Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-34257 | |
Entity Registrant Name | UNITED FIRE GROUP, INC | |
Entity Incorporation, State or Country Code | IA | |
Entity Tax Identification Number | 45-2302834 | |
Entity Address, Address Line One | 118 Second Avenue SE | |
Entity Address, City or Town | Cedar Rapids | |
Entity Address, State or Province | IA | |
Entity Address, Postal Zip Code | 52401 | |
City Area Code | 319 | |
Local Phone Number | 399-5700 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | UFCS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 25,265,351 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000101199 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fixed maturities | ||
Available-for-sale, at fair value (amortized cost $1,794,325 in 2023 and $1,662,680 in 2022) | $ 1,638,512 | $ 1,551,336 |
Equity securities at fair value (cost $29,238 in 2023 and $75,292 in 2022) | 51,217 | 169,106 |
Mortgage loans | 45,589 | 37,947 |
Less: allowance for mortgage loan losses | 55 | 49 |
Mortgage loans, net | 45,534 | 37,898 |
Other long-term investments | 93,836 | 86,276 |
Short-term investments | 0 | 275 |
Total investments | 1,829,099 | 1,844,891 |
Cash and cash equivalents | 69,150 | 96,650 |
Accrued investment income | 17,269 | 14,480 |
Premiums receivable (net of allowance for doubtful accounts of $1,768 in 2023 and $1,575 in 2022) | 475,632 | 365,729 |
Deferred policy acquisition costs | 125,292 | 104,225 |
Property and equipment (primarily land and buildings, at cost, less accumulated depreciation of $66,257 in 2023 and $59,566 in 2022) | 133,887 | 133,113 |
Reinsurance receivables and recoverables (net of allowance for credit losses of $130 in 2023 and $82 in 2022) | 211,645 | 170,953 |
Prepaid reinsurance premiums | 21,425 | 11,300 |
Intangible assets | 4,793 | 5,324 |
Deferred tax asset | 36,591 | 15,531 |
Income taxes receivable | 36,469 | 31,418 |
Other assets | 90,527 | 88,672 |
TOTAL ASSETS | 3,051,779 | 2,882,286 |
Liabilities | ||
Losses and loss settlement expenses | 1,636,918 | 1,497,274 |
Unearned premiums | 560,663 | 474,388 |
Accrued expenses and other liabilities | 159,261 | 120,510 |
Long term debt | 50,000 | 50,000 |
TOTAL LIABILITIES | 2,406,842 | 2,142,172 |
Stockholders’ Equity | ||
Common stock, $0.001 par value; authorized 75,000,000 shares; 25,263,742 and 25,210,541 shares issued and outstanding in 2023 and 2022, respectively | 25 | 25 |
Additional paid-in capital | 209,931 | 207,030 |
Retained earnings | 559,126 | 620,555 |
Accumulated other comprehensive income, net of tax | (124,145) | (87,496) |
TOTAL STOCKHOLDERS’ EQUITY | 644,937 | 740,114 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 3,051,779 | $ 2,882,286 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Available-for-sale, amortized cost | $ 1,794,325 | $ 1,662,680 |
Equity securities, cost | 29,238 | 75,292 |
Allowance for doubtful accounts | 1,768 | 1,575 |
Property and equipment accumulated depreciation | 66,257 | 59,566 |
Reinsurance receivables and recoverables, allowance for credit losses | $ 130 | $ 82 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 25,263,742 | 25,210,541 |
Common stock, shares outstanding (in shares) | 25,263,742 | 25,210,541 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues | ||||
Net premiums earned | $ 259,456 | $ 238,256 | $ 770,221 | $ 703,746 |
Investment income, net of investment expenses | 16,459 | 11,606 | 40,508 | 32,062 |
Net investment gains (losses) (includes reclassifications for net unrealized investment gains (losses) on available-for-sale securities of $(79) and $(771) in 2023 and $(1,079) and $(1,478) in 2022; previously included in accumulated other comprehensive income (loss)) | (1,960) | (14,250) | (2,581) | (35,647) |
Other income (loss) | 0 | (39) | 0 | (38) |
Total revenues | 273,955 | 235,573 | 808,148 | 700,123 |
Benefits, Losses and Expenses | ||||
Losses and loss settlement expenses | 172,798 | 182,411 | 598,125 | 464,295 |
Amortization of deferred policy acquisition costs | 62,709 | 53,107 | 181,700 | 156,116 |
Other underwriting expenses (includes reclassifications for employee benefit costs of $51 and $155 in 2023 and $900 and $2,700 in 2022; previously included in accumulated other comprehensive income (loss)) | 29,275 | 30,487 | 89,784 | 87,885 |
Interest expense | 797 | 797 | 2,391 | 2,391 |
Total benefits, losses and expenses | 265,579 | 266,802 | 872,000 | 710,687 |
Income (loss) before income taxes | 8,376 | (31,229) | (63,852) | (10,564) |
Federal income tax expense (benefit) (includes reclassifications of $28 and $195 in 2023 and $416 and $877 in 2022; previously included in accumulated other comprehensive income (loss)) | 1,996 | (8,248) | (14,544) | (5,475) |
Net Income (loss) | 6,380 | (22,981) | (49,308) | (5,089) |
Other comprehensive income (loss) | ||||
Change in net unrealized appreciation on investments | (43,245) | (65,415) | (44,857) | (199,071) |
Change in liability for underfunded employee benefit plans | (820) | (4,591) | (2,460) | (13,774) |
Other comprehensive income (loss), before tax and reclassification adjustments | (44,065) | (70,006) | (47,317) | (212,845) |
Income tax effect | 9,253 | 14,701 | 9,937 | 44,697 |
Other comprehensive income (loss), after tax, before reclassification adjustments | (34,812) | (55,305) | (37,380) | (168,148) |
Reclassification adjustment for net investment losses included in income | 79 | 1,079 | 771 | 1,478 |
Reclassification adjustment for employee benefit costs included in expense | 51 | 900 | 155 | 2,700 |
Total reclassification adjustments, before tax | 130 | 1,979 | 926 | 4,178 |
Income tax effect | (28) | (416) | (195) | (877) |
Total reclassification adjustments, after tax | 102 | 1,563 | 731 | 3,301 |
Comprehensive income (loss) | $ (28,330) | $ (76,723) | $ (85,957) | $ (169,936) |
Diluted weighted average common shares outstanding (in shares) | 25,579,334 | 25,188,958 | 25,244,502 | 25,146,318 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ 0.25 | $ (0.91) | $ (1.95) | $ (0.20) |
Diluted (in dollars per share) | $ 0.25 | $ (0.91) | $ (1.95) | $ (0.20) |
Consolidated Statements of In_2
Consolidated Statements of Income and Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Reclassification adjustment for net realized gains (losses) included in income | $ (79) | $ (1,079) | $ (771) | $ (1,478) |
Reclassification adjustment for employee benefit costs included in expense | (51) | (900) | (155) | (2,700) |
Income tax effect | $ 28 | $ 416 | $ 195 | $ 877 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional paid-in capital | Retaining Earnings | Accumulated other comprehensive income | |
Balance, beginning (in shares) at Dec. 31, 2021 | 25,082,104 | |||||
Beginning balance at Dec. 31, 2021 | $ 879,121 | $ 25 | $ 203,375 | $ 621,384 | $ 54,337 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 28,349 | 28,349 | ||||
Stock based compensation (in shares) | 37,140 | |||||
Stock based compensation | 631 | 631 | ||||
Dividends on common stock | (3,767) | (3,767) | ||||
Change in net unrealized investment appreciation (depreciation) | [1] | (65,793) | (65,793) | |||
Change in liability for underfunded employee benefit plans | [2] | (2,916) | (2,916) | |||
Balance, ending (in shares) at Mar. 31, 2022 | 25,119,244 | |||||
Ending balance at Mar. 31, 2022 | 835,625 | $ 25 | 204,006 | 645,966 | (14,372) | |
Balance, beginning (in shares) at Dec. 31, 2021 | 25,082,104 | |||||
Beginning balance at Dec. 31, 2021 | 879,121 | $ 25 | 203,375 | 621,384 | 54,337 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (5,089) | |||||
Balance, ending (in shares) at Sep. 30, 2022 | 25,191,414 | |||||
Ending balance at Sep. 30, 2022 | 700,795 | $ 25 | 206,811 | 604,469 | (110,510) | |
Balance, beginning (in shares) at Mar. 31, 2022 | 25,119,244 | |||||
Beginning balance at Mar. 31, 2022 | 835,625 | $ 25 | 204,006 | 645,966 | (14,372) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (10,457) | (10,457) | ||||
Stock based compensation (in shares) | 67,404 | |||||
Stock based compensation | 2,159 | 2,159 | ||||
Dividends on common stock | (4,028) | (4,028) | ||||
Change in net unrealized investment appreciation (depreciation) | [1] | (39,480) | (39,480) | |||
Change in liability for underfunded employee benefit plans | [2] | (2,916) | (2,916) | |||
Balance, ending (in shares) at Jun. 30, 2022 | 25,186,648 | |||||
Ending balance at Jun. 30, 2022 | 780,903 | $ 25 | 206,165 | 631,481 | (56,768) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (22,981) | (22,981) | ||||
Stock based compensation (in shares) | 4,766 | |||||
Stock based compensation | 646 | 646 | ||||
Dividends on common stock | (4,031) | (4,031) | ||||
Change in net unrealized investment appreciation (depreciation) | [1] | (50,826) | (50,826) | |||
Change in liability for underfunded employee benefit plans | [2] | (2,916) | (2,916) | |||
Balance, ending (in shares) at Sep. 30, 2022 | 25,191,414 | |||||
Ending balance at Sep. 30, 2022 | $ 700,795 | $ 25 | 206,811 | 604,469 | (110,510) | |
Balance, beginning (in shares) at Dec. 31, 2022 | 25,210,541 | 25,210,541 | ||||
Beginning balance at Dec. 31, 2022 | $ 740,114 | $ 25 | 207,030 | 620,555 | (87,496) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 694 | 694 | ||||
Stock based compensation (in shares) | 21,012 | |||||
Stock based compensation | 980 | 980 | ||||
Dividends on common stock | (4,037) | (4,037) | ||||
Change in net unrealized investment appreciation (depreciation) | [3] | 14,650 | 14,650 | |||
Change in liability for underfunded employee benefit plans | [4] | (607) | (607) | |||
Balance, ending (in shares) at Mar. 31, 2023 | 25,231,553 | |||||
Ending balance at Mar. 31, 2023 | $ 751,795 | $ 25 | 208,010 | 617,213 | (73,453) | |
Balance, beginning (in shares) at Dec. 31, 2022 | 25,210,541 | 25,210,541 | ||||
Beginning balance at Dec. 31, 2022 | $ 740,114 | $ 25 | 207,030 | 620,555 | (87,496) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ (49,308) | |||||
Balance, ending (in shares) at Sep. 30, 2023 | 25,263,742 | 25,263,742 | ||||
Ending balance at Sep. 30, 2023 | $ 644,937 | $ 25 | 209,931 | 559,126 | (124,145) | |
Balance, beginning (in shares) at Mar. 31, 2023 | 25,231,553 | |||||
Beginning balance at Mar. 31, 2023 | 751,795 | $ 25 | 208,010 | 617,213 | (73,453) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (56,382) | (56,382) | ||||
Stock based compensation (in shares) | 31,396 | |||||
Stock based compensation | 977 | 977 | ||||
Dividends on common stock | (4,042) | (4,042) | ||||
Change in net unrealized investment appreciation (depreciation) | [3] | (15,376) | (15,376) | |||
Change in liability for underfunded employee benefit plans | [4] | (606) | (606) | |||
Balance, ending (in shares) at Jun. 30, 2023 | 25,262,949 | |||||
Ending balance at Jun. 30, 2023 | 676,365 | $ 25 | 208,987 | 556,788 | (89,435) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 6,380 | 6,380 | ||||
Stock based compensation (in shares) | 793 | |||||
Stock based compensation | 944 | 944 | ||||
Dividends on common stock | (4,042) | (4,042) | ||||
Change in net unrealized investment appreciation (depreciation) | [3] | (34,103) | (34,103) | |||
Change in liability for underfunded employee benefit plans | [4] | $ (607) | (607) | |||
Balance, ending (in shares) at Sep. 30, 2023 | 25,263,742 | 25,263,742 | ||||
Ending balance at Sep. 30, 2023 | $ 644,937 | $ 25 | $ 209,931 | $ 559,126 | $ (124,145) | |
[1]The change in net unrealized appreciation (depreciation) is net of reclassification adjustments and income taxes.[2]The change in liability for underfunded employee benefit plans is net of reclassification adjustments and income taxes.[3]The change in net unrealized appreciation (depreciation) is net of reclassification adjustments and income taxes.[4]The change in liability for underfunded employee benefit plans is net of reclassification adjustments and income taxes. |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Dividends on common stock (in dollars per share) | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.15 | $ 0.15 | $ 0.15 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash Flows From Operating Activities | ||
Net income | $ (49,308) | $ (5,089) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities | ||
Net accretion of bond premium | 5,238 | 6,969 |
Depreciation and amortization | 7,841 | 8,079 |
Stock-based compensation expense | 3,124 | 2,590 |
Net investment (gains) losses | 2,384 | 35,647 |
Net cash flows from equity and trading investments | 116,080 | 29,725 |
Deferred income tax expense (benefit) | (11,633) | (9,224) |
Changes in: | ||
Accrued investment income | (2,789) | (1,773) |
Premiums receivable | (109,903) | (57,570) |
Deferred policy acquisition costs | (21,067) | (14,930) |
Reinsurance receivables | (40,692) | (28,145) |
Prepaid reinsurance premiums | (10,125) | (2,814) |
Income taxes receivable | (5,051) | (7,215) |
Other assets | (1,596) | 6,758 |
Losses and loss settlement expenses | 139,644 | (49,757) |
Unearned premiums | 86,275 | 48,560 |
Accrued expenses and other liabilities | 36,446 | 1,403 |
Other, net | 4,638 | 6,993 |
Cash from operating activities | 198,814 | (24,704) |
Net cash provided by (used in) operating activities | 149,506 | (29,793) |
Cash Flows From Investing Activities | ||
Proceeds from sale of available-for-sale investments | 48,749 | 83,409 |
Proceeds from call and maturity of available-for-sale investments | 46,397 | 145,618 |
Proceeds from sale of other investments | 3,482 | 3,243 |
Purchase of investments in mortgage loans | (8,137) | (103) |
Purchase of investments available-for-sale | (232,216) | (262,359) |
Purchase of other investments | (14,899) | (5,447) |
Net purchases and sales of property and equipment | (8,037) | (2,675) |
Net cash provided by (used in) investing activities | (164,661) | (38,314) |
Cash Flows From Financing Activities | ||
Issuance of common stock | (223) | 846 |
Payment of cash dividends | (12,122) | (11,826) |
Net cash provided by (used in) financing activities | (12,345) | (10,980) |
Net Change in Cash and Cash Equivalents | (27,500) | (79,087) |
Cash and Cash Equivalents at Beginning of Period | 96,650 | 132,104 |
Cash and Cash Equivalents at End of Period | 69,150 | 53,017 |
Supplemental Disclosures of Cash Flow Information | ||
Income taxes paid | 1,336 | 21,537 |
Interest paid | $ 2,391 | $ 2,391 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | NATURE OF OPERATIONS AND BASIS OF PRESENTATION Nature of Business United Fire Group, Inc. ("UFG," the "Registrant," the "Company," "we," "us," or "our") and its consolidated subsidiaries and affiliates are engaged in the business of writing property and casualty insurance through a network of independent agencies. Our insurance company subsidiaries are licensed as property and casualty insurers in 50 states and the District of Columbia. Basis of Presentation The unaudited consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial reporting and with the instructions to Form 10-Q and Regulation S-X promulgated by the SEC. Certain financial information that is included in our Annual Report on Form 10-K/A for the year ended December 31, 2022, including certain financial statement footnote disclosures, is not required by the rules and regulations of the SEC for interim financial reporting and has been condensed or omitted. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The financial statement categories that are most dependent on management estimates and assumptions include: investments; deferred policy acquisition costs; reinsurance receivables and recoverables; loss settlement expenses; and pension and postretirement benefit obligations. Management believes the accompanying unaudited Consolidated Financial Statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. All significant intercompany transactions have been eliminated in consolidation. The results reported for the interim periods are not necessarily indicative of the results of operations that may be expected for the year. The unaudited Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K/A for the year ended December 31, 2022. Segment Information Our property and casualty insurance business is reported as one business segment. The property and casualty insurance business profit or loss is consistent with consolidated reporting as disclosed on the Consolidated Statements of Income and Comprehensive Income. We analyze the property and casualty insurance business results based on profitability (i.e., loss ratios), expenses and return on equity. The Company's property and casualty insurance business was determined using a management approach to make decisions on operating matters, including allocating resources, assessing performance, determining which products to market and sell, determining distribution networks with insurance agents and monitoring the regulatory environment. The property and casualty insurance business products have similar economic characteristics and use a similar marketing and distribution strategy with our independent agents. We will continue to evaluate our operations on the basis of both statutory accounting principles prescribed or permitted by our states of domicile and GAAP. Lloyd's Syndicates On January 1, 2021, the Company became a member of Lloyd's of London ("Lloyd's") through McIntyre Cedar Corporate Member LLP. As a member of Lloyd's, the Company is required to maintain capital at Lloyd's, referred to as Funds at Lloyd's ("FAL"), to support underwriting of property and casualty and reinsurance business by Syndicate 1492, Syndicate 1729, Syndicate 1969, Syndicate 1971, Syndicate 4747, Syndicate 2988, Syndicate 1699 and Syndicate 5623. At September 30, 2023, the Company's FAL investments were comprised of cash of $24,383 on deposit with Lloyd's in order to satisfy these FAL requirements. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash, money market accounts, cash on deposit and held at Lloyd's and non-negotiable certificates of deposit with original maturities of three months or less. Deferred Policy Acquisition Costs ("DAC") Certain costs associated with underwriting new business (primarily commissions, premium taxes and variable underwriting and policy issue expenses associated with successful acquisition efforts) are deferred. The following table is a summary of the components of DAC, including the related amortization recognized for the nine-month period ended September 30, 2023. Total Recorded asset at beginning of period $ 104,225 Underwriting costs deferred 202,768 Amortization of deferred policy acquisition costs (181,700) Recorded asset at September 30, 2023 $ 125,292 Property and casualty insurance policy acquisition costs deferred are amortized as premium revenue is recognized. The method followed in computing DAC limits the amount of such deferred costs to their estimated realizable value. This takes into account the premium to be earned, losses and loss settlement expenses expected to be incurred and certain other costs expected to be incurred as the premium is earned. Other Intangible Assets Our other intangible assets, which consist primarily of agency relationships, trade names, state insurance licenses, and software, are being amortized using the straight-line method over periods ranging from two years to 15 years, with the exception of state insurance licenses, which are indefinite-lived and not amortized. Long Term Debt The Company executed a private placement debt transaction on December 15, 2020 between United Fire & Casualty Company ("UF&C"), and Federated Mutual Insurance Company, a mutual insurance company domiciled in Minnesota ("Federated Mutual"), and Federated Life Insurance Company, an insurance company domiciled in Minnesota ("Federated Life" and, together with Federated Mutual, the "Note Purchasers"). UF&C sold an aggregate principal amount of $50,000 of notes due 2040 to the Note Purchasers. One note with a principal amount of $35,000 was issued to Federated Mutual and one note with a principal amount of $15,000 was issued to Federated Life subject to the terms of their respective notes. The notes are presented as a long term debt liability in the Consolidated Balance Sheets and as a financing activity in the Consolidated Statement of Cash Flows. Interest payments under the long term debt are paid quarterly on March 15, June 15, September 15 and December 15 of each year (each such date, an "Interest Payment Date"). The interest rate will equal the rate that corresponds to the A.M. Best Co. (or its successor's) financial strength rating for members of the United Fire & Casualty Pooled Group as of the applicable Interest Payment Date. For the nine-month period ended September 30, 2023, interest totaled $2,391 and is included in accrued expenses and other liabilities in the Consolidated Balance Sheets and as interest expense in the Consolidated Statements of Income and Comprehensive Income. Payment of interest is subject to approval by the Iowa Insurance Division. Income Taxes Deferred tax assets and liabilities are established based on differences between the financial statement bases of assets and liabilities and the tax bases of those same assets and liabilities, using the currently enacted statutory tax rates. Deferred income tax expense is measured by the year-to-year change in the net deferred tax asset or liability, except for certain changes in deferred tax amounts that affect stockholders' equity and do not impact federal income tax expense. We reported a consolidated federal income tax benefit of $14,544 for the nine-month period ended September 30, 2023 compared to an income tax benefit of $5,475 during the same period of 2022. Our effective tax rate for 2023 and 2022 is different than the federal statutory rate of 21 percent, due principally to the net effect of tax-exempt municipal bond interest income. The Company performs a quarterly review of its tax positions and makes a determination of whether it is more likely than not that the tax position will be sustained upon examination. If, based on this review, it appears not more likely than not that the positions will be sustained, the Company will calculate any unrecognized tax benefits and, if necessary, calculate and accrue any related interest and penalties. We did not recognize any liability for unrecognized tax benefits at September 30, 2023 or December 31, 2022. In addition, we have not accrued for interest and penalties related to unrecognized tax benefits. However, if interest and penalties would need to be accrued related to unrecognized tax benefits, such amounts would be recognized as a component of federal income tax expense. Deferred tax assets are reduced by a valuation allowance when management believes it is more likely than not that some, or all, of the deferred taxes will not be realized. After considering all positive and negative evidence of taxable income in the carryback and carryforward periods and our tax planning strategy of holding debt securities with unrealized losses to maturity or recovery, we believe it is more likely than not that all the deferred assets will be realized. As a result, we have no valuation allowance at September 30, 2023 or December 31, 2022. For the nine-month periods ended September 30, 2023 and 2022, we made payments for income taxes totaling $1,336 and $21,537, respectively. We did not receive a federal tax refund for the nine-month period ended September 30, 2023. For the nine-month period ended September 30, 2022, we received a federal tax refund of $10,789. We file a consolidated federal income tax return. We also file income tax returns in various state jurisdictions. We are no longer subject to federal or state income tax examination for years before 2018. Leases The Company determines if a contract contains a lease at inception of the contract. The Company's inventory of leases consists of operating leases which are recorded as a lease obligation liability disclosed in the "Accrued expenses and other liabilities" line on the Consolidated Balance Sheets