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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Protective Ins Corp (MM) | NASDAQ:BWINB | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 23.35 | 8.00 | 26.00 | 0 | 01:00:00 |
Indiana
(State or other jurisdiction of
Incorporation or organization)
|
35-0160330
(I.R.S. Employer
Identification No.)
|
111 Congressional Boulevard, Carmel, Indiana
(Address of principal executive offices)
|
46032
(Zip Code)
|
·
|
general economic conditions, including weakness of the financial markets, prevailing interest rate levels and stock and credit market performance, which may affect or continue to affect (among other things) our ability to sell our products and to collect amounts due to us, our ability to access capital resources and the costs associated with such access to capital and the market value of our investments;
|
·
|
our ability to obtain adequate premium rates and manage our growth strategy;
|
·
|
increasing competition in the sale of our insurance products and services resulting from the entrance of new competitors into, or the expansion of the operations of existing competitors in, our markets and our ability to retain existing customers;
|
·
|
other changes in the markets for our insurance products;
|
·
|
changes in the legal or regulatory environment, which may affect the manner in which claims are adjusted or litigated, including loss and loss adjustment expense;
|
·
|
legal or regulatory changes or actions, including those relating to the regulation of the sale, underwriting and pricing of insurance products and services and capital requirements;
|
·
|
technology or network security disruptions;
|
·
|
adequacy of insurance reserves;
|
·
|
availability of reinsurance and ability of reinsurers to pay their obligations;
|
·
|
our ability to attract and retain qualified employees;
|
·
|
tax law and accounting changes; and
|
·
|
legal actions brought against us.
|
1.
|
Protective Insurance Company
(referred to herein as "Protective")
, which is licensed by insurance authorities in all 50 states, the District of Columbia, all Canadian provinces and Puerto Rico;
|
2.
|
Protective Specialty Insurance Company (referred to herein as "Protective Specialty"), which is currently approved for excess and surplus lines business by insurance authorities in 48 states and the District of Columbia and licensed in Indiana;
|
3.
|
Sagamore Insurance Company
(referred to herein as "Sagamore")
, which is licensed by insurance authorities in 49 states and the District of Columbia and approved for excess and surplus lines business in one additional state;
|
4.
|
B&L Brokerage Services, Inc.
(referred to herein as "BLBS"), an Indiana domiciled insurance broker licensed in all 50 states and the District of Columbia;
and
|
5.
|
B&L Insurance, Ltd. (referred to herein as "BLI"), which is domiciled and licensed in Bermuda.
|
-
|
Commercial motor vehicle liability, physical damage and general liability insurance.
|
-
|
Workers' compensation insurance.
|
-
|
Specialized accident (medical and indemnity) insurance
for independent contractors in the trucking industry.
|
-
|
Non-trucking motor vehicle liability insurance for independent contractors.
|
-
|
Fidelity and surety bonds.
|
-
|
Inland Marine insurance consisting principally of cargo insurance.
|
·
|
Reinsurance Assumptions
|
·
|
Professional Liability
|
·
|
$0.25 million to $1.3 million for policies written on or after July 3, 2016, and
|
·
|
$0.8 million to $4.1 million for policies written on or after July 3, 2017.
|
·
|
$2.5 million for policies written on or after July 3, 2016, and
|
·
|
$8.0 million for policies written on or after July 3, 2017.
|
2017
|
2016
|
2015
|
||||||||||
Reserves, gross of reinsurance
|
||||||||||||
recoverable, at the beginning of the year
|
$
|
576,330
|
$
|
513,596
|
$
|
506,102
|
||||||
Reinsurance recoverable on unpaid losses at the beginning of the year
|
251,563
|
211,843
|
210,519
|
|||||||||
Reserves at the beginning of the year
|
324,767
|
301,753
|
295,583
|
|||||||||
Provision for losses and loss expenses:
|
||||||||||||
Claims occurring during the current year
|
228,303
|
172,645
|
165,812
|
|||||||||
Claims occurring during prior years
|
19,215
|
13,836
|
(10,062
|
)
|
||||||||
Total incurred losses and loss expenses
|
247,518
|
186,481
|
155,750
|
|||||||||
Loss and loss expense payments:
|
||||||||||||
Claims occurring during the current year
|
67,234
|
54,239
|
56,710
|
|||||||||
Claims occurring during prior years
|
132,920
|
109,228
|
92,870
|
|||||||||
Total paid
|
200,154
|
163,467
|
149,580
|
|||||||||
Reserves at the end of the year
|
372,131
|
324,767
|
301,753
|
|||||||||
Reinsurance recoverable on unpaid losses at the end of the year
|
308,143
|
251,563
|
211,843
|
|||||||||
Reserves, gross of reinsurance
|
||||||||||||
recoverable, at the end of the year
|
$
|
680,274
|
$
|
576,330
|
$
|
513,596
|
Years in Which Losses Were Incurred
|
Reserve at December 31, 2016
|
(Savings) Deficiency Recorded During 2017
1
|
% (Savings) Deficiency
|
|||||||||
2016
|
$
|
118,406
|
$
|
(8,561
|
)
|
(7.2
|
%)
|
|||||
2015
|
69,463
|
(3,863
|
)
|
(5.6
|
%)
|
|||||||
2014
|
50,739
|
3,688
|
7.3
|
%
|
||||||||
2013
|
22,186
|
17,418
|
78.5
|
%
|
||||||||
2012
|
16,414
|
6,234
|
38.0
|
%
|
||||||||
2011 & Prior
|
47,559
|
4,299
|
9.0
|
%
|
||||||||
$
|
324,767
|
$
|
19,215
|
5.9
|
%
|
ANALYSIS OF LOSS AND LOSS ADJUSTMENT EXPENSE DEVELOPMENT--GAAP BASIS
|
||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
|||||||||||||||||||||||||||||||||
Liability for Unpaid Losses
|
||||||||||||||||||||||||||||||||||||||||||||
and Loss Adjustment
|
||||||||||||||||||||||||||||||||||||||||||||
Expenses
1
|
$
|
244,500
|
$
|
231,633
|
$
|
203,253
|
$
|
218,629
|
$
|
290,092
|
$
|
289,236
|
$
|
288,088
|
$
|
295,583
|
$
|
301,753
|
$
|
324,767
|
$
|
372,131
|
||||||||||||||||||||||
Liability Reestimated
|
||||||||||||||||||||||||||||||||||||||||||||
as of:
2
|
||||||||||||||||||||||||||||||||||||||||||||
One Year Later
|
227,423
|
222,049
|
194,430
|
208,933
|
280,217
|
283,673
|
277,734
|
285,521
|
315,589
|
343,982
|
||||||||||||||||||||||||||||||||||
Two Years Later
|
216,730
|
208,702
|
198,220
|
201,745
|
272,285
|
282,381
|
268,757
|
303,540
|
340,361
|
|||||||||||||||||||||||||||||||||||
Three Years Later
|
206,445
|
210,562
|
188,110
|
204,243
|
276,525
|
279,685
|
288,862
|
332,175
|
||||||||||||||||||||||||||||||||||||
Four Years Later
|
210,170
|
205,519
|
192,195
|
202,078
|
268,299
|
291,332
|
313,909
|
|||||||||||||||||||||||||||||||||||||
Five Years Later
|
208,132
|
208,398
|
187,792
|
198,518
|
275,517
|
298,861
|
||||||||||||||||||||||||||||||||||||||
Six Years Later
|
210,446
|
205,986
|
181,547
|
200,922
|
276,812
|
|||||||||||||||||||||||||||||||||||||||
Seven Years Later
|
209,288
|
200,460
|
181,998
|
203,692
|
||||||||||||||||||||||||||||||||||||||||
Eight Years Later
|
205,179
|
200,808
|
184,122
|
|||||||||||||||||||||||||||||||||||||||||
Nine Years Later
|
205,248
|
202,565
|
||||||||||||||||||||||||||||||||||||||||||
Ten Years Later
|
205,784
|
|||||||||||||||||||||||||||||||||||||||||||
Cumulative Redundancy (Deficiency)
3
|
$
|
38,716
|
$
|
29,068
|
$
|
19,131
|
$
|
14,937
|
$
|
13,280
|
$
|
(9,625
|
)
|
$
|
(25,821
|
)
|
$
|
(36,592
|
)
|
$
|
(38,608
|
)
|
$
|
(19,215
|
)
|
|||||||||||||||||||
Cumulative Amount of
|
||||||||||||||||||||||||||||||||||||||||||||
Liability Paid
|
||||||||||||||||||||||||||||||||||||||||||||
Through:
4
|
||||||||||||||||||||||||||||||||||||||||||||
One Year Later
|
$
|
76,970
|
$
|
84,777
|
$
|
74,182
|
$
|
72,393
|
$
|
94,003
|
$
|
103,941
|
$
|
92,275
|
$
|
92,870
|
$
|
109,228
|
$
|
132,920
|
||||||||||||||||||||||||
Two Years Later
|
124,870
|
120,628
|
107,413
|
109,382
|
156,271
|
162,087
|
159,282
|
166,642
|
195,951
|
|||||||||||||||||||||||||||||||||||
Three Years Later
|
145,857
|
142,731
|
125,038
|
133,507
|
193,566
|
205,452
|
166,642
|
222,295
|
||||||||||||||||||||||||||||||||||||
Four Years Later
|
157,724
|
152,679
|
137,460
|
147,462
|
214,873
|
202,803
|
234,158
|
|||||||||||||||||||||||||||||||||||||
Five Years Later
|
164,877
|
161,834
|
143,461
|
158,172
|
227,359
|
241,533
|
||||||||||||||||||||||||||||||||||||||
Six Years Later
|
170,554
|
166,290
|
148,101
|
166,112
|
234,578
|
|||||||||||||||||||||||||||||||||||||||
Seven Years Later
|
174,190
|
170,126
|
152,375
|
168,524
|
||||||||||||||||||||||||||||||||||||||||
Eight Years Later
|
177,275
|
173,867
|
153,999
|
|||||||||||||||||||||||||||||||||||||||||
Nine Years Later
|
180,569
|
174,902
|
||||||||||||||||||||||||||||||||||||||||||
Ten Years Later
|
180,701
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
|||||||||||||||||||||||||||||||||
Direct and Assumed:
|
||||||||||||||||||||||||||||||||||||||||||||
Liability for Unpaid Losses and Loss
|
||||||||||||||||||||||||||||||||||||||||||||
Adjustment Expenses
|
$
|
378,616
|
$
|
389,558
|
$
|
359,030
|
$
|
344,520
|
$
|
421,556
|
$
|
455,454
|
$
|
474,470
|
$
|
506,102
|
$
|
513,596
|
$
|
576,330
|
$
|
680,274
|
||||||||||||||||||||||
Liability Reestimated as of
|
||||||||||||||||||||||||||||||||||||||||||||
December 31, 2017
|
316,914
|
311,512
|
303,058
|
322,142
|
414,550
|
476,593
|
532,456
|
590,685
|
608,357
|
601,543
|
||||||||||||||||||||||||||||||||||
Cumulative Redundancy (Deficiency)
|
$
|
61,702
|
$
|
78,046
|
$
|
55,972
|
$
|
22,378
|
$
|
7,006
|
$
|
(21,139
|
)
|
$
|
(57,986
|
)
|
$
|
(84,583
|
)
|
$
|
(94,761
|
)
|
$
|
(25,213
|
)
|
|||||||||||||||||||
Ceded:
|
||||||||||||||||||||||||||||||||||||||||||||
Liability for Unpaid Losses and Loss
|
