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Iowa
|
|
45-2302834
|
|
|
|
|
(State of Incorporation)
|
|
(IRS Employer Identification No.)
|
|
|
Large accelerated filer
o
|
|
Accelerated filer
R
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
|
|
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|
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|
|
|
•
|
The frequency and severity of claims, including those related to catastrophe losses and the impact those claims have on our loss reserve adequacy;
|
•
|
The adequacy of our reserves for property and casualty insurance losses and loss settlement expenses and our life insurance reserve for future policy benefits;
|
•
|
Geographic concentration risk in both property and casualty insurance and life insurance segments;
|
•
|
Unauthorized data access, cyber-attacks and other security breaches;
|
•
|
Occurrence of catastrophic events, occurrence of significant severe weather conditions, climate change, acts of terrorism, acts of war and pandemics;
|
•
|
Developments in the domestic and global financial markets and other-than-temporary impairment losses that could affect our investment portfolio;
|
•
|
Our ability to effectively underwrite and adequately price insured risks;
|
•
|
The calculation and recovery of deferred policy acquisition costs ("DAC");
|
•
|
The valuation of pension and other postretirement benefit obligations;
|
•
|
Our relationship with our agencies and agents;
|
•
|
Our relationship with and financial strength of our reinsurers;
|
•
|
Our exposure to international catastrophes through our assumed reinsurance program;
|
•
|
Lowering of one or more of the financial strength ratings of our operating subsidiaries or our issuer credit ratings and the adverse impact such action may have on our premium writings, policy retention, profitability and liquidity;
|
•
|
Changes in general economic conditions, interest rates, industry trends, increase in competition and significant industry developments;
|
•
|
Competitive, legal, regulatory or tax changes that affect the distribution cost or demand for our products;
|
•
|
Litigation or regulatory actions that could require us to pay significant damages or change the way we do business;
|
•
|
Governmental actions, policies and regulations, including, but not limited to, domestic health care reform, financial services regulatory reform, corporate governance, new laws or regulations or court decisions interpreting existing laws and regulations or policy provisions; and
|
•
|
NASDAQ policies or regulations relating to corporate governance and the cost to comply.
|
United Fire Group, Inc.
Consolidated Balance Sheets
|
|||||||
(In Thousands, Except Share Data)
|
June 30,
2014 |
|
December 31,
2013 |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Investments
|
|
|
|
||||
Fixed maturities
|
|
|
|
||||
Held-to-maturity, at amortized cost (fair value $640 in 2014 and $669 in 2013)
|
$
|
630
|
|
|
$
|
656
|
|
Available-for-sale, at fair value (amortized cost $2,749,458 in 2014 and $2,733,557 in 2013)
|
2,824,018
|
|
|
2,751,256
|
|
||
Trading securities, at fair value (amortized cost $15,467 in 2014 and $8,049 in 2013)
|
18,305
|
|
|
9,940
|
|
||
Equity securities
|
|
|
|
||||
Available-for-sale, at fair value (cost $71,685 in 2014 and $70,957 in 2013)
|
239,244
|
|
|
229,368
|
|
||
Trading securities, at fair value (cost $2,740 in 2014 and $2,367 in 2013)
|
3,206
|
|
|
2,487
|
|
||
Mortgage loans
|
4,313
|
|
|
4,423
|
|
||
Policy loans
|
6,200
|
|
|
6,261
|
|
||
Other long-term investments
|
48,707
|
|
|
44,946
|
|
||
Short-term investments
|
475
|
|
|
800
|
|
||
|
3,145,098
|
|
|
3,050,137
|
|
||
Cash and cash equivalents
|
90,276
|
|
|
92,193
|
|
||
Accrued investment income
|
27,159
|
|
|
27,923
|
|
||
Premiums receivable (net of allowance for doubtful accounts of $993 in 2014 and $896 in 2013)
|
268,094
|
|
|
218,635
|
|
||
Deferred policy acquisition costs
|
143,314
|
|
|
150,092
|
|
||
Property and equipment (primarily land and buildings, at cost, less accumulated depreciation of $39,109 in 2014 and $36,972 in 2013)
|
48,001
|
|
|
47,218
|
|
||
Reinsurance receivables and recoverables
|
81,314
|
|
|
87,451
|
|
||
Prepaid reinsurance premiums
|
3,770
|
|
|
3,160
|
|
||
Income taxes receivable
|
3,891
|
|
|
1,786
|
|
||
Goodwill and intangible assets
|
26,662
|
|
|
27,047
|
|
||
Other assets
|
14,331
|
|
|
15,030
|
|
||
TOTAL ASSETS
|
$
|
3,851,910
|
|
|
$
|
3,720,672
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Future policy benefits and losses, claims and loss settlement expenses
|
|
|
|
||||
Property and casualty insurance
|
$
|
981,927
|
|
|
$
|
960,651
|
|
Life insurance
|
1,470,647
|
|
|
1,472,132
|
|
||
Unearned premiums
|
395,146
|
|
|
340,464
|
|
||
Accrued expenses and other liabilities
|
140,058
|
|
|
142,677
|
|
||
Deferred income taxes
|
37,866
|
|
|
21,915
|
|
||
TOTAL LIABILITIES
|
$
|
3,025,644
|
|
|
$
|
2,937,839
|
|
Stockholders’ Equity
|
|
|
|
||||
Common stock, $0.001 par value; authorized 75,000,000 shares; 25,240,105 and 25,360,893 shares issued and outstanding in 2014 and 2013, respectively
|
$
|
25
|
|
|
$
|
25
|
|
Additional paid-in capital
|
208,366
|
|
|
211,574
|
|
||
Retained earnings
|
498,470
|
|
|
484,084
|
|
||
Accumulated other comprehensive income, net of tax
|
119,405
|
|
|
87,150
|
|
||
TOTAL STOCKHOLDERS’ EQUITY
|
$
|
826,266
|
|
|
$
|
782,833
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
3,851,910
|
|
|
$
|
3,720,672
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In Thousands, Except Share Data)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Net premiums earned
|
$
|
201,827
|
|
|
$
|
186,367
|
|
|
$
|
395,168
|
|
|
$
|
363,184
|
|
Investment income, net of investment expenses
|
27,603
|
|
|
29,019
|
|
|
54,365
|
|
|
55,483
|
|
||||
Net realized investment gains (includes reclassifications for net unrealized investment gains on available-for-sale securities of $1,606 and $3,088 in 2014; and $4,417 and $5,653 in 2013; previously included in accumulated other comprehensive income (loss))
|
2,708
|
|
|
4,151
|
|
|
4,902
|
|
|
6,060
|
|
||||
Other income
|
535
|
|
|
182
|
|
|
1,142
|
|
|
297
|
|
||||
Total revenues
|
$
|
232,673
|
|
|
$
|
219,719
|
|
|
$
|
455,577
|
|
|
$
|
425,024
|
|
Benefits, Losses and Expenses
|
|
|
|
|
|
|
|
||||||||
Losses and loss settlement expenses
|
$
|
142,716
|
|
|
$
|
120,435
|
|
|
$
|
267,953
|
|
|
$
|
217,905
|
|
Increase in liability for future policy benefits
|
8,077
|
|
|
9,869
|
|
|
15,898
|
|
|
18,105
|
|
||||
Amortization of deferred policy acquisition costs
|
40,196
|
|
|
36,708
|
|
|
79,730
|
|
|
74,789
|
|
||||
Other underwriting expenses (includes reclassifications for employee benefit costs of $768 and $1,536 in 2014; and $1,243 and $2,485 in 2013; previously included in accumulated other comprehensive income (loss))
|
20,776
|
|
|
23,308
|
|
|
47,204
|
|
|
45,656
|
|
||||
Interest on policyholders’ accounts
|
7,852
|
|
|
9,081
|
|
|
15,839
|
|
|
18,401
|
|
||||
Total benefits, losses and expenses
|
$
|
219,617
|
|
|
$
|
199,401
|
|
|
$
|
426,624
|
|
|
$
|
374,856
|
|
Income before income taxes
|
$
|
13,056
|
|
|
$
|
20,318
|
|
|
$
|
28,953
|
|
|
$
|
50,168
|
|
Federal income tax expense (includes reclassifications of $293 and $543 in 2014; and $1,111 and $1,109 in 2013; previously included in accumulated other comprehensive income (loss))
|
2,371
|
|
|
4,822
|
|
|
4,937
|
|
|
12,279
|
|
||||
Net income
|
$
|
10,685
|
|
|
$
|
15,496
|
|
|
$
|
24,016
|
|
|
$
|
37,889
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Change in net unrealized appreciation on investments
|
$
|
27,108
|
|
|
$
|
(51,782
|
)
|
|
$
|
51,177
|
|
|
$
|
(37,294
|
)
|
Change in liability for underfunded employee benefit plans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other comprehensive income (loss), before tax and reclassification adjustments
|
$
|
27,108
|
|
|
$
|
(51,782
|
)
|
|
$
|
51,177
|
|
|
$
|
(37,294
|
)
|
Income tax effect
|
(9,488
|
)
|
|
18,115
|
|
|
(17,913
|
)
|
|
13,045
|
|
||||
Other comprehensive income (loss), after tax, before reclassification adjustments
|
$
|
17,620
|
|
|
$
|
(33,667
|
)
|
|
$
|
33,264
|
|
|
$
|
(24,249
|
)
|
Reclassification adjustment for net realized investment gains included in income
|
$
|
(1,606
|
)
|
|
$
|
(4,417
|
)
|
|
$
|
(3,088
|
)
|
|
$
|
(5,653
|
)
|
Reclassification adjustment for employee benefit costs included in expense
|
768
|
|
|
1,243
|
|
|
1,536
|
|
|
2,485
|
|
||||
Total reclassification adjustments, before tax
|
$
|
(838
|
)
|
|
$
|
(3,174
|
)
|
|
$
|
(1,552
|
)
|
|
$
|
(3,168
|
)
|
Income tax effect
|
293
|
|
|
1,111
|
|
|
$
|
543
|
|
|
$
|
1,109
|
|
||
Total reclassification adjustments, after tax
|
$
|
(545
|
)
|
|
$
|
(2,063
|
)
|
|
$
|
(1,009
|
)
|
|
$
|
(2,059
|
)
|
Comprehensive income (loss)
|
$
|
27,760
|
|
|
$
|
(20,234
|
)
|
|
$
|
56,271
|
|
|
$
|
11,581
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
25,330,066
|
|
|
25,297,718
|
|
|
25,351,056
|
|
|
25,271,752
|
|
||||
Basic earnings per common share
|
$
|
0.42
|
|
|
$
|
0.61
|
|
|
$
|
0.95
|
|
|
$
|
1.50
|
|
Diluted earnings per common share
|
0.42
|
|
|
0.61
|
|
|
0.94
|
|
|
1.49
|
|
(In Thousands, Except Share Data)
|
Six Months Ended June 30, 2014
|
||
|
|
||
Common stock
|
|
||
Balance, beginning of year
|
$
|
25
|
|
Shares repurchased (201,516 shares)
|
—
|
|
|
Shares issued for stock-based awards (69,050 shares)
|
—
|
|
|
Balance, end of period
|
$
|
25
|
|
|
|
||
Additional paid-in capital
|
|
||
Balance, beginning of year
|
$
|
211,574
|
|
Compensation expense and related tax benefit for stock-based award grants
|
902
|
|
|
Shares repurchased
|
(5,567
|
)
|
|
Shares issued for stock-based awards
|
1,457
|
|
|
Balance, end of period
|
$
|
208,366
|
|
|
|
||
Retained earnings
|
|
||
Balance, beginning of year
|
$
|
484,084
|
|
Net income
|
24,016
|
|
|
Dividends on common stock ($0.38 per share)
|
(9,630
|
)
|
|
Balance, end of period
|
$
|
498,470
|
|
|
|
||
Accumulated other comprehensive income, net of tax
|
|
||
Balance, beginning of year
|
$
|
87,150
|
|
Change in net unrealized investment appreciation
(1)
|
31,257
|
|
|
Change in liability for underfunded employee benefit plans
(2)
|
998
|
|
|
Balance, end of period
|
$
|
119,405
|
|
|
|
||
Summary of changes
|
|
||
Balance, beginning of year
|
$
|
782,833
|
|
Net income
|
24,016
|
|
|
All other changes in stockholders’ equity accounts
|
19,417
|
|
|
Balance, end of period
|
$
|
826,266
|
|
(1)
|
The change in net unrealized appreciation is net of reclassification adjustments and income taxes.