and as a lease right-of-use asset disclosed in the "Other assets" line on the Consolidated Balance Sheets. The Company's operating leases consist of office space, vehicles, computer equipment and office equipment. The lease right-of-use asset represents the Company's right to use each underlying asset for the lease term and the lease obligation liability represents the Company's obligation over the lease term. The Company's lease obligation is recorded at the present value of the lease payments based on the term of the applied lease. Short-term leases of 12 months or less are recorded on the Consolidated Balance Sheets and lease payments are recognized on the Consolidated Statements of Income and Comprehensive Income. For more information on leases refer to Note 10 "Leases." Variable Interest Entities The Company and certain related parties are equity investors in one investment which the Company determined is a variable interest entity ("VIE") as a result of participation in the risks and rewards of the VIE based on the objectives and strategies of the VIE. The VIE is a limited liability company that primarily invests in commercial real estate. The Company and certain related parties are not the primary beneficiaries largely due to their inability to influence management or direct the activities that most significantly impact the VIE's economic performance. Based on these facts and circumstances, the Company has a variable interest in the VIE, but has not consolidated the VIE's financial results as it is not the primary beneficiary. The Company's investment is reported in other long-term investments in the Consolidated Balance Sheets and accounted for under the equity method of accounting. The fair value of the VIE at September 30, 2023 was $2,650 and there are no future funding commitments. Credit Losses The Company recognizes credit losses for our available-for-sale fixed-maturity portfolio, reinsurance receivables, mortgage loans and premium receivables by setting up allowances which are remeasured each reporting period and recorded in the Consolidated Statements of Income and Comprehensive Income. For our available-for-sale fixed-maturity portfolio an allowance for credit losses is recorded net of available-for-sale fixed maturities in the Consolidated Balance Sheets and a corresponding credit loss recognized as a realized loss or gain in the Consolidated Statements of Income and Comprehensive Income. The Company determines if an allowance for credit losses is recorded based on a number of factors including current economic conditions, management's expectations of future economic conditions and performance indicators, such as market value versus amortized cost, investment spreads widening or contracting, rating actions, payment and default history. For more information on credit losses and the allowance for credit losses for our available-for-sale fixed-maturity portfolio, see Note 2 "Summary of Investments." An allowance for mortgage loan losses is established based on historical loss information of the collective pool of the Company's commercial mortgage loan investments which have similar risk characteristics. To calculate the allowance for mortgage loan losses, the Company starts with historical loan experience to predict the future expected losses and then layers on a market-linked adjustment. On a quarterly basis, quantitative credit risk metrics, including, for example, cash-flows, rent rolls and financial statements are reviewed for each loan to determine if it is performing in line with its expectations. This allowance is presented as a separate line in the Consolidated Balance Sheets beneath the asset value as well as presented net and recorded through "Net investment gains (losses)" in the Consolidated Statements of Income and Comprehensive Income. For more information on credit losses and the allowance for credit losses for our investment in mortgage loans see Note 3 "Fair Value of Financial Instruments." For reinsurance receivables, the Company's model estimates expected credit loss by multiplying the exposure at default by both the probability of default and loss given default ("LGD"). The LGD is estimated by the rating of the reinsurer, historical relationship with UFG, existence of letters of credit and known regulation for which the Company may be held accountable. The ultimate LGD percentage is estimated after considering Moody's experience with unsecured year one bond recovery rates from 1983-2017. The allowance calculated as of September 30, 2023 is recorded through the line "Reinsurance receivables and recoverables" in the Consolidated Balance Sheets and through the line "Other underwriting expenses" in the Consolidated Statements of Income and Other Comprehensive Income. As of September 30, 2023, the Company had a credit loss allowance for reinsurance receivables of $130. Rollforward of credit loss allowance for reinsurance receivables: As of September 30, 2023 Beginning balance, January 1, 2023 $ 82 Current-period provision for expected credit losses 48 Ending balance of the allowance for reinsurance receivables, September 30, 2023 $ 130 With respect to premiums receivable, the Company utilizes an aging method to estimate credit losses. An allowance for doubtful accounts is based on a periodic evaluation of the aging and collectability of amounts due from agents and policyholders. "Premiums receivable" are presented in the Consolidated Balance Sheets net of an estimated allowance for doubtful accounts and recorded through "Other underwriting expenses" in the Consolidated Statements of Income and Comprehensive Income. Subsequent Events In the preparation of the accompanying financial statements, the Company has evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure in the Company's financial statements. Recently Issued Accounting Standards Accounting Standards Adopted in 2022 Inflation Reduction Act |
Summary of Investments
Summary of Investments | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investments | SUMMARY OF INVESTMENTS Fair Value of Investments A reconciliation of the amortized cost to fair value of investments in our available-for-sale fixed maturity portfolio, presented on a consolidated basis, as of September 30, 2023 and December 31, 2022, is provided below: September 30, 2023 Type of Investment Cost or Amortized Cost Gross Unrealized Appreciation Gross Unrealized Depreciation Fair Value Allowance for Credit Losses Carrying Value AVAILABLE-FOR-SALE Fixed maturities: Bonds U.S. Treasury $ 68,133 $ — $ 1,260 $ 66,873 $ — $ 66,873 U.S. government agency 104,695 16 12,813 91,898 — 91,898 States, municipalities and political subdivisions General obligations: Midwest 58,724 — 1,843 56,881 — 56,881 Northeast 11,440 — 441 10,999 — 10,999 South 55,335 — 2,201 53,134 — 53,134 West 78,044 — 2,718 75,326 — 75,326 Special revenue: Midwest 101,204 1 4,327 96,878 — 96,878 Northeast 52,836 — 2,284 50,552 — 50,552 South 168,395 — 8,895 159,500 — 159,500 West 105,521 — 5,005 100,516 — 100,516 Foreign bonds 21,251 — 2,915 18,336 — 18,336 Public utilities 143,162 14 15,759 127,417 — 127,417 Corporate bonds Energy 45,368 — 3,768 41,600 — 41,600 Industrials 73,635 38 7,705 65,968 — 65,968 Consumer goods and services 100,300 — 11,794 88,506 — 88,506 Health care 37,903 — 6,366 31,537 — 31,537 Technology, media and telecommunications 90,285 — 10,037 80,248 — 80,248 Financial services 145,477 — 12,315 133,162 126 133,036 Mortgage-backed securities 24,470 — 3,463 21,007 — 21,007 Collateralized mortgage obligations Government national mortgage association 163,893 — 17,223 146,670 — 146,670 Federal home loan mortgage corporation 88,565 — 16,716 71,849 — 71,849 Federal national mortgage association 52,114 — 6,227 45,887 — 45,887 Asset-backed securities 3,575 456 137 3,894 — 3,894 Total Available-for-Sale Fixed Maturities $ 1,794,325 $ 525 $ 156,212 $ 1,638,638 $ 126 $ 1,638,512 December 31, 2022 Type of Investment Cost or Amortized Cost Gross Unrealized Appreciation Gross Unrealized Depreciation Fair Value Allowance for Credit Losses Carrying Value AVAILABLE-FOR-SALE Fixed maturities: Bonds U.S. Treasury $ 15,684 $ — $ 1,009 $ 14,675 $ — $ 14,675 U.S. government agency 94,092 35 9,721 84,406 — 84,406 States, municipalities and political subdivisions General obligations: Midwest 61,191 185 263 61,113 — 61,113 Northeast 15,518 18 73 15,463 — 15,463 South 64,851 57 927 63,981 — 63,981 West 87,094 163 712 86,545 — 86,545 Special revenue: Midwest 103,107 224 1,065 102,266 — 102,266 Northeast 55,292 76 1,148 54,220 — 54,220 South 184,108 278 3,529 180,857 — 180,857 West 113,594 275 1,657 112,212 — 112,212 Foreign bonds 36,129 — 4,480 31,649 — 31,649 Public utilities 138,752 65 13,406 125,411 — 125,411 Corporate bonds Energy 36,507 — 3,298 33,209 — 33,209 Industrials 58,334 62 5,554 52,842 — 52,842 Consumer goods and services 100,539 — 10,598 89,941 — 89,941 Health care 32,987 24 5,419 27,592 — 27,592 Technology, media and telecommunications 67,193 — 7,253 59,940 — 59,940 Financial services 132,849 851 9,408 124,292 3 124,289 Mortgage-backed securities 20,450 — 2,750 17,700 — 17,700 Collateralized mortgage obligations Government national mortgage association 97,839 — 13,291 84,548 — 84,548 Federal home loan mortgage corporation 92,366 — 13,528 78,838 — 78,838 Federal national mortgage association 50,272 5 4,891 45,386 — 45,386 Asset-backed securities 3,932 466 145 4,253 — 4,253 Total Available-for-Sale Fixed Maturities $ 1,662,680 $ 2,784 $ 114,125 $ 1,551,339 $ 3 $ 1,551,336 Maturities The amortized cost and fair value of available-for-sale fixed maturity securities at September 30, 2023, by contractual maturity, are shown in the following tables. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Asset-backed securities, mortgage-backed securities and collateralized mortgage obligations may be subject to prepayment risk and are therefore not categorized by contractual maturity. Maturities Available-For-Sale September 30, 2023 Amortized Cost Fair Value Due in one year or less $ 84,646 $ 84,052 Due after one year through five years 518,815 496,253 Due after five years through 10 years 530,822 476,969 Due after 10 years 327,424 292,056 Asset-backed securities 3,575 3,894 Mortgage-backed securities 24,470 21,007 Collateralized mortgage obligations 304,573 264,407 $ 1,794,325 $ 1,638,638 Net Investment Gains and Losses Net gains (losses) on disposition of investments are computed using the specific identification method and are included in the computation of net income. A summary of the components of net investment gains (losses) is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net investment gains (losses): Fixed maturities: Available-for-sale $ (19) $ (98) $ (445) $ (1,397) Allowance for credit losses (125) (91) (123) (91) Equity securities Change in the fair value 204 (13,078) (1,960) (32,403) Sales (2,085) (93) 150 (1,767) Mortgage loans allowance for credit losses 1 — (5) 5 Other long-term investments 64 (187) (245) (229) Real estate — (703) 47 235 Total net investment gains (losses) $ (1,960) $ (14,250) $ (2,581) $ (35,647) The proceeds and gross realized gains (losses) on the sale of available-for-sale fixed maturity securities are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Proceeds from sales $ 4,940 $ 18,399 $ 48,749 $ 83,409 Gross realized gains — 12 121 459 Gross realized losses 19 110 566 1,857 Funding Commitment Pursuant to agreements with our limited liability partnership investments, we are contractually committed through July 10, 2030 to make capital contributions upon the request of certain of the partnerships. Our remaining potential contractual obligation was $32,248 at September 30, 2023. In addition, the Company invested $25,000 in December 2019 in a limited liability partnership investment fund which is subject to a three-year lockup with a 60-day minimum notice, with four possible repurchase dates per year after the three-year lockup period has concluded. The fair value of the investment at September 30, 2023 was $25,218 and there are no remaining capital contributions with this investment. Unrealized Appreciation and Depreciation A summary of the changes in net unrealized investment appreciation during the reporting period is as follows: Nine Months Ended September 30, 2023 2022 Change in net unrealized investment appreciation (depreciation) Available-for-sale fixed maturities $ (44,087) $ (197,594) Income tax effect 9,258 41,495 Total change in net unrealized investment appreciation (depreciation), net of tax $ (34,829) $ (156,099) Credit Risk An allowance for credit losses is recorded based on a number of factors including current economic conditions, management's expectations of future economic conditions and performance indicators, such as market value versus amortized cost, investment spreads widening or contracting, rating actions, payment and default history. The following table contains a rollforward of the allowance for credit losses for available-for-sale fixed maturity securities at September 30, 2023. Rollforward of allowance for credit losses for available-for-sale fixed maturity securities: As of September 30, 2023 Beginning balance, January 1, 2023 $ 3 Additions to the allowance for credit losses for which credit losses were not previously recorded 123 Reductions for securities sold during the period (realized) — Write-offs charged against the allowance — Recoveries of amounts previously written off — Ending balance, September 30, 2023 $ 126 Fixed Maturities Unrealized Depreciation The following tables summarize our fixed maturity securities that were in an unrealized loss position reported on a consolidated basis at September 30, 2023 and December 31, 2022. The securities are presented by the length of time they have been continuously in an unrealized loss position. Non-credit related unrealized losses are recognized as a component of other comprehensive income and represent other market movements that are not credit related, for example interest rate changes. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature. September 30, 2023 Less than 12 months 12 months or longer Total Type of Investment Number Fair Gross Unrealized Number Fair Gross Unrealized Depreciation Fair Gross Unrealized Depreciation AVAILABLE-FOR-SALE Fixed maturities: Bonds U.S. Treasury 5 $ 54,358 $ 390 6 $ 12,515 $ 870 $ 66,873 $ 1,260 U.S. government agency 3 10,643 336 25 75,239 12,477 85,882 12,813 States, municipalities and political subdivisions General obligations Midwest 30 45,359 1,360 3 10,357 483 55,716 1,843 Northeast 4 7,716 214 1 3,283 227 10,999 441 South 23 37,383 989 9 15,751 1,212 53,134 2,201 West 26 54,944 1,498 8 20,382 1,220 75,326 2,718 Special revenue Midwest 38 71,273 2,694 11 22,054 1,633 93,327 4,327 Northeast 11 27,061 956 8 23,491 1,328 50,552 2,284 South 42 95,076 3,480 33 64,424 5,415 159,500 8,895 West 39 59,134 2,017 19 41,380 2,988 100,514 5,005 Foreign bonds — — — 9 18,336 2,915 18,336 2,915 Public utilities 7 17,689 621 49 109,217 15,138 126,906 15,759 Corporate bonds Energy 4 8,604 294 15 32,996 3,474 41,600 3,768 Industrials 6 14,842 331 22 47,010 7,374 61,852 7,705 Consumer goods and services 7 22,863 976 28 65,643 10,818 88,506 11,794 Health care 3 6,604 223 11 24,933 6,143 31,537 6,366 Technology, media and telecommunications 5 17,505 865 28 61,492 9,172 78,997 10,037 Financial services 10 24,655 1,090 44 108,507 11,225 133,162 12,315 Mortgage-backed securities 4 5,656 195 48 15,352 3,268 21,008 3,463 Collateralized mortgage obligations Government National Mortgage Association 18 75,767 1,169 40 70,903 16,054 146,670 17,223 Federal Home Loan Mortgage Corporation 3 7,655 2,523 32 64,194 14,193 71,849 16,716 Federal National Mortgage Association 6 14,078 421 20 31,810 5,806 45,888 6,227 Asset-backed securities — — — 1 3,095 137 3,095 137 Total Available-for-Sale Fixed Maturities 294 $ 678,865 $ 22,642 470 $ 942,364 $ 133,570 $ 1,621,229 $ 156,212 The unrealized losses on our investments in available-for-sale fixed maturities were the result of interest rate movements. We have no intent to sell, and it is more likely than not that we will not be required to sell these securities until the fair value recovers to at least equal our cost basis or the securities mature. December 31, 2022 Less than 12 months 12 months or longer Total Type of Investment Number Fair Gross Unrealized Depreciation Number Fair Gross Unrealized Depreciation Fair Gross Unrealized Depreciation AVAILABLE-FOR-SALE Fixed maturities: Bonds U.S. Treasury 4 $ 6,656 $ 212 4 $ 8,019 $ 797 $ 14,675 $ 1,009 U.S. government agency 24 70,158 5,606 3 11,242 4,115 81,400 9,721 States, municipalities and political subdivisions General obligations Midwest 16 29,089 263 — — — 29,089 263 Northeast 4 8,576 73 — — — 8,576 73 South 24 48,235 927 — — — 48,235 927 West 27 62,652 711 — — — 62,652 711 Special revenue Midwest 35 67,101 1,065 — — — 67,101 1,065 Northeast 14 37,484 1,148 — — — 37,484 1,148 South 58 126,388 3,124 1 866 405 127,254 3,529 West 39 83,622 1,658 — — — 83,622 1,658 Foreign bonds 9 21,377 1,861 5 10,272 2,619 31,649 4,480 Public utilities 45 101,867 8,737 9 19,979 4,669 121,846 13,406 Corporate bonds Energy 15 28,612 1,930 1 4,597 1,368 33,209 3,298 Industrials 21 43,639 3,542 4 7,049 2,012 50,688 5,554 Consumer goods and services 28 69,320 4,440 7 20,620 6,157 89,940 10,597 Health care 5 9,829 487 6 15,928 4,933 25,757 5,420 Technology, media and telecommunications 23 49,970 3,279 5 9,970 3,974 59,940 7,253 Financial services 40 101,411 6,997 5 11,236 2,208 112,647 9,205 Mortgage-backed securities 38 7,909 1,056 12 9,791 1,693 17,700 2,749 Collateralized mortgage obligations Government National Mortgage Association 29 48,898 4,500 12 35,650 8,791 84,548 13,291 Federal Home Loan Mortgage Corporation 21 35,456 5,629 19 43,383 7,900 78,839 13,529 Federal National Mortgage Association 14 24,146 1,281 7 16,674 3,611 40,820 4,892 Asset-backed securities 1 3,452 145 — — — 3,452 145 Total Available-for-Sale Fixed Maturities 534 $ 1,085,847 $ 58,671 100 $ 225,276 $ 55,252 $ 1,311,123 $ 113,923 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS Current accounting guidance on fair value measurements includes the application of a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Our financial instruments that are recorded at fair value are categorized into a three-level hierarchy, which is based upon the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (i.e., Level 1) and the lowest priority to unobservable inputs (i.e., Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the financial instrument. Financial instruments recorded at fair value are categorized in the fair value hierarchy as follows: • Level 1 : Valuations are based on unadjusted quoted prices in active markets for identical financial instruments that we have the ability to access. • Level 2 : Valuations are based on quoted prices for similar financial instruments, other than quoted prices included in Level 1, in markets that are not active or on inputs that are observable either directly or indirectly for the full term of the financial instrument. • Level 3 : Valuations are based on pricing or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument. We review our fair value hierarchy categorizations on a quarterly basis at which time the classification of certain financial instruments may change if the input observations have changed. Transfers between levels, if any, are recorded as of the beginning of the reporting period. To determine the fair value of the majority of our investments, we utilize prices obtained from independent, nationally recognized pricing services. We obtain one price for each security. When the pricing services cannot provide a determination of fair value for a specific security, we obtain non-binding price quotes from broker-dealers with whom we have had several years' experience and who have demonstrated knowledge of the subject security. In order to determine the proper classification in the fair value hierarchy, we obtain and evaluate the vendors' pricing procedures and inputs used to price the security, which include unadjusted quoted market prices for identical securities, such as a New York Stock Exchange closing price, and quoted prices for identical securities in markets that are not active. For fixed maturity securities, an evaluation of interest rates and yield curves observable at commonly quoted intervals, volatility, prepayment speeds, credit risks and default rates may also be performed. We have determined that these processes and inputs result in fair values and classifications consistent with the applicable accounting guidance on fair value measurements. When possible, we use quoted market prices to determine the fair value of fixed maturities, equity securities, trading securities and short-term investments. When quoted market prices do not exist, we base estimates of fair value on market information obtained from independent pricing services and brokers or on valuation techniques that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument. Our valuation techniques are discussed in more detail throughout this section. The mortgage loan portfolio consists entirely of commercial mortgage loans. The fair value of our mortgage loans is determined by modeling performed by our third-party fund manager based on the stated principal and coupon payments provided for in the loan agreements. These cash flows are then discounted using an appropriate risk-adjusted discount rate to determine the security's fair value. Our other long-term investments consist primarily of our interests in limited liability partnerships that are recorded on the equity method of accounting. The fair value of the partnerships is obtained from the fund managers, which is based on the fair value of the underlying investments held in the partnerships. In management's opinion, these values represent a reasonable estimate of fair value. We have not adjusted the net asset value provided by the fund managers. For cash and cash equivalents and accrued investment income, carrying value is a reasonable estimate of fair value due to the short-term nature of these financial instruments. The Company formed a rabbi trust in 2014 to fund obligations under the United Fire & Casualty Company Supplemental Executive Retirement and Deferral Plan (the "Executive Retirement Plan"). Within the rabbi trust, corporate-owned life insurance ("COLI") policies are utilized as an investment vehicle and source of funding for the Company's Executive Retirement Plan. The COLI policies invest in mutual funds, which are priced daily by independent sources. As of September 30, 2023, the cash surrender value of the COLI policies was $11,000 w hich is equal to the fair value measured using Level 2 inputs, based on the underlying assets of the COLI policie s, and is included in other assets in the Consolidated Balance Sheets. Our long-term debt is not carried in the Consolidated Balance Sheet at fair value. The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for similar financial instruments. The fair value is estimated using a discounted cash flow analysis. A summary of the carrying value and estimated fair value of our financial instruments at September 30, 2023 and December 31, 2022 is as follows: September 30, 2023 December 31, 2022 Fair Value Carrying Value Fair Value Carrying Value Assets Investments Fixed maturities: Available-for-sale securities $ 1,638,638 $ 1,638,512 $ 1,551,339 $ 1,551,336 Equity securities 51,217 51,217 169,106 169,106 Mortgage loans 42,280 45,534 35,302 37,898 Other long-term investments 93,836 93,836 86,276 86,276 Short-term investments — — 275 275 Cash and cash equivalents 69,150 69,150 96,650 96,650 Corporate-owned life insurance 11,000 11,000 10,588 10,588 Liabilities Long Term Debt 34,456 50,000 36,168 50,000 The following tables present the categorization for our financial instruments measured at fair value on a recurring basis. The table includes financial instruments at September 30, 2023 and December 