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Iowa
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45-2302834
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(State of Incorporation)
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(IRS Employer Identification No.)
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Large accelerated filer
R
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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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Emerging growth company
o
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Signatur
es
|
•
|
The frequency and severity of claims, including those related to catastrophe losses and the impact those claims have on our loss reserve adequacy; the occurrence of catastrophic events, including international events, significant severe weather conditions, climate change, acts of terrorism, acts of war and pandemics;
|
•
|
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;
|
•
|
The potential disruption of our operations and reputation due to unauthorized data access, cyber-attacks or cyber-terrorism and other security breaches;
|
•
|
Developments in general economic conditions, domestic and global financial markets, interest rates and other-than-temporary impairment losses that could affect the performance of our investment portfolio;
|
•
|
Our ability to effectively underwrite and adequately price insured risks;
|
•
|
Changes in industry trends, an increase in competition and significant industry developments;
|
•
|
Litigation or regulatory actions that could require us to pay significant damages, fines or penalties or change the way we do business;
|
•
|
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;
|
•
|
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; changes in laws, regulations and stock exchange requirements relating to corporate governance and the cost of compliance;
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•
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Our relationship with and the financial strength of our reinsurers; and
|
•
|
Competitive, legal, regulatory or tax changes that affect the distribution cost or demand for our products through our independent agent/agency distribution network.
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United Fire Group, Inc.
Consolidated Balance Sheets
|
|||||||
(In Thousands, Except Share Data)
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Investments
|
|
|
|
||||
Fixed maturities
|
|
|
|
||||
Held-to-maturity, at amortized cost (fair value $196 in 2017 and $199 in 2016)
|
$
|
195
|
|
|
$
|
198
|
|
Available-for-sale, at fair value (amortized cost $2,914,524 in 2017 and $2,887,505 in 2016)
|
2,932,188
|
|
|
2,898,126
|
|
||
Trading securities, at fair value (amortized cost $13,264 in 2017 and $13,054 in 2016)
|
14,971
|
|
|
14,390
|
|
||
Equity securities
|
|
|
|
||||
Available-for-sale, at fair value (cost $67,977 in 2017 and $68,504 in 2016)
|
275,684
|
|
|
270,416
|
|
||
Trading securities, at fair value (cost $5,861 in 2017 and $5,434 in 2016)
|
6,183
|
|
|
5,644
|
|
||
Mortgage loans
|
3,640
|
|
|
3,706
|
|
||
Policy loans
|
5,396
|
|
|
5,366
|
|
||
Other long-term investments
|
67,024
|
|
|
67,639
|
|
||
Short-term investments
|
175
|
|
|
175
|
|
||
|
3,305,456
|
|
|
3,265,660
|
|
||
Cash and cash equivalents
|
93,656
|
|
|
110,853
|
|
||
Accrued investment income
|
28,134
|
|
|
25,056
|
|
||
Premiums receivable (net of allowance for doubtful accounts of $1,056 in 2017 and $1,255 in 2016)
|
324,428
|
|
|
306,202
|
|
||
Deferred policy acquisition costs
|
165,073
|
|
|
164,112
|
|
||
Property and equipment
(primarily land and buildings, at cost, less accumulated depreciation of $50,222 in 2017 and $50,925 in 2016)
|
56,231
|
|
|
55,524
|
|
||
Reinsurance receivables and recoverables
|
70,057
|
|
|
69,413
|
|
||
Prepaid reinsurance premiums
|
3,841
|
|
|
3,782
|
|
||
Income taxes receivable
|
10,430
|
|
|
15,061
|
|
||
Goodwill and intangible assets
|
24,547
|
|
|
24,740
|
|
||
Other assets
|
15,132
|
|
|
14,355
|
|
||
TOTAL ASSETS
|
$
|
4,096,985
|
|
|
$
|
4,054,758
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Future policy benefits and losses, claims and loss settlement expenses
|
|
|
|
||||
Property and casualty insurance
|
$
|
1,140,719
|
|
|
$
|
1,123,896
|
|
Life insurance
|
1,342,966
|
|
|
1,350,503
|
|
||
Unearned premiums
|
467,105
|
|
|
443,873
|
|
||
Accrued expenses and other liabilities
|
145,190
|
|
|
159,014
|
|
||
Deferred income taxes
|
40,620
|
|
|
35,588
|
|
||
TOTAL LIABILITIES
|
$
|
3,136,600
|
|
|
$
|
3,112,874
|
|
Stockholders’ Equity
|
|
|
|
||||
Common stock, $0.001 par value; authorized 75,000,000 shares; 25,341,552 and 25,429,769 shares issued and outstanding in 2017 and 2016, respectively
|
$
|
25
|
|
|
$
|
25
|
|
Additional paid-in capital
|
213,021
|
|
|
216,482
|
|
||
Retained earnings
|
629,891
|
|
|
616,322
|
|
||
Accumulated other comprehensive income, net of tax
|
117,448
|
|
|
109,055
|
|
||
TOTAL STOCKHOLDERS’ EQUITY
|
$
|
960,385
|
|
|
$
|
941,884
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
4,096,985
|
|
|
$
|
4,054,758
|
|
|
Three Months Ended March 31,
|
||||||
(In Thousands, Except Share Data)
|
2017
|
|
2016
|
||||
Revenues
|
|
|
|
||||
Net premiums earned
|
$
|
253,872
|
|
|
$
|
241,298
|
|
Investment income, net of investment expenses
|
25,035
|
|
|
22,224
|
|
||
Net realized investment gains (includes reclassifications for net unrealized investment gains on available-for-sale securities of $3,405 in 2017 and $1,646 in 2016; previously included in accumulated other comprehensive income)
|
3,954
|
|
|
2,055
|
|
||
Other income
|
198
|
|
|
108
|
|
||
Total revenues
|
$
|
283,059
|
|
|
$
|
265,685
|
|
Benefits, Losses and Expenses
|
|
|
|
||||
Losses and loss settlement expenses
|
$
|
167,623
|
|
|
$
|
142,128
|
|
Increase in liability for future policy benefits
|
8,579
|
|
|
12,552
|
|
||
Amortization of deferred policy acquisition costs
|
52,134
|
|
|
50,231
|
|
||
Other underwriting expenses (includes reclassifications for employee benefit costs of $1,352 in 2017 and $1,371 in 2016; previously included in accumulated other comprehensive income)
|
24,890
|
|
|
26,753
|
|
||
Interest on policyholders’ accounts
|
4,744
|
|
|
5,247
|
|
||
Total benefits, losses and expenses
|
$
|
257,970
|
|
|
$
|
236,911
|
|
Income before income taxes
|
$
|
25,089
|
|
|
$
|
28,774
|
|
Federal income tax expense (includes reclassifications of ($718) in 2017 and ($96) in 2016; previously included in accumulated other comprehensive income)
|
5,153
|
|
|
6,347
|
|
||
Net income
|
$
|
19,936
|
|
|
$
|
22,427
|
|
Other comprehensive income
|
|
|
|
||||
Change in net unrealized appreciation on investments
|
$
|
14,966
|
|
|
$
|
43,876
|
|
Change in liability for underfunded employee benefit plans
|
—
|
|
|
—
|
|
||
Other comprehensive income , before tax and reclassification adjustments
|
$
|
14,966
|
|
|
$
|
43,876
|
|
Income tax effect
|
(5,238
|
)
|
|
(15,357
|
)
|
||
Other comprehensive income, after tax, before reclassification adjustments
|
$
|
9,728
|
|
|
$
|
28,519
|
|
Reclassification adjustment for net realized investment gains included in income
|
$
|
(3,405
|
)
|
|
$
|
(1,646
|
)
|
Reclassification adjustment for employee benefit costs included in expense
|
1,352
|
|
|
1,371
|
|
||
Total reclassification adjustments, before tax
|
$
|
(2,053
|
)
|
|
$
|
(275
|
)
|
Income tax effect
|
718
|
|
|
96
|
|
||
Total reclassification adjustments, after tax
|
$
|
(1,335
|
)
|
|
$
|
(179
|
)
|
Comprehensive income
|
$
|
28,329
|
|
|
$
|
50,767
|
|
|
|
|
|
||||
Weighted average common shares outstanding
|
25,443,101
|
|
|
25,209,888
|
|
||
Basic earnings per common share
|
$
|
0.78
|
|
|
$
|
0.89
|
|
Diluted earnings per common share
|
0.77
|
|
|
0.88
|
|
(In Thousands, Except Share Data)
|
Three Months Ended March 31, 2017
|
||
|
|
||
Common stock
|
|
||
Balance, beginning of year
|
$
|
25
|
|
Shares repurchased (134,981 shares)
|
—
|
|
|
Shares issued for stock-based awards (46,764 shares)
|
—
|
|
|
Balance, end of period
|
$
|
25
|
|
|
|
||
Additional paid-in capital
|
|
||
Balance, beginning of year
|
$
|
216,482
|
|
Compensation expense and related tax benefit for stock-based award grants
|
1,044
|
|
|
Shares repurchased
|
(5,749
|
)
|
|
Shares issued for stock-based awards
|
1,244
|
|
|
Balance, end of period
|
$
|
213,021
|
|
|
|
||
Retained earnings
|
|
||
Balance, beginning of year
|
$
|
616,322
|
|
Net income
|
19,936
|
|
|
Dividends on common stock ($0.25 per share)
|
(6,367
|
)
|
|
Balance, end of period
|
$
|
629,891
|
|
|
|
||
Accumulated other comprehensive income, net of tax
|
|
||
Balance, beginning of year
|
$
|
109,055
|
|
Change in net unrealized investment appreciation
(1)
|
7,515
|
|
|
Change in liability for underfunded employee benefit plans
(2)
|
878
|
|
|
Balance, end of period
|
$
|
117,448
|
|
|
|
||
Summary of changes
|
|
||
Balance, beginning of year
|
$
|
941,884
|
|
Net income
|
19,936
|
|
|
All other changes in stockholders’ equity accounts
|
(1,435
|
)
|
|
Balance, end of period
|
$
|
960,385
|
|
(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.
