Investments (Tables)

9 Months Ended

Sep. 30, 2017

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-sale Securities Reconciliation

The following table details the difference between cost or adjusted/amortized cost and estimated fair value, by major investment category, at September 30, 2017 and December 31, 2016:



	Cost or Adjusted/Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2017
U.S. government and agency securities	$	204,132	$	618	$	1,294	$	203,456
Foreign government	2,025		32		—		2,057
States, municipalities and political subdivisions	194,327		2,249		429		196,147
Public utilities	19,601		205		51		19,755
Corporate securities	277,481		2,692		580		279,593
Asset backed securities	16,711		11		8		16,714
Redeemable preferred stocks	1,097		29		63		1,063
Total fixed maturities	715,374		5,836		2,425		718,785
Mutual funds	28,949		858		—		29,807
Public utilities	1,342		300		—		1,642
Other common stocks	19,804		7,790		149		27,445
Non-redeemable preferred stocks	2,750		56		61		2,745
Total equity securities	52,845		9,004		210		61,639
Other long-term investments	7,835		322		—		8,157
Total investments	$	776,054	$	15,162	$	2,635	$	788,581

December 31, 2016
U.S. government and agency securities	$	151,656	$	189	$	1,893	$	149,952
Foreign government	2,031		30		—		2,061
States, municipalities and political subdivisions	170,636		1,027		2,551		169,112
Public utilities	7,687		116		73		7,730
Corporate securities	164,424		1,238		1,126		164,536
Redeemable preferred stocks	1,182		5		62		1,125
Total fixed maturities	497,616		2,605		5,705		494,516
Public utilities	1,343		164		—		1,507
Other common stocks	19,815		4,552		319		24,048
Non-redeemable preferred stocks	2,916		10		83		2,843
Total equity securities	24,074		4,726		402		28,398
Other long-term investments	5,493		267		27		5,733
Total investments	$	527,183	$	7,598	$	6,134	$	528,647

Schedule of Realized Gain (Loss)

The following table details our realized gains (losses) by major investment category for the three and nine month periods ended September 30, 2017 and 2016:



	2017					2016
	Gains (Losses)			Fair Value at Sale		Gains (Losses)			Fair Value at Sale
Three Months Ended September 30,
Fixed maturities	$	123		$	11,368	$	508		$	11,009
Equity securities	1			156		—			—
Total realized gains	124			11,524		508			11,009
Fixed maturities	(195		)	10,517		(396		)	7,635
Equity securities	—			—		(6		)	17
Total realized losses	(195		)	10,517		(402		)	7,652
Net realized investment gains (losses)	$	(71	)	$	22,041	$	106		$	18,661

Nine Months Ended September 30,
Fixed maturities	$	263		$	30,264	$	1,806		$	47,391
Equity securities	8			175		24			10,769
Total realized gains	271			30,439		1,830			58,160
Fixed maturities	(815		)	47,913		(1,170		)	20,663
Equity securities	(10		)	100		(182		)	17,025
Total realized losses	(825		)	48,013		(1,352		)	37,688
Net realized investment gains (losses)	$	(554	)	$	78,452	$	478		$	95,848

Investments Classified by Contractual Maturity Date

The table below summarizes our fixed maturities at September 30, 2017 by contractual maturity periods. Actual results may differ, as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturities of those obligations.



	September 30, 2017
	Cost or Amortized Cost		Percent of Total		Fair Value		Percent of Total
Due in one year or less	$	50,426	7.0	%	$	50,362	7.0	%
Due after one year through five years	332,620		46.5	%	334,135		46.5	%
Due after five years through ten years	192,314		26.9	%	194,266		27.0	%
Due after ten years	17,043		2.4	%	17,089		2.4	%
Asset and mortgage backed securities	122,971		17.2	%	122,933		17.1	%
Total	$	715,374	100.0	%	$	718,785	100.0	%

Investment Income

The following table summarizes our net investment income by major investment category:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Fixed maturities	$	4,111		$	2,251		$	10,696		$	6,693
Equity securities	375			259			940			726
Cash and cash equivalents	285			38			445			87
Other investments	124			110			385			266
Other assets	6			5			23			14
Investment income	4,901			2,663			12,489			7,786
Investment expenses	(213		)	(155		)	(482		)	(360		)
Net investment income	$	4,688		$	2,508		$	12,007		$	7,426

Schedule of Unrealized Loss on Investments

The following table presents an aging of our unrealized investment losses by investment class:



	Less Than Twelve Months					Twelve Months or More
	Number of Securities⁽¹⁾	Gross Unrealized Losses		Fair Value		Number of Securities⁽¹⁾	Gross Unrealized Losses		Fair Value
September 30, 2017
U.S. government and agency securities	147	$	741	$	81,333	57	$	553	$	36,900
States, municipalities and political subdivisions	62	274		50,719		23	155		16,625
Public utilities	9	24		3,966		4	27		625
Corporate securities	152	515		77,334		21	65		3,531
Asset backed securities	16	8		10,367		—	—		—
Redeemable preferred stocks	—	—		—		3	63		308
Total fixed maturities	386	1,562		223,719		108	863		57,989
Other common stocks	9	87		765		4	62		429
Non-redeemable preferred stocks	5	6		347		6	55		877
Total equity securities	14	93		1,112		10	117		1,306
Total	400	$	1,655	$	224,831	118	$	980	$	59,295

