Iowa
|
|
45-2302834
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S Employer Identification No.)
|
118 Second Avenue SE
|
||
Cedar Rapids
|
Iowa
|
52401
|
(Address of principal executive offices) (Zip Code)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Common Stock, $0.001 par value
|
UFCS
|
The NASDAQ Global Select Market
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
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;
|
•
|
Geographic concentration risk in our property and casualty insurance business;
|
•
|
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;
|
•
|
Litigation or regulatory actions that could require us to pay significant damages, fines or penalties or change the way we do business;
|
•
|
Our ability to effectively underwrite and adequately price insured risks;
|
•
|
Changes in industry trends, an increase in competition and significant industry developments;
|
•
|
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;
|
•
|
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.
|
•
|
Strong agency relationships —
|
◦
|
A stable workforce, with an average duration of employment of approximately 9.6 years, allows our agents to work with the same, highly-experienced personnel each day.
|
◦
|
Our organization is relatively flat, allowing our agents to be close to the highest levels of management and ensuring that our agents will receive answers quickly to their questions.
|
•
|
Exceptional service — our agents and policyholders always have the option to speak with a real person.
|
•
|
Fair and prompt claims handling — we view claims as an opportunity to prove to our customers that they have chosen the right insurance company.
|
•
|
Disciplined underwriting — we empower our underwriters with the knowledge and tools needed to make good decisions for the Company.
|
•
|
Superior loss control services — our loss control representatives make multiple visits to businesses and job sites each year to ensure safety.
|
•
|
Effective and efficient use of technology — we use technology to provide enhanced service to our agents and policyholders, not to replace our personal relationships, but to reinforce them.
|
•
|
actuarial and statistical projections of the cost of settlement and administration of claims reflecting facts and circumstances then known;
|
•
|
historical claims information and loss emergence patterns;
|
•
|
assessments of currently available data;
|
•
|
estimates of future trends in claims severity and frequency;
|
•
|
judicial theories of liability;
|
•
|
economic factors such as inflation;
|
•
|
estimates and assumptions regarding social, judicial and legislative trends, and actions such as class action lawsuits and judicial interpretation of coverages or policy exclusions; and
|
•
|
the level of insurance fraud.
|
•
|
judicial expansion of policy coverage and the impact of new theories of liability;
|
•
|
an increase of plaintiffs targeting property and casualty insurers, including us, in purported class action litigation regarding claims handling and other practices;
|
•
|
medical developments that link health issues to particular causes, resulting in liability or workers' compensation (for example, cumulative trauma);
|
•
|
claims relating to unanticipated consequences of current or new technologies;
|
•
|
an increase in the variety, number and size of claims relating to liability losses, which often present complex coverage and damage valuation questions;
|
•
|
claims relating to potentially changing climate conditions, including higher frequency and severity of weather-related events; and
|
•
|
adverse changes in loss cost trends, including inflationary pressure in medical cost and auto and home repair costs.
|
•
|
Credit Risk - The value of our investment in marketable securities is subject to impairment as a result of deterioration in the creditworthiness of the issuer. Such impairments could reduce our net investment income and result in realized investment losses. The vast majority of our investments (99.3% at December 31, 2019) are made in investment-grade securities. Although we try to manage this risk by diversifying our portfolio and emphasizing credit quality, our investments are subject to losses as a result of a general downturn in the economy.
|
•
|
Interest Rate Risk - A significant portion of our investment portfolio (80.5 percent at December 31, 2019) consists of fixed income securities, primarily corporate and municipal bonds (69.9 percent at December 31, 2019). These securities are sensitive to changes in interest rates. An increase in interest rates typically reduces the fair value of fixed income securities, while a decline in interest rates reduces the investment income earned from future investments in fixed income securities. In recent periods, interest rates have been at or near historic lows. It is possible that this trend may continue for a prolonged period of time. We generally hold our fixed income securities to maturity, so our interest rate exposure does not usually result in realized losses. However, rising interest rates could result in a significant reduction of the book value of our fixed maturity investments. Low interest rates, and low investable yields, could adversely impact our net earnings as reinvested funds produce lower investment income.
|
•
|
Liquidity Risk - We seek to match the maturities of our investment portfolio with the estimated payment date of our loss and loss adjustment expense reserves to ensure strong liquidity and avoid having to liquidate securities to fund claims. Risk such as inadequate loss and loss adjustment reserves or unfavorable trends in litigation could potentially result in the need to sell investments to fund these liabilities. This could result in significant realized losses depending on the conditions of the general market, interest rates and credit profile of individual securities.
|
•
|
Market Risk - Our investments are subject to risks inherent in the global financial system and capital markets. The value and risks of our investments may be adversely affected if the functioning of those markets is disrupted or otherwise affected by local, national or international events, such as: changes in regulation or tax policy; changes in legislation relating to bankruptcy or other proceedings; infrastructure failures; wars or terrorist attacks; the overall health of global economies; a significant change in inflation expectations; a significant devaluation of government or private sector credit and/or currency values; and other factors or events not specifically attributable to changes in interest rates, credit losses, and liquidity needs.
|
•
|
Credit Spread Risk - Our exposure to credit spreads primarily relates to market price variability and reinvestment risk associated with changes in credit spreads. Valuations may include assumptions or estimates that may have significant period-to-period changes from market volatility, which could have a material adverse effect on our results of operations or financial condition.
|
•
|
States and local governments have been operating under deficits or projected deficits which may have an impact on the valuation of our municipal bond portfolio.
|
•
|
There is a risk of widespread defaults which may increase if some issuers chose to voluntarily default instead of implementing fiscal measures such as increasing tax rates or reducing spending. Such risk may also increase if there are changes in legislation permitting states, municipalities and political subdivisions to file for bankruptcy protection where they were not permitted to before. Judicial interpretations in such bankruptcy proceedings may also adversely affect the collectability of principal and interest, and/or valuation of our bonds. Changes in tax laws impacting marginal tax rates, exemptions, deductions, credits and/or the preferred tax treatment of municipal obligations could also adversely affect the market value of municipal obligations. Since a large portion of our investment portfolio (43.0 percent at December 31, 2019) is invested in tax-exempt municipal obligations, any such changes in tax law could adversely affect the value of our investment portfolio.
|
•
|
the availability of sufficient reliable data and our ability to properly analyze available data;
|
•
|
market and competitive conditions;
|
•
|
changes in medical care expenses and restoration costs;
|
•
|
our selection and application of appropriate pricing techniques; and
|
•
|
changes in the regulatory market, applicable legal liability standards and in the civil litigation system generally.
|
|
Financial Strength Rating
|
Issuer Credit Rating
|
Rating Held Since
|
Pooled Property and Casualty Companies
|
A
|
a
|
1994
|
United Fire Group, Inc.
|
N/A
|
bbb
|
2012
|
•
|
our reinsurers, who are obligated to us under our reinsurance agreements. See the risk factor titled "Market conditions may affect our access to and the cost of reinsurance and our reinsurers may not pay losses in a timely manner, or at all," for a discussion of the credit risk associated with our reinsurance program;
|
•
|
some of our independent agents, who collect premiums from policyholders on our behalf and are required to remit the collected premiums to us;
|
•
|
some of our policyholders, which may be significant; and
|
•
|
our surety insurance operations, where we guarantee to a third party that our bonded principal will satisfy certain performance obligations (for example, as in a construction contract) or certain financial obligations. If our policyholder defaults, we may suffer losses and be unable to be reimbursed by our policyholder.
|
•
|
Required licensing. Our insurance company subsidiaries operate under licenses issued by various state insurance departments. If a regulatory authority were to revoke an existing license or deny or delay granting a new license, our ability to continue to sell insurance or to enter or offer new insurance products in that market would be substantially impaired.
|
•
|
Regulation of insurance rates, fees and approval of policy forms. The insurance laws of most states in which we operate require insurance companies to file insurance premium rate schedules and policy forms for review and approval. When our loss ratio compares favorably to that of the industry, state regulatory authorities may resist or delay our efforts to raise premium rates, even if the property and casualty industry generally is not experiencing regulatory resistance to premium rate increases. If premium rate increases we deem necessary are not approved, we may not be able to respond to market developments and increased costs in that state. State regulatory authorities may even impose premium rate rollbacks or require us to pay premium refunds to policyholders, affecting our profitability. If insurance policy forms we seek to use are not approved by state insurance departments, our ability to offer new products and grow our business in that state could be substantially impaired.
|
•
|
Restrictions on cancellation, nonrenewal or withdrawal. Many states have laws and regulations restricting an insurance company's ability to cease or significantly reduce its sales of certain types of insurance in that state, except pursuant to a plan that is approved by the state insurance departments. These laws and regulations could limit our ability to exit or reduce our business in unprofitable markets or discontinue unprofitable products. Additionally, our ability to adjust terms or increase pricing requires approval of regulatory authorities in certain states.
|
•
|
Risk-based capital and capital adequacy requirements. Our insurance company subsidiaries and affiliate are subject to risk-based capital requirements that require us to report our results of risk-based capital calculations to state insurance departments and the NAIC. These standards apply specified risk factors to various asset, premium and reserve components of statutory capital and surplus reported in our statutory basis of accounting financial statements. Any failure to meet applicable risk-based capital requirements or minimum statutory capital requirements could subject us or our subsidiaries and affiliate to further examination or corrective action by state regulators, including limitations on our writing of additional business, state supervision or liquidation.
|
•
|
Transactions between insurance companies and their affiliates. Transactions between us, our insurance company subsidiaries and our affiliates generally must be disclosed to, and in some cases approved by, state insurance departments. State insurance departments may refuse to approve or delay their approval of a transaction, which may impact our ability to innovate or operate efficiently.
|
•
|
Required participation in guaranty funds and assigned risk pools. Certain states have enacted laws that require a property and casualty insurer conducting business in that state to participate in assigned risk plans,
|
•
|
Restrictions on the amount, type, nature, quality and concentration of investments. The various states in which we are domiciled have certain restrictions on the amount, type, nature, quality and concentration of our investments. Generally speaking, these regulations require us to be conservative in the nature and quality of our investments and restrict our ability to invest in riskier, but often higher yield investments. These restrictions may make it more difficult for us to obtain our desired investment results.
|
•
|
Terrorism Risk Insurance. The Terrorism Risk Insurance Program Reauthorization Act of 2015 ("TRIPRA") was signed into law. TRIPRA, which extended the Terrorism Risk Insurance Program until December 31, 2020, gradually increased the coverage trigger for shared terrorism losses between the federal government and the insurance industry to $200 billion per year, and gradually increased the industry-wide retention to $37.5 billion per year. For further information about TRIPRA and its effect on our operations, refer to the information in the "Results of Operations for the Years Ended December 31, 2019, 2018 and 2017" section in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."
|
•
|
Accounting standards. We prepare our consolidated financial statements in conformity with GAAP, which is periodically revised and/or expanded by recognized authoritative bodies, including the Financial Accounting Standards Board ("FASB"). These principles are subject to interpretation by the SEC and various other bodies formed to interpret and create appropriate accounting principles and guidance. Changes in GAAP and financial reporting requirements, or the interpretation of GAAP or those requirements, may have an impact on the content and presentation of our financial results and could have adverse consequences on our financial results, including lower reported results of operations and shareholders' equity and increased volatility and decreased comparability of our reported results with our historic results and with the results of other insurers. In addition, the required adoption of new accounting standards may result in significant incremental costs associated with initial implementation of and ongoing compliance with those standards. Additional information regarding recently proposed and adopted accounting standards and their potential impact on us is set forth in Note 1 “Summary of Significant Accounting Policies” to Part II, Item 8, “Financial Statements and Supplementary Data.”
|
•
|
Corporate Governance and Public Disclosure Regulation. Changing laws, regulations and standards relating to corporate governance and public disclosure, including Dodd-Frank, the Sarbanes-Oxley Act of 2002 and related SEC regulations, as well as the listing standards of the Nasdaq stock market, have created and are continuing to create uncertainty for public companies. The Federal Insurance Office, established
|
•
|
Information Privacy Regulation. We are required to safeguard the personal information of our customers and applicants and are subject to an increasing number of laws and regulations regarding privacy and data security, as well as in our contractual commitments with service providers. We could be subject to governmental enforcement actions and fines, penalties, litigation, or public statements against us by consumer advocacy groups if personal information is not appropriately controlled. Strategic service providers may refuse to continue to do business with us if we do not meet particular standards.
|
•
|
the timely receipt of any required regulatory approvals;
|
•
|
the retention and assimilation of their key management, sales and other personnel;
|
•
|
the coordination of their lines of insurance products and services;
|
•
|
the adaptation of their technology, information systems and other processes; and
|
•
|
the retention and transition of their customers.
|
•
|
variations in our actual or anticipated operating results or changes in the expectations of financial market analysts with respect to our results;
|
•
|
investor perceptions of the insurance industry in general and the Company in particular;
|
•
|
market conditions in the insurance industry and any significant volatility in the market;
|
•
|
major catastrophic events; and
|
•
|
departure of key personnel.
|
•
|
our Board of Directors is divided into three classes. At any annual meeting of our shareholders, our shareholders have the right to appoint approximately one-third of the directors on our Board of Directors. Consequently, it will take at least two annual shareholder meetings to effect a change in control of our Board of Directors;
|
•
|
our articles of incorporation limit the rights of shareholders to call special shareholder meetings;
|
•
|
our articles of incorporation set the minimum number of directors constituting the entire Board of Directors at nine and the maximum at 15, and they require approval of holders of 60.0 percent of all outstanding shares to amend these provisions. Within the range, the Board of Directors may increase by one each year the number of directors serving on the Board of Directors;
|
•
|
our articles of incorporation require the affirmative vote of 60.0 percent of all outstanding shares to approve any plan of merger, consolidation, or sale or exchange of all, or substantially all, of our assets;
|
•
|
our Board of Directors may fill vacancies on the Board of Directors;
|
•
|
our Board of Directors has the authority, without further approval of our shareholders, to issue shares of preferred stock having such rights, preferences and privileges as the Board of Directors may determine;
|
•
|
Section 490.1110 of the Iowa Business Corporation Act imposes restrictions on mergers and other business combinations between us and any holder of 10.0 percent or more of our common stock; and
|
•
|
Section 490.624A of the Iowa Business Corporation Act authorizes the terms and conditions of stock rights or options issued by us to include restrictions or conditions that preclude or limit the exercise, transfer, or receipt of such rights or options by a person, or group of persons, owning or offering to acquire a specified number or percentage of the outstanding common shares or other securities of the corporation.
|
Period
|
Total
Number of
Shares Purchased (1)
|
|
Average Price
Paid per Share
|
|
Total Number of Shares
Purchased as a Part of
Publicly Announced
Plans or Programs
|
|
Maximum Number of
Shares that may yet be
Purchased Under the
Plans or Programs
|
|||||
1/1/19 - 1/31/19
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
2,116,200
|
|
2/1/19 - 2/28/19
|
—
|
|
|
—
|
|
|
—
|
|
|
2,116,200
|
|
|
3/1/19 - 3/31/19
|
—
|
|
|
—
|
|
|
—
|
|
|
2,116,200
|
|
|
4/1/19 - 4/30/19
|
—
|
|
|
—
|
|
|
—
|
|
|
2,116,200
|
|
|
5/1/19 - 5/31/19
|
1,507
|
|
|
45.93
|
|
|
1,507
|
|
|
2,114,693
|
|
|
6/1/19 - 6/30/19
|
—
|
|
|
—
|
|
|
—
|
|
|
2,114,693
|
|
|
7/1/19 - 7/31/19
|
—
|
|
|
—
|
|
|
—
|
|
|
2,114,693
|
|
|
8/1/19 - 8/31/19
|
158,349
|
|
|
45.52
|
|
|
158,349
|
|
|
1,956,344
|
|
|
9/1/19 - 9/30/19
|
18,900
|
|
|
44.95
|
|
|
18,900
|
|
|
1,937,444
|
|
|
10/1/19 - 10/31/19
|
50,000
|
|
|
45.73
|
|
|
50,000
|
|
|
1,887,444
|
|
|
11/1/19 - 11/30/19
|
12,500
|
|
|
42.94
|
|
|
12,500
|
|
|
1,874,944
|
|
|
12/1/19 - 12/31/19
|
17,500
|
|
|
42.80
|
|
|
17,500
|
|
|
1,857,444
|
|
|
Total
|
258,756
|
|
|
|
|
258,756
|
|
|
|
|
Period Ended
|
||||||||||||||||||||||
Index
|
12/31/14
|
|
12/31/15
|
|
12/31/16
|
|
12/31/17
|
|
12/31/18
|
|
12/31/19
|
||||||||||||
United Fire Group, Inc.
|
$
|
100.00
|
|
|
$
|
132.28
|
|
|
$
|
173.66
|
|
|
$
|
165.04
|
|
|
$
|
216.29
|
|
|
$
|
175.46
|
|
S&P 500 Index
|
100.00
|
|
|
101.38
|
|
|
113.51
|
|
|
138.29
|
|
|
132.23
|
|
|
173.86
|
|
||||||
S&P 600 P&C Index
|
100.00
|
|
|
114.90
|
|
|
143.83
|
|
|
156.94
|
|
|
167.98
|
|
|
184.76
|
|
(In Thousands, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
||||||||||
As of and for the years Ended December 31
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total cash and investments - continuing operations
|
$
|
2,275,821
|
|
|
$
|
2,138,577
|
|
|
$
|
1,984,495
|
|
|
$
|
1,860,978
|
|
|
$
|
1,737,161
|
|
Total assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
3,013,472
|
|
|
2,816,698
|
|
|
2,597,297
|
|
|
2,449,140
|
|
|
2,280,674
|
|
|||||
Assets held for sale
|
—
|
|
|
—
|
|
|
1,586,134
|
|
|
1,605,618
|
|
|
1,609,702
|
|
|||||
Total assets
|
3,013,472
|
|
|
2,816,698
|
|
|
4,183,431
|
|
|
4,054,758
|
|
|
3,890,376
|
|
|||||
Losses and loss settlement expenses
|
1,421,754
|
|
|
1,312,483
|
|
|
1,224,183
|
|
|
1,123,896
|
|
|
1,003,895
|
|
|||||
Unearned premiums - continuing operations
|
505,162
|
|
|
492,918
|
|
|
465,391
|
|
|
443,802
|
|
|
414,971
|
|
|||||
Total liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
2,103,000
|
|
|
1,928,323
|
|
|
1,862,923
|
|
|
1,722,651
|
|
|
1,606,869
|
|
|||||
Liabilities held for sale
|
—
|
|
|
—
|
|
|
1,347,135
|
|
|
1,390,223
|
|
|
1,404,610
|
|
|||||
Total liabilities
|
2,103,000
|
|
|
1,928,323
|
|
|
3,210,058
|
|
|
3,112,874
|
|
|
3,011,479
|
|
|||||
Net unrealized investment gains (loss), after tax
|
47,279
|
|
|
(9,323
|
)
|
|
214,865
|
|
|
133,892
|
|
|
128,369
|
|
|||||
Repurchase of United Fire Group, Inc. common stock
|
(11,700
|
)
|
|
(5,404
|
)
|
|
(29,784
|
)
|
|
(3,746
|
)
|
|
(2,423
|
)
|
|||||
Total stockholders' equity
|
910,472
|
|
|
888,375
|
|
|
973,373
|
|
|
941,884
|
|
|
878,897
|
|
|||||
Book value per share
|
36.40
|
|
|
35.40
|
|
|
39.06
|
|
|
37.04
|
|
|
34.94
|
|
|||||
Income Statement Data from Continuing Operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
Net premiums earned
|
$
|
1,086,972
|
|
|
$
|
1,037,451
|
|
|
$
|
997,492
|
|
|
$
|
936,131
|
|
|
$
|
851,695
|
|
Investment income, net of investment expenses
|
60,414
|
|
|
52,894
|
|
|
51,190
|
|
|
55,284
|
|
|
46,559
|
|
|||||
Net realized investment gains (losses)
|
53,779
|
|
|
(20,179
|
)
|
|
4,055
|
|
|
4,947
|
|
|
1,124
|
|
|||||
Other income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(107
|
)
|
|||||
Revenues
|
1,201,165
|
|
|
1,070,166
|
|
|
1,052,737
|
|
|
996,362
|
|
|
899,271
|
|
|||||
Losses and loss settlement expenses
|
830,172
|
|
|
731,611
|
|
|
725,713
|
|
|
652,433
|
|
|
520,087
|
|
|||||
Amortization of deferred policy acquisition costs
|
216,699
|
|
|
206,232
|
|
|
207,746
|
|
|
202,892
|
|
|
180,183
|
|
|||||
Other underwriting expenses
|
137,415
|
|
|
141,473
|
|
|
103,628
|
|
|
83,540
|
|
|
83,631
|
|
|||||
Net income
|
14,820
|
|
|
2,255
|
|
|
44,870
|
|
|
49,918
|
|
|
85,320
|
|
|||||
Combined ratio(1)
|
109.0
|
%
|
|
104.0
|
%
|
|
104.0
|
%
|
|
100.3
|
%
|
|
92.0
|
%
|
|||||
Income Statement Data from Discontinued Operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net premiums earned
|
$
|
—
|
|
|
$
|
13,003
|
|
|
$
|
61,368
|
|
|
$
|
87,270
|
|
|
$
|
79,195
|
|
Investment income
|
—
|
|
|
12,663
|
|
|
49,720
|
|
|
51,538
|
|
|
54,222
|
|
|||||
Revenues
|
—
|
|
|
24,755
|
|
|
115,713
|
|
|
140,585
|
|
|
135,647
|
|
|||||
Losses and loss settlement expenses
|
—
|
|
|
10,823
|
|
|
40,451
|
|
|
31,365
|
|
|
29,001
|
|
|||||
Increase in liability for future policy benefits
|
—
|
|
|
5,023
|
|
|
27,632
|
|
|
59,969
|
|
|
50,945
|
|
|||||
Other underwriting expenses
|
—
|
|
|
3,864
|
|
|
13,281
|
|
|
19,881
|
|
|
19,306
|
|
|||||
Interest on policyholders' accounts
|
—
|
|
|
4,499
|
|
|
18,525
|
|
|
20,079
|
|
|
23,680
|
|
|||||
Net income (loss)
|
—
|
|
|
(1,912
|
)
|
|
6,153
|
|
|
786
|
|
|
3,806
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings Per Share Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per common share
|
$
|
0.59
|
|
|
$
|
0.09
|
|
|
$
|
1.79
|
|
|
$
|
1.94
|
|
|
$
|
3.41
|
|
Diluted earnings per common share
|
0.58
|
|
|
0.09
|
|
|
1.75
|
|
|
1.90
|
|
|
3.38
|
|
|||||
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings (loss) per common share
|
—
|
|
|
(0.08
|
)
|
|
0.24
|
|
|
0.03
|
|
|
0.15
|
|
|||||
Diluted earnings (loss) per common share
|
—
|
|
|
(0.07
|
)
|
|
0.24
|
|
|
0.03
|
|
|
0.15
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Supplemental Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends declared per common share(2)
|
$
|
1.30
|
|
|
$
|
4.21
|
|
|
$
|
1.09
|
|
|
$
|
0.97
|
|
|
$
|
0.86
|
|
(1)
|
The combined ratio is a commonly used financial measure of property and casualty underwriting performance. A combined ratio below 100.0 percent generally indicates a profitable book of business.
