|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
|
27-1046208
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(IRS Employer
Identification No.)
|
59 Maiden Lane, 38th Floor
New York, New York
|
|
10038
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Large Accelerated Filer
o
|
|
Accelerated Filer
o
|
|
Non-Accelerated Filer
x
(Do not check if a smaller
reporting company)
|
|
Smaller Reporting Company
o
|
|
|
Page
|
PART I
|
||
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
PART II
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
||
|
|
|
NATIONAL GENERAL HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Shares and Par Value per Share)
|
|||||||
|
June 30, 2014
|
|
December 31, 2013
|
||||
ASSETS
|
(unaudited)
|
|
(audited)
|
||||
Investments:
|
|
|
|
|
|||
Fixed maturities, available-for-sale, at fair value (amortized cost $1,395,232 and $757,188)
|
$
|
1,443,769
|
|
|
$
|
766,589
|
|
Equity securities, available-for-sale, at fair value (cost $20,587 and $6,939)
|
20,136
|
|
|
6,287
|
|
||
Short-term investments
|
830
|
|
|
—
|
|
||
Equity investment in unconsolidated subsidiaries
|
142,473
|
|
|
133,193
|
|
||
Other investments
|
3,455
|
|
|
2,893
|
|
||
Securities pledged (amortized cost $62,637 and $133,013)
|
63,153
|
|
|
133,922
|
|
||
Total investments
|
1,673,816
|
|
|
1,042,884
|
|
||
Cash and cash equivalents
|
111,949
|
|
|
73,823
|
|
||
Accrued investment income
|
12,232
|
|
|
9,263
|
|
||
Premiums and other receivables, net
|
658,961
|
|
|
449,252
|
|
||
Deferred acquisition costs
|
114,735
|
|
|
60,112
|
|
||
Reinsurance recoverable on unpaid losses (includes $122,209 and $176,241 from related parties at June 30, 2014 and December 31, 2013, respectively)
|
904,403
|
|
|
950,828
|
|
||
Prepaid reinsurance premiums
|
69,070
|
|
|
50,878
|
|
||
Due from affiliate
|
5,830
|
|
|
4,785
|
|
||
Premises and equipment, net
|
34,045
|
|
|
29,535
|
|
||
Intangible assets, net
|
84,577
|
|
|
86,564
|
|
||
Goodwill
|
96,631
|
|
|
70,351
|
|
||
Prepaid and other assets
|
12,182
|
|
|
9,240
|
|
||
Total assets
|
$
|
3,778,431
|
|
|
$
|
2,837,515
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|||
Liabilities:
|
|
|
|
|
|||
Unpaid loss and loss adjustment expense reserves
|
$
|
1,386,111
|
|
|
$
|
1,259,241
|
|
Unearned premiums
|
751,322
|
|
|
476,232
|
|
||
Unearned service contract and other revenue
|
8,988
|
|
|
7,319
|
|
||
Reinsurance payable (includes $33,654 and $76,360 to related parties at June 30, 2014 and December 31, 2013, respectively)
|
43,601
|
|
|
93,534
|
|
||
Accounts payable and accrued expenses
|
239,391
|
|
|
91,143
|
|
||
Securities sold under agreements to repurchase, at contract value
|
60,097
|
|
|
109,629
|
|
||
Deferred tax liability
|
27,509
|
|
|
24,476
|
|
||
Income tax payable
|
19,057
|
|
|
1,987
|
|
||
Notes payable
|
259,113
|
|
|
81,142
|
|
||
Other liabilities
|
29,114
|
|
|
49,945
|
|
||
Total liabilities
|
2,824,303
|
|
|
2,194,648
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.01 par value - authorized 150,000,000 shares, issued and outstanding 93,344,400 shares - 2014; authorized 150,000,000 shares, issued and outstanding 79,731,800 shares - 2013
|
933
|
|
|
797
|
|
||
Preferred stock, $0.01 par value - authorized 10,000,000 shares, issued and outstanding 2,200,000 shares - 2014; authorized 10,000,000 shares, issued and outstanding 0 shares - 2013
|
55,000
|
|
|
—
|
|
||
Additional paid-in capital
|
613,839
|
|
|
437,006
|
|
||
Accumulated other comprehensive income
|
31,862
|
|
|
7,425
|
|
||
Retained earnings
|
252,413
|
|
|
197,552
|
|
||
Total National General Holdings Corp. Stockholders' Equity
|
954,047
|
|
|
642,780
|
|
||
Non-controlling interest
|
81
|
|
|
87
|
|
||
Total stockholders’ equity
|
954,128
|
|
|
642,867
|
|
||
Total liabilities and stockholders' equity
|
$
|
3,778,431
|
|
|
$
|
2,837,515
|
|
NATONAL GENERAL HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Shares and Per Share Data)
(Unaudited)
|
|||||||||||||||
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||
Premium income:
|
|
|
|
|
|
|
|
|
|
||||||
Gross premium written
|
$
|
468,473
|
|
|
$
|
330,689
|
|
|
$
|
1,114,615
|
|
|
$
|
688,302
|
|
Ceded premiums (related parties - three months $12,690; $147,401 and six months $42,967; $291,501)
|
(49,917
|
)
|
|
(183,685
|
)
|
|
(128,574
|
)
|
|
(368,782
|
)
|
||||
Net premium written
|
418,556
|
|
|
147,004
|
|
|
986,041
|
|
|
319,520
|
|
||||
Change in unearned premium
|
(27,090
|
)
|
|
7,546
|
|
|
(236,723
|
)
|
|
(12,814
|
)
|
||||
Net earned premium
|
391,466
|
|
|
154,550
|
|
|
749,318
|
|
|
306,706
|
|
||||
Ceding commission income (primarily related parties)
|
1,557
|
|
|
24,735
|
|
|
6,927
|
|
|
49,992
|
|
||||
Service and fee income
|
38,486
|
|
|
31,406
|
|
|
75,192
|
|
|
58,668
|
|
||||
Net investment income
|
11,321
|
|
|
7,181
|
|
|
20,535
|
|
|
13,654
|
|
||||
Net realized gain (losses) on investments
|
—
|
|
|
(751
|
)
|
|
—
|
|
|
947
|
|
||||
Other revenue
|
100
|
|
|
—
|
|
|
107
|
|
|
16
|
|
||||
Total revenues
|
442,930
|
|
|
217,121
|
|
|
852,079
|
|
|
429,983
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss and loss adjustment expense
|
255,604
|
|
|
98,669
|
|
|
480,951
|
|
|
201,871
|
|
||||
Acquisition costs and other underwriting expenses
|
74,418
|
|
|
32,222
|
|
|
148,791
|
|
|
62,432
|
|
||||
General and administrative expenses
|
77,059
|
|
|
68,412
|
|
|
153,258
|
|
|
135,221
|
|
||||
Interest expense
|
2,519
|
|
|
573
|
|
|
3,112
|
|
|
916
|
|
||||
Total expenses
|
409,600
|
|
|
199,876
|
|
|
786,112
|
|
|
400,440
|
|
||||
Income before provision for income taxes and equity in earnings (losses) of unconsolidated subsidiaries
|
33,330
|
|
|
17,245
|
|
|
65,967
|
|
|
29,543
|
|
||||
Provision for income taxes
|
424
|
|
|
3,782
|
|
|
7,760
|
|
|
7,553
|
|
||||
Income before equity in earnings (losses) of unconsolidated subsidiaries
|
32,906
|
|
|
13,463
|
|
|
58,207
|
|
|
21,990
|
|
||||
Equity in earnings (losses) of unconsolidated subsidiaries
|
(2,610
|
)
|
|
487
|
|
|
(1,487
|
)
|
|
(324
|
)
|
||||
Net income
|
30,296
|
|
|
13,950
|
|
|
56,720
|
|
|
21,666
|
|
||||
Net income (loss) attributable to non-controlling interest
|
38
|
|
|
—
|
|
|
6
|
|
|
(44
|
)
|
||||
Net income attributable to National General Holdings Corp. ("NGHC")
|
$
|
30,334
|
|
|
$
|
13,950
|
|
|
$
|
56,726
|
|
|
$
|
21,622
|
|
Dividends on preferred stock
|
—
|
|
|
(896
|
)
|
|
—
|
|
|
(2,158
|
)
|
||||
Net income attributable to NGHC common stockholders
|
$
|
30,334
|
|
|
$
|
13,054
|
|
|
$
|
56,726
|
|
|
$
|
19,464
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per share
|
$
|
0.32
|
|
|
$
|
0.24
|
|
|
$
|
0.63
|
|
|
$
|
0.39
|
|
Diluted earnings per share
|
$
|
0.32
|
|
|
$
|
0.22
|
|
|
$
|
0.62
|
|
|
$
|
0.35
|
|
Dividends declared per common share
|
$
|
0.01
|
|
|
$
|
—
|
|
|
$
|
0.02
|
|
|
$
|
—
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
93,344,400
|
|
|
54,935,182
|
|
|
89,526,029
|
|
|
50,270,789
|
|
||||
Diluted
|
94,819,307
|
|
|
64,600,233
|
|
|
90,898,518
|
|
|
61,603,366
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income
|
$
|
30,296
|
|
|
$
|
13,950
|
|
|
$
|
56,720
|
|
|
$
|
21,666
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment, net of tax expense - three months $0; $0 and six months $0; $0
|
156
|
|
|
—
|
|
|
(441
|
)
|
|
—
|
|
||||
Unrealized holding gain (loss) on securities, net of tax expense - three months $8,673; $(12,460) and six months $13,395; $(13,058)
|
16,107
|
|
|
(23,141
|
)
|
|
24,878
|
|
|
(24,252
|
)
|
||||
Reclassification adjustment for securities sold during the period, net of tax expense - three months $0; $(805) and six months $0; $(115)
|
—
|
|
|
(1,496
|
)
|
|
—
|
|
|
(214
|
)
|
||||
Other comprehensive income (loss), net of tax
|
16,263
|
|
|
(24,637
|
)
|
|
24,437
|
|
|
(24,466
|
)
|
||||
Comprehensive income (loss)
|
46,559
|
|
|
(10,687
|
)
|
|
81,157
|
|
|
(2,800
|
)
|
||||
Comprehensive income (loss) attributable to non-controlling interest
|
38
|
|
|
—
|
|
|
6
|
|
|
(44
|
)
|
||||
Comprehensive income (loss) attributable to NGHC
|
$
|
46,597
|
|
|
$
|
(10,687
|
)
|
|
$
|
81,163
|
|
|
$
|
(2,844
|
)
|
NATIONAL GENERAL HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In Thousands, Except Shares)
(Unaudited)
|
|||||||||||||||||||||||||||||||||
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
June 30, 2014
|
Common Stock
|
|
Preferred Stock
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Shares
|
|
$
|
|
Shares
|
|
$
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income
|
|
Non-controlling Interest in Subsidiary
|
|
Total
|
||||||||||||||||
Balance January 1, 2014
|
79,731,800
|
|
|
$
|
797
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
437,006
|
|
|
$
|
197,552
|
|
|
$
|
7,425
|
|
|
$
|
87
|
|
|
$
|
642,867
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56,726
|
|
|
—
|
|
|
(6
|
)
|
|
56,720
|
|
|||||||
Change in unrealized gains on investments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,878
|
|
|
—
|
|
|
24,878
|
|
|||||||
Foreign currency translation, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(441
|
)
|
|
—
|
|
|
(441
|
)
|
|||||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,865
|
)
|
|
—
|
|
|
—
|
|
|
(1,865
|
)
|
|||||||
Issuance of common stock
|
13,612,600
|
|
|
136
|
|
|
—
|
|
|
—
|
|
|
177,750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
177,886
|
|
|||||||
Issuance of preferred stock
|
—
|
|
|
—
|
|
|
2,200,000
|
|
|
55,000
|
|
|
(1,836
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53,164
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
919
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
919
|
|
|||||||
Balance at June 30, 2014
|
93,344,400
|
|
|
$
|
933
|
|
|
2,200,000
|
|
|
$
|
55,000
|
|
|
$
|
613,839
|
|
|
$
|
252,413
|
|
|
$
|
31,862
|
|
|
$
|
81
|
|
|
$
|
954,128
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
June 30, 2013
|
Common Stock
|
|
Preferred Stock
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Shares
|
|
$
|
|
Shares
|
|
$
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income
|
|
Non-controlling Interest in Subsidiary
|
|
Total
|
||||||||||||||||
Balance January 1, 2013
|
45,554,570
|
|
|
$
|
455
|
|
|
53,054
|
|
|
$
|
53,054
|
|
|
$
|
158,015
|
|
|
$
|
169,039
|
|
|
$
|
32,474
|
|
|
$
|
5
|
|
|
$
|
413,042
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,622
|
|
|
—
|
|
|
44
|
|
|
21,666
|
|
|||||||
Change in unrealized gains (loss) on investments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,466
|
)
|
|
—
|
|
|
(24,466
|
)
|
|||||||
Foreign currency translation, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,202
|
)
|
|
—
|
|
|
—
|
|
|
(12,202
|
)
|
|||||||
Conversion of preferred stock
|
12,295,430
|
|
|
123
|
|
|
(53,054
|
)
|
|
(53,054
|
)
|
|
52,931
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Issuance of common stock
|
21,881,800
|
|
|
219
|
|
|
—
|
|
|
—
|
|
|
213,058
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
213,277
|
|
|||||||
Capital contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,275
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,275
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,628
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,628
|
|
|||||||
Balance at June 30, 2013
|
79,731,800
|
|
|
$
|
797
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
435,907
|
|
|
$
|
178,459
|
|
|
$
|
8,008
|
|
|
$
|
49
|
|
|
$
|
623,220
|
|
NATIONAL GENERAL HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
|