31, 2022: September 30, 2023 Fair Value Measurements Description Total Level 1 Level 2 Level 3 AVAILABLE-FOR-SALE Fixed maturities: Bonds U.S. Treasury $ 66,873 $ — $ 66,873 $ — U.S. government agency 91,898 — 91,898 — States, municipalities and political subdivisions General obligations Midwest 56,881 — 56,881 — Northeast 10,999 — 10,999 — South 53,134 — 53,134 — West 75,326 — 75,326 — Special revenue Midwest 96,878 — 96,878 — Northeast 50,552 — 50,552 — South 159,500 — 159,500 — West 100,516 — 100,516 — Foreign bonds 18,336 — 18,336 — Public utilities 127,417 — 127,417 — Corporate bonds Energy 41,600 — 41,600 — Industrials 65,968 — 65,968 — Consumer goods and services 88,506 — 88,506 — Health care 31,537 — 31,537 — Technology, media and telecommunications 80,248 — 80,248 — Financial services 133,162 — 128,462 4,700 Mortgage-backed securities 21,007 — 21,007 — Collateralized mortgage obligations Government national mortgage association 146,670 — 146,670 — Federal home loan mortgage corporation 71,849 — 71,849 — Federal national mortgage association 45,887 — 45,887 — Asset-backed securities 3,894 — 3,095 799 Total Available-for-Sale Fixed Maturities $ 1,638,638 $ — $ 1,633,139 $ 5,499 EQUITY SECURITIES Common stocks Public utilities $ 3,703 $ 3,703 $ — $ — Energy 9,536 9,536 — — Industrials 13,023 13,023 — — Consumer goods and services 11,127 11,127 — — Health care 1,959 1,959 — — Technology, media and telecommunications 5,612 5,612 — — Financial services 6,257 6,257 — — Total Equity Securities $ 51,217 $ 51,217 $ — $ — Short-Term Investments $ — $ — $ — $ — Money Market Accounts $ 13,977 $ 13,977 $ — $ — Corporate-Owned Life Insurance $ 11,000 $ — $ 11,000 $ — Total Assets Measured at Fair Value $ 1,714,832 $ 65,194 $ 1,644,139 $ 5,499 December 31, 2022 Fair Value Measurements Description Total Level 1 Level 2 Level 3 AVAILABLE-FOR-SALE Fixed maturities: Bonds U.S. Treasury $ 14,675 $ — $ 14,675 $ — U.S. government agency 84,406 — 84,406 — States, municipalities and political subdivisions General obligations Midwest 61,113 — 61,113 — Northeast 15,463 — 15,463 — South 63,981 — 63,981 — West 86,545 — 86,545 — Special revenue Midwest 102,266 — 102,266 — Northeast 54,220 — 54,220 — South 180,857 — 180,857 — West 112,212 — 112,212 — Foreign bonds 31,649 — 31,649 — Public utilities 125,411 — 125,411 — Corporate bonds Energy 33,209 — 33,209 — Industrials 52,842 — 52,842 — Consumer goods and services 89,941 — 89,941 — Health care 27,592 — 27,592 — Technology, media and telecommunications 59,940 — 59,940 — Financial services 124,292 — 118,617 5,675 Mortgage-backed securities 17,700 — 17,700 — Collateralized mortgage obligations Government national mortgage association 84,548 — 84,548 — Federal home loan mortgage corporation 78,838 — 78,838 — Federal national mortgage association 45,386 — 45,386 — Asset-backed securities 4,253 — 3,452 801 Total Available-for-Sale Fixed Maturities $ 1,551,339 $ — $ 1,544,863 $ 6,476 EQUITY SECURITIES Common stocks Public utilities $ 14,846 $ 14,846 $ — $ — Energy 19,743 19,743 — — Industrials 27,163 27,163 — — Consumer goods and services 43,139 43,139 — — Health care 7,981 7,981 — — Technology, media and telecommunications 28,213 28,213 — — Financial services 28,021 28,021 — — Total Equity Securities $ 169,106 $ 169,106 $ — $ — Short-Term Investments $ 275 $ 275 $ — $ — Money Market Accounts $ 31,289 $ 31,289 $ — $ — Corporate-Owned Life Insurance $ 10,588 $ — $ 10,588 $ — Total Assets Measured at Fair Value $ 1,762,597 $ 200,670 $ 1,555,451 $ 6,476 The fair value of securities that are categorized as Level 1 is based on quoted market prices that are readily and regularly available. We use a market-based approach for valuing all of our Level 2 securities and submit them primarily to a third-party valuation service provider. Any of these securities not valued by this service provider are submitted to another third-party valuation service provider. Both service providers use a market approach to find pricing of similar financial instruments. The market inputs our service providers normally seek to value our securities include the following, listed in approximate order of priority: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. The method and inputs for these securities classified as Level 2 are the same regardless of industry category, credit quality, duration, geographical concentration or economic characteristics. For our mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, our service providers use additional market inputs to value these securities, including the following: new issue data, periodic payment information, monthly payment information, collateral performance and real estate analysis from third parties. Our service providers prioritize inputs based on market conditions, and not all inputs listed are available for use in the valuation process for each security on any given day. At least annually, we review the methodologies and assumptions used by our valuation service providers and verify that they are reasonable and representative of the fair value of the underlying securities held in the investment portfolio. We validate the prices obtained from independent pricing services and brokers prior to their use for reporting purposes by evaluating their reasonableness on a monthly basis. In addition, on a quarterly basis, we also test all securities in the portfolio and independently corroborate the valuations obtained from our third-party valuation service providers. Quarterly, we also perform deep dive analyses of the pricing method used by our third-party valuation service provider by selecting a random sample of securities by asset class and reviewing methodologies. In our opinion, the pricing obtained at September 30, 2023 and December 31, 2022 was reasonable. For the three- and nine-month periods ended September 30, 2023, the change in our available-for-sale securities categorized as Level 1 and Level 2 is the result of investment purchases that were made using funds held in our money market accounts, disposals and the change in unrealized gains on both fixed maturities and equity securities. Securities categorized as Level 3 include holdings in certain private placement fixed maturity and equity securities for which an active market does not currently exist. The fair value of our Level 3 private placement securities is determined by management relying on pricing received from our independent pricing services and brokers consistent with the process to estimate fair value for Level 2 securities. However, securities are categorized as Level 3 if these quotes cannot be corroborated by other market observable data due to the unobservable nature of the brokers' valuation processes. A change in significant unobservable inputs may result in a significantly higher or lower fair value measurement as of the reporting date. The following table provides quantitative information about our Level 3 securities at September 30, 2023: Quantitative Information about Level 3 Fair Value Measurements Fair Value at Valuation Technique(s) Unobservable inputs Range of weighted average significant unobservable inputs September 30, 2023 Fixed Maturities corporate $ 4,700 Third-party valuation Offered quotes 90.0% - 100.0% Fixed Maturities asset-backed securities 799 Discounted cash flow Probability of default 4% - 6% The following table provides a summary of the changes in fair value of our Level 3 securities for the three-month period ended September 30, 2023: Corporate bonds Asset-backed securities Total Beginning Balance - July 1, 2023 $ 4,765 $ 837 $ 5,602 Net unrealized gains (losses) (1) (65) (38) (103) Ending Balance - September 30, 2023 $ 4,700 $ 799 $ 5,499 (1) Net unrealized gains (losses) are recorded as a component of comprehensive income. The following table provides a summary of the changes in fair value of our Level 3 securities for the nine-month period ended September 30, 2023: Corporate bonds Asset-backed securities Total Beginning Balance - January 1, 2023 $ 5,675 $ 801 $ 6,476 Net unrealized gains (losses) (1) (975) (2) (977) Ending Balance - September 30, 2023 $ 4,700 $ 799 $ 5,499 (1) Net unrealized gains (losses) are recorded as a component of comprehensive income. Commercial Mortgage Loans The following tables present the carrying value of our commercial mortgage loans and additional information at September 30, 2023 and December 31, 2022: Commercial Mortgage Loans September 30, 2023 December 31, 2022 Loan-to-value Carrying Value Carrying Value Less than 65% $ 36,883 $ 29,231 65%-75% 8,706 8,716 Total amortized cost $ 45,589 $ 37,947 Allowance for mortgage loan losses (55) (49) Mortgage loans, net $ 45,534 $ 37,898 Mortgage Loans by Region September 30, 2023 December 31, 2022 Carrying Value Percent of Total Carrying Value Percent of Total East North Central $ 3,245 7.1 % $ 3,245 8.6 % Southern Atlantic 17,265 37.8 9,397 24.7 East South Central 7,591 16.7 7,783 20.5 New England 6,588 14.5 6,588 17.4 Middle Atlantic 6,020 13.2 6,139 16.2 Mountain 1,992 4.4 1,992 5.2 West North Central 2,888 6.3 2,803 7.4 Total mortgage loans at amortized cost $ 45,589 100.0 % $ 37,947 100.0 % Mortgage Loans by Property Type September 30, 2023 December 31, 2022 Carrying Value Percent of Total Carrying Value Percent of Total Commercial Multifamily $ 8,536 18.7 % $ 8,493 22.4 % Office 11,030 24.3 11,267 29.7 Industrial 10,003 21.9 10,056 26.5 Retail 10,000 21.9 1,992 5.2 Mixed use/Other 6,020 13.2 6,139 16.2 Total mortgage loans at amortized cost $ 45,589 100.0 % $ 37,947 100.0 % Amortized Cost Basis by Year of Origination and Credit Quality Indicator 2023 2022 2020 2019 2018 Total Commercial mortgage loans: Risk Rating: 1-2 internal grade $ 8,136 $ 100 5,292 $ 7,897 $ 17,576 $ 39,001 3-4 internal grade — — — — 6,588 6,588 5 internal grade — — — — — — 6 internal grade — — — — — — 7 internal grade — — — — — — Total commercial mortgage loans $ 8,136 $ 100 $ 5,292 $ 7,897 $ 24,164 $ 45,589 Current-period write-offs — — — — — — Current-period recoveries — — — — — — Current-period net write-offs $ — $ — $ — $ — $ — $ — Commercial mortgage loans carrying value excludes accrued interest of $173. As of September 30, 2023, all loan receivables were current, with no delinquencies. The commercial mortgage loans originate with an initial loan-to-value ratio to provide sufficient collateral to absorb losses should a loan be required to foreclose. Mortgage loans are evaluated on a quarterly basis for impairment on an individual basis through a monitoring process and review of key credit indicators, such as economic trends, delinquency rates, property valuations, occupancy and rental rates and loan-to-value ratios. A loan is considered impaired when the Company believes it will not collect the contractual principal and interest set forth in the contractual terms of the loan. An internal grade is assigned to each mortgage loan, with a grade of 1 being the highest and least likely for an impairment and the lowest rating of 7 being the most likely for an impairment. An allowance for mortgage loan losses is established on each loan recognizing a loss for amounts which we believe will not be collected according to the contractual terms of the respective loan agreement. As of September 30, 2023, the Company had an allowance for mortgage loan losses of $55, summarized in the following rollforward: Rollforward of allowance for mortgage loan losses: As of September 30, 2023 Beginning balance, January 1, 2023 $ 49 Current-period provision for expected credit losses 6 Ending balance of the allowance for mortgage loan losses, September 30, 2023 $ 55 |
Reserves for Losses and Loss Se
Reserves for Losses and Loss Settlement Expenses | 9 Months Ended |
Sep. 30, 2023 | |
Insurance Loss Reserves [Abstract] | |
Reserves for Losses and Loss Settlement Expenses | RESERVES FOR LOSSES AND LOSS SETTLEMENT EXPENSES Property insurance indemnifies an insured with an interest in physical property for loss of, or damage to, such property or the loss of its income-producing abilities. Casualty insurance primarily covers liability for damage to property of, or injury to, a person or entity other than the insured. In most cases, casualty insurance also obligates the insurance company to provide a defense for the insured in litigation, arising out of events covered by the policy. Liabilities for losses and loss settlement expenses reflect management's best estimates at a given point in time of what we expect to pay for claims that have been reported and those that have been incurred but not reported ("IBNR"), based on known facts, circumstances, and historical trends. Because property and casualty insurance reserves are estimates of the unpaid portions of incurred losses that have been reported to us, as well as losses that have been incurred but not reported, the establishment of appropriate reserves, including reserves for catastrophes, is an inherently uncertain and complex process. The ultimate cost of losses and related loss settlement expenses may vary materially from recorded amounts. We regularly update our reserve estimates as new information becomes available and as events unfold that may affect the resolution of unsettled claims. Changes in prior year reserve estimates, which may be material, are reported as a component of losses and loss settlement expenses incurred in the period such changes are determined. The determination of reserves (particularly those relating to liability lines of insurance that have relatively longer lag in claim reporting) requires significant work to reasonably project expected future claim reporting and payment patterns. If, during the course of our regular monitoring of reserves, we determine that coverages previously written are incurring higher than expected losses, we will evaluate an appropriate response that may include, among other things, increasing the related reserves. Any adjustments we make to reserves are reflected in operating results in the year in which we make those adjustments. We engage an independent actuary, Regnier Consulting Group, Inc., to render an opinion as to the reasonableness of our statutory reserves on an annual basis. The actuarial opinion is filed in those states where we are licensed. On a quarterly basis, UFG's team of actuaries performs a detailed actuarial review of IBNR reserves. This review includes a comparison of results from the most recent analysis of reserves completed by both our internal and external actuaries. Senior management meets with our actuarial team to review, on a quarterly basis, the adequacy of carried reserves based on results from this actuarial analysis. There are two fundamental types or sources of IBNR reserves. We record IBNR reserves for "normal" types of claims and also specific IBNR reserves related to unique circumstances or events. A major hurricane is an example of an event that might necessitate establishing specific IBNR reserves because an analysis of existing historical data would not provide an appropriate estimate. We do not discount loss reserves based on the time value of money. The following table provides an analysis of changes in our property and casualty losses and loss settlement expense reserves at September 30, 2023 and December 31, 2022 (net of reinsurance amounts): September 30, 2023 December 31, 2022 Gross liability for losses and loss settlement expenses $ 1,497,274 $ 1,514,265 Ceded losses and loss settlement expenses (146,875) (112,900) Net liability for losses and loss settlement expenses $ 1,350,399 $ 1,401,365 Losses and loss settlement expenses incurred Current year $ 538,941 $ 624,411 Prior years 59,184 12,890 Total incurred $ 598,125 $ 637,301 Losses and loss settlement expense payments Current year $ 131,408 $ 215,891 Prior years 371,723 472,377 Total paid $ 503,131 $ 688,268 Net liability for losses and loss settlement expenses $ 1,445,394 $ 1,350,399 Ceded losses and loss settlement expenses 191,525 146,875 Gross liability for losses and loss settlement expenses $ 1,636,918 $ 1,497,274 There are a multitude of factors that can impact loss reserve development. Those factors include, but are not limited to: historical data, the potential impact of various loss reserve development factors and trends including historical loss experience, legislative enactments, judicial decisions, legal developments in imposition of damages, experience with alternative dispute resolution, results of our medical bill review process, the potential impact of salvage and subrogation and changes and trends in general economic conditions, including the effects of inflation. All of these factors influence our estimates of required reserves and for long tail lines these factors can change over the course of the settlement of the claim. However, there is no precise method for evaluating the specific monetary impact of any individual factor on the development of reserves. Generally, we base reserves for each claim on the estimated ultimate exposure for that claim. We believe that it is appropriate and reasonable to establish a best estimate for reserves within a range of reasonable estimates, especially when we are reserving for claims for bodily injury, disabilities and similar claims, for which settlements and verdicts can vary widely. We believe our approach produces recorded reserves that are reasonably consistent as to their relative position within a range of reasonable reserves from year-to-year. However, conditions and trends that have affected the reserve development for a given year do change. Changes in external and internal environments must be considered carefully when relying on prior development patterns to project future reserve positions. We are not aware of any significant contingent liabilities related to environmental issues. Because of the type of property coverage we write, we have potential exposure to environmental pollution, mold and asbestos claims. Our underwriters are aware of these exposures and use riders or endorsements to limit exposure. Reserve Development During 2023, the Company made additional refinements to its reserve review processes and analyses, including increased segmentation on unique exposures, which resulted in deeper insights and understanding of loss experience and significant movements in reserve development across a range of commercial liability lines of business. The significant driver of the reserve strengthening was an increase in long-tailed other liability reserves primarily due to increased loss cost trends related to economic and social inflation. The commercial auto line of business also experienced reserve strengthening in reaction to continuing loss trends in post-2020 accident years. These increases were offset by favorable development in workers' compensation and fire and allied lines. The significant drivers of the unfavorable reserve development in 2022 were commercial other liability and commercial fire and allied lines. This was offset partially by favorable development in commercial automobile, workers' compensation and fidelity and surety. The unfavorable development in commercial other liability was due to paid loss and loss adjustment expense ("LAE") which was greater than reductions in reserves for unpaid loss and LAE. Emerging claim experience and deeper data insights during 2022 pointed to an increase in loss exposure on these longer tailed businesses driven in part by social and economic inflation. Commercial fire and allied developed unfavorably due to paid loss and LAE driven by catastrophe losses and increased severity on non-catastrophe claims, which was greater than reductions in reserves for unpaid loss and LAE. The favorable development for commercial automobile was from both loss and LAE where reductions of reserves for unpaid liabilities were more than sufficient to offset actual paid loss. Paid LAE reductions in reserves for IBNR claims also contributed favorable development in addition to LAE where reductions in reserves were more than sufficient to offset payments. |
Employee Benefits
Employee Benefits | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefits | EMPLOYEE BENEFITS Net Periodic Benefit Cost The components of the net periodic benefit cost for our pension and postretirement benefit plans are as follows: Pension Plan Postretirement Benefit Plan Three Months Ended September 30, 2023 2022 2023 2022 Net periodic benefit cost Service cost $ 954 $ 1,120 $ — $ — Interest cost 2,526 1,933 — 1 Expected return on plan assets (3,756) (4,723) — — Amortization of prior service credit (820) (820) — (3,771) Amortization of net loss 52 194 — 706 Net periodic benefit cost $ (1,044) $ (2,296) $ — $ (3,064) Pension Plan Postretirement Benefit Plan Nine Months Ended September 30, 2023 2022 2023 2022 Net periodic benefit cost Service cost $ 2,863 $ 3,361 $ — $ — Interest cost 7,579 5,798 — 2 Expected return on plan assets (11,269) (14,168) — — Amortization of prior service credit (2,460) (2,460) — (11,314) Amortization of net loss 155 583 — 2,118 Net periodic benefit cost $ (3,131) $ (6,887) $ — $ (9,194) A portion of the service cost component of net periodic pension and postretirement benefit costs is capitalized and amortized as part of deferred acquisition costs and is included in the line "Amortization of deferred policy acquisition costs" in the Consolidated Statements of Income and Comprehensive Income. The portion not related to the compensation and other components of net periodic pension and postretirement benefit costs is included in the income statement line titled "other underwriting expenses." In January 2021, the Company changed the postretirement benefit plan to a voluntary plan funded exclusively by participants, commencing at the start of 2023. A related, previously disclosed adjustment is being amortized through an additional one-time adjustment in the line "Amortization of prior service credit". The amortization of prior service credits continued through the end of 2022 related to these plan changes. As of December 31, 2022, the postretirement benefit obligation was $0. Employer Contributions |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION Non-Qualified Employee Stock Award Plan The United Fire Group, Inc. 2008 Stock Plan (the "2008 Stock Plan") authorized the issuance of restricted and unrestricted stock awards, restricted stock units, stock appreciation rights, incentive stock options, and non-qualified stock options for up to 1,900,000 shares of UFG common stock to employees. In May 2014, the Registrant's shareholders approved an additional 1,500,000 shares of UFG common stock issuable pursuant to the 2008 Stock Plan, among other amendments, and renamed such plan as the United Fire Group, Inc. Stock Plan. In May 2021, the Registrant's shareholders approved an additional 650,000 shares of UFG common stock issuable pursuant to the Stock Plan, and among other amendments, renamed such plan as the United Fire Group, Inc. 2021 Stock and Incentive Plan (as amended, the "Stock Plan"). At September 30, 2023, there were 1,108,419 authorized shares remaining available for future issuance. The Stock Plan is administered by the Board of Directors, which determines those employees who will receive awards, when awards will be granted, and the terms and conditions of the awards. The Board of Directors may also take any action it deems necessary and appropriate for the administration of the Stock Plan. Pursuant to the Stock Plan, the Board of Directors may, at its sole discretion, grant awards to our employees, who are in positions of substantial responsibility with UFG. The Board of Directors, in its discretion, has also delegated authority to management to grant a limited number of restricted stock units in situations where the Company is seeking to recruit or retain individuals. Options granted pursuant to the Stock Plan are granted to buy shares of UFG's common stock at the market value of the stock on the date of grant. Options granted prior to March 2017 vest and are exercisable in installments of 20.0 percent of the number of shares covered