Investments

12 Months Ended

Dec. 31, 2024

Investments, Debt and Equity Securities [Abstract]

Investments

INVESTMENTS

Fair Value of Investments

The table that follows is a reconciliation of the amortized cost to fair value of investments in available-for-sale fixed maturity securities, presented on a consolidated basis as of December 31, 2024 and 2023.

December 31, 2024
Type of Investment	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Allowance for Credit Losses		Fair Value
AVAILABLE-FOR-SALE
US Treasury and government agencies	$	126,402	$	153	$	9,255	$	—	$	117,301
States, municipalities and political subdivisions	252,936		52		5,084		—		247,904
Corporate	728,662		1,354		40,633		—		689,382
Residential mortgage-backed	623,431		864		40,884		—		583,411
Commercial mortgage-backed	102,975		624		44		—		103,554
Other asset-backed	127,125		593		940		—		126,779
Total asset-backed	$	853,531	$	2,081	$	41,868	$	—	$	813,744
Total Available-for-Sale	$	1,961,531	$	3,640	$	96,840	$	—	$	1,868,331

December 31, 2023
Type of Investment	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Allowance for Credit Losses		Fair Value
AVAILABLE-FOR-SALE
US Treasury and government agencies	$	153,751	$	580	$	8,977	$	—	$	145,354
Foreign government	—		—		—		—		—
States, municipalities and political subdivisions	618,686		1,033		4,960		—		614,759
Corporate	671,618		3,327		44,413		1		630,532
Asset-backed:					—
Residential mortgage-backed	323,592		1,346		32,911		—		292,027
Commercial mortgage-backed	—		—		—		—		—
Other asset-backed	3,394		524		87		—		3,831
Total asset-backed	$	326,986	$	1,870	$	32,998	$	—	$	295,858
Total Available-for-Sale	$	1,771,041	$	6,810	$	91,348	$	1	$	1,686,503

Maturities

The amortized cost and fair value of available-for-sale fixed maturity securities at December 31, 2024, by contractual maturity, are shown in the following table. 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.

	Available-For-Sale
December 31, 2024	Amortized Cost		Fair Value
Due in one year or less	$	113,847	$	113,124
Due after one year through five years	301,844		296,271
Due after five years through 10 years	390,686		364,810
Due after 10 years	301,623		280,382
Asset-backed securities	853,531		813,744
	$	1,961,531	$	1,868,331

Allowance for Current Expected Credit Loss

We regularly review available-for-sale securities for declines in fair value that we determine to be credit-related. For our fixed maturity securities, we generally consider the following in determining whether our unrealized losses are credit-related, and if so, the magnitude of the credit loss:

•The extent to which the fair value is less than the amortized cost basis;

•The reasons for the decline in value (credit event, currency or interest-rate related, including general credit spread widening);

•The financial condition of and near-term prospects of the issuer (including issuer's current credit rating and the probability of full recovery of principal based upon the issuer's financial strength);

•Current delinquencies and nonperforming assets of underlying collateral;

•Expected future default rates;

•Collateral value by vintage, geographic region, industry concentration or property type;

•Subordination levels or other credit enhancements as of the balance sheet date as compared to origination; and

•Contractual and regulatory cash obligations and the issuer's plans to meet such obligations.

We recognize an allowance for current expected credit losses on fixed maturity securities in an unrealized loss position when it is determined. Using the factors discussed above, a component of the unrealized loss is related to credit. We recognize the expected credit losses in Net investment gains (losses) in the Consolidated Statements of Income, with an offset for the amount of non-credit impairments recognized in accumulated other comprehensive income. We do not measure a credit loss allowance on accrued investment income because we write-off accrued interest through Net investment income when collectability concerns arise.

We consider the following in determining whether write-offs of a security's amortized cost are necessary:

•We believe amounts related to securities have become uncollectible;

•We intend to sell a security; or

•It is more likely than not that we will be required to sell a security prior to recovery.

If we intend to sell a fixed maturity security or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis and the fair value of the security is below amortized cost, we will write down the security to current fair value, with a corresponding charge, net of any amount previously recognized as an allowance for expected credit loss, to Net investment gains (losses) in the Consolidated Statements of Income. If we do not intend to sell a fixed maturity security or it is more likely than not that we will not be required to sell a fixed maturity security before recovery of its amortized cost basis but believe amounts related to a security are uncollectible, an impairment is deemed to have occurred and the amortized cost is written down to the estimated recovery value with a corresponding charge, net of any amount previously recognized as an allowance for expected credit loss, to Net investment gains (losses) in the Consolidated Statements of Income. The remainder of unrealized loss is held in other comprehensive income in the Consolidated Statements of Stockholders' Equity.

