Operating Segment Information

9 Months Ended

Sep. 30, 2025

Segment Reporting [Abstract]

Operating Segment Information

6. OPERATING SEGMENT INFORMATION

The Company’s chief operating decision maker (CODM) is the chief executive officer. The Company’s CODM assesses the segments’ performance by using earnings before income taxes (underwriting income) and the combined ratio. Underwriting income and combined ratio are analyzed at the segment level and influence how resources are allocated. Decisions are made based on what is likely to provide the best long-term return to the Company.

Amortization of deferred acquisition costs represents the recognition of commission and premium taxes over the life of insurance polices, in proportion to premium revenue recognized. The other policy acquisition costs line item includes other expenses associated with underwriting, but that cannot be specifically associated with the successful acquisition of a policy, including, but not limited to, employment costs for underwriters and underwriting support as well as costs for policy acquisition systems. Insurance operating expenses reflect allocated costs from various support departments, such as corporate technology, accounting, human resources and facilities, among others.

Net investment income consists of the interest and dividend income streams from our investments in fixed income and equity securities. Interest expense represents the cost of debt and lines of credit. General corporate expenses include director and shareholder relation costs and other compensation-related expenses incurred for the benefit of the corporation, but not attributable to the operations of our insurance segments. Investee earnings primarily represents our 23 percent share in earnings of Prime Holdings Insurance Services, Inc., a privately held insurance company which specializes in hard-to-place risks. Assets, and the revenues and expenses associated with investing and financing activities, are not managed at the segment level and therefore are not allocated to segments.

All segment revenues are from external customers and all long-lived assets are held domestically. We have no material foreign operations or customer concentrations and have no intersegment revenues.

The following table summarizes revenues by major product type within each operating segment:

	For the Three Months				For the Nine Months
Net Premiums Earned	Ended September 30,				Ended September 30,
(in thousands)	2025		2024		2025		2024
Casualty
Commercial excess and personal umbrella	$	115,132	$	91,434	$	327,252	$	257,455
Commercial transportation		31,190		32,067		91,464		88,691
General liability		28,690		26,316		82,997		77,832
Professional services		27,431		26,281		80,641		77,366
Small commercial		19,627		20,074		59,542		57,870
Executive products		6,043		6,261		17,507		17,624
Other casualty		15,395		17,205		47,791		50,176
Total	$	243,508	$	219,638	$	707,194	$	627,014
Property
Commercial property	$	72,853	$	85,814	$	232,541	$	260,819
Marine		40,058		37,618		118,784		107,255
Other property		13,778		9,834		38,572		28,700
Total	$	126,689	$	133,266	$	389,897	$	396,774
Surety
Transactional	$	13,268	$	12,488	$	39,024	$	36,904
Commercial		12,700		12,477		37,898		35,802
Contract		11,530		11,620		33,931		32,736
Total	$	37,498	$	36,585	$	110,853	$	105,442
Grand Total	$	407,695	$	389,489	$	1,207,944	$	1,129,230

The following tables present our operating results by segment, as evaluated by the CODM.

For the Three Months Ended September 30, 2025
(in thousands)		Casualty		Property		Surety		Total
Revenue
Net premiums earned	$	243,508	$	126,689	$	37,498	$	407,695
Net investment income		-		-		-		41,270
Net realized gains		-		-		-		18,318
Net unrealized gains on equity securities		-		-		-		41,981
Consolidated revenue	$	243,508	$	126,689	$	37,498	$	509,264
Less: Expenses
Losses and settlement expenses	$	150,912	$	32,815	$	4,271
Amortization of deferred acquisition costs		47,335		26,311		13,103
Other policy acquisition costs		23,199		8,219		10,770
Insurance operating expenses		17,576		8,920		3,719
Segment earnings before income taxes	$	4,486	$	50,424	$	5,635	$	60,545
Depreciation and amortization expense	$	1,517	$	534	$	370

For the Three Months Ended September 30, 2024
(in thousands)		Casualty		Property		Surety		Total
Revenue
Net premiums earned	$	219,638	$	133,266	$	36,585	$	389,489
Net investment income		-		-		-		36,694
Net realized gains		-		-		-		5,420
Net unrealized gains on equity securities		-		-		-		38,392
Consolidated revenue	$	219,638	$	133,266	$	36,585	$	469,995
Less: Expenses
Losses and settlement expenses	$	137,951	$	60,991	$	3,176
Amortization of deferred acquisition costs		41,240		27,054		12,471
Other policy acquisition costs		21,266		6,054		9,726
Insurance operating expenses		16,632		8,765		3,471
Segment earnings before income taxes	$	2,549	$	30,402	$	7,741	$	40,692
Depreciation and amortization expense	$	1,428	$	485	$	243

For the Nine Months Ended September 30, 2025
(in thousands)		Casualty		Property		Surety		Total
Revenue
Net premiums earned	$	707,194	$	389,897	$	110,853	$	1,207,944
Net investment income		-		-		-		117,414
Net realized gains		-		-		-		48,234
Net unrealized gains on equity securities		-		-		-		43,163
Consolidated revenue	$	707,194	$	389,897	$	110,853	$	1,416,755
Less: Expenses
Losses and settlement expenses	$	438,007	$	103,999	$	7,808
Amortization of deferred acquisition costs		135,999		79,985		38,361
Other policy acquisition costs		67,935		23,496		32,350
Insurance operating expenses		50,407		25,567		10,709
Segment earnings before income taxes	$	14,846	$	156,850	$	21,625	$	193,321
Depreciation and amortization expense	$	4,556	$	1,553	$	1,039

For the Nine Months Ended September 30, 2024
(in thousands)		Casualty		Property		Surety		Total
Revenue
Net premiums earned	$	627,014	$	396,774	$	105,442	$	1,129,230
Net investment income		-		-		-		103,502
Net realized gains		-		-		-		11,222
Net unrealized gains on equity securities		-		-		-		87,314
Consolidated revenue	$	627,014	$	396,774	$	105,442	$	1,331,268
Less: Expenses
Losses and settlement expenses	$	369,273	$	134,950	$	9,518
Amortization of deferred acquisition costs		117,979		80,319		35,574
Other policy acquisition costs		64,121		14,696		29,497
Insurance operating expenses		49,103		25,511		10,278
Segment earnings before income taxes	$	26,538	$	141,298	$	20,575	$	188,411
Depreciation and amortization expense	$	4,228	$	1,406	$	755

The following table reconciles segment earnings before income taxes to earnings before income taxes.

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
(in thousands)	2025		2024		2025		2024
Reconciliation of earnings before income taxes
Segment earnings before income taxes	$	60,545	$	40,692	$	193,321	$	188,411
Net investment income		41,270		36,694		117,414		103,502
Net realized gains		18,318		5,420		48,234		11,222
Net unrealized gains on equity securities		41,981		38,392		43,163		87,314
Interest expense on debt		(1,364)		(1,617)		(4,049)		(4,839)
General corporate expenses		(5,045)		(3,994)		(12,747)		(13,144)
Equity in earnings of unconsolidated investees		1,540		1,238		7,055		7,653
Earnings before income taxes	$	157,245	$	116,825	$	392,391	$	380,119