|
|
Three Months Ended March 31,
|
||||||
(In Thousands)
|
2017
|
|
2016
|
||||
Cash Flows From Operating Activities
|
|
|
|
||||
Net income
|
$
|
19,936
|
|
|
$
|
22,427
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
||||
Net accretion of bond premium
|
3,901
|
|
|
3,447
|
|
||
Depreciation and amortization
|
1,165
|
|
|
1,626
|
|
||
Stock-based compensation expense
|
1,044
|
|
|
977
|
|
||
Net realized investment gains
|
(3,954
|
)
|
|
(2,055
|
)
|
||
Net cash flows from trading investments
|
(610
|
)
|
|
(129
|
)
|
||
Deferred income tax benefit
|
(134
|
)
|
|
322
|
|
||
Changes in:
|
|
|
|
||||
Accrued investment income
|
(3,078
|
)
|
|
(1,689
|
)
|
||
Premiums receivable
|
(18,226
|
)
|
|
(26,245
|
)
|
||
Deferred policy acquisition costs
|
(2,238
|
)
|
|
(3,579
|
)
|
||
Reinsurance receivables
|
(644
|
)
|
|
1,782
|
|
||
Prepaid reinsurance premiums
|
(59
|
)
|
|
(322
|
)
|
||
Income taxes receivable
|
4,631
|
|
|
—
|
|
||
Other assets
|
(777
|
)
|
|
(1,240
|
)
|
||
Future policy benefits and losses, claims and loss settlement expenses
|
26,590
|
|
|
23,965
|
|
||
Unearned premiums
|
23,232
|
|
|
21,001
|
|
||
Accrued expenses and other liabilities
|
(12,472
|
)
|
|
(7,205
|
)
|
||
Income taxes payable
|
—
|
|
|
728
|
|
||
Deferred income taxes
|
647
|
|
|
(548
|
)
|
||
Other, net
|
253
|
|
|
2,063
|
|
||
Total adjustments
|
$
|
19,271
|
|
|
$
|
12,899
|
|
Net cash provided by operating activities
|
$
|
39,207
|
|
|
$
|
35,326
|
|
Cash Flows From Investing Activities
|
|
|
|
||||
Proceeds from sale of available-for-sale investments
|
$
|
5,059
|
|
|
$
|
1,968
|
|
Proceeds from call and maturity of held-to-maturity investments
|
3
|
|
|
8
|
|
||
Proceeds from call and maturity of available-for-sale investments
|
71,613
|
|
|
142,629
|
|
||
Proceeds from short-term and other investments
|
1,702
|
|
|
789
|
|
||
Purchase of available-for-sale investments
|
(103,623
|
)
|
|
(124,338
|
)
|
||
Purchase of short-term and other investments
|
(1,590
|
)
|
|
—
|
|
||
Net purchases and sales of property and equipment
|
(1,392
|
)
|
|
(569
|
)
|
||
Net cash (used in) provided by investing activities
|
$
|
(28,228
|
)
|
|
$
|
20,487
|
|
Cash Flows From Financing Activities
|
|
|
|
||||
Policyholders’ account balances
|
|
|
|
||||
Deposits to investment and universal life contracts
|
$
|
20,630
|
|
|
$
|
25,145
|
|
Withdrawals from investment and universal life contracts
|
(37,934
|
)
|
|
(41,954
|
)
|
||
Payment of cash dividends
|
(6,367
|
)
|
|
(5,553
|
)
|
||
Repurchase of common stock
|
(5,749
|
)
|
|
—
|
|
||
Issuance of common stock
|
1,244
|
|
|
4,745
|
|
||
Tax impact from issuance of common stock
|
—
|
|
|
(664
|
)
|
||
Net cash used in financing activities
|
$
|
(28,176
|
)
|
|
$
|
(18,281
|
)
|
Net Change in Cash and Cash Equivalents
|
$
|
(17,197
|
)
|
|
$
|
37,532
|
|
Cash and Cash Equivalents at Beginning of Period
|
110,853
|
|
|
106,449
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
93,656
|
|
|
$
|
143,981
|
|
|
|
|
|
||||||||
|
Property & Casualty Insurance
|
|
Life Insurance
|
|
Total
|
||||||
Recorded asset at beginning of period
|
$
|
93,362
|
|
|
$
|
70,750
|
|
|
$
|
164,112
|
|
Underwriting costs deferred
|
53,084
|
|
|
1,288
|
|
|
54,372
|
|
|||
Amortization of deferred policy acquisition costs
|
(50,461
|
)
|
|
(1,673
|
)
|
|
(52,134
|
)
|
|||
Ending unamortized deferred policy acquisition costs
|
$
|
95,985
|
|
|
$
|
70,365
|
|
|
$
|
166,350
|
|
Impact of unrealized gains and losses on available-for-sale securities
|
—
|
|
|
(1,277
|
)
|
|
(1,277
|
)
|
|||
Recorded asset at March 31, 2017
|
$
|
95,985
|
|
|
$
|
69,088
|
|
|
$
|
165,073
|
|
March 31, 2017
|
|
||||||||||||||
Type of Investment
|
Cost or Amortized Cost
|
|
Gross Unrealized Appreciation
|
|
Gross Unrealized Depreciation
|
|
Fair Value
|
||||||||
HELD-TO-MATURITY
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
Corporate bonds - financial services
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
150
|
|
Mortgage-backed securities
|
45
|
|
|
1
|
|
|
—
|
|
|
46
|
|
||||
Total Held-to-Maturity Fixed Maturities
|
$
|
195
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
196
|
|
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
22,142
|
|
|
$
|
73
|
|
|
$
|
100
|
|
|
$
|
22,115
|
|
U.S. government agency
|
70,671
|
|
|
1,426
|
|
|
438
|
|
|
71,659
|
|
||||
States, municipalities and political subdivisions
|
|
|
|
|
|
|
|
||||||||
General obligations:
|
|
|
|
|
|
|
|
||||||||
Midwest
|
133,706
|
|
|
1,873
|
|
|
1,068
|
|
|
134,511
|
|
||||
Northeast
|
56,241
|
|
|
1,042
|
|
|
177
|
|
|
57,106
|
|
||||
South
|
144,366
|
|
|
1,455
|
|
|
2,298
|
|
|
143,523
|
|
||||
West
|
123,026
|
|
|
1,558
|
|
|
1,839
|
|
|
122,745
|
|
||||
Special revenue:
|
|
|
|
|
|
|
|
||||||||
Midwest
|
165,789
|
|
|
2,412
|
|
|
1,326
|
|
|
166,875
|
|
||||
Northeast
|
72,489
|
|
|
558
|
|
|
2,323
|
|
|
70,724
|
|
||||
South
|
258,835
|
|
|
2,020
|
|
|
5,954
|
|
|
254,901
|
|
||||
West
|
148,390
|
|
|
1,701
|
|
|
3,717
|
|
|
146,374
|
|
||||
Foreign bonds
|
59,295
|
|
|
2,076
|
|
|
—
|
|
|
61,371
|
|
||||
Public utilities
|
211,412
|
|
|
3,987
|
|
|
427
|
|
|
214,972
|
|
||||
Corporate bonds
|
|
|
|
|
|
|
|
||||||||
Energy
|
103,194
|
|
|
2,190
|
|
|
193
|
|
|
105,191
|
|
||||
Industrials
|
222,476
|
|
|
5,017
|
|
|
498
|
|
|
226,995
|
|
||||
Consumer goods and services
|
176,581
|
|
|
4,089
|
|
|
269
|
|
|
180,401
|
|
||||
Health care
|
75,951
|
|
|
2,039
|
|
|
37
|
|
|
77,953
|
|
||||
Technology, media and telecommunications
|
143,113
|
|
|
2,562
|
|
|
700
|
|
|
144,975
|
|
||||
Financial services
|
272,088
|
|
|
5,720
|
|
|
929
|
|
|
276,879
|
|
||||
Mortgage-backed securities
|
16,366
|
|
|
166
|
|
|
250
|
|
|
16,282
|
|
||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
|
||||||||
Government national mortgage association
|
156,554
|
|
|
1,483
|
|
|
2,451
|
|
|
155,586
|
|
||||
Federal home loan mortgage corporation
|
178,052
|
|
|
1,886
|
|
|
3,453
|
|
|
176,485
|
|
Federal national mortgage association
|
99,420
|
|
|
1,907
|
|
|
1,090
|
|
|
100,237
|
|
||||
Asset-backed securities
|
4,367
|
|
|
147
|
|
|
186
|
|
|
4,328
|
|
||||
Total Available-for-Sale Fixed Maturities
|
$
|
2,914,524
|
|
|
$
|
47,387
|
|
|
$
|
29,723
|
|
|
$
|
2,932,188
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
|
|
|
|
|
|
|
||||||||
Public utilities
|
$
|
6,394
|
|
|
$
|
14,691
|
|
|
$
|
125
|
|
|
$
|
20,960
|
|
Energy
|
6,514
|
|
|
7,828
|
|
|
29
|
|
|
14,313
|
|
||||
Industrials
|
13,117
|
|
|
42,387
|
|
|
175
|
|
|
55,329
|
|
||||
Consumer goods and services
|
10,074
|
|
|
15,272
|
|
|
64
|
|
|
25,282
|
|
||||
Health care
|
7,763
|
|
|
22,065
|
|
|
—
|
|
|
29,828
|
|
||||
Technology, media and telecommunications
|
6,009
|
|
|
9,355
|
|
|
59
|
|
|
15,305
|
|
||||
Financial services
|
17,069
|
|
|
96,587
|
|
|
50
|
|
|
113,606
|
|
||||
Nonredeemable preferred stocks
|
1,037
|
|
|
24
|
|
|
—
|
|
|
1,061
|
|
||||
Total Available-for-Sale Equity Securities
|
$
|
67,977
|
|
|
$
|
208,209
|
|
|
$
|
502
|
|
|
$
|
275,684
|
|
Total Available-for-Sale Securities
|
$
|
2,982,501
|
|
|
$
|
255,596
|
|
|
$
|
30,225
|
|
|
$
|
3,207,872
|
|
December 31, 2016
|
|
||||||||||||||
Type of Investment
|