by the option award each year from the grant date, unless the Board of Directors authorizes the acceleration of vesting. Options granted after March 2017 vest and are exercisable in installments of 33.3 percent of the number of shares covered by the option award each year from the grant date, unless the Board of Directors authorizes the acceleration of vesting. To the extent not exercised, vested option awards accumulate and are exercisable by the awardee, in whole or in part, in any subsequent year included in the option period, but not later than 10 years from the grant date. Restricted and unrestricted stock awards granted pursuant to the Stock Plan are granted at the market value of UFG's common stock on the date of the grant. Restricted stock units fully vest after three years or five years from the date of grant, unless accelerated upon the approval of the Board of Directors, at which time UFG common stock will be issued to the awardee. The activity in the Stock Plan is displayed in the following table: Authorized Shares Available for Future Award Grants Nine Months Ended September 30, 2023 From Inception to September 30, 2023 Beginning balance 1,342,119 1,900,000 Additional shares authorized — 2,150,000 Number of awards granted (305,241) (3,927,382) Number of awards forfeited or expired 71,541 985,801 Ending balance 1,108,419 1,108,419 Number of option awards exercised 4,000 1,537,336 Number of unrestricted stock awards granted — 10,090 Number of restricted stock awards vested 28,100 295,945 Non-Qualified Non-Employee Director Stock Plan The United Fire Group, Inc. Non-Employee Director Stock Plan (formerly known as the 2005 Non-Qualified Non- Employee Director Stock Option and Restricted Stock Plan) (the "Director Stock Plan") authorizes the issuance of restricted stock awards and non-qualified stock options to purchase shares of UFG's common stock to non-employee directors. On May 20, 2020, the Company's shareholders approved amendments to the Director Stock Plan, previously approved by the Company's Board of Directors, to (i) increase the number of shares available for future awards under the Director Stock Plan from 300,000 to 450,000, ( ii) extend the expiration date of the Director Stock Plan from December 31, 2020 to December 31, 2029, (iii) allow for the grant of awards of restricted stock units, and (iv) rename the Director Stock Plan as the "United Fire Group, Inc. Non-Employee Director Stock Plan." At September 30, 2023, the Company had 103,600 authorized shares available for future issuance. The Board of Directors has the authority to determine which non-employee directors receive awards, when restricted stock, restricted stock units and options shall be granted, the option price, the option expiration date, the date of grant, the vesting schedule of options or whether the options shall be immediately vested, the terms and conditions of options, restricted stock and restricted stock units (other than those terms and conditions set forth in the plan) and the number of shares of common stock to be issued pursuant to an option, restricted stock or restricted stock unit agreements (subject to limits set forth in the Director Stock Plan). The Board of Directors may also take any action it deems necessary and appropriate for the administration of the Director Stock Plan. The activity in the Director Stock Plan is displayed in the following table: Authorized Shares Available for Future Award Grants Nine Months Ended September 30, 2023 From Inception to September 30, 2023 Beginning balance 123,397 300,000 Additional authorization — 150,000 Number of awards granted (31,380) (386,618) Number of awards forfeited or expired 11,583 40,218 Ending balance 103,600 103,600 Number of option awards exercised 1,755 152,336 Number of restricted stock awards vested — 117,001 Stock-Based Compensation Expense For the three-month periods ended September 30, 2023 and 2022, we recognized stock-based compensation expense of $949 and $828, respectively. For the nine-month periods ended September 30, 2023 and 2022, we recognized stock-based compensation expense of $3,124 and $2,590, respe ctively. As of September 30, 2023, we had $6,542 in stock-based compensation expense that has yet to be recognized through our results of operations. We expect this compensation to be recognized over the remainder of 2023 and subsequent years according to the table below, except with respect to awards that are accelerated by the Board of Directors, in which case we will recognize any remaining compensation expense in the period in which the awards are accelerated. 2023 $ 1,034 2024 3,364 2025 1,878 2026 266 2027 — Total $ 6,542 |
Earnings Per Common Share
Earnings Per Common Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | EARNINGS PER COMMON SHARE Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share gives effect to all dilutive common shares outstanding during the reporting period. The dilutive shares we consider in our diluted earnings per share calculation relate to our outstanding stock options, restricted stock awards and restricted stock unit awards. We determine the dilutive effect of our outstanding stock options using the "treasury stock" method. Under this method, we assume the exercise of all of the outstanding stock options whose exercise price is less than the weighted-average market value of our common stock during the reporting period. This method also assumes that the proceeds from the hypothetical stock option exercises are used to repurchase shares of our common stock at the weighted-average market value of the stock during the reporting period. The net of the assumed stock options exercised and assumed common shares repurchased represents the number of dilutive common shares, which we add to the denominator of the earnings per share calculation. The components of basic and diluted earnings per share were as follows for the three- and nine-month periods ended September 30, 2023 and 2022: Three Months Ended September 30, (In Thousands, Except Share Data) 2023 2022 Basic Diluted Basic Diluted Net income (loss) $ 6,380 $ 6,380 $ (22,981) $ (22,981) Weighted-average common shares outstanding 25,263,523 25,263,523 25,188,958 25,188,958 Add dilutive effect of restricted stock unit awards — 295,997 — — Add dilutive effect of stock options — 19,814 — — Weighted-average common shares outstanding 25,263,523 25,579,334 25,188,958 25,188,958 Earnings (loss) per common share $ 0.25 $ 0.25 $ (0.91) $ (0.91) Awards excluded from diluted earnings per share calculation (1) — 837,482 — 392,062 (1) Outstanding awards that are not "in-the-money" are excluded from the diluted earnings per share calculation because the effect of including them would have been anti-dilutive. Nine Months Ended September 30, (In Thousands, Except Share Data) 2023 2022 Basic Diluted Basic Diluted Net income (loss) $ (49,308) $ (49,308) $ (5,089) $ (5,089) Weighted-average common shares outstanding 25,244,502 25,244,502 25,146,318 25,146,318 Add dilutive effect of restricted stock unit awards — — — — Add dilutive effect of stock options — — — — Weighted-average common shares outstanding 25,244,502 25,244,502 25,146,318 25,146,318 Earnings (loss) per common share $ (1.95) $ (1.95) $ (0.20) $ (0.20) Awards excluded from diluted earnings per share calculation (1) — 814,636 — 479,981 (1) Outstanding awards that are not "in-the-money" are excluded from the diluted earnings per share calculation because the effect of including them would have been anti-dilutive. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Long Term Debt The Company executed a private placement debt transaction on December 15, 2020 between UF&C, and Federated Mutual and Federated Life. UF&C sold an aggregate principal amount of $50,000 of notes due 2040 to the Note Purchasers. One note with a principal amount of $35,000 was issued to Federated Mutual and one note with a principal amount of $15,000 was issued to Federated Life subject to the terms of their respective notes. Interest payments under the long term debt will be paid quarterly on March 15, June 15, September 15 and December 15 of each year (each such date, an "Interest Payment Date"). The interest rate will equal the rate that corresponds to the A.M. Best Co. (or its successor's) financial strength rating for members of the United Fire & Casualty Pooled Group as of the applicable Interest Payment Date, as set forth in the table below. For the nine-month period ended September 30, 2023, interest expense totaled $2,391. Payment of interest is subject to approval by the Iowa Insurance Division. On August 18, 2023, the Company received a downgrade from AM Best on the Financial Strength Rating (FSR) to A- (Excellent) from A (Excellent). As a result of this downgrade, the interest rate on the long term debt will increase to 6.875%, beginning with the December 15, 2023 payment, in accordance with the table below. A.M. Best Co. Financial Strength Rating Applicable Interest Rate A+ 5.875% A 6.375% A- 6.875% B++ (or lower) 7.375% Credit Facilities On March 31, 2020, UF&C, a wholly owned subsidiary of the Company, entered into a credit agreement (the "Credit Agreement") with Wells Fargo Bank, National Association ("Wells Fargo"), as administrative agent, issuing lender, swing-line lender and lender, and the other lenders from time to time party thereto (collectively with Wells Fargo, the "Lenders"), providing for a $50,000 revolving credit facility, which includes a $20,000 letter of credit sub-facility and a $5,000 swing-line loan for working capital and other general corporate purposes. The Credit Agreement is provided by the Lenders on an unsecured basis, and UF&C has the option to increase the Credit Agreement by $100,000 if agreed to by the Lenders providing such incremental facility. The Credit Agreement includes customary events of default, including default in payments of principals, default in payment of other indebtedness, change of control and voluntary and involuntary insolvency proceedings, the occurrence of which would allow the Lenders to accelerate payment of all amounts outstanding thereunder and terminate any further commitments to lend. There was no outstanding balance on the Credit Agreement at September 30, 2023 and 2022, respectively and the Company has not utilized this facility since its inception. For the nine-month periods ended September 30, 2023 and 2022, we did not incur any interest expense related to the credit facility. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table shows the changes in the components of our accumulated other comprehensive income (loss), net of tax, for the three-month period ended September 30, 2023: Liability for Net unrealized underfunded appreciation employee on investments benefit costs (1) Total Balance as of June 30, 2023 (89,094) (341) $ (89,435) Change in accumulated other comprehensive income (loss) before reclassifications (34,166) (646) (34,812) Reclassification adjustments from accumulated other comprehensive income (loss) 62 40 102 Balance as of September 30, 2023 $ (123,198) $ (947) $ (124,145) (1) The preparation of financial statements in conformity with GAAP requires us to make various estimates and assumptions that affect the reporting of net periodic benefit cost, plan assets and plan obligations for each plan at the date of the financial statements. Actual results could differ from these estimates. One significant estimate relates to the calculation of the benefit obligation for each plan. We annually establish the discount rate, which is an estimate of the interest rate at which these benefits could be effectively settled, that is used to determine the present value of the respective plan's benefit obligations as of December 31. The following table shows the changes in the components of our accumulated other comprehensive income (loss), net of tax, for the nine-month period ended September 30, 2023: Liability for Net unrealized underfunded appreciation employee on investments benefit costs (1) Total Balance as of January 1, 2023 (88,369) 873 $ (87,496) Change in accumulated other comprehensive income before reclassifications (35,438) (1,942) (37,380) Reclassification adjustments from accumulated other comprehensive income (loss) 609 122 731 Balance as of September 30, 2023 $ (123,198) $ (947) $ (124,145) |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | LEASES The Company has operating leases consisting of office space, vehicle leases, computer equipment, and office equipment. Lease terms and options vary in the Company's operating leases dependent upon the underlying leased asset. We exclude options to extend or terminate a lease from our recognition as part of our right-of-use assets and lease liabilities until those options are known and/or executed, as we typically do not exercise options to purchase the underlying leased asset. As of September 30, 2023, we have leases with remaining terms of one year to five years, some of which may include no options for renewal and others with options to extend the lease terms from six months to five years. The components of our operating leases were as follows for the three- and nine-month periods ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Components of lease expense: Operating lease expense $ 2,255 $ 2,201 $ 6,653 $ 6,569 Less sublease income 305 53 732 160 Net lease expense 1,950 2,148 5,921 6,409 Cash flows information related to leases: Operating cash outflow from operating leases 1,952 2,170 5,996 6,471 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||||||
Net income (loss) | $ 6,380 | $ (56,382) | $ 694 | $ (22,981) | $ (10,457) | $ 28,349 | $ (49,308) | $ (5,089) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The unaudited consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial reporting and with the instructions to Form 10-Q and Regulation S-X promulgated by the SEC. Certain financial information that is included in our Annual Report on Form 10-K/A for the year ended December 31, 2022, including certain financial statement footnote disclosures, is not required by the rules and regulations of the SEC for interim financial reporting and has been condensed or omitted. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The financial statement categories that are most dependent on management estimates and assumptions include: investments; deferred policy acquisition costs; reinsurance receivables and recoverables; loss settlement expenses; and pension and postretirement benefit obligations. |
Segment Information | Our property and casualty insurance business is reported as one business segment. The property and casualty insurance business profit or loss is consistent with consolidated reporting as disclosed on the Consolidated Statements of Income and Comprehensive Income. We analyze the property and casualty insurance business results based on profitability (i.e., loss ratios), expenses and return on equity. The Company's property and casualty insurance business was determined using a management approach to make decisions on operating matters, including allocating resources, assessing performance, determining which products to market and sell, determining distribution networks with insurance agents and monitoring the regulatory environment. The property and casualty insurance business products have similar economic characteristics and use a similar marketing and distribution strategy with our independent agents. We will continue to evaluate our operations on the basis of both statutory accounting principles prescribed or permitted by our states of domicile and GAAP. |
Cash and Cash Equivalents | For purposes of reporting cash flows, cash and cash equivalents include cash, money market accounts, cash on deposit and held at Lloyd's and non-negotiable certificates of deposit with original maturities of three months or less. |
Deferred Policy Acquisition Costs (DAC) | Certain costs associated with underwriting new business (primarily commissions, premium taxes and variable underwriting and policy issue expenses associated with successful acquisition efforts) are deferred.Property and casualty insurance policy acquisition costs deferred are amortized as premium revenue is recognized. The method followed in computing DAC limits the amount of such deferred costs to their estimated realizable value. This takes into account the premium to be earned, losses and loss settlement expenses expected to be incurred and certain other costs expected to be incurred as the premium is earned. |
Other Intangible Assets | Our other intangible assets, which consist primarily of agency relationships, trade names, state insurance licenses, and software, are being amortized using the straight-line method over periods ranging from two years to 15 years, with the exception of state insurance licenses, which are indefinite-lived and not amortized. |
Income Taxes | Deferred tax assets and liabilities are established based on differences between the financial statement bases of assets and liabilities and the tax bases of those same assets and liabilities, using the currently enacted statutory tax rates. Deferred income tax expense is measured by the year-to-year change in the net deferred tax asset or liability, except for certain changes in deferred tax amounts that affect stockholders' equity and do not impact federal income tax expense. We reported a consolidated federal income tax benefit of $14,544 for the nine-month period ended September 30, 2023 compared to an income tax benefit of $5,475 during the same period of 2022. Our effective tax rate for 2023 and 2022 is different than the federal statutory rate of 21 percent, due principally to the net effect of tax-exempt municipal bond interest income. The Company performs a quarterly review of its tax positions and makes a determination of whether it is more likely than not that the tax position will be sustained upon examination. If, based on this review, it appears not more likely than not that the positions will be sustained, the Company will calculate any unrecognized tax benefits and, if necessary, calculate and accrue any related interest and penalties. We did not recognize any liability for unrecognized tax benefits at September 30, 2023 or December 31, 2022. In addition, we have not accrued for interest and penalties related to unrecognized tax benefits. However, if interest and penalties would need to be accrued related to unrecognized tax benefits, such amounts would be recognized as a component of federal income tax expense. Deferred tax assets are reduced by a valuation allowance when management believes it is more likely than not that some, or all, of the deferred taxes will not be realized. After considering all positive and negative evidence of taxable income in the carryback and carryforward periods and our tax planning strategy of holding debt securities with unrealized losses to maturity or recovery, we believe it is more likely than not that all the deferred assets will be realized. As a result, we have no valuation allowance at September 30, 2023 or December 31, 2022. For the nine-month periods ended September 30, 2023 and 2022, we made payments for income taxes totaling $1,336 and $21,537, respectively. We did not receive a federal tax refund for the nine-month period ended September 30, 2023. For the nine-month period ended September 30, 2022, we received a federal tax refund of $10,789. |
Leases | The Company determines if a contract contains a lease at inception of the contract. The Company's inventory of leases consists of operating leases which are recorded as a lease obligation liability disclosed in the "Accrued expenses and other liabilities" line on the Consolidated Balance Sheets and as a lease right-of-use asset disclosed in the "Other assets" line on the Consolidated Balance Sheets. The Company's operating leases consist of office space, vehicles, computer equipment and office equipment. The lease right-of-use asset represents the Company's right to use each underlying asset for the lease term and the lease obligation liability represents the Company's obligation over the lease term. The Company's lease obligation is recorded at the present value of the lease payments based on the term of the applied lease. Short-term leases of 12 months or less are recorded on the Consolidated Balance Sheets and lease payments are recognized on the Consolidated Statements of Income and Comprehensive Income. |
Variable Interest Entities | The Company and certain related parties are equity investors in one investment which the Company determined is a variable interest entity ("VIE") as a result of participation in the risks and rewards of the VIE based on the objectives and strategies of the VIE. The VIE is a limited liability company that primarily invests in commercial real estate. The Company and certain related parties are not the primary beneficiaries largely due to their inability to influence management or direct the activities that most significantly impact the VIE's economic performance. Based on these facts and circumstances, the Company has a variable interest in the VIE, but has not consolidated the VIE's financial results as it is not the primary beneficiary. The Company's investment is reported in other long-term investments in the Consolidated Balance Sheets and accounted for under the equity method of accounting. |
Credit Losses | The Company recognizes credit losses for our available-for-sale fixed-maturity portfolio, reinsurance receivables, mortgage loans and premium receivables by setting up allowances which are remeasured each reporting period and recorded in the Consolidated Statements of Income and Comprehensive Income. For our available-for-sale fixed-maturity portfolio an allowance for credit losses is recorded net of available-for-sale fixed maturities in the Consolidated Balance Sheets and a corresponding credit loss recognized as a realized loss or gain in the Consolidated Statements of Income and Comprehensive Income. The Company determines if an allowance for credit losses is recorded based on a number of factors including current economic conditions, management's expectations of future economic conditions and performance indicators, such as market value versus amortized cost, investment spreads widening or contracting, rating actions, payment and default history. For more information on credit losses and the allowance for credit losses for our available-for-sale fixed-maturity portfolio, see Note 2 "Summary of Investments." An allowance for mortgage loan losses is established based on historical loss information of the collective pool of the Company's commercial mortgage loan investments which have similar risk characteristics. To calculate the allowance for mortgage loan losses, the Company starts with historical loan experience to predict the future expected losses and then layers on a market-linked adjustment. On a quarterly basis, quantitative credit risk metrics, including, for example, cash-flows, rent rolls and financial statements are reviewed for each loan to determine if it is performing in line with its expectations. This allowance is presented as a separate line in the Consolidated Balance Sheets beneath the asset value as well as presented net and recorded through "Net investment gains (losses)" in the Consolidated Statements of Income and Comprehensive Income. For more information on credit losses and the allowance for credit losses for our investment in mortgage loans see Note 3 "Fair Value of Financial Instruments." |
Subsequent Events | In the preparation of the accompanying financial statements, the Company has evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure in the Company's financial statements. |
Recently Issued Accounting Standards | Accounting Standards Adopted in 2022 Inflation Reduction Act |
