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, 2015                                                                                                     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)
111 Congressional Boulevard, Carmel, Indiana (Address of principal executive offices)	46032 (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, 2015:

TITLE OF CLASS                                                              NUMBER OF SHARES OUTSTANDING

  Common Stock, No Par Value:

Class A (voting)                                                                                                 2,623,109

Class B (nonvoting)                                                                                         12,397,344

Index to Exhibits located on page 24.

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
	2015			2014
Assets
Investments:
Fixed maturities	$	450,443		$	451,809
Equity securities		162,591			162,107
Limited partnerships		84,569			81,230
Short-term		2,968			2,966
		700,571			698,112
Cash and cash equivalents		48,913			64,632
Accounts receivable		93,071			98,144
Reinsurance recoverable		214,122			220,221
Other assets		67,200			61,447
Current federal income taxes		2,581			1,691
	$	1,126,458		$	1,144,247
Liabilities and shareholders' equity
Reserves for losses and loss expenses	$	505,887		$	506,102
Reserves for unearned premiums		33,011			35,019
Short-term borrowings		20,000			20,000
Accounts payable and accrued expenses		142,753			163,657
Deferred federal income taxes		21,523			19,973
		723,174			744,751
Shareholders' equity:
Common stock-no par value:
Class A voting -- authorized 3,000,000 shares;
outstanding -- 2015 - 2,623,109; 2014 - 2,623,109		112			112
Class B non-voting -- authorized 20,000,000 shares;
outstanding -- 2015 - 12,397,344; 2014 - 12,356,389		529			527
Additional paid-in capital		52,816			51,854
Unrealized net gains on investments		52,976			51,840
Foreign exchange adjustment		(389	)		390
Retained earnings		297,240			294,773
		403,284			399,496
	$	1,126,458		$	1,144,247

See notes to condensed consolidated financial statements.

- 1 -

Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Statements of Income
(in thousands, except per share data)
	Three Months Ended
	March 31
	2015			2014
Revenues
Net premiums earned	$	66,446		$	63,842
Net investment income		2,815			2,294
Commissions and other income		1,297			1,355
Net realized gains on investments, excluding
impairment losses		3,957			4,175
Total other-than-temporary impairment losses on investments		(214	)		(105	)
Net realized gains on investments		3,743			4,070
		74,301			71,561
Expenses
Losses and loss expenses incurred		41,646			39,289
Other operating expenses		23,364			22,833
		65,010			62,122
Income before federal income taxes		9,291			9,439
Federal income taxes		3,048			3,078
Net income	$	6,243		$	6,361
Per share data:
Basic and diluted earnings	$	.42		$	.42
Dividends paid to shareholders	$	.25		$	.25
Reconciliation of shares outstanding:
Average shares outstanding - basic		14,994			14,947
Dilutive effect of share equivalents		24			28
Average shares outstanding - diluted		15,018			14,975

See notes to condensed consolidated financial statements.

- 2 -

Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Statements of Comprehensive Income
(in thousands)
	Three Months Ended
	March 31
	2015			2014
Net income	$	6,243		$	6,361
Other comprehensive income, net of tax:
Unrealized net gains on securities:
Unrealized net gains arising during the period		622			5,834
Less: reclassification adjustment for net gains (losses)
included in net income		(514	)		651
		1,136			5,183
Foreign currency translation adjustments		(779	)		(501	)
Other comprehensive income		357			4,682
Comprehensive income	$	6,600		$	11,043

See notes to condensed consolidated financial statements.

- 3 -

Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
(in thousands)
	Three Months Ended
	March 31
	2015			2014
Net cash provided by operating activities	$	10,674		$	9,160
Investing activities:
Purchases of available-for-sale investments		(126,146	)		(104,263	)
Proceeds from sales or maturities
of available-for-sale investments		104,555			108,087
Net purchases of short-term investments		(3	)		(203	)
Other investing activities		(244	)		(2,808	)
Net cash provided by (used in) investing activities		(21,838	)		813
Financing activities:
Dividends paid to shareholders		(3,776	)		(3,753	)
Net cash used in financing activities		(3,776	)		(3,753	)
Effect of foreign exchange rates on cash and cash equivalents		(779	)		(501	)
Increase (decrease) in cash and cash equivalents		(15,719	)		5,719
Cash and cash equivalents at beginning of period		64,632			59,297
Cash and cash equivalents at end of period	$	48,913		$	65,016

See notes to condensed consolidated financial statements.

- 4 -

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, 2015.  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).

- 5 -

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.

- 6 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

(2) Investments:

The following is a summary of available-for-sale securities at March 31, 2015 and December 31, 2014:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
March 31, 2015
Fixed maturities
U.S. government obligations	$	112,820	$	112,506	$	322	$	(8	)	$	314
Residential mortgage-backed securities		6,066		5,820		272		(26	)		246
Commercial mortgage-backed securities		34,465		33,635		1,004		(174	)		830
States and municipal obligations		116,612		115,890		962		(240	)		722
Corporate securities		154,848		157,921		3,084		(6,157	)		(3,073	)
Foreign government obligations		25,632		27,027		154		(1,549	)		(1,395	)
Total fixed maturities		450,443		452,799		5,798		(8,154	)		(2,356	)
Equity securities:
Financial institutions		24,144		9,732		14,500		(88	)		14,412
Industrial & miscellaneous		138,447		69,000		71,245		(1,798	)		69,447
Total equity securities		162,591		78,732		85,745		(1,886	)		83,859
Total	$	613,034	$	531,531	$	91,543	$	(10,040	)		81,503
							Applicable federal income taxes				(28,527	)
							Net unrealized gains - net of tax			$	52,976
December 31, 2014
Fixed maturities
U.S. government obligations	$	101,094	$	101,058	$	108	$	(72	)	$	36
Residential mortgage-backed securities		6,066		5,830		273		(37	)		236
Commercial mortgage-backed securities		36,440		36,210		630		(400	)		230
State and municipal obligations		113,777		113,133		784		(140	)		644
Corporate securities		166,966		170,822		2,005		(5,861	)		(3,856	)
Foreign government obligations		27,466		28,332		114		(980	)		(866	)
Total fixed maturities		451,809		455,385		3,914		(7,490	)		(3,576	)
Equity securities:
Financial institutions		25,343		10,100		15,303		(60	)		15,243
Industrial & miscellaneous		136,764		68,678		70,260		(2,174	)		68,086
Total equity securities		162,107		78,778		85,563		(2,234	)		83,329
Total	$	613,916	$	534,163	$	89,477	$	(9,724	)		79,753
							Applicable federal income taxes				(27,913	)
							Net unrealized gains - net of tax			$	51,840

- 7 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at March 31, 2015 and December 31, 2014, 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, 2015							December 31, 2014
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		340	$	91,663	$	(6,530	)		591	$	176,756	$	(6,083	)
Greater than 12 months		99		21,274		(1,624	)		140		27,667		(1,407	)
Total fixed maturities		439		112,937		(8,154	)		731		204,423		(7,490	)
Equity securities:
12 months or less		30		17,585		(1,633	)		33		13,538		(2,170	)
Greater than 12 months		6		850		(253	)		3		686		(64	)
Total equity securities		36		18,435		(1,886	)		36		14,224		(2,234	)
Total fixed maturity and equity securities		475	$	131,372	$	(10,040	)		767	$	218,647	$	(9,724	)

The fair value and the cost or amortized costs of fixed maturity investments at March 31, 2015, 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	$	90,662	$	91,130
Excess of one year to five years		229,905		233,545
Excess of five years to ten years		42,162		42,552
Excess of ten years		9,305		8,790
Contractual maturities		372,034		376,017
Asset-backed securities		78,409		76,782
Total	$	450,443	$	452,799

- 8 -

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
	2015			2014
Fixed maturities:
Gross gains	$	1,147		$	1,839
Gross losses		(1,933	)		(1,226	)
Net realized gains (losses)		(786	)		613
Equity securities:
Gross gains		749			741
Gross losses		(753	)		(352	)
Net realized gains (losses)		(4	)		389
Limited partnerships - net gain		4,533			3,068
Totals	$	3,743		$	4,070

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

	Three Months Ended
	March 31
	2015			2014
Realized net gains (losses) on the disposal of securities	$	(288	)	$	1,195
Mark-to-market adjustment		(288	)		(200	)
Equity in gains of limited partnership
investments - realized and unrealized		4,533			3,068
Impairment:
Write-downs based upon objective criteria		(214	)		(105	)
Recovery of prior write-downs
upon sale or disposal		-			112
Totals	$	3,743		$	4,070

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.