Cost or Amortized Cost
|
|
Gross Unrealized Appreciation
|
|
Gross Unrealized Depreciation
|
|
Fair Value
|
||||||||
HELD-TO-MATURITY
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
Corporate bonds - financial services
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
150
|
|
Mortgage-backed securities
|
48
|
|
|
1
|
|
|
—
|
|
|
49
|
|
||||
Total Held-to-Maturity Fixed Maturities
|
$
|
198
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
199
|
|
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
23,216
|
|
|
$
|
87
|
|
|
$
|
108
|
|
|
$
|
23,195
|
|
U.S. government agency
|
76,692
|
|
|
1,445
|
|
|
540
|
|
|
77,597
|
|
||||
States, municipalities and political subdivisions
|
|
|
|
|
|
|
|
||||||||
General obligations:
|
|
|
|
|
|
|
|
||||||||
Midwest
|
143,747
|
|
|
1,808
|
|
|
1,412
|
|
|
144,143
|
|
||||
Northeast
|
57,731
|
|
|
909
|
|
|
231
|
|
|
58,409
|
|
||||
South
|
129,475
|
|
|
1,249
|
|
|
2,355
|
|
|
128,369
|
|
||||
West
|
114,524
|
|
|
1,380
|
|
|
2,173
|
|
|
113,731
|
|
||||
Special revenue:
|
|
|
|
|
|
|
|
||||||||
Midwest
|
167,430
|
|
|
2,313
|
|
|
1,433
|
|
|
168,310
|
|
||||
Northeast
|
70,202
|
|
|
487
|
|
|
2,624
|
|
|
68,065
|
|
||||
South
|
244,225
|
|
|
1,753
|
|
|
6,791
|
|
|
239,187
|
|
||||
West
|
134,287
|
|
|
1,509
|
|
|
4,052
|
|
|
131,744
|
|
||||
Foreign bonds
|
62,995
|
|
|
2,239
|
|
|
—
|
|
|
65,234
|
|
||||
Public utilities
|
212,360
|
|
|
3,761
|
|
|
447
|
|
|
215,674
|
|
||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|||||||
Energy
|
107,084
|
|
|
2,195
|
|
|
419
|
|
|
108,860
|
|
||||
Industrials
|
225,526
|
|
|
5,359
|
|
|
982
|
|
|
229,903
|
|
||||
Consumer goods and services
|
178,135
|
|
|
3,847
|
|
|
295
|
|
|
181,687
|
|
||||
Health care
|
81,211
|
|
|
2,063
|
|
|
151
|
|
|
83,123
|
|
||||
Technology, media and telecommunications
|
143,402
|
|
|
2,029
|
|
|
819
|
|
|
144,612
|
|
||||
Financial services
|
269,981
|
|
|
5,328
|
|
|
1,358
|
|
|
273,951
|
|
||||
Mortgage-backed securities
|
17,288
|
|
|
201
|
|
|
241
|
|
|
17,248
|
|
||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
|
||||||||
Government national mortgage association
|
145,947
|
|
|
1,279
|
|
|
2,766
|
|
|
144,460
|
|
||||
Federal home loan mortgage corporation
|
176,226
|
|
|
1,638
|
|
|
3,406
|
|
|
174,458
|
|
||||
Federal national mortgage association
|
101,414
|
|
|
1,816
|
|
|
1,334
|
|
|
101,896
|
|
||||
Asset-backed securities
|
4,407
|
|
|
145
|
|
|
282
|
|
|
4,270
|
|
||||
Total Available-for-Sale Fixed Maturities
|
$
|
2,887,505
|
|
|
$
|
44,840
|
|
|
$
|
34,219
|
|
|
$
|
2,898,126
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
|
|
|
|
|
|
|
||||||||
Public utilities
|
$
|
6,394
|
|
|
$
|
13,465
|
|
|
$
|
188
|
|
|
$
|
19,671
|
|
Energy
|
6,514
|
|
|
8,555
|
|
|
22
|
|
|
15,047
|
|
||||
Industrials
|
13,252
|
|
|
38,715
|
|
|
173
|
|
|
51,794
|
|
||||
Consumer goods and services
|
10,324
|
|
|
13,851
|
|
|
58
|
|
|
24,117
|
|
||||
Health care
|
7,763
|
|
|
19,657
|
|
|
—
|
|
|
27,420
|
|
||||
Technology, media and telecommunications
|
5,931
|
|
|
9,476
|
|
|
38
|
|
|
15,369
|
|
||||
Financial services
|
17,289
|
|
|
98,728
|
|
|
67
|
|
|
115,950
|
|
||||
Nonredeemable preferred stocks
|
1,037
|
|
|
11
|
|
|
—
|
|
|
1,048
|
|
||||
Total Available-for-Sale Equity Securities
|
$
|
68,504
|
|
|
$
|
202,458
|
|
|
$
|
546
|
|
|
$
|
270,416
|
|
Total Available-for-Sale Securities
|
$
|
2,956,009
|
|
|
$
|
247,298
|
|
|
$
|
34,765
|
|
|
$
|
3,168,542
|
|
|
Held-To-Maturity
|
|
Available-For-Sale
|
|
Trading
|
||||||||||||||||||
March 31, 2017
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||||||
Due in one year or less
|
$
|
150
|
|
|
$
|
150
|
|
|
$
|
125,861
|
|
|
$
|
126,941
|
|
|
$
|
2,593
|
|
|
$
|
2,815
|
|
Due after one year through five years
|
—
|
|
|
—
|
|
|
814,770
|
|
|
835,999
|
|
|
7,213
|
|
|
8,396
|
|
||||||
Due after five years through 10 years
|
—
|
|
|
—
|
|
|
802,379
|
|
|
812,933
|
|
|
1,302
|
|
|
1,377
|
|
||||||
Due after 10 years
|
—
|
|
|
—
|
|
|
716,755
|
|
|
703,397
|
|
|
2,156
|
|
|
2,383
|
|
||||||
Asset-backed securities
|
—
|
|
|
—
|
|
|
4,367
|
|
|
4,328
|
|
|
—
|
|
|
—
|
|
||||||
Mortgage-backed securities
|
45
|
|
|
46
|
|
|
16,366
|
|
|
16,282
|
|
|
—
|
|
|
—
|
|
||||||
Collateralized mortgage obligations
|
—
|
|
|
—
|
|
|
434,026
|
|
|
432,308
|
|
|
—
|
|
|
—
|
|
||||||
|
$
|
195
|
|
|
$
|
196
|
|
|
$
|
2,914,524
|
|
|
$
|
2,932,188
|
|
|
$
|
13,264
|
|
|
$
|
14,971
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net realized investment gains
|
|
|
|
||||
Fixed maturities:
|
|
|
|
||||
Available-for-sale
|
$
|
1,995
|
|
|
$
|
516
|
|
Trading securities
|
|
|
|
||||
Change in fair value
|
371
|
|
|
273
|
|
||
Sales
|
57
|
|
|
—
|
|
||
Equity securities:
|
|
|
|
||||
Available-for-sale
|
1,410
|
|
|
984
|
|
||
Trading securities
|
|
|
|
||||
Change in fair value
|
111
|
|
|
93
|
|
||
Sales
|
10
|
|
|
—
|
|
||
Short-term investments
|
—
|
|
|
43
|
|
||
Cash equivalents
|
—
|
|
|
146
|
|
||
Total net realized investment gains
|
$
|
3,954
|
|
|
$
|
2,055
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Proceeds from sales
|
$
|
5,059
|
|
|
$
|
1,968
|
|
Gross realized gains
|
2,222
|
|
|
921
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Change in net unrealized investment appreciation
|
|
|
|
||||
Available-for-sale fixed maturities
|
$
|
7,043
|
|
|
$
|
52,556
|
|
Available-for-sale equity securities
|
5,795
|
|
|
1,359
|
|
||
Deferred policy acquisition costs
|
(1,277
|
)
|
|
(11,685
|
)
|
||
Income tax effect
|
(4,046
|
)
|
|
(14,781
|
)
|
||
Total change in net unrealized investment appreciation, net of tax
|
$
|
7,515
|
|
|
$
|
27,449
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
March 31, 2017
|
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
|
11
|
|
|
$
|
11,779
|
|
|
$
|
100
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,779
|
|
|
$
|
100
|
|
U.S. government agency
|
9
|
|
|
33,651
|
|
|
438
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,651
|
|
|
438
|
|
||||||
States, municipalities and political subdivisions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
General obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Midwest
|
16
|
|
|
32,139
|
|
|
1,068
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,139
|
|
|
1,068
|
|
||||||
Northeast
|
4
|
|
|
6,939
|
|
|
177
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,939
|
|
|
177
|
|
||||||
South
|
28
|
|
|
60,252
|
|
|
2,298
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,252
|
|
|
2,298
|
|
||||||
West
|
23
|
|
|
48,967
|
|
|
1,839
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,967
|
|
|
1,839
|
|
||||||
Special revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Midwest
|
30
|
|
|
51,512
|
|
|
1,326
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,512
|
|
|
1,326
|
|
||||||
Northeast
|
21
|
|
|
51,512
|
|
|
2,323
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,512
|
|
|
2,323
|
|
||||||
South
|
69
|
|
|
142,601
|
|
|
5,954
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
142,601
|
|
|
5,954
|
|
||||||
West
|
36
|
|
|
75,008
|
|
|
3,717
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,008
|
|
|
3,717
|
|
||||||
Public utilities