|||||||
|
Six Months Ended June 30,
|
||||||
|
2014
|
|
2013
|
||||
Cash flows from operating activities:
|
|
|
|
|
|||
Net income
|
$
|
56,720
|
|
|
$
|
21,666
|
|
Reconciliation of net income to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation, amortization and goodwill impairment
|
13,338
|
|
|
9,494
|
|
||
Net amortization of premium on fixed maturities
|
1,594
|
|
|
2,050
|
|
||
Stock compensation expense
|
919
|
|
|
1,628
|
|
||
Equity in losses of unconsolidated subsidiaries
|
1,487
|
|
|
324
|
|
||
Net realized gain on investments
|
—
|
|
|
(947
|
)
|
||
Realized loss on premise and equipment disposals
|
—
|
|
|
86
|
|
||
Bad debt expense
|
14,519
|
|
|
8,427
|
|
||
Foreign currency translation, net of tax
|
(441
|
)
|
|
—
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accrued investment income
|
(2,485
|
)
|
|
(140
|
)
|
||
Premiums and other receivables
|
(184,691
|
)
|
|
(29,862
|
)
|
||
Deferred acquisition costs, net
|
(54,623
|
)
|
|
(1,384
|
)
|
||
Reinsurance recoverable on unpaid losses
|
58,603
|
|
|
1,099
|
|
||
Prepaid reinsurance premiums
|
18,011
|
|
|
1,983
|
|
||
Prepaid expenses and other assets
|
(1,988
|
)
|
|
(3,003
|
)
|
||
Unpaid loss and loss adjustment expense reserves
|
77,948
|
|
|
(5,122
|
)
|
||
Unearned premiums
|
217,286
|
|
|
10,831
|
|
||
Unearned service contract and other revenue
|
1,669
|
|
|
3,230
|
|
||
Reinsurance payable
|
(81,435
|
)
|
|
2,818
|
|
||
Accounts payable
|
131,185
|
|
|
30,055
|
|
||
Income tax payable
|
17,070
|
|
|
(3,101
|
)
|
||
Deferred tax liability
|
(29,630
|
)
|
|
(5,476
|
)
|
||
Other liabilities
|
(20,830
|
)
|
|
(4,739
|
)
|
||
Net cash provided by operating activities
|
234,226
|
|
|
39,917
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Investment in unconsolidated subsidiaries
|
(10,901
|
)
|
|
(17,214
|
)
|
||
Purchases of other investments
|
(557
|
)
|
|
(2,437
|
)
|
||
Acquisition of consolidated subsidiaries, net of cash obtained
|
(15,778
|
)
|
|
(22,766
|
)
|
||
Purchases of short term investments
|
(124,000
|
)
|
|
(38,795
|
)
|
||
Proceeds from sale of short-term investments
|
124,000
|
|
|
96,169
|
|
||
Purchases of premises and equipment
|
(5,550
|
)
|
|
(3,538
|
)
|
||
Disposals of premises and equipment
|
—
|
|
|
49
|
|
||
Purchases of fixed maturities
|
(591,550
|
)
|
|
(331,893
|
)
|
||
Proceeds from sale and maturity of fixed maturities
|
79,529
|
|
|
227,369
|
|
||
Net cash used in investing activities
|
(544,807
|
)
|
|
(93,056
|
)
|
||
|
|
|
|
NATIONAL GENERAL HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
|
|||||||
Cash flows from financing activities:
|
|
|
|
|
|||
Securities sold under agreements to repurchase, net
|
(49,532
|
)
|
|
(53,419
|
)
|
||
Securities sold but not yet purchased, net
|
—
|
|
|
(56,700
|
)
|
||
Notes payable repayments
|
(80,946
|
)
|
|
(58,084
|
)
|
||
Proceeds from notes payable
|
250,000
|
|
|
68,700
|
|
||
Issuance of common stock
|
177,886
|
|
|
213,277
|
|
||
Issuance of preferred stock, net of fees
|
53,164
|
|
|
—
|
|
||
Dividends paid
|
(1,865
|
)
|
|
(12,202
|
)
|
||
Net cash provided by financing activities
|
348,707
|
|
|
101,572
|
|
||
Net increase in cash and cash equivalents
|
38,126
|
|
|
48,433
|
|
||
Cash and cash equivalents, beginning of the period
|
73,823
|
|
|
39,937
|
|
||
Cash and cash equivalents, end of the period
|
$
|
111,949
|
|
|
$
|
88,370
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid for income taxes
|
$
|
14,200
|
|
|
$
|
15,500
|
|
Cash paid for interest
|
3,089
|
|
|
966
|
|
||
Noncash capital contribution
|
—
|
|
|
10,275
|
|
June 30, 2014
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
$
|
15,542
|
|
|
$
|
628
|
|
|
$
|
(907
|
)
|
|
$
|
15,263
|
|
Preferred stock
|
|
5,045
|
|
|
3
|
|
|
(175
|
)
|
|
4,873
|
|
||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and Federal agencies
|
|
190,920
|
|
|
1,160
|
|
|
(169
|
)
|
|
191,911
|
|
||||
States and political subdivisions bonds
|
|
152,667
|
|
|
3,039
|
|
|
(908
|
)
|
|
154,798
|
|
||||
Residential mortgage-backed securities
|
|
386,005
|
|
|
8,474
|
|
|
(1,907
|
)
|
|
392,572
|
|
||||
Corporate bonds
|
|
699,501
|
|
|
39,742
|
|
|
(1,198
|
)
|
|
738,045
|
|
||||
Asset-backed other securities
|
|
999
|
|
|
—
|
|
|
—
|
|
|
999
|
|
||||
Foreign government
|
|
6,233
|
|
|
—
|
|
|
(14
|
)
|
|
6,219
|
|
||||
Commercial mortgage-backed securities
|
|
21,544
|
|
|
834
|
|
|
—
|
|
|
22,378
|
|
||||
Subtotal
|
|
$
|
1,478,456
|
|
|
$
|
53,880
|
|
|
$
|
(5,278
|
)
|
|
$
|
1,527,058
|
|
Less: Securities pledged
|
|
62,637
|
|
|
555
|
|
|
(39
|
)
|
|
63,153
|
|
||||
Total
|
|
$
|
1,415,819
|
|
|
$
|
53,325
|
|
|
$
|
(5,239
|
)
|
|
$
|
1,463,905
|
|
December 31, 2013
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
$
|
1,939
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,939
|
|
Preferred stock
|
|
5,000
|
|
|
—
|
|
|
(652
|
)
|
|
4,348
|
|
||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and Federal agencies
|
|
30,655
|
|
|
920
|
|
|
—
|
|
|
31,575
|
|
||||
States and political subdivisions bonds
|
|
101,105
|
|
|
1,681
|
|
|
(3,202
|
)
|
|
99,584
|
|
||||
Residential mortgage-backed securities
|
|
272,820
|
|
|
4,136
|
|
|
(7,527
|
)
|
|
269,429
|
|
||||
Corporate bonds
|
|
477,442
|
|
|
21,397
|
|
|
(7,044
|
)
|
|
491,795
|
|
||||
Commercial mortgage-backed securities
|
|
8,179
|
|
|
—
|
|
|
(51
|
)
|
|
8,128
|
|
||||
Subtotal
|
|
$
|
897,140
|
|
|
$
|
28,134
|
|
|
$
|
(18,476
|
)
|
|
$
|
906,798
|
|
Less: Securities pledged
|
|
133,013
|
|
|
3,884
|
|
|
(2,975
|
)
|
|
133,922
|
|
||||
Total
|
|
$
|
764,127
|
|
|
$
|
24,250
|
|
|
$
|
(15,501
|
)
|
|
$
|
772,876
|
|
June 30, 2014
|
|
Cost or Amortized
Cost
|
|
Fair
Value
|
||||
Due in one year or less
|
|
$
|
11,840
|
|
|
$
|
11,950
|
|
Due after one year through five years
|
|
298,690
|
|
|
306,268
|
|
||
Due after five years through ten years
|
|
644,233
|
|
|
676,029
|
|
||
Due after ten years
|
|
95,557
|
|
|
97,725
|
|
||
Mortgage-backed securities
|
|
407,549
|
|
|
414,950
|
|
||
Total
|
|
$
|
1,457,869
|
|
|
$
|
1,506,922
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Interest
|
|
|
|
|
|
|
|
|
||||||||
Cash and short term investments
|
|
$
|
7
|
|
|
$
|
3
|
|
|
$
|
17
|
|
|
$
|
5
|
|
Fixed maturities
|
|
11,926
|
|
|
9,442
|
|
|
21,679
|
|
|
18,182
|
|
||||
Investment Income
|
|
11,933
|
|
|
9,445
|
|
|
21,696
|
|
|
18,187
|
|
||||
Investment expense
|
|
(560
|
)
|
|
(2,169
|
)
|
|
(1,029
|
)
|
|
(4,334
|
)
|
||||
Repurchase Agreements interest expense
|
|
(52
|
)
|
|
(95
|
)
|
|
(132
|
)
|
|
(199
|
)
|
||||
Net Investment Income
|
|
$
|
11,321
|
|
|
$
|
7,181
|
|
|
$
|
20,535
|
|
|
$
|
13,654
|
|
Three Months Ended June 30, 2014
|
|
Gross Gains
|
|
Gross Losses
|
|
Net Gains (Losses)
|
||||||
Fixed maturity securities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Three Months Ended June 30, 2013
|
|
Gross Gains
|
|
Gross Losses
|
|
Net Gains (Losses)
|
||||||
Fixed maturity securities
|
|
$
|
4,662
|
|
|
$
|
(5,413
|
)
|
|
$
|
(751
|
)
|
Six Months Ended June 30, 2014
|
|
Gross Gains
|
|
Gross Losses
|
|
Net Gains (Losses)
|
||||||
Fixed maturity securities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Six Months Ended June 30, 2013
|
|
Gross Gains
|
|
Gross Losses
|
|
Net Gains (Losses)
|
||||||
Fixed maturity securities
|
|
$
|
6,386
|
|
|
$
|
(5,439
|
)
|
|
$
|
947
|
|
June 30, 2014
|
|
|
||
Net unrealized loss on common stock
|
|
$
|
(279
|
)
|
Net unrealized loss on preferred stock
|
|
(172
|
)
|
|
Net unrealized gains on fixed maturity securities
|
|
49,053
|
|
|
Deferred income tax expense
|
|
(16,664
|
)
|
|
Net unrealized gains, net of deferred income tax expense
|
|
$
|
31,938
|
|
|
|
|
||
Change in net unrealized gains, net of deferred income tax expense
|
|
$
|
24,878
|
|
December 31, 2013
|
|
|
||
Net unrealized loss on preferred stock
|
|
$
|
(652
|
)
|
Net unrealized gains on fixed maturity securities
|
|
10,310
|
|
|
Deferred income tax expense
|
|
(2,598
|
)
|
|
Net unrealized gains, net of deferred income tax expense
|
|
$
|
7,060
|
|
|
|
Less Than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||||||||
June 30, 2014
|
|
Fair
Market
Value
|
|
Unrealized
Losses
|
|
No. of
Positions
Held
|
|
Fair
Market
Value
|
|
Unrealized
Losses
|
|
No. of
Positions
Held
|
|
Fair
Market
Value
|
|
Unrealized
Losses
|
||||||||||||||
Common stock
|
|
$
|
1,033
|
|
|
$
|
(907
|
)
|
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,033
|
|
|
$
|
(907
|
)
|
Preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,828
|
|
|
(175
|
)
|
|
1
|
|
|
4,828
|
|
|
(175
|
)
|
||||||
U.S. Government
|
|
166,971
|
|
|
(169
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166,971
|
|
|
(169
|
)
|
||||||
States and political subdivisions
|
|
18,807
|
|
|
(215
|
)
|
|
7
|
|
|
11,470
|
|
|
(693
|
)
|
|
11
|
|
|
30,277
|
|
|
(908
|
)
|
||||||
Residential Mortgage-backed
|
|
126,116
|
|
|
(1,877
|
)
|
|
11
|
|
|
2,063
|
|
|
(30
|
)
|
|
3
|
|
|
128,179
|
|
|
(1,907
|
)
|
||||||
Foreign government
|
|
6,221
|
|
|
(14
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,221
|
|
|
(14
|
)
|
||||||
Corporate bonds
|
|
25,773
|
|
|
(125
|
)
|
|
12
|
|
|
36,593
|
|
|
(1,073
|
)
|
|
17
|
|
|
62,366
|
|
|
(1,198
|
)
|
||||||
Total
|
|
$
|
344,921
|
|
|
$
|
(3,307
|
)
|
|
34
|
|
|
$
|
54,954
|
|
|
$
|
(1,971
|
)
|
|
32
|
|
|
$
|
399,875
|
|
|
$
|
(5,278
|
)
|
|
|
Less Than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||||||||
December 31, 2013
|
|
Fair
Market
Value
|
|
Unrealized
Losses
|
|
No. of
Positions
Held
|
|
Fair
Market
Value
|
|
Unrealized
Losses
|
|
No. of
Positions
Held
|
|
Fair
Market
Value
|
|
Unrealized
Losses
|
||||||||||||||
Preferred stock
|
|
$
|
4,348
|
|
|
$
|
(652
|
)
|
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
4,348
|
|
|
$
|
(652
|
)
|
States and political subdivisions
|
|
32,770
|
|
|
(2,622
|
)
|
|
18
|
|
|
2,600
|
|
|
(580
|
)
|
|
2
|
|
|
35,370
|
|
|
(3,202
|
)
|
||||||
Residential Mortgage-backed
|
|
176,491
|
|
|
(7,527
|
)
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
176,491
|
|
|
(7,527
|
)
|
||||||
Commercial Mortgage-backed
|
|
8,128
|
|
|
(51
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,128
|
|
|
(51
|
)
|
||||||
Corporate bonds
|
|
128,362
|
|
|
(4,051
|
)
|
|
39
|
|
|
41,673
|
|
|
(2,993
|
)
|
|
9
|
|
|
170,035
|
|
|
(7,044
|
)
|
||||||
Total
|
|
$
|
350,099
|
|
|
$
|
(14,903
|
)
|
|
66
|
|
|
$
|
44,273
|
|
|
$
|
(3,573
|
)
|
|
11
|
|
|
$
|
394,372
|
|
|
$
|
(18,476
|
)
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||
Restricted cash
|
|
$
|
13,034
|
|
|
$
|
1,155
|
|
Restricted investments - fixed maturities at fair value
|
|
44,079
|
|
|
42,092
|
|
||
Total restricted cash and investments
|
|
$
|
57,113
|
|
|
$
|
43,247
|
|
|
|
|
|
|
|
|
|
|
||||||||
June 30, 2014
|
|
Recurring Fair Value Measures
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
$
|
15,263
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,263
|
|
Preferred stock
|
|
—
|
|
|
4,873
|
|
|
—
|
|
|
4,873
|
|
||||
Fixed maturities:
|
|
|
|
|
|
|
|
—
|
|
|||||||
U.S. Treasury and Federal agencies
|
|
191,911
|
|
|
—
|
|
|
—
|
|
|
191,911
|
|
||||
State and political subdivision bonds
|
|
—
|
|
|
154,798
|
|
|
—
|
|
|
154,798
|
|
||||
Residential mortgage-backed securities
|
|
—
|
|
|
392,572
|
|
|
—
|
|
|
392,572
|
|
||||
Corporate bonds
|
|
—
|
|
|
738,045
|
|
|
—
|
|
|
738,045
|
|
||||
Commercial mortgage-backed securities
|
|
—
|
|
|
22,378
|
|
|
—
|
|
|
22,378
|
|
||||
Asset-backed other securities
|
|
—
|
|
|
999
|
|
|
—
|
|
|
999
|
|