- 9 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

The income from limited partnerships for the quarter ending March 31, 2015 includes an estimated $1,987 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, 2015 includes approximately $15,234 of accumulated net unrealized gains reported to the Company as part of the underlying assets of the various limited partnerships. Shareholders’ equity at March 31, 2015 includes approximately $30,869, net of federal income taxes, of reported earnings which remain undistributed by limited partnerships.

As of March 31, 2015, the Company had committed funds totaling $31,500 to five separate borrowers related to five bridge loan agreements.  The Company retains possession of these funds which will only be loaned in the unlikely event that long-term financing is unavailable to the counter party in the market.

(3) Reinsurance:

The following table summarizes the Company’s transactions with reinsurers for the 2015 and 2014 comparative periods.

	2015		2014
Quarter ended March 31:
Premiums ceded to reinsurers	$	31,379	$	31,355
Losses and loss expenses
ceded to reinsurers		16,398		17,914
Commissions from reinsurers		7,614		6,315

(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, workers’ compensation coverage to small businesses and professional liability products on a selective basis.

- 10 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

The Reinsurance segment currently accepts professional liability cessions from other insurance companies.  From 1992 until July 1, 2014, the Reinsurance segment accepted property cessions from other insurance companies and retrocessions from reinsurance companies, principally reinsuring against catastrophes.  Final exposure to property catastrophe losses will expire on June 30, 2015.

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.

	2015						2014
	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	$	90,513	$	59,284	$	6,324	$	82,924	$	51,459	$	5,342
Reinsurance		6,467		7,162		600		11,830		12,383		1,888
Totals	$	96,980	$	66,446	$	6,924	$	94,754	$	63,842	$	7,230

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

	Three Months Ended
	March 31
	2015			2014
Profit:
Segment profit	$	6,924		$	7,230
Net investment income		2,815			2,294
Net gains on investments		3,743			4,070
Corporate expenses and other		(4,191	)		(4,155	)
Income before federal income taxes	$	9,291		$	9,439

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.

- 11 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

(5) Debt:

The Company maintains a revolving line of credit with a $40,000 limit and an expiration date of September 23, 2018.  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 $20,000 as of March 31, 2015 and $20,000 as of December 31, 2014.  At March 31, 2015, the effective interest rate was 1.27%.  The Company has $20,000 remaining unused under the line of credit at March 31, 2015. 

(6) Taxes:

As of March 31, 2015, the Company’s calendar years 2011 through 2014 remain subject to examination by the IRS.  The effective federal income tax rate differs from the normal statutory rate primarily as a result of tax-exempt investment income.

(Space Intentionally Left Blank)

- 12 -

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, 2015:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	112,820	$	-	$	112,820	$	-
Residential mortgage-backed securities		6,066		-		6,066		-
Commercial mortgage-backed securities		34,465		-		34,007		458
State and municipal obligations		116,612		-		116,612		-
Corporate securities		152,093		-		139,249		12,844
Options embedded in convertible securities		2,755		-		2,755		-
Foreign government obligations		25,632		-		25,632		-
Total fixed maturities		450,443		-		437,141		13,302
Equity securities:
Financial institutions		24,144		24,144		-		-
Industrial & miscellaneous		138,447		138,447		-		-
Total equity securities		162,591		162,591		-		-
Short term		2,968		2,968		-		-
Cash equivalents		46,384		-		46,384		-
	$	662,386	$	165,559	$	483,525	$	13,302

As of December 31, 2014:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	101,094	$	-	$	101,094	$	-
Residential mortgage-backed securities		6,066		-		6,066		-
Commercial mortgage-backed securities		36,440		-		36,440		-
State and municipal obligations		113,777		-		113,777		-
Corporate securities		164,068		-		151,860		12,208
Options embedded in convertible securities		2,898		-		2,898		-
Foreign government obligations		27,466		-		27,466		-
Total fixed maturities		451,809		-		439,601		12,208
Equity securities:
Financial institutions		25,343		25,343		-		-
Industrial & miscellaneous		136,764		136,764		-		-
Total equity securities		162,107		162,107		-		-
Short term		2,966		2,966		-		-
Cash equivalents		59,309		-		59,309		-
	$	676,191	$	165,073	$	498,910	$	12,208

- 13 -

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.  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.  The Level 3 assets consist of a portfolio of corporate convertible bonds and commercial mortgage-backed securities.  The assets are valued using various unobservable inputs including extrapolated data, proprietary models and indicative quotes.

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

- 14 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

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, 2015 and for the year ended December 31, 2014:

	2015		2014
Beginning of period balance	$	12,208	$	-
Total  gains or losses (realized or unrealized)
included in income		66		-
Purchases		1,002		-
Settlements		-		-
Transfers into level 3		26		12,208
End of period balance	$	13,302	$	12,208

Transfers between levels, if any, are recorded as of the beginning of the reporting period.  There were no significant transfers of assets between Level 1 and Level 2 during the three months ended March 31, 2015 and 2014.

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 primarily 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.

- 15 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

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, 2015 and December 31, 2014 are as follows:

	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
March 31, 2015
Assets:   Limited partnerships	$	84,569	$	-	$	-	$	84,569	$	84,569
Liabilities:   Short-term borrowings		20,000		-		20,000		-		20,000
December 31, 2014
Assets:   Limited partnerships		81,230		-		-		81,230		81,230
Liabilities:   Short-term borrowings		20,000		-		20,000		-		20,000

(8) Restricted Stock:

The Company grants shares of class B restricted stock to the Company’s outside directors, in lieu of cash, as their annual retainer compensation.  The shares are distributed on the vesting date, one year following the date of grant, and have had an aggregate total value of $440 for each of the annual periods presented.  The table below provides detail of the stock issuances for 2013 and 2014:

				Value
				Per Share
Effective	Number of Shares	Vesting	Service	on Grant
Date	Issued	Date	Period	Date
5/7/2013	18,106	5/7/2014	7/1/2013 - 6/30/2014	$24.30
5/8/2014	17,237	5/8/2015	7/1/2014 - 6/30/2015	$25.53

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

Effective February 4, 2015, the Company issued 36,646 shares of class B restricted stock to certain of the Company’s executives as a portion of compensation under the Company’s 2014 Executive Incentive Bonus Plan.  The restricted shares will vest ratably over a three year period from the date of grant with acceleration for retirement eligible recipients due to the non-substantive post-grant date vesting clause per Accounting Standards Codification 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 $23.29 per share representing a total value of $853.  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 2014 Executive Incentive Bonus Plan.

- 16 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

(9) Litigation, 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.

