Investments

6 Months Ended

Jun. 30, 2023

Available-for-sale securities

See Note 5, "Fair Value" for additional fair value disclosures. The following tables summarize the amortized cost and estimated fair value, net of credit loss allowance, of our available-for-sale securities as of:


	June 30, 2023
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value




Corporate debt securities	$	598,164	$	1,089	$	30,142	$	569,111
Collateralized debt obligations	110,724		25		3,828		106,921
Commercial mortgage-backed securities	77,168		87		6,285		70,970
Residential mortgage-backed securities	173,842		39		15,506		158,375
Other debt securities	16,460		0		885		15,575

Total available-for-sale securities, net	$	976,358	$	1,240	$	56,646	$	920,952


	December 31, 2022
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value




Corporate debt securities	$	588,536	$	657	$	35,811	$	553,382
Collateralized debt obligations	107,730		11		5,204		102,537
Commercial mortgage-backed securities	73,855		157		7,958		66,054
Residential mortgage-backed securities	166,412		72		16,069		150,415
Other debt securities	24,602		0		2,329		22,273

Total available-for-sale securities, net	$	961,135	$	897	$	67,371	$	894,661

The amortized cost and estimated fair value of available-for-sale securities at June 30, 2023 are shown below by remaining contractual term to maturity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	June 30, 2023
	Amortized		Estimated
(in thousands)	cost		fair value
Due in one year or less	$	56,875	$	55,714
Due after one year through five years	435,531		414,012
Due after five years through ten years	174,031		167,272
Due after ten years	309,921		283,954
Total available-for-sale securities, net (1)	$	976,358	$	920,952

(1)The contractual maturities of our available-for-sale securities are included in the table. However, given our intent to sell certain impaired securities, these securities are classified as current assets in our Statement of Financial Position at June 30, 2023.

The below securities have been evaluated and determined to be temporary declines in fair value for which we expect to recover our entire principal plus interest. The following tables present available-for-sale securities based on length of time in a gross unrealized loss position as of:


	June 30, 2023
	Less than 12 months				12 months or longer				Total
(dollars in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses		No. of holdings





Corporate debt securities	$	183,248	$	4,632	$	328,904	$	25,510	$	512,152	$	30,142	817
Collateralized debt obligations	9,239		102		92,447		3,726		101,686		3,828		157
Commercial mortgage-backed securities	26,338		352		32,703		5,933		59,041		6,285		153
Residential mortgage-backed securities	73,239		2,212		78,972		13,294		152,211		15,506		177
Other debt securities	9,785		262		5,790		623		15,575		885		36

Total available-for-sale securities	$	301,849	$	7,560	$	538,816	$	49,086	$	840,665	$	56,646	1,340
Quality breakdown of available-for-sale securities:
Investment grade	$	275,990	$	6,914	$	482,717	$	42,549	$	758,707	$	49,463	790
Non-investment grade	25,859		646		56,099		6,537		81,958		7,183		550
Total available-for-sale securities	$	301,849	$	7,560	$	538,816	$	49,086	$	840,665	$	56,646	1,340


	December 31, 2022
	Less than 12 months				12 months or longer				Total
(dollars in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses		No. of holdings





Corporate debt securities	$	397,511	$	21,371	$	121,094	$	14,440	$	518,605	$	35,811	916
Collateralized debt obligations	44,823		2,529		55,335		2,675		100,158		5,204		159
Commercial mortgage-backed securities	41,139		5,124		15,864		2,834		57,003		7,958		131
Residential mortgage-backed securities	109,499		9,131		31,465		6,938		140,964		16,069		161
Other debt securities	15,682		1,323		6,591		1,006		22,273		2,329		46

Total available-for-sale securities	$	608,654	$	39,478	$	230,349	$	27,893	$	839,003	$	67,371	1,413
Quality breakdown of available-for-sale securities:
Investment grade	$	525,805	$	31,904	$	215,742	$	25,205	$	741,547	$	57,109	761
Non-investment grade	82,849		7,574		14,607		2,688		97,456		10,262		652
Total available-for-sale securities	$	608,654	$	39,478	$	230,349	$	27,893	$	839,003	$	67,371	1,413

Credit loss allowance on investments

The current expected credit loss allowance on agent loans was $1.0 million at both June 30, 2023 and December 31, 2022. The current expected credit loss allowance on available-for-sale securities was $0.4 million at June 30, 2023 and $0.2 million at December 31, 2022.

Net investment income

Investment income (loss), net of expenses, was generated from the following portfolios:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2023		2022		2023		2022
Available-for-sale securities	$	10,534	$	7,015	$	20,367	$	13,373
Equity securities	1,084		975		2,099		1,963
Limited partnerships (1)	40		(290)		(10,712)		2,485
Cash equivalents and other	1,922		865		4,027		1,650
Total investment income	13,580		8,565		15,781		19,471
Less: investment expenses	45		297		63		699
Net investment income	$	13,535	$	8,268	$	15,718	$	18,772

(1)Equity in earnings (losses) of limited partnerships includes both realized gains (losses) and unrealized valuation changes. Our limited partnership investments are included in the line item "Other assets" in the Statements of Financial Position. We have made no new significant limited partnership commitments since 2006, and the balance of limited partnership investments is expected to decline over time as additional distributions are received.

Net realized and unrealized investment losses

Realized and unrealized gains (losses) on investments were as follows:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2023		2022		2023		2022
Available-for-sale securities:
Gross realized gains	$	100	$	418	$	306	$	909
Gross realized losses	(2,196)		(2,840)		(4,021)		(5,411)
Net realized losses on available-for-sale securities	(2,096)		(2,422)		(3,715)		(4,502)
Equity securities	359		(7,902)		(3,304)		(13,103)
Miscellaneous	0		0		0		2
Net realized and unrealized investment losses	$	(1,737)	$	(10,324)	$	(7,019)	$	(17,603)

The portion of net unrealized gains (losses) recognized during the reporting period related to equity securities held at the reporting date is calculated as follows:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2023		2022		2023		2022
Equity securities:
Net gains (losses) recognized during the period	$	359	$	(7,902)	$	(3,304)	$	(13,103)
Less: net losses recognized on securities sold	(78)		(51)		(2,704)		(409)
Net unrealized gains (losses) recognized on securities held at reporting date	$	437	$	(7,851)	$	(600)	$	(12,694)

Net impairment losses recognized in earnings

Impairments on available-for-sale securities were as follows:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2023		2022		2023		2022
Available-for-sale securities:
Intent to sell	$	(149)	$	(31)	$	(1,581)	$	(101)
Credit impaired	(22)		(7)		(223)		(153)


Net impairment losses recognized in earnings	$	(171)	$	(38)	$	(1,804)	$	(254)