes approximately $7,173 of net unrealized gains reported to the Company as part of the underlying assets of the various limited partnerships. Shareholders' equity at March 31, 2013 includes approximately $22,114, net of deferred federal income taxes, of earnings undistributed by limited partnerships.

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Fair Value, Balance Sheet Grouping (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Carrying Value [Member]
Assets [Abstract]
Limited partnerships	$ 62,668	$ 59,954
Liabilities [Abstract]
Short-term borrowings	10,000	10,000
Fair Value [Member]
Assets [Abstract]
Limited partnerships	62,668	59,954
Liabilities [Abstract]
Short-term borrowings	10,000	10,000
Fair Value [Member] | Level 1 [Member]
Assets [Abstract]
Limited partnerships	0	0
Liabilities [Abstract]
Short-term borrowings	0	0
Fair Value [Member] | Level 2 [Member]
Assets [Abstract]
Limited partnerships	0	0
Liabilities [Abstract]
Short-term borrowings	10,000	10,000
Fair Value [Member] | Level 3 [Member]
Assets [Abstract]
Limited partnerships	62,668	59,954
Liabilities [Abstract]
Short-term borrowings	$ 0	$ 0

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Unaudited Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Investments:
Fixed maturities	$ 432,621	$ 445,669
Equity securities	115,377	107,582
Limited partnerships	62,668	59,954
Short-term	3,740	4,201
Total Investments	614,406	617,406
Cash and cash equivalents	84,278	71,549
Accounts receivable	80,680	83,400
Reinsurance recoverable	177,482	175,191
Other assets	59,873	32,232
Current federal income taxes	0	3,246
Total Assets	1,016,719	983,024
Liabilities and shareholders' equity
Reserves for losses and loss expenses	456,246	455,454
Reserves for unearned premiums	33,055	37,273
Short-term borrowings	10,000	10,000
Accounts payable and other liabilities	145,299	125,007
Current federal income taxes	2,796	0
Deferred federal income taxes	10,751	8,578
Total Liabilities	658,147	636,312
Shareholders' equity:
Additional paid-in capital	50,264	50,275
Unrealized net gains on investments	36,358	35,467
Foreign exchange adjustment	1,790	1,976
Retained earnings	269,524	258,358
Shareholders' equity	358,572	346,712
Total liabilities and shareholders' equity	1,016,719	983,024
Class A voting [Member]
Shareholders' equity:
Common stock	112	112
Class B non-voting [Member]
Shareholders' equity:
Common stock	$ 524	$ 524

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Unaudited Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Unaudited Consolidated Statements of Cash Flows [Abstract]
Net cash provided by operating activities	$ 12,304	$ 11,666
Investing activities:
Purchases of available-for-sale investments	(92,439)	(104,714)
Purchases of limited partnership interests	0	(1,538)
Proceeds from sales or maturities of available-for-sale investments	113,044	78,829
Net sales of short-term investments	461	382
Other investing activities	(16,678)	3,552
Net cash provided by (used in) investing activities	4,388	(23,489)
Financing activities:
Dividends paid to shareholders	(3,777)	(3,749)
Net cash used in financing activities	(3,777)	(3,749)
Effect of foreign exchange rates on cash and cash equivalents	(186)	204
Increase (decrease) in cash and cash equivalents	12,729	(15,368)
Cash and cash equivalents at beginning of period	71,549	89,726
Cash and cash equivalents at end of period	$ 84,278	$ 74,358

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Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Total accumulated other comprehensive income, beginning balance	$ 37,443
Other comprehensive income before reclassifications	7,617
Amounts reclassified from accumulated other comprehensive income	(6,912)
Other Comprehensive Income (Loss), Net of Tax	705	7,869
Total accumulated other comprehensive income, ending balance	38,148
Foreign Currency [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Total accumulated other comprehensive income, beginning balance	1,976
Other comprehensive income before reclassifications	(186)
Amounts reclassified from accumulated other comprehensive income	0
Other Comprehensive Income (Loss), Net of Tax	(186)
Total accumulated other comprehensive income, ending balance	1,790
Unrealized holding gains on available-for-sale securities [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Total accumulated other comprehensive income, beginning balance	35,467
Other comprehensive income before reclassifications	7,803
Amounts reclassified from accumulated other comprehensive income	(6,912)
Other Comprehensive Income (Loss), Net of Tax	891
Total accumulated other comprehensive income, ending balance	$ 36,358

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Fair Value (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value [Abstract]

Fair value measurements by level for assets measured at fair value on a recurring basis

Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis:

As of March 31, 2013:
Description	Total		Level 1		Level 2		Level 3
U.S. government obligations	$	75,562	$	75,562	$	-	$	-
Residential mortgage-backed securities		23,190		-		23,190		-
Commercial mortgage-backed securities		12,444		-		12,444		-
State and municipal obligations		179,854		-		179,854		-
Corporate securities		117,835		-		107,362		10,473
Options embedded in convertible securities		1,882		-		1,882		-
Foreign government obligations		21,854		-		21,854		-
Total fixed maturities		432,621		75,562		346,586		10,473
Equity securities		115,377		115,377		-		-
Short term		3,740		3,740		-		-
Cash equivalents		80,032		-		80,032		-
	$	631,770	$	194,679	$	426,618	$	10,473

