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Fair Value of Financial Instruments | 12 Months Ended
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Dec. 31, 2024
Fair Value Disclosures [Abstract] |
Fair Value of Financial Instruments | 5. Fair Value of Financial Instruments The following tables include a list of assets and liabilities that are measured at fair value by hierarchy level as of the dates indicated.
Assets and liabilities carried at fair value by hierarchy level |
|  | December 31, 2024 |
(In thousands) |  | Level I |  |  | Level II |  |  | Level III |  |  | Total |
Investments |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities available for sale |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency securities |  | $ | 119,630 |  |  | $ | 8,702 |  |  | $ | — |  |  | $ | 128,332 |
State and municipal obligations |  |  | — |  |  |  | 148,891 |  |  |  | — |  |  |  | 148,891 |
Corporate bonds and notes |  |  | — |  |  |  | 2,476,639 |  |  |  | — |  |  |  | 2,476,639 |
RMBS |  |  | — |  |  |  | 1,011,630 |  |  |  | — |  |  |  | 1,011,630 |
CMBS |  |  | — |  |  |  | 411,999 |  |  |  | — |  |  |  | 411,999 |
CLO |  |  | — |  |  |  | 411,462 |  |  |  | — |  |  |  | 411,462 |
Other ABS |  |  | — |  |  |  | 438,811 |  |  |  | — |  |  |  | 438,811 |
Mortgage insurance-linked notes (1) |  |  | — |  |  |  | 47,156 |  |  |  | — |  |  |  | 47,156 |
Total fixed maturities available for sale |  |  | 119,630 |  |  |  | 4,955,290 |  |  |  | — |  |  |  | 5,074,920 |
Assets and liabilities carried at fair value by hierarchy level |
|  | December 31, 2024 |
(In thousands) |  | Level I |  |  | Level II |  |  | Level III |  |  | Total |
Fixed maturities trading securities |  |  |  |  |  |  |  |  |  |  |  |
State and municipal obligations |  |  | — |  |  |  | 50,845 |  |  |  | — |  |  |  | 50,845 |
Corporate bonds and notes |  |  | — |  |  |  | 23,940 |  |  |  | — |  |  |  | 23,940 |
RMBS |  |  | — |  |  |  | 3,029 |  |  |  | — |  |  |  | 3,029 |
CMBS |  |  | — |  |  |  | 4,838 |  |  |  | — |  |  |  | 4,838 |
Total fixed maturities trading securities |  |  | — |  |  |  | 82,652 |  |  |  | — |  |  |  | 82,652 |
Equity securities |  |  | 128,368 |  |  |  | 3,275 |  |  |  | 6,546 |  |  |  | 138,189 |
Residential mortgage loans held for sale (2) |  |  | — |  |  |  | 519,885 |  |  |  | — |  |  |  | 519,885 |
Other invested assets (3) (4) |  |  | — |  |  |  | — |  |  |  | 5,908 |  |  |  | 5,908 |
Short-term investments |  |  |  |  |  |  |  |  |  |  |  |
State and municipal obligations |  |  | — |  |  |  | 1,750 |  |  |  | — |  |  |  | 1,750 |
Money market instruments |  |  | 384,934 |  |  |  | — |  |  |  | — |  |  |  | 384,934 |
Corporate bonds and notes |  |  | — |  |  |  | 49,905 |  |  |  | — |  |  |  | 49,905 |
Other ABS |  |  | — |  |  |  | 16,054 |  |  |  | — |  |  |  | 16,054 |
Other investments (5) |  |  | — |  |  |  | 69,005 |  |  |  | — |  |  |  | 69,005 |
Total short-term investments |  |  | 384,934 |  |  |  | 136,714 |  |  |  | — |  |  |  | 521,648 |
Total investments at fair value (4) |  |  | 632,932 |  |  |  | 5,697,816 |  |  |  | 12,454 |  |  |  | 6,343,202 |
Other |  |  |  |  |  |  |  |  |  |  |  |
Derivative assets |  |  | — |  |  |  | 4,274 |  |  |  | — |  |  |  | 4,274 |
Mortgage servicing rights |  |  | — |  |  |  | — |  |  |  | 2,702 |  |  |  | 2,702 |
Loaned securities (6) |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds and notes |  |  | — |  |  |  | 130,256 |  |  |  | — |  |  |  | 130,256 |
Other ABS |  |  | — |  |  |  | 60 |  |  |  | — |  |  |  | 60 |
Equity securities |  |  | 8,805 |  |  |  | — |  |  |  | — |  |  |  | 8,805 |
Securitized residential mortgage loans held for investment (2) |  |  | — |  |  |  | 717,228 |  |  |  | — |  |  |  | 717,228 |
Total assets at fair value (4) |  | $ | 641,737 |  |  | $ | 6,549,634 |  |  | $ | 15,156 |  |  | $ | 7,206,527 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities |  | $ | — |  |  | $ | 40 |  |  | $ | 1,249 |  |  | $ | 1,289 |
Securitized nonrecourse debt (2) |  |  | — |  |  |  | 703,526 |  |  |  | — |  |  |  | 703,526 |
Total liabilities at fair value |  | $ | — |  |  | $ | 703,566 |  |  | $ | 1,249 |  |  | $ | 704,815 |
(1) Includes mortgage insurance-linked notes purchased by Radian Group in connection with the XOL Program. See Note 8 for more information. (2) See Note 7 for more information about our residential mortgage loan activities, including our private label securitization program. (3) Consists primarily of interests in private debt and equity investments. (4) Does not include other invested assets of $2 million that are primarily invested in limited partnership investments valued using the net asset value as a practical expedient. (5) Comprises short-term certificates of deposit and commercial paper. (6) Securities loaned to third-party borrowers under securities lending agreements are classified as other assets on our consolidated balance sheets. See Note 6 for more information on our securities lending agreements.