(10) Accumulated Other Comprehensive Income:

The following table illustrates changes in accumulated other comprehensive income by component for the three months ending March 31, 2015:

				Unrealized
				holding gains on
	Foreign			available-for-sale
	Currency			securities		Total
Beginning balance	$	390		$	51,840	$	52,230
Other comprehensive income
before reclassifications		(779	)		622		(157	)
Amounts reclassified from
accumulated other
comprehensive income		-			514		514
Net current-period other
comprehensive income		(779	)		1,136		357
Ending balance	$	(389	)	$	52,976	$	52,587

 (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.

- 17 -

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 one-third 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 and certain contracts call for reinsurance payment patterns which do not coincide with the collection of premium by the Company from its insureds.

For the first three months of 2015, the Company produced positive cash flow from operations totaling $10.7 million, which compares to positive cash flow from operations of $9.2 million generated during the first three months of 2014.  The increase in cash flow from the 2014 period is primarily due to the timing and amount of loss, LAE and other operating expense payments during the 2015 period, principally from property reinsurance losses.  The Company has achieved positive cash flow in 21 of the past 23 quarters averaging $11.9 million per quarter.

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 5.1 years at March 31, 2015, and the effective duration of the portfolio was 2.1 years, both of which are shorter than the average life of the Company’s liabilities.

Financing activity for the first three months of 2015 included regular dividend payments to shareholders of $3.8 million ($.25 per share).

The Company’s assets at March 31, 2015 included $49.4 million in investments classified as cash equivalents that were readily convertible to cash without significant market penalty.  An additional $93.3 million of fixed maturity investments (at par) will mature within the twelve-month period following March 31, 2015.  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, 2015, $59.4 million may be transferred by dividend or loan to the parent company during the remainder of 2015 without approval by, or prior notification to, regulatory authorities.  An additional $244.7 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 $9.3 million at March 31, 2015.

- 18 -

The Company’s annualized net premiums written to surplus ratio for the first three months of 2015 was approximately 65%.  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, 2015 to First Quarter, 2014

Direct and assumed premiums written during the first quarter of 2015 increased $2.2 million (2.3%), while net premiums earned increased $2.6 million (4.1%), as compared to the same period of 2014.  The Company’s Property and Casualty Insurance segment reported an increase in premium written of 9.2% and an increase in earned premiums of 15.2%, reflecting higher premium from the Company’s core fleet transportation products,partially offset by the planned reduction in professional liability volume.  The Reinsurance segment reported a decrease in premium written of 45.3% and a decrease in premium earned of 42.2% reflecting the Company’s planned withdrawal from property catastrophe reinsurance which was concluded in 2014.  The difference in the percentage changes for 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 reinsurance ceding rates on the mix of business in force.  The following table provides information regarding premiums written and earned for each segment for the quarter ended March 31 (dollars in thousands):

	Direct and Assumed Premium Written		Net Premium Written		Net Premium Earned
2015
Property & Casualty Insurance	$	90,513	$	58,932	$	59,284
Reinsurance		6,467		6,280		7,162
Totals	$	96,980	$	65,212	$	66,446
2014
Property & Casualty Insurance	$	82,924	$	52,005	$	51,459
Reinsurance		11,830		11,494		12,383
Totals	$	94,754	$	63,499	$	63,842

- 19 -

Premium ceded to reinsurers on insurance business produced by the Property and Casualty Insurance segment averaged 34.9% of premium written for the current quarter compared to 37.3% in the 2014 first quarter, with the decrease associated principally with changes in relative premium earned volume for certain products.  There have been no material changes in the terms of major reinsurance treaties since 2014.

Net investment income, before tax, during the first quarter of 2015 was 22.7% higher than the first quarter of 2014 due primarily to increased pre-tax yields on the Company’s fixed maturity securities resulting from redeployment of assets from lower yielding issues.  Overall investment portfolio after-tax income increased 19% compared to the 2014 first quarter while average invested funds increased 3%.

The first quarter 2015 net realized investment gains of $3.7 million resulted primarily from $4.5 million in gains reported from limited partnerships.  Comparative first quarter 2014 overall net realized investment gains were $4.1 million, consisting primarily of $3.1 million in gains from limited partnerships.  Realized 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 2015 increased $2.4 million (6.0%).  The loss ratios for each segment were as follows:

	2015	2014
Property and Casualty Insurance	64.4%	66.9%
Reinsurance	48.4	39.4
Total	62.7	61.5

The decrease in loss ratio for the Property and Casualty Insurance segment primarily relates to favorable loss activity in the Company’s core fleet transportation and professional liability products.  The higher Reinsurance segment loss ratio reflects normal fluctuations of results from property reinsurance.

Other operating expenses, for the first quarter of 2015, increased $0.5 million, or 2.3%, from the first quarter of 2014.  The ratio of consolidated other operating expenses to operating revenue was 33.1% during the first quarter of 2015 compared to 33.8% for the 2014 first quarter.

The effective federal tax rate on consolidated income for the first quarter of 2015 was 32.8%.  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 decreased $0.1 million during the first quarter of 2015 as compared to the 2014 period.

- 20 -

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, 2014.

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, 2015, amounts due from reinsurers on paid and unpaid losses, are estimated to total approximately $211 million.  Of this total, approximately $65 million (31%) 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, 2015, limited partnership investments include approximately $48.9 million consisting of two 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.

- 21 -

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, 2014.

ITEM 4. CONTROLS AND PROCEDURES

The Company carried out an evaluation as of December 31, 2014, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the disclosure controls and procedures as defined in Rule 13a-15(e) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, the “Exchange Act”. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective in timely alerting the Company to material information required to be disclosed in reports under the Exchange Act. In addition, based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective in ensuring that information required to be disclosed in reports that the Company files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. The Company noted no change in internal control over financial reporting that occurred during the last fiscal quarter that materially affected, or is reasonably likely to materially affect, the internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 5. OTHER INFORMATION

Nothing to report.

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

- 22 -

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, 2015                                                                       By /s/ Joseph J. DeVito                                                             

                                                                                                                Joseph J. DeVito,

                                                                                                                CEO and President

Date     May 7, 2015                                                                       By /s/ G. Patrick Corydon

              G. Patrick Corydon,

    Executive Vice President – Finance

    (Principal Financial and

    Accounting Officer)

- 23 -

BALDWIN & LYONS, INC.

Form 10-Q for the fiscal quarter ended March 31, 2015

INDEX TO EXHIBITS

Begins on sequential

page number of Form

 Exhibit Number                                                                                 10-Q           _

  EXHIBIT 31.1                                                                              25

         Certification of CEO

                    pursuant to Section 302 of the

        Sarbanes-Oxley Act

  EXHIBIT 31.2                                                                              27

         Certification of CFO

                    pursuant to Section 302 of the

        Sarbanes-Oxley Act

EXHIBIT 32                                                                                 29

                    Certification of CEO and CFO

                 pursuant to 18 U.S.C. 1350,

                    as adopted pursuant to Section

                     906 of the Sarbanes-Oxley Act

- 24 -

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

- 25 -

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, 2015

/s/ Joseph J. DeVito                                       

Joseph J. DeVito

Chief Executive Officer and President

- 26 - 

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

- 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, 2015

/s/ G. Patrick Corydon                                                      
G. Patrick Corydon

Executive Vice President and Chief Financial Officer

 - 28 -

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, 2015 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, 2015

/s/ Joseph J. DeVito                                                     

Joseph J. DeVito

Chief Executive Officer and President

/s/ G. Patrick Corydon                                                   

G. Patrick Corydon

Executive Vice President and Chief Financial Officer

- 29 -

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, 2014	May 31, 2013	Mar. 31, 2015	Dec. 31, 2014	Feb. 04, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares distribution period from grant date			1 year
Value of each share issued (in dollars per share)	$ 25.53	$ 24.30
Summary of stock Issuances [Abstract]
Shares granted (in shares)	17,237	18,106
Vesting Date	May 08, 2015	May 07, 2014
Service Period	7/1/2014 - 6/30/2015	7/1/2013 - 6/30/2014
Restricted Stock Units (RSUs) [Member]
Summary of stock Issuances [Abstract]
Period restricted stocks will vest ratably from date of grant			3 years
Restricted Stock Units (RSUs) [Member] | Class B [Member] | Outside Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total value of shares issued			440	$ 440
Restricted Stock Units (RSUs) [Member] | Class B [Member] | Executives [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total value of shares issued					$ 853
Shares issued (in shares)					36,646
Value of each share issued (in dollars per share)					$ 23.29

XML

Summary of Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2015
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, 2015

Reinsurance [Abstract]

Reinsurance

(3) Reinsurance:

The following table summarizes the Company’s transactions with reinsurers for the 2015 and 2014 comparative periods.

