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(Mark One)
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[x]
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ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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22-1867895
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer
Identification Number)
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475 Steamboat Road, Greenwich, CT
(Address of principal executive offices)
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06830
(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $.20 per share
|
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New York Stock Exchange
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6.75% Trust Originated Preferred Securities
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New York Stock Exchange
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Large accelerated filer
S
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Accelerated filer
o
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Non-accelerated filer
o
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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PART I
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ITEM
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1.
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ITEM
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1A.
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ITEM
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1B.
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ITEM
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2.
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ITEM
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3.
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ITEM
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4.
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PART II
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ITEM
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5.
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ITEM
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6.
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ITEM
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7.
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ITEM
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7A.
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ITEM
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8.
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ITEM
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9.
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ITEM
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9A.
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ITEM
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9B.
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PART III
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ITEM
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10.
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ITEM
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11.
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ITEM
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12.
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ITEM
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13.
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ITEM
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14.
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PART IV
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ITEM
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15.
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EX-10.12
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FORM OF 2011 PERFORMANCE UNIT AWARD AGREEMENT UNDER THE W. R. BERKLEY CORPORATION LONG-TERM INCENTIVE PLAN
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EX-10.14
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SUPPLEMENTAL BENEFITS AGREEMENT BETWEEN WILLIAM R. BERKLEY AND THE COMPANY AS AMENDED AND RESTATED AS OF DECEMBER 21, 2011
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EX-23
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CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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EX-31.1
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CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) /15d-14(a)
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EX-31.2
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CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) /15d-14(a)
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EX-32.1
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CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANNES-OXLEY ACT OF 2002
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EX-101
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INSTANCE DOCUMENT
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EX-101
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SCHEMA DOCUMENT
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EX-101
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CALCULATION LINKBASE DOCUMENT
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EX-101
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LABELS LINKBASE DOCUMENT
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EX-101
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PRESENTATION LINKBASE DOCUMENT
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EX-101
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DEFINITION LINKBASE DOCUMENT
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This is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some of the forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “potential,” “continued,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words. Any forward-looking statements contained herein including statements related to our outlook for the industry and for our performance for the year 2012 and beyond, are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will be achieved. They are subject to various risks and uncertainties, including but not limited to:
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•
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the cyclical nature of the property casualty industry;
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•
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the impact of significant competition;
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•
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the long-tail and potentially volatile nature of the insurance and reinsurance business;
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•
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product demand and pricing;
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•
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claims development and the process of estimating reserves;
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•
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investment risks, including those of our portfolio of fixed maturity securities and investments in equity securities, including investments in financial institutions, municipal bonds, mortgage-backed securities, loans receivable, investment funds, real estate, merger arbitrage and private equity investments;
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•
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the effects of emerging claim and coverage issues;
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•
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the uncertain nature of damage theories and loss amounts;
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•
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natural and man-made catastrophic losses, including as a result of terrorist activities;
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•
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general economic and market activities, including inflation, interest rates and volatility in the credit and capital markets;
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•
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the impact of conditions in the financial markets and the global economy, and the potential effect of legislative, regulatory, accounting or other initiatives taken in response to it, on our results and financial condition;
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•
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continued availability of capital and financing;
|
•
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the success of our new ventures or acquisitions and the availability of other opportunities;
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•
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the availability of reinsurance;
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•
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our retention under the Terrorism Risk Insurance Act of 2002, as amended;
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•
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the ability of our reinsurers to pay reinsurance recoverables owed to us;
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•
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foreign currency and political risks relating to our international operations;
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•
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other legislative and regulatory developments, including those related to business practices in the insurance industry;
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•
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credit risk relating to our policyholders, independent agents and brokers;
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•
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changes in the ratings assigned to us or our insurance company subsidiaries by rating agencies;
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•
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the availability of dividends from our insurance company subsidiaries;
|
•
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our ability to attract and retain key personnel and qualified employees;
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•
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potential difficulties with technology and/or data security;
|
•
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the effectiveness of our controls to ensure compliance with guidelines, policies and legal and regulatory standards; and
|
•
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other risks detailed in this Form 10-K and from time to time in our other filings with the Securities and Exchange Commission (“SEC”).
|
•
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Alternative Markets,
including excess workers' compensation, monoline workers' compensation, accident and health, and insurance services;
|
•
|
Reinsurance,
on both a facultative and treaty basis and participating in business written through Lloyd's of London; and
|
•
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International
business in selected regions throughout the world.
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Year Ended December 31,
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||||||||||||||||||
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2011
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2010
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2009
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2008
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2007
|
||||||||||
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(Amounts in thousands)
|
||||||||||||||||||
Net premiums written:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Specialty
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$
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1,554,516
|
|
|
$
|
1,311,831
|
|
|
$
|
1,260,451
|
|
|
$
|
1,453,778
|
|
|
$
|
1,704,880
|
|
Regional
|
1,064,507
|
|
|
1,044,347
|
|
|
1,081,100
|
|
|
1,211,096
|
|
|
1,267,451
|
|
|||||
Alternative Markets
|
619,097
|
|
|
582,045
|
|
|
589,637
|
|
|
622,185
|
|
|
656,369
|
|
|||||
Reinsurance
|
430,329
|
|
|
401,239
|
|
|
423,425
|
|
|
435,108
|
|
|
682,241
|
|
|||||
International
|
688,919
|
|
|
511,464
|
|
|
375,482
|
|
|
311,732
|
|
|
265,048
|
|
|||||
Total
|
$
|
4,357,368
|
|
|
$
|
3,850,926
|
|
|
$
|
3,730,095
|
|
|
$
|
4,033,899
|
|
|
$
|
4,575,989
|
|
|
Year Ended December 31,
|
|||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|||||
|
|
|||||||||||||
Percentage of net premiums written:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty
|
35.7
|
%
|
|
34.1
|
%
|
|
33.7
|
%
|
|
36.1
|
%
|
|
37.3
|
%
|
Regional
|
24.4
|
|
|
27.1
|
|
|
29.0
|
|
|
30.0
|
|
|
27.7
|
|
Alternative Markets
|
14.2
|
|
|
15.1
|
|
|
15.8
|
|
|
15.4
|
|
|
14.3
|
|
Reinsurance
|
9.9
|
|
|
10.4
|
|
|
11.4
|
|
|
10.8
|
|
|
14.9
|
|
International
|
15.8
|
|
|
13.3
|
|
|
10.1
|
|
|
7.7
|
|
|
5.8
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|||||
Berkley Specialty Underwriting Managers
|
14.8
|
%
|
|
12.0
|
%
|
|
8.5
|
%
|
|
9.6
|
%
|
|
9.2
|
%
|
Admiral Insurance
|
14.2
|
|
|
16.7
|
|
|
20.4
|
|
|
24.0
|
|
|
28.2
|
|
Nautilus Insurance
|
13.9
|
|
|
15.9
|
|
|
16.8
|
|
|
17.5
|
|
|
18.2
|
|
Monitor Liability Managers
|
8.2
|
|
|
10.1
|
|
|
10.4
|
|
|
8.6
|
|
|
7.4
|
|
Berkley Underwriting Partners
|
6.5
|
|
|
6.8
|
|
|
6.2
|
|
|
6.8
|
|
|
6.3
|
|
Berkley Select
|
5.5
|
|
|
5.6
|
|
|
5.3
|
|
|
2.9
|
|
|
0.8
|
|
Carolina Casualty Insurance
|
4.9
|
|
|
5.0
|
|
|
9.3
|
|
|
14.8
|
|
|
14.9
|
|
Berkley Oil & Gas Specialty Services
|
4.5
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Vela Insurance Services
|
4.5
|
|
|
4.9
|
|
|
4.4
|
|
|
5.6
|
|
|
7.9
|
|
Berkley Offshore Underwriting Managers
|
4.1
|
|
|
3.7
|
|
|
2.7
|
|
|
—
|
|
|
—
|
|
Berkley Aviation
|
3.6
|
|
|
3.9
|
|
|
3.6
|
|
|
3.3
|
|
|
3.3
|
|
Clermont Specialty Managers
|
3.5
|
|
|
4.1
|
|
|
4.0
|
|
|
3.7
|
|
|
3.4
|
|
Berkley Professional Liability
|
2.2
|
|
|
2.4
|
|
|
2.1
|
|
|
0.1
|
|
|
—
|
|
American Mining Insurance
|
2.1
|
|
|
2.3
|
|
|
2.2
|
|
|
2.1
|
|
|
0.4
|
|
Gemini Transportation Underwriters
|
2.0
|
|
|
1.9
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
Berkley Asset Protection Underwriters
|
1.8
|
|
|
1.5
|
|
|
1.1
|
|
|
0.3
|
|
|
—
|
|
FinSecure
|
1.6
|
|
|
1.2
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
Berkley Life Sciences
|
1.3
|
|
|
1.1
|
|
|
1.2
|
|
|
0.7
|
|
|
—
|
|
Verus Underwriting Managers
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Berkley Technology Underwriters
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|||||
Other liability
|
31.1
|
%
|
|
29.1
|
%
|
|
29.5
|
%
|
|
32.8
|
%
|
|
38.0
|
%
|
Property
|
20.7
|
|
|
20.4
|
|
|
19.0
|
|
|
15.1
|
|
|
14.4
|
|
Professional liability
|
16.6
|
|
|
18.3
|
|
|
18.1
|
|
|
12.9
|
|
|
9.9
|
|
Commercial automobile
|
8.9
|
|
|
8.2
|
|
|
10.4
|
|
|
16.0
|
|
|
15.8
|
|
Products liability
|
5.6
|
|
|
6.0
|
|
|
7.5
|
|
|
10.2
|
|
|
12.0
|
|
Other
|
17.1
|
|
|
18.0
|
|
|
15.5
|
|
|
13.0
|
|
|
9.9
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|||||
Acadia Insurance
|
29.3
|
%
|
|
26.4
|
%
|
|
25.1
|
%
|
|
23.8
|
%
|
|
24.3
|
%
|
Continental Western
|
23.2
|
|
|
23.9
|
|
|
26.3
|
|
|
27.2
|
|
|
27.0
|
|
Union Standard Insurance
|
18.1
|
|
|
18.5
|
|
|
18.5
|
|
|
17.7
|
|
|
17.0
|
|
Berkley Mid-Atlantic
|
17.7
|
|
|
17.9
|
|
|
16.9
|
|
|
15.6
|
|
|
15.6
|
|
Berkley Surety
|
5.2
|
|
|
5.0
|
|
|
3.6
|
|
|
2.9
|
|
|
2.7
|
|
Berkley North Pacific
|
5.1
|
|
|
4.0
|
|
|
3.0
|
|
|
5.3
|
|
|
6.2
|
|
Berkley Regional Specialty
|
1.2
|
|
|
1.2
|
|
|
1.2
|
|
|
1.2
|
|
|
1.1
|
|
Assigned risk plans (1)
|
—
|
|
|
3.1
|
|
|
5.4
|
|
|
6.3
|
|
|
6.1
|
|
Other
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|||||
Commercial multi-peril
|
37.4
|
%
|
|
35.8
|
%
|
|
34.7
|
%
|
|
34.3
|
%
|
|
34.8
|
%
|
Automobile
|
24.9
|
|
|
25.3
|
|
|
25.3
|
|
|
25.5
|
|
|
25.8
|
|
Workers’ compensation
|
19.1
|
|
|
18.0
|
|
|
18.1
|
|
|
18.2
|
|
|
17.8
|
|
Assigned risk plans (1)
|
—
|
|
|
3.1
|
|
|
5.4
|
|
|
6.3
|
|
|
6.1
|
|
Other
|
18.6
|
|
|
17.8
|
|
|
16.5
|
|
|
15.7
|
|
|
15.5
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||
State
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|||||
Massachusetts
|
7.8
|
%
|
|
7.2
|
%
|
|
6.8
|
%
|
|
6.8
|
%
|
|
7.1
|
%
|
Texas
|
6.9
|
|
|
7.1
|
|
|
7.1
|
|
|
6.7
|
|
|
6.4
|
|
Pennsylvania
|
6.5
|
|
|
6.7
|
|
|
6.3
|
|
|
5.7
|
|
|
5.8
|
|
Maine
|
6.1
|
|
|
5.7
|
|
|
5.3
|
|
|
4.7
|
|
|
4.9
|
|
New Hampshire
|
5.8
|
|
|
5.3
|
|
|
5.0
|
|
|
4.9
|
|
|
5.1
|
|
Mississippi
|
3.9
|
|
|
3.6
|
|
|
3.5
|
|
|
3.2
|
|
|
2.8
|
|
North Carolina
|
3.8
|
|
|
4.2
|
|
|
3.6
|
|
|
3.3
|
|
|
3.4
|
|
Connecticut
|
3.6
|
|
|
2.9
|
|
|
3.1
|
|
|
3.0
|
|
|
2.9
|
|
Vermont
|
3.3
|
|
|
3.4
|
|
|
3.1
|
|
|
3.0
|
|
|
3.3
|
|
New York
|
3.2
|
|
|
3.1
|
|
|
2.8
|
|
|
2.3
|
|
|
2.1
|
|
Washington
|
3.2
|
|
|
2.4
|
|
|
1.8
|
|
|
2.8
|
|
|
3.1
|
|
Iowa
|
3.1
|
|
|
3.6
|
|
|
4.0
|
|
|
4.2
|
|
|
4.2
|
|
Virginia
|
3.1
|
|
|
2.8
|
|
|
2.6
|
|
|
2.4
|
|
|
2.4
|
|
Kansas
|
2.9
|
|
|
3.2
|
|
|
5.3
|
|
|
5.8
|
|
|
6.1
|
|
Nebraska
|
2.8
|
|
|
3.0
|
|
|
3.9
|
|
|
3.8
|
|
|
3.8
|
|
Minnesota
|
2.6
|
|
|
2.8
|
|
|
3.0
|
|
|
3.2
|
|
|
3.2
|
|
Maryland
|
2.4
|
|
|
2.2
|
|
|
2.4
|
|
|
2.1
|
|
|
2.1
|
|
Wisconsin
|
2.3
|
|
|
2.8
|
|
|
2.4
|
|
|
2.5
|
|
|
2.5
|
|
Missouri
|
2.3
|
|
|
2.4
|
|
|
2.6
|
|
|
2.8
|
|
|
3.0
|
|
Arkansas
|
2.1
|
|
|
2.3
|
|
|
2.3
|
|
|
2.3
|
|
|
2.5
|
|
Colorado
|
2.0
|
|
|
2.2
|
|
|
3.2
|
|
|
3.7
|
|
|
3.7
|
|
Oklahoma
|
1.8
|
|
|
1.6
|
|
|
1.7
|
|
|
1.5
|
|
|
1.6
|
|
South Dakota
|
1.7
|
|
|
1.8
|
|
|
2.4
|
|
|
2.3
|
|
|
2.2
|
|
Illinois
|
1.4
|
|
|
2.3
|
|
|
2.5
|
|
|
2.7
|
|
|
1.7
|
|
Tennessee
|
1.4
|
|
|
1.5
|
|
|
1.4
|
|
|
1.5
|
|
|
1.6
|
|
Alabama
|
1.3
|
|
|
1.2
|
|
|
1.2
|
|
|
1.1
|
|
|
1.0
|
|
New Mexico
|
1.3
|
|
|
1.3
|
|
|
1.2
|
|
|
1.2
|
|
|
1.2
|
|
South Carolina
|
1.2
|
|
|
1.3
|
|
|
1.3
|
|
|
1.3
|
|
|
1.2
|
|
North Dakota
|
1.2
|
|
|
1.1
|
|
|
1.0
|
|
|
0.9
|
|
|
0.7
|
|
Arizona
|
1.1
|
|
|
1.1
|
|
|
0.9
|
|
|
0.7
|
|
|
0.6
|
|
Oregon
|
0.9
|
|
|
0.8
|
|
|
0.6
|
|
|
1.2
|
|
|
1.3
|
|
Idaho
|
0.8
|
|
|
0.8
|
|
|
0.7
|
|
|
1.1
|
|
|
1.2
|
|
Indiana
|
0.7
|
|
|
1.1
|
|
|
0.9
|
|
|
0.9
|
|
|
1.1
|
|
Other
|
5.5
|
|
|
5.2
|
|
|
4.1
|
|
|
4.4
|
|
|
4.2
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|||||
Midwest Employers Casualty
|
20.3
|
%
|
|
30.7
|
%
|
|
38.3
|
%
|
|
42.1
|
%
|
|
45.1
|
%
|
Berkley Accident and Health
|
15.2
|
|
|
10.6
|
|
|
6.1
|
|
|
4.6
|
|
|
2.6
|
|
Key Risk Insurance
|
14.3
|
|
|
16.1
|
|
|
17.7
|
|
|
18.8
|
|
|
17.6
|
|
Berkley Net Underwriters
|
11.3
|
|
|
10.4
|
|
|
10.6
|
|
|
6.7
|
|
|
3.1
|
|
Preferred Employers Insurance
|
8.5
|
|
|
8.9
|
|
|
8.2
|
|
|
8.3
|
|
|
11.3
|
|
Riverport Insurance Services
|
7.6
|
|
|
8.2
|
|
|
10.2
|
|
|
9.3
|
|
|
7.7
|
|
Berkley Medical Excess Underwriters
|
4.6
|
|
|
5.6
|
|
|
5.2
|
|
|
4.4
|
|
|
4.6
|
|
Assigned risk plans (1)
|
18.2
|
|
|
9.5
|
|
|
3.7
|
|
|
5.8
|
|
|
8.0
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|||||
Primary Workers' Compensation
|
34.8
|
%
|
|
36.9
|
%
|
|
38.5
|
%
|
|
35.6
|
%
|
|
33.9
|
%
|
Excess Workers' Compensation
|
18.9
|
|
|
29.1
|
|
|
36.5
|
|
|
40.4
|
|
|
43.3
|
|
Accident & Health
|
15.2
|
|
|
10.6
|
|
|
6.1
|
|
|
4.6
|
|
|
2.6
|
|
Other liability
|
5.7
|
|
|
4.8
|
|
|
5.3
|
|
|
4.7
|
|
|
3.7
|
|
Other
|
7.2
|
|
|
9.1
|
|
|
9.9
|
|
|
8.9
|
|
|
8.5
|
|
Assigned risk plans
|
18.2
|
|
|
9.5
|
|
|
3.7
|
|
|
5.8
|
|
|
8.0
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|||||
Berkley Re America
|
66.2
|
%
|
|
65.4
|
%
|
|
58.9
|
%
|
|
52.2
|
%
|
|
39.6
|
%
|
Lloyd’s Reinsurance
|
13.9
|
|
|
15.9
|
|
|
18.8
|
|
|
14.7
|
|
|
22.6
|
|
Facultative ReSources
|
10.5
|
|
|
14.2
|
|
|
19.4
|
|
|
22.1
|
|
|
21.2
|
|
B F Re Underwriters
|
9.5
|
|
|
9.6
|
|
|
9.4
|
|
|
12.2
|
|
|
11.2
|
|
Berkley Risk Solutions(1)
|
(0.1
|
)
|
|
(5.1
|
)
|
|
(6.5
|
)
|
|
(1.2
|
)
|
|
4.6
|
|
Hong Kong(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
(1)
|
Berkley Risk Solutions reported return premiums on experience rated contracts in 2008 through 2011.
|
(2)
|
Hong Kong has been included in Berkley Re Australia’s reported results in the International segment since 2008.
|
|
Year Ended December 31,
|
|||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|||||
Berkley International Latinoamérica
|
31.4
|
%
|
|
36.9
|
%
|
|
41.0
|
%
|
|
51.8
|
%
|
|
46.8
|
%
|
W. R. Berkley Insurance (Europe)
|
29.1
|
|
|
30.4
|
|
|
33.2
|
|
|
40.1
|
|
|
52.6
|
|
Berkley Re Asia Pacific
|
17.7
|
|
|
15.6
|
|
|
17.8
|
|
|
8.1
|
|
|
—
|
|
W. R. Berkley Syndicate 1967
|
17.6
|
|
|
13.8
|
|
|
5.9
|
|
|
—
|
|
|
—
|
|
Berkley Canada
|
4.0
|
|
|
3.3
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
Berkley Re UK
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Philippines (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
(1)
|
The Philippines operation was sold in March 2007.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
||||||||||
|
(Amounts in thousands)
|
||||||||||||||||||
Specialty
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
1,620,741
|
|
|
$
|
1,471,566
|
|
|
$
|
1,483,266
|
|
|
$
|
1,810,813
|
|
|
$
|
2,006,027
|
|
Income before income taxes
|
$
|
292,759
|
|
|
$
|
296,645
|
|
|
$
|
220,906
|
|
|
$
|
375,429
|
|
|
$
|
516,931
|
|
Regional
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
1,145,491
|
|
|
$
|
1,152,447
|
|
|
$
|
1,177,126
|
|
|
$
|
1,317,796
|
|
|
$
|
1,347,800
|
|
Income before income taxes
|
$
|
32,382
|
|
|
$
|
117,353
|
|
|
$
|
106,078
|
|
|
$
|
108,719
|
|
|
$
|
215,228
|
|
Alternative Markets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
819,949
|
|
|
$
|
810,673
|
|
|
$
|
768,683
|
|
|
$
|
831,622
|
|
|
$
|
874,899
|
|
Income before income taxes
|
$
|
146,030
|
|
|
$
|
178,607
|
|
|
$
|
162,875
|
|
|
$
|
201,879
|
|
|
$
|
248,080
|
|
Reinsurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
517,879
|
|
|
$
|
522,435
|
|
|
$
|
487,016
|
|
|
$
|
635,763
|
|
|
$
|
893,855
|
|
Income before income taxes
|
$
|
83,251
|
|
|
$
|
129,922
|
|
|
$
|
86,358
|
|
|
$
|
117,946
|
|
|
$
|
178,302
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
656,460
|
|
|
$
|
485,534
|
|
|
$
|
351,947
|
|
|
$
|
322,016
|
|
|
$
|
284,558
|
|
Income before income taxes
|
$
|
40,084
|
|
|
$
|
21,174
|
|
|
$
|
22,719
|
|
|
$
|
52,943
|
|
|
$
|
44,457
|
|
Other(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
395,464
|
|
|
$
|
281,414
|
|
|
$
|
163,140
|
|
|
$
|
(209,202
|
)
|
|
$
|
181,258
|
|
Loss before income taxes
|
$
|
(76,223
|
)
|
|
$
|
(140,396
|
)
|
|
$
|
(216,706
|
)
|
|
$
|
(530,594
|
)
|
|
$
|
(110,606
|
)
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
5,155,984
|
|
|
$
|
4,724,069
|
|
|
$
|
4,431,178
|
|
|
$
|
4,708,808
|
|
|
$
|
5,588,397
|
|
Income before income taxes
|
$
|
518,283
|
|
|
$
|
603,305
|
|
|
$
|
382,230
|
|
|
$
|
326,322
|
|
|
$
|
1,092,392
|
|
(1)
|
Represents corporate revenues, corporate expenses, net investment gains and losses, and revenues and expenses from investments in wholly-owned, non-insurance subsidiaries that are consolidated for financial reporting purposes.