As of December 31, 2012:
Description	Total		Level 1		Level 2		Level 3
U.S. government obligations	$	70,742	$	70,742	$	-	$	-
Residential mortgage-backed securities		25,040		-		25,040		-
Commercial mortgage-backed securities		11,828		-		11,828		-
State and municipal obligations		194,865		-		194,865		-
Corporate securities		118,945		-		107,263		11,682
Options embedded in convertible securities		1,651		-		1,651		-
Foreign government obligations		22,598		-		22,598		-
Total fixed maturities		445,669		70,742		363,245		11,682
Equity securities		107,582		107,582		-		-
Short term		4,201		4,201		-		-
Cash equivalents		64,450		-		64,450		-
	$	621,902	$	182,525	$	427,695	$	11,682

Reconciliation of beginning and ending balances of assets measured at fair value on a recurring basis using level 3 inputs

The Level 3 assets consist of an investment portfolio of insurance-linked securities.  The insurance-linked securities are valued using the average of estimated market quotes from multiple insurance-linked securities brokers.  The broker quotes include Level 3 inputs which are significant to the valuation of the insurance-linked securities and vary by 0-3% from each other. There was no Level 3 sales, no transfers into Level 3 and no transfers out of Level 3 during 2013 or 2012.  A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs is as follows for the three months ended March 31, 2013 and for the year ended December 31, 2012:

	2013			2012
Beginning of period balance	$	11,682		$	17,050
Net realized and unrealized gain included in
earnings or changes in net assets		403			1,653
Purchases		258			400
Settlements		(1,870	)		(7,421	)
End of period balance	$	10,473		$	11,682

Summary of the carrying value and fair value by level of financial instruments

A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company's consolidated balance sheets at March 31, 2013 and December 31, 2012 are as follows:

	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
March 31, 2013
Assets:   Limited partnerships	$	62,668	$	-	$	-	$	62,668	$	62,668
Liabilities:   Short-term borrowings		10,000		-		10,000		-		10,000
December 31, 2012
Assets:   Limited partnerships		59,954		-		-		59,954		59,954
Liabilities:   Short-term borrowings		10,000		-		10,000		-		10,000

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2013

Accumulated Other Comprehensive Income [Abstract]

Changes in Accumulated Other Comprehensive Income by Component

The following table illustrates changes in accumulated other comprehensive income by component for the quarter ending March 31, 2013:

				Unrealized
				holding gains on
	Foreign			available-for-sale
	Currency			securities			Total
Beginning balance	$	1,976		$	35,467		$	37,443
Other comprehensive income
before reclassifications		(186	)		7,803			7,617
Amounts reclassified from
accumulated other
comprehensive income		-			(6,912	)		(6,912	)
Net current-period other
comprehensive income		(186	)		891			705
Ending balance	$	1,790		$	36,358		$	38,148

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2013

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

(1) Summary of Significant Accounting Policies

Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included.  Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ended December 31, 2013.  Interim financial statements should be read in conjunction with the Company's annual audited financial statements and other disclosures included in the Company's most recent Form 10-K.

Investments:  Carrying amounts for fixed maturity securities represent fair value and are based on quoted market prices, where available, or broker/dealer quotes for specific securities where quoted market prices are not available.  Equity securities are carried at quoted market prices (fair value).  The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to record its proportionate share of the limited partnership's net income.  To the extent that the limited partnership investees include both realized and unrealized investment gains or losses in the determination of net income or loss, then the Company would also recognize, through its consolidated statements of operations, its proportionate share of the investee's unrealized as well as realized investment gains or losses.

Other investments, if any, are carried at either fair value or cost, depending on the nature of the investment.  Short-term investments are carried at cost which approximates their fair values.

Realized gains and losses on disposals of investments are determined by specific identification of the cost of investments sold and are included in income.  All fixed maturity and equity securities are considered to be available for sale; the related unrealized net gains or losses (net of applicable tax effect) are reflected directly in shareholders' equity.  Included within available for sale fixed maturity securities are insurance-linked securities and convertible debt securities.  The changes in fair values of insurance-linked securities and portions of the changes in fair values of convertible debt securities are reflected as a component of net realized gains (losses).

With respect to other–than-temporary impairment of investments, if a fixed maturity security is in an unrealized loss position and the Company has the intent to sell the fixed maturity security, or it is more likely than not that the Company will have to sell the fixed maturity security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to net realized losses on investments in the consolidated statements of operations.   For impaired fixed maturity securities that the Company does not intend to sell or it is more likely than not that the Company will not have to sell such securities, but the Company expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in net realized losses on investments in the consolidated statements of operations and the non-credit component of the other-than-temporary impairment is recognized directly in shareholders' equity (accumulated other comprehensive income).

The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security.  Furthermore, unrealized losses caused by non-credit related factors related to fixed maturity securities for which the Company expects to fully recover the amortized cost basis continue to be recognized in accumulated other comprehensive income.

The unrealized net gains or losses (net of applicable tax effect) related to equity securities are reflected directly in shareholders' equity, unless a decline in value is determined to be other-than-temporary, in which case the loss is charged to income.  In determining if and when a decline in market value below cost is other-than-temporary, an objective analysis is made of each individual security where current market value is less than cost.  For any equity security where the unrealized loss exceeds 20% of original or adjusted cost, and where that decline has existed for a period of at least six months, the decline is treated as an other-than-temporary impairment, subject to an evaluation as to possible future recovery.  Additionally, the Company takes into account any known subjective information in evaluating for impairment without consideration to the Company's quantitative criteria defined above.

