Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 10, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Entity Registrant Name | Conifer Holdings, Inc. | |
Entity Central Index Key | 0001502292 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,215,849 | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | CNFR | |
Security Exchange Name | NASDAQ | |
Entity File Number | 001-37536 | |
Entity Incorporation, State or Country Code | MI | |
Entity Tax Identification Number | 27-1298795 | |
Entity Address, Address Line One | 3001 West Big Beaver Road | |
Entity Address, Address Line Two | Suite 200 | |
Entity Address, City or Town | Troy | |
Entity Address, State or Province | MI | |
Entity Address, Postal Zip Code | 48084 | |
City Area Code | 248 | |
Local Phone Number | 559-0840 | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Investment securities: | ||
Debt securities, at fair value (amortized cost of $125,274 and $127,119, respectively) | $ 110,633 | $ 110,201 |
Equity securities, at fair value (cost of $2,369 and $1,905, respectively) | 2,425 | 1,267 |
Short-term investments, at fair value | 28,055 | 25,929 |
Total investments | 141,113 | 137,397 |
Cash and cash equivalents | 21,549 | 28,035 |
Premiums and agents' balances receivable, net | 21,713 | 21,802 |
Receivable from Affiliate | 1,245 | 1,261 |
Reinsurance recoverables on unpaid losses | 61,101 | 82,651 |
Reinsurance recoverables on paid losses | 9,023 | 6,653 |
Prepaid reinsurance premiums | 21,929 | 16,399 |
Deferred policy acquisition costs | 8,326 | 10,290 |
Other assets | 7,172 | 7,862 |
Total assets | 293,171 | 312,350 |
Liabilities: | ||
Unpaid losses and loss adjustment expenses | 145,362 | 165,539 |
Unearned premiums | 69,807 | 67,887 |
Reinsurance premiums payable | 7,463 | 6,144 |
Debt | 33,954 | 33,876 |
Accounts payable and accrued expenses | 14,293 | 19,954 |
Total liabilities | 270,879 | 293,400 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Common stock, no par value (100,000,000 shares authorized; 12,215,849 issued and outstanding, respectively) | 97,968 | 97,913 |
Accumulated deficit | (59,759) | (60,760) |
Accumulated other comprehensive income (loss) | (15,917) | (18,203) |
Total shareholders' equity | 22,292 | 18,950 |
Total liabilities and shareholders' equity | $ 293,171 | $ 312,350 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Statement Of Financial Position [Abstract] | ||
Debt securities, amortized cost | $ 125,274 | $ 127,119 |
Equity securities, amortized cost | $ 2,369 | $ 1,905 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 12,215,849 | 12,215,849 |
Common stock, shares outstanding (in shares) | 12,215,849 | 12,215,849 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Revenue and Other Income | |||
Gross earned premiums | $ 34,294 | $ 32,764 | |
Ceded earned premiums | (12,342) | (8,809) | |
Net earned premiums | 21,952 | 23,955 | |
Net investment income | 1,307 | 507 | |
Net realized investment gains (losses) | 0 | (69) | |
Change in fair value of equity securities | 694 | 280 | |
Other gains (losses) | 0 | (5) | |
Other income | 626 | 698 | |
Total revenue and other income | 24,579 | 25,366 | |
Expenses | |||
Losses and loss adjustment expenses, net | 13,713 | 18,018 | |
Policy acquisition costs | 4,721 | 5,464 | |
Operating expenses | 4,279 | 4,160 | |
Interest expense | 686 | 711 | |
Total expenses | 23,399 | 28,353 | |
Income (loss) before equity earnings in Affiliate and income taxes | 1,180 | (2,987) | |
Equity earnings (loss) in Affiliate, net of tax | (179) | 76 | |
Income tax expense (benefit) | 0 | (41) | |
Net income (loss) | $ 1,001 | $ (2,870) | |
Earnings (loss) per common share, basic | $ 0.08 | $ (0.30) | |
Earnings (loss) per common share, diluted | $ 0.08 | $ (0.30) | |
Weighted average common shares outstanding, basic | [1] | 12,215,849 | 9,707,817 |
Weighted average common shares outstanding, diluted | [1] | 12,215,849 | 9,707,817 |
[1] The non-vested shares of the restricted stock units and stock options were anti-dilutive as of March 31, 2023 and 2022. Therefore, the basic and diluted weighted average common shares are equal for the three months ended March 31, 2023 and 2022. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income (loss) | $ 1,001 | $ (2,870) |
Unrealized investment gains (losses): | ||
Unrealized investment gains (losses) during the period | 2,286 | (7,287) |
Income tax (benefit) expense | 0 | 0 |
Unrealized investment gains (losses), net of tax | 2,286 | (7,287) |
Less: reclassification adjustments to: | ||
Net realized investment gains (losses) included in net income (loss) | 0 | 0 |
Income tax (benefit) expense | 0 | 0 |
Total reclassifications included in net income (loss), net of tax | 0 | 0 |
Net other comprehensive income (loss) | 2,286 | (7,287) |
Total comprehensive income (loss) | $ 3,287 | $ (10,157) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | No Par, Common Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Balance at beginning of period at Dec. 31, 2021 | $ 40,503 | $ 92,692 | $ (50,079) | $ (2,110) |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 9,707,817 | |||
Net income (loss) | (2,870) | (2,870) | ||
Stock-based compensation expense | 38 | $ 38 | ||
Other comprehensive income (loss) | (7,287) | (7,287) | ||
Balance at end of period at Mar. 31, 2022 | 30,384 | $ 92,730 | (52,949) | (9,397) |
Balance at ending of period (in shares) at Mar. 31, 2022 | 9,707,817 | |||
Balance at beginning of period at Dec. 31, 2022 | 18,950 | $ 97,913 | (60,760) | (18,203) |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 12,215,849 | |||
Net income (loss) | 1,001 | 1,001 | ||
Stock-based compensation expense | 55 | $ 55 | ||
Other comprehensive income (loss) | 2,286 | 2,286 | ||
Balance at end of period at Mar. 31, 2023 | $ 22,292 | $ 97,968 | $ (59,759) | $ (15,917) |
Balance at ending of period (in shares) at Mar. 31, 2023 | 12,215,849 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash Flows From Operating Activities | ||
Net income (loss) | $ 1,001 | $ (2,870) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 98 | 102 |
Amortization of bond premium and discount, net | (97) | 116 |
Net realized investment (gains) losses | 69 | |
Change in fair value of equity securities | (694) | (280) |
Stock-based compensation expenses | 55 | 38 |
Equity loss (earnings) in Affiliate, net of tax | 179 | (76) |
(Increase) decrease in: | ||
Premiums and agents' balances and other receivables | (91) | 442 |
Reinsurance recoverables | 19,180 | (1,201) |
Prepaid reinsurance premiums | (5,530) | (6,133) |
Deferred policy acquisition costs | 1,964 | 2,143 |
Other assets | (418) | (719) |
Increase (decrease) in: | ||
Unpaid losses and loss adjustment expenses | (20,177) | 1,853 |
Unearned premiums | 1,920 | 199 |
Reinsurance premiums payable | (1,456) | (1,976) |
Accounts payable and other liabilities | (1,952) | (234) |
Net cash provided by (used in) operating activities | (6,018) | (8,527) |
Cash Flows From Investing Activities | ||
Purchase of investments | (60,052) | (68,116) |
Proceeds from maturities and redemptions of investments | 2,105 | 6,609 |
Proceeds from sales of investments | 58,413 | 62,958 |
Contribution to SSU | 934 | |
Net cash provided by (used in) investing activities | (468) | 1,451 |
Cash Flows From Financing Activities | ||
Borrowings under line of credit | 5,000 | |
Net cash provided by (used in) financing activities | 5,000 | |
Net increase (decrease) in cash | (6,486) | (2,076) |
Cash at beginning of period | 28,035 | 9,913 |
Cash at end of period | 21,549 | 7,837 |
Supplemental Disclosure of Cash Flow Information: | ||
Interest paid | $ 686 | 699 |
Income taxes paid (refunded), net | $ (12) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Basis of Presentation and Management Representation The consolidated financial statements include accounts, after elimination of intercompany accounts and transactions, of Conifer Holdings, Inc. (the “Company” or “Conifer”), its wholly owned subsidiaries, Conifer Insurance Company ("CIC"), White Pine Insurance Company ("WPIC"), Red Cedar Insurance Company ("RCIC"), Sycamore Insurance Agency, Inc. ("Sycamore"), and VSRM, Inc. ("VSRM"). CIC, WPIC, and RCIC are collectively referred to as the "Insurance Company Subsidiaries." On a stand-alone basis, Conifer Holdings, Inc. is referred to as the "Parent Company." VSRM owns a 50 % non-controlling interest in Sycamore Specialty Underwriters, LLC ("SSU" or "Affiliate"). The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which differ from statutory accounting practices prescribed or permitted for insurance companies by regulatory authorities. The Company has applied the rules and regulations of the United States Securities and Exchange Commission (“SEC”) regarding interim financial reporting and therefore the consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments, consisting of items of a normal recurring nature, necessary for a fair presentation of the consolidated interim financial statements, have been included. These consolidated financial statements and the notes thereto should be read in conjunction with the Company's audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC. The results of operations for the three months ended March 31, 2023, are not necessarily indicative of the results expected for the year ended December 31, 2023 . Business The Company is engaged in the sale of property and casualty insurance products and has organized its principal operations into three types of insurance businesses: commercial lines, personal lines, and agency business. The Company underwrites a variety of specialty insurance products, including property, general liability, liquor liability, automobile, and homeowners and dwelling policies. The Company markets and sells its insurance products through a network of independent agents, including managing general agents, whereby policies are written in all 50 states in the United States of America (“U.S.”). The Company’s corporate headquarters are located in Troy, Michigan with additional office facilities in Florida and Michigan. 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. While management believes the amounts included in the consolidated financial statements reflect management's best estimates and assumptions, actual results may differ from these estimates. Cash, Cash Equivalents, and Short-term Investments Cash consists of cash deposits in banks, generally in operating accounts. Cash equivalents consist of money-market funds that are specifically used as overnight investments tied to cash deposit accounts. Short-term investments, consisting of money market funds, are classified as investments in the consolidated balance sheets as they relate to the Company’s investment activities. Recently Adopted Accounting Pronouncements Effective January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , as amended, which introduces a new process for recognizing credit losses on financial instruments based on expected credit losses. This new standard replaces the incurred loss methodology and the concept of Other-than-Temporary Impairment (or “OTTI”) with an expected credit loss methodology that is sometimes referred to as the Current Expected Credit Loss (CECL) methodology. The guidance applies to Conifer's reinsurance recoverables, premium receivable, and debt securities. Results for reporting periods beginning after January 1, 2023 are presented under ASC 326, while prior period amounts continue to be reported in accordance with previously applicable U.S. GAAP. The adoption of ASC 326 did not have any impact on the Company's financial statements. Among other updates which management deems to have no material impact, ASC 326 made changes to the accounting for available-for-sale debt securities. At each quarter-end, for available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2023 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | 2. Investments Results for reporting periods occurring before January 1, 2023 continue to be reported in accordance with previously applicable U.S. GAAP and note presented under ASC 326, which was adopted by the Company on January 1, 2023. The Company analyzed its investment portfolio in accordance with its credit loss review policy and determined it did not need to record a credit loss for the three months ended March 31, 2023 and 2022 . The Company holds only investment grade securities from high credit quality issuers. The gross unrealized losses of $ 14.6 million as of March 31, 2023, from the Company's available-for-sale securities are due to market conditions and interest rate changes. The cost or amortized cost, gross unrealized gains or losses, and estimated fair value of the investments in securities classified as available for sale at March 31, 2023 and December 