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v3.21.1

Summary of Investments | 3 Months Ended
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Mar. 31, 2021
Investments, Debt and Equity Securities [Abstract] |
Summary of Investments | SUMMARY OF INVESTMENTS Fair Value of Investments A reconciliation of the amortized cost to fair value of investments in available-for-sale fixed maturity and short-term investments, presented on a consolidated basis, as of March 31, 2021 and December 31, 2020, is provided below:
March 31, 2021 |  |  |  |  |
Type of Investment | Cost or Amortized Cost |  | Gross Unrealized Appreciation |  | Gross Unrealized Depreciation |  | Fair Value |  | Allowance for Credit Losses |  | Carrying Value
AVAILABLE-FOR-SALE |  |  |  |  |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |  |  |  |  |
Bonds |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 70,254 |  |  | $ | 343 |  |  | $ | 505 |  |  | $ | 70,092 |  |  | $ | — |  |  | $ | 70,092 |
U.S. government agency | 87,150 |  |  | 3,265 |  |  | 2,258 |  |  | 88,157 |  |  | — |  |  | 88,157 |
States, municipalities and political subdivisions |  |  |  |  |  |  |  |  |  |  |
General obligations: |  |  |  |  |  |  |  |  |  |  |
Midwest | 68,578 |  |  | 2,951 |  |  | — |  |  | 71,529 |  |  | — |  |  | 71,529 |
Northeast | 29,018 |  |  | 1,081 |  |  | — |  |  | 30,099 |  |  | — |  |  | 30,099 |
South | 94,493 |  |  | 4,695 |  |  | — |  |  | 99,188 |  |  | — |  |  | 99,188 |
West | 97,459 |  |  | 6,042 |  |  | — |  |  | 103,501 |  |  | — |  |  | 103,501 |
Special revenue: |  |  |  |  |  |  |  |  |  |  |
Midwest | 123,401 |  |  | 8,257 |  |  | — |  |  | 131,658 |  |  | — |  |  | 131,658 |
Northeast | 56,193 |  |  | 3,972 |  |  | — |  |  | 60,165 |  |  | — |  |  | 60,165 |
South | 211,100 |  |  | 15,728 |  |  | 98 |  |  | 226,730 |  |  | — |  |  | 226,730 |
West | 131,711 |  |  | 8,375 |  |  | — |  |  | 140,086 |  |  | — |  |  | 140,086 |
Foreign bonds | 26,372 |  |  | 1,171 |  |  | 134 |  |  | 27,409 |  |  | — |  |  | 27,409 |
Public utilities | 95,501 |  |  | 5,155 |  |  | 523 |  |  | 100,133 |  |  | — |  |  | 100,133 |
Corporate bonds |  |  |  |  |  |  |  |  |  |  |
Energy | 24,101 |  |  | 2,306 |  |  | — |  |  | 26,407 |  |  | — |  |  | 26,407 |
Industrials | 53,535 |  |  | 2,618 |  |  | 572 |  |  | 55,581 |  |  | — |  |  | 55,581 |
Consumer goods and services | 66,557 |  |  | 3,233 |  |  | 1,285 |  |  | 68,505 |  |  | — |  |  | 68,505 |
Health care | 29,025 |  |  | 662 |  |  | 1,188 |  |  | 28,499 |  |  | — |  |  | 28,499 |
Technology, media and telecommunications | 66,211 |  |  | 3,679 |  |  | 1,956 |  |  | 67,934 |  |  | — |  |  | 67,934 |
Financial services | 101,002 |  |  | 5,504 |  |  | 487 |  |  | 106,019 |  |  | 174 |  |  | 105,845 |
Mortgage-backed securities | 26,092 |  |  | 351 |  |  | 143 |  |  | 26,300 |  |  | — |  |  | 26,300 |
Collateralized mortgage obligations |  |  |  |  |  |  |  |  |  |  |
Government national mortgage association | 83,303 |  |  | 3,454 |  |  | 113 |  |  | 86,644 |  |  | — |  |  | 86,644 |
Federal home loan mortgage corporation | 139,364 |  |  | 1,570 |  |  | 1,402 |  |  | 139,532 |  |  | — |  |  | 139,532 |
Federal national mortgage association | 60,744 |  |  | 1,642 |  |  | 463 |  |  | 61,923 |  |  | — |  |  | 61,923 |
Asset-backed securities | 317 |  |  | 531 |  |  | — |  |  | 848 |  |  | — |  |  | 848 |
Total Available-for-Sale Fixed Maturities | $ | 1,741,481 |  |  | $ | 86,585 |  |  | $ | 11,127 |  |  | $ | 1,816,939 |  |  | $ | 174 |  |  | $ | 1,816,765 |
