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Investments | 3 Months Ended
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Mar. 31, 2025
Investments [Abstract] |
Investments | Investments (a) Information regarding our AFS securities as of March 31, 2025 and December 31, 2024, were as follows:
March 31, 2025 |  | Cost/ Amortized Cost |  | Allowance for Credit Losses |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value
($ in thousands) |  |  |  |  |
AFS fixed income securities: |  |  |  |  |  |  |  |  |  |
U.S. government and government agencies |  | $ | 151,030 |  |  | — |  |  | 44 |  |  | (16,599) |  |  | 134,475 |
Foreign government |  | 11,535 |  |  | (19) |  |  | 22 |  |  | (1,150) |  |  | 10,388 |
Obligations of states and political subdivisions |  | 462,904 |  |  | (419) |  |  | 1,109 |  |  | (30,644) |  |  | 432,950 |
Corporate securities |  | 3,312,258 |  |  | (12,616) |  |  | 38,459 |  |  | (100,880) |  |  | 3,237,221 |
Collateralized loan obligations ("CLO") and other asset-backed securities ("ABS") |  | 2,228,290 |  |  | (5,499) |  |  | 21,067 |  |  | (46,673) |  |  | 2,197,185 |
Residential mortgage-backed securities ("RMBS") |  | 1,943,238 |  |  | (11,342) |  |  | 8,404 |  |  | (88,221) |  |  | 1,852,079 |
Commercial mortgage-backed securities ("CMBS") |  | 761,771 |  |  | (280) |  |  | 2,681 |  |  | (23,295) |  |  | 740,877 |
Total AFS fixed income securities |  | $ | 8,871,026 |  |  | (30,175) |  |  | 71,786 |  |  | (307,462) |  |  | 8,605,175 |
December 31, 2024 |  | Cost/ Amortized Cost |  | Allowance for Credit Losses |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value
($ in thousands) |  |  |  |  |
AFS fixed income securities: |  |  |  |  |  |  |  |  |  |
U.S. government and government agencies |  | $ | 139,906 |  |  | — |  |  | 2 |  |  | (19,753) |  |  | 120,155 |
Foreign government |  | 10,656 |  |  | (21) |  |  | — |  |  | (1,333) |  |  | 9,302 |
Obligations of states and political subdivisions |  | 483,609 |  |  | (570) |  |  | 550 |  |  | (32,359) |  |  | 451,230 |
Corporate securities |  | 3,181,046 |  |  | (14,924) |  |  | 25,259 |  |  | (123,201) |  |  | 3,068,180 |
CLO and other ABS |  | 2,065,611 |  |  | (4,889) |  |  | 22,116 |  |  | (49,689) |  |  | 2,033,149 |
RMBS |  | 1,812,744 |  |  | (11,544) |  |  | 3,880 |  |  | (112,722) |  |  | 1,692,358 |
CMBS |  | 782,506 |  |  | — |  |  | 1,478 |  |  | (31,024) |  |  | 752,960 |
Total AFS fixed income securities |  | $ | 8,476,078 |  |  | (31,948) |  |  | 53,285 |  |  | (370,081) |  |  | 8,127,334 |
The following tables provide a roll forward of the allowance for credit losses on our AFS fixed income securities for the indicated periods:
Quarter ended March 31, 2025 |  | Beginning Balance |  | Current Provision for Securities without Prior Allowance |  | Initial Allowance for Purchased Credit Deteriorated Assets with Credit Deterioration |  | Increase (Decrease) on Securities with Prior Allowance, excluding intent (or Requirement) to Sell Securities |  | Reductions for Securities Sold |  | Reductions for Securities Identified as Intent (or Requirement) to Sell during the Period |  | Ending Balance
($ in thousands) |  |  |  |  |  |  |
Foreign government |  | $ | 21 |  |  | — |  |  | — |  |  | (2) |  |  | — |  |  | — |  |  | 19 |
Obligations of states and political subdivisions |  | 570 |  |  | 6 |  |  | — |  |  | (71) |  |  | (86) |  |  | — |  |  | 419 |
Corporate securities |  | 14,924 |  |  | 1,109 |  |  | — |  |  | (2,643) |  |  | (774) |  |  | — |  |  | 12,616 |
CLO and other ABS |  | 4,889 |  |  | 677 |  |  | — |  |  | 62 |  |  | (129) |  |  | — |  |  | 5,499 |
RMBS |  | 11,544 |  |  | — |  |  | — |  |  | (47) |  |  | (155) |  |  | — |  |  | 11,342 |
CMBS |  | — |  |  | 279 |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | 280 |
