Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 13, 2024 | |
Document Information [Line Items] | ||
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 | 12,222,881 | |
Document Period End Date | Jun. 30, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
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 | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | CNFR | |
Security Exchange Name | NASDAQ | |
9.75% Senior Notes due 2028 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 9.75% Senior Notes due 2028 | |
Trading Symbol | CNFRZ | |
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Investment securities: | ||
Debt securities, at fair value (amortized cost of $132,889 and $135,370, respectively) | $ 119,371 | $ 122,113 |
Equity securities, at fair value (cost of $1,844 and $2,385, respectively) | 1,660 | 2,354 |
Short-term investments, at fair value | 23,339 | 20,838 |
Total investments | 144,370 | 145,305 |
Cash and cash equivalents | 9,697 | 11,125 |
Premiums and agents' balances receivable, net | 30,583 | 29,369 |
Reinsurance recoverables on unpaid losses | 74,358 | 70,807 |
Reinsurance recoverables on paid losses | 8,614 | 12,619 |
Prepaid reinsurance premiums | 13,494 | 28,908 |
Deferred policy acquisition costs | 4,606 | 6,285 |
Other assets | 6,038 | 6,339 |
Total assets | 292,934 | 311,804 |
Liabilities: | ||
Unpaid losses and loss adjustment expenses | 174,786 | 174,612 |
Unearned premiums | 44,820 | 65,150 |
Reinsurance premiums payable | 1,408 | 246 |
Debt | 24,832 | 25,061 |
Funds held under reinsurance agreements | 23,602 | 24,550 |
Premiums payable to other insureds | 19,299 | 13,986 |
Accounts payable and accrued expenses | 5,352 | 5,310 |
Total liabilities | 294,099 | 308,915 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock, no par value (10,000,000 shares authorized; 1,000 issued and outstanding, respectively) | 6,000 | 6,000 |
Common stock, no par value (100,000,000 shares authorized; 12,222,881 issued and outstanding, respectively) | 98,170 | 98,100 |
Accumulated deficit | (90,559) | (86,683) |
Accumulated other comprehensive income (loss) | (14,776) | (14,528) |
Total shareholders' equity | (1,165) | 2,889 |
Total liabilities and shareholders' equity | 292,934 | 311,804 |
Affiliated Entity | ||
Investment securities: | ||
Receivable from Affiliate | $ 1,174 | $ 1,047 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Debt securities, amortized cost | $ 132,889 | $ 135,370 |
Equity securities, amortized cost | $ 1,844 | $ 2,385 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 1,000 | 1,000 |
Preferred stock, shares outstanding (in shares) | 1,000 | 1,000 |
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) | 12,222,881 | 12,222,881 |
Common stock, shares outstanding (in shares) | 12,222,881 | 12,222,881 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | ||
Revenue and Other Income | |||||
Gross earned premiums | $ 29,381 | $ 36,013 | $ 63,613 | $ 70,307 | |
Ceded earned premiums | (12,715) | (12,830) | (30,060) | (25,172) | |
Net earned premiums | 16,666 | 23,183 | 33,553 | 45,135 | |
Net investment income | 1,505 | 1,354 | 3,057 | 2,661 | |
Net realized investment gains (losses) | (118) | 0 | (118) | 0 | |
Change in fair value of equity securities | (196) | (12) | (153) | 682 | |
Agency commission income | 8,831 | 211 | 13,167 | 641 | |
Other income | 160 | 187 | 420 | 383 | |
Total revenue and other income | 26,848 | 24,923 | 49,926 | 49,502 | |
Expenses | |||||
Losses and loss adjustment expenses, net | 15,281 | 19,319 | 25,801 | 33,032 | |
Policy acquisition costs | 10,480 | 4,413 | 17,493 | 9,134 | |
Operating expenses | 4,256 | 5,114 | 8,751 | 9,393 | |
Interest expense | 869 | 820 | 1,746 | 1,506 | |
Total expenses | 30,886 | 29,666 | 53,791 | 53,065 | |
Income (loss) before equity earnings in Affiliate and income taxes | (4,038) | (4,743) | (3,865) | (3,563) | |
Equity earnings (loss) in Affiliate, net of tax | 228 | 4 | 286 | (175) | |
Income tax expense (benefit) | (18) | 0 | (18) | 0 | |
Net income (loss) | (3,792) | (4,739) | (3,561) | (3,738) | |
Preferred stock dividends | 158 | 0 | 315 | 0 | |
Net income (loss) allocable to common shareholders | $ (3,950) | $ (4,739) | $ (3,876) | $ (3,738) | |
Earnings (loss) per common share, basic | $ (0.32) | $ (0.39) | $ (0.32) | $ (0.31) | |
Earnings (loss) per common share, diluted | $ (0.32) | $ (0.39) | $ (0.32) | $ (0.31) | |
Weighted average common shares outstanding, basic | [1] | 12,222,881 | 12,220,331 | 12,222,881 | 12,218,102 |
Weighted average common shares outstanding, diluted | [1] | 12,222,881 | 12,220,331 | 12,222,881 | 12,218,102 |
[1] The non-vested shares of the restricted stock units and stock options were anti-dilutive as of June 30, 2023. Therefore, the basic and diluted weighted average common shares are equal for the three and six months ended June 30, 2024 and 2023. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (3,792) | $ (4,739) | $ (3,561) | $ (3,738) |
Unrealized investment gains (losses): | ||||
Unrealized investment gains (losses) during the period | 188 | (741) | (248) | 1,545 |
Income tax (benefit) expense | 0 | 0 | 0 | 0 |
Unrealized investment gains (losses), net of tax | 188 | (741) | (248) | 1,545 |
Less: reclassification adjustments to: | ||||
Net realized investment gains (losses) included in net income (loss) | 0 | 0 | 0 | 0 |
Income tax (benefit) expense | 0 | 0 | 0 | 0 |
Total reclassifications included in net income (loss), net of tax | 0 | 0 | 0 | 0 |
Net other comprehensive income (loss) | 188 | (741) | (248) | 1,545 |
Total comprehensive income (loss) | $ (3,604) | $ (5,480) | $ (3,809) | $ (2,193) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | No Par, Preferred Stock | No Par, Common Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
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) | (3,738) | (3,738) | |||
Repurchase of common stock, Shares | (1,968) | ||||
Repurchase of common stock | (3) | $ (3) | |||
Stock-based compensation expense, Shares | 9,000 | ||||
Stock-based compensation expense | 103 | $ 103 | |||
Other comprehensive income (loss) | 1,545 | 1,545 | |||
Balance at end of period at Jun. 30, 2023 | 16,857 | $ 98,013 | (64,498) | (16,658) | |
Balance at ending of period (in shares) at Jun. 30, 2023 | 12,222,881 | ||||
Balance at beginning of period at Mar. 31, 2023 | 22,292 | $ 97,968 | (59,759) | (15,917) | |
Balance at beginning of period (in shares) at Mar. 31, 2023 | 12,215,849 | ||||
Net income (loss) | (4,739) | (4,739) | |||
Repurchase of common stock, Shares | (1,968) | ||||
Repurchase of common stock | (3) | $ (3) | |||
Stock-based compensation expense, Shares | 9,000 | ||||
Stock-based compensation expense | 48 | $ 48 | |||
Other comprehensive income (loss) | (741) | (741) | |||
Balance at end of period at Jun. 30, 2023 | 16,857 | $ 98,013 | (64,498) | (16,658) | |
Balance at ending of period (in shares) at Jun. 30, 2023 | 12,222,881 | ||||
Balance at beginning of period at Dec. 31, 2023 | 2,889 | $ 6,000 | $ 98,100 | (86,683) | (14,528) |
Balance at beginning of period (in shares) at Dec. 31, 2023 | 1,000 | 12,222,881 | |||
Net income (loss) | (3,561) | (3,561) | |||
Stock-based compensation expense | 70 | $ 70 | |||
Dividends on preferred stock | (315) | (315) | |||
Other comprehensive income (loss) | (248) | (248) | |||
Balance at end of period at Jun. 30, 2024 | (1,165) | $ 6,000 | $ 98,170 | (90,559) | (14,776) |
Balance at ending of period (in shares) at Jun. 30, 2024 | 1,000 | 12,222,881 | |||
Balance at beginning of period at Mar. 31, 2024 | 2,559 | $ 6,000 | $ 98,132 | (86,609) | (14,964) |
Balance at beginning of period (in shares) at Mar. 31, 2024 | 1,000 | 12,222,881 | |||
Net income (loss) | (3,792) | (3,792) | |||
Stock-based compensation expense | 38 | $ 38 | |||
Dividends on preferred stock | (158) | (158) | |||
Other comprehensive income (loss) | 188 | 188 | |||
Balance at end of period at Jun. 30, 2024 | $ (1,165) | $ 6,000 | $ 98,170 | $ (90,559) | $ (14,776) |
Balance at ending of period (in shares) at Jun. 30, 2024 | 1,000 | 12,222,881 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash Flows From Operating Activities | ||
Net income (loss) | $ (3,561) | $ (3,738) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 321 | 193 |
Amortization of bond premium and discount, net | (327) | (362) |
Net realized investment (gains) losses | 118 | |
Change in fair value of equity securities | 153 | (682) |
Stock-based compensation expenses | 70 | 103 |
Equity loss (earnings) in Affiliate, net of tax | (286) | 175 |
(Increase) decrease in: | ||
Premiums and agents' balances and other receivables | (1,341) | (3,961) |
Reinsurance recoverables | 454 | 26,971 |
Prepaid reinsurance premiums | 15,414 | (8,045) |
Deferred policy acquisition costs | 1,679 | 790 |
Other assets | (78) | 64 |
Increase (decrease) in: | ||
Unpaid losses and loss adjustment expenses | 174 | (20,535) |
Unearned premiums | (20,330) | 10,581 |
Funds held under reinsurance agreements | (948) | (6,086) |
Reinsurance premiums payable | 1,162 | 5,879 |
Premiums payable to other insureds | 5,313 | |
Accounts payable and other liabilities | 61 | (2,794) |
Net cash provided by (used in) operating activities | (1,952) | (1,447) |
Cash Flows From Investing Activities | ||
Purchase of investments | (97,960) | (120,578) |
Proceeds from maturities and redemptions of investments | 4,539 | 5,651 |
Proceeds from sales of investments | 94,779 | 108,041 |
Obligation to SSU | (934) | |
Net cash provided by (used in) investing activities | 1,358 | (7,820) |
Cash Flows From Financing Activities | ||
Repurchase of common stock | (3) | |
Dividends paid to shareholders | (334) | |
Repayment of long-term debt | (500) | |
Net cash provided by (used in) financing activities | (834) | (3) |
Net increase (decrease) in cash | (1,428) | (9,270) |
Cash at beginning of period | 11,125 | 28,035 |
Cash at end of period | 9,697 | 18,765 |
Supplemental Disclosure of Cash Flow Information: | ||
Interest paid | 1,876 | 1,506 |
Income taxes paid (refunded), net | $ 0 | $ (17) |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (3,950) | $ (4,739) | $ (3,876) | $ (3,738) |
Insider Trading Arrangements
Insider Trading Arrangements | 6 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
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"), Conifer Insurance Services ("CIS"), which is our managing general agency ("MGA"), formerly known as 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, 2023, as filed with the SEC. The results of operations for the six months ended June 30, 2024, are not necessarily indicative of the results expected for the year ended December 31, 2024 . 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 almost all 50 states in the United States of America (“U.S.”). The Company has been in the process of strategically shifting from mostly underwriting insurance products (generating revenues through premiums) to mostly producing, or selling, insurance products through its MGA. Utilizing its existing relationships with retail agencies and other agencies, in the first quarter of 2024, the Company began producing business that was directly underwritten by a third-party insurer. By the end of the second quarter, this shift was mostly complete with the expansion of having two third-party insurers to underwrite substantially all of the commercial lines business previously underwritten by the Insurance Company Subsidiaries. The Company is currently actively considering the sale of assets and of business operations in order to raise capital with which to repay debt and improve its financial position. 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. Accounting Guidance Not Yet Adopted 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. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). This guidance is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss to assess potential future cash flows for each reportable segment and the entity as a whole. The amendments expand a public entity's segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), clarifying when an entity may report one or more additional measures to assess segment performance, requiring enhanced interim disclosures, providing new disclosure requirements for entities with a single reportable segment, and requiring other new disclosures. ASU 2023-07 is effective for fiscal years beginning after December 31, 2024. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740). ASU 2023-09 requires public business entities to disclose additional information with respect to the reconciliation of the effective tax rate to the statutory rate. Additionally, public business entities will need to disaggregate federal, state and foreign taxes paid in their financial statements. ASU 2023-09 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements. Company Liquidity We conduct our business operations primarily through our Insurance Company Subsidiaries and MGA. Our ability to service debt, and pay administrative expenses has been primarily reliant upon our intercompany service fees paid by the Insurance Company Subsidiaries and MGA to the holding company for management, administrative, and information technology services provided to the Insurance Company Subsidiaries and MGA by the Parent Company. The Parent Company may receive dividends from the Insurance Company Subsidiaries; however, this is not the primary means in which the holding company supports its funding as state insurance laws restrict the ability of our Insurance Company Subsidiaries to declare dividends to the Parent Company, and we do not anticipate any dividends being paid to us from our Insurance Company Subsidiaries during 2024 and 2025. The Parent Company may receive dividends from our MGA without regulatory restrictions. Due to significant losses in 2023, much of which was attributable to strengthening reserves and severe storm activity affecting the Oklahoma homeowners business, both Insurance Company Subsidiaries lack sufficient capital to continue to underwrite the volume of business they have historically written. Accordingly, in the first quarter of 2024, management implemented a strategic shift in which the Company began utilizing third-party insurers to mostly rely on commission revenues generated by our MGA to fund operations and service debt. Substantially all of our commercial lines business is no longer being written by our Insurance Company Subsidiaries as of June 30, 2024. However, we do plan to continue to write a limited amount of the personal lines on CIC. As of June 30, 2024, the Company no longer expects to write any additional business in WPIC. It is likely that the Company will need to contribute $ 3.0 million to $ 5.0 million of more capital into WPIC before the end of the year in order to maintain its licenses. The Company is currently actively considering the sale of assets and of business operations in order to raise capital with which to repay debt and improve its financial position. We expect to fund any needed contributions with existing cash and investments at the Parent Company or through additional cash obtained through the sale of assets or business operations or additional capital raised. The Company has executed multiple producer agreements that will underwrite a majority of the Company’s commercial lines business. We expect to continue to underwrite the existing personal lines business within our Insurance Company Subsidiaries. We believe that our existing cash, cash equivalents, short-term investments and investment securities balances in addition to any proceeds from the sale of any assets or business operations will be adequate to meet our capital and liquidity needs and the needs of our subsidiaries over the next twelve months. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | 2. Investments 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 and six months ended June 30, 2024 . The Company holds only investment grade securities from high credit quality issuers. The gross unrealized losses of $ 13.6 million as of June 30, 2024, 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 June 30, 2024 and December 31, 2023 were as follows (dollars in thousands): June 30, 2024 Cost or Gross Unrealized Estimated Amortized Cost Gains Losses Fair Value Debt Securities: U.S. Government $ 5,848 $ — $ ( 155 ) $ 5,693 State and local government 23,972 — ( 3,846 ) 20,126 Corporate debt 33,708 — ( 3,602 ) 30,106 Asset-backed securities 37,223 126 ( 347 ) 37,002 Mortgage-backed securities 25,790 — ( 5,162 ) 20,628 Commercial mortgage-backed securities 3,301 — ( 105 ) 3,196 Collateralized mortgage obligations 3,047 — ( 427 ) 2,620 Total debt securities available for sale $ 132,889 $ 126 $ ( 13,644 ) $ 119,371 December 31, 2023 Cost or Gross Unrealized Estimated Amortized Cost Gains Losses Fair Value Debt Securities: U.S. Government $ 5,405 $ 3 $ ( 161 ) $ 5,247 State and local government 24,274 — ( 3,810 ) 20,464 Corporate debt 34,002 — ( 3,507 ) 30,495 Asset-backed securities 38,289 47 ( 584 ) 37,752 Mortgage-backed securities 26,768 — ( 4,641 ) 22,127 Commercial mortgage-backed securities 3,404 — ( 160 ) 3,244 Collateralized mortgage obligations 3,228 — ( 444 ) 2,784 Total debt securities available for sale $ 135,370 $ 50 $ ( 13,307 ) $ 122,113 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): June 30, 2024 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 4 $ 1,769 $ ( 14 ) 8 $ 3,614 $ ( 141 ) 12 $ 5,383 $ ( 155 ) State and local government 1 193 ( 7 ) 114 19,933 ( 3,839 ) 115 20,126 ( 3,846 ) Corporate debt 1 92 ( 8 ) 64 30,014 ( 3,594 ) 65 30,106 ( 3,602 ) Asset-backed securities 1 600 ( 1 ) 8 10,801 ( 346 ) 9 11,401 ( 347 ) Mortgage-backed securities — — — 67 20,628 ( 5,162 ) 67 20,628 ( 5,162 ) Commercial mortgage-backed securities — — — 4 3,196 ( 105 ) 4 3,196 ( 105 ) Collateralized mortgage obligations — — — 30 2,620 ( 427 ) 30 2,620 ( 427 ) Total debt securities available for sale 7 $ 2,654 $ ( 30 ) 295 $ 90,806 $ ( 13,614 ) 302 $ 93,460 $ ( 13,644 ) December 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 1 $ 649 $ ( 7 ) 9 $ 3,400 $ ( 154 ) 10 $ 4,049 $ ( 161 ) State and local government 3 1,193 ( 7 ) 113 19,096 ( 3,803 ) 116 20,289 ( 3,810 ) Corporate debt — — — 66 30,495 ( 3,507 ) 66 30,495 ( 3,507 ) Asset-backed securities 1 1,090 ( 1 ) 21 16,270 ( 583 ) 22 17,360 ( 584 ) Mortgage-backed securities 4 11 ( 1 ) 64 22,116 ( 4,640 ) 68 22,127 ( 4,641 ) Commercial mortgage-backed securities — — — 4 3,225 ( 160 ) 4 3,225 ( 160 ) Collateralized mortgage obligations — — — 32 2,803 ( 444 ) 32 2,803 ( 444 ) Total debt securities available for sale 9 $ 2,943 $ ( 16 ) 309 $ 97,405 $ ( 13,291 ) 318 $ 100,348 $ ( 13,307 ) The Company’s sources of net investment income and losses are as follows (dollars in thousands): Three Months Ended Six Months Ended 2024 2023 2024 2023 Debt securities $ 1,196 $ 1,026 $ 2,421 $ 1,879 Equity securities 12 7 23 18 Cash, cash equivalents and short-term investments 348 381 725 884 Total investment income 1,556 1,414 3,169 2,781 Investment expenses ( 51 ) ( 60 ) ( 112 ) ( 120 ) Net investment income $ 1,505 $ 1,354 $ 3,057 $ 2,661 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 Six Months Ended June 30, 2024 2023 2024 2023 Debt securities: Gross realized gains $ — $ — $ — $ 0 Gross realized losses — — — — Total debt securities — — — — Equity securities: Gross realized gains $ — $ — $ — $ — Gross realized losses ( 118 ) — ( 118 ) — Total equity securities ( 118 ) — ( 118 ) — Total net realized investment gains (losses) $ ( 118 ) $ — $ ( 118 ) $ — There were no proceeds from sales of available-for-sale debt securities for the six months ended June 30, 2024 and 2023, respectively. There were no payables or receivables from securities purchased or sold as of June 30, 2024 and June 30, 2023, respectively. The Company's gross unrealized gains related to its equity investments were $ 354,000 and $ 505,000 as of June 30, 2024 and December 31, 2023 , respectively. The Company’s gross unrealized losses related to its equity investments were $ 537,000 and $ 535,000 as of June 30, 2024 and December 31, 2023, 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 for the three and six months ended June 30, 2024 and 2023 , respectively, related to the Company's other equity investments. These investments are included in Other Assets in the Consolidated Balance Sheets and amounted to $ 750,000 and $ 1.4 million as of June 30, 2024 and December 31, 2023, respectively. The table below summarizes the amortized cost and fair value of available-for-sale debt securities by contractual maturity at June 30, 2024. 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 $ 4,722 $ 4,661 Due after one year through five years 30,953 28,823 Due after five years through ten years 17,183 14,379 Due after ten years 10,670 8,062 Securities with contractual maturities 63,528 55,925 Asset-backed securities 37,223 37,002 Mortgage-backed securities 25,790 20,628 Commercial mortgage-backed securities 3,301 3,196 Collateralized mortgage obligations 3,047 2,620 Total debt securities $ 132,889 $ 119,371 At June 30, 2024 and December 31, 2023 , the Insurance Company Subsidiaries had $ 8.2 million on deposit in trust accounts to meet the deposit requirements of various state insurance departments. At June 30, 2024 and December 31, 2023 , the Company had $ 123.5 million, respectively, held in trust accounts to meet collateral requirements with other third-party insurers, relating to various fronting arrangements. Approximately $ 122.8 million of the trust account balances are for collateral of gross unearned premiums and gross loss reserves of the fronted business on the security guard and installation industries ("Security Program") and the quick service restaurant program. 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. As the unearned premiums run off to zero and loss reserves are paid on these programs, the remaining trust balances will be released and available for general use. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 and December 31, 2023 (dollars in thousands): June 30, 2024 Fair Value Measurements Total Level 1 Level 2 Level 3 Assets: Debt Securities: U.S. Government $ 5,693 $ — $ 5,693 $ — State and local government 20,126 — 20,126 — Corporate debt 30,106 — 30,106 — Asset-backed securities 37,002 — 37,002 — Mortgage-backed securities 20,628 — 20,628 — Commercial mortgage-backed securities 3,196 — 3,196 — Collateralized mortgage obligations 2,620 — 2,620 — Total debt securities 119,371 — 119,371 — Equity Securities 357 137 220 — Short-term investments 23,339 23,339 — — Total marketable investments measured at fair value $ 143,067 $ 23,476 $ 119,591 $ — Investments measured at NAV: Investment in limited partnership 1,303 Total assets measured at fair value $ 144,370 Liabilities: Senior unsecured notes * $ 17,887 $ — $ 17,887 $ — Senior secured notes * 9,310 — — 9,310 Total Liabilities (non-recurring fair value measure) $ 27,197 $ — $ 17,887 $ 9,310 * Carried at face value of debt net of unamortized debt issuance costs on the consolidated balance sheets December 31, 2023 Fair Value Measurements Total Level 1 Level 2 Level 3 Assets: Debt Securities: U.S. Government $ 5,247 $ — $ 5,247 $ — State and local government 20,464 — 20,464 — Corporate debt 30,495 — 30,495 — Asset-backed securities 37,752 — 37,752 — Mortgage-backed securities 22,127 — 22,127 — Commercial mortgage-backed securities 3,244 — 3,244 — Collateralized mortgage obligations 2,784 — 2,784 — Total debt securities 122,113 — 122,113 — Equity securities 896 139 757 — Short-term investments 20,838 20,838 — — Total marketable investments measured at fair value $ 143,847 $ 20,977 $ 122,870 $ — Investments measured at NAV: Investment in limited partnership 1,458 Total assets measured at fair value $ 145,305 Liabilities: Senior unsecured notes * $ 11,791 $ — $ 11,791 $ — Subordinated notes * 9,965 — — 9,965 Total Liabilities (non-recurring fair value measure) $ 21,756 $ — $ 11,791 $ 9,965 * 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 16 % and 15 % of the fair value of the total marketable investments measured at fair value as of June 30, 2024 and December 31, 2023, 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 84 % and 85 % of the fair value of the total marketable investments measured at fair value as of June 30, 2024 and December 31, 2023, 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 June 30, 2024 and December 31, 2023, the fair value of the Senior Secured Notes reported at amortized cost was considered a Level 3 liability in the fair value hierarchy and is entirely comprised of the Company's Senior Secured Notes. In determining the fair value of the Senior Secured Notes outstanding at June 30, 2024 and December 31, 2023, the security attributes (issue date, maturity, coupon, calls, etc.) 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 June 30, 2024 and December 31, 2023 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 as of June 30, 2024 and December 31, 2023. |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 6 Months Ended |
