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Investments | 9 Months Ended
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Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract] |
Investments | Investments The following table summarizes the amortized cost and fair value of the Company’s fixed maturity securities, all of which are classified as available for sale:
|  |  |  | Gross Unrealized |  |
As of September 30, 2024 |  | Amortized Cost |  | Gains |  | Losses |  | Fair Value
|  | ($ in thousands)
Fixed maturity securities |  |  |  |  |  |  |  |
U.S. government and government agency |  | $ | 309,181 |  |  | $ | 747 |  |  | $ | (54) |  |  | $ | 309,874 |
State and municipal |  | 68,779 |  |  | 163 |  |  | (3,566) |  |  | 65,376 |
Commercial mortgage-backed securities |  | 61,453 |  |  | 1,082 |  |  | (680) |  |  | 61,855 |
Residential mortgage-backed securities |  | 174,766 |  |  | 3,473 |  |  | (3,769) |  |  | 174,470 |
Asset-backed securities |  | 82,743 |  |  | 732 |  |  | (475) |  |  | 83,000 |
Corporate |  | 196,031 |  |  | 2,161 |  |  | (1,515) |  |  | 196,677 |
Total |  | $ | 892,953 |  |  | $ | 8,358 |  |  | $ | (10,059) |  |  | $ | 891,252 |
|  |  |  | Gross Unrealized |  |
As of December 31, 2023 |  | Amortized Cost |  | Gains |  | Losses |  | Fair Value
|  | ($ in thousands)
Fixed maturity securities |  |  |  |  |  |  |  |
U.S. government and government agency |  | $ | 252,294 |  |  | $ | 579 |  |  | $ | (332) |  |  | $ | 252,541 |
State and municipal |  | 55,984 |  |  | — |  |  | (5,264) |  |  | 50,720 |
Commercial mortgage-backed securities |  | 26,573 |  |  | 29 |  |  | (1,166) |  |  | 25,436 |
Residential mortgage-backed securities |  | 79,032 |  |  | 680 |  |  | (5,010) |  |  | 74,702 |
Asset-backed securities |  | 42,964 |  |  | 32 |  |  | (963) |  |  | 42,033 |
Corporate |  | 112,166 |  |  | 80 |  |  | (3,054) |  |  | 109,192 |
Total |  | $ | 569,013 |  |  | $ | 1,400 |  |  | (15,789) |  |  | $ | 554,624 |
a)Contractual Maturity of Fixed Maturity Securities The amortized cost and fair value of fixed maturity securities at September 30, 2024 and December 31, 2023, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay obligations.
As of September 30, 2024 |  | Amortized Cost |  | Fair Value
|  | ($ in thousands)
Fixed maturity securities |  |  |  |
Due in one year or less |  | $ | 133,335 |  |  | $ | 133,341 |
Due after one year through five years |  | 330,832 |  |  | 329,839 |
Due after five years through ten years |  | 79,882 |  |  | 80,370 |
Due after ten years |  | 29,942 |  |  | 28,377 |
|  | 573,991 |  |  | 571,927 |
Commercial mortgage-backed securities |  | 61,453 |  |  | 61,855 |
Residential mortgage-backed securities |  | 174,766 |  |  | 174,470 |
Asset-backed securities |  | 82,743 |  |  | 83,000 |
Total |  | $ | 892,953 |  |  | $ | 891,252 |
As of December 31, 2023 |  | Amortized Cost |  | Fair Value
|  | ($ in thousands)
Fixed maturity securities |  |  |  |
Due in one year or less |  | $ | 254,656 |  |  | $ | 254,443 |
Due after one year through five years |  | 122,274 |  |  | 118,585 |
Due after five years through ten years |  | 27,145 |  |  | 25,265 |
Due after ten years |  | 16,369 |  |  | 14,160 |
|  | 420,444 |  |  | 412,453 |
Commercial mortgage-backed securities |  | 26,573 |  |  | 25,436 |
Residential mortgage-backed securities |  | 79,032 |  |  | 74,702 |
Asset-backed securities |  | 42,964 |  |  | 42,033 |
Total |  | $ | 569,013 |  |  | $ | 554,624 |
b)Net Investment Income The components of net investment income were derived from the following sources:
|  | Three Months Ended September 30,
|  | 2024 |  | 2023
|  | ($ in thousands)
U.S. government and government agency |  | $ | 3,793 |  |  | $ | 1,224 |
State and municipal |  | 467 |  |  | 387 |
Commercial mortgage-backed securities |  | 761 |  |  | 375 |
Residential mortgage-backed securities |  | 1,955 |  |  | 256 |
Asset-backed securities |  | 719 |  |  | 1,044 |
Corporate |  | 1,611 |  |  | 925 |
Short-term investments |  | 134 |  |  | 186 |
Cash and cash equivalents |  | 2,273 |  |  | 916 |
Gross investment income |  | 11,713 |  |  | 5,313 |
Investment expenses |  | (222) |  |  | (125) |
Net investment income |  | $ | 11,491 |  |  | $ | 5,188 |
|  | Nine Months Ended September 30,
|  | 2024 |  | 2023
|  | ($ in thousands)
U.S. government and government agency |  | $ | 11,316 |  |  | $ | 2,162 |
State and municipal |  | 1,241 |  |  | 1,163 |
Commercial mortgage-backed securities |  | 1,603 |  |  | 1,003 |
Residential mortgage-backed securities |  | 4,118 |  |  | 718 |
Asset-backed securities |  | 1,760 |  |  | 2,537 |
Corporate |  | 3,614 |  |  | 2,514 |
Short-term investments |  | 350 |  |  | 817 |
Cash and cash equivalents |  | 4,493 |  |  | 2,011 |
Gross investment income |  | 28,495 |  |  | 12,925 |
Investment expenses |  | (567) |  |  | (336) |
Net investment income |  | $ | 27,928 |  |  | $ | 12,589 |
c)Net Realized Investment Gains (Losses) There were $18.1 thousand and $16.2 thousand net realized investment losses for the three and nine months ended September 30, 2024 from the sale of investments and nil for the three and nine months ended September 30, 2023. d)Restricted Assets The Company is required to maintain assets as collateral in trust accounts to support the obligations of the AmFam Quota Share Agreement. The assets held in trust include fixed maturity securities, short-term investments and restricted cash and cash equivalents. The Company is entitled to interest income earned on these restricted assets, which is included in net investment income in the Condensed Consolidated Statements of Income and Comprehensive Income. The following table summarizes the value of the Company’s restricted assets disclosed in the Condensed Consolidated Balance Sheets:
As of |  | September 30, 2024 |  | December 31, 2023
|  | ($ in thousands)
U.S. government and government agency |  | $ | 211,665 |  |  | $ | 142,297 |
State and municipal |  | 30,928 |  |  | 19,585 |
Commercial mortgage-backed securities |  | 33,354 |  |  | 9,333 |
Residential mortgage-backed securities |  | 96,991 |  |  | 35,313 |
Asset-backed securities |  | 39,714 |  |  | 23,798 |
Corporate |  | 103,839 |  |  | 49,632 |
Restricted fixed maturity securities |  | 516,491 |  |  | 279,958 |
Restricted short-term investments |  | 10,002 |  |  | 4,864 |
Restricted cash and cash equivalents |  | 28,822 |  |  | 1,698 |
Restricted assets |  | $ | 555,315 |  |  | $ | 286,520 |
e)Gross Unrealized Losses The following table summarizes available for sale securities in an unrealized loss position, the fair value and gross unrealized loss by length of time the security has been in a continual unrealized loss position:
|  | Less than 12 Months |  | 12 Months or Greater |  | Total
As of September 30, 2024 |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
|  | ($ in thousands)
Fixed maturity securities |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and government agency |  | $ | 30,291 |  |  | $ | (17) |  |  | $ | 15,195 |  |  | $ | (37) |  |  | $ | 45,486 |  |  | $ | (54) |
State and municipal |  | 523 |  |  | (3) |  |  | 46,911 |  |  | (3,563) |  |  | 47,434 |  |  | (3,566) |
Commercial mortgage-backed securities |  | 843 |  |  | (2) |  |  | 17,194 |  |  | (678) |  |  | 18,037 |  |  | (680) |
Residential mortgage-backed securities |  | 13,139 |  |  | (46) |  |  | 31,982 |  |  | (3,723) |  |  | 45,121 |  |  | (3,769) |
Asset-backed securities |  | 19,846 |  |  | (66) |  |  | 10,604 |  |  | (409) |  |  | 30,450 |  |  | (475) |
Corporate |  | 14,733 |  |  | (28) |  |  | 55,009 |  |  | (1,487) |  |  | 69,742 |  |  | (1,515) |
Total |  | $ | 79,375 |  |  | $ | (162) |  |  | $ | 176,895 |  |  | $ | (9,897) |  |  | $ | 256,270 |  |  | $ | (10,059) |
|  | Less than 12 Months |  | 12 Months or Greater |  | Total
As of December 31, 2023 |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
|  | ($ in thousands)
Fixed maturity securities |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and government agency |  | $ | 48,598 |  |  | $ | (69) |  |  | $ | 10,970 |  |  | $ | (263) |  |  | $ | 59,568 |  |  | $ | (332) |
State and municipal |  | 2,992 |  |  | (14) |  |  | 47,728 |  |  | (5,250) |  |  | 50,720 |  |  | (5,264) |
Commercial mortgage-backed securities |  | 2,485 |  |  | (53) |  |  | 18,423 |  |  | (1,113) |  |  | 20,908 |  |  | (1,166) |
Residential mortgage-backed securities |  | 17,536 |  |  | (609) |  |  | 31,502 |  |  | (4,401) |  |  | 49,038 |  |  | (5,010) |
Asset-backed securities |  | 16,253 |  |  | (71) |  |  | 18,491 |  |  | (892) |  |  | 34,744 |  |  | (963) |
Corporate |  | 24,976 |  |  | (173) |  |  | 62,733 |  |  | (2,881) |  |  | 87,709 |  |  | (3,054) |
Total |  | $ | 112,840 |  |  | $ | (989) |  |  | $ | 189,847 |  |  | $ | (14,800) |  |  | $ | 302,687 |  |  | $ | (15,789) |
All of the securities in an unrealized loss position are rated investment grade. For fixed maturity securities that management does not intend to sell or are required to sell, there is no portion of the decline in value that is considered to be due to credit factors that would be recognized in earnings. Declines in value are considered to be due to non-credit factors and are recognized in Other Comprehensive Income. The Company has evaluated its fixed maturity securities in an unrealized loss position and concluded that the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on the assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become due.

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