Short-Term Investments | $ | 801 |  |  | $ | 3 |  |  | $ | — |  |  | $ | 804 |  |  | $ | — |  |  | $ | 804 |
Total Available-for-Sale Investments | $ | 1,742,282 |  |  | $ | 86,588 |  |  | $ | 11,127 |  |  | $ | 1,817,743 |  |  | $ | 174 |  |  | $ | 1,817,569 |
December 31, 2020 |  |  |  |
Type of Investment | Cost or Amortized Cost |  | Gross Unrealized Appreciation |  | Gross Unrealized Depreciation |  | Fair Value | Allowance for Credit Losses |  | Carrying Value
AVAILABLE-FOR-SALE |  |  |  |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |  |  |  |
Bonds |  |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 149,481 |  |  | $ | 482 |  |  | $ | 25 |  |  | $ | 149,938 |  | $ | — |  |  | $ | 149,938 |
U.S. government agency | 60,502 |  |  | 4,016 |  |  | — |  |  | 64,518 |  | — |  |  | 64,518 |
States, municipalities and political subdivisions |  |  |  |  |  |  |  |  |  |
General obligations: |  |  |  |  |  |  |  |  |  |
Midwest | 77,933 |  |  | 4,047 |  |  | — |  |  | 81,980 |  | — |  |  | 81,980 |
Northeast | 29,071 |  |  | 1,379 |  |  | — |  |  | 30,450 |  | — |  |  | 30,450 |
South | 104,522 |  |  | 5,448 |  |  | — |  |  | 109,970 |  | — |  |  | 109,970 |
West | 102,590 |  |  | 7,431 |  |  | — |  |  | 110,021 |  | — |  |  | 110,021 |
Special revenue: |  |  |  |  |  |  |  |  |  |
Midwest | 115,956 |  |  | 9,142 |  |  | — |  |  | 125,098 |  | — |  |  | 125,098 |
Northeast | 56,317 |  |  | 4,759 |  |  | — |  |  | 61,076 |  | — |  |  | 61,076 |
South | 208,739 |  |  | 17,967 |  |  | — |  |  | 226,706 |  | — |  |  | 226,706 |
West | 129,417 |  |  | 9,982 |  |  | — |  |  | 139,399 |  | — |  |  | 139,399 |
Foreign bonds | 27,799 |  |  | 1,805 |  |  | 2 |  |  | 29,602 |  | — |  |  | 29,602 |
Public utilities | 76,114 |  |  | 7,388 |  |  | — |  |  | 83,502 |  | — |  |  | 83,502 |
Corporate bonds |  |  |  |  |  |  |  |  |  |
Energy | 22,441 |  |  | 2,895 |  |  | — |  |  | 25,336 |  | — |  |  | 25,336 |
Industrials | 39,513 |  |  | 3,744 |  |  | — |  |  | 43,257 |  | — |  |  | 43,257 |
Consumer goods and services | 46,521 |  |  | 4,046 |  |  | — |  |  | 50,567 |  | — |  |  | 50,567 |
Health care | 6,678 |  |  | 898 |  |  | — |  |  | 7,576 |  | — |  |  | 7,576 |
Technology, media and telecommunications | 37,270 |  |  | 4,381 |  |  | 15 |  |  | 41,636 |  | — |  |  | 41,636 |
Financial services | 93,736 |  |  | 7,564 |  |  | 269 |  |  | 101,031 |  | 5 |  |  | 101,026 |
Mortgage-backed securities | 20,305 |  |  | 326 |  |  | 54 |  |  | 20,577 |  | — |  |  | 20,577 |
Collateralized mortgage obligations |  |  |  |  |  |  |  |  |  |
Government national mortgage association | 81,758 |  |  | 4,439 |  |  | 45 |  |  | 86,152 |  | — |  |  | 86,152 |
Federal home loan mortgage corporation | 151,362 |  |  | 2,239 |  |  | 758 |  |  | 152,843 |  | — |  |  | 152,843 |
Federal national mortgage association | 81,952 |  |  | 2,013 |  |  | 683 |  |  | 83,282 |  | — |  |  | 83,282 |
Asset-backed securities | 314 |  |  | 612 |  |  | — |  |  | 926 |  | — |  |  | 926 |
Total Available-for-Sale Fixed Maturities | $ | 1,720,291 |  |  | $ | 107,003 |  |  | $ | 1,851 |  |  | $ | 1,825,443 |  | $ | 5 |  |  | $ | 1,825,438 |
Maturities The amortized cost and fair value of available-for-sale fixed maturity securities at March 31, 2021, by contractual maturity, are shown in the following tables. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Asset-backed securities, mortgage-backed securities and collateralized mortgage obligations may be subject to prepayment risk and are therefore not categorized by contractual maturity.