|
|
Year Ended December 31,
|
|||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|||||
Specialty
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
59.4
|
%
|
|
58.3
|
%
|
|
61.9
|
%
|
|
60.1
|
%
|
|
57.3
|
%
|
Expense ratio
|
32.5
|
%
|
|
32.7
|
%
|
|
31.1
|
%
|
|
28.4
|
%
|
|
26.7
|
%
|
Combined ratio
|
91.9
|
%
|
|
91.0
|
%
|
|
93.0
|
%
|
|
88.5
|
%
|
|
84.0
|
%
|
Regional
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
68.0
|
%
|
|
60.7
|
%
|
|
61.4
|
%
|
|
65.4
|
%
|
|
59.1
|
%
|
Expense ratio
|
35.9
|
%
|
|
35.9
|
%
|
|
34.2
|
%
|
|
32.3
|
%
|
|
31.4
|
%
|
Combined ratio
|
103.9
|
%
|
|
96.6
|
%
|
|
95.6
|
%
|
|
97.7
|
%
|
|
90.5
|
%
|
Alternative Markets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
72.3
|
%
|
|
67.6
|
%
|
|
63.4
|
%
|
|
62.7
|
%
|
|
59.2
|
%
|
Expense ratio
|
26.7
|
%
|
|
25.6
|
%
|
|
25.8
|
%
|
|
24.2
|
%
|
|
23.1
|
%
|
Combined ratio
|
99.0
|
%
|
|
93.2
|
%
|
|
89.2
|
%
|
|
86.9
|
%
|
|
82.3
|
%
|
Reinsurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
61.6
|
%
|
|
52.5
|
%
|
|
57.9
|
%
|
|
64.7
|
%
|
|
65.3
|
%
|
Expense ratio
|
40.4
|
%
|
|
41.0
|
%
|
|
39.1
|
%
|
|
34.7
|
%
|
|
31.3
|
%
|
Combined ratio
|
102.0
|
%
|
|
93.5
|
%
|
|
97.0
|
%
|
|
99.4
|
%
|
|
96.6
|
%
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
60.5
|
%
|
|
61.8
|
%
|
|
59.9
|
%
|
|
61.7
|
%
|
|
62.6
|
%
|
Expense ratio
|
40.0
|
%
|
|
40.4
|
%
|
|
40.2
|
%
|
|
38.9
|
%
|
|
32.4
|
%
|
Combined ratio
|
100.5
|
%
|
|
102.2
|
%
|
|
100.1
|
%
|
|
100.6
|
%
|
|
95.0
|
%
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
63.9
|
%
|
|
60.2
|
%
|
|
61.4
|
%
|
|
62.7
|
%
|
|
59.6
|
%
|
Expense ratio
|
34.4
|
%
|
|
34.3
|
%
|
|
32.8
|
%
|
|
30.4
|
%
|
|
28.5
|
%
|
Combined ratio
|
98.3
|
%
|
|
94.5
|
%
|
|
94.2
|
%
|
|
93.1
|
%
|
|
88.1
|
%
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Average investments, at cost(1)
|
$
|
13,631,552
|
|
|
$
|
13,356,380
|
|
|
$
|
12,918,039
|
|
|
$
|
12,939,843
|
|
|
$
|
12,620,662
|
|
Net investment income(1)
|
$
|
526,351
|
|
|
$
|
530,525
|
|
|
$
|
379,008
|
|
|
$
|
533,480
|
|
|
$
|
672,660
|
|
Percent earned on average investments(1)
|
3.9
|
%
|
|
4.0
|
%
|
|
3.0
|
%
|
|
4.2
|
%
|
|
5.4
|
%
|
|||||
Net investment gains (losses)(2)
|
$
|
125,481
|
|
|
$
|
56,581
|
|
|
$
|
(38,408
|
)
|
|
$
|
(356,931
|
)
|
|
$
|
49,696
|
|
Change in unrealized investment gains (losses)(3)
|
$
|
147,998
|
|
|
$
|
176,588
|
|
|
$
|
557,444
|
|
|
$
|
(302,211
|
)
|
|
$
|
(94,957
|
)
|
(1)
|
Includes investments, cash and cash equivalents, trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases.
|
(2)
|
Represents realized gains and losses on investments not classified as trading account securities.
|
(3)
|
Represents the change in unrealized investment gains (losses) for available for sale securities.
|
|
Year Ended December 31,
|
|||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|||||
Barclays U.S. Aggregate Bond Index
|
4.0
|
%
|
|
4.2
|
%
|
|
4.9
|
%
|
|
5.4
|
%
|
|
5.5
|
%
|
S&P 500
®
Index
|
2.1
|
%
|
|
2.3
|
%
|
|
3.0
|
%
|
|
1.5
|
%
|
|
2.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|||||
1 year or less
|
6.6
|
%
|
|
6.7
|
%
|
|
5.3
|
%
|
|
3.2
|
%
|
|
7.4
|
%
|
Over 1 year through 5 years
|
28.3
|
|
|
27.3
|
|
|
27.2
|
|
|
22.9
|
|
|
19.4
|
|
Over 5 years through 10 years
|
25.3
|
|
|
25.9
|
|
|
27.2
|
|
|
29.9
|
|
|
30.2
|
|
Over 10 years
|
25.5
|
|
|
27.1
|
|
|
26.0
|
|
|
26.6
|
|
|
25.1
|
|
Mortgage-backed securities
|
14.3
|
|
|
13.0
|
|
|
14.3
|
|
|
17.4
|
|
|
17.9
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
2011
|
|
2010
|
|
2009
|
||||||
Net reserves at beginning of year
|
$
|
7,999,521
|
|
|
$
|
8,147,782
|
|
|
$
|
8,122,586
|
|
Net provision for losses and loss expenses:
|
|
|
|
|
|
|
|
|
|||
Claims occurring during the current year(
1
)
|
2,791,860
|
|
|
2,509,933
|
|
|
2,518,849
|
|
|||
Decrease in estimates for claims occurring in prior years(2)(3)
|
(181,282
|
)
|
|
(253,248
|
)
|
|
(234,008
|
)
|
|||
Loss reserve discount amortization
|
47,787
|
|
|
53,182
|
|
|
51,866
|
|
|||
Total
|
2,658,365
|
|
|
2,309,867
|
|
|
2,336,707
|
|
|||
Net payments for claims:
|
|
|
|
|
|
|
|
|
|||
Current year
|
765,440
|
|
|
641,570
|
|
|
582,605
|
|
|||
Prior years
|
1,721,558
|
|
|
1,811,507
|
|
|
1,751,026
|
|
|||
Total
|
2,486,998
|
|
|
2,453,077
|
|
|
2,333,631
|
|
|||
Foreign currency translation
|
1,224
|
|
|
(5,051
|
)
|
|
22,120
|
|
|||
Net reserves at end of year
|
8,172,112
|
|
|
7,999,521
|
|
|
8,147,782
|
|
|||
Ceded reserves at end of year
|
1,165,022
|
|
|
1,017,028
|
|
|
923,889
|
|
|||
Gross reserves at end of year
|
$
|
9,337,134
|
|
|
$
|
9,016,549
|
|
|
$
|
9,071,671
|
|
(1)
|
Claims occurring during the current year are net of discounts of
$43,286,000
,
$67,763,000
and
$80,455,000
in
2011
,
2010
and
2009
, respectively.
|
(2)
|
The decrease in estimates for claims occurring in prior years is net of discounts. On an undiscounted basis, the estimates for claims occurring in prior years decreased by
$182,937,000
in
2011
,
$246,941,000
in
2010
, and
$232,040,000
in
2009
.
|
(3)
|
For certain retrospectively rated insurance polices and reinsurance agreements, reserve development is offset by additional or return premiums. Favorable reserve development, net of additional and return premiums, was
$182 million
,
$234 million
and
$190 million
in 2011, 2010 and 2009, respectively.
|
Net reserves reported in U.S. regulatory filings on a SAP basis
|
$
|
7,949,635
|
|
Reserves for non-U.S. companies
|
519,576
|
|
|
Loss reserve discounting(1)
|
(297,007
|
)
|
|
Ceded reserves
|
1,165,022
|
|
|
Other
|
(92
|
)
|
|
Gross reserves reported in the consolidated GAAP financial statements
|
$
|
9,337,134
|
|
Year Ended December 31,
|
|
2001
|
|
2002
|
|
2003
|
|
2004
|
|
2005
|
|
2006
|
|
2007
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
||||||||||||||||||||||
|
|
(Amounts in millions)
|
||||||||||||||||||||||||||||||||||||||||||
Net reserves, discounted
|
|
$
|
2,033
|
|
|
$
|
2,323
|
|
|
$
|
3,505
|
|
|
4,723
|
|
$
|
5,867
|
|
|
$
|
6,948
|
|
|
$
|
7,823
|
|
|
$
|
8,123
|
|
|
$
|
8,148
|
|
|
$
|
8,000
|
|
|
$
|
8,172
|
|
||
Reserve discount
|
|
243
|
|
|
293
|
|
|
393
|
|
|
503
|
|
|
575
|
|
|
700
|
|
|
788
|
|
|
846
|
|
|
877
|
|
|
898
|
|
|
892
|
|
|||||||||||
Net reserves, undiscounted
|
|
$
|
2,276
|
|
|
$
|
2,616
|
|
|
$
|
3,898
|
|
|
$
|
5,226
|
|
|
$
|
6,442
|
|
|
$
|
7,648
|
|
|
$
|
8,611
|
|
|
$
|
8,969
|
|
|
$
|
9,025
|
|
|
$
|
8,898
|
|
|
$
|
9,064
|
|
Net reserves re-estimated as of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
One year later
|
|
$
|
2,450
|
|
|
$
|
2,889
|
|
|
$
|
4,220
|
|
|
$
|
5,440
|
|
|
$
|
6,499
|
|
|
$
|
7,560
|
|
|
$
|
8,431
|
|
|
$
|
8,737
|
|
|
$
|
8,778
|
|
|
$
|
8,715
|
|
|
|
|
|
Two years later
|
|
2,671
|
|
|
3,242
|
|
|
4,552
|
|
|
5,588
|
|
|
6,578
|
|
|
7,494
|
|
|
8,239
|
|
|
8,560
|
|
|
8,596
|
|
|
|
|
|
|
|
|||||||||||
Three years later
|
|
2,932
|
|
|
3,611
|
|
|
4,720
|
|
|
5,763
|
|
|
6,592
|
|
|
7,363
|
|
|
8,192
|
|
|
8,420
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Four years later
|
|
3,233
|
|
|
3,769
|
|
|
4,949
|
|
|
5,816
|
|
|
6,556
|
|
|
7,370
|
|
|
8,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Five years later
|
|
3,339
|
|
|
3,982
|
|
|
5,041
|
|
|
5,834
|
|
|
6,636
|
|
|
7,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Six years later
|
|
3,534
|
|
|
4,069
|
|
|
5,082
|
|
|
5,929
|
|
|
6,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Seven years later
|
|
3,599
|
|
|
4,112
|
|
|
5,176
|
|
|
5,983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Eight years later
|
|
3,624
|
|
|
4,187
|
|
|
5,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nine years later
|
|
3,674
|
|
|
4,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ten years later
|
|
3,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Cumulative redundancy (deficiency), undiscounted
|
|
$
|
(1,427
|
)
|
|
$
|
(1,608
|
)
|
|
$
|
(1,324
|
)
|
|
$
|
(757
|
)
|
|
$
|
(235
|
)
|
|
$
|
272
|
|
|
$
|
474
|
|
|
$
|
549
|
|
|
$
|
429
|
|
|
$
|
183
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Cumulative amount of net liability paid through:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
One year later
|
|
$
|
794
|
|
|
$
|
599
|
|
|
$
|
930
|
|
|
$
|
1,174
|
|
|
$
|
1,341
|
|
|
$
|
1,437
|
|
|
$
|
1,663
|
|
|
$
|
1,751
|
|
|
$
|
1,812
|
|
|
$
|
1,722
|
|
|
|
|
|
Two years later
|
|
1,191
|
|
|
1,216
|
|
|
1,750
|
|
|
2,106
|
|
|
2,363
|
|
|
2,636
|
|
|
2,935
|
|
|
3,106
|
|
|
3,052
|
|
|
|
|
|
|
|
|||||||||||
Three years later
|
|
1,594
|
|
|
1,792
|
|
|
2,389
|
|
|
2,836
|
|
|
3,219
|
|
|
3,558
|
|
|
3,956
|
|
|
4,039
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Four years later
|
|
1,971
|
|
|
2,223
|
|
|
2,901
|
|
|
3,384
|
|
|
3,856
|
|
|
4,279
|
|
|
4,616
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Five years later
|
|
2,245
|
|
|
2,552
|
|
|
3,274
|
|
|
3,813
|
|
|
4,327
|
|
|
4,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Six years later
|
|
2,467
|
|
|
2,814
|
|
|
3,582
|
|
|
4,131
|
|
|
4,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Seven years later
|
|
2,642
|
|
|
3,035
|
|
|
3,804
|
|
|
4,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Eight years later
|
|
2,808
|
|
|
3,189
|
|
|
3,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nine years later
|
|
2,922
|
|
|
3,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ten years later
|
|
3,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2001
|
|
2002
|
|
2003
|
|
2004
|
|
2005
|
|
2006
|
|
2007
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
||||||||||||||||||||||
|
|
(Amounts in millions)
|
||||||||||||||||||||||||||||||||||||||||||
Net reserves, discounted
|
|
$
|
2,033
|
|
|
$
|
2,323
|
|
|
$
|
3,505
|
|
|
$
|
4,723
|
|
|
$
|
5,867
|
|
|
$
|
6,947
|
|
|
$
|
7,823
|
|
|
$
|
8,123
|
|
|
$
|
8,148
|
|
|
$
|
8,000
|
|
|
$
|
8,172
|
|
Ceded reserves
|
|
731
|
|
|
845
|
|
|
687
|
|
|
727
|
|
|
845
|
|
|
837
|
|
|
855
|
|
|
877
|
|
|
924
|
|
|
1,017
|
|
|
1,165
|
|
|||||||||||
Gross reserves, discounted
|
|
2,764
|
|
|
3,168
|
|
|
4,192
|
|
|
5,450
|
|
|
6,712
|
|
|
7,784
|
|
|
8,678
|
|
|
9,000
|
|
|
9,072
|
|
|
9,017
|
|
|
9,337
|
|
|||||||||||
Reserve discount
|
|
324
|
|
|
384
|
|
|
462
|
|
|
573
|
|
|
654
|
|
|
761
|
|
|
867
|
|
|
944
|
|
|
944
|
|
|
968
|
|
|
953
|
|
|||||||||||
Gross reserves, undiscounted
|
|
$
|
3,088
|
|
|
$
|
3,552
|
|
|
$
|
4,654
|
|
|
$
|
6,023
|
|
|
$
|
7,366
|
|
|
$
|
8,545
|
|
|
$
|
9,545
|
|
|
$
|
9,944
|
|
|
$
|
10,016
|
|
|
$
|
9,985
|
|
|
$
|
10,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Gross reserves re-estimated as of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
One year later
|
|
$
|
3,153
|
|
|
$
|
3,957
|
|
|
$
|
5,030
|
|
|
$
|
6,241
|
|
|
$
|
7,406
|
|
|
$
|
8,509
|
|
|
$
|
9,396
|
|
|
$
|
9,696
|
|
|
$
|
9,810
|
|
|
$
|
9,879
|
|
|
|
|
|
Two years later
|
|
3,461
|
|
|
4,353
|
|
|
5,380
|
|
|
6,382
|
|
|
7,529
|
|
|
8,454
|
|
|
9,178
|
|
|
9,566
|
|
|
9,662
|
|
|
|
|
|
|
|
|||||||||||
Three years later
|
|
3,777
|
|
|
4,744
|
|
|
5,546
|
|
|
6,600
|
|
|
7,561
|
|
|
8,300
|
|
|
9,163
|
|
|
9,445
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Four years later
|
|
4,103
|
|
|
4,885
|
|
|
5,807
|
|
|
6,670
|
|
|
7,508
|
|
|
8,335
|
|
|
9,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Five years later
|
|
4,192
|
|
|
5,132
|
|
|
5,915
|
|
|
6,680
|
|
|
7,617
|
|
|
8,316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Six years later
|
|
4,428
|
|
|
5,226
|
|
|
5,956
|
|
|
6,804
|
|
|
7,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Seven years later
|
|
4,500
|
|
|
5,275
|
|
|
6,083
|
|
|
6,839
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Eight years later
|
|
4,538
|
|
|
5,383
|
|
|
6,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nine years later
|
|
4,617
|
|
|
5,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ten Years later
|
|
4,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross cumulative redundancy (deficiency)
|
|
$
|
(1,526
|
)
|
|
$
|
(1,840
|
)
|
|
$
|
(1,453
|
)
|
|
$
|
(816
|
)
|
|
$
|
(269
|
)
|
|
$
|
229
|
|
|
$
|
464
|
|
|
$
|
499
|
|
|
$
|
354
|
|
|
$
|
106
|
|
|
—
|
|
•
|
plaintiffs targeting property and casualty insurers, including us, in purported class action litigation relating to claims-handling and other practices;
|
•
|
potential assessments for the provision of funds necessary for the settlement of covered claims under certain policies provided by impaired, insolvent or failed insurance companies.
|
•
|
our classified board of directors and the ability of our board to increase its size and to appoint directors to fill newly created directorships;
|
•
|
the requirement that 80% of our stockholders must approve mergers and other transactions between us and the holder of 5% or more of our shares, unless the transaction was approved by our board of directors prior to such holder's acquisition of 5% of our shares; and
|
•
|
the need for advance notice in order to raise business or make nominations at stockholders' meetings.
|
|
Price Range
|
|
|
||||||||
|
High
|
|
Low
|
|
Dividends Declared Per Share
|
||||||
2011:
|
|
|
|
|
|
|
|
|
|||
Fourth Quarter
|
$
|
36.05
|
|
|
$
|
28.07
|
|
|
$
|
0.08
|
|
Third Quarter
|
33.26
|
|
|
27.26
|
|
|
0.08
|
|
|||
Second Quarter
|
33.24
|
|
|
31.00
|
|
|
0.08
|
|
|||
First Quarter
|
32.41
|
|
|
26.52
|
|
|
0.07
|
|
|||
2010:
|
|
|
|
|
|
|
|
|
|||
Fourth Quarter
|
$
|
28.83
|
|
|
$
|
26.19
|
|
|
$
|
0.07
|
|
Third Quarter
|
27.66
|
|
|
25.63
|
|
|
0.07
|
|
|||
Second Quarter
|
28.13
|
|
|
25.69
|
|
|
0.07
|
|
|||
First Quarter
|
26.75
|
|
|
23.89
|
|
|
0.06
|
|
|
Total Number of
Shares Purchased
|
|
|
Average Price
Paid per Share
|
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
|
Maximum Number of Shares that may yet be Purchased Under the Plans or Programs(1)
|
|
|
October 2011
|
100,000
|
|
|
$
|
28.20
|
|
|
100,000
|
|
|
4,782,503
|
|
November 2011
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000,000
|
|
|
December 2011 (2)
|
195,469
|
|
|
$
|
34.26
|
|
|
—
|
|
|
10,000,000
|
|
(1)
|
The Company’s repurchase authorization was increased to 10,000,000 shares on November 3, 2011.
