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Fair Value Measurements | 6 Months Ended
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Jun. 30, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements The Company classifies its Investments in Fixed Maturities as available-for-sale and reports these investments at fair value. The Company reports equity investments with readily determinable fair values as Equity Securities at Fair Value. Certain investments that are measured at fair value using the net asset value (“NAV”) practical expedient are not required to be classified using the fair value hierarchy, but are presented in the following two tables to permit reconciliation of the fair value hierarchy to the amounts presented in the Condensed Consolidated Balance Sheets. The valuation of assets and liabilities measured at fair value in Company’s Condensed Consolidated Balance Sheets at June 30, 2025 is summarized below. The Company had no material liabilities that are measured and reported at fair values.
|  | Fair Value Measurements |  |
(Dollars in Millions) |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Measured at Net Asset Value |  | Total Fair Value
Assets: |  |  |  |  |  |  |  |  |  |
Fixed Maturities: |  |  |  |  |  |  |  |  |  |
U.S. Government and Government Agencies and Authorities |  | $ | 102.9 |  |  | $ | 490.1 |  |  | $ | — |  |  | $ | — |  |  | $ | 593.0 |
States and Political Subdivisions |  | — |  |  | 1,219.7 |  |  | 0.2 |  |  | — |  |  | 1,219.9 |
Foreign Governments |  | — |  |  | 6.7 |  |  | — |  |  | — |  |  | 6.7 |
Corporate Securities: |  |  |  |  |  |  |  |  |  |
Bonds and Notes |  | — |  |  | 3,338.0 |  |  | 261.6 |  |  | — |  |  | 3,599.6 |
Redeemable Preferred Stock |  | — |  |  | 5.8 |  |  | 4.3 |  |  | — |  |  | 10.1 |
Collateralized Loan Obligations |  | — |  |  | 815.5 |  |  | 52.8 |  |  | — |  |  | 868.3 |
Other Mortgage and Asset-backed |  | — |  |  | 349.0 |  |  | 22.5 |  |  | — |  |  | 371.5 |
Total Investments in Fixed Maturities |  | 102.9 |  |  | 6,224.8 |  |  | 341.4 |  |  | — |  |  | 6,669.1 |
Equity Securities at Fair Value: |  |  |  |  |  |  |  |  |  |
Preferred Stocks: |  |  |  |  |  |  |  |  |  |
Finance, Insurance and Real Estate |  | — |  |  | 13.1 |  |  | 2.6 |  |  | — |  |  | 15.7 |
Other Industries |  | — |  |  | 7.0 |  |  | 0.5 |  |  | — |  |  | 7.5 |
Common Stocks: |  |  |  |  |  |  |  |  |  |
Finance, Insurance and Real Estate |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other Industries |  | 50.6 |  |  | — |  |  | 1.7 |  |  | — |  |  | 52.3 |
Other Equity Interests: |  |  |  |  |  |  |  |  |  |
Exchange Traded Funds |  | 10.2 |  |  | — |  |  | — |  |  | — |  |  | 10.2 |
Limited Liability Companies and Limited Partnerships |  | — |  |  | — |  |  | — |  |  | 198.4 |  |  | 198.4 |
Total Investments in Equity Securities at Fair Value |  | 60.8 |  |  | 20.1 |  |  | 4.8 |  |  | 198.4 |  |  | 284.1 |
Other Investments: |  |  |  |  |  |  |  |  |  |
Derivative Instrument Classified as Cash Flow Hedge |  | — |  |  | 3.0 |  |  | — |  |  | — |  |  | 3.0 |
Total Assets |  | $ | 163.7 |  |  | $ | 6,247.9 |  |  | $ | 346.2 |  |  | $ | 198.4 |  |  | $ | 6,956.2 |
Note 8 - Fair Value Measurements (Continued) The valuation of assets and liabilities measured at fair value in the Company’s Consolidated Balance Sheets at December 31, 2024 is summarized below.
