Investments

12 Months Ended

Dec. 31, 2024

Investments, Debt and Equity Securities [Abstract]

Short-term investments held at December 31, 2024 include $9.3 million of corporate bonds. There were no short-term investments held at December 31, 2023.

The amortized cost, allowance for credit losses, carrying amount, gross unrecognized gains and losses, and the fair value of those investments classified as held-to-maturity at December 31, 2024 are summarized as follows:


	Amortized Cost		Allowance for Credit Losses			Carrying Amount		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	368,056	$	(30	)	$	368,026	$	1,810	$	(13,568	)	$	356,268
Corporate bonds		33,849		(86	)		33,763		6		(1,099	)		32,670
U.S. agency-based mortgage-backed securities		2,781		—			2,781		11		(149	)		2,643
U.S. Treasury securities and obligations of U.S. government agencies		8,478		—			8,478		11		(362	)		8,127
Asset-backed securities		13		—			13		—		—			13
Totals	$	413,177	$	(116	)	$	413,061	$	1,838	$	(15,178	)	$	399,721

The amortized cost, gross unrealized gains and losses, fair value, and the allowance for credit losses of those investments classified as available-for-sale at December 31, 2024 are summarized as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Allowance for Credit Losses
	(in thousands)
States and political subdivisions	$	156,488	$	148	$	(8,430	)	$	148,206	$	—
Corporate bonds		143,070		1,248		(2,783	)		141,535		—
U.S. agency-based mortgage-backed securities		4,545		—		(486	)		4,059		—
U.S. Treasury securities and obligations of U.S. government agencies		14,872		—		(922	)		13,950		—
Totals	$	318,975	$	1,396	$	(12,621	)	$	307,750	$	—

The cost, gross unrealized gains and losses, and the fair value of equity securities at December 31, 2024 are summarized as follows:


	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Equity securities:
Domestic common stock	$	36,020	$	22,609	$	—	$	58,629
Total equity securities	$	36,020	$	22,609	$	—	$	58,629

The amortized cost, allowance for credit losses, carrying amount, gross unrealized gains and losses, and the fair value of those investments classified as held-to-maturity at December 31, 2023 are summarized as follows:


	Amortized Cost		Allowance for Credit Losses			Carrying Amount		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	416,916	$	(38	)	$	416,878	$	4,166	$	(12,074	)	$	408,970
Corporate bonds		52,321		(142	)		52,179		—		(2,231	)		49,948
U.S. agency-based mortgage-backed securities		3,297		—			3,297		25		(123	)		3,199
U.S. Treasury securities and obligations of U.S. government agencies		11,186		—			11,186		26		(273	)		10,939
Asset-backed securities		37		(2	)		35		1		—			36
Totals	$	483,757	$	(182	)	$	483,575	$	4,218	$	(14,701	)	$	473,092


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Allowance for Credit Losses
	(in thousands)
States and political subdivisions	$	138,031	$	583	$	(6,719	)	$	131,895	$	—
Corporate bonds		168,134		2,105		(3,486	)		166,753		—
U.S. agency-based mortgage-backed securities		5,190		—		(445	)		4,745		—
U.S. Treasury securities and obligations of U.S. government agencies		14,816		—		(1,145	)		13,671		—
Totals	$	326,171	$	2,688	$	(11,795	)	$	317,064	$	—

The cost, gross unrealized gains and losses on, and fair value of equity securities at December 31, 2023 are summarized as follows:


	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Equity securities:
Domestic common stock	$	44,046	$	13,101	$	—	$	57,147
Total equity securities	$	44,046	$	13,101	$	—	$	57,147

A summary of the carrying amounts and fair value of investments in fixed maturity securities classified as held-to-maturity, by contractual maturity, is as follows:


	December 31, 2024				December 31, 2023
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)
Maturity:
Within one year	$	49,303	$	48,831	$	64,129	$	63,703
After one year through five years		93,087		89,418		136,854		131,396
After five years through ten years		115,307		109,812		114,990		110,814
After ten years		152,570		149,004		164,270		163,944
U.S. agency-based mortgage-backed securities		2,781		2,643		3,297		3,199
Asset-backed securities		13		13		35		36
Totals	$	413,061	$	399,721	$	483,575	$	473,092

A summary of the amortized cost and fair value of investments in fixed maturity securities classified as available-for-sale, by contractual maturity, is as follows:


	December 31, 2024				December 31, 2023
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	23,944	$	23,806	$	25,995	$	25,875
After one year through five years		97,996		95,500		106,178		102,201
After five years through ten years		71,233		68,494		82,664		80,911
After ten years		121,257		115,891		106,144		103,332
U.S. agency-based mortgage-backed securities		4,545		4,059		5,190		4,745
Totals	$	318,975	$	307,750	$	326,171	$	317,064

Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties.

At December 31, 2024, there were $22.6 million of held-to-maturity and $2.1 million of available-for-sale investments on deposit with regulatory agencies of states in which the Company does business.

