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Investments (Tables)
 3 Months Ended
Mar. 31, 2024
Investments, Debt and Equity Securities [Abstract]  
Schedule of Amortized Cost and Estimated Fair Value of Company's Fixed Maturities Securities

The amortized cost and estimated fair value of the Company’s fixed maturities securities were as follows as of March 31, 2024 and December 31, 2023:

 

(Dollars in thousands)

 

Amortized
Cost

 

 

Allowance for Expected Credit Losses

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair Value

 

As of March 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

$

547,350

 

 

$

—

 

 

$

36

 

 

$

(2,843

)

 

$

544,543

 

Obligations of states and political subdivisions

 

 

24,280

 

 

 

—

 

 

 

—

 

 

 

(1,188

)

 

 

23,092

 

Mortgage-backed securities

 

 

61,200

 

 

 

—

 

 

 

486

 

 

 

(4,144

)

 

 

57,542

 

Asset-backed securities

 

 

203,449

 

 

 

—

 

 

 

687

 

 

 

(4,441

)

 

 

199,695

 

Commercial mortgage-backed securities

 

 

82,027

 

 

 

—

 

 

 

15

 

 

 

(4,271

)

 

 

77,771

 

Corporate bonds

 

 

230,387

 

 

 

—

 

 

 

168

 

 

 

(5,891

)

 

 

224,664

 

Foreign corporate bonds

 

 

102,282

 

 

 

—

 

 

 

45

 

 

 

(3,325

)

 

 

99,002

 

Total fixed maturities

 

$

1,250,975

 

 

$

—

 

 

$

1,437

 

 

$

(26,103

)

 

$

1,226,309

 

 

(Dollars in thousands)

 

Amortized
Cost

 

 

Allowance for Expected Credit Losses

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair Value

 

As of December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

$

497,099

 

 

$

—

 

 

$

515

 

 

$

(3,391

)

 

$

494,223

 

Obligations of states and political subdivisions

 

 

27,326

 

 

 

—

 

 

 

—

 

 

 

(1,176

)

 

 

26,150

 

Mortgage-backed securities

 

 

63,173

 

 

 

—

 

 

 

229

 

 

 

(4,475

)

 

 

58,927

 

Asset-backed securities

 

 

207,375

 

 

 

—

 

 

 

668

 

 

 

(5,091

)

 

 

202,952

 

Commercial mortgage-backed securities

 

 

84,062

 

 

 

—

 

 

 

12

 

 

 

(4,994

)

 

 

79,080

 

Corporate bonds

 

 

298,526

 

 

 

—

 

 

 

116

 

 

 

(6,929

)

 

 

291,713

 

Foreign corporate bonds

 

 

144,531

 

 

 

—

 

 

 

40

 

 

 

(3,823

)

 

 

140,748

 

Total fixed maturities

 

$

1,322,092

 

 

$

—

 

 

$

1,580

 

 

$

(29,879

)

 

$

1,293,793

 

 
Summary of Amortized Cost and Estimated Fair Value Through Fixed Maturities

The amortized cost and estimated fair value of the Company’s fixed maturities portfolio classified as available for sale at March 31, 2024, by contractual maturity, are shown below. 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.

 

(Dollars in thousands)

 

Amortized
Cost

 

 

Estimated
Fair Value

 

Due in one year or less

 

$

632,837

 

 

$

630,760

 

Due in one year through five years

 

 

247,306

 

 

 

238,850

 

Due in five years through ten years

 

 

12,694

 

 

 

11,330

 

Due after ten years

 

 

11,462

 

 

 

10,361

 

Mortgage-backed securities

 

 

61,200

 

 

 

57,542

 

Asset-backed securities

 

 

203,449

 

 

 

199,695

 

Commercial mortgage-backed securities

 

 

82,027

 

 

 

77,771

 

Total

 

$

1,250,975

 

 

$

1,226,309

 
Summary of Securities With Gross Unrealized Losses

The following table contains an analysis of the Company’s fixed income securities with gross unrealized losses that are not deemed to have credit losses, categorized by the period that the securities were in a continuous loss position as of March 31, 2024. The fair value amounts reported in the table are estimates that are prepared using the process described in Note 4.

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

Total

 

(Dollars in thousands)

 

Fair Value

 

 

Gross
Unrealized
Losses

 

 

Fair Value

 

 

Gross
Unrealized
Losses

 

 

Fair Value

 

 

Gross
Unrealized
Losses

 

Fixed maturities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

$

301,942

 

 

$

(816

)

 

$

148,120

 

 

$

(2,027

)

 

$

450,062

 

 

$

(2,843

)

Obligations of states and political subdivisions

 

 

—

 

 

 

—

 

 

 

20,092

 

 

 

(1,188

)

 

 

20,092

 

 

 

(1,188

)

Mortgage-backed securities

 

 

5,770

 

 

 

(67

)

 

 

37,528

 

 

 

(4,077

)

 

 

43,298

 

 

 

(4,144

)

Asset-backed securities

 

 

46,385

 

 

 

(474

)

 

 