||||||||||||||||||||||||||||||||||||||||||||
Adjustment Expenses
|
$
|
134,116
|
$
|
157,925
|
$
|
155,777
|
$
|
125,891
|
$
|
131,464
|
$
|
166,218
|
$
|
186,382
|
$
|
210,519
|
$
|
211,843
|
$
|
251,563
|
$
|
308,143
|
||||||||||||||||||||||
Liability Reestimated as of
|
||||||||||||||||||||||||||||||||||||||||||||
December 31, 2017
|
111,130
|
108,947
|
118,936
|
118,450
|
137,738
|
177,732
|
218,547
|
258,510
|
267,996
|
257,561
|
||||||||||||||||||||||||||||||||||
Cumulative Redundancy (Deficiency)
|
$
|
22,986
|
$
|
48,978
|
$
|
36,841
|
$
|
7,441
|
$
|
(6,274
|
)
|
$
|
(11,514
|
)
|
$
|
(32,165
|
)
|
$
|
(47,991
|
)
|
$
|
(56,153
|
)
|
$
|
(5,998
|
)
|
||||||||||||||||||
Net:
|
||||||||||||||||||||||||||||||||||||||||||||
Liability for Unpaid Losses and Loss
|
||||||||||||||||||||||||||||||||||||||||||||
Adjustment Expenses
|
$
|
244,500
|
$
|
231,633
|
$
|
203,253
|
$
|
218,629
|
$
|
290,092
|
$
|
289,236
|
$
|
288,088
|
$
|
295,583
|
$
|
301,753
|
$
|
324,767
|
$
|
372,131
|
||||||||||||||||||||||
Liability Reestimated as of
|
||||||||||||||||||||||||||||||||||||||||||||
December 31, 2017
|
205,784
|
202,565
|
184,122
|
203,692
|
276,812
|
298,861
|
313,909
|
332,175
|
340,361
|
343,982
|
||||||||||||||||||||||||||||||||||
Cumulative Redundancy (Deficiency)
|
$
|
38,716
|
$
|
29,068
|
$
|
19,131
|
$
|
14,937
|
$
|
13,280
|
$
|
(9,625
|
)
|
$
|
(25,821
|
)
|
$
|
(36,592
|
)
|
$
|
(38,608
|
)
|
$
|
(19,215
|
)
|
2017
|
2016
|
|||||||
Fixed maturities:
|
||||||||
Agency collateralized mortgage obligations
|
1.9
|
%
|
0.8
|
%
|
||||
Agency mortgage-backed securities
|
3.2
|
0.6
|
||||||
Asset-backed securities
|
5.1
|
6.0
|
||||||
Bank loans
|
2.3
|
1.4
|
||||||
Certificates of deposit
|
0.4
|
0.4
|
||||||
Collateralized mortgage obligations
|
0.8
|
1.2
|
||||||
Corporate securities
|
23.2
|
19.0
|
||||||
Mortgage-backed securities
|
2.8
|
3.3
|
||||||
Municipal obligations
|
11.3
|
17.3
|
||||||
Non-U.S. government obligations
|
4.4
|
3.3
|
||||||
U.S. government obligations
|
5.7
|
12.3
|
||||||
Total fixed maturities
|
61.1
|
65.6
|
||||||
Short-term
|
0.1
|
0.2
|
||||||
Cash equivalents
|
6.9
|
8.0
|
||||||
Total fixed maturities and short-term
|
68.1
|
73.8
|
||||||
Limited partnerships (equity basis)
|
8.3
|
10.2
|
||||||
|
||||||||
Equity securities:
|
||||||||
Consumer
|
5.5
|
4.3
|
||||||
Energy
|
1.2
|
1.7
|
||||||
Financial
|
5.3
|
4.2
|
||||||
Industrial
|
3.0
|
2.8
|
||||||
Technology
|
1.5
|
1.2
|
||||||
Funds (e.g. mutual funds, closed end funds, ETFs)
|
5.9
|
0.9
|
||||||
Other
|
1.2
|
0.9
|
||||||
Total equity securities
|
23.6
|
16.0
|
||||||
100.0
|
%
|
100.0
|
%
|
2017
|
2016
|
|||||||
Less than one year
|
19.5
|
%
|
27.7
|
%
|
||||
1 to 5 years
|
53.4
|
52.7
|
||||||
5 to 10 years
|
13.0
|
9.7
|
||||||
More than 10 years
|
14.1
|
9.9
|
||||||
100.0
|
%
|
100.0
|
%
|
|||||
Average contractual life of portfolio (years)
|
4.9
|
4.5
|
2017
|
2016
|
|||||||
Before federal tax:
|
||||||||
Investment income
|
3.2
|
%
|
2.9
|
%
|
||||
Investment income plus investment gains
|
6.2
|
6.8
|
||||||
After federal tax:
|
||||||||
Investment income
|
2.3
|
2.2
|
||||||
Investment income plus investment gains
|
5.4
|
6.1
|
Cash
|
||||||||||||||||||||
Class A
|
Class B
|
Dividends
|
||||||||||||||||||
High
|
Low
|
High
|
Low
|
Declared
|
||||||||||||||||
2017:
|
||||||||||||||||||||
Fourth Quarter
|
$
|
24.36
|
$
|
21.95
|
$
|
24.70
|
$
|
22.30
|
$
|
.27
|
||||||||||
Third Quarter
|
23.85
|
21.41
|
24.90
|
21.20
|
.27
|
|||||||||||||||
Second Quarter
|
26.95
|
23.15
|
25.40
|
23.45
|
.27
|
|||||||||||||||
First Quarter
|
26.04
|
22.73
|
25.45
|
22.60
|
.27
|
|||||||||||||||
2016:
|
||||||||||||||||||||
Fourth Quarter
|
26.10
|
23.21
|
27.70
|
23.45
|
.26
|
|||||||||||||||
Third Quarter
|
26.50
|
23.04
|
27.25
|
24.43
|
.26
|
|||||||||||||||
Second Quarter
|
24.90
|
22.50
|
25.28
|
23.33
|
.26
|
|||||||||||||||
First Quarter
|
24.02
|
22.00
|
25.10
|
22.11
|
.26
|
Period Ending
|
||||||||||||||||||||||||
Index
|
12/31/12
|
12/31/13
|
12/31/14
|
12/31/15
|
12/31/16
|
12/31/17
|
||||||||||||||||||
Baldwin & Lyons, Inc.
|
100.00
|
119.26
|
117.09
|
113.91
|
124.49
|
123.93
|
||||||||||||||||||
Russell 2000 Index
|
100.00
|
138.82
|
145.62
|
139.19
|
168.85
|
193.58
|
||||||||||||||||||
Peer Group
|
100.00
|
160.92
|
167.94
|
182.04
|
219.76
|
238.34
|
Baldwin & Lyons, Inc. Peer Group
|
||
Amerisafe, Inc.
|
Heritage Insurance Holdings, Inc.
|
|
Atlas Financial Holdings, Inc.
|
James River Group Holdings, Ltd.
|
|
Donegal Group Inc.
|
NMI Holdings, Inc.
|
|
EMC Insurance Group Inc.
|
Safety Insurance Group, Inc.
|
|
Employers Holdings, Inc.
|
United Insurance Holdings Corp.
|
|
Federated National Holding Company
|
Universal Insurance Holdings, Inc.
|
|
HCI Group, Inc.
|
||
Hallmark Financial Services, Inc.
|
Year Ended December 31
|
||||||||||||||||||||
2017
|
2016
|
2015
|
2014
|
2013
|
||||||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||||||||||
Gross premiums written
|
$
|
504,737
|
$
|
403,004
|
$
|
383,553
|
$
|
382,388
|
$
|
369,476
|
||||||||||
Net premiums earned
|
328,145
|
276,011
|
263,335
|
261,627
|
252,743
|
|||||||||||||||
Net investment income
|
18,095
|
14,483
|
12,498
|
9,055
|
8,770
|
|||||||||||||||
Net realized gains (losses) on investments
|
19,686
|
23,228
|
(1,261
|
)
|
14,930
|
23,515
|
||||||||||||||
Losses and loss expenses incurred
|
247,518
|
186,481
|
155,750
|
159,596
|
150,701
|
|||||||||||||||
Net income
|
18,323
|
28,945
|
23,283
|
29,717
|
36,588
|
|||||||||||||||
Earnings per share -- net income
1
|
1.21
|
1.92
|
1.55
|
1.98
|
2.45
|
|||||||||||||||
Cash dividends per share
|
1.08
|
1.04
|
1.00
|
1.00
|
1.00
|
|||||||||||||||
Investment portfolio
2
|
854,595
|
749,501
|
729,877
|
757,421
|
703,259
|
|||||||||||||||
|
||||||||||||||||||||
Total assets
|
1,357,016
|
1,154,137
|
1,085,771
|
1,144,247
|
1,072,270
|
|||||||||||||||
Shareholders' equity
|
418,811
|
404,345
|
394,498
|
399,496
|
381,724
|
|||||||||||||||
Book value per share
1
|
27.83
|
26.81
|
26.25
|
26.67
|
25.57
|
2017
|
2016
|
|||||||
Fleet transportation
|
73.9
|
%
|
63.4
|
%
|
||||
All other
|
94.0
|
95.5
|
||||||
All lines
|
75.4
|
67.6
|
2016
|
2015
|
|||||||
Fleet transportation
|
63.4
|
%
|
55.7
|
%
|
||||
All other
|
95.5
|
96.4
|
||||||
All lines
|
67.6
|
59.2
|
2017
|
2016
|
2015
|
||||||||||
Reinsurance recoverable
|
$
|
318,331
|
$
|
255,024
|
$
|
215,888
|
||||||
Premium ceded (reduction to premium earned)
|
145,201
|
130,012
|
128,697
|
|||||||||
Losses ceded (reduction to losses incurred)
|
128,086
|
108,656
|
75,581
|
|||||||||
Reinsurance ceded credits (reduction to operating expenses)
|
23,187
|
33,512
|
28,956
|
•
|
Consistency in the individual case reserving processes;
|
•
|
The selection of loss development factors in the establishment of bulk reserves for incurred but not reported losses and loss expenses;
|
•
|
Projected future loss trend; and
|
•
|
Expected loss ratios for the current book of business, particularly the Company's fleet transportation products, where the number of accounts insured, selected SIRs, policy limits and reinsurance structures may vary widely from period to period.
|
10% Loss Ratio Increase
|
10% Loss Ratio Decrease
|
20% Loss Ratio Increase
|
20% Loss Ratio Decrease
|
|||||||||||||
Gross Reserves
|
$
|
61.1
|
$
|
(48.4
|
)
|
$
|
122.3
|
$
|
(82.0
|
)
|
||||||
Net Reserves
|
$
|
17.9
|
$
|
(14.0
|
)
|
$
|
34.3
|
$
|
(24.2
|
)
|
||||||
Net premiums earned
|
$
|
(27.2
|
)
|
$
|
31.0
|
$
|
(29.6
|
)
|
$
|
62.0
|
||||||
Cumulative Net Underwriting Income (Loss)
|
$
|
(45.1
|
)
|
$
|
45.0
|
$
|
(63.9
|
)
|
$
|
86.2
|
2017
|
2016
|
|||||||
Total deferred tax liabilities
|
$
|
(23,836
|
)
|
$
|
(24,969
|
)
|
||
Total deferred tax assets
|
9,478
|
13,557
|
||||||
Net deferred tax liabilities
|
$
|
(14,358
|
)
|
$
|
(11,412
|
)
|
Payments Due by Period
|
||||||||||||||||||||
Total
|
Less than 1 year
|
1 - 3 Years
|
3 - 5 Years
|
More Than 5 Years
|
||||||||||||||||
(dollars in millions)
|
||||||||||||||||||||
Loss and loss expense reserves
|
$
|
680.3
|
$
|
238.1
|
$
|
224.5
|
$
|
81.6
|
$
|
136.1
|
||||||||||
Investment commitment
|
1.4
|
1.4
|
-
|
-
|
-
|
|||||||||||||||
Operating leases
|
0.7
|
0.3
|
0.4
|
-
|
-
|
|||||||||||||||
Borrowings
|
20.0
|
20.0
|
-
|
-
|
-
|
|||||||||||||||
Total
|
$
|
702.4
|
$
|
259.8
|
$
|
224.9
|
$
|
81.6
|
$
|
136.1
|
Increase (Decrease)
|
||||||||||||
Fair
|
Interest
|
Equity
|
||||||||||
Value
|
Rate Risk
|
Risk
|
||||||||||
2017
|
||||||||||||
Fixed maturities
|
||||||||||||
Agency collateralized mortgage obligations
|
$
|
16,586
|
$
|
(820
|
)
|
$
|
-
|
|||||
Agency mortgage-backed securities
|
27,075
|
(1,103
|
)
|
-
|
||||||||
Asset-backed securities
|
43,469
|
(1,381
|
)
|
-
|
||||||||
Bank loans
|
19,488
|
(794
|
)
|
-
|
||||||||
Certificates of deposit
|
3,135
|
(83
|
)
|
-
|
||||||||
Collateralized mortgage obligations
|
6,492
|
(200
|
)
|
-
|
||||||||
Corporate securities
|
198,349
|
(5,126
|
)
|
-
|
||||||||
Mortgage-backed securities
|
24,204
|
(772
|
)
|
-
|
||||||||
Municipal obligations
|
96,650
|
(1,861
|
)
|
-
|
||||||||
Non-U.S. government obligations
|
37,394
|
(959
|
)
|
-
|
||||||||
U.S. government obligations
|
49,011
|
(886
|
)
|
-
|
||||||||
Total fixed maturities
|
521,853
|
(13,985
|
)
|
-
|
||||||||
Equity securities:
|
||||||||||||
Consumer
|
46,578
|
-
|
(4,658
|
)
|
||||||||
Energy
|
10,278
|
-
|
(1,028
|
)
|
||||||||
Financial
|
45,470
|
-
|
(4,547
|
)
|
||||||||
Industrial
|
25,402
|
-
|
(2,540
|
)
|
||||||||
Technology
|
13,061
|
-
|
(1,306
|
)
|
||||||||
Funds (e.g. mutual funds, closed end funds, ETFs)
|
50,291
|
-
|
(5,029
|
)
|
||||||||
Other
|
10,683
|
-
|
(1,068
|
)
|