|
(2)
|
Represents shares withheld in connection with exercises of employee stock options.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
||||||||||
|
(Amounts in thousands, except per share data)
|
||||||||||||||||||
Net premiums written
|
$
|
4,357,368
|
|
|
$
|
3,850,926
|
|
|
$
|
3,730,095
|
|
|
$
|
4,033,899
|
|
|
$
|
4,575,989
|
|
Net premiums earned
|
4,160,867
|
|
|
3,835,582
|
|
|
3,805,849
|
|
|
4,289,580
|
|
|
4,663,701
|
|
|||||
Net investment income
|
526,351
|
|
|
530,525
|
|
|
379,008
|
|
|
533,480
|
|
|
672,660
|
|
|||||
Insurance service fees
|
92,843
|
|
|
85,405
|
|
|
93,245
|
|
|
102,856
|
|
|
97,689
|
|
|||||
Net investment gains (losses)
|
125,481
|
|
|
56,581
|
|
|
(38,408
|
)
|
|
(356,931
|
)
|
|
49,696
|
|
|||||
Revenues from wholly-owned investees
|
248,678
|
|
|
214,454
|
|
|
189,347
|
|
|
137,280
|
|
|
102,846
|
|
|||||
Total revenues
|
5,155,984
|
|
|
4,724,069
|
|
|
4,431,178
|
|
|
4,708,808
|
|
|
5,588,397
|
|
|||||
Interest expense
|
112,512
|
|
|
106,969
|
|
|
87,989
|
|
|
84,623
|
|
|
88,996
|
|
|||||
Income before income taxes
|
518,283
|
|
|
603,305
|
|
|
382,230
|
|
|
326,322
|
|
|
1,092,392
|
|
|||||
Income tax expense
|
(123,550
|
)
|
|
(153,739
|
)
|
|
(73,150
|
)
|
|
(44,919
|
)
|
|
(323,070
|
)
|
|||||
Noncontrolling interests
|
70
|
|
|
(279
|
)
|
|
(23
|
)
|
|
(262
|
)
|
|
(3,083
|
)
|
|||||
Net income to common stockholders
|
394,803
|
|
|
449,287
|
|
|
309,057
|
|
|
281,141
|
|
|
766,239
|
|
|||||
Data per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income per basic share
|
2.83
|
|
|
3.02
|
|
|
1.93
|
|
|
1.68
|
|
|
4.05
|
|
|||||
Net income per diluted share
|
2.71
|
|
|
2.90
|
|
|
1.86
|
|
|
1.62
|
|
|
3.90
|
|
|||||
Common stockholders’ equity
|
29.15
|
|
|
26.26
|
|
|
22.97
|
|
|
18.87
|
|
|
19.92
|
|
|||||
Cash dividends declared
|
0.31
|
|
|
0.27
|
|
|
0.24
|
|
|
0.23
|
|
|
0.20
|
|
|||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
139,688
|
|
|
148,752
|
|
|
160,357
|
|
|
166,956
|
|
|
188,981
|
|
|||||
Diluted
|
145,672
|
|
|
155,081
|
|
|
166,574
|
|
|
173,454
|
|
|
196,698
|
|
|||||
Investments
|
$
|
13,439,518
|
|
|
$
|
12,995,393
|
|
|
$
|
13,050,238
|
|
|
$
|
11,143,281
|
|
|
$
|
11,956,717
|
|
Total assets
|
18,487,731
|
|
|
17,528,547
|
|
|
17,328,596
|
|
|
16,121,158
|
|
|
16,820,005
|
|
|||||
Reserves for losses and loss expenses
|
9,337,134
|
|
|
9,016,549
|
|
|
9,071,671
|
|
|
8,999,596
|
|
|
8,678,034
|
|
|||||
Junior subordinated debentures
|
242,997
|
|
|
242,784
|
|
|
249,793
|
|
|
249,584
|
|
|
249,375
|
|
|||||
Senior notes and other debt
|
1,500,503
|
|
|
1,500,419
|
|
|
1,345,481
|
|
|
1,021,869
|
|
|
1,121,793
|
|
|||||
Common stockholders’ equity
|
4,008,426
|
|
|
3,702,876
|
|
|
3,596,067
|
|
|
3,046,319
|
|
|
3,592,368
|
|
|
Frequency (+/-)
|
||||||||||
Severity (+/-)
|
1%
|
|
5%
|
|
10%
|
||||||
1%
|
$
|
56,116
|
|
|
$
|
168,908
|
|
|
$
|
309,896
|
|
5%
|
168,908
|
|
|
286,166
|
|
|
432,738
|
|
|||
10%
|
309,896
|
|
|
432,738
|
|
|
586,291
|
|
(Dollars in thousands)
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Specialty
|
$
|
2,905,759
|
|
|
$
|
2,883,823
|
|
Regional
|
1,283,764
|
|
|
1,285,004
|
|
||
Alternative markets
|
1,986,111
|
|
|
1,867,470
|
|
||
Reinsurance
|
1,439,136
|
|
|
1,507,353
|
|
||
International
|
557,342
|
|
|
455,871
|
|
||
Net reserves for losses and loss expenses
|
8,172,112
|
|
|
7,999,521
|
|
||
Ceded reserves for losses and loss expenses
|
1,165,022
|
|
|
1,017,028
|
|
||
Gross reserves for losses and loss expenses
|
$
|
9,337,134
|
|
|
$
|
9,016,549
|
|
(Dollars in thousands)
|
Reported Case
Reserves
|
|
Incurred But
Not Reported
|
|
Total
|
||||||
December 31, 2011
|
|
|
|
|
|
||||||
General liability
|
$
|
890,238
|
|
|
$
|
1,974,361
|
|
|
$
|
2,864,599
|
|
Workers’ compensation
|
1,353,328
|
|
|
992,775
|
|
|
2,346,103
|
|
|||
Commercial automobile
|
275,198
|
|
|
195,323
|
|
|
470,521
|
|
|||
International
|
277,857
|
|
|
279,485
|
|
|
557,342
|
|
|||
Other
|
200,969
|
|
|
293,442
|
|
|
494,411
|
|
|||
Total primary
|
2,997,590
|
|
|
3,735,386
|
|
|
6,732,976
|
|
|||
Reinsurance
|
584,909
|
|
|
854,227
|
|
|
1,439,136
|
|
|||
Total
|
$
|
3,582,499
|
|
|
$
|
4,589,613
|
|
|
$
|
8,172,112
|
|
December 31, 2010
|
|
|
|
|
|
||||||
General liability
|
$
|
873,553
|
|
|
$
|
2,038,814
|
|
|
$
|
2,912,367
|
|
Workers’ compensation
|
1,188,117
|
|
|
1,022,331
|
|
|
2,210,448
|
|
|||
Commercial automobile
|
325,686
|
|
|
173,247
|
|
|
498,933
|
|
|||
International
|
195,981
|
|
|
259,890
|
|
|
455,871
|
|
|||
Other
|
158,794
|
|
|
255,755
|
|
|
414,549
|
|
|||
Total primary
|
2,742,131
|
|
|
3,750,037
|
|
|
6,492,168
|
|
|||
Reinsurance
|
639,997
|
|
|
867,356
|
|
|
1,507,353
|
|
|||
Total
|
$
|
3,382,128
|
|
|
$
|
4,617,393
|
|
|
$
|
7,999,521
|
|
|
For the Year Ended
|
||||||
|
December 31,
|
||||||
(Dollars in thousands)
|
2011
|
|
2010
|
||||
Favorable reserve development:
|
|
|
|
||||
Specialty
|
$
|
101,397
|
|
|
$
|
99,447
|
|
Regional
|
40,208
|
|
|
83,732
|
|
||
Alternative markets
|
3,115
|
|
|
22,158
|
|
||
Reinsurance
|
24,543
|
|
|
46,816
|
|
||
International
|
12,019
|
|
|
1,095
|
|
||
Total favorable reserve development
|
181,282
|
|
|
253,248
|
|
||
Premium offsets(1):
|
|
|
|
||||
Specialty
|
622
|
|
|
(134
|
)
|
||
Alternative markets
|
75
|
|
|
1,485
|
|
||
Reinsurance
|
—
|
|
|
(20,558
|
)
|
||
Net development
|
$
|
181,979
|
|
|
$
|
234,041
|
|
(Dollars in thousands)
|
Number of
Securities
|
|
Aggregate
Fair Value
|
|
Unrealized
Loss
|
|||||
Unrealized loss less than 20% of amortized cost
|
182
|
|
|
$
|
1,200,572
|
|
|
$
|
42,469
|
|
Unrealized loss of 20% or greater of amortized cost:
|
|
|
|
|
|
|||||
Less than twelve months
|
—
|
|
|
—
|
|
|
—
|
|
||
Twelve months and longer
|
12
|
|
|
82,628
|
|
|
32,080
|
|
||
Total
|
194
|
|
|
$
|
1,283,200
|
|
|
$
|
74,549
|
|
(Dollars in thousands)
|
Number of
Securities
|
|
Aggregate
Fair Value
|
|
Gross
Unrealized
Loss
|
|||||
Unrealized loss less than $5 million:
|
|
|
|
|
|
|||||
Mortgage-backed securities
|
15
|
|
|
$
|
106,923
|
|
|
$
|
6,115
|
|
Corporate
|
13
|
|
|
48,106
|
|
|
3,461
|
|
||
State and municipal
|
5
|
|
|
42,197
|
|
|
4,553
|
|
||
Foreign
|
1
|
|
|
586
|
|
|
12
|
|
||
Unrealized loss $5 million or more
|
|
|
|
|
|
|||||
Mortgage-backed security (1)
|
1
|
|
|
15,945
|
|
|
7,158
|
|
||
Total
|
35
|
|
|
$
|
213,757
|
|
|
$
|
21,299
|
|
Dollars in thousands
|
Carrying
Value
|
|
Percent
of Total
|
|||
Pricing source:
|
|
|
|
|||
Independent pricing services
|
$
|
10,599,158
|
|
|
94.7
|
%
|
Syndicate manager
|
111,438
|
|
|
1.0
|
%
|
|
Directly by the Company based on:
|
|
|
|
|||
Observable data
|
418,504
|
|
|
3.7
|
%
|
|
Cash flow model
|
67,828
|
|
|
0.6
|
%
|
|
Total
|
$
|
11,196,928
|
|
|
100.0
|
%
|
(Dollars in thousands)
|
2011
|
|
2010
|
||||
Specialty
|
|
|
|
||||
Gross premiums written
|
$
|
1,818,344
|
|
|
$
|
1,525,856
|
|
Net premiums written
|
1,554,516
|
|
|
1,311,831
|
|
||
Premiums earned
|
1,442,748
|
|
|
1,288,373
|
|
||
Loss ratio
|
59.4
|
%
|
|
58.3
|
%
|
||
Expense ratio
|
32.5
|
%
|
|
32.7
|
%
|
||
GAAP combined ratio
|
91.9
|
%
|
|
91.0
|
%
|
||
Regional
|
|
|
|
||||
Gross premiums written
|
$
|
1,149,362
|
|
|
$
|
1,160,136
|
|
Net premiums written
|
1,064,507
|
|
|
1,044,347
|
|
||
Premiums earned
|
1,065,975
|
|
|
1,066,922
|
|
||
Loss ratio
|
68.0
|
%
|
|
60.7
|
%
|
||
Expense ratio
|
35.9
|
%
|
|
35.9
|
%
|
||
GAAP combined ratio
|
103.9
|
%
|
|
96.6
|
%
|
||
Alternative Markets
|
|
|
|
||||
Gross premiums written
|
$
|
827,156
|
|
|
$
|
702,717
|
|
Net premiums written
|
619,097
|
|
|
582,045
|
|
||
Premiums earned
|
612,558
|
|
|
608,191
|
|
||
Loss ratio
|
72.3
|
%
|
|
67.6
|
%
|
||
Expense ratio
|
26.7
|
%
|
|
25.6
|
%
|
||
GAAP combined ratio
|
99.0
|
%
|
|
93.2
|
%
|
||
Reinsurance
|
|
|
|
||||
Gross premiums written
|
$
|
453,170
|
|
|
$
|
425,297
|
|
Net premiums written
|
430,329
|
|
|
401,239
|
|
||
Premiums earned
|
426,008
|
|
|
419,356
|
|
||
Loss ratio
|
61.6
|
%
|
|
52.5
|
%
|
||
Expense ratio
|
40.4
|
%
|
|
41.0
|
%
|
||
GAAP combined ratio
|
102.0
|
%
|
|
93.5
|
%
|
||
International
|
|
|
|
||||
Gross premiums written
|
$
|
829,281
|
|
|
$
|
602,071
|
|
Net premiums written
|
688,919
|
|
|
511,464
|
|
||
Premiums earned
|
613,578
|
|
|
452,740
|
|
||
Loss ratio
|
60.5
|
%
|
|
61.8
|
%
|
||
Expense ratio
|
40.0
|
%
|
|
40.4
|
%
|
||
GAAP combined ratio
|
100.5
|
%
|
|
102.2
|
%
|
||
Consolidated
|
|
|
|
||||
Gross premiums written
|
$
|
5,077,313
|
|
|
$
|
4,416,077
|
|
Net premiums written
|
4,357,368
|
|
|
3,850,926
|
|
||
Premiums earned
|
4,160,867
|
|
|
3,835,582
|
|
||
Loss ratio
|
63.9
|
%
|
|
60.2
|
%
|
||
Expense ratio
|
34.4
|
%
|
|
34.3
|
%
|
||
GAAP combined ratio
|
98.3
|
%
|
|
94.5
|
%
|
|
2011
|
|
2010
|
||||
Net income to common stockholders
|
$
|
394,803
|
|
|
$
|
449,287
|
|
Weighted average diluted shares
|
145,672
|
|
|
155,081
|
|
||
Net income per diluted share
|
$
|
2.71
|
|
|
$
|
2.90
|
|
•
|
Specialty premiums increased 19% to $1,818 million in 2011 from $1,526 million in 2010 primarily due to increased business in the energy and environmental markets. Gross premiums increased $121 million (27%) for other liability,$65 million (21%) for property lines, $38 million (30%) for commercial automobile, $22 million (11%) for professional liability, $10 million (11%) for products liability and $36 million (13%) for other lines.
|
•
|
Regional gross premiums decreased 1% to $1,149 million in 2011 from $1,160 million in 2010. Gross premiums increased $14 million (3%) for commercial multiple peril, $11 million (5%) for workers’ compensation and $7 million (4%) for other lines. Gross premiums decreased $7 million (2%) for commercial automobile. Gross premiums written decreased $36 million as a result of the transfer of fully reinsured assigned risk plan premiums to the alternative markets segment in 2011.
|
•
|
Alternative Markets gross premiums increased 18% to $827 million in 2011 from $703 million in 2010. Excluding assigned risk plans, which are fully reinsured, gross premiums increased 6% to $676 million in 2011 from $636 million in 2010. Gross premiums increased $51 million (68%) for accident and health products, $29 million (11%) for primary workers’ compensation and $13 million (38%) for other liability and decreased $4 million (7%) for other lines. Gross premiums decreased $48 million (24%) for excess workers’ compensation. Fully reinsured assigned risk premiums increased $84 million (including the $36 million transferred from the regional segment) to $151 million in 2011.
|
•
|
Reinsurance gross premiums increased 7% to $453 million in 2011 from $425 million in 2010. Gross premiums increased 9% to $314 million for casualty business and 1% to $139 million for property business.
|
•
|
International gross premiums increased 38% to $829 million in 2011 from $602 million in 2010. The increase was primarily due to an increase in business written by our Lloyd’s operation, our companies in Australia, and new insurance branches in Germany and Norway. Gross premiums increased $93 million (64%) for property lines, $53 million (56%) for assumed reinsurance, $27 million (58%) for liability lines, $19 million (18%) for professional liability, $16 million (27%) for workers’ compensation and $6 million (8%) for automobile. In addition, one percentage point of the 38% increase in gross premiums written resulted from changes in foreign exchange rates.
|
|
Amount
|
|
Average Annualized
Yield
|
||||||||||
(Dollars in thousands)
|
2011
|
|
2010
|
|
2011
|
|
2010
|
||||||
Fixed maturity securities, including cash and cash equivalents and loans receivable
|
$
|
483,905
|
|
|
$
|
501,750
|
|
|
4.0
|
%
|
|
4.1
|
%
|
Arbitrage trading account
|
16,576
|
|
|
27,155
|
|
|
4.9
|
|
|
7.0
|
|
||
Investment funds
|
9,452
|
|
|
(6,481
|
)
|
|
1.6
|
|
|
(1.3
|
)
|
||
Equity securities available for sale
|
12,416
|
|
|
11,661
|
|
|
3.5
|
|
|
3.5
|
|
||
Real estate
|
7,471
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
||
Gross investment income
|
529,820
|
|
|
534,085
|
|
|
3.9
|
%
|
|
4.0
|
%
|
||
Investment expenses
|
(3,469
|
)
|
|
(3,560
|
)
|
|
|
|
|
||||
Total
|
$
|
526,351
|
|
|
$
|
530,525
|
|
|
3.9
|
%
|
|
4.0
|
%
|
•
|
Specialty - The loss ratio of 59.4% in 2011 was 1.1 points higher than the loss ratio of 58.3% in 2010. Catastrophe losses were $17 million, or 1.2 loss ratio points, in 2011 compared with none in 2010. Favorable prior year reserve development was $102 million in 2011 compared with $99 million in 2010, a difference of 0.6 loss ratio points. The loss ratio excluding catastrophe losses and favorable prior year reserve development decreased 0.7 points to 65.3% in 2011 from 66.0% in 2010.
|
•
|
Regional - The loss ratio of 68.0% in 2011 was 7.3 points higher than the loss ratio of 60.7% in 2010. Catastrophe
|
•
|
Alternative Markets - The loss ratio of 72.3% in 2011 was 4.7 points higher than the loss ratio of 67.6% in 2010. Catastrophe losses were $2 million in 2011 compared with none in 2010, an increase of 0.3 loss ratio points. Favorable prior year reserve development was $3 million in 2011 compared with $24 million in 2010, a difference of 3.4 loss ratio points. The loss ratio excluding catastrophe losses and favorable prior year reserve development increased 1.0 points to 72.5% in 2011 from 71.5% in 2010.
|
•
|
Reinsurance - The loss ratio of 61.6% in 2011 was 9.1 points higher than the loss ratio of 52.5% in 2010. Catastrophe losses were $24 million in 2011 compared $4 million in 2010, an increase of 4.7 loss ratio points. Favorable prior year reserve development was $25 million in 2011 compared with $26 million in 2010, a difference of 0.5 loss ratio points. The loss ratio excluding catastrophe losses and favorable prior year reserve development increased 3.9 points to 61.7% in 2011 from 57.8% in 2010 due to higher non-catastrophe property losses.
|
•
|
International - The loss ratio of 60.5% in 2011 was 1.3 points lower than the loss ratio of 61.8% in 2010. Catastrophe losses were $25 million in 2011 compared with $4 million in 2010, an increase of 3.2 loss ratio points. Favorable prior year reserve development was $12 million in 2011 and $1 million in 2010, a difference of 1.7 loss ratio points. The loss ratio excluding catastrophe losses and favorable prior year reserve development decreased 2.8 points to 58.4% in 2011 from 61.2% in 2010 due to improved profitability for our businesses in South America and Australia.
|
(Dollars in thousands)
|
2011
|
|
2010
|
||||
Underwriting expenses
|
$
|
1,432,932
|
|
|
$
|
1,314,483
|
|
Service expenses
|
75,231
|
|
|
72,372
|
|
||
Net foreign currency (gains) losses
|
(1,884
|
)
|
|
2,126
|
|
||
Other costs and expenses
|
115,050
|
|
|
107,381
|
|
||
Total
|
$
|
1,621,329
|
|
|
$
|
1,496,362
|
|
(Dollars in thousands)
|
2010
|
|
2009
|
||||
Specialty
|
|
|
|
||||
Gross premiums written
|
$
|
1,525,856
|
|
|
$
|
1,464,205
|
|
Net premiums written
|
1,311,831
|
|
|
1,260,451
|
|
||
Premiums earned
|
1,288,373
|
|
|
1,354,355
|
|
||
Loss ratio
|
58.3
|
%
|
|
61.9
|
%
|
||
Expense ratio
|
32.7
|
%
|
|
31.1
|
%
|
||
GAAP combined ratio
|
91.0
|
%
|
|
93.0
|
%
|
||
Regional
|
|
|
|
||||
Gross premiums written
|
$
|
1,160,136
|
|
|
$
|
1,229,786
|
|
Net premiums written
|
1,044,347
|
|
|
1,081,100
|
|
||
Premiums earned
|
1,066,922
|
|
|
1,116,871
|
|
||
Loss ratio
|
60.7
|
%
|
|
61.4
|
%
|
||
Expense ratio
|
35.9
|
%
|
|
34.2
|
%
|
||
GAAP combined ratio
|
96.6
|
%
|
|
95.6
|
%
|
||
Alternative Markets
|
|
|
|
||||
Gross premiums written
|
$
|
702,717
|
|
|
$
|
664,749
|
|
Net premiums written
|
582,045
|
|
|
589,637
|
|
||
Premiums earned
|
608,191
|
|
|
597,932
|
|
||
Loss ratio
|
67.6
|
%
|
|
63.4
|
%
|
||
Expense ratio
|
25.6
|
%
|
|
25.8
|
%
|
||
GAAP combined ratio
|
93.2
|
%
|
|
89.2
|
%
|
||
Reinsurance
|
|
|
|
||||
Gross premiums written
|
$
|
425,297
|
|
|
$
|
455,968
|
|
Net premiums written
|
401,239
|
|
|
423,425
|
|
||
Premiums earned
|
419,356
|
|
|
411,511
|
|
||
Loss ratio
|
52.5
|
%
|
|
57.9
|
%
|
||
Expense ratio
|
41.0
|
%
|
|
39.1
|
%
|
||
GAAP combined ratio
|
93.5
|
%
|
|
97.0
|
%
|
||
International
|
|
|
|
||||
Gross premiums written
|
$
|
602,071
|
|
|
$
|
438,731
|
|
Net premiums written
|
511,464
|
|
|
375,482
|
|
||
Premiums earned
|
452,740
|
|
|
325,180
|
|
||
Loss ratio
|
61.8
|
%
|
|
59.9
|
%
|
||
Expense ratio
|
40.4
|
%
|
|
40.2
|
%
|
||
GAAP combined ratio
|
102.2
|
%
|
|
100.1
|
%
|
||
Consolidated
|
|
|
|
||||
Gross premiums written
|
$
|
4,416,077
|
|
|
$
|
4,253,439
|
|
Net premiums written
|
3,850,926
|
|
|
3,730,095
|
|
||
Premiums earned
|
3,835,582
|
|
|
3,805,849
|
|
||
Loss ratio
|
60.2
|
%
|
|
61.4
|
%
|
||
Expense ratio
|
34.3
|
%
|
|
32.8
|
%
|
||
GAAP combined ratio
|
94.5
|
%
|
|
94.2
|
%
|
|
2010
|
|
2009
|
||||
Net income to common stockholders
|
$
|
449,287
|
|
|
$
|
309,057
|
|
Weighted average diluted shares
|
155,081
|
|
|
166,574
|
|
||
Net income per diluted share
|
$
|
2.90
|
|
|
$
|
1.86
|
|
•
|
Specialty gross premiums increased 4% to $1,526 million in 2010 from $1,464 million in 2009. Gross premiums increased 12% for property lines, 6% for professional liability and 2% for other liability. Gross premiums decreased 18% for commercial automobile and 17% for products liability.
|
•
|
Regional gross premiums decreased 6% to $1,160 million in 2010 from $1,230 million in 2009. Gross premiums decreased 6% for workers' compensation, 6% for commercial automobile and 3% for commercial multiple peril. Gross premiums include assigned risk premiums, which are fully reinsured, of $36 million in 2010 and $66 million in 2009. The decrease in assigned risk premiums was due to the transfer of certain assigned risk premiums from the regional segment to the alternative markets segment in 2010.
|
•
|
Alternative Markets gross premiums increased 6% to $703 million in 2010 from $665 million in 2009. Gross premiums decreased 16% for excess workers' compensation and increased 1% for primary workers' compensation. Gross premiums include fully reinsured assigned risk premiums of $67 million in 2010 and $24 million in 2009. The increase is primarily due to the transfer from the regional segment described above.
|
•
|
Reinsurance gross premiums decreased 7% to $425 million in 2010 from $456 million in 2009. Gross premiums decreased 10% to $288 million for casualty business and increased 1% to $137 million for property business.
|
•
|
International gross premiums increased 37% to $602 million in 2010 from $439 million in 2009. The increase is primarily due to an increase in business written by our recently started operations in Canada, Norway and Brazil and our Lloyd's syndicate. Gross premiums increased 144% for property lines, 30% for liability lines, 24% for workers' compensation, 20% for reinsurance assumed, 6% for automobile and 1% for professional liability.
|
|
Amount
|
|
Average Annualized
Yield
|
||||||||||
(Dollars in thousands)
|
2010
|
|
2009
|
|
2010
|
|
2009
|
||||||
Fixed maturity securities, including cash and cash equivalents, loans receivable
|
$
|
501,750
|
|
|
$
|
495,140
|
|
|
4.1
|
%
|
|
4.2
|
%
|
Arbitrage trading account
|
27,155
|
|
|
31,023
|
|
|
7.0
|
%
|
|
10.4
|
%
|
||
Investment funds
|
(6,481
|
)
|
|
(163,862
|
)
|
|
(1.3
|
)%
|
|
(33.5
|
)%
|
||
Equity securities available for sale
|
11,661
|
|
|
20,295
|
|
|
3.5
|
%
|
|
6.1
|
%
|
||
Gross investment income
|
534,085
|
|
|
382,596
|
|
|
4.0
|
%
|
|
3.0
|
%
|
||
Investment expenses
|
(3,560
|
)
|
|
(3,588
|
)
|
|
|
|
|
||||
Total
|
$
|
530,525
|
|
|
$
|
379,008
|
|
|
4.0
|
%
|
|
2.9
|
%
|
•
|
Specialty - The loss ratio of 58.3% in 2010 was 3.6 points lower than the loss ratio of 61.9% in 2009. Favorable prior year reserve development was $99 million in 2010 compared with $69 million in 2009, a difference of 2.6 loss ratio points. The loss ratio excluding favorable prior year reserve development decreased 1.0 points to 66.0% in 2010 from 67.0% in 2009.
