Nevada
|
|
04-3850065
|
(State or other jurisdiction
of incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
|
10375 Professional Circle
|
||
Reno,
|
Nevada
|
89521
|
(Address of principal executive offices and zip code)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value per share
|
|
EIG
|
|
New York Stock Exchange
|
Large Accelerated Filer
|
R
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
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Page
No.
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Item 1
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Item 1A
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Item 1B
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Item 2
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Item 3
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Item 4
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Item 5
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Item 6
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Item 7
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Item 7A
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Item 8
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Item 9
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Item 9A
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Item 9B
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Item 10
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Item 11
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Item 12
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Item 13
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Item 14
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Item 15
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Item 16
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•
|
were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
|
•
|
may have been qualified in such agreement by disclosures that were made to the other party in connection with the negotiation of the applicable agreement;
|
•
|
may apply contract standards of "materiality" that are different from "materiality" under the applicable securities laws; and
|
•
|
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
Net premiums written
|
|
$
|
691.5
|
|
|
$
|
742.8
|
|
|
$
|
723.7
|
|
Total revenues
|
|
835.9
|
|
|
800.4
|
|
|
801.4
|
|
|||
Net income
|
|
157.1
|
|
|
141.3
|
|
|
101.2
|
|
|
State of Domicile
|
Employers Insurance Company of Nevada (EICN)
|
Nevada
|
Employers Compensation Insurance Company (ECIC)
|
California
|
Employers Preferred Insurance Company (EPIC)
|
Florida
|
Employers Assurance Company (EAC)
|
Florida
|
Cerity Insurance Company (CIC)
|
New York
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
Gross premiums earned
|
|
$
|
701.2
|
|
|
$
|
737.2
|
|
|
$
|
722.5
|
|
Less: Final audit and retroactive adjustments
|
|
27.1
|
|
|
61.1
|
|
|
85.5
|
|
|||
Less: Involuntary premium
|
|
9.5
|
|
|
9.9
|
|
|
10.2
|
|
|||
In-force premium
|
|
$
|
664.6
|
|
|
$
|
666.2
|
|
|
$
|
626.9
|
|
Hazard
Group
|
|
2019
|
|
Percentage
of 2019 Total |
|
2018
|
|
Percentage
of 2018 Total |
|
2017
|
|
Percentage
of 2017 Total |
|||||||||
|
|
(in millions, except percentages)
|
|||||||||||||||||||
A
|
|
$
|
185.4
|
|
|
27.9
|
%
|
|
$
|
189.5
|
|
|
28.4
|
%
|
|
$
|
176.9
|
|
|
28.2
|
%
|
B
|
|
175.9
|
|
|
26.5
|
|
|
171.6
|
|
|
25.8
|
|
|
159.4
|
|
|
25.4
|
|
|||
C
|
|
183.2
|
|
|
27.6
|
|
|
188.7
|
|
|
28.3
|
|
|
188.0
|
|
|
30.0
|
|
|||
D
|
|
103.4
|
|
|
15.6
|
|
|
100.5
|
|
|
15.1
|
|
|
91.9
|
|
|
14.7
|
|
|||
E
|
|
14.1
|
|
|
2.1
|
|
|
12.2
|
|
|
1.8
|
|
|
9.4
|
|
|
1.5
|
|
|||
F
|
|
2.0
|
|
|
0.3
|
|
|
3.2
|
|
|
0.5
|
|
|
1.0
|
|
|
0.2
|
|
|||
G
|
|
0.6
|
|
|
<0.1
|
|
|
0.5
|
|
|
0.1
|
|
|
0.3
|
|
|
<0.1
|
|
|||
Total
|
|
$
|
664.6
|
|
|
100.0
|
%
|
|
$
|
666.2
|
|
|
100.0
|
%
|
|
$
|
626.9
|
|
|
100.0
|
%
|
Employer Classifications
|
|
In-force Premiums
|
|
Percentage
of Total
|
|||
|
|
(in millions, except percentages)
|
|||||
Restaurants and Other Eating Places
|
|
$
|
164.4
|
|
|
24.7
|
%
|
Hotels, Motels and Clubs
|
|
52.1
|
|
|
7.8
|
|
|
Automobile Dealers
|
|
29.1
|
|
|
4.4
|
|
|
Automotive Repair and Maintenance
|
|
24.3
|
|
|
3.7
|
|
|
Real Estate Management
|
|
21.1
|
|
|
3.2
|
|
|
Offices of Physicians
|
|
19.1
|
|
|
2.9
|
|
|
Other Store Retailers
|
|
15.9
|
|
|
2.4
|
|
|
Schools
|
|
15.5
|
|
|
2.3
|
|
|
Wholesale Stores
|
|
15.3
|
|
|
2.3
|
|
|
Grocery Stores
|
|
13.4
|
|
|
2.0
|
|
|
Total
|
|
$
|
370.2
|
|
|
55.7
|
%
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
State
|
|
In-force Premiums
|
|
Policies
In-force
|
|
In-force Premiums
|
|
Policies
In-force
|
|
In-force Premiums
|
|
Policies
In-force
|
|||||||||
|
|
(dollars in millions)
|
|||||||||||||||||||
California
|
|
$
|
329.8
|
|
|
43,079
|
|
|
$
|
357.1
|
|
|
41,988
|
|
|
$
|
349.4
|
|
|
40,573
|
|
Florida
|
|
36.3
|
|
|
5,822
|
|
|
41.0
|
|
|
5,833
|
|
|
41.8
|
|
|
5,625
|
|
|||
New York
|
|
31.7
|
|
|
5,679
|
|
|
23.9
|
|
|
3,663
|
|
|
12.3
|
|
|
2,038
|
|
|||
Other (43 states and D.C.)
|
|
266.8
|
|
|
44,104
|
|
|
244.2
|
|
|
40,014
|
|
|
223.4
|
|
|
37,258
|
|
|||
Total
|
|
$
|
664.6
|
|
|
98,684
|
|
|
$
|
666.2
|
|
|
91,498
|
|
|
$
|
626.9
|
|
|
85,494
|
|
•
|
standards of solvency, including RBC measurements;
|
•
|
restrictions on the nature, quality, and concentration of investments;
|
•
|
restrictions on the types of terms that we can include in the insurance policies we offer;
|
•
|
mandates that may affect wage replacement and medical care benefits paid under the workers' compensation system;
|
•
|
requirements for the handling and reporting of claims and procedures for adjusting claims;
|
•
|
restrictions on the way rates are developed and premiums are determined;
|
•
|
the manner in which agents may be appointed;
|
•
|
establishment of liabilities for unearned premiums, unpaid losses and LAE;
|
•
|
limitations on our ability to transact business with affiliates;
|
•
|
mergers, acquisitions, and divestitures involving our insurance subsidiaries;
|
•
|
licensing requirements and approvals that affect our ability to do business;
|
•
|
compliance with all applicable privacy laws;
|
•
|
compliance with cyber-security laws and regulations;
|
•
|
potential assessments for the settlement of covered claims under insurance policies issued by impaired, insolvent, or failed insurance companies or other assessments imposed by regulatory agencies; and
|
•
|
the amount of dividends that our insurance subsidiaries may pay to EGI and CGI and, in turn, the ability of EGI and CGI to pay dividends to EHI.
|
•
|
dividing our Board of Directors into classes until the 2021 stockholder meeting;
|
•
|
eliminating the ability of our stockholders to call special meetings of stockholders;
|
•
|
permitting our Board of Directors to issue preferred stock in one or more series;
|
•
|
imposing advance notice requirements for nominations for election to our Board of Directors and/or for proposing matters that can be acted upon by stockholders at the stockholder meetings; and
|
•
|
prohibiting stockholder action by written consent, thereby limiting stockholder action to that taken at an annual or special meeting of our stockholders.
|
•
|
the surplus and earnings of our insurance subsidiaries and their ability to pay dividends and/or other statutorily permissible payments to their parent;
|
•
|
our results of operations and cash flows;
|
•
|
our financial position and capital requirements;
|
•
|
general business conditions;
|
•
|
any legal, tax, regulatory, and/or contractual restrictions on the payment of dividends; and
|
•
|
any other factors our Board of Directors deems relevant.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average
Price Paid
Per Share(1)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
|
Approximate
Dollar Value of Shares that
May Yet be Purchased Under the Program(2)
|
||||||
|
|
|
|
|
|
|
|
(in millions)
|
||||||
October 1 – October 31, 2019
|
|
55,789
|
|
|
$
|
42.23
|
|
|
55,789
|
|
|
$
|
45.7
|
|
November 1 – November 30, 2019
|
|
207,521
|
|
|
42.19
|
|
|
207,521
|
|
|
36.9
|
|
||
December 1 – December 31, 2019
|
|
202,040
|
|
|
42.48
|
|
|
202,040
|
|
|
28.3
|
|
||
Total
|
|
465,350
|
|
|
$
|
42.32
|
|
|
465,350
|
|
|
|
|
(1)
|
Includes fees and commissions paid on stock repurchases.
|
(2)
|
On February 21, 2018, the Board of Directors authorized a share repurchase program for repurchases of up to $50.0 million of the Company's common stock (the 2018 Program). On April 24, 2019, the Board of Directors authorized a $50.0 million expansion of the 2018 Program, to $100 million, through June 30, 2020. The 2018 Program provides that shares may be purchased at prevailing market prices through a variety of methods, including open market or private transactions, in accordance with applicable laws and regulations and as determined by management. The timing and actual number of shares that may be repurchased will depend on a variety of factors, including the share price, corporate and regulatory requirements, and other market and economic conditions. Repurchases under the 2018 Program may be commenced, modified, or suspended from time to time without prior notice, and the program may be suspended or discontinued at any time.
|
|
Period Ending
|
||||||||||||||||||||||
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2017
|
|
12/31/2018
|
|
12/31/2019
|
||||||||||||
Employers Holdings, Inc.
|
$
|
100.00
|
|
|
$
|
117.24
|
|
|
$
|
172.18
|
|
|
$
|
195.83
|
|
|
$
|
188.65
|
|
|
$
|
191.63
|
|
S&P 500
|
100.00
|
|
|
101.38
|
|
|
113.51
|
|
|
138.29
|
|
|
132.23
|
|
|
173.86
|
|
||||||
S&P 500 P&C Insurance Index
|
100.00
|
|
|
109.53
|
|
|
126.73
|
|
|
155.10
|
|
|
147.83
|
|
|
186.07
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Income Statement Data
|
(in millions, except per share amounts)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net premiums earned
|
$
|
695.8
|
|
|
$
|
731.1
|
|
|
$
|
716.5
|
|
|
$
|
694.8
|
|
|
$
|
690.4
|
|
Net investment income
|
88.1
|
|
|
81.2
|
|
|
74.6
|
|
|
73.2
|
|
|
72.2
|
|
|||||
Net realized and unrealized (losses) gains on investments(1)
|
51.1
|
|
|
(13.1
|
)
|
|
7.4
|
|
|
11.2
|
|
|
(10.7
|
)
|
|||||
Gain on redemption of notes payable
|
—
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|||||
Other income
|
0.9
|
|
|
1.2
|
|
|
0.8
|
|
|
0.6
|
|
|
0.2
|
|
|||||
Total revenues
|
835.9
|
|
|
800.4
|
|
|
801.4
|
|
|
779.8
|
|
|
752.1
|
|
|||||
Total expenses
|
642.1
|
|
|
630.9
|
|
|
657.4
|
|
|
639.1
|
|
|
652.7
|
|
|||||
Net income before income taxes
|
193.8
|
|
|
169.5
|
|
|
144.0
|
|
|
140.7
|
|
|
99.4
|
|
|||||
Income tax expense(2)
|
36.7
|
|
|
28.2
|
|
|
42.8
|
|
|
34.0
|
|
|
5.0
|
|
|||||
Net income
|
$
|
157.1
|
|
|
$
|
141.3
|
|
|
$
|
101.2
|
|
|
$
|
106.7
|
|
|
$
|
94.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
4.89
|
|
|
$
|
4.30
|
|
|
$
|
3.11
|
|
|
$
|
3.29
|
|
|
$
|
2.94
|
|
Diluted
|
4.83
|
|
|
4.24
|
|
|
3.06
|
|
|
3.24
|
|
|
2.90
|
|
|||||
Cash dividends declared per common share
|
0.88
|
|
|
0.80
|
|
|
0.60
|
|
|
0.36
|
|
|
0.24
|
|
(1)
|
Changes in fair value of equity securities and other invested assets are included in Net realized and unrealized gains (losses) on investments on our Consolidated Statements of Comprehensive Income beginning 2018 in accordance with Accounting Standards Update (ASU) No. 2016-01.
|
(2)
|
The statutory Federal income tax rate was reduced from 35% to 21% beginning in 2018 with the passage of the Tax Cuts and Jobs Act on December 22, 2017. See Note 7 in the Notes to the Consolidated Financial Statements.
|
|
As of December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Balance Sheet Data
|
(in millions)
|
||||||||||||||||||
Cash and cash equivalents
|
$
|
154.9
|
|
|
$
|
101.4
|
|
|
$
|
73.3
|
|
|
$
|
67.2
|
|
|
$
|
56.6
|
|
Total investments
|
2,778.4
|
|
|
2,727.7
|
|
|
2,677.7
|
|
|
2,552.6
|
|
|
2,487.2
|
|
|||||
Reinsurance recoverable on paid and unpaid losses
|
539.7
|
|
|
511.1
|
|
|
544.2
|
|
|
588.7
|
|
|
635.9
|
|
|||||
Total assets
|
4,004.1
|
|
|
3,919.2
|
|
|
3,840.1
|
|
|
3,773.4
|
|
|
3,755.8
|
|
|||||
Unpaid losses and loss adjustment expense
|
2,192.8
|
|
|
2,207.9
|
|
|
2,266.1
|
|
|
2,301.0
|
|
|
2,347.5
|
|
|||||
Unearned premiums
|
337.1
|
|
|
336.3
|
|
|
318.3
|
|
|
310.3
|
|
|
308.9
|
|
|||||
Deferred reinsurance gain—LPT Agreement
|
137.1
|
|
|
149.6
|
|
|
163.6
|
|
|
174.9
|
|
|
189.5
|
|
|||||
Notes payable
|
—
|
|
|
20.0
|
|
|
20.0
|
|
|
32.0
|
|
|
32.0
|
|
|||||
Total liabilities
|
2,838.3
|
|
|
2,901.0
|
|
|
2,892.4
|
|
|
2,932.8
|
|
|
2,995.0
|
|
|||||
Total stockholders' equity
|
1,165.8
|
|
|
1,018.2
|
|
|
947.7
|
|
|
840.6
|
|
|
760.8
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in millions)
|
||||||||||
Gross premiums written
|
$
|
696.9
|
|
|
$
|
748.9
|
|
|
$
|
729.7
|
|
Net premiums written
|
$
|
691.5
|
|
|
$
|
742.8
|
|
|
$
|
723.7
|
|
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
695.8
|
|
|
$
|
731.1
|
|
|
$
|
716.5
|
|
Net investment income
|
88.1
|
|
|
81.2
|
|
|
74.6
|
|
|||
Net realized and unrealized gains (losses) on investments
|
51.1
|
|
|
(13.1
|
)
|
|
7.4
|
|
|||
Gain on redemption of notes payable
|
—
|
|
|
—
|
|
|
2.1
|
|
|||
Other income
|
0.9
|
|
|
1.2
|
|
|
0.8
|
|
|||
Total revenues
|
835.9
|
|
|
800.4
|
|
|
801.4
|
|
|||
|
|
|
|
|
|
||||||
Losses and LAE
|
365.9
|
|
|
376.7
|
|
|
417.2
|
|
|||
Commission expense
|
88.1
|
|
|
94.2
|
|
|
91.4
|
|
|||
Underwriting and general and administrative expenses
|
187.5
|
|
|
158.5
|
|
|
139.9
|
|
|||
Interest and financing expenses
|
0.6
|
|
|
1.5
|
|
|
1.4
|
|
|||
Other expense
|
—
|
|
|
—
|
|
|
7.5
|
|
|||
Total expenses
|
642.1
|
|
|
630.9
|
|
|
657.4
|
|
|||
|
|
|
|
|
|
||||||
Net income before income taxes
|
193.8
|
|
|
169.5
|
|
|
144.0
|
|
|||
Income tax expense
|
36.7
|
|
|
28.2
|
|
|
42.8
|
|
|||
Net income
|
$
|
157.1
|
|
|
$
|
141.3
|
|
|
$
|
101.2
|
|
•
|
Net premiums earned decreased 4.8% in 2019 and increased 2.0% in 2018, each compared to the previous year;
|
•
|
Losses and LAE decreased 3% in 2019 and 10% in 2018, each compared to the previous year;
|
•
|
Underwriting and general and administrative expenses increased 18% in 2019 and 13% in 2018, each compared to the previous year;
|
•
|
Net investment income increased 8.5% in 2019 and 8.8% in 2018, each compared to the previous year;
|
•
|
Net realized and unrealized gains (losses) on investments was $51.1 million, $(13.1) million, and $7.4 million in 2019, 2018, and 2017, respectively; and
|
•
|
The statutory Federal income tax rate was 21% in 2019 and 2018 and 35% in 2017.
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in millions)
|
||||||||||
Gross premiums written
|
$
|
696.8
|
|
|
$
|
748.9
|
|
|
$
|
729.7
|
|
Net premiums written
|
$
|
691.4
|
|
|
$
|
742.8
|
|
|
$
|
723.7
|
|
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
695.8
|
|
|
$
|
731.1
|
|
|
$
|
716.5
|
|
Net investment income
|
84.1
|
|
|
78.6
|
|
|
73.3
|
|
|||
Net realized and unrealized gains (losses) on investments
|
47.7
|
|
|
(13.9
|
)
|
|
7.4
|
|
|||
Gain on redemption of notes payable
|
—
|
|
|
—
|
|
|
2.1
|
|
|||
Other income
|
0.9
|
|
|
1.0
|
|
|
0.8
|
|
|||
Total revenues
|
828.5
|
|
|
796.8
|
|
|
800.1
|
|
|||
|
|
|
|
|
|
||||||
Losses and LAE
|
378.6
|
|
|
391.3
|
|
|
428.8
|
|
|||
Commission expense
|
88.1
|
|
|
94.2
|
|
|
91.4
|
|
|||
Underwriting expenses
|
153.2
|
|
|
135.0
|
|
|
123.7
|
|
|||
Interest and financing expenses
|
0.6
|
|
|
1.5
|
|
|
1.4
|
|
|||
Other expense
|
—
|
|
|
—
|
|
|
7.5
|
|
|||
Total expenses
|
620.5
|
|
|
622.0
|
|
|
652.8
|
|
|||
|
|
|
|
|
|
||||||
Net income before income taxes
|
$
|
208.0
|
|
|
$
|
174.8
|
|
|
$
|
147.3
|
|
|
|
|
|
|
|
||||||
Underwriting income
|
$
|
75.9
|
|
|
$
|
110.6
|
|
|
$
|
72.6
|
|
|
|
|
|
|
|
||||||
Combined ratio
|
89.1
|
%
|
|
84.9
|
%
|
|
89.9
|
%
|
|
Percentage Change
2019 Over 2018 |
|
Percentage Change
2018 Over 2017
|
||||||||||||||
|
Overall
|
|
California
|
|
All Other States
|
|
Overall
|
|
California
|
|
All Other States
|
||||||
In-force premiums
|
(0.2
|
)%
|
|
(7.6
|
)%
|
|
8.3
|
%
|
|
6.3
|
%
|
|
2.2
|
%
|
|
11.4
|
%
|
In-force policy count
|
7.8
|
|
|
2.6
|
|
|
12.1
|
|
|
7.0
|
|
|
3.5
|
|
|
10.2
|
|
Average in-force policy size
|
(7.4
|
)
|
|
(10.0
|
)
|
|
(3.4
|
)
|
|
(0.7
|
)
|
|
(1.2
|
)
|
|
1.1
|
|
In-force payroll exposure
|
17.5
|
|
|
10.7
|
|
|
21.8
|
|
|
22.0
|
|
|
24.4
|
|
|
20.5
|
|
|
Years Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Loss and LAE ratio
|
54.4
|
%
|
|
53.5
|
%
|
|
59.8
|
%
|
Underwriting expense ratio
|
22.0
|
|
|
18.5
|
|
|
17.3
|
|
Commission expense ratio
|
12.7
|
|
|
12.9
|
|
|
12.8
|
|
Combined ratio
|
89.1
|
%
|
|
84.9
|
%
|
|
89.9
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in millions)
|
||||||||||
Losses and LAE
|
$
|
378.6
|
|
|
$
|
391.3
|
|
|
$
|
428.8
|
|
Prior accident year favorable development, net
|
77.5
|
|
|
66.2
|
|
|
18.5
|
|
|||
Current accident year losses and LAE
|
$
|
456.1
|
|
|
$
|
457.5
|
|
|
$
|
447.3
|
|
|
|
|
|
|
|
||||||
Current accident year loss ratio
|
65.6
|
%
|
|
62.6
|
%
|
|
62.4
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in millions)
|
||||||||||
Gross premiums written
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net premiums written
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net investment income
|
0.3
|
|
|
—
|
|
|
—
|
|
|||
Net realized and unrealized gains on investments
|
0.1
|
|
|
—
|
|
|
—
|
|
|||
Other income
|
—
|
|
|
0.2
|
|
|
—
|
|
|||
Total revenues
|
0.4
|
|
|
0.2
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Underwriting expenses
|
16.0
|
|
|
5.9
|
|
|
1.1
|
|
|||
Total expenses
|
16.0
|
|
|
5.9
|
|
|
1.1
|
|
|||
|
|
|
|
|
|
||||||
Net loss before income taxes
|
$
|
(15.6
|
)
|
|
$
|
(5.7
|
)
|
|
$
|
(1.1
|
)
|
|
|
|
|
|
|
||||||
Underwriting loss
|
$
|
(16.0
|
)
|
|
$
|
(5.9
|
)
|
|
$
|
(1.1
|
)
|
|
|
|
|
|
|
||||||
Combined ratio
|
n/m
|
|
|
n/m
|
|
|
n/m
|
|
|||
n/m - not meaningful
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in millions)
|
||||||||||
Net investment income
|
3.7
|
|
|
2.6
|
|
|
1.3
|
|
|||
Net realized and unrealized gains on investments
|
3.3
|
|
|
0.8
|
|
|
—
|
|
|||
Total revenues
|
7.0
|
|
|
3.4
|
|
|
1.3
|
|
|||
|
|
|
|
|
|
||||||
Losses and LAE - LPT
|
(12.7
|
)
|
|
(14.6
|
)
|
|
(11.6
|
)
|
|||
General and administrative expenses
|
18.3
|
|
|
17.6
|
|
|
15.1
|
|
|||
Total expenses
|
5.6
|
|
|
3.0
|
|
|
3.5
|
|
|||
|
|
|
|
|
|
||||||
Net income (loss) before income taxes
|
$
|
1.4
|
|
|
$
|
0.4
|
|
|
$
|
(2.2
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in millions)
|
||||||||||
Amortization of the Deferred Gain related to losses
|
$
|
8.9
|
|
|
$
|
9.9
|
|
|
$
|
9.3
|
|
Amortization of the Deferred Gain related to contingent commission
|
1.8
|
|
|
2.0
|
|
|
2.0
|
|
|||
Impact of LPT Reserve Adjustments(1)
|
1.8
|
|
|
2.2
|
|
|
—
|
|
|||
Impact of LPT Contingent Commission Adjustments(2)
|
0.2
|
|
|
0.5
|
|
|
0.3
|
|
|||
Total impact of the LPT
|
$
|
12.7
|
|
|
$
|
14.6
|
|
|
$
|
11.6
|
|
(1)
|
LPT Reserve Adjustments result in a cumulative adjustment to the Deferred Gain, which is recognized in losses and LAE incurred on our Consolidated Statements of Comprehensive Income, such that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. (See Note 2 in the Notes to our Consolidated Financial Statements.)
|
(2)
|
LPT Contingent Commission Adjustments result in a cumulative adjustment to the Deferred Gain, which is recognized in losses and LAE incurred on our Consolidated Statements of Comprehensive Income, such that the Deferred Gain reflects the balance that would have existed had the revised contingent profit commission been recognized at the inception of the LPT Agreement. (See Note 2 in the Notes to our Consolidated Financial Statements.)
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash, cash equivalents, and restricted cash provided by (used in):
|
(in millions)
|
||||||||||
Operating activities
|
$
|
123.1
|
|
|
$
|
180.2
|
|
|
$
|
142.3
|
|
Investing activities
|
49.2
|
|
|
(119.6
|
)
|
|
(112.8
|
)
|
|||
Financing activities
|
(119.1
|
)
|
|
(32.9
|
)
|
|
(26.0
|
)
|
|||
Increase in cash, cash equivalents, and restricted cash
|
$
|
53.2
|
|
|
$
|
27.7
|
|
|
$
|
3.5
|
|
|
December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in millions)
|
||||||||||
Beginning Balance
|
$
|
1,018.2
|
|
|
$
|
947.7
|
|
|
$
|
840.6
|
|
Stock-based obligations
|
10.1
|
|
|
9.4
|
|
|
6.9
|
|
|||
Stock options exercised
|
0.7
|
|
|
1.1
|
|
|
6.0
|
|
|||
Shares withheld to satisfy minimum tax withholdings for certain stock-based obligations
|
(3.2
|
)
|
|
(2.9
|
)
|
|
(2.2
|
)
|
|||
Grant date fair value adjustment
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|||
Acquisition of common stock
|
(67.1
|
)
|
|
(4.6
|
)
|
|
—
|
|
|||
Dividends declared
|
(28.9
|
)
|
|
(26.7
|
)
|
|
(19.7
|
)
|
|||
Net income for the year
|
157.1
|
|
|
141.3
|
|
|
101.2
|
|
|||
Change in net unrealized gains (losses) on investments, net of taxes
|
79.0
|
|
|
(47.1
|
)
|
|
15.1
|
|
|||
Ending Balance
|
$
|
1,165.8
|
|
|
$
|
1,018.2
|
|
|
$
|
947.7
|
|
|
Payment Due By Period
|
||||||||||||||||||
|
Total
|
|
Less Than
1 Year
|
|
1-3 Years
|
|
4-5 Years
|
|
More Than
5 Years
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Operating leases
|
$
|
19.6
|
|
|
$
|
4.8
|
|
|
$
|
5.8
|
|
|
$
|
4.4
|
|
|
$
|
4.6
|
|
Non-cancellable contracts
|
23.0
|
|
|
6.0
|
|
|
10.3
|
|
|
5.9
|
|
|
0.8
|
|
|||||
Finance leases
|
0.6
|
|
|
0.2
|
|
|
0.3
|
|
|
0.1
|
|
|
—
|
|
|||||
Unpaid losses and LAE reserves(1)(2)
|
2,192.8
|
|
|
352.8
|
|
|
431.8
|
|
|
272.7
|
|
|
1,135.5
|
|
|||||
Unfunded investment commitments
|
41.6
|
|
|
41.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
2,277.6
|
|
|
$
|
405.4
|
|
|
$
|
448.2
|
|
|
$
|
283.1
|
|
|
$
|
1,140.9
|
|
(1)
|
Estimated losses and LAE reserve payment patterns have been computed based on historical information. Our calculation of loss and LAE reserve payments by period is subject to the same uncertainties associated with determining the level of reserves and to the additional uncertainties arising from the difficulty of predicting when claims (including claims that have not yet been reported to us) will be paid. For a discussion of our reserving process, see ''–Critical Accounting Policies–Reserves for Losses and LAE.'' Actual payments of losses and LAE by period will vary, perhaps materially, from the above table to the extent that current estimates of losses and LAE reserves vary from actual ultimate claims amounts due to variations between expected and actual payout patterns.
|
(2)
|
The unpaid losses and LAE reserves are presented gross of reinsurance recoverables for unpaid losses, which were as follows for each of the periods presented above:
|
|
Recoveries Due By Period
|
||||||||||||||||||
|
Total
|
|
Less Than
1 Year
|
|
1-3 Years
|
|
4-5 Years
|
|
More Than
5 Years
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Reinsurance recoverables on unpaid losses and LAE
|
$
|
(532.5
|
)
|
|
$
|
(33.7
|
)
|
|
$
|
(59.1
|
)
|
|
$
|
(53.5
|
)
|
|
$
|
(386.2
|
)
|
Category
|
|
Estimated Fair Value
|
|
Percentage of Total
|
|
Book Yield
|
|
Tax Equivalent Yield(1)
|
|||||
|
|
(in millions, except percentages)
|
|||||||||||
U.S. Treasuries
|
|
$
|
85.6
|
|
|
3.1
|
%
|
|
2.5
|
%
|
|
2.5
|
%
|
U.S. Agencies
|
|
2.9
|
|
|
0.1
|
|
|
3.5
|
|
|
3.5
|
|
|
States and municipalities
|
|
484.5
|
|
|
17.7
|
|
|
3.2
|
|
|
3.7
|
|
|
Corporate securities
|
|
1,079.0
|
|
|
39.4
|
|
|
3.3
|
|
|
3.3
|
|
|
Residential mortgaged-backed securities
|
|
480.4
|
|
|
17.5
|
|
|
3.0
|
|
|
3.0
|
|
|
Commercial mortgaged-backed securities
|
|
110.6
|
|
|
4.0
|
|
|
3.2
|
|
|
3.2
|
|
|
Asset-backed securities
|
|
61.2
|
|
|
2.2
|
|
|
3.4
|
|
|
3.4
|
|
|
Other securities
|
|
181.7
|
|
|
6.6
|
|
|
4.7
|
|
|
4.7
|
|
|
Equity securities
|
|
256.7
|
|
|
9.4
|
|
|
3.7
|
|
|
5.1
|
|
|
Total investments at fair value
|
|
$
|
2,742.6
|
|
|
100.0
|
%
|
|
|
|
|
||
Weighted average ending yield
|
|
|
|
|
|
3.3
|
%
|
|
3.5
|
%
|
(1)
|
Computed using a statutory income tax rate of 21%.
|
Rating
|
|
Percentage of Total
Estimated Fair Value
|
|
"AAA"
|
|
8.1
|
%
|
"AA"
|
|
44.8
|
|
"A"
|
|
30.3
|
|
"BBB"
|
|
9.9
|
|
Below Investment Grade
|
|
6.9
|
|
Total
|
|
100.0
|
%
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Case reserves
|
$
|
951.5
|
|
|
$
|
940.6
|
|
IBNR
|
940.5
|
|
|
955.7
|
|
||
LAE reserves
|
300.8
|
|
|
311.6
|
|
||
Gross unpaid losses and LAE reserves
|
2,192.8
|
|
|
2,207.9
|
|
||
Less reinsurance recoverable on unpaid losses and LAE
|
532.5
|
|
|
504.4
|
|
||
Net unpaid losses and LAE reserves
|
$
|
1,660.3
|
|
|
$
|
1,703.5
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Low end of actuarial range
|
$
|
1,489.4
|
|
|
$
|
1,484.8
|
|
Carried reserves
|
1,660.3
|
|
|
1,703.5
|
|
||
High end of actuarial range
|
1,855.3
|
|
|
1,897.3
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Increase (decrease) in reserves
|
(in millions)
|
||||||
At low end of range
|
$
|
(170.9
|
)
|
|
$
|
(218.7
|
)
|
At high end of range
|
195.0
|
|
|
193.8
|
|
||
Increase (decrease) in stockholders' equity and net income
|
|
|
|
||||
At low end of range
|
$
|
135.0
|
|
|
$
|
172.8
|
|
At high end of range
|
(154.1
|
)
|
|
(153.1
|
)
|
|
As of December 31,
|
||
|
2019
|
||
|
(in millions)
|
||
Low end of actuarial range
|
$
|
328.9
|
|
LPT carried reserves
|
380.4
|
|
|
High end of actuarial range
|
444.2
|
|
Hypothetical Changes in Interest Rates
|
|
Estimated Pre-tax Increase (Decrease) in Fair Value
|
|||||
|
|
(in millions, except percentages)
|
|||||
300 basis point rise
|
|
$
|
(272.7
|
)
|
|
(11.0
|
)%
|
200 basis point rise
|
|
(181.2
|
)
|
|
(7.3
|
)
|
|
100 basis point rise
|
|
(89.1
|
)
|
|
(3.6
|
)
|
|
50 basis point decline
|
|
42.8
|
|
|
1.7
|
|
|
100 basis point decline
|
|
85.1
|
|
|
3.4
|
|
(in millions)
|
Cost
|
|
Fair Value
|
|
10% Fair Value Decrease
|
|
Pre-tax Impact on Total Equity Securities
|
|
10% Fair Value Increase
|
|
Pre-tax Impact on Total Equity Securities
|
||||||||||||
Equity securities
|
$
|
155.6
|
|
|
$
|
256.7
|
|
|
$
|
231.0
|
|
|
$
|
(25.7
|
)
|
|
$
|
282.4
|
|
|
$
|
25.7
|
|
|
Page
|
Management's Report on Internal Control Over Financial Reporting
|
|
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting
|
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2019 and 2018
|
|
Consolidated Statements of Comprehensive Income for each of the years ended December 31, 2019, 2018 and 2017
|
|
Consolidated Statements of Stockholders' Equity for each of the years ended December 31, 2019, 2018 and 2017
|
|
Consolidated Statements of Cash Flows for each of the years ended December 31, 2019, 2018 and 2017
|
|
Notes to Consolidated Financial Statements
|
|
|
|
The following Financial Statement Schedules are filed in Item 15 of Part IV of this report:
|
|
|
|
Financial Statement Schedules:
|
|
Schedule II. Condensed Financial Information of Registrant
|
|
Schedule VI. Supplemental Information Concerning Property-Casualty Insurance Operations
|
|
|
|
Pursuant to Rule 7-05 of Regulation S-X, Financial Statement Schedules I, III, IV, and V have been omitted as the information to be set forth therein is included in the Notes to Consolidated Financial Statements.
|
Employers Holdings, Inc. and Subsidiaries
|
||||||||
|
|
|
|
|
||||
Consolidated Balance Sheets
|
||||||||
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions, except share data)
|
||||||
Assets
|
|
|
||||||
Investments:
|
|
|
|
|
||||
Fixed maturity securities at fair value (amortized cost $2,403.3 at December 31, 2019 and $2,513.7 at December 31, 2018)
|
|
$
|
2,485.9
|
|
|
$
|
2,496.4
|
|
Equity securities at fair value (cost $155.6 at December 31, 2019 and $131.9 at December 31, 2018)
|
|
256.7
|
|
|
199.9
|
|
||
Equity securities at cost
|
|
6.7
|
|
|
6.4
|
|
||
Other invested assets (cost $28.4 at December 31, 2019)
|
|
29.1
|
|
|
—
|
|
||
Short-term investments at fair value (amortized cost $25.0 at December 31, 2018)
|
|
—
|
|
|
25.0
|
|
||
Total investments
|
|
2,778.4
|
|
|
2,727.7
|
|
||
Cash and cash equivalents
|
|
154.9
|
|
|
101.4
|
|
||
Restricted cash and cash equivalents
|
|
0.3
|
|
|
0.6
|
|
||
Accrued investment income
|
|
16.4
|
|
|
18.0
|
|
||
Premiums receivable (less bad debt allowance of $4.6 at December 31, 2019 and $6.7 at December 31, 2018)
|
|
285.7
|
|
|
333.1
|
|
||
Reinsurance recoverable for:
|
|
|
|
|
|
|||
Paid losses
|
|
7.2
|
|
|
6.7
|
|
||
Unpaid losses
|
|
532.5
|
|
|
504.4
|
|
||
Deferred policy acquisition costs
|
|
47.9
|
|
|
48.2
|
|
||
Deferred income taxes, net
|
|
—
|
|
|
26.9
|
|
||
Property and equipment, net
|
|
21.9
|
|
|
18.2
|
|
||
Operating lease right-of-use assets
|
|
15.9
|
|
|
—
|
|
||
Intangible assets, net
|
|
13.6
|
|
|
7.7
|
|
||
Goodwill
|
|
36.2
|
|
|
36.2
|
|
||
Contingent commission receivable–LPT Agreement
|
|
13.2
|
|
|
32.0
|
|
||
Cloud computing arrangements
|
|
33.6
|
|
|
26.0
|
|
||
Other assets
|
|
46.4
|
|
|
32.1
|
|
||
Total assets
|
|
$
|
4,004.1
|
|
|
$
|
3,919.2
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
|
||
Claims and policy liabilities:
|
|
|
|
|
|
|
||
Unpaid losses and loss adjustment expenses
|
|
$
|
2,192.8
|
|
|
$
|
2,207.9
|
|
Unearned premiums
|
|
337.1
|
|
|
336.3
|
|
||
Commissions and premium taxes payable
|
|
48.6
|
|
|
57.3
|
|
||
Accounts payable and accrued expenses
|
|
29.8
|
|
|
37.1
|
|
||
Deferred reinsurance gain—LPT Agreement
|
|
137.1
|
|
|
149.6
|
|
||
Notes payable
|
|
—
|
|
|
20.0
|
|
||
Non-cancellable obligations
|
|
23.0
|
|
|
18.8
|
|
||
Operating lease liability
|
|
17.8
|
|
|
—
|
|
||
Other liabilities
|
|
52.1
|
|
|
74.0
|
|
||
Total liabilities
|
|
$
|
2,838.3
|
|
|
$
|
2,901.0
|
|
Commitments and contingencies (Note 11)
|
|
|
|
|
|
|
Employers Holdings, Inc. and Subsidiaries
|
||||||||
|
|
|
|
|
||||
Consolidated Balance Sheets
|
||||||||
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions, except share data)
|
||||||
Stockholders' equity:
|
|
|
|
|
|
|
||
Common stock, $0.01 par value; 150,000,000 shares authorized; 57,184,370 and 56,975,675 shares issued and 31,355,378 and 32,765,792 shares outstanding at December 31, 2019 and 2018, respectively
|
|
$
|
0.6
|
|
|
$
|
0.6
|
|
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
396.4
|
|
|
388.8
|
|
||
Retained earnings
|
|
1,158.8
|
|
|
1,030.7
|
|
||
Accumulated other comprehensive income (loss), net of tax
|
|
65.3
|
|
|
(13.7
|
)
|
||
Treasury stock, at cost (25,828,992 shares at December 31, 2019 and 24,209,883 shares at December 31, 2018)
|
|
(455.3
|
)
|
|
(388.2
|
)
|
||
Total stockholders' equity
|
|
1,165.8
|
|
|
1,018.2
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
4,004.1
|
|
|
$
|
3,919.2
|
|
Employers Holdings, Inc. and Subsidiaries
|
||||||||||||
|
|
|
|
|
|
|
||||||
Consolidated Statements of Comprehensive Income
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
|
(in millions, except per share data)
|
||||||||||
Net premiums earned
|
|
$
|
695.8
|
|
|
$
|
731.1
|
|
|
$
|
716.5
|
|
Net investment income
|
|
88.1
|
|
|
81.2
|
|
|
74.6
|
|
|||
Net realized and unrealized gains (losses) on investments
|
|
51.1
|
|
|
(13.1
|
)
|
|
7.4
|
|
|||
Gain on redemption of notes payable
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|||
Other income
|
|
0.9
|
|
|
1.2
|
|
|
0.8
|
|
|||
Total revenues
|
|
835.9
|
|
|
800.4
|
|
|
801.4
|
|
|||
|
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
|
|
|
||||
Losses and loss adjustment expenses
|
|
365.9
|
|
|
376.7
|
|
|
417.2
|
|
|||
Commission expense
|
|
88.1
|
|
|
94.2
|
|
|
91.4
|
|
|||
Underwriting and general and administrative expenses
|
|
187.5
|
|
|
158.5
|
|
|
139.9
|
|
|||
Interest and financing expenses
|
|
0.6
|
|
|
1.5
|
|
|
1.4
|
|
|||
Other expenses
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|||
Total expenses
|
|
642.1
|
|
|
630.9
|
|
|
657.4
|
|
|||
|
|
|
|
|
|
|
||||||
Net income before income taxes
|
|
193.8
|
|
|
169.5
|
|
|
144.0
|
|
|||
Income tax expense
|
|
36.7
|
|
|
28.2
|
|
|
42.8
|
|
|||
Net income
|
|
$
|
157.1
|
|
|
$
|
141.3
|
|
|
$
|
101.2
|
|
|
|
|
|
|
|
|
||||||
Comprehensive income
|
|
|
|
|
|
|
||||||
Unrealized AFS investment gains (losses) during the period (net of tax (expense) benefit of $(21.8), $12.9, and $(8.9) for the years ended December 31, 2019, 2018, and 2017, respectively)
|
|
$
|
82.1
|
|
|
$
|
(48.5
|
)
|
|
$
|
19.9
|
|
Reclassification adjustment for realized AFS investment (gains) losses in net income (net of tax expense (benefit) of $0.8, $(0.4), and $2.6 for the years ended December 31, 2019, 2018, and 2017, respectively)
|
|
(3.1
|
)
|
|
1.4
|
|
|
(4.8
|
)
|
|||
Other comprehensive income (loss), net of tax
|
|
79.0
|
|
|
(47.1
|
)
|
|
15.1
|
|
|||
Total comprehensive income
|
|
$
|
236.1
|
|
|
$
|
94.2
|
|
|
$
|
116.3
|
|
|
|
|
|
|
|
|
||||||
Net realized and unrealized gains (losses) on investments
|
|
|
|
|
|
|
|
|
||||
Net realized and unrealized gains (losses) on investments before impairments
|
|
$
|
51.1
|
|
|
$
|
(9.8
|
)
|
|
$
|
8.8
|
|
Other than temporary impairments recognized in earnings
|
|
—
|
|
|
(3.3
|
)
|
|
(1.4
|
)
|
|||
Net realized and unrealized gains (losses) on investments
|
|
$
|
51.1
|
|
|
$
|
(13.1
|
)
|
|
$
|
7.4
|
|
|
|
|
|
|
|
|
||||||
Earnings per common share (Note 17):
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
4.89
|
|
|
$
|
4.30
|
|
|