31, 2022 were as follows (dollars in thousands): March 31, 2023 Cost or Gross Unrealized Estimated Amortized Cost Gains Losses Fair Value Debt Securities: U.S. Government $ 7,220 $ — $ ( 249 ) $ 6,971 State and local government 26,063 1 ( 3,866 ) 22,198 Corporate debt 35,070 — ( 4,139 ) 30,931 Asset-backed securities 21,150 — ( 1,045 ) 20,105 Mortgage-backed securities 28,524 — ( 4,739 ) 23,785 Commercial mortgage-backed securities 3,413 — ( 125 ) 3,288 Collateralized mortgage obligations 3,834 — ( 479 ) 3,355 Total debt securities available for sale $ 125,274 $ 1 $ ( 14,642 ) $ 110,633 December 31, 2022 Cost or Gross Unrealized Estimated Amortized Cost Gains Losses Fair Value Debt Securities: U.S. Government $ 7,833 $ — $ ( 335 ) $ 7,498 State and local government 25,487 1 ( 4,672 ) 20,816 Corporate debt 35,347 — ( 4,788 ) 30,559 Asset-backed securities 21,742 — ( 1,246 ) 20,496 Mortgage-backed securities 29,194 — ( 5,157 ) 24,037 Commercial mortgage-backed securities 3,414 — ( 186 ) 3,228 Collateralized mortgage obligations 4,102 — ( 535 ) 3,567 Total debt securities available for sale $ 127,119 $ 1 $ ( 16,919 ) $ 110,201 The following table summarizes the aggregate fair value and gross unrealized losses, by security type, of the available-for-sale securities in unrealized loss positions. The table segregates the holdings based on the length of time that individual securities have been in a continuous unrealized loss position (dollars in thousands): March 31, 2023 Less than 12 months Greater than 12 months Total No. of Fair Value of Gross No. of Fair Value of Gross No. of Fair Value of Gross Debt Securities: U.S. Government 2 $ 900 $ ( 6 ) 10 $ 6,071 $ ( 243 ) 12 $ 6,971 $ ( 249 ) State and local government 13 3,229 ( 80 ) 110 18,267 ( 3,786 ) 123 21,496 ( 3,866 ) Corporate debt 4 1,509 ( 41 ) 64 29,422 ( 4,098 ) 68 30,931 ( 4,139 ) Asset-backed securities 3 1,085 ( 28 ) 22 19,020 ( 1,017 ) 25 20,105 ( 1,045 ) Mortgage-backed securities 33 279 ( 12 ) 35 23,499 ( 4,727 ) 68 23,778 ( 4,739 ) Commercial mortgage-backed securities 1 209 ( 20 ) 3 3,056 ( 105 ) 4 3,265 ( 125 ) Collateralized mortgage obligations 11 166 ( 6 ) 23 3,212 ( 473 ) 34 3,378 ( 479 ) Total debt securities available for sale 67 $ 7,377 $ ( 193 ) 267 $ 102,547 $ ( 14,449 ) 334 $ 109,924 $ ( 14,642 ) December 31, 2022 Less than 12 months Greater than 12 months Total No. of Fair Value of Gross No. of Fair Value of Gross No. of Fair Value of Gross Debt Securities: U.S. Government 8 $ 3,534 $ ( 135 ) 5 $ 3,964 $ ( 200 ) 13 $ 7,498 $ ( 335 ) State and local government 77 12,966 ( 2,318 ) 45 7,147 ( 2,354 ) 122 20,113 ( 4,672 ) Corporate debt 27 10,069 ( 1,373 ) 42 20,890 ( 3,415 ) 69 30,959 ( 4,788 ) Asset-backed securities 6 3,188 ( 76 ) 20 17,308 ( 1,170 ) 26 20,496 ( 1,246 ) Mortgage-backed securities 57 4,006 ( 573 ) 12 20,031 ( 4,584 ) 69 24,037 ( 5,157 ) Commercial mortgage-backed securities 4 3,205 ( 186 ) — — — 4 3,205 ( 186 ) Collateralized mortgage obligations 26 1,789 ( 196 ) 9 1,802 ( 339 ) 35 3,591 ( 535 ) Total debt securities available for sale 205 $ 38,757 $ ( 4,857 ) 133 $ 71,142 $ ( 12,062 ) 338 $ 109,899 $ ( 16,919 ) The Company’s sources of net investment income and losses are as follows (dollars in thousands): Three Months Ended 2023 2022 Debt securities $ 853 $ 582 Equity securities 11 28 Cash, cash equivalents and short-term investments 503 1 Total investment income 1,367 611 Investment expenses ( 60 ) ( 104 ) Net investment income $ 1,307 $ 507 The following table summarizes the gross realized gains and losses from sales, calls and maturities of available-for-sale debt and equity securities (dollars in thousands): Three Months Ended 2023 2022 Debt securities: Gross realized gains $ — $ — Gross realized losses — — Total debt securities — — Equity securities: Gross realized gains $ — 19 Gross realized losses — ( 88 ) Total equity securities — ( 69 ) Total net realized investment gains (losses) $ — $ ( 69 ) Proceeds from available-for-sale debt securities were $ 23.6 million and $ 6.7 million for the three months ended March 31, 2023 and 2022, respectively. There were no gross realized gains or losses from the sale of available-for-sale debt securities for the three months ended March 31, 2023 and 2022. As of March 31, 2023 and 2022, there were $ 0 and $ 750,000 of payables from securities purchased, respectively. There were $ 0 and $ 1.3 million of receivables from securities sold as of March 31, 2023, and 2022, respectively. The Company's gross unrealized gains related to its equity investments were $ 523,000 and $ 0 as of March 31, 2023 and December 31, 2022, respectively. The Company’s gross unrealized losses related to its equity investments were $ 467,000 and $ 638,000 as of March 31, 2023 and December 31, 2022, respectively. The Company also carries other equity investments that do not have a readily determinable fair value at cost, less impairment or observable changes in price. We review these investments for impairment during each reporting period. There were no impairments or observable changes in price recorded during 2023 related to the Company's equity securities without readily determinable fair value. These investments are included in Other Assets in the Consolidated Balance Sheets and amounted to $ 1.4 million as of March 31, 2023 and $ 1.8 million as of December 31, 2022. The table below summarizes the amortized cost and fair value of available-for-sale debt securities by contractual maturity at March 31, 2023. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties (dollars in thousands): Amortized Estimated Due in one year or less $ 4,668 $ 4,592 Due after one year through five years 28,614 26,543 Due after five years through ten years 23,810 20,267 Due after ten years 11,261 8,698 Securities with contractual maturities 68,353 60,100 Asset-backed securities 21,150 20,105 Mortgage-backed securities 28,524 23,785 Commercial mortgage-backed securities 3,413 3,288 Collateralized mortgage obligations 3,834 3,355 Total debt securities $ 125,274 $ 110,633 At March 31, 2023 and December 31, 2022 , the Insurance Company Subsidiaries had $ 8.1 million and $ 8.0 million, respectively, on deposit in trust accounts to meet the deposit requirements of various state insurance departments. At March 31, 2023 and December 31, 2022 , the Company had $ 98.1 million and $ 95.7 million, respectively, held in trust accounts to meet collateral requirements with other third-party insurers, relating to various fronting arrangements. There are withdrawal and other restrictions on these deposits, including the type of investments that may be held, however, the Company may generally invest in high-grade bonds and short-term investments and earn interest on the funds. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements The Company’s financial instruments include assets carried at fair value, as well as debt carried at face value, net of unamortized debt issuance costs, and are disclosed at fair value in this note. All fair values disclosed in this note are determined on a recurring basis other than the debt which is a non-recurring fair value measure. Fair value is defined as the price that would be received for an asset or paid to transfer a liability in the principal most advantageous market for the asset or liability in an orderly transaction between market participants. In determining fair value, the Company applies the market approach, which uses prices and other relevant data based on market transactions involving identical or comparable assets and liabilities. The inputs to valuation techniques used to measure fair value are prioritized into a three-level hierarchy. The hierarchy gives the highest priority to quoted prices from sources independent of the reporting entity (“observable inputs”) and the lowest priority to prices determined by the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (“unobservable inputs”). The fair value hierarchy is as follows: Level 1 - Valuations that are based on quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 - Valuations that are based on observable inputs (other than Level 1 prices) such as quoted prices for similar Level 3 - Unobservable inputs that are supported by little or no market activity. The unobservable inputs represent the Net Asset Value (NAV) - The fair values of investment company limited partnership investments and mutual funds are The following tables present the Company’s assets and liabilities measured at fair value, classified by the valuation hierarchy as of March 31, 2023 and December 31, 2022 (dollars in thousands): March 31, 2023 Fair Value Measurements Total Level 1 Level 2 Level 3 Assets: Debt Securities: U.S. Government $ 6,971 $ — $ 6,971 $ — State and local government 22,198 — 22,198 — Corporate debt 30,931 — 30,931 — Asset-backed securities 20,105 — 20,105 — Mortgage-backed securities 23,785 — 23,785 — Commercial mortgage-backed securities 3,288 — 3,288 — Collateralized mortgage obligations 3,355 — 3,355 — Total debt securities 110,633 — 110,633 — Equity Securities 965 208 757 — Short-term investments 28,055 28,055 — — Total marketable investments measured at fair value $ 139,653 $ 28,263 $ 111,390 $ — Investments measured at NAV: Investment in limited partnership 1,460 Total assets measured at fair value $ 141,113 Liabilities: Senior Unsecured Notes * $ 22,567 $ — $ 22,567 $ — Subordinated Notes * 11,685 — — 11,685 Total Liabilities (non-recurring fair value measure) $ 34,252 $ — $ 22,567 $ 11,685 * Carried at face value of debt net of unamortized debt issuance costs on the consolidated balance sheets December 31, 2022 Fair Value Measurements Total Level 1 Level 2 Level 3 Assets: Debt Securities: U.S. Government $ 7,498 $ — $ 7,498 $ — State and local government 20,816 — 20,816 — Corporate debt 30,559 — 30,559 — Asset-backed securities 20,496 — 20,496 — Mortgage-backed securities 24,037 — 24,037 — Commercial mortgage-backed securities 3,228 — 3,228 — Collateralized mortgage obligations 3,567 — 3,567 — Total debt securities 110,201 — 110,201 — Equity securities 917 160 757 — Short-term investments 25,929 25,929 — — Total marketable investments measured at fair value $ 137,047 $ 26,089 $ 110,958 $ — Investments measured at NAV: Investment in limited partnership 350 Total assets measured at fair value $ 137,397 Liabilities: Senior Unsecured Notes * $ 22,430 $ — $ 22,430 $ — Subordinated Notes * 11,300 — — 11,300 Total Liabilities (non-recurring fair value measure) $ 33,730 $ — $ 22,430 $ 11,300 * Carried at face value of debt net of unamortized debt issuance costs on the consolidated balance sheets Level 1 investments consist of equity securities traded in an active exchange market. The Company uses unadjusted quoted prices for identical instruments to measure fair value. Level 1 also includes money market funds and other interest-bearing deposits at banks, which are reported as short-term investments. The fair value measurements that were based on Level 1 inputs comprise 20 % and 18 % of the fair value of the total marketable investments measured at fair value as of March 31, 2023 and December 31, 2022, respectively. Level 2 investments include debt securities and equity securities, which consist of U.S. government agency securities, state and local municipal bonds (including those held as restricted securities), corporate debt securities, mortgage-backed and asset-backed securities. The fair value of securities included in the Level 2 category were based on the market values obtained from a third-party pricing service that were evaluated using pricing models that vary by asset class and incorporate available trade, bid and other observable market information. The third-party pricing service monitors market indicators, as well as industry and economic events. The fair value measurements that were based on Level 2 inputs comprise 80 % and 82 % of the fair value of the total marketable investments measured at fair value as of March 31, 2023 and December 31, 2022, respectively. The Company obtains pricing for each security from independent pricing services, investment managers or consultants to assist in determining fair value for its Level 2 investments. To validate that these quoted prices are reasonable estimates of fair value, the Company performs various quantitative and qualitative procedures, such as (i) evaluation of the underlying methodologies, (ii) analysis of recent sales activity, (iii) analytical review of our fair values against current market prices and (iv) comparison of the pricing services’ fair value to other pricing services’ fair value for the same investment. No markets for the investments were determined to be inactive at period-ends. Based on these procedures, the Company did not adjust the prices or quotes provided from independent pricing services, investment