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Unaudited Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012
Class A voting [Member]
Shareholders' equity:
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	3,000,000	3,000,000
Common stock, shares outstanding (in shares)	2,623,109		2,623,109
Class B non-voting [Member]
Shareholders' equity:
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares outstanding (in shares)	12,290,107		12,290,035

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Subsequent Events

3 Months Ended

Mar. 31, 2013

Subsequent Events [Abstract]

Subsequent Events

 (11) Subsequent Events:

We have evaluated subsequent events for recognition or disclosure in the consolidated financial statements filed on Form 10-Q with the SEC and no events have occurred during the period which require recognition or disclosure.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2013	May 01, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	BALDWIN & LYONS INC
Entity Central Index Key	0000009346
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		14,913,216
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2013

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included.  Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ended December 31, 2013.  Interim financial statements should be read in conjunction with the Company's annual audited financial statements and other disclosures included in the Company's most recent Form 10-K.

Investments

Investments:  Carrying amounts for fixed maturity securities represent fair value and are based on quoted market prices, where available, or broker/dealer quotes for specific securities where quoted market prices are not available.  Equity securities are carried at quoted market prices (fair value).  The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to record its proportionate share of the limited partnership's net income.  To the extent that the limited partnership investees include both realized and unrealized investment gains or losses in the determination of net income or loss, then the Company would also recognize, through its consolidated statements of operations, its proportionate share of the investee's unrealized as well as realized investment gains or losses.

Other investments, if any, are carried at either fair value or cost, depending on the nature of the investment.  Short-term investments are carried at cost which approximates their fair values.

Realized gains and losses on disposals of investments are determined by specific identification of the cost of investments sold and are included in income.  All fixed maturity and equity securities are considered to be available for sale; the related unrealized net gains or losses (net of applicable tax effect) are reflected directly in shareholders' equity.  Included within available for sale fixed maturity securities are insurance-linked securities and convertible debt securities.  The changes in fair values of insurance-linked securities and portions of the changes in fair values of convertible debt securities are reflected as a component of net realized gains (losses).

With respect to other–than-temporary impairment of investments, if a fixed maturity security is in an unrealized loss position and the Company has the intent to sell the fixed maturity security, or it is more likely than not that the Company will have to sell the fixed maturity security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to net realized losses on investments in the consolidated statements of operations.   For impaired fixed maturity securities that the Company does not intend to sell or it is more likely than not that the Company will not have to sell such securities, but the Company expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in net realized losses on investments in the consolidated statements of operations and the non-credit component of the other-than-temporary impairment is recognized directly in shareholders' equity (accumulated other comprehensive income).

The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security.  Furthermore, unrealized losses caused by non-credit related factors related to fixed maturity securities for which the Company expects to fully recover the amortized cost basis continue to be recognized in accumulated other comprehensive income.

The unrealized net gains or losses (net of applicable tax effect) related to equity securities are reflected directly in shareholders' equity, unless a decline in value is determined to be other-than-temporary, in which case the loss is charged to income.  In determining if and when a decline in market value below cost is other-than-temporary, an objective analysis is made of each individual security where current market value is less than cost.  For any equity security where the unrealized loss exceeds 20% of original or adjusted cost, and where that decline has existed for a period of at least six months, the decline is treated as an other-than-temporary impairment, subject to an evaluation as to possible future recovery.  Additionally, the Company takes into account any known subjective information in evaluating for impairment without consideration to the Company's quantitative criteria defined above.

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Unaudited Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Revenues:
Net premiums earned	$ 61,098	$ 61,551
Net investment income	2,410	2,422
Commissions and other income	1,383	1,506
Net realized gains on investments, excluding impairment losses	14,353	5,381
Total other-than-temporary impairment losses on investments	(6)	0
Net realized gains on investments	14,347	5,381
Total revenue	79,238	70,860
Expenses
Losses and loss expenses incurred	34,533	34,904
Other operating expenses	22,026	18,957
Total expenses	56,559	53,861
Income before federal income taxes	22,679	16,999
Federal income taxes	7,736	5,493
Net income	$ 14,943	$ 11,506
Per share data:
Basic and diluted earnings (in dollars per share)	$ 1.00	$ 0.78
Dividends paid to shareholders (in dollars per share)	$ 0.25	$ 0.25
Reconciliation of shares outstanding:
Average shares outstanding - basic (in shares)	14,878	14,826
Dilutive effect of share equivalents (in shares)	33	16
Average shares outstanding - diluted (in shares)	14,911	14,842

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Taxes

3 Months Ended

Mar. 31, 2013

Taxes [Abstract]

Taxes

(6) Taxes:

As of March 31, 2013, the Company's 2009 and subsequent tax years remain subject to examination by the IRS.  The effective rate differs from the normal statutory rate primarily as a result of tax-exempt investment income.

(Space Intentionally Left Blank)

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Debt

3 Months Ended

Mar. 31, 2013

Debt [Abstract]

Debt

(5) Debt:

The Company maintains a revolving line of credit with a $30,000 limit and an expiration date of September 23, 2014.  Interest on this line of credit is referenced to LIBOR and can be fixed for periods of up to one year at the Company's option.  Outstanding drawings on this line of credit were $10,000 as of March 31, 2013 and December 31, 2012.  At March 31, 2013, the effective interest rate was 1.10%.  The Company has $20,000 remaining unused under the line of credit at March 31, 2013. 