|
•
|
Regional - The loss ratio was 60.7% in 2010 was 0.7 points lower than the loss ratio of 61.4% in 2009. Catastrophe losses were $73 million in 2010 compared with $63 million in 2009, an increase of 1.3 loss ratio points. Favorable prior year reserve development was $84 million in 2010 compared with $52 million in 2009, a difference of 3.2 loss ratio points. The loss ratio excluding catastrophe losses and favorable prior year reserve development increased 1.2
|
•
|
Alternative Markets - The loss ratio of 67.6% in 2010 was 4.2 points higher than the loss ratio of 63.4% in 2009. Favorable prior year development was $24 million in 2011 compared with $45 million in 2010, a difference of 3.7 loss ratio points. The loss ratio excluding favorable prior year reserve development increased 0.5 points to 71.5% in 2011 from 71.0% in 2010.
|
•
|
Reinsurance - The loss ratio of 52.5% in 2010 was 5.4 points lower than the loss ratio of 57.9% in 2009. Catastrophe losses were $4 million, or 1.0 loss ratio points, in 2010 compared with none in 2009. Favorable prior year reserve development was $26 million in 2010 compared with $16 million in 2009, a difference of 2.4 loss ratio points. The loss ratio excluding catastrophe losses and favorable prior year reserve development decreased 4.0 points to 57.8% in 2010 from 61.8% in 2009.
|
•
|
International - The loss ratio of 61.8% in 2010 was 1.9 points higher than the loss ratio of 59.9% in 2009. Catastrophe losses were $4 million, or 0.9 loss ratio points, in 2010 compared with none in 2009. Favorable prior year reserve development was $1 million in 2010 and $8 million in 2009, a difference of 2.1 loss ratio points. The loss ratio excluding catastrophe losses and favorable prior year reserve development decreased 1.1 points to 61.2% in 2010 from 62.3% in 2009.
|
(Dollars in thousands)
|
2010
|
|
2009
|
||||
Underwriting expenses
|
$
|
1,314,483
|
|
|
$
|
1,248,463
|
|
Service expenses
|
72,372
|
|
|
78,331
|
|
||
Net foreign currency losses
|
2,126
|
|
|
4,213
|
|
||
Other costs and expenses
|
107,381
|
|
|
109,831
|
|
||
Total
|
$
|
1,496,362
|
|
|
$
|
1,440,838
|
|
(Dollars in thousands)
|
Carrying
Value
|
|
Percent
of Total
|
|||
Fixed maturity securities:
|
|
|
|
|||
U.S. government and government agencies
|
$
|
976,493
|
|
|
7
|
%
|
State and municipal:
|
|
|
|
|||
Special revenue
|
2,150,746
|
|
|
16
|
%
|
|
Pre-refunded (1)
|
1,334,500
|
|
|
10
|
%
|
|
State general obligation
|
975,576
|
|
|
7
|
%
|
|
Corporate backed
|
476,273
|
|
|
4
|
%
|
|
Local general obligation
|
460,329
|
|
|
3
|
%
|
|
Total state and municipal
|
5,397,424
|
|
|
40
|
%
|
|
Mortgage-backed securities:
|
|
|
|
|||
Agency
|
1,200,848
|
|
|
9
|
%
|
|
Residential-Prime
|
228,893
|
|
|
2
|
%
|
|
Residential-Alt A
|
82,186
|
|
|
1
|
%
|
|
Commercial
|
108,419
|
|
|
1
|
%
|
|
Total mortgage-backed securities
|
1,620,346
|
|
|
13
|
%
|
|
Corporate:
|
|
|
|
|||
Industrial
|
1,232,553
|
|
|
9
|
%
|
|
Financial
|
573,495
|
|
|
4
|
%
|
|
Asset-backed
|
315,738
|
|
|
2
|
%
|
|
Utilities
|
193,423
|
|
|
1
|
%
|
|
Other
|
114,211
|
|
|
1
|
%
|
|
Total corporate
|
2,429,420
|
|
|
17
|
%
|
|
Foreign government and corporate securities
|
888,354
|
|
|
7
|
%
|
|
Total fixed maturity securities
|
11,312,037
|
|
|
84
|
%
|
|
Equity securities available for sale:
|
|
|
|
|||
Common stocks
|
319,982
|
|
|
2
|
%
|
|
Preferred stocks
|
123,457
|
|
|
1
|
%
|
|
Total equity securities available for sale
|
443,439
|
|
|
3
|
%
|
|
|
|
|
|
|||
Investment funds
|
680,638
|
|
|
5
|
%
|
|
Arbitrage trading account
|
397,312
|
|
|
3
|
%
|
|
Real estate
|
342,905
|
|
|
3
|
%
|
|
Loans receivable
|
263,187
|
|
|
2
|
%
|
|
Total investments
|
$
|
13,439,518
|
|
|
100
|
%
|
(1)
|
Pre-refunded securities are securities for which an escrow account has been established to fund the remaining payments of principal and interest through maturity. Such escrow accounts are funded almost exclusively with U.S. Treasury and U.S. government agency securities.
|
(Dollars in thousands)
|
Government
|
Corporate
|
Total
|
||||||
Australia
|
$
|
143,767
|
|
$
|
81,527
|
|
$
|
225,294
|
|
United Kingdom
|
171,828
|
|
40,983
|
|
212,811
|
|
|||
Germany
|
95,277
|
|
27,593
|
|
122,870
|
|
|||
Canada
|
64,479
|
|
33,274
|
|
97,753
|
|
|||
Argentina
|
64,312
|
|
—
|
|
64,312
|
|
|||
Brazil
|
43,939
|
|
—
|
|
43,939
|
|
|||
Supranational (1)
|
37,806
|
|
—
|
|
37,806
|
|
|||
Switzerland
|
—
|
|
28,668
|
|
28,668
|
|
|||
Norway
|
25,833
|
|
—
|
|
25,833
|
|
|||
Finland
|
—
|
|
11,605
|
|
11,605
|
|
|||
France
|
—
|
|
4,611
|
|
4,611
|
|
|||
Singapore
|
4,609
|
|
—
|
|
4,609
|
|
|||
Chile
|
3,672
|
|
—
|
|
3,672
|
|
|||
Uruguay
|
3,155
|
|
—
|
|
3,155
|
|
|||
New Zealand
|
1,416
|
|
—
|
|
1,416
|
|
|||
Total
|
$
|
660,093
|
|
$
|
228,261
|
|
$
|
888,354
|
|
Reinsurer
|
Rating
|
(1)
|
Amount
|
||
Munich Re
|
AA-
|
|
163,420
|
|
|
Swiss Re
|
AA-
|
--
|
72,690
|
|
|
Transatlantic Re
|
A
|
--
|
64,619
|
|
|
Partner Re
|
A+
|
--
|
60,769
|
|
|
Berkshire Hathaway
|
A++
|
--
|
56,042
|
|
|
Axis Capital
|
A
|
--
|
54,121
|
|
|
Lloyd's of London
|
A+
|
|
52,859
|
|
|
Ace Group
|
A+
|
--
|
43,463
|
|
|
Hannover Re Group
|
A
|
|
33,262
|
|
|
Arch Capital Group
|
A
|
--
|
22,983
|
|
|
Other reinsurers rated A- or better
|
|
--
|
166,265
|
|
|
Non-rated and other (2)
|
|
--
|
58,116
|
|
|
Subtotal
|
|
--
|
848,609
|
|
|
Residual market pools (3)
|
|
--
|
367,070
|
|
|
Total
|
|
|
$
|
1,215,679
|
|
|
|
|
|
(2)
|
The majority of "non-rated and other" consists of amounts due from government sponsored reinsurers and amounts that are secured by letters of credit or other forms of collateral.
|
(3)
|
Many states require licensed insurers that provide workers' compensation insurance to participate in programs that provide workers' compensation to employers that cannot procure coverage from an insurer on a voluntary basis. Insurers can fulfill this residual market obligation by participating in pools where results are shared by the participating companies. The Company acts as a servicing carrier for workers' compensation pools in 18 states. As a servicing carrier, the Company writes residual market business directly and then cedes 100% of this business to the respective pool. As a servicing carrier, the Company receives fee income for its services. The Company does not retain underwriting risk, and credit risk is limited as ceded balances are jointly shared by all the pool members.
|
Estimated Payments By Periods
|
2012
|
2013
|
2014
|
2015
|
2016
|
Thereafter
|
||||||||||||
Gross reserves for losses
|
$
|
2,359,424
|
|
$
|
1,605,146
|
|
$
|
1,245,398
|
|
$
|
928,858
|
|
$
|
693,795
|
|
$
|
3,457,982
|
|
Operating lease obligations
|
34,635
|
|
31,177
|
|
26,808
|
|
22,646
|
|
16,329
|
|
156,686
|
|
||||||
Purchase obligations
|
53,010
|
|
35,235
|
|
1,297
|
|
1,059
|
|
759
|
|
687
|
|
||||||
Junior subordinated debentures
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
250,000
|
|
||||||
Debt maturities
|
4,373
|
|
200,779
|
|
26,196
|
|
200,000
|
|
2,413
|
|
1,077,068
|
|
||||||
Interest payments
|
111,230
|
|
101,285
|
|
98,754
|
|
91,457
|
|
86,730
|
|
981,110
|
|
||||||
Other long-term liabilities
|
33,850
|
|
16,635
|
|
19,187
|
|
20,062
|
|
9,985
|
|
69,189
|
|
||||||
Total
|
$
|
2,596,522
|
|
$
|
1,990,257
|
|
$
|
1,417,640
|
|
$
|
1,264,082
|
|
810,011
|
|
$
|
5,992,722
|
|
|
|
|
|
|
|
|
|
|
Effective
|
|
||
Dollars in thousands
|
Duration
|
|
||
|
(Years)
|
Fair Value
|
||
Cash and cash equivalents
|
—
|
$
|
911,742
|
|
U. S. government securities
|
3.9
|
976,493
|
|
|
State and municipal
|
3.9
|
5,409,970
|
|
|
Corporate
|
4.1
|
2,430,137
|
|
|
Foreign
|
3.1
|
888,354
|
|
|
Mortgage-backed securities
|
3.6
|
1,625,956
|
|
|
Loans receivable
|
3.1
|
245,169
|
|
|
Total
|
3.6
|
$
|
12,487,821
|
|
|
|
|
Change in interest rates:
|
Estimated Fair Value
|
|
Change in Fair Value
|
||||
|
|
|
|
||||
300 basis point rise
|
$
|
11,197,874
|
|
|
$
|
(1,289,947
|
)
|
200 basis point rise
|
11,607,259
|
|
|
(880,562
|
)
|
||
100 basis point rise
|
12,037,894
|
|
|
(449,927
|
)
|
||
Base scenario
|
12,487,821
|
|
|
—
|
|
||
100 basis point decline
|
12,889,827
|
|
|
402,006
|
|
||
200 basis point decline
|
13,135,982
|
|
|
648,161
|
|
||
300 basis point decline
|
13,267,051
|
|
|
779,230
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in thousands except per share data)
|
2011
|
|
2010
|
|
2009
|
||||||
REVENUES:
|
|
|
|
|
|
|
|
|
|||
Net premiums written
|
$
|
4,357,368
|
|
|
$
|
3,850,926
|
|
|
$
|
3,730,095
|
|
Change in net unearned premiums
|
(196,501
|
)
|
|
(15,344
|
)
|
|
75,754
|
|
|||
Net premiums earned
|
4,160,867
|
|
|
3,835,582
|
|
|
3,805,849
|
|
|||
Net investment income
|
526,351
|
|
|
530,525
|
|
|
379,008
|
|
|||
Insurance service fees
|
92,843
|
|
|
85,405
|
|
|
93,245
|
|
|||
Net investment gains (losses):
|
|
|
|
|
|
||||||
Net realized gains on investment sales
|
125,881
|
|
|
65,786
|
|
|
104,453
|
|
|||
Other-than-temporary impairments
|
(400
|
)
|
|
(9,205
|
)
|
|
(151,727
|
)
|
|||
Portion of impairments reclassified to other comprehensive income
|
—
|
|
|
—
|
|
|
8,866
|
|
|||
Net investment gains (losses)
|
125,481
|
|
|
56,581
|
|
|
(38,408
|
)
|
|||
Revenues from wholly-owned investees
|
248,678
|
|
|
214,454
|
|
|
189,347
|
|
|||
Other income
|
1,764
|
|
|
1,522
|
|
|
2,137
|
|
|||
Total revenues
|
5,155,984
|
|
|
4,724,069
|
|
|
4,431,178
|
|
|||
OPERATING COSTS AND EXPENSES:
|
|
|
|
|
|
||||||
Losses and loss expenses
|
2,658,365
|
|
|
2,309,867
|
|
|
2,336,707
|
|
|||
Other operating costs and expenses
|
1,621,329
|
|
|
1,496,362
|
|
|
1,440,838
|
|
|||
Expenses from wholly-owned investees
|
245,495
|
|
|
207,566
|
|
|
183,414
|
|
|||
Interest expense
|
112,512
|
|
|
106,969
|
|
|
87,989
|
|
|||
Total operating costs and expenses
|
4,637,701
|
|
|
4,120,764
|
|
|
4,048,948
|
|
|||
Income before income taxes
|
518,283
|
|
|
603,305
|
|
|
382,230
|
|
|||
Income tax expense
|
(123,550
|
)
|
|
(153,739
|
)
|
|
(73,150
|
)
|
|||
Net income before noncontrolling interests
|
394,733
|
|
|
449,566
|
|
|
309,080
|
|
|||
Noncontrolling interests
|
70
|
|
|
(279
|
)
|
|
(23
|
)
|
|||
Net income to common stockholders
|
$
|
394,803
|
|
|
$
|
449,287
|
|
|
$
|
309,057
|
|
NET INCOME PER SHARE:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.83
|
|
|
$
|
3.02
|
|
|
$
|
1.93
|
|
Diluted
|
$
|
2.71
|
|
|
$
|
2.90
|
|
|
$
|
1.86
|
|
|
December 31,
|
||||||
(Dollars in thousands except share data)
|
2011
|
|
2010
|
||||
Assets
|
|
|
|
|
|
||
Investments:
|
|
|
|
|
|
||
Fixed maturity securities
|
$
|
11,312,037
|
|
|
$
|
11,209,154
|
|
Equity securities available for sale
|
443,439
|
|
|
561,053
|
|
||
Arbitrage trading account
|
397,312
|
|
|
359,192
|
|
||
Investment funds
|
680,638
|
|
|
512,411
|
|
||
Loans receivable
|
263,187
|
|
|
353,583
|
|
||
Real estate
|
342,905
|
|
|
—
|
|
||
Total investments
|
13,439,518
|
|
|
12,995,393
|
|
||
Cash and cash equivalents
|
911,742
|
|
|
642,952
|
|
||
Premiums and fees receivable
|
1,206,204
|
|
|
1,087,208
|
|
||
Due from reinsurers
|
1,215,679
|
|
|
1,070,256
|
|
||
Accrued investment income
|
133,776
|
|
|
138,384
|
|
||
Prepaid reinsurance premiums
|
258,271
|
|
|
215,816
|
|
||
Deferred policy acquisition costs
|
448,795
|
|
|
405,942
|
|
||
Property, furniture and equipment
|
262,275
|
|
|
254,720
|
|
||
Deferred federal and foreign income taxes
|
—
|
|
|
65,492
|
|
||
Goodwill
|
90,832
|
|
|
90,581
|
|
||
Trading account receivable from brokers and clearing organizations
|
318,240
|
|
|
339,235
|
|
||
Current federal and foreign income taxes
|
9,670
|
|
|
23,605
|
|
||
Other assets
|
192,729
|
|
|
198,963
|
|
||
Total assets
|
$
|
18,487,731
|
|
|
$
|
17,528,547
|
|
Liabilities and Equity
|
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
|
||
Reserves for losses and loss expenses
|
$
|
9,337,134
|
|
|
$
|
9,016,549
|
|
Unearned premiums
|
2,189,575
|
|
|
1,953,721
|
|
||
Due to reinsurers
|
241,204
|
|
|
215,723
|
|
||
Trading account securities sold but not yet purchased
|
62,514
|
|
|
53,494
|
|
||
Deferred federal and foreign income taxes
|
31,623
|
|
|
—
|
|
||
Other liabilities
|
866,229
|
|
|
836,001
|
|
||
Junior subordinated debentures
|
242,997
|
|
|
242,784
|
|
||
Senior notes and other debt
|
1,500,503
|
|
|
1,500,419
|
|
||
Total liabilities
|
14,471,779
|
|
|
13,818,691
|
|
||
Equity:
|
|
|
|
|
|
||
Preferred stock, par value $.10 per share:
|
|
|
|
|
|
||
Authorized 5,000,000 shares; issued and outstanding — none
|
—
|
|
|
—
|
|
||
Common stock, par value $.20 per share:
|
|
|
|
|
|
||
Authorized 500,000,000 shares, issued and outstanding, net of treasury shares, 137,520,019 and 141,009,834 shares, respectively
|
47,024
|
|
|
47,024
|
|
||
Additional paid-in capital
|
941,109
|
|
|
935,099
|
|
||
Retained earnings
|
4,546,232
|
|
|
4,194,684
|
|
||
Accumulated other comprehensive income
|
354,851
|
|
|
276,563
|
|
||
Treasury stock, at cost, 97,597,899 and 94,108,084 shares, respectively
|
(1,880,790
|
)
|
|
(1,750,494
|
)
|
||
Total common stockholders’ equity
|
4,008,426
|
|
|
3,702,876
|
|
||
Noncontrolling interests
|
7,526
|
|
|
6,980
|
|
||
Total equity
|
4,015,952
|
|
|
3,709,856
|
|
||
Total liabilities and equity
|
$
|
18,487,731
|
|
|
$
|
17,528,547
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2011
|
|
2010
|
|
2009
|
||||||
COMMON STOCK:
|
|
|
|
|
|
|
|
|
|||
Beginning and end of period
|
$
|
47,024
|
|
|
$
|
47,024
|
|
|
$
|
47,024
|
|
ADDITIONAL PAID IN CAPITAL:
|
|
|
|
|
|
|
|
|
|||
Beginning of period
|
$
|
935,099
|
|
|
$
|
926,359
|
|
|
$
|
920,241
|
|
Stock options exercised and restricted units issued including tax benefit
|
(20,601
|
)
|
|
(17,042
|
)
|
|
(17,665
|
)
|
|||
Restricted stock units expensed
|
26,303
|
|
|
25,584
|
|
|
23,649
|
|
|||
Stock options expensed
|
—
|
|
|
—
|
|
|
12
|
|
|||
Stock issued
|
308
|
|
|
198
|
|
|
122
|
|
|||
End of period
|
$
|
941,109
|
|
|
$
|
935,099
|
|
|
$
|
926,359
|
|
RETAINED EARNINGS:
|
|
|
|
|
|
|
|
|
|||
Beginning of period
|
$
|
4,194,684
|
|
|
$
|
3,785,187
|
|
|
$
|
3,514,531
|
|
Net income to common stockholders
|
394,803
|
|
|
449,287
|
|
|
309,057
|
|
|||
Dividends
|
(43,255
|
)
|
|
(39,790
|
)
|
|
(38,401
|
)
|
|||
End of period
|
$
|
4,546,232
|
|
|
$
|
4,194,684
|
|
|
$
|
3,785,187
|
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|||
Unrealized investment gains (losses):
|
|
|
|
|
|
|
|
|
|||
Beginning of period
|
$
|
334,747
|
|
|
$
|
219,394
|
|
|
$
|
(142,216
|
)
|
Unrealized gains on securities not other-than-temporarily impaired
|
98,015
|
|
|
114,468
|
|
|
365,136
|
|
|||
Unrealized gains (losses) on other-than-temporarily impaired securities
|
(2,343
|
)
|
|
885
|
|
|
(3,526
|
)
|
|||
End of period
|
430,419
|
|
|
334,747
|
|
|
219,394
|
|
|||
Currency translation adjustments:
|
|
|
|
|
|
|
|
|
|||
Beginning of period
|
(42,488
|
)
|
|
(40,371
|
)
|
|
(72,475
|
)
|
|||
Net change in period
|
(18,751
|
)
|
|
(2,117
|
)
|
|
32,104
|
|
|||
End of period
|
(61,239
|
)
|
|
(42,488
|
)
|
|
(40,371
|
)
|
|||
Net pension asset:
|
|
|
|
|
|
|
|
|
|||
Beginning of period
|
(15,696
|
)
|
|
(15,816
|
)
|
|
(14,268
|
)
|
|||
Net change in period
|
1,367
|
|
|
120
|
|
|
(1,548
|
)
|
|||
End of period
|
(14,329
|
)
|
|
(15,696
|
)
|
|
(15,816
|
)
|
|||
Total accumulated other comprehensive income
|
$
|
354,851
|
|
|
$
|
276,563
|
|
|
$
|
163,207
|
|
TREASURY STOCK:
|
|
|
|
|
|
|
|
|
|||
Beginning of period
|
$
|
(1,750,494
|
)
|
|
$
|
(1,325,710
|
)
|
|
$
|
(1,206,518
|
)
|
Stock exercised/vested
|
56,303
|
|
|
45,687
|
|
|
27,322
|
|
|||
Stock issued
|
564
|
|
|
536
|
|
|
630
|
|
|||
Stock repurchased
|
(187,163
|
)
|
|
(471,007
|
)
|
|
(147,144
|
)
|
|||
End of period
|
$
|
(1,880,790
|
)
|
|
$
|
(1,750,494
|
)
|
|
$
|
(1,325,710
|
)
|
NONCONTROLLING INTERESTS:
|
|
|
|
|
|
|
|
|
|||
Beginning of period
|
$
|
6,980
|
|
|
$
|
5,879
|
|
|
$
|
5,361
|
|
Change in subsidiary shares from noncontrolling interest
|
671
|
|
|
814
|
|
|
474
|
|
|||
Net (income) loss
|
(70
|
)
|
|
279
|
|
|
23
|
|
|||
Other comprehensive income (loss), net of tax
|
(55
|
)
|
|
8
|
|
|
21
|
|
|||
End of period
|
$
|
7,526
|
|
|
$
|
6,980
|
|
|
$
|
5,879
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2011
|
|
2010
|
|
2009
|
||||||
Net income before noncontrolling interests
|
$
|
394,733
|
|
|
$