	2015		2014
Quarter ended March 31:
Premiums ceded to reinsurers	$	31,379	$	31,355
Losses and loss expenses
ceded to reinsurers		16,398		17,914
Commissions from reinsurers		7,614		6,315

XML

Debt (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Debt [Abstract]
Revolving line of credit limit	$ 40,000
Line of credit maturity date	Sep. 23, 2018
Period of fixed interest on line of credit at company's options	1 year
Outstanding drawings on line of credit	20,000	20,000
Effective interest rate (in hundredths)	1.27%
Remaining unused amount under line of credit	$ 20,000

XML

Reportable Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 Segment	Mar. 31, 2014
Reportable Segments [Abstract]
Number of reportable segments	2
Segment Reporting Information [Line Items]
Net Premiums Earned	$ 66,446	$ 63,842
Reconciliation from segment totals to consolidated [Abstract]
Income before federal income taxes	9,291	9,439
Reportable Segments [Member]
Segment Reporting Information [Line Items]
Direct and Assumed Premium Written	96,980	94,754
Net Premiums Earned	66,446	63,842
Segment Profit	6,924	7,230
Reconciliation from segment totals to consolidated [Abstract]
Segment profit	6,924	7,230
Reportable Segments [Member] | Property and Casualty Insurance [Member]
Segment Reporting Information [Line Items]
Direct and Assumed Premium Written	90,513	82,924
Net Premiums Earned	59,284	51,459
Segment Profit	6,324	5,342
Reconciliation from segment totals to consolidated [Abstract]
Segment profit	6,324	5,342
Reportable Segments [Member] | Reinsurance [Member]
Segment Reporting Information [Line Items]
Direct and Assumed Premium Written	6,467	11,830
Net Premiums Earned	7,162	12,383
Segment Profit	600	1,888
Reconciliation from segment totals to consolidated [Abstract]
Segment profit	600	1,888
Segment Reconciling Items [Member]
Reconciliation from segment totals to consolidated [Abstract]
Net investment income	2,815	2,294
Net gains on investments	3,743	4,070
Corporate expenses and other	$ (4,191)	$ (4,155)

XML

Fair Value (Details) (Recurring [Member], USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Fixed maturities [Abstract]
U.S. government obligations	$ 112,820	$ 101,094
Residential mortgage-backed securities	6,066	6,066
Commercial mortgage-backed securities	34,465	36,440
State and municipal obligations	116,612	113,777
Corporate securities	152,093	164,068
Options embedded in convertible securities	2,755	2,898
Foreign government obligations	25,632	27,466
Total fixed maturities	450,443	451,809
Equity securities [Abstract]
Financial institutions	24,144	25,343
Industrial & miscellaneous	138,447	136,764
Total equity securities	162,591	162,107
Short term	2,968	2,966
Cash equivalents	46,384	59,309
Total fair value	662,386	676,191
Level 1 [Member]
Fixed maturities [Abstract]
U.S. government obligations	0	0
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	0	0
Equity securities [Abstract]
Financial institutions	24,144	25,343
Industrial & miscellaneous	138,447	136,764
Total equity securities	162,591	162,107
Short term	2,968	2,966
Cash equivalents	0	0
Total fair value	165,559	165,073
Level 2 [Member]
Fixed maturities [Abstract]
U.S. government obligations	112,820	101,094
Residential mortgage-backed securities	6,066	6,066
Commercial mortgage-backed securities	34,007	36,440
State and municipal obligations	116,612	113,777
Corporate securities	139,249	151,860
Options embedded in convertible securities	2,755	2,898
Foreign government obligations	25,632	27,466
Total fixed maturities	437,141	439,601
Equity securities [Abstract]
Financial institutions	0	0
Industrial & miscellaneous	0	0
Total equity securities	0	0
Short term	0	0
Cash equivalents	46,384	59,309
Total fair value	483,525	498,910
Level 3 [Member]
Fixed maturities [Abstract]
U.S. government obligations	0	0
Residential mortgage-backed securities	0	0
Commercial mortgage-backed securities	458	0
State and municipal obligations	0	0
Corporate securities	12,844	12,208
Options embedded in convertible securities	0	0
Foreign government obligations	0	0
Total fixed maturities	13,302	12,208
Equity securities [Abstract]
Financial institutions	0	0
Industrial & miscellaneous	0	0
Total equity securities	0	0
Short term	0	0
Cash equivalents	0	0
Total fair value	$ 13,302	$ 12,208

XML

Fair Value, Unobservable Input Reconciliation (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Fair value assets measured on recurring basis unobservable input reconciliation calculation [Roll Forward]
Beginning of period balance	$ 12,208	$ 0
Total gains or losses (realized or unrealized) included in income	66	0
Purchases	1,002	0
Settlements	0	0
Transfers into level 3	26	12,208
End of period balance	$ 13,302	$ 12,208

XML

Investments

3 Months Ended

Mar. 31, 2015

Investments [Abstract]

Investments

(2) Investments:

The following is a summary of available-for-sale securities at March 31, 2015 and December 31, 2014:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
March 31, 2015
Fixed maturities
U.S. government obligations	$	112,820	$	112,506	$	322	$	(8	)	$	314
Residential mortgage-backed securities		6,066		5,820		272		(26	)		246
Commercial mortgage-backed securities		34,465		33,635		1,004		(174	)		830
States and municipal obligations		116,612		115,890		962		(240	)		722
Corporate securities		154,848		157,921		3,084		(6,157	)		(3,073	)
Foreign government obligations		25,632		27,027		154		(1,549	)		(1,395	)
Total fixed maturities		450,443		452,799		5,798		(8,154	)		(2,356	)
Equity securities:
Financial institutions		24,144		9,732		14,500		(88	)		14,412
Industrial & miscellaneous		138,447		69,000		71,245		(1,798	)		69,447
Total equity securities		162,591		78,732		85,745		(1,886	)		83,859
Total	$	613,034	$	531,531	$	91,543	$	(10,040	)		81,503
							Applicable federal income taxes				(28,527	)
							Net unrealized gains - net of tax			$	52,976
December 31, 2014
Fixed maturities
U.S. government obligations	$	101,094	$	101,058	$	108	$	(72	)	$	36
Residential mortgage-backed securities		6,066		5,830		273		(37	)		236
Commercial mortgage-backed securities		36,440		36,210		630		(400	)		230
State and municipal obligations		113,777		113,133		784		(140	)		644
Corporate securities		166,966		170,822		2,005		(5,861	)		(3,856	)
Foreign government obligations		27,466		28,332		114		(980	)		(866	)
Total fixed maturities		451,809		455,385		3,914		(7,490	)		(3,576	)
Equity securities:
Financial institutions		25,343		10,100		15,303		(60	)		15,243
Industrial & miscellaneous		136,764		68,678		70,260		(2,174	)		68,086
Total equity securities		162,107		78,778		85,563		(2,234	)		83,329
Total	$	613,916	$	534,163	$	89,477	$	(9,724	)		79,753
							Applicable federal income taxes				(27,913	)
							Net unrealized gains - net of tax			$	51,840

