Investments

12 Months Ended

Dec. 31, 2024

Investments, Debt and Equity Securities [Abstract]

The Company invests primarily in fixed maturity securities, which totaled 86.0% of total cash and invested assets at December 31, 2024.


Carrying Value as of December 31, (In thousands, except for %)	2024		%		2023		%
Cash and invested assets:
Fixed maturity securities	$	1,220,961	86.0	%	$	1,238,981	86.7	%
Equity securities	5,447		0.4		5,282		0.4
Policy loans	71,216		5.0		75,359		5.3
Other long-term investments	93,604		6.6		82,725		5.8

Cash and cash equivalents	29,271		2.0		26,997		1.8
Total cash and invested assets	$	1,420,499	100.0	%	$	1,429,344	100.0	%

The following tables represents the amortized cost, gross unrealized gains and losses and fair value of fixed maturity securities as of the dates indicated.


December 31, 2024 (In thousands)	Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
Fixed maturity securities:
U.S. Treasury securities	$	5,939	85	115	5,909
U.S. Government-sponsored enterprises	3,152		152	—	3,304
States and political subdivisions	300,757		1,087	33,542	268,302
Corporate:
Financial	272,925		1,593	33,285	241,233
Consumer	263,242		899	45,955	218,186
Utilities	126,361		220	22,770	103,811
Energy	79,247		40	9,959	69,328
Communications	70,896		111	9,910	61,097
All other	117,387		315	16,368	101,334
Commercial mortgage-backed	315		1	5	311
Residential mortgage-backed	106,661		7	13,026	93,642
Asset-backed	54,419		891	806	54,504

Total fixed maturity securities	$	1,401,301	5,401	185,741	1,220,961


December 31, 2023 (In thousands)	Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
Fixed maturity securities:
U.S. Treasury securities	$	5,983	127	48	6,062
U.S. Government-sponsored enterprises	3,404		250	1	3,653
States and political subdivisions	314,203		2,160	29,132	287,231
Corporate:
Financial	266,485		2,066	31,255	237,296
Consumer	250,672		2,145	37,094	215,723
Utilities	123,625		615	20,253	103,987
Energy	73,808		64	8,049	65,823
Communications	74,029		309	8,892	65,446
All other	111,124		647	12,439	99,332
Commercial mortgage-backed	171		—	—	171
Residential mortgage-backed	107,174		9	10,060	97,123
Asset-backed	58,360		290	1,516	57,134

Total fixed maturity securities	$	1,389,038	8,682	158,739	1,238,981

The Company's investments in equity securities are shown below.


Fair Value as of December 31, (In thousands)	2024		2023
Equity securities:

Bond mutual funds	$	739	740
Common stock	810		665
Non-redeemable preferred stock	7		7
Non-redeemable preferred stock fund	3,891		3,870
Total equity securities	$	5,447	5,282

VALUATION OF INVESTMENTS

AFS fixed maturity securities are reported in the consolidated financial statements at fair value. Equity securities are measured at fair value with the change in fair value recorded through net income (loss). The Company recognized net investment related gains of $0.2 million on equity securities held for the year ended December 31, 2024 and losses of $0.2 million on equity securities held for the year ended December 31, 2023.

The Company monitors all AFS fixed maturity securities on an on-going basis relative to changes in credit ratings, market prices, earnings trends and financial performance, in addition to specific region or industry reviews. The Company evaluates whether a credit impairment exists for fixed maturity securities by considering primarily the following factors: (a) changes in the financial condition of the security's underlying collateral; (b) whether the issuer is current on contractually obligated interest and principal payments; (c) changes in the financial condition, credit rating and near-term prospects of the issuer; and (d) the payment structure of the security. The Company's best estimate of expected future cash flows used to determine the credit loss amount is a quantitative and qualitative process. Quantitative review includes information received from third-party sources such as financial statements, pricing and rating changes, liquidity and other statistical information. Qualitative factors include judgments related to business strategies, economic impacts on the issuer, overall judgment related to estimates and industry factors as well as the Company's intent to sell the security, or if it is more likely than not that the Company would be required to sell a security before recovery of its amortized cost.

The Company's best estimate of future cash flows involves assumptions including, but not limited to, various performance indicators, such as historical and projected default and recovery rates, credit ratings, and current delinquency rates. These assumptions require the use of significant management judgement and include the probability of issuer default and estimates regarding timing and amount of expected recoveries, which may include estimating the underlying collateral value. In addition, projections of expected future fixed maturity security cash flows may change based upon new information regarding the performance of the issuer. Any credit losses are presented as an allowance rather than as a write-down on AFS fixed maturity securities management does not intend to sell or believes that it is more likely than not we will be required to sell.

The Company recorded no credit valuation losses on fixed maturity securities for the years ended December 31, 2024 and 2023.

For fixed maturity security investments that have unrealized losses as of December 31, 2024 and 2023, the gross unrealized losses and related fair values that have been in a continuous unrealized loss position by timeframe are as follows.