|
(2)
|
On August 20, 2018, a special dividend of $3.00 per share was paid to shareholders.
|
•
|
property and casualty insurance, which includes commercial lines insurance, personal lines insurance 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.
|
|
Years Ended December 31,
|
% of Total
|
|||||||||||||
(In Thousands)
|
2019
|
2018
|
2017
|
2019
|
2018
|
2017
|
|||||||||
Texas
|
$
|
205,420
|
|
$
|
193,953
|
|
$
|
178,314
|
|
18.0
|
%
|
17.4
|
%
|
16.7
|
%
|
California
|
129,850
|
|
124,473
|
|
123,285
|
|
11.4
|
|
11.2
|
|
11.6
|
|
|||
Iowa
|
96,052
|
|
98,128
|
|
100,826
|
|
8.4
|
|
8.8
|
|
9.5
|
|
|||
Missouri
|
73,735
|
|
70,646
|
|
64,746
|
|
6.4
|
|
6.4
|
|
6.1
|
|
|||
Colorado
|
54,907
|
|
56,152
|
|
53,981
|
|
4.8
|
|
5.1
|
|
5.1
|
|
|||
New Jersey
|
51,539
|
|
52,037
|
|
49,305
|
|
4.5
|
|
4.7
|
|
4.6
|
|
|||
Minnesota
|
47,890
|
|
49,491
|
|
50,432
|
|
4.2
|
|
4.4
|
|
4.7
|
|
|||
Louisiana
|
46,827
|
|
44,007
|
|
39,849
|
|
4.1
|
|
4.0
|
|
3.7
|
|
|||
Illinois
|
40,443
|
|
40,431
|
|
41,042
|
|
3.5
|
|
3.6
|
|
3.9
|
|
|||
All Other States
|
396,709
|
|
382,385
|
|
363,427
|
|
34.7
|
|
34.4
|
|
34.1
|
|
|||
Direct Statutory Premiums Written
|
$
|
1,143,372
|
|
$
|
1,111,703
|
|
$
|
1,065,207
|
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
|
Years Ended December 31,
|
% of Total
|
|||||||||||||
(In Thousands)
|
2019
|
2018
|
2017
|
2019
|
2018
|
2017
|
|||||||||
Iowa
|
$
|
—
|
|
$
|
9,951
|
|
$
|
40,773
|
|
—
|
%
|
31.3
|
%
|
32.5
|
%
|
Wisconsin
|
—
|
|
3,578
|
|
14,897
|
|
—
|
|
11.3
|
|
11.9
|
|
|||
Illinois
|
—
|
|
3,227
|
|
10,872
|
|
—
|
|
10.2
|
|
8.7
|
|
|||
Nebraska
|
—
|
|
2,572
|
|
10,197
|
|
—
|
|
8.1
|
|
8.1
|
|
|||
Minnesota
|
—
|
|
2,003
|
|
12,201
|
|
—
|
|
6.3
|
|
9.7
|
|
|||
All Other States
|
—
|
|
10,432
|
|
36,581
|
|
—
|
|
32.8
|
|
29.1
|
|
|||
Direct Statutory Premiums Written
|
$
|
—
|
|
$
|
31,763
|
|
$
|
125,521
|
|
—
|
%
|
100.0
|
%
|
100.0
|
%
|
|
Years Ended December 31,
|
||||||||||
(In Thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
ISO catastrophes
|
$
|
56,357
|
|
|
$
|
46,757
|
|
|
$
|
66,421
|
|
Non-ISO catastrophes (1)
|
8,011
|
|
|
(64
|
)
|
|
7,618
|
|
|||
Total catastrophes
|
$
|
64,368
|
|
|
$
|
46,693
|
|
|
$
|
74,039
|
|
|
Years Ended December 31,
|
|
% Change
|
||||||||||||||
|
|
|
|
|
|
|
2019
|
|
2018
|
||||||||
(In Thousands)
|
2019
|
|
2018
|
|
2017
|
|
vs. 2018
|
|
vs. 2017
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||
Net premiums earned
|
$
|
1,086,972
|
|
|
$
|
1,037,451
|
|
|
$
|
997,492
|
|
|
4.8
|
%
|
|
4.0
|
%
|
Investment income, net of investment expenses
|
60,414
|
|
|
52,894
|
|
|
51,190
|
|
|
14.2
|
|
|
3.3
|
|
|||
Net realized investment gains (losses)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Change in the value of equity securities
|
51,231
|
|
|
(21,994
|
)
|
|
332
|
|
|
NM
|
|
|
NM
|
|
|||
All other net realized gains
|
2,548
|
|
|
1,815
|
|
|
3,723
|
|
|
40.4
|
|
|
(51.2
|
)
|
|||
Net realized investment gains (losses)
|
53,779
|
|
|
(20,179
|
)
|
|
4,055
|
|
|
NM
|
|
|
NM
|
|
|||
Total revenues
|
$
|
1,201,165
|
|
|
$
|
1,070,166
|
|
|
$
|
1,052,737
|
|
|
12.2
|
%
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||
Benefits, losses and expenses
|
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss settlement expenses
|
$
|
830,172
|
|
|
$
|
731,611
|
|
|
$
|
725,713
|
|
|
13.5
|
%
|
|
0.8
|
%
|
Amortization of deferred policy acquisition costs
|
216,699
|
|
|
206,232
|
|
|
207,746
|
|
|
5.1
|
|
|
(0.7
|
)
|
|||
Other underwriting expenses
|
137,415
|
|
|
141,473
|
|
|
103,628
|
|
|
(2.9
|
)
|
|
36.5
|
|
|||
Total benefits, losses and expenses
|
$
|
1,184,286
|
|
|
$
|
1,079,316
|
|
|
$
|
1,037,087
|
|
|
9.7
|
%
|
|
4.1
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations before income taxes
|
$
|
16,879
|
|
|
$
|
(9,150
|
)
|
|
$
|
15,650
|
|
|
NM
|
|
|
(158.5
|
)%
|
Federal income tax expense (benefit)
|
2,059
|
|
|
(11,405
|
)
|
|
(29,220
|
)
|
|
(118.1
|
)%
|
|
(61.0
|
)%
|
|||
Net income from continuing operations
|
$
|
14,820
|
|
|
$
|
2,255
|
|
|
$
|
44,870
|
|
|
NM
|
|
|
(95.0
|
)%
|
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
(1,912
|
)
|
|
6,153
|
|
|
(100.0
|
)%
|
|
(131.1
|
)%
|
|||
Gain on sale of discontinued operations, net of tax
|
—
|
|
|
27,307
|
|
|
—
|
|
|
(100.0
|
)%
|
|
NM
|
|
|||
Net income
|
$
|
14,820
|
|
|
$
|
27,650
|
|
|
$
|
51,023
|
|
|
(46.4
|
)%
|
|
(45.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP Ratios:
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss ratio (without catastrophes)
|
70.5
|
%
|
|
66.0
|
%
|
|
65.4
|
%
|
|
6.8
|
%
|
|
0.9
|
%
|
|||
Catastrophes - effect on net loss ratio
|
5.9
|
%
|
|
4.5
|
%
|
|
7.4
|
%
|
|
31.1
|
%
|
|
(39.2
|
)%
|
|||
Net loss ratio(1)
|
76.4
|
%
|
|
70.5
|
%
|
|
72.8
|
%
|
|
8.4
|
%
|
|
(3.2
|
)%
|
|||
Expense ratio(2)
|
32.6
|
%
|
|
33.5
|
%
|
|
31.2
|
%
|
|
(2.7
|
)%
|
|
7.4
|
%
|
|||
Combined ratio(3)
|
109.0
|
%
|
|
104.0
|
%
|
|
104.0
|
%
|
|
4.8
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
% Change
|
||||||||||
(In Thousands)
|
|
|
|
|
|
|
2019
|
|
2018
|
||||||||
Years ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
vs. 2018
|
|
vs. 2017
|
||||||||
Direct premiums written
|
$
|
1,143,372
|
|
|
$
|
1,111,703
|
|
|
$
|
1,065,207
|
|
|
2.8
|
%
|
|
4.4
|
%
|
Assumed premiums written
|
27,869
|
|
|
16,761
|
|
|
15,179
|
|
|
66.3
|
|
|
10.4
|
|
|||
Ceded premiums written
|
(74,511
|
)
|
|
(66,800
|
)
|
|
(61,273
|
)
|
|
11.5
|
|
|
9.0
|
|
|||
Net premiums written(1)
|
$
|
1,096,730
|
|
|
$
|
1,061,664
|
|
|
$
|
1,019,113
|
|
|
3.3
|
%
|
|
4.2
|
%
|
Less: change in unearned premiums
|
(12,244
|
)
|
|
(27,527
|
)
|
|
(21,588
|
)
|
|
55.5
|
|
|
(27.5
|
)
|
|||
Less: change in prepaid reinsurance premiums
|
2,486
|
|
|
3,314
|
|
|
(33
|
)
|
|
(25.0
|
)
|
|
NM
|
|
|||
Net premiums earned
|
$
|
1,086,972
|
|
|
$
|
1,037,451
|
|
|
$
|
997,492
|
|
|
4.8
|
%
|
|
4.0
|
%
|
Name of Reinsurer
|
A.M. Best
|
S&P Rating
|
Aspen Insurance UK Limited
|
A
|
A
|
General Reinsurance Corporation(2)
|
A++
|
AA+
|
Hannover Rueckversicherung AG (1) (2)
|
A+
|
AA-
|
Lloyd's
|
A
|
A+
|
Munich Re(2)
|
A+
|
A-
|
Odyssey Re(2)
|
A
|
A-
|
Partner Re(1)(2)
|
A+
|
A+
|
QBE Reinsurance Corporation(1)
|
A
|
A+
|
SCOR Reinsurance Company(1)(2)
|
A+
|
AA-
|
Toa Re(1)
|
A
|
A+
|
Transatlantic Re(1)
|
A+
|
A+
|
(1)
|
Primary reinsurers participating in the property and casualty excess of loss programs.
|
(2)
|
Primary reinsurers participating in the surety excess of loss program.
|
Years ended December 31,
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||||||||||||||
(In Thousands)
|
Net Premiums Earned
|
|
Net Losses and Loss Settlement Expenses Incurred
|
|
Net Loss Ratio
|
|
Net Premiums Earned
|
|
Net Losses and Loss Settlement Expenses Incurred
|
|
Net Loss Ratio
|
|
Net Premiums Earned
|
|
Net Losses and Loss Settlement Expenses Incurred
|
|
Net Loss Ratio
|
|||||||||||||||
Commercial lines
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Other liability
|
$
|
318,412
|
|
|
$
|
205,695
|
|
|
64.6
|
%
|
|
$
|
311,931
|
|
|
$
|
183,692
|
|
|
58.9
|
%
|
|
$
|
306,480
|
|
|
$
|
121,054
|
|
|
39.5
|
%
|
Fire and allied lines
|
244,010
|
|
|
185,033
|
|
|
75.8
|
|
|
234,612
|
|
|
165,097
|
|
|
70.4
|
|
|
227,711
|
|
|
178,768
|
|
|
78.5
|
|
||||||
Automobile
|
314,755
|
|
|
332,740
|
|
|
105.7
|
|
|
284,274
|
|
|
271,248
|
|
|
95.4
|
|
|
250,465
|
|
|
266,272
|
|
|
106.3
|
|
||||||
Workers' compensation
|
87,376
|
|
|
25,784
|
|
|
29.5
|
|
|
95,203
|
|
|
57,601
|
|
|
60.5
|
|
|
104,166
|
|
|
71,053
|
|
|
68.2
|
|
||||||
Fidelity and surety
|
25,539
|
|
|
240
|
|
|
0.9
|
|
|
24,437
|
|
|
1,878
|
|
|
7.7
|
|
|
24,981
|
|
|
2,206
|
|
|
8.8
|
|
||||||
Other
|
1,710
|
|
|
105
|
|
|
6.1
|
|
|
1,728
|
|
|
449
|
|
|
26.0
|
|
|
1,829
|
|
|
312
|
|
|
17.1
|
|
||||||
Total commercial lines
|
$
|
991,802
|
|
|
$
|
749,597
|
|
|
75.6
|
%
|
|
$
|
952,185
|
|
|
$
|
679,965
|
|
|
71.4
|
%
|
|
$
|
915,632
|
|
|
$
|
639,665
|
|
|
69.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Personal lines
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fire and allied lines
|
$
|
41,195
|
|
|
$
|
40,783
|
|
|
99.0
|
%
|
|
$
|
41,581
|
|
|
$
|
32,959
|
|
|
79.3
|
%
|
|
$
|
43,005
|
|
|
$
|
34,503
|
|
|
80.2
|
%
|
Automobile
|
30,882
|
|
|
26,920
|
|
|
87.2
|
|
|
29,247
|
|
|
25,016
|
|
|
85.5
|
|
|
27,046
|
|
|
28,997
|
|
|
107.2
|
|
||||||
Other
|
1,232
|
|
|
132
|
|
|
10.7
|
|
|
1,210
|
|
|
(213
|
)
|
|
(17.6
|
)
|
|
1,159
|
|
|
268
|
|
|
23.1
|
|
||||||
Total personal lines
|
$
|
73,309
|
|
|
$
|
67,835
|
|
|
92.5
|
%
|
|
$
|
72,038
|
|
|
$
|
57,762
|
|
|
80.2
|
%
|
|
$
|
71,210
|
|
|
$
|
63,768
|
|
|
89.5
|
%
|
Reinsurance assumed
|
$
|
21,861
|
|
|
$
|
12,740
|
|
|
58.3
|
%
|
|
$
|
13,228
|
|
|
$
|
(6,116
|
)
|
|
(46.2
|
)%
|
|
$
|
10,650
|
|
|
$
|
22,280
|
|
|
209.2
|
%
|
Total
|
$
|
1,086,972
|
|
|
$
|
830,172
|
|
|
76.4
|
%
|
|
$
|
1,037,451
|
|
|
$
|
731,611
|
|
|
70.5
|
%
|
|
$
|
997,492
|
|
|
$
|
725,713
|
|
|
72.8
|
%
|
|
Years Ended December 31,
|
|
% Change
|
||||||||||||||
|
|
|
|
|
|
|
2019
|
|
2018
|
||||||||
(In Thousands)
|
2019
|
|
2018
|
|
2017
|
|
vs. 2018
|
|
vs. 2017
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||
Net premiums earned
|
$
|
—
|
|
|
$
|
13,003
|
|
|
$
|
61,368
|
|
|
(100.0
|
)%
|
|
(78.8
|
)%
|
Investment income, net
|
—
|
|
|
12,663
|
|
|
49,720
|
|
|
(100.0
|
)%
|
|
(74.5
|
)%
|
|||
Net realized investment gains (losses)
|
—
|
|
|
(1,057
|
)
|
|
4,008
|
|
|
(100.0
|
)%
|
|
(126.4
|
)%
|
|||
Other income
|
—
|
|
|
146
|
|
|
617
|
|
|
(100.0
|
)%
|
|
(76.3
|
)%
|
|||
Total revenues
|
$
|
—
|
|
|
$
|
24,755
|
|
|
$
|
115,713
|
|
|
(100.0
|
)%
|
|
(78.6
|
)%
|
|
|
|
|
|
|
|
|
|
|
||||||||
Benefits, Losses and Expenses
|
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss settlement expenses
|
$
|
—
|
|
|
$
|
10,823
|
|
|
$
|
40,451
|
|
|
(100.0
|
)%
|
|
(73.2
|
)%
|
Increase in liability for future policy benefits
|
—
|
|
|
5,023
|
|
|
27,632
|
|
|
(100.0
|
)%
|
|
(81.8
|
)%
|
|||
Amortization of deferred policy acquisition costs
|
—
|
|
|
1,895
|
|
|
5,181
|
|
|
(100.0
|
)%
|
|
(63.4
|
)%
|
|||
Other underwriting expenses
|
—
|
|
|
3,864
|
|
|
13,281
|
|
|
(100.0
|
)%
|
|
(70.9
|
)%
|
|||
Interest on policyholders' accounts
|
—
|
|
|
4,499
|
|
|
18,525
|
|
|
(100.0
|
)%
|
|
(75.7
|
)%
|
|||
Total benefits, losses and expenses
|
$
|
—
|
|
|
$
|
26,104
|
|
|
$
|
105,070
|
|
|
(100.0
|
)%
|
|
(75.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes
|
$
|
—
|
|
|
$
|
(1,349
|
)
|
|
$
|
10,643
|
|
|
(100.0
|
)%
|
|
(112.7
|
)%
|
|
|
|
Percent
|
|||
(In Thousands)
|
|
|
of Total
|
|||
Fixed maturities:
|
|
|
|
|||
Available-for-sale
|
$
|
1,719,607
|
|
|
79.8
|
%
|
Trading securities
|
15,256
|
|
|
0.7
|
|
|
Equity securities
|
299,203
|
|
|
13.9
|
|
|
Mortgage loans
|
42,448
|
|
|
2.0
|
|
|
Other long-term investments
|
78,410
|
|
|
3.6
|
|
|
Short-term investments
|
175
|
|
|
—
|
|
|
Total
|
$
|
2,155,099
|
|
|
100.0
|
%
|
(In Thousands)
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
Rating
|
Carrying Value
|
|
|
% of Total
|
|
Carrying Value
|
|
% of Total
|
|||||
AAA
|
$
|
721,446
|
|
|
41.6
|
%
|
|
$
|
734,471
|
|
|
41.7
|
%
|
AA
|
664,238
|
|
|
38.3
|
|
|
684,863
|
|
|
38.9
|
|
||
A
|
179,553
|
|
|
10.3
|
|
|
178,282
|
|
|
10.1
|
|
||
Baa/BBB
|
157,350
|
|
|
9.1
|
|
|
157,349
|
|
|
8.9
|
|
||
Other/Not Rated
|
12,276
|
|
|
0.7
|
|
|
7,763
|
|
|
0.4
|
|
||
|
$
|
1,734,863
|
|
|
100.0
|
%
|
|
$
|
1,762,728
|
|
|
100.0
|
%
|
(In Thousands)
|
|
Available-For-Sale
|
|
Trading
|
||||||||||||
|
|
Amortized
|
|
Fair
|
|
Amortized
|
|
Fair
|
||||||||
December 31, 2019
|
|
Cost
|
|
Value
|
|
Cost
|
|
Value
|
||||||||
Due in one year or less
|
|
$
|
56,316
|
|
|
$
|
56,635
|
|
|
$
|
2,464
|
|
|
$
|
3,132
|
|
Due after one year through five years
|
|
286,426
|
|
|
293,956
|
|
|
6,967
|
|
|
8,586
|
|
||||
Due after five years through 10 years
|
|
481,310
|
|
|
504,300
|
|
|
—
|
|
|
—
|
|
||||
Due after 10 years
|
|
556,850
|
|
|
580,907
|
|
|
2,510
|
|
|
3,538
|
|
||||
Asset-backed securities
|
|
314
|
|
|
750
|
|
|
—
|
|
|
—
|
|
||||
Mortgage-backed securities
|
|
6,250
|
|
|
6,356
|
|
|
—
|
|
|
—
|
|
||||
Collateralized mortgage obligations
|
|
272,294
|
|
|
276,703
|
|
|
—
|
|
|
—
|
|
||||
|
|
$
|
1,659,760
|
|
|
$
|
1,719,607
|
|
|
$
|
11,941
|
|
|
$
|
15,256
|
|
(1)
|
Represents the change in value of our interests in limited liability partnerships that are recorded on the equity method of accounting.
