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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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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
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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475 Steamboat Road, Greenwich, Connecticut
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06830
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(Address of principal executive offices)
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(Zip Code)
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(203) 629-3000
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(Registrant’s telephone number, including area code)
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None
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Former name, former address and former fiscal year, if changed since last report
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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EX-10.1
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EX-31.1
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EX-31.2
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EX-32.1
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EX-101 INSTANCE DOCUMENT
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EX-101 SCHEMA DOCUMENT
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EX-101 CALCULATION LINKBASE DOCUMENT
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EX-101 LABELS LINKBASE DOCUMENT
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EX-101 PRESENTATION LINKBASE DOCUMENT
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EX-101 DEFINITION LINKBASE DOCUMENT
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Item 1.
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Financial Statements
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March 31,
2015 |
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December 31,
2014 |
||||
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(Unaudited)
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(Audited)
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||||
Assets
|
|
|
|
||||
Investments:
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|
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|
||||
Fixed maturity securities
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$
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12,652,269
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$
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12,705,160
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Investment funds
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1,214,272
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1,211,401
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Real estate
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761,856
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731,612
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Arbitrage trading account
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972,629
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450,648
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Loans receivable
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280,769
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322,012
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Equity securities
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174,709
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|
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170,991
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Total investments
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16,056,504
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|
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15,591,824
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Cash and cash equivalents
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614,695
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674,441
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Premiums and fees receivable
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1,706,823
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1,651,088
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Due from reinsurers
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1,519,530
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1,503,441
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Deferred policy acquisition costs
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507,509
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488,525
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Prepaid reinsurance premiums
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410,359
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395,748
|
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Trading account receivables from brokers and clearing organizations
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—
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371,034
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Property, furniture and equipment
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327,231
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332,098
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Goodwill
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150,551
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150,944
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Accrued investment income
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139,689
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|
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120,367
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|
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Federal and foreign income taxes
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—
|
|
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30,171
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Other assets
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414,161
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369,558
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Total assets
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$
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21,847,052
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$
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21,679,239
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||||
Liabilities and Equity
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Liabilities:
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|
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||||
Reserves for losses and loss expenses
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$
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10,474,954
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$
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10,369,701
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Unearned premiums
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3,128,637
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3,026,732
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Due to reinsurers
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218,443
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237,270
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Trading account securities sold but not yet purchased
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99,299
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106,079
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Trading account payable to brokers and clearing organizations
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165,420
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—
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Federal and foreign income taxes
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20,957
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—
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Other liabilities
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673,724
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859,736
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Senior notes and other debt
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2,112,456
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2,115,527
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Subordinated debentures
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340,125
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340,060
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Total liabilities
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17,234,015
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17,055,105
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Equity:
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||||
Preferred stock, par value $.10 per share:
|
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||||
Authorized 5,000,000 shares; issued and outstanding - none
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Common stock, par value $.20 per share:
|
|
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|
||||
Authorized 500,000,000 shares, issued and outstanding, net of treasury shares, 124,933,275 and 126,748,836 shares, respectively
|
47,024
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47,024
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|
||
Additional paid-in capital
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998,005
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991,512
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Retained earnings