||||
Foreign government
|
|
—
|
|
|
6,219
|
|
|
—
|
|
|
6,219
|
|
||||
Other investments
|
|
—
|
|
|
—
|
|
|
4,285
|
|
|
4,285
|
|
||||
Total assets
|
|
$
|
207,174
|
|
|
$
|
1,319,884
|
|
|
$
|
4,285
|
|
|
$
|
1,531,343
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Securities sold under agreements to repurchase
|
|
$
|
—
|
|
|
$
|
60,097
|
|
|
$
|
—
|
|
|
$
|
60,097
|
|
Total liabilities
|
|
$
|
—
|
|
|
$
|
60,097
|
|
|
$
|
—
|
|
|
$
|
60,097
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2013
|
|
Recurring Fair Value Measures
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
$
|
1,939
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,939
|
|
Preferred stock
|
|
—
|
|
|
4,348
|
|
|
—
|
|
|
4,348
|
|
||||
Fixed maturities:
|
|
|
|
|
|
|
|
—
|
|
|||||||
U.S. Treasury and Federal agencies
|
|
31,575
|
|
|
—
|
|
|
—
|
|
|
31,575
|
|
||||
State and political subdivision bonds
|
|
—
|
|
|
99,584
|
|
|
—
|
|
|
99,584
|
|
||||
Residential mortgage-backed securities
|
|
—
|
|
|
269,429
|
|
|
—
|
|
|
269,429
|
|
||||
Corporate bonds
|
|
—
|
|
|
491,795
|
|
|
—
|
|
|
491,795
|
|
||||
Commercial mortgage-backed securities
|
|
—
|
|
|
8,128
|
|
|
—
|
|
|
8,128
|
|
||||
Other investments
|
|
—
|
|
|
—
|
|
|
2,893
|
|
|
2,893
|
|
||||
Total assets
|
|
$
|
33,514
|
|
|
$
|
873,284
|
|
|
$
|
2,893
|
|
|
$
|
909,691
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Securities sold under agreements to repurchase
|
|
$
|
—
|
|
|
$
|
109,629
|
|
|
$
|
—
|
|
|
$
|
109,629
|
|
Total liabilities
|
|
$
|
—
|
|
|
$
|
109,629
|
|
|
$
|
—
|
|
|
$
|
109,629
|
|
Six Months Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Tiger
|
|
AMT Alpha
|
|
AMTCH
|
|
AMTCH II
|
|
Total
|
||||||||||
Balance at beginning of period
|
|
$
|
73,186
|
|
|
$
|
6,537
|
|
|
$
|
32,966
|
|
|
$
|
13,497
|
|
|
$
|
126,186
|
|
Contributions
|
|
6,878
|
|
|
475
|
|
|
3,428
|
|
|
106
|
|
|
10,887
|
|
|||||
Equity in earnings (losses) of unconsolidated subsidiaries
|
|
(4,654
|
)
|
|
(77
|
)
|
|
(3,244
|
)
|
|
6,840
|
|
|
(1,135
|
)
|
|||||
Change in equity method investments
|
|
2,224
|
|
|
398
|
|
|
184
|
|
|
6,946
|
|
|
9,752
|
|
|||||
Balance at end of period
|
|
$
|
75,410
|
|
|
$
|
6,935
|
|
|
$
|
33,150
|
|
|
$
|
20,443
|
|
|
$
|
135,938
|
|
Six Months Ended June 30, 2013
|
|
|
|
|
|
|
|
|
||||||||
|
|
Tiger
|
|
AMT Alpha
|
|
AMTCH
|
|
Total
|
||||||||
Balance at beginning of period
|
|
$
|
58,273
|
|
|
$
|
8,211
|
|
|
$
|
—
|
|
|
$
|
66,484
|
|
Contributions
|
|
5,890
|
|
|
300
|
|
|
—
|
|
|
6,190
|
|
||||
Acquisition of interest
|
|
—
|
|
|
—
|
|
|
22,411
|
|
|
22,411
|
|
||||
Equity in earnings (losses) of unconsolidated subsidiaries
|
|
1,999
|
|
|
(1,943
|
)
|
|
(845
|
)
|
|
(789
|
)
|
||||
Change in equity method investments
|
|
7,889
|
|
|
(1,643
|
)
|
|
21,566
|
|
|
27,812
|
|
||||
Balance at end of period
|
|
$
|
66,162
|
|
|
$
|
6,568
|
|
|
$
|
21,566
|
|
|
$
|
94,296
|
|
June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed balance sheet data
|
|
Tiger
|
|
AMT Alpha
|
|
AMTCH
|
|
AMTCH II
|
|
Total
|
||||||||||
Investments in life settlement contracts at fair value
|
|
$
|
155,897
|
|
|
$
|
14,787
|
|
|
$
|
64,210
|
|
|
$
|
41,305
|
|
|
$
|
276,199
|
|
Total assets
|
|
166,507
|
|
|
15,224
|
|
|
66,716
|
|
|
42,853
|
|
|
291,300
|
|
|||||
Total liabilities
|
|
15,687
|
|
|
1,353
|
|
|
416
|
|
|
1,968
|
|
|
19,424
|
|
|||||
Members' equity
|
|
150,820
|
|
|
13,871
|
|
|
66,300
|
|
|
40,885
|
|
|
271,876
|
|
|||||
NGHC's 50% ownership interest
|
|
$
|
75,410
|
|
|
$
|
6,935
|
|
|
$
|
33,150
|
|
|
$
|
20,443
|
|
|
$
|
135,938
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed balance sheet data
|
|
Tiger
|
|
AMT Alpha
|
|
AMTCH
|
|
AMTCH II
|
|
Total
|
||||||||||
Investments in life settlement contracts at fair value
|
|
$
|
153,684
|
|
|
$
|
14,366
|
|
|
$
|
64,974
|
|
|
$
|
—
|
|
|
$
|
233,024
|
|
Total assets
|
|
163,169
|
|
|
14,416
|
|
|
66,168
|
|
|
27,005
|
|
|
270,758
|
|
|||||
Total liabilities
|
|
16,797
|
|
|
1,342
|
|
|
236
|
|
|
12
|
|
|
18,387
|
|
|||||
Members' equity
|
|
146,372
|
|
|
13,074
|
|
|
65,932
|
|
|
26,993
|
|
|
252,371
|
|
|||||
NGHC's 50% ownership interest
|
|
$
|
73,186
|
|
|
$
|
6,537
|
|
|
$
|
32,966
|
|
|
$
|
13,497
|
|
|
$
|
126,186
|
|
Three Months Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed results of operations
|
|
Tiger
|
|
AMT Alpha
|
|
AMTCH
|
|
AMTCH II
|
|
Total
|
||||||||||
Revenue, net of commission
|
|
$
|
(2,933
|
)
|
|
$
|
(202
|
)
|
|
$
|
(2,106
|
)
|
|
$
|
777
|
|
|
$
|
(4,464
|
)
|
Total expenses
|
|
284
|
|
|
7
|
|
|
256
|
|
|
59
|
|
|
606
|
|
|||||
Net income (loss)
|
|
$
|
(3,217
|
)
|
|
$
|
(209
|
)
|
|
$
|
(2,362
|
)
|
|
$
|
718
|
|
|
$
|
(5,070
|
)
|
NGHC's ownership interest
|
|
$
|
(1,609
|
)
|
|
$
|
(104
|
)
|
|
$
|
(1,181
|
)
|
|
$
|
359
|
|
|
$
|
(2,535
|
)
|
Three Months Ended June 30, 2013
|
|
|
|
|
|
|
|
|
||||||||
Condensed results of operations
|
|
Tiger
|
|
AMT Alpha
|
|
AMTCH
|
|
Total
|
||||||||
Revenue, net of commission
|
|
$
|
2,123
|
|
|
$
|
236
|
|
|
$
|
358
|
|
|
$
|
2,717
|
|
Total expenses
|
|
666
|
|
|
10
|
|
|
464
|
|
|
1,140
|
|
||||
Net income (loss)
|
|
$
|
1,457
|
|
|
$
|
226
|
|
|
$
|
(106
|
)
|
|
$
|
1,577
|
|
NGHC's ownership interest
|
|
$
|
729
|
|
|
$
|
113
|
|
|
$
|
(845
|
)
|
|
$
|
(3
|
)
|
Six Months Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed results of operations
|
|
Tiger
|
|
AMT Alpha
|
|
AMTCH
|
|
AMTCH II
|
|
Total
|
||||||||||
Revenue, net of commission
|
|
$
|
(8,512
|
)
|
|
$
|
(143
|
)
|
|
$
|
(6,064
|
)
|
|
$
|
14,445
|
|
|
$
|
(274
|
)
|
Total expenses
|
|
796
|
|
|
11
|
|
|
424
|
|
|
765
|
|
|
1,996
|
|
|||||
Net income (loss)
|
|
$
|
(9,308
|
)
|
|
$
|
(154
|
)
|
|
$
|
(6,488
|
)
|
|
$
|
13,680
|
|
|
$
|
(2,270
|
)
|
NGHC's ownership interest
|
|
$
|
(4,654
|
)
|
|
$
|
(77
|
)
|
|
$
|
(3,244
|
)
|
|
$
|
6,840
|
|
|
$
|
(1,135
|
)
|
Six Months Ended June 30, 2013
|
|
|
|
|
|
|
|
|
||||||||
Condensed results of operations
|
|
Tiger
|
|
AMT Alpha
|
|
AMTCH
|
|
Total
|
||||||||
Revenue, net of commission
|
|
$
|
5,198
|
|
|
$
|
(3,861
|
)
|
|
$
|
358
|
|
|
$
|
1,695
|
|
Total expenses
|
|
1,200
|
|
|
24
|
|
|
464
|
|
|
1,688
|
|
||||
Net income (loss)
|
|
$
|
3,998
|
|
|
$
|
(3,885
|
)
|
|
$
|
(106
|
)
|
|
$
|
7
|
|
NGHC's ownership interest
|
|
$
|
1,999
|
|
|
$
|
(1,943
|
)
|
|
$
|
(845
|
)
|
|
$
|
(789
|
)
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||
Average age of insured
|
|
80.8 years
|
|
|
80.1 years
|
|
||
Average life expectancy, months
(1)
|
|
124
|
|
|
131
|
|
||
Average face amount per policy
|
|
$
|
6,586
|
|
|
$
|
6,611
|
|
Effective discount rate
(2)
|
|
14.1
|
%
|
|
14.2
|
%
|
|
|
Change in life expectancy
|
||||||
|
|
Plus 4 Months
|
|
Minus 4 Months
|
||||
Investment in life policies:
|
|
|
|
|
||||
June 30, 2014
|
|
$
|
(34,813
|
)
|
|
$
|
36,860
|
|
December 31, 2013
|
|
$
|
(29,537
|
)
|
|
$
|
31,313
|
|
|
|
Change in discount rate
(1)
|
||||||
|
|
Plus 1%
|
|
Minus 1%
|
||||
Investment in life policies:
|
|
|
|
|
||||
June 30, 2014
|
|
$
|
(23,198
|
)
|
|
$
|
26,095
|
|
December 31, 2013
|
|
$
|
(20,055
|
)
|
|
$
|
22,605
|
|
Six Months Ended June 30, 2014
|
|
800 Superior, LLC
|
|
|
East Ninth & Superior
|
|
|
Total
|
|
|||
Balance at beginning of period
|
|
$
|
2,863
|
|
|
$
|
4,009
|
|
|
$
|
6,872
|
|
Contributions
|
|
14
|
|
|
—
|
|
|
14
|
|
|||
Distributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Equity in earnings (losses) of unconsolidated subsidiaries
|
|
(393
|
)
|
|
41
|
|
|
(352
|
)
|
|||
Change in equity method investments
|
|
(379
|
)
|
|
41
|
|
|
(338
|
)
|
|||
Balance at end of period
|
|
$
|
2,484
|
|
|
$
|
4,050
|
|
|
$
|
6,534
|
|
Six Months Ended June 30, 2013
|
|
800 Superior, LLC
|
|
|
East Ninth & Superior
|
|
|
Total
|
|
|||
Balance at beginning of period
|
|
$
|
2,671
|
|
|
$
|
4,066
|
|
|
$
|
6,737
|
|
Contributions
|
|
750
|
|
|
—
|
|
|
750
|
|
|||
Distributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Equity in earnings (losses) of unconsolidated subsidiaries
|
|
(210
|
)
|
|
147
|
|
|
(63
|
)
|
|||
Change in equity method investments
|
|
540
|
|
|
147
|
|
|
687
|
|
|||
Balance at end of period
|
|
$
|
3,211
|
|
|
$
|
4,213
|
|
|
$
|
7,424
|
|
June 30, 2014
|
|
|
|
|
|
|
||||||
Condensed balance sheet data
|
|
800 Superior, LLC
|
|
|
East Ninth & Superior
|
|
|
Total
|
|
|||
Total Assets
|
|
$
|
25,514
|
|
|
$
|
20,992
|
|
|
$
|
46,506
|
|
Total Liabilities
|
|
20,546
|
|
|
12,892
|
|
|
33,438
|
|
|||
Members Equity
|
|
4,968
|
|
|
8,100
|
|
|
13,068
|
|
|||
NGHC's 50% ownership interest
|
|
$
|
2,484
|
|
|
$
|
4,050
|
|
|
$
|
6,534
|
|
December 31, 2013
|
|
|
|
|
|
|
||||||
Condensed balance sheet data
|
|
800 Superior, LLC
|
|
|
East Ninth & Superior
|
|
|
Total
|
|
|||
Total Assets
|
|
$
|
26,528
|
|
|
$
|
20,860
|
|
|
$
|
47,388
|
|
Total Liabilities
|
|
20,801
|
|
|
12,841
|
|
|
33,642
|
|
|||
Members Equity
|
|
5,727
|
|
|
8,019
|
|
|
13,746
|
|
|||
NGHC's 50% ownership interest
|
|
$
|
2,863
|
|
|
$
|
4,009
|
|
|
$
|
6,872
|
|
Three Months Ended June 30, 2014
|
|
|
|
|
|
|
||||||
Condensed results of operations
|
|
800 Superior, LLC
|
|
|
East Ninth & Superior
|
|
|
Total
|
|
|||
Revenue
|
|
$
|
1,175
|
|
|
$
|
—
|
|
|
$
|
1,175
|
|
Expenses
|
|
1,349
|
|
|
(24
|
)
|
|
1,325
|
|
|||
Net Income (Loss)
|
|
$
|
(174
|
)
|
|
$
|
24
|
|
|
$
|
(150
|
)
|
NGHC's 50% ownership interest
|
|
$
|
(87
|
)
|
|
$
|
12
|
|
|
$
|
(75
|
)
|
Three Months Ended June 30, 2013
|
|
|
|
|
|
|
||||||
Condensed results of operations
|
|
800 Superior, LLC
|
|
|
East Ninth & Superior
|
|
|
Total
|
|
|||
Revenue
|
|
$
|
1,187
|
|
|
$
|
—
|
|
|
$
|
1,187
|
|
Expenses
|
|
1,518
|
|
|
(253
|
)
|
|
1,265
|
|
|||
Net Income (Loss)
|
|
$
|
(331
|
)
|
|
$
|
253
|
|
|
$
|
(78
|
)
|
NGHC's 50% ownership interest
|
|
$
|
(165
|
)
|
|
$
|
126
|
|
|
$
|
(39
|
)
|
Six Months Ended June 30, 2014
|
|
|
|
|
|
|
||||||
Condensed results of operations
|
|
800 Superior, LLC
|
|
|
East Ninth & Superior
|
|
|
Total
|
|
|||
Revenue
|
|
$
|
2,418
|
|
|
$
|
—
|
|
|
$
|
2,418
|
|
Expenses
|
|
3,204
|
|
|
(82
|
)
|
|
3,122
|
|
|||
Net Income (Loss)
|
|
$
|
(786
|
)
|
|
$
|
82
|
|
|
$
|
(704
|
)
|
NGHC's 50% ownership interest
|
|
$
|
(393
|
)
|
|
$
|
41
|
|
|
$
|
(352
|
)
|
Six Months Ended June 30, 2013
|
|
|
|
|
|
|
||||||
Condensed results of operations
|
|
800 Superior, LLC
|
|
|
East Ninth & Superior
|
|
|
Total
|
|
|||
Revenue
|
|
$
|
2,375
|
|
|
$
|
—
|
|
|
$
|
2,375
|
|
Expenses
|
|
2,795
|
|
|
(295
|
)
|
|
2,500
|
|
|||
Net Income (Loss)
|
|
$
|
(420
|
)
|
|
$
|
295
|
|
|
$
|
(125
|
)
|
NGHC's 50% ownership interest
|
|
$
|
(210
|
)
|
|
$
|
147
|
|
|
$
|
(63
|
)
|
June 2014
|
|
|
||
Assets
|
|
|
||
Cash and invested assets
|
|
$
|
62,159
|
|
Accrued interest
|
|
484
|
|
|
Premium receivable
|
|
37,687
|
|
|
Reinsurance recoverable
|
|
12,177
|
|
|
Prepaid reinsurance
|
|
36,203
|
|
|
Premises and equipment
|
|
6,218
|
|
|
Intangible assets
|
|
3,300
|
|
|
Deferred tax
|
|
847
|
|
|
Other
|
|
225
|
|
|
Total Assets
|
|
159,300
|
|
|
Liabilities
|
|
|
||
Unpaid loss and loss adjustment expenses
|
|
44,450
|
|
|
Accounts payable and accrued expenses
|
|
13,899
|
|
|
Unearned premiums
|
|
49,452
|
|
|
Reinsurance payable
|
|
30,686
|
|
|
Notes payable
|
|
8,916
|
|
|
Total Liabilities
|
|
147,403
|
|
|
Net assets purchased
|
|
11,897
|
|
|
Purchase price
|
|
20,000
|
|
|
Goodwill recorded
|
|
$
|
8,103
|
|
April 2014
|
|
|
||
Assets
|
|
|
||
Cash and invested assets
|
|
$
|
29,131
|
|
Premium receivable
|
|
2,896
|
|
|
Other assets
|
|
729
|
|
|
Total Assets