|
December 31, 2019
|
-200 Basis
|
|
-100 Basis
|
|
|
|
+100 Basis
|
|
+ 200 Basis
|
||||||||||
(In Thousands)
|
Points
|
|
Points
|
|
Base
|
|
Points
|
|
Points
|
||||||||||
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities
|
|
|
|
|
|
|
|
|
|
||||||||||
Bonds
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury
|
$
|
71,317
|
|
|
$
|
70,391
|
|
|
$
|
69,491
|
|
|
$
|
68,614
|
|
|
$
|
67,762
|
|
U.S. government agency
|
104,452
|
|
|
102,447
|
|
|
100,202
|
|
|
94,927
|
|
|
87,395
|
|
|||||
States, municipalities and political subdivisions
|
|
|
|
|
|
|
|
|
|
||||||||||
General obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Midwest
|
94,410
|
|
|
91,442
|
|
|
88,594
|
|
|
85,383
|
|
|
80,840
|
|
|||||
Northeast
|
33,263
|
|
|
32,247
|
|
|
31,270
|
|
|
30,211
|
|
|
28,816
|
|
|||||
South
|
123,741
|
|
|
119,371
|
|
|
115,203
|
|
|
110,506
|
|
|
104,153
|
|
|||||
West
|
120,299
|
|
|
115,192
|
|
|
110,317
|
|
|
105,215
|
|
|
98,969
|
|
|||||
Special revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Midwest
|
152,342
|
|
|
145,943
|
|
|
139,892
|
|
|
133,358
|
|
|
124,248
|
|
|||||
Northeast
|
68,832
|
|
|
65,076
|
|
|
61,543
|
|
|
57,954
|
|
|
53,536
|
|
|||||
South
|
260,451
|
|
|
247,229
|
|
|
234,666
|
|
|
220,980
|
|
|
203,020
|
|
|||||
West
|
159,718
|
|
|
152,064
|
|
|
144,844
|
|
|
137,059
|
|
|
126,877
|
|
|||||
Foreign bonds
|
5,372
|
|
|
5,243
|
|
|
5,117
|
|
|
4,996
|
|
|
4,878
|
|
|||||
Public utilities
|
69,690
|
|
|
66,582
|
|
|
63,651
|
|
|
60,864
|
|
|
58,198
|
|
|||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|
||||||||||
Energy
|
32,903
|
|
|
31,474
|
|
|
30,124
|
|
|
28,845
|
|
|
27,621
|
|
|||||
Industrials
|
57,375
|
|
|
55,654
|
|
|
54,015
|
|
|
52,450
|
|
|
50,949
|
|
|||||
Consumer goods and services
|
53,668
|
|
|
51,512
|
|
|
49,466
|
|
|
47,520
|
|
|
45,658
|
|
|||||
Health care
|
10,345
|
|
|
9,899
|
|
|
9,480
|
|
|
9,085
|
|
|
8,714
|
|
|||||
Technology, media and telecommunications
|
30,999
|
|
|
29,270
|
|
|
27,670
|
|
|
26,183
|
|
|
24,793
|
|
|||||
Financial services
|
108,101
|
|
|
104,138
|
|
|
100,253
|
|
|
96,276
|
|
|
92,374
|
|
|||||
Mortgage backed securities
|
6,757
|
|
|
6,554
|
|
|
6,356
|
|
|
6,106
|
|
|
5,828
|
|
|||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
|
|
|
||||||||||
Government national mortgage association
|
87,871
|
|
|
84,825
|
|
|
80,356
|
|
|
74,868
|
|
|
69,303
|
|
|||||
Federal home loan mortgage corporation
|
127,408
|
|
|
125,929
|
|
|
124,502
|
|
|
120,588
|
|
|
114,324
|
|
|||||
Federal national mortgage association
|
74,189
|
|
|
73,410
|
|
|
71,845
|
|
|
67,893
|
|
|
63,173
|
|
|||||
Asset-backed securities
|
750
|
|
|
750
|
|
|
750
|
|
|
750
|
|
|
750
|
|
|||||
Total Available-For-Sale Fixed Maturities
|
$
|
1,854,253
|
|
|
$
|
1,786,642
|
|
|
$
|
1,719,607
|
|
|
$
|
1,640,631
|
|
|
$
|
1,542,179
|
|
TRADING
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities
|
|
|
|
|
|
|
|
|
|
||||||||||
Bonds
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|
||||||||||
Industrials
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Consumer goods and services
|
2,334
|
|
|
2,305
|
|
|
2,276
|
|
|
2,248
|
|
|
2,220
|
|
|||||
Health care
|
6,598
|
|
|
5,541
|
|
|
4,701
|
|
|
4,031
|
|
|
3,496
|
|
|||||
Technology, media and telecommunications
|
2,479
|
|
|
2,069
|
|
|
1,732
|
|
|
1,455
|
|
|
1,226
|
|
|||||
Financial services
|
2,573
|
|
|
2,516
|
|
|
2,460
|
|
|
2,407
|
|
|
2,355
|
|
|||||
Redeemable preferred stock
|
4,087
|
|
|
4,087
|
|
|
4,087
|
|
|
4,087
|
|
|
4,087
|
|
|||||
Total Trading Fixed Maturities
|
$
|
18,071
|
|
|
$
|
16,518
|
|
|
$
|
15,256
|
|
|
$
|
14,228
|
|
|
$
|
13,384
|
|
Total Fixed Maturity Securities
|
$
|
1,872,324
|
|
|
$
|
1,803,160
|
|
|
$
|
1,734,863
|
|
|
$
|
1,654,859
|
|
|
$
|
1,555,563
|
|
(In Thousands)
|
|
-10%
|
|
Base
|
|
+10%
|
||||||
Estimated fair value of equity securities
|
|
$
|
269,283
|
|
|
$
|
299,203
|
|
|
$
|
329,123
|
|
Cash Flow Summary
|
Years Ended December 31,
|
||||||||||
(In Thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Cash provided by (used in)
|
|
|
|
|
|
||||||
Operating activities
|
$
|
93,752
|
|
|
$
|
110,104
|
|
|
$
|
170,094
|
|
Investing activities
|
4,501
|
|
|
(19,204
|
)
|
|
(61,985
|
)
|
|||
Financing activities
|
(41,985
|
)
|
|
(115,188
|
)
|
|
(107,549
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
56,268
|
|
|
$
|
(24,288
|
)
|
|
$
|
560
|
|
(In Thousands)
|
Payments Due By Period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less Than
One Year
|
|
One to
Three Years
|
|
Three to
Five Years
|
|
More Than
Five Years
|
||||||||||
Loss and loss settlement expense reserves
|
$
|
1,421,754
|
|
|
$
|
503,916
|
|
|
$
|
490,744
|
|
|
$
|
242,326
|
|
|
$
|
184,768
|
|
Operating leases
|
16,861
|
|
|
7,517
|
|
|
7,728
|
|
|
1,577
|
|
|
39
|
|
|||||
Profit-sharing commissions
|
19,600
|
|
|
19,600
|
|
|
|
|
|
|
|
|
|
|
|||||
Pension plan contributions
|
10,000
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
$
|
1,468,215
|
|
|
$
|
541,033
|
|
|
$
|
498,472
|
|
|
$
|
243,903
|
|
|
$
|
184,807
|
|
Sensitivity Analysis — Impact of Changes in Projected Loss and Loss Settlement Expense Ratios
|
|||||||||||||||||||
(In Thousands)
|
-10%
|
|
-5%
|
|
Base
|
|
+5%
|
|
+10%
|
||||||||||
Premium deficiency charge estimated
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,557
|
|
|
$
|
13,357
|
|
|
$
|
24,386
|
|
(In Thousands)
|
Case Basis
|
|
IBNR
|
|
Loss
Settlement
Expense
|
|
Total Reserves
|
||||||||
Commercial lines
|
|
|
|
|
|
|
|
||||||||
Fire and allied lines
|
$
|
90,332
|
|
|
$
|
17,170
|
|
|
$
|
22,764
|
|
|
$
|
130,266
|
|
Other liability
|
302,120
|
|
|
107,942
|
|
|
189,895
|
|
|
599,957
|
|
||||
Automobile
|
282,213
|
|
|
79,552
|
|
|
83,228
|
|
|
444,993
|
|
||||
Workers' compensation
|
153,691
|
|
|
5,000
|
|
|
23,761
|
|
|
182,452
|
|
||||
Fidelity and surety
|
2,894
|
|
|
2,520
|
|
|
186
|
|
|
5,600
|
|
||||
Miscellaneous
|
455
|
|
|
563
|
|
|
143
|
|
|
1,161
|
|
||||
Total commercial lines
|
$
|
831,705
|
|
|
$
|
212,747
|
|
|
$
|
319,977
|
|
|
$
|
1,364,429
|
|
Personal lines
|
|
|
|
|
|
|
|
||||||||
Automobile
|
$
|
12,808
|
|
|
$
|
1,488
|
|
|
$
|
2,263
|
|
|
$
|
16,559
|
|
Fire and allied lines
|
9,040
|
|
|
3,727
|
|
|
2,540
|
|
|
15,307
|
|
||||
Miscellaneous
|
70
|
|
|
258
|
|
|
106
|
|
|
434
|
|
||||
Total personal lines
|
$
|
21,918
|
|
|
$
|
5,473
|
|
|
$
|
4,909
|
|
|
$
|
32,300
|
|
Reinsurance assumed
|
12,134
|
|
|
12,720
|
|
|
171
|
|
|
25,025
|
|
||||
Total
|
$
|
865,757
|
|
|
$
|
230,940
|
|
|
$
|
325,057
|
|
|
$
|
1,421,754
|
|
(In Thousands)
|
|
|
|
||||
Change in level of net case-basis reserve development
|
5%
|
|
10%
|
||||
Impact on reported net case-basis reserves
|
$
|
40,109
|
|
|
$
|
80,218
|
|
(In Thousands)
|
|
|
|
||||
Change in LAE paid to losses paid ratio
|
1%
|
|
2%
|
||||
Impact due to change in LAE reserving assumptions
|
$
|
3,206
|
|
|
$
|
6,411
|
|
(In Thousands)
|
|
|
|
|
|
|
|
||||||||
Hypothetical Reserve Development Volatility Levels
|
-10%
|
|
-5%
|
|
+5%
|
|
+10%
|
||||||||
Impact on loss and loss settlement expenses
|
|
|
|
|
|
|
|
||||||||
Other liability
|
$
|
(59,996
|
)
|
|
$
|
(29,998
|
)
|
|
$
|
29,998
|
|
|
$
|
59,996
|
|
Workers' compensation
|
(18,245
|
)
|
|
(9,123
|
)
|
|
9,123
|
|
|
18,245
|
|
||||
Automobile
|
(46,155
|
)
|
|
(23,078
|
)
|
|
23,078
|
|
|
46,155
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Hypothetical Reserve Development Volatility Levels
|
-5%
|
|
-3%
|
|
+3%
|
|
+5%
|
||||||||
Impact on loss and loss settlement expenses
|
|
|
|
|
|
|
|
||||||||
All other lines
|
$
|
(8,890
|
)
|
|
$
|
(5,334
|
)
|
|
$
|
5,334
|
|
|
$
|
8,890
|
|
United Fire Group, Inc.
Consolidated Balance Sheets
|
|||||||
|
December 31,
|
||||||
(In Thousands, Except Share Data)
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Assets
|
|
|
|
||||
Investments
|
|
|
|
||||
Fixed maturities
|
|
|
|
||||
Available-for-sale, at fair value (amortized cost $1,659,760 in 2019 and $1,761,289 in 2018)
|
$
|
1,719,607
|
|
|
$
|
1,749,488
|
|
Trading securities, at fair value (amortized cost $11,941 in 2019 and $11,277 in 2018)
|
15,256
|
|
|
13,240
|
|
||
Equity securities, at fair value (cost $67,529 in 2019 and $64,819 in 2018)
|
299,203
|
|
|
248,361
|
|
||
Mortgage loans
|
42,448
|
|
|
25,782
|
|
||
Other long-term investments
|
78,410
|
|
|
37,077
|
|
||
Short-term investments
|
175
|
|
|
175
|
|
||
|
2,155,099
|
|
|
2,074,123
|
|
||
Cash and cash equivalents
|
120,722
|
|
|
64,454
|
|
||
Accrued investment income
|
15,182
|
|
|
15,774
|
|
||
Premiums receivable (net of allowance for doubtful accounts of $1,239 in 2019 and $785 in 2018)
|
357,632
|
|
|
346,825
|
|
||
Deferred policy acquisition costs
|
94,292
|
|
|
92,796
|
|
||
Property and equipment (primarily land and buildings, at cost, less accumulated depreciation of $50,183 in 2019 and $39,894 in 2018)
|
116,989
|
|
|
97,194
|
|
||
Reinsurance receivables and recoverables
|
72,369
|
|
|
61,337
|
|
||
Prepaid reinsurance premiums
|
9,550
|
|
|
7,063
|
|
||
Deferred tax asset
|
—
|
|
|
912
|
|
||
Income taxes receivable
|
19,190
|
|
|
15,035
|
|
||
Goodwill and net intangible assets
|
22,542
|
|
|
23,252
|
|
||
Other assets
|
29,905
|
|
|
17,933
|
|
||
Total assets
|
$
|
3,013,472
|
|
|
$
|
2,816,698
|
|
Liabilities and stockholders' equity
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Losses and loss settlement expenses
|
$
|
1,421,754
|
|
|
$
|
1,312,483
|
|
Unearned premiums
|
505,162
|
|
|
492,918
|
|
||
Accrued expenses and other liabilities
|
155,498
|
|
|
122,922
|
|
||
Deferred tax liability
|
20,586
|
|
|
—
|
|
||
Total liabilities
|
$
|
2,103,000
|
|
|
$
|
1,928,323
|
|
Stockholders' equity
|
|
|
|
||||
Common stock, $0.001 par value; authorized 75,000,000 shares; 25,015,963 and 25,097,408 shares issued and outstanding in 2019 and 2018, respectively
|
$
|
25
|
|
|
$
|
25
|
|
Additional paid-in capital
|
200,179
|
|
|
203,350
|
|
||
Retained earnings
|
697,116
|
|
|
715,472
|
|
||
Accumulated other comprehensive income (loss), net of tax
|
13,152
|
|
|
(30,472
|
)
|
||
Total stockholders' equity
|
$
|
910,472
|
|
|
$
|
888,375
|
|
Total liabilities and stockholders' equity
|
$
|
3,013,472
|
|
|
$
|
2,816,698
|
|
|
For the Years Ended December 31,
|
||||||||||
(In Thousands, Except Share Data)
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Revenues
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
1,086,972
|
|
|
$
|
1,037,451
|
|
|
$
|
997,492
|
|
Investment income, net of investment expenses
|
60,414
|
|
|
52,894
|
|
|
51,190
|
|
|||
Net realized investment gains (losses) (includes reclassifications for net unrealized gains on available-for-sale securities of ($1,521) in 2019; ($784) in 2018; and $6,390 in 2017 previously included in accumulated other comprehensive income)
|
53,779
|
|
|
(20,179
|
)
|
|
4,055
|
|
|||
Total revenues
|
$
|
1,201,165
|
|
|
$
|
1,070,166
|
|
|
$
|
1,052,737
|
|
|
|
|
|
|
|
||||||
Benefits, losses and expenses
|
|
|
|
|
|
||||||
Losses and loss settlement expenses
|
$
|
830,172
|
|
|
$
|
731,611
|
|
|
$
|
725,713
|
|
Amortization of deferred policy acquisition costs
|
216,699
|
|
|
206,232
|
|
|
207,746
|
|
|||
Other underwriting expenses (includes reclassifications for employee benefit costs of $4,497 in 2019; $6,642 in 2018; and $5,408 in 2017 previously included in accumulated other comprehensive income)
|
137,415
|
|
|
141,473
|
|
|
103,628
|
|
|||
Total benefits, losses and expenses
|
$
|
1,184,286
|
|
|
$
|
1,079,316
|
|
|
$
|
1,037,087
|
|
|
|
|
|
|
|
||||||
Income (loss) from continuing operations before income taxes
|
$
|
16,879
|
|
|
$
|
(9,150
|
)
|
|
$
|
15,650
|
|
Federal income tax expense (benefit) (includes reclassifications of $1,263 in 2019; $1,559 in 2018; and ($344) in 2017 previously included in accumulated other comprehensive income)
|
2,059
|
|
|
(11,405
|
)
|
|
(29,220
|
)
|
|||
Net income from continuing operations
|
$
|
14,820
|
|
|
$
|
2,255
|
|
|
$
|
44,870
|
|
Income (loss) from discontinued operations, net of taxes
|
—
|
|
|
(1,912
|
)
|
|
6,153
|
|
|||
Gain on sale of discontinued operations, net of taxes
|
—
|
|
|
27,307
|
|
|
—
|
|
|||
Net income
|
$
|
14,820
|
|
|
$
|
27,650
|
|
|
$
|
51,023
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Change in net unrealized appreciation on investments
|
$
|
70,127
|
|
|
$
|
(50,985
|
)
|
|
$
|
72,251
|
|
Change in liability for underfunded employee benefit plans
|
(20,924
|
)
|
|
25,513
|
|
|
(26,122
|
)
|
|||
Other comprehensive income (loss), before tax and reclassification adjustments
|
49,203
|
|
|
(25,472
|
)
|
|
46,129
|
|
|||
Income tax effect
|
(10,334
|
)
|
|
5,349
|
|
|
(17,540
|
)
|
|||
Other comprehensive income (loss), after tax, before reclassification adjustments
|
38,869
|
|
|
(20,123
|
)
|
|
28,589
|
|
|||
Reclassification adjustment for net realized (gains) losses included in income
|
1,521
|
|
|
784
|
|
|
(6,390
|
)
|
|||
Reclassification adjustment for employee benefit costs included in expense
|
4,497
|
|
|
6,642
|
|
|
5,408
|
|
|||
Total reclassification adjustments, before tax
|
6,018
|
|
|
7,426
|
|
|
(982
|
)
|
|||
Income tax effect
|
(1,263
|
)
|
|
(1,559
|
)
|
|
344
|
|
|||
Total reclassification adjustments, after tax
|
4,755
|
|
|
5,867
|
|
|
(638
|
)
|
|||
Comprehensive income
|
$
|
58,444
|
|
|
$
|
13,394
|
|
|
$
|
78,974
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding
|
25,138,039
|
|
|
25,006,211
|
|
|
25,103,720
|
|
|||
Earnings per common share from continuing operations:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.59
|
|
|
$
|
0.09
|
|
|
$
|
1.79
|
|
Diluted
|
0.58
|
|
|
0.09
|
|
|
1.75
|
|
|||
Earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.59
|
|
|
$
|
1.11
|
|
|
$
|
2.03
|
|
Diluted
|
0.58
|
|
|
1.08
|
|
|
1.99
|
|
|
Common Stock
|
|
|
|
|||||||||||||
(In Thousands, Except Share Data)
|
Shares outstanding
|
Common stock
|
Additional paid-in capital
|
Retaining Earnings
|
Accumulated other comprehensive income
|
Total
|
|||||||||||
Balance, January 1, 2017
|
25,429,769
|
|
$
|
25
|
|
$
|
216,482
|
|
$
|
616,322
|
|
$
|
109,055
|
|
$
|
941,884
|
|
Net income
|
—
|
|
—
|
|
—
|
|
51,023
|
|
—
|
|
51,023
|
|
|||||
Shares repurchased
|
(701,899
|
)
|
—
|
|
(29,784
|
)
|
—
|
|
—
|
|
(29,784
|
)
|
|||||
Stock based compensation
|
188,936
|
|
—
|
|
4,828
|
|
—
|
|
—
|
|
4,828
|
|
|||||
Dividends on common stock ($1.09 per share)
|
—
|
|
—
|
|
—
|
|
(27,337
|
)
|
—
|
|
(27,337
|
)
|
|||||
Accumulated effect of change in enacted tax rate
|
—
|
|
—
|
|
—
|
|
(31,308
|
)
|
31,308
|
|
—
|
|
|||||
Change in net unrealized investment appreciation(1)
|
—
|
|
—
|
|
—
|
|
—
|
|
44,315
|
|
44,315
|
|
|||||
Change in liability for underfunded employee benefit plans(2)
|
—
|
|
—
|
|
—
|
|
—
|
|
(16,364
|
)
|
(16,364
|
)
|
|||||
Compensation expense and related tax benefit for stock-based award grants
|
—
|
|
—
|
|
4,808
|
|
—
|
|
—
|
|
4,808
|
|
|||||
Balance, January 1, 2018
|
24,916,806
|
|
$
|
25
|
|
$
|
196,334
|
|
$
|
608,700
|
|
$
|
168,314
|
|
$
|
973,373
|
|
Net income
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
27,650
|
|
$
|
—
|
|
$
|
27,650
|
|
Shares repurchased
|
(120,372
|
)
|
—
|
|
(5,404
|
)
|
—
|
|
—
|
|
(5,404
|
)
|
|||||
Stock based compensation
|
300,974
|
|
—
|
|
7,171
|
|
—
|
|
—
|
|
7,171
|
|
|||||
Dividends on common stock ($4.21 per share)
|
—
|
|
—
|
|
|
(105,408
|
)
|
—
|
|
(105,408
|
)
|
||||||
Change in net unrealized investment appreciation(1)
|
—
|
|
—
|
|
—
|
|
—
|
|
(32,944
|
)
|
(32,944
|
)
|
|||||
Net unrealized investment depreciation of discontinued operations, sold
|
—
|
|
—
|
|
—
|
|
(6,714
|
)
|
—
|
|
(6,714
|
)
|
|||||
Change in liability for underfunded employee benefit plans(2)
|
—
|
|
—
|
|
—
|
|
—
|
|
25,402
|
|
25,402
|
|
|||||
Cumulative effect of change in accounting principle
|
—
|
|
—
|
|
—
|
|
191,244
|
|
(191,244
|
)
|
—
|
|
|||||
Compensation expense and related tax benefit for stock-based award grants
|
—
|
|
—
|
|
5,249
|
|
—
|
|
—
|
|
5,249
|
|
|||||
Balance, January 1, 2019
|
25,097,408
|
|
$
|
25
|
|
$
|
203,350
|
|
$
|
715,472
|
|
$
|
(30,472
|
)
|
$
|
888,375
|
|
Net income
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
14,820
|
|
$
|
—
|
|
$
|
14,820
|
|
Shares repurchased
|
(258,756
|
)
|
—
|
|
(11,700
|
)
|
—
|
|
—
|
|
(11,700
|
)
|
|||||
Stock based compensation
|
177,311
|
|
—
|
|
2,377
|
|
—
|
|
—
|
|
2,377
|
|
|||||
Dividends on common stock ($1.30 per share)
|
—
|
|
—
|
|
—
|
|
(32,662
|
)
|
—
|
|
(32,662
|
)
|
|||||
Change in net unrealized investment appreciation(1)
|
—
|
|
—
|
|
—
|
|
—
|
|
56,602
|
|
56,602
|
|
|||||
Change in liability for underfunded employee benefit plans(2)
|
—
|
|
—
|
|
—
|
|
—
|
|
(12,978
|
)
|
(12,978
|
)
|
|||||
Cumulative effect of change in accounting principle
|
—
|
|
—
|
|
—
|
|
(514
|
)
|
—
|
|
(514
|
)
|
|||||
Compensation expense and related tax benefit for stock-based award grants
|
—
|
|
—
|
|
6,152
|
|
—
|
|
—
|
|
6,152
|
|
|||||
Balance, December 31, 2019
|
25,015,963
|
|
$
|
25
|
|
$
|
200,179
|
|
$
|
697,116
|
|
$
|
13,152
|
|
$
|
910,472
|
|
(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 income taxes.