84,010

 

 

 

(3,967

)

 

 

130,395

 

 

 

(4,441

)

Commercial mortgage-backed securities

 

 

—

 

 

 

—

 

 

 

75,207

 

 

 

(4,271

)

 

 

75,207

 

 

 

(4,271

)

Corporate bonds

 

 

23,798

 

 

 

(45

)

 

 

150,118

 

 

 

(5,846

)

 

 

173,916

 

 

 

(5,891

)

Foreign corporate bonds

 

 

4,702

 

 

 

(6

)

 

 

81,790

 

 

 

(3,319

)

 

 

86,492

 

 

 

(3,325

)

Total fixed maturities

 

$

382,597

 

 

$

(1,408

)

 

$

596,865

 

 

$

(24,695

)

 

$

979,462

 

 

$

(26,103

)

 

The following table contains an analysis of the Company’s fixed income securities with gross unrealized losses that are not deemed to have credit losses, categorized by the period that the securities were in a continuous loss position as of December 31, 2023. The fair value amounts reported in the table are estimates that are prepared using the process described in Note 4.

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

Total

 

(Dollars in thousands)

 

Fair Value

 

 

Gross
Unrealized
Losses

 

 

Fair Value

 

 

Gross
Unrealized
Losses

 

 

Fair Value

 

 

Gross
Unrealized
Losses

 

Fixed maturities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

$

55,447

 

 

$

(342

)

 

$

239,254

 

 

$

(3,049

)

 

$

294,701

 

 

$

(3,391

)

Obligations of states and political subdivisions

 

 

—

 

 

 

—

 

 

 

26,150

 

 

 

(1,176

)

 

 

26,150

 

 

 

(1,176

)

Mortgage-backed securities

 

 

12,432

 

 

 

(406

)

 

 

39,734

 

 

 

(4,069

)

 

 

52,166

 

 

 

(4,475

)

Asset-backed securities

 

 

38,828

 

 

 

(469

)

 

 

108,947

 

 

 

(4,622

)

 

 

147,775

 

 

 

(5,091

)

Commercial mortgage-backed securities

 

 

13

 

 

 

(2

)

 

 

76,467

 

 

 

(4,992

)

 

 

76,480

 

 

 

(4,994

)

Corporate bonds

 

 

34,658

 

 

 

(264

)

 

 

231,816

 

 

 

(6,665

)

 

 

266,474

 

 

 

(6,929

)

Foreign corporate bonds

 

 

7,096

 

 

 

(13

)

 

 

111,750

 

 

 

(3,810

)

 

 

118,846

 

 

 

(3,823

)

Total fixed maturities

 

$

148,474

 

 

$

(1,496

)

 

$

834,118

 

 

$

(28,383

)

 

$

982,592

 

 

$

(29,879

)
Schedule of Accumulated Other Comprehensive Income (Loss), Net of Tax

Accumulated other comprehensive income (loss), net of tax, as of March 31, 2024 and December 31, 2023 was as follows:

 

(Dollars in thousands)

 

March 31, 2024

 

 

December 31, 2023

 

Net unrealized gains (losses) from:

 

 

 

 

 

 

Fixed maturities

 

$

(24,666

)

 

$

(28,299

)

Foreign currency fluctuations

 

 

(273

)

 

 

(187

)

Deferred taxes

 

 

4,944

 

 

 

5,623

 

Accumulated other comprehensive income (loss), net of tax

 

$

(19,995

)

 

$

(22,863

)
Changes in Accumulated Other Comprehensive Income (Loss)

The following tables present the changes in accumulated other comprehensive income (loss), by components, for the quarters ended March 31, 2024 and 2023:

 

Quarter Ended March 31, 2024
(Dollars in thousands)

 

Unrealized Gains and Losses on Available for Sale Securities

 

 

Foreign Currency Items

 

 

Accumulated Other Comprehensive Income (Loss)

 

Beginning balance, net of tax

 

$

(22,715

)

 

$

(148

)

 

$

(22,863

)

Other comprehensive income (loss) before reclassification, before tax

 

 

3,608

 

 

 

(86

)

 

 

3,522

 

Amounts reclassified from accumulated other comprehensive income, before tax

 

 

25

 

 

 

—

 

 

 

25

 

Other comprehensive income (loss), before tax

 

 

3,633

 

 

 

(86

)

 

 

3,547

 

Income tax benefit (expense)

 

 

(697

)

 

 

18

 

 

 

(679

)

Ending balance, net of tax

 

$

(19,779

)

 

$

(216

)

 

$

(19,995

)

 

Quarter Ended March 31, 2023
(Dollars in thousands)

 

Unrealized Gains and Losses on Available for Sale Securities

 

 

Foreign Currency Items

 

 

Accumulated Other Comprehensive Income (Loss)

 

Beginning balance, net of tax

 

$

(42,958

)

 

$

(100

)

 

$

(43,058

)

Other comprehensive income (loss) before reclassification, before tax

 

 

10,128

 

 

 

(254

)

 

 

9,874

 

