☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
INDIANA
|
35-0160330
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification Number)
|
|
111 Congressional Boulevard, Carmel, Indiana
|
46032
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Securities registered pursuant to Section 12(b) of the Act:
|
||
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Class A Common Stock, No Par Value
|
PTVCA
|
The Nasdaq Stock Market LLC
|
Class B Common Stock, No Par Value
|
PTVCB
|
The Nasdaq Stock Market LLC
|
Common Stock, No Par Value:
|
Class A (voting)
|
2,603,350
|
||
Class B (non-voting)
|
11,579,546
|
|||
14,182,896
|
March 31
2020
|
December 31
2019
|
|||||||
Assets
|
||||||||
Investments:
|
||||||||
Fixed income securities
|
$
|
746,856
|
$
|
795,538
|
||||
Equity securities
|
70,320
|
76,812
|
||||||
Limited partnerships
|
7,981
|
23,292
|
||||||
Commercial mortgage loans
|
11,882
|
11,782
|
||||||
Short-term and other
|
1,000
|
1,000
|
||||||
838,039
|
908,424
|
|||||||
Cash and cash equivalents
|
89,318
|
67,851
|
||||||
Restricted cash and cash equivalents
|
10,813
|
21,037
|
||||||
Accounts receivable
|
89,510
|
111,762
|
||||||
Reinsurance recoverable
|
415,021
|
432,067
|
||||||
Other assets
|
94,009
|
86,306
|
||||||
Current federal income taxes recoverable
|
4,381
|
4,878
|
||||||
Deferred federal income taxes
|
11,004
|
2,035
|
||||||
Total Assets
|
$
|
1,552,095
|
$
|
1,634,360
|
||||
Liabilities and shareholders' equity
|
||||||||
Reserves for losses and loss expenses
|
$
|
1,001,599
|
$
|
988,305
|
||||
Reserves for unearned premiums
|
70,686
|
74,810
|
||||||
Reinsurance payable
|
47,562
|
65,835
|
||||||
Short-term borrowings
|
20,000
|
20,000
|
||||||
Accounts payable and other liabilities
|
106,865
|
121,094
|
||||||
Total Liabilities
|
1,246,712
|
1,270,044
|
||||||
Shareholders' equity:
|
||||||||
Common stock-no par value:
|
||||||||
Class A voting -- authorized 3,000,000 shares; outstanding -- 2020 - 2,603,350; 2019 - 2,603,350
|
111
|
111
|
||||||
Class B non-voting -- authorized 20,000,000 shares; outstanding -- 2020 - 11,579,546; 2019 - 11,675,956
|
495
|
499
|
||||||
Additional paid-in capital
|
53,045
|
53,349
|
||||||
Accumulated other comprehensive income (loss)
|
(12,179
|
)
|
9,369
|
|||||
Retained earnings
|
263,911
|
300,988
|
||||||
Total Shareholders' Equity
|
305,383
|
364,316
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
1,552,095
|
$
|
1,634,360
|
Three Months Ended
March 31
|
||||||||
2020
|
2019
|
|||||||
Revenues
|
||||||||
Net premiums earned
|
$
|
109,659
|
$
|
110,013
|
||||
Net investment income
|
7,236
|
6,232
|
||||||
Commissions and other income
|
1,663
|
2,064
|
||||||
Net realized losses on investments, excluding impairment losses
|
(4,787
|
)
|
(39
|
)
|
||||
Impairment losses on investments
|
(40
|
)
|
(260
|
)
|
||||
Net unrealized gains (losses) on equity securities and limited partnership investments
|
(22,929
|
)
|
6,327
|
|||||
Net realized and unrealized gains (losses) on investments
|
(27,756
|
)
|
6,028
|
|||||
90,802
|
124,337
|
|||||||
Expenses
|
||||||||
Losses and loss expenses incurred
|
81,831
|
87,122
|
||||||
Other operating expenses
|
34,110
|
33,701
|
||||||
115,941
|
120,823
|
|||||||
Income (loss) before federal income tax expense (benefit)
|
(25,139
|
)
|
3,514
|
|||||
Federal income tax expense (benefit)
|
(2,983
|
)
|
766
|
|||||
Net income (loss)
|
$
|
(22,156
|
)
|
$
|
2,748
|
|||
Per share data:
|
||||||||
Basic and diluted earnings (loss)
|
$
|
(1.56
|
)
|
$
|
.18
|
|||
Reconciliation of shares outstanding:
|
||||||||
Average shares outstanding - basic
|
14,169
|
14,848
|
||||||
Dilutive effect of share equivalents
|
–
|
30
|
||||||
Average shares outstanding - diluted
|
14,169
|
14,878
|
Three Months Ended
March 31
|
||||||||
2020
|
2019
|
|||||||
Net income (loss)
|
$
|
(22,156
|
)
|
$
|
2,748
|
|||
Other comprehensive income (loss), net of tax:
|
||||||||
Unrealized net gains (losses) on fixed income securities
|
(20,861
|
)
|
8,456
|
|||||
Foreign currency translation adjustments
|
(687
|
)
|
307
|
|||||
Other comprehensive income (loss)
|
(21,548
|
)
|
8,763
|
|||||
Comprehensive income (loss)
|
$
|
(43,704
|
)
|
$
|
11,511
|
|
Common Stock
|
Additional
|
Accumulated Other
|
|||||||||||||||||||||||||||||
|
Class A
|
Class B
|
Paid-in
|
Comprehensive
|
Retained
|
Total
|
||||||||||||||||||||||||||
Description
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Income (Loss)
|
Earnings
|
Equity
|
||||||||||||||||||||||||
Balance at December 31, 2019
|
2,603
|
$
|
111
|
11,676
|
$
|
499
|
$
|
53,349
|
$
|
9,369
|
$
|
300,988
|
$
|
364,316
|
||||||||||||||||||
Cumulative effect of the adoption of updated accounting guidance for credit losses, net of tax
|
–
|
–
|
–
|
–
|
–
|
–
|
(12,281
|
)
|
(12,281
|