|
(2)
|
The change in liability for underfunded employee benefit plans is net of reclassification adjustments and income taxes.
|
|
Six Months Ended June 30,
|
||||||
(In Thousands)
|
2014
|
|
2013
|
||||
Cash Flows From Operating Activities
|
|
|
|
||||
Net income
|
$
|
24,016
|
|
|
$
|
37,889
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
||||
Net accretion of bond premium
|
7,601
|
|
|
7,989
|
|
||
Depreciation and amortization
|
3,757
|
|
|
2,930
|
|
||
Stock-based compensation expense
|
944
|
|
|
818
|
|
||
Net realized investment gains
|
(4,902
|
)
|
|
(6,060
|
)
|
||
Net cash flows from trading investments
|
(7,481
|
)
|
|
1,285
|
|
||
Deferred income tax benefit
|
(1,346
|
)
|
|
(2,096
|
)
|
||
Changes in:
|
|
|
|
||||
Accrued investment income
|
764
|
|
|
994
|
|
||
Premiums receivable
|
(49,459
|
)
|
|
(49,357
|
)
|
||
Deferred policy acquisition costs
|
(11,143
|
)
|
|
(3,288
|
)
|
||
Reinsurance receivables
|
6,137
|
|
|
9,625
|
|
||
Prepaid reinsurance premiums
|
(610
|
)
|
|
(573
|
)
|
||
Income taxes receivable
|
(2,105
|
)
|
|
16,536
|
|
||
Other assets
|
699
|
|
|
1,182
|
|
||
Future policy benefits and losses, claims and loss settlement expenses
|
37,769
|
|
|
10,716
|
|
||
Unearned premiums
|
54,682
|
|
|
42,827
|
|
||
Accrued expenses and other liabilities
|
(1,083
|
)
|
|
(2,465
|
)
|
||
Income taxes payable
|
—
|
|
|
1,567
|
|
||
Deferred income taxes
|
(72
|
)
|
|
2,720
|
|
||
Other, net
|
(2,975
|
)
|
|
(2,834
|
)
|
||
Total adjustments
|
$
|
31,177
|
|
|
$
|
32,516
|
|
Net cash provided by operating activities
|
$
|
55,193
|
|
|
$
|
70,405
|
|
Cash Flows From Investing Activities
|
|
|
|
||||
Proceeds from sale of available-for-sale investments
|
$
|
10
|
|
|
$
|
5,971
|
|
Proceeds from call and maturity of held-to-maturity investments
|
26
|
|
|
180
|
|
||
Proceeds from call and maturity of available-for-sale investments
|
249,251
|
|
|
238,639
|
|
||
Proceeds from short-term and other investments
|
1,648
|
|
|
1,882
|
|
||
Purchase of available-for-sale investments
|
(270,194
|
)
|
|
(295,586
|
)
|
||
Purchase of short-term and other investments
|
(1,938
|
)
|
|
(2,575
|
)
|
||
Net purchases and sales of property and equipment
|
(4,154
|
)
|
|
(2,659
|
)
|
||
Net cash used in investing activities
|
$
|
(25,351
|
)
|
|
$
|
(54,148
|
)
|
Cash Flows From Financing Activities
|
|
|
|
||||
Policyholders’ account balances
|
|
|
|
||||
Deposits to investment and universal life contracts
|
$
|
96,119
|
|
|
$
|
52,086
|
|
Withdrawals from investment and universal life contracts
|
(114,096
|
)
|
|
(87,827
|
)
|
||
Payment of cash dividends
|
(9,630
|
)
|
|
(8,342
|
)
|
||
Repurchase of common stock
|
(5,567
|
)
|
|
(99
|
)
|
||
Issuance of common stock
|
1,457
|
|
|
1,465
|
|
||
Tax impact from issuance of common stock
|
(42
|
)
|
|
(217
|
)
|
||
Net cash used in financing activities
|
$
|
(31,759
|
)
|
|
$
|
(42,934
|
)
|
Net Change in Cash and Cash Equivalents
|
$
|
(1,917
|
)
|
|
$
|
(26,677
|
)
|
Cash and Cash Equivalents at Beginning of Period
|
92,193
|
|
|
107,466
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
90,276
|
|
|
$
|
80,789
|
|
|
|
|
|
||||||||
|
Property & Casualty Insurance
|
|
Life Insurance
|
|
Total
|
||||||
Recorded asset at beginning of period
|
$
|
67,663
|
|
|
$
|
82,429
|
|
|
$
|
150,092
|
|
Underwriting costs deferred
|
87,193
|
|
|
3,680
|
|
|
90,873
|
|
|||
Amortization of deferred policy acquisition costs
|
(76,378
|
)
|
|
(3,352
|
)
|
|
(79,730
|
)
|
|||
Ending unamortized deferred policy acquisition costs
|
$
|
78,478
|
|
|
$
|
82,757
|
|
|
$
|
161,235
|
|
Change in "shadow" deferred policy acquisition costs
|
—
|
|
|
(17,921
|
)
|
|
(17,921
|
)
|
|||
Recorded asset at end of period
|
$
|
78,478
|
|
|
$
|
64,836
|
|
|
$
|
143,314
|
|
June 30, 2014
|
|
||||||||||||||
Type of Investment
|
Cost or Amortized Cost
|
|
Gross Unrealized Appreciation
|
|
Gross Unrealized Depreciation
|
|
Fair Value
|
||||||||
HELD-TO-MATURITY
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
States, municipalities and political subdivisions
|
$
|
249
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
251
|
|
Corporate bonds - financial services
|
200
|
|
|
—
|
|
|
—
|
|
|
200
|
|
||||
Mortgage-backed securities
|
181
|
|
|
8
|
|
|
—
|
|
|
189
|
|
||||
Total Held-to-Maturity Fixed Maturities
|
$
|
630
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
640
|
|
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
30,468
|
|
|
$
|
298
|
|
|
$
|
63
|
|
|
$
|
30,703
|
|
U.S. government agency
|
360,249
|
|
|
3,018
|
|
|
6,586
|
|
|
356,681
|
|
||||
States, municipalities and political subdivisions
|
705,556
|
|
|
33,895
|
|
|
2,683
|
|
|
736,768
|
|
||||
Foreign bonds
|
143,172
|
|
|
7,054
|
|
|
1
|
|
|
150,225
|
|
||||
Public utilities
|
212,385
|
|
|
8,114
|
|
|
155
|
|
|
220,344
|
|
||||
Corporate bonds
|
|
|
|
|
|
|
|
||||||||
Energy
|
149,380
|
|
|
5,593
|
|
|
373
|
|
|
154,600
|
|
||||
Industrials
|
216,342
|
|
|
7,888
|
|
|
429
|
|
|
223,801
|
|
||||
Consumer goods and services
|
159,084
|
|
|
5,455
|
|
|
213
|
|
|
164,326
|
|
||||
Health care
|
78,429
|
|
|
3,679
|
|
|
148
|
|
|
81,960
|
|
||||
Technology, media and telecommunications
|
128,124
|
|
|
4,485
|
|
|
785
|
|
|
131,824
|
|
||||
Financial services
|
223,412
|
|
|
10,199
|
|
|
68
|
|
|
233,543
|
|
||||
Mortgage-backed securities
|
19,654
|
|
|
610
|
|
|
76
|
|
|
20,188
|
|
||||
Collateralized mortgage obligations
|
320,180
|
|
|
3,559
|
|
|
8,003
|
|
|
315,736
|
|
||||
Asset-backed securities
|
3,023
|
|
|
296
|
|
|
—
|
|
|
3,319
|
|
||||
Total Available-for-Sale Fixed Maturities
|
$
|
2,749,458
|
|
|
$
|
94,143
|
|
|
$
|
19,583
|
|
|
$
|
2,824,018
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
|
|
|
|
|
|
|
||||||||
Public utilities
|
$
|
7,231
|
|
|
$
|
11,435
|
|
|
$
|
—
|
|
|
$
|
18,666
|
|
Energy
|
5,094
|
|
|
11,391
|
|
|
—
|
|
|
16,485
|
|
||||
Industrials
|
13,286
|
|
|
33,378
|
|
|
40
|
|
|
46,624
|
|
||||
Consumer goods and services
|
10,287
|
|
|
11,492
|
|
|
2
|
|
|
21,777
|
|
||||
Health care
|
7,920
|
|
|
18,846
|
|
|
—
|
|
|
26,766
|
|
||||
Technology, media and telecommunications
|
6,205
|
|
|
7,779
|
|
|
61
|
|
|
13,923
|
|
||||
Financial services
|
16,678
|
|
|
73,260
|
|
|
54
|
|
|
89,884
|
|
||||
Nonredeemable preferred stocks
|
4,984
|
|
|
140
|
|
|
5
|
|
|
5,119
|
|
||||
Total Available-for-Sale Equity Securities
|
$
|
71,685
|
|
|
$
|
167,721
|
|
|
$
|
162
|
|
|
$
|
239,244
|
|
Total Available-for-Sale Securities
|
$
|
2,821,143
|
|
|
$
|
261,864
|
|
|
$
|
19,745
|
|
|
$
|
3,063,262
|
|
December 31, 2013
|
|
||||||||||||||
Type of Investment
|
Cost or Amortized Cost
|
|
Gross Unrealized Appreciation
|
|
Gross Unrealized Depreciation
|
|
Fair Value
|
||||||||
HELD-TO-MATURITY
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
States, municipalities and political subdivisions
|
$
|
250
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
254
|
|
Corporate bonds - financial services
|
200
|
|
|
—
|
|
|
—
|
|
|
200
|
|
||||
Mortgage-backed securities
|
206
|
|
|
9
|
|
|
—
|
|
|
215
|
|
||||
Total Held-to-Maturity Fixed Maturities
|
$
|
656
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
669
|
|
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
33,612
|
|
|
$
|
423
|
|
|
$
|
140
|
|
|
$
|
33,895
|
|
U.S. government agency
|
287,988
|
|
|
258
|
|
|
18,663
|
|
|
269,583
|
|
||||
States, municipalities and political subdivisions
|
690,461
|
|
|
34,151
|
|
|
10,705
|
|
|
713,907
|
|
||||
Foreign bonds
|
167,390
|
|
|
5,863
|
|
|
397
|
|
|
172,856
|
|
||||
Public utilities
|
213,479
|
|
|
6,873
|
|
|
1,776
|
|
|
218,576
|
|
||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|||||||
Energy
|
157,620
|
|
|
4,398
|
|
|
1,008
|
|
|
161,010
|
|
||||
Industrials
|
234,221
|
|
|
5,626
|
|
|
2,819
|
|
|
237,028
|
|
||||
Consumer goods and services
|
165,565
|
|
|
3,770
|
|
|
1,421
|
|
|
167,914
|
|
||||
Health care
|
91,008
|
|
|
3,138
|
|
|
1,200
|
|
|
92,946
|
|
||||
Technology, media and telecommunications
|
121,746
|
|
|
2,541
|
|
|
3,321
|
|
|
120,966
|
|
||||
Financial services
|
234,739
|
|
|
7,735
|
|
|
723
|
|
|
241,751
|
|
||||
Mortgage-backed securities
|
22,034
|
|
|
323
|
|
|
291
|
|
|
22,066
|
|
||||
Collateralized mortgage obligations
|
309,975
|
|
|
1,707
|
|
|
16,919
|
|
|
294,763
|
|
||||
Asset-backed securities
|
3,719
|
|
|
276
|
|
|
—
|
|
|
3,995
|
|
||||
Total Available-for-Sale Fixed Maturities
|
$
|
2,733,557
|
|
|
$
|
77,082
|
|
|
$
|
59,383
|
|
|
$
|
2,751,256
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
|
|
|
|
|
|
|
||||||||
Public utilities
|
$
|
7,231
|
|
|
$
|
9,068
|
|
|
$
|
27
|
|
|
$
|
16,272
|
|
Energy
|
5,094
|
|
|
9,269
|
|
|
—
|
|
|
14,363
|
|
||||
Industrials
|
13,308
|
|
|
32,823
|
|
|
32
|
|
|
46,099
|
|
||||
Consumer goods and services
|
10,363
|
|
|
10,895
|
|
|
—
|
|
|
21,258
|
|
||||
Health care
|
7,920
|
|
|
17,078
|
|
|
—
|
|
|
24,998
|
|
||||
Technology, media and telecommunications
|
6,204
|
|
|
7,183
|
|
|
83
|
|
|
13,304
|
|
||||
Financial services
|
15,853
|
|
|
72,537
|
|
|
128
|
|
|
88,262
|
|
||||
Nonredeemable preferred stocks
|
4,984
|
|
|
5
|
|
|
177
|
|
|
4,812
|
|
||||
Total Available-for-Sale Equity Securities
|
$
|
70,957
|
|
|
$
|
158,858
|
|
|
$
|
447
|
|
|
$
|
229,368
|
|
Total Available-for-Sale Securities
|
$
|
2,804,514
|
|
|
$
|
235,940
|
|
|
$
|
59,830
|
|
|
$
|
2,980,624
|
|
|
Held-To-Maturity
|
|
Available-For-Sale
|
|
Trading
|
||||||||||||||||||
June 30, 2014
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||||||
Due in one year or less
|
$
|
135
|
|
|
$
|
136
|
|
|
$
|
234,849
|
|
|
$
|
238,774
|
|
|
$
|
1,701
|
|
|
$
|
1,699
|
|
Due after one year through five years
|
314
|
|
|
315
|
|
|
886,016
|
|
|
934,018
|
|
|
7,416
|
|
|
8,715
|
|
||||||
Due after five years through 10 years
|
—
|
|
|
—
|
|
|
818,255
|
|
|
845,767
|
|
|
1,139
|
|
|
1,563
|
|