Jun. 30, 2024 | |
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 six months ended June 30, 2024 and 2023 . The activity in deferred policy acquisition costs, net of reinsurance transactions, is as follows (dollars in thousands): Three Months Ended Six Months Ended June 30, 2024 2023 2024 2023 Balance at beginning of period $ 5,663 $ 8,326 $ 6,285 $ 10,290 Deferred policy acquisition costs 414 5,587 6,805 8,344 Amortization of policy acquisition costs ( 1,471 ) ( 4,413 ) ( 8,484 ) ( 9,134 ) Net change ( 1,057 ) 1,174 ( 1,679 ) ( 790 ) Balance at end of period $ 4,606 $ 9,500 $ 4,606 $ 9,500 |
Unpaid Losses and Loss Adjustme
Unpaid Losses and Loss Adjustment Expenses | 6 Months Ended |
Jun. 30, 2024 | |
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 Six months ended 2024 2023 2024 2023 Gross reserves - beginning of period $ 175,826 $ 145,362 $ 174,612 $ 165,539 Less: reinsurance recoverables on unpaid losses ( 73,807 ) ( 61,101 ) ( 70,807 ) ( 82,651 ) Net reserves - beginning of period 102,019 84,261 103,805 82,888 Add: incurred losses and LAE, net of reinsurance: Current period 12,481 18,797 23,462 33,723 Prior period 2,800 522 2,339 ( 691 ) Total net incurred losses and LAE 15,281 19,319 25,801 33,032 Deduct: loss and LAE payments, net of reinsurance: Current period 7,206 7,454 10,068 9,441 Prior period 9,666 7,627 19,110 17,980 Total net loss and LAE payments 16,872 15,081 29,178 27,421 Net reserves - end of period 100,428 88,499 100,428 88,499 Plus: reinsurance recoverables on unpaid losses 74,358 56,505 74,358 56,505 Gross reserves - end of period $ 174,786 $ 145,004 $ 174,786 $ 145,004 Net losses and LAE decreased by $ 4.0 million, or 20.9 %, to $ 15.3 million during the second quarter of 2024, compared to $ 19.3 million for the same period in 2023. The $ 6.3 million decrease in current accident year losses during the second quarter of 2024, compared to the same period in 2023, was mostly due to a significant reduction in net earned premiums described above. The Company’s incurred losses during the three months ended June 30, 2024 included prior-year adverse development of $ 2.8 million. Of the $ 2.8 million of adverse development experience during the second quarter of 2024, $ 2.1 million of adverse development was experienced in the Company's commercial lines of business, mostly related to emergence in the commercial liability lines in the Security Program in the 2021 and 2022 accident years. The remainder was attributed to $ 747,000 of adverse development occurring in the Company's personal lines of business, mostly related to a few high severity claims in the 2023 accident year. The Company had less-than-expected loss emergence during the second quarter of 2023, and recognized $ 411,000 of favorable development in its personal lines of business for accident year 2022. The decrease in net losses and LAE was offset by $ 1.0 million and $ 4.5 million of current accident year losses in the Company's commercial lines and personal lines losses, respectively, which were a result of storm activity in the southwest during the second quarter of 2023. As of June 30, 2024, the Company was $ 9.9 million into the $ 20.0 million layer provided by the adverse development cover of the LPT. There was $ 2.2 million of adverse development relating to 2019 and prior accident years that was covered under the Loss Portfolio Transfer ("LPT") during the second quarter of 2023, resulting in no net development. As of June 30, 2023, the Company was $ 4.6 million into the $ 20.0 million layer provided by the adverse development cover of the LPT. |
Reinsurance
Reinsurance | 6 Months Ended |
Jun. 30, 2024 | |
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 2024 and 2023. The Company ceded specific commercial property risks in excess of $ 400,000 in 2024 and 2023. The Company ceded homeowners specific risks in excess of $ 400,000 and $ 300,000 in 2024 and 2023, respectively. 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 minimum A.M. Best rating, or where the policies are written in a state where the Company is not licensed or for other strategic reasons. On September 30, 2023, the Company entered into a 100% quota share reinsurance agreement with the buyer of the renewal rights of the Security Program. The Company ceded $ 30.9 million of its gross unearned premiums relating to the Security Program in exchange for a 22 % - 27 % ceding commission. On November 1, 2022, the Company entered into a loss portfolio transfer (“LPT”) reinsurance agreement. As of June 30, 2024 , the Company has recorded losses through the $ 5.5 million corridor an d $ 9.9 million i nto the $ 20.0 million layer. As of December 31, 2023, the Company recorded losses through the $ 5.5 million corridor and $ 9.1 million into the $ 20.0 million layer. As of June 30, 2024 , the Consolidated Balance Sheets included $ 3.9 million and $ 6.0 million of reinsurance recoverables on paid and unpaid losses related to the LPT, respectively. As of December 31, 2023, the Consolidated Balance Sheets included $ 3.8 million and $ 10.9 million of reinsurance recoverables on paid and unpaid losses related to the LPT, respectively. 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 Six months ended 2024 2023 2024 2023 Written premiums: Direct $ 19,200 $ 27,183 $ 43,299 $ 51,524 Assumed ( 229 ) 17,491 ( 15 ) 29,364 Ceded ( 5,724 ) ( 15,346 ) ( 14,646 ) ( 33,218 ) Net written premiums $ 13,247 $ 29,328 $ 28,638 $ 47,670 Earned premiums: Direct $ 24,226 $ 23,597 $ 49,034 $ 46,912 Assumed 5,155 12,416 14,579 23,395 Ceded ( 12,715 ) ( 12,830 ) ( 30,060 ) ( 25,172 ) Net earned premiums $ 16,666 $ 23,183 $ 33,553 $ 45,135 Losses and LAE: Direct $ 8,850 $ 24,570 $ 30,832 $ 26,539 Assumed 14,249 4,261 10,985 5,758 Ceded ( 7,818 ) ( 9,512 ) ( 16,016 ) 735 Net Losses and LAE $ 15,281 $ 19,319 $ 25,801 $ 33,032 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Debt | 7. Debt As of June 30, 2024 , the Company’s debt was comprised of two instruments: $ 17.9 million of 9.75 % public senior unsecured notes (the "New Public Notes") which were issued during the third quarter of 2023, and $ 9.3 million of privately placed 12.5 % senior secured notes ("Senior Secured Notes"), which were issued on September 30, 2023. The New Public Notes have substantially the same terms as the 6.75 % public senior unsecured notes (the "Old Public Notes") which matured on September 30, 2023, except for the coupon. A summary of the Company's outstanding debt is as follows (dollars in thousands): As of June 30, 2024 As of December 31, 2023 Gross Debt Unamortized Net Debt Gross Debt Unamortized Net Debt Senior unsecured notes $ 17,887 $ 1,502 $ 16,385 $ 17,887 $ 1,679 $ 16,208 Senior secured notes 9,250 803 8,447 9,750 897 8,853 Total $ 27,137 $ 2,305 $ 24,832 $ 27,637 $ 2,576 $ 25,061 New Public Notes The Company issued $ 17.9 million of New Public Notes during the third quarter of 2023. The new notes bear an interest rate of 9.75 % per annum, payable quarterly at the end of March, June, September and December and mature on September 30, 2028 . The Company may redeem the new notes, in whole or in part, at face value at any time after September 30, 2025. Senior Secured Notes The Company restructured its subordinated notes to Senior Secured Notes with its lender on September 30, 2023. The Senior Secured Notes mature on September 30, 2028 , and bear an interest rate of 12.5 % per annum. Interest is payable quarterly at the end of March, June, September, and December. Quarterly principal payments of $ 250,000 are required starting on December 31, 2023 through September 30, 2028. The Company may redeem the senior secured notes, in whole or in part, for a call premium of $ 1.8 million less 22 % of the interest payment amounts that were paid prior to the date of redemption. The Company accounted for this restructuring as a debt modification because there was no concession made to the lender. The Company had $ 9.3 million of outstanding Senior Secured Notes as of June 30, 2024. Debt issuance costs The Company incurred $ 173,000 of restructuring costs from the lender related to the Senior Secured Notes. These costs were capitalized as debt issuance costs as of September 30, 2023. As of June 30, 2024 , the carrying value of the New Public Notes and Senior Secured Notes were offset by $ 1.5 million and $ 803,000 of capitalized costs, respectively. The debt issuance costs are amortized through interest expense over the life of the loans. Debt covenants The Senior Secured 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. The Senior Secured Notes also require that any proceeds the Company receives from asset sales be used to pay down the principal. Debt covenants have been waived for violation of compliance as of December 31, 2023 and any potential future violations through May 31, 2025. The following table shows the scheduled principal payments of the Company's debt as of June 30, 2024 (dollars in thousands): Year Senior unsecured notes Senior secured notes 2024 500 — 2025 1,000 — 2026 1,000 — 2027 1,000 — 2028 5,750 17,887 Total $ 9,250 $ 17,887 |
Shareholder's Equity
Shareholder's Equity | 6 Months Ended |
Jun. 30, 2024 | |
Stockholders' Equity Note [Abstract] | |
Shareholder's Equity | 8. Shareholder’s Equity Preferred Stock On December 20, 2023, the Company issued $ 6.0 million of its newly designated Series A Preferred Stock (the "Preferred Stock"), no par value, through a private placement of 1,000 shares priced at $ 6,000 per share that matures on June 30, 2026 . The Preferred Stock was sold to Clarkston 91 West LLC (the "Purchaser"), an entity affiliated with Gerald and Jeffrey Hakala, members of the Board of Directors of the Company. Preferred Stock shareholders have no voting rights and optional redemption is only in the control of the Company. The Preferred Stock requires quarterly dividend payments. The Preferred Stock dividend rate is equal to the prime rate of Waterford Bank, N.A. ("Waterford Bank"), or 8.0 %, whichever is higher, plus 200 basis points. As of June 30, 2024 , this equated to an annualized rate of 10.5 %. The Company has the option to redeem the Preferred Stock at the end of any fiscal quarter, in whole or in part, at a price equal to issue price, plus the amount that would result in a 20.0 %, compounded annually, annualized return to the holder (inclusive of the dividends paid), on the portion being redeemed. On the maturity date, each outstanding share of the Preferred Stock, that has not otherwise been redeemed, shall, without any further action by the holders, automatically convert into 4,000 shares of the Company's common stock, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the common stock that occur after the initial issue date. As of June 30, 2024 and December 31, 2023 , the Company had 1,000 issued and outstanding shares of Preferred Stock, respectively. Common Stock As of June 30, 2024 and December 31, 2023 , the Company had 12,222,881 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. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 9. Earnings Per Share Basic and diluted earnings (loss) per share are computed by dividing net income allocable to common shareholders by the weighted average number of common shares outstanding during the period. The dividends on preferred stock are deducted from the net income to arrive at net income allocable to common shareholders. 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 Six months ended 2024 2023 2024 2023 Net income (loss) $ ( 3,792 ) $ ( 4,739 ) $ ( 3,561 ) $ ( 3,738 ) Preferred stock dividends 158 — $ 315 — Net income (loss) allocable to common shareholders $ ( 3,950 ) $ ( 4,739 ) $ ( 3,876 ) $ ( 3,738 ) Weighted average common shares, basic and diluted * 12,222,881 12,220,331 12,222,881 12,218,102 Earnings (loss) per common share, basic and diluted $ ( 0.32 ) $ ( 0.39 ) $ ( 0.32 ) $ ( 0.31 ) * The preferred shares that may be convertible into a total of 4,000,000 common shares were anti-dilutive and thus did not impact the diluted earnings per share calculation. There were no unvested restricted stock units as of June 30, 2024. The non-vested shares of stock options were anti-dilutive as of June 30, 2024. The non-vested shares of the restricted stock units and stock options were anti-dilutive as of June 30, 2023. Therefore, the basic and diluted weighted average common shares are equal for the three and six months ended June 30, 2024 and 2023. |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | 10. 