)
|
||||||||||||||||||||||
Net loss
|
–
|
–
|
–
|
–
|
–
|
–
|
(22,156
|
)
|
(22,156
|
)
|
||||||||||||||||||||||
Foreign currency translation adjustment, net of tax
|
–
|
–
|
–
|
–
|
–
|
(687
|
)
|
–
|
(687
|
)
|
||||||||||||||||||||||
Change in unrealized gain (loss) on investments, net of tax
|
–
|
–
|
–
|
–
|
–
|
(20,861
|
)
|
–
|
(20,861
|
)
|
||||||||||||||||||||||
Common stock dividends
|
–
|
–
|
–
|
–
|
–
|
–
|
(1,426
|
)
|
(1,426
|
)
|
||||||||||||||||||||||
Repurchase of common stock
|
–
|
–
|
(127
|
)
|
(5
|
)
|
(563
|
)
|
–
|
(1,214
|
)
|
(1,782
|
)
|
|||||||||||||||||||
Restricted stock grants
|
–
|
–
|
31
|
1
|
259
|
–
|
–
|
260
|
||||||||||||||||||||||||
Balance at March 31, 2020
|
2,603
|
$
|
111
|
11,580
|
$
|
495
|
$
|
53,045
|
$
|
(12,179
|
)
|
$
|
263,911
|
$
|
305,383
|
|
Common Stock
|
Additional
|
Accumulated Other
|
|||||||||||||||||||||||||||||
|
Class A
|
Class B
|
Paid-in
|
Comprehensive
|
Retained
|
Total
|
||||||||||||||||||||||||||
Description
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Income (Loss)
|
Earnings
|
Equity
|
||||||||||||||||||||||||
Balance at December 31, 2018
|
2,615
|
$
|
112
|
12,254
|
$
|
522
|
$
|
54,720
|
$
|
(7,347
|
)
|
$
|
308,075
|
$
|
356,082
|
|||||||||||||||||
Net income
|
–
|
–
|
–
|
–
|
–
|
–
|
2,748
|
2,748
|
||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax
|
–
|
–
|
–
|
–
|
–
|
307
|
–
|
307
|
||||||||||||||||||||||||
Change in unrealized gain (loss) on investments, net of tax
|
–
|
–
|
–
|
–
|
–
|
8,456
|
–
|
8,456
|
||||||||||||||||||||||||
Common stock dividends
|
–
|
–
|
–
|
–
|
–
|
–
|
(1,493
|
)
|
(1,493
|
)
|
||||||||||||||||||||||
Repurchase of common stock
|
–
|
–
|
(25
|
)
|
(1
|
)
|
(108
|
)
|
–
|
(359
|
)
|
(468
|
)
|
|||||||||||||||||||
Restricted stock grants
|
–
|
–
|
20
|
1
|
437
|
–
|
–
|
438
|
||||||||||||||||||||||||
Balance at March 31, 2019
|
2,615
|
$
|
112
|
12,249
|
$
|
522
|
$
|
55,049
|
$
|
1,416
|
$
|
308,971
|
$
|
366,070
|
Three Months Ended
March 31
|
||||||||
2020
|
2019
|
|||||||
Operating activities
|
||||||||
Net income (loss)
|
$
|
(22,156
|
)
|
$
|
2,748
|
|||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
|
20,844
|
8,657
|
||||||
Net cash provided by (used in) operating activities
|
(1,312
|
)
|
11,405
|
|||||
Investing activities
|
||||||||
Purchases of fixed income and equity securities
|
(82,641
|
)
|
(140,645
|
)
|
||||
Distributions from limited partnerships
|
14,636
|
17,214
|
||||||
Proceeds from maturities
|
31,088
|
16,776
|
||||||
Proceeds from sales of fixed income securities
|
48,552
|
52,199
|
||||||
Proceeds from sales of equity securities
|
5,480
|
9,169
|
||||||
Purchase of commercial mortgage loans
|
(368
|
)
|
(1,172
|
)
|
||||
Proceeds from commercial mortgage loans
|
72
|
–
|
||||||
Purchases of property and equipment
|
(369
|
)
|
(797
|
)
|
||||
Net cash provided by (used in) investing activities
|
16,450
|
(47,256
|
)
|
|||||
Financing activities
|
||||||||
Dividends paid to shareholders
|
(1,426
|
)
|
(1,493
|
)
|
||||
Repurchase of common shares
|
(1,782
|
)
|
(468
|
)
|
||||
Net cash used in financing activities
|
(3,208
|
)
|
(1,961
|
)
|
||||
Effect of foreign exchange rates on cash and cash equivalents
|
(687
|
)
|
307
|
|||||
Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents
|
11,243
|
(37,505
|
)
|
|||||
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period
|
88,888
|
170,811
|
||||||
Cash, cash equivalents and restricted cash and cash equivalents at end of period
|
$
|
100,131
|
$
|
133,306
|
Fair
Value
|
Cost or
Amortized Cost
|
Gross
Unrealized Gains
|
Gross
Unrealized Losses
|
Net Unrealized
Gains (Losses)
|
||||||||||||||||
March 31, 2020
|
||||||||||||||||||||
Fixed income securities
|
||||||||||||||||||||
Agency collateralized mortgage obligations
|
$
|
10,460
|
$
|
11,016
|
$
|
390
|
$
|
(946
|
)
|
$
|
(556
|
)
|
||||||||
Agency mortgage-backed securities
|
58,619
|
55,675
|
2,950
|
(6
|
)
|
2,944
|
||||||||||||||
Asset-backed securities
|
93,369
|
107,774
|
237
|
(14,642
|
)
|
(14,405
|
)
|
|||||||||||||
Bank loans
|
10,187
|
12,455
|
–
|
(2,268
|
)
|
(2,268
|
)
|
|||||||||||||
Certificates of deposit
|
2,835
|
2,835
|
–
|
–
|
–
|
|||||||||||||||
Collateralized mortgage obligations
|
4,076
|
4,327
|
19
|
(270
|
)
|
(251
|
)
|
|||||||||||||
Corporate securities
|
262,160
|
263,356
|
4,682
|
(5,878
|
)
|
(1,196
|
)
|
|||||||||||||
Mortgage-backed securities
|
47,993
|
53,697
|
74
|
(5,778
|
)
|
(5,704
|
)
|
|||||||||||||
Municipal obligations
|
39,132
|
38,474
|
916
|
(258
|
)
|
658
|
||||||||||||||
Non-U.S. government obligations
|
28,842
|
27,992
|
850
|
–
|
850
|
|||||||||||||||
U.S. government obligations
|
189,183
|
179,850
|
9,333
|
–
|
9,333
|
|||||||||||||||
Total fixed income securities
|
$
|
746,856
|
$
|
757,451
|
$
|
19,451
