Investments

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

The following tables set forth the amortized cost and the fair value by investment category at March 31, 2023 and December 31, 2022:


($ in thousands)	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
March 31, 2023
Fixed maturity securities, available-for-sale:
U.S. government securities	$	46,347	$	35	$	(1,464)	$	—	$	44,918
Corporate securities and miscellaneous	278,980		1,571		(18,117)		—		262,434
Municipal securities	73,232		152		(6,045)		—		67,339
Residential mortgage-backed securities	146,830		458		(13,398)		—		133,890
Commercial mortgage-backed securities	55,183		228		(3,229)		—		52,182
Asset-backed securities	117,823		213		(5,662)		—		112,374
Total fixed maturity securities, available-for-sale	$	718,395	$	2,657	$	(47,915)	$	—	$	673,137
Fixed maturity securities, held-to-maturity:
Asset-backed securities	$	48,537	$	—	$	(3,724)	$	(321)	$	44,492
Total fixed maturity securities, held-to-maturity	$	48,537	$	—	$	(3,724)	$	(321)	$	44,492


($ in thousands)	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Loss		Fair Value
December 31, 2022
Fixed maturity securities, available-for-sale:
U.S. government securities	$	50,416	$	1	$	(1,876)	$	48,541
Corporate securities and miscellaneous	255,116		767		(20,754)		235,129
Municipal securities	65,836		24		(8,133)		57,727
Residential mortgage-backed securities	134,844		218		(15,206)		119,856
Commercial mortgage-backed securities	40,129		50		(3,684)		36,495
Asset-backed securities	116,275		91		(6,542)		109,824
Total fixed maturity securities, available-for-sale	$	662,616	$	1,151	$	(56,195)	$	607,572
Fixed maturity securities, held-to-maturity:
Asset-backed securities	$	52,467	$	—	$	(5,696)	$	46,771
Total fixed maturity securities, held-to-maturity	$	52,467	$	—	$	(5,696)	$	46,771

The following table sets forth the amortized cost and fair value of available-for-sale fixed maturity securities by contractual maturity at March 31, 2023:



($ in thousands)	Amortized Cost		Fair Value
Due in less than one year	$	27,656	$	26,956
Due after one year through five years	214,722		205,835
Due after five years through ten years	108,566		99,254
Due after ten years	47,615		42,646
Mortgage-backed securities	202,013		186,072
Asset-backed securities	117,823		112,374
Total	$	718,395	$	673,137

Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Also, changing interest rates, tax considerations or other factors may result in portfolio sales prior to maturity.

The Company’s fixed maturity securities, held-to-maturity, at March 31, 2023 consisted entirely of asset backed securities that were not due at a single maturity date.

The following tables set forth the gross unrealized losses and the corresponding fair values of investments, aggregated by length of time that individual securities had been in a continuous unrealized loss position as of March 31, 2023 and December 31, 2022:


	Less than 12 Months				12 Months or More				Total
($ in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
March 31, 2023
Fixed maturity securities, available-for-sale:
U.S. government securities	$	19,722	$	(443)	$	18,777	$	(1,021)	$	38,499	$	(1,464)
Corporate securities and miscellaneous	107,567		(4,059)		98,368		(14,058)		205,935		(18,117)
Municipal securities	35,247		(1,764)		22,752		(4,281)		57,999		(6,045)
Residential mortgage-backed securities	41,507		(1,919)		65,869		(11,479)		107,376		(13,398)
Commercial mortgage-backed securities	28,658		(869)		11,393		(2,360)		40,051		(3,229)
Asset-backed securities	62,813		(2,636)		35,681		(3,026)		98,494		(5,662)
Total fixed maturity securities, available-for-sale	295,514		(11,690)		252,840		(36,225)		548,354		(47,915)
Fixed maturity securities, held-to-maturity:
Asset-backed securities	1,624		(19)		42,868		(3,705)		44,492		(3,724)
Total fixed maturity securities, held-to-maturity:	1,624		(19)		42,868		(3,705)		44,492		(3,724)
Total	$	297,138	$	(11,709)	$	295,708	$	(39,930)	$	592,846	$	(51,639)


