Investments

6 Months Ended

Jun. 30, 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

	June 30, 2024
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed-maturities available for sale
U.S. government and agency securities	$	166,275	$	—	$	(31,581)		$	134,694
State and municipal obligations	169,734		87		(16,850)			152,971
Corporate bonds and notes	2,804,815		5,287		(297,211)			2,512,891
RMBS	1,157,427		8,153		(104,775)			1,060,805
CMBS	532,968		33		(37,386)			495,615
CLO	517,651		310		(2,622)			515,339
Other ABS	363,736		843		(4,408)			360,171

Mortgage insurance-linked notes (1)	45,717		2,038		—			47,755
Total securities available for sale, including loaned securities	5,758,323		$	16,751	$	(494,833)	(2)	5,280,241
Less: loaned securities (3)	110,020							103,720
Total fixed-maturities available for sale	$	5,648,303						$	5,176,521

	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 June 30, 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

	June 30, 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	$	6,009	$	(349)	$	119,459	$	(31,232)	$	125,468	$	(31,581)
State and municipal obligations	28,122		(1,216)		92,942		(15,634)		121,064		(16,850)
Corporate bonds and notes	353,929		(6,424)		1,872,436		(290,787)		2,226,365		(297,211)
RMBS	175,512		(2,249)		679,163		(102,526)		854,675		(104,775)
CMBS	13,429		(22)		479,194		(37,364)		492,623		(37,386)
CLO	113,018		(242)		98,002		(2,380)		211,020		(2,622)
Other ABS	137,812		(654)		67,892		(3,754)		205,704		(4,408)


Total	$	827,831	$	(11,156)	$	3,409,088	$	(483,677)	$	4,236,919	$	(494,833)


	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 1,037 and 1,063 securities in an unrealized loss position at June 30, 2024, and December 31, 2023, respectively. We determined that these unrealized losses were due to non-credit factors and that, as of June 30, 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.

Contractual Maturities

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


Contractual maturities of fixed-maturities available for sale

	June 30, 2024

(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	93,971	$	92,593
Due after one year through five years (1)	1,159,906		1,105,988
Due after five years through 10 years (1)	980,900		890,580
Due after 10 years (1)	906,047		711,395
Asset-backed and mortgage-backed securities (2)	2,617,499		2,479,685
Total	5,758,323		5,280,241
Less: loaned securities	110,020		103,720
Total fixed-maturities available for sale	$	5,648,303	$	5,176,521

(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.

Net Investment Income

Net investment income consisted of the following.


Net investment income

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Investment income
Fixed-maturities	$	57,924	$	56,439	$	115,183	$	109,387
Equity securities	3,067		3,512		5,606		6,444
Mortgage loans held for sale (1)	5,411		574		7,204		768
Short-term investments	8,614		3,976		17,572		7,564
Other (2)	1,504		1,250		3,101		2,325
Gross investment income	76,520		65,751		148,666		126,488
Investment expenses (2)	(2,754)		(2,403)		(5,679)		(4,687)
Net investment income	$	73,766	$	63,348	$	142,987	$	121,801

(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 June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Net realized gains (losses) on investments sold or redeemed (1)
Fixed-maturities available for sale
Gross realized gains	$	579	$	490	$	631	$	568
Gross realized losses	(3,413)		(5,644)		(7,148)		(10,954)
Fixed-maturities available for sale, net	(2,834)		(5,154)		(6,517)		(10,386)
Trading securities	(191)		(100)		(191)		(402)
Equity securities	6		1,890		6		1,890
Other investments	—		9		1		37
Net realized gains (losses) on investments sold or redeemed (1)	(3,019)		(3,355)		(6,701)		(8,861)
Change in unrealized gains (losses) on investments sold or redeemed (1)	367		(1,092)		130		253
Impairment losses due to intent to sell	(237)		—		(237)		—



Net unrealized gains (losses) on investments still held (1)
Trading securities	(1,371)		(966)		(3,131)		1,092
Equity securities	(416)		2,204		3,605		4,725
Other investments	(42)		(110)		(55)		(110)
Net unrealized gains (losses) on investments still held (1)	(1,829)		1,128		419		5,707
Total net gains (losses) on investments (1)	(4,718)		(3,319)		(6,389)		(2,901)
Net gains (losses) on mortgage loans held for sale (Note 7) (2)	(50)		94		334		175
Net gains (losses) on other financial instruments (1) (3)	281		2,989		2,058		8,075
Net gains (losses) on investments and other financial instruments	$	(4,487)	$	(236)	$	(3,997)	$	5,349

(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.

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 $148 million and $204 million of our investment securities to third parties as of June 30, 2024, and December 31, 2023, respectively, including fixed-maturities, equity securities and short-term investments. 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 $55 million and $61 million as of June 30, 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.

Other

Our fixed-maturities available for sale include securities totaling $14 million at both June 30, 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.