managers or consultants. As of March 31, 2023 and December 31, 2022, the fair value of the subordinated debt reported at amortized cost was considered a Level 3 liability in the fair value hierarchy and is entirely comprised of the Company's Subordinated Notes. In determining the fair value of the Subordinated Notes outstanding at March 31, 2023 and December 31, 2021, the security attributes (issue date, maturity, coupon, calls, etc.) and market rates on September 24, 2018 (the date of the restated and amended agreement which was repriced at that time) were entered into a valuation model. A lognormal trinomial interest rate lattice was created within the model to compute the option adjusted spread (“OAS”) which is the amount, in basis points, of interest rate required to be paid under the debt agreement over the risk-free U.S. Treasury rates. The OAS was then entered back into the model along with the March 31, 2023 and December 31, 2022 U.S. Treasury rates, respectively. A new lattice was generated and the fair value was computed from the OAS. There were no changes in assumptions of credit risk from the issuance date. The Company's policy on recognizing transfers between hierarchies is applied at the end of each reporting period. There were no transfers in or out of Level 3 for the three months ended March 31, 2023, and 2022, respectively. |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Deferred Policy Acquisition Costs | 4. Deferred Policy Acquisition Costs The Company defers costs incurred which are incremental and directly related to the successful acquisition of new or renewal insurance business, net of corresponding amounts of ceded reinsurance commissions. Net deferred policy acquisition costs are amortized and charged to expense in proportion to premium earned over the estimated policy term. The Company anticipates that its deferred policy acquisition costs will be fully recoverable and there were no premium deficiencies for the three months ended March 31, 2023 and 2022 . The activity in deferred policy acquisition costs, net of reinsurance transactions, is as follows (dollars in thousands): Three Months Ended 2023 2022 Balance at beginning of period $ 10,290 $ 12,267 Deferred policy acquisition costs 2,757 3,321 Amortization of policy acquisition costs ( 4,721 ) ( 5,464 ) Net change ( 1,964 ) ( 2,143 ) Balance at end of period $ 8,326 $ 10,124 |
Unpaid Losses and Loss Adjustme
Unpaid Losses and Loss Adjustment Expenses | 3 Months Ended |
Mar. 31, 2023 | |
Insurance Loss Reserves [Abstract] | |
Unpaid Losses and Loss Adjustment Expenses | 5. Unpaid Losses and Loss Adjustment Expenses The Company establishes reserves for unpaid losses and loss adjustment expenses ("LAE") which represent the estimated ultimate cost of all losses incurred that were both reported and unreported (i.e., incurred but not yet reported losses; or “IBNR”) and LAE incurred that remain unpaid at the balance sheet date. The Company’s reserving process takes into account known facts and interpretations of circumstances and factors including the Company’s experience with similar cases, actual claims paid, historical trends involving claim payment patterns and pending levels of unpaid claims, loss management programs, product mix and contractual terms, changes in law and regulation, judicial decisions, and economic conditions. In the normal course of business, the Company may also supplement its claims processes by utilizing third-party adjusters, appraisers, engineers, inspectors, and other professionals and information sources to assess and settle catastrophe and non-catastrophe related claims. The effects of inflation are implicitly considered in the reserving process. Reserves are estimates of unpaid portions of losses that have occurred, including IBNR losses; therefore, the establishment of appropriate reserves is an inherently uncertain and complex process. The ultimate cost of losses may vary materially from recorded amounts, which are based on management’s best estimates. The highest degree of uncertainty is associated with reserves for losses incurred in the current reporting period as it contains the greatest proportion of losses that have not been reported or settled. The Company regularly updates its reserve estimates as new information becomes available and as events unfold that may affect the resolution of unsettled claims. Changes in reserve estimates, which may be material, are reported in the results of operations in the period such changes are determined to be needed and recorded. Management believes that the reserve for losses and LAE is appropriately established in the aggregate and adequate to cover the ultimate net cost of reported and unreported claims arising from losses which had occurred by the date of the consolidated financial statements based on available facts and in accordance with applicable laws and regulations. The table below provides the changes in the reserves for losses and LAE, net of reinsurance recoverables, for the periods indicated as follows (dollars in thousands): Three months ended 2023 2022 Gross reserves - beginning of period $ 165,539 $ 139,085 Less: reinsurance recoverables on unpaid losses ( 82,651 ) ( 40,344 ) Net reserves - beginning of period 82,888 98,741 Add: incurred losses and LAE, net of reinsurance: Current period 14,926 12,497 Prior period ( 1,213 ) 5,521 Total net incurred losses and LAE 13,713 18,018 Deduct: loss and LAE payments, net of reinsurance: Current period 1,987 2,512 Prior period 10,353 13,914 Total net loss and LAE payments 12,340 16,426 Net reserves - end of period 84,261 100,333 Plus: reinsurance recoverables on unpaid losses 61,101 40,605 Gross reserves - end of period $ 145,362 $ 140,938 Net losses and LAE were $ 13.7 million during the first quarter of 2023. The Company experienced favorable development of $ 1.2 million during the first quarter of 2023, of which $ 817,000 was related to the Company's commercial lines of business, and $ 396,000 was related to the personal lines of business. The majority of the favorable development occurred in the 2022 and 2021 accident years. For accident year 2022, the redundancy was due in part to less-than-expected commercial property loss emergence during the first quarter of 2023. For accident year 2021, the claim frequency of the quick service restaurant program was less than expected resulting in a reduction in the estimated ultimate loss. There was $ 1.8 million of adverse development relating to 2019 and prior accident years that was covered under the Loss Portfolio Transfer ("LPT"), resulting in no net development. As of March 31, 2023, the Company was $ 2.4 million into the $ 20.0 million adverse development cover provided by the LPT. Net losses and LAE were $ 18.0 million for the three months ended March 31, 2022. Adverse development contributed $ 5.5 million to the total incurred losses in the first quarter of 2022, of which $ 1.5 million was related to 2017 and prior accident years, $ 1.3 million was related to the 2018 accident year, $ 1.3 million was related to the 2019 accident year, and $ 1.5 million was related to the 2020 accident year. In the first quarter of 2022, $ 5.7 million of the adverse development came from the commercial lines of business, mostly from liability lines, while our personal lines of business had $ 219,000 favorable development. |
Reinsurance
Reinsurance | 3 Months Ended |
Mar. 31, 2023 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | 6. Reinsurance In the normal course of business, the Company participates in reinsurance agreements in order to limit losses that may arise from catastrophes or other individually severe events. The Company ceded primarily all specific commercial liability risks in excess of $ 400,000 in 2023, and $ 340,000 in 2022. The Company ceded specific commercial property risks in excess of $ 400,000 in 2023, and $ 300,000 in 2022. The Company ceded homeowners specific risks in excess of $ 300,000 in both 2023 and 2022. A "treaty" is a reinsurance agreement in which coverage is provided for a class of risks and does not require policy by policy underwriting of the reinsurer. "Facultative" reinsurance is where a reinsurer negotiates an individual reinsurance agreement for every policy it will reinsure on a policy by policy basis. A loss is covered under a reinsurance contract if the loss occurs within the effective dates of the agreement notwithstanding when the loss is reported. Reinsurance does not discharge the direct insurer from liability to its policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers and monitors the concentration of credit risk arising from similar geographic regions, activities, or economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. To date, the Company has not experienced any significant difficulties in collecting reinsurance recoverables. The Company assumes written premiums under a few fronting arrangements. The fronting arrangements are with unaffiliated insurers who write on behalf of the Company in markets that require a higher A.M. Best rating than the Company’s current rating, where the policies are written in a state where the Company is not licensed or for other strategic reasons. On November 1, 2022, the Company entered into a loss portfolio transfer (“LPT”) reinsurance agreement with Fleming Reinsurance Ltd (“Fleming Re”). Under the agreement, Fleming Re will cover an aggregate limit of $ 66.3 million of paid losses on $ 40.8 million of stated net reserves as of June 30, 2022, relating to accident years 2019 and prior. This covers substantially all of the commercial liability lines underwritten by the Company. Within the aggregate limit, there is a $ 5.5 million loss corridor in which the Company retains losses in excess of $ 40.8 million. Fleming Re is then responsible to cover paid losses in excess of $ 46.3 million up to $ 66.3 million. Accordingly, there is $ 20.0 million of adverse development cover for accident years 2019 and prior. Under the agreement, Fleming Re was compensated with $ 40.8 million for stated net reserves as of June 30, 2022, plus a one-time risk fee of $ 5.4 million. Recoverables due to the Company under this agreement are recorded as reinsurance recoverables. The agreement is between CIC and WPIC and Fleming Re. As of March 31, 2023, the Company has recorded losses through the $ 5.5 million corridor and $ 2.4 million into the $ 20.0 million layer. As of December 31, 2022, the Company recorded losses through the $ 5.5 million corridor and $ 644,000 into the $ 20.0 million layer. As of March 31, 2023, the Consolidated Balance Sheet included $ 3.0 million of reinsurance recoverables on paid losses related to the LPT, and $ 22.0 million of reinsurance recoverables on unpaid losses related to the LPT. As of December 31, 2022, the Consolidated Balance Sheet included $ 3.8 million of reinsurance recoverables on paid losses related to the LPT, and $ 25.9 million of reinsurance recoverables on unpaid losses related to the LPT. The following table presents the effects of reinsurance and assumption transactions on written premiums, earned premiums and losses and LAE (dollars in thousands): Three Months Ended 2023 2022 Written premiums: Direct $ 24,341 $ 24,796 Assumed 11,873 8,168 Ceded ( 17,872 ) ( 14,943 ) Net written premiums $ 18,342 $ 18,021 Earned premiums: Direct $ 23,315 $ 24,123 Assumed 10,979 8,641 Ceded ( 12,342 ) ( 8,809 ) Net earned premiums $ 21,952 $ 23,955 Losses and LAE: Direct $ 1,969 $ 13,066 Assumed 1,497 7,408 Ceded 10,247 ( 2,456 ) Net Losses and LAE $ 13,713 $ 18,018 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 7. Debt As of March 31, 2023 , the Company's debt is comprised of two instruments: $ 24.3 million of publicly traded senior unsecured notes (the "Notes") which were issued in 2018 and $ 10.5 million of privately placed subordinated notes (the "Subordinated Notes"). A summary of the Company's outstanding debt is as follows (dollars in thousands): March 31, December 31, Senior unsecured notes $ 24,251 $ 24,186 Subordinated notes 9,703 9,690 Total $ 33,954 $ 33,876 Senior unsecured notes The Company issued $ 25.3 million of public senior unsecured notes (the "Notes") in 2018. The Notes bear an interest rate of 6.75 % per annum, payable quarterly at the end of March, June, September and December and mature on September 30, 2023 . The Company may redeem the Notes, in whole or in part, at face value at any time after September 30, 2021. Management plans to issue new public debt or sell assets to provide sufficient cash flow to pay off the senior unsecured notes that are coming due within the next twelve months. Management believes it is probable that it will be able to issue new public debt and/or sell assets as necessary to repay the senior unsecured notes by September 30, 2023. The Company did no t repurchase any of the Notes for the three months ended March 31, 2023 and 2022. Subordinated notes The Company also has outstanding $ 10.5 million of Subordinated Notes maturing on September 30, 2038 . The Subordinated Notes bear an interest rate of 7.5 % per annum until September 30, 2023, and 12.5 % thereafter, and allow for four quarterly interest payment deferrals. Interest is payable quarterly at the end of March, June, September and December. Beginning September 30, 2021, the Company may redeem the Subordinated Notes, in whole or in part, for a call premium of $ 1.1 million. The call premium escalates each quarter to ultimately $ 1.75 million on September 30, 2023, then steps up to $ 3.05 million on December 31, 2023, and increases quarterly at a 12.5 % per annum rate thereafter. As of March 31, 2023 , the carrying value of the Notes and Subordinated Notes are offset by $ 130,000 and $ 797,000 of debt issuance costs, respectively. The debt issuance costs are being amortized through interest expense over the life of the loans. The Subordinated Notes contain various restrictive financial debt covenants that relate to the Company’s minimum tangible net worth, minimum fixed-charge coverage ratios, dividend paying capacity, reinsurance retentions, and risk-based capital ratios. As of March 31, 2023, the Company was in compliance with all of its financial covenants. Line of credit The Company maintained a $ 10.0 million line of credit with a national bank (the “Lender”) during 2022. The line of credit carried an interest rate at LIBOR plus 2.75 % per annum, payable monthly. The line of credit agreement matured on December 1, 2022, and was not renewed. |