|
449,566
|
|
|
$
|
309,080
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|||
Change in unrealized foreign exchange gains (losses)
|
(18,751
|
)
|
|
(2,117
|
)
|
|
32,104
|
|
|||
Unrealized holding gains on investment securities arising during the period, net of taxes
|
177,264
|
|
|
152,235
|
|
|
336,757
|
|
|||
Reclassification adjustment for net investment gains (losses) included in net income, net of taxes
|
(81,647
|
)
|
|
(36,874
|
)
|
|
24,874
|
|
|||
Change in unrecognized pension obligation, net of taxes
|
1,367
|
|
|
120
|
|
|
(1,548
|
)
|
|||
Other comprehensive income
|
78,233
|
|
|
113,364
|
|
|
392,187
|
|
|||
Comprehensive income
|
472,966
|
|
|
562,930
|
|
|
701,267
|
|
|||
Comprehensive income (loss) to the noncontrolling interest
|
125
|
|
|
(287
|
)
|
|
(44
|
)
|
|||
Comprehensive income to common shareholders
|
$
|
473,091
|
|
|
$
|
562,643
|
|
|
$
|
701,223
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2011
|
|
2010
|
|
2009
|
||||||
CASH FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|||
Net income to common stockholders
|
$
|
394,803
|
|
|
$
|
449,287
|
|
|
$
|
309,057
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net investment (gains) losses
|
(125,481
|
)
|
|
(56,581
|
)
|
|
38,408
|
|
|||
Depreciation and amortization
|
88,012
|
|
|
82,867
|
|
|
78,875
|
|
|||
Noncontrolling interests
|
(70
|
)
|
|
279
|
|
|
23
|
|
|||
Investment funds
|
1,751
|
|
|
49,400
|
|
|
166,685
|
|
|||
Stock incentive plans
|
27,175
|
|
|
27,407
|
|
|
24,465
|
|
|||
Change in:
|
|
|
|
|
|
|
|
||||
Arbitrage trading account
|
(8,106
|
)
|
|
(12,993
|
)
|
|
(406,622
|
)
|
|||
Premiums and fees receivable
|
(122,468
|
)
|
|
(41,167
|
)
|
|
17,159
|
|
|||
Reinsurance accounts
|
(161,070
|
)
|
|
(14,960
|
)
|
|
26,010
|
|
|||
Deferred policy acquisition costs
|
(43,738
|
)
|
|
(15,272
|
)
|
|
6,181
|
|
|||
Deferred income taxes
|
44,945
|
|
|
63,866
|
|
|
(52,536
|
)
|
|||
Reserves for losses and loss expenses
|
325,758
|
|
|
(103,745
|
)
|
|
41,923
|
|
|||
Unearned premiums
|
238,499
|
|
|
3,414
|
|
|
(57,261
|
)
|
|||
Other
|
10,269
|
|
|
19,514
|
|
|
123,687
|
|
|||
Net cash from operating activities
|
670,279
|
|
|
451,316
|
|
|
316,054
|
|
|||
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
||||
Proceeds from sale of fixed maturity securities
|
1,293,876
|
|
|
1,554,906
|
|
|
2,436,258
|
|
|||
Proceeds from sale of equity securities
|
159,827
|
|
|
137,990
|
|
|
188,646
|
|
|||
Distributions from (contributions to) investment funds
|
(113,913
|
)
|
|
(53,979
|
)
|
|
(87,011
|
)
|
|||
Proceeds from maturities and prepayments of fixed maturity securities
|
1,697,144
|
|
|
1,374,378
|
|
|
1,214,157
|
|
|||
Purchase of fixed maturity securities
|
(2,815,340
|
)
|
|
(2,755,449
|
)
|
|
(4,869,368
|
)
|
|||
Purchase of equity securities
|
(97,986
|
)
|
|
(193,914
|
)
|
|
(67,309
|
)
|
|||
Real Estate purchased
|
(96,552
|
)
|
|
—
|
|
|
—
|
|
|||
Change in loans receivable
|
92,176
|
|
|
23,317
|
|
|
(11,363
|
)
|
|||
Net additions to property, furniture and equipment
|
(45,320
|
)
|
|
(49,605
|
)
|
|
(30,455
|
)
|
|||
Change in balances due to (from) security brokers
|
(16,194
|
)
|
|
(297
|
)
|
|
144,023
|
|
|||
Payment for business purchased, net of cash acquired
|
(261,992
|
)
|
|
—
|
|
|
(33,812
|
)
|
|||
Net cash from (used in) investing activities
|
(204,274
|
)
|
|
37,347
|
|
|
(1,116,234
|
)
|
|||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
||||
Net proceeds from issuance of debt
|
—
|
|
|
309,030
|
|
|
333,589
|
|
|||
Net proceeds from stock options exercised
|
21,963
|
|
|
17,730
|
|
|
5,426
|
|
|||
Repayment of senior notes and other debt
|
(1,310
|
)
|
|
(162,685
|
)
|
|
(11,165
|
)
|
|||
Cash dividends to common stockholders
|
(43,253
|
)
|
|
(49,348
|
)
|
|
(28,843
|
)
|
|||
Purchase of common treasury shares
|
(187,163
|
)
|
|
(471,007
|
)
|
|
(147,144
|
)
|
|||
Other
|
14,550
|
|
|
(2,795
|
)
|
|
21,522
|
|
|||
Net cash from (used in) financing activities
|
(195,213
|
)
|
|
(359,075
|
)
|
|
173,385
|
|
|||
Net impact on cash due to change in foreign exchange rates
|
(2,002
|
)
|
|
(2,066
|
)
|
|
7,390
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
268,790
|
|
|
127,522
|
|
|
(619,405
|
)
|
|||
Cash and cash equivalents at beginning of year
|
642,952
|
|
|
515,430
|
|
|
1,134,835
|
|
|||
Cash and cash equivalents at end of year
|
$
|
911,742
|
|
|
$
|
642,952
|
|
|
$
|
515,430
|
|
(Dollars in thousands)
|
2011
|
||
Fixed maturity securities
|
$
|
3,213
|
|
Real Estate
|
256,209
|
|
|
Cash and cash equivalents
|
12,172
|
|
|
Goodwill
|
251
|
|
|
Other assets
|
6,566
|
|
|
Total assets acquired
|
278,411
|
|
|
Other liabilities assumed
|
4,247
|
|
|
Net assets acquired
|
$
|
274,164
|
|
(Dollars in thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||||
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
State and municipal
|
$
|
74,354
|
|
|
$
|
12,546
|
|
|
$
|
—
|
|
|
$
|
86,900
|
|
|
$
|
74,354
|
|
Residential mortgage-backed securities
|
35,759
|
|
|
5,610
|
|
|
—
|
|
|
41,369
|
|
|
35,759
|
|
|||||
Corporate
|
4,996
|
|
|
717
|
|
|
—
|
|
|
5,713
|
|
|
4,996
|
|
|||||
Total held to maturity
|
115,109
|
|
|
18,873
|
|
|
—
|
|
|
133,982
|
|
|
115,109
|
|
|||||
Available for sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and government agency
|
906,924
|
|
|
69,920
|
|
|
(351
|
)
|
|
976,493
|
|
|
976,493
|
|
|||||
State and municipal
|
5,031,275
|
|
|
308,345
|
|
|
(16,550
|
)
|
|
5,323,070
|
|
|
5,323,070
|
|
|||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential(1)
|
1,416,427
|
|
|
75,635
|
|
|
(15,894
|
)
|
|
1,476,168
|
|
|
1,476,168
|
|
|||||
Commercial
|
105,383
|
|
|
4,054
|
|
|
(1,018
|
)
|
|
108,419
|
|
|
108,419
|
|
|||||
Corporate
|
2,328,200
|
|
|
132,311
|
|
|
(36,087
|
)
|
|
2,424,424
|
|
|
2,424,424
|
|
|||||
Foreign
|
850,838
|
|
|
42,165
|
|
|
(4,649
|
)
|
|
888,354
|
|
|
888,354
|
|
|||||
Total available for sale
|
10,639,047
|
|
|
632,430
|
|
|
(74,549
|
)
|
|
11,196,928
|
|
|
11,196,928
|
|
|||||
Total investment in fixed maturity securities
|
$
|
10,754,156
|
|
|
$
|
651,303
|
|
|
$
|
(74,549
|
)
|
|
$
|
11,330,910
|
|
|
$
|
11,312,037
|
|
(Dollars in thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||||
December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
State and municipal
|
$
|
71,998
|
|
|
$
|
3,440
|
|
|
$
|
(1,129
|
)
|
|
$
|
74,309
|
|
|
$
|
71,998
|
|
Residential mortgage-backed securities
|
39,002
|
|
|
3,667
|
|
|
—
|
|
|
42,669
|
|
|
39,002
|
|
|||||
Corporate
|
4,995
|
|
|
185
|
|
|
—
|
|
|
5,180
|
|
|
4,995
|
|
|||||
Total held to maturity
|
115,995
|
|
|
7,292
|
|
|
(1,129
|
)
|
|
122,158
|
|
|
115,995
|
|
|||||
Available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. government and government agency
|
1,289,669
|
|
|
58,658
|
|
|
(452
|
)
|
|
1,347,875
|
|
|
1,347,875
|
|
|||||
State and municipal
|
5,302,513
|
|
|
203,221
|
|
|
(44,288
|
)
|
|
5,461,446
|
|
|
5,461,446
|
|
|||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential(1)
|
1,319,289
|
|
|
52,165
|
|
|
(13,278
|
)
|
|
1,358,176
|
|
|
1,358,176
|
|
|||||
Commercial
|
57,057
|
|
|
2,207
|
|
|
(5,594
|
)
|
|
53,670
|
|
|
53,670
|
|
|||||
Corporate
|
2,055,513
|
|
|
93,789
|
|
|
(29,379
|
)
|
|
2,119,923
|
|
|
2,119,923
|
|
|||||
Foreign
|
713,157
|
|
|
39,800
|
|
|
(888
|
)
|
|
752,069
|
|
|
752,069
|
|
|||||
Total available for sale
|
10,737,198
|
|
|
449,840
|
|
|
(93,879
|
)
|
|
11,093,159
|
|
|
11,093,159
|
|
|||||
Total investment in fixed maturity securities
|
$
|
10,853,193
|
|
|
$
|
457,132
|
|
|
$
|
(95,008
|
)
|
|
$
|
11,215,317
|
|
|
$
|
11,209,154
|
|
(1)
|
Gross unrealized losses for mortgage-backed securities include
$7,668,000
and
$4,064,000
, as of
December 31, 2011
and
2010
, respectively, related to the non-credit portion of OTTI recognized in other comprehensive income.
|
(Dollars in thousands)
|
Amortized
Cost
|
|
Fair Value
|
||||
Due in one year or less
|
$
|
731,638
|
|
|
$
|
742,334
|
|
Due after one year through five years
|
3,057,341
|
|
|
3,202,556
|
|
||
Due after five years through ten years
|
2,646,432
|
|
|
2,864,395
|
|
||
Due after ten years
|
2,761,176
|
|
|
2,895,669
|
|
||
Mortgage-backed securities
|
1,557,569
|
|
|
1,625,956
|
|
||
Total
|
$
|
10,754,156
|
|
|
$
|
11,330,910
|
|
(4)
|
Investments in Equity Securities Available for Sale
|
(Dollars in thousands)
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||||
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Common stocks
|
$
|
209,210
|
|
|
$
|
113,660
|
|
|
$
|
(2,888
|
)
|
|
$
|
319,982
|
|
|
$
|
319,982
|
|
Preferred stocks
|
133,183
|
|
|
5,139
|
|
|
(14,865
|
)
|
|
123,457
|
|
|
123,457
|
|
|||||
Total
|
$
|
342,393
|
|
|
$
|
118,799
|
|
|
$
|
(17,753
|
)
|
|
$
|
443,439
|
|
|
$
|
443,439
|
|
December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Common stocks
|
$
|
188,949
|
|
|
$
|
128,096
|
|
|
$
|
(989
|
)
|
|
$
|
316,056
|
|
|
$
|
316,056
|
|
Preferred stocks
|
215,286
|
|
|
40,386
|
|
|
(10,675
|
)
|
|
244,997
|
|
|
244,997
|
|
|||||
Total
|
$
|
404,235
|
|
|
$
|
168,482
|
|
|
$
|
(11,664
|
)
|
|
$
|
561,053
|
|
|
$
|
561,053
|
|
(6)
|
Net Investment Income
|
(Dollars in thousands)
|
2011
|
|
2010
|
|
2009
|
||||||
Investment income earned on:
|
|
|
|
|
|
|
|
|
|||
Fixed maturity securities, including cash and cash equivalents and loans receivable
|
$
|
483,905
|
|
|
$
|
501,750
|
|
|
$
|
495,140
|
|
Equity securities available for sale
|
12,416
|
|
|
11,661
|
|
|
20,295
|
|
|||
Investment funds
|
9,452
|
|
|
(6,481
|
)
|
|
(163,862
|
)
|
|||
Arbitrage trading account
|
16,576
|
|
|
27,155
|
|
|
31,023
|
|
|||
Real estate
|
7,471
|
|
|
—
|
|
|
—
|
|
|||
Gross investment income
|
529,820
|
|
|
534,085
|
|
|
382,596
|
|
|||
Investment expense
|
(3,469
|
)
|
|
(3,560
|
)
|
|
(3,588
|
)
|
|||
Net investment income
|
$
|
526,351
|
|
|
$
|
530,525
|
|
|
$
|
379,008
|
|
|
Carrying Value
as of December 31,
|
|
Income (Losses)
from Investment Funds
|
||||||||||||||||
(Dollars in thousands)
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Real estate
|
$
|
373,413
|
|
|
$
|
226,183
|
|
|
$
|
14,527
|
|
|
$
|
(4,766
|
)
|
|
$
|
(159,569
|
)
|
Energy
|
98,974
|
|
|
96,511
|
|
|
(6,101
|
)
|
|
996
|
|
|
(13,227
|
)
|
|||||
Arbitrage
|
58,008
|
|
|
60,660
|
|
|
(1,366
|
)
|
|
1,692
|
|
|
9,691
|
|
|||||
Other
|
150,243
|
|
|
129,057
|
|
|
2,392
|
|
|
(4,403
|
)
|
|
(757
|
)
|
|||||
Total
|
$
|
680,638
|
|
|
$
|
512,411
|
|
|
$
|
9,452
|
|
|
$
|
(6,481
|
)
|
|
$
|
(163,862
|
)
|
(8)
|
Real Estate
|
As of December 31,
|
2011
|
|
2010
|
||||
Total loans receivable, at cost
|
$
|
263,187
|
|
|
$
|
353,583
|
|
|
|
|
|
||||
Valuation allowance:
|
|
|
|
||||
Specific
|
$
|
19,041
|
|
|
$
|
18,865
|
|
General
|
764
|
|
|
810
|
|
||
Total
|
$
|
19,805
|
|
|
$
|
19,675
|
|
|
|
|
|
||||
Impaired loans:
|
|
|
|
||||
With a specific valuation allowance, at cost
|
$
|
29,702
|
|
|
$
|
31,855
|
|
Without a valuation allowance, at cost
|
30,357
|
|
|
30,685
|
|
||
Unpaid principal balance
|
93,922
|
|
|
96,240
|
|
||
|
|
|
|
||||
For the Year Ended December 31,
|
2011
|
|
2010
|
||||
Increase in valuation allowance
|
$
|
130
|
|
|
$
|
6,090
|
|
Loans receivable charged off
|
759
|
|
|
140
|
|
(10)
|
Realized and Unrealized Investment Gains and Losses
|
(Dollars in thousands)
|
2011
|
|
2010
|
|
2009
|
||||||
Realized investment gains and losses:
|
|
|
|
|
|
|
|
|
|||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|||
Gains
|
$
|
37,595
|
|
|
$
|
38,204
|
|
|
$
|
50,500
|
|
Lossses
|
(5,499
|
)
|
|
(8,990
|
)
|
|
(3,632
|
)
|
|||
Equity securities available for sale
|
90,023
|
|
|
34,477
|
|
|
52,680
|
|
|||
Investment funds
|
3,762
|
|
|
1,871
|
|
|
4,905
|
|
|||
Provision for other-than-temporary impairments (1)
|
(400
|
)
|
|
(9,205
|
)
|
|
(151,727
|
)
|
|||
Less investment impairments recognized in other comprehensive income
|
—
|
|
|
—
|
|
|
8,866
|
|
|||
Other gains
|
—
|
|
|
224
|
|
|
—
|
|
|||
Total net investment gains (losses)
|
125,481
|
|
|
56,581
|
|
|
(38,408
|
)
|
|||
Income tax (expense) benefit
|
(43,834
|
)
|
|
(19,707
|
)
|
|
13,534
|
|
|||
|
$
|
81,647
|
|
|
$
|
36,874
|
|
|
$
|
(24,874
|
)
|
Change in unrealized gains and losses of available for sales securities:
|
|
|
|
|
|
|
|
|
|||
Fixed maturity securities
|
$
|
209,467
|
|
|
$
|
102,488
|
|
|
$
|
405,950
|
|
Investment impairments recognized in other comprehensive income
|
(3,604
|
)
|
|
1,362
|
|
|
(5,425
|
)
|
|||
Equity securities available for sale
|
(55,772
|
)
|
|
68,178
|
|
|
143,684
|
|
|||
Investment funds
|
(2,093
|
)
|
|
4,560
|
|
|
13,235
|
|
|||
Total change in unrealized gains
|
147,998
|
|
|
176,588
|
|
|
557,444
|
|
|||
Income tax expense
|
(52,381
|
)
|
|
(61,227
|
)
|
|
(195,813
|
)
|
|||
Noncontrolling interests
|
55
|
|
|
(8
|
)
|
|
(21
|
)
|
|||
|
$
|
95,672
|
|
|
$
|
115,353
|
|
|
$
|
361,610
|
|
(1)
|
Includes change in valuation allowance for loans receivable of
$0
,
$6,082,000
and
$12,418,000
for the years ended
December 31, 2011
,
2010
and
2009
, respectively.
|
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
(Dollars in thousands)
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. government and government agency
|
$
|
24,668
|
|
|
$
|
169
|
|
|
$
|
4,800
|
|
|
$
|
182
|
|
|
$
|
29,468
|
|
|
$
|
351
|
|
State and municipal
|
131,417
|
|
|
827
|
|
|
183,205
|
|
|
15,723
|
|
|
314,622
|
|
|
16,550
|
|
||||||
Mortgage-backed securities
|
172,729
|
|
|
2,439
|
|
|
94,243
|
|
|
14,473
|
|
|
266,972
|
|
|
16,912
|
|
||||||
Corporate
|
341,764
|
|
|
8,327
|
|
|
125,654
|
|
|
27,760
|
|
|
467,418
|
|
|
36,087
|
|
||||||
Foreign
|
197,560
|
|
|
4,078
|
|
|
7,159
|
|
|
571
|
|
|
204,719
|
|
|
4,649
|
|
||||||
Fixed maturity securities
|
868,138
|
|
|
15,840
|
|
|
415,061
|
|
|
58,709
|
|
|
1,283,199
|
|
|
74,549
|
|
||||||
Common stocks
|
47,098
|
|
|
2,888
|
|
|
—
|
|
|
—
|
|
|
47,098
|
|
|
2,888
|
|
||||||
Preferred stocks
|
23,782
|
|
|
125
|
|
|
45,314
|
|
|
14,740
|
|
|
69,096
|
|
|
14,865
|
|
||||||
Equity securities available for sale
|
70,880
|
|
|
3,013
|
|
|
45,314
|
|
|
14,740
|
|
|
116,194
|
|
|
17,753
|
|
||||||
Total
|
$
|
939,018
|
|
|
$
|
18,853
|
|
|
$
|
460,375
|
|
|
$
|
73,449
|
|
|
$
|
1,399,393
|
|
|
$
|
92,302
|
|
December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. government and government agency
|
$
|
60,228
|
|
|
$
|
420
|
|
|
$
|
6,973
|
|
|
$
|
32
|
|
|
$
|
67,201
|
|
|
$
|
452
|
|
State and municipal
|
951,119
|
|
|
26,577
|
|
|
156,617
|
|
|
18,840
|
|
|
1,107,736
|
|
|
45,417
|
|
||||||
Mortgage-backed securities
|
116,194
|
|
|
2,809
|
|
|
174,163
|
|
|
16,063
|
|
|
290,357
|
|
|
18,872
|
|
||||||
Corporate
|
342,929
|
|
|
6,581
|
|
|
155,259
|
|
|
22,798
|
|
|
498,188
|
|
|
29,379
|
|
||||||
Foreign
|
110,189
|
|
|
888
|
|
|
—
|
|
|
—
|
|
|
110,189
|
|
|
888
|
|
||||||
Fixed maturity securities
|
1,580,659
|
|
|
37,275
|
|
|
493,012
|
|
|
57,733
|
|
|
2,073,671
|
|
|
95,008
|
|
||||||
Common stocks
|
58,979
|
|
|
989
|
|
|
—
|
|
|
—
|
|
|
58,979
|
|
|
989
|
|
||||||
Preferred stocks
|
27,010
|
|
|
2,368
|
|
|
76,890
|
|
|
8,307
|
|
|
103,900
|
|
|
10,675
|
|
||||||
Equity securities available for sale
|
85,989
|
|
|
3,357
|
|
|
76,890
|
|
|
8,307
|
|
|
162,879
|
|
|
11,664
|
|
||||||
Total
|
$
|
1,666,648
|
|
|
$
|
40,632
|
|
|
$
|
569,902
|
|
|
$
|
66,040
|
|
|
$
|
2,236,550
|
|
|
$
|
106,672
|
|
(Dollars in thousands)
|
Number of
Securities
|
|
Aggregate
Fair Value
|
|
Gross
Unrealized
Loss
|
|||||
Unrealized loss less than $5 million:
|
|
|
|
|
|
|
|
|
||
Mortgage-backed securities
|
15
|
|
|
$
|
106,923
|
|
|
$
|
6,115
|
|
Corporate
|
13
|
|
|
48,106
|
|
|
3,461
|
|
||
State and municipal
|
5
|
|
|
42,197
|
|
|
4,553
|
|
||
Foreign
|
1
|
|
|
586
|
|
|
12
|
|
||
Unrealized loss $5 million or more:
|
|
|
|
|
|
|||||
Mortgage-backed security(1)
|
1
|
|
|
15,945
|
|
|
7,158
|
|
||
Total
|
35
|
|
|
$
|
213,757
|
|
|
$
|
21,299
|
|
(1)
|
This investment is a residential mortgage-backed security that was evaluated based on the performance of the underlying collateral under various economic and default scenarios. The security has met its contractual obligations and the
Company expects that it will continue to meet those contractual payment obligations as they become due. Based on this evaluation, the Company does not consider the investment to be OTTI.