|  | Fair Value Measurements |  |
(Dollars in Millions) |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Measured at Net Asset Value |  | Total Fair Value
Assets: |  |  |  |  |  |  |  |  |  |
Fixed Maturities: |  |  |  |  |  |  |  |  |  |
U.S. Government and Government Agencies and Authorities |  | $ | 86.8 |  |  | $ | 400.0 |  |  | $ | — |  |  | $ | — |  |  | $ | 486.8 |
States and Political Subdivisions |  | — |  |  | 1,231.4 |  |  | 1.8 |  |  | — |  |  | 1,233.2 |
Foreign Governments |  | — |  |  | 6.6 |  |  | — |  |  | — |  |  | 6.6 |
Corporate Securities: |  |  |  |  |  |  |  |  |  |
Bonds and Notes |  | — |  |  | 3,325.4 |  |  | 194.2 |  |  | — |  |  | 3,519.6 |
Redeemable Preferred Stocks |  | — |  |  | 4.7 |  |  | 4.2 |  |  | — |  |  | 8.9 |
Collateralized Loan Obligations |  | — |  |  | 741.5 |  |  | — |  |  | — |  |  | 741.5 |
Other Mortgage and Asset-backed |  | — |  |  | 408.0 |  |  | 5.0 |  |  | — |  |  | 413.0 |
Total Investments in Fixed Maturities |  | 86.8 |  |  | 6,117.6 |  |  | 205.2 |  |  | — |  |  | 6,409.6 |
Equity Securities at Fair Value: |  |  |  |  |  |  |  |  |  |
Preferred Stocks: |  |  |  |  |  |  |  |  |  |
Finance, Insurance and Real Estate |  | — |  |  | 13.1 |  |  | — |  |  | — |  |  | 13.1 |
Other Industries |  | — |  |  | 6.7 |  |  | 2.8 |  |  | — |  |  | 9.5 |
Common Stocks: |  |  |  |  |  |  |  |  |  |
Finance, Insurance and Real Estate |  | 0.3 |  |  | — |  |  | — |  |  | — |  |  | 0.3 |
Other Industries |  | 0.1 |  |  | — |  |  | 1.0 |  |  | — |  |  | 1.1 |
Other Equity Interests: |  |  |  |  |  |  |  |  |  |
Exchange Traded Funds |  | 10.9 |  |  | — |  |  | — |  |  | — |  |  | 10.9 |
Limited Liability Companies and Limited Partnerships |  | — |  |  | — |  |  | — |  |  | 183.6 |  |  | 183.6 |
Total Investments in Equity Securities at Fair Value |  | 11.3 |  |  | 19.8 |  |  | 3.8 |  |  | 183.6 |  |  | 218.5 |
Total Assets |  | $ | 98.1 |  |  | $ | 6,137.4 |  |  | $ | 209.0 |  |  | $ | 183.6 |  |  | $ | 6,628.1 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Accrued Expenses and Other Liabilities: |  |  |  |  |  |  |  |  |  |
Derivative Instruments Designated as Cash Flow Hedges |  | $ | — |  |  | $ | (3.7) |  |  | $ | — |  |  | $ | — |  |  | $ | (3.7) |
Total Liabilities |  | $ | — |  |  | $ | (3.7) |  |  | $ | — |  |  | $ | — |  |  | $ | (3.7) |
The Company’s investments in Fixed Maturities that are classified as Level 1 primarily consist of U.S. Treasury Bonds and Notes. The Company’s investments in Equity Securities at Fair Value that are classified as Level 1 consist of either investments in mutual funds or exchange traded funds. The Company’s investments in Fixed Maturities that are classified as Level 2 primarily consist of investments in corporate bonds, obligations of states and political subdivisions, collateralized loan obligations, and mortgage-backed securities of U.S. government agencies. The Company’s investments in Equity Securities at Fair Value that are classified as Level 2 primarily consist of investments in preferred stocks. The Company’s Note 8 - Fair Value Measurements (Continued) Derivative Instruments Designated as Cash Flow Hedges that are classified as Level 2 primarily consist of hedges to manage exposure to upcoming changes in the benchmark (Treasury) interest rate of forecasted transactions. The Company uses a leading, nationally recognized provider of market data and analytics to price the vast majority of the Company’s Level 2 measurements. The provider utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information. Because many fixed maturity securities do not trade on a daily basis, the provider’s evaluated pricing applications apply available information through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing to prepare evaluations. In addition, the provider uses model processes to develop prepayment and interest rate scenarios. The pricing provider’s models and processes also take into account market convention. For each asset class, teams of its evaluators gather information from market sources and integrate relevant credit information, perceived market movements and sector news into the evaluated pricing applications and models. The Company generally validates the measurements obtained from its primary pricing provider by comparing them with measurements obtained from one additional pricing provider that provides either prices from recent market transactions, quotes in inactive markets or evaluations based on its own proprietary models. The Company investigates significant differences related to the values provided. On completion of its investigation, management exercises judgment to determine the price selected and whether adjustments, if any, to the price obtained from the Company’s primary pricing provider would warrant classification of the price as Level 3. In instances where a measurement cannot be obtained from either pricing provider, the Company generally will evaluate bid prices from one or more binding quotes obtained from market makers to value investments in inactive markets and classified by the Company as Level 2. The Company generally classifies securities when it receives non-binding quotes or indications as Level 3 securities unless the Company can validate the quote or indication against recent transactions in the market. The table below presents quantitative information about the significant unobservable inputs utilized by the Company in determining fair values for fixed maturity investments classified as Level 3 at June 30, 2025. Valuations for assets presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to the Company. The weighted average yield is calculated based on fair value.