Maturities |  |  |  |  |  |  |
| Available-For-Sale |  |
March 31, 2021 | Amortized Cost |  | Fair Value |  |  |  |
Due in one year or less | $ | 29,859 |  |  | $ | 30,220 |  |  |  |  |
Due after one year through five years | 482,121 |  |  | 506,835 |  |  |  |  |
Due after five years through 10 years | 374,037 |  |  | 393,314 |  |  |  |  |
Due after 10 years | 545,644 |  |  | 571,323 |  |  |  |  |
Asset-backed securities | 317 |  |  | 848 |  |  |  |  |
Mortgage-backed securities | 26,092 |  |  | 26,300 |  |  |  |  |
Collateralized mortgage obligations | 283,411 |  |  | 288,099 |  |  |  |  |
| $ | 1,741,481 |  |  | $ | 1,816,939 |  |  |  |  |
Net Realized Investment Gains and Losses Net realized gains on disposition of investments are computed using the specific identification method and are included in the computation of net income. A summary of the components of net realized investment gains (losses) is as follows:
| Three Months Ended March 31, |  |
| 2021 |  | 2020 |  |  |  |
Net realized investment gains (losses): |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |
Available-for-sale | $ | (637) |  |  | $ | (30) |  |  |  |  |
Allowance for credit losses | (170) |  |  | (59) |  |  |  |  |
Trading Securities | — |  |  | (2,457) |  |  |  |  |
Equity securities | 25,315 |  |  | (90,828) |  |  |  |  |
Mortgage loans allowance for credit losses | — |  |  | (5) |  |  |  |  |
Real estate | — |  |  | (28) |  |  |  |  |
Total net realized investment gains (losses) | $ | 24,508 |  |  | $ | (93,407) |  |  |  |  |
The proceeds and gross realized gains on the sale of available-for-sale fixed maturity securities are as follows:
| Three Months Ended March 31, |  |
| 2021 |  | 2020 |  |  |  |
Proceeds from sales | $ | 31,091 |  |  | $ | 11,910 |  |  |  |  |
Gross realized gains | 1 |  |  | 172 |  |  |  |  |
Gross realized losses | 638 |  |  | 382 |  |  |  |  |
Funding Commitment Pursuant to an agreement with one of our limited liability partnership investments, we are contractually committed through July 10, 2030 to make capital contributions upon request of the partnership. Our remaining potential contractual obligation was $6,061 at March 31, 2021. In addition, the Company invested $25,000 in December 2019 in a limited liability partnership investment fund which is subject to a 3-year lockup with a 60 day minimum notice, with 4 possible repurchase dates per year, after the 3-year lockup period is met. The fair value of the investment at March 31, 2021 was $24,889 and there are no remaining capital contributions with this investment. Unrealized Appreciation A summary of the changes in net unrealized investment appreciation during the reporting period is as follows:
| Three Months Ended March 31,
| 2021 |  | 2020
Change in net unrealized investment appreciation |  |  |
Available-for-sale fixed maturities | $ | (29,691) |  |  | $ | 5,696 |
Income tax effect | 6,235 |  |  | (1,196) |
Total change in net unrealized investment appreciation, net of tax | $ | (23,456) |  |  | $ | 4,500 |
Credit Risk An allowance for credit losses is recorded based on a number of factors including the current economic conditions, management's expectations of future economic conditions and performance indicators, such as market value vs. amortized cost, investment spreads widening or contracting, rating actions, payment and default history. The following table contains a rollforward of the allowance for credit losses for available-for-sale fixed maturity securities at March 31, 2021:
Rollforward of allowance for credit losses for available-for-sale fixed maturity securities:
|  | As of
|  | March 31, 2021
Beginning balance, January 1, 2021 |  | $ | 5 |
Additions to the allowance for credit losses for which credit losses were not previously recorded |  | 169 |
Ending balance, March 31, 2021 |  | $ | 174 |
The following tables summarize our fixed maturity securities that were in an unrealized loss position reported on a consolidated basis at March 31, 2021 and December 31, 2020. The securities are presented by the length of time they have been continuously in an unrealized loss position. Non-credit related unrealized losses are recognized as a component of other comprehensive income and represent other market movements that are not credit related, for example interest rate changes. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature.
