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Investments (Tables)
 9 Months Ended
Sep. 30, 2019
Investments Debt And Equity Securities [Abstract]  
Schedule of Amortized Cost and Estimated Fair Value of Investments

The amortized cost and estimated fair value of investments were as follows as of September 30, 2019 and December 31, 2018:

 

(Dollars in thousands)

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Estimated

Fair Value

 

 

Other than

temporary

impairments

recognized

in AOCI (1)

 

As of September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury and agency obligations

 

$

158,914

 

 

$

6,624

 

 

$

(56

)

 

$

165,482

 

 

$

—

 

Obligations of states and political subdivisions

 

 

54,905

 

 

 

1,146

 

 

 

(19

)

 

 

56,032

 

 

 

—

 

Mortgage-backed securities

 

 

202,699

 

 

 

3,855

 

 

 

(167

)

 

 

206,387

 

 

 

—

 

Asset-backed securities

 

 

182,502

 

 

 

1,267

 

 

 

(407

)

 

 

183,362

 

 

 

—

 

Commercial mortgage-backed securities

 

 

238,637

 

 

 

6,529

 

 

 

(313

)

 

 

244,853

 

 

 

—

 

Corporate bonds

 

 

265,244

 

 

 

9,613

 

 

 

(119

)

 

 

274,738

 

 

 

—

 

Foreign corporate bonds

 

 

101,083

 

 

 

2,510

 

 

 

(12

)

 

 

103,581

 

 

 

—

 

Total fixed maturities

 

 

1,203,984

 

 

 

31,544

 

 

 

(1,093

)

 

 

1,234,435

 

 

 

—

 

Equity Securities

 

 

262,367

 

 

 

—

 

 

 

—

 

 

 

262,367

 

 

 

—

 

Other invested assets

 

 

40,052

 

 

 

—

 

 

 

—

 

 

 

40,052

 

 

 

—

 

Total

 

$

1,506,403

 

 

$

31,544

 

 

$

(1,093

)

 

$

1,536,854

 

 

$

-

 

 

(1)

Represents the total amount of other than temporary impairment losses relating to factors other than credit losses recognized in accumulated other comprehensive income (“AOCI”).

 

(Dollars in thousands)

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Estimated

Fair Value

 

 

Other than

temporary

impairments

recognized

in AOCI (1)

 

As of December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury and agency obligations

 

$

79,766

 

 

$

252

 

 

$

(1,163

)

 

$

78,855

 

 

$

—

 

Obligations of states and political subdivisions

 

 

95,629

 

 

 

322

 

 

 

(338

)

 

 

95,613

 

 

 

—

 

Mortgage-backed securities

 

 

119,327

 

 

 

313

 

 

 

(1,786

)

 

 

117,854

 

 

 

—

 

Asset-backed securities

 

 

185,430

 

 

 

336

 

 

 

(2,012

)

 

 

183,754

 

 

 

—

 

Commercial mortgage-backed securities

 

 

206,236

 

 

 

338

 

 

 

(3,852

)

 

 

202,722

 

 

 

—

 

Corporate bonds

 

 

452,692

 

 

 

243

 

 

 

(12,080

)

 

 

440,855

 

 

 

—

 

Foreign corporate bonds

 

 

118,750

 

 

 

44

 

 

 

(3,292

)

 

 

115,502

 

 

 

—

 

Total fixed maturities

 

 

1,257,830

 

 

 

1,848

 

 

 

(24,523

)

 

 

1,235,155

 

 

 

—

 

Common stock

 

 

124,747

 

 

 

—

 

 

 

—

 

 

 

124,747

 

 

 

—

 

Other invested assets

 

 

50,753

 

 

 

—

 

 

 

—

 

 

 

50,753

 

 

 

—

 

Total

 

$

1,433,330

 

 

$

1,848

 

 

$

(24,523

)

 

$

1,410,655

 

 

$

—

 

 

(1)

Represents the total amount of other than temporary impairment losses relating to factors other than credit losses recognized in accumulated other comprehensive income (“AOCI”).
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 September 30, 2019, 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

