Operating Segment Information

3 Months Ended

Mar. 31, 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 tables present our operating results by segment, as evaluated by the CODM.

For the Three Months Ended March 31, 2025
(in thousands)		Casualty		Property		Surety		Total
Revenue
Net premiums earned	$	229,048	$	132,544	$	36,753	$	398,345
Net investment income		-		-		-		36,726
Net realized gains		-		-		-		14,912
Net unrealized gains (losses) on equity securities		-		-		-		(42,318)
Consolidated revenue	$	229,048	$	132,544	$	36,753	$	407,665
Less: Expenses
Losses and settlement expenses	$	145,835	$	32,725	$	(1,322)
Amortization of deferred acquisition costs		42,903		26,976		12,602
Other policy acquisition costs		22,669		7,957		10,580
Insurance operating expenses		15,570		7,971		3,333
Segment earnings before income taxes	$	2,071	$	56,915	$	11,560	$	70,546
Reconciliation of earnings before income taxes
Segment earnings before income taxes							$	70,546
Net investment income								36,726
Net realized gains								14,912
Net unrealized gains (losses) on equity securities								(42,318)
Interest expense on debt								(1,335)
General corporate expenses								(2,948)
Equity in earnings of unconsolidated investees								3,048
Earnings before income taxes							$	78,631
Depreciation and amortization expense	$	1,505	$	498	$	310

For the Three Months Ended March 31, 2024
(in thousands)		Casualty		Property		Surety		Total
Revenue
Net premiums earned	$	198,276	$	129,411	$	32,989	$	360,676
Net investment income		-		-		-		32,847
Net realized gains		-		-		-		5,994
Net unrealized gains (losses) on equity securities		-		-		-		45,314
Consolidated revenue	$	198,276	$	129,411	$	32,989	$	444,831
Less: Expenses
Losses and settlement expenses	$	109,472	$	32,577	$	1,775
Amortization of deferred acquisition costs		36,835		26,219		11,276
Other policy acquisition costs		21,599		4,415		10,110
Insurance operating expenses		16,696		8,484		3,523
Segment earnings before income taxes	$	13,674	$	57,716	$	6,305	$	77,695
Reconciliation of earnings before income taxes
Segment earnings before income taxes							$	77,695
Net investment income								32,847
Net realized gains								5,994
Net unrealized gains (losses) on equity securities								45,314
Interest expense on debt								(1,618)
General corporate expenses								(5,010)
Equity in earnings of unconsolidated investees								4,769
Earnings before income taxes								159,991
Depreciation and amortization expense	$	1,409	$	452	$	259

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

	For the Three Months
Net Premiums Earned	Ended March 31,
(in thousands)	2025		2024
Casualty
Commercial excess and personal umbrella	$	103,209	$	80,035
Commercial transportation		30,259		27,301
General liability		26,718		25,412
Professional services		26,587		25,085
Small commercial		19,915		18,337
Executive products		5,943		5,915
Other casualty		16,417		16,191
Total	$	229,048	$	198,276
Property
Commercial property	$	82,812	$	87,605
Marine		37,709		32,568
Other property		12,023		9,238
Total	$	132,544	$	129,411
Surety
Commercial	$	12,776	$	10,625
Transactional		12,660		12,108
Contract		11,317		10,256
Total	$	36,753	$	32,989
Grand Total	$	398,345	$	360,676