Investments

12 Months Ended

Dec. 31, 2023

Available for Sale Securities

Our available for sale securities within our investment portfolio consisted of the following as of the dates indicated.


Available for sale securities

	December 31, 2023
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed-maturities available for sale
U.S. government and agency securities	$	171,194	$	93	$	(26,891)		$	144,396
State and municipal obligations	158,539		283		(16,037)			142,785
Corporate bonds and notes	2,876,175		12,286		(259,177)			2,629,284
RMBS	1,089,919		8,250		(84,098)			1,014,071
CMBS	605,029		51		(46,697)			558,383
CLO	494,339		63		(6,553)			487,849
Other ABS	286,988		1,608		(4,037)			284,559
Foreign government and agency securities	5,128		—		(41)			5,087
Mortgage insurance-linked notes (1)	47,456		1,540		—			48,996
Total securities available for sale, including loaned securities	5,734,767		$	24,174	$	(443,531)	(2)	5,315,410
Less: loaned securities (3)	135,656							127,182
Total fixed-maturities available for sale	$	5,599,111						$	5,188,228


	December 31, 2022
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed-maturities available for sale
U.S. government and agency securities	$	174,138	$	206	$	(28,902)		$	145,442
State and municipal obligations	164,325		—		(21,939)			142,386
Corporate bonds and notes	2,886,905		1,403		(350,537)			2,537,771
RMBS	1,025,795		1,163		(98,559)			928,399
CMBS	645,890		13		(52,546)			593,357
CLO	518,677		—		(20,485)			498,192
Other ABS	168,033		69		(6,743)			161,359
Foreign government and agency securities	5,118		—		(143)			4,975
Mortgage insurance-linked notes (1)	54,578		80		(1,639)			53,019
Total securities available for sale, including loaned securities	5,643,459		$	2,934	$	(581,493)	(2)	5,064,900
Less: loaned securities (3)	56,198							47,189
Total fixed-maturities available for sale	$	5,587,261						$	5,017,711

(1)Includes mortgage insurance-linked notes purchased by Radian Group in connection with the XOL Program. See Note 8 for more information.

(2)See “Gross Unrealized Losses and Related Fair Value of Available for Sale Securities” below for additional details.

(3)Included in other assets in our consolidated balance sheets. See “Loaned Securities” below for a discussion of our securities lending agreements.

Gross Unrealized Losses and Related Fair Value of Available for Sale Securities

For securities deemed “available for sale” that are in an unrealized loss position and for which an allowance for credit loss has not been established, the following tables show the gross unrealized losses and fair value, aggregated by investment

category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated. Included in the amounts as of December 31, 2023 and 2022, are loaned securities that are classified as other assets in our consolidated balance sheets, as further described below.


Unrealized losses on fixed-maturities available for sale by category and length of time

	December 31, 2023
(In thousands)	Less Than 12 Months				12 Months or Greater				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. government and agency securities	$	15,650	$	(938)	$	113,678	$	(25,953)	$	129,328	$	(26,891)
State and municipal obligations	17,154		(551)		104,949		(15,486)		122,103		(16,037)
Corporate bonds and notes	161,924		(1,261)		2,055,113		(257,916)		2,217,037		(259,177)
RMBS	113,506		(1,439)		653,955		(82,659)		767,461		(84,098)
CMBS	8,558		(31)		546,104		(46,666)		554,662		(46,697)
CLO	15,083		(25)		438,294		(6,528)		453,377		(6,553)
Other ABS	49,513		(322)		64,078		(3,715)		113,591		(4,037)

Foreign government and agency securities	—		—		5,087		(41)		5,087		(41)
Total	$	381,388	$	(4,567)	$	3,981,258	$	(438,964)	$	4,362,646	$	(443,531)


	December 31, 2022
(In thousands)	Less Than 12 Months				12 Months or Greater				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. government and agency securities	$	86,964	$	(21,370)	$	47,770	$	(7,532)	$	134,734	$	(28,902)
State and municipal obligations	116,285		(14,231)		25,401		(7,708)		141,686		(21,939)
Corporate bonds and notes	1,769,547		(176,768)		701,936		(173,769)		2,471,483		(350,537)
RMBS	610,812		(46,117)		261,370		(52,442)		872,182		(98,559)
CMBS	469,100		(38,178)		121,277		(14,368)		590,377		(52,546)
CLO	246,705		(10,271)		245,584		(10,214)		492,289		(20,485)
Other ABS	115,181		(3,603)		31,041		(3,140)		146,222		(6,743)
Foreign government and agency securities	4,975		(143)		—		—		4,975		(143)
Mortgage insurance-linked notes	43,745		(1,639)		—		—		43,745		(1,639)
Total	$	3,463,314	$	(312,320)	$	1,434,379	$	(269,173)	$	4,897,693	$	(581,493)

There were 1,063 and 1,284 securities in an unrealized loss position at December 31, 2023 and 2022, respectively. We determined that these unrealized losses were due to non-credit factors and that, as of December 31, 2023, we did not expect to realize a loss for our investments in an unrealized loss position given our intent and ability to hold these investment securities until recovery of their amortized cost basis. See Note 2 for information regarding our accounting policy for impairments of investments.