Fair Value of Financial Instruments | Current accounting guidance on fair value measurements includes the application of a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Our financial instruments that are recorded at fair value are categorized into a three-level hierarchy, which is based upon the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (i.e., Level 1) and the lowest priority to unobservable inputs (i.e., Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the financial instrument. Financial instruments recorded at fair value are categorized in the fair value hierarchy as follows: • Level 1 : Valuations are based on unadjusted quoted prices in active markets for identical financial instruments that we have the ability to access. • Level 2 : Valuations are based on quoted prices for similar financial instruments, other than quoted prices included in Level 1, in markets that are not active or on inputs that are observable either directly or indirectly for the full term of the financial instrument. • Level 3 : Valuations are based on pricing or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument. We review our fair value hierarchy categorizations on a quarterly basis at which time the classification of certain financial instruments may change if the input observations have changed. Transfers between levels, if any, are recorded as of the beginning of the reporting period. To determine the fair value of the majority of our investments, we utilize prices obtained from independent, nationally recognized pricing services. We obtain one price for each security. When the pricing services cannot provide a determination of fair value for a specific security, we obtain non-binding price quotes from broker-dealers with whom we have had several years' experience and who have demonstrated knowledge of the subject security. In order to determine the proper classification in the fair value hierarchy, we obtain and evaluate the vendors' pricing procedures and inputs used to price the security, which include unadjusted quoted market prices for identical securities, such as a New York Stock Exchange closing price, and quoted prices for identical securities in markets that are not active. For fixed maturity securities, an evaluation of interest rates and yield curves observable at commonly quoted intervals, volatility, prepayment speeds, credit risks and default rates may also be performed. We have determined that these processes and inputs result in fair values and classifications consistent with the applicable accounting guidance on fair value measurements. When possible, we use quoted market prices to determine the fair value of fixed maturities, equity securities, trading securities and short-term investments. When quoted market prices do not exist, we base estimates of fair value on market information obtained from independent pricing services and brokers or on valuation techniques that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument. Our valuation techniques are discussed in more detail throughout this section. The mortgage loan portfolio consists entirely of commercial mortgage loans. The fair value of our mortgage loans is determined by modeling performed by our third-party fund manager based on the stated principal and coupon payments provided for in the loan agreements. These cash flows are then discounted using an appropriate risk-adjusted discount rate to determine the security's fair value. Our other long-term investments consist primarily of our interests in limited liability partnerships that are recorded on the equity method of accounting. The fair value of the partnerships is obtained from the fund managers, which is based on the fair value of the underlying investments held in the partnerships. In management's opinion, these values represent a reasonable estimate of fair value. We have not adjusted the net asset value provided by the fund managers. For cash and cash equivalents and accrued investment income, carrying value is a reasonable estimate of fair value due to the short-term nature of these financial instruments. The Company formed a rabbi trust in 2014 to fund obligations under the United Fire & Casualty Company Supplemental Executive Retirement and Deferral Plan (the "Executive Retirement Plan"). Within the rabbi trust, corporate-owned life insurance ("COLI") policies are utilized as an investment vehicle and source of funding for the Company's Executive Retirement Plan. The COLI policies invest in mutual funds, which are priced daily by independent sources. As of September 30, 2023, the cash surrender value of the COLI policies was $11,000 w hich is equal to the fair value measured using Level 2 inputs, based on the underlying assets of the COLI policie s, and is included in other assets in the Consolidated Balance Sheets. Our long-term debt is not carried in the Consolidated Balance Sheet at fair value. The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for similar financial instruments. The fair value is estimated using a discounted cash flow analysis. The fair value of securities that are categorized as Level 1 is based on quoted market prices that are readily and regularly available. We use a market-based approach for valuing all of our Level 2 securities and submit them primarily to a third-party valuation service provider. Any of these securities not valued by this service provider are submitted to another third-party valuation service provider. Both service providers use a market approach to find pricing of similar financial instruments. The market inputs our service providers normally seek to value our securities include the following, listed in approximate order of priority: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. The method and inputs for these securities classified as Level 2 are the same regardless of industry category, credit quality, duration, geographical concentration or economic characteristics. For our mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, our service providers use additional market inputs to value these securities, including the following: new issue data, periodic payment information, monthly payment information, collateral performance and real estate analysis from third parties. Our service providers prioritize inputs based on market conditions, and not all inputs listed are available for use in the valuation process for each security on any given day. At least annually, we review the methodologies and assumptions used by our valuation service providers and verify that they are reasonable and representative of the fair value of the underlying securities held in the investment portfolio. We validate the prices obtained from independent pricing services and brokers prior to their use for reporting purposes by evaluating their reasonableness on a monthly basis. In addition, on a quarterly basis, we also test all securities in the portfolio and independently corroborate the valuations obtained from our third-party valuation service providers. Quarterly, we also perform deep dive analyses of the pricing method used by our third-party valuation service provider by selecting a random sample of securities by asset class and reviewing methodologies. In our opinion, the pricing obtained at September 30, 2023 and December 31, 2022 was reasonable. For the three- and nine-month periods ended September 30, 2023, the change in our available-for-sale securities categorized as Level 1 and Level 2 is the result of investment purchases that were made using funds held in our money market accounts, disposals and the change in unrealized gains on both fixed maturities and equity securities. Securities categorized as Level 3 include holdings in certain private placement fixed maturity and equity securities for which an active market does not currently exist. The fair value of our Level 3 private placement securities is determined by management relying on pricing received from our independent pricing services and brokers consistent with the process to estimate fair value for Level 2 securities. However, securities are categorized as Level 3 if these quotes cannot be corroborated by other market observable data due to the unobservable nature of the brokers' |
Earnings Per Common Share | Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share gives effect to all dilutive common shares outstanding during the reporting period. The dilutive shares we consider in our diluted earnings per share calculation relate to our outstanding stock options, restricted stock awards and restricted stock unit awards.We determine the dilutive effect of our outstanding stock options using the "treasury stock" method. Under this method, we assume the exercise of all of the outstanding stock options whose exercise price is less than the weighted-average market value of our common stock during the reporting period. This method also assumes that the proceeds from the hypothetical stock option exercises are used to repurchase shares of our common stock at the weighted-average market value of the stock during the reporting period. The net of the assumed stock options exercised and assumed common shares repurchased represents the number of dilutive common shares, which we add to the denominator of the earnings per share calculation. |
Nature of Operations and Basi_3
Nature of Operations and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Components of Deferred Acquisition Costs | The following table is a summary of the components of DAC, including the related amortization recognized for the nine-month period ended September 30, 2023. Total Recorded asset at beginning of period $ 104,225 Underwriting costs deferred 202,768 Amortization of deferred policy acquisition costs (181,700) Recorded asset at September 30, 2023 $ 125,292 |
Schedule of Rollforward of Credit Loss Allowance for Reinsurance Receivable | Rollforward of credit loss allowance for reinsurance receivables: As of September 30, 2023 Beginning balance, January 1, 2023 $ 82 Current-period provision for expected credit losses 48 Ending balance of the allowance for reinsurance receivables, September 30, 2023 $ 130 |
Summary of Investments (Tables)
Summary of Investments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Fair Value of Investments | A reconciliation of the amortized cost to fair value of investments in our available-for-sale fixed maturity portfolio, presented on a consolidated basis, as of September 30, 2023 and December 31, 2022, is provided below: September 30, 2023 Type of Investment Cost or Amortized Cost Gross Unrealized Appreciation Gross Unrealized Depreciation Fair Value Allowance for Credit Losses Carrying Value AVAILABLE-FOR-SALE Fixed maturities: Bonds U.S. Treasury $ 68,133 $ — $ 1,260 $ 66,873 $ — $ 66,873 U.S. government agency 104,695 16 12,813 91,898 — 91,898 States, municipalities and political subdivisions General obligations: Midwest 58,724 — 1,843 56,881 — 56,881 Northeast 11,440 — 441 10,999 — 10,999 South 55,335 — 2,201 53,134 — 53,134 West 78,044 — 2,718 75,326 — 75,326 Special revenue: Midwest 101,204 1 4,327 96,878 — 96,878 Northeast 52,836 — 2,284 50,552 — 50,552 South 168,395 — 8,895 159,500 — 159,500 West 105,521 — 5,005 100,516 — 100,516 Foreign bonds 21,251 — 2,915 18,336 — 18,336 Public utilities 143,162 14 15,759 127,417 — 127,417 Corporate bonds Energy 45,368 — 3,768 41,600 — 41,600 Industrials 73,635 38 7,705 65,968 — 65,968 Consumer goods and services 100,300 — 11,794 88,506 — 88,506 Health care 37,903 — 6,366 31,537 — 31,537 Technology, media and telecommunications 90,285 — 10,037 80,248 — 80,248 Financial services 145,477 — 12,315 133,162 126 133,036 Mortgage-backed securities 24,470 — 3,463 21,007 — 21,007 Collateralized mortgage obligations Government national mortgage association 163,893 — 17,223 146,670 — 146,670 Federal home loan mortgage corporation 88,565 — 16,716 71,849 — 71,849 Federal national mortgage association 52,114 — 6,227 45,887 — 45,887 Asset-backed securities 3,575 456 137 3,894 — 3,894 Total Available-for-Sale Fixed Maturities $ 1,794,325 $ 525 $ 156,212 $ 1,638,638 $ 126 $ 1,638,512 December 31, 2022 Type of Investment Cost or Amortized Cost Gross Unrealized Appreciation Gross Unrealized Depreciation Fair Value Allowance for Credit Losses Carrying Value AVAILABLE-FOR-SALE Fixed maturities: Bonds U.S. Treasury $ 15,684 $ — $ 1,009 $ 14,675 $ — $ 14,675 U.S. government agency 94,092 35 9,721 84,406 — 84,406 States, municipalities and political subdivisions General obligations: Midwest 61,191 185 263 61,113 — 61,113 Northeast 15,518 18 73 15,463 — 15,463 South 64,851 57 927 63,981 — 63,981 West 87,094 163 712 86,545 — 86,545 Special revenue: Midwest 103,107 224 1,065 102,266 — 102,266 Northeast 55,292 76 1,148 54,220 — 54,220 South 184,108 278 3,529 180,857 — 180,857 West 113,594 275 1,657 112,212 — 112,212 Foreign bonds 36,129 — 4,480 31,649 — 31,649 Public utilities 138,752 65 13,406 125,411 — 125,411 Corporate bonds Energy 36,507 — 3,298 33,209 — 33,209 Industrials 58,334 62 5,554 52,842 — 52,842 Consumer goods and services 100,539 — 10,598 89,941 — 89,941 Health care 32,987 24 5,419 27,592 — 27,592 Technology, media and telecommunications 67,193 — 7,253 59,940 — 59,940 Financial services 132,849 851 9,408 124,292 3 124,289 Mortgage-backed securities 20,450 — 2,750 17,700 — 17,700 Collateralized mortgage obligations Government national mortgage association 97,839 — 13,291 84,548 — 84,548 Federal home loan mortgage corporation 92,366 — 13,528 78,838 — 78,838 Federal national mortgage association 50,272 5 4,891 45,386 — 45,386 Asset-backed securities 3,932 466 145 4,253 — 4,253 Total Available-for-Sale Fixed Maturities $ 1,662,680 $ 2,784 $ 114,125 $ 1,551,339 $ 3 $ 1,551,336 |
Schedule of Maturities | The amortized cost and fair value of available-for-sale fixed maturity securities at September 30, 2023, by contractual maturity, are shown in the following tables. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Asset-backed securities, mortgage-backed securities and collateralized mortgage obligations may be subject to prepayment risk and are therefore not categorized by contractual maturity. Maturities Available-For-Sale September 30, 2023 Amortized Cost Fair Value Due in one year or less $ 84,646 $ 84,052 Due after one year through five years 518,815 496,253 Due after five years through 10 years 530,822 476,969 Due after 10 years 327,424 292,056 Asset-backed securities 3,575 3,894 Mortgage-backed securities 24,470 21,007 Collateralized mortgage obligations 304,573 264,407 $ 1,794,325 $ 1,638,638 |
Summary of Net Realized Investment Gains and Losses | A summary of the components of net investment gains (losses) is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net investment gains (losses): Fixed maturities: Available-for-sale $ (19) $ (98) $ (445) $ (1,397) Allowance for credit losses (125) (91) (123) (91) Equity securities Change in the fair value 204 (13,078) (1,960) (32,403) Sales (2,085) (93) 150 (1,767) Mortgage loans allowance for credit losses 1 — (5) 5 Other long-term investments 64 (187) (245) (229) Real estate — (703) 47 235 Total net investment gains (losses) $ (1,960) $ (14,250) $ (2,581) $ (35,647) |
Schedule of Proceeds and Gross Realized Gains and Losses | The proceeds and gross realized gains (losses) on the sale of available-for-sale fixed maturity securities are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Proceeds from sales $ 4,940 $ 18,399 $ 48,749 $ 83,409 Gross realized gains — 12 121 459 Gross realized losses 19 110 566 1,857 |
Schedule of Unrealized Investment Appreciation and Depreciation | A summary of the changes in net unrealized investment appreciation during the reporting period is as follows: Nine Months Ended September 30, 2023 2022 Change in net unrealized investment appreciation (depreciation) Available-for-sale fixed maturities $ (44,087) $ (197,594) Income tax effect 9,258 41,495 Total change in net unrealized investment appreciation (depreciation), net of tax $ (34,829) $ (156,099) |
Schedule of Rollforward of Allowance for Credit Losses for Available-for-Sale Fixed Maturity Securities | The following table contains a rollforward of the allowance for credit losses for available-for-sale fixed maturity securities at September 30, 2023. Rollforward of allowance for credit losses for available-for-sale fixed maturity securities: As of September 30, 2023 Beginning balance, January 1, 2023 $ 3 Additions to the allowance for credit losses for which credit losses were not previously recorded 123 Reductions for securities sold during the period (realized) — Write-offs charged against the allowance — Recoveries of amounts previously written off — Ending balance, September 30, 2023 $ 126 |
Summary of Fixed Maturity Securities in an Unrealized Loss Position | The following tables summarize our fixed maturity securities that were in an unrealized loss position reported on a consolidated basis at September 30, 2023 and December 31, 2022. The securities are presented by the length of time they have been continuously in an unrealized loss position. Non-credit related unrealized losses are recognized as a component of other comprehensive income and represent other market movements that are not credit related, for example interest rate changes. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature. September 30, 2023 Less than 12 months 12 months or longer Total Type of Investment Number Fair Gross Unrealized Number Fair Gross Unrealized Depreciation Fair Gross Unrealized Depreciation AVAILABLE-FOR-SALE Fixed maturities: Bonds U.S. Treasury 5 $ 54,358 $ 390 6 $ 12,515 $ 870 $ 66,873 $ 1,260 U.S. government agency 3 10,643 336 25 75,239 12,477 85,882 12,813 States, municipalities and political subdivisions General obligations Midwest 30 45,359 1,360 3 10,357 483 55,716 1,843 Northeast 4 7,716 214 1 3,283 227 10,999 441 South 23 37,383 989 9 15,751 1,212 53,134 2,201 West 26 54,944 1,498 8 20,382 1,220 75,326 2,718 Special revenue Midwest 38 71,273 2,694 11 22,054 1,633 93,327 4,327 Northeast 11 27,061 956 8 23,491 1,328 50,552 2,284 South 42 95,076 3,480 33 64,424 5,415 159,500 8,895 West 39 59,134 2,017 19 41,380 2,988 100,514 5,005 Foreign bonds — — — 9 18,336 2,915 18,336 2,915 Public utilities 7 17,689 621 49 109,217 15,138 126,906 15,759 Corporate bonds Energy 4 8,604 294 15 32,996 3,474 41,600 3,768 Industrials 6 14,842 331 22 47,010 7,374 61,852 7,705 Consumer goods and services 7 22,863 976 28 65,643 10,818 88,506 11,794 Health care 3 6,604 223 11 24,933 6,143 31,537 6,366 Technology, media and telecommunications 5 17,505 865 28 61,492 9,172 78,997 10,037 Financial services 10 24,655 1,090 44 108,507 11,225 133,162 12,315 Mortgage-backed securities 4 5,656 195 48 15,352 3,268 21,008 3,463 Collateralized mortgage obligations Government National Mortgage Association 18 75,767 1,169 40 70,903 16,054 146,670 17,223 Federal Home Loan Mortgage Corporation 3 7,655 2,523 32 64,194 14,193 71,849 16,716 Federal National Mortgage Association 6 14,078 421 20 31,810 5,806 45,888 6,227 Asset-backed securities — — — 1 3,095 137 3,095 137 Total Available-for-Sale Fixed Maturities 294 $ 678,865 $ 22,642 470 $ 942,364 $ 133,570 $ 1,621,229 $ 156,212 December 31, 2022 Less than 12 months 12 months or longer Total Type of Investment Number Fair Gross Unrealized Depreciation Number Fair Gross Unrealized Depreciation Fair Gross Unrealized Depreciation AVAILABLE-FOR-SALE Fixed maturities: Bonds U.S. Treasury 4 $ 6,656 $ 212 4 $ 8,019 $ 797 $ 14,675 $ 1,009 U.S. government agency 24 70,158 5,606 3 11,242 4,115 81,400 9,721 States, municipalities and political subdivisions General obligations Midwest 16 29,089 263 — — — 29,089 263 Northeast 4 8,576 73 — — — 8,576 73 South 24 48,235 927 — — — 48,235 927 West 27 62,652 711 — — — 62,652 711 Special revenue Midwest 35 67,101 1,065 — — — 67,101 1,065 Northeast 14 37,484 1,148 — — — 37,484 1,148 South 58 126,388 3,124 1 866 405 127,254 3,529 West 39 83,622 1,658 — — — 83,622 1,658 Foreign bonds 9 21,377 1,861 5 10,272 2,619 31,649 4,480 Public utilities 45 101,867 8,737 9 19,979 4,669 121,846 13,406 Corporate bonds Energy 15 28,612 1,930 1 4,597 1,368 33,209 3,298 Industrials 21 43,639 3,542 4 7,049 2,012 50,688 5,554 Consumer goods and services 28 69,320 4,440 7 20,620 6,157 89,940 10,597 Health care 5 9,829 487 6 15,928 4,933 25,757 5,420 Technology, media and telecommunications 23 49,970 3,279 5 9,970 3,974 59,940 7,253 Financial services 40 101,411 6,997 5 11,236 2,208 112,647 9,205 Mortgage-backed securities 38 7,909 1,056 12 9,791 1,693 17,700 2,749 Collateralized mortgage obligations Government National Mortgage Association 29 48,898 4,500 12 35,650 8,791 84,548 13,291 Federal Home Loan Mortgage Corporation 21 35,456 5,629 19 43,383 7,900 78,839 13,529 Federal National Mortgage Association 14 24,146 1,281 7 16,674 3,611 40,820 4,892 Asset-backed securities 1 3,452 145 — — — 3,452 145 Total Available-for-Sale Fixed Maturities 534 $ 1,085,847 $ 58,671 100 $ 225,276 $ 55,252 $ 1,311,123 $ 113,923 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Carrying Value and Estimated Fair Value of Financial Instruments | A summary of the carrying value and estimated fair value of our financial instruments at September 30, 2023 and December 31, 2022 is as follows: September 30, 2023 December 31, 2022 Fair Value Carrying Value Fair Value Carrying Value Assets Investments Fixed maturities: Available-for-sale securities $ 1,638,638 $ 1,638,512 $ 1,551,339 $ 1,551,336 Equity securities 51,217 51,217 169,106 169,106 Mortgage loans 42,280 45,534 35,302 37,898 Other long-term investments 93,836 93,836 86,276 86,276 Short-term investments — — 275 275 Cash and cash equivalents 69,150 69,150 96,650 96,650 Corporate-owned life insurance 11,000 11,000 10,588 10,588 Liabilities Long Term Debt 34,456 50,000 36,168 50,000 |
Summary of Financial Instruments Measured at Fair Value on Recurring Basis | The following tables present the categorization for our financial instruments measured at fair value on a recurring basis. The table includes financial instruments at September 30, 2023 and December 31, 2022: September 30, 2023 Fair Value Measurements Description Total Level 1 Level 2 Level 3 AVAILABLE-FOR-SALE Fixed maturities: Bonds U.S. Treasury $ 66,873 $ — $ 66,873 $ — U.S. government agency 91,898 — 91,898 — States, municipalities and political subdivisions General obligations Midwest 56,881 — 56,881 — Northeast 10,999 — 10,999 — South 53,134 — 53,134 — West 75,326 — 75,326 — Special revenue Midwest 96,878 — 96,878 — Northeast 50,552 — 50,552 — South 159,500 — 159,500 — West 100,516 — 100,516 — Foreign bonds 18,336 — 18,336 — Public utilities 127,417 — 127,417 — Corporate bonds Energy 41,600 — 41,600 — Industrials 65,968 — 65,968 — Consumer goods and services 88,506 — 88,506 — Health care 31,537 — 31,537 — Technology, media and telecommunications 80,248 — 80,248 — Financial services 133,162 — 128,462 4,700 Mortgage-backed securities 21,007 — 21,007 — Collateralized mortgage obligations Government national mortgage association 146,670 — 146,670 — Federal home loan mortgage corporation 71,849 — 71,849 — Federal national mortgage association 45,887 — 45,887 — Asset-backed securities 3,894 — 3,095 799 Total Available-for-Sale Fixed Maturities $ 1,638,638 $ — $ 1,633,139 $ 5,499 EQUITY SECURITIES Common stocks Public utilities $ 3,703 $ 3,703 $ — $ — Energy 9,536 9,536 — — Industrials 13,023 13,023 — — Consumer goods and services 11,127 11,127 — — Health care 1,959 1,959 — — Technology, media and telecommunications 5,612 5,612 — — Financial services 6,257 6,257 — — Total Equity Securities $ 51,217 $ 51,217 $ — $ — Short-Term Investments $ — $ — $ — $ — Money Market Accounts $ 13,977 $ 13,977 $ — $ — Corporate-Owned Life Insurance $ 11,000 $ — $ 11,000 $ — Total Assets Measured at Fair Value $ 1,714,832 $ 65,194 $ 1,644,139 $ 5,499 December 31, 2022 Fair Value Measurements Description Total Level 1 Level 2 Level 3 AVAILABLE-FOR-SALE Fixed maturities: Bonds U.S. Treasury $ 14,675 $ — $ 14,675 $ — U.S. government agency 84,406 — 84,406 — States, municipalities and political subdivisions General obligations Midwest 61,113 — 61,113 — Northeast 15,463 — 15,463 — South 63,981 — 63,981 — West 86,545 — 86,545 — Special revenue Midwest 102,266 — 102,266 — Northeast 54,220 — 54,220 — South 180,857 — 180,857 — West 112,212 — 112,212 — Foreign bonds 31,649 — 31,649 — Public utilities 125,411 — 125,411 — Corporate bonds Energy 33,209 — 33,209 — Industrials 52,842 — 52,842 — Consumer goods and services 89,941 — 89,941 — Health care 27,592 — 27,592 — Technology, media and telecommunications 59,940 — 59,940 — Financial services 124,292 — 118,617 5,675 Mortgage-backed securities 17,700 — 17,700 — Collateralized mortgage obligations Government national mortgage association 84,548 — 84,548 — Federal home loan mortgage corporation 78,838 — 78,838 — Federal national mortgage association 45,386 — 45,386 — Asset-backed securities 4,253 — 3,452 801 Total Available-for-Sale Fixed Maturities $ 1,551,339 $ — $ 1,544,863 $ 6,476 EQUITY SECURITIES Common stocks Public utilities $ 14,846 $ 14,846 $ — $ — Energy 19,743 19,743 — — Industrials 27,163 27,163 — — Consumer goods and services 43,139 43,139 — — Health care 7,981 7,981 — — Technology, media and telecommunications 28,213 28,213 — — Financial services 28,021 28,021 — — Total Equity Securities $ 169,106 $ 169,106 $ — $ — Short-Term Investments $ 275 $ 275 $ — $ — Money Market Accounts $ 31,289 $ 31,289 $ — $ — Corporate-Owned Life Insurance $ 10,588 $ — $ 10,588 $ — Total Assets Measured at Fair Value $ 1,762,597 $ 200,670 $ 1,555,451 $ 6,476 |