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 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 grant date fair 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 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 grant date fair value of these options is $ 290,000 , which is being expensed ratably over the vesting period. In 2018, the Company issued 70,000 of restricted stock units (“RSUs”) to various employees to be settled in shares of common stock, which were valued at $ 404,000 on the date of the grant. The Company recorded $ 0 and $ 4,000 of compensation expense related to the RSUs for the three months ended June 30, 2024 and 2023 , respectively. The Company recorded $ 0 and $ 17,000 of compensation expense related to the RSUs for the six months ended June 30, 2024 and 2023 , respectively. There were no unvested RSUs remaining as of June 30, 2024. The Company recorded $ 38,000 and $ 44,000 of compensation expense for the three months ended June 30, 2024 and 2023 , respectively, related to the Company's stock options granted. The Company recorded $ 70,000 and $ 86,000 of compensation expense for the six months ended June 30, 2024 and 2023 , respectively, related to the Company's stock options granted. There were 424,000 options outstanding and unvested as of June 30, 2024 , which will generate an estimated future expense of $ 374,000 . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. 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 | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Segment Information | 12. 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 chief operating decision maker in deciding how to allocate resources to its segments and in assessing its performance. In assessing performance of its operating segments, the Company’s chief operating decision maker, the Chief Executive Officer, reviews 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 Texas, Michigan, Oklahoma and Indiana. For the six months ended June 30, 2024 and 2023 , gross written premiums attributable to these four states were 85.1 % and 47.1 %, 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 segments, the Company maintains a Corporate and Other category to reconcile segment results to the consolidated totals. The Corporate and Other category includes: (i) corporate operating expenses such as salaries and related benefits of the Company’s executive management team, some 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 $ 6,782 $ 12,189 $ 18,971 $ — $ — $ — $ 18,971 Net written premiums $ 4,285 $ 8,962 $ 13,247 $ — $ — $ — $ 13,247 Net earned premiums $ 8,681 $ 7,985 $ 16,666 $ — $ — $ — $ 16,666 Agency commission income — — — 13,688 — ( 4,857 ) 8,831 Other income 19 20 39 83 38 — 160 Segment revenue 8,700 8,005 16,705 13,771 38 ( 4,857 ) 25,657 Losses and LAE, net 6,906 8,375 15,281 — — — 15,281 Policy acquisition costs 1,155 2,236 3,391 11,005 — ( 3,916 ) 10,480 Operating expenses 1,050 926 1,976 2,046 234 — 4,256 Segment expenses 9,111 11,537 20,648 13,051 234 ( 3,916 ) 30,017 Segment gain (loss) $ ( 411 ) $ ( 3,532 ) $ ( 3,943 ) $ 720 $ ( 196 ) $ ( 941 ) $ ( 4,360 ) Investment income 1,505 1,505 Net realized investment gains (losses) ( 118 ) ( 118 ) Change in fair value of equity securities ( 196 ) ( 196 ) Interest expense ( 869 ) ( 869 ) Income (loss) before equity earnings in Affiliate and income taxes $ ( 411 ) $ ( 3,532 ) $ ( 3,943 ) $ 720 $ 126 $ ( 941 ) $ ( 4,038 ) Three months ended Commercial Personal Total Wholesale Corporate Eliminations Total Gross written premiums $ 34,761 $ 9,913 $ 44,674 $ — $ — $ — $ 44,674 Net written premiums $ 20,485 $ 8,843 $ 29,328 $ — $ — $ — $ 29,328 Net earned premiums $ 17,487 $ 5,696 $ 23,183 $ — $ — $ — $ 23,183 Agency commission income — — — 560 — ( 349 ) 211 Other income 56 23 79 34 74 — 187 Segment revenue 17,543 5,719 23,262 594 74 ( 349 ) 23,581 Losses and LAE, net 13,597 5,722 19,319 — — — 19,319 Policy acquisition costs 2,966 1,453 4,419 349 — ( 355 ) 4,413 Operating expenses 3,600 792 4,392 365 357 — 5,114 Segment expenses 20,163 7,967 28,130 714 357 ( 355 ) 28,846 Segment gain (loss) $ ( 2,620 ) $ ( 2,248 ) $ ( 4,868 ) $ ( 120 ) $ ( 283 ) $ 6 $ ( 5,265 ) Investment income 1,354 1,354 Change in fair value of equity securities ( 12 ) ( 12 ) Interest expense ( 820 ) ( 820 ) Income (loss) before equity earnings in Affiliate and income taxes $ ( 2,620 ) $ ( 2,248 ) $ ( 4,868 ) $ ( 120 ) $ 239 $ 6 $ ( 4,743 ) Six months ended Commercial Personal Total Wholesale Corporate Eliminations Total Gross written premiums $ 19,544 $ 23,740 $ 43,284 $ — $ — $ — $ 43,284 Net written premiums $ 12,572 $ 16,066 $ 28,638 $ — $ — $ — $ 28,638 Net earned premiums $ 17,478 $ 16,075 $ 33,553 $ — $ — $ — $ 33,553 Agency commission income $ — $ — $ — $ 24,282 $ — $ ( 11,115 ) $ 13,167 Other income 69 48 117 194 109 — 420 Segment revenue 17,547 16,123 33,670 24,476 109 ( 11,115 ) 47,140 Losses and LAE, net 13,672 12,129 25,801 — — — 25,801 Policy acquisition costs 2,302 4,249 6,551 20,124 — ( 9,182 ) 17,493 Operating expenses 2,798 1,897 4,695 3,679 377 — 8,751 Segment expenses 18,772 18,275 37,047 23,803 377 ( 9,182 ) 52,045 Segment gain (loss) $ ( 1,225 ) $ ( 2,152 ) $ ( 3,377 ) $ 673 $ ( 268 ) $ ( 1,933 ) $ ( 4,905 ) Investment income 3,057 3,057 Net realized investment gains (losses) ( 118 ) ( 118 ) Change in fair value of equity securities ( 153 ) ( 153 ) Interest expense ( 1,746 ) ( 1,746 ) Income (loss) before equity earnings in Affiliate and income taxes $ ( 1,225 ) $ ( 2,152 ) $ ( 3,377 ) $ 673 $ 772 $ ( 1,933 ) $ ( 3,865 ) Six months ended Commercial Personal Total Wholesale Corporate Eliminations Total Gross written premiums $ 63,736 $ 17,152 $ 80,888 $ — $ — $ — $ 80,888 Net written premiums $ 32,726 $ 14,944 $ 47,670 $ — $ — $ — $ 47,670 Net earned premiums $ 34,610 $ 10,525 $ 45,135 $ — $ — $ — $ 45,135 Agency commission income $ — $ — $ — $ 1,390 $ — $ ( 749 ) $ 641 Other income 108 46 154 83 146 — 383 Segment revenue 34,718 10,571 45,289 1,473 146 ( 749 ) 46,159 Losses and LAE, net 24,144 8,888 33,032 — — — 33,032 Policy acquisition costs 6,162 2,842 9,004 897 — ( 767 ) 9,134 Operating expenses 6,628 1,384 8,012 717 664 — 9,393 Segment expenses 36,934 13,114 50,048 1,614 664 ( 767 ) 51,559 Segment gain (loss) $ ( 2,216 ) $ ( 2,543 ) $ ( 4,759 ) $ ( 141 ) $ ( 518 ) $ 18 $ ( 5,400 ) Investment income 2,661 2,661 Change in fair value of equity securities 682 682 Interest expense ( 1,506 ) ( 1,506 ) Income (loss) before equity earnings in Affiliate and income taxes $ ( 2,216 ) $ ( 2,543 ) $ ( 4,759 ) $ ( 141 ) $ 1,319 $ 18 $ ( 3,563 ) |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. 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 June 30, 2024 . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
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"), Conifer Insurance Services ("CIS"), which is our managing general agency ("MGA"), formerly known as 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, 2023, as filed with the SEC. The results of operations for the six months ended June 30, 2024, are not necessarily indicative of the results expected for the year ended December 31, 2024 . |
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 almost all 50 states in the United States of America (“U.S.”). The Company has been in the process of strategically shifting from mostly underwriting insurance products (generating revenues through premiums) to mostly producing, or selling, insurance products through its MGA. Utilizing its existing relationships with retail agencies and other agencies, in the first quarter of 2024, the Company began producing business that was directly underwritten by a third-party insurer. By the end of the second quarter, this shift was mostly complete with the expansion of having two third-party insurers to underwrite substantially all of the commercial lines business previously underwritten by the Insurance Company Subsidiaries. The Company is currently actively considering the sale of assets and of business operations in order to raise capital with which to repay debt and improve its financial position. 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. |
Accounting Guidance Not Yet Adopted | Accounting Guidance Not Yet Adopted 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. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). This guidance is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss to assess potential future cash flows for each reportable segment and the entity as a whole. The amendments expand a public entity's segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), clarifying when an entity may report one or more additional measures to assess segment performance, requiring enhanced interim disclosures, providing new disclosure requirements for entities with a single reportable segment, and requiring other new disclosures. ASU 2023-07 is effective for fiscal years beginning after December 31, 2024. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740). ASU 2023-09 requires public business entities to disclose additional information with respect to the reconciliation of the effective tax rate to the statutory rate. Additionally, public business entities will need to disaggregate federal, state and foreign taxes paid in their financial statements. ASU 2023-09 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements. |
Company Liquidity | Company Liquidity We conduct our business operations primarily through our Insurance Company Subsidiaries and MGA. Our ability to service debt, and pay administrative expenses has been primarily reliant upon our intercompany service fees paid by the Insurance Company Subsidiaries and MGA to the holding company for management, administrative, and information technology services provided to the Insurance Company Subsidiaries and MGA by the Parent Company. The Parent Company may receive dividends from the Insurance Company Subsidiaries; however, this is not the primary means in which the holding company supports its funding as state insurance laws restrict the ability of our Insurance Company Subsidiaries to declare dividends to the Parent Company, and we do not anticipate any dividends being paid to us from our Insurance Company Subsidiaries during 2024 and 2025. The Parent Company may receive dividends from our MGA without regulatory restrictions. Due to significant losses in 2023, much of which was attributable to strengthening reserves and severe storm activity affecting the Oklahoma homeowners business, both Insurance Company Subsidiaries lack sufficient capital to continue to underwrite the volume of business they have historically written. Accordingly, in the first quarter of 2024, management implemented a strategic shift in which the Company began utilizing third-party insurers to mostly rely on commission revenues generated by our MGA to fund operations and service debt. Substantially all of our commercial lines business is no longer being written by our Insurance Company Subsidiaries as of June 30, 2024. However, we do plan to continue to write a limited amount of the personal lines on CIC. As of June 30, 2024, the Company no longer expects to write any additional business in WPIC. It is likely that the Company will need to contribute $ 3.0 million to $ 5.0 million of more capital into WPIC before the end of the year in order to maintain its licenses. The Company is currently actively considering the sale of assets and of business operations in order to raise capital with which to repay debt and improve its financial position. We expect to fund any needed contributions with existing cash and investments at the Parent Company or through additional cash obtained through the sale of assets or business operations or additional capital raised. The Company has executed multiple producer agreements that will underwrite a majority of the Company’s commercial lines business. We expect to continue to underwrite the existing personal lines business within our Insurance Company Subsidiaries. We believe that our existing cash, cash equivalents, short-term investments and investment securities balances in addition to any proceeds from the sale of any assets or business operations will be adequate to meet our capital and liquidity needs and the needs of our subsidiaries over the next twelve months. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 and December 31, 2023 were as follows (dollars in thousands): June 30, 2024 Cost or Gross Unrealized Estimated Amortized Cost Gains Losses Fair Value Debt Securities: U.S. Government $ 5,848 $ — $ ( 155 ) $ 5,693 State and local government 23,972 — ( 3,846 ) 20,126 Corporate debt 33,708 — ( 3,602 ) 30,106 Asset-backed securities 37,223 126 ( 347 ) 37,002 Mortgage-backed securities 25,790 — ( 5,162 ) 20,628 Commercial mortgage-backed securities 3,301 — ( 105 ) 3,196 Collateralized mortgage obligations 3,047 — ( 427 ) 2,620 Total debt securities available for sale $ 132,889 $ 126 $ ( 13,644 ) $ 119,371 December 31, 2023 Cost or Gross Unrealized Estimated Amortized Cost Gains Losses Fair Value Debt Securities: U.S. Government $ 5,405 $ 3 $ ( 161 ) $ 5,247 State and local government 24,274 — ( 3,810 ) 20,464 Corporate debt 34,002 — ( 3,507 ) 30,495 Asset-backed securities 38,289 47 ( 584 ) 37,752 Mortgage-backed securities 26,768 — ( 4,641 ) 22,127 Commercial mortgage-backed securities 3,404 — ( 160 ) 3,244 Collateralized mortgage obligations 3,228 — ( 444 ) 2,784 Total debt securities available for sale $ 135,370 $ 50 $ ( 13,307 ) $ 122,113 |
