Investments

3 Months Ended

Mar. 31, 2024

Fixed maturity 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 fixed maturity securities as of:


	March 31, 2024
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value




Available-for-sale securities:
Corporate debt securities	$	606,788	$	3,872	$	15,365	$	595,295
Collateralized debt obligations	114,223		244		1,379		113,088
Commercial mortgage-backed securities	113,857		1,329		4,306		110,880
Residential mortgage-backed securities	148,917		53		16,183		132,787
Other debt securities	17,077		115		636		16,556
U.S. Treasury	1,044		0		5		1,039
Total available-for-sale securities, net	1,001,906		5,613		37,874		969,645

Held-to-maturity securities - states & political subdivisions	4,833		0		0		4,833

Total fixed maturity securities, net	$	1,006,739	$	5,613	$	37,874	$	974,478


	December 31, 2023
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Available-for-sale securities:




Corporate debt securities	$	600,639	$	4,594	$	16,545	$	588,688
Collateralized debt obligations	114,400		156		2,088		112,468
Commercial mortgage-backed securities	106,019		1,410		4,709		102,720
Residential mortgage-backed securities	153,633		69		13,647		140,055
Other debt securities	17,862		136		688		17,310

Total available-for-sale securities, net	$	992,553	$	6,365	$	37,677	$	961,241

The amortized cost and estimated fair value of available-for-sale and held-to-maturity securities at March 31, 2024 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.


	March 31, 2024
	Amortized		Estimated
(in thousands)	cost		fair value
Available-for-sale securities:
Due in one year or less	$	72,252	$	71,072
Due after one year through five years	418,035		408,886
Due after five years through ten years	194,162		192,549
Due after ten years	317,457		297,138
Total available-for-sale securities, net (1)	1,001,906		969,645

Held-to-maturity securities - due after ten years	4,833		4,833

Total fixed maturity securities, net	$	1,006,739	$	974,478

(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 March 31, 2024.

The below securities have been evaluated for credit impairment using criteria described within Note 2, "Significant Accounting Policies, of Notes to Financial Statements" included in our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on February 26, 2024. The gross unrealized losses are primarily attributable to changes in interest rates and are not deemed to be credit-related. We do not have the intent to sell these securities and it is more likely than not that we would not be required to sell these securities before the anticipated recovery of the amortized cost basis.

The following tables present available-for-sale securities based on length of time in a gross unrealized loss position as of:


	March 31, 2024
	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	$	72,273	$	728	$	318,640	$	14,637	$	390,913	$	15,365	615
Collateralized debt obligations	25,013		52		52,090		1,327		77,103		1,379		136
Commercial mortgage-backed securities	16,051		167		28,294		4,139		44,345		4,306		121
Residential mortgage-backed securities	29,413		754		100,997		15,429		130,410		16,183		169
Other debt securities	3,732		57		7,051		579		10,783		636		36
U.S. Treasury	1,039		5		0		0		1,039		5		1
Total available-for-sale securities	$	147,521	$	1,763	$	507,072	$	36,111	$	654,593	$	37,874	1,078
Quality breakdown of available-for-sale securities:
Investment grade	$	132,559	$	1,507	$	465,791	$	32,547	$	598,350	$	34,054	671
Non-investment grade	14,962		256		41,281		3,564		56,243		3,820		407
Total available-for-sale securities	$	147,521	$	1,763	$	507,072	$	36,111	$	654,593	$	37,874	1,078


	December 31, 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	$	50,853	$	546	$	338,322	$	15,999	$	389,175	$	16,545	590
Collateralized debt obligations	3,911		15		87,005		2,073		90,916		2,088		142
Commercial mortgage-backed securities	9,148		157		30,145		4,552		39,293		4,709		108
Residential mortgage-backed securities	30,271		297		101,761		13,350		132,032		13,647		164
Other debt securities	2,084		62		7,475		626		9,559		688		32

Total available-for-sale securities	$	96,267	$	1,077	$	564,708	$	36,600	$	660,975	$	37,677	1,036
Quality breakdown of available-for-sale securities:
Investment grade	$	87,774	$	807	$	517,090	$	32,511	$	604,864	$	33,318	651
Non-investment grade	8,493		270		47,618		4,089		56,111		4,359		385
Total available-for-sale securities	$	96,267	$	1,077	$	564,708	$	36,600	$	660,975	$	37,677	1,036

Credit loss allowances

The following tables present a roll-forward of the allowances for credit losses on fixed maturity securities and financing receivables for the three months ended March 31:


	2024
(in thousands)	Available-for-sale securities		Held-to-maturity securities		Other loans receivable		Agent loans
Balance, beginning of period	$	597	$	0	$	11,081	$	957
Provision and recoveries	164		2,167		172		0
Sales/collections and write-offs	(186)		0		0		0
Balance, end of period	$	575	$	2,167	$	11,253	$	957


	2023
(in thousands)	Available-for-sale securities		Held-to-maturity securities		Other loans receivable		Agent loans
Balance, beginning of period	$	249	$	—	$	3,775	$	957
Provision and recoveries	201		—		32		0
Sales/collections and write-offs	(102)		—		(98)		0
Balance, end of period	$	348	$	—	$	3,709	$	957

Net investment income

Investment income (loss), net of expenses, was generated from the following portfolios for the three months ended March 31:



(in thousands)	2024		2023
Available-for-sale securities	$	11,613	$	9,833
Equity securities	1,218		1,015
Limited partnerships (1)	525		(10,752)
Cash equivalents and other	2,948		2,105
Total investment income	16,304		2,201
Less: investment expenses	401		18
Net investment income	$	15,903	$	2,183

(1)Limited partnership income (losses) include 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 gains (losses)

Realized and unrealized gains (losses) on investments were as follows for the three months ended March 31:



(in thousands)	2024		2023
Available-for-sale securities:
Gross realized gains	$	270	$	206
Gross realized losses	(532)		(1,825)
Net realized losses on available-for-sale securities	(262)		(1,619)
Equity securities	2,115		(3,663)

Net realized and unrealized investment gains (losses)	$	1,853	$	(5,282)

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 for the three months ended March 31:



(in thousands)	2024		2023
Equity securities:
Net gains (losses) recognized during the period	$	2,115	$	(3,663)
Less: net gains (losses) recognized on securities sold	67		(2,504)
Net unrealized gains (losses) recognized on securities held at reporting date	$	2,048	$	(1,159)

Net impairment losses recognized in earnings

Impairments on investments were as follows for the three months ended March 31:



(in thousands)	2024		2023
Available-for-sale securities:
Intent to sell	$	(174)	$	(1,432)
Credit impaired	(164)		(201)
Total available-for-sale securities	(338)		(1,633)
Held-to-maturity securities - expected credit losses	(2,167)		—

Other loans receivable - expected credit losses	(172)		0
Net impairment losses recognized in earnings	$	(2,677)	$	(1,633)