Assets and liabilities carried at fair value by hierarchy level |
|  | December 31, 2023 |
(In thousands) |  | Level I |  |  | Level II |  |  | Level III |  |  | Total |
Investments |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities available for sale |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency securities |  | $ | 124,734 |  |  | $ | 9,859 |  |  | $ | — |  |  | $ | 134,593 |
State and municipal obligations |  |  | — |  |  |  | 142,785 |  |  |  | — |  |  |  | 142,785 |
Corporate bonds and notes |  |  | — |  |  |  | 2,511,905 |  |  |  | — |  |  |  | 2,511,905 |
RMBS |  |  | — |  |  |  | 1,014,071 |  |  |  | — |  |  |  | 1,014,071 |
CMBS |  |  | — |  |  |  | 558,383 |  |  |  | — |  |  |  | 558,383 |
CLO |  |  | — |  |  |  | 487,849 |  |  |  | — |  |  |  | 487,849 |
Other ABS |  |  | — |  |  |  | 284,559 |  |  |  | — |  |  |  | 284,559 |
Foreign government and agency securities |  |  | — |  |  |  | 5,087 |  |  |  | — |  |  |  | 5,087 |
Mortgage insurance-linked notes (1) |  |  | — |  |  |  | 48,996 |  |  |  | — |  |  |  | 48,996 |
Total fixed maturities available for sale |  |  | 124,734 |  |  |  | 5,063,494 |  |  |  | — |  |  |  | 5,188,228 |
Fixed maturities trading securities |  |  |  |  |  |  |  |  |  |  |  |
State and municipal obligations |  |  | — |  |  |  | 70,844 |  |  |  | — |  |  |  | 70,844 |
Corporate bonds and notes |  |  | — |  |  |  | 24,913 |  |  |  | — |  |  |  | 24,913 |
RMBS |  |  | — |  |  |  | 5,930 |  |  |  | — |  |  |  | 5,930 |
CMBS |  |  | — |  |  |  | 4,736 |  |  |  | — |  |  |  | 4,736 |
Total fixed maturities trading securities |  |  | — |  |  |  | 106,423 |  |  |  | — |  |  |  | 106,423 |
Equity securities |  |  | 81,170 |  |  |  | 5,387 |  |  |  | 2,500 |  |  |  | 89,057 |
Residential mortgage loans held for sale (2) |  |  | — |  |  |  | 32,755 |  |  |  | — |  |  |  | 32,755 |
Other invested assets (3) (4) |  |  | — |  |  |  | — |  |  |  | 7,196 |  |  |  | 7,196 |
Short-term investments |  |  |  |  |  |  |  |  |  |  |  |
State and municipal obligations |  |  | — |  |  |  | 2,700 |  |  |  | — |  |  |  | 2,700 |
Money market instruments |  |  | 368,433 |  |  |  | — |  |  |  | — |  |  |  | 368,433 |
Corporate bonds and notes |  |  | — |  |  |  | 150,930 |  |  |  | — |  |  |  | 150,930 |
CMBS |  |  | — |  |  |  | 1,347 |  |  |  | — |  |  |  | 1,347 |
Other ABS |  |  | — |  |  |  | 1,158 |  |  |  | — |  |  |  | 1,158 |
Other investments (5) |  |  | — |  |  |  | 135,998 |  |  |  | — |  |  |  | 135,998 |
Total short-term investments |  |  | 368,433 |  |  |  | 292,133 |  |  |  | — |  |  |  | 660,566 |
Total investments at fair value (4) |  |  | 574,337 |  |  |  | 5,500,192 |  |  |  | 9,696 |  |  |  | 6,084,225 |
Other |  |  |  |  |  |  |  |  |  |  |  |
Derivative assets |  |  | — |  |  |  | 1,912 |  |  |  | 1 |  |  |  | 1,913 |
Loaned securities (6) |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency securities |  |  | 9,803 |  |  |  | — |  |  |  | — |  |  |  | 9,803 |
Corporate bonds and notes |  |  | — |  |  |  | 117,992 |  |  |  | — |  |  |  | 117,992 |
Equity securities |  |  | 75,898 |  |  |  | — |  |  |  | — |  |  |  | 75,898 |
Total assets at fair value (4) |  | $ | 660,038 |  |  | $ | 5,620,096 |  |  | $ | 9,697 |  |  | $ | 6,289,831 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities |  | $ | — |  |  | $ | 817 |  |  | $ | 692 |  |  | $ | 1,509 |
Total liabilities at fair value |  | $ | — |  |  | $ | 817 |  |  | $ | 692 |  |  | $ | 1,509 |
(1) Includes mortgage insurance-linked notes purchased by Radian Group in connection with the XOL Program. See Note 8 for more information. (2) See Note 7 for more information about our residential mortgage loan activities. (3) Consists primarily of interests in private debt and equity investments. (4) Does not include other invested assets of $1 million that are primarily invested in limited partnership investments valued using the net asset value as a practical expedient. (5) Comprises short-term certificates of deposit and commercial paper. (6) Securities loaned to third-party borrowers under securities lending agreements are classified as other assets in our consolidated balance sheets. See Note 6 for more information. Activity related to Level III assets and liabilities (including realized and unrealized gains and losses, purchases, sales, issuances, settlements and transfers) was immaterial for the years ended December 31, 2024 and 2023. Valuation Methodologies for Assets Measured at Fair Value We are responsible for the determination of the value of all investments carried at fair value and the supporting methodologies and assumptions. To assist us in this responsibility, we utilize independent third-party valuation service providers to gather, analyze and interpret market information and estimate fair values based