|
|
For the Years Ended December 31,
|
||||||||||
(In Thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Cash Flows From Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
14,820
|
|
|
$
|
27,650
|
|
|
$
|
51,023
|
|
Less net income (loss) from discontinued operations, net of taxes
|
—
|
|
|
(1,912
|
)
|
|
6,153
|
|
|||
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
||||||
Net accretion of bond premium
|
9,372
|
|
|
8,788
|
|
|
8,872
|
|
|||
Depreciation and amortization
|
11,191
|
|
|
5,174
|
|
|
4,574
|
|
|||
Stock-based compensation expense
|
6,152
|
|
|
5,249
|
|
|
4,808
|
|
|||
Net realized investment (gains) losses
|
(53,779
|
)
|
|
20,179
|
|
|
(4,055
|
)
|
|||
Net cash flows from trading investments
|
1,415
|
|
|
22,514
|
|
|
(1,909
|
)
|
|||
Deferred income tax benefit
|
10,148
|
|
|
(16,220
|
)
|
|
(5,921
|
)
|
|||
Changes in:
|
|
|
|
|
|
||||||
Accrued investment income
|
592
|
|
|
(1,933
|
)
|
|
(224
|
)
|
|||
Premiums receivable
|
(10,807
|
)
|
|
(18,312
|
)
|
|
(22,311
|
)
|
|||
Deferred policy acquisition costs
|
(1,496
|
)
|
|
(4,694
|
)
|
|
5,260
|
|
|||
Reinsurance receivables
|
(11,032
|
)
|
|
1,857
|
|
|
(487
|
)
|
|||
Prepaid reinsurance premiums
|
(2,487
|
)
|
|
(3,314
|
)
|
|
33
|
|
|||
Income taxes receivable
|
(4,155
|
)
|
|
(9,004
|
)
|
|
8,254
|
|
|||
Other assets
|
(11,972
|
)
|
|
(1,524
|
)
|
|
(2,465
|
)
|
|||
Losses, claims and loss settlement expenses
|
109,271
|
|
|
88,300
|
|
|
100,287
|
|
|||
Unearned premiums
|
12,244
|
|
|
27,527
|
|
|
21,589
|
|
|||
Accrued expenses and other liabilities
|
15,659
|
|
|
(12,319
|
)
|
|
(423
|
)
|
|||
Deferred income taxes
|
(110
|
)
|
|
(10,746
|
)
|
|
(25,883
|
)
|
|||
Other, net
|
(1,274
|
)
|
|
9,847
|
|
|
3,378
|
|
|||
Cash from operating activities - continuing operations
|
78,932
|
|
|
111,369
|
|
|
93,377
|
|
|||
Cash from operating activities - discontinued operations
|
—
|
|
|
4,024
|
|
|
31,847
|
|
|||
Cash from operating activities - gain on sale of discontinued operations
|
—
|
|
|
(34,851
|
)
|
|
—
|
|
|||
Total adjustments
|
$
|
78,932
|
|
|
$
|
80,542
|
|
|
$
|
125,224
|
|
Net cash provided by operating activities
|
$
|
93,752
|
|
|
$
|
110,104
|
|
|
$
|
170,094
|
|
Cash Flows From Investing Activities
|
|
|
|
|
|
||||||
Proceeds from sale of available-for-sale investments
|
$
|
41,760
|
|
|
$
|
132,250
|
|
|
$
|
7,404
|
|
Proceeds from call and maturity of held-to-maturity investments
|
|
|
|
—
|
|
|
150
|
|
|||
Proceeds from call and maturity of available-for-sale investments
|
265,515
|
|
|
122,250
|
|
|
191,521
|
|
|||
Proceeds from short-term and other investments
|
4,397
|
|
|
9,303
|
|
|
6,032
|
|
|||
Proceeds from sale of discontinued operations
|
—
|
|
|
276,055
|
|
|
—
|
|
|||
Purchase of held-to-maturity investments
|
—
|
|
|
—
|
|
|
(150
|
)
|
|||
Purchase of available-for-sale investments
|
(213,437
|
)
|
|
(507,380
|
)
|
|
(260,957
|
)
|
|||
Purchase of mortgage loans
|
(16,933
|
)
|
|
(25,853
|
)
|
|
—
|
|
|||
Purchase of short-term and other investments
|
(44,375
|
)
|
|
(7,119
|
)
|
|
(6,428
|
)
|
|||
Net purchases and sales of property and equipment
|
(32,426
|
)
|
|
(33,053
|
)
|
|
(17,158
|
)
|
|||
Cash from investing activities - continuing operations
|
4,501
|
|
|
(33,547
|
)
|
|
(79,586
|
)
|
|||
Cash from investing activities - discontinued operations
|
—
|
|
|
14,343
|
|
|
17,601
|
|
|||
Net cash provided by (used in) investing activities
|
$
|
4,501
|
|
|
$
|
(19,204
|
)
|
|
$
|
(61,985
|
)
|
Cash Flows From Financing Activities
|
|
|
|
|
|
||||||
Payment of cash dividends
|
$
|
(32,662
|
)
|
|
$
|
(105,408
|
)
|
|
$
|
(27,337
|
)
|
Repurchase of common stock
|
(11,700
|
)
|
|
(5,404
|
)
|
|
(29,784
|
)
|
|||
Issuance of common stock
|
2,377
|
|
|
7,171
|
|
|
4,828
|
|
|||
Cash from financing activities - continued operations
|
(41,985
|
)
|
|
(103,641
|
)
|
|
(52,293
|
)
|
|||
Cash from financing activities - discontinued operations
|
|
|
|
(11,547
|
)
|
|
(55,256
|
)
|
|||
Net cash used in financing activities
|
$
|
(41,985
|
)
|
|
$
|
(115,188
|
)
|
|
$
|
(107,549
|
)
|
Net Change in Cash and Cash Equivalents
|
$
|
56,268
|
|
|
$
|
(24,288
|
)
|
|
$
|
560
|
|
Less: decrease (increase) in cash and cash equivalents - discontinued operations
|
—
|
|
|
(6,820
|
)
|
|
5,808
|
|
|||
Net increase (decrease) in cash and cash equivalents - continuing operations
|
56,268
|
|
|
(31,108
|
)
|
|
6,368
|
|
|||
Cash and Cash Equivalents at Beginning of Year - Continuing Operations
|
64,454
|
|
|
95,562
|
|
|
89,194
|
|
|||
Cash and Cash Equivalents at End of Year - Continuing Operations
|
$
|
120,722
|
|
|
$
|
64,454
|
|
|
$
|
95,562
|
|
Index of Notes to Consolidated Financial Statements
|
Page
|
Continuing Operations - Property and Casualty Insurance
|
2019
|
|
2018
|
|
2017
|
||||||
Recorded asset at beginning of year
|
$
|
92,796
|
|
|
$
|
88,102
|
|
|
$
|
93,362
|
|
Underwriting costs deferred
|
218,195
|
|
|
210,926
|
|
|
202,486
|
|
|||
Amortization of deferred policy acquisition costs
|
(216,699
|
)
|
|
(206,232
|
)
|
|
(207,746
|
)
|
|||
Recorded asset at end of year
|
$
|
94,292
|
|
|
$
|
92,796
|
|
|
$
|
88,102
|
|
|
|
|
|
|
|
||||||
Discontinued Operations - Life Insurance
|
|
|
|
|
|
||||||
Recorded asset at beginning of year
|
$
|
—
|
|
|
$
|
71,151
|
|
|
$
|
70,750
|
|
Underwriting costs deferred
|
—
|
|
|
1,376
|
|
|
5,463
|
|
|||
Amortization of deferred policy acquisition costs
|
—
|
|
|
(1,895
|
)
|
|
(5,181
|
)
|
|||
|
$
|
—
|
|
|
$
|
70,632
|
|
|
$
|
71,032
|
|
Change in "shadow" deferred policy acquisition costs
|
—
|
|
|
7,274
|
|
|
119
|
|
|||
Sale of discontinued operations
|
—
|
|
|
(77,906
|
)
|
|
—
|
|
|||
Recorded asset at end of year
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
71,151
|
|
|
|
|
|
|
|
||||||
Total
|
|
|
|
|
|
||||||
Recorded asset at beginning of year
|
$
|
92,796
|
|
|
$
|
159,253
|
|
|
$
|
164,112
|
|
Underwriting costs deferred
|
218,195
|
|
|
212,302
|
|
|
207,949
|
|
|||
Amortization of deferred policy acquisition costs
|
(216,699
|
)
|
|
(208,127
|
)
|
|
(212,927
|
)
|
|||
|
$
|
94,292
|
|
|
$
|
163,428
|
|
|
$
|
159,134
|
|
Change in "shadow" deferred policy acquisition costs
|
—
|
|
|
7,274
|
|
|
119
|
|
|||
Sale of discontinued operations
|
—
|
|
|
(77,906
|
)
|
|
—
|
|
|||
Recorded asset at end of year
|
$
|
94,292
|
|
|
$
|
92,796
|
|
|
$
|
159,253
|
|
|
2019
|
2018
|
||||
Real estate:
|
|
|
||||
Land
|
$
|
2,982
|
|
$
|
8,396
|
|
Buildings
|
83,360
|
|
69,214
|
|
||
Furniture and fixtures
|
7,253
|
|
5,733
|
|
||
Computer equipment and software
|
23,394
|
|
13,851
|
|
||
Airplane
|
—
|
|
—
|
|
||
Total property and equipment
|
$
|
116,989
|
|
$
|
97,194
|
|
|
Useful Life
|
Computer equipment and software
|
Three years
|
Furniture and fixtures
|
Seven years
|
Leasehold improvements
|
Shorter of the lease term or useful life of the asset
|
Real estate
|
Seven to thirty-nine years
|
Airplane
|
Five years
|
December 31, 2019
|
|
||||||||||||||
Type of Investment
|
Cost or Amortized Cost
|
|
Gross Unrealized Appreciation
|
|
Gross Unrealized Depreciation
|
|
Fair Value
|
||||||||
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
69,300
|
|
|
$
|
203
|
|
|
$
|
12
|
|
|
$
|
69,491
|
|
U.S. government agency
|
97,962
|
|
|
2,344
|
|
|
104
|
|
|
100,202
|
|
||||
States, municipalities and political subdivisions
|
|
|
|
|
|
|
|
||||||||
General obligations:
|
|
|
|
|
|
|
|
||||||||
Midwest
|
85,607
|
|
|
2,987
|
|
|
—
|
|
|
88,594
|
|
||||
Northeast
|
30,120
|
|
|
1,150
|
|
|
—
|
|
|
31,270
|
|
||||
South
|
111,688
|
|
|
3,515
|
|
|
—
|
|
|
115,203
|
|
||||
West
|
105,569
|
|
|
4,748
|
|
|
—
|
|
|
110,317
|
|
||||
Special revenue:
|
|
|
|
|
|
|
|
||||||||
Midwest
|
133,717
|
|
|
6,175
|
|
|
—
|
|
|
139,892
|
|
||||
Northeast
|
58,665
|
|
|
2,878
|
|
|
—
|
|
|
61,543
|
|
||||
South
|
224,214
|
|
|
10,452
|
|
|
—
|
|
|
234,666
|
|
||||
West
|
138,557
|
|
|
6,287
|
|
|
—
|
|
|
144,844
|
|
||||
Foreign bonds
|
4,936
|
|
|
181
|
|
|
—
|
|
|
5,117
|
|
||||
Public utilities
|
60,950
|
|
|
2,701
|
|
|
—
|
|
|
63,651
|
|
||||
Corporate bonds
|
|
|
|
|
|
|
|
||||||||
Energy
|
28,695
|
|
|
1,429
|
|
|
—
|
|
|
30,124
|
|
||||
Industrials
|
52,249
|
|
|
1,766
|
|
|
—
|
|
|
54,015
|
|
||||
Consumer goods and services
|
47,131
|
|
|
2,335
|
|
|
—
|
|
|
49,466
|
|
||||
Health care
|
8,998
|
|
|
482
|
|
|
—
|
|
|
9,480
|
|
||||
Technology, media and telecommunications
|
25,931
|
|
|
1,739
|
|
|
—
|
|
|
27,670
|
|
||||
Financial services
|
96,613
|
|
|
3,870
|
|
|
230
|
|
|
100,253
|
|
||||
Mortgage-backed securities
|
6,250
|
|
|
127
|
|
|
21
|
|
|
6,356
|
|
||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
|
||||||||
Government national mortgage association
|
78,400
|
|
|
2,053
|
|
|
97
|
|
|
80,356
|
|
||||
Federal home loan mortgage corporation
|
123,572
|
|
|
1,150
|
|
|
220
|
|
|
124,502
|
|
||||
Federal national mortgage association
|
70,322
|
|
|
1,631
|
|
|
108
|
|
|
71,845
|
|
||||
Asset-backed securities
|
314
|
|
|
436
|
|
|
—
|
|
|
750
|
|
||||
Total Available-For-Sale Fixed Maturities
|
$
|
1,659,760
|
|
|
$
|
60,639
|
|
|
$
|
792
|
|
|
$
|
1,719,607
|
|
December 31, 2018
|
|
||||||||||||||
Type of Investment
|
Cost or Amortized Cost
|
|
Gross Unrealized Appreciation
|
|
Gross Unrealized Depreciation
|
|
Fair Value
|
||||||||
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
27,632
|
|
|
$
|
6
|
|
|
$
|
220
|
|
|
$
|
27,418
|
|
U.S. government agency
|
215,535
|
|
|
896
|
|
|
1,749
|
|
|
214,682
|
|
||||
States, municipalities and political subdivisions
|
|
|
|
|
|
|
|
||||||||
General obligations:
|
|
|
|
|
|
|
|
||||||||
Midwest
|
94,806
|
|
|
1,091
|
|
|
685
|
|
|
95,212
|
|
||||
Northeast
|
37,326
|
|
|
432
|
|
|
103
|
|
|
37,655
|
|
||||
South
|
114,710
|
|
|
754
|
|
|
1,553
|
|
|
113,911
|
|
||||
West
|
107,787
|
|
|
1,229
|
|
|
1,175
|
|
|
107,841
|
|
||||
Special revenue:
|
|
|
|
|
|
|
|
||||||||
Midwest
|
140,025
|
|
|
1,609
|
|
|
870
|
|
|
140,764
|
|
||||
Northeast
|
62,737
|
|
|
452
|
|
|
1,241
|
|
|
61,948
|
|
||||
South
|
237,848
|
|
|
1,669
|
|
|
3,708
|
|
|
235,809
|
|
||||
West
|
143,829
|
|
|
1,294
|
|
|
2,203
|
|
|
142,920
|
|
||||
Foreign bonds
|
9,698
|
|
|
31
|
|
|
13
|
|
|
9,716
|
|
||||
Public utilities
|
56,808
|
|
|
274
|
|
|
1,023
|
|
|
56,059
|
|
||||
Corporate bonds
|
|
|
|
|
|
|
|
||||||||
Energy
|
28,909
|
|
|
43
|
|
|
304
|
|
|
28,648
|
|
||||
Industrials
|
53,867
|
|
|
124
|
|
|
906
|
|
|
53,085
|
|
||||
Consumer goods and services
|
54,323
|
|
|
142
|
|
|
819
|
|
|
53,646
|
|
||||
Health care
|
16,721
|
|
|
42
|
|
|
105
|
|
|
16,658
|
|
||||
Technology, media and telecommunications
|
26,819
|
|
|
35
|
|
|
678
|
|
|
26,176
|
|
||||
Financial services
|
81,286
|
|
|
238
|
|
|
2,175
|
|
|
79,349
|
|
||||
Mortgage-backed securities
|
7,642
|
|
|
14
|
|
|
232
|
|
|
7,424
|
|
||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
|
||||||||
Government national mortgage association
|
78,055
|
|
|
380
|
|
|
1,734
|
|
|
76,701
|
|
||||
Federal home loan mortgage corporation
|
108,403
|
|
|
524
|
|
|
1,304
|
|
|
107,623
|
|
||||
Federal national mortgage association
|
53,267
|
|
|
213
|
|
|
732
|
|
|
52,748
|
|
||||
Asset-backed securities
|
3,256
|
|
|
352
|
|
|
113
|
|
|
3,495
|
|
||||
Total Available-For-Sale Fixed Maturities
|
$
|
1,761,289
|
|
|
$
|
11,844
|
|
|
$
|
23,645
|
|
|
$
|
1,749,488
|
|
Maturities
|
|
|
|
|
|
|
|
|
||||||||
|
|
Available-For-Sale
|
|
Trading
|
||||||||||||
December 31, 2019
|
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||
Due in one year or less
|
|
$
|
56,316
|
|
|
$
|
56,635
|
|
|
$
|
2,464
|
|
|
$
|
3,132
|
|
Due after one year through five years
|
|
286,426
|
|
|
293,956
|
|
|
6,967
|
|
|
8,586
|
|
||||
Due after five years through 10 years
|
|
481,310
|
|
|
504,300
|
|
|
—
|
|
|
—
|
|
||||
Due after 10 years
|
|
556,850
|
|
|
580,907
|
|
|
2,510
|
|
|
3,538
|
|
||||
Asset-backed securities
|
|
314
|
|
|
750
|
|
|
—
|
|
|
—
|
|
||||
Mortgage-backed securities
|
|
6,250
|
|
|
6,356
|
|
|
—
|
|
|
—
|
|
||||
Collateralized mortgage obligations
|
|
272,294
|
|
|
276,703
|
|
|
—
|
|
|
—
|
|
||||
|
|
$
|
1,659,760
|
|
|
$
|
1,719,607
|
|
|
$
|
11,941
|
|
|
$
|
15,256
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net realized investment gains (losses) from continuing operations
|
|
|
|
|
|
||||||
Fixed maturities:
|
|
|
|
|
|
||||||
Available-for-sale
|
$
|
655
|
|
|
$
|
(254
|
)
|
|
$
|
829
|
|
Trading securities
|
|
|
|
|
|
||||||
Change in fair value
|
1,351
|
|
|
(296
|
)
|
|
924
|
|
|||
Sales
|
1,993
|
|
|
1,226
|
|
|
244
|
|
|||
Equity securities
|
|
|
|
|
|
||||||
Change in fair value
|
51,231
|
|
|
(21,994
|
)
|
|
332
|
|
|||
Sales
|
725
|
|
|
1,702
|
|
|
1,610
|
|
|||
Mortgage loans
|
(26
|
)
|
|
(46
|
)
|
|
—
|
|
|||
Real estate
|
(2,150
|
)
|
|
(517
|
)
|
|
116
|
|
|||
Total net realized investment gains (losses) from continuing operations
|
$
|
53,779
|
|
|
$
|
(20,179
|
)
|
|
$
|
4,055
|
|
Total net realized investment gains (losses) from discontinued operations
|
—
|
|
|
(1,057
|
)
|
|
4,008
|
|
|||
Total net realized investment gains (losses)
|
$
|
53,779
|
|
|
$
|
(21,236
|
)
|
|
$
|
8,063
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Proceeds from sales
|
$
|
41,760
|
|
|
$
|
132,250
|
|
|
$
|
7,404
|
|
Gross realized gains
|
302
|
|
|
140
|
|
|
1,046
|
|
|||
Gross realized losses
|
(13
|
)
|
|
(517
|
)
|
|
(20
|
)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Proceeds from sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,315
|
|
Gross realized gains
|
—
|
|
|
—
|
|
|
1,264
|
|
|||
Gross realized losses
|
—
|
|
|
—
|
|
|
(78
|
)
|
Years Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Investment income from continuing operations:
|
|
|
|
|
|
||||||
Interest on fixed maturities
|
$
|
50,274
|
|
|
$
|
51,356
|
|
|
$
|
44,784
|
|
Dividends on equity securities
|
7,842
|
|
|
7,731
|
|
|
7,108
|
|
|||
Income on other long-term investments
|
|
|
|
|
|
||||||
Investment income
|
3,115
|
|
|
8,383
|
|
|
6,870
|
|
|||
Change in value (1)
|
1,114
|
|
|
(10,116
|
)
|
|
(2,812
|
)
|
|||
Interest on mortgage loans
|
1,595
|
|
|
412
|
|
|
—
|
|
|||
Interest on short-term investments
|
522
|
|
|
606
|
|
|
120
|
|
|||
Interest on cash and cash equivalents
|
2,681
|
|
|
1,875
|
|
|
1,125
|
|
|||
Other
|
252
|
|
|
307
|
|
|
300
|
|
|||
Total investment income from continuing operations
|
$
|
67,395
|
|
|
$
|
60,554
|
|
|
$
|
57,495
|
|
Less investment expenses
|
6,981
|
|
|
7,660
|
|
|
6,305
|
|
|||
Net investment income from continuing operations
|
$
|
60,414
|
|
|
$
|
52,894
|
|
|
$
|
51,190
|
|
Net investment income from discontinued operations
|
$
|
—
|
|
|
$
|
12,663
|
|
|
$
|
49,720
|
|
Net investment income
|
$
|
60,414
|
|
|
$
|
65,557
|
|
|
$
|
100,910
|
|
(1)
|
Represents the change in value of our interests in limited liability partnerships that are recorded on the equity method of accounting.