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5,836,968
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5,732,410
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Accumulated other comprehensive income
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152,058
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|
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183,550
|
|
||
Treasury stock, at cost, 110,184,643 and 108,369,082 shares, respectively
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(2,455,433
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)
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(2,364,551
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)
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||
Total stockholders’ equity
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4,578,622
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4,589,945
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Noncontrolling interests
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34,415
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34,189
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Total equity
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4,613,037
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4,624,134
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Total liabilities and equity
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$
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21,847,052
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$
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21,679,239
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For the Three Months
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||||||
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Ended March 31,
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||||||
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2015
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2014
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||||
REVENUES:
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Net premiums written
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$
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1,575,402
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$
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1,525,880
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Change in net unearned premiums
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(103,389
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)
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(162,268
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)
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Net premiums earned
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1,472,013
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1,363,612
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Net investment income
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124,239
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168,711
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Insurance service fees
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36,518
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28,703
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Net realized investment gains
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19,044
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52,754
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|
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Revenues from wholly-owned investees
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92,606
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92,840
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Other income
|
259
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|
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286
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Total revenues
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1,744,679
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1,706,906
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OPERATING COSTS AND EXPENSES:
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||||
Losses and loss expenses
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900,708
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822,095
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Other operating costs and expenses
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551,046
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515,166
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Expenses from wholly-owned investees
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89,670
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91,730
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Interest expense
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34,538
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30,330
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Total operating costs and expenses
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1,575,962
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1,459,321
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Income before income taxes
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168,717
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247,585
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Income tax expense
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(50,273
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)
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(77,901
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)
|
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Net income before noncontrolling interests
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118,444
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169,684
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Noncontrolling interests
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(137
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)
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(11
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)
|
||
Net income to common stockholders
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$
|
118,307
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$
|
169,673
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||||
NET INCOME PER SHARE:
|
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||||
Basic
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$
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0.94
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$
|
1.31
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Diluted
|
$
|
0.89
|
|
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$
|
1.25
|
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For the Three Months
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||||||
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Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Net income before noncontrolling interests
|
$
|
118,444
|
|
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$
|
169,684
|
|
Other comprehensive income (loss):
|
|
|
|
||||
Change in unrealized currency translation adjustments
|
(47,805
|
)
|
|
(4,025
|
)
|
||
Change in unrealized investment gains (loss), net of taxes
|
16,291
|
|
|
72,944
|
|
||
Change in net pension asset, net of taxes
|
—
|
|
|
591
|
|
||
Other comprehensive income (loss)
|
(31,514
|
)
|
|
69,510
|
|
||
Comprehensive income
|
86,930
|
|
|
239,194
|
|
||
Comprehensive (income) to the noncontrolling interest
|
(115
|
)
|
|
(29
|
)
|
||
Comprehensive income to common stockholders
|
$
|
86,815
|
|
|
$
|
239,165
|
|
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For the Three Months
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||||||
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Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
COMMON STOCK:
|
|
|
|
||||
Beginning and end of period
|
$
|
47,024
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|
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$
|
47,024
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|
ADDITIONAL PAID-IN CAPITAL:
|
|
|
|
||||
Beginning of period
|
$
|
991,512
|
|
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$
|
967,440
|
|
Restricted stock units issued, net of tax
|
(1,678
|
)
|
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(3,338
|
)
|
||
Stock units expensed
|
8,171
|
|
|
6,203
|
|
||
End of period
|
$
|
998,005
|
|
|
$
|
970,305
|
|
RETAINED EARNINGS:
|
|
|
|
||||
Beginning of period
|
$
|
5,732,410
|
|
|
$
|
5,265,015
|
|
Net income to common stockholders
|
118,307
|
|
|
169,673
|
|
||
Dividends
|
(13,749
|
)
|
|
(12,775
|
)
|
||
End of period
|
$
|
5,836,968
|
|
|
$
|
5,421,913
|
|
ACCUMULATED OTHER COMPREHENSIVE INCOME:
|
|
|
|
||||
Unrealized investment gains:
|
|
|
|
||||
Beginning of period
|
$
|
306,199
|
|
|
$
|
256,566
|
|
Unrealized gains on securities not other-than-temporarily impaired
|
16,308
|
|
|
72,563
|
|
||
Unrealized gains on other-than-temporarily impaired securities
|
5
|
|
|
363
|
|
||
End of period
|
322,512
|
|
|
329,492
|
|
||
Currency translation adjustments:
|
|
|
|
||||
Beginning of period
|
(122,649
|
)
|
|
(60,524
|
)
|
||
Net change in period
|
(47,805
|
)
|
|
(4,025
|
)
|
||
End of period
|
(170,454
|
)
|
|
(64,549
|
)
|
||
Net pension asset:
|
|
|
|
||||
Beginning of period
|
—
|
|
|
(6,651
|
)
|
||
Net change in period
|
—
|
|
|
591
|
|
||
End of period
|
—
|
|
|
(6,060
|
)
|
||
Total accumulated other comprehensive income
|
$
|
152,058
|
|
|
$
|
258,883
|
|
TREASURY STOCK:
|
|
|
|
||||
Beginning of period