Shareholder's Equity
Shareholder's Equity | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders Equity Note [Abstract] | |
Shareholder's Equity | 8. Shareholder’s Equity On August 10, 2022, the Company issued $ 5.0 million of equity through a private placement for 2,500,000 shares priced at $ 2.00 per share. The participants in the private placement consisted of members of the Company's Board of Directors. The Company used the proceeds for growth capital in the Company's specialty core business segments. As of March 31, 2023 and December 31, 2022, the Company had 12,215,849 issued and outstanding shares of common stock, respectively. Holders of common stock are entitled to one vote per share and to receive dividends only when and if declared by the board of directors. The holders have no preemptive, conversion or subscription rights. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 9. Accumulated Other Comprehensive Income (Loss) The following table presents changes in accumulated other comprehensive income (loss) for unrealized gains and losses on available-for-sale securities (dollars in thousands): Three months ended 2023 2022 Balance at beginning of period $ ( 18,203 ) $ ( 2,110 ) Other comprehensive income (loss) before reclassifications, net of tax 2,286 ( 7,287 ) Less: amounts reclassified from accumulated other comprehensive income (loss), net of tax — — Net other comprehensive income (loss) 2,286 ( 7,287 ) Balance at end of period $ ( 15,917 ) $ ( 9,397 ) |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 10. Earnings Per Share Basic and diluted earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. The following table presents the calculation of basic and diluted earnings (loss) per common share, as follows (dollars in thousands, except per share and share amounts): Three Months Ended 2023 2022 Net income (loss) $ 1,001 $ ( 2,870 ) Weighted average common shares, basic and diluted * 12,215,849 9,707,817 Earnings (loss) per common share, basic and diluted $ 0.08 $ ( 0.30 ) * The non-vested shares of the restricted stock units and stock options were anti-dilutive as of March 31, 2023 and 2022. Therefore, the basic and diluted weighted average common shares are equal for the three months ended March 31, 2023 and 2022. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation | 11. Stock-based Compensation On March 8, 2022, the Company issued options to purchase 630,000 shares of the Company’s common stock to two named executive officers. The right to exercise the options will vest over a five-year period on a straight-line basis. The options have a strike price of $ 4.53 per share and will expire on March 8, 2032 . The estimated value of these options is $ 612,000 , which is being expensed ratably over the vesting period. A Black Scholes model was used to determine the fair value of the options at the time the options were issued, using the Company’s historical 5-year market price of its stock to determine volatility (equating to 65.04 %), an estimated 5-year term to exercise the options, a 5-year risk-free rate of return of 1.8 %, and the market price for the Company’s stock of $ 2.40 per share. On June 30, 2020, the Company issued options to purchase 280,000 shares of the Company’s common stock, to certain executive officers and other employees. The right to exercise the options will vest over a five-year period on a straight-line basis. The options have a strike price of $ 3.81 per share and expire on June 30, 2030 . The estimated value of these options is $ 290,000 , which is being expensed ratably over the vesting period. In 2016 and 2018, the Company issued 111,281 and 70,000 , respectively, of restricted stock units (“RSUs”) to various employees to be settled in shares of common stock, which were valued at $ 909,000 and $ 404,000 , respectively, on the dates of grant. The Company recorded $ 12,000 and $ 14,000 of compensation expense related to the RSUs for the three months ended March 31, 2023 and 2022, respectively. There were 9,000 unvested RSUs as of March 31, 2023, which will generate an estimated future expense of $ 4,000 . The Company recorded $ 43,000 and $ 24,000 of compensation expense related to the stock options for the three months ended March 31, 2023 and 2022, respectively. There were 654,000 unvested options as of March 31, 2023, which will generate an estimated future expense of $ 595,000 through February of 2027. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Legal proceedings The Company and its subsidiaries are subject at times to various claims, lawsuits and proceedings relating principally to alleged errors or omissions in the placement of insurance, claims administration, and other business transactions arising in the ordinary course of business. Where appropriate, the Company vigorously defends such claims, lawsuits and proceedings. Some of these claims, lawsuits and proceedings seek damages, including consequential, exemplary or punitive damages, in amounts that could, if awarded, be significant. Most of the claims, lawsuits and proceedings arising in the ordinary course of business are covered by the insurance policy at issue. We account for such activity through the establishment of unpaid losses and LAE reserves. In accordance with accounting guidance, if it is probable that a liability has been incurred as of the date of the financial statements and the amount of loss is reasonably estimable; then an accrual for the costs to resolve these claims is recorded by the Company in the accompanying consolidated financial statements. Periodic expenses related to the defense of such claims are included in the accompanying consolidated statements of operations. On the basis of current information, the Company does not believe that there is a reasonable possibility that any material loss exceeding amounts already accrued, if any, will result from any of the claims, lawsuits and proceedings to which the Company is subject to, either individually or in the aggregate. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | 13. Segment Information The Company is engaged in the sale of property and casualty insurance products and has organized its business model around three classes of insurance businesses: commercial lines, personal lines, and wholesale agency business. Within these three businesses, the Company offers various insurance products and insurance agency services. Such insurance businesses are engaged in underwriting and marketing insurance coverages, and administering claims processing for such policies. The Company views the commercial and personal lines segments as underwriting business (business that takes on insurance underwriting risk). The wholesale agency business provides non-risk bearing revenue through commissions and policy fees. The wholesale agency business increases the product options to the Company’s independent retail agents by offering both insurance products from the Insurance Company Subsidiaries as well as products offered by other insurers. The Company defines its operating segments as components of the business where separate financial information is available and used by the co-chief operating decision makers in deciding how to allocate resources to its segments and in assessing its performance. In assessing performance of its operating segments, the Company’s co-chief operating decision makers, the Co-Chief Executive Officers, review a number of financial measures including gross written premiums, net earned premiums, losses and LAE, net of reinsurance recoveries, and other revenue and expenses. The primary measure used for making decisions about resources to be allocated to an operating segment and assessing its performance is segment underwriting gain or loss which is defined as segment revenues, consisting of net earned premiums and other income, less segment expenses, consisting of losses and LAE, policy acquisition costs and operating expenses of the operating segments. Operating expenses primarily include compensation and related benefits for personnel, policy issuance and claims systems, rent and utilities. The Company markets, distributes and sells its insurance products through its own insurance agencies and a network of independent agents. All of the Company’s insurance activities are conducted in the United States with a concentration of activity in Michigan, Texas, Oklahoma and California. For the three months ended March 31, 2023 and 2022 , gross written premiums attributable to these four states were 56.2 % and 55.7 %, respectively, of the Company’s total gross written premiums. The Wholesale Agency business sells insurance products on behalf of the Company’s commercial and personal lines businesses as well as to third-party insurers. Certain acquisition costs incurred by the commercial and personal lines businesses are reflected as commission revenue for the Wholesale Agency business and are eliminated in the Eliminations category. In addition to the reportable operating segments, the Company maintains a Corporate category to reconcile segment results to the consolidated totals. The Corporate category includes: (i) corporate operating expenses such as salaries and related benefits of the Company’s executive management team and finance and information technology personnel, and other corporate headquarters expenses, (ii) interest expense on the Company’s debt obligations; (iii) depreciation and amortization on property and equipment, and (iv) all investment income activity. All investment income activity is reported within net investment income, net realized investment gains, and change in fair value of equity securities on the consolidated statements of operations. The Company’s assets on the consolidated balance sheet are not allocated to the reportable segments. The following tables present information by reportable operating segment (dollars in thousands): Three months ended Commercial Lines Personal Total Wholesale Corporate Eliminations Total Gross written premiums $ 28,975 $ 7,239 $ 36,214 $ — $ — $ — $ 36,214 Net written premiums $ 12,241 $ 6,101 $ 18,342 $ — $ — $ — $ 18,342 Net earned premiums $ 17,123 $ 4,829 $ 21,952 $ — $ — $ — $ 21,952 Other income 52 23 75 879 72 ( 400 ) 626 Segment revenue 17,175 4,852 22,027 879 72 ( 400 ) 22,578 Losses and LAE, net 10,547 3,166 13,713 — — — 13,713 Policy acquisition costs 3,196 1,389 4,585 548 — ( 412 ) 4,721 Operating expenses 3,028 592 3,620 352 307 — 4,279 Segment expenses 16,771 5,147 21,918 900 307 ( 412 ) 22,713 Segment gain (loss) $ 404 $ ( 295 ) $ 109 $ ( 21 ) $ ( 235 ) $ 12 $ ( 135 ) Investment income 1,307 1,307 Net realized investment gains (losses) — — Change in fair value of equity securities 694 694 Other gains (losses) — — Interest expense ( 686 ) ( 686 ) Income (loss) before equity earnings in Affiliate and income taxes $ 404 $ ( 295 ) $ 109 $ ( 21 ) $ 1,080 $ 12 $ 1,180 Three months ended Commercial Personal Total Wholesale Corporate Eliminations Total Gross written premiums $ 28,586 $ 4,378 $ 32,964 $ — $ — $ — $ 32,964 Net written premiums $ 14,340 $ 3,681 $ 18,021 $ — $ — $ — $ 18,021 Net earned premiums $ 20,524 $ 3,431 $ 