Summary of Quantitative Information About Level 3 Fair Value Measurements | The following table provides quantitative information about our Level 3 securities at September 30, 2023: Quantitative Information about Level 3 Fair Value Measurements Fair Value at Valuation Technique(s) Unobservable inputs Range of weighted average significant unobservable inputs September 30, 2023 Fixed Maturities corporate $ 4,700 Third-party valuation Offered quotes 90.0% - 100.0% Fixed Maturities asset-backed securities 799 Discounted cash flow Probability of default 4% - 6% |
Changes in Fair Value of Level 3 Securities | The following table provides a summary of the changes in fair value of our Level 3 securities for the three-month period ended September 30, 2023: Corporate bonds Asset-backed securities Total Beginning Balance - July 1, 2023 $ 4,765 $ 837 $ 5,602 Net unrealized gains (losses) (1) (65) (38) (103) Ending Balance - September 30, 2023 $ 4,700 $ 799 $ 5,499 (1) Net unrealized gains (losses) are recorded as a component of comprehensive income. The following table provides a summary of the changes in fair value of our Level 3 securities for the nine-month period ended September 30, 2023: Corporate bonds Asset-backed securities Total Beginning Balance - January 1, 2023 $ 5,675 $ 801 $ 6,476 Net unrealized gains (losses) (1) (975) (2) (977) Ending Balance - September 30, 2023 $ 4,700 $ 799 $ 5,499 (1) Net unrealized gains (losses) are recorded as a component of comprehensive income. |
Summary of Carrying Value of Commercial Mortgage Loans by Loan-to-Value Ratio | The following tables present the carrying value of our commercial mortgage loans and additional information at September 30, 2023 and December 31, 2022: Commercial Mortgage Loans September 30, 2023 December 31, 2022 Loan-to-value Carrying Value Carrying Value Less than 65% $ 36,883 $ 29,231 65%-75% 8,706 8,716 Total amortized cost $ 45,589 $ 37,947 Allowance for mortgage loan losses (55) (49) Mortgage loans, net $ 45,534 $ 37,898 Mortgage Loans by Region September 30, 2023 December 31, 2022 Carrying Value Percent of Total Carrying Value Percent of Total East North Central $ 3,245 7.1 % $ 3,245 8.6 % Southern Atlantic 17,265 37.8 9,397 24.7 East South Central 7,591 16.7 7,783 20.5 New England 6,588 14.5 6,588 17.4 Middle Atlantic 6,020 13.2 6,139 16.2 Mountain 1,992 4.4 1,992 5.2 West North Central 2,888 6.3 2,803 7.4 Total mortgage loans at amortized cost $ 45,589 100.0 % $ 37,947 100.0 % Mortgage Loans by Property Type September 30, 2023 December 31, 2022 Carrying Value Percent of Total Carrying Value Percent of Total Commercial Multifamily $ 8,536 18.7 % $ 8,493 22.4 % Office 11,030 24.3 11,267 29.7 Industrial 10,003 21.9 10,056 26.5 Retail 10,000 21.9 1,992 5.2 Mixed use/Other 6,020 13.2 6,139 16.2 Total mortgage loans at amortized cost $ 45,589 100.0 % $ 37,947 100.0 % |
Summary of Amortized Cost Basis by Year of Origination and Credit Quality Indicator | Amortized Cost Basis by Year of Origination and Credit Quality Indicator 2023 2022 2020 2019 2018 Total Commercial mortgage loans: Risk Rating: 1-2 internal grade $ 8,136 $ 100 5,292 $ 7,897 $ 17,576 $ 39,001 3-4 internal grade — — — — 6,588 6,588 5 internal grade — — — — — — 6 internal grade — — — — — — 7 internal grade — — — — — — Total commercial mortgage loans $ 8,136 $ 100 $ 5,292 $ 7,897 $ 24,164 $ 45,589 Current-period write-offs — — — — — — Current-period recoveries — — — — — — Current-period net write-offs $ — $ — $ — $ — $ — $ — |
Summary of Rollforward of Allowance for Mortgage Loan Losses | As of September 30, 2023, the Company had an allowance for mortgage loan losses of $55, summarized in the following rollforward: Rollforward of allowance for mortgage loan losses: As of September 30, 2023 Beginning balance, January 1, 2023 $ 49 Current-period provision for expected credit losses 6 Ending balance of the allowance for mortgage loan losses, September 30, 2023 $ 55 |
Reserves for Losses and Loss _2
Reserves for Losses and Loss Settlement Expenses (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Insurance Loss Reserves [Abstract] | |
Summary of Changes in Property and Casualty Losses and Loss Settlement Expense Reserves | The following table provides an analysis of changes in our property and casualty losses and loss settlement expense reserves at September 30, 2023 and December 31, 2022 (net of reinsurance amounts): September 30, 2023 December 31, 2022 Gross liability for losses and loss settlement expenses $ 1,497,274 $ 1,514,265 Ceded losses and loss settlement expenses (146,875) (112,900) Net liability for losses and loss settlement expenses $ 1,350,399 $ 1,401,365 Losses and loss settlement expenses incurred Current year $ 538,941 $ 624,411 Prior years 59,184 12,890 Total incurred $ 598,125 $ 637,301 Losses and loss settlement expense payments Current year $ 131,408 $ 215,891 Prior years 371,723 472,377 Total paid $ 503,131 $ 688,268 Net liability for losses and loss settlement expenses $ 1,445,394 $ 1,350,399 Ceded losses and loss settlement expenses 191,525 146,875 Gross liability for losses and loss settlement expenses $ 1,636,918 $ 1,497,274 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Summary of Components of Net Periodic Benefit Cost | The components of the net periodic benefit cost for our pension and postretirement benefit plans are as follows: Pension Plan Postretirement Benefit Plan Three Months Ended September 30, 2023 2022 2023 2022 Net periodic benefit cost Service cost $ 954 $ 1,120 $ — $ — Interest cost 2,526 1,933 — 1 Expected return on plan assets (3,756) (4,723) — — Amortization of prior service credit (820) (820) — (3,771) Amortization of net loss 52 194 — 706 Net periodic benefit cost $ (1,044) $ (2,296) $ — $ (3,064) Pension Plan Postretirement Benefit Plan Nine Months Ended September 30, 2023 2022 2023 2022 Net periodic benefit cost Service cost $ 2,863 $ 3,361 $ — $ — Interest cost 7,579 5,798 — 2 Expected return on plan assets (11,269) (14,168) — — Amortization of prior service credit (2,460) (2,460) — (11,314) Amortization of net loss 155 583 — 2,118 Net periodic benefit cost $ (3,131) $ (6,887) $ — $ (9,194) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Activity in Stock Award Plans | The activity in the Stock Plan is displayed in the following table: Authorized Shares Available for Future Award Grants Nine Months Ended September 30, 2023 From Inception to September 30, 2023 Beginning balance 1,342,119 1,900,000 Additional shares authorized — 2,150,000 Number of awards granted (305,241) (3,927,382) Number of awards forfeited or expired 71,541 985,801 Ending balance 1,108,419 1,108,419 Number of option awards exercised 4,000 1,537,336 Number of unrestricted stock awards granted — 10,090 Number of restricted stock awards vested 28,100 295,945 The activity in the Director Stock Plan is displayed in the following table: Authorized Shares Available for Future Award Grants Nine Months Ended September 30, 2023 From Inception to September 30, 2023 Beginning balance 123,397 300,000 Additional authorization — 150,000 Number of awards granted (31,380) (386,618) Number of awards forfeited or expired 11,583 40,218 Ending balance 103,600 103,600 Number of option awards exercised 1,755 152,336 Number of restricted stock awards vested — 117,001 |
Summary of Remaining Stock-Based Compensation Expense | We expect this compensation to be recognized over the remainder of 2023 and subsequent years according to the table below, except with respect to awards that are accelerated by the Board of Directors, in which case we will recognize any remaining compensation expense in the period in which the awards are accelerated. 2023 $ 1,034 2024 3,364 2025 1,878 2026 266 2027 — Total $ 6,542 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Components of Basic and Diluted Earnings Per Share | The components of basic and diluted earnings per share were as follows for the three- and nine-month periods ended September 30, 2023 and 2022: Three Months Ended September 30, (In Thousands, Except Share Data) 2023 2022 Basic Diluted Basic Diluted Net income (loss) $ 6,380 $ 6,380 $ (22,981) $ (22,981) Weighted-average common shares outstanding 25,263,523 25,263,523 25,188,958 25,188,958 Add dilutive effect of restricted stock unit awards — 295,997 — — Add dilutive effect of stock options — 19,814 — — Weighted-average common shares outstanding 25,263,523 25,579,334 25,188,958 25,188,958 Earnings (loss) per common share $ 0.25 $ 0.25 $ (0.91) $ (0.91) Awards excluded from diluted earnings per share calculation (1) — 837,482 — 392,062 (1) Outstanding awards that are not "in-the-money" are excluded from the diluted earnings per share calculation because the effect of including them would have been anti-dilutive. Nine Months Ended September 30, (In Thousands, Except Share Data) 2023 2022 Basic Diluted Basic Diluted Net income (loss) $ (49,308) $ (49,308) $ (5,089) $ (5,089) Weighted-average common shares outstanding 25,244,502 25,244,502 25,146,318 25,146,318 Add dilutive effect of restricted stock unit awards — — — — Add dilutive effect of stock options — — — — Weighted-average common shares outstanding 25,244,502 25,244,502 25,146,318 25,146,318 Earnings (loss) per common share $ (1.95) $ (1.95) $ (0.20) $ (0.20) Awards excluded from diluted earnings per share calculation (1) — 814,636 — 479,981 (1) Outstanding awards that are not "in-the-money" are excluded from the diluted earnings per share calculation because the effect of including them would have been anti-dilutive. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Interest Payments | As a result of this downgrade, the interest rate on the long term debt will increase to 6.875%, beginning with the December 15, 2023 payment, in accordance with the table below. A.M. Best Co. Financial Strength Rating Applicable Interest Rate A+ 5.875% A 6.375% A- 6.875% B++ (or lower) 7.375% |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table shows the changes in the components of our accumulated other comprehensive income (loss), net of tax, for the three-month period ended September 30, 2023: Liability for Net unrealized underfunded appreciation employee on investments benefit costs (1) Total Balance as of June 30, 2023 (89,094) (341) $ (89,435) Change in accumulated other comprehensive income (loss) before reclassifications (34,166) (646) (34,812) Reclassification adjustments from accumulated other comprehensive income (loss) 62 40 102 Balance as of September 30, 2023 $ (123,198) $ (947) $ (124,145) (1) The preparation of financial statements in conformity with GAAP requires us to make various estimates and assumptions that affect the reporting of net periodic benefit cost, plan assets and plan obligations for each plan at the date of the financial statements. Actual results could differ from these estimates. One significant estimate relates to the calculation of the benefit obligation for each plan. We annually establish the discount rate, which is an estimate of the interest rate at which these benefits could be effectively settled, that is used to determine the present value of the respective plan's benefit obligations as of December 31. The following table shows the changes in the components of our accumulated other comprehensive income (loss), net of tax, for the nine-month period ended September 30, 2023: Liability for Net unrealized underfunded appreciation employee on investments benefit costs (1) Total Balance as of January 1, 2023 (88,369) 873 $ (87,496) Change in accumulated other comprehensive income before reclassifications (35,438) (1,942) (37,380) Reclassification adjustments from accumulated other comprehensive income (loss) 609 122 731 Balance as of September 30, 2023 $ (123,198) $ (947) $ (124,145) |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Summary of Components of Operating Leases | The components of our operating leases were as follows for the three- and nine-month periods ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Components of lease expense: Operating lease expense $ 2,255 $ 2,201 $ 6,653 $ 6,569 Less sublease income 305 53 732 160 Net lease expense 1,950 2,148 5,921 6,409 Cash flows information related to leases: Operating cash outflow from operating leases 1,952 2,170 5,996 6,471 |
Nature of Operations and Basi_4
Nature of Operations and Basis of Presentation - Segment Information (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) segment state | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of states in which we are licensed as insurer | state | 50 |
Number of reportable segments | segment | 1 |
Cash on deposit with Lloyd's of London | $ | $ 24,383 |
Nature of Operations and Basi_5
Nature of Operations and Basis of Presentation - Deferred Policy Acquisition Costs (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | |
Recorded asset at beginning of period | $ 104,225 |
Underwriting costs deferred | 202,768 |
Amortization of deferred policy acquisition costs | (181,700) |
Recorded asset at ending of period | $ 125,292 |
Nature of Operations and Basi_6
Nature of Operations and Basis of Presentation - Goodwill and Other Intangible Assets (Details) | Sep. 30, 2023 |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 2 years |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 15 years |
Nature of Operations and Basi_7
Nature of Operations and Basis of Presentation - Long Term Debt (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 15, 2020 | |
Debt Instrument [Line Items] | |||||
Interest expense | $ 797,000 | $ 797,000 | $ 2,391,000 | $ 2,391,000 | |
Surplus Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 50,000,000 | ||||
Surplus Notes | Federated Mutual | |||||
Debt Instrument [Line Items] | |||||
Principal amount | 35,000,000 | ||||
Surplus Notes | Federated Life | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 15,000,000 |
Nature of Operations and Basi_8
Nature of Operations and Basis of Presentation - Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Federal income tax benefit | $ (1,996,000) | $ 8,248,000 | $ 14,544,000 | $ 5,475,000 | |
Liability for unrecognized tax benefits | 0 | 0 | $ 0 | ||
Valuation allowance | $ 0 | 0 | $ 0 | ||
Income taxes paid | 1,336,000 | 21,537,000 | |||
Federal tax refund received | $ 0 | $ 10,789,000 |
Nature of Operations and Basi_9
Nature of Operations and Basis of Presentation - Variable Interest Entities (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 USD ($) variable_interest_entity | Dec. 31, 2022 USD ($) | |
Variable Interest Entity [Line Items] | ||
Number of variable interest entities | variable_interest_entity | 1 | |
Fair value of VIE | $ 3,051,779 | $ 2,882,286 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Fair value of VIE | $ 2,650 |
Nature of Operations and Bas_10
Nature of Operations and Basis of Presentation - Credit Losses (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Credit loss allowance for reinsurance receivables | $ 130 | $ 82 |
Nature of Operations and Bas_11
Nature of Operations and Basis of Presentation - Rollforward of Credit Loss Allowance for Reinsurance Receivable (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Reinsurance Recoverable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance, January 1, 2023 | $ 82 |
Current-period provision for expected credit losses | 48 |
Ending balance of the allowance for reinsurance receivables, September 30, 2023 | $ 130 |
Summary of Investments - Fair V
Summary of Investments - Fair Value of Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fixed maturities: | ||
Amortized Cost | $ 1,794,325 | $ 1,662,680 |
Gross Unrealized Appreciation | 525 | 2,784 |
Gross Unrealized Depreciation | 156,212 | 114,125 |
Fair Value | 1,638,638 | 1,551,339 |
Allowance for Credit Losses | 126 | 3 |
Carrying Value | 1,638,512 | 1,551,336 |
U.S. Treasury | ||
Fixed maturities: | ||
Amortized Cost | 68,133 | 15,684 |
Gross Unrealized Appreciation | 0 | 0 |
Gross Unrealized Depreciation | 1,260 | 1,009 |
Fair Value | 66,873 | 14,675 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 66,873 | 14,675 |
U.S. government agency | ||
Fixed maturities: | ||
Amortized Cost | 104,695 | 94,092 |
Gross Unrealized Appreciation | 16 | 35 |
Gross Unrealized Depreciation | 12,813 | 9,721 |
Fair Value | 91,898 | 84,406 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 91,898 | 84,406 |
General obligations | Midwest | ||
Fixed maturities: | ||
Amortized Cost | 58,724 | 61,191 |
Gross Unrealized Appreciation | 0 | 185 |
Gross Unrealized Depreciation | 1,843 | 263 |
Fair Value | 56,881 | 61,113 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 56,881 | 61,113 |
General obligations | Northeast | ||
Fixed maturities: | ||
Amortized Cost | 11,440 | 15,518 |
Gross Unrealized Appreciation | 0 | 18 |
Gross Unrealized Depreciation | 441 | 73 |
Fair Value | 10,999 | 15,463 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 10,999 | 15,463 |
General obligations | South | ||
Fixed maturities: | ||
Amortized Cost | 55,335 | 64,851 |
Gross Unrealized Appreciation | 0 | 57 |
Gross Unrealized Depreciation | 2,201 | 927 |
Fair Value | 53,134 | 63,981 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 53,134 | 63,981 |
General obligations | West | ||
Fixed maturities: | ||
Amortized Cost | 78,044 | 87,094 |
Gross Unrealized Appreciation | 0 | 163 |
Gross Unrealized Depreciation | 2,718 | 712 |
Fair Value | 75,326 | 86,545 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 75,326 | 86,545 |
Special revenue | Midwest | ||
Fixed maturities: | ||
Amortized Cost | 101,204 | 103,107 |
Gross Unrealized Appreciation | 1 | 224 |
Gross Unrealized Depreciation | 4,327 | 1,065 |
Fair Value | 96,878 | 102,266 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 96,878 | 102,266 |
Special revenue | Northeast | ||
Fixed maturities: | ||
Amortized Cost | 52,836 | 55,292 |
Gross Unrealized Appreciation | 0 | 76 |
Gross Unrealized Depreciation | 2,284 | 1,148 |
Fair Value | 50,552 | 54,220 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 50,552 | 54,220 |
Special revenue | South | ||
Fixed maturities: | ||
Amortized Cost | 168,395 | 184,108 |
Gross Unrealized Appreciation | 0 | 278 |
Gross Unrealized Depreciation | 8,895 | 3,529 |
Fair Value | 159,500 | 180,857 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 159,500 | 180,857 |
Special revenue | West | ||
Fixed maturities: | ||
Amortized Cost | 105,521 | 113,594 |
Gross Unrealized Appreciation | 0 | 275 |
Gross Unrealized Depreciation | 5,005 | 1,657 |
Fair Value | 100,516 | 112,212 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 100,516 | 112,212 |
Foreign bonds | ||
Fixed maturities: | ||
Amortized Cost | 21,251 | 36,129 |
Gross Unrealized Appreciation | 0 | 0 |
Gross Unrealized Depreciation | 2,915 | 4,480 |
Fair Value | 18,336 | 31,649 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 18,336 | 31,649 |
Public utilities | ||
Fixed maturities: | ||
Amortized Cost | 143,162 | 138,752 |
Gross Unrealized Appreciation | 14 | 65 |
Gross Unrealized Depreciation | 15,759 | 13,406 |
Fair Value | 127,417 | 125,411 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 127,417 | 125,411 |
Corporate bonds | Energy | ||
Fixed maturities: | ||
Amortized Cost | 45,368 | 36,507 |
Gross Unrealized Appreciation | 0 | 0 |
Gross Unrealized Depreciation | 3,768 | 3,298 |
Fair Value | 41,600 | 33,209 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 41,600 | 33,209 |
Corporate bonds | Industrials | ||
Fixed maturities: | ||
Amortized Cost | 73,635 | 58,334 |
Gross Unrealized Appreciation | 38 | 62 |
Gross Unrealized Depreciation | 7,705 | 5,554 |
Fair Value | 65,968 | 52,842 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 65,968 | 52,842 |
Corporate bonds | Consumer goods and services | ||
Fixed maturities: | ||
Amortized Cost | 100,300 | 100,539 |
Gross Unrealized Appreciation | 0 | 0 |
Gross Unrealized Depreciation | 11,794 | 10,598 |
Fair Value | 88,506 | 89,941 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 88,506 | 89,941 |
Corporate bonds | Health care | ||
Fixed maturities: | ||
Amortized Cost | 37,903 | 32,987 |
Gross Unrealized Appreciation | 0 | 24 |
Gross Unrealized Depreciation | 6,366 | 5,419 |
Fair Value | 31,537 | 27,592 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 31,537 | 27,592 |
Corporate bonds | Technology, media and telecommunications | ||
Fixed maturities: | ||
Amortized Cost | 90,285 | 67,193 |
Gross Unrealized Appreciation | 0 | 0 |
Gross Unrealized Depreciation | 10,037 | 7,253 |
Fair Value | 80,248 | 59,940 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 80,248 | 59,940 |
Corporate bonds | Financial services | ||
Fixed maturities: | ||
Amortized Cost | 145,477 | 132,849 |
Gross Unrealized Appreciation | 0 | 851 |
Gross Unrealized Depreciation | 12,315 | 9,408 |
Fair Value | 133,162 | 124,292 |
Allowance for Credit Losses | 126 | 3 |
Carrying Value | 133,036 | 124,289 |
Mortgage-backed securities | ||
Fixed maturities: | ||
Amortized Cost | 24,470 | 20,450 |
Gross Unrealized Appreciation | 0 | 0 |
Gross Unrealized Depreciation | 3,463 | 2,750 |
Fair Value | 21,007 | 17,700 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 21,007 | 17,700 |
Collateralized mortgage obligations | Government national mortgage association | ||
Fixed maturities: | ||
Amortized Cost | 163,893 | 97,839 |
Gross Unrealized Appreciation | 0 | 0 |
Gross Unrealized Depreciation | 17,223 | 13,291 |
Fair Value | 146,670 | 84,548 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 146,670 | 84,548 |
Collateralized mortgage obligations | Federal home loan mortgage corporation | ||
Fixed maturities: | ||
Amortized Cost | 88,565 | 92,366 |
Gross Unrealized Appreciation | 0 | 0 |
Gross Unrealized Depreciation | 16,716 | 13,528 |
Fair Value | 71,849 | 78,838 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 71,849 | 78,838 |
Collateralized mortgage obligations | Federal national mortgage association | ||
Fixed maturities: | ||
Amortized Cost | 52,114 | 50,272 |
Gross Unrealized Appreciation | 0 | 5 |
Gross Unrealized Depreciation | 6,227 | 4,891 |
Fair Value | 45,887 | 45,386 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | 45,887 | 45,386 |
Asset-backed securities | ||
Fixed maturities: | ||
Amortized Cost | 3,575 | 3,932 |
Gross Unrealized Appreciation | 456 | 466 |
Gross Unrealized Depreciation | 137 | 145 |
Fair Value | 3,894 | 4,253 |
Allowance for Credit Losses | 0 | 0 |
Carrying Value | $ 3,894 | $ 4,253 |
Summary of Investments - Maturi
Summary of Investments - Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Amortized Cost | ||
Due in one year or less | $ 84,646 | |
Due after one year through five years | 518,815 | |