|
$
|
(2,364,551
|
)
|
|
$
|
(2,132,835
|
)
|
Stock exercised/vested
|
331
|
|
|
3,322
|
|
||
Stock repurchased
|
(91,213
|
)
|
|
(192,668
|
)
|
||
End of period
|
$
|
(2,455,433
|
)
|
|
$
|
(2,322,181
|
)
|
NONCONTROLLING INTERESTS:
|
|
|
|
||||
Beginning of period
|
$
|
34,189
|
|
|
$
|
33,359
|
|
Contributions
|
111
|
|
|
1,526
|
|
||
Net income
|
137
|
|
|
11
|
|
||
Other comprehensive income (loss), net of tax
|
(22
|
)
|
|
18
|
|
||
End of period
|
$
|
34,415
|
|
|
$
|
34,914
|
|
|
For the Three Months
|
||||||
|
Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
CASH FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income to common stockholders
|
$
|
118,307
|
|
|
$
|
169,673
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
||||
Net investment gains
|
(19,044
|
)
|
|
(52,754
|
)
|
||
Depreciation and amortization
|
19,203
|
|
|
25,236
|
|
||
Noncontrolling interests
|
137
|
|
|
11
|
|
||
Investment funds
|
(6,061
|
)
|
|
(58,906
|
)
|
||
Stock incentive plans
|
8,171
|
|
|
6,187
|
|
||
Change in:
|
|
|
|
||||
Arbitrage trading account
|
7,692
|
|
|
42
|
|
||
Premiums and fees receivable
|
(71,181
|
)
|
|
(99,306
|
)
|
||
Reinsurance accounts
|
(46,260
|
)
|
|
(49,583
|
)
|
||
Deferred policy acquisition costs
|
(21,314
|
)
|
|
(24,066
|
)
|
||
Income taxes
|
44,618
|
|
|
70,070
|
|
||
Reserves for losses and loss expenses
|
152,925
|
|
|
148,204
|
|
||
Unearned premiums
|
117,403
|
|
|
198,933
|
|
||
Other
|
(243,584
|
)
|
|
(190,577
|
)
|
||
Net cash from operating activities
|
61,012
|
|
|
143,164
|
|
||
CASH FROM (USED IN) INVESTING ACTIVITIES:
|
|
|
|
||||
Proceeds from sale of fixed maturity securities
|
466,276
|
|
|
328,371
|
|
||
Proceeds from sale of equity securities
|
9,785
|
|
|
6,457
|
|
||
Distributions from (contributions to) investment funds
|
(9,363
|
)
|
|
158,808
|
|
||
Proceeds from maturities and prepayments of fixed maturity securities
|
655,349
|
|
|
546,838
|
|
||
Purchase of fixed maturity securities
|
(1,094,439
|
)
|
|
(1,131,612
|
)
|
||
Purchase of equity securities
|
(8,882
|
)
|
|
(19,274
|
)
|
||
Additions to real estate
|
(44,162
|
)
|
|
(35,613
|
)
|
||
Change in loans receivable
|
41,244
|
|
|
(29,568
|
)
|
||
Net additions to property, furniture and equipment
|
(7,680
|
)
|
|
(9,862
|
)
|
||
Change in balances due to security brokers
|
(2,652
|
)
|
|
51,557
|
|
||
Payment for business purchased, net of cash acquired
|
—
|
|
|
(97
|
)
|
||
Net cash from (used in) investing activities
|
5,476
|
|
|
(133,995
|
)
|
||
CASH USED IN FINANCING ACTIVITIES:
|
|
|
|
||||
Repayment of senior notes and other debt
|
(3,240
|
)
|
|
(125
|
)
|
||
Cash dividends to common stockholders
|
(13,749
|
)
|
|
(12,775
|
)
|
||
Purchase of common treasury shares
|
(91,213
|
)
|
|
(192,668
|
)
|
||
Other, net
|
(1,187
|
)
|
|
1,677
|
|
||
Net cash used in financing activities
|
(109,389
|
)
|
|
(203,891
|
)
|
||
Net impact on cash due to change in foreign exchange rates
|
(16,845
|
)
|
|
(1,441
|
)
|
||
Net change in cash and cash equivalents
|
(59,746
|
)
|
|
(196,163
|
)
|
||
Cash and cash equivalents at beginning of year
|
674,441
|
|
|
839,738
|
|
||
Cash and cash equivalents at end of period
|
$
|
614,695
|
|
|
$
|
643,575
|
|
(In thousands)
|
2014
|
||
|
|
||
Cash and cash equivalents
|
$
|
17,457
|
|
Real estate, furniture and equipment
|
669
|
|
|
Goodwill and other intangibles assets
|
79,646
|
|
|
Premium and service fee receivable
|
24,432
|
|
|
Other assets
|
2,590
|
|
|
Total assets acquired
|
124,794
|
|
|
Deferred federal income tax
|
(7,107
|
)
|
|
Debt
|
—
|
|
|
Other liabilities assumed
|
(34,809
|
)
|
|
Net assets acquired
|
$
|
82,878
|
|
(In thousands)
|
Unrealized Investment Gains (Losses)
|
|
Currency Translation Adjustments
|
|
Net Pension Asset
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||
As of and for the three months ended March 31, 2015:
|
|
|
|
|
|
|
|||||||||
Changes in AOCI
|
|
|
|
|
|
|
|||||||||
Beginning of period
|
$
|
306,199
|
|
|
$
|
(122,649
|
)
|
|
$
|
—
|
|
|
$
|
183,550
|
|
Other comprehensive income (loss) before reclassifications
|
24,592
|
|
|
(47,805
|
)
|
|
—
|
|
|
(23,213
|
)
|
||||
Amounts reclassified from AOCI
|
(8,301
|
)
|
|
—
|
|
|
—
|
|
|
(8,301
|
)
|
||||
Other comprehensive income (loss)
|
16,291
|
|
|
(47,805
|
)
|
|
—
|
|
|
(31,514
|
)
|
||||
Unrealized investment gain related to non-controlling interest
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||
End of period
|
$
|
322,512
|
|
|
$
|
(170,454
|
)
|
|
$
|
—
|
|
|
$
|
152,058
|
|
Amounts reclassified from AOCI
|
|
|
|
|
|
|
|
||||||||
Pre-tax
|
$
|
(12,771
|
)
|
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(12,771
|
)
|
Tax effect (3)
|
4,470
|
|
|
—
|
|
|
—
|
|
|
4,470
|
|
||||
After-tax amounts reclassified
|
$
|
(8,301
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(8,301
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Pre-tax
|
$
|
24,536
|
|
|
$
|
(47,805
|
)
|
|
$
|
—
|
|
|
$
|
(23,269
|
)
|
Tax effect
|
(8,245
|
)
|
|
—
|
|
|
—
|
|
|
(8,245
|
)
|
||||
Other comprehensive income (loss)
|
$
|
16,291
|
|
|
$
|
(47,805
|
)
|
|
$
|
—
|
|
|
$
|
(31,514
|
)
|
|
Unrealized Investment Gains (Losses)
|
|
Currency Translation Adjustments
|
|
Net Pension Asset
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||
(In thousands)
|
|
|
|
|
|
|
|
||||||||
As of and for the three months ended March 31, 2014:
|
|
|
|
|
|
|
|||||||||
Changes in AOCI
|
|
|
|
|
|
|
|||||||||
Beginning of period
|
$
|
256,566
|
|
|
$
|
(60,524
|
)
|
|
$
|
(6,651
|
)
|
|
$
|
189,391
|
|
Other comprehensive income (loss) before reclassifications
|
77,443
|
|
|
(4,025
|
)
|
|
—
|
|
|
$
|
73,418
|
|
|||
Amounts reclassified from AOCI
|
(4,499
|
)
|
|
—
|
|
|
591
|
|
|
$
|
(3,908
|
)
|
|||
Other comprehensive income (loss)
|
72,944
|
|
|
(4,025
|
)
|
|
591
|
|
|
$
|
69,510
|
|
|||
Unrealized investment loss related to non-controlling interest
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(18
|
)
|
|||
End of period
|
$
|
329,492
|
|
|
$
|
(64,549
|
)
|
|
$
|
(6,060
|
)
|
|
$
|
258,883
|
|
Amounts reclassified from AOCI
|
|
|
|
|
|
|
|
||||||||
Pre-tax
|
$
|
(6,921
|
)
|
(1)
|
$
|
—
|
|
|
$
|
909
|
|
(2)
|
$
|
(6,012
|
)
|
Tax effect (3)
|
2,422
|
|
|
—
|
|
|
(318
|
)
|
|
$
|
2,104
|
|
|||
After-tax amounts reclassified
|
$
|
(4,499
|
)
|
|
$
|
—
|
|
|
$
|
591
|
|
|
$
|
(3,908
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Pre-tax
|
$
|
112,290
|
|
|
$
|
(4,025
|
)
|
|
$
|
909
|
|
|
$
|
109,174
|
|
Tax effect
|
(39,346
|
)
|
|
—
|
|
|
(318
|
)
|
|
$
|
(39,664
|
)
|
|||
Other comprehensive income (loss)
|
$
|
72,944
|
|
|
$
|
(4,025
|
)
|
|
$
|
591
|
|
|
$
|
69,510
|
|
(In thousands)
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||||||
Gains
|
|
Losses
|
|
||||||||||||||||
March 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Held to maturity:
|
|
|
|
|
|
|
|
|
|
||||||||||
State and municipal
|
$
|
73,974
|
|
|
$
|
17,820
|
|
|
$
|
—
|
|
|
$
|
91,794
|
|
|
$
|
73,974
|
|
Residential mortgage-backed
|
22,300
|
|
|
3,049
|
|
|
—
|
|
|
25,349
|
|
|
22,300
|
|
|||||
Corporate
|
4,999
|
|
|
215
|
|
|
—
|
|
|
5,214
|
|
|
4,999
|
|
|||||
Total held to maturity
|
101,273
|
|
|
21,084
|
|
|
—
|
|
|
122,357
|
|
|
101,273
|
|
|||||
Available for sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and government agency
|
719,947
|
|
|
34,349
|
|
|
(1,829
|
)
|
|
752,467
|
|
|
752,467
|
|
|||||
State and municipal
|
4,220,797
|
|
|
232,353
|
|
|
(4,446
|
)
|
|
4,448,704
|
|
|
4,448,704
|
|
|||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential (1)
|
1,100,122
|
|
|
32,147
|
|
|
(6,687
|
)
|
|
1,125,582
|
|
|
1,125,582
|
|
|||||
Commercial
|
71,083
|
|
|
1,867
|
|
|
(66
|
)
|
|
72,884
|
|
|
72,884
|
|
|||||
Corporate
|
5,022,705
|
|
|
209,711
|
|
|
(19,776
|
)
|
|
5,212,640
|
|
|
5,212,640
|
|
|||||
Foreign
|
892,006
|
|
|
64,854
|
|
|
(18,141
|
)
|
|
938,719
|
|
|
938,719
|
|
|||||
Total available for sale
|
12,026,660
|
|
|
575,281
|
|
|
(50,945
|
)
|
|
12,550,996
|
|
|
12,550,996
|
|
|||||
Total investments in fixed maturity securities
|
$
|
12,127,933
|
|
|
$
|
596,365
|
|
|
$
|
(50,945
|
)
|
|
$
|
12,673,353
|
|
|
$
|
12,652,269
|
|
December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Held to maturity:
|
|
|
|
|
|
|
|
|
|
||||||||||
State and municipal
|
$
|
72,901
|
|
|
$
|
17,501
|
|
|
$
|
—
|
|
|
$
|
90,402
|
|
|
$
|
72,901
|
|
Residential mortgage-backed
|
23,278
|
|
|
2,854
|
|
|
—
|
|
|
26,132
|
|
|
23,278
|
|
|||||
Corporate
|
4,998
|
|
|
291
|
|
|
—
|
|
|
5,289
|
|
|
4,998
|
|
|||||
Total held to maturity
|
101,177
|
|
|
20,646
|
|
|
—
|
|
|
121,823
|
|
|
101,177
|
|
|||||
Available for sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and government agency
|
773,192
|
|
|
33,353
|
|
|
(3,157
|
)
|
|
803,388
|
|
|
803,388
|
|
|||||
State and municipal
|
4,137,866
|
|
|
229,150
|
|
|
(4,020
|
)
|
|
4,362,996
|
|
|
4,362,996
|
|
|||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential (1)
|
1,201,924
|
|
|
27,124
|
|
|
(9,449
|
)
|
|
1,219,599
|
|
|
1,219,599
|
|
|||||
Commercial
|
74,479
|
|
|
1,610
|
|
|
(52
|
)
|
|
76,037
|
|
|
76,037
|
|
|||||
Corporate
|
5,036,958
|
|
|
187,960
|
|
|
(24,781
|
)
|
|
5,200,137
|
|
|
5,200,137
|
|
|||||
Foreign
|
897,668
|
|
|
62,223
|
|
|
(18,065
|
)
|
|
941,826
|
|
|
941,826
|
|
|||||
Total available for sale
|
12,122,087
|
|
|
541,420
|
|
|
(59,524
|
)
|
|
12,603,983
|
|
|
12,603,983
|
|
|||||
Total investments in fixed maturity securities
|
$
|
12,223,264
|
|
|
$
|
562,066
|
|
|
$
|
(59,524
|
)
|
|
$
|
12,725,806
|
|
|
$
|
12,705,160
|
|
(1)
|
Gross unrealized losses for residential mortgage-backed securities include
$1,088,067
and
$1,095,671
as of
March 31, 2015
and
December 31, 2014
, respectively, related to the non-credit portion of other-than-temporary impairments (“OTTI”) recognized in accumulated other comprehensive income.