||||||
Due after 10 years
|
—
|
|
|
—
|
|
|
467,481
|
|
|
466,216
|
|
|
5,211
|
|
|
6,328
|
|
||||||
Asset-backed securities
|
—
|
|
|
—
|
|
|
3,023
|
|
|
3,319
|
|
|
—
|
|
|
—
|
|
||||||
Mortgage-backed securities
|
181
|
|
|
189
|
|
|
19,654
|
|
|
20,188
|
|
|
—
|
|
|
—
|
|
||||||
Collateralized mortgage obligations
|
—
|
|
|
—
|
|
|
320,180
|
|
|
315,736
|
|
|
—
|
|
|
—
|
|
||||||
|
$
|
630
|
|
|
$
|
640
|
|
|
$
|
2,749,458
|
|
|
$
|
2,824,018
|
|
|
$
|
15,467
|
|
|
$
|
18,305
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net realized investment gains
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale
|
$
|
705
|
|
|
$
|
1,185
|
|
|
1,352
|
|
|
1,905
|
|
||
Trading securities
|
|
|
|
|
|
|
|
||||||||
Change in fair value
|
648
|
|
|
(130
|
)
|
|
948
|
|
|
430
|
|
||||
Sales
|
285
|
|
|
298
|
|
|
520
|
|
|
298
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale
|
901
|
|
|
3,232
|
|
|
1,736
|
|
|
3,748
|
|
||||
Trading securities
|
|
|
|
|
|
|
|
||||||||
Change in fair value
|
169
|
|
|
(132
|
)
|
|
346
|
|
|
(19
|
)
|
||||
Sales
|
—
|
|
|
38
|
|
|
—
|
|
|
38
|
|
||||
Other long-term investments
|
—
|
|
|
(340
|
)
|
|
—
|
|
|
(340
|
)
|
||||
Total net realized investment gains
|
$
|
2,708
|
|
|
$
|
4,151
|
|
|
$
|
4,902
|
|
|
$
|
6,060
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Proceeds from sales
|
$
|
10
|
|
|
$
|
3,161
|
|
|
$
|
10
|
|
|
$
|
5,971
|
|
Gross realized gains
|
—
|
|
|
96
|
|
|
—
|
|
|
238
|
|
||||
Gross realized losses
|
56
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
Six Months Ended June 30,
|
||||||
|
2014
|
|
2013
|
||||
Change in net unrealized investment appreciation
|
|
|
|
||||
Available-for-sale fixed maturities
|
$
|
56,861
|
|
|
$
|
(91,636
|
)
|
Available-for-sale equity securities
|
9,148
|
|
|
19,467
|
|
||
Deferred policy acquisition costs
|
(17,921
|
)
|
|
29,223
|
|
||
Income tax effect
|
(16,831
|
)
|
|
15,023
|
|
||
Total change in net unrealized investment appreciation, net of tax
|
$
|
31,257
|
|
|
$
|
(27,923
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
June 30, 2014
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||||||||
Type of Investment
|
Number
of Issues |
|
Fair
Value |
|
Gross Unrealized
Depreciation |
|
Number
of Issues |
|
Fair
Value |
|
Gross Unrealized Depreciation
|
|
Fair
Value |
|
Gross Unrealized Depreciation
|
||||||||||||||
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury
|
2
|
|
|
$
|
1,326
|
|
|
$
|
4
|
|
|
6
|
|
|
$
|
6,125
|
|
|
$
|
59
|
|
|
$
|
7,451
|
|
|
$
|
63
|
|
U.S. government agency
|
11
|
|
|
28,268
|
|
|
188
|
|
|
46
|
|
|
131,825
|
|
|
6,398
|
|
|
160,093
|
|
|
6,586
|
|
||||||
States, municipalities and political subdivisions
|
22
|
|
|
23,311
|
|
|
108
|
|
|
101
|
|
|
90,012
|
|
|
2,575
|
|
|
113,323
|
|
|
2,683
|
|
||||||
Foreign bonds
|
1
|
|
|
3,285
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,285
|
|
|
1
|
|
||||||
Public utilities
|
2
|
|
|
252
|
|
|
3
|
|
|
10
|
|
|
19,883
|
|
|
152
|
|
|
20,135
|
|
|
155
|
|
||||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Energy
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
10,266
|
|
|
373
|
|
|
10,266
|
|
|
373
|
|
||||||
Industrials
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
14,088
|
|
|
429
|
|
|
14,088
|
|
|
429
|
|
||||||
Consumer goods and services
|
2
|
|
|
4,274
|
|
|
28
|
|
|
8
|
|
|
15,497
|
|
|
185
|
|
|
19,771
|
|
|
213
|
|
||||||
Health care
|
2
|
|
|
7,214
|
|
|
9
|
|
|
3
|
|
|
7,194
|
|
|
139
|
|
|
14,408
|
|
|
148
|
|
||||||
Technology, media and telecommunications
|
2
|
|
|
4,591
|
|
|
25
|
|
|
7
|
|
|
27,169
|
|
|
760
|
|
|
31,760
|
|
|
785
|
|
||||||
Financial services
|
2
|
|
|
2,264
|
|
|
8
|
|
|
2
|
|
|
6,137
|
|
|
60
|
|
|
8,401
|
|
|
68
|
|
||||||
Mortgage-backed securities
|
3
|
|
|
47
|
|
|
1
|
|
|
5
|
|
|
5,868
|
|
|
75
|
|
|
5,915
|
|
|
76
|
|
||||||
Collateralized mortgage obligations
|
21
|
|
|
43,158
|
|
|
489
|
|
|
72
|
|
|
144,536
|
|
|
7,514
|
|
|
187,694
|
|
|
8,003
|
|
||||||
Total Available-for-Sale Fixed Maturities
|
70
|
|
|
$
|
117,990
|
|
|
$
|
864
|
|
|
269
|
|
|
$
|
478,600
|
|
|
$
|
18,719
|
|
|
$
|
596,590
|
|
|
$
|
19,583
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Common stocks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Industrials
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2
|
|
|
$
|
73
|
|
|
$
|
40
|
|
|
$
|
73
|
|
|
$
|
40
|
|
Consumer goods and services
|
1
|
|
|
15
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
2
|
|
||||||
Technology, media and telecommunications
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
229
|
|
|
61
|
|
|
229
|
|
|
61
|
|
||||||
Financial services
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
223
|
|
|
54
|
|
|
223
|
|
|
54
|
|
||||||
Nonredeemable preferred stocks
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
702
|
|
|
5
|
|
|
702
|
|
|
5
|
|
||||||
Total Available-for-Sale Equity Securities
|
1
|
|
|
$
|
15
|
|
|
$
|
2
|
|
|
12
|
|
|
$
|
1,227
|
|
|
$
|
160
|
|
|
$
|
1,242
|
|
|
$
|
162
|
|
Total Available-for-Sale Securities
|
71
|
|
|
$
|
118,005
|
|
|
$
|
866
|
|
|
281
|
|
|
$
|
479,827
|
|
|
$
|
18,879
|
|
|
$
|
597,832
|
|
|
$
|
19,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2013
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||||||||
Type of Investment
|
Number
of Issues |
|
Fair
Value |
|
Gross Unrealized Depreciation
|
|
Number
of Issues |
|
Fair
Value |
|
Gross Unrealized Depreciation
|
|
Fair
Value |
|
Gross Unrealized Depreciation
|
||||||||||||||
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury
|
10
|
|
|
$
|
9,196
|
|
|
$
|
140
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,196
|
|
|
$
|
140
|
|
U.S. government agency
|
101
|
|
|
256,203
|
|
|
18,019
|
|
|
2
|
|
|
4,356
|
|
|
644
|
|
|
260,559
|
|
|
18,663
|
|
||||||
States, municipalities and political subdivisions
|
136
|
|
|
97,950
|
|
|
7,423
|
|
|
29
|
|
|
29,670
|
|
|
3,282
|
|
|
127,620
|
|
|
10,705
|
|
||||||
Foreign bonds
|
10
|
|
|
20,832
|
|
|
397
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,832
|
|
|
397
|
|
||||||
Public utilities
|
31
|
|
|
61,582
|
|
|
1,776
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,582
|
|
|
1,776
|
|
||||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Energy
|
9
|
|
|
23,735
|
|
|
1,008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,735
|
|
|
1,008
|
|
||||||
Industrials
|
34
|
|
|
77,788
|
|
|
2,819
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
77,788
|
|
|
2,819
|
|
||||||
Consumer goods and services
|
31
|
|
|
58,833
|
|
|
1,276
|
|
|
6
|
|
|
3,218
|
|
|
145
|
|
|
62,051
|
|
|
1,421
|
|
||||||
Health care
|
10
|
|
|
25,888
|
|
|
942
|
|
|
2
|
|
|
4,427
|
|
|
258
|
|
|
30,315
|
|
|
1,200
|
|
||||||
Technology, media and telecommunications
|
18
|
|
|
58,105
|
|
|
2,147
|
|
|
2
|
|
|
7,468
|
|
|
1,174
|
|
|
65,573
|
|
|
3,321
|
|
||||||
Financial services
|
7
|
|
|
15,191
|
|
|
720
|
|
|
1
|
|
|
1,525
|
|
|
3
|
|
|
16,716
|
|
|
723
|
|
||||||
Mortgage-backed securities
|
16
|
|
|
4,476
|
|
|
177
|
|
|
6
|
|
|
3,113
|
|
|
114
|
|
|
7,589
|
|
|
291
|
|
||||||
Collateralized mortgage obligations
|
111
|
|
|
208,855
|
|
|
11,062
|
|
|
23
|
|
|
55,184
|
|
|
5,857
|
|
|
264,039
|
|
|
16,919
|
|
||||||
Total Available-for-Sale Fixed Maturities
|
524
|
|
|
$
|
918,634
|
|
|
$
|
47,906
|
|
|
71
|
|
|
$
|
108,961
|
|
|
$
|
11,477
|
|
|
$
|
1,027,595
|
|
|
$
|
59,383
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Common stocks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Public utilities
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
3
|
|
|
$
|
281
|
|
|
$
|
27
|
|
|
$
|
281
|
|
|
$
|
27
|
|
Industrials
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
81
|
|
|
31
|
|
|
82
|
|
|
32
|
|
||||||
Technology, media and telecommunications
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
206
|
|
|
83
|
|
|
206
|
|
|
83
|
|
||||||
Financial services
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
215
|
|
|
128
|
|
|
215
|
|
|
128
|
|
||||||
Nonredeemable preferred stocks
|
3
|
|
|
3,493
|
|
|
116
|
|
|
2
|
|
|
1,170
|
|
|
61
|
|
|
4,663
|
|
|
177
|
|
||||||
Total Available-for-Sale Equity Securities
|
4
|
|
|
$
|
3,494
|
|
|
$
|
117
|
|
|
17
|
|
|
$
|
1,953
|
|
|
$
|
330
|
|
|
$
|
5,447
|
|
|
$
|
447
|
|
Total Available-for-Sale Securities
|
528
|
|
|
$
|
922,128
|
|
|
$
|
48,023
|
|
|
88
|
|
|
$
|
110,914
|
|
|
$
|
11,807
|
|
|
$
|
1,033,042
|
|
|
$
|
59,830
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Investments
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Held-to-maturity securities
|
$
|
640
|
|
|
$
|
630
|
|
|
$
|
669
|
|
|
$
|
656
|
|
Available-for-sale securities
|
2,824,018
|
|
|
2,824,018
|
|
|
2,751,256
|
|
|
2,751,256
|
|
||||
Trading securities
|
18,305
|
|
|
18,305
|
|
|
9,940
|
|
|
9,940
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities
|
239,244
|
|
|
239,244
|
|
|
229,368
|
|
|
229,368
|
|
||||
Trading securities
|
3,206
|
|
|
3,206
|
|
|
2,487
|
|
|
2,487
|
|
||||
Mortgage loans
|
4,724
|
|
|
4,313
|
|
|
4,724
|
|
|
4,423
|
|
||||
Policy loans
|
6,200
|
|
|
6,200
|
|
|
6,261
|
|
|
6,261
|
|
||||
Other long-term investments
|
48,707
|
|
|
48,707
|
|
|
44,946
|
|
|
44,946
|
|
||||
Short-term investments
|
475
|
|
|
475
|
|
|
800
|
|
|
800
|
|
||||
Cash and cash equivalents
|
90,276
|
|
|
90,276
|
|
|
92,193
|
|
|
92,193
|
|
||||
Corporate-owned life insurance
|
578
|
|
|
578
|
|
|
—
|
|
|
—
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Policy reserves
|
|
|
|
|
|
|
|
||||||||
Annuity (accumulations)
(1)
|
$
|
949,519
|
|
|
$
|
908,765
|
|
|
$
|
941,636
|
|
|
$
|
925,832
|
|
Annuity (benefit payments)
|
147,594
|
|
|
96,661
|
|
|
140,276
|
|
|
94,805
|
|
•
|
Level 1
: Valuations are based on unadjusted quoted prices in active markets for identical financial instruments that we have the ability to access.
