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v3.25.1

Investments | 3 Months Ended
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Mar. 31, 2025
Investments, Debt and Equity Securities [Abstract] |
Investments | Note 4. Investments 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 March 31, 2025 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 |  | $ | 360,026 |  |  | $ | (29 | ) |  | $ | 359,997 |  |  | $ | 1,250 |  |  | $ | (13,333 | ) |  | $ | 347,914 |
Corporate bonds |  |  | 28,110 |  |  |  | (71 | ) |  |  | 28,039 |  |  |  | 10 |  |  |  | (888 | ) |  |  | 27,161 |
U.S. agency-based mortgage-backed securities |  |  | 2,696 |  |  |  | — |  |  |  | 2,696 |  |  |  | 19 |  |  |  | (120 | ) |  |  | 2,595 |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | 8,500 |  |  |  | — |  |  |  | 8,500 |  |  |  | 10 |  |  |  | (208 | ) |  |  | 8,302 |
Asset-backed securities |  |  | 9 |  |  |  | — |  |  |  | 9 |  |  |  | — |  |  |  | — |  |  |  | 9 |
Totals |  | $ | 399,341 |  |  | $ | (100 | ) |  | $ | 399,241 |  |  | $ | 1,289 |  |  | $ | (14,549 | ) |  | $ | 385,981 |
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 March 31, 2025 are summarized as follows:
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |  |  | Allowance for Credit Losses |
|  | (in thousands) |
States and political subdivisions |  | $ | 163,615 |  |  | $ | 208 |  |  | $ | (8,157 | ) |  | $ | 155,666 |  |  | $ | — |
Corporate bonds |  |  | 141,024 |  |  |  | 1,766 |  |  |  | (1,880 | ) |  |  | 140,910 |  |  |  | — |
U.S. agency-based mortgage-backed securities |  |  | 4,406 |  |  |  | — |  |  |  | (403 | ) |  |  | 4,003 |  |  |  | — |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | 14,886 |  |  |  | — |  |  |  | (739 | ) |  |  | 14,147 |  |  |  | — |
Totals |  | $ | 323,931 |  |  | $ | 1,974 |  |  | $ | (11,179 | ) |  | $ | 314,726 |  |  | $ | — |
The cost, gross unrealized gains and losses, and the fair value of equity securities at March 31, 2025 are summarized as follows:
|  | Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
|  | (in thousands) |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |
Domestic common stock - Exchange Traded Funds |  | $ | 36,020 |  |  | $ | 19,465 |  |  | $ | (9 | ) |  | $ | 55,476 |
Total equity securities |  | $ | 36,020 |  |  | $ | 19,465 |  |  | $ | (9 | ) |  | $ | 55,476 |
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 - Exchange Traded Funds |  | $ | 36,020 |  |  | $ | 22,609 |  |  | $ | — |  |  | $ | 58,629 |
Total equity securities |  | $ | 36,020 |  |  | $ | 22,609 |  |  | $ | — |  |  | $ | 58,629 |
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:
|  | March 31, 2025 |  |  | December 31, 2024 |
|  | Carrying Amount |  |  | Fair Value |  |  | Carrying Amount |  |  | Fair Value |
|  | (in thousands) |
Maturity: |  |  |  |  |  |  |  |  |  |  |  |
Within one year |  | $ | 46,809 |  |  | $ | 46,468 |  |  | $ | 49,303 |  |  | $ | 48,831 |
After one year through five years |  |  | 84,055 |  |  |  | 81,338 |  |  |  | 93,087 |  |  |  | 89,418 |
After five years through ten years |  |  | 119,428 |  |  |  | 113,802 |  |  |  | 115,307 |  |  |  | 109,812 |
After ten years |  |  | 146,244 |  |  |  | 141,769 |  |  |  | 152,570 |  |  |  | 149,004 |
U.S. agency-based mortgage-backed securities |  |  | 2,696 |  |  |  | 2,595 |  |  |  | 2,781 |  |  |  | 2,643 |
Asset-backed securities |  |  | 9 |  |  |  | 9 |  |  |  | 13 |  |  |  | 13 |
Totals |  | $ | 399,241 |  |  | $ | 385,981 |  |  | $ | 413,061 |  |  | $ | 399,721 |
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:
|  | March 31, 2025 |  |  | December 31, 2024 |
|  | Amortized Cost |  |  | Fair Value |  |  | Amortized Cost |  |  | Fair Value |
|  | (in thousands) |
Maturity: |  |  |  |  |  |  |  |  |  |  |  |
Within one year |  | $ | 31,138 |  |  | $ | 30,931 |  |  | $ | 23,944 |  |  | $ | 23,806 |
After one year through five years |  |  | 86,691 |  |  |  | 85,258 |  |  |  | 97,996 |  |  |  | 95,500 |
After five years through ten years |  |  | 75,622 |  |  |  | 73,575 |  |  |  | 71,233 |  |  |  | 68,494 |
After ten years |  |  | 126,074 |  |  |  | 120,959 |  |  |  | 121,257 |  |  |  | 115,891 |
U.S. agency-based mortgage-backed securities |  |  | 4,406 |  |  |  | 4,003 |  |  |  | 4,545 |  |  |  | 4,059 |
Totals |  | $ | 323,931 |  |  | $ | 314,726 |  |  | $ | 318,975 |  |  | $ | 307,750 |
The following table summarizes the fair value and gross unrealized losses on 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 as of March 31, 2025.