 

$

48,565

 

 

$

48,619

 

Due in one year through five years

 

 

336,617

 

 

 

343,715

 

Due in five years through ten years

 

 

129,412

 

 

 

135,186

 

Due in ten years through fifteen years

 

 

15,162

 

 

 

16,254

 

Due after fifteen years

 

 

50,390

 

 

 

56,059

 

Mortgage-backed securities

 

 

202,699

 

 

 

206,387

 

Asset-backed securities

 

 

182,502

 

 

 

183,362

 

Commercial mortgage-backed securities

 

 

238,637

 

 

 

244,853

 

Total

 

$

1,203,984

 

 

$

1,234,435

 
Summary of Securities With Gross Unrealized Losses

The following table contains an analysis of the Company’s fixed income securities with gross unrealized losses, categorized by the period that the securities were in a continuous loss position as of September 30, 2019.    

 

 

 

Less than 12 months

 

 

12 months or longer (1)

 

 

Total

 

(Dollars in thousands)

 

Fair Value

 

 

Gross

Unrealized

Losses

 

 

Fair Value

 

 

Gross

Unrealized

Losses

 

 

Fair Value

 

 

Gross

Unrealized

Losses

 

Fixed maturities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury and agency obligations

 

$

4,108

 

 

$

(23

)

 

$

13,006

 

 

$

(33

)

 

$

17,114

 

 

$

(56

)

Obligations of states and political subdivisions

 

 

8,947

 

 

 

(19

)

 

 

—

 

 

 

—

 

 

 

8,947

 

 

 

(19

)

Mortgage-backed securities

 

 

16,537

 

 

 

(141

)

 

 

3,331

 

 

 

(26

)

 

 

19,868

 

 

 

(167

)

Asset-backed securities

 

 

27,336

 

 

 

(110

)

 

 

34,135

 

 

 

(297

)

 

 

61,471

 

 

 

(407

)

Commercial mortgage-backed securities

 

 

23,225

 

 

 

(114

)

 

 

25,944

 

 

 

(199

)

 

 

49,169

 

 

 

(313

)

Corporate bonds

 

 

5,139

 

 

 

(50

)

 

 

8,616

 

 

 

(69

)

 

 

13,755

 

 

 

(119

)

Foreign corporate bonds

 

 

203

 

 

 

(1

)

 

 

7,750

 

 

 

(11

)

 

 

7,953

 

 

 

(12

)

Total fixed maturities

 

$

85,495

 

 

$

(458

)

 

$

92,782

 

 

$

(635

)

 

$

178,277

 

 

$

(1,093

)

 

(1)

Fixed maturities in a gross unrealized loss position for twelve months or longer are primarily comprised of non-credit losses on investment grade securities where management does not intend to sell, and it is more likely than not that the Company will not be forced to sell the security before recovery.  The Company has analyzed these securities and has determined that they are not other than temporarily impaired.

The following table contains an analysis of the Company’s fixed income securities with gross unrealized losses, categorized by the period that the securities were in a continuous loss position as of December 31, 2018:  

 

 

 

Less than 12 months

 

 

12 months or longer (1)

 

 

Total

 

(Dollars in thousands)

 

Fair Value

 

 

Gross

Unrealized

Losses

 

 

Fair Value

 

 

Gross

Unrealized

Losses

 

 

Fair Value

 

 

Gross

Unrealized

Losses

 

Fixed maturities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury and agency obligations

 

$

—

 

 

$

—

 

 

$

67,185

 

 

$

(1,163

)

 

$

67,185

 

 

$

(1,163

)

Obligations of states and political subdivisions

 

 

22,802

 

 

 

(57

)

 

 

28,179

 

 

 

(281

)

 

 

50,981

 

 

 

(338

)

Mortgage-backed securities

 

 

36,858

 

 

 

(408

)

 

 

60,838

 

 

 

(1,378

)

 

 

97,696

 

 

 

(1,786

)

Asset-backed securities

 

 

96,085

 

 

 

(1,342

)

 

 

50,506

 

 

 

(670

)

 

 

146,591

 

 

