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Investments
 3 Months Ended
Jun. 30, 2024
Investments Debt Equity Securities [Abstract]  
Investments

3. Investments

We deposit bonds with insurance regulatory authorities to meet statutory requirements. The adjusted cost of bonds on deposit with insurance regulatory authorities was $20.1 million and $23.1 million as of June 30, 2024 and March 31, 2024, respectively.

Available-for-Sale Investments

Available-for-sale investments as of June 30, 2024 were as follows:

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Allowance for Expected Credit Losses

 

 

Fair
Value

 

 

 

(Unaudited)

 

 

 

(In thousands)

 

U.S. treasury securities and government obligations

 

$

147,881

 

 

$

235

 

 

$

(9,361

)

 

$

—

 

 

$

138,755

 

U.S. government agency mortgage-backed securities

 

 

47,208

 

 

 

153

 

 

 

(8,044

)

 

 

—

 

 

 

39,317

 

Obligations of states and political subdivisions

 

 

150,396

 

 

 

313

 

 

 

(8,108

)

 

 

—

 

 

 

142,601

 

Corporate securities

 

 

1,987,105

 

 

 

1,318

 

 

 

(165,015

)

 

 

(2,995

)

 

 

1,820,413

 

Mortgage-backed securities

 

 

299,291

 

 

 

33

 

 

 

(44,520

)

 

 

—

 

 

 

254,804

 

 

 

$

2,631,881

 

 

$

2,052

 

 

$

(235,048

)

 

$

(2,995

)

 

$

2,395,890

 

 

 

Available-for-sale investments as of March 31, 2024 were as follows:

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Allowance for Expected Credit Losses

 

 

Fair
Value

 

 

 

(In thousands)

 

U.S. treasury securities and government obligations

 

$

191,070

 

 

$

2,123

 

 

$

(8,921

)

 

$

—

 

 

$

184,272

 

U.S. government agency mortgage-backed securities

 

 

48,067

 

 

 

250

 

 

 

(7,664

)

 

 

—

 

 

 

40,653

 

Obligations of states and political subdivisions

 

 

151,197

 

 

 

918

 

 

 

(7,533

)

 

 

—

 

 

 

144,582

 

Corporate securities

 

 

1,963,249

 

 

 

2,762

 

 

 

(152,799

)

 

 

(1,052

)

 

 

1,812,160

 

Mortgage-backed securities

 

 

306,510

 

 

 

34

 

 

 

(45,707

)

 

 

—

 

 

 

260,837

 

 

 

$

2,660,093

 

 

$

6,087

 

 

$

(222,624

)

 

$

(1,052

)

 

$

2,442,504

 

 

A summary of available-for-sale investments with unrealized losses for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous loss position as of June 30, 2024 and March 31, 2024 were as follows:

 

 

 

June 30, 2024

 

 

 

 

Less than or equal to 1 year

 

 

 

Greater than 1 year

 

 

 

Total

 

 

 

 

Fair Value

 

 

 

Unrealized Losses

 

 

 

Fair Value

 

 

 

Unrealized Losses

 

 

 

Fair Value

 

 

 

Unrealized Losses

 

 

 

 

(Unaudited)

 

 

 

 

(In thousands)

 

U.S. treasury securities and government obligations

 

 

$

35,130

 

 

 

$

(40

)

 

 

$

99,447

 

 

 

$

(9,321

)

 

 

$

134,577

 

 

 

$

(9,361

)

U.S. government agency mortgage-backed securities

 

 

 

—

 

 

 

 

—

 

 

 

 

22,893

 

 

 

 

(8,044

)

 

 

 

22,893

 

 

 

 

(8,044

)

Obligations of states and political subdivisions

 

 

 

31,299

 

 

 

 

(489

)

 

 

 

81,171

 

 

 

 

(7,619

)

 

 

 

112,470

 

 

 

 

(8,108

)

Corporate securities

 

 

 

204,656

 

 

 

 

(1,729

)

 

 

 

1,500,739

 

 

 

 

(163,286

)

 

 

 

1,705,395

 

 

 

 

(165,015

)

Mortgage-backed securities

 

 

 

10,340

 

 

 

 

(43

)

 

 

 

242,491

 

 

 

 

(44,477

)

 

 

 

252,831

 

 

 

 

(44,520

)

 

 

 

$

281,425

 

 

 

$

(2,301

)

 

 

$

1,946,741

 

 

 

$

(232,747

)

 

 

$

2,228,166

 

 

 

$

(235,048

)

 

 

 

 

March 31, 2024

 

 

 

 

Less than or equal to 1 year

 

 

 

Greater than 1 year

 

 

 

Total

 

 

 

 

Fair Value

 

 

 

Unrealized Losses

 

 

 

Fair Value

 

 

 

Unrealized Losses

 

 

 

Fair Value

 

 

 

Unrealized Losses

 

 

 

 

(Unaudited)

 

 

 

 

(In thousands)

 

U.S. treasury securities and government obligations

 

 