|
$
|
(30,046
|
)
|
$
|
(10,595
|
)
|
Fair
Value
|
Cost or
Amortized Cost
|
Gross
Unrealized Gains
|
Gross
Unrealized Losses
|
Net Unrealized
Gains (Losses)
|
||||||||||||||||
December 31, 2019
|
||||||||||||||||||||
Fixed income securities
|
||||||||||||||||||||
Agency collateralized mortgage obligations
|
$
|
12,093
|
$
|
11,557
|
$
|
536
|
$
|
–
|
$
|
536
|
||||||||||
Agency mortgage-backed securities
|
56,280
|
54,286
|
2,005
|
(11
|
)
|
1,994
|
||||||||||||||
Asset-backed securities
|
106,397
|
107,028
|
499
|
(1,130
|
)
|
(631
|
)
|
|||||||||||||
Bank loans
|
14,568
|
14,932
|
106
|
(470
|
)
|
(364
|
)
|
|||||||||||||
Certificates of deposit
|
2,835
|
2,835
|
–
|
–
|
–
|
|||||||||||||||
Collateralized mortgage obligations
|
5,616
|
5,123
|
493
|
–
|
493
|
|||||||||||||||
Corporate securities
|
281,381
|
274,340
|
7,492
|
(451
|
)
|
7,041
|
||||||||||||||
Mortgage-backed securities
|
47,463
|
46,685
|
1,047
|
(269
|
)
|
778
|
||||||||||||||
Municipal obligations
|
36,286
|
35,749
|
684
|
(147
|
)
|
537
|
||||||||||||||
Non-U.S. government obligations
|
24,179
|
23,889
|
290
|
–
|
290
|
|||||||||||||||
U.S. government obligations
|
208,440
|
206,623
|
2,891
|
(1,074
|
)
|
1,817
|
||||||||||||||
Total fixed income securities
|
$
|
795,538
|
$
|
783,047
|
$
|
16,043
|
$
|
(3,552
|
)
|
$
|
12,491
|
March 31, 2020
|
December 31, 2019
|
|||||||||||||||||||||||
Number of
Securities
|
Fair
Value
|
Gross
Unrealized Loss
|
Number of
Securities
|
Fair
Value
|
Gross
Unrealized Loss
|
|||||||||||||||||||
Fixed income securities:
|
||||||||||||||||||||||||
12 months or less
|
270
|
$
|
225,745
|
$
|
(25,029
|
)
|
88
|
$
|
108,387
|
$
|
(2,452
|
)
|
||||||||||||
Greater than 12 months
|
20
|
20,410
|
(5,017
|
)
|
69
|
66,860
|
(1,100
|
)
|
||||||||||||||||
Total fixed income securities
|
290
|
$
|
246,155
|
$
|
(30,046
|
)
|
157
|
$
|
175,247
|
$
|
(3,552
|
)
|
||||||||||||
Fair
Value
|
Cost or
Amortized Cost
|
|||||||
One year or less
|
$
|
97,469
|
$
|
96,889
|
||||
Excess of one year to five years
|
293,569
|
289,041
|
||||||
Excess of five years to ten years
|
132,550
|
130,161
|
||||||
Excess of ten years
|
12,828
|
13,198
|
||||||
Contractual maturities
|
536,416
|
529,289
|
||||||
Asset-backed securities
|
210,440
|
228,162
|
||||||
Total
|
$
|
746,856
|
$
|
757,451
|
Three Months Ended
March 31
|
||||||||
2020
|
2019
|
|||||||
Gross gains on available-for-sale fixed income securities during the period
|
$
|
2,652
|
$
|
3,171
|
||||
Gross losses on available-for-sale fixed income securities during the period
|
(4,741
|
)
|
(3,527
|
)
|
||||
Impairment losses on investments
|
(40
|
)
|
(260
|
)
|
||||
Change in value of limited partnership investments
|
(676
|
)
|
408
|
|||||
Gains (losses) on equity securities:
|
||||||||
Realized gains (losses) on equity securities sold during the period
|
(2,698
|
)
|
317
|
|||||
Unrealized gains (losses) on equity securities held at the end of the period
|
(22,253
|
)
|
5,919
|
|||||
Realized and unrealized gains (losses) on equity securities during the period
|
(24,951
|
)
|
6,236
|
|||||
Net realized and unrealized gains (losses) on investments
|
$
|
(27,756
|
)
|
$
|
6,028
|
2020
|
2019
|
|||||||
Three months ended March 31:
|
||||||||
Premiums ceded to reinsurers
|
$
|
28,467
|
$
|
30,173
|
||||
Losses and loss expenses ceded to reinsurers
|
23,536
|
30,789
|
||||||
Commissions from reinsurers
|
7,528
|
7,233
|
||||||
Three Months Ended
|
||||||||
March 31
|
||||||||
2020
|
2019
|
|||||||
Reserves, gross of reinsurance recoverable, at the beginning of the year
|
$
|
988,305
|
$
|
865,339
|
||||
Reinsurance recoverable on unpaid losses at the beginning of the year
|
398,305
|
375,935
|
||||||
Reserves at the beginning of the year
|
590,000
|
489,404
|
||||||
Provision for losses and loss expenses:
|
||||||||
Claims occurring during the current period
|
81,839
|
88,180
|
||||||
Claims occurring during prior periods
|
(8
|
)
|
(1,058
|
)
|
||||
Total incurred
|
81,831
|
87,122
|
||||||
Loss and loss expense payments:
|
||||||||
Claims occurring during the current period
|
8,169
|
8,708
|
||||||
Claims occurring during prior periods
|
61,812
|
56,747
|
||||||
Total paid
|
69,981
|
65,455
|
||||||
Reserves at the end of the period
|
601,850
|
511,071
|
||||||
Reinsurance recoverable on unpaid losses at the end of the period
|
399,749
|
383,150
|
||||||
Reserves, gross of reinsurance recoverable, at the end of the period
|
$
|
1,001,599
|
$
|
894,221
|
Three Months Ended
March 31
|
||||||||
2020
|
2019
|
|||||||
Revenues:
|
||||||||
Net premiums earned
|
$
|
109,659
|
$
|
110,013
|
||||
Net investment income
|
7,236
|
6,232
|
||||||
Net realized and unrealized gains (losses) on investments
|
(27,756
|
)
|
6,028
|
|||||
Commissions and other income
|
1,663
|
2,064
|
||||||