 

(2,012

)

Commercial mortgage-backed securities

 

 

44,596

 

 

 

(878

)

 

 

127,557

 

 

 

(2,974

)

 

 

172,153

 

 

 

(3,852

)

Corporate bonds

 

 

285,997

 

 

 

(8,791

)

 

 

115,052

 

 

 

(3,289

)

 

 

401,049

 

 

 

(12,080

)

Foreign corporate bonds

 

 

56,543

 

 

 

(1,795

)

 

 

47,494

 

 

 

(1,497

)

 

 

104,037

 

 

 

(3,292

)

Total fixed maturities

 

$

542,881

 

 

$

(13,271

)

 

$

496,811

 

 

$

(11,252

)

 

$

1,039,692

 

 

$

(24,523

)

 

(1)

Fixed maturities in a gross unrealized loss position for twelve months or longer are primarily comprised of non-credit losses on investment grade securities where management does not intend to sell, and it is more likely than not that the Company will not be forced to sell the security before recovery.  The Company has analyzed these securities and has determined that they are not other than temporarily impaired.

Schedule of Other Than Temporary Impairments on Investments

The Company recorded the following other than temporary impairments (“OTTI”) on its investment portfolio for the quarters and nine months ended September 30, 2019 and 2018:

 

 

 

Quarters Ended September 30,

 

 

Nine Months Ended September 30,

 

(Dollars in thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Fixed maturities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTTI losses, gross

 

$

—

 

 

$

(24

)

 

$

(1,897

)

 

$

(395

)

Portion of loss recognized in other comprehensive income (pre-tax)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Net impairment losses on fixed maturities recognized in earnings

 

$

—

 

 

$

(24

)

 

$

(1,897

)

 

$

(395

)
Schedule of Credit Losses Recognized in Earnings

The following table is an analysis of the credit losses recognized in earnings on fixed maturities held by the Company for the   quarters and nine months ended September 30, 2019 and 2018 for which a portion of the OTTI loss was recognized in other comprehensive income.

 

 

 

Quarters Ended September 30,

 

 

Nine Months Ended September 30,

 

(Dollars in thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Balance at beginning of period

 

$

13

 

 

$

13

 

 

$

13

 

 

$

13

 

Additions where no OTTI was previously recorded

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Additions where an OTTI was previously recorded

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Reductions for securities for which the company intends to sell or more likely than not will be required to sell before recovery

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Reductions reflecting increases in expected cashflows to be collected

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Reductions for securities sold during the period

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Balance at end of period

 

$

13

 

 

$

13

 

 

$

13

 

 

$

13

 
Schedule of Accumulated Other Comprehensive Income, Net of Tax

Accumulated other comprehensive income, net of tax, as of September 30, 2019 and December 31, 2018 was as follows:

 

(Dollars in thousands)

 

September 30, 2019

 

 

December 31, 2018

 

Net unrealized gains (losses) from:

 

 

 

 

 

 

 

 

Fixed maturities

 

$

30,451

 

 

$

(22,675

)

Foreign currency fluctuations

 

 

(1,003

)

 

 

(1,334

)

Deferred taxes

 

 

(4,134

)

 

 

2,778

 

Accumulated other comprehensive income, net of tax

 

$

25,314

 

 

$

(21,231

)
Changes In Accumulated Other Comprehensive Income

The following tables present the changes in accumulated other comprehensive income, net of tax, by component for the quarters and nine months ended September 30, 2019 and 2018:

 

Quarter Ended September 30, 2019

(Dollars In Thousands)

 

Unrealized Gains and Losses on Available for Sale Securities

 

 

Foreign

Currency

Items

 

 

Accumulated Other Comprehensive Income

 

Beginning balance, net of tax

 

$

17,745

 

 

$

(1,203

)

 

$

16,542

 

Other comprehensive income before reclassification, before tax

 

 

10,767

 

 

 

200

 

 

 

10,967

 

Amounts reclassified from accumulated other comprehensive (income), before tax

 

 

(946

)

 

 

—

 

 

 

(946

)

Other comprehensive income, before tax

 