|
17
|
|
|
32,195
|
|
|
389
|
|
|
3
|
|
|
2,107
|
|
|
38
|
|
|
34,302
|
|
|
427
|
|
||||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Energy
|
4
|
|
|
6,951
|
|
|
173
|
|
|
1
|
|
|
4,174
|
|
|
20
|
|
|
11,125
|
|
|
193
|
|
||||||
Industrials
|
16
|
|
|
26,794
|
|
|
297
|
|
|
2
|
|
|
4,758
|
|
|
201
|
|
|
31,552
|
|
|
498
|
|
||||||
Consumer goods and services
|
11
|
|
|
20,912
|
|
|
269
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,912
|
|
|
269
|
|
||||||
Health care
|
3
|
|
|
8,472
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,472
|
|
|
37
|
|
||||||
Technology, media and telecommunications
|
13
|
|
|
32,671
|
|
|
397
|
|
|
3
|
|
|
10,222
|
|
|
303
|
|
|
42,893
|
|
|
700
|
|
||||||
Financial services
|
24
|
|
|
51,512
|
|
|
929
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,512
|
|
|
929
|
|
||||||
Mortgage-backed securities
|
19
|
|
|
9,301
|
|
|
195
|
|
|
4
|
|
|
1,087
|
|
|
55
|
|
|
10,388
|
|
|
250
|
|
||||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Government national mortgage association
|
36
|
|
|
82,052
|
|
|
1,830
|
|
|
10
|
|
|
17,273
|
|
|
621
|
|
|
99,325
|
|
|
2,451
|
|
||||||
Federal home loan mortgage corporation
|
40
|
|
|
100,351
|
|
|
3,223
|
|
|
3
|
|
|
4,969
|
|
|
230
|
|
|
105,320
|
|
|
3,453
|
|
||||||
Federal national mortgage association
|
23
|
|
|
39,294
|
|
|
857
|
|
|
4
|
|
|
4,180
|
|
|
233
|
|
|
43,474
|
|
|
1,090
|
|
||||||
Asset-backed securities
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2,647
|
|
|
186
|
|
|
2,647
|
|
|
186
|
|
||||||
Total Available-for-Sale Fixed Maturities
|
453
|
|
|
$
|
924,865
|
|
|
$
|
27,836
|
|
|
31
|
|
|
$
|
51,417
|
|
|
$
|
1,887
|
|
|
$
|
976,282
|
|
|
$
|
29,723
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Common stocks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Public utilities
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
3
|
|
|
$
|
183
|
|
|
$
|
125
|
|
|
$
|
183
|
|
|
$
|
125
|
|
Energy
|
1
|
|
|
190
|
|
|
2
|
|
|
1
|
|
|
158
|
|
|
27
|
|
|
348
|
|
|
29
|
|
||||||
Industrials
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
237
|
|
|
175
|
|
|
237
|
|
|
175
|
|
||||||
Consumer goods and services
|
1
|
|
|
22
|
|
|
1
|
|
|
4
|
|
|
269
|
|
|
63
|
|
|
291
|
|
|
64
|
|
||||||
Technology, media and telecommunications
|
8
|
|
|
93
|
|
|
16
|
|
|
8
|
|
|
22
|
|
|
43
|
|
|
115
|
|
|
59
|
|
||||||
Financial services
|
3
|
|
|
53
|
|
|
2
|
|
|
2
|
|
|
165
|
|
|
48
|
|
|
218
|
|
|
50
|
|
||||||
Total Available-for-Sale Equity Securities
|
13
|
|
|
$
|
358
|
|
|
$
|
21
|
|
|
24
|
|
|
$
|
1,034
|
|
|
$
|
481
|
|
|
$
|
1,392
|
|
|
$
|
502
|
|
Total Available-for-Sale Securities
|
466
|
|
|
$
|
925,223
|
|
|
$
|
27,857
|
|
|
55
|
|
|
$
|
52,451
|
|
|
$
|
2,368
|
|
|
$
|
977,674
|
|
|
$
|
30,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2016
|
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
|
9
|
|
|
$
|
10,800
|
|
|
$
|
108
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,800
|
|
|
$
|
108
|
|
U.S. government agency
|
10
|
|
|
36,593
|
|
|
540
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,593
|
|
|
540
|
|
||||||
States, municipalities and political subdivisions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
General obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Midwest
|
27
|
|
|
40,545
|
|
|
1,412
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40,545
|
|
|
1,412
|
|
||||||
Northeast
|
9
|
|
|
9,874
|
|
|
231
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,874
|
|
|
231
|
|
||||||
South
|
37
|
|
|
53,699
|
|
|
2,355
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53,699
|
|
|
2,355
|
|
||||||
West
|
30
|
|
|
55,265
|
|
|
2,173
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,265
|
|
|
2,173
|
|
||||||
Special revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Midwest
|
41
|
|
|
62,937
|
|
|
1,433
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62,937
|
|
|
1,433
|
|
||||||
Northeast
|
22
|
|
|
54,993
|
|
|
2,624
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54,993
|
|
|
2,624
|
|
||||||
South
|
79
|
|
|
152,979
|
|
|
6,791
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
152,979
|
|
|
6,791
|
|
||||||
West
|
44
|
|
|
81,676
|
|
|
4,052
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81,676
|
|
|
4,052
|
|
||||||
Public utilities
|
20
|
|
|
38,511
|
|
|
423
|
|
|
2
|
|
|
2,122
|
|
|
24
|
|
|
40,633
|
|
|
447
|
|
||||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Energy
|
8
|
|
|
15,938
|
|
|
313
|
|
|
3
|
|
|
8,232
|
|
|
106
|
|
|
24,170
|
|
|
419
|
|
||||||
Industrials
|
24
|
|
|
42,854
|
|
|
596
|
|
|
3
|
|
|
5,641
|
|
|
386
|
|
|
48,495
|
|
|
982
|
|
||||||
Consumer goods and services
|
11
|
|
|
21,059
|
|
|
295
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,059
|
|
|
295
|
|
||||||
Health care
|
9
|
|
|
20,918
|
|
|
151
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,918
|
|
|
151
|
|
||||||
Technology, media and telecommunications
|
16
|
|
|
41,230
|
|
|
516
|
|
|
3
|
|
|
10,241
|
|
|
303
|
|
|
51,471
|
|
|
819
|
|
||||||
Financial services
|
37
|
|
|
75,286
|
|
|
1,358
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,286
|
|
|
1,358
|
|
||||||
Mortgage-backed securities
|
16
|
|
|
9,611
|
|
|
187
|
|
|
5
|
|
|
1,198
|
|
|
54
|
|
|
10,809
|
|
|
241
|
|
||||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Government national mortgage association
|
36
|
|
|
82,430
|
|
|
2,261
|
|
|
9
|
|
|
13,603
|
|
|
505
|
|
|
96,033
|
|
|
2,766
|
|
||||||
Federal home loan mortgage corporation
|
41
|
|
|
105,775
|
|
|
3,165
|
|
|
3
|
|
|
5,141
|
|
|
241
|
|
|
110,916
|
|
|
3,406
|
|
||||||
Federal national mortgage association
|
27
|
|
|
46,633
|
|
|
1,091
|
|
|
4
|
|
|
4,341
|
|
|
243
|
|
|
50,974
|
|
|
1,334
|
|
||||||
Asset-backed securities
|
1
|
|
|
971
|
|
|
29
|
|
|
1
|
|
|
2,559
|
|
|
253
|
|
|
3,530
|
|
|
282
|
|
||||||
Total Available-for-Sale Fixed Maturities
|
554
|
|
|
$
|
1,060,577
|
|
|
$
|
32,104
|
|
|
33
|
|
|
$
|
53,078
|
|
|
$
|
2,115
|
|
|
$
|
1,113,655
|
|
|
$
|
34,219
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Common stocks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Public utilities
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
3
|
|
|
$
|
120
|
|
|
$
|
188
|
|
|
$
|
120
|
|
|
$
|
188
|
|
Energy
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
163
|
|
|
22
|
|
|
163
|
|
|
22
|
|
||||||
Industrials
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
239
|
|
|
173
|
|
|
239
|
|
|
173
|
|
||||||
Consumer goods and services
|
3
|
|
|
282
|
|
|
55
|
|
|
2
|
|
|
15
|
|
|
3
|
|
|
297
|
|
|
58
|
|
||||||
Technology, media and telecommunications
|
7
|
|
|
26
|
|
|
5
|
|
|
8
|
|
|
33
|
|
|
33
|
|
|
59
|
|
|
38
|
|
||||||
Financial services
|
3
|
|
|
53
|
|
|
3
|
|
|
2
|
|
|
150
|
|
|
64
|
|
|
203
|
|
|
67
|
|
||||||
Total Available-for-Sale Equity Securities
|
13
|
|
|
$
|
361
|
|
|
$
|
63
|
|
|
22
|
|
|
$
|
720
|
|
|
$
|
483
|
|
|
$
|
1,081
|
|
|
$
|
546
|
|
Total Available-for-Sale Securities
|
567
|
|
|
$
|
1,060,938
|
|
|
$
|
32,167
|
|
|
55
|
|
|
$
|
53,798
|
|
|
$
|
2,598
|
|
|
$
|
1,114,736
|
|
|
$
|
34,765
|
|
•
|
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.
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Investments
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Held-to-maturity securities
|
$
|
196
|
|
|
$
|
195
|
|
|
$
|
199
|
|
|
$
|
198
|
|
Available-for-sale securities
|
2,932,188
|
|
|
2,932,188
|
|
|
2,898,126
|
|
|
2,898,126
|
|
||||
Trading securities
|
14,971
|
|
|
14,971
|
|
|
14,390
|
|
|
14,390
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities
|
275,684
|
|
|
275,684
|
|
|
270,416
|
|
|
270,416
|
|
||||
Trading securities
|
6,183
|
|
|
6,183
|
|
|
5,644
|
|
|
5,644
|
|
||||
Mortgage loans
|
3,817
|
|
|
3,640
|
|
|
3,895
|
|
|
3,706
|
|
||||
Policy loans
|
5,396
|
|
|
5,396
|
|
|
5,366
|
|
|
5,366
|
|
||||
Other long-term investments
|
67,024
|
|
|
67,024
|
|
|
67,639
|
|
|
67,639
|
|
||||
Short-term investments
|
175
|
|
|
175
|
|
|
175
|
|
|
175
|
|
||||
Cash and cash equivalents
|
93,656
|
|
|
93,656
|
|
|
110,853
|
|
|
110,853
|
|
||||
Corporate-owned life insurance
|
3,000
|
|
|
3,000
|
|
|
2,592
|
|
|
2,592
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Policy reserves
|
|
|
|
|
|
|
|
||||||||
Annuity (accumulations)
(1)
|
$
|
640,973
|
|
|
$
|
649,395
|
|
|
$
|
646,764
|
|
|
$
|
666,711
|
|
Annuity (benefit payments)
|
142,968
|
|
|
94,385
|
|
|
144,283
|
|
|
95,129
|
|
March 31, 2017
|
|
|
Fair Value Measurements
|
||||||||||||
Description
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
22,115
|
|
|
$
|
—
|
|
|
$
|
22,115
|
|
|
$
|
—
|
|
U.S. government agency
|
71,659
|
|
|
—
|
|
|
71,659
|
|
|
—
|
|
||||
States, municipalities and political subdivisions
|
|
|
|
|
|
|
|
||||||||
General obligations
|
|
|
|
|
|
|
|
||||||||
Midwest
|
134,511
|
|
|
—
|
|
|
134,511
|
|
|
—
|
|
||||
Northeast
|
57,106
|
|
|
—
|
|
|
57,106
|
|
|
—
|
|
||||
South
|
143,523
|
|
|
—
|
|
|
143,523
|
|
|
—
|
|
||||
West
|
122,745
|
|
|
—
|
|
|
122,745
|
|
|
—
|
|
||||
Special revenue
|
|
|
|
|
|
|
|
||||||||
Midwest
|
166,875
|
|
|
—
|
|
|
166,707
|
|
|
168
|
|
||||
Northeast
|
70,724
|
|
|
—
|
|
|
70,724
|
|
|
—
|
|
||||
South
|
254,901
|
|
|
—
|
|
|
254,901
|
|
|
—
|
|
||||
West
|
146,374
|
|
|
—
|
|
|
146,374
|
|
|
—
|
|
||||
Foreign bonds
|
61,371
|
|
|
—
|
|
|
61,371
|
|
|
—
|
|
||||
Public utilities
|
214,972
|
|
|
—
|
|
|
214,972
|
|
|
—
|
|
||||
Corporate bonds
|
|
|
|
|
|
|
|
Energy
|
105,191
|
|
|
—
|
|
|
105,191
|
|
|
—
|
|
||||
Industrials
|
226,995
|
|
|
—
|
|
|
226,995
|
|
|
—
|
|
||||
Consumer goods and services
|
180,401
|
|
|
—
|
|
|
179,342
|
|
|
1,059
|
|
||||
Health care
|
77,953
|
|
|
—
|
|
|
77,953
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
144,975
|
|
|
—
|
|
|
144,975
|
|
|
—
|
|
||||
Financial services
|
276,879
|
|
|
—
|
|
|
268,444
|
|
|
8,435
|
|
||||
Mortgage-backed securities
|
16,282
|
|
|
—
|
|
|
16,282
|
|
|
—
|
|
||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
|
||||||||
Government national mortgage association
|
155,586
|
|
|
—
|
|
|
155,586
|
|
|
—
|
|
||||
Federal home loan mortgage corporation
|
176,485
|
|
|
—
|
|
|
176,485
|
|
|
—
|
|
||||
Federal national mortgage association
|
100,237
|
|
|
—
|
|
|
100,237
|
|
|
—
|
|
||||
Asset-backed securities
|
4,328
|
|
|
—
|
|
|
3,872
|
|
|
456
|
|
||||
Total Available-for-Sale Fixed Maturities
|
$
|
2,932,188
|
|
|
$
|
—
|
|
|
$
|
2,922,070
|
|
|
$
|
10,118
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
|
|
|
|
|
|
|
||||||||
Public utilities
|
$
|
20,960
|
|
|
$
|
20,960
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Energy
|
14,313
|
|
|
14,313
|
|
|
—
|
|
|
—
|
|
||||
Industrials
|
55,329
|
|
|
55,329
|
|
|
—
|
|
|
—
|
|
||||
Consumer goods and services
|
25,282
|
|
|
25,282
|
|
|
—
|
|
|
—
|
|
||||
Health care
|
29,828
|
|
|
29,828
|
|
|
—
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
15,305
|
|
|
15,305
|
|
|
—
|
|
|
—
|
|
||||
Financial services
|
113,606
|
|
|
109,483
|
|
|
—
|
|
|
4,123
|
|
||||
Nonredeemable preferred stocks
|
1,061
|
|
|
466
|
|
|
—
|
|
|
595
|
|
||||
Total Available-for-Sale Equity Securities
|
$
|
275,684
|
|
|
$
|
270,966
|
|
|
$
|
—
|
|
|
$
|
4,718
|
|
Total Available-for-Sale Securities
|
$
|
3,207,872
|
|
|
$
|
270,966
|
|
|
$
|
2,922,070
|
|
|
$
|
14,836
|
|
TRADING
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
||||
Industrials
|
$
|
3,761
|
|
|
$
|
—
|
|
|
$
|
3,761
|
|
|
$
|
—
|
|
Consumer goods and services
|
143
|
|
|
—
|
|
|
143
|
|
|
—
|
|
||||
Health care
|
3,597
|
|
|
—
|
|
|
3,597
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
1,195
|
|
|
—
|
|
|
1,195
|
|
|
—
|
|
||||
Financial services
|
4,567
|
|
|
—
|
|
|
4,567
|
|
|
—
|
|
||||
Asset-backed securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Redeemable preferred stocks
|
1,708
|
|
|
1,708
|
|
|
—
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Public utilities
|
621
|
|
|
621
|
|
|
—
|
|
|
—
|
|
||||
Energy
|
231
|
|
|
231
|
|
|
—
|
|
|
—
|
|
||||
Industrials
|
897
|
|
|
897
|
|
|
—
|
|
|
—
|
|
Consumer goods and services
|
1,168
|
|
|
1,168
|
|
|
—
|
|
|
—
|
|
||||
Health care
|
366
|
|
|
366
|
|
|
—
|
|
|
—
|
|
||||
Financial services
|
220
|
|
|
220
|
|
|
—
|
|
|
—
|
|
||||
Nonredeemable preferred stocks
|
2,680
|
|
|
2,680
|
|
|
—
|
|
|
—
|
|
||||
Total Trading Securities
|
$
|
21,154
|
|
|
$
|
7,891
|
|
|
$
|
13,263
|
|
|
$
|
—
|
|
Short-Term Investments
|
$
|
175
|
|
|
$
|
175
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money Market Accounts
|
$
|
19,124
|
|
|
$
|
19,124
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate-Owned Life Insurance
|
$
|
3,000
|
|
|
$
|
—
|
|
|
$
|
3,000
|
|
|
$
|
—
|
|
Total Assets Measured at Fair Value
|
$
|
3,251,325
|
|
|
$
|
298,156
|
|
|
$
|
2,938,333
|
|
|
$
|
14,836
|
|
December 31, 2016
|
|
|
Fair Value Measurements
|
||||||||||||
Description
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
23,195
|
|
|
$
|
—
|
|
|
$
|
23,195
|
|
|
$
|
—
|
|
U.S. government agency
|
77,597
|
|
|
—
|
|
|
77,597
|
|
|
—
|
|
||||
States, municipalities and political subdivisions
|
|
|
|
|
|
|
|
||||||||
General obligations
|
|
|
|
|
|
|
|
||||||||
Midwest
|
144,143
|
|
|
—
|
|
|
144,143
|
|
|
—
|
|
||||
Northeast
|
58,409
|
|
|
—
|
|
|
58,409
|
|
|
—
|
|
||||
South
|
128,369
|
|
|
—
|
|
|
128,369
|
|
|
—
|
|
||||
West
|
113,731
|
|
|
—
|
|
|
113,731
|
|
|
—
|
|
||||
Special revenue
|
|
|
|
|
|
|
|
||||||||
Midwest
|
168,310
|
|
|
—
|
|
|
168,142
|
|
|
168
|
|
||||
Northeast
|
68,065
|
|
|
—
|
|
|
68,065
|
|
|
—
|
|
||||
South
|
239,187
|
|
|
—
|
|
|
239,187
|
|
|
—
|
|
||||
West
|
131,744
|
|
|
—
|
|
|
131,744
|
|
|
—
|
|
||||
Foreign bonds
|
65,234
|
|
|
—
|
|
|
65,234
|
|
|