The following table contains a rollforward of the allowance for credit losses for available-for-sale fixed maturity securities at December 31, 2024:

Beginning balance, January 1, 2024	$	1
Additions to the allowance for credit losses for which credit losses were not previously recorded	$	—
Reductions for securities sold during the period (realized)	—
Writeoffs charged against the allowance	—
Recoveries of amounts previously written off	(1)
Ending balance, December 31, 2024	$	—

Unrealized Gain and Loss

Changes in unrealized gains and losses on available-for-sale fixed maturity securities do not affect net income and earnings per share but do impact comprehensive income, stockholders' equity and book value per share. A summary of changes in net unrealized investment gain (loss), net of taxes, for 2024, 2023 and 2022, is as follows:

	2024		2023		2022
Change in net unrealized investment gain (loss)
Available-for-sale fixed maturities	$	(6,675)	$	27,091	$	(174,858)
Income tax effect	1,402		(5,689)		36,720
Total change in net unrealized investment gain (loss), net of tax	$	(5,273)	$	21,402	$	(138,138)

The following tables summarize our fixed maturity securities that were in an unrealized loss position reported on a consolidated basis at December 31, 2024 and 2023. The securities are presented by the length of time they have been continuously in an unrealized loss position.

December 31, 2024	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Loss		Number of Issues	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
AVAILABLE-FOR-SALE
US Treasury and government agencies	5	$	16,006	$	67	28	$	83,386	$	9,188	$	99,392	$	9,255
States, municipalities and political subdivisions	67	92,003		1,159		72	135,350		3,925		227,353		5,084
Corporate	73	203,142		4,474		154	370,211		36,159		573,352		40,633
Asset-backed:
Residential mortgage-backed	79	318,810		4,549		131	151,879		36,335		470,689		40,884
Commercial mortgage-backed	4	8,198		44		—	—		—		8,198		44
Other asset-backed	14	32,645		804		2	3,915		136		36,560		940
Total asset-backed	97	$	359,653	$	5,397	133	$	155,794	$	36,471	$	515,447	$	41,868
Total Available-for-Sale	242	$	670,804	$	11,097	387	$	744,741	$	85,743	$	1,415,544	$	96,840

December 31, 2023	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Loss		Number of Issues	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
AVAILABLE-FOR-SALE
US Treasury and government agencies	5	$	15,124	$	60	29	$	84,092	$	8,917	$	99,216	$	8,977
States, municipalities and political subdivisions	107	207,956		960		87	203,946		4,000		411,902		4,960
Corporate	16	44,381		451		203	483,644		43,962		528,025		44,413
Asset-backed:
Residential mortgage-backed	9	17,881		137		139	186,144		32,774		204,025		32,911
Other asset-backed	—	—		—		1	2,962		87		2,962		87
Total asset-backed	9	$	17,881	$	137	140	$	189,106	$	32,861	$	206,987	$	32,998
Total Available-for-Sale	137	$	285,342	$	1,608	459	$	960,788	$	89,740	$	1,246,130	$	91,348

We believe that any unrealized losses on our available-for-sale fixed maturity securities at December 31, 2024 are temporary based upon our current analysis of the issuers of the securities that we hold and current market conditions. We invest in high quality assets to provide protection from future credit quality issues. 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.

Included in investments at December 31, 2024 and 2023, are securities on deposit with, or available to, various regulatory authorities as required by law and collateral for reinsurance agreements with fair values of $110,335 and $106,297 respectively.

Mortgage Loans

The mortgage loan portfolio consists entirely of commercial mortgage loans. The following tables present the carrying value of our commercial mortgage loans at December 31, 2024 and 2023:

Commercial Mortgage Loans
Loan-to-value	December 31, 2024		December 31, 2023
Less than 65%	$	32,499	36,762
65%-75%	8,468		8,659
Total mortgage loans, gross of valuation allowance	$	40,967	$	45,421
Valuation allowance	(45)		(55)
Total mortgage loans, net of valuation allowance	$	40,922	$	45,366

Mortgage Loans by Region
	December 31, 2024				December 31, 2023
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
U.S. Region
East North Central	$	3,218	7.9	%	$	3,245	7.1	%
Southern Atlantic	17,021		41.4		17,217		37.9
East South Central	7,257		17.7		7,526		16.6
New England	6,588		16.1		6,588		14.5
Middle Atlantic	2,078		5.1		5,979		13.2
Mountain	1,992		4.9		1,992		4.4
West North Central	2,813		6.9		2,874		6.3
Total mortgage loans at amortized cost	$	40,967	100.0	%	$	45,421	100.0	%