$
|
3.11
|
|
Diluted
|
|
$
|
4.83
|
|
|
$
|
4.24
|
|
|
$
|
3.06
|
|
Cash dividends declared per common share and eligible RSUs and PSUs
|
|
$
|
0.88
|
|
|
$
|
0.80
|
|
|
$
|
0.60
|
|
Employers Holdings, Inc. and Subsidiaries
|
||||||||||||
Consolidated Statements of Cash Flows
|
||||||||||||
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Operating activities
|
|
(in millions)
|
||||||||||
Net income
|
|
$
|
157.1
|
|
|
$
|
141.3
|
|
|
$
|
101.2
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
|
9.0
|
|
|
6.3
|
|
|
8.2
|
|
|||
Stock-based compensation
|
|
10.1
|
|
|
9.4
|
|
|
6.8
|
|
|||
Amortization of cloud computing arrangements
|
|
5.3
|
|
|
—
|
|
|
—
|
|
|||
Amortization of premium on investments, net
|
|
8.7
|
|
|
8.4
|
|
|
14.3
|
|
|||
Allowance for doubtful accounts
|
|
(2.1
|
)
|
|
(3.3
|
)
|
|
0.2
|
|
|||
Deferred income tax expense
|
|
6.0
|
|
|
14.4
|
|
|
24.2
|
|
|||
Net realized and unrealized (gains) losses on investments
|
|
(51.1
|
)
|
|
13.1
|
|
|
(7.4
|
)
|
|||
Gain on redemption of notes payable
|
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|||
Write-off of previously capitalized costs
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
|
|
|||||
Premiums receivable
|
|
49.5
|
|
|
(3.1
|
)
|
|
(22.2
|
)
|
|||
Reinsurance recoverable on paid and unpaid losses
|
|
20.4
|
|
|
33.1
|
|
|
44.5
|
|
|||
Cloud computing arrangements
|
|
(12.9
|
)
|
|
(26.0
|
)
|
|
—
|
|
|||
Operating lease right-of-use-assets
|
|
(15.9
|
)
|
|
—
|
|
|
—
|
|
|||
Current federal income taxes
|
|
(7.4
|
)
|
|
8.6
|
|
|
(2.7
|
)
|
|||
Unpaid losses and loss adjustment expenses
|
|
(63.4
|
)
|
|
(58.2
|
)
|
|
(34.9
|
)
|
|||
Unearned premiums
|
|
0.8
|
|
|
18.0
|
|
|
8.0
|
|
|||
Accounts payable, accrued expenses and other liabilities
|
|
(7.5
|
)
|
|
19.1
|
|
|
(7.0
|
)
|
|||
Deferred reinsurance gain–LPT Agreement
|
|
(12.5
|
)
|
|
(14.0
|
)
|
|
(11.3
|
)
|
|||
Contingent commission receivable–LPT Agreement
|
|
18.8
|
|
|
—
|
|
|
—
|
|
|||
Operating lease liabilities
|
|
17.8
|
|
|
—
|
|
|
—
|
|
|||
Non-cancellable obligations
|
|
4.2
|
|
|
16.1
|
|
|
2.7
|
|
|||
Other
|
|
(11.8
|
)
|
|
(3.0
|
)
|
|
12.3
|
|
|||
Net cash provided by operating activities
|
|
123.1
|
|
|
180.2
|
|
|
142.3
|
|
|||
Investing activities
|
|
|
|
|
|
|
|
|
|
|||
Purchases of fixed maturity securities
|
|
(359.0
|
)
|
|
(636.7
|
)
|
|
(592.3
|
)
|
|||
Purchases of equity securities
|
|
(240.8
|
)
|
|
(79.3
|
)
|
|
(36.8
|
)
|
|||
Purchases of short-term investments
|
|
—
|
|
|
(59.7
|
)
|
|
(8.2
|
)
|
|||
Purchases of other invested assets
|
|
(28.4
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of fixed maturity securities
|
|
163.0
|
|
|
204.8
|
|
|
249.8
|
|
|||
Proceeds from sale of equity securities
|
|
232.4
|
|
|
70.7
|
|
|
41.2
|
|
|||
Proceeds from maturities and redemptions of fixed maturity securities
|
|
309.9
|
|
|
329.4
|
|
|
215.7
|
|
|||
Proceeds from maturities of short-term investments
|
|
25.0
|
|
|
39.0
|
|
|
20.2
|
|
|||
Net change in unsettled investment purchases and sales
|
|
(24.7
|
)
|
|
22.4
|
|
|
5.8
|
|
|||
Capital expenditures and other
|
|
(12.1
|
)
|
|
(10.2
|
)
|
|
(8.2
|
)
|
|||
Purchase of Cerity Insurance Company, net of cash and cash equivalents acquired
|
|
(16.1
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) investing activities
|
|
49.2
|
|
|
(119.6
|
)
|
|
(112.8
|
)
|
|||
Financing activities
|
|
|
|
|
|
|
|
|
||||
Acquisition of common stock
|
|
(67.5
|
)
|
|
(4.2
|
)
|
|
—
|
|
|||
Cash transactions related to stock-based compensation
|
|
(2.5
|
)
|
|
(1.8
|
)
|
|
3.8
|
|
|||
Dividends paid to stockholders
|
|
(28.9
|
)
|
|
(26.7
|
)
|
|
(19.7
|
)
|
|||
Redemption of notes payable
|
|
(20.0
|
)
|
|
—
|
|
|
(9.9
|
)
|
|||
Payments on capital leases
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|||
Net cash used in financing activities
|
|
(119.1
|
)
|
|
(32.9
|
)
|
|
(26.0
|
)
|
|||
Net increase in cash, cash equivalents, and restricted cash
|
|
53.2
|
|
|
27.7
|
|
|
3.5
|
|
|||
Cash, cash equivalents, and restricted cash at the beginning of the period
|
|
102.0
|
|
|
74.3
|
|
|
70.8
|
|
|||
Cash, cash equivalents, and restricted cash at the end of the period
|
|
$
|
155.2
|
|
|
$
|
102.0
|
|
|
$
|
74.3
|
|
|
|
|
|
|
|
|
Non-cash transactions
|
|
|
|
|
|
|
||||||
Financed property and equipment purchases
|
|
$
|
0.7
|
|
|
$
|
0.3
|
|
|
$
|
0.4
|
|
|
|
As of
|
|
As of
|
||||
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
|
|
(in millions)
|
||||||
Cash and cash equivalents
|
|
$
|
154.9
|
|
|
$
|
101.4
|
|
Restricted cash and cash equivalents supporting reinsurance obligations
|
|
0.3
|
|
|
0.6
|
|
||
Total cash, cash equivalents and restricted cash
|
|
$
|
155.2
|
|
|
$
|
102.0
|
|
December 31, 2019
|
|
2019
|
|
2018
|
||||||||||||||||||||
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net
Carrying
Value
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net
Carrying
Value
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
State licenses
|
$
|
13.5
|
|
|
$
|
—
|
|
|
$
|
13.5
|
|
|
$
|
7.7
|
|
|
$
|
—
|
|
|
$
|
7.7
|
|
Insurance relationships
|
9.4
|
|
|
$
|
(9.4
|
)
|
|
—
|
|
|
9.4
|
|
|
$
|
(9.4
|
)
|
|
—
|
|
||||
Other
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
23.0
|
|
|
$
|
(9.4
|
)
|
|
$
|
13.6
|
|
|
$
|
17.1
|
|
|
$
|
(9.4
|
)
|
|
$
|
7.7
|
|
|
2019
|
|
2018
|
||||||||||||
|
Carrying Value
|
|
Estimated Fair Value
|
|
Carrying Value
|
|
Estimated Fair Value
|
||||||||
Financial assets
|
(in millions)
|
||||||||||||||
Total investments at fair value (Note 5)
|
$
|
2,742.6
|
|
|
$
|
2,742.6
|
|
|
$
|
2,721.3
|
|
|
$
|
2,721.3
|
|
Cash and cash equivalents
|
154.9
|
|
|
154.9
|
|
|
101.4
|
|
|
101.4
|
|
||||
Restricted cash and cash equivalents
|
0.3
|
|
|
0.3
|
|
|
0.6
|
|
|
0.6
|
|
||||
Financial liabilities
|
|
|
|
|
|
|
|
||||||||
Notes payable (Note 10)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20.0
|
|
|
$
|
23.5
|
|
•
|
Level 1 - Inputs are unadjusted quoted market prices for identical assets or liabilities in active markets at the measurement date.
|
•
|
Level 2 - Inputs other than Level 1 prices that are observable for similar assets or liabilities through corroboration with market data at the measurement date.
|
•
|
Level 3 - Inputs that are unobservable that reflect management's best estimate of what willing market participants would use in pricing the assets or liabilities at the measurement date.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Fixed maturity securities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasuries
|
$
|
—
|
|
|
$
|
85.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
106.4
|
|
|
$
|
—
|
|
U.S. Agencies
|
—
|
|
|
2.9
|
|
|
—
|
|
|
—
|
|
|
11.4
|
|
|
—
|
|
||||||
States and municipalities
|
—
|
|
|
484.5
|
|
|
—
|
|
|
—
|
|
|
528.0
|
|
|
—
|
|
||||||
Corporate securities
|
—
|
|
|
1,079.0
|
|
|
—
|
|
|
—
|
|
|
1,090.4
|
|
|
—
|
|
||||||
Residential mortgage-backed securities
|
—
|
|
|
480.4
|
|
|
—
|
|
|
—
|
|
|
451.5
|
|
|
—
|
|
||||||
Commercial mortgage-backed securities
|
—
|
|
|
110.6
|
|
|
—
|
|
|
—
|
|
|
94.3
|
|
|
—
|
|
||||||
Asset-backed securities
|
—
|
|
|
61.2
|
|
|
—
|
|
|
—
|
|
|
64.5
|
|
|
—
|
|
||||||
Other securities
|
—
|
|
|
181.7
|
|
|
—
|
|
|
—
|
|
|
149.9
|
|
|
—
|
|
||||||
Total fixed maturity securities
|
$
|
—
|
|
|
$
|
2,485.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,496.4
|
|
|
$
|
—
|
|
Equity securities at fair value
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Industrial and miscellaneous
|
$
|
216.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
174.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other
|
40.3
|
|
|
—
|
|
|
—
|
|
|
25.1
|
|
|
—
|
|
|
—
|
|
||||||
Total equity securities at fair value
|
$
|
256.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
199.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25.0
|
|
|
$
|
—
|
|
Total investments at fair value
|
$
|
256.7
|
|
|
$
|
2,485.9
|
|
|
$
|
—
|
|
|
$
|
199.9
|
|
|
$
|
2,521.4
|
|
|
$
|
—
|
|
|
Level 3 Securities
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Beginning balance, January 1
|
$
|
—
|
|
|
$
|
4.7
|
|
Transfers out of Level 3(1)
|
—
|
|
|
(4.7
|
)
|
||
Purchases and sales, net
|
—
|
|
|
—
|
|
||
Ending balance, December 31
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
The transfer during the year ended December 31, 2018 was the result of adoption of ASU 2016-01, which specified that FHLB stock shall be carried at cost and is no longer measured at fair value.
|
|
December 31, 2019
|
|
December 31, 2018
|
||
|
|
||||
Cash equivalents measured at NAV
|
14.4
|
|
|
57.5
|
|
Other invested assets carried at NAV
|
9.1
|
|
|
—
|
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
At December 31, 2019
|
|
(in millions)
|
||||||||||||||
Fixed maturity securities
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasuries
|
|
$
|
83.7
|
|
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
85.6
|
|
U.S. Agencies
|
|
2.8
|
|
|
0.1
|
|
|
—
|
|
|
2.9
|
|
||||
States and municipalities
|
|
458.2
|
|
|
26.3
|
|
|
—
|
|
|
484.5
|
|
||||
Corporate securities
|
|
1,038.6
|
|
|
40.4
|
|
|
—
|
|
|
1,079.0
|
|
||||
Residential mortgage-backed securities
|
|
471.7
|
|
|
9.4
|
|
|
(0.7
|
)
|
|
480.4
|
|
||||
Commercial mortgage-backed securities
|
|
107.4
|
|
|
3.2
|
|
|
—
|
|
|
110.6
|
|
||||
Asset-backed securities
|
|
60.4
|
|
|
0.9
|
|
|
(0.1
|
)
|
|
61.2
|
|
||||
Other securities(1)
|
|
180.5
|
|
|
1.6
|
|
|
(0.4
|
)
|
|
181.7
|
|
||||
Total fixed maturity securities
|
|
2,403.3
|
|
|
83.8
|
|
|
(1.2
|
)
|
|
2,485.9
|
|
||||
Total AFS investments
|
|
$
|
2,403.3
|
|
|
$
|
83.8
|
|
|
$
|
(1.2
|
)
|
|
$
|
2,485.9
|
|
|
|
|
|
|
|
|
|
|
||||||||
At December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasuries
|
|
$
|
106.7
|
|
|
$
|
0.9
|
|
|
$
|
(1.2
|
)
|
|
$
|
106.4
|
|
U.S. Agencies
|
|
11.3
|
|
|
0.1
|
|
|
—
|
|
|
11.4
|
|
||||
States and municipalities
|
|
513.4
|
|
|
15.3
|
|
|
(0.7
|
)
|
|
528.0
|
|
||||
Corporate securities
|
|
1,106.2
|
|
|
5.8
|
|
|
(21.6
|
)
|
|
1,090.4
|
|
||||
Residential mortgage-backed securities
|
|
459.1
|
|
|
2.2
|
|
|
(9.8
|
)
|
|
451.5
|
|
||||
Commercial mortgage-backed securities
|
|
96.7
|
|
|
0.1
|
|
|
(2.5
|
)
|
|
94.3
|
|
||||
Asset-backed securities
|
|
64.7
|
|
|
0.2
|
|
|
(0.4
|
)
|
|
64.5
|
|
||||
Other securities(1)
|
|
155.6
|
|
|
—
|
|
|
(5.7
|
)
|
|
149.9
|
|
||||
Total fixed maturity securities
|
|
2,513.7
|
|
|
24.6
|
|
|
(41.9
|
)
|
|
2,496.4
|
|
||||
Short-term investments
|
|
25.0
|
|
|
—
|
|
|
—
|
|
|
25.0
|
|
||||
Total AFS investments
|
|
$
|
2,538.7
|
|
|
$
|
24.6
|
|
|
$
|
(41.9
|
)
|
|
$
|
2,521.4
|
|
(1)
|
Other securities within fixed maturity securities consist of bank loans, which are classified as AFS and reported at fair value.