|
|
32,756
|
|
|
Liabilities
|
|
|
||
Unpaid loss and loss adjustment expenses
|
|
4,472
|
|
|
Unearned premium
|
|
8,352
|
|
|
Reinsurance payable
|
|
816
|
|
|
Accounts payable and accrued expenses
|
|
2,829
|
|
|
Deferred tax
|
|
119
|
|
|
Total Liabilities
|
|
16,588
|
|
|
Net assets purchased
|
|
16,168
|
|
|
Purchase price
|
|
21,743
|
|
|
Goodwill recorded
|
|
$
|
5,575
|
|
January 2014
|
|
|
||
Assets
|
|
|
||
Cash and invested assets
|
|
$
|
6,393
|
|
Prepaid assets
|
|
1
|
|
|
Loan receivable
|
|
62,973
|
|
|
Intangible assets
|
|
132
|
|
|
Total Assets
|
|
69,499
|
|
|
Liabilities
|
|
|
||
Accounts payable and accrued expenses
|
|
20
|
|
|
Deferred tax liability
|
|
19,123
|
|
|
Total Liabilities
|
|
19,143
|
|
|
Net assets purchased
|
|
50,356
|
|
|
Purchase price
|
|
62,973
|
|
|
Goodwill recorded
|
|
$
|
12,617
|
|
December 2013
|
|
|
||
Assets
|
|
|
||
Cash and invested assets
|
|
$
|
39,542
|
|
Prepaid assets
|
|
196
|
|
|
Intangible assets
|
|
132
|
|
|
Total Assets
|
|
39,870
|
|
|
Liabilities
|
|
|
||
Accounts payable and accrued expenses
|
|
57
|
|
|
Deferred tax liability
|
|
10,241
|
|
|
Total Liabilities
|
|
10,298
|
|
|
Net assets purchased
|
|
29,572
|
|
|
Purchase price
|
|
35,741
|
|
|
Goodwill recorded
|
|
$
|
6,169
|
|
April 2013
|
|
|
||
Assets
|
|
|
||
Cash and invested assets
|
|
$
|
873
|
|
Receivables
|
|
10,786
|
|
|
Intangible assets
|
|
20,100
|
|
|
Premises and equipment
|
|
1,731
|
|
|
Prepaid and other assets
|
|
146
|
|
|
Total Assets
|
|
33,636
|
|
|
Liabilities
|
|
|
||
Accounts payable and accrued expenses
|
|
10,706
|
|
|
Deferred tax liability
|
|
5,720
|
|
|
Total liabilities
|
|
16,426
|
|
|
Net assets purchased
|
|
17,210
|
|
|
Purchase price
|
|
42,840
|
|
|
Goodwill recorded
|
|
$
|
25,630
|
|
June 30, 2014
|
|
Gross
Balance
|
|
Accumulated
Amortization
|
|
Net Value
|
|
Useful Life
|
||||||
Trademarks
|
|
$
|
5,900
|
|
|
$
|
5,247
|
|
|
$
|
653
|
|
|
5 years
|
Loss reserve discount
|
|
12,451
|
|
|
11,906
|
|
|
545
|
|
|
7 years
|
|||
Agent relationships
|
|
31,926
|
|
|
7,560
|
|
|
24,366
|
|
|
11 - 17 years
|
|||
Affinity partners
|
|
800
|
|
|
326
|
|
|
474
|
|
|
11 years
|
|||
Operating lease
|
|
3,508
|
|
|
3,317
|
|
|
191
|
|
|
4.6 years
|
|||
Non-compete
|
|
2,500
|
|
|
2,167
|
|
|
333
|
|
|
5 years
|
|||
State licenses
|
|
58,015
|
|
|
—
|
|
|
58,015
|
|
|
indefinite life
|
|||
Goodwill
|
|
96,631
|
|
|
—
|
|
|
96,631
|
|
|
indefinite life
|
|||
Total
|
|
$
|
211,731
|
|
|
$
|
30,523
|
|
|
$
|
181,208
|
|
|
|
December 31, 2013
|
|
Gross
Balance
|
|
Accumulated
Amortization
|
|
Net Value
|
|
Useful Life
|
||||||
Trademarks
|
|
$
|
5,900
|
|
|
$
|
4,757
|
|
|
$
|
1,143
|
|
|
5 years
|
Loss reserve discount
|
|
12,451
|
|
|
11,672
|
|
|
779
|
|
|
7 years
|
|||
Agent relationships
|
|
31,850
|
|
|
3,591
|
|
|
28,259
|
|
|
11 - 17 years
|
|||
Affinity partners
|
|
800
|
|
|
289
|
|
|
511
|
|
|
11 years
|
|||
Operating lease
|
|
3,508
|
|
|
2,934
|
|
|
574
|
|
|
4.6 years
|
|||
Non-compete
|
|
2,500
|
|
|
1,917
|
|
|
583
|
|
|
5 years
|
|||
State licenses
|
|
54,715
|
|
|
—
|
|
|
54,715
|
|
|
indefinite life
|
|||
Goodwill
|
|
70,351
|
|
|
—
|
|
|
70,351
|
|
|
indefinite life
|
|||
Total
|
|
$
|
182,075
|
|
|
$
|
25,160
|
|
|
$
|
156,915
|
|
|
|
Year ending
|
|
||
2014
|
$
|
1,810
|
|
2015
|
3,259
|
|
|
2016
|
2,915
|
|
|
2017
|
2,655
|
|
|
2018 and thereafter
|
15,923
|
|
|
|
$
|
26,562
|
|
December 31,
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
||||||||||||||
6.75% Notes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
250,000
|
|
|
$
|
250,000
|
|
VelaPoint Note #1
|
|
—
|
|
|
613
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
613
|
|
|||||||
Imperial-related debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Imperial-related Notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,500
|
|
|
3,500
|
|
|||||||
Surplus Notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,000
|
|
|
5,000
|
|
|||||||
|
|
$
|
—
|
|
|
$
|
613
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
258,500
|
|
|
$
|
259,113
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income attributable to common NGHC stockholders - basic
|
$
|
30,334
|
|
|
$
|
13,054
|
|
|
$
|
56,726
|
|
|
$
|
19,464
|
|
Effect of potentially dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Convertible preferred stock dividends
|
—
|
|
|
896
|
|
|
—
|
|
|
2,158
|
|
||||
Net income attributable to common NGHC stockholders - diluted
|
$
|
30,334
|
|
|
$
|
13,950
|
|
|
$
|
56,726
|
|
|
$
|
21,622
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding – basic
|
93,344,400
|
|
|
54,935,182
|
|
|
89,526,029
|
|
|
50,270,789
|
|
||||
Potentially dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Share options
|
1,440,907
|
|
|
747,486
|
|
|
1,355,583
|
|
|
735,411
|
|
||||
Restricted stock units
|
34,000
|
|
|
—
|
|
|
16,906
|
|
|
—
|
|
||||
Convertible preferred stock
|
—
|
|
|
8,917,565
|
|
|
—
|
|
|
10,597,166
|
|
||||
Weighted average number of common shares outstanding – diluted
|
94,819,307
|
|
|
64,600,233
|
|
|
90,898,518
|
|
|
61,603,366
|
|
||||
Basic earnings per share attributable to NGHC common stockholders
|
$
|
0.32
|
|
|
$
|
0.24
|
|
|
$
|
0.63
|
|
|
$
|
0.39
|
|
Diluted earnings per share attributable to NGHC common stockholders
|
$
|
0.32
|
|
|
$
|
0.22
|
|
|
$
|
0.62
|
|
|
$
|
0.35
|
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
||||||||||
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
||||||
Outstanding at beginning of period
|
5,058,363
|
|
|
$
|
8.48
|
|
|
2,339,601
|
|
|
$
|
5.89
|
|
Granted
|
—
|
|
|
—
|
|
|
2,970,353
|
|
|
10.32
|
|
||
Forfeited
|
—
|
|
|
—
|
|
|
(242,970
|
)
|
|
6.60
|
|
||
Exercised
|
(42,600
|
)
|
|
3.67
|
|
|
—
|
|
|
—
|
|
||
Outstanding at end of period
|
5,015,763
|
|
|
$
|
8.52
|
|
|
5,066,984
|
|
|
$
|
8.46
|
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
||||||||||
|
RSUs
|
|
Weighted
Average
Grant Date Fair Value
|
|
RSUs
|
|
Weighted
Average
Grant Date Fair Value
|
||||||
Non-vested at beginning of period
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
90,000
|
|
|
15.91
|
|
|
—
|
|
|
—
|
|
||
Vested
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Non-vested at end of period
|
90,000
|
|
|
$
|
15.91
|
|
|
—
|
|
|
$
|
—
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(amounts in thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Installment fees
|
|
$
|
7,322
|
|
|
$
|
7,053
|
|
|
$
|
14,205
|
|
|
$
|
17,063
|
|
Commission revenue
|
|
14,878
|
|
|
10,527
|
|
|
29,738
|
|
|
16,816
|
|
||||
General agent fees
|
|
7,842
|
|
|
4,967
|
|
|
15,167
|
|
|
9,419
|
|
||||
Late payment fees
|
|
2,987
|
|
|
2,863
|
|
|
5,485
|
|
|
5,444
|
|
||||
Finance and processing fees
|
|
3,369
|
|
|
3,826
|
|
|
6,509
|
|
|
5,451
|
|
||||
Other
|
|
2,088
|
|
|
2,170
|
|
|
4,088
|
|
|
4,475
|
|
||||
Total
|
|
$
|
38,486
|
|
|
$
|
31,406
|
|
|
$
|
75,192
|
|
|
$
|
58,668
|
|
|
Six Months Ended June 30,
|
||||||
(amounts in thousands)
|
2014
|
|
2013
|
||||
Income before equity earnings of unconsolidated subsidiaries
|
$
|
65,967
|
|
|
$
|
29,543
|
|
Tax at Federal statutory rate of 35%
|
$
|
23,088
|
|
|
$
|
10,340
|
|
Tax effects resulting from:
|
|
|
|
||||
Loss of non-includable foreign subsidiaries
|
(3,654
|
)
|
|
(1,677
|
)
|
||
Tax exempt interest
|
(431
|
)
|
|
(418
|
)
|
||
Non-deductible expenses
|
55
|
|
|
72
|
|
||
Luxembourg technical reserves
|
(12,742
|
)
|
|
(1,353
|
)
|
||
State tax
|
1,001
|
|
|
901
|
|
||
Other
|
443
|
|
|
(312
|
)
|
||
Total income tax reported
|
$
|
7,760
|
|
|
$
|
7,553
|
|
Effective tax rate
|
11.8
|
%
|
|
25.6
|
%
|
June 30, 2014
|
Recoverable (Payable) on Paid and Unpaid Losses and LAE
|
|
Commission Receivable
|
|
Premium Receivable (Payable)
|
||||||
AAIC
|
$
|
(199
|
)
|
|
$
|
—
|
|
|
$
|
40
|
|
Wesco
|
(3,714
|
)
|
|
—
|
|
|
(60
|
)
|
|||
AARC
|
543
|
|
|
100
|
|
|
(330
|
)
|
December 31, 2013
|
Recoverable (Payable) on Paid and Unpaid Losses and LAE
|
|
Commission Receivable
|
|
Premium Receivable (Payable)
|
||||||
AAIC
|
$
|
(200
|
)
|
|
$
|
836
|
|
|
$
|
1,359
|
|
Wesco
|
(1,067
|
)
|
|
—
|
|
|
13
|
|
|||
AARC
|
457
|
|
|
78
|
|
|
(281
|
)
|
Three Months Ended June 30, 2014
|
Assumed (Ceded) Earned Premiums
|
|
Commission Income (Expense)
|
|
Assumed (Ceded) Losses and LAE
|
||||||
AAIC
|
$
|
720
|
|
|
$
|
(173
|
)
|
|
$
|
448
|
|
Wesco
|
5,926
|
|
|
(1,490
|
)
|
|
5,456
|
|
|||
AARC
|
(330
|
)
|
|
89
|
|
|
(173
|
)
|
Three Months Ended June 30, 2013
|
Assumed (Ceded) Earned Premiums
|
|
Commission Income (Expense)
|
|
Assumed (Ceded) Losses and LAE
|
||||||
AAIC
|
$
|
1,084
|
|
|
$
|
(311
|
)
|
|
$
|
369
|
|
Wesco
|
4,506
|
|
|
(1,377
|
)
|
|
2,869
|
|
|||
AARC
|
(335
|
)
|
|
98
|
|
|
(208
|
)
|
Six Months Ended June 30, 2014
|
Assumed (Ceded) Earned Premiums
|
|
Commission Income (Expense)
|
|
Assumed (Ceded) Losses and LAE
|
||||||
AAIC
|
$
|
1,483
|
|
|
$
|
(385
|
)
|
|
$
|
1,004
|
|
Wesco
|
10,668
|
|
|
(2,742
|
)
|
|
8,686
|
|
|||
AARC
|
(623
|
)
|
|
172
|
|
|
(366
|
)
|
Six Months Ended June 30, 2013
|
Assumed (Ceded) Earned Premiums
|
|
Commission Income (Expense)
|
|
Assumed (Ceded) Losses and LAE
|
||||||
AAIC
|
$
|
2,239
|
|
|
$
|
(457
|
)
|
|
$
|
1,182
|
|
Wesco
|
6,449
|
|
|
(1,825
|
)
|
|
3,888
|
|
|||
AARC
|
(625
|
)
|
|
189
|
|
|
(411
|
)
|
Name of Insurer
|
Percentage Participation
|
ACP Re Ltd.
|
30%
|
Maiden Insurance Company, a subsidiary of Maiden
|
50%
|
Technology Insurance Company, a subsidiary of AmTrust
|
20%
|
Three Months Ended June 30, 2014
|
Ceded Earned Premiums
|
|
Ceding Commission Income
|
|
Ceded Losses and LAE
|
||||||
ACP Re Ltd.
|
$
|
3,678
|
|
|
$
|
1,201
|
|
|
$
|
2,340
|
|
Maiden Insurance Company
|
6,130
|
|
|
1,943
|
|
|
3,886
|
|
|||
Technology Insurance Company
|
2,452
|
|
|
786
|
|
|
1,574
|
|
|||
Total
|
$
|
12,260
|
|
|
$
|
3,930
|
|
|
$
|
7,800
|
|
Three Months Ended June 30, 2013
|
Ceded Earned Premiums
|
|
Ceding Commission Income
|
|
Ceded Losses and LAE
|
||||||
ACP Re Ltd.
|
$
|
44,120
|
|
|
$
|
13,342
|
|
|
$
|
28,071
|
|
Maiden Insurance Company
|
73,533
|
|
|
22,237
|
|
|
46,785
|
|
|||
Technology Insurance Company
|
29,413
|
|
|
8,894
|
|
|
18,714
|
|
|||
Total
|
$
|
147,066
|
|
|
$
|
44,473
|
|
|
$
|
93,570
|
|
Six Months Ended June 30, 2014
|
Ceded Earned Premiums
|
|
Ceding Commission Income
|
|
Ceded Losses and LAE
|
||||||
ACP Re Ltd.
|
$
|
12,673
|
|
|
$
|
3,899
|
|
|
$
|
9,307
|
|
Maiden Insurance Company
|
21,122
|
|
|
6,441
|
|
|
15,499
|
|
|||
Technology Insurance Company
|
8,449
|
|
|
2,585
|
|
|
6,218
|
|
|||
Total
|
$
|
42,244
|
|
|
$
|
12,925
|
|
|
$
|
31,024
|
|
Six Months Ended June 30, 2013
|
Ceded Earned Premiums
|
|
Ceding Commission Income
|
|
Ceded Losses and LAE
|
||||||
ACP Re Ltd.
|
$
|
87,263
|
|
|
$
|
26,930
|
|
|
$
|
55,033
|
|
Maiden Insurance Company
|
145,438
|
|
|
44,883
|
|
|
91,721
|
|
|||
Technology Insurance Company
|
58,175
|
|
|
17,954
|
|
|
36,688
|
|
|||
Total
|
$
|
290,876
|
|
|
$
|
89,767
|
|
|
$
|
183,442
|
|
June 30, 2014
|
Reinsurance Recoverable on Paid and Unpaid Losses and LAE
|
|
Ceded Commission Receivable
|
|
Ceded Premium Payable
|
||||||
ACP Re Ltd.
|
$
|
47,965
|
|
|
$
|
1,214
|
|
|
$
|
11,228
|
|
Maiden Insurance Company
|
79,942
|
|
|
2,023
|
|
|
18,712
|
|
|||
Technology Insurance Company
|
31,977
|
|
|
785
|
|
|
7,485
|
|
|||
Total
|
$
|
159,884
|
|
|
$
|
4,022
|
|
|
$
|
37,425
|
|
December 31, 2013
|
Reinsurance Recoverable on Paid and Unpaid Losses and LAE
|
|
Ceded Commission Receivable
|
|
Ceded Premium Payable
|
||||||
ACP Re Ltd.
