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Investments (Tables)

3 Months Ended

Mar. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Amortized cost and estimated fair value of available-for-sale fixed maturities and equity securities

Available-for-sale securities at March 31, 2017 and December 31, 2016 included the following:

	March 31, 2017
(In thousands)	Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
Fixed maturities
U.S. Treasury obligations	$	147,826			$	1,203			$	818			$	148,211
U.S. Government-sponsored enterprise obligations	28,621				241				161				28,701
State and municipal bonds	755,639				19,139				4,717				770,061
Corporate debt	1,291,140				21,812				6,979				1,305,973
Residential mortgage-backed securities	206,455				3,407				1,956				207,906
Agency commercial mortgage-backed securities	12,727				63				102				12,688
Other commercial mortgage-backed securities	19,650				153				106				19,697
Other asset-backed securities	111,214				191				213				111,192
	$	2,573,272			$	46,209			$	15,052			$	2,604,429
	December 31, 2016
(In thousands)	Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
Fixed maturities
U.S. Treasury obligations	$	146,186			$	1,264			$	911			$	146,539
U.S. Government-sponsored enterprise obligations	30,038				388				191				30,235
State and municipal bonds	790,154				17,261				6,952				800,463
Corporate debt	1,264,812				22,659				8,480				1,278,991
Residential mortgage-backed securities	216,285				3,667				2,046				217,906
Agency commercial mortgage-backed securities	12,837				89				143				12,783
Other commercial mortgage-backed securities	19,571				177				137				19,611
Other asset-backed securities	106,938				207				267				106,878
	$	2,586,821			$	45,712			$	19,127			$	2,613,406

Schedule of available for sale securities by contractual maturity

The recorded cost basis and estimated fair value of available-for-sale fixed maturities at March 31, 2017, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In thousands)	Amortized Cost				Due in one year or less				Due after one year through five years				Due after five years through ten years				Due after ten years				Total Fair Value
Fixed maturities, available for sale
U.S. Treasury obligations	$	147,826			$	28,876			$	98,304			$	18,042			$	2,989			$	148,211
U.S. Government-sponsored enterprise obligations	28,621				12,863				7,781				7,918				139				28,701
State and municipal bonds	755,639				66,017				264,597				348,641				90,806				770,061
Corporate debt	1,291,140				122,549				764,626				388,119				30,679				1,305,973
Residential mortgage-backed securities	206,455																				207,906
Agency commercial mortgage-backed securities	12,727																				12,688
Other commercial mortgage-backed securities	19,650																				19,697
Other asset-backed securities	111,214																				111,192
	$	2,573,272																			$	2,604,429

Unconsolidated subsidiaries

ProAssurance holds investments in unconsolidated subsidiaries, accounted for under the equity method. The investments include the following:

	Carrying Value
(In thousands)	March 31, 2017				December 31, 2016
Investment in LPs/LLCs:
Qualified affordable housing tax credit partnerships	$	99,005			$	102,313
Other tax credit partnerships	11,041				11,459
All other LPs/LLCs	220,433				227,134
	$	330,479			$	340,906

Other investments

Other investments at March 31, 2017 and December 31, 2016 were comprised as follows:

(In thousands)	March 31, 2017				December 31, 2016
Investments in LPs/LLCs, at cost	$	47,164			$	46,852
Convertible securities, at fair value	29,978				31,501
Other, principally FHLB capital stock, at cost	3,434				3,539
	$	80,576			$	81,892

Investments held in an unrealized loss position

The following tables provide summarized information with respect to investments held in an unrealized loss position at March 31, 2017 and December 31, 2016, including the length of time the investment had been held in a continuous unrealized loss position.

	March 31, 2017
	Total								Less than 12 months								12 months or longer
	Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
(In thousands)	Value				Loss				Value				Loss				Value				Loss
Fixed maturities, available for sale
U.S. Treasury obligations	$	82,630			$	818			$	82,630			$	818			$	—			$	—
U.S. Government-sponsored enterprise obligations	10,507				161				10,507				161				—				—
State and municipal bonds	167,434				4,717				160,343				4,132				7,091				585
Corporate debt	416,640				6,979				382,246				4,361				34,394				2,618
Residential mortgage-backed securities	97,495				1,956				95,381				1,922				2,114				34
Agency commercial mortgage-backed securities	4,571				102				4,191				72				380				30
Other commercial mortgage-backed securities	10,890				106				9,075				85				1,815				21
Other asset-backed securities	46,008				213				42,018				207				3,990				6
	$	836,175			$	15,052			$	786,391			$	11,758			$	49,784			$	3,294

	December 31, 2016
	Total								Less than 12 months								12 months or longer
	Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
(In thousands)	Value				Loss				Value				Loss				Value				Loss
Fixed maturities, available for sale
U.S. Treasury obligations	$	79,833			$	911			$	79,833			$	911			$	—			$	—
U.S. Government-sponsored enterprise obligations	11,746				191				11,746				191				—				—
State and municipal bonds	224,884				6,952				219,276				6,444				5,608				508
Corporate debt	469,632				8,480				424,721				5,662				44,911				2,818
Residential mortgage-backed securities	103,680				2,046				100,542				1,982				3,138				64
Agency commercial mortgage-backed securities	4,579				143				4,192				114				387				29
Other commercial mortgage-backed securities	9,822				137				9,179				134				643				3
Other asset-backed securities	44,343				267				39,079				256				5,264				11
	$	948,519			$	19,127			$	888,568			$	15,694			$	59,951			$	3,433

Net Investment Income

Net investment income by investment category was as follows:

	Three Months Ended March 31
(In thousands)	2017				2016
Fixed maturities	$	20,121			$	22,575
Equities	3,644				3,643
Short-term and Other investments	801				405
BOLI	455				460
Investment fees and expenses	(1,835		)		(1,643		)
Net investment income	$	23,186			$	25,440

Net realized investment gains (losses)

The following table provides detailed information regarding Net realized investment gains (losses):

	Three Months Ended March 31
(In thousands)	2017				2016
Total OTTI losses:
Corporate debt	$	(419	)		$	(7,604	)
Other investments	—				(3,130		)
Portion of OTTI losses recognized in other comprehensive income before taxes:
Corporate debt	248				1,068
Net impairment losses recognized in earnings	(171		)		(9,666		)
Gross realized gains, available-for-sale securities	1,853				3,185
Gross realized (losses), available-for-sale securities	(67		)		(4,647		)
Net realized gains (losses), trading securities	6,562				2,055
Net realized gains (losses), Other investments	1,172				52
Change in unrealized holding gains (losses), trading securities	3,616				733
Change in unrealized holding gains (losses), convertible securities, carried at fair value	313				(66		)
Other	2				2
Net realized investment gains (losses)	$	13,280			$	(8,352	)

Other than temporary impairment, credit losses recognized in earnings

The following table presents a roll forward of cumulative credit losses recorded in earnings related to impaired debt securities for which a portion of the OTTI was recorded in OCI.

	Three Months Ended March 31
(In thousands)	2017				2016
Balance beginning of period	$	1,158			$	5,751
Additional credit losses recognized during the period, related to securities for which:
No OTTI has been previously recognized	171				2,398
OTTI has been previously recognized	—				2,154
Reductions due to:
Securities sold during the period (realized)	—				(3,744		)
Balance March 31	$	1,329			$	6,559

Information regarding sales and purchases of available-for-sale securities

Other information regarding sales and purchases of available-for-sale securities is as follows:

	Three Months Ended March 31
(In millions)	2017				2016
Proceeds from sales (exclusive of maturities and paydowns)	$	79.2			$	109.9
Purchases	$	160.4			$	199.6

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