||||||||
Total equity securities
|
201,763
|
-
|
(20,176
|
)
|
||||||||
Limited partnerships
|
70,806
|
-
|
(5,278
|
)
|
||||||||
Short-term
|
1,000
|
-
|
-
|
|||||||||
Total
|
$
|
795,422
|
$
|
(13,985
|
)
|
$
|
(25,454
|
)
|
||||
2016:
|
||||||||||||
Fixed maturities
|
||||||||||||
Agency collateralized mortgage obligations
|
$
|
6,171
|
$
|
-
|
$
|
-
|
||||||
Agency mortgage-backed securities
|
4,770
|
(202
|
)
|
-
|
||||||||
Asset-backed securities
|
45,183
|
(1,577
|
)
|
-
|
||||||||
Bank loans
|
10,349
|
-
|
-
|
|||||||||
Certificates of deposit
|
3,117
|
(111
|
)
|
-
|
||||||||
Collateralized mortgage obligations
|
9,104
|
(302
|
)
|
-
|
||||||||
Corporate securities
|
142,683
|
(4,026
|
)
|
-
|
||||||||
Mortgage-backed securities
|
24,571
|
(780
|
)
|
-
|
||||||||
Municipal obligations
|
129,335
|
(3,028
|
)
|
-
|
||||||||
Non-U.S. government obligations
|
24,681
|
(458
|
)
|
-
|
||||||||
U.S. government obligations
|
91,940
|
(1,249
|
)
|
-
|
||||||||
Total fixed maturities
|
491,904
|
(11,733
|
)
|
-
|
||||||||
Equity securities:
|
||||||||||||
Consumer
|
32,576
|
-
|
(3,258
|
)
|
||||||||
Energy
|
12,842
|
-
|
(1,284
|
)
|
||||||||
Financial
|
31,186
|
-
|
(3,119
|
)
|
||||||||
Industrial
|
21,145
|
-
|
(2,115
|
)
|
||||||||
Technology
|
8,858
|
-
|
(886
|
)
|
||||||||
Funds (e.g. mutual funds, closed end funds, ETFs)
|
6,995
|
-
|
(700
|
)
|
||||||||
Other
|
6,343
|
-
|
(634
|
)
|
||||||||
Total equity securities
|
119,945
|
-
|
(11,996
|
)
|
||||||||
Limited partnerships
|
76,469
|
-
|
(5,542
|
)
|
||||||||
Short-term
|
1,500
|
-
|
-
|
|||||||||
Total
|
$
|
689,818
|
$
|
(11,733
|
)
|
$
|
(17,538
|
)
|
Increase (Decrease)
|
||||||||||||
Fair
|
Interest
|
Equity
|
||||||||||
Value
|
Rate Risk
|
Risk
|
||||||||||
2017
|
||||||||||||
Fixed maturities
|
||||||||||||
Agency collateralized mortgage obligations
|
$
|
16,586
|
$
|
(1,229
|
)
|
$
|
-
|
|||||
Agency mortgage-backed securities
|
27,075
|
(1,657
|
)
|
-
|
||||||||
Asset-backed securities
|
43,469
|
(2,072
|
)
|
-
|
||||||||
Bank loans
|
19,488
|
(1,192
|
)
|
-
|
||||||||
Certificates of deposit
|
3,135
|
(125
|
)
|
-
|
||||||||
Collateralized mortgage obligations
|
6,492
|
(299
|
)
|
-
|
||||||||
Corporate securities
|
198,349
|
(7,690
|
)
|
-
|
||||||||
Mortgage-backed securities
|
24,204
|
(1,158
|
)
|
-
|
||||||||
Municipal obligations
|
96,650
|
(2,791
|
)
|
-
|
||||||||
Non-U.S. government obligations
|
37,394
|
(1,438
|
)
|
-
|
||||||||
U.S. government obligations
|
49,011
|
(1,329
|
)
|
-
|
||||||||
Total fixed maturities
|
521,853
|
(20,980
|
)
|
-
|
||||||||
Equity securities:
|
||||||||||||
Consumer
|
46,578
|
-
|
(6,987
|
)
|
||||||||
Energy
|
10,278
|
-
|
(1,542
|
)
|
||||||||
Financial
|
45,470
|
-
|
(6,821
|
)
|
||||||||
Industrial
|
25,402
|
-
|
(3,810
|
)
|
||||||||
Technology
|
13,061
|
-
|
(1,959
|
)
|
||||||||
Funds (e.g. mutual funds, closed end funds, ETFs)
|
50,291
|
-
|
(7,544
|
)
|
||||||||
Other
|
10,683
|
-
|
(1,602
|
)
|
||||||||
Total equity securities
|
201,763
|
-
|
(30,265
|
)
|
||||||||
Limited partnerships
|
70,806
|
-
|
(7,916
|
)
|
||||||||
Short-term
|
1,000
|
-
|
-
|
|||||||||
Total
|
$
|
795,422
|
$
|
(20,980
|
)
|
$
|
(38,181
|
)
|
||||
2016:
|
||||||||||||
Fixed maturities
|
||||||||||||
Agency collateralized mortgage obligations
|
$
|
6,171
|
$
|
-
|
$
|
-
|
||||||
Agency mortgage-backed securities
|
4,770
|
(303
|
)
|
-
|
||||||||
Asset-backed securities
|
45,183
|
(2,365
|
)
|
-
|
||||||||
Bank loans
|
10,349
|
-
|
-
|
|||||||||
Certificates of deposit
|
3,117
|
(167
|
)
|
-
|
||||||||
Collateralized mortgage obligations
|
9,104
|
(453
|
)
|
-
|
||||||||
Corporate securities
|
142,683
|
(6,039
|
)
|
-
|
||||||||
Mortgage-backed securities
|
24,571
|
(1,170
|
)
|
-
|
||||||||
Municipal obligations
|
129,335
|
(4,542
|
)
|
-
|
||||||||
Non-U.S. government obligations
|
24,681
|
(689
|
)
|
-
|
||||||||
U.S. government obligations
|
91,940
|
(1,872
|
)
|
-
|
||||||||
Total fixed maturities
|
491,904
|
(17,600
|
)
|
-
|
||||||||
Equity securities:
|
||||||||||||
Consumer
|
32,576
|
-
|
(4,886
|
)
|
||||||||
Energy
|
12,842
|
-
|
(1,926
|
)
|
||||||||
Financial
|
31,186
|
-
|
(4,678
|
)
|
||||||||
Industrial
|
21,145
|
-
|
(3,172
|
)
|
||||||||
Technology
|
8,858
|
-
|
(1,329
|
)
|
||||||||
Funds (e.g. mutual funds, closed end funds, ETFs)
|
6,995
|
-
|
(1,049
|
)
|
||||||||
Other
|
6,343
|
-
|
(951
|
)
|
||||||||
Total equity securities
|
119,945
|
-
|
(17,991
|
)
|
||||||||
Limited partnerships
|
76,469
|
-
|
(8,312
|
)
|
||||||||
Short-term
|
1,500
|
-
|
-
|
|||||||||
Total
|
$
|
689,818
|
$
|
(17,600
|
)
|
$
|
(26,303
|
)
|
Report of Independent Registered Public Accounting Firm
|
Consolidated Statements of Income
|
||||||||||||
Baldwin & Lyons, Inc. and Subsidiaries
|
||||||||||||
Year Ended December 31
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
(dollars in thousands, except per share data)
|
||||||||||||
Revenue:
|
||||||||||||
Net premiums earned
|
$
|
328,145
|
$
|
276,011
|
$
|
263,335
|
||||||
Net investment income
|
18,095
|
14,483
|
12,498
|
|||||||||
Commissions and other income
|
5,308
|
5,275
|
5,703
|
|||||||||
Net realized gains on investments, excluding
|
||||||||||||
impairment losses
|
19,835
|
28,971
|
6,439
|
|||||||||
Total other-than-temporary impairment losses on investments
|
(149
|
)
|
(5,743
|
)
|
(7,700
|
)
|
||||||
Net realized gains (losses) on investments
|
19,686
|
23,228
|
(1,261
|
)
|
||||||||
371,234
|
318,997
|
280,275
|
||||||||||
Expenses:
|
||||||||||||
Losses and loss expenses incurred
|
247,518
|
186,481
|
155,750
|
|||||||||
Other operating expenses
|
113,594
|
89,462
|
90,573
|
|||||||||
361,112
|
275,943
|
246,323
|
||||||||||
Income before federal income taxes (benefits)
|
10,122
|
43,054
|
33,952
|
|||||||||
Federal income taxes (benefits)
|
(8,201
|
)
|
14,109
|
10,669
|
||||||||
Net income
|
$
|
18,323
|
$
|
28,945
|
$
|
23,283
|
||||||
Per share data:
|
||||||||||||
Basic and diluted earnings
|
$
|
1.21
|
$
|
1.92
|
$
|
1.55
|
Consolidated Statements of Comprehensive Income
|
||||||||||||
Baldwin & Lyons, Inc. and Subsidiaries
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
(dollars in thousands)
|
||||||||||||
Net income
|
$
|
18,323
|
$
|
28,945
|
$
|
23,283
|
||||||
Other comprehensive income (loss), net of tax:
|
||||||||||||
Unrealized net gains (losses) on securities:
|
||||||||||||
Unrealized holding net gains (losses) arising during the period
|
17,340
|
8,618
|
(12,639
|
)
|
||||||||
Less: reclassification adjustment for net gains (losses)
|
||||||||||||
included in net income
|
(4,691
|
)
|
(13,491
|
)
|
(277
|
)
|
||||||
12,649
|
(4,873
|
)
|
(12,916
|
)
|
||||||||
Foreign currency translation adjustments
|
522
|
235
|
(1,456
|
)
|
||||||||
Other comprehensive income (loss)
|
13,171
|
(4,638
|
)
|
(14,372
|
)
|
|||||||
Comprehensive income
|
$
|
31,494
|
$
|
24,307
|
$
|
8,911
|
Consolidated Statements of Shareholders' Equity
|
||||||||||||
Baldwin & Lyons, Inc. and Subsidiaries
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
(dollars in thousands)
|
||||||||||||
Shareholders' equity at beginning of year:
|
$
|
404,345
|
$
|
394,498
|
$
|
399,496
|
||||||
Net income
|
18,323
|
28,945
|
23,283
|
|||||||||
Other comprehensive income (loss)
|
13,171
|
(4,638
|
)
|
(14,372
|
)
|
|||||||
Cash dividends paid to shareholders
|
(16,302
|
)
|
(15,803
|
)
|
(15,003
|
)
|
||||||
Issuance of common stock
|
1,154
|
1,343
|
1,094
|
|||||||||
Repurchase of common shares
|
(1,880
|
)
|
-
|
-
|
||||||||
Shareholders' equity at end of year:
|
$
|
418,811
|
$
|
404,345
|
$
|
394,498
|
Baldwin & Lyons, Inc. and Subsidiaries
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
|
(dollars in thousands)
|
|||||||||||
Operating activities
|
||||||||||||
Net income
|
$
|
18,323
|
$
|
28,945
|
$
|
23,283
|
||||||
Adjustments to reconcile net income to net cash
|
||||||||||||
provided by operating activities:
|
||||||||||||
Change in accounts receivable and unearned premium
|
2,678
|
(2,721
|
)
|
22,939
|
||||||||
Change in accrued investment income
|
(278
|
)
|
108
|
(307
|
)
|
|||||||
Change in reinsurance recoverable on paid losses
|
(446
|
)
|
692
|
4,458
|
||||||||
Change in losses and loss expenses reserves net of reinsurance
|
47,229
|
23,568
|
6,325
|
|||||||||
Change in other assets, other liabilities and current income taxes
|
45,188
|
(8,063
|
)
|
(28,299
|
)
|
|||||||
Amortization of net policy acquisition costs
|
47,387
|
18,085
|
21,314
|
|||||||||
Net policy acquisition costs deferred
|
(51,824
|
)
|
(17,813
|
)
|
(20,495
|
)
|
||||||
Provision for deferred income taxes (benefits)
|
(3,866
|
)
|
2,838
|
(1,819
|
)
|
|||||||
Bond amortization
|
1,865
|
3,030
|
3,388
|
|||||||||
Loss on sale of property and equipment
|
235
|
63
|
18
|
|||||||||
Depreciation
|
5,752
|
5,521
|
5,037
|
|||||||||
Net realized (gains) losses on investments
|
(19,686
|
)
|
(23,228
|
)
|
1,261
|
|||||||
Compensation expense related to restricted stock
|
1,154
|
1,343
|
1,094
|
|||||||||
Net cash provided by operating activities
|
93,711
|
32,368
|
38,197
|
|||||||||
Investing activities
|
||||||||||||
Purchases of fixed maturities and equity securities
|
(436,932
|
)
|
(400,670
|
)
|
(342,592
|
)
|
||||||
Purchases of limited partnership interests
|
(1,097
|
)
|
-
|
(409
|
)
|
|||||||
Distributions from limited partnerships
|
19,230
|
1,462
|
4,494
|
|||||||||
Proceeds from maturities
|
131,623
|
78,691
|
161,706
|
|||||||||
Proceeds from sales of fixed maturities
|
148,652
|
199,790
|
117,338
|
|||||||||
Proceeds from sales of equity securities
|
69,756
|
88,773
|
53,270
|
|||||||||
Net sales of short-term investments
|
500
|