(Dollars in Millions) |  | Unobservable Input |  | Total Fair Value |  | Range of Unobservable Inputs |  | Weighted-average Yield
Investment-grade |  | Market Yield |  | $ | 82.7 |  |  | 1.6 | % | - | 11.1 | % |  | 7.6 | %
Non-investment-grade: |  |  |  |  |  |  |  |  |  |
Senior Debt |  | Market Yield |  | 93.1 |  |  | 7.0 |  | - | 26.6 |  |  | 10.5 |
Junior Debt |  | Market Yield |  | 30.8 |  |  | 8.8 |  | - | 27.0 |  |  | 11.9 |
Other |  | Various |  | 134.8 |  |  |  |  |  |  |
Total Level 3 Fixed Maturity Investments |  |  |  | $ | 341.4 |  |  |  |  |  |  |
Note 8 - Fair Value Measurements (Continued) The table below presents quantitative information about the significant unobservable inputs utilized by the Company in determining fair values for fixed maturity investments classified as Level 3 at December 31, 2024. Valuations for assets presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to the Company. The weighted average yield is calculated based on fair value.
(Dollars in Millions) |  | Unobservable Input |  | Total Fair Value |  | Range of Unobservable Inputs |  | Weighted-average Yield
Investment-grade |  | Market Yield |  | $ | 59.9 |  |  | 3.4 | % | - | 11.6 | % |  | 7.9 | %
Non-investment-grade: |  |  |  |  |  |  |  |  |  |
Senior Debt |  | Market Yield |  | 42.7 |  |  | 7.0 |  | - | 24.1 |  |  | 10.0 |
Junior Debt |  | Market Yield |  | 35.7 |  |  | 9.5 |  | - | 31.0 |  |  | 13.2 |
Other |  | Various |  | 66.9 |  |  |  |  |  |  |
Total Level 3 Fixed Maturity Investments |  |  |  | $ | 205.2 |  |  |  |  |  |  |
For an investment in a fixed maturity security, an increase in the yield used to determine the fair value of the security will decrease the fair value of the security. A decrease in the yield used to determine fair value will increase the fair value of the security, but for callable securities the fair value increase is generally limited to par, unless security is currently callable at a premium. Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the three months ended June 30, 2025 is presented below.
|  | Fixed Maturities |  | Equity Securities |  |  |  |
(Dollars in Millions) |  | Corporate Bonds and Notes |  | States and Political Sub- divisions |  | Redeemable Preferred Stocks |  | Collateralized Loan Obligations |  | Other Mortgage- and Asset- backed |  | Preferred and Common Stocks |  |  |  |  |  | Total
Balance, Beginning of Period |  | $ | 275.8 |  |  | $ | 1.7 |  |  | $ | 4.3 |  |  | $ | 67.0 |  |  | $ | 22.5 |  |  | $ | 4.8 |  |  |  |  |  |  | $ | 376.1 |
Total Gains (Losses): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Included in Condensed Consolidated Statements of Income |  | 0.3 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1.9 |  |  |  |  |  |  | 2.2 |
Included in Other Comprehensive Income |  | 0.9 |  |  | — |  |  | — |  |  | — |  |  | (0.1) |  |  | (0.7) |  |  |  |  |  |  | 0.1 |
Purchases |  | 33.9 |  |  | — |  |  | — |  |  | 52.8 |  |  | 0.2 |  |  | 0.5 |  |  |  |  |  |  | 87.4 |
Sales |  | (49.2) |  |  | — |  |  | — |  |  | (10.0) |  |  | (0.1) |  |  | (1.7) |  |  |  |  |  |  | (61.0) |
Transfers into Level 3 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | — |
Transfers out of Level 3 |  | (0.1) |  |  | (1.5) |  |  | — |  |  | (57.0) |  |  | — |  |  | — |  |  |  |  |  |  | (58.6) |
Balance, End of Period |  | $ | 261.6 |  |  | $ | 0.2 |  |  | $ | 4.3 |  |  | $ | 52.8 |  |  | $ | 22.5 |  |  | $ | 4.8 |  |  |  |  |  |  | $ | 346.2 |
The transfers into and out of Level 3 were due to changes in the availability of market observable inputs. Note 8 - Fair Value Measurements (Continued) Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the three months ended June 30, 2024 is presented below.