Due after five years through 10 years | 530,822 | |
Due after 10 years | 327,424 | |
Amortized Cost | 1,794,325 | $ 1,662,680 |
Fair Value | ||
Due in one year or less | 84,052 | |
Due after one year through five years | 496,253 | |
Due after five years through 10 years | 476,969 | |
Due after 10 years | 292,056 | |
Fair Value | 1,638,512 | 1,551,336 |
Asset-backed securities | ||
Amortized Cost | ||
Securities not categorized by contractual maturity | 3,575 | |
Amortized Cost | 3,575 | 3,932 |
Fair Value | ||
Securities not categorized by contractual maturity | 3,894 | |
Fair Value | 3,894 | 4,253 |
Mortgage-backed securities | ||
Amortized Cost | ||
Securities not categorized by contractual maturity | 24,470 | |
Amortized Cost | 24,470 | 20,450 |
Fair Value | ||
Securities not categorized by contractual maturity | 21,007 | |
Fair Value | 21,007 | $ 17,700 |
Collateralized mortgage obligations | ||
Amortized Cost | ||
Securities not categorized by contractual maturity | 304,573 | |
Fair Value | ||
Securities not categorized by contractual maturity | 264,407 | |
Fixed maturities | ||
Amortized Cost | ||
Amortized Cost | 1,794,325 | |
Fair Value | ||
Fair Value | $ 1,638,638 |
Summary of Investments - Net In
Summary of Investments - Net Investment Gains and Losses and Proceeds (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net investment gains (losses): | ||||
Available-for-sale | $ (19) | $ (98) | $ (445) | $ (1,397) |
Allowance for credit losses | (125) | (91) | (123) | (91) |
Mortgage loans allowance for credit losses | 1 | 0 | (5) | 5 |
Other long-term investments | 64 | (187) | (245) | (229) |
Real estate | 0 | (703) | 47 | 235 |
Total net investment gains (losses) | (1,960) | (14,250) | (2,581) | (35,647) |
Proceeds from sales | 48,749 | 83,409 | ||
Change in the fair value | ||||
Net investment gains (losses): | ||||
Equity securities | 204 | (13,078) | (1,960) | (32,403) |
Sales | ||||
Net investment gains (losses): | ||||
Equity securities | (2,085) | (93) | 150 | (1,767) |
Fixed maturities | ||||
Net investment gains (losses): | ||||
Proceeds from sales | 4,940 | 18,399 | 48,749 | 83,409 |
Gross realized gains | 0 | 12 | 121 | 459 |
Gross realized losses | $ 19 | $ 110 | $ 566 | $ 1,857 |
Summary of Investments - Narrat
Summary of Investments - Narrative (Details) $ in Thousands | 1 Months Ended | |
Dec. 31, 2019 USD ($) date | Sep. 30, 2023 USD ($) | |
Investments, Debt and Equity Securities [Abstract] | ||
Remaining potential contractual obligation | $ 32,248 | |
Investment in limited liability partnership investment fund | $ 25,000 | |
Lockup period | 3 years | |
Minimum notice period | 60 days | |
Number of possible repurchase dates | date | 4 | |
Investment fair value | $ 25,218 |
Summary of Investments - Unreal
Summary of Investments - Unrealized Appreciation and Depreciation (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Change in net unrealized investment appreciation (depreciation) | ||
Available-for-sale fixed maturities | $ (44,087) | $ (197,594) |
Income tax effect | 9,258 | 41,495 |
Total change in net unrealized investment appreciation (depreciation), net of tax | $ (34,829) | $ (156,099) |
Summary of Investments - Rollfo
Summary of Investments - Rollforward of Allowance for Credit Losses for Available-for-Sale Fixed Maturity Securities (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Rollforward of allowance for credit losses for available-for-sale fixed maturity securities: | |
Beginning balance, January 1, 2023 | $ 3 |
Additions to the allowance for credit losses for which credit losses were not previously recorded | 123 |
Reductions for securities sold during the period (realized) | 0 |
Write-offs charged against the allowance | 0 |
Recoveries of amounts previously written off | 0 |
Ending balance, September 30, 2023 | $ 126 |
Summary of Investments - Invest
Summary of Investments - Investments in Unrealized Loss Position (Details) $ in Thousands | Sep. 30, 2023 USD ($) issue | Dec. 31, 2022 USD ($) issue |
Number of Issues | ||
Less than 12 months | issue | 294 | 534 |
12 months or longer | issue | 470 | 100 |
Fair Value | ||
Less than 12 months | $ 678,865 | $ 1,085,847 |
12 months or longer | 942,364 | 225,276 |
Total | 1,621,229 | 1,311,123 |
Gross Unrealized Depreciation | ||
Less than 12 months | 22,642 | 58,671 |
12 months or longer | 133,570 | 55,252 |
Total | $ 156,212 | $ 113,923 |
U.S. Treasury | ||
Number of Issues | ||
Less than 12 months | issue | 5 | 4 |
12 months or longer | issue | 6 | 4 |
Fair Value | ||
Less than 12 months | $ 54,358 | $ 6,656 |
12 months or longer | 12,515 | 8,019 |
Total | 66,873 | 14,675 |
Gross Unrealized Depreciation | ||
Less than 12 months | 390 | 212 |
12 months or longer | 870 | 797 |
Total | $ 1,260 | $ 1,009 |
U.S. government agency | ||
Number of Issues | ||
Less than 12 months | issue | 3 | 24 |
12 months or longer | issue | 25 | 3 |
Fair Value | ||
Less than 12 months | $ 10,643 | $ 70,158 |
12 months or longer | 75,239 | 11,242 |
Total | 85,882 | 81,400 |
Gross Unrealized Depreciation | ||
Less than 12 months | 336 | 5,606 |
12 months or longer | 12,477 | 4,115 |
Total | $ 12,813 | $ 9,721 |
General obligations | Midwest | ||
Number of Issues | ||
Less than 12 months | issue | 30 | 16 |
12 months or longer | issue | 3 | 0 |
Fair Value | ||
Less than 12 months | $ 45,359 | $ 29,089 |
12 months or longer | 10,357 | 0 |
Total | 55,716 | 29,089 |
Gross Unrealized Depreciation | ||
Less than 12 months | 1,360 | 263 |
12 months or longer | 483 | 0 |
Total | $ 1,843 | $ 263 |
General obligations | Northeast | ||
Number of Issues | ||
Less than 12 months | issue | 4 | 4 |
12 months or longer | issue | 1 | 0 |
Fair Value | ||
Less than 12 months | $ 7,716 | $ 8,576 |
12 months or longer | 3,283 | 0 |
Total | 10,999 | 8,576 |
Gross Unrealized Depreciation | ||
Less than 12 months | 214 | 73 |
12 months or longer | 227 | 0 |
Total | $ 441 | $ 73 |
General obligations | South | ||
Number of Issues | ||
Less than 12 months | issue | 23 | 24 |
12 months or longer | issue | 9 | 0 |
Fair Value | ||
Less than 12 months | $ 37,383 | $ 48,235 |
12 months or longer | 15,751 | 0 |
Total | 53,134 | 48,235 |
Gross Unrealized Depreciation | ||
Less than 12 months | 989 | 927 |
12 months or longer | 1,212 | 0 |
Total | $ 2,201 | $ 927 |
General obligations | West | ||
Number of Issues | ||
Less than 12 months | issue | 26 | 27 |
12 months or longer | issue | 8 | 0 |
Fair Value | ||
Less than 12 months | $ 54,944 | $ 62,652 |
12 months or longer | 20,382 | 0 |
Total | 75,326 | 62,652 |
Gross Unrealized Depreciation | ||
Less than 12 months | 1,498 | 711 |
12 months or longer | 1,220 | 0 |
Total | $ 2,718 | $ 711 |
Special revenue | Midwest | ||
Number of Issues | ||
Less than 12 months | issue | 38 | 35 |
12 months or longer | issue | 11 | 0 |
Fair Value | ||
Less than 12 months | $ 71,273 | $ 67,101 |
12 months or longer | 22,054 | 0 |
Total | 93,327 | 67,101 |
Gross Unrealized Depreciation | ||
Less than 12 months | 2,694 | 1,065 |
12 months or longer | 1,633 | 0 |
Total | $ 4,327 | $ 1,065 |
Special revenue | Northeast | ||
Number of Issues | ||
Less than 12 months | issue | 11 | 14 |
12 months or longer | issue | 8 | 0 |
Fair Value | ||
Less than 12 months | $ 27,061 | $ 37,484 |
12 months or longer | 23,491 | 0 |
Total | 50,552 | 37,484 |
Gross Unrealized Depreciation | ||
Less than 12 months | 956 | 1,148 |
12 months or longer | 1,328 | 0 |
Total | $ 2,284 | $ 1,148 |
Special revenue | South | ||
Number of Issues | ||
Less than 12 months | issue | 42 | 58 |
12 months or longer | issue | 33 | 1 |
Fair Value | ||
Less than 12 months | $ 95,076 | $ 126,388 |
12 months or longer | 64,424 | 866 |
Total | 159,500 | 127,254 |
Gross Unrealized Depreciation | ||
Less than 12 months | 3,480 | 3,124 |
12 months or longer | 5,415 | 405 |
Total | $ 8,895 | $ 3,529 |
Special revenue | West | ||
Number of Issues | ||
Less than 12 months | issue | 39 | 39 |
12 months or longer | issue | 19 | 0 |
Fair Value | ||
Less than 12 months | $ 59,134 | $ 83,622 |
12 months or longer | 41,380 | 0 |
Total | 100,514 | 83,622 |
Gross Unrealized Depreciation | ||
Less than 12 months | 2,017 | 1,658 |
12 months or longer | 2,988 | 0 |
Total | $ 5,005 | $ 1,658 |
Foreign bonds | ||
Number of Issues | ||
Less than 12 months | issue | 0 | 9 |
12 months or longer | issue | 9 | 5 |
Fair Value | ||
Less than 12 months | $ 0 | $ 21,377 |
12 months or longer | 18,336 | 10,272 |
Total | 18,336 | 31,649 |
Gross Unrealized Depreciation | ||
Less than 12 months | 0 | 1,861 |
12 months or longer | 2,915 | 2,619 |
Total | $ 2,915 | $ 4,480 |
Public utilities | ||
Number of Issues | ||
Less than 12 months | issue | 7 | 45 |
12 months or longer | issue | 49 | 9 |
Fair Value | ||
Less than 12 months | $ 17,689 | $ 101,867 |
12 months or longer | 109,217 | 19,979 |
Total | 126,906 | 121,846 |
Gross Unrealized Depreciation | ||
Less than 12 months | 621 | 8,737 |
12 months or longer | 15,138 | 4,669 |
Total | $ 15,759 | $ 13,406 |
Corporate bonds | Energy | ||
Number of Issues | ||
Less than 12 months | issue | 4 | 15 |
12 months or longer | issue | 15 | 1 |
Fair Value | ||
Less than 12 months | $ 8,604 | $ 28,612 |
12 months or longer | 32,996 | 4,597 |
Total | 41,600 | 33,209 |
Gross Unrealized Depreciation | ||
Less than 12 months | 294 | 1,930 |
12 months or longer | 3,474 | 1,368 |
Total | $ 3,768 | $ 3,298 |
Corporate bonds | Industrials | ||
Number of Issues | ||
Less than 12 months | issue | 6 | 21 |
12 months or longer | issue | 22 | 4 |
Fair Value | ||
Less than 12 months | $ 14,842 | $ 43,639 |
12 months or longer | 47,010 | 7,049 |
Total | 61,852 | 50,688 |
Gross Unrealized Depreciation | ||
Less than 12 months | 331 | 3,542 |
12 months or longer | 7,374 | 2,012 |
Total | $ 7,705 | $ 5,554 |
Corporate bonds | Consumer goods and services | ||
Number of Issues | ||
Less than 12 months | issue | 7 | 28 |
12 months or longer | issue | 28 | 7 |
Fair Value | ||
Less than 12 months | $ 22,863 | $ 69,320 |
12 months or longer | 65,643 | 20,620 |
Total | 88,506 | 89,940 |
Gross Unrealized Depreciation | ||
Less than 12 months | 976 | 4,440 |
12 months or longer | 10,818 | 6,157 |
Total | $ 11,794 | $ 10,597 |
Corporate bonds | Health care | ||
Number of Issues | ||
Less than 12 months | issue | 3 | 5 |
12 months or longer | issue | 11 | 6 |
Fair Value | ||
Less than 12 months | $ 6,604 | $ 9,829 |
12 months or longer | 24,933 | 15,928 |
Total | 31,537 | 25,757 |
Gross Unrealized Depreciation | ||
Less than 12 months | 223 | 487 |
12 months or longer | 6,143 | 4,933 |
Total | $ 6,366 | $ 5,420 |
Corporate bonds | Technology, media and telecommunications | ||
Number of Issues | ||
Less than 12 months | issue | 5 | 23 |
12 months or longer | issue | 28 | 5 |
Fair Value | ||
Less than 12 months | $ 17,505 | $ 49,970 |
12 months or longer | 61,492 | 9,970 |
Total | 78,997 | 59,940 |
Gross Unrealized Depreciation | ||
Less than 12 months | 865 | 3,279 |
12 months or longer | 9,172 | 3,974 |
Total | $ 10,037 | $ 7,253 |
Corporate bonds | Financial services | ||
Number of Issues | ||
Less than 12 months | issue | 10 | 40 |
12 months or longer | issue | 44 | 5 |
Fair Value | ||
Less than 12 months | $ 24,655 | $ 101,411 |
12 months or longer | 108,507 | 11,236 |
Total | 133,162 | 112,647 |
Gross Unrealized Depreciation | ||
Less than 12 months | 1,090 | 6,997 |
12 months or longer | 11,225 | 2,208 |
Total | $ 12,315 | $ 9,205 |
Mortgage-backed securities | ||
Number of Issues | ||
Less than 12 months | issue | 4 | 38 |
12 months or longer | issue | 48 | 12 |
Fair Value | ||
Less than 12 months | $ 5,656 | $ 7,909 |
12 months or longer | 15,352 | 9,791 |
Total | 21,008 | 17,700 |
Gross Unrealized Depreciation | ||
Less than 12 months | 195 | 1,056 |
12 months or longer | 3,268 | 1,693 |
Total | $ 3,463 | $ 2,749 |
Collateralized mortgage obligations | Government national mortgage association | ||
Number of Issues | ||
Less than 12 months | issue | 18 | 14 |
12 months or longer | issue | 40 | 7 |
Fair Value | ||
Less than 12 months | $ 75,767 | $ 24,146 |
12 months or longer | 70,903 | 16,674 |
Total | 146,670 | 40,820 |
Gross Unrealized Depreciation | ||
Less than 12 months | 1,169 | 1,281 |
12 months or longer | 16,054 | 3,611 |
Total | $ 17,223 | $ 4,892 |
Collateralized mortgage obligations | Federal home loan mortgage corporation | ||
Number of Issues | ||
Less than 12 months | issue | 3 | 29 |
12 months or longer | issue | 32 | 12 |
Fair Value | ||
Less than 12 months | $ 7,655 | $ 48,898 |
12 months or longer | 64,194 | 35,650 |
Total | 71,849 | 84,548 |
Gross Unrealized Depreciation | ||
Less than 12 months | 2,523 | 4,500 |
12 months or longer | 14,193 | 8,791 |
Total | $ 16,716 | $ 13,291 |
Collateralized mortgage obligations | Federal national mortgage association | ||
Number of Issues | ||
Less than 12 months | issue | 6 | 21 |
12 months or longer | issue | 20 | 19 |
Fair Value | ||
Less than 12 months | $ 14,078 | $ 35,456 |
12 months or longer | 31,810 | 43,383 |
Total | 45,888 | 78,839 |
Gross Unrealized Depreciation | ||
Less than 12 months | 421 | 5,629 |
12 months or longer | 5,806 | 7,900 |
Total | $ 6,227 | $ 13,529 |
Asset-backed securities | ||
Number of Issues | ||
Less than 12 months | issue | 0 | 1 |
12 months or longer | issue | 1 | 0 |
Fair Value | ||
Less than 12 months | $ 0 | $ 3,452 |
12 months or longer | 3,095 | 0 |
Total | 3,095 | 3,452 |
Gross Unrealized Depreciation | ||
Less than 12 months | 0 | 145 |
12 months or longer | 137 | 0 |
Total | $ 137 | $ 145 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Accrued interest excluded from carrying value | $ 173 | |
Allowance for mortgage loan losses | 55 | $ 49 |
Rabbi Trust | Other Assets | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash surrender value | $ 11,000 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Carrying Value and Estimated Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fixed maturities: | ||
Available-for-sale securities | $ 1,638,512 | $ 1,551,336 |
Equity securities | 51,217 | 169,106 |
Mortgage loans | 45,534 | 37,898 |
Fixed maturities | ||
Fixed maturities: | ||
Available-for-sale securities | 1,638,638 | |
Fair Value | ||
Fixed maturities: | ||
Equity securities | 51,217 | 169,106 |
Mortgage loans | 42,280 | 35,302 |
Other long-term investments | 93,836 | 86,276 |
Short-term investments | 0 | 275 |
Cash and cash equivalents | 69,150 | 96,650 |
Corporate-owned life insurance | 11,000 | 10,588 |
Liabilities | ||
Long Term Debt | 34,456 | 36,168 |
Fair Value | Fixed maturities | ||
Fixed maturities: | ||
Available-for-sale securities | 1,638,638 | 1,551,339 |
Carrying Value | ||
Fixed maturities: | ||
Equity securities | 51,217 | 169,106 |
Mortgage loans | 45,534 | 37,898 |
Other long-term investments | 93,836 | 86,276 |
Short-term investments | 0 | 275 |
Cash and cash equivalents | 69,150 | 96,650 |
Corporate-owned life insurance | 11,000 | 10,588 |
Liabilities | ||
Long Term Debt | 50,000 | 50,000 |
Carrying Value | Fixed maturities | ||
Fixed maturities: | ||
Available-for-sale securities | $ 1,638,512 | $ 1,551,336 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 1,638,512 | $ 1,551,336 |
Equity securities | 51,217 | 169,106 |
U.S. Treasury | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 66,873 | 14,675 |
U.S. government agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 91,898 | 84,406 |
General obligations | Midwest | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 56,881 | 61,113 |
General obligations | Northeast | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 10,999 | 15,463 |
General obligations | South | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 53,134 | 63,981 |
General obligations | West | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 75,326 | 86,545 |
Special revenue | Midwest | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 96,878 | 102,266 |
Special revenue | Northeast | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 50,552 | 54,220 |
Special revenue | South | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 159,500 | 180,857 |
Special revenue | West | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 100,516 | 112,212 |
Foreign bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 18,336 | 31,649 |
Public utilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 127,417 | 125,411 |
Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 21,007 | 17,700 |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 3,894 | 4,253 |
Government national mortgage association | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 146,670 | 84,548 |
Federal home loan mortgage corporation | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 71,849 | 78,838 |
Federal national mortgage association | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 45,887 | 45,386 |
Energy | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 41,600 | 33,209 |
Industrials | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 65,968 | 52,842 |
Consumer goods and services | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 88,506 | 89,941 |
Health care | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 31,537 | 27,592 |
Technology, media and telecommunications | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 80,248 | 59,940 |
Financial services | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 133,036 | 124,289 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 1,638,638 | 1,551,339 |
Equity securities | 51,217 | 169,106 |
Short-Term Investments | 0 | 275 |
Money Market Accounts | 13,977 | 31,289 |
Corporate-Owned Life Insurance | 11,000 | 10,588 |
Total Assets Measured at Fair Value | 1,714,832 | 1,762,597 |
Recurring | U.S. Treasury | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 66,873 | 14,675 |
Recurring | U.S. government agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 91,898 | 84,406 |
Recurring | General obligations | Midwest | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 56,881 | 61,113 |
Recurring | General obligations | Northeast | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 10,999 | 15,463 |
Recurring | General obligations | South | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 53,134 | 63,981 |
Recurring | General obligations | West | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 75,326 | 86,545 |
Recurring | Special revenue | Midwest | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 96,878 | 102,266 |
Recurring | Special revenue | Northeast | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 50,552 | 54,220 |
Recurring | Special revenue | South | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 159,500 | 180,857 |
Recurring | Special revenue | West | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 100,516 | 112,212 |
Recurring | Foreign bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 18,336 | 31,649 |
Recurring | Public utilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 127,417 | 125,411 |
Recurring | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 21,007 | 17,700 |
Recurring | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 3,894 | 4,253 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Equity securities | 51,217 | 169,106 |
Short-Term Investments | 0 | 275 |
Money Market Accounts | 13,977 | 31,289 |
Corporate-Owned Life Insurance | 0 | 0 |
Total Assets Measured at Fair Value | 65,194 | 200,670 |
Recurring | Level 1 | U.S. Treasury | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 1 | U.S. government agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 1 | General obligations | Midwest | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 1 | General obligations | Northeast | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 1 | General obligations | South | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 1 | General obligations | West | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 1 | Special revenue | Midwest | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 1 | Special revenue | Northeast | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 1 | Special revenue | South | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 1 | Special revenue | West | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 1 | Foreign bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 1 | Public utilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 1 | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 1 | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 1,633,139 | 1,544,863 |
Equity securities | 0 | 0 |
Short-Term Investments | 0 | 0 |
Money Market Accounts | 0 | 0 |
Corporate-Owned Life Insurance | 11,000 | 10,588 |
Total Assets Measured at Fair Value | 1,644,139 | 1,555,451 |
Recurring | Level 2 | U.S. Treasury | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 66,873 | 14,675 |
Recurring | Level 2 | U.S. government agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 91,898 | 84,406 |
Recurring | Level 2 | General obligations | Midwest | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 56,881 | 61,113 |
Recurring | Level 2 | General obligations | Northeast | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 10,999 | 15,463 |
Recurring | Level 2 | General obligations | South | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 53,134 | 63,981 |
Recurring | Level 2 | General obligations | West | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 75,326 | 86,545 |
Recurring | Level 2 | Special revenue | Midwest | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 96,878 | 102,266 |
Recurring | Level 2 | Special revenue | Northeast | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 50,552 | 54,220 |
Recurring | Level 2 | Special revenue | South | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 159,500 | 180,857 |
Recurring | Level 2 | Special revenue | West | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 100,516 | 112,212 |
Recurring | Level 2 | Foreign bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 18,336 | 31,649 |
Recurring | Level 2 | Public utilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 127,417 | 125,411 |
Recurring | Level 2 | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 21,007 | 17,700 |
Recurring | Level 2 | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 3,095 | 3,452 |
Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 5,499 | 6,476 |
Equity securities | 0 | 0 |
Short-Term Investments | 0 | 0 |
Money Market Accounts | 0 | 0 |
Corporate-Owned Life Insurance | 0 | 0 |
Total Assets Measured at Fair Value | 5,499 | 6,476 |
Recurring | Level 3 | U.S. Treasury | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 3 | U.S. government agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 3 | General obligations | Midwest | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 3 | General obligations | Northeast | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 3 | General obligations | South | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 3 | General obligations | West | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 3 | Special revenue | Midwest | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 3 | Special revenue | Northeast | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 3 | Special revenue | South | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 3 | Special revenue | West | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 3 | Foreign bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 3 | Public utilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 3 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 4,700 | |
Recurring | Level 3 | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Level 3 | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 799 | 801 |
Recurring | Government national mortgage association | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 146,670 | 84,548 |
Recurring | Government national mortgage association | Level 1 | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Government national mortgage association | Level 2 | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 146,670 | 84,548 |