|
|
For the Years Ended
December 31,
|
||||||
(Dollars in thousands)
|
2011
|
|
2010
|
||||
Beginning balance of amounts related to credit losses
|
$
|
4,261
|
|
|
$
|
5,661
|
|
Additions for amounts related to credit losses
|
—
|
|
|
—
|
|
||
Deductions for amounts related to credit loss sales
|
—
|
|
|
(1,400
|
)
|
||
Ending balance of amounts related to credit losses
|
$
|
4,261
|
|
|
$
|
4,261
|
|
(Dollars in thousands)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed maturity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. government and government agency
|
$
|
976,493
|
|
|
$
|
—
|
|
|
$
|
976,493
|
|
|
$
|
—
|
|
State and municipal
|
5,323,070
|
|
|
—
|
|
|
5,323,070
|
|
|
—
|
|
||||
Mortgage-backed securities
|
1,584,587
|
|
|
—
|
|
|
1,584,587
|
|
|
—
|
|
||||
Corporate
|
2,424,424
|
|
|
—
|
|
|
2,356,596
|
|
|
67,828
|
|
||||
Foreign
|
888,354
|
|
|
—
|
|
|
888,354
|
|
|
—
|
|
||||
Total fixed maturity securities available for sale
|
11,196,928
|
|
|
—
|
|
|
11,129,100
|
|
|
67,828
|
|
||||
Equity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stocks
|
319,982
|
|
|
318,423
|
|
|
—
|
|
|
1,559
|
|
||||
Preferred stocks
|
123,457
|
|
|
—
|
|
|
111,154
|
|
|
12,303
|
|
||||
Total equity securities available for sale
|
443,439
|
|
|
318,423
|
|
|
111,154
|
|
|
13,862
|
|
||||
Arbitrage trading account
|
397,312
|
|
|
208,516
|
|
|
187,945
|
|
|
851
|
|
||||
Total
|
$
|
12,037,679
|
|
|
$
|
526,939
|
|
|
$
|
11,428,199
|
|
|
$
|
82,541
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Securities sold but not yet purchased
|
$
|
62,514
|
|
|
$
|
62,493
|
|
|
$
|
—
|
|
|
$
|
21
|
|
December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed maturity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. government and government agency
|
$
|
1,347,875
|
|
|
$
|
—
|
|
|
$
|
1,347,875
|
|
|
$
|
—
|
|
State and municipal
|
5,461,446
|
|
|
—
|
|
|
5,461,446
|
|
|
—
|
|
||||
Mortgage-backed securities
|
1,411,846
|
|
|
—
|
|
|
1,411,846
|
|
|
—
|
|
||||
Corporate
|
2,119,922
|
|
|
—
|
|
|
2,031,859
|
|
|
88,063
|
|
||||
Foreign
|
752,070
|
|
|
—
|
|
|
752,070
|
|
|
—
|
|
||||
Total fixed maturity securities available for sale
|
11,093,159
|
|
|
—
|
|
|
11,005,096
|
|
|
88,063
|
|
||||
Equity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stocks
|
316,056
|
|
|
204,749
|
|
|
109,748
|
|
|
1,559
|
|
||||
Preferred stocks
|
244,997
|
|
|
—
|
|
|
155,551
|
|
|
89,446
|
|
||||
Total equity securities available for sale
|
561,053
|
|
|
204,749
|
|
|
265,299
|
|
|
91,005
|
|
||||
Arbitrage trading account
|
359,192
|
|
|
162,292
|
|
|
193,713
|
|
|
3,187
|
|
||||
Total
|
$
|
12,013,404
|
|
|
$
|
367,041
|
|
|
$
|
11,464,108
|
|
|
$
|
182,255
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Securities sold but not yet purchased
|
$
|
53,494
|
|
|
$
|
51,672
|
|
|
$
|
1,822
|
|
|
$
|
—
|
|
|
Gains (Losses) Included in:
|
|||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
Beginning Balance
|
|
Earnings
|
|
Other Comprehensive Income
|
|
Purchases
|
|
Sales
|
|
Paydowns/Maturities
|
|
In
|
|
Out
|
|
Ending Balance
|
|||||||||||||||||||
Year ended December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Fixed maturity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate
|
$
|
88,063
|
|
|
$
|
(454
|
)
|
|
$
|
(870
|
)
|
|
$
|
15,271
|
|
|
$
|
(11,864
|
)
|
|
$
|
(22,318
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
67,828
|
|
|
Total
|
88,063
|
|
|
(454
|
)
|
|
(870
|
)
|
|
15,271
|
|
|
(11,864
|
)
|
|
(22,318
|
)
|
|
—
|
|
|
—
|
|
|
67,828
|
|
||||||||||
Equity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Common stocks
|
1,559
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,559
|
|
||||||||||
Preferred stocks
|
89,446
|
|
|
28,947
|
|
|
(30,865
|
)
|
|
—
|
|
|
(75,225
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,303
|
|
||||||||||
Total
|
91,005
|
|
|
28,947
|
|
|
(30,865
|
)
|
|
—
|
|
|
(75,225
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,862
|
|
||||||||||
Arbitrage trading account
|
3,187
|
|
|
572
|
|
|
—
|
|
—
|
|
269
|
|
|
(3,266
|
)
|
|
—
|
|
|
89
|
|
|
—
|
|
|
851
|
|
|||||||||
Total
|
$
|
182,255
|
|
|
$
|
29,065
|
|
|
$
|
(31,735
|
)
|
|
$
|
15,540
|
|
|
$
|
(90,355
|
)
|
|
$
|
(22,318
|
)
|
|
$
|
89
|
|
|
$
|
—
|
|
|
$
|
82,541
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Securities sold but not yet purchased
|
—
|
|
|
$
|
40
|
|
|
—
|
|
|
$
|
67
|
|
|
$
|
(86
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
21
|
|
||||||
Year ended December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities
|
$
|
25,900
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(25,900
|
)
|
|
$
|
—
|
|
|
Corporate
|
90,160
|
|
|
(850
|
)
|
|
1,558
|
|
|
19,632
|
|
|
(5,324
|
)
|
|
(17,113
|
)
|
|
—
|
|
|
—
|
|
|
88,063
|
|
||||||||||
Total
|
116,060
|
|
|
(850
|
)
|
|
1,558
|
|
|
19,632
|
|
|
(5,324
|
)
|
|
(17,113
|
)
|
|
—
|
|
|
(25,900
|
)
|
|
88,063
|
|
||||||||||
Equity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Common stocks
|
1,559
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,559
|
|
||||||||||
Preferred stocks
|
54,713
|
|
|
23,535
|
|
|
31,633
|
|
|
19,542
|
|
|
(39,977
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89,446
|
|
||||||||||
Total
|
56,272
|
|
|
23,535
|
|
|
31,633
|
|
|
19,542
|
|
|
(39,977
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91,005
|
|
||||||||||
Arbitrage trading account
|
353
|
|
|
(353
|
)
|
|
—
|
|
|
3,187
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,187
|
|
||||||||||
Total
|
$
|
172,685
|
|
|
$
|
22,332
|
|
|
$
|
33,191
|
|
|
$
|
42,361
|
|
|
$
|
(45,301
|
)
|
|
$
|
(17,113
|
)
|
|
$
|
—
|
|
|
$
|
(25,900
|
)
|
|
$
|
182,255
|
|
(13)
|
Reserves for Losses and Loss Expenses
|
(Dollars in thousands)
|
2011
|
|
2010
|
|
2009
|
||||||
Net reserves at beginning of year
|
$
|
7,999,521
|
|
|
$
|
8,147,782
|
|
|
$
|
8,122,586
|
|
Net provision for losses and loss expenses:
|
|
|
|
|
|
|
|
|
|||
Claims occuring during the current year(1)
|
2,791,860
|
|
|
2,509,933
|
|
|
2,518,849
|
|
|||
Decrease in estimates for claims occurring in prior years(2)(3)
|
(181,282
|
)
|
|
(253,248
|
)
|
|
(234,008
|
)
|
|||
Loss reserve discount accretion
|
47,787
|
|
|
53,182
|
|
|
51,866
|
|
|||
Total
|
2,658,365
|
|
|
2,309,867
|
|
|
2,336,707
|
|
|||
Net payments for claims:
|
|
|
|
|
|
|
|
|
|||
Current year
|
765,440
|
|
|
641,570
|
|
|
582,605
|
|
|||
Prior year
|
1,721,558
|
|
|
1,811,507
|
|
|
1,751,026
|
|
|||
Total
|
2,486,998
|
|
|
2,453,077
|
|
|
2,333,631
|
|
|||
Foreign currency translation
|
1,224
|
|
|
(5,051
|
)
|
|
22,120
|
|
|||
Net reserves at end of year
|
8,172,112
|
|
|
7,999,521
|
|
|
8,147,782
|
|
|||
Ceded reserve at end of year
|
1,165,022
|
|
|
1,017,028
|
|
|
923,889
|
|
|||
Gross reserves at end of year
|
$
|
9,337,134
|
|
|
$
|
9,016,549
|
|
|
$
|
9,071,671
|
|
(1)
|
Claims occurring during the current year are net of loss reserve discounts of
$43,286,000
,
$67,763,000
and
$80,455,000
in
2011
,
2010
and
2009
, respectively.
|
(2)
|
The decrease in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in prior years decreased by
$182,937,000
,
$246,941,000
and
$232,040,000
in
2011
,
2010
and
2009
, respectively.
|
(3)
|
For certain retrospectively rated insurance polices and reinsurance agreements, reserve development is offset by additional or return premiums. Favorable reserve development, net of additional and return premiums, was
$182 million
,
$234 million
and
$190 million
in
2011
,
2010
and
2009
, respectively.
|
(14)
|
Reinsurance
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2011
|
|
2010
|
|
2009
|
||||||
Written premiums:
|
|
|
|
|
|
|
|
|
|||
Direct
|
$
|
4,370,092
|
|
|
$
|
3,788,251
|
|
|
$
|
3,599,836
|
|
Assumed
|
707,221
|
|
|
627,826
|
|
|
653,603
|
|
|||
Ceded
|
(719,945
|
)
|
|
(565,151
|
)
|
|
(523,344
|
)
|
|||
Total net written premiums
|
$
|
4,357,368
|
|
|
$
|
3,850,926
|
|
|
$
|
3,730,095
|
|
|
|
|
|
|
|
||||||
Earned premiums:
|
|
|
|
|
|
|
|
|
|||
Direct
|
$
|
4,164,277
|
|
|
$
|
3,744,150
|
|
|
$
|
3,690,493
|
|
Assumed
|
669,593
|
|
|
652,485
|
|
|
617,143
|
|
|||
Ceded
|
(673,003
|
)
|
|
(561,053
|
)
|
|
(501,787
|
)
|
|||
Total net earned premiums
|
$
|
4,160,867
|
|
|
$
|
3,835,582
|
|
|
$
|
3,805,849
|
|
|
|
|
|
|
|
||||||
Ceded losses incurred
|
$
|
458,249
|
|
|
$
|
379,153
|
|
|
$
|
252,299
|
|
Reinsurer
|
Amount
|
||
Munich Re
|
$
|
163,420
|
|
Swiss Re
|
72,690
|
|
|
Transatlantic Re
|
64,619
|
|
|
Partner Re
|
60,769
|
|
|
Berkshire Hathaway
|
56,042
|
|
|
Axis Capital
|
54,121
|
|
|
Lloyd’s of London
|
52,859
|
|
|
Ace Group
|
43,463
|
|
|
Hannover Re Group
|
33,262
|
|
|
Arch Capital Group
|
22,984
|
|
|
Other reinsurers less then $20,000
|
224,380
|
|
|
Subtotal
|
848,609
|
|
|
Residual market pools
|
367,070
|
|
|
Total
|
$
|
1,215,679
|
|
(15)
|
Senior Notes and Other Debt
|
(Dollars in thousands)
|
|
|
2011
|
|
2011
|
|
2010
|
||||||
Maturity
|
Rate
|
|
Face Value
|
|
Carrying Value
|
|
Carrying Value
|
||||||
Senior notes:
|
|
|
|
|
|
|
|
|
|
|
|||
February 15, 2013
|
5.875%
|
|
$
|
200,000
|
|
|
$
|
199,627
|
|
|
$
|
199,295
|
|
May 15, 2015
|
5.6%
|
|
200,000
|
|
|
199,373
|
|
|
199,187
|
|
|||
August 15, 2019
|
6.15%
|
|
150,000
|
|
|
148,914
|
|
|
148,772
|
|
|||
September 15, 2019
|
7.375%
|
|
300,000
|
|
|
298,038
|
|
|
297,784
|
|
|||
September 15, 2020
|
5.375%
|
|
300,000
|
|
|
297,065
|
|
|
296,729
|
|
|||
January 1, 2022
|
8.70%
|
|
76,503
|
|
|
75,924
|
|
|
75,890
|
|
|||
February 15, 2037
|
6.25%
|
|
250,000
|
|
|
247,236
|
|
|
247,126
|
|
|||
Subsidiary debt (1)
|
Various
|
|
34,326
|
|
|
34,326
|
|
|
35,636
|
|
|||
Total debt
|
|
|
$
|
1,510,829
|
|
|
$
|
1,500,503
|
|
|
$
|
1,500,419
|
|
(16)
|
Junior Subordinated Debentures
|
(17)
|
Income Taxes
|
(Dollars in thousands)
|
Current
Expense
|
|
Deferred
Expense
(Benefit)
|
|
Total
|
||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|||
Domestic
|
$
|
60,420
|
|
|
$
|
38,781
|
|
|
$
|
99,201
|
|
Foreign
|
22,011
|
|
|
2,338
|
|
|
24,349
|
|
|||
Total expense
|
$
|
82,431
|
|
|
$
|
41,119
|
|
|
$
|
123,550
|
|
December 31, 2010:
|
|
|
|
|
|
|
|
|
|||
Domestic
|
$
|
79,143
|
|
|
$
|
66,287
|
|
|
$
|
145,430
|
|
Foreign
|
10,584
|
|
|
(2,275
|
)
|
|
8,309
|
|
|||
Total expense
|
$
|
89,727
|
|
|
$
|
64,012
|
|
|
$
|
153,739
|
|
December 31, 2009:
|
|
|
|
|
|
|
|
|
|||
Domestic
|
$
|
116,777
|
|
|
$
|
(56,325
|
)
|
|
$
|
60,452
|
|
Foreign
|
9,140
|
|
|
3,558
|
|
|
12,698
|
|
|||
Total expense (benefit)
|
$
|
125,917
|
|
|
$
|
(52,767
|
)
|
|
$
|
73,150
|
|
(Dollars in thousands)
|
2011
|
|
2010
|
|
2009
|
||||||
Computed “expected” tax expense
|
$
|
181,399
|
|
|
$
|
211,157
|
|
|
$
|
133,781
|
|
Tax-exempt investment income
|
(57,246
|
)
|
|
(62,628
|
)
|
|
(64,886
|
)
|
|||
Change in valuation allowance
|
(2,328
|
)
|
|
102
|
|
|
(887
|
)
|
|||
Impact of lower foreign tax rates
|
(3,413
|
)
|
|
(253
|
)
|
|
(551
|
)
|
|||
State and local taxes
|
2,355
|
|
|
2,298
|
|
|
1,175
|
|
|||
Other, net
|
2,783
|
|
|
3,063
|
|
|
4,518
|
|
|||
Total expense
|
$
|
123,550
|
|
|
$
|
153,739
|
|
|
$
|
73,150
|
|
(Dollars in thousands)
|
2011
|
|
2010
|
||||
Deferred tax asset:
|
|
|
|
|
|
||
Loss reserve discounting
|
$
|
119,725
|
|
|
$
|
152,189
|
|
Unearned premiums
|
118,837
|
|
|
106,162
|
|
||
Other-than-temporary impairments
|
68,559
|
|
|
69,057
|
|
||
Restricted stock units
|
43,207
|
|
|
39,514
|
|
||
Other
|
82,734
|
|
|
26,813
|
|
||
Gross deferred tax asset
|
433,062
|
|
|
393,735
|
|
||
Less valuation allowance
|
—
|
|
|
(2,328
|
)
|
||
Deferred tax asset
|
433,062
|
|
|
391,407
|
|
||
Deferred tax liability:
|
|
|
|
|
|
||
Amortization of intangibles
|
12,186
|
|
|
11,780
|
|
||
Deferred policy acquisition costs
|
136,349
|
|
|
124,141
|
|
||
Unrealized investment gains
|
223,024
|
|
|
169,106
|
|
||
Other
|
93,126
|
|
|
20,888
|
|
||
Deferred tax liability
|
464,685
|
|
|
325,915
|
|
||
Net deferred tax asset (liability)
|
$
|
(31,623
|
)
|
|
$
|
65,492
|
|
(18)
|
Dividends from Subsidiaries and Statutory Financial Information (Unaudited)
|
(Dollars in thousands)
|
2011
|
|
2010
|
|
2009
|
||||||
Net income
|
$
|
417,441
|
|
|
$
|
574,181
|
|
|
$
|
407,449
|
|
Policyholders’ surplus
|
$
|
4,107,745
|
|
|
$
|
4,154,654
|
|
|
$
|
3,859,086
|
|
(19)
|
Common Stockholders’ Equity
|
(Amounts in thousands)
|
2011
|
|
2010
|
|
2009
|
|||
Basic
|
139,688
|
|
|
148,752
|
|
|
160,357
|
|
Diluted
|
145,672
|
|
|
155,081
|
|
|
166,574
|
|
(Amounts in thousands)
|
2011
|
|
2010
|
|
2009
|
|||
Balance, beginning of year
|
141,010
|
|
|
156,552
|
|
|
161,467
|
|
Shares issued
|
2,702
|
|
|
2,272
|
|
|
1,467
|
|
Shares repurchased
|
(6,192
|
)
|
|
(17,814
|
)
|
|
(6,382
|
)
|
Balance, end of year
|
137,520
|
|
|
141,010
|
|
|
156,552
|
|
(20)
|
Fair Value of Financial Instruments
|
|
2011
|
|
2010
|
||||||||||||
(Dollars in thousands)
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed maturity securities
|
$
|
11,312,037
|
|
|
$
|
11,330,910
|
|
|
$
|
11,209,154
|
|
|
$
|
11,215,317
|
|
Equity securities available for sale
|
443,439
|
|
|
443,439
|
|
|
561,053
|
|
|
561,053
|
|
||||
Arbitrage trading account
|
397,312
|
|
|
397,312
|
|
|
359,192
|
|
|
359,192
|
|
||||
Loans receivable
|
263,187
|
|
|
245,169
|
|
|
353,583
|
|
|
312,515
|
|
||||
Cash and cash equivalents
|
911,742
|
|
|
911,742
|
|
|
642,952
|
|
|
642,952
|
|
||||
Trading accounts receivable from brokers and clearing organizations
|
318,240
|
|
|
318,240
|
|
|
339,235
|
|
|
339,235
|
|
||||
Due from broker
|
10,875
|
|
|
10,875
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Trading account securities sold but not yet purchased
|
62,514
|
|
|
62,514
|
|
|
53,494
|
|
|
53,494
|
|
||||
Junior subordinated debentures
|
242,997
|
|
|
258,400
|
|
|
242,784
|
|
|
249,900
|
|
||||
Senior notes and other debt
|
1,500,503
|
|
|
1,587,473
|
|
|
1,500,419
|
|
|
1,570,057
|
|
|
2011
|
|
2010
|
|
2009
|
|||||||||||||||
|
Shares
|
|
Price(1)
|
|
Shares
|
|
Price(1)
|
|
Shares
|
|
Price(1)
|
|||||||||
Outstanding at beginning of year
|
3,503,384
|
|
|
$
|
10.42
|
|
|
5,700,552
|
|
|
$
|
9.53
|
|
|
6,566,377
|
|
|
$
|
9.06
|
|
Exercised
|
2,185,952
|
|
|
10.05
|
|
|
2,191,260
|
|
|
8.11
|
|
|
860,074
|
|
|
5.93
|
|
|||
Cancelled
|
3,375
|
|
|
10.07
|
|
|
5,908
|
|
|
10.07
|
|
|
5,751
|
|
|
10.85
|
|
|||
Outstanding at year end
|
1,314,057
|
|
|
$
|
11.04
|
|
|
3,503,384
|
|
|
$
|
10.42
|
|
|
5,700,552
|
|
|
$
|
9.53
|
|
(1)
|
Weighted average exercise price.