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Restricted Stock (Tables)

3 Months Ended

Mar. 31, 2013

Restricted Stock [Abstract]

Summary of stock issuances

The Company grants shares of class B restricted stock to the Company's outside directors as their annual retainer compensation.  The shares are distributed on the vesting date, one year following the date of grant, and had a total value of $440 for each of the annual periods presented.  The table below provides detail of the stock issuances for 2011 and 2012:

Effective	Number of Shares		Vesting	Service	Value
Date	Issued		Date	Period	Per Share
5/10/2011		19,558	5/10/2012	7/1/2011 - 6/30/2012	$	22.50
5/8/2012		20,119	5/8/2013	7/1/2012 - 6/30/2013	$	21.87

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Investments (Tables)

3 Months Ended

Mar. 31, 2013

Investments [Abstract]

Summary of available for sale securities

The following is a summary of available-for-sale securities at March 31, 2013 and December 31, 2012:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
March 31, 2013
Fixed maturities
U.S. government obligations	$	75,562	$	75,575	$	81	$	(94	)	$	(13	)
Residential mortgage-backed securities		23,190		21,611		1,692		(113	)		1,579
Commercial mortgage-backed securities		12,444		11,663		806		(25	)		781
States and municipal obligations		179,854		179,180		784		(110	)		674
Corporate securities		119,717		117,988		2,861		(1,132	)		1,729
Foreign government obligations		21,854		21,641		300		(87	)		213
Total fixed maturities		432,621		427,658		6,524		(1,561	)		4,963
Equity securities:
Financial institutions		13,205		5,618		7,627		(40	)		7,587
Industrial & miscellaneous		102,172		58,786		44,261		(875	)		43,386
Total equity securities		115,377		64,404		51,888		(915	)		50,973
Total	$	547,998	$	492,062	$	58,412	$	(2,476	)		55,936
							Applicable federal income taxes				(19,578	)
							Net unrealized gains - net of tax			$	36,358
December 31, 2012
Fixed maturities
U.S. government obligations	$	70,742	$	70,720	$	43	$	(21	)	$	22
Residential mortgage-backed securities		25,040		23,954		1,218		(132	)		1,086
Commercial mortgage-backed securities		11,828		11,006		849		(27	)		822
State and municipal obligations		194,865		194,258		757		(150	)		607
Corporate securities		120,596		118,574		2,923		(901	)		2,022
Foreign government obligations		22,598		22,047		602		(51	)		551
Total fixed maturities		445,669		440,559		6,392		(1,282	)		5,110
Equity securities:
Financial institutions		12,394		5,925		6,542		(73	)		6,469
Industrial & miscellaneous		95,188		52,202		44,568		(1,582	)		42,986
Total equity securities		107,582		58,127		51,110		(1,655	)		49,455
Total	$	553,251	$	498,686	$	57,502	$	(2,937	)		54,565
							Applicable federal income taxes				(19,098	)
							Net unrealized gains - net of tax			$	35,467

Fixed maturity and equity security investments in unrealized loss position

The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at March 31, 2013 and December 31, 2012, respectively, the aggregate fair value and gross unrealized loss categorized by the duration those securities have been continuously in an unrealized loss position.

	March 31, 2013							December 31, 2012
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		176	$	65,966	$	(792	)		170	$	90,607	$	(483	)
Greater than 12 months		52		24,190		(769	)		58		19,283		(799	)
Total fixed maturities		228		90,156		(1,561	)		228		109,890		(1,282	)
Equity securities:
12 months or less		24		14,247		(896	)		20		6,955		(842	)
Greater than 12 months		2		244		(19	)		11		6,640		(813	)
Total equity securities		26		14,491		(915	)		31		13,595		(1,655	)
Total fixed maturity and equity securities		254	$	104,647	$	(2,476	)		259	$	123,485	$	(2,937	)

Fair value and cost or amortized cost of fixed maturity investments by contractual maturity

The fair value and the cost or amortized cost of fixed maturity investments at March 31, 2013, by contractual maturity, are shown below.  Actual maturities may ultimately differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties. Pre-refunded municipal bonds are classified based on their pre-refunded call dates.

	Fair Value		Cost or Amortized Cost
One year or less	$	145,477	$	144,847
Excess of one year to five years		207,061		205,716
Excess of five years to ten years		28,331		27,851
Excess of ten years		2,584		2,423
Total maturities		383,453		380,837
Asset-backed securities		49,168		46,821
	$	432,621	$	427,658

Realized gains on investments

Following is a summary of the components of net realized gains on investments for the periods presented in the accompanying consolidated statements of operations.