The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at March 31, 2015 and December 31, 2014, 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, 2015							December 31, 2014
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		340	$	91,663	$	(6,530	)		591	$	176,756	$	(6,083	)
Greater than 12 months		99		21,274		(1,624	)		140		27,667		(1,407	)
Total fixed maturities		439		112,937		(8,154	)		731		204,423		(7,490	)
Equity securities:
12 months or less		30		17,585		(1,633	)		33		13,538		(2,170	)
Greater than 12 months		6		850		(253	)		3		686		(64	)
Total equity securities		36		18,435		(1,886	)		36		14,224		(2,234	)
Total fixed maturity and equity securities		475	$	131,372	$	(10,040	)		767	$	218,647	$	(9,724	)

The fair value and the cost or amortized costs of fixed maturity investments at March 31, 2015, 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	$	90,662	$	91,130
Excess of one year to five years		229,905		233,545
Excess of five years to ten years		42,162		42,552
Excess of ten years		9,305		8,790
Contractual maturities		372,034		376,017
Asset-backed securities		78,409		76,782
Total	$	450,443	$	452,799

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
	2015			2014
Fixed maturities:
Gross gains	$	1,147		$	1,839
Gross losses		(1,933	)		(1,226	)
Net realized gains (losses)		(786	)		613
Equity securities:
Gross gains		749			741
Gross losses		(753	)		(352	)
Net realized gains (losses)		(4	)		389
Limited partnerships - net gain		4,533			3,068
Totals	$	3,743		$	4,070

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

	Three Months Ended
	March 31
	2015			2014
Realized net gains (losses) on the disposal of securities	$	(288	)	$	1,195
Mark-to-market adjustment		(288	)		(200	)
Equity in gains of limited partnership
investments - realized and unrealized		4,533			3,068
Impairment:
Write-downs based upon objective criteria		(214	)		(105	)
Recovery of prior write-downs
upon sale or disposal		-			112
Totals	$	3,743		$	4,070

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, 2015 includes an estimated $1,987 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, 2015 includes approximately $15,234 of accumulated net unrealized gains reported to the Company as part of the underlying assets of the various limited partnerships. Shareholders’ equity at March 31, 2015 includes approximately $30,869, net of federal income taxes, of reported earnings which remain undistributed by limited partnerships.

As of March 31, 2015, the Company had committed funds totaling $31,500 to five separate borrowers related to five bridge loan agreements.  The Company retains possession of these funds which will only be loaned in the unlikely event that long-term financing is unavailable to the counter party in the market.

XML

Fair Value, Balance Sheet Grouping (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Carrying Value [Member]
Assets [Abstract]
Limited partnerships	$ 84,569	$ 81,230
Liabilities [Abstract]
Short-term borrowings	20,000	20,000
Fair Value [Member]
Assets [Abstract]
Limited partnerships	84,569	81,230
Liabilities [Abstract]
Short-term borrowings	20,000	20,000
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	20,000	20,000
Fair Value [Member] | Level 3 [Member]
Assets [Abstract]
Limited partnerships	84,569	81,230
Liabilities [Abstract]
Short-term borrowings	$ 0	$ 0

XML

Unaudited Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Investments:
Fixed maturities	$ 450,443	$ 451,809
Equity securities	162,591	162,107
Limited partnerships	84,569	81,230
Short-term	2,968	2,966
Total Investments	700,571	698,112
Cash and cash equivalents	48,913	64,632
Accounts receivable	93,071	98,144
Reinsurance recoverable	214,122	220,221
Other assets	67,200	61,447
Current federal income taxes	2,581	1,691
Total Assets	1,126,458	1,144,247
Liabilities and shareholders' equity
Reserves for losses and loss expenses	505,887	506,102
Reserves for unearned premiums	33,011	35,019
Short-term borrowings	20,000	20,000
Accounts payable and accrued expenses	142,753	163,657
Deferred federal income taxes	21,523	19,973
Total Liabilities	723,174	744,751
Shareholders' equity:
Additional paid-in capital	52,816	51,854
Unrealized net gains on investments	52,976	51,840
Foreign exchange adjustment	(389)	390
Retained earnings	297,240	294,773
Shareholders' equity	403,284	399,496
Total liabilities and shareholders' equity	1,126,458	1,144,247
Class A voting [Member]
Shareholders' equity:
Common stock	112	112
Class B non-voting [Member]
Shareholders' equity:
Common stock	$ 529	$ 527

XML

Unaudited Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Unaudited Consolidated Statements of Cash Flows [Abstract]
Net cash provided by operating activities	$ 10,674	$ 9,160
Investing activities:
Purchases of available-for-sale investments	(126,146)	(104,263)
Proceeds from sales or maturities of available-for-sale investments	104,555	108,087
Net purchases of short-term investments	(3)	(203)
Other investing activities	(244)	(2,808)
Net cash provided by (used in) investing activities	(21,838)	813
Financing activities:
Dividends paid to shareholders	(3,776)	(3,753)
Net cash used in financing activities	(3,776)	(3,753)
Effect of foreign exchange rates on cash and cash equivalents	(779)	(501)
Increase (decrease) in cash and cash equivalents	(15,719)	5,719
Cash and cash equivalents at beginning of period	64,632	59,297
Cash and cash equivalents at end of period	$ 48,913	$ 65,016

XML

Fair Value (Tables)

3 Months Ended

Mar. 31, 2015

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, 2015:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	112,820	$	-	$	112,820	$	-
Residential mortgage-backed securities		6,066		-		6,066		-
Commercial mortgage-backed securities		34,465		-		34,007		458
State and municipal obligations		116,612		-		116,612		-
Corporate securities		152,093		-		139,249		12,844
Options embedded in convertible securities		2,755		-		2,755		-
Foreign government obligations		25,632		-		25,632		-
Total fixed maturities		450,443		-		437,141		13,302
Equity securities:
Financial institutions		24,144		24,144		-		-
Industrial & miscellaneous		138,447		138,447		-		-
Total equity securities		162,591		162,591		-		-
Short term		2,968		2,968		-		-
Cash equivalents		46,384		-		46,384		-
	$	662,386	$	165,559	$	483,525	$	13,302

As of December 31, 2014:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	101,094	$	-	$	101,094	$	-
Residential mortgage-backed securities		6,066		-		6,066		-
Commercial mortgage-backed securities		36,440		-		36,440		-
State and municipal obligations		113,777		-		113,777		-
Corporate securities		164,068		-		151,860		12,208
Options embedded in convertible securities		2,898		-		2,898		-
Foreign government obligations		27,466		-		27,466		-
Total fixed maturities		451,809		-		439,601		12,208
Equity securities:
Financial institutions		25,343		25,343		-		-
Industrial & miscellaneous		136,764		136,764		-		-
Total equity securities		162,107		162,107		-		-
Short term		2,966		2,966		-		-
Cash equivalents		59,309		-		59,309		-
	$	676,191	$	165,073	$	498,910	$	12,208

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

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, 2015 and for the year ended December 31, 2014:

	2015		2014
Beginning of period balance	$	12,208	$	-
Total  gains or losses (realized or unrealized)
included in income		66		-
Purchases		1,002		-
Settlements		-		-
Transfers into level 3		26		12,208
End of period balance	$	13,302	$	12,208

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, 2015 and December 31, 2014 are as follows:

	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
March 31, 2015
Assets:   Limited partnerships	$	84,569	$	-	$	-	$	84,569	$	84,569
Liabilities:   Short-term borrowings		20,000		-		20,000		-		20,000
December 31, 2014
Assets:   Limited partnerships		81,230		-		-		81,230		81,230
Liabilities:   Short-term borrowings		20,000		-		20,000		-		20,000

XML

Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2015

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 three months ending March 31, 2015:

				Unrealized
				holding gains on
	Foreign			available-for-sale
	Currency			securities		Total
Beginning balance	$	390		$	51,840	$	52,230
Other comprehensive income
before reclassifications		(779	)		622		(157	)
Amounts reclassified from
accumulated other
comprehensive income		-			514		514
Net current-period other
comprehensive income		(779	)		1,136		357
Ending balance	$	(389	)	$	52,976	$	52,587

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

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, 2015.  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.