Mortgage Loans by Property Type
	December 31, 2024				December 31, 2023
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
Property Type
Multifamily	$	8,362	20.4	%	$	8,507	18.7	%
Office	10,615		25.9		10,950		24.1
Industrial	9,912		24.2		9,985		22.0
Retail	10,000		24.4		10,000		22.0
Mixed use/Other	2,078		5.1		5,979		13.2
Total mortgage loans at amortized cost	$	40,967	100.0	%	$	45,421	100.0	%

Mortgage loans are evaluated on a quarterly basis for impairment on an individual basis through a monitoring process and review of key credit indicators, such as economic trends, delinquency rates, property valuations, occupancy and rental rates and loan-to-value ratios. A loan is considered impaired when the Company believes it will not collect the contractual principal and interest set forth in the contractual terms of the loan. An internal grade is assigned to each mortgage loan, with a grade of 1 being the highest and least likely for an impairment and the lowest rating of 7 being the most likely for an impairment. An allowance for mortgage loan losses is established on each loan recognizing a loss for amounts which we believe will not be collected according to the contractual terms of the respective loan agreement.

Amortized Cost Basis by Year of Origination and Credit Quality Indicator
	2023		2022		2020		2019		2018		Total
Risk Rating
1-2 internal grade	$	8,134	$	98	$	5,144	$	7,737	$	13,266	$	34,379
3-4 internal grade	—		—		—		—		6,588		6,588
5 internal grade	—		—		—		—		—		—
6 internal grade	—		—		—		—		—		—
7 internal grade	—		—		—		—		—		—
Total commercial mortgage loans	$	8,134	$	98	$	5,144	$	7,737	$	19,854	$	40,967
Current-period write-offs	—		—		—		—		—		—
Current-period recoveries	—		—		—		—		—		—
Current-period net write-offs	$	—	$	—	$	—	$	—	$	—	$	—

As of December 31, 2024, all loan receivables were current, with no delinquencies. As of December 31, 2024, the Company had an allowance for mortgage loan losses of $45, summarized in the following rollforward:

Beginning balance, January 1, 2024	$	55
Current-period provision for expected credit losses	—
Write-off charged against the allowance, if any	—
Recoveries of amounts previously written off, if any	(10)
Ending balance, December 31, 2024	$	45

Commercial mortgage loans carrying value excludes accrued interest of $157.

Net Investment Gains and Losses

Details of net investment gains (losses) reported on the accompanying Consolidated Statements of Income were as follows:

	2024		2023		2022
Fixed maturity, available-for-sale securities:
Net realized gains (losses) on fixed maturity, available-for-sale securities	$	(7,274)	$	(442)	$	(1,397)
Change in allowance for credit losses	1		1		(3)
Equity securities:
Net realized gains (losses) on equity securities sold	1,362		150		(1,767)
Unrealized gains (losses) on equity securities still held at reporting date	—		1,842		(12,802)
Net gains (losses) recognized on equity securities	1,362		1,992		(14,569)
Net realized gains (losses) on mortgage loans	10		(5)		109
Net realized gains (losses) on other long-term assets	472		(319)		(267)
Net realized gains (losses) on real estate	—		47		235
Total net investment gains (losses)	$	(5,429)	$	1,274	$	(15,892)

The proceeds and gross realized gains (losses) on the sale of available-for-sale fixed maturity securities for the years ended December 31, 2024, 2023 and 2022 are as follows:

	2024		2023		2022
Proceeds from sales	$	491,771	$	77,388	$	83,559
Gross realized gains	2,127		265		459
Gross realized losses	9,401		707		1,857

Net Investment Income

Net investment income for the years ended December 31, 2024, 2023 and 2022, is comprised of the following:

Years Ended December 31,	2024		2023		2022
Investment income:
Interest on fixed maturities	$	69,703	$	56,243	$	48,702
Dividends on equity securities	341		3,548		5,163
Income on other long-term investments
Investment income	6,492		2,833		4,742
Change in value (1)	1,447		(2,864)		(7,930)
Interest on mortgage loans	1,852		1,889		1,897
Interest on short-term investments	3,048		1,068		354
Interest on cash and cash equivalents	5,045		2,228		740
Other	5,006		4,139		780
Total investment income	$	92,934	$	69,084	$	54,448
Less investment expenses	10,948		9,478		9,516
Net investment income	$	81,986	$	59,606	$	44,932

(1)Represents the change in value of our interests in limited liability partnerships that are recorded on the equity method of accounting.

Funding Commitments

Pursuant to agreements related to our limited liability partnership investments, we are contractually committed through 2030 to make capital contributions upon request of the partnerships. The timing of these additional contributions is unknown and based upon the timing of when investments and agreements are executed or signed compared to when the actual commitments are funded or closed. Our remaining potential contractual obligation was $23.1 million at December 31, 2024.