|
(In thousands)
|
Amortized
Cost
|
|
Fair Value
|
||||
Due in one year or less
|
$
|
811,966
|
|
|
$
|
814,139
|
|
Due after one year through five years
|
4,060,941
|
|
|
4,247,879
|
|
||
Due after five years through ten years
|
3,612,480
|
|
|
3,816,097
|
|
||
Due after ten years
|
2,449,041
|
|
|
2,571,423
|
|
||
Mortgage-backed securities
|
1,193,505
|
|
|
1,223,815
|
|
||
Total
|
$
|
12,127,933
|
|
|
$
|
12,673,353
|
|
(In thousands)
|
Cost
|
|
Gross Unrealized
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||||||
Gains
|
|
Losses
|
|
||||||||||||||||
March 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
$
|
70,483
|
|
|
$
|
—
|
|
|
$
|
(9,383
|
)
|
|
$
|
61,100
|
|
|
$
|
61,100
|
|
Preferred stocks
|
100,377
|
|
|
17,102
|
|
|
(3,870
|
)
|
|
113,609
|
|
|
113,609
|
|
|||||
Total
|
$
|
170,860
|
|
|
$
|
17,102
|
|
|
$
|
(13,253
|
)
|
|
$
|
174,709
|
|
|
$
|
174,709
|
|
December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
$
|
69,870
|
|
|
$
|
11,929
|
|
|
$
|
(5,453
|
)
|
|
$
|
76,346
|
|
|
$
|
76,346
|
|
Preferred stocks
|
90,425
|
|
|
8,385
|
|
|
(4,165
|
)
|
|
94,645
|
|
|
94,645
|
|
|||||
Total
|
$
|
160,295
|
|
|
$
|
20,314
|
|
|
$
|
(9,618
|
)
|
|
$
|
170,991
|
|
|
$
|
170,991
|
|
|
For the Three Months
|
||||||
|
Ended March 31,
|
||||||
(In thousands)
|
2015
|
|
2014
|
||||
Investment income earned on:
|
|
|
|
||||
Fixed maturity securities, including cash and cash equivalents and loans receivable
|
$
|
108,129
|
|
|
$
|
106,898
|
|
Investment funds
|
6,061
|
|
|
53,799
|
|
||
Arbitrage trading account
|
8,979
|
|
|
5,519
|
|
||
Equity securities available for sale
|
1,180
|
|
|
1,946
|
|
||
Real estate
|
2,767
|
|
|
3,102
|
|
||
Gross investment income
|
127,116
|
|
|
171,264
|
|
||
Investment expense
|
(2,877
|
)
|
|
(2,553
|
)
|
||
Net investment income
|
$
|
124,239
|
|
|
$
|
168,711
|
|
|
Carrying Value as of
|
|
Income (Loss) from Investment Funds
|
||||||||||||
|
March 31,
|
|
December 31,
|
|
For the Three Months Ended March 31,
|
||||||||||
(In thousands)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Real estate
|
$
|
481,822
|
|
|
$
|
466,703
|
|
|
$
|
26,012
|
|
|
$
|
12,295
|
|
Energy
|
119,813
|
|
|
152,056
|
|
|
(21,868
|
)
|
|
8,601
|
|
||||
Arbitrage
|
281,462
|
|
|
282,335
|
|
|
(873
|
)
|
|
5,107
|
|
||||
Other funds
|
331,175
|
|
|
310,307
|
|
|
2,790
|
|
|
27,796
|
|
||||
Total
|
$
|
1,214,272
|
|
|
$
|
1,211,401
|
|
|
$
|
6,061
|
|
|
$
|
53,799
|
|
|
Carrying Value
|
||||||
|
March 31,
|
|
December 31,
|
||||
(In thousands)
|
2015
|
|
2014
|
||||
Properties in operation
|
$
|
200,010
|
|
|
$
|
196,980
|
|
Properties under development
|
561,846
|
|
|
534,632
|
|
||
Total
|
$
|
761,856
|
|
|
$
|
731,612
|
|
(In thousands)
|
March 31, 2015
|
|
December 31, 2014
|
||||
Amortized cost:
|
|
|
|
||||
Real estate loans
|
$
|
203,558
|
|
|
$
|
243,407
|
|
Commercial loans
|
77,211
|
|
|
78,605
|
|
||
Total
|
$
|
280,769
|
|
|
$
|
322,012
|
|
|
|
|
|
||||
Fair value:
|
|
|
|
||||
Real estate loans
|
$
|
206,626
|
|
|
$
|
245,112
|
|
Commercial loans
|
77,210
|
|
|
80,107
|
|
||
Total
|
$
|
283,836
|
|
|
$
|
325,219
|
|
|
|
|
|
||||
Valuation allowance:
|
|
|
|
||||
Specific
|
$
|
76
|
|
|
$
|
115
|
|
General
|
2,363
|
|
|
2,371
|
|
||
Total
|
$
|
2,439
|
|
|
$
|
2,486
|
|
|
|
|
|
||||
|
For the Three Months
|
||||||
|
Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Increase (decrease) in valuation allowance
|
$
|
(47
|
)
|
|
$
|
463
|
|
Loans receivable charged off
|
—
|
|
|
—
|
|
|
For the Three Months Ended March 31,
|
||||||
(In thousands)
|
2015
|
|
2014
|
||||
Realized investment gains (losses):
|
|
|
|
||||
Fixed maturity securities:
|
|
|
|
||||
Gains
|
$
|
4,146
|
|
|
$
|
2,062
|
|
Losses
|
(1,077
|
)
|
|
(1,598
|
)
|
||
Equity securities available for sale
|
9,702
|
|
|
6,457
|
|
||
Investment funds
|
(1,511
|
)
|
|
45,833
|
|
||
Real estate
|
—
|
|
|
—
|
|
||
Other
|
7,784
|
|
|
—
|
|
||
Total
|
19,044
|
|
|
52,754
|
|
||
Income tax expense
|
(6,665
|
)
|
|
(18,465
|
)
|
||
Total after-tax realized investment gains
|
$
|
12,379
|
|
|
$
|
34,289
|
|
Change in unrealized investment gains (losses):
|
|
|
|
||||
Fixed maturity securities
|
$
|
42,480
|
|
|
$
|
91,638
|
|
Previously impaired fixed maturity securities
|
8
|
|
|
559
|
|
||
Equity securities available for sale
|
(6,845
|
)
|
|
26,203
|
|
||
Investment funds
|
(11,107
|
)
|
|
(6,110
|
)
|
||
Total change in unrealized investment gains (losses)
|
24,536
|
|
|
112,290
|
|
||
Income tax expense
|
(8,245
|
)
|
|
(39,346
|
)
|
||
Noncontrolling interests
|
22
|
|
|
(18
|
)
|
||
Total after-tax unrealized gains
|
$
|
16,313
|
|
|
$
|
72,926
|
|
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
(In thousands)
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
March 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and government agency
|
$
|
57,281
|
|
|
$
|
340
|
|
|
$
|
71,103
|
|
|
$
|
1,489
|
|
|
$
|
128,384
|
|
|
$
|
1,829
|
|
State and municipal
|
310,510
|
|
|
1,753
|
|
|
112,892
|
|
|
2,693
|
|
|
423,402
|
|
|
4,446
|
|
||||||
Mortgage-backed securities
|
76,098
|
|
|
219
|
|
|
225,870
|
|
|
6,534
|
|
|
301,968
|
|
|
6,753
|
|
||||||
Corporate
|
1,013,347
|
|
|
5,917
|
|
|
172,712
|
|
|
13,859
|
|
|
1,186,059
|
|
|
19,776
|
|
||||||
Foreign
|
39,512
|
|
|
3,518
|
|
|
61,375
|
|
|
14,623
|
|
|
100,887
|
|
|
18,141
|
|
||||||
Fixed maturity securities
|
1,496,748
|
|
|
11,747
|
|
|
643,952
|
|
|
39,198
|
|
|
2,140,700
|
|
|
50,945
|
|
||||||
Common stocks
|
48,645
|
|
|
9,383
|
|
|
—
|
|
|
—
|
|
|
48,645
|
|
|
9,383
|
|
||||||
Preferred stocks
|
4,017
|
|
|
834
|
|
|
22,637
|
|
|
3,036
|
|
|
26,654
|
|
|
3,870
|
|
||||||
Equity securities
|
52,662
|
|
|
10,217
|
|
|
22,637
|
|
|
3,036
|
|
|
75,299
|
|
|
13,253
|
|