23,955 $ — $ — $ — $ 23,955 Other income 71 6 77 1,112 147 ( 638 ) 698 Segment revenue 20,595 3,437 24,032 1,112 147 ( 638 ) 24,653 Losses and LAE, net 16,610 1,408 18,018 — — — 18,018 Policy acquisition costs 4,357 1,093 5,450 758 — ( 744 ) 5,464 Operating expenses 3,161 402 3,563 292 305 — 4,160 Segment expenses 24,128 2,903 27,031 1,050 305 ( 744 ) 27,642 Segment gain (loss) $ ( 3,533 ) $ 534 $ ( 2,999 ) $ 62 $ ( 158 ) $ 106 $ ( 2,989 ) Investment income 507 507 Net realized investment gains (losses) ( 69 ) ( 69 ) Change in fair value of equity securities 280 280 Other gains ( 5 ) ( 5 ) Interest expense ( 711 ) ( 711 ) Income (loss) before equity earnings in Affiliate and income taxes $ ( 3,533 ) $ 534 $ ( 2,999 ) $ 62 $ ( 156 ) $ 106 $ ( 2,987 ) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events The Company performed an evaluation of subsequent events through the date the financial statements were issued and determined there were no recognized or unrecognized subsequent events that would require an adjustment or additional disclosure in the condensed consolidated financial statements as of March 31, 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Management Representation | Basis of Presentation and Management Representation The consolidated financial statements include accounts, after elimination of intercompany accounts and transactions, of Conifer Holdings, Inc. (the “Company” or “Conifer”), its wholly owned subsidiaries, Conifer Insurance Company ("CIC"), White Pine Insurance Company ("WPIC"), Red Cedar Insurance Company ("RCIC"), Sycamore Insurance Agency, Inc. ("Sycamore"), and VSRM, Inc. ("VSRM"). CIC, WPIC, and RCIC are collectively referred to as the "Insurance Company Subsidiaries." On a stand-alone basis, Conifer Holdings, Inc. is referred to as the "Parent Company." VSRM owns a 50 % non-controlling interest in Sycamore Specialty Underwriters, LLC ("SSU" or "Affiliate"). The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which differ from statutory accounting practices prescribed or permitted for insurance companies by regulatory authorities. The Company has applied the rules and regulations of the United States Securities and Exchange Commission (“SEC”) regarding interim financial reporting and therefore the consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments, consisting of items of a normal recurring nature, necessary for a fair presentation of the consolidated interim financial statements, have been included. These consolidated financial statements and the notes thereto should be read in conjunction with the Company's audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC. The results of operations for the three months ended March 31, 2023, are not necessarily indicative of the results expected for the year ended December 31, 2023 . |
Business | Business The Company is engaged in the sale of property and casualty insurance products and has organized its principal operations into three types of insurance businesses: commercial lines, personal lines, and agency business. The Company underwrites a variety of specialty insurance products, including property, general liability, liquor liability, automobile, and homeowners and dwelling policies. The Company markets and sells its insurance products through a network of independent agents, including managing general agents, whereby policies are written in all 50 states in the United States of America (“U.S.”). The Company’s corporate headquarters are located in Troy, Michigan with additional office facilities in Florida and Michigan. |
Use of Estimates | 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. While management believes the amounts included in the consolidated financial statements reflect management's best estimates and assumptions, actual results may differ from these estimates. |
Cash, Cash Equivalents, and Short-term Investments | Cash, Cash Equivalents, and Short-term Investments Cash consists of cash deposits in banks, generally in operating accounts. Cash equivalents consist of money-market funds that are specifically used as overnight investments tied to cash deposit accounts. Short-term investments, consisting of money market funds, are classified as investments in the consolidated balance sheets as they relate to the Company’s investment activities. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , as amended, which introduces a new process for recognizing credit losses on financial instruments based on expected credit losses. This new standard replaces the incurred loss methodology and the concept of Other-than-Temporary Impairment (or “OTTI”) with an expected credit loss methodology that is sometimes referred to as the Current Expected Credit Loss (CECL) methodology. The guidance applies to Conifer's reinsurance recoverables, premium receivable, and debt securities. Results for reporting periods beginning after January 1, 2023 are presented under ASC 326, while prior period amounts continue to be reported in accordance with previously applicable U.S. GAAP. The adoption of ASC 326 did not have any impact on the Company's financial statements. Among other updates which management deems to have no material impact, ASC 326 made changes to the accounting for available-for-sale debt securities. At each quarter-end, for available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Recently Issued Accounting Guidance In January 2021, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848) . This guidance provides optional expedients and exceptions that are intended to ease the burden of updating contracts to contain a new reference rate due to the discontinuation of the London Inter-Bank Offered Rate (LIBOR). This guidance is available immediately and may be implemented in any period prior to the guidance expiration on December 31, 2024. Management does not expect the new guidance to have a material impact on the Company’s consolidated financial statements. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investments Debt And Equity Securities [Abstract] | |
Schedule of Available-for-sale Securities | The cost or amortized cost, gross unrealized gains or losses, and estimated fair value of the investments in securities classified as available for sale at March 31, 2023 and December 31, 2022 were as follows (dollars in thousands): March 31, 2023 Cost or Gross Unrealized Estimated Amortized Cost Gains Losses Fair Value Debt Securities: U.S. Government $ 7,220 $ — $ ( 249 ) $ 6,971 State and local government 26,063 1 ( 3,866 ) 22,198 Corporate debt 35,070 — ( 4,139 ) 30,931 Asset-backed securities 21,150 — ( 1,045 ) 20,105 Mortgage-backed securities 28,524 — ( 4,739 ) 23,785 Commercial mortgage-backed securities 3,413 — ( 125 ) 3,288 Collateralized mortgage obligations 3,834 — ( 479 ) 3,355 Total debt securities available for sale $ 125,274 $ 1 $ ( 14,642 ) $ 110,633 December 31, 2022 Cost or Gross Unrealized Estimated Amortized Cost Gains Losses Fair Value Debt Securities: U.S. Government $ 7,833 $ — $ ( 335 ) $ 7,498 State and local government 25,487 1 ( 4,672 ) 20,816 Corporate debt 35,347 — ( 4,788 ) 30,559 Asset-backed securities 21,742 — ( 1,246 ) 20,496 Mortgage-backed securities 29,194 — ( 5,157 ) 24,037 Commercial mortgage-backed securities 3,414 — ( 186 ) 3,228 Collateralized mortgage obligations 4,102 — ( 535 ) 3,567 Total debt securities available for sale $ 127,119 $ 1 $ ( 16,919 ) $ 110,201 |
Schedule Of Unrealized Loss On Investments | The following table summarizes the aggregate fair value and gross unrealized losses, by security type, of the available-for-sale securities in unrealized loss positions. The table segregates the holdings based on the length of time that individual securities have been in a continuous unrealized loss position (dollars in thousands): March 31, 2023 Less than 12 months Greater than 12 months Total No. of Fair Value of Gross No. of Fair Value of Gross No. of Fair Value of Gross Debt Securities: U.S. Government 2 $ 900 $ ( 6 ) 10 $ 6,071 $ ( 243 ) 12 $ 6,971 $ ( 249 ) State and local government 13 3,229 ( 80 ) 110 18,267 ( 3,786 ) 123 21,496 ( 3,866 ) Corporate debt 4 1,509 ( 41 ) 64 29,422 ( 4,098 ) 68 30,931 ( 4,139 ) Asset-backed securities 3 1,085 ( 28 ) 22 19,020 ( 1,017 ) 25 20,105 ( 1,045 ) Mortgage-backed securities 33 279 ( 12 ) 35 23,499 ( 4,727 ) 68 23,778 ( 4,739 ) Commercial mortgage-backed securities 1 209 ( 20 ) 3 3,056 ( 105 ) 4 3,265 ( 125 ) Collateralized mortgage obligations 11 166 ( 6 ) 23 3,212 ( 473 ) 34 3,378 ( 479 ) Total debt securities available for sale 67 $ 7,377 $ ( 193 ) 267 $ 102,547 $ ( 14,449 ) 334 $ 109,924 $ ( 14,642 ) December 31, 2022 Less than 12 months Greater than 12 months Total No. of Fair Value of Gross No. of Fair Value of Gross No. of Fair Value of Gross Debt Securities: U.S. Government 8 $ 3,534 $ ( 135 ) 5 $ 3,964 $ ( 200 ) 13 $ 7,498 $ ( 335 ) State and local government 77 12,966 ( 2,318 ) 45 7,147 ( 2,354 ) 122 20,113 ( 4,672 ) Corporate debt 27 10,069 ( 1,373 ) 42 20,890 ( 3,415 ) 69 30,959 ( 4,788 ) Asset-backed securities 6 3,188 ( 76 ) 20 17,308 ( 1,170 ) 26 20,496 ( 1,246 ) Mortgage-backed securities 57 4,006 ( 573 ) 12 20,031 ( 4,584 ) 69 24,037 ( 5,157 ) Commercial mortgage-backed securities 4 3,205 ( 186 ) — — — 4 3,205 ( 186 ) Collateralized mortgage obligations 26 1,789 ( 196 ) 9 1,802 ( 339 ) 35 3,591 ( 535 ) Total debt securities available for sale 205 $ 38,757 $ ( 4,857 ) 133 $ 71,142 $ ( 12,062 ) 338 $ 109,899 $ ( 16,919 ) |
Schedule of Investment Income and Losses | The Company’s sources of net investment income and losses are as follows (dollars in thousands): Three Months Ended 2023 2022 Debt securities $ 853 $ 582 Equity securities 11 28 Cash, cash equivalents and short-term investments 503 1 Total investment income 1,367 611 Investment expenses ( 60 ) ( 104 ) Net investment income $ 1,307 $ 507 |
Schedule of Gross Realized Gains and Losses on Securities | The following table summarizes the gross realized gains and losses from sales, calls and maturities of available-for-sale debt and equity securities (dollars in thousands): Three Months Ended 2023 2022 Debt securities: Gross realized gains $ — $ — Gross realized losses — — Total debt securities — — Equity securities: Gross realized gains $ — 19 Gross realized losses — ( 88 ) Total equity securities — ( 69 ) Total net realized investment gains (losses) $ — $ ( 69 ) |
Summary of Amortized Cost and Fair Value of Securities | The table below summarizes the amortized cost and fair value of available-for-sale debt securities by contractual maturity at March 31, 2023. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties (dollars in thousands): Amortized Estimated Due in one year or less $ 4,668 $ 4,592 Due after one year through five years 28,614 26,543 Due after five years through ten years 23,810 20,267 Due after ten years 11,261 8,698 Securities with contractual maturities 68,353 60,100 Asset-backed securities 21,150 20,105 Mortgage-backed securities 28,524 23,785 Commercial mortgage-backed securities 3,413 3,288 Collateralized mortgage obligations 3,834 3,355 Total debt securities $ 125,274 $ 110,633 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets and Liabilities Measured at Fair Value | The following tables present the Company’s assets and liabilities measured at fair value, classified by the valuation hierarchy as of March 31, 2023 and December 31, 2022 (dollars in thousands): March 31, 2023 Fair Value Measurements Total Level 1 Level 2 Level 3 Assets: Debt Securities: U.S. Government $ 6,971 $ — $ 6,971 $ — State and local government 22,198 — 22,198 — Corporate debt 30,931 — 30,931 — Asset-backed securities 20,105 — 20,105 — Mortgage-backed securities 23,785 — 23,785 — Commercial mortgage-backed securities 3,288 — 3,288 — Collateralized mortgage obligations 3,355 — 3,355 — Total debt securities 110,633 — 110,633 — Equity Securities 965 208 757 — Short-term investments 28,055 28,055 — — Total marketable investments measured at fair value $ 139,653 $ 28,263 $ 111,390 $ — Investments measured at NAV: Investment in limited partnership 1,460 Total assets measured at fair value $ 141,113 Liabilities: Senior Unsecured Notes * $ 22,567 $ — $ 22,567 $ — Subordinated Notes * 11,685 — — 11,685 Total Liabilities (non-recurring fair value measure) $ 34,252 $ — $ 22,567 $ 11,685 * Carried at face value of debt net of unamortized debt issuance costs on the consolidated balance sheets December 31, 2022 Fair Value Measurements Total Level 1 Level 2 Level 3 Assets: Debt Securities: U.S. Government $ 7,498 $ — $ 7,498 $ — State and local government 20,816 — 20,816 — Corporate debt 30,559 — 30,559 — Asset-backed securities 20,496 — 20,496 — Mortgage-backed securities 24,037 — 24,037 — Commercial mortgage-backed securities 3,228 — 3,228 — Collateralized mortgage obligations 3,567 — 3,567 — Total debt securities 110,201 — 110,201 — Equity securities 917 160 757 — Short-term investments 25,929 25,929 — — Total marketable investments measured at fair value $ 137,047 $ 26,089 $ 110,958 $ — Investments measured at NAV: Investment in limited partnership 350 Total assets measured at fair value $ 137,397 Liabilities: Senior Unsecured Notes * $ 22,430 $ — $ 22,430 $ — Subordinated Notes * 11,300 — — 11,300 Total Liabilities (non-recurring fair value measure) $ 33,730 $ — $ 22,430 $ 11,300 * Carried at face value of debt net of unamortized debt issuance costs on the consolidated balance sheets |