|
•
|
Level 2
: Valuations are based on quoted prices for similar financial instruments, other than quoted prices included in Level 1, in markets that are not active or on inputs that are observable either directly or indirectly for the full term of the financial instrument.
|
•
|
Level 3
: Valuations are based on pricing or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management’s own assumptions about the assumptions a market participant would use in pricing the financial instrument.
|
June 30, 2014
|
|
|
Fair Value Measurements
|
||||||||||||
Description
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
30,703
|
|
|
$
|
—
|
|
|
$
|
30,703
|
|
|
$
|
—
|
|
U.S. government agency
|
356,681
|
|
|
—
|
|
|
356,681
|
|
|
—
|
|
||||
States, municipalities and political subdivisions
|
736,768
|
|
|
—
|
|
|
736,158
|
|
|
610
|
|
||||
Foreign bonds
|
150,225
|
|
|
—
|
|
|
150,225
|
|
|
—
|
|
||||
Public utilities
|
220,344
|
|
|
—
|
|
|
220,344
|
|
|
—
|
|
||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
||||
Energy
|
154,600
|
|
|
—
|
|
|
154,600
|
|
|
—
|
|
||||
Industrials
|
223,801
|
|
|
—
|
|
|
223,801
|
|
|
—
|
|
||||
Consumer goods and services
|
164,326
|
|
|
—
|
|
|
162,937
|
|
|
1,389
|
|
||||
Health care
|
81,960
|
|
|
—
|
|
|
81,960
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
131,824
|
|
|
—
|
|
|
131,824
|
|
|
—
|
|
||||
Financial services
|
233,543
|
|
|
—
|
|
|
222,005
|
|
|
11,538
|
|
||||
Mortgage-backed securities
|
20,188
|
|
|
—
|
|
|
20,188
|
|
|
—
|
|
||||
Collateralized mortgage obligations
|
315,736
|
|
|
—
|
|
|
315,736
|
|
|
—
|
|
||||
Asset-backed securities
|
3,319
|
|
|
—
|
|
|
1,477
|
|
|
1,842
|
|
||||
Total Available-for-Sale Fixed Maturities
|
$
|
2,824,018
|
|
|
$
|
—
|
|
|
$
|
2,808,639
|
|
|
$
|
15,379
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
|
|
|
|
|
|
|
||||||||
Public utilities
|
$
|
18,666
|
|
|
$
|
18,666
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Energy
|
16,485
|
|
|
16,485
|
|
|
—
|
|
|
—
|
|
||||
Industrials
|
46,624
|
|
|
46,619
|
|
|
5
|
|
|
—
|
|
||||
Consumer goods and services
|
21,777
|
|
|
21,777
|
|
|
—
|
|
|
—
|
|
||||
Health care
|
26,766
|
|
|
26,766
|
|
|
—
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
13,923
|
|
|
13,923
|
|
|
—
|
|
|
—
|
|
||||
Financial services
|
89,884
|
|
|
85,945
|
|
|
67
|
|
|
3,872
|
|
||||
Nonredeemable preferred stocks
|
5,119
|
|
|
553
|
|
|
4,566
|
|
|
—
|
|
||||
Total Available-for-Sale Equity Securities
|
$
|
239,244
|
|
|
$
|
230,734
|
|
|
$
|
4,638
|
|
|
$
|
3,872
|
|
Total Available-for-Sale Securities
|
$
|
3,063,262
|
|
|
$
|
230,734
|
|
|
$
|
2,813,277
|
|
|
$
|
19,251
|
|
TRADING
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
Foreign bonds
|
$
|
1,252
|
|
|
$
|
—
|
|
|
$
|
1,252
|
|
|
$
|
—
|
|
Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
||||
Industrials
|
2,128
|
|
|
—
|
|
|
2,128
|
|
|
—
|
|
||||
Consumer goods and services
|
1,099
|
|
|
—
|
|
|
1,099
|
|
|
—
|
|
Health care
|
2,517
|
|
|
—
|
|
|
2,517
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
3,004
|
|
|
—
|
|
|
3,004
|
|
|
—
|
|
||||
Financial services
|
4,214
|
|
|
—
|
|
|
4,214
|
|
|
—
|
|
||||
Redeemable preferred stocks
|
4,091
|
|
|
4,091
|
|
|
—
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Energy
|
659
|
|
|
659
|
|
|
—
|
|
|
—
|
|
||||
Consumer goods and services
|
32
|
|
|
32
|
|
|
—
|
|
|
—
|
|
||||
Health care
|
389
|
|
|
389
|
|
|
—
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
364
|
|
|
364
|
|
|
—
|
|
|
—
|
|
||||
Nonredeemable preferred stocks
|
1,762
|
|
|
1,762
|
|
|
—
|
|
|
—
|
|
||||
Total Trading Securities
|
$
|
21,511
|
|
|
$
|
7,297
|
|
|
$
|
14,214
|
|
|
$
|
—
|
|
Short-Term Investments
|
$
|
475
|
|
|
$
|
475
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money Market Accounts
|
$
|
30,120
|
|
|
$
|
30,120
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate-Owned Life Insurance
|
$
|
578
|
|
|
$
|
—
|
|
|
$
|
578
|
|
|
$
|
—
|
|
Total Assets Measured at Fair Value
|
$
|
3,115,946
|
|
|
$
|
268,626
|
|
|
$
|
2,828,069
|
|
|
$
|
19,251
|
|
December 31, 2013
|
|
|
Fair Value Measurements
|
||||||||||||
Description
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
33,895
|
|
|
$
|
—
|
|
|
$
|
33,895
|
|
|
$
|
—
|
|
U.S. government agency
|
269,583
|
|
|
—
|
|
|
269,583
|
|
|
—
|
|
||||
States, municipalities and political subdivisions
|
713,907
|
|
|
—
|
|
|
713,209
|
|
|
698
|
|
||||
Foreign bonds
|
172,856
|
|
|
—
|
|
|
172,856
|
|
|
—
|
|
||||
Public utilities
|
218,576
|
|
|
—
|
|
|
218,576
|
|
|
—
|
|
||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|||||
Energy
|
161,010
|
|
|
—
|
|
|
161,010
|
|
|
—
|
|
||||
Industrials
|
237,028
|
|
|
—
|
|
|
237,028
|
|
|
—
|
|
||||
Consumer goods and services
|
167,914
|
|
|
—
|
|
|
166,460
|
|
|
1,454
|
|
||||
Health care
|
92,946
|
|
|
—
|
|
|
92,946
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
120,966
|
|
|
—
|
|
|
120,966
|
|
|
—
|
|
||||
Financial services
|
241,751
|
|
|
—
|
|
|
229,725
|
|
|
12,026
|
|
||||
Mortgage-backed securities
|
22,066
|
|
|
—
|
|
|
22,066
|
|
|
—
|
|
||||
Collateralized mortgage obligations
|
294,763
|
|
|
—
|
|
|
294,763
|
|
|
—
|
|
||||
Asset-backed securities
|
3,995
|
|
|
—
|
|
|
1,966
|
|
|
2,029
|
|
||||
Total Available-for-Sale Fixed Maturities
|
$
|
2,751,256
|
|
|
$
|
—
|
|
|
$
|
2,735,049
|
|
|
$
|
16,207
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
|
|
|
|
|
|
|
||||||||
Public utilities
|
$
|
16,272
|
|
|
$
|
16,272
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Energy
|
14,363
|
|
|
14,363
|
|
|
—
|
|
|
—
|
|
||||
Industrials
|
46,099
|
|
|
46,083
|
|
|
16
|
|
|
—
|
|
||||
Consumer goods and services
|
21,258
|
|
|
21,258
|
|
|
—
|
|
|
—
|
|
||||
Health care
|
24,998
|
|
|
24,998
|
|
|
—
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
13,304
|
|
|
13,304
|
|
|
—
|
|
|
—
|
|
||||
Financial services
|
88,262
|
|
|
84,419
|
|
|
62
|
|
|
3,781
|
|
||||
Nonredeemable preferred stocks
|
4,812
|
|
|
1,714
|
|
|
3,098
|
|
|
—
|
|
||||
Total Available-for-Sale Equity Securities
|
$
|
229,368
|
|
|
$
|
222,411
|
|
|
$
|
3,176
|
|
|
$
|
3,781
|
|
Total Available-for-Sale Securities
|
$
|
2,980,624
|
|
|
$
|
222,411
|
|
|
$
|
2,738,225
|
|
|
$
|
19,988
|
|
TRADING
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
Foreign bonds
|
$
|
1,253
|
|
|
$
|
—
|
|
|
$
|
1,253
|
|
|
$
|
—
|
|
Corporate bonds
|
|
|
|
|
|
|
|
||||||||
Industrials
|
1,122
|
|
|
—
|
|
|
1,122
|
|
|
—
|
|
||||
Consumer goods and services
|
106
|
|
|
—
|
|
|
106
|
|
|
—
|
|
||||
Health care
|
1,154
|
|
|
—
|
|
|
1,154
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
2,054
|
|
|
—
|
|
|
2,054
|
|
|
—
|
|
Financial services
|
1,866
|
|
|
—
|
|
|
1,866
|
|
|
—
|
|
||||
Redeemable preferred stocks
|
2,385
|
|
|
2,385
|
|
|
—
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Energy
|
563
|
|
|
563
|
|
|
—
|
|
|
—
|
|
||||
Consumer goods and services
|
39
|
|
|
39
|
|
|
—
|
|
|
—
|
|
||||
Health care
|
332
|
|
|
332
|
|
|
—
|
|
|
—
|
|
||||
Nonredeemable preferred stocks
|
1,553
|
|
|
1,553
|
|
|
—
|
|
|
—
|
|
||||
Total Trading Securities
|
$
|
12,427
|
|
|
$
|
4,872
|
|
|
$
|
7,555
|
|
|
$
|
—
|
|
Short-Term Investments
|
$
|
800
|
|
|
$
|
800
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money Market Accounts
|
$
|
37,811
|
|
|
$
|
37,811
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Assets Measured at Fair Value
|
$
|
3,031,662
|
|
|
$
|
265,894
|
|
|
$
|
2,745,780
|
|
|
$
|
19,988
|
|
|
States, municipalities and political subdivisions
|
|
Corporate bonds
|
|
Asset-backed securities
|
|
Equities
|
|
Total
|
||||||||||
Balance at March 31, 2014
|
$
|
698
|
|
|
$
|
13,122
|
|
