Leases (Notes)

12 Months Ended

Dec. 31, 2019

Leases

We have various operating leases for office space, equipment, and fleet vehicles. In addition, we have various finance leases for computer hardware. Such lease agreements, which expire at various dates through 2030, are generally renewed or replaced by similar leases.

Upon adoption of ASU 2016-02 on January 1, 2019, we recorded operating lease right-of-use assets of $20.7 million with related lease liabilities of $21.0 million. The differential of $0.3 million was recognized, on an after-tax basis, as a cumulative-effect adjustment to the opening balance of retained earnings as of January 1, 2019. Financing lease right-of-use assets and the related lease liabilities were $0.9 million as of January 1, 2019. See Note 2. "Summary of Significant Accounting Policies" and Note 3. "Adoption of Accounting Pronouncements" in this Form 10-K for additional information regarding our accounting policy on leases and ASU 2016-02, respectively.

The components of lease expense for the year ended December 31, 2019 were as follows:



($ in thousands)	2019
Operating lease cost, included in Other insurance expenses on the Consolidated Statements of Income	$	8,808
Finance lease cost:
Amortization of assets, included in Other insurance expenses on the Consolidated Statements of Income	984
Interest on lease liabilities, included in Interest expense on the Consolidated Statements of Income	16
Total finance lease cost	1,000

Variable lease cost, included in Other insurance expenses on the Consolidated Statements of Income	48

Short-term lease cost, included in Other insurance expenses on the Consolidated Statements of Income	$	2,165

The following table provides supplemental information regarding our operating and finance leases.



	December 31, 2019
Weighted-average remaining lease term
Operating leases	6	years
Finance leases	2
Weighted-average discount rate
Operating leases	3.4	%
Finance leases¹	2.1

¹Prior to adoption of ASU 2016-02, our historical capital lease liabilities and assets were measured using an un-discounted cash flow stream due to immateriality of the capital lease population.

Operating and finance lease asset and liability balances are included within the following line items on the Consolidated Balance Sheets:



($ in thousands)	December 31, 2019
Operating leases
Other assets	$	26,535
Other liabilities	27,506
Finance leases
Property and equipment - at cost, net of accumulated depreciation and amortization	731
Long-term debt	$	737

At December 31, 2019, the maturities of our lease liabilities were as follows:



($ in thousands)	Finance Leases		Operating Leases	Total
Year ended December 31,
2020	$	451	8,244	8,695
2021	248		6,168	6,416
2022	54		4,590	4,644
2023	—		3,329	3,329
2024	—		2,920	2,920
Thereafter	—		8,638	8,638
Total lease payments	753		33,889	34,642
Less: imputed interest	16		2,995	3,011
Less: leases that have not yet commenced	—		3,388	3,388
Total lease liabilities	$	737	27,506	28,243

At December 31, 2018, the maturities of our lease liabilities for capital and operating leases were as follows:



($ in thousands)	Capital Leases		Operating Leases	Total
2019	$	728	7,762	8,490
2020	141		7,355	7,496
2021	22		5,083	5,105
2022	—		3,641	3,641
2023	—		2,900	2,900
Thereafter	—		9,698	9,698
Total minimum payment required	$	891	36,439	37,330

Refer to Note. 4 "Statements of Cash Flows" in this Form 10-K for supplemental cash and non-cash transactions included in the measurement of operating and finance lease liabilities.