Total revenues
|
$
|
90,802
|
$
|
124,337
|
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Fixed income securities:
|
||||||||||||||||
Agency collateralized mortgage obligations
|
$
|
10,460
|
$
|
–
|
$
|
10,460
|
$
|
–
|
||||||||
Agency mortgage-backed securities
|
58,619
|
–
|
58,619
|
–
|
||||||||||||
Asset-backed securities
|
93,369
|
–
|
93,369
|
–
|
||||||||||||
Bank loans
|
10,187
|
–
|
10,187
|
–
|
||||||||||||
Certificates of deposit
|
2,835
|
2,835
|
–
|
–
|
||||||||||||
Collateralized mortgage obligations
|
4,076
|
–
|
4,076
|
–
|
||||||||||||
Corporate securities
|
259,528
|
–
|
259,528
|
–
|
||||||||||||
Options embedded in convertible securities
|
2,632
|
–
|
2,632
|
–
|
||||||||||||
Mortgage-backed securities
|
47,993
|
–
|
47,993
|
–
|
||||||||||||
Municipal obligations
|
39,132
|
–
|
39,132
|
–
|
||||||||||||
Non-U.S. government obligations
|
28,842
|
–
|
28,842
|
–
|
||||||||||||
U.S. government obligations
|
189,183
|
–
|
189,183
|
–
|
||||||||||||
Total fixed income securities
|
746,856
|
2,835
|
744,021
|
–
|
||||||||||||
Equity securities:
|
||||||||||||||||
Consumer
|
11,880
|
11,880
|
–
|
–
|
||||||||||||
Energy
|
1,508
|
1,508
|
–
|
–
|
||||||||||||
Financial
|
22,092
|
22,092
|
–
|
–
|
||||||||||||
Industrial
|
3,707
|
3,707
|
–
|
–
|
||||||||||||
Technology
|
2,963
|
2,963
|
–
|
–
|
||||||||||||
Funds (e.g., mutual funds, closed end funds, ETFs)
|
21,837
|
21,837
|
–
|
–
|
||||||||||||
Other
|
6,333
|
6,333
|
–
|
–
|
||||||||||||
Total equity securities
|
70,320
|
70,320
|
–
|
–
|
||||||||||||
Short-term investments
|
1,000
|
1,000
|
–
|
–
|
||||||||||||
Cash equivalents
|
69,527
|
–
|
69,527
|
–
|
||||||||||||
Total
|
$
|
887,703
|
$
|
74,155
|
$
|
813,548
|
$
|
–
|
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Fixed income securities:
|
||||||||||||||||
Agency collateralized mortgage obligations
|
$
|
12,093
|
$
|
–
|
$
|
12,093
|
$
|
–
|
||||||||
Agency mortgage-backed securities
|
56,280
|
–
|
56,280
|
–
|
||||||||||||
Asset-backed securities
|
106,397
|
–
|
106,397
|
–
|
||||||||||||
Bank loans
|
14,568
|
–
|
14,568
|
–
|
||||||||||||
Certificates of deposit
|
2,835
|
2,835
|
–
|
–
|
||||||||||||
Collateralized mortgage obligations
|
5,616
|
–
|
5,616
|
–
|
||||||||||||
Corporate securities
|
276,087
|
–
|
276,087
|
–
|
||||||||||||
Options embedded in convertible securities
|
5,294
|
–
|
5,294
|
–
|
||||||||||||
Mortgage-backed securities
|
47,463
|
–
|
47,463
|
–
|
||||||||||||
Municipal obligations
|
36,286
|
–
|
36,286
|
–
|
||||||||||||
Non-U.S. government obligations
|
24,179
|
–
|
24,179
|
–
|
||||||||||||
U.S. government obligations
|
208,440
|
–
|
208,440
|
–
|
||||||||||||
Total fixed income securities
|
795,538
|
2,835
|
792,703
|
–
|
||||||||||||
Equity securities:
|
||||||||||||||||
Consumer
|
16,707
|
16,707
|
–
|
–
|
||||||||||||
Energy
|
3,074
|
3,074
|
–
|
–
|
||||||||||||
Financial
|
31,577
|
31,577
|
–
|
–
|
||||||||||||
Industrial
|
4,927
|
4,927
|
–
|
–
|
||||||||||||
Technology
|
2,817
|
2,817
|
–
|
–
|
||||||||||||
Funds (e.g., mutual funds, closed end funds, ETFs)
|
9,460
|
9,460
|
–
|
–
|
||||||||||||
Other
|
8,250
|
8,250
|
–
|
–
|
||||||||||||
Total equity securities
|
76,812
|
76,812
|
–
|
–
|
||||||||||||
Short-term investments
|
1,000
|
1,000
|
–
|
–
|
||||||||||||
Cash equivalents
|
59,780
|
–
|
59,780
|
–
|
||||||||||||
Total
|
$
|
933,130
|
$
|
80,647
|
$
|
852,483
|
$
|
–
|
Carrying
|
Fair Value
|
|||||||||||||||||||
Value
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
March 31, 2020
|
||||||||||||||||||||
Assets:
|
||||||||||||||||||||
Limited partnerships
|
$
|
7,981
|
$
|
–
|
$
|
–
|
$
|
7,981
|
$
|
7,981
|
||||||||||
Commercial mortgage loans
|
11,882
|
–
|
–
|
12,492
|
12,492
|
|||||||||||||||
Liabilities:
|
||||||||||||||||||||
Short-term borrowings
|
20,000
|
–
|
20,000
|
–
|
20,000
|
|||||||||||||||
December 31, 2019
|
||||||||||||||||||||
Assets:
|
||||||||||||||||||||
Limited partnerships
|
$
|
23,292
|
$
|
–
|
$
|
–
|
$
|
23,292
|
$
|
23,292
|
||||||||||
Commercial mortgage loans
|
11,782
|
–
|
–
|
12,068
|
12,068
|
|||||||||||||||
Liabilities:
|
||||||||||||||||||||
Short-term borrowings
|
20,000
|
–
|
20,000
|
–
|
20,000
|
Grant Date
|
Number of
Shares Issued
|
Vesting Date
|
Service Period
|
Grant Date Fair
Value Per Share
|
||||||
5/8/2018
|
19,085
|
5/8/2019
|
7/1/2018 - 6/30/2019
|
$
|
23.05
|
|||||
5/7/2019
|
29,536
|
5/7/2020
|
7/1/2019 - 6/30/2020
|
$
|
16.25
|
|||||
5/17/2019
|
3,591
|
5/7/2020
|
7/1/2019 - 6/30/2020
|
$
|
16.25
|
|||||
5/22/2019
|
3,541
|
5/7/2020
|
7/1/2019 - 6/30/2020
|
$
|
16.25
|
Foreign
Currency
|
Unrealized Holding Gains (Losses) on
Available-for-sale Securities
|
Total
|
||||||||||
Beginning balance at December 31, 2019
|
$
|
(494
|
)
|
$
|
9,863
|
$
|
9,369
|
|||||