||||||
Total
|
$
|
1,549,410
|
|
|
$
|
21,964
|
|
|
$
|
666,589
|
|
|
$
|
42,234
|
|
|
$
|
2,215,999
|
|
|
$
|
64,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and government agency
|
$
|
84,750
|
|
|
$
|
522
|
|
|
$
|
84,850
|
|
|
$
|
2,635
|
|
|
$
|
169,600
|
|
|
$
|
3,157
|
|
State and municipal
|
158,594
|
|
|
631
|
|
|
150,284
|
|
|
3,389
|
|
|
308,878
|
|
|
4,020
|
|
||||||
Mortgage-backed securities
|
75,739
|
|
|
332
|
|
|
312,922
|
|
|
9,169
|
|
|
388,661
|
|
|
9,501
|
|
||||||
Corporate
|
1,586,238
|
|
|
8,697
|
|
|
214,628
|
|
|
16,084
|
|
|
1,800,866
|
|
|
24,781
|
|
||||||
Foreign
|
76,471
|
|
|
3,907
|
|
|
85,025
|
|
|
14,158
|
|
|
161,496
|
|
|
18,065
|
|
||||||
Fixed maturity securities
|
1,981,792
|
|
|
14,089
|
|
|
847,709
|
|
|
45,435
|
|
|
2,829,501
|
|
|
59,524
|
|
||||||
Common stocks
|
15,929
|
|
|
5,453
|
|
|
—
|
|
|
—
|
|
|
15,929
|
|
|
5,453
|
|
||||||
Preferred stocks
|
27,126
|
|
|
1,139
|
|
|
22,648
|
|
|
3,026
|
|
|
49,774
|
|
|
4,165
|
|
||||||
Equity securities
|
43,055
|
|
|
6,592
|
|
|
22,648
|
|
|
3,026
|
|
|
65,703
|
|
|
9,618
|
|
||||||
Total
|
$
|
2,024,847
|
|
|
$
|
20,681
|
|
|
$
|
870,357
|
|
|
$
|
48,461
|
|
|
$
|
2,895,204
|
|
|
$
|
69,142
|
|
($ in thousands)
|
Number of
Securities
|
|
Aggregate
Fair Value
|
|
Gross
Unrealized
Loss
|
|||||
Mortgage-backed securities
|
9
|
|
|
$
|
26,168
|
|
|
$
|
1,658
|
|
Corporate
|
5
|
|
|
2,965
|
|
|
420
|
|
||
Total
|
14
|
|
|
$
|
29,133
|
|
|
$
|
2,078
|
|
(In thousands)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
March 31, 2015
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities available for sale:
|
|
|
|
|
|
|
|
||||||||
U.S. government and government agency
|
$
|
752,467
|
|
|
$
|
—
|
|
|
$
|
752,467
|
|
|
$
|
—
|
|
State and municipal
|
4,448,704
|
|
|
—
|
|
|
4,448,704
|
|
|
—
|
|
||||
Mortgage-backed securities
|
1,198,466
|
|
|
—
|
|
|
1,198,466
|
|
|
—
|
|
||||
Corporate
|
5,212,640
|
|
|
—
|
|
|
5,210,710
|
|
|
1,930
|
|
||||
Foreign government
|
938,719
|
|
|
—
|
|
|
938,719
|
|
|
—
|
|
||||
Total fixed maturity securities available for sale
|
12,550,996
|
|
|
—
|
|
|
12,549,066
|
|
|
1,930
|
|
||||
Equity securities available for sale:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
61,100
|
|
|
52,205
|
|
|
—
|
|
|
8,895
|
|
||||
Preferred stocks
|
113,609
|
|
|
—
|
|
|
109,944
|
|
|
3,665
|
|
||||
Total equity securities available for sale
|
174,709
|
|
|
52,205
|
|
|
109,944
|
|
|
12,560
|
|
||||
Arbitrage trading account
|
972,629
|
|
|
269,697
|
|
|
630,316
|
|
|
72,616
|
|
||||
Total
|
$
|
13,698,334
|
|
|
$
|
321,902
|
|
|
$
|
13,289,326
|
|
|
$
|
87,106
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Securities sold but not yet purchased
|
$
|
99,299
|
|
|
$
|
99,299
|
|
|
$
|
—
|
|
|
$
|
—
|
|
December 31, 2014
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities available for sale:
|
|
|
|
|
|
|
|
||||||||
U.S. government and government agency
|
$
|
803,388
|
|
|
$
|
—
|
|
|
$
|
803,388
|
|
|
$
|
—
|
|
State and municipal
|
4,362,996
|
|
|
—
|
|
|
4,362,996
|
|
|
—
|
|
||||
Mortgage-backed securities
|
1,295,636
|
|
|
—
|
|
|
1,295,636
|
|
|
—
|
|
||||
Corporate
|
5,200,137
|
|
|
—
|
|
|
5,179,372
|
|
|
20,765
|
|
||||
Foreign government
|
941,826
|
|
|
—
|
|
|
941,826
|
|
|
—
|
|
||||
Total fixed maturity securities available for sale
|
12,603,983
|
|
|
—
|
|
|
12,583,218
|
|
|
20,765
|
|
||||
Equity securities available for sale:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
76,346
|
|
|
65,605
|
|
|
—
|
|
|
10,741
|
|
||||
Preferred stocks
|
94,645
|
|
|
—
|
|
|
90,932
|
|
|
3,713
|
|
||||
Total equity securities available for sale
|
170,991
|
|
|
65,605
|
|
|
90,932
|
|
|
14,454
|
|
||||
Arbitrage trading account
|
450,648
|
|
|
295,047
|
|
|
154,881
|
|
|
720
|
|
||||
Total
|
$
|
13,225,622
|
|
|
$
|
360,652
|
|
|
$
|
12,829,031
|
|
|
$
|
35,939
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Securities sold but not yet purchased
|
$
|
106,079
|
|
|
$
|
106,074
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
|
|
Gains (Losses) Included in
|
|
|
||||||||||||||||||||||||||
(In thousands)
|
Beginning
Balance
|
|
Earnings
|
|
Other
Comprehensive
Income
|
|
Purchases
|
|
(Sales)
|
|
Maturities
|
|
Transfer in (out)
|
|
Ending
Balance
|
||||||||||||||||
Three months ended March 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed maturities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate
|
$
|
20,765
|
|
|
$
|
15
|
|
|
$
|
180
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,673
|
)
|
|
$
|
(17,357
|
)
|
|
$
|
1,930
|
|
Total
|
20,765
|
|
|
15
|
|
|
180
|
|
|
—
|
|
|
—
|
|
|
(1,673
|
)
|
|
(17,357
|
)
|
|
1,930
|
|
||||||||
Equity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stocks
|
10,741
|
|
|
—
|
|
|
(1,846
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,895
|
|
||||||||
Preferred stocks
|
3,713
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,665
|
|
||||||||
Total
|
14,454
|
|
|
(48
|
)
|
|
(1,846
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,560
|
|
||||||||
Arbitrage trading account
|
720
|
|
|
(277
|
)
|
|
—
|
|
|
72,173
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72,616
|
|
||||||||
Total
|
$
|
35,939
|
|
|
$
|
(310
|
)
|
|
$
|
(1,666
|
)
|
|
$
|
72,173
|
|
|
$
|
—
|
|
|
$
|
(1,673
|
)
|
|
$
|
(17,357
|
)
|
|
$
|
87,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Securities sold but not yet purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Year ended December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed maturities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate
|
$
|
42,864
|
|
|
$
|
47
|
|
|
$
|
(3,711
|
)
|
|
$
|
238
|
|
|
$
|
(15,244
|
)
|
|
$
|
(3,429
|
)
|
|
$
|
—
|
|
|
$
|
20,765
|
|
Total
|