Total AFS fixed income securities |  | $ | 31,948 |  |  | 2,071 |  |  | — |  |  | (2,700) |  |  | (1,144) |  |  | — |  |  | 30,175 |
Quarter ended March 31, 2024 |  | Beginning Balance |  | Current Provision for Securities without Prior Allowance |  | Initial Allowance for Purchased Credit Deteriorated Assets with Credit Deterioration |  | Increase (Decrease) on Securities with Prior Allowance, excluding intent (or Requirement) to Sell Securities |  | Reductions for Securities Sold |  | Reductions for Securities Identified as Intent (or Requirement) to Sell during the Period |  | Ending Balance
($ in thousands) |  |  |  |  |  |  |
Foreign government |  | $ | 35 |  |  | — |  |  | — |  |  | — |  |  | (6) |  |  | — |  |  | 29 |
Obligations of states and political subdivisions |  | 669 |  |  | 9 |  |  | — |  |  | 25 |  |  | (8) |  |  | — |  |  | 695 |
Corporate securities |  | 12,999 |  |  | 1,015 |  |  | — |  |  | 1,792 |  |  | (355) |  |  | (9) |  |  | 15,442 |
CLO and other ABS |  | 2,854 |  |  | 90 |  |  | — |  |  | (314) |  |  | (3) |  |  | — |  |  | 2,627 |
RMBS |  | 11,649 |  |  | — |  |  | — |  |  | 31 |  |  | (100) |  |  | — |  |  | 11,580 |
CMBS |  | 6 |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8 |
Total AFS fixed income securities |  | $ | 28,212 |  |  | 1,116 |  |  | — |  |  | 1,534 |  |  | (472) |  |  | (9) |  |  | 30,381 |
During First Quarter 2025 and First Quarter 2024, we had no write-offs or recoveries of our AFS fixed income securities. For information on our methodology and significant inputs used to measure expected credit losses, our accounting policy for recognizing write-offs of uncollectible amounts, and our treatment of accrued interest, refer to Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2024 Annual Report. Accrued interest on AFS securities was $74.6 million as of March 31, 2025, and $74.3 million as of December 31, 2024. We did not record any material write-offs of accrued interest in First Quarter 2025 and First Quarter 2024. (b) Quantitative information about unrealized losses on our AFS portfolio follows:
March 31, 2025 |  | Less than 12 months |  | 12 months or longer |  | Total
($ in thousands) |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
AFS fixed income securities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and government agencies |  | $ | 11,277 |  |  | (41) |  |  | 108,507 |  |  | (16,558) |  |  | 119,784 |  |  | (16,599) |
Foreign government |  | — |  |  | — |  |  | 9,471 |  |  | (1,150) |  |  | 9,471 |  |  | (1,150) |
Obligations of states and political subdivisions |  | 122,534 |  |  | (2,103) |  |  | 236,649 |  |  | (28,541) |  |  | 359,183 |  |  | (30,644) |
Corporate securities |  | 441,777 |  |  | (5,535) |  |  | 1,021,950 |  |  | (95,345) |  |  | 1,463,727 |  |  | (100,880) |
CLO and other ABS |  | 507,154 |  |  | (7,615) |  |  | 555,377 |  |  | (39,058) |  |  | 1,062,531 |  |  | (46,673) |
RMBS |  | 589,388 |  |  | (10,728) |  |  | 668,360 |  |  | (77,493) |  |  | 1,257,748 |  |  | (88,221) |
CMBS |  | 110,041 |  |  | (1,036) |  |  | 387,080 |  |  | (22,259) |  |  | 497,121 |  |  | (23,295) |
Total AFS fixed income securities |  | $ | 1,782,171 |  |  | (27,058) |  |  | 2,987,394 |  |  | (280,404) |  |  | 4,769,565 |  |  | (307,462) |
December 31, 2024 |  | Less than 12 months |  | 12 months or longer |  | Total
($ in thousands) |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
AFS fixed income securities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and government agencies |  | $ | 14,708 |  |  | (70) |  |  | 105,326 |  |  | (19,683) |  |  | 120,034 |  |  | (19,753) |
Foreign government |  | — |  |  | — |  |  | 9,302 |  |  | (1,333) |  |  | 9,302 |  |  | (1,333) |
Obligations of states and political subdivisions |  | 153,996 |  |  | (3,539) |  |  | 247,735 |  |  | (28,820) |  |  | 401,731 |  |  | (32,359) |