|
$
|
1,913
|
|
|
$
|
3,891
|
|
|
$
|
19,624
|
|
Realized losses
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(56
|
)
|
|
(56
|
)
|
|||||
Unrealized gains (losses)
(1)
|
(18
|
)
|
|
9
|
|
|
45
|
|
|
48
|
|
|
84
|
|
|||||
Disposals
|
(70
|
)
|
|
(204
|
)
|
|
(116
|
)
|
|
(11
|
)
|
|
(401
|
)
|
|||||
Balance at June 30, 2014
|
$
|
610
|
|
|
$
|
12,927
|
|
|
$
|
1,842
|
|
|
$
|
3,872
|
|
|
$
|
19,251
|
|
|
States, municipalities and political subdivisions
|
|
Corporate bonds
|
|
Asset-backed securities
|
|
Equities
|
|
Total
|
||||||||||
Balance at January 1, 2014
|
$
|
698
|
|
|
$
|
13,480
|
|
|
$
|
2,029
|
|
|
$
|
3,781
|
|
|
$
|
19,988
|
|
Realized losses
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(56
|
)
|
|
(56
|
)
|
|||||
Unrealized gains (losses)
(1)
|
(18
|
)
|
|
(53
|
)
|
|
40
|
|
|
48
|
|
|
17
|
|
|||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
99
|
|
|
99
|
|
|||||
Disposals
|
(70
|
)
|
|
(500
|
)
|
|
(227
|
)
|
|
—
|
|
|
(797
|
)
|
|||||
Balance at June 30, 2014
|
$
|
610
|
|
|
$
|
12,927
|
|
|
$
|
1,842
|
|
|
$
|
3,872
|
|
|
$
|
19,251
|
|
|
Pension Plan
|
|
Postretirement Benefit Plan
|
||||||||||||
Three Months Ended June 30,
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net periodic benefit cost
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1,303
|
|
|
$
|
1,868
|
|
|
$
|
924
|
|
|
$
|
752
|
|
Interest cost
|
1,468
|
|
|
1,326
|
|
|
586
|
|
|
423
|
|
||||
Expected return on plan assets
|
(1,739
|
)
|
|
(1,550
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of net loss
|
544
|
|
|
1,105
|
|
|
224
|
|
|
138
|
|
||||
Net periodic benefit cost
|
$
|
1,576
|
|
|
$
|
2,749
|
|
|
$
|
1,734
|
|
|
$
|
1,313
|
|
|
Pension Plan
|
|
Postretirement Benefit Plan
|
||||||||||||
Six Months Ended June 30,
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net periodic benefit cost
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
2,606
|
|
|
$
|
3,150
|
|
|
$
|
1,848
|
|
|
$
|
1,505
|
|
Interest cost
|
2,936
|
|
|
2,587
|
|
|
1,172
|
|
|
847
|
|
||||
Expected return on plan assets
|
(3,478
|
)
|
|
(2,886
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of net loss
|
1,088
|
|
|
2,211
|
|
|
448
|
|
|
274
|
|
||||
Net periodic benefit cost
|
$
|
3,152
|
|
|
$
|
5,062
|
|
|
$
|
3,468
|
|
|
$
|
2,626
|
|
Authorized Shares Available for Future Award Grants
|
Six Months Ended June 30, 2014
|
|
From Inception to June 30, 2014
|
||
Beginning balance
|
353,649
|
|
|
1,900,000
|
|
Additional shares authorized
|
1,500,000
|
|
|
1,500,000
|
|
Number of awards granted
|
(313,948
|
)
|
|
(1,996,444
|
)
|
Number of awards forfeited or expired
|
5,000
|
|
|
141,145
|
|
Ending balance
|
1,544,701
|
|
|
1,544,701
|
|
Number of option awards exercised
|
46,231
|
|
|
427,999
|
|
Number of unrestricted stock awards granted
|
660
|
|
|
5,215
|
|
Number of restricted stock awards vested
|
—
|
|
|
18,576
|
|
Authorized Shares Available for Future Award Grants
|
Six Months Ended June 30, 2014
|
|
From Inception to June 30, 2014
|
||
Beginning balance
|
103,912
|
|
|
300,000
|
|
Number of awards granted
|
(16,718
|
)
|
|
(218,809
|
)
|
Number of awards forfeited or expired
|
—
|
|
|
6,003
|
|
Ending balance
|
87,194
|
|
|
87,194
|
|
Number of option awards exercised
|
1,519
|
|
|
4,675
|
|
Number of restricted stock awards vested
|
5,040
|
|
|
11,442
|
|
2014
|
|
$
|
1,000
|
|
2015
|
|
1,864
|
|
|
2016
|
|
1,439
|
|
|
2017
|
|
1,200
|
|
|
2018
|
|
779
|
|
|
2019
|
|
90
|
|
|
Total
|
|
$
|
6,372
|
|
|
Property and Casualty Insurance
|
|
Life Insurance
|
|
Total
|
||||||
Three Months Ended June 30, 2014
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
187,832
|
|
|
$
|
14,127
|
|
|
$
|
201,959
|
|
Investment income, net of investment expenses
|
11,831
|
|
|
15,765
|
|
|
27,596
|
|
|||
Net realized investment gains
|
2,337
|
|
|
371
|
|
|
2,708
|
|
|||
Other income
|
314
|
|
|
221
|
|
|
535
|
|
|||
Total reportable segment
|
$
|
202,314
|
|
|
$
|
30,484
|
|
|
$
|
232,798
|
|
Intersegment eliminations
|
7
|
|
|
(132
|
)
|
|
(125
|
)
|
|||
Total revenues
|
$
|
202,321
|
|
|
$
|
30,352
|
|
|
$
|
232,673
|
|
Net income
|
$
|
9,540
|
|
|
$
|
1,145
|
|
|
$
|
10,685
|
|
Assets
|
$
|
2,100,863
|
|
|
$
|
1,751,047
|
|
|
$
|
3,851,910
|
|
Invested assets
|
$
|
1,519,110
|
|
|
$
|
1,625,988
|
|
|
$
|
3,145,098
|
|
|
|
|
|
|
|
||||||
Three Months Ended June 30, 2013
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
170,527
|
|
|
$
|
15,963
|
|
|
$
|
186,490
|
|
Investment income, net of investment expenses
|
12,279
|
|
|
16,731
|
|
|
29,010
|
|
|||
Net realized investment gains
|
3,560
|
|
|
591
|
|
|
4,151
|
|
|||
Other income
|
72
|
|
|
110
|
|
|
182
|
|
|||
Total reportable segment
|
$
|
186,438
|
|
|
$
|
33,395
|
|
|
$
|
219,833
|
|
Intersegment eliminations
|
9
|
|
|
(123
|
)
|
|
(114
|
)
|
|||
Total revenues
|
$
|
186,447
|
|
|
$
|
33,272
|
|
|
$
|
219,719
|
|
Net income
|
$
|
13,195
|
|
|
$
|
2,301
|
|
|
$
|
15,496
|
|
Assets
|
$
|
1,951,033
|
|
|
$
|
1,749,716
|
|
|
$
|
3,700,749
|
|
Invested assets
|
$
|
1,379,947
|
|
|
$
|
1,643,356
|
|
|
$
|
3,023,303
|
|
|
Property and Casualty Insurance
|
|
Life Insurance
|
|
Total
|
||||||
Six Months Ended June 30, 2014
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
367,326
|
|
|
$
|
28,107
|
|
|
$
|
395,433
|
|
Investment income, net of investment expenses
|
22,944
|
|
|
31,364
|
|
|
54,308
|
|
|||
Net realized investment gains
|
3,704
|
|
|
1,198
|
|
|
4,902
|
|
|||
Other income
|
794
|
|
|
348
|
|
|
1,142
|
|
|||
Total reportable segment
|
$
|
394,768
|
|
|
$
|
61,017
|
|
|
$
|
455,785
|
|
Intersegment eliminations
|
57
|
|
|
(265
|
)
|
|
(208
|
)
|
|||
Total revenues
|
$
|
394,825
|
|
|
$
|
60,752
|
|
|
$
|
455,577
|
|
Net income
|
$
|
21,351
|
|
|
$
|
2,665
|
|
|
$
|
24,016
|
|
Assets
|
$
|
2,100,863
|
|
|
$
|
1,751,047
|
|
|
$
|
3,851,910
|
|
Invested assets
|
$
|
1,519,110
|
|
|
$
|
1,625,988
|
|
|
$
|
3,145,098
|
|
|
|
|
|
|
|
||||||
Six Months Ended June 30, 2013
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
333,228
|
|
|
$
|
30,202
|
|
|
$
|
363,430
|
|
Investment income, net of investment expenses
|
22,700
|
|
|
32,710
|
|
|
55,410
|
|
|||
Net realized investment gains
|
4,589
|
|
|
1,471
|
|
|
6,060
|
|
|||
Other income
|
84
|
|
|
213
|
|
|
297
|
|
|||
Total reportable segment
|
$
|
360,601
|
|
|
$
|
64,596
|
|
|
$
|
425,197
|
|
Intersegment eliminations
|
73
|
|
|
(246
|
)
|
|
(173
|
)
|
|||
Total revenues
|
$
|
360,674
|
|
|
$
|
64,350
|
|
|
$
|
425,024
|
|
Net income
|
$
|
33,924
|
|
|
$
|
3,965
|
|
|
$
|
37,889
|
|
Assets
|
$
|
1,951,033
|
|
|
$
|
1,749,716
|
|
|
$
|
3,700,749
|
|
Invested assets
|
$
|
1,379,947
|
|
|
$
|
1,643,356
|
|
|
$
|
3,023,303
|
|
|
Three Months Ended June 30,
|
||||||||||||||
(In Thousands Except Share Data)
|
2014
|
|
2013
|
||||||||||||
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
Net income
|
$
|
10,685
|
|
|
$
|
10,685
|
|
|
$
|
15,496
|
|
|
$
|
15,496
|
|
Weighted-average common shares outstanding
|
25,330,066
|
|
|
25,330,066
|
|
|
25,297,718
|
|
|
25,297,718
|
|
||||
Add dilutive effect of restricted stock awards
|
—
|
|
|
114,313
|
|
|
—
|
|
|
59,849
|
|
||||
Add dilutive effect of stock options
|
—
|
|
|
112,248
|
|
|
—
|
|
|
114,735
|
|
||||
Weighted-average common shares
|
25,330,066
|
|
|
25,556,627
|
|
|
25,297,718
|
|
|
25,472,302
|
|
||||
Earnings per common share
|
$
|
0.42
|
|
|
$
|
0.42
|
|
|
$
|
0.61
|
|
|
$
|
0.61
|
|
Awards excluded from diluted earnings per share calculation
(1)
|
—
|
|
|
904,580
|
|
|
—
|
|
|
647,726
|
|
(1)
|
Outstanding awards that are not "in-the-money" are excluded from the diluted earnings per share calculation because the effect of including them would have been anti-dilutive.