|
|
|
Cost
|
|
Estimated Fair Value
|
||||
|
|
(in millions)
|
||||||
At December 31, 2019
|
|
|
|
|
||||
Equity securities at fair value
|
|
|
|
|
||||
Industrial and miscellaneous
|
|
$
|
129.1
|
|
|
$
|
216.4
|
|
Other
|
|
26.5
|
|
|
40.3
|
|
||
Total equity securities at fair value
|
|
$
|
155.6
|
|
|
$
|
256.7
|
|
|
|
|
|
|
||||
At December 31, 2018
|
|
|
|
|
||||
Equity securities at fair value
|
|
|
|
|
||||
Industrial and miscellaneous
|
|
$
|
114.6
|
|
|
$
|
174.8
|
|
Other
|
|
17.3
|
|
|
25.1
|
|
||
Total equity securities at fair value
|
|
$
|
131.9
|
|
|
$
|
199.9
|
|
|
|
Amortized Cost
|
|
Estimated Fair Value
|
||||
|
|
(in millions)
|
||||||
Due in one year or less
|
|
$
|
170.2
|
|
|
$
|
171.5
|
|
Due after one year through five years
|
|
758.2
|
|
|
781.5
|
|
||
Due after five years through ten years
|
|
778.6
|
|
|
819.3
|
|
||
Due after ten years
|
|
56.8
|
|
|
61.4
|
|
||
Mortgage and asset-backed securities
|
|
639.5
|
|
|
652.2
|
|
||
Total
|
|
$
|
2,403.3
|
|
|
$
|
2,485.9
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||
|
|
Estimated Fair Value
|
|
Gross Unrealized Losses
|
|
Number of Issues
|
|
Estimated Fair Value
|
|
Gross Unrealized Losses
|
|
Number of Issues
|
||||||||||
Less than 12 months:
|
|
(dollars in millions)
|
||||||||||||||||||||
Fixed maturity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasuries
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
12.2
|
|
|
$
|
(0.1
|
)
|
|
7
|
|
States and municipalities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70.1
|
|
|
(0.7
|
)
|
|
21
|
|
||||
Corporate securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
624.4
|
|
|
(13.4
|
)
|
|
205
|
|
||||
Residential mortgage-backed securities
|
|
56.9
|
|
|
(0.2
|
)
|
|
29
|
|
|
156.9
|
|
|
(2.5
|
)
|
|
59
|
|
||||
Commercial mortgage-backed securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30.9
|
|
|
(0.5
|
)
|
|
13
|
|
||||
Asset-backed securities
|
|
10.1
|
|
|
(0.1
|
)
|
|
6
|
|
|
25.1
|
|
|
(0.2
|
)
|
|
18
|
|
||||
Other securities
|
|
15.2
|
|
|
(0.3
|
)
|
|
64
|
|
|
137.1
|
|
|
(5.7
|
)
|
|
215
|
|
||||
Total fixed maturity securities
|
|
82.2
|
|
|
(0.6
|
)
|
|
99
|
|
|
1,056.7
|
|
|
(23.1
|
)
|
|
538
|
|
||||
Total less than 12 months
|
|
$
|
82.2
|
|
|
$
|
(0.6
|
)
|
|
99
|
|
|
$
|
1,056.7
|
|
|
$
|
(23.1
|
)
|
|
538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
12 months or greater:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasuries
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
72.7
|
|
|
$
|
(1.1
|
)
|
|
25
|
|
Corporate securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
193.7
|
|
|
(8.2
|
)
|
|
69
|
|
||||
Residential mortgage-backed securities
|
|
40.0
|
|
|
(0.5
|
)
|
|
19
|
|
|
199.8
|
|
|
(7.3
|
)
|
|
72
|
|
||||
Commercial mortgage-backed securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55.0
|
|
|
(2.0
|
)
|
|
22
|
|
||||
Asset-backed securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.5
|
|
|
(0.2
|
)
|
|
17
|
|
||||
Other securities
|
|
5.9
|
|
|
(0.1
|
)
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total fixed maturity securities
|
|
45.9
|
|
|
(0.6
|
)
|
|
38
|
|
|
537.7
|
|
|
(18.8
|
)
|
|
205
|
|
||||
Total 12 months or greater
|
|
$
|
45.9
|
|
|
$
|
(0.6
|
)
|
|
38
|
|
|
$
|
537.7
|
|
|
$
|
(18.8
|
)
|
|
205
|
|
|
|
Gross Realized Gains
|
|
Gross Realized Losses
|
|
Change in Net Unrealized Gains (Losses)
|
|
Changes in Fair Value Reflected in Earnings
|
|
Changes in Fair Value Reflected in AOCI, before tax
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities
|
|
$
|
5.2
|
|
|
$
|
(1.3
|
)
|
|
$
|
99.9
|
|
|
$
|
3.9
|
|
|
$
|
99.9
|
|
Equity securities
|
|
17.8
|
|
|
(4.4
|
)
|
|
33.1
|
|
|
46.5
|
|
|
—
|
|
|||||
Other invested assets
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
0.7
|
|
|
—
|
|
|||||
Total investments
|
|
$
|
23.0
|
|
|
$
|
(5.7
|
)
|
|
$
|
133.7
|
|
|
$
|
51.1
|
|
|
$
|
99.9
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities
|
|
$
|
2.2
|
|
|
$
|
(4.0
|
)
|
|
$
|
(59.7
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
(59.7
|
)
|
Equity securities
|
|
15.9
|
|
|
(1.6
|
)
|
|
(25.6
|
)
|
|
(11.3
|
)
|
|
—
|
|
|||||
Total investments
|
|
$
|
18.1
|
|
|
$
|
(5.6
|
)
|
|
$
|
(85.3
|
)
|
|
$
|
(13.1
|
)
|
|
$
|
(59.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities
|
|
$
|
4.7
|
|
|
$
|
(2.2
|
)
|
|
$
|
3.9
|
|
|
$
|
2.5
|
|
|
$
|
3.9
|
|
Equity securities
|
|
9.3
|
|
|
(4.4
|
)
|
|
17.5
|
|
|
4.9
|
|
|
17.5
|
|
|||||
Total investments
|
|
$
|
14.0
|
|
|
$
|
(6.6
|
)
|
|
$
|
21.4
|
|
|
$
|
7.4
|
|
|
$
|
21.4
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
Fixed maturity securities
|
|
$
|
81.9
|
|
|
$
|
76.0
|
|
|
$
|
70.4
|
|
Equity securities
|
|
7.9
|
|
|
6.5
|
|
|
6.9
|
|
|||
Other invested assets
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|||
Short-term investments
|
|
—
|
|
|
0.3
|
|
|
0.1
|
|
|||
Cash equivalents and restricted cash
|
|
1.7
|
|
|
2.0
|
|
|
0.6
|
|
|||
Gross investment income
|
|
92.7
|
|
|
84.8
|
|
|
78.0
|
|
|||
Investment expenses
|
|
(4.6
|
)
|
|
(3.6
|
)
|
|
(3.4
|
)
|
|||
Net investment income
|
|
$
|
88.1
|
|
|
$
|
81.2
|
|
|
$
|
74.6
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Furniture and equipment
|
$
|
2.5
|
|
|
$
|
3.3
|
|
Leasehold improvements
|
6.0
|
|
|
3.2
|
|
||
Computers and software
|
60.3
|
|
|
61.9
|
|
||
Automobiles
|
1.1
|
|
|
1.1
|
|
||
Property and equipment, gross
|
69.9
|
|
|
69.5
|
|
||
Accumulated depreciation
|
(48.0
|
)
|
|
(51.3
|
)
|
||
Property and equipment, net
|
$
|
21.9
|
|
|
$
|
18.2
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Current tax expense:
|
(in millions)
|
||||||||||
Federal
|
$
|
26.3
|
|
|
$
|
13.2
|
|
|
$
|
17.9
|
|
State
|
1.8
|
|
|
0.6
|
|
|
0.7
|
|
|||
Total current tax expense
|
28.1
|
|
|
13.8
|
|
|
18.6
|
|
|||
Deferred federal tax expense:
|
|
|
|
|
|
||||||
Impact of tax Enactment
|
—
|
|
|
(0.4
|
)
|
|
7.0
|
|
|||
Other
|
8.6
|
|
|
14.8
|
|
|
17.2
|
|
|||
Total deferred federal tax expense
|
8.6
|
|
|
14.4
|
|
|
24.2
|
|
|||
Income tax expense
|
$
|
36.7
|
|
|
$
|
28.2
|
|
|
$
|
42.8
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in millions)
|
||||||||||
Expense computed at statutory rate
|
$
|
40.7
|
|
|
$
|
35.6
|
|
|
$
|
50.4
|
|
Tax-advantaged investment income
|
(2.4
|
)
|
|
(2.9
|
)
|
|
(7.6
|
)
|
|||
LPT deferred gain amortization
|
(2.3
|
)
|
|
(2.6
|
)
|
|
(4.0
|
)
|
|||
Stock based compensation
|
(0.9
|
)
|
|
(1.4
|
)
|
|
(3.4
|
)
|
|||
LPT Reserve Adjustment
|
(0.4
|
)
|
|
(0.5
|
)
|
|
—
|
|
|||
Impact of tax Enactment
|
—
|
|
|
(0.4
|
)
|
|
7.0
|
|
|||
Other
|
2.0
|
|
|
0.4
|
|
|
0.4
|
|
|||
Income tax expense
|
$
|
36.7
|
|
|
$
|
28.2
|
|
|
$
|
42.8
|
|
|
2019
|
|
2018
|
||||||||||||
|
Deferred Tax
|
|
Deferred Tax
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
|
(in millions)
|
||||||||||||||
Unrealized capital gains, net
|
$
|
—
|
|
|
$
|
38.7
|
|
|
$
|
—
|
|
|
$
|
10.6
|
|
Deferred policy acquisition costs
|
—
|
|
|
10.2
|
|
|
—
|
|
|
10.3
|
|
||||
Intangible assets
|
—
|
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
||||
Loss reserve discounting for tax reporting
|
30.9
|
|
|
—
|
|
|
31.1
|
|
|
—
|
|
||||
Unearned premiums
|
13.2
|
|
|
—
|
|
|
13.3
|
|
|
—
|
|
||||
Allowance for bad debt
|
1.0
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
||||
Stock-based compensation
|
3.4
|
|
|
—
|
|
|
2.9
|
|
|
—
|
|
||||
Accrued liabilities
|
4.4
|
|
|
—
|
|
|
4.9
|
|
|
—
|
|
||||
Other
|
2.1
|
|
|
7.1
|
|
|
2.6
|
|
|
6.8
|
|
||||
Total
|
$
|
55.0
|
|
|
$
|
57.6
|
|
|
$
|
56.2
|
|
|
$
|
29.3
|
|
Deferred income tax asset (liability), net
|
$
|
(2.6
|
)
|
|
|
|
$
|
26.9
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in millions)
|
||||||||||
Unpaid losses and LAE at beginning of period
|
$
|
2,207.9
|
|
|
$
|
2,266.1
|
|
|
$
|
2,301.0
|
|
Less reinsurance recoverable on unpaid losses and LAE
|
504.4
|
|
|
537.0
|
|
|
580.0
|
|
|||
Net unpaid losses and LAE at beginning of period
|
1,703.5
|
|
|
1,729.1
|
|
|
1,721.0
|
|
|||
Losses and LAE, net of reinsurance, incurred during the period related to:
|
|
|
|
|
|
||||||
Current year
|
456.1
|
|
|
457.5
|
|
|
447.3
|
|
|||
Prior years
|
(77.5
|
)
|
|
(66.2
|
)
|
|
(18.5
|
)
|
|||
Total net losses and LAE incurred during the period
|
378.6
|
|
|
391.3
|
|
|
428.8
|
|
|||
Paid losses and LAE, net of reinsurance, related to:
|
|
|
|
|
|
||||||
Current year
|
106.6
|
|
|
93.0
|
|
|
76.9
|
|
|||
Prior years
|
315.2
|
|
|
323.9
|
|
|
343.8
|
|
|||
Total net paid losses and LAE during the period
|
421.8
|
|
|
416.9
|
|
|
420.7
|
|
|||
Ending unpaid losses and LAE, net of reinsurance
|
1,660.3
|
|
|
1,703.5
|
|
|
1,729.1
|
|
|||
Reinsurance recoverable on unpaid losses and LAE
|
532.5
|
|
|
504.4
|
|
|
537.0
|
|
|||
Unpaid losses and LAE at end of period
|
$
|
2,192.8
|
|
|
$
|
2,207.9
|
|
|
$
|
2,266.1
|
|
|
Incurred Losses and LAE, Net of Reinsurance
|
|
|
|
||||||||||||||||||||||||||||||||
|
Years Ended December 31,
|
|
As of December 31, 2019
|
|||||||||||||||||||||||||||||||||
Accident Year
|
2010(1)
|
2011(1)
|
2012(1)
|
2013(1)
|
2014(1)
|
2015(1)
|
2016(1)
|
2017(1)
|
2018(1)
|
2019
|
|
IBNR
|
Cumulative number of reported claims
|
|||||||||||||||||||||||
|
(in millions, except claims counts)
|
|||||||||||||||||||||||||||||||||||
2010
|
$
|
204.9
|
|
$
|
224.4
|
|
$
|
228.1
|
|
$
|
246.1
|
|
$
|
250.2
|
|
$
|
262.0
|
|
$
|
259.9
|
|
$
|
258.8
|
|
$
|
255.2
|
|
$
|
255.3
|
|
|
$
|
15.8
|
|
18,541
|
|
2011
|
|
253.7
|
|
267.3
|
|
272.0
|
|
277.4
|
|
296.3
|
|
292.6
|
|
288.8
|
|
287.8
|
|
285.6
|
|
|
20.0
|
|
19,582
|
|
||||||||||||
2012
|
|
|
348.8
|
|
359.9
|
|
360.9
|
|
386.4
|
|
388.2
|
|
382.8
|
|
379.8
|
|
378.5
|
|
|
35.2
|
|
26,011
|
|
|||||||||||||
2013
|
|
|
|
452.6
|
|
460.6
|
|
478.6
|
|
472.6
|
|
468.9
|
|
464.6
|
|
459.3
|
|
|
50.2
|
|
28,884
|
|
||||||||||||||
2014
|
|
|
|
|
463.4
|
|
445.8
|
|
432.9
|
|
434.6
|
|
430.5
|
|
424.7
|
|
|
59.3
|
|
28,552
|
|
|||||||||||||||
2015
|
|
|
|
|
|
422.2
|
|
425.8
|
|
423.9
|
|
419.6
|
|
408.7
|
|
|
62.7
|
|
27,199
|
|
||||||||||||||||
2016
|
|
|
|
|
|
|
419.0
|
|
414.6
|
|
395.4
|
|
375.0
|
|
|
66.8
|
|
25,722
|
|
|||||||||||||||||
2017
|
|
|
|
|
|
|
|
412.4
|
|
391.3
|
|
358.3
|
|
|
89.6
|
|
24,953
|
|
||||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
422.5
|
|
424.6
|
|
|
127.4
|
|
27,614
|
|
|||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
422.4
|
|
|
206.2
|
|
28,025
|
|
||||||||||||||||||||
Total
|
$
|
3,792.3
|
|
|
|
|
|
Cumulative Paid Losses and LAE, Net of Reinsurance
|
|||||||||||||||||||||||||||||
|
Years Ended December 31,
|
|||||||||||||||||||||||||||||
Accident Year
|
2010(1)
|
2011(1)
|
2012(1)
|
2013(1)
|
2014(1)
|
2015(1)
|
2016(1)
|
2017(1)
|
2018(1)
|
2019
|
||||||||||||||||||||
|
(in millions)
|
|||||||||||||||||||||||||||||
2010
|
$
|
47.1
|
|
$
|
105.6
|
|
$
|
143.8
|
|
$
|
171.7
|
|
$
|
190.7
|
|
$
|
206.2
|
|
$
|
215.4
|
|
$
|
221.3
|
|
$
|
226.5
|
|
$
|
228.9
|
|
2011
|
|
47.4
|
|
115.1
|
|
162.6
|
|
193.8
|
|
217.5
|
|
230.1
|
|
238.2
|
|
243.8
|
|
248.1
|
|
|||||||||||
2012
|
|
|
58.6
|
|
148.3
|
|
214.2
|
|
261.4
|
|
289.9
|
|
305.0
|
|
316.9
|
|
324.3
|
|
||||||||||||
2013
|
|
|
|
68.5
|
|
184.4
|
|
263.8
|
|
317.4
|
|
346.1
|
|
365.9
|
|
379.3
|
|
|||||||||||||
2014
|
|
|
|
|
65.3
|
|
172.7
|
|
248.9
|
|
297.2
|
|
323.4
|
|
342.1
|
|
||||||||||||||
2015
|
|
|
|
|
|
65.5
|
|
174.5
|
|
246.9
|
|
290.5
|
|
311.2
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
65.6
|
|
166.8
|
|
227.7
|
|
261.2
|
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
63.5
|
|
160.2
|
|
215.7
|
|
|||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
77.9
|
|
189.9
|
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
88.8
|
|
|||||||||||||||||||
Total
|
$
|
2,589.5
|
|
|||||||||||||||||||||||||||
All outstanding liabilities for unpaid losses and LAE prior to 2010, net of reinsurance
|
378.9
|
|
||||||||||||||||||||||||||||
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance
|
$
|
1,581.7
|
|
(1)
|
Data presented for these calendar years is required supplementary information, which is unaudited.
