Investments

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Unrealized gains and losses

The following tables present cost or amortized cost and fair values of investment in fixed maturities as of September 30, 2023 and December 31, 2022 ($ in millions):


	Cost or Amortized Cost		Gross Unrealized				Fair Value
			Gains		Losses
September 30, 2023
Corporate debt securities	$	460.2	$	—	$	(9.2)	$	451.0
U.S. Government obligations	184.8		—		(2.8)		182.0
Asset-backed securities	0.4		—		—		0.4

Total	$	645.4	$	—	$	(12.0)	$	633.4

December 31, 2022
Corporate debt securities	$	549.7	$	0.1	$	(19.6)	$	530.2
U.S. Government obligations	121.0		—		(3.7)		117.3
Asset-backed securities	2.8		—		—		2.8

Total	$	673.5	$	0.1	$	(23.3)	$	650.3

Gross unrealized losses for fixed maturities was $12.0 million as of September 30, 2023 and $23.3 million as of December 31, 2022. Gross unrealized gains and losses were recorded as a component of accumulated other comprehensive loss.

Contractual maturities of bonds

The following table presents the cost or amortized cost and estimated fair value of investments in fixed maturities as of September 30, 2023 by contractual maturity ($ in millions). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	September 30, 2023
	Cost or Amortized Cost		Fair Value
Due in one year or less	$	257.8	$	252.9
Due after one year through five years	387.6		380.5
Due after five years through ten years	—		—
Due after ten years	—		—
Total	$	645.4	$	633.4

Net investment income

An analysis of net investment income follows ($ in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Interest on cash and cash equivalents	$	0.8	$	0.3	$	3.0	$	0.4
Fixed maturities	5.0		1.7		11.9		3.7
Short-term investments	1.3		0.7		3.0		0.9
Total	7.1		2.7		17.9		5.0
Investment expense	0.1		0.1		0.3		0.3
Net investment income	$	7.0	$	2.6	$	17.6	$	4.7

Investment gains and losses

The Company had pre-tax net realized capital losses of $0.7 million for the three and nine months ended September 30, 2023, which were included in "Commission and other income" in the consolidated statements of operations. There were no pre-tax net realized capital gains and losses for the three months ended September 30, 2022, and the Company had pre-tax net realized capital losses of $0.4 million for the nine months ended September 30, 2022.

Aging of gross unrealized losses

The following table presents the gross unrealized losses and related fair values for the Company’s investment in fixed maturities, grouped by duration of time in a continuous unrealized loss position as of September 30, 2023 and December 31, 2022 ($ in millions):


	Less than 12 Months				12 Months or More				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses




September 30, 2023
Corporate debt securities	$	204.5	$	(2.2)	$	216.7	$	(6.9)	$	421.2	$	(9.1)
U.S. Government obligations	116.8		(1.0)		62.4		(1.9)		179.2		(2.9)
Asset-backed securities	—		—		0.4		—		0.4		—

Total	$	321.3	$	(3.2)	$	279.5	$	(8.8)	$	600.8	$	(12.0)


	Less than 12 Months				12 Months or More				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses




December 31, 2022
Corporate debt securities	$	83.6	$	(2.1)	$	428.1	$	(17.5)	$	511.7	$	(19.6)
U.S. Government obligations	29.6		(0.2)		85.1		(3.5)		114.7		(3.7)
Asset-backed securities	2.8		—		—		—		2.8		—


Total	$	116.0	$	(2.3)	$	513.2	$	(21.0)	$	629.2	$	(23.3)

As of September 30, 2023, 260 of the securities held were in an unrealized loss position. Investments in fixed maturities with gross unrealized losses for twelve months or more was $8.8 million and $21.0 million as of September 30, 2023 and December 31, 2022, respectively. The Company determined that unrealized losses on fixed maturities were primarily due to the interest rate environment, and not credit risk related to the issuers of these securities. The Company does not intend to sell these investment in fixed maturities, and it is not more likely than not that that the Company will be required to sell these investment in fixed maturities before recovery of the amortized cost basis. No allowance for credit losses related to any of these securities was recorded for the three and nine months ended September 30, 2023. The Company does not measure an allowance for credit losses on accrued interest receivable and would instead write off accrued interest receivable at the time an issuer defaults or is expected to default on payments.

Restricted investments

Restricted investments are held in a trust account securing the Company’s insurance subsidiary's contractual obligations under the Property Catastrophe Excess of Loss reinsurance contract with a captive (see Note 8) which will not be released until the underlying risks have expired or have been settled. Restricted investments include certain investments in debt securities and short-term investments of $81.0 million as of September 30, 2023.