|
|
2019
|
|
2018
|
|
2017
|
||||||
Change in net unrealized investment appreciation
|
|
|
|
|
|
||||||
Available-for-sale fixed maturities
|
$
|
71,648
|
|
|
$
|
(57,475
|
)
|
|
$
|
25,573
|
|
Available-for-sale equity securities
|
—
|
|
|
—
|
|
|
40,168
|
|
|||
Deferred policy acquisition costs
|
—
|
|
|
7,274
|
|
|
119
|
|
|||
Income tax effect
|
(15,046
|
)
|
|
10,543
|
|
|
(21,545
|
)
|
|||
Cumulative change in accounting principles
|
—
|
|
|
(191,244
|
)
|
|
—
|
|
|||
Accumulated effect of change in enacted tax rate
|
—
|
|
|
—
|
|
|
36,658
|
|
|||
Net unrealized investment depreciation of discontinued operations, sold
|
—
|
|
|
6,714
|
|
|
—
|
|
|||
Total change in net unrealized investment appreciation (depreciation), net of tax
|
$
|
56,602
|
|
|
$
|
(224,188
|
)
|
|
$
|
80,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2019
|
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
|
|
|
$
|
4,733
|
|
|
$
|
12
|
|
|
$
|
4,733
|
|
|
$
|
12
|
|
U.S. government agency
|
3
|
|
|
13,846
|
|
|
104
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,846
|
|
|
104
|
|
||||||
Corporate bonds - financial services
|
3
|
|
|
10,906
|
|
|
142
|
|
|
1
|
|
|
4,913
|
|
|
88
|
|
|
15,819
|
|
|
230
|
|
||||||
Mortgage-backed securities
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
1,585
|
|
|
21
|
|
|
1,585
|
|
|
21
|
|
||||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Government national mortgage association
|
2
|
|
|
8,444
|
|
|
38
|
|
|
5
|
|
|
3,053
|
|
|
59
|
|
|
11,497
|
|
|
97
|
|
||||||
Federal home loan mortgage corporation
|
12
|
|
|
50,829
|
|
|
183
|
|
|
3
|
|
|
4,844
|
|
|
37
|
|
|
55,673
|
|
|
220
|
|
||||||
Federal national mortgage association
|
4
|
|
|
23,515
|
|
|
90
|
|
|
3
|
|
|
1,102
|
|
|
18
|
|
|
24,617
|
|
|
108
|
|
||||||
Total Available-for-Sale Fixed Maturities
|
24
|
|
|
$
|
107,540
|
|
|
$
|
557
|
|
|
27
|
|
|
$
|
20,230
|
|
|
$
|
235
|
|
|
$
|
127,770
|
|
|
$
|
792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2018
|
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
|
1
|
|
|
$
|
8,018
|
|
|
$
|
7
|
|
|
5
|
|
|
$
|
14,645
|
|
|
$
|
213
|
|
|
$
|
22,663
|
|
|
$
|
220
|
|
U.S. government agency
|
4
|
|
|
17,907
|
|
|
81
|
|
|
17
|
|
|
80,696
|
|
|
1,668
|
|
|
98,603
|
|
|
1,749
|
|
||||||
States, municipalities and political subdivisions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
General obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Midwest
|
2
|
|
|
2,939
|
|
|
5
|
|
|
7
|
|
|
23,749
|
|
|
680
|
|
|
26,688
|
|
|
685
|
|
||||||
Northeast
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
12,110
|
|
|
103
|
|
|
12,110
|
|
|
103
|
|
||||||
South
|
1
|
|
|
778
|
|
|
2
|
|
|
22
|
|
|
50,174
|
|
|
1,551
|
|
|
50,952
|
|
|
1,553
|
|
||||||
West
|
1
|
|
|
1,203
|
|
|
5
|
|
|
16
|
|
|
48,499
|
|
|
1,170
|
|
|
49,702
|
|
|
1,175
|
|
||||||
Special revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Midwest
|
4
|
|
|
3,892
|
|
|
8
|
|
|
19
|
|
|
43,854
|
|
|
862
|
|
|
47,746
|
|
|
870
|
|
||||||
Northeast
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
37,629
|
|
|
1,241
|
|
|
37,629
|
|
|
1,241
|
|
||||||
South
|
4
|
|
|
4,298
|
|
|
30
|
|
|
45
|
|
|
107,016
|
|
|
3,678
|
|
|
111,314
|
|
|
3,708
|
|
||||||
West
|
4
|
|
|
11,115
|
|
|
32
|
|
|
28
|
|
|
69,667
|
|
|
2,171
|
|
|
80,782
|
|
|
2,203
|
|
||||||
Foreign bonds
|
1
|
|
|
2,984
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,984
|
|
|
13
|
|
||||||
Public utilities
|
12
|
|
|
25,781
|
|
|
552
|
|
|
8
|
|
|
17,253
|
|
|
471
|
|
|
43,034
|
|
|
1,023
|
|
||||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Energy
|
7
|
|
|
12,556
|
|
|
148
|
|
|
2
|
|
|
4,099
|
|
|
156
|
|
|
16,655
|
|
|
304
|
|
||||||
Industrials
|
9
|
|
|
21,970
|
|
|
397
|
|
|
4
|
|
|
11,040
|
|
|
509
|
|
|
33,010
|
|
|
906
|
|
||||||
Consumer goods and services
|
14
|
|
|
30,399
|
|
|
527
|
|
|
5
|
|
|
9,554
|
|
|
292
|
|
|
39,953
|
|
|
819
|
|
||||||
Health care
|
3
|
|
|
6,203
|
|
|
97
|
|
|
1
|
|
|
345
|
|
|
8
|
|
|
6,548
|
|
|
105
|
|
||||||
Technology, media and telecommunications
|
6
|
|
|
12,638
|
|
|
288
|
|
|
5
|
|
|
9,619
|
|
|
390
|
|
|
22,257
|
|
|
678
|
|
||||||
Financial services
|
13
|
|
|
30,177
|
|
|
650
|
|
|
13
|
|
|
32,855
|
|
|
1,525
|
|
|
63,032
|
|
|
2,175
|
|
||||||
Mortgage-backed securities
|
22
|
|
|
1,539
|
|
|
34
|
|
|
22
|
|
|
4,166
|
|
|
198
|
|
|
5,705
|
|
|
232
|
|
||||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Government national mortgage association
|
2
|
|
|
3,797
|
|
|
55
|
|
|
22
|
|
|
44,690
|
|
|
1,679
|
|
|
48,487
|
|
|
1,734
|
|
||||||
Federal home loan mortgage corporation
|
3
|
|
|
4,541
|
|
|
20
|
|
|
18
|
|
|
38,189
|
|
|
1,284
|
|
|
42,730
|
|
|
1,304
|
|
||||||
Federal national mortgage association
|
4
|
|
|
2,107
|
|
|
3
|
|
|
15
|
|
|
38,986
|
|
|
729
|
|
|
41,093
|
|
|
732
|
|
||||||
Asset-backed securities
|
1
|
|
|
2,829
|
|
|
113
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,829
|
|
|
113
|
|
||||||
Total Available-for-Sale Fixed Maturities
|
118
|
|
|
$
|
207,671
|
|
|
$
|
3,067
|
|
|
291
|
|
|
$
|
698,835
|
|
|
$
|
20,578
|
|
|
$
|
906,506
|
|
|
$
|
23,645
|
|
•
|
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.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Investments
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities
|
$
|
1,719,607
|
|
|
$
|
1,719,607
|
|
|
$
|
1,749,488
|
|
|
$
|
1,749,488
|
|
Trading securities
|
15,256
|
|
|
15,256
|
|
|
13,240
|
|
|
13,240
|
|
||||
Equity securities:
|
299,203
|
|
|
299,203
|
|
|
248,361
|
|
|
248,361
|
|
||||
Mortgage loans
|
43,992
|
|
|
42,448
|
|
|
26,021
|
|
|
25,782
|
|
||||
Other long-term investments
|
78,410
|
|
|
78,410
|
|
|
37,077
|
|
|
37,077
|
|
||||
Short-term investments
|
175
|
|
|
175
|
|
|
175
|
|
|
175
|
|
||||
Cash and cash equivalents
|
120,722
|
|
|
120,722
|
|
|
64,454
|
|
|
64,454
|
|
||||
Corporate-owned life insurance
|
6,777
|
|
|
6,777
|
|
|
4,907
|
|
|
4,907
|
|
|
|
|
Fair Value Measurements
|
||||||||||||
Description
|
December 31, 2019
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
69,491
|
|
|
$
|
—
|
|
|
$
|
69,491
|
|
|
$
|
—
|
|
U.S. government agency
|
100,202
|
|
|
—
|
|
|
100,202
|
|
|
—
|
|
||||
States, municipalities and political subdivisions
|
|
|
|
|
|
|
|
||||||||
General obligations
|
|
|
|
|
|
|
|
||||||||
Midwest
|
88,594
|
|
|
—
|
|
|
88,594
|
|
|
—
|
|
||||
Northeast
|
31,270
|
|
|
—
|
|
|
31,270
|
|
|
—
|
|
||||
South
|
115,203
|
|
|
—
|
|
|
115,203
|
|
|
—
|
|
||||
West
|
110,317
|
|
|
—
|
|
|
110,317
|
|
|
—
|
|
||||
Special revenue
|
|
|
|
|
|
|
|
||||||||
Midwest
|
139,892
|
|
|
—
|
|
|
139,892
|
|
|
—
|
|
||||
Northeast
|
61,543
|
|
|
—
|
|
|
61,543
|
|
|
—
|
|
||||
South
|
234,666
|
|
|
—
|
|
|
234,666
|
|
|
—
|
|
||||
West
|
144,844
|
|
|
—
|
|
|
144,844
|
|
|
—
|
|
||||
Foreign bonds
|
5,117
|
|
|
—
|
|
|
5,117
|
|
|
—
|
|
||||
Public utilities
|
63,651
|
|
|
—
|
|
|
63,651
|
|
|
—
|
|
||||
Corporate bonds
|
|
|
|
|
|
|
|
||||||||
Energy
|
30,124
|
|
|
—
|
|
|
30,124
|
|
|
—
|
|
||||
Industrials
|
54,015
|
|
|
—
|
|
|
54,015
|
|
|
—
|
|
||||
Consumer goods and services
|
49,466
|
|
|
—
|
|
|
49,466
|
|
|
—
|
|
||||
Health care
|
9,480
|
|
|
—
|
|
|
9,480
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
27,670
|
|
|
—
|
|
|
27,670
|
|
|
—
|
|
||||
Financial services
|
100,253
|
|
|
—
|
|
|
100,003
|
|
|
250
|
|
||||
Mortgage-backed securities
|
6,356
|
|
|
—
|
|
|
6,356
|
|
|
—
|
|
||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
|
||||||||
Government national mortgage association
|
80,356
|
|
|
—
|
|
|
80,356
|
|
|
—
|
|
||||
Federal home loan mortgage corporation
|
124,502
|
|
|
—
|
|
|
124,502
|
|
|
—
|
|
||||
Federal national mortgage association
|
71,845
|
|
|
—
|
|
|
71,845
|
|
|
—
|
|
||||
Asset-backed securities
|
750
|
|
|
—
|
|
|
—
|
|
|
750
|
|
||||
Total Available-For-Sale Fixed Maturities
|
$
|
1,719,607
|
|
|
$
|
—
|
|
|
$
|
1,718,607
|
|
|
$
|
1,000
|
|
TRADING
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
|
|
|
|
|
|
|
||||||||
Consumer goods and services
|
$
|
2,276
|
|
|
$
|
—
|
|
|
$
|
2,276
|
|
|
$
|
—
|
|
Health care
|
4,701
|
|
|
—
|
|
|
4,701
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
1,732
|
|
|
—
|
|
|
1,732
|
|
|
—
|
|
||||
Financial services
|
2,460
|
|
|
—
|
|
|
2,460
|
|
|
—
|
|
||||
Redeemable preferred stocks
|
4,087
|
|
|
4,087
|
|
|
—
|
|
|
—
|
|
||||
Total Trading Securities
|
$
|
15,256
|
|
|
$
|
4,087
|
|
|
$
|
11,169
|
|
|
$
|
—
|
|
Equity securities
|
|
|
|
|
|
|
|
||||||||
Public utilities
|
16,295
|
|
|
16,295
|
|
|
—
|
|
|
—
|
|
||||
Energy
|
14,639
|
|
|
14,639
|
|
|
—
|
|
|
—
|
|
||||
Industrials
|
57,330
|
|
|
57,330
|
|
|
—
|
|
|
—
|
|
||||
Consumer goods and services
|
29,935
|
|
|
29,935
|
|
|
—
|
|
|
—
|
|
||||
Health care
|
27,285
|
|
|
27,285
|
|
|
—
|
|
|
—
|
|
||||
Technology, Media & Telecommunications
|
19,265
|
|
|
19,265
|
|
|
—
|
|
|
—
|
|
||||
Financial Services
|
127,780
|
|
|
127,780
|
|
|
—
|
|
|
—
|
|
||||
Nonredeemable preferred stocks
|
6,674
|
|
|
6,079
|
|
|
—
|
|
|
595
|
|
Total Equity Securities
|
$
|
299,203
|
|
|
$
|
298,608
|
|
|
$
|
—
|
|
|
$
|
595
|
|
Short-Term Investments
|
$
|
175
|
|
|
$
|
175
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money Market Accounts
|
$
|
9,334
|
|
|
$
|
9,334
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate-Owned Life Insurance
|
$
|
6,777
|
|
|
$
|
—
|
|
|
$
|
6,777
|
|
|
$
|
—
|
|
Total Assets Measured at Fair Value
|
$
|
2,050,352
|
|
|
$
|
312,204
|
|
|
$
|
1,736,553
|
|
|
$
|
1,595
|
|
|
|
|
Fair Value Measurements
|
||||||||||||
Description
|
December 31, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
AVAILABLE-FOR-SALE
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
27,418
|
|
|
$
|
—
|
|
|
$
|
27,418
|
|
|
$
|
—
|
|
U.S. government agency
|
214,682
|
|
|
—
|
|
|
214,682
|
|
|
—
|
|
||||
States, municipalities and political subdivisions
|
|
|
|
|
|
|
|
||||||||
General obligations
|
|
|
|
|
|
|
|
||||||||
Midwest
|
95,212
|
|
|
—
|
|
|
95,212
|
|
|
—
|
|
||||
Northeast
|
37,655
|
|
|
—
|
|
|
37,655
|
|
|
—
|
|
||||
South
|
113,911
|
|
|
—
|
|
|
113,911
|
|
|
—
|
|
||||
West
|
107,841
|
|
|
—
|
|
|
107,841
|
|
|
—
|
|
||||
Special revenue
|
|
|
|
|
|
|
|
||||||||
Midwest
|
140,764
|
|
|
—
|
|
|
140,764
|
|
|
—
|
|
||||
Northeast
|
61,948
|
|
|
—
|
|
|
61,948
|
|
|
—
|
|
||||
South
|
235,809
|
|
|
—
|
|
|
235,809
|
|
|
—
|
|
||||
West
|
142,920
|
|
|
—
|
|
|
142,920
|
|
|
—
|
|
||||
Foreign bonds
|
9,716
|
|
|
—
|
|
|
9,716
|
|
|
—
|
|
||||
Public utilities
|
56,059
|
|
|
—
|
|
|
56,059
|
|
|
—
|
|
||||
Corporate bonds
|
|
|
|
|
|
|
|
||||||||
Energy
|
28,648
|
|
|
—
|
|
|
28,648
|
|
|
—
|
|
||||
Industrials
|
53,085
|
|
|
—
|
|
|
53,085
|
|
|
—
|
|
||||
Consumer goods and services
|
53,646
|
|
|
—
|
|
|
53,646
|
|
|
—
|
|
||||
Health care
|
16,658
|
|
|
—
|
|
|
16,658
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
26,176
|
|
|
—
|
|
|
26,176
|
|
|
—
|
|
||||
Financial services
|
79,349
|
|
|
—
|
|
|
79,099
|
|
|
250
|
|
||||
Mortgage-backed securities
|
7,424
|
|
|
—
|
|
|
7,424
|
|
|
—
|
|
||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
|
||||||||
Government national mortgage association
|
76,701
|
|
|
—
|
|
|
76,701
|
|
|
—
|
|
||||
Federal home loan mortgage corporation
|
107,623
|
|
|
—
|
|
|
107,623
|
|
|
—
|
|
||||
Federal national mortgage association
|
52,748
|
|
|
—
|
|
|
52,748
|
|
|
—
|
|
||||
Asset-backed securities
|
3,495
|
|
|
—
|
|
|
2,829
|
|
|
666
|
|
||||
Total Available-For-Sale Fixed Maturities
|
$
|
1,749,488
|
|
|
$
|
—
|
|
|
$
|
1,748,572
|
|
|
$
|
916
|
|
TRADING
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
|
|
|
|
|
|
|
||||||||
Industrials
|
$
|
397
|
|
|
$
|
—
|
|
|
$
|
397
|
|
|
$
|
—
|
|
Consumer goods and services
|
1,599
|
|
|
—
|
|
|
1,599
|
|
|
—
|
|
||||
Health care
|
3,236
|
|
|
—
|
|
|
3,236
|
|
|
—
|
|
||||
Technology, media and telecommunications
|
3,028
|
|
|
—
|
|
|
3,028
|
|
|
—
|
|
||||
Financial services
|
2,231
|
|
|
—
|
|
|
2,231
|
|
|
—
|
|
||||
Redeemable preferred stocks
|
2,749
|
|
|
2,749
|
|
|
—
|
|
|
—
|
|
||||
Total Trading Securities
|
$
|
13,240
|
|
|
$
|
2,749
|
|
|
$
|
10,491
|
|
|
$
|
—
|
|
Equity securities
|
|
|
|
|
|
|
|
||||||||
Public utilities
|
$
|
15,949
|
|
|
$
|
15,949
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Energy
|
10,975
|
|
|
10,975
|
|
|
—
|
|
|
—
|
|
||||
Industrials
|
53,536
|
|
|
53,536
|
|
|
—
|
|
|
—
|
|
||||
Consumer goods and services
|
24,465
|
|
|
24,465
|
|
|
—
|
|
|
—
|
|
||||
Health care
|
22,286
|
|
|
22,286
|
|
|
—
|
|
|
—
|
|
||||
Financial Services
|
101,555
|
|
|
101,555
|
|
|
—
|
|
|
—
|
|
Technology, media and telecommunications
|
13,944
|
|
|
13,944
|
|
|
—
|
|
|
—
|
|
||||
Nonredeemable preferred stocks
|
5,651
|
|
|
5,056
|
|
|
—
|
|
|
595
|
|
||||
Total Equity Securities
|
$
|
248,361
|
|
|
$
|
247,766
|
|
|
$
|
—
|
|
|
$
|
595
|
|
Short-Term Investments
|
$
|
175
|
|
|
$
|
175
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money Market Accounts
|
$
|
3,275
|
|
|
$
|
3,275
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate-Owned Life Insurance
|
$
|
4,907
|
|
|
$
|
—
|
|
|
$
|
4,907
|
|
|
$
|
—
|
|
Total Assets Measured at Fair Value
|
$
|
2,019,446
|
|
|
$
|
253,965
|
|
|
$
|
1,763,970
|
|
|
$
|
1,511
|
|
|
|
Corporate bonds
|
|
Asset-backed securities
|
|
Equities
|
|
Total
|
||||||||
Balance at January 1, 2019
|
|
$
|
250
|
|
|
$
|
666
|
|
|
$
|
595
|
|
|
$
|
1,511
|
|
Unrealized gains (losses) (1)
|
|
—
|
|
|
84
|
|
|
—
|
|
|
84
|
|
||||
Purchases
|
|
100
|
|
|
—
|
|
|
—
|
|
|
100
|
|
||||
Disposals
|
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
||||
Balance at December 31, 2019
|
|
$
|
250
|
|
|
$
|
750
|
|
|
$
|
595
|
|
|
$
|
1,595
|
|
|
|
Corporate bonds
|
|
Asset-backed securities
|
|
Equities
|
|
Total
|
||||||||
Balance at January 1, 2018
|
|
$
|
100
|
|
|
$
|
647
|
|
|
$
|
882
|
|
|
$
|
1,629
|
|
Unrealized gains (losses) (1)
|
|
—
|
|
|
19
|
|
|
(287
|
)
|
|
(268
|
)
|
||||
Purchases
|
|
150
|
|
|
—
|
|
|
—
|
|
|
150
|
|
||||
Balance at December 31, 2018
|
|
$
|
250
|
|
|
$
|
666
|
|
|
$
|
595
|
|
|
$
|
1,511
|
|
Commercial Mortgage Loans
|
|||||||
Loan-to-value
|
December 31, 2019
|
|
December 31, 2018
|
||||
Less than 65%
|
$
|
34,024
|
|
|
25,828
|
|
|
65%-75%
|
8,496
|
|
|
—
|
|
||
Greater than 75%
|
—
|
|
|
—
|
|
||
Total amortized cost
|
$
|
42,520
|
|
|
$
|
25,828
|
|
Valuation allowance
|
(72
|
)
|
|
(46
|
)
|
||
Total mortgage loans
|
$
|
42,448
|
|
|
$
|
25,782
|
|
Mortgage Loans by Region
|
|||||||||||||
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
|
Carrying Value
|
|
Percent of Total
|
|
Carrying Value
|
|
Percent of Total
|
||||||
East North Central
|
$
|
3,245
|
|
|
7.6
|
%
|
|
$
|
3,244
|
|
|
12.6
|
%
|
Southern Atlantic
|
7,026
|
|
|
16.5
|
|
|
6,652
|
|
|
25.8
|
|
||
East South Central
|
8,358
|
|
|
19.7
|
|
|
4,975
|
|
|
19.3
|
|
||
New England
|
6,588
|
|
|
15.5
|
|
|
6,588
|
|
|
25.4
|
|
||
Middle Atlantic
|
15,076
|
|
|
35.5
|
|
|
4,369
|
|
|
16.9
|
|
||
Mountain
|
2,227
|
|
|
5.2
|
|
|
—
|
|
|
—
|
|
||
Total mortgage loans at amortized cost
|
$
|
42,520
|
|
|
100.0
|
%
|
|
$
|
25,828
|
|
|
100.0
|
%
|
Mortgage Loans by Property Type
|
|||||||||||||
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
|
Carrying Value
|
|
Percent of Total
|
|
Carrying Value
|
|
Percent of Total
|
||||||
Commercial
|
|
|
|
|
|
|
|
||||||
Multifamily
|
$
|
11,741
|
|
|
27.6
|
%
|
|
$
|
3,244
|
|
|
12.6
|
%
|
Office
|
11,848
|
|
|
27.9
|
|
|
11,627
|
|
|
45.0
|
|
||
Retail
|
2,227
|
|
|
5.2
|
|
|
—
|
|
|
—
|
|
||
Mixed use/Other
|
16,704
|
|
|
39.3
|
|
|
10,957
|
|
|
42.4
|
|
||
Total mortgage loans at amortized cost
|
$
|
42,520
|
|
|
100.0
|
%
|
|
$
|
25,828
|
|
|
100.0
|
%
|
|
|
|
|
|
|
||||||
Years Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Ceded Business
|
|
|
|
|
|
||||||
Ceded premiums written
|
$
|
74,511
|
|
|
$
|
66,800
|
|
|
$
|
61,273
|
|
Ceded premiums earned
|
72,023
|
|
|
63,487
|
|
|
61,305
|
|
|||
Loss and loss settlement expenses ceded
|
28,447
|
|
|
22,317
|
|
|
33,303
|
|
|||
|
|
|
|
|
|
||||||
Assumed Business
|
|
|
|
|
|
||||||
Assumed premiums written
|
$
|
27,869
|
|
|
$
|
16,761
|
|
|
$
|
15,179
|
|
Assumed premiums earned
|
25,412
|
|
|
16,957
|
|
|
15,059
|
|
|||
Loss and loss settlement expenses assumed
|
14,813
|
|
|
(3,954
|
)
|
|
24,688
|
|
|
2019 Reinsurance Programs
|
|||||||||||||
Type of Reinsurance
|
Stated Retention
|
|
Limits
|
|
Coverage
|
|||||||||
Casualty excess of loss
|
$
|
2,500
|
|
|
$
|
60,000
|
|
|
100
|
%
|
of
|
$
|
57,500
|
|
Property excess of loss
|
2,500
|
|
|
25,000
|
|
|
100
|
%
|
of
|
$
|
22,500
|
|
||
Surety excess of loss
|
1,500
|
|
|
45,000
|
|
|
100
|
%
|
of
|
$
|
43,500
|
|
||
Property catastrophe, excess
|
20,000
|
|
|
250,000
|
|
|
100
|
%
|
of
|
$
|
230,000
|
|
||
Boiler and machinery
|
N/A
|
|
|
50,000
|
|
|
100
|
%
|
of
|
$
|
50,000
|
|
|
2018 Reinsurance Programs
|
|||||||||||||
Type of Reinsurance
|
Stated Retention
|
|
Limits
|
|
Coverage
|
|||||||||
Casualty excess of loss
|
$
|
2,500
|
|
|
$
|
60,000
|
|
|
100
|
%
|
of
|
$
|
57,500
|
|
Property excess of loss
|
2,500
|
|
|
25,000
|
|
|
100
|
%
|
of
|
$
|
22,500
|
|
||
Surety excess of loss
|
1,500
|
|
|
45,000
|
|
|
100
|
%
|
of
|
$
|
43,500
|
|
||
Property catastrophe, excess
|
20,000
|
|
|
250,000
|
|
|
100
|
%
|
of
|
$
|
230,000
|
|
||
Boiler and machinery
|
N/A
|
|
|
50,000
|
|
|
100
|
%
|
of
|
$
|
50,000
|
|
|
2017 Reinsurance Programs
|
|||||||||||||
Type of Reinsurance
|
Stated Retention
|
|
Limits
|
|
Coverage
|
|||||||||
Casualty excess of loss
|
$
|
2,500
|
|
|
$
|
60,000
|
|
|
100
|
%
|
of
|
$
|
57,500
|
|
Property excess of loss
|
2,500
|
|
|
25,000
|
|
|
100
|
%
|
of
|
$
|
22,500
|
|
||
Surety excess of loss
|
1,500
|
|
|
45,000
|
|
|
100
|
%
|
of
|
$
|
43,500
|
|
||
Property catastrophe, excess
|
20,000
|
|
|
250,000
|
|
|
100
|
%
|
of
|
$
|
230,000
|
|
||
Boiler and machinery
|
N/A
|
|
|
50,000
|
|
|
100
|
%
|
of
|
$
|
50,000
|
|
|
|
|
|
|
|
||||||
Years Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Ceded Business
|
|
|
|
|
|
||||||
Ceded insurance in-force
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,014,794
|
|
Ceded premiums earned
|
—
|
|
|
716
|
|
|
2,722
|
|
|||
Loss and loss settlement expenses ceded
|
—
|
|
|
1,473
|
|
|
3,726
|
|
|
|
|
|
|
|
||||||
Years Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Gross liability for losses and loss settlement expenses
at beginning of year |
$
|
1,312,483
|
|
|
$
|
1,224,183
|
|
|
$
|
1,123,896
|
|
Ceded losses and loss settlement expenses
|
(57,094
|
)
|
|
(59,871
|
)
|
|
(59,794
|
)
|
|||
Net liability for losses and loss settlement expenses
at beginning of year |
$
|
1,255,389
|
|
|
$
|
1,164,312
|
|
|
$
|
1,064,102
|
|
Losses and loss settlement expenses incurred
for claims occurring during |
|
|
|
|
|
||||||
Current year
|
$
|
835,507
|
|
|
$
|
785,778
|
|
|
$
|
779,966
|
|
Prior years
|
(5,335
|
)
|
|
(54,167
|
)
|
|
(54,253
|
)
|
|||
Total incurred
|
$
|
830,172
|
|
|
$
|
731,611
|
|
|
$
|
725,713
|
|
Losses and loss settlement expense payments
for claims occurring during |
|
|
|
|
|
||||||
Current year
|
$
|
333,975
|
|
|
$
|
306,032
|
|
|
$
|
311,972
|
|
Prior years
|
398,368
|
|
|
334,502
|
|
|
313,531
|
|
|||
Total paid
|
$
|
732,343
|
|
|
$
|
640,534
|
|
|
$
|
625,503
|
|
Net liability for losses and loss settlement expenses
at end of year |
$
|
1,353,218
|
|
|
$
|
1,255,389
|
|
|
$
|
1,164,312
|
|
Ceded loss and loss settlement expenses
|
68,536
|
|
|
57,094
|
|
|
59,871
|
|
|||
Gross liability for losses and loss settlement expenses
at end of year |
$
|
1,421,754
|
|
|
$
|
1,312,483
|
|
|
$
|
1,224,183
|
|
|
|
December 31, 2019
|
||
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses:
|
|
|
||
Commercial other liability
|
|
$
|
532,153
|
|
Commercial fire and allied
|
|
113,569
|
|
|
Commercial automobile
|
|
410,716
|
|
|
Commercial workers' compensation
|
|
142,587
|
|
|
Personal
|
|
29,390
|
|
|
All other lines
|
|
28,768
|
|
|
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses
|
|
1,257,183
|
|
|
Net outstanding liabilities for unpaid unallocated loss settlement expenses
|
|
94,359
|
|
|
Fair value adjustment (purchase accounting adjustment for Mercer acquisition)
|
|
1,676
|
|
|
Liabilities for unpaid losses and loss settlement expenses, net of reinsurance
|
|
1,353,218
|
|
|
|
|
|
||
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses:
|
|
|
||
Commercial other liability
|
|
29,070
|
|
|
Commercial fire and allied
|
|
8,652
|
|
|
Commercial automobile
|
|
993
|
|
|
Commercial workers' compensation
|
|
28,681
|
|
|
Personal
|
|
12
|
|
|
All other lines
|
|
2,731
|
|
|
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses
|
|
70,139
|
|
|
Reinsurance fair value amortization (purchase accounting adjustment for Mercer acquisition)
|
|
(1,603
|
)
|
|
Total reinsurance recoverable on unpaid losses and loss settlement expenses
|
|
68,536
|
|
|
Total gross liability for unpaid losses and loss settlement expenses
|
|
$
|
1,421,754
|
|
|
Average annual percentage payout of incurred claims by age, net of reinsurance
|
|||||||||||||||||||
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
||||||||||
|
(Unaudited)
|
|||||||||||||||||||
Commercial other liability
|
9.7
|
%
|
15.3
|
%
|
17.1
|
%
|
16.7
|
%
|
14.1
|
%
|
7.3
|
%
|
4.6
|
%
|
2.5
|
%
|
2.0
|
%
|
1.5
|
%
|
Commercial fire and allied
|
64.3
|
%
|
21.5
|
%
|
4.8
|
%
|
3.6
|
%
|
2.4
|
%
|
1.5
|
%
|
0.7
|
%
|
0.7
|
%
|
0.2
|
%
|
0.1
|
%
|
Commercial automobile
|
37.7
|
%
|
19.9
|
%
|
15.2
|
%
|
11.6
|
%
|
7.0
|
%
|
3.3
|
%
|
2.0
|
%
|
0.5
|
%
|
0.6
|
%
|
—
|
%
|
Commercial workers' compensation
|
27.3
|
%
|
30.4
|
%
|
14.6
|
%
|
7.5
|
%
|
3.5
|
%
|
2.6
|
%
|
1.8
|
%
|
3.9
|
%
|
0.6
|
%
|
1.0
|
%
|
Personal
|
71.8
|
%
|
19.3
|
%
|
3.9
|
%
|
2.4
|
%
|
0.8
|
%
|
0.7
|
%
|
0.2
|
%
|
—
|
%
|
0.1
|
%
|
—
|
%
|
|
Statutory Capital and Surplus
|
|
Statutory Net Income (Loss)
|
||||
2019
|
|
|
|
||||
Property and casualty business
|
$
|
707,571
|
|
|
$
|
(22,393
|
)
|
2018
|
|
|
|
||||
Property and casualty business
|
$
|
774,257
|
|
|
$
|
219,065
|
|
Life, accident and health business(1)
|
—
|
|
|
3,548
|
|
||
2017
|
|
|
|
||||
Property and casualty business
|
$
|
757,443
|
|
|
$
|
19,687
|
|
Life, accident and health business
|
144,533
|
|
|
5,485
|
|
(1)
|
The 2018 Life, accident and health business only includes results prior to the closing of the sale of United Life Insurance Company, which closed on March 30, 2018. Prior to the closing of the sale, United Fire & Casualty Company owned United Life Insurance Company, accordingly, the property and casualty statutory capital and surplus includes life, accident and health statutory capital and surplus, and therefore represents our total consolidated statutory capital and surplus.