|  | Fixed Maturities |  | Equity Securities |  |  |  |  |  |
(Dollars in Millions) |  | Corporate Bonds and Notes |  | States and Political Sub- divisions |  | Redeemable Preferred Stocks |  | Collateralized Loan Obligations |  | Other Mortgage- and Asset- backed |  | Preferred and Common Stocks |  |  |  |  |  | Total
Balance, Beginning of Period |  | $ | 180.5 |  |  | $ | 1.4 |  |  | $ | 2.2 |  |  | $ | — |  |  | $ | 5.1 |  |  | $ | 2.7 |  |  |  |  |  |  | $ | 191.9 |
Total Gains (Losses): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Included in Condensed Consolidated Statements of Income |  | 0.1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1.9 |  |  |  |  |  |  | 2.0 |
Included in Other Comprehensive Income |  | (1.7) |  |  | — |  |  | — |  |  | — |  |  | (0.1) |  |  | — |  |  |  |  |  |  | (1.8) |
Purchases |  | 59.4 |  |  | — |  |  | 1.9 |  |  | 6.8 |  |  | — |  |  | 0.5 |  |  |  |  |  |  | 68.6 |
Sales |  | (12.6) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1.7) |  |  |  |  |  |  | (14.3) |
Transfers into Level 3 |  | 3.1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | 3.1 |
Transfers out of Level 3 |  | (1.5) |  |  | (1.3) |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | (2.8) |
Balance, End of Period |  | $ | 227.3 |  |  | $ | 0.1 |  |  | $ | 4.1 |  |  | $ | 6.8 |  |  | $ | 5.0 |  |  | $ | 3.4 |  |  |  |  |  |  | $ | 246.7 |
The transfers into and out of Level 3 were due to changes in the availability of market observable inputs. Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the six months ended June 30, 2025 is presented below.
|  | Fixed Maturities |  | Equity Securities |  |  |  |
(Dollars in Millions) |  | Corporate Bonds and Notes |  | States and Political Sub- divisions |  | Redeemable Preferred Stocks |  | Collateralized Loan Obligations |  | Other Mortgage- and Asset- backed |  | Preferred and Common Stocks |  |  |  |  |  | Total
Balance, Beginning of Year |  | $ | 194.2 |  |  | $ | 1.8 |  |  | $ | 4.2 |  |  | $ | — |  |  | $ | 5.0 |  |  | $ | 3.8 |  |  |  |  |  |  | $ | 209.0 |
Total Gains (Losses): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Included in Condensed Consolidated Statements of Income |  | 1.5 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1.9 |  |  |  |  |  |  | 3.4 |
Included in Other Comprehensive Income |  | 2.7 |  |  | (0.1) |  |  | 0.1 |  |  | — |  |  | (0.1) |  |  | — |  |  |  |  |  |  | 2.6 |
Purchases |  | 128.9 |  |  | — |  |  | — |  |  | 119.8 |  |  | 7.7 |  |  | 0.8 |  |  |  |  |  |  | 257.2 |
Sales |  | (70.5) |  |  | — |  |  | — |  |  | (10.0) |  |  | (0.1) |  |  | (1.7) |  |  |  |  |  |  | (82.3) |
Transfers into Level 3 |  | 5.0 |  |  | — |  |  | — |  |  | — |  |  | 10.0 |  |  | — |  |  |  |  |  |  | 15.0 |
Transfers out of Level 3 |  | (0.2) |  |  | (1.5) |  |  | — |  |  | (57.0) |  |  | — |  |  | — |  |  |  |  |  |  | (58.7) |
Balance, End of Period |  | $ | 261.6 |  |  | $ | 0.2 |  |  | $ | 4.3 |  |  | $ | 52.8 |  |  | $ | 22.5 |  |  | $ | 4.8 |  |  |  |  |  |  | $ | 346.2 |
The transfers into and out of Level 3 were due primarily to changes in the availability of market observable inputs. Note 8 - Fair Value Measurements (Continued) Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the six months ended June 30, 2024 is presented below.