$

1,888

 

 

 

$

(13

)

 

 

$

103,336

 

 

 

$

(8,908

)

 

 

$

105,224

 

 

 

$

(8,921

)

U.S. government agency mortgage-backed securities

 

 

 

—

 

 

 

 

—

 

 

 

 

23,711

 

 

 

 

(7,664

)

 

 

 

23,711

 

 

 

 

(7,664

)

Obligations of states and political subdivisions

 

 

 

10,492

 

 

 

 

(222

)

 

 

 

80,082

 

 

 

 

(7,311

)

 

 

 

90,574

 

 

 

 

(7,533

)

Corporate securities

 

 

 

132,513

 

 

 

 

(1,258

)

 

 

 

1,495,167

 

 

 

 

(151,541

)

 

 

 

1,627,680

 

 

 

 

(152,799

)

Mortgage-backed securities

 

 

 

3,008

 

 

 

 

(23

)

 

 

 

248,423

 

 

 

 

(45,684

)

 

 

 

251,431

 

 

 

 

(45,707

)

 

 

 

$

147,901

 

 

 

$

(1,516

)

 

 

$

1,950,719

 

 

 

$

(221,108

)

 

 

$

2,098,620

 

 

 

$

(222,624

)

 

Gross proceeds from matured or redeemed securities were $95.5 million and $338.0 million for the first three months ended June 30, 2024 and June 30, 2023 respectively. Included in the June 30, 2024 and 2023 proceeds were $73.0 million and $225.0 from the Moving and Storage Treasuries that matured. The gross realized gains on these sales totaled $3.6 million and $0.9 million during the first three months of fiscal 2025 and 2024, respectively. The gross realized losses on these sales totaled $1.8 million and $0.5 million during the first three months of fiscal 2025 and 2024, respectively.

 

For available-for-sale debt securities in an unrealized loss position, we first assess whether the security is below investment grade. For securities that are below investment grade, we evaluate whether the decline in fair value has resulted from credit losses or other factors such as the interest rate environment. Declines in value due to credit are recognized as an allowance. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse market conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, cumulative default rates based on ratings are used to

determine the potential cost of default, by year. The present value of these potential costs is then compared to the amortized cost of the security to determine the credit loss, limited by the amount that the fair value is less than the amortized cost basis.

Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are recorded through accumulated other comprehensive income, net of applicable taxes. If we intend to sell a security, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, the security is written down to its fair value and the write down is charged against the allowance for credit losses, with any incremental impairment reported in earnings. Reversals of the allowance for credit losses are permitted and should not exceed the allowance amount initially recognized.

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. There was a $1.9 million and ($0.5) million net impairment charge recorded in the first three months ended June 30, 2024 and 2023, respectively.

Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The adjusted cost and fair value of available-for-sale investments by contractual maturity were as follows:

 

 

 

June 30, 2024

 

 

March 31, 2024

 

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Amortized
Cost

 

 

Fair
Value

 

 

 

(Unaudited)

 

 

 

(In thousands)

 

Due in one year or less

 

$

301,514

 

 

$

299,952

 

 

$

266,357

 

 

$

266,578

 

Due after one year through five years

 

 

608,709

 

 

 

587,286

 

 

 

748,338

 

 

 

723,903

 

Due after five years through ten years

 

 

664,240

 

 

 

605,525

 

 

 

614,890

 

 

 

564,422

 

Due after ten years

 

 

758,127

 

 

 

648,323

 

 

 

723,998

 

 

 

626,764

 

 

 

 

2,332,590

 

 

 

2,141,086

 

 

 

2,353,583

 

 

 

2,181,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

 

299,291

 

 

 

254,804

 

 

 

306,510

 

 

 

260,837

 

 

 

$

2,631,881

 

 

$

2,395,890

 

 

$

2,660,093

 

 

$

2,442,504

 

 

Equity investments of common stock and non-redeemable preferred stock were as follows:

 

 

 

June 30, 2024

 

 

March 31, 2024

 

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Amortized
Cost

 

 

Fair
Value

 

 

 

(Unaudited)

 

 

 

(In thousands)

 

Common stocks

 

$

35,284

 

 

$

51,999

 

 

$

29,604

 

 

$

45,014

 

Non-redeemable preferred stocks

 

 

25,144

 

 

 

22,067

 

 

 

25,144

 

 

 

21,260

 

 

 

$

60,428

 

 

$

74,066

 

 

$

54,748

 

 

$

66,274

 

 

Investments, other

The carrying value of the other investments was as follows:

 

 

 

June 30,

 

 

March 31,

 

 

 

2024

 

 

2024

 

 

 

(Unaudited)

 

 

 

(In thousands)

 

Mortgage loans, net

 

$

617,230

 

 

$

604,481

 

Short-term investments

 

 

—

 

 

 

997

 

Policy loans

 

 

11,390

 

 

 

11,229

 

Other investments

 

 

9,803

 

 

 

17,229

 

 

 

$

638,423

 

 

$

633,936