|
|
Six Months Ended June 30,
|
||||||||||||||
(In Thousands Except Share Data)
|
2014
|
|
2013
|
||||||||||||
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
Net income
|
$
|
24,016
|
|
|
$
|
24,016
|
|
|
$
|
37,889
|
|
|
$
|
37,889
|
|
Weighted-average common shares outstanding
|
25,351,056
|
|
|
25,351,056
|
|
|
25,271,752
|
|
|
25,271,752
|
|
||||
Add dilutive effect of restricted stock awards
|
—
|
|
|
114,313
|
|
|
—
|
|
|
59,849
|
|
||||
Add dilutive effect of stock options
|
—
|
|
|
125,889
|
|
|
—
|
|
|
82,791
|
|
||||
Weighted-average common shares
|
25,351,056
|
|
|
25,591,258
|
|
|
25,271,752
|
|
|
25,414,392
|
|
||||
Earnings per common share
|
$
|
0.95
|
|
|
$
|
0.94
|
|
|
$
|
1.50
|
|
|
$
|
1.49
|
|
Awards excluded from diluted earnings per share calculation
(1)
|
—
|
|
|
904,580
|
|
|
—
|
|
|
663,326
|
|
(1)
|
Outstanding awards that are not "in-the-money" are excluded from the diluted earnings per share calculation because the effect of including them would have been anti-dilutive.
|
|
|
|
Liability for
|
|
|
||||||
|
Net unrealized
|
|
underfunded
|
|
|
||||||
|
appreciation
|
|
employee
|
|
|
||||||
|
on investments
|
|
benefit costs
|
|
Total
|
||||||
Balance as of March 31, 2014
|
$
|
131,282
|
|
|
$
|
(28,952
|
)
|
|
$
|
102,330
|
|
Change in accumulated other comprehensive income before reclassifications
|
17,620
|
|
|
—
|
|
|
17,620
|
|
|||
Reclassification adjustments from accumulated other comprehensive income
|
(1,044
|
)
|
|
499
|
|
|
(545
|
)
|
|||
Balance as of June 30, 2014
|
$
|
147,858
|
|
|
$
|
(28,453
|
)
|
|
$
|
119,405
|
|
|
|
|
Liability for
|
|
|
||||||
|
Net unrealized
|
|
underfunded
|
|
|
||||||
|
appreciation
|
|
employee
|
|
|
||||||
|
on investments
|
|
benefit costs
|
|
Total
|
||||||
Balance as of January 1, 2014
|
$
|
116,601
|
|
|
$
|
(29,451
|
)
|
|
$
|
87,150
|
|
Change in accumulated other comprehensive income before reclassifications
|
33,264
|
|
|
—
|
|
|
33,264
|
|
|||
Reclassification adjustments from accumulated other comprehensive income
|
(2,007
|
)
|
|
998
|
|
|
(1,009
|
)
|
|||
Balance as of June 30, 2014
|
$
|
147,858
|
|
|
$
|
(28,453
|
)
|
|
$
|
119,405
|
|
|
/s/ Ernst & Young LLP
|
|
||
|
Ernst & Young LLP
|
|
•
|
property and casualty insurance, which includes commercial lines insurance, personal lines insurance, surety bonds and assumed reinsurance; and
|
•
|
life insurance, which includes deferred and immediate annuities, universal life products and traditional life (primarily single premium whole life) insurance products.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
(In Thousands)
|
2014
|
|
2013
|
|
%
|
|
2014
|
|
2013
|
|
%
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net premiums earned
|
$
|
201,827
|
|
|
$
|
186,367
|
|
|
8.3
|
%
|
|
$
|
395,168
|
|
|
$
|
363,184
|
|
|
8.8
|
%
|
Investment income, net of investment expenses
|
27,603
|
|
|
29,019
|
|
|
(4.9
|
)
|
|
54,365
|
|
|
55,483
|
|
|
(2.0
|
)
|
||||
Net realized investment gains
|
2,708
|
|
|
4,151
|
|
|
(34.8
|
)
|
|
4,902
|
|
|
6,060
|
|
|
(19.1
|
)
|
||||
Other income
|
535
|
|
|
182
|
|
|
194.0
|
|
|
1,142
|
|
|
297
|
|
|
284.5
|
|
||||
Total revenues
|
$
|
232,673
|
|
|
$
|
219,719
|
|
|
5.9
|
%
|
|
$
|
455,577
|
|
|
$
|
425,024
|
|
|
7.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Benefits, Losses and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Losses and loss settlement expenses
|
$
|
142,716
|
|
|
$
|
120,435
|
|
|
18.5
|
%
|
|
$
|
267,953
|
|
|
$
|
217,905
|
|
|
23.0
|
%
|
Increase in liability for future policy benefits
|
8,077
|
|
|
9,869
|
|
|
(18.2
|
)
|
|
15,898
|
|
|
18,105
|
|
|
(12.2
|
)
|
||||
Amortization of deferred policy acquisition costs
|
40,196
|
|
|
36,708
|
|
|
9.5
|
|
|
79,730
|
|
|
74,789
|
|
|
6.6
|
|
||||
Other underwriting expenses
|
20,776
|
|
|
23,308
|
|
|
(10.9
|
)
|
|
47,204
|
|
|
45,656
|
|
|
3.4
|
|
||||
Interest on policyholders' accounts
|
7,852
|
|
|
9,081
|
|
|
(13.5
|
)
|
|
15,839
|
|
|
18,401
|
|
|
(13.9
|
)
|
||||
Total benefits, losses and expenses
|
$
|
219,617
|
|
|
$
|
199,401
|
|
|
10.1
|
%
|
|
$
|
426,624
|
|
|
$
|
374,856
|
|
|
13.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes
|
$
|
13,056
|
|
|
$
|
20,318
|
|
|
(35.7
|
)%
|
|
$
|
28,953
|
|
|
$
|
50,168
|
|
|
(42.3
|
)%
|
Federal income tax expense
|
2,371
|
|
|
4,822
|
|
|
(50.8
|
)
|
|
4,937
|
|
|
12,279
|
|
|
(59.8
|
)%
|
||||
Net income
|
$
|
10,685
|
|
|
$
|
15,496
|
|
|
(31.0
|
)%
|
|
$
|
24,016
|
|
|
$
|
37,889
|
|
|
(36.6
|
)%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In Thousands Except Ratios)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net premiums written
|
$
|
222,061
|
|
|
$
|
198,363
|
|
|
$
|
421,390
|
|
|
$
|
375,482
|
|
Net premiums earned
|
$
|
187,832
|
|
|
$
|
170,527
|
|
|
$
|
367,326
|
|
|
$
|
333,228
|
|
Losses and loss settlement expenses
|
(135,493
|
)
|
|
(115,528
|
)
|
|
(254,149
|
)
|
|
(207,621
|
)
|
||||
Amortization of deferred policy acquisition costs
|
(38,502
|
)
|
|
(34,993
|
)
|
|
(76,378
|
)
|
|
(71,349
|
)
|
||||
Other underwriting expenses
|
(17,104
|
)
|
|
(19,220
|
)
|
|
(39,364
|
)
|
|
(37,635
|
)
|
||||
Underwriting gain (loss)
|
$
|
(3,267
|
)
|
|
$
|
786
|
|
|
$
|
(2,565
|
)
|
|
$
|
16,623
|
|
|
|
|
|
|
|
|
|
|
|||||||
Investment income, net of investment expenses
|
11,838
|
|
|
12,288
|
|
|
23,001
|
|
|
22,773
|
|
||||
Net realized investment gains
|
2,337
|
|
|
3,560
|
|
|
3,704
|
|
|
4,589
|
|
||||
Other income
|
315
|
|
|
72
|
|
|
795
|
|
|
84
|
|
||||
Income before income taxes
|
$
|
11,223
|
|
|
$
|
16,706
|
|
|
$
|
24,935
|
|
|
$
|
44,069
|
|
|
|
|
|
|
|
|
|
|
|||||||
GAAP Ratios:
|
|
|
|
|
|
|
|
|
|||||||
Net loss ratio (without catastrophes)
|
61.1
|
%
|
|
59.4
|
%
|
|
62.7
|
%
|
|
56.7
|
%
|
||||
Catastrophes - effect on net loss ratio
|
11.0
|
|
|
8.3
|
|
|
6.5
|
|
|
5.6
|
|
||||
Net loss ratio
(1)
|
72.1
|
%
|
|
67.7
|
%
|
|
69.2
|
%
|
|
62.3
|
%
|
||||
Expense ratio
(2)
|
29.6
|
|
|
31.8
|
|
|
31.5
|
|
|
32.7
|
|
||||
Combined ratio
(3)
|
101.7
|
%
|
|
99.5
|
%
|
|
100.7
|
%
|
|
95.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Three Months Ended June 30,
|
2014
|
|
2013
|
||||||||||||||||||
|
|
|
Net Losses
|
|
|
|
|
|
Net Losses
|
|
|
||||||||||
|
|
|
and Loss
|
|
|
|
|
|
and Loss
|
|
|
||||||||||
|
Net
|
|
Settlement
|
|
Net
|
|
Net
|
|
Settlement
|
|
Net
|
||||||||||
(In Thousands)
|
Premiums
|
|
Expenses
|
|
Loss
|
|
Premiums
|
|
Expenses
|
|
Loss
|
||||||||||
Unaudited
|
Earned
|
|
Incurred
|
|
Ratio
|
|
Earned
|
|
Incurred
|
|
Ratio
|
||||||||||
Commercial lines
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other liability
|
$
|
55,891
|
|
|
$
|
24,192
|
|
|
43.3
|
%
|
|
$
|
49,175
|
|
|
$
|
28,618
|
|
|
58.2
|
%
|
Fire and allied lines
|
44,467
|
|
|
42,840
|
|
|
96.3
|
|
|
39,416
|
|
|
26,093
|
|
|
66.2
|
|
||||
Automobile
|
40,391
|
|
|
29,353
|
|
|
72.7
|
|
|
36,025
|
|
|
28,777
|
|
|
79.9
|
|
||||
Workers' compensation
|
20,996
|
|
|
16,129
|
|
|
76.8
|
|
|
20,159
|
|
|
14,477
|
|
|
71.8
|
|
||||
Fidelity and surety
|
4,099
|
|
|
1,308
|
|
|
31.9
|
|
|
4,048
|
|
|
(974
|
)
|
|
(24.1
|
)
|
||||
Miscellaneous
|
683
|
|
|
(1
|
)
|
|
(0.1
|
)
|
|
517
|
|
|
45
|
|
|
8.7
|
|
||||
Total commercial lines
|
$
|
166,527
|
|
|
$
|
113,821
|
|
|
68.3
|
%
|
|
$
|
149,340
|
|
|
$
|
97,036
|
|
|
65.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Personal lines
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fire and allied lines
|
$
|
11,070
|
|
|
$
|
13,530
|
|
|
122.2
|
%
|
|
$
|
10,689
|
|
|
$
|
10,765
|
|
|
100.7
|
%
|
Automobile
|
5,791
|
|
|
6,672
|
|
|
115.2
|
|
|
5,515
|
|
|
4,367
|
|
|
79.2
|
|
||||
Miscellaneous
|
247
|
|
|
(17
|
)
|
|
(6.9
|
)
|
|
235
|
|
|
667
|
|
|
NM
|
|
||||
Total personal lines
|
$
|
17,108
|
|
|
$
|
20,185
|
|
|
118.0
|
%
|
|
$
|
16,439
|
|
|
$
|
15,799
|
|
|
96.1
|
%
|
Reinsurance assumed
|
$
|
4,197
|
|
|
$
|
1,487
|
|
|
35.4
|
%
|
|
$
|
4,748
|
|
|
$
|
2,693
|
|
|
56.7
|
%
|
Total
|
$
|
187,832
|
|
|
$
|
135,493
|
|
|
72.1
|
%
|
|
$
|
170,527
|
|
|
$
|
115,528
|
|
|
67.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Six Months Ended June 30,
|
2014
|
|
2013
|
||||||||||||||||||
|
|
|
Net Losses
|
|
|
|
|
|
Net Losses
|
|
|
||||||||||
|
|
|
and Loss
|
|
|
|
|
|
and Loss
|
|
|
||||||||||
|
Net
|
|
Settlement
|
|
Net
|
|
Net
|
|
Settlement
|
|
Net
|
||||||||||
(In Thousands)
|
Premiums
|
|
Expenses
|
|
Loss
|
|
Premiums
|
|
Expenses
|
|
Loss
|
||||||||||
Unaudited
|
Earned
|
|
Incurred
|
|
Ratio
|
|
Earned
|
|
Incurred
|
|
Ratio
|
||||||||||
Commercial lines
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other liability
|
$
|
109,044
|
|
|
$
|
54,862
|
|
|
50.3
|
%
|
|
$
|
94,504
|
|
|
$
|
49,315
|
|
|
52.2
|
%
|
Fire and allied lines
|
87,354
|
|
|
77,498
|
|
|
88.7
|
|
|
80,390
|
|
|
44,694
|
|
|
55.6
|
|
||||
Automobile
|
78,841
|
|
|
51,601
|
|
|
65.4
|
|
|
70,983
|
|
|
54,950
|
|
|
77.4
|
|
||||
Workers' compensation
|
42,026
|
|
|
34,338
|
|
|
81.7
|
|
|
39,267
|
|
|
30,840
|
|
|
78.5
|
|
||||
Fidelity and surety
|
8,559
|
|
|
995
|
|
|
11.6
|
|
|
8,807
|
|
|
(680
|
)
|
|
(7.7
|
)
|
||||
Miscellaneous
|
1,347
|
|
|
10
|
|
|
0.7
|
|
|
562
|
|
|
659
|
|
|
117.3
|
|
||||
Total commercial lines
|
$
|
327,171
|
|
|
$
|
219,304
|
|
|
67.0
|
%
|
|
$
|
294,513
|
|
|
$
|
179,778
|
|
|
61.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Personal lines
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fire and allied lines
|
$
|
22,102
|
|
|
$
|
20,385
|
|
|
92.2
|
%
|
|
$
|
21,125
|
|
|
$
|
16,966
|
|
|
80.3
|
%
|
Automobile
|
11,472
|
|
|
10,966
|
|
|
95.6
|
|
|
10,861
|
|
|
7,562
|
|
|
69.6
|
|
||||
Miscellaneous
|
491
|
|
|
88
|
|
|
17.9
|
|
|
288
|
|
|
901
|
|
|
NM
|
|
||||
Total personal lines
|
$
|
34,065
|
|
|
$
|
31,439
|
|
|
92.3
|
%
|
|
$
|
32,274
|
|
|
$
|
25,429
|
|
|
78.8
|
%
|
Reinsurance assumed
|
$
|
6,090
|
|
|
$
|
3,406
|
|
|
55.9
|
%
|
|
$
|
6,441
|
|
|
$
|
2,414
|
|
|
37.5
|
%
|
Total
|
$
|
367,326
|
|
|
$
|
254,149
|
|
|
69.2
|
%
|
|
$
|
333,228
|
|
|
$
|
207,621
|
|
|
62.3
|
%
|
•
|
Commercial other liability -
The net loss ratio improved 14.9 percentage points and 1.9 percentage points in the
three- and six-month periods ended June 30, 2014
, respectively, compared to the same periods of
2013
. In the second quarter of 2013, there was an increase in large claims, which increased overall average claim severity in the prior year.