|
|
|
December 31, 2019
|
||
|
|
(in millions)
|
||
Liabilities for unpaid losses and LAE, net of reinsurance
|
|
$
|
1,581.7
|
|
Reinsurance recoverable on unpaid losses
|
|
532.5
|
|
|
Unallocated LAE (adjusting and other)
|
|
78.6
|
|
|
Total liability for unpaid losses and LAE
|
|
$
|
2,192.8
|
|
Average Annual Percentage Payout of 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
|
||||||||||
17.7
|
%
|
26.3
|
%
|
17.4
|
%
|
11.7
|
%
|
7.5
|
%
|
5.1
|
%
|
3.6
|
%
|
2.4
|
%
|
1.8
|
%
|
1.0
|
%
|
|
Years Ended December 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
Written
|
|
Earned
|
|
Written
|
|
Earned
|
|
Written
|
|
Earned
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Direct premiums
|
$
|
687.4
|
|
|
$
|
691.6
|
|
|
$
|
739.0
|
|
|
$
|
727.2
|
|
|
$
|
719.5
|
|
|
$
|
712.5
|
|
Assumed premiums
|
9.5
|
|
|
9.6
|
|
|
9.9
|
|
|
10.0
|
|
|
10.2
|
|
|
10.0
|
|
||||||
Gross premiums
|
696.9
|
|
|
701.2
|
|
|
748.9
|
|
|
737.2
|
|
|
729.7
|
|
|
722.5
|
|
||||||
Ceded premiums
|
(5.4
|
)
|
|
(5.4
|
)
|
|
(6.1
|
)
|
|
(6.1
|
)
|
|
(6.0
|
)
|
|
(6.0
|
)
|
||||||
Net premiums
|
$
|
691.5
|
|
|
$
|
695.8
|
|
|
$
|
742.8
|
|
|
$
|
731.1
|
|
|
$
|
723.7
|
|
|
$
|
716.5
|
|
Ceded losses and LAE incurred
|
$
|
19.2
|
|
|
|
|
$
|
9.5
|
|
|
|
|
$
|
(0.5
|
)
|
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Dekania Surplus Note, due April 29, 2034
|
$
|
—
|
|
|
$
|
10.0
|
|
Alesco Surplus Note, due December 15, 2034
|
—
|
|
|
10.0
|
|
||
Total
|
$
|
—
|
|
|
$
|
20.0
|
|
|
|
Year Ended December 31,
|
||
|
|
2019
|
||
|
|
(in millions)
|
||
Operating lease expense
|
|
$
|
5.1
|
|
Finance lease expense
|
|
0.2
|
|
|
Total lease expense
|
|
$
|
5.3
|
|
Year
|
|
Operating Leases
|
|
Finance Leases
|
||||
|
|
(in millions)
|
||||||
2020
|
|
$
|
4.8
|
|
|
$
|
0.2
|
|
2021
|
|
3.5
|
|
|
0.2
|
|
||
2022
|
|
2.3
|
|
|
0.1
|
|
||
2023
|
|
2.3
|
|
|
0.1
|
|
||
2024
|
|
2.1
|
|
|
—
|
|
||
Thereafter
|
|
4.6
|
|
|
—
|
|
||
Total lease payments
|
|
19.6
|
|
|
0.6
|
|
||
Less: imputed interest
|
|
(1.8
|
)
|
|
—
|
|
||
Total
|
|
$
|
17.8
|
|
|
$
|
0.6
|
|
|
|
As of December 31,
|
||
|
|
2019
|
||
|
|
(in millions)
|
||
Operating leases:
|
|
|
||
Operating lease right-of-use asset
|
|
$
|
15.9
|
|
Operating lease liability
|
|
17.8
|
|
|
Finance leases:
|
|
|
||
Property and equipment, gross
|
|
1.1
|
|
|
Accumulated depreciation
|
|
(0.5
|
)
|
|
Property and equipment, net
|
|
0.6
|
|
|
Other liabilities
|
|
$
|
0.6
|
|
|
|
Year Ended December 31,
|
||
|
|
2019
|
||
|
|
(in millions)
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows used for operating leases
|
|
$
|
5.1
|
|
Financing cash flows used for finance leases
|
|
0.2
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Stock-based compensation expense related to:
|
(in millions)
|
||||||||||
Stock options
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
0.5
|
|
RSUs
|
2.7
|
|
|
2.5
|
|
|
2.0
|
|
|||
PSUs
|
7.2
|
|
|
6.5
|
|
|
4.3
|
|
|||
Total
|
10.0
|
|
|
9.3
|
|
|
6.8
|
|
|||
Less: related tax benefit
|
2.1
|
|
|
2.0
|
|
|
2.4
|
|
|||
Net stock-based compensation expense
|
$
|
7.9
|
|
|
$
|
7.3
|
|
|
$
|
4.4
|
|
|
Number of Stock Options
|
|
Weighted-Average Price
|
|
Weighted Average Remaining Contractual Life
|
|||
Stock options outstanding at December 31, 2016
|
564,096
|
|
|
$
|
21.04
|
|
|
3.3 years
|
Exercised
|
(307,076
|
)
|
|
19.44
|
|
|
|
|
Forfeited
|
(9,673
|
)
|
|
24.45
|
|
|
|
|
Stock options outstanding at December 31, 2017
|
247,347
|
|
|
22.90
|
|
|
3.4 years
|
|
Exercised
|
(57,091
|
)
|
|
20.17
|
|
|
|
|
Stock options outstanding at December 31, 2018
|
190,256
|
|
|
23.71
|
|
|
2.7 years
|
|
Exercised
|
(31,630
|
)
|
|
26.98
|
|
|
|
|
Forfeited
|
(4,610
|
)
|
|
25.37
|
|
|
|
|
Stock options outstanding at December 31, 2019
|
154,016
|
|
|
23.65
|
|
|
1.7 years
|
|
Exercisable at December 31, 2019
|
144,161
|
|
|
23.37
|
|
|
1.6 years
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in millions)
|
||||||||||
Fair value of stock options vested
|
$
|
0.2
|
|
|
$
|
0.4
|
|
|
$
|
0.6
|
|
Intrinsic value of outstanding stock options
|
2.8
|
|
|
3.4
|
|
|
5.3
|
|
|||
Intrinsic value of exercisable stock options
|
2.7
|
|
|
2.8
|
|
|
3.6
|
|
|
|
Number of RSUs
|
|
Weighted Average Grant Date Fair Value
|
|||
RSUs outstanding at December 31, 2016
|
|
324,384
|
|
|
$
|
22.55
|
|
Granted
|
|
87,276
|
|
|
37.94
|
|
|
Forfeited
|
|
(13,711
|
)
|
|
29.28
|
|
|
Vested
|
|
(102,785
|
)
|
|
22.89
|
|
|
RSUs outstanding at December 31, 2017
|
|
295,164
|
|
|
26.67
|
|
|
Granted
|
|
87,857
|
|
|
40.26
|
|
|
Forfeited
|
|
(3,370
|
)
|
|
33.51
|
|
|
Vested
|
|
(129,351
|
)
|
|
24.53
|
|
|
RSUs outstanding at December 31, 2018
|
|
250,300
|
|
|
32.45
|
|
|
Granted
|
|
90,576
|
|
|
40.60
|
|
|
Forfeited
|
|
(22,232
|
)
|
|
36.39
|
|
|
Vested
|
|
(76,739
|
)
|
|
33.99
|
|
|
RSUs outstanding at December 31, 2019
|
|
241,905
|
|
|
34.70
|
|
|
Vested but unsettled RSUs at December 31, 2019
|
|
73,535
|
|
|
24.75
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in millions)
|
||||||||||
Grant date fair value of RSUs vested
|
$
|
2.6
|
|
|
$
|
3.2
|
|
|
$
|
2.4
|
|
Intrinsic value of RSUs vested
|
3.2
|
|
|
5.5
|
|
|
4.3
|
|
Date of Grant
|
|
Target Number Awarded
|
|
Fair Value on Date of Grant
|
|
Aggregate Fair Value on Date of Grant
|
|||||
|
|
|
|
|
|
(in millions)
|
|||||
March 2017(1)
|
|
97,440
|
|
|
$
|
37.60
|
|
|
$
|
3.7
|
|
March 2018(1)
|
|
96,940
|
|
|
40.30
|
|
|
3.9
|
|
||
March 2019(1)
|
|
95,940
|
|
|
40.54
|
|
|
3.9
|
|
||
August 2019(1)
|
|
9,587
|
|
|
41.72
|
|
|
0.4
|
|
(1)
|
The PSUs awarded in March 2017, 2018, and 2019 and August 2019 were awarded to certain employees of the Company and have a performance period of two years followed by an additional one year vesting period. The PSU awards are subject to certain performance goals with payouts that range from 0% to 200% of the target awards. The values shown in the table represent the aggregate number of PSUs awarded at the target level.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Capital stock and unassigned surplus
|
$
|
658.2
|
|
|
$
|
558.5
|
|
Paid in capital
|
362.8
|
|
|
349.4
|
|
||
Surplus notes
|
—
|
|
|
20.0
|
|
||
Total statutory surplus
|
$
|
1,021.0
|
|
|
$
|
927.9
|
|
|
Years Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Net unrealized gains (losses) on investments, before taxes
|
$
|
82.6
|
|
|
$
|
(17.3
|
)
|
Deferred tax (expense) benefit on net unrealized gains (losses)
|
(17.3
|
)
|
|
3.6
|
|
||
Total accumulated other comprehensive income (loss)
|
$
|
65.3
|
|
|
$
|
(13.7
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in millions, except share data)
|
||||||||||
Net income
|
$
|
157.1
|
|
|
$
|
141.3
|
|
|
$
|
101.2
|
|
Weighted average number of shares outstanding–basic
|
32,120,578
|
|
|
32,884,828
|
|
|
32,501,576
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock options
|
77,482
|
|
|
97,810
|
|
|
208,602
|
|
|||
PSUs
|
285,550
|
|
|
268,030
|
|
|
271,738
|
|
|||
RSUs
|
56,108
|
|
|
60,669
|
|
|
78,844
|
|
|||
Dilutive potential shares
|
419,140
|
|
|
426,509
|
|
|
559,184
|
|
|||
Weighted average number of shares outstanding–diluted
|
32,539,718
|
|
|
33,311,337
|
|
|
33,060,760
|
|
|
|
Employers
|
|
Cerity
|
|
Corporate and Other
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
|
$
|
696.8
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
696.9
|
|
Net premiums written
|
|
691.4
|
|
|
0.1
|
|
|
—
|
|
|
691.5
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net premiums earned
|
|
695.8
|
|
|
—
|
|
|
—
|
|
|
695.8
|
|
||||
Net investment income
|
|
84.1
|
|
|
0.3
|
|
|
3.7
|
|
|
88.1
|
|
||||
Net realized and unrealized gains on investments
|
|
47.7
|
|
|
0.1
|
|
|
3.3
|
|
|
51.1
|
|
||||
Other income
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
||||
Total revenues
|
|
828.5
|
|
|
0.4
|
|
|
7.0
|
|
|
835.9
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||
Losses and loss adjustment expenses
|
|
378.6
|
|
|
—
|
|
|
(12.7
|
)
|
|
365.9
|
|
||||
Commission expense
|
|
88.1
|
|
|
—
|
|
|
—
|
|
|
88.1
|
|
||||
Underwriting and general and administrative expenses
|
|
153.2
|
|
|
16.0
|
|
|
18.3
|
|
|
187.5
|
|
||||
Interest and financing expenses
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
||||
Total expenses
|
|
620.5
|
|
|
16.0
|
|
|
5.6
|
|
|
642.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||
Net income (loss) before income taxes
|
|
$
|
208.0
|
|
|
$
|
(15.6
|
)
|
|
$
|
1.4
|
|
|
$
|
193.8
|
|
|
|
Employers
|
|
Cerity
|
|
Corporate and Other
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
|
$
|
748.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
748.9
|
|
Net premiums written
|
|
742.8
|
|
|
—
|
|
|
—
|
|
|
742.8
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net premiums earned
|
|
731.1
|
|
|
—
|
|
|
—
|
|
|
731.1
|
|
||||
Net investment income
|
|
78.6
|
|
|
—
|
|
|
2.6
|
|
|
81.2
|
|
||||
Net realized and unrealized (losses) gains on investments
|
|
(13.9
|
)
|
|
—
|
|
|
0.8
|
|
|
(13.1
|
)
|
||||
Other income
|
|
1.0
|
|
|
0.2
|
|
|
—
|
|
|
1.2
|
|
||||
Total revenues
|
|
796.8
|
|
|
0.2
|
|
|
3.4
|
|
|
800.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||
Losses and loss adjustment expenses
|
|
391.3
|
|
|
—
|
|
|
(14.6
|
)
|
|
376.7
|
|
||||
Commission expense
|
|
94.2
|
|
|
—
|
|
|
—
|
|
|
94.2
|
|
||||
Underwriting and general and administrative expenses
|
|
135.0
|
|
|
5.9
|
|
|
17.6
|
|
|
158.5
|
|
||||
Interest and financing expenses
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
||||
Total expenses
|
|
622.0
|
|
|
5.9
|
|
|
3.0
|
|
|
630.9
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||
Net income (loss) before income taxes
|
|
$
|
174.8
|
|
|
$
|
(5.7
|
)
|
|
$
|
0.4
|
|
|
$
|
169.5
|
|
|
|
Employers
|
|
Cerity
|
|
Corporate and Other
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
|
$
|
729.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
729.7
|
|
Net premiums written
|
|
723.7
|
|
|
—
|
|
|
—
|
|
|
723.7
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net premiums earned
|
|
716.5
|
|
|
—
|
|
|
—
|
|
|
716.5
|
|
||||
Net investment income
|
|
73.3
|
|
|
—
|
|
|
1.3
|
|
|
74.6
|
|
||||
Net realized and unrealized gains on investments
|
|
7.4
|
|
|
—
|
|
|
—
|
|
|
7.4
|
|
||||
Gain on redemption of notes payable
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
||||
Other income
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||
Total revenues
|
|
800.1
|
|
|
—
|
|
|
1.3
|
|
|
801.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||
Losses and loss adjustment expenses
|
|
428.8
|
|
|
—
|
|
|
(11.6
|
)
|
|
417.2
|
|
||||
Commission expense
|
|
91.4
|
|
|
—
|
|
|
—
|
|
|
91.4
|
|
||||
Underwriting and general and administrative expenses
|
|
123.7
|
|
|
1.1
|
|
|
15.1
|
|
|
139.9
|
|
||||
Interest and financing expenses
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
||||
Other expenses
|
|
7.5
|
|
|
—
|
|
|
—
|
|
|
7.5
|
|
||||
Total expenses
|
|
652.8
|
|
|
1.1
|
|
|
3.5
|
|
|
657.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||
Net income (loss) before income taxes
|
|
$
|
147.3
|
|
|
$
|
(1.1
|
)
|
|
$
|
(2.2
|
)
|
|
$
|
144.0
|
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
State
|
|
In-force Premiums
|
|
Policies
In-force
|
|
In-force Premiums
|
|
Policies
In-force
|
|
In-force Premiums
|
|
Policies
In-force
|
|||||||||
|
|
(dollars in millions)
|
|||||||||||||||||||
California
|
|
$
|
329.8
|
|
|
43,079
|
|
|
$
|
357.1
|
|
|
41,988
|
|
|
$
|
349.4
|
|
|
40,573
|
|
Florida
|
|
36.3
|
|
|
5,822
|
|
|
41.0
|
|
|
5,833
|
|
|
41.8
|
|
|
5,625
|
|
|||
New York
|
|
31.7
|
|
|
5,679
|
|
|
23.9
|
|
|
3,663
|
|
|
12.3
|
|
|
2,038
|
|
|||
Other (43 states and D.C.)