Other comprehensive income (loss) before reclassifications
|
(687
|
)
|
(20,256
|
)
|
(20,943
|
)
|
||||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
–
|
(605
|
)
|
(605
|
)
|
|||||||
Net current-period other comprehensive income (loss)
|
(687
|
)
|
(20,861
|
)
|
(21,548
|
)
|
||||||
Ending balance at March 31, 2020
|
$
|
(1,181
|
)
|
$
|
(10,998
|
)
|
$
|
(12,179
|
)
|
Foreign
Currency
|
Unrealized Holding Gains (Losses) on
Available-for-sale Securities
|
Total
|
||||||||||
Beginning balance at December 31, 2018
|
$
|
(1,139
|
)
|
$
|
(6,208
|
)
|
$
|
(7,347
|
)
|
|||
Other comprehensive loss before reclassifications
|
307
|
7,671
|
7,978
|
|||||||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
–
|
785
|
785
|
|||||||||
Net current-period other comprehensive income (loss)
|
307
|
8,456
|
8,763
|
|||||||||
Ending balance at March 31, 2019
|
$
|
(832
|
)
|
$
|
2,248
|
$
|
1,416
|
Three Months Ended
|
||||||||
March 31
|
||||||||
(dollars in thousands)
|
2020
|
2019
|
||||||
Income (loss) before federal income tax expense (benefit)
|
$
|
(25,139
|
)
|
$
|
3,514
|
|||
Less: Net realized and unrealized gains (losses) on investments
|
(27,756
|
)
|
6,028
|
|||||
Less: Net investment income
|
7,236
|
6,232
|
||||||
Underwriting loss
|
$
|
(4,619
|
)
|
$
|
(8,746
|
)
|
||
Ratios
|
||||||||
Losses and loss expenses incurred
|
$
|
81,831
|
$
|
87,122
|
||||
Net premiums earned
|
109,659
|
110,013
|
||||||
Loss ratio
|
74.6
|
%
|
79.2
|
%
|
||||
Other operating expenses
|
$
|
34,110
|
$
|
33,701
|
||||
Less: Commissions and other income
|
1,663
|
2,064
|
||||||
Other operating expenses, less commissions and other income
|
32,447
|
31,637
|
||||||
Net premiums earned
|
109,659
|
110,013
|
||||||
Expense ratio
|
29.6
|
%
|
28.8
|
%
|
||||
Combined ratio
|
104.2
|
%
|
108.0
|
%
|
2020
|
2019
|
Change
|
% Change
|
|||||||||||||
Gross premiums written
|
$
|
134,006
|
$
|
148,893
|
$
|
(14,887
|
)
|
(10.0
|
)%
|
|||||||
Ceded premiums written
|
(24,772
|
)
|
(33,571
|
)
|
8,799
|
(26.2
|
)%
|
|||||||||
Net premiums written
|
$
|
109,234
|
$
|
115,322
|
$
|
(6,088
|
)
|
(5.3
|
)%
|
|||||||
Net premiums earned
|
$
|
109,659
|
$
|
110,013
|
$
|
(354
|
)
|
(0.3
|
)%
|
|||||||
Net investment income
|
7,236
|
6,232
|
1,004
|
16.1
|
%
|
|||||||||||
Commissions and other income
|
1,663
|
2,064
|
(401
|
)
|
(19.4
|
)%
|
||||||||||
Net realized and unrealized gains (losses) on investments
|
(27,756
|
)
|
6,028
|
(33,784
|
)
|
(560.5
|
)%
|
|||||||||
Total revenue
|
90,802
|
124,337
|
||||||||||||||
Losses and loss expenses incurred
|
81,831
|
87,122
|
(5,291
|
)
|
(6.1
|
)%
|
||||||||||
Other operating expenses
|
34,110
|
33,701
|
409
|
1.2
|
%
|
|||||||||||
Total expenses
|
115,941
|
120,823
|
||||||||||||||
Income (loss) before federal income tax expense (benefit)
|
(25,139
|
)
|
3,514
|
(28,653
|
)
|
|||||||||||
Federal income tax expense (benefit)
|
(2,983
|
)
|
766
|
(3,749
|
)
|
|||||||||||
Net income (loss)
|
$
|
(22,156
|
)
|
$
|
2,748
|
$
|
(24,904
|
)
|
||||||||
● |
general economic conditions, including continued weakness of the financial markets, prevailing interest rate levels and stock and credit market performance, which may affect or continue to
affect (among other things) our ability to sell our products and to collect amounts due to us, our ability to access capital resources and the costs associated with such access to capital and the market value of our investments;
|
● |
our ability to obtain adequate premium rates and manage our growth strategy;
|
● |
increasing competition in the sale of our insurance products and services resulting from the entrance of new competitors into, or the expansion of the operations of existing competitors in, our
markets and our ability to retain existing customers;
|
● |
other changes in the markets for our insurance products;
|
● |
the impact of technological advances, including those specific to the transportation industry;
|
● |
changes in the legal or regulatory environment, which may affect the manner in which claims are adjusted or litigated, including loss and loss adjustment expense;
|
● |
legal or regulatory changes or actions, including those relating to the regulation of the sale, underwriting and pricing of insurance products and services and capital requirements;
|
● |
the impact of a downgrade in our financial strength rating;
|
● |
the effects of the COVID-19 pandemic and associated government actions on our operations and financial performance;
|
● |
technology or network security disruptions or breaches;
|
● |
adequacy of insurance reserves;
|
● |
availability of reinsurance and ability of reinsurers to pay their obligations;
|
● |
our ability to attract and retain qualified employees;
|
● |
tax law and accounting changes; and
|
● |
legal actions brought against us.
