Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

7) GOODWILL AND INTANGIBLE ASSETS

Goodwill

The carrying amount of goodwill at September 30, 2022 was $59,476,000. The carrying amount of goodwill at December 31, 2021 was $73,045,000.

As a result of the strategic decision to place UPC into an orderly runoff, we recognized an impairment of our personal lines reporting unit's goodwill totaling $13,569,000 during the three months and nine months ended September 30, 2022. No impairment in the value of goodwill was recognized during the three or nine month periods ended September 30, 2021. The goodwill attributable to our commercial lines reporting unit was most recently tested for impairment during the second quarter of 2022, as a result of the merging of JIC into ACIC and no impairment was recognized.

Goodwill allocated to our commercial lines reporting unit was $59,476,000 at September 30, 2022. There was no goodwill allocated to our personal lines reporting unit at September 30, 2022. Goodwill allocated to our personal lines and commercial lines reporting units was $13,569,000 and $59,476,000, respectively, at December 31, 2021.

There was no additional goodwill acquired or disposed of during the three or nine month periods ended September 30, 2022 and 2021. Accumulated impairment related to goodwill was $13,569,000 at September 30, 2022. There was no accumulated impairment related to goodwill at December 31, 2021.

Intangible Assets

The following is a summary of intangible assets excluding goodwill recorded as intangible assets on our Unaudited Condensed Consolidated Balance Sheets:


	September 30, 2022		December 31, 2021
Intangible assets subject to amortization	$	12,183	$	14,618
Indefinite-lived intangible assets(1)	3,757		3,757
Total	$	15,940	$	18,375

(1) Indefinite-lived intangible assets are comprised of state insurance and agent licenses, as well as perpetual software licenses.

Intangible assets subject to amortization consisted of the following:


	Weighted-average remaining amortization period (in years)	Gross carrying amount		Accumulated amortization		Net carrying amount
September 30, 2022
Value of business acquired	—	$	42,788	$	(42,788)	$	—
Agency agreements acquired	4.5	34,661		(23,691)		10,970
Trade names acquired	1.5	6,381		(5,168)		1,213
Total		$	83,830	$	(71,647)	$	12,183

December 31, 2021
Value of business acquired	—	$	42,788	$	(42,788)	$	—
Agency agreements acquired	5.3	34,661		(21,863)		12,798
Trade names acquired	2.3	6,381		(4,561)		1,820
Total		$	83,830	$	(69,212)	$	14,618

No impairment in the value of amortizing or non-amortizing intangible assets was recognized during the nine months ended September 30, 2022 and 2021.

Amortization expense of our intangible assets was $811,000 and $812,000 for the three months ended September 30, 2022 and 2021, respectively. Amortization expense of our intangible assets was $2,435,000 and $2,744,000 for the nine months ended September 30, 2022 and 2021, respectively.

Estimated amortization expense of our intangible assets to be recognized by the Company during the remainder of 2022 and over the next five years is as follows:


Year ending December 31,	Estimated Amortization Expense
Remaining in 2022	$	812
2023	3,246
2024	2,640
2025	2,438
2026	2,438
2027	609