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): June 30, 2024 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 4 $ 1,769 $ ( 14 ) 8 $ 3,614 $ ( 141 ) 12 $ 5,383 $ ( 155 ) State and local government 1 193 ( 7 ) 114 19,933 ( 3,839 ) 115 20,126 ( 3,846 ) Corporate debt 1 92 ( 8 ) 64 30,014 ( 3,594 ) 65 30,106 ( 3,602 ) Asset-backed securities 1 600 ( 1 ) 8 10,801 ( 346 ) 9 11,401 ( 347 ) Mortgage-backed securities — — — 67 20,628 ( 5,162 ) 67 20,628 ( 5,162 ) Commercial mortgage-backed securities — — — 4 3,196 ( 105 ) 4 3,196 ( 105 ) Collateralized mortgage obligations — — — 30 2,620 ( 427 ) 30 2,620 ( 427 ) Total debt securities available for sale 7 $ 2,654 $ ( 30 ) 295 $ 90,806 $ ( 13,614 ) 302 $ 93,460 $ ( 13,644 ) December 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 1 $ 649 $ ( 7 ) 9 $ 3,400 $ ( 154 ) 10 $ 4,049 $ ( 161 ) State and local government 3 1,193 ( 7 ) 113 19,096 ( 3,803 ) 116 20,289 ( 3,810 ) Corporate debt — — — 66 30,495 ( 3,507 ) 66 30,495 ( 3,507 ) Asset-backed securities 1 1,090 ( 1 ) 21 16,270 ( 583 ) 22 17,360 ( 584 ) Mortgage-backed securities 4 11 ( 1 ) 64 22,116 ( 4,640 ) 68 22,127 ( 4,641 ) Commercial mortgage-backed securities — — — 4 3,225 ( 160 ) 4 3,225 ( 160 ) Collateralized mortgage obligations — — — 32 2,803 ( 444 ) 32 2,803 ( 444 ) Total debt securities available for sale 9 $ 2,943 $ ( 16 ) 309 $ 97,405 $ ( 13,291 ) 318 $ 100,348 $ ( 13,307 ) |
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 Six Months Ended 2024 2023 2024 2023 Debt securities $ 1,196 $ 1,026 $ 2,421 $ 1,879 Equity securities 12 7 23 18 Cash, cash equivalents and short-term investments 348 381 725 884 Total investment income 1,556 1,414 3,169 2,781 Investment expenses ( 51 ) ( 60 ) ( 112 ) ( 120 ) Net investment income $ 1,505 $ 1,354 $ 3,057 $ 2,661 |
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 Six Months Ended June 30, 2024 2023 2024 2023 Debt securities: Gross realized gains $ — $ — $ — $ 0 Gross realized losses — — — — Total debt securities — — — — Equity securities: Gross realized gains $ — $ — $ — $ — Gross realized losses ( 118 ) — ( 118 ) — Total equity securities ( 118 ) — ( 118 ) — Total net realized investment gains (losses) $ ( 118 ) $ — $ ( 118 ) $ — |
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 June 30, 2024. 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 $ 4,722 $ 4,661 Due after one year through five years 30,953 28,823 Due after five years through ten years 17,183 14,379 Due after ten years 10,670 8,062 Securities with contractual maturities 63,528 55,925 Asset-backed securities 37,223 37,002 Mortgage-backed securities 25,790 20,628 Commercial mortgage-backed securities 3,301 3,196 Collateralized mortgage obligations 3,047 2,620 Total debt securities $ 132,889 $ 119,371 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 and December 31, 2023 (dollars in thousands): June 30, 2024 Fair Value Measurements Total Level 1 Level 2 Level 3 Assets: Debt Securities: U.S. Government $ 5,693 $ — $ 5,693 $ — State and local government 20,126 — 20,126 — Corporate debt 30,106 — 30,106 — Asset-backed securities 37,002 — 37,002 — Mortgage-backed securities 20,628 — 20,628 — Commercial mortgage-backed securities 3,196 — 3,196 — Collateralized mortgage obligations 2,620 — 2,620 — Total debt securities 119,371 — 119,371 — Equity Securities 357 137 220 — Short-term investments 23,339 23,339 — — Total marketable investments measured at fair value $ 143,067 $ 23,476 $ 119,591 $ — Investments measured at NAV: Investment in limited partnership 1,303 Total assets measured at fair value $ 144,370 Liabilities: Senior unsecured notes * $ 17,887 $ — $ 17,887 $ — Senior secured notes * 9,310 — — 9,310 Total Liabilities (non-recurring fair value measure) $ 27,197 $ — $ 17,887 $ 9,310 * Carried at face value of debt net of unamortized debt issuance costs on the consolidated balance sheets December 31, 2023 Fair Value Measurements Total Level 1 Level 2 Level 3 Assets: Debt Securities: U.S. Government $ 5,247 $ — $ 5,247 $ — State and local government 20,464 — 20,464 — Corporate debt 30,495 — 30,495 — Asset-backed securities 37,752 — 37,752 — Mortgage-backed securities 22,127 — 22,127 — Commercial mortgage-backed securities 3,244 — 3,244 — Collateralized mortgage obligations 2,784 — 2,784 — Total debt securities 122,113 — 122,113 — Equity securities 896 139 757 — Short-term investments 20,838 20,838 — — Total marketable investments measured at fair value $ 143,847 $ 20,977 $ 122,870 $ — Investments measured at NAV: Investment in limited partnership 1,458 Total assets measured at fair value $ 145,305 Liabilities: Senior unsecured notes * $ 11,791 $ — $ 11,791 $ — Subordinated notes * 9,965 — — 9,965 Total Liabilities (non-recurring fair value measure) $ 21,756 $ — $ 11,791 $ 9,965 * 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) | 6 Months Ended |
Jun. 30, 2024 | |
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 Six Months Ended June 30, 2024 2023 2024 2023 Balance at beginning of period $ 5,663 $ 8,326 $ 6,285 $ 10,290 Deferred policy acquisition costs 414 5,587 6,805 8,344 Amortization of policy acquisition costs ( 1,471 ) ( 4,413 ) ( 8,484 ) ( 9,134 ) Net change ( 1,057 ) 1,174 ( 1,679 ) ( 790 ) Balance at end of period $ 4,606 $ 9,500 $ 4,606 $ 9,500 |
Unpaid Losses and Loss Adjust_2
Unpaid Losses and Loss Adjustment Expenses (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 Six months ended 2024 2023 2024 2023 Gross reserves - beginning of period $ 175,826 $ 145,362 $ 174,612 $ 165,539 Less: reinsurance recoverables on unpaid losses ( 73,807 ) ( 61,101 ) ( 70,807 ) ( 82,651 ) Net reserves - beginning of period 102,019 84,261 103,805 82,888 Add: incurred losses and LAE, net of reinsurance: Current period 12,481 18,797 23,462 33,723 Prior period 2,800 522 2,339 ( 691 ) Total net incurred losses and LAE 15,281 19,319 25,801 33,032 Deduct: loss and LAE payments, net of reinsurance: Current period 7,206 7,454 10,068 9,441 Prior period 9,666 7,627 19,110 17,980 Total net loss and LAE payments 16,872 15,081 29,178 27,421 Net reserves - end of period 100,428 88,499 100,428 88,499 Plus: reinsurance recoverables on unpaid losses 74,358 56,505 74,358 56,505 Gross reserves - end of period $ 174,786 $ 145,004 $ 174,786 $ 145,004 |
Reinsurance (Tables)
Reinsurance (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 Six months ended 2024 2023 2024 2023 Written premiums: Direct $ 19,200 $ 27,183 $ 43,299 $ 51,524 Assumed ( 229 ) 17,491 ( 15 ) 29,364 Ceded ( 5,724 ) ( 15,346 ) ( 14,646 ) ( 33,218 ) Net written premiums $ 13,247 $ 29,328 $ 28,638 $ 47,670 Earned premiums: Direct $ 24,226 $ 23,597 $ 49,034 $ 46,912 Assumed 5,155 12,416 14,579 23,395 Ceded ( 12,715 ) ( 12,830 ) ( 30,060 ) ( 25,172 ) Net earned premiums $ 16,666 $ 23,183 $ 33,553 $ 45,135 Losses and LAE: Direct $ 8,850 $ 24,570 $ 30,832 $ 26,539 Assumed 14,249 4,261 10,985 5,758 Ceded ( 7,818 ) ( 9,512 ) ( 16,016 ) 735 Net Losses and LAE $ 15,281 $ 19,319 $ 25,801 $ 33,032 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Senior Debt | A summary of the Company's outstanding debt is as follows (dollars in thousands): As of June 30, 2024 As of December 31, 2023 Gross Debt Unamortized Net Debt Gross Debt Unamortized Net Debt Senior unsecured notes $ 17,887 $ 1,502 $ 16,385 $ 17,887 $ 1,679 $ 16,208 Senior secured notes 9,250 803 8,447 9,750 897 8,853 Total $ 27,137 $ 2,305 $ 24,832 $ 27,637 $ 2,576 $ 25,061 |
Summary of Scheduled Principal Payments of Company's Debt | The following table shows the scheduled principal payments of the Company's debt as of June 30, 2024 (dollars in thousands): Year Senior unsecured notes Senior secured notes 2024 500 — 2025 1,000 — 2026 1,000 — 2027 1,000 — 2028 5,750 17,887 Total $ 9,250 $ 17,887 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 Six months ended 2024 2023 2024 2023 Net income (loss) $ ( 3,792 ) $ ( 4,739 ) $ ( 3,561 ) $ ( 3,738 ) Preferred stock dividends 158 — $ 315 — Net income (loss) allocable to common shareholders $ ( 3,950 ) $ ( 4,739 ) $ ( 3,876 ) $ ( 3,738 ) Weighted average common shares, basic and diluted * 12,222,881 12,220,331 12,222,881 12,218,102 Earnings (loss) per common share, basic and diluted $ ( 0.32 ) $ ( 0.39 ) $ ( 0.32 ) $ ( 0.31 ) * The preferred shares that may be convertible into a total of 4,000,000 common shares were anti-dilutive and thus did not impact the diluted earnings per share calculation. There were no unvested restricted stock units as of June 30, 2024. The non-vested shares of stock options were anti-dilutive as of June 30, 2024. The non-vested shares of the restricted stock units and stock options were anti-dilutive as of June 30, 2023. Therefore, the basic and diluted weighted average common shares are equal for the three and six months ended June 30, 2024 and 2023. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 $ 6,782 $ 12,189 $ 18,971 $ — $ — $ — $ 18,971 Net written premiums $ 4,285 $ 8,962 $ 13,247 $ — $ — $ — $ 13,247 Net earned premiums $ 8,681 $ 7,985 $ 16,666 $ — $ — $ — $ 16,666 Agency commission income — — — 13,688 — ( 4,857 ) 8,831 Other income 19 20 39 83 38 — 160 Segment revenue 8,700 8,005 16,705 13,771 38 ( 4,857 ) 25,657 Losses and LAE, net 6,906 8,375 15,281 — — — 15,281 Policy acquisition costs 1,155 2,236 3,391 11,005 — ( 3,916 ) 10,480 Operating expenses 1,050 926 1,976 2,046 234 — 4,256 Segment expenses 9,111 11,537 20,648 13,051 234 ( 3,916 ) 30,017 Segment gain (loss) $ ( 411 ) $ ( 3,532 ) $ ( 3,943 ) $ 720 $ ( 196 ) $ ( 941 ) $ ( 4,360 ) Investment income 1,505 1,505 Net realized investment gains (losses) ( 118 ) ( 118 ) Change in fair value of equity securities ( 196 ) ( 196 ) Interest expense ( 869 ) ( 869 ) Income (loss) before equity earnings in Affiliate and income taxes $ ( 411 ) $ ( 3,532 ) $ ( 3,943 ) $ 720 $ 126 $ ( 941 ) $ ( 4,038 ) Three months ended Commercial Personal Total Wholesale Corporate Eliminations Total Gross written premiums $ 34,761 $ 9,913 $ 44,674 $ — $ — $ — $ 44,674 Net written premiums $ 20,485 $ 8,843 $ 29,328 $ — $ — $ — $ 29,328 Net earned premiums $ 17,487 $ 5,696 $ 23,183 $ — $ — $ — $ 23,183 Agency commission income — — — 560 — ( 349 ) 211 Other income 56 23 79 34 74 — 187 Segment revenue 17,543 5,719 23,262 594 74 ( 349 ) 23,581 Losses and LAE, net 13,597 5,722 19,319 — — — 19,319 Policy acquisition costs 2,966 1,453 4,419 349 — ( 355 ) 4,413 Operating expenses 3,600 792 4,392 365 357 — 5,114 Segment expenses 20,163 7,967 28,130 714 357 ( 355 ) 28,846 Segment gain (loss) $ ( 2,620 ) $ ( 2,248 ) $ ( 4,868 ) $ ( 120 ) $ ( 283 ) $ 6 $ ( 5,265 ) Investment income 1,354 1,354 Change in fair value of equity securities ( 12 ) ( 12 ) Interest expense ( 820 ) ( 820 ) Income (loss) before equity earnings in Affiliate and income