|
Fair Value
|
Estimated Change
in Fair Value
|
|||||||
200 basis point increase
|
$
|
707,311
|
$
|
(39,545
|
)
|
|||
100 basis point increase
|
727,083
|
(19,773
|
)
|
|||||
Current fair value
|
746,856
|
–
|
||||||
100 basis point decrease
|
766,629
|
19,773
|
||||||
200 basis point decrease
|
786,401
|
39,545
|
|
Net premiums earned. We expect the impact of COVID-19 on general economic activity may negatively impact our
premium volumes. We did not experience a material effect in the first quarter of 2020, but the impact could be more significant in the second quarter of 2020 based on changes in the operations of our insureds including, but not limited
to, the reduction in hours worked by insureds with workers' compensation coverages as well as the reduction in miles driven by commercial automobile insureds, which are the basis of premiums we receive. This impact could further persist
for the remainder of 2020 and beyond, but the degree of the impact will depend on the extent and duration of the economic contraction.
|
|
Loss and loss expenses incurred. We have not seen a material impact on our loss and loss expenses incurred in the first quarter of 2020, but we may incur higher claim and claim
adjustment expenses in certain lines of business as a result of COVID-19 due to increases in frequency and/or severity of claims. For example, we may experience elevated frequency and severity in our workers’ compensation lines related
to compensable claims by workers who demonstrate that the injury or illness arose both out of and in the course of their employment. We may also experience elevated frequency and severity in our liability coverages as a result of
plaintiffs’ lawyers seeking to generate COVID-19-related claim activity against our insureds. Additionally, the anticipated and unknown risks related to COVID-19 may cause additional uncertainty in the process of estimating claims and
claim adjustment expense reserves. For example, the behavior of claimants and policyholders may change in unexpected ways, the disruption to the court system may impact the timing and amounts of claims settlements and the actions taken by
governmental bodies, both legislative and regulatory, in reaction to COVID-19 and their related impacts are hard to predict. As a result, our estimated level of claims and claim adjustment expense reserves may change. We are also subject
to credit risk in our insurance operations which may be exacerbated in times of economic distress.
|
|
Investments. The disruption in the financial markets related to COVID-19 has contributed to net realized and unrealized investment losses, primarily due to the
impact of changes in fair value on our equity and fixed income investments. Our corporate fixed income portfolio may be further adversely impacted by ratings downgrades, increased bankruptcies and credit spread widening in distressed
industries, such as energy, gaming, lodging and leisure, autos, airlines and retail. Our investment portfolio also includes commercial mortgage-backed securities, which could be adversely impacted by declines in real estate valuations
and/or financial market disruption. Further disruptions in global financial markets due to the continuing impact of COVID-19 could result in additional net realized and unrealized investment losses, including potential impairments in our
fixed income portfolio. In addition, declines in fixed income yields would result in decreases in net investment income from future investment activity, including re-investments.
|
|
Liquidity. Collection of premiums, deductibles or self-insured retentions from our policyholders and reinsurance
recoverables from our reinsurers may become increasingly difficult. At the state level, insurance departments throughout the country have issued bulletins and regulations urging or requiring insurers to extend grace periods for the
payment of policy premiums and to refrain from canceling or non-renewing policies for the non-payment of policy premiums for policyholders adversely affected by COVID-19. It is uncertain what impact these government mandates may have on
our ability to recover unpaid premiums on the affected policies or what our obligations may be for the payment of claims made under policies for which we have not received premium payments.
|
|
Adverse Legislative and/or Regulatory Action. Federal, state and local government actions to address and contain the impact of COVID-19 may adversely affect us. A
number of states have instituted, and other states are considering instituting, changes designed to effectively expand workers' compensation coverage by creating presumptions of compensability of claims for certain types of workers.