A summary of the Company’s realized gains and losses on sales, calls or redemptions of investments for 2024, 2023 and 2022 is as follows:


	Fixed Maturity Securities Available-for-Sale			Equity Securities			Other			Total
	(in thousands)
Year ended December 31, 2024
Proceeds from sales	$	26,327		$	7,933		$	—		$	34,260
Gross realized investment gains	$	10		$	1,044		$	—		$	1,054
Gross realized investment losses		(310	)		(1,136	)		—			(1,446	)
Net realized investment losses		(300	)		(92	)		—			(392	)
Other, including gains (losses) on calls and redemptions		129			—			(313	)		(184	)
Net realized losses on investments	$	(171	)	$	(92	)	$	(313	)	$	(576	)
Year ended December 31, 2023
Proceeds from sales	$	28,292		$	12,688		$	925		$	41,905
Gross realized investment gains	$	181		$	6,548		$	—		$	6,729
Gross realized investment losses		(173	)		—			—			(173	)
Net realized investment gains		8			6,548			—			6,556
Other, including gains on calls and redemptions		—			—			23			23
Net realized gains on investments	$	8		$	6,548		$	23		$	6,579
Year ended December 31, 2022
Proceeds from sales	$	42,505		$	8,487		$	—		$	50,992
Gross realized investment gains	$	365		$	3,350		$	—		$	3,715
Gross realized investment losses		(51	)		—			—			(51	)
Net realized investment gains		314			3,350			—			3,664
Other, including losses on calls and redemptions		(200	)		—			(24	)		(224	)
Net realized gains (losses) on investments	$	114		$	3,350		$	(24	)	$	3,440

Major categories of the Company’s net investment income are summarized as follows:


	Year Ended December 31,
	2024			2023			2022
	(in thousands)
Gross investment income:
Fixed maturity securities	$	26,341		$	26,357		$	24,399
Equity securities		1,003			1,456			1,566
Short-term investments and cash and cash equivalents		3,949			4,456			2,260
Total gross investment income		31,293			32,269			28,225
Investment expenses		(2,081	)		(930	)		(1,002	)
Net investment income	$	29,212		$	31,339		$	27,223

The following table summarizes the fair value and gross unrealized losses on fixed maturity securities classified as available-for-sale, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position:


	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(in thousands)
December 31, 2024
Available-for-Sale
States and political subdivisions	$	100,190	$	5,748	$	27,446	$	2,682	$	127,636	$	8,430
Corporate bonds		71,069		1,790		19,000		993		90,069		2,783
U.S. agency-based mortgage-backed securities		3,840		446		219		40		4,059		486
U.S. Treasury securities and obligations of U.S. government agencies		—		—		13,950		922		13,950		922
Total available-for-sale securities	$	175,099	$	7,984	$	60,615	$	4,637	$	235,714	$	12,621
December 31, 2023
Available-for-Sale
States and political subdivisions	$	14,115	$	111	$	72,358	$	6,608	$	86,473	$	6,719
Corporate bonds		26,178		96		93,538		3,390		119,716		3,486
U.S. agency-based mortgage-backed securities		—		—		4,745		445		4,745		445
U.S. Treasury securities and obligations of U.S. government agencies		—		—		13,672		1,145		13,672		1,145
Total available-for-sale securities	$	40,293	$	207	$	184,313	$	11,588	$	224,606	$	11,795

At December 31, 2024, the Company held 187 individual fixed maturity securities classified as available-for-sale that were in an unrealized loss position, of which 40 were in a continuous unrealized loss position for longer than 12 months.

The following table illustrates the changes in the allowance for credit losses by major security type of the investments classified as held-to-maturity for the year ended December 31, 2024.


	States and Political Subdivisions			Corporate Bonds			U.S. Agency -Based Mortgage- Backed Securities		U.S. Treasury Securities and Obligations of U.S. Government Agencies		Asset-Backed Securities			Totals
	(in thousands)
Balance at December 31, 2023	$	38		$	142		$	—	$	—	$	2		$	182
Provision for credit loss benefit		(8	)		(56	)		—		—		(2	)		(66	)
Balance at December 31, 2024	$	30		$	86		$	—	$	—	$	—		$	116

The Company has established an allowance for credit losses on 416 held-to-maturity securities totaling $0.1 million as of December 31, 2024. The majority of those securities were issued by states and political subdivisions and corporate bonds at 398 and 15, respectively.

The Company has no allowance for credit losses on investments classified as available-for-sale as of December 31, 2024 and 2023.

The credit rating used for held-to-maturity fixed income securities is the rating for each security as published by Moody’s, Standard and Poor’s, and Fitch to determine the probability of default. If there are two ratings, the lower rating is used. If there are three ratings, the median rating is used. If there is one rating, that rating is used. For corporate fixed income securities (given a rating), the probability of default comes from Moody’s annual study of corporate bond defaults published each February. The maximum maturity using the default rate is 20 years (any maturity greater than 20 years will use the 20-year rate). For municipal fixed income securities (given a rating), the probability of default comes from Moody’s annual study of municipal bond defaults published annually.

The calculation of the credit loss allowance takes the amortized cost of the fixed income security and assumes default and recovery based on the average recovery rates from the Moody’s default studies. The amortized cost of the security plus any accrued interest, minus the amount recovered, is the estimated full amount the Company could lose in a default scenario. Then this amount is multiplied by the probability of default to determine the allowance for credit loss. The lower the security is rated, the higher likelihood of default, and therefore a higher allowance for credit loss. The longer to the maturity date of a security, the higher the default risk.

The table below presents the amortized cost of held-to-maturity securities aggregated by credit quality indicator as of December 31, 2024.


	States and Political Subdivisions		Corporate Bonds		U.S. Agency -Based Mortgage- Backed Securities		U.S. Treasury Securities and Obligations of U.S. Government Agencies		Asset-Backed Securities		Totals
	Amortized Cost
	(in thousands)
AAA/AA/A ratings	$	367,399	$	13,235	$	2,781	$	8,478	$	3	$	391,896
Baa/BBB ratings		657		20,614		—		—		10		21,281
Total	$	368,056	$	33,849	$	2,781	$	8,478	$	13	$	413,177