42,864
|
|
|
47
|
|
|
(3,711
|
)
|
|
238
|
|
|
(15,244
|
)
|
|
(3,429
|
)
|
|
—
|
|
|
20,765
|
|
||||||||
Equity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stocks
|
1,238
|
|
|
—
|
|
|
(911
|
)
|
|
11,343
|
|
|
(929
|
)
|
|
—
|
|
|
—
|
|
|
10,741
|
|
||||||||
Preferred stocks
|
3,752
|
|
|
(17
|
)
|
|
—
|
|
|
3,430
|
|
|
(3,452
|
)
|
|
—
|
|
|
—
|
|
|
3,713
|
|
||||||||
Total
|
4,990
|
|
|
(17
|
)
|
|
(911
|
)
|
|
14,773
|
|
|
(4,381
|
)
|
|
—
|
|
|
—
|
|
|
14,454
|
|
||||||||
Arbitrage trading account
|
1,780
|
|
|
2,274
|
|
|
—
|
|
|
4,942
|
|
|
(14,073
|
)
|
|
—
|
|
|
5,797
|
|
|
720
|
|
||||||||
Total
|
$
|
49,634
|
|
|
$
|
2,304
|
|
|
$
|
(4,622
|
)
|
|
$
|
19,953
|
|
|
$
|
(33,698
|
)
|
|
$
|
(3,429
|
)
|
|
$
|
5,797
|
|
|
$
|
35,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Securities sold but not yet purchased
|
$
|
—
|
|
|
$
|
(20
|
)
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
For the Three Months
|
||||||
|
Ended March 31,
|
||||||
(In thousands)
|
2015
|
|
2014
|
||||
Written premiums:
|
|
|
|
||||
Direct
|
$
|
1,647,341
|
|
|
$
|
1,565,188
|
|
Assumed
|
204,464
|
|
|
240,079
|
|
||
Ceded
|
(276,403
|
)
|
|
(279,387
|
)
|
||
Total net premiums written
|
$
|
1,575,402
|
|
|
$
|
1,525,880
|
|
|
|
|
|
||||
Earned premiums:
|
|
|
|
||||
Direct
|
$
|
1,524,736
|
|
|
$
|
1,381,572
|
|
Assumed
|
203,342
|
|
|
225,762
|
|
||
Ceded
|
(256,065
|
)
|
|
(243,722
|
)
|
||
Total net premiums earned
|
$
|
1,472,013
|
|
|
$
|
1,363,612
|
|
|
|
|
|
||||
Ceded losses incurred
|
$
|
118,391
|
|
|
$
|
100,684
|
|
Ceded commissions earned
|
$
|
43,651
|
|
|
$
|
37,170
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||||
(In thousands)
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities
|
$
|
12,652,269
|
|
|
$
|
12,673,353
|
|
|
$
|
12,705,160
|
|
|
$
|
12,725,806
|
|
Equity securities available for sale
|
174,709
|
|
|
174,709
|
|
|
170,991
|
|
|
170,991
|
|
||||
Arbitrage trading account
|
972,629
|
|
|
972,629
|
|
|
450,648
|
|
|
450,648
|
|
||||
Loans receivable
|
280,769
|
|
|
283,836
|
|
|
322,012
|
|
|
325,219
|
|
||||
Cash and cash equivalents
|
614,695
|
|
|
614,695
|
|
|
674,441
|
|
|
674,441
|
|
||||
Trading account receivables from brokers and clearing organizations
|
—
|
|
|
—
|
|
|
371,034
|
|
|
371,034
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Due to broker
|
18,260
|
|
|
18,260
|
|
|
23,133
|
|
|
23,133
|
|
||||
Trading account payable to brokers and clearing organizations
|
165,420
|
|
|
165,420
|
|
|
—
|
|
|
—
|
|
||||
Trading account securities sold but not yet purchased
|
99,299
|
|
|
99,299
|
|
|
106,079
|
|
|
106,079
|
|
||||
Subordinated debentures
|
340,125
|
|
|
354,480
|
|
|
340,060
|
|
|
332,640
|
|
||||
Senior notes and other debt
|
2,112,456
|
|
|
2,388,949
|
|
|
2,115,527
|
|
|
2,344,292
|
|
($ in thousands)
|
Units
|
|
Fair Value
|
|||
Three months ended March 31,
|
|
|
|
|||
2015
|
10,000
|
|
|
$
|
503
|
|
2014
|
16,950
|
|
|
$
|
689
|
|
•
|
Insurance-Domestic
- commercial insurance business, including excess and surplus lines and admitted lines, primarily throughout the United States;
|
•
|
Insurance-International
- insurance business primarily in the United Kingdom, Continental Europe, South America, Canada, Scandinavia, and Australia; and
|
•
|
Reinsurance-Global
- reinsurance business on a facultative and treaty basis, primarily in the United States, United Kingdom, Continental Europe, Australia, and the Asia-Pacific Region.
|
|
Revenues
|
|
|
|
|
||||||||||||||||||
(In thousands)
|
Earned
Premiums
|
|
Investment
Income
|
|
Other
|
|
Total
|
|
Pre-Tax
Income
(Loss)
|
|
Net
Income
(Loss) to Common Stockholders
|
||||||||||||
Three months ended March 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Insurance-Domestic
|
$
|
1,117,542
|
|
|
$
|
82,652
|
|
|
$
|
25,575
|
|
|
$
|
1,225,769
|
|
|
$
|
166,866
|
|
|
$
|
114,910
|
|
Insurance-International
|
193,734
|
|
|
16,432
|
|
|
—
|
|
|
210,166
|
|
|
21,303
|
|
|
15,129
|
|
||||||
Reinsurance-Global
|
160,737
|
|
|
17,041
|
|
|
—
|
|
|
177,778
|
|
|
20,262
|
|
|
14,500
|
|
||||||
Corporate and eliminations (1)
|
—
|
|
|
8,114
|
|
|
103,808
|
|
|
111,922
|
|
|
(58,758
|
)
|
|
(38,611
|
)
|
||||||
Net investment gains
|
—
|
|
|
—
|
|
|
19,044
|
|
|
19,044
|
|
|
19,044
|
|
|
12,379
|
|
||||||
Total
|
$
|
1,472,013
|
|
|
$
|
124,239
|
|
|
$
|
148,427
|
|
|
$
|
1,744,679
|
|
|
$
|
168,717
|
|
|
$
|
118,307
|
|
Three months ended March 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Insurance-Domestic
|
$
|
1,003,507
|
|
|
$
|
118,137
|
|
|
$
|
28,766
|
|
|
$
|
1,150,410
|
|
|
$
|
202,185
|
|
|
$
|
138,036
|
|
Insurance-International
|
185,324
|
|
|
16,652
|
|
|
—
|
|
|
201,976
|
|
|
17,747
|
|
|
12,468
|
|
||||||
Reinsurance-Global
|
174,781
|
|
|
27,578
|
|
|
—
|
|
|
202,359
|
|
|
32,074
|
|
|
22,392
|
|
||||||
Corporate and eliminations (1)
|
—
|
|
|
6,344
|
|
|
93,063
|
|
|
99,407
|
|
|
(57,175
|
)
|
|
(37,513
|
)
|
||||||
Net investment gains
|
—
|
|
|
—
|
|
|
52,754
|
|
|
52,754
|
|
|
52,754
|
|
|
34,290
|
|
||||||
Total
|
$
|
1,363,612
|
|
|
$
|
168,711
|
|
|
$
|
174,583
|
|
|
$
|
1,706,906
|
|
|
$
|
247,585
|
|
|
$
|
169,673
|
|
(In thousands)
|
March 31, 2015
|
|
December 31, 2014
|
||||
Insurance-Domestic
|
$
|
16,011,219
|
|
|
$
|
16,036,513
|
|
Insurance-International
|
1,817,696
|
|
|
1,876,347
|
|
||
Reinsurance-Global
|
2,607,238
|
|
|
2,708,090
|
|
||
Corporate and eliminations
|
1,410,899
|
|
|
1,058,289
|
|
||
Total
|
$
|
21,847,052
|
|
|
$
|
21,679,239
|
|
|
For the Three Months
|
||||||
|
Ended March 31,
|
||||||
(In thousands)
|
2015
|
|
2014
|
||||
Insurance-Domestic:
|
|
|
|
||||
Other liability
|
$
|
372,039
|
|
|
$
|
339,633
|
|
Workers’ compensation
|
292,617
|
|
|
263,032
|
|
||
Short-tail lines