Regulatory restrictions or requirements could also impact pricing, risk selection and our rights and obligations with respect to our policies and insureds, including our ability to cancel policies or our right to collect premiums.
|
|
Operational Disruptions and Heightened Cybersecurity Risks. Our operations could be disrupted if key members of our senior management or a significant percentage of our workforce or the
workforce of our agents, brokers, suppliers or outsourcing providers are unable to continue to work because of illness, government directives or otherwise. In addition, the interruption of our or their system capabilities could result in
a deterioration of our ability to write and process new and renewal business, provide customer service, pay claims in a timely manner or perform other necessary business functions. Having shifted to remote working arrangements, we also
face a heightened risk of cybersecurity attacks or data security incidents and are more dependent on internet and telecommunications access and capabilities.
|
Total Number of
Shares Purchased
|
Average Price
Paid per Share
|
Total Number of
Shares Purchased
Under the Program (1)
|
Remaining Shares
Available to be Purchased
Under the Program (1)
|
|||||||||||||
January 1 – January 31
|
29,990
|
$
|
16.05
|
29,990
|
1,472,503
|
|||||||||||
February 1 – February 29
|
9,200
|
14.87
|
9,200
|
1,463,303
|
||||||||||||
March 1 – March 31
|
87,574
|
13.30
|
87,574
|
1,375,729
|
||||||||||||
Total
|
126,764
|
126,764
|
(1) |
On August 31, 2017, our Board of Directors authorized the reinstatement of our share repurchase program for up to 2,464,209 shares of our Class A or Class B Common Stock. On August 6, 2019, our Board of Directors reaffirmed our share
repurchase program, but also provided that the aggregate dollar amount of shares of our common stock that may be repurchased under the share repurchase program between August 6, 2019 and August 6, 2020 may not exceed $25.0 million,
including a limit of up to $6.25 million per quarter. No duration has been placed on our share repurchase program, and we reserve the right to amend, suspend or discontinue it at any time. The share repurchase program does not commit us
to repurchase any shares of our common stock. We have funded, and intend to continue to fund, the share repurchase program from cash on hand.
|
Exhibit No.
|
Description
|
|
101
|
The following materials from Protective Insurance Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in XBRL (eXtensible
Business Reporting Language): (1) the Condensed Consolidated Balance Sheets, (2) the Condensed Consolidated Statements of Operations, (3) the Condensed Consolidated Statements of Comprehensive Income (Loss), (4) the Condensed Consolidated
Statements of Shareholders' Equity, (5) the Condensed Consolidated Statements of Cash Flows, and (6) the Notes to Unaudited Condensed Consolidated Financial Statements.
|
By:
|
/s/ Jeremy D. Edgecliffe-Johnson
|
|
Jeremy D. Edgecliffe-Johnson
|
||
Chief Executive Officer
|
By:
|
/s/ John R. Barnett
|
|
John R. Barnett
|
||
Chief Financial Officer
|
1.
|
Paragraph 5(b) of the Agreement is hereby deleted and replaced with the following:
|
(a)
|
During the Term, the Executive shall be eligible for equity-based and other long-term incentive awards under the Company's Long-Term Incentive Plan, as
amended from time to time (the “LTIP”), with a target annual value of at least $900,000 (the "Target LTIP"); notwithstanding the foregoing, the Executive’s Target LTIP for 2019 will be $525,204 and the Executive’s Target LTIP
for 2020 will be $0. The resulting payout of any LTIP award will be calculated based upon a combination of the Company's achievement of certain Company performance targets, as set annually by the Board and/or Compensation and Human Capital
Committee, and the Compensation and Human Capital Committee’s evaluation of the Executive's individual performance. LTIP awards shall otherwise be subject to the terms of the LTIP and any applicable award agreements.
|
2.
|
Upon an applicable separation effective prior to December 31, 2020, the cash lump sum amount provided for in Paragraph 8(f)(a) shall include an additional $900,000.
|
(a)
|
Affiliate: shall have the meaning set forth in Rule 12b-2 under the Exchange Act.
|
(b)
|
Change in Control: shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than (A) the
Shapiro Group, (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or (C) a corporation or other entity owned directly or indirectly by the shareholders of the Company in substantially the same
proportions as their ownership of shares of common stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more
of the total voting power represented by the Company’s then outstanding Voting Securities, (ii) the Shapiro Group is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company representing 45% or more of the total voting power represented by the Company’s then outstanding Voting Securities, (iii) during any period of two (2) consecutive years, individuals who at the beginning of such period
constitute the Board of Directors and any new director whose election by the Board of Directors or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iv) the shareholders of the Company approve
a merger, consolidation, acquisition or other fundamental transaction involving the Company or any of its Affiliates with any other entity other than any such transaction that would result in the Voting Securities of the Company outstanding
immediately prior thereto (less any such Voting Securities of the Company beneficially owned, directly or indirectly, by any person that also beneficially owns, directly or indirectly, more than 5% of the Voting Securities of the other
party to such transaction) continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity or its ultimate parent entity) over 50% of the total voting power represented by the
Voting Securities of the Company or such surviving entity (or its ultimate parent entity) outstanding immediately after such merger or consolidation, or the shareholders of the Company approve a plan of complete liquidation of the Company
or an agreement for the sale or disposition by the Company of (in one transaction or a series of transactions) all or substantially all of the Company’s assets.
|
(c)
|
Claim: means any threatened, asserted, pending or completed action, suit or proceeding, including a request to waive or toll a statute of limitations, whether civil,
criminal, regulatory, administrative, investigative or any other action, suit, or proceeding of any kind whatsoever, whether formal or informal, including any arbitration, mediation or other alternative dispute resolution mechanism, or any
appeal of any kind thereof, or any inquiry or investigation, whether instituted by (or in the right of) the Company, any subsidiary of the Company or any governmental agency or any other person or entity, in which Indemnitee was, is, may be
or will be involved as a party, witness or otherwise.
|
(d)
|
ERISA: means the Employee Retirement Income Security Act of 1974, as amended.
|
(e)
|
Exchange Act: means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
|
(f)
|
Expenses: means attorneys’ fees and all other direct or indirect costs, expenses and obligations, including judgments, fines, penalties, interest, appeal bonds,
amounts paid in settlement with the approval of the Company (which approval shall not be unreasonably delayed, withheld or conditioned), and counsel fees and disbursements (including, without limitation, experts’ fees, court costs,
retainers, appeal bond premiums, transcript fees, duplicating, printing and binding costs, as well as telecommunications, postage and courier charges) paid or incurred in connection with investigating, prosecuting, defending, settling,
arbitrating, mediating, being a witness in or participating in (including on appeal), or preparing to investigate, prosecute, defend, settle, arbitrate, mediate, be a witness in or participate in, any Claim relating to any Indemnifiable
Event, and shall include, without limitation, all attorneys’ fees and all other expenses incurred by or on behalf of an Indemnitee in connection with preparing and submitting any requests or statements for indemnification, advancement or
any other right provided by this Agreement (including, without limitation, such fees or expenses incurred in connection with legal proceedings contemplated by Section 2(d) hereof).