taxes $ ( 2,620 ) $ ( 2,248 ) $ ( 4,868 ) $ ( 120 ) $ 239 $ 6 $ ( 4,743 ) Six months ended Commercial Personal Total Wholesale Corporate Eliminations Total Gross written premiums $ 19,544 $ 23,740 $ 43,284 $ — $ — $ — $ 43,284 Net written premiums $ 12,572 $ 16,066 $ 28,638 $ — $ — $ — $ 28,638 Net earned premiums $ 17,478 $ 16,075 $ 33,553 $ — $ — $ — $ 33,553 Agency commission income $ — $ — $ — $ 24,282 $ — $ ( 11,115 ) $ 13,167 Other income 69 48 117 194 109 — 420 Segment revenue 17,547 16,123 33,670 24,476 109 ( 11,115 ) 47,140 Losses and LAE, net 13,672 12,129 25,801 — — — 25,801 Policy acquisition costs 2,302 4,249 6,551 20,124 — ( 9,182 ) 17,493 Operating expenses 2,798 1,897 4,695 3,679 377 — 8,751 Segment expenses 18,772 18,275 37,047 23,803 377 ( 9,182 ) 52,045 Segment gain (loss) $ ( 1,225 ) $ ( 2,152 ) $ ( 3,377 ) $ 673 $ ( 268 ) $ ( 1,933 ) $ ( 4,905 ) Investment income 3,057 3,057 Net realized investment gains (losses) ( 118 ) ( 118 ) Change in fair value of equity securities ( 153 ) ( 153 ) Interest expense ( 1,746 ) ( 1,746 ) Income (loss) before equity earnings in Affiliate and income taxes $ ( 1,225 ) $ ( 2,152 ) $ ( 3,377 ) $ 673 $ 772 $ ( 1,933 ) $ ( 3,865 ) Six months ended Commercial Personal Total Wholesale Corporate Eliminations Total Gross written premiums $ 63,736 $ 17,152 $ 80,888 $ — $ — $ — $ 80,888 Net written premiums $ 32,726 $ 14,944 $ 47,670 $ — $ — $ — $ 47,670 Net earned premiums $ 34,610 $ 10,525 $ 45,135 $ — $ — $ — $ 45,135 Agency commission income $ — $ — $ — $ 1,390 $ — $ ( 749 ) $ 641 Other income 108 46 154 83 146 — 383 Segment revenue 34,718 10,571 45,289 1,473 146 ( 749 ) 46,159 Losses and LAE, net 24,144 8,888 33,032 — — — 33,032 Policy acquisition costs 6,162 2,842 9,004 897 — ( 767 ) 9,134 Operating expenses 6,628 1,384 8,012 717 664 — 9,393 Segment expenses 36,934 13,114 50,048 1,614 664 ( 767 ) 51,559 Segment gain (loss) $ ( 2,216 ) $ ( 2,543 ) $ ( 4,759 ) $ ( 141 ) $ ( 518 ) $ 18 $ ( 5,400 ) Investment income 2,661 2,661 Change in fair value of equity securities 682 682 Interest expense ( 1,506 ) ( 1,506 ) Income (loss) before equity earnings in Affiliate and income taxes $ ( 2,216 ) $ ( 2,543 ) $ ( 4,759 ) $ ( 141 ) $ 1,319 $ 18 $ ( 3,563 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2024 USD ($) Class_business State | |
Accounting Policies [Line Items] | |
Non Controlling Interest | 50% |
Number of types of business | Class_business | 3 |
Number of states in which entity operates | State | 50 |
Capital contribution to maintain licenses minimum | $ 3 |
Capital contribution to maintain licenses maximum | $ 5 |
Sale of Renewal Rights - Additi
Sale of Renewal Rights - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Gross earned premiums | $ 24,226 | $ 23,597 | $ 49,034 | $ 46,912 | |
Ceded Premiums Written | $ 5,724 | $ 15,346 | $ 14,646 | $ 33,218 | |
100% Quota Share Reinsurance Agreement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Ceded Premiums Written | $ 30,900 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |||||
Gross unrealized gain (loss) on available for sale securities | $ 13,600,000 | ||||
Proceeds from sale of debt securities, available-for-sale | 0 | $ 0 | |||
Amount payable for securities purchased | $ 0 | $ 0 | 0 | 0 | |
Amount receivable for securities sold | 0 | 0 | 0 | $ 0 | |
Gross unrealized gains | 354,000 | $ 505,000 | |||
Gross unrealized losses | 537,000 | 535,000 | |||
Other than temporary impairments losses, investments | 0 | $ 0 | |||
Investments | 750,000 | 750,000 | 1,400,000 | ||
Deposits held in trust accounts | 8,200,000 | 8,200,000 | 8,200,000 | ||
Deposits, held in trust for collateral requirements | $ 123,500,000 | 123,500,000 | $ 123,500,000 | ||
Collateral of gross unearned premiums and gross loss reserves | 122,800,000 | ||||
Unearned premiums run off | $ 0 |
Investments - Available-for-sal
Investments - Available-for-sale Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | $ 132,889 | $ 135,370 |
Debt securities, Gross Unrealized Gain | 126 | 50 |
Debt securities, Gross Unrealized Losses | (13,644) | (13,307) |
Debt securities, Estimated Fair Value | 119,371 | 122,113 |
U.S. Government | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | 5,848 | 5,405 |
Debt securities, Gross Unrealized Gain | 0 | 3 |
Debt securities, Gross Unrealized Losses | (155) | (161) |
Debt securities, Estimated Fair Value | 5,693 | 5,247 |
State and local government | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | 23,972 | 24,274 |
Debt securities, Gross Unrealized Gain | 0 | 0 |
Debt securities, Gross Unrealized Losses | (3,846) | (3,810) |
Debt securities, Estimated Fair Value | 20,126 | 20,464 |
Corporate debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | 33,708 | 34,002 |
Debt securities, Gross Unrealized Gain | 0 | 0 |
Debt securities, Gross Unrealized Losses | (3,602) | (3,507) |
Debt securities, Estimated Fair Value | 30,106 | 30,495 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | 37,223 | 38,289 |
Debt securities, Gross Unrealized Gain | 126 | 47 |
Debt securities, Gross Unrealized Losses | (347) | (584) |
Debt securities, Estimated Fair Value | 37,002 | 37,752 |
Mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | 25,790 | 26,768 |
Debt securities, Gross Unrealized Gain | 0 | 0 |
Debt securities, Gross Unrealized Losses | (5,162) | (4,641) |
Debt securities, Estimated Fair Value | 20,628 | 22,127 |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | 3,301 | 3,404 |
Debt securities, Gross Unrealized Gain | 0 | 0 |
Debt securities, Gross Unrealized Losses | (105) | (160) |
Debt securities, Estimated Fair Value | 3,196 | 3,244 |
Collateralized mortgage obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, Cost or Amortized Cost | 3,047 | 3,228 |
Debt securities, Gross Unrealized Gain | 0 | 0 |
Debt securities, Gross Unrealized Losses | (427) | (444) |
Debt securities, Estimated Fair Value | $ 2,620 | $ 2,784 |
Investments - Available-for-s_2
Investments - Available-for-sale Securities in Unrealized Loss Positions (Details) $ in Thousands | Jun. 30, 2024 USD ($) Security | Dec. 31, 2023 USD ($) Security |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | ||
Debt securities, less than 12 months, number of issues | Security | 7 | 9 |
Debt securities, greater than 12 months, number of issues | Security | 295 | 309 |
Debt securities, number of issues | Security | 302 | 318 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 2,654 | $ 2,943 |
Debt securities, greater than 12 months, fair value | 90,806 | 97,405 |
Debt securities, fair value | 93,460 | 100,348 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | (30) | (16) |
Debt securities, greater than 12 months, unrealized losses | (13,614) | (13,291) |
Debt securities, total unrealized losses | $ (13,644) | $ (13,307) |
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 | 4 | 1 |
Debt securities, greater than 12 months, number of issues | Security | 8 | 9 |
Debt securities, number of issues | Security | 12 | 10 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 1,769 | $ 649 |
Debt securities, greater than 12 months, fair value | 3,614 | 3,400 |
Debt securities, fair value | 5,383 | 4,049 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | (14) | (7) |
Debt securities, greater than 12 months, unrealized losses | (141) | (154) |
Debt securities, total unrealized losses | $ (155) | $ (161) |
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 | 1 | 3 |
Debt securities, greater than 12 months, number of issues | Security | 114 | 113 |
Debt securities, number of issues | Security | 115 | 116 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 193 | $ 1,193 |
Debt securities, greater than 12 months, fair value | 19,933 | 19,096 |
Debt securities, fair value | 20,126 | 20,289 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | (7) | (7) |
Debt securities, greater than 12 months, unrealized losses | (3,839) | (3,803) |
Debt securities, total unrealized losses | $ (3,846) | $ (3,810) |
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 | 1 | 0 |
Debt securities, greater than 12 months, number of issues | Security | 64 | 66 |
Debt securities, number of issues | Security | 65 | 66 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 92 | $ 0 |
Debt securities, greater than 12 months, fair value | 30,014 | 30,495 |
Debt securities, fair value | 30,106 | 30,495 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | (8) | 0 |
Debt securities, greater than 12 months, unrealized losses | (3,594) | (3,507) |
Debt securities, total unrealized losses | $ (3,602) | $ (3,507) |
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 | 1 | 1 |
Debt securities, greater than 12 months, number of issues | Security | 8 | 21 |
Debt securities, number of issues | Security | 9 | 22 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 600 | $ 1,090 |
Debt securities, greater than 12 months, fair value | 10,801 | 16,270 |
Debt securities, fair value | 11,401 | 17,360 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | (1) | (1) |
Debt securities, greater than 12 months, unrealized losses | (346) | (583) |
Debt securities, total unrealized losses | $ (347) | $ (584) |
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 | 0 | 4 |
Debt securities, greater than 12 months, number of issues | Security | 67 | 64 |
Debt securities, number of issues | Security | 67 | 68 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 0 | $ 11 |
Debt securities, greater than 12 months, fair value | 20,628 | 22,116 |
Debt securities, fair value | 20,628 | 22,127 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | 0 | (1) |
Debt securities, greater than 12 months, unrealized losses | (5,162) | (4,640) |
Debt securities, total unrealized losses | $ (5,162) | $ (4,641) |
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 | 0 | 0 |
Debt securities, greater than 12 months, number of issues | Security | 4 | 4 |
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 | $ 0 | $ 0 |
Debt securities, greater than 12 months, fair value | 3,196 | 3,225 |
Debt securities, fair value | 3,196 | 3,225 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | 0 | 0 |
Debt securities, greater than 12 months, unrealized losses | (105) | (160) |
Debt securities, total unrealized losses | $ (105) | $ (160) |
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 | 0 | 0 |
Debt securities, greater than 12 months, number of issues | Security | 30 | 32 |
Debt securities, number of issues | Security | 30 | 32 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Debt securities, less than 12 months, fair value | $ 0 | $ 0 |
Debt securities, greater than 12 months, fair value | 2,620 | 2,803 |
Debt securities, fair value | 2,620 | 2,803 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Debt securities, less than 12 months, unrealized losses | 0 | 0 |
Debt securities, greater than 12 months, unrealized losses | (427) | (444) |
Debt securities, total unrealized losses | $ (427) | $ (444) |
Investments - Net Investment In
Investments - Net Investment Income and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Net Investment Income [Line Items] | ||||
Investment income | $ 1,556 | $ 1,414 | $ 3,169 | $ 2,781 |
Investment expenses | (51) | (60) | (112) | (120) |
Net investment income | 1,505 | 1,354 | 3,057 | 2,661 |
Debt securities | ||||
Net Investment Income [Line Items] | ||||
Investment income | 1,196 | 1,026 | 2,421 | 1,879 |
Equity securities | ||||
Net Investment Income [Line Items] | ||||
Investment income | 12 | 7 | 23 | 18 |
Cash, cash equivalents and short-term investments | ||||
Net Investment Income [Line Items] | ||||
Investment income | $ 348 | $ 381 | $ 725 | $ 884 |
Investments - Gross Realized Ga
Investments - Gross Realized Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Debt securities: | ||||
Gross realized gains | $ 0 | $ 0 | $ 0 | $ 0 |
Gross realized losses | 0 | 0 | 0 | 0 |
Total debt securities | 0 | 0 | 0 | 0 |
Equity securities: | ||||
Gross realized gains | 0 | 0 | 0 | 0 |
Gross realized losses | (118) | 0 | (118) | 0 |
Total equity securities | (118) | 0 | (118) | 0 |
Total net realized investment gains (losses) | $ (118) | $ 0 | $ (118) | $ 0 |
Investments - Available-for-s_3
Investments - Available-for-sale Fixed Maturity Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Amortized Cost | ||
Due in one year or less | $ 4,722 | |