|
|
Options Outstanding and Exercisable
|
||||||||
Range of
Exercise
Prices
|
Number Outstanding
|
|
Weighted Remaining Contractual Life (in years)
|
|
Weighted Average Price
|
||||
$0 to $10.00
|
412,078
|
|
|
0.60
|
|
|
$
|
10.07
|
|
$10.01 to $17.62
|
901,979
|
|
|
0.32
|
|
|
11.48
|
|
|
Total
|
1,314,057
|
|
|
0.41
|
|
|
$
|
11.04
|
|
(Dollars in thousands)
|
2011
|
|
2010
|
|
2009
|
|||
RSUs granted and unvested at beginning of period:
|
4,945,375
|
|
|
3,713,025
|
|
|
4,971,231
|
|
Granted
|
107,500
|
|
|
2,310,650
|
|
|
119,500
|
|
Vested
|
(576,050
|
)
|
|
(916,750
|
)
|
|
(1,287,943
|
)
|
Cancelled
|
(105,850
|
)
|
|
(161,550
|
)
|
|
(89,763
|
)
|
RSUs granted and unvested at end of period:
|
4,370,975
|
|
|
4,945,375
|
|
|
3,713,025
|
|
(Dollars in thousands)
|
2011
|
|
2010
|
|
2009
|
||||||
Unearned compensation at beginning of year
|
$
|
76,139
|
|
|
$
|
46,801
|
|
|
$
|
68,503
|
|
RSUs granted, net of cancellations
|
2,832
|
|
|
58,462
|
|
|
2,783
|
|
|||
RSUs expensed
|
(27,566
|
)
|
|
(27,035
|
)
|
|
(24,988
|
)
|
|||
RSUs forfeiture adjustment
|
5,910
|
|
|
(2,089
|
)
|
|
503
|
|
|||
Unearned compensation at end of year
|
$
|
57,315
|
|
|
$
|
76,139
|
|
|
$
|
46,801
|
|
(24)
|
Compensation Plans
|
(Dollars in thousands)
|
2011
|
|
2010
|
|
2009
|
||||||
2006 grant
|
$
|
—
|
|
|
$
|
5,119
|
|
|
$
|
3,816
|
|
2008 grant
|
4,597
|
|
|
5,070
|
|
|
3,747
|
|
|||
2011 grant
|
5,644
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
10,241
|
|
|
$
|
10,189
|
|
|
$
|
7,563
|
|
(Dollars in thousands)
|
2011
|
|
2010
|
||||
Projected benefit obligation:
|
|
|
|
|
|
||
Beginning of year
|
$
|
51,828
|
|
|
$
|
45,889
|
|
Interest cost
|
2,716
|
|
|
2,675
|
|
||
Actuarial loss
|
2,243
|
|
|
3,264
|
|
||
End of year
|
$
|
56,787
|
|
|
$
|
51,828
|
|
(Dollars in thousands)
|
2011
|
|
2010
|
||||
Net actuarial loss
|
$
|
10,007
|
|
|
$
|
9,093
|
|
Prior service cost
|
12,035
|
|
|
15,059
|
|
||
Net pension asset
|
$
|
22,042
|
|
|
$
|
24,152
|
|
(Dollars in thousands)
|
2011
|
|
2010
|
||||
Changes in plan assets and projected benefit obligation:
|
|
|
|
|
|
||
Net actuarial loss
|
$
|
2,243
|
|
|
$
|
3,264
|
|
Amortization of:
|
|
|
|
|
|
||
Net actuarial loss
|
(1,330
|
)
|
|
(424
|
)
|
||
Prior service costs
|
(3,023
|
)
|
|
(3,023
|
)
|
||
Total recognized in other comprehensive income (loss)
|
$
|
(2,110
|
)
|
|
$
|
(183
|
)
|
(Dollars in thousands)
|
2011
|
|
2010
|
|
2009
|
||||||
Amortization of deferred policy acquisition costs
|
$
|
1,034,400
|
|
|
$
|
917,217
|
|
|
$
|
903,154
|
|
Other underwriting expenses
|
398,532
|
|
|
397,266
|
|
|
345,309
|
|
|||
Service company expenses
|
75,231
|
|
|
72,372
|
|
|
78,331
|
|
|||
Net foreign currency (gains) losses
|
(1,884
|
)
|
|
2,126
|
|
|
4,213
|
|
|||
Other costs and expenses
|
115,050
|
|
|
107,381
|
|
|
109,831
|
|
|||
Total
|
$
|
1,621,329
|
|
|
$
|
1,496,362
|
|
|
$
|
1,440,838
|
|
(27)
|
Industry Segments
|
|
Revenues
|
|
|
|
|
||||||||||||||||||
(Dollars in thousands)
|
Earned
Premiums
|
|
Investment
Income
|
|
Other
|
|
Total
|
|
Pre-Tax
Income
(Loss)
|
|
Net
Income
(Loss)
|
||||||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Specialty
|
$
|
1,442,748
|
|
|
$
|
175,289
|
|
|
$
|
2,704
|
|
|
$
|
1,620,741
|
|
|
$
|
292,759
|
|
|
$
|
211,871
|
|
Regional
|
1,065,975
|
|
|
75,404
|
|
|
4,112
|
|
|
1,145,491
|
|
|
32,382
|
|
|
30,331
|
|
||||||
Alternative markets
|
612,558
|
|
|
121,360
|
|
|
86,031
|
|
|
819,949
|
|
|
146,030
|
|
|
109,859
|
|
||||||
Reinsurance
|
426,008
|
|
|
91,871
|
|
|
—
|
|
|
517,879
|
|
|
83,251
|
|
|
65,422
|
|
||||||
International
|
613,578
|
|
|
42,882
|
|
|
—
|
|
|
656,460
|
|
|
40,084
|
|
|
26,055
|
|
||||||
Corporate, other and eliminations(1)
|
—
|
|
|
19,545
|
|
|
250,438
|
|
|
269,983
|
|
|
(201,704
|
)
|
|
(130,382
|
)
|
||||||
Net investment gains
|
—
|
|
|
—
|
|
|
125,481
|
|
|
125,481
|
|
|
125,481
|
|
|
81,647
|
|
||||||
Consolidated
|
$
|
4,160,867
|
|
|
$
|
526,351
|
|
|
$
|
468,766
|
|
|
$
|
5,155,984
|
|
|
$
|
518,283
|
|
|
$
|
394,803
|
|
December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Specialty
|
$
|
1,288,373
|
|
|
$
|
180,063
|
|
|
$
|
3,130
|
|
|
$
|
1,471,566
|
|
|
$
|
296,645
|
|
|
$
|
214,769
|
|
Regional
|
1,066,922
|
|
|
82,411
|
|
|
3,114
|
|
|
1,152,447
|
|
|
117,353
|
|
|
86,325
|
|
||||||
Alternative markets
|
608,191
|
|
|
123,309
|
|
|
79,173
|
|
|
810,673
|
|
|
178,607
|
|
|
131,126
|
|
||||||
Reinsurance
|
419,356
|
|
|
103,079
|
|
|
—
|
|
|
522,435
|
|
|
129,922
|
|
|
97,015
|
|
||||||
International
|
452,740
|
|
|
32,794
|
|
|
—
|
|
|
485,534
|
|
|
21,174
|
|
|
14,838
|
|
||||||
Corporate, other and eliminations(1)
|
—
|
|
|
8,869
|
|
|
215,964
|
|
|
224,833
|
|
|
(196,977
|
)
|
|
(131,660
|
)
|
||||||
Net investment gains
|
—
|
|
|
—
|
|
|
56,581
|
|
|
56,581
|
|
|
56,581
|
|
|
36,874
|
|
||||||
Consolidated
|
$
|
3,835,582
|
|
|
$
|
530,525
|
|
|
$
|
357,962
|
|
|
$
|
4,724,069
|
|
|
$
|
603,305
|
|
|
$
|
449,287
|
|
December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Specialty
|
$
|
1,354,355
|
|
|
$
|
125,351
|
|
|
$
|
3,560
|
|
|
$
|
1,483,266
|
|
|
$
|
220,906
|
|
|
$
|
167,732
|
|
Regional
|
1,116,871
|
|
|
57,530
|
|
|
2,725
|
|
|
1,177,126
|
|
|
106,078
|
|
|
80,031
|
|
||||||
Alternative markets
|
597,932
|
|
|
83,719
|
|
|
87,032
|
|
|
768,683
|
|
|
162,875
|
|
|
121,993
|
|
||||||
Reinsurance
|
411,511
|
|
|
75,505
|
|
|
—
|
|
|
487,016
|
|
|
86,358
|
|
|
70,675
|
|
||||||
International
|
325,180
|
|
|
26,767
|
|
|
—
|
|
|
351,947
|
|
|
22,719
|
|
|
14,676
|
|
||||||
Corporate, other and eliminations(1)
|
—
|
|
|
10,136
|
|
|
191,412
|
|
|
201,548
|
|
|
(178,298
|
)
|
|
(121,176
|
)
|
||||||
Net investment losses
|
—
|
|
|
—
|
|
|
(38,408
|
)
|
|
(38,408
|
)
|
|
(38,408
|
)
|
|
(24,874
|
)
|
||||||
Consolidated
|
$
|
3,805,849
|
|
|
$
|
379,008
|
|
|
$
|
246,321
|
|
|
$
|
4,431,178
|
|
|
$
|
382,230
|
|
|
$
|
309,057
|
|
December 31,
|
2011
|
|
2010
|
||||
Specialty
|
$
|
6,180,996
|
|
|
$
|
5,854,256
|
|
Regional
|
2,534,875
|
|
|
2,616,238
|
|
||
Alternative markets
|
4,050,949
|
|
|
3,801,597
|
|
||
Reinsurance
|
2,734,277
|
|
|
2,972,988
|
|
||
International
|
1,576,707
|
|
|
1,391,604
|
|
||
Corporate, other and eliminations(1)
|
1,409,927
|
|
|
891,864
|
|
||
Consolidated
|
$
|
18,487,731
|
|
|
$
|
17,528,547
|
|
(1)
|
Corporate, other and eliminations represent corporate revenues and expenses, net investment gains and losses and other items that are not allocated to business segments.
|
(Dollars in thousands)
|
2011
|
|
2010
|
|
2009
|
||||||
Specialty
|
|
|
|
|
|
|
|
|
|||
Other liability
|
$
|
454,582
|
|
|
$
|
384,799
|
|
|
$
|
449,120
|
|
Property
|
237,762
|
|
|
212,164
|
|
|
199,746
|
|
|||
Professional liability
|
229,281
|
|
|
200,219
|
|
|
173,201
|
|
|||
Commercial automobile
|
141,800
|
|
|
129,505
|
|
|
189,501
|
|
|||
Products liability
|
96,794
|
|
|
112,072
|
|
|
131,713
|
|
|||
Other
|
282,529
|
|
|
249,614
|
|
|
211,074
|
|
|||
Total specialty
|
1,442,748
|
|
|
1,288,373
|
|
|
1,354,355
|
|
|||
Regional
|
|
|
|
|
|
||||||
Commercial multi peril
|
394,168
|
|
|
389,997
|
|
|
405,552
|
|
|||
Commercial automobile
|
289,098
|
|
|
301,290
|
|
|
322,445
|
|
|||
Workers’ compensation
|
219,639
|
|
|
214,857
|
|
|
229,066
|
|
|||
Other
|
163,070
|
|
|
160,778
|
|
|
159,808
|
|
|||
Total regional
|
1,065,975
|
|
|
1,066,922
|
|
|
1,116,871
|
|
|||
Alternative Markets
|
|
|
|
|
|
||||||
Primary workers’ compensation
|
271,173
|
|
|
260,508
|
|
|
242,259
|
|
|||
Excess workers’ compensation
|
164,173
|
|
|
216,647
|
|
|
252,196
|
|
|||
Accident and health
|
105,128
|
|
|
57,915
|
|
|
36,414
|
|
|||
Other liability
|
28,960
|
|
|
24,726
|
|
|
23,412
|
|
|||
Other
|
43,124
|
|
|
48,395
|
|
|
43,651
|
|
|||
Total alternative markets
|
612,558
|
|
|
608,191
|
|
|
597,932
|
|
|||
Reinsurance
|
|
|
|
|
|
||||||
Casualty
|
307,051
|
|
|
307,474
|
|
|
323,479
|
|
|||
Property
|
118,957
|
|
|
111,882
|
|
|
88,032
|
|
|||
Total reinsurance
|
426,008
|
|
|
419,356
|
|
|
411,511
|
|
|||
International
|
|
|
|
|
|
||||||
Professional liability
|
90,871
|
|
|
88,997
|
|
|
84,101
|
|
|||
Property
|
151,177
|
|
|
80,105
|
|
|
26,119
|
|
|||
Reinsurance
|
104,851
|
|
|
74,047
|
|
|
56,454
|
|
|||
Automobile
|
72,723
|
|
|
69,875
|
|
|
64,969
|
|
|||
Workers’ compensation
|
73,823
|
|
|
57,802
|
|
|
46,698
|
|
|||
Other liability
|
52,189
|
|
|
38,344
|
|
|
25,736
|
|
|||
Other
|
67,944
|
|
|
43,570
|
|
|
21,103
|
|
|||
Total international
|
613,578
|
|
|
452,740
|
|
|
325,180
|
|
|||
Total
|
$
|
4,160,867
|
|
|
$
|
3,835,582
|
|
|
$
|
3,805,849
|
|
(28)
|
Quarterly Financial Information (Unaudited)
|
|
2011
|
||||||||||||||
Three Months Ended
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Revenues
|
$
|
1,234,351
|
|
|
$
|
1,270,949
|
|
|
$
|
1,279,731
|
|
|
$
|
1,370,953
|
|
Net income
|
116,487
|
|
|
83,082
|
|
|
77,308
|
|
|
117,926
|
|
||||
Net income per share(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
0.83
|
|
|
0.59
|
|
|
0.56
|
|
|
0.86
|
|
||||
Diluted
|
0.79
|
|
|
0.56
|
|
|
0.53
|
|
|
0.82
|
|
|
2010
|
||||||||||||||
Three Months Ended
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Revenues
|
$
|
1,153,547
|
|
|
$
|
1,163,068
|
|
|
$
|
1,176,112
|
|
|
$
|
1,231,342
|
|
Net income
|
118,610
|
|
|
110,207
|
|
|
93,619
|
|
|
126,851
|
|
||||
Net income per share(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
0.77
|
|
|
0.73
|
|
|
0.64
|
|
|
0.88
|
|
||||
Diluted
|
0.74
|
|
|
0.70
|
|
|
0.61
|
|
|
0.85
|
|
(1)
|
Net income per share (“EPS”) in each quarter is computed using the weighted-average number of shares outstanding during that quarter, while EPS for the full year is computed using the weighted-average number of shares outstanding during the year. Thus, the sum of the four quarters EPS does not necessarily equal the full-year EPS.
|
|
Index to Financial Statement Schedules
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
(b)
|
Exhibits
|
|
By
|
/s/ William R. Berkley
|
|
|
William R. Berkley, Chairman of the Board and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ William R. Berkley
|
|
Chairman of the Board and
|
|
|
William R. Berkley
|
|
Chief Executive Officer
|
|
February 28, 2012
|
Principal executive officer
|
|
|
|
|
|
|
|
|
|
/s/ W. Robert Berkley, Jr.
|
|
President, Chief Operating Officer
|
|
|
W. Robert Berkley, Jr.
|
|
and Director
|
|
February 28, 2012
|
|
|
|
|
|
/s/ Ronald E. Blaylock
|
|
Director
|
|
|
Ronald E. Blaylock
|
|
|
|
February 28, 2012
|
|
|
|
|
|
/s/ Mark E. Brockbank
|
|
Director
|
|
|
Mark E. Brockbank
|
|
|
|
February 28, 2012
|
|
|
|
|
|
/s/ George G. Daly
|
|
Director
|
|
|
George G. Daly
|
|
|
|
February 28, 2012
|
|
|
|
|
|
/s/ Mary C. Farrell
|
|
Director
|
|
|
Mary C. Farrell
|
|
|
|
February 28, 2012
|
|
|
|
|
|
/s/ Rodney A. Hawes, Jr.
|
|
Director
|
|
|
Rodney
A. Hawes, Jr.
|
|
|
|
February 28, 2012
|
|
|
|
|
|
/s/ Jack H. Nusbaum
|
|
Director
|
|
|
Jack H. Nusbaum
|
|
|
|
February 28, 2012
|
|
|
|
|
|
/s/ Mark L. Shapiro
|
|
Director
|
|
|
Mark L. Shapiro
|
|
|
|
February 28, 2012
|
|
|
|
|
|
/s/ Eugene G. Ballard
|
|
Senior Vice President and
|
|
|
Eugene G. Ballard
|
|
Chief Financial Officer
|
|
February 28, 2012
|
|
|
(Principal financial officer
and principal accounting officer)
|
|
|
Number
|
|
|
|
(3.1)
|
The Company’s Restated Certificate of Incorporation, as amended through May 10, 2004 (incorporated by reference to Exhibits 3.1 and 3.2 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 6, 2003).
|
|
|
(3.2)
|
Amendment, dated May 11, 2004, to the Company’s Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.2 of the Company’s Quarterly report on Form 10-Q (File No. 1-15202) filed with the Commission on August 5, 2004).
|
|
|
(3.3)
|
Amendment, dated May 16, 2006, to the Company’s Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on May 17, 2006).
|
|
|
(3.4)
|
Amended and Restated By-Laws (incorporated by reference to Exhibit 3 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 5, 2011).
|
|
|
(4.1)
|
Indenture, dated as of February 14, 2003, between the Company and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 10-K (File No. 1-15202) filed with the Commission of March 31, 2003).
|
|
|
(4.2)
|
First Supplemental Indenture, dated February 14, 2003, between the Company and The Bank of New York, a trustees, relating to $200,000,000 principal amount of the Company’s 5.875% Senior Notes due 2013, including form of the Notes as Exhibit A (incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form (File No. 1-15202) filed with the Commission of March 31, 2003).
|
|
|
(4.3)
|
Third Supplemental Indenture, dated as of August 24, 2004, between the Company and The Bank of New York, as Trustee, relating to $150,000,000 principal amount of the Company’s 6.150% Senior Notes due 2019, including form of the Notes as Exhibit A (incorporated by reference to Exhibit 4.4 of the Company’s Annual Report on Form 10-K (File No. 1-15202) filed with the Commission on March 14, 2005).
|
|
|
(4.4)
|
Fourth Supplemental Indenture, dated as of May 9, 2005, between the Company and The Bank of New York, as Trustee, relating to $200,000,000 principal amount of the Company’s 5.60% Senior Notes due 2015, including form of the Notes as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company’s Qarterly rRport on Form 10-Q (File No. 1-15200) filed with the Commission on August 2, 2005).
|
|
|
(4.5)
|
Fifth Supplemental Indenture, dated as of February 9, 2007, between the Company and The Bank of New York, as Trustee, relating to $250,000,000 principal amount of the Company’s 6.25% Senior Notes due 2037, including form of the Notes as Exhibit A (incorporated by reference to Exhibit 4.7 of the Company’s Annual Report on Form 10-K (File No. 1-15202) filed with the Commission on March 1, 2007).
|
|
|
(4.6)
|
Sixth Supplemental Indenture, dated as of September 14, 2009, between the Company and The Bank of New York Mellon, as Trustee, relating to $300,000,000 principal amount of the Company’s 7.375% Senior Notes due 2019, including form of the Notes as Exhibit A (incorporated by reference to Exhibit 4.7 of the Company’s Annual Report on Form 10-K (File No. 1-15202) filed with the Commission on February 26, 2010).
|
|
|
(4.7)
|
Seventh Supplemental Indenture, dated as of September 16, 2010, between the Company and The Bank of New York Mellon, as Trustee, relating to $300,000,000 principal amount of the Company’s 5.375% Senior Notes due 2020, including form of the Notes as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on September 16, 2010).
|
|
|
(4.8)
|
Amended and Restated Trust Agreement of W. R. Berkley Capital Trust dated as of July 26, 2003 (Incorporated by reference to Exhibit 4.3 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 2, 2005).
|
|
|
(4.9)
|
Subordinated Indenture between W. R. Berkley Corporation and The Bank of New York, as Trustee, dated as of July 26, 2005 (incorporated by reference to Exhibit 4.4 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 2, 2005).
|
|
|
(4.10)
|
Supplemental Indenture No. 1 to the Subordinated Indenture between W. R. Berkley Corporation and The Bank of New York, as Trustee, dated as of July 26, 2005, relating to 6.750% Subordinated Debentures Due 2045 (incorporated by reference to Exhibit 4.6 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 2, 2005).
|
|
|
(4.11)
|
Preferred Securities Guarantee Agreement between W. R. Berkley Corporation, as Guarantor, and The Bank of New York, as Preferred Guarantee Trustee, dated as of July 26, 2005, relating to W. R. Berkley Capital Trust II (incorporated by reference to Exhibit 4.6 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 2, 2005).
|
|
|
(4.12)
|
The instruments defining the rights of holders of the other long term debt securities of the Company are omitted pursuant to Section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The Company agrees to furnish supplementally copies of these instruments to the Commission upon request.
|
|
|
(10.1)
|
W. R. Berkley Corporation 2003 Stock Incentive Plan (incorporated by reference to Annex A of the Company’s 2003 Proxy Statement (File No. 1-15202) filed with the Commission on April 14, 2003).
|
|
|
(10.2)
|
Form of Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2003 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on May 3, 2005).
|
|
|
(10.3)
|
Form of Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2003 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 6, 2010).
|
|
|
(10.4)
|
Form of Restricted Stock Unit Agreement for grant of April 4, 2003 (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 6, 2003).
|
|
|
(10.5)
|
W. R. Berkley Corporation Deferred Compensation Plan for Officers as amended and restated effective December 3, 2007 (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on December 19, 2007).
|
|
|
(10.6)
|
W. R. Berkley Corporation Deferred Compensation Plan for Directors as amended and restated effective December 3, 2007 (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on December 19, 2007).
|
|
|
(10.7)
|
W. R. Berkley Corporation 2007 Annual Incentive Compensation Plan (incorporated by reference to Annex A of the Company’s 2006 Proxy Statement (File No. 1-15202) filed with the Commission on April 18, 2006).
|
|
|
(10.8)
|
W. R. Berkley Corporation 2004 Long-Term Incentive Plan (incorporated by reference to Annex B from the Company’s 2004 Proxy Statement (File No. 1-15202) filed with the Commission on April 12, 2004).
|
|
|
(10.9)
|
W. R. Berkley Corporation 2009 Long-Term Incentive Plan (incorporated by reference to Annex A of the Company’s 2009 Proxy Statement (File No. 1-15202) filed with the Commission on April 17, 2009).
|
|
|
(10.10)
|
Form of Performance Unit Award Agreement under the W. R. Berkley Corporation 2004 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on May 3, 2005).
|
|
|
(10.11)
|
Form of 2008 Performance Unit Award Agreement under the W. R. Berkley Corporation 2004 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on March 13, 2008).
|
|
|
(10.12)
|
Form of 2011 Performance Unit Award Agreement under the W. R. Berkley Corporation 2009 Long-Term Incentive Plan.
|
|
|
(10.13)
|
W. R. Berkley Corporation 2009 Directors Stock Plan (incorporated by reference to Annex B of the Company’s 2009 Proxy Statement (File No. 1-15202) filed with the Commission on April 17, 2009).
|
|
|
(10.14)
|
Supplemental Benefits Agreement between William R. Berkley and the Company as amended and restated as of December 21, 2011.
|
|
|
(14)
|
Code of Ethics for Senior Financial Officers (incorporated by reference to Exhibit 14 of the Company’s Annual Report on Form 10-K (File No. 1-15202) filed with the Commission on March 14, 2005).
|
(21)
|
Following is a list of the Company’s significant subsidiaries and other operating entities. Subsidiaries of subsidiaries are indented and the parent of each such corporation owns 100% of the outstanding voting securities of such corporation except as noted below.
|
|
Jurisdiction of Incorporation
|
Percentage owned by the Company (1)
|
|
Berkley International, LLC (2)
|
New York
|
100
|
%
|
Berkley Surety Group, Inc.
|
Delaware
|
100
|
%
|
J/I Holding Corporation:
|
Delaware
|
100
|
%
|
Admiral Insurance Company
|
Delaware
|
100
|
%
|
Admiral Indemnity Company
|
Delaware
|
100
|
%
|
Berkley London Holdings, Inc. (3)
|
Delaware
|
100
|
%
|
W. R. Berkley Insurance (Europe), Limited
|
United Kingdom
|
100
|
%
|
Carolina Casualty Insurance Company
|
Iowa
|
100
|
%
|
Berkley Assurance Company
|
Iowa
|
100
|
%
|
Clermont Insurance Company
|
Iowa
|
100
|
%
|
Nautilus Insurance Company
|
Arizona
|
100
|
%
|
Great Divide Insurance Company
|
North Dakota
|
100
|
%
|
Signet Star Holdings, Inc.
|
Delaware
|
100
|
%
|
Berkley Insurance Company
|
Delaware
|
100
|
%
|
Berkley Regional Insurance Company
|
Delaware
|
100
|
%
|
Acadia Insurance Company
|
New Hampshire
|
100
|
%
|
Berkley National Insurance Company
|
Iowa
|
100
|
%
|
Berkley Regional Specialty Insurance Company
|
Delaware
|
100
|
%
|
American Mining Insurance Company, Inc.
|
Alabama
|
100
|
%
|
Continental Western Insurance Company
|
Iowa
|
100
|
%
|
Firemen’s Insurance Company of Washington, D.C.