Deferred Policy Acquisition C_2
Deferred Policy Acquisition Costs (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Summary of Deferred Policy Acquisition Costs | The activity in deferred policy acquisition costs, net of reinsurance transactions, is as follows (dollars in thousands): Three Months Ended 2023 2022 Balance at beginning of period $ 10,290 $ 12,267 Deferred policy acquisition costs 2,757 3,321 Amortization of policy acquisition costs ( 4,721 ) ( 5,464 ) Net change ( 1,964 ) ( 2,143 ) Balance at end of period $ 8,326 $ 10,124 |
Unpaid Losses and Loss Adjust_2
Unpaid Losses and Loss Adjustment Expenses (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Insurance Loss Reserves [Abstract] | |
Schedule of the Changes in the Reserves for Losses and Loss Adjustment Expense | The table below provides the changes in the reserves for losses and LAE, net of reinsurance recoverables, for the periods indicated as follows (dollars in thousands): Three months ended 2023 2022 Gross reserves - beginning of period $ 165,539 $ 139,085 Less: reinsurance recoverables on unpaid losses ( 82,651 ) ( 40,344 ) Net reserves - beginning of period 82,888 98,741 Add: incurred losses and LAE, net of reinsurance: Current period 14,926 12,497 Prior period ( 1,213 ) 5,521 Total net incurred losses and LAE 13,713 18,018 Deduct: loss and LAE payments, net of reinsurance: Current period 1,987 2,512 Prior period 10,353 13,914 Total net loss and LAE payments 12,340 16,426 Net reserves - end of period 84,261 100,333 Plus: reinsurance recoverables on unpaid losses 61,101 40,605 Gross reserves - end of period $ 145,362 $ 140,938 |
Reinsurance (Tables)
Reinsurance (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Reinsurance Disclosures [Abstract] | |
Summary of the Effects of Reinsurance | The following table presents the effects of reinsurance and assumption transactions on written premiums, earned premiums and losses and LAE (dollars in thousands): Three Months Ended 2023 2022 Written premiums: Direct $ 24,341 $ 24,796 Assumed 11,873 8,168 Ceded ( 17,872 ) ( 14,943 ) Net written premiums $ 18,342 $ 18,021 Earned premiums: Direct $ 23,315 $ 24,123 Assumed 10,979 8,641 Ceded ( 12,342 ) ( 8,809 ) Net earned premiums $ 21,952 $ 23,955 Losses and LAE: Direct $ 1,969 $ 13,066 Assumed 1,497 7,408 Ceded 10,247 ( 2,456 ) Net Losses and LAE $ 13,713 $ 18,018 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Senior Debt | A summary of the Company's outstanding debt is as follows (dollars in thousands): March 31, December 31, Senior unsecured notes $ 24,251 $ 24,186 Subordinated notes 9,703 9,690 Total $ 33,954 $ 33,876 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents changes in accumulated other comprehensive income (loss) for unrealized gains and losses on available-for-sale securities (dollars in thousands): Three months ended 2023 2022 Balance at beginning of period $ ( 18,203 ) $ ( 2,110 ) Other comprehensive income (loss) before reclassifications, net of tax 2,286 ( 7,287 ) Less: amounts reclassified from accumulated other comprehensive income (loss), net of tax — — Net other comprehensive income (loss) 2,286 ( 7,287 ) Balance at end of period $ ( 15,917 ) $ ( 9,397 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table presents the calculation of basic and diluted earnings (loss) per common share, as follows (dollars in thousands, except per share and share amounts): Three Months Ended 2023 2022 Net income (loss) $ 1,001 $ ( 2,870 ) Weighted average common shares, basic and diluted * 12,215,849 9,707,817 Earnings (loss) per common share, basic and diluted $ 0.08 $ ( 0.30 ) * The non-vested shares of the restricted stock units and stock options were anti-dilutive as of March 31, 2023 and 2022. Therefore, the basic and diluted weighted average common shares are equal for the three months ended March 31, 2023 and 2022. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Information by Reportable Segment | The following tables present information by reportable operating segment (dollars in thousands): Three months ended Commercial Lines Personal Total Wholesale Corporate Eliminations Total Gross written premiums $ 28,975 $ 7,239 $ 36,214 $ — $ — $ — $ 36,214 Net written premiums $ 12,241 $ 6,101 $ 18,342 $ — $ — $ — $ 18,342 Net earned premiums $ 17,123 $ 4,829 $ 21,952 $ — $ — $ — $ 21,952 Other income 52 23 75 879 72 ( 400 ) 626 Segment revenue 17,175 4,852 22,027 879 72 ( 400 ) 22,578 Losses and LAE, net 10,547 3,166 13,713 — — — 13,713 Policy acquisition costs 3,196 1,389 4,585 548 — ( 412 ) 4,721 Operating expenses 3,028 592 3,620 352 307 — 4,279 Segment expenses 16,771 5,147 21,918 900 307 ( 412 ) 22,713 Segment gain (loss) $ 404 $ ( 295 ) $ 109 $ ( 21 ) $ ( 235 ) $ 12 $ ( 135 ) Investment income 1,307 1,307 Net realized investment gains (losses) — — Change in fair value of equity securities 694 694 Other gains (losses) — — Interest expense ( 686 ) ( 686 ) Income (loss) before equity earnings in Affiliate and income taxes $ 404 $ ( 295 ) $ 109 $ ( 21 ) $ 1,080 $ 12 $ 1,180 Three months ended Commercial Personal Total Wholesale Corporate Eliminations Total Gross written premiums $ 28,586 $ 4,378 $ 32,964 $ — $ — $ — $ 32,964 Net written premiums $ 14,340 $ 3,681 $ 18,021 $ — $ — $ — $ 18,021 Net earned premiums $ 20,524 $ 3,431 $ 23,955 $ — $ — $ — $ 23,955 Other income 71 6 77 1,112 147 ( 638 ) 698 Segment revenue 20,595 3,437 24,032 1,112 147 ( 638 ) 24,653 Losses and LAE, net 16,610 1,408 18,018 — — — 18,018 Policy acquisition costs 4,357 1,093 5,450 758 — ( 744 ) 5,464 Operating expenses 3,161 402 3,563 292 305 — 4,160 Segment expenses 24,128 2,903 27,031 1,050 305 ( 744 ) 27,642 Segment gain (loss) $ ( 3,533 ) $ 534 $ ( 2,999 ) $ 62 $ ( 158 ) $ 106 $ ( 2,989 ) Investment income 507 507 Net realized investment gains (losses) ( 69 ) ( 69 ) Change in fair value of equity securities 280 280 Other gains ( 5 ) ( 5 ) Interest expense ( 711 ) ( 711 ) Income (loss) before equity earnings in Affiliate and income taxes $ ( 3,533 ) $ 534 $ ( 2,999 ) $ 62 $ ( 156 ) $ 106 $ ( 2,987 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 Class_business State | |
Accounting Policies [Abstract] | |
Non Controlling Interest | 50% |
Number of types of business | Class_business | 3 |
Number of states in which entity operates | State | 50 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Investments Debt And Equity Securities [Abstract] | |||
Gross unrealized gain (loss) on available for sale securities | $ 14,600,000 | ||
Proceeds from available-for-sale debt securities | 23,600,000 | $ 6,700,000 | |
Gross realized gains or losses from sale of available-for-sale debt securities | 0 | 0 | |
Amount payable for securities purchased | 0 | 750,000 | |
Amount receivable for securities sold | 0 | $ 1,300,000 | |
Gross unrealized gains | 523,000,000,000 | $ 0 | |
Gross unrealized losses | 467,000 | 638,000 | |
Other than temporary impairments losses, investments | 0 | ||
Investments | 1,400,000 | 1,800,000 | |
Deposits held in trust accounts | 8,100,000 | 8,000,000 | |
Deposits, held in trust for collateral requirements | $ 98,100,000 | $ 95,700,000 |
Investments - Available-for-sal
Investments - Available-for-sale Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | $ 125,274 | $ 127,119 |
Debt securities, Gross Unrealized Gain | 1 | 1 |
Debt securities, Gross Unrealized Losses | (14,642) | (16,919) |
Debt securities, Estimated Fair Value | 110,633 | 110,201 |
U.S. Government | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | 7,220 | 7,833 |
Debt securities, Gross Unrealized Gain | 0 | 0 |
Debt securities, Gross Unrealized Losses | (249) | (335) |
Debt securities, Estimated Fair Value | 6,971 | 7,498 |
State and local government | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | 26,063 | 25,487 |
Debt securities, Gross Unrealized Gain | 1 | 1 |
Debt securities, Gross Unrealized Losses | (3,866) | (4,672) |
Debt securities, Estimated Fair Value | 22,198 | 20,816 |
Corporate debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | 35,070 | 35,347 |
Debt securities, Gross Unrealized Gain | 0 | 0 |
Debt securities, Gross Unrealized Losses | (4,139) | (4,788) |
Debt securities, Estimated Fair Value | 30,931 | 30,559 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | 21,150 | 21,742 |
Debt securities, Gross Unrealized Gain | 0 | 0 |
Debt securities, Gross Unrealized Losses | (1,045) | (1,246) |
Debt securities, Estimated Fair Value | 20,105 | 20,496 |
Mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | 28,524 | 29,194 |
Debt securities, Gross Unrealized Gain | 0 | 0 |
Debt securities, Gross Unrealized Losses | (4,739) | (5,157) |
Debt securities, Estimated Fair Value | 23,785 | 24,037 |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | 3,413 | 3,414 |
Debt securities, Gross Unrealized Gain | 0 | 0 |
Debt securities, Gross Unrealized Losses | (125) | (186) |
Debt securities, Estimated Fair Value | 3,288 | 3,228 |
Collateralized mortgage obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | 3,834 | 4,102 |
Debt securities, Gross Unrealized Gain | 0 | 0 |
Debt securities, Gross Unrealized Losses | (479) | (535) |
Debt securities, Estimated Fair Value | $ 3,355 | $ 3,567 |
Investments - Available-for-s_2
Investments - Available-for-sale Securities in Unrealized Loss Positions (Details) $ in Thousands | Mar. 31, 2023 USD ($) Security | Dec. 31, 2022 USD ($) Security |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | ||
Debt securities, less than 12 months, number of issues | Security | 67 | 205 |
Debt securities, greater than 12 months, number of issues | Security | 267 | 133 |
Debt securities, number of issues | Security | 334 | 338 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 7,377 | $ 38,757 |
Debt securities, greater than 12 months, fair value | 102,547 | 71,142 |
Debt securities, fair value | 109,924 | 109,899 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | (193) | (4,857) |
Debt securities, greater than 12 months, unrealized losses | (14,449) | (12,062) |
Debt securities, total unrealized losses | $ (14,642) | $ (16,919) |
U.S. Government | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | ||
Debt securities, less than 12 months, number of issues | Security | 2 | 8 |
Debt securities, greater than 12 months, number of issues | Security | 10 | 5 |
Debt securities, number of issues | Security | 12 | 13 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 900 | $ 3,534 |
Debt securities, greater than 12 months, fair value | 6,071 | 3,964 |
Debt securities, fair value | 6,971 | 7,498 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | (6) | (135) |
Debt securities, greater than 12 months, unrealized losses | (243) | (200) |
Debt securities, total unrealized losses | $ (249) | $ (335) |
State and local government | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | ||
Debt securities, less than 12 months, number of issues | Security | 13 | 77 |
Debt securities, greater than 12 months, number of issues | Security | 110 | 45 |
Debt securities, number of issues | Security | 123 | 122 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 3,229 | $ 12,966 |
Debt securities, greater than 12 months, fair value | 18,267 | 7,147 |
Debt securities, fair value | 21,496 | 20,113 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | (80) | (2,318) |
Debt securities, greater than 12 months, unrealized losses | (3,786) | (2,354) |
Debt securities, total unrealized losses | $ (3,866) | $ (4,672) |
Corporate debt | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | ||
Debt securities, less than 12 months, number of issues | Security | 4 | 27 |
Debt securities, greater than 12 months, number of issues | Security | 64 | 42 |
Debt securities, number of issues | Security | 68 | 69 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 1,509 | $ 10,069 |
Debt securities, greater than 12 months, fair value | 29,422 | 20,890 |
Debt securities, fair value | 30,931 | 30,959 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | (41) | (1,373) |
Debt securities, greater than 12 months, unrealized losses | (4,098) | (3,415) |
Debt securities, total unrealized losses | $ (4,139) | $ (4,788) |
Asset-backed securities | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | ||