	Three Months Ended
	March 31
	2013			2012
Fixed maturities:
Gross gains	$	1,419		$	550
Gross losses		(1,337	)		(971	)
Net realized gains (losses)		82			(421	)
Equity securities:
Gross gains		11,712			524
Gross losses		(1,160	)		(142	)
Net realized gains		10,552			382
Limited partnerships - net gain		3,713			5,420
Totals	$	14,347		$	5,381

Schedule of realized gains

Net realized gains activity for investments, as shown in the previous table, are further detailed as follows:

	Three Months Ended
	March 31
	2013			2012
Realized net gains (losses) on the disposal of securities	$	9,244		$	(96	)
Mark-to-market adjustment		210			57
Equity in gains of limited partnership
investments - realized and unrealized		3,713			5,420
Impairment:
Write-downs based upon objective criteria		(6	)		-
Recovery of prior write-downs
upon sale or disposal		1,186			-
Totals	$	14,347		$	5,381

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies [Abstract]

Commitments and Contingencies

(9) Commitments and Contingencies:

In the ordinary, regular and routine course of their business, the Company and its insurance Subsidiaries are frequently involved in various matters of litigation relating principally to claims for insurance coverage provided.  No currently pending matter is deemed by management to be material to the Company.

In February, 2013, the Company purchased a building in Carmel, Indiana to serve as its future home office.  No external funds were utilized for this purchase.  Rather, short-term investments were and will be liquidated to provide for the purchase and necessary renovations which are expected to be completed in late 2013.  A total of $25 million is expected to be capitalized for the acquisition of the home office building.

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Fair Value

3 Months Ended

Mar. 31, 2013

Fair Value [Abstract]

Fair Value

(7) Fair Value:

Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis:

As of March 31, 2013:
Description	Total		Level 1		Level 2		Level 3
U.S. government obligations	$	75,562	$	75,562	$	-	$	-
Residential mortgage-backed securities		23,190		-		23,190		-
Commercial mortgage-backed securities		12,444		-		12,444		-
State and municipal obligations		179,854		-		179,854		-
Corporate securities		117,835		-		107,362		10,473
Options embedded in convertible securities		1,882		-		1,882		-
Foreign government obligations		21,854		-		21,854		-
Total fixed maturities		432,621		75,562		346,586		10,473
Equity securities		115,377		115,377		-		-
Short term		3,740		3,740		-		-
Cash equivalents		80,032		-		80,032		-
	$	631,770	$	194,679	$	426,618	$	10,473

As of December 31, 2012:
Description	Total		Level 1		Level 2		Level 3
U.S. government obligations	$	70,742	$	70,742	$	-	$	-
Residential mortgage-backed securities		25,040		-		25,040		-
Commercial mortgage-backed securities		11,828		-		11,828		-
State and municipal obligations		194,865		-		194,865		-
Corporate securities		118,945		-		107,263		11,682
Options embedded in convertible securities		1,651		-		1,651		-
Foreign government obligations		22,598		-		22,598		-
Total fixed maturities		445,669		70,742		363,245		11,682
Equity securities		107,582		107,582		-		-
Short term		4,201		4,201		-		-
Cash equivalents		64,450		-		64,450		-
	$	621,902	$	182,525	$	427,695	$	11,682

Level inputs, as defined by FASB Fair Value Measurements, are as follows:

Level Input:	Input Definition:
Level 1	Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
Level 2	Inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market data at the measurement date.
Level 3	Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The following methods, assumptions and inputs were used to determine the fair value of each class of the following assets recorded at fair value in the consolidated balance sheets:

Cash equivalents:  Cash equivalents primarily consist of highly rated money market funds purchased at par value with specified yield rates. Due to underlying assets of these funds, we designate all cash equivalents as Level 2.

Fixed maturities: Fair values of fixed maturities are based on quoted market prices, where available. These fair values are obtained primarily from third party pricing services, which generally use Level 1 or Level 2 inputs for the determination of fair value to facilitate fair value measurements and disclosures. U.S. government obligations represent Level 1 securities, while Level 2 securities primarily include corporate securities, states and municipal obligations, foreign government obligations, and mortgage-backed securities. For securities not actively traded, the third party pricing services may use quoted market prices of comparable instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include, but are not limited to, broker quotes, benchmark yields, credit spreads, default rates and prepayment speeds.

Equity securities: Fair values of equity securities are designated as Level 1 and are based on quoted market prices.

The Level 3 assets consist of an investment portfolio of insurance-linked securities.  The insurance-linked securities are valued using the average of estimated market quotes from multiple insurance-linked securities brokers.  The broker quotes include Level 3 inputs which are significant to the valuation of the insurance-linked securities and vary by 0-3% from each other. There was no Level 3 sales, no transfers into Level 3 and no transfers out of Level 3 during 2013 or 2012.  A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs is as follows for the three months ended March 31, 2013 and for the year ended December 31, 2012:

	2013			2012
Beginning of period balance	$	11,682		$	17,050
Net realized and unrealized gain included in
earnings or changes in net assets		403			1,653
Purchases		258			400
Settlements		(1,870	)		(7,421	)
End of period balance	$	10,473		$	11,682

There were no transfers of assets between Level 1 and Level 2 during the three months ended March 31, 2013 and 2012.  Transfers between levels, if any, are recorded as of the beginning of the reporting period.

In addition to the preceding disclosures on assets recorded at fair value in the consolidated balance sheets, FASB guidance also requires the disclosure of fair values for certain other financial instruments for which it is practicable to estimate fair value, whether or not such values are recognized in the consolidated balance sheets.

Non-financial instruments such as real estate, property and equipment, other assets, deferred income taxes and intangible assets, and certain financial instruments such as reserves for losses and loss expenses are excluded from the fair value disclosures.  Therefore, the fair value amounts cannot be aggregated to determine the Company's underlying economic value.

