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Investments

3 Months Ended

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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The entire disclosure for investments in certain debt and equity securities.

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