11,258
|
746
|
|||||||||
Purchases of property and equipment
|
(6,661
|
)
|
(7,725
|
)
|
(7,662
|
)
|
||||||
Proceeds from disposals of property and equipment
|
582
|
1,059
|
277
|
|||||||||
Net cash used in investing activities
|
(74,347
|
)
|
(27,362
|
)
|
(12,832
|
)
|
||||||
Financing activities
|
||||||||||||
Dividends paid to shareholders
|
(16,302
|
)
|
(15,803
|
)
|
(15,003
|
)
|
||||||
Repurchase of common shares
|
(1,880
|
)
|
-
|
-
|
||||||||
Net cash used in financing activities
|
(18,182
|
)
|
(15,803
|
)
|
(15,003
|
)
|
||||||
Effect of foreign exchange rates on cash and cash equivalents
|
522
|
235
|
(1,456
|
)
|
||||||||
Increase (decrease) in cash and cash equivalents
|
1,704
|
(10,562
|
)
|
8,906
|
||||||||
Cash and cash equivalents at beginning of year
|
62,976
|
73,538
|
64,632
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
64,680
|
$
|
62,976
|
$
|
73,538
|
||||||
Supplemental Disclosures of Cash Flow Information
|
||||||||||||
Cash paid for income taxes, net of refunds
|
$
|
-
|
$
|
10,173
|
$
|
14,500
|
||||||
Cash paid for interest
|
$
|
456
|
$
|
309
|
$
|
286
|
Net
|
||||||||||||||||||||
Cost or
|
Gross
|
Gross
|
Unrealized
|
|||||||||||||||||
Fair
|
Amortized
|
Unrealized
|
Unrealized
|
Gains
|
||||||||||||||||
Value
|
Cost
|
Gains
|
Losses
|
(Losses)
|
||||||||||||||||
December 31, 2016
|
||||||||||||||||||||
Fixed maturities
|
||||||||||||||||||||
Agency collateralized mortgage obligations
|
$
|
6,171
|
$
|
6,000
|
$
|
171
|
$
|
-
|
$
|
171
|
||||||||||
Agency mortgage-backed securities
|
4,770
|
4,751
|
57
|
(38
|
)
|
19
|
||||||||||||||
Asset-backed securities
|
45,183
|
45,207
|
458
|
(482
|
)
|
(24
|
)
|
|||||||||||||
Bank loans
|
10,349
|
10,222
|
149
|
(22
|
)
|
127
|
||||||||||||||
Certificates of deposit
|
3,117
|
3,126
|
-
|
(9
|
)
|
(9
|
)
|
|||||||||||||
Collateralized mortgage obligations
|
9,104
|
9,096
|
290
|
(282
|
)
|
8
|
||||||||||||||
Corporate securities
|
142,683
|
143,356
|
1,643
|
(2,316
|
)
|
(673
|
)
|
|||||||||||||
Mortgage-backed securities
|
24,571
|
23,904
|
1,132
|
(465
|
)
|
667
|
||||||||||||||
Municipal obligations
|
129,335
|
130,204
|
391
|
(1,260
|
)
|
(869
|
)
|
|||||||||||||
Non-U.S. government obligations
|
24,681
|
26,461
|
230
|
(2,010
|
)
|
(1,780
|
)
|
|||||||||||||
U.S. government obligations
|
91,940
|
92,234
|
74
|
(368
|
)
|
(294
|
)
|
|||||||||||||
Total fixed maturities
|
491,904
|
494,561
|
4,595
|
(7,252
|
)
|
(2,657
|
)
|
|||||||||||||
Equity securities:
|
||||||||||||||||||||
Consumer
|
32,576
|
15,231
|
17,656
|
(311
|
)
|
17,345
|
||||||||||||||
Energy
|
12,842
|
5,641
|
7,203
|
(2
|
)
|
7,201
|
||||||||||||||
Financial
|
31,186
|
22,417
|
8,998
|
(229
|
)
|
8,769
|
||||||||||||||
Industrial
|
21,145
|
6,239
|
15,098
|
(192
|
)
|
14,906
|
||||||||||||||
Technology
|
8,858
|
4,117
|
4,769
|
(28
|
)
|
4,741
|
||||||||||||||
Funds (e.g. mutual funds, closed end funds, ETFs)
|
6,995
|
6,930
|
121
|
(56
|
)
|
65
|
||||||||||||||
Other
|
6,343
|
4,327
|
2,181
|
(165
|
)
|
2,016
|
||||||||||||||
Total equity securities
|
119,945
|
64,902
|
56,026
|
(983
|
)
|
55,043
|
||||||||||||||
Total
|
$
|
611,849
|
$
|
559,463
|
$
|
60,621
|
$
|
(8,235
|
)
|
52,386
|
||||||||||
Applicable federal income taxes
|
(18,335
|
)
|
||||||||||||||||||
Net unrealized gains - net of tax
|
$
|
34,051
|
2017
|
2016
|
|||||||||||||||||||||||
Number of Securities
|
Fair Value
|
Gross Unrealized Loss
|
Number of Securities
|
Fair Value
|
Gross Unrealized Loss
|
|||||||||||||||||||
Fixed maturity securities:
|
||||||||||||||||||||||||
12 months or less
|
459
|
$
|
313,421
|
$
|
(2,683
|
)
|
397
|
$
|
291,048
|
$
|
(4,380
|
)
|
||||||||||||
Greater than 12 months
|
112
|
75,638
|
(2,155
|
)
|
54
|
32,054
|
(2,872
|
)
|
||||||||||||||||
Total fixed maturities
|
571
|
389,059
|
(4,838
|
)
|
451
|
323,102
|
(7,252
|
)
|
||||||||||||||||
Equity securities:
|
||||||||||||||||||||||||
12 months or less
|
65
|
46,654
|
(2,218
|
)
|
35
|
20,698
|
(983
|
)
|
||||||||||||||||
Greater than 12 months
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Total equity securities
|
65
|
46,654
|
(2,218
|
)
|
35
|
20,698
|
(983
|
)
|
||||||||||||||||
Total
|
636
|
$
|
435,713
|
$
|
(7,056
|
)
|
486
|
$
|
343,800
|
$
|
(8,235
|
)
|
Fair Value
|
Cost or Amortized Cost
|
|||||||||||||||
One year or less
|
$
|
54,567
|
10.5
|
%
|
$
|
54,777
|
10.5
|
%
|
||||||||
Excess of one year to five years
|
292,755
|
56.1
|
294,698
|
56.6
|
||||||||||||
Excess of five years to ten years
|
61,087
|
11.7
|
60,366
|
11.6
|
||||||||||||
Excess of ten years
|
2,909
|
0.5
|
2,914
|
0.5
|
||||||||||||
Total maturities
|
411,318
|
78.8
|
412,755
|
79.2
|
||||||||||||
Asset-backed securities
|
110,535
|
21.2
|
108,262
|
20.8
|
||||||||||||
$
|
521,853
|
100.0
|
%
|
$
|
521,017
|
100.0
|
%
|
2017
|
2016
|
2015
|
||||||||||
Interest on fixed maturities
|
$
|
15,340
|
$
|
13,254
|
$
|
11,663
|
||||||
Dividends on equity securities
|
4,611
|
3,598
|
3,445
|
|||||||||
Money market funds, Short-term and other
|
471
|
128
|
32
|
|||||||||
20,422
|
16,980
|
15,140
|
||||||||||
Investment expenses
|
(2,327
|
)
|
(2,497
|
)
|
(2,642
|
)
|
||||||
Net investment income
|
$
|
18,095
|
$
|
14,483
|
$
|
12,498
|
2017
|
2016
|
2015
|
||||||||||
Fixed maturities:
|
||||||||||||
Gross gains
|
$
|
9,135
|
$
|
11,628
|
$
|
6,633
|
||||||
Gross losses
|
(10,031
|
)
|
(14,020
|
)
|
(13,634
|
)
|
||||||
Net losses
|
(896
|
)
|
(2,392
|
)
|
(7,001
|
)
|
||||||
Equity securities:
|
||||||||||||
Gross gains
|
10,481
|
28,742
|
21,070
|
|||||||||
Gross losses
|
(2,368
|
)
|
(5,595
|
)
|
(13,643
|
)
|
||||||
Net gains
|
8,113
|
23,147
|
7,427
|
|||||||||
Limited partnerships - net gain (loss)
|
12,469
|
2,473
|
(1,687
|
)
|
||||||||
Total net gains (losses)
|
$
|
19,686
|
$
|
23,228
|
$
|
(1,261
|
)
|
2017
|
2016
|
2015
|
||||||||||
Cumulative charges to income at beginning of year
|
$
|
5,060
|
$
|
10,513
|
$
|
7,168
|
||||||
Writedowns based on objective and subjective criteria
|
149
|
5,743
|
7,700
|
|||||||||
Recovery of prior writedowns upon sale or disposal
|
(1,590
|
)
|
(10,606
|
)
|
(4,355
|
)
|
||||||
Net pre-tax realized gain (loss)
|
1,441
|
4,863
|
(3,345
|
)
|
||||||||
Cumulative charges to income at end of year
|
$
|
4,209
|
$
|
5,060
|
$
|
10,513
|
2017
|
2016
|
2015
|
||||||||||
Investment income (loss)
|
$
|
623
|
$
|
(5
|
)
|
$
|
(188
|
)
|
||||
Partnership expenses
|
2,206
|
2,426
|
3,024
|
|||||||||
Net investment loss
|
(1,583
|
)
|
(2,431
|
)
|
(3,212
|
)
|
||||||
Realized gain (loss) on investments
|
8,723
|
7,754
|
21,091
|
|||||||||
Unrealized appreciation (depreciation) on investments
|
133,807
|
(21,002
|
)
|
(37,482
|
)
|
|||||||
Net increase (decrease) in partners' capital resulting from operations
|
$
|
140,947
|
$
|
(15,679
|
)
|
$
|
(19,603
|
)
|
||||
Total assets
|
566,629
|
448,263
|
511,118
|
|||||||||
Total liabilities
|
30,976
|
39,988
|
40,335
|
|||||||||
Total partners' capital
|
535,653
|
408,275
|
470,783
|
2017
|
2016
|
2015
|
||||||||||
Reserves, gross of reinsurance
|
||||||||||||
recoverable, at the beginning of the year
|
$
|
576,330
|
$
|
513,596
|
$
|
506,102
|
||||||
Reinsurance recoverable on unpaid losses at the beginning of the year
|
251,563
|
211,843
|
210,519
|
|||||||||
Reserves at the beginning of the year
|
324,767
|
301,753
|
295,583
|
|||||||||
Provision for losses and loss expenses:
|
||||||||||||
Claims occurring during the current year
|
228,303
|
172,645
|
165,812
|
|||||||||
Claims occurring during prior years
|
19,215
|
13,836
|
(10,062
|
)
|
||||||||
Total incurred losses and loss expenses
|
247,518
|
186,481
|
155,750
|
|||||||||
Loss and loss expense payments:
|
||||||||||||
Claims occurring during the current year
|
67,234
|
54,239
|
56,710
|
|||||||||
Claims occurring during prior years
|
132,920
|
109,228
|
92,870
|
|||||||||
Total paid
|
200,154
|
163,467
|
149,580
|
|||||||||
Reserves at the end of the year
|
372,131
|
324,767
|
301,753
|
|||||||||
Reinsurance recoverable on unpaid losses at the end of the year
|
308,143
|
251,563
|
211,843
|
|||||||||
Reserves, gross of reinsurance
|
||||||||||||
recoverable, at the end of the year
|
$
|
680,274
|
$
|
576,330
|
$
|
513,596
|
As of December 31, 2017
|
||||||||||||||||||||||||||||||||||||||||||||||||
Total of Incurred-
|
||||||||||||||||||||||||||||||||||||||||||||||||
Workers' Compensation
|
but-Not-Reported
|
|||||||||||||||||||||||||||||||||||||||||||||||
Liabilities Plus
|
||||||||||||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
Expected
|
Number of
|
||||||||||||||||||||||||||||||||||||||||||||||
Accident
|
For the Years Ended December 31 (2008-2016 is Supplementary Information and Unaudited)
|
Development on
|
Reported Claims
|
|||||||||||||||||||||||||||||||||||||||||||||
Year
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
Reported Claims
|
Per Year
|
||||||||||||||||||||||||||||||||||||
2008
|
$
|
19,833
|
$
|
23,640
|
$
|
24,715
|
$
|
24,721
|
$
|
24,855
|
$
|
25,109
|
$
|
23,916
|
$
|
24,048
|
$
|
24,352
|
$
|
25,077
|
$
|
661
|
3,656
|
|||||||||||||||||||||||||
2009
|
17,270
|
20,931
|
21,447
|
21,261
|
21,268
|
20,767
|
20,641
|
20,817
|
20,946
|
877
|
3,784
|
|||||||||||||||||||||||||||||||||||||
2010
|
20,644
|
20,111
|
19,400
|
19,300
|
18,849
|
18,344
|
19,195
|
19,541
|
1,096
|
4,222
|
||||||||||||||||||||||||||||||||||||||
2011
|
26,057
|
26,628
|
26,958
|
26,767
|
25,515
|
27,293
|
26,617
|
2,399
|
4,545
|
|||||||||||||||||||||||||||||||||||||||
2012
|
23,965
|
25,544
|
24,887
|
24,485
|
25,616
|
27,020
|
3,151
|
4,479
|
||||||||||||||||||||||||||||||||||||||||
2013
|
27,619
|
30,638
|
29,913
|
32,121
|
32,553
|
5,344
|
5,271
|