Debt securities, less than 12 months, number of issues | Security | 3 | 6 |
Debt securities, greater than 12 months, number of issues | Security | 22 | 20 |
Debt securities, number of issues | Security | 25 | 26 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 1,085 | $ 3,188 |
Debt securities, greater than 12 months, fair value | 19,020 | 17,308 |
Debt securities, fair value | 20,105 | 20,496 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | (28) | (76) |
Debt securities, greater than 12 months, unrealized losses | (1,017) | (1,170) |
Debt securities, total unrealized losses | $ (1,045) | $ (1,246) |
Mortgage-backed securities | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | ||
Debt securities, less than 12 months, number of issues | Security | 33 | 57 |
Debt securities, greater than 12 months, number of issues | Security | 35 | 12 |
Debt securities, number of issues | Security | 68 | 69 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 279 | $ 4,006 |
Debt securities, greater than 12 months, fair value | 23,499 | 20,031 |
Debt securities, fair value | 23,778 | 24,037 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | (12) | (573) |
Debt securities, greater than 12 months, unrealized losses | (4,727) | (4,584) |
Debt securities, total unrealized losses | $ (4,739) | $ (5,157) |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | ||
Debt securities, less than 12 months, number of issues | Security | 1 | 4 |
Debt securities, greater than 12 months, number of issues | Security | 3 | 0 |
Debt securities, number of issues | Security | 4 | 4 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 209 | $ 3,205 |
Debt securities, greater than 12 months, fair value | 3,056 | 0 |
Debt securities, fair value | 3,265 | 3,205 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | (20) | (186) |
Debt securities, greater than 12 months, unrealized losses | (105) | 0 |
Debt securities, total unrealized losses | $ (125) | $ (186) |
Collateralized mortgage obligations | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | ||
Debt securities, less than 12 months, number of issues | Security | 11 | 26 |
Debt securities, greater than 12 months, number of issues | Security | 23 | 9 |
Debt securities, number of issues | Security | 34 | 35 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 166 | $ 1,789 |
Debt securities, greater than 12 months, fair value | 3,212 | 1,802 |
Debt securities, fair value | 3,378 | 3,591 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | (6) | (196) |
Debt securities, greater than 12 months, unrealized losses | (473) | (339) |
Debt securities, total unrealized losses | $ (479) | $ (535) |
Investments - Net Investment In
Investments - Net Investment Income and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net Investment Income [Line Items] | ||
Investment income | $ 1,367 | $ 611 |
Investment expenses | (60) | (104) |
Net investment income | 1,307 | 507 |
Debt securities | ||
Net Investment Income [Line Items] | ||
Investment income | 853 | 582 |
Equity securities | ||
Net Investment Income [Line Items] | ||
Investment income | 11 | 28 |
Cash, cash equivalents and short-term investments | ||
Net Investment Income [Line Items] | ||
Investment income | $ 503 | $ 1 |
Investments - Gross Realized Ga
Investments - Gross Realized Gains and Losses (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Debt securities: | ||
Gross realized gains | $ 0 | $ 0 |
Gross realized losses | 0 | 0 |
Total debt securities | 0 | 0 |
Equity securities: | ||
Gross realized gains | 0 | 19,000 |
Gross realized losses | 0 | (88,000) |
Total equity securities | 0 | (69,000) |
Total net realized investment gains (losses) | $ 0 | $ (69,000) |
Investments - Available-for-s_3
Investments - Available-for-sale Fixed Maturity Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Amortized Cost | ||
Due in one year or less | $ 4,668 | |
Due after one year through five years | 28,614 | |
Due after five years through ten years | 23,810 | |
Due after ten years | 11,261 | |
Securities with contractual maturities | 68,353 | |
Total debt securities | 125,274 | $ 127,119 |
Estimated Fair Value | ||
Due in one year or less | 4,592 | |
Due after one year through five years | 26,543 | |
Due after five years through ten years | 20,267 | |
Due after ten years | 8,698 | |
Securities with contractual maturities | 60,100 | |
Total debt securities | 110,633 | 110,201 |
Asset-backed securities | ||
Amortized Cost | ||
Total debt securities | 21,150 | 21,742 |
Estimated Fair Value | ||
Total debt securities | 20,105 | 20,496 |
Mortgage-backed securities | ||
Amortized Cost | ||
Total debt securities | 28,524 | 29,194 |
Estimated Fair Value | ||
Total debt securities | 23,785 | 24,037 |
Commercial mortgage-backed securities | ||
Amortized Cost | ||
Total debt securities | 3,413 | 3,414 |
Estimated Fair Value | ||
Total debt securities | 3,288 | 3,228 |
Collateralized mortgage obligations | ||
Amortized Cost | ||
Total debt securities | 3,834 | 4,102 |
Estimated Fair Value | ||
Total debt securities | $ 3,355 | $ 3,567 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Total debt securities | $ 110,633 | $ 110,201 |
Equity Securities | 965 | 917 |
Short-term investments | 28,055 | 25,929 |
Total marketable investments measured at fair value | 139,653 | 137,047 |
Total assets measured at fair value | 141,113 | 137,397 |
Liabilities: | ||
Total Liabilities (non-recurring fair value measure) | 34,252 | 33,730 |
U.S. Government | ||
Assets: | ||
Total debt securities | 6,971 | 7,498 |
State and local government | ||
Assets: | ||
Total debt securities | 22,198 | 20,816 |
Corporate debt | ||
Assets: | ||
Total debt securities | 30,931 | 30,559 |
Asset-backed securities | ||
Assets: | ||
Total debt securities | 20,105 | 20,496 |
Mortgage-backed securities | ||
Assets: | ||
Total debt securities | 23,785 | 24,037 |
Commercial mortgage-backed securities | ||
Assets: | ||
Total debt securities | 3,288 | 3,228 |
Collateralized mortgage obligations | ||
Assets: | ||
Total debt securities | 3,355 | 3,567 |
Senior Unsecured Notes | ||
Liabilities: | ||
Debt | 22,567 | 22,430 |
Subordinated notes | ||
Liabilities: | ||
Debt | 11,685 | 11,300 |
Partnership interest | ||
Assets: | ||
Investments measured at NAV | 1,460 | 350 |
Level 1 | ||
Assets: | ||
Total debt securities | 0 | 0 |
Equity Securities | 208 | 160 |
Short-term investments | 28,055 | 25,929 |
Total marketable investments measured at fair value | 28,263 | 26,089 |
Liabilities: | ||
Total Liabilities (non-recurring fair value measure) | 0 | 0 |
Level 1 | U.S. Government | ||
Assets: | ||
Total debt securities | 0 | 0 |
Level 1 | State and local government | ||
Assets: | ||
Total debt securities | 0 | 0 |
Level 1 | Corporate debt | ||
Assets: | ||
Total debt securities | 0 | 0 |
Level 1 | Asset-backed securities | ||
Assets: | ||
Total debt securities | 0 | 0 |
Level 1 | Mortgage-backed securities | ||
Assets: | ||
Total debt securities | 0 | 0 |
Level 1 | Commercial mortgage-backed securities | ||
Assets: | ||
Total debt securities | 0 | 0 |
Level 1 | Collateralized mortgage obligations | ||
Assets: | ||
Total debt securities | 0 | 0 |
Level 1 | Senior Unsecured Notes | ||
Liabilities: | ||
Debt | 0 | 0 |
Level 1 | Subordinated notes | ||
Liabilities: | ||
Debt | 0 | 0 |
Level 2 | ||
Assets: | ||
Total debt securities | 110,633 | 110,201 |
Equity Securities | 757 | 757 |
Short-term investments | 0 | 0 |
Total marketable investments measured at fair value | 111,390 | 110,958 |
Liabilities: | ||
Total Liabilities (non-recurring fair value measure) | 22,567 | 22,430 |
Level 2 | U.S. Government | ||
Assets: | ||
Total debt securities | 6,971 | 7,498 |
Level 2 | State and local government | ||
Assets: | ||
Total debt securities | 22,198 | 20,816 |
Level 2 | Corporate debt | ||
Assets: | ||
Total debt securities | 30,931 | 30,559 |
Level 2 | Asset-backed securities | ||
Assets: | ||
Total debt securities | 20,105 | 20,496 |
Level 2 | Mortgage-backed securities | ||
Assets: | ||
Total debt securities | 23,785 | 24,037 |
Level 2 | Commercial mortgage-backed securities | ||
Assets: | ||
Total debt securities | 3,288 | 3,228 |
Level 2 | Collateralized mortgage obligations | ||
Assets: | ||
Total debt securities | 3,355 | 3,567 |
Level 2 | Senior Unsecured Notes | ||
Liabilities: | ||
Debt | 22,567 | 22,430 |
Level 2 | Subordinated notes | ||
Liabilities: | ||
Debt | 0 | 0 |
Level 3 | ||
Assets: | ||
Total debt securities | 0 | 0 |
Equity Securities | 0 | 0 |
Short-term investments | 0 | 0 |
Total marketable investments measured at fair value | 0 | 0 |
Liabilities: | ||
Total Liabilities (non-recurring fair value measure) | 11,685 | 11,300 |
Level 3 | U.S. Government | ||
Assets: | ||
Total debt securities | 0 | 0 |
Level 3 | State and local government | ||
Assets: | ||
Total debt securities | 0 | 0 |
Level 3 | Corporate debt | ||
Assets: | ||
Total debt securities | 0 | 0 |
Level 3 | Asset-backed securities | ||
Assets: | ||
Total debt securities | 0 | 0 |
Level 3 | Mortgage-backed securities | ||
Assets: | ||
Total debt securities | 0 | 0 |
Level 3 | Commercial mortgage-backed securities | ||
Assets: | ||
Total debt securities | 0 | 0 |
Level 3 | Collateralized mortgage obligations | ||
Assets: | ||
Total debt securities | 0 | 0 |
Level 3 | Senior Unsecured Notes | ||
Liabilities: | ||
Debt | 0 | 0 |
Level 3 | Subordinated notes | ||
Liabilities: | ||
Debt | $ 11,685 | $ 11,300 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Transfers into level 3 | $ 0 | $ 0 | |
Transfers out of level 3 | $ 0 | $ 0 | |
Level 1 | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Marketable investment percentage | 20% | 18% | |
Level 2 | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Marketable investment percentage | 80% | 82% |
Deferred Policy Acquisition C_3
Deferred Policy Acquisition Costs - Activity in Deferred Policy Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||
Balance at beginning of period | $ 10,290 | $ 12,267 |
Deferred policy acquisition costs | 2,757 | 3,321 |
Amortization of policy acquisition costs | (4,721) | (5,464) |
Net change | (1,964) | (2,143) |
Balance at end of period | $ 8,326 | $ 10,124 |
Unpaid Losses and Loss Adjust_3
Unpaid Losses and Loss Adjustment Expenses - Changes in the Liability for Unpaid Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Gross reserves - beginning of period | $ 165,539 | $ 139,085 | $ 139,085 |
Less: reinsurance recoverables on unpaid losses | (82,651) | (40,344) | (40,344) |
Net reserves - beginning of period | 82,888 | 98,741 | 98,741 |
Add: incurred losses and LAE, net of reinsurance: | |||
Current period | 14,926 | 12,497 | |
Prior period | 1,213 | 5,521 | |
Total net incurred losses and LAE | 13,713 | 18,018 | |
Deduct: loss and LAE payments, net of reinsurance: | |||
Current period | 1,987 | 2,512 | |
Prior period | 10,353 | 13,914 | |
Total net loss and LAE payments | 12,340 | 16,426 | |
Net reserves - end of period | 84,261 | 100,333 | 82,888 |
Plus: reinsurance recoverables on unpaid losses | 61,101 | 40,605 | 82,651 |
Gross reserves - end of period | $ 145,362 | $ 140,938 | $ 165,539 |
Unpaid Losses and Loss Adjust_4
Unpaid Losses and Loss Adjustment Expenses - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Losses and loss adjustment expenses, net | $ 13,713,000 | $ 18,018,000 |
Prior year adjustments | 1,213,000 | 5,521,000 |
Loss Portfolio Transfer (LPT) | Minimum | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year adjustments | 2,400,000 | |
Loss Portfolio Transfer (LPT) | Maximum | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year adjustments | 20,000,000 | |
Commercial Line | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year adjustments | 817,000 | 5,700,000 |
Personal Line | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year adjustments | 396,000 | 219,000 |
Accident Year 2019 | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year adjustments | 1,300,000 | |
Accident Year 2019 | Loss Portfolio Transfer (LPT) | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year adjustments | $ 1,800,000 | |
Accident Year 2020 | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year adjustments | 1,500,000 | |
Accident Year 2017 | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year adjustments | 1,500,000 | |
Accident Year 2018 | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year adjustments | $ 1,300,000 |
Reinsurance - Narrative (Detail
Reinsurance - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Nov. 01, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Effects Of Reinsurance [Line Items] | ||||||
Ceded premium written | $ 17,872,000 | $ 14,943,000 | ||||
Ceded premiums earned | 12,342,000 | 8,809,000 | ||||
Reinsurance recoverables on paid losses | 9,023,000 | $ 6,653,000 | ||||