|
$
|
74,997
|
|
|
$
|
7,669
|
|
|
$
|
30,604
|
|
Maiden Insurance Company
|
124,995
|
|
|
12,782
|
|
|
51,021
|
|
|||
Technology Insurance Company
|
49,998
|
|
|
4,958
|
|
|
20,408
|
|
|||
Total
|
$
|
249,990
|
|
|
$
|
25,409
|
|
|
$
|
102,033
|
|
Three Months Ended June 30, 2014
|
|
Property and Casualty
|
|
Accident and Health
|
|
Corporate and Other
|
|
Total
|
||||||||
Gross premium written
|
|
$
|
407,863
|
|
|
$
|
60,610
|
|
|
$
|
—
|
|
|
$
|
468,473
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net premium written
|
|
358,096
|
|
|
60,460
|
|
|
—
|
|
|
418,556
|
|
||||
Change in unearned premiums
|
|
3,527
|
|
|
(30,617
|
)
|
|
—
|
|
|
(27,090
|
)
|
||||
Net earned premium
|
|
361,623
|
|
|
29,843
|
|
|
—
|
|
|
391,466
|
|
||||
Ceding commission income - primarily related party
|
|
1,557
|
|
|
—
|
|
|
—
|
|
|
1,557
|
|
||||
Service and fee income
|
|
23,389
|
|
|
15,097
|
|
|
—
|
|
|
38,486
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Underwriting expenses:
|
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expense
|
|
231,008
|
|
|
24,596
|
|
|
—
|
|
|
255,604
|
|
||||
Acquisition costs and other underwriting expenses
|
|
61,440
|
|
|
12,978
|
|
|
—
|
|
|
74,418
|
|
||||
General and administrative
|
|
64,715
|
|
|
12,344
|
|
|
—
|
|
|
77,059
|
|
||||
Total underwriting expenses
|
|
357,163
|
|
|
49,918
|
|
|
—
|
|
|
407,081
|
|
||||
Underwriting income (loss)
|
|
29,406
|
|
|
(4,978
|
)
|
|
—
|
|
|
24,428
|
|
||||
Net investment income
|
|
—
|
|
|
—
|
|
|
11,321
|
|
|
11,321
|
|
||||
Other revenue
|
|
—
|
|
|
—
|
|
|
100
|
|
|
100
|
|
||||
Equity in losses of unconsolidated subsidiaries
|
|
—
|
|
|
—
|
|
|
(2,610
|
)
|
|
(2,610
|
)
|
||||
Interest expense
|
|
—
|
|
|
—
|
|
|
(2,519
|
)
|
|
(2,519
|
)
|
||||
Provision for income taxes
|
|
—
|
|
|
—
|
|
|
(424
|
)
|
|
(424
|
)
|
||||
Net income attributable to non-controlling interest
|
|
—
|
|
|
—
|
|
|
38
|
|
|
38
|
|
||||
Net income (loss) attributable NGHC
|
|
$
|
29,406
|
|
|
$
|
(4,978
|
)
|
|
$
|
5,906
|
|
|
$
|
30,334
|
|
Three Months Ended June 30, 2013
|
|
Property and Casualty
|
|
Accident and Health
|
|
Corporate and Other
|
|
Total
|
||||||||
Gross premium written
|
|
$
|
321,438
|
|
|
$
|
9,251
|
|
|
$
|
—
|
|
|
$
|
330,689
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net premium written
|
|
137,823
|
|
|
9,181
|
|
|
—
|
|
|
147,004
|
|
||||
Change in unearned premiums
|
|
7,546
|
|
|
—
|
|
|
—
|
|
|
7,546
|
|
||||
Net earned premium
|
|
145,369
|
|
|
9,181
|
|
|
—
|
|
|
154,550
|
|
||||
Ceding commission income - primarily related party
|
|
24,735
|
|
|
—
|
|
|
—
|
|
|
24,735
|
|
||||
Service and fee income
|
|
20,363
|
|
|
11,043
|
|
|
—
|
|
|
31,406
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Underwriting expenses:
|
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expense
|
|
93,205
|
|
|
5,464
|
|
|
—
|
|
|
98,669
|
|
||||
Acquisition costs and other underwriting expenses
|
|
25,505
|
|
|
6,717
|
|
|
—
|
|
|
32,222
|
|
||||
General and administrative
|
|
61,620
|
|
|
6,792
|
|
|
—
|
|
|
68,412
|
|
||||
Total underwriting expenses
|
|
180,330
|
|
|
18,973
|
|
|
—
|
|
|
199,303
|
|
||||
Underwriting income
|
|
10,137
|
|
|
1,251
|
|
|
—
|
|
|
11,388
|
|
||||
Net investment income
|
|
—
|
|
|
—
|
|
|
7,181
|
|
|
7,181
|
|
||||
Net realized losses
|
|
—
|
|
|
—
|
|
|
(751
|
)
|
|
(751
|
)
|
||||
Equity in earnings of unconsolidated subsidiaries
|
|
—
|
|
|
—
|
|
|
487
|
|
|
487
|
|
||||
Interest expense
|
|
—
|
|
|
—
|
|
|
(573
|
)
|
|
(573
|
)
|
||||
Provision for income taxes
|
|
—
|
|
|
—
|
|
|
(3,782
|
)
|
|
(3,782
|
)
|
||||
Net income attributable to non-controlling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income attributable NGHC
|
|
$
|
10,137
|
|
|
$
|
1,251
|
|
|
$
|
2,562
|
|
|
$
|
13,950
|
|
Six Months Ended June 30, 2014
|
|
Property and Casualty
|
|
Accident and Health
|
|
Corporate and Other
|
|
Total
|
||||||||
Gross premium written
|
|
$
|
1,014,471
|
|
|
$
|
100,144
|
|
|
$
|
—
|
|
|
$
|
1,114,615
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net premium written
|
|
886,094
|
|
|
99,947
|
|
|
—
|
|
|
986,041
|
|
||||
Change in unearned premiums
|
|
(197,252
|
)
|
|
(39,471
|
)
|
|
—
|
|
|
(236,723
|
)
|
||||
Net earned premium
|
|
688,842
|
|
|
60,476
|
|
|
—
|
|
|
749,318
|
|
||||
Ceding commission income - primarily related party
|
|
6,927
|
|
|
—
|
|
|
—
|
|
|
6,927
|
|
||||
Service and fee income
|
|
45,062
|
|
|
30,130
|
|
|
—
|
|
|
75,192
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Underwriting expenses:
|
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expense
|
|
440,438
|
|
|
40,513
|
|
|
—
|
|
|
480,951
|
|
||||
Acquisition costs and other underwriting expenses
|
|
117,213
|
|
|
31,578
|
|
|
—
|
|
|
148,791
|
|
||||
General and administrative
|
|
128,236
|
|
|
25,022
|
|
|
—
|
|
|
153,258
|
|
||||
Total underwriting expenses
|
|
685,887
|
|
|
97,113
|
|
|
—
|
|
|
783,000
|
|
||||
Underwriting income (loss)
|
|
54,944
|
|
|
(6,507
|
)
|
|
—
|
|
|
48,437
|
|
||||
Net investment income
|
|
—
|
|
|
—
|
|
|
20,535
|
|
|
20,535
|
|
||||
Other revenue
|
|
—
|
|
|
—
|
|
|
107
|
|
|
107
|
|
||||
Equity in losses of unconsolidated subsidiaries
|
|
—
|
|
|
—
|
|
|
(1,487
|
)
|
|
(1,487
|
)
|
||||
Interest expense
|
|
—
|
|
|
—
|
|
|
(3,112
|
)
|
|
(3,112
|
)
|
||||
Provision for income taxes
|
|
—
|
|
|
—
|
|
|
(7,760
|
)
|
|
(7,760
|
)
|
||||
Net income attributable to non-controlling interest
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
||||
Net income (loss) attributable NGHC
|
|
$
|
54,944
|
|
|
$
|
(6,507
|
)
|
|
$
|
8,289
|
|
|
$
|
56,726
|
|
Six Months Ended June 30, 2013
|
|
Property and Casualty
|
|
Accident and Health
|
|
Corporate and Other
|
|
Total
|
||||||||
Gross premium written
|
|
$
|
671,736
|
|
|
$
|
16,566
|
|
|
$
|
—
|
|
|
$
|
688,302
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net premium written
|
|
303,029
|
|
|
16,491
|
|
|
—
|
|
|
319,520
|
|
||||
Change in unearned premiums
|
|
(12,813
|
)
|
|
(1
|
)
|
|
—
|
|
|
(12,814
|
)
|
||||
Net earned premium
|
|
290,216
|
|
|
16,490
|
|
|
—
|
|
|
306,706
|
|
||||
Ceding commission income - primarily related party
|
|
49,992
|
|
|
—
|
|
|
—
|
|
|
49,992
|
|
||||
Service and fee income
|
|
41,413
|
|
|
17,255
|
|
|
—
|
|
|
58,668
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Underwriting expenses:
|
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expense
|
|
189,178
|
|
|
12,693
|
|
|
—
|
|
|
201,871
|
|
||||
Acquisition costs and other underwriting expenses
|
|
51,186
|
|
|
11,246
|
|
|
—
|
|
|
62,432
|
|
||||
General and administrative
|
|
125,445
|
|
|
9,776
|
|
|
—
|
|
|
135,221
|
|
||||
Total underwriting expenses
|
|
365,809
|
|
|
33,715
|
|
|
—
|
|
|
399,524
|
|
||||
Underwriting income
|
|
15,812
|
|
|
30
|
|
|
—
|
|
|
15,842
|
|
||||
Net investment income
|
|
—
|
|
|
—
|
|
|
13,654
|
|
|
13,654
|
|
||||
Net realized gains
|
|
—
|
|
|
—
|
|
|
947
|
|
|
947
|
|
||||
Other revenue
|
|
—
|
|
|
—
|
|
|
16
|
|
|
16
|
|
||||
Equity in losses of unconsolidated subsidiaries
|
|
—
|
|
|
—
|
|
|
(324
|
)
|
|
(324
|
)
|
||||
Interest expense
|
|
—
|
|
|
—
|
|
|
(916
|
)
|
|
(916
|
)
|
||||
Provision for income taxes
|
|
—
|
|
|
—
|
|
|
(7,553
|
)
|
|
(7,553
|
)
|
||||
Net income attributable to non-controlling interest
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
(44
|
)
|
||||
Net income attributable NGHC
|
|
$
|
15,812
|
|
|
$
|
30
|
|
|
$
|
5,780
|
|
|
$
|
21,622
|
|
June 30, 2014
|
|
Property and Casualty
|
|
Accident and Health
|
|
Corporate and Other
|
|
Total
|
||||||||
Premiums and other receivables
|
|
$
|
558,120
|
|
|
$
|
100,841
|
|
|
$
|
—
|
|
|
$
|
658,961
|
|
Prepaid reinsurance premiums
|
|
69,070
|
|
|
—
|
|
|
—
|
|
|
69,070
|
|
||||
Reinsurance recoverable on unpaid losses
|
|
904,403
|
|
|
—
|
|
|
—
|
|
|
904,403
|
|
||||
Deferred commission and other acquisition costs
|
|
99,740
|
|
|
14,995
|
|
|
—
|
|
|
114,735
|
|
||||
Goodwill and intangible assets, net
|
|
103,423
|
|
|
77,785
|
|
|
—
|
|
|
181,208
|
|
||||
Corporate and other assets
|
|
—
|
|
|
—
|
|
|
1,850,054
|
|
|
1,850,054
|
|
||||
Total
|
|
$
|
1,734,756
|
|
|
$
|
193,621
|
|
|
$
|
1,850,054
|
|
|
$
|
3,778,431
|
|
December 31, 2013
|
|
Property and Casualty
|
|
Accident and Health
|
|
Corporate and Other
|
|
Total
|
||||||||
Premiums and other receivables
|
|
$
|
434,433
|
|
|
$
|
14,819
|
|
|
$
|
—
|
|
|
$
|
449,252
|
|
Prepaid reinsurance premiums
|
|
50,878
|
|
|
—
|
|
|
—
|
|
|
50,878
|
|
||||
Reinsurance recoverable on unpaid losses
|
|
950,828
|
|
|
—
|
|
|
—
|
|
|
950,828
|
|
||||
Deferred commission and other acquisition costs
|
|
59,048
|
|
|
1,064
|
|
|
—
|
|
|
60,112
|
|
||||
Goodwill and intangible assets, net
|
|
93,769
|
|
|
63,146
|
|
|
—
|
|
|
156,915
|
|
||||
Corporate and other assets
|
|
—
|
|
|
—
|
|
|
1,169,530
|
|
|
1,169,530
|
|
||||
Total
|
|
$
|
1,588,956
|
|
|
$
|
79,029
|
|
|
$
|
1,169,530
|
|
|
$
|
2,837,515
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
2014
|
|
2013
|
||||
Gross premiums written - North America
|
|
$
|
418,729
|
|
|
$
|
330,689
|
|
Gross premiums written - Europe
|
|
49,744
|
|
|
—
|
|
||
Net premiums written - North America
|
|
161,184
|
|
|
72,615
|
|
||
Net premiums written - Bermuda
|
|
186,865
|
|
|
66,950
|
|
||
Net premiums written - Europe
|
|
70,507
|
|
|
7,439
|
|
||
Net premiums earned - North America
|
|
164,707
|
|
|
80,161
|
|
||
Net premiums earned - Bermuda
|
|
186,865
|
|
|
66,075
|
|
||
Net premiums earned - Europe
|
|
39,894
|
|
|
8,314
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2014
|
|
2013
|
||||
Gross premiums written - North America
|
|
$
|
1,034,640
|
|
|
$
|
688,302
|
|
Gross premiums written - Europe
|
|
79,975
|
|
|
—
|
|
||
Net premiums written - North America
|
|
571,319
|
|
|
181,250
|
|
||
Net premiums written - Bermuda
|
|
301,271
|
|
|
120,943
|
|
||
Net premiums written - Europe
|
|
113,451
|
|
|
17,327
|
|
||
Net premiums earned - North America
|
|
374,053
|
|
|
168,436
|
|
||
Net premiums earned - Bermuda
|
|
301,271
|
|
|
122,693
|
|
||
Net premiums earned - Europe
|
|
73,994
|
|
|
15,577
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(Amounts in Thousands)
|
||||||||||||||
Gross premium written
|
$
|
468,473
|
|
|
$
|
330,689
|
|
|
$
|
1,114,615
|
|
|
$
|
688,302
|
|
Ceded premiums (related parties - three months $12,690; $147,401 and six months $42,967; $291,501)
|
(49,917
|
)
|
|
(183,685
|
)
|
|
(128,574
|
)
|
|
(368,782
|
)
|
||||
Net premium written
|
$
|
418,556
|
|
|
$
|
147,004
|
|
|
$
|
986,041
|
|
|
$
|
319,520
|
|
Change in unearned premiums
|
(27,090
|
)
|
|
7,546
|
|
|
(236,723
|
)
|
|
(12,814
|
)
|
||||
Net earned premium
|
$
|
391,466
|
|
|
$
|
154,550
|
|
|
$
|
749,318
|
|
|
$
|
306,706
|
|
Ceding commission income (primarily related parties)
|
1,557
|
|
|
24,735
|
|
|
6,927
|
|
|
49,992
|
|
||||
Service, fees and other income
|
38,486
|
|
|
31,406
|
|
|
75,192
|
|
|
58,668
|
|
||||
Underwriting expenses:
|
|
|
|
|
|
|
|
||||||||
Loss and LAE
|
255,604
|
|
|
98,669
|
|
|
480,951
|
|
|
201,871
|
|
||||
Acquisition costs and other underwriting costs
|
74,418
|
|
|
32,222
|
|
|
148,791
|
|
|
62,432
|
|
||||
General and administrative
|
77,059
|
|
|
68,412
|
|
|
153,258
|
|
|
135,221
|
|
||||
Total underwriting expenses
|
$
|
407,081
|
|
|
$
|
199,303
|
|
|
$
|
783,000
|
|
|
$
|
399,524
|
|
Underwriting income
|
$
|
24,428
|
|
|
$
|
11,388
|
|
|
$
|
48,437
|
|
|
$
|
15,842
|
|
Net investment income
|
11,321
|
|
|
7,181
|
|
|
20,535
|
|
|
13,654
|
|
||||
Net realized gains (losses) on investments
|
—
|
|
|
(751
|
)
|
|
—
|
|
|
947
|
|
||||
Other revenue
|
100
|
|
|
—
|
|
|
107
|
|
|
16
|
|
||||
Equity in earnings (losses) of unconsolidated subsidiaries
|
(2,610
|
)
|
|
487
|
|
|
(1,487
|
)
|
|
(324
|
)
|
||||
Interest expense
|
(2,519
|
)
|
|
(573
|
)
|
|
(3,112
|
)
|
|
(916
|