|||||||||||||||||||||||||||||||||||||||||
2014
|
36,768
|
36,968
|
34,009
|
33,427
|
5,848
|
5,394
|
||||||||||||||||||||||||||||||||||||||||||
2015
|
26,277
|
23,115
|
25,889
|
6,921
|
6,284
|
|||||||||||||||||||||||||||||||||||||||||||
2016
|
35,240
|
29,757
|
9,795
|
6,003
|
||||||||||||||||||||||||||||||||||||||||||||
2017
|
42,387
|
25,679
|
14,490
|
|||||||||||||||||||||||||||||||||||||||||||||
Total
|
$
|
283,214
|
$
|
61,771
|
||||||||||||||||||||||||||||||||||||||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance
|
||||||||||||||||||||||||||||||||||||||||||||||||
Accident
|
For the Years Ended December 31 (2008-2016 is Supplementary Information and Unaudited)
|
|||||||||||||||||||||||||||||||||||||||||||||||
Year
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
||||||||||||||||||||||||||||||||||||||
2008
|
$
|
6,046
|
$
|
13,919
|
$
|
17,320
|
$
|
18,943
|
$
|
20,055
|
$
|
20,839
|
$
|
21,306
|
$
|
21,883
|
$
|
22,199
|
22,910
|
|||||||||||||||||||||||||||||
2009
|
4,186
|
10,073
|
13,343
|
15,576
|
16,592
|
17,448
|
18,028
|
18,514
|
18,982
|
|||||||||||||||||||||||||||||||||||||||
2010
|
3,974
|
9,134
|
11,963
|
13,845
|
14,966
|
15,835
|
16,590
|
16,789
|
||||||||||||||||||||||||||||||||||||||||
2011
|
4,916
|
11,912
|
15,973
|
18,884
|
20,617
|
21,622
|
22,569
|
|||||||||||||||||||||||||||||||||||||||||
2012
|
4,597
|
11,004
|
14,834
|
17,415
|
18,946
|
20,276
|
||||||||||||||||||||||||||||||||||||||||||
2013
|
4,880
|
12,792
|
18,065
|
21,655
|
23,643
|
|||||||||||||||||||||||||||||||||||||||||||
2014
|
5,328
|
13,665
|
19,075
|
22,387
|
||||||||||||||||||||||||||||||||||||||||||||
2015
|
2,918
|
10,128
|
15,020
|
|||||||||||||||||||||||||||||||||||||||||||||
2016
|
5,784
|
13,377
|
||||||||||||||||||||||||||||||||||||||||||||||
2017
|
6,150
|
|||||||||||||||||||||||||||||||||||||||||||||||
Total
|
$
|
182,103
|
||||||||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities prior to 2008 net of reinsurance
|
12,640
|
|||||||||||||||||||||||||||||||||||||||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance
|
$
|
113,751
|
As of December 31, 2017
|
||||||||||||||||||||||||||||||||||||||||||||||||
Total of Incurred-
|
||||||||||||||||||||||||||||||||||||||||||||||||
Commercial Liability
|
but-Not-Reported
|
|||||||||||||||||||||||||||||||||||||||||||||||
Liabilities Plus
|
||||||||||||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
Expected
|
Number of
|
||||||||||||||||||||||||||||||||||||||||||||||
Accident
|
For the Years Ended December 31 (2008-2016 is Supplementary Information and Unaudited)
|
Development on
|
Reported Claims
|
|||||||||||||||||||||||||||||||||||||||||||||
Year
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
Reported Claims
|
Per Year
|
||||||||||||||||||||||||||||||||||||
2008
|
$
|
34,693
|
$
|
28,591
|
$
|
27,311
|
$
|
25,511
|
$
|
23,989
|
$
|
24,892
|
$
|
24,902
|
$
|
23,480
|
$
|
23,482
|
$
|
23,733
|
$
|
110
|
1,280
|
|||||||||||||||||||||||||
2009
|
29,707
|
30,406
|
30,203
|
26,280
|
27,259
|
25,872
|
25,373
|
25,320
|
25,485
|
136
|
1,161
|
|||||||||||||||||||||||||||||||||||||
2010
|
31,124
|
22,161
|
21,899
|
19,139
|
20,300
|
19,764
|
19,377
|
19,081
|
96
|
2,384
|
||||||||||||||||||||||||||||||||||||||
2011
|
46,829
|
43,832
|
31,633
|
36,894
|
35,805
|
37,122
|
36,076
|
271
|
2,764
|
|||||||||||||||||||||||||||||||||||||||
2012
|
49,743
|
54,269
|
49,743
|
51,367
|
48,708
|
51,475
|
478
|
3,211
|
||||||||||||||||||||||||||||||||||||||||
2013
|
53,817
|
39,143
|
37,701
|
36,371
|
46,690
|
664
|
3,611
|
|||||||||||||||||||||||||||||||||||||||||
2014
|
49,971
|
52,254
|
52,483
|
52,964
|
1,451
|
3,091
|
||||||||||||||||||||||||||||||||||||||||||
2015
|
61,420
|
70,174
|
64,323
|
2,278
|
3,340
|
|||||||||||||||||||||||||||||||||||||||||||
2016
|
61,638
|
68,974
|
6,725
|
3,581
|
||||||||||||||||||||||||||||||||||||||||||||
2017
|
103,126
|
$
|
43,880
|
4,387
|
||||||||||||||||||||||||||||||||||||||||||||
Total
|
$
|
491,927
|
$
|
56,089
|
||||||||||||||||||||||||||||||||||||||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance
|
||||||||||||||||||||||||||||||||||||||||||||||||
Accident
|
For the Years Ended December 31 (2008-2016 is Supplementary Information and Unaudited)
|
|||||||||||||||||||||||||||||||||||||||||||||||
Year
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
||||||||||||||||||||||||||||||||||||||
2008
|
$
|
2,612
|
$
|
8,942
|
$
|
15,733
|
$
|
21,220
|
$
|
21,396
|
$
|
23,169
|
$
|
23,354
|
$
|
23,444
|
$
|
23,500
|
$
|
23,510
|
||||||||||||||||||||||||||||
2009
|
928
|
17,880
|
19,718
|
23,521
|
24,866
|
25,066
|
25,114
|
25,125
|
25,199
|
|||||||||||||||||||||||||||||||||||||||
2010
|
1,649
|
7,166
|
11,635
|
16,052
|
18,627
|
18,517
|
18,866
|
18,662
|
||||||||||||||||||||||||||||||||||||||||
2011
|
1,809
|
11,350
|
23,615
|
30,795
|
33,255
|
34,009
|
35,561
|
|||||||||||||||||||||||||||||||||||||||||
2012
|
3,086
|
23,252
|
32,942
|
45,303
|
47,601
|
50,036
|
||||||||||||||||||||||||||||||||||||||||||
2013
|
5,167
|
15,772
|
25,270
|
34,481
|
44,865
|
|||||||||||||||||||||||||||||||||||||||||||
2014
|
4,023
|
9,046
|
28,393
|
45,075
|
||||||||||||||||||||||||||||||||||||||||||||
2015
|
10,923
|
27,582
|
49,267
|
|||||||||||||||||||||||||||||||||||||||||||||
2016
|
6,843
|
30,377
|
||||||||||||||||||||||||||||||||||||||||||||||
2017
|
11,415
|
|||||||||||||||||||||||||||||||||||||||||||||||
Total
|
$
|
333,967
|
||||||||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities prior to 2008 net of reinsurance
|
4,621
|
|||||||||||||||||||||||||||||||||||||||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance
|
$
|
162,581
|
As of December 31, 2017
|
||||||||||||||||||||||||||||||||||||||||||
Total of Incurred-
|
||||||||||||||||||||||||||||||||||||||||||
Professional Liability Reinsurance Assumed (in runoff)
|
but-Not-Reported
|
|||||||||||||||||||||||||||||||||||||||||
Liabilities Plus
|
||||||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
Expected
|
Number of
|
||||||||||||||||||||||||||||||||||||||||
Accident
|
For the Years Ended December 31 (2008-2016 is Supplementary Information and Unaudited)
|
Development on
|
Reported Claims
|
|||||||||||||||||||||||||||||||||||||||
Year
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
Reported Claims
|
Per Year
|
||||||||||||||||||||||||||||||
2008
|
|
|
||||||||||||||||||||||||||||||||||||||||
2009
|
|
|
||||||||||||||||||||||||||||||||||||||||
2010
|
|
|
$
|
2,196
|
$
|
4,277
|
$
|
7,827
|
$
|
7,946
|
$
|
9,733
|
$
|
10,740
|
$
|
11,689
|
$
|
11,893
|
$
|
175
|
N/A
|
|||||||||||||||||||||
2011
|
|
|
10,492
|
8,314
|
9,017
|
9,859
|
10,779
|
12,735
|
12,744
|
290
|
N/A
|
|||||||||||||||||||||||||||||||
2012
|
|
|
10,041
|
9,276
|
5,569
|
10,157
|
14,605
|
16,555
|
3,049
|
N/A
|
||||||||||||||||||||||||||||||||
2013
|
|
|
14,370
|
13,034
|
11,618
|
17,694
|
23,256
|
4,653
|
N/A
|
|||||||||||||||||||||||||||||||||
2014
|
|
|
12,675
|
8,825
|
7,259
|
9,837
|
2,621
|
N/A
|
||||||||||||||||||||||||||||||||||
2015
|
|
|
11,638
|
7,859
|
7,147
|
3,290
|
N/A
|
|||||||||||||||||||||||||||||||||||
2016
|
|
|
6,368
|
2,482
|
2,273
|
N/A
|
||||||||||||||||||||||||||||||||||||
2017
|
-
|
-
|
N/A
|
|||||||||||||||||||||||||||||||||||||||
Total
|
$
|
83,914
|
$
|
16,351
|
||||||||||||||||||||||||||||||||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance
|
||||||||||||||||||||||||||||||||||||||||||
Accident
|
For the Years Ended December 31 (2008-2016 is Supplementary Information and Unaudited)
|
|||||||||||||||||||||||||||||||||||||||||
Year
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
||||||||||||||||||||||||||||||||
2008
|
|
|
||||||||||||||||||||||||||||||||||||||||
2009
|
|
|
||||||||||||||||||||||||||||||||||||||||
2010
|
|
|
$
|
41
|
$
|
729
|
$
|
3,505
|
$
|
5,844
|
$
|
7,758
|
$
|
9,904
|
$
|
11,132
|
$
|
11,334
|
||||||||||||||||||||||||
2011
|
|
|
50
|
637
|
2,061
|
4,983
|
8,104
|
10,404
|
11,679
|
|||||||||||||||||||||||||||||||||
2012
|
|
|
103
|
992
|
2,388
|
5,077
|
8,355
|
11,239
|
||||||||||||||||||||||||||||||||||
2013
|
|
|
123
|
1,135
|
5,088
|
10,988
|
14,779
|
|||||||||||||||||||||||||||||||||||
2014
|
|
|
723
|
761
|
2,241
|
3,999
|
||||||||||||||||||||||||||||||||||||
2015
|
|
|
10
|
390
|
1,899
|
|||||||||||||||||||||||||||||||||||||
2016
|
|
|
-
|
5
|
||||||||||||||||||||||||||||||||||||||
2017
|
-
|
|||||||||||||||||||||||||||||||||||||||||
Total
|
$
|
54,934
|
||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities prior to 2008 net of reinsurance
|
-
|
|||||||||||||||||||||||||||||||||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance
|
$
|
28,980
|
2017
|
2016
|
|||||||
Net outstanding liabilities
|
||||||||
Commercial Liability
|
$
|
162,581
|
$
|
133,139
|
||||
Workers' Compensation
|
113,751
|
101,883
|
||||||
Professional Liability Assumed
|
28,980
|
34,700
|
||||||
Other short-duration insurance lines
|
48,970
|
38,556
|
||||||
Liabilities for unpaid claims and claim adjustment
|
||||||||
expenses, net of reinsurance
|
354,282
|
308,278
|
||||||
Reinsurance recoverable on unpaid claims
|
||||||||
Commercial Liability
|
124,695
|
85,549
|
||||||
Workers' Compensation
|
170,394
|
153,847
|
||||||
Other short-duration insurance lines
|
13,053
|
12,167
|
||||||
Reinsurance recoverable on unpaid losses at the
|
||||||||
end of the year
|
308,142
|
251,563
|
||||||
Unallocated claims adjustment expenses
|
17,850
|
16,489
|
||||||
Total gross liability for unpaid claims and
|
||||||||
claims adjustment expense
|
$
|
680,274
|
$
|
576,330
|
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
|
||||||||||||||||||||||||||||||||||||||||
(Supplementary Information and Unaudited)