	Less than 12 Months				12 Months or More				Total
($ in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
December 31, 2022
Fixed maturity securities, available-for-sale:
U.S. government securities	$	28,966	$	(603)	$	18,577	$	(1,273)	$	47,543	$	(1,876)
Corporate securities and miscellaneous	171,506		(16,063)		34,283		(4,691)		205,789		(20,754)
Municipal securities	51,701		(7,236)		3,689		(897)		55,390		(8,133)
Residential mortgage-backed securities	56,246		(4,152)		52,778		(11,054)		109,024		(15,206)
Commercial mortgage-backed securities	25,836		(1,488)		8,583		(2,196)		34,419		(3,684)
Asset-backed securities	74,684		(3,351)		25,820		(3,191)		100,504		(6,542)
Total fixed maturity securities, available-for-sale	408,939		(32,893)		143,730		(23,302)		552,669		(56,195)
Fixed maturity securities, held-to-maturity:
Asset-backed securities	46,771		(5,696)		—		—		46,771		(5,696)
Total fixed maturity securities, held-to-maturity:	46,771		(5,696)		—		—		46,771		(5,696)
Total	$	455,710	$	(38,589)	$	143,730	$	(23,302)	$	599,440	$	(61,891)

The Company regularly monitors its available-for-sale fixed maturity securities that have fair values less than cost or amortized cost for signs of impairment, an assessment that requires significant management judgment regarding the evidence known. Such judgments could change in the future as more information becomes known, which could negatively impact the amounts reported. Among the factors that management considers for fixed maturity securities are the financial condition of the issuer including receipt of scheduled principal and interest cash flows, and intent to sell, including if it is more likely than not that the Company will be required to sell the investments before recovery.

As of March 31, 2023, the Company had 551 lots of fixed maturity securities in an unrealized loss position. The Company does not have an intent to sell these securities and it is not more likely than not that the Company will be required to sell these securities before maturity or recovery of its cost basis. The Company determined that no credit impairment existed in the gross unrealized holding losses because the credit ratings of these securities were consistent with the credit ratings when purchased and/or at origination, there were no adverse changes in financial condition of the issuer and no adverse credit quality events in underlying assets. The Company attributed the unrealized losses to the changes in interest rates.

The following table sets forth the components of net investment gains (losses) for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Gross realized gains
Fixed maturity securities, available-for sale	$	493	$	16
Equity securities	1,227		1,830
Other	1		31
Total	1,721		1,877
Gross realized losses
Fixed maturity securities, available-for sale	(237)		(276)
Equity securities	(4,289)		(654)
Other	(1)		(16)
Total	(4,527)		(946)
Net unrealized gains (losses) on investments
Equity securities	3,745		(5,369)
Mortgage loans	22		—
Net investment gains (losses)	$	961	$	(4,438)

The following table sets forth the proceeds from sales of available-for-sale fixed maturity securities and equity securities for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Fixed maturity securities, available-for sale	$	8,392	$	7,575
Equity securities	13,325		11,966

The following table sets forth the components of net investment income for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Income:
Fixed maturity securities, available-for sale	$	6,676	$	3,224
Fixed maturity securities, held-to-maturity	1,003		1,937
Equity securities	726		738
Equity method investments	(4,664)		9,210
Mortgage loans	1,473		818
Indirect loans	(1,319)		1,657
Short-term investments and cash	1,789		27
Other	(20)		7
Total investment income	5,664		17,618
Investment expenses	(1,018)		(2,469)
Net investment income	$	4,646	$	15,149

The following table sets forth the change in net unrealized gains (losses) on the Company’s investment portfolio, net of deferred income taxes, included in other comprehensive income (loss) for the three months ended March 31, 2023 and 2022:



($ in thousands)	2023		2022
Fixed maturity securities	$	9,786	$	(20,764)
Deferred income taxes	(2,045)		4,360
Total	$	7,741	$	(16,404)