|
227,726
|
|
|
204,766
|
|
||
Commercial automobile
|
134,957
|
|
|
124,368
|
|
||
Professional liability
|
90,203
|
|
|
71,708
|
|
||
Total
|
1,117,542
|
|
|
1,003,507
|
|
||
|
|
|
|
||||
Insurance-International:
|
|
|
|
||||
Other liability
|
24,865
|
|
|
19,375
|
|
||
Workers’ compensation
|
22,121
|
|
|
17,325
|
|
||
Short-tail lines
|
95,364
|
|
|
96,274
|
|
||
Commercial automobile
|
30,603
|
|
|
27,593
|
|
||
Professional liability
|
20,781
|
|
|
24,757
|
|
||
Total
|
193,734
|
|
|
185,324
|
|
||
|
|
|
|
||||
Reinsurance-Global:
|
|
|
|
||||
Casualty
|
112,816
|
|
|
125,603
|
|
||
Property
|
47,921
|
|
|
49,178
|
|
||
Total
|
160,737
|
|
|
174,781
|
|
||
|
|
|
|
||||
Total
|
$
|
1,472,013
|
|
|
$
|
1,363,612
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
(In thousands)
|
2015
|
|
2014
|
||||
Insurance-Domestic
|
$
|
6,875,226
|
|
|
$
|
6,767,374
|
|
Insurance-International
|
737,889
|
|
|
750,613
|
|
||
Reinsurance-Global
|
1,444,997
|
|
|
1,452,654
|
|
||
Net reserves for losses and loss expenses
|
9,058,112
|
|
|
8,970,641
|
|
||
Ceded reserves for losses and loss expenses
|
1,416,842
|
|
|
1,399,060
|
|
||
Gross reserves for losses and loss expenses
|
$
|
10,474,954
|
|
|
$
|
10,369,701
|
|
(In thousands)
|
Reported Case
Reserves
|
|
Incurred But
Not Reported
|
|
Total
|
||||||
March 31, 2015
|
|
|
|
|
|
||||||
Other liability
|
$
|
1,037,025
|
|
|
$
|
1,817,434
|
|
|
$
|
2,854,459
|
|
Workers’ compensation (1)
|
1,632,649
|
|
|
1,207,815
|
|
|
2,840,464
|
|
|||
Professional liability
|
320,807
|
|
|
447,972
|
|
|
768,779
|
|
|||
Commercial automobile
|
325,213
|
|
|
216,869
|
|
|
542,082
|
|
|||
Short-tail lines
|
326,884
|
|
|
280,447
|
|
|
607,331
|
|
|||
Total primary
|
3,642,578
|
|
|
3,970,537
|
|
|
7,613,115
|
|
|||
Reinsurance (1)
|
610,189
|
|
|
834,808
|
|
|
1,444,997
|
|
|||
Total
|
$
|
4,252,767
|
|
|
$
|
4,805,345
|
|
|
$
|
9,058,112
|
|
December 31, 2014
|
|
|
|
|
|
||||||
Other liability
|
$
|
1,035,442
|
|
|
$
|
1,785,598
|
|
|
$
|
2,821,040
|
|
Workers’ compensation (1)
|
1,603,310
|
|
|
1,201,117
|
|
|
2,804,427
|
|
|||
Professional liability
|
308,887
|
|
|
453,557
|
|
|
762,444
|
|
|||
Commercial automobile
|
319,700
|
|
|
203,085
|
|
|
522,785
|
|
|||
Short-tail lines
|
330,010
|
|
|
277,281
|
|
|
607,291
|
|
|||
Total primary
|
3,597,349
|
|
|
3,920,638
|
|
|
7,517,987
|
|
|||
Reinsurance (1)
|
603,851
|
|
|
848,803
|
|
|
1,452,654
|
|
|||
Total
|
$
|
4,201,200
|
|
|
$
|
4,769,441
|
|
|
$
|
8,970,641
|
|
(In thousands)
|
2015
|
|
2014
|
||||
Net decrease in prior year loss reserves
|
$
|
2,499
|
|
|
$
|
19,035
|
|
Increase in prior year earned premiums
|
9,304
|
|
|
5,865
|
|
||
Net favorable prior year development
|
$
|
11,803
|
|
|
$
|
24,900
|
|
(Dollars in thousands)
|
Number of
Securities
|
|
Aggregate
Fair Value
|
|
Unrealized
Loss
|
|||||
Unrealized loss less than 20% of amortized cost
|
314
|
|
|
$
|
2,078,607
|
|
|
$
|
29,710
|
|
Unrealized loss of 20% or greater of amortized cost:
|
|
|
|
|
|
|||||
Less than twelve months
|
2
|
|
|
3,484
|
|
|
1,151
|
|
||
Twelve months and longer
|
12
|
|
|
58,609
|
|
|
20,084
|
|
||
Total
|
328
|
|
|
$
|
2,140,700
|
|
|
$
|
50,945
|
|
(Dollars in thousands)
|
Number of
Securities
|
|
Aggregate
Fair Value
|
|
Unrealized
Loss
|
|||||
Mortgage-backed securities
|
9
|
|
|
$
|
26,168
|
|
|
$
|
1,658
|
|
Corporate
|
5
|
|
|
2,965
|
|
|
420
|
|
||
Total
|
14
|
|
|
$
|
29,133
|
|
|
$
|
2,078
|
|
(In thousands)
|
Carrying
Value
|
|
Percent
of Total
|
|||
Pricing source:
|
|
|
|
|||
Independent pricing services
|
$
|
12,357,001
|
|
|
98.5
|
%
|
Syndicate manager
|
73,828
|
|
|
0.6
|
|
|
Directly by the Company based on:
|
|
|
|
|||
Observable data
|
118,236
|
|
|
0.9
|
|
|
Cash flow model
|
1,931
|
|
|
* -
|
||
Total
|
$
|
12,550,996
|
|
|
100.0
|
%
|
($ in thousands)
|
2015
|
|
2014
|
||||
Insurance-Domestic:
|
|
|
|
||||
Gross premiums written
|
$
|
1,409,177
|
|
|
$
|
1,342,942
|
|
Net premiums written
|
1,193,631
|
|
|
1,126,381
|
|
||
Net premiums earned
|
1,117,542
|
|
|
1,003,507
|
|
||
Loss ratio
|
61.6
|
%
|
|
59.7
|
%
|
||
Expense ratio
|
31.2
|
%
|
|
32.5
|
%
|
||
GAAP combined ratio
|
92.8
|
%
|
|
92.2
|
%
|
||
Insurance-International:
|
|
|
|
||||
Gross premiums written
|
$
|
283,226
|
|
|
$
|
277,186
|
|
Net premiums written
|
231,508
|
|
|
225,821
|
|
||
Net premiums earned
|
193,734
|
|
|
185,324
|
|
||
Loss ratio
|
57.9
|
%
|
|
59.2
|
%
|
||
Expense ratio
|
39.1
|
%
|
|
40.1
|
%
|
||
GAAP combined ratio
|
97.0
|
%
|
|
99.3
|
%
|
||
Reinsurance-Global:
|
|
|
|
||||
Gross premiums written
|
$
|
159,402
|
|
|
$
|
185,139
|
|
Net premiums written
|
150,263
|
|
|
173,678
|
|
||
Net premiums earned
|
160,737
|
|
|
174,781
|
|
||
Loss ratio
|
62.2
|
%
|
|
64.6
|
%
|
||
Expense ratio
|
35.8
|
%
|
|
32.8
|
%
|
||
GAAP combined ratio
|
98.0
|
%
|
|
97.4
|
%
|
||
Consolidated:
|
|
|
|
||||
Gross premiums written
|
$
|
1,851,805
|
|
|
$
|
1,805,267
|
|
Net premiums written
|
1,575,402
|
|
|
1,525,880
|
|
||
Net premiums earned
|
1,472,013
|
|
|
1,363,612
|
|
||
Loss ratio
|
61.2
|
%
|
|
60.3
|
%
|
||
Expense ratio
|
32.7
|
%
|
|
33.6
|
%
|
||
GAAP combined ratio
|
93.9
|
%
|
|
93.9
|
%
|
(In thousands, except per share data)
|
2015
|
|
2014
|
||||
Net income to common stockholders
|
$
|
118,307
|
|
|
$
|
169,673
|
|
Weighted average diluted shares
|
132,484
|
|
|
135,429
|
|
||
Net income per diluted share
|
$
|
0.89
|
|
|
$
|
1.25
|
|
•
|
Insurance-Domestic gross premiums increased 5% to $1,409 million in 2015 from $1,343 million in 2014. Gross premiums increased $24 million (25%) for professional liability, $19 million (5%) for other liability, $16 million (6%) for short-tail lines, $4 million (3%) for commercial auto and $3 million (1%) for workers' compensation.