|
||||||||||||||||||||||||||||||||||||||||
Years
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
|
10
|
||||||||||||||||||||||||||||||
Commercial Liability
|
9.1
|
%
|
31.1
|
%
|
25.3
|
%
|
22.3
|
%
|
7.0
|
%
|
2.9
|
%
|
1.8
|
%
|
0.1
|
%
|
0.3
|
%
|
0.1
|
%
|
||||||||||||||||||||
Workers' Compensation
|
17.6
|
%
|
26.5
|
%
|
15.5
|
%
|
9.7
|
%
|
5.6
|
%
|
4.1
|
%
|
3.0
|
%
|
1.9
|
%
|
1.7
|
%
|
2.8
|
%
|
||||||||||||||||||||
Professional Liability Assumed
|
1.3
|
%
|
3.7
|
%
|
16.0
|
%
|
20.4
|
%
|
19.2
|
%
|
17.8
|
%
|
10.2
|
%
|
1.7
|
%
|
Premiums Written
|
Premiums Earned
|
|||||||||||||||||||||||
2017
|
2016
|
2015
|
2017
|
2016
|
2015
|
|||||||||||||||||||
Direct
|
$
|
504,033
|
$
|
395,625
|
$
|
366,668
|
$
|
470,158
|
$
|
394,679
|
$
|
370,499
|
||||||||||||
Ceded on direct
|
(151,348
|
)
|
(131,166
|
)
|
(128,338
|
)
|
(145,201
|
)
|
(129,926
|
)
|
(128,135
|
)
|
||||||||||||
Net direct
|
352,685
|
264,459
|
238,330
|
324,957
|
264,753
|
242,364
|
||||||||||||||||||
Assumed
|
704
|
7,379
|
16,885
|
3,188
|
11,344
|
21,533
|
||||||||||||||||||
Ceded on assumed
|
-
|
(86
|
)
|
(562
|
)
|
-
|
(86
|
)
|
(562
|
)
|
||||||||||||||
Net assumed
|
704
|
7,293
|
16,323
|
3,188
|
11,258
|
20,971
|
||||||||||||||||||
Net
|
$
|
353,389
|
$
|
271,752
|
$
|
254,653
|
$
|
328,145
|
$
|
276,011
|
$
|
263,335
|
2017
|
2016
|
|||||||
Case unpaid losses, net of valuation allowance
|
$
|
119,615
|
$
|
126,244
|
||||
Incurred but not reported unpaid losses and loss expenses
|
187,163
|
123,819
|
||||||
Paid losses and loss expenses
|
2,206
|
1,760
|
||||||
Unearned premiums
|
9,347
|
3,201
|
||||||
$
|
318,331
|
$
|
255,024
|
2017
|
2016
|
|||||||
Deferred tax liabilities:
|
||||||||
Unrealized gain on fixed income and equity security investments
|
$
|
15,086
|
$
|
18,335
|
||||
Deferred acquisition costs
|
1,804
|
874
|
||||||
Loss and loss expense reserves
|
2,623
|
1,198
|
||||||
Limited partnership investments
|
3,826
|
2,274
|
||||||
Accelerated depreciation
|
492
|
1,037
|
||||||
Other
|
1,791
|
1,251
|
||||||
Total deferred tax liabilities
|
25,622
|
24,969
|
||||||
Deferred tax assets:
|
||||||||
Loss and loss expense reserves
|
6,761
|
9,467
|
||||||
Unearned premiums discount
|
1,837
|
1,295
|
||||||
Other-than-temporary investment declines
|
815
|
858
|
||||||
Deferred compensation
|
885
|
1,097
|
||||||
Deferred ceding commission
|
627
|
464
|
||||||
Other
|
339
|
376
|
||||||
Total deferred tax assets
|
11,264
|
13,557
|
||||||
Net deferred tax liabilities
|
$
|
14,358
|
$
|
11,412
|
2017
|
2016
|
2015
|
||||||||||
|
||||||||||||
Statutory federal income rate applied to pretax income
|
$
|
3,543
|
$
|
15,069
|
$
|
11,883
|
||||||
Tax effect of (deduction):
|
||||||||||||
Tax-exempt investment income
|
(968
|
)
|
(938
|
)
|
(919
|
)
|
||||||
Change in enacted tax rates
|
(9,572
|
)
|
-
|
-
|
||||||||
Other
|
(1,204
|
)
|
(22
|
)
|
(295
|
)
|
||||||
Federal income tax expense (benefit)
|
$
|
(8,201
|
)
|
$
|
14,109
|
$
|
10,669
|
2017
|
2016
|
2015
|
||||||||||
Limited partnerships
|
$
|
4,099
|
$
|
503
|
$
|
(2,865
|
)
|
|||||
Discounts of loss and loss expense reserves
|
1,315
|
(114
|
)
|
1,526
|
||||||||
Reserves - salvage and subrogation and other
|
56
|
(1,110
|
)
|
29
|
||||||||
Unearned premium discount
|
(1,767
|
)
|
298
|
608
|
||||||||
Deferred compensation
|
(168
|
)
|
595
|
(127
|
)
|
|||||||
Other-than-temporary investment declines
|
(127
|
)
|
2,320
|
(1,416
|
)
|
|||||||
Deferred acquisitions costs and ceding commission
|
1,553
|
(95
|
)
|
(287
|
)
|
|||||||
Change in enacted tax rates
|
(9,572
|
)
|
-
|
-
|
||||||||
Other
|
745
|
441
|
713
|
|||||||||
Provision for deferred federal income tax
|
$
|
(3,866
|
)
|
$
|
2,838
|
$
|
(1,819
|
)
|
Note F - Shareholders' Equity
|
||||||||||||||||||||||
Changes in common stock outstanding and additional paid-in capital are as follows:
|
||||||||||||||||||||||
Additional
|
||||||||||||||||||||||
Class A | Class B |
Paid-in
|
||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
||||||||||||||||||
Balance at January 1, 2015
|
2,623,109
|
|
$
|
112
|
12,356,389
|
|
$
|
527
|
$
|
51,854
|
||||||||||||
Restricted stock grants
|
-
|
-
|
46,552
|
2
|
1,092
|
|||||||||||||||||
Balance at December 31, 2015
|
2,623,109
|
|
112
|
12,402,941
|
|
529
|
52,946
|
|||||||||||||||
Restricted stock grants
|
-
|
-
|
57,959
|
3
|
1,340
|
|||||||||||||||||
Balance at December 31, 2016
|
2,623,109
|
|
112
|
12,460,900
|
|
532
|
54,286
|
|||||||||||||||
Restricted stock grants
|
-
|
|
-
|
47,578
|
|
2
|
1,152
|
|||||||||||||||
Repurchase of common shares
|
-
|
-
|
(84,960
|
)
|
(4
|
)
|
(360
|
)
|
||||||||||||||
Balance at December 31, 2017
|
2,623,109
|
$
|
112
|
12,423,518
|
$
|
530
|
$
|
55,078
|
Note G - Other Operating Expenses
|
||||||||||||
Details of other operating expenses for the years ended December 31:
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Amortization of gross deferred policy acquisition costs
|
$
|
70,574
|
$
|
51,597
|
$
|
50,270
|
||||||
Other underwriting expenses
|
37,230
|
41,692
|
42,638
|
|||||||||
Reinsurance ceded credits
|
(23,187
|
)
|
(33,512
|
)
|
(28,956
|
)
|
||||||
Total underwriting expenses
|
84,617
|
59,777
|
63,952
|
|||||||||
Operating expenses of non-insurance companies
|
28,977
|
29,685
|
26,621
|
|||||||||
Total other operating expenses
|
$
|
113,594
|
$
|
89,462
|
$
|
90,573
|
Grant Date
|
||||||||
Grant
|
Number of Shares
|
Vesting
|
Fair Value
|
|||||
Date
|
Issued
|
Date
|
Period
|
Per Share
|
||||
5/12/2015
|
|
21,252
|
|
5/12/2016
|
|
7/1/2015 - 6/30/2016
|
|
$22.59
|
5/10/2016
|
|
17,677
|
|
5/10/2017
|
|
7/1/2016 - 6/30/2017
|
|
$24.89
|
5/9/2017
|
|
18,183
|
|
5/9/2018
|
|
7/1/2017 - 6/30/2018
|
|
$24.20
|
8/31/2017
|
1,257
|
5/9/2018
|
8/31/2017 - 6/30/2018
|
$21.90
|
2017
|
2016
|
2015
|
||||||||||
Revenues:
|
||||||||||||
Net premiums earned
|
$
|
328,145
|
$
|
276,011
|
$
|
263,335
|
||||||
Net investment income
|
18,095
|
14,483
|
12,498
|
|||||||||
Commissions and other income
|
5,308
|
5,275
|
5,703
|
|||||||||
Net realized gains (losses) on investments
|
19,686
|
23,228
|
(1,261
|
)
|
||||||||
Total revenues
|
$
|
371,234
|
$
|
318,997
|
$
|
280,275
|
2017
|
2016
|
2015
|
||||||||||
Average shares outstanding for basic earnings per share
|
15,065,216
|
15,071,900
|
15,010,454
|
|||||||||
Dilutive effect of share equivalents
|
42,220
|
12,108
|
11,308
|
|||||||||
Average shares outstanding for diluted earnings per share
|
15,107,436
|
15,084,008
|
15,021,762
|
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Fixed maturities:
|
||||||||||||||||
Agency collateralized mortgage obligations
|
$
|
16,586
|
$
|
-
|
$
|
16,586
|
$
|
-
|
||||||||
Agency mortgage-backed securities
|
27,075
|
-
|
27,075
|
-
|
||||||||||||
Asset-backed securities
|
43,469
|
-
|
43,469
|
-
|
||||||||||||
Bank loans
|
19,488
|
-
|
19,488
|
-
|
||||||||||||
Certificates of deposit
|
3,135
|
3,135
|
-
|
-
|
||||||||||||
Collateralized mortgage obligations
|
6,492
|
-
|
6,492
|
-
|
||||||||||||
Corporate securities
|
193,058
|
-
|
193,058
|
-
|
||||||||||||
Options embedded in convertible securities
|
5,291
|
-
|
5,291
|
-
|
||||||||||||
Mortgage-backed securities
|
24,204
|
-
|
24,204
|
-
|
||||||||||||
Municipal obligations
|
96,650
|
-
|
96,650
|
-
|
||||||||||||
Non-U.S. government obligations
|
37,394
|
-
|
37,394
|
-
|
||||||||||||
U.S. government obligations
|
49,011
|
-
|
49,011
|
-
|
||||||||||||
Total fixed maturities
|
521,853
|
3,135
|
518,718
|
-
|
||||||||||||
Equity securities:
|
||||||||||||||||
Consumer
|
46,578
|
46,578
|
-
|
-
|
||||||||||||
Energy
|
10,278
|
10,278
|
-
|
-
|
||||||||||||
Financial
|
45,470
|
45,470
|
-
|
-
|
||||||||||||
Industrial
|
25,402
|
25,402
|
-
|
-
|
||||||||||||
Technology
|
13,061
|
13,061
|
-
|
-
|
||||||||||||
Funds (e.g. mutual funds, closed end funds, ETFs)
|
50,291
|
45,276
|
5,015
|
-
|
||||||||||||
Other
|
10,683
|
10,683
|
-
|
-
|
||||||||||||
Total equity securities
|
201,763
|
196,748
|
5,015
|
-
|
||||||||||||
Short term
|
1,000
|
1,000
|
-
|
-
|
||||||||||||
Cash equivalents
|
59,173
|
-
|
59,173
|
-
|
||||||||||||
Total
|
$
|
783,789
|
$
|
200,883
|
$
|
582,906
|
$
|
-
|
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Fixed maturities:
|
||||||||||||||||
Agency collateralized mortgage obligations
|
$
|
6,171
|
$
|
-
|
$
|
6,171
|
$
|
-
|
||||||||
Agency mortgage-backed securities
|
4,770
|
-
|
4,770
|
-
|
||||||||||||
Asset-backed securities
|
45,183
|
-
|
37,919
|
7,264
|
||||||||||||
Bank loans
|
10,349
|
-
|
-
|
10,349
|
||||||||||||
Certificates of deposit
|
3,117
|
3,117
|
-
|
-
|
||||||||||||
Collateralized mortgage obligations
|
9,104
|
-
|
6,409
|
2,695
|
||||||||||||
Corporate securities
|
137,932
|
-
|
135,794
|
2,138
|
||||||||||||
Options embedded in convertible securities
|
4,751
|
-
|
4,751
|
-
|
||||||||||||
Mortgage-backed securities
|
24,571
|
-
|
22,206
|
2,365
|
||||||||||||
Municipal obligations
|
129,335
|
-
|
129,190
|
145
|
||||||||||||
Non-U.S. government obligations
|
24,681
|
-
|
24,419
|
262
|
||||||||||||
U.S. government obligations
|
91,940
|
-
|
91,940
|
-
|
||||||||||||
Total fixed maturities
|
491,904
|
3,117
|
463,569
|
25,218
|
||||||||||||
Equity securities:
|
||||||||||||||||
Consumer
|
32,576
|
32,576
|
-
|
-
|
||||||||||||
Energy
|
12,842
|
12,842
|
-
|
-
|
||||||||||||
Financial
|
31,186
|
30,943
|
243
|
-
|
||||||||||||
Industrial
|
21,145
|
20,262
|
883
|
-
|
||||||||||||
Technology
|
8,858
|
8,858
|
-
|
-
|
||||||||||||
Funds (e.g. mutual funds, closed end funds, ETFs)
|
6,995
|
-
|
6,995
|
-
|
||||||||||||
Other
|
6,343
|
6,343
|
-
|
-
|
||||||||||||
Total equity securities
|
119,945
|
111,824
|
8,121
|
-
|
||||||||||||
Short term
|
1,500
|
1,500
|
-
|
-
|
||||||||||||
Cash equivalents
|
59,683
|
-
|
59,683
|
-
|
||||||||||||
Total
|
$
|
673,032
|
$
|
116,441
|
$
|
531,373
|
$
|
25,218
|
2017
|
2016
|
|||||||
Beginning of period balance
|
$
|
25,218
|
$
|
16,793
|
||||
Total gains or losses (realized)
|
||||||||
included in income
|
406
|
1,846
|
||||||
Purchases
|
81
|
5,540
|
||||||
Settlements
|
(9,123
|
)
|
(8,791
|
)
|
||||
Transfers into Level 3
|
144
|
10,202
|
||||||
Transfers out of Level 3
|
(16,726
|
)
|
(372
|
)
|
||||
End of period balance
|
$
|
-
|
$
|
25,218
|
2017:
|
Carrying
|
Fair Value
|
||||||||||||||||||
Value
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
Assets:
|
||||||||||||||||||||
Limited partnerships
|
$
|
70,806
|
$
|
-
|
$
|
-
|
$
|
70,806
|
$
|
70,806
|
||||||||||
Liabilities:
|
||||||||||||||||||||
Short-term borrowings
|
20,000
|
-
|
20,000
|
-
|
20,000
|
|||||||||||||||
2016:
|
||||||||||||||||||||
Assets:
|
||||||||||||||||||||
Limited partnerships
|
$
|
76,469
|
$
|
-
|
$
|
-
|
$
|
76,469
|
$
|
76,469
|
||||||||||
Liabilities:
|
||||||||||||||||||||
Short-term borrowings
|
20,000
|
-
|
20,000
|
-
|
20,000
|
Quarterly results of operations are as follows:
|
|||||||||||||||||||||||||||||||||
Results by Quarter
|
|||||||||||||||||||||||||||||||||
2017
|
2016
|
||||||||||||||||||||||||||||||||
1st
|
2nd
|
3rd
|
4th
|
1st
|
2nd
|
3rd
|
4th
|
||||||||||||||||||||||||||
Net premiums earned
|
$
|
73,974
|
$
|
67,996
|
$
|
89,100
|
$
|
97,075
|
|
$
|
66,909
|
$
|
68,726
|
$
|
71,235
|
$
|
69,141
|
||||||||||||||||
Net investment income
|
3,692
|
4,716
|
4,027
|
5,661
|
|
3,440
|
3,549
|
3,513
|
3,982
|
||||||||||||||||||||||||
Net realized gains on investments
|
6,294
|
3,296
|
5,944
|
4,152
|
|
9,012
|
280
|
7,732
|
6,204
|
||||||||||||||||||||||||
Losses and loss expenses incurred
|
48,599
|
71,754
|
60,673
|
66,492
|
|
38,623
|
42,666
|
56,827
|
48,366
|
||||||||||||||||||||||||
Net income (loss)
|
6,756
|
(12,343
|
)
|
7,434
|
16,476
|
|
14,112
|
5,969
|
4,001
|
4,864
|
|||||||||||||||||||||||
Net income (loss) per share - diluted
|
$
|
.45
|
$
|
(.82
|
)
|
$
|
.49
|
$
|
1.10
|
$
|
.94
|
$
|
.40
|
$
|
.27
|
$
|
.32
|
2018
|
$
|
297
|
||
2019
|
297
|
|||
2020
|
80
|
|||
2021 and thereafter
|
6
|
|||
Total minimum payments required
|
$
|
680
|
2017
|
2016
|
|||||||
Investments:
|
||||||||
Total unrealized gain before federal income taxes
|
$
|
71,848
|
$
|
52,386
|
||||
Deferred tax liability
|
(25,148
|
)
|
(18,335
|
)
|
||||
Net unrealized gains on investments
|
46,700
|
34,051
|
||||||
Foreign exchange adjustment:
|
||||||||
Total unrealized losses
|
(475
|
)
|
(1,278
|
)
|
||||
Deferred tax benefit
|
166
|
447
|
||||||
Net unrealized losses on foreign exchange adjustment
|
(309
|
)
|
(831
|
)
|
||||
Accumulated other comprehensive income
|
$
|
46,391
|
$
|
33,220
|
2017
|
2016
|
2015
|
||||||||||
Investments:
|
||||||||||||
Pre-tax holding gains (losses) on debt and
|
||||||||||||
equity securities arising during period
|
$
|
26,677
|
$
|
13,259
|
$
|
(19,445
|
)
|
|||||
Less: applicable federal income taxes
|
9,337
|
4,641
|
(6,806
|
)
|
||||||||
17,340
|
8,618
|
(12,639
|
)
|
|||||||||
Pre-tax gains on debt and equity securities
|
||||||||||||
included in net income during period
|
7,217
|
20,755
|
426
|
|||||||||
Less: applicable federal income taxes
|
2,526
|
7,264
|
149
|
|||||||||
4,691
|
13,491
|
277
|
||||||||||
Change in unrealized gains on investments
|
$
|
12,649
|
$
|
(4,873
|
)
|
$
|
(12,916
|
)
|
2017
|
2016
|
2015
|
||||||||||
Beginning accumulated other comprehensive income
|
$
|
33,220
|
$
|
37,858
|
$
|
52,230
|
||||||
Change in foreign exchange adjustment
|
522
|
235
|
(1,456
|
)
|
||||||||
Change in unrealized net gains on investments
|
12,649
|
(4,873
|
)
|
(12,916
|
)
|
|||||||
Ending accumulated other comprehensive income
|
$
|
46,391
|
$
|
33,220
|
$
|
37,858
|
||||||
2017
|
2016
|
2015
|
||||||||||
Beginning retained earnings
|
$
|
316,195
|
$
|
303,053
|
$
|
294,773
|
||||||
Net income
|
18,323
|
28,945
|
23,283
|
|||||||||
Dividends
|
(16,302
|
)
|
(15,803
|
)
|
(15,003
|
)
|
||||||
Repurchase of common shares
|
(1,516
|
)
|
-
|
-
|
||||||||
Ending retained earnings
|
$
|
316,700
|
$
|
316,195
|
$
|
303,053
|
Report of Independent Registered Public Accounting Firm
|
To the Shareholders and the Board of Directors of Baldwin & Lyons, Inc.
|
Opinion on Internal Control over Financial Reporting
We have audited Baldwin & Lyons, Inc. and subsidiaries' internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Baldwin & Lyons, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Baldwin & Lyons, Inc. and subsidiaries as of December 31, 2017 and 2016, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and financial statement schedules listed in the Index at Item 15 (a) (collectively referred to as the "consolidated financial statements") and our report dated March 13, 2018 expressed an unqualified opinion thereon.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
|
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
|
Definition and Limitations of Internal Control over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
|
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
|
/s/ Ernst & Young LLP
Indianapolis, Indiana
March 13, 2018
|
Name
|
Age
|
Title
|
Served in
Such Capacity Since
|
||
Steven A. Shapiro
|
53
|
Executive Chairman
|
2015 (1)
|
||
W. Randall Birchfield
|
53
|
Chief Executive Officer, President and Chief Operating Officer
|
2016 (2)
|
||
William C. Vens
|
46
|
Chief Financial Officer
|
2016 (3)
|
||
Matthew A. Thompson
|
53
|
Executive Vice President
|
2016 (4)
|
(a) |
1.
List of Financial Statements
--The following consolidated financial statements of the registrant and its subsidiaries (including the Report of Independent Registered Public Accounting Firm) are submitted in Item 8 of this Annual Report on Form 10-K.
|
Consolidated Balance Sheets - December 31, 2017 and 2016
|
Consolidated Statements of Income - Years ended December 31, 2017, 2016 and 2015
Consolidated Statements of Comprehensive Income – Years ended December 31, 2017, 2016 and 2015
|
Consolidated Statements of Shareholders' Equity - Years ended December 31, 2017, 2016 and 2015
|
Consolidated Statements of Cash Flows - Years ended December 31, 2017, 2016 and 2015
|
Notes to Consolidated Financial Statements
|
2.
|
List of Financial Statement Schedules
--The following consolidated financial statement schedules of Baldwin & Lyons, Inc. and subsidiaries are included in this Annual Report on Form 10-K:
|
Pursuant to Article 7:
|
Schedule I -- Summary of Investments--Other than Investments in Related Parties
|
Schedule II -- Condensed Financial Information of the Registrant
|
Schedule III -- Supplementary Insurance Information
|
Schedule IV -- Reinsurance
|
Schedule VI -- Supplemental Information Concerning Property/Casualty Insurance Operations
|
Number and Caption from Exhibit Table of Item 601 of Regulation S-K
|
Exhibit Number and Description
|
||
(3) (Articles of Incorporation and By Laws)
|
EXHIBIT 3(i) –
Articles of Incorporation of Baldwin & Lyons, Inc., as amended (Incorporated as an exhibit by reference to Exhibit A to the Company's definitive Proxy Statement for its Annual Meeting held May 10, 2016)
|
||
EXHIBIT 3(ii)--
By-Laws of Baldwin & Lyons, Inc., as amended May 10, 2016 (Incorporated as an exhibit by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed May 13, 2016) |
|||
(10) (Material Contracts)
|
EXHIBIT 10(a)-- 1981 Employee Stock Purchase Plan (Incorporated as an exhibit by reference to Exhibit A to the Company's definitive Proxy Statement for its Annual Meeting held May 5, 1981) (SEC File No. 000-05534)*
|
||
EXHIBIT 10(f)--
Baldwin & Lyons, Inc. Executive Incentive Bonus Plan (Incorporated as an exhibit by reference to the Company's definitive Proxy Statement for its Annual Meeting held May 4, 2010) (SEC File No. 000-05534)*
|
|||
EXHIBIT 10(g)--
Baldwin & Lyons, Inc. Restricted Stock Compensation Plan (Incorporated as an exhibit by reference to the Company's definitive Proxy Statement for its Annual Meeting held May 4, 2010)(SEC File No. 000-05534)*
EXHIBIT 10(h)--
Baldwin & Lyons, Inc. Annual Incentive Plan (Incorporated as an exhibit by reference to the Company's definitive Proxy Statement for its Annual Meeting held May 9, 2017)(SEC File No. 000-05534)*
EXHIBIT 10(i)--
Baldwin & Lyons, Inc. Long-Term Incentive Plan (Incorporated as an exhibit by reference to the Company's definitive Proxy Statement for its Annual Meeting held May 9, 2017)(SEC File No. 000-05534)*
|
|||
(
21
) (Subsidiaries of the registrant)
|
EXHIBIT
21
--
Subsidiaries of Baldwin & Lyons, Inc. |
||
(
23
) (Consents of experts and counsel)
|
EXHIBIT
23
--
Consent of Ernst & Young LLP |
(
24
) (Powers of Attorney)
|
EXHIBIT
24
—
Powers of Attorney for certain Officers and Directors
|
(
31.1
) (Certification)
|
EXHIBIT
31.1
—
Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act
|
( 31.2 ) (Certification) |
EXHIBIT
31.2
--
Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act
|
(
32
) (Certification)
|
EXHIBIT
32
--
Certification of CEO and CFO pursuant to Section 906 of the
Sarbanes-Oxley Act and 18 U.S.C. 1350
|
(101) |
The following materials from Baldwin & Lyons, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (1) the Consolidated Balance Sheets, (2) the Consolidated Statements of Income, (3) the Consolidated Statements of Comprehensive Income, (4) the Consolidated Statements of Shareholders' Equity, (5) the Consolidated Statements of Cash Flows, and (6) the Notes to Consolidated Financial Statements.
