The Company manages its business through four business segments: Commercial Specialty, Specialty Property, Farm, Ranch & Stable, and Reinsurance Operations. The Commercial Specialty, Specialty Property, and Farm, Ranch & Stable segments comprise the Company’s Insurance Operations, which currently includes the operations of United National Insurance Company, Diamond State Insurance Company, Penn-America Insurance Company, Penn-Star Insurance Company, Penn-Patriot Insurance Company, American Reliable Insurance Company, American Insurance Adjustment Agency, Inc., Collectibles Insurance Services, LLC, Global Indemnity Insurance Agency, LLC, and J.H. Ferguson & Associates, LLC. Prior to the redomestication, the Company’s Reinsurance Operations consisted solely of the operations of Global Indemnity Reinsurance. In connection with the redomestication, Global Indemnity Reinsurance merged into Penn-Patriot Insurance Company and all of its business was assumed by the Company’s existing insurance company subsidiaries.
Gross written premiums decreased by 4.8% for year ended December 31, 2020 as compared to 2019. Gross written premiums include business written by American Reliable that is ceded to insurance entities owned by Assurant under a 100% quota share reinsurance agreement in the amount of less than $0.1 million and ($0.3) million for the years ended December 31, 2020 and 2019, respectively. Excluding the business that is ceded 100% to insurance entities owned by Assurant, gross written premiums decreased by 4.8% for the year ended December 31, 2020 as compared to 2019. The decrease is mainly due to the reduction of catastrophe exposed business within both Specialty Property and Farm, Ranch & Stable, reduction in business not providing an adequate return on capital within Specialty Property, and Reinsurance Operations’ non-renewal of its property catastrophe treaties. In addition, non-renewals of several small business classes was higher and new business growth slowed within Commercial Specialty which was likely the result of Covid-19. These reductions in premiums were partially offset by organic growth from existing agents, increased pricing, and several new programs within Commercial Specialty and growth of the new casualty treaty entered into by Reinsurance Operations in 2019.
Excludes business written by American Reliable that is ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement of less than $0.1 million, ($0.3) million, and ($2.1) million during the years ended December 31, 2020, 2019, and 2018, respectively.
As of December 31, 2020, the Company had available a margin borrowing facility. The Company did not have any amounts outstanding on the margin borrowing facility as of December 31, 2020. The amount outstanding on the Company’s margin borrowing facility was $73.6 million as of December 31, 2019. The borrowing rate for this facility was tied to the Fed Funds Effective rate and was approximately 0.8% and 1.9% at December 31, 2020 and 2019, respectively. This facility is due on demand. The borrowings are subject to maintenance margin, which is a minimum account balance that must be maintained. A decline in market conditions could require an additional deposit of collateral. The Company did not have any securities that were deposited as collateral at December 31, 2020. Approximately $88.2 million in securities were deposited as collateral to support borrowings as of December 31, 2019. The amount borrowed against the margin account may fluctuate as routine investment transactions, such as dividends received, investment income received, maturities and pay-downs, impact cash balances. The margin facility contains customary events of default, including, without limitation, insolvency, failure to make required payments, failure to comply with any representations or warranties, failure to adequately assure future performance, and failure of a guarantor to perform under its guarantee. The amount outstanding on the Company’s margin borrowing facility was $73.6 million as of December 31, 2019.
For the years ended December 31, 2020 and 2018, “weighted average shares outstanding - basic” was used to calculate “diluted earnings per share” due to a net loss for the period.
associated with these limited liability companies and limited partnerships, which is booked on a one quarter lag, is reflected in the consolidated statements of operations in the amounts of $(6.2) million, less than $0.1 million, and $6.9 million for the years ended December 31, 2020, 2019, and 2018, respectively.
As of December 31, 2020 and 2019, indefinite lived intangible assets, which are comprised of tradenames, trademarks, and state insurance licenses, were $19.0 million. Impairment testing performed in 2020 and 2019 indicated that there was no impairment of these assets.
For premiums receivables, the allowance is based upon the Company’s ongoing review of key aspects of amounts outstanding, including but not limited to, length of collection periods, direct placement with collection agencies, solvency of insured or agent, terminated agents, and other relevant factors.
Farm, Ranch & Stable is primarily comprised of business acquired in the purchase of American Reliable, which occurred on January 1, 2015. The acquisition included the purchase of the business of the legal entity as well as additional books of business written by other Assurant entities. In addition, ceding arrangements subsequent to the date of the acquisition are not consistent with years prior to the acquisition. As a result, it is not practical, nor would it be consistent, to include information for years prior to 2015 in the development tables for Farm, Ranch & Stable.
The reconciliation of the net incurred and paid claims development tables to the liability for unpaid losses and loss adjustment expenses in the consolidated balance sheets as of December 31, 2020 is as follows:
The following tables summarize the range of exercise prices of options outstanding at December 31, 2020, 2019, and 2018:
During 2018, the Company granted 38,778 restricted class A common shares, with a weighted average grant date value of $40.57 per share, to key employees under the Plan. 11,843 of these shares vested immediately. The remainder will vest as follows: