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v3.26.1

Investments | 3 Months Ended
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Mar. 31, 2026
Investments, Debt and Equity Securities [Abstract] |
Investments | 4. INVESTMENTS Octave's invested assets are primarily comprised of (i) fixed maturity securities classified as available for sale, (ii) an investment in a limited partnership and (iii) preferred equity investments. The investments in the limited partnership interest and preferred equity investments are reported within Other investments on the Consolidated Balance Sheets. The limited partnership, which holds pooled investments, is reported using the equity method. Fixed Maturity Securities: The amortized cost and estimated fair value of available-for-sale investments, at March 31, 2026 and December 31, 2025, were as follows:
|  | March 31, 2026: |  | December 31, 2025:
|  | Amortized Cost |  | Allowance for Credit Losses |  | Gross Unrealized |  | Estimated Fair Value |  | Amortized Cost |  | Allowance for Credit Losses |  | Gross Unrealized |  | Estimated Fair Value
|  |  |  | Gains |  | Losses |  |  |  |  | Gains |  | Losses |
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal obligations |  | $ | 10,606 |  |  |  |  | $ | 87 |  |  | $ | 217 |  |  | $ | 10,476 |  |  | $ | 11,697 |  |  | — |  |  | $ | 121 |  |  | $ | 228 |  |  | $ | 11,590 |
Corporate obligations |  | 78,891 |  |  |  |  | 298 |  |  | 2,249 |  |  | 76,940 |  |  | 67,881 |  |  | — |  |  | 634 |  |  | 1,942 |  |  | 66,573 |
U.S. government obligations |  | 39,094 |  |  |  |  | 166 |  |  | 218 |  |  | 39,042 |  |  | 35,190 |  |  | — |  |  | 365 |  |  | 131 |  |  | 35,424 |
Residential mortgage-backed securities |  | 2,643 |  |  |  |  | 5 |  |  | 21 |  |  | 2,627 |  |  | 1,604 |  |  | — |  |  | — |  |  | 7 |  |  | 1,597 |
Commercial mortgage-backed securities |  | 5,002 |  |  |  |  | 23 |  |  | 40 |  |  | 4,985 |  |  | 3,307 |  |  | — |  |  | 42 |  |  | 8 |  |  | 3,341 |
Collateralized debt obligations |  | 1,626 |  |  |  |  | 5 |  |  | 1 |  |  | 1,630 |  |  | 1,963 |  |  | — |  |  | 12 |  |  | — |  |  | 1,975 |
Other asset-backed securities |  | 1,380 |  |  |  |  | 12 |  |  | — |  |  | 1,392 |  |  | 1,772 |  |  | — |  |  | 23 |  |  | — |  |  | 1,795 |
Total fixed maturity securities |  | 139,242 |  |  | — |  |  | 596 |  |  | 2,746 |  |  | 137,092 |  |  | 123,414 |  |  | — |  |  | 1,197 |  |  | 2,316 |  |  | 122,295 |
Short-term investments |  | 92,295 |  |  | — |  |  | — |  |  | — |  |  | 92,295 |  |  | 146,434 |  |  | — |  |  | 8 |  |  | — |  |  | 146,442 |
Total available-for-sale investments |  | $ | 231,537 |  |  | $ | — |  |  | $ | 596 |  |  | $ | 2,746 |  |  | $ | 229,387 |  |  | $ | 269,848 |  |  | — |  |  | $ | 1,205 |  |  | $ | 2,316 |  |  | $ | 268,737 |
The amortized cost and estimated fair value of available-for-sale investments, by contractual maturity, were as follows:
|  | March 31, 2026 |  |  |  |  |  |  |  |
|  | Amortized Cost |  | Estimated Fair Value |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 117,446 |  |  | $ | 117,313 |  |  |  |  |  |  |  |  |
Due after one year through five years |  | 47,546 |  |  | 45,845 |  |  |  |  |  |  |  |  |
Due after five years through ten years |  | 55,344 |  |  | 55,042 |  |  |  |  |  |  |  |  |
Due after ten years |  | 550 |  |  | 553 |  |  |  |  |  |  |  |  |
|  | 220,886 |  |  | 218,753 |  |  |  |  |  |  |  |  |
Residential mortgage-backed securities |  | 2,643 |  |  | 2,627 |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 5,002 |  |  | 4,985 |  |  |  |  |  |  |  |  |
Collateralized debt obligations |  | 1,626 |  |  | 1,630 |  |  |  |  |  |  |  |  |
Other asset-backed securities |  | 1,380 |  |  | 1,392 |  |  |  |  |  |  |  |  |
Total available-for-sale investments |  | $ | 231,537 |  |  | $ | 229,387 |  |  |  |  |  |  |  |  |
|  | December 31, 2025
|  | Amortized Cost |  | Estimated Fair Value
Due in one year or less |  | $ | 180,013 |  |  | $ | 179,824 |
Due after one year through five years |  | 32,409 |  |  | 31,588 |
Due after five years through ten years |  | 47,801 |  |  | 47,619 |
Due after ten years |  | 979 |  |  | 998 |
|  | 261,202 |  |  | 260,029 |
Residential mortgage-backed securities |  | 1,604 |  |  | 1,597 |
Commercial mortgage-backed securities |  | 3,307 |  |  | 3,341 |
Collateralized debt obligations |  | 1,963 |  |  | 1,975 |
Other asset-backed securities |  | 1,772 |  |  | 1,795 |
Total |  | $ | 269,848 |  |  | $ | 268,737 |
Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties. Unrealized Losses on Fixed Maturity Securities The following table shows gross unrealized losses and fair values of Octave's available-for-sale investments, which at March 31, 2026 and December 31, 2025, did not have an allowance for credit losses under the CECL standard. This information is aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at March 31, 2026 and December 31, 2025:
|  | March 31, 2026 |  | December 31, 2025
|  | Less Than 12 Months |  | 12 Months or More |  | Total |  | Less Than 12 Months |  | 12 Months or More |  | Total
|  | Fair Value |  | Gross Unrealized Loss |  | Fair Value |  | Gross Unrealized Loss |  | Fair Value |  | Gross Unrealized Loss |  | Fair Value |  | Gross Unrealized Loss |  | Fair Value |  | Gross Unrealized Loss |  | Fair Value |  | Gross Unrealized Loss
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal obligations |  | $ | 532 |  |  | $ | 20 |  |  | $ | 4,904 |  |  | $ | 197 |  |  | $ | 5,436 |  |  | $ | 217 |  |  | $ | 535 |  |  | $ | 16 |  |  | $ | 5,820 |  |  | $ | 212 |  |  | $ | 6,355 |  |  | $ | 228 |
Corporate obligations |  | 22,033 |  |  | 249 |  |  | 26,654 |  |  | 2,000 |  |  | 48,687 |  |  | 2,249 |  |  | 1,807 |  |  | 10 |  |  | 30,751 |  |  | 1,932 |  |  | 32,558 |  |  | 1,942 |
U.S. government obligations |  | 14,522 |  |  | 124 |  |  | 6,770 |  |  | 94 |  |  | 21,292 |  |  | 218 |  |  | 2,206 |  |  | 14 |  |  | 9,491 |  |  | 117 |  |  | 11,697 |  |  | 131 |
Residential mortgage-backed securities |  | 473 |  |  | 8 |  |  | 1,454 |  |  | 13 |  |  | 1,927 |  |  | 21 |  |  | — |  |  | — |  |  | 1,596 |  |  | 7 |  |  | 1,596 |  |  | 7 |
Commercial mortgage-backed securities |  | 2,518 |  |  | 40 |  |  | — |  |  | — |  |  | 2,518 |  |  | 40 |  |  | 763 |  |  | 8 |  |  | — |  |  | — |  |  | 763 |  |  | 8 |
Collateralized debt obligations |  | 68 |  |  | — |  |  | — |  |  | 1 |  |  | 68 |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other asset-backed securities |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 40,146 |  |  | 441 |  |  | 39,782 |  |  | 2,305 |  |  | 79,928 |  |  | 2,746 |  |  | 5,311 |  |  | 48 |  |  | 47,658 |  |  | 2,268 |  |  | 52,969 |  |  | 2,316 |
Short-term |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 40,146 |  |  | 441 |  |  | 39,782 |  |  | 2,305 |  |  | 79,928 |  |  | 2,746 |  |  | 5,311 |  |  | 48 |  |  | 47,658 |  |  | 2,268 |  |  | 52,969 |  |  | 2,316 |
Total temporarily impaired securities |  | $ | 40,146 |  |  | $ | 441 |  |  | $ | 39,782 |  |  | $ | 2,305 |  |  | $ | 79,928 |  |  | $ | 2,746 |  |  | $ | 5,311 |  |  | $ | 48 |  |  | $ | 47,658 |  |  | $ | 2,268 |  |  | $ | 52,969 |  |  | $ | 2,316 |
Management has determined that the securities in the above table do not have credit impairment as of March 31, 2026 and December 31, 2025, based upon (i) no actual or expected principal and interest payment defaults on these securities and (ii) analysis of the creditworthiness of the issuer. Octave's assessment about whether a security is credit impaired reflects management’s current judgment regarding facts and circumstances specific to the security and other factors. If that judgment changes, Octave may record a charge for credit impairment in future periods. The declines in fair value and resultant unrealized losses across asset classes as of March 31, 2026, included in the above table resulted primarily from the impact of increasing interest rates since the securities were purchased. Management has determined that the securities with unrealized losses are not credit impaired. Additionally, management does not intend to sell and it is not more likely than not that the Company will be required to sell the securities with unrealized losses before recovery of their amortized cost basis. Further discussion of management's assessment with respect to security categories with larger unrealized loss balances is below. Corporate obligations The gross unrealized losses on corporate obligations as of March 31, 2026, resulted primarily from an