|  | Fixed Maturities |  | Equity Securities |  |  |  |  |  |
(Dollars in Millions) |  | Corporate Bonds and Notes |  | States and Political Sub- divisions |  | Redeemable Preferred Stocks |  | Collateralized Loan Obligations |  | Other Mortgage- and Asset- backed |  | Preferred and Common Stocks |  |  |  |  |  | Total
Balance, Beginning of Year |  | $ | 177.1 |  |  | $ | 0.1 |  |  | $ | 7.1 |  |  | $ | — |  |  | $ | 5.2 |  |  | $ | 2.8 |  |  |  |  |  |  | $ | 192.3 |
Total (Losses) Gains: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Included in Condensed Consolidated Statements of Income |  | (0.1) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1.8 |  |  |  |  |  |  | 1.7 |
Included in Other Comprehensive Income |  | 0.6 |  |  | (0.4) |  |  | — |  |  | — |  |  | (0.2) |  |  | — |  |  |  |  |  |  | — |
Purchases |  | 72.6 |  |  | — |  |  | 1.9 |  |  | 6.8 |  |  | — |  |  | 0.5 |  |  |  |  |  |  | 81.8 |
Sales |  | (16.3) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1.7) |  |  |  |  |  |  | (18.0) |
Transfers into Level 3 |  | 3.1 |  |  | 1.7 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | 4.8 |
Transfers out of Level 3 |  | (9.7) |  |  | (1.3) |  |  | (4.9) |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | (15.9) |
Balance, End of Period |  | $ | 227.3 |  |  | $ | 0.1 |  |  | $ | 4.1 |  |  | $ | 6.8 |  |  | $ | 5.0 |  |  | $ | 3.4 |  |  |  |  |  |  | $ | 246.7 |
The transfers into and out of Level 3 were due primarily to changes in the availability of market observable inputs. Note 8 - Fair Value Measurements (Continued) The table below shows investments reported at fair value using NAV and their unfunded commitments by asset class as of June 30, 2025 and December 31, 2024.
(Dollars in Millions) |  | June 30, 2025 |  | December 31, 2024
Asset Class |  | Fair Value Using NAV |  | Unfunded Commitments |  | Fair Value Using NAV |  | Unfunded Commitments
Reported as Equity Method Limited Liability Investments: |  |  |  |  |  |  |  |
Mezzanine Debt |  | $ | 115.3 |  |  | $ | 39.5 |  |  | $ | 116.7 |  |  | $ | 40.8 |
Real Estate |  | 24.3 |  |  | 0.1 |  |  | 27.3 |  |  | — |
Senior Debt |  | 19.1 |  |  | 47.0 |  |  | 19.1 |  |  | 48.2 |
Leveraged Buyout |  | 7.1 |  |  | 0.6 |  |  | 7.5 |  |  | 0.6 |
Secondary Transactions |  | 3.9 |  |  | 1.7 |  |  | 5.5 |  |  | 1.6 |
Distressed Debt |  | 1.4 |  |  | — |  |  | 4.4 |  |  | — |
Other |  | 5.1 |  |  | 0.1 |  |  | 5.8 |  |  | 0.1 |
Total Equity Method Limited Liability Investments |  | 176.2 |  |  | 89.0 |  |  | 186.3 |  |  | 91.3 |
Reported as Other Equity Interests at Fair Value: |  |  |  |  |  |  |  |
Mezzanine Debt |  | 115.7 |  |  | 69.3 |  |  | 116.9 |  |  | 67.0 |
Leveraged Buyout |  | 32.6 |  |  | 39.0 |  |  | 19.2 |  |  | 30.4 |
Senior Debt |  | 27.5 |  |  | 6.9 |  |  | 26.3 |  |  | 8.4 |
Distressed Debt |  | 11.0 |  |  | 15.7 |  |  | 11.7 |  |  | 15.0 |
Growth Equity |  | 9.2 |  |  | 6.8 |  |  | 7.0 |  |  | 8.0 |
Secondary Transactions |  | 2.0 |  |  | 1.6 |  |  | 2.4 |  |  | 1.6 |
Other |  | 0.4 |  |  | 0.2 |  |  | 0.1 |  |  | 0.2 |
Total Reported as Other Equity Interests at Fair Value |  | 198.4 |  |  | 139.5 |  |  | 183.6 |  |  | 130.6 |
Reported as Equity Securities at Modified Cost: |  |  |  |  |  |  |  |
Other |  | 1.8 |  |  | 1.7 |  |  | 1.8 |  |  | — |
Total Reported as Equity Securities at Modified Cost |  | 1.8 |  |  | 1.7 |  |  | 1.8 |  |  | — |
Total Investments Reported at Fair Value Using NAV |  | $ | 376.4 |  |  | $ | 230.2 |  |  | $ | 371.7 |  |  | $ | 221.9 |
The fund investments included above (excluding Hedge Funds) are not redeemable, because distributions from the funds will be received when underlying investments of the funds are liquidated. The funds are generally expected to have approximately 10 year lives at their inception, but these lives may be extended at the fund manager’s discretion, typically in one or two-year increments. The hedge fund investments included above, which are carried at fair value, are generally redeemable subject to the redemption notices period. The majority of the hedge fund investments are redeemable monthly or quarterly. Note 8 - Fair Value Measurements (Continued) The following table includes information related to the Company’s investments in certain private equity funds or hedge funds that calculate a net asset value per share:
Asset Class |  | Investment Category Includes
Mezzanine Debt |  | Funds with investments in junior or subordinated debt and potentially minority equity securities issued by private companies.