Due after one year through five years | 30,953 | |
Due after five years through ten years | 17,183 | |
Due after ten years | 10,670 | |
Securities with contractual maturities | 63,528 | |
Total debt securities | 132,889 | $ 135,370 |
Estimated Fair Value | ||
Due in one year or less | 4,661 | |
Due after one year through five years | 28,823 | |
Due after five years through ten years | 14,379 | |
Due after ten years | 8,062 | |
Securities with contractual maturities | 55,925 | |
Total debt securities | 119,371 | 122,113 |
Asset-backed securities | ||
Amortized Cost | ||
Total debt securities | 37,223 | 38,289 |
Estimated Fair Value | ||
Total debt securities | 37,002 | 37,752 |
Mortgage-backed securities | ||
Amortized Cost | ||
Total debt securities | 25,790 | 26,768 |
Estimated Fair Value | ||
Total debt securities | 20,628 | 22,127 |
Commercial mortgage-backed securities | ||
Amortized Cost | ||
Total debt securities | 3,301 | 3,404 |
Estimated Fair Value | ||
Total debt securities | 3,196 | 3,244 |
Collateralized mortgage obligations | ||
Amortized Cost | ||
Total debt securities | 3,047 | 3,228 |
Estimated Fair Value | ||
Total debt securities | $ 2,620 | $ 2,784 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Assets: | ||
Total debt securities | $ 119,371 | $ 122,113 |
Equity Securities | 357 | 896 |
Short-term investments | 23,339 | 20,838 |
Total marketable investments measured at fair value | 143,067 | 143,847 |
Total assets measured at fair value | 144,370 | 145,305 |
Liabilities: | ||
Total Liabilities (non-recurring fair value measure) | 27,197 | 21,756 |
U.S. Government | ||
Assets: | ||
Total debt securities | 5,693 | 5,247 |
State and local government | ||
Assets: | ||
Total debt securities | 20,126 | 20,464 |
Corporate debt | ||
Assets: | ||
Total debt securities | 30,106 | 30,495 |
Asset-backed securities | ||
Assets: | ||
Total debt securities | 37,002 | 37,752 |
Mortgage-backed securities | ||
Assets: | ||
Total debt securities | 20,628 | 22,127 |
Commercial mortgage-backed securities | ||
Assets: | ||
Total debt securities | 3,196 | 3,244 |
Collateralized mortgage obligations | ||
Assets: | ||
Total debt securities | 2,620 | 2,784 |
Senior Unsecured Notes | ||
Liabilities: | ||
Debt | 17,887 | 11,791 |
Senior Secured Notes | ||
Liabilities: | ||
Debt | 9,310 | |
Subordinated notes | ||
Liabilities: | ||
Debt | 9,965 | |
Partnership interest | ||
Assets: | ||
Investments measured at NAV | 1,303 | 1,458 |
Level 1 | ||
Assets: | ||
Total debt securities | 0 | 0 |
Equity Securities | 137 | 139 |
Short-term investments | 23,339 | 20,838 |
Total marketable investments measured at fair value | 23,476 | 20,977 |
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 | Senior Secured Notes | ||
Liabilities: | ||
Debt | 0 | |
Level 1 | Subordinated notes | ||
Liabilities: | ||
Debt | 0 | |
Level 2 | ||
Assets: | ||
Total debt securities | 119,371 | 122,113 |
Equity Securities | 220 | 757 |
Short-term investments | 0 | 0 |
Total marketable investments measured at fair value | 119,591 | 122,870 |
Liabilities: | ||
Total Liabilities (non-recurring fair value measure) | 17,887 | 11,791 |
Level 2 | U.S. Government | ||
Assets: | ||
Total debt securities | 5,693 | 5,247 |
Level 2 | State and local government | ||
Assets: | ||
Total debt securities | 20,126 | 20,464 |
Level 2 | Corporate debt | ||
Assets: | ||
Total debt securities | 30,106 | 30,495 |
Level 2 | Asset-backed securities | ||
Assets: | ||
Total debt securities | 37,002 | 37,752 |
Level 2 | Mortgage-backed securities | ||
Assets: | ||
Total debt securities | 20,628 | 22,127 |
Level 2 | Commercial mortgage-backed securities | ||
Assets: | ||
Total debt securities | 3,196 | 3,244 |
Level 2 | Collateralized mortgage obligations | ||
Assets: | ||
Total debt securities | 2,620 | 2,784 |
Level 2 | Senior Unsecured Notes | ||
Liabilities: | ||
Debt | 17,887 | 11,791 |
Level 2 | Senior Secured Notes | ||
Liabilities: | ||
Debt | 0 | |
Level 2 | Subordinated notes | ||
Liabilities: | ||
Debt | 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) | 9,310 | 9,965 |
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 | Senior Secured Notes | ||
Liabilities: | ||
Debt | $ 9,310 | |
Level 3 | Subordinated notes | ||
Liabilities: | ||
Debt | $ 9,965 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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 | 16% | 15% |
Level 2 | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Marketable investment percentage | 84% | 85% |
Senior Secured Notes | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Debt | $ 9,310,000 | |
Senior Secured Notes | Level 1 | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Debt | 0 | |
Senior Secured Notes | Level 2 | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Debt | 0 | |
Senior Secured Notes | Level 3 | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Debt | $ 9,310,000 |
Deferred Policy Acquisition C_3
Deferred Policy Acquisition Costs - Activity in Deferred Policy Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||||
Balance at beginning of period | $ 5,663 | $ 8,326 | $ 6,285 | $ 10,290 |
Deferred policy acquisition costs | 414 | 5,587 | 6,805 | 8,344 |
Amortization of policy acquisition costs | (1,471) | (4,413) | (8,484) | (9,134) |
Net change | (1,057) | 1,174 | (1,679) | (790) |
Balance at end of period | $ 4,606 | $ 9,500 | $ 4,606 | $ 9,500 |
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 | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||||
Gross reserves - beginning of period | $ 175,826 | $ 145,362 | $ 174,612 | $ 165,539 | $ 165,539 |
Less: reinsurance recoverables on unpaid losses | (73,807) | (61,101) | (70,807) | (82,651) | (82,651) |
Net reserves - beginning of period | 102,019 | 84,261 | 103,805 | 82,888 | 82,888 |
Add: incurred losses and LAE, net of reinsurance: | |||||
Current period | 12,481 | 18,797 | 23,462 | 33,723 | |
Prior period | 2,800 | 522 | 2,339 | (691) | |
Total net incurred losses and LAE | 15,281 | 19,319 | 25,801 | 33,032 | |
Deduct: loss and LAE payments, net of reinsurance: | |||||
Current period | 7,206 | 7,454 | 10,068 | 9,441 | |
Prior period | 9,666 | 7,627 | 19,110 | 17,980 | |
Total net loss and LAE payments | 16,872 | 15,081 | 29,178 | 27,421 | |
Net reserves - end of period | 100,428 | 88,499 | 100,428 | 88,499 | 103,805 |
Plus: reinsurance recoverables on unpaid losses | 74,358 | 56,505 | 74,358 | 56,505 | 70,807 |
Gross reserves - end of period | $ 174,786 | $ 145,004 | $ 174,786 | $ 145,004 | $ 174,612 |
Unpaid Losses and Loss Adjust_4
Unpaid Losses and Loss Adjustment Expenses - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||
Decrease in losses and loss adjustment expenses | $ 4,000,000 | |||||||
Decrease in losses and loss adjustment expenses, percentage | 20.90% | |||||||
Losses and loss adjustment expenses, net | $ 15,281,000 | $ 19,319,000 | $ 25,801,000 | $ 33,032,000 | ||||
Prior year adjustments | 2,800,000 | 522,000 | 2,339,000 | (691,000) | ||||
Development expenses, net | 100,428,000 | 88,499,000 | 100,428,000 | 88,499,000 | $ 102,019,000 | $ 103,805,000 | $ 84,261,000 | $ 82,888,000 |
Prior year claims and claims adjustment expenses | 9,900,000 | 4,600,000 | 9,900,000 | 4,600,000 | ||||
Loss Portfolio Transfer (LPT) | ||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||
Prior year claims and claims adjustment expenses | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | ||||
Accident Year 2022 | Personal Line | ||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||
Prior year adjustments | 411,000 | |||||||
Accident Year 2021 Through 2022 | Commercial Line | ||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||
Prior year adjustments | 2,100,000 | |||||||
Accident Year 2023 | Personal Line | ||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||
Prior year adjustments | $ 747,000 | |||||||
Accident Year 2024 | ||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||
Decrease in losses and loss adjustment expenses | $ 6,300,000 | |||||||
Accident Year 2024 | Commercial Line | ||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||
Losses and loss adjustment expenses, net | 1,000,000 | |||||||
Accident Year 2024 | Personal Line | ||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||
Losses and loss adjustment expenses, net | 4,500,000 | |||||||
Accident Year 2019 and Prior Accident Years | Loss Portfolio Transfer (LPT) | ||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||
Prior year adjustments | 2,200,000 | |||||||
Development expenses, net | $ 0 | $ 0 |
Reinsurance - Narrative (Detail
Reinsurance - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2022 | |
Effects Of Reinsurance [Line Items] | |||||||||
Ceded premium written | $ 5,724,000 | $ 15,346,000 | $ 14,646,000 | $ 33,218,000 | |||||
Ceded premiums earned | 12,715,000 | 12,830,000 | 30,060,000 | 25,172,000 | |||||
Reinsurance recoverables on paid losses | 8,614,000 | 8,614,000 | $ 12,619,000 | ||||||
Stated net reserves retained | 100,428,000 | 88,499,000 | 100,428,000 | 88,499,000 | 103,805,000 | $ 102,019,000 | $ 84,261,000 | $ 82,888,000 | |
Losses and loss adjustment expenses, net | 15,281,000 | 19,319,000 | 25,801,000 | 33,032,000 | |||||
Prior period | 2,800,000 | 522,000 | 2,339,000 | (691,000) | |||||
Reinsurance recoverables on unpaid losses | 74,358,000 | $ 56,505,000 | 74,358,000 | 56,505,000 | 70,807,000 | $ 73,807,000 | $ 61,101,000 | $ 82,651,000 | |
Loss Portfolio Transfer (“LPT”) Reinsurance Agreement | |||||||||
Effects Of Reinsurance [Line Items] | |||||||||
Reinsurance recoverables on paid losses | 3,900,000 | 3,900,000 | 3,800,000 | ||||||
Reinsurance recoverables on unpaid losses | $ 6,000,000 | 6,000,000 | 10,900,000 | ||||||
100% Quota Share Reinsurance Agreement | |||||||||
Effects Of Reinsurance [Line Items] | |||||||||
Ceded premium written | $ 30,900,000 | ||||||||
100% Quota Share Reinsurance Agreement | Maximum | |||||||||
Effects Of Reinsurance [Line Items] | |||||||||
Percentage of commission ceded, net | 27% | ||||||||
100% Quota Share Reinsurance Agreement | Minimum | |||||||||
Effects Of Reinsurance [Line Items] | |||||||||
Percentage of commission ceded, net | 22% | ||||||||
100% Cede of Commercial Liability Risks In Excess of $400,000 | |||||||||
Effects Of Reinsurance [Line Items] | |||||||||
Amount retained (excess of) | 400,000 | 400,000 | |||||||
Corridor | Loss Portfolio Transfer (“LPT”) Reinsurance Agreement | |||||||||
Effects Of Reinsurance [Line Items] | |||||||||
Losses and loss adjustment expenses, net | 5,500,000 | 5,500,000 | |||||||
Layer | Loss Portfolio Transfer (“LPT”) Reinsurance Agreement | Maximum | |||||||||
Effects Of Reinsurance [Line Items] | |||||||||
Losses and loss adjustment expenses, net | 20,000,000 | 20,000,000 | |||||||
Layer | Loss Portfolio Transfer (“LPT”) Reinsurance Agreement | Minimum | |||||||||
Effects Of Reinsurance [Line Items] | |||||||||
Losses and loss adjustment expenses, net | 9,900,000 | $ 9,100,000 | |||||||
Ceded Commercial Property Risks In Excess of $200,000 | |||||||||
Effects Of Reinsurance [Line Items] | |||||||||
Amount retained (excess of) | 400,000 | 400,000 | |||||||
Ceded Homeowners Specific Risks In Excess of $300,000 | |||||||||
Effects Of Reinsurance [Line Items] | |||||||||
Amount retained (excess of) | $ 400,000 | $ 300,000 |
Reinsurance - Effects of Reinsu
Reinsurance - Effects of Reinsurance and Assumption Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Written premiums: | ||||
Direct | $ 19,200 | $ 27,183 | $ 43,299 | $ 51,524 |
Assumed | (229) | 17,491 | (15) | 29,364 |
Ceded | (5,724) | (15,346) | (14,646) | (33,218) |
Net written premiums | 13,247 | 29,328 | 28,638 | 47,670 |
Earned premiums: | ||||
Direct | 24,226 | 23,597 | 49,034 | 46,912 |
Assumed | 5,155 | 12,416 | 14,579 | 23,395 |
Ceded | (12,715) | (12,830) | (30,060) | (25,172) |
Net earned premiums | 16,666 | 23,183 | 33,553 | 45,135 |
Losses and LAE: | ||||
Direct | 8,850 | 24,570 | 30,832 | 26,539 |
Assumed | 14,249 | 4,261 | 10,985 | 5,758 |
Ceded | (7,818) | (9,512) | (16,016) | 735 |
Total net incurred losses and LAE | $ 15,281 | $ 19,319 | $ 25,801 | $ 33,032 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2024 | Dec. 31, 2023 | Sep. 30, 2023 | |
FHLB of Indianapolis | |||
Debt Instrument [Line Items] | |||
Debt issuance costs | $ 24,832,000 | $ 25,061,000 | |
Senior Unsecured Notes | FHLB of Indianapolis | |||