|
•
|
Commercial fire and allied lines
- The net loss ratio deteriorated 30.1 percentage points and 33.1 percentage points in the
three- and six-month periods ended June 30, 2014
, respectively, compared to the same periods of
2013
. The change is primarily attributable to losses from a single large claim (a large explosion in a suburban townhome community), an increase in our annual aggregate reinsurance deductible, an increase in the frequency of claims associated with the harsh winter weather experienced in the U.S. in the first quarter of 2014, an increase in catastrophes from spring storms experienced in regions of the U.S. in the second quarter of 2014 where we conduct much of our business and an increase in severity in commercial fire losses.
|
•
|
Commercial automobile
- The net loss ratio improved 7.2 percentage points and 12.0 percentage points in the
three- and six-month periods ended June 30, 2014
, respectively, compared to the same periods of
2013
. The change was primarily due to favorable results from loss control and re-underwriting initiatives over the past several months that focused on under-performing accounts and agents.
|
•
|
Personal fire and allied lines-
The net loss ratio deteriorated 21.5 percentage points and 11.9 percentage points in the
three- and six-month periods ended June 30, 2014
, respectively, compared to the same periods of
2013
. The change was primarily due to an increase in catastrophe loss experience from spring storms in the U.S. in the second quarter of 2014.
|
•
|
Personal automobile
- The net loss ratio deteriorated 36.0 percentage points and 26.0 percentage points in the
three- and six-month periods ended June 30, 2014
, respectively, compared to the same periods of
2013
. The change was primarily due to increased claim frequency and severity due to the harsh winter weather experienced in the U.S. in the first quarter of 2014 and due to an increase in catastrophe loss experience from spring storms in regions of the U.S. in the second quarter of 2014 where we conduct much of our business.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In Thousands)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Net premiums earned
|
$
|
13,995
|
|
|
$
|
15,840
|
|
|
$
|
27,842
|
|
|
$
|
29,956
|
|
Investment income, net of investment expenses
|
15,765
|
|
|
16,731
|
|
|
31,364
|
|
|
32,710
|
|
||||
Net realized investment gains
|
371
|
|
|
591
|
|
|
1,198
|
|
|
1,471
|
|
||||
Other income
|
220
|
|
|
110
|
|
|
347
|
|
|
213
|
|
||||
Total revenues
|
$
|
30,351
|
|
|
$
|
33,272
|
|
|
$
|
60,751
|
|
|
$
|
64,350
|
|
|
|
|
|
|
|
|
|
||||||||
Benefits, Losses and Expenses
|
|
|
|
|
|
|
|
||||||||
Losses and loss settlement expenses
|
$
|
7,223
|
|
|
$
|
4,907
|
|
|
$
|
13,804
|
|
|
$
|
10,284
|
|
Increase in liability for future policy benefits
|
8,077
|
|
|
9,869
|
|
|
15,898
|
|
|
18,105
|
|
||||
Amortization of deferred policy acquisition costs
|
1,694
|
|
|
1,715
|
|
|
3,352
|
|
|
3,440
|
|
||||
Other underwriting expenses
|
3,672
|
|
|
4,088
|
|
|
7,840
|
|
|
8,021
|
|
||||
Interest on policyholders' accounts
|
7,852
|
|
|
9,081
|
|
|
15,839
|
|
|
18,401
|
|
||||
Total benefits, losses and expenses
|
$
|
28,518
|
|
|
$
|
29,660
|
|
|
$
|
56,733
|
|
|
$
|
58,251
|
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
$
|
1,833
|
|
|
$
|
3,612
|
|
|
$
|
4,018
|
|
|
$
|
6,099
|
|
|
Property & Casualty Insurance Segment
|
|
Life Insurance Segment
|
|
Total
|
|||||||||||||||
|
|
|
Percent
|
|
|
|
|
Percent
|
|
|
|
|
Percent
|
|
||||||
(In Thousands)
|
|
|
of Total
|
|
|
|
|
of Total
|
|
|
|
|
of Total
|
|
||||||
Fixed maturities
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Held-to-maturity
|
$
|
315
|
|
|
—
|
%
|
|
$
|
315
|
|
|
—
|
%
|
|
$
|
630
|
|
|
—
|
%
|
Available-for-sale
|
1,250,310
|
|
|
82.4
|
|
|
1,573,708
|
|
|
96.8
|
|
|
2,824,018
|
|
|
89.8
|
|
|||
Trading securities
|
18,305
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
18,305
|
|
|
0.6
|
|
|||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Available-for-sale
|
210,970
|
|
|
13.9
|
|
|
28,274
|
|
|
1.7
|
|
|
239,244
|
|
|
7.6
|
|
|||
Trading securities
|
3,206
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
3,206
|
|
|
0.1
|
|
|||
Mortgage loans
|
—
|
|
|
—
|
|
|
4,313
|
|
|
0.3
|
|
|
4,313
|
|
|
0.1
|
|
|||
Policy loans
|
—
|
|
|
—
|
|
|
6,200
|
|
|
0.4
|
|
|
6,200
|
|
|
0.2
|
|
|||
Other long-term investments
|
35,529
|
|
|
2.3
|
|
|
13,178
|
|
|
0.8
|
|
|
48,707
|
|
|
1.6
|
|
|||
Short-term investments
|
475
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
475
|
|
|
—
|
|
|||
Total
|
$
|
1,519,110
|
|
|
100.0
|
%
|
|
$
|
1,625,988
|
|
|
100.0
|
%
|
|
$
|
3,145,098
|
|
|
100.0
|
%
|
(In Thousands)
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||
Rating
|
Carrying Value
|
|
% of Total
|
|
Carrying Value
|
|
% of Total
|
||||||
AAA
|
$
|
882,755
|
|
|
31.1
|
%
|
|
$
|
761,017
|
|
|
27.6
|
%
|
AA
|
588,848
|
|
|
20.7
|
|
|
537,527
|
|
|
19.5
|
|
||
A
|
575,681
|
|
|
20.2
|
|
|
564,396
|
|
|
20.4
|
|
||
Baa/BBB
|
729,768
|
|
|
25.7
|
|
|
830,735
|
|
|
30.1
|
|
||
Other/Not Rated
|
65,901
|
|
|
2.3
|
|
|
68,177
|
|
|
2.5
|
|
||
|
$
|
2,842,953
|
|
|
100.0
|
%
|
|
$
|
2,761,852
|
|
|
100.0
|
%
|
Cash Flow Summary
|
Six Months Ended June 30,
|
||||||
(In Thousands)
|
2014
|
|
2013
|
||||
Cash provided by (used in)
|
|
|
|
||||
Operating activities
|
$
|
55,193
|
|
|
$
|
70,405
|
|
Investing activities
|
(25,351
|
)
|
|
(54,148
|
)
|
||
Financing activities
|
(31,759
|
)
|
|
(42,934
|
)
|
||
Net decrease in cash and cash equivalents
|
$
|
(1,917
|
)
|
|
$
|
(26,677
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In Thousands)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
ISO catastrophes
|
$
|
20,603
|
|
|
$
|
13,982
|
|
|
$
|
23,878
|
|
|
$
|
18,493
|
|
Non-ISO catastrophes
(1)
|
—
|
|
|
239
|
|
|
—
|
|
|
239
|
|
||||
Total catastrophes
|
$
|
20,603
|
|
|
$
|
14,221
|
|
|
$
|
23,878
|
|
|
$
|
18,732
|
|
|
|
|
|
|
Total Number of Shares
|
|
Maximum Number of
|
|||||
|
Total
|
|
|
|
Purchased as a Part of
|
|
Shares that may yet be
|
|||||
|
Number of
|
|
Average Price
|
|
Publicly Announced
|
|
Purchased Under the
|
|||||
Period
|
Shares Purchased
|
|
Paid per Share
|
|
Plans or Programs
|
|
Plans or Programs
|
|||||
4/1/2014 - 4/30/2014
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
1,070,117
|
|
5/1/2014 - 5/31/2014
|
137,405
|
|
|
27.61
|
|
|
137,405
|
|
|
932,712
|
|
|
6/1/2014 - 6/30/2014
|
64,111
|
|
|
27.65
|
|
|
64,111
|
|
|
868,601
|
|
|
Total
|
201,516
|
|
|
$
|
27.63
|
|
|
201,516
|
|
|
|
Exhibit number
|
|
Exhibit description
|
|
Filed herewith
|
10.1
|
|
United Fire Group, Inc. Executive Nonqualified Excess Plan, dated as of May 21, 2014, previously filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Commission on May 22, 2014, and incorporated herein by reference
|
|
|
10.2
|
|
United Fire & Casualty Company Executive Nonqualified Excess Plan Adoption Agreement, effective as of May 22, 2014, previously filed as Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the Commission on May 22, 2014, and incorporated herein by reference
|
|
|
10.3
|
|
United Fire & Casualty Company Rabbi Directed Trust Agreement, effective as of May 22, 2014, previously filed as Exhibit 10.3 to the Registrant's Current Report on Form 8-K filed with the Commission on May 22, 2014, and incorporated herein by reference
|
|
|
10.4
|
|
United Fire Group, Inc. Template Change in Control Severance Agreement, dated as of May 21, 2014, previously filed as Exhibit 10.4 to the Registrant's Current Report on Form 8-K filed with the Commission on May 22, 2014, and incorporated herein by reference
|
|
|
10.5
|
|
Amendment Number One to United Fire & Casualty Company Nonqualified Deferred Compensation Plan, dated as of May 22, 2014, previously filed as Exhibit 10.5 to the Registrant's Current Report on Form 8-K filed with the Commission on May 22, 2014, and incorporated herein by reference
|
|
|
10.6
|
|
United Fire Group, Inc. Stock Plan, amended as of February 21, 2014 (amending and restating the United Fire & Casualty Company 2008 Stock Plan), previously filed as Appendix A to Registrant's Form DEF 14A filed with the Commission on April 8, 2014, and incorporated herein by reference
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|
|
10.7
|
|
Form of Non-Qualified Employee Stock Option Agreement under the United Fire Group, Inc. Stock Plan
|
|
X
|
10.8
|
|
Form of Stock Award Agreement under the United Fire Group, Inc. Stock Plan.