|
Delaware
|
100
|
%
|
Tri-State Insurance Company of Minnesota
|
Minnesota
|
100
|
%
|
Union Insurance Company
|
Iowa
|
100
|
%
|
Key Risk Insurance Company
|
North Carolina
|
100
|
%
|
Midwest Employers Casualty Company
|
Delaware
|
100
|
%
|
Preferred Employers Insurance Company
|
California
|
100
|
%
|
Gemini Insurance Company
|
Delaware
|
100
|
%
|
Riverport Insurance Company
|
Minnesota
|
100
|
%
|
StarNet Insurance Company
|
Delaware
|
100
|
%
|
(1)
|
W. R. Berkley Corporation is the ultimate parent. The subsidiary of a direct parent is indicated by an indentation, and its percentage ownership is as indicated in this column.
|
(2)
|
Berkley International, LLC is held by W. R. Berkley Corporation and its subsidiaries as follows: W. R. Berkley Corporation (2%), Admiral Insurance Company (35%), Berkley Regional Insurance Company (14%), Nautilus Insurance Company (14%) and Berkley Insurance Company (35%).
|
(3)
|
Berkley London Holdings, Inc. is held by Admiral Insurance Company (66.7%) and Berkley Insurance Company (33.3%).
|
(23)
|
|
Consent of Independent Registered Public Accounting Firm
|
|
|
|
(31.1)
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/ 15d-14(a).
|
|
|
|
(31.2)
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/ 15d-14(a).
|
|
|
|
(32.1)
|
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
270,637
|
|
|
$
|
29,476
|
|
Fixed maturity securities available for sale at fair value (cost $244,921 and $244,804 at December 31, 2011 and 2010, respectively)
|
247,537
|
|
|
246,275
|
|
||
Equity securities available for sale, at fair value (cost $0 in 2011 and 2010)
|
81,811
|
|
|
109,748
|
|
||
Investment in subsidiaries
|
5,389,531
|
|
|
5,261,686
|
|
||
Deferred Federal income taxes
|
—
|
|
|
80,861
|
|
||
Current Federal income taxes
|
15,137
|
|
|
19,163
|
|
||
Property, furniture and equipment at cost, less accumulated depreciation
|
6,595
|
|
|
6,431
|
|
||
Other assets
|
6,951
|
|
|
7,969
|
|
||
Total assets
|
$
|
6,018,199
|
|
|
$
|
5,761,609
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
|
||
Due to subsidiaries
|
$
|
141,492
|
|
|
$
|
189,499
|
|
Other liabilities
|
146,823
|
|
|
161,666
|
|
||
Deferred Federal income taxes
|
12,283
|
|
|
—
|
|
||
Junior subordinated debentures
|
242,997
|
|
|
242,784
|
|
||
Senior notes
|
1,466,178
|
|
|
1,464,784
|
|
||
Total liabilities
|
2,009,773
|
|
|
2,058,733
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock
|
—
|
|
|
—
|
|
||
Common stock
|
47,024
|
|
|
47,024
|
|
||
Additional paid-in capital
|
941,109
|
|
|
935,099
|
|
||
Retained earnings (including accumulated undistributed net income of subsidiaries of $3,384,149 and $3,309,411 at December 31, 2011 and 2010, respectively)
|
4,546,232
|
|
|
4,194,684
|
|
||
Accumulated other comprehensive income
|
354,851
|
|
|
276,563
|
|
||
Treasury stock, at cost
|
(1,880,790
|
)
|
|
(1,750,494
|
)
|
||
Total stockholders’ equity
|
4,008,426
|
|
|
3,702,876
|
|
||
Total liabilities and stockholders’ equity
|
$
|
6,018,199
|
|
|
$
|
5,761,609
|
|
|
Years Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Management fees and investment income including dividends from subsidiaries of $502,327, $405,917 and $150,545 for the years ended December 31, 2011, 2010 and 2009, respectively
|
$
|
514,057
|
|
|
$
|
411,623
|
|
|
$
|
159,361
|
|
Net investment gains (losses)
|
45,962
|
|
|
(1,891
|
)
|
|
20,961
|
|
|||
Other income
|
96
|
|
|
158
|
|
|
206
|
|
|||
Total revenues
|
560,115
|
|
|
409,890
|
|
|
180,528
|
|
|||
Operating costs and expense
|
118,922
|
|
|
117,658
|
|
|
88,276
|
|
|||
Interest expense
|
111,184
|
|
|
105,510
|
|
|
87,054
|
|
|||
Income before federal income taxes
|
330,009
|
|
|
186,722
|
|
|
5,198
|
|
|||
Federal income taxes:
|
|
|
|
|
|
|
|
|
|||
Federal income taxes provided by subsidiaries on a separate return basis
|
79,200
|
|
|
28,377
|
|
|
117,133
|
|
|||
Federal income tax expense on a consolidated return basis
|
(89,144
|
)
|
|
(138,389
|
)
|
|
(58,644
|
)
|
|||
Net benefit (expense)
|
(9,944
|
)
|
|
(110,012
|
)
|
|
58,489
|
|
|||
Income before undistributed equity in net income of subsidiaries
|
320,065
|
|
|
76,710
|
|
|
63,687
|
|
|||
Equity in undistributed net income of subsidiaries
|
74,738
|
|
|
372,577
|
|
|
245,370
|
|
|||
Net income
|
$
|
394,803
|
|
|
$
|
449,287
|
|
|
$
|
309,057
|
|
|
Years Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
394,803
|
|
|
$
|
449,287
|
|
|
$
|
309,057
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
|
|
|
|
||||
Net investment (gains) losses
|
(45,962
|
)
|
|
1,891
|
|
|
(20,961
|
)
|
|||
Depreciation and amortization
|
4,905
|
|
|
3,963
|
|
|
2,279
|
|
|||
Equity in undistributed earnings of subsidiaries
|
(74,738
|
)
|
|
(372,577
|
)
|
|
(245,370
|
)
|
|||
Tax payments received from subsidiaries
|
139,011
|
|
|
106,284
|
|
|
103,356
|
|
|||
Federal income taxes provided by subsidiaries on a separate return basis
|
(79,200
|
)
|
|
(28,377
|
)
|
|
(117,133
|
)
|
|||
Stock incentive plans
|
27,176
|
|
|
26,318
|
|
|
24,078
|
|
|||
Change in:
|
|
|
|
|
|
|
|
||||
Federal income taxes
|
56,542
|
|
|
29,332
|
|
|
62,753
|
|
|||
Other assets
|
(542
|
)
|
|
16,430
|
|
|
(381
|
)
|
|||
Other liabilities
|
(6,747
|
)
|
|
11,467
|
|
|
11,661
|
|
|||
Accrued investment income
|
1,559
|
|
|
(2,776
|
)
|
|
(137
|
)
|
|||
Other, net
|
277
|
|
|
—
|
|
|
(603
|
)
|
|||
Net cash from operating activities
|
417,084
|
|
|
241,242
|
|
|
128,599
|
|
|||
Cash from (used in) investing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from sales of fixed maturity securities
|
70,665
|
|
|
164,920
|
|
|
29,355
|
|
|||
Proceeds from maturities and prepayments of fixed maturity securities
|
165,158
|
|
|
85,695
|
|
|
47,133
|
|
|||
Proceeds from sales of equity securities
|
47,735
|
|
|
3
|
|
|
17,897
|
|
|||
Cost of purchases of fixed maturity securities
|
(240,536
|
)
|
|
(195,646
|
)
|
|
(353,944
|
)
|
|||
Investment in funds
|
—
|
|
|
—
|
|
|
5,204
|
|
|||
Investments in and advances to subsidiaries, net
|
(3,867
|
)
|
|
(18,685
|
)
|
|
(29,179
|
)
|
|||
Change in balance due to security broker
|
(5,983
|
)
|
|
(8,500
|
)
|
|
14,483
|
|
|||
Net additions to real estate, furniture & equipment
|
(643
|
)
|
|
(1,212
|
)
|
|
(224
|
)
|
|||
Other, net
|
—
|
|
|
—
|
|
|
1
|
|
|||
Net cash from (used in) investing activities
|
32,529
|
|
|
26,575
|
|
|
(269,274
|
)
|
|||
Cash from (used in) financing activities:
|
|
|
|
|
|
|
|
|
|||
Net proceeds from issuance of senior notes
|
—
|
|
|
296,636
|
|
|
297,461
|
|
|||
Net proceeds from stock options exercised
|
21,966
|
|
|
17,730
|
|
|
5,426
|
|
|||
Repayment of senior notes
|
—
|
|
|
(150,000
|
)
|
|
—
|
|
|||
Purchase of common treasury shares
|
(187,163
|
)
|
|
(471,007
|
)
|
|
(147,144
|
)
|
|||
Cash dividends to common stockholders
|
(43,255
|
)
|
|
(49,348
|
)
|
|
(28,843
|
)
|
|||
Other, net
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net cash from (used in) financing activities
|
(208,452
|
)
|
|
(355,989
|
)
|
|
126,900
|
|
|||
Net decrease in cash and cash equivalents
|
241,161
|
|
|
(88,172
|
)
|
|
(13,775
|
)
|
|||
Cash and cash equivalents at beginning of year
|
29,476
|
|
|
117,648
|
|
|
131,423
|
|
|||
Cash and cash equivalents at end of year
|
$
|
270,637
|
|
|
$
|
29,476
|
|
|
$
|
117,648
|
|
|
Deferrred
Policy
Acquisition
Cost
|
|
Reserve for
Losses and
Loss Expenses
|
|
Unearned
Premiums
|
|
Premiums
Earned
|
|
Net
Investment
Income
|
|
Loss and Loss
Expenses
|
|
Amortization of
Deferred Policy
Acquisition
Cost
|
|
Other
Operating Cost
and Expenses
|
|
Net
Premiums
Written
|
||||||||||||||||||
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Specialty
|
$
|
147,245
|
|
|
$
|
3,306,535
|
|
|
$
|
822,186
|
|
|
$
|
1,442,748
|
|
|
$
|
175,289
|
|
|
$
|
857,223
|
|
|
$
|
312,230
|
|
|
$
|
158,529
|
|
|
$
|
1,554,516
|
|
Regional
|
139,519
|
|
|
1,370,748
|
|
|
530,171
|
|
|
1,065,975
|
|
|
75,404
|
|
|
725,195
|
|
|
302,149
|
|
|
85,764
|
|
|
1,064,507
|
|
|||||||||
Alternative markets
|
34,928
|
|
|
2,506,424
|
|
|
287,246
|
|
|
612,558
|
|
|
121,360
|
|
|
442,721
|
|
|
99,938
|
|
|
131,260
|
|
|
619,097
|
|
|||||||||
Reinsurance
|
58,143
|
|
|
1,523,210
|
|
|
207,956
|
|
|
426,008
|
|
|
91,871
|
|
|
262,286
|
|
|
130,354
|
|
|
41,989
|
|
|
430,329
|
|
|||||||||
International
|
68,960
|
|
|
630,217
|
|
|
342,016
|
|
|
613,578
|
|
|
42,882
|
|
|
370,940
|
|
|
189,729
|
|
|
55,707
|
|
|
688,919
|
|
|||||||||
Corporate and adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,545
|
|
|
—
|
|
|
—
|
|
|
113,680
|
|
|
—
|
|
|||||||||
Total
|
$
|
448,795
|
|
|
$
|
9,337,134
|
|
|
$
|
2,189,575
|
|
|
$
|
4,160,867
|
|
|
$
|
526,351
|
|
|
$
|
2,658,365
|
|
|
$
|
1,034,400
|
|
|
$
|
586,929
|
|
|
$
|
4,357,368
|
|
December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Specialty
|
$
|
122,440
|
|
|
$
|
3,186,769
|
|
|
$
|
693,358
|
|
|
$
|
1,288,373
|
|
|
$
|
180,063
|
|
|
$
|
750,831
|
|
|
$
|
263,279
|
|
|
$
|
160,811
|
|
|
$
|
1,311,831
|
|
Regional
|
139,289
|
|
|
1,378,936
|
|
|
530,672
|
|
|
1,066,922
|
|
|
82,411
|
|
|
647,986
|
|
|
293,690
|
|
|
93,418
|
|
|
1,044,347
|
|
|||||||||
Alternative markets
|
33,471
|
|
|
2,355,007
|
|
|
261,858
|
|
|
608,191
|
|
|
123,309
|
|
|
410,873
|
|
|
92,364
|
|
|
128,829
|
|
|
582,045
|
|
|||||||||
Reinsurance
|
56,834
|
|
|
1,591,397
|
|
|
203,430
|
|
|
419,356
|
|
|
103,079
|
|
|
220,230
|
|
|
129,508
|
|
|
42,775
|
|
|
401,239
|
|
|||||||||
International
|
53,908
|
|
|
504,440
|
|
|
264,403
|
|
|
452,740
|
|
|
32,794
|
|
|
279,947
|
|
|
138,376
|
|
|
46,037
|
|
|
511,464
|
|
|||||||||
Corporate and adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,869
|
|
|
—
|
|
|
—
|
|
|
314,841
|
|
|
—
|
|
|||||||||
Total
|
$
|
405,942
|
|
|
$
|
9,016,549
|
|
|
$
|
1,953,721
|
|
|
$
|
3,835,582
|
|
|
$
|
530,525
|
|
|
$
|
2,309,867
|
|
|
$
|
917,217
|
|
|
$
|
786,711
|
|
|
$
|
3,850,926
|
|
December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Specialty
|
$
|
116,234
|
|
|
$
|
3,210,479
|
|
|
$
|
662,972
|
|
|
$
|
1,354,355
|
|
|
$
|
125,351
|
|
|
$
|
838,894
|
|
|
$
|
297,388
|
|
|
$
|
126,078
|
|
|
$
|
1,260,451
|
|
Regional
|
142,249
|
|
|
1,440,158
|
|
|
554,426
|
|
|
1,116,871
|
|
|
57,530
|
|
|
686,093
|
|
|
289,973
|
|
|
94,982
|
|
|
1,081,100
|
|
|||||||||
Alternative markets
|
34,443
|
|
|
2,221,488
|
|
|
287,031
|
|
|
597,932
|
|
|
83,719
|
|
|
378,961
|
|
|
89,432
|
|
|
137,415
|
|
|
589,637
|
|
|||||||||
Reinsurance
|
60,219
|
|
|
1,787,006
|
|
|
225,209
|
|
|
411,511
|
|
|
75,505
|
|
|
238,075
|
|
|
127,446
|
|
|
35,137
|
|
|
423,425
|
|
|||||||||
International
|
38,215
|
|
|
412,540
|
|
|
198,790
|
|
|
325,180
|
|
|
26,767
|
|
|
194,684
|
|
|
98,915
|
|
|
35,629
|
|
|
375,482
|
|
|||||||||
Corporate and adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,136
|
|
|
—
|
|
|
—
|
|
|
291,857
|
|
|
—
|
|
|||||||||
Total
|
$
|
391,360
|
|
|
$
|
9,071,671
|
|
|
$
|
1,928,428
|
|
|
$
|
3,805,849
|
|
|
$
|
379,008
|
|
|
$
|
2,336,707
|
|
|
$
|
903,154
|
|
|
$
|
721,098
|
|
|
$
|
3,730,095
|
|
|
Premiums Written
|
|
|
|||||||||||||||
|
Direct
Amount
|
|
Ceded
to Other
Companies
|
|
Assumed
from Other
Companies
|
|
Net
Amount
|
|
Percentage
of Amount
Assumed
to Net
|
|||||||||
Year ended December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty
|
$
|
1,774,871
|
|
|
$
|
263,828
|
|
|
$
|
43,473
|
|
|
$
|
1,554,516
|
|
|
2.8
|
%
|
Regional
|
1,143,706
|
|
|
84,855
|
|
|
5,656
|
|
|
1,064,507
|
|
|
0.5
|
|
||||
Alternative markets
|
760,339
|
|
|
208,059
|
|
|
66,817
|
|
|
619,097
|
|
|
10.8
|
|
||||
Reinsurance
|
5,179
|
|
|
22,841
|
|
|
447,991
|
|
|
430,329
|
|
|
104.1
|
|
||||
International
|
685,997
|
|
|
140,362
|
|
|
143,284
|
|
|
688,919
|
|
|
20.8
|
|
||||
Total
|
$
|
4,370,092
|
|
|
$
|
719,945
|
|
|
$
|
707,221
|
|
|
$
|
4,357,368
|
|
|
16.2
|
%
|
Year ended December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty
|
$
|
1,492,589
|
|
|
$
|
214,025
|
|
|
$
|
33,267
|
|
|
$
|
1,311,831
|
|
|
2.5
|
%
|
Regional
|
1,155,970
|
|
|
115,789
|
|
|
4,166
|
|
|
1,044,347
|
|
|
0.4
|
|
||||
Alternative markets
|
619,832
|
|
|
120,672
|
|
|
82,885
|
|
|
582,045
|
|
|
14.2
|
|
||||
Reinsurance
|
3,803
|
|
|
24,058
|
|
|
421,494
|
|
|
401,239
|
|
|
105.0
|
|
||||
International
|
516,057
|
|
|
90,607
|
|
|
86,014
|
|
|
511,464
|
|
|
16.8
|
|
||||
Total
|
$
|
3,788,251
|
|
|
$
|
565,151
|
|
|
$
|
627,826
|
|
|
$
|
3,850,926
|
|
|
16.3
|
%
|
Year ended December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty
|
$
|
1,443,728
|
|
|
$
|
203,754
|
|
|
$
|
20,477
|
|
|
$
|
1,260,451
|
|
|
1.6
|
%
|
Regional
|
1,217,365
|
|
|
148,686
|
|
|
12,421
|
|
|
1,081,100
|
|
|
1.1
|
|
||||
Alternative markets
|
567,767
|
|
|
75,112
|
|
|
96,982
|
|
|
589,637
|
|
|
16.4
|
|
||||
Reinsurance
|
8,638
|
|
|
32,544
|
|
|
447,331
|
|
|
423,425
|
|
|
105.6
|
|
||||
International
|
362,338
|
|
|
63,249
|
|
|
76,393
|
|
|
375,482
|
|
|
20.3
|
|
||||
Total
|
$
|
3,599,836
|
|
|
$
|
523,345
|
|
|
$
|
653,604
|
|
|
$
|
3,730,095
|
|
|
17.5
|
%
|
|
Opening
Balance
|
|
Additions-
Charged to
Expense
|
|
Deduction-
Amounts
Written Off
|
|
Ending
Balance
|
||||||||
Year ended December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Premiums and fees receivable
|
$
|
19,483
|
|
|
$
|
6,158
|
|
|
$
|
(7,975
|
)
|
|
$
|
17,666
|
|
Due from reinsurers
|
3,098
|
|
|
71
|
|
|
—
|
|
|
3,169
|
|
||||
Deferred federal and foreign income taxes
|
2,328
|
|
|
—
|
|
|
(2,328
|
)
|
|
—
|
|
||||
Loan loss reserves
|
19,675
|
|
|
889
|
|
|
(759
|
)
|
|
19,805
|
|
||||
Total
|
$
|
44,584
|
|
|
$
|
7,118
|
|
|
$
|
(11,062
|
)
|
|
$
|
40,640
|
|
Year ended December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Premiums and fees receivable
|
$
|
19,733
|
|
|
$
|
5,013
|
|
|
$
|
(5,263
|
)
|
|
$
|
19,483
|
|
Due from reinsurers
|
4,430
|
|
|
—
|
|
|
(1,332
|
)
|
|
3,098
|
|
||||
Deferred federal and foreign income taxes
|
2,226
|
|
|
102
|
|
|
—
|
|
|
2,328
|
|
||||
Loan loss reserves
|
13,583
|
|
|
6,232
|
|
|
(140
|
)
|
|
19,675
|
|
||||
Total
|
$
|
39,972
|
|
|
$
|
11,347
|
|
|
$
|
(6,735
|
)
|
|
$
|
44,584
|
|
Year ended December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Premiums and fees receivable
|
$
|
18,423
|
|
|
$
|
9,593
|
|
|
$
|
(8,283
|
)
|
|
$
|
19,733
|
|
Due from reinsurers
|
4,895
|
|
|
—
|
|
|
(465
|
)
|
|
4,430
|
|
||||
Deferred federal and foreign income taxes
|
3,113
|
|
|
—
|
|
|
(887
|
)
|
|
2,226
|
|
||||
Loan loss reserves
|
684
|
|
|
12,899
|
|
|
—
|
|
|
13,583
|
|
||||
Total
|
$
|
27,115
|
|
|
$
|
22,492
|
|
|
$
|
(9,635
|
)
|
|
$
|
39,972
|
|
|
2011
|
|
2010
|
|
2009
|
||||||
Deferred policy acquisition costs
|
$
|
448,795
|
|
|
$
|
405,942
|
|
|
$
|
391,360
|
|
Reserves for losses and loss expenses
|
9,337,134
|
|
|
9,016,549
|
|
|
9,071,671
|
|
|||
Unearned premium
|
2,189,575
|
|
|
1,953,721
|
|
|
1,928,428
|
|
|||
Premiums earned
|
4,160,867
|
|
|
3,835,582
|
|
|
3,805,849
|
|
|||
Net investment income
|
526,351
|
|
|
530,525
|
|
|
379,008
|
|
|||
Losses and loss expenses incurred:
|
|
|
|
|
|
||||||
Current year
|
2,791,860
|
|
|
2,509,933
|
|
|
2,518,849
|
|
|||
Prior years
|
(181,282
|
)
|
|
(253,248
|
)
|
|
(234,008
|
)
|
|||
Loss reserve discount accretion
|
47,787
|
|
|
53,182
|
|
|
51,866
|
|
|||
Amortization of deferred policy acquisition costs
|
1,034,400
|
|
|
917,217
|
|
|
903,154
|
|
|||
Paid losses and loss expenses
|
2,486,998
|
|
|
2,453,077
|
|
|
2,333,631
|
|
|||
Net premiums written
|
4,357,368
|
|
|
3,850,926
|
|
|
3,730,095
|
|
(b)
|
Is terminated, prior to the earlier of the end of the Performance Period and the Participant's death, as a result of Disability or Retirement, or by the Company or a Subsidiary or Affiliate, as applicable, for any reason other than Cause.
|
Mortality:
|
Based on the mortality rates under the 1994 Uninsured Pensioner Mortality Table (UP-94)
|
Interest Rate:
|
6%
|
|
|
By:
|
/s/Rodney A. Hawes, Jr.
|
|
/s/ William R. Berkley
|
|
William R. Berkley
|
|
Chairman of the Board and
Chief Executive Officer
|
|
/s/ Eugene G. Ballard
|
|
Eugene G. Ballard
|
|
Senior Vice President -
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/ William R. Berkley
|
William R. Berkley
|
Chairman of the Board and Chief Executive Officer
|
|
/s/ Eugene G. Ballard
|
Eugene G. Ballard
|
Senior Vice President — Chief Financial Officer
|