Stated net reserves retained | 84,261,000 | 100,333,000 | 82,888,000 | $ 98,741,000 | ||
Losses and loss adjustment expenses, net | 13,713,000 | 18,018,000 | ||||
Prior period | 1,213,000 | 5,521,000 | ||||
Reinsurance recoverables on unpaid losses | 61,101,000 | 40,605,000 | 82,651,000 | $ 40,344,000 | ||
Accident Year 2019 | ||||||
Effects Of Reinsurance [Line Items] | ||||||
Prior period | $ 1,300,000 | |||||
Loss Portfolio Transfer (“LPT”) Reinsurance Agreement | ||||||
Effects Of Reinsurance [Line Items] | ||||||
Reinsurance recoverables on paid losses | 3,000,000 | 3,800,000 | ||||
Reinsurance recoverables on unpaid losses | 22,000,000 | 25,900,000 | ||||
Loss Portfolio Transfer (“LPT”) Reinsurance Agreement | Minimum | ||||||
Effects Of Reinsurance [Line Items] | ||||||
Reinsurance recoverables on paid losses | $ 46,300,000 | |||||
Fleming Reinsurance Ltd | Loss Portfolio Transfer (“LPT”) Reinsurance Agreement | ||||||
Effects Of Reinsurance [Line Items] | ||||||
Stated net reserves retained | $ 40,800,000 | |||||
Losses and loss adjustment expenses, net | 5,500,000 | |||||
Amount reinsured | 40,800,000 | |||||
One-time risk fee retained | 5,400,000 | |||||
Fleming Reinsurance Ltd | Loss Portfolio Transfer (“LPT”) Reinsurance Agreement | Maximum | ||||||
Effects Of Reinsurance [Line Items] | ||||||
Reinsurance recoverables on paid losses | 66,300,000 | |||||
Fleming Reinsurance Ltd | Loss Portfolio Transfer (“LPT”) Reinsurance Agreement | Accident Year 2019 | ||||||
Effects Of Reinsurance [Line Items] | ||||||
Reinsurance recoverables on paid losses | 66,300,000 | |||||
Stated net reserves retained | $ 40,800,000 | |||||
Prior period | $ 20,000,000 | |||||
100% Cede of Commercial Liability Risks In Excess of $400,000 | ||||||
Effects Of Reinsurance [Line Items] | ||||||
Amount retained (excess of) | 400,000 | 340,000 | ||||
Corridor | Agreement Between Cic And Wpic And Fleming Re | ||||||
Effects Of Reinsurance [Line Items] | ||||||
Losses and loss adjustment expenses, net | 5,500,000 | 5,500,000 | ||||
Layer | Agreement Between Cic And Wpic And Fleming Re | Maximum | ||||||
Effects Of Reinsurance [Line Items] | ||||||
Losses and loss adjustment expenses, net | 20,000,000 | 20,000,000 | ||||
Layer | Agreement Between Cic And Wpic And Fleming Re | Minimum | ||||||
Effects Of Reinsurance [Line Items] | ||||||
Losses and loss adjustment expenses, net | 2,400,000 | 644,000 | ||||
Ceded Commercial Property Risks In Excess of $200,000 | ||||||
Effects Of Reinsurance [Line Items] | ||||||
Amount retained (excess of) | 400,000 | |||||
Ceded Homeowners Specific Risks In Excess of $300,000 | ||||||
Effects Of Reinsurance [Line Items] | ||||||
Amount retained (excess of) | $ 300,000 | 300,000 | ||||
Ceded Commercial Property Risks In Excess of $400,000 | ||||||
Effects Of Reinsurance [Line Items] | ||||||
Amount retained (excess of) | $ 300,000 |
Reinsurance - Effects of Reinsu
Reinsurance - Effects of Reinsurance and Assumption Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Written premiums: | ||
Direct | $ 24,341 | $ 24,796 |
Assumed | 11,873 | 8,168 |
Ceded | (17,872) | (14,943) |
Net written premiums | 18,342 | 18,021 |
Earned premiums: | ||
Direct | 23,315 | 24,123 |
Assumed | 10,979 | 8,641 |
Ceded | (12,342) | (8,809) |
Net earned premiums | 21,952 | 23,955 |
Losses and LAE: | ||
Direct | 1,969 | 13,066 |
Assumed | 1,497 | 7,408 |
Ceded | 10,247 | (2,456) |
Total net incurred losses and LAE | $ 13,713 | $ 18,018 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 24, 2018 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Senior Unsecured Notes | Senior Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt | $ 25,300,000 | $ 24,300,000 | ||
Maturity date | Sep. 30, 2023 | |||
Interest rate | 6.75% | |||
Number of units repurchased | 0 | 0 | ||
Debt issuance costs | $ 130,000 | |||
Subordinated notes | Subordinated notes | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt | $ 10,500,000 | $ 10,500,000 | ||
Maturity date | Sep. 30, 2038 | |||
Interest rate, payment terms | Interest is payable quarterly at the end of March, June, September and December. | |||
Call premium percentage | 12.50% | |||
Debt issuance costs | $ 797,000 | |||
Subordinated notes | Subordinated notes | Debt Instrument, Redemption, Period One | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 7.50% | |||
Call premium | $ 1,100,000 | |||
Subordinated notes | Subordinated notes | Debt Instrument, Redemption, Period Two | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 12.50% | |||
Call premium | $ 1,750,000 | |||
Subordinated notes | Subordinated notes | Debt Instrument, Redemption, Period Three | ||||
Debt Instrument [Line Items] | ||||
Call premium | $ 3,050,000 | |||
Line of credit | ||||
Debt Instrument [Line Items] | ||||
Borrowing capacity | $ 10,000,000 | |||
Line of credit | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Variable interest rate | 2.75% |
Debt - Outstanding Senior Debt
Debt - Outstanding Senior Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Debt | $ 33,954 | $ 33,876 |
Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Debt | 24,251 | 24,186 |
Subordinated notes | ||
Debt Instrument [Line Items] | ||
Debt | $ 9,703 | $ 9,690 |
Shareholder's Equity - Narrativ
Shareholder's Equity - Narrative (Details) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Aug. 10, 2022 USD ($) $ / shares shares | Mar. 31, 2023 Vote shares | Dec. 31, 2022 shares | |
Equity Class Of Treasury Stock [Line Items] | |||
Common stock, shares issued (in shares) | 12,215,849 | 12,215,849 | |
Common stock, shares outstanding (in shares) | 12,215,849 | 12,215,849 | |
Common stock voting rights, number of votes per share | Vote | 1 | ||
Common stocks | |||
Equity Class Of Treasury Stock [Line Items] | |||
Common stock, shares issued (in shares) | 12,215,849 | 12,215,849 | |
Common stock, shares outstanding (in shares) | 12,215,849 | 12,215,849 | |
Private placement | Common stocks | |||
Equity Class Of Treasury Stock [Line Items] | |||
Common equity issued | $ | $ 5 | ||
Common equity issued (in shares) | 2,500,000 | ||
Offering price per share (in dollars per share) | $ / shares | $ 2 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 18,950 | $ 40,503 |
Net other comprehensive income (loss) | 2,286 | (7,287) |
Balance at end of period | 22,292 | 30,384 |
Accumulated Other Comprehensive Income (Loss) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (18,203) | (2,110) |
Other comprehensive income (loss) before reclassifications, net of tax | 2,286 | (7,287) |
Less: amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | 0 |
Net other comprehensive income (loss) | 2,286 | (7,287) |
Balance at end of period | $ (15,917) | $ (9,397) |
Earnings Per Share - Basic and
Earnings Per Share - Basic and Diluted Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Earnings Per Share [Abstract] | |||
Net income (loss) | $ 1,001 | $ (2,870) | |
Weighted average common shares outstanding, basic | [1] | 12,215,849 | 9,707,817 |
Weighted average common shares outstanding, diluted | [1] | 12,215,849 | 9,707,817 |
Earnings (loss) per common share, basic | $ 0.08 | $ (0.30) | |
Earnings (loss) per common share, diluted | $ 0.08 | $ (0.30) | |
[1] The non-vested shares of the restricted stock units and stock options were anti-dilutive as of March 31, 2023 and 2022. Therefore, the basic and diluted weighted average common shares are equal for the three months ended March 31, 2023 and 2022. |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 08, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2016 | |
Stock Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options issued to purchase shares of common stock | 630,000 | 280,000 | ||||
Vesting period | 5 years | 5 years | ||||
Strike price | $ 4.53 | $ 3.81 | ||||
Expiration date | Mar. 08, 2032 | Jun. 30, 2030 | ||||
Estimated value of options issued to purchase shares of common stock | $ 612,000 | $ 290,000 | ||||
Share-based compensation expense | $ 43,000 | $ 24,000 | ||||
Share-based compensation expense not yet recognized | $ 595,000 | |||||
Share-based compensation nonvested shares | 654,000 | |||||
Stock options volatility rate | 65.04% | |||||
Options exercisable term | 5 years | |||||
Risk free interest rate term of options | 5 years | |||||
Risk free interest rate of options | 1.80% | |||||
Market value of stock | $ 2.40 | |||||
Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ 12,000 | $ 14,000 | ||||
Share-based compensation expense not yet recognized | $ 4,000 | |||||
Restricted Stock Units (RSUs) | 2015 Omnibus Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares granted in period (in shares) | 70,000 | 111,281 | ||||
Shares granted in period | $ 404,000 | $ 909,000 | ||||
Share-based compensation nonvested shares | 9,000 |
Segment Information - Narrative
Segment Information - Narrative (Details) - Business | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Number of businesses | 3 | |
Gross Written Premiums | Geographic Concentration Risk | Michigan, Texas, Oklahoma and California | ||
Segment Reporting Information [Line Items] | ||
Concentration risk | 56.20% | 55.70% |
Segment Information - Informati
Segment Information - Information by Reportable Operating Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Gross written premiums | $ 36,214 | $ 32,964 |
Net written premiums | 18,342 | 18,021 |
Net earned premiums | 21,952 | 23,955 |
Other income | 626 | 698 |
Segment revenue | 22,578 | 24,653 |
Losses and LAE, net | 13,713 | 18,018 |
Policy acquisition costs | 4,721 | 5,464 |
Operating expenses | 4,279 | 4,160 |
Segment expenses | 22,713 | 27,642 |
Segment gain (loss) | (135) | (2,989) |
Net investment income | 1,307 | 507 |
Net realized investment gains (losses) | 0 | (69) |
Change in fair value of equity securities | 694 | 280 |
Other gains (losses) | 0 | (5) |
Interest expense | (686) | (711) |
Income (loss) before equity earnings in Affiliate and income taxes | 1,180 | (2,987) |
Operating Segments | Commercial Lines | ||
Segment Reporting Information [Line Items] | ||
Gross written premiums | 28,975 | 28,586 |
Net written premiums | 12,241 | 14,340 |
Net earned premiums | 17,123 | 20,524 |
Other income | 52 | 71 |
Segment revenue | 17,175 | 20,595 |
Losses and LAE, net | 10,547 | 16,610 |
Policy acquisition costs | 3,196 | 4,357 |
Operating expenses | 3,028 | 3,161 |
Segment expenses | 16,771 | 24,128 |
Segment gain (loss) | 404 | (3,533) |
Income (loss) before equity earnings in Affiliate and income taxes | 404 | (3,533) |
Operating Segments | Personal Lines | ||
Segment Reporting Information [Line Items] | ||
Gross written premiums | 7,239 | 4,378 |
Net written premiums | 6,101 | 3,681 |
Net earned premiums | 4,829 | 3,431 |
Other income | 23 | 6 |
Segment revenue | 4,852 | 3,437 |
Losses and LAE, net | 3,166 | 1,408 |
Policy acquisition costs | 1,389 | 1,093 |
Operating expenses | 592 | 402 |
Segment expenses | 5,147 | 2,903 |
Segment gain (loss) | (295) | 534 |
Income (loss) before equity earnings in Affiliate and income taxes | (295) | 534 |
Operating Segments | Total Underwriting | ||
Segment Reporting Information [Line Items] | ||
Gross written premiums | 36,214 | 32,964 |
Net written premiums | 18,342 | 18,021 |
Net earned premiums | 21,952 | 23,955 |
Other income | 75 | 77 |
Segment revenue | 22,027 | 24,032 |
Losses and LAE, net | 13,713 | 18,018 |
Policy acquisition costs | 4,585 | 5,450 |
Operating expenses | 3,620 | 3,563 |
Segment expenses | 21,918 | 27,031 |
Segment gain (loss) | (109) | (2,999) |
Income (loss) before equity earnings in Affiliate and income taxes | 109 | (2,999) |
Operating Segments | Wholesale Agency | ||
Segment Reporting Information [Line Items] | ||
Other income | 879 | 1,112 |
Segment revenue | 879 | 1,112 |
Policy acquisition costs | 548 | 758 |
Operating expenses | 352 | 292 |
Segment expenses | 900 | 1,050 |
Segment gain (loss) | (21) | 62 |
Income (loss) before equity earnings in Affiliate and income taxes | (21) | 62 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Other income | 72 | 147 |
Segment revenue | 72 | 147 |
Operating expenses | 307 | 305 |
Segment expenses | 307 | 305 |
Segment gain (loss) | (235) | (158) |
Net investment income | 1,307 | 507 |
Net realized investment gains (losses) | (69) | |
Change in fair value of equity securities | 694 | 280 |
Other gains (losses) | (5) | |
Interest expense | (686) | (711) |
Income (loss) before equity earnings in Affiliate and income taxes | 1,080 | (156) |
Eliminations | ||
Segment Reporting Information [Line Items] | ||
Other income | (400) | (638) |
Segment revenue | (400) | (638) |
Policy acquisition costs | (412) | (744) |
Segment expenses | (412) | (744) |
Segment gain (loss) | 12 | 106 |
Income (loss) before equity earnings in Affiliate and income taxes | $ 12 | $ 106 |