)
|
||||
Income before provision for income taxes
|
$
|
30,720
|
|
|
$
|
17,732
|
|
|
$
|
64,480
|
|
|
$
|
29,219
|
|
Provision for income taxes
|
424
|
|
|
3,782
|
|
|
7,760
|
|
|
7,553
|
|
||||
Net income
|
$
|
30,296
|
|
|
$
|
13,950
|
|
|
$
|
56,720
|
|
|
$
|
21,666
|
|
Net income (loss) attributable to non-controlling interest
|
38
|
|
|
—
|
|
|
6
|
|
|
(44
|
)
|
||||
Net income attributable NGHC
|
$
|
30,334
|
|
|
$
|
13,950
|
|
|
$
|
56,726
|
|
|
$
|
21,622
|
|
Net loss ratio
|
65.3
|
%
|
|
63.8
|
%
|
|
64.2
|
%
|
|
65.8
|
%
|
||||
Net operating expense ratio (non-GAAP)
|
28.5
|
%
|
|
28.8
|
%
|
|
29.4
|
%
|
|
29.0
|
%
|
||||
Net combined ratio (non-GAAP)
|
93.8
|
%
|
|
92.6
|
%
|
|
93.6
|
%
|
|
94.8
|
%
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Reconciliation of net operating expense ratio (non-GAAP):
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(Amounts in Thousands)
|
||||||||||||||
Total expenses
|
$
|
409,600
|
|
|
$
|
199,876
|
|
|
$
|
786,112
|
|
|
$
|
400,440
|
|
Less: Loss and loss adjustment expense
|
255,604
|
|
|
98,669
|
|
|
480,951
|
|
|
201,871
|
|
||||
Less: Interest expense
|
2,519
|
|
|
573
|
|
|
3,112
|
|
|
916
|
|
||||
Less: Ceding commission income
|
1,557
|
|
|
24,735
|
|
|
6,927
|
|
|
49,992
|
|
||||
Less: Service, fees and other income
|
38,486
|
|
|
31,406
|
|
|
75,192
|
|
|
58,668
|
|
||||
Net operating expense
|
$
|
111,434
|
|
|
$
|
44,493
|
|
|
$
|
219,930
|
|
|
$
|
88,993
|
|
Net earned premium
|
$
|
391,466
|
|
|
$
|
154,550
|
|
|
$
|
749,318
|
|
|
$
|
306,706
|
|
Net operating expense ratio (non-GAAP)
|
28.5
|
%
|
|
28.8
|
%
|
|
29.4
|
%
|
|
29.0
|
%
|
|
|
Three Months Ended June 30,
|
|
|
||||||||
(amounts in thousands)
|
|
2014
|
|
2013
|
|
Change
|
||||||
Installment fees
|
|
$
|
7,322
|
|
|
$
|
7,053
|
|
|
$
|
269
|
|
Commission revenue
|
|
14,878
|
|
|
10,527
|
|
|
4,351
|
|
|||
General agent fees
|
|
7,842
|
|
|
4,967
|
|
|
2,875
|
|
|||
Late payment fees
|
|
2,987
|
|
|
2,863
|
|
|
124
|
|
|||
Finance and processing fees
|
|
3,369
|
|
|
3,826
|
|
|
(457
|
)
|
|||
Other
|
|
2,088
|
|
|
2,170
|
|
|
(82
|
)
|
|||
Total
|
|
$
|
38,486
|
|
|
$
|
31,406
|
|
|
$
|
7,080
|
|
|
|
Six Months Ended June 30,
|
|
|
||||||||
(amounts in thousands)
|
|
2014
|
|
2013
|
|
Change
|
||||||
Installment fees
|
|
$
|
14,205
|
|
|
$
|
17,063
|
|
|
$
|
(2,858
|
)
|
Commission revenue
|
|
29,738
|
|
|
16,816
|
|
|
12,922
|
|
|||
General agent fees
|
|
15,167
|
|
|
9,419
|
|
|
5,748
|
|
|||
Late payment fees
|
|
5,485
|
|
|
5,444
|
|
|
41
|
|
|||
Finance and processing fees
|
|
6,509
|
|
|
5,451
|
|
|
1,058
|
|
|||
Other
|
|
4,088
|
|
|
4,475
|
|
|
(387
|
)
|
|||
Total
|
|
$
|
75,192
|
|
|
$
|
58,668
|
|
|
$
|
16,524
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(Amounts in Thousands)
|
||||||||||||||
Gross premium written
|
$
|
407,863
|
|
|
$
|
321,438
|
|
|
$
|
1,014,471
|
|
|
$
|
671,736
|
|
Ceded premiums
|
(49,767
|
)
|
|
(183,615
|
)
|
|
(128,377
|
)
|
|
(368,707
|
)
|
||||
Net premium written
|
$
|
358,096
|
|
|
$
|
137,823
|
|
|
$
|
886,094
|
|
|
$
|
303,029
|
|
Change in unearned premiums
|
3,527
|
|
|
7,546
|
|
|
(197,252
|
)
|
|
(12,813
|
)
|
||||
Net earned premium
|
$
|
361,623
|
|
|
$
|
145,369
|
|
|
$
|
688,842
|
|
|
$
|
290,216
|
|
Ceding Commission Income (primarily related parties)
|
1,557
|
|
|
24,735
|
|
|
6,927
|
|
|
49,992
|
|
||||
Service and fee income
|
23,389
|
|
|
20,363
|
|
|
45,062
|
|
|
41,413
|
|
||||
Underwriting expenses:
|
|
|
|
|
|
|
|
||||||||
Loss and LAE
|
231,008
|
|
|
93,205
|
|
|
440,438
|
|
|
189,178
|
|
||||
Acquisition costs and other underwriting costs
|
61,440
|
|
|
25,505
|
|
|
117,213
|
|
|
51,186
|
|
||||
General and administrative
|
64,715
|
|
|
61,620
|
|
|
128,236
|
|
|
125,445
|
|
||||
Total underwriting expenses
|
$
|
357,163
|
|
|
$
|
180,330
|
|
|
$
|
685,887
|
|
|
$
|
365,809
|
|
Underwriting income
|
$
|
29,406
|
|
|
$
|
10,137
|
|
|
$
|
54,944
|
|
|
$
|
15,812
|
|
Net loss ratio
|
63.9
|
%
|
|
64.1
|
%
|
|
63.9
|
%
|
|
65.2
|
%
|
||||
Net operating expense ratio (non-GAAP)
|
28.0
|
%
|
|
28.9
|
%
|
|
28.1
|
%
|
|
29.4
|
%
|
||||
Net combined ratio (non-GAAP)
|
91.9
|
%
|
|
93.0
|
%
|
|
92.0
|
%
|
|
94.6
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
Reconciliation of net operating expense ratio (non-GAAP):
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(Amounts in Thousands)
|
||||||||||||||
Total underwriting expenses
|
$
|
357,163
|
|
|
$
|
180,330
|
|
|
$
|
685,887
|
|
|
$
|
365,809
|
|
Less: Loss and loss adjustment expense
|
231,008
|
|
|
93,205
|
|
|
440,438
|
|
|
189,178
|
|
||||
Less: Ceding Commission Income
|
1,557
|
|
|
24,735
|
|
|
6,927
|
|
|
49,992
|
|
||||
Less: Service, Fees and Other Income
|
23,389
|
|
|
20,363
|
|
|
45,062
|
|
|
41,413
|
|
||||
Net operating expense
|
$
|
101,209
|
|
|
$
|
42,027
|
|
|
$
|
193,460
|
|
|
$
|
85,226
|
|
Net earned premium
|
$
|
361,623
|
|
|
$
|
145,369
|
|
|
$
|
688,842
|
|
|
$
|
290,216
|
|
Net operating expense ratio (non-GAAP)
|
28.0
|
%
|
|
28.9
|
%
|
|
28.1
|
%
|
|
29.4
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(Amounts in Thousands)
|
||||||||||||||
Gross premium written
|
$
|
60,610
|
|
|
$
|
9,251
|
|
|
$
|
100,144
|
|
|
$
|
16,566
|
|
Ceded premiums
|
(150
|
)
|
|
(70
|
)
|
|
(197
|
)
|
|
(75
|
)
|
||||
Net premium written
|
$
|
60,460
|
|
|
$
|
9,181
|
|
|
$
|
99,947
|
|
|
$
|
16,491
|
|
Change in unearned premiums
|
(30,617
|
)
|
|
—
|
|
|
(39,471
|
)
|
|
(1
|
)
|
||||
Net earned premium
|
$
|
29,843
|
|
|
$
|
9,181
|
|
|
$
|
60,476
|
|
|
$
|
16,490
|
|
Service and fee income
|
15,097
|
|
|
11,043
|
|
|
30,130
|
|
|
17,255
|
|
||||
Underwriting expenses:
|
|
|
|
|
|
|
|
||||||||
Loss and LAE
|
24,596
|
|
|
5,464
|
|
|
40,513
|
|
|
12,693
|
|
||||
Acquisition costs and other underwriting costs
|
12,978
|
|
|
6,717
|
|
|
31,578
|
|
|
11,246
|
|
||||
General and administrative
|
12,344
|
|
|
6,792
|
|
|
25,022
|
|
|
9,776
|
|
||||
Total underwriting expenses
|
$
|
49,918
|
|
|
$
|
18,973
|
|
|
$
|
97,113
|
|
|
$
|
33,715
|
|
Underwriting income (loss)
|
$
|
(4,978
|
)
|
|
$
|
1,251
|
|
|
$
|
(6,507
|
)
|
|
$
|
30
|
|
Net loss ratio
|
82.4
|
%
|
|
59.5
|
%
|
|
67.0
|
%
|
|
77.0
|
%
|
||||
Net operating expense ratio (non-GAAP)
|
34.3
|
%
|
|
26.9
|
%
|
|
43.8
|
%
|
|
22.8
|
%
|
||||
Net combined ratio (non-GAAP)
|
116.7
|
%
|
|
86.4
|
%
|
|
110.8
|
%
|
|
99.8
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
Reconciliation of net operating expense ratio (non-GAAP):
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(Amounts in Thousands)
|
||||||||||||||
Total underwriting expenses
|
$
|
49,918
|
|
|
$
|
18,973
|
|
|
$
|
97,113
|
|
|
$
|
33,715
|
|
Less: Loss and loss adjustment expense
|
24,596
|
|
|
5,464
|
|
|
40,513
|
|
|
12,693
|
|
||||
Less: Service, Fees and Other Income
|
15,097
|
|
|
11,043
|
|
|
30,130
|
|
|
17,255
|
|
||||
Net operating expense
|
$
|
10,225
|
|
|
$
|
2,466
|
|
|
$
|
26,470
|
|
|
$
|
3,767
|
|
Net earned premium
|
$
|
29,843
|
|
|
$
|
9,181
|
|
|
$
|
60,476
|
|
|
$
|
16,490
|
|
Net operating expense ratio (non-GAAP)
|
34.3
|
%
|
|
26.9
|
%
|
|
43.8
|
%
|
|
22.8
|
%
|
June 30, 2014
|
|
Cost or Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross
Unrealized Losses |
|
Fair Value
|
||||||||
|
|
|
|
(amounts in thousands)
|
|
|
||||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
$
|
15,542
|
|
|
$
|
628
|
|
|
$
|
(907
|
)
|
|
$
|
15,263
|
|
Preferred stock
|
|
5,045
|
|
|
3
|
|
|
(175
|
)
|
|
4,873
|
|
||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and Federal agencies
|
|
190,920
|
|
|
1,160
|
|
|
(169
|
)
|
|
191,911
|
|
||||
States and political subdivisions bonds
|
|
152,667
|
|
|
3,039
|
|
|
(908
|
)
|
|
154,798
|
|
||||
Residential mortgage-backed securities
|
|
386,005
|
|
|
8,474
|
|
|
(1,907
|
)
|
|
392,572
|
|
||||
Corporate bonds
|
|
699,501
|
|
|
39,742
|
|
|
(1,198
|
)
|
|
738,045
|
|
||||
Asset-backed other securities
|
|
999
|
|
|
—
|
|
|
—
|
|
|
999
|
|
||||
Foreign government
|
|
6,233
|
|
|
—
|
|
|
(14
|
)
|
|
6,219
|
|
||||
Commercial mortgage-backed securities
|
|
21,544
|
|
|
834
|
|
|
—
|
|
|
22,378
|
|
||||
Subtotal
|
|
$
|
1,478,456
|
|
|
$
|
53,880
|
|
|
$
|
(5,278
|
)
|
|
$
|
1,527,058
|
|
Less: Securities pledged
|
|
62,637
|
|
|
555
|
|
|
(39
|
)
|
|
63,153
|
|
||||
Total
|
|
$
|
1,415,819
|
|
|
$
|
53,325
|
|
|
$
|
(5,239
|
)
|
|
$
|
1,463,905
|
|
December 31, 2013
|
|
Cost or Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross
Unrealized Losses |
|
Fair Value
|
||||||||
|
|
|
|
(amounts in thousands)
|
|
|
||||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
$
|
1,939
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,939
|
|
Preferred stock
|
|
5,000
|
|
|
—
|
|
|
(652
|
)
|
|
4,348
|
|
||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and Federal agencies
|
|
30,655
|
|
|
920
|
|
|
—
|
|
|
31,575
|
|
||||
States and political subdivisions bonds
|
|
101,105
|
|
|
1,681
|
|
|
(3,202
|
)
|
|
99,584
|
|
||||
Residential mortgage-backed securities
|
|
272,820
|
|
|
4,136
|
|
|
(7,527
|
)
|
|
269,429
|
|
||||
Corporate bonds
|
|
477,442
|
|
|
21,397
|
|
|
(7,044
|
)
|
|
491,795
|
|
||||
Commercial mortgage-backed securities
|
|
8,179
|
|
|
—
|
|
|
(51
|
)
|
|
8,128
|
|
||||
Subtotal
|
|
$
|
897,140
|
|
|
$
|
28,134
|
|
|
$
|
(18,476
|
)
|
|
$
|
906,798
|
|
Less: Securities pledged
|
|
133,013
|
|
|
3,884
|
|
|
(2,975
|
)
|
|
133,922
|
|
||||
Total
|
|
$
|
764,127
|
|
|
$
|
24,250
|
|
|
$
|
(15,501
|
)
|
|
$
|
772,876
|
|
June 30, 2014
|
|
Cost or Amortized Cost
|
|
Fair Value
|
|
Percentage of Fixed-Maturity and Preferred Securities
|
|||||
|
|
(amounts in thousands)
|
|||||||||
U.S. Treasury
|
|
$
|
190,920
|
|
|
$
|
191,911
|
|
|
12.7
|
%
|
AAA
|
|
412,446
|
|
|
419,914
|
|
|
27.8
|
%
|
||
AA, AA+, AA-
|
|
218,790
|
|
|
223,807
|
|
|
14.8
|
%
|
||
A, A+, A-
|
|
284,584
|
|
|
301,488
|
|
|
19.9
|
%
|
||
BBB, BBB+, BBB-
|
|
304,730
|
|
|
319,659
|
|
|
21.1
|
%
|
||
BB+ and lower
|
|
51,444
|
|
|
55,016
|
|
|
3.7
|
%
|
||
Total
|
|
$
|
1,462,914
|
|
|
$
|
1,511,795
|
|
|
100.0
|
%
|
December 31, 2013
|
|
Cost or Amortized Cost
|
|
Fair Value
|
|
Percentage of Fixed-Maturity and Preferred Securities
|
|||||
|
|
(amounts in thousands)
|
|||||||||
U.S. Treasury
|
|
$
|
30,656
|
|
|
$
|
31,575
|
|
|
3.5
|
%
|
AAA
|
|
69,893
|
|
|
69,616
|
|
|
7.7
|
%
|
||
AA, AA+, AA-
|
|
377,956
|
|
|
374,479
|
|
|
41.4
|
%
|
||
A, A+, A-
|
|
170,879
|
|
|
181,621
|
|
|
20.1
|
%
|
||
BBB, BBB+, BBB-
|
|
207,764
|
|
|
210,336
|
|
|
23.2
|
%
|
||
BB+ and lower
|
|
38,053
|
|
|
37,232
|
|
|
4.1
|
%
|
||
Total
|
|
$
|
895,201
|
|
|
$
|
904,859
|
|
|
100.0
|
%
|
June 30, 2014
|
|
AAA
|
|
AA+,
AA, AA- |
|
A+,A,A-
|
|
BBB+,
BBB, BBB- |
|
BB+ or
Lower |
|
Fair
Value |
|
% of
Corporate Bonds Portfolio |
||||||||
|
|
|
|
|
|
(amounts in thousands)
|
|
|
|
|
||||||||||||
Corporate Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Institutions
|
|
1.7
|
%
|
|
8.7
|
%
|
|
28.2
|
%
|
|
9.3
|
%
|
|
1.8
|
%
|
|
$
|
366,192
|
|
|
49.7
|
%
|
Industrials
|
|
—
|
%
|
|
2.7
|
%
|
|
7.1
|
%
|
|
32.2
|
%
|
|
3.6
|
%
|
|
336,833
|
|
|
45.6
|
%
|
|
Utilities/Other
|
|
—
|
%
|
|
—
|
%
|
|
1.6
|
%
|
|
1.8
|
%
|
|
1.3
|
%
|
|
35,020
|
|
|
4.7
|
%
|
|
|
|
1.7
|
%
|
|
11.4
|
%
|
|
36.9
|
%
|
|
43.3
|
%
|
|
6.7
|
%
|
|
$
|
738,045
|
|
|
100.0
|
%
|
December 31, 2013
|
|
AAA
|
|
AA+,
AA, AA- |
|
A+,A,A-
|
|
BBB+,
BBB, BBB- |
|
BB+ or
Lower |
|
Fair
Value |
|
% of
Corporate Bonds Portfolio |
||||||||
|
|
|
|
|
|
(amounts in thousands)
|
|
|
|
|
||||||||||||
Corporate Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Institutions
|
|
2.5
|
%
|
|
12.1
|
%
|
|
28.7
|
%
|
|
13.9
|
%
|
|
0.5
|
%
|
|
$
|
283,766
|
|
|
57.7
|
%
|
Industrials
|
|
—
|
%
|
|
1.8
|
%
|
|
4.7
|
%
|
|
26.7
|
%
|
|
4.3
|
%
|
|
184,649
|
|
|
37.5
|
%
|
|
Utilities/Other
|
|
—
|
%
|
|
—
|
%
|
|
0.7
|
%
|
|
2.2
|
%
|
|
1.9
|
%
|
|
23,380
|
|
|
