Fair Value Measurements

6 Months Ended

Jun. 30, 2025

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Three levels of inputs are used to measure fair value of financial instruments: (1) Level 1: quoted price (unadjusted) in active markets for identical assets, (2) Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument and (3) Level 3: inputs to the valuation methodology are unobservable for the asset or liability.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.

To measure fair value, the Company obtains quoted market prices for its investment securities from its outside investment managers. If a quoted market price is not available, the Company uses prices of similar securities. The values for all fixed-maturity securities (including federal, state and municipal securities and obligations of U.S. government corporations and agencies) generally incorporate significant Level 2 inputs, and in some cases, Level 3 inputs, using the market approach and income approach valuation techniques. There have been no changes in the Company’s use of valuation techniques since commencement of operations.

The Company reviews fair value prices provided by its outside investment managers for reasonableness and monitors changes in unrealized gains and losses. The Company has not historically adjusted security prices. The Company obtains an understanding of the methods, models and inputs used by the investment managers and independent pricing services, and controls are in place to validate that prices provided represent fair values. The Company’s control process includes, but is not limited to, initial and ongoing evaluation of the methodologies used, a review of specific securities and an assessment for proper classification within the fair value hierarchy and obtaining and reviewing internal control reports for the Company’s investment manager that obtains fair values from independent pricing services.

Financial instruments measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024, are summarized below by level within the fair value hierarchy:

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
June 30, 2025	(in thousands)
Assets
Fixed-maturity securities, available-for-sale:
U.S. Treasury securities and obligations guaranteed by the U.S. Government	$	—	$	2,119	$	—	$	2,119
Corporate	—		416,412		—		416,412
Commercial and residential mortgage and other asset-backed	—		716		—		716
Total fixed-maturity securities, available-for-sale	—		419,247		—		419,247
Total assets	$	—	$	419,247	$	—	$	419,247

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
December 31, 2024	(in thousands)
Assets
Fixed-maturity securities, available-for-sale:
U.S. Treasury securities and obligations guaranteed by the U.S. Government	$	—	$	84,195	$	—	$	84,195
Corporate	—		353,805		—		353,805
Commercial and residential mortgage and other asset-backed	—		752		—		752
Total fixed-maturity securities, available-for-sale	—		438,752		—		438,752
Total assets	$	—	$	438,752	$	—	$	438,752
Liabilities
Securities sold, not yet purchased:
U.S. Treasury securities	$	—	$	(930)	$	—	$	(930)
Total liabilities	$	—	$	(930)	$	—	$	(930)

There were no transfers between Level 1 and Level 2 for the three and six months ended June 30, 2025 and 2024. The Company recognizes transfers between levels at the beginning of the reporting period.

The fair values of fixed-maturity securities owned, and securities sold, not yet purchased have been determined using quoted market prices for securities traded in the public market or prices using bid or closing prices for securities not traded in the public marketplace. The fair values of cash and cash equivalents and short-term investments approximate their carrying values due to their short-term maturity. See Note 4 regarding the fair value of the Utility & Infrastructure Investments.

Transfers out of Level 3 occur when the Company is able to obtain reliable prices from pricing vendors for which the Company was previously unable to obtain reliable prices. Transfers into Level 3 occur when the Company is unable to obtain reliable prices for securities from pricing vendors and instead must use broker price quotes. There were no transfers into or out of Level 3 during the three and six months ended June 30, 2025 and 2024.

There were no realized gains or losses included in earnings during the three and six months ended June 30, 2025 and 2024 attributable to the change in unrealized gains or losses relating to Level 3 assets valued at fair value on a recurring basis.

Investments for which external sources are not available or are determined by the Investment Manager not to be representative of fair value are recorded at fair value as determined by the Company, with input from its investment managers and valuation specialists as considered necessary. In determining the fair value of such investments, the Company considers one or more of the following factors: type of security held, convertibility or exchangeability of the security, redeemability of the security (including the timing of redemptions), application of industry accepted valuation

models, recent trading activity, liquidity, estimates of liquidation value, purchase cost and prices received for securities with similar terms of the same issuer or similar issuers.