Corporate securities |  | 684,999 |  |  | (11,699) |  |  | 1,083,392 |  |  | (111,502) |  |  | 1,768,391 |  |  | (123,201) |
CLO and other ABS |  | 349,786 |  |  | (6,296) |  |  | 601,057 |  |  | (43,393) |  |  | 950,843 |  |  | (49,689) |
RMBS |  | 714,061 |  |  | (21,206) |  |  | 677,574 |  |  | (91,516) |  |  | 1,391,635 |  |  | (112,722) |
CMBS |  | 184,394 |  |  | (2,870) |  |  | 417,472 |  |  | (28,154) |  |  | 601,866 |  |  | (31,024) |
Total AFS fixed income securities |  | $ | 2,101,944 |  |  | (45,680) |  |  | 3,141,858 |  |  | (324,401) |  |  | 5,243,802 |  |  | (370,081) |
We currently do not intend to sell any of the securities summarized in the tables above, nor do we believe we will be required to sell any of them. Considering these factors and our review of these securities under our credit loss policy as described in Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2024 Annual Report, we have concluded that no additional allowance for credit loss is required on these balances beyond the allowance for credit loss recorded as of March 31, 2025. This conclusion reflects our current judgment about the financial position and future prospects of the entities that issued the investment security and underlying collateral. (c) AFS and held-to-maturity ("HTM") fixed income securities at March 31, 2025, by contractual maturity are shown below. The maturities of RMBS, CMBS, CLO and other ABS securities were calculated using each security's expected maturities. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | AFS |  | HTM
($ in thousands) |  | Fair Value |  | Carrying Value |  | Fair Value
Due in one year or less |  | $ | 580,543 |  |  | 661 |  |  | 660 |
Due after one year through five years |  | 3,561,447 |  |  | 16,193 |  |  | 15,758 |
Due after five years through 10 years |  | 3,398,781 |  |  | 8,456 |  |  | 8,382 |
Due after 10 years |  | 1,064,404 |  |  | — |  |  | — |
Total fixed income securities |  | $ | 8,605,175 |  |  | 25,310 |  |  | 24,800 |
(d) The following table summarizes our alternative investment portfolio by strategy:
|  | March 31, 2025 |  | December 31, 2024
($ in thousands) |  | Carrying Value |  | Remaining Commitment |  | Maximum Exposure to Loss |  | Carrying Value |  | Remaining Commitment |  | Maximum Exposure to Loss
Alternative Investments |  |  |  |  |  |  |  |  |  |  |  |
Private equity |  | $ | 322,644 |  |  | 180,116 |  |  | 502,760 |  |  | 346,020 |  |  | 182,355 |  |  | 528,375 |
Private credit |  | 46,294 |  |  | 111,299 |  |  | 157,593 |  |  | 52,100 |  |  | 99,185 |  |  | 151,285 |
Real assets |  | 42,173 |  |  | 38,480 |  |  | 80,653 |  |  | 42,776 |  |  | 38,950 |  |  | 81,726 |
Total alternative investments |  | $ | 411,111 |  |  | 329,895 |  |  | 741,006 |  |  | 440,896 |  |  | 320,490 |  |  | 761,386 |
We are contractually committed to make additional investments up to the remaining commitments stated above. We did not provide any non-contractual financial support during 2025 or 2024. The following table shows gross summarized financial information for our alternative investments portfolio, including the portion we do not own. As the majority of these investments report results to us on a one-quarter lag, the summarized financial statement information is for the three-month period ended December 31:
Income Statement Information |  | Quarter ended March 31, |  |
($ in millions) |  | 2025 |  | 2024 |  |  |  |
Net investment income (loss) |  | $ | 400.7 |  |  | (346.0) |  |  |  |  |
Realized gains |  | 612.0 |  |  | 1,830.8 |  |  |  |  |
Net change in unrealized appreciation (depreciation) |  | 1,879.4 |  |  | 3,819.0 |  |  |  |  |
Net income |  | $ | 2,892.1 |  |  | 5,303.8 |  |  |  |  |
Alternative investment income included in "Net investment income earned" on our Consolidated Statements of Income |  | $ | 7.1 |  |  | 6.9 |  |  |  |  |