upon relevant methodologies and assumptions for various asset classes and individual securities. We perform monthly quantitative and qualitative analyses on the prices received from third parties to determine whether the prices are reasonable estimates of fair value. Our analysis includes: (i) a review of the methodology used by third-party pricing services; (ii) a comparison of pricing services’ valuations to other independent sources; (iii) a review of month-to-month price fluctuations; and (iv) a comparison of actual purchase and sale transactions with valuations received from third parties. These processes are designed to ensure that our investment values are accurately recorded, that the data inputs and valuation techniques utilized are appropriate and consistently applied and that the assumptions are reasonable and consistent with the objective of determining fair value. The following are descriptions of our valuation methodologies for financial assets measured at fair value. U.S. Government and Agency Securities. The fair value of U.S. government and agency securities is estimated using observed market transactions, including broker-dealer quotes and actual trade activity as a basis for valuation. U.S. government and agency securities are categorized in either Level I or Level II of the fair value hierarchy. State and Municipal Obligations. The fair value of state and municipal obligations is estimated using recent transaction activity, including market observations. Valuation models are used, which incorporate bond structure, yield curve, credit spreads and other factors. These securities are generally categorized in Level II of the fair value hierarchy or in Level III when market-based transaction activity is unavailable. Corporate Bonds and Notes. The fair value of corporate bonds and notes is estimated using recent transaction activity, including market observations. Spread models are used that incorporate issuer and structure characteristics, such as credit risk and early redemption features, where applicable. These securities are generally categorized in Level II of the fair value hierarchy or in Level III when market-based transaction activity is unavailable. Asset-backed and Mortgage-backed Securities. The fair value of these instruments, which include RMBS, CMBS, CLO, Other ABS and mortgage insurance-linked notes, is estimated based on prices of comparable securities and spreads and observable prepayment speeds. These securities are generally categorized in Level II of the fair value hierarchy or in Level III when market-based transaction activity is unavailable. The fair value of any Level III securities is generally estimated by discounting estimated future cash flows. Foreign Government and Agency Securities. The fair value of foreign government and agency securities is estimated using observed market yields used to create a maturity curve and observed credit spreads from market makers and broker-dealers. These securities are categorized in Level II of the fair value hierarchy. Equity Securities. The fair value of equity securities is generally estimated using observable market data in active markets or bid prices from market makers and broker-dealers. Generally, these securities are categorized in Level I or II of the fair value hierarchy, as observable market data are readily available. Certain equity securities may be categorized in Level III of the fair value hierarchy due to a lack of market-based transaction data or the use of model-based valuations. Residential Mortgage Loans Held for Sale. The fair value of residential mortgage loans is generally estimated using present value techniques with inputs derived from observable market data, including external market research on yields and prepayment speeds for comparable residential mortgage loan pools. The discounted cash flow models are adjusted for certain loan-level factors such as loan type, loan amount, note rate, LTV, and expected exit value of the loan. Credit risk does not significantly impact the valuation since these loans are typically purchased and resold shortly after origination. Based on the availability of observable market inputs, these loans are generally categorized in Level II of the fair value hierarchy. Other Investments. These securities primarily consist of commercial paper and short-term certificates of deposit, which are categorized in Level II of the fair value hierarchy. The fair value of these investments is estimated using market data for comparable instruments of similar maturity and average yield. Money Market Instruments. The fair value of money market instruments is based on daily prices, which are published and available to all potential investors and market participants. As such, these securities are categorized