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Investments (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2017 and December 31, 2016 included the following:

	June 30, 2017
(In thousands)	Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
Fixed maturities
U.S. Treasury obligations	$	143,088			$	1,092			$	727			$	143,453
U.S. Government-sponsored enterprise obligations	20,179				140				127				20,192
State and municipal bonds	702,688				21,217				2,069				721,836
Corporate debt	1,294,689				23,274				5,235				1,312,728
Residential mortgage-backed securities	204,179				3,369				1,133				206,415
Agency commercial mortgage-backed securities	11,945				77				62				11,960
Other commercial mortgage-backed securities	17,087				152				82				17,157
Other asset-backed securities	112,098				361				93				112,366
	$	2,505,953			$	49,682			$	9,528			$	2,546,107
	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 June 30, 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	$	143,088			$	29,357			$	92,270			$	18,815			$	3,011			$	143,453
U.S. Government-sponsored enterprise obligations	20,179				499				7,873				11,678				142				20,192
State and municipal bonds	702,688				54,052				243,955				308,236				115,593				721,836
Corporate debt	1,294,689				138,176				733,558				418,955				22,039				1,312,728
Residential mortgage-backed securities	204,179																				206,415
Agency commercial mortgage-backed securities	11,945																				11,960
Other commercial mortgage-backed securities	17,087																				17,157
Other asset-backed securities	112,098																				112,366
	$	2,505,953																			$	2,546,107

Unconsolidated subsidiaries

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

	Carrying Value
(In thousands)	June 30, 2017				December 31, 2016
Investment in LPs/LLCs:
Qualified affordable housing tax credit partnerships	$	95,041			$	102,313
Other tax credit partnerships	8,976				11,459
All other LPs/LLCs	226,312				227,134
	$	330,329			$	340,906

Other investments

Other investments at June 30, 2017 and December 31, 2016 were comprised as follows:

(In thousands)	June 30, 2017				December 31, 2016
Investments in LPs/LLCs, at cost	$	46,200			$	46,852
Convertible securities, at fair value	30,814				31,501
Other, principally FHLB capital stock, at cost	3,452				3,539
	$	80,466			$	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 June 30, 2017 and December 31, 2016, including the length of time the investment had been held in a continuous unrealized loss position.

	June 30, 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	$	83,416			$	727			$	78,080			$	664			$	5,336			$	63
U.S. Government-sponsored enterprise obligations	15,907				127				15,907				127				—				—
State and municipal bonds	111,522				2,069				103,371				1,441				8,151				628
Corporate debt	372,586				5,235				336,877				3,167				35,709				2,068
Residential mortgage-backed securities	89,610				1,133				87,491				1,086				2,119				47
Agency commercial mortgage-backed securities	4,568				62				4,188				34				380				28
Other commercial mortgage-backed securities	9,147				82				7,457				65				1,690				17
Other asset-backed securities	40,149				93				38,264				91				1,885				2
	$	726,905			$	9,528			$	671,635			$	6,675			$	55,270			$	2,853

	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 June 30								Six Months Ended June 30
(In thousands)	2017				2016				2017				2016
Fixed maturities	$	18,841			$	21,208			$	38,962			$	43,784
Equities	4,298				3,561				7,942				7,204
Short-term and Other investments	978				678				1,778				1,082
BOLI	442				439				897				899
Investment fees and expenses	(1,882		)		(1,303		)		(3,716		)		(2,946		)
Net investment income	$	22,677			$	24,583			$	45,863			$	50,023

Net realized investment gains (losses)

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

	Three Months Ended June 30								Six Months Ended June 30
(In thousands)	2017				2016				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	746				1,885				2,599				5,070
Gross realized (losses), available-for-sale securities	(1,401		)		(612		)		(1,468		)		(5,259		)
Net realized gains (losses), Short-term investments	—				18				—				18
Net realized gains (losses), trading securities	794				1,913				7,356				3,968
Net realized gains (losses), Other investments	546				447				1,719				498
Change in unrealized holding gains (losses), trading securities	(3,191		)		7,115				424				7,851
Change in unrealized holding gains (losses), convertible securities, carried at fair value	285				162				598				95
Other	2				1				4				3
Net realized investment gains (losses)	$	(2,219	)		$	10,929			$	11,061			$	2,578

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 June 30								Six Months Ended June 30
(In thousands)	2017				2016				2017				2016
Balance beginning of period	$	1,329			$	6,559			$	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)	(16		)		(3,240		)		(16		)		(6,984		)
Balance June 30	$	1,313			$	3,319			$	1,313			$	3,319

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 June 30								Six Months Ended June 30
(In millions)	2017				2016				2017				2016
Proceeds from sales (exclusive of maturities and paydowns)	$	156.3			$	82.0			$	235.5			$	191.9
Purchases	$	198.7			$	173.6			$	359.1			$	373.2

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