The carrying amounts reported in the consolidated balance sheets for cash, accounts receivables, reinsurance recoverable, notes receivable, accounts payable and accrued expenses, income taxes receivable or payable and unearned premiums approximate fair value because of the short term nature of these items.  These assets and liabilities are not included in the table below.

The following methods, assumptions and inputs were used to estimate the fair value of each class of financial instrument:

Limited partnerships: The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to carry the investment at its proportionate share of the limited partnership's equity.   The underlying assets of the Company's investments in limited partnerships are carried at fair value, and, therefore, the Company's carrying value of limited partnerships approximates fair value.  As these investments are not actively traded and the corresponding inputs are based on data provided by the investees, they are classified as Level 3.

Short-term borrowings: The fair value of our short-term borrowings is based on quoted market prices for the same or similar debt, or, if no quoted market prices are available, on the current market interest rates available to us for debt of similar terms and remaining maturities.

A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company's consolidated balance sheets at March 31, 2013 and December 31, 2012 are as follows:

	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
March 31, 2013
Assets:   Limited partnerships	$	62,668	$	-	$	-	$	62,668	$	62,668
Liabilities:   Short-term borrowings		10,000		-		10,000		-		10,000
December 31, 2012
Assets:   Limited partnerships		59,954		-		-		59,954		59,954
Liabilities:   Short-term borrowings		10,000		-		10,000		-		10,000

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Restricted Stock

3 Months Ended

Mar. 31, 2013

Restricted Stock [Abstract]

Restricted Stock

(8) Restricted Stock:

The Company grants shares of class B restricted stock to the Company's outside directors as their annual retainer compensation.  The shares are distributed on the vesting date, one year following the date of grant, and had a total value of $440 for each of the annual periods presented.  The table below provides detail of the stock issuances for 2011 and 2012:

Effective	Number of Shares		Vesting	Service	Value
Date	Issued		Date	Period	Per Share
5/10/2011		19,558	5/10/2012	7/1/2011 - 6/30/2012	$	22.50
5/8/2012		20,119	5/8/2013	7/1/2012 - 6/30/2013	$	21.87

Compensation expense related to the above stock grant is recognized over the period in which the directors render the services.

Effective February 4, 2013, the Company issued 52,389 shares of class B restricted stock to certain of the Company's executives.  The restricted shares were paid solely in the Company's class B stock.  The restricted shares represent a portion of compensation to certain executives under the Company's 2012 Executive Incentive Bonus Plan.  The restricted shares will vest ratably over a three year period from the date of grant and are accelerated for retirement eligible recipients due to the non-substantive post-grant date vesting clause per ASC 715, Compensation-Retirement Benefits.  Restricted stock was valued based on the closing price of the stock on the day the award was granted.  Each share was valued at $23.69 per share representing a total value of $1,241.  Non-vested restricted shares will be forfeited should an executive's employment terminate for any reason other than death, disability, or retirement as defined by the Compensation Committee.

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Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2013

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

(10) Accumulated Other Comprehensive Income:

The following table illustrates changes in accumulated other comprehensive income by component for the quarter ending March 31, 2013:

				Unrealized
				holding gains on
	Foreign			available-for-sale
	Currency			securities			Total
Beginning balance	$	1,976		$	35,467		$	37,443
Other comprehensive income
before reclassifications		(186	)		7,803			7,617
Amounts reclassified from
accumulated other
comprehensive income		-			(6,912	)		(6,912	)
Net current-period other
comprehensive income		(186	)		891			705
Ending balance	$	1,790		$	36,358		$	38,148

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Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013
Commitments and Contingencies [Abstract]
Capitalized acquisition costs	$ 25

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Reportable Segments (Tables)

3 Months Ended

Mar. 31, 2013

Reportable Segments [Abstract]

Schedule of Segment Reporting Information, by Segment

The following table provides certain revenue and profit and loss information for each reportable segment.  All amounts presented are computed based upon U.S. generally accepted accounting principles.  Segment profit for Property and Casualty Insurance includes the direct marketing agency operations conducted by the parent company for this segment and is computed after elimination of inter-company commissions.

	2013						2012
	Direct and Assumed Premium Written		Net Premium Earned		Segment Profit		Direct and Assumed Premium Written		Net Premium Earned		Segment Profit
Three months ended March 31:
Property and Casualty Insurance	$	70,189	$	47,860	$	5,234	$	75,226	$	47,909	$	6,933
Reinsurance		13,702		13,238		4,770		14,827		13,642		6,137
Totals	$	83,891	$	61,098	$	10,004	$	90,053	$	61,551	$	13,070

Reconciliation of Operating Profit (Loss) from Segments to Consolidated

The following table reconciles reportable segment income to the Company's consolidated income before federal income taxes.