|
|
266.8
|
|
|
44,104
|
|
|
244.2
|
|
|
40,014
|
|
|
223.4
|
|
|
37,258
|
|
|||
Total
|
|
$
|
664.6
|
|
|
98,684
|
|
|
$
|
666.2
|
|
|
91,498
|
|
|
$
|
626.9
|
|
|
85,494
|
|
|
|
2019 Quarters Ended
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
|
|
(in millions, except per share data)
|
||||||||||||||
Net premiums earned
|
|
$
|
174.8
|
|
|
$
|
175.5
|
|
|
$
|
175.8
|
|
|
$
|
169.7
|
|
Net realized and unrealized gains on investments
|
|
23.3
|
|
|
7.4
|
|
|
2.6
|
|
|
17.8
|
|
||||
Losses and loss adjustment expenses
|
|
88.6
|
|
|
86.8
|
|
|
92.9
|
|
|
97.6
|
|
||||
Commission expense
|
|
22.0
|
|
|
23.8
|
|
|
21.9
|
|
|
20.4
|
|
||||
Underwriting and general and administrative expenses
|
|
47.5
|
|
|
43.8
|
|
|
45.3
|
|
|
50.9
|
|
||||
Income tax expense
|
|
10.0
|
|
|
9.0
|
|
|
8.1
|
|
|
9.6
|
|
||||
Net income
|
|
51.8
|
|
|
40.7
|
|
|
32.8
|
|
|
31.8
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
1.60
|
|
|
1.27
|
|
|
1.03
|
|
|
1.00
|
|
||||
Diluted
|
|
1.57
|
|
|
1.25
|
|
|
1.01
|
|
|
0.99
|
|
|
|
2018 Quarters Ended
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
|
|
(in millions, except per share data)
|
||||||||||||||
Net premiums earned
|
|
$
|
176.6
|
|
|
$
|
178.0
|
|
|
$
|
192.9
|
|
|
$
|
183.6
|
|
Net realized and unrealized (losses) gains on investments
|
|
(8.0
|
)
|
|
5.7
|
|
|
15.6
|
|
|
(26.4
|
)
|
||||
Losses and loss adjustment expenses
|
|
95.4
|
|
|
87.8
|
|
|
106.6
|
|
|
86.9
|
|
||||
Commission expense
|
|
23.7
|
|
|
24.5
|
|
|
24.8
|
|
|
21.2
|
|
||||
Underwriting and general and administrative expenses
|
|
39.2
|
|
|
40.1
|
|
|
38.8
|
|
|
40.4
|
|
||||
Income tax expense
|
|
3.8
|
|
|
8.8
|
|
|
10.7
|
|
|
4.9
|
|
||||
Net income
|
|
25.6
|
|
|
42.5
|
|
|
47.6
|
|
|
25.6
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
0.78
|
|
|
1.29
|
|
|
1.45
|
|
|
0.78
|
|
||||
Diluted
|
|
0.77
|
|
|
1.28
|
|
|
1.43
|
|
|
0.77
|
|
Plan Category
|
|
(a)
Number of securities
to be issued upon
exercise of outstanding
options, warrants, and
rights
|
|
(b)
Weighted-average
exercised price of
outstanding options,
warrants, and
rights(4)
|
|
(c)
Number of securities remaining available for further issuance
under compensation plans
(excluding securities
reflected in column (a))
|
||||
Equity compensation plans approved by stockholders(1):
|
|
|
|
|
|
|
||||
Stock options
|
|
154,016
|
|
|
$
|
23.65
|
|
|
3,492,616
|
|
RSUs(2)
|
|
241,905
|
|
|
|
|
3,250,711
|
|
||
PSUs(3)
|
|
599,814
|
|
|
|
|
2,650,897
|
|
||
Equity compensation plans not approved by stockholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
995,735
|
|
|
$
|
23.65
|
|
|
2,650,897
|
|
(1)
|
The Plan is administered by the Compensation Committee of the Board of Directors, which is authorized to grant, at its discretion, awards to officers, employees, non-employee directors, consultants, and independent contractors. The maximum number of common shares currently reserved for grants of awards under the Plan was 5,500,000 shares, prior to reductions for grants made.
|
(2)
|
RSUs are phantom (as opposed to actual) shares of common stock which, depending on the individual award, vest in equal tranches over one- to four-year periods, subject to the recipient maintaining a continuous relationship with the Company through the applicable vesting date.
|
(3)
|
PSUs are phantom (as opposed to actual) shares of common stock, which are subject to a performance period of two years followed by an additional one-year vesting period, subject to the recipient maintaining a continuous relationship with the Company through the applicable vesting date. PSU awards are subject to certain performance goals with payouts that range from 0% to 200% of the target awards. The values shown in the table above represent the aggregate number of PSUs based on the expectation of the Company achieving a 200% of target rate for the 2017 PSUs, a 200% of target rate for the 2018 PSUs, and a 200% of target rate for the 2019 PSUs.
|
(4)
|
Holders of RSUs and PSUs are not entitled to voting rights. Commencing in 2017, employees who were awarded RSUs and PSUs are entitled to receive dividend equivalents for eligible awards, payable in cash, when the underlying award vests and becomes payable. RSUs and PSUs do not require the payment of an exercise price, accordingly, there is no weighted average exercise price for these awards.
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2019 and 2018
|
|
Consolidated Statements of Comprehensive Income for each of the three years ended December 31, 2019, 2018 and 2017
|
|
Consolidated Statements of Stockholders' Equity for each of the three years ended December 31, 2019, 2018 and 2017
|
|
Consolidated Statements of Cash Flows for each of the three years ended December 31, 2019, 2018 and 2017
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Financial Statement Schedules:
|
|
Schedule II. Condensed Financial Information of Registrant
|
|
Schedule VI. Supplemental Information Concerning Property-Casualty Insurance Operations
|
|
|
|
Pursuant to Rule 7-05 of Regulation S-X, Financial Statement Schedules I, III, IV, and V have been omitted as the information to be set forth therein is included in the notes to the audited consolidated financial statements.
|
Employers Holdings, Inc.
|
||||||||
|
||||||||
Condensed Balance Sheets
|
||||||||
|
|
|
|
|
||||
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Assets
|
|
(in millions, except share data)
|
||||||
Investments:
|
|
|
|
|
||||
Investment in subsidiaries
|
|
$
|
1,096.1
|
|
|
$
|
873.8
|
|
Fixed maturity securities at fair value (amortized cost $25.3 at December 31, 2019 and $24.2 at December 31, 2018)
|
|
26.6
|
|
|
24.6
|
|
||
Equity securities at fair value (cost $27.8 at December 31, 2019 and $40.0 at December 31, 2018)
|
|
28.1
|
|
|
38.7
|
|
||
Short-term investments at fair value (amortized cost $25.0 at December 31, 2018)
|
|
—
|
|
|
25.0
|
|
||
Total investments
|
|
1,150.8
|
|
|
962.1
|
|
||
|
|
|
|
|
||||
Cash and cash equivalents
|
|
9.9
|
|
|
41.3
|
|
||
Accrued investment income
|
|
0.2
|
|
|
0.3
|
|
||
Intercompany receivable
|
|
3.5
|
|
|
0.3
|
|
||
Federal income taxes receivable
|
|
3.5
|
|
|
22.7
|
|
||
Deferred income taxes, net
|
|
2.2
|
|
|
—
|
|
||
Other assets
|
|
1.6
|
|
|
0.9
|
|
||
Total assets
|
|
$
|
1,171.7
|
|
|
$
|
1,027.6
|
|
|
|
|
|
|
||||
Liabilities and stockholders' equity
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
|
$
|
5.0
|
|
|
$
|
5.0
|
|
Deferred income taxes, net
|
|
—
|
|
|
0.4
|
|
||
Other liabilities
|
|
0.9
|
|
|
4.0
|
|
||
Total liabilities
|
|
5.9
|
|
|
9.4
|
|
||
|
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
|
||||
Common stock, $0.01 par value; 150,000,000 shares authorized; 57,184,370 and 56,975,675 shares issued and 31,355,378 and 32,765,792 shares outstanding at December 31, 2019 and 2018, respectively
|
|
0.6
|
|
|
0.6
|
|
||
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
396.4
|
|
|
388.8
|
|
||
Retained earnings
|
|
1,158.8
|
|
|
1,030.7
|
|
||
Accumulated other comprehensive income (loss), net of tax
|
|
65.3
|
|
|
(13.7
|
)
|
||
Treasury stock, at cost (25,828,992 shares at December 31, 2019 and 24,209,883 shares at December 31, 2018)
|
|
(455.3
|
)
|
|
(388.2
|
)
|
||
Total stockholders' equity
|
|
1,165.8
|
|
|
1,018.2
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
1,171.7
|
|
|
$
|
1,027.6
|
|
Employers Holdings, Inc.
|
||||||||||||
|
|
|
|
|
|
|||||||
Condensed Statements of Income
|
||||||||||||
|
|
|
|
|
|
|||||||
|
Years Ended December 31,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||
|
(in millions, except per share data)
|
|||||||||||
Revenues
|
|
|
|
|
|
|||||||
Net investment income
|
$
|
3.7
|
|
|
$
|
2.5
|
|
|
$
|
1.3
|
|
|
Net realized and unrealized gains on investments
|
3.3
|
|
|
0.8
|
|
|
—
|
|
||||
Total revenues
|
7.0
|
|
|
3.3
|
|
|
1.3
|
|
||||
|
|
|
|
|
|
|||||||
Expenses
|
|
|
|
|
|
|||||||
Underwriting and general and administrative expenses
|
19.0
|
|
|
17.5
|
|
|
15.2
|
|
||||
Total expenses
|
19.0
|
|
|
17.5
|
|
|
15.2
|
|
||||
|
|
|
|
|
|
|||||||
Loss before income taxes and equity in earnings of subsidiaries
|
(12.0
|
)
|
|
(14.2
|
)
|
|
(13.9
|
)
|
||||
Income tax benefit
|
(2.5
|
)
|
|
(4.3
|
)
|
|
(5.8
|
)
|
||||
Net loss before equity in earnings of subsidiaries
|
(9.5
|
)
|
|
(9.9
|
)
|
|
(8.1
|
)
|
||||
Equity in earnings of subsidiaries
|
166.6
|
|
|
151.2
|
|
|
109.3
|
|
||||
Net income
|
$
|
157.1
|
|
|
$
|
141.3
|
|
|
$
|
101.2
|
|
|
|
|
|
|
|
|
|||||||
Earnings per common share:
|
|
|
|
|
|
|||||||
Basic
|
$
|
4.89
|
|
|
$
|
4.30
|
|
|
$
|
3.11
|
|
|
Diluted
|
$
|
4.83
|
|
|
$
|
4.24
|
|
|
$
|
3.06
|
|
|
|
|
|
|
|
|
|||||||
Cash dividends declared per common share and eligible RSUs and PSUs
|
$
|
0.88
|
|
|
$
|
0.80
|
|
|
$
|
0.60
|
|
Employers Holdings, Inc.