in Level I of the fair value hierarchy. Other Invested Assets. These assets consist of interests in private debt or equity investments. The estimated fair value of these other invested assets is primarily based on the private company’s performance, as well as the terms of the instrument and general market benchmarks. As such, these investments are categorized in Level III of the fair value hierarchy. Derivative Assets and Liabilities. These assets and liabilities include forward RMBS purchase contracts and interest rate swap futures contracts used to hedge interest rate risk associated with our residential mortgage loans held for sale. The estimated fair value of these instruments is derived using a market-based approach based on market price inputs from similar contracts and corroborated with observable market data. In addition, we enter into forward mortgage loan purchase commitments, for which we determine estimated fair value using a market-based approach based on underlying loan level information, adjusted for the probability the mortgage loan will fund. These mortgage-related derivative assets and liabilities are generally categorized in Level II of the fair value hierarchy based on the availability of observable market inputs that are most significant to the fair value estimate. Our derivative assets and liabilities also include embedded derivatives related to our XOL Program, which are categorized in Level III of the fair value hierarchy. The fair value of these derivatives reflects the present value impact of the variation in investment income on the assets held by the reinsurance trusts and the contractual reference rate used to calculate the reinsurance premiums we will pay. See Notes 7 and 8 for additional information on our mortgage-related and reinsurance-related derivatives, respectively. Securitized Residential Mortgage Loans Held for Investment and Securitized Nonrecourse Debt. As described in Note 2, we estimate the fair values of our consolidated VIE assets and liabilities using the more observable of the fair value of the financial assets and the fair value of the financial liabilities. For the VIE liabilities, which primarily represent investment grade asset-backed securities issued by the trusts, we determine fair value with the assistance of independent third-party valuation service providers, using external market information that includes observable market yields, spreads and projected prepayment speeds on securitizations with similar collateral characteristics. The fair value estimates of the securitized residential mortgage loans are then derived using the fair value of the VIE liabilities. As such, we classify both the securitized residential mortgage loans held by the VIEs and the nonrecourse debt issued by the VIEs as Level II in the fair value hierarchy. Other Fair Value Disclosure The carrying value and estimated fair value of other selected assets and liabilities not carried at fair value on our consolidated balance sheets were as follows as of the dates indicated.
Financial instruments not carried at fair value |
|  | December 31, 2024 |  |  | December 31, 2023 |
(In thousands) |  | Carrying Amount |  |  | Estimated Fair Value |  |  | Carrying Amount |  |  | Estimated Fair Value |
Company-owned life insurance |  | $ | 110,968 |  |  | $ | 110,968 |  |  | $ | 106,417 |  |  | $ | 106,417 |
Senior notes |  |  | 1,065,337 |  |  |  | 1,088,306 |  |  |  | 1,417,781 |  |  |  | 1,406,118 |
Secured borrowings |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loan financing facilities |  | $ | 492,429 |  |  | $ | 492,429 |  |  | $ | 24,199 |  |  | $ | 24,199 |
FHLB advances |  |  | 45,865 |  |  |  | 45,888 |  |  |  | 95,277 |  |  |  | 95,348 |
Total secured borrowings |  | $ | 538,294 |  |  | $ | 538,317 |  |  | $ | 119,476 |  |  | $ | 119,547 |
The fair value of our company-owned life insurance is estimated based on the cash surrender value less applicable surrender charges. These assets are categorized in Level II of the fair value hierarchy. See Note 9 for further information on our company-owned life insurance. The fair value of our senior notes is estimated based on quoted market prices. The fair value of our secured borrowings is estimated based on current market rates and contractual cash flows, including for FHLB advances any fees that may be required to be paid to the FHLB. The carrying amount of borrowings under our mortgage loan financing facilities approximates fair value due to the floating rate nature of that debt. These liabilities are all categorized in Level II of the fair value hierarchy. See Note 12 for further information about our senior notes and secured borrowings.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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