—
|
|
||||
Public utilities
|
215,674
|
|
|
—
|
|
|
215,674
|
|
|
—
|
|
||||
Corporate bonds
|
|
|
|
|
|
|
|
||||||||
Energy
|
108,860
|
|
|
—
|
|
|
108,860
|
|
|
—
|
|
||||
Industrials
|
229,903
|
|
|
—
|
|
|
229,903
|
|
|
—
|
|
||||
Consumer goods and services
|
181,687
|
|
|
—
|
|
|
180,590
|
|
|
1,097
|
|
||||
Health care
|
83,123
|
|
|
—
|
|
|
83,123
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
144,612
|
|
|
—
|
|
|
144,612
|
|
|
—
|
|
||||
Financial services
|
273,951
|
|
|
—
|
|
|
265,154
|
|
|
8,797
|
|
||||
Mortgage-backed securities
|
17,248
|
|
|
—
|
|
|
17,248
|
|
|
—
|
|
||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
|
||||||||
Government national mortgage association
|
144,460
|
|
|
—
|
|
|
144,460
|
|
|
—
|
|
||||
Federal home loan mortgage corporation
|
174,458
|
|
|
—
|
|
|
174,458
|
|
|
—
|
|
||||
Federal national mortgage association
|
101,896
|
|
|
—
|
|
|
101,896
|
|
|
—
|
|
||||
Asset-backed securities
|
4,270
|
|
|
—
|
|
|
3,821
|
|
|
449
|
|
||||
Total Available-for-Sale Fixed Maturities
|
$
|
2,898,126
|
|
|
$
|
—
|
|
|
$
|
2,887,615
|
|
|
$
|
10,511
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
|
|
|
|
|
|
|
||||||||
Public utilities
|
$
|
19,671
|
|
|
$
|
19,671
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Energy
|
15,047
|
|
|
15,047
|
|
|
—
|
|
|
—
|
|
||||
Industrials
|
51,794
|
|
|
51,794
|
|
|
—
|
|
|
—
|
|
||||
Consumer goods and services
|
24,117
|
|
|
24,117
|
|
|
—
|
|
|
—
|
|
||||
Health care
|
27,420
|
|
|
27,420
|
|
|
—
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
15,369
|
|
|
15,369
|
|
|
—
|
|
|
—
|
|
||||
Financial services
|
115,950
|
|
|
111,958
|
|
|
—
|
|
|
3,992
|
|
Nonredeemable preferred stocks
|
1,048
|
|
|
453
|
|
|
—
|
|
|
595
|
|
||||
Total Available-for-Sale Equity Securities
|
$
|
270,416
|
|
|
$
|
265,829
|
|
|
$
|
—
|
|
|
$
|
4,587
|
|
Total Available-for-Sale Securities
|
$
|
3,168,542
|
|
|
$
|
265,829
|
|
|
$
|
2,887,615
|
|
|
$
|
15,098
|
|
TRADING
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
|
|
|
|
|
|
|
||||||||
Industrials
|
$
|
3,919
|
|
|
$
|
—
|
|
|
$
|
3,919
|
|
|
$
|
—
|
|
Consumer goods and services
|
127
|
|
|
—
|
|
|
127
|
|
|
—
|
|
||||
Health care
|
3,410
|
|
|
—
|
|
|
3,410
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
787
|
|
|
—
|
|
|
787
|
|
|
—
|
|
||||
Financial services
|
4,842
|
|
|
—
|
|
|
4,842
|
|
|
—
|
|
||||
Redeemable preferred stocks
|
1,305
|
|
|
1,305
|
|
|
—
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Public utilities
|
613
|
|
|
613
|
|
|
—
|
|
|
—
|
|
||||
Energy
|
286
|
|
|
286
|
|
|
—
|
|
|
—
|
|
||||
Industrials
|
877
|
|
|
877
|
|
|
—
|
|
|
—
|
|
||||
Consumer goods and services
|
1,202
|
|
|
1,202
|
|
|
—
|
|
|
—
|
|
||||
Health care
|
339
|
|
|
339
|
|
|
—
|
|
|
—
|
|
||||
Financial services
|
206
|
|
|
206
|
|
|
—
|
|
|
—
|
|
||||
Nonredeemable preferred stocks
|
2,121
|
|
|
2,121
|
|
|
—
|
|
|
—
|
|
||||
Total Trading Securities
|
$
|
20,034
|
|
|
$
|
6,949
|
|
|
$
|
13,085
|
|
|
$
|
—
|
|
Short-Term Investments
|
$
|
175
|
|
|
$
|
175
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money Market Accounts
|
$
|
16,802
|
|
|
$
|
16,802
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate-Owned Life Insurance
|
$
|
2,592
|
|
|
$
|
—
|
|
|
$
|
2,592
|
|
|
$
|
—
|
|
Total Assets Measured at Fair Value
|
$
|
3,208,145
|
|
|
$
|
289,755
|
|
|
$
|
2,903,292
|
|
|
$
|
15,098
|
|
|
States, municipalities and political subdivisions
|
|
Corporate bonds
|
|
Asset-backed securities
|
|
Equities
|
|
Total
|
||||||||||
Balance at January 1, 2017
|
$
|
168
|
|
|
$
|
9,894
|
|
|
$
|
449
|
|
|
$
|
4,587
|
|
|
$
|
15,098
|
|
Net unrealized gains (losses)
(1)
|
—
|
|
|
(67
|
)
|
|
7
|
|
|
—
|
|
|
(60
|
)
|
|||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
145
|
|
|
145
|
|
|||||
Disposals
|
—
|
|
|
(333
|
)
|
|
—
|
|
|
(14
|
)
|
|
(347
|
)
|
|||||
Balance at March 31, 2017
|
$
|
168
|
|
|
$
|
9,494
|
|
|
$
|
456
|
|
|
$
|
4,718
|
|
|
$
|
14,836
|
|
|
|
|
|
||||
|
March 31, 2017
|
|
December 31, 2016
|
||||
Gross liability for losses and loss settlement expenses
at beginning of year |
$
|
1,123,896
|
|
|
$
|
1,003,895
|
|
Ceded losses and loss settlement expenses
|
(59,794
|
)
|
|
(54,653
|
)
|
||
Net liability for losses and loss settlement expenses
at beginning of year |
$
|
1,064,102
|
|
|
$
|
949,242
|
|
Losses and loss settlement expenses incurred
for claims occurring during |
|
|
|
||||
Current year
|
$
|
181,497
|
|
|
$
|
683,662
|
|
Prior years
|
(24,946
|
)
|
|
(31,229
|
)
|
||
Total incurred
|
$
|
156,551
|
|
|
$
|
652,433
|
|
Losses and loss settlement expense payments
for claims occurring during |
|
|
|
||||
Current year
|
$
|
39,100
|
|
|
$
|
277,053
|
|
Prior years
|
97,803
|
|
|
260,520
|
|
||
Total paid
|
$
|
136,903
|
|
|
$
|
537,573
|
|
Net liability for losses and loss settlement expenses
at end of year |
$
|
1,083,750
|
|
|
$
|
1,064,102
|
|
Ceded loss and loss settlement expenses
|
56,969
|
|
|
59,794
|
|
||
Gross liability for losses and loss settlement expenses
at end of year |
$
|
1,140,719
|
|
|
$
|
1,123,896
|
|
|
Pension Plan
|
|
Postretirement Benefit Plan
|
||||||||||||
Three Months Ended March 31,
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net periodic benefit cost
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1,714
|
|
|
$
|
1,623
|
|
|
$
|
505
|
|
|
$
|
932
|
|
Interest cost
|
1,765
|
|
|
1,663
|
|
|
482
|
|
|
754
|
|
||||
Expected return on plan assets
|
(2,412
|
)
|
|
(1,988
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
—
|
|
|
—
|
|
|
(1,352
|
)
|
|
—
|
|
||||
Amortization of net loss
|
890
|
|
|
992
|
|
|
461
|
|
|
379
|
|
||||
Net periodic benefit cost
|
$
|
1,957
|
|
|
$
|
2,290
|
|
|
$
|
96
|
|
|
$
|
2,065
|
|
Authorized Shares Available for Future Award Grants
|
Three Months Ended March 31, 2017
|
|
From Inception to March 31, 2017
|
||
Beginning balance
|
1,248,651
|
|
|
1,900,000
|
|
Additional shares authorized
|
—
|
|
|
1,500,000
|
|
Number of awards granted
|
(253,895
|
)
|
|
(2,866,461
|
)
|
Number of awards forfeited or expired
|
3,228
|
|
|
464,445
|
|
Ending balance
|
997,984
|
|
|
997,984
|
|
Number of option awards exercised
|
45,037
|
|
|
994,105
|
|
Number of unrestricted stock awards granted
|
—
|
|
|
7,325
|
|
Number of restricted stock awards vested
|
—
|
|
|
36,970
|
|
Authorized Shares Available for Future Award Grants
|
Three Months Ended March 31, 2017
|
|
From Inception to March 31, 2017
|
||
Beginning balance
|
74,771
|
|
|
300,000
|
|
Number of awards granted
|
—
|
|
|
(249,232
|
)
|