Amounts reclassified from accumulated other comprehensive income, before tax

 

 

606

 

 

 

—

 

 

 

606

 

Other comprehensive income (loss), before tax

 

 

10,734

 

 

 

(254

)

 

 

10,480

 

Income tax benefit (expense)

 

 

(2,090

)

 

 

53

 

 

 

(2,037

)

Ending balance, net of tax

 

$

(34,314

)

 

$

(301

)

 

$

(34,615

)

 

 
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

The reclassifications out of accumulated other comprehensive income (loss) for the quarters ended March 31, 2024 and 2023 were as follows:

 

 

 

 

 

Amounts Reclassified from
Accumulated Other (Loss)
Comprehensive Income

 

(Dollars in thousands)

 

 

 

Quarters Ended March 31,

 

Details about Accumulated Other
Comprehensive Income Components

 

Affected Line Item in the Consolidated
Statements of Operations

 

2024

 

 

2023

 

Unrealized gains and losses on available for sale securities

 

Other net realized investment losses

 

$

25

 

 

$

606

 

 

 

Income tax benefit

 

 

(3

)

 

 

(119

)

 

 

Total reclassifications, net of tax

 

$

22

 

 

$

487

 

 

 
Components of Net Realized Investment Gains (Losses)

The components of net realized investment gains (losses) for the quarters ended March 31, 2024 and 2023 were as follows:

 

 

 

Quarters Ended March 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

Fixed maturities:

 

 

 

 

 

 

Gross realized gains

 

$

6

 

 

$

5

 

Gross realized losses

 

 

(31

)

 

 

(611

)

Net realized gains (losses)

 

 

(25

)

 

 

(606

)

Equity securities:

 

 

 

 

 

 

Gross realized gains

 

 

875

 

 

 

627

 

Gross realized losses

 

 

(3

)

 

 

(1,541

)

Net realized gains (losses)

 

 

872

 

 

 

(914

)

Total net realized investment gains (losses)

 

$

847

 

 

$

(1,520

)
Summary of Calculation of Realized Gains and Losses

The following table shows the calculation of the portion of realized gains and losses related to equity securities held as of March 31, 2024 and 2023:

 

 

 

Quarters Ended March 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

Net gains (losses) recognized during the period on equity securities

 

$

872

 

 

$

(914

)

Less: net gains (losses) recognized during the period on equity securities sold during the period

 

 

(11

)

 

 

18

 

Unrealized gains (losses) recognized during the reporting period on equity securities still held

 

$

883

 

 

$

(932

)
Proceeds from Sales and Redemptions of Available-for-Sale Securities

The proceeds from sales and redemptions of available for sale and equity securities resulting in net realized investment gains (losses) for the quarters ended March 31, 2024 and 2023 were as follows:

 

 

 

Quarters Ended March 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

Fixed maturities

 

$

20,759

 

 

$

44,381

 

Equity securities

 

 

—

 

 

 

—

 

 

 
Schedule of Investment Income

The sources of net investment income for the quarters ended March 31, 2024 and 2023 were as follows:

 

 

 

Quarters Ended March 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

Fixed maturities

 

$

13,578

 

 

$

11,460

 

Equity securities

 

 

189

 

 

 

190

 

Cash and cash equivalents

 

 

659

 

 

 

263

 

Other invested assets

 

 

597

 

 

 

467

 

Total investment income

 

 

15,023

 

 

 

12,380

 

Investment expense

 

 

(503

)

 

 

(372

)

Net investment income

 

$

14,520

 

 

$

12,008

 

 
Schedule of Total Investment Return

The Company’s total investment return on a pre-tax basis for the quarters ended March 31, 2024 and 2023 were as follows:

 

 

 

Quarters Ended March 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

Net investment income

 

$

14,520

 

 

$

12,008

 

Net realized investment gains (losses)

 

 

847

 

 

 

(1,520

)

Change in unrealized holding gains

 

 

3,547

 

 

 

10,480

 

Net realized and unrealized investment returns

 

 

4,394

 

 

 

8,960

 

Total investment return

 

$

18,914

 

 

$

20,968

 

Total investment return % (1)

 

 

1.3

%

 

 

1.6

%

Average investment portfolio (2)

 

$

1,403,878

 

 

$

1,344,886

 

 

(1)
Not annualized.
(2)
Average of total cash and invested assets, net of receivable/payable for securities, as of the beginning and end of the period.
Summary of Estimated Fair Values of Bonds Held on Deposit The fair values were as follows as of March 31, 2024 and December 31, 2023:

 

 

 

Estimated Fair Value

 

(Dollars in thousands)

 

March 31, 2024

 

 

December 31, 2023

 

On deposit with governmental authorities

 

$

19,089

 

 

$

19,262

 

Held in trust pursuant to third party requirements

 

 

152,896

 

 

 

150,796

 

Total (1)

 

$

171,985

 

 

$

170,058

 

 

(1)
Includes cash and cash equivalents of $9.9 million and $9.0 million at March 31, 2024 and December 31, 2023, respectively, with the remainder related to bonds available for sale.