|
SCHEDULE I -- SUMMARY OF INVESTMENTS-
|
||||||||||||
OTHER THAN INVESTMENTS IN RELATED PARTIES
|
||||||||||||
Form 10-K - Year Ended December 31, 2017
|
||||||||||||
Baldwin & Lyons, Inc. and Subsidiaries
|
||||||||||||
Column A
|
Column B
|
Column C
|
Column D
|
|||||||||
Amount At
|
||||||||||||
Which Shown
|
||||||||||||
Fair
|
In The Balance
|
|||||||||||
Type of Investment
|
Cost
|
Value
|
Sheet (A)
|
|||||||||
(dollars in thousands)
|
||||||||||||
Fixed Maturities:
|
||||||||||||
Bonds:
|
||||||||||||
Agency collateralized mortgage obligations
|
$
|
15,839
|
$
|
16,586
|
$
|
16,586
|
||||||
Agency mortgage-backed securities
|
27,180
|
27,075
|
27,075
|
|||||||||
Asset-backed securities
|
42,861
|
43,469
|
43,469
|
|||||||||
Bank loans
|
19,271
|
19,488
|
19,488
|
|||||||||
Certificates of deposit
|
3,124
|
3,135
|
3,135
|
|||||||||
Collateralized mortgage obligations
|
6,079
|
6,492
|
6,492
|
|||||||||
Corporate securities
|
197,201
|
197,130
|
197,130
|
|||||||||
Mortgage-backed securities
|
23,656
|
24,204
|
24,204
|
|||||||||
Municipal obligations
|
97,059
|
96,650
|
96,650
|
|||||||||
Non-U.S. government obligations
|
39,189
|
38,613
|
38,613
|
|||||||||
U.S. government obligations
|
49,558
|
49,011
|
49,011
|
|||||||||
Total fixed maturities
|
521,017
|
521,853
|
521,853
|
|||||||||
Equity Securities:
|
||||||||||||
Common Stocks:
|
||||||||||||
Consumer
|
23,565
|
46,578
|
46,578
|
|||||||||
Energy
|
6,763
|
10,278
|
10,278
|
|||||||||
Financial
|
31,859
|
45,470
|
45,470
|
|||||||||
Industrial
|
8,949
|
25,402
|
25,402
|
|||||||||
Technology
|
5,768
|
13,061
|
13,061
|
|||||||||
Funds (e.g. mutual funds, closed end funds, ETFs)
|
46,177
|
50,291
|
50,291
|
|||||||||
Other
|
7,670
|
10,683
|
10,683
|
|||||||||
Total equity securities
|
130,751
|
201,763
|
201,763
|
|||||||||
Short-term:
|
||||||||||||
Certificates of deposit
|
1,000
|
1,000
|
1,000
|
|||||||||
Total short-term and other
|
1,000
|
1,000
|
1,000
|
|||||||||
Total investments
|
$
|
652,768
|
$
|
724,616
|
$
|
724,616
|
||||||
(A) Amounts presented above do not include investments of $59,174 classified as cash and
|
||||||||||||
cash equivalents in the balance sheet.
|
SCHEDULE II
|
||||||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
|
||||||||
Form 10-K
|
||||||||
Baldwin & Lyons, Inc.
|
||||||||
Condensed Balance Sheets
|
||||||||
December 31
|
||||||||
2017
|
2016
|
|||||||
(dollars in thousands)
|
||||||||
Assets
|
||||||||
Investment in subsidiaries
|
$
|
436,879
|
$
|
409,892
|
||||
Due from affiliates
|
1,191
|
3,381
|
||||||
Investments other than subsidiaries:
|
||||||||
Fixed maturities
|
22,306
|
10,166
|
||||||
Limited partnerships
|
222
|
205
|
||||||
22,528
|
10,371
|
|||||||
Cash and cash equivalents
|
26,496
|
14,995
|
||||||
Accounts receivable
|
6,833
|
7,602
|
||||||
Other assets
|
24,772
|
25,763
|
||||||
Total assets
|
$
|
518,699
|
$
|
472,004
|
||||
Liabilities and shareholders' equity
|
||||||||
Liabilities:
|
||||||||
Premiums payable
|
$
|
14,046
|
$
|
11,973
|
||||
Deposits from insureds
|
60,893
|
30,087
|
||||||
Short-term borrownings
|
20,000
|
20,000
|
||||||
Other liabilities
|
4,949
|
5,599
|
||||||
99,888
|
67,659
|
|||||||
Shareholders' equity:
|
||||||||
Common stock:
|
||||||||
Class A
|
112
|
112
|
||||||
Class B
|
530
|
532
|
||||||
Additional paid-in capital
|
55,078
|
54,286
|
||||||
Unrealized net gains on investments
|
46,700
|
34,051
|
||||||
Foreign exchange adjustment
|
(309
|
)
|
(831
|
)
|
||||
Retained earnings
|
316,700
|
316,195
|
||||||
418,811
|
404,345
|
|||||||
Total liabilities and shareholders' equity
|
$
|
518,699
|
$
|
472,004
|
SCHEDULE II
|
||||||||||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
|
||||||||||||
Form 10-K
|
||||||||||||
Baldwin & Lyons, Inc.
|
||||||||||||
Condensed Statements of Income
|
||||||||||||
Year Ended December 31
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
(dollars in thousands)
|
||||||||||||
Revenue:
|
||||||||||||
Commissions and service fees
|
$
|
18,863
|
$
|
27,736
|
$
|
23,523
|
||||||
Cash dividends from subsidiaries
|
10,000
|
20,000
|
20,000
|
|||||||||
Net investment income
|
348
|
134
|
120
|
|||||||||
Net realized gains (losses) on investments
|
308
|
(3
|
)
|
(22
|
)
|
|||||||
Other
|
(106
|
)
|
(24
|
)
|
(17
|
)
|
||||||
29,413
|
47,843
|
43,604
|
||||||||||
Expenses:
|
||||||||||||
Salary and related items
|
18,140
|
17,462
|
17,616
|
|||||||||
Other
|
9,686
|
10,808
|
7,297
|
|||||||||
27,826
|
28,270
|
24,913
|
||||||||||
Income before federal income taxes
|
||||||||||||
and equity in undistributed
|
||||||||||||
income of subsidiaries
|
1,587
|
19,573
|
18,691
|
|||||||||
Federal income tax benefit
|
(2,971
|
)
|
(69
|
)
|
(350
|
)
|
||||||
4,558
|
19,642
|
19,041
|
||||||||||
Equity in undistributed income
|
||||||||||||
of subsidiaries
|
13,765
|
9,303
|
4,242
|
|||||||||
Net income
|
$
|
18,323
|
$
|
28,945
|
$
|
23,283
|
SCHEDULE II
|
||||||||||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
|
||||||||||||
Form 10-K
|
||||||||||||
Baldwin & Lyons, Inc.
|
||||||||||||
Condensed Statements of Comprehensive Income
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
(dollars in thousands)
|
||||||||||||
Net income
|
$
|
18,323
|
$
|
28,945
|
$
|
23,283
|
||||||
Other comprehensive income (loss), net of tax:
|
||||||||||||
Unrealized net losses on securities:
|
||||||||||||
Unrealized holding net gains (losses) arising during the period
|
17,340
|
8,618
|
(12,639
|
)
|
||||||||
Less: reclassification adjustment for net gains
|
||||||||||||
included in net income
|
(4,691
|
)
|
(13,491
|
)
|
(277
|
)
|
||||||
Other comprehensive income (loss), net of tax
|
12,649
|
(4,873
|
)
|
(12,916
|
)
|
|||||||
Foreign currency translation adjustments
|
522
|
235
|
(1,456
|
)
|
||||||||
Other comprehensive income (loss)
|
13,171
|
(4,638
|
)
|
(14,372
|
)
|
|||||||
Comprehensive income
|
$
|
31,494
|
$
|
24,307
|
$
|
8,911
|
SCHEDULE II
|
||||||||||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
|
||||||||||||
Form 10-K
|
||||||||||||
Baldwin & Lyons, Inc.
|
||||||||||||
Condensed Statements of Cash Flows
|
||||||||||||
Year Ended December 31
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
(dollars in thousands)
|
||||||||||||
Net cash provided by operating activities
|
$
|
44,998
|
$
|
15,484
|
$
|
21,841
|
||||||
Investing activities:
|
||||||||||||
Purchases of long-term investments
|
(21,365
|
)
|
(4,000
|
)
|
(4,792
|
)
|
||||||
Sales or maturities of long-term investments
|
9,146
|
3,493
|
4,194
|
|||||||||
Net sales of short-term investments
|
-
|
2,165
|
-
|
|||||||||
Distributions from limited partnerships
|
298
|
-
|
-
|
|||||||||
Net purchases of property and equipment
|
(3,394
|
)
|
(4,278
|
)
|
(4,921
|
)
|
||||||
Net cash used in investing activities
|
(15,315
|
)
|
(2,620
|
)
|
(5,519
|
)
|
||||||
Financing activities:
|
||||||||||||
Dividends paid to shareholders
|
(16,302
|
)
|
(15,803
|
)
|
(15,003
|
)
|
||||||
Repurchase of common shares
|
(1,880
|
)
|
-
|
-
|
||||||||
Net cash used in financing activities
|
(18,182
|
)
|
(15,803
|
)
|
(15,003
|
)
|
||||||
Increase (decrease) in cash and cash equivalents
|
11,501
|
(2,939
|
)
|
1,319
|
||||||||
Cash and cash equivalents at beginning of year
|
14,995
|
17,934
|
16,615
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
26,496
|
$
|
14,995
|
$
|
17,934
|
||||||
|
SCHEDULE IV -- REINSURANCE
|
||||||||||||||||||||
Form 10-K
|
||||||||||||||||||||
Baldwin & Lyons, Inc. and Subsidiaries
|
||||||||||||||||||||
Column A
|
Column B
|
Column C
|
Column D
|
Column E
|
Column F
|
|||||||||||||||
% of
|
||||||||||||||||||||
Ceded
|
Assumed
|
Amount
|
||||||||||||||||||
Direct
|
to Other
|
from Other
|
Net
|
Assumed to
|
||||||||||||||||
Premiums
|
Companies
|
Companies
|
Amount
|
Net
|
||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||
Premiums Earned -
|
||||||||||||||||||||
Years Ended December 31:
|
||||||||||||||||||||
2017
|
$
|
470,158
|
$
|
145,201
|
$
|
3,188
|
$
|
328,145
|
1.0
|
|||||||||||
2016
|
394,679
|
130,012
|
11,344
|
276,011
|
4.1
|
|||||||||||||||
2015
|
370,499
|
128,697
|
21,533
|
263,335
|
8.0
|
CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS
|
|||||||||||||||||||||
Form 10-K
|
|||||||||||||||||||||
Baldwin & Lyons, Inc. and Subsidiaries
|
|||||||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||
Column A
|
|
Column B
|
Column C
|
|
Column D
|
|
Column E
|
|
Column F
|
|
Column G
|
|
Column H
|
|
|
|
Column I
|
|
Column J
|
|
Column K
|
As of December 31
|
|
|
|
|
|
Year Ended December 31
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Reserves
|
Claims and Claim
|
Amortiza-
|
|||||||||||||||||||
for Unpaid
|
Discount,
|
Adjustment Expenses
|
tion of
|
||||||||||||||||||
Deferred
|
Claims
|
if any
|
Incurred Related to
|
Deferred
|
Paid Claims
|
||||||||||||||||
AFFILIATION
|
Policy
|
and Claim
|
Deducted
|
Net
|
(1)
|
(2)
|
Policy
|
and Claim
|
Net
|
||||||||||||
WITH
|
Acquisi-
|
Adjustment
|
in
|
Unearned
|
Earned
|
Investment
|
Current
|
Prior
|
Acquisition
|
Adjustment
|
Premiums
|
||||||||||
REGISTRANT
|
tion Costs
|
Expenses
|
Column C
|
Premiums
|
Premiums
|
Income
|
Year
|
Years
|
Costs
|
Expenses
|
Written
|
||||||||||
Consolidated Property/Casualty Subsidiaries:
|
(A)
|
||||||||||||||||||||
2017
|
$5,608
|
$680,274
|
$-
|
$53,085
|
$328,145
|
$18,095
|
$228,303
|
$19,215
|
$70,574
|
$200,154
|
$353,389
|
||||||||||
2016
|
1,172
|
576,330
|
-
|
21,694
|
276,011
|
14,483
|
172,645
|
13,836
|
51,597
|
163,467
|
271,752
|
||||||||||
2015
|
1,443
|
513,596
|
2,110
|
25,291
|
263,335
|
12,498
|
165,812
|
(10,062)
|
50,270
|
149,580
|
254,653
|
1 Year Baldwin & Lyons Chart |
1 Month Baldwin & Lyons Chart |
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