Number of awards forfeited or expired
|
—
|
|
|
24,003
|
|
Ending balance
|
74,771
|
|
|
74,771
|
|
Number of option awards exercised
|
1,727
|
|
|
54,200
|
|
Number of restricted stock awards vested
|
—
|
|
|
31,556
|
|
2017
|
|
$
|
3,250
|
|
2018
|
|
3,785
|
|
|
2019
|
|
2,718
|
|
|
2020
|
|
1,111
|
|
|
2021
|
|
393
|
|
|
2022
|
|
40
|
|
|
Total
|
|
$
|
11,297
|
|
|
Three Months Ended March 31,
|
||||||||||||||
(In Thousands, Except Share Data)
|
2017
|
|
2016
|
||||||||||||
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
Net income
|
$
|
19,936
|
|
|
$
|
19,936
|
|
|
$
|
22,427
|
|
|
$
|
22,427
|
|
Weighted-average common shares outstanding
|
25,443,101
|
|
|
25,443,101
|
|
|
25,209,888
|
|
|
25,209,888
|
|
||||
Add dilutive effect of restricted stock unit awards
|
—
|
|
|
248,717
|
|
|
—
|
|
|
154,742
|
|
||||
Add dilutive effect of stock options
|
—
|
|
|
162,363
|
|
|
—
|
|
|
231,807
|
|
||||
Weighted-average common shares
|
25,443,101
|
|
|
25,854,181
|
|
|
25,209,888
|
|
|
25,596,437
|
|
||||
Earnings per common share
|
$
|
0.78
|
|
|
$
|
0.77
|
|
|
$
|
0.89
|
|
|
$
|
0.88
|
|
Awards excluded from diluted earnings per share calculation
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
180,912
|
|
(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
(1)
|
|
Total
|
||||||
Balance as of January 1, 2017
|
$
|
133,892
|
|
|
$
|
(24,837
|
)
|
|
$
|
109,055
|
|
Change in accumulated other comprehensive income before reclassifications
|
9,728
|
|
|
—
|
|
|
9,728
|
|
|||
Reclassification adjustments from accumulated other comprehensive income (loss)
|
(2,213
|
)
|
|
878
|
|
|
(1,335
|
)
|
|||
Balance as of March 31, 2017
|
$
|
141,407
|
|
|
$
|
(23,959
|
)
|
|
$
|
117,448
|
|
|
/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 March 31,
|
|||||||||
(In Thousands)
|
2017
|
|
2016
|
|
%
|
|||||
Revenues
|
|
|
|
|
|
|||||
Net premiums earned
|
$
|
253,872
|
|
|
$
|
241,298
|
|
|
5.2
|
%
|
Investment income, net of investment expenses
|
25,035
|
|
|
22,224
|
|
|
12.6
|
|
||
Net realized investment gains
|
3,954
|
|
|
2,055
|
|
|
92.4
|
|
||
Other income
|
198
|
|
|
108
|
|
|
83.3
|
|
||
Total revenues
|
$
|
283,059
|
|
|
$
|
265,685
|
|
|
6.5
|
%
|
|
|
|
|
|
|
|||||
Benefits, Losses and Expenses
|
|
|
|
|
|
|||||
Losses and loss settlement expenses
|
$
|
167,623
|
|
|
$
|
142,128
|
|
|
17.9
|
%
|
Increase in liability for future policy benefits
|
8,579
|
|
|
12,552
|
|
|
(31.7
|
)
|
||
Amortization of deferred policy acquisition costs
|
52,134
|
|
|
50,231
|
|
|
3.8
|
|
||
Other underwriting expenses
|
24,890
|
|
|
26,753
|
|
|
(7.0
|
)
|
||
Interest on policyholders' accounts
|
4,744
|
|
|
5,247
|
|
|
(9.6
|
)
|
||
Total benefits, losses and expenses
|
$
|
257,970
|
|
|
$
|
236,911
|
|
|
8.9
|
%
|
|
|
|
|
|
|
|||||
Income before income taxes
|
$
|
25,089
|
|
|
$
|
28,774
|
|
|
(12.8
|
)%
|
Federal income tax expense
|
5,153
|
|
|
6,347
|
|
|
(18.8
|
)
|
||
Net income
|
$
|
19,936
|
|
|
$
|
22,427
|
|
|
(11.1
|
)%
|
|
Three Months Ended March 31,
|
||||||
(In Thousands, Except Ratios)
|
2017
|
|
2016
|
||||
Net premiums earned
|
$
|
236,444
|
|
|
$
|
220,225
|
|
Losses and loss settlement expenses
|
(156,552
|
)
|
|
(133,137
|
)
|
||
Amortization of deferred policy acquisition costs
|
(50,461
|
)
|
|
(48,413
|
)
|
||
Other underwriting expenses
|
(21,259
|
)
|
|
(21,619
|
)
|
||
Underwriting gain
|
$
|
8,172
|
|
|
$
|
17,056
|
|
|
|
|
|
||||
Investment income, net of investment expenses
|
12,585
|
|
|
9,372
|
|
||
Net realized investment gains
|
2,249
|
|
|
1,737
|
|
||
Income before income taxes
|
$
|
23,006
|
|
|
$
|
28,165
|
|
|
|
|
|
||||
GAAP Ratios:
|
|
|
|
||||
Net loss ratio (without catastrophes)
|
62.1
|
%
|
|
58.5
|
%
|
||
Catastrophes - effect on net loss ratio
|
4.1
|
|
|
2.0
|
|
||
Net loss ratio
(1)
|
66.2
|
%
|
|
60.5
|
%
|
||
Expense ratio
(2)
|
30.3
|
|
|
31.8
|
|
||
Combined ratio
(3)
|
96.5
|
%
|
|
92.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Three Months Ended March 31,
|
2017
|
|
2016
|
||||||||||||||||||
|
|
|
Net Losses
|
|
|
|
|
|
Net Losses
|
|
|
||||||||||
|
|
|
and Loss
|
|
|
|
|
|
and Loss
|
|
|
||||||||||
|
Net
|
|
Settlement
|
|
Net
|
|
Net
|
|
Settlement
|
|
Net
|
||||||||||
(In Thousands, Except Ratios)
|
Premiums
|
|
Expenses
|
|
Loss
|
|
Premiums
|
|
Expenses
|
|
Loss
|
||||||||||
Unaudited
|
Earned
|
|
Incurred
|
|
Ratio
|
|
Earned
|
|
Incurred
|
|
Ratio
|
||||||||||
Commercial lines
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other liability
|
$
|
74,080
|
|
|
$
|
12,050
|
|
|
16.3
|
%
|
|
$
|
69,334
|
|
|
$
|
33,361
|
|
|
48.1
|
%
|
Fire and allied lines
|
55,519
|
|
|
46,558
|
|
|
83.9
|
|
|
52,040
|
|
|
33,979
|
|
|
65.3
|
|
||||
Automobile
|
57,721
|
|
|
61,407
|
|
|
106.4
|
|
|
49,451
|
|
|
42,219
|
|
|
85.4
|
|
||||
Workers' compensation
|
24,483
|
|
|
16,629
|
|
|
67.9
|
|
|
24,583
|
|
|
11,644
|
|
|
47.4
|
|
||||
Fidelity and surety
|
5,897
|
|
|
316
|
|
|
5.4
|
|
|
5,194
|
|
|
(53
|
)
|
|
(1.0
|
)
|
||||
Miscellaneous
|
378
|
|
|
47
|
|
|
12.4
|
|
|
389
|
|
|
205
|
|
|
52.7
|
|
||||
Total commercial lines
|
$
|
218,078
|
|
|
$
|
137,007
|
|
|
62.8
|
%
|
|
$
|
200,991
|
|
|
$
|
121,355
|
|
|
60.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Personal lines
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fire and allied lines
|
$
|
10,788
|
|
|
$
|
6,645
|
|
|
61.6
|
%
|
|
$
|
10,718
|
|
|
$
|
6,305
|
|
|
58.8
|
%
|
Automobile
|
6,479
|
|
|
6,518
|
|
|
100.6
|
|
|
6,084
|
|
|
4,209
|
|
|
69.2
|
|
||||
Miscellaneous
|
279
|
|
|
(87
|
)
|
|
(31.2
|
)
|
|
261
|
|
|
183
|
|
|
70.1
|
|
||||
Total personal lines
|
$
|
17,546
|
|
|
$
|
13,076
|
|
|
74.5
|
%
|
|
$
|
17,063
|
|
|
$
|
10,697
|
|
|
62.7
|
%
|
Reinsurance assumed
|
$
|
820
|
|
|
$
|
6,469
|
|
|
NM
|
|
|
$
|
2,171
|
|
|
$
|
1,085
|
|
|
50.0
|
%
|
Total
|
$
|
236,444
|
|
|
$
|
156,552
|
|
|
66.2
|
%
|
|
$
|
220,225
|
|
|
$
|
133,137
|
|
|
60.5
|
%
|
•
|
Other liability -
The net loss ratio improved 31.8 percentage points in the
three-month period ended March 31, 2017
compared to the same period of
2016
. Several individual items, each with favorable changes, contributed to the improvement in the loss ratio: reserves for incurred but not reported claims decreased in 2017 compared to an increase in the same period of 2016; loss adjustment expense reserve reductions were greater in 2017 than in the same period of 2016; reserves for reported claims increased less in 2017 than in the same period of 2016; and loss adjustment expense payments were lower in 2017 than compared to the same period of 2016.