 

9,821

 

 

 

200

 

 

 

10,021

 

Income tax (expense)

 

 

(1,249

)

 

 

—

 

 

 

(1,249

)

Ending balance, net of tax

 

$

26,317

 

 

$

(1,003

)

 

$

25,314

 

 

Quarter Ended September 30, 2018

(Dollars In Thousands)

 

Unrealized Gains and Losses on Available for Sale Securities

 

 

Foreign

Currency

Items

 

 

Accumulated Other Comprehensive Income

 

Beginning balance, net of tax

 

$

(21,926

)

 

$

(549

)

 

$

(22,475

)

Other comprehensive (loss) before reclassification, before tax

 

 

(1,945

)

 

 

(454

)

 

 

(2,399

)

Amounts reclassified from accumulated other comprehensive loss, before tax

 

 

835

 

 

 

—

 

 

 

835

 

Other comprehensive (loss), before tax

 

 

(1,110

)

 

 

(454

)

 

 

(1,564

)

Income tax benefit

 

 

210

 

 

 

—

 

 

 

210

 

Ending balance, net of tax

 

$

(22,826

)

 

$

(1,003

)

 

$

(23,829

)

 

Nine Months Ended September 30, 2019

(Dollars In Thousands)

 

Unrealized Gains and Losses on Available for Sale Securities

 

 

Foreign

Currency

Items

 

 

Accumulated Other Comprehensive Income

 

Beginning balance, net of tax

 

$

(19,897

)

 

$

(1,334

)

 

$

(21,231

)

Other comprehensive income before reclassification, before tax

 

 

55,960

 

 

 

331

 

 

 

56,291

 

Amounts reclassified from accumulated other comprehensive (income), before tax

 

 

(2,834

)

 

 

—

 

 

 

(2,834

)

Other comprehensive income, before tax

 

 

53,126

 

 

 

331

 

 

 

53,457

 

Income tax (expense)

 

 

(6,912

)

 

 

—

 

 

 

(6,912

)

Ending balance, net of tax

 

$

26,317

 

 

$

(1,003

)

 

$

25,314

 

 

 

 

Nine Months Ended September 30, 2018

(Dollars In Thousands)

 

Unrealized Gains and Losses on Available for Sale Securities

 

 

Foreign

Currency

Items

 

 

Accumulated Other Comprehensive Income

 

Beginning balance, net of tax

 

$

8,272

 

 

$

711

 

 

$

8,983

 

Other comprehensive (loss) before reclassification, before tax

 

 

(25,928

)

 

 

(1,554

)

 

 

(27,482

)

Amounts reclassified from accumulated other comprehensive loss, before tax

 

 

1,660

 

 

 

—

 

 

 

1,660

 

Other comprehensive (loss), before tax

 

 

(24,268

)

 

 

(1,554

)

 

 

(25,822

)

Income tax benefit

 

 

3,038

 

 

 

—

 

 

 

3,038

 

Cumulative effect adjustment, net of tax

 

 

(9,868

)

 

 

(160

)

 

 

(10,028

)

Ending balance, net of tax

 

$

(22,826

)

 

$

(1,003

)

 

$

(23,829

)
Reclassifications Out of Accumulated Other Comprehensive Income

 

The reclassifications out of accumulated other comprehensive income for the quarters and nine months ended September 30, 2019 and 2018 were as follows:

 

(Dollars in thousands)

 

 

 

Amounts Reclassified from

Accumulated Other

Comprehensive Income

 

 

 

 

 

Quarters Ended September 30,

 

Details about Accumulated Other

Comprehensive Income Components

 

Affected Line Item in the Consolidated

Statements of Operations

 

2019

 

 

2018

 

Unrealized gains and losses on available for sale securities

 

Other net realized investment (gains) losses

 

$

(946

)

 

$

811

 

 

 

Other than temporary impairment losses on investments

 

 

—

 

 

 

24

 

 

 

Total before tax

 

 

(946

)

 

 

835

 

 

 

Income tax expense (benefit)

 

 

99

 

 

 

(118

)

 

 