XML

Unaudited Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
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)	12,397,344	12,356,389

XML

Subsequent Events

3 Months Ended

Mar. 31, 2015

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.

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2015	May 01, 2015
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 Information [Line Items]
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015
Class A (voting) [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		2,623,109
Class B (nonvoting) [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		12,397,344

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

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, 2015.  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.

XML

Unaudited Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Revenues
Net premiums earned	$ 66,446	$ 63,842
Net investment income	2,815	2,294
Commissions and other income	1,297	1,355
Net realized gains on investments, excluding impairment losses	3,957	4,175
Total other-than-temporary impairment losses on investments	(214)	(105)
Net realized gains on investments	3,743	4,070
Total revenue	74,301	71,561
Expenses
Losses and loss expenses incurred	41,646	39,289
Other operating expenses	23,364	22,833
Total expenses	65,010	62,122
Income before federal income taxes	9,291	9,439
Federal income taxes	3,048	3,078
Net income	$ 6,243	$ 6,361
Per share data:
Basic and diluted earnings (in dollars per share)	$ 0.42	$ 0.42
Dividends paid to shareholders (in dollars per share)	$ 0.25	$ 0.25
Reconciliation of shares outstanding:
Average shares outstanding - basic (in shares)	14,994	14,947
Dilutive effect of share equivalents (in shares)	24	28
Average shares outstanding - diluted (in shares)	15,018	14,975

XML

Taxes

3 Months Ended

Mar. 31, 2015

Taxes [Abstract]

Taxes

(6) Taxes:

As of March 31, 2015, the Company’s calendar years 2011 through 2014 remain subject to examination by the IRS.  The effective federal income tax rate differs from the normal statutory rate primarily as a result of tax-exempt investment income.

XML

Debt

3 Months Ended

Mar. 31, 2015

Debt [Abstract]

Debt

(5) Debt:

The Company maintains a revolving line of credit with a $40,000 limit and an expiration date of September 23, 2018.  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 $20,000 as of March 31, 2015 and $20,000 as of December 31, 2014.  At March 31, 2015, the effective interest rate was 1.27%.  The Company has $20,000 remaining unused under the line of credit at March 31, 2015. 

XML

Restricted Stock (Tables)

3 Months Ended

Mar. 31, 2015

Restricted Stock [Abstract]

Summary of stock issuances

The Company grants shares of class B restricted stock to the Company’s outside directors, in lieu of cash, as their annual retainer compensation.  The shares are distributed on the vesting date, one year following the date of grant, and have had an aggregate total value of $440 for each of the annual periods presented.  The table below provides detail of the stock issuances for 2013 and 2014:

				Value
				Per Share
Effective	Number of Shares	Vesting	Service	on Grant
Date	Issued	Date	Period	Date
5/7/2013	18,106	5/7/2014	7/1/2013 - 6/30/2014	$24.30
5/8/2014	17,237	5/8/2015	7/1/2014 - 6/30/2015	$25.53

XML

Investments (Tables)

3 Months Ended

Mar. 31, 2015

Investments [Abstract]

Summary of available for sale securities

The following is a summary of available-for-sale securities at March 31, 2015 and December 31, 2014:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
March 31, 2015
Fixed maturities
U.S. government obligations	$	112,820	$	112,506	$	322	$	(8	)	$	314
Residential mortgage-backed securities		6,066		5,820		272		(26	)		246
Commercial mortgage-backed securities		34,465		33,635		1,004		(174	)		830
States and municipal obligations		116,612		115,890		962		(240	)		722
Corporate securities		154,848		157,921		3,084		(6,157	)		(3,073	)
Foreign government obligations		25,632		27,027		154		(1,549	)		(1,395	)
Total fixed maturities		450,443		452,799		5,798		(8,154	)		(2,356	)
Equity securities:
Financial institutions		24,144		9,732		14,500		(88	)		14,412
Industrial & miscellaneous		138,447		69,000		71,245		(1,798	)		69,447
Total equity securities		162,591		78,732		85,745		(1,886	)		83,859
Total	$	613,034	$	531,531	$	91,543	$	(10,040	)		81,503
							Applicable federal income taxes				(28,527	)
							Net unrealized gains - net of tax			$	52,976
December 31, 2014
Fixed maturities
U.S. government obligations	$	101,094	$	101,058	$	108	$	(72	)	$	36
Residential mortgage-backed securities		6,066		5,830		273		(37	)		236
Commercial mortgage-backed securities		36,440		36,210		630		(400	)		230
State and municipal obligations		113,777		113,133		784		(140	)		644
Corporate securities		166,966		170,822		2,005		(5,861	)		(3,856	)
Foreign government obligations		27,466		28,332		114		(980	)		(866	)
Total fixed maturities		451,809		455,385		3,914		(7,490	)		(3,576	)
Equity securities:
Financial institutions		25,343		10,100		15,303		(60	)		15,243
Industrial & miscellaneous		136,764		68,678		70,260		(2,174	)		68,086
Total equity securities		162,107		78,778		85,563		(2,234	)		83,329
Total	$	613,916	$	534,163	$	89,477	$	(9,724	)		79,753
							Applicable federal income taxes				(27,913	)
							Net unrealized gains - net of tax			$	51,840

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, 2015 and December 31, 2014, 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, 2015							December 31, 2014
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		340	$	91,663	$	(6,530	)		591	$	176,756	$	(6,083	)
Greater than 12 months		99		21,274		(1,624	)		140		27,667		(1,407	)
Total fixed maturities		439		112,937		(8,154	)		731		204,423		(7,490	)
Equity securities:
12 months or less		30		17,585		(1,633	)		33		13,538		(2,170	)
Greater than 12 months		6		850		(253	)		3		686		(64	)
Total equity securities		36		18,435		(1,886	)		36		14,224		(2,234	)
Total fixed maturity and equity securities		475	$	131,372	$	(10,040	)		767	$	218,647	$	(9,724	)

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

The fair value and the cost or amortized costs of fixed maturity investments at March 31, 2015, 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	$	90,662	$	91,130
Excess of one year to five years		229,905		233,545
Excess of five years to ten years		42,162		42,552
Excess of ten years		9,305		8,790
Contractual maturities		372,034		376,017
Asset-backed securities		78,409		76,782
Total	$	450,443	$	452,799

Realized gains (losses) 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
	2015			2014
Fixed maturities:
Gross gains	$	1,147		$	1,839
Gross losses		(1,933	)		(1,226	)
Net realized gains (losses)		(786	)		613
Equity securities:
Gross gains		749			741
Gross losses		(753	)		(352	)
Net realized gains (losses)		(4	)		389
Limited partnerships - net gain		4,533			3,068
Totals	$	3,743		$	4,070

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
	2015			2014
Realized net gains (losses) on the disposal of securities	$	(288	)	$	1,195
Mark-to-market adjustment		(288	)		(200	)
Equity in gains of limited partnership
investments - realized and unrealized		4,533			3,068
Impairment:
Write-downs based upon objective criteria		(214	)		(105	)
Recovery of prior write-downs
upon sale or disposal		-			112
Totals	$	3,743		$	4,070

XML

Litigation, Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Litigation, Commitments and Contingencies [Abstract]

Litigation, Commitments and Contingencies

(9) Litigation, 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.