December 31, 2024	Less than 12 months				Greater than 12 months			Total
(In thousands, except for # of securities)	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
Fixed maturity securities:
U.S. Treasury securities	$	835	51	3	435	64	5	1,270	115	8

States and political subdivisions	42,583		1,484	63	147,534	32,058	177	190,117	33,542	240
Corporate:
Financial	29,258		756	53	154,448	32,529	192	183,706	33,285	245
Consumer	37,231		2,053	57	161,795	43,902	216	199,026	45,955	273
Utilities	16,750		687	47	79,488	22,083	142	96,238	22,770	189
Energy	11,654		438	29	52,537	9,521	65	64,191	9,959	94
Communications	9,973		250	11	48,462	9,660	60	58,435	9,910	71
All Other	25,208		1,237	38	68,756	15,131	87	93,964	16,368	125
Commercial mortgage-backed	100		—	1	89	5	1	189	5	2
Residential mortgage-backed	160		2	11	93,231	13,024	84	93,391	13,026	95
Asset-backed	10,330		243	14	14,741	563	16	25,071	806	30
Total fixed maturity securities	$	184,082	7,201	327	821,516	178,540	1,045	1,005,598	185,741	1,372


December 31, 2023	Less than 12 months				Greater than 12 months			Total
(In thousands, except for # of securities)	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
Fixed maturity securities:
U.S. Treasury securities	$	1,203	40	5	65	8	2	1,268	48	7
U.S. Government-sponsored enterprises	221		1	1	—	—	—	221	1	1
States and political subdivisions	19,540		357	35	164,264	28,775	192	183,804	29,132	227
Corporate:
Financial	12,584		383	19	176,521	30,872	217	189,105	31,255	236
Consumer	10,175		265	16	176,725	36,829	223	186,900	37,094	239
Utilities	3,596		66	20	85,169	20,187	137	88,765	20,253	157
Energy	3,291		57	1	59,392	7,992	76	62,683	8,049	77
Communications	5,784		153	5	56,108	8,739	69	61,892	8,892	74
All Other	2,080		32	5	85,757	12,407	100	87,837	12,439	105

Residential mortgage-backed	849		38	5	95,806	10,022	86	96,655	10,060	91
Asset-backed	4,757		111	8	32,764	1,405	40	37,521	1,516	48
Total fixed maturity securities	$	64,080	1,503	120	932,571	157,236	1,142	996,651	158,739	1,262

In each category of our fixed maturity securities described above, we do not intend to sell our investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases. At December 31, 2024 and 2023, 99.2% and 99.4%, respectively, of the fair value of our fixed maturity securities portfolio was rated investment grade. While the losses are currently unrealized, we continue to monitor all fixed maturity securities on an on-going basis as future information may become available which could result in an allowance being recorded.

The unrealized losses on fixed maturity securities detailed in the previous tables are due to noncredit-related factors, including widening credit spreads and rising interest rates since purchase, which have little bearing on the recoverability of our investments, hence they are not recognized as credit losses. The fair value is expected to recover as the securities approach maturity or if market yields for such investments decline.

The amortized cost and fair value of fixed maturity securities at December 31, 2024 by contractual maturity are shown in the table 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. Securities not due at a single maturity date have been reflected based upon final stated maturity.


(In thousands)	Amortized Cost		Fair Value
Fixed maturity securities:
Due in one year or less	$	20,091	19,999
Due after one year through five years	141,692		140,359
Due after five years through ten years	252,359		244,946
Due after ten years	987,159		815,657
Total fixed maturity securities	$	1,401,301	1,220,961

There were no investments that were non-income producing for the years ended December 31, 2024 or 2023.

Major categories of net investment income are summarized as follows:


Years ended December 31, (In thousands)	2024		2023
Gross investment income:
Fixed maturity securities	$	60,940	60,127
Equity securities	302		630
Policy loans	5,597		6,011
Other long-term investments	4,846		4,509
Other	834		576
Total investment income	72,519		71,853
Investment expenses	(2,807)		(2,599)
Net investment income	$	69,712	69,254

The Company uses the specific identification method of the individual security to determine the cost basis used in the calculation of realized gains and losses related to security sales.


Years ended December 31, (In thousands)	2024		2023
Fixed maturity securities:
Proceeds	$	15,161	29,883
Gross realized gains	$	131	53
Gross realized losses	$	225	602

Investment related gains and losses are as follows:


Years ended December 31, (In thousands)	2024		2023
Investment related gains (losses):
Sales, calls and maturities:
Fixed maturity securities	$	(699)	(756)
Equity securities	—		513


Other long-term investments	(788)		342
Investment related gains (losses)	(1,487)		99
Change in fair value of equity securities	164		(190)
Change in fair value of limited partnerships	(969)		912
Change in credit loss allowance	(334)		(61)




Net investment related gains (losses)	$	(2,626)	760