|
•
|
Insurance-International gross premiums increased 2% to $283 million in 2015 from $277 million in 2014. Gross premiums increased $11 million (39%) for other liability, $5 million (30%) for workers' compensation and $2 million (7%) for commercial auto. Insurance-International gross premiums decreased $9 million (5%) for short-tail lines and $3 million (12%) for professional liability. In local currency terms, international gross premiums increased 14% in 2015.
|
•
|
Reinsurance-Global gross premiums decreased 14% to $159 million in 2015 from $185 million in 2014, due to increasingly competitive conditions. Gross premiums written decreased $14 million (11%) for casualty lines and $12 million (20%) for property lines.
|
|
Amount
|
|
Average Annualized
Yield
|
||||||||||
(In thousands)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||
Fixed maturity securities, including cash and cash equivalents and loans receivable
|
$
|
108,129
|
|
|
$
|
106,898
|
|
|
3.3
|
%
|
|
3.4
|
%
|
Investment funds
|
6,061
|
|
|
53,799
|
|
|
2.0
|
|
|
21.1
|
|
||
Arbitrage trading account
|
8,979
|
|
|
5,519
|
|
|
6.8
|
|
|
4.6
|
|
||
Real estate
|
2,767
|
|
|
3,102
|
|
|
1.5
|
|
|
1.7
|
|
||
Equity securities available for sale
|
1,180
|
|
|
1,946
|
|
|
2.9
|
|
|
3.7
|
|
||
Gross investment income
|
127,116
|
|
|
171,264
|
|
|
3.2
|
|
|
4.5
|
|
||
Investment expenses
|
(2,877
|
)
|
|
(2,553
|
)
|
|
|
|
|
||||
Total
|
$
|
124,239
|
|
|
$
|
168,711
|
|
|
3.1
|
|
|
4.5
|
|
•
|
Insurance-Domestic - The loss ratio of 61.6% in 2015 was 1.9 points higher than the loss ratio of 59.7% in 2014. Catastrophe losses were $14 million in 2015 compared with $13 million in 2014. Favorable prior year reserve development was $12 million in 2015 compared with $28 million in 2014. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.2 points to 61.4% in 2015 from 61.2% in 2014.
|
•
|
Insurance-International - The loss ratio of 57.9% in 2015 was 1.3 points lower than the loss ratio of 59.2% in 2014. There were no catastrophe losses in 2015 compared with $1 million in 2014, a difference of 0.5 loss ratio points. There was no change in prior year reserve development in 2015 compared with an increase in prior year reserves of $2 million in 2014, a difference of 1.6 loss ratio points. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.8 points to 57.9% in 2015 from 57.1% in 2014.
|
•
|
Reinsurance-Global - The loss ratio of 62.2% in 2015 was 2.4 points lower than the loss ratio of 64.6% in 2014. There was no change in prior year reserves in 2015 compared with an increase in prior year reserves of $1 million in 2014, a difference of 0.4 loss ratio points. The loss ratio excluding catastrophe losses and prior year reserve development decreased 2.0 points to 62.3% in 2015 from 64.3% in 2014.
|
(In thousands)
|
2015
|
|
2014
|
||||
Underwriting expenses
|
$
|
482,060
|
|
|
$
|
458,138
|
|
Service expenses
|
31,084
|
|
|
22,257
|
|
||
Net foreign currency gains
|
(567
|
)
|
|
(334
|
)
|
||
Other costs and expenses
|
38,469
|
|
|
35,105
|
|
||
Total
|
$
|
551,046
|
|
|
$
|
515,166
|
|
($ in thousands)
|
Carrying
Value
|
|
Percent
of Total
|
|||
Fixed maturity securities:
|
|
|
|
|||
U.S. government and government agencies
|
$
|
752,467
|
|
|
4.5
|
%
|
State and municipal:
|
|
|
|
|||
Special revenue
|
2,491,791
|
|
|
14.9
|
|
|
State general obligation
|
714,723
|
|
|
4.3
|
|
|
Pre-refunded (1)
|
556,195
|
|
|
3.3
|
|
|
Corporate backed
|
418,080
|
|
|
2.5
|
|
|
Local general obligation
|
341,889
|
|
|
2.1
|
|
|
Total state and municipal
|
4,522,678
|
|
|
27.1
|
|
|
Mortgage-backed securities:
|
|
|
|
|||
Agency
|
963,796
|
|
|
5.8
|
|
|
Residential-Prime
|
116,486
|
|
|
0.7
|
|
|
Commercial
|
72,884
|
|
|
0.4
|
|
|
Residential-Alt A
|
67,600
|
|
|
0.4
|
|
|
Total mortgage-backed securities
|
1,220,766
|
|
|
7.3
|
|
|
Corporate:
|
|
|
|
|||
Asset-backed
|
1,934,916
|
|
|
11.6
|
|
|
Industrial
|
1,780,211
|
|
|
10.7
|
|
|
Financial
|
1,203,139
|
|
|
7.2
|
|
|
Utilities
|
195,297
|
|
|
1.2
|
|
|
Other
|
104,076
|
|
|
0.6
|
|
|
Total corporate
|
5,217,639
|
|
|
31.3
|
|
|
Foreign government and foreign government agencies
|
938,719
|
|
|
5.6
|
|
|
Total fixed maturity securities
|
12,652,269
|
|
|
75.8
|
|
|
Equity securities
|
|
|
|
|||
Preferred stocks
|
113,609
|
|
|
0.7
|
|
|
Common stocks
|
61,100
|
|
|
0.4
|
|
|
Total equity securities
|
174,709
|
|
|
1.1
|
|
|
Investment funds
|
1,214,272
|
|
|
7.3
|
|
|
Arbitrage trading account
|
972,629
|
|
|
5.8
|
|
|
Real estate
|
761,856
|
|
|
4.6
|
|
|
Cash and cash equivalents
|
614,695
|
|
|
3.7
|
|
|
Loans receivable
|
280,769
|
|
|
1.7
|
|
|
Total investments
|
$
|
16,671,199
|
|
|
100.0
|
%
|
(In thousands)
|
Carrying Value
|
||
Australia
|
$
|
246,168
|
|
United Kingdom
|
181,002
|
|
|
Canada
|
165,311
|
|
|
Argentina
|
144,529
|
|
|
Germany
|
54,802
|
|
|
Brazil
|
53,160
|
|
|
Supranational (1)
|
47,729
|
|
|
Norway
|
36,351
|
|
|
Singapore
|
6,204
|
|
|
Uruguay
|
3,463
|
|
|
Total
|
$
|
938,719
|
|
Item 3.
|
Quantitative and Qualitative Disclosure About Market Risk
|
Item 4.
|
Controls and Procedures
|
|
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
|
|||||
January 2015
|
9,400
|
|
|
$
|
49.77
|
|
|
9,400
|
|
|
7,176,717
|
|
February 2015
|
1,248,549
|
|
|
49.79
|
|
|
1,248,549
|
|
|
5,928,168
|
|
|
March 2015
|
572,541
|
|
|
49.93
|
|
|
572,541
|
|
|
5,355,627
|
|
Number
|
|
|
(10.1)
|
|
Form of 2015 Performance Unit Award Agreement under the W. R. Berkley Corporation 2014 Long-Term Incentive Plan.
|
|
|
|
(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.
|
|
|
W. R. BERKLEY CORPORATION
|
Date:
|
May 4, 2015
|
/s/ William R. Berkley
|
|
|
William R. Berkley
|
|
|
Chairman of the Board and Chief Executive Officer
|
|
|
|
Date:
|
May 4, 2015
|
/s/ Eugene G. Ballard
|
|
|
Eugene G. Ballard
|
|
|
Senior Vice President - Chief Financial Officer
|
|
/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
|