XML 22 R16.htm IDEA: XBRL DOCUMENT v3.24.3
Investments
 9 Months Ended
Sep. 30, 2024
Investments [Abstract]  
Investments

6. Investments

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 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

 

$

160,871

 

 

$

25

 

 

$

(24,634

)

 

 

$

136,262

 

State and municipal obligations

 

 

172,140

 

 

 

645

 

 

 

(12,483

)

 

 

 

160,302

 

Corporate bonds and notes

 

 

2,858,351

 

 

 

26,816

 

 

 

(210,302

)

 

 

 

2,674,865

 

RMBS

 

 

1,111,244

 

 

 

14,870

 

 

 

(67,660

)

 

 

 

1,058,454

 

CMBS

 

 

499,415

 

 

 

117

 

 

 

(26,220

)

 

 

 

473,312

 

CLO

 

 

469,209

 

 

 

383

 

 

 

(1,831

)

 

 

 

467,761

 

Other ABS

 

 

394,154

 

 

 

4,673

 

 

 

(2,018

)

 

 

 

396,809

 

Mortgage insurance-linked notes (1)

 

 

45,571

 

 

 

2,083

 

 

 

—

 

 

 

 

47,654

 

Total securities available for sale, including loaned securities

 

 

5,710,955

 

 

$

49,612

 

 

$

(345,148

)

(2)

 

 

5,415,419

 

Less: loaned securities (3)

 

 

127,381

 

 

 

 

 

 

 

 

 

 

122,939

 

Total fixed-maturities available for sale

 

$

5,583,574

 

 

 

 

 

 

 

 

 

$

5,292,480

 

 

 

 

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 September 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 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

 

$

5,103

 

 

$

(10

)

 

$

120,876

 

 

$

(24,624

)

 

$

125,979

 

 

$

(24,634

)

State and municipal obligations

 

 

17,690

 

 

 

(432

)

 

 

86,609

 

 

 

(12,051

)

 

 

104,299

 

 

 

(12,483

)

Corporate bonds and notes

 

 

135,130

 

 

 

(835

)

 

 

1,700,938

 

 

 

(209,467

)

 

 

1,836,068

 

 

 

(210,302

)

RMBS

 

 

35,229

 

 

 

(199

)

 

 

606,366

 

 

 

(67,461

)

 

 

641,595

 

 

 

(67,660

)

CMBS

 

 

12,822

 

 

 

(38

)

 

 

449,697

 

 

 

(26,182

)

 

 

462,519

 

 

 

(26,220

)

CLO

 

 

57,047

 

 

 

(120

)

 

 

72,100

 

 

 

(1,711

)

 

 

129,147

 

 

 

(1,831

)

Other ABS

 

 

27,690

 

 

 

(133

)

 

 

47,061

 

 

 

(1,885

)

 

 

74,751

 

 

 

(2,018

)

Total

 

$

290,711

 

 

$

(1,767

)

 

$

3,083,647

 

 

$

(343,381

)

 

$

3,374,358

 

 

$

(345,148

)

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2024

 

(In thousands)

 

Amortized Cost

 

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Due in one year or less

 

$

111,757

 

 

$

110,762

 

Due after one year through five years (1)

 

 

1,178,043

 

 

 

1,152,612

 

Due after five years through 10 years (1)

 

 

965,508

 

 

 

920,061

 

Due after 10 years (1)

 

 

936,054

 

 

 

787,994

 

Asset-backed and mortgage-backed securities (2)

 

 

2,519,593

 

 

 

2,443,990

 

Total

 

 

5,710,955

 

 

 

5,415,419

 

Less: loaned securities

 

 

127,381

 

 

 

122,939

 

Total fixed-maturities available for sale

 

$

5,583,574

 

 

$

5,292,480

 

 

(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
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-maturities

 

$

59,348

 

 

$

58,599

 

 

$

174,531

 

 

$

167,985

 

Equity securities

 

 

3,047

 

 

 

3,222

 

 

 

8,653

 

 

 

9,667

 

Mortgage loans held for sale (1)

 

 

7,828

 

 

 

1,719

 

 

 

15,032

 

 

 

2,487

 

Short-term investments

 

 

9,686

 

 

 

5,405

 

 

 

27,258

 

 

 

12,969

 

Other (2)

 

 

1,525

 

 

 

1,308

 

 

 

4,626

 

 

 

3,633

 

Gross investment income

 

 

81,434

 

 

 

70,253

 

 

 

230,100

 

 

 

196,741

 

Investment expenses (2)

 

 

(3,038

)

 

 

(2,448

)

 

 

(8,717

)

 

 

(7,135

)

Net investment income

 

$

78,396

 

 

$

67,805

 

 

$

221,383

 

 

$

189,606

 

 

(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
September 30,

 

 

Nine Months Ended
September 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

 

$

2,021

 

 

$

20

 

 

$

2,652

 

 

$

588

 

Gross realized losses

 

 

(1,323

)

 

 

(2,814

)

 

 

(8,472

)

 

 

(13,768

)

Fixed-maturities available for sale, net

 

 

698

 

 

 

(2,794

)

 

 

(5,820

)

 

 

(13,180

)

Trading securities

 

 

(496

)

 

 

—

 

 

 

(686

)

 

 

(402

)

Equity securities

 

 

2,156

 

 

 

—

 

 

 

2,162

 

 

 

1,890

 

Other investments

 

 

51

 

 

 

19

 

 

 

52

 

 

 

56

 

Net realized gains (losses) on investments sold or redeemed (1)

 

 

2,409

 

 

 

(2,775

)

 

 

(4,292

)

 

 

(11,636

)

Change in unrealized gains (losses) on investments sold or redeemed (1)

 

 

(2,022

)

 

 

9

 

 

 

(690

)

 

 

226

 

Impairment losses due to intent to sell

 

 

(131

)

 

 

—

 

 

 

(369

)

 

 

—

 

Net unrealized gains (losses) on investments still held (1)

 

 

 

 

 

 

 

 

 

 

 

 

Trading securities

 

 

3,926

 

 

 

(5,632

)

 

 

988

 

 

 

(4,494

)

Equity securities

 

 

2,585

 

 

 

290

 

 

 

4,739

 

 

 

4,991

 

Other investments

 

 

101

 

 

 

(1

)

 

 

102

 

 

 

(97

)

Net unrealized gains (losses) on investments still held (1)

 

 

6,612

 

 

 

(5,343

)

 

 

5,829

 

 

 

400

 

Total net gains (losses) on investments (1)

 

 

6,868

 

 

 

(8,109

)

 

 

478

 

 

 

(11,010

)

Net gains (losses) on mortgage loans held for sale (Note 7) (2)

 

 

(4,611

)

 

 

284

 

 

 

(4,277

)

 

 

459

 

Net gains (losses) on other financial instruments (1) (3)

 

 

(83

)

 

 

(730

)

 

 

1,976

 

 

 

7,345

 

Net gains (losses) on investments and other financial instruments

 

$

2,174

 

 

$

(8,555

)

 

$

(1,823

)

 

$

(3,206

)

 

(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 $142 million and $204 million of our investment securities to third parties as of September 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 $30 million and $61 million as of September 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 investments include securities totaling $14 million at both September 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.