|  | 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) |
March 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-Sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions |  | $ | 66,649 |  |  | $ | 1,276 |  |  | $ | 70,620 |  |  | $ | 6,881 |  |  | $ | 137,269 |  |  | $ | 8,157 |
Corporate bonds |  |  | 24,309 |  |  |  | 304 |  |  |  | 43,472 |  |  |  | 1,576 |  |  |  | 67,781 |  |  |  | 1,880 |
U.S. agency-based mortgage-backed securities |  |  | — |  |  |  | — |  |  |  | 4,003 |  |  |  | 403 |  |  |  | 4,003 |  |  |  | 403 |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | — |  |  |  | — |  |  |  | 14,147 |  |  |  | 739 |  |  |  | 14,147 |  |  |  | 739 |
Total available-for-sale securities |  | $ | 90,958 |  |  | $ | 1,580 |  |  | $ | 132,242 |  |  | $ | 9,599 |  |  | $ | 223,200 |  |  | $ | 11,179 |
At March 31, 2025, we held 184 individual fixed maturity securities classified as available-for-sale that were in an unrealized loss position. The following table summarizes the fair value and gross unrealized losses on 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 as of December 31, 2024.
|  | 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 |
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 quarter ended March 31, 2025.
|  | 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, 2024 |  | $ | 30 |  |  | $ | 86 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 116 |
Provision for credit loss benefit |  |  | (1 | ) |  |  | (15 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (16 | )
Balance at March 31, 2025 |  | $ | 29 |  |  | $ | 71 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 100 |
As of March 31, 2025, the Company has established an allowance for credit losses on 401 held-to-maturity securities totaling $0.1 million. Most of those securities were issued by states and political subdivisions (387 securities) and corporate bonds (13 securities). The Company has no allowance for credit losses on investments classified as available-for-sale for the period ended March 31, 2025. 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 study of municipal bond defaul ts 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. This amount is then 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 March 31, 2025.
|  | 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 |  | $ | 359,370 |  |  | $ | 13,104 |  |  | $ | 2,696 |  |  | $ | 8,500 |  |  | $ | — |  |  | $ | 383,670 |
Baa/BBB ratings |  |  | 656 |  |  |  | 15,006 |  |  |  | — |  |  |  | — |  |  |  | 9 |  |  |  | 15,671 |
Total |  | $ | 360,026 |  |  | $ | 28,110 |  |  | $ | 2,696 |  |  | $ | 8,500 |  |  | $ | 9 |  |  | $ | 399,341 |
Net realized gains in the quarter ended March 31, 2025 were immaterial. Net realized losses in the quarter ended March 31, 2024 were $0.2 million resulting from the sale of fixed maturity securities classified as available-for-sale. During the three months ended March 31, 2025, we recognized through income $3.2 million of net unrealized losses on equity securities compared to $4.8 million of net unrealized gains on equity securities for the same period in 2024. Investment income is recognized as it is earned. The discount or premium on fixed maturity securities is amortized using the “constant yield” method. Anticipated prepayments, where applicable, are considered when determining the amortization of premiums or discounts. Realized investment gains and losses are determined using the specific identification method. The Company invests in Exchange Traded Funds with the objective of diversifying portfolio holdings.

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