increase in interest rates since the securities were purchased. Management believes that the full and timely receipt of all principal and interest payment on corporate obligations with unrealized losses as of March 31, 2026, is probable. Accrued interest receivable for available-for-sale investments, excluded from amortized cost above and included in Other assets on the Consolidated Balance Sheets, at March 31, 2026 and December 31, 2025 was $1,494 and $1,432, respectively. Accrued interest receivable is not measured for credit impairment and is written off by reversing interest income when the receivable becomes 90 days past due. Investment Income (Loss) Net investment income (loss) was comprised of the following for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31, |  | 2026 |  | 2025 |  |  |  |
Fixed maturity securities |  | $ | 1,211 |  |  | $ | 1,400 |  |  |  |  |
Short-term investments |  | 1,244 |  |  | 1,457 |  |  |  |  |
Loans |  | — |  |  | 35 |  |  |  |  |
Investment expense |  | (100) |  |  | 2 |  |  |  |  |
Securities available-for-sale and short-term |  | 2,355 |  |  | 2,894 |  |  |  |  |
Other investments |  | — |  |  | (79) |  |  |  |  |
Total net investment income (loss) |  | $ | 2,355 |  |  | $ | 2,815 |  |  |  |  |
Net investment income (loss) from Other investments primarily represents changes in the fair value of equity securities, including income from investment limited partnerships, and other equity interests accounted for under the equity method. Net Investments Gains (Losses), including Impairments Realized gains and losses on the sale of investments are determined on a first-in-first-out basis. The following table details amounts included in net investment gains (losses) and impairments included in Revenues, other, on the Consolidated Statements of Income (Loss) for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31, |  | 2026 |  | 2025 |  |  |  |
Gross realized gains on securities |  | $ | 5 |  |  | $ | — |  |  |  |  |
Gross realized losses on securities |  | (2) |  |  | (3) |  |  |  |  |
Credit impairments |  | — |  |  | — |  |  |  |  |
Net investment gains (losses), including impairments |  | $ | 3 |  |  | $ | (3) |  |  |  |  |
Octave did not purchase any financial assets with credit deterioration for the three months ended March 31, 2026 and 2025. Deposits with Regulators and Other Restrictions Securities with a carrying value of $37,507 and $34,016, at March 31, 2026 and December 31, 2025, respectively, were deposited by Octave's insurance subsidiaries with governmental authorities or designated custodian banks as required by laws affecting insurance companies. Fixed maturity securities with a carrying value of $152 and $153, at March 31, 2026 and December 31, 2025, respectively, were deposited as security in connection with a letter of credit issued for a corporate office lease. Fiduciary funds held by Octave's insurance distribution subsidiaries, carried at $1,691 and $2,656, at March 31, 2026 and December 31, 2025, respectively, are included in invested assets. Other Investments Octave's investment portfolio includes a limited partnership interest in a private equity fund that seeks to generate long-term capital appreciation through investments in private equity, equity-related and other instruments. The fair value of Octave's investment in the fund was $7,454 and $7,454 as of March 31, 2026 and December 31, 2025, respectively, determined using net asset value ("NAV") as a practical expedient. Redemptions may be made quarterly with 90 days notice subject to withdrawal limitations and/or redemption fees, which vary with the timing and notification of withdrawal provided by the investor. Octave's unfunded commitments total $1,501 on this private equity fund at March 31, 2026. Other investments also include preferred equity investments with a carrying value of $17,517 and $17,517 as of March 31, 2026 and December 31, 2025, respectively, that do not have readily determinable fair values and are carried at cost, less any impairments as permitted under the Investments — Equity Securities Topic of the ASC. There were no impairments recorded on these investments in the three months ended March 31, 2026 and 2025

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