Unrealized gains and losses on available for sale securities, net of tax

 

 

(847

)

 

 

717

 

Foreign currency items

 

Other net realized investment (gains) losses

 

 

—

 

 

 

—

 

 

 

Income tax expense

 

 

—

 

 

 

—

 

 

 

Foreign currency items, net of tax

 

 

—

 

 

 

—

 

Total reclassifications

 

Total reclassifications, net of tax

 

$

(847

)

 

$

717

 

 

 

 

 

 

Amounts Reclassified from

Accumulated Other

Comprehensive Income

 

(Dollars in thousands)

 

 

 

Nine Months Ended September 30,

 

Details about Accumulated Other

Comprehensive Income Components

 

Affected Line Item in the Consolidated

Statements of Operations

 

2019

 

 

2018

 

Unrealized gains and losses on available for sale securities

 

Other net realized investment (gains) losses

 

$

(4,731

)

 

$

1,265

 

 

 

Other than temporary impairment losses on investments

 

 

1,897

 

 

 

395

 

 

 

Total before tax

 

 

(2,834

)

 

 

1,660

 

 

 

Income tax expense (benefit)

 

 

169

 

 

 

(257

)

 

 

Unrealized gains and losses on available for sale securities, net of tax

 

 

(2,665

)

 

 

1,403

 

Foreign currency items

 

Other net realized investment (gains) losses

 

 

—

 

 

 

—

 

 

 

Income tax expense

 

 

—

 

 

 

—

 

 

 

Foreign currency items, net of tax

 

 

—

 

 

 

—

 

Total reclassifications

 

Total reclassifications, net of tax

 

$

(2,665

)

 

$

1,403

 

 
Components of Net Realized Investment Gains (Losses)

The components of net realized investment gains (losses) for the quarters and nine months ended September 30, 2019 and 2018 were as follows:

 

 

 

Quarters Ended September 30,

 

 

Nine Months Ended September 30,

 

(Dollars in thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Fixed maturities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross realized gains

 

$

1,054

 

 

$

329

 

 

$

5,765

 

 

$

373

 

Gross realized losses

 

 

(108

)

 

 

(1,164

)

 

 

(2,931

)

 

 

(2,033

)

Net realized gains (losses)

 

 

946

 

 

 

(835

)

 

 

2,834

 

 

 

(1,660

)

Equity Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross realized gains

 

 

1,681

 

 

 

5,789

 

 

 

26,936

 

 

 

12,116

 

Gross realized losses

 

 

(3,146

)

 

 

(946

)

 

 

(9,076

)

 

 

(9,582

)

Net realized gains (losses)

 

 

(1,465

)

 

 

4,843

 

 

 

17,860

 

 

 

2,534

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross realized gains

 

 

341

 

 

 

1,690

 

 

 

341

 

 

 

8,457

 

Gross realized losses

 

 

(2,512

)

 

 

(379

)

 

 

(9,745

)

 

 

(1,498

)

Net realized gains (losses) (1)

 

 

(2,171

)

 

 

1,311

 

 

 

(9,404

)

 

 

6,959

 

Total net realized investment gains (losses)

 

$

(2,690

)

 

$

5,319

 

 

$

11,290

 

 

$

7,833

 

 

(1)

Includes periodic net interest settlements related to the derivatives of $0.3 million and $0.4 million for the quarters ended September 30, 2019 and 2018, respectively, and $0.7 million and $1.5 million for the nine months ended September 30, 2019 and 2018, respectively.
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 September 30, 2019 and 2018:

 

 

 

Quarters Ended September 30,

 

 

Nine Months Ended September 30,

 

(Dollars in thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

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

 

$

(1,465

)

 

$

4,843

 

 

$

17,860

 

 

$

2,534

 

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

 

 

(614

)

 

 

2,096

 

 

 

9,836

 

 

 

3,958

 

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

 

$

(851

)

 

$

2,747

 

 

$

8,024

 

 

$

(1,424

)
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 nine months ended September 30, 2019 and 2018 were as follows:

 

 

 

Nine Months Ended September 30,

 

(Dollars in thousands)