|
|
X
|
11
|
|
Statement Re Computation of Per Share Earnings. All information required by Exhibit 11 is presented within Note 7 of the Notes to Unaudited Consolidated Financial Statements, in accordance with the FASB guidance on Earnings per Share.
|
|
X
|
31.1
|
|
Certification of Randy A. Ramlo pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
X
|
31.2
|
|
Certification of Dianne M. Lyons pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
X
|
32.1
|
|
Certification of Randy A. Ramlo pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
X
|
32.2
|
|
Certification of Dianne M. Lyons pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
X
|
101.1
|
|
The following financial information from United Fire Group, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 formatted in XBRL: (i) Consolidated Balance Sheets at June 30, 2014 (unaudited) and December 31, 2013; (ii) Consolidated Statements of Income and Comprehensive Income (unaudited) for the three and six months ended June 30, 2014 and 2013; (iii) Consolidated Statement of Stockholders’ Equity (unaudited) for the six months ended June 30, 2014; (iv) Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2014 and 2013; and (v) Notes to Unaudited Consolidated Financial Statements, tagged as a block of text.
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|
X
|
UNITED FIRE GROUP, INC.
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|
|
(Registrant)
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|
|
|
|
|
/s/ Randy A. Ramlo
|
|
/s/ Dianne M. Lyons
|
Randy A. Ramlo
|
|
Dianne M. Lyons
|
President, Chief Executive Officer,
|
|
Senior Vice President, Chief Financial Officer and
|
Director and Principal Executive Officer
|
|
Principal Accounting Officer
|
|
|
|
August 5, 2014
|
|
August 5, 2014
|
(Date)
|
|
(Date)
|
1.
|
Grant of Option
. United Fire Group, Inc. (hereinafter the “Company”), in the exercise of its sole discretion pursuant to the United Fire Group, Inc. 2008 Stock Plan (the “Plan) does on [ Date ] (the “Grant Date”) hereby grant to [ Name ] (the “Optionee”) the option to purchase [ Number of shares ] shares of the common stock of the Company for a price of [ $Price ] per share upon the terms and subject to the conditions hereinafter contained. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan. This agreement is not intended to be an incentive stock option agreement as defined in Section 422 of the Internal Revenue Code of 1986, as amended.
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2.
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Vesting Schedule
.
|
a.
|
Subject to the terms of this Award Agreement and the Plan and provided that the Awardee remains continuously employed throughout the vesting periods set out below, the right to exercise this option shall vest as follows:
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Vesting Date
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Annual Percentage of Vesting
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[ Time period ] from the Grant Date
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[ % ]
|
[ Time period ] from the Grant Date
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[ % ]
|
[ Time period ] from the Grant Date
|
[ % ]
|
[ Time period ] from the Grant Date
|
[ % ]
|
[ Time period ] from the Grant Date
|
[ % ]
|
b.
|
THIS OPTION WILL BE AFFECTED, WITH REGARD TO BOTH VESTING SCHEDULE AND TERMINATION, BY LEAVES OF ABSENCE, CHANGES IN THE NUMBER OF HOURS WORKED, PARTIAL DISABILITY, AND OTHER CHANGES IN THE OPTIONEE’S EMPLOYMENT STATUS AS PROVIDED IN THE COMPANY’S CURRENT POLICIES IN SUCH MATTERS. THESE POLICIES MAY CHANGE FROM TIME TO TIME WITHOUT NOTICE IN THE COMPANY’S SOLE DISCRETION, AND THE OPTIONEE’S RIGHTS WILL BE GOVERNED BY THE POLICIES IN EFFECT AT THE TIME OF ANY EMPLOYMENT STATUS CHANGE. CONTACT HUMAN RESOURCES FOR A COPY OF THE MOST CURRENT POLICY STATEMENT AT ANY POINT IN TIME.
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3.
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Expiration Date
. This option shall expire ten (10) years from the Grant Date.
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4.
|
Termination of Optionee’s Status as an Employee
. Upon termination of the Optionee’s Continuous Status as an Employee (as such term is defined in the Plan), the Optionee may exercise this option to the extent exercisable on the date of termination. Such exercise must occur within [ Number ] months after the date of such termination (but in no event later than the date of expiration of the term of this option as set forth in Section 3 above). To the extent that the Optionee does not exercise this option within the time specified in this Section 4, this option shall terminate.
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5.
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Disability of Optionee
. Notwithstanding the provisions of Section 4 above, upon termination of the Optionee’s Continuous Status as an Employee as a result of total and permanent disability (as such term is defined in the Plan), the Optionee may exercise this option, but only to the extent of the right to exercise that would have
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6.
|
Retirement of Optionee
. Notwithstanding the provisions of Section 4 above, upon termination of the Optionee's Continuous Status as an Employee as a result of total and permanent disability, the Optionee may exercise this option, but only to the extent of the right to exercise that would have accrued had the Optionee remained in Continuous Status as an Employee for a period of [ Number ] months after the date on which the Optionee ceased working as an Employee. Such exercise must occur within [ Number ] months from the date on which the Optionee ceased working as an employee (but in no event later than the date of expiration of the term of this option as set forth in Section 3 above). To the extent that the Optionee does not exercise this option within the time specified in this Section 6, this option shall terminate.
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7.
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Death of Optionee
. Notwithstanding the provisions of Section 4 above, upon the death of the Optionee:
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a.
|
If the Optionee is, at the time of death, an employee of the Company, this option may be exercised, at any time within [ Number ] months following the date of death (but in no event later than the date of expiration of the term of this option as set forth in Section 3 above), by the Optionee’s estate or by a person who acquired the right to exercise this option by bequest or inheritance, but only to the extent of the right to exercise that would have accrued had Optionee continued living and remained in Continuous Status as an Employee for [ Number ] months after the date of death; or
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b.
|
If, at the time of death, this option has not yet expired but Optionee’s Continuous Status as an Employee terminated prior to the date of death, this option may be exercised, at any time within [ Number ] months following the date of death (but in no event later than the date of expiration of the term of this option as set forth in Section 3 above), by the Optionee’s estate or by a person who acquired the right to exercise this option by bequest or inheritance, but only to the extent of the right to exercise that had accrued at the date of termination.
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c.
|
To the extent that this option is not exercised by an authorized representative of Optionee within the time specified in this Section 7, this option shall terminate.
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8.
|
Value of Unvested Options
. In consideration of the grant of this option, the Optionee agrees that upon and following termination of the Optionee’s Continuous Status as an Employee for any reason, and regardless of whether Optionee is terminated with or without cause, notice, or pre-termination procedure or whether Optionee asserts or prevails on a claim that Optionee’s employment was terminable only for cause or only with notice or pre-termination procedure, any unvested portion of this option shall be deemed to have a value of zero dollars ($0.00).
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9.
|
Exercise of Option.
|
a.
|
The Optionee shall indicate the intention to exercise this option by notifying the Company electronically, telephonically, or in writing of the intention to do so, indicating the number of shares the Optionee intends to purchase. Payment sufficient to cover the aggregate option exercise price and any federal, state, and local taxes required to be withheld by the Company must accompany the notice of exercise, in one of the three acceptable forms listed in the first sentence of Section 9(b) below.
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b.
|
Payment of the option exercise price may be made by cash, by check, or by instructing a broker to promptly deliver to the Company the amount of sale proceeds necessary to pay the aggregate exercise price, all in
|
c.
|
Prior to the issuance of shares upon exercise of this option, the Optionee shall pay any federal, state, and local income and employment tax withholding obligations applicable to such exercise. If the Optionee is an officer of the Company within the meaning of Section 16 of the Exchange Act, the Optionee may elect to pay such withholding tax obligations by having the Company withhold shares of the Company’s common stock having a value equal to the amount required to be withheld. Such an election shall be made in accordance with Section 11(d) of the Plan.
|
d.
|
This option may not be exercised for a fraction of a share or for fewer than the lesser of ten Shares or the amount of shares subject to this option.
|
e.
|
An exercise of this option shall be deemed to have occurred upon the satisfaction of the requirements of subsections (a), (b), and (c) of this Section 8. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the shares of stock evidencing the shares as to which this option was exercised, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to such shares, notwithstanding the exercise of this option. The Company shall issue (or cause to be issued) such shares of stock (in either book entry or certificate form) promptly upon exercise of this option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock shares are issued, except as provided in Section 14 of the Plan.
|
10.
|
Non-Transferability of Option
. This option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee.
|
11.
|
No Employment Right
. The Optionee acknowledges that neither the fact of this option grant nor any provision of this Option Agreement or the Plan or the policies adopted pursuant to the Plan shall confer upon the Optionee any right with respect to continuation of employment with the Company or to employment that is not terminable at will. The Optionee further acknowledges and agrees that the Optionee’s employment with the Company is not for any minimum or fixed period, is subject to the mutual consent of the Optionee and the Company, and may be terminated by either the Optionee or the Company at any time, for any reason or no reason, with or without cause or notice or any kind of pre- or post-termination warning, discipline or procedure.
|
12.
|
No Right to Damages
. The Optionee acknowledges and agrees that, regardless of whether the Optionee is terminated with or without cause, notice or pre-termination procedure or whether the Optionee asserts or prevails on a claim that the Optionee’s employment was terminable only for cause or only with notice or pre-termination procedure, the Optionee has no right to, and will not bring any legal claim or action for, any damages for (a) having to exercise any vested portion of this option within any period after termination as specified in Section 4 or (b) cancellation of any unvested, or vested but unexercised, portion of this option.
|
13.
|
Acknowledgment
. By the Optionee’s acceptance below, the Optionee acknowledges that the Optionee has received and has read, understood, and accepted all the terms, conditions, and restrictions of this Agreement, the Plan, and the current policies referenced in paragraph 2(b) of this Agreement. The Optionee understands and agrees that this option is subject to all the terms, conditions, and restrictions stated in this Agreement and in the other documents referenced in the preceding sentence, as the latter may be amended from time to time in the Company’s sole discretion.
|
14.
|
Board Approval
. This option has been granted pursuant to the Plan and accordingly is subject to approval by an authorized committee of the Board of Directors. If this option has not already been approved, the Company agrees to submit this grant for approval as soon as practical. If such approval is not obtained, this award is null and void.
|
15.
|
Governing Law
. This option shall be governed by the laws of the state of Iowa.
|
|
United Fire Group, Inc.
|
|
|
|
,
|
|
Awardee
|
Date:
|
|
|
Print Name:
|
1.
|
I have reviewed this quarterly report on Form 10-Q of United Fire Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the Consolidated Financial Statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
August 5, 2014
|
|
|
|
|
|
|
/s/ Randy A. Ramlo
|
|
|
Randy A. Ramlo
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of United Fire Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the Consolidated Financial Statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
August 5, 2014
|
|
|
|
|
|
|
/s/ Dianne M. Lyons
|
|
|
Dianne M. Lyons
|
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or Section 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.
|
Date:
|
August 5, 2014
|
|
|
|
|
|
|
/s/ Randy A. Ramlo
|
|
|
Randy A. Ramlo
|
|
|
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or Section 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.
|
Date:
|
August 5, 2014
|
|
|
|
|
|
|
/s/ Dianne M. Lyons
|
|
|
Dianne M. Lyons
|
|
|
Chief Financial Officer
|