|
•
|
Commercial fire and allied lines
- The net loss ratio deteriorated 18.6 percentage points in the
three-month period ended March 31, 2017
compared to the same period of
2016
. The change is primarily due to a larger increase in reserves for incurred but not reported claims during 2017 compared to the same period of 2016, which is attributable to an increase in first quarter catastrophe claims.
|
•
|
Commercial automobile
- The net loss ratio deteriorated 21.0 percentage points in the
three-month period ended March 31, 2017
compared to the same period of
2016
. The change was due to an increase in frequency and severity of claims in 2017 as compared to the same period of 2016 due to a number of factors, including an increase in miles driven and distracted driving. We are implementing many initiatives to improve the profitability of this line of business, which include pricing increases, stricter underwriting guidelines, new analytical tools and more rigorous loss control requirements. Our expectation is that these efforts will take a few quarters before there is a decrease in the net loss ratio.
|
•
|
Workers' compensation
- The net loss ratio deteriorated 20.5 percentage points in the
three-month period ended March 31, 2017
compared to the same period of
2016
. The change was primarily due to an increase in frequency of large losses over $500,000 as compared to the same period of 2016. In the
three-month period ended March 31, 2017
, we received four claims over $500,000 compared to one claim in the same
|
•
|
Personal automobile
- The net loss ratio deteriorated 31.4 percentage points in the
three-month period ended March 31, 2017
compared to the same period of
2016
. The change is primarily attributable to an increase in paid losses combined with an increase in claim reserves in 2017 as compared to a decrease in claim reserves in the same period of 2016.
|
•
|
Reinsurance assumed
- The net loss ratio deteriorated in the
three-month period ended March 31, 2017
compared to the same period of
2016
. The increase in losses is primarily attributable to the emergence of prior year losses in the programs in which we participate, which are reported on a lag basis.
|
|
Three Months Ended March 31,
|
||||||
(In Thousands)
|
2017
|
|
2016
|
||||
Revenues
|
|
|
|
||||
Net premiums earned
|
$
|
17,428
|
|
|
$
|
21,073
|
|
Investment income, net of investment expenses
|
12,450
|
|
|
12,852
|
|
||
Net realized investment gains
|
1,705
|
|
|
318
|
|
||
Other income
|
198
|
|
|
108
|
|
||
Total revenues
|
$
|
31,781
|
|
|
$
|
34,351
|
|
|
|
|
|
||||
Benefits, Losses and Expenses
|
|
|
|
||||
Losses and loss settlement expenses
|
$
|
11,071
|
|
|
$
|
8,991
|
|
Increase in liability for future policy benefits
|
8,579
|
|
|
12,552
|
|
||
Amortization of deferred policy acquisition costs
|
1,673
|
|
|
1,818
|
|
||
Other underwriting expenses
|
3,631
|
|
|
5,134
|
|
||
Interest on policyholders' accounts
|
4,744
|
|
|
5,247
|
|
||
Total benefits, losses and expenses
|
$
|
29,698
|
|
|
$
|
33,742
|
|
|
|
|
|
||||
Income before income taxes
|
$
|
2,083
|
|
|
$
|
609
|
|
|
Property & Casualty Insurance Segment
|
|
Life Insurance Segment
|
|
Total
|
|||||||||||||||
|
|
|
Percent
|
|
|
|
|
Percent
|
|
|
|
|
Percent
|
|
||||||
(In Thousands, Except Ratios)
|
|
|
of Total
|
|
|
|
|
of Total
|
|
|
|
|
of Total
|
|
||||||
Fixed maturities
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Held-to-maturity
|
$
|
150
|
|
|
—
|
%
|
|
$
|
45
|
|
|
—
|
%
|
|
$
|
195
|
|
|
—
|
%
|
Available-for-sale
|
1,495,747
|
|
|
82.3
|
|
|
1,436,441
|
|
|
96.6
|
|
|
2,932,188
|
|
|
88.7
|
|
|||
Trading securities
|
14,971
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
14,971
|
|
|
0.5
|
|
|||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Available-for-sale
|
250,940
|
|
|
13.8
|
|
|
24,744
|
|
|
1.7
|
|
|
275,684
|
|
|
8.3
|
|
|||
Trading securities
|
6,183
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
6,183
|
|
|
0.2
|
|
|||
Mortgage loans
|
—
|
|
|
—
|
|
|
3,640
|
|
|
0.2
|
|
|
3,640
|
|
|
0.1
|
|
|||
Policy loans
|
—
|
|
|
—
|
|
|
5,396
|
|
|
0.4
|
|
|
5,396
|
|
|
0.2
|
|
|||
Other long-term investments
|
51,055
|
|
|
2.8
|
|
|
15,969
|
|
|
1.1
|
|
|
67,024
|
|
|
2.0
|
|
|||
Short-term investments
|
175
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
175
|
|
|
—
|
|
|||
Total
|
$
|
1,819,221
|
|
|
100.0
|
%
|
|
$
|
1,486,235
|
|
|
100.0
|
%
|
|
$
|
3,305,456
|
|
|
100.0
|
%
|
(In Thousands, Except Ratios)
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||
Rating
|
Carrying Value
|
|
% of Total
|
|
Carrying Value
|
|
% of Total
|
||||||
AAA
|
$
|
815,501
|
|
|
27.7
|
%
|
|
$
|
782,329
|
|
|
26.9
|
%
|
AA
|
885,637
|
|
|
30.0
|
|
|
857,946
|
|
|
29.4
|
|
||
A
|
630,293
|
|
|
21.4
|
|
|
651,696
|
|
|
22.4
|
|
||
Baa/BBB
|
551,101
|
|
|
18.7
|
|
|
554,475
|
|
|
19.0
|
|
||
Other/Not Rated
|
64,822
|
|
|
2.2
|
|
|
66,268
|
|
|
2.3
|
|
||
|
$
|
2,947,354
|
|
|
100.0
|
%
|
|
$
|
2,912,714
|
|
|
100.0
|
%
|
Cash Flow Summary
|
Three Months Ended March 31,
|
||||||
(In Thousands)
|
2017
|
|
2016
|
||||
Cash provided by (used in)
|
|
|
|
||||
Operating activities
|
$
|
39,207
|
|
|
$
|
35,326
|
|
Investing activities
|
(28,228
|
)
|
|
20,487
|
|
||
Financing activities
|
(28,176
|
)
|
|
(18,281
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
(17,197
|
)
|
|
$
|
37,532
|
|
|
Three Months Ended March 31,
|
||||||
(In Thousands)
|
2017
|
|
2016
|
||||
ISO catastrophes
|
$
|
9,738
|
|
|
$
|
3,938
|
|
Non-ISO catastrophes
(1)
|
(13
|
)
|
|
405
|
|
||
Total catastrophes
|
$
|
9,725
|
|
|
$
|
4,343
|
|
|
|
|
|
|
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
(1)
|
|||||
1/1/2017 - 1/31/2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
2,938,471
|
|
2/1/2017 - 2/28/2017
|
12,000
|
|
|
41.85
|
|
|
12,000
|
|
|
2,926,471
|
|
|
3/1/2017 - 3/31/2017
|
122,981
|
|
|
42.66
|
|
|
122,981
|
|
|
2,803,490
|
|
|
Total
|
134,981
|
|
|
$
|
42.59
|
|
|
134,981
|
|
|
|
Exhibit number
|
|
Exhibit description
|
|
Furnished herewith
|
Filed herewith
|
10.1
|
|
Form of Stock Award Agreement (Restricted Stock Units - Performance Units) under the United Fire Group, Inc. Stock Plan*
|
|
|
X
|
31.1
|
|
Certification of Randy A. Ramlo pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
X
|
31.2
|
|
Certification of Dawn M. Jaffray 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 Dawn M. Jaffray 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 March 31, 2017 formatted in XBRL: (i) Consolidated Balance Sheets at March 31, 2017 (unaudited) and December 31, 2016; (ii) Consolidated Statements of Income and Comprehensive Income (unaudited) for the three months ended March 31, 2017 and 2016; (iii) Consolidated Statement of Stockholders’ Equity (unaudited) for the three months ended March 31, 2017; (iv) Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2017 and 2016; and (v) Notes to Unaudited Consolidated Financial Statements, tagged as a block of text.
|
|
|
X
|
UNITED FIRE GROUP, INC.
|
|
|
(Registrant)
|
|
|
|
|
|
/s/ Randy A. Ramlo
|
|
/s/ Dawn M. Jaffray
|
Randy A. Ramlo
|
|
Dawn M. Jaffray
|
President, Chief Executive Officer,
|
|
Senior Vice President, Chief Financial Officer and
|
Director and Principal Executive Officer
|
|
Principal Accounting Officer
|
|
|
|
May 3, 2017
|
|
May 3, 2017
|
(Date)
|
|
(Date)
|
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 the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
May 3, 2017
|
|
|
|
|
|
|
/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 the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
May 3, 2017
|
|
|
|
|
|
|
/s/ Dawn M. Jaffray
|
|
|
Dawn M. Jaffray
|
|
|
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:
|
May 3, 2017
|
|
|
|
|
|
|
/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:
|
May 3, 2017
|
|
|
|
|
|
|
/s/ Dawn M. Jaffray
|
|
|
Dawn M. Jaffray
|
|
|
Chief Financial Officer
|