|
(g)
|
Indemnifiable Amounts: means any and all liabilities, Expenses, damages, judgments, fines, penalties, ERISA excise taxes and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with or in respect of such liabilities, Expenses, damages, judgments, fines, penalties, ERISA excise taxes or amounts paid in settlement) arising out of or resulting from
any Claim relating to an Indemnifiable Event. To the fullest extent permitted by law, Indemnifiable Amounts shall include any punitive, special or exemplary damages, and the multiple portion of a multiplied damages award.
|
(h)
|
Indemnifiable Event: means any event or occurrence, whether occurring before, on or after the date of this Agreement, arising out of, relating to, or in connection
with the fact that Indemnitee is or was (or agreed to serve as) a director, member of any committee of the Board of Directors, agent or fiduciary of the Company or any subsidiary of the Company, including as a member of the Special
Committee (if applicable) (including taking any action recommended by the Special Committee (including voting to approve or not approve any matter before the Board of Directors in a manner consistent with the recommendation of the Special
Committee) and omitting to take any actions within the scope of responsibility of the Special Committee for which the recommendation of the Special Committee has not been provided), or is or was serving (or agreed to serve) on behalf of the
Company or the Board of Directors or at the request of the Company, the Board of Directors or any committee of the Board of Directors, as a director, member of any committee of directors, officer, employee, manager, member, partner, tax
matter partner, trustee, agent, fiduciary or similar capacity, of another company, corporation, limited liability company, partnership, joint venture, employee benefit plan, trust or other entity or enterprise, or by reason of any act or
omission by Indemnitee in any such capacity (in all cases whether or not Indemnitee is acting or serving in any such capacity or has such status at the time any Indemnifiable Amount is incurred for which indemnification, advancement or any
other right can be provided by this Agreement). The term “Company,” where the context requires when used in this Agreement, shall be construed to include the subsidiaries of the Company and such other company, corporation, limited liability
company, partnership, joint venture, employee benefit plan, trust or other entity or enterprise.
|
(i)
|
Independent Legal Counsel: means an attorney or firm of attorneys (following a Change in Control, selected in accordance with the provisions of Section 3 hereof) who
or which is experienced in matters of corporate law and who or which shall not have otherwise performed services for the Company or Indemnitee on any matter material to such party within the last five years (other than with respect to
matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements).
|
(k)
|
Reviewing Party: means any appropriate person or body consisting of a member or members of the Board of Directors or any other person or body appointed by the Board
of Directors who or which is not a party to the particular Claim for which Indemnitee is seeking indemnification, or Independent Legal Counsel.
|
(m)
|
Voting Securities: means any securities of the Company which vote generally in the election of directors.
|
(c)
|
Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification or advancement of Expenses pursuant to this Agreement in
connection with any Claim initiated by Indemnitee unless (i) the Company has joined in or the Board of Directors has authorized or consented to the initiation of such Claim, (ii) the Claim is one to enforce Indemnitee’s rights under this
Agreement or (iii) the Company is expressly required by law to provide indemnification or advancement of Expenses in connection with such Claim initiated by Indemnitee.
|
(d)
|
Notwithstanding the foregoing, (i) the indemnification obligations of the Company under Section 2(a) shall be subject to the condition that the Reviewing Party shall not
have determined (in a written legal opinion, in any case in which the Independent Legal Counsel is involved as required by Section 3 hereof) that Indemnitee would not be permitted to be indemnified under applicable law, and (ii) the
obligation of the Company to make an Expense Advance pursuant to Section 2(b) shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines (in a written legal opinion, in any case in which the
Independent Legal Counsel is involved as required by Section 3 hereof) that Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid. Indemnitee hereby undertakes to repay any Expense Advances actually advanced to the extent it is ultimately determined that Indemnitee is not entitled under this Agreement or
otherwise to be indemnified by the Company in respect thereof; provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that
Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to
reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). No other form of undertaking shall be required of
Indemnitee other than execution of this Agreement. Indemnitee’s undertaking to repay such Expense Advances shall be unsecured and interest-free. If there has not been a Change in Control, the Reviewing Party shall be selected by the Board
of Directors, and if there has been such a Change in Control, the Reviewing Party shall be the Independent Legal Counsel referred to in Section 3 hereof. If there has been no determination by the Reviewing Party within thirty (30) days
after written demand is presented to the Company or if the Reviewing Party determines that Indemnitee would not be permitted to be indemnified in whole or in part under applicable law, Indemnitee shall have the right to commence litigation
in any court in the State of New York or the State of Indiana having subject matter jurisdiction thereof and in which venue is proper seeking an initial determination by the court or challenging any such determination by the Reviewing Party
or any aspect thereof, including the legal or factual basis therefor, and the Company hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and
binding on the Company and Indemnitee.
|
(a)
|
If to the Company, to:
|
(b)
|
If to Indemnitee, to the address set forth on Annex A hereto.
|
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Protective Insurance Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter
(the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
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.
|
/s/ Jeremy D. Edgecliffe-Johnson
|
|
Jeremy D. Edgecliffe-Johnson
|
|
Chief Executive Officer
|
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Protective Insurance Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter
(the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
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.
|
/s/ John R. Barnett
|
|
John R. Barnett
|
|
Chief Financial Officer
|
(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.
|
/s/ Jeremy D. Edgecliffe-Johnson
|
|
Jeremy D. Edgecliffe-Johnson
|
|
Chief Executive Officer
|
|
/s/ John R. Barnett
|
|
John R. Barnett
|
|
Chief Financial Officer
|