XML

Fair Value

3 Months Ended

Mar. 31, 2015

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, 2015:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	112,820	$	-	$	112,820	$	-
Residential mortgage-backed securities		6,066		-		6,066		-
Commercial mortgage-backed securities		34,465		-		34,007		458
State and municipal obligations		116,612		-		116,612		-
Corporate securities		152,093		-		139,249		12,844
Options embedded in convertible securities		2,755		-		2,755		-
Foreign government obligations		25,632		-		25,632		-
Total fixed maturities		450,443		-		437,141		13,302
Equity securities:
Financial institutions		24,144		24,144		-		-
Industrial & miscellaneous		138,447		138,447		-		-
Total equity securities		162,591		162,591		-		-
Short term		2,968		2,968		-		-
Cash equivalents		46,384		-		46,384		-
	$	662,386	$	165,559	$	483,525	$	13,302

As of December 31, 2014:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	101,094	$	-	$	101,094	$	-
Residential mortgage-backed securities		6,066		-		6,066		-
Commercial mortgage-backed securities		36,440		-		36,440		-
State and municipal obligations		113,777		-		113,777		-
Corporate securities		164,068		-		151,860		12,208
Options embedded in convertible securities		2,898		-		2,898		-
Foreign government obligations		27,466		-		27,466		-
Total fixed maturities		451,809		-		439,601		12,208
Equity securities:
Financial institutions		25,343		25,343		-		-
Industrial & miscellaneous		136,764		136,764		-		-
Total equity securities		162,107		162,107		-		-
Short term		2,966		2,966		-		-
Cash equivalents		59,309		-		59,309		-
	$	676,191	$	165,073	$	498,910	$	12,208

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.  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.  The Level 3 assets consist of a portfolio of corporate convertible bonds and commercial mortgage-backed securities.  The assets are valued using various unobservable inputs including extrapolated data, proprietary models and indicative quotes.

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

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, 2015 and for the year ended December 31, 2014:

	2015		2014
Beginning of period balance	$	12,208	$	-
Total  gains or losses (realized or unrealized)
included in income		66		-
Purchases		1,002		-
Settlements		-		-
Transfers into level 3		26		12,208
End of period balance	$	13,302	$	12,208

Transfers between levels, if any, are recorded as of the beginning of the reporting period.  There were no significant transfers of assets between Level 1 and Level 2 during the three months ended March 31, 2015 and 2014.

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 primarily 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, 2015 and December 31, 2014 are as follows:

	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
March 31, 2015
Assets:   Limited partnerships	$	84,569	$	-	$	-	$	84,569	$	84,569
Liabilities:   Short-term borrowings		20,000		-		20,000		-		20,000
December 31, 2014
Assets:   Limited partnerships		81,230		-		-		81,230		81,230
Liabilities:   Short-term borrowings		20,000		-		20,000		-		20,000

XML

Restricted Stock

3 Months Ended

Mar. 31, 2015

Restricted Stock [Abstract]

Restricted Stock

(8) Restricted Stock:

The Company grants shares of class B restricted stock to the Company’s outside directors, in lieu of cash, as their annual retainer compensation.  The shares are distributed on the vesting date, one year following the date of grant, and have had an aggregate total value of $440 for each of the annual periods presented.  The table below provides detail of the stock issuances for 2013 and 2014:

				Value
				Per Share
Effective	Number of Shares	Vesting	Service	on Grant
Date	Issued	Date	Period	Date
5/7/2013	18,106	5/7/2014	7/1/2013 - 6/30/2014	$24.30
5/8/2014	17,237	5/8/2015	7/1/2014 - 6/30/2015	$25.53

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

Effective February 4, 2015, the Company issued 36,646 shares of class B restricted stock to certain of the Company’s executives as a portion of compensation under the Company’s 2014 Executive Incentive Bonus Plan.  The restricted shares will vest ratably over a three year period from the date of grant with acceleration for retirement eligible recipients due to the non-substantive post-grant date vesting clause per Accounting Standards Codification 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 $23.29 per share representing a total value of $853.  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 2014 Executive Incentive Bonus Plan.

XML

Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2015

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 three months ending March 31, 2015:

				Unrealized
				holding gains on
	Foreign			available-for-sale
	Currency			securities		Total
Beginning balance	$	390		$	51,840	$	52,230
Other comprehensive income
before reclassifications		(779	)		622		(157	)
Amounts reclassified from
accumulated other
comprehensive income		-			514		514
Net current-period other
comprehensive income		(779	)		1,136		357
Ending balance	$	(389	)	$	52,976	$	52,587

XML

Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Total accumulated other comprehensive income, beginning balance	$ 52,230
Other comprehensive income before reclassifications	(157)
Amounts reclassified from accumulated other comprehensive income	514
Other comprehensive income	357	4,682
Total accumulated other comprehensive income, ending balance	52,587
Foreign Currency [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Total accumulated other comprehensive income, beginning balance	390
Other comprehensive income before reclassifications	(779)
Amounts reclassified from accumulated other comprehensive income	0
Other comprehensive income	(779)
Total accumulated other comprehensive income, ending balance	(389)
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	51,840
Other comprehensive income before reclassifications	622
Amounts reclassified from accumulated other comprehensive income	514
Other comprehensive income	1,136
Total accumulated other comprehensive income, ending balance	$ 52,976

XML

Reportable Segments (Tables)

3 Months Ended

Mar. 31, 2015

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.

	2015						2014
	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	$	90,513	$	59,284	$	6,324	$	82,924	$	51,459	$	5,342
Reinsurance		6,467		7,162		600		11,830		12,383		1,888
Totals	$	96,980	$	66,446	$	6,924	$	94,754	$	63,842	$	7,230

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
	2015			2014
Profit:
Segment profit	$	6,924		$	7,230
Net investment income		2,815			2,294
Net gains on investments		3,743			4,070
Corporate expenses and other		(4,191	)		(4,155	)
Income before federal income taxes	$	9,291		$	9,439