|
|||||||||||
|
|
|
|
|
|
||||||
Condensed Statement of Cash Flows
|
|||||||||||
|
|
|
|
|
|
||||||
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in millions)
|
||||||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
157.1
|
|
|
$
|
141.3
|
|
|
$
|
101.2
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Equity in undistributed earnings of subsidiaries
|
(70.4
|
)
|
|
(66.7
|
)
|
|
(71.5
|
)
|
|||
Net realized and unrealized gains on investments
|
(3.3
|
)
|
|
(0.8
|
)
|
|
—
|
|
|||
Stock-based compensation
|
10.1
|
|
|
9.4
|
|
|
6.8
|
|
|||
Amortization of premium on investments, net
|
—
|
|
|
0.2
|
|
|
0.1
|
|
|||
Deferred income tax expense
|
(2.8
|
)
|
|
14.7
|
|
|
5.3
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts payable, accrued expenses, and other liabilities
|
2.3
|
|
|
0.2
|
|
|
(0.3
|
)
|
|||
Federal income taxes
|
19.2
|
|
|
(18.5
|
)
|
|
5.4
|
|
|||
Other assets
|
(0.7
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Intercompany payables and receivables
|
(3.2
|
)
|
|
(2.2
|
)
|
|
1.8
|
|
|||
Net cash provided by operating activities
|
108.3
|
|
|
77.5
|
|
|
48.7
|
|
|||
|
|
|
|
|
|
||||||
Investing activities
|
|
|
|
|
|
||||||
Purchases of fixed maturity securities
|
(9.3
|
)
|
|
(14.4
|
)
|
|
(30.6
|
)
|
|||
Purchases of equity securities
|
(42.0
|
)
|
|
(40.0
|
)
|
|
—
|
|
|||
Proceeds from sale of equity securities
|
56.0
|
|
|
—
|
|
|
—
|
|
|||
Purchases of short-term securities
|
—
|
|
|
(59.6
|
)
|
|
(7.9
|
)
|
|||
Proceeds from sale of fixed maturity securities
|
4.3
|
|
|
12.0
|
|
|
5.0
|
|
|||
Proceeds from maturities and redemptions of fixed maturity securities
|
3.8
|
|
|
59.2
|
|
|
4.5
|
|
|||
Proceeds from maturities of short-term investments
|
25.0
|
|
|
—
|
|
|
—
|
|
|||
Net change in unsettled investment purchases and sales
|
(5.0
|
)
|
|
3.9
|
|
|
—
|
|
|||
Capital contributions to subsidiaries
|
(73.6
|
)
|
|
(4.2
|
)
|
|
(5.6
|
)
|
|||
Net cash used in investing activities
|
(40.8
|
)
|
|
(43.1
|
)
|
|
(34.6
|
)
|
|||
|
|
|
|
|
|
||||||
Financing activities
|
|
|
|
|
|
||||||
Acquisition of common stock
|
(67.5
|
)
|
|
(4.2
|
)
|
|
—
|
|
|||
Cash transactions related to stock-based compensation
|
(2.5
|
)
|
|
(1.8
|
)
|
|
3.8
|
|
|||
Dividends paid to stockholders
|
(28.9
|
)
|
|
(26.7
|
)
|
|
(19.7
|
)
|
|||
Net cash used in financing activities
|
(98.9
|
)
|
|
(32.7
|
)
|
|
(15.9
|
)
|
|||
|
|
|
|
|
|
||||||
Net (decrease) increase in cash and cash equivalents
|
(31.4
|
)
|
|
1.7
|
|
|
(1.8
|
)
|
|||
Cash and cash equivalents at the beginning of the period
|
41.3
|
|
|
39.6
|
|
|
41.4
|
|
|||
Cash and cash equivalents at the end of the period
|
$
|
9.9
|
|
|
$
|
41.3
|
|
|
$
|
39.6
|
|
Schedule VI. Supplemental Information Concerning Property - Casualty Insurance Operations
|
||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Employers Holdings, Inc. and Subsidiaries
|
||||||||||||||||||||||||||||||||||||||||
Consolidated Supplemental Information Concerning Property and Casualty Insurance Operations
|
||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Year
Ended
|
|
Deferred
Policy
Acquisition
Costs
|
|
Reserves For
Unpaid
Losses And
LAE
|
|
Unearned
Premiums
|
|
Net
Premiums
Earned
|
|
Net Investment
Income
|
|
Losses and
LAE Related
to Current
Years
|
|
Losses and
LAE Related to Prior
Years (including LPT Amortization and Adj)
|
|
Amortization
of Deferred
Policy
Acquisition Costs
|
|
Paid Losses And LAE (including LPT Amortization and Adj)
|
|
Net
Premiums
Written
|
||||||||||||||||||||
(in millions)
|
||||||||||||||||||||||||||||||||||||||||
Employers Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
2019
|
|
$
|
47.9
|
|
|
$
|
2,145.2
|
|
|
$
|
337.0
|
|
|
$
|
695.8
|
|
|
$
|
84.1
|
|
|
$
|
456.1
|
|
|
$
|
(77.5
|
)
|
|
$
|
107.7
|
|
|
$
|
421.8
|
|
|
$
|
691.4
|
|
2018
|
|
48.2
|
|
|
2,207.9
|
|
|
336.3
|
|
|
731.1
|
|
|
78.6
|
|
|
457.5
|
|
|
(66.2
|
)
|
|
112.0
|
|
|
416.9
|
|
|
742.8
|
|
||||||||||
2017
|
|
45.8
|
|
|
2,266.1
|
|
|
318.3
|
|
|
716.5
|
|
|
73.3
|
|
|
447.3
|
|
|
(18.5
|
)
|
|
108.2
|
|
|
420.7
|
|
|
723.7
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cerity Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
2019
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Corporate & Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
2019
|
|
$
|
—
|
|
|
$
|
47.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
(12.7
|
)
|
|
$
|
—
|
|
|
$
|
(12.7
|
)
|
|
$
|
—
|
|
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
(14.6
|
)
|
|
—
|
|
|
(14.6
|
)
|
|
—
|
|
||||||||||
2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
(11.6
|
)
|
|
—
|
|
|
(11.6
|
)
|
|
—
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
Included Herewith
|
|
Incorporated by Reference Herein
|
|||||||
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|||||||
3.1
|
|
|
|
|
|
10-K
|
|
001-33245
|
|
3.1
|
|
February 28, 2019
|
|
3.2
|
|
|
|
|
|
8-K
|
|
001-33245
|
|
3.1
|
|
June 13, 2018
|
|
4.1
|
|
|
|
|
|
S-1/A
|
|
333-139092
|
|
4.1
|
|
January 18, 2007
|
|
4.2
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
10.1
|
|
|
|
|
|
S-1/A
|
|
333-139092
|
|
10.1
|
|
January 18, 2007
|
|
10.2
|
|
|
|
|
|
S-1/A
|
|
333-139092
|
|
10.2
|
|
January 18, 2007
|
|
10.3
|
|
|
|
|
|
10-Q
|
|
001-33245
|
|
10.1
|
|
April 25, 2019
|
|
10.4
|
|
|
|
|
|
10-Q
|
|
001-33245
|
|
10.2
|
|
April 25, 2019
|
|
10.5
|
|
|
|
|
|
10-Q
|
|
001-33245
|
|
10.3
|
|
April 25, 2019
|
|
10.6
|
|
|
|
|
|
8-K
|
|
001-33245
|
|
10.4
|
|
March 15, 2018
|
10.7
|
|
|
|
|
|
8-K/A
|
|
001-33245
|
|
10.1
|
|
May 24, 2018
|
|
10.8
|
|
|
|
|
|
10-Q
|
|
001-33245
|
|
10.11
|
|
October 25, 2018
|
|
*10.9
|
|
|
|
|
|
10-Q
|
|
001-33245
|
|
10.1
|
|
August 7, 2009
|
|
*10.10
|
|
|
|
|
|
8-K
|
|
001-33245
|
|
10.2
|
|
June 30, 2017
|
|
*10.11
|
|
|
|
|
|
8-K
|
|
001-33245
|
|
10.1
|
|
November 8, 2018
|
|
*10.12
|
|
|
|
|
|
8-K
|
|
001-33245
|
|
10.1
|
|
November 8, 2018
|
|
*10.13
|
|
|
|
|
|
10-K
|
|
001-33245
|
|
10.20
|
|
February 28, 2019
|
|
*10.14
|
|
|
|
|
|
8-K
|
|
001-33245
|
|
10.1
|
|
April 26, 2019
|
|
*10.15
|
|
|
|
|
|
10-Q
|
|
001-33245
|
|
10.1
|
|
July 29, 2019
|
|
*10.16
|
|
|
|
|
|
10-Q
|
|
001-33245
|
|
10.1
|
|
October 25, 2019
|
|
*10.17
|
|
|
|
|
|
10-Q
|
|
001-33245
|
|
10.2
|
|
April 27, 2017
|
|
*10.18
|
|
|
|
|
|
10-Q
|
|
001-33245
|
|
10.3
|
|
April 27, 2017
|
|
*10.19
|
|
|
|
|
|
10-Q
|
|
001-33245
|
|
10.3
|
|
April 30, 2015
|
|
*10.20
|
|
|
|
|
|
8-K
|
|
001-3324
|
|
10.1
|
|
May 22, 2015
|
|
21.1
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
23.1
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
32.1
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
32.2
|
|
|
|
X
|
|
|
|
|
|
|
|
|
101.INS
|
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded with the Inline XBRL document
|
|
X
|
|
|
|
|
|
|
|
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema Document
|
|
X
|
|
|
|
|
|
|
|
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
X
|
|
|
|
|
|
|
|
|
101.DEF
|
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
X
|
|
|
|
|
|
|
|
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
X
|
|
|
|
|
|
|
|
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
X
|
|
|
|
|
|
|
|
|
104
|
|
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Confidential treatment has been requested for certain confidential portions of this exhibit; these confidential portions have been omitted from this exhibit and filed separately with the Securities and Exchange Commission.
|
Date:
|
February 20, 2020
|
EMPLOYERS HOLDINGS, INC.
|
|
|
|
|
|
|
|
By:
|
/s/ Michael S. Paquette
|
|
|
|
Name: Michael S. Paquette
|
|
|
|
Title: Executive Vice President and Chief Financial Officer
|
Signature
|
Title
|
Date
|
|
|
|
/s/ Michael D. Rumbolz
|
Chairman of the Board
|
February 20, 2020
|
Michael D. Rumbolz
|
|
|
|
|
|
/s/ Douglas D. Dirks
|
President and Chief Executive Officer, Director (Principal Executive Officer)
|
February 20, 2020
|
Douglas D. Dirks
|
|
|
|
|
|
/s/ Michael S. Paquette
|
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
February 20, 2020
|
Michael S. Paquette
|
|
|
|
|
|
/s/ Richard W. Blakey
|
Director
|
February 20, 2020
|
Richard W. Blakey
|
|
|
|
|
|
/s/ Prasanna G. Dhoré
|
Director
|
February 20, 2020
|
Prasanna G. Dhoré
|
|
|
|
|
|
/s/ João (John) M. de Figueiredo
|
Director
|
February 20, 2020
|
João (John) M. de Figueiredo
|
|
|
|
|
|
/s/ Valerie R. Glenn
|
Director
|
February 20, 2020
|
Valerie R. Glenn
|
|
|
|
|
|
/s/ Barbara A. Higgins
|
Director
|
February 20, 2020
|
Barbara A. Higgins
|
|
|
|
|
|
/s/ James R. Kroner
|
Director
|
February 20, 2020
|
James R. Kroner
|
|
|
|
|
|
/s/ Michael J. McColgan
|
Director
|
February 20, 2020
|
Michael J. McColgan
|
|
|
|
|
|
/s/ Michael J. McSally
|
Director
|
February 20, 2020
|
Michael J. McSally
|
|
|
|
|
|
/s/ Jeanne L. Mockard
|
Director
|
February 20, 2020
|
Jeanne L. Mockard
|
|
•
|
the person is liable pursuant to Nevada Revised Statutes 78.138;
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•
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the person did not act in good faith and in a manner which that person reasonably believed to be in or not opposed to our best interests; or
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•
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in the case of a criminal proceeding, the person had reasonable cause to believe the conduct of the person was unlawful.
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•
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eliminating the ability of our stockholders to call special meetings of stockholders;
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•
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permitting our Board to issue preferred stock in one or more series;
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•
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imposing advance notice requirements for nominations of candidates for election to our Board or for proposing matters that can be acted upon by stockholders at the stockholder meetings; and
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•
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prohibiting stockholder action by written consent, thereby limiting stockholder action to that taken at an annual or special meeting of our stockholders.
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Name
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Jurisdiction of Organization
|
Employers Group, Inc.
|
Nevada
|
Employers Insurance Company of Nevada
|
Nevada
|
Elite Insurance Services, Inc.
|
Nevada
|
Employers Compensation Insurance Company
|
California
|
Employers Preferred Insurance Company
|
Florida
|
Employers Assurance Company
|
Florida
|
EIG Services, Inc.
|
Florida
|
Cerity Group, Inc.
|
Nevada
|
Cerity Services, Inc.
|
Nevada
|
Cerity Insurance Company
|
New York
|
1.
|
I have reviewed this annual report on Form 10-K of Employers Holdings, Inc.;
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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 generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
Date:
|
February 20, 2020
|
/s/ Douglas D. Dirks
|
|
|
Douglas D. Dirks
|
|
|
President and Chief Executive Officer
|
|
|
Employers Holdings, Inc.
|
1.
|
I have reviewed this annual report on Form 10-K of Employers Holdings, 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 generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
Date:
|
February 20, 2020
|
/s/ Michael S. Paquette
|
|
|
Michael S. Paquette
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
Employers Holdings, Inc.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
Date:
|
February 20, 2020
|
/s/ Douglas D. Dirks
|
|
|
Douglas D. Dirks
|
|
|
President and Chief Executive Officer
|
|
|
Employers Holdings, Inc.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
Date:
|
February 20, 2020
|
/s/ Michael S. Paquette
|
|
|
Michael S. Paquette
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
Employers Holdings, Inc.
|