December 31, 2016
U.S. government and agency securities	186	$	1,893	$	111,216	—	$	—	$	—
States, municipalities and political subdivisions	201	2,551		136,360		—	—		—
Public utilities	8	73		2,222		—	—		—
Corporate securities	215	1,100		88,605		1	26		1,021
Redeemable preferred stocks	7	62		764		—	—		—
Total fixed maturities	617	5,679		339,167		1	26		1,021
Other common stocks	16	140		2,450		17	179		1,732
Non-redeemable preferred stocks	12	52		1,830		7	31		369
Total equity securities	28	192		4,280		24	210		2,101
Other long-term investments	1	27		987		—	—		—
Total	646	$	5,898	$	344,434	25	$	236	$	3,122

⁽¹⁾ This amount represents the actual number of discrete securities, not the number of shares or units of those securities. The numbers are not presented in thousands.

Schedule of Fair Value of Financial Instruments Measured on a Recurring Basis

The following table presents the fair value of our financial instruments measured on a recurring basis by level at September 30, 2017 and December 31, 2016:



	Total		Level 1		Level 2		Level 3
September 30, 2017
U.S. government and agency securities	$	203,456	$	—	$	203,456	$	—
Foreign government	2,057		—		2,057		—
States, municipalities and political subdivisions	196,147		—		196,147		—
Public utilities	19,755		—		19,755		—
Corporate securities	279,593		—		279,593		—
Asset backed securities	16,714		—		16,714		—
Redeemable preferred stocks	1,063		1,063		—		—
Total fixed maturities	718,785		1,063		717,722		—
Mutual funds	29,807		29,807		—		—
Public utilities	1,642		1,642		—		—
Other common stocks	27,445		27,445		—		—
Non-redeemable preferred stocks	2,745		2,745		—		—
Total equity securities	61,639		61,639		—		—
Other long-term investments	8,157		300		7,173		684
Total investments	$	788,581	$	63,002	$	724,895	$	684

December 31, 2016
U.S. government and agency securities	$	149,952	$	—	$	149,952	$	—
Foreign government	2,061		—		2,061		—
States, municipalities and political subdivisions	169,112		—		169,112		—
Public utilities	7,730		—		7,730		—
Corporate securities	164,536		—		164,536		—
Redeemable preferred stocks	1,125		1,125		—		—
Total fixed maturities	494,516		1,125		493,391		—
Public utilities	1,507		1,507		—		—
Other common stocks	24,048		24,048		—		—
Non-redeemable preferred stocks	2,843		2,843		—		—
Total equity securities	28,398		28,398		—		—
Other long-term investments	5,733		300		3,735		1,698
Total investments	$	528,647	$	29,823	$	497,126	$	1,698

Schedule of Fair Value of Financial Instruments with Unobservable Inputs

The table below presents the rollforward of our Level 3 investments held at fair value during the nine months ended September 30, 2017:



	Other Investments
December 31, 2016	$	1,698
Transfers in	—
Transfers out	(990		)
Partnership income	35
Return of capital	(141		)
Unrealized gains in accumulated other comprehensive income	82
September 30, 2017	$	684

Schedule of Investments in Limited Partnerships

The information presented in the table below is as of September 30, 2017.



	Initial Investment		Book Value		Unrealized Gain		Unrealized Loss		Fair Value
DCR Mortgage Partners VI, L.P.	$	301	$	362	$	322	$	—	$	684
Total Level 3 limited partnership investments	301		362		322		—		684
DCR Mortgage Partners VII, L.P.	4,000		4,056		—		—		4,056
Kayne Senior Credit Fund II, L.P.	1,684		1,444		—		—		1,444
Kayne Senior Credit Fund III, L.P.	1,198		1,198		—		—		1,198
Blackstone Alternative Solutions 2015 Trust	505		475		—		—		475
Total Level 2 limited partnership investments	7,387		7,173		—		—		7,173
Total limited partnership investments	$	7,688	$	7,535	$	322	$	—	$	7,857
Other short-term investments	300		300		—		—		300
Total other investments	$	7,988	$	7,835	$	322	$	—	$	8,157

Quantitative Impact of Unobservable Inputs

The DCR VI investment was valued using a duration of 60 months for both periods presented below.



	Fair Value			Valuation		Rate
	Impact			Technique	Unobservable Input	Adjustment
September 30, 2017
DCR VI	$	(44	)	Discounted cash flow	Discount rate based on D&B paydex scale	2.35%

December 31, 2016
DCR VI	$	(56	)	Discounted cash flow	Discount rate based on D&B paydex scale	2.35%
RCH	$	(341	)	Discounted cash flow	Discount rate based on D&B paydex scale	7.35%