|
|
|
|
|
|
|
||||||
Years Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Current
|
$
|
(7,843
|
)
|
|
$
|
18,493
|
|
|
$
|
1,989
|
|
Deferred
|
9,902
|
|
|
(21,791
|
)
|
|
(26,719
|
)
|
|||
Total
|
$
|
2,059
|
|
|
$
|
(3,298
|
)
|
|
$
|
(24,730
|
)
|
|
|
|
|
|
|
||||||
Years Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Computed expected income tax expense
|
$
|
3,544
|
|
|
$
|
5,114
|
|
|
$
|
9,202
|
|
Impact of enactment of Tax Act
|
—
|
|
|
—
|
|
|
(21,884
|
)
|
|||
Tax-exempt municipal bond interest income
|
(3,961
|
)
|
|
(4,235
|
)
|
|
(8,875
|
)
|
|||
Nontaxable dividend income
|
(594
|
)
|
|
(591
|
)
|
|
(1,540
|
)
|
|||
Valuation allowance reduction
|
—
|
|
|
(329
|
)
|
|
(547
|
)
|
|||
Compensation
|
1,638
|
|
|
(497
|
)
|
|
(695
|
)
|
|||
Reinsurance
|
998
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
434
|
|
|
(2,760
|
)
|
|
(391
|
)
|
|||
Consolidated federal income tax expense (benefit)
|
$
|
2,059
|
|
|
$
|
(3,298
|
)
|
|
$
|
(24,730
|
)
|
|
|
|
|
|
|
||||||
Reconciliation of consolidated federal income tax expense (benefit) from:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2,059
|
|
|
$
|
(11,405
|
)
|
|
$
|
(29,220
|
)
|
Gain on sale of discontinued operations
|
|
|
|
7,544
|
|
|
—
|
|
|||
Discontinued operations
|
—
|
|
|
563
|
|
|
4,490
|
|
|||
Consolidated federal income tax expense (benefit)
|
$
|
2,059
|
|
|
$
|
(3,298
|
)
|
|
$
|
(24,730
|
)
|
|
|
|
|
||||
December 31,
|
2019
|
|
2018
|
||||
Deferred tax liabilities
|
|
|
|
||||
Net unrealized appreciation on investment securities:
|
|
|
|
||||
Equity securities
|
$
|
48,652
|
|
|
$
|
38,430
|
|
All other securities
|
12,568
|
|
|
(2,478
|
)
|
||
Deferred policy acquisition costs
|
19,801
|
|
|
19,487
|
|
||
Investments in partnerships
|
2,156
|
|
|
2,510
|
|
||
Prepaid pension cost
|
4,441
|
|
|
4,158
|
|
||
Net bond discount accretion
|
357
|
|
|
296
|
|
||
Depreciation
|
1,908
|
|
|
1,063
|
|
||
Revaluation of investment basis (1)
|
377
|
|
|
419
|
|
||
Identifiable intangible assets (1)
|
1,540
|
|
|
1,689
|
|
||
Other
|
1,416
|
|
|
1,639
|
|
||
Gross deferred tax liability
|
$
|
93,216
|
|
|
$
|
67,213
|
|
Deferred tax assets
|
|
|
|
||||
Financial statement reserves in excess of income tax reserves
|
$
|
20,845
|
|
|
$
|
19,800
|
|
Unearned premium adjustment
|
20,816
|
|
|
20,406
|
|
||
Net operating loss carryforwards
|
1,708
|
|
|
—
|
|
||
Underfunded benefit plan obligation
|
9,072
|
|
|
5,622
|
|
||
Post-retirement benefits other than pensions
|
10,785
|
|
|
12,035
|
|
||
Other-than-temporary impairment of investments
|
2,094
|
|
|
2,094
|
|
||
Contingent ceding commission accrual
|
—
|
|
|
14
|
|
||
Compensation expense related to stock options
|
2,394
|
|
|
3,506
|
|
||
Other
|
4,916
|
|
|
4,648
|
|
||
Deferred tax asset
|
$
|
72,630
|
|
|
$
|
68,125
|
|
Net deferred tax liability (asset)
|
$
|
20,586
|
|
|
$
|
(912
|
)
|
•
|
Fixed income securities, which may include bonds, and convertible securities;
|
•
|
Equity securities, which may include various types of stock, such as large-cap, mid-cap, small-cap, and international stocks;
|
•
|
Pooled separate accounts, which includes two separate funds, a core plus bond separate account and a real estate separate account;
|
•
|
An arbitrage fund, which is a fund that takes advantage of price discrepancies, primarily equity securities, for the same asset in different markets;
|
•
|
A group annuity contract that is administered by United Life, a former subsidiary of United Fire; and
|
•
|
Cash and cash equivalents, which include money market funds.
|
|
|
|
|
|
|
|
|
|
Target
|
||||||||||
Pension Plan Assets
|
2019
|
|
% of Total
|
|
2018
|
|
% of Total
|
|
Allocation
|
||||||||||
Fixed maturity securities - corporate bonds
|
$
|
13,250
|
|
|
6.7
|
%
|
|
$
|
10,051
|
|
|
6.1
|
%
|
|
0
|
%
|
-
|
15
|
%
|
Redeemable preferred stock
|
2,929
|
|
|
1.5
|
|
|
2,697
|
|
|
1.6
|
|
|
0
|
%
|
-
|
10
|
%
|
||
Equity securities
|
117,117
|
|
|
58.7
|
|
|
86,586
|
|
|
52.5
|
|
|
50
|
%
|
-
|
70
|
%
|
||
Pooled separate accounts
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Core plus bond separate account fund
|
20,505
|
|
|
10.3
|
|
|
20,222
|
|
|
12.3
|
|
|
0
|
%
|
-
|
40
|
%
|
||
U.S. property separate account fund
|
22,114
|
|
|
11.1
|
|
|
20,841
|
|
|
12.6
|
|
|
0
|
%
|
-
|
25
|
%
|
||
Arbitrage fund
|
9,245
|
|
|
4.6
|
|
|
8,716
|
|
|
5.3
|
|
|
0
|
%
|
-
|
10
|
%
|
||
United Life annuity
|
10,855
|
|
|
5.4
|
|
|
10,339
|
|
|
6.3
|
|
|
5
|
%
|
-
|
10
|
%
|
||
Cash and cash equivalents
|
3,451
|
|
|
1.7
|
|
|
5,367
|
|
|
3.3
|
|
|
0
|
%
|
-
|
10
|
%
|
||
Total plan assets
|
$
|
199,466
|
|
|
100.0
|
%
|
|
$
|
164,819
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
Fair Value Measurements
|
||||||||||||
Description
|
December 31, 2019
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Fixed maturity securities - corporate bonds
|
$
|
13,250
|
|
|
$
|
—
|
|
|
$
|
13,250
|
|
|
$
|
—
|
|
Redeemable preferred stock
|
2,929
|
|
|
2,929
|
|
|
—
|
|
|
—
|
|
||||
Equity securities
|
117,117
|
|
|
117,117
|
|
|
—
|
|
|
—
|
|
||||
Pooled separate accounts
|
|
|
|
|
|
|
|
||||||||
Core plus bond separate account fund
|
20,505
|
|
|
—
|
|
|
20,505
|
|
|
—
|
|
||||
U.S. property separate account fund
|
22,114
|
|
|
—
|
|
|
—
|
|
|
22,114
|
|
||||
Arbitrage fund
|
9,245
|
|
|
—
|
|
|
9,245
|
|
|
—
|
|
||||
Money market funds
|
3,448
|
|
|
3,448
|
|
|
—
|
|
|
—
|
|
||||
Total assets measured at fair value
|
$
|
188,608
|
|
|
$
|
123,494
|
|
|
$
|
43,000
|
|
|
$
|
22,114
|
|
|
|
|
Fair Value Measurements
|
||||||||||||
Description
|
December 31, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Fixed maturity securities - corporate bonds
|
$
|
10,051
|
|
|
$
|
—
|
|
|
$
|
10,051
|
|
|
$
|
—
|
|
Redeemable preferred stock
|
2,697
|
|
|
2,697
|
|
|
—
|
|
|
—
|
|
||||
Equity securities
|
86,586
|
|
|
86,586
|
|
|
—
|
|
|
—
|
|
||||
Pooled separate accounts
|
|
|
|
|
|
|
|
||||||||
Core plus bond separate account fund
|
20,222
|
|
|
—
|
|
|
20,222
|
|
|
—
|
|
||||
U.S. property separate account fund
|
20,841
|
|
|
—
|
|
|
—
|
|
|
20,841
|
|
||||
Arbitrage fund
|
8,716
|
|
|
—
|
|
|
8,716
|
|
|
—
|
|
||||
Money market funds
|
5,364
|
|
|
5,364
|
|
|
—
|
|
|
—
|
|
||||
Total assets measured at fair value
|
$
|
154,477
|
|
|
$
|
94,647
|
|
|
$
|
38,989
|
|
|
$
|
20,841
|
|
|
U.S. property separate account fund
|
||
Balance at January 1, 2019
|
$
|
20,841
|
|
Unrealized gains
|
1,273
|
|
|
Company Contributions
|
—
|
|
|
Balance at December 31, 2019
|
$
|
22,114
|
|
|
U.S. property separate account fund
|
||
Balance at January 1, 2018
|
$
|
15,502
|
|
Unrealized gains
|
1,339
|
|
|
Company Contributions
|
4,000
|
|
|
Balance at December 31, 2018
|
$
|
20,841
|
|
Weighted-average assumptions as of
|
Pension Benefits
|
|
Post-retirement Benefits
|
||||||||
December 31,
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Discount rate
|
3.32
|
%
|
|
4.18
|
%
|
|
3.32
|
%
|
|
4.18
|
%
|
Rate of compensation increase
|
3.00
|
|
|
3.00
|
|
|
N/A
|
|
|
N/A
|
|
Weighted-average assumptions as of
|
Pension Benefits
|
|
Post-retirement Benefits
|
||||||||||||||
January 1,
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||
Discount rate
|
4.18
|
%
|
|
3.65
|
%
|
|
4.17
|
%
|
|
4.18
|
%
|
|
3.65
|
%
|
|
4.17
|
%
|
Expected long-term rate of return on plan assets
|
6.70
|
|
|
6.70
|
|
|
7.50
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Rate of compensation increase
|
3.00
|
|
|
3.00
|
|
|
3.00
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Health Care Benefits
|
|
Dental Claims
|
||||||||
Years Ended December 31,
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Health care cost trend rates assumed for next year
|
6.75
|
%
|
|
6.75
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
Rate to which the health care trend rate is assumed to decline (ultimate trend rate)
|
4.50
|
%
|
|
4.50
|
%
|
|
N/A
|
|
|
N/A
|
|
Year that the rate reaches the ultimate trend rate
|
2030
|
|
|
2029
|
|
|
N/A
|
|
|
N/A
|
|
|
|
1% Increase
|
|
1% Decrease
|
||||
Effect on the net periodic post-retirement health care benefit cost
|
|
$
|
657
|
|
|
$
|
(508
|
)
|
Effect on the accumulated post-retirement benefit obligation
|
|
5,293
|
|
|
(4,281
|
)
|
|
Pension Benefits
|
|
Post-retirement Benefits
|
||||||||||||
Years Ended December 31,
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Reconciliation of benefit obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
202,156
|
|
|
$
|
208,349
|
|
|
$
|
30,973
|
|
|
$
|
55,728
|
|
Service cost
|
7,989
|
|
|
8,701
|
|
|
1,823
|
|
|
2,998
|
|
||||
Interest cost
|
8,320
|
|
|
7,500
|
|
|
1,274
|
|
|
2,009
|
|
||||
Actuarial loss (gain)
|
39,598
|
|
|
(17,535
|
)
|
|
(1,806
|
)
|
|
(12,094
|
)
|
||||
Adjustment for plan amendment
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,159
|
)
|
||||
Benefit payments
|
(5,689
|
)
|
|
(4,859
|
)
|
|
(1,263
|
)
|
|
(1,509
|
)
|
||||
Benefit obligation at end of year (1)
|
$
|
252,374
|
|
|
$
|
202,156
|
|
|
$
|
31,001
|
|
|
$
|
30,973
|
|
Reconciliation of fair value of plan assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
164,819
|
|
|
$
|
157,644
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
36,336
|
|
|
(4,366
|
)
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
4,000
|
|
|
16,400
|
|
|
1,263
|
|
|
1,509
|
|
||||
Benefit payments
|
(5,689
|
)
|
|
(4,859
|
)
|
|
(1,263
|
)
|
|
(1,509
|
)
|
||||
Fair value of plan assets at end of year
|
$
|
199,466
|
|
|
$
|
164,819
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded status at end of year
|
$
|
(52,908
|
)
|
|
$
|
(37,337
|
)
|
|
$
|
(31,001
|
)
|
|
$
|
(30,973
|
)
|
(1)
|
For the pension plan, the benefit obligation is the projected benefit obligation. For the post-retirement benefit plan, the benefit obligation is the accumulated post-retirement benefit obligation.
