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Note 2 - Investments

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

2. Investments

The Company’s available‑for‑sale investments are summarized as follows:

						*Gross*				*Gross*				*Allowance*
		*Amortized*				*Unrealized*				*Unrealized*				*for*				*Fair*
March 31, 2024		*Cost or Cost*				*Gains*				*Losses*				*Credit Losses*				*Value*
		(in thousands)
Fixed maturities:
U.S. Governments		$	39,729			$	—			$	(1,387	)		$	—			$	38,342
U.S. States, Territories, and Political Subdivisions			10,632				71				(819	)			—				9,884
Special revenue excluding mortgage/asset-backed securities			32,424				96				(3,415	)			—				29,105
Corporate and other			337,679				1,260				(18,280	)			(904	)			319,755
Mortgage/asset-backed securities			277,041				1,570				(12,705	)			—				265,906
Total available-for-sale investments		$	697,505			$	2,997			$	(36,606	)		$	(904	)		$	662,992

						*Gross*				*Gross*				*Allowance*
		*Amortized*				*Unrealized*				*Unrealized*				*for*				*Fair*
December 31, 2023		*Cost or Cost*				*Gains*				*Losses*				*Credit Losses*				*Value*
		(in thousands)
Fixed maturities:
U.S. Governments		$	40,836			$	—			$	(1,416	)		$	—			$	39,420
U.S. States, Territories, and Political Subdivisions			10,641				100				(839	)			—				9,902
Special revenue excluding mortgage/asset-backed securities			32,513				147				(3,149	)			—				29,511
Corporate and other			316,590				1,750				(17,197	)			(904	)			300,239
Mortgage/asset-backed securities			274,550				1,879				(11,702	)			—				264,727
Total available-for-sale investments		$	675,130			$	3,876			$	(34,303	)		$	(904	)		$	643,799

Security holdings in an unrealized loss position

As of March 31, 2024, the Company held 528 fixed maturity securities in an unrealized loss position with a total estimated fair value of $478.7 million and total gross unrealized losses of $36.6 million. As of December 31, 2023, the Company held 483 fixed maturity securities in an unrealized loss position with a total estimated fair value of $451.0 million and total gross unrealized losses of $34.3 million.

The aggregate fair value and gross unrealized losses of the Company’s investments aggregated by investment category and the length of time these individual securities have been in a continuous unrealized loss position as of March 31, 2024 and December 31, 2023, are as follows:

		*Less Than 12 Months*								*More Than 12 Months*								*Total*
		*Fair*				*Unrealized*				*Fair*				*Unrealized*				*Fair*				*Unrealized*
March 31, 2024		*Value*				*Losses*				*Value*				*Losses*				*Value*				*Losses*
		(in thousands)
Fixed maturity securities:
U.S. Governments		$	17,385			$	(385	)		$	20,957			$	(1,002	)		$	38,342			$	(1,387	)
U.S. States, Territories, and Political Subdivisions			512				(5	)			6,217				(814	)			6,729				(819	)
Special revenue excluding mortgage/asset-backed securities			—				—				26,380				(3,415	)			26,380				(3,415	)
Corporate and other			41,802				(402	)			212,756				(17,878	)			254,558				(18,280	)
Mortgage/asset-backed securities			44,727				(859	)			107,914				(11,846	)			152,641				(12,705	)
Total available-for-sale investments		$	104,426			$	(1,651	)		$	374,224			$	(34,955	)		$	478,650			$	(36,606	)

		*Less Than 12 Months*								*More Than 12 Months*								*Total*
		*Fair*				*Unrealized*				*Fair*				*Unrealized*				*Fair*				*Unrealized*
December 31, 2023		*Value*				*Losses*				*Value*				*Losses*				*Value*				*Losses*
		(in thousands)
Fixed maturity securities:
U.S. Governments		$	738			$	(1	)		$	38,063			$	(1,415	)		$	38,801			$	(1,416	)
U.S. States, Territories, and Political Subdivisions			—				—				6,196				(839	)			6,196				(839	)
Special revenue excluding mortgage/asset-backed securities			—				—				26,736				(3,149	)			26,736				(3,149	)
Corporate and other			28,872				(480	)			204,034				(16,717	)			232,906				(17,197	)
Mortgage/asset-backed securities			29,334				(245	)			117,016				(11,457	)			146,350				(11,702	)
Total available-for-sale investments		$	58,944			$	(726	)		$	392,045			$	(33,577	)		$	450,989			$	(34,303	)

The Company reviews all securities with unrealized losses on a quarterly basis to assess whether the decline in the securities fair value necessitates the recognition of an allowance for credit losses. The Company considers numerous factors in its review as described in Footnote 1 of the Notes to the Consolidated Financial Statements in the 2023 Annual Report on Form 10-K.

The Company has recorded an immaterial allowance for credit losses for two investment securities. Based on the Company’s review as of March 31, 2024, for the remainder of securities, the Company determined that the fixed maturity securities’ unrealized losses were primarily the result of the interest rate environment and not the credit quality of the issuers. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before the recovery of their amortized cost basis.

Contractual maturities of available‑for‑sale fixed maturity securities

The amortized cost and fair value of fixed maturity securities at March 31, 2024, by contractual maturity, are shown below.

		*Amortized*				*Fair*
		*Cost*				*Value*
		(in thousands)
Due within one year		$	66,569			$	64,574
Due after one year through five years			176,356				168,722
Due after five years through ten years			134,209				123,931
Due after ten years			43,330				39,859
Mortgage and asset-backed securities			277,041				265,906
		$	697,505			$	662,992

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations.

Net investment income summary

Net investment income is summarized as follows:

		*Three Months Ended*
		*March 31,*
		*2024*				*2023*
		(in thousands)
Interest income		$	7,326			$	5,060
Dividend income			197				181
Investment expense			(384	)			(121	)
Net investment income		$	7,139			$	5,120

Net realized and unrealized investment gains and losses

The following table presents net realized and unrealized investment gains and losses:

		*Three Months Ended*
		*March 31,*
		*2024*				*2023*
		(in thousands)
Realized gains:
Gains on sales of fixed maturity securities		$	—			$	28
Total realized gains			—				28
Realized losses:
Losses on sales of fixed maturity securities			(2	)			(3	)
Losses on sales of equity securities			(1,204	)			—
Total realized losses			(1,206	)			(3	)
Net realized investment (losses) gains			(1,206	)			25
Change in allowance for credit losses			—				(659	)
Net unrealized gains (losses) on equity securities			4,229				780
Net unrealized (losses) gains on equity method investment			(21	)			—
Net realized and unrealized gains on investments		$	3,002			$	146

Realized gains and losses on disposition of investments are based on specific identification of the investments sold on the settlement date.

Proceeds from the sale of fixed maturity securities were $2.2 and $5.1 million for the three months ended March 31, 2024 and 2023, respectively.

The Company places securities on statutory deposit with certain state agencies to retain the right to do business in those states. These securities are included in available‑for‑sale investments on the balance sheet. As of March 31, 2024 and December 31, 2023, the carrying value of securities on deposit with state regulatory authorities was $7.4 million and $8.6 million, respectively.

The Company has investments in limited partnerships, recorded in the Other Investments line of the Unaudited Condensed Consolidated Balance Sheets. These investments are measured at estimated fair value utilizing a net asset value per share (or its equivalent) as a practical expedient. As of March 31, 2024, the Company had unfunded commitments to invest an additional $22.9 million in these limited partnerships.