	Three Months Ended
	March 31
	2013			2012
Profit (Loss):
Segment profit	$	10,004		$	13,070
Net investment income		2,410			2,422
Net gains on investments		14,347			5,381
Corporate expenses		(4,082	)		(3,874	)
Income before federal income taxes	$	22,679		$	16,999

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Investments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2013 Security	Mar. 31, 2012	Dec. 31, 2012 Security
Schedule of Available-For-Sale Securities [Line Items]
Fair Value			$ 553,251
Cost or Amortized Cost			498,686
Gross Unrealized Gains			57,502
Gross Unrealized Losses			(2,937)
Net Unrealized Gains (losses)			54,565
Applicable federal income taxes	(19,578)		(19,098)
Net unrealized gains - net of tax	36,358		35,467
Number of other than temporarily impaired securities	6		5
Number of other than temporarily impaired securities loss recognized in accumulated other comprehensive income	4		4
Available-for-sale securities continuous unrealized loss position [Abstract]
Number of Securities, total	254		259
Available-for-sale securities continuous unrealized loss position, Fair Value [Abstract]
Fair value, total	104,647		123,485
Available-for-sale securities continuous unrealized loss position, aggregate losses [Abstract]
Gross unrealized loss, total	(2,476)		(2,937)
Available-for-sale securities debt maturities fair value [Abstract]
One year or less, Fair Value	145,477
Excess of one year to five years, Fair Value	207,061
Excess of five years to ten years, Fair Value	28,331
Excess of ten years, Fair Value	2,584
Total maturities, Fair Value	383,453
Asset-backed securities	49,168
Available-for-sale securities debt securities current	432,621
Available-for-sale securities debt maturities amortized cost basis [Abstract]
One year or less, Amortized Cost Basis	144,847
Excess of one year to five years, Amortized Cost Basis	205,716
Excess of five years to ten years, Amortized Cost Basis	27,851
Excess of ten years, Amortized Cost Basis	2,423
Total maturities, Amortized Cost Basis	380,837
Asset-backed securities	46,821
Available-for-sale securities debt maturities amortized cost basis, Total	427,658
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Limited partnerships - net gain (loss)	3,713		5,420
Totals	14,347	5,381	5,381
Available for sale securities gain loss activity [Abstract]
Realized net gains (losses) on the disposal of securities	9,244		(96)
Mark-to-market adjustment	210		57
Equity in gains of limited partnership investments - realized and unrealized	3,713		5,420
Write-downs based upon objective criteria	(6)		0
Recovery of prior write-downs upon sale or disposal	1,186		0
Totals	14,347	5,381	5,381
Net unrealized gain on investments	2,733
Net unrealized gains in limited partnership	7,173
Undistributed earnings of limited partnership, net of taxes	22,114
U.S. government obligations [Member]
Schedule of Available-For-Sale Securities [Line Items]
Fair Value	75,562		70,742
Cost or Amortized Cost	75,575		70,720
Gross Unrealized Gains	81		43
Gross Unrealized Losses	(94)		(21)
Net Unrealized Gains (losses)	(13)		22
Residential mortgage-backed securities [Member]
Schedule of Available-For-Sale Securities [Line Items]
Fair Value	23,190		25,040
Cost or Amortized Cost	21,611		23,954
Gross Unrealized Gains	1,692		1,218
Gross Unrealized Losses	(113)		(132)
Net Unrealized Gains (losses)	1,579		1,086
Commercial mortgage-backed securities [Member]
Schedule of Available-For-Sale Securities [Line Items]
Fair Value	12,444		11,828
Cost or Amortized Cost	11,663		11,006
Gross Unrealized Gains	806		849
Gross Unrealized Losses	(25)		(27)
Net Unrealized Gains (losses)	781		822
States and municipal obligations [Member]
Schedule of Available-For-Sale Securities [Line Items]
Fair Value	179,854		194,865
Cost or Amortized Cost	179,180		194,258
Gross Unrealized Gains	784		757
Gross Unrealized Losses	(110)		(150)
Net Unrealized Gains (losses)	674		607
Corporate securities [Member]
Schedule of Available-For-Sale Securities [Line Items]
Fair Value	119,717		120,596
Cost or Amortized Cost	117,988		118,574
Gross Unrealized Gains	2,861		2,923
Gross Unrealized Losses	(1,132)		(901)
Net Unrealized Gains (losses)	1,729		2,022
Foreign government obligations [Member]
Schedule of Available-For-Sale Securities [Line Items]
Fair Value	21,854		22,598
Cost or Amortized Cost	21,641		22,047
Gross Unrealized Gains	300		602
Gross Unrealized Losses	(87)		(51)
Net Unrealized Gains (losses)	213		551
Total fixed maturities [Member]
Schedule of Available-For-Sale Securities [Line Items]
Fair Value	432,621		445,669
Cost or Amortized Cost	427,658		440,559
Gross Unrealized Gains	6,524		6,392
Gross Unrealized Losses	(1,561)		(1,282)
Net Unrealized Gains (losses)	4,963		5,110
Available-for-sale securities continuous unrealized loss position [Abstract]
Number of Securities Less than 12 months	176		170
Number of Securities More than 12 months	52		58
Number of Securities, total	228		228
Available-for-sale securities continuous unrealized loss position, Fair Value [Abstract]
Fair value, 12 months or less	65,966		90,607
Fair value, 12 months or longer	24,190		19,283
Fair value, total	90,156		109,890
Available-for-sale securities continuous unrealized loss position, aggregate losses [Abstract]
Gross unrealized loss, less than 12 months	(792)		(483)
Gross unrealized loss, 12 months or longer	(769)		(799)
Gross unrealized loss, total	(1,561)		(1,282)
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Gross gains	1,419		550
Gross losses	(1,337)		(971)
Net realized gains (losses)	82		(421)
Financial institutions [Member]
Schedule of Available-For-Sale Securities [Line Items]
Fair Value	13,205		12,394
Cost or Amortized Cost	5,618		5,925
Gross Unrealized Gains	7,627		6,542
Gross Unrealized Losses	(40)		(73)
Net Unrealized Gains (losses)	7,587		6,469
Industrial & Miscellaneous [Member]
Schedule of Available-For-Sale Securities [Line Items]
Fair Value	102,172		95,188
Cost or Amortized Cost	58,786		52,202
Gross Unrealized Gains	44,261		44,568
Gross Unrealized Losses	(875)		(1,582)
Net Unrealized Gains (losses)	43,386		42,986
Total equity securities [Member]
Schedule of Available-For-Sale Securities [Line Items]
Fair Value	115,377		107,582
Cost or Amortized Cost	64,404		58,127
Gross Unrealized Gains	51,888		51,110
Gross Unrealized Losses	(915)		(1,655)
Net Unrealized Gains (losses)	50,973		49,455
Available-for-sale securities continuous unrealized loss position [Abstract]
Number of Securities Less than 12 months	24		20
Number of Securities More than 12 months	2		11
Number of Securities, total	26		31
Available-for-sale securities continuous unrealized loss position, Fair Value [Abstract]
Fair value, 12 months or less	14,247		6,955
Fair value, 12 months or longer	244		6,640
Fair value, total	14,491		13,595
Available-for-sale securities continuous unrealized loss position, aggregate losses [Abstract]
Gross unrealized loss, less than 12 months	(896)		(842)
Gross unrealized loss, 12 months or longer	(19)		(813)
Gross unrealized loss, total	(915)		(1,655)
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Gross gains	11,712		524
Gross losses	(1,160)		(142)
Net realized gains (losses)	10,552		382
Total available-for-sale securities [Member]
Schedule of Available-For-Sale Securities [Line Items]
Fair Value	547,998
Cost or Amortized Cost	492,062
Gross Unrealized Gains	58,412
Gross Unrealized Losses	(2,476)
Net Unrealized Gains (losses)	$ 55,936