(e) We have pledged certain AFS fixed income securities as collateral related to our borrowing relationships with the Federal Home Loan Bank of Indianapolis ("FHLBI") and the Federal Home Loan Bank of New York ("FHLBNY"). In addition, we had certain securities on deposit with various state and regulatory agencies at March 31, 2025, to comply with insurance laws. We retain all rights regarding all securities pledged as collateral. The following table summarizes the market value of these securities at March 31, 2025:
($ in millions) |  | FHLBI Collateral |  | FHLBNY Collateral |  |  |  | State and Regulatory Deposits |  | Total
U.S. government and government agencies |  | $ | — |  |  | — |  |  |  |  | 23.1 |  |  | 23.1 |
Obligations of states and political subdivisions |  | — |  |  | — |  |  |  |  | 1.8 |  |  | 1.8 |
RMBS |  | 64.2 |  |  | 21.5 |  |  |  |  | — |  |  | 85.7 |
CMBS |  | 0.5 |  |  | 7.7 |  |  |  |  | — |  |  | 8.2 |
Total pledged as collateral |  | $ | 64.7 |  |  | 29.2 |  |  |  |  | 24.9 |  |  | 118.8 |
(f) We did not have exposure to any credit concentration risk of a single issuer greater than 10% of our stockholders' equity, other than to certain U.S. government agencies, as of March 31, 2025, or December 31, 2024. (g) The components of pre-tax net investment income earned were as follows:
|  | Quarter ended March 31, |  |
($ in thousands) |  | 2025 |  | 2024 |  |  |  |
Fixed income securities |  | $ | 105,082 |  |  | 94,102 |  |  |  |  |
Commercial mortgage loans ("CMLs") |  | 3,615 |  |  | 2,794 |  |  |  |  |
Equity securities |  | 3,567 |  |  | 4,908 |  |  |  |  |
Short-term investments |  | 6,233 |  |  | 3,519 |  |  |  |  |
Alternative investments |  | 7,079 |  |  | 6,881 |  |  |  |  |
Other investments |  | 231 |  |  | 263 |  |  |  |  |
Investment expenses |  | (5,116) |  |  | (4,618) |  |  |  |  |
Net investment income earned |  | $ | 120,691 |  |  | 107,849 |  |  |  |  |
The increase in net investment income earned in First Quarter 2025 compared to First Quarter 2024 was primarily driven by active portfolio management, operating cash flow deployment, and net proceeds from the issuance of our 5.90% Senior Notes in First Quarter 2025. For additional information regarding our 5.90% Senior Notes issuance, see Note 12. "Indebtedness" in Item 1. "Financial Statements" of this Form 10-Q. (h) The following table summarizes net realized and unrealized investment gains and losses for the periods indicated:
|  | Quarter ended March 31, |  |
($ in thousands) |  | 2025 |  | 2024 |  |  |  |
Gross gains on sales |  | $ | 1,727 |  |  | 2,135 |  |  |  |  |
Gross losses on sales |  | (2,383) |  |  | (1,965) |  |  |  |  |
Net realized gains (losses) on disposals |  | (656) |  |  | 170 |  |  |  |  |
Net unrealized gains (losses) on equity securities |  | 1,050 |  |  | 692 |  |  |  |  |
Net credit loss benefit (expense) on fixed income securities, AFS |  | 629 |  |  | (2,650) |  |  |  |  |
Net credit loss benefit (expense) on CMLs |  | (35) |  |  | 168 |  |  |  |  |
Losses on securities for which we have the intent to sell |  | (759) |  |  | (15) |  |  |  |  |
Net realized and unrealized investment gains (losses) |  | $ | 229 |  |  | (1,635) |  |  |  |  |
Net unrealized gains and losses recognized in income on equity securities, as reflected in the table above, included the following:
|  | Quarter ended March 31, |  |
($ in thousands) |  | 2025 |  | 2024 |  |  |  |
Unrealized gains (losses) recognized in income on equity securities: |  |  |  |  |  |  |  |
On securities remaining in our portfolio at end of period |  | $ | 555 |  |  | 692 |  |  |  |  |
On securities sold in period |  | 495 |  |  | — |  |  |  |  |
Total unrealized gains (losses) recognized in income on equity securities |  | $ | 1,050 |  |  | 692 |  |  |  |  |

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