March 31, 2021 | Less than 12 months |  | 12 months or longer |  | Total
Type of Investment | Number of Issues |  | Fair Value |  | Gross Unrealized Depreciation |  | Number of Issues |  | Fair Value |  | Gross Unrealized Depreciation |  | Fair Value |  | Gross Unrealized Depreciation
AVAILABLE-FOR-SALE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bonds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury | 8 |  |  | $ | 62,122 |  |  | $ | 505 |  |  | — |  |  | $ | — |  |  | $ | — |  |  | $ | 62,122 |  |  | $ | 505 |
U.S. government agency | 4 |  |  | 27,391 |  |  | 2,258 |  |  | — |  |  | — |  |  | — |  |  | 27,391 |  |  | 2,258 |
States, municipalities and political subdivisions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
General obligations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
South | 1 |  |  | 1,176 |  |  | 98 |  |  | — |  |  | — |  |  | — |  |  | 1,176 |  |  | 98 |
Foreign bonds | 3 |  |  | $ | 5,770 |  |  | $ | 134 |  |  | — |  |  | $ | — |  |  | $ | — |  |  | $ | 5,770 |  |  | $ | 134 |
Public utilities | 7 |  |  | 20,607 |  |  | 523 |  |  | — |  |  | — |  |  | — |  |  | 20,607 |  |  | 523 |
Corporate bonds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Industrials | 6 |  |  | 16,436 |  |  | 572 |  |  | — |  |  | — |  |  | — |  |  | 16,436 |  |  | 572 |
Consumer goods and services | 5 |  |  | 19,897 |  |  | 1,285 |  |  | — |  |  | — |  |  | — |  |  | 19,897 |  |  | 1,285 |
Health care | 5 |  |  | 21,508 |  |  | 1,188 |  |  | — |  |  | — |  |  | — |  |  | 21,508 |  |  | 1,188 |
Technology, media and telecommunications | 9 |  |  | 24,792 |  |  | 1,956 |  |  | — |  |  | — |  |  | — |  |  | 24,792 |  |  | 1,956 |
Financial services | 6 |  |  | 13,262 |  |  | 231 |  |  | — |  |  | — |  |  | — |  |  | 13,262 |  |  | 231 |
Mortgage-backed securities | 7 |  |  | 17,126 |  |  | 143 |  |  | 2 |  |  | 14 |  |  | — |  |  | 17,140 |  |  | 143 |
Collateralized mortgage obligations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal home loan mortgage corporation | 24 |  |  | 90,493 |  |  | 1,402 |  |  | — |  |  | — |  |  | — |  |  | 90,493 |  |  | 1,402 |
Federal national mortgage association | 9 |  |  | 26,987 |  |  | 463 |  |  | — |  |  | — |  |  | — |  |  | 26,987 |  |  | 463 |
Government national mortgage association | 4 |  |  | 15,547 |  |  | 113 |  |  | — |  |  | — |  |  | — |  |  | 15,547 |  |  | 113 |
Total Available-for-Sale Fixed Maturities | 98 |  |  | $ | 363,114 |  |  | $ | 10,871 |  |  | 2 |  |  | $ | 14 |  |  | $ | — |  |  | $ | 363,128 |  |  | $ | 10,871 |
The unrealized losses on our investments in available-for-sale fixed maturities were the result of interest rate movements. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature.
December 31, 2020 | Less than 12 months |  | 12 months or longer |  | Total
Type of Investment | Number of Issues |  | Fair Value |  | Gross Unrealized Depreciation |  | Number of Issues |  | Fair Value |  | Gross Unrealized Depreciation |  | Fair Value |  | Gross Unrealized Depreciation
AVAILABLE-FOR-SALE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bonds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury | 5 |  |  | $ | 86,371 |  |  | $ | 25 |  |  | — |  |  | $ | — |  |  | $ | — |  |  | $ | 86,371 |  |  | $ | 25 |
Foreign bonds | 1 |  |  | 2,000 |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | 2,000 |  |  | 2 |
Technology, media and telecommunications | 1 |  |  | 2,020 |  |  | 15 |  |  | — |  |  | — |  |  | — |  |  | 2,020 |  |  | 15 |
Financial services | 1 |  |  | 2,995 |  |  | 5 |  |  | 1 |  |  | 3,000 |  |  | 7 |  |  | 5,995 |  |  | 12 |
Mortgage-backed securities | 2 |  |  | 8,099 |  |  | 53 |  |  | 5 |  |  | 118 |  |  | 1 |  |  | 8,217 |  |  | 54 |
Collateralized mortgage obligations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal home loan mortgage corporation | 24 |  |  | 97,691 |  |  | 758 |  |  | 1 |  |  | 26 |  |  | — |  |  | 97,717 |  |  | 758 |
Federal national mortgage association | 10 |  |  | 44,677 |  |  | 683 |  |  | — |  |  | — |  |  | — |  |  | 44,677 |  |  | 683 |
Government national mortgage association | 2 |  |  | 12,394 |  |  | 45 |  |  | 1 |  |  | 24 |  |  | — |  |  | 12,418 |  |  | 45 |
Total Available-for-Sale Fixed Maturities | 46 |  |  | $ | 256,247 |  |  | $ | 1,586 |  |  | 8 |  |  | $ | 3,168 |  |  | $ | 8 |  |  | $ | 259,415 |  |  | $ | 1,594 |

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