Recurring | Government national mortgage association | Level 3 | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Federal home loan mortgage corporation | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 71,849 | 78,838 |
Recurring | Federal home loan mortgage corporation | Level 1 | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Federal home loan mortgage corporation | Level 2 | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 71,849 | 78,838 |
Recurring | Federal home loan mortgage corporation | Level 3 | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Federal national mortgage association | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 45,887 | 45,386 |
Recurring | Federal national mortgage association | Level 1 | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Federal national mortgage association | Level 2 | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 45,887 | 45,386 |
Recurring | Federal national mortgage association | Level 3 | Collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Public utilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 3,703 | 14,846 |
Recurring | Public utilities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 3,703 | 14,846 |
Recurring | Public utilities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Recurring | Public utilities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Recurring | Energy | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 9,536 | 19,743 |
Recurring | Energy | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 41,600 | 33,209 |
Recurring | Energy | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 9,536 | 19,743 |
Recurring | Energy | Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Energy | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Recurring | Energy | Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 41,600 | 33,209 |
Recurring | Energy | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Recurring | Energy | Level 3 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Industrials | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 13,023 | 27,163 |
Recurring | Industrials | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 65,968 | 52,842 |
Recurring | Industrials | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 13,023 | 27,163 |
Recurring | Industrials | Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Industrials | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Recurring | Industrials | Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 65,968 | 52,842 |
Recurring | Industrials | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Recurring | Industrials | Level 3 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Consumer goods and services | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 11,127 | 43,139 |
Recurring | Consumer goods and services | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 88,506 | 89,941 |
Recurring | Consumer goods and services | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 11,127 | 43,139 |
Recurring | Consumer goods and services | Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Consumer goods and services | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Recurring | Consumer goods and services | Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 88,506 | 89,941 |
Recurring | Consumer goods and services | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Recurring | Consumer goods and services | Level 3 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Health care | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 1,959 | 7,981 |
Recurring | Health care | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 31,537 | 27,592 |
Recurring | Health care | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 1,959 | 7,981 |
Recurring | Health care | Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Health care | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Recurring | Health care | Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 31,537 | 27,592 |
Recurring | Health care | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Recurring | Health care | Level 3 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Technology, media and telecommunications | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 5,612 | 28,213 |
Recurring | Technology, media and telecommunications | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 80,248 | 59,940 |
Recurring | Technology, media and telecommunications | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 5,612 | 28,213 |
Recurring | Technology, media and telecommunications | Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Technology, media and telecommunications | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Recurring | Technology, media and telecommunications | Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 80,248 | 59,940 |
Recurring | Technology, media and telecommunications | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Recurring | Technology, media and telecommunications | Level 3 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Financial services | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 6,257 | 28,021 |
Recurring | Financial services | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 133,162 | 124,292 |
Recurring | Financial services | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 6,257 | 28,021 |
Recurring | Financial services | Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Recurring | Financial services | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Recurring | Financial services | Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 128,462 | 118,617 |
Recurring | Financial services | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Recurring | Financial services | Level 3 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 4,700 | $ 5,675 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Quantitative Information About Level 3 Fair Value Measurements (Details) $ in Thousands | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Available-for-sale securities | $ 1,638,512 | $ 1,551,336 |
Asset-backed securities | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Available-for-sale securities | 3,894 | 4,253 |
Recurring | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Available-for-sale securities | 1,638,638 | 1,551,339 |
Recurring | Asset-backed securities | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Available-for-sale securities | 3,894 | 4,253 |
Recurring | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Available-for-sale securities | 5,499 | 6,476 |
Recurring | Level 3 | Corporate bonds | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Available-for-sale securities | $ 4,700 | |
Recurring | Level 3 | Corporate bonds | Third-party Valuation | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Available-for-sale securities, range of weighted average significant unobservable inputs | 0.900 | |
Recurring | Level 3 | Corporate bonds | Third-party Valuation | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Available-for-sale securities, range of weighted average significant unobservable inputs | 1 | |
Recurring | Level 3 | Asset-backed securities | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Available-for-sale securities | $ 799 | $ 801 |
Recurring | Level 3 | Asset-backed securities | Discounted cash flow | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Available-for-sale securities, range of weighted average significant unobservable inputs | 0.04 | |
Recurring | Level 3 | Asset-backed securities | Discounted cash flow | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Available-for-sale securities, range of weighted average significant unobservable inputs | 0.06 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Level 3 Securities (Details) - Recurring - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 5,602 | $ 6,476 |
Net unrealized gains (losses) | (103) | (977) |
Ending Balance | 5,499 | 5,499 |
Corporate bonds | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 4,765 | 5,675 |
Net unrealized gains (losses) | (65) | (975) |
Ending Balance | 4,700 | 4,700 |
Asset-backed securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 837 | 801 |
Net unrealized gains (losses) | (38) | (2) |
Ending Balance | $ 799 | $ 799 |
Fair Value of Financial Instr_8
Fair Value of Financial Instruments - Carrying Value of Commercial Mortgage Loans and Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | $ 45,589 | $ 37,947 | |
Allowance for mortgage loan losses | (55) | (49) | |
Mortgage loans, net | 45,534 | 37,898 | |
Total mortgage loans | Mortgage Loans by Region | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Mortgage loans, net | $ 45,589 | $ 37,947 | |
Percent of Total | 100% | 100% | |
Total mortgage loans | Mortgage Loans by Region | East North Central | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Mortgage loans, net | $ 3,245 | $ 3,245 | |
Percent of Total | 7.10% | 8.60% | |
Total mortgage loans | Mortgage Loans by Region | Southern Atlantic | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Mortgage loans, net | $ 17,265 | $ 9,397 | |
Percent of Total | 37.80% | 24.70% | |
Total mortgage loans | Mortgage Loans by Region | East South Central | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Mortgage loans, net | $ 7,591 | $ 7,783 | |
Percent of Total | 16.70% | 20.50% | |
Total mortgage loans | Mortgage Loans by Region | New England | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Mortgage loans, net | $ 6,588 | $ 6,588 | |
Percent of Total | 14.50% | 17.40% | |
Total mortgage loans | Mortgage Loans by Region | Middle Atlantic | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Mortgage loans, net | $ 6,020 | $ 6,139 | |
Percent of Total | 13.20% | 16.20% | |
Total mortgage loans | Mortgage Loans by Region | Mountain | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Mortgage loans, net | $ 1,992 | $ 1,992 | |
Percent of Total | 4.40% | 5.20% | |
Total mortgage loans | Mortgage Loans by Region | West North Central | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Mortgage loans, net | $ 2,888 | $ 2,803 | |
Percent of Total | 6.30% | 7.40% | |
Total mortgage loans | Mortgage Loans by Property Type | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Mortgage loans, net | $ 45,589 | $ 37,947 | |
Percent of Total | 100% | 100% | |
Total mortgage loans | Mortgage Loans by Property Type | Multifamily | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Mortgage loans, net | $ 8,536 | 8,493 | |
Percent of Total | 22.40% | 18.70% | |
Total mortgage loans | Mortgage Loans by Property Type | Office | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Mortgage loans, net | $ 11,030 | 11,267 | |
Percent of Total | 29.70% | 24.30% | |
Total mortgage loans | Mortgage Loans by Property Type | Industrial | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Mortgage loans, net | $ 10,003 | 10,056 | |
Percent of Total | 26.50% | 21.90% | |
Total mortgage loans | Mortgage Loans by Property Type | Retail | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Mortgage loans, net | $ 10,000 | 1,992 | |
Percent of Total | 5.20% | 21.90% | |
Total mortgage loans | Mortgage Loans by Property Type | Mixed use/Other | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Mortgage loans, net | $ 6,020 | 6,139 | |
Percent of Total | 16.20% | 13.20% | |
Less than 65% | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | $ 36,883 | 29,231 | |
65%-75% | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | $ 8,706 | $ 8,716 |
Fair Value of Financial Instr_9
Fair Value of Financial Instruments - Amortized Cost Basis by Year of Origination and Credit Quality Indicator (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2023 | $ 8,136 | |
2022 | 100 | |
2020 | 5,292 | |
2019 | 7,897 | |
2018 | 24,164 | |
Total | 45,589 | $ 37,947 |
Current-period write-offs | 0 | |
Current-period recoveries | 0 | |
Current-period net write-offs | 0 | |
1-2 internal grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2023 | 8,136 | |
2022 | 100 | |
2020 | 5,292 | |
2019 | 7,897 | |
2018 | 17,576 | |
Total | 39,001 | |
3-4 internal grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2023 | 0 | |
2022 | 0 | |
2020 | 0 | |
2019 | 0 | |
2018 | 6,588 | |
Total | 6,588 | |
5 internal grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2023 | 0 | |
2022 | 0 | |
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
Total | 0 | |
6 internal grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2023 | 0 | |
2022 | 0 | |
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
Total | 0 | |
7 internal grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2023 | 0 | |
2022 | 0 | |
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
Total | $ 0 |
Fair Value of Financial Inst_10
Fair Value of Financial Instruments - Rollforward of Allowance for Mortgage Loan Losses (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Rollforward of allowance for mortgage loan losses: | |
Beginning balance, January 1, 2023 | $ 49 |
Current-period provision for expected credit losses | 6 |
Ending balance of the allowance for mortgage loan losses, September 30, 2023 | $ 55 |
Reserves for Losses and Loss _3
Reserves for Losses and Loss Settlement Expenses (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Gross liability for losses and loss settlement expenses at beginning of year | $ 1,497,274 | $ 1,514,265 |
Ceded losses and loss settlement expenses | (146,875) | (112,900) |
Net liability for losses and loss settlement expenses at beginning of year | 1,350,399 | 1,401,365 |
Losses and loss settlement expenses incurred for claims occurring during | ||
Current year | 538,941 | 624,411 |
Prior years | 59,184 | 12,890 |
Total incurred | 598,125 | 637,301 |
Losses and loss settlement expense payments for claims occurring during | ||
Current year | 131,408 | 215,891 |
Prior years | 371,723 | 472,377 |
Total paid | 503,131 | 688,268 |
Net liability for losses and loss settlement expenses at end of period | 1,445,394 | 1,350,399 |
Ceded losses and loss settlement expenses | 191,525 | 146,875 |
Gross liability for losses and loss settlement expenses at end of period | $ 1,636,918 | $ 1,497,274 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Pension Plan | |||||
Net periodic benefit cost | |||||
Service cost | $ 954,000 | $ 1,120,000 | $ 2,863,000 | $ 3,361,000 | |
Interest cost | 2,526,000 | 1,933,000 | 7,579,000 | 5,798,000 | |
Expected return on plan assets | (3,756,000) | (4,723,000) | (11,269,000) | (14,168,000) | |
Amortization of prior service credit | (820,000) | (820,000) | (2,460,000) | (2,460,000) | |
Amortization of net loss | 52,000 | 194,000 | 155,000 | 583,000 | |
Net periodic benefit cost | (1,044,000) | (2,296,000) | (3,131,000) | (6,887,000) | |
Postretirement Benefit Plan | |||||
Net periodic benefit cost | |||||
Service cost | 0 | 0 | 0 | 0 | |
Interest cost | 0 | 1,000 | 0 | 2,000 | |
Expected return on plan assets | 0 | 0 | 0 | 0 | |
Amortization of prior service credit | 0 | (3,771,000) | 0 | (11,314,000) | |
Amortization of net loss | 0 | 706,000 | 0 | 2,118,000 | |
Net periodic benefit cost | $ 0 | $ (3,064,000) | $ 0 | $ (9,194,000) | |
Benefit obligation | $ 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 177 Months Ended | |||||||
May 31, 2021 | May 31, 2014 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | May 20, 2020 | May 19, 2020 | Dec. 31, 2008 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock-based compensation expense | $ 949 | $ 828 | $ 3,124 | $ 2,590 | |||||||
Stock-based compensation expense to be recognized through results of operations | $ 6,542 | $ 6,542 | $ 6,542 | ||||||||
Employee Stock Award Plan-2008 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares available for issuance (in shares) | 1,108,419 | 1,108,419 | 1,108,419 | 1,342,119 | 1,900,000 | ||||||
Additional shares authorized (in shares) | 650,000 | 1,500,000 | 0 | 2,150,000 | |||||||
Employee Stock Award Plan-2008 | Options Awards | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Expiration period | 10 years | ||||||||||
Employee Stock Award Plan-2008 | Three years | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting rights percentage | 20% | ||||||||||
Employee Stock Award Plan-2008 | Three years | Restricted Stock Awards | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 3 years | ||||||||||
Employee Stock Award Plan-2008 | Five years | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting rights percentage | 33.30% | ||||||||||
Employee Stock Award Plan-2008 | Five years | Restricted Stock Awards | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 5 years | ||||||||||
Director Plan - 2005 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares available for issuance (in shares) | 103,600 | 103,600 | 103,600 | 123,397 | 450,000 | 300,000 | 300,000 | ||||
Additional shares authorized (in shares) | 0 | 150,000 |
Stock-Based Compensation - Acti
Stock-Based Compensation - Activity in the Stock Plan (Details) - shares | 1 Months Ended | 9 Months Ended | 177 Months Ended | |
May 31, 2021 | May 31, 2014 | Sep. 30, 2023 | Sep. 30, 2023 | |
Employee Stock Award Plan-2008 | ||||
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward] | ||||
Beginning balance (in shares) | 1,342,119 | 1,900,000 | ||
Additional shares authorized (in shares) | 650,000 | 1,500,000 | 0 | 2,150,000 |
Number of awards granted (in shares) | (305,241) | (3,927,382) | ||
Number of awards forfeited or expired (in shares) | 71,541 | 985,801 | ||
Ending balance (in shares) | 1,108,419 | 1,108,419 | ||
Employee Stock Award Plan-2008 | Options Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward] | ||||
Number of option awards exercised (in shares) | 4,000 | 1,537,336 | ||
Employee Stock Award Plan-2008 | Unrestricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward] | ||||
Number of awards granted (in shares) | 0 | (10,090) | ||
Employee Stock Award Plan-2008 | Restricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward] | ||||
Number of restricted stock awards vested (in shares) | 28,100 | 295,945 | ||
Director Plan - 2005 | ||||
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward] | ||||
Beginning balance (in shares) | 123,397 | 300,000 | ||
Additional shares authorized (in shares) | 0 | 150,000 | ||
Number of awards granted (in shares) | (31,380) | (386,618) | ||
Number of awards forfeited or expired (in shares) | 11,583 | 40,218 | ||
Ending balance (in shares) | 103,600 | 103,600 | ||
Director Plan - 2005 | Options Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward] | ||||
Number of option awards exercised (in shares) | 1,755 | 152,336 | ||
Director Plan - 2005 | Restricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward] | ||||
Number of restricted stock awards vested (in shares) | 0 | 117,001 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-based Compensation Expense (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Share-Based Payment Arrangement [Abstract] | |
2023 | $ 1,034 |
2024 | 3,364 |
2025 | 1,878 |
2026 | 266 |
2027 | 0 |
Total | $ 6,542 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Basic and Diluted Earnings per Share [Line Items] | ||||
Net income (loss) | $ 6,380 | $ (22,981) | $ (49,308) | $ (5,089) |
Weighted-average common shares outstanding, basic (in shares) | 25,263,523 | 25,188,958 | 25,244,502 | 25,146,318 |
Weighted-average common shares outstanding, diluted (in shares) | 25,579,334 | 25,188,958 | 25,244,502 | 25,146,318 |
Earnings (loss) per common share, basic (in dollars per share) | $ 0.25 | $ (0.91) | $ (1.95) | $ (0.20) |
Earnings (loss) per common share, diluted (in dollars per share) | $ 0.25 | $ (0.91) | $ (1.95) | $ (0.20) |
Awards excluded from diluted earnings per share calculation (in shares) | 837,482 | 392,062 | 814,636 | 479,981 |
Restricted Stock Unit Awards | ||||
Basic and Diluted Earnings per Share [Line Items] | ||||
Add dilutive effect of share-based awards outstanding (in shares) | 295,997 | 0 | 0 | 0 |
Stock Options | ||||
Basic and Diluted Earnings per Share [Line Items] | ||||
Add dilutive effect of share-based awards outstanding (in shares) | 19,814 | 0 | 0 | 0 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 15, 2023 | Dec. 15, 2020 | Mar. 31, 2020 | |
Line of Credit Facility [Line Items] | |||||||
Interest paid | $ 797,000 | $ 797,000 | $ 2,391,000 | $ 2,391,000 | |||
New Credit Agreement | |||||||
Line of Credit Facility [Line Items] | |||||||
Option to increase, maximum amount | $ 100,000,000 | ||||||
Outstanding balance on credit facility | $ 0 | $ 0 | 0 | 0 | |||
New Credit Agreement | Revolving Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Interest paid | $ 0 | $ 0 | |||||
Maximum borrowing capacity | 50,000,000 | ||||||
New Credit Agreement | Letter of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | 20,000,000 | ||||||
New Credit Agreement | Swing Line of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 5,000,000 | ||||||
Surplus Notes | |||||||
Line of Credit Facility [Line Items] | |||||||
Principal amount | $ 50,000,000 | ||||||
Surplus Notes | Forecast | |||||||
Line of Credit Facility [Line Items] | |||||||
Applicable Interest Rate | 6.875% | ||||||
Surplus Notes | Federated Mutual | |||||||
Line of Credit Facility [Line Items] | |||||||
Principal amount | 35,000,000 | ||||||
Surplus Notes | Federated Life | |||||||
Line of Credit Facility [Line Items] | |||||||
Principal amount | $ 15,000,000 |
Debt - Interest Payable (Detail
Debt - Interest Payable (Details) - Surplus Notes | Sep. 30, 2023 |
A+ | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Applicable Interest Rate | 5.875% |
A | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Applicable Interest Rate | 6.375% |
A- | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Applicable Interest Rate | 6.875% |
B++ (or lower) | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Applicable Interest Rate | 7.375% |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | $ 676,365 | $ 780,903 | $ 740,114 | $ 879,121 |
Change in accumulated other comprehensive income (loss) before reclassifications | (34,812) | (55,305) | (37,380) | (168,148) |
Reclassification adjustments from accumulated other comprehensive income (loss) | 102 | 1,563 | 731 | 3,301 |
Ending balance | 644,937 | 700,795 | 644,937 | 700,795 |
Net unrealized appreciation on investments | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (89,094) | (88,369) | ||
Change in accumulated other comprehensive income (loss) before reclassifications | (34,166) | (35,438) | ||
Reclassification adjustments from accumulated other comprehensive income (loss) | 62 | 609 | ||
Ending balance | (123,198) | (123,198) | ||
Liability for underfunded employee benefit costs | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (341) | 873 | ||
Change in accumulated other comprehensive income (loss) before reclassifications | (646) | (1,942) | ||
Reclassification adjustments from accumulated other comprehensive income (loss) | 40 | 122 | ||
Ending balance | (947) | (947) | ||
Total | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (89,435) | (56,768) | (87,496) | 54,337 |
Ending balance | $ (124,145) | $ (110,510) | $ (124,145) | $ (110,510) |
Leases - Narrative (Details)
Leases - Narrative (Details) | Sep. 30, 2023 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 1 year |
Lease extension option terms | 6 months |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 5 years |
Lease extension option terms | 5 years |
Leases - Components of Operatin
Leases - Components of Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Components of lease expense: | ||||
Operating lease expense | $ 2,255 | $ 2,201 | $ 6,653 | $ 6,569 |
Less sublease income | 305 | 53 | 732 | 160 |
Net lease expense | 1,950 | 2,148 | 5,921 | 6,409 |
Cash flows information related to leases: | ||||
Operating cash outflow from operating leases | $ 1,952 | $ 2,170 | $ 5,996 | $ 6,471 |