 

2019

 

 

2018

 

Fixed maturities

 

$

642,049

 

 

$

229,362

 

Equity securities

 

 

206,212

 

 

 

28,141

 
Schedule of Investment Income

The sources of net investment income for the quarters and nine months ended September 30, 2019 and 2018 were as follows:

 

 

 

Quarters Ended September 30,

 

 

Nine Months Ended September 30,

 

(Dollars in thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Fixed maturities

 

$

8,806

 

 

$

9,520

 

 

$

27,692

 

 

$

27,236

 

Equity securities

 

 

1,704

 

 

 

1,006

 

 

 

4,384

 

 

 

3,010

 

Cash and cash equivalents

 

 

372

 

 

 

285

 

 

 

1,242

 

 

 

814

 

Other invested assets

 

 

1,280

 

 

 

1,631

 

 

 

1,394

 

 

 

5,194

 

Total investment income

 

 

12,162

 

 

 

12,442

 

 

 

34,712

 

 

 

36,254

 

Investment expense

 

 

(814

)

 

 

(692

)

 

 

(2,319

)

 

 

(2,146

)

Net investment income

 

$

11,348

 

 

$

11,750

 

 

$

32,393

 

 

$

34,108

 
Schedule of Total Investment Return

The Company’s total investment return on a pre-tax basis for the quarters and nine months ended September 30, 2019 and 2018 were as follows:

 

 

 

Quarters Ended September 30,

 

 

Nine Months Ended September 30,

 

(Dollars in thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net investment income

 

$

11,348

 

 

$

11,750

 

 

$

32,393

 

 

$

34,108

 

Net realized investment gains (losses)

 

 

(2,690

)

 

 

5,319

 

 

 

11,290

 

 

 

7,833

 

Change in unrealized holding gains and losses

 

 

10,021

 

 

 

(1,564

)

 

 

53,457

 

 

 

(25,822

)

Net realized and unrealized investment returns

 

 

7,331

 

 

 

3,755

 

 

 

64,747

 

 

 

(17,989

)

Total investment return

 

$

18,679

 

 

$

15,505

 

 

$

97,140

 

 

$

16,119

 

Total investment return % (1)

 

 

1.2

%

 

 

1.0

%

 

 

6.2

%

 

 

1.1

%

Average investment portfolio (2)

 

$

1,585,165

 

 

$

1,541,975

 

 

$

1,562,177

 

 

$

1,533,825

 

 

(1)

Not annualized.

(2)

Average of total cash and invested assets, net of receivable/payable for securities purchased and sold, as of the beginning and end of the period.
Summary of Insurance Enhanced Municipal Bonds Backed by Financial Guarantors

A summary of the Company’s insurance enhanced municipal bonds that are backed by financial guarantors, including the pre-refunded bonds that are escrowed in U.S. government obligations, as of September 30, 2019, is as follows:

 

(Dollars in thousands) Financial Guarantor

 

Total

 

 

Pre-refunded Securities

 

 

Government

Guaranteed

Securities

 

 

Exposure Net of

Pre-refunded & Government Guaranteed Securities

 

Municipal Bond Insurance Association

 

$

479

 

 

$

—

 

 

$

—

 

 

$

479

 

    Total backed by financial guarantors

 

$

479

 

 

$

—

 

 

$

—

 

 

$

479

 
Summary of Estimated Fair Values of Bonds Held on Deposit The fair values were as follows as of September 30, 2019 and December 31, 2018:

 

 

 

Estimated Fair Value

 

(Dollars in thousands)

 

September 30, 2019

 

 

December 31, 2018

 

On deposit with governmental authorities

 

$

26,500

 

 

$

25,855

 

Intercompany trusts held for the benefit of U.S. policyholders

 

 

192,269

 

 

 

209,028

 

Held in trust pursuant to third party requirements

 

 

123,811

 

 

 

98,417

 

Letter of credit held for third party requirements

 

 

1,458

 

 

 

2,317

 

Securities held as collateral

 

 

90,004

 

 

 

83,214

 

Total

 

$

434,042

 

 

$

418,831