|
|
|
Pension Benefits
|
|
Post-retirement Benefits
|
||||||||||||
Years Ended December 31
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Amounts recognized in AOCI
|
|
|
|
|
|
|
|
|
||||||||
Unrecognized prior service cost
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(28,947
|
)
|
|
$
|
(37,631
|
)
|
Unrecognized actuarial (gain) loss
|
|
64,059
|
|
|
53,616
|
|
|
8,086
|
|
|
10,786
|
|
||||
Total amounts recognized in AOCI
|
|
$
|
64,059
|
|
|
$
|
53,616
|
|
|
$
|
(20,861
|
)
|
|
$
|
(26,845
|
)
|
|
Pension Plan
|
|
Post-retirement Benefit Plan
|
||||||||||||||||||||
Years Ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
7,989
|
|
|
$
|
8,701
|
|
|
$
|
6,857
|
|
|
$
|
1,823
|
|
|
$
|
2,998
|
|
|
$
|
2,021
|
|
Interest cost
|
8,320
|
|
|
7,500
|
|
|
7,060
|
|
|
1,274
|
|
|
2,009
|
|
|
1,927
|
|
||||||
Expected return on plan assets
|
(10,784
|
)
|
|
(10,502
|
)
|
|
(9,650
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,684
|
)
|
|
(5,409
|
)
|
|
(5,409
|
)
|
||||||
Amortization of net loss
|
3,603
|
|
|
4,287
|
|
|
3,562
|
|
|
894
|
|
|
2,355
|
|
|
1,846
|
|
||||||
Net periodic benefit cost
|
$
|
9,128
|
|
|
$
|
9,986
|
|
|
$
|
7,829
|
|
|
$
|
(4,693
|
)
|
|
$
|
1,953
|
|
|
$
|
385
|
|
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 - 2029
|
||||||||||||
Pension benefits
|
|
$
|
6,680
|
|
|
$
|
7,220
|
|
|
$
|
7,760
|
|
|
$
|
8,340
|
|
|
$
|
9,020
|
|
|
$
|
57,210
|
|
Post-retirement benefits
|
|
$
|
940
|
|
|
$
|
1,000
|
|
|
$
|
1,050
|
|
|
$
|
1,090
|
|
|
$
|
1,150
|
|
|
$
|
6,980
|
|
Authorized Shares Available for Future Award Grants
|
Year Ended December 31, 2019
|
|
From Inception to December 31, 2019
|
||
Beginning balance
|
890,857
|
|
|
1,900,000
|
|
Additional shares authorized
|
—
|
|
|
1,500,000
|
|
Number of awards granted
|
(93,354
|
)
|
|
(3,116,421
|
)
|
Number of awards forfeited or expired
|
37,407
|
|
|
551,331
|
|
Ending balance
|
834,910
|
|
|
834,910
|
|
Number of option awards exercised
|
118,575
|
|
|
1,443,189
|
|
Number of unrestricted stock awards granted
|
720
|
|
|
10,090
|
|
Number of restricted stock awards vested
|
42,585
|
|
|
100,778
|
|
Authorized Shares Available for Future Award Grants
|
Year Ended December 31, 2019
|
|
From Inception to December 31, 2019
|
||
Beginning balance
|
49,163
|
|
|
300,000
|
|
Number of awards granted
|
(14,300
|
)
|
|
(289,140
|
)
|
Number of awards forfeited or expired
|
—
|
|
|
24,003
|
|
Ending balance
|
34,863
|
|
|
34,863
|
|
Number of option awards exercised
|
1,131
|
|
|
119,092
|
|
Number of restricted stock awards vested
|
12,650
|
|
|
84,191
|
|
2020
|
|
3,334
|
|
|
2021
|
|
1,513
|
|
|
2022
|
|
161
|
|
|
2023
|
|
—
|
|
|
Total
|
|
$
|
5,008
|
|
Options
|
Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Life (in years)
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding at January 1, 2019
|
897,903
|
|
|
$
|
33.24
|
|
|
|
|
|
||
Granted
|
61,216
|
|
|
54.26
|
|
|
|
|
|
|||
Exercised
|
(119,706
|
)
|
|
28.83
|
|
|
|
|
|
|||
Forfeited
|
(8,699
|
)
|
|
37.97
|
|
|
|
|
|
|||
Expired
|
(1,000
|
)
|
|
18.14
|
|
|
|
|
|
|||
Outstanding at December 31, 2019
|
829,714
|
|
|
$
|
35.39
|
|
|
5.62
|
|
$
|
7,666
|
|
Exercisable at December 31, 2019
|
537,127
|
|
|
$
|
31.53
|
|
|
4.76
|
|
$
|
6,586
|
|
December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Risk-free interest rate
|
2.57
|
%
|
|
2.79
|
%
|
|
2.23
|
%
|
|||
Expected volatility
|
26.40
|
%
|
|
21.79
|
%
|
|
27.58
|
%
|
|||
Expected option life (in years)
|
7
|
|
|
7
|
|
|
7
|
|
|||
Expected dividends (in dollars)
|
$
|
1.24
|
|
|
$
|
1.12
|
|
|
$
|
1.00
|
|
Weighted-average grant-date fair value of options granted during the year (in dollars)
|
$
|
12.97
|
|
|
$
|
8.90
|
|
|
$
|
9.93
|
|
|
|
|
Options Outstanding
|
Options Exercisable
|
|||||||||||
Range of Exercise Prices
|
Number Outstanding (in shares)
|
Weighted-Average Remaining Contractual Life (in years)
|
Weighted-Average Exercise Price
|
Number Exercisable (in shares)
|
Weighted-Average Exercise Price
|
||||||||||
$
|
15.01
|
|
-
|
21.00
|
45,598
|
|
1.29
|
$
|
20.56
|
|
45,598
|
|
$
|
20.56
|
|
21.01
|
|
-
|
28.00
|
69,762
|
|
2.47
|
23.19
|
|
69,762
|
|
23.19
|
|
|||
28.01
|
|
-
|
35.00
|
303,495
|
|
4.72
|
29.28
|
|
255,678
|
|
29.31
|
|
|||
35.01
|
|
-
|
43.00
|
269,790
|
|
6.65
|
40.80
|
|
139,944
|
|
40.80
|
|
|||
44.80
|
|
-
|
44.80
|
77,172
|
|
8.15
|
44.80
|
|
25,252
|
|
44.80
|
|
|||
44.81
|
|
-
|
54.26
|
63,897
|
|
9.10
|
54.17
|
|
893
|
|
$
|
52.16
|
|
||
$
|
15.01
|
|
-
|
54.26
|
829,714
|
|
5.62
|
$
|
35.39
|
|
537,127
|
|
$
|
31.53
|
|
|
|
|
|
|
|
||||||
Years Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Continuing Operations - Property and casualty insurance business
|
|
|
|
|
|
||||||
Net premiums earned
|
|
|
|
|
|
||||||
Other liability
|
$
|
318,412
|
|
|
$
|
311,931
|
|
|
$
|
306,480
|
|
Fire and allied lines
|
285,205
|
|
|
276,193
|
|
|
270,716
|
|
|||
Automobile
|
345,637
|
|
|
313,521
|
|
|
277,511
|
|
|||
Workers' compensation
|
87,376
|
|
|
95,203
|
|
|
104,166
|
|
|||
Fidelity and surety
|
25,539
|
|
|
24,437
|
|
|
24,981
|
|
|||
Reinsurance assumed
|
21,861
|
|
|
13,228
|
|
|
10,650
|
|
|||
Other
|
2,942
|
|
|
2,938
|
|
|
2,988
|
|
|||
Total net premiums earned from continuing operations
|
$
|
1,086,972
|
|
|
$
|
1,037,451
|
|
|
$
|
997,492
|
|
Discontinued Operations - Life insurance business
|
|
|
|
|
|
||||||
Net premiums earned
|
|
|
|
|
|
||||||
Ordinary life (excluding universal life)
|
$
|
—
|
|
|
$
|
7,068
|
|
|
$
|
35,388
|
|
Universal life policy fees
|
—
|
|
|
3,363
|
|
|
13,145
|
|
|||
Immediate annuities with life contingencies
|
—
|
|
|
2,515
|
|
|
11,691
|
|
|||
Accident and health
|
—
|
|
|
45
|
|
|
1,096
|
|
|||
Other
|
—
|
|
|
12
|
|
|
48
|
|
|||
Total net premiums earned from discontinued operations
|
$
|
—
|
|
|
$
|
13,003
|
|
|
$
|
61,368
|
|
(In Thousands Except Share Data)
|
|
|
|
|
|
|
|
|
|
||||||||||
Quarters
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Total
|
||||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
305,539
|
|
|
$
|
304,197
|
|
|
$
|
298,055
|
|
|
$
|
293,374
|
|
|
$
|
1,201,165
|
|
Income (loss) before income taxes
|
54,677
|
|
|
(4,571
|
)
|
|
(4,528
|
)
|
|
(28,699
|
)
|
|
16,879
|
|
|||||
Net income (loss)
|
$
|
44,521
|
|
|
$
|
(4,196
|
)
|
|
$
|
(2,342
|
)
|
|
$
|
(23,163
|
)
|
|
$
|
14,820
|
|
Basic earnings (loss) per share (1)
|
$
|
1.77
|
|
|
$
|
(0.17
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.93
|
)
|
|
$
|
0.59
|
|
Diluted earnings (loss) per share (1)
|
1.74
|
|
|
(0.17
|
)
|
|
(0.09
|
)
|
|
(0.93
|
)
|
|
0.58
|
|
|||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
250,795
|
|
|
$
|
275,399
|
|
|
$
|
291,910
|
|
|
$
|
252,062
|
|
|
$
|
1,070,166
|
|
Income (loss) before income taxes
|
21,573
|
|
|
(1,809
|
)
|
|
12,598
|
|
|
(41,512
|
)
|
|
(9,150
|
)
|
|||||
Net income (loss)
|
$
|
20,364
|
|
|
$
|
157
|
|
|
$
|
11,070
|
|
|
$
|
(29,336
|
)
|
|
$
|
2,255
|
|
Basic earnings (loss) per share (1)
|
$
|
0.82
|
|
|
$
|
0.01
|
|
|
$
|
0.44
|
|
|
$
|
(1.17
|
)
|
|
$
|
0.09
|
|
Diluted earnings (loss) per share (1)
|
0.80
|
|
|
0.01
|
|
|
0.43
|
|
|
(1.17
|
)
|
|
0.09
|
|
(1)
|
The sum of the quarterly reported amounts may not equal the full year, as each is computed independently.
|
(1)
|
The sum of the quarterly reported amounts may not equal the full year, as each is computed independently.
|
|
Years Ended December 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
(In Thousands Except Share and Per Share Data)
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||||||
Net income from continuing operations
|
$
|
14,820
|
|
|
$
|
14,820
|
|
|
$
|
2,255
|
|
|
$
|
2,255
|
|
|
$
|
44,870
|
|
|
$
|
44,870
|
|
Weighted-average common shares outstanding
|
25,138,039
|
|
|
25,138,039
|
|
|
25,006,211
|
|
|
25,006,211
|
|
|
25,103,720
|
|
|
25,103,720
|
|
||||||
Add dilutive effect of restricted stock awards
|
—
|
|
|
232,450
|
|
|
—
|
|
|
273,544
|
|
|
—
|
|
|
250,530
|
|
||||||
Add dilutive effect of stock options
|
—
|
|
|
212,038
|
|
|
—
|
|
|
343,057
|
|
|
—
|
|
|
286,354
|
|
||||||
Weighted-average common shares
|
25,138,039
|
|
|
25,582,527
|
|
|
25,006,211
|
|
|
25,622,812
|
|
|
25,103,720
|
|
|
25,640,604
|
|
||||||
Earnings per common share from continuing operations
|
$
|
0.59
|
|
|
$
|
0.58
|
|
|
$
|
0.09
|
|
|
$
|
0.09
|
|
|
$
|
1.79
|
|
|
$
|
1.75
|
|
Earnings (loss) per common share from discontinued operations
|
—
|
|
|
—
|
|
|
(0.08
|
)
|
|
(0.07
|
)
|
|
0.24
|
|
|
0.24
|
|
||||||
Gain on sale of discontinued operations, net of taxes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.10
|
|
|
$
|
1.07
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Earnings per common share
|
$
|
0.59
|
|
|
$
|
0.58
|
|
|
$
|
1.11
|
|
|
$
|
1.08
|
|
|
$
|
2.03
|
|
|
$
|
1.99
|
|
Awards excluded from diluted calculation(1)
|
—
|
|
|
63,897
|
|
|
—
|
|
|
2,681
|
|
|
—
|
|
|
—
|
|
(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.
|
|
|
As of December 31, 2019
|
||
|
|
|
||
Components of lease expense:
|
|
|
||
Operating lease expense
|
|
$
|
7,655
|
|
Less sublease income
|
|
493
|
|
|
Net lease expense
|
|
7,162
|
|
|
Cash flows information related to leases:
|
|
|
||
Operating cash outflow from operating leases
|
|
7,249
|
|
Balance sheet information for operating leases:
|
|
As of December 31, 2019
|
||
|
|
|
||
Operating lease right-of-use assets (Other assets on Consolidated Balance Sheets)
|
|
$
|
15,410
|
|
Operating lease liabilities (Accrued expenses and other liabilities on Consolidated Balance Sheets)
|
|
15,851
|
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
|
651
|
|
|
Weighted average remaining lease term
|
|
2.75 years
|
|
|
Weighted average discount rate
|
|
4.74
|
%
|
Maturities of lease liabilities:
|
|
As of December 31, 2019
|
||
2020
|
|
$
|
7,517
|
|
2021
|
|
5,311
|
|
|
2022
|
|
2,417
|
|
|
2023
|
|
1,318
|
|
|
2024
|
|
259
|
|
|
Thereafter
|
|
39
|
|
|
Total lease payments
|
|
16,861
|
|
|
Less imputed interest
|
|
(1,010
|
)
|
|
Lease liability
|
|
$
|
15,851
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Agency relationships
|
$
|
10,338
|
|
|
$
|
10,338
|
|
Accumulated amortization - agency relationships
|
(6,731
|
)
|
|
(6,153
|
)
|
||
|
$
|
3,607
|
|
|
$
|
4,185
|
|
|
|
|
|
||||
Software
|
$
|
3,260
|
|
|
$
|
3,260
|
|
Accumulated amortization - software
|
(3,260
|
)
|
|
(3,260
|
)
|
||
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Trade names
|
$
|
1,978
|
|
|
$
|
1,978
|
|
Accumulated amortization - trade names
|
(1,154
|
)
|
|
(1,022
|
)
|
||
|
$
|
824
|
|
|
$
|
956
|
|
|
|
|
|
||||
Favorable contract
|
$
|
286
|
|
|
$
|
286
|
|
Accumulated amortization - favorable contract
|
(286
|
)
|
|
(286
|
)
|
||
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
State insurance licenses (1)
|
$
|
3,020
|
|
|
$
|
3,020
|
|
|
|
|
|
||||
Net intangible assets
|
$
|
7,451
|
|
|
$
|
8,161
|
|
|
Useful Life
|
Agency relationships
|
Fifteen years
|
Software
|
Two years
|
Trade names
|
Fifteen years
|
Favorable contract
|
Two years
|
2020
|
$
|
709
|
|
2021
|
709
|
|
|
2022
|
709
|
|
|
2023
|
709
|
|
|
2024
|
709
|
|
|
|
|
Liability for
|
|
|
||||||
|
Net unrealized
|
|
underfunded
|
|
|
||||||
|
appreciation
|
|
employee
|
|
|
||||||
|
on investments
|
|
benefit costs
|
|
Total
|
||||||
Balance as of January 1, 2017
|
$
|
133,892
|
|
|
$
|
(24,837
|
)
|
|
$
|
109,055
|
|
Change in accumulated other comprehensive income before reclassifications
|
48,467
|
|
|
(19,878
|
)
|
|
28,589
|
|
|||
Reclassification adjustments from accumulated other comprehensive income
|
(4,152
|
)
|
|
3,514
|
|
|
(638
|
)
|
|||
Accumulated effect of change in enacted tax rate
|
36,658
|
|
|
(5,350
|
)
|
|
31,308
|
|
|||
Balance as of December 31, 2017
|
$
|
214,865
|
|
|
$
|
(46,551
|
)
|
|
$
|
168,314
|
|
Cumulative effect of change in accounting principle
|
(191,244
|
)
|
|
—
|
|
|
(191,244
|
)
|
|||
Change in accumulated other comprehensive income before reclassifications
|
(33,564
|
)
|
|
20,155
|
|
|
(13,409
|
)
|
|||
Reclassification adjustments from accumulated other comprehensive income
|
620
|
|
|
5,247
|
|
|
5,867
|
|
|||
Balance as of December 31, 2018
|
$
|
(9,323
|
)
|
|
$
|
(21,149
|
)
|
|
$
|
(30,472
|
)
|
Change in accumulated other comprehensive income before reclassifications
|
55,399
|
|
|
(16,530
|
)
|
|
38,869
|
|
|||
Reclassification adjustments from accumulated other comprehensive income
|
1,203
|
|
|
3,552
|
|
|
4,755
|
|
|||
Balance as of December 31, 2019
|
$
|
47,279
|
|
|
$
|
(34,127
|
)
|
|
$
|
13,152
|
|
Discontinued Operations
|
|||||||||||
Statements of Income
|
|||||||||||
|
For the Years Ended December 31,
|
||||||||||
(In Thousands, Except Share Data)
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Revenues
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
—
|
|
|
$
|
13,003
|
|
|
$
|
61,368
|
|
Investment income, net of investment expenses
|
—
|
|
|
12,663
|
|
|
49,720
|
|
|||
Total net realized investment gains (losses)
|
—
|
|
|
(1,057
|
)
|
|
4,008
|
|
|||
Other income
|
—
|
|
|
146
|
|
|
617
|
|
|||
Total revenues
|
$
|
—
|
|
|
$
|
24,755
|
|
|
$
|
115,713
|
|
|
|
|
|
|
|
||||||
Benefits, Losses and Expenses
|
|
|
|
|
|
||||||
Losses and loss settlement expenses
|
$
|
—
|
|
|
$
|
10,823
|
|
|
$
|
40,451
|
|
Increase in liability for future policy benefits
|
—
|
|
|
5,023
|
|
|
27,632
|
|
|||
Amortization of deferred policy acquisition costs
|
—
|
|
|
1,895
|
|
|
5,181
|
|
|||
Other underwriting expenses
|
—
|
|
|
3,864
|
|
|
13,281
|
|
|||
Interest on policyholders’ accounts
|
—
|
|
|
4,499
|
|
|
18,525
|
|
|||
Total benefits, losses and expenses
|
$
|
—
|
|
|
$
|
26,104
|
|
|
$
|
105,070
|
|
|
|
|
|
|
|
||||||
Income (loss) from discontinued operations before income taxes
|
$
|
—
|
|
|
$
|
(1,349
|
)
|
|
$
|
10,643
|
|
Federal income tax expense
|
—
|
|
|
563
|
|
|
4,490
|
|
|||
Net income (loss) from discontinued operations
|
$
|
—
|
|
|
$
|
(1,912
|
)
|
|
$
|
6,153
|
|
Earnings (loss) per common share from discontinued operations:
|
|
|
|
|
|
||||||
Basic
|
$
|
—
|
|
|
$
|
(0.08
|
)
|
|
$
|
0.24
|
|
Diluted
|
—
|
|
|
(0.07
|
)
|
|
0.24
|
|
|
|
Valuation of reserves for property and casualty loss and loss settlement expenses
|
Description of the Matter
|
|
At December 31, 2019, the Company’s reserves for losses and loss settlement expenses was $1.4 billion, of which $230.9 million related to Incurred But Not Reported (IBNR) reserves. As described in Note 5 to the consolidated financial statements, liabilities for losses and loss settlement expenses reflect management's best estimates at a given point in time of what is expected to be paid for claims that have been reported and those that have been incurred but not reported, based on known facts, circumstances, and historical trends. There is significant uncertainty and subjectivity inherent in determining management’s best estimates of the ultimate cost of losses, which is used to determine IBNR reserves.
Auditing management’s estimate of IBNR reserves was complex due to the highly judgmental nature of management’s selection of methods and assumptions used to develop those estimates. In particular, the estimates are sensitive to assumptions and the weighting of methodologies that are used to project the ultimate cost of losses.
|
How We Addressed the Matter in Our Audit
|
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the reserving process, including, among others, the review and approval processes that management has in place for the methods and assumptions used in estimating the reserves and the reasonableness of the actuarially determined reserves.
To test the estimated IBNR reserves we, including our actuarial specialists, performed audit procedures that included, among others, evaluating management’s selection and weighting of actuarial methods and assumptions by comparing to those used in prior periods and those used in the industry. We compared management’s best estimate of reserves to our independently calculated range of reasonable reserve estimates and assessed the development of prior year reserves. We also evaluated the results of the reserve analysis prepared by management’s independent third-party actuary for comparison to management’s best estimate.
|
|
/s/ Ernst & Young LLP
|
|
||
|
Ernst & Young LLP
|
|
|
/s/ Ernst & Young LLP
|
|
|
Ernst & Young LLP
|
|
|
|
|
Des Moines, Iowa
|
|
|
February 28, 2020
|
|
|
|
Page
|
|
|
|
|
|
|
All other schedules have been omitted as not required, not applicable, not deemed material or because the information is included in the Consolidated Financial Statements.