Loaned Securities

We participate in a securities lending program whereby we loan certain securities in our investment portfolio to third-party borrowers for short periods of time. These securities lending agreements are collateralized financing arrangements whereby we transfer securities to third parties through an intermediary in exchange for cash or other securities. However, pursuant to the terms of these agreements, we maintain effective control over all loaned securities. Although we report such securities at fair value within other assets in our consolidated balance sheets, rather than within investments, the detailed information we provide in this Note 6 includes these securities. See Note 5 for additional detail on the loaned securities.

Under our securities lending agreements, the borrower is required to provide to us collateral, consisting of cash or securities, in amounts generally equal to or exceeding: (i) 102% of the value of the loaned securities (105% in the case of foreign securities) or (ii) another agreed-upon percentage not less than 100% of the market value of the loaned securities. Any cash collateral we receive may be invested in liquid assets. Cash collateral, which is reinvested for our benefit by the intermediary in accordance with the investment guidelines contained in the securities lending and collateral agreements, is

reflected in short-term investments, with an offsetting liability recognized in other liabilities for the obligation to return the cash collateral. Securities collateral we receive is held on deposit for the borrower’s benefit and we may not transfer or loan such securities collateral unless the borrower is in default. Therefore, such securities collateral is not reflected in our consolidated financial statements given that the risks and rewards of ownership are not transferred to us from the borrowers.

Fees received and paid in connection with securities lending agreements are recorded in net investment income on the consolidated statements of operations.

All of our securities lending agreements are classified as overnight and revolving. Securities collateral on deposit with us from third-party borrowers totaling $61 million and $16 million as of December 31, 2023 and 2022, respectively, may not be transferred or re-pledged unless the third-party borrower is in default, and is therefore not reflected in our consolidated financial statements.

Net Investment Income

Net investment income consisted of the following.


Net investment income

	Years Ended December 31,
(In thousands)	2023		2022		2021
Investment income
Fixed-maturities	$	226,654	$	184,189	$	145,613
Equity securities	13,420		11,210		8,158
Mortgage loans held for sale	4,212		39		—
Short-term investments	18,840		5,716		817
Other (1)	5,286		1,370		368
Gross investment income	268,412		202,524		154,956
Investment expenses (1)	(9,982)		(6,866)		(7,047)
Net investment income	$	258,430	$	195,658	$	147,909

(1)Includes the impact from our securities lending activities.

Net Gains (Losses) on Investments and Other Financial Instruments

Net gains (losses) on investments and other financial instruments consisted of the following.


Net gains (losses) on investments and other financial instruments

	Years Ended December 31,
(In thousands)	2023		2022		2021
Net realized gains (losses) on investments sold or redeemed (1)
Fixed-maturities available for sale
Gross realized gains	$	1,609	$	2,763	$	22,766
Gross realized losses	(15,346)		(12,737)		(17,105)
Fixed-maturities available for sale, net	(13,737)		(9,974)		5,661
Trading securities	(402)		(135)		390
Equity securities	3,350		1,655		10,820
Other investments	56		148		3,971
Net realized gains (losses) on investments sold or redeemed (1)	(10,733)		(8,306)		20,842
Change in unrealized gains (losses) on investments sold or redeemed (1)	915		(3,458)		(8,714)

Net decrease (increase) in expected credit losses	—		—		918
Net unrealized gains (losses) on investments still held (1)
Trading securities	2,308		(27,700)		(7,330)
Equity securities	7,625		(25,255)		10,210
Other investments	25		(387)		1,173
Net unrealized gains (losses) on investments still held (1)	9,958		(53,342)		4,053
Total net gains (losses) on investments (1)	140		(65,106)		17,099
Net gains (losses) on mortgage loans held for sale (Note 7) (2)	814		48		—
Net gains (losses) on other financial instruments (1)(3)	9,287		(15,675)		(1,496)
Net gains (losses) on investments and other financial instruments	$	10,241	$	(80,733)	$	15,603

(1)Excludes activities related to our mortgage loans held for sale. See Note 7 for additional information.

(2)Includes realized and unrealized net gains (losses) on mortgage loans held for sale and related activities, including interest rate hedges. See Note 7 for additional details.

(3)Includes changes in the fair value of embedded derivatives associated with our XOL Program. See Note 8 for additional information.

Contractual Maturities

The contractual maturities of fixed-maturities available for sale were as follows.


Contractual maturities of fixed-maturities available for sale

	December 31, 2023
(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	120,944	$	119,450
Due after one year through five years (1)	1,296,391		1,243,001
Due after five years through 10 years (1)	928,170		850,861
Due after 10 years (1)	865,531		708,240
Asset-backed securities and mortgage-backed securities (2)	2,523,731		2,393,858
Total	5,734,767		5,315,410
Less: loaned securities	135,656		127,182
Total fixed-maturities available for sale	$	5,599,111	$	5,188,228

(1)Actual maturities may differ as a result of calls before scheduled maturity.

(2)Includes RMBS, CMBS, CLO, Other ABS and mortgage insurance-linked notes, which are not due at a single maturity date.

Other

Our fixed-maturities available for sale include securities totaling $14 million and $13 million at December 31, 2023 and 2022, respectively, on deposit and serving as collateral with various state regulatory authorities. Our fixed-maturities available for sale and trading securities also include securities serving as collateral for our FHLB advances. See Note 12 for additional information about our FHLB advances.