Investments

3 Months Ended

Mar. 31, 2024

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

	March 31, 2024
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed-maturities available for sale
U.S. government and agency securities	$	167,869	$	—	$	(30,011)		$	137,858
State and municipal obligations	172,084		218		(15,537)			156,765
Corporate bonds and notes	2,886,238		7,042		(283,575)			2,609,705
RMBS	1,138,990		8,842		(98,359)			1,049,473
CMBS	565,949		55		(42,424)			523,580
CLO	475,769		188		(4,347)			471,610
Other ABS	321,559		1,084		(4,042)			318,601

Mortgage insurance-linked notes (1)	45,864		1,538		—			47,402
Total securities available for sale, including loaned securities	5,774,322		$	18,967	$	(478,295)	(2)	5,314,994
Less: loaned securities (3)	116,514							105,969
Total fixed-maturities available for sale	$	5,657,808						$	5,209,025

	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

(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 on our condensed 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 March 31, 2024, and December 31, 2023, are loaned securities that are classified as other assets on our condensed consolidated balance sheets, as further described below.


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

	March 31, 2024
	Less Than 12 Months				12 Months or Greater				Total
(In thousands) Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. government and agency securities	$	21,017	$	(1,915)	$	107,278	$	(28,096)	$	128,295	$	(30,011)
State and municipal obligations	24,066		(720)		99,220		(14,817)		123,286		(15,537)
Corporate bonds and notes	318,330		(4,319)		1,942,216		(279,256)		2,260,546		(283,575)
RMBS	129,902		(3,132)		635,067		(95,227)		764,969		(98,359)
CMBS	612		(1)		513,908		(42,423)		514,520		(42,424)
CLO	164,220		(398)		148,248		(3,949)		312,468		(4,347)
Other ABS	84,720		(730)		59,057		(3,312)		143,777		(4,042)


Total	$	742,867	$	(11,215)	$	3,504,994	$	(467,080)	$	4,247,861	$	(478,295)


	December 31, 2023
	Less Than 12 Months				12 Months or Greater				Total
(In thousands) 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)

There were 1,041 and 1,063 securities in an unrealized loss position at March 31, 2024, and December 31, 2023, respectively. We determined that these unrealized losses were due to non-credit factors and that, as of March 31, 2024, 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 of Notes to Consolidated Financial Statements in our 2023 Form 10-K 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. Under this program, we had loaned $120 million and $204 million of our investment securities to third parties as of March 31, 2024, and December 31, 2023, respectively, including both fixed-maturities and equity securities. Although we report such securities at fair value within other assets on our condensed consolidated balance sheets, rather than within investments, the detailed information we provide in this Note 6 includes these securities.

All of our securities lending agreements are classified as overnight and revolving. Securities collateral on deposit with us from third-party borrowers totaling $34 million and $61 million as of March 31, 2024, and December 31, 2023, respectively, may not be transferred or re-pledged unless the third-party borrower is in default, and is therefore not reflected in our condensed consolidated financial statements.

See Note 5 herein for additional detail on the loaned securities and see Note 6 of Notes to Consolidated Financial Statements in our 2023 Form 10-K for additional information about our accounting policies with respect to our securities lending agreements and the collateral requirements thereunder.

Net Investment Income

Net investment income consisted of the following.


Net investment income

	Three Months Ended March 31,
(In thousands)		2024		2023
Investment income
Fixed-maturities		$	57,259	$	52,948
Equity securities		2,539		2,932
Mortgage loans held for sale (1)		1,793		194
Short-term investments		8,958		3,588
Other (2)		1,597		1,075
Gross investment income		72,146		60,737
Investment expenses (2)		(2,925)		(2,284)
Net investment income		$	69,221	$	58,453

(1)See Note 7 for additional information on our mortgage loans held for sale.

(2)Includes the impact from our securities lending activities. Investment expenses also include other investment management expenses.

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

	Three Months Ended March 31,
(In thousands)		2024		2023
Net realized gains (losses) on investments sold or redeemed (1)
Fixed-maturities available for sale
Gross realized gains		$	52	$	78
Gross realized losses		(3,735)		(5,310)
Fixed-maturities available for sale, net		(3,683)		(5,232)
Trading securities		—		(302)

Other investments		1		28
Net realized gains (losses) on investments sold or redeemed (1)		(3,682)		(5,506)
Change in unrealized gains (losses) on investments sold or redeemed (1)		7		439




Net unrealized gains (losses) on investments still held (1)
Trading securities		(1,977)		2,078
Equity securities		4,074		3,444
Other investments		(93)		(37)
Net unrealized gains (losses) on investments still held (1)		2,004		5,485
Total net gains (losses) on investments (1)		(1,671)		418
Net gains (losses) on mortgage loans held for sale (Note 7) (2)		384		80
Net gains (losses) on other financial instruments (1) (3)		1,777		5,087
Net gains (losses) on investments and other financial instruments		$	490	$	5,585

(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

	March 31, 2024

(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	107,336	$	105,965
Due after one year through five years (1)	1,243,833		1,187,261
Due after five years through 10 years (1)	994,198		907,708
Due after 10 years (1)	880,824		703,394
Asset-backed and mortgage-backed securities (2)	2,548,131		2,410,666
Total	5,774,322		5,314,994
Less: loaned securities	116,514		105,969
Total fixed-maturities available for sale	$	5,657,808	$	5,209,025

(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 at both March 31, 2024, and December 31, 2023, that are on deposit and serving as collateral with various state regulatory authorities. Our fixed-maturities available for sale also include securities serving as collateral for our FHLB advances. See Note 12 for additional information about our FHLB advances.