Debt Instrument [Line Items] | |||
Debt issuance costs | 16,385,000 | 16,208,000 | |
Senior Unsecured Notes | 9.75% Public Senior Unsecured Notes (New Public Notes) | |||
Debt Instrument [Line Items] | |||
Face amount of debt | $ 17,900,000 | $ 17,900,000 | |
Maturity date | Sep. 30, 2028 | ||
Interest rate | 9.75% | 9.75% | |
Interest rate, payment terms | interest rate of 9.75% per annum, payable quarterly at the end of March, June, September and December | ||
Debt issuance costs | $ 1,500,000 | ||
Senior Unsecured Notes | 6.75% Public Senior Unsecured notes (Old Public Notes) | |||
Debt Instrument [Line Items] | |||
Interest rate | 6.75% | ||
Senior Secured Notes | |||
Debt Instrument [Line Items] | |||
Call premium | $ 1,800,000 | ||
Outstanding debt | 9,300,000 | ||
Senior Secured Notes | FHLB of Indianapolis | |||
Debt Instrument [Line Items] | |||
Debt issuance costs | 8,447,000 | 8,853,000 | |
Senior Secured Notes | Privately Placed 12.5% Senior Secured Notes | |||
Debt Instrument [Line Items] | |||
Face amount of debt | $ 9,300,000 | ||
Maturity date | Sep. 30, 2028 | ||
Interest rate | 12.50% | 12.50% | |
Quarterly payment of principal | $ 250,000 | ||
Call premium percentage | 22% | ||
Concession made to the lender | $ 0 | ||
Debt issuance costs | $ 803,000 | ||
Restructuring costs incurred | $ 173,000 |
Debt - Outstanding Senior Debt
Debt - Outstanding Senior Debt (Details) - FHLB of Indianapolis - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Gross Debt | $ 27,137 | $ 27,637 |
Unamortized Debt Issuance Costs | 2,305 | 2,576 |
Debt Issuance Costs, Net, Total | 24,832 | 25,061 |
Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Gross Debt | 17,887 | 17,887 |
Unamortized Debt Issuance Costs | 1,502 | 1,679 |
Debt Issuance Costs, Net, Total | 16,385 | 16,208 |
Senior Secured Notes | ||
Debt Instrument [Line Items] | ||
Gross Debt | 9,250 | 9,750 |
Unamortized Debt Issuance Costs | 803 | 897 |
Debt Issuance Costs, Net, Total | $ 8,447 | $ 8,853 |
Debt - Scheduled Principal Paym
Debt - Scheduled Principal Payments of Company's Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Total | $ 24,832 | $ 25,061 |
Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
2024 | 500 | |
2025 | 1,000 | |
2026 | 1,000 | |
2027 | 1,000 | |
2028 | 5,750 | |
Total | 9,250 | |
Senior Secured Notes | ||
Debt Instrument [Line Items] | ||
2028 | 17,887 | |
Total | $ 17,887 |
Shareholder's Equity - Narrativ
Shareholder's Equity - Narrative (Details) $ / shares in Units, $ in Millions | 6 Months Ended | ||
Dec. 20, 2023 USD ($) Vote $ / shares shares | Jun. 30, 2024 Vote $ / shares shares | Dec. 31, 2023 $ / shares shares | |
Equity Class Of Treasury Stock [Line Items] | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0 | $ 0 | |
Preferred stock, shares issued | 1,000 | 1,000 | |
Preferred stock, shares outstanding | 1,000 | 1,000 | |
Common stock, shares issued (in shares) | 12,222,881 | 12,222,881 | |
Common stock, shares outstanding (in shares) | 12,222,881 | 12,222,881 | |
Common stock voting rights, number of votes per share | Vote | 1 | ||
Preferred Stock | |||
Equity Class Of Treasury Stock [Line Items] | |||
Preferred stock dividend rate | 8% | ||
Preferred shares dividend basis point | 2% | ||
Preferred stock equated to an annualized rate | 10.50% | ||
Preferred stock redemption description | The Company has the option to redeem the Preferred Stock at the end of any fiscal quarter, in whole or in part, at a price equal to issue price, plus the amount that would result in a 20.0%, compounded annually, annualized return to the holder (inclusive of the dividends paid), on the portion being redeemed. | ||
Preferred stock redemption percentage | 20% | ||
Conversion of preferred stock in to common stock | 4,000 | ||
Preferred stock, shares issued | 1,000 | 1,000 | |
Preferred stock, shares outstanding | 1,000 | 1,000 | |
Preferred Stock | Series A Preferred Stock | |||
Equity Class Of Treasury Stock [Line Items] | |||
Preferred stock voting rights, number of votes per share | Vote | 0 | ||
Common stocks | |||
Equity Class Of Treasury Stock [Line Items] | |||
Common stock, shares issued (in shares) | 12,222,881 | 12,222,881 | |
Common stock, shares outstanding (in shares) | 12,222,881 | 12,222,881 | |
Private placement | Preferred Stock | Series A Preferred Stock | |||
Equity Class Of Treasury Stock [Line Items] | |||
Shares issued | $ | $ 6 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0 | ||
Shares issued (in shares) | 1,000 | ||
Offering price per share (in dollars per share) | $ / shares | $ 6,000 | ||
Maturity date | Jun. 30, 2026 |
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 | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | ||
Earnings Per Share [Abstract] | |||||
Net income (loss) | $ (3,792) | $ (4,739) | $ (3,561) | $ (3,738) | |
Preferred stock dividends | 158 | 0 | 315 | 0 | |
Net income (loss) allocable to common shareholders | $ (3,950) | $ (4,739) | $ (3,876) | $ (3,738) | |
Weighted average common shares outstanding, basic | [1] | 12,222,881 | 12,220,331 | 12,222,881 | 12,218,102 |
Weighted average common shares outstanding, diluted | [1] | 12,222,881 | 12,220,331 | 12,222,881 | 12,218,102 |
Earnings (loss) per common share, basic | $ (0.32) | $ (0.39) | $ (0.32) | $ (0.31) | |
Earnings (loss) per common share, diluted | $ (0.32) | $ (0.39) | $ (0.32) | $ (0.31) | |
[1] The non-vested shares of the restricted stock units and stock options were anti-dilutive as of June 30, 2023. Therefore, the basic and diluted weighted average common shares are equal for the three and six months ended June 30, 2024 and 2023. |
Earnings Per Share - Basic an_2
Earnings Per Share - Basic and Diluted Income (Loss) Per Common Share (Parenthetical) (Details) | 6 Months Ended |
Jun. 30, 2024 shares | |
Earnings Per Share [Abstract] | |
Total of convertible preferred shares, antidilutive securities excluded from computation of earnings per share | 4,000,000 |
Unvested restricted stock units | 0 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 08, 2022 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2020 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation nonvested shares | 0 | 0 | |||||
Employee 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 | |||||
Estimated grant date fair value of options issued to purchase shares of common stock | $ 612,000 | $ 290,000 | |||||
Expiration date | Mar. 08, 2032 | Jun. 30, 2030 | |||||
Share-based compensation expense | $ 38,000 | $ 44,000 | $ 70,000 | $ 86,000 | |||
Share-based compensation expense not yet recognized | $ 374,000 | $ 374,000 | |||||
Share-based compensation nonvested shares | 424,000 | 424,000 | |||||
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 | $ 2.4 | ||||||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | $ 0 | $ 4,000 | $ 0 | $ 17,000 | |||
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 | ||||||
Shares granted in period | $ 404,000 | ||||||
Share-based compensation nonvested shares | 0 | 0 |
Segment Information - Narrative
Segment Information - Narrative (Details) - Business | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information [Line Items] | ||
Number of businesses | 3 | |
Gross Written Premiums | Geographic Concentration Risk | Texas, Michigan, Oklahoma and Indiana | ||
Segment Reporting Information [Line Items] | ||
Concentration risk | 85.10% | 47.10% |
Segment Information - Informati
Segment Information - Information by Reportable Operating Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information [Line Items] | ||||
Gross written premiums | $ 18,971 | $ 44,674 | $ 43,284 | $ 80,888 |
Net written premiums | 13,247 | 29,328 | 28,638 | 47,670 |
Net earned premiums | 16,666 | 23,183 | 33,553 | 45,135 |
Agency commission income | 8,831 | 211 | 13,167 | 641 |
Other income | 160 | 187 | 420 | 383 |
Segment revenue | 25,657 | 23,581 | 47,140 | 46,159 |
Losses and LAE, net | 15,281 | 19,319 | 25,801 | 33,032 |
Policy acquisition costs | 10,480 | 4,413 | 17,493 | 9,134 |
Operating expenses | 4,256 | 5,114 | 8,751 | 9,393 |
Segment expenses | 30,017 | 28,846 | 52,045 | 51,559 |
Segment gain (loss) | (4,360) | (5,265) | (4,905) | (5,400) |
Net investment income | 1,505 | 1,354 | 3,057 | 2,661 |
Net realized investment gains (losses) | (118) | 0 | (118) | 0 |
Change in fair value of equity securities | (196) | (12) | (153) | 682 |
Interest expense | (869) | (820) | (1,746) | (1,506) |
Income (loss) before equity earnings in Affiliate and income taxes | (4,038) | (4,743) | (3,865) | (3,563) |
Operating Segments | Commercial Lines | ||||
Segment Reporting Information [Line Items] | ||||
Gross written premiums | 6,782 | 34,761 | 19,544 | 63,736 |
Net written premiums | 4,285 | 20,485 | 12,572 | 32,726 |
Net earned premiums | 8,681 | 17,487 | 17,478 | 34,610 |
Other income | 19 | 56 | 69 | 108 |
Segment revenue | 8,700 | 17,543 | 17,547 | 34,718 |
Losses and LAE, net | 6,906 | 13,597 | 13,672 | 24,144 |
Policy acquisition costs | 1,155 | 2,966 | 2,302 | 6,162 |
Operating expenses | 1,050 | 3,600 | 2,798 | 6,628 |
Segment expenses | 9,111 | 20,163 | 18,772 | 36,934 |
Segment gain (loss) | (411) | (2,620) | (1,225) | (2,216) |
Income (loss) before equity earnings in Affiliate and income taxes | (411) | (2,620) | (1,225) | (2,216) |
Operating Segments | Personal Lines | ||||
Segment Reporting Information [Line Items] | ||||
Gross written premiums | 12,189 | 9,913 | 23,740 | 17,152 |
Net written premiums | 8,962 | 8,843 | 16,066 | 14,944 |
Net earned premiums | 7,985 | 5,696 | 16,075 | 10,525 |
Other income | 20 | 23 | 48 | 46 |
Segment revenue | 8,005 | 5,719 | 16,123 | 10,571 |
Losses and LAE, net | 8,375 | 5,722 | 12,129 | 8,888 |
Policy acquisition costs | 2,236 | 1,453 | 4,249 | 2,842 |
Operating expenses | 926 | 792 | 1,897 | 1,384 |
Segment expenses | 11,537 | 7,967 | 18,275 | 13,114 |
Segment gain (loss) | (3,532) | (2,248) | (2,152) | (2,543) |
Income (loss) before equity earnings in Affiliate and income taxes | (3,532) | (2,248) | (2,152) | (2,543) |
Operating Segments | Total Underwriting | ||||
Segment Reporting Information [Line Items] | ||||
Gross written premiums | 18,971 | 44,674 | 43,284 | 80,888 |
Net written premiums | 13,247 | 29,328 | 28,638 | 47,670 |
Net earned premiums | 16,666 | 23,183 | 33,553 | 45,135 |
Other income | 39 | 79 | 117 | 154 |
Segment revenue | 16,705 | 23,262 | 33,670 | 45,289 |
Losses and LAE, net | 15,281 | 19,319 | 25,801 | 33,032 |
Policy acquisition costs | 3,391 | 4,419 | 6,551 | 9,004 |
Operating expenses | 1,976 | 4,392 | 4,695 | 8,012 |
Segment expenses | 20,648 | 28,130 | 37,047 | 50,048 |
Segment gain (loss) | (3,943) | (4,868) | (3,377) | (4,759) |
Income (loss) before equity earnings in Affiliate and income taxes | (3,943) | (4,868) | (3,377) | (4,759) |
Operating Segments | Wholesale Agency | ||||
Segment Reporting Information [Line Items] | ||||
Agency commission income | 13,688 | 560 | 24,282 | 1,390 |
Other income | 83 | 34 | 194 | 83 |
Segment revenue | 13,771 | 594 | 24,476 | 1,473 |
Policy acquisition costs | 11,005 | 349 | 20,124 | 897 |
Operating expenses | 2,046 | 365 | 3,679 | 717 |
Segment expenses | 13,051 | 714 | 23,803 | 1,614 |
Segment gain (loss) | 720 | (120) | 673 | (141) |
Income (loss) before equity earnings in Affiliate and income taxes | 720 | (120) | 673 | (141) |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Other income | 38 | 74 | 109 | 146 |
Segment revenue | 38 | 74 | 109 | 146 |
Operating expenses | 234 | 357 | 377 | 664 |
Segment expenses | 234 | 357 | 377 | 664 |
Segment gain (loss) | (196) | (283) | (268) | (518) |
Net investment income | 1,505 | 1,354 | 3,057 | 2,661 |
Net realized investment gains (losses) | (118) | (118) | ||
Change in fair value of equity securities | (196) | (12) | (153) | 682 |
Interest expense | (869) | (820) | (1,746) | (1,506) |
Income (loss) before equity earnings in Affiliate and income taxes | 126 | 239 | 772 | 1,319 |
Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Agency commission income | (4,857) | (349) | (11,115) | (749) |
Other income | 0 | 0 | 0 | 0 |
Segment revenue | (4,857) | (349) | (11,115) | (749) |
Policy acquisition costs | (3,916) | (355) | (9,182) | (767) |
Segment expenses | (3,916) | (355) | (9,182) | (767) |
Segment gain (loss) | (941) | 6 | (1,933) | 18 |
Income (loss) before equity earnings in Affiliate and income taxes | $ (941) | $ 6 | $ (1,933) | $ 18 |