Senior Debt |  | Funds with investments in senior or first lien debt and potentially minority equity securities typically issued by private companies.
Distressed Debt |  | Funds with debt or minority equity investments that are made opportunistically in companies that are in or near default or under financial strain with potential to have an active role in restructuring the company.
Secondary Transactions |  | Funds that focus on purchasing third party fund interests from investors seeking liquidity within their own portfolio.
Hedge Fund |  | Funds that focus primarily on investing in public securities with strategy of generating uncorrelated returns to the public markets.
Leveraged Buyout |  | Funds with control equity investments in more mature, positive cash flowing, private companies that are typically purchased with the use of financial leverage.
Growth Equity |  | Funds that invest in early or venture stage companies with high growth potential with view towards generating realizations through sale or initial public offering of company.
Real Estate |  | Funds with investments in multi-family housing properties.
Other |  | Consists of direct investments of preferred equity or minority common equity investments into private companies structured as limited partnerships or limited liability companies.
Presented below are the carrying values and fair value estimates of financial instruments not carried at fair value.
|  |  |  | June 30, 2025 |  | December 31, 2024
(Dollars in Millions) | Level |  |  | Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
Financial Assets: |  |  |  |  |  |  |  |  |  |
Loans to Policyholders | Level 3 |  |  | $ | 278.6 |  |  | $ | 278.6 |  |  | $ | 280.7 |  |  | $ | 280.7 |
Short-term Investments | Level 1 or 2 |  |  | 407.6 |  |  | 407.6 |  |  | 1,037.1 |  |  | 1,037.1 |
Mortgage Loans | Level 3 |  |  | 130.2 |  |  | 130.4 |  |  | 75.3 |  |  | 75.3 |
Company-Owned Life Insurance | Level 2 |  |  | 557.1 |  |  | 557.1 |  |  | 539.2 |  |  | 539.2 |
Equity Securities at Modified Cost | Level 3 |  |  | 22.2 |  |  | 22.2 |  |  | 22.5 |  |  | 22.5 |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |
Long-term Debt | Level 2 |  |  | $ | 942.6 |  |  | $ | 860.4 |  |  | $ | 1,391.6 |  |  | $ | 1,278.4 |
Policyholder Obligations | Level 2 |  |  | 546.2 |  |  | 546.2 |  |  | 541.3 |  |  | 541.3 |
Loans to policyholders are carried at unpaid principal balance which approximates fair value and are categorized as Level 3 within the fair value hierarchy. The nature of policy loans is to have a negligible default risk as the loans are fully collateralized by the value of the policy. Policy loans do not have a stated maturity and the balances and accrued interest are repaid either by the policyholder or with proceeds from the policy. Due to the collateralized nature of policy loans and unpredictable timing of payments, the Company believes the carrying value of policy loans approximates fair value. The fair value measurement of Short-term Investments is estimated using inputs that are considered either Level 1 or Level 2 measurements. The Mortgage Loans fair value measurement is considered equal to amortized cost given the short-term nature of the investments. The fair value measurement of Equity Securities at Modified Cost is estimated using inputs that are considered Level 3 measurements. The cash surrender value of Company-Owned Life Insurance approximates fair value and is considered to be a Level 2 investment. The fair value of Long-term Debt is estimated using quoted prices for similar liabilities in markets that are not active. The inputs used in the valuation are considered Level 2 measurements. Policyholder Obligations presented in the preceding table consist of advances from the FHLB of Chicago, and the inputs used in the valuation are considered Level 2 measurements.

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- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 820 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/820/tableOfContent + Details
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