|
|
|
|
|
|
Incorporated by reference
|
||||||||
Exhibit number
|
Exhibit description
|
Filed herewith
|
|
Form
|
|
Period ended
|
|
Exhibit
|
|
Filing date
|
|||
2.1†
|
|
|
|
|
8-K
|
|
|
|
2.1
|
|
|
9/19/2017
|
|
3.1
|
|
|
|
|
S-4
|
|
|
|
Annex II
|
|
|
5/25/2011
|
|
3.2
|
|
|
|
|
8-K/A
|
|
|
|
3.1
|
|
|
5/26/2015
|
|
3.3
|
|
|
|
|
S-4
|
|
|
|
Annex III
|
|
|
5/25/2011
|
|
4.1
|
|
|
X
|
|
|
|
|
|
|
|
|
||
10.1
|
|
*
|
|
|
10-K
|
|
12/31/2007
|
|
10.2
|
|
|
2/27/2008
|
|
10.2
|
|
*
|
|
|
DEF14A
|
|
|
|
Exhibit A
|
|
|
4/18/2011
|
|
10.3
|
|
*
|
|
|
10-K
|
|
12/31/2011
|
|
10.4
|
|
|
3/15/2012
|
|
10.4
|
|
*
|
|
|
10-Q
|
|
9/30/2007
|
|
10.3
|
|
|
10/25/2007
|
|
10.5
|
|
*
|
|
|
DEF14A
|
|
|
|
App A
|
|
|
4/8/2014
|
|
10.6
|
|
*
|
|
|
10-K
|
|
12/31/2007
|
|
10.7
|
|
|
2/27/2008
|
|
10.7
|
|
*
|
|
|
10-K
|
|
12/31/2007
|
|
10.8
|
|
|
2/27/2008
|
|
10.8
|
|
*
|
|
|
8-K
|
|
|
|
99.2
|
|
|
5/22/2008
|
|
10.9
|
|
*
|
|
|
8-K
|
|
|
|
99.3
|
|
|
5/22/2008
|
|
10.10
|
|
*
|
|
|
8-K
|
|
|
|
99.4
|
|
|
5/22/2008
|
|
10.11
|
|
*
|
|
|
8-K/A
|
|
|
|
99.1
|
|
|
2/24/2009
|
|
10.12
|
|
*
|
|
|
10-K
|
|
12/31/2011
|
|
10.14
|
|
|
3/15/2012
|
|
10.13
|
|
*
|
|
|
10-Q
|
|
6/30/2016
|
|
10.1
|
|
|
8/3/2016
|
|
10.14
|
|
*
|
|
|
10-K
|
|
12/31/2011
|
|
10.15
|
|
|
3/15/2012
|
|
|
|
|
|
Incorporated by reference
|
||||||||
Exhibit number
|
Exhibit description
|
Filed herewith
|
|
Form
|
|
Period ended
|
|
Exhibit
|
|
Filing date
|
|||
10.15
|
|
*
|
|
|
8-K
|
|
|
|
10.1
|
|
|
11/19/2012
|
|
10.16
|
|
*
|
|
|
8-K
|
|
|
|
10.1
|
|
|
5/22/2014
|
|
10.17
|
|
*
|
|
|
8-K
|
|
|
|
10.2
|
|
|
5/22/2014
|
|
10.18
|
|
*
|
|
|
8-K
|
|
|
|
10.3
|
|
|
5/22/2014
|
|
10.19
|
|
*
|
|
|
8-K
|
|
|
|
10.4
|
|
|
5/22/2014
|
|
10.20
|
|
*
|
|
|
8-K
|
|
|
|
10.5
|
|
|
5/22/2014
|
|
10.21
|
|
*
|
|
|
10-Q
|
|
6/30/14
|
|
10.7
|
|
|
8/5/2014
|
|
10.22
|
|
*
|
|
|
10-Q
|
|
6/30/14
|
|
10.8
|
|
|
8/5/2014
|
|
10.23
|
|
*
|
|
|
10-Q
|
|
3/31/17
|
|
10.1
|
|
|
5/3/2017
|
|
10.24
|
|
|
|
|
8-K
|
|
|
|
10.1
|
|
|
2/5/2016
|
|
21
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
23.1
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
23.2
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by reference
|
||||||
Exhibit number
|
Exhibit description
|
Filed herewith
|
|
Form
|
|
Period ended
|
|
Exhibit
|
|
Filing date
|
||
31.1
|
|
|
X
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
X
|
|
|
|
|
|
|
|
|
|
32.1
|
|
|
X
|
|
|
|
|
|
|
|
|
|
32.2
|
|
|
X
|
|
|
|
|
|
|
|
|
|
101.1
|
|
|
X
|
|
|
|
|
|
|
|
|
|
104.1
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019
|
(In thousands)
|
||||||||||
|
Cost or Amortized Cost
|
|
|
|
Amounts at Which Shown in Balance Sheet
|
||||||
Type of Investment
|
|
Fair Value
|
|
||||||||
Fixed maturities
|
|
|
|
|
|
||||||
Bonds
|
|
|
|
|
|
||||||
United States Government and government agencies and authorities
|
$
|
167,262
|
|
|
$
|
169,693
|
|
|
$
|
169,693
|
|
States, municipalities and political subdivisions
|
888,137
|
|
|
926,329
|
|
|
926,329
|
|
|||
Foreign governments
|
4,936
|
|
|
5,117
|
|
|
5,117
|
|
|||
Public utilities
|
60,950
|
|
|
63,651
|
|
|
63,651
|
|
|||
All other bonds
|
546,502
|
|
|
565,986
|
|
|
565,986
|
|
|||
Redeemable preferred stock
|
3,914
|
|
|
4,087
|
|
|
4,087
|
|
|||
Total fixed maturities
|
$
|
1,671,701
|
|
|
$
|
1,734,863
|
|
|
$
|
1,734,863
|
|
Equity securities
|
|
|
|
|
|
||||||
Common stocks
|
|
|
|
|
|
||||||
Public utilities
|
$
|
3,760
|
|
|
$
|
16,295
|
|
|
$
|
16,295
|
|
Banks, trusts and insurance companies
|
14,478
|
|
|
127,780
|
|
|
127,780
|
|
|||
Industrial, miscellaneous and all other
|
43,309
|
|
|
148,454
|
|
|
148,454
|
|
|||
Nonredeemable preferred stocks
|
5,982
|
|
|
6,674
|
|
|
6,674
|
|
|||
Total equity securities
|
$
|
67,529
|
|
|
$
|
299,203
|
|
|
$
|
299,203
|
|
Mortgage loans on real estate
|
$
|
42,520
|
|
|
$
|
43,992
|
|
|
$
|
42,448
|
|
Other long-term investments
|
73,292
|
|
|
78,410
|
|
|
78,410
|
|
|||
Short-term investments
|
175
|
|
|
175
|
|
|
175
|
|
|||
Total investments
|
$
|
1,855,217
|
|
|
$
|
2,156,643
|
|
|
$
|
2,155,099
|
|
|
December 31,
|
|||||
(In thousands, except share data)
|
2019
|
2018
|
||||
|
|
|
||||
Assets
|
|
|
||||
Fixed maturities
|
|
|
||||
Available-for-sale, at fair value (amortized cost $150 in 2019 and $150 in 2018)
|
$
|
150
|
|
$
|
150
|
|
Investment in subsidiary
|
880,485
|
|
877,893
|
|
||
Cash and cash equivalents
|
29,878
|
|
9,186
|
|
||
Federal income tax receivable
|
—
|
|
1,165
|
|
||
Accrued investment income
|
3
|
|
1
|
|
||
Total assets
|
$
|
910,516
|
|
$
|
888,395
|
|
|
|
|
||||
Liabilities and stockholders' equity
|
|
|
||||
Liabilities
|
$
|
44
|
|
$
|
20
|
|
|
|
|
||||
Stockholders' equity
|
|
|
||||
Common stock, $0.001 par value, authorized 75,000,000 shares; 25,015,963 and 25,097,408 issued and outstanding in 2019 and 2018, respectively
|
$
|
25
|
|
$
|
25
|
|
Additional paid-in capital
|
200,179
|
|
203,350
|
|
||
Retained earnings
|
697,116
|
|
715,472
|
|
||
Accumulated other comprehensive income, net of tax
|
13,152
|
|
(30,472
|
)
|
||
Total stockholders' equity
|
$
|
910,472
|
|
$
|
888,375
|
|
|
|
|
||||
Total liabilities and stockholders' equity
|
$
|
910,516
|
|
$
|
888,395
|
|
|
For the Years Ended December 31,
|
||||||||
(In thousands)
|
2019
|
2018
|
2017
|
||||||
|
|
|
|
||||||
Revenues
|
|
|
|
||||||
Investment income
|
$
|
295
|
|
$
|
396
|
|
$
|
133
|
|
Total revenues
|
295
|
|
396
|
|
133
|
|
|||
|
|
|
|
||||||
Expenses
|
|
|
|
||||||
Other operating expenses
|
$
|
86
|
|
$
|
95
|
|
$
|
103
|
|
Total expenses
|
86
|
|
95
|
|
103
|
|
|||
|
|
|
|
||||||
Income (loss) before income taxes and equity in net income of subsidiary
|
209
|
|
301
|
|
30
|
|
|||
Federal income tax expense (benefit)
|
44
|
|
(1,165
|
)
|
(1,060
|
)
|
|||
Net income before equity in net income of subsidiary
|
$
|
165
|
|
$
|
1,466
|
|
$
|
1,090
|
|
Equity in net income of subsidiary
|
14,655
|
|
26,184
|
|
49,933
|
|
|||
Net income
|
$
|
14,820
|
|
$
|
27,650
|
|
$
|
51,023
|
|
|
|
|
|
||||||
Other comprehensive income (loss)
|
|
|
|
||||||
Change in unrealized appreciation on investments held by subsidiary
|
$
|
70,127
|
|
$
|
(50,985
|
)
|
$
|
72,251
|
|
Change in liability for underfunded employee benefit plans of subsidiary
|
(20,924
|
)
|
25,513
|
|
(26,122
|
)
|
|||
Other comprehensive income (loss), before tax and reclassification adjustments
|
$
|
49,203
|
|
$
|
(25,472
|
)
|
$
|
46,129
|
|
Income tax effect
|
(10,334
|
)
|
5,349
|
|
(17,540
|
)
|
|||
Other comprehensive income (loss), after tax, before reclassification adjustments
|
$
|
38,869
|
|
$
|
(20,123
|
)
|
$
|
28,589
|
|
Reclassification adjustment for net realized gains of the subsidiary included in income
|
1,521
|
|
784
|
|
(6,390
|
)
|
|||
Reclassification adjustment for employee benefit costs of the subsidiary included in expense
|
4,497
|
|
6,642
|
|
5,408
|
|
|||
Total reclassification adjustments, before tax
|
$
|
6,018
|
|
$
|
7,426
|
|
$
|
(982
|
)
|
Income tax effect
|
(1,263
|
)
|
(1,559
|
)
|
344
|
|
|||
Total reclassification adjustments, after tax
|
$
|
4,755
|
|
$
|
5,867
|
|
$
|
(638
|
)
|
|
|
|
|
||||||
Comprehensive income
|
$
|
58,444
|
|
$
|
13,394
|
|
$
|
78,974
|
|
|
For the Years Ended December 31,
|
||||||||
(In thousands)
|
2019
|
2018
|
2017
|
||||||
|
|
|
|
||||||
Cash flows from operating activities
|
|
|
|
||||||
Net income
|
$
|
14,820
|
|
$
|
27,650
|
|
$
|
51,023
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
||||||
Equity in net income of subsidiary
|
(14,655
|
)
|
(26,184
|
)
|
(49,933
|
)
|
|||
Dividends received from subsidiary
|
57,000
|
|
105,000
|
|
40,000
|
|
|||
Other, net
|
5,512
|
|
1,824
|
|
1,415
|
|
|||
Total adjustments
|
$
|
47,857
|
|
$
|
80,640
|
|
$
|
(8,518
|
)
|
Net cash provided by operating activities
|
$
|
62,677
|
|
$
|
108,290
|
|
$
|
42,505
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
||||||
Proceeds from maturity of held-to-maturity investments
|
$
|
—
|
|
$
|
—
|
|
$
|
150
|
|
Purchase of held-to-maturity investments
|
—
|
|
—
|
|
(150
|
)
|
|||
Net cash used in investing activities
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
||||||
Payment of cash dividends
|
$
|
(32,662
|
)
|
$
|
(105,408
|
)
|
$
|
(27,337
|
)
|
Repurchase of common stock
|
(11,700
|
)
|
(5,404
|
)
|
(29,784
|
)
|
|||
Issuance of common stock
|
2,377
|
|
7,171
|
|
4,828
|
|
|||
Net cash used in financing activities
|
$
|
(41,985
|
)
|
$
|
(103,641
|
)
|
$
|
(52,293
|
)
|
|
|
|
|
||||||
Net change in cash and cash equivalents
|
$
|
20,692
|
|
$
|
4,649
|
|
$
|
(9,788
|
)
|
Cash and cash equivalents at beginning of period
|
9,186
|
|
4,537
|
|
14,325
|
|
|||
Cash and cash equivalents at end of year
|
$
|
29,878
|
|
$
|
9,186
|
|
$
|
4,537
|
|
(In thousands)
|
Deferred Policy Acquisition Costs
|
|
Future Policy Benefits, Losses, Claims and Loss Expenses
|
|
Unearned Premiums
|
|
Earned Premium Revenue
|
|
Investment Income, Net
|
|
Benefits, Claims, Losses and Settlement Expenses
|
|
Amortization of Deferred Policy Acquisition Costs
|
|
Other Underwriting Expenses
|
|
Interest on Policyholders' Accounts
|
|
Premiums Written (2)
|
||||||||||||||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Continuing Operations
|
$
|
94,292
|
|
|
$
|
1,421,754
|
|
|
$
|
505,162
|
|
|
$
|
1,086,972
|
|
|
$
|
60,414
|
|
|
$
|
830,172
|
|
|
$
|
216,699
|
|
|
$
|
137,415
|
|
|
$
|
—
|
|
|
$
|
1,096,730
|
|
Discontinued Operations(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Total
|
$
|
94,292
|
|
|
$
|
1,421,754
|
|
|
$
|
505,162
|
|
|
$
|
1,086,972
|
|
|
$
|
60,414
|
|
|
$
|
830,172
|
|
|
$
|
216,699
|
|
|
$
|
137,415
|
|
|
$
|
—
|
|
|
$
|
1,096,730
|
|
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Continuing Operations
|
$
|
92,796
|
|
|
$
|
1,312,483
|
|
|
$
|
492,918
|
|
|
$
|
1,037,451
|
|
|
$
|
52,894
|
|
|
$
|
731,611
|
|
|
$
|
206,232
|
|
|
$
|
141,473
|
|
|
$
|
—
|
|
|
$
|
1,061,664
|
|
Discontinued Operations(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
13,003
|
|
|
12,663
|
|
|
15,846
|
|
|
1,895
|
|
|
3,864
|
|
|
4,499
|
|
|
—
|
|
||||||||||
Total
|
$
|
92,796
|
|
|
$
|
1,312,483
|
|
|
$
|
492,918
|
|
|
$
|
1,050,454
|
|
|
$
|
65,557
|
|
|
$
|
747,457
|
|
|
$
|
208,127
|
|
|
$
|
145,337
|
|
|
$
|
4,499
|
|
|
$
|
1,061,664
|
|
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Continuing Operations
|
$
|
88,102
|
|
|
$
|
1,224,183
|
|
|
$
|
465,391
|
|
|
$
|
997,492
|
|
|
$
|
51,190
|
|
|
$
|
725,713
|
|
|
$
|
207,746
|
|
|
$
|
103,628
|
|
|
$
|
—
|
|
|
$
|
1,019,113
|
|
Discontinued Operations(1)
|
71,151
|
|
|
1,320,401
|
|
|
67
|
|
|
61,368
|
|
|
49,720
|
|
|
68,083
|
|
|
5,181
|
|
|
13,281
|
|
|
18,525
|
|
|
—
|
|
||||||||||
Total
|
$
|
159,253
|
|
|
$
|
2,544,584
|
|
|
$
|
465,458
|
|
|
$
|
1,058,860
|
|
|
$
|
100,910
|
|
|
$
|
793,796
|
|
|
$
|
212,927
|
|
|
$
|
116,909
|
|
|
$
|
18,525
|
|
|
$
|
1,019,113
|
|
(1)
|
Annuity deposits are included in future policy benefits, losses, claims and loss expenses.
|
(2)
|
Pursuant to Regulation S-X, premiums written does not apply to life insurance companies.
|
(In thousands)
|
Gross Amount
|
|
Ceded to Other Companies
|
|
Assumed From Other Companies
|
|
Net Amount
|
|
Percentage of Amount Assumed to Net Earned
|
|||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Life insurance in force
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
Premiums earned
|
|
|
|
|
|
|
|
|
|
|||||||||
Continuing Operations - Property and casualty insurance
|
$
|
1,133,583
|
|
|
$
|
72,023
|
|
|
$
|
25,412
|
|
|
$
|
1,086,972
|
|
|
2.34
|
%
|
Discontinued Operations - Life, accident and health insurance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Total
|
$
|
1,133,583
|
|
|
$
|
72,023
|
|
|
$
|
25,412
|
|
|
$
|
1,086,972
|
|
|
2.34
|
%
|
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||||||||
Life insurance in force
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
Premiums earned
|
|
|
|
|
|
|
|
|
|
|||||||||
Continuing Operations - Property and casualty insurance
|
$
|
1,083,981
|
|
|
$
|
63,487
|
|
|
$
|
16,957
|
|
|
$
|
1,037,451
|
|
|
1.63
|
%
|
Discontinued Operations - Life, accident and health insurance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Total
|
$
|
1,083,981
|
|
|
$
|
63,487
|
|
|
$
|
16,957
|
|
|
$
|
1,037,451
|
|
|
1.63
|
%
|
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||||||||
Life insurance in force
|
$
|
5,309,508
|
|
|
$
|
1,014,794
|
|
|
$
|
—
|
|
|
$
|
4,294,714
|
|
|
|
|
Premiums earned
|
|
|
|
|
|
|
|
|
|
|||||||||
Continuing Operations - Property and casualty insurance
|
$
|
1,043,738
|
|
|
$
|
61,305
|
|
|
$
|
15,059
|
|
|
$
|
997,492
|
|
|
1.51
|
%
|
Discontinued Operations - Life, accident and health insurance
|
64,090
|
|
|
2,722
|
|
|
—
|
|
|
61,368
|
|
|
—
|
%
|
||||
Total
|
$
|
1,107,828
|
|
|
$
|
64,027
|
|
|
$
|
15,059
|
|
|
$
|
1,058,860
|
|
|
1.42
|
%
|
(In thousands)
|
Balance at beginning of period
|
|
Charged to costs and expenses
|
|
Deductions
|
|
Balance at end of period
|
||||||||
Description
|
|
|
|
||||||||||||
Allowance for bad debts
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2019
|
$
|
785
|
|
|
$
|
454
|
|
|
$
|
—
|
|
|
$
|
1,239
|
|
Year Ended December 31, 2018
|
1,255
|
|
|
—
|
|
|
470
|
|
|
785
|
|
||||
Year Ended December 31, 2017
|
1,255
|
|
|
—
|
|
|
—
|
|
|
1,255
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Deferred tax asset valuation allowance (1)
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Year Ended December 31, 2018
|
329
|
|
|
—
|
|
|
329
|
|
|
—
|
|
||||
Year Ended December 31, 2017
|
718
|
|
|
—
|
|
|
389
|
|
|
329
|
|
(1)
|
Recorded in connection with the purchase of American Indemnity Financial Corporation in 1999.
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Affiliation with Registrant: United Fire & Casualty Company and consolidated property and casualty subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
Claims and Claim Adjustment Expenses Incurred Related to:
|
|
Amortization of Deferred Policy Acquisition Costs
|
|
|
|
|
||||||||||||||||||||||||
|
|
Reserves for Unpaid Claims and Claim Adjustment Expenses
|
|
|
|
|
|
Net Realized Investment Gains (Losses)
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Deferred Policy Acquisition Costs
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
Paid Claims and Claim Adjustment Expenses
|
|
|
|||||||||||||||||||||||||||||
|
|
Unearned Premiums
|
|
Earned Premiums
|
|
|
|
Current Year
|
|
Prior Years
|
|
|
|
Premiums Written
|
|||||||||||||||||||||||||||||
2019
|
$
|
94,292
|
|
|
$
|
1,421,754
|
|
|
$
|
505,162
|
|
|
$
|
1,086,972
|
|
|
$
|
53,779
|
|
|
$
|
60,414
|
|
|
$
|
835,507
|
|
|
$
|
(5,335
|
)
|
|
$
|
216,699
|
|
|
$
|
732,343
|
|
|
$
|
1,096,730
|
|
2018
|
$
|
92,796
|
|
|
$
|
1,312,483
|
|
|
$
|
492,928
|
|
|
$
|
1,037,451
|
|
|
$
|
(20,179
|
)
|
|
$
|
52,894
|
|
|
$
|
785,778
|
|
|
$
|
(54,167
|
)
|
|
$
|
206,232
|
|
|
$
|
640,534
|
|
|
$
|
1,061,664
|
|
2017
|
$
|
88,102
|
|
|
$
|
1,124,183
|
|
|
$
|
465,391
|
|
|
$
|
997,492
|
|
|
$
|
4,055
|
|
|
$
|
51,190
|
|
|
$
|
779,966
|
|
|
$
|
(54,253
|
)
|
|
$
|
207,746
|
|
|
$
|
625,503
|
|
|
$
|
1,019,113
|
|
By:
|
/s/ Randy A. Ramlo
|
|
Randy A. Ramlo, Chief Executive Officer, Director and Principal Executive Officer
|
|
|
Date:
|
2/28/2020
|
|
|
By:
|
/s/ Dawn M. Jaffray
|
|
Dawn M. Jaffray, Executive Vice President, Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer
|
|
|
Date:
|
2/28/2020
|
By
|
/s/ Jack B. Evans
|
|
By
|
/s/ John Paul E. Besong
|
|
Jack B. Evans, Chairman and Director
|
|
|
John Paul E. Besong, Director
|
Date
|
2/28/2020
|
|
Date
|
2/28/2020
|
|
|
|
|
|
By
|
/s/ Scott L. Carlton
|
|
By:
|
/s/ Brenda K. Clancy
|
|
Scott L. Carlton, Director
|
|
|
Brenda K. Clancy, Director
|
Date
|
2/28/2020
|
|
Date
|
2/28/2020
|
|
|
|
|
|
By
|
/s/ Christopher R. Drahozal
|
|
By
|
/s/ Dawn M. Jaffray
|
|
Christopher R. Drahozal, Director
|
|
|
Dawn M. Jaffray, Executive Vice President, Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer
|
Date
|
2/28/2020
|
|
Date
|
2/28/2020
|
|
|
|
|
|
By
|
/s/ George D. Milligan
|
|
By
|
/s/ James W. Noyce
|
|
George D. Milligan, Director
|
|
|
James W. Noyce, Vice Chairman and Director
|
Date
|
2/28/2020
|
|
Date
|
2/28/2020
|
|
|
|
|
|
By
|
/s/ Mary K. Quass
|
|
By
|
/s/ Randy A. Ramlo
|
|
Mary K. Quass, Director
|
|
|
Randy A. Ramlo, Chief Executive Officer, Director and Principal Executive Officer
|
Date
|
2/28/2020
|
|
Date
|
2/28/2020
|
|
|
|
|
|
By
|
/s/ Kyle D. Skogman
|
|
By
|
/s/ Susan E. Voss
|
|
Kyle D. Skogman, Director
|
|
|
Susan E. Voss, Director
|
Date
|
2/28/2020
|
|
Date
|
2/28/2020
|
•
|
the authority of the Board of Directors to issue up to 10,000,000 shares of undesignated preferred stock and to determine the rights, preferences and privileges of these shares, without shareholder approval;
|
•
|
a classified Board of Directors having three classes of directors, with the terms of the members of a different class of directors expiring each year and directors for that class being elected to three-year terms;
|
•
|
requiring the affirmative vote of holders of at least sixty percent (60%) of the outstanding shares of voting stock to approve any plan of merger, consolidation, or sale or exchange of all or substantially all of the assets of the Company;
|
•
|
requiring the affirmative vote of holders of at least sixty percent (60%) of the outstanding shares of voting stock to amend the Articles of Incorporation; and
|
•
|
permitting a holder or group of holders of UFG common stock who own not less than one-fifth (1/5) but less than a majority of the outstanding shares of common stock to nominate and elect that number of directors, ignoring fractions, which bears the same ratio to the number of directors to be elected as the number of shares of common stock held by such shareholders bears to the total shares of common stock outstanding, but the total number of directors so elected by minority stockholders may not exceed one less than a majority of the aggregate number of directors to be elected.
|
Subsidiary
|
|
Jurisdiction of
Organization
|
|
% of Ownership by United Fire Group, Inc. or one of its Subsidiaries
|
United Fire & Casualty Company
|
|
Iowa
|
|
100% owned by United Fire Group, Inc.
|
Addison Insurance Company
|
|
Iowa
|
|
100% owned by United Fire & Casualty Company
|
UFG Specialty Insurance Company
|
|
Iowa
|
|
100% owned by United Fire & Casualty Company
|
Lafayette Insurance Company
|
|
Louisiana
|
|
100% owned by United Fire & Casualty Company
|
Financial Pacific Insurance Company
|
|
California
|
|
100% owned by United Fire & Casualty Company
|
Mercer Insurance Company
|
|
Pennsylvania
|
|
100% owned by United Fire & Casualty Company
|
Franklin Insurance Company
|
|
Pennsylvania
|
|
100% owned by Mercer Insurance Company
|
Mercer Insurance Company of New Jersey, Inc.
|
|
New Jersey
|
|
100% owned by Mercer Insurance Company
|
United Fire & Indemnity Company
|
|
Texas
|
|
100% owned by United Fire & Casualty Company
|
United Fire Lloyds
|
|
Texas
|
|
Operationally and financially controlled by United Fire & Indemnity Company, its Corporate Attorney-in-Fact
|
United Real Estate Holdings, LLC
|
|
Iowa
|
|
Single-member LLC 100% owned by United Fire & Casualty Company
|
/s/ Ernst & Young LLP
|
Ernst & Young LLP
|
February 28, 2020
|
|
/s/ Steven J. Regnier
|
|
|
Regnier Consulting Group, Inc.
|
|
|
Steven J. Regnier, President
|
1.
|
I have reviewed this annual report on Form 10-K 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 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 GAAP;
|
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.
|
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:
|
February 28, 2020
|
|
|
|
|
|
|
/s/ Randy A. Ramlo
|
|
|
Randy A. Ramlo
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K 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 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 GAAP;
|
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.
|
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:
|
February 28, 2020
|
|
|
|
|
|
|
/s/ Dawn M. Jaffray
|
|
|
Dawn M. Jaffray
|
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of 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 result of operations of the Company.
|
Date:
|
February 28, 2020
|
|
|
|
|
|
|
/s/ Randy A. Ramlo
|
|
|
Randy A. Ramlo
|
|
|
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of 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 result of operations of the Company.
|
Date:
|
February 28, 2020
|
|
|
|
|
|
|
/s/ Dawn M. Jaffray
|
|
|
Dawn M. Jaffray
|
|
|
Chief Financial Officer
|