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Unaudited Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Unaudited Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 14,943	$ 11,506
Unrealized net gains on securities:
Unrealized net gains arising during the period	7,803	7,639
Less: reclassification adjustment for net gains included in net income	6,912	(26)
Change in unrealized gains on investments	891	7,665
Foreign currency translation adjustments	(186)	204
Other Comprehensive Income (Loss), Net of Tax	705	7,869
Comprehensive income	$ 15,648	$ 19,375

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Reportable Segments

3 Months Ended

Mar. 31, 2013

Reportable Segments [Abstract]

Reportable Segments

(4) Reportable Segments:

The Company has two reportable business segments in its operations:  Property and Casualty Insurance and Reinsurance.

The Property and Casualty Insurance segment provides multiple line insurance coverage primarily to fleet transportation companies as well as to independent contractors who contract with fleet transportation companies.  In addition, the Company provides private passenger automobile products to individuals, and commercial multi-peril and professional liability products on a selective basis.

The Reinsurance segment accepts property and casualty cessions from other insurance companies as well as retrocessions from selected reinsurance companies, principally reinsuring against catastrophes.  In addition, the Reinsurance segment accepts selected professional liability cessions from other insurance companies.
 

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

The following table provides certain revenue and profit and loss information for each reportable segment.  All amounts presented are computed based upon U.S. generally accepted accounting principles.  Segment profit for Property and Casualty Insurance includes the direct marketing agency operations conducted by the parent company for this segment and is computed after elimination of inter-company commissions.

	2013						2012
	Direct and Assumed Premium Written		Net Premium Earned		Segment Profit		Direct and Assumed Premium Written		Net Premium Earned		Segment Profit
Three months ended March 31:
Property and Casualty Insurance	$	70,189	$	47,860	$	5,234	$	75,226	$	47,909	$	6,933
Reinsurance		13,702		13,238		4,770		14,827		13,642		6,137
Totals	$	83,891	$	61,098	$	10,004	$	90,053	$	61,551	$	13,070

The following table reconciles reportable segment income to the Company's consolidated income before federal income taxes.

	Three Months Ended
	March 31
	2013			2012
Profit (Loss):
Segment profit	$	10,004		$	13,070
Net investment income		2,410			2,422
Net gains on investments		14,347			5,381
Corporate expenses		(4,082	)		(3,874	)
Income before federal income taxes	$	22,679		$	16,999

Segment profit includes both net premiums earned and fees and other income associated with the business conducted by the segment.

Management does not identify or allocate assets to reportable segments when evaluating segment performance and depreciation expense is not material for any of the reportable segments.

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

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Reinsurance (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Reinsurance [Abstract]
Premiums ceded to reinsurers	$ 27,012	$ 24,748
Losses and loss expenses ceded to reinsurers	22,134	7,804
Commissions from reinsurers	$ 4,037	$ 3,835

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Reinsurance (Tables)

3 Months Ended

Mar. 31, 2013

Reinsurance [Abstract]

Reinsurance

The following table summarizes the Company's transactions with reinsurers for the 2013 and 2012 comparative periods.

	2013		2012
Quarter ended March 31:
Premiums ceded to reinsurers	$	27,012	$	24,748
Losses and loss expenses
ceded to reinsurers		22,134		7,804
Commissions from reinsurers		4,037		3,835