XML

Investments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2015 Security Borrower Agreement	Mar. 31, 2014	Dec. 31, 2014 Security
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Cost or amortized cost	$ 452,799
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Applicable federal income taxes	(28,527)		(27,913)
Net unrealized gains - net of tax	52,976		51,840
Available-for-sale securities continuous unrealized loss position [Abstract]
Number of Securities, total	475		767
Available-for-sale securities continuous unrealized loss position, Fair Value [Abstract]
Fair value, total	131,372		218,647
Available-for-sale securities continuous unrealized loss position, aggregate losses [Abstract]
Gross unrealized loss, total	(10,040)		(9,724)
Available-for-sale securities debt maturities fair value [Abstract]
One year or less, Fair Value	90,662
Excess of one year to five years, Fair Value	229,905
Excess of five years to ten years, Fair Value	42,162
Excess of ten years, Fair Value	9,305
Contractual maturities, Fair Value	372,034
Asset-backed securities, Fair Value	78,409
Total, Fair Value	450,443
Available-for-sale securities debt maturities amortized cost basis [Abstract]
One year or less, Cost or Amortized Cost Basis	91,130
Excess of one year to five years, Cost or Amortized Cost Basis	233,545
Excess of five years to ten years, Cost or Amortized Cost Basis	42,552
Excess of ten years, Cost or Amortized Cost Basis	8,790
Contractual maturities, Cost or Amortized Cost Basis	376,017
Asset-backed securities, Cost or Amortized Cost Basis	76,782
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Limited partnerships - net gain	4,533	3,068
Net realized gains on investments	3,743	4,070
Available for sale securities gain loss activity [Abstract]
Realized net gains (losses) on the disposal of securities	(288)	1,195
Mark-to-market adjustment	(288)	(200)
Equity in gains of limited partnership investments - realized and unrealized	4,533	3,068
Write-downs based upon objective criteria	(214)	(105)
Recovery of prior write-downs upon sale or disposal	0	112
Net realized gains on investments	3,743	4,070
Net unrealized gain (loss) on investments	1,987
Net unrealized gains in limited partnership	15,234
Undistributed earnings of limited partnership, net of taxes	30,869
Committed funds for bridge loans	31,500
Number of separate borrowers related to bridge loan agreements	5
Number of bridge loan agreements	5
U.S. government obligations [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	112,820		101,094
Cost or amortized cost	112,506		101,058
Gross unrealized gains	322		108
Gross unrealized losses	(8)		(72)
Net unrealized gains (losses)	314		36
Residential mortgage-backed securities [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	6,066		6,066
Cost or amortized cost	5,820		5,830
Gross unrealized gains	272		273
Gross unrealized losses	(26)		(37)
Net unrealized gains (losses)	246		236
Commercial mortgage-backed securities [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	34,465		36,440
Cost or amortized cost	33,635		36,210
Gross unrealized gains	1,004		630
Gross unrealized losses	(174)		(400)
Net unrealized gains (losses)	830		230
States and municipal obligations [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	116,612		113,777
Cost or amortized cost	115,890		113,133
Gross unrealized gains	962		784
Gross unrealized losses	(240)		(140)
Net unrealized gains (losses)	722		644
Corporate securities [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	154,848		166,966
Cost or amortized cost	157,921		170,822
Gross unrealized gains	3,084		2,005
Gross unrealized losses	(6,157)		(5,861)
Net unrealized gains (losses)	(3,073)		(3,856)
Foreign government obligations [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	25,632		27,466
Cost or amortized cost	27,027		28,332
Gross unrealized gains	154		114
Gross unrealized losses	(1,549)		(980)
Net unrealized gains (losses)	(1,395)		(866)
Total fixed maturities [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	450,443		451,809
Cost or amortized cost	452,799		455,385
Gross unrealized gains	5,798		3,914
Gross unrealized losses	(8,154)		(7,490)
Net unrealized gains (losses)	(2,356)		(3,576)
Available-for-sale securities continuous unrealized loss position [Abstract]
Number of Securities, 12 months or less	340		591
Number of Securities, Greater than 12 months	99		140
Number of Securities, total	439		731
Available-for-sale securities continuous unrealized loss position, Fair Value [Abstract]
Fair value, 12 months or less	91,663		176,756
Fair value, Greater than 12 months	21,274		27,667
Fair value, total	112,937		204,423
Available-for-sale securities continuous unrealized loss position, aggregate losses [Abstract]
Gross unrealized loss, 12 months or less	(6,530)		(6,083)
Gross unrealized loss, Greater than 12 months	(1,624)		(1,407)
Gross unrealized loss, total	(8,154)		(7,490)
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Gross gains	1,147	1,839
Gross losses	(1,933)	(1,226)
Net realized gains (losses)	(786)	613
Financial institutions [Member]
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract]
Fair value	24,144		25,343
Cost or amortized cost	9,732		10,100
Gross unrealized gains	14,500		15,303
Gross unrealized losses	(88)		(60)
Net unrealized gains (losses)	14,412		15,243
Industrial & miscellaneous [Member]
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract]
Fair value	138,447		136,764
Cost or amortized cost	69,000		68,678
Gross unrealized gains	71,245		70,260
Gross unrealized losses	(1,798)		(2,174)
Net unrealized gains (losses)	69,447		68,086
Total equity securities [Member]
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract]
Fair value	162,591		162,107
Cost or amortized cost	78,732		78,778
Gross unrealized gains	85,745		85,563
Gross unrealized losses	(1,886)		(2,234)
Net unrealized gains (losses)	83,859		83,329
Available-for-sale securities continuous unrealized loss position [Abstract]
Number of Securities, 12 months or less	30		33
Number of Securities, Greater than 12 months	6		3
Number of Securities, total	36		36
Available-for-sale securities continuous unrealized loss position, Fair Value [Abstract]
Fair value, 12 months or less	17,585		13,538
Fair value, Greater than 12 months	850		686
Fair value, total	18,435		14,224
Available-for-sale securities continuous unrealized loss position, aggregate losses [Abstract]
Gross unrealized loss, 12 months or less	(1,633)		(2,170)
Gross unrealized loss, Greater than 12 months	(253)		(64)
Gross unrealized loss, total	(1,886)		(2,234)
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Gross gains	749	741
Gross losses	(753)	(352)
Net realized gains (losses)	(4)	389
Total available-for-sale securities [Member]
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Fair value	613,034		613,916
Cost or amortized cost	531,531		534,163
Gross unrealized gains	91,543		89,477
Gross unrealized losses	(10,040)		(9,724)
Net unrealized gains (losses)	$ 81,503		$ 79,753

XML

Unaudited Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Unaudited Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 6,243	$ 6,361
Unrealized net gains on securities:
Unrealized net gains arising during the period	622	5,834
Less: reclassification adjustment for net gains (losses) included in net income	(514)	651
Change in unrealized gains on investments	1,136	5,183
Foreign currency translation adjustments	(779)	(501)
Other comprehensive income	357	4,682
Comprehensive income	$ 6,600	$ 11,043

XML

Reportable Segments

3 Months Ended

Mar. 31, 2015

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, workers’ compensation coverage to small businesses and professional liability products on a selective basis.

The Reinsurance segment currently accepts professional liability cessions from other insurance companies.  From 1992 until July 1, 2014, the Reinsurance segment accepted property cessions from other insurance companies and retrocessions from reinsurance companies, principally reinsuring against catastrophes.  Final exposure to property catastrophe losses will expire on June 30, 2015.

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.

	2015						2014
	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	$	90,513	$	59,284	$	6,324	$	82,924	$	51,459	$	5,342
Reinsurance		6,467		7,162		600		11,830		12,383		1,888
Totals	$	96,980	$	66,446	$	6,924	$	94,754	$	63,842	$	7,230

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

	Three Months Ended
	March 31
	2015			2014
Profit:
Segment profit	$	6,924		$	7,230
Net investment income		2,815			2,294
Net gains on investments		3,743			4,070
Corporate expenses and other		(4,191	)		(4,155	)
Income before federal income taxes	$	9,291		$	9,439

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.

XML

Reinsurance (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Reinsurance [Abstract]
Premiums ceded to reinsurers	$ 31,379	$ 31,355
Losses and loss expenses ceded to reinsurers	16,398	17,914
Commissions from reinsurers	$ 7,614	$ 6,315

XML

Reinsurance (Tables)

3 Months Ended

Mar. 31, 2015

Reinsurance [Abstract]

Reinsurance

The following table summarizes the Company’s transactions with reinsurers for the 2015 and 2014 comparative periods.

	2015		2014
Quarter ended March 31:
Premiums ceded to reinsurers	$	31,379	$	31,355
Losses and loss expenses
ceded to reinsurers		16,398		17,914
Commissions from reinsurers		7,614		6,315