4.8
|
%
|
|
|
|
2.5
|
%
|
|
13.9
|
%
|
|
34.1
|
%
|
|
42.8
|
%
|
|
6.7
|
%
|
|
$
|
491,795
|
|
|
100.0
|
%
|
June 30, 2014
|
|
Cost or Amortized Cost
|
|
Fair Value
|
||||
|
|
(amounts in thousands)
|
||||||
Due in one year or less
|
|
$
|
11,840
|
|
|
$
|
11,950
|
|
Due after one year through five years
|
|
298,690
|
|
|
306,268
|
|
||
Due after five years through ten years
|
|
644,233
|
|
|
676,029
|
|
||
Due after ten years
|
|
95,557
|
|
|
97,725
|
|
||
Mortgage-backed securities
|
|
407,549
|
|
|
414,950
|
|
||
Total
|
|
$
|
1,457,869
|
|
|
$
|
1,506,922
|
|
|
|
Less Than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||||||||
June 30, 2014
|
|
Fair
Market Value |
|
Unrealized
Losses |
|
No. of
Positions Held |
|
Fair
Market Value |
|
Unrealized
Losses |
|
No. of
Positions Held |
|
Fair
Market Value |
|
Unrealized
Losses |
||||||||||||||
|
|
|
|
|
|
(amounts in thousands)
|
|
|
|
|
||||||||||||||||||||
Common stock
|
|
$
|
1,033
|
|
|
$
|
(907
|
)
|
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,033
|
|
|
$
|
(907
|
)
|
Preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,828
|
|
|
(175
|
)
|
|
1
|
|
|
4,828
|
|
|
(175
|
)
|
||||||
U.S. Government
|
|
166,971
|
|
|
(169
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166,971
|
|
|
(169
|
)
|
||||||
States and political subdivisions
|
|
18,807
|
|
|
(215
|
)
|
|
7
|
|
|
11,470
|
|
|
(693
|
)
|
|
11
|
|
|
30,277
|
|
|
(908
|
)
|
||||||
Residential Mortgage-backed
|
|
126,116
|
|
|
(1,877
|
)
|
|
11
|
|
|
2,063
|
|
|
(30
|
)
|
|
3
|
|
|
128,179
|
|
|
(1,907
|
)
|
||||||
Commercial Mortgage-backed
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign government
|
|
6,221
|
|
|
(14
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,221
|
|
|
(14
|
)
|
||||||
Corporate bonds
|
|
25,773
|
|
|
(125
|
)
|
|
12
|
|
|
36,593
|
|
|
(1,073
|
)
|
|
17
|
|
|
62,366
|
|
|
(1,198
|
)
|
||||||
Total
|
|
$
|
344,921
|
|
|
$
|
(3,307
|
)
|
|
34
|
|
|
$
|
54,954
|
|
|
$
|
(1,971
|
)
|
|
32
|
|
|
$
|
399,875
|
|
|
$
|
(5,278
|
)
|
|
|
Less Than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||||||||
December 31, 2013
|
|
Fair
Market Value |
|
Unrealized
Losses |
|
No. of
Positions Held |
|
Fair
Market Value |
|
Unrealized
Losses |
|
No. of
Positions Held |
|
Fair
Market Value |
|
Unrealized
Losses |
||||||||||||||
|
|
|
|
|
|
(amounts in thousands)
|
|
|
|
|
||||||||||||||||||||
Preferred stock
|
|
$
|
4,348
|
|
|
$
|
(652
|
)
|
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
4,348
|
|
|
$
|
(652
|
)
|
States and political subdivisions
|
|
32,770
|
|
|
(2,622
|
)
|
|
18
|
|
|
2,600
|
|
|
(580
|
)
|
|
2
|
|
|
35,370
|
|
|
(3,202
|
)
|
||||||
Residential Mortgage-backed
|
|
176,491
|
|
|
(7,527
|
)
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
176,491
|
|
|
(7,527
|
)
|
||||||
Commercial Mortgage-backed
|
|
8,128
|
|
|
(51
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,128
|
|
|
(51
|
)
|
||||||
Corporate bonds
|
|
128,362
|
|
|
(4,051
|
)
|
|
39
|
|
|
41,673
|
|
|
(2,993
|
)
|
|
9
|
|
|
170,035
|
|
|
(7,044
|
)
|
||||||
Total
|
|
$
|
350,099
|
|
|
$
|
(14,903
|
)
|
|
66
|
|
|
$
|
44,273
|
|
|
$
|
(3,573
|
)
|
|
11
|
|
|
$
|
394,372
|
|
|
$
|
(18,476
|
)
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||
|
|
(amounts in thousands)
|
||||||
Restricted cash
|
|
$
|
13,034
|
|
|
$
|
1,155
|
|
Restricted investments - fixed maturities at fair value
|
|
44,079
|
|
|
42,092
|
|
||
Total restricted cash and investments
|
|
$
|
57,113
|
|
|
$
|
43,247
|
|
(amounts in thousands, except number of life settlement contracts)
Expected Maturity Term in Years
|
|
Number of
Life Settlement Contracts |
|
Fair Value
(1)
|
|
Face Value
|
|||||
June 30, 2014
|
|
|
|
|
|
|
|
|
|
||
0 – 1
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
1 – 2
|
|
3
|
|
|
17,688
|
|
|
25,000
|
|
||
2 – 3
|
|
7
|
|
|
41,209
|
|
|
68,000
|
|
||
3 – 4
|
|
2
|
|
|
5,370
|
|
|
15,000
|
|
||
4 – 5
|
|
9
|
|
|
16,942
|
|
|
43,000
|
|
||
Thereafter
|
|
267
|
|
|
194,990
|
|
|
1,695,209
|
|
||
Total
|
|
288
|
|
|
$
|
276,199
|
|
|
$
|
1,846,209
|
|
(1)
|
The LSC Entities determined the fair value as of
June 30, 2014
based on 222 policies out of
288
policies, as the LSC Entities assigned no value to 66 of the policies as of
June 30, 2014
. The LSC Entities estimate the fair value of a life insurance policy using a cash flow model with an appropriate discount rate. In some cases, the cash flow model calculates the value of an individual policy to be negative, and therefore the fair value of the policy is zero as no liability exists when a negative value is calculated. The LSC Entities are not contractually bound to pay the premium on its life settlement contracts and, therefore, would not pay a willing buyer to assume title of these contracts. Additionally, certain of the LSC Entities' acquired policies were structured to have low premium payments at inception of the policy term, which later escalate greatly towards the tail end of the policy term. At the current time, the LSC Entities expense all premiums paid, even on policies with zero fair value. Once the premium payments escalate, the LSC Entities may allow the policies to lapse. In the event that death benefits are realized in the time frame between initial acquisition and premium escalation, it is a benefit to cash flow of the LSC Entities.
|
|
|
June 30, 2014
|
||
Number of policies with a negative value from discounted cash flow model as of period end
|
|
66
|
|
|
Premiums paid for the preceding twelve month period for period ended
|
|
$
|
7,342
|
|
Death benefit received
|
|
$
|
3,012
|
|
(amounts in thousands)
|
|
Premiums
Due on Life Settlement Contracts |
||
2014
|
|
$
|
41,008
|
|
2015
|
|
43,688
|
|
|
2016
|
|
61,031
|
|
|
2017
|
|
39,847
|
|
|
2018
|
|
38,984
|
|
|
Thereafter
|
|
552,485
|
|
|
|
|
$
|
777,043
|
|
(amounts in thousands)
|
|
Six Months Ended June 30,
|
||||||
|
|
2014
|
|
2013
|
||||
Cash and Cash equivalents provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
234,226
|
|
|
$
|
39,917
|
|
Investing activities
|
|
(544,807
|
)
|
|
(93,056
|
)
|
||
Financing activities
|
|
348,707
|
|
|
101,572
|
|
||
Net Increase in Cash and Cash Equivalents
|
|
$
|
38,126
|
|
|
$
|
48,433
|
|
|
|
|
|
|
||||
(amounts in thousands)
|
|
June 30, 2014
|
|
December 31, 2013
|
||||
Selected Assets:
|
|
|
|
|
||||
Premiums receivable, net
|
|
$
|
658,961
|
|
|
$
|
449,252
|
|
Goodwill and Intangible assets
|
|
$
|
181,208
|
|
|
$
|
156,915
|
|
Selected Liabilities:
|
|
|
|
|
||||
Loss and loss expense reserves
|
|
$
|
1,386,111
|
|
|
$
|
1,259,241
|
|
Unearned premium
|
|
$
|
751,322
|
|
|
$
|
476,232
|
|
Ceded reinsurance premium payable
|
|
$
|
43,601
|
|
|
$
|
93,534
|
|
Accounts Payable and accrued expenses
|
|
$
|
239,391
|
|
|
$
|
91,143
|
|
Deferred income taxes and income taxes payable
|
|
$
|
46,566
|
|
|
$
|
26,463
|
|
Hypothetical Change in Interest Rates
|
|
Fair Value
|
|
Estimated
Change in
Fair Value
|
|
Hypothetical Percentage
Increase (Decrease) in
Stockholders’ Equity
|
|||||
|
|
(Amounts in Thousands)
|
|||||||||
200 basis point increase
|
|
$
|
1,354,723
|
|
|
$
|
(152,199
|
)
|
|
(10.1
|
)%
|
100 basis point increase
|
|
1,428,562
|
|
|
(78,360
|
)
|
|
(5.2
|
)
|
||
No change
|
|
1,506,922
|
|
|
—
|
|
|
—
|
|
||
100 basis point decrease
|
|
1,589,803
|
|
|
82,881
|
|
|
5.5
|
|
||
200 basis point decrease
|
|
1,680,218
|
|
|
173,296
|
|
|
11.5
|
|
Exhibit No.
|
|
Description
|
|
|
|
3.1
|
|
Certificate of Designations for 7.50% Non-Cumulative Preferred Stock, Series A (filed herewith)
|
4.1
|
|
Form of Stock Certificate evidencing 7.50% Non-Cumulative Preferred Stock, Series A (filed herewith)
|
4.2
|
|
Indenture, dated as of May 23, 2014 by and between NGHC, as Issuer, and The Bank of New York Mellon, as Trustee (incorporated herein by reference to Exhibit 4.1 to NGHC’s Current Report on Form 8-K (File No. 001-36311) filed on May 28, 2014)
|
4.3
|
|
First Supplemental Indenture, dated as of May 23, 2014 by and between NGHC, as Issuer, and The Bank of New York Mellon, as Trustee (incorporated herein by reference to Exhibit 4.2 to NGHC’s Current Report on Form 8-K (File No. 001-36311) filed on May 28, 2014)
|
4.4
|
|
The Company will file with the SEC upon request, pursuant to the requirements of Item 601(b)(4) of Regulation S-K, documents defining rights of holders of the Company’s long-term indebtedness
|
10.1
|
|
Amended and Restated Personal Lines Stock Purchase Agreement dated as of April 8, 2014 by and between ACP Re, Ltd. and NGHC (incorporated herein by reference to Exhibit 10.20 to NGHC’s Form S-1/A (File No. 333-195262) filed on April 30, 2014)
|
10.2
|
|
Personal Lines Master Agreement dated as of April 8, 2014 by and between ACP Re, Ltd. and NGHC (incorporated herein by reference to Exhibit 10.22 to NGHC’s Form S-1/A (File No. 333-195262) filed on April 30, 2014)
|
10.3
|
|
Credit Agreement dated as of May 30, 2014 by and among NGHC, the Lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, KeyBank National Association, as Syndication Agent, and Associated Bank, National Association and First Niagara Bank, N.A., as Co-Documentation Agents (incorporated herein by reference to Exhibit 10.1 to NGHC’s Current Report on Form 8-K (File No. 001-36311) filed on June 2, 2014)
|
10.4
|
|
Amended and Restated Personal Lines Master Agreement dated as of July 23, 2014 by and between ACP Re Ltd. and NGHC (filed herewith)
|
10.5
|
|
Form of Restricted Stock Unit Agreement for the NGHC 2013 Equity Incentive Plan (filed herewith)
|
12.1
|
|
Computation of Ratio of Earnings to Fixed Charges (filed herewith)
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
|
101.1*
|
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at June 30, 2014 and December 31, 2013; (ii) the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2014 and 2013; (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2014 and 2013; (iv) the Condensed Consolidated Statements of Changes in Stockholders' Equity for the six months ended June 30, 2014 and 2013; (v) the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013; and (vi) the Notes to Unaudited Condensed Consolidated Financial Statements (submitted electronically herewith).
|
|
|
*
|
In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101.1 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
|
|
NATIONAL GENERAL HOLDINGS CORP.
|
|
August 11, 2014
|
|
|
|
By:
|
/s/ Michael Karfunkel
|
|
|
Name: Michael Karfunkel Title: Chairman, President and Chief Executive Officer
|
|
|
|
|
By:
|
/s/ Michael Weiner
|
|
|
Name: Michael Weiner
Title: Chief Financial Officer
|
Section 1.
|
Designation
.
|
Section 2.
|
Number of Shares
.
|
Section 3.
|
Definitions
.
|
Section 4.
|
Dividends
.
|
Section 5.
|
Liquidation Rights
.
|
Section 6.
|
Redemption
.
|
Section 7.
|
Voting Rights
.
|
(A)
|
any amendment, alteration or repeal of any provision of the Certificate of Incorporation or this Certificate of Designations so as to adversely affect the rights, preferences, privileges or voting powers of the Series A Preferred Stock; or
|
(B)
|
any consummation of a binding share exchange or reclassification involving the Series A Preferred Stock, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in each case (x) the shares of Series A Preferred Stock remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, in each case, that is an entity organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and (y) such shares of Series A Preferred Stock remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, and limitations and restrictions thereof, taken as a whole, as are not less favorable to the holders thereof than the rights, preferences, privileges and voting powers,
|
Section 8.
|
Ranking
.
|
Section 9.
|
Conversion
.
|
Section 10.
|
Repurchase
.
|
Section 11.
|
Unissued or Reacquired Shares
.
|
Section 12.
|
Preemptive Rights
.
|
Section 13.
|
Record Holders
.
|
Section 14.
|
Notices
.
|
Section 15.
|
Other Rights
.
|
By:
|
/s/ Jeffrey Weissmann
Name: Jeffrey Weissmann Title: General Counsel and Secretary |
TEN COM - as tenants in common
|
UNIF GIFT MIN ACT or U/G/M/A - Uniform Gifts to Minors Act
|
JT TEN -
|
as joint tenants with right of survivorship
and not as tenants in common |
Exhibit A
|
LPT Agreement
|
Exhibit B
|
Administrative Services Agreement
|
Exhibit C
|
Personal Lines MGA Agreement
|
Section
|
Description
|
Section 3.3
|
Noncontravention; Consents
|
Section 4.3
|
Noncontravention; Consents
|
Section 7.1(d)
|
Consents
|
(i)
|
the right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to National General and that money damages would not provide an adequate remedy to National General; and
|
(ii)
|
the right and remedy to require the Restricted Persons to account for and pay over to National General any profits, monies, accruals, increments or other benefits derived or received by the Restricted Persons as the result of any transactions constituting a breach of the Restrictive Covenants.
|
1.
|
CastlePoint National Insurance Company, an insurance company organized under the laws of Illinois;
|
2.
|
North East Insurance Company, an insurance company organized under the laws of Maine;
|
3.
|
Preserver Insurance Company, an insurance company organized under the laws of New Jersey;
|
4.
|
York Insurance Company of Maine, an insurance company organized under the laws of Maine;
|
5.
|
Massachusetts Homeland Insurance Company, an insurance company organized under the laws of Massachusetts;
|
6.
|
Tower Insurance Company of New York, an insurance company organized under the laws of New York;
|
7.
|
Tower National Insurance Company, an insurance company organized under the laws of Massachusetts;
|
8.
|
Hermitage Insurance Company, an insurance company organized under the laws of New York;
|
9.
|
CastlePoint Florida Insurance Company, an insurance company organized under the laws of Florida; and
|
10.
|
CastlePoint Insurance Company, a New York property and casualty insurance company.
|
Award of RSUs
|
|
You have been granted an award, subject to the terms and conditions of this Agreement and the Plan, to receive shares of the Company’s Stock at a future date assuming you satisfy all conditions set forth in the Plan and this Agreement. Each RSU represents the right to receive one Share of Company Stock (each such share hereinafter referred to as an “
RSU Share
.”)
|
Grant Date
|
|
The effective date of this grant is
|
Vesting
|
|
of the RSUs shall vest on the first anniversary of the Grant Date and an additional on the following anniversaries of that date (each such date a “
Vesting Date
”); provided that from the Grant Date through the applicable Vesting Date, you have been continuously employed by the Company or an Affiliate thereof (or served as a non-employee member of the Company’s Board of Directors). Any fractional shares will be carried forward to the next Vesting Date.
|
Distribution Date
|
|
Subject to any overriding provisions in the Plan, you will receive a distribution of applicable RSU Shares within 30 days after the Vesting Date, except as follows:
(A) If the Company reasonably anticipates that the delivery of any RSU Shares as scheduled would not be deductible by the Company on account of the limitations under section 162(m) of the Internal Revenue Code of 1986 (the “
Code
”), the Company may delay delivery of such RSU Shares until your first taxable year in which the Company reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year, the payment would be deductible by the Company.
(B) Notwithstanding anything herein to the contrary, in the event that you are a “
specified employee
” of the Company within the meaning of Section 409A(a)(2)(B)(i) of the Code, the delivery of any RSU Shares shall be delayed until the earlier of (i) six months after your “
separation from service
” form the Company within the meaning of Section 409A(a)(2)(A)(i) of the Code; or (ii) your death, if such a delay is necessary to avoid the imposition upon you of additional tax and interest under Section 409A(a)(1)(B) of the Code.
|
Unsecured Creditor
|
|
The RSUs create a contractual obligation on the part of the Company to distribute to you RSU Shares at the time provided for in this Award Agreement. Neither you nor any other party claiming an interest under this Agreement shall have any interest whatsoever in any specific assets of the Company. Your right to receive RSU Shares hereunder is that of an unsecured general creditor of Company.
|
Termination of Employment
|
|
If your Employment (as defined below) terminates for any reason, other than retirement, death, Disability or Cause, then any unvested RSUs you hold at your termination will be forfeited.
“
Employment
” means that you are currently (i) an employee of the Company, (ii) are a member of the Company’s Board of Directors, or (iii) are otherwise providing services to the Company. You will not be considered to have terminated Employment hereunder for any purpose unless you have incurred a “separation from service” from the Company within the meaning of Section 409A(a)(2)(A)(i) of the Code.
|
Termination for
Cause |
|
If your Employment is terminated for Cause (as defined below), then you shall immediately forfeit all rights to any unvested RSUs and such RSUs shall expire immediately upon your termination.
For purposes of this Agreement, “
Caus
e” shall have the meaning set forth in the employment agreement between you and the Company (or an Affiliate), provided that if there is no employment agreement, “Cause” shall mean:
(a) willful misconduct or gross negligence;
(b) conviction of a felony or conviction of a crime involving moral turpitude;
(c) any act constituting fraud or the misappropriation or embezzlement of money or other property of the Company; and
(d) any willful act or course of conduct constituting an abuse of office or authority which has a material adverse impact on the Company’s reputation or financial condition.
|
Retirement
|
|
If your Employment has been in effect for at least five years and your Employment terminates due to your: (i) retirement on or after your sixty-fifth birthday; or (ii) retirement on or after your fifty-fifth birthday with the consent of the Company, your RSUs will automatically vest as to the number of RSUs that would have vested had you remained in Employment for the 12-month period immediately following your retirement. Any unvested RSUs you hold at your retirement will be forfeited.
|
Death
|
|
If your Employment terminates because of your death, your RSUs will automatically vest as to the number of RSUs that would have vested had you remained in Employment for the 12-month period immediately following your death. Any unvested RSUs held by you at the time of your death will be forfeited.
|
Disability
|
|
If your Employment terminates because of your Disability (defined below), your RSUs will automatically vest as to the number of RSUs that would have vested had you remained in Employment for the 12 month period immediately following your Disability. Any unvested RSUs held by you at your termination will be forfeited.
For purposes of this Agreement, “
Disability
” shall mean the award holder is unable to perform the duties of their service (or other services) (i) for a period of 90 consecutive days, or (ii) any 120 days during any consecutive 12 month period.
|
Termination without Cause within 12 Months of Change in Control
|
|
Notwithstanding anything contained in this Agreement to the contrary, if your Employment with the Company (or any affiliate) is terminated by the Company without Cause within 12 months following the effective date of a “Change in Control”, the Board of Directors may accelerate the vesting of all or any portion of your unvested RSUs.
|
Recapture Rights
|
|
In the event that you violate any of your obligations pursuant to the Confidentiality, Non-Competition, or Non-Solicitation provisions of this Agreement, you agree to return, within five days of receipt of written demand from the Company, any gains you realize from the vesting of all or any RSUs within the 6 months immediately preceding such violation, and any unvested RSUs shall be immediately forfeited. This provision shall be construed in accordance with Section 10 of the Plan, including, without limitation, Section 10(c).
|
Confidentiality
|
|
During your Employment, you will have access to confidential or proprietary data or information of the Company (and its affiliates) and its operations. You agree that you will not at any time divulge or communicate the Confidential Information (defined below) to any person, nor shall you direct any employee to divulge or communicate to any person (other than to a person bound by confidentiality obligations similar to those contained herein and other than as necessary in performing your duties hereunder), or use to the detriment of the Company (or any of its affiliates) or for the benefit of any other person, any Confidential Information. This restriction shall survive your Employment hereunder, whether by the normal expiration thereof or otherwise.
The term
“Confidential Information”
shall mean all information, whether or not reduced to written or recorded form, that is related to the Company and that is not generally known or accessible to members of the public and/or competitors of the Company nor intended for general dissemination, whether furnished by the Company or compiled by the employee, including, without limitation, relating to the Company’s (or any affiliate’s) financial performance, customers, existing or proposed future projects, prospects, or business strategies, personnel information, financial information, customer lists, supplier lists, trade secrets, information regarding operations, systems, services, know‑how, computer and any other processed or collated data, computer programs, pricing, marketing and advertising data.
You understand the Company intends to maintain the confidentiality of the Confidential Information notwithstanding that employees of the Company may have free access to the information for the purpose of performing their duties with the Company, and notwithstanding that employees not expressly bound by agreements similar to this agreement may have access to such information for job purposes. You acknowledge that Confidential Information need not be marked as such to preserve the confidential nature of the information.
|
Non-Competition
|
|
You acknowledge that (a) in the course of your Employment with the Company and its affiliates, you have, and will continue to, become familiar with the Company’s and its affiliates’ trade secrets, methods of doing business, business plans and other valuable confidential and proprietary information concerning the Company, its affiliates, their customers and business partners and that your services have been and will be of special, unique and extraordinary value to the Company and its affiliates. In consideration thereof and of this Award, during your Employment with the Company or an affiliate and for a period of one (1) year thereafter, you shall not, without the Company’s prior written approval, become engaged, directly or indirectly, as a director, officer, employee or 5% or more stockholder or equity interest owner in, partner in, or consultant to, any business that is directly competitive with the business of the Company (or any affiliate) in any area or region where the Company (or any affiliate) conducts business (“
Competition
”). Notwithstanding the foregoing, you shall not be deemed to be in Competition with the Company if you provide evidence satisfactory to the Company, in its sole and absolute discretion, that you: (i) work in a separate division, department or unit that does not compete with the business of the Company (or any affiliate); and (ii) will not have contact with the division, department or unit that does compete with the business of the Company (or any affiliate). If you received this Award as a non-employee member of the Company’s Board of Directors, this provision will not apply to you unless your Employment is terminated for Cause (as defined above).
|
Non-Solicitation
|
|
During Employment and for a period of two (2) years thereafter, you shall not, without the prior written consent of the Company, directly or indirectly, on your own behalf or on behalf of any other person, firm, corporation or business entity: (a) induce or attempt to induce any agent, broker, affinity group or policyholder of the Company (or any affiliate), or any prior agent, affinity group or policyholder that was an agent, affinity group or policyholder within twelve (12) months of such contact, to withdraw, decrease or cancel its business with the Company (or any affiliate) or otherwise terminate any written or oral agreement or understanding or other relationship with the Company (or any affiliate); (b) solicit or attempt to solicit, service or attempt to service, or for the purpose of obtaining the business of any agent, broker, affinity group or policyholder of the Company (or any affiliate), or any prior agent, affinity group or policyholder that was an agent, broker, affinity group or policyholder within twelve (12) months of such contact, to the extent the business solicited is similar to, or competitive with, the business of the Company (or any affiliate), engage in discussions or other communications with (regardless of who initiates such discussions or communications) any person, firm or entity that was an actual or prospective agent, broker, affinity group or policyholder of the Company during any part of the twelve (12) month period immediately preceding termination of Employment if you participated, directly or indirectly, in the solicitation or servicing of that agent, broker, affinity group or policyholder or prospective agent, broker, affinity group or policyholder, or supervised or managed those who did, during your Employment with the Company at any time during such twelve (12) month period immediately preceding your termination of Employment; (c) solicit or attempt to solicit, hire or attempt to hire, or communicate with, any person who is an employee, individual consultant or independent contractor of the Company (or any affiliate), or any prior employee, individual consultant or independent contractor that was an employee, consultant or independent contractor within twelve (12) months of such contact, with the purpose or intent of attracting such person from the employ of the Company (or any affiliate); or (d) induce or attempt to induce any person who is an employee, individual consultant or independent contractor of the Company (or any affiliate) to terminate or limit his or her Employment or other relationship with the Company (or any affiliate), or any prior employee, individual consultant or independent contractor that was an employee, individual consultant or independent contractor within twelve (12) months of such contact.
|
Withholding Taxes
|
|
In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the exercise or sale of shares arising from this grant, the Company shall have the right to require such payments from you, or withhold such minimum statutory amounts from other payments due to you from the Company. Payment of your withholding or other taxes may be made via one of the forms set forth above, or as otherwise determined by the Administrator.
|
Transfer of RSUS
|
|
The RSUs covered by this Award Agreement are non-transferable by you. Any attempt by you to transfer these RSUs will result in the RSUs becoming invalid, except upon your death by the laws of descent and distribution.
|
No Employment Rights
|
|
Neither your RSUs nor this Agreement give you the right to be retained by the Company in any capacity and your Employment may be terminated at any time and for any reason.
|
Shareholder Rights
|
|
You have no rights as a shareholder of the Company unless and until RSU Shares have been issued (or an appropriate book entry has been made). Except as described in the Plan, no adjustments are made for dividends or other rights if the applicable record date occurs before your RSU Shares are issued (or an appropriate book entry has been made).
|
Applicable Law
Data Privacy
|
|
This Agreement shall be governed by the laws of the State of Delaware, with consent to jurisdiction by you in the State of New York.
To administer the Plan, the Company may process personal data about you. Such data includes the information provided in this Agreement, other appropriate personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information deemed appropriate by the Company to facilitate the administration of the Plan.
By accepting this award, you consent to the Company’s processing of such personal data and the transfer of such data outside the country in which you work or are employed, including, with respect to non-U.S. residents, to the United States, to transferees who shall include the Company and other persons designated by the Company to administer the Plan.
|
Consent to Electronic Delivery
|
|
Certain statutory materials relating to the Plan may be delivered to you in electronic form. By accepting this grant, you consent to electronic delivery and acknowledge receipt of these materials, including the Plan.
|
|
|
Six Months Ended June 30,
|
|
Fiscal Year Ended
|
|
Period from March 1, 2010 (inception) to December 31,
|
||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Earnings
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pretax income from continuing operations before adjustment for income or loss from equity investees
|
|
$
|
65,967
|
|
|
$
|
52,257
|
|
|
$
|
46,353
|
|
|
$
|
48,655
|
|
|
$
|
140,743
|
|
Fixed charges
|
|
3,112
|
|
|
2,042
|
|
|
1,787
|
|
|
1,994
|
|
|
1,795
|
|
|||||
|
|
$
|
69,079
|
|
|
$
|
54,299
|
|
|
$
|
48,140
|
|
|
$
|
50,649
|
|
|
$
|
142,538
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest capitalized
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-controlling interest in pre-tax income of subsidiaries that have not incurred fixed charges
|
|
(6
|
)
|
|
82
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|||||
|
|
(6
|
)
|
|
82
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|||||
Total Earnings
|
|
$
|
69,085
|
|
|
$
|
54,217
|
|
|
$
|
48,140
|
|
|
$
|
50,635
|
|
|
$
|
142,538
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expensed and capitalized, and amortized premiums, discounts and capitalized expenses related to indebtedness
|
|
3,112
|
|
|
2,042
|
|
|
1,787
|
|
|
1,994
|
|
|
1,795
|
|
|||||
Expense of the interest within rental expense
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Fixed Charges
|
|
$
|
3,112
|
|
|
$
|
2,042
|
|
|
$
|
1,787
|
|
|
$
|
1,994
|
|
|
$
|
1,795
|
|
Ratio of Earnings to Fixed Charges
|
|
22.20
|
|
26.55
|
|
26.94
|
|
25.39
|
|
79.41
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of National General Holdings Corp.;
|
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)) 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)
|
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
|
(c)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: August 11, 2014
|
By:
|
/s/ Michael Karfunkel
|
|
|
Michael Karfunkel
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of National General Holdings Corp.;
|
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)) 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)
|
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
|
(c)
|
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 the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
August 11, 2014
|
By:
|
/s/ Michael Weiner
|
|
|
Michael Weiner
Chief Financial Officer
(Principal Financial Officer)
|
1.
|
The Quarterly Report on Form 10-Q for the three and six months ended June 30, 2014 (the “Report”) of the Company 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:
August 11, 2014
|
By:
|
/s/ Michael Karfunkel
|
|
|
Michael Karfunkel
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
The Quarterly Report on Form 10-Q for the three and six months ended June 30, 2014 (the “Report”) of the Company 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:
August 11, 2014
|
By:
|
/s/